annual report  accounts
building
growth
telford homes  plc
2011
annual report  accounts 2011
telford homes plc
first floor
stuart house
queensgate
britannia road
waltham cross
hertfordshire en8 7tf
tef2681  ar11 cover aw02indd   1 09062011   1641 aerial view of the city of london showing  
a computer generated image of avantgarde 
in the foreground
building
focused 
tef2681  ar11 cover aw02indd   2 09062011   1641 contents
business profile 02  07
year in review 08  31
highlights 08
chairman’s statement 09
chief executive’s review 10
financial review 18
structure 24
training and apprenticeships 25
health and safety 26
environment and sustainability 28
key risks and uncertainties 30
corporate governance 32  43
board of directors 32
policy on corporate governance 34
directors’ remuneration report 36
report of the directors 38
statement of directors’ responsibilities 41
auditors’ report 42
financial statements 44  71
group income statement 44
balance sheet 45
statement of changes in equity 46
cash flow statement 47
statement of accounting policies 48
notes to the financial statements 52
company information 72
the group has finance in  
place to add to the development 
pipeline and the market in  
east london remains robust  
and the subject of significant  
and ongoing undersupply
andrew wiseman 
chief executive
01
tef2681  ar11 front aw02indd   1 13062011   1048 11 
london 
boroughs
telford homes knows
london and has developed
in 11 different boroughs
building
locally
1o years of developing 
in east london
telford homes operates predominantly 
in east london in a marketplace underpinned 
by the employment areas of canary wharf and 
the city ongoing regeneration is improving the 
quality of the built environment for the benefit 
of both existing and new residents 
business profile
02
tef2681  ar11 front aw02indd   2 13062011   1048 working with 
local housing 
associations
lanrick road
tower hamlets e14
telford homes has long standing partnerships 
with local housing associations particularly 
poplar harca and eastend homes poplar 
harca was our partner in developing 64 
affordable homes at lanrick road
local knowledge
local knowledge has played a key role 
in the success of the group over the last 
few years and is a competitive advantage 
particularly in relationships with local 
authorities and affordable housing 
providers and in our understanding 
of the local planning process
2012 olympics
the 2012 olympics in london are 
just over a year away and east 
london can only benefit from the 
anticipation and excitement that 
this major event brings to the area 
let alone the substantial investment 
already made
business profile
03
tef2681  ar11 front aw02indd   3 13062011   1048 building
quality
award winning 
devel opments
the quality of the design and 
construction of our developments  
has been recognised by many awards  
in the last two years telford homes  
has won homebuilder of the year 2009 
british home awards three nhbc 
seals of excellence and four evening 
standard awards
customer 
service
customer recommendation 
rate of 971 in 2010 calendar 
year – independent customer 
satisfaction survey
quality control  
thorough inspection 
and detailed handover 
procedures have become 
hallmarks of our product 
and service package
anthony atkinson  
estates  customer service director
business profile
04
tef2681  ar11 front aw02indd   4 13062011   1048 brand
the telford homes brand is about 
consistent delivery of high quality 
desirable new homes backed up by our 
dedicated customer service team 
providing product finish and service 
that’s second to none
ongoing service
for the first two years of ownership 
t elford homes provides a 247 365 
days a year free emergency service 
ensuring there is always someone to 
help deal with any urgent problems  
that may arise out of hours
saunders 
apartments 
merchants’ quarter 
e3
a development of 39 open market homes 
and the final stage of our redevelopment 
of the british estate in partnership with 
eastend homes
business profile
05
tef2681  ar11 front aw02indd   5 13062011   1048 building
shareholder
returns
strong balance sheet
telford homes is profitable has  
increased the volume of sales due  
to preselling developments that  
will complete in future years and has 
secured finance until september 2014
25p
dividend
2011
2p
dividend
2010
business profile
06
tef2681  ar11 front aw02indd   6 13062011   1048 overseas  
sal es 
matchmakers wharf 
avantgarde and  
the hawksmoors 
 
clockwise from top computer generated 
images of matchmakers wharf e9 the 
hawksmoors on the st georges estate e1  
and avantgarde in shoreditch e1
bank facility
on 31 march 201 1 the group signed a 
£70 million corporate banking facility 
which extends to 30 september 2014 with 
a club of three banks being the royal 
bank of scotland hsbc and santander 
it is a great credit to t elford homes that 
these three major banks are prepared to 
support the business to this extent
overseas sales
overseas launches including 
matchmakers wharf the hawksmoors 
and avantgarde have been very 
successful the majority of overseas 
sales are secured with a 20 per cent 
deposit and we will continue to market 
appropriate developments overseas to 
secure revenue that will be recognised 
on legal completions in future years
58
share price on  
31 march 2011 as  
a percentage of net  
asset value per share
business profile
07 07
tef2681  ar11 front aw02indd   7 13062011   1048  before all interest charges including those expensed within cost of sales of £29 million  
2010 £53 million and exceptional items
number of open 
market sales 
contracted 
368
2010 253
highlights
revenue 
£1211 million
2010 £1593 million 
adjusted gross 
profit margin 
151
2010 165
adjusted 
operating margin 
52
2010 92
earnings  
per share 
48p
2010 137p 
profit before tax 
£30 million
2010 £73 million 
total debt 
£649 million
2010 £708 million
dividend  
per share 
25p
2010 20p
best regeneration 
project 2010
special commendation for 
kinetica – best regeneration 
project 2010 london evening 
standard awards
gearing 
712
2010 589 
development pipeline 1904 properties
2010 2370 properties
best new starter home 2010
special commendation for vellum – best new starter home 
2010 london evening standard awards
number of 
open market 
completions 
281
2010 389
year in review
08
tel ford homes plc annual report  accounts 
for the year ending 31 march 2011
tef2681  ar11 front aw02indd   8 13062011   1048 chairman’s 
statement
david holland
our success in marketing 
developments in the far east 
has continued with the launch 
of avantgarde in april and 
may 2011
in the year to 31 march 2011 telford homes 
exchanged contracts for the sale of 368 open 
market properties an increase of 45 per cent 
over last year this performance has been 
driven by successful marketing campaigns  
in the far east selling properties before 
construction has commenced together with 
a steady rate of demand from uk buyers
during the recession the group reduced  
its investment in new land opportunities 
and switched some of its developments  
to wholly affordable housing as expected 
this has reduced both the output of finished 
open market homes and profit margins 
despite this the group met market 
forecasts for the year to 31 march 2011 
achieving profit before tax and after 
exceptional items of £30 million
our success in marketing developments in 
the far east has continued with the launch 
of avantgarde in april and may 2011 
together with a strong performance at 
the uk launch we have achieved over 170 
sales out of the 257 open market homes on 
the development these sales secure the 
recognition of profit for telford homes and 
our new joint venture partner the william 
pears group when the homes are handed 
over in 2013 and 2014
reduced output and margins will continue 
to keep profits at a lower level in the new 
financial year but these effects will have 
substantially been worked through the 
business by march 2012 beyond this date 
the board expects significant growth in the 
number of finished homes from the existing 
development pipeline and has secured 
presales on some of those developments 
at normal margins the signing of our new 
bank facility in march this year will improve 
our ability to add to the development 
pipeline for future years in a climate where 
many smaller developers are struggling to 
access finance
as a result the board is maintaining a 
progressive dividend policy in proposing a 
final dividend of 125 pence making a total 
of 25 pence for the year 2010 20 pence
finally it gives me great pleasure to welcome 
jon distefano as our new chief executive 
with effect from 1 july 2011 jon replaces 
andrew wiseman and i am confident that 
telford homes will continue to prosper under 
his leadership after ten years in our current 
roles andrew will take over from me on his full 
time return to telford homes in january 2012 
assuming the position of executive chairman 
thus retaining his skills and knowledge within 
the business i have been delighted to serve 
as chairman over a successful decade and i 
look forward to continuing as a nonexecutive 
director in the future
david holland 
chairman nonexecutive
31 may 2011
building
progress
year in review
wwwtelfordhomesplcuk 09
tef2681  ar11 front aw02indd   9 13062011   1048 the board is pleased to report that profit before tax for 
the year to 31 march 2011 is in line with expectations at 
£30 million after exceptional items 2010 £73 million 
although the number of open market properties 
completed in the year is lower at 281 2010 389 the  
group has experienced strong demand for early sales 
of its future developments particularly from purchasers 
in the far east such that the number of sales secured 
by contracts exchanged in the year has increased to 
368 2010 253 as a result of this and continued sales 
of affordable housing to our housing association partners 
the group has revenue secured by contracts exchanged 
of over £135 million to flow into the business over the  
next three years
sales and completions
telford homes is in the middle of a two year period 
during which the number of open market homes being 
finished is lower than capacity the group refrained from 
investing in new land during the recession and given the 
average construction period for a development is two 
years this is affecting the number of homes available  
for sale and legal completion up to the middle of 2012 
therefore the decline in the number of open market 
completions in the year to 31 march 2011 is caused more 
by the reduced supply of finished homes than by market 
demand or the ability to make sales overall sales 
performance has been better than expected due to the 
successful offplan marketing of developments that are 
due to be finished between mid2012 and mid2014
profit margins in the year to 31 march 2011 have been 
affected by changes made during the recession to 
favour affordable housing and by impaired open market 
developments that were acquired by the group in 2006 
and 2007 as expected this combination of reduced 
supply of finished open market homes and lower profit 
margins has brought total profits in the business down 
the impact of both will continue into the year to 
31 march 2012 such that the board expects profit 
before exceptional items to be similar yearonyear 
almost all of the developments that switched to 
affordable housing and those impaired by prices falling 
during the recession will have worked through the 
development pipeline by the end of the new financial year
the rate of sales of finished homes to uk buyers  
has remained steady and visitor levels to the group’s 
sales centres have been consistent during the year 
construction of the third and final phase of queen 
mary’s gate in woodford finished towards the end  
of 2010 and we now have fewer than 60 homes left  
to sell out of nearly 500 across the development in 
september 2010 the group acquired the royal bank  
of scotland’s 50 per cent interest in telford homes 
creekside limited the joint venture set up to develop 
greenwich creekside this development is undergoing  
a period of phased handovers and over half of the  
121 open market homes in the first phase have now 
been handed over to their purchasers
the availability of mortgage finance for new build 
properties remains the most significant restriction  
on demand in the uk and this is particularly true for first  
time buyers bank of england statistics show mortgage 
approvals have been continuing at a steady rate albeit at 
just 40 per cent of the long term average whilst there 
have been some signs of improvement in the number 
of mortgages available the council of mortgage 
lenders expects gross lending for housing to be 
unchanged in 2011
chief executive’s 
review
andrew wiseman ba hons fcma
the group has revenue secured by 
contracts exchanged of over £135 
million to flow into the business 
over the next three years
45 
increase in open  
market sales
contracts exchanged
year in review
tel ford homes plc  annual report  accounts 
for the year ending 31 march 2011 10
tef2681  ar11 front aw02indd   10 13062011   1048 avantgarde 
shoreditch 
e1
computer generated images of avantgarde  
a development of 257 open market homes 
103 affordable homes and commercial space 
near bishopsgate
year in review
11
tef2681  ar11 front aw02indd   11 13062011   1048 chief executives review continued
alongside a steady uk market overseas launches 
including matchmakers wharf e9 the hawksmoors e1 
and in april and may 2011 avantgarde in shoreditch 
have been very successful avantgarde is located just  
a few minutes from liverpool street station and over 
120 offplan sales have been secured with buyers in 
the far east an unprecedented performance for this 
type of development there has been equally strong 
offplan demand in the recovering london market 
such that in total over 170 of the 257 open market 
homes have been sold in just two months of initial 
marketing construction is underway and handovers  
will take place from late 2013 onwards
the majority of overseas sales are secured with a 20 
per cent deposit either all paid at contract exchange  
or paid in stages not later than one year before 
completion this provides the group with equity to be 
used for further site acquisitions and the repayment of 
debt the group will continue to market appropriate 
developments overseas to secure revenue that will  
be recognised on legal completions in future years
partnerships and affordable housing
telford homes remains a grant partner of the  
homes and communities agency “hca” and has now 
completed the first four developments under its 2008 
to 2011 grant agreement the group has received £551 
million out of a total grant allocation of £729 million and 
the vast majority of the remainder will be received 
by march 2012 as affordable homes are completed in 
accordance with their construction programmes
the group has a secured revenue stream contracted for 
the affordable housing on all of its current developments 
and is now developing a greater proportion of open 
market housing such that it is not reliant on future 
uncertain grant funding new opportunities are 
appraised on a conditional basis until the value and 
amount of affordable housing required is clear
the spending review has had a significant impact on 
the new four year affordable housing grant programme 
for 2011 to 2015 central funding for new projects is 
expected to be around 25 per cent of the total grant 
allocation for 2008 to 2011 and housing associations 
have been invited to close the funding gap by charging 
higher rents to new tenants under the new ‘affordable 
rent’ model this will only partially substitute for the 
reduction in government funding and therefore less 
affordable housing will be built 
there remains a housing shortage in london and 
telford homes will continue to work with both the hca 
and the local authorities to address the need for new 
housing developments to be brought forward and to 
provide affordable housing whilst ensuring that each 
new development remains financially viable
l and acquisition
the developments in the group’s ownership during 
2008 and 2009 were in good locations and were flexible 
in terms of housing mix such that write downs were 
less than three per cent of total assets and profitable 
development could proceed with increased levels of 
affordable housing however the impact of not investing 
in new sites during the recession albeit a necessity at 
the time is now being felt in terms of reduced output
in february 2010 telford homes raised £72 million  
of equity through a placing of new shares to bolster  
the group’s ability to purchase land in addition to this 
the board was delighted to sign a three and a half year 
£70 million banking facility with the royal bank of 
scotland hsbc and santander on 31 march 2011  
the process to secure this finance involved a year of 
extensive investigation of every aspect of the business 
and its financial position it is great credit to telford 
homes that at the end of this process these three major 
banks are prepared to support the group to this extent
£551 million 
of grant funding  
received to date
year in review
tel ford homes plc  annual report  accounts 
for the year ending 31 march 2011 12
tef2681  ar11 front aw02indd   12 13062011   1049 greenwich  
creekside 
greenwich  
se8
a development of 242 open market homes  
129 affordable homes and commercial space 
close to the centre of greenwich
year in review
13
tef2681  ar11 front aw02indd   13 13062011   1049 the new banking facility provides significant headroom 
for future investment but even without this finance 
the group has been acquiring land the successful 
partnership with eastend homes to develop new homes 
across several estates in tower hamlets continues and 
during the last twelve months the group has exercised 
options to purchase eight sites to provide 141 new open 
market homes the group’s partnership with poplar 
harca also resumed in the year with contracts in place 
for the development of four sites
the group’s development pipeline is the total number 
of properties not yet legally completed that are to be 
constructed on land in its ownership or held under 
option contracts a significant number of affordable 
homes 400 have been completed during the year 
with revenue and profit having been recognised over 
the entire construction period the total number of 
properties in the pipeline was 1904 at 31 march 2011 
2010 2370 with finance in place to significantly add to 
this over the next few years on 27 may 2011 the group 
exchanged contracts with eastend homes to develop 
209 new homes on the holland estate on commercial 
street e1 increasing the number of properties in the 
development pipeline to over 2100
all of the group’s developments have planning permission 
and the group is careful to limit its exposure to planning 
risk especially given uncertainty over future planning 
policy and the impact of ‘localism’ the new homes bonus 
introduced by the coalition government is valuable to local 
authorities and it is hoped that this will encourage a more 
pragmatic approach to planning policy where appropriate 
telford homes is working with several landowners to 
secure planning for developments that are not yet 
under the group’s control 
operations
few developers possess the expertise and experience 
of telford homes in east london the quality of the 
group’s developments both in design and construction 
has been recognised by many awards in the last year 
including two special commendations from the london 
evening standard 2010 homes and property awards 
and two national housebuilding council awards
an independent survey of the group’s customers 
throughout 2010 resulted in a 97 customer 
recommendation rate a record high the reasons 
include the quality of the finished apartments the lack  
of defects and the high level of customer service 
provided once again the board extends its gratitude 
to each of the group’s employees without whom the 
excellent standards maintained across every part of 
the business would not be possible
board changes
i am standing down as chief executive with effect  
from 30 june 2011 and i look forward to returning as 
executive chairman in 2012 at that time i will take on 
special responsibility for land acquisition alongside the 
normal responsibilities of the chairman i look forward 
to remaining with telford homes for many years to 
come working alongside jon distefano as he steps into 
the role of chief executive i would like to thank david 
holland for his significant contribution to the business  
in his ten years as nonexecutive chairman and i am 
pleased that he will also remain on the board as the 
senior nonexecutive director 
i am also delighted to announce the appointment of 
katie rogers as our new financial director with effect 
from the annual general meeting on 14 july 2011 katie 
has been with telford homes for three and a half years 
and is currently the group’s financial controller she has 
been instrumental in securing the new banking facility 
and is well known to the group’s bankers
chief executives review continued
400  
affordable homes 
completed during the year
year in review
tel ford homes plc  annual report  accounts 
for the year ending 31 march 2011 14
tef2681  ar11 front aw02indd   14 13062011   1049 vellu m 
walthamstow  
e17
a development of 66 open market 
homes in a new mixed tenure 
home zone near blackhorse road 
underground station in walthamstow
year in review
15
tef2681  ar11 front aw02indd   15 13062011   1049 current trading and outlook
a high level of sales has been maintained throughout  
the last year due primarily to overseas presales since 
1 april 2011 this trend has continued and with the 
successful launch of avantgarde the group has already 
sold 200 open market homes in the new financial  
year of which over 130 have been secured by  
exchanging contracts
profits are expected to remain at a similarly reduced 
level in the year to 31 march 2012 but the developments 
that switched to affordable housing or were impaired 
during the recession will be finished by the middle of 
2012 and significant growth both in output and margin 
is expected in future years the number of presales 
being achieved on developments that will be completed 
from 2012 onwards gives the board confidence in this 
expectation and as such the dividend being paid this 
year has been increased by 25 per cent to 25 pence
the group has finance in place to add to the development 
pipeline and the market in east london remains robust 
and the subject of significant and ongoing undersupply 
the 2012 olympics in london are just over a year away 
and east london can only benefit from the anticipation 
and excitement that this major event brings to the area 
let alone the substantial investment already made the 
longer term prospects for telford homes remain strong
andrew wiseman 
chief executive
31 may 2011
chief executives review continued
200 
open market sales since  
1 april 2011
building
for profit
year in review
tel ford homes plc  annual report  accounts 
for the year ending 31 march 2011 16
tef2681  ar11 front aw02indd   16 13062011   1049 17
kinetica 
dalston 
e8
a development of 41 open market homes  
25 affordable homes and commercial space 
near to the new dalston junction station
year in review
wwwtelfordhomesplcuk 17
tef2681  ar11 front aw02indd   17 13062011   1049 financial 
review
jonathan distefano ma econ aca
on 31 march 2011 the group 
signed a £70 million corporate 
banking facility which extends 
to 30 september 2014 with the 
royal bank of scotland hsbc 
and santander
a new £70 million banking facility secured on 
31 march 2011 has ensured that telford homes is  
able to continue existing developments and invest in 
new sites to enhance the longer term development 
pipeline in addition the group has recently agreed 
terms with hsbc to finance the joint venture that is 
responsible for avantgarde and as such will have 
finance in place for every one of its developments 
operating results
revenue fell to £1211 million 2010 £1593 million  
with gross profit before exceptional items of £154 
million 2010 £210 million gross profit is stated after 
expensing loan interest that has been capitalised within 
inventories of £29 million 2010 £53 million and before 
charging this interest the gross margin in the year was 
151 per cent compared to 165 per cent last year 
the reductions in revenue and margin are primarily 
due to lower output of finished homes and a higher 
than normal proportion of affordable housing under 
construction both of which were as anticipated
profit margins will remain lower than usual next year 
but the impact of those sites that were impaired by 
the effects of the recession will have been almost fully 
accounted for in twelve months time and as such the 
group will be back to more normal margins for the  
year to 31 march 2013
the operational teams continue to monitor and  
control development costs with a focus on achieving 
cost savings wherever possible while maintaining 
good relationships with all suppliers some savings 
have been made in the light of reduced development 
activity in london although raw material costs can  
be volatile and occasionally the group holds stock  
of materials such as steel to maximise the benefit 
when prices are lower
administrative expenses have remained under  
close control and have fallen to £93 million 2010 
£97 million mainly due to lower employee bonus 
payments selling expenses have increased by 42  
per cent to £27 million 2010 £19 million in line with 
the increase in the number of contracts exchanged  
in the year overseas selling events are a significant 
investment regardless of the level of success but 
where a large number of sales are secured this is 
reducing the marketing expenditure needed in  
the future unfortunately the required accounting 
treatment for selling expenses does not enable the 
group to match revenues with costs in relation to 
overseas events the costs must be expensed as 
incurred even though profit recognition from any  
sales made is two to three years in the future
exceptional items
on 17 september 2010 the group acquired the other 50 per 
cent of telford homes creekside limited the joint venture 
set up to develop greenwich creekside from the royal 
bank of scotland their interest was acquired for the sum  
of £500 with all existing equity injected by the bank being 
converted to debt as a result the group recognised a 
‘bargain gain’ of £511000 on the acquisition representing 
the value of 50 per cent of the net assets of telford homes 
creekside limited on 17 september 2010 less the £500 
purchase price this gain is shown as an exceptional item  
in the income statement to 31 march 2011 the exceptional 
items reported in the year to 31 march 2010 of £08 
million were primarily write downs to the value of  
land and work in progress
£70 million 
banking facility signed
year in review
tel ford homes plc  annual report  accounts 
for the year ending 31 march 2011 18
tef2681  ar11 front aw02indd   18 13062011   1049 chandl ers keep 
fletcher street 
e1
a development of 17 open market homes  
on the st georges estate the second estate 
regeneration project with eastend homes
year in review
19
tef2681  ar11 front aw02indd   19 13062011   1049 financial review continued
interest
the total borrowings of the group reduced from £708 
million to £649 million at 31 march 2011 and interest paid 
in the year reduced from £35 million to £27 million the 
security of funding provided by the new longer term 
banking facility attracts a higher rate of interest at 35 
per cent over libor and this will increase the average 
rate of interest paid on borrowings in the new financial 
year the benefits of the new facility far outweigh this 
increased cost and the rate is competitive in the current 
market compared to other developers
for the first time the board has agreed to take  
out some protection against future interest rates 
although the board does not believe significant rate 
rises are likely in the near future the cost of interest 
rate protection is currently quite low for the same 
reason and as such it is worth investing a small 
amount to protect the business and ensure that 
interest cover covenants remain achievable the group 
has purchased a cap on libor of three per cent on 
£30 million of debt which expires in september 2014 
the cost of this cap was £290000 paid up front and 
this will be expensed over the term of the product
interest charged to the income statement includes 
£29 million in cost of sales 2010 £53 million and a 
further £11 million of finance costs 2010 £17 million 
mainly as a result of suspending the capitalisation of 
interest on certain sites that were not progressing in 
terms of design or construction for parts of the year
dividend
the board has decided to propose a final dividend of  
125 pence which together with the 125 pence interim 
dividend paid on 14 january 2011 makes a total dividend 
for the year of 25 pence 2010 20 pence this increase  
is in line with the board’s stated intention of paying a 
yearonyear progressive dividend in line with the business 
building the foundations for future profit growth
the final dividend is expected to be paid on  
22 july 2011 to those shareholders on the register  
at the close of business on 24 june 2011
balance sheet
net assets at 31 march 2011 were £647 million increased 
from £631 million last year net assets per share were 
1321 pence and the share price on 31 march 2011 
represented just 58 per cent of that value per share 
31 march 2010 71 per cent the group has remained 
profitable increased its volume of sales due to preselling 
developments that will complete in future years and 
secured finance for the next three and a half years  
and hence the board believes the current share price  
to be significantly undervalued
cash balances remain high at 31 march 2011  
at £188 million although down from £336 million  
last year this balance includes operational balances  
of £127 million and grant monies held for future 
expenditure of £61 million the cash balance was 
inflated on the final day of the year by the first 
drawdown under the new banking facility which 
generated funds over and above the repayment  
of previous facilities of £71 million
cash balances were expected to reduce over the  
year both through ongoing expenditure of grant 
monies held and also through investment of the 
placing funds received in march 2010 the cash flow 
statement shows that the group has made a net 
investment in working capital this year as opposed to 
the significant reduction in work in progress last year
on 30 september 2010 the group announced that it 
had repaid all of the outstanding loan notes in relation 
to the acquisition of clifford contracting which took 
place in june 2009 this acquisition provided a form  
of finance against unsold properties and would have 
been available until 30 september 2011 the rate of 
sales being secured resulted in the board concluding 
that the funding was no longer required the early 
redemption of the loan notes saved £300000 of 
interest and the group repurchased and cancelled  
the 1130089 shares that formed part of the 
transaction for a total sum of £1
cash management and cash flow 
forecasting
control of cash remains important and a detailed 
monthbymonth cash flow forecast is maintained as 
part of the group’s management information systems 
this enables continuous monitoring of the forecast and 
actual cash flows over a five year period the forecasts 
are necessarily subject to a number of assumptions and 
judgements and these are tested on a reasonable basis 
by sensitivity analysis these forecasts are reviewed by 
the board in detail on a monthly basis
25p 
dividend up 25
year in review
tel ford homes plc  annual report  accounts 
for the year ending 31 march 2011 20
tef2681  ar11 front aw02indd   20 13062011   1049 matchmakers  
wharf 
hackney 
e9
computer generated image and  
‘under construction’ photograph of 
matchmakers wharf a development  
of 209 homes and commercial space  
near the olympic park due for  
completion from march 2012 
year in review
21
tef2681  ar11 front aw02indd   21 13062011   1049 borrowings
net debt at 31 march 2011 was £461 million 2010 
£372 million with gearing at 712 per cent 2010 589 
per cent the board has determined that long term 
growth can be achieved at lower levels of gearing than 
those required in previous years and as such expects 
this to remain below 150 per cent consistent with debt 
being provided at 60 per cent of cost
on 31 march 2011 the group signed a £70 million 
corporate banking facility which extends to 
30 september 2014 with a club of three banks 
being the royal bank of scotland hsbc and 
santander the debt is secured against a portfolio  
of land and development sites with only greenwich 
creekside owned by a subsidiary and avantgarde 
in a joint venture with the william pears group 
remaining outside of the facility
interest will be charged on the new facility at 35 per 
cent over libor with an arrangement fee of 125 per 
cent payable in two tranches funds will be advanced 
at 60 per cent of cost and site specific funding under 
the overall facility umbrella will be repaid from the first 
65 per cent of the open market residential proceeds 
on each site the first ten per cent of any deposits 
received can be retained by the group without any 
loan repayment
there are a number of site specific loan to value 
covenants along with corporate covenants concerning 
net asset value gearing and interest cover the board 
performed a detailed assessment of these covenants 
including sensitivity analysis to ensure that they were 
appropriate when compared to current forecasts 
before signing the new facility
as part of the acquisition of the remaining 50 per cent 
of telford homes creekside limited the group secured 
finance from the royal bank of scotland to complete  
its greenwich creekside development the facility 
totals £577 million including the equity replacement 
mezzanine debt and is repayable in phases on 
31 december 2011 and 31 december 2012 to date 
£183 million of the first phase debt has been repaid
the william pears group “william pears” has recently 
become the new joint venture partner to telford homes 
in bishopsgate apartments llp which is developing 
avantgarde william pears purchased a 50 per cent 
interest from genesis housing group at cost hsbc has a 
long relationship with william pears and has just started 
a relationship with telford homes as a result the joint 
venture has been able to secure credit approval for a 
land and development facility of £459 million this facility 
will repay the existing allied irish bank loan of £15 million 
and enable the development to proceed the formal 
paperwork is expected to be signed later in june 2011 
and with significant presales secured development  
of the open market tower is already underway
these facilities combined ensure that the group has 
sufficient bank finance available for the foreseeable 
future in an environment where this is not the case for 
all of our competitors the initial drawdown under the 
£70 million facility was £319 million leaving headroom 
of £381 million and this will be utilised over the next 
three years to invest in new sites and support the 
future growth of telford homes
 
jonathan distefano 
financial director 
31 may 2011
financial review continued
total borrowings 
at 31 march by year £m
125
100
75
50
25
0
2007 2008 2009 2010 2011
building
resources
year in review
tel ford homes plc  annual report  accounts 
for the year ending 31 march 2011 22
tef2681  ar11 front aw02indd   22 13062011   1049 queen mary’s  
gate 
south woodford  
e18
a development of almost 500 homes that  
has been completed in three phases over  
a five year construction programme
23
year in review
tef2681  ar11 front aw02indd   23 13062011   1049 structure
the group now has over 2100 properties in the 
development pipeline and these properties need to be 
managed through the planning process in design and 
ultimately during construction in order to control this 
process telford homes is organised into two operating 
divisions being alto and metro 
this structure is necessary in order to manage the 
delivery of several hundred homes per annum and 
ensures management control to yield excellent design 
high standards of construction and delivery on programme 
each division predominantly specialises in certain sizes 
of development and styles of construction
mark parker and john fitzgerald jointly take on the 
roles and responsibilities of group managing director 
mark parker is responsible for metro and john fitzgerald is 
responsible for alto and each division has a management 
team responsible for daytoday operations
sales and marketing land acquisition partnerships 
customer service finance and buying are regarded as 
core central services that deliver economies of scale in  
a relatively small geographic region by remaining 
outside of the divisional structure
development 
pipeline
over 2100 properties
year in review
tel ford homes plc  annual report  accounts 
for the year ending 31 march 2011 24
tef2681  ar11 front aw02indd   24 13062011   1049 l ocal 
apprentices
30 local apprentices in five years
training and 
apprenticeships
building
knowledge
telford homes operates in an industry sector where 
uptodate qualifications standards and knowledge 
are vital to the safe and successful operation of the 
business the group has a supplychain of partners 
that provide all the necessary design and building 
services to complete each development the group 
has established an ‘apprentice trainee’ strategy that  
is propagated through its supplychain by delivering 
apprenticeships that provide a quality of training 
sufficient to give each apprentice the opportunity for 
long term employment over the last five years the 
group along with its partners has assisted over 30 
local apprentices to gain a valuable qualification  
within the construction industry 
the group also operates a comprehensive management 
trainee programme under which trainees from school 
or college are employed annually trainees are taken 
on in each of the operational departments and are 
often based on site they are enrolled on college 
courses funded by telford homes for a minimum  
of four years with encouragement to progress to 
complete a construction or surveying degree a 
combination of college based training and on the  
job training alongside experienced staff allows the 
apprentices and trainees to develop technical as  
well as personal skills 
with a constant flow of new apprentices and trainees 
developing their skills and being promoted telford 
homes has developed a highly skilled workforce that  
is benefiting from updated industry knowledge 
combined with practical on the job training
the group puts training at the heart of its  
operations ensuring its employees maintain their 
industry knowledge training is seen as a necessity  
and it is important to continually assess training needs 
whilst anticipating changes in the external environment 
that will dictate new skills and knowledge that our 
employees may need the focus on high quality 
industry specific training allows the group to have  
a fresh approach and the board views training 
particularly through apprenticeships as an essential 
investment in the future of the group and the future  
of the construction industry 
year in review
wwwtelfordhomesplcuk 25
tef2681  ar11 front aw02indd   25 13062011   1049 health and safety
the group received a gold 
award for health and safety 
at the royal society for the 
prevention of accidents 
awards 2011
the health safety and wellbeing of every person 
involved in or affected by our business is fundamental 
to our operations we promote a positive safety culture 
and communicate this to all employees and everyone 
working on our sites ensuring that health and safety 
procedures are understood by recipients identify all 
the relevant risks and dangers that are likely to be 
encountered in the course of their work and set out  
the appropriate precautionary measures 
we invest in the training and development of our people 
with the continuation of our ‘health and safety core’ 
training programme this programme ensures that all 
employees and in particular those deemed as ‘safety 
critical’ have the appropriate skills and level of training we 
demand that our suppliers employ competent people and 
encourage continual professional development of those 
holding safety critical posts to support this process we 
have established and held subsidised onsite training 
specifically for their employees 
our accident frequency rate for the year to 
31 march 2011 was in line with the industry average  
the majority of our accidents over the last few years 
have arisen as a result of the behavioural failings of 
those injured in an attempt to improve this situation  
we have instigated a programme of simple solutions  
to make people consciously aware of themselves 
and their interaction with their workplace 
our health and safety management system  
accredited to bs ohsas 180012007 continues  
to be audited every six months by the british standard 
institution bsi in accordance with their stringent auditing 
processes in addition the company received a gold award 
for health and safety and a silver award for the management 
of occupational road risk at the ‘royal society for the 
prevention of accidents’ rospa awards 2011 the rospa 
awards and the bsi certification recognise the maturity of 
our occupational health and safety management system 
and the culture of the company 
hours worked
1450000 man hours worked across 
all developments in the year
year in review
tel ford homes plc  annual report  accounts 
for the year ending 31 march 2011 26
tef2681  ar11 front aw02indd   26 13062011   1049 building
safely
our ‘executive safety committee’ and ‘operational 
safety forum’ continue to meet regularly and to be 
instrumental in developing significant changes to 
the way health and safety is managed 
our ‘supplychain’ procedure remains in place with all of our 
suppliers vetted by the health and safety department in a 
climate where businesses are cautious and resources are 
under pressure several of our suppliers have struggled and 
some have ceased trading as part of our vetting procedure 
the commercial viability of each supplier is scrutinised in an
attempt to ensure they are able to meet their obligations 
our operational teams expect the highest health and safety 
standards from each supplier and this is considered during 
the tender process for new work we continually monitor 
our suppliers and take the necessary steps to ensure they 
meet our high expectations
john fitzgerald and mark parker remain responsible 
for health and safety in each of the operating divisions 
and john fitzgerald is the board member with overall 
responsibility for health and safety
given market conditions and the cautious approach 
being observed by the industry our overall health and 
safety performance has been excellent and stands us 
in good stead for the future
steve nicoll
group health  safety manager
year in review
wwwtelfordhomesplcuk 27
tef2681  ar11 front aw02indd   27 13062011   1049 environment and 
sustainability
telford homes is committed to designing and 
constructing developments that both minimise 
ecological impact and improve energy efficiency the 
group has an environmental policy and we ensure that 
this is communicated throughout our operations our 
environmental policy and environmental management 
system is regularly reviewed to ensure the prevention  
of pollution and compliance with relevant legislation  
we have commenced the accreditation process  
with the british standards institute to certify our 
environmental management system to bs en iso 
140012004
the materials used in our developments  
contribute to our environmental performance  
we reuse recycle and adopt renewable materials 
wherever viable and continually look for new ways  
to meet and exceed environmental expectations in all  
of our activities for example the use of aggregates 
and crushed concrete in filling excavations and 
procuring core materials such as timber from 
responsible organisations that have established 
processes to validate its environmental credentials
we have adopted the building research establishment 
smarter
©
 waste programme which not only  
records waste but also energy  timber usage 
the majority of our sites benefit from low energy 
lighting methods of reducing internal water usage 
including flow restrictors and dual flushes recycling 
facilities cycle storage and local transport links in 
addition we use both established and cutting edge 
technologies to improve the energy efficiency of our 
developments once they are occupied 
some of the technologies we currently operate 
include 
biomass
boilers fuelled by recycled timber pellets or alternative 
fuels such as rapeseed oil and biodiesel are used 
to complement gas fired boilers in order to feed an 
energy efficient communal heating system in some 
of our larger developments 
biomass plant is currently being used or will be  
used at greenwich creekside onestratford sobow 
avantgarde matchmakers wharf bow trinity  
vellum and lanrick road
combined heat and power plant chp
a fuel source typically gas is burnt to provide heat to 
drive a turbine or stirling engine in order to generate 
electricity to power lighting and appliances or for 
export to the national grid the same heat passes 
through a heat exchanger to generate domestic 
heating and hot water for a communal system 
currently associated only with communal systems 
this technology is the subject of rapid development 
and small plant for individual houses and apartments 
will soon be commercially available
a chp is being incorporated at avantgarde and is 
being considered for future developments
accreditation 
process begun
with the british standards institute  
to certify our environmental 
management system to  
bs en iso 140012004
year in review
tel ford homes plc  annual report  accounts 
for the year ending 31 march 2011 28
tef2681  ar11 front aw02indd   28 13062011   1049 photovoltaics pv
pv panels convert light energy into electricity in  
order to provide lighting to the development current 
innovations in pv include solar tiles and transparent 
panels for incorporation into walls government feed  
in tariffs are encouraging inclusion of this technology 
by offering guaranteed payments to the panel owner 
in return for the reduction in electrical load on the 
national grid
pv panels are installed or will be installed at stadthaus 
bow trinity st anne’s st george’s estate trades hall 
in leyton and high cedars in wanstead
solar thermal
solar thermal panel heaters use radiant energy  
from the sun to heat water there are two types of 
collectors for solar heating  flat plate and evacuated 
tube the collectors are connected to the plumbing 
system of individual apartments and complement a 
high efficiency boiler to deliver domestic hot water  
and heating
this technology is in use at stadia in leyton  
and icona in stratford
air source heat pumps
air from within the dwelling or from outside is put 
through a process of evaporation compression 
condensation and expansion via a small electric pump 
this releases heat from the air that is used to raise 
the temperature of water for domestic use and for 
underfloor heating
air source heat pumps are used or will be used  
at decorum in leyton st anne’s avantgarde  
and the st george’s estate
wind power
wind turbines are the most visible of all renewable 
technologies they are installed on the outside of  
a building and turn generators in order to produce 
electrical energy for use in the building or for export  
to the national grid
a wind turbine has been installed at kinetica and 
another is planned at avantgarde
building
sustainability
year in review
wwwtelfordhomesplcuk 29
tef2681  ar11 front aw02indd   29 13062011   1049 key risks and uncertainties
economic environment
demand for properties from both investors and  
owner occupiers is dependent on confidence in both 
the local housing market and the wider economy  
this confidence is heavily influenced by factors such  
as interest rates the availability of mortgage finance 
rental incomes unemployment and increasing 
consumer costs for other goods and services  
all of these are outside of the group’s control
the group’s policy has been to sell early in the 
development process wherever possible to 
minimise the risk in each site this policy has been 
very successful to date and presales are still being 
secured with both housing associations and overseas 
buyers in addition the sales and marketing team 
have detailed knowledge of the local market and 
are able to formulate the best sales strategy for 
each development and to work with purchasers and 
prospective purchasers to ensure that all stages of 
the process from reservation to legal completion run 
as smoothly as possible
l and acquisition
the group needs new land to maintain a development 
pipeline and to enable the business to continue to 
operate at a certain capacity this land needs to be 
sourced in appropriate locations and where optimum 
planning consents can be obtained the appraisal 
process that determines the price paid for land is 
critical in maintaining margins and return on equity  
at acceptable levels 
the l and acquisition and partnerships team  
are responsible for sourcing land and our strong 
relationships with various land owners including 
local authorities and affordable housing providers 
play a key role in our ability to acquire new sites  
in particular our existing partnerships with housing 
transfer organisations are expected to continue  
to be a significant source of land in the next 
few years the appraisal process for new sites 
includes due diligence by an experienced solicitor 
and authorisation of all prospective purchases at 
appropriate levels
planning process
the flow of properties through the development 
pipeline is dependent on achieving suitable planning 
permission on sites purchased without planning or 
subject to planning the process is time consuming 
and involves an increasing number of supporting 
reports and detailed consultations with many 
different bodies delays in achieving suitable planning 
permissions affect the number of properties that 
can be brought to market and impact on the timing 
of future cash flows failure to achieve a suitable 
planning permission may lead to cost write offs or 
reduced margins on individual developments
telford homes has extensive knowledge of local 
planning requirements excellent relationships 
with planning authorities and takes care in the 
appointment of professional architects planning 
consultants and engineers early consultations 
with the planning authorities are a key part of the 
land acquisition process while this cannot remove 
planning risks it mitigates them as much as 
possible all of the sites currently owned by  
the group have the benefit of a full planning 
permission the board ensures that the group 
is not overexposed to planning risks by limiting  
the total investment in sites without a planning 
permission at any one time
cash requirements and bank finance
property development is a capital intensive business 
with significant initial outlays supported by bank 
finance and lengthy time periods before the majority 
of the cash inflows on each project forecasting 
of cash flows is critical to ensure the group is not 
operating beyond its financial capacity part of this 
process involves the forecast of bank funding for 
each development and the availability of sufficient 
bank finance is therefore also of critical importance
telford homes maintains a detailed cash flow 
forecast as part of its management information 
systems this extends five years into the future 
and is subject to continual reassessment and 
sensitivity analysis the cash flow position is 
reviewed by the board and by each of the group’s 
banking partners on a monthly basis telford 
homes has excellent relationships with the banks 
funding the business and has sufficient facilities 
available to ensure the continuing operation of 
the business 
year in review
tel ford homes plc  annual report  accounts 
for the year ending 31 march 2011 30
tef2681  ar11 front aw02indd   30 13062011   1049 construction
the construction process is critical to the efficient 
and timely delivery of properties to purchasers which 
affects both cash flow and customer satisfaction  
the quality of the construction work and finish 
in each property affects the reputation of the 
group and can impact on repeat purchase and 
recommendation rates 
standards of construction and control of the 
building process on site are of paramount 
importance to each operating division careful 
planning is required to assess a development 
programme before construction commences 
and this is monitored over the course of the 
building work the construction teams work very 
closely with the customer service team and their 
interaction commences at an early stage in the 
development the customer service team spend  
a substantial proportion of their time on site 
carrying out quality control before a purchaser 
sees the property for the first time
availability of materials and labour
the availability of materials and subcontracted 
labour for each site can affect both the construction 
programme and the cost of construction build cost 
inflation will impact directly on the margin achieved  
on each site where this is in excess of forecasts
planning of the construction programme and  
timely management of the tender process for each 
subcontracted trade reduces the risk of delays in 
the construction programme due to availability of 
materials and labour the tender process ensures 
that competitive rates are achieved on every trade 
telford homes works in partnership with all of its 
subcontractors and makes timely payments to 
encourage an equal relationship that is beneficial  
to all parties
 
health and safety
construction sites are dangerous places and there 
are many different health and safety risks to consider 
the health and safety of everyone associated with 
telford homes both employees and subcontractors 
is the first priority of the group
investment in training the promotion of health 
and safety to all employees and extensive policies 
and procedures all contribute to a comprehensive 
approach to health and safety management with 
the objective of minimising risk and providing  
a safe working environment 
political environment
changes in laws and regulations can have a direct 
impact on the efficient running of the group and  
the costs incurred on each development changes  
in both local and national government can have a  
direct bearing on the regulatory environment
telford homes works closely with specialist 
consultants to ensure that it is up to date with 
current regulations and aware of any future  
changes so that operations can be 
planned accordingly 
year in review
wwwtelfordhomesplcuk 31
tef2681  ar11 front aw02indd   31 13062011   1049 board of directors
david holland has over 40 years 
experience in the development 
and house building sector having 
joined george wimpey plc in 
1966 on his retirement he held 
the position of group managing 
director with responsibility for 
worldwide housing and land 
development in 1997 david held 
the annual position of president 
of the house builders federation 
david was appointed non
executive chairman of telford 
homes plc in december 2001 and 
advises on all development issues 
and matters of strategic planning 
he chairs the remuneration 
committee and is a member  
of the audit committee
david durant is a cofounder 
of telford homes plc and has 
over 30 years experience in the 
construction and house building 
sectors including 14 years at 
furlong homes where he was 
group technical director from 
1997 to 2000 david had been 
group managing director since the 
start of the company’s operations 
in 2001 in 2005 he supervised 
devolving responsibility for the 
finished telford homes product 
into two divisions in order to 
handle the high level of growth in 
units under construction david’s 
role is focused on major planning 
consents product design and 
maintaining key partnerships 
jon distefano joined telford 
homes plc as financial director 
in october 2002 he had one 
year with mothercare following 
five years with arthur andersen 
apart from financial matters jon 
also has board responsibility 
for human resources there has 
been extensive growth in both 
areas and jon has developed a 
significant finance team the role 
jon has played in nurturing the 
trust and support of our banking 
partners with the constant high 
quality of his financial reporting 
and in developing relationships 
with institutional investors through 
regular presentations has proved 
invaluable to the success of 
telford homes 
nonexecutive chairman 70
david holland
andrew wiseman together with 
close colleagues founded telford 
homes plc in december 2000 
following ten years with furlong 
homes plc initially as financial 
director then as chief executive 
for the final three years prior to 
1990 his experience had been 
gained in various sectors including 
seven years with bat industries 
plc andrew spearheaded the 
successful flotation of both furlong 
homes plc and telford homes 
plc on aim the former on the 
launch of aim in 1995 and the 
latter in december 2001 building 
on excellent relationships with 
institutional investors andrew 
has been especially involved in 
the cementing of relationships 
between telford homes plc and 
affordable housing providers 
which have been central to the 
growth of the company 
chief executive 54
andrew wiseman ba hons fcma
financial director 36
jonathan distefano ma econ aca
group planning  design director 49
david durant
telf ord ho mes plc  annual report  accounts 
for the year ending 31 march 2011 32
corporate governance
tef2681  ar11 middle aw02indd   32 13062011   1053 john fitzgerald iciob
jim furlong has over 40 years 
experience in all aspects of the 
construction and building industry 
through his involvement in roofing 
civil engineering construction 
and house building companies 
which all bore the ‘furlong’ name 
prior to joining telford homes as 
land director jim was a driving 
force within furlong homes where 
he was chairman with specific 
responsibility for land acquisition 
jim’s wide experience of land 
acquisition played a central role in 
the initial growth of telford homes 
robert clarke was a partner in 
binder hamlyn and subsequently 
arthur andersen until his 
retirement in 2000 robert joined 
telford homes plc as a non
executive director at the time of 
the aim flotation in december 2001 
and he has been influential in the 
fields of corporate governance  
and strategic direction he has 
also been a nonexecutive director 
of various other public and 
private companies and served on 
committees of national charities 
robert is chairman of the audit 
committee and a member of the 
remuneration committee
john fitzgerald began his 
career in 1987 with willmot 
dixon construction followed by 
willmot dixon housing he has 
over 20 years experience in the 
construction and house building 
sector and spent the four years 
prior to joining telford homes as 
project and contract manager 
with furlong homes where he was 
responsible for some of their more 
prestigious developments he 
joined telford homes in february 
2003 and was jointly responsible 
for construction until march 2005 
when following restructuring 
he was appointed divisional 
managing director of telford 
homes alto where he has built a 
very successful team john was 
appointed a director on 1 august 
2007 and is the director with 
responsibility for health and safety 
throughout the business
mark parker joined the wimpey 
group as a management trainee 
in 1981 and spent the following 
21 years with various wimpey 
divisions culminating in the post of 
construction director for mcalpine 
homes east he spent the next 
three years as one of the two 
initial directors of the new north 
london division of kingsoak homes 
appointed as construction director 
he was involved in all aspects of the 
new division from land acquisition 
to sales and customer care mark 
joined telford homes in february 
2005 as divisional managing director 
of telford homes metro and has 
been influential in developing 
strong partnerships with housing 
associations mark was appointed a 
director on 1 august 2007 and jointly 
with john fitzgerald has taken on the 
duties and responsibilities of group 
managing director
l and director 75
james furlong
sheena ellwood joined telford 
homes plc as sales  marketing 
director in january 2003 prior 
to this her experience comes 
from consumer goods export 
with the maxwell group and 
hallmark corporation including 
two years in the usa followed 
by eight years as regional 
sales  marketing director for 
wimpey homes sheena has 
developed an extensive sales 
 marketing team at telford 
homes plc and set up a customer 
service department that plays 
an important role in building 
and maintaining relationships 
with our individual customers 
whether owneroccupiers uk  
or overseas investors 
sales  marketing director 52
sheena ellwood  
ba hons dip int marketing
nonexecutive director 68
joint group managing director 40
joint group managing director 48
robert clarke fca
mark parker bsc hons mciob
wwwtelfordhomesplcuk 33
corporate governance
tef2681  ar11 middle aw02indd   33 13062011   1053 telf ord ho mes plc  annual report  accounts 
for the year ending 31 march 2011 34
corporate governance
policy on corporate governance
application of principles
although not formally required to do so the directors have sought to embrace the principles contained in the 
combined code 2003 the code and its 2008 revised version applicable to fully listed companies in formulating 
and applying the group’s corporate governance policies these policies are monitored to ensure that they are 
appropriate to the group’s circumstances and comply as far as possible with the provisions of the code given 
the size of the group 
directors
the company and group are managed by a board of directors and they have the necessary skills and experience 
to effectively operate and control the business there are nine directors in total of whom two are nonexecutive 
directors david holland and robert clarke the nonexecutive directors are considered independent and they 
comprise both the audit and remuneration committees the board meets once a month and the directors make 
every effort to attend all board meetings
the board is responsible for taking all major strategic decisions and also addressing any significant operational 
matters in addition the board reviews the risk profile of the group and ensures that an adequate system of 
internal control is in place management information systems are in place to enable the directors to make 
informed decisions to properly discharge their duties
the roles of the chairman and the chief executive are separate the chairman is responsible for running the 
board and he meets regularly and separately with the chief executive and the other nonexecutive director to 
discuss matters for the board
as the business has developed the composition of the board has been under constant review to ensure that it 
remains appropriate to the managerial requirements of the group one third of the directors retire annually in 
rotation in accordance with the company’s articles of association this enables the shareholders to decide on 
the election of the company’s board
the board takes decisions regarding the appointment of new directors as a whole and this is only done  
following a thorough assessment of a potential candidate’s skills and suitability for the role new directors are 
given a full induction to the group where required so as to ensure they can properly fulfil their role and meet 
their responsibilities
all directors are offered appropriate coaching and training to develop their knowledge and ensure they remain 
up to date in relevant matters for which they have responsibility as a member of the board
the chairman’s statement and chief executive’s review included in this annual report give the board’s current 
assessment of the group’s prospects the directors are responsible for preparing the financial statements as set 
out in the statement of directors’ responsibilities the responsibilities of the auditors are set out in their report
r emuneration committee
details concerning the composition and meetings of the remuneration committee are contained in the directors’ 
remuneration report on pages 36 to 37
audit committee
during the period the audit committee which is chaired by robert clarke an independent nonexecutive director 
has met twice with the external auditors being in attendance on both occasions the nonexecutive directors 
meet separately with the auditors up to twice a year
the committee has a responsibility for reviewing the financial statements provided to shareholders in addition the 
committee reviews the business and financial risks and internal controls as described below
the duties of the committee also include ensuring that the auditors provide a cost effective service to the group 
and remain objective and independent and to consider from time to time the need for an internal audit function
tef2681  ar11 middle aw02indd   34 13062011   1053 wwwtelfordhomesplcuk 35
corporate governance
r elations with shareholders
the company has institutional shareholders and is where practicable willing to enter into a dialogue with them 
the chief executive and the financial director meet regularly with institutional investors within the confines of 
relevant legislation and guidance
the board invites communication from its private investors and encourages participation by them at the 
annual general meeting agm all board members present at the agm are available to answer questions 
from shareholders notice of the agm in excess of 21 clear days is given and the business of the meeting is 
conducted with separate resolutions voted on initially by a show of hands and with the result of the voting 
being clearly indicated
internal control
the board is responsible for the group’s system of internal control and for reviewing its effectiveness such a 
system is designed to mitigate the risk of failure to achieve business objectives and can only provide reasonable 
but not absolute assurance against material misstatement or loss
the board is of the view that there is an ongoing process for identifying evaluating and managing the group’s 
significant risks and that it has been in place for the period ended 31 march 2011 and up to the date of approval 
of the annual report and accounts and that it is regularly reviewed by the board
the internal control procedures are delegated to executive directors and senior management in the group 
operating within a clearly defined departmental structure the board regularly reviews the internal control 
procedures in the light of the ongoing assessment of the group’s significant risks
on a monthly basis management accounts including a comprehensive cash flow forecast are reviewed by 
the board in order to provide effective monitoring of financial performance at the same time the board 
considers other significant strategic organisational and compliance issues to ensure that the group’s assets are 
safeguarded and financial information and accounting records can be relied upon the board formally monitors 
monthly progress on each development
tef2681  ar11 middle aw02indd   35 13062011   1053 telf ord ho mes plc  annual report  accounts 
for the year ending 31 march 2011 36
corporate governance
directors’ remuneration report
the directors present the remuneration report for the year ended 31 march 2011
composition of the remuneration committee
the remuneration committee comprises the independent nonexecutive directors david holland and robert 
clarke the committee makes recommendations to the board on executive directors’ service agreements and 
remuneration in doing so it has undertaken relevant research to ensure that remuneration levels are competitive 
with the industry average the committee met four times during the year
r emuneration policy
it is the group’s policy to provide remuneration packages sufficient to attract retain and motivate directors of 
the quality required to add further incentive the directors have adopted two bonus schemes one applicable 
to all staff and a scheme for executive directors and senior management both schemes are dependent on the 
group meeting certain financial performance targets the maximum amount that can be earned under the 
executive bonus scheme is 100 of basic salary
the company operates a share incentive plan sip in which all employees are entitled to participate the sip exists in 
order to increase employee ownership of shares and further details are given in note 17 to the financial statements
during 2006 the company set up a deferred payment share purchase plan dpspp for the benefit of selected 
senior employees further details are given in note 17 to the financial statements the remuneration committee 
is responsible for approving any offers of shares made under the dpspp 
the board as a whole determines the remuneration of the nonexecutive directors after considering external 
market research they do not participate in the bonus schemes or in the personal pension scheme they are 
entitled to participate in the sip 
service contracts
the executive directors have service contracts that can be terminated on twelve months notice these provide 
for termination payments equivalent to twelve months basic salary and contractual benefits
the nonexecutive directors have letters of appointment that can be terminated on three months notice
directors’ emoluments
the directors’ emoluments for the year ended 31 march 2011 are as follows
salary
and fees bonus
benefits
in kind
pension
contributions
t otal
2011
t otal
2010
andrew wiseman 156250 30000 17341 15625 219216 257711
robert clarke 44500 – – – 44500 42500
david durant 136250 30000 14486 13625 194361 222684
jonathan distefano 136250 30000 22713 13625 202588 232275
sheena ellwood 136250 30000 23973 13625 203848 232333
john fitzgerald 136250 30000 22962 13625 202837 231038
james furlong 83250 30000 32951 – 146201 181089
david holland 57500 – – – 57500 55500
mark parker 136250 30000 25727 13625 205602 233505
total 1022750 210000 160153 83750 1476653 1688635
tef2681  ar11 middle aw02indd   36 13062011   1053 wwwtelfordhomesplcuk 37
corporate governance
directors’ interests in shares and share options
directors’ interests in shares are disclosed in the report of the directors
the share options held by the directors at 31 march 2011 and the movements during the year then ended were 
as follows
company
scheme
31 march 
2010 
number
granted
 in year
 number
exercised
 in year
 number
31 march 
2011 
number
exercise 
price
dates
 exercisable
jonathan distefano unapproved 60000 – – 60000 75p
1 oct 2005 to 
1 oct 2012
approved 14051 – – 14051 2135p
14 feb 2011 to
 14 feb 2018
david durant approved 14051 – – 14051 2135p
14 feb 2011 to
 14 feb 2018
sheena ellwood unapproved 59732 – – 59732 745p
20 feb 2006 to
 20 feb 2013
approved 14051 – – 14051 2135p
14 feb 2011 to
 14 feb 2018
john fitzgerald unapproved 160000 – – 160000 75p
1 oct 2005 to 
1 oct 2012
approved 14051 – – 14051 2135p
14 feb 2011 to
 14 feb 2018
mark parker unapproved 50542 – – 50542 1385p
17 may 2008 to
 17 may 2015
 approved 21660 – – 21660 1385p
 17 may 2008 to
 17 may 2015
in total the sharebased payments charge in respect of directors’ share options was £5815 2010 £6878
by order of the board
david holland 
chairman of the remuneration committee
31 may 2011
 
tef2681  ar11 middle aw02indd   37 13062011   1053 telf ord ho mes plc  annual report  accounts 
for the year ending 31 march 2011 38
corporate governance
report of the directors
the directors present their report and the audited financial statements for the year ended 31 march 2011
review of activities
the principal activity of the group is that of property development
a review of the activities and prospects of the group is given in the chairman’s statement the chief executive’s 
review and the financial review on pages 9 to 22 the group is required to prepare a business review 
incorporating comments on key performance indicators and this is covered in the review of activities and 
prospects
the primary key performance indicators are disclosed on page 8
r esults and dividends
profit after income tax for the year ended 31 march 2011 was £2292000 2010 £5319000
the directors recommend a final dividend of 125 pence per ordinary share which together with the interim 
dividend of 125 pence paid on 14 january 2011 makes a total of 25 pence for the year 2010 20 pence
going concern
the group’s business activities together with factors likely to affect its future development and performance 
are set out in the chairman’s statement and the chief executive’s review on pages 9 to 16 and the key risks and 
uncertainties affecting the group are set out on pages 30 to 31 the financial position of the group its cash flows 
and borrowing facilities are described in the financial review on pages 18 to 22 in addition note 20 to the financial 
statements includes details of the group’s financial instruments and its exposure to credit risk and liquidity risk
the directors have assessed the group’s projected business activities and available financial resources together 
with detailed forecasts for cash flow and relevant sensitivity analysis the directors believe that the group is well 
placed to manage its business risks successfully
after making appropriate enquiries the directors have a reasonable expectation that the company and the 
group have adequate resources to continue in operational existence for the foreseeable future accordingly 
the directors continue to adopt the going concern basis in preparing the annual report and accounts
substantial shareholdings
as at 18 may 2011 the company had been advised of the following notifiable interests in its ordinary share capital
number of 
shares held percentage
telford homes trustees limited 2614479 534
standard life investments 2500000 510
artemis investment management ltd 1986535 405
k p furlong 1856000 379
t d waterhouse nom r stokes 1607760 328
the shares held by telford homes trustees limited include shares held on behalf of employees under the share 
incentive plan note 17
tef2681  ar11 middle aw02indd   38 13062011   1053 wwwtelfordhomesplcuk 39
corporate governance
directors
details of the directors of the company are shown on pages 32 to 33
robert clarke mark parker and jonathan distefano retire by rotation at the next annual general meeting and 
being eligible offer themselves for reelection 
directors’ interests
the directors of the company are listed below together with their interest in the shares of the company at  
31 march 2011 and movements in the year
at 
31 march 2010
 number
share
 incentive plan 
number
market 
acquisitions
 and disposals
number
at
31 march 2011
number
andrew wiseman 2309743 4736 – 2314479
robert clarke 168477 4735 – 173212
jonathan distefano 349477 4735 – 354212
david durant 1249767 4736 8600 1245903
sheena ellwood 353745 4735 – 358480
john fitzgerald 222456 4484 – 226940
james furlong 1324152 4736 – 1328888
david holland 998477 4735 – 1003212
mark parker 172746 4566 – 177312
these interests include shares purchased under the telford homes share incentive plan sip which all 
employees including directors are eligible to participate in all shares purchased under the sip are matched 
by shares provided by the company on a one for one basis these ‘matching’ shares are also included in the 
interests stated but must remain in the sip for a period of not less than three years otherwise they are forfeited 
further details on the sip are included in note 17 to the financial statements
details of share options held by directors are given in the directors’ remuneration report on pages 36 to 37
ordinary shares
the company issued 355089 new ordinary shares and cancelled 1130089 ordinary shares during the year 
further information is disclosed in note 16
the company’s investment in own shares relates solely to the share incentive plan and further details of the total 
holding and movements in the holding are disclosed in note 17
creditors
it is group policy to settle all debts with its creditors on a timely basis subcontractors are paid upon agreement 
of the value of works completed based on their applications for payment and the terms agreed in general other 
suppliers are paid during the month following the month of receipt of the invoice unless other terms have been 
specifically agreed
at 31 march 2011 trade payables represented 18 days purchases 2010 15 days
tef2681  ar11 middle aw02indd   39 13062011   1053 telf ord ho mes plc  annual report  accounts 
for the year ending 31 march 2011 40
corporate governance
report of the directors continued
employees
the group places considerable value on the involvement of its employees and keeps them informed of all 
relevant matters on a regular basis telford homes is an equal opportunities employer and all applications 
for employment are considered fully on the basis of suitability for the job
charitable donations
the group made charitable donations of £18000 2010 £33000 these donations were made to a number  
of different charities supporting a broad range of good causes
annual general meeting
the annual general meeting will be held at the registered office at first floor stuart house queensgate 
britannia road waltham cross hertfordshire on 14 july 2011 at 3pm
auditors
a resolution to reappoint pricewaterhousecoopers llp as auditors to the company will be proposed at the 
annual general meeting in accordance with section 489 of the companies act 2006
each of the directors at the time this report was approved has confirmed the following
 y so far as each director is aware there is no relevant audit information of which the company’s auditors are 
unaware and
 y each director has taken steps that ought to have been taken as a director in order to make themselves 
aware of any relevant audit information and to establish that the company’s auditors are aware of that 
information
by order of the board
sara debenham 
company secretary
31 may 2011
 
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corporate governance
statement of directors’ responsibilities
the directors are responsible for preparing the annual report and the financial statements in accordance with 
applicable law and regulations
company law requires the directors to prepare financial statements for each financial year under that law the 
directors have prepared the group and parent company financial statements in accordance with international 
financial reporting standards ifrs as adopted by the european union under company law the directors must 
not approve the financial statements unless they are satisfied that they give a true and fair view of the state of 
affairs of the group and the company and of the profit or loss of the group for that period in preparing these 
financial statements the directors are required to
 y select suitable accounting policies and then apply them consistently
 y make judgements and accounting estimates that are reasonable and prudent
 y state whether applicable ifrs as adopted by the european union have been followed subject to any material 
departures disclosed and explained in the financial statements and
 y prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 
company will continue in business
the directors are responsible for keeping adequate accounting records that are sufficient to show and explain the 
company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 
the group and enable them to ensure that the financial statements comply with the companies act 2006 they are 
also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps  
for the prevention and detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity of the group’s website legislation in the  
united kingdom governing the preparation and dissemination of financial statements may differ from legislation  
in other jurisdictions 
 
tef2681  ar11 middle aw02indd   41 13062011   1053 telf ord ho mes plc  annual report  accounts 
for the year ending 31 march 2011 42
corporate governance
auditors’ report
independent auditors’ report to the members of t elford homes plc
we have audited the group and parent company financial statements the ‘financial statements’ of telford 
homes plc for the year ended 31 march 2011 which comprise the group income statement the group 
statement of comprehensive income the group and parent company balance sheets the group and 
parent company cash flow statements the group and parent company statement of changes in equity 
the statement of accounting policies and the related notes the financial reporting framework that has 
been applied in their preparation is applicable law and international financial reporting standards ifrss 
as adopted by the european union and as regards the parent company financial statements as applied in 
accordance with the provisions of the companies act 2006
respective responsibilities of directors and auditors
as explained more fully in the statement of directors’ responsibilities set out on page 41 the directors are 
responsible for the preparation of the financial statements and for being satisfied that they give a true and 
fair view our responsibility is to audit and express an opinion on the financial statements in accordance with 
applicable law and international standards on auditing uk and ireland those standards require us to comply 
with the auditing practices board’s ethical standards for auditors
this report including the opinions has been prepared for and only for the company’s members as a body in 
accordance with chapter 3 of part 16 of the companies act 2006 and for no other purpose we do not in giving 
these opinions accept or assume responsibility for any other purpose or to any other person to whom this report 
is shown or into whose hands it may come save where expressly agreed by our prior consent in writing
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient 
to give reasonable assurance that the financial statements are free from material misstatement whether 
caused by fraud or error this includes an assessment of whether the accounting policies are appropriate to the 
company’s circumstances and have been consistently applied and adequately disclosed the reasonableness of 
significant accounting estimates made by the directors and the overall presentation of the financial statements 
in addition we read all the financial and nonfinancial information in the annual report and accounts to identify 
material inconsistencies with the audited financial statements if we become aware of any apparent material 
misstatements or inconsistencies we consider the implications for our report
opinion on financial statements 
in our opinion 
 y the financial statements give a true and fair view of the state of the group’s and of the parent company’s 
affairs as at 31 march 2011 and of the group’s profit and group’s and parent company’s cash flows for the 
year then ended
 y the group financial statements have been properly prepared in accordance with ifrss as adopted by the 
european union 
 y the parent company financial statements have been properly prepared in accordance with ifrss as adopted 
by the european union and as applied in accordance with the provisions of the companies act 2006 and
 y the financial statements have been prepared in accordance with the requirements of the companies act 2006
tef2681  ar11 middle aw02indd   42 13062011   1053 wwwtelfordhomesplcuk 43
corporate governance
opinion on other matters prescribed by the companies act 2006
in our opinion the information given in the report of the directors for the financial year for which the financial 
statements are prepared is consistent with the financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires us to 
report to you if in our opinion
 y adequate accounting records have not been kept by the parent company or returns adequate for our audit 
have not been received from branches not visited by us or
 y the parent company financial statements are not in agreement with the accounting records and returns or
 y certain disclosures of directors’ remuneration specified by law are not made or
 y we have not received all the information and explanations we require for our audit
andrew l atham senior statutory auditor 
for and on behalf of pricewaterhousecoopers llp 
chartered accountants and statutory auditors 
st albans
31 may 2011
tef2681  ar11 middle aw02indd   43 13062011   1053 financial statements
44
group income statement
31 march 2011
note
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
revenue 121071 159338
cost of sales before exceptional items 105709 138291
exceptional items 511 710
gross profit 15873 20337
administrative expenses 9255 9691
selling expenses 2725 1920
exceptional items – 70
operating profit 1 3893 8656
finance income 3 249 333
finance costs 3 1108 1651
profit before income tax 3034 7338
analysed as
profit before income tax and exceptional items 2523 8118
exceptional items 1 511 780
3034 7338
income tax expense 4 742 2019
profit after income tax 2292 5319
earnings per share
basic 6 48p 137p
diluted 6 47p 135p
all activities are in respect of continuing operations
group statement of comprehensive income
31 march 2011
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
movement in excess tax on share options 12 14
other comprehensive expense income net of tax 12 14
profit for the year 2292 5319
total comprehensive income for the year 2280 5333
tef2681  ar11 back aw02indd   44 13062011   1050 wwwtelfordhomesplcuk
financial statements
45
balance sheet 
31 march 2011
group company
note
31 march 2011
£000
31 march 2010
£000
31 march 2011
£000
31 march 2010
£000
non current assets
investments 7 –  – 638 638
property plant and equipment 8 358 380 358 380
deferred income tax assets 13 50 109 50 109
408 489 1046 1127
current assets
inventories 9 125181 120047 58300 77953
trade and other receivables 10 14211 7638 40118 27127
cash and cash equivalents 11 18837 33642 17575 25127
158229 161327 115993 130207
total assets 158637 161816 117039 131334
non current liabilities
hire purchase liabilities 12 19 – 19 – 
19 – 19 – 
current liabilities
trade and other payables 14 28554 27065 24500 23491
borrowings 15 64877 70800 30786 46985
current income tax liabilities 431 871 – 968
hire purchase liabilities 12 16 – 16 –
93878 98736 55302 71444
total liabilities 93897 98736 55321 71444
net assets 64740 63080 61718 59890
capital and reserves
issued share capital 16 4900 4978 4900 4978
share premium 37075 37357 37075 37357
retained earnings 22765 20745 19743 17555
total equity 64740 63080 61718 59890
these financial statements were authorised for issue by the board of directors on 31 may 2011 and signed on its 
behalf by
andrew wiseman   jonathan distefano   
chief executive    financial director  
company number 4118370
tef2681  ar11 back aw02indd   45 13062011   1050 tel ford h omes plc  annual report  accounts 
for the year ending 31 march 2011
financial statements
46
statement of changes in equity
31 march 2011   
group statement of changes in equity share 
capital
 £000
share 
premium
 £000
retained 
earnings
£000
total
equity
 £000
balance at 1 april 2009 3875 30345 16085 50305
profit for the year –  – 5319 5319
total other comprehensive income –  – 14 14
dividend on equity shares –  – 295 295
proceeds of equity share issues 1103 7343 – 8446
costs arising from shares issued – 331 – 331
sharebased payments –  – 283 283
purchase of own shares –  – 312 312
sale of own shares –  – 149 149
write down in value of own shares –  – 126 126
option to repurchase own shares  –  – 624 624
balance at 31 march 2010 4978 37357 20745 63080
profit for the year –  – 2292 2292
total other comprehensive expense –  – 12 12
dividend on equity shares –  – 1227 1227
proceeds of equity share issues 35  238  – 273
sharebased payments –  –  264 264
purchase of own shares –  – 273 273
sale of own shares –  –  191 191
write down in value of own shares –  –  138 138
dividend paid on consideration shares –  –  14 14
cancellation of own shares note 22 113 520 633  – 
balance at 31 march 2011 4900 37075 22765 64740
company statement of changes in equity share 
capital
 £000
share 
premium
 £000
retained 
earnings
£000
total
equity
 £000
balance at 1 april 2009 3875 30345 12401 46621
profit for the year –  – 5813 5813
total other comprehensive income –  – 14 14
dividend on equity shares –  – 295 295
proceeds of equity share issues 1103 7343 – 8446
costs arising from shares issued – 331 – 331
sharebased payments –  – 283 283
purchase of own shares –  – 312 312
sale of own shares –  – 149 149
write down in value of own shares –  – 126 126
option to repurchase own shares –  – 624 624
balance at 31 march 2010 4978 37357 17555 59890
profit for the year –  – 2460 2460
total other comprehensive expense –  – 12 12
dividend on equity shares –  – 1227 1227
proceeds of equity share issues 35 238 – 273
sharebased payments –  –  264 264
purchase of own shares –  – 273 273
sale of own shares –  – 191 191
write down in value of own shares –  – 138 138
dividend paid on consideration shares –  – 14 14
cancellation of own shares note 22 113 520 633 – 
balance at 31 march 2011 4900 37075 19743 61718
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financial statements
47
cash flow statement
31 march 2011
group company
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
cash flow from operating activities
operating profit 3893 8656 1220 9003
depreciation 175 288 175 288
write down in value of own shares 138 126 138 126
sharebased payments 264 283 264 283
profit on sale of tangible assets 49 – 49 –
increase decrease in inventories 3580 59565 20126 65704
increase decrease in receivables 6573 1460 12991 11863
increase decrease in payables 1510 3308 1039 4767
4222 67070 9922 58774
interest paid 2683 3483 1200 2725
income tax paid 1135 888 1135 770
cash flow from operating activities 8040 62699 7587 55279
cash flow from investing activities
acquisition of subsidiary – – – 634
dividends received – – 1959 –
purchase of tangible assets 109 50 109 50
proceeds from sale of tangible assets 52 – 52 –
interest received 249 333 192 290
cash flow from investing activities 192 283 2094 394
cash flow from financing activities
proceeds from issuance of ordinary 
share capital
273 8446 273 8446
costs arising from shares issued – 331 – 331
purchase of own shares 273 312 273 312
sale of own shares 191 149 191 149
increase in bank loans 64438 33272 36535 25440
repayment of bank loans 70347 75116 52720 67166
dividend paid 1227 295 1227 295
capital element of hire  
purchase payments
12 18 12 18
cash flow from financing activities 6957 34205 17233 34087
net decrease increase in cash and  
cash equivalents
14805 28777 7552 20798
cash and cash equivalents  
brought forward
33642 4865 25127 4329
cash and cash equivalents  
carried forward
18837 33642 17575 25127
tef2681  ar11 back aw02indd   47 13062011   1050 tel ford h omes plc  annual report  accounts 
for the year ending 31 march 2011
financial statements
48
statement of accounting policies
31 march 2011
basis of preparation
the financial statements have been prepared in 
accordance with international financial reporting 
standards ifrs as adopted by the european union 
and ifric interpretations and with those parts of 
the companies act 2006 applicable to companies 
reporting under ifrs 
the financial statements have been prepared under 
the historical cost convention
the preparation of financial statements in conformity 
with generally accepted accounting principles requires 
the use of estimates and assumptions that affect the 
reported amounts of assets and liabilities at the date 
of the financial statements and the reported amounts 
of revenues and expenses during the reporting 
period although these estimates are based on the 
directors best knowledge of the amounts events or 
actions actual results ultimately may differ from those 
estimates the most significant estimates made by 
the directors in these financial statements are set out 
in critical accounting judgements and key sources of 
estimation uncertainty
the accounting policies set out below have been 
applied consistently for all periods presented in these 
financial statements 
basis of consolidation
the consolidated financial statements include the 
financial statements of the company its subsidiaries 
and the groups share of jointly controlled entities 
up to 31 march 2011 the results of subsidiaries 
acquired or disposed of during the year are included 
in the financial statements from the effective date of 
acquisition or up to the effective date of disposal as 
appropriate all intragroup transactions balances 
income and expenses are eliminated on consolidation
exemptions
the directors have taken advantage of the exemption 
available under section 408 of the companies act 
2006 and have not presented an income statement for 
the company alone
jointly controlled entities
a jointly controlled entity is an entity in which the 
group holds an interest with one or more other parties 
where a contractual arrangement has established 
joint control over the entity jointly controlled entities 
are accounted for using proportional consolidation
segmental reporting
the group has only one business segment being 
housebuilding and one geographical segment being 
the united kingdom financial analysis is presented on 
this basis to the chief operating decision makers for 
the group these being the board of directors 
revenue and profit recognition
properties for open market sale
revenue and profit is recognised at the point of legal 
completion of each property
commission received on property sales made on 
behalf of third parties is recorded within revenue with 
all costs associated with the sale of those properties 
recognised within selling expenses
construction contracts
contracts are treated as construction contracts 
when they have been specifically negotiated for 
the construction of a development or a number of 
properties these contracts are primarily for the 
construction of affordable homes revenue is only 
recognised on a construction contract where the 
outcome can be estimated reliably revenue and 
costs are recognised by reference to the stage of 
completion of contract activity at the balance sheet 
date this is normally measured by an assessment of 
work performed to date
where the outcome of a construction contract cannot 
be estimated reliably contract revenue is recognised 
to the extent of contract costs incurred that it is 
probable will be recoverable when it is probable that 
total contract costs will exceed total contract revenue 
the expected loss is recognised as an expense 
immediately
grant income
grants received from the homes and communities 
agency are recognised as revenue in the income 
statement to match with the related costs that they 
are intended to compensate
selling expenses
selling expenses are charged to the income statement 
as incurred
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financial statements
49
borrowings
interest bearing bank loans and overdrafts are 
recorded at the proceeds received
borrowing costs directly attributable to the 
development of properties that take a substantial 
period of time to get ready for sale are capitalised 
within inventories capitalisation of borrowing costs 
commences from the date of initial expenditure on a 
given development and continues until the properties 
are ready for sale 
the capitalisation of borrowing costs is suspended 
where land assets are being held for strategic 
purposes or where there are prolonged periods 
when development activity on a site is interrupted 
capitalisation is not normally suspended during a 
period when substantial technical and administrative 
work is being carried out
all other borrowing costs are charged to the income 
statement using the effective interest method
exceptional items
exceptional items are those significant items which 
are separately disclosed by virtue of their size or 
incidence to enable a full understanding of the groups 
financial performance
finance leases and hire purchase contracts
leases are classified as finance leases whenever the 
terms of the lease transfer substantially all the risks 
and rewards of ownership to the lessee all other 
leases are classified as operating leases
assets held under finance leases and hire purchase 
contracts are recognised as assets of the group at 
their fair value or if lower at the present value of 
the minimum lease payments each determined at 
the inception of the lease and depreciated over the 
shorter of their expected useful lives and the lease 
term the corresponding liability is included in the 
balance sheet as a finance lease or hire purchase 
obligation lease payments are apportioned between 
finance charges and reduction of the lease obligations 
so as to achieve a constant rate of interest on the 
remaining balance of the liability finance charges are 
charged to the income statement
operating leases
operating lease rentals are charged to the income 
statement on a straight line basis over the life of 
the lease
pension costs
contributions paid to group personal pension schemes 
defined contribution in respect of employees are 
charged to the income statement as incurred
property plant and equipment
property plant and equipment is stated at cost less 
accumulated depreciation depreciation is provided on 
a straight line basis at rates calculated to write down 
the cost less estimated residual value of each asset 
over its expected useful life as follows
leasehold improvements – shorter of term of lease  
 and 10 years
plant and machinery – 2 to 5 years
motor vehicles – 3 years
investments
interests in subsidiary undertakings and jointly 
controlled entities are valued at cost less impairment 
inventories
development properties are included in inventories 
and are stated at the lower of cost and net realisable 
value cost comprises costs of acquisition and 
development including directly attributable fees and 
expenses direct labour costs and borrowing costs 
included within development properties are freehold 
interests held in completed developments these are 
held for future sale 
financial instruments
financial assets and financial liabilities are recognised 
on the groups balance sheet when the group becomes 
a party to the contractual provision of the instrument
trade receivables and other receivables
trade receivables on normal terms do not carry 
any interest and are stated at their nominal value 
reduced by appropriate allowances for estimated 
unrecoverable amounts
cash and cash equivalents
cash and cash equivalents are defined as cash 
balances in hand and in the bank including shortterm 
cash deposits which mature within three months or 
less from the date of acquisition
borrowings
interest bearing bank loans and overdrafts are 
recorded at the proceeds received 
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financial statements
50
statement of accounting policies
31 march 2011
financial instruments continued
trade payables
trade payables on normal terms are not interest 
bearing and are stated at their nominal value
l and creditors
when land is purchased on extended payment terms 
the group initially records it at its fair value with a land 
creditor recorded for any outstanding monies based 
on this fair value assessment fair value is determined 
by using the effective interest method the difference 
between the nominal value and the initial fair value is 
amortised over the period of the extended credit term 
and charged to finance costs increasing the value of 
the land creditor so that at the date of maturity the 
land creditor equals the payment required
financial liabilities and equity instruments
financial liabilities and equity instruments are 
classified according to the substance of the 
contractual arrangements entered into an equity 
instrument is any contract that evidences a residual 
interest in the assets of the group after deducting  
all of its liabilities equity instruments issued by the 
group are recorded at the proceeds received net  
of direct issue costs
current assets and liabilities
assets that are expected to be realised in or are 
intended for sale or consumption in the groups 
normal operating cycle are treated as current even 
to the extent these are expected to be realised after 
twelve months from the balance sheet date liabilities 
that are expected to be settled in the groups normal 
operating cycle are treated as current even though 
these may be due for settlement after twelve months 
from the balance sheet date
contingent liabilities
disclosures are made for each class of contingent 
liabilities at the balance sheet date detailing where 
practicable an estimate of its financial effect and an 
indication of uncertainties associated with the timing 
or amount of the outflow unless the possibility of a 
financial outflow is remote
taxation
the tax expense represents the sum of the tax 
currently payable and deferred tax
the tax currently payable is based on the profits for the 
year taxable profit differs from net profit as reported 
in the income statement because it excludes items 
of income or expense that are tax deductible in other 
years and it further excludes items that are never 
taxable or deductible the groups liability for current 
tax is calculated using tax rates that have been enacted 
or substantively enacted by the balance sheet date
deferred tax is recognised in respect of all temporary 
differences that have originated but not reversed at 
the balance sheet date where transactions or events 
that result in an obligation to pay more tax in the 
future or a right to pay less tax in the future have 
occurred at the balance sheet date
a net deferred tax asset is regarded as recoverable 
and therefore recognised only when on the basis  
of all available evidence it can be regarded as more 
likely than not that there will be suitable taxable 
profits from which the future reversal of the  
underlying timing differences can be deducted
deferred tax is charged or credited in the income 
statement except when it relates to items charged or 
credited directly to equity in which case the deferred 
tax is also dealt with in equity
sharebased payments
in accordance with ifrs 2 the fair value of equity 
settled share options granted is recognised as an 
employee expense with a corresponding increase in 
equity the fair value is measured as at the date the 
options are granted using the blackscholesmerton 
pricing model and is charged equally over the vesting 
period the amount recognised as an expense is 
adjusted each reporting period to reflect the actual 
number of options that are expected to vest
with respect to sharebased payments a deferred 
tax asset is recognised on the relevant tax base the 
tax base is then compared to the cumulative share
based payment expense recognised in the income 
statement deferred tax arising on the excess of the 
tax base over the cumulative sharebased payment 
expense recognised in the income statement has 
been recognised directly in equity
own shares
shares held by employee benefit trusts in order  
to satisfy awards under the groups share plans  
are included net within equity until such time as 
the shares are vested to the relevant employees
critical accounting judgements and 
key sources of estimation uncertainty
construction contract revenue and  
profit recognition
contract revenue is recognised from the date 
of exchange of construction contracts at a rate 
equivalent to the value of work undertaken in respect 
of land development contract profit on construction 
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financial statements
51
contracts is recognised in proportion to revenue only 
to the extent that the total eventual profit on the 
contract can be foreseen with reasonable certainty
assessing the percentage complete on each contract 
involves estimation of total expected costs to be 
incurred until the end of the contract recognition of 
profit also involves estimation of the total expected 
revenues from each contract and therefore the expected 
profit margin that will be achieved judgement is 
required to assess whether the total eventual profit on 
each contract can be foreseen with reasonable certainty
carrying value of land and work in progress
inventories include land and work in progress in 
respect of development sites on each development 
judgement is required to assess whether the cost of 
land and any associated work in progress is in excess 
of its net realisable value
recent accounting developments
during the year ias 27 revised ifrs 3 revised 
and amendments to ifrs 1 and ias 32 have become 
effective and have been adopted by the group in 
addition ifric 17 and ifric 18 have become effective 
for the group adoption of the new and revised 
standards and interpretations has not had any 
significant impact on the amounts reported in these 
financial statements
amendments to ifrs 2 ias 17 and ias 39 were made 
as part of annual improvements to ifrss 2009 their 
adoption has not had any significant impact on the 
amounts reported in these financial statements but 
may impact the accounting for future transactions 
and arrangements
at the date of the authorisation of these financial 
statements there are a number of standards 
amendments and interpretations that have been 
published but are not yet effective
the standards amendments and interpretations that 
are expected to impact upon the group are
 y annual improvements 2010 is a collection of 
amendments to a number of standards as part 
of the iasb programme of making nonurgent but 
necessary amendments to ifrss the group is 
currently assessing the applicability of these annual 
improvements although at present it does not 
believe that they will have a material effect on the 
group annual improvements 2010 apply to the 
group from 1 april 2011
 y ifrs 10 ‘consolidated financial statements’ builds 
on existing principles by identifying the concept 
of control as the determining factor in whether an 
entity should be included within the consolidated 
financial statements this standard is applicable 
from 1 april 2013 and is expected to have a 
presentational impact on the group
 y ifrs 11 ‘ joint arrangements’ provides for a more 
realistic reflection of joint arrangements by focusing 
on the rights and obligations of the arrangement 
rather than its legal form proportional consolidation 
is no longer allowed ifrs 11 is applicable from 1 
april 2013 and is expected to have a presentational 
impact on the group
 y ias 28 revised ‘investment in associates and 
joint ventures’ includes the requirement for joint 
ventures to be equity accounted following the issue 
of ifrs 11 this is applicable to the group from 1 
april 2013 and is expected to have a presentational 
impact on the group
the following standards amendments and 
interpretations are not expected to have any material 
impact on the financial statements of the group
 y ifrs 1 amendment ‘first time adoption on 
hyperinflation and fixed dates’ is applicable to the 
group from 1 april 2012
 y ifrs 9 ‘financial instruments’ covers the 
classification and measurement of financial assets 
and liabilities and is the first part in the project to 
replace ias 39 and is applicable to the group from 
1 april 2013
 y ifrs 12 ‘disclosure of interest in other entities’ 
includes the disclosure requirements for all forms 
of interests in other entities and is applicable to 
the group from 1 april 2013
 y ifrs 13 ‘fair value measurement’ aims to improve 
consistency and reduce complexity of fair value 
measurement and disclosure and is applicable to 
the group from 1 april 2013
 y ifrs 27 revised ‘separate financial statements’ is 
applicable to the group from 1 april 2013
 y ias 12 amendment ‘income taxes’ is applicable 
to the group from 1 april 2012
 y ias 24 amendment ‘related party disclosures’ 
clarifies and simplifies the definition of a related 
party and will require certain entities to make 
additional disclosures and is applicable to the 
group from 1 april 2011
 y ifric 19 ‘extinguishing financial liabilities and 
equity instruments’ is applicable to the group 
from 1 april 2011
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for the year ending 31 march 2011
financial statements
52
notes to the financial statements 
31 march 2011
1 operating profit
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
operating profit is stated after charging crediting
depreciation
 owned assets 161 249
 hire purchase assets 14 39
operating lease rentals
 property 161 163
 motor vehicles 397 328
profit on sale of tangible assets 49 –
exceptional items 511 780
the exceptional item for the year ended 31 march 2011 of £05 million is a bargain gain arising as a result of 
the purchase of 50 of the ordinary shares of telford homes creekside limited in the period see note 21 for 
more details
the exceptional items for the year ended 31 march 2010 of £08 million include £07 million where the net realisable 
value of land and work in progress on certain developments has been assessed to be lower than the costs 
originally recorded in inventories as a result of the deterioration in market conditions the remaining £01 million 
relates to redundancy costs 
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
the following has been charged in respect of auditors remuneration
audit and related services pricewaterhousecoopers ll p
statutory audit of the parent company and group financial statements 66 64
other services including nonaudit services pricewaterhousecoopers ll p
the audit of joint arrangement and subsidiary accounts pursuant  
to legislation
19 16
other services relating to taxation 25 45
all other services 42 16
amounts payable to the companys auditors and their associates in respect of services to the company other 
than the audit of the companys financial statements have not been disclosed as the information is required 
instead to be disclosed on a consolidated basis
grant income   
the group has a total grant allocation from the homes and communities agency of £729 million grant income  
is recognised as revenue in the income statement on a percentage of completion basis to match with the costs 
it is intended to compensate the total grant allocation is made up of individual site by site allocations the receipt 
of which is dependent upon constructing the planned affordable housing on each site the group had received a 
total of £495 million by 31 march 2011 2010 £418 million
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financial statements
53
2 employee benefit expense
the average monthly number of persons employed by the group and company including executive directors 
during the year analysed by activity was as follows  
year ended 
31 march 2011
number
year ended 
31 march 2010
number
construction 87 86
administration 70 65
157 151
the employment costs of all employees included above were 
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
wages and salaries 7874 8513
social security costs 926 967
other pension costs – group personal pension arrangements 350 370
9150 9850
the company operates a group personal pension scheme for its employees at 31 march 2011 payments of 
£45000 were due to the scheme 2010 £41000
six current directors are accruing benefits under group personal pension arrangements 2010 six  
key management remuneration          
key management personnel as defined under ias 24 related party disclosures have been identified as the 
directors as all key decisions are reserved for the board       
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
wages and salaries including bonuses 1393 1607
social security costs 145 163
other pension costs 84 81
sharebased payments 6 7
1628 1858
detailed disclosures of directors individual remuneration pension entitlement and share options for those 
directors who served in the year are given in the directors’ remuneration report on pages 36 to 37
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for the year ending 31 march 2011
financial statements
notes to the financial statements
31 march 2011
54
3 finance income and costs
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
finance income 
interest income on shortterm bank deposits 249 333
finance costs
interest payable on bank loans and overdrafts 1106 1651
hire purchase finance charges 2 –
1108 1651
net finance costs 859 1318
4 taxation
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
united kingdom corporation tax on profits for the year 675 2070
adjustment in respect of prior periods 20 31
total current taxation 695 2101
deferred taxation note 13 47 82
income tax expense 742 2019
in addition to the amount charged to the income statement deferred tax of £12000 relating to sharebased 
payments was charged directly to equity 2010 £14000 credited
reconciliation of effective tax rate     
the tax assessed for the year is lower 2010 lower than the theoretical amount that would arise using the 
weighted average tax rate applicable to profits of the consolidated entities the differences are explained below
profit before income tax 3034 7338
profit on ordinary activities before taxation at the weighted  
average rate of corporation tax
830 2055
effects of
income not subject to taxation 143 –
adjustment in respect of prior periods 20 31
expenses not deductible for tax purposes 101 41
tax relief on land remediation costs 66 108
income tax expense 742 2019
the weighted average applicable tax rate was 274 2010 280
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financial statements
55
during the year as a result of the change in the united kingdom corporation tax rate from 28 to 26 that was 
substantively enacted and will be effective from 1 april 2011 the relevant deferred tax balances have been re
measured deferred tax expected to reverse in the year to 31 march 2012 has been measured using the effective 
rate that will apply in the united kingdom for the period 26
further reductions to the united kingdom corporation tax rate have been announced and are expected to be 
included in future finance bills to reduce the rate by 1 per annum to 23 by 1 april 2014 the changes had 
not been substantively enacted at the balance sheet date and therefore are not recognised in these financial 
statements the impact of the proposed changes are not expected to be material to the group
5 dividend paid
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
prior year final dividend paid in july 2010 of 125p july 2009 nil 621 –
interim dividend in january 2011 of 125p january 2010 075p 606 295 
1227 295
the final dividend proposed for the year ended 31 march 2011 is 125p per ordinary share this dividend was 
declared after 31 march 2011 and as such the liability of £612500 has not been recognised at that date
6 earnings per share
basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the 
weighted average number of ordinary shares outstanding during the year excluding those held in the share 
incentive plan for diluted earnings per share the weighted average number of ordinary shares in issue is 
adjusted to assume conversion of all dilutive potential ordinary shares    
earnings per share have been calculated using the following figures     
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
weighted average number of shares in issue 47886813 38804588
dilution – effect of share schemes 675778 689918
diluted weighted average number of shares in issue 48562591 39494506
profit on ordinary activities after taxation £2292000 £5319000
earnings per share
basic 48p 137p
diluted 47p 135p
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for the year ending 31 march 2011
financial statements
notes to the financial statements
31 march 2011
56
7 investments 
investments in subsidiary undertakings
2011 
£000
2010 
£000
cost
at 1 april 637 3
additions – 634
disposals – –
at 31 march 637 637
investments in jointly controlled entities
2011 
£000
2010 
£000
cost
at 1 april 1 1
additions – –
disposals – –
at 31 march 1 1
investments in subsidiary undertakings
the subsidiary undertakings which principally affect profits and net assets of the group comprise 
share of 
ordinary
 capital held
by the group
country of
 registration
accounting 
date
principal 
activity
telford homes romford limited 100 england 31 march property
 development
telford homes properties limited 100 england 31 march property
 development
telford homes investments limited 100 england 31 march property 
development
telford homes creekside limited 100 scotland 31 march property
 development
telford homes contracting limited 100 england 31 march contracting
on 17 september 2010 the group acquired a further 50 of the issued share capital of telford homes creekside 
limited increasing its holding from 50 to 100 see note 21 for more details
a full list of subsidiary undertakings is available on request from the group’s registered office
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financial statements
57
investments in jointly controlled entities     
the group’s investments in jointly controlled entities comprise     
share of 
ordinary
 capital held
by the group
country of
 registration
accounting 
date
principal 
activity
telford homes stratford limited 50 scotland 31 march property
 development
bishopsgate apartments llp 50 england 31 march property
 development
mulatel llp 50 england 31 march property 
development
investments in jointly controlled entities are accounted for using proportional consolidation
the group’s share of the assets and liabilities and the income and expenses of jointly controlled entities is as follows 
 
31 march 2011
£000
31 march 2010
£000
current assets 18981 43123
current liabilities 17213 39682
net assets of jointly controlled entities 1768 3441
year ended 
31 march 2011
£000
year ended 
31 march 2010
£000
income 2722 4889
expenses 2052 5171
share of results of jointly controlled entities 670 282
the share of results of jointly controlled entities for the year ended 31 march 2011 includes 50 of telford homes 
creekside limited to 17 september 2010 the date the company increased its shareholding in telford homes 
creekside limited from 50 to 100 note 21
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for the year ending 31 march 2011
financial statements
notes to the financial statements
31 march 2011
58
8 property plant and equipment
group and company
l easehold
£000
plant and
 machinery 
£000
motor 
vehicles
 £000
total
£000
cost
at 1 april 2009 262 1114 258 1634
additions – 48 2 50
disposals – 13 – 13
at 31 march 2010 262 1149 260 1671
additions – 100 56 156
disposals – 20 183 203
at 31 march 2011 262 1229 133 1624
depreciation
at 1 april 2009 84 713 219 1016
charge 26 223 39 288
disposals – 13 – 13
at 31 march 2010 110 923 258 1291
charge 27 134 14 175
disposals – 17 183 200
at 31 march 2011 137 1040 89 1266
net book value
at 31 march 2010 152 226 2 380
at 31 march 2011 125 189 44 358
motor vehicles with a net book value of £44000 are held under hire purchase arrangements 2010 £nil
depreciation of £14000 was charged during the year on these assets 2010 £39000
authorised future capital expenditure that was contracted but not provided for in these financial statements 
amounted to £nil 2010 £nil
9 inventories
group company
31 march 2011
£000
31 march 2010
£000
31 march 2011
£000
31 march 2010
£000
development properties 125181  120047  58300  77953 
all inventories are considered to be current in nature the operating cycle is such that a proportion of inventories 
will not be realised within twelve months it is not possible to determine with accuracy when specific inventory will 
be realised as this will be subject to a number of issues such as consumer demand and planning permission delays
included within development properties for the group are freehold interests held for future sale of £5916000 
2010 £5012000 included within development properties for the company are freehold interests held for 
future sale of £5688000 2010 £5012000
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financial statements
59
the value of inventories expensed in cost of sales in 2011 was £104243000 2010 £136906000 costs 
capitalised during the year include interest of £1554000 2010 £1671000 which is capitalised based on the 
cost of the site specific borrowings
during the year the group conducted a review of the net realisable value of its inventories where the estimated 
net realisable value was less than its carrying value within the balance sheet the group has written down the 
value of inventories the total amount recognised as an expense was £84000 2010 £953000
10 trade and other receivables
group company
31 march 2011
£000
31 march 2010
£000
31 march 2011
£000
31 march 2010
£000
current receivables
amounts recoverable on contracts 11105 3892 11037 3892
amounts owed by group undertakings – – 17514 7210
amounts owed by jointly controlled 
entities
244 1601 7862 14801
trade receivables 108 71 108 71
other receivables 559 637 389 576
prepayments and accrued income 2195 1437 3208 577
14211 7638 40118 27127
amounts recoverable on contracts
contract revenue of £46152000 2010 £61194000 has been recognised by the group in the year 
in relation to contracts in progress at the balance sheet date
group company
31 march 2011
£000
31 march 2010
£000
31 march 2011
£000
31 march 2010
£000
contracts where costs incurred plus 
recognised profits exceed payments  
to date included in receivables
11105 3892 11037 3892
contracts where payments to date 
exceed costs incurred plus recognised 
profits included in payables
5786 9804 4529 7447
5319 5912 6508 3555
total costs incurred plus recognised  
profit on contracts
183247 126647 148298 108888
payments to date 177928 132559 141790 112443
5319 5912 6508 3555
at 31 march 2011 retentions held by customers for contract work performed by the group amounted to 
£1977000 2010 £1954000 
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for the year ending 31 march 2011
financial statements
notes to the financial statements
31 march 2011
60
11 cash and cash equivalents
group company
31 march 2011
£000
31 march 2010
£000
31 march 2011
£000
31 march 2010
£000
cash at bank and in hand 18837 33642 17575 25127
12 hire purchase liabilities
group and company
31 march 2011
£000
31 march 2010
£000
gross hire purchase liabilities
due within one year 17 –
due in more than one year and less than five years 20 –
37 –
less future interest 2 –
net hire purchase liabilities 35 –
net hire purchase liabilities are repayable as follows
due within one year 16 –
due in more than one year and less than five years 19 –
35 –
13 deferred income tax
group and company
31 march 2011
£000
31 march 2010
£000
deferred tax assets 92 157
deferred tax liabilities 42 48
deferred tax assets 50 109
as permitted by ias 12 income taxes certain deferred tax assets and liabilities have been offset as they arise 
in the same tax jurisdiction and are settled on a net basis 
the movement on the deferred income tax account is as follows
31 march 2011
£000
31 march 2010
£000
brought forward 109 13
charged credited to the income statement 47 82
charged credited directly to equity 12 14
50 109
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financial statements
61
the movement in deferred tax assets and liabilities during the year is as follows
capital
 allowances
£000
sharebased
 transactions
£000
land 
remediation
 timing
 differences
£000
total
£000
at 1 april 2009 69 49 7 13
credited to the income statement 43 34 5 82
credited directly to equity – 14 – 14
at 31 march 2010 112 1 2 109
charged credited to the income statement 55 6 2 47
charged directly to equity – 12 – 12
at 31 march 2011 57 7 – 50
the aggregate deferred tax credited directly to equity amounts to £2000 2010 £14000
14 trade and other payables
group company
31 march 2011
£000
31 march 2010
£000
31 march 2011
£000
31 march 2010
£000
trade payables 7610 5835 7201 5114
amounts due to jointly controlled entities – – – 1963
amounts due to subsidiaries – – 706 –
amounts recoverable on contracts 5786 9804 4529 7447
deposits received in advance 6854 3729 4623 2906
social security and other taxes 351 553 351 553
accrued expenses 7953 7056 7090 5420
land creditors – 88 – 88
 28554  27065  24500  23491
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for the year ending 31 march 2011
financial statements
notes to the financial statements
31 march 2011
62
15 borrowings 
group company
31 march 2011
£000
31 march 2010
£000
31 march 2011
£000
31 march 2010
£000
borrowings 64877 70800 30786 46985
further information on borrowings is given in note 20
included within borrowings at 31 march 2010 is a redemption premium payable as a result of the acquistion of 
clifford contracting limited this was paid on 30 september 2010 note 22
16 share capital
group and company
31 march 2011
£000
31 march 2010
£000
authorised
100000000 ordinary shares of 10p each 10000 10000
allotted called up and fully paid
49000000 ordinary shares of 10p each 2010 49775000 4900 4978
on 30 september 2010 1130089 ordinary shares were repurchased by the company from the vendors of 
clifford contracting limited for £1 these shares were cancelled on 30 september 2010 at 56p per ordinary 
share note 22 
on 29 march 2011 355089 ordinary shares were issued at 77p to telford homes trustees limited to satisfy the 
requirements of the share incentive plan note 17
ordinary shares may be issued in the future to satisfy the exercise of outstanding share options note 17 
details of own shares held within employee benefit trusts are disclosed in note 17 
all shares rank equally in respect of shareholder rights
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financial statements
63
17 employee share schemes
telford homes plc employee share option scheme
the group operates both an approved share option scheme and an unapproved share option scheme awards 
under each scheme are made periodically to new employees all schemes are equitysettled and options can 
normally be exercised three years after the grant date
a charge is made to the income statement to reflect the calculated fair value of employee share options over and 
above the exercise price paid by employees this charge is calculated at the date of grant of the options and is 
charged equally over the vesting period the corresponding adjustment to equity is made directly to the profit 
and loss reserve in accordance with ifrs 2 sharebased payments only costs relating to options issued after 
7 november 2002 have been charged to the income statement
the group has used the blackscholesmerton formula to calculate the fair value of outstanding options 
individual calculations have been performed for groups of share options with differing exercise prices and dates 
the assumptions applied to the blackscholesmerton formula for share options issued and the fair value per 
option are set out below there were no share options granted in the year ending 31 march 2011
2011 2010
expected life of options based on options exercised to date – 4 years
volatility of share price based on three year share price history – 105
dividend yield – 2
risk free interest rate – 1
weighted average share price at date of grant – 64p
weighted average exercise price – 64p
weighted average fair value per option – £041
expected volatility was determined by considering the volatility levels historically for the group volatility in more 
recent years is considered to have more relevance than earlier years for the period reviewed
the charge calculated for the year ended 31 march 2011 is £264000 2010 £283000
a reconciliation of option movements during each period is shown below
2011 2010
number
 000’s
weighted
 average
 exercise 
price
number
 000’s
weighted
 average
 exercise 
price
outstanding at 1 april 2404 74p 2244 161p
granted in the year – – 1838 64p
forfeited in the year 74 92p 1678 179p
exercised in the year – – – –
outstanding at 31 march 2330 74p 2404 74p
exercisable at 31 march 458 100p 402 85p
the aggregate fair value of options granted in the year was £nil 2010 £754000
no share options were exercised in the year ended 31 march 2011 or the year ended 31 march 2010
in the year ended 31 march 2010 1598369 of forfeited options were replaced with 1662000 new options with an 
incremental fair value of £412945
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for the year ending 31 march 2011
financial statements
notes to the financial statements
31 march 2011
64
17 employee share schemes continued
telford homes plc employee share option scheme continued
at 31 march 2011 outstanding options granted over 10p ordinary shares were as follows
share option scheme option price number date exercisable
group approved 1385p 21660 17 may 2008 to 17 may 2015
2135p 56204 14 feb 2011 to 14 feb 2018
110p 109088 12 june 2011 to 12 june 2018
64p 1762000 20 july 2012 to 20 july 2019
group unapproved 605p 50414 5 mar 2005 to 5 mar 2012
75p 220000 1 oct 2005 to 1 oct 2012
745p 59732 20 feb 2006 to 20 feb 2013
1385p 50542 17 may 2008 to 17 may 2015
telford homes plc share incentive plan
during the year ended 31 march 2004 telford homes plc set up a share incentive plan sip for the benefit of 
all of the employees of the group this sip has been approved by the inland revenue and confers certain tax 
advantages for participating employees
the sip provides for employees to purchase shares up to a value of £1500 in each tax year these shares are 
known as ‘partnership shares’ partnership shares are matched on a one for one basis by ‘matching shares’ 
provided by the group subject to the shares remaining in the sip for a period not less than three years dividends 
are paid on both partnership and matching shares and these are allocated to employees as ‘dividend shares’
the group has set up a trust to administer the sip and to hold shares on behalf of individual employees this trust 
is an entirely separate entity to the group and is managed by a corporate trustee telford homes trustees limited 
the costs associated with the trust are paid for by the group and the group finances all share purchases
the trust has distributed shares as partnership shares and dividend shares to employees participating in the 
scheme these shares remain in the trust until such time as an employee withdraws from the sip further shares 
have been allocated to employees as matching shares and the cost of these shares is being written off over the 
three year holding period the charge in the year ended 31 march 2011 is £138000 2010 £126000
during the year ended 31 march 2011 the trust acquired 355089 shares at 77p in march 2011 at 31 march 2011 the 
trust remains interested in 52176 shares 2010 110450 which have not been allocated to employees and a further 
967861 2010 867533 that have been allocated to employees as matching shares but have not yet vested shares 
in which the trust remains interested do not rank for dividends and all shares that have not yet vested do not count 
in the calculation of the weighted average numbers of shares used to calculate earnings per share 
shares held by the sip are recognised as a deduction from shareholders’ funds the value of these shares at 
31 march 2011 was £680758 2010 £737223 movements in the profit and loss reserve relating to the sip are 
shown in the statement of changes in equity 
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financial statements
65
telford homes plc 2006 deferred payment share purchase plan
during the year ended 31 march 2007 telford homes plc set up a deferred payment share purchase plan dpspp 
for the benefit of selected senior employees an employee benefit trust the telford homes plc 2006 employee 
benefit trust was set up with abacus corporate trustee limited acting as trustee
participants in the dpspp are offered a loan by the trustee to enable them to subscribe for a specified number of 
shares in the group at market value this loan is interest free repayable on or before the repayment date which 
is normally 20 years from the date of the loan or on disposing of the shares the loan has a limited recourse 
such that repayment is limited to the value of the shares on the repayment date the group will lend the trustee 
sufficient funds to enable the trustee to provide the loans to individual participants all shares acquired under 
the dpspp will be subject to a three year vesting period and are held by the trustee for the benefit of the 
participants offers to participants will be made periodically at the discretion of the directors of telford homes 
plc
in september 2006 selected employees were offered and subscribed for a total of 550000 shares at the market 
value of 260p these shares were issued on 9 november 2006 on this date the group provided a loan to the 
trustee of £1430000 to enable the trustee to provide a loan to each of the participants this loan is repayable 
at the earlier of the sale of the vested shares and november 2026 and has been recognised as a deduction from 
shareholders’ funds in the statement of changes in equity
in december 2007 selected employees were offered and subscribed for a total of 160000 shares at the market 
value of 244p these shares were issued on 14 december 2007 on this date the group provided a loan to the 
trustee of £390400 to enable the trustee to provide a loan to each of the participants this loan is repayable at 
the earlier of the sale of the vested shares and december 2027 and has been recognised as a deduction from 
shareholders’ funds in the statement of changes in equity
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for the year ending 31 march 2011
financial statements
notes to the financial statements
31 march 2011
66
18 commitments and contingent liabilities
commitments
at 31 march the group and company had outstanding commitments for future minimum lease payments under 
noncancellable operating leases which fall due as follows
property leases other leases
2011
£000
2010
£000
2011
£000
2010
£000
within one year 184 184 310 235
between one and five years 660 737 387 116
over five years – 107 – –
844 1028 697 351
operating lease payments represent rentals payable by the company for its office premises and motor vehicles
contingent liabilities    
on 23 august 2005 the company entered an agreement to purchase the site of the former halls of residence of 
queen mary and westfield college in south woodford at 31 march 2011 £316 million 2010 £268 million had 
been paid for the site further payments are contingent on future sales at the development and are estimated to 
be approximately £63 million 2010 £11 million
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financial statements
67
19 related party transactions
the board and certain members of senior management are related parties within the definition of ias 24  
related party disclosures 
there have been no transactions between key management personnel and the group in the year ended 
31 march 2011
transactions between the company and its subsidiaries which are related parties have been eliminated on 
consolidation the amounts outstanding from subsidiaries to the company at 31 march 2011 totalled £17514000 
2010 £7210000
the company has invoiced jointly controlled entities and subsidiaries £26638000 in the year to 31 march 2011 
for construction services 2010 £20970000 the company has been invoiced £1907000 in the year to 
31 march 2011 by subsidiaries for construction services 2010 £6115000
the amounts outstanding from jointly controlled entities to the company at 31 march 2011 totalled £489000 
2010 £3224000 in respect of construction services in addition a net total of £7373000 was owed to the 
company at 31 march 2011 from jointly controlled entities in respect of shareholder loans 2010 £9614000
after proportional consolidation of the jointly controlled entities the group has amounts outstanding from jointly 
controlled entities totalling £244000 at 31 march 2011 2010 £1601000 
the company received a dividend in the year of £1959000 £3918 per ordinary share from its jointly controlled 
entity telford homes stratford limited
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for the year ending 31 march 2011
financial statements
notes to the financial statements
31 march 2011
68
20 financial instruments
categories of financial assets and financial liabilities are as follows
group company
31 march 2011
£000
31 march 2010
£000
31 march 2011
£000
31 march 2010
£000
financial assets
l oans and receivables
trade receivables 108 71 108 71
other receivables 559 637 389 576
cash and cash equivalents 18837 33642 17575 25127
19504 34350 18072 25774
financial liabilities
amortised cost
trade payables 7610 5835 7201 5114
land creditors – 88 – 88
borrowings 64877 70800 30786 46985
hire purchase liabilities 35 – 35 –
72522 76723 38022 52187
the group does not enter into any derivative transactions and has no direct exposure to exchange rate 
movements as its trade takes place entirely within the united kingdom
trade and other receivables trade payables and hire purchase liabilities
the fair value of trade and other receivables trade payables and hire purchase liabilities at 31 march 2011 is 
equal to the carrying value stated in the balance sheet at that date there are no amounts included within trade 
and other receivables currently overdue 2010 £23000 hire purchase liabilities include £19000 2010 £nil due 
after more than one year all other trade and other receivables and trade payables are due within one year
l and creditors
land purchases made on deferred payment terms are recorded at fair value using the effective interest method 
in accordance with ias 39 financial instruments  recognition and measurement the difference between the 
fair value and nominal value is amortised over the deferment period as financing costs increasing the land 
creditor to its full cash settlement value on the payment date the interest rate used in the year to 31 march 2011 
was 3 2010 3 
borrowings
the group uses loan finance all of which is denominated in sterling to acquire development land and undertake 
site construction on 31 march 2011 the group signed a £70 million loan facility which extends to 30 september 
2014 with a club of three banks being the royal bank of scotland hsbc and santander the debt drawn under 
this facility is secured against a portfolio of land and development sites owned by the group at 31 march 2011 
the group had utilised £319 million of this facility leaving an unutilised balance of £381 million interest is being 
charged on this facility at libor plus a margin of 35
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financial statements
69
the group’s subsidiary telford homes creekside limited has loan facilities with the royal bank of scotland 
totalling £577 million in respect of the purchase of development land and construction in greenwich at 
31 march 2011 telford homes creekside limited had utilised £340 million of this facility leaving an unutilised 
balance of £237 million interest is charged at libor plus a margin of 225 on the majority of the facility 
included within the £577 million is a mezzanine loan facility of £80 million and interest on this loan is charged at 
libor plus a margin of 5
in addition the group’s jointly controlled entity bishopsgate apartments llp has a loan facility with allied irish 
bank of £150 million in respect of the purchase of development land in bethnal green road at 31 march 2011 
bishopsgate apartments llp had utilised all £150 million of this facility the group has recorded its 50 share of 
the loan in its balance sheet at 31 march 2011 interest is charged at libor plus a margin of 45 this facility is due 
for repayment on 14 december 2011
market risk     
the group is exposed to the financial risk of changes in interest rates both in terms of changes in the base rate 
and libor and in terms of individual banks attitude to market risk and their application of either base rate or 
libor to new facilities and the margin applied to each new facility
in order to assess the risk interest costs are forecast on a monthly basis over a five year period using estimates 
of likely changes in rates and actual costs are compared to this forecast volatility of interest costs remained at 
an acceptable level in the year ended 31 march 2011 as libor remains at a historically low level interest on all 
facilities currently held is charged at floating interest rates and the group assesses the requirement for fixing 
interest rates on a regular basis 
the effect on the income statement of a 1 rise and a 1 fall in interest rates has been calculated to assess interest 
rate sensitivity based on average monthly borrowings in the year a 1 rise in interest rates would have a negative 
effect of £504000 before tax 2010 £845000 a 1 fall in interest rates gives the same but opposite effect
capital risk
the group’s objectives when managing capital are to safeguard the group’s ability to continue as a going 
concern in order to provide returns for shareholders and meet its liabilities as they fall due whilst maintaining 
an appropriate capital structure to reduce the costs of capital the group considers its capital to be all of the 
components of net assets
the group ensures that there are appropriate controls over the purchase of land and levels of work in progress in 
the business in order to appropriately manage its capital in addition the other methods by which the group can 
manage its shortterm and longterm capital structure include adjusting the level of ordinary dividends paid to 
shareholders issuing new share capital and arranging debt
credit risk
credit risk is the risk of financial loss where counterparties are not able to meet their obligations
trade and other receivables includes amounts recoverable on contracts which are due from housing associations 
and balances due from other group undertakings the group considers the credit quality of the various debtors 
to be good in respect of the amounts outstanding and therefore credit risk is considered to be low 
surplus cash is held in secure bank deposit accounts with allied irish bank the royal bank of scotland santander 
hsbc barclays bank and investec bank plc 
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for the year ending 31 march 2011
financial statements
notes to the financial statements
31 march 2011
70
20 financial instruments continued
l iquidity risk
liquidity risk is the risk that the group does not have sufficient financial resources to meet its obligations as they 
fall due
the group manages liquidity risk by continuously monitoring forecast and actual cash flows over a five year 
period and performing sensitivity analysis on these forecasts the forecasts are necessarily subject to a number 
of assumptions and judgements and these are tested on a reasonable basis by the sensitivity analysis these 
forecasts and the related sensitivity analysis are reviewed by the directors in detail on a monthly basis in addition 
all of the forecasts and supporting calculations are made available to each bank funding the group on a monthly 
basis the current forecasts show positive cash balances beyond the next twelve months even where this is 
subjected to sensitivity testing 
the group utilises bank facilities to ensure that adequate funding is available to cover working capital 
requirements and the directors consider that existing facilities are sufficient to cover funding requirements in the 
foreseeable future both where these have already been utilised and where they are currently unutilised where 
facilities are due to expire within one year this is due to the timing of the relevant developments and therefore 
the expected repayment dates in all of these cases the directors are satisfied that the loans are expected to be 
repaid by the date the facility expires
the group’s bank facilities are subject to a number of general and financial covenants which are tested 
periodically by each bank in all cases the directors have assessed whether the group will remain in compliance 
with the covenants for at least twelve months after signing the financial statements and are satisfied that there 
will be no breach of the covenants 
the maturity profile of the anticipated future cash flows based on the earliest date on which the group can be 
required to pay financial liabilities on an undiscounted basis including future interest payments using the latest 
applicable rates is as follows
trade 
payables
£000
l and
creditors
£000
borrowings
 £000
 hire purchase
liabilities
£000
total
£000
within one year 7610 – 20311 16 27937
more than one year 
and less than two years
– – 6147 19 6166
more than two years 
and less than five years
– – 45615 – 45615
31 march 2011 7610 – 72073 35 79718
trade 
payables
£000
l and
creditors
£000
borrowings
 £000
 hire purchase
liabilities
£000
total
£000
within one year 5835 88 13280 – 19203
more than one year 
and less than two years
– – 47674 – 47674
more than two years 
and less than five years
– – 13485 – 13485
31 march 2010 5835 88 74439 – 80362
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financial statements
71
21 business combination
on 17 september 2010 the group acquired 50 of the issued share capital of telford homes creekside limited 
a property development company currently developing land in greenwich london following the acquisition the 
group owns 100 of the ordinary shares of telford homes creekside limited and has sole control of the company 
the book value and fair value of the assets and liabilities of telford homes creekside limited at the date of 
acquisition are set out below
book and
 fair value
£000
50
acquired
£000
inventories 58716 29358
cash 2414 1207
trade and other payables 28102 14051
borrowings 32006 16003
net assets 1022 511
the total consideration paid for 50 of the ordinary shares in issue was £500 in cash as a result the group 
recognised a ‘bargain gain’ of £510500 representing 50 of the fair value of the net assets of telford homes 
creekside limited on 17 september 2010 less the £500 purchase price this gain is included in exceptional items 
in the results to 31 march 2011 the assets and liabilities acquired all relate to the company’s site in greenwich and 
will be realised as the development is completed over the next two years
there was no difference between the fair value and the book value of the assets and liabilities of telford homes 
creekside limited at the date of acquisition and therefore no gain or loss arose on the existing shareholding
this acquisition contributed additional revenue of £97 million and profit before tax of £09 million to the group  
for the period between the date of acquisition and the balance sheet date had the acquisition occurred on  
1 april 2010 the consolidated income statement would have included additional revenue of £111 million and 
profit before tax of £08 million 
acquisition related costs amounting to £2000 are included in administrative costs in the group income statement
22 repurchase and cancellation of shares
on 30 september 2010 the company repaid all outstanding loan notes in relation to the acquisition of clifford 
contracting limited which took place on 23 june 2009 this final repayment amounted to £43 million
as a result of the loan notes being repaid the company immediately exercised its option to repurchase  
1130089 ordinary shares from the vendors of clifford contracting limited for a total sum of £1 these 
repurchased shares were cancelled on 30 september 2010
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for the year ending 31 march 2011 72
company secretary
sara debenham
registered number
 4118370
registered office
first floor
stuart house
queensgate
britannia road
waltham cross
hertfordshire en8 7tf
auditors
pricewaterhousecoopers ll p 
10 bricket road 
st albans
hertfordshire al1 3jx
bankers
the royal bank of scotland  
1st floor 
conqueror house  
vision park  
chivers way  
cambridge cb4 9by
santander corporate banking 
1 dover street 
london w1s 4la
hsbc bank plc 
70 pall mall 
london sw1y 5ez
allied irish bank 
the manor house  
high street 
wanstead 
london e11 2rl
barclays bank  
corporate banking centre  
po box 729  
eagle point  
1 capability green  
luton lu1 3us
solicitors
s j berwin  
10 queen street place 
london  ec4r 1be
nominated broker
shore capital stockbrokers l imited 
bond street house 
14 clifford street 
london  w1s 4ju
financial  nominated advisor
shore capital and corporate limited  
bond street house 
14 clifford street 
london w1s 4ju
registrars
capita registers 
northern house 
woodsome park 
fenay bridge  
huddersfield 
west yorkshire hd8 0ga
financial public relations
abchurch communications l imited  
125 old broad street  
london ec2n 1ar
company information 
tef2681  ar11 back aw02indd   72 13062011   1050 aerial view of the city of london showing  
a computer generated image of avantgarde 
in the foreground
building
focused 
tef2681  ar11 cover aw02indd   2 09062011   1641 annual report  accounts
building
growth
telford homes  plc
2011
annual report  accounts 2011
telford homes plc
first floor
stuart house
queensgate
britannia road
waltham cross
hertfordshire en8 7tf
tef2681  ar11 cover aw02indd   1 09062011   1641


Summary:
 chairman’s 
statement
david holland
our success in marketing 
developments in the far east 
has continued with the launch 
of avantgarde in april and 
may 2011
in the year to 31 march 2011 telford homes 
exchanged contracts for the sale of 368 open 
market properties an increase of 45 per cent 
over last year this performance has been 
driven by successful marketing campaigns  
in the far east selling properties before 
construction has commenced together with 
a steady rate of demand from uk buyers
during the recession the group reduced  
its investment in new land opportunities 
and switched some of its developments  
to wholly affordable housing as expected 
this has reduced both the output of finished 
open market homes and profit margins 
despite this the group met market 
forecasts for the year to 31 march 2011 
achieving profit before tax and after 
exceptional items of £30 million
our success in marketing developments in 
the far east has continued with the launch 
of avantgarde in april and may 2011 
together with a strong performance at 
the uk launch we have achieved over 170 
sales out of the 257 open market homes on 
the development these sales secure the 
recognition of profit for telford homes and 
our new joint venture partner the william 
pears group when the homes are handed 
over in 2013 and 2014
reduced output and margins will continue 
to keep profits at a lower level in the new 
financial year but these effects will have 
substantially been worked through the 
business by march 2012 beyond this date 
the board expects significant growth in the 
number of finished homes from the existing 
development pipeline and has secured 
presales on some of those developments 
at normal margins the signing of our new 
bank facility in march this year will improve 
our ability to add to the development 
pipeline for future years in a climate where 
many smaller developers are struggling to 
access finance
as a result the board is maintaining a 
progressive dividend policy in proposing a 
final dividend of 125 pence making a total 
of 25 pence for the year 2010 20 pence
finally it gives me great pleasure to welcome 
jon distefano as our new chief executive 
with effect from 1 july 2011 jon replaces 
andrew wiseman and i am confident that 
telford homes will continue to prosper under 
his leadership after ten years in our current 
roles andrew will take over from me on his full 
time return to telford homes in january 2012 
assuming the position of executive chairman 
thus retaining his skills and knowledge within 
the business i have been delighted to serve 
as chairman over a successful decade and i 
look forward to continuing as a nonexecutive 
director in the future
david holland 
chairman nonexecutive
31 may 2011
building
progress
year in review
wwwtelfordhomesplcuk 09
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