Annual Report & Accounts 2006 Contents
2 Financial highlights
3 Operational highlights
4 Chairman’s statement
6 Chief Executive’s review
14 Operational review
20 Financial review
26 Board of directors
28 Directors’ report
31 Statement of directors’ responsibilities
32 Independent auditors’ report
34 Consolidated proﬁt and loss account
35 Consolidated reconciliation of
movements in shareholders’ funds
35 Statements of movements in reserves
36 Consolidated balance sheet
37 Company balance sheet
38 Consolidated cash ﬂow statement
38 Notes to the consolidated 
cash ﬂow statement
40 Notes to the ﬁnancial statements
54 Proforma unaudited consolidated
balance sheet
55 Five year record
56 Shareholder information Our ethos
The creation of value through
active entrepreneurial
management, risk-controlled
development and co-investment
in commercial property assets.
1 Annual Report & Accounts 2006 Halladale Group plc 2
Financial highlights
2006 2005 Increase
Proﬁt before tax (£m) 6.29 3.92 +60%
Dividends in respect of the year 3.8 2.9 +31%
per ordinary share (pence)
Basic earnings per ordinary 10.61 10.42 +2%
share** (pence)
Proforma triple net asset value 121.6 93.3 +30%
per ordinary share* (pence)
02 03 04 05 06
1.15
1.69
2.61
3.92
6.29
Proﬁt before tax
(£m)
02 03 04 05 06
5.34
7.21
9.99
10.42
10.61
Basic earnings per
ordinary share** (pence)
02 03 04 05 06
1.25
1.6
2.1
2.9
3.8
Dividends in respect of the
year per ordinary share (pence)
02 03 04 05 06
63.65
68.41
82.46
93.3
121.6
Proforma triple net asset value
per ordinary share* (pence) 1
2 3
4
5
6
7
8
1
2
3
4
5
6
7
8
9
Halladale Group plc  Annual Report & Accounts 2006 3
Operational highlights
2006 2005 Increase
Total portfolio under management* (£m) 632 450 +40%
Total transactions in portfolio 455 347 +31%
under management* (£m)
Co-investment portfolio under 529 388 +36%
management* (£m)
02
1. South East: 32%
2. London: 20%
3. Scotland: 11%
4. North: 11%
5. Midlands: 9%
6. South West: 7%
7. Yorkshire and
Humberside: 5%
8. East Anglia: 4%
03 04 05 06
116
145
205
450
632
Total portfolio under
management* (£m)
Portfolio split by sector 2006 Portfolio split by sector 2005
02 03 04 05 06
82
120
155
347
455
Total transactions in portfolio
under management* (£m)
1. South East: 29%
2. London: 5%
3. Scotland: 9%
4. North: 20%
5. Midlands: 13%
6. South West: 9%
7. Yorkshire and
Humberside: 5%
8. East Anglia: 9%
9. Wales: 1%
* The calculation of these numbers, and deﬁnition of portfolio under management as used throughout the annual report and accounts, 
is contained in the Financial Review.
** This is stated after accounting for the substantial increase in issued share capital in May 2005. Annual Report & Accounts 2006 Halladale Group plc 4
Chairman’s statement
This has been another year 
of remarkable progress for
Halladale. 
Fred Shedden
Chairman
Proﬁt before tax for the year to 30 April 2006 increased by 60% to
£6.29m, basic earnings per share grew by 2% to 10.61p and, based 
on the pro forma unaudited balance sheet set out on page 54, triple 
net asset value per share rose by 30% to 121.6p. The increase in basic
earnings per share is stated after accounting for the substantial increase
in share capital following the issue of new shares in May 2005. Further
information about these ﬁgures is contained in the Financial Review.
These excellent results enable the continuation of our progressive
dividend policy and the Board is recommending a ﬁnal dividend of 2.4p
per share. Taken together with the interim dividend of 1.4p per share
paid on 14 February 2006 the total dividend in respect of the year to 
30 April 2006 will therefore be 3.8p per share, an increase of 31% over
last year’s ﬁgure. Subject to shareholder approval at the Annual General
Meeting the ﬁnal dividend will be paid on 14 September 2006 to
shareholders on the register on 21 July 2006. The new shares issued 
in May of this year will not rank for the ﬁnal dividend.
As you will see from the Chief Executive’s Review this has been 
another year of very high activity with aggregate value of acquisitions
and sales exceeding £450m. At the year end the total portfolio under
management, including co-investment projects of £529m (2005 –
£388m), was £632m on a pro forma basis. When I ﬁrst reported to 
you as chairman in 2001 the comparable ﬁgure was £60m which gives 
a dramatic indication of the growth which has taken place in Halladale
during the last ﬁve years. 5
“This has been another year of
very high activity with aggregate
value of acquisitions and sales
exceeding £450m.”
On 23 May 2006 we announced a successful placing and subscription 
of new ordinary shares and convertible unsecured loan stock which
raised a total of £29.1m after expenses. A combination of new and
existing investors participated in this capital raising exercise, broadening
our growing institutional shareholder base. The new funds will enable
Halladale to accelerate its expansion plans across all key areas of 
the business.
As always I hope that shareholders will join us at this year’s Annual
General Meeting which will take place in Edinburgh on 12 September
2006. My colleagues and I welcome the opportunity to meet
shareholders and to answer their questions. As in previous years there
will be a presentation about the Company’s activities following the
conclusion of the formal business of the Annual General Meeting.
I would like to thank my Board colleagues for their continued support
and on your behalf to express my thanks to all the Halladale team. 
They are a fantastic bunch of people whose dedication and commitment
has again been outstanding. We are all committed to delivering good
shareholder value and I am conﬁdent that we can continue to do so.
Fred Shedden
Chairman Annual Report & Accounts 2006 Halladale Group plc 6
Chief Executive’s review
This has been another year 
of strong growth for Halladale
driven by high levels of activity
and expansion across all key
areas of our business. 
Total transactions in the portfolio under management increased by 31%
to £455m during the year under review and the total portfolio under
management increased by 40% to £632m on a proforma basis at the
year end. Signiﬁcantly, we have expanded our co-investment fund
management activities through the launch of Rynda Property Investors
and just after the year end we announced a well supported fund raising
of £29.1m, net of expenses, our largest to date. 
The year ended coincided with the ﬁfth anniversary of the Company’s
admission to AIM. The growth and transformation of Halladale over that
time, from an initial market capitalisation of just under £10m to almost
£100m today on a fully diluted basis, has been truly remarkable and
illustrates just how far the Company has come. During that period the
Company has consistently increased earnings and implemented a
progressive dividend policy.
These ﬁnancial results reﬂect another year of strong growth in all our 
key performance indicators. We are particularly pleased with signiﬁcant
increases in both proﬁt before tax and the total dividend for the ﬁfth
year in a row since our admission to AIM and we believe this should
continue to justify our rating as an asset backed earnings business. 
The total return on equity (see page 23) on a proforma basis was just 
over 26% for the year.
In the UK, property as an asset class produced a total return of 19.1% 
in the calendar year 2005 driven mainly by capital growth fuelled by
continued strong investor demand. The retail sector’s period of out-
performance has probably come to an end for the time being and we
have made further strategic acquisitions in the ofﬁce sector which we
expect to out-perform over the coming cycle.
Fund raising
On 23 May 2006 we announced our largest fund-raising to date of
£29.1m, net of expenses, through an issue of both new ordinary shares
and convertible loan stock. This brings the total new capital raised in the
past three years to £57.4m net of expenses and takes our fully diluted
market capitalisation to almost £100m. These new funds will be used 
to expand all key areas of operations; asset management, development
and co-investment fund management in terms of both number and 
size of projects.
Our shareholder base has been signiﬁcantly broadened through our
recent fund raisings and I would like to welcome new shareholders 
as well as thanking existing shareholders for their continued support.
Investors who acquired shares in Halladale on admission to AIM in April
2001 and who have held them since then have received a total annual
return of over 28% in the period to 30 April 2006 based on the share
price at that date and dividends paid since admission.
The funds raised in 2004 and 2005 totalling £28.3m net of expenses
enabled us to expand our activities across all fronts. Our co-investment
portfolio has grown from £162m two years ago to £529m at the year
end through our ability to co-invest £13.5m of our own equity alongside
£111m of project equity raised from our co-investment partners. Our
directly owned properties grew from £43m to £103m over the same
period and we have also signiﬁcantly expanded our risk-controlled
development programme. 
Business model
Our focused business model of asset management, development and 
co-investment fund management provides not only a growing and
diversiﬁed revenue stream but also gives us ﬂexibility to react quickly to
changing market conditions. Our total portfolio under management of
£632m at the year end was comprised of £274m in asset management,
£107m in development and £251m in co-investment fund management.
Co-investment continues to be an important part of our business 
model and at the year end accounted for 84% of the total portfolio
under management. 
Our opportunistic approach is also an important part of our business
model and early in 2005 we took the decision that the retail sector’s
period of out-performance was coming to an end and we began to
realign the portfolio to focus more on identifying attractive asset
management and development opportunities in the ofﬁce sector. We
have moved quickly and at the year end ofﬁces accounted for 26% of
the total portfolio under management compared to 11% a year earlier.
This former percentage increases to 34% following the acquisition of
Hammersmith Grove immediately after the year end and, on that basis,
but excluding the longer term CReAM and Nelson retail funds, ofﬁces
account for 51% of the remaining portfolio. There has been a similar
geographical re-positioning of our portfolio towards London and the
South East.
At this stage in the cycle the ability to create value will increasingly be
found in more complex asset management and development projects
that require the range of skills and experience that we possess. We 
have signiﬁcantly expanded our risk controlled development programme
which we expect to make a growing contribution to proﬁt in the
medium term. At the year end our development programme had an
estimated value on completion in excess of £500m compared to £260m
the previous year. Our stronger balance sheet permits us to access larger
projects which bring greater economies of scale and our average project
size has increased from £8m last year to £10m at the year end.
Our co-investment fund management activities continued to grow
during the year under review. Both the CReAM and Nelson funds are
now fully invested and at the year end the properties were valued at
£221m and £30m respectively. The launch of these two funds ﬁrmly
established our co-investment asset management platform and in
September last year we created a co-investment fund management
platform through the launch of Rynda Property Investors in which
Halladale has a majority stake. Rynda will operate as an independent 
FSA regulated co-investment manager of real estate funds and expects
to launch its ﬁrst fund later this year. Michael Walton, who has a
minority stake in Rynda, joined in September as Chief Executive of 
Rynda and I extend a warm welcome to Michael and look forward 
to working with him in developing the Rynda business.
“The funds raised in 2004 and
2005 totalling £28.3m net of
expenses enabled us to expand
our activities across all fronts.” Halladale Group plc  Annual Report & Accounts 2006 7
Prospects
We expect strong investor demand to continue to support the UK
property investment market, although we believe that there is limited
scope for further hardening of yields. Whilst the trend in UK interest
rates may still be upwards, any further increases are likely to be modest.
These factors and the consensus forecast for growth in the UK economy
will provide a stable environment for the UK property market.
Property will therefore remain an attractive asset class, but future
performance will depend even more on the ability to deliver and
implement active asset management and development strategies. 
We believe that the ofﬁce sector, particularly in London and the 
South East, will provide better prospects for rental growth over the 
next couple of years and we continue to identify attractive opportunities
within that sector. Since the year end we have completed our largest
transaction to date with the £74m acquisition of an ofﬁce project in
Hammersmith with one of our existing co-investment joint venture
partners. Our opportunistic approach means we will continue to 
identify opportunities across all sectors, including retail where we 
have accumulated a wealth of experience over the past few years.
The likely introduction of UK REITS in January 2007 will provide
signiﬁcant opportunities for the UK property industry and they should
become an attractive vehicle for the long term ownership of most types
of property assets. REITS should also widen the investor base providing
further support to the property investment market. We are currently
reviewing with our advisors the opportunities for Halladale in a post 
REIT environment. 
To date we have applied our business model entirely on the UK market.
This is now beginning to change. We recently began preparing the
ground work to enable us to identify opportunities in mainland Europe,
both directly and with existing co-investment partners, to expand the
Halladale business model into the continent.
We are very fortunate at Halladale to have the quality and strength 
of our management team and it is upon their commitment and
professionalism that the success of the Company is based. I would like to
thank all of our team members, and our dedicated professional advisors,
for their hard work and valuable contribution to this year’s results.
Looking ahead we have an exciting portfolio of asset management and
development projects and, with our increased ﬁnancial resources as well
as our long established co-investment partners, I remain conﬁdent we
will continue to deliver attractive returns to our shareholders.
David Lockhart
Chief Executive
David Lockhart
Chief Executive
Crown House, Hammersmith
Acquired in February 2006
“Future performance will depend
even more on the ability to
deliver and implement active
asset management and
development strategies.” Asset management
The Group’s asset management strategy
is to identify opportunities to add value
to properties through tenant engineering,
the renewal and review of leases,
refurbishment and redevelopment.
Aldermary House, Queen Street, London EC2 is one example
of the Company’s asset management activities. Halladale
Ventures Ltd., the Group’s joint venture with Bank of
Scotland, acquired the property for £25.6m in November
2005. Aldermary House comprises 45,000 sq. ft. of ofﬁces
arranged over eight ﬂoors with four retail units of 12,000 sq.
ft. on the ground ﬂoor. The passing rent at purchase totalled
£1.64m on a variety of lease terms with 6,000 sq. ft. of
vacant space, and the recently refurbished eighth ﬂoor let 
at a higher rental rate than the rest of the building.
The asset management strategy has been put into action,
with the vacant fourth ﬂoor currently being refurbished to
the same standard as the eighth and a marketing programme
underway to let the space. It is anticipated that a programme
of rolling refurbishment when space becomes vacant will
signiﬁcantly increase the rent roll. The increasing level of
letting interest in the London ofﬁce market should provide
sufﬁcient demand for the completed product.
David Petrie
Stuart Duncan
Alistair McGill
8 Aldermary House, London
Aldermary House, London
9 Newport, Isle of Wight
Newport, Isle of Wight
10 11
Development
The Group adopts a risk-controlled
development strategy, minimising 
up-front cost whilst maximising value.
The strategy involves providing seed
capital for potential developments and
obtaining planning consent and/or 
pre-lettings prior to taking a decision
on whether to proceed either on
balance sheet or in joint venture.
In March 2003 the Company acquired an option to acquire
the bus station at Newport, Isle of Wight from the local bus
operator. The option included the bus station along with an
ofﬁce building let until 2006 to the Inland Revenue at a rent
of £65,000 per annum. The Company negotiated a planning
consent for the demolition of the bus station to construct
four retail units over 60,000 sq. ft. While this planning
process was being pursued pre-letting agreements were
signed with tenants for all four units, namely Hennes,
Peacocks, New Look and Sportsworld. In this way,
development risk had been signiﬁcantly reduced when 
the option to acquire was exercised in April 2005.
Construction of these units is due to complete imminently
and in the interim a forward sale of the completed
development has been agreed with Clerical & Medical at 
a price of £14.2m, further reducing risk. This sale will be
completed on practical completion of the development. 
The ofﬁce building, now vacant, has consent for
refurbishment and conversion to retail use. Negotiations 
are being ﬁnalised with a tenant, whereupon refurbishment
will commence.
Allan Lockhart
Matthew Rhodes
Bryan Sherriff Gravesend Shopping Centre
Grays Shopping Centre, Essex
Erdington Shopping Centre
12 Co-investment fund management
The co-investment fund management
business comprises both co-investment
in funds where Halladale is the asset
manager and the establishment of real
estate co-investment funds through
Rynda. In the former category, both
CReAM and Nelson were fully invested
in the year.
In February 2005 Gray’s Shopping Centre, Essex, became the
third acquisition in the CReAM fund. Acquired for £34.1m at
an initial yield of 6.25%, the Centre provides 215,000 sq. ft.
and comprises 56 tenancies at a typical rental of £42.50 per
sq. ft. Through active management the tone of rents have
been increased to £47.50 and the tenant mix and longevity
of income improved by the introduction of new multiple
tenants to the Centre.
All 12 shopping centres in CReAM provide value
enhancement opportunities through increasing generally
modest rental rates, and increasing lettable areas through
refurbishment. In Nelson, the mixed portfolio of retail, ofﬁce
and industrial properties provide similar opportunities on a
smaller scale. Over the last 12 months acquisition activity has
focussed on increasing the funds’ exposure to the industrial
and ofﬁce sectors.
Michael Walton
Alison Robertson and John McLaughlin
13 Annual Report & Accounts 2006 Halladale Group plc 14
Operational review
Market overview
2005 was another strong year for the UK property market with a total
return of 19.1% (2005 – 18.3%) as reported by IPD and shown at Table1
below. A full analysis of the IPD ﬁgures reveals that equities are the top
performing asset class over 3 years whereas property outperformed
equities over 5 and 10 years.
Table 1 – IPD Return for Year to 31 December 2005
Total returns Rental growth Capital
(%) (%) (%)
All property 19.1 2.7 12.8
Retail 18.9 3.9 13.1
Ofﬁce 20.3 1.9 13.4
Industrial 18.4 1.1 11.1
The majority of the total return has been generated by capital growth,
driven once again by the weight of money seeking to access the
property market. This capital demand has not yet diminished, although 
it is difﬁcult to foresee it continuing at last year’s level. As a result, rental
growth can be expected to become more signiﬁcant to total returns.
The improved performance of the ofﬁce sector is a particularly signiﬁcant
development and this trend is likely to continue over the next few years
as rents improve in the ofﬁce sector.
“One of Halladale’s key strengths 
is its ability to acquire assets in
any sector where it perceives
potential for outperformance.”
Ken Lindsay
Property Director
Tudor Street, London
Acquired in September 2005 Halladale Group plc  Annual Report & Accounts 2006 15
Halladale portfolio
The total portfolio under management has increased by 40% from
£450m to £632m and there has been a distinct shift towards the ofﬁce
sector from 11% of the portfolio in 2005 to 26% in 2006. Immediately
after the year end the £74m acquisition of ofﬁces at Hammersmith
Grove further emphasised this shift and, if properties held in longer-term
funds (CReAM and Nelson) are excluded, the current percentage holding
of the portfolio in ofﬁces increases to 51%.
The Halladale portfolio has been successfully re-positioned to take
advantage of the expected outperformance of the ofﬁce sector reﬂecting
one of Halladale’s key strengths which is its ability to acquire assets 
in any sector where it perceives potential for such outperformance.
However, the Company continues to pursue real opportunities to add
value across all sectors.
The portfolio continues to be split between properties held for asset
management (both directly owned and in co-investment vehicles),
longer-term fund management properties, and properties held for
development. As at 30 April 2006, the value of properties held for 
asset management totalled £274m (2005 – £295m); longer-term fund
management properties totalled £251m (up from £90m in 2005); 
and the value of properties held for development was £107m 
(£65m in 2005).
Acquisition and disposal transactions
In terms of transactions, this was a record year for Halladale, with total
acquisitions of £277m, up from £256m in 2005, and total disposals of
£178m, up from £91m the previous year.
Directly owned Co-investments Total
£m £m £m
Acquisitions
Ofﬁces 27 73 100
Shopping Centres – 132 132
Other retail acquisitions 5 20 25
Industrial – 8 8
Acquisition costs 2 10 12
Total acquisitions 34 243 277
Directly owned Co-investments Total
£m £m £m
Disposals
Ofﬁces 2 2 4
Shopping Centres 7 111 118
Other retail disposals 6 31 37
Industrial – 12 12
Other – 7 7
Total disposals 15 163 178
Total transactions 49 406 455
Asset management
As at 30 April 2006 the value of properties held for asset management
totalled £274m (2005 – £295m). These properties are either directly
owned by Halladale or held in co-investment joint ventures with our
investment partners.
Directly owned assets
It has been an active year for Halladale’s directly owned portfolio, with
the Company utilising some of the additional funds raised in May 2005
as well as recycling equity from property disposals.
In the City of London, the Company purchased an ofﬁce in Moorgate for
£8m. Planning consent is being sought to create an additional ﬂoor and
change the ground ﬂoor to retail use. Rental levels will beneﬁt from the
improving occupational market.
In Edinburgh a vacant ofﬁce building of 48,000 sq. ft. was acquired for
£10m. The building is being reconﬁgured for multiple lettings and there
is good tenant demand. The acquisition includes adjacent land with
potential for further development.
Finally Halladale acquired a retail investment in Wellingborough for £4m,
where there are good prospects for rental growth. 
A number of smaller properties in the portfolio were sold, including 
two retail units in Ipswich and Didcot for £5m, and an ofﬁce building 
in Reading for £2m.
The retail centre in Farnworth, Bolton was sold for £7m, following
completion of two additional retail units and improvement of the 
rental tone.
1. Shopping centre: 54%
2. Industrial: 1%
3. In-town retail: 11%
4. Out of town retail: 8%
5. Ofﬁce: 26%
1
2
3
4
5
Sector analysis by value 2006
1
2
3
4
5
1. Shopping centre: 63%
2. Industrial: 3%
3. In-town retail: 16%
4. Out of town retail: 7%
5. Ofﬁce: 11%
Sector analysis by value 2005 Annual Report & Accounts 2006 Halladale Group plc 16
Operational review continued
Assets held in co-investment joint ventures
Bank of Scotland
In the City of London, Aldermary House, Queen Street EC2 was acquired
for £26m. This multi-let ofﬁce of 56,000 sq. ft. comprises eight ﬂoors,
one of which is vacant and currently being refurbished for re-letting.
Future lease expiries provide the opportunity for further refurbishment to
establish a higher rental tone in an improving market. Crown House and
Kvaerner House in Hammersmith were acquired for £46m. Extending to
117,000 sq. ft., the ofﬁces are fully let to tenants such as Regis, AOL,
and EMI Records. We expect to be able to increase the rent roll through
rent reviews and refurbishment on lease expiries.
Practical completion has now been achieved at The Bay Tree Shopping
Centre in Brentwood where ﬁnal lettings are being concluded. The
vacant ofﬁce building above the centre was sold with the beneﬁt of
planning consent to a house builder at a price of £7m following
completion of the enabling works.
A number of smaller properties, totalling £21m over the year, were sold
in line with the original strategy.
Citigroup Property Investors
There were two major shopping centre disposals during the year. 
Bowen Square Shopping Centre in Daventry was sold for £22m
following completion of redevelopment works to extend the lettable
area and a successful increase of rental levels. The sale of Cockhedge
Retail Park in Warrington for £54m, taking advantage of strong demand
for shopping centres, generated a signiﬁcant proﬁt some four years
ahead of business plan.
Together with the sale of a small retail warehouse in Norwich, these
disposals concluded a successful and very proﬁtable series of joint
ventures with Citigroup and their private client investors. The future
relationship is focused on longer-term asset management funds.
Tyburn Lane Private Equity (formerly Anglo Irish Private Equity)
Further asset enhancement initiatives have been pursued at both Queen
Street Shopping Centre, Darlington and Queens Square Shopping, West
Bromwich. In both cases there is signiﬁcant redevelopment and
refurbishment potential (see Development section, below). At West
Bromwich, on-going discussions with the head landlord, Sandwell
Borough Council, are focused on re-gearing the existing head lease.
The ofﬁce element of the Sunbury property is beneﬁting from the
improved ofﬁce market. As the lease expiry approaches, Halladale 
is pursuing the opportunity for a substantial refurbishment. Asset
management initiatives have been implemented to increase the tone 
of the rents in the retail space.
In Great Yarmouth, our asset management programme was largely
completed and we took advantage of the strong investment market 
to sell the centre for £33m, comfortably in advance of the timing 
and projected revenue forecast in the business plan.
After the end of the year we completed Halladale’s largest single
property purchase, for £74m, at Hammersmith Grove. The property
extends to 202,000 sq. ft. of ofﬁces and provides scope for asset
management and a major refurbishment for re-letting into an improving
occupational market.
Kodak Pension Plan
At Weybridge one of the buildings was sold to an owner occupier for
£2m. With the remaining building the leases have been renegotiated
and the property is currently on the market. In Swindon discussions
continue with the tenant regarding the forthcoming lease expiry.
At Becket House, Cheapside a number of occupational lease regearing
opportunities are being pursued as well as negotiations with the head
landlord on regearing the head lease.
The retail warehouse let to MFI in Scunthorpe was sold for £5m, taking
advantage of the strong market. 
Development
At 30 April 2006 the value of properties held for development was
£107m, up from £65m in 2005. The potential completed value of 
these projects totals approximately £500m in twelve projects. Of these
projects, six are full developments at various stages, while the balance
are redevelopment opportunities at properties held within the asset
management portfolio.
Full development projects
Cumbernauld, Westway Retail Park
The land for the ﬁrst phase of the retail park was acquired for £22m
following completion and onward sale of the production unit built for
OKI. Construction is well progressed on the 120,000 sq. ft. park, with
46,000 sq. ft. pre-let to B&Q. Three further lettings are well advanced
and completion of the building is expected early next year.
The project is carried out in partnership with the Carlyle Group.
Dalgety Bay
Planning permission was granted at appeal for the redevelopment 
of this ofﬁce/industrial building for 37,000 sq. ft. of new retail space. 
The majority of this space is pre-let to Asda on a long lease.
Glasgow, Cochrane Square
In Glasgow’s Merchant City construction works are now well progressed
after some delays caused by ground problems and completion is due in
early 2007. Seventy-six out of the eighty-four ﬂats are pre-sold and these
sales will be realised on completion of the building. During the year we
sold one of the four retail units, and let a second unit to Tesco. There is
strong tenant interest in the remainder of the retail units.
Glasgow, Shaftesbury House
Planning consent has now been achieved to provide 57,000 sq. ft. of
new ofﬁces and retail space in this prime location in central Glasgow.
Options are being reviewed on both pre-letting and funding for a site
start next year.
“Whilst office activity will be
pursued, our opportunistic
approach will also continue 
to provide retail and other
opportunities where we 
can utilise our proven asset
management and development
skills to add value.” Halladale Group plc  Annual Report & Accounts 2006 17
London EC4, Tudor Street
The Company secured an important site in Tudor Street in Midtown,
London. Contracts have been exchanged with completion delayed until
the existing occupier vacates the property (in June 2007 at the latest). 
In the meantime a planning application has been submitted to increase
the ﬂoor area and early marketing will commence for a pre-let.
Improving site and rental levels for central London ofﬁces will increase
the value of this property.
Isle of Wight, Newport
The construction of this development is well progressed and all four
units have been pre-let to Hennes, New Look, Peacocks and Sportsworld.
The development has now been pre-sold to Clerical Medical for £14m
and this sale will be recognised once practical completion has been
achieved, expected to be in August 2006.
The ownership also includes the adjoining property and during the 
year an additional property has been acquired. Detailed discussions 
are being held with potential tenants to pre-let and the next phase 
of development will commence if these discussions are successful. 
Potential developments from within the asset management
portfolio
The Company is progressing a number of development projects through
its joint venture with Tyburn Lane Private Equity. At Queens Square
Shopping Centre in West Bromwich, planning consent has been
submitted for a major refurbishment and 100,000 sq. ft. extension. 
At Queen Street Shopping Centre, Darlington, Halladale has agreed
terms with an adjoining land-owner to jointly pursue a substantial
development of some 300,000 sq. ft. As part of the acquisition of
Hammersmith Grove there is 45,000 sq. ft. of vacant space which 
will be substantially refurbished for re-letting. 
Becket House at Cheapside, London is held jointly with Kodak Pension
Plan on a long ground-lease. Discussions are on-going with the head
landlord to pursue a complete redevelopment, creating 120,000 sq. ft.
of new-build ofﬁce and retail space. A substantial refurbishment of the
existing ofﬁce space is also being progressed, and full consideration will
be given to both options.
Elsewhere in the portfolio, a planning application has been lodged 
for a new retail and residential development to replace the existing
supermarket at Bury St. Edmunds. At Market Walk, Bingley, a planning
application has been lodged to substantially redevelop the existing
shopping centre.
Co-investment fund management
As at 30 April 2006 the value of properties held in co-investment fund
management totalled £251m (2005 – £90m).
CReAM
The CReAM fund is now fully invested having acquired a further nine
shopping centres during the year, to increase the total number of centres
held in the fund to twelve. All the properties fulﬁl key criteria of having
low rental levels, are in locations that are believed to be undervalued,
and provide a number of asset management opportunities where value
can be enhanced. The new centres are in Birmingham, Fareham,
Gravesend, Grays, Leeds, Leighton Buzzard, Ross on Wye, Wallsend, 
and Waterlooville.
Halladale Nelson Limited Partnership
The fund completed three purchases during the year; two industrial
investments, one in Hoddesdon and the other in Basingstoke and 
an ofﬁce building in Windsor. The fund is now almost fully invested, 
and we are looking at sales opportunities for properties where asset
management strategies have been completed.
Future activities
The portfolio under management has now increased to £632m, and 
the average lot size has grown to £10m (2005 – £8m). It is likely that 
this trend will continue, providing further economies of scale.
The last twelve months have also seen a signiﬁcant increase in
weightings in the ofﬁce sector, particularly in London and the South East
where we believe strong performance will be achieved. Further activity in
this sector is likely to take advantage of the low vacancy rates, which will
drive rental growth forward.
Whilst ofﬁce activity will be pursued our opportunistic approach will also
continue to provide retail and other opportunities where we can utilise
our proven asset management and development skills to add value. 
We have now also built up a signiﬁcant risk-controlled development
programme and with our balance sheet further strengthened we will
seek to fully exploit the potential whilst controlling the risk proﬁle. 
The property sector has enjoyed a very strong period of growth over the
last few years driven by considerable investor appetite. This trend has
continued this year; however, future performance will rely far more on
asset management and development activity. Halladale is in a very strong
position to exploit these opportunities from within its existing portfolio
and from new purchase activity. We have assembled a very capable team
with considerable experience, which we expect to deliver strong
performance across all our projects.
Ken Lindsay
Property Director
Grays Shopping Centre
Acquired in February 2005 Annual Report & Accounts 2006 Halladale Group plc 18
Operational review continued Operational review continued
Selected acquisitions
1 Tudor Street,
London EC4
Office space
56,000 sq. ft.
Purchase price
and date
£9.15m
September 2005
Well-located development
opportunity with potential
to increase lettable areas.
Portfolio of five shopping
centres
Total retail space
500,000 sq. ft.
Purchase price
and sate
£79m
August 2005
Shopping Centres in Leeds,
Burgess Hill (shown above),
Birmingham, Fareham and
Wallsend providing a good
level of secure income and
asset management
opportunities.
66-72 Hammersmith Road,
London W14
Office space
117,000 sq. ft.
Purchase price
and date
£45.65m
February 2006
Two office blocks currently
fully-let but with possible
opportunities to undertake
a rolling refurbishment to
improve the quality of the
space and the rental levels.
160 Dundee Street,
Edinburgh
Office space
50,000  sq. ft.
Purchase price
and date
£10m
October 2005
Vacant office where work is
on-going to create smaller
office suites, for which there
is good tenant demand.
Acquisition also includes
adjoining land with planning
consent for office space.
Aldermary House,
Queen Street, London EC4
Office space
45,000  sq. ft.
Purchase price
and date
£25.65m
November 2005
Mixed use building with
good secure income and 
the opportunity to undertake
a programme of rolling
refurbishment. The one
vacant floor is being
refurbished at present.
Portfolio of three 
shopping centres
Total retail space
235,000 sq. ft.
Purchase price
and date
£44m
July 2005
Shopping Centres in
Waterlooville, Gravesend
(shown above) and Leighton
Buzzard with medium 
term asset enhancement
opportunities and modest
rental levels.
Hoddesdon
Industrial space
87,000 sq. ft.
Purchase price
and date
£4.95m
August 2005
Single-let industrial unit
with secure income until
2012 and good prospects
for rental growth.
17 Moorgate,
London EC2
Office space
15,000 sq. ft.
Purchase price
and date
£8.05m
June 2005
This office, located 200
yards from The Bank of
England, provides good
passing income and a
medium-term opportunity
to refurbish.
Ross on Wye
Retail space
38,500 sq. ft.
Purchase price
and date
£9.2m
March 2006
Final acquisition of the
CReAM fund, a smaller
centre, but with strong
passing income and good
prospects for rental growth. Halladale Group plc  Annual Report & Accounts 2006 19
Selected disposals
Farnworth, Bolton
Retail space
40,000 sq. ft.
Sale price and date
£7.25m
November 2005
Following completion of the
redevelopment of two retail
units fronting the centre,
the opportunity was taken
to realise the sale in a
strong market.
Bowen Square and Regal
Centre, Daventry
Retail space
90,000 sq. ft.
Sale price and date
£21.95m
May 2005
Centre acquired in 2003.
Following the completion 
of planned enhancement
initiatives, including
redevelopment of one side
of the centre and generally
improving the rental levels,
the property was sold.
Beckett House, Brentwood
Office space
60,000 sq. ft.
Sale price and date
£7.1m
February 2006
Vacant office acquired as
part of the purchase of 
the Bay Tree Shopping
Centre. The complex
leasehold arrangement 
was simplified, planning
consent for conversion 
to 106 flats was obtained.
The property was then 
sold onto a housebuilder.
Cockhedge Shopping 
Park and The Courtyard,
Warrington
Retail space
296,000 sq. ft.
Sale price and date
£54.1m
October 2005
A limited number of asset
enhancement initiatives
were completed allowing
the early disposal of 
the property realising
substantial profit and 
return to invetors.
Cumbernauld
Industrial space
200,000 sq. ft.
Sale price and date
£12.8m
August 2005
New production facility 
built for OKI, as part of 
the acquisition cost of a
significant development site,
and sold on completion.
Market Gates Shopping
Centre, Great Yarmouth
Retail space
153,000 sq. ft.
Sale price and date
£33.31m
December 2005
Disposal, some four years
ahead of original strategy,
following significant asset
enhancement, at a value
significantly higher than
planned.
Wade Street, Halifax
Retail space
47,000 sq. ft.
Sale price and date
£6.35m
October 2005
Sold out of a larger portfolio
to maximise returns.
Ashes Portfolio
Retail space
53,000 sq. ft.
Sale price and date
£6.6m
December 2005
Five small retail units were
packaged and sold as a
portfolio, taking advantage
of the strong demand for
this type of product.
Case House,
Weybridge
Office space
12,000 sq. ft.
Sale price and date
£2.15m
September 2005
Disposal following
completion of a lease
renewal, in line with
strategy.
Lord Street, Wrexham
Retail space
35,000 sq. ft.
Sale price and date
£4.25m
August 2005
Sold out of a larger portfolio
acquisition to maximise
returns. Annual Report & Accounts 2006 Halladale Group plc 20
Financial review
“Return on shareholders’ funds
has continued to increase in
2006, notwithstanding the 
impact of the share issue in 
May 2005 and this indicates
continued effective use of
shareholders’ funds.”
Table 1 shows the proﬁt before tax in a non-statutory format, disclosing
the gross value of rents, property sales and other income from properties
held both directly and in co-investments. Under accounting rules these
latter ﬁgures are amalgamated and shown in the accounts within the
Company’s share of operating proﬁt. Table 1 shows the total level of
activity in the portfolio under management and also shows that total
turnover in respect of co-investments and directly-owned properties 
was £216m (2005 – £114m).
Mark Harkin
Finance Director
Moorgate
Acquired in June 2005 Halladale Group plc  Annual Report & Accounts 2006 21
Note (a): On the sale of The Cockhedge Shopping Park in Warrington
incentivised fees totalling £1,698,000 were invoiced by the Group to an
associate entity, increasing management fees and reducing incentivised
share of proﬁts of co-investments.
No attempt has been made to allocate overheads between 
co-investments and directly-owned activities. 
Fees received in the year totalling £173,000 (2005 – £459,000) have
been deferred to future years in accordance with accounting principles
and calculated by reference to the Group’s equity share in the vehicle 
to which the fees were charged.
The increase in basic earnings per share is stated after the increase in
share capital following the fund-raising in May 2005 which created
12,986,281 new ordinary shares. The average number of shares upon
which the calculation is based is 40,509,754 (2005 – 27,495,723).
Table 1 – Proﬁt before tax
2006 2006 2005 2005
Directly-owned Directly-owned
total Co-investments total Co-investments
£000 £000 £000 £000
Rental income 3,480 29,135 2,371 18,083
Property sales 15,400 163,203 26,926 64,184
Management fees 3,440(a) – 1,672 –
Other income 637 1,063 268 571
Total revenue 22,957 193,401 31,237 82,838
Cost of sales (14,419) (139,287) (26,082) (55,128)
8,538 54,114 5,155 27,710
Equity share of proﬁts of co-investments 5,623 3,630
Incentivised share of proﬁts of co-investments 1,192(a) 2,359
Administration costs (6,814) (4,743)
Group interest 
– net property debt (1,461) (1,706)
– Convertible unsecured loan stock (700) (672)
– other interest (89) (101)
Proﬁt before tax 6,289 3,922
Basic earnings per share 10.61p 10.42p Annual Report & Accounts 2006 Halladale Group plc 22
Financial review continued
Table 2 – Directly-owned turnover and proﬁt contribution by activity
Co-investment
Asset fund
management Development management Total
£000 £000 £000 £000
Rental income 3,480 – – 3,480
Property sales 14,710 690 – 15,400
Management fees 2,488 125 827 3,440
Other income 637 – – 637
Total revenue 21,315 815 827 22,957
Cost of sales (13,828) (591) – (14,419)
Gross proﬁt 7,487 224 827 8,538
Table 2 analyses turnover and proﬁt before tax between the three main business areas of asset management, development and co-investment fund
management and shows that the main contribution to proﬁt before overheads continues to come from the Group’s asset management activities.
Table 3 – Proforma net asset value
2006 2006 2005 2005
Net asset value Pence per Net asset value Pence per
£000 share £000 share
restated restated
(Note 2) (Note 2)
Shareholders’ equity as shown in the 36,263 89.5 19,603 71.1
consolidated balance sheet
Uplift to market value of directly-owned properties 11,213 27.7 3,391 12.3
held as trading stock
Group’s share of uplift to market value of properties 8,233 20.3 6,165 22.4
held in co-investment vehicles
Proforma shareholders’ equity 55,709 29,159
Proforma net assets per share 137.5 105.8
Table 3 discloses the impact of adopting year end valuations in place of cost for the portfolio under management. As a trading Group, properties are
carried at the lower of cost and net realisable value. It is considered that this uplift to valuation, as explained on page 54 shows a clearer and more
accurate value per share.
Table 4 – Proforma triple net asset value per share
2006 2005
£000 £000
restated
(Note 2)
Proforma shareholders’ equity 55,709 29,159
Estimate of tax on revalued properties (5,834) (2,866)
FRS 13 adjustment (net of tax) (626) (605)
Proforma triple net asset value 49,249 25,688
Proforma triple net asset value per share 121.6p 93.3p
Table 4 shows the impact of reducing the proforma numbers in Table 3 by an estimated tax charge at 30% on the revaluation surplus and the
adjustment to mark to market ﬁxed rate debt (net of tax). Table 5 – Return on weighted-average proforma shareholders’ funds
2006 2005
£000 £000
Proﬁt after tax 4,299 2,864
Increase in proforma revaluation reserve in the year 9,889 2,531
Tax thereon at 30% (2,967) (759)
Total unrealised return 6,922 1,772
Total returns (realised and unrealised) 11,221 4,636
Weighted average proforma shareholders’ equity 42,027 23,642
Return on weighted average proforma shareholders’ equity 26.70% 19.61%
In Table 5 the return on proforma shareholders’ equity is calculated. This return is after applying tax at 30% on the revaluation surplus in the year. The
actual tax rate on current year proﬁt was 31.6% (2005 – 26.9%) with the increase mainly as a result of income deﬁcits within certain co-investments
which cannot be offset against proﬁts in other Group entities for tax purposes and upon which no deferred tax asset has been recognised. Weighted
average proforma shareholders’ equity is the opening proforma net asset value in each ﬁnancial year adjusted for the weighted average of funds
received from shares issued in the year. This return has continued to increase in 2006, notwithstanding the impact of the share issue in May 2005 
and this indicates continued effective use of shareholders’ funds.
23 Annual Report & Accounts 2006 Halladale Group plc 24
Financial review continued
Table 6 – Co-investments
Properties Total Halladale Halladale 
at value investment* investment** share of equity
Vehicle Partner £000 £000 £000 %
Co-investment joint ventures
Halladale Ventures Ltd Bank of Scotland 146,798 7,000 3,164 50
The Anglo Halladale No.2 Limited Partnership Tyburn Lane Private Equity 52,528 10,527 3,174 30
(1)
The Anglo Halladale No.3 Limited Partnership Tyburn Lane Private Equity 25,400 5,713 1,675 30
(1)
Hammersmith Grove Limited Partnership Tyburn Lane Private Equity – 3,705 1,112 30
(1)
Cumbernauld Retail Park Limited Partnership Carlyle Group 27,242 15,104 912 20
Halladale Opportunity Fund Limited Partnership Kodak Pension Plan 5,400 1,996 296 50
Halladale Opportunity Fund No.2 Limited Partnership Kodak Pension Plan 16,000 5,511 1,474 50
Oban Bay Properties Limited Black King Properties 3,980 – 670 50
Bowen Square Properties Limited Citigroup Property Investors – – 127 10
277,348 49,556 12,604
Co-investment asset management funds
CPI Retail Active Management Citigroup Property 221,203 55,000 5,635 10
Program Limited Partnership Investors
Halladale Nelson Limited Private investors 29,950 10,695 937 9.36
Partnership
528,501 111,251 19,176
Other co-investments 44
Other investments 5
19,225
Shown in the accounts as
Investment in joint ventures 5,603 
Investment in associates 13,617 
Other investments 5 
19,225 
* Total investment includes both equity and subordinated loans provided by Halladale and its co-investment partners.
** Halladale investment comprises equity, loans and share of retained reserves of each relevant entity.
(1)
In these ventures Halladale is entitled to an incentivised return after an initial hurdle return is reached.
Table 6 contains a further analysis of the Group’s co-investments. The total portfolio under management at 30 April 2006 of £632m represents the
value of directly-owned properties; £103m (16%) and those held in co-investments of £529m (84%). Note 10 to the ﬁnancial statements gives further
information on co-investments. Halladale Group plc  Annual Report & Accounts 2006 25
Table 7 – Borrowings
Co-investments Directly-owned 
2006 2005 2006 2005
£000 £000 £000 £000
restated restated
(Note 2) (Note 2)
Total borrowings 454,772 277,504 62,357 61,516
At ﬁxed rates 341,587 219,882 16,082 20,436
At variable rates 113,185 57,622 46,275 41,080
Average ﬁxed rate at 30 April 6.12% 6.75% 9.48% 8.26%
Average variable rate at 30 April 6.36% 6.41% 6.17% 6.64%
Interest cover (rents over net property interest cost) 126% 131% 238% 139%
Borrowings throughout the portfolio under management is summarised in Table 7. All borrowings by co-investments are wholly without recourse to
the Group other than as disclosed in Note 20 to the ﬁnancial statements. Borrowings for directly-owned properties are mainly at ﬂoating rates to
provide greater ﬂexibility to implement the individual strategy for each project, although a certain level of ﬁxed rate debt has been taken to balance
potential increases in rates. The average ﬁxed rate of debt in directly-owned properties is high due to a long term loan of £4m at 10.29% which is
repayable in tranches through to 2014.
Table 8 – Gearing
2006 2005
£000 £000
restated
(Note 2)
Proforma shareholders’ funds 55,709 29,159
Convertible unsecured loan stock (‘CULS’) 9,505 9,436
Shareholders’ funds including CULS 65,214 38,595
Net borrowings (less CULS) 48,030 46,718
Proforma gearing 73.65% 121.05%
CULS have been included as equity in the above calculation on the basis that the 
conversion price is signiﬁcantly below the current share price
Statutory gearing 158.66% 286.46%
Table 8 shows the Group’s gearing based on proforma shareholders’ funds.
As an AIM company Halladale is not required to adopt International Financial Reporting Standards until the year commencing 1 May 2007 and 
at present there is no intention to implement earlier adoption.
HM Inspector of Taxes has conﬁrmed in each ﬁnancial year since Admission to AIM that Halladale satisﬁes the criteria as a trading company for
Business Asset Taper Relief. A request will be made to HM Inspector of Taxes to reconﬁrm this position based on this year’s accounts, however, 
the Directors believe that the business continues to be conducted in a manner consistent with the position approved by HM Inspector of Taxes.
Mark Harkin
Finance Director Annual Report & Accounts 2006 Halladale Group plc 26
Board of directors
Fred Shedden, MA, LLB
Non-executive Chairman
was senior partner of McGrigors until April 2000 and is now a
consultant to DLA Piper Scotland. He is also a non-executive director 
of Murray International Trust plc, The Equitable Life Assurance Society
and iomart Group plc. He is on the Board of Glasgow Housing
Association Limited and is a Governor of Glasgow School of Art.
Mr Shedden joined the Board of Halladale in 2001 as Non-executive
Chairman.
David Lockhart, CA, NP
Chief Executive
is qualiﬁed as a Chartered Accountant and Solicitor. He practised law 
in his family law ﬁrm until 1981 when he resigned to found Caltrust
Limited, a property development company based in Scotland. When the
company was acquired by Sheraton Securities International plc in 1987
he remained as Managing Director until 1990. 
In 1991, Mr Lockhart founded Halladale and served as Executive
Chairman until 2001 when he assumed the role of Chief Executive.
Ken Lindsay, FRICS
Property Director
is a Chartered Surveyor with over 25 years’ experience in UK commercial
property. His career in property spans both public and private sectors.
From 1983 he spent 15 years with Scottish Provident and Aberdeen
Asset Managers where he was responsible for property portfolios of 
up to £500m and undertook many major transactions. 
Mr Lindsay joined the Board of Halladale in 1998 as Property Director. 
Fred Shedden
David Lockhart
Ken Lindsay Halladale Group plc  Annual Report & Accounts 2006 27
Mark Harkin, BAcc, CA
Finance Director
studied accountancy at Glasgow University and is a Chartered
Accountant. After 6 years in the accountancy profession, he spent 
4 years at Caltrust Limited a Scottish based property development
company. In 1990 he joined Edinburgh Development and Investment
Limited, the property development arm of Edinburgh District Council.
Mr Harkin joined the Board of Halladale as Finance Director in 1995.
Simon Taylor, BSc, MRICS
Director of Structured Finance
is a Chartered Surveyor with 15 years’ experience in property ﬁnance. 
He was previously a Vice President at Security Paciﬁc. He then became 
a Partner in Drivers Jonas, where he established and ran their ﬁnancial
service business. He was a founding shareholder in Outlet Centres
International, a specialist developer of factory outlets. 
Mr Taylor joined the Board of Halladale as Director of Structured 
Finance in 2002.
Michael Baker, FRICS
Non-executive Director
is a Chartered Surveyor with over 30 years’ experience in the Central
London property market and was previously Managing Director of Baker
Harris Saunders plc. He is a founding partner of BH
2
, the specialist City
of London property consultancy. He is a past Chairman of the City of
London branch of The Royal Institution of Chartered Surveyors and a
Past Master of the Chartered Surveyors Livery Company. 
Mr Baker joined the Board of Halladale in 1995.
Marcus Hopkins, BA, Hons, ACIB
Non-executive Director
studied law at Oxford University and has over 25 years’ of experience 
in the banking sector. He was previously head of emerging markets 
for Midland/HSBC Group mainly dealing with projects in Latin America.
He joined Moscow Narodny Bank in 1998 as Assistant General Manager
focussing on corporate and wholesale banking, and is now Executive
Director and Head of Capital Markets.
Mr Hopkins joined the Board of Halladale in 2004.
Mark Harkin
Michael Baker
Simon Taylor and Marcus Hopkins 28 Annual Report & Accounts 2006 Halladale Group plc
Directors’ report
The directors present their report and the audited ﬁnancial statements
for the year ended 30 April 2006.
1. Activities and future prospects
The principal activities of the Group are asset management, development
and co-investment fund management of property located throughout
the UK both on its own account and in co-investment vehicles. A full
review of the Group’s business and results for the year is contained 
in the Chairman’s Statement, Chief Executive’s Review, Operational
Review and Financial Review, which should be read in conjunction 
with this report.
2. Results and dividends
The Group proﬁt for the year after taxation amounted to £4,299,000
(2005 – £2,864,000). Dividends paid in the year amounted to
£1,090,000 (2005 – £660,000).
3. Enhanced business review
The Group is required to comply with the Enhanced Business Review
disclosures required by the Companies Act 1985 as amended to comply
with the EU Modernisation Directive. 
• Key Performance Indicators for the Group are shown in the
Highlights (pages 2 and 3)
• Financial Risk Management Policy, mainly relating to interest rates, 
is shown in the Financial review (page 25)
• Principal Risks and Uncertainties
There are a number of potential risks and uncertainties which have
been identiﬁed within the business which could have a material
impact on the Group’s long term performance.
Planning and development
The increasing development proﬁle of the Group places increased
emphasis on the planning stage of each project. The Group seeks to
minimise this risk through its ﬁrmly established risk control strategy,
which includes detailed research and planning advice. On obtaining
planning consent, a decision will be taken on progressing the project
on its own or with a co-investment partner. Development in advance
of signiﬁcant pre-letting is only progressed if there is detailed
research on, and agency advice regarding, tenant demand for the
completed property. At all stages the Company seeks professional
advice, conducts thorough diligence and continually monitors 
each development.
Property values 
Property values have generally beneﬁted from positive yield shift in
the last two years. A reversal of this would lead to falls in property
values. Neither the current market nor the economic climate
suggests such a reversal. The Company seeks to mitigate this risk 
by implementing value-added initiatives which would support values
in the event of such a down-turn.
Tenant relationships
All property companies have exposure to the covenant of their
tenants as rentals drive capital values as well as providing the
necessary cash ﬂow to service debt. The Company seeks to minimise
exposure to any single sector or tenant across the portfolio, monitor
payment performance and engage in regular dialogue with tenants.
Availability of funding 
The Group is dependent upon bank borrowings for current and
future property transactions. Bank facilities are negotiated and
tailored to each project in terms of quantum and timing. In the
current economic climate it is anticipated that intended borrowings
for future projects will be readily available.
Management of funding risk 
The treasury function is managed centrally to support the operating
activities of the Group. Its primary role is to ensure that adequate
resources are available to meet the short and long term funding
requirements for the Group and that any funding risk arising from
Group activities is effectively identiﬁed and managed.
Management of interest rate risk
The Group’s borrowings are primarily in relation to and secured by
properties which are held as trading stock. Accordingly a relatively
short term view is adopted when reviewing the interest rate risk.
This risk is managed by securing a mixture of ﬁxed and ﬂoating rate
debt and by the use of interest rate swaps in associates and joint
ventures. The balance between ﬁxed and ﬂoating rate debt is
determined by the individual strategy for each project to which 
the borrowing relates and is established in consultation with the
relevant lender.
4. Share capital
During the year the Company issued 12,986,281 new ordinary shares 
of 25p each at a price of 110p per share as a share placing and 13,000
new ordinary shares of 25p each at a price of 59p per share on the
exercise of staff share options.
In June 2006 the Company issued a further 11,278,194 ordinary shares
at £1.33 per share and £15m of 5.25% Convertible Unsecured Loan
Stock 2013. The net proceeds, after costs, were £29.1m. 29 Halladale Group plc  Annual Report & Accounts 2006
5. Substantial shareholders
As at 30 April 2006, substantial interests of 3% or more (and related
holdings) of the allotted and fully paid ordinary shares of the Company
were as follows:
Shares held %
MNB Strategic Investments Ltd 6,160,713 15.21
David A.S. Lockhart* 2,510,000 6.20
Hansa Trust Plc 2,153,846 5.32
Mercury Real Estate Advisors LLC 1,885,000 4.65
British Telecom Staff Pension Fund 1,553,343 3.83
DASL Liferent Trust* 1,500,000 3.70
Jupiter UK Special Situations Fund 1,363,636 3.37
Smith & Williamson Nominees Ltd 1,361,585 3.36
Post Ofﬁce Pension Fund 1,257,788 3.10
Rathbone Special Situations Fund 1,244,492 3.07
George S. Lockhart Trust for Niece & Nephews* 1,000,000 2.47
* These shareholders are considered to be related (see Directors’ interests
below).
6. Power to allot shares
At the forthcoming Annual General Meeting resolutions will be proposed
to renew the directors’ power to allot, at any time during the following
ﬁve years, shares equal to up to 10% of the issued share capital,
otherwise than on a pre-emptive basis. 
7. Corporate governance
While the Combined Code issued by the Financial Reporting Council
does not apply to AIM companies, the directors consider corporate
governance to be an important area and accordingly have provided 
the disclosure below to outline how the governance of the Group 
is conducted.
Internal control
The directors have reviewed the effectiveness of the system of internal
control, the key elements of which are as follows:
• Board procedures to establish the parameters within which
management operate.
• The measurement of Group ﬁnancial performance on a monthly
basis against budget. On a quarterly basis this reporting is formalised
within a report circulated to and considered by the Board.
• A system of authorisation and approval of expenditure, together
with relevant cheque signatory limits. 
• Detailed diligence is undertaken on each new property acquisition
including those in co-investments, comprising agency advice, legal
opinions and survey reports together with a detailed business plan to
conﬁrm viability. Each business plan is regularly reviewed to factor-in
actual performance and any necessary amendments to assumptions.
• Careful consideration, including advice on legal, accounting and tax
implications, is given to each new vehicle established. This includes a
review of the level of the Company’s control over future activities of
the relevant vehicle, as well as a risk/reward analysis to determine
the potential proﬁtability of each acquisition.
Directors’ responsibilities
Details of the composition of the Board are disclosed in this report. 
Board meetings are held on average every two months, where a formal
schedule of matters including, inter alia, overall strategy and monitoring
of ﬁnancial performance, is discussed.
The two undernoted committees, minutes of which are circulated and
reviewed by the directors, have operated throughout the year.
Audit Committee
The Audit Committee comprises the three non-executive directors who
have a remit to meet at least twice a year to monitor the Group’s
ﬁnancial reporting and accounting policies and the adequacy of internal
ﬁnancial controls. The Committee also reviews interim reports,
preliminary announcements and the Annual Report and Accounts prior
to their submission to the Board.
Remuneration Committee
The Remuneration Committee comprises the three non-executive
directors and meets at least once a year to determine the remuneration
and terms and conditions of employment of the executive directors of
the Company. In particular the Remuneration Committee sets the level
of discretionary bonus payments to each of the directors. The total sum
paid in bonus to the executive directors for the year to 30 April 2006
was £1,250,000 (2005 – £975,000).
During the year the Remuneration Committee has taken independent
advice on the creation of long term incentives for senior team members
including the executive directors. Arrangements being considered include
a Performance Share Plan with shares being awarded based on the
Company’s performance, and a Deferred Share Bonus, whereby part 
of any cash bonus could be used to acquire shares in the Company. 
Additionally, the full Board acts as the Nomination Committee to
consider, when necessary, the appointment of any new directors or
company secretary.
Going concern
After making due enquiry, the directors are of the opinion that at the
time of approving the accounts, taking into account available bank
facilities, the Company and Group has adequate resources to continue 
in operational existence for the foreseeable future. The accounts have
therefore been prepared on the going concern basis. Annual Report & Accounts 2006 Halladale Group plc 30
Directors’ report continued
8. Directors
The present membership of the Board, all of whom served throughout
the year, is set out on pages 26 and 27.
The directors who retire from ofﬁce by rotation under Article 24 of the
Articles of Association are David A.S. Lockhart and Michael P .L. Baker.
Being eligible, their re-election is recommended by the Board at the
forthcoming Annual General Meeting.
The directors’ interests, as deﬁned in the Companies Act 1985, in the
shares of the Company at 30 April 2006 are as follows:
Ordinary shares
of £0.25
2006 2005
D.A.S. Lockhart 2,510,000 2,476,923
A.C. Shedden 26,922 21,538
K.F. Lindsay 20,000 20,000
M.J. Harkin 13,461 10,769
S.A. Taylor 135,933 45,147 
D.A.S. Lockhart also has a beneﬁcial interest in 1,500,000 ordinary
shares of £0.25 through a liferent trust (2005 – 1,500,000) and a 
further non-beneﬁcial interest in 1,000,000 ordinary shares of £0.25
(2005 – 1,000,000) through another liferent trust.
The following share options have been granted:
D.A.S. Lockhart 250,000 shares at 74.5p exercisable between 
28 July 2007 and 27 July 2014
*250,000 shares at 116.5p exercisable between 
25 August 2008 and 24 August 2015
K.F. Lindsay 50,847 shares at 59p exercisable between 
11 June 2004 and 10 June 2011
349,153 shares at 50p exercisable between 
11 June 2004 and 10 June 2011
40,000 shares at 55p exercisable between 
10 September 2005 and 9 September 2012
60,000 shares at 55p exercisable between 
5 August 2006 and 4 August 2013 
250,000 shares at 74.5p exercisable between 
28 July 2007 and 27 July 2014
*250,000 shares at 116.5p exercisable between 
25 August 2008 and 24 August 2015
M.J. Harkin 50,847 shares at 59p exercisable between 
11 June 2004 and 10 June 2011
199,153 shares at 50p exercisable between 
11 June 2004 and 10 June 2011
80,000 shares at 55p exercisable between 
10 September 2005 and 9 September 2012
*70,000 shares at 116.5p exercisable between 
25 August 2008 and 24 August 2015
S.A. Taylor 57,142 shares at 55p exercisable between 
10 September 2005 and 9 September 2012
272,858 shares at 55p exercisable between 
10 September 2005 and 9 September 2012
*70,000 shares at 116.5p exercisable between 
25 August 2008 and 24 August 2015
* These options were granted on 25 August 2005.
No other director had an interest in the share capital of the Company
during the year.
9. Directors’ and ofﬁcers’ liability insurance
The Company has purchased and maintained Directors’ and ofﬁcers’
liability insurance under the terms of Section 310(3) of the Companies
Act 1985.
10. Payment of suppliers
It is the Company’s payment policy with all suppliers to settle
outstanding accounts in accordance with the terms and conditions
agreed when placing orders.
The Company’s trade creditors balance at 30 April 2006 represents 
31 days of annual purchases (2005 – 86 days).
11. Environmental policy
The Group recognises the importance of its environmental
responsibilities, monitors its impact on the environment and designs and
implements policies to reduce any damage that might be caused by the
Group’s activities. An environmental assessment is made before
acquisition on every property acquired by the Group.
12. Employees
Details of employees and related costs can be found in Note 5 to the
ﬁnancial statements.
13. Donations
The Company made no political donations in the year. Charitable
donations totalling £14,450 (2005 – £5,025) were made.
14. Post balance sheet events
On 30 June 2006, the Group disposed of its interest in Oban Bay
Properties Limited, a joint venture company.
15. Disclosure of information to auditors
In the case of each of the persons who are directors of the Company 
at 11 July 2006.
• So far as each of the directors is aware, there is no relevant audit
information (as deﬁned by the Company’s Act 1985) of which the
Company’s auditors are unaware; and
• Each of the directors has taken all of the steps that he ought to 
have taken as a director to make himself aware of any relevant 
audit information (as deﬁned) and to establish that the Company’s
auditors are aware of that information.
16. Auditors
A resolution to reappoint Deloitte & Touche LLP as the Company’s
auditors will be proposed at the forthcoming Annual General Meeting.
By order of the Board
Mark J. Harkin Secretary
11 July 2006 Halladale Group plc  Annual Report & Accounts 2006 31
The directors are responsible for preparing the Annual Report and the
ﬁnancial statements. The directors have chosen to prepare the ﬁnancial
statements for the Company and the Group in accordance with United
Kingdom Generally Accepted Accounting Practice (UK GAAP).
Company law requires the directors to prepare such ﬁnancial statements
for each ﬁnancial year which give a true and fair view, in accordance
with United Kingdom Generally Accepted Accounting Practice, of the
state of affairs of the Company and the Group as at the end of the
ﬁnancial year and of the proﬁt or loss of the Group for that period and
comply with UK GAAP and the Companies Act 1985. In preparing those
ﬁnancial statements the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed;
and
• prepare the ﬁnancial statements on the going concern basis unless 
it is inappropriate to presume that the Company and the Group will
continue in business.
The directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the ﬁnancial
position of the Company and the Group, and to enable them to ensure
that the ﬁnancial statements comply with the Companies Act 1985. They
are also responsible for safeguarding the assets of the Company and for
taking reasonable steps for the prevention and detection of fraud and
other irregularities.
Statement of directors’ responsibilities Annual Report & Accounts 2006 Halladale Group plc 32
We have audited the group and individual company ﬁnancial statements
(the “ﬁnancial statements”) of Halladale Group plc for the year ended
30 April 2006 which comprise the consolidated proﬁt and loss account,
the consolidated reconciliation of movements in shareholders’ funds, the
statements of movements in reserves, the consolidated and individual
company balance sheets, the consolidated cash ﬂow statement, the
notes to the consolidated cash ﬂow statement and the related notes 
1 to 25. These ﬁnancial statements have been prepared under the
accounting policies set out therein.
This report is made solely to the company’s members, as a body, in
accordance with section 235 of the Companies Act 1985. Our audit
work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditors’
report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, 
for this report, or for the opinions we have formed.
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 United Kingdom legal and regulatory requirements and
International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the ﬁnancial statements
give a true and fair view, in accordance with the relevant ﬁnancial
reporting framework, and are properly prepared in accordance with the
Companies Act 1985. We report to you whether in our opinion the
information given in the directors’ report is consistent with the ﬁnancial
statements. We also 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 the directors’ report and the other information contained 
in the annual report for the above year as described in the contents
section and consider the implications for our report if we become 
aware of any apparent misstatements or material inconsistencies 
with the ﬁnancial statements. 
Basis of audit opinion
We conducted our audit in accordance with 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 judgments made by the
directors in the preparation of the ﬁnancial statements, and of whether
the accounting policies are appropriate to the circumstances of the
company and the group, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us
with sufﬁcient evidence to give reasonable assurance that the ﬁnancial
statements are free from material misstatement, whether caused by
fraud or other irregularity or error. In forming our opinion we also
evaluated the overall adequacy of the presentation of information 
in the ﬁnancial statements.
Opinion
In our opinion:
• the ﬁnancial statements give a true and fair view, in accordance 
with United Kingdom Generally Accepted Accounting Practice, of
the state of the group’s and the individual company’s affairs as at
30 April 2006 and of the group’s proﬁt 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 directors’ report is consistent with the
ﬁnancial statements.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
Glasgow
United Kingdom
11 July 2006
Independent auditors’ report to the
members of Halladale Group plc 33
Financial accounts and notes to the
financial statements Annual Report & Accounts 2006 Halladale Group plc 34
2006 2005 
Notes £000 £000 £000 £000
Turnover: group and share of joint ventures 47,351 49,396
Less share of joint ventures’ turnover (24,394) (18,159)
Group turnover 3 22,957 31,237
Cost of sales (14,419) (26,082)
Gross proﬁt 8,538 5,155
Administrative expenses (6,814) (4,743)
Operating proﬁt 1,724 412
Share of operating proﬁt in joint ventures 5,249 4,620
Share of operating proﬁt in associates 7,994 5,273
Total operating proﬁt 14,967 10,305
Interest receivable and similar income 4
Group 959 507
Joint ventures 67 94
Associates 113 91
1,139 692
Interest payable and similar charges 4
Group (3,209) (2,986)
Joint ventures (3,635) (3,062)
Associates (2,973) (1,027)
(9,817) (7,075)
Proﬁt on ordinary activities before taxation 5 6,289 3,922
Tax on proﬁt on ordinary activities 6 (1,990) (1,058)
Proﬁt on ordinary activities after taxation 4,299 2,864
Earnings per ordinary share 8 10.61p 10.42p
Fully diluted earnings per ordinary share 8 9.11p 8.54p
Turnover and operating proﬁt in both years relate wholly to continuing activities.
There are no other recognised gains or losses in either year other than as presented above.
Consolidated profit and loss account
Year ended 30 April 2006 Halladale Group plc  Annual Report & Accounts 2006 35
2006 2005
£000 £000
restated
(Note 2)
Proﬁt for the year attributable to shareholders 4,299 2,864
Dividends on ordinary shares (1,090) (660)
3,209 2,204
Issue of share capital (net of expenses) 13,451 5,419
Net movements in shareholders’ funds 16,660 7,623
Opening shareholders’ funds
As previously reported 18,930 11,445  
Adjustment for adoption of FRS21 523 385
Reclassiﬁcation of equity element of convertible unsecured loan stock 150 150
As now reported 19,603 11,980 
Closing shareholders’ funds 36,263 19,603
Statements of movements in reserves
Year ended 30 April 2006
Capital Share Proﬁt
Capital redemption premium and loss
reserve reserve account account Total
Group £000 £000 £000 £000 £000
At 1 May 2005 (as restated – Note 2) 76 1,772 5,730 4,996 12,574
Arising on new issue of shares – – 10,202 – 10,202
Realisation of proﬁt on joint venture property sales (76) – – 76 –
Proﬁt for the year – – – 4,299 4,299
Dividends paid – – – (1,090) (1,090)
At 30 April 2006 – 1,772 15,932 8,281 25,985
Capital Share Proﬁt
redemption premium and loss
reserve account account Total
Company £000 £000 £000 £000
As at 1 May 2005 (as restated – Note 2) 1,772 5,730 4,438 11,940
Arising on new issue of shares – 10,202 – 10,202
Proﬁt for the year – – 6,149 6,149
Dividends paid – – (1,090) (1,090)
At 30 April 2006 1,772 15,932 9,497 27,201
Consolidated reconciliation of movements 
in shareholders’ funds
Year ended 30 April 2006 Annual Report & Accounts 2006 Halladale Group plc 36
2006 2005
£000 £000
restated
(Note 2)
Fixed assets
Tangible assets 9 423 283
Investments in joint ventures 10
Goodwill 20 30
Share of gross assets 82,359 59,556
Share of gross liabilities (76,776) (55,176)
5,603 4,410
Investments in associates 10 13,617 9,809
Other investments 5 5
19,225 14,224
Total ﬁxed assets 19,648 14,507
Current assets
Stocks 11 91,521 59,152
Debtors 12 1,572 7,724
Cash at bank and in hand 13 5,014 5,362
98,107 72,238
Creditors:
amounts falling due within one year 14 (46,962) (10,922)
Net current assets 51,145 61,316
Total assets less current liabilities 70,793 75,823
Creditors:
amounts falling due after more than one year 15 (25,025) (46,784)
Convertible unsecured loan stock 16 (9,505) (9,436)
Net assets 36,263 19,603
Capital and reserves
Share capital 19 10,278 7,029
Capital redemption reserve 1,772 1,772
Capital reserve – 76
Share premium account 15,932 5,730
Proﬁt and loss account 8,281 4,996
Total shareholders’ funds 36,263 19,603
These ﬁnancial statements were approved by the Board of Directors on 11 July 2006.
David A.S. Lockhart
Director
Mark J. Harkin
Director
Consolidated balance sheet
As at 30 April 2006 Halladale Group plc  Annual Report & Accounts 2006 37
2006 2005
£000 £000
restated
(Note 2)
Fixed assets
Investments 10 18,963 13,968
Current assets
Debtors 12 46,526 50,537
Cash at bank and in hand 4,663 1,958
51,189 52,495
Creditors:
amounts falling due within one year 14 (21,069) (31,710)
Net current assets 30,120 20,785
Total assets less current liabilities 49,083 34,753
Creditors:
amounts falling due after more than one year 15 (2,099) (6,348)
Convertible unsecured loan stock 16 (9,505) (9,436)
Net assets 37,479 18,969
Capital and reserves
Share capital 19 10,278 7,029
Capital redemption reserve 1,772 1,772
Share premium account 15,932 5,730
Proﬁt and loss account 9,497 4,438
Total shareholders’ funds 37,479 18,969
These ﬁnancial statements were approved by the Board of Directors on 11 July 2006.
David A.S. Lockhart
Director
Mark J. Harkin
Director
Company balance sheet
As at 30 April 2006 Annual Report & Accounts 2006 Halladale Group plc 38
2006 2005
Notes £000 £000
Net cash outﬂow from operating activities ii (11,621) (17,212)
Dividends received from joint ventures and associates 5,445 5,438
Returns on investments and servicing of ﬁnance iii (2,918) (2,275)
Taxation (197) –
Capital expenditure and ﬁnancial investment iii (260) (61)
Acquisitions and disposals iii (3,922) (11,252)
Dividends paid (1,090) (660)
Cash outﬂow before ﬁnancing (14,563) (26,022)
Financing iii 14,215 30,523
(Decrease)/increase in cash (348) 4,501
Notes to the consolidated cash flow statement
Year ended 30 April 2006
2006 2005
£000 £000
restated
i Reconciliation of net cash ﬂow to movement in net debt (Note iv) (Note 2)
(Decrease)/increase in cash in the period (348) 4,501
Cash inﬂow from increase in debt and lease ﬁnancing (764) (24,954)
Change in net debt resulting from cash ﬂows (1,112) (20,453)
Loans acquired with subsidiary – (3,750)
Non cash movements (69) –
Net debt at 1 May 2005 (56,183) (31,980)
Net debt at 30 April 2006 (57,364) (56,183)
2006 2005
ii Reconciliation of operating proﬁt to net cash outﬂow from operating activities £000 £000
Operating proﬁt 1,724 412
Depreciation 120 87
Goodwill amortised 10 10
Release of deferred income on sales to joint venture (76) (100)
Increase in stocks (21,677) (14,744)
Decrease/(increase) in debtors 5,292 (5,032)
Increase in creditors 2,986 2,155
Net cash outﬂow from operating activities (11,621) (17,212)
Consolidated cash flow statement
Year ended 30 April 2006 Halladale Group plc  Annual Report & Accounts 2006 39
Notes to the consolidated cash flow statement continued
Year ended 30 April 2006
2006 2005
iii Gross cash ﬂows £000 £000
Returns on investments and servicing of ﬁnance
Interest received 758 543
Interest paid (3,676) (2,818)
(2,918) (2,275)
Capital expenditure and ﬁnancial investment
Purchase of ﬁxtures, equipment and motor vehicles (260) (61)
Acquisitions and disposals
Investments in joint ventures and associates (4,022) (11,236)
Realisation of investments in joint ventures and associates 100 525
Acquisition of subsidiary undertaking – (541)
(3,922) (11,252)
Financing
Issue of ordinary shares 13,451 5,419
Loans received 24,792 42,840
Loans repaid (24,020) (17,729)
Hire purchase repaid (8) (7)
14,215 30,523
At 1 May
2005
restated Non-cash At 30 April
(Note 2) Cash ﬂows movements 2006
iv Analysis of changes in net debt £000 £000 £000 £000
Cash at bank and in hand 5,362 (348) – 5,014
Debt due within 1 year (5,296) (3,283) (21,748) (30,327)
Debt due after more than 1 year (56,220) 2,511 21,679 (32,030)
Hire purchase agreements (29) 8 – (21)
(56,183) (1,112) (69) (57,364) Annual Report & Accounts 2006 Halladale Group plc 40
Notes to the financial statements
Year ended 30 April 2006
1. Accounting policies
The ﬁnancial statements are prepared in accordance with applicable
United Kingdom accounting standards. The particular accounting policies
adopted by the directors, which have remained unchanged from the
previous year, other than as disclosed in Note (o) are described below.
(a) Accounting convention
These ﬁnancial statements have been prepared under the historical cost
convention. 
(b) Basis of consolidation
The Group ﬁnancial statements consolidate the ﬁnancial statements of
the Company and its subsidiaries for the year ended 30 April 2006 (Note
10). The results of subsidiaries acquired are consolidated for the period
from the date on which control passed. Acquisitions are accounted for
under the acquisition method. No proﬁt and loss account is presented
for Halladale Group plc as provided by S230 of the Companies Act 1985. 
(c) Joint ventures and associates
The results of joint ventures and associates are consolidated using the
equity method of accounting. The consolidated proﬁt and loss account
includes the Group’s share of associates’ and joint ventures’ proﬁts, while
the Group’s share of the net assets of joint ventures and associates is
shown in the consolidated balance sheet. The Group is entitled to
incentivised returns on reaching pre-established hurdles, mainly set by
reference to overall returns, in certain projects being undertaken by
associates. This incentivised return is only recognised by the Group once
it is earned, normally on the receipt of a distribution at the incentivised
return rate.
(d) Income recognition
Turnover is recognised on the sale of properties held for resale or
development at the date of unconditional completion of the contract.
Other income, including rental income and management fees, is
recognised in the period to which it relates.
(e) Tangible ﬁxed assets
Depreciation is provided on all tangible ﬁxed assets at rates calculated to
write off the cost in equal instalments over their estimated useful lives.
The rates of depreciation are as follows:
Furniture and equipment 15% straight line
Computer equipment 25% straight line
Motor vehicles 25% straight line
(f) Investments
Investments are stated at cost less any provision for impairment. 
(g) Stocks
Properties held for re-sale or development are valued at the lower of 
cost and net realisable value. Cost includes capitalised interest where
relevant. Net realisable value represents the estimated sales price less
costs estimated to be incurred up to the date of disposal.
(h) Interest capitalisation
For properties in the course of development, interest is capitalised in
stocks up until the date of Practical Completion. From that date, interest
is charged against proﬁt.
(i) Current tax
Current tax, including UK corporation tax, is provided at amounts
expected to be paid (or recovered) using the tax rates and laws that have
been enacted or substantively enacted by the balance sheet date.
(j) Deferred taxation
In accordance with FRS 19, deferred tax is provided in full on timing
differences which result in an obligation at the balance sheet date to pay
more tax, or a right to pay less tax, at a future date, at rates expected to
apply when they crystallise based on current tax rates and law. Timing
differences arise from the inclusion of items of income and expenditure
in taxation computations in periods different from those in which they
are included in ﬁnancial statements. Deferred tax assets are recognised
to the extent that it is regarded as more likely than not that they will be
recovered. Deferred tax assets and liabilities are not discounted.
(k) Hire purchase
Assets held under hire purchase agreements and the related obligations
are recorded in the balance sheet at the fair value of the assets at the
inception of the agreements. The excess of the payments over the
recorded obligations are treated as ﬁnance charges which are charged 
to the proﬁt and loss account as incurred. Rental costs under operating
leases are charged to the proﬁt and loss account in equal annual
amounts over the periods of the leases.
(l) Goodwill
Goodwill is capitalised in the year in which it arises and amortised over
its estimated useful life. The directors regard 10 years as a reasonable
maximum for the estimated useful life of existing goodwill. Capitalised
goodwill on a fair value basis relating to joint ventures is included within
the carrying value of the joint venture.
(m) Debt
Debt is initially stated at the amount of the net proceeds after the
deduction of issue costs. The carrying amount is increased by the ﬁnance
cost in respect of the accounting period and reduced by payments made. 
(n) Convertible unsecured loan stock (CULS)
In accordance with FRS 25, the net proceeds of the issue of CULS are
apportioned between debt and equity according to the fair value at the
date of issue.
(o) Changes in accounting policies
In preparing the ﬁnancial statements for the current year, the Group has
adopted the following Financial Reporting Standards:
– FRS 21 ‘Events after the Balance Sheet date’; and
– The presentation requirements of FRS 25 ‘Financial Instruments:
Disclosure and Presentation’.
FRS 21 ‘Events after the Balance Sheet date’
Under FRS 21 ‘Events after the Balance Sheet date’, dividends declared
after the balance sheet date are not recognised as liabilities at the period
end, but are instead recognised when they are paid or declared. This
change in accounting policy has resulted in a prior year adjustment as
detailed in Note 2.
FRS 25 ‘Financial Instruments: Disclosure and Presentation’
The adoption of FRS 25 ‘Financial Instruments: Disclosure and
Presentation’ has also resulted in a change in accounting policy in
respect of shares classiﬁed wholly as equity. In accordance with FRS 25,
dividend payments on equity shares are debited directly to equity rather
than being recognised as income or expenditure in the proﬁt and loss
account. Halladale Group plc  Annual Report & Accounts 2006 41
3. Turnover 
Turnover was contributed as follows: 
2006 2005
£000 £000
Property sales 15,400 26,926
Rental income 3,480 2,371
Management fees 3,440 1,224
Other income from asset management 637 716
22,957 31,237
All turnover was attributable to activities within the United Kingdom in both years.
4. Interest
Receivable
2006 2005
£000 £000
Bank interest 270 314
Sums held on escrow – 75
Loans to associates and joint ventures 689 118
959 507
Share of interest receivable by joint ventures 67 94
Share of interest receivable by associates 113 91
1,139 692
Payable
2006 2005
£000 £000
Bank loans and overdrafts
Repayable outwith 5 years 426 438
Repayable within 5 years 2,948 1,980
3,374 2,418
Capitalised interest (954) (205)
2,420 2,213
Convertible unsecured loan stock 700 672
Other loans 89 101
3,209 2,986
Share of interest payable by joint ventures 3,635 3,062
Share of interest payable by associates 2,973 1,027
9,817 7,075
1. Accounting policies continued
(o) Changes in accounting policies continued
Furthermore, convertible unsecured loan stock is regarded as a
compound instrument, consisting of a liability component and an equity
component. At the date of issue, the fair value of the liability component
is estimated and the difference between the proceeds of issue of the
instrument and the fair value assigned to the liability component,
representing the embedded option to convert, is included in equity.
Issue costs are apportioned between the liability and equity components
of the convertible unsecured loan stock based on their relative carrying
amounts at the date of issue.
2. Prior year adjustment
As detailed in Note 1 above, a prior period adjustment has arisen from 
a change in accounting policy and the prior year comparatives have been
restated to reﬂect the changes required pursuant to FRS 21, ‘Events after
the balance sheet date’, and FRS 25, ‘Financial Instruments: Disclosure
and Presentation’, both of which became effective for accounting
periods beginning on or after 1 January 2005. 
Dividends
The impact of this adjustment is to increase reserves at 30 April 2005 by
£523,000.
Convertible unsecured loan stock
The fair value of the debt element of the loan stock at the date of issue
was calculated as £9,850,000. The £150,000 difference between this
and the issue proceeds of £10,000,000 has been reclassiﬁed as equity 
at 30 April 2005. Annual Report & Accounts 2006 Halladale Group plc 42
5. Proﬁt on ordinary activities before taxation
2006 2005
£000 £000
a. Proﬁt on ordinary activities before taxation is stated after charging:
Auditors’ remuneration – audit fees 66 60
– other services 80 95
146 155
Depreciation on owned assets 106 73
Depreciation on assets held under hire purchase 14 14
120 87
Rentals payable on operating leases – land and buildings 110 27
2006 2005
Group £000 £000
b. Salaries 3,718 2,894
Social security costs 449 348
Other pension costs 206 156
4,373 3,398
c. Directors’ remuneration 1,995 1,651
Directors’ fees 72 54
Directors’ pension contributions 153 133
2,220 1,838
d. Remuneration of highest paid director
Emoluments 670 540
Pension contributions 55 47
725 587
e. Average staff numbers in the year 30 22
The directors are remunerated through another Group company. The Company has no employees in the current or prior year and therefore no
employee remuneration is borne by this Company.
6. Tax on proﬁt on ordinary activities
2006 2005
£000 £000
United Kingdom Corporation Tax
Current at 30% (2005 – 30%) 968 189
Prior year adjustment (78) (5)
Current tax charge 890 184
Deferred – origination and reversal of timing differences 48 (164)
Deferred – prior year adjustment 24 6
962 26
Share of tax of associated companies 804 1,062
Share of tax of joint venture companies 224 (30)
Total tax charge 1,990 1,058
Notes to the financial statements continued
Year ended 30 April 2006 Halladale Group plc  Annual Report & Accounts 2006 43
Reconciliation of tax charge
The standard rate of current tax for the year, based on the UK standard rate of corporation tax, is 30% (2005 – 30%). The actual tax charge for the
current and prior years differs from 30% for the reasons set out in the following reconciliation:
2006 2005
£000 £000
Proﬁt before tax 6,289 3,922
Tax on proﬁt at 30% 1,887 1,177
Factors affecting charge:
Proﬁt on sale of properties previously transferred intra-group (23) (225)
Permanent difference 67 34
Capital allowances for the year in excess of depreciation – 45
Rate differences – (35)
Losses carried forward utilised in year (114) –
Deferred tax asset on inter-company proﬁts not realised – (23)
Unrecognised movement in deferred tax 127 106
Unrecognised proﬁt on management fees to associates 52 142
Prior year adjustment (78) (5)
Share of Associate and Joint Venture Companies tax charge (1,028) (1,032)
Current tax charge for the year 890 184
7. Dividends
2006 2005
£000 £000
Amounts recognised as distributions in the year
Dividends paid 1,090 660
Pence Pence
Dividends per share 3.3 2.4
£000 £000
Dividend proposed but not paid or included in the accounting records 972 523
Pence Pence
Dividends proposed per share 2.4 1.9
As explained in Note 1(o) the Group is required to comply with FRS 21 and accordingly dividends are only accounted for in the year they are paid 
or declared. The proposed dividend will, if approved at the Company’s Annual General Meeting, be paid on 14 September 2006 and has not been
included as a liability in these ﬁnancial statements. Annual Report & Accounts 2006 Halladale Group plc 44
8. Earnings per share
Earnings per share are calculated on the Group proﬁt after tax divided by the weighted average number of shares in issue during the year, as follows:
2006 2005
Proﬁt Number Pence per Proﬁt Number of Pence per 
of shares share shares share
£000 p £000 p
Basic earnings per share 4,299 40,509,754 10.61 2,864 27,495,723 10.42
Dilutive potential shares 538 12,569,839 519 12,131,486
Fully diluted earnings per share 4,837 53,079,593 9.11 3,383 39,627,209 8.54
Dilutive potential shares represent the number of additional shares which would require to be issued on exercise of share options at the year end
based on the difference between the option price and the average share price throughout the year and the convertible unsecured loan stock at the
conversion price of 87.5p assuming conversion at the beginning of the year.
9. Tangible ﬁxed assets
Furniture & Computer Motor
equipment equipment vehicles Total
£000 £000 £000 £000
Group
Cost
At 1 May 2005 229 195 56 480
Additions 121 139 – 260
At 30 April 2006 350 334 56 740
Depreciation
At 1 May 2005 (67) (103) (27) (197)
Charge for year (41) (65) (14) (120)
At 30 April 2006 (108) (168) (41) (317)
Net book value
At 30 April 2006 242 166 15 423
At 30 April 2005 162 92 29 283
The net book value of the Group’s ﬁxed assets includes £15,000 (2005 – £29,000) in respect of assets held under hire purchase agreements.
10. Fixed asset investments
2006 2005
£000 £000
Group
Investment in joint ventures
Goodwill 20 30
Share of gross assets 82,359 59,556
Share of liabilities due within one year (2,666) (2,809)
Share of liabilities due outwith one year (74,110) (52,367)
5,603 4,410
Investment in associates
Share of gross assets 60,736 47,906
Share of liabilities due within one year (2,407) (2,343)
Share of liabilities due outwith one year (44,712) (35,754)
13,617 9,809
Other investments 5 5
19,225 14,224
Notes to the financial statements continued
Year ended 30 April 2006 Halladale Group plc  Annual Report & Accounts 2006 45
Investments
Joint ventures Associates Other Total
£000 £000 £000 £000
Investment in shares/partners capital at cost 3,518 6,616 5 10,139
Long term loans 1,410 7,050 – 8,460
Share of prior year results (1) 285 – 284
Share of current year post tax proﬁt 1,457 4,330 – 5,787
Dividends received (781) (4,664) – (5,445)
Total 5,603 13,617 5 19,225
As at 1 May 2005 4,410 9,809 5 14,224
New investments in shares/partners capital 1,000 4,521 – 5,521
New loans – 679 – 679
Loans repaid in year (385) (1,046) – (1,431)
Goodwill amortised (10) – – (10)
Investments realised in year (100) – – (100)
Share of current year post tax proﬁt 1,457 4,330 – 5,787
Dividends received (781) (4,664) – (5,445)
At 30 April 2006 5,603 13,617 5 19,225
Of long term loans to joint ventures and associates totalling £8,460,000 (2005 – £8,714,000), £7,460,000 (2005 – £6,298,000) are interest bearing and
£1,000,000 (2005 – £2,416,000) are non-interest bearing. These loans are subordinated to senior debt in each entity and will be repaid as the relevant
entity disposes of property.
Additional disclosures
Additional information is required under FRS 9 when associates or joint ventures cumulatively or individually exceed certain thresholds with respect to
the Group. The required disclosure, being the Group’s share of the undernoted information for the relevant entities, is as given below. 
Joint ventures Associates
£000 £000
Turnover 24,394 23,817
Fixed assets 376 –
Current assets 81,983 61,181
Liabilities due within one year (2,782) (2,407)
Liabilities due after more than one year (75,364) (52,036)
Halladale
Halladale Opportunity
Opportunity Fund No. 2
Halladale Fund Limited Limited Oban Bay 
Ventures Ltd Partnership Partnership Properties Ltd
Joint ventures £000 £000 £000 £000
Turnover 16,168 1,988 3,650 2,388
Proﬁt before tax 102 549 556 520
Tax (34) – – (190)
Fixed assets 376 – – –
Current assets 69,260 2,386 7,960 2,372
Liabilities due within one year (1,976) (165) (320) (255)
Liabilities due outwith one year (64,473) (2,191) (7,335) (1,362)
Bowen The Anglo Anglo Cumbernauld
Square Cockhedge Halladale Halladale Retail Park
Properties Retail Limited No. 2 Limited No. 3 Limited Limited
Limited Partnership Partnership Partnership Partnership
Associates £000 £000 £000 £000 £000
Turnover 6,388 3,329 1,215 541 6,151
Proﬁt before tax 2,538 359 (187) (86) (49)
Tax (765) – – – –
Fixed assets –––– –
Current assets 131 7 15,354 6,902 13,734
Liabilities due within one year (6) (7) (684) (287) (895)
Liabilities due outwith one year – – (14,834) (6,653) (12,927) Annual Report & Accounts 2006 Halladale Group plc 46
10. Fixed asset investments continued
Subsidiary Associates & Other
companies joint ventures investment Total
£000 £000 £000 £000
Company
Ordinary shares
At 1 May 2005 999 5,252 5 6,256
Realised in year – (100) – (100)
Purchased in year 325 6,201 – 6,526
At 30 April 2006 1,324 11,353 5 12,682
Long term loan
At 1 May 2005 – 7,712 – 7,712
Repaid in year – (1,431) – (1,431)
At 30 April 2006 – 6,281 – 6,281
Total at 30 April 2006 1,324 17,634 5 18,963
Total at 30 April 2005 999 12,964 5 13,968
The principal companies in which the Company’s interest is more than 10% are as follows:
Company name Principal activity Country of registration % of equity held
Subsidiary undertakings
Halladale Developments Ltd Property trading/development 
and management services Scotland 100%
Halladale Asset Management Ltd Property enhancement Scotland 100%
Finford Management Ltd Property management Scotland 100%
Geranium Properties Ltd Property trading and development England 100%
Halladale Investments Ltd Property trading and development Scotland 100%
Halladale (Queen Street) Ltd Property trading and development Scotland 100%
Halladale (Stafford) Ltd Property trading and development Scotland 100%
Halladale (Newport) Ltd Property trading and development Scotland 100%
Halladale (Shaftesbury) Ltd Property trading and development Scotland 100%
Halladale Properties (London) Ltd Property trading and development England 100%
Halladale Ofﬁce (One) Ltd Property trading and development England 100%
Halladale Land Ltd Property trading and development Scotland 100%
Halladale Properties Ltd Property trading and development Scotland 100%
Halladale Investments (London) Ltd Property trading and development England 100%
Halladale (CReAM) Ltd Holder of shares in general partners 
of limited partnerships England 100%
Halladale LP Ltd Holder of interest in limited 
partnerships Scotland 100%
Halladale GP Ltd Holder of shares in general partners 
of limited partnerships Scotland 100%
Halladale (Isle of Wight) Ltd Property trading and development Scotland 100%
Halladale General Partner Ltd Holder of shares in general partners 
of limited partnerships England 100%
Halladale Property Holdings Ltd Intermediate holding company Scotland 100%
Osprey Residential (Rutherglen) Ltd Property trading and development Scotland 100%
Halladale Properties (Fountain) Ltd Property trading and development Scotland 75%
Halladale Developments (Fountain) Ltd Property trading and development Scotland 75%
Rynda Property Investors LLP Fund Management England 90%
Notes to the financial statements continued
Year ended 30 April 2006 Halladale Group plc  Annual Report & Accounts 2006 47
Company name Principal activity Country of registration % of equity held
Joint ventures
Halladale Ventures Ltd Property trading and development Scotland 50% 
Halladale (Brentwood) Ltd Property trading and development Scotland 50% 
Halladale Ventures (Scotland) Ltd Property trading and development Scotland 50%
Halladale Ventures (Brook) Ltd Property trading and development England 50% 
Halladale Ventures (Hammersmith) Ltd Property trading and development Scotland 50% 
Oban Bay Properties Ltd Property trading and development Scotland 75%
The Group’s beneﬁcial interest in Oban Bay 
Properties Limited is 50%
Associates
Bowen Square Properties Ltd Property trading and development England 10% 
Halladale Portfolio Finance Ltd Property trading and development England 10.1%
Woodley Finance Limited Property trading and development England 20% 
The Company also holds interests in the following limited partnerships:
% interest of 
Limited partnership Principal activity Country of registration Company
Joint ventures
Halladale Opportunity Fund Limited Partnership Property trading and development England 50%
Halladale Opportunity Fund No. 2 Limited Partnership Property trading and development England 50%
Brook Properties Limited Partnership Property trading and development Jersey 50%
Associates
The Cockhedge Retail Limited Partnership Property trading and development Scotland 6%
The Anglo Halladale Limited Partnership Property trading and development England 9%
The Anglo Halladale No. 2 Limited Partnership Property trading and development England 30%
The Anglo Halladale No. 3 Limited Partnership Property trading and development England 30%
Halladale Nelson Limited Partnership Property investment England 9.36%
Cumbernauld Retail Park Limited Partnership Property trading and development Scotland 20%
CPI Retail Active Management Programme 
Limited Partnership Property investment Scotland 10%
CPI Retail Active Management Programme (No. 1) 
Limited Partnership Property investment England 10%
CPI Retail Active Management Programme (No. 2) 
Limited Partnership Property investment England 10%
CPI Retail Active Management Programme (No. 3) 
Limited Partnership Property investment England 10%
CPI Retail Active Management Programme (No. 4) 
Limited Partnership Property investment England 10%
CPI Retail Active Management Programme (No. 5) 
Limited Partnership Property investment England 10%
Hammersmith Grove Limited Partnership Property trading and development England 30%
11. Stocks 
Group Company
2006 2005 2006 2005
£000 £000 £000 £000
Properties held for resale or development 91,521 59,152 – –
Included in these ﬁgures is £1,186,000 (2005 – £232,000) of capitalised interest. Annual Report & Accounts 2006 Halladale Group plc 48
Notes to the financial statements continued
Year ended 30 April 2006
12. Debtors
Group Company
2006 2005 2006 2005
£000 £000 £000 £000
Trade debtors 55 149 – –
Amounts due by Group companies – – 45,385 48,676
Amounts due by associates and joint ventures 249 748 213 748
Other debtors 275 5,681 86 692
Deferred tax asset (Note 18) 195 267 – –
Corporation tax debtor – 239 400 –
Prepayments 798 640 442 421
1,572 7,724 46,526 50,537
All debtors are considered to be due within one year.
13. Cash at bank and in hand
Cash at bank and in hand in the Group includes £58,000 (2005 – £3.226m) which can only be used for acquiring properties in connection with a
long term loan or in part repayment of that loan.
14. Creditors: Amounts falling due within one year
Group Company
2006 2005 2006 2005
£000 £000 £000 £000
restated restated
(Note 2) (Note 2)
Bank loans 29,827 4,796 – –
Other loans 500 500 500 500
Trade creditors 2,203 926 56 164
Corporation tax 629 214 69 166
Other taxes and social security 80 543 – 473
Hire purchase creditor 21 29 – –
Amounts owed to Group undertakings – – 19,937 30,046
Accrued charges and deferred income 13,702 3,914 507 361
46,962 10,922 21,069 31,710
Bank loans comprise the following:
Loan Finance fees Net Margin over
Property secured £000 £000 £000 bank base rate Bond and ﬂoating charge
South Street, Newport, Isle of Wight 7,282 – 7,282 1.75% Halladale (Newport) Ltd. and
Halladale (Isle of Wight) Ltd.
Cochrane Square, Glasgow 8,078 – 8,078 1.75% Halladale (Queen Street) Ltd.
Myrtle Walk, Bingley 4,800 (5) 4,795 1.25% Geranium Properties Ltd.
St. Mary’s Gate, Shefﬁeld and 
Balnagask Road, Aberdeen 9,480 (20) 9,460 1.25% Halladale Investments 
(London) Ltd.
29,640 (25) 29,615
Current tranche of a loan due after 
more than one year 212
29,827
Other loans of £500,000 are the current tranche of a loan due outwith one year.  Halladale Group plc  Annual Report & Accounts 2006 49
15. Creditors: Amounts falling due after more than one year
Group Company
2006 2005 2006 2005
£000 £000 £000 £000
Bank loans 22,025 45,784 1,599 5,348
Other loans 500 1,000 500 1,000
Deferred purchase consideration 2,500 – – –
25,025 46,784 2,099 6,348
Bank loans comprise the following:
Loan Finance fees Net Margin over
Property secured £000 £000 £000 bank base rate Bond and ﬂoating charge
Various 3,669 – 3,669 10.29%* Halladale Investments Ltd.
Various 5,921 (49) 5,872 1.5% Halladale (Stafford) Ltd.
One Sixty, Dundee Street, Edinburgh 7,150 – 7,150 1.5% Halladale Properties (Fountain) 
Ltd. and Halladale 
Developments (Fountain) Ltd.
Various 1,696 – 1,696 8.5%* None
Shaftesbury House, Glasgow 3,750 (16) 3,734 1.5% Halladale (Shaftesbury ) Ltd.
Revolving credit fees – (96) (96) Halladale Group plc
22,186 (161) 22,025
*These rates are all inclusive and ﬁxed.
Other loans represent sums advanced by The Throgmorton Trust plc, a shareholder. These sums are unsecured, bear interest at 8% per annum ﬁxed
and are repayable in tranches from 30 June 2002 to 30 June 2007. The tranche of £500,000 due on 30 June 2006 is shown in Creditors: Amounts
falling due within one year (Note 14).
Bank loans are repayable as follows:
Group Company
2006 2005 2006 2005
£000 £000 £000 £000
Due within 1-2 years 7,684 26,172 – 2,180
Due within 2-5 years 11,522 16,415 1,696 3,168
Due after more than 5 years 2,819 3,197 – –
22,025 45,784 1,696 5,348
The loans due outwith ﬁve years are the relevant portion of loans being repaid in tranches from 2001 to 2014.
16. Convertible unsecured loan stock
On 14 May 2004 the Company issued £10m 7% convertible unsecured loan stock (CULS). The CULS are convertible at the option of the holder at 
any time after 17 March 2007 into ordinary shares at the rate of 200 new ordinary shares per each £175 of nominal value. If conversion does not
take place before May 2011 the loan stock is redeemed at par. Interest is payable six monthly in arrears. The CULS are shown at fair value at the 
date of issue less costs of issue totalling £483,000 which are being amortised to the proﬁt and loss account over seven years.
2006 2005
£000 £000
restated
(Note 2)
Group and Company
Convertible unsecured loan stock 10,000 10,000
Classiﬁed as equity in accordance with FRS 25 (150) (150)
Costs of issue (483) (483)
Issue costs amortised to date 138 69
9,505 9,436 Annual Report & Accounts 2006 Halladale Group plc 50
Notes to the financial statements continued
Year ended 30 April 2006
17. Financial assets and liabilities
The Group holds ﬁnancial instruments only to manage the interest rate risk arising from its borrowings. As all transactions are undertaken in sterling
and within the UK, there is no perceived currency risk. No speculative transactions are permitted.
The Group’s borrowings, other than one loan of £1,000,000 (2005 – £1,500,000) and the CULS (Note 16), are wholly in relation to and secured 
by properties held as stock. Accordingly, a relatively short term view is required to be considered when reviewing the interest rate risk. This risk is
managed by securing a mixture of ﬁxed and ﬂoating rate debt and by the use of interest rate swaps. The actual balance of these measures is
determined by the nature of the asset to which the borrowing relates and is established and reviewed in consultation with the relevant lender.
The Group has deﬁned ﬁnancial assets and liabilities as those of a ﬁnancial nature, being cash and borrowings. Short term debtors and creditors,
taxation and prepayments and accruals are not considered.
2006 2005
£000 £000
restated
(Note 2)
Financial assets
Cash at bank and in hand 5,014 5,362
Financial liabilities
Bank loans 51,852 50,580
Other loans 1,000 1,500
Convertible unsecured loan stock 9,505 9,436
62,357 61,516
Loans repayable in 
One year or less, or on demand 30,327 5,296
Within one to two years 8,184 26,672
Within two to ﬁve years 11,522 16,915
Over ﬁve years 12,324 12,633
62,357 61,516
The interest proﬁle of the Group’s ﬁnancial liabilities at 30 April 2005 and 30 April 2006 were:
Weighted 
average
Weighted period for 
average ﬁxed which rate is 
Floating rate Fixed rate Total interest rate ﬁxed (years)
30 April 2006 £000 £000 £000
Bank loans 46,275 5,577 51,852 9.48% 4.34
Other loans – 1,000 1,000 8% 0.57
Convertible unsecured loan stock – 9,505 9,505 7% 5.00
46,275 16,082 62,357 Halladale Group plc  Annual Report & Accounts 2006 51
Weighted 
average
Weighted period for 
average ﬁxed which rate is 
Floating rate Fixed rate Total interest rate ﬁxed (years)
30 April 2005 £000 £000 £000
Bank loans 41,080 9,500 50,580 9.63% 5.34
Other loans – 1,500 1,500 8% 1.17
Convertible unsecured loan stock – 9,436 9,436 7% 6.00
41,080 20,436 61,516
Floating rate loans bear interest based on short term inter-bank rates (mainly 3 month LIBOR) and base rates.
Book value Fair value
2006 2005 2006 2005
£000 £000 £000 £000
restated restated
(Note 2) (Note 2)
Cash at bank and in hand 5,014 5,362 5,014 5,362
Bank loans (51,852) (50,580) (52,599) (51,438)
Other loans (1,000) (1,500) (1,002) (1,507)
Convertible unsecured loan stock (9,505) (9,436) (9,650) (9,436)
(57,343) (56,154) (58,237) (57,019)
Fair value has been calculated using a discounted cash ﬂow approach. It is the intention of the Group to repay its bank and other loans at maturity.
Borrowing facility
The Group’s various undrawn committed borrowing facilities are:
2006 2005
£000 £000
Expiring in:
One year or less, or on demand 2,500 1,500
18. Deferred tax asset
Deferred tax
Group £000
1 May 2005 267
Credit to proﬁt and loss account – current year (48)
Credit to proﬁt and loss account – prior year adjustment (24)
As at 30 April 2006 195
Analysis of the deferred tax balances are as follows:
2006 2005
£000 £000
Excess of capital allowances over depreciation (1) (1)
Asset arising on inter-company proﬁts not realised 196 219
Other timing differences – 49
195 267
Deferred tax has been computed at the expected long term rate of 30% (2005 – 30%). Annual Report & Accounts 2006 Halladale Group plc 52
Notes to the financial statements continued
Year ended 30 April 2006
19. Share capital 
2006 2005 2006 2005
No. No. £000 £000
Authorised
Ordinary shares at £0.25 each 96,000,000 96,000,000 24,000 24,000
Redeemable deferred shares at £1.00 each 1,546,875 1,546,875 1,547 1,547
97,546,875 97,546,875 25,547 25,547
Allotted, issued and fully paid
Ordinary shares of £0.25 each 40,515,837 27,516,556 10,128 6,879
Equity portion of CULS under FRS 25 (see Note 2) 150 150
10,278 7,029
During the year the Company issued 12,986,281 new ordinary shares of 25p each at a price of 110p per share as a share placing and 13,000 new
ordinary shares of 25p each at a price of 59p per share on the exercise of staff share options. 
After the year end, on 16 June 2006, the Company  issued a further 11,278,194 new ordinary shares at 133p per share as a placing.
20. Contingent liabilities 
Halladale Group plc has guaranteed bank loans totalling £4,681,000 (2005 – £9,792,000) to subsidiary companies.
The Company has guaranteed interest shortfall in favour of Bank of Scotland in connection with a loan to Anglo Halladale No. 3 Limited Partnership.
The guarantee is limited to £175,000 p.a. but subsists until the property is sold.
21. Commitments
At 30 April 2006 the Group was committed to making the following payments during the next year under operating leases (land and buildings):
2006 2005
£000 £000
Lease which expire:
Between two and ﬁve years 34 –
After more than ﬁve years 115 27
149 27
22. Pension commitments
Contributions are made payable to the personal pension plans of the Group’s eligible employees on the basis of a ﬁxed percentage of salary.
The pension costs charged to the proﬁt and loss account of the Group amounted to £206,000 (2005 – £156,000) for the year.
23. Proﬁt of parent company
As permitted by Section 230 of the Companies Act 1985, the proﬁt and loss account of the Company is not presented as part of these ﬁnancial
statements. The parent Company’s proﬁt for the year amounted to £6,149,000 (2005 – £3,525,000). Halladale Group plc  Annual Report & Accounts 2006 53
24. Related party transactions
At the year end, Halladale Group plc had loans due from its associates and joint ventures as follows:
2006 2005
£000 £000 % Share
Anglo Halladale No. 2 Limited Partnership 3,337 3,158 30
Anglo Halladale No. 3 Limited Partnership 1,713 1,714 30
Halladale Opportunity Fund No. 2 Limited Partnership 1,170 1,170 50
Cumbernauld Retail Park Limited Partnership 1,000 –20
Halladale Nelson Limited Partnership 1,000 1,000 9.35
Halladale Opportunity Fund Limited Partnership 240 620 50
The Cockhedge Retail Limited Partnership – 626 6
Oban Bay Properties Limited – 449 50
Bowen Square Properties Limited – 299 10
Anglo Halladale Limited Partnership – 426 9
8,460 9,462
The Group invoiced the following amounts in the year in respect of management fees, incentivised fees and acquisition fees:
Outstanding
2006 2005 at year end
£000 £000 £000
Halladale Ventures Ltd 716 438 –
Bowen Square Properties Ltd – 56 –
Woodley Real Estate Ltd – 7–
Halladale Portfolio Finance Ltd – 30 –
The Cockhedge Retail Limited Partnership 1,740 95 –
CPI Retail Active Management Programme Limited Partnership 497 128 57
Halladale Opportunity Fund Limited Partnership 21 48 –
Halladale Opportunity Fund No. 2 Limited Partnership 39 5–
The Anglo Halladale Limited Partnership 45 50 –
The Anglo Halladale No. 2 Limited Partnership 121 33 –
The Anglo Halladale No. 3 Limited Partnership 105 ––
Cumbernauld Retail Park Limited Partnership 758 68 –
Halladale Nelson Limited Partnership 143 52 40
Halladale Haworth Newton Abbot Limited and Halladale Haworth Carlisle Limited – 65 –
4,185 1,075 97
25. Post balance sheet events
On 30 June 2006, the Group disposed of its interest in Oban Bay Properties Limited, a joint venture company. Annual Report & Accounts 2006 Halladale Group plc 54
Proforma unaudited consolidated balance sheet
As at 30 April 2006
2006 2005
£000 £000
restated
(Note 2)
Fixed assets
Tangible assets 423 283
Investments 27,458 20,389
27,881 20,672
Current assets
Stocks 102,734 62,543
Debtors 1,572 7,724
Cash at bank and in hand 5,014 5,362
109,320 75,629
Creditors: Amounts falling due within one year (46,962) (10,922)
Net current assets 62,358 64,707
Total assets less current liabilities 90,239 85,379
Creditors: Amounts falling due after more than one year (25,025) (46,784)
Convertible unsecured loan stock (9,505) (9,436)
Net assets 55,709 29,159
Capital and reserves
Share capital 10,278 7,029
Capital redemption reserve 1,772 1,772
Capital reserve – 76
Share premium account 15,932 5,730
Revaluation reserve 19,446 9,556
Proﬁt and loss account 8,281 4,996
Total shareholders’ funds 55,709 29,159
The unaudited proforma balance sheet was prepared using the Group’s accounting policies as amended to include such adjustments as the directors
consider appropriate to reﬂect the impact of open market valuations arising from review of properties held for resale and those held in joint ventures
and associates undertaken by DTZ Debenham Tie Leung and FPD Savills as at 30 April 2006. This is the only amendment to net assets.  Halladale Group plc  Annual Report & Accounts 2006 55
Five year record
2006 2005 2004 2003 2002
Proﬁt before tax £6.29m £3.92m £2.61m £1.69m £1.15m
Basic earnings per ordinary share (pence) 10.61 10.42 9.99 7.21 5.34
Dividends per ordinary share (pence) 3.8 2.9 2.1 1.6 1.25
Proforma triple net asset value per ordinary share (pence) 121.6 93.3 82.46 68.41 63.65
Total portfolio under management £632m £450m £205m £145m £116m
Total transactions in portfolio under management £455m £347m £155m £120m £82m Annual Report & Accounts 2006 Halladale Group plc 56
Shareholder information
Financial calendar
Year end 30 April 2006
Year end results announced 11 July 2006
Annual Report published 14 August 2006
Annual General Meeting 12 September 2006
Secretary
M.J. Harkin, BAcc, CA
Registered ofﬁce
93 West George Street
Glasgow G2 1PB
Company number
SC134255
Professional advisors
Independent auditors
Deloitte & Touche LLP
Glasgow
Broker and nominated advisor
Collins Stewart
8th Floor, 88 Wood Street
London EC2V 7QR
Solicitors
Eversheds LLP
Senator House
85 Queen Victoria Street
London EC4V 4JL
Ashurst
Broadwalk House
5 Appold Street
London EC2A 2HA
McGrigors
Paciﬁc House
70 Wellington Street
Glasgow G2 6SB
Valuers
DTZ Debenham Tie Leung
One Curzon Street
London W1A 5PZ
FPD Savills
20 Grosvenor Hill
London W1K 3HQ
Clearing bank
Bank of Scotland
Glasgow Central Branch
Gordon Street
Glasgow G1 3RS
Registrars
Capita Registrars Limited
Northern House
Woodsome Park 
Fenay Bridge
Huddersﬁeld HD8 0LA Designed and Produced by Rare Corporate Design, London Halladale Group plc
39 George Street
Edinburgh
EH2 2HN
93 West George Street
Glasgow
G2 1PB
33 Davies Street
London
W1K 4LR
Telephone: 0845 070 4633
Email: all@halladale.co.uk
Web: www.halladale.co.uk
Registered in Scotland no. 134255