09
Telford Homes Plc
annual
report and
accounts
Telford Homes Plc annual report and accounts 2009 www telfordhomes plc uk
Telford RA Cov  15/6/09  17:13  Page 1 financial highlights 2009
revenue:
£106.7m
09 £106.7m
08* £96.8m
adjusted gross
profit margin:**
20.0%
09 20.0%
08* 21.6%
adjusted operating
margin:**
11.3%
09 11.3%
08* 10.6%
profit before tax and
exceptional items:
£7.3m
09 £7.3m
08* £6.5m
number of open
market completions:
350 properties
09 350
08* 306
earnings
per share:
8.1p
09 8.1p
08* 12.2p
gearing:
206.6%
09 206.6%
08* 191.5%
uncovered
gearing:
80.7%
09 80.7%
08* 65.6%
development
pipeline:
2,635 properties
09 2,635 properties
08* 2,959 properties
*Restated to reflect the adoption of IFRIC 15 and IAS 23 (revised)
**Before all interest charges including those expensed within cost of sales of
£3.7 million (2008 - £3.9 million) and exceptional items.
Telford RA Cov  15/6/09  17:13  Page 2 Telford Homes Plc 2009 02
financial highlights 01
chairman’s statement 05
chief executive’s review 07
financial review 15
business & financial review
area of operation 23
operational structure 25
key risks and uncertainties 27
operating review
corporate responsibility
directors and advisors 39
policy on corporate governance 41
directors’ remuneration report 43
report of the directors 45
statement of directors’ responsibilities 48
auditors’ report 49
corporate governance
group income statement 53
balance sheet 54
statement of changes in equity 55
cash flow statement 56
statement of accounting policies 57
notes to the financial statements 61
development guide 82
financial statements
contents
health and safety 31
environment and sustainability 33
regeneration 35
Telford RA Text  15/6/09  18:02  Page 1 knowledge
Telford RA Text  15/6/09  18:02  Page 2 business & financial review
Telford RA Text  15/6/09  18:02  Page 3 05     Telford Homes Plc 2009
chairman’s statement
“I am extremely
pleased that
Telford Homes is
able to report a
profit before tax of
£7.3 million before
exceptional items”
David Holland 
Chairman (Non-Executive)
I am extremely pleased that Telford Homes is
able to report a profit before tax of £7.3 million
before exceptional items and a profit before
tax of £4.3 million after exceptional items for 
the year to 31st March 2009.
Our focus over the last six months has been on
achieving legal completions on properties pre-
sold to the investor market, primarily during 2006
and 2007, in an environment where mortgage
availability is heavily restricted and confidence 
in the housing market and the wider economy
remains low. Despite this the sales and customer
service teams have been very successful in
working with each customer individually to
secure as many completions as possible.
In the past year Telford Homes has not
committed to new land purchases beyond its
existing partnerships with affordable housing
providers, nor has the Group commenced
construction on several sites that are ready for
development. The Group is working hard to
secure contracts to construct a number of its
developments entirely for affordable housing
and the £57 million grant programme that
Telford Homes has recently agreed with the
Homes and Communities Agency (“HCA”) is
assisting the Group in ensuring that profitable
construction work can continue. Together, the
grant programme and partnerships with housing
associations will ensure the Group plays a role in
continuing the supply of new housing at a time
when construction of new homes has slowed to
just 25 per cent of government targets.
I am also delighted to report that the excellent
relationships the Group has with each of the banks
financing Telford Homes have been critical in
concluding negotiations to renew or extend
existing facilities. Securing this debt finance
enables the Group to focus on generating
operational cash flows and reducing gearing
where appropriate.
Control of cash remains a priority over the coming
months as the Group continues to pursue legal
completions on pre-sold properties. Despite the
success to date the Board must remain cautious
of an increase in the rate of failed contracts. As 
a result the Board has concluded that it is not
appropriate to pay any dividend in relation to 
the year to 31st March 2009. Telford Homes
remains on a sound operational and financial
platform and depending on market conditions
the Board hopes and expects to be able to 
return to paying dividends in the near future.
David Holland
Chairman (Non-Executive)
26th May 2009
Telford RA Text  15/6/09  18:02  Page 4 Telford Homes Plc 2009 06
business & financial review
Merchants’ Quarter E3
Telford RA Text  15/6/09  18:02  Page 5 “The Board is cautiously
optimistic in its outlook
and believes Telford
Homes is well placed
to benefit from a future
improvement in
market conditions”
Andrew Wiseman
Chief Executive
In spite of the unprecedented and difficult
financial environment for the Group’s investor
customers the number of open market property
completions achieved in the year to 31st March
2009 rose to 350 from 306 in the previous year. Total
revenue has grown by 10 per cent to £106.7 million
with profit before tax and exceptional items up 12
per cent to £7.3 million.
The Group reported in September 2008 that new
accounting standards had resulted in a change
to its accounting policies in relation to open
market private homes with revenue and profit
now recognised on legal completion. On
affordable homes, sold to housing associations
under construction contracts, revenue and profit 
is recognised on a percentage of completion
basis. There are currently over 700 affordable
homes being developed and payments will
continue to be received from the Group’s
housing association partners as construction 
of these homes progresses.
Sales
The strategy of Telford Homes has always been
to pre-sell open market homes at a very early
stage of construction whenever possible. The
success of this strategy in the past has meant
that the Group has had relatively few properties
available for sale over the past twelve months.
Market conditions have affected the confidence
of purchasers of new homes and as such the
marketing of unsold homes on developments
due for completion in 2010 and 2011 has been
held back while construction continues. With
substantial forward sales on these projects,
including the affordable housing, the Group’s
decision to continue building has been taken
with a recognition that lower open market sales
prices may be realised in the future.
Efforts to secure new sales have been
concentrated at the Group’s developments 
at Queen Mary’s Gate in South Woodford and
Nayland Court in Romford. At Queen Mary’s Gate
the first phase of the development, including 184
open market homes, was completed in May 2008
and all but one have been sold and occupied
with the final property now reserved. The second
phase, including 93 open market homes, was
completed in November 2008 and 29 have been
sold to date. The third phase including 95 open
market homes will not be build complete until the
second half of 2010. Overall sales at Queen Mary’s
Gate have been considerably slower throughout
the last twelve months although eight sales have
completed in the last twelve weeks with a further
four reserved and one property where contracts
have been exchanged. Visitor levels are now
much higher than at the end of 2008 and this 
gives the Board an expectation that a slow but
steady rate of sales will continue to be achieved
through the rest of this year.
07     Telford Homes Plc 2009
chief executive’s review
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business & financial review
Metro East E3
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chief executive’s review continued
OneStratford E15
Telford RA Text  15/6/09  18:02  Page 8 20,000
0
30,000
40,000
50,000
60,000
70,000
80,000
Mar 09
Feb 09
Jan 09
Dec 08
Nov 08
Oct 08
Sep 08
Aug 08
Jul 08
Jun 08
May 08
Apr 08
Mar 08
Feb 08
Jan 08
Seasonally adjusted monthly number of mortgage approvals for house purchases by individuals
Source: Bank of England
At Nayland Court in Romford, Telford Homes has
26 build complete homes remaining for sale with
demand for these being maintained by the ‘My
Choice Home Buy’ scheme (“MCHB”) from the
HCA which provides a mortgage for up to 50
per cent of the home with a very low deposit
and interest rate. The processing of MCHB
applications suffers from periodic delays in the
release of funds but the Group has seven homes
currently reserved on the development all using
this product. Here again, recent progress means
the Group would expect to sell the majority of
the remaining properties during 2009.
Telford Homes will bring other developments
back to the market when conditions are right
and when construction on those developments
reaches an appropriate stage to attract buyers.
Completions
From 1st October 2008 Telford Homes began 
a rolling programme where 613 open market
homes sold in previous years would become
due for legal completion in the period up to
March 2010. As at 31st March 2009, 220 of 
these properties had been legally completed.
The key issues for the Group’s customers are the
restriction of mortgage finance for buy-to-let
investors and the increasing caution applied by
valuation surveyors with a lack of comparable
transactions. Importantly the Group’s properties
continue to attract tenants for its investor
customers and this underpins their value.
The general problems experienced in securing
mortgages are illustrated by statistics for the
number of mortgage approvals for house
purchases in 2008. The Bank of England
seasonally adjusted figures show that the number
of approvals per month fell rapidly from 71,000 in
January 2008 to 27,000 in November 2008. Since
then there has been some improvement in these
statistics with the number of approvals reaching
39,000 in March 2009. This is still well below normal
levels and, whilst to date the process of achieving
new sales and completions has not got any easier,
the Board hopes it is an indication that mortgage
availability will improve during the rest of 2009.
Telford Homes continues pro-active
communication with each purchaser to ensure
their financial arrangements are instigated at
the right stage and the Group has been
working with each of them to maximise the
chances of achieving completions. In addition
Telford Homes has maintained a dialogue with
some of the major lenders and their valuers to
give maximum comfort in the pricing of the
Group’s apartments through transparency of
information and supporting evidence. The
Board has reported in the past that the Telford
Homes approach to sales is based on net prices
agreed at the point of sale with no undisclosed
discounts or incentives and this has proved
extremely important both to customers of
Telford Homes and their lenders.
The Group will rescind contracts on properties
where its customers are unable to complete 
the purchase, retaining the 10 per cent deposit
already paid. Where necessary, Telford Homes
will also take legal action against the defaulting
purchasers as a result of their failure to honour
contractual obligations.
Telford Homes Plc 2009 10
business & financial review
Telford RA Text  15/6/09  18:02  Page 9 11     Telford Homes Plc 2009
Despite achievements to date the Group is
experiencing significant delays in securing each
completion. As a result the Board has positioned
Telford Homes to withstand an increased number
of delays and failures. The total number of failures
in the year to March 2010 is forecast to reach
between 60 and 80 of the pre-sold homes due to
complete over that period, assuming there is no
improvement in mortgage availability.
Telford Homes has contingency plans in place to
deal with failed contracts which will mitigate the
impact on cash flow. These plans include
temporarily securing tenants for the properties
before reselling them into an orderly market. The
Group has obtained outline terms from each of
its three banks to provide mortgages against a
portfolio of these rented properties at between
50 and 60 per cent of their value and in addition
the Group is well advanced with contractual
negotiations to secure £6 million of funding from
alternative sources at a 75 per cent loan to value
ratio. This will enable the business to withstand
significantly more failures than anticipated as 
well as providing cash resources to further our
partnerships with housing associations and
housing transfer organisations.
HCA and affordable housing
The Board has taken a number of steps to
maintain activity in the construction of new homes
through partnerships with housing associations and
the HCA. As reported on 20th April 2009 the Group
has agreed a grant programme with the HCA of
£57 million across four sites owned by Telford Homes
and three estate regeneration projects in
partnership with Eastend Homes. The grants will
part finance over 400 affordable homes over 
the next three years.
Partnerships with affordable housing providers
remain integral to the business and typically 35
per cent of any development is sold for
affordable housing. However in order to de-risk
new projects the Group has sought to construct
some developments entirely for its housing
association partners utilising HCA grant. Although
at a lower margin, this gives Telford Homes the
ability to commence construction on these sites
with secured cash inflows over the course of the
development. The Group has recently entered
into a contract with Family Mosaic to construct 63
affordable homes across two sites in Queens
Road, Southwark and a contract with Gallions
Housing Association to construct 53 affordable
homes in St Anne’s Row, E14. The Group has also
agreed terms to construct 64 affordable homes
for Poplar HARCA in Lanrick Road, E14.
chief executive’s review continued
SoBow E3
Telford RA Text  15/6/09  18:02  Page 10 Telford Homes Plc 2009 12
Partnerships and the development pipeline
Telford Homes has maintained its prudent
approach to investment in land during the last
twelve months whilst retaining financial resources
to deploy in its partnerships with Eastend Homes
and Poplar HARCA. The Group reported last year
that these housing transfer organisations are both
significant land owners in East London and have
chosen Telford Homes to be their partner on a
number of large regeneration schemes.
The British Estate, E3, has set the model for the
partnership with Eastend Homes where land
payments made by Telford Homes have been
reinvested into the third party refurbishment of
existing homes on the estate. The Group has now
entered into a contract to build 54 affordable
homes on the St George’s Estate, E1 for Eastend
Homes along with a construction contract for
infrastructure works required on the estate. In
addition Telford Homes has option contracts over
land on the estate to provide 139 open market
homes and these are due from 2010 onwards.
Construction of the affordable homes is now
underway and as such the Group has drawn 
its first grant tranche from the HCA.
Telford Homes continues to progress master plans
for the regeneration of five other estates with
Eastend Homes and the Group expects to
commence construction of 74 affordable homes
on the Bede Estate, E3, in autumn 2009. Bede and
the other estates are expected to add in excess
of 900 properties to the development pipeline
over the next few years and the partnership with
Poplar HARCA an additional 400 properties.
As at 31st March 2009 the total pipeline of open
market and affordable properties not yet legally
completed was 2,635 including 2,400 with
planning permission. This total includes sites
under option contracts within the control of the
Group. Of these properties 1,503 are under
construction with 1,115 currently secured by
contracts exchanged either for open market
sale or for affordable housing. Open market
pre-sales contracts totalled £128.4 million at 31st
March 2009 although some of these will fail 
to complete leaving the Group with unsold
property. Affordable housing revenue contracted
but not yet recognised totalled £34.6 million at
the year end and this is secured through payments
received from housing associations as
construction progresses.
business & financial review
Decorum E10
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chief executive’s review continued
Planning
The Group’s focus on East London gives Telford
Homes significant development presence that
engenders respect from the local planning
authorities and the Group has achieved a
number of important permissions this year. These
include 193 homes on the St George’s Estate,
236 homes on the Bede Estate and 209 homes
on the Holland Estate. The Group is working 
with both Eastend Homes and Poplar HARCA 
to achieve planning permissions on land owned
by them that will later be developed under 
the existing partnerships. Only two of the sites
owned directly by Telford Homes do not have
detailed planning permission and the Group is
progressing plans on each of these with the 
aim of receiving approvals during 2009.
People
In December 2008 the Group reported that 
the Board expected to reduce the number 
of people employed by Telford Homes by
between a quarter and a third before the end of
2009, depending on success in securing projects
that do not require a cash investment. The HCA
grant programme and the Group’s expectation
of constructing affordable housing on a number
of developments gives the Board confidence
that the number of redundancies will be less
than originally feared. As ever, and in particular
during these difficult times with pay frozen and
no bonuses being paid, the Board is extremely
grateful for the commitment and effort shown
by all of the Group’s employees.
Construction
Despite the impact that market conditions and
the redundancy programme have had on
morale, Telford Homes has continued to produce
well designed and well built developments. This is
a real credit to the work of the operating divisions
in a period that has seen continual appraisal of
prospects and a consequent re-organisation,
alongside redundancies.
The quality of the finished product continues 
to be ensured by the work of the Telford Homes
Customer Service team that provide quality
control and give a consistent ‘face’ to customers.
The delivery of a first rate home is a fundamental
step in the completion process.
Construction is the heart of Telford Homes and
Health and Safety is at the forefront of the
Group’s working practices. The Group has
continued to develop and monitor its policies
and procedures during the year and its very
good record has been maintained. 
Current trading and outlook
The focus at the start of the new financial year
remains on maximising positive cash flows into the
business including achieving legal completions.
Already since 1st April 2009 over 50 open market
homes have been completed and handed over to
customers and this progress remains encouraging.
0
10,000
20,000
30,000
40,000
50,000
60,000
First quarter 2009 First quarter 2008 First quarter 2007
Number of new homes starts recorded in January to March of each year 
Source: NHBC statistics
Telford RA Text  15/6/09  18:02  Page 12 Telford Homes Plc 2009 14
business & financial review
The Group will continue to work on securing
profitable contracts to construct affordable
housing on some of its sites with the added 
cash flow benefit to Telford Homes. This will be
substantially supported by the grant programme
with the HCA and the Group expects to draw up
to 60 per cent of its total allocation before 31st
March 2010. This will partly be utilised as payment
for land purchased from the Group’s development
partners. Alongside this, sales and marketing
activity will be concentrated on the completed
units at Queen Mary’s Gate, where we are
experiencing increased interest from potential
purchasers, and Romford before turning to other
sites again at the appropriate time and when
market conditions are right.
Across the country construction of new homes has
reached a new low for recent years with National
House-Building Council (“NHBC”) statistics for new
home starts at 16,200 for the first quarter of 2009
against 37,800 in the first quarter of 2008 and 53,700
for the same period in 2007. This will inevitably lead
to an increased shortage of new homes in the next
few years and Telford Homes will be ready to meet
the challenge of satisfying demand when the time
comes. East London will be at the forefront of
increasing the supply of new homes in London 
as regeneration of the area continues.
The Board is cautiously optimistic in its outlook due
to increased activity at Queen Mary’s Gate and
legal completions on pre-sold homes progressing
as well as could have been anticipated. The HCA
grant programme and the Group’s partnerships
with affordable housing providers will underpin the
performance of Telford Homes in the next few
years. The Board believes the business is now in a
strong position and is well placed to benefit from
a future improvement in market conditions.
Andrew Wiseman
Chief Executive
26th May 2009
Stadthaus N1 Casa E14
Telford RA Text  15/6/09  18:02  Page 13 “Control of cash and
careful monitoring of
cash flow forecasts
has been critical
over the last
twelve months”
Jonathan Di-Stefano 
Financial Director
Control of cash and careful monitoring of cash
flow forecasts has been critical over the last
twelve months. This has included ensuring that the
Group’s banking arrangements and facilities are
sufficient and capable of supporting the business
in the future. Negotiations with each of the three
banks funding Telford Homes have resulted in
new and extended facilities with appropriate
covenants and I am pleased that the Group’s
relationships with the banks remain as strong as
ever in a very difficult economic climate.
Accounting changes
On 25th September 2008 the Group announced
changes to its accounting policies as a result of
the early adoption of two new accounting
standards, IFRIC 15 and IAS 23 (revised). Revenue
and profit from the sale of open market private
homes is now recognised on legal completion. 
In addition borrowing costs are capitalised within
inventories on a site by site basis and expensed
through cost of sales as and when revenue is
recognised. These changes are reflected in the
results to 31st March 2009 and the previous year
has been restated on the same basis. Further
details are provided in note 21.
In addition the Group has increased the number
of subsidiaries in its ownership during the year with
trading activity taking place in a subsidiary for the
first time and trading continuing in the Group’s
jointly controlled entities. As a result the 2009
financial statements have been prepared as
consolidated Group accounts with comparative
information provided for 2008.
Operating results
Revenue increased to £106.7 million from £96.8
million with 350 open market completions secured
at an average price of £253,000. Adjusting for
homes sold through jointly controlled entities,
where the Group recognises half of the revenue
and profit, the total revenue from open market
housing and commercial units in the year was
£83.2 million, with a further £22.3 million arising from
progress on construction contracts for affordable
housing and £1.2 million of other income.
Gross profit before exceptional items was £17.6
million which is stated after expensing loan interest
that has been capitalised within inventories under
the new accounting standard, IAS 23 (revised).
Total loan interest included within cost of sales was
£3.7 million and before charging this interest the
gross margin in the year was 20.0 per cent against 
a restated adjusted margin of 21.6 per cent in 2008.
Despite a move to undertake lower risk and lower
margin construction work, such as the development
of affordable housing, the margin before interest 
has held at the Group’s target level for a normal
economic environment. This is primarily due to
revenue and profit being recognised on legal
completion of properties which were secured 
by contract before the downturn in the 
property market. 
In the coming year Telford Homes expects to
undertake more development for housing
associations at lower margins commensurate with
the risk and also expects an increasing number of
previously sold homes to fail to complete at their
original contract price. Both of these factors will
result in a lower reported margin in the future.
15     Telford Homes Plc 2009
financial review
Telford RA Text  15/6/09  18:02  Page 14 Telford Homes Plc 2009 16
business & financial review
OneStratford E15
Telford RA Text  15/6/09  18:03  Page 15 The operational teams continue to monitor and
control development costs in a period that has
seen significant changes in some raw material
costs, due in many cases to adverse movements
in exchange rates, but has also seen a gradual
decline in labour and subcontract costs as the
demand for construction work has fallen. The
Group’s commercial teams are focused on
achieving cost savings in the coming months
and, while maintaining good relationships with 
all suppliers, they will ensure that Telford Homes
achieves appropriate tender prices in the 
current market.
Total build costs in the year to 31st March 2009
were £79 million up from £76 million last year with
the rate of expenditure declining over the last six
months as developments have been completed
and have not been replaced by new site starts.
Telford Homes has taken a cautious approach to
commencing construction on some sites where
future revenues cannot be substantially secured
at an early stage in the development.
The operating margin before exceptional items
and interest charged to cost of sales was 11.3 per
cent to 31st March 2009, up from 10.6 per cent
last year. Administrative expenses are carefully
controlled and have reduced year on year by
three per cent. The Group has taken the decision
not to increase salaries or to pay any bonuses to
employees this year while the threat of
redundancies remains. Selling expenses are down
significantly, falling by 41 per cent, in keeping with
reduced sales and marketing activity in the last
twelve months.
Exceptional items
The exceptional items reported in the year to 31st
March 2009 are primarily write downs to the value
of land and work in progress across a number of
sites totalling £2.9 million along with £0.1 million in
relation to redundancy costs. The write downs
represent less than two per cent of the value of
inventories. Write downs have not been required
on developments where the Group expects to
construct 100 per cent affordable housing at a
positive margin.
Interest
Total interest paid in the year was £6.4 million
reduced from £7.4 million last year. Average
borrowings were higher in the year to 31st March
2009 at £113 million against £93 million last year
and therefore significant savings have been
achieved as a result of the fall in the base rate
over the course of the last twelve months. Prior 
to refinancing the majority of the Group’s loans
were linked to the base rate. Interest charged to
the income statement includes £3.7 million in cost
of sales (2008 - £3.9 million) and a further £1.2
million of finance costs (2008 - £0.4 million)
17     Telford Homes Plc 2009
financial review continued
Queen Mary’s Gate E18
Telford RA Text  15/6/09  18:03  Page 16 Telford Homes Plc 2009 18
primarily as a result of suspending the capitalisation
of interest on certain sites that are not progressing
in terms of design or construction.
Interest received in the year was £0.2 million,
down from £0.5 million last year as a result of
lower interest rates on deposits.
All bank facilities have been extended, renewed 
or refinanced over the last few months. Going
forward interest will be charged on the Group’s
facilities at base rate plus a margin of between
2.5% and 4.0% or LIBOR plus a margin of between
2.0% and 3.0%. The rates Telford Homes has
secured are competitive in the current market
and recognise the Group’s long term relationships
and the quality of the information provided 
to each bank to assess the risk inherent in 
each development.
Borrowings
All of the companies within the Telford Homes
Group use loan finance to acquire development
land and undertake site construction. Loan
facilities are in place with three banks and are
secured by debentures and by charges over
development sites.
The Group has site specific loan facilities with
Allied Irish Bank totalling £27.6 million in respect
of certain development sites. These facilities
were renegotiated in April 2009. At 31st March
2009 the Group had utilised £21.2 million of its
facilities with Allied Irish Bank leaving an unutilised
balance on the new facilities of £6.4 million going
forward. The facilities expire on different dates
depending on the specific circumstances of
each development and are normally repayable
on build completion of each development from
the sales proceeds received.
The Group’s jointly controlled entity, Bishopsgate
Apartments LLP, has a fully utilised loan facility
with Allied Irish Bank of £20.0 million in respect of
the purchase of development land in Bethnal
Green Road. The Group has recorded its 50 per
cent share of the loan in its balance sheet at
31st March 2009. The facility is on a rolling one
year term.
In addition the Group and its subsidiaries have
site specific loan facilities with The Royal Bank 
of Scotland totalling £66.3 million in respect of
certain development sites also renegotiated in
April 2009. At 31st March 2009 the Group had
utilised £62.2 million of its facilities leaving an
unutilised balance of £4.1 million. These facilities
also expire on different dates depending on the
specific circumstances of each development.
The Group’s jointly controlled entity, Telford Homes
(Creekside) Limited, has a loan facility with The
Royal Bank of Scotland of £51.3 million in respect
of the purchase of development land and
construction in Greenwich. At 31st March 2009
Telford Homes (Creekside) Limited had utilised
£16.2 million of this facility leaving an unutilised
balance of £35.1 million. The Group has recorded
its 50 per cent share of the loan in its balance
sheet at 31st March 2009. This facility is due for
repayment in December 2011.
business & financial review
90
0
100
110
120
130
May 09
Apr 09
Mar 09
Feb 09
Jan 09
Dec 08
Nov 08
Oct 08
Sep 08
Aug 08
Jul 08
Jun 08
May 08
Apr 08
Mar 08
Total borrowings in £ million by month
Telford RA Text  15/6/09  18:03  Page 17 Icona E15
19     Telford Homes Plc 2009
financial review continued
Icona E15
Telford RA Text  15/6/09  18:03  Page 18 Finally the Group has site specific loan facilities
with Barclays Bank totalling £12.6 million in
respect of certain development sites again
renegotiated in April 2009. At 31st March 2009
the Group had utilised £7.3 million of these
facilities leaving an unutilised balance of £5.3
million. The facilities are due for repayment
between June 2010 and September 2010.
At 31st March 2009 the Group had unutilised
overdraft facilities of £3.0 million
(2008 - £3.0 million).
These bank facilities ensure that adequate
funding is available to cover working capital
requirements and the Board consider that
existing facilities are sufficient to cover funding
requirements in the foreseeable future. Where
facilities are due to expire within one year this is
due to the timing of development completions
and therefore the expected repayment dates. 
In all of these cases the loans are expected to
be repaid by the date the facility expires.
Some of the Group's bank facilities are subject 
to a number of general and financial covenants
which are tested periodically by each bank. In 
all cases the Board have assessed whether the
Group will remain in compliance with the
covenants in the short to medium term and 
are satisfied that there will be no breach of the
covenants that cannot be easily rectified.
Borrowings at 31st March 2009 were £112.0 million
(2008 - £101.4 million) with gearing at 206.6% (2008
- 191.5%). Total debt and gearing rose for the first
seven months of the year while development work
continued on sites nearing build completion and
reached a peak in October 2008 of £127 million
and 275%. The subsequent flow of completion
proceeds has enabled significant repayments to
be made and borrowings have now fallen 
below £100 million.
Telford Homes continues to monitor ‘uncovered
gearing’ which excludes debt matched by the
value of contracts exchanged on a given
development. This is an important performance
indicator in the business and is monitored by all
three banks currently funding Telford Homes.
Allowing for the risk that a proportion of secured
contracts fail to complete the level of uncovered
gearing at 31st March 2009 remains within
acceptable limits at 80.7% (2008 - 65.6%).
The Group’s focus on generating operating
cash inflows will result in further reductions in the
level of debt and gearing in the business over
the next twelve months and this will continue
unless additional funding is required for projects
where the future revenues can be secured at
an early stage in the development.
Balance sheet
Net assets have increased to £50.3 million from
£48.9 million and net assets per share at 31st
March 2009 were 129.8 pence. The Group
continues to carry forward tax losses arising 
from the change in accounting policies and
restatement of the 2008 figures but expects to
utilise remaining losses in the year to 31st March
2010 and return to making tax payments.
Dividends
Telford Homes remains cautious in its appraisal 
of future cash flows and as such the Board has
taken the decision not to pay any dividend in
relation to the year to 31st March 2009. This is a
prudent approach reflecting the uncertain
timing of completion proceeds. The Board will
continue to monitor performance with a view 
to re-instating a dividend as soon as the Board
considers it prudent to do so. 
Cash flow
Control of cash remains of critical importance 
and we maintain a detailed month by month 
cash flow forecast as part of our management
information systems. This enables the Group to
continuously monitor forecast and actual cash
flows over a five year period and to perform
sensitivity analysis on these forecasts. The forecasts
are necessarily subject to a number of assumptions
and judgements and these are tested on 
a reasonable basis by the sensitivity analysis. 
These forecasts and the related sensitivity analysis
are reviewed by the Board in detail on a monthly
basis. In addition all of the forecasts and supporting
calculations are made available to each bank
on a monthly basis. The current forecasts show
positive cash balances beyond the next twelve
months and at no time is the Group forecasting 
to make use of its overdraft facilities.
Jonathan Di-Stefano
Financial Director 
26th May 2009
Telford Homes Plc 2009 20
business & financial review
Telford RA Text  15/6/09  18:03  Page 19 Telford RA Text  15/6/09  18:03  Page 20 operating review
construction
Telford RA Text  15/6/09  18:03  Page 21 Telford Homes continues to develop
in East London and that focus will
not change in the coming years.
The business has been built up in 
this area and ongoing regeneration
across several boroughs means
there are many more opportunities
to come in the future despite the
current economic environment. 
Local knowledge has played a key
role in the success of the Group over
the last few years and it remains a
competitive advantage particularly
in relationships with councils and
affordable housing organisations 
and in our understanding of the 
local planning process.
The 2012 Olympics remain a major
boost to East London with construction
of the Olympic Park in Stratford now
well underway and with many other
events due to take place in the local
London boroughs. This continues to
accelerate the programme of
regeneration that was already taking
place including further improving
transport links to the region. Examples
include the extension of the East
London line, improvements to the
Docklands Light Railway and, further
into the future, the Crossrail project. 
Telford Homes expects to maintain
construction in East London wherever
possible and, along with our
affordable housing partners, will play 
a significant role in the supply of new
homes to a key growth area where
there is already a housing shortage.
23     Telford Homes Plc 2009
Tower Bridge
The City
Stadthaus
area of operation
Telford RA Text  15/6/09  18:03  Page 22 Avant-Garde
Stratford
Canary Wharf
O2 Arena
Greenwich
Kinetica
St. George’s
Greenwich Creekside
Casa
Metro East
Merchants’ Quarter
OneStratford
SoBow
Telford Homes Plc 2009 24
operating review
Telford RA Text  15/6/09  18:04  Page 23 25     Telford Homes Plc 2009
The economic environment in the last twelve
months has resulted in Telford Homes applying 
a prudent approach both to committing to
new land expenditure and also to undertaking
significant construction work on developments
where the future expected revenue cannot be
substantially secured at an early stage.
As a result of this, and a general tightening of
the availability of finance to undertake new
developments, the Board has planned for a
reduction in the operating capacity of the
business in the short to medium term. As a result
the structure of Telford Homes reverted back to
two operating divisions during the year to 31st
March 2009. This structure will be kept under
review in the future.
At 31st March 2009 the Group had over 2,600
properties in the development pipeline and
these properties need to be managed through
the planning process, in design and ultimately
during construction. In order to control this
process Telford Homes is organised into two
operating divisions being Alto and Metro. 
This structure is necessary in order to manage the
delivery of several hundred homes per annum
and ensures management control to yield
excellent design, high standards of construction
and delivery on programme. Each division
predominantly specialises in certain sizes of
development and styles of construction. Alto are
responsible for over 1,700 of the properties in
planning, design and construction across 10
developments and Metro are responsible for 
over 900 properties across 20 developments.
On the 1st August 2007 Mark Parker and John
Fitzgerald were appointed to the board to jointly
take on the roles and responsibilities of Group
Managing Director. Mark Parker is responsible for
Metro and John Fitzgerald is responsible for Alto
and each division has a management team
responsible for day to day operations.
Sales and Marketing, Land Acquisition,
Partnerships, Customer Service, Finance and
Buying are regarded as core central services
that deliver economies of scale in a relatively
small geographic region by remaining outside
of the divisional structure.
The interaction between Customer Service and
the operating divisions has been particularly
important in ensuring a consistent high quality
product is presented to customers which is
fundamental to the process of achieving
successful legal completions.
operational structure
SoBow E3
Telford RA Text  15/6/09  18:04  Page 24 Telford Homes Plc 2009 26
operating review
Icona E15
Telford RA Text  15/6/09  18:04  Page 25 27     Telford Homes Plc 2009
Economic environment
Demand for properties from both investors and owner-occupiers is dependent on confidence in both
the local housing market and the wider economy. This confidence is heavily influenced by factors such
as interest rates, the availability of mortgage finance, rental incomes, unemployment and increasing
consumer costs for other goods and services. All of these are outside of the Group’s control.
The Group’s policy has been to sell early in the development process, wherever possible, to minimise the risk
in each site. This policy has been very successful to date with 74 per cent of properties under construction 
at 31st March 2009 secured by exchange of contracts. In addition the Sales and Marketing team have
detailed knowledge of the local market and are able to formulate the best sales strategy for each
development and to work with purchasers and prospective purchasers to ensure that all stages of the
process from reservation to legal completion run as smoothly as possible.
Land acquisition
The Group needs new land to maintain a development pipeline and enable the business to continue
to operate at a certain capacity. This land needs to be sourced in appropriate locations and where
optimum planning consents can be obtained. The appraisal process that determines the price paid
for land is critical in maintaining margins and return on equity at acceptable levels. 
The Land Acquisition and Partnerships teams are responsible for sourcing land and our strong relationships
with various land owners including local councils and affordable housing providers play a key role in our
ability to acquire new sites. In particular our existing partnerships with housing transfer organisations are
expected to be a significant source of land in the next few years. The appraisal process for new sites
includes due diligence by an experienced solicitor and authorisation of all prospective purchases at
appropriate levels.
Planning process
The flow of properties through the development pipeline is dependent on achieving suitable planning
permission on sites purchased without planning or subject to planning. The process is time consuming
and involves an increasing number of supporting reports and detailed consultations with many different
bodies. Delays in achieving suitable planning permissions affect the number of properties that can be
brought to market and impact on future timing of cash flows. Failure to achieve a suitable planning
permission may lead to cost write offs or reduced margins on individual developments.
Telford Homes has extensive knowledge of local planning requirements, excellent relationships with
planning authorities and takes care in the appointment of professional architects, planning consultants
and engineers. Early consultations with the planning authorities are a key part of the land acquisition
process. While this cannot remove planning risks it mitigates them as much as possible. The Group has 235
properties in the development pipeline going through the planning process reduced from 454 last year.
Health and Safety
Construction sites are dangerous places and there are many different health and safety risks to consider.
The health and safety of everyone associated with Telford Homes, both employees and sub-contractors,
is the first priority of the Group.
Investment in training, the promotion of health and safety to all employees and extensive policies and
procedures all contribute to a comprehensive approach to health and safety management with the
objective of minimising risk and providing a safe working environment. 
key risks and uncertainties
Telford RA Text  15/6/09  18:04  Page 26 Construction
The construction process is critical to the efficient and timely delivery of properties to purchasers which
affects both cash flow and customer satisfaction. The quality of the construction work and finish in each
property affects the reputation of the Group and can impact on repeat purchase and
recommendation rates. 
Standards of construction and control of the building process on site are of paramount importance to each
operating division. Careful planning is required to assess a development programme before construction
commences and this is monitored over the course of the building work. The construction teams work very
closely with the Customer Service team and their interaction commences at an early stage in the
development. The Customer Service team spend a substantial proportion of their time on site carrying
out quality control before a purchaser sees the property for the first time.
Availability of materials and labour
The availability of materials and sub-contracted labour for each site can affect both the construction
programme and the cost of construction. Build cost inflation will impact directly on the margin
achieved on each site where this is in excess of forecasts.
Planning of the construction programme and timely management of the tender process for each 
sub-contracted trade reduces the risk of delays in the construction programme due to availability of
materials and labour. The tender process ensures that competitive rates are achieved on every trade.
Telford Homes works in partnership with all of its sub-contractors and makes timely payments to
encourage an equal relationship that is beneficial to all parties.
Cash requirements and bank finance
Property development is a capital intensive business with significant initial outlays supported by bank
finance and lengthy time periods before the majority of the cash inflows on each project. Forecasting
of cash flows is critical to ensure the Group is not operating beyond its financial capacity. Part of this
process involves the forecast of bank funding for each development and the availability of sufficient
bank finance is therefore also of critical importance.
Telford Homes maintains a detailed cash flow forecast as part of its management information systems.
This extends five years into the future and is subject to continual re-assessment and sensitivity analysis. The
cash flow position is reviewed by the Board and by each of the Group’s banking partners on a monthly
basis. Telford Homes has excellent relationships with the three banks currently funding the business and
has sufficient facilities available to ensure the continuing operation of the business on all sites currently
under construction.
Political environment
Changes in laws and regulations can have a direct impact on the efficient running of the Group and
the costs incurred on each development. Changes in both local and national government can have
a direct bearing on the regulatory environment.
Telford Homes works closely with specialist consultants to ensure that it is up to date with current
regulations and aware of any future changes so that operations can be planned accordingly. 
Telford Homes Plc 2009 28
operating review
Telford RA Text  15/6/09  18:04  Page 27 Telford RA Text  15/6/09  18:04  Page 28 corporate responsibility
regeneration
Telford RA Text  15/6/09  18:04  Page 29 “Telford Homes
continues to regard
the promotion of
health and safety as
a critical objective
of all employees
at every level”
Steve Nicoll 
Group Health & Safety Manager
Telford Homes continues to regard the promotion
of health and safety as a critical objective of all
employees at every level. Every employee is
issued with health and safety instructions that
endeavour to identify all the risks and dangers
that are likely to be encountered in the course of
their work and set out precautionary measures. 
We invest in the training and development of our
people with the continuation of our ‘Health and
Safety Core’ training programme. This programme
ensures that all employees, and in particular those
deemed as ‘safety critical’, have the appropriate
skills and level of training to be able to discharge
their duties. 
For the first time Telford Homes entered the ‘Royal
Society for the Prevention of Accidents’ (RoSPA)
awards which is a highly respected national and
international health and safety body that is widely
recognised for its impartiality across all industries.
We are pleased to announce that Telford Homes
received ‘Silver Awards’ for both the ‘Health and
Safety Achievement Award’ and ‘Management
of Occupational Road Risk’. These awards are 
a fantastic achievement for us and show how
advanced we are in our management of health
and safety. The entries have to include the last
five years of health and safety performance
including all incidents and accidents as well as
providing documented responses to a number 
of questions. The Silver Awards are a great start
and I am confident that next year we should be
able to go one better.
This year saw the introduction of our revised
‘Group Health and Safety Procedures’
following on from an intensive review of our
existing systems and processes. The new
procedures are intended to reinforce the
excellent health and safety standards already 
in place by standardising our approach and
updating the relevant systems and processes.
We are still working towards gaining our
Occupational Health and Safety Management
System (OHSAS) 18001 accreditation and the
introduction of our new health and safety
procedures is fundamental to the accreditation
process. On most of our projects we operate the
Considerate Constructors Scheme and we are
monitored regularly against performance criteria.
Our ‘Executive Safety Committee’ and
‘Operational Safety Forum’ continue to 
meet regularly and have been instrumental in
developing significant changes to our procedures.
In particular the ‘Operational Safety Forum’ made
up of our senior operational management teams
debates, discusses and agrees tactics both
reactive and proactive to ensure unplanned
events do not reoccur. This forum monitors ‘trend
analysis’ covering the results of site by site health
and safety inspections. This helps our site managers
and senior management team to make continual
improvements in the standards of health and
safety on site.
31     Telford Homes Plc 2009
health and safety
Telford RA Text  15/6/09  18:04  Page 30 The introduction of our monthly edition of 
‘Safety Matters’ issued to all employees has been
received positively by all and includes internal
and external news as well as recent external
prosecutions. The publication is seen as a subtle
and effective means of communication to
continually stimulate discussion and keep health
and safety in the forefront of people’s minds. 
Our ‘supply-chain’ procedure is now fully
developed with the vast majority of our suppliers
now vetted by our health and safety department.
The procedure for prohibiting the placing of orders
with suppliers that have not been successfully
vetted remains in place. 
John Fitzgerald and Mark Parker are responsible
for health and safety in each of the operating
divisions and John Fitzgerald remains the board
member with overall responsibility for health
and safety.
I am generally satisfied with the high health and
safety standards across the Group but I am also
consciously aware that we cannot rest on our
laurels. My primary role is to continually drive up
the health and safety standards at Telford Homes
by expecting the very best from all individuals
and therefore by inference I am never completely
satisfied. I remain confident that we not only
have the right procedures in place but more
importantly have the right people to deliver the
results we expect.
Steve Nicoll
Group Health & Safety Manager
Telford Homes Plc 2009 32
corporate responsibility
Telford RA Text  15/6/09  18:04  Page 31 Greenwich Creekside, Greenwich
Some of the things we are doing:
• Biomass boilers installed to act as the primary source of power to the
development supported by gas boilers
• Constructing a sustainable water drainage and storage system
• An energy efficient building envelope with high U-values and air tightness
• Use of modern construction techniques that maximise off site production
and minimise waste
• A ‘brown’ roof to protect the natural habitat of the indigenous wildlife
• ‘Sky gardens’ to allow for planted amenity spaces between floors
• Provision of facilities for recycling
• Provision of over 300 cycle spaces on the development
• Designed to meet the Code for Sustainable Homes Level 3
Telford Homes is committed to designing and
constructing developments that both minimise
ecological impact and improve energy efficiency.
The Group has an environmental policy and we
ensure that this is communicated throughout 
our operations.
Our approach means we re-use and recycle
and adopt renewable materials wherever viable
and continually look for new ways to meet and
exceed environmental expectations in all of 
our activities. 
The majority of our sites benefit from low energy
lighting, methods of reducing internal water
usage including flow restrictors and dual flushes,
recycling, cycle storage and local transport links.
In addition there are several initiatives on specific
developments including biomass boilers fuelled 
by wood pellets, solar thermal tubes and panels,
wind turbines, air source heat pumps and ‘brown’
and ‘green’ roofs along with bird and bat boxes.
33     Telford Homes Plc 2009
Case-study - Greenwich Creekside
environment and sustainability
Telford RA Text  15/6/09  18:04  Page 32 Avant-Garde, Bethnal Green Road, E1
Some of the things we are doing:
• A combined heat and power plant to create electricity on site
• Waste energy from the heat and power plant used alongside biomass boilers to
provide heat and hot water for the development
• Use of modern construction techniques that maximise off site production and
minimise waste
• Wind turbines fixed to the roof to provide additional power from renewable sources
• Water attenuation to rationalise the discharge of water from the site
• A ‘green’ roof to protect the natural habitat of indigenous flora and fauna
• Provision of facilities for recycling
• Provision of ‘home user guides’ to ensure homeowners are aware of all
environmental features in the property and make the best use of them
Telford Homes Plc 2009 34
Case-study - Avant-Garde
corporate responsibility
One of the most significant contributions that 
we can make to reduce our impact on the
environment is by improving our efficiency on
site and reducing the amount of waste that 
we generate. Where waste is unavoidable, 
we endeavour to recycle and re-use it in our
projects before sending it off to landfill. The Site
Waste Management Plan Regulations 2008
which came into force on the 1st April 2008
signified a stepped change in how waste is
managed in the industry. Each site now requires 
a Site Waste Management Plan to be in place,
detailing measures as to how it intends to
manage its waste. As part of our overall plan for
the Group we have engaged the services of
two waste transfer stations that provide skips for
our sites and both are achieving recycling results
of around 75 to 80 per cent of the total waste
removed from our sites.
These are just a few of the things that Telford Homes
is doing and all of these initiatives are having 
a positive impact now and will continue to do 
so in the future. In order to continue to build
considerately we will research sustainable
energy solutions to ensure the best technologies
are used and that we are positively contributing
towards a greener future.
Telford RA Text  15/6/09  18:04  Page 33 35     Telford Homes Plc 2009
regeneration
Kira Building E3
Telford RA Text  15/6/09  18:04  Page 34 The regeneration of East London is an ongoing
project in which Telford Homes is playing a major
role. This process is raising the quality of life for
local people both by improving neighbourhoods
and through the provision of new affordable
housing with our housing association partners. 
Telford Homes has been chosen to be the
development partner of Eastend Homes and Poplar
HARCA. Both are housing transfer organisations and
significant land owners in East London. Our
approach to regeneration partnerships is based 
on trust, an open book methodology and shared
objectives, together with excellent delivery from
Telford Homes.
The British Estate, E3, has set the model for the
partnership with Eastend Homes where land
payments made by Telford Homes have been
reinvested into the third party refurbishment of
existing homes on the estate. Telford Homes has
completed the construction of 122 open market
homes on four sites across the estate with one
of these, the Kira Building, incorporating a new
Tesco store. The refurbishment works are well
progressed and, along with the new development,
this is making a significant difference to the
appearance of the estate and the quality of
the existing homes. 
Telford Homes has now entered into a contract to
build 54 affordable homes on the St George’s Estate,
E1 for Eastend Homes along with infrastructure
works required on the estate. In addition the
Group expects to construct 139 open market
homes on the estate commencing in 2010.
Telford Homes is continuing to progress master
plans for the regeneration of five other estates
with Eastend Homes and we expect to commence
construction on the Bede Estate, E3, in
autumn 2009. 
Bede and the other estates are expected to
add in excess of 900 properties to the Group’s
development pipeline over the next few years
and the partnership with Poplar HARCA an
additional 400 properties.
Telford Homes Plc 2009 36
corporate responsibility
St George’s E1
Telford RA Text  15/6/09  18:04  Page 35 Telford RA Text  15/6/09  18:04  Page 36 corporate governance
relationships
Telford RA Text  15/6/09  18:04  Page 37 David Holland Non-Executive Chairman, 68
David Holland has over 40 years experience in the development and house building sector having
joined George Wimpey Plc in 1966. On his retirement he held the position of Group Managing
Director with responsibility for worldwide housing and land development. In 1997 David held the
annual position of President of the House Builders Federation. David is currently Chairman of Orchid
Developments Group Ltd and non-executive director of the Harpenden Building Society. David was
appointed non-executive Chairman of Telford Homes Plc in December 2001 and advises on all
development issues and matters of strategic planning. He chairs the remuneration committee and is
a member of the audit committee.
Andrew Wiseman BA (Hons) FCMA, Chief Executive, 52
Andrew Wiseman, together with close colleagues, founded Telford Homes Plc in December 2000
following ten years with Furlong Homes Plc initially as Financial Director then as Chief Executive for the
final three years. Prior to 1990 his experience had been gained in various sectors, including seven years
with B.A.T Industries. Andrew has spear-headed the successful flotation of both Furlong Homes Plc and
Telford Homes Plc on AIM, the former on the launch of AIM in 1995, the latter in December 2001, one
year after the Company’s formation building on excellent relationships with institutional investors.
Andrew has been especially involved in the cementing of relationships between Telford Homes Plc
and affordable housing providers which have been central to the growth of the Company.
David Durant Group Planning & Design Director, 47
David Durant is a co-founder of Telford Homes Plc and has over 20 years experience in the
construction and house building sectors including 14 years at Furlong Homes where he was Group
Technical Director from 1997 to 2000. David had been Group Managing Director since the start of
the Company’s operations in 2001. In 2005 he supervised devolving responsibility for the finished
Telford Homes product into two divisions in order to handle the high level of growth in units under
construction. David’s role is focused on major planning consents, product design and maintaining
key partnerships. 
Jonathan Di-Stefano MA (Econ), ACA, Financial Director, 34
Jon Di-Stefano joined Telford Homes Plc as Financial Director in October 2002. He had one year with
Mothercare following five years with Arthur Andersen. Apart from financial matters Jon also has
board responsibility for personnel issues. There has been extensive growth in both areas and Jon has
developed a significant finance team. The role Jon has played, in nurturing the trust and support of
our banking partners with the constant high quality of his financial reporting and in developing
relationships with institutional investors through regular presentations, has proved invaluable to the
success of Telford Homes.
James Furlong Land Director, 73
Jim Furlong has over 40 years experience in all aspects of the construction and building industry
through his involvement in roofing, civil engineering, construction and house building companies
which all bore the ‘Furlong’ name. Prior to joining Telford Homes as Land Director Jim was a driving
force within Furlong Homes, where he was Chairman with specific responsibility for land acquisition.
Jim’s wide experience of land acquisition played a central role in the initial growth of Telford Homes. 
Sheena Ellwood BA (Hons), Dip. Int. Marketing, Sales & Marketing Director, 50
Sheena Ellwood joined Telford Homes Plc as Sales & Marketing Director in January 2003. Prior to this,
her experience includes consumer goods export and eight years as regional Sales & Marketing
Director for Wimpey Homes. Sheena has developed an extensive sales & marketing team at Telford
Homes Plc and set up a customer service department that plays an important role in building
relationships with individual customers and investors in our properties.
39     Telford Homes Plc 2009
directors and advisors
Telford RA Text  15/6/09  18:04  Page 38 Robert Clarke FCA, Non-Executive Director, 66
Robert Clarke was a partner in Binder Hamlyn and subsequently Arthur Andersen until his retirement
in 2000. He is currently Deputy Chairman of RO Group. Robert joined Telford Homes Plc as a non-
executive director at the time of the AIM flotation in December 2001 and he has been influential in
the fields of corporate governance and strategic direction. Robert is chairman of the audit
committee and a member of the remuneration committee. He is also a member of the audit
committee of the Church Commissioners and of the Royal Shakespeare Company.
John Fitzgerald Joint Group Managing Director, 38
John Fitzgerald began his career with Willmot Dixon and has over 20 years experience in the
construction and house building sector. He spent the four years prior to joining Telford Homes as
Project and Contract Manager with Furlong Homes where he was responsible for some of their more
prestigious developments. He joined Telford Homes in February 2003 and was jointly responsible for
construction until March 2005 when, following re-structuring, he was appointed divisional managing
director of Telford Homes Alto where he has built a very successful team. John was appointed a
director on the 1st August 2007 and is the director with responsibility for health and safety.
Mark Parker Joint Group Managing Director, 46
Mark Parker joined the Wimpey Group as a management trainee in 1981 and spent the following 21 years
with various Wimpey divisions culminating in the post of Construction Director for McAlpine Homes East.
He spent the next three years as one of the two initial directors of the new North London division of
KingsOak Homes. Appointed as Construction Director he was involved in all aspects of the new division,
from land acquisition to sales and customer care. Mark joined Telford Homes in February 2005 as divisional
managing director of Telford Homes Metro and has been influential in developing strong partnerships
with housing associations. Mark was appointed a director on the 1st August 2007 and jointly with
John Fitzgerald has taken on the duties and responsibilities of Group Managing Director.
Telford Homes Plc 2009 40
corporate governance
Company Secretary
Sara Debenham
Registered Number
4118370
Registered Office
First Floor, Stuart House, Queensgate, Britannia Road, Waltham Cross, Hertfordshire, EN8 7TF
Auditors
PricewaterhouseCoopers LLP, 10 Bricket Road, St Albans, Hertfordshire, AL1 3JX
Bankers
Allied Irish Bank, The Manor House, High Street, Wanstead, London, E11 2RL
The Royal Bank of Scotland, 1st Floor, Conqueror House, Vision Park, Chivers Way, Cambridge, CB4 9BY
Barclays Bank, Corporate Banking Centre, PO Box 729, Eagle Point, 1 Capability Green, Luton, LU1 3US
Solicitors
S J Berwin, 222 Gray’s Inn Road, London, WC1X 8XF
Coldham Shield & Mace, 123 Station Road, Chingford, London, E4 6AG
Nominated Broker
Shore Capital Stockbrokers Limited, Bond Street House, 14 Clifford Street, London, W1S 4JU
Financial and Nominated Advisor
Shore Capital and Corporate Limited, Bond Street House, 14 Clifford Street, London, W1S 4JU
Registrars
Capita Registers, Northern House, Woodsome Park, Fenay Bridge, Huddersfield, West Yorkshire, HD8 0LA
Financial Public Relations
Abchurch Communications Limited, 100 Cannon Street, London, EC4N 6EU
Telford RA Text  15/6/09  18:04  Page 39 Application of principles
Although not formally required to do so, the directors have sought to embrace the principles contained 
in the Combined Code (2003) (the Code) and its 2006 revised version applicable to fully listed companies,
in formulating and applying the Group’s corporate governance policies. These policies are monitored to
ensure that they are appropriate to the Group’s circumstances and comply as far as possible with the
provisions of the Code given the size of the Group. 
Directors
The Company and Group are managed by a board of directors and they have the necessary skills 
and experience to effectively operate and control the business. There are nine directors in total of 
whom two are non-executive directors. David Holland and Robert Clarke, the non-executive directors,
are considered independent and they comprise both the audit and remuneration committees. The
Board meets once a month and the directors make every effort to attend all board meetings.
The Board is responsible for taking all major strategic decisions and also addressing any significant
operational matters. In addition the Board reviews the risk profile of the Group and ensures that an
adequate system of internal control is in place. Management information systems are in place to
enable the directors to make informed decisions to properly discharge their duties.
The roles of the Chairman and the Chief Executive are separate. The Chairman is responsible for running
the Board and he meets regularly and separately with the Chief Executive and the other non-executive
director to discuss matters for the Board.
As the business has developed, the composition of the Board has been under constant review to
ensure that it remains appropriate to the managerial requirements of the Group. One third of the
directors retire annually in rotation in accordance with the Company’s articles of association. This
enables the shareholders to decide on the election of the Company’s Board.
The Board takes decisions regarding the appointment of new directors as a whole and this is only done
following a thorough assessment of a potential candidate’s skills and suitability for the role. New directors
are given a full induction to the Group where required so as to ensure they can properly fulfil their role
and meet their responsibilities.
All directors are offered appropriate training to develop their knowledge and ensure they remain up
to date in relevant matters for which they have responsibility as a member of the Board.
The Chairman’s statement and Chief Executive’s review included in this annual report give the Board’s
current assessment of the Group’s prospects. The directors are responsible for preparing the financial
statements as set out in the statement of directors’ responsibilities. The responsibilities of the auditors
are set out in their report.
Remuneration committee
Details concerning the composition and meetings of the remuneration committee are contained in
the directors’ remuneration report on pages 43 to 44.
Audit committee
During the period the audit committee, which is chaired by Robert Clarke an independent non-executive
director, has met three times with the external auditors being in attendance on two occasions. The non-
executive directors meet separately with the auditors once a year.
The committee has a responsibility for reviewing the financial statements provided to shareholders. In
addition the committee reviews the business and financial risks and internal controls as described below.
The duties of the committee also include ensuring that the auditors provide a cost effective service to
the Group and remain objective and independent and to consider from time to time the need for an
internal audit function.
41     Telford Homes Plc 2009
policy on corporate governance
Telford RA Text  15/6/09  18:04  Page 40 Relations with shareholders
The Company has institutional shareholders and is, where practicable, willing to enter into a dialogue
with them. The Chief Executive and the Financial Director meet regularly with institutional investors
within the confines of relevant legislation and guidance.
The Board invites communication from its private investors and encourages participation by them at the
Annual General Meeting (AGM). All Board members present at the AGM are available to answer questions
from shareholders. Notice of the AGM in excess of 21 clear days is given and the business of the meeting is
conducted with separate resolutions, voted on initially by a show of hands and with the result of the voting
being clearly indicated.
Internal control
The Board is responsible for the Group’s system of internal control and for reviewing its effectiveness.
Such a system is designed to mitigate the risk of failure to achieve business objectives and can only
provide reasonable but not absolute assurance against material misstatement or loss.
The Board is of the view that there is an ongoing process for identifying, evaluating and managing the
Group’s significant risks and that it has been in place for the period ended 31st March 2009 and up to
the date of approval of the annual report and accounts, and that it is regularly reviewed by the Board.
The internal control procedures are delegated to executive directors and senior management in the
Group operating within a clearly defined departmental structure. The Board regularly reviews the
internal control procedures in the light of the ongoing assessment of the Group’s significant risks.
On a monthly basis management accounts, including a comprehensive cash flow forecast, are reviewed
by the Board in order to provide effective monitoring of financial performance. At the same time the
Board considers other significant strategic, organisational and compliance issues to ensure that the Group’s
assets are safeguarded and financial information and accounting records can be relied upon. The Board
formally monitors monthly progress on each development.
Telford Homes Plc 2009 42
corporate governance
Telford RA Text  15/6/09  18:04  Page 41 The directors present the remuneration report for the year ended 31st March 2009.
Composition of the remuneration committee
The remuneration committee comprises the independent non-executive directors, David Holland and Robert
Clarke. The committee makes recommendations to the Board on executive directors’ service agreements
and remuneration. In doing so it has undertaken relevant research to ensure that remuneration levels are
competitive with the industry average. The committee met twice during the year.
Remuneration policy
It is the Group’s policy to provide remuneration packages sufficient to attract, retain and motivate
directors of the quality required. To add further incentive the directors have adopted two bonus schemes,
one applicable to all staff and a scheme for executive directors and senior management. Both schemes
are dependent on the Group meeting certain financial performance targets. The maximum amount that
can be earned under the executive bonus scheme is 100% of basic salary.
The Company operates a Share Incentive Plan (SIP) in which all employees are entitled to participate.
The SIP exists in order to increase employee ownership of shares and further details are given in note
17 to the financial statements.
During 2006 the Company set up a Deferred Payment Share Purchase Plan (DPSPP) for the benefit 
of selected senior employees. Further details are given in note 17 to the financial statements. The
remuneration committee is responsible for approving any offers of shares made under the DPSPP. 
The Board as a whole determines the remuneration of the non-executive directors after considering
external market research. They do not participate in the bonus schemes or in the personal pension
scheme. They are entitled to participate in the SIP. 
Service contracts
The executive directors have service contracts that can be terminated on twelve months notice. These
provide for termination payments equivalent to twelve months basic salary and contractual benefits.
The non-executive directors have letters of appointment that can be terminated on three months notice.
Directors’ emoluments
The directors’ emoluments for the year ended 31st March 2009 are as follows:
Salary Benefits Pension Total Total
and fees Bonus in kind contributions 2009 2008
Andrew Wiseman 145,000 - 22,741 14,500 182,241 230,842
Robert Clarke 42,000 - - - 42,000 37,500
David Durant 130,000 - 13,394 13,000 156,394 216,829
Jonathan Di-Stefano 130,000 - 23,275 13,000 166,275 211,152
Sheena Ellwood 130,000 - 24,688 13,000 167,688 211,366
John Fitzgerald 130,000 - 23,865 13,000 166,865 160,426
James Furlong 101,750 - 36,752 - 138,502 207,498
David Holland 55,000 - - - 55,000 50,000
Mark Parker 130,000 - 26,902 13,000 169,902 162,795
Total 993,750 - 171,617 79,500 1,244,867 1,488,408
John Fitzgerald and Mark Parker were appointed as directors on 1st August 2007. 
43     Telford Homes Plc 2009
directors’ remuneration report
Telford RA Text  15/6/09  18:04  Page 42 Directors’ interests in shares and share options
Directors’ interests in shares are disclosed in the report of the directors.
The share options held by the directors at 31st March 2009 and the movements during the year then
ended were as follows:
Company 31st March Granted Exercised 31st March Exercise Dates
scheme 2008 in year in year 2009 price exercisable
Number Number Number Number
Jonathan Di-Stefano unapproved 60,000 - - 60,000 75p 1 Oct 2005 to 1 Oct 2012
approved 14,051 - - 14,051 213.5p 14 Feb 2011 to 14 Feb 2018
David Durant approved 14,051 - - 14,051 213.5p 14 Feb 2011 to 14 Feb 2018
Sheena Ellwood unapproved 59,732 - - 59,732 74.5p 20 Feb 2006 to 20 Feb 2013
approved 14,051 - - 14,051 213.5p 14 Feb 2011 to 14 Feb 2018
John Fitzgerald unapproved 160,000 - - 160,000 75p 1 Oct 2005 to 1 Oct 2012
approved 14,051 - - 14,051 213.5p 14 Feb 2011 to 14 Feb 2018
Mark Parker unapproved 50,542 - - 50,542 138.5p 17 May 2008 to 17 May 2015
approved 21,660 - - 21,660 138.5p 17 May 2008 to 17 May 2015
In total the share-based payments charge in respect of directors’ share options was £7,733 (2008 - £5,772).
By order of the Board,
David Holland
Chairman of the Remuneration Committee
26th May 2009
Telford Homes Plc 2009 44
corporate governance
Telford RA Text  15/6/09  18:04  Page 43 The directors present their report and the audited financial statements for the year ended 31st March 2009.
Review of activities
The principal activity of the Group is that of property development.
A review of the activities and prospects of the Group is given in the Chairman’s statement, the Chief
Executive’s review and the financial review on pages 5 to 20. The Group is required to prepare a business
review incorporating comments on key performance indicators and this is covered in the review of
activities and prospects.
The primary key performance indicators are disclosed on page 1.
Results and dividends
Profit after income tax for the year ended 31st March 2009 was £3,023,000 (2008 restated - £4,497,000).
No interim dividend was paid in respect of the year ended 31st March 2009 and the directors
recommend that no final dividend be paid. The total dividend paid in respect of the year ended 31st
March 2008 was 10.0p.
Going concern
The Group’s business activities, together with factors likely to affect its future development and performance
are set out in the Chairman’s statement and the Chief Executive’s review on pages 5 to 14 and the key risks
and uncertainties affecting the Group are set out on pages 27 to 28. The financial position of the Group, its
cash flows and borrowing facilities are described in the financial review on pages 15 to 20. In addition note 
20 to the financial statements includes details of the Group’s financial instruments and its exposure to credit
risk and liquidity risk.
The directors have assessed the Group’s projected business activities and available financial resources
together with detailed forecasts for cash flow and relevant sensitivity analysis. The directors believe
that the Group is well placed to manage its business risks successfully despite the current uncertain
market outlook.
After making appropriate enquiries the directors have a reasonable expectation that the Company
and the Group have adequate resources to continue in operational existence for the foreseeable
future. Accordingly the directors continue to adopt the going concern basis in preparing the annual
report and accounts.
Substantial shareholdings
As at 15th May 2009, the Company had been advised of the following notifiable interests in its ordinary
share capital:
Number Percentage
held
Artemis Investment Management Ltd 3,240,960 8.36%
Midas Capital plc 2,372,500 6.12%
K P Furlong 1,966,000 5.07%
Telford Homes Trustees Limited 1,900,557 4.90%
T D Waterhouse Nom. (R Stokes) 1,607,760 4.15%
Rathbone Brothers Plc 1,580,875 4.08%
M Trim 1,409,000 3.64%
D G Furlong 1,300,000 3.35%
The shares held by Telford Homes Trustees Limited include shares held on behalf of employees under
the Share Incentive Plan (note 17).
45     Telford Homes Plc 2009
report of the directors
Telford RA Text  15/6/09  18:04  Page 44 Directors
Details of the directors of the Company are shown on pages 39 to 40.
Andrew Wiseman, David Durant and Sheena Ellwood retire by rotation at the next Annual General
Meeting and, being eligible, offer themselves for re-election. 
Directors’ interests
The directors of the Company are listed below together with their interest in the shares of the
Company at 31st March 2009 and movements in the year:
At 31st Share Market At 31st
March 2008 Incentive acquisitions March 2009
Plan and disposals
Number Number Number Number
Andrew Wiseman 2,210,564 11,320 20,000 2,241,884
Robert Clarke 111,213 11,320 - 122,533
Jonathan Di-Stefano 332,213 11,320 - 343,533
David Durant 1,066,213 11,320 60,000 1,137,533
Sheena Ellwood 336,481 11,320 - 347,801
John Fitzgerald 193,259 11,320 - 204,579
James Furlong 1,124,973 11,320 120,000 1,256,293
David Holland 981,213 11,320 - 992,533
Mark Parker 155,888 11,320 - 167,208
These interests include shares purchased under the Telford Homes Share Incentive Plan (SIP) which all
employees, including directors, are eligible to participate in. All shares purchased under the SIP are matched
by shares provided by the Company on a one for one basis. These ‘Matching’ shares are also included in the
interests stated but must remain in the SIP for a period of not less than three years otherwise they are forfeited.
Further details on the SIP are included in note 17 to the financial statements.
Details of share options held by directors are given in the directors’ remuneration report on pages 43 to 44.
Investment in own shares
The Company’s investment in own shares relates solely to the Share Incentive Plan and further details
of the total holding and movements in the holding are disclosed in note 17.
Creditors
It is Group policy to settle all debts with its creditors on a timely basis. Subcontractors are paid upon
agreement of the value of works completed based on their applications for payment and the terms
agreed. In general, other suppliers are paid during the month following the month of receipt of the
invoice unless other terms have been specifically agreed.
At 31st March 2009 trade payables represented 22 days purchases (2008 – 14 days).
Telford Homes Plc 2009 46
corporate governance
Telford RA Text  15/6/09  18:04  Page 45 Employees
The Group places considerable value on the involvement of its employees and keeps them informed
of all relevant matters on a regular basis. Telford Homes is an equal opportunities employer and all
applications for employment are considered fully on the basis of suitability for the job.
Charitable donations
The Group made charitable donations of £15,000 (2008 - £17,000). These donations were made to a
number of different charities supporting a broad range of good causes.
Annual General Meeting
The Annual General Meeting will be held at the registered office at First Floor, Stuart House,
Queensgate, Britannia Road, Waltham Cross, Hertfordshire on the 9th July 2009 at 12.30pm.
Auditors
A resolution to re-appoint PricewaterhouseCoopers LLP as auditors to the Company will be proposed
at the Annual General Meeting in accordance with section 385 of the Companies Act 1985.
Each of the directors at the time this report was approved has confirmed the following:
• so far as each director is aware, there is no relevant audit information of which the Company’s
auditors are unaware;
• each director has taken steps, including appropriate enquiries of fellow directors, in order to be
aware of any information needed by the Company’s auditors in connection with preparing their
report and to establish that the Company’s auditors are aware of that information.
By order of the Board,
Sara Debenham
Company Secretary
26th May 2009
47     Telford Homes Plc 2009
report of the directors
Telford RA Text  15/6/09  18:04  Page 46 The directors are responsible for preparing the annual report and the financial statements in
accordance with applicable law and regulations. 
Company law requires the directors to prepare financial statements for each financial year. Under that
law the directors have elected to prepare the financial statements in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union. The financial statements are
required by law to give a true and fair view of the state of affairs of the Group and of the profit or loss 
of the Group for that period. 
In preparing those financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state that the financial statements comply with IFRS as adopted by the European Union;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Group will continue in business, in which case there should be supporting assumptions or
qualifications as necessary.
The directors confirm that they have complied with the above requirements in preparing the
financial statements.
The directors are responsible for keeping proper accounting records that disclose with reasonable
accuracy at any time the financial position of the Group and enable them to ensure that the financial
statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets
of the Group and hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The directors are responsible for the maintenance and integrity of the Group’s website. Legislation in
the United Kingdom governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Telford Homes Plc 2009 48
corporate governance
statement of directors’ responsibilities
Telford RA Text  15/6/09  18:04  Page 47 Independent auditors’ report to the members of Telford Homes Plc
We have audited the Group and Parent Company financial statements (the ‘‘financial statements’’) of
Telford Homes Plc for the year ended 31st March 2009 which comprise the Group Income Statement, the
Group and Parent Company Balance Sheets, the Group and Parent Company Cash Flow Statements, the
Group and Parent Company Statements of Changes in Equity, the Statement of Accounting Policies and the
related notes. These financial statements have been prepared under the accounting policies set out therein. 
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report and the financial statements in accordance
with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European
Union are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory
requirements and International Standards on Auditing (UK and Ireland). This report, including the opinion,
has been prepared for and only for the Company’s members as a body in accordance with Section
235 of the Companies Act 1985 and for no other purpose. We do not, in giving this opinion, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in writing.
We report to you our opinion as to whether the financial statements give a true and fair view and have
been properly prepared in accordance with the Companies Act 1985. We also report to you whether in
our opinion the information given in the report of the directors is consistent with the financial statements.
The information given in the report of the directors includes that specific information presented in the
Chairman’s Statement, the Chief Executive’s Review and the financial review that are cross referred
from the Business Review section of the report of the directors. 
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, 
if we have not received all the information and explanations we require for our audit, or if information
specified by law regarding directors’ remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with the
audited financial statements. The other information comprises only the financial highlights, the Chairman’s
statement, the Chief Executive’s review, the financial review, the area of operation, the operational
structure, the key risks and uncertainties, health and safety, environment and sustainability, regeneration,
the directors and advisors, the policy on corporate governance, the directors’ remuneration report and
the report of the directors and the statement of directors’ responsibilities. We consider the implications for
our report if we become aware of any apparent misstatements or material inconsistencies with the
financial statements. Our responsibilities do not extend to any other information.
49     Telford Homes Plc 2009
auditors’ report
Telford RA Text  15/6/09  18:04  Page 48 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 Group’s and Company’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the
financial statements are free from material misstatement, whether caused by fraud or other irregularity or
error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in
the financial statements.
Opinion
In our opinion:
• the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by
the European Union, of the state of the Group’s affairs as at 31st March 2009 and of the Group’s
profit and cash flows for the year then ended;
• the Parent Company financial statements give a true and fair view, in accordance with IFRSs as
adopted by the European Union as applied in accordance with the provisions of the Companies
Act 1985, of the state of the Parent Company’s affairs as at 31st March 2009 and cash flows for the
year then ended;
• the financial statements have been properly prepared in accordance with the Companies Act
1985; and
• the information given in the report of the directors is consistent with the financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors, St Albans
26th May 2009
Notes
(a) The maintenance and integrity of the Telford Homes Plc website is the responsibility of the
directors; the work carried out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any changes that may have occurred
to the financial statements since they were initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Telford Homes Plc 2009 50
corporate governance
Telford RA Text  15/6/09  18:04  Page 49 Telford RA Text  15/6/09  18:04  Page 50 financial statements
results
Telford RA Text  15/6/09  18:04  Page 51 Note Year ended Year ended
31st March 2009 31st March 2008
restated
£000 £000
Revenue 106,662 96,777
Cost of sales before exceptional items (89,044) (79,756)
Exceptional items (2,868) -
Gross profit 14,750 17,021
Administrative expenses (7,971) (8,253)
Selling expenses (1,373) (2,340)
Exceptional items (116) -
Operating profit 1 5,290 6,428
Finance income 3 216 493
Finance costs 3 (1,163) (379)
Profit before income tax 4,343 6,542
Analysed as:
Profit before income tax and exceptional items 7,327 6,542
Exceptional items 1 (2,984) -
4,343 6,542
Income tax expense 4 (1,320) (2,045)
Profit after income tax 3,023 4,497
Earnings per share:
Basic 6 8.1p 12.2p
Diluted 6 8.1p 12.1p
All activities are in respect of continuing operations.
53     Telford Homes Plc 2009
group income statement
31st March 2009
Telford RA Text  15/6/09  18:04  Page 52 Group Group Company Company
Note 31st March 31st March 31st March 31st March
2009 2008 2009 2008
restated restated
£000 £000 £000 £000
Non current assets
Investments 7 - - 4 1
Property, plant and equipment 8 618 907 618 907
Deferred income tax assets 13 13 - 13 -
631 907 635 908
Current assets
Inventories 9 177,941 179,113 142,242 148,988
Trade and other receivables 10 9,098 12,631 15,264 19,356
Current income tax assets 342 4,624 525 4,971
Cash and cash equivalents 11 4,865 4,698 4,329 2,464
192,246 201,066 162,360 175,779
Total assets 192,877 201,973 162,995 176,687
Non current liabilities
Hire purchase liabilities 12 - (18) - (18)
Deferred income tax liabilities 13 - (4) - (4)
- (22) - (22)
Current liabilities
Trade and other payables 14 (30,534) (51,591) (28,270) (49,541)
Borrowings 15 (112,020) (101,424) (88,086) (81,770)
Hire purchase liabilities 12 (18) (83) (18) (83)
(142,572) (153,098) (116,374) (131,394)
Total liabilities (142,572) (153,120) (116,374) (131,416)
Net assets 50,305 48,853 46,621 45,271
Capital and reserves
Issued share capital 16 3,875 3,750 3,875 3,750
Share premium 30,345 29,749 30,345 29,749
Retained earnings 16,085 15,354 12,401 11,772
Total equity 50,305 48,853 46,621 45,271
These financial statements were authorised for issue by the board of directors on 26th May 2009 and
signed on its behalf by:
Andrew Wiseman Jonathan Di-Stefano
Chief Executive Financial Director
Telford Homes Plc 2009 54
financial statements
balance sheet
31st March 2009
Telford RA Text  15/6/09  18:04  Page 53 statement of changes in equity
55     Telford Homes Plc 2009
Group statement of changes in equity Share Share Retained Total
capital premium earnings equity
£000 £000 £000 £000
Balance previously reported at 31st March 2007 3,694 28,641 22,496 54,831
Restatement - - (7,564) (7,564)
Restated balance at 31st March 2007 3,694 28,641 14,932 47,267
Profit for the year - - 4,497 4,497
Dividend on equity shares - - (3,498) (3,498)
Movement in excess tax on share options - - (194) (194)
Shares issued under Deferred Payment 16 374 (390) -
Share Purchase Plan
Proceeds of equity share issue 40 734 - 774
Share-based payments - - 109 109
Purchase of own shares - - (422) (422)
Sale of own shares - - 211 211
Movement arising from write down in value of own shares - - 109 109
Balance at 31st March 2008 3,750 29,749 15,354 48,853
Profit for the year - - 3,023 3,023
Dividend on equity shares - - (2,061) (2,061)
Movement in excess tax on share options - - (30) (30)
Proceeds of equity share issue 125 596 - 721
Share-based payments - - 195 195
Purchase of own shares - - (721) (721)
Sale of own shares - - 194 194
Movement arising from write down in value of own shares - - 131 131
Balance at 31st March 2009 3,875 30,345 16,085 50,305
Company statement of changes in equity Share Share Retained Total
capital premium earnings equity
£000 £000 £000 £000
Balance previously reported at 31st March 2007 3,694 28,641 20,556 52,891
Restatement --(5,859)(5,859)
Restated balance at 31st March 2007 3,694 28,641 14,697 47,032
Profit for the year - - 1,150 1,150
Dividend on equity shares - - (3,498) (3,498)
Movement in excess tax on share options - - (194) (194)
Shares issued under Deferred Payment 16 374 (390) -
Share Purchase Plan
Proceeds of equity share issue 40 734 - 774
Share-based payments - - 109 109
Purchase of own shares - - (422) (422)
Sale of own shares - - 211 211
Movement arising from write down in value of own shares - - 109 109
Balance at 31st March 2008 3,750 29,749 11,772 45,271
Profit for the year - - 2,921 2,921
Dividend on equity shares - - (2,061) (2,061)
Movement in excess tax on share options - - (30) (30)
Proceeds of equity share issue 125 596 - 721
Share-based payments - - 195 195
Purchase of own shares - - (721) (721)
Sale of own shares - - 194 194
Movement arising from write down in value of own shares - - 131 131
Balance at 31st March 2009 3,875 30,345 12,401 46,621
31st March 2009
Telford RA Text  15/6/09  18:04  Page 54 financial statements
cash flow statement
Telford Homes Plc 2009 56
Group Group Company Company
Year ended Year ended Year ended Year ended
31st March 31st March 31st March 31st March
2009 2008 2009 2008
restated restated
£000 £000 £000 £000
Cash flow from operating activities
Operating profit 5,290 6,428 4,641 1,953
Depreciation 387 399 387 399
Write down in value of own shares 131 109 131 109
Share-based payments 195 109 195 109
Profit on sale of tangible assets (39) (24) (39) (24)
Decrease (increase) in inventories 6,427 (50,104) 11,218 (47,598)
Decrease (increase) in receivables 3,533 (10,682) 4,092 (10,806)
(Decrease) increase in payables (21,050) 27,938 (21,358) 28,230
(5,126) (25,827) (733) (27,628)
Interest paid (6,425) (7,400) (5,139) (5,752)
Income tax received (paid) 2,915 (5,048) 3,228 (4,155)
Cash flow from operating activities (8,636) (38,275) (2,644) (37,535)
Cash flow from investing activities
Purchase of tangible assets (99) (332) (99) (332)
Proceeds from sale of tangible assets 40 24 40 24
Interest received 216 493 202 477
Cash flow from investing activities 157 185 143 169
Cash flow from financing activities
Proceeds from issuance of ordinary share capital 721 774 721 774
Purchase of own shares (721) (422) (721) (422)
Sale of own shares 194 211 194 211
Increase in bank loans 52,774 59,825 46,494 45,944
Repayment of bank loans (42,178) (31,611) (40,178) (20,495)
Dividend paid (2,061) (3,498) (2,061) (3,498)
Capital element of hire purchase payments (83) (108) (83) (108)
Cash flow from financing activities 8,646 25,171 4,366 22,406
Net increase (decrease) in cash and 167 (12,919) 1,865 (14,960)
cash equivalents
Cash and cash equivalents brought forward 4,698 17,617 2,464 17,424
Cash and cash equivalents carried forward 4,865 4,698 4,329 2,464
31st March 2009
Telford RA Text  15/6/09  18:04  Page 55 statement of accounting policies
57     Telford Homes Plc 2009
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union and IFRIC interpretations and with those parts of
the Companies Act 1985 applicable to companies reporting under IFRS. 
The financial statements have been prepared under the historical cost convention.
The preparation of financial statements in conformity with generally accepted accounting principles
requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during
the reporting period. Although these estimates are based on the directors best knowledge of the
amounts, events or actions, actual results ultimately may differ from those estimates. The most
significant estimates made by the directors in these financial statements are set out in 'Critical
accounting judgements and key sources of estimation uncertainty'.
The accounting policies set out below have been applied consistently for all periods presented in
these financial statements except where the Group has taken the option to early adopt IFRIC 15
'Agreements for the construction of real estate' and IAS 23 (revised) 'Borrowing costs' from 1st April
2008. The prior year comparatives have been restated and further information is given in note 21.
Basis of consolidation
The consolidated financial statements include the financial statements of the Company, its
subsidiaries and the Group's share of jointly controlled entities up to 31st March 2009. The results of
subsidiaries acquired or disposed of during the year are included in the financial statements from the
effective date of acquisition or up to the effective date of disposal, as appropriate. All intra-group
transactions, balances, income and expenses are eliminated on consolidation.
Exemptions
The directors have taken advantage of the exemption available under Section 230 of the Companies
Act 1985 and have not presented an income statement for the Company alone.
Jointly controlled entities
A jointly controlled entity is an entity in which the Group holds an interest with one or more other
parties where a contractual arrangement has established joint control over the entity. Jointly
controlled entities are accounted for using proportional consolidation.
Segmental reporting
The Group has only one business segment being housebuilding and one geographical segment being
the United Kingdom.
Revenue and profit recognition
Properties for open market sale
Revenue and profit is recognised at the point of legal completion of each property.
Commission received on property sales made on behalf of third parties is recorded within revenue,
with all costs associated with the sale of those properties recognised within selling expenses.
Construction contracts
Contracts are treated as construction contracts when they have been specifically negotiated for the
construction of a development or a number of properties. These contracts are primarily for the
construction of affordable homes. Revenue is only recognised on a construction contract where the
outcome can be estimated reliably. Revenue and costs are recognised by reference to the stage of
completion of contract activity at the balance sheet date. This is normally measured by an
assessment of work performed to date.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue is
recognised to the extent of contract costs incurred that it is probable will be recoverable. When it is
probable that total contract costs will exceed total contract revenue, the expected loss is recognised
as an expense immediately.
Selling expenses
Selling expenses are charged to the income statement as incurred.
Borrowings
Interest bearing bank loans and overdrafts are recorded at the proceeds received.
Borrowing costs directly attributable to the development of properties that take a substantial period
of time to get ready for sale, are capitalised within inventories. Capitalisation of borrowing costs
commences from the date of initial expenditure on a given development and continues until the
properties are ready for sale. 
31st March 2009
Telford RA Text  15/6/09  18:04  Page 56 financial statements
The capitalisation of borrowing costs is suspended where land assets are being held for strategic
purposes or where there are prolonged periods when development activity on a site is interrupted.
Capitalisation is not normally suspended during a period when substantial technical and
administrative work is being carried out.
All other borrowing costs are charged to the income statement using the effective interest method.
Exceptional items
Exceptional items are those significant items which are separately disclosed by virtue of their size or
incidence to enable a full understanding of the Group's financial performance.
Finance leases and hire purchase contracts
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases and hire purchase contracts are recognised as assets of the Group
at their fair value or, if lower, at the present value of the minimum lease payments, each determined
at the inception of the lease and depreciated over the shorter of their expected useful lives and the
lease term. The corresponding liability is included in the balance sheet as a finance lease or hire
purchase obligation. Lease payments are apportioned between finance charges and reduction of
the lease obligations so as to achieve a constant rate of interest on the remaining balance of the
liability. Finance charges are charged to the income statement.
Operating leases
Operating lease rentals are charged to the income statement on a straight line basis over the life of
the lease.
Pension costs
Contributions paid to group personal pension schemes (defined contribution), in respect of
employees, are charged to the income statement as incurred.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation. Depreciation is
provided on a straight line basis at rates calculated to write down the cost, less estimated residual
value, of each asset over its expected useful life as follows:
Leasehold improvements - shorter of term of lease and 10 years
Plant and machinery - 2 to 5 years
Motor vehicles - 3 years
Investments
Interests in subsidiary undertakings are valued at cost less impairment. 
Inventories
Development properties are included in inventories and are stated at the lower of cost and net
realisable value. Cost comprises costs of acquisition and development, including directly attributable
fees and expenses, direct labour costs and borrowing costs. Net realisable value has been assessed
for all developments and during the year this assessment led to a write down in the value of land and
work in progress as disclosed in note 1. Included within development properties are freehold interests
held in completed developments. These are held for future sale. 
Financial instruments
Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group
becomes a party to the contractual provision of the instrument.
Trade receivables and other receivables
Trade receivables on normal terms do not carry any interest and are stated at their nominal value
reduced by appropriate allowances for estimated unrecoverable amounts.
Cash and cash equivalents
Cash and cash equivalents are defined as cash balances in hand and in the bank (including short-
term cash deposits) which mature within three months or less from the date of acquisition.
Borrowings
Interest bearing bank loans and overdrafts are recorded at the proceeds received.
Trade payables
Trade payables on normal terms are not interest bearing and are stated at their nominal value.
Telford Homes Plc 2009 58
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Land creditors
When land is purchased on extended payment terms, the Group initially records it at its fair value with
a land creditor recorded for any outstanding monies based on this fair value assessment. Fair value is
determined by using the effective interest method. The difference between the nominal value and
the initial fair value is amortised over the period of the extended credit term and charged to finance
costs, increasing the value of the land creditor so that at the date of maturity, the land creditor
equals the payment required.
Financial liabilities and equity instruments
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in
the assets of the Group after deducting all of its liabilities. Equity instruments issued by the Group are
recorded at the proceeds received, net of direct issue costs.
Current assets and liabilities
Assets that are expected to be realised in, or are intended for sale or consumption in, the Group's
normal operating cycle are treated as current even to the extent these are expected to be realised
after twelve months from the balance sheet date. Liabilities that are expected to be settled in the
Group's normal operating cycle are treated as current even though these may be due for settlement
after twelve months from the balance sheet date.
Contingent liabilities
Disclosures are made for each class of contingent liabilities at the balance sheet date detailing,
where practicable, an estimate of its financial effect and an indication of uncertainties associated
with the timing or amount of the outflow, unless the possibility of a financial outflow is remote.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on the profits for the year. Taxable profit differs from net profit 
as reported in the income statement because it excludes items of income or expense that are tax
deductible in other years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax is recognised in respect of all temporary differences that have originated but not
reversed at the balance sheet date where transactions or events that result in an obligation to pay
more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date.
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis
of all available evidence, it can be regarded as more likely than not that there will be suitable
taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is charged or credited in the income statement, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Share-based payments
In accordance with IFRS 2, the fair value of equity settled share options granted is recognised as an
employee expense with a corresponding increase in equity. The fair value is measured as at the date
the options are granted using the Black-Scholes-Merton pricing model and is charged equally over
the vesting period. The amount recognised as an expense is adjusted each reporting period to reflect
the actual number of options that are expected to vest.
With respect to share-based payments, a deferred tax asset is recognised on the relevant tax base.
The tax base is then compared to the cumulative share-based payment expense recognised in the
income statement. Deferred tax arising on the excess of the tax base over the cumulative share-
based payment expense recognised in the income statement has been recognised directly in equity.
Own shares
Shares held by employee benefit trusts in order to satisfy awards under the Group's share plans are
included net within equity until such time as the shares are vested to the relevant employees.
Critical accounting judgements and key sources of estimation uncertainty
Construction contract revenue and profit recognition
Contract revenue is recognised from the date of exchange of construction contracts at a rate
equivalent to the value of work undertaken in respect of land development. Contract profit on
construction contracts is recognised in proportion to revenue only to the extent that the total
eventual profit on the contract can be foreseen with reasonable certainty.
statement of accounting policies
31st March 2009
Telford RA Text  15/6/09  18:04  Page 58 financial statements
Telford Homes Plc 2009 60
Assessing the percentage complete on each contract involves estimation of total expected costs 
to be incurred until the end of the contract. Recognition of profit also involves estimation of the 
total expected revenues from each contract and therefore the expected profit margin that will be
achieved. Judgement is required to assess whether the total eventual profit on each contract can 
be foreseen with reasonable certainty.
Carrying value of land and work in progress
Inventories include land and work in progress in respect of development sites. In some cases land is
held awaiting a planning consent. On each development judgement is required to assess whether
the cost of land and any associated work in progress is in excess of its net realisable value.
Recent accounting developments
During the year amendments to IAS 39, IFRS 7 and IFRIC 12 have become effective, none of which
are applicable to the Group.
At the date of the authorisation of these financial statements, there are a number of standards,
amendments and interpretations that have been published. 
The standards, amendments and interpretations that are expected to impact upon the Group are:
IAS 1 (Amendment) 'Presentation of financial statements'. This amendment prohibits the presentation of
items of income and expense (that is 'non-owner changes in equity') in the statement of changes in
equity. Revised IAS 1 also sets out the additional disclosure requirements for entities making restatements
or reclassifications. It will apply to the Group from the annual period commencing 1st April 2009.
IFRS 2 (Amendment) 'Share-based payment'. This amendment clarifies that vesting conditions are
service and performance conditions only. It also specifies that all cancellations should receive the
same accounting treatment, whether cancelled by the entity or by other parties. The amendment 
will apply to the Group from the annual period commencing 1st April 2009.
The following standards, amendments and interpretations are not expected to have any material
impact on the financial statements of the Group:
IFRS 3 (Amendment) 'Business combinations' applies to the Group from the annual period
commencing 1st April 2010. This standard includes some significant changes to how the acquisition
method is applied to business combinations.
IFRS 7 (Amendment) 'Financial instruments: Disclosures'. This amendment increases the disclosure
requirements for fair value measurement. It will apply to the Group from the annual period
commencing 1st April 2009.
IFRS 8 'Operating segments' applies to the Group from the annual period commencing 1st April 2009.
IFRS 8 amends the current segmental reporting requirement of IAS 14 and requires 'management
approach' to be adopted so that segment information is presented on the same basis as that used
for internal reporting purposes. 
IAS 27 (Amendment) 'Consolidated and separate financial statements' applies to the Group from the
annual period commencing 1st April 2010. The revised standard requires the effects of all transactions
with non-controlling interests to be recorded in equity if there is no change in control.
IAS 32 (Amendment) 'Financial instruments: Presentation' and IAS 1 (Amendment) 'Presentation of
financial statements - Puttable instruments and instruments with obligations arising on liquidation'
applies to the Group from the annual period commencing 1st April 2009.
IAS 39 (Amendment) 'Financial instruments: Recognition and measurement - Eligible hedged items’
applies to the Group from the 1st April 2010.
IFRIC 13 'Customer loyalty programmes' applicable to the Group from the annual period
commencing 1st April 2009.
IFRIC 16 'Hedges of a net investment in a foreign operation' applicable to the Group from the annual
period commencing 1st April 2009.
IFRIC 17 'Distributions of non-cash assets to owners' applicable to the Group from the annual period
commencing 1st April 2010.
IFRIC 18 'Transfer of assets from customers' applicable to the Group from the annual period
commencing 1st April 2010.
Telford RA Text  15/6/09  18:04  Page 59 notes to the financial statements
61     Telford Homes Plc 2009
1 Operating profit Year ended Year ended
31st March 2009 31st March 2008
restated 
£000 £000
Operating profit is stated after charging (crediting):
Depreciation - owned assets 302 271
- hire purchase assets 85 128
Operating lease rentals - property 163 162
- motor vehicles 387 216
Profit on sale of tangible assets (39) (24)
Exceptional items 2,984 -
The exceptional items for the year ended 31st March 2009 of £3.0 million include £2.9 million where
the net realisable value of land and work in progress on certain developments has been assessed to
be lower than the costs originally recorded in inventories as a result of the deterioration in market
conditions and £0.1 million of redundancy costs.
Year ended Year ended
31st March 2009 31st March 2008
£000 £000
The following has been charged in respect of auditors’ remuneration:
Audit and related services (PricewaterhouseCoopers LLP)
Statutory audit of the Parent Company and Group financial statements 65 59
Other services including non-audit services (PricewaterhouseCoopers LLP)
The audit of jointly controlled entity accounts pursuant to legislation 8 7
Other services provided pursuant to such legislation - -
Other services relating to taxation 52 23
All other services 27 21
Amounts payable to the Company’s auditors and their associates in respect of services to the
Company, other than the audit of the Company’s financial statements have not been disclosed as
the information is required instead to be disclosed on a consolidated basis.
31st March 2009
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Telford Homes Plc 2009 62
2 Employee benefit expense
The average monthly number of persons employed by the Group and Company, including executive
directors, during the year analysed by activity was as follows:
Year ended Year ended
31st March 2009 31st March 2008
Number Number
Construction 100 88
Administration 73 62
173 150
The employment costs of all employees included above were:
Year ended Year ended
31st March 2009 31st March 2008
£000 £000
Wages and salaries 7,945 8,045
Social security costs 870 901
Other pension costs - group personal pension arrangements 395 324
9,210 9,270
The Company operates a group personal pension scheme for its employees. At 31st March 2009
payments of £43,000 were due to the scheme (2008 - £47,000).
Six current directors are accruing benefits under group personal pension arrangements (2008 - Six).
Key management remuneration
Key management personnel, as defined under IAS 24 (Related Party Disclosures), have been
identified as the directors as all key decisions are reserved for the Board. Mark Parker and John
Fitzgerald were appointed to the Board on 1st August 2007 and prior to this held key management
positions that involved reporting directly to the Board. Their employment costs have been included
for the full year ended 31st March 2008. 
Year ended Year ended
31st March 2009 31st March 2008
£000 £000
Wages and salaries (including bonuses) 1,165 1,516
Social security costs 109 152
Other pension costs 79 73
Share-based payments 8 6
1,361 1,747
Detailed disclosures of directors’ individual remuneration, pension entitlement and share options for
those directors who served in the year are given in the directors’ remuneration report on pages 43 to 44.
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3 Finance income and costs Year ended Year ended
31st March 2009 31st March 2008
restated
£000 £000
Finance income 
Interest income on short-term bank deposits 216 493
Finance costs
Interest payable on bank loans and overdrafts (1,159) (367)
Hire purchase finance charges (4) (12)
(1,163) (379)
Net finance costs (947) 114
4 Taxation Year ended Year ended
31st March 2009 31st March 2008
restated
£000 £000
United Kingdom corporation tax at a rate of 28% (2008 - 30%) 1,313 1,924
Adjustment in respect of prior periods 54 85
Total current taxation 1,367 2,009
Deferred taxation (note 13) (47) 36
Income tax expense 1,320 2,045
In addition to the amount charged to the income statement, deferred tax of £30,000 (2008 - £194,000)
relating to share-based payments was charged directly to equity.
The changes in accounting policies implemented in the current year have resulted in an income tax
asset of £342,000 (2008 - £4,624,000), which is recovered either through repayments or a reduction in
future tax due.
Reconciliation of effective tax rate
The tax assessed for the year is higher (2008 - higher) than the standard rate of corporation tax in the
UK of 28% (2008 - 30%). The differences are explained below:
Profit before income tax 4,343 6,542
Profit before income tax at standard rate of 1,216 1,963
corporation tax in the UK of 28% (2008 - 30%)
Effects of:
Adjustment in respect of prior periods 54 85
Expenses not deductible for tax purposes 123 38
Tax relief on land remediation costs (73) (41)
Income tax expense 1,320 2,045
The UK corporation tax rate changed from 30% to 28% with effect from 1st April 2008. All deferred tax
assets and liabilities are now recognised at 28%.
notes to the financial statements
31st March 2009
Telford RA Text  15/6/09  18:04  Page 62 financial statements
Telford Homes Plc 2009 64
5 Dividend paid Year ended Year ended
31st March 2009 31st March 2008
£000 £000
Prior year final dividend paid in July 2008 of 5.5p (July 2007 - 4.9p) 2,061 1,818
Interim dividend paid in January 2009 of nil (January 2008 - 4.5p) - 1,680
2,061 3,498
The directors are not recommending payment of a final dividend for the year ended 31st March 2009.
6 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders
by the weighted average number of ordinary shares outstanding during the year, excluding those
held in the Share Incentive Plan. For diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.
Earnings per share have been calculated using the following figures: 
Year ended Year ended
31st March 2009 31st March 2008
restated
Weighted average number of shares in issue 37,381,374 36,971,367
Dilution - effect of share schemes - 318,266
Diluted weighted average number of shares in issue 37,381,374 37,289,633
Profit from continuing operations after tax £3,023,000 £4,497,000
Earnings per share:
Basic 8.1p 12.2p
Diluted 8.1p 12.1p
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7 Investments
Investments in subsidiary undertakings 2009 2008
£000 £000
Cost 
At 1st April - -
Additions 3 -
At 31st March 3 -
Investments in jointly controlled entities 2009 2008
£000 £000
Cost 
At 1st April 1 1
Additions --
At 31st March 1 1
Investments in subsidiary undertakings
The subsidiary undertakings which principally affect profits and net assets of the Group comprise:
Share of ordinary
capital held by Country of Accounting Principal
the Group registration date activity
Telford Homes (Romford) Limited 100% England 31st March Property development
Telford Homes (Properties) Limited 100% England 31st March Property development
Telford Homes (Investments) Limited 100% England 31st March Property development
During the year the Group acquired 100% of the issued share capital of Telford Homes (Romford)
Limited, Telford Homes (Properties) Limited and Telford Homes (Investments) Limited for a total
consideration of £1,000 each.
A full list of subsidiary undertakings is available on request from the Group's registered office.
Investments in jointly controlled entities
The Group’s investments in jointly controlled entities comprise:
Share of ordinary
capital held by Country of Accounting Principal
the Group registration date activity
Telford Homes (Stratford) Limited 50% Scotland 31st March Property development
Telford Homes (Creekside) Limited 50% Scotland 31st March Property development
Bishopsgate Apartments LLP 50% England 31st March Property development
Investments in jointly controlled entities are accounted for using proportional consolidation.
notes to the financial statements
31st March 2009
Telford RA Text  15/6/09  18:04  Page 64 financial statements
Telford Homes Plc 2009 66
The Group’s share of the assets and liabilities and the income and expenses of jointly controlled
entities is as follows:
31st March 31st March
2009 2008
£000 £000
Current assets 37,376 34,658
Current liabilities (33,651) (31,076)
Net assets of jointly controlled entities 3,725 3,582
Income 6,003 23,443
Expenses (5,860) (20,096)
Share of results of jointly controlled entities 143 3,347
8 Property, plant and equipment
Group and Company Leasehold Plant and Motor
improvements machinery vehicles Total
£000 £000 £000 £000
Cost
At 1st April 2007 restated 261 1,112 496 1,869
Additions 1 328 - 329
Disposals - (284) (91) (375)
At 31st March 2008 restated 262 1,156 405 1,823
Additions - 99 - 99
Disposals - (141) (147) (288)
At 31st March 2009 262 1,114 258 1,634
Depreciation
At 1st April 2007 restated 31 617 244 892
Charge 27 244 128 399
Disposals - (284) (91) (375)
At 31st March 2008 restated 58 577 281 916
Charge 26 276 85 387
Disposals - (140) (147) (287)
At 31st March 2009 84 713 219 1,016
Net book value
At 31st March 2008 restated 204 579 124 907
At 31st March 2009 178 401 39 618
Motor vehicles with a net book value of £39,000 are held under hire purchase arrangements (2008 -
£124,000). Depreciation of £85,000 was charged during the year on these assets (2008 - £128,000).
Authorised future capital expenditure that was contracted, but not provided for, in these financial
statements amounted to £nil (2008 - £nil).
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9 Inventories Group Group Company Company
31st March 31st March 31st March 31st March
2009 2008 2009 2008
restated restated
£000 £000 £000 £000
Development properties 177,941 179,113 142,242 148,988
All inventories are considered to be current in nature. The operating cycle is such that a proportion 
of inventories will not be realised within twelve months. It is not possible to determine with accuracy
when specific inventory will be realised as this will be subject to a number of issues such as consumer
demand and planning permission delays.
Included within development properties for the Group and Company are freehold interests held for
future sale of £3,676,000 (2008 - £2,850,000).
The value of inventories expensed in cost of sales in 2009 was £88,111,000 (2008 - £78,599,000). Costs
capitalised during the year include interest of £5,255,000 (2008 - £7,757,000), which is capitalised
based on the cost of the site specific borrowings.
During the year the Group conducted a review of the net realisable value of its inventories in light of
the deterioration in the UK housing market. Where the estimated net realisable value was less than its
carrying value within the balance sheet the Group has written down the value of inventories. The
total amount recognised as an expense within exceptional items was £2,868,000.
notes to the financial statements
31st March 2009
Telford RA Text  15/6/09  18:04  Page 66 financial statements
Telford Homes Plc 2009 68
10 Trade and other receivables Group Group Company Company
31st March 31st March 31st March 31st March
2009 2008 2009 2008
restated restated
£000 £000 £000 £000
Current receivables
Amounts recoverable on contracts 7,701 9,987 4,671 6,530
Amounts owed by Group undertakings - - 826 -
Amounts owed by jointly controlled entities 351 1,192 8,735 11,508
Trade receivables 76 43 76 43
Other receivables 428 686 414 552
Prepayments and accrued income 542 723 542 723
9,098 12,631 15,264 19,356
Amounts recoverable on contracts
Contract revenue of £22,237,000 (2008 - £31,053,000) has been recognised by the Group in the year.
In relation to contracts in progress at the balance sheet date:
Group Group Company Company
31st March 31st March 31st March 31st March
2009 2008 2009 2008
restated restated
£000 £000 £000 £000
Contracts where costs incurred plus recognised profits 7,701 9,987 4,671 6,530
exceed payments to date included in receivables
Contracts where payments to date exceed costs (3,425) (1,319) (905) (1,319)
incurred plus recognised profits included in payables
4,276 8,668 3,766 5,211
Total costs incurred plus recognised 78,438 68,372 65,490 57,047
profits on contracts
Payments to date (74,162) (59,704) (61,724) (51,836)
4,276 8,668 3,766 5,211
At 31st March 2009 retentions held by customers for contract work performed by the Group
amounted to £1,126,000 (2008 - £947,000).
11 Cash and cash equivalents Group Group Company Company
31st March 31st March 31st March 31st March
2009 2008 2009 2008
£000 £000 £000 £000
Cash at bank and in hand 4,865 4,698 4,329 2,464
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12 Hire purchase liabilities
Group and Company 31st March 31st March
2009 2008
£000 £000
Gross hire purchase liabilities:
Due within one year 19 87
Due in more than one year and less than five years - 18
19 105
Less future interest (1) (4)
Net hire purchase liabilities 18 101
Net hire purchase liabilities are repayable as follows:
Due within one year 18 83
Due in more than one year and less than five years - 18
18 101
13 Deferred income tax
Group and Company 31st March 31st March
2009 2008
£000 £000
Deferred tax assets 69 76
Deferred tax liabilities (56) (80)
Deferred tax assets (liabilities) 13 (4)
As permitted by IAS 12 (Income Taxes), certain deferred tax assets and liabilities have been offset as
they arise in the same tax jurisdiction and are settled on a net basis. 
The movement on the deferred income tax account is as follows:
31st March 31st March
2009 2008
£000 £000
Brought forward (4) 226
Credited (charged) to the income statement 47 (36)
Charged directly to equity (30) (194)
13 (4)
The movement in deferred tax assets and liabilities during the year is as follows:
Capital Share-based Land remediation Total
allowances transactions timing differences
£000 £000 £000 £000
At 1st April 2007 51 296 (121) 226
Credited (charged) to the income statement 8 (85) 41 (36)
Charged directly to equity - (194) - (194)
At 31st March 2008 59 17 (80) (4)
Credited (charged) to the income statement 10 (36) 73 47
Charged directly to equity - (30) - (30)
At 31st March 2009 69 (49) (7) 13
The aggregate deferred tax credited directly to equity amounts to £nil (2008 - £30,000).
notes to the financial statements
31st March 2009
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Telford Homes Plc 2009 70
14 Trade and other payables Group Group Company Company
31st March 31st March 31st March 31st March
2009 2008 2009 2008
restated restated
£000 £000 £000 £000
Trade payables 8,573 8,126 8,573 7,978
Amounts due to jointly controlled entities 6 - 1,953 -
Amounts recoverable on contracts 3,425 1,319 905 1,319
Deposits received in advance 10,792 17,879 10,575 17,489
Social security and other taxes 309 329 309 329
Accrued expenses 4,833 10,242 3,359 8,730
Land creditors 2,596 13,696 2,596 13,696
30,534 51,591 28,270 49,541
15 Borrowings Group Group Company Company
31st March 31st March 31st March 31st March
2009 2008 2009 2008
£000 £000 £000 £000
Bank loans 112,020 101,424 88,086 81,770 
Further information on bank loans is given in note 20.
16 Share capital
Group and Company 31st March 31st March
2009 2008
£000 £000
Authorised
100,000,000 ordinary shares of 10p each 10,000 10,000
Allotted, called up and fully paid
38,750,000 ordinary shares of 10p each (2008 - 37,500,000) 3,875 3,750
On 5th August 2008, 500,000 ordinary shares were issued at 104.5p to Telford Homes Trustees Limited to
satisfy the requirements of the Share Incentive Plan (note 17).
On 23rd March 2009, 750,000 ordinary shares were issued at 26.5p to Telford Homes Trustees Limited to
satisfy the requirements of the Share Incentive Plan (note 17).
Ordinary shares may be issued in the future to satisfy the exercise of outstanding share options (note 17).
Details of own shares held within employee benefit trusts are disclosed in note 17.
All shares rank equally in respect of shareholder rights.
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17 Employee Share Schemes
Telford Homes Plc Employee Share Option Scheme
The Group operates both an approved share option scheme and an unapproved share option
scheme. Awards under each scheme are made periodically to new employees. All schemes are
equity-settled and options can normally be exercised three years after the grant date.
A charge is made to the income statement to reflect the calculated fair value of employee share
options over and above the exercise price paid by employees. This charge is calculated at the date
of grant of the options and is charged equally over the vesting period. The corresponding adjustment
to equity is made directly to the profit and loss reserve. In accordance with IFRS 2 (Share-based
payments), only costs relating to options issued after 7th November 2002 have been charged to the
income statement.
The Group has used the Black-Scholes-Merton formula to calculate the fair value of outstanding
options. Individual calculations have been performed for groups of share options with differing
exercise prices and dates. The assumptions applied to the Black-Scholes-Merton formula for share
options issued and the fair value per option are as follows:
2009 2008
Expected life of options based on options exercised to date 4 years 4 years
Volatility of share price based on three year share price history 46% 25-30%
Dividend yield 5% 3%-6%
Risk free interest rate 5% 5.25%-5.75%
Weighted average share price at date of grant 110p 231p
Weighted average exercise price 110p 231p
Weighted average fair value per option £0.32 £0.42
Expected volatility was determined by considering the volatility levels historically for the Company. Volatility
in more recent years is considered to have more relevance than earlier years for the period reviewed.
The charge calculated for the year ended 31st March 2009 was £195,000 (2008 - £109,000).
A reconciliation of option movements during each period is shown below:
Number Weighted average Number Weighted average
000's exercise price 000's exercise price
2009 2009 2008 2008
Outstanding at 1st April 2,147 173p 1,488 147p
Granted in the year 409 110p 1,330 231p
Forfeited in the year (312) 185p (399) 285p
Exercised in the year - - (272) 143p
Outstanding at 31st March 2,244 161p 2,147 173p
Exercisable at 31st March 833 119p 434 90p
The aggregate fair value of options granted in the year was £122,000 (2008 - £388,000).
The weighted average share price at the point of exercise of share options during the year ended
31st March 2008 was 282.5p. No share options were exercised in the year ended 31st March 2009.
.
notes to the financial statements
31st March 2009
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Telford Homes Plc 2009 72
At 31st March 2009 outstanding options granted over 10p ordinary shares were as follows:
Share option scheme Option price Number Dates exercisable
Group approved 143.5p 20,905 5 Aug 2007 to 5 Aug 2014
144.5p 83,044 6 Jan 2008 to 6 Jan 2015
138.5p 86,640 17 May 2008 to 17 May 2015
153.5p 175,887 10 Nov 2008 to 10 Nov 2015
167p 35,928 27 Feb 2009 to 27 Feb 2016
205p 87,804 15 June 2009 to 15 June 2016
213.5p 941,417 14 Feb 2011 to 14 Feb 2018
110p 381,808 12 June 2011 to 12 June 2018
Group unapproved 60.5p 50,414 5 Mar 2005 to 5 Mar 2012
75p 220,000 1 Oct 2005 to 1 Oct 2012
74.5p 59,732 20 Feb 2006 to 20 Feb 2013
138.5p 50,542 17 May 2008 to 17 May 2015
167p 50,000 27 Feb 2009 to 27 Feb 2016
Telford Homes Plc Share Incentive Plan
During the year ended 31st March 2004 Telford Homes Plc set up a Share Incentive Plan (SIP) for the
benefit of all of the employees of the Group. This SIP has been approved by the Inland Revenue and
confers certain tax advantages for participating employees.
The SIP provides for employees to purchase shares up to a value of £1,500 in each tax year. These
shares are known as 'Partnership shares'. Partnership shares are matched on a one for one basis by
'Matching shares' provided by the Group subject to the shares remaining in the SIP for a period not
less than three years. Dividends are paid on both Partnership and Matching shares and these are
allocated to employees as 'Dividend shares'.
The Group has set up a trust to administer the SIP and to hold shares on behalf of individual
employees. This trust is an entirely separate entity to the Group and is managed by a corporate
trustee, Telford Homes Trustees Limited. The costs associated with the trust are paid for by the Group
and the Group finances all share purchases.
The trust has distributed shares as Partnership shares and Dividend shares to employees participating
in the scheme. These shares remain in the trust until such time as an employee withdraws from the SIP.
Further shares have been allocated to employees as Matching shares and the cost of these shares is
being written off over the three year holding period. The charge in the year ended 31st March 2009 is
£131,000 (2008 - £109,000).
During the year ended 31st March 2009 the trust acquired 292 shares at 98.0p in August 2008, a further
500,000 shares at 104.5p in August 2008 and a further 750,000 shares at 26.5p in March 2009. At 31st
March 2009 the trust remains interested in 27,242 shares (2008 - 7,343) which have not been allocated
to employees and a further 731,913 (2008 - 217,489) that have been allocated to employees as
Matching shares but have not yet vested. Shares in which the trust remains interested do not rank for
dividends and all shares that have not yet vested do not count in the calculation of the weighted
average numbers of shares used to calculate earnings per share.
Shares held by the SIP are recognised as a deduction from shareholders’ funds. The value of these
shares at 31st March 2009 was £700,126 (2008 - £305,000). Movements in the profit and loss reserve
relating to the SIP are shown in the statement of changes in equity.
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17 Employee Share Schemes (continued)
Telford Homes Plc 2006 Deferred Payment Share Purchase Plan
During the year ended 31st March 2007 Telford Homes Plc set up a Deferred Payment Share Purchase
Plan (DPSPP) for the benefit of selected senior employees. An employee benefit trust (the Telford Homes
Plc 2006 Employee Benefit Trust) was set up with Abacus Corporate Trustee Limited acting as trustee.
Participants in the DPSPP are offered a loan by the trustee to enable them to subscribe for a specified
number of shares in the Group at market value. This loan is interest free repayable on or before the
repayment date which is normally ten years from the date of the loan or on leaving employment or
disposing of the shares. The loan has a limited recourse such that repayment is limited to the value of the
shares on the repayment date. The Group will lend the trustee sufficient funds to enable the trustee to
provide the loans to individual participants. All shares acquired under the DPSPP will be subject to a three
year vesting period and are held by the trustee for the benefit of the participants. Offers to participants
will be made periodically at the discretion of the directors of Telford Homes Plc.
In September 2006 selected employees were offered, and subscribed for, a total of 550,000 shares at the
market value of 260p. These shares were issued on 9th November 2006. On this date the Group provided
a loan to the trustee of £1,430,000 to enable the trustee to provide a loan to each of the participants. This
loan is repayable at the earlier of the sale of the vested shares and November 2016 and has been
recognised as a deduction from shareholders' funds in the statement of changes in equity.
In December 2007 selected employees were offered, and subscribed for, a total of 160,000 shares at the
market value of 244p. These shares were issued on 14th December 2007. On this date the Group provided
a loan to the trustee of £390,400 to enable the trustee to provide a loan to each of the participants. This
loan is repayable at the earlier of the sale of the vested shares and December 2017 and has been
recognised as a deduction from shareholders' funds in the statement of changes in equity.
18 Commitments and contingent liabilities
Commitments
At 31st March the Group and Company had outstanding commitments for future minimum lease
payments under non-cancellable operating leases which fall due as follows:
Property leases                    Other leases
2009 2008 2009 2008
£000 £000 £000 £000
Within one year 184 184 300 201
Between one and five years 737 737 215 320
Over five years 292 476 - -
1,213 1,397 515 521
Operating lease payments represent rentals payable by the Company for its office premises and
motor vehicles.
Contingent liabilities
On 23rd August 2005 the Company entered an agreement to purchase the site of the former halls of
residence of Queen Mary and Westfield College in South Woodford. At 31st March 2009 £22.9 million
(2008 - £13.9 million) had been paid for the site. No further liability has been accrued at 31st March
2009 (2008 - £7.3 million). Further payments are contingent on future sales at the development and
are estimated to be approximately £15 million (2008 - £14 million).
notes to the financial statements
31st March 2009
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Telford Homes Plc 2009 74
19 Related party transactions
The Board and certain members of senior management are related parties within the definition of IAS
24 (Related Party Disclosures).  
In July 2006 David Holland purchased an apartment from the Group at the OneStratford
development. Subsequently contracts were exchanged on 11th December 2006 for a parking space
at the same development. The combined purchase price was £262,500. The Group has received
deposits to the value of £26,250 with the balance due on legal completion which is scheduled for
June 2009. The purchase was approved at a previous Extraordinary General Meeting.
There have been no other transactions between key management personnel and the Group apart
from that referred to above.
Transactions between the Company and its subsidiaries, which are related parties, have been
eliminated on consolidation. The amounts outstanding from subsidiaries to the Company at 31st
March 2009 totalled £826,000 (2008 - £nil).
The Company has invoiced jointly controlled entities £14,334,000 in the year to 31st March 2009 for
construction services (2008 - £15,795,000).
The amounts outstanding from jointly controlled entities to the Company at 31st March 2009 totalled
£702,000 (2008 - £2,384,000) in respect of construction services. Amounts owed by the Company to
jointly controlled entities at the 31st March 2009 totalled £12,000 (2008 - £nil). In addition a net total of
£6,092,000 was owed to the Company at the 31st March 2009 from jointly controlled entities in respect
of shareholder loans (2008 - £9,124,000).
After proportional consolidation of the jointly controlled entities the Group has amounts outstanding
from jointly controlled entities totalling £351,000 at the 31st March 2009 (2008 - £1,192,000) and
amounts owed to jointly controlled entities of £6,000 (2008 - £nil).
20 Financial instruments
Categories of financial assets and financial liabilities are as follows:
Group Group Company Company
31st March 31st March 31st March 31st March
2009 2008 2009 2008
£000 £000 £000 £000
Financial assets
Loans and receivables:
Trade receivables 76 43 76 43
Other receivables 428 686 414 552
Cash and cash equivalents 4,865 4,698 4,329 2,464
5,369 5,427 4,819 3,059
Financial liabilities
Amortised cost:
Trade payables 8,573 8,126 8,573 7,978
Land creditors 2,596 13,696 2,596 13,696
Borrowings 112,020 101,424 88,086 81,770
Hire purchase liabilities 18 101 18 101
123,207 123,347 99,273 103,545
The Group does not enter into any derivative transactions and has no direct exposure to exchange
rate movements as its trade takes place entirely within the United Kingdom.
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20 Financial instruments (continued)
Trade and other receivables, trade payables and hire purchase liabilities
The fair value of trade and other receivables, trade payables and hire purchase liabilities at 31st
March 2009 is equal to the carrying value stated in the balance sheet at that date.  Hire purchase
liabilities include £nil (2008 - £18,000) due after more than one year.  All other trade and other
receivables and trade payables are due within one year.
Land creditors
Land purchases made on deferred payment terms are recorded at fair value using the effective
interest method in accordance with IAS 39 (Financial instruments - recognition and measurement).
The difference between the fair value and nominal value is amortised over the deferment period as
financing costs, increasing the land creditor to its full cash settlement value on the payment date. 
The interest rates used in the year to 31st March 2009 were between 3% and 6% (2008 - 6%). All land
creditors are due within one year.
Borrowings
The Group uses loan finance, all of which is denominated in sterling, to acquire development land
and undertake site construction. Existing loans and loan facilities are in place with three banks and
are secured by a debenture over the assets of the Group and by charges over the development 
sites owned by the Group.
At 31st March 2009 the Group had unutilised overdraft facilities of £3.0 million (2008 - £3.0 million).
The Group has site specific loan facilities with Allied Irish Bank totalling £27.6 million in respect of
certain development sites. At 31st March 2009 the Group had utilised £21.2 million of these facilities
leaving an unutilised balance of £6.4 million. The facilities expire on different dates depending on the
specific circumstances of each development and are normally repayable on completion of each
development from the sales proceeds received. Of the utilised loans of £21.2 million, none is due for
repayment within one year, £6.5 million is due for repayment after more than one year and less than
two years and £14.7 million is due for repayment after more than two years and less than five years.
In addition the Group’s jointly controlled entity, Bishopsgate Apartments LLP, has a loan facility with
Allied Irish Bank of £20.0 million in respect of the purchase of development land in Bethnal Green
Road. At 31st March 2009 Bishopsgate Apartments LLP had utilised all £20.0 million of this facility. The
Group has recorded its 50% share of the loan in its balance sheet at 31st March 2009. The facility is on
a rolling one year term and the bank had not served a notice to require repayment within one year
as at the date of signing the financial statements. 
The Group has site specific loan facilities with The Royal Bank of Scotland totalling £66.3 million in
respect of certain development sites. At 31st March 2009 the Group had utilised £62.2 million of these
facilities leaving an unutilised balance of £4.1 million. The facilities expire on different dates depending
on the specific circumstances of each development and are normally repayable on completion of
each development from the sales proceeds received. Of the utilised loans of £62.2 million, £43.3
million is due for repayment within one year, £16.0 million is due for repayment after more than one
year and less than two years and £2.9 million is due for repayment after more than two years and less
than five years.
In addition the Group’s jointly controlled entity, Telford Homes (Creekside) Limited, has a loan facility
with The Royal Bank of Scotland of £51.3 million in respect of the purchase of development land and
construction in Greenwich. At 31st March 2009 Telford Homes (Creekside) Limited had utilised £16.2
million of this facility leaving an unutilised balance of £35.1 million. The Group has recorded its 50%
share of the loan in its balance sheet at 31st March 2009. This facility is due for repayment in
December 2011.
Telford Homes (Creekside) Limited has entered into a bill of exchange for £6.5 million in respect of
deferred land payments due in July 2009. This bill of exchange attracts finance charges and as such
has been classified as borrowings within the accounts of Telford Homes (Creekside) Limited. The
Group has recorded its 50% share of the bill of exchange in its balance sheet at 31st March 2009.
The Group has site specific loan facilities with Barclays Bank totalling £12.6 million in respect of certain
development sites. At 31st March 2009 the Group had utilised £7.3 million of these facilities leaving an
notes to the financial statements
31st March 2009
Telford RA Text  15/6/09  18:04  Page 74 financial statements
Telford Homes Plc 2009 76
unutilised balance of £5.3 million. The facilities are due for repayment between June 2010 and
September 2010.
Interest is charged on all of the Group's facilities at either base rate plus a margin of between 2.5%
and 4.0% or LIBOR plus a margin of between 2.0% and 3.0%. 
Market risk
The Group is exposed to the financial risk of changes in interest rates both in terms of changes in the
base rate and LIBOR and in terms of individual banks attitude to market risk and their application of
either base rate or LIBOR to new facilities and the margin applied to each new facility.
In order to assess the risk interest costs are forecast on a monthly basis over a five year period using
estimates of likely changes in rates and actual costs are compared to this forecast. Volatility of interest
costs remained at an acceptable level in the year ended 31st March 2009 with the impact of falling
base rates partially offset by a number of the Group's facilities becoming linked to LIBOR as they fell
due for renewal. Interest on all facilities currently held is charged at floating interest rates and the
Group assesses the requirement for fixing interest rates on a regular basis.
The effect on the income statement of a 1% rise and a 1% fall in interest rates has been calculated to
assess interest rate sensitivity. Based on average monthly borrowings in the year, a 1% rise in interest
rates would have a negative effect of £1,252,000 before tax (2008 - £988,000), a 1% fall in interest
rates gives the same but opposite effect.
Capital risk
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a
going concern in order to provide returns for shareholders and meet its liabilities as they fall due whilst
maintaining an appropriate capital structure to reduce the costs of capital. The Group considers its
capital to be all of the components of net assets.
The Group ensures that there are appropriate controls over the purchase of land and levels of work in
progress in the business in order to appropriately manage its capital. In addition, the other methods
by which the Group can manage its short-term and long-term capital structure include adjusting the
level of ordinary dividends paid to shareholders, issuing new share capital and arranging debt.
Credit risk
Credit risk is the risk of financial loss where counterparties are not able to meet their obligations.
Trade and other receivables includes amounts recoverable on contracts which are due from housing
associations and balances due from other Group undertakings. The Group considers the credit quality
of the various debtors to be good in respect of the amounts outstanding and therefore credit risk is
considered to be low.
Surplus cash is held in secure bank deposit accounts with Allied Irish Bank, The Royal Bank of Scotland
and Barclays Bank.
Liquidity risk
Liquidity risk is the risk that the Group does not have sufficient financial resources to meet its
obligations as they fall due.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows over a
five year period and performing sensitivity analysis on these forecasts. The forecasts are necessarily
subject to a number of assumptions and judgements and these are tested on a reasonable basis by
the sensitivity analysis. These forecasts and the related sensitivity analysis are reviewed by the directors
in detail on a monthly basis. In addition all of the forecasts and supporting calculations are made
available to each bank funding the Group on a monthly basis. The current forecasts show positive
cash balances beyond the next twelve months even where this is subjected to sensitivity testing and
at no time is the Group forecasting to make use of its overdraft facilities.
The Group utilises bank facilities to ensure that adequate funding is available to cover working capital
requirements and the directors consider that existing facilities are sufficient to cover funding requirements
in the foreseeable future both where these have already been utilised and where they are currently
unutilised. Where facilities are due to expire within one year this is due to the timing of the relevant
developments and therefore the expected repayment dates. In all of these cases the directors are
satisfied that the loans are expected to be repaid by the date the facility expires.
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20 Financial instruments (continued)
Some of the Group's bank facilities are subject to a number of general and financial covenants which
are tested periodically by each bank. In all cases the directors have assessed whether the Group will
remain in compliance with the covenants for at least twelve months after signing the financial
statements and are satisfied that there will be no breach of the covenants that cannot be easily
rectified. In isolated cases it is possible that on professional valuation of the gross development value
of certain sites, should these be required by the relevant bank, there may be a breach of current loan
to gross development value covenants as this would be subject to a third party opinion of current
market values at any time. The directors have assessed situations where this may occur on a prudent
basis and concluded that, whilst it is considered extremely unlikely that any loan repayments will be
required given recent discussions with each bank, necessary loan repayments to correct any such
breach could be accommodated by forecast future cash resources.
The maturity profile of financial liabilities for the Group is as follows:
Trade Land Borrowings Net hire Total
payables creditors purchase
liabilities
£000 £000 £000 £000 £000
Within one year 8,573 2,596 43,306 18 54,493
More than one year and - - 39,777 - 39,777
less than two years
More than two years and - - 28,937 - 28,937
less than five years
31st March 2009 8,573 2,596 112,020 18 123,207
Trade Land Borrowings Net hire Total
payables creditors purchase
liabilities
£000 £000 £000 £000 £000
Within one year 8,126 13,696 38,042 83 59,947
More than one year and - - 49,816 18 49,834
less than two years
More than two years and - - 13,566 - 13,566
less than five years
31st March 2008 8,126 13,696 101,424 101 123,347
notes to the financial statements
31st March 2009
Telford RA Text  15/6/09  18:04  Page 76 financial statements
Telford Homes Plc 2009 78
21 Early adoption of IFRIC 15 and IAS 23 (revised)
IFRIC 15 'Agreements for the construction of real estate'
IFRIC Interpretation 15 ‘Agreements for the construction of real estate’ was issued on 3rd July 2008
and is effective for periods beginning on or after 1st January 2009. The Group has taken up the option
of adopting IFRIC 15 from 1st April 2008.
IFRIC 15 has arisen due to differing opinions on whether the revenue from certain real estate
transactions should be recognised in accordance with IAS 18 ‘Revenue’ or in accordance with IAS 
11 ‘Construction contracts’. The guidance in the existing standards allows flexibility in the accounting
treatment that should be adopted.
The Group has historically accounted for revenues and therefore profits from all property sales in
accordance with IAS 11. Under IAS 11 revenue is recognised on a percentage of completion basis
once contracts for the sale of a property have been exchanged and then only if the eventual profit
from that property can be foreseen with reasonable certainty.
IFRIC 15 concludes that revenue from open market sales of real estate should be accounted for on
legal completion of the properties in accordance with IAS 18. The sale of properties under certain
terms within specific construction contracts will continue to be accounted for under IAS 11 and in the
Group’s case this applies to all sales of affordable homes. The accounting treatment for affordable
homes is therefore unaffected by IFRIC 15.
The Group now recognises revenue from the sale of open market private homes and commercial
units entirely at the point of legal completion in accordance with IAS 18. As a result of adopting IAS 
18 all selling expenses previously capitalised within inventories and included within cost of sales when
revenue was recognised are now expensed as incurred unless they relate to the creation of a
tangible asset such as a fixed sales office. These selling expenses are charged after gross profit but
within operating profit.
The most significant impact of IFRIC 15 on the reported results of Telford Homes is therefore the
deferral of profits previously recognised from the point of exchange of contracts onwards until the
point of legal completion. 
IAS 23 (revised) 'Borrowing costs'
IAS 23 (revised) ‘Borrowing costs’ is effective for periods beginning on or after 1st January 2009. The
Group has taken up the option of adopting IAS 23 (revised) from 1st April 2008. 
IAS 23 (revised) requires an entity to capitalise borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets as part of the cost of those assets. Qualifying assets are
those that take a substantial period of time to get ready for use or sale. Previously, under the existing IAS
23, an entity was able to choose whether to capitalise borrowing costs or to write them off as incurred.
Each development undertaken by the Group represents a qualifying asset under IAS 23 (revised) due
to the period of time taken in obtaining planning consent and completing construction on the site.
Each development typically has site specific finance and therefore borrowing costs can be directly
attributed to each site.
As a result of the adoption of IFRIC 15 the impact of IAS 23 (revised) is typically to defer the expensing
of borrowing costs to the income statement. Previously borrowing costs were written off as incurred
over the life of each development and now a substantial proportion will not be expensed until legal
completion of the open market private homes.
A restated income statement and balance sheet for the year ended 31st March 2008 are included on
pages 80 to 81. The only changes required to cash flow statements previously reported are presentational.
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21 Early adoption of IFRIC 15 and IAS 23 (revised) (continued)
Impact on income statement for the year ended 31st March 2008
Revenue for the year ended 31st March 2008 is reduced by £63.3 million as a result of the timing
difference between contract exchanges and legal completions under IFRIC 15. Revenue is reduced
by a further £0.4 million as a result of IAS 23 (revised) and the modest effect it has on the percentage
completion of affordable homes.
Cost of sales for the year ended 31st March 2008 is reduced by £50.7 million as a result of the change
in recognition of revenue under IFRIC 15 and the separate write off of selling expenses. Under IAS 23
(revised) cost of sales is increased by £3.6 million where finance costs have been capitalised within
inventories and released to cost of sales as revenue is recognised.
Administrative expenses for the year ended 31st March 2008 are increased by £45,000 due to
depreciation of sales offices now recognised as tangible assets. Other selling expenses are now
written off as incurred increasing total expenses by a further £2.3 million.
Finance costs in the year ended 31st March 2008 are reduced by £7.8 million as these are capitalised
under IAS 23 (revised). Remaining finance costs relate to non development specific costs and bank
interest on developments where capitalisation has been suspended.
Profit before income tax is reduced from £17.7 million to £6.5 million. The income tax expense is
restated by 30 percent of the net impact on profit before income tax.
Impact on balance sheet as at 31st March 2008
Property, plant and equipment is increased by £85,000 at 31st March 2008 as a result of the cost of
constructing sales offices now being recognised as tangible assets rather than forming part of inventories.
Inventories at 31st March 2008 increased by £97.4 million as a result of the deferral of revenue
recognition to the point of legal completion under IFRIC 15 and therefore the consequent reduction
in inventories charged to cost of sales. Capitalisation of finance costs under IAS 23 (revised) further
increases inventories by £7.3 million.
Receivables at 31st March 2008 reduced by £125.9 million under IFRIC 15 as a result of revenue on open
market homes now only being recognised as completion proceeds are received. A further reduction of
£0.8 million results from the change in percentage completion on affordable sales as a result of
capitalising finance costs under IAS 23 (revised). An element of receivables then become payable
balances primarily representing deposits received in advance and are reclassified as such.
As a result of the significant deferral of profits previously recognised up to 31st March 2008 into future
years the previous income tax liability becomes an income tax asset of £4.6 million created by the
impact of both IFRIC 15 and IAS 23 (revised).
The movements in retained earnings at 31st March 2008 represent the cumulative adjustments to the
income statement reducing retained profits by £19.9 million as a result of IFRIC 15 and increasing
them by £4.5 million as a result of IAS 23 (revised). 
Net assets and therefore total equity are reduced from £64.2 million to £48.9 million at 31st March 2008.
notes to the financial statements
31st March 2009
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Telford Homes Plc 2009 80
Group income statement reconciliation for the year ended 31st March 2008
Previously IFRIC 15 IAS 23 Restated 
reported 
£000 £000 £000 £000
Revenue
Sales of properties 159,626 (63,264) (392) 95,970
Other direct income 807 - - 807
160,433 (63,264) (392) 96,777
Cost of sales
Sales of properties (125,698) 50,712 (3,613) (78,599)
Other direct costs (1,157) - - (1,157)
(126,855) 50,712 (3,613) (79,756)
Gross profit 33,578 (12,552) (4,005) 17,021
Administrative expenses (8,208) (45) - (8,253)
Selling expenses - (2,340) - (2,340)
Operating profit 25,370 (14,937) (4,005) 6,428
Finance income 493 - - 493
Finance costs (8,136) - 7,757 (379)
Profit before income tax 17,727 (14,937) 3,752 6,542
Income tax expense (5,400) 4,481 (1,126) (2,045)
Profit after income tax 12,327 (10,456) 2,626 4,497
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notes to the financial statements
31st March 2009
21 Early adoption of IFRIC 15 and IAS 23 (revised) (continued)
Group balance sheet as at 31st March 2008
Previously IFRIC 15 IAS 23 Reclassify Restated 
reported 
£000 £000 £000 £000 £000
Non current assets
Property, plant and equipment 822 85 - - 907
Deferred income tax assets - - - - -
822 85 - - 907
Current assets
Inventories 74,446 97,370 7,297 - 179,113
Trade and other receivables 120,174 (125,933) (808) 19,198 12,631
Current income tax assets - - - 4,624 4,624
Cash and cash equivalents 4,698 - - - 4,698
199,318 (28,563) 6,489 23,822 201,066
Total assets 200,140 (28,478) 6,489 23,822 201,973
Non current liabilities
Hire purchase liabilities (18) - - - (18) 
Deferred income tax liabilities (4) - - - (4)
(22) - - - (22)
Current liabilities
Trade and other payables (32,393) - - (19,198) (51,591)
Current income tax liabilities (1,971) 8,543 (1,948) (4,624) -
Borrowings (101,424) - - - (101,424)
Hire purchase liabilities (83) - - - (83)
(135,871) 8,543 (1,948) (23,822) (153,098)
Total liabilities (135,893) 8,543 (1,948) (23,822) (153,120)
Net assets 64,247 (19,935) 4,541 - 48,853
Capital and reserves
Issued share capital 3,750 - - - 3,750
Share premium 29,749 - - - 29,749
Retained earnings 30,748 (19,935) 4,541 - 15,354
Total equity 64,247 (19,935) 4,541 - 48,853
Telford RA Text  15/6/09  18:04  Page 80 Telford Homes Plc 2009 82
development guide 2009
WA N S T E A D
FLAT S
HOSPITAL 
HILL WOOD
W A L THAMSTOW
MARSHES
EPPING FOREST
BUCKHIRST
HILL
 BLAC K HORS E L ANE B179                              BLUET ROAD
M11
M11
4
 
 
  
  
     R O U N D W A Y            B R U C E G R O V E
                H I G H R O A D A 1 0 
 
 
 
 
  
G R E A T C A M B R I D G E R O A D A 1 0
G R E E N L A N E S 
    
  
 
            W O O D F O R D N E W R O A D  
  A 1 0 4            H I G H R O A D A 1 1 9 9     E P P I N G N E W R O A D 
 
  
F O R E S T R O A D     B R O A D    L A N E       
        
WA T E RME A D W AY  
 
 
           M E R I D I A N W AY
F O RE S T R E E T  
                
H I G H R O A D
      H E R M ON H I L L 
 
          
C H I G W E L L R O A D     A 1 1 3  
 
 
H I G H R O A D   
 
A 1 2                A1 2 
 A 1 2  E A S T E R N A V E N U E
            H E D G E L A N E
 
L O R D S H I P L A N E
               W E ST G R E E N R O A D
             
       C H I N G F O R D R O A D  O L D C H U R C H ROA D 
 
 
 
C R A N B R O O K R O A D 
 
 H A I N A U L T R O A D
               A 1 3        A L F R E D S W AY
              C R A N B R O O K R O A D 
 
                I L F O R D L A N E A 1 2 3
HIGH S T R E E T S O U T H H I G H S T R E E T N O R T H
                R O M F O R D R O A D
H E A D 
            K I N G S R O A D 
 
W H I T E H A L L R O A D
W O O D F O R D R D  
     H I G H R O A D
N E W R O A D  
 
C H I N G F O R D L A N E
LONDON
CITY 
AIRPORT
RIVER THAMES
R O YA L A L B E R T W AY
  A L B E R T WAY
A 2 0 5   J O H N W I L S O N S T R E E T         A C A D E M Y R O A D
 
FINSBUR Y
PA R K
W A NSTEAD
GOLF
COURSE
T H A
WOOLWICH FE RRY
M E S
FL O O D
B A R R I E R
RIVER LEA
WEST
RESERVOIR
EAST
RESERVOIR
BRIDGE
FARRINGDON RD. FARRINGDON ST
WATERLOO RD.
G R O V E L O R D S H I P R D.
SHOOTER S HI L L R OA D A 2
ROCHESTER WAY RELIEF RD.
HACKNEY HACKNEY
SHOREDITCH SHOREDITCH
SOUTHWARK SOUTHWARK
LEWISHAM LEWISHAM
WANSTEAD WANSTEAD
CHINGFORD CHINGFORD
EDMONTON EDMONTON
TOTTENHAM TOTTENHAM
HARRINGAY HARRINGAY
STOKE STOKE
NEWINGTON NEWINGTON
STAMFORD STAMFORD
HILL HILL
TOTTENHAM TOTTENHAM
HALE HALE
HIGHAM HIGHAM
HILL HILL
LOUGHTON
CHIGWELL CHIGWELL
WOODFORD WOODFORD
WOODFORD WOODFORD
BRIDGE BRIDGE
WOODFORD WOODFORD
GREEN GREEN
GREENWICH GREENWICH
STEPNEY STEPNEY
BOW BOW
STRATFORD S T R A T F O R D
LEYTON LEYTON
WEST HAM WEST HAM
BECKTON BECKTON
RESERVOIRS
RIVER LEA NAVIGATION
HIGH ROAD            LEYTON                       HIGH RD
CANARY C A N A R Y
WHARF W H A R F
E13
E15
E3
E11
N16
N15
N13
N9
N17
N18
E4
IG9
IG7
IG6
IG5
IG8
E18
IG4
IG11
E6
E16
N5
N1
E2
E2
E1
EC1
EC4
EC3
E14
CITY OF C I T Y O F
LONDON L O N D O N
SE10
SE7
SE16
SE8
SE1
SE11
SE17
SE15
EC2
E5
E9
E7
E10
E17
HACKNEY HACKNEY
NEWHAM NEWHAM
TOWER HAMLETS TOWER HAMLETS
SOUTHWARK SOUTHWARK
LEWISHAM LEWISHAM
GREENWICH GREENWICH
WALTHAM  FOREST WALTHAM  FOREST
ENFIELD
ILFORD ILFORD
BARKING BARKING
DOCKLANDS DOCKLANDS
ISLINGTON ISLINGTON
DLR
DLR
DLR DLR
Queen Mary’s Gate,
South Woodford
Chepstow
Nayland Court,
Romford
Bethnal Green Rd
Holland Estate
Stadthaus
Lesney
Greenwich Creekside
Stadia
Decorum
Vellum
Kinetica
Queens Road
Lanrick Road
Metro East
Casa
St. Anne’s Row
St. George’s Estate
SoBow
Bede Estate
Icona
B A R K I N G RO A D A 1 2 4
E A S T  I N D I A  D O C K  A 1 3 S I L V E RTO W N W AY A 1 0 2 0  
M A N O R  R O A D A 1 0 1 1
C A M B E R W E L L N E W R O A D A 2 0 2                                                                          QUEENS ROAD A202
LEWISHAM WAY A20
N E W K E N T R O A D A 2 0 1                          O L D K E N T R O A D A 2
C A R P E N T E R ’ S R O A D A 1 1 5
       A12                                A12                          A12
B L A C K F R I A R S R O A D A 2 0 1
E A S T S M I T H F I E L D    T H E H I G H W AY A 1 2 0 UPPER THAMES STREET A321
                        A 5 0 3                           S E V E N   S I S T E R S   R O A D   A 5 0 3
G R E E N   S T R E E T   B 1 6 7
BLACKHORSE ROAD        
       MARKHOUSE    ROAD    A1006                      CHURCH    ROAD      A1006
WALTHAMSTOW WALTHAMSTOW
B U S H R O A D A 1 1 4
HOE STREET                      A112 
 A M H U S T   P A R K   A 1 0 7
LORD   PARK   NANNOR   ROAD   B105
OLD STREET A5201
 CLERKENWELL ROAD      OLD STREET A5201
E S S E X R O A D A 1 0 4
C I T Y R O A D A 5 0 1
U P P E R S T R E E T A 1
G R O V E R O A D A 1 2 0 5
HOMMERTON ROAD B112
  A S P E N   W A Y   A 1 2 6 1
S A L T E R R O A D B 2 0 5
R E D R I F F R O A D A 2 0 2
LOWER ROAD A200
COMMERCIAL S T REET
B E T H N A L G R E E N A 1 2 0 9
R O T H E R H I T H E N E W R O A D A 2 2 0 2
A B B Y S T R E E T B 2 0 2
W A L W O R T H R O A D A 2 1 5
S O U T H W A R K S T. A 3 2 0 0
BISHOPS GATE SHOREDITC H HIGH STREET
W H I T E C H A P E L R O A D A 1 1                  M I L E E N D R O A D A 1 1
     LEA      BRIDGE      ROAD       A104                                                               LEA    BRIDGE    ROAD    A104
S t . P A U L’ S R D A 1 1 9 9
 U P T O N  L A N E     A 1 1 4
CENTRE ROAD      WOODFORD ROAD       WOODGRANGE ROAD
GREENWICH HIGH ROAD   A206
DLR
G R E E N L A N E S A 1 0 5
G R E E N   L A N E S   A 1 0 5
A206                                         WOOLWICH ROAD A206
A 4 0 6 
 
 
 
  
A 4 0 6  
  
 
A 4 0 6 
 
 
  A 4 0 6     
        A 4 0 6  
 
 A 4 0 6 
DALSTON LANE
CUTTY
SARK
The O2
LEYTONSTONE HIGH ROAD                                    LEYTONSTONE HIGH ROAD
OneStratford
Merchants’ Quarter
Current and future developments showing proximity to three key areas
of growth and employment - The City, Canary Wharf and Stratford
Telford RA Cov  15/6/09  17:13  Page 83 Telford Homes Plc
First Floor, Stuart House,
Queensgate, Britannia Road,
Waltham Cross, Herts, EN8 7TF
Tel: 01992 809800
Fax: 01992 809801
www.telfordhomes.plc.uk
Telford RA Cov  15/6/09  17:13  Page 84