COUNTRY & METROPOLITAN PLC ANNUAL REPORT & ACCOUNTS 2003
COUNTRY &
METROPOLITAN
PLC
Annual Report & Accounts 2003 Contents
Financial Highlights 1
Chairman’s Statement 2
Chief Executive’s Review 4
Operational Review 6
Financial Review 18
Environmental Statement 19
Board of Directors 20
Directors & Advisors 21
Directors’ Report 22
Corporate Governance Statements 23
Directors’ Remuneration Report 24
Consolidated Profit & Loss Account 26
Consolidated Statement of Total Recognised Gains & Losses 26
Consolidated Note of Historical Cost Profits & Losses 26
Balance Sheets 27
Consolidated Cash Flow Statement 28
Notes to the Accounts 29
Report of the Auditors 47
Financial Calendar
6 October 2003 Preliminary announcement
31 December 2003 Interim period
28 November 2003 Annual General Meeting
9 January 2004 Payment of Final Dividend
March 2004 Expected announcement of unaudited interim
results for six months ending 31 December 2003
Grey Towers Park. The Gothic Mansion at Nunthorpe, Middlesbrough 9.71
14.40
Shareholders’ Funds
(£m) - up 20%
Granary Wharf, Gainsborough, Lincolnshire
Demolition of the former silos at the
Gainsborough site is underway for Pelham Homes.
We propose to build between 80 and 110 new
two, three and four bedroom semi-detached and
detached houses on the initial phase. Some
homes will be on the riverside, overlooking the
River Trent. 
This 5.5 acre site will take about 2 years to
complete with total sales in the region of £5
million. The silos have been on the site for at
least 50 years.
Operating Profit
(£m) - up 76%
Profit before tax
(£m) - up 72%
Earnings per share
(pence) - up 56%
4.74
99 00 01 02 03 99 00 01 02 03 99 00 01 02 03 99 00 01 02 03
2.58
2.11
1.61
2.21
1.00
11.64
12.35
9.86
19.41
3.69
5.07
*
8.94
*
3.99*
6.85
*
16.56
*
25.91*
Country & Metropolitan PLC   Annual Report & Accounts 2003 1
*before amortisation of goodwill
Country & Metropolitan is a leading developer of urban regeneration projects throughout the UK.
Over 85% of our homes are built on brownfield sites comfortably exceeding the governments
target of 60%. The Group has a highly skilled team dedicated to maximising returns whilst
creating developments which add real value to communities and the environment.
23.34
Financial Highlights Country & Metropolitan has delivered another set of outstanding
results in what is a shortened ten month period to 30 June 2003.
Profit before tax and amortisation of goodwill rose to £6.85m. This
record result confirms the Board’s confidence expressed in the
interim statement and I am positive that the Group is well placed
to continue such progress.
Results and dividend
The Group changed its financial year to 30 June following the
acquisition of NorthCountry Homes Group Limited (“NorthCountry”)
and during this shortened ten month period to 30 June 2003 it has
achieved an increase in pre-tax profits before amortisation of
goodwill of 72% to £6.85m (2002: £3.99m).  Operating profit
before amortisation of goodwill rose by 76% to £8.94m (2002:
£5.07m), which resulted in basic earnings per share before
amortisation of goodwill increasing by 56% to 25.91p (2002:
16.56p) per share.  As a consequence, I am pleased to report that
the Board is proposing to increase the final dividend by 21.5% to
2.60p (2002: 2.14p) per share bringing the total for the period to
3.30p (2002: 2.75p).  The final dividend will be paid on 9 January
2004 to shareholders on the register on 12 December 2003.
The Group’s net gearing has reduced from 150% to 139% at the
period end with interest cover increasing from 2.86 to a
comfortable level at 4.28 which is also cushioned by the current
annual rental income of £890,000.  Net asset value per share has
increased to 123.5p per share (2002: 102.7p) representing
shareholders’ funds of £23.3m (2002: £19.4m).
Operating review
As expressed last year and at the interim stage, the Group has
withdrawn from the more difficult luxury homes market in the
South East with only two such units available for sale.  We are
focused primarily to provide homes that are priced at levels which
are affordable in the relevant markets and have commenced some
new initiatives in the South East to achieve this objective.  These
initiatives are in line with the government’s aspirations and also
serve the requirements of local authorities.
However, an exception to the above is our ownership in what we
believe to be one of the most prime sites in London, opposite
Hampton Court Palace, with a direct frontage to the River Thames.
We have now signed heads of agreement with Network Rail for a
major mixed use development of the adjoining Hampton Court
Station and work is progressing for a joint planning application to
be submitted following formal agreement being concluded with
Network Rail.
The Southern Region has sold all the units at the development in
Moseley, Birmingham and has acquired further sites in
Wolverhampton suitable for regeneration.  The development in
Moseley has won the Birmingham Post & Mail Award for Best
Starter Home.
Our city centre development known as "Blue" at Granary Wharf in
Leeds is 50% sold with further units now released for sale.
Construction is expected to be completed in summer 2004.
Development of 43 units at our site at Poole Hospital in
Middlesborough has commenced and we have secured 9
reservations off plan at prices in excess of budget.  A planning
application has been submitted for the conversion of approximately
240,000 square feet of listed buildings, 368,000 square feet of new
build homes and 150,000 square feet of commercial space at High
Royds Hospital in Menston near Leeds and consent is expected later
in the year.  The Group has a 50% interest in this project via a joint
venture company.  The North West region is growing steadily and
Chairman’s Statement
2 Country & Metropolitan PLC   Annual Report & Accounts 2003
“The Group is now playing a leading role in urban redevelopment in the UK, with
a particular focus on affordable homes in the north of England.”
David Laing
Chairman has sold 31 of the 42 units at Jackson’s Warehouse in Manchester
with healthy margins and has secured approximately 300 plots for
future development.
NorthCountry’s five regions operating in the North of England have
had a successful period with 542 units sold during the ten months
to 30 June 2003.  It has now secured a resolution to grant planning
consent for approximately 250 units at Havelock Hospital in
Sunderland and construction is expected to commence shortly.
NorthCountry is focused on increasing its land bank suitable for the
first time buyer market and is continuing to achieve this at very
competitive prices. One of its key objectives is to increase the
number of outlets which has been thwarted by the nationwide
frustration in the planning system.  I am pleased to report that to
support the continuing growth of NorthCountry, the management
team led by Jolyon Harrison has been strengthened by the
appointment of Steve Murray as managing director.  Steve Murray
has 20 years experience in the house building sector and was an
executive director of Beazer Group PLC for 6 years.
The Group currently owns or controls 4,200 plots of which 1,790
plots have planning consent.  In addition it owns or controls
strategic land representing potential for a further 1,800 units.
Board Appointment
This year the Group also announced the appointment of Terry
Roydon as Non-Executive Director. I would like to take this
opportunity of formally welcoming Terry to the Board.
Terry has over 35 years experience in the house building industry
and has held a number of board positions in the building sector,
most notably as Chief Executive of Prowting PLC and more recently
as Chairman of Banner Homes Limited. During his time at Prowting,
the Company floated on the London Stock Market and generated an
annual turnover of £150m producing 1,600 homes annually.
Corporate activity
We sold part of our interest in Headway PLC to one of our
substantial shareholders, Allied Commercial Exporters Limited and
as a result our holding has reduced to 8.6%.  We continue to hold
our interest as a trade investment.
Prospects
Since the acquisition of NorthCountry our geographic spread has
increased significantly as has our product range and skill set.  As a
result the enlarged Group is well positioned for further growth,
especially in the current climate of low inflation and low interest
rates, which has provided much needed stability in the housing
market.  
By developing a diverse product portfolio and maintaining our
strong track record in land acquisition we continued to achieve a
record forward order book with contracted sales of £26.7m and
forward reservations of £18.6m as at 30 September 2003.      
I remain confident that Country & Metropolitan will deliver another
impressive set of results in the current year.  On behalf of the
Board, I should like to thank all members of staff for their immense
effort and support for the Group.
David Laing
Chairman
6 October 2003
Country & Metropolitan PLC   Annual Report & Accounts 2003 3 I am delighted to report we have had our most successful year over
the last 13 years. 
Turnover was up by 94% to £62.8m with pre-tax profit before
amortisation of goodwill up by 72% to £6.85m. 
The results are even more impressive given that they are for a
shorter accounting period of ten months to 30 June 2003. Our 
year-end was changed to align with that of NorthCountry Homes
Group Ltd, which was acquired in August 2002. 
The NorthCountry Group has fitted seamlessly into the Group with
their skills in the development of affordable new homes on
environmentally challenging sites, complementing our wider
experience in mixed-use urban renewal projects in city centres and
conversions of listed buildings. 
The enlarged group sold 643 homes in the period at an average
price of £85,000 trading from 28 outlets. 
Our land teams have been working hard to increase our Land Bank
and I am pleased to say we now own or control 4,200 plots of
which 1,790 plots have planning consent. In addition we control
strategic land representing approximately 1,800 plots.
Our forward order book as at 30 September 2003 is £45.3m
comprising 394 units, which is a very satisfactory position. 
The housing market in the South East of England has continued to
slow down, due in part to the inability of first time buyers to be
able to afford to purchase. Prices had become over heated and I
am sure most people will welcome a return to a more stable
marketplace. 
Our Southern Division has started a programme of lower cost flats
and houses of which some will be created from the conversion of
former office blocks.
We are at the early stages of discussions with a number of
landowners within areas being promoted by the Office of the
Deputy Prime Minister to promote low cost housing in the Thames
Gateway and the South Midlands.
Our industry suffers from a dreadful planning system which we
have to endure where, with few exceptions, planning departments
find more and more spurious reasons to delay and prevent us
getting on with the job. Despite this continuing irritation our land
teams, led by my colleague David Foster, are still however
producing the plots as evidenced by our increasing Land Bank.
The Group has proved, with these results, its ability to grow all
aspects of the business and I remain confident that this can be
continued in the future.
Stephen Wicks
Chief Executive
6 October 2003
Chief Executive’s Review
4 Country & Metropolitan PLC   Annual Report & Accounts 2003
“The most successful year for Country & Metropolitan to date. Our substantial land
bank and varied mix of developments with a wide geographical spread provides a
strong platform for future growth.”
Stephen Wicks
Chief Executive Robinsons, Moseley, Birmingham. A conversion of a former furniture warehouse into 46 apartments.  
Country & Metropolitan PLC   Annual Report & Accounts 2003 5 The local brand names making up the NorthCountry Homes Group
Operational Review
6 Country & Metropolitan PLC   Annual Report & Accounts 2003
The acquisition of NorthCountry Homes Group Ltd (“NorthCountry”) was completed
on 1st August 2002. NCH has 5 operating subsidiary companies within its Group;
Pelham Homes located in Lincolnshire, Whelmar Homes in Derbyshire, Broseley
Homes in Tyne & Wear, Clarke Homes in Nottinghamshire and Arundale Homes in
Yorkshire.
Church Walk, Balby, South Yorkshire
Whelmar Homes
Church Walk, Balby was originally a railway siding and
was subsequently used as a landfill tip.  The
development of 76 affordable new two, three and
four bedroom semi and detached homes.
Pictured are (Left) Jolyon Harrison, Founder and Chairman of NorthCountry, (Right)
Steve Murray, newly appointed Group Managing Director of NorthCountry. Country & Metropolitan PLC   Annual Report & Accounts 2003 7
3
4 5
2
1
Burringham Court, Scunthorpe, Lincolnshire
Pelham Homes
This development was formerly a large detached
house with substantial well maintained gardens and a
tennis court which had remained empty for a number
of years and was in total disrepair. The site comprises
of 24, three and four bedroom semi and detached
houses.
The site was subject to an archaeological dig which is
becoming a more common requirement of the
planning process and whilst this is understandable for
conservation it can cause substantial delays to the
development programme.
1) Burringham Court development
2) Jenny Proctor of Preconstruct Archaeology Ltd
3) Aerial view prior to development
4) A Roman Coin. One of the artefacts found at
Burringham Court
5) A Roman Brooch. One of the artefacts found at
Burringham Court Operational Review continued
8 Country & Metropolitan PLC   Annual Report & Accounts 2003
Acorn Ridge, Bolsover, Near Chesterfield
Whelmar Homes
This development of 70, two and three bedroom semi
detached homes and three and four bedroom detached
homes, scheduled for completion January 2004. The site is
approximately 6 acres. 
Typical NorthCountry Street Scene Country & Metropolitan PLC   Annual Report & Accounts 2003 9
Magister Court, Thornaby, 
Nr Stockton-on-Tees, Durham
Broseley Homes
This development of 54 two, three and four bedroom
semi and detached homes are being built on the old
Ford garage depot. Construction commenced in August
2003. Target for completion of this development is
October 2004. 
Havelock Hospital, Havelock Park,
Sunderland, Tyne & Wear
Broseley Homes
This former hospital was purchased with outline planning
consent from the NHS Trust in 2002. The site is 16 acres
and the development will comprise approximately 250 one,
two, three and four bedroom semi and detached homes
with total sales of approximately £20m.
Other forthcoming NorthCountry developments
Steading Court, Consett, Durham
Broseley Homes
This is a brownfield site formerly an old bus depot. The site was
purchased in March 2002 and the development will comprise
of 34 two, three and four bedroom semi detached homes.
Completion is anticipated to complete in Summer 2004.
Kings Park, Gatehead, Tyne & Wear.
This site purchased from Gatehead Council in 2003 will provide
new 23 homes. Operational Review continued
10 Country & Metropolitan PLC   Annual Report & Accounts 2003
Jupiter House, Chesham, Buckinghamshire
Country & Metropolitan Southern Region
Plans have been submitted to convert this former
office building into 14 flats. The application of shop
fitting techniques and the use of pod kitchen and
bathrooms will reduce the build time by at least 30%
and save building costs, to enable the new units to be
more affordable.
The Jolly Boatman, Hampton Court, Surrey
Country & Metropolitan Southern Region
The Jolly Boatman is one of the prime sites in London;
opposite Hampton Court Palace, with a direct frontage
to the River Thames. 
This development will include community benefits
such as the refurbishment of the locally Listed station
and a new transport interchange together with
improvements to the river bank whilst maintaining
access to Cigarette Island Park.
The mixed use development will comprise
apartments, restaurant, bar, affordable housing, office
space and a new Tourist Information Centre.
Red boundary owned by Country & Metropolitan;
Yellow boundary owned by Network Rail.
Kings Vale, Newhall Manor, Wirral, Cheshire
Country & Metropolitan North West Region
A development of both new and converted 2 bedroom
apartments and 3/4 bedroom mews houses set within
6 acres of mature grounds. 50% of the development has
been sold off plan. Target for completion is Spring 2004. Country & Metropolitan PLC   Annual Report & Accounts 2003 11
‘Blue’, Granary Wharf, Leeds City Centre
Country & Metropolitan Northern Region
This landmark development of 61 contemporary
waterside apartments, penthouses and duplexes is
situated on the banks of the River Aire and Leeds canal
basin. Construction is on a former car park site of 0.25
acres and is situated next to Leeds Railway Station.
Completion is on schedule for Summer 2004. 50% of
the scheme has been sold off plan. The expected total
sales revenue for the development of £12.5 m.
The Steppings, Bushey, Hertfordshire
Country & Metropolitan Southern Region
Development of five, 3 bedroom linked houses is under
construction with anticipated completion in November 2003.
The Steam Mill, Wolverhampton
Country & Metropolitan Southern Region
The purchase of this former Corn Mill in the centre of Wolverhampton
provides approximately 30,000 sq ft of space. Located next to
Wolverhampton main line station, it stands in an area with many
listed and other interesting buildings. The refurbishment is anticipated
to commence in Spring 2004 and will provide approximately 45, one
and two bedroom apartments. The Group has also secured a site
opposite the Steam Mill, overlooking the canal, for a new build
development of approximately 30 apartments. Operational Review continued
12 Country & Metropolitan PLC   Annual Report & Accounts 2003
1
HIGH ROYDS, MENSTON: LANDSCAPE MASTERPLAN
High Royds Hospital, Menston, Leeds
Country & Metropolitan Northern Region
We have agreed to purchase the site of the former High Royds Hospital, from the NHS, subject to planning,
jointly with our development partner, Raven Property Holdings PLC. The site comprises 204 acres.
Detailed proposals have been submitted to Leeds City Council for a large scale mixed use New Village
development. Upon completion the development will comprise a mix of approximately 560 new and
refurbished homes, together with 150,000 sq ft of commercial space and is expected to generate total sales
revenue in excess of £110m.
We anticipate starting on-site in Spring 2004, this will be a 5 year development plan.
2
New Build Residential
New Build Social Housing
Conversion to Office Use
KEY
Commercial
Health Care
Nursery Residential Conversion Country & Metropolitan PLC   Annual Report & Accounts 2003 13
1) Masterplan of High Royds Hospital, Menston, Leeds
2) Principal Listed building
3) David Foster, Group Land Director
4) Spiral staircase of steel construction
5) Aerial view of High Royds Hospital, prior to
refurbishment
4
5
3
A staircase of steel construction links the refurbished
wing to the first floor and duplex apartments. Operational Review continued
14 Country & Metropolitan PLC   Annual Report & Accounts 2003
Grey Towers Park, Nunthorpe, Middlesborough 
Country & Metropolitan Northern Region
The development of this prestigious site on the outskirts of Middlesborough, acquired from
the Secretary of State for Health, will comprise 43 residential homes including the
conversion of a magnificent Grade II* Listed Mansion ‘Grey Towers’ into twelve apartments,
complete with Listed wallpaper which will be retained in accordance with direction from
English Heritage. This former Mansion dates back to 1847 and is set in 141 acres. The
former stables and Listed walled garden will be redeveloped into mews cottages.
Construction commenced in Spring 2003 and completion is anticipated in Summer 2005.
1) Gothic architecture at the Grade II* Listed Mansion
2) Site plan of the completed development
3) ‘Grey Towers Park’ Grade II* Listed Mansion - Artist Impression
4) Listed wallpaper - designed by Godwin in 1874
5) Grey Towers lake within the grounds
2
1 Country & Metropolitan PLC   Annual Report & Accounts 2003 15
3
4 5 Upper Rissington Village, Nr
Cheltenham, Gloucestershire
This newly created village, comprising new and
refurbished homes, shopping, local community and
sports facilities together with a business park
provides the community with both homes and jobs.
The development has received a Highly Commended
award from Your New Home for ‘Best New Village’
2003.
Award Winning Developments
16 Country & Metropolitan PLC   Annual Report & Accounts 2003
Ingmanthorpe Hall, Wetherby, West
Yorkshire
Ingmanthorpe Hall is a conversion of a Grade II* Listed
Mansion and has received the RICS Award for
‘Regeneration 2003’. 
Terry Beaumont, Managing Director Northern Region,
and Janis Stone, Sales and Marketing Director Northern
Region, receiving the award.
The Edge at Robinsons, Moseley, Birmingham 
The refurbishment of this former furniture warehouse has received the
Birmingham Post & Mail design award for ‘Best Starter Home’ 2003.
Vicki Noon, Sales & Marketing Manager Southern Region pictured third
from left, receiving the award.
Burnside Mill, Addingham, 
West Yorkshire
The refurbishment of this former cotton mill into
mews cottages and apartments has received the
NHBC ‘Pride in the Job Award’ for Best Regional
Small to Medium builders.
Burnside Mill has also received a Highly Commended
award from Your New Home for ‘Best First Time
Buyer’ home.
HIGHL Y
COMMENDED
HIGHL Y
COMMENDED Country & Metropolitan PLC   Annual Report & Accounts 2003 17
COUNTRY & METROPOLITAN HOMES 
1Head Office & Southern Region
2 South West Region
3 North West Region
4 Northern Region
NORTHCOUNTRY HOMES
5Pelham Homes
6 Whelmar Homes
7Broseley Homes
8 Clarke Homes
9 Arundale Homes
Country & Metropolitan Homes
& NorthCountry Homes 
- Regional Offices   Profit and loss account
The Group’s turnover for the short 10 month period ended 30 June
2003 increased by 94% from £32.3m to £62.8m and included a full
contribution from NorthCountry. Gross margin has been maintained
at 28% with gross profit rising to £17.5m (2002: £9.0m). Operating
profit before amortisation of goodwill has increased from £5.1m to
£8.9m. Profit on ordinary activities before tax and amortisation of
goodwill has increased by 72% to £6.85m (2002: £3.99m). 
Basic earnings per share before amortisation of goodwill has risen
by 56% to 25.91p (2001: 16.56p) in the shorter accounting period.
In line with the progressive dividend policy the directors have
proposed a final dividend of 2.6p per share, an increase of 21.5%
over the previous year, resulting in a total of 3.30p for the period.  
Capital structure and treasury policy
The Group’s overall policy is to finance its operations through a
combination of shareholders’ funds, long term loans, bank loans
and cash in hand and at bank. Wherever possible the Group also
tries to secure deferred terms on acquisition of land.
The gearing at the end of the period has dropped to 139% from
150%. Total net borrowings increased from £29.1m to £32.5m at
the period end. Against this the Group has forward reservations and
contracted sales of £45.3m as at 30 September 2003.  
The Group’s facilities with its principal bankers, Royal Bank of
Scotland, were reviewed in September 2003 and the Group
currently has two year committed revolving credit facilities totalling
£37m primarily for core borrowing requirements. The Group also
has an acquisition facility of £6.0m which was fully utilised upon
the acquisition of NorthCountry and expires in July 2005.
An overall offset arrangement between any cash and loan balances
exists for the calculation of interest. Interest rates are either linked 
to LIBOR or base rates. The Group’s policy, which is reviewed and
agreed by the Board, is to be in a position to take advantage of
floating rates on part of the debt but also to be protected against
significant increases in interest rates by the use of fixed rate loans
or suitable hedging instruments. In accordance with this policy the
Group has a mixture of floating rate debt and fixed rate hedging as
shown in note 20 to the accounts. No new fixed rate hedging was
entered into during the period. 
The Group does not have any foreign exchange exposure.
Cash flows
The Group policy is to write off interest as it is incurred and the
charge for the period was £2.1m (2002: £2.3m). The interest
charges partially covered by current gross annual rental income of
£890,000. The net cash inflow from operations was £2.4m after an
increase of stocks and work in progress of £8.2m and an increase in
debtors of £2.3m which were offset by an increase in creditors of
£4.0m. Having maximised the value from one of the mixed use
developments, the Group sold the relevant investment properties,
thus generating a £1.9m cash inflow. In addition it reduced its
interest in Headway PLC to 8.6% which reduced gearing.
Balance Sheet
The reduction in tangible fixed assets is primarily due to the sale of
two investment properties referred to above. Freehold and
investment properties valued by the directors amount to £10.2m.
Properties valued by professional valuers amount to £2.7m. 
The Group’s net current asset position has improved over the
previous year end and shareholders’ funds have increased to
£23.3m from £19.4m resulting in net asset value per share of
123.5p compared to 102.7p at 31 August 2002.
Financial Review
Nishith Malde
Finance Director
18 Country & Metropolitan PLC   Annual Report & Accounts 2003
“Basic earnings per share before amortisation of goodwill has risen by 56% to
25.91p in the shorter accounting period. Shareholders’ funds have increased to
£23.3m from £19.4m resulting in net asset value per share of 123.5p.” Country & Metropolitan PLC   Annual Report & Accounts 2003 19
Property Investor Exhibition at Excel, London Docklands
Country & Metropolitan Homes exhibited 12 developments covering four regions.
A highly successful event with reservations taken on properties from plan to a
value exceeding £7.5 m.
Environmental Statement
As a major contributor to the regeneration of towns and cities in
the UK, Country & Metropolitan is committed to improving the
quality of life in the communities in which it operates. We
recognise that to meet financial objectives we must respect
communities and physical environments.
Environmental and social responsibilities are therefore central to
the success of the business and by addressing them, the Group
enhances the value of its business.
The aim of Country & Metropolitan’s sustainability strategy is to
make a long-term contribution to the environmental, social and
economic structure of the communities in which it works.
The landscape of Roseberry Topping, North York Moors, near Grey Towers Park, Nunthorpe, Middlesbrough David Laing, aged 58, is an architect by profession and has been
involved with the property and construction sector for many years.
He joined the Company as non-executive Chairman in February
1996. He holds various other positions of responsibility and has
been county chairman of the Rural Development Commission for
Hertfordshire and Bedfordshire. 
Stephen Wicks, aged 52, was the founding shareholder of the
Company and has worked in the construction and housebuilding
sector for over 30 years. He has extensive knowledge of local and
national government policies on both greenfield and brownfield
sites and has in the past worked for a number of housebuilders,
with particular emphasis on land acquisition. 
David Foster, aged 47, a member of the Royal Town Planning
Institute, worked as a local authority town planner until 1979. He
was then employed on land acquisitions by a number of national
housebuilders including Crest Nicholson PLC and McCarthy & Stone
PLC until establishing his own consultancy in 1990. He was
appointed Land Director in 1997. 
Nishith Malde, aged 45, qualified as a chartered accountant in
1985 with KPMG and specialised in advising owner managed
businesses. He left KPMG in 1989 to set up a consultancy firm
which later merged with the former auditors of the Group where
he was the partner responsible for the affairs of Country &
Metropolitan. In November 1998 he joined the Group as Finance
Director and Company Secretary.
Jonathan Marc Van Gelder, aged 39, was appointed to the Board
in September 1997 as a Non-Executive Director. He has worked for
the privately owned Allied Commercial Group of companies for the
last 13 years with responsibility for identifying and acquiring
property opportunities.
Terry Roydon, aged 56, has held a number of board positions in
the building sector, most notably as Chief Executive of Prowting
PLC. During his time at Prowting, the company floated on the
London Stock Market and generated a turnover of £150 m. He is on
the Board of NHBC and is Chairman of its Finance and Audit
Committee. He is also an officer of the House Builders’ federation.
Board of Directors
Left to right: Stephen Wicks, Nishith Malde, David Foster, David Laing, Jonathan Marc Van Gelder, Terry Roydon
20 Country & Metropolitan PLC   Annual Report & Accounts 2003 Directors
D E Laing MA RIBA Non-Executive Chairman
S D Wicks Chief Executive
D M Foster MRTPI Land Director
N Malde FCA Finance Director
J M Van Gelder Non-Executive
T R Roydon Non-Executive
Secretary
N Malde FCA
Auditors
Nexia Audit Limited
Registered Auditors
1 Riding House Street
London 
W1A 3AS
Tax Advisors
Deloitte & Touche LLP
1 Woodborough Road
Nottingham 
NG1 3FG
Financial Advisers 
Dawnay, Day Corporate Finance Limited
10 Grosvenor Gardens
London   
SW1W 0DH
Stockbrokers
J M Finn & Co
Salisbury House
London Wall
London
EC2M 5TA
Solicitors
DLA
3 Noble Street
London
EC2V 7EE
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham 
Kent
BR3 4TU
Bankers
National Westminster Bank PLC
South Herts Business Centre
2nd Floor, 10 St Peter’s Street
St Albans
Hertfordshire   
AL1 3LY
Registered Office
Harefield House
High Street
Harefield
Middlesex   
UB9 6RH
Company Number
2443898
Country & Metropolitan PLC Annual Report & Accounts 2003 21
Directors and Advisors The Directors present their report and audited accounts for the 
10 months ended 30 June 2003. All comparitives are for the year
ended 31 August 2002.
Business activities and business review
The principal activities of the Group during the period under
review covered various property projects primarily in the
residential property field. These included land acquisition and the
promotion of urban villages together with the construction of new
homes for open market sale. A detailed report is given in the
Operational Review on pages 6 to 15.
Results
The audited accounts for the period ended 30 June 2003 are set
out on pages 26 to 46. The Group achieved a profit before taxation
and amortisation of goodwill of £6.85 million (2002: £3.99
million). The retained profit of £3.83 million (2002: £2.19 million)
will be transferred to reserves.
Dividends
The Directors recommend a final dividend of 2.6p per ordinary
share to be paid on 9 January 2004 to ordinary shareholders on
the register on 12 December 2003 which, together with the
interim dividend of 0.7p paid on 11 July 2003 makes a total of
3.3p for the period (2002: 2.75p).
Fixed assets
In the opinion of the Directors the current open market value of
the Group’s fixed asset interests in land and buildings amounts to
£12.9 million. There is no material difference between the book
and the current open market value of fixed asset interests in land
and buildings.
Directors and their interests in the share capital
of the Company
The Directors who served during the year are listed together with
their biographical details on page 20. The Directors’ beneficial
interests in the ordinary shares of the Company are given in the
Remuneration Report on pages 24 to 25.
In accordance with the Articles of Association, Mr N Malde and Mr
SD Wicks will retire by rotation at the next Annual General
Meeting and, being eligible, offer themselves for re-election. Mr T
RRoydon will also retire at the next Annual General Meeting,
having been appointed a director on 19 April 2003, and being
eligible, offers himself for re-election.
Substantial shareholdings
As at 15 October 2003 the Company had been notified of the
following interests that represent 3% or more of the issued share
capital of the Company:
Number of Percentage
Ordinary shares held
Eaglet Investment Trust PLC 1,802,523 9.52
Jupiter Asset Management Limited 1,698,918 8.97
Allied Commercial Exporters Limited 1,665,000 8.79
J Harrison 826,192 4.36
J P Morgan Fleming Investment
Management Limited 1,025,789 5.42
Employees
The Group is an equal opportunities employer and the importance
of good communications with employees is recognised by the
Directors. Each region maintains employee relations appropriate to
its own particular needs. Various benefit schemes are available to
employees all of whom are encouraged to participate subject to
eligibility. Equal opportunities for training, career development and
promotion are available to all employees regardless of disability,
age, sex, race, religion, colour, nationality or sexual orientation.
Applications for employment by disabled persons are always fully
and fairly considered with appropriate regard to the aptitudes and
abilities of the applicant concerned. In the event of a person
becoming disabled during their employment, the Group will
endeavour to continue their employment and arrange appropriate
training and or adjustments to the working environment where
possible.
Policy for payment of creditors
It is the Company’s payment policy to negotiate the best possible
terms for all business and therefore there is no consistent policy
as to the terms used. We make sure that suppliers know the terms
on which business will take place and it is our policy to abide by
the terms. At 30 June 2003, the trade creditors of the Company
represented 27 days (2002: 125 days) of purchases made by the
Company.
Charitable donations
During the period the Group made various charitable donations
totalling £9,000 (2002: £2,000). No political donations were made
in either period.
Auditors
A resolution to reappoint Nexia Audit Limited will be proposed at
the next Annual General Meeting.
By order of the Board
N Malde FCA, Secretary
Harefield House
High Street, Harefield
Middlesex UB9 6RH
6 October 2003
Responsibilities of the Directors
in respect of the preparation of the accounts
Company law requires directors to prepare accounts for each
financial year which give a true and fair view of the state of
affairs of the Company and the Group and of the profit or loss of
the Group for that period. In preparing those accounts, the
directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the accounts; and
• prepare the accounts on the going concern basis unless it is
inappropriate to presume that the Group will continue in
business.
The Directors of Country & Metropolitan PLC are responsible for
keeping proper accounting records which disclose with reasonable
accuracy, at any time, the financial position of the Company and
the Group and to enable them to ensure that the accounts comply
with the Companies Act 1985. They have general responsibility for
taking such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and other
irregularities.
22 Country & Metropolitan PLC Annual Report & Accounts 2003
Directors’ Report for the period ended 30 June 2003 The Board has considered the requirements of the Combined Code
adopted by the London Stock Exchange in performing the
Corporate Governance of the Group. The Company has complied,
except where noted, throughout the period ended 30 June 2003,
with the provisions of Section 1 of the Combined Code which
relate to the principles of Good Governance and Code of Best
Practice.
The Board comprises of three Executive Directors and three Non-
Executive Directors. The Non-Executive Directors are considered to
be totally independent within the meaning of provision A.3.2 of
the Combined Code. In view of the size and composition of the
Board it is considered to be inappropriate to recognise a senior
independent Director as required by provision A.2.1 and for a
Nomination Committee to be established under provision A.5.1.
Under the Articles of Association of the Company at least one third
of the Board is required to retire by rotation and offer for re-
election.
Mr D E Laing and Mr J M Van Gelder have a letter of appointment
which is terminable upon not less than six months written notice
by either party. Mr T R Roydon has a contract for services between
his company, Hansom Property Company Limited and Country &
Metropolitan PLC which is terminable by either party giving three
months notice.
Board and Committees
All members of the Board are equally accountable under the law
for the proper stewardship of the Company’s affairs. The roles of
the Chairman and Chief Executive are separate and clearly defined.
The Chairman is primarily responsible for the running of the Board
and the Chief Executive is responsible for the running of the
business of the Group.
The Board meets regularly on a formal basis and is supplied with
appropriate information to enable it to discharge its duties. There
is an agreed schedule of matters reserved for the Board for
collective decision. The Executive Directors meet informally between
formal Board meetings to focus on strategy, cash management,
financial performance, major transactions and control of operations
generally.  
The Board has delegated specific responsibilities to the Audit and
Remuneration Committees.
Audit Committee
The Audit Committee comprises Mr D E Laing, Mr J M Van Gelder
and Mr T R Roydon. It meets once a year with the auditors and is
responsible for ensuring that the financial performance of the
Group is properly reported on and monitored. In particular it
focuses on accounting policies, compliance and internal control. It
also reviews the scope and results of the audit and its cost
effectiveness and the independence and objectivity of the
auditors.
Remuneration Committee
The Remuneration Committee comprises Mr D E Laing, Mr J M Van
Gelder and Mr T R Roydon. Mr T R Roydon replaced Mr S D Wicks
on the Remuneration Committee upon his appointment as Non-
Executive Director. The Committee meets at least once each year
and reviews remuneration and terms of employment of Executive
Directors and certain senior employees. In particular, the
Committee determines specific remuneration packages for each
Executive Director. The fees for the Non-Executive Directors are
decided by a committee of the Board comprising all the Executive
Directors. The Directors’ Remuneration Report is set out on pages
24 to 25.
Investor Relations
The Company meets with its institutional shareholders as
appropriate. All shareholders are kept up to date with the affairs
of the Group through the Annual and Interim Reports. Save in
exceptional circumstances, all members of the Board attend the
Annual General Meeting ("AGM") which is used to communicate
with private and institutional shareholders. The chairmen of the
Audit and Remuneration Committees are also available at the AGM
to answer questions.
Internal Control
In applying the principle that the Board should maintain a sound
system of internal control to safeguard shareholders’ investment
and the assets of the Group, the Directors recognise that they have
overall responsibility for ensuring that the Group maintains a
system of internal control to provide them with reasonable
assurance regarding effective and efficient operations, internal
financial control and compliance with laws and regulations. The
Group has a process for identifying, evaluating and managing the
significant risks the Group faces. The Board reviews this process on
an ongoing basis, which has been in place throughout the period
and up to the date of approval of the accounts and which is in
accordance with Internal Control: Guidance for Directors on the
Combined Code published in September 1999. Such a system is
designed to manage rather than eliminate the risk of failure to
achieve business objectives, and can only provide reasonable and
not absolute assurance against material misstatement or loss.
The key features of the control system that operated throughout
the period covered by the accounts are described below.  
- The Group has a defined organisation and management
structure to ensure a proper division of responsibility and
authority.
-The Board has identified areas of risk which are reviewed on a
regular basis for their relevance and appropriateness to the
business.
-Control procedures are in place to address key areas of risk.
These include authorisation procedures over land purchases
which are considered and approved by the Board before
contracts are entered into. Controls are also in place to cover
other areas such as payment of invoices, cash control and
expansion of the business.   
- The Group’s systems provide weekly updates on key statistics in
relation to sales. Detailed short term and two year cash flow
forecasts are also used by the Board and the Executive Directors
to control the cash requirements of the Group.
Going Concern
After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have adequate
resources to continue in operational existence for the foreseeable
future. For this reason, they continue to adopt the going concern
basis in preparing the accounts.
Country & Metropolitan PLC Annual Report & Accounts 2003 23
Corporate Governance Statements Directors’ emoluments - audited information
The remuneration of the individual Directors was:
2003 2002
Salary/fees Bonus Benefits Pension Total Total
£’000 £’000 £’000 £’000 £’000 £’000
Executive Directors
S D Wicks 273 258 19 54 604 315
D M Foster 134 57 19 14 224 208
N Malde 161 154 13 24 352 209
Non-Executive Directors
D E Laing 27 – – – 27 22
J M Van Gelder 20 – – – 20 22
T R Roydon 6 – – – 6 –
As well as complying with the provisions of the Combined Code as
disclosed in the Company’s corporate governance statements, the
Company has applied the Principles of Good Governance relating
to Directors’ remuneration as described below.
Remuneration Committee
The Remuneration Committee comprises the three Non-Executive
Directors, Mr D E Laing, Mr J M Van Gelder and Mr T R Roydon.
Remuneration Policy
The Remuneration Committee has overall responsibility for
remuneration policy in respect of Executive Directors and certain
senior employees. The Group provides competitive remuneration
packages at all levels in order to attract, retain and motivate staff.
Basic salaries and benefits are reviewed annually and bonuses are
awarded for achieving high levels of performance. 
The principal terms of reference of the Committee are as follows:
-To determine the basic salary of the Executive Directors and
certain senior employees.
-To determine, after the end of the financial period, the amounts
that should be awarded as bonuses taking account of the
Group’s targets and individual performance.
-To agree the Executive Directors and senior employees to whom
share options should be granted in order to align their interests
with those of shareholders.
-To agree the annual targets for the Group which would be
applicable for incentive schemes.
The remuneration of the Non-Executive Directors, who are
members of the Committee, is a matter reserved for the Executive
Directors who take account of practices in other companies.
Service contracts
The Executive Directors have service contracts with the Company
which may be terminated by the Company upon 24 months notice
and by the Director upon 6 months notice. The service contracts do
not include provision for pre-determined compensation for early
termination.
Incentive schemes - audited information
Annual bonuses are subject to achieving Group performance
targets and the Committee has the right to award discretionary
bonuses based on individual performance.
The Company has in place the Country & Metropolitan PLC 1999
Approved Share Option Scheme and the Country & Metropolitan
PLC 1999 Unapproved Share Option Scheme.
At 30 June 2003, options had been granted over 1,422,627 shares
to the Executive Directors and over 423,752 shares to senior
employees and staff. The exercise of the options granted to the
Executive Directors is subject to objective performance conditions
determined by the Remuneration Committee prior to the grant of
an option. The current performance criterion is that, over a three
year period, the Company’s performance in respect of earnings per
share growth, must exceed the growth in the Retail Price Index by
an average of 2% per annum.
24 Country & Metropolitan PLC Annual Report & Accounts 2003
Directors’ Remuneration Report Share options - audited information
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the Company
granted to or held by the Directors. Details of the options are as follows:
At 31 At 30
August  June Exercise Expiry
Director Scheme 2002 Granted Exercised 2003 price date
S D Wicks 1999 Approved 46,474 – – 46,474 64.55p 2003-2010
1999 Unapproved 262,577 – – 262,577 64.55p 2003-2010
225,000 – – 225,000 79.50p 2005-2012
– 100,000 – 100,000 89.50p 2006-2013
D M Foster 1999 Approved 46,474 – – 46,474 64.55p 2003-2010
1999 Unapproved 185,314 – – 185,314 64.55p 2003-2010
90,000 – – 90,000 79.50p 2005-2012
–40,000 – 40,000 89.50p 2006-2013
N Malde 1999 Approved 46,474 – – 46,474 64.55p 2003-2010
1999 Unapproved 185,314 – – 185,314 64.55p 2003-2010
135,000 – – 135,000 79.50p 2005-2012
–60,000 – 60,000 89.50p 2006-2013
The market price of the ordinary shares at 30 June 2003 was 115.5p and the range during the period was 83.5p to 120.5p.
Performance graphs
The Remuneration Report Regulations provide that the Company
must provide a graph comparing the total shareholder return
(“TSR“) performance of a hypothetical holding of shares in the
Company with a broad equity market index over a five year period
- the ‘Compliance Graph’. In this context, the Directors have chosen
to illustrate the performance of TSR against the FTSE Actuaries
Fledgling Index over a period commencing on 9 December 1999,
being the date on which the Company’s ordinary shares were listed
on the London Stock Exchange. In the opinion of the Directors, the
FTSE Actuaries Fledgling Index is the most appropriate index against
which TSR should be measured because it is a widely used and
understood index of broadly similar sized UK companies to the
Company. The Compliance Graph is shown below.
Compliance Graph - Historical TSR performance
Equity interests of the Directors in the Company
The beneficial interests of the Directors and of their families in the
issued ordinary shares of the Company were as follows:
Director At 30 At 31
June 2003 August 2002
D E Laing 405,102 405,102
S D Wicks 2,520,000 2,510,000
D M Foster 807,154 807,154
N Malde 683,693 683,693
J M Van Gelder 81,097 81,097
TR Roydon 27,958 –
On 29 July 2003, Mr S D Wicks exercised share options to acquire
38,400 ordinary shares in the Company at an exercise price of
64.55p per share.
Pensions - audited information
The Company operates a Group Stakeholder Plan which included
one Executive Director, Mr D M Foster. Pension contributions were
made to a small self administered scheme for Mr S D Wicks and
Mr N Malde.
Pension contributions are based on basic salary only and do not
take account of bonuses and benefits in kind. 
Pension contributions paid by the Company in respect of Executive
Directors are shown above. Part of Mr S D Wicks’s bonus has also
been taken by way of contribution to his pension scheme.
DE Laing
Chairman - Remuneration Committee
6 October 2003
Country & Metropolitan PLC Annual Report & Accounts 2003 25
Directors’ Remuneration Report continued 10 months ended Year ended
30 June 31 August
2003 2002
Notes £’000 £’000
Turnover 1 62,797 32,290
Cost of sales (45,248) (23,288) 
Gross profit 17,549 9,002
Net operating expenses 4 (8,816) (4,051)
Share of profit of associated undertakings 206 120
Operating profit before goodwill amortisation 8,939 5,071
Goodwill amortisation (445) (45)
Operating profit 8,494 5,026
Profit on disposal of investment 5 – 1,058
Interest receivable and similar income 6 40 136
Interest payable and similar charges 7 (2,130) (2,279)
Profit on ordinary activities before taxation 8 6,404 3,941
Tax on profit on ordinary activities 9 (1,952) (1,198)
Profit for the financial period 4,452 2,743
Dividends 10 (623) (549)
Retained profit for the period 11,24 3,829 2,194
Basic earnings per share - before goodwill amortisation 12 25.91p 16.56p
- after goodwill amortisation 12 23.55p 16.29p
Diluted earnings per share - before goodwill amortisation 12 25.32p 16.36p
- after goodwill amortisation 12 23.02p 16.10p
Dividend per share 10 3.30p 2.75p
The profit for the financial period arises from continuing operations. 
Consolidated Statement of Total Recognised Gains & Losses for the period ended 30 June 2003
10 months ended Year ended
30 June 31 August
2003 2002
£’000 £’000
Profit for the financial period attributable to members of the Company 4,452 2,743
Unrealised surplus on revaluation of properties 106 385
Total recognised gains and losses for the period 4,558 3,128
Consolidated Note of Historical Cost Profits & Losses for the period ended 30 June 2003
10 months ended Year ended
30 June 31 August
2003 2002
£’000 £’000
Reported profit on ordinary activities before taxation 6,404 3,941
Realisation of property revaluation gains of previous years 29 23
Historical cost profit on ordinary activities before taxation 6,433 3,964
Historical cost profit for the period retained after taxation and dividends 3,858 2,217
26 Country & Metropolitan PLC Annual Report & Accounts 2003
Consolidated Profit & Loss Account for the period ended 30 June 2003 Group Company
30 June 31 August 30 June 31 August
2003 2002 2003 2002
Notes £’000 £’000 £’000 £’000
Fixed assets
Intangible assets - goodwill 13 4,853 5,298 – –
Tangible assets 14 13,838 15,521 135 299
Investments 15 2,087 387 16,590 15,779
20,778 21,206 16,725 16,078
Current assets
Stocks 16 40,104 31,938 – –
Debtors - amounts falling due after more than one year 17 – 50 – –
- amounts falling due within one year 17 18,042 15,666 15,287 11,495
Cash at bank and in hand 4,896 8,326 2 275
63,042 55,980 15,289 11,770
Creditors - amounts falling due within one year 18 (46,402) (42,235) (13,706) (10,314)
Net current assets 16,640 13,745 1,583 1,456
Total assets less current liabilities 37,418 34,951 18,308 17,534
Creditors - amounts falling due after more than one year 18 (14,043) (15,532) (5,872) (5,891)
Provision for liabilities and charges 21 (33) (12) – –
Net assets 23,342 19,407 12,436 11,643
Share capital and reserves
Called up share capital 23 189 189 189 189
Share premium account 24 9,940 9,940 9,940 9,940
Revaluation reserves 24 2,393 2,316 – –
Profit and loss account 24 10,820 6,962 2,307 1,514
Shareholders’ Funds
Equity interests 25 23,342 19,407 12,436 11,643
These accounts were approved by the Board of Directors on 6 October 2003 and signed on its behalf by:
S D Wicks - Chief Executive
N Malde - Finance Director
Country & Metropolitan PLC Annual Report & Accounts 2003 27
Balance Sheets as at 30 June 2003 10 months ended Year ended
30 June 31 August
2003 2002
Note £’000 £’000
Net cash inflow from operating activities 27 2,426 2,154
Returns on investments and servicing of finance
Interest received 59 17
Interest paid (2,641) (1,977)
Dividends received 182 164
Net cash outflow from returns on investments and servicing of finance (2,400) (1,796)
Taxation
Corporation tax paid (2,891) (407)
Capital expenditure and financial investment
Purchase of tangible fixed assets (477) (382)
Proceeds from sale of tangible fixed assets 2,329 203
Proceeds from sale of investments 944 7,842
Purchase of investments (2,551) (559)
Net cash inflow from capital expenditure and financial investment 245 7,104
Acquisitions and disposals
Acquisition of businesses and subsidiaries – (11,065)
Net cash balances acquired with subsidiaries – 13,940
Net cash inflow from acquisitions and disposals – 2,875
Equity dividends paid (520) (371)
Cash (outflow)/inflow before financing (3,140) 9,559
Financing
Repayment of short-term loans (unsecured) – (25)
New secured loans 1,000 1,900
Repayment of secured loans (1,998) (3,796)
Repayment of capital element of finance lease rentals (288) (370)
Repayment of loan stock (250) (250)
Bank loans received 22,977 15,078
Bank loans repaid (21,664) (13,354)
Net cash outflow from financing (223) (817)
(Decrease)/increase in cash 28 (3,363) 8,742
28 Country & Metropolitan PLC Annual Report & Accounts 2003
Consolidated Cash Flow Statement for the period ended 30 June 2003 Accounting Policies
The principal accounting policies of the Group which have been consistently applied in dealing with items which are considered material
in relation to the Group’s accounts are as follows:-
(a) Basis of accounting
The accounts have been prepared in accordance with applicable accounting standards and under the historical cost basis of
accounting as modified by the revaluation of certain fixed assets.
(b) Basis of consolidation
The Group accounts consolidate the accounts of the Company and all its subsidiary undertakings from the date on which control of each
undertaking passes to the Group. Acquisitions are accounted for under the acquisition method.
In accordance with Section 230 of the Companies Act 1985, the Company has not presented a separate profit and loss account.
Undertakings, other than subsidiary undertakings, in which the Group has an investment representing not less than 20% of the voting
rights and over which it exerts significant influence are treated as associated undertakings. The Group accounts include the appropriate
share of these undertakings’ results, on an equity accounting basis in accordance with FRS9.
(c) Turnover
Turnover comprises amounts receivable from house sales, the total value of contracting work executed during the period, amounts
receivable and related fees from project management services, proceeds from disposal of sites assembled for resale, rental income
and amounts invoiced by the Group in respect of other services rendered during the period excluding value added tax.
(d) Recognition of income on property activities
Disposals of properties are accounted for at the date of exchange, where there is a legally binding, unconditional, irrevocable
contract and where the property is substantially built and legal completion takes place by the date of approval of the accounts.
Where the Group undertakes developments with other investors and profits are shared and paid by way of a development fee,
income is recognised when individual units within the development are sold.
(e) Cost of letting new developments
All costs incurred in the initial letting of development properties are capitalised. Any subsequent costs expended on re-letting the
properties are charged to the profit and loss account in the year they are incurred.
(f) Investments
Investments are valued at cost less provision for impairment in value.
(g) Investment properties
Investment properties are stated at their open market value at the balance sheet date. Surpluses or deficits on individual properties are
transferred to the investment revaluation reserve, except that a deficit which is expected to be permanent and which is in excess of
any previously recognised surplus over cost relating to the same property, or the reversal of such a deficit, is charged (or credited) to
the profit and loss account. Other deficits on revaluation not expected to be permanent are taken to the statement of total
recognised gains and losses.
In accordance with SSAP 19, no depreciation or amortisation is provided in respect of freehold and leasehold investment properties
where the unexpired term of the lease is more than 20 years. This treatment for certain of the Group’s investment properties is a
departure from the requirements of the Companies Act 1985 concerning depreciation of fixed assets. However, these properties are
not held for consumption but for investment and the Directors consider that systematic annual depreciation would be inappropriate.
The accounting policy adopted is therefore necessary for the accounts to give a true and fair view. Depreciation or amortisation is
only one of the factors reflected in the annual valuation, and the amount which might otherwise have been shown cannot be
separately identified or quantified.
(h) Depreciation
Depreciation is provided to write off the cost or valuation less the estimated residual value of tangible fixed assets on a straight line
basis over their useful economic lives at the following annual rates:
Plant and equipment 25%
Furniture, fixtures and fittings 20% - 25%
Motor Vehicles 25%
Country & Metropolitan PLC Annual Report & Accounts 2003 29
Notes to the Accounts for the period ended 30 June 2003 30 Country & Metropolitan PLC Annual Report & Accounts 2003
Notes to the Accounts for the period ended 30 June 2003 continued
Freehold properties are not depreciated in the accounts of the Group.  The Directors consider that freehold properties are maintained
in such a state of repair that their residual value is at least equal to their net book value. As a result the corresponding depreciation
would not be material and therefore is not charged in the profit and loss account. The Directors perform annual impairment reviews
in accordance with the requirements of FRS15 and FRS11 to ensure that the carrying value is not lower than the recoverable amount.
(i) Intangible assets - goodwill
Goodwill arising on the acquisition of subsidiary undertakings, representing any excess of the fair value of the consideration given
over the fair value of the identifiable assets and liabilities acquired, is capitalised and written off on a straight line basis over its
useful economic life. The useful economic life of goodwill is assessed separately for each acquisition and is currently 10 years.
Provision is made for any impairment.
(j) Stocks and work in progress
Stocks and work in progress are stated at the lower of cost and net realisable value. Cost comprises all expenditure directly related to
development or land assembly projects. Net realisable value represents the Directors’ estimate of the net proceeds receivable after
taking account of market conditions prevailing at the date of approval of the accounts.
(k) Long term contracts
Profit on long term contracts is taken as the work is carried out if the outcome can be assessed with reasonable certainty.  The profit
included is calculated on a prudent basis to reflect the proportion of the work carried out at the period end, by recording turnover
and related costs as contract activity progresses. Turnover is calculated by reference to valuation of the work carried out to date. Full
provision is made for losses on all contracts in the period in which they are first foreseen.
(l) Taxation
The charge for taxation is based on the result for the period, which takes account of taxation deferred because of timing differences
between the treatment of certain items for taxation purposes and the treatment under the Group’s accounting policies.  
Deferred tax is provided for on a full provision basis on all timing differences, which have arisen but not reversed at the balance
sheet date. No timing differnces are recognised in respect of gains on sale of assets where those gains have been rolled over into
replacement assets. Deferred tax assets are recognised to the extent that they are recoverable, that is, on the basis of all available
evidence, it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing
differences can be deducted. Any assets and liabilities recognised have not been discounted.
(m)Leased assets
Fixed assets that are the subject of finance leases or hire purchase contracts are capitalised and included in tangible fixed assets. The
corresponding liability is included in creditors.  The finance cost element of the lease or hire purchase contracts is charged to the
profit and loss account over the period of the lease.
Expenditure on leases other than finance leases ("operating leases") is charged to the profit and loss account in the period it is
incurred.
(n) Pensions
The Company operates a defined contribution pension scheme and contributes into a small self administered scheme for two of its
directors. Contributions payable for the period are charged to the profit and loss account.
The Group also operates a defined benefit scheme. The expected cost of providing pensions under this scheme, as calculated
periodically by professionally qualified actuaries, is charged to the profit and loss account so as to spread the cost over the service
lives of employees in the scheme in such a way that the pension cost is substantially level percentage of current and expected future
pensionable payroll.
(o) Treasury instruments
The Group uses interest rate swaps to manage financial risk. Interest charges and financial liabilities are stated after taking account of
these swaps. 1. Turnover and segmental analysis
Turnover, gross profit and operating profit arose within the United Kingdom from continuing operations and are analysed as follows:
Year ended
31 August
2003 2002
£’000 £’000
Turnover
Residential development 61,942 31,212
Property investment 855 1,078
62,797 32,290
Gross Profit
Residential development 16,947 8,082
Property investment 602 920
17,549 9,002
Net operating expenses (8,816) (4,051)
Share of profit of associated undertaking (residential development) 206 120
Operating profit before goodwill amortisation 8,939 5,071
Goodwill amortisation (445) (45)
Operating profit 8,494 5,026
Profit on disposal of investment – 1,058
Net interest (2,090) (2,143)
Profit on ordinary activities before taxation 6,404 3,941
31 August
2003 2002
£’000 £’000
Segment net assets:
Residential development 20,425 20,860
Property investment 5,673 6,130
26,098 26,990
Share of associates’ net assets 916 25
Unallocated net assets (3,672) (7,608)
23,342 19,407
Country & Metropolitan PLC Annual Report & Accounts 2003 31
Notes to the Accounts for the period ended 30 June 2003 continued 2. Staff numbers and costs
The average number of persons (including Directors) employed by the Group during the period was as follows:
Year ended
31 August
2003 2002
Number Number
Residential development 275 54
Property investment 7 9
282 63
The aggregate payroll cost of all employees, including Directors, was as follows:
Year ended
31 August
2003 2002
£’000 £’000
Wages and salaries 6,786 2,362
Social security costs 680 257
Pension costs 303 118
7,769 2,737
3. Directors’ emoluments
Year ended
31 August
2003 2002
£’000 £’000
Emoluments – as Executives 1,088 656
– as Fees 53 44
– Pension contributions (money purchase schemes – 3 Directors (2002: 3 Directors)) 92 76
The emoluments of the highest paid Director were:
Remuneration – salary and taxable benefits 550 272
Pension contributions to money purchase scheme 54 43
Details of Directors’ remuneration is contained in the Directors’ Remuneration Report on pages 24 to 25.
4. Net operating expenses
Year ended
31 August
2003 2002
£’000 £’000
Administrative expenses 8,986 4,101
Profit on sale of tangible fixed assets (71) (50)
Profit on sale of fixed asset investments (99) –
8,816 4,051
5. Exceptional item reported after Operating profit
The profit on disposal of investment during the year ended 31 August 2002 relates to the sale of the Group’s interest in the ordinary share
capital of Tay Homes PLC. 
6. Interest receivable and similar income
Year ended
31 August
2003 2002
£’000 £’000
Other interest receivable and similar income 40 136
32 Country & Metropolitan PLC Annual Report & Accounts 2003
Notes to the Accounts for the period ended 30 June 2003 continued 7. Interest payable and similar charges
Year ended
31 August
2003 2002
£’000 £’000
On bank loans, overdrafts and other loans wholly repayable within five years 1,929 1,444
On bank and other loans not wholly repayable within five years 66 549
Finance charges in respect of hire purchase contracts 34 25
Other finance charges 101 261
2,130 2,279
8. Profit on ordinary activities before taxation
Year ended
31 August
2003 2002
£’000 £’000
The profit on ordinary activities before taxation is stated after charging:
Depreciation 360 205
Goodwill amortisation 445 45
Auditors’ remuneration – audit fees 62 40
– for non audit services 32 –
– for non audit services paid to related companies to the auditors 67 26
Operating lease rentals – other assets 43 21
Hire of plant and machinery 344 31
9. Tax on profit on ordinary activities
Year ended
31 August
2003 2002
£’000 £’000
Current tax:
UK Corporation Tax at 30% (2002: 30%)
Current period 1,891 1,190
Under/(over) provision in prior years 33 (34)
Associated undertakings 62 36
Total current tax 1,986 1,192
Deferred tax:
Origination and reversal of timing differences (34) 6
Total deferred tax (see Note 21) (34) 6
Tax on profit on ordinary activities 1,952 1,198
The difference between the total current tax shown above and the amount calculated by applying the standard rate of UK corporation tax
to the profit before tax is as follows:
2003 2002
£’000 £’000
Profit on ordinary activities before tax 6,404 3,941
Less: share of profit before tax of associated undertakings (206) (120)
Profit on ordinary activities before tax 6,198 3,821
Tax on Group profit on ordinary activities at standard UK corporation tax rate of 30% (2002: 30%) 1,859 1,146
Effects of:
Expenses not deductible for tax purposes 152 19
Unrelieved tax losses – 9
Non taxable income (105) (50)
Other timing differences (15) 66
Current tax charge for the period 1,891 1,190
The amount of deferred tax that has not been provided on revalued fixed assets is £531,000 (2002: £592,000). At present it is not
envisaged that any tax will become payable in the foreseeable future.
Country & Metropolitan PLC Annual Report & Accounts 2003 33
Notes to the Accounts for the period ended 30 June 2003 continued 10. Dividends
Year ended
31 August
2003 2002
£’000 £’000
Interim equity dividend paid of 0.7p (2002: 0.61p) per ordinary share 132 145
Final equity dividend proposed of 2.6p (2002: 2.14p) per ordinary share 491 404
623 549
11. Retained profit for the period
Year ended
31 August
2003 2002
£’000 £’000
The retained profit for the period is attributable to:
The Company 793 (410)
Subsidiary and associated undertakings 3,036 2,604
3,829 2,194
12. Earnings per share
The calculation of the basic and diluted earnings per share figures are based on the following:
Year ended
31 August
2003 2002
£’000 £’000
Profit on ordinary activities after tax 4,452 2,743
Amortisation of goodwill 445 45
Profit on ordinary activities before goodwill amortisation and after tax 4,897 2,788
Number Number
‘000 ‘000
Weighted average number of shares in issue during the year used in 
the calculation of basic earnings per share 18,901 16,836
Dilutive effect of options treated as exercisable at the period end 437 206
Weighted average number of shares used in the calculation of diluted earnings per share 19,338 17,042
Basic earnings per share
- before goodwill amortisation 25.91p 16.56p
- after goodwill amortisation 23.55p 16.29p
Diluted earnings per share
- before goodwill amortisation 25.32p 16.36p
- after goodwill amortisation 23.02p 16.10p
The directors have disclosed both the basic and diluted earnings per share before amortisation of goodwill to demonstrate the underlying
performance of the business.
34 Country & Metropolitan PLC Annual Report & Accounts 2003
Notes to the Accounts for the period ended 30 June 2003 continued 13. Intangible assets
The goodwill of £5,343,000 arising on the acquisition of NorthCountry Homes Group Limited has been capitalised in the consolidated
balance sheet in accordance with FRS10 (“Goodwill and Intangible Assets”) and is being amortised on a straight line basis over a period of
10 years.
Goodwill
Group £’000
Cost
At 1 September 2002 5,343
Additions –
At 30 June 2003 5,343
Amortisation
At 1 September 2002 45
Charge for the period 445
At 30 June 2003 490
Net book value
At 30 June 2003 4,853
At 31 August 2002 5,298
14. Tangible assets
Furniture
Freehold Investment Plant & Fixtures & Motor
Property Properties Equipment Fittings Vehicles Total
Group £’000 £’000 £’000 £’000 £’000 £’000
Cost or valuation
At 1 September 2002 2,459 12,233 156 360 827 16,035
Additions 25 253 56 134 364 832
Revaluations 101 – – – – 101
Transfers 83 (83) – – – –
Disposals – (2,162) (6) (1) (347) (2,516)
At 30 June 2003 2,668 10,241 206 493 844 14,452
Depreciation
At 1 September 2002 – – 49 125 340 514
Charged in the period 5 – 40 118 197 360
Revaluations (5) – – – – (5) 
Disposals – – (6) (1) (248) (255)
At 30 June 2003 – – 83 242 289 614
Net book value
At 30 June 2003 2,668 10,241 123 251 555 13,838
At 31 August 2002 2,459 12,233 107 235 487 15,521
At 30 June 2003, the Group’s freehold and investment properties were valued on an open market basis as follows:
31 August
2003 2002
£’000 £’000
Freehold properties 2,668 2,459
Investment properties 10,241 12,233
12,909 14,692
Country & Metropolitan PLC Annual Report & Accounts 2003 35
Notes to the Accounts for the period ended 30 June 2003 continued 14. Tangible assets continued
The freehold properties were valued on an open market value for existing use basis on 30 June 2003 by Edwin Hill, Weatherall Green &
Smith and Andrew Miller. The investment properties were valued by the Directors. At 30 June 2003, the investment properties were
freehold and long leasehold properties and were not depreciated. Depreciation is only one of the factors reflected in the annual valuation
and the amount which might otherwise have been shown cannot be separately identified or quantified. The figures for freehold and
investment properties (included above at valuation) determined in accordance with the historical cost basis of accounting are as follows:
31 August
2003 2002
£’000 £’000
Cost and net book value 10,417 12,301
The net book value of motor vehicles includes an amount of £547,000 (2002: £474,000) held under hire purchase contracts. The amount
of depreciation charged on these motor vehicles during the period amounted to £206,000 (2002: £152,000).
Furniture
Plant & Fixtures & Motor
Equipment Fittings Vehicles Total
Company £’000 £’000 £’000 £’000
Cost 
At 1 September 2002 45 163 572 780
Additions –43 43 86
Transfers to Group undertakings – – (294) (294)
Disposals – – (109) (109)
At 30 June 2003 45 206 212 463
Depreciation
At 1 September 2002 43 109 329 481
Charged in the year 1 33 45 79
Transfers to Group undertakings – – (159) (159)
Disposals –– (73) (73)
At 30 June 2003 44 142 142 328
Net book value
At 30 June 2003 1 64 70 135
At 31 August 2002 2 54 243 299
The net book value of the motor vehicles in the Company includes an amount of £73,000 (2002: £321,000) held under hire purchase
contracts. The amount of depreciation charges on these motor vehicles during the period amounted to £44,000 (2002: £145,000)
15. Investments held as fixed assets
Associated Associated
Other Listed Undertakings Undertakings
Investments Investments - Shares – Loans Total
Group £’000 £’000 £’000 £’000 £’000
At 1 September 2002 15 347 25 – 387
Additions 10 1,644 2 895 2,551
Share of loss retained by associated undertaking – – (6) – (6)
Disposals – (845) – – (845)
At 30 June 2003 25 1,146 21 895 2,087
Associated
Other Listed Subsidiary Undertaking
Investments Investments Undertakings – Shares Total
Company £’000 £’000 £’000 £’000 £’000
At 1 September 2002 15 347 15,397 20 15,779
Additions 10 1,644 – 2 1,656
Disposals – (845) – – (845)
At 30 June 2003 25 1,146 15,397 22 16,590
The market value of listed investments at 30 June 2003 was £1,233,000 (2002: £364,000). The tax liability that would arise if these
investments were sold at this value would be approximately £26,000 (2002: £5,000).
36 Country & Metropolitan PLC Annual Report & Accounts 2003
Notes to the Accounts for the period ended 30 June 2003 continued 15. Investments held as fixed assets continued
The Group’s subsidiary undertakings, all of which were wholly owned, were engaged in property activities (other than those shown below
as being dormant). Details of the Group’s principal subsidiary undertakings, all of which have been included in the consolidated accounts,
at 30 June 2003 were:
Country of
Class of Issued Registration Immediate
Subsidiary Undertaking Share Capital & Incorporation Holding Company
Country & Metropolitan Homes Plc Ordinary England Country & Metropolitan Plc
Country & Metropolitan Partnerships Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Developments Limited Ordinary England Country & Metropolitan Homes Plc
Country & Metropolitan Homes (Northern) Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes Surrey Limited Ordinary England Country & Metropolitan Plc
Yorkdale Homes Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (Midlands) Limited Ordinary England Country & Metropolitan Plc
St James Village Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (Hertfordshire) Limited (Dormant) Ordinary England Country & Metropolitan Homes Plc
Hollowcharm Limited Ordinary England Country & Metropolitan Homes (Northern) Limited
Country & Metropolitan Homes (Rissington) Limited Ordinary England Country & Metropolitan Plc
Bredero Homes Limited Ordinary Scotland Country & Metropolitan Developments Limited
Country & Metropolitan Homes (Earlswood) Limited Ordinary England Country & Metropolitan Homes Plc
The Oaks and Elms Healthcare Company Limited (Dormant) Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (Highlands) Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (Hitchin) Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (North West) Limited Ordinary England Country & Metropolitan Plc
Straytime Limited Ordinary England Country & Metropolitan Plc
Bestshield Properties Limited Ordinary England Country & Metropolitan Homes Plc
Storey Homes (Lancaster) Limited Ordinary England Country & Metropolitan Plc
Country & Metropolitan Homes (Manchester) Limited Ordinary England Country & Metropolitan Homes Plc
Tannery Management Limited (Dormant) Ordinary England Country & Metropolitan Homes (Northern) Limited
Burnside Mills Development Limited Ordinary England Country & Metropolitan Homes (Northern) Limited
NorthCountry Homes Group Limited Ordinary England Country & Metropolitan Plc
Arundale Homes Limited Ordinary England NorthCountry Homes Group Limited
Broseley Homes Limited Ordinary England NorthCountry Homes Group Limited
Clarke Homes Limited Ordinary England NorthCountry Homes Group Limited
Pelham Construction Limited (Dormant) Ordinary England NorthCountry Homes Group Limited
Pelham Homes Lincoln Limited Ordinary England NorthCountry Homes Group Limited
Whelmar Homes Limited Ordinary England NorthCountry Homes Group Limited
The Company owns 1,575,000 ordinary shares of 1p each, being 50% of the issued share capital of its associated undertaking, Country 
& Metropolitan VCT Limited. Country & Metropolitan VCT Limited is engaged in property development activities and is registered and
incorporated in England. The Group’s share of post acquisition retained profits of Country & Metropolitan VCT Limited at 30 June 2003 is 
£42,000 (2002: £5,000).
Country & Metropolitan Homes PLC owns 500 B shares of £1 each, being 50% of the issued share capital of its associated undertaking,
Raven (Leeds) Limited. Raven (Leeds) Limited is engaged in property development activities and is registered and incorporated in
England. The Group’s share of post acquisition retained losses of Raven (Leeds) Limited at 30 June 2003 is £43,000.
Country & Metropolitan PLC Annual Report & Accounts 2003 37
Notes to the Accounts for the period ended 30 June 2003 continued 16. Stocks
Group
31 August
2003 2002
£’000 £’000
Properties held for resale 1,842 306
Work in progress 18,964 15,397
Land, property held for development and options 19,298 16,235
40,104 31,938
All stocks were held by subsidiary undertakings.
17. Debtors
Group Company
31 August 31 August
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Trade debtors 11,842 9,284 – –
Amounts recoverable on contracts 499 659 – –
Amounts owed by subsidiary undertakings – – 10,841 8,485
Dividends receivable from subsidiary undertakings – – 1,480 –
Other debtors 2,334 2,180 2,901 2,987
Prepayments and accrued income 3,367 3,593 65 23
18,042 15,716 15,287 11,495
Accrued income on sales exchanged but not legally completed at the year end amounting to £5.143m (2002: £7.089m) is disclosed
within trade debtors.
During the year, Mr S D Wicks owed the Company a maximum amount of £1,909 and the maximum amount owed to him by the
Company was £2,761.
38 Country & Metropolitan PLC Annual Report & Accounts 2003
Notes to the Accounts for the period ended 30 June 2003 continued 18. Creditors 
Amounts falling due within one year
Group Company
31 August 31 August
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Bank loans and overdrafts 22,649 19,962 3,793 59
Mortgage loans 1,000 1,907 – –
10% Unsecured Loan Stock 2002 – 250 – 250
Obligations under hire purchase contracts 268 247 44 152
Trade creditors 8,054 6,802 74 533
Amounts owed to Group undertakings – – 5,925 6,041
Other creditors 5,713 5,575 1,877 1,880
Dividend payable 623 520 623 520
Other taxation and social security 879 756 647 584
Corporation tax payable 2,101 3,073 41 44
Accruals and deferred income 5,115 3,143 682 251
46,402 42,235 13,706 10,314
Amounts falling due after more than one year
Bank loans 13,806 15,247 5,854 5,796
Mortgage loans – 91 – –
Obligations under hire purchase contracts 237 194 18 95
14,043 15,532 5,872 5,891
19. Borrowings
a. The Company and 16 of its subsidiary undertakings have granted a debenture over their assets to secure the bank loans and overdrafts.
b. The bank loans are also secured on properties of certain subsidiary undertakings. The bank loans and overdrafts attract interest at
varying rates. 
c. Mortgage loans are secured against some of the Group’s properties. Interest is charged at varying rates.  
Group Company
31 August 31 August
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Loans:
Not wholly repayable within five years, by instalments 2,374 2,681 – –
Wholly repayable within five years 35,081 34,709 5,854 6,046
37,455 37,390 5,854 6,046
Less: amount due within one year (23,649) (22,052) – (250)
Amounts due after more than one year 13,806 15,338 5,854 5,796
Instalments not due within five years 1,934 1,947 – –
Loans and overdrafts:
Amounts falling due:
In one year or less or on demand 23,649 22,119 3,793 309
Between one and two years 1,812 2,854 – –
Between two and five years 7,213 7,448 5,854 5,796
In five years or more 4,781 5,036 – –
37,455 37,457 9,647 6,105
Country & Metropolitan PLC Annual Report & Accounts 2003 39
Notes to the Accounts for the period ended 30 June 2003 continued 20. Financial instruments
The Financial Review on page 18 includes an explanation of the role that financial instruments have had during the period in creating or
changing the risks the Group faces in its activities. The explanation summarises the objectives and policies for holding or issuing financial
instruments and similar contracts, and the strategy for achieving those objectives that have been followed during the period.
The numerical disclosures required by FRS13 are set out below.
Short term debtors together with short term creditors, and amounts due in respect of land, are excluded from the analysis.
The Group’s financial assets comprise fixed asset investments, long term debtors and cash at bank and in hand. For interest calculation
purposes there is an overall offset arrangement between cash at bank and bank loans and overdrafts. Long term debtor balances and
fixed asset investments are non-interest bearing.
The Group’s financial liabilities comprise bank and other borrowings and hire purchase creditors.
a) Interest rate risk
At 30 June 2003 the Group had total bank borrowing facilities of £50.7m, representing £37.0m committed facilities, £11.6m of term
loans and £2.1m of uncommitted facilities.
After taking into account interest rate swaps entered into by the Group, the interest rate profile of the Group’s financial liabilities, all
denominated in sterling was as follows:
31 August
2003 2002
£’000 £’000
Fixed rate 11,505 12,592
Floating rate 26,455 23,306
37,960 37,898
Floating rate liabilities relate to certain bank loans and bank overdrafts which attract interest at floating rates between 1.75% and
3.5% above the relevant bank’s base rate or in some cases LIBOR.
The fixed rate borrowings have a weighted average fixed rate of 7.61% (2002: 8.55%) and weighted average period to maturity of 
4.35 years (2002: 4.67 years). The weighted average period for which the rates are fixed is 4.35 years (2002: 4.67 years).
The Company has entered into a £10 million 7 year interest rate swap fixing the base rate at 5.66%. The swap expires on 4 June 2008
but could be extended to 4 June 2011 at the bank’s option.
b) Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities at 30 June 2003 is as follows:
31 August
2003 2002
£’000 £’000
Within one year or on demand 23,917 22,366
Between one and two years 1,981 3,007
Between two and five years 7,281 7,489
In more than five years 4,781 5,036
37,960 37,898
At 30 June 2003, the Group had undrawn committed borrowing facilities of £13.2m expiring between two and five years (2002:
£14.9m expiring within one year).
c) Fair values of financial assets and liabilities
In the opinion of the directors there is no material difference between the amounts at which the Group’s financial assets and liabilities
are included in the accounts and their fair values.
40 Country & Metropolitan PLC Annual Report & Accounts 2003
Notes to the Accounts for the period ended 30 June 2003 continued 21. Provisions for liabilities and charges
31 August
Deferred tax 2003 2002
Group £’000 £’000
At 1 September 2002 12 –
Provided in the period (34) 6
Transfer of deferred tax asset 55 –
Deferred tax liabilities acquired with subsidiaries – 6
At 30 June 2003 33 12
As the Group has no intention to sell its freehold and investment properties it is not expected that the deferred tax liability will crystallise
in the foreseeable future. In accordance with FRS19, no provision has been made for deferred tax on gains on property revalued to its
market value.
The deferred tax asset at 30 June 2003 is £55,000 (2002: £9,000) and has been recognised in other debtors.
Deferred tax provided in the accounts and the amounts not provided are as follows: 
Amounts provided Amounts not provided
31 August 31 August
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Accelerated capital allowances claimed 33 21 – –
Unrelieved losses – (9) (12) –
Revaluation of freehold and investment properties – – 531 592
Total deferred tax liability 33 12 519 592
22. Analysis of hire purchase commitments
The maturity of obligations under hire purchase contracts are as follows:
Group Company
31 August 31 August
2003 2002 2003 2002
£’000 £’000 £’000 £’000
Due within one year 304 279 53 174
Due between two and five years 253 213 21 109
557 492 74 283
Less future finance charges (52) (51) (12) (36)
505 441 62 247
23. Called up share capital
31 August
2003 2002
£’000 £’000
Authorised:
25,750,000 ordinary shares of 1p each (2002: 25,750,000 ordinary shares of 1p each) 258 258
Allotted, called up and fully paid:
18,901,328 ordinary shares of 1p each (2002: 18,901,328 ordinary shares of 1p each) 189 189
Options have been granted under the Country & Metropolitan PLC 1999 Approved Share Option Scheme and Country & Metropolitan PLC
1999 Unapproved Share Option Scheme to subscribe for ordinary shares of the Company as follows:
No. of Shares Subscription Exercise
Under Option Price per Share Period
772,627 64.55p 2003-2010
162,252 57.76p 2003-2010
520,000 79.50p 2005-2012
391,500 89.50p 2006-2013
Country & Metropolitan PLC Annual Report & Accounts 2003 41
Notes to the Accounts for the period ended 30 June 2003 continued 24. Movements on reserves
Freehold Investment
Share Property Property Profit
Premium Revaluation Revaluation And Loss
Account Reserve Reserve Account
Group £’000 £’000 £’000 £’000
At 1 September 2002 9,940 284 2,032 6,962
Retained profit for the period – – – 3,829
Unrealised revaluation surplus – 106 – –
Realised revaluation surplus – – (29) 29
At 30 June 2003 9,940 390 2,003 10,820
Share Profit
Premium And Loss
Account Account
Company £’000 £’000
At 1 September 2002 9,940 1,514
Retained profit for the period – 793
At 30 June 2003 9,940 2,307
25. Reconciliation of movements in shareholders’ funds
31 August
2003 2002
£’000 £’000
Profit for the financial period 4,452 2,743
Dividends (623) (549)
Retained profit for the period 3,829 2,194
Other recognised gains and losses relating to the period 106 385
New shares issued – 2,433
3,935 5,012
Opening shareholders’ funds 19,407 14,395
Closing shareholders’ funds 23,342 19,407
26. Contingent liabilities
The Company, together with 16 other Group undertakings, have given a corporate guarantee to the lender in respect of the Group’s
committed bank facilities of £37m and term loans of £6m. The amount drawn down against these facilities at 30 June 2003 was £29.6m.
The Company has unconditionally and irrevocably guaranteed the observance and performance by its former subsidiary undertaking of all
the stipulations and obligations contained in a contract for the purchase of a site including the prompt payment in full of the sum of £3.7m
(2002: £3.7m).
The Company has given guarantees against mortgage loans given to subsidiary undertakings amounting to £5.4m at 30 June 2003 (2002:
£6.4m).
The Company has provided a maximum guarantee of £750,000 in relation to the obligations of Jacksons (Piccadilly Basin) Ltd under a land
and development loan provided to that company. Country & Metropolitan Homes PLC has provided a maximum guarantee of £500,000 in
relation to the obligations of Robinsons (Moseley) Ltd under a land and development facility provided to that company. The Group is
developing and managing projects on behalf of Robinsons (Moseley) Ltd and Jacksons (Piccadilly Basin) Ltd, both of which are unconnected
to the Group.
Country & Metropolitan Homes PLC has committed to provide up to £1.625m to an associated undertaking, Raven (Leeds) Ltd. At 30 June
2003, £895,000 had been advanced.
There are performance bonds and other agreements, including those in respect of developments where the Group act as project managers,
undertaken in the ordinary course of business from which it is anticipated that no material liabilities will arise.
In addition the Company and certain subsidiary undertakings are required from time to time to act as guarantor for the observance and
performance by fellow subsidiary undertakings of contracts entered into in the normal course of their business.
42 Country & Metropolitan PLC Annual Report & Accounts 2003
Notes to the Accounts for the period ended 30 June 2003 continued 27. Reconciliation of operating profit to net cash inflow
Year ended
31 August
2003 2002
£’000 £’000
Reconciliation of operating profit to net cash inflow
Operating profit 8,494 5,026
Depreciation charge 360 206
Goodwill amortisation 445 45
Profit on disposal of fixed assets (71) (50)
Profit on disposal of fixed asset investments (99) –
Share of profit in associated undertaking (206) (120)
(Increase)/decrease in stocks and work in progress (8,166) 2,263
Increase in debtors (2,327) (4,400)
Increase/(decrease) in creditors 3,996 (816)
Net cash inflow from operating activities 2,426 2,154
28. Reconciliation of net cash flow to movement in net debt
Year ended
31 August
2003 2002
£’000 £’000
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash in the period (3,363) 8,742
Decrease in debt and lease financing 223 660
Change in net debt resulting from cash flows (3,140) 9,402
New finance lease contracts (352) (176)
Loans and finance leases acquired with subsidiaries – (15,527)
Movement in net debt in the period (3,492) (6,301)
Net debt as at 31 August 2002 (29,572) (23,271)
Net debt as at 30 June 2003 (33,064) (29,572)
At 31 August Cash Other At 30 June
2002 flow changes 2003
£’000 £’000 £’000 £’000
Analysis of changes in net debt
Cash at bank and in hand 8,326 (3,430) – 4,896
Bank overdrafts (67) 67 – –
8,259 (3,363) – 4,896
Debt due within one year (22,052) (1,597) – (23,649)
Debt due after one year (15,338) 1,532 – (13,806)
Finance lease contracts (441) 288 (352) (505)
(29,572) (3,140) (352) (33,064)
Country & Metropolitan PLC Annual Report & Accounts 2003 43
Notes to the Accounts for the period ended 30 June 2003 continued 29. Operating lease committments
The Group has the following annual operating lease commitments:
31 August
2003 2002
Land and buildings £’000 £’000
Expiring in under one year – –
Expiring between two and five years 45 14
Expiring after five years 18 18
63 32
30. Pensions
The Group operates defined contribution pension schemes for some of its Directors and employees. The assets of the schemes are held
separately from those of the Company in independently administered funds. The contributions made during the period amounted to
£196,000 (2002: £104,000).
NorthCountry Homes Group Ltd (“NCH”) also operates a funded defined benefit pension scheme. The scheme was closed to new members
on 15 October 2001. The assets are all held in separate trustee administered funds. The scheme is subject to triennial valuation by
independent actuaries using the projected unit method. The most recent valuation was conducted at 1 July 2001, assuming that the real
valuation rate of investment return would be 6.5% per annum and that the real rate of salary increases would average 5% per annum. The
rate of contribution by NCH is 12.9% (2002: 12.9%). The contribution by NCH for the period was £107,000 (2002: £14,000).
The valuation at 1 July 2001 showed that the market value of the scheme assets amounted to £272,000 and the actuarial value of these
assets represented 88% of the benefits that had accrued to members. The actuarial valuation at 1 July 2001 showed a deficit of £38,000
after allowing for future increases in earnings. 
The valuation used for FRS 17 disclosures has been based on the most recent actuarial valuation at July 2001 and updated by Scottish Life
to take account of the requirements of FRS 17 in order to assess the liabilities of the scheme at 30 June 2003. Scheme assets are stated at
their market value at 30 June 2003. The comparitives are based on the previous valuation update undertaken by Scottish Life at 30 June
2002, the balance sheet date of NCH. The financial assumptions used to calculate scheme liabilities under FRS 17 are: 
Valuation method 30 June 30 June
2003 2002
Discount rate 5.2% 5.7%
Increase in pensionable salaries 4.1% 5.0%
Inflation assumption 2.6% 3.0%
Increase in pension in payment 2.6% 3.0%
The fair value of the assets in the scheme and the expected rate of return were:
Long term Long term
expected 30 June expected 30 June
rate of 2003 rate of 2002 
return £’000 return £’000
Insurance policies 5.6% 634 5.6% 385
Total market value of assets 634 385
Present value of scheme liabilities (673) (470)
Deficit in the scheme (39) (85)
Related deferred tax asset 12 25
Net pension deficit (27) (60)
44 Country & Metropolitan PLC Annual Report & Accounts 2003
Notes to the Accounts for the period ended 30 June 2003 continued 30. Pensions continued
Year ended
31 August
2003 2002
£’000 £’000
Analysis of the amount that would be charged to operating profit
Current service cost 63 6
Analysis of the amount that would be credited to other finance income
Expected return on pension scheme assets (23) (2)
Interest on pension scheme liabilities 25 2
Net charge 2 –
Analysis of the amount that would be recognised in statement
of total recognised gains and losses (STRGL)
Actual return less expected return on pension scheme assets 8 1
Experience losses arising on the scheme liabilities 29 3
Changes in assumptions underlying the present value of scheme liabilities 23 2
Actuarial loss that would be recognised in the STRGL 60 6
Difference between the expected and actual return on scheme assets
Amount 8 1
Percentage of scheme assets (%) 1 –
Experience losses on the scheme liabilities
Amount 29 3
Percentage of scheme liabilities (%) 4 –
Total amount recognised in statement of total recognised gains and losses
Amount 60 6
Percentage of scheme liabilities (%) 9 1
30 June 30 June
2003 2002
£’000 £’000
Analysis of the movement in the scheme deficit during the period
Opening deficit (60) (50)
Current service cost (75) (76)
Contributions 195 106
Other financial charges (2) (5)
Movement in related deferred tax asset (13) 3
Actuarial loss (72) (38)
Deficit in the scheme at end of the period (27) (60)
If the asset and liabilities of the scheme were included in the Group’s balance sheet, the effect would be as follows:
31 August
2003 2002
£’000 £’000
Profit and loss reserve
Excluding pension deficit 10,820 6,962
Net pension deficit (39) –
Related deferred tax asset 12 25
Including pension deficit 10,793 6,987
The pension deficit at the time of the acquisition of NCH on 1 August 2002 was £85,000 and this was fully provided for as part of the fair
value adjustments on acquisition.
Country & Metropolitan PLC Annual Report & Accounts 2003 45
Notes to the Accounts for the period ended 30 June 2003 continued 46 Country & Metropolitan PLC Annual Report & Accounts 2003
Notes to the Accounts for the period ended 30 June 2003 continued
31. Related Party Transactions
During the period the Group received development fees of £319,000 (2002: £163,000) from the associated undertaking, Country &
Metropolitan VCT Limited.
Mrs M Malde received fees totalling £8,000 (2002: £15,000) for services provided in respect of design, configuration, development
and maintenance of the Company’s website.  We have audited the accounts of Country and Metropolitan PLC for the period ended 30 June 2003 on pages 26 to 46. These accounts have
been prepared under the historical cost convention as modified by the revaluation of certain fixed assets and the accounting policies set out
therein. We have also audited the information in the Directors’ Remuneration Report that is described as having been audited.
This report is made solely to the company’s members, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit work
has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report, the Directors’ Remuneration Report and the accounts in accordance with
applicable law and United Kingdom Accounting Standards are set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the accounts and the part of the Directors’ Remuneration Report to be audited in accordance with relevant legal
and regulatory requirements, United Kingdom Auditing Standards and the Listing Rules of the Financial Services Authority.
We report to you our opinion as to whether the accounts give a true and fair view and whether the accounts and the part of the Directors’
Remuneration Report to be audited have been properly prepared in accordance with the Companies Act 1985. We also report to you if, in
our opinion, the Directors’ Report is not consistent with the accounts, if the company has not kept proper accounting records, if we have not
received all the information and explanations we require for our audit, or if the information specified by law regarding directors’
remuneration and transactions with the company and other members of the Group is not disclosed.
We review whether the Corporate Governance Statements reflect the company’s compliance with the seven provisions of the Combined
Code specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to
consider whether the board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the
Group’s corporate governance procedures or its risk and control procedures.
We read other information contained in the Annual Report and consider whether it is consistent with the audited accounts. This other
information comprises only the unaudited part of the Directors’ Remuneration Report, the Chairman’s Statement, the Chief Executive’s
Review, Operational Review, Financial Review and the Corporate Governance Statements. We consider the implications for our report if we
become aware of any apparent misstatements or material inconsistencies with the accounts. Our responsibilities do not extend to any other
information.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and disclosures in the accounts and the part of the Directors’
Remuneration Report to be audited. It also includes an assessment of the significant estimates and judgements made by the directors in the
preparation of the accounts, and of whether the accounting policies are appropriate to the Company’s and the Group’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the accounts and the part of the Directors’ Remuneration Report to be
audited are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also
evaluated the overall adequacy of the presentation of information in the accounts and the part of the Directors’ Remuneration Report to be
audited.
Opinion
In our opinion:
• the accounts give a true and fair view of the state of affairs of the Company and the Group as at 30 June 2003 and of the profit of the
Group for the period then ended; and
• the accounts and the part of the Directors’ Remuneration Report to be audited have been properly prepared in accordance with the
Companies Act 1985.
Nexia Audit Limited
Chartered Accountants
Registered Auditors
1 Riding House Street
London
W1A 3AS
6 October 2003
Country & Metropolitan PLC Annual Report & Accounts 2003 47
Report of the Auditors Independent auditors’ report to the shareholders of Country & Metropolitan PLC NOTICE is hereby given that the ANNUAL GENERAL MEETING of Country &
Metropolitan PLC will be held at Salisbury House, London Wall, London,
EC2M 5TA on 28 November 2003 at 11.00am for the following
purposes:-
Ordinary Business 
I. To receive and adopt the Directors’ Report and the Accounts for
the period ended 30 June 2003 together with the Auditors' Report. 
2. To declare a final dividend for the period ended 30 June 2003.
3. To re-appoint Mr S D Wicks as a Director being a director retiring
by rotation in accordance with the Company’s Articles of
Association.
4. To re-appoint Mr N Malde as a Director being a director retiring by
rotation in accordance with the Company's Articles of Association.
5. To re-appoint Mr T R Roydon as a Director, who retires in
accordance with the Company’s Articles of Association, having
been appointed a Director on 19 April 2003.
6. To re-appoint Nexia Audit Limited as the auditors to hold office
from the conclusion of this Meeting until the conclusion of the
next General Meeting at which accounts are laid before the
Company at a remuneration to be fixed by the Directors. 
7. To receive the Directors Remuneration Report.
By order of the Board
N Malde FCA 
Secretary
Registered Office:
Harefield House 
High Street  Harefield
Middlesex  UB9 6RH 
23 October 2003
Notes: 
(i) A Member entitled to attend and vote at the Meeting convened
by this Notice is entitled to appoint one or more proxies to attend
and, on a poll, to vote in his or her stead. A proxy need not be a
Member of the Company. The appointment of a proxy will not
preclude a Member from being present at the Meeting and voting
in person if he or she should subsequently decide to do so. 
(ii) To be valid, forms of proxy must be lodged with the Company's
Registrars, Capita IRG, not later than 48 hours before the time
appointed for the holding of the Meeting. 
(iii) The following documents will be available for inspection at the
Company's registered office during normal business hours on any
weekday (Saturdays and public holidays excepted) from the date
of this Notice until the date of the Annual General Meeting and at
the place of the Annual General Meeting for 15 minutes prior to
and during the Meeting. 
(a) the register of Directors' interests in the ordinary shares of the
Company kept in accordance with Section 325 of the Companies
Act 1985. 
(b) a copy of the Memorandum and Articles of Association of the
Company. 
(c) copies of all service contracts of the Directors with the Company.
48 Country & Metropolitan PLC Annual Report & Accounts 2003
Notice of Annual General Meeting  Designed & Produced in the EC by Rede Design Limited 020 8863 7676 
The Paddocks, Bourton-on-the-Water, Gloucestershire.
A development of 3, 4 and 5 bedroom houses on the site of a former caravan park. COUNTRY & METROPOLITAN PLC ANNUAL REPORT & ACCOUNTS 2003
Country & Metropolitan
Head Office
Harefield House
High Street
Harefield
Middlesex
UB9 6RH
Tel: 01895 824 111
Fax: 01895 824 205
headoffice@candmhomes.com
Southern Region
The Coach House
High Street
Harefield
Middlesex
UB9 6EB
Tel: 01895 826250
Fax: 01895 826255
southernregion@candmhomes.com
Northern Region
Grange Park
Boston Road
Wetherby
West Yorkshire
LS22 5DY
Tel: 01937 583306
Fax: 01937 584660
northernregion@candmhomes.com
North West Region
Suite 504
Chadwick House
Birchwood Park
Warrington
WA3 6AE
Tel: 01925 830950
Fax: 01925 830680
northwestregion@candmhomes.com
South West Region
Rissington Business Park
Upper Rissington
Nr. Cheltenham
Gloucestershire
GL54 2QB
Tel: 01451 821527
Fax: 01451 821085
southwestregion@candmhomes.com
NorthCountry Homes Group Limited
NorthCountry House
Barlborough
Chesterfield
S43 4WP
Tel: 01246 573700
Fax: 01246 573789
www.northcountry-homes.co.uk
Pelham Homes Lincoln Limited
10a Newport
Lincoln
LN1 3DF
Tel: 01522 580400
Fax: 01522 545678
www.pelham-homes.co.uk
Whelmar Homes Limited
5 Nidd House
Richmond Business Park
White Rose Way
Doncaster
DN4 5NL
Tel: 01246 573700
Fax: 01246 573789
www.whelmar-homes.co.uk
Broseley Homes Limited
10 Defender Court
Sunderland
SR5 3PE
Tel: 01915 370980
Fax: 01915 370999
www.broseley-homes.co.uk
Clarke Homes Limited
1 Lyme Vale Court
Newcastle Road
Stoke on Trent
ST4 6NW
Tel: 01782 753222
Fax: 01782 753250
www.clarke-homes.co.uk
Arundale Homes Limited
Centre 27
Birstall
Leeds
WF17 9TB
Tel: 01924 421330
Fax: 01924 421340
www.arundale-homes.co.uk
www.candmhomes.com