NHPPlc Annual Report& Accounts 2002 01 FINANCIAL HIGHLIGHTS
02 CHAIRMAN’S STATEMENT
04 CHIEF EXECUTIVE’S REVIEW
12 FINANCIAL REVIEW
15 COMPANY INFORMATION
16 DIRECTORS
18 DIRECTORS’ REPORT
21 REPORT OF THE REMUNERATION
COMMITTEE
25 STATEMENT ON CORPORATE
GOVERNANCE
28 STATEMENT OF DIRECTORS’
RESPONSIBILITIES
29 INDEPENDENT AUDITORS’ REPORT 
30 CONSOLIDATED PROFIT AND 
LOSS ACCOUNT
31 CONSOLIDATED BALANCE SHEET
Care Centres on the front cover:
Top: The Beeches
Care Centre, Dunfermline
Middle: St Margaret’s
Care Centre, Durham City
Bottom: Crompton Court
Care Centre, Liverpool
32 COMPANY BALANCE SHEET
33 CONSOLIDATED CASH FLOW
STATEMENT
34 CONSOLIDATED STATEMENT OF TOTAL
RECOGNISED GAINS AND LOSSES
34 CONSOLIDATED RECONCILIATION OF
MOVEMENTS IN SHAREHOLDERS’ FUNDS
34 CONSOLIDATED NOTE OF HISTORICAL
COST PROFITS AND LOSSES
35 NOTES TO THE ACCOUNTS
63 BONDHOLDER INFORMATION
64 PORTFOLIO ANALYSIS
65 PROPERTIES MANAGED BY
HIGHFIELD CARE
66 SHAREHOLDER INFORMATION
67 NOTICE OF ANNUAL GENERAL MEETING
68 FIVE YEAR FINANCIAL SUMMARY
NHP is determined to provide the very highest quality
buildings for its tenants and to provide the highest quality
care to residents in its homes. If we can do this in a timely
and efficient manner , our residents, staff, business
partners and shareholders will all benefit.
NHP Plc Annual Report & Accounts 2002 NHP Plc  1
Financial highlights
The strategy to consolidate our tenant base has
improved our earnings considerably this year and, more
importantly, will improve the quality of future years’
earnings. In addition, the formation of an operating
business – Highfield Care – has created a potentially
valuable asset for shareholders.
2002
2001
2000
Profit/(loss) before tax £m
(13.7)
10.0
16.4
2002
2001
2000
Net recourse borrowings £m
138.4
93.8
51.5
2002
2001
2000
Net asset value per Ordinary Share pence
51.4
65.5
103.4
• Profit before tax of £16.4 million (2001: £10.0 million), after
an exceptional credit of £0.2 million (2001: exceptional
costs of £4.7 million)
• Earnings per Ordinary Share of 10.1p (2001: 8.1p,
restated for the effects of the Rights Issue)
• Net asset value per Ordinary Share up by 58 per cent
to 103.4p (2001: 65.5p, restated for the effects of the
Rights Issue)
• Tenant consolidation successfully implemented – four
tenants, including Highfield Care, manage 86 per cent
of NHP beds 
• National operating business, Highfield Care, has grown
significantly. At 30 September 2002, Highfield Care
managed 158 NHP homes and 23 homes owned by
third parties 
• A successful Rights Issue and a new bank facility were
completed in July. Net recourse borrowings at year
end were reduced by £42.3 million to £51.5 million
(2001: £93.8 million) Chairman’ s statement
Financial results
Turnover for the year to 30 September
2002 was significantly higher at
£126.0 million (2001: £76.6 million),
due to the substantial expansion in
numbers of homes transferred into
Highfield Care. Profit before taxation
was £16.4 million (2001: £10.0 million)
after a provision for bad debts of £4.8
million (2001: £10.3 million) and an
exceptional credit of £0.2 million (2001:
exceptional costs of £4.7 million).
Earnings per Ordinary Share were up
by 25 per cent to 10.1p (2001: 8.1p,
restated for the effects of the Rights
Issue during the year). There was a
tax credit of £0.5 million (2001: credit
of £2.4 million). 
The net exceptional credit of £0.2 million
comprises primarily tenant receivership
costs of £1.5 million (2001: £0.5 million)
and a credit of £1.5 million (2001: charge
of £1.7 million) representing a write
back of prior charges for permanent
diminution of asset values. 
The creation of our Highfield Care
business to operate many of the care
homes owned by NHP has meant that
Both businesses made steady
progress this year. We have added
109 NHP homes to the operating
business and the property business
has seen a significant improvement in
the rent collection from, and covenant
strength of, its tenant base (including
Highfield Care). This improvement has
been reflected in greatly increased
asset values. 
The successful transformation of NHP
was effected as planned despite the
operating environment for the publicly
funded care home industry generally
continuing to be difficult in the UK. There
have been significant fee increases paid
by local authorities in some parts of the
UK, generally triggered by a localised
supply and demand imbalance.
However , margin pressures caused by
the rising costs of care provision have
resulted in continuing home closures.
The vast majority of local authorities
across the UK will not link their fees to
the rising cost of long term care for the
elderly . These factors, combined with
long NHS hospital waiting lists, have
pushed care for the elderly up the
political agenda. 
our properties now fall into two asset
classes: investment properties (leased
to third parties) and operated properties
(homes leased to Highfield Care). The
investment properties are re-valued
annually at 30 September by external,
independent valuers. From 30
September 2002 onwards, the
operated properties will also be re-
valued annually at that date by the same
external valuers. T aking the two asset
classes together , the value of our
properties at year-end was £643.3
million, representing a 9.5 per cent
increase over last year’ s £587.7 million. 
The uplift in the revaluation reserve of
£56.6 million together with the retained
profit for the year of £16.9 million and
the receipt of £31.9 million (net) in
proceeds from the Rights Issue
produced a 103 per cent increase in
shareholders’ funds to £207.7 million
(2001: £102.4 million). Net asset value
per NHP Ordinary Share rose by 58 per
cent to a year-end figure of 103.4p
(2001: 65.5p, restated for the effects of
the Rights Issue) and net recourse
borrowings were reduced to £51.5
million (2001: £93.8 million).
2 NHP Plc 
The year under review saw the transformation of NHP
into two distinct business units: the original property
business and the new operating business, Highfield
Care. Highfield Care provides NHP with a vehicle to
manage its owned homes as well as a potential source
of quality profits in the future. NHP Plc  3
Dividend
At the time of the Rights Issue,
announced in May , we said that
although the Board did not intend to
recommend a dividend in respect of the
year just ended, it was our intention to
return to the dividend list as soon as
possible thereafter . At that time, we
intended to apply to the Courts for a
reconstruction of capital to eliminate
negative distributable reserves which
existed as at 30 September 2001.
This would have allowed us to resume
dividend payments.
In the event, retained profit and the
effect of the increase in the valuation
of our properties have created
positive distributable reserves in the
holding Company . If trading remains
at current levels, the Directors would
expect to declare an interim dividend
in June 2003 of 0.5p per Ordinary
Share. In future we intend to pay
dividends to shareholders based
on the level of surplus funds
available after satisfying the capital
expenditure requirements of our
care home portfolio. 
Board and management
Our longest serving non-executive
Director , Arthur Bergbaum, retired
from the Board at the Annual General
Meeting in February . We thank him
for his contribution over the years
and wish him a long and happy
retirement.
In November , John Murphy became
Chief Executive of Highfield Care with
a brief to drive operational efficiency
forward and to deliver the highest
possible standards of care. John’ s
achievements to date in the care
home industry make him well qualified
to fulfil our ambitious strategic aims
for Highfield Care.
Outlook
We are successfully rebuilding value for
NHP shareholders and we are grateful
for their support of the successful
Rights Issue to raise £31.9 million (net)
during the year under review. A large
part of the strategy to achieve the goal
of rebuilding value was the creation of
our own operating capability . The Board
is encouraged with the progress made
to date by the Highfield Care team and,
with the appointment of John Murphy ,
believes we have begun to create a
potentially valuable asset for NHP
shareholders.
Our property-based activity has also
improved this year and, looking
forward, we believe that the level of
tenant receiverships will significantly
reduce. The property business will
also continue to benefit from the smaller
number of financially stronger tenants
now in place who can afford the
substantial investment necessary
to keep our homes in top condition.
At 30 September 2002, four tenants
(including Highfield Care) operated
86 per cent of the total number of
beds owned by NHP .
With both operating and property
businesses continuing to perform to
plan, I expect another year of progress
for NHP despite the difficult economic
environment within the publicly funded
care home industry .
Sir Martin Laing
Chairman
16 December 2002
2002
2001
5.5
Turnover split £m
Property business
Highfield Care
Group
56.6
69.4
126.0
76.6
71.1
Property business
Owned 210 care homes at 30 September
2002, largely purpose built modern
facilities, leased to third party operators
throughout the UK.
Homes: 210
Beds: 10,557
Highfield Care 
Formed in 2001, manages 158 NHP
homes and 23 homes owned by
third parties.
Homes: 181
Beds: 8,819 Chief Executive’ s review
4 NHP Plc 
NHP’s financial performance has improved significantly
in the year under review. Progress in both businesses
has increased our reported earnings but more
importantly, has increased the quality and predictability
of future earnings.
The UK care home industry
Over the past year , the sector has
had to deal with a number of changes
in the regulatory regime facing care
homes in the UK. The newly created
Care Standards Commissions for
England, Scotland, Wales and
Northern Ireland (four separate
organisations) this year took over
the regulation of all care homes.
Government policy with these bodies,
and generally towards the sector ,
has unfortunately proved to be both
confused and confusing, and has
not addressed the fundamental
problem of overall under-funding. 
Introduction 
NHP’ s financial performance has
improved significantly in the year
under review. The operating business,
Highfield Care, has grown its
operations to a national scale, allowing
us to begin to examine how to create,
and take full advantage of, operational
efficiencies. The property business
has successfully consolidated its
tenant base into a smaller , financially
stronger list. Progress in both
businesses has increased our
reported earnings but, more
importantly , has increased the quality
and predictability of future earnings.
Financial performance
Increase/
For the year ended 30 September 2002 2001 (decrease)
Turnover £126.0m £76.6m 64%
Pre-tax profits excluding exceptional income/(costs) £16.1m £14.7m 10%
Pre-tax profits including exceptional income/(costs) £16.4m £10.0m 64%
Basic earnings per Ordinary Share 10.1p 8.1p* 25%
Operating cash flow after interest £14.8m £7.3m 103%
Net assets per Ordinary Share 103.4p 65.5p* 58%
Shareholders’ funds £207.7m £102.4m 103%
Beds 18,395 18,721 (2%)
Investment and operated properties at book value £643.3m £587.7m 9%
Investment and operated properties at cost £659.6m £662.1 m 0%
*Restated for the effects of the Rights Issue in July 2002. NHP Plc  5
The National Care Standards
Commission – regulating only England –
was due to impose over the next five
years a comprehensive package of
physical property , staff and training
requirements contained in the Care
Standards legislation. Disappointingly ,
the property standards will for the time
being only be applied to new-build
homes after a change of mind by the
Department of Health. This U-turn
followed Government recognition that
too many properties, with owners
unable to afford catch-up investment,
would close and possibly thousands of
much needed care beds would be lost
in addition to those already leaving the
market. It remains to be seen what the
situation will be in Scotland, Wales and
Northern Ireland.
NHP believes that the UK public has a
right to expect high national minimum
standards in caring for our elderly
citizens. However , we recognise that
until the Government provides sufficient
encouragement to local authorities to
pay fees which fully reflect the cost of
care, many operators will not be able to
meet increased property and training
standards. The vast majority of NHP
beds meet the originally proposed
property standards. It is too early to tell
how effective the new regulatory bodies
will ultimately become but we hope that
current problems and long delays in the
registration and inspection processes
will be addressed in the short term.
T urning to fee levels, the Government,
in this year’ s Budget, increased the
budgets of local authorities’ social
services departments by six per cent.
However , none of the increase was ring-
fenced for elderly care – it was merely
hoped that additional funds would be
made available at the home level.
What this has meant in practice is that
beds continue to be lost in the areas
where publicly funded care home
fees remain below the cost of care.
Consequently , NHS bed blocking
and long waiting lists continue to be
serious national problems.
A huge problem facing care home
operators throughout the UK is wage
inflation as labour costs represent
around 60 per cent of the total costs
of running a care home. The rise in
National Insurance contributions next
April will also increase costs further . The
Minimum Wage has increased this year
only in line with inflation (compared to
last year’ s 11 per cent) but one of the
most serious issues facing the care
home industry is a shortage of care staff.
Competition for staff to work in care
homes from supermarkets, retail and
hospitality outlets and the NHS is
intense. Nursing wage costs are
expected this year to outstrip inflation
while additional NHS recruitment of
nurses has created sometimes severe
local shortages of trained staff. The level
of fee increases therefore remains
crucial with particularly low fee increases
being the norm in central and northern
England and Wales.
There is no doubt that the UK needs
substantial on-going investment into the
care home sector if it is to care properly
for its growing elderly population.
However , home closures are continuing
and new-builds are likely to remain at
very low levels because of the barriers to
entry created by the application of the
new physical property standards on
new-build homes. Sooner or later we
believe that the Government will have to
address the problem of this disincentive
to invest in new care homes, perhaps by
recognising that premium quality homes
should be able to charge fees which
reflect the quality of care delivered.
Left: Larchwood Care Centre,
Braintree, Essex 6 NHP Plc 
Chief Executive’s review  continued
Operating business
Highfield Care
Our operating business has grown substantially during
the year and comprised 181 homes at 30 September
2002, including 23 homes owned by third parties. This
growth was due to the acquisition of Highfield Holdings
Limited in December 2001 and the addition of NHP
owned care homes previously operated by third party
tenants that went into receivership. The management
of Highfield Care has become skilled at minimising the
disruption caused by the receivership process whilst
keeping the homes open for business to ensure the
welfare of residents and staff. 
This year has seen the start of some
serious investment in the care
centres. This will make such a
difference to my residents and staff.
SANDRA GRIERSON HOME MANAGER NHP Plc  7
I’m looking forward to the
challenge of turning Highfield
Care into one of the UK’s premier
care home operators.
JOHN MURPHY CEO, HIGHFIELD CARE
Fifteen homes were taken out of
receivership during the year and
assigned to Highfield Care. We are
continuing the process of integrating
them and bringing their standards up
to ours. Three homes have been
transferred from receivership into
Highfield Care since 30 September
2002. The condition of many of the
homes was disappointing but not
surprising, given the lack of investment
by their former operators. We have
planned and are now implementing
a substantial programme of works
to improve the fabric of buildings,
equipment, gardens and staff training. 
Highfield Care, still in its development
phase, not surprisingly recorded an
operating loss for the year of £3.2 million
after being charged full rent of £15.6
million by the property business. NHP
properties with Highfield Care as the
registered operator were valued at
30 September 2002 on an existing use
basis at £159.9 million, representing an
uplift of £15.1 million over last year’ s
valuation of the same properties.
In order to build Highfield Care into an
operator with national coverage and the
necessary economies of scale, we have
deliberately increased the size of the
operational management overhead to
enable us to address the specific issues
relating to receiverships and to integrate
homes into our business quickly and
efficiently . Once this period of rapid
growth is over we will reduce the
overhead level with consequent benefit
to profitability . The review will be part of
the responsibilities of Highfield Care’ s
new Chief Executive, John Murphy . 
This year saw the beginning of a series
of initiatives to market the Highfield Care
brand to national audiences. We have
just completed the production of
brochures for each Highfield Care centre
– all with a common brand identity but
tailored to individual properties to reflect
the local nature of our business. Local
marketing is vital for the individual homes
and we have commenced a programme
of community sponsorship of school
sports and activities. In addition, we
have undertaken a carefully targeted
campaign of press advertisements
aimed at care purchasers and staff
recruitment.
With the growing size and importance
of Highfield Care, we have upgraded
incident reporting mechanisms and
T op left: The Vale Care Centre,
Chesterfield.
Above right: The new branded
marketing material for Highfield Care.
The new brochures do a great job in
combining national branding with
local relevance and sensitivity.
DEBBIE BARON HOME MANAGER 8 NHP Plc 
Scotland
Homes – 43
Beds – 2,607
North
Homes – 37
Beds – 1,907
North West 
Homes – 61
Beds – 3,440
Northern 
Ireland
Homes – 14
Beds – 756
South West
Homes – 14
Beds – 817
Wales
Homes – 28
Beds – 1,491
East 
Midlands 
Homes – 51
Beds – 2,160
East Anglia
Homes – 7
Beds – 102
South East 
Homes – 52
Beds – 1,895
Y&H
Homes – 29
Beds – 1,370
West 
Midlands
Homes – 37
Beds – 1,850
East Anglia
Highfield
Homes –
Beds –
NHP Property
Homes 7
Beds 102
Scotland
Highfield
Homes 26
Beds 1,488
NHP Property
Homes 17
Beds 1,119
North West
Highfield
Homes 22
Beds 1,049
NHP Property
Homes 39
Beds 2,391
North
Highfield
Homes 27
Beds 1,306
NHP Property
Homes 10
Beds 601
South East
Highfield
Homes 7
Beds 294
NHP Property
Homes 45
Beds 1,601
South West
Highfield
Homes 5
Beds 301
NHP Property
Homes 9
Beds 516
Wales
Highfield
Homes 4
Beds 177
NHP Property
Homes 24
Beds 1,314
Yorkshire &
Humberside
Highfield
Homes 15
Beds 657
NHP Property
Homes 14
Beds 713
West Midlands
Highfield
Homes 21
Beds 962
NHP Property
Homes 16
Beds 888
East Midlands
Highfield
Homes 28
Beds 1,246
NHP Property
Homes 23
Beds 914
Northern
Ireland
Highfield
Homes 3
Beds 173
NHP Property
Homes 11
Beds 583
Chief Executive’s review  continued
The Group’s portfolio of care homes is represented
across the UK with a growing proportion of the total
managed by Highfield Care.
as at 30 September 2002 NHP Plc  9
I’m very proud of the achievements of
my colleagues in reaching the
demanding ISO 9001 standards.
DAVID MCMAHON GROUP QUALITY
ASSURANCE MANAGER
enhanced our quality control
procedures. This has included an ISO
9001 home accreditation programme
under which the first 22 Highfield Care
homes have now received certification.
Looking ahead, one of our major
financial priorities is planning and
executing targeted investment in the
Highfield Care homes. In the year to
30 September 2002, we invested
£4.6 million in Highfield Care operated
properties and a larger amount is
planned for the current year . We will
also invest in extensions and additions
to selected homes and we currently
have a number of extension and major
refurbishment projects at various stages
of the planning process. In addition,
we have targeted specialist care (of the
physically and mentally impaired) as a
sector in which NHP will seek to grow
a much larger presence. T o this end,
we have charged one of our senior
management team, Saleem Asaria,
with identifying opportunities in this
area and bringing recommendations
to the Board to build a significant
specialist care business.
In the short term, Highfield Care will
continue its in-house development
through investment, training and
improved efficiencies. In the medium
term, we will examine all options open
to us to realise value for shareholders
from what, we believe, will become an
increasingly valuable asset. 
Left: Leeming Garth Care Centre,
near Northallerton 10 NHP Plc 
Right: Keresley Wood
Care Centre, Coventry
Middle right: Lavender Lodge
Care Centre, Farnborough
Far right: Kesteven Grange
Care Centre, Hull
Below far right: Fairview
Care Centre, Bannockburn
Below right: Brooklands
Care Centre, Grimsby
Below: Hygrove
Care Centre, Gloucester
The training we’re now receiving is
vital for my staff to be able to provide
the levels of care we aspire to.
MARY CURL Y REGIONAL MANAGER
Property business
NHP Property
NHP’s original business, where we act as landlord to
third party tenants, accounted for 75 per cent of the
portfolio by value at 30 September 2002 and will
account for 65 per cent of the portfolio by value when
the remaining homes which are managed by Highfield
Care are assigned out of the current receiverships.
The business has shown improved financial
performance during the year . 
Chief Executive’s review  continued NHP Plc  11
subsidiaries of Union Healthcare Group
Limited (with 41 homes in total).
Although modestly disruptive in the very
short term, the receiverships bring our
properties under our direct control and
we can ensure that from now on the
assets are cared for appropriately to
maintain and enhance their value. 
The property business should continue
to benefit this year from reduced
numbers of receiverships and lower
levels of rental voids. In addition, there is
the upside available from those homes
paying turnover rent (where NHP
receives a percentage of tenant homes’
turnover above a certain level) as
occupancy and fee levels increase.
Better performance is also expected at
those homes where we have invested
in refurbishment – with NHP funding
£1.4 million in third party tenants’
homes during the period under review
in addition to the £4.6 million spent in
homes operated by Highfield Care.
We will study carefully opportunities for
enlarging properties or even building
new homes in selective parts of the UK
with tenants we consider top class
operators but we believe the economic
case for new build is far from proven in
many parts of the UK.
Staff
We have begun the process of creating
a single unified team from the managers
and staff who worked for the operating
businesses which together form
Highfield Care. The goodwill and desire
to reach this objective was amply
demonstrated at the recent inaugural
Highfield Care Regional Managers’
Conference and I am encouraged by
the enthusiasm of our operational team.
During the year I have visited well over
100 of our care homes in all parts of the
UK. The people I met who are vital to the
successful operation of Highfield Care –
from regional managers and matrons to
nurses, carers and support staff – have
all proved to be dedicated, professional
and caring. Without their efforts, our
progress this year would have been
significantly reduced. I thank them all for
their hard work and dedication.
Bill Colvin
Chief Executive
16 December 2002
NHP owned 261 investment properties
(2001: 324) leased to third parties
which were valued at 30 September
2002 on an investment property basis
at £483.3 million (2001: £535.4 million).
On a like-for-like basis, these 261
properties increased in value by 9.7
per cent, largely due to improved
covenants as two of our largest
tenants, Southern Cross and Idun,
were themselves acquired by venture
capital backed companies.
Our strategy of tenant consolidation has
proved effective in increasing the
amount of rent collected (and therefore
reducing bad debts). The charge for
third party rent void in the property
business was reduced to £4.4 million
(2001: £10.3 million) reflecting the
benefits of consolidating the tenant
base and the inclusion of a number of
currently less profitable homes within
our own operating business. The NHP
independently managed tenant base
has more than halved over the last two
years to eleven companies. 
As we expected, there were a number
of further receiverships. The largest of
these were Harmony Care Homes
Limited (with 16 homes) and six
The new incentives provided
by Highfield Care’s terms and
conditions have really given us
all something to shoot for.
ELIZABETH ROSCOE REGIONAL MANAGER 12 NHP Plc 
Financial review
NHP is beginning to see the benefits of its high quality
asset portfolio in the earnings it derives from it – a
result of better management of our homes, both by
the smaller number of stronger third party tenants
and by Highfield Care. 
This Review provides a commentary
on the principal movements in the
Group accounts for the year to
30 September 2002 and an analysis
of the property business and
Highfield Care.
Profit and loss account
In the property business, rent receivable
from NHP care homes operated by
third parties totalled £56.6 million
(2001: £71.1 million) of which £3.4
million (2001: £3.6 million) represented
turnover rent. T urnover from the
operating business, Highfield Care,
was £69.4 million (2001: £5.5 million).
The two businesses produced a
combined turnover of £126.0 million
(2001: £76.6 million).
Profit before tax was £16.4 million
(2001: £10.0 million) after a provision
for bad debts of £4.8 million (2001:
£10.3 million) and an exceptional
credit of £0.2 million (2001: exceptional
costs of £4.7 million). The depreciation
charge for the Group increased to
£3.4 million (2001: £0.8 million). The
larger number of operated properties
accounted for £2.9 million (2001:
£0.6 million) of this charge.
The reduction of £5.4 million in provision
for bad debt is a reflection of the
financial strength of the smaller number
of tenants of NHP properties and the
rapid growth of Highfield Care. Whilst
results from the poorer performing
homes in our own operating business
have improved, Highfield Care reported
an operating loss for the year to 30
September 2002 of £3.2 million (2001:
operating profit of £0.1 million) after
NHP rent of £15.6 million (2001: £1.5
million) that included £1.2 million of
turnover rent (2001: £nil). 
The exceptional net credit for the period
was £0.2 million (2001: exceptional
costs of £4.7 million). The principal
credits were a £0.2 million writeback
from a provision made for closure
support costs of the Ultima Group
(2001: exceptional cost of £1.2 million)
and the net writeback of £1.5 million
(2001: exceptional cost of £1.7 million)
from the charge for permanent
diminution in value of the property
portfolio made in the profit and loss
account in 2000 and 2001. The cost
element of £1.5 million related to tenant
receiverships (2001: £0.5 million), of
which a major element was wages and NHP Plc  13
salaries due to the care homes’ staff
at the date a Receiver was appointed
and Highfield Care took over the
management of the homes concerned. 
During the year , four tenants went into
receivership as a result of continuing
difficult trading conditions. T wo small
tenants, Cherish Healthcare (MJN)
Limited (with two NHP homes) and
Loughbray Limited (one home) went
into receivership in October 2001 and
February 2002 respectively . Highfield
Care immediately took over the
management of the properties and
their trading performance was largely
unaffected. The two Cherish homes
are now out of receivership and re-
registered to Highfield Care.
Harmony Care Homes Limited and six
subsidiaries of Union Healthcare Group
Limited, were placed in receivership in
January 2002 and late September 2002
respectively . Harmony operated 16 NHP
homes and Union 41. In both cases,
Highfield Care took on the management
of the homes for the Receiver ,
minimising uncertainty for residents and
staff. Of the Harmony and Union homes,
45 are still in receivership (principally the
former Union homes) and 12 have been
re-registered with Highfield Care as the
operator at the date of this report.
Since 30 September 2002, Healthcare
Investments (No. 2) Limited, which
operated four of our homes, went into
receivership and Highfield Care are
managing the homes.
Due to the change of re-registration
responsibility to the new care regulatory
bodies in April 2002, the timetable to
complete the re-registration process
has been subject to considerable delay
that has had the effect of prolonging the
receiverships with a corresponding
increase in costs. 
Net interest payable and similar charges
reduced to £38.1 million (2001: £40.2
million), reflecting the lower bank
borrowings resulting from repayment of
bank debt from the proceeds of the
Rights Issue and cash generation from
the businesses. The average cost of
bank borrowing for the year was 6.0 per
cent compared with 7.3 per cent for
2001 as the Company benefited from
lower UK base rates. The blended fixed
rate of the unchanged £559.0 million of
non-recourse secured notes currently
outstanding, representing 91.2 per cent
of the Group’ s total debt, is 6.7 per cent. 
Earnings per Ordinary Share were 10.1p
(2001: 8.1p, restated for the effects of
the Rights Issue) after a tax credit of
£0.5 million (2001: credit of £2.4 million).
No provision has been made for
Corporation T ax (2001: £nil) because
available capital allowances exceed
taxable profits for the year and the
adoption of FRS 19, requiring us to
make full provision for deferred taxation
on all timing differences, has not resulted
in a deferred tax charge for prior periods
or for the period under review.
Balance sheet
At the year-end, the Group’ s property
portfolio comprised 373 care homes
(2001: 377 homes) with a total of
18,395 beds (2001: 18,721 beds). The
formation of Highfield Care to operate
many of the care homes owned by NHP
has meant that our properties now fall
into two distinct asset classes:
investment properties (leased to third
parties) and operated properties
(homes leased to Highfield Care), the
latter being depreciated. 
The annual year-end independent
valuation of investment properties
extends to the operated properties
which is a change in accounting policy .
The operated properties are now a
significant part of our asset base and
should be included in the balance sheet
at market value on an existing use basis.
The change in accounting policy has
no impact on the prior year figures.
The homes operated by third parties
(261 homes including those still in
receivership) were valued on an
investment property basis, consistent
with previous years, at £483.3 million
and are not depreciated. The
investment property valuation is
primarily based on the anticipated rental
income due under the lease. The 108
operated properties were valued on an
existing use basis at £159.9 million and
these properties are depreciated. The
existing use valuation is based on the
trading prospects of the individual
homes. Both forms of valuation follow
the guidelines set out in the R.I.C.S.
Appraisal & Valuation Manual.
T aking the two asset classes together ,
the value at £643.3 million, represents
a 9.5 per cent increase over last year’ s
£587.7 million. The total cost of the
portfolio, including acquisition costs,
was £659.6 million (2001: £662.1
million). In arriving at the portfolio
valuation of £643.3 million, GVA Grimley
International Property Advisers have
separately assessed the market values
of the individual properties and made
an adjustment by way of a portfolio
premium equating to around 5 per cent.
This portfolio approach is consistent
with that applied in previous years. 
Although the valuation of individual
assets reflects operator strength and
performance, and the condition and
siting of a home, significant regional
differences were revealed. The best
performing regions for NHP were
Scotland, the South East of England 14 NHP Plc 
and Northern Ireland, with Y orkshire
and Humberside, the north west of
England and Wales at the bottom of the
table. It is no coincidence that the best
performing regions are those in which
care purchasers have awarded
meaningful fee increases this year .
The overall yield on the investment and
operated properties, based on the full
annual pavement rents of £67.4 million,
was 10.5 per cent (2001: 11.6 per cent)
ignoring normal investors’ purchase
costs of 5.75 per cent (2001: 5.75 per
cent). When these costs are included,
the yield is 9.9 per cent (2001: 10.9
per cent).
During the year , excluding the deposit
swaps and zero coupon notes of the
securitisation vehicles, net debt fell
from £605.9m to £563.7m. The level
of securitised debt was unchanged
at £559 million but net recourse
borrowings were reduced by £42.3
million to £51.5 million at year-end
(2001: £93.8 million) as a result of
net cash flow and the receipt in July
of the net £31.9 million raised in the
Rights Issue. 
The terms of the Rights Issue were 3
for 8 at 62 pence per new Ordinary
Share and the Issue was 88.6 per cent
taken up by shareholders. At the same
time as the Rights Issue, we completed
a new facility that extended our bank
financing arrangements to December
2004. The new facility provides the
Group with committed revolving
facilities of £90 million. 
Consolidated gearing improved to 222
per cent from 499 per cent during the
period, and gearing excluding non-
recourse securitised assets and
liabilities improved to 30 per cent from
135 per cent. Both reductions are
primarily as a consequence of the
reduction in bank debt and a doubling
of shareholders’ funds. 
Cash flow
Net cash inflow from operating
activities increased by £6.1 million from
£51.8 million in 2001 to £57.9 million
in 2002, largely as a result of increased
rental receipts. 
Net cash interest and finance costs
fell by £1.4m to £43.1 million (2001:
£44.5 million). This reduction is
primarily a result of lower bank debt
interest paid due to the reduced
average net debt for the year of
£595.6 million (2001: £606.8 million)
and a lower average cost of bank
borrowing for the year of 6.0 per cent
(2001: 7.3 per cent).
Cash inflows from asset disposals
exceeded cash outflows from capital
expenditure by £0.2 million (2001: net
£4.5 million inflow). Disposals during
the year totalled £5.5 million (2001:
£10.9 million) and principally
comprised the sale of four homes, at
a book profit to NHP of £0.1 million.
Capital expenditure for the period was
£5.3 million (2001: £6.5 million) as we
began the programme of works to
bring Highfield Care’ s properties up
to the standards that will increase
their value and occupancy levels.
No property acquisitions were included
in capital expenditure during the year
(2001: £1.5 million).
Cash flow generated after financing,
capital items, and taxation was £47.0
million (2001: £10.7 million, excluding
the investment in Ultima Holdings
Limited of £13.6 million) and was used
principally to reduce bank debt.
Financing included the net £31.9 million
(2001: £2.6 million) of new equity . 
Financial derivatives and other
instruments
The deposit swap agreements and zero
coupon notes associated with the
redemption of the Care Homes 1, 2,
and 3 notes remained in place
throughout the period. These
investments mature between 2021 and
2028 and provide for the repayment of
£408 million of the non-recourse £559
million secured notes. In NHP’ s
consolidated accounts, interest on
these instruments accrues on a monthly
basis over the instruments’ various lives
and they are held at a book value of
£132.4 million in the consolidated
balance sheet at 30 September 2002
(2001: £125.8 million).
Richard Midmer
Group Finance Director
16 December 2002
Financial review continued NHP Plc  15
Company information
Registered office
Block A
Upper Ground Floor
Dukes Court
Duke Street
Woking GU21 5BH
Registered No. 02798607
Secretary
Sheila Kaul
Stockbrokers and Financial Adviser
Collins Stewart Limited
9th Floor , 88 Wood Street
London EC2V 7QR
Auditors 
Deloitte & T ouche
London
Solicitors 
S J Berwin
222 Grays Inn Road
London WC1X 8XF
Eversheds 
Holland Court
The Close
Norwich
Norfolk NR1 4DX
Principal Bankers
Bank of Scotland
Commercial Banking Services
T elford House, 3 Mid New Cultins
Edinburgh EH11 4DH
Registrars
Northern Registrars Limited
PO Box 30, 3rd Floor , Cresta House
Alma Street, Luton 
Bedfordshire LU1 2PU
Insurance Brokers
G. R. Patrick & Co. Limited
Brittanic House
230 Burlington Road
New Malden 
Surrey KT3 4NW
Valuers
GVA Grimley
3 Brindley Place 
Birmingham B1 2JB
Committees
Audit Committee
R A Henderson
C H W Robson
Lord Sutherland
Remuneration Committee
C H W Robson
R A Henderson
Lord Sutherland
Nominations Committee
Sir Martin Laing
W Colvin
Lord Sutherland 16 NHP Plc
Sir John Martin Kirby
Laing CBE
Non-executive Group
Chairman, aged 60, has
broad experience in and
knowledge of the property
sector , both in the UK and
overseas. He joined the
Laing Group in 1966, and
was until recently Group
Chairman and is now a non-
executive Director of the
Laing Group. He holds and
has held office in various
industry , trade, academic
and charitable organisations.
He was appointed a non-
executive Director of the
Company on 21 December
1998 and became Chairman
on 2 March 1999. 
William Colvin
Chief Executive, aged 44,
has overall executive
responsibility to the Board
for the Group’ s activities.
He was Finance Director of
British-Borneo Oil & Gas Plc
from 1992 to 1999. He is
a Scottish Chartered
Accountant and has spent
most of his career in the oil
and gas industry . He was
appointed an executive
Director of the Company on
18 January 2000 and took
over as Chief Executive on
20 November 2000.
Richard Neil Midmer
Group Finance Director ,
aged 48, is responsible for
funding, investor relations
and financial reporting.
He was previously in the
construction and oil and gas
sectors. A civil engineer by
training, he was Finance
Director of British-Borneo
Oil & Gas Plc. He was
appointed an executive
Director of the Company
on 20 November 2000.
Daniel Fernley Francis
Executive Director , aged 53,
is responsible for the
accounting, management
reporting and financial
systems of the Group. He
joined the management
team of NHP in July 1993,
having previously held a
range of directorships in
industry . 
Directors NHP Plc  17
Clayton Hugo
Wynne Robson
Non-executive Director , aged
70, has long and broad
experience in the corporate
finance and banking sectors.
He is currently Chairman of
Welsh Gold Plc. He is a
member of the Company’ s
Audit Committee and is
Chairman of the
Remuneration Committee.
He was appointed a non-
executive Director of the
Company on 1 May 1996
and has been the senior
non-executive Director since
16 February 2002. 
Lord Sutherland
Non-executive Director ,
aged 61, has a wealth of
knowledge and experience
in education and healthcare.
He is currently Chairman of
the Quarry Products
Association and was until
recently the Principal and
Vice-Chancellor of the
University of Edinburgh. 
He was the Chairman of
the Government’ s Royal
Commission on Long-
T erm Care. He is a member
of the Company’ s Audit,
Remuneration and
Nominations Committees.
He was appointed a non-
executive Director of the
Company on 14 May 2001. 
Ronald Andrew Henderson
Non-executive Director , aged
56, he is currently Group
Finance Director of Network
Rail and non-executive
Director of Scipher plc.
He was previously Chief
Executive of T uberail, a
consortium bidding to
London Underground
Limited for their PPP
initiative and prior to that
was Group Finance Director
for BICC plc. He is a member
of the Company’ s
Remuneration Committee
and Chairman of the
Audit Committee. He was
appointed a non-executive
Director of the Company
on 6 December 2001.  18 NHP Plc  
The Directors have pleasure in presenting their annual report and the audited financial statements for the year ended
30 September 2002.
Principal activities
The principal activities of the Group are the purchase and retention of freehold and long leasehold interests, in modern,
purpose-built care homes together with the operation of nursing and residential homes, the operating business, which has
grown considerably during the year. 
The principal activity of the Company is to act as a holding company which conducts corporate activities on behalf of the Group.
Operational and financial review
A review of the development of the Group’ s business, including future prospects, is set out in the Chairman’ s statement on
pages 2 and 3 and the Chief Executive’ s review and financial review on pages 4 to 14. Events occurring after the balance
sheet date are reported in note 34 to the accounts on page 62.
Results
The results for the year ended 30 September 2002 are set out in the consolidated profit and loss account on page 30.
Dividends
The Directors have recommended that no dividend be paid to Ordinary Shareholders for the year ended 30 September
2002 (2001:£nil).
Directors
A brief statement on each of the current Directors, their responsibilities and experience is set out on page 16 and 17
of this report. 
All the Directors served throughout the year ended 30 September 2002, except W J Davies, who resigned as executive
Director on 29 November 2001, and A Bergbaum, the senior non-executive Director, who retired on 15 February 2002. 
The Directors’ beneficial shareholdings at 30 September 2002, and at 30 September 2001, were as follows:
Ordinary Shares
Total Total
2002 2001
Sir Martin Laing 9,049 2,945
W Colvin 10,000 –
R N Midmer – –
D F Francis 845,459 792,333
C H W Robson 44,520 32,378
Lord Sutherland 5,886 –
R A Henderson 5,000 –
Total 919,914 827,656
Details of the options granted to the executive Directors under the NHP Plc 2001 Executive Option Scheme are shown in
the Report of the Remuneration Committee on page 22. 
The market price of the Ordinary Shares at the end of the year was 83.0p and the quoted price during the year ranged from
37.5p to 92.5p.
In addition to his interests shown above, D F Francis has a beneficial interest in part of the NHP Executive Pension Scheme,
which owned 45,519 Ordinary Shares of the Company at 30 September 2002.
Directors’ report NHP Plc  19
No Director had a beneficial interest in the shares of any of the subsidiaries of NHP plc.
There have been no changes to any of these Directors’ interests between 30 September 2002 and the date of this report.
Details of share options granted to the Directors are shown on page 22. 
Except as stated in note 33 to the Accounts on page 62, none of the Directors had an interest in any material contract
during the year relating to the business of the Group.
Article 109 of the Articles of Association requires that one third of the Directors retire at the Annual General Meeting in every year .
W Colvin and R N Midmer retire by rotation at the T enth Annual General Meeting in accordance with Article 109 of the
Articles of Association and, being eligible, offer themselves for re-election. 
C H W Robson is aged 70 and is not due to retire by rotation, but in accordance with the Company’ s Articles of Association,
Article 108, he feels that he should be re-elected annually. Therefore he offers himself for re-election at the T enth Annual
General Meeting.
Substantial shareholders
As at 29 November 2002 the Directors had received notifications under the Companies Act that the following had an
interest in 3 per cent or more of the issued Ordinary Shares of the Company:
No. of % of issued
Ordinary Shares share capital
Schroder Investment Management 35,750,700 17.8%
Aviva/Morley Investment Management 24,022,818 12.0%
M&G Investment 21,096,763 10.5%
Gartmore Investment Management 13,986,924 7.0%
Artemis Investment Management 12,062,500 6.0%
Odey Asset Management 10,133,242 5.0%
Invesco Asset Management 9,356,169 4.7%
Payment to creditors
The Group’ s policy is to fix payment terms when agreeing the terms of each transaction. It is the Group’ s general policy to
pay suppliers in accordance with the agreed terms and conditions, provided that the supplier has complied with those
terms. The creditor days for the Group at 30 September 2002, calculated in accordance with the Companies Act 1985,
were 27 (2001:26). Creditor days for the Company at 30 September 2002 were 25 (2001:17).
Employment policies
The Group’ s employment policies are designed to attract, retain and motivate the very best people, recognising that this
can be achieved only through offering equal opportunities regardless of gender, race, religion or disability. 
The Group supports the principal of Equal Opportunities in employment and opposes all forms of unfair and unlawful
discrimination. The Group gives full and fair consideration to applications by disabled persons for employment.
Disabled employees, and those becoming disabled, are afforded the same training, career development and promotion
opportunities as other staff.  20 NHP Plc  
The Directors recognise the importance of good communications and relations with the Group’ s employees. Each part of
the Group maintains employee relationships appropriate to its own particular needs and environment. 
The Company places emphasis on keeping its employees informed of the Group’ s activities and financial performance.
The NHP Plc Inland Revenue Approved and Unapproved Share Option Schemes are intended to help develop employees’
interest in the Company’ s performance. 
Auditors
Deloitte & T ouche have expressed their willingness to be re-appointed as auditors to the Company, and a resolution for
their re-appointment will be proposed at the T enth Annual General Meeting to be held on 30 January 2003.
By Order of the Board
Sheila Kaul
Company Secretary
16 December 2002
Registered Office:
Block A
Upper Ground Floor
Dukes Court
Duke Street
Woking
GU21 5BH
Directors’ report continued NHP Plc  21
The Remuneration Committee, which sits at least three times in each year, deliberates and makes recommendations to the
Board on the remuneration policy within the Group. The members of the Committee are the non-executive Directors, C H W
Robson, Chairman, Lord Sutherland and R A Henderson. The Committee also consults with Sir Martin Laing, Chairman of
NHP , when appropriate, and retains New Bridge Street Consultants for further advice on policy and pay. The three non-
executive Directors are independent.
Remuneration policy
The Committee considers the following criteria as guidance for its recommendations to the Board on salaries, bonuses, and
long term incentive plans. A significant proportion of Directors’ remuneration is designated to be performance-related
through bonuses and share options.
Salaries 
It is our policy to offer salaries that are competitive and sufficient to attract the best executives possible to run a diversified
and complicated company. These are reviewed annually and designed to be in the upper quartile by any comparison.
Bonuses
Short term bonuses are offered annually to the executive Directors. These are based on the amount by which earnings per
share exceed the budgeted figure agreed by the Board at the beginning of the year. These can rise to 50% of salary when
the performance figures have been met. Senior managers are eligible for cash bonuses of up to 30% of salary, judged
against performance, and these are recommended to the Committee by the Chief Executive.
Share Options
Executive Directors and other senior executives receive options under the Company’ s Executive Share Option Scheme
which was approved by shareholders in August 2001. The first grants were made in September 2001. There were three
tranches of options, and 50% of each is exercisable after three years and 50% after 5 years. T o reflect the fact that senior
executives had not received options for some time since their appointment and the progress that had already been made
towards recovery, the first tranche of options did not have performance conditions. The other two tranches required that
share prices of 50p and 75p were achieved over 30 consecutive dealing days. 
In 2002, further grants were made to senior management. These options are exercisable after three years. Of the last
options awarded 50% of each grant requires the achievement of a share price of 100p and 50% requires 105p.
Details concerning the grants made to the Directors are set out in the options table overleaf. 
The Committee chose to use share price targets because it felt that this was the best way of aligning executives’ and
shareholders’ interests during the Company’ s recovery. There are also no listed companies that in any way compare in
composition to NHP . The Committee will keep this policy under review as the Company progresses and will ensure that all
grants are linked to challenging performance targets, taking into account the Company’ s circumstances at the time. 
Report of the remuneration
committee 22 NHP Plc  
The Committee intends to grant options in future years, subject to the individual grant maximum of 150% of base salary per
annum (or 400% in the case of options granted to facilitate recruitment). 
NHP Share Schemes
NHP Plc 1998 Inland Revenue Approved Savings Related Share Option Scheme
Options granted to the Directors under the Savings scheme, and the subscription prices outstanding at the date of this
report, including an adjustment to take account of the Rights Issue, are as follows:
Number of options Number of options 
granted and granted and 
Option outstanding at 30 outstanding at 30 Date from which 
Name T erm price September 2001 September 2002 exercisable Expiry date
Sir Martin Laing 5 years 107p 15,770 15,770 01 Feb 2005 01 Jul 2005
NHP Plc 2001 Inland Revenue Approved and Unapproved Executive Share Option Schemes
Options granted to the Directors under the 2001 Approved and Unapproved Executive schemes, and the subscription
price, including an adjustment to take account of the Rights Issue, are as follows:
No. of shares No. of shares
Name Date option granted Earliest exercise date Exercise price unapproved approved
W Colvin 13 Sep 2001 14 Sep 2004 35p 2,060,928 –
W Colvin 12 Oct 2001 13 Oct 2004 36p – 83,300
W Colvin 30 Sep 2002 01 Oct 2005 82p 457,300 –
R N Midmer 13 Sep 2001 14 Sep 2004 35p 1,373,952 –
R N Midmer 12 Oct 2001 13 Oct 2004 36p – 83,300
R N Midmer 30 Sep 2002 01 Oct 2005 82p 365,800 –
D F Francis 30 Sep 2002 01 Oct 2005 82p 182,915 36,585
Details of the Directors’ emoluments for the year ended 30 September 2002, with comparative amounts for the year ended
30 September 2001 are as follows:
For the year For the year 
ended 30 ended 30
September September
2002 2001
Salary and Aggregate Pension Total Total 
fees Bonus Benefits emoluments contributions emoluments emoluments
£ £ £ £ £ £ £
Executive Directors
W Colvin 250,000 145,000 20,225 415,225 50,000 465,225 616,253
R N Midmer 192,500 60,000 18,196 270,696 38,500 309,196 311,653
D F Francis 120,000 45,000 13,619 178,619 24,000 202,619 142,789
Non-executive Directors 
Sir Martin Laing, Chairman 52,500 – – 52,500 – 52,500 52,500
A Bergbaum 10,417 – – 10,417 – 10,417 18,000
C H W Robson 25,000 – – 25,000 – 25,000 18,000
Lord Sutherland 25,000 – – 25,000 – 25,000 4,500
R A Henderson 20,833 – – 20,833 – 20,833 –
Total 696,250 250,000 52,040 998,290 112,500 1,110,790 1,163,695
W J Davies resigned on 29 November 2001. In accordance with his contract he received 12 months salary, 20% pension
payment and 12 months company car and other benefits. His emoluments totalled £325,480.
Report of the remuneration
committee continued NHP Plc  23
Shareholder returns over the last five years 
Shareholder returns over the last two years
0
50
100
150
200
250
Total shareholder return
Source: Datastream
Total shareholder return, looks at the value, by the end of September 2002, of £100 invested in NHP on
30 September 1997 compared with the value of £100 invested in the FTSE Fledgling Index over the same period.
30 Sep 97 30 Sep 98
NHP
30 Sep 99 30 Sep 00 30 Sep 01 30 Sep 02
FTSE Fledgling Index
Value (£)
0
50
100
150
200
250
300
350
400
Total shareholder return
Source: Datastream
Total shareholder return, looks at the value, by the end of September 2002, of £100 invested in NHP on
20 November 2000 compared with the value of £100 invested in the FTSE Fledgling Index over the same period.
20 Nov 00 20 Feb 01 20 May 01 20 Aug 01
NHP
20 Nov 01 20 Feb 0220 May 0220 Aug 0220 Nov 02
FTSE Fledgling Index
Value (£)
The two graphs above show total shareholder return for NHP over the past five years and since the appointment of
W Colvin and R N Midmer in November 2000. 24 NHP Plc  
Executive Directors
The executive Directors have contracts of employment for 12 months subject to 12 months notice on either side, which
is in accordance with current corporate governance best practice. The Company pays 20% of their basic salaries as a
contribution to their pensions. Each has the right to a fully expensed company car and is reimbursed on all expenses
incurred wholly on the business of the company. They also receive long-term disability insurance and personal medical
insurance. Executive Directors may not hold outside appointments or directorships without the permission of the Board
in writing. On termination of their contracts, they are not entitled to compensation outside their contractual obligations
of 12 months salary, 20% pension contribution, use of company car, and approved expenses.
Non-executive Directors
The remuneration of the non-executive Directors is determined by the Board within the limits set out in the Articles of
Association and is based upon independent surveys of fees paid to non-executive directors. The remuneration paid to
each non-executive Director in the years to 30 September 2001 and 2002 is shown on page 22 and was subject to Board
approval. Non-executive Directors do not have contracts of employment. They may be paid for professional services
provided to the Group, but cannot participate in the Company’ s Executive Share Option Scheme, nor are they eligible to
join the Company’ s pension scheme.
Shareholders will be invited to vote on this report at the AGM.
C H W Robson 
Chairman
Remuneration Committee
16 December 2002
Report of the remuneration
committee continued NHP Plc  25
Application of the principles of corporate governance
Throughout the year the Group complied with the principles of the Combined Code annexed to The Listing Rules of the
Financial Services Authority. This statement describes how the principles of governance are applied by the NHP Group.
Board composition
The Board meets regularly throughout the year, with additional special meetings as required. The Board has a formal agenda
and is responsible for the Group’ s strategy, acquisition and divestment policy and consideration of major financial matters.
The Board currently consists of the non-executive Chairman, Chief Executive, two other executive Directors and three other
non-executive Directors. The Directors’ respective biographies appear on pages 16 to 17.
The roles of Chairman and Chief Executive are separate and clearly defined. The Chairman is primarily responsible for the
operation of the Board and the Chief Executive is responsible for the creation and implementation of the business strategy
and policies approved at Board meetings.
All four non-executive Directors are independent. Directors appointed by the Board are required to submit themselves for
election at the first opportunity after their appointment and thereafter for re-election at least every three years. Re-
appointment is therefore not automatic.
On appointment Directors go through a business familiarisation process, primarily with the other Directors and the Group’ s
managers, to give them a good understanding of the Group’ s business, procedures, management information systems and
the performance of the Group’ s care homes operators. 
Appointments to the Board
The Chairman, the Chief Executive and Lord Sutherland comprise the Nominations Committee and are responsible for finding
and selecting candidates for appointment as Directors. Board approval is required before an appointment can be made.
The Nominations Committee is continuing to review the composition of the Board so as to ensure that it is appropriate to the
Group’ s future strategy.
Board information
The Board is supplied with regular and appropriate management information and forecasts to enable it to discharge its duties.
The executive Directors produce monthly management reports to the Board summarising the key issues. As part of this
process, forecasts are updated regularly and the executive Directors review the results and report to the Board. These
monthly reports are distributed to the members of the Board and considered in detail at regular meetings.
Statement on corporate governance 26 NHP Plc  
All Directors have access to independent professional advice and to the advice and services of the Company Secretary who
is responsible to the Board for ensuring that the Board procedures are followed and that the Group and Board operate
within applicable legislation, rules and regulations.
Remuneration Committee
The Remuneration Committee, reporting to the Board under the Chairmanship of C H W Robson, includes two other non-
executive Directors, namely Lord Sutherland and R A Henderson. Details of the Group’ s remuneration policy are set out in
the Committee’ s report on pages 21 to 24.
Accountability and audit
The Audit Committee, reporting to the Board, under the Chairmanship of R A Henderson together with two other non-
executive Directors, namely C H W Robson and Lord Sutherland, meets at least four times a year. The Group’ s auditors
frequently attend for part or the whole of each meeting and have direct access to the members of the Committee. The
Committee is responsible for reviewing a wide range of financial matters including the annual financial statement and
accompanying reports, Group audit arrangements, accounting policies, financial reporting, internal control and the actions
and procedures included in the management of risk throughout the Group. It also provides a forum through which the
external auditors report to the non-executive Directors. 
Internal control
The Board is responsible for the Group’ s system of internal control and for reviewing its effectiveness. This is designed to
manage rather than eliminate the risk of not achieving business objectives and can only provide reasonable rather than
absolute assurance against material misstatement or loss. 
The Company has been in compliance with the Code provisions set out in Section 1 of the Combined Code on Corporate
Governance issued by the Financial Services Authority for the year ended 30 September 2002 and to the date of this report.
Steps continue to be taken to embed internal control and risk management further into the operations of the business and
to deal with areas of improvement which come to management’ s and the Board’ s attention.
With the growing size and importance of our operating business, incident reporting mechanisms and enhancements of our
quality control procedures, including an ISO 9001 home accreditation programme, have been undertaken. 
Internal financial control
The Group is developing an internal audit function, reporting to the Group Finance Director and reviewed by the Board’ s
Audit Committee.
The Board reviews the effectiveness of the Group’ s system of internal financial control on a regular basis, which is designed
to ensure that proper accounting records are maintained, that the assets of the Group are safeguarded and that the financial
information used for reporting and external publication is reliable and accurate.
The Group and each operating company have comprehensive systems for reporting financial results, all of which are
monitored by the executive Directors. Financial results, including a detailed balance sheet analysis, are reviewed on a
monthly basis with comparisons against budget. T welve month profit and cash flow forecasts are reviewed on a quarterly
basis. Treasury reporting is reviewed on a monthly basis. T enant performance indicators (including our own operating
business) are reviewed monthly. All forecasts are reviewed quarterly and revised as necessary. 
The principles underlying all significant transactions and contracts, including those relating to property and all financing
arrangements, are the responsibility of the Board.
Statement on corporate governance
continued NHP Plc  27
Relations with shareholders
The Group maintains a regular dialogue with institutional shareholders and fund managers. All shareholders receive the
Interim and Annual Report and Accounts.
The Group maintains a website – www.nhpplc.co.uk – which is regularly updated and contains live links to other sites
containing up to date investor information. The Group’ s site holds the latest accounts of the NHP Plc Group and information
on the performance of the three bond issues. The site has become the most frequently used channel of communication
with private investors.
The Annual General Meeting provides the Board with an opportunity to communicate with, and to answer questions from,
private and institutional investors.
Details of the resolutions to be proposed at the Annual General Meeting on 30 January 2003 are in the Notice of Meeting on
page 67. Prior to a vote being taken on a show of hands, as is recommended in the Combined Code, the number of proxy
votes for and against each resolution are disclosed to the meeting.
Going Concern
The Directors, having made appropriate enquiries, are satisfied that the Group has adequate resources to continue in
operation for the foreseeable future and so continue to adopt the going concern basis in preparing the financial statements.
R A Henderson
Chairman
Audit Committee
16 December 2002 28 NHP Plc  
United Kingdom Company law requires the Directors to prepare financial statements for each financial year which give a true
and fair view of the state of affairs of the Company and of the Group as at the end of the financial year and of the profit or loss
of the Group for that period. In preparing those financial statements, the Directors are required to:
• Select suitable accounting policies and then apply them consistently; 
• Make judgements and estimates that are reasonable and prudent; and
• State whether applicable accounting standards have been followed, subject to any material departures disclosed
and explained in the financial statements.
The Directors confirm that they have met the above requirements.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time
the financial position of the Company and the Group, and to enable them to ensure that the financial statements comply
with Companies Act 1985. They are also responsible for the Group’ s system of internal financial control, for safeguarding
the assets of the Company and the Group and hence for taking steps for the prevention and detection of fraud and other
irregularities. 
On behalf of the Board
Sheila Kaul
Company Secretary
16 December 2002 
Statement of Directors’
Responsibilities NHP Plc  29
We have audited the financial statements of NHP Plc for the year ended 30 September 2002 which comprise the
consolidated profit and loss account, the balance sheets, the consolidated cash flow statement, the consolidated
statement of total recognised gains and losses, the consolidated reconciliation of movements in shareholders’ funds,
the consolidated note of historical cost profits and losses and the related notes 1 to 34. These financial statements
have been prepared under the accounting policies set out therein.
Respective responsibilities of directors and auditors
As described in the statement of Directors’ responsibilities, the Company’ s Directors are responsible for the preparation of
the financial statements in accordance with applicable United Kingdom law and accounting standards. Our responsibility
is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements, auditing
standards, and the Listing Rules of the Financial Services Authority.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in
accordance with the Companies Act 1985. We also report if, in our opinion, the Directors’ report is not consistent with the
financial statements, if the Company has not kept proper accounting records, if we have not received all the information and
explanations we require for our audit, or if information specified by law or the Listing Rules 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 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 the Directors’ report and the other information contained in the annual report for the above year as described in
the contents section and consider the implications for our report if we become aware of any apparent misstatements or
material inconsistencies with the financial statements.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board.
An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the
preparation of the financial statements and of whether the accounting policies are appropriate to the circumstances
of the Company and the Group, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in
order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion the financial statements give a true and fair view of the state of affairs of the Company and the Group as at
30 September 2002 and of the profit of the Group for the year then ended and have been properly prepared in accordance
with the Companies Act 1985.
Deloitte & T ouche
Chartered Accountants and Registered Auditors
London
16 December 2002
Independent Auditors’ report to the
members of NHP plc 30 NHP Plc  
Continuing Acquisitions
operations (see note 3) 2002 2001
Note £’000 £’000 £’000 £’000
Turnover 3 84,397 41,567 125,964 76,626
Cost of sales (19,352) (28,484) (47,836) (3,806)
Gross profit 65,045 13,083 78,128 72,820
Provision for doubtful debts and related costs (4,587) (251) (4,838) (10,259)
Other administrative expenses (4,552) (15,198) (19,750) (7,349)
Exceptional income/(costs) 4 248 – 248 (4,651)
Administrative expenses (8,891) (15,449) (24,340) (22,259)
Group operating profit 5 56,154 (2,366) 53,788 50,561
Share of associated undertakings’ operating profits/(losses) 6 283 – 283 (210)
T otal operating profit 3 56,437 (2,366) 54,071 50,351
Profit on disposal of investment properties and
other tangible fixed assets 53 318 371 (121)
Net interest payable and similar charges 7 (37,970) (102) (38,072) (40,205)
Profit on ordinary activities before taxation 18,520 (2,150) 16,370 10,025
T ax credit on profit on ordinary activities 8 509 – 509 2,407
Profit on ordinary activities after taxation 19,029 (2,150) 16,879 12,432
Profit for the year 19,029 (2,150) 16,879 12,432
Dividends paid and proposed 9 – – – (1)
Retained profit transferred to reserves 23 19,029 (2,150) 16,879 12,431
Earnings per Ordinary Share 10
Basic 10.1p 8.1p*
Diluted 9.9p 8.1p*
*Earnings per Ordinary Share for year ended 30 September 2001 have been restated for the effects of the Rights Issue
in July 2002.
Consolidated profit and loss account
For the year ended 30 September 2002 NHP Plc  31
2002 2001
Note £’000 £’000
Intangible fixed assets
Goodwill 12 2,167 963
T angible fixed assets
Investment properties 13 483,330 535,430
Operated properties 13 159,920 52,248
Other fixed assets 13 1,782 496
T otal tangible fixed assets 645,032 588,174
Investments 14 132,817 127,692
T otal fixed assets 780,016 716,829
Current assets
Properties held for resale 2,972 2,698
Debtors 15 14,877 8,037
Short term investments 16 17,869 12,409
Cash at bank and in hand 2,339 4,636
38,057 27,780
Creditors
Amounts falling due within one year 17 (25,558) (27,309)
Net current assets 12,499 471
T otal assets less current liabilities 792,515 717,300
Creditors
Amounts falling due after more than one year 19 (583,690) (614,388)
Provisions for liabilities and charges 20 (1,088) (520)
Net assets 3 207,737 102,392
Capital and reserves
Called up share capital 22 2,009 1,461
Share premium account 23 190,891 159,580
Revaluation reserve 23 (6,401) (65,053)
Profit and loss account 23 21,238 6,404
T otal equity Shareholders’ funds 207,737 102,392
Net assets per Ordinary Share
Basic 24 103.4p 65.5p*
*Restated for the effects of the Rights Issue in July 2002.
These financial statements were approved by the Board of Directors on 16 December 2002.
Signed on behalf of the Board of Directors.
W Colvin R N Midmer
Chief Executive Group Finance Director
Consolidated balance sheet
As at 30 September 2002 32 NHP Plc  
2002 2001
Note £’000 £’000
Fixed assets
T angible fixed assets 13 – 2
Investments 14 199,521 163,810
T otal fixed assets 199,521 163,812
Current assets
Debtors 15 26,744 15,718
Cash at bank and in hand – 3
26,744 15,721
Creditors
Amounts falling due within one year 17 (1,798) (827)
Net current assets 24,946 14,894
T otal assets less current liabilities 224,467 178,706
Provisions for liabilities and charges 20 – (46,520)
Net assets 224,467 132,186
Capital and reserves
Called up share capital 22 2,009 1,461
Share premium account 23 190,891 159,580
Revenue reserve 23 914 914
Profit and loss account 23 30,653 (29,769)
T otal equity Shareholders’ funds 224,467 132,186
These financial statements were approved by the Board of Directors on 16 December 2002.
Signed on behalf of the Board of Directors.
W Colvin R N Midmer
Chief Executive Group Finance Director
Company balance sheet
As at 30 September 2002 NHP Plc  33
2002 2001
Note £’000 £’000
Net cash inflow from operating activities 26 57,872 51,788
Returns on investments and servicing of finance
Interest paid (43,746) (44,555)
Other similar charges paid (net) (223) (2,396)
Interest received 837 2,432
Dividends received 33 –
Net cash outflow from returns on investment and servicing of finance (43,099) (44,519)
Taxation
Corporation tax repaid /(paid) 319 (8)
Capital expenditure and financial investment
Purchase of investment properties,operated properties and other fixed assets (5,280) (6,483)
Proceeds on disposal of investment properties (net of disposal costs) 4,291 10,179
Proceeds on disposal of other tangible fixed assets 631 39
Proceeds on disposal of properties held for resale 533 718
Investment in Ultima Holdings Limited – (13,610)
Net cash inflow/(outflow) from investing activities 175 (9,157)
Acquisitions and disposals
Acquisition of Highfield Care Homes No.3 Limited – (1,132)
Acquisition of Highfield Care Homes Limited – (420)
Net (bank overdraft)/cash acquired with subsidiaries (73) 103
Investment in Highfield Holdings Limited (73) (1,590)
Net cash outflow from acquisitions (146) (3,039)
Net cash inflow/(outflow) before use of liquid resources and financing 15,121 (4,935)
Management of liquid resources
Short term deposit (investment)/withdrawal (net) (5,460) 51,504
Financing
Equity
Issue of Ordinary Shares 33,963 2,587
Less: Issue costs paid (2,104) –
Net cash inflow from equity financing 31,859 2,587
Hedging
Premium paid for interest rate cap – (174)
Bank loans
Bank loans drawn down 5,800 19,400
Bank loans repaid (47,152) (64,070)
Less: Financing costs paid (2,336) (1,406)
Net cash outflow from bank loan finance (43,688) (46,076)
Secured Notes
Issue costs of Secured Notes – (409)
Net cash outflow from secured notes – (409)
Other loan repayments (111) –
Finance lease repayments (18) –
Net cash outflow from financing activities (11,958) (44,072)
(Decrease)/increase in cash in the year 28 (2,297) 2,497
Consolidated cash flow statement
For the year ended 30 September 2002 34 NHP Plc  
Consolidated statement of total recognised
gains and losses
For the year ended 30 September 2002
2002 2001
Note £’000 £’000
Profit for the year 16,879 12,432
Net surplus on revaluation of properties 23 56,607 11,432
T otal recognised gains for the year 73,486 23,864
Consolidated reconciliation of movements
in shareholders’ funds
For the year ended 30 September 2002
2002 2001
£’000 £’000
Profit for the year 16,879 12,432
Dividends paid and declared – (1)
Retained profit for the year 16,879 12,431
Net surplus on revaluation of properties 56,607 11,432
Issue of share capital net of costs 31,859 2,587
Net increase in shareholders’ funds 105,345 26,450
Shareholders’ funds at the beginning of the year 102,392 75,942
Shareholders’ funds at the end of the year 207,737 102,392
Consolidated note of historical cost profits and losses
For the year ended 30 September 2002
2002 2001
£’000 £’000
Profit on ordinary activities before taxation 16,370 10,025
Realisation of net valuation (losses)/gains on disposal of investment properties (2,045) 813
Historical cost profit on ordinary activities before taxation 14,325 10,838
Historical cost profit retained for the year 14,834 13,244 NHP Plc  35
1. Accounting policies
Basis of accounting
The financial statements are prepared under the historical cost convention, as modified by the revaluation of investment
and operated properties, and in accordance with all applicable accounting standards, including the adoption of Financial
Reporting Standards (“FRS”) 19 ‘Deferred tax’. The particular accounting policies adopted are described below. The
financial statements are in compliance with the Companies Act 1985 except that, as explained below, investment
properties are not depreciated. 
In the year to 30 September 2002, the Directors have carefully considered a change in the accounting policy for operated
properties (described as operational fixed assets in 2001 Annual Report and Accounts). FRS 15 ‘T angible fixed assets’
permits alternative valuation rules which allow for a regular revaluation of the assets. The Directors are of the opinion that
annual revaluation of the operated properties presents the assets in the balance sheet at close to their true commercial
value. Depreciation will be charged based on the revalued amount at the beginning of the year. 
This change in accounting policy has not required a restatement of comparatives (see note 13). 
Basis of consolidation 
The financial statements consolidate the financial statements of the Company and its subsidiaries, together with those of
Care Homes No.1 Limited (“Care Homes 1”), Care Homes No.2 Limited (“Care Homes 2”) and Care Homes No.3 Limited
(“Care Homes 3”). Care Homes 1, Care Homes 2 and Care Homes 3 are not subsidiary undertakings of the Group; however,
by reason of contractual arrangements between the Group and Care Homes 1, Care Homes 2 and Care Homes 3, under
FRS 5, the financial statements of Care Homes 1, Care Homes 2 and Care Homes 3 are required to be consolidated as part
of the Group. Summaries of the financial statements of Care Homes 1, Care Homes 2 and Care Homes 3 are disclosed in
note 31 of the financial statements. 
Goodwill 
Goodwill on acquisition of subsidiary and associated undertakings, representing any excess of the consideration given over
the fair value of the identifiable assets and liabilities acquired, is capitalised and amortised on a straight line basis over its
estimated useful life. Goodwill on the acquisition of Highfield Holdings Limited in the year ended 30 September 2002 is
being amortised over 20 years. Goodwill on the acquisition of Highfield Care Homes Limited (formerly ‘Palladium Healthcare
Limited’) and Highfield Care Homes No.3 Limited (formerly ‘Somerford Leased Homes Limited’) in the year ended 30
September 2001 is being amortised over 20 years. Goodwill on the acquisition of G.R. Patrick & Co. Limited in the year
ended 30 September 1999 is being amortised over 10 years. Provision is made for any impairment. 
Valuation of land and buildings 
Investment properties 
The cost of investment properties is purchase cost, any incidental costs of acquisition and the cost of capital improvements.
Investment properties represent freehold or long leasehold properties held for long term retention. In accordance with
Statement of Standard Accounting Practice No.19, these investment properties are valued annually by qualified external
valuers. The aggregate revaluation surplus or deficit is transferred to the revaluation reserve whilst any permanent diminution
in value is charged to the profit and loss account. 
Operated properties 
Operated properties, which are initially transferred out of investment properties at the then existing use value, are valued
annually at 30 September by qualified external valuers, the aggregate revaluation surplus or deficit being transferred to the
revaluation reserve whilst any permanent diminution in value is charged to the profit and loss account. 
Properties held for resale 
Properties held for resale are held at the lower of cost and net realisable value, any impairment in value being charged to
the profit and loss account. 
Capital expenditure on the investment portfolio assets 
Capital expenditure incurred on a leased care home which improves the physical condition above the level required in the
lease and which enhances the property’ s value is capitalised. Otherwise such capital expenditure is charged in the profit
and loss account. 
Notes to the accounts
For the year ended 30 September 2002 36 NHP Plc  
1. Accounting policies continued
Depreciation 
In accordance with Statement of Standard Accounting Practice No.19, no depreciation is provided in respect of investment
properties. Under the terms of the Group’ s leases, freehold and long leasehold properties are required to be maintained to a
high standard by its tenants. This treatment is a departure from the requirement of the Companies Act 1985 which requires
all fixed assets to be depreciated over their effective useful lives. However, such properties are not held for consumption but
for investment, and the Directors consider that systematic depreciation would be inappropriate and would not give a true
and fair view. The accounting policy adopted and departure from the Companies Act 1985 is therefore necessary for the
accounts to give a true and fair view. Depreciation is one of the factors reflected in the annual revaluation, and amounts
which might otherwise have been charged cannot be separately identified or quantified. 
Operated properties are depreciated in equal annual instalments over the estimated useful economic lives of each category
of asset. The amount of depreciation, the calculation of which is based on the opening valuation plus subsequent
capitalised capital expenditure less estimated residual value, is charged to the profit and loss account with an appropriate
adjustment being made to the revaluation reserve by the transfer of a sum from revaluation reserve to profit and loss
account. The estimated useful economic lives are as follows: 
Freehold land no depreciation
Freehold and long leasehold buildings 50 years
Plant, machinery, fixtures and fittings 5 to 20 years
Other fixed assets are stated at cost less depreciation which is provided at rates calculated to write off the cost in equal
amounts over their anticipated useful lives as follows: 
Short leasehold improvements remaining period of lease
Office equipment and fixtures 5 years
Motor vehicles 5 years
Investments 
Except as stated below, investments held as fixed assets are stated at cost less provision for any impairment in value. 
In the consolidated accounts, investments in associates are accounted for using the equity method. The consolidated profit
and loss account includes the Group’ s share of associates’ profits less losses, whilst the Group’ s share of the net assets of the
associates is shown in the consolidated balance sheet. Goodwill arising on the acquisition is accounted for in accordance with
the policy set out above. Any unamortised balance of goodwill is included in the carrying value of the investment in associates. 
Deferred taxation 
FRS 19 has been adopted for the first time in this accounting period. FRS 19 requires full provision for timing differences
which have originated at the balance sheet date and which could give rise to an obligation to pay more or less tax in the
future. The standard requires that deferred tax is not recognised in respect of gains and losses on revalued assets unless the
company has entered into a binding agreement to sell the assets and the gains or losses have been recognised in the profit
and loss account. Deferred tax assets are recognised to the extent that it is regarded more likely than not that they will be
recovered. Previously, the Group’ s accounting policy had been to provide for deferred tax on timing differences to the extent
that it was probable a liability or asset would crystallise in the future. 
The adoption of FRS 19 has had no impact on either the current year or prior year results and hence no restatement has
been made. See note 18 for restatement of unprovided amounts. 
Finance costs 
Costs which are incurred directly in connection with the raising of bank loans or Secured Notes are amortised at a constant
rate over the lives of the loan facility or Secured Notes in accordance with FRS 4. 
Interest 
Interest receivable and interest payable are recognised in the financial statements on an accruals basis. Interest on Deposit
Swap Agreements and Zero Coupon Bonds is accrued and capitalised on a monthly basis over their respective lives.
Discounts on Secured Notes, being interest paid in advance, is amortised over the lives of the Secured Notes. 
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  37
1. Accounting policies continued
Leased assets 
Assets held under finance leases and other similar contracts, which confer rights and obligations similar to those attached
to owned assets, are capitalised as tangible fixed assets and are depreciated over the shorter of the lease terms and their
useful lives. The capital elements of the future lease obligations are recorded as liabilities, whilst the interest elements are
charged to the profit and loss account over the period of the leases to produce a constant rate of charge on the balance
of capital repayments outstanding. Hire purchase transactions are dealt with similarly, except that assets are depreciated
over their useful lives. 
Rentals paid under operating leases are charged to the profit and loss account on a straight-line basis over the life of the lease. 
Pensions 
The Group contributes to money purchase pension schemes, including contributions to the NHP Executive Pension
Schemes, for the executive Directors at the rate of 20% of basic salary, which is charged monthly to the profit and loss
account. The assets of the NHP Executive Pension Schemes are held in separate trustee administered funds. 
The Company and its subsidiary undertaking, NHP Management Limited contribute to the personal pensions of their
employees at rates from 10% to 20% of basic salary, which is charged monthly to the Profit and loss account. 
A stakeholder pension scheme exists for all employees of Highfield Care Group of companies. 
Financial instruments 
The Group uses derivative financial instruments to reduce exposure to interest rate movements in line with the Group’ s risk
management policies. The Group does not enter into derivative financial instruments for speculative purposes. Amounts
payable or receivable in respect of interest rate swaps are recognised as adjustments to interest expense over the period
of the contracts. 
2. Information regarding Directors and employees
Disclosures on Directors’ remuneration, share options and pension contributions required by the Companies Act 1985, and
those specified by the UK Listing Authority, are included on page 22 within the Report of the Remuneration Committee and
form part of these audited financial statements.
Staff costs
The aggregate payroll costs (including Directors) were as follows:
2002 2001
£’000 £’000
Wages and salaries 39,424 5,020
Social security costs 2,464 413
Pension costs 429 300
42,317 5,733
Average number of employees on a full time equivalent basis:
2002 2001
Number Number
Operational 3,455 264
Administrative 88 22
Directors 7 9
3,550 295
The average number of employees for the year ended 30 September 2001 has been restated to include the number of
operational employees omitted from the 2001 Annual report and accounts. 38 NHP Plc  
3. Analyses of turnover, operating profit and net assets by business segments
All operations are carried out wholly within the United Kingdom.
Continuing
operations Acquisitions 2002 2001
£’000 £’000 £’000 £’000
Turnover
Property business 56,631 – 56,631 71,153
Highfield Care 27,766 41,567 69,333 5,473
84,397 41,567 125,964 76,626
Operating profit
Property business 58,763 (1,519) 57,244 50,209
Highfield Care (2,326) (847) (3,173) 142
56,437 (2,366) 54,071 50,351
‘Acquisitions’ relates to the consolidated results of Highfield Holdings Limited from 11 December 2001 (the date on which
NHP Plc acquired the remaining 51% of its equity) and includes within the property business depreciation of £1,519,000
charged on operated properties. Administrative expenses in continuing operations includes a credit of £8,566,000 for
pavement and turnover rents charged to Highfield Holdings Limited in other administrative expenses, under Acquisitions.
The results of the Highfield Care segment include pavement and turnover rents payable under leases to the property
business of £15,645,000 (2001: £1,510,000). Included in the property business is £2,879,000 (2001: £609,000)
depreciation of the operated properties.
Continuing
operations Acquisitions 2002 2001
£’000 £’000 £’000 £’000
Net assets
Property business 210,206 – 210,206 102,291
Highfield Care (2,531) 62 (2,469) 101
207,675 62 207,737 102,392
The comparatives for 2001 have been restated to reflect the basis of segmental information shown in 2002.
4. Exceptional income/(costs)
The following exceptional income/(costs) have been incurred or provided for and included in administrative expenses:
2002 2001
£’000 £’000
Net write back of permanent diminution in value – investment properties 625 –
Net write back/(write off) of permanent diminution in value – operated properties 900 (1,720)
T enant receivership costs (1,450) (521)
Ultima Holdings Group closure support costs 173 (1,200)
Ultima Holdings Limited guarantees – 752
Operator support – refurbishment costs of care homes – (721)
Operator support – provision for loan – (320)
Provision for losses on sales of properties – (400)
Costs of aborted merger with Southern Cross Healthcare Limited – (521)
T otal exceptional income/(costs) 248 (4,651)
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  39
5. Group operating profit
Group operating profit is arrived at after charging:
2002 2001
£’000 £’000
Depreciation of operated properties 2,879 609
Depreciation of other fixed assets 568 179
Amortisation of goodwill of subsidiary undertakings 104 29
Auditors’ remuneration (including VAT):
– Group audit fees to Group auditors current year 83 66
– Group audit fees to Group auditors prior year 24 –
– Group audit fees to other auditors 52 41
– Company audit fees 73 50
– other fees to Group auditors 185 382
– other fees to other auditors – 7
Operating lease rentals:
– buildings 1,264 60
– equipment 65 –
A further £117,500 (including VAT) has been paid to the Group auditors in respect of the Rights Issue costs (2001: £nil).
This amount has been set off against the share premium account.
6. Share of associated undertakings’ operating profits/(losses)
2002 2001
£’000 £’000
Share of associated undertakings’ operating profits/(losses) 343 (100)
Amortisation of goodwill (60) (110)
283 (210)
7. Net interest payable and similar charges
2002 2001
£’000 £’000
Group
Interest payable on Secured Notes 37,265 37,265
Interest payable on bank loans wholly repayable within 5 years 5,000 7,401
Other interest payable 148 174
Amortisation of issue costs and discount of Secured Notes 1,172 1,207
Finance costs 1,901 1,972
Interest receivable on deposits (806) (1,291)
Interest receivable on Deposit Swap Agreements and Zero Coupon Notes (6,588) (6,407)
Other interest receivable (31) (170)
Associates
Interest payable 22 67
Interest receivable (11) (13)
38,072 40,205 40 NHP Plc  
8. T ax credit on profit on ordinary activities
2002 2001
£’000 £’000
Group
Corporation tax – –
Income tax 523 2,415
Associates
Corporation tax (14) (8)
509 2,407
Effective tax rate n/a n/a
There is no Group liability for mainstream Corporation T ax owing to the availability of capital allowances.
Reconciliation of current tax charge:
Profit on activities before tax 16,370 10,025
T ax on profit at standard rate of 30% (2001: 30%) 4,911 3,008
Factors affecting the charge:
Permanent differences (1,767) 921
Capital allowances for period in excess of depreciation (5,286) (3,680)
Increase in other short term timing differences (952) –
Utilisation of brought forward capital losses (150) –
Utilisation of brought forward revenue losses – (249)
Increase in revenue losses not recognised 3,244 –
Current Group tax charge for the year (excluding associates) – –
9. Dividends paid and proposed
2002 2001
£’000 £’000
Equity
Dividends for the year ended 30 September – –
Non-equity 
Dividends payable to minority interests – 1
– 1
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  41
10. Earnings per share
The earnings per Ordinary Share of 10.1p for the year ended 30 September 2002 is calculated on the profit after taxation,
minority interest and non-equity dividends of £16,879,000 divided by 166,801,087 Ordinary Shares of 1p each, being the
weighted average number of Ordinary Shares in issue during the year.
The diluted earnings per Ordinary Share of 9.9p for the year ended 30 September 2002 is based on the profit after taxation,
minority interest and non-equity dividends of £16,879,000 divided by 170,592,472 Ordinary Shares of 1p each, being the
weighted average number of Ordinary Shares in issue during the year and assuming the Directors’ and employees’ share
options are exercised.
The earnings per Ordinary Share of 8.1p for the year ended 30 September 2001 is calculated on the earnings after taxation,
minority interest and non-equity dividends of £12,431,000 divided by 152,807,869 Ordinary Shares of 1p each. The weighted
average number of Ordinary Shares in issue during 2001 is restated for the effects of the Rights Issue in July 2002.
The diluted earnings per Ordinary Share of 8.1p for the year ended 30 September 2001 is based on the earnings after taxation,
minority interest and non-equity dividends of £12,431,000 divided by 152,807,869 Ordinary Shares of 1p each. The weighted
average number of Ordinary Shares in issue during 2001 is restated for the effects of the Rights Issue in July 2002 and
assumed that the Directors’ and employees’ share options would not be exercised due to the level of the share price.
11. Parent company profit and loss account
2002 2001
£’000 £’000
Profit for the financial year, including dividends from subsidiary undertakings, after taxation 60,422 35,804
The Company has taken advantage of section 230 of the Companies Act 1985 and consequently a profit and loss
account for the Company alone is not presented.
12. Goodwill and acquisitions
Total
Goodwill £’000
Group
Cost
At 1 October 2001 992
Additions – on acquisition of Highfield Holdings Limited 1,138
Additions – fair value adjustment in respect of acquisition of Highfield Care Homes Limited
(formerly ‘Palladium Healthcare Limited’) 170
At 30 September 2002 2,300
Amortisation
At 1 October 2001 (29)
Amortisation for the year (104)
At 30 September 2002 (133)
Net book value at 30 September 2002 2,167
Net book value at 30 September 2001 963
The remaining 51% interest in Highfield Holdings Limited was acquired on 11 December 2001 for £1 consideration, increasing
the Group’ s interest to 100%. Acquisition costs incurred at the date of acquisition were £72,769. Net assets acquired are set
out below. The acquisition method of accounting has been used for this acquisition and the amount of goodwill arising is
£1,137,576 using provisional assessment of fair value applied to the balance sheet of Highfield Holdings Limited. 42 NHP Plc  
12. Goodwill and acquisitions continued
Book value
and fair value 
Acquisition of Highfield Holdings Limited continued £’000
T angible fixed assets 1,341
Current assets
Debtors 3,368
Prepayments and rent deposits 1,539
T otal assets 6,248
Creditors
Trade and other creditors (3,882)
Accruals (1,014)
Bank overdraft (73)
Loan (656)
T otal liabilities (5,625)
Net assets 623
Goodwill 1,138
Total 1,761
Satisfied by:
Transfer from ‘Investments’ of 49% interest on 11 December 2001 – see note 14 1,688
Acquisition costs 73
T otal consideration 1,761
13. T angible fixed assets
Investment properties
Long
Freehold leasehold
land and land and
buildings buildings T otal
£’000 £’000 £’000
Group
Valuation at 1 October 2001 525,140 10,290 535,430
Additions at cost 1,378 – 1,378
Disposals of investment properties at valuation (4,800) – (4,800)
Reclassification of properties to operated properties at valuation (92,465) (3,180) (95,645)
Reclassification of property to properties held for resale at valuation (650) – (650)
Net surplus on revaluation 46,052 940 46,992
Net write back to permanent diminution in value 625 – 625
Valuation at 30 September 2002 475,280 8,050 483,330
Investment properties represent properties held for long term retention. Investment properties have been valued by GVA
Grimley, International Property Advisers, at 30 September 2002, at Market Value on both portfolio and individual property
bases in accordance with the RICS Appraisal and Valuation Manual.
Investment properties, reclassified to operated properties at valuation, were valued by GVA Grimley on an existing use
basis at their respective dates of transfer.
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  43
13. T angible fixed assets continued
The Directors have reviewed GVA Grimley’ s valuation at 30 September 2002 and have made a net write back to permanent
diminution in value of £625,000 which is credited to the profit and loss account. See note 4.
The historical cost of the Group’ s investment properties at 30 September 2002 was £473,707,000 (2001: £591,096,000).
Freehold properties’ historical cost was £466,503,000 at 30 September 2002 (2001: £580,192,000) and long leasehold
properties’ historical cost was £7,204,000 at 30 September 2002 (2001: £10,904,000).
92 homes (2001: 93) are subject to buy-back options by their respective operators that may be exercised in certain
circumstances at purchase prices equivalent to the higher of a formulated figure or the “market value” (as defined in the
respective leases) of the landlord’ s reversionary interest and of the landlord’ s fixtures and fittings.
Company
At 30 September 2002, the Company had investments in freehold investment properties totalling £31 (2001:£31),
representing the consideration paid, including VAT , for the freehold reversions to 26 properties (2001: 26), the 999 year
leasehold interests in which are held by NHP Securities No.3 Limited, a subsidiary undertaking.
Operated properties
Plant,
Freehold Long machinery,
land and leasehold land fixtures
buildings and buildings and fittings T otal
£’000 £’000 £’000 £’000
Group
Cost or valuation
At 1 October 2001 45,582 – 7,275 52,857
Reclassification of properties from investment
properties at valuation 81,776 2,770 11,099 95,645
Reclassification of property from properties held
for resale at carrying value 456 – 74 530
Reclassification of property to properties held
for resale at valuation (611) – (99) (710)
Capital expenditure on operated properties – – 4,553 4,553
Net write back to permanent diminution in value 900 – – 900
Net surplus on revaluation 7,448 190 – 7,638
At 30 September 2002 135,551 2,960 22,902 161,413
Depreciation
At 1 October 2001 (120) – (489) (609)
Depreciation for the year (1,852) (17) (1,010) (2,879)
Depreciation on transfer of property to properties held for resale 12 – 6 18
Transfer to revaluation reserve 1,960 17 – 1,977
At 30 September 2002 – – (1,493) (1,493)
Net book value at 30 September 2002 135,551 2,960 21,409 159,920
Net book value at 30 September 2001 45,462 – 6,786 52,248 44 NHP Plc  
13. T angible fixed assets continued
Operated properties represent properties held for long term retention.Operated properties have been valued by GVA
Grimley, International Property Advisers, at 30 September 2002 at existing use value on both portfolio and individual
property bases in accordance with the RICS Appraisal and Valuation Manual.
Operated properties, reclassified from investment properties at valuation, were valued by GVA Grimley on an existing use
basis at their respective dates of transfer.
Although operated properties were not revalued as at 30 September 2001, the stated net book value at that date
approximated to valuation by virtue of the fact that the properties were transferred from investment properties at existing
use valuation.
The Directors have reviewed in detail the GVA Grimley valuation at 30 September 2002 and have made a net write back to
permanent diminution in value of £900,000 which is credited to the profit and loss account. See note 4.
The historical cost of the Group’ s operated properties at 30 September 2002 was £185,904,000 (2001: £70,959,000).
Freehold historical cost was £182,119,000 at 30 September 2002 (2001:£70,959,000) and long leasehold properties’
historical cost was £3,785,000 at 30 September 2002 (2001: £nil). Depreciation charged for the year ended
30 September 2002 in respect of properties under leases was £24,000 (2001:£nil).
Other tangible fixed assets
Short Office
leasehold equipment Motor
improvements and fixtures vehicles T otal
£’000 £’000 £’000 £’000
Group
Cost or valuation
At 1 October 2001 174 459 341 974
Additions in the year 51 535 257 843
Additions – on acquisition of Highfield Holdings Limited – 1,075 266 1,341
Disposals (174) (279) (98) (551)
At 30 September 2002 51 1,790 766 2,607
Depreciation
At 1 October 2001 (134) (249) (95) (478)
Depreciation for the year (42) (326) (200) (568)
Depreciation on disposals 174 10 37 221
At 30 September 2002 (2) (565) (258) (825)
Net book value at 30 September 2002 49 1,225 508 1,782
Net book value at 30 September 2001 40 210 246 496
At 30 September 2002 the net book values of assets held under finance leases and hire purchase contracts were £64,000
for office equipment and fixtures (2001: £nil) and £185,000 for motor vehicles (2001:£21,000). Depreciation charged in
respect of assets held under finance leases and hire purchase contracts for the year ended 30 September 2002 was
£196,894 (2001: £nil).
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  45
13. T angible fixed assets continued
Short Office
leasehold equipment
improvements and fixtures T otal
£’000 £’000 £’000
Company
Cost
At 1 October 2001 15 96 111
Disposals (15) (6) (21)
At 30 September 2002 – 90 90
Depreciation
At 1 October 2001 (15) (94) (109)
Depreciation for the year – (2) (2)
Depreciation on disposals 15 6 21
At 30 September 2002 – (90) (90)
Net book value at 30 September 2002 – – –
Net book value at 30 September 2001 – 2 2
Capital commitments
Group Company
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Contracted and committed 1,112 986 – –
14. Investments
2002 2001
£’000 £’000
Group
Deposit Swap Agreement at cost 15,350 15,350
Accumulated compound interest 8,183 6,416
Deposit Swap Agreement – Care Homes 1 23,533 21,766
Deposit Swap Agreement at cost 57,180 57,180
Accumulated compound interest 10,855 7,670
Deposit Swap Agreement – Care Homes 2 68,035 64,850
Zero Coupon Notes at cost 36,010 36,010
Accumulated compound interest 4,828 3,192
Zero Coupon Notes – Care Homes 3 40,838 39,202
Investment in associate – G.R. Patrick & Co. Limited 411 479
Investment in associate – Highfield Holdings Limited – 1,395
Investment in Ultima Holdings Limited – see below – –
132,817 127,692
The Deposit Swap Agreement of £15.35 million represents the premium paid by Care Homes 1 in respect of an AAA rated
Deposit Swap Agreement with General Re Financial Products Corporation which, together with accumulated interest,
guarantees to provide for the repayment of £100 million Class A1 and Class A2 Secured Notes in 2021. 46 NHP Plc  
14. Investments continued
The Deposit Swap Agreement of £57.18 million represents the premium paid by Care Homes 2 in respect of an AAA rated
Deposit Swap Agreement with General Re Financial Products Corporation which, together with accumulated interest,
guarantees to provide for the repayment of £180 million Class A Secured Notes in 2023.
The Zero Coupon Notes of £36.01 million represents the consideration paid by Care Homes 3 in respect of AAA rated Zero
Coupon Notes issued by the European Investment Bank which, together with accumulated interest, guarantee to provide
for the repayment of £128 million Class A Secured Notes in 2028.
G.R.Patrick & Co. Limited
The investment of 20.42% in G.R. Patrick & Co. Limited was made on 12 March 1999. The principal activity of the company
is that of an insurance brokerage specialising in healthcare. The carrying value of the investment is analysed as follows:
Share of
Goodwill net assets T otal
£’000 £’000 £’000
At 1 October 2001 401 78 479
Retained profit to 30 September 2002 – 17 17
Dividends received – (33) (33)
Amortisation to 30 September 2002 (52) – (52)
At 30 September 2002 349 62 411
G.R. Patrick & Co. Limited bought back 11,326 of its own shares from a third party shareholder on 30 September 2002,
thereby increasing NHP’ s shareholding to 22.5%.
Highfield Holdings Limited
The investment in Highfield Holdings Limited, a care home operator and tenant of the Group, was made on 24 January
2001 and represented an effective 49% interest in that company. On 11 December 2001 the company became a 100%
owned subsidiary undertaking of NHP Plc as a result of the acquisition of the remaining 51% issued equity in that company.
The carrying value of the investment is analysed as follows:
Share of
Goodwill net assets T otal
£’000 £’000 £’000
At 1 October 2001 1,608 (213) 1,395
Goodwill adjustment on 49% interest (217) 217 –
Retained profit to 11 December 2001 – 301 301
Amortisation to 11 December 2001 (8) – (8)
Transfer to ‘Goodwill and acquisitions’ on becoming
100% subsidiary undertaking– see note 12 (1,383) (305) (1,688)
At 30 September 2002 – – –
Ultima Holdings Limited
The investment in Ultima Holdings Limited, the parent company of Ultima Healthcare Limited, a tenant of the Group, is
analysed as follows:
Cost 
£’000
Cost
At 1 October 2001 13,970
At 30 September 2002 13,970
Provision for impairment
At 1 October 2001 (13,970)
At 30 September 2002 (13,970)
Net book value at 30 September 2002 –
Net book value at 30 September 2001 –
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  47
14. Investments continued
Subordinated 
Shares in Investment in loan notes to 
subsidiary associated subsidiary
undertakings undertakings undertakings T otal
£’000 £’000 £’000 £’000
Company
Cost
At 1 October 2001 1,653 2,157 163,711 167,521
Dividends received – (33) – (33)
Transfer of 49% interest in Highfield Holdings Limited to ‘Shares
in subsidiary undertakings’ on becoming 100% subsidiary undertaking 1,590 (1,590) – –
Net additions during the year 73 – 32,117 32,190
Reclassification (157) – 157 –
Repayment – – (157) (157)
At 30 September 2002 3,159 534 195,828 199,521
Provision for impairment
At 1 October 2001 – – (3,711) (3,711)
Reversal of impairment provision – – 3,711 3,711
At 30 September 2002 – – – –
Net book value at 30 September 2002 3,159 534 195,828 199,521
Net book value at 30 September 2001 1,653 2,157 160,000 163,810
The reversal of impairment provision of £3,711,000 is principally as a result of improvements in the valuation of the assets
in the subsidiary undertakings.
At 30 September 2002, the Company held investments in the following principal subsidiary and associated undertakings:
Country of %
Name incorporation Holding Principal activity
Subsidiary undertakings
NHP Securities No.1 Limited Great Britain 100.00% Investment in care home properties
NHP Securities No.2 Limited Great Britain 100.00% Investment in care home properties
NHP Securities No.3 Limited Great Britain 100.00% Investment in care home properties
NHP Securities No.4 Limited Great Britain 100.00% Partner in LLNHP Partnership
NHP Securities No.6 Limited Great Britain 100.00% Investment in care home properties
NHP Securities No.9 Limited Jersey 100.00% Investment in overriding leases of care home properties
NHP Securities No.11 Limited Jersey 100.00% Holding company of NHP Securities No.9 Limited
NHP Management Limited Great Britain 100.00% Management of care home property portfolios
LLNH Limited Great Britain 100.00% Partner in LLNHP Partnership
Highfield Care Homes No.3 Limited Great Britain 100.00% Care home operator
(formerly ‘Somerford Leased Homes Limited’)
Highfield Care Homes Limited Great Britain 100.00% Care home operator
(formerly ‘Palladium Healthcare Limited’)
Highfield Care Homes No.2 Limited Great Britain 100.00% Care home operator
(formerly ‘Palladium Leased Homes Limited’)
Highfield Holdings Limited Great Britain 100.00% Care home operator
Highfield Home Properties Limited Great Britain 100.00% Care home operator
Highfield Home Properties (Perth) Limited Great Britain 100.00% Care home operator
Highfield Care Centres Limited Great Britain 100.00% Care home operator
Highfield Operations Limited Great Britain 100.00% Care home operator
Highfield Operations (No.2) Limited Great Britain 100.00% Care home operator
Associated undertaking
G.R. Patrick & Co. Limited Great Britain 22.50% Insurance brokerage specialising in healthcare 48 NHP Plc  
15. Debtors
2002 2001
£’000 £’000
Group
Trade debtors 8,715 4,521
Other debtors 1,794 902
Corporation tax 197 516
Prepayments and accrued income 4,171 2,098
14,877 8,037
Company
Other debtors 176 –
Corporation tax 193 512
Amounts owed by Group companies 26,357 14,536
Prepayments and accrued income 18 670
26,744 15,718
16. Short term investments
2002 2001
£’000 £’000
Group
Short term deposit held by Care Homes 1 7,700 7,500
Short term deposit held by Care Homes 2 3,100 –
Short term deposit held by Care Homes 3 5,000 4,500
Rent deposits held by Highfield Care Group 1,766 409
Cash collateral held on deposit 303 –
17,869 12,409
£3,644,000 (2001: £3,644,000) of the short term deposits in Care Homes 1 are reserved against long term eventualities and
are reinvested six monthly. The remainder of the short term deposits in Care Homes 1, 2 and 3 are required to meet short
term interest on the Secured Notes.
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  49
17. Creditors: amounts falling due within one year
2002 2001
£’000 £’000
Group
Bank loans due within one year – see note 19 – 8,480
Mortgage on freehold property owned by Highfield Care Homes Limited – see note 19 38 –
Loan from third party to Highfield Care Homes Limited – 24
Loan from third party to Highfield Holdings Limited – see note 19 75 –
Obligations under finance leases and hire purchase contracts 105 8
Interest payable 10,144 11,477
Income tax – 523
T axation and social security 1,291 385
Other creditors 8,465 1,880
Accruals and deferred income 5,440 4,532
25,558 27,309
Company
Bank overdraft 35 –
Amount due to Care Homes 1 11 –
Amount due to Care Homes 2 13 –
Amount due to Care Homes 3 39 –
Amounts due to Group companies 1,114 261
Other creditors 501 437
Accruals and deferred income 85 129
1,798 827
18. Deferred taxation
Provided Unprovided
2002 2001 2002 2001
£’000 £’000 £’000 £’000
Group
Accelerated capital allowances – – (14,009) (20,946)
Losses created by capital allowances – – (4,538) (2,588)
Short term timing differences – – 952 –
Revaluation of investment properties – – 29,506 8,295
– – 11,911 (15,239)
The Directors have taken advice from GVA Grimley, International Property Advisers, and consider that the appropriate value
of assets qualifying for capital allowances, to be used in the calculation of deferred tax, is an apportionment of the total
portfolio value. Applying the valuation, the Group has, as at 30 September 2002, unprovided deferred tax assets of
£14,009,000 in respect of accelerated capital allowances (2001: £20,946,000) and £4,538,000 in respect of revenue
losses (2001: £2,588,000). These assets would be recovered if in future they reverse in the same periods and entities in
which suitable taxable profits arise.
In the prior year the Group reported an unprovided deferred tax liability of £16,057,000 in respect of accelerated capital
allowances. As a result of the implementation of FRS 19, the underlying basis for determining the carrying value of assets
qualifying for capital allowances has been revised to more accurately reflect the historic transactions undertaken by the
Group. The prior year comparatives have been restated to reflect this.
The deferred tax liability on the potential capital gain arising in relation to the revalued freeholds of £29,506,000 (2001:
£8,295,000) is not recognised as the Group has no intention to sell these properties at this time and there is no binding
agreement.
Company
There is no provided or unprovided deferred tax in respect of the Company. 50 NHP Plc  
19. Creditors: amounts falling due after more than one year
2002 2001
£’000 £’000
Group
Bank loans due between one and two years – 86,000
Bank loans due between two and five years 53,165 –
Less: Unamortised finance costs (1,628) (2,010)
Net bank loans 51,537 83,990
Class A1 Secured 8% Notes due 2021 60,000 60,000
Class A2 Secured 8.5% Notes due 2021 40,000 40,000
Less: Unamortised issue costs (2,225) (2,346)
Unamortised discount on issue (595) (627)
Net Secured Notes – Care Homes 1 97,180 97,027
Class A Secured 5.75% Notes due 2023 180,000 180,000
Class M Secured 6.65% Notes due 2025 60,000 60,000
Class B Secured 7.65% Notes due 2025 25,000 25,000
Less: Unamortised issue costs (6,376) (6,714)
Unamortised discount on issue (450) (472)
Net Secured Notes – Care Homes 2 258,174 257,814
Class A Secured 6.125% Notes due 2028 128,000 128,000
Class M Secured 7.125% Notes due 2030 42,000 42,000
Class B Secured 8.25% Notes due 2030 24,000 24,000
Less: Unamortised issue costs (15,693) (16,361)
Unamortised discount on issue (2,295) (2,386)
Net Secured Notes – Care Homes 3 176,012 175,253
Mortgage on freehold property owned by Highfield Care Homes Limited 185 260
Loan from third party to Highfield Care Homes Limited – 31
Loan from third party to Highfield Holdings Limited 525 –
Net loans owed by Highfield Care 710 291
Obligations under finance leases and hire purchase contracts 77 13
583,690 614,388
Bank loans
At 30 September 2002, a £53,165,000 loan was drawn on the £90 million (2001: £101 million) revolving credit facility from a
syndicate led by Bank of Scotland which matures on 31 December 2004. The loan bears interest at LIBOR plus 1.75% and
is secured by a fixed charge on certain of the freehold and long leasehold properties held in NHP Securities No.3 Limited,
together with a floating charge on its other assets and an unlimited guarantee from NHP Plc.
Secured Notes
The Care Homes 1 Secured Notes are non-recourse to NHP Plc and its subsidiaries, and are secured, inter alia, by charges
over the overriding leases and the rents receivable thereunder, over the Deposit Swap Agreement with General Re Financial
Products Corporation, which at 30 September 2002 amounted to £23,533,000 including accrued interest (see note 14),
and over cash and short term investment balances, which at 30 September 2002 amounted to £8,148,000.
The Care Homes 2 Secured Notes are non-recourse to NHP Plc and its subsidiaries, and are secured, inter alia, by charges
over the overriding leases and the rents receivable thereunder, over the Deposit Swap Agreement with General Re Financial
Products Corporation, which at 30 September 2002 amounted to £68,035,000 including accrued interest (see note 14),
and over cash and short term investment balances, which at 30 September 2002 amounted to £3,739,000.
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  51
19. Creditors: amounts falling due after more than one year continued
Secured Notes continued
The Care Homes 3 Secured Notes are non-recourse to NHP Plc and its subsidiaries, and are secured, inter alia, by charges
over the overriding leases and the rents receivable thereunder, over the Zero Coupon Notes with European Investment
Bank, which at 30 September 2002 amounted to £40,838,000 including accrued interest (see note 14), and over cash and
short term investment balances, which at 30 September 2002 amounted to £5,616,000.
Mortgage on freehold property owned by Highfield Care Homes Limited
The bank mortgage of £222,708 (2001: £259,225) from Bank of Scotland is secured on the assets of Highfield Care Homes
Limited and bears interest at 1.5% over base bank rate with a minimum interest rate of 6.5%. The mortgage is repayable in
equal monthly instalments with the final repayment date on 12 September 2007. £37,600 is reported within ‘Creditors falling
due within one year’ (see note 17).
Loan from third party to Highfield Holdings Limited
A loan of £600,000 due to Highfield Group Limited (in administration) is repayable in equal instalments over eight years.
Interest is charged on the loan at 2% above base rate. £75,000 of the total outstanding is reported within ‘Creditors falling
due within one year’ (see note 17).
20. Provisions for liabilities and charges
Income/(cost) Profit
At 1 Oct incurred and loss At 30 Sep
2001 in the year account 2002
£’000 £’000 £’000 £’000
Group
Ultima Holdings Limited closure costs 120 116 (173) 63
Receivership support costs 400 (825) 1,450 1,025
Total 520 (709) 1,277 1,088
Company
Provision against loans to subsidiary undertakings 46,520 – (46,520) –
At 30 September 2002 46,520 – (46,520) –
At 30 September 2001, the provision against loans to subsidiary undertakings of £46,520,000 principally existed as a result of
temporary downward movements in the valuation of properties below their original cost in the year ended 30 September 2000.
At 30 September 2002, the Directors consider a write back of the full amount is appropriate as a result of improvements in the
valuation of the assets in the relevant subsidiary undertakings. In both 2002 and 2001, the valuation of the portfolio of
properties has recovered reducing the provision by £46,520,000 at 30 September 2002 (2001: £12,607,000). 52 NHP Plc  
21. Financial instruments
Hedging instruments policy
The Group does not trade in derivatives or other interest rate hedging instruments, but the Directors consider the use of
appropriate financial instruments to protect the Group against exposure to possible interest rate rises. 
Short-term debtors and creditors have been omitted from all disclosures, as permitted by FRS 13.
Currency profile
All of the Group’ s financial liabilities and assets at 30 September 2002 and 30 September 2001 were sterling denominated.
Maturity profile of financial liabilities
The maturity profile of the Group’ s gross financial liabilities at 30 September was as follows:
Other loans 
Bank Secured and finance Total Total
loans Notes leases 2002 2001
£’000 £’000 £’000 £’000 £’000
In one year or less or on demand 38 – 180 218 8,512
More than one year but not more than two years 38 – 152 190 86,013
More than two years but not more than five years 53,279 – 225 53,504 –
More than five years 33 559,000 225 559,258 559,291
53,388 559,000 782 613,170 653,816
The Group had the following undrawn committed bank loan facilities at 30 September:
2002 2001
£’000 £’000
Expiring in less than one year – 8,885
Expiring in more than one year but not more than two years 15,000 –
Expiring in more than two years but not more than five years 21,835 –
36,835 8,885
Maturity profile of financial assets
At 30 September 2002, the Group held two Deposit Swap Agreements and Zero Coupon Notes with a combined carrying
value of £132,406,000 (2001: £125,818,000) which will mature in more than five years. The Deposit Swap Agreements and
Zero Coupon Notes will provide for the repayment of £408,000,000 (2001: £408,000,000) of the Secured Notes as more
fully described in note 14.
At 30 September 2002, the Group held short term deposits and cash at bank and in hand totalling £20,208,000
(2001: £17,045,000).
None of the deposits had a maturity date beyond 30 October 2002.
Interest rate profile of financial liabilities
The interest rate profile of the Group’ s gross financial liabilities at 30 September 2002 was as follows:
2002 2001
£’000 £’000
Fixed rate 559,182 559,021
Floating rate 53,988 94,795
613,170 653,816
With respect to the £53,988,000 of floating rate debt, in order to hedge against adverse changes in interest rates NHP plc
purchased a £60,000,000 interest rate cap at 6.25% in November 2000. This amortised to £30,000,000 on 8 November
2001, and expired on 8 November 2002. 
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  53
21. Financial instruments continued
Interest rate profile of financial liabilities continued
At 30 September 2002, the weighted average interest rate on the fixed rate financial liabilities of the Group was 6.67%
(2001: 6.67%) and the weighted average period for which the rate is fixed was 22 years (2001: 23 years).
The floating rate financial liabilities at 30 September 2002 principally comprised bank borrowings bearing interest at rates
based on one month LIBOR.
Interest rate profile of financial assets
The interest rate profile of the Group’ s financial assets at 30 September 2002 was as follows:
2002 2001
£’000 £’000
Fixed rate 132,406 125,818
Floating rate 20,208 17,045
152,614 142,863
At 30 September 2002, the weighted average interest rate on the fixed rate financial assets of the Group was 5.26% and
the weighted average period for which the rate is fixed was 22 years.
The floating rate financial assets at 30 September 2002 comprised short term deposits and cash at bank and in hand,
bearing interest at rates based on LIBOR.
Fair values of financial liabilities and assets
Set out below is a comparison by category of book values and estimated fair values of the Group’ s financial liabilities and
assets at 30 September 2002:
Book value Fair value
£’000 £’000
Primary financial instruments held or issued to finance the Group’s operations
Bank loans (53,388) (53,388)
Secured Notes (559,000) (581,079)
Other loans and finance leases (782) (782)
Gross financial liabilities (613,170) (635,249)
Deposit Swap Agreements and Zero Coupon Notes 132,406 147,024
Short term deposits 17,869 17,869
Cash at bank and in hand 2,339 2,339
Interest rate cap £30 million 5 –
Gross financial assets 152,619 167,232
The fair values of the Secured Notes, Deposit Swap Agreements and Zero Coupon Notes have been determined by
reference to prices available from the markets on which the instruments involved are traded. 54 NHP Plc  
21. Financial instruments continued
Gains and losses on hedges
The Directors consider the use of hedging instruments to manage the Group’ s interest rate profile. The table below shows
the extent to which the Group has off-balance sheet (unrecognised) and on-balance sheet (carried forward) gains and
losses in respect of financial instruments used as hedges.
Unrecognised Carried forward
Gains Losses Net Gains Losses Net
£’000 £’000 £’000 £’000 £’000 £’000
Gains and losses brought forward at 1 October 2001 13,511 (14,583) (1,072) – – –
Gains recognised in the year (1,768) (4,820) (6,588) – – –
Gains and losses arising before 1 October 2001 that
were not recognised before 30 September 2002 11,743 (19,403) (7,660) – – –
Gains and losses arising in the year 5,602 16,671 22,273 – – –
Gains and losses carried forward at 30 September 2002 17,345 (2,732) 14,613 – – –
T o be recognised before 30 September 2003 1,832 4,950 6,782 – – –
T o be recognised after 30 September 2003 15,513 (7,682) 7,831 – – –
22. Called up share capital
Number £’000
Authorised:
Ordinary Shares of 1p each
At 1 October 2001 185,000,000 1,850
Increase 185,000,000 Ordinary Shares of 1p each 185,000,000 1,850
At 30 September 2002 370,000,000 3,700
Called up, allotted and fully paid:
Ordinary Shares of 1p each
At 1 October 2001 146,074,106 1,461
UK Rights Issue Offer on 3 July 2002 at 1p nominal value and 61p premium per share 4,516,129 45
UK Rights Issue Offer on 5 July 2002 at 1p nominal value and 61p premium per share 18,683,871 187
UK Rights Issue Offer on 8 July 2002 at 1p nominal value and 61p premium per share 25,352,106 254
UK Open Offer on 5 July 2002 at 1p nominal value, 61p premium per share and
10.25p lapse right price 6,225,683 62
At 30 September 2002 200,851,895 2,009
Under the NHP Plc 1998 Inland Revenue Approved Executive Share Option Scheme, employees of the Group held options
at 30 September 2002 to subscribe for 32,100 unissued Ordinary Shares of the Company (2001: 64,500) as follows:
Option 
Number of price per Date from 
Date granted shares share (p) which exercisable Expiry date
09 Sep 1998 10,700 128.5 09 Sep 2001 09 Sep 2008
05 Jul 1999 10,700 158.0 05 Jul 2002 05 Jul 2009
18 Jan 2000 10,700 126.0 18 Jan 2003 18 Jan 2010
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  55
22. Called up share capital continued
Under the NHP Plc 1998 Inland Revenue Approved Savings Related Share Option Scheme, employees of the Group held
options at 30 September 2002 to subscribe for 19,390 unissued Ordinary Shares of the Company (2001: 61,692) as follows:
Option 
Number of price per Date from 
Option date T erm shares share (p) which exercisable Expiry date
01 Feb 2000 Three years 3,620 107 01 Feb 2003 01 Aug 2003
01 Feb 2000 Five years 15,770 107 01 Feb 2005 01 Aug 2005
Under the NHP Plc 2001 Unapproved Executive Share Option Scheme, employees of the Group held options at
30 September 2002 to subscribe for 10,824,496 unissued Ordinary Shares of the Company (2001: 6,182,784) as follows:
Option 
Number of price per Date from 
Date granted shares share (p) which exercisable Expiry date
13 Sep 2001 6,182,784 35.0 14 Sep 2004 13 Sep 2011
08 Oct 2001 343,488 35.0 09 Oct 2004 08 Oct 2011
13 Dec 2001 1,472,704 40.0 14 Dec 2004 13 Dec 2011
25 Jul 2002 682,250 69.0 26 Jul 2005 25 Jul 2012
30 Sep 2002 2,143,270 82.0 01 Oct 2005 30 Sep 2012
Under the NHP Plc 2001 Approved Executive Share Option Scheme, employees of the Group held options at
30 September 2002 to subscribe for 1,991,890 unissued Ordinary Shares of the Company (2001: Nil) as follows:
Option 
Number of price per Date from 
Date granted shares share (p) which exercisable Expiry date
12 Oct 2001 666,400 36.0 13 Oct 2004 12 Oct 2011
13 Dec 2001 134,000 44.8 14 Dec 2004 13 Dec 2011
25 Jul 2002 1,085,400 74.5 26 Jul 2005 25 Jul 2012
30 Sep 2002 106,090 82.0 01 Oct 2005 30 Sep 2012
The above tables have been restated to reflect the effects of the Rights Issue in July 2002. 56 NHP Plc  
23. Reserves
Share Profit
premium Revaluation and loss
account reserve account
Group £’000 £’000 £’000
At 1 October 2001 159,580 (65,053) 6,404
Net surplus on revaluation of properties – 56,607 –
Realisation of net valuation losses on disposal of investment properties – 2,045 (2,045)
Premium arising on Rights Issue of 54,777,789 Ordinary Shares at 61p per share 33,415 – –
Less: Issue costs incurred (2,104) – –
Retained profit for the year – – 16,879
At 30 September 2002 190,891 (6,401) 21,238
Share Profit
premium Revenue and loss
account reserve account
Company £’000 £’000 £’000
At 1 October 2001 159,580 914 (29,769)
Premium arising on Rights Issue of 54,777,789 Ordinary Shares at 61p per share 33,415 – –
Less: Issue costs incurred (2,104) – –
Retained profit for the year – – 60,422
At 30 September 2002 190,891 914 30,653
24. Net assets per Ordinary Share
2002 2001
Basic
Equity Shareholders’ funds £207,737,000 £102,392,000
Number of Ordinary Shares of 1p each in issue 200,851,895 156,299,293
Net assets per Ordinary Share 103.4p 65.5p*
*Basic net assets per Ordinary Share at 30 September 2001 has been restated for the effects of the Rights Issue in July 2002.
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  57
25. Gearing
2002 2001
£’000 £’000
Consolidated
Secured Notes* 559,000 559,000
Bank loans 53,388 94,740
Other loans 600 55
Finance leases 182 21
Deposit Swap Agreements and Zero Coupon Notes* (132,406) (125,818)
Short term investments and cash at bank and in hand (20,208) (17,045)
Net borrowings 460,556 510,953
Shareholders’ funds 207,737 102,392
Consolidated gearing 222% 499%
Excluding non-recourse financial assets and liabilities*
Bank loans 53,388 94,740
Other loans 600 55
Finance leases 182 21
Short term investments and cash at bank and in hand (2,705) (1,016)
Net recourse borrowings 51,465 93,800
Shareholders’ funds 207,737 102,392
Net indebtedness from securitisation companies (34,405) (32,863)
Adjusted Shareholders’ funds 173,332 69,529
Gearing excluding non-recourse borrowings 30% 135%
*Relating to Care Homes 1, Care Homes 2 and Care Homes 3.
26. Reconciliation of operating profit to operating cash flows
2002 2001
£’000 £’000
Operating profit 54,071 50,351
Depreciation of operated properties 2,879 609
Depreciation of other fixed assets 568 179
Amortisation of goodwill of subsidiary undertakings 104 29
Net write back of permanent diminution in value – investment properties (625) –
Net (write back)/write off of permanent diminution in value – operated properties (900) 1,720
Loss on disposal of other tangible fixed assets – 7
Provision for losses on sale of properties – 400
Share of associated undertakings’ operating (profits)/losses (283) 210
Write down in value of properties held for resale 18 –
Increase in debtors (1,985) (461)
Increase in creditors 3,457 479
Increase/(decrease) in provisions 568 (1,735)
Net cash inflow from operating activities 57,872 51,788 58 NHP Plc  
Notes to the accounts continued
For the year ended 30 September 2002
27. Analysis of changes in net debt
At Cash Non-cash At
1 Oct 2001 flow changes 30 Sep 2002
£’000 £’000 £’000 £’000
Cash at bank and in hand 4,636 (2,297) – 2,339
Short term investments 12,409 5,460 – 17,869
Bank loans due within one year (8,480) 8,480 (38) (38)
Bank loans due after one year (net of unamortised finance costs) (84,250) 35,208 (2,680) (51,722)
Other loans due within one year (24) 80 (131) (75)
Other loans due after one year (31) 31 (525) (525)
Finance leases due within one year (8) 8 (105) (105)
Finance leases due after one year (13) 10 (74) (77)
Secured Notes (net of unamortised issue and discount costs) (530,094) – (1,272) (531,366)
Total (605,855) 46,980 (4,825) (563,700)
28. Analysis of changes in cash
2002 2001
£’000 £’000
Cash at bank and in hand at the beginning of the year 4,636 2,139
(Decrease)/increase in cash during the year (2,297) 2,497
Cash at bank and in hand at the end of the year 2,339 4,636
29. Reconciliation of net cash flow to movement in net debt
2002 2001
£’000 £’000
(Decrease)/increase in cash during the year (2,297) 2,497
Net cash outflow from debt financing activities 43,817 46,485
Net cash outflow/(inflow) from management of liquid resources 5,460 (51,504)
Changes in net debt resulting from cash flows 46,980 (2,522)
Non-cash changes in net debt (4,825) (551)
Movement in net debt during the year 42,155 (3,073)
Net debt at the beginning of the year (605,855) (602,782)
Net debt at the end of the year (563,700) (605,855)
30. Operating lease commitments
The Group had the following annual commitments under non-cancellable operating leases:
2002 2001
£’000 £’000
Land and buildings – expiring in less than one year 235 45
Land and buildings – expiring between one to five years 550 –
Land and buildings – expiring more than five years 1,708 –
Other – expiring between one to five years 68 3
2,561 48 NHP Plc  59
31. Disclosures relating to Care Homes 1, Care Homes 2 and Care Homes 3 
A summary of the financial statements of Care Homes 1 for the year ended 30 September 2002 and the year ended
30 September 2001, which have been included in the consolidated financial statements of the Group, is as follows:
2002 2001
Care Homes 1 £’000 £’000
Balance sheet
Fixed asset investments:
Overriding lease premiums, net of amortisation 60,306 63,565
Deposit Swap Agreement, including accumulated compound interest 23,533 21,766
Net current assets 3,566 3,566
Creditors: amounts falling due after more than one year
Class A1 and A2 Secured Notes, net of unamortised issue costs and discount (97,180) (97,027)
Shareholders’ deficit (9,775) (8,130)
Profit and loss account
Turnover and gross profit 11,510 11,015
Net operating costs (6,808) (7,186)
Net interest payable and similar charges (6,347) (6,375)
Taxation – 777
Equity dividends payable – –
Loss for the year (1,645) (1,769)
Cash flow statement
Net cash inflow from operating activities 8,592 7,324
Servicing of finance – interest paid on Secured Notes (8,200) (8,200)
Management of liquid resources – short term deposit (placement)/ withdrawal (200) 1,000
Increase in cash in the year 192 124
The summary of the financial statements disclosed above is prepared in accordance with the accounting principles
generally accepted in the UK (UK GAAP). The financial statements of Care Homes 1 are prepared under accounting
principles generally accepted in the United States (US GAAP) under which the Deposit Swap Agreement is valued in
those accounts at £40,878,000 (2001: £35,277,000), on a mark-to-market basis. 60 NHP Plc  
Notes to the accounts continued
For the year ended 30 September 2002
31. Disclosures relating to Care Homes 1, Care Homes 2 and Care Homes 3 continued
A summary of the financial statements of Care Homes 2 for the year ended 30 September 2002 and the year ended
30 September 2001, which have been included in the consolidated financial statements of the Group, is as follows:
2002 2001
Care Homes 2 £’000 £’000
Balance sheet
Fixed asset investments:
Overriding lease premiums, net of amortisation 173,640 182,165
Deposit Swap Agreement, including accumulated compound interest 68,035 64,849
Net current liabilities (3,116) (3,143)
Creditors: amounts falling due after more than one year
Class A, M and B Secured Notes, net of unamortised issue costs and discount (258,293) (257,939)
Shareholders’ deficit (19,734) (14,068)
Profit and loss account
Turnover and gross profit 26,567 26,236
Net operating costs (18,769) (20,206)
Net interest payable and similar charges (13,464) (13,494)
Profit on disposal of overriding lease – 370
Taxation – 1,638
Loss for the year (5,666) (5,456)
Cash flow statement
Net cash inflow from operating activities 17,785 13,585
Servicing of finance – interest paid on Secured Notes (16,252) (16,252)
Net cash (outflow)/inflow from investing activities:
Investment in overriding leases – (1,234)
Proceeds on disposal of overriding lease – 1,650
Management of liquid resources – short term deposit (placement)/withdrawal (3,100) 3,750
(Decrease)/increase in cash in the year (1,567) 1,499
The summary of the financial statements disclosed above is prepared in accordance with the accounting principles
generally accepted in the UK (UK GAAP). The financial statements of Care Homes 2 are prepared under accounting
principles generally accepted in the United States (US GAAP) under which the Deposit Swap Agreement is valued in
those accounts at £67,784,000 (2001: £58,172,000), on a mark-to-market basis.  NHP Plc  61
31. Disclosures relating to Care Homes 1, Care Homes 2 and Care Homes 3 continued
A summary of the financial statements of Care Homes 3 for the year ended 30 September 2002 and the year ended
30 September 2001, which has been included in the consolidated financial statements of the Group, is as follows:
2002 2001
Care Homes 3 £’000 £’000
Balance sheet
Fixed asset investments:
Overriding lease premiums, net of amortisation 147,178 152,800
Zero Coupon Notes, including accumulated compound interest 40,838 39,202
Net current liabilities (24,273) (24,346)
Creditors: amounts falling due after more than one year
Class A, M and B Secured Notes, net of unamortised issue costs and discount (176,012) (175,253)
Shareholders’ deficit (12,269) (7,597)
Profit and loss account
Turnover and gross profit 21,928 21,060
Net operating costs (13,286) (13,241)
Net interest payable and similar charges (13,315) (13,059)
Taxation 523 –
Loss for the year (4,150) (5,240)
Cash flow statement
Net cash inflow from operating activities 12,413 12,338
Servicing of finance – interest paid on Secured Notes (12,812) (12,812)
Net cash outflow from investing activities:
Investment in overriding leases – (33,531)
Proceeds on disposal of overriding lease – 605
Management of liquid resources – short term deposit (placement)/withdrawal (500) 47,158
Net cash outflows from financing activities:
Subordinated loan notes repaid to NHP Securities No.3 Limited – (2,662)
Subordinated loan notes repaid to NHP Securities No.10 Limited – (10,097)
(Decrease)/increase in cash in the year (899) 999
The summary of the financial statements disclosed above is prepared in accordance with the accounting principles
generally accepted in the UK (UK GAAP). The financial statements of Care Homes 3 are prepared under accounting
principles generally accepted in the United States (US GAAP) under which the Zero Coupon Notes are valued in those
accounts at £38,362,000 (2001: £32,000,000), on a mark-to-market basis.
32. Contingent liabilities and guarantees
(i) The Company guarantees the Bank of Scotland amortising facility of £90 million referred to in note 19 of the financial
statements.
(ii) The Company has issued guarantees in favour of Care Homes 1, Care Homes 2, Care Homes 3 and IRG Capita
Trustees Limited (formerly Royal Exchange Trust Company Limited) of performance by NHP Securities No.1 Limited,
NHP Securities No.2 Limited, NHP Securities No.3 Limited and NHP Management Limited of their obligations arising
in respect of the overriding leases and associated documents. 
(iii) NHP Securities No.3 Limited (“NHPS3”), a wholly owned subsidiary of the Company, has guaranteed the repayment
to Ultima Healthcare Limited of the principal amount of a loan of £6 million made by Ultima Healthcare Limited to its parent
company Ultima Holdings Limited. The loan balance outstanding at 30 September 2002 and 30 September 2001 was
£3.75 million. The Directors are of the opinion that the guarantee will not be called. The Company has issued letter of
solvency support for recognised trading liabilities to the Ultima Group companies. 62 NHP Plc  
33. Related party transactions
(i) At 30 September 2002 and 30 September 2001 D F Francis, a Director of the Company, was the Company’ s
representative on the Boards of Ultima Holdings Limited, Ultima Healthcare Limited, Ultima Care Limited, Eton Hall Homes
Limited and Platinum Healthcare Limited – collectively “the Ultima Group”. No Directors fees are charged by NHP to Ultima
Holdings Limited for D F Francis’ services, who does not receive any remuneration or expenses from Ultima Group.
Of the 44 leases belonging to the Ultima Group at 30 September 2000, 39 leases were subsequently assigned to Southern
Cross Healthcare Limited, 4 leases were assigned to the Highfield Care Group and NHP sold one home, leased by the
Ultima Group, to a third party.
The Company purchased for cash 13,970,000 ‘C’ Ordinary Shares in the Ultima Group which it held at 30 September 2002
and 30 September 2001. The cost of these shares was fully provided for in the accounts to 30 September 2000.
In the accounts to 30 September 2001 NHP made a provision for financial support for the closure costs of the Ultima Group
for £1.2 million charged in exceptional expenditure. £172,593 has been written back in the year to 30 September 2002 and
a provision of £63,261 remains in the balance sheet – see also the solvency guarantee above. 
(ii) On 1 September 2000, D F Francis was appointed as the Company’ s representative on the Board of G.R. Patrick & Co.
Limited (“GRP”). Details of the Group’ s interest in GRP are set out in note 14. Insurances relating to the Group’ s property
portfolio are arranged through GRP amounted to £553,074 (2001: £495,300 ), the premiums being recovered in full from
the Group’ s tenants. The Highfield Care Group homes from the annual renewal dates have been insured through GRP in
2002 and the premium paid in the year to 30 September 2002 was £148,833. During the year ended 30 September 2002,
the Group paid to GRP premiums totalling £279,301 (2001: £52,608) in respect of non-property related insurances.
Included in Group turnover for the same period are commissions recoverable from GRP totalling £58,804 (2001: £69,151)
and director’ s fees of £10,000 (2001: £10,000). At 30 September 2002, the Group owed
a net amount of £7,608 to GRP (2001: £nil).
(iii) The Group leased homes to Highfield Home Properties, a subsidiary undertaking of Highfield Holdings Limited, in return
for pavement rental income of £1,619,936 for the period to 11 December 2001(2001: £5,599,394), the date the company
became 100% subsidiary undertaking of NHP Plc.
34. Post balance sheet events
There are no significant events to report.
Notes to the accounts continued
For the year ended 30 September 2002 NHP Plc  63
Additional information – this page does not form part of the audited financial statements.
Bondholder information
Care Homes
No. 1 Limited
  Sep 01 Oct 01 Nov 01 Dec 01 Jan 02 Feb 02 Mar 02 Apr 02 May 02 Jun 02 Jul 02 Aug 02 Sep 02
 Occupancy % 89.1 89.0 88.3 87.9 88.0 88.9 88.3 87.7 88.2 88.2 87.7 88.2 89.1
 CH1 A Notes Cover 2.87 2.41 2.43 2.43 2.39 2.52 2.63 2.54 2.74 2.80 2.71 2.61 2.69
 CH1 B Notes Cover 1.68 1.41 1.42 1.42 1.40 1.47 1.54 1.49 1.60 1.64 1.59 1.53 1.58
 Rent Cover 1.32 1.11 1.12 1.12 1.10 1.16 1.21 1.17 1.26 1.29 1.25 1.20 1.24
 Profit per bed £000’s 4.57 3.85 3.88 3.88 3.81 4.02 4.19 4.05 4.37 4.47 4.33 4.16 4.30
 Rent per bed £000’s 3.47 3.47 3.47 3.47 3.47 3.47 3.47 3.47 3.47 3.47 3.47 3.47 3.47
75
80
85
90
95
100 Occupancy %
0
1
2
3
4
5
6
Care Homes
No. 2 Limited
  Sep 01 Oct 01 Nov 01 Dec 01 Jan 02 Feb 02 Mar 02 Apr 02 May 02 Jun 02 Jul 02 Aug 02 Sep 02
 Occupancy % 89.2 89.5 89.7 89.7 88.6 88.5 87.5 88.0 88.3 88.6 89.7 90.0 89.3
 CH2 A Notes Cover 3.23 2.99 2.99 2.94 2.82 2.97 2.90 2.94 3.38 3.31 3.45 3.38 3.43
 CH2 M Notes Cover 2.33 2.16 2.16 2.13 2.04 2.14 2.09 2.13 2.44 2.39 2.49 2.44 2.47
 CH2 B Notes Cover 2.06 1.91 1.91 1.87 1.80 1.89 1.84 1.87 2.15 2.11 2.20 2.15 2.18
 Rent Cover 1.34 1.24 1.24 1.22 1.17 1.23 1.20 1.22 1.40 1.37 1.43 1.40 1.42
 Profit per bed £000’s 5.05 4.67 4.67 4.59 4.41 4.63 4.52 4.59 5.27 5.16 5.38 5.27 5.35
 Rent per bed £000’s 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76 3.76
75
80
85
90
95
100 Occupancy %
0
1
2
3
4
5
6
Care Homes
No. 3 Limited
  Sep 01 Oct 01 Nov 01 Dec 01 Jan 02 Feb 02 Mar 02 Apr 02 May 02 Jun 02 Jul 02 Aug 02 Sep 02
 Occupancy % 87.4 87.1 88.1 89.2 89.0 89.2 89.9 89.5 88.9 88.9 89.5 89.1 89.6
 CH3 A Notes Cover 3.59 3.17 3.28 3.25 3.33 3.12 3.43 3.25 3.77 4.18 3.87 3.92 3.59
 CH3 M Notes Cover 2.60 2.30 2.37 2.35 2.41 2.26 2.48 2.35 2.73 3.03 2.80 2.84 2.60
 CH3 B Notes Cover 2.19 1.94 2.01 1.99 2.04 1.91 2.10 1.99 2.31 2.56 2.37 2.40 2.19
 Rent Cover 1.39 1.23 1.27 1.26 1.29 1.21 1.33 1.26 1.46 1.62 1.50 1.52 1.39
 Profit per Bed £000’s 5.32 4.71 4.86 4.82 4.94 4.63 5.09 4.82 5.59 6.20 5.74 5.82 5.32
 Rent per bed £000’s 3.83 3.83 3.83 3.83 3.83 3.83 3.83 3.83 3.83 3.83 3.83 3.83 3.83
75
80
85
90
95
100 Occupancy %
0
1
2
3
4
5
6
7 64 NHP Plc  
Portfolio analysis
As at 30 September 2002
Minimum Minimum 
Homes Beds Beds Cost annual rent annual rent
No. No. % £000 £000 %
England 288 13,541 73.6% 492,190 50,506 74.5%
Scotland 43 2,607 14.2% 104,300 10,272 15.1%
Wales 28 1,491 8.1% 43,788 4,589 6.8%
N Ireland 14 756 4.1% 23,500 2,461 3.6%
T otal 373 18,395 100.0% 663,778 67,828 100.0%
Investment properties
Operated by third party tenants
Ashbourne plc 22 1,352 7.3% 46,798 4,884 7.2%
Avonpark Care Centre Limited 3 203 1.1% 9,241 965 1.4%
Britannia Healthcare Limited 7 428 2.3% 13,857 1,440 2.1%
Care Management Group Limited 32 256 1.4% 18,718 1,943 2.9%
Craegmoor Healthcare Co. Limited 4 270 1.5% 10,518 1,139 1.7%
Eastwood Care Homes plc 9 229 1.2% 18,719 1,946 2.9%
Healthcare Investments (No. 2) Limited 4 328 1.8% 11,830 1,237 1.8%
Hillcroft Nursing Homes Limited 1 66 0.4% 2,028 212 0.3%
Idun Healthcare Limited 18 1,014 5.5% 32,168 3,393 5.0%
Puretruce Limited 14 698 3.8% 19,940 2,079 3.1%
Southern Cross Healthcare Limited 96 5,713 31.1% 208,857 21,384 31.5%
T otal 210 10,557 57.4% 392,674 40,622 59.9%
Managed by Highfield Care for
third party tenants
Gallant (UK) Limited 1 35 0.2% 987 102 0.1%
In receivership:
Harmony Care Homes Limited 7 311 1.7% 9,446 987 1.5%
Landmark Care Centres Limited 1 50 0.3% 1,433 148 0.2%
Loughbray Healthcare Limited 1 53 0.3% 1,692 178 0.3%
Six subsidiaries of Union Healthcare Group Limited 41 1,966 10.6% 67,475 7,028 10.4%
T otal 51 2,415 13.1% 81,033 8,443 12.5%
T otal investment properties 261 12,972 70.5% 473,707 49,065 72.4%
Operated properties
Highfield Care 105 5,149 28.0% 182,523 17,986 26.5%
Closed homes 3 103 0.6% 3,381 355 0.5%
T otal operated properties 108 5,252 28.6% 185,904 18,341 27.0%
T otal investment and operated properties 369 18,224 99.1% 659,611 67,406 99.4%
Properties held for resale
Highfield Care 2 89 0.5% 2,022 200 0.3%
Closed homes 2 82 0.4% 2,145 222 0.3%
T otal properties held for resale 4 171 0.9% 4,167 422 0.6%
T otal property portfolio 373 18,395 100.0% 663,778 67,828 100.0%
Additional information – this page does not form part of the audited financial statements. NHP Plc  65
Properties managed by
Highfield Care
As at 30 September 2002
Minimum Minimum 
Homes Beds Beds Cost annual rent annual rent
No. No. % £000 £000 %
NHP homes managed by Highfield Care
Managed for third party tenants 51 2,415 13.1% 81,033 8,443 12.5%
NHP owned and operated 105 5,149 28.0% 182,523 17,986 26.5%
Properties held for resale 2 89 0.5% 2,022 200 0.3%
At 30 September 2002 158 7,653 41.6% 265,578 26,629 39.3%
Third party landlords homes
managed by Highfield Care
Leased homes 7 398 1,369 
Homes under management contract 16 768 –
T otal homes managed by Highfield Care 181 8,819 27,998
Notes
% expressed as % NHP’ s total property portfolio above.
The NHP beds managed by Highfield Care are 97 less than purchased, and previously reported, due to the application of changing care standards.
Since 30 September 2002:
– A receiver was appointed to Healthcare Investments (No.2) Limited on 21 November 2002. Highfield Care have been contracted to manage the four homes.
– T wo homes for resale have been sold (one of these was managed by Highfield Care).
– Three receivership homes have been assigned to Highfield Care.
Occupancy %
20
40
60
80
100
Sep 01 Dec 01 Mar 02 Jun 02 Sep 02
 88.1 88.8 88.7 88.5 89.1
 75.1 76.3 77.4 79.5 82.3
 85.7 86.6 86.6 86.9 87.9
 1.31 1.22 1.22 1.36 1.40
 0.91 0.83 0.86 1.05 1.12
 1.24 1.16 1.16 1.30 1.35
 4.88 4.54 4.55 5.06 5.22
 3.17 2.90 3.00 3.64 3.88
 4.57 4.25 4.27 4.80 4.98
Securitised Unsecuritised Group
Note All values are 3 month averages to the end of each quarter.
Pre-rent profit per bed £’000
1
2
3
4
5
6
Sep 01 Dec 01 Mar 02 Jun 02 Sep 02
Rent cover
0.3
0.6
0.9
1.2
1.5
Sep 01 Dec 01 Mar 02 Jun 02 Sep 02
Performance of homes owned by NHP at 30 September 2002
and managed by third party tenants and Highfield Care
Additional information – this page does not form part of the audited financial statements. 66 NHP Plc  
Analysis of Ordinary Shareholdings at 29 November 2002
Directors
and Institutional
Investor type Private spouses* and other T otals
Number of holders 551 10 296 857
Percentage of holders 64.29% 1.17% 34.54% 100.00%
Shares held 7,965,625 965,433 191,920,837 200,851,895
Percentage of shares held 3.97% 0.48% 95.55% 100.00%
* including The NHP Executive Pension Scheme and Directors’ multiple holdings.
1 1,001 50,001 250,001
to to to to
Shareholdings 1,000 50,000 250,000 500,000 500,000+
Number of holders 161 533 66 33 64
Percentage of holders 18.79% 62.19% 7.70% 3.85% 7.47%
Shares held 95,475 4,734,546 6,954,088 12,262,541 176,805,245
Percentage of shares held 0.05% 2.36% 3.46% 6.10% 88.03%
Financial calendar
30 January 2003 10th Annual General Meeting
June 2003 Interim results announced
December 2003 Preliminary announcement of 2003 results
For further shareholders help or information please contact either the Registrars
of the Company or NHP at the addresses below
Northern Registrars Limited
PO Box 30
3rd Floor
Cresta House
Alma Street
Luton
Bedfordshire
LU1 2PU
T elephone: 01582 405333
NHP Plc
Block A
Upper Ground Floor
Dukes Court
Duke Street
Woking
GU21 5BH
T elephone: 01483 754760
Email: info@nhprops.co.uk
Additional information – this page does not form part of the audited financial statements.
Shareholder information NHP Plc  67
NOTICE IS HEREBY GIVEN that the 10th Annual General Meeting of NHP Plc will be held at the offices of Collins Stewart
Limited, 9th Floor, 88 Wood Street, London EC2V 7QR, at 9.30 a.m. on 30 January 2003 for the following purposes:
Ordinary business
1. T o receive the Report of the Board of Directors and the Accounts for the year ended 30 September 2002.
2. T o re-elect W Colvin as Director.
3. T o re-elect R N Midmer as Director.
4. T o re-elect C H W Robson as Director.
The biographies of the above Directors are shown in the Directors and advisers section on pages 16 and 17.
5. T o re-appoint Deloitte & T ouche as Auditors and to authorise the Directors to fix their remuneration.
6. T o approve the Report of the Remuneration Committee 
By Order of the Board
Sheila Kaul
Company Secretary
16 December 2002 
Registered office:
Block A
Upper Ground Floor
Dukes Court
Duke Street
Woking 
GU21 5BH
Notes: 
1. A member entitled to vote at the Meeting is entitled to appoint one or more proxies to attend and, on a poll, vote on his
or her behalf. A proxy need not be a member of the Company. A form of proxy is enclosed with this Notice for use at
the Meeting. 
2. T o be valid, the form of proxy (together with the power of attorney , if any , under which it is signed or notarially certified copy
of such power of attorney or other authority) must be deposited at or posted to the office of the Registrars of the Company ,
Northern Registrars Limited, to be received not less than 48 hours before the time fixed for the meeting. Completion and
return of the form of proxy will not preclude Shareholders from attending or voting at the meeting in person.
3. Copies of the service agreements of Directors and the register of Directors’ interests kept in accordance with section
325 of the Companies Act are available for inspection at the registered office of the Company on weekdays during
normal business hours and will be available for inspection at the meeting. 
4. Only persons entered on the register of members of the Company are entitled to attend or vote at the meeting. 
Notice of Annual General Meeting 68 NHP Plc  
Consolidated profit and loss account 2002 2001 2000 1999 1998
For the years ended 30 September £’000 £’000 £’000 £’000 £’000
Turnover 125,964 76,626 70,896 48,963 25,346
Cost of sales (47,836) (3,806) – – –
Gross profit 78,128 72,820 70,896 48,963 25,346
Provision for doubtful debts and related costs (4,838) (10,259) (9,067) (547) –
Other administrative expenses (19,750) (7,349) (7,235) (4,619) (3,090)
Exceptional income/(costs) 248 (4,651) (28,875) (501) –
Administrative expenses (24,340) (22,259) (45,177) (5,667) (3,090)
Group operating profit 53,788 50,561 25,719 43,296 22,256
Share of associated undertakings’ operating profits/(losses) 283 (210) (5) 1 –
T otal operating profit 54,071 50,351 25,714 43,297 22,256
Profit/(loss) on disposal of investment properties and
other tangible fixed assets 371 (121) 45 – 65
Net interest payable and similar charges (38,072) (40,205) (39,505) (25,303) (14,552)
Profit/(loss) on ordinary activities before taxation 16,370 10,025 (13,746) 17,994 7,769
T ax credit/(charge) on profit/(loss) on ordinary activities 509 2,407 (1,886) (954) (1,016)
Profit/(loss) on ordinary activities after taxation 16,879 12,432 (15,632) 17,040 6,753
Equity minority interest – – – 311 (162)
Profit/(loss) for the year 16,879 12,432 (15,632) 17,351 6,591
Dividends paid and proposed – (1) (5) (16,022) (6,627)
Retained profit/(loss) transferred to/(from) reserves 16,879 12,431 (15,637) 1,329 (36)
Consolidated balance sheet 2002 2001 2000 1999 1998
(as at 30 September) £’000 £’000 £’000 £’000 £’000
Investment properties at valuation 483,330 535,430 586,400 720,590 401,380
Operated properties at valuation 159,920 52,248
§
– – –
Other net assets 148,215 137,538
§
158,376 82,950 29,562
Non-recourse borrowings – net Secured Notes (531,366) (530,094) (529,797) (353,839) (96,568)
Other borrowings – net bank loans (52,362) (92,730) (139,037) (194,244) (114,237)
Equity minority interest – – – – (5,112)
T otal Shareholders’ funds 207,737 102,392 75,942 255,457 215,025
Statistics
Basic earnings/(loss) per Ordinary Share 10.1p 8.1p
†
(10.6p)
†
11.8p
†
8.6p
†
Operating cash flow after interest £14.78m £7.27m £14.84m £16.69m £7.55m
Dividends per share 0.0p 0.0p 0.0p 11.6p 8.4p
Net assets per share 103.4p 65.5p
†
51.4p
†
172.9p
†
151.0p
†
Gearing – consolidated 222% 499% 675% 183% 88%
Gearing – excluding non-recourse borrowings 30% 135% 429% 78% 59%
Beds 18,395 18,721 19,002 17,955 10,292
Number of homes* 373 377 379 347 191
Investment and operated properties at cost £659.6m £662.1m £669.2m £630.0m £349.8m
* Including four homes held for resale at 30 September 2002 (2001: 4) (2000:1) (1999: 4) (1998: 6).
† Restated to reflect the effects of the Rights Issue in July 2002.
§ Previously combined.
Five year financial summary Designed and produced by fourthquarter Printed in England by SV .two Photography by Steve Bicknell and Winslow-Llewellyn Limited NHP Plc
Block A
Upper Ground Floor
Dukes Court
Duke Street
Woking 
GU21 5BH
T el: 01 483 754760
Email: info@nhprops.co.uk
www.nhprops.co.uk