EXHIBIT 
  10.20

HOLMES FUNDING LIMITED

REPORT AND ACCOUNTS

FOR THE YEAR ENDED 31 DECEMBER 2004

Registered in England and Wales No. 3982428

HOLMES FUNDING LIMITED 	 	 	 	 	 Report of the directors

The Directors submit their report together with the accounts for the year ended 31 December 2004.

|1. Principal
    activity and review of the year
|------------------------------------------------

The principal activity of the Company is to acquire an interest in a portfolio of mortgage loans and enter into financial arrangements with other group companies in that connection. No future changes are envisiged.

The Company invests in beneficial interests in the assets of Holmes
Trustees Limited ("the Trust"), which assets comprise mortgage loans secured
on residential property in England, Scotland and Wales. The Company receives
a share of income from the Trust in proportion to its share of the total mortgage
assets of the Trust.

During the year the Company purchased a further beneficial interest
in the assets of the Trust of £3.9 billion on 1 April. This purchase was
financed by a loan from Holmes Financing (No. 8) plc. Holmes Trustees Limited
and Holmes Financing (No. 8) plc are both group undertakings.

|2. Results
    and dividends
|----------------------------

The profit for the year on ordinary activities after tax amounted
to £12,287,000 (2003 - loss £5,011,000).

The Directors do not recommend the payment of a dividend (2003
  - £nil).

The retained profit of £12,287,000 (2003 - loss £5,011,000)"has
been transferred to reserves.

The profit in the year has arisen as a result of the change in provisions made against the Company's investment. On the release or utilisation of this provision in future years, the Directors anticipate that the Company will continue to make a profit.

|3. Directors
    and their interests
|------------------------------------

The directors who served throughout the year, except as noted, were:

Mr D M Green
Mr M McDermott
SPV Management Limited

---





At the year-end and
  the previous year-end, Holmes Holdings Limited held one share in the Company.
  Holmes Holdings Limited and M. McDermott jointly held the other share.

SPV Management Ltd and M. McDermott held one share in the holding company, Holmes Holdings Limited, at the year-end. The other share in Holmes Holdings Limited was held by SPV Management Limited. M. McDermott is also a Director of SPV Management Limited.

None of the other Directors had a beneficial interest in the shares of the Company, or of the holding company, Holmes Holdings Limited, and its subsidiaries at the year-end.

|4. Directors'
    responsibility in respect of the preparation of accounts
|--------------------------------------------------------------------------

The Directors are required by UK company law to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the Company as at the end of the financial year and the profit or loss for that period.

The Directors confirm that suitable accounting policies have been used and applied consistently and that reasonable and prudent judgements and estimates have been made in the preparation of the financial statements for the year ended 31 December 2004. The Directors also confirm that applicable accounting standards have been followed and that the statements have been prepared on the going concern basis.

The Directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the financial position of
the Company and to enable them to ensure that the financial statements comply
with the Companies Act 1985. They are also responsible for the Companys
system of internal control and for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection of fraud and
other irregularities.

|5. Going
    concern
|--------------------

The Directors confirm that they are satisfied that Holmes Funding Ltd has adequate resources to continue in business for the foreseeable future. For this reason, they continue to adopt a going concern basis in preparing the financial statements.

|6. Auditors
|-----------

The Company has elected to dispense with the obligation to appoint
auditors annually and, accordingly Deloitte & Touche LLP will be the auditors
of the Company for the forthcoming financial year under the provisions of section
386 (2) of the Companies Act 1985.

By Order of the Board

/s/ Karen Carson
  For and on behalf of 
  Abbey National Secretariat Services Limited
  Company Secretary
  17 June 2005



Registered Office Address:

Abbey National House 
2 Triton Square 
Regents Place 
London
NW1 3AN

---







INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF HOLMES
            FUNDING LIMITED

We have audited the financial statements of Holmes Funding Limited for the year ended 31 December 2004 which comprise the profit and loss account, the balance sheet and the related notes 1 to 16. These financial statements have been prepared under the accounting policies set out therein.

Respective responsibilities of Directors and auditors

As described in the statement of Directors responsibilities, the Companys
Directors are responsible for the preparation of the financial statements in
accordance with applicable United Kingdom law and accounting standards. Our responsibility
is to audit the financial statements in accordance with relevant United Kingdom
legal and regulatory requirements and auditing standards.

We report to you our opinion as to whether the financial statements
give a true and fair view and are properly prepared in accordance with the Companies
Act 1985. We also report if, in our opinion, the Directors report is not consistent with the financial statements, if the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding Directors remuneration
and transactions with the Company is not disclosed.

We read the Directors report for the above year and consider
the implications for our report if we become aware of any apparent misstatements.

Basis of audit opinion

We conducted our audit in accordance with United Kingdom auditing
standards issued by the Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures in the financial
statements. It also includes an assessment of the significant estimates and judgements
made by the Directors in the preparation of the financial statements and of whether
the accounting policies are appropriate to the Companys circumstances,
consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion

In our opinion the financial statements give a true and fair view
of the state of the Companys affairs as at 31 December 2004 and of its
profit for the year then ended and have been properly prepared in accordance
with the Companies Act 1985.

Date:17
  June 2005

/s/ Deloitte & Touche
  LLP
  Deloitte & Touche LLP 
  Chartered Accountants and Registered Auditors 
  London

---







HOLMES FUNDING LIMITED

Profit and loss account
  
  For the year ended 31 December 2004

|                                                                                  |      |  |          |   |          |  
|--------------------------------------------------------------------------------- | ---- |  | -------- | - | -------- | -
|                                                                                  | Note |  | 2004     |   | 2003     |  
|                                                                                  |      |  | £'000    |   | £'000    |  
|                                                                                  |      |  |          |   |          |  
|Interest receivable and similar income                                            | 2    |  | 804,668  |   | 650,204  |  
|Interest payable                                                                  | 3    |  | (752,827 | ) | (599,306 | )
|Net interest income                                                               |      |  | 51,841   |   | 50,898   |  
|                                                                                  |      |  |          |   |          |  
|Administrative expenses                                                           |      |  | (51,640  | ) | (50,440  | )
|Provision against investment in Trust property                                    | 6    |  | 17,362   |   | (7,618   | )
|                                                                                  |      |  |          |   |          |  
|OPERATING PROFIT/(LOSS) ON ORDINARY ACTIVITIES
    BEFORE TAXATION                | 4    |  | 17,563   |   | (7,160   | )
|Tax (charge)/credit on profit/(loss) on ordinary activities                       | 5    |  | (5,268   | ) | 2,149    |  
|                                                                                  |      |  |          |   |          |  
|PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER
    TAXATION AND RETAINED FOR THE YEAR | 13   |  | 12,295   |   | (5,011   | )
|                                                                                  |      |  |          |   |          |  
|Profit and loss account brought forward                                           |      |  | (15,270  | ) | (10,259  | )
|                                                                                  |      |  |          |   |          |  
|Profit and loss account carried forward                                           |      |  | (2,975   | ) | (15,270  | )
|                                                                                  |      |  |          |   |          |  

There are no recognised gains or losses in either the current or previous financial years other than the profit for the financial year and loss for the prior year and therefore no statement of total recognised gains and losses is required.

There is no difference between the profit on ordinary activities before taxation and the retained profit for the year and the increase from the prior year stated above and their historical cost equivalents.

All transactions are derived from continuing operations.

---





HOLMES FUNDING LIMITED

Balance sheet 
  As at 31 December 2004

|                                                             |      |  |            |   |            |  
|------------------------------------------------------------ | ---- |  | ---------- | - | ---------- | -
|                                                             | Note |  | 2004       |   | 2003       |  
|                                                             |      |  | £'000      |   | £'000      |  
|                                                             |      |  |            |   |            |  
|FIXED ASSETS                                                 |      |  |            |   |            |  
|Beneficial interest in mortgage portfolio                    | 6    |  | 13,168,370 |   | 13,341,978 |  
|CURRENT ASSETS                                               |      |  |            |   |            |  
|Debtors                                                      | 7    |  | 27,670     |   | 24,751     |  
|Deferred taxation asset                                      | 9    |  | 1,372      |   | 6,618      |  
|Cash at bank and in hand                                     | 8    |  | 2,890,818  |   | 1,200,597  |  
|                                                             |      |  |            |   |            |  
|                                                             |      |  | 2,919,860  |   | 1,231,966  |  
|                                                             |      |  |            |   |            |  
|CREDITORS - amounts falling due within one year              | 10   |  | 1,362,140  |   | 743,837    |  
|                                                             |      |  |            |   |            |  
|NET CURRENT ASSETS                                           |      |  | 1,557,720  |   | 488,129    |  
|                                                             |      |  |            |   |            |  
|TOTAL ASSETS LESS CURRENT LIABILITIES                        |      |  | 14,726,090 |   | 13,830,107 |  
|                                                             |      |  |            |   |            |  
|CREDITORS - amounts falling due after more
    than one year | 11   |  | 14,729,065 |   | 13,845,377 |  
|                                                             |      |  |            |   |            |  
|NET LIABILITIES                                              |      |  | (2,975     | ) | (15,270    | )
|CAPITAL AND RESERVES                                         |      |  |            |   |            |  
|Called up share capital                                      | 12   |  | –          |   | –          |  
|Profit and loss account                                      |      |  | (2,975     | ) | (15,270    | )
|                                                             |      |  |            |   |            |  
|EQUITY SHAREHOLDERS' FUNDS                                   | 13   |  | (2,975     | ) | (15,270    | )
|                                                             |      |  |            |   |            |  

The financial statements on pages 5 to 10 were approved by the Board of Directors on 17 June 2005

Signed on behalf of the Board of Directors



M McDermott
Director

---





HOLMES FUNDING LIMITED

NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004

1. Accounting Policies

Basis of accountingThe accounts have been prepared under the historical cost convention and in accordance with applicable United Kingdom law and accounting standards. The particular accounting policies adopted are described below:

Presentation of profit and loss accountDue to the nature of the business the Directors are of the opinion that it is more appropriate to use net interest income rather than turnover in presenting the profit and loss account.

Interest receivableInterest receivable is recognised on an accrual basis.

Fixed assetsInvestments held as fixed assets are stated at cost
less provision for any impairment.

Provisions Specific provisions are made against loans and advances which comprise the Trust property in which the Company has a beneficial interest, when, as a result of regular appraisals of the assets, it is considered that recovery is doubtful. A general provision is made against loans and advances to cover bad and doubtful debts that have not been separately identified but which are know from experience to be present in any portfolio of loans and advances. The specific and general provisions are deducted from loans and advances. Provisions made during the year, less amounts released and recoveries of amounts written off in previous years are charged to the profit and loss account.

Deferred consideration Deferred consideration is payable to the originator of the loans and advances to customers, which is based upon the profitability of the Company before the charge for the general provision for bad and doubtful debts. This has resulted in a loss to date, however the directors anticipate that the Company will make a profit over the life of the mortgage portfolio.

Value added taxValue added tax is not recoverable by the Company
and is included with it's related cost.

Derivatives Transactions
      are undertaken in derivative financial instruments, "derivatives",
which include interst rate swaps. Derivatives are entered into for the purpose
of eliminating risk from potential movements in interest rates inherent in the
Company's non-trading assets and liabilities. Non-trading assets and liabilities
are those intended for use on a continuing basis in the activities of the Company.

A derivative is designated as non-trading where there is an offset between the effects of potential movements in market rates of the derivative and the designated asset or liability being hedged. Non-trading derivatives are reviewed regularly for their effectiveness as hedges. Non-trading derivatives are accounted for on an accruals basis, consistent with the asset or liability being hedged. Income and

---





expense on non-trading
  derivatives are recognised as they accrue over the life of the instruments as
  an adjustment to interest receivable or payable.

Cash flow statement The
      Company is a wholly owned subsidiary of Holmes Holdings Limited, a Company
      incorporated in Great Britain. Accordingly the Company is not required
to produce a cash flow statement as prescribed in paragraph 5 (a) of FRS1 (revised
1996), "Cash flow statements".

Deferred taxation Deferred taxation is provided on all timing differences that have not reversed before the balance sheet date at the rate of tax expected to apply when those timing differences will reverse. Deferred tax assets are recognised to the extent that they are regarded as recoverable.

Costs relating to acquisition Costs relating to acquisition of the Trust asset are deferred and charged over the period in which interest is earned on the asset.

2. Interest
  receivable and similar income

|                                                                                       |         |   |         |  
|-------------------------------------------------------------------------------------- | ------- | - | ------- | -
|                                                                                       | 2004    |   | 2003    |  
|                                                                                       | £'000   |   | £'000   |  
|                                                                                       |         |   |         |  
|Income from beneficial interest in mortgage
      portfolio                            | 742,873 |   | 708,024 |  
|Expense from derivatives used to hedge beneficial
      interest in mortgage portfolio | (4,130  | ) | (91,841 | )
|Bank interest receivable                                                               | 65,925  |   | 34,021  |  
|                                                                                       |         |   |         |  
|                                                                                       | 804,668 |   | 650,204 |  
|                                                                                       |         |   |         |  

The mortgage portfolio is held on trust by Holmes Trustees Limited, a group undertaking.

All of the income is derived from one geographical
  segment.

3.  Interest
payable

|                                                                            |         |  |         | 
|--------------------------------------------------------------------------- | ------- |  | ------- | 
|                                                                            | 2004    |  | 2003    | 
|                                                                            | £'000   |  | £'000   | 
|                                                                            |         |  |         | 
|Interest payable on loans from group undertakings                           | 749,606 |  | 596,486 | 
|Interest payable on start-up loans                                          | 3,221   |  | 2,820   | 
|                                                                            |         |  |         | 
|                                                                            | 752,827 |  | 599,306 | 
|                                                                            |         |  |         | 
|4.  Profit/(loss)
      on ordinary activities before taxation              |         |  |         | 
|                                                                            |         |  |         | 
|Loss on ordinary activities before taxation
      is stated after charging: |         |  |         | 
|                                                                            |         |  |         | 
|                                                                            | 2004    |  | 2003    | 
|                                                                            | £'000   |  | £'000   | 
|                                                                            |         |  |         | 
|Auditors' remuneration - audit fees                                         | 127     |  | 107     | 
|                                                                            |         |  |         | 

The Company had no employees (2003: none) other than its Directors.

No emoluments were paid to the Directors by the Company during
the year (2003: £nil).

---





5. Tax
  charge/(credit) on profit/(loss) on ordinary activities

|                                                                                                                                                 |            |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------ | ---------- | - | ---------- | -
|                                                                                                                                                 | 2004       |   | 2003       |  
|                                                                                                                                                 | £'000      |   | £'000      |  
|                                                                                                                                                 |            |   |            |  
|UK Corporation Tax for the year at 30% (2003:
      30%)                                                                                         | 22         |   | 20         |  
|Deferred taxation                                                                                                                                | 5,246      |   | (2,169     | )
|                                                                                                                                                 |            |   |            |  
|Tax charge/(credit)                                                                                                                              | 5,268      |   | (2,149     | )
|                                                                                                                                                 |            |   |            |  
|The Company pays corporation tax at 30% with
      marginal relief.                                                                              |            |   |            |  
|                                                                                                                                                 |            |   |            |  
|The tax charge in the year arises due to the
      disallowable general provision on the Trust mortgage income.                                  |            |   |            |  
|                                                                                                                                                 |            |   |            |  
|The tax assessed for the year is
      lower than the standard 30% rate of corporation tax in the UK. The differences
      are explained below: |           
|                                                                                                                                                 |            |   |            |  
|                                                                                                                                                 |            |   |            |  
|Profit on ordinary activities before tax                                                                                                         | 17,563     |   | (7,160     | )
|Tax at 30% (2003: 30%)                                                                                                                           | 5,268      |   | (2,148     | )
|Non tax-deductable general provisions                                                                                                            | (5,246     | ) | 2,169      |  
|Benefit of small companies corporation tax rate                                                                                                  | –          |   | (1         | )
|Current tax charge for the year                                                                                                                  | 22         |   | 20         |  
|                                                                                                                                                 |            |   |            |  
|                                                                                                                                                 |            |   |            |  
|6.  Beneficial
    interest in mortgage portfolio                                                                                                |            |   |            |  
|                                                                                                                                                 |            |   |            |  
|                                                                                                                                                 | 2004       |   | 2003       |  
|                                                                                                                                                 | £'000      |   | £'000      |  
|                                                                                                                                                 |            |   |            |  
|Cost:                                                                                                                                            |            |   |            |  
|At 1 January                                                                                                                                     | 13,364,715 |   | 13,694,537 |  
|Additions                                                                                                                                        | 3,983,790  |   | 2,403,550  |  
|Capital repayments                                                                                                                               | (4,174,679 | ) | (2,733,372 | )
|                                                                                                                                                 |            |   |            |  
|At 31 December                                                                                                                                   | 13,173,826 |   | 13,364,715 |  
|                                                                                                                                                 |            |   |            |  
|Provisions:                                                                                                                                      |            |   |            |  
|At 1 January                                                                                                                                     |            |   |            |  
|General                                                                                                                                          | 22,061     |   | 14,831     |  
|Specific                                                                                                                                         | 676        |   | 222        |  
|Transfer from profit and loss account                                                                                                            | (17,362    | ) | 7,618      |  
|Irrecoverable amounts written back/(off)                                                                                                         | 81         |   | 66         |  
|                                                                                                                                                 |            |   |            |  
|At 31 December                                                                                                                                   | 5,456      |   | 22,737     |  
|                                                                                                                                                 |            |   |            |  
|Being:                                                                                                                                           |            |   |            |  
|General                                                                                                                                          | 4,570      |   | 22,061     |  
|Specific                                                                                                                                         | 886        |   | 676        |  
|                                                                                                                                                 |            |   |            |  
|                                                                                                                                                 | 5,456      |   | 22,737     |  
|                                                                                                                                                 |            |   |            |  
|Net book value:                                                                                                                                  |            |   |            |  
|At 31 December                                                                                                                                   | 13,168,370 |   | 13,341,978 |  
|                                                                                                                                                 |            |   |            |  
|Repayable:                                                                                                                                       |            |   |            |  
|On demand or at short notice                                                                                                                     | 46,164     |   | 29,808     |  
|In not more than three months                                                                                                                    | 15,145     |   | 36,913     |  
|In more than three months but not more than
      one year                                                                                       | 229,763    |   | 219,416    |  
|In more than one year but not more than five
      years                                                                                         | 1,458,608  |   | 1,319,525  |  
|                                                                                                                                                 |            |   |            |  
|In more than five years                                                                                                                          | 11,424,146 |   | 11,759,053 |  
|                                                                                                                                                 |            |   |            |  
|At 31 December 2004                                                                                                                              | 13,173,826 |   | 13,364,715 |  
|                                                                                                                                                 |            |   |            |  
|                                                                                                                                                 |            |   |            |  
|Fixed rate                                                                                                                                       | 2,784,954  |   | 2,380,538  |  
|Variable rate                                                                                                                                    | 10,388,872 |   | 10,984,177 |  
|Less: provisions (see note 4)                                                                                                                    | (5,456     | ) | (22,737    | )
|                                                                                                                                                 |            |   |            |  
|                                                                                                                                                 | 13,168,370 |   | 13,341,978 |  
|                                                                                                                                                 |            |   |            |  

---





The
          mortgage portfolio in which the Company holds a beneficial interest
      is held on trust for the Company and the originator of the mortgage
    loans by Holmes Trustees Limited, a group undertaking. During the year the
      company increased its interest in the Trust property in one tranche. The
      mortgage loans
    are secured on residential property in England and Wales. At 31 December
      2004 the total mortgage asset held on trust for the beneficiaries amounted
      to £28,987,230,878 (2003 - £23,162,383,000).

|7.  Debtors                                                               |           |   |           | 
|------------------------------------------------------------------------- | --------- | - | --------- | 
|                                                                          |           |   |           | 
|                                                                          | 2004      |   | 2003      | 
|                                                                          | £'000     |   | £'000     | 
|                                                                          |           |   |           | 
|Other debtors                                                             | 23,646    |   | 24,751    | 
|Accrued interest receivable                                               | 4,024     |   | –         | 
|                                                                          |           |   |           | 
|8.  Cash
    at Bank and in Hand                                          |           |   |           | 
|                                                                          |           |   |           | 
|                                                                          | 2004      |   | 2003      | 
|                                                                          | £'000     |   | £'000     | 
|                                                                          |           |   |           | 
|Guaranteed Investment Contract                                            | 2,050,263 |   | 1,182,231 | 
|Share of Trust cash                                                       | 840,555   |   | 18,366    | 
|                                                                          |           |   |           | 
|                                                                          | 2,890,818 |   | 1,200,597 | 
|                                                                          |           |   |           | 
|The Guaranteed Investment Contract pays interest
      based on LIBOR.    |           |   |           | 
|                                                                          |           |   |           | 
|9.  Deferred
    taxation asset                                           |           |   |           | 
|                                                                          |           |   |           | 
|                                                                          | 2004      |   | 2003      | 
|                                                                          | £'000     |   | £'000     | 
|                                                                          |           |   |           | 
|As at 1 January                                                           | 6,618     |   | 4,449     | 
|Transfer to profit and loss account                                       | (5,246    | ) | 2,169     | 
|                                                                          |           |   |           | 
|As at 31 December                                                         | 1,372     |   | 6,618     | 
|                                                                          |           |   |           | 
|Provided on:                                                              |           |   |           | 
|General provision against beneficial interest
      in mortgage portfolio | 1,372     |   | 6,618     | 
|                                                                          |           |   |           | 

The deferred tax asset has been recognised under FRS 19 (Deferred tax) since it is considered more likely than not that there will be sufficient future profits against which the future reversal of the general provision can be deducted.

|10.  Creditors
      : amounts falling due within one year |           |  |         | 
|---------------------------------------------------------- | --------- |  | ------- | 
|                                                           |           |  |         | 
|                                                           | 2004      |  | 2003    | 
|                                                           | £'000     |  | £'000   | 
|                                                           |           |  |         | 
|Loans from group undertakings                              | 1,001,462 |  | 482,320 | 
|Amounts due to group undertakings                          | 177,655   |  | 129,940 | 
|Corporation tax                                            | 22        |  | 20      | 
|Other creditors                                            | 183,001   |  | 120,787 | 
|Accrued interest payable                                   | –         |  | 10,770  | 
|                                                           |           |  |         | 
|                                                           | 1,362,140 |  | 743,837 | 
|                                                           |           |  |         | 
|                                                           |           |  |         | 

---





11.  Creditors
    : amounts falling due after more than one year

|                                      |            |  |            | 
|------------------------------------- | ---------- |  | ---------- | 
|                                      | 2004       |  | 2003       | 
|                                      | £'000      |  | £'000      | 
|                                      |            |  |            | 
|Loans from group undertakings         | 14,508,861 |  | 13,627,717 | 
|Start-up loans                        | 33,980     |  | 74,546     | 
|Other creditors                       | 186,224    |  | 143,114    | 
|                                      |            |  |            | 
|                                      | 14,729,065 |  | 13,845,377 | 
|                                      |            |  |            | 
|The amounts are repayable as follows: |            |  |            | 
|                                      |            |  |            | 
|Due 2 - 5 years                       | 5,623,173  |  | 4,566,917  | 
|Due over 5 years                      | 9,105,892  |  | 9,278,460  | 
|                                      |            |  |            | 
|Total                                 | 14,729,065 |  | 13,845,377 | 
|                                      |            |  |            | 

Interest payable on the loans from group undertakings and the start-up loans is based on LIBOR. Amounts due over 5 years are paid in order of priority when cash is available after other commitments have been fulfilled.

|12. Share
    capital                                                                                       |         |   |         |  
|----------------------------------------------------------------------------------------------------------- | ------- | - | ------- | -
|                                                                                                            |         |   |         |  
|                                                                                                            | 2004    |   | 2003    |  
|                                                                                                            | £       |   | £       |  
|                                                                                                            |         |   |         |  
|Authorised:                                                                                                 |         |   |         |  
|100 Ordinary shares
    of £1 each                                                                          | 100     |   | 100     |  
|Allotted and called up:                                                                                     |         |   |         |  
|2 Ordinary shares of £1
    each                                                                            | 2       |   | 2       |  
|                                                                                                            |         |   |         |  
|13.  Reconciliation
      of movements in shareholders' funds                                               |         |   |         |  
|                                                                                                            |         |   |         |  
|                                                                                                            | 2004    |   | 2003    |  
|                                                                                                            | £'000   |   | £'000   |  
|                                                                                                            |         |   |         |  
|Opening shareholders' funds                                                                                 | (15,270 | ) | (10,259 | )
|Retained profit for the year                                                                                | 12,295  |   | (5,011  | )
|                                                                                                            |         |   |         |  
|Closing shareholders' funds                                                                                 | (2,975  | ) | (15,270 | )
|                                                                                                            |         |   |         |  
|                                                                                                            |         |   |         |  
|14.  Capital
    Commitments and Contingent Liabilities                                                     |         |   |         |  
|                                                                                                            |         |   |         |  
|There were no outstanding capital commitments
      or contingent liabilities at 31 December 2004 and 2003. |         |   |         |  
|                                                                                                            |         |   |         |  
|15.  Related
    party disclosures                                                                          |         |   |         |  

The Company has taken advantage of the exemption covered by paragraph 3 (c) of FRS8 'Related Party Disclosures' not to disclose transactions with entities that are part of the Holmes Group.

16.  Parent
  Undertaking and Controlling Party

The immediate parent of the Company is Holmes Holdings Limited, a company incorporated in Great Britain and registered in England and Wales, which prepares the only accounts into which the Company is consolidated.

SPV Management Limited, a company incorporated in Great Britain and registered in England and Wales, holds all of the shares in the Company (one jointly with M McDermott as nominee) as trustee

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under a discretionary charitable trust dated 17 February 1999 for the benefit of nurses employed in the UK and for charities.

The administration, operations, accounting and financial reporting functions of the Company are performed by Abbey National plc, which is incorporated in Great Britain. During the year, Abbey National plc has delegated administration and servicing functions in respect of the loans on behalf of the mortgages' trustee and the beneficiaries to a service provider.

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