Telford Homes Plc
07
Annual report and accounts
Telford Homes Plc               Annual report and accounts 2007
R&A Telford 07  4/6/07  16:26  Page 1 Financial highlights 2007
2007
£104.4 million
22.4%
16.0%
£13.5 million
8.9p
30.3p
31.2%
102%
18%
2,221 properties
£100 million
£79.3 million
23.0%
16.2%
£10.0 million
7.0p
23.8p
35.5%
193%
60%
1,659 properties
£71 million
2006
Turnover
Gross profit margin
Operating margin
Profit before tax
Dividend per share
Earnings per share
Pre-tax return on
average equity
Gearing
Uncovered gearing
Development pipeline
Gross profit expected
in pipeline
R&A Telford 07  4/6/07  16:26  Page 2 Contents Page
Financial highlights 01
Chairman’s statement 05
Chief Executive’s review 07
Financial review 13
Area of operation 19
Telford Homes Alto 21
Telford Homes Metro 23
Health and Safety 27
Environment and Sustainability 29
Customer Service 31
Directors and Advisors 35
Policy on corporate governance 37
Directors’ remuneration report 39
Report of the directors 41
Statement of directors’ responsibilities 43
Auditors’ report 44
Profit and loss account 47
Balance sheet 48
Cash flow statement 49
Statement of accounting policies 50
Notes to the financial statements 52
Development guide 66
Business and financial review Operating review Corporate responsibility Corporate governance Financial statements
“Telford Homes, by the development
of magnificent new buildings and
community spaces, is part of an
extraordinary transformation
taking place in East London.”
Andrew Wiseman, Chief Executive
R&A Telford 07  4/6/07  16:26  Page 3 KNOWLEDGE
“Our knowledge and expertise enable
us to consistently meet our targets”
R&A Telford 07  4/6/07  16:26  Page 4 Business and financial review
R&A Telford 07  4/6/07  16:26  Page 5 Chairman’s statement
“Telford Homes has taken a
substantial step forward during
the last 12 months. Another year
of strong financial performance
has been complemented by the
share placing raising net funds
of £14.4 million during 2006.
This additional equity gives us
the opportunity to accelerate
our growth in East London, a
region with an exciting future.”
David Holland 
Chairman (Non-Executive)
Sales performance in the year has
been strong and although we are
mindful of rising interest rates this has
not had an effect on the confidence
of our customers. Demand is in excess
of supply in East London and this,
together with the quality of our
product, has been a factor in the
success of our recent sales launches.
Our development pipeline is very
healthy at over 2,200 homes. This does
not include over 1,000 homes not yet
under contract that we expect to
deliver through our development
partnership with Eastend Homes. Last
year I reported that we had been
chosen as their partner on the British
Estate in Mile End and, following a
thorough planning process which has
helped set the precedent for future
estate regeneration in East London,
development is now underway. We have
been appointed as their partner on a
further five estates which we expect to
develop over the next five years.
The share placing in October last year
was extremely successful with demand
for our shares being far greater than
we expected. This is a sign of the
confidence that the directors have in
the future of Telford Homes and the
positive messages we were able to
relay when presenting to institutions.
I am delighted that a number of new
shareholders have been added to our
register during the year and I hope that
they are looking forward to the next
few years as much as I am.
David Holland 
Chairman (Non-Executive)
21st May 2007
Equity raised
£14.4million
5 Annual report and accounts 07
R&A Telford 07  4/6/07  16:26  Page 6 Equinox, Island Gardens, E14
Queen Mary’s Villas, South Woodford
Business and financial review
Annual report and accounts 07 6
R&A Telford 07  4/6/07  16:27  Page 7 “Once again I can report on a
year in which we have exceeded
our initial expectations. Turnover
has grown by 32% to £104.4 million
and profit before tax is up 35%
to £13.5 million.
Earnings per share have increased
by 27% to 30.3p despite the dilutive
effect of the share placing and the
directors are proposing a final
dividend of 4.9p, making a total
of 8.9p for the year.”
Property sales and
affordable housing
Contracts were exchanged on 478
private homes, 84 affordable homes
and two commercial units making a
total of 564 properties in the year.
Included within this figure are 16 homes
being constructed under joint ventures
where we recognise half of the turnover
and profit from the development.
The number of private homes sold has
increased by 45% this year with the
average selling price of those homes
also increasing to £258,000 from
£245,000. Prices have continued to
move ahead in East London and, where
the market allows, we have maintained
our policy of selling properties at an
early stage in the development
process. This secures future cash flows
and enables us to invest further in our
development pipeline. We have been
able to secure increased bank finance
as a direct result of the volume of early
sales on some sites which offsets the
risk of increased gearing.
Earlier this year we sold all 179 private
homes at OneStratford our
development in High Street, Stratford
before construction had commenced.
More recently we have sold all of the
53 private homes at Metro East, E3
and the 144 private homes at SoBow,
E3 and work is only just underway at
both sites. Both of these developments
went on sale in 2007 and the success
we have achieved is an indication of
the continuing strength of the market,
particularly in East London. Of the 197
private homes across these two sites
81 contracts were exchanged in the
year to March with the remainder being
exchanged in the new financial year
and all have been sold to investors.
Andrew Wiseman
Chief Executive
Chief Executive’s review
Turnover
£104.4million
7 Annual report and accounts 07
R&A Telford 07  4/6/07  16:27  Page 8 Business and financial review
Icona, Stratford under construction
Annual report and accounts 07 8
R&A Telford 07  4/6/07  16:27  Page 9 Queen Mary’s Gate, South Woodford is
a different marketing proposition with
sales to date being largely to the
owner-occupier market. Despite this
the rate of sales has been impressive
with handovers not due to commence
until November this year. To date we
have sold 123 of the 184 private homes
in the first construction phase.
The number of affordable properties
sold this year is lower than last year due
solely to the timing of some significant
contracts. In March 2006 we
exchanged contracts to deliver all of
the affordable homes at OneStratford
and Queen Mary’s Gate with those 232
exchanges being recognised last year
but the majority of the profits flowing
into 2007 and beyond. Partnerships
with affordable housing providers
remain integral to our business and
typically 35% of any development is
sold for affordable housing.
Our accounting policy is to recognise
turnover and profit from the point of
exchange of contracts on a
percentage complete basis. This
means that in addition to profit
recognised from contracts exchanged
in the year we also have profit
continuing to be realised from ongoing
construction at developments where
the exchanges have been reported in
previous years. Our results this year
include profits from, amongst others,
Tequila Wharf, E14 where sales
commenced in 2004 and the
development was completed at the
end of 2006 and Icona, Stratford
where sales commenced in 2005 and
development will continue into 2008. 
Operating performance
The operational heart of our business
has once again delivered outstanding
quality of final product, on programme
and within budget. Both Telford Homes
Metro and Telford Homes Alto
continue to experience substantial
change in the scope of their
operations and new staff have been
recruited to ensure we have the
capacity to cope with expansion. In
recognition of our operational
performance we have won a number of
awards in the year for design,
construction and marketing.
During the year ended 31st March
2007 we handed over a total of 477
properties to our customers, achieving
excellent standards in Customer
Service. We are rated highly amongst
our peers in independent surveys and
our attention to detail in the handover
process, together with our approach in
dealing directly with tenants where
properties have been rented out, is a
significant factor in our level of sales to
previous customers.
Health and Safety is always at the
forefront of our business and this year
we have recruited a Group Health and
Safety Manager who is assisting David
Durant, our Group Managing Director,
and the divisional Managing Directors
in developing and monitoring our
policies and procedures.
Chief Executive’s review
Properties handed over
477
Contracts exchanged
564
Increase in profit before tax
35%
9 Annual report and accounts 07
CGI of Kira Building at Merchants’ Quarter, British Estate
R&A Telford 07  4/6/07  16:27  Page 10 Business and financial review
Site acquisitions
This year we have substantially
increased our development pipeline
purchasing, or agreeing to purchase, a
number of new development sites. This
has been accelerated by the £14.4
million net funds raised in a placing at
the end of 2006.  Mike North has joined
our land team alongside Jim Furlong
and Nick Drew our Partnerships Director
and Mike has already been responsible
for some significant site acquisitions.
Some of the land acquired benefited
from detailed planning permission such
that development could commence
almost immediately. SoBow, E3 was
purchased from one of our affordable
housing partners with the benefit of a
resolution to grant planning permission
for 201 homes. Development is now
underway and will be completed in
2009. We have recently purchased a
site at Leyton Orient Football Club
where redevelopment adjacent to the
North and South stands incorporates
a planning permission for 62 homes.
A number of land acquisitions were
subject to receipt of satisfactory
planning permission. These include land
within the British Estate, E3 which
received a resolution to grant planning
permission to provide 161 new private
homes in January 2007. Since the share
placing we have also contracted to
purchase a major site in Greenwich in a
joint venture with The Royal Bank of
Scotland. The contract is subject to
receipt of planning permission for 372
homes which is expected in the next few
months. This will be our second joint
venture with The Royal Bank of
Scotland and our success together at
Icona, Stratford has led us to continue
our partnership on this exciting scheme. 
We have also added to our medium to
longer term development pipeline with
the acquisition of sites that we will
progress through the planning process.
The former Lesney Toys factory in
Homerton Road, Hackney is expected to
achieve planning permission for over
200 homes and commercial space,
including affordable art studios. In
addition the Hannaford and Marshall site
in Bethnal Green Road near Liverpool
Street station has been acquired in a
joint venture with Genesis Housing
Group and is expected to achieve
planning permission for more than 300
homes and commercial space.
(Left to right) Neil Brooks Partnerships Manager, Mike North Senior Land Buyer, Nick Drew Partnerships Director
Annual report and accounts 07 10
R&A Telford 07  4/6/07  16:27  Page 11 Chief Executive’s review
11 Annual report and accounts 07
CGI of Queen Mary’s Gate
Queen Mary’s Gate Sales Centre, South Woodford
R&A Telford 07  4/6/07  16:27  Page 12 Business and financial review
Planning
The planning process is more
complicated than ever before with an
increasing number of external
consultants’ reports being required
for each application. A key
competitive advantage comes from
knowing your way through the
process and our knowledge of the
local planning environment in East
London puts us in a strong position,
while not removing all of the hurdles
that can be placed in our path. 
Development pipeline
Our development pipeline, being
properties that will produce profit in
future years not including those built for
joint venture partners, consists of 1,279
properties with planning permission and
942 subject to the planning process.
This is a total of 2,221 properties which
are expected to provide turnover in
excess of £500 million and gross profit
of over £100 million, more than four
years supply at current levels of profit.
Of this forecast gross profit in the
pipeline over £24 million has been
secured by contracts already exchanged
and this will be recognised as
construction proceeds on developments
over the next two to three years. Gross
profit in the year ended 31st March 2007
was £23.4 million.
Our partnership with Eastend Homes
has added the homes on the British
Estate to our pipeline. During the year
we have been chosen as the
development partner to Eastend
Homes on a number of other well
located estates in Tower Hamlets. We
have secured this partnership due to
the quality of the Telford Homes brand
which incorporates a straight-forward
and honest approach. We are now
progressing master plans for the
regeneration of these estates and we
expect to achieve planning permissions
and then commence construction on
all of them over the next two years. The
British Estate has set the model for this
partnership with land payments made
by Telford Homes being reinvested into
the third party refurbishment of existing
homes on the estate.
People
Several senior members of staff have
been recruited as we continue to plan
for the future and ensure that our
internal infrastructure is always one
step ahead of our growth plans.
We finished the year with over 120
employees and our strength in every
area is evident from our performance
over the last 12 months. I would like to
thank each and every one of our
employees for their efforts this year.
Strategy
Each year the directors review the
strategy of Telford Homes to ensure
that we are creating maximum value for
shareholders and taking advantage of
all the opportunities that come our way
while minimising risks in the business.
There are so many opportunities in
East London, and our knowledge of this
market place is so strong, that we will
largely remain focused on this region.
We expect to continue to pre-sell a
proportion of our developments,
depending on their location, in order to
secure future cash flows and minimise
the funding risks. 
In doing this we will maintain organic
growth at a controlled rate in order to
capitalise on the imbalance between
supply and demand for properties in
our area of operation. This was part of
the reasoning for the share placing last
year and will be our main driver in the
future while the market remains stable.
Interest rates will be a key factor in the
stability or otherwise of the market and
the mechanics of supply and demand
will also play a significant role in the
coming years.
Current trading and outlook
Our recent sales launches are an
indication that the market in East
London remains strong despite rising
interest rates. We were extremely
pleased with the results of these sales
events and the upcoming launch of
Merchants’ Quarter, the marketing
name for the British Estate, has
received a high level of interest.
To date, due to contracts exchanged
since 31st March 2007 and properties
sold, subject to contract, we have a
total of 185 private homes and 25
affordable homes contributing to our
results for 2008. The demand for
homes in East London, the strength of
our development pipeline and our
ongoing partnerships with affordable
housing providers lead me to expect
2008 to be another year of record
results and another step forward in the
development of Telford Homes.
Andrew Wiseman
Chief Executive
21st May 2007
Properties in the development pipeline
2,221
Annual report and accounts 07 12
Turnover in the development pipeline
£500million
R&A Telford 07  4/6/07  16:27  Page 13 Financial review
“Another year of record turnover
and profits has been underpinned
by increasing the capital available
to the Company through a share
placing and managing those funds
to maximise return on equity while
adding a balanced portfolio of
sites to our development pipeline.”
Jonathan Di-Stefano 
Financial Director
Operating results
Turnover increased to £104.4 million
from £79.3 million last year. An analysis
of properties sold in the year is given in
the Chief Executive’s review.
Gross profit has increased to £23.4
million with the margin falling to 22.4%
from 23.0% last year. Each new site is
appraised to achieve a gross margin
of at least 20% unless high returns on
equity can be secured in exchange for
lower margins. Queen Mary’s Gate in
South Woodford was purchased for
consideration of 35% of all private
sales proceeds achieved from the
development. The total expected
payments are now in excess of £35
million with only £10 million paid to
date, resulting in a high rate of return
on equity. The profit margin on our
share of sales proceeds is in excess of
20% as this represents our risk in the
development. However the reported
margin is 13% when taking the proceeds
being paid directly to the vendor into
account, still in line with our original
expectations for the site. The gross
margin in 2007 excluding Queen Mary’s
Gate is 23.5% and this development will
continue to depress the reported
margin over the next few years.
Our forecasting and control of
development costs has been excellent
over the last 12 months with fewer
movements being reported in monthly
cost control meetings. Build costs in
the year were £50 million and the
operational teams are clearly well set
to manage this level of expenditure. 
The operating margin has fallen to
16.0% from 16.2% with overheads
reducing as a percentage of turnover
to 6.4% from 6.8% last year.
Overheads have remained under
careful control while also allowing us
to put the appropriate infrastructure
in place prior to each growth phase
and ensuring our employees are
rewarded for their contribution to the
success of the Company.  
Interest
Interest paid in the year was £4.0
million up from £3.1 million last year.
This was mainly due to the increase in
activity during the year along with
rising interest rates.
Interest received in the year was £0.8
million up from £0.2 million last year as a
result of higher cash balances during the
year, particularly after the share placing.
Gross margin
22.4%
13 Annual report and accounts 07
R&A Telford 07  4/6/07  16:27  Page 14 Business and financial review
Annual report and accounts 07 14
Carr Street, E14
R&A Telford 07  4/6/07  16:27  Page 15 Estilo, N1
Financial review
15 Annual report and accounts 07
The continuing increases in the base
rate are a cause for concern for the
business as a whole although any
negative effects are yet to materialise.
In terms of finance costs we monitor
this carefully and forecast future rate
rises on a prudent basis. Interest cover
was 5.2 times in 2007 which remains
well within acceptable limits.
Profit before tax has increased to £13.5
million from £10.0 million last year. 
Taxation
The effective tax charge for the year is
26.3% down from 29.7% last year. This
change is due to a prior year over
provision of £178,000 and a significant
tax deduction this year in relation to
the exercise of share options which
reduces the tax charge by £309,000. 
Dividends
A final dividend of 4.9p per ordinary
share has been proposed. Together with
the interim dividend of 4.0p paid in
January 2007 this makes a total
dividend for the year of 8.9p which is
covered 3.4 times by earnings per share.
The total dividend last year was 7.0p.
The final dividend is expected to be
paid on 13th July 2007 to shareholders
on the register on 22nd June 2007.
Earnings per share
Earnings per share increased to 30.3p
from 23.8p and the weighted average
number of shares in issue was 32.8
million. The 5.8 million shares issued as
a result of the share placing diluted
earnings for five months. The funds
raised will make a more significant
contribution to profits in 2008 and to
a greater extent in 2009 and 2010.
Balance sheet
Net assets have increased to £54.5
million from £32.2 million with part of the
change due to the £14.4 million raised in
the share placing last year. The number
of shares in issue is now almost 37
million. Net assets per share at 31st
March were 148p up from 108p last year. 
The placing funds have all been
allocated to new land opportunities
within six months of the money being
received and while cash held at the
end of March was £17.6 million, the
majority of this balance will be utilised
by future construction and the
purchase of new development sites
that are already under contract. Some
of the sites purchased will take a few
years to flow completely into turnover
and profit as a number are subject to
planning or have been acquired
without planning permission.
Pre-tax return on equity in the year
ended 31st March 2007 was still
healthy at 31.2%, falling from 35.5%
last year due primarily to the effect of
the additional equity raised in the year.
Finance
Our current bank facilities are a
revolving loan facility with Allied Irish
Bank of £50 million and site specific
funding from The Royal Bank of
Profit before tax
£13.5million
Total dividend per share
8.9p
Earnings per share
30.3p
R&A Telford 07  4/6/07  16:27  Page 16 90 degrees, E1 Tequila Wharf, E14
Business and financial review
Scotland amounting to £128 million.
Total facilities are therefore £178
million with actual drawn loans at 31st
March 2007 being £73.2 million.
In April 2007 we agreed an outline
facility with Barclays Bank on one new
development and we expect to
gradually introduce Barclays to the
business to give us another route to
funds and to assist us in securing
competitive debt finance. Gearing at
31st March 2007 was 102% reduced
from 193% last year. This reduction is a
direct result of the cash balances held at
the end of the year. We are comfortable
with higher levels of gearing as we
continue to monitor the certainty of
future cash inflows against exposure to
debt. Our business model of selling
properties at an early stage of
construction reduces the risk of carrying
debt as the sales revenue on a given
development, secured by exchanging
contracts, will be used to repay loans
specific to that development.
Internally we calculate ‘uncovered
gearing’ which excludes debt matched
by the value of contracts exchanged on
a given development. This is becoming
an increasingly important performance
indicator in the business, particularly in
reporting to banks. The board has
determined that levels of uncovered
gearing are acceptable up to 100%.
Uncovered gearing at 31st March 2007
was 18% reduced from 60% last year.
Cash flow
We maintain a detailed cash flow
forecast as part of our management
information systems. This extends for a
number of years into the future and is
subject to continual re-assessment.
The cash flow position is reported to
the board and our banking partners on
a monthly basis.
Share price
The share price on 31st March 2007
was 421.5p (31st March 2006 –
187.5p), with a high in the year of
422.5p and a low of 187.5p.
International Financial
Reporting Standards
Telford Homes will adopt International
Financial Reporting Standards (IFRS) for
the year ended 31st March 2008. We
have already explored all current
international standards that may have
an impact on the accounting policies
employed by the Company. There are no
material issues expected to arise from
the standards already in place other than
presentational changes. International
standards are evolving over time and
new standards will be appraised as and
when they are issued. We have already
started the process of converting the
2007 results into the international
format, including all of the disclosure
changes that will be required. These can
then be used as comparatives for the
first full year of adoption in 2008.
Jonathan Di-Stefano 
Financial Director
21st May 2007
Uncovered gearing
18%
Annual report and accounts 07 16
R&A Telford 07  4/6/07  16:27  Page 17 CONSTRUCTION
“Our strengths and skills allow
us to reach higher levels”
R&A Telford 07  4/6/07  16:27  Page 18 Operating review
R&A Telford 07  4/6/07  16:27  Page 19 Lesney Toys SoBow
Area of operation
Telford Homes is all about East London.
The business has been built up in this
area over the last six years and ongoing
regeneration means there are many
more development opportunities to
come in the future.
Local knowledge has played a key role
in helping the Company to grow and
it remains a competitive advantage
particularly in relationships with councils
and affordable housing organisations
and in our understanding of the local
planning process.
The 2012 Olympics being awarded to
London has been a major boost to
East London with the Olympic Park
being constructed in Stratford and
with many other events due to take
place in the local London boroughs.
This has accelerated the programme
of regeneration that was already
taking place and has had a beneficial
impact on the property market.
East London, together with the rest of
the Thames Gateway, has become a
major growth region in the country and
this will be the case for many years to
come. While the opportunities to utilise
our competitive advantage remain we
will continue to play a significant role in
the regeneration of the area.
19 Annual report and accounts 07
R&A Telford 07  4/6/07  16:27  Page 20 Merchants’ Quarter, British Estate 2012 Olympic Park
(Note - development positions and Olympic
Park boundary are approximate locations)
Annual report and accounts 07 20
Operating review
Decorum
Stadia, Leyton Orient FC
Icona
OneStratford
R&A Telford 07  4/6/07  16:28  Page 21 Telford Homes Alto
“Our strength is our
employees and we now
have a nucleus of key staff
that are passionate about
the business and will assist
in our plans for growth
over the next few years.”
John Fitzgerald 
Managing Director
Over the last 12 months Telford Homes
Alto has kept up with the pace of
change within Telford Homes,
researching and using modern methods
of construction for improved quality,
speed and efficiency. Several major
developments were completed during
the year including Equinox at Island
Gardens, Tequila Wharf, E14 and Estilo,
N1. Quality of construction has been
excellent and this has been evidenced
by customer feedback during a very
busy period of property handovers. 
Queen Mary’s Gate in South Woodford
is the biggest development that Telford
Homes has ever undertaken and both
design and construction are proceeding
well and to programme. This site has
been well set up to deal with the volume
of employees and subcontractors that
are required over the next few years. The
tower at Icona in Stratford is now
prominent on the East London skyline
and OneStratford is rapidly rising from
the ground a short distance away.
A number of planning permissions are
being sought requiring careful
management to make the process as
smooth as possible. Our partnership
with Genesis Housing Group will result
in a landmark development in Bethnal
Green Road close to Liverpool Street
station and we are delighted to be
working with them on the scheme.
James Gaffney, Construction Director
and Chris Dreher, Commercial Director
have both been instrumental in the
operational performance of the division
and also in the recruitment of new staff
to add expertise within each department.
A trainee programme has been set up
with a regular cycle of trainees being
recruited each year. This will contribute
to the long term future of the Company
as well as the construction industry as a
whole. The Alto team is now well placed
to deal with an increasing workload and
will be able to take on significant new
schemes in the coming months.
Units in production today
1,048
21 Annual report and accounts 07
“Exciting times are ahead of us. We
have built a team to deal with the
future and I know we are capable of
achieving at the highest level.”
John Fitzgerald
R&A Telford 07  4/6/07  16:28  Page 22 Queen Mary’s Gate under construction
Operating review
Annual report and accounts 07 22
(Left to right) James Gaffney Construction Director, John Fitzgerald Managing Director, Chris Dreher Commercial Director
(Outside Elmhurst, the listed building at the entrance to Queen Mary’s Gate)
R&A Telford 07  4/6/07  16:28  Page 23 23 Annual report and accounts 07
Telford Homes Metro
“Metro Division has seen turnover
and profit grow in line with the
number of sites and units under
construction. Average site size
has increased to 46 units from
24 last year and is expected to
grow further by 2008.”
Mark Parker 
Managing Director
Telford Homes Metro has grown
substantially since the Company formed
two operational divisions in 2004. During
the year to March 2007 the division
completed and handed over eight new
developments and has many more in the
pipeline. A significant part of this pipeline
will come through the partnership with
Eastend Homes which the Metro team
have had a key role in. Alongside Eastend
Homes the division has worked with a
number of housing associations in the
year including Asra, Circle Anglia, Old
Ford, Bethnal Green and Victoria Park,
East Thames, Poplar HARCA and
Metropolitan. Furthering these
partnerships is critical in the future of
Telford Homes and excellent
relationships have been forged which will
benefit all parties over the next few years. 
During the year Paul Copsey has been
recruited as the Commercial Director
of Telford Homes Metro which
completes the management team.
Control and management of build
costs has been very good this year and
this appointment will add further
strength to the commercial team as
the business grows.
Construction standards have been
maintained at the high level expected in
Telford Homes. This is the heart of our
business and the quality of our finished
product has assisted our high standards
of customer service. Paul O’Connell was
awarded the silver medal in the ‘Building
Manager of the Year’ awards for our
Cubix development at Brock Place, E3.
Innovative design solutions have been
required to ensure we can maximise
the use of each site and promote
environmentally friendly construction
wherever possible. This has included a
‘brown roof’ at Sienna in Barking and
the use of ground source heat pumps.
Increase in average units per site next year
46%
“We our proud of our achievements to
date and every member of the Metro
team has contributed to the quality of
our finished product. I am looking
forward to new challenges in the year
ahead as we continue to grow.”
Mark Parker 
R&A Telford 07  4/6/07  16:28  Page 24 Operating review
Annual report and accounts 07 24
(Left to right) Jeremy Brett Construction Director, Mark Duffield Technical Director, Paul Copsey Commercial Director, Mark Parker Managing Director
(Outside Carr Street)
Cosmopolitan, Enfield under construction
R&A Telford 07  4/6/07  16:28  Page 25 REGENERATION
“Regenerating communities
for a brighter future”
R&A Telford 07  4/6/07  16:28  Page 26 Corporate responsibility 
R&A Telford 07  4/6/07  16:28  Page 27 Health and Safety
The Company regards the promotion of health and safety as a critical objective of all employees at every level. Every employee is
issued with health and safety instructions that endeavour to identify all the risks and dangers that are likely to be encountered in the
course of their work and set out precautionary measures. We continue to invest in the training and development of our people to
not only meet but exceed industry requirements.
As the Company grows, recruitment of key staff will be crucial in sustaining and improving health and safety standards. A significant
part of this was the recruitment during the year of Steve Nicoll as Group Health and Safety Manager. This appointment will help to
ensure that health and safety remains the first concern of the Company as the business develops. 
Our Accident Frequency Rate (AFR) is at an all time low and below the industry average. The number of man-hours worked on site
in a given 12 month period has continued to grow and is now over 1 million hours per year.  The increase in activity is being
effectively managed by our construction teams without putting health and safety at risk. 
We continue to identify new ways of working to reduce wasteful practices and processes. One example of this is the ‘bathroom
pods’ being installed on a number of our developments. These inherently labour intensive rooms are manufactured off site,
before being delivered and installed, following the principles set out in the Construction Design and Management Regulations
2007 by designing out risk wherever possible.  
This year we have formed an ‘Executive Safety Committee’ and an ‘Operational Safety Forum’ as part of the overall strategy for
managing change as the business grows and develops. It has been recognised that our approach to health and safety will be developed
through these groups by encouraging an inclusive culture throughout the business and delivering integrated solutions.    
Mark Parker and John Fitzgerald continue to be responsible for health and safety in each of the operating divisions with the assistance of
Steve Nicoll. David Durant, Group Managing Director, is the board member with overall responsibility for health and safety.
“One of the main reasons for joining Telford Homes was the passion I witnessed in everyone I met. A few months on I have not
seen anybody within the Company that does not share in the aspirations of the business. This is reinforced on site by the
commitment and integrity of the site teams in undertaking their duties in a professional manner. My main goal is to further
develop and monitor policies and procedures in the light of the continuing growth of the Company. I am looking forward to the
challenges and feel privileged to be part of the Telford Homes team.”
Steve Nicoll
27 Annual report and accounts 07
“It is the policy of Telford Homes Plc
that our operations are conducted
in such a way as to safeguard the
health, safety and welfare of all our
people and all other persons who
may be affected by our activities.”
Steve Nicoll 
Group Health and Safety Manager
R&A Telford 07  4/6/07  16:28  Page 28 Corporate responsibility 
OneStratford under construction
Annual report and accounts 07 28
R&A Telford 07  4/6/07  16:28  Page 29 Environment and Sustainability
The key aims of the policy are:
• Integration of environmental responsibilities into the organisation.
• Ensuring that all operations take account of the Environmental Protection Act.
• Undertaking regular reviews of our working practices to minimise pollution and waste.
• Ensuring that contractors involved in the removal of waste are registered carriers.
• Assessment of any environmental impact when performing risk assessments for the control of substances hazardous to health.
• A commitment to achieving high levels of energy efficiency and water management in all of our operations.
There are many examples of this policy in action in our business:
• On almost all of our sites we undertake extensive remediation works in existing residential areas to remove pollutants and
material harmful to the environment.
• Recycling of waste is undertaken wherever possible including the use of crush concrete from demolished buildings for ground
works on the same developments and the recycling of plasterboard and other materials. 
• In our internal specification we provide low energy light fittings, dual-flush toilets, aerators on taps and flow restrictors on
showers to save water.
• Recent schemes have aimed for 10% of all energy to come from a sustainable source which can include the use of biomass
boilers for central heating and hot water and these are fuelled by wood pellets from managed forests.
• Timber from sustainable sources is now used exclusively on all developments.
• We are exploring the possibility of a timber panel solution for one of our developments which will have a much lower carbon
footprint than traditional methods of construction.
• Methods of harnessing natural energy such as solar panels and ground source heat pumps are being incorporated into a
number of developments.
• The external structures of our buildings are designed with enhanced thermal properties to reduce their carbon footprint,
including high-performance glazing systems and where appropriate mechanical ventilation systems, incorporating heat
recovery systems to complement natural air circulation. 
• We use tyre rubber as a sound deadening membrane in a number of our developments thereby recycling waste materials and
reducing noise pollution.
• We have designed underground refuse facilities at recent sites which are self contained and environmentally friendly and on
larger developments we are introducing recycling facilities alongside the normal refuse bins.
• We are increasing our use of pre-fabricated external walls and bathroom pods and these reduce waste as they are
manufactured off-site.
• Many of our developments are ‘car free’ and these are usually located near public transport links and have provision for
bicycles to be stored.
• Ecological reports have helped us to assess the ways in which existing species can be nurtured once a development is complete. Bat
boxes and brown roofs have been positive additions to recent developments to enhance the built environment for urban wildlife.
29 Annual report and accounts 07
Telford Homes is committed to supporting the
environment and minimising any harmful impact
our business activities have upon it. The Company
has an environmental policy and we ensure that
this is communicated throughout our operations
including appropriate subcontractors and suppliers. 
R&A Telford 07  4/6/07  16:28  Page 30 Corporate responsibility 
As a result of such activities a number of Telford Homes’ properties have been rated as ‘very good’ in their EcoHomes assessments.
In order to build considerately for the future, we continue to research sustainable energy solutions to ensure the best technologies
are being used across the Company and that we are contributing positively towards a greener future.
In addition to our commitment to the environment we consider our social responsibility in a wider sense to be of vital
importance in the areas in which we operate.
The regeneration of East London is an ongoing project in which we are playing a major role. This process is increasing the quality
of life for local people both by improving neighbourhoods and through the provision of new but affordable housing with our
housing association partners. We have excellent relationships with local councils and housing associations and we are extremely
supportive of the need to provide affordable housing for shared ownership and for rent.
Throughout the year we have worked alongside the local authorities to encourage employment of local labour on our projects.
During the year we carried out several pre-planning public consultations to discuss local issues and concerns. This encourages
public participation and allows us to incorporate relevant issues within our planning applications. This was particularly important
at the British Estate, E3 where local opinion was key to some of the decisions taken in respect of the development.
Annual report and accounts 07 30
The Sienna Building, Barking which features a ‘brown roof’ to provide a nesting location for birds
R&A Telford 07  4/6/07  16:28  Page 31 Customer Service
Our Customer Service remit includes:
• Thorough quality control inspections in the final weeks of construction.
• 'Snagging' every unit across all developments to achieve finishing consistency.
• Pre-Completion Inspections with customers.
• Thorough demonstration on handover for trouble-free ownership.
• Inductions for new tenants (showing how to use the home prevents most running-in problems). 
• An emergency back-up service for the times when our offices are closed and help is needed.
• Communication of build progress, completion dates and running-in advice.
• Listening to feedback for future improvements.
The Customer Service team spend up to 80% of their time on site, carrying out quality control in the final two weeks of construction,
which gives the team the opportunity to view each property as if through the eyes of the customer.  At this stage, the standard of
finish is checked to ensure it exceeds NHBC guidelines, and only then is each customer invited to undertake their Pre-Completion
Inspection and see a full working demonstration in their apartment: for example, kitchen appliances, central heating boiler,
programmers and alarm.  This induction service is also available for tenants who may subsequently move in, where the home has
been purchased for letting purposes. At the final handover, the customer is invited to inspect their property fully again and raise
any issues they may have, which will be addressed promptly. 
Outside of our normal office hours, there is a back-up 24/7, 365 days a year emergency service, which gives peace of mind for
owners and tenants alike.  Our high standards of finish, coupled with a ten year NHBC warranty and the out of hours service, result
in maximum benefit and minimum effort for all our customers.
Overall, Telford Homes' product and service package excellence has brought us a high level of repeat purchase and recommendation
from satisfied customers. In our last 2006 quarterly survey, 94% of purchasers said they would recommend Telford Homes to others.
31 Annual report and accounts 07
“Telford Homes is increasingly well
known in the London property arena
for its exceptional product finish,
combined with high quality customer
service which is provided to owner-
occupiers, investor buyers and their
tenants alike.”
Anthony Atkinson 
Customer Service Director
R&A Telford 07  4/6/07  16:28  Page 32 Annual report and accounts 07 32
Corporate responsibility 
Customer Service Team (Left to right) Chris Gurney, Anthony Atkinson, Leigh Flynn, Jim Walker, Debbie Ewers, Peter Gathercole, Nigel Hammond
R&A Telford 07  4/6/07  16:28  Page 33 R&A Telford 07  4/6/07  16:28  Page 34 RELATIONSHIPS
“It’s all about teamwork and partnerships”
Corporate governance
R&A Telford 07  4/6/07  16:28  Page 35 Directors and Advisors
35 Annual report and accounts 07
David Holland Non-Executive Chairman, 66
David Holland has over 40 years experience in the development and house building
sector having joined George Wimpey Plc in 1966. On his retirement he held the
position of Group Managing Director with responsibility for worldwide housing and
land development. In 1997 David held the annual position of President of the House
Builders Federation. David is currently Chairman of Orchid Developments Group Ltd
and non-executive director of the Harpenden Building Society. David was appointed
non-executive Chairman of Telford Homes Plc in December 2001 and advises on
development issues and matters of strategic planning. He chairs the remuneration
committee and is a member of the audit committee.
Andrew Wiseman BA (Hons), FCMA, Chief Executive, 50
Andrew Wiseman, together with fellow directors, founded Telford Homes Plc in
December 2000 following ten years with Furlong Homes Plc initially as Financial
Director then as Chief Executive for the final three years. Prior to 1990 his experience
had been gained in various sectors, including seven years with B.A.T Industries.
Andrew has spear-headed the successful flotation of both Furlong Homes Plc and
Telford Homes Plc on AIM, the former on the launch of AIM in 1995, the latter in
December 2001, one year after the Company’s formation building on excellent
relationships with institutional investors. Under his stewardship pre-tax profit has grown
from £1.33 million in March 2002 to £13.5 million in March 2007. Andrew has been
especially involved in the cementing of relationships between Telford Homes Plc and
affordable housing providers which have been central to the growth of the Company.
David Durant Group Managing Director, 45
David Durant is a co-founder of Telford Homes Plc and has over 20 years experience
in the construction and house building sectors including 14 years at Furlong Homes
where he was Group Technical Director from 1997 to 2000.  His remit covers all
aspects of design and construction. In 2004 he supervised devolving responsibility
for the finished Telford Homes product into two divisions, Telford Homes Alto and
Telford Homes Metro, with their different, but complementary, specialisations in order
to handle the high level of growth in units under construction. David is the director
with board responsibility for health and safety issues.
Jonathan Di-Stefano MA (Econ), ACA, Financial Director, 32
Jon Di-Stefano joined Telford Homes Plc as Financial Director in October 2002. He
had one year with Mothercare following five years with Arthur Andersen. Apart from
financial matters Jon also has board responsibility for personnel issues. The growth
in both areas, given that annual turnover has grown from £25 million to £104 million
in the four years to March 2007 and staff numbers have more than trebled, has led
Jon to develop his finance team. Jon has played an invaluable role developing
relationships with both our banking partners and institutional investors, through
regular presentations.
R&A Telford 07  4/6/07  16:28  Page 36 Company Secretary
Margaret Turner
Registered Number
4118370
Registered Office
First Floor, Stuart House, Queensgate,
Britannia Road, Waltham Cross,
Hertfordshire, EN8 7TF
Auditors
PricewaterhouseCoopers LLP,
10 Bricket Road, St Albans,
Hertfordshire, AL1 3JX
Bankers
Allied Irish Bank, The Manor House, High Street,
Wanstead, London, E11 2RL
The Royal Bank of Scotland, 1st Floor, Conqueror House,
Vision Park, Chivers Way, Cambridge, CB4 9BY
Barclays Bank, Corporate Banking Centre, PO Box 729,
Eagle Point, 1 Capability Green, Luton, LU1 3US
Solicitors
S J Berwin,  222 Gray’s Inn Road, London, WC1X 8XF
Coldham Shield & Mace, 123 Station Road, Chingford, London, E4 6AG
Nominated Broker
Shore Capital Stockbrokers Limited, Bond Street House,
14 Clifford Street, London, W1S 4JU
Financial and Nominated Advisor
Shore Capital and Corporate Limited, Bond Street House,
14 Clifford Street, London, W1S 4JU
Corporate governance
Annual report and accounts 07 36
James Furlong Land Director, 71
Jim Furlong has over 40 years experience in all aspects of the construction and
building industry through his involvement in roofing, civil engineering, construction
and house building companies which all bore the ‘Furlong’ name. Prior to joining
Telford Homes as Land Director Jim was a driving force within Furlong Homes, where
he was Chairman with specific responsibility for land acquisition. Jim’s wide
experience of land acquisition played a central role in the initial growth of Telford
Homes and he has overseen a significant strengthening of the land buying
department in the last 12 months. 
Sheena Ellwood BA (Hons), Dip. Int. Marketing, Sales and Marketing Director, 48
Sheena Ellwood joined Telford Homes Plc as Sales and Marketing Director in January
2003. Prior to this, her experience includes consumer goods export and eight years as
regional Sales and Marketing Director for Wimpey Homes. Sheena’s contribution to
the growth of Telford Homes Plc can be measured by the rise in the number of private
sale contracts exchanged, increasing from 112 four years ago to 478 homes in the
year to March 2007. Sheena has developed an extensive sales and marketing team at
Telford Homes Plc, and set-up a customer service department that plays an important
role in building relationships with individual customers and investors in our properties.
Robert Clarke FCA, Non-Executive Director, 64 
Robert Clarke was a partner in Binder Hamlyn and subsequently Arthur Andersen
until his retirement in 2000. He is currently Deputy Chairman of RO Group and non-
executive director of Pegasus Retirement Homes Plc. Robert joined Telford Homes
Plc as a non-executive director at the time of the AIM flotation in December 2001
and he has been influential in the fields of corporate governance and strategic
direction. Robert is chairman of the audit committee and a member of the
remuneration committee. He is also a member of the audit committee of the Church
Commissioners and of the Royal Shakespeare Company.
R&A Telford 07  4/6/07  16:29  Page 37 Application of principles
Although not formally required to do so, the directors have sought to embrace the principles contained in the Combined Code (2003)
(the Code) applicable to fully listed companies, in formulating and applying the Company’s corporate governance policies. These
policies are monitored to ensure that they are appropriate to the Company’s circumstances and comply as far as possible with the
provisions of the Code given the size of the Company. 
Directors
The Company is managed by a board of directors and they have the necessary skills and experience to effectively operate and
control the business. There are seven directors in total of whom two are non-executive directors. David Holland and Robert Clarke,
the non-executive directors, are considered independent and they comprise both the audit and remuneration committees. The
board meets once a month and the directors make every effort to attend all board meetings.
The board is responsible for taking all major strategic decisions and also addressing any significant operational matters. In addition
the board reviews the risk profile of the Company and ensures that an adequate system of internal control is in place. Management
information systems are in place to enable the directors to make informed decisions to properly discharge their duties.
The roles of the Chairman and the Chief Executive are separate. The Chairman is responsible for running the board and he meets
regularly and separately with the Chief Executive and the other non-executive director to discuss matters for the board.
As the business has developed, the composition of the board has been under constant review to ensure that it remains
appropriate to the managerial requirements of the Company. One third of the directors retire annually in rotation in accordance
with the Company’s articles of association. This enables the shareholders to decide on the election of their Company’s board.
The board takes decisions regarding the appointment of new directors as a whole and this is only done following a thorough assessment
of a potential candidates skills and suitability for the role. New directors are given a full induction to the Company where required so as to
ensure they can properly fulfil their role and meet their responsibilities.
All directors are offered appropriate training to develop their knowledge and ensure they remain up to date in relevant matters for
which they have responsibility as a member of the board.
The Chairman’s statement and Chief Executive’s review included in this annual report give the board’s current assessment of the
Company’s prospects. The directors are responsible for preparing the financial statements as set out in the statement of
directors’ responsibilities. The responsibilities of the auditors are set out in their report.
Remuneration committee
Details concerning the composition and meetings of the remuneration committee are contained in the directors’ remuneration
report on pages 39 to 40.
Audit committee
During the period the audit committee, which is chaired by Robert Clarke an independent non-executive director, has met three
times with the external auditors being in attendance. 
The committee has a responsibility for reviewing the financial statements provided to shareholders. In addition the committee
reviews the business and financial risks and internal controls as described below.
The duties of the committee also include ensuring that the auditors provide a cost effective service to the Company and remain
objective and independent and to consider from time to time the need for an internal audit function.
Policy on corporate governance
37 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 38 Corporate governance
Relations with shareholders
The Company has institutional shareholders and is, where practicable, willing to enter into a dialogue with them. The Chief Executive and
the Financial Director meet regularly with institutional investors within the confines of relevant legislation and guidance.
The board invites communication from its private investors and encourages participation by them at the Annual General
Meeting (AGM). All board members present at the AGM are available to answer questions from shareholders. Notice of the AGM
in excess of 21 clear days is given and the business of the meeting is conducted with separate resolutions, voted on initially by a
show of hands and with the result of the voting being clearly indicated.
Internal control
The board is responsible for the Company’s system of internal control and for reviewing its effectiveness. Such a system is
designed to mitigate the risk of failure to achieve business objectives and can only provide reasonable but not absolute
assurance against material misstatement or loss.
The board is of the view that there is an ongoing process for identifying, evaluating and managing the Company’s significant risks,
and that it has been in place for the period ended 31st March 2007 and up to the date of approval of the annual report and
accounts, and that it is regularly reviewed by the board.
The internal control procedures are delegated to executive directors and senior management in the Company operating
within a clearly defined departmental structure. The board regularly reviews the internal control procedures in the light of
the ongoing assessment of the Company’s significant risks.
On a monthly basis management accounts, including a comprehensive cash flow forecast, are reviewed by the board in order to
provide effective monitoring of financial performance. At the same time the board considers other significant strategic, organisational
and compliance issues to ensure that the Company’s assets are safeguarded and financial information and accounting records can be
relied upon. The board formally monitors monthly progress on each development.
Going concern
The directors consider that the funds available to the Company are sufficient for its operation for the foreseeable future.
Annual report and accounts 07 38
R&A Telford 07  4/6/07  16:29  Page 39 The directors present the remuneration report for the year ended 31st March 2007.
Composition of the remuneration committee
The remuneration committee comprises the independent non-executive directors, David Holland and Robert Clarke. The
committee makes recommendations to the board on executive directors’ service agreements and remuneration. In doing so it has
undertaken relevant research to ensure that remuneration levels are competitive with the industry average. The committee met
twice during the year.
Remuneration policy
It is the Company’s policy to provide remuneration packages sufficient to attract, retain and motivate directors of the quality
required. To add further incentive the directors have adopted two bonus schemes, one applicable to all staff and a scheme for
executive directors and senior management. Both schemes are dependent on the Company meeting certain financial
performance targets. The maximum amount that can be earned under the executive bonus scheme is 100% of basic salary.
The Company operates a Share Incentive Plan (SIP) in which all employees are entitled to participate. The SIP exists in order to
increase employee ownership of shares and further details are given in note 18 to the financial statements.
During 2006 the Company set up a Deferred Payment Share Purchase Plan (DPSPP) for the benefit of selected senior employees.
Further details are given in note 18 to the financial statements. The remuneration committee is responsible for approving any
offers of shares made under the DPSPP. 
The board as a whole determines the remuneration of the non-executive directors after considering external market research.
They do not participate in the bonus schemes or in the group personal pension scheme. They are entitled to participate in the SIP. 
Service contracts
The executive directors have service contracts that can be terminated on 12 months notice. These provide for termination
payments equivalent to 12 months basic salary and contractual benefits.
The non-executive directors have letters of appointment that can be terminated on three months notice.
Directors’ emoluments
The directors’ emoluments for the year ended 31st March 2007 are as follows:
Salary Bonus Benefits Pension Total Total
and fees in kind contributions 2007 2006
££ £ £ £ £
Andrew Wiseman 115,000 60,000 21,568 11,500 208,068 176,056
David Durant 115,000 60,000 11,596 11,500 198,096 172,320
Robert Clarke 31,500 - - - 31,500 30,000
Jonathan Di-Stefano 96,500 60,000 13,643 9,650 179,793 146,136
Sheena Ellwood 96,500 60,000 15,295 9,650 181,445 149,368
James Furlong 96,500 60,000 35,902 - 192,402 160,919
David Holland 42,000 - - - 42,000 40,000
Total 593,000 300,000 98,004 42,300 1,033,304 874,799
Directors’ remuneration report
39 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 40 Corporate governance
Directors’ interests in shares and share options
Directors’ interests in shares are disclosed in the report of the directors.
The share options held by the directors at 31st March 2007 and the movements during the year then ended were
as follows:
Company 31st March Granted Exercised 31st March Exercise Dates
scheme 2006 in year in year 2007 price exercisable
Number Number Number Number
Jonathan Di-Stefano unapproved 60,000 - - 60,000 75p 1 Oct 2005 to 1 Oct 2012
Sheena Ellwood approved 40,268 - (40,268) - 74.5p 20 Feb 2006 to 20 Feb 2013
unapproved 59,732 - - 59,732 74.5p 20 Feb 2006 to 20 Feb 2013
On 20th June 2006 40,268 shares were issued as a result of Sheena Ellwood exercising share options at an exercise price of
74.5p. On that date the market value of the shares was 223p resulting in a gain of £59,798.
On 22nd September 2006 Jonathan Di-Stefano and Sheena Ellwood each subscribed for 75,000 shares under the terms of the
DPSPP at the market value on that date of 260p.
By order of the board,
David Holland
Chairman of the Remuneration Committee
21st May 2007
Annual report and accounts 07 40
R&A Telford 07  4/6/07  16:29  Page 41 The directors present their report and the audited financial statements for the year ended 31st March 2007.
Review of activities
The principal activity of the Company is that of property development.
A review of the activities and prospects of the Company is given in the Chairman’s statement, the Chief Executive’s review and the
financial review on pages 5 to 16. The Company is required to prepare a business review incorporating comments on key
performance indicators and this is covered in the review of activities and prospects.
The primary key performance indicators are disclosed on page 1.
Results and dividends
Profit after taxation for the year ended 31st March 2007 was £9,948,000 (2006 - £7,001,000).
The directors recommend a final dividend of 4.9p per ordinary share which, together with the interim dividend of 4.0p paid on 15th
January 2007, makes a total of 8.9p for the year (2006 – 7.0p).
Substantial shareholdings
As at 14th May 2007, the Company had been advised of the following notifiable interests in its ordinary share capital:
Number Percentage
held
J P Morgan Fleming Mercantile Inv Trust Plc 3,863,294 10.46%
The Independent Investment Trust 1,400,000 3.79%
K P Furlong 1,496,000 4.05%
T D Waterhouse Nominees (R Stokes) 1,607,760 4.35%
D G Furlong 1,300,000 3.52%
Pershing Nominees (M Trim) 1,185,000 3.21%
M K B Turner 1,107,579 3.00%
Directors
Details of the directors of the Company are shown on pages 35 to 36. David Holland and James Furlong retire by rotation at the
next Annual General Meeting and, being eligible, offer themselves for re-election. 
Directors’ interests
The directors of the Company are listed below together with their interest in the shares of the Company at 31st March 2007 and
movements in the year:
At 31st Exercise of Share Incentive Deferred Payment Market acquisitions At 31st 
March 2006 share options Plan Share Purchase Plan and disposals March 2007
Number Number Number Number Number Number
Andrew Wiseman 2,173,553 - 1,786 - 10,000 2,185,339
David Durant 1,047,460 - 1,786 - - 1,049,246
James Furlong 1,040,220 - 1,786 - 37,000 1,079,006
David Holland 947,460 - 1,786 - 10,000 959,246
Robert Clarke 97,460 - 1,786 - 10,000 109,246
Sheena Ellwood 217,460 40,268 1,786 75,000 - 334,514
Jonathan Di-Stefano 253,460 - 1,786 75,000 - 330,246
Report of the directors
41 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 42 These interests include shares purchased under the Telford Homes Share Incentive Plan (SIP) which all employees, including
directors, are eligible to participate in. All shares purchased under the SIP are matched by shares provided by the Company on a
one for one basis. These ‘Matching’ shares are also included in the interests stated but must remain in the SIP for a period of not
less than three years otherwise they are forfeited. Further details on the SIP are included in note 18 to the financial statements.
Details of share options held by directors are given in the directors’ remuneration report on pages 39 to 40.
Investment in own shares
The Company’s investment in own shares relates solely to the Share Incentive Plan and further details of the total holding and
movements in the holding are disclosed in note 18.
Creditors
It is Company policy to settle all debts with its creditors on a timely basis. Subcontractors are paid upon agreement of the value
of works completed based on their applications for payment and the terms agreed. In general, other suppliers are paid during the
month following the month of receipt of the invoice unless other terms have been specifically agreed.
At 31st March 2007 trade creditors represented 12 days purchases (2006 – 13 days).
Employees
The Company places considerable value on the involvement of its employees and keeps them informed of all relevant matters on
a regular basis. Telford Homes is an equal opportunities employer and all applications for employment are considered fully on the
basis of suitability for the job.
Charitable donations
The Company made charitable donations of £14,100 (2006 - £9,600). These donations were made to a number of different
charities supporting a broad range of good causes.
Annual General Meeting
The Annual General Meeting will be held at the registered office at First Floor, Stuart House, Queensgate, Britannia Road,
Waltham Cross, Hertfordshire on the 5th July 2007 at 12.30pm.
Auditors
The directors considered the appointment of auditors during 2006 and, following a competitive tender, decided to appoint
PricewaterhouseCoopers LLP. Accordingly Moore Stephens LLP have resigned as auditors of Telford Homes Plc.
A resolution to re-appoint PricewaterhouseCoopers LLP as auditors to the Company will be proposed at the Annual General
Meeting in accordance with section 385 of the Companies Act 1985.
Each of the directors at the time this report was approved has confirmed the following:
• so far as each director is aware, there is no relevant audit information of which the Company’s auditors are unaware;
• each director has taken steps, including appropriate enquiries of fellow directors, in order to be aware of any information
needed by the Company’s auditors in connection with preparing their report and to establish that the Company’s auditors are
aware of that information.
By order of the board,
Margaret Turner
Company Secretary
21st May 2007
Corporate governance
Annual report and accounts 07 42
R&A Telford 07  4/6/07  16:29  Page 43 The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law
and regulations. 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have
elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law).  The financial statements are required by law to give a true and fair view of
the state of affairs of the Company and of the profit or loss of the Company for that period. 
In preparing those financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently, with the exception of changes arising on the adoption of
new accounting standards in the year as explained in the statement of accounting policies;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and
explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will
continue in business.
The directors confirm that they have complied with the above requirements in preparing the financial statements.
The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 1985.
They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Statement of directors’ responsibilities
43 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 44 Independent auditors’ report to the members of Telford Homes Plc
We have audited the financial statements of Telford Homes Plc for the year ended 31st March 2007 which comprise the profit and loss
account, the statement of total recognised gains and losses, the balance sheet, the cash flow statement, the statement of accounting
policies and the related notes. These financial statements have been prepared under the accounting policies set out therein.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the annual report and the financial statements in accordance with applicable law and
United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of
directors’ responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and
International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the
Company’s members as a body in accordance with Section 235 of the Companies Act 1985 and for no other purpose.  We do not,
in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior consent in writing.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in
accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the report of the
directors is consistent with the financial statements. The information given in the report of the directors includes that specific
information presented in the Chief Executive’s review and the financial review that is cross referred from the review of activities
section of the report of the directors. 
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the
information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration and
other transactions is not disclosed.
We read other information contained in the annual report, and consider whether it is consistent with the audited financial
statements. This other information comprises only the report of the directors, the Chairman’s statement, the Chief Executive’s
review, the financial review, the policy on corporate governance and the directors’ remuneration report. We consider the
implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial
statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) 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 Company’s circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order
to provide us with sufficient evidence to give reasonable assurance that the financial statements 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, in accordance with United Kingdom Generally Accepted Accounting Practice,
of the state of the Company’s affairs as at 31st March 2007 and of its profit and cash flows for the year then ended;
• the financial statements have been properly prepared in accordance with the Companies Act 1985; and
• the information given in the report of the directors is consistent with the financial statements.
PricewaterhouseCoopers LLP, 
Chartered Accountants and Registered Auditors, St Albans.
21st May 2007
Auditors’ report
Corporate governance
Annual report and accounts 07 44
R&A Telford 07  4/6/07  16:29  Page 45 R&A Telford 07  4/6/07  16:29  Page 46 DIRECTION
“Heading towards
an exciting future”
Financial statements
R&A Telford 07  4/6/07  16:29  Page 47 Profit and loss account 31st March 2007
Statement of total recognised gains and losses 31st March 2007
Note Year ended Year ended
31st March 2007 31st March 2006
restated (note 18)
£000 £000
Turnover 104,407 79,280
Cost of sales (81,040) (61,060)
Gross profit 23,367 18,220
Administrative expenses (6,676) (5,373)
Operating profit 1 16,691 12,847
Interest receivable 794 201
Interest payable and similar charges 4 (3,980) (3,083)
Profit on ordinary activities before taxation 13,505 9,965
Taxation on profit on ordinary activities 5 (3,557) (2,964)
Profit on ordinary activities after taxation 9,948 7,001
Dividends paid 6 (2,867) (1,809)
Retained profit for the year 7,081 5,192
Earnings per share:
Basic 7 30.3p 23.8p
Diluted 7 29.4p 23.3p
All activities are in respect of continuing operations.
Year ended Year ended
31st March 2007 31st March 2006
£000 £000
Retained profit for the year 7,081 5,192
Prior year adjustment (note 18) (71)
Total gains and losses recognised since the last annual report 7,010
47 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 48 Balance sheet 31st March 2007
Note 31st March 2007 31st March 2006
restated (note 18)
£000 £000
Fixed assets
Tangible assets 8 851 871
Current assets
Stocks and work in progress 10 70,174 45,547
Debtors 11 56,128 59,454
Cash at bank and in hand 17,617 7,211
143,919 112,212
Creditors - amounts falling due within one year 12 (90,079) (80,711)
Net current assets 53,840 31,501
Total assets less current liabilities 54,691 32,372
Creditors - amounts falling due after more than one year 13 (96) (75)
Provision for liabilities 14 (71) (136)
Net assets 54,524 32,161
Financed by:
Capital and reserves
Called up share capital 15 3,694 2,981
Share premium 16 28,641 12,656
Profit and loss account 16 22,189 16,524
Equity shareholders' funds 17 54,524 32,161
These financial statements were approved by the board on 21st May 2007 and signed on its behalf by:
Andrew Wiseman Jonathan Di-Stefano
Chief Executive Financial Director
Financial statements
Annual report and accounts 07 48
R&A Telford 07  4/6/07  16:29  Page 49 Cash flow statement 31st March 2007
Note Year ended Year ended
31st March 2007 31st March 2006
restated (note 18)
£000 £000
Cash flow from operating activities 21 860 (25,940)
Returns on investments and servicing of finance
Interest received 794 201
Interest paid (3,885) (3,072)
Hire purchase interest (15) (11)
(3,106) (2,882)
Taxation (3,554) (2,264)
Capital expenditure
Purchase of tangible fixed assets (182) (589)
Sale of tangible fixed assets 38 351
Equity dividends paid (2,867) (1,809)
Cash outflow before financing (8,811) (33,133)
Financing
Issue of ordinary share capital 15,895 425
Expenses of share issue (627) -
Purchase of own shares (365) -
Sale of own shares 180 128
Increase in bank loans 4,257 35,837
Capital element of hire purchase payments (123) (113)
19,217 36,277
Increase in cash 10,406 3,144
Reconciliation of net cash flow to movement in net debt
Increase in cash 10,406 3,144
Increase in bank loans (4,257) (35,837)
Capital element of hire purchase payments 123 113
Decrease (increase) in debt arising from cash flow 6,272 (32,580)
Inception of hire purchase agreements (162) (133)
Movement in net debt in the year 6,110 (32,713)
Net debt brought forward (61,912) (29,199)
Net debt carried forward 22 (55,802) (61,912)
The prior year balances have been reanalysed for comparative purposes.
49 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 50 The principal accounting policies are summarised below. They have all been applied consistently throughout the year
and the preceding year except as noted below.
Changes in accounting policy
The Company has adopted Financial Reporting Standard 20 'Share-based payment' for the year ended 31st March
2007. As a result of this, a charge is made to the profit and loss account to reflect the calculated fair value of
employee share options over and above the exercise price paid by employees (note 18). This charge is calculated at
the date of grant of the options and is charged equally over the vesting period. The corresponding adjustment to
reserves is made directly to the profit and loss reserve.  
Accounting convention
The financial statements have been prepared under the historical cost convention and in accordance with applicable
UK accounting standards.
Turnover and profit recognition
Turnover is recognised from the date of exchange of contracts for the sale of properties at a rate equivalent to the
value of work undertaken in respect of land development. The value of turnover less deposits and completion monies
received is included as amounts recoverable on contracts within debtors. All turnover is generated in the United
Kingdom. Commission received on property sales made on behalf of third parties is recorded within turnover, with all
costs associated with the sale of those properties recognised within cost of sales.
Profit on developments is recognised over the life of each development in proportion to turnover only to the extent
that the total eventual profit on the development can be foreseen with reasonable certainty. Until there is reasonable
certainty over the final outcome of a development the profit is restricted to the non-refundable deposits received.
Losses are provided for as soon as foreseen.
Joint arrangements
The Company has certain contractual arrangements with other participants to engage in joint activities that do not
create an entity carrying on a trade or business of its own. The Company includes its share of the assets, liabilities,
profits and cash flows in such joint arrangements, measured in accordance with the terms of the arrangement and
pro-rata to the Company's interest in the arrangement, in its financial statements. 
Development properties
Development properties are included in stocks and work in progress and are stated at the lower of cost and net
realisable value. Cost comprises costs of acquisition and development, including directly attributable fees and
expenses but not loan interest. Included within development properties are freehold interests held in completed
developments. These are recognised at a multiple of annual rental income.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less accumulated depreciation. Depreciation is provided on a straight line
basis at rates calculated to write down the cost, less estimated residual value, of each asset over its expected useful
life as follows:
Leasehold improvements - shorter of term of lease and 10 years
Plant and machinery - 2 to 5 years
Motor vehicles - 3 years
Financial statements section Financial statements
Statement of accounting policies 31st March 2007
Annual report and accounts 07 50
R&A Telford 07  4/6/07  16:29  Page 51 Statement of accounting policies 31st March 2007
Taxation
Corporation tax is provided at amounts expected to be paid or recovered using the tax rates and laws that have been
enacted or substantially enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance
sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less
tax in the future have occurred. Deferred tax is measured at the average tax rates that are expected to apply in the
periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted
or substantially enacted by the balance sheet date.
A net deferred tax asset is regarded as recoverable and therefore recognised when, on the basis of all available
evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the reversal
of the underlying timing differences can be deducted.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are capitalised and depreciated over the shorter of
their expected useful lives and the lease term. The capital elements of the future lease obligations are recorded as
liabilities, while 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.
Operating leases
Operating lease rentals are charged to the profit and loss account as incurred.
Pension costs
Contributions paid to group personal pension schemes (defined contribution), in respect of employees, are charged
to the profit and loss account as incurred.
51 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 52 Notes to the financial statements 31st March 2007
1  Operating profit Year ended Year ended
31st March 2007 31st March 2006
£000 £000
Operating profit is stated after charging (crediting):
Depreciation - owned assets 204 163
- hire purchase assets 156 149
Operating lease rentals   - property 162 149
- motor vehicles 175 156
- plant and machinery 3 3
Profit on sale of tangible fixed assets (34) (37)
In addition the following has been charged in respect of auditors’ remuneration:
Audit and related services (PricewaterhouseCoopers LLP)
Statutory audit of the financial statements 57 -
Other services including non-audit services (PricewaterhouseCoopers LLP)
The audit of subsidiary and joint arrangement accounts pursuant to legislation 5 -
Other services provided pursuant to such legislation - -
Other services relating to taxation 13 -
All other services 22 -
Audit and related services (Moore Stephens LLP)
Statutory audit of the financial statements - 30
Other services including non-audit services (Moore Stephens LLP)
The audit of subsidiary and joint arrangement accounts pursuant to legislation 8 3
Other services provided pursuant to such legislation 5 5
Other services relating to taxation 14 16
All other services - -
PricewaterhouseCoopers LLP were appointed as the Company's auditors during the year.
Financial statements
Annual report and accounts 07 52
R&A Telford 07  4/6/07  16:29  Page 53 Notes to the financial statements 31st March 2007
2  Directors' remuneration
The total remuneration payable to the directors in the year was £1,033,304 (2006 - £874,799).
The remuneration payable to the highest paid director was £208,068 (2006 - £176,056). This includes payments to
a personal pension arrangement of £11,500 (2006 - £9,762).
Further details of directors' remuneration including other benefits and share options is given in the directors'
remuneration report on pages 39 to 40.
Four current directors are accruing benefits under group personal pension arrangements (2006 - Four).
3  Staff costs
The average monthly number of persons employed by the Company including executive directors, during the year
analysed by activity was as follows:
Year ended Year ended
31st March 2007 31st March 2006
Number Number
Construction 67 54
Administration 50 43
117 97
The employment costs of all employees included above were: Year ended Year ended
31st March 2007 31st March 2006
£000 £000
Wages and salaries 6,278 4,801
Social security costs 686 550
Other pension costs - group personal pension arrangements 252 185
7,216 5,536
The Company operates a group personal pension scheme for its employees. At 31st March 2007 payments of
£32,000 were due to the scheme (2006 - £1,000).
53 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 54 4  Interest payable and similar charges Year ended Year ended
31st March 2007 31st March 2006
£000 £000
Interest payable on bank loans and overdrafts 3,965 3,072
Hire purchase finance charges 15 11
3,980 3,083
5  Taxation Year ended Year ended
31st March 2007 31st March 2006
restated (note 18)
£000 £000
United Kingdom corporation tax at a rate of 30.0% (2006 - 30.0%) 3,800 3,007
Adjustment in respect of prior periods (178) (168)
Total current taxation 3,622 2,839
Deferred taxation (note 14) (65) 125
Taxation on profit on ordinary activities 3,557 2,964
Tax reconciliation
Profit on ordinary activities before taxation 13,505 9,965
Profit on ordinary activities before taxation at standard rate of corporation 4,052 2,990
tax in the UK of 30% (2006 - 30%)
Effects of:
Adjustment in respect of prior periods (178) (168)
Expenses not deductible for tax purposes 28 17
Depreciation in excess of capital allowances 13 -
Deductions in respect of employee share schemes (309) -
Other timing differences 16 -
Total current taxation 3,622 2,839
Factors affecting future tax charges
On 21st March 2007 it was announced that the corporation tax rate will reduce from 30% to 28% with effect from
1st April 2008. The legislation to enact this change was not in place at the balance sheet date and so this change is
not recognised for deferred tax purposes. The impact of the change on the calculation of deferred tax is not
considered to be material.
Financial statements
Annual report and accounts 07 54
R&A Telford 07  4/6/07  16:29  Page 55 Notes to the financial statements 31st March 2007
6  Dividends paid Year ended Year ended
31st March 2007 31st March 2006
£000 £000
Final dividend paid in July 2006 of 4.6p (July 2005 - 3.7p) 1,391 1,093
Interim dividend paid in January 2007 of 4.0p (January 2006 - 2.4p) 1,476 716
2,867 1,809
The final dividend proposed for the year ended 31st March 2007 is 4.9p per ordinary share. This dividend was
declared after 31st March 2007 and as such the liability of £1,808,000 has not been recognised at that date.
7  Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the year, excluding those held in the Share Incentive Plan
(note 18), which are treated as cancelled. For diluted earnings per share, the weighted average number of ordinary
shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.
Earnings per share have been calculated using the following figures: 
Year ended Year ended
31st March 2007 31st March 2006
restated (note 18)
Weighted average number of shares in issue 32,781,546 29,356,371
Dilution - effect of share schemes 1,054,146 727,290
Diluted weighted average number of shares in issue 33,835,692 30,083,661
Profit on ordinary activities after taxation £9,948,000 £7,001,000
Earnings per share:
Basic 30.3p 23.8p
Diluted 29.4p 23.3p
55 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 56 8  Tangible fixed assets Leasehold Plant and Motor
improvements machinery vehicles Total
£000 £000 £000 £000
Cost
At 1st April 2006 256 805 427 1,488
Additions 5 137 202 344
Disposals - - (133) (133)
At 31st March 2007 261 942 496 1,699
Depreciation
At 1st April 2006 6 394 217 617
Charge 25 179 156 360
Disposals - - (129) (129)
At 31st March 2007 31 573 244 848
Net book value
At 1st April 2006 250 411 210 871
At 31st March 2007 230 369 252 851
Motor vehicles with a net book value of £252,000 are held under hire purchase arrangements (2006 - £210,000).
Depreciation of £156,000 was charged during the year on these assets (2006 - £149,000).
9  Investments
Investment in subsidiary undertaking
At 31st March 2007 the Company held 100% of the issued share capital of Island Gardens Limited, a company
registered in England and Wales, which had been incorporated to assist the Company in carrying out a joint activity.
Island Gardens Limited is a dormant company with share capital of £2. Telford Homes Plc does not prepare
consolidated financial statements as Island Gardens Limited is immaterial to the operations of the group.
Joint arrangements
At 31st March 2007 the Company held 50% of the issued share capital of Telford Homes (Stratford) Limited, a
company registered in Scotland, which has been incorporated to assist the Company in carrying out a joint activity.
At 31st March 2007 the Company held 50% of the issued share capital of Telford Homes (Creekside) Limited, a
company registered in Scotland, which has been incorporated to assist the Company in carrying out a joint activity.
At 31st March 2007 the Company held 50% of the issued share capital of Bishopsgate Apartments LLP, a limited liability
partnership registered in England, which has been incorporated to assist the Company in carrying out a joint activity.
Financial statements
Annual report and accounts 07 56
R&A Telford 07  4/6/07  16:29  Page 57 Notes to the financial statements 31st March 2007
10  Stocks and work in progress 31st March 2007 31st March 2006
£000 £000
Development properties 70,174 45,547
11  Debtors 31st March 2007 31st March 2006
£000 £000
Amounts recoverable on contracts 54,179 57,243
Trade debtors 81 70
Other debtors 1,479 1,758
Prepayments and accrued income 389 383
56,128 59,454
Amounts recoverable on contracts include sales proceeds secured on exchanges of contracts, less deposits received,
adjusted for percentage completion on each development. This total includes a net amount of £21,009,000 (2006 -
£8,204,000) which will be received on legal completions expected after more than one year.
12  Creditors - amounts falling due within one year 31st March 2007 31st March 2006
£000 £000
Bank loans 73,210 68,953
Hire purchase liabilities 113 95
Trade creditors 5,555 4,444
Land creditors - 661
Corporation tax 1,655 1,590
Other taxation and social security 244 198
Other creditors 3 92
Accruals and deferred income 9,299 4,678
90,079 80,711
The bank loans represent credit line facilities, with two banks, secured by a debenture over the assets of the Company
and by charges over the development sites owned by the Company. Interest is payable at rates up to 1.75% over base
rate. Details of facilities are given in note 23.
13  Creditors - amounts falling due 31st March 2007 31st March 2006
after more than one year £000 £000
Hire purchase liabilities 1-2 years 78 53
Hire purchase liabilities 2-5 years 18 22
96 75
57 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 58 14  Provision for liabilities 31st March 2007 31st March 2006
restated (note 18)
£000 £000
The provision for deferred tax comprises:
(Decelerated) accelerated capital allowances (51) 8
Share-based payments (46) (31)
Land remediation timing difference 120 159
Other short term timing differences 48 -
Provision for deferred tax 71 136
A reconciliation of movements in the deferred tax provision is as follows: £000
At 1st April 2006 as previously reported 167
Adjustment for adoption of FRS 20 'Share-based payment' (note 18) (31)
At 1st April 2006 restated 136
Credited to the profit and loss account (65)
At 31st March 2007 71
15  Share capital 31st March 2007 31st March 2006
£000 £000
Authorised
100,000,000 ordinary shares of 10p each 10,000 10,000
Allotted, called up and fully paid
36,940,475 ordinary shares of 10p each (2006 - 29,807,472) 3,694 2,981
On 23rd May 2006, 180,000 ordinary shares were issued at 197p to Telford Homes Trustees Limited to satisfy the
requirements of the Share Incentive Plan (note 18).
On 12th June 2006, 40,000 ordinary shares were issued at 75p as a result of share options being exercised.
On 12th June 2006, 281,876 ordinary shares were issued at 74.5p as a result of share options being exercised.
On 8th August 2006, 33,707 ordinary shares were issued at 89p as a result of share options being exercised.
On 23rd October 2006, 5,769,230 ordinary shares were issued at 260p as a result of a share placing.
On 9th November 2006, 202,242 ordinary shares were issued at 89p as a result of share options being exercised.
On 9th November 2006, 75,948 ordinary shares were issued at 118.5p as a result of share options being exercised.
On 9th November 2006, 550,000 ordinary shares were issued at 260p to Abacus Corporate Trustee Limited to
satisfy the requirements of the Deferred Payment Share Purchase Plan (note 18).
Ordinary shares may be issued in the future to satisfy the exercise of outstanding share options (note 18).
All shares rank equally in respect of shareholder rights.
Financial statements
Annual report and accounts 07 58
R&A Telford 07  4/6/07  16:29  Page 59 Notes to the financial statements 31st March 2007
16  Reserves Share capital Share premium Profit and loss Total
account
£000 £000 £000 £000
At 1st April 2006 as previously reported 2,981 12,656 16,493 32,130
Adjustment for adoption of FRS 20 - - 31 31
'Share-based payment'
At 1st April 2006 restated 2,981 12,656 16,524 32,161
Shares issued under the Deferred Payment 55 1,375 (1,430) -
Share Purchase Plan (note 18)
Other issues of shares during the year 658 15,237 - 15,895
Costs arising from shares issued - (627) - (627)
Share-based payments - - 90 90
Purchase of own shares - - (365) (365)
Sale of own shares - - 180 180
Write down in value of own shares - - 109 109
Retained profit for the year - - 7,081 7,081
At 31st March 2007 3,694 28,641 22,189 54,524
The change in accounting policy as a result of the adoption of FRS 20 (note 18) is reflected in the restated figures as
at 1st April 2006.
Details of own shares held under the Share Incentive Plan are disclosed in note 18.
The profit and loss account for the year ended 31st March 2006 is restated in accordance with FRS 20 as follows:
£000
At 1st April 2005 as previously reported 11,056
Adjustment for adoption of FRS 20 'Share-based payment' 13
At 1st April 2005 restated 11,069
Share-based payments 59
Sale of own shares 128
Write down in value of own shares 76
Retained profit for the year 5,192
Profit and loss account restated 16,524
59 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 60 17  Equity shareholders' funds £000
Profit for the year 9,948
Dividends paid (2,867)
7,081
Issues of shares during the year 15,895
Costs arising from shares issued (627)
Share-based payments 90
Purchase of own shares (365)
Sale of own shares 180
Write down in value of own shares 109
22,363
At 1st April 2006 restated (note 16) 32,161
At 31st March 2007 54,524
18 Employee Share Schemes
Telford Homes Plc Employee Share Option Scheme
The Company operates both an approved share option scheme and an unapproved share option scheme. Awards
under each scheme are made periodically to new employees.
The Company has adopted Financial Reporting Standard 20 'Share-based payment' for the year ended 31st March
2007. As a result of this, a charge is made to the profit and loss account to reflect the calculated fair value of
employee share options over and above the exercise price paid by employees. This charge is calculated at the date
of grant of the options and is charged equally over the vesting period. The corresponding adjustment to reserves is
made directly to the profit and loss reserve.
The Company has used the Black-Scholes-Merton formula to calculate the fair value of outstanding options.
Individual calculations have been performed for groups of share options with differing exercise prices and dates. The
assumptions applied to the Black-Scholes-Merton formula for share options issued and the fair value per option are
as follows:
2007 2006
Expected life of options based on options exercised to date 4 years 4 years
Volatility of share price based on three year share price history 20% 20%
Dividend yield 2% - 4% 4%
Risk free interest rate 4.75% - 5% 4.75%
Share price at date of grant 205p - 337p 138.5p - 167p
Exercise price 205p - 337p 138.5p - 167p
Fair value per option £0.30 - £0.66 £0.20 - £0.24
Financial statements
Annual report and accounts 07 60
R&A Telford 07  4/6/07  16:29  Page 61 Notes to the financial statements 31st March 2007
18 Employee Share Schemes (continued)
The charge calculated up to 31st March 2005 is £43,000 with a corresponding deferred tax asset at that date of £13,000.
The profit and loss reserve is therefore restated by the deferred tax credit of £13,000 from £11,056,000 to £11,069,000.
The charge calculated for the year ended 31st March 2006 is £59,000 with a corresponding deferred tax asset of
£18,000 recognised in the year. The profit and loss reserve is therefore restated by cumulative deferred tax credits of
£31,000 from £16,493,000 to £16,524,000.
The charge calculated for the year ended 31st March 2007 is £90,000 with a corresponding deferred tax asset of
£27,000 recognised in the year.
A reconciliation of option movements over the year ended 31st March 2007 is shown below:
Number Weighted average
000's exercise price
Outstanding at 1st April 2006 1,952 115p
Granted in the year 211 256p
Forfeited in the year (41) 146p
Exercised in the year (634) 85p
Outstanding at 31st March 2007 1,488 147p
Exercisable at 31st March 2007 456 92p
The weighted average fair value of options granted in the year was £95,000 (2006 - £134,000).
The share price at the point of exercise of share options during the year ranged from 223p to 310.5p.
At 31st March 2007 outstanding options granted over 10p ordinary shares were as follows:
Share option scheme Option price Number Dates exercisable
Company approved 143.5p 125,430 24 Mar 2007 to 24 Mar 2014
143.5p 167,240 5 Aug 2007 to 5 Aug 2014
144.5p 83,044 6 Jan 2008 to 6 Jan 2015
138.5p 108,300 17 May 2008 to 17 May 2015
153.5p 254,059 10 Nov 2008 to 10 Nov 2015
167p 107,784 27 Feb 2009 to 27 Feb 2016
205p 102,438 15 June 2009 to 15 June 2016
287p 73,164 11 Oct 2009 to 11 Oct 2016
337p 35,608 26 Jan 2010 to 26 Jan 2017
Company unapproved 60.5p 50,414 5 Mar 2005 to 5 Mar 2012
75p 220,000 1 Oct 2005 to 1 Oct 2012
74.5p 59,732 20 Feb 2006 to 20 Feb 2013
138.5p 50,542 17 May 2008 to 17 May 2015
167p 50,000 27 Feb 2009 to 27 Feb 2016
61 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 62 Telford Homes Plc Share Incentive Plan
During the year ended 31st March 2004 Telford Homes Plc set up a Share Incentive Plan (SIP) for the benefit of all of
the employees of the Company. This SIP has been approved by the Inland Revenue and confers certain tax
advantages for participating employees.
The SIP provides for employees to purchase shares up to a value of £1,500 in each tax year. These shares are known
as 'Partnership shares'. Partnership shares are matched on a one for one basis by 'Matching shares' provided by the
Company subject to the shares remaining in the SIP for a period not less than three years. Dividends are paid on both
Partnership and Matching shares and these are allocated to employees as 'Dividend shares'.
The Company has set up a trust to administer the SIP and to hold shares on behalf of individual employees. This trust is
an entirely separate entity to the Company and is managed by a corporate trustee, Telford Homes Trustees Limited.
The costs associated with the trust are paid for by the Company and the Company finances all share purchases.
The trust has distributed shares as Partnership shares and Dividend shares to employees participating in the scheme.
These shares remain in the trust until such time as an employee withdraws from the SIP. Further shares have been
allocated to employees as Matching shares and the cost of these shares is being written off over the three year
holding period. The charge in the year ended 31st March 2007 is £109,000 (2006 - £76,000).
During the year ended 31st March 2007 the trust acquired 180,000 shares at 197p in May 2006 and a further 3,372
shares at 310p in November 2006. At 31st March 2007 the trust remains interested in 41,180 shares (2006 - nil)
which have not been allocated to employees. The dividends on shares in which the trust has an interest are waived.
Shares held by the SIP are recognised as a deduction from shareholders funds. The value of these shares at 31st
March 2007 was £203,000 (2006 - £127,000). Movements in the profit and loss reserve relating to the SIP are
shown in note 16.
Telford Homes Plc 2006 Deferred Payment Share Purchase Plan
During the year ended 31st March 2007 Telford Homes Plc set up a Deferred Payment Share Purchase Plan (DPSPP)
for the benefit of selected senior employees. An employee benefit trust (the Telford Homes Plc 2006 Employee
Benefit Trust) was set up with Abacus Corporate Trustee Limited acting as trustee.
Participants in the DPSPP are offered a loan by the trustee to enable them to subscribe for a specified number of
shares in the Company at market value. This loan is interest free, repayable on or before the repayment date, which is
normally ten years from the date of the loan or on leaving employment or disposing of the shares. The loan has a
limited recourse such that repayment is limited to the value of the shares on the repayment date. The Company will
lend the trustee sufficient funds to enable the trustee to provide the loans to individual participants. All shares acquired
under the DPSPP will be subject to a three year vesting period and are held by the trustee for the benefit of the
participants. Offers to participants will be made periodically at the discretion of the directors of Telford Homes Plc.
In September 2006 selected employees were offered, and subscribed for, a total of 550,000 shares at the market
value of 260p. These shares were issued on 9th November 2006. On this date the Company provided a loan to the
trustee of £1,430,000 to enable the trustee to provide a loan to each of the participants. This loan is repayable at the
earlier of the sale of the vested shares and November 2016 and has been recognised as a deduction from
shareholders’ funds (note 16).
Financial statements
Annual report and accounts 07 62
R&A Telford 07  4/6/07  16:29  Page 63 Notes to the financial statements 31st March 2007
19  Related party transactions
David Holland purchased an apartment from the Company at the OneStratford development in July 2006. Contracts
were exchanged on 26th July 2006 at a price of £245,000. This purchase was approved by shareholders at the
Extraordinary General Meeting held on 23rd October 2006. Subsequently contracts were exchanged on 11th
December 2006 for a parking space at the same development at a price of £17,500. The Company has received
deposits to the value of £26,250 with the balance due on legal completion. The directors are of the opinion that the
sales were made at open market prices.
In March 2006 Andrew Wiseman purchased an apartment from the Company at the Equinox, Island Gardens
development. The purchase price was £264,600 and completion monies of £237,600 have been received during the
year, settling payment in full. This purchase was approved at a previous Annual General Meeting.
In March 2005 James Furlong purchased an apartment and a parking space from the Company at the Tequila Wharf
development. The combined purchase price was £330,750 and completion monies of £297,675 have been received
during the year, settling payment in full. These purchases were approved at a previous Annual General Meeting.
20  Commitments
The Company had no capital commitments at either 31st March 2007 or 31st March 2006.
Current annual commitments under operating leases are as follows:
Property leases Other leases
2007 2006 2007 2006
£000 £000 £000 £000
Leases which expire:
Within one year - - 17 18
Between one and five years - - 111 119
Over five years 184 184 - -
184 184 128 137
On 23rd August 2005 the Company completed the purchase of the site of the former halls of residence of Queen
Mary and Westfield College in South Woodford. The site was acquired for consideration of 35% of all private sales
proceeds achieved from future development. The private sales proceeds are expected to be in excess of £100 million.
An advance of £10 million has been paid to date and the remainder will be settled directly from the private sales
proceeds over the next few years. A further liability of £1.4 million (2006 - nil) has been accrued in relation to
properties sold where contracts have been exchanged by 31st March 2007.
63 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 64 21 Reconciliation of operating profit to Year ended Year ended
cash flow from operating activities 31st March 2007 31st March 2006
restated (note 18)
£000 £000
Operating profit 16,691 12,847
Depreciation 360 312
Write down in value of own shares 109 76
Share-based payments 90 59
Profit on sale of tangible fixed assets (34) (37)
Increase in stocks and work in progress (24,627) (16,971)
Decrease (increase) in debtors 3,323 (19,402)
Increase (decrease) in creditors 4,948 (2,824)
Cash flow from operating activities 860 (25,940)
The prior year balances have been reanalysed for comparative purposes.
22 Analysis of change in net debt At 1st Non-cash At 31st 
April 2006 Cash flows changes March 2007
£000 £000 £000 £000
Cash at bank and in hand 7,211 10,406 - 17,617
Bank loans (68,953) (4,257) - (73,210)
Hire purchase liabilities due within one year (95) 123 (141) (113)
Hire purchase liabilities due after more than one year (75) - (21) (96)
(61,912) 6,272 (162) (55,802)
Non-cash changes comprise inception of finance leases and transfers between hire purchase liabilities due within one
year and hire purchase liabilities due after more than one year.
Financial statements
Annual report and accounts 07 64
R&A Telford 07  4/6/07  16:29  Page 65 Notes to the financial statements 31st March 2007
23  Derivatives and other financial instruments
The Company's financial instruments comprise loan and overdraft facilities and various items such as trade debtors
and creditors that arise from its operations. The Company uses loan finance, all of which is denominated in sterling, to
acquire development land and undertake site construction. It does not enter into any derivative transactions and has
no exposure to exchange rate movements as its trade takes place entirely within the United Kingdom.
At 31st March 2007 the Company had unutilised overdraft facilities of £2.5 million at 1.5% above base rate (2006 -
£2.5 million). The facilities are due for review before April 2008.
In addition the Company has a credit line facility with Allied Irish Bank in respect of site development loans of £50
million, including joint arrangement funding, with interest charged at rates of up to 1.75% above base rate. A total of
£25.2 million was unutilised at 31st March 2007. This facility is due for review by April 2008. The Company has a
further facility with The Royal Bank of Scotland of £128 million at similar rates, specific to certain sites and including
joint arrangement funding, due for review by April 2008. A total of £79.6 million was unutilised at 31st March 2007.
Apart from hire purchase liabilities all of the Company's financial liabilities fall due within one year.
The fair value of the Company's financial assets and liabilities at 31st March 2007 is equal to the carrying value
stated in the balance sheet at that date.
65 Annual report and accounts 07
R&A Telford 07  4/6/07  16:29  Page 66 WA N S T E A D 
FLAT S 
FA I R
WA T
HOSPITAL  
HILL WOOD 
W A L THAMSTOW 
MARSHES 
EPPING FOREST 
BUCKHIRST 
HILL 
M11 
M11 
 
4 
 
 
  
  
     R O U N D W A Y            B R U C E G R O V E 
                H I G H R O A D A 1 0 
 
 
 
 
  
G R E A T C A M B R I D G E R O A D A 1 0 
G R E E N L A N E S 
    
 
 
 
            W O O D F O R D N E W R O A D 
            H I G H R O A D   E P P I N G N E W R O A D  
 
  
F O R E S T R O A D 
     B R O A D    L A N E        
         
WA T E RME A D W AY  
 
 
           M E R I D I A N W AY 
F O RE S T R E E T  
              H E R TF O R D R O A D  
H I G H R O A D 
      H E R M ON H I L L 
 
          
C H I G W E L L R O A D 
 
 
 
H I G H R O A D   
 
 
A1 2 
 A 1 2  E A S T E R N A V E N U E 
            H E D G E L A N E 
 
L O R D S H I P L A N E 
               W E ST G R E E N R O A D 
S T A T I O N R O A D 
R A N G E R S R
           H O E S T R E E T 
       C H I N G F O R D R O A D  O L D C H U R C H ROA D 
 
 
 
C R A N B R O O K R O A D 
 
 H A I N A U L T R O A D 
               A 1 3        A L F R E D S W AY 
H I G H R O A
              C R A N B R O O K R O A D 
 
                 C R A N B R O O K R O A D 
HIGH S T R EET S O U T H H I G H S T R E E T N O R T H 
                R O M F O R D R O A D 
S H E A D 
            K I N G S R O A D 
 
W H I T E H A L L R O A D 
W O O D F O R D R D  
     H I G H R O A D 
    A 4 0 6 N O R T H C I R C U L A R R O A D 
                S T E R L I N G W AY      A N G E L R O A D           L E A V A L L E Y V I A D U C T          A 4 0 6                       S O U T H E N D R O A D 
 
A 4 0 6 
 
 
 
 
 
 
S O U T H W O O D F O R D R O A D  A 4 0 6                    
B A R K I N G R E L I E F R O A D     A 4 0 6 
 A 4 0 6  
R O YA L D O C K S R O A D 
N E W R O A D  
 
C H I N G F O R D L A N E 
LONDON 
CITY 
AIRPORT 
RIVER THAMES 
R O YA L A L B E R T W AY 
  A L B E R T WAY 
A 2 0 5   J O H N W I L S O N S T R E E T         A C A D E M Y R O A D 
 
FINSBU RY 
P ARK 
W ANSTEAD 
GOL F 
COURS E 
T H A 
W O OLWICH FER RY 
M E S 
F L O O D 
B A R R I E R 
R I V E R   L E A 
WEST 
R ESERV OI R 
EAST 
RESERV OIR 
B R I D G E 
F A R R I N G D O N R D . FA R R I N G D O N S T 
W A T E R L O O R D . 
A 1 S T R E E T 
G R O V E L O R D S H I P R D . 
A D 
G R E E N 
B 1 6 7 
R O A D 
B U S H A 1 1 4 R O A D 
M A R K H O U S E A 1 0 0 6 R D . C H U R C H A 1 0 0 6 R O A D 
S H O O T E R S H I L L R O A D A 2 
R O C H E S T E R W A Y R E L I E F R D . 
HACKNEY HACKNEY 
SHOREDITCH SHOREDITCH 
SOUTHWARK SOUTHWARK 
LEWISHAM LEWISHAM 
WANSTEAD WANSTEAD 
CHINGFORD CHINGFORD 
EDMONTON EDMONTON 
TOTTENHAM TOTTENHAM 
HARRINGAY HARRINGAY 
STOKE STOKE 
NEWINGTON NEWINGTON 
STAMFORD STAMFORD 
HILL HILL 
TOTTENHAM TOTTENHAM 
HALE HALE 
HIGHAM HIGHAM 
HILL HILL 
OD WOOD 
EN GREEN 
LOUGHTON 
CHIGWELL CHIGWELL 
FAIRLOP FAIRLOP 
WOODFORD WOODFORD 
WOODFORD WOODFORD 
BRIDGE BRIDGE 
REDBRIDGE REDBRIDGE 
WOODFORD WOODFORD 
GREEN GREEN 
GREENWICH GREENWICH 
STEPNEY STEPNEY 
BOW BOW 
LEYTON LEYTON 
WEST HAM WEST HAM 
BECKTON BECKTON 
RESERVOIRS 
WILLIAM 
GIRLING 
RESERVOIR 
R   L E A NAVIGATION 
 
 
HIGH ROAD            LEYTON                       HIGH RD 
     
E13 
E15 
E3 
E11 
N16 
N15 
N13 
N9 
N17 
N18 
E4 
IG9 
IG7 
IG6 
IG5 
IG8 
E18 
IG4 
IG11 
E6 
E16 
N5 
N1 
E2 
E2 
E1 
EC1 
EC4 
EC3 
E14 
DOCKLANDS D O C K L A N D S 
CITY OF C I T Y O F 
LONDON L O N D O N 
SE10 
SE7 
SE16 
SE8 
SE1 
SE11 
SE17 
EC2 
E5 
E9 
E7 
E10 
E17 
HACKNEY HACKNEY 
NEWHAM NEWHAM 
TOWER HAMLETS TOWER HAMLETS 
SOUTHWARK SOUTHWARK 
LEWISHAM LEWISHAM 
GREENWICH GREENWICH 
WALTHAM  FOREST WALTHAM  FOREST 
ENFIELD 
WALTHAMSTOW WALTHAMSTOW 
ILFORD ILFORD 
BARKING BARKING 
DOCKLANDS DOCKLANDS 
ISLINGTON ISLINGTON 
DL R 
DL R 
DL R DL R 
Metro East 
Gladstone House 
Greenwich site
St Anne’s Row
Cosmopolitan  
Apartments, 
Enfield 
Queen Mary’s Gate, 
South Woodford 
Station Estate, 
South Woodford 
Market Place, 
Romford 
Bethnal Green Rd 
Murray Grove 
Merchants’ Quarter 
Icona 
OneStratford 
Decorum 
Leyton Orient FC
Chepstow 
SoBow
Lanrick Road 
Lesney 
CANARY CANARY
WHARF WHARF
STRATFORD STRATFORD
Development guide 2007
Annual report and accounts 07 66
Current and future developments showing proximity to three key areas of growth and employment -
The City, Canary Wharf and Stratford
R&A Telford 07  4/6/07  16:29  Page 67 Telford Homes Plc
First Floor, Stuart House,
Queensgate, Britannia Road,
Waltham Cross, Herts, EN8 7TF
Tel: 01992 809800
Fax: 01992 809801
www.telfordhomes.plc.uk
R&A Telford 07  4/6/07  16:29  Page 68