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CONSOLIDATED PROFIT AND LOSS ACCOUNT

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					                                                                            Warner Estate Holdings PLC


Warner Estate Holdings PLC (“Warner Estate” or “Group”), the property investment and management company today announces its preliminary results for the year ended 31
March 2008.

Financial Highlights



        •   Operating profit before net gains on investments £20.6million (2007: £24.8million)

        •   Recurring operating profit increased by 27% to £30.0million (2007: £23.7million)(i)

        •   Realised pre-tax profit £17.3million (2007: £11.6million)(ii)
        •   Loss before income tax £123.5million (2007: £67.8million profit)

        •   Net asset value per share 549p (2007: 774p)

        •   Adjusted net asset value per share 557p (2007: 811p)(iii)
        •   Losses per share 203.6p (2007: 129.3p earnings)

        •   Realised earnings per share 35.6p (2007: 12.7p losses)(ii)

        •   Recurring earnings per share 22.6p (2007: 30.5p)(i)
        •   Dividend raised by 7% to 22.5p (2007: 21p); 37th successive year of dividend growth



Business Highlights



        •   Rent roll equity share £66.8million (2007: £62.6million]

        •   Property investments equity share £1.1billion (2007: £1.2billion)
        •   Total return on equity portfolio minus 4.6% against IPD benchmark minus 9.1%

        •   Profit on sale of property investments £8.2million (2007: £1.8million)

        •   Assets under management £2.9billion (2007: £3.2billion)
        •   Converted to a REIT on 1 April 2007

        •   £60million of banking facilities renewed since year end



(i)         Adjusted for net movements on investment properties and other items

(ii)        Realised pre tax profit includes share of joint venture pre-tax results and is before fair value movements

(iii)       Adjusted for deferred tax on fair value gains and other items



Philip Warner, Chairman of Warner Estate commented



“Trading conditions have been tough over the past year with the credit crunch having a significant impact on property values.”


“However, Warner Estate’s property performance has been good. We have outperformed the IPD benchmark across our portfolio, tenant demand for our space is robust and
we continue to make profitable disposals. Further more, we have increased the dividend by 7%, our 37th consecutive annual increase.”


“Our strategy remains to grow revenues through good, active asset management. We have a long-term sustainable cash flow and a strong balance sheet. Risk management
is ensured through a well balanced portfolio with good sector spread. The Board is confident that we have the knowledge and expertise to weather the current climate.”

Date: 10 June 2008

For further information contact:



Warner Estate Holdings PLC                                               City Profile

Philip Warner, Chairman                                                  Simon Courtenay

Peter Collins, Finance Director                                          Tel: 020-7448-3244

Michael Stevens, Property Director
Tel: 020-7907-5100

Web: www.warnerestate.co.uk



                                                                                        1
CHAIRMAN’S STATEMENT


The Group’s first year as a Real Estate Investment Trust (REIT) has been badly affected by the impact of the “credit crunch” on property values. We have benefited from our
REIT status and a good relative asset management performance with the rent roll rising on a like for like basis, £63million of investment properties sold at a profit, and total
return beating the IPD Index by 4.5%. However, the problems in the financial markets have brought about far greater falls in the value of commercial property than would
otherwise have been expected and the Group has suffered accordingly with a 29% fall in net asset value. On a more positive note, realised profits have risen, the dividend has
been increased for the 37th successive year, and the Group remains comfortably within its loan to value covenants. Borrowing facilities due this calendar year have been
successfully renewed and over 90% are not due for renewal until 2010 and beyond.


Results Overview
Net asset value per share fell from 774p to 549p and adjusted net asset value from 811p to 557p. The Group’s gearing, so beneficial when values were rising, has exacerbated
the year’s fall and has risen to 112% (2007: 61%). Whilst the uncertainties with property values make it difficult to forecast future gearing levels, the Board continues to take
steps to return the figure below our internal policy ceiling of 100%. A programme of sales, taking advantage of the liquidity in smaller properties, has been put in place since
last year and, in addition to those made last year, further profitable disposals of over £7million have been made in the current year. The level of debt has been falling since our
half year and continues to fall. Our objective of converting further joint ventures into more lowly geared funds will further reduce the Group’s exposure, as well as enhancing
asset management fee income. Interest was covered 1.5 times (2007: 2.2 times) by recurring operating profit and the Group has over £40million of headroom under its
borrowing facilities. The average cost of debt fell from 6.18% to 5.84% and the Group manages interest rate exposure to achieve a balance between flexibility and certainty.


Recurring operating profit increased by 27% to £30.0million (2007: £23.7million). However, the effect of valuation movements produced an overall loss of £113.5million
(2007: £69.4million profit). The fall in property values was mitigated by good asset management. The outward movement in yields was 0.71% beating the IPD benchmark of
0.87%, rental values grew by 4.7% against the benchmark of 4% and the void rate fell from 9.1% to 5.5%.


Equity shareholders’ funds fell to £305million from £433million. Of this fall, £133million arose from valuation movements, almost entirely due to the net impact of the
decline in the value of the Group’s property assets held either directly or indirectly through joint ventures or investment in funds, with a positive £5million being the net
impact of realised profits less other outgoings.


A more detailed analysis of the year will be found in the Reviews from the Property Director and the Finance Director that follow this statement.


The Board recommends a final dividend of 11.25p bringing the total dividend for the year to 22.5p, a 7% rise on the previous year and the Company’s 37th successive annual
increase. This is split between the REIT Property Income Distribution (PID) of 17.5p, in accordance with the REIT requirement to pay out at least 90% of REIT profits, and
an ordinary dividend of 5.0p. Over the last five years the dividend has been raised by over 7% per annum compound, well above the rate of inflation. The proposed dividend
is covered 1.6 times by realised earnings and, if approved at the Annual General Meeting, the final dividend per share of 11.25p will be paid on 19 September 2008 to
shareholders on the register at close of business on 22 August 2008. REIT conversion supports the Board’s policy of paying an above inflation increase in dividend. The
favourable taxation treatment of REITs has saved the Group £8.1million of taxation in the current year representing 59% of the Group’s REIT entry fee.


Strategy
The Group concentrates on improving the quality and quantity of income from property and so generating recurring operating profits and cash. Conversion to REIT status has
not changed our strategy of complementing our property investment business with an asset management business. This business, which generated £3.3million of operating
profit, is represented by only £11million on the balance sheet. The Group invests in property both directly, either as wholly owned or by way of joint venture, and indirectly
through our shareholding in funds. Performance of both the funds that we manage was ahead of their respective benchmarks. Property under management, including that
wholly owned, totalled £2.9billion at the year end (2007: £3.2billion) covering each of the principal commercial sectors of office, retail and industrial and ensuring broad risk
management, with each sector run by a specialist team, focusing on its particular area. An important part of improving income is the Group’s development pipeline which this
year saw the successful completion of our shopping centre in Folkestone, some 93% pre-let, and the commencement of the redevelopment of the Market Hall in Bolton which
is currently over 70% pre-let and on target for completion in autumn 2008.


Prospects
The short term outlook for the property sector is difficult to forecast. The outward movement in yields has slowed since our year end and now appears to be flattening. Our
valuations are not demanding and we expect our rental income to continue to increase, both through capturing value at review and good asset management which mitigated
the falling values last year. On behalf of shareholders, I thank our staff for their skill in mitigating the fall in values last year. The economic outlook may not be bright in the
short term but Warner Estate is a long term company. The strong cash flow from a broadly balanced portfolio combined with a well financed balance sheet and a skilful crew
have seen and will see us navigate stormy waters safely.


Philip Warner
Chairman




                                                                                          2
PROPERTY REVIEW


Overview


We produced a total return for all assets under management of minus 4.3% against the IPD Quarterly Universe benchmark average of minus 9.1%, achieved by executing
asset management basics, our core skill, with motivated specialist teams.


Our strategy of exposure to each major asset class, offices, retail and industrial provides resilience against single sector volatility. The average lot size, £5.5million, provides
shelter from illiquidity currently being experienced by higher value properties; the underlying net initial yield (which excludes property held for development) of 6.1%
generates an above benchmark income return and has potential for outperformance at property level again next year as forecasters predict little or no capital growth.


The average unexpired lease term for all assets under management is over seven years; if the assets held in the Ashtenne Industrial Fund (where lease agreements are typically
granted for between 6 months and 3 years) are excluded, the average unexpired term rises to 9.6 years.


Assets sold from the Wholly Owned portfolio in the year realised £71.4million against March 2007 valuations of £63.3million; this ongoing disposal programme of ex-growth
properties will continue in 2008/09.


We now manage a rent roll of over £180million per annum; all collected in-house which further strengthens relationships with our customers with whom a regular dialogue
and proximity of managers through our regional office network result in swiftly accommodating changing needs for mutual benefit.


Two development projects, the new 200,000 sq ft Bouverie Place Shopping Centre in Folkestone and the 54,000 sq ft extension and simultaneous lease re-gear for Antalis at
their distribution hub in Bardon, Leicestershire were successfully completed. A 100,000 sq ft extension to Market Place Shopping Centre, Bolton is on schedule to complete
in autumn 2008, already over 70% pre-let; Debenhams signed for a pre-let department store as the anchor tenant for the new 265,000 sq ft Waterside Shopping Centre in
Aylesbury, Buckinghamshire.


Last year we reported that aggressive active management would be a key element in generating performance, which proved correct. As this discipline is at the heart of our
business model and premium performance will again result from strong income yield spiced with active management success there are opportunities for us to continue
outperforming in the current market.


Performance


Equity Share Portfolio


Our Equity Share Portfolio, which reflects our share of properties in our seven businesses, comprises £1.1billion and generated a total return of minus 4.6% compared with the
IPD Quarterly Universe benchmark of minus 9.1%. The net initial yield moved out 71bps to 5.77% against the benchmark fall of 87bps over the same period.


Rental income grew on a like-for-like basis by 3.3% and overall by 6.4% to £66.8million pa. This portfolio’s value fell on a like-for-like basis by 9.5% and overall by 6.7%
compared with the benchmark decline of 13.2%.


Estimated Rental Value grew by 4.7% to £81.8million pa, outperforming the IPD benchmark of 4.0%, and generated by strong income improvement, and our letting,
renewing and reviewing leases consistently ahead of expectation.


The void rate is 5.6% by floor space and 5.5% by ERV, compared with the IPD benchmark of 9.3%.




                                                                                          3
                                                                                                    March 2008
                                           Share of              Net                  ERV                   Net Initial         Equivalent        Net Initial
                                           Capital Value         Rental Income                              Yield               Yield             Yield
                                                                                                                                                  Movement
                                           £m                    £m                   £m                    %                   %                 bps
Wholly Owned                               458.3                 28.1                 33.5                  5.66%               6.30%             +64
Agora Shopping Centres JV**                122.0                 6.1                  9.6                   5.38%               6.41%             +93
Agora Max Shopping Centres JV              137.9                 8.1                  11.2                  5.46%               6.53%             +65
Radial Distribution JV                     130.5                 9.2                  9.3                   6.67%               6.67%             +97
Greater London Offices JV                  48.1                  2.7                  3.1                   5.26%               5.70%             +53
Apia Regional Office Fund                  123.7                 7.9                  9.0                   5.97%               6.50%             +69
Ashtenne Industrial Fund*                  75.3                  4.7                  6.1                   6.09%               7.40%             +48
Total                                      1,095.8               66.8                 81.8                  5.77%               6.45%             +71
*AIF value reflects 100% ownership of Space NW, and if sites held for development are excluded, NIY becomes 6.47%
**Market Hall, Bolton which is undergoing 100,000 sq ft development, excluded from initial yield calculation


Equity Share Sector Statistics
                                                     Number             Share of             Annual              ERV             Net               Weighting
                                                     of Properties      Capital Value        rent roll                           Initial yield
                                                                        £m                   £m                  £m              %                 %
Retail                                               40                 493.3                25.7                36.8            5.1%              45.0%


Office                                               71                 358.9                25.4                27.4            5.8%              32.8%


Distribution                                         17                 135.6                9.6                 9.7             6.7%
Industrial                                           362                85.7                 5.4                 6.8             6.6%
Distribution and Industrial                          379                221.3                15.0                16.5            6.7%              20.2%


Other Property                                       46                 22.3                 0.7                 1.1             ..                2.0%


Total                                                536                1,095.8              66.8                81.8            5.8%              100%


Aggregate Portfolio


Our ungeared property total return in the Aggregate Portfolio, the £2.9billion we manage across all businesses was minus 4.3% and compares against the IPD Quarterly
Universe benchmark of minus 9.1%, for the 12 months to March 2008.


During the year our standing investments (those held throughout the 12 months and excluding sale and purchases), fell in value by 9.3%, a decline of £290million, against the
benchmark fall of 13.2%.


The net initial yield of our Aggregate portfolio is 5.91%, 46bps higher than the IPD Universe of 5.45%. Excluding properties which are currently deliberately void pending
development or substantial asset management initiatives, this yield increases to an underlying 6.1%. Our yields have also remained relatively more resilient than the IPD
Quarterly Universe benchmark, moving out 77bp compared to IPD’s 87bp. Our income grew by 3.1% (£5.5million) over the period, to £180.7million pa.


Across the Aggregate Portfolio our void rate is now 7.8%; this is a reduction of over one third on last year and compares to 9.3% in the IPD Universe Benchmark. Excluding
the Ashtenne Industrial Fund void, which is deliberately held in the 10% to 14% range, our underlying void is 4.9% by floor space and 5.3% by ERV.




                                                                                      4
                                                                                      March 2008
                    Number           Capital Value      Net                 ERV                 Initial Yield     Equivalent        Initial
                    of                                  Rental Income                                             Yield             Yield
                    Properties                                                                                                      Movement
                                     £m                 £m                  £m                  %                 %                 bps
Wholly Owned        70               458.3               28.1               33.5                5.66%             6.30%             +64
Agora**             4                243.9               12.1               19.2                5.38%             6.41%             +93
Agora Max           2                275.8               16.2               22.5                5.46%             6.53%             +65
Radial              16               260.9               18.3               18.5                6.67%             6.67%             +97
Greater London      2                96.2               5.3                 6.3                 5.26%             5.70%             +53
Offices
Apia                22               451.1               29.0               32.8                5.97%             6.50%             +69
AIF*                416              1,155.3            71.7                93.2                6.09%             7.40%             +48
Total               532              2,941.5            180.7               226.0               5.91%             6.81%             +77
*AIF value reflects 100% ownership of Space NW, and if sites held for development are excluded, NIY becomes 6.47%
**Market Hall, Bolton which is undergoing 100,000 sq ft development, excluded from initial yield calculation


Key Statistics


                                                                Total under management
                                               31 March 2008                  31 March 2007
Capital Value                                  £2,941.5million                £3,220.6million
Annualised rent roll                           £180.7million                  £175.2million
Initial Yield                                  5.91%                          5.14%
Average Unexpired Lease Term                   7.12 years                     7.16 years
Void Rate                                      7.8%                           10.8%
Number of Properties                           532                            562
Average Lot Size                               £5.5million                    £5.7million


Outlook


In the short term a modest further rise in yields is forecast through the first half of the year 2008/2009 stabilising in the second half. However, occupational markets and
rental values, which have so far remained resilient, will increasingly come under pressure and this may prolong the correction period. In the medium term we expect returns
to be driven by income rather than capital growth, with outperformance coming from active asset management and development, the two areas where we have concentrated
our resources and demonstrated success over recent years.




                                                                                        5
                                                                      WHOLLY OWNED INVESTMENTS
                                                       VALUE £458MILLION (Cushman & Wakefield, CBRE & DTZ)
                                                                    RENTAL INCOME £28.1MILLION PA


The Wholly Owned Portfolio has undergone substantial change during the course of the year – a reduction in the number of properties, an increase in weighting towards
London and the South East, improving rental income of held properties and a reduction in void rate.


A significant sales programme focused on smaller ex-growth properties resulted in £71million of sales at a gross surplus on March 2007 values of £10.6million, across 18
properties.


The combined effect of this activity has been to increase the weighting of the portfolio towards London and the South East (now 87%) and to reduce the void rate from 8.6%
in March 2007 to 3.6% by ERV (1.7% by floor space).


Like-for-like income increased over the year by 2.9% or £0.6million pa. The value of this portfolio fell by 7.2% which compares with the IPD Quarterly Universe Benchmark
of minus 13.2%.


A significant contribution to this relative out-performance came as a result of successful asset management initiatives at St Johns Wood High Street, London and 66 South
Lambeth Road, London and the completion of Bouverie Place Shopping Centre, Folkestone.


St Johns Wood High Street


Since taking ownership of the unbroken parade of 27 retail units at St Johns Wood High Street, we have been working to create a more exclusive retail line up consistent with
the affluent local catchment area. The newest tenant, Neal’s Yard Remedies, follows the letting last year to French fashion label Comptoir des Cotonniers and complements
existing tenants Joseph, Larizia, Space NK and Whistles. The Neal’s Yard letting involved taking early lease surrender from a shoe retailer and the re-letting at 20% more
rent, importantly establishing a new record Zone A rental tone of £150 per sq ft for the parade.


66 South Lambeth Road


Capitalising on the attraction of emerging London locations to cost sensitive businesses we successfully let 66 South Lambeth Road on completion of its wholescale
refurbishment to Leonard Cheshire Disability on a new 16 year lease. The gain in rental as a result of this was a 48% uplift to £650,970 pa.


Bouverie Place Shopping Centre


The Bouverie Place Shopping Centre, Folkestone opened 93% pre-let in time for Christmas 2007 trading. It is anchored by a 72,400 sq ft ASDA supermarket, a 26,000 sq ft
BHS and a 19,000 sq ft Next and is served by a 570space NCP operated car park.


Income Security
34 of the top 40 tenants by value of contracted rent, representing 48% of total rent roll, are “low risk” or better.




                                                                                          6
                                                                                 DEVELOPMENT


Our development activity continues to grow within our Wholly Owned portfolio, the joint ventures and the funds. Under our in-house Development Team all projects are
carefully managed to control risks associated with their completion. Typically construction work will only start once each scheme is at least 60% pre-let and building
contracts are awarded on guaranteed maximum or fixed price bases. Our development pipeline has the potential to enhance returns as schemes complete successfully over the
next 4 to 5 years.


A summary of our development activity is as follows:


Scheme                                          Size              Comments                                                                   Estimate     Estimate
                                                (sq ft)                                                                                      Start        PC
                                                                                                                                             Date
Wholly Owned
Southend – The Royals Shopping Centre –         30,000            Reconfiguration of existing centre under discussion.                       Q4 2008      Q3 2009
Phase 1
Aylesbury – Hale Leys Shopping Centre –         265,000           Partnership with Aylesbury Vale District Council. Debenhams signed         Q2 2009      Q4 2011
Phase 2                                                           for Department Store. Planning application to be submitted Summer
                                                                  2008.
Herluin Way, Weston Super-Mare                  40,000            Potential for conversion of an existing unit to out of town retail.
Agora
Bolton – Market Place                           100,000           Over 70% pre-let. Started on site in 2007.                                 Q1 2007      Q3 2008
Preston – Fishergate Shopping Centre            190,000           Revised planning permission granted January 2007.                          Q3 2008      Q2 2013
Middleton – Middleton Shopping Centre

Phase 2                                         17,500            Planning permission received in 2006.                                      Q4 2008      Q3 2009
Agora Max
Birmingham – Pallasades Shopping Centre
Ladywood House                                  95,000            Office refurbishment.                                                      Q2 2008      Q3 2009
Network Rail                                    T.B.A.            Discussions ongoing with Network Rail and local authority over plans
                                                                  for a new station and retail area above.
Birkenhead – The Grange and Pyramids
Shopping Centre
Phase 2 – New retail unit                       Phase 2 –         Proposed new retail unit at entrance to shopping centre. Planning          Q4 2009      Q3 2010
                                                30,000            granted June 2006.
Phase 3 – Café in Werbergh Square               Phase 3 –         Planning granted in 2007.                                                  Q3 2009      Q1 2010
                                                3,000
Phase 4 – Mall anchor scheme                    Phase 4 –         Re-development of Milton Pavement and introduction of new anchor.          Q2 2010      Q2 2013
                                                50,000

AIF
Development Land                                190 acres         Various schemes under consideration and / or
                                                                  underway, including :-
                                                                  70,000 sq ft started at Tameside, Manchester                               Q1 2007      Q3 2008
                                                                  Planning permission granted for 35,000 sq ft, extension for Corus at       Q2 2008      Q4 2008
                                                                  Wolverhampton
                                                                  Planning application submitted for 180,000 sq ft of industrial space /
                                                                  serviced offices at Radway Green, Crewe.                                   Q3 2008      Q1 2009
                                                                  Planning permission granted for 80,000 sq ft of industrial space in
                                                                  Irvine, Scotland
                                                                                                                                             Q2 2008      Q4 2008


Chippenham                                      50 acre           Public Inquiry in May 2008 for potential change of use to retail and       Q4 2008      Q3 2010
                                                existing          residential.
                                                industrial site
TOTALS                                          820,500 sq ft + 240 acres


Key projects include:



                                                                                       7
Aylesbury, Hale Leys Shopping Centre Phase Two (Wholly Owned)
Size 265,000 sq ft (8,176 sq m) extension


Warner Estate is the development partner of Aylesbury Vale District Council for this mixed-use regeneration project. An Agreement for Lease has been exchanged with
Debenhams for an 80,000 sq ft anchor department store and a full planning application will be submitted during 2008. The new scheme will connect with our existing
ownership of Hale Leys Shopping Centre and will enable Aylesbury to capitalise on its affluent catchment population which is due to expand significantly in the coming
years.


Bolton, Market Hall (Agora)
Size – 100,000 sq ft (9,290 sq m) extension


Comprising an enhanced retail offer within a Victorian Grade II Listed Market Hall, new tenants secured to date include anchor units for Zara and H &M Hennes with 75% of
the new floor space now pre-let. Completion is anticipated in September 2008.


Preston, Fishergate Shopping Centre (Agora)
Size – 190,000 sq ft (17,651 sq m) extension


A revised planning approval was granted in 2007. Discussions for pre-lettings with potential tenants for a variety of scheme configurations are ongoing. The scheme options
under consideration are aimed at generating an uplift in the value of the existing centre as well enhancing the retail offer and car parking available to shoppers. Existing
tenants include Debenhams and Primark.


Birmingham, Pallasades Shopping Centre/New Street Station ‘Gateway’ (Agora Max)


Network Rail, Birmingham City Council and Advantage West Midlands are promoting significant works to New Street Station and the Pallasades Shopping Centre above.
We are in active discussions with the consortium with a view to securing a beneficial joint venture relationship. There is additional potential to refurbish and upgrade
Ladywood House, a 95,000 sq ft (8,826 sq m) office building over the station, to provide high quality office accommodation in close proximity to this important transport
interchange.


Various Industrial Projects (Ashtenne Industrial Fund)
The growth and delivery of the development pipeline within the Ashtenne Industrial Fund continues apace. Construction has started on 78,000 sq ft (7,246 sq m) at the
Tameside Business Centre in Manchester and planning consent has been obtained for 80,000 sq ft (7,432 sq m) of new industrial space in Irvine, Scotland as well as a 35,000
sq ft (3,251 sq m) extension to an existing unit in Wolverhampton.


Projects completed during the year include:


Folkestone, Bouverie Place Shopping Centre (Wholly Owned)
Size – 200,000 sq ft (18,580 sq m) New Development


Practical completion of this new shopping centre occurred in November 2007. This mixed-use scheme is anchored by an 83,000 sq ft (7,710 sq m) ASDA supermarket and
was 93% pre-let by area on opening. Bouverie Place has brought 15 new retailers to Folkestone and is a key part of the ongoing regeneration of the town.


Leicester, Bardon Antalis Unit (Radial)
Size – 54,000 sq ft (5,017 sq m) Extension


The Radial Distribution Fund successfully completed the extension of this unit at the Interlink Park distribution facility. The 54,000 sq ft (5,016 sq m) extension, which
included 9,500 sq ft (882 sq m) of ancillary office accommodation, was completed on time and on budget whilst meeting the specifications and deadlines agreed with the
tenant, Antalis UK Ltd, who remained in occupation of the existing unit throughout the development process.


Various Industrial Projects (Ashtenne Industrial Fund)
Highlights include the completion of 85,000 sq ft (7,897 sq m) of industrial space at Quedgeley, Gloucestershire and a further 93,000 sq ft (8,640 sq m) at Optima Park in
Crayford, Kent.




                                                                                         8
                                                            AGORA AND AGORA MAX SHOPPING CENTRES


                                                        AGORA                                               AGORA MAX
                                           VALUE: £244 MILLION (DTZ)                              VALUE: £276 MILLION (DTZ)
                                      RENTAL INCOME: £12.1 MILLION PA                         RENTAL INCOME: £16.2 MILLION PA




The Agora and Agora Max joint ventures are owned 50/50 with Bank of Scotland. Agora was launched in 2003 and following the successful track record established over its
first five years, the fund was extended in March 2008 for a further five years.


Originally set up to invest in shopping centres in the north-west of England, the shopping centre business was expanded in October 2005 through the establishment of Agora
Max, a Jersey Property Unit Trust which invests in shopping centres between £100 and £200million in value with potential for improvement through substantial
refurbishment/extension projects.


The year has witnessed reducing capital values for the businesses and more difficult trading conditions for retailers. Sustaining income streams, increasing rental value and
other asset management initiatives including commencement of extension projects have generated outperformance by Agora and Agora Max against the IPD Shopping Centre
benchmark (minus 7.6% return for year to 31 March 2008 compared with benchmark return of minus 8.0 %).


Returns next year will be generated by income yield and high quality asset management against an uncertain short term economic outlook. Securing income, minimising
voids, continuing the push for rental growth and specific asset management initiatives will continue to be the focus of our attention. Benefits are expected to flow from the
recent portfolio wide appointments of a specialist Commercialisation Manager and National Marketing Manager to create new income from non-core sources such as poster
sites, telecoms, media sales and temporary lettings. The shopping centre void levels stand at 8.9% for Agora Max by ERV and 6.3% for Agora compared with the IPD
Shopping Centre Benchmark for March 2008 of 9.8%. The void units represent a potential income stream of £ 3.2million pa.


AGORA


As at March 2008 the joint venture comprised four assets with a total lettable area of 1.2million sq ft (104,100 sq m).


BOLTON, MARKET PLACE & MARKET HALL – COMMENCEMENT OF DEVELOPMENT WORKS


Works began in April 2007 on the development of the Grade II Listed Market Hall adjoining the Market Place Shopping Centre. Construction is on programme for
completion in autumn 2008, creating 100,000 sq ft (9,290 sq m) of new retail space. Over 70% of the new development is pre-let including lettings to leading fashion
retailers such as H&M Hennes and Zara.


Within the Market Place approaches have been received from existing retailers seeking to expand in anticipation of increased business on completion of the Market Hall
development. Plans are now being prepared to reconfigure accommodation, upgrade the existing mall and to improve pedestrian access to and egress from the car park.


MANCHESTER, MIDDLETON SHOPPING CENTRE – IMPROVEMENT WORKS


Following the success of the 54,000 sq ft Phase 1 extension, further progress has been made with the refurbishment of the roof level car park and upgrade of the Middleton
Gardens entrance. Rents achieved on new lettings have generated open market evidence at £75 to £78 Zone A (previously £72 per sq ft) increasing the rental valuation tone of
the centre thereby reducing the impact of adverse yield movement on the capital value. Further initiatives are planned including reconfiguration of part of the ground and part
of the second floor.


The other shopping centres in the fund are Fishergate Shopping Centre, Preston, where discussions continue with the council regarding its extension, and Cavern Walks in
Liverpool where further improvements to the retail and office accommodation are planned.


Income Security


The top 15 tenants by value of contracted rent, representing 43% of total rent roll, are “low risk” or better.




                                                                                          9
AGORA MAX


As at March 2008 the joint venture owned The Grange and Pyramids Shopping Centre in Birkenhead, and The Pallasades Shopping Centre, Birmingham.


BIRMINGHAM, PALLASADES SHOPPING CENTRE – MAJOR DEVELOPMENT WORKS


The Pallasades Shopping Centre is situated in a prime location above New Street Station with a footfall of 420,000 per week generated by commuters and shoppers. Network
Rail and Birmingham City Council are promoting the redevelopment of part of the station and shopping centre to create a flagship transport interchange and we are working
with them to achieve the best possible outcome for all parties.


Capitalising on a solid office market in Birmingham, the refurbishment of 95,000 sq ft (8,830 sq m) Ladywood House, which sits above the centre, is planned to start in July
2008 and complete in spring 2009.


Income Security


14 of the top 15 tenants by value of contracted rent, representing 34% of total rent roll, are “low risk” or better.




                                                                                          10
                                                                        RADIAL DISTRIBUTION FUND
                                                                          VALUE: £261MILLION (DTZ)
                                                                    RENTAL INCOME: £18.3MILLION PA


The Radial Distribution Fund is a joint venture with Bank of Scotland, managed by a specialist logistics team and owns 16 properties in 10 of the UK’s most popular
distribution locations, totalling more than 3.3million sq ft (307,500 sq m).


Careful stock selection over recent years has ensured the portfolio now represents a blend of security and opportunity. Three properties benefit from formally demised
expansion land plots which can be utilised to generate additional revenue and asset management returns as the Fund’s activities at Interlink Park, Bardon, Leicestershire have
demonstrated this year. Five properties, while still fully occupied in the medium term, offer opportunity to create value through refurbishment, reconfiguration and
renegotiation of the occupational agreements. The remainder are let on longer leases, providing additional security.


The Fund’s value fell from £303.7million in March 2007 to £260.9million. The annual un-geared total return to March 2008 was minus 9.3% compared to the IPD
Distribution Warehouses (Outside London) Benchmark of minus 12.5%


The underlying prime quality of the assets, their asset management potential and the management team’s ability to capture the opportunities should provide the platform for
continuing benchmark beating returns.


Interlink Park, Bardon


During the past year, Radial has developed a 54,000 sq ft extension to its modern 227,000 sq ft distribution facility in Leicestershire, on behalf of the tenant, Antalis Limited.
The project, with an overall budget of £4.5million, presented several special challenges, as the end user had to remain in full occupation of the existing space throughout and
occupation by early December 2007 was a prerequisite. An upcoming rent review was settled simultaneously at a 5% premium to ERV (21% total uplift on previous passing
rent) and a new overriding lease on the whole building secured for a further 5 years until 2022.


Work began on site in April 2007; practical completion was achieved in November 2007 ahead of schedule and under budget, enabling Antalis to move in before Christmas as
planned.


The project showcases the Fund’s rationale to acquire high quality logistics facilities, where enhanced returns can be captured through active management and a positive
approach to tenant relationships.


Europe


Logistics business activity has an increasingly international outlook. This is driven partly by the widening reach of the logistics industry’s customers, but also by the ongoing
process of consolidation amongst third party logistics operators. These characteristics make the case for Radial to expand into mainland Europe in due course with a
preference for established locations in Holland, France and Germany. The management of Warner Estate’s wholly owned logistics property in Holland has also been
transferred to Radial, which will ensure all the Group’s European logistics activity benefits from a consistent management service.


Income Security


13 of the total 15 tenants by value of contracted rent, representing 73% of total rent roll, are “low risk” or better.




                                                                                          11
                                                                        GREATER LONDON OFFICES
                                                                         VALUE £96MILLION (CBRE)
                                                                         RENT ROLL £5.3MILLION PA


In only its second year of operation, the Greater London Offices joint venture with Barclays Capital continued to consolidate its income performance which helped lessen the
impact of market wide downward yield movements.


The larger of the two assets held, 55 Old Broad Street has seen a considerable amount of management activity, the key highlights of which being securing 100% occupancy
and achieving rents of £41 per sq ft against estimated rental value of £37.50 per sq ft. A combination of c. 33,500 sq ft of new lettings to MWB Business Exchange Plc and
the settlement of outstanding retail rent reviews ahead of expectation will increase rental income by c. 12% from £3.5million pa a year ago to £3.9million pa. Other scheduled
improvements to the building include a possible infill of a raised level former public area which would create a further 5,500 sq ft of lettable space.


Central House, Camperdown Street, remains fully let to Maersk, one of the world’s largest shipping companies, and is well positioned to benefit from the planned transport
and public realm improvements underway to the south of the Aldgate Gyratory.


Income Security


14 of the top 15 tenants by value of contracted rent, representing 94% of total rent roll, are “low risk” or better.




                                                                                          12
                                                                        APIA REGIONAL OFFICE FUND
                                                                         VALUE £451MILLION (DTZ)
                                                                    RENTAL INCOME £29.0MILLION PA


Investors in the Apia Regional Office Fund gain access to a well diversified portfolio invested in the regional office sector providing stability of income and lower volatility
than the London office market.


Jointly managed and co-invested with Morley, the Fund has 22 buildings in 16 locations across the UK with a value of £451million and an average building lot size of
£20.5million.


At property level Apia returned 0.2% compared to its IPD benchmark of minus 4.8% to outperform over the 12 months to 31 December 2007 (its financial year). When
combined with the outperformance recorded during the previous year the two year average to its financial year – 31 December 2007 is 10.2% (benchmark 6.3%). On an
annual basis to the Group’s year end, 31 March 2008, the two year average total return is 5.2% (benchmark: 1.9%).


Void levels reduced by nearly a third to 5.1% and rental income increased by approximately £1million pa. The initial yield increased from 5.2% to 6.0% resulting in a 10%
fall in value. The void level fell further to 4.9% at 31 March 2008.


In challenging market conditions the strategy for the Fund for the forthcoming 12 months will be to lessen the impact of forecast value decline by enhancing income levels
and continuing its record of successful asset management initiatives.


Edinburgh, Apex 123, Haymarket Terrace


During a 12 month period, the Fund successfully refurbished and let 80% of the office accommodation taken as part of an early lease surrender within this building at £21.50
per sq ft against ERV of £20.00 per sq ft.


Milton Keynes, Ashton / Norfolk House


Milton Keynes is fast emerging as a strategic location for business with improving transportation links, leisure and availability of housing. Against this backdrop, the Fund
successfully secured the early surrender of a c. 10,000 sq ft office floor within the building and secured The Foreign and Commonwealth Office, moving from Whitehall, as a
replacement tenant at a record rent for the building of £14.00 per sq ft on space previously let at £12.00 per sq ft.


Income Security


Approximately 70% of the total income in Apia is classified as “low risk” or better; 14 of the top 15 tenants by value of contracted rent, representing 36% of total rent roll, are
“low risk” or better.




                                                                                         13
                                                                THE ASHTENNE INDUSTRIAL FUND (AIF)
                                                               VALUE - £1.16BILLION (KING STURGE/DTZ)
                                                                   RENTAL INCOME - £71.7MILLION PA


In an environment of outward yield movement and declining property values, during its financial year to 31 December 2007 AIF produced a positive return of 0.8% against a
negative benchmark return minus 2.7%, resulting from a stronger income return and a lower decline in values than the benchmark.


AIF ended its financial year to 31 December 2007 with a valuation of £1.20billion. This represented a decline of minus 3.82% on a like for like basis over the year. Its
benchmark, IPD All Industrials experienced a valuation fall of minus 7.5% over the same period.


Deliberately there were fewer purchases than in previous years and a continuing focus on improving rental income. AIF bought £3.9million of assets, all opportunistic,
special purchases capturing marriage value identified by our local teams. The year saw the bedding in of earlier acquisitions including the Space Northwest business and saw
the sale of £34.3million of ex-growth assets at a gross profit of £4.6million.


The industrial market witnessed good occupier demand particularly in the sub 10,000 sq ft category where the majority of AIF assets are focussed. Like for like rental income
increased by £2.2million or 3.2% and rental growth increased by 1.45%.


As at 31 March 2008, AIF had a gross asset value of £1.16billion comprising 416 assets totalling 21.63 million sq ft.


Space Northwest
Space Northwest is the joint venture partnership created between AIF and the North West Development Agency for circa £140million of multi-let property in the Merseyside
and Cumbria regions.


Since the property transfer in December 2006, the portfolio has been restructured and aggressively managed to generate performance and the void rate at acquisition of
849,000 sq ft or 37%, has been reduced by a quarter to 677,000 sq ft.


Alternative Use Sites
A review of the portfolio has identified 35 sites with various potential higher value alternative uses from industrial to uses such as residential, retail and mixed use.


In February 2008 planning permission was obtained for a 10,000 sq ft supermarket and 25 flats in Coventry. In April three planning applications for residential development
were submitted for 89 houses and flats at Brownhills Business Park, Walsall; 91 houses at Howdon Green Industrial Estate, North Tyneside; and, the conversion of Lancashire
House, Preston into 35 flats.


The largest schemes commenced in the year are the master planning of the redevelopment, for residential and industrial, of the 120 acres at South Newmore, Irvine; and 60
acres at West Byrehill, Nethermains, both in Scotland.


Ashtenne Regional Offices
The AIF regional office network employs 102 specialist and highly motivated staff across 7 regional offices and its proximity to the assets and detailed local knowledge are
the key features in delivering outperformance. The regional teams have made significant strides in securing income through completion of renewals and letting of vacant units
reducing the void level from 11.1% to 9.9%, beneath the funds target void rate of 10% to 14%, set to allow flexibility to retain tenants within the business when they are
seeking to expand or contract.




                                                                                         14
FINANCE REVIEW


This is the first year of reporting our results as a REIT. As the comparatives include a number of significant one-off costs and income, these have been highlighted below to
show the underlying performance of the business on an ongoing basis. In terms of the impact of being a REIT, the Group paid no corporation tax on its REIT income or
capital gains tax on the capital profits made in the period. The favourable taxation treatment of REITs has saved the Group £8.1million of taxation in the current year and the
capital gains tax saving alone this year is equivalent to 27% of the REIT conversion charge paid by the Group excluding the joint ventures.


The results also include the full year impact of the acquisition of JS Real Estate PLC in March 2007.


Results for the year ended 31 March 2008


The tables below illustrate the constituent parts of the results for the year which are set out in full in the Financial Statements. The share of joint ventures’ post tax results
shown as one line in our income statement have been reanalysed to give for each line item, where applicable in the tables below, the Group’s result and its share of joint
ventures.


                                                                                                   31 March 2008    31 March 2007
                                                                                                             £m                £m


Recurring operating profit                                                                                  30.0             23.7
Performance fees                                                                                            (0.9)              5.1
Non recurring operating profit                                                                               8.0               2.3
                                                                                                            37.1             31.1
        (1)
Interest                                                                                                   (19.5)           (10.8)
Debt reorganisation costs                                                                                   (0.3)            (8.7)
                                                                                                           (19.8)           (19.5)


Realised profit before tax                                                                                  17.3             11.6
Current tax credit / (charge)                                                                                2.7             (4.7)
REIT conversion charge                                                                                          -           (13.7)
Profit/(loss) after tax                                                                                     20.0             (6.8)
Valuation movements (net of deferred tax)                                                                 (133.5)            76.2
(Loss)/profit for year                                                                                    (113.5)            69.4
(1)           Excluding share of joint ventures, which is included in recurring operating profit



The year on year increase in realised profits is distorted by prior year one-off transactions relating to the conversion to a REIT on 1 April 2007. Recurring operating profit is
up 27% as analysed below:


                                                                                                   31 March 2008    31 March 2007
                                                                                                             £m                £m
Operating profit before net movements on investments                                                        20.6             24.8
Distribution from funds                                                                                      6.1               6.0
Share of JV profit/(loss) before fair value movement, capital profits & tax                                  2.3             (3.1)
Performance fees – net provision                                                                             0.9             (5.1)
Other non-recurring items                                                                                    0.1               1.1
Recurring operating profit                                                                                  30.0             23.7


Net income from property investment activities is the key driver of this performance, having increased by over 50% in the year primarily due to the acquisition of JS Real
Estate PLC. The improvement in our share of joint venture income arises from a renegotiation of the fee structure in two of the joint ventures and the fact that no performance
fees are being paid this year by the joint ventures. Management fees arising from the Apia Regional Office Fund (Apia) and the Ashtenne Industrial Fund (AIF) are up 14%
at £13million even though the majority of these fees relate to property valuations. Recurring operating profit includes administrative costs (including share of joint ventures)
of £18.0million (2007: £17.4million) of which a proportion is allocated to property management expenses and asset management expenses. The increase of £0.6million
mainly relates to staff costs. During the year we have transferred the Group’s purchase ledger, sales ledger, credit control, cash book and data input functions from London to
our regional offices in Birmingham and Preston. We are performing ongoing reviews of supply and service agreements and, in addition, we have liquidated seventy corporate
entities, thereby reducing complexity and cost. These actions have taken place over the course of the last three months of the year giving rise to approximately £0.1million of
net savings in the current year. However, the annualised savings are of the order of £0.7million.



                                                                                                    15
Recurring Profit


Although recurring operating profit has increased, as shown in the table below, recurring profit before performance fees has fallen by £2.4million to £10.5million. This has
arisen mainly because the average interest cost on the net acquisitions of property in the year exceeded rental income from those properties, with the properties being
purchased at an average yield of 5.4% after costs against an average cost of debt of 6.5%. The properties were purchased in the knowledge of the short term profit impact as
they had potential for rental growth using the Group’s asset management expertise. Also since the acquisitions, the average cost of this additional debt has now fallen to
around 5.8%.


                                                                                      31 March 2008            31 March 2007
                                                                                                   £m                      £m
Recurring operating profit                                                                        30.0                    23.7
Interest                                                                                        (19.5)                   (10.8)
Recurring profits before performance fees                                                         10.5                    12.9


Performance Fees


In 2007 we received a net £3.3million of performance fees as a result of the renegotiation of the joint venture asset management agreements. No performance fees are
receivable from joint ventures this year. We have received a £0.7million performance fee from Apia this year (2007: £1.8million). However we have made an assessment as
to the likelihood of a clawback of fees paid to date on Apia and have provided for £1.6million. The maximum Group exposure to a performance fee clawback is £2.5million
including the £1.6million provided for above.


                                                                                      31 March 2008            31 March 2007
                                                                                                   £m                      £m
Joint ventures                                                                                       -                     3.3
Funds                                                                                              0.7                     1.8
Provision for clawback                                                                           (1.6)                        -
                                                                                                 (0.9)                     5.1




Non-recurring Operating Profit                                                        31 March 2008            31 March 2007
                                                                                                   £m                      £m
Profit on sale of investment properties and investments                                            8.2                     3.2
Profit on sale of trading properties                                                                 -                     1.0
Costs relating to conversion to a REIT                                                               -                    (1.6)
Other net non-recurring costs                                                                    (0.2)                    (0.3)
                                                                                                   8.0                     2.3


Other non-recurring costs of £0.2million include a provision of £1.2million against the leasehold liability portfolio.


Interest and Debt Reorganisation Costs


The interest cost in 2007 included £8.7million relating to debt reorganisation costs required as part of the REIT conversion exercise. The £0.3million debt reorganisation cost
this year relates to the repayment of the debt facility on the development of Folkestone. The increase in interest this year is due to increased borrowings to finance
acquisitions, a full year’s expense on the borrowings to acquire JS Real Estate, and an increase in interest rate on the unhedged portion of the Group’s debt.




                                                                                        16
Valuation Movements


                                                                                          31 March 2008                      31 March 2007
                                                                                                       £m                                £m
Property
Wholly Owned                                                                                        (50.7)                              11.2
Share of Joint Ventures                                                                             (63.3)                              17.7
Investment in Funds                                                                                 (21.2)                              16.9
                                                                                 91%               (135.2)           87%                45.8
Other Investments                                                                 3%                  (3.9)           -5%               (2.8)


Swaps & Caps Marked to Market
Wholly Owned                                                                                          (1.9)                               1.0
Share of Joint Ventures                                                                               (7.4)                               8.7
                                                                                  6%                  (9.3)          18%                  9.7
Total Valuation Movements                                                       100%               (148.4)           100%               52.7
Deferred Tax on Valuation Movements                                                                   14.9                              23.5
                                                                                                   (133.5)                              76.2


The movement in other investments relates primarily to a reduction in the value of the Group’s unlisted investment in Bride Hall Group Limited of £3.0million.


Taxation


As a REIT, all profits, whether revenue or capital, that arise within the REIT part of the Group are not taxable. As the non-REIT element of the business in total made a loss,
there is no corporation tax payable in the period. However, these losses are available to carry back to prior years thus giving rise to a taxation receivable of £2.1million. The
Group continues to account for deferred tax on listed and unlisted investments as these do not fall within the REIT regulations although any distribution income from the
Funds is not subject to tax. Movements on the value of interest rate swaps are also subject to deferred tax. In addition, our share of joint venture results includes deferred tax
movements on the valuation of properties within those joint ventures, Agora Max and Greater London Offices, which have not been elected for REIT status.


The taxation charge can be summarised as follows:
                                                                                               31 March 2008                   31 March 2007
                                                                                                              £m                            £m
Current taxation
Group                                                                                                          2.9                        (5.2)
Joint Ventures                                                                                             (0.2)                            0.5
                                                                                                               2.7                        (4.7)
Deferred taxation movements during the year
Group                                                                                                          7.1                        (4.5)
Joint Ventures                                                                                                 7.8                        (5.5)
                                                                                                              14.9                       (10.0)
REIT conversion charge
Group                                                                                                            -                       (10.9)
Joint Ventures                                                                                                   -                        (2.8)
                                                                                                                 -                       (13.7)
Release of deferred taxation due to REIT conversion
Group                                                                                                            -                         22.3
Joint Ventures                                                                                                   -                         11.2
                                                                                                                 -                         33.5
Net tax credit in the income statement                                                                        17.6                          5.1


The reconciliation of the Group taxation charge is set out in Note 9 of the Accounts.




                                                                                        17
Earnings per Share


Losses per share were 203.6p (2007: 129.3p earnings) of which fair value movements on properties and investments were losses of 239.2p per share (2007: 142.0p earnings).
Realised earnings per share, which exclude these fair value movements, were 35.6p (2007: 12.7p loss) and recurring earnings per share, which also exclude fair value
movements, were 22.6 p (2007: 30.5p).


Dividends


Under the REIT rules, 90% of the profits of the property rental business (the REIT profits) for the year must be distributed by way of a dividend known as a Property Income
Distribution (“PID”). This distribution of the final dividend will be made net of 20% withholding tax unless shareholders have filled in the appropriate forms, allowing the
dividend to be paid gross, details of which are on the Group’s website.


Cashflow


                                                                                                  March 2008                      March 2007
                                                                                                            £m                             £m
Operating profit before net gains on investments                                                           20.6                           24.8
Distributions received from funds                                                                           6.0                            6.3
Working capital movements                                                                                   2.7                          (22.2)
Adjusted cash generated from operations                                                                    29.3                            8.9
Net interest paid                                                                                        (18.5)                          (19.3)
Corporation tax received/(paid)                                                                             0.4                          (11.2)
Net acquisitions                                                                                         (49.8)                          (65.1)
Repayment of JSRE loan notes                                                                             (16.4)                               -
Net repayment of bank loans                                                                              (32.4)                         (68.0)
Net proceeds from issue of ordinary share capital                                                           0.3                           21.4
Dividends paid                                                                                           (12.6)                         (10.7)
Other                                                                                                     (1.1)                            1.0
Net cash outflow                                                                                        (100.8)                        (143.0)


Last year the cash flow included £9.5million of costs in relation to the setting up of the REIT of which £1.0million was included in the adjusted cash from operations and
£8.0million in net interest paid which mainly related to the early repayment of high coupon debt. If these are adjusted for the cash inflow after interest of £10.8million this
year compares to an outflow of £1.4million last year.




                                                                                        18
Balance Sheet


The movement in equity shareholders’ funds is analysed in the table below. The movement in the year includes the Group’s share of joint ventures.


                                                                                                              £m               Pence per share
Equity shareholders’ funds at 31 March 2007                                                                432.7                          773.8
Change in number of shares in issue                                                                                                            3.8
                                                                                                                                          777.6
Movement in the year to 31 March 2008
Realised profit before fair value gains                                                                      17.3                          31.1
Net fair value gains                                                                                      (148.4)                       (266.7)
Taxation – current                                                                                            2.7                              4.9
Taxation – deferred                                                                                          14.9                           26.7
Loss for the year                                                                                         (113.5)                       (204.0)


Other equity movements
Shares issued                                                                                                 0.3                            0.6
Dividends paid                                                                                             (12.5)                         (22.5)
Investment in own shares                                                                                    (1.6)                          (2.9)
Share based payments reserve                                                                                (0.3)                          (0.5)
Actuarial gains on retirement benefit obligations                                                             0.1                              0.2
Equity shareholders’ funds at 31 March 2008                                                                305.2                       548.5


Of the £127.5million decline in equity shareholders funds, £133.5million arises from valuation movements which have been detailed above and are almost entirely due to the
net impact of the decline in the value of the Group’s property assets held either directly or indirectly through joint ventures or investments in funds, with a positive
£6.0million being the net impact of realised profits less other outgoings.


As shown in the table below, the equity shareholders’ funds have been adjusted for the remaining deferred tax on fair value gains on the Group’s investment in the Funds,
Apia and AIF, along with our share of the fair value gains in the joint ventures, Agora Max and Greater London Offices, which have not been elected for REIT status. The
Group does not anticipate this deferred tax to materialise. In addition, we have adjusted for the fair value on fixed rate debt which is not included on the balance sheet.


These adjustments result in an adjusted net asset value per share of 557p.


                                                                                    31 March 2008                            31 March 2007
                                                                                     £m         Pence per share             £m      Pence per share
Equity shareholders’ funds                                                        305.2                    549            432.7                      774


Add back deferred tax on fair value gains (including JVs)                            4.8                     8             19.0                       34
(Less) / add fair value adjustments on fixed rate debt, net of tax                 (0.1)                      -             0.7                       1
Add fair value gain on development at Folkestone                                       -                      -             1.2                       2
Adjusted equity shareholders’ funds                                               309.9                    557            453.6                      811




                                                                                           19
Borrowings

Total net borrowings for the Group as at 31 March 2008 were £347million (2007: £277million).


                                                                                                                        Share of joint    Share of
                                                                                           On balance sheet             ventures          funds       Total
                                                                                                                        £m                £m          £m
Short-term debt                                                                                            55.4(i)                (9.6)       (5.1)       40.7
Net long term debt                                                                                          291.3                342.2        94.3       727.8
Total net debt at 31 March 2008                                                                             346.7                332.6        89.2       768.5
Of which:
Total net recourse debt                                                                                     321.5                     -           -      321.5
Long-term non-recourse debt                                                                                  25.2                332.6        89.2       447.0


Gearing (on adjusted shareholders’ funds)                                                                  112%                                          248%
Recourse gearing                                                                                           104%                                          104%


Total net debt at 31 March 2007                                                                             276.7                321.8        90.7       689.2
Gearing (on adjusted shareholders’ funds)                                                                    61%                                         151%
Recourse gearing                                                                                             55%                                          55%
(i)         £55million of Group debt was renewed in June 2008 and will therefore now be classified as long term debt.



Gearing has risen substantially over the last year. Of the increase of 51%, 14% is represented by additional debt taken on in the year to fund net acquisitions and the balance
has arisen from the devaluation of the Group’s assets, partly offset by retained profits. Gearing falls to 109% when adjusted for property disposal proceeds outstanding at 31
March 2008. The devaluation in property in the year of £135million, of which £51million was attributable to directly owned property, £63million arose from the investments
in joint ventures and £21million from the funds, was responsible for the majority of the increase in gearing. This is a direct result of the Group’s equity exposure to directly
owned property, investments in joint ventures, which are themselves highly geared, and investments in funds. As at the year end, this equity exposure was £1,095million
(2007: £1,172million) against adjusted equity shareholders funds of £310million (2007: £454million). Such a structure, which is in part required for the asset management
business under the terms of the asset management contracts, works to the Group’s advantage when values are rising or stable but the reverse when values are falling.


The Group is addressing this exposure via its normal ongoing programme of disposing of assets where their potential for asset management has been maximised which will
both reduce the Group’s overall debt and its overall equity property exposure. The Group also continues to have the objective of converting further of its joint ventures into
more lowly geared funds which will further reduce the Group’s equity exposure as well as enhancing asset management fee income.


The Group’s average cost of debt at the year end was 5.84% (2007: 6.18%).




                                                                                                             20
The Group’s loan to value and income cover ratios at the year end are set out below:


                                                                             31 March 2008               31 March 2007
                                                                                         £m                          £m


Net Debt                                                                               346.7                       276.7
Property                                                                               458.3                       461.4
Investments in Funds                                                                    98.4                       119.6
Total security                                                                         556.7                       581.0
Loan to Value %                                                                       62.3%                       47.6%


Rental & Investment Income                                                              34.2                        30.5
Interest Payable                                                                        20.9                        15.9
Income Cover                                                                            1.64                        1.92


The Group had unutilised facilities at 31 March 2008 of £93million (2007: £163million) of which £41million (2007: £64million) were available for drawing, which are
sufficient to meet our working capital requirements. Since the year end the Group has loaned £7million to the Agora Max joint venture which, together with an identical loan
from our partners, has been used to reduce the debt within this joint venture. The reduction in headroom arising from this loan has in part been offset by subsequent cash flow
including property disposals. When account is taken of the post year end disposal proceeds loan-to-value falls to 60.5%. Of the Group’s borrowing facilities of £415million,
£325million is not due for renewal until 2010 and a further £60million until 2011.


In the joint ventures Agora Shopping Centres is financed 62% by debt and 38% equity and rental income covers interest 1.4 times. In Radial there are two facilities financed
by 83% debt and 17% equity and rental income covered interest 1.3 times. The Agora Max joint venture is funded 79% by debt and 21% equity and rental income covers
interest 1.2 times. The Greater London Office joint venture has debt of £72.2million as at 31 March 2008 and is financed 75% by debt and 25% equity and rental income
covers interest 1.3 times.


At 31 March 2008, the Group held investments in the Apia Regional Office Fund and the Ashtenne Industrial Fund amounting to 27.4% and 6.5% respectively. As at that
date, Apia had net debt of £227million with property under management of more than £450million and AIF had debt of £450million with property under management of more
than £1.0billion.    Apia had a net loan-to-value ratio of 50% and 2.2 times rental income to interest cover, and AIF had a net loan-to-value ratio of 41% and 2.4 times rental
income to interest cover.


Hedging


The interest rate exposure on the Group’s debt is managed to ensure that there is a balance between flexibility and certainty. The Group has £220million of hedging against
Group debt including a £150million 5-year cap at 6.25%, put in place at a cost of £0.9million in 2007 and two £25million 25-year callable swaps, one at a rate of 4.34% and
callable by the bank at 31 March 2009 and every two years thereafter, the other at a rate of 4.16% with the first call at 31 December 2009 and then every two years thereafter.
The callable swaps have a blended rate of 4.25% and have been staggered so that there are different call dates. In addition the Group has a £25million callable swap at 3.84%
from March 2009. The Group intends to put further swaps in place at the appropriate time to build up 80% to 90% of cover on the floating rate debt. The intention is that
these swaps will have different maturity and call dates, thereby ensuring that if any one of the swaps is called there will still be more than 75% of cover on the floating rate
debt.


                                                                                    Group                Share of Joint
Net Debt as at 31 March 2008                                               on Balance Sheet                  Ventures
                                                                                        £m                          £m
Fixed rate debt                                                                          25.3                           -
Floating rate debt                                                                      321.6                      332.6
                                                                                        346.9                      332.6
Percentage of floating rate loans at 31 March 2008
           Covered by swaps                                                              20%                        73%
           Covered by caps                                                               43%                        23%
                                                                                        63%                         96%
Percentage of floating rate loans at 31 March 2007
           Covered by swaps                                                              18%                        70%
           Covered by caps                                                               39%                        23%
                                                                                        57%                         93%




                                                                                        21
In respect of the Group’s share of £332.6million of net debt in the joint ventures, £175.0million (our share £87.5million) is fixed at 4.1% by two swaps, £94.6million (our
share £47.3million) is fixed by a swap at 4.96%, £109.5million (our share £54.8million) is fixed by a swap at 4.5775%, £72.2million (our share £36.1million) is fixed by two
callable swaps at 4.49% and £37.1million (our share £18.6million) is a zero coupon swap fixed at 5.89%. There are two enhanced collars, the first for £124.2million (our
share £62.1million) is capped at 5.0% and the second for £27.0million (our share £13.5million) is capped at 5.5%, leaving approximately £13million uncovered. Since the
year end the 4.1% swaps have been replaced with three £50million (our share £25million) swaps at 4.375%, 4.35% and 4.3% and a further £85million (our share
£42.5million) swap at 4.67%.


Both of the Funds, Apia and AIF, were more than 80% covered through a combination of swaps and caps as at 31 March 2008.


Leasehold Liability Portfolio


The balance sheet includes £3.0million (£12.0million at acquisition) in respect of liabilities acquired with the portfolio of properties purchased in December 2005 from the
Co-operative Insurance Society. At the acquisition date, there were 105 separate leasehold liabilities of which 45 are remaining with 15 of these sublet as at 31 March 2008.
The Group has reassessed the value of these liabilities at March 2008 using an independent model that has been used since the purchase of this portfolio of liabilities to assess
its value, as a result of which the provision was increased by £1.2million due to the stiffening market conditions.


Return on Capital


The return on capital is amended for deferred tax and fair value movements. However, because of REIT conversion, there are still a number of adjustments in the table with
respect to the prior year that are shown to ensure comparability.


                                                                            31 March 2008               31 March 2007
                                                                                         £m                            £m


Realised profit /(loss) after tax(1)                                                    20.0                          (6.8)
Add back REIT conversion charges                                                             -                        13.7
Add back one-off costs arising from REIT conversion                                          -                         8.5


Realised return on shareholders’ funds                                                  20.0                          15.4
Valuation movements during the year                                                  (133.5)                          76.2
REIT conversion charges                                                                      -                    (13.7)
One-off costs arising from REIT conversion                                                   -                        (8.5)
                             (2)
(Loss)/profit for the year                                                           (113.5)                          69.4
(Less)/add back deferred tax movement on revaluations                                  (12.0)                          7.5
during the year
Change in fair value of fixed rate debt, net of tax                                     (0.8)                          5.8
Release of deferred tax due to REIT conversion                                               -                    (33.5)


Total adjusted return for the year(3)                                                (126.3)                          49.2


Weighted average equity shareholders’ fund at start of year                            391.7                      311.4
      (1)   Realised return on shareholders’ funds                                     5.1%                           4.9%
      (2)   Total return on shareholders’ funds                                      -29.0%                      22.3%
      (3)   Adjusted return on shareholders’ funds                                   -32.3%                      15.8%


Asset Management


This business now manages £2.5billion (2007: £2.8 billion) of assets in the joint ventures and the funds and has seven regional offices which employ 124 people (2007: 121
people) of which 37 (2007: 31) are service charge recoverable. AIF and Apia have three and thirteen years to run respectively.




                                                                                        22
Asset management income statement                                          31 March 2008               31 March 2007
                                                                                        £m                         £m
Asset management and other fees                                                        14.0                      13.9
Direct expenditure                                                                   (10.7)                      (9.4)
Operating profit                                                                        3.3                        4.5
Head office recharges                                                                 (1.9)                      (2.8)
                                                                                        1.4                        1.7
Performance fees                                                                        0.7                        8.5
Provision against performance fee clawback                                            (1.6)                          -
Profit before reallocated costs                                                         0.5                      10.2


Operating margin                                                                      24%                        32%


Whilst fees only increased by £0.1million to £14.0million in the year, the fees received from the asset management of Apia and AIF were up 14% at £13.0million. This
increase arose, despite a reduction in property valuations on which these asset management fees are based in the second half of the year, due to fees received from AIF in
respect of acquisitions, disposals, developments, lettings and service charge management. The improvement in fees from the funds was offset by a reduction in fees from the
Agora and Radial joint ventures where the management fees reduced from 5% to 1.5% of rents collected as a result of a renegotiation of their asset management agreements as
part of the REIT conversion process.


The year-on-year movement on direct expenditure and head office recharges has been distorted due to the allocation of costs between the two headings. In total, costs have
risen by 3% to £12.6million (2007: £12.2million).




                                                                                      23
The table below briefly summarises the main terms on which the Group received its management fee income:


                                            Management              Management                                                                                                          Property
                Equity       Year                Fee %                   Fee %                                                                                                         Valuation                    Rent Roll
Name              %          End               Property                   Rent                   Other Fees          Performance Fees                                              31 March 2008                31 March 2008

AIF             6.5%         31/12(a)                   0.5%                     N/A          Lettings, rent         Based on outperforming the IPD all                                      £1,155m                  £71.7m
                                                                                                     reviews,        industrial index on a 3-year rolling
                                                                                                   disposals,        basis
                                                                                               additions etc


Apia            27.4%        31/12(b)                   0.4%                     N/A                      N/A        Based on outperforming the IPD                                          £451.1m                  £29.0m
                                                                                                                     regional office index (excluding
                                                                                                                     business parks) on a 3-year rolling basis


Agora            50%         31/03                       N/A                       5%                     N/A        Based on exceeding an IRR of 20%                                        £275.8m                  £16.2m
Max                                                                                                                  over the life of the funds or on disposal.
Agora            50%         31/03(c)                    N/A                    1.5%          Development            Based on exceeding an IRR of 20%                                        £243.9m                  £12.1m
                                                                                                                     over the life of the funds or on disposal


Radial           50%         31/03(c)                    N/A                    1.5%                      N/A        Profit share at end of joint venture                                    £260.9m                  £18.3m
Greater          50%         31/03                 N/A                             5%                     N/A        N/A                                                                       £96.2m                  £5.3m
London
Offices


(a)       The performance fees in these Funds are receivable in the second half of the Group’s financial year to 31 March as the fees are calculated on the results of the Funds for the year to 31 December.
(b)       The Apia management fee reduces to 0.35% on the property assets managed between £0.5billion and £1.0billion and to 0.3% on the property assets managed over £1.0billion.
(c)       The asset management agreement was renegotiated as part of the conversion to a REIT and management fees reduced from 5% to 1.5%.



Post Balance Sheet Events


There have been no material post balance sheet events that require adjustment. Material, though non-adjusting events and transactions, are noted in the Significant Events
post 31 March 2008 section following this report.




Peter Collins
Finance Director




                                                                                                              24
SIGNIFICANT EVENTS DURING THE YEAR ENDED 31 MARCH 2008


Date            Detail                                                                                     Category


April 2007       Company converts to a Real Estate Investment Trust (REIT)                                 Group


April 2007       Purchase of St Magnus House, Aberdeen by Apia Regional Office Fund for £23.7million       Funds


May 2007         Purchase of 2 America Square, London EC3 for £25.1 million and 16 Upper                   Group Investment Property
                 Woburn Place, London WC1 for £21.75million


August 2007      Purchase of Cable House, 56 – 62 New Broad Street, London EC2 for £44million              Group Investment Property


August 2007      250,000 Ordinary shares purchased as Treasury shares                                      Group


November 2007    Completion of development at Bouverie Place, Folkestone                                   Group


November 2007    Completion of extension at Interlink Park, Bardon                                         Joint ventures


January 2008     Debenhams secured as anchor store for the multi-million pound Waterside                   Group
                 Shopping scheme in Aylesbury


February 2008    Sale of Vulcan Works, Newton le Willows for £7million                                     Group


March 2008       Extension of £150million loan facility for Agora Shopping Centres for two years to 2010   Joint ventures




SIGNIFICANT EVENTS POST 31 MARCH 2008
Date             Detail                                                                                    Category


June 2008        Renewal of £60million revolving credit facility with Barclays Bank for three years        Group




                                                                                25
CONSOLIDATED INCOME STATEMENT

For the year ended 31 March 2008

                                                                         Notes          2008     2007
                                                                                         £m        £m


Revenue                                                                                 46.1      53.4


Rental and similar income                                                               28.7      21.6
Property management expenses                                                            (5.8)    (3.8)
Revenue from property trading activities                                                    -      5.2
Cost of sales of property trading activities                                                -    (4.2)
Service charge and similar income                                                        4.3       4.2
Service charge expense and similar charges                                              (5.1)    (4.7)
Net rental and trading income                                                2          22.1      18.3
Revenue from asset management activities                                                13.1      22.4
Asset management expenses                                                              (12.6)   (12.2)
Net income from asset management activities                                  2           0.5      10.2
Administrative expenses                                                                 (2.0)    (3.7)
Operating profit before net gains on investments                             2          20.6      24.8
Net (loss) / gain from fair value adjustments on investment properties      14         (50.7)     11.2
Net (loss) / gain from fair value adjustment on investments              17/18         (25.2)     14.1
Profit on sale of investment properties                                      5           8.1       1.8
Profit on sale of finance lease assets                                      20           0.1         -
Profit on sale of investments                                                6              -      1.0
Operating (loss) / profit                                                              (47.1)     52.9
Finance income                                                               7           7.5       8.2
Finance expense                                                              8         (21.2)   (21.5)
Change in fair value of derivative financial instruments                    23          (1.9)      1.0
Share of joint ventures’ post tax (losses) / profits                        16         (60.8)     27.2
(Loss) / profit before income tax                                                     (123.5)     67.8
Taxation − current                                                           9           2.9     (5.3)
Taxation − deferred                                                          9           7.1      17.8
REIT conversion charge                                                       9              -   (10.9)
(Loss) / profit for the year                                                          (113.5)     69.4


                                                                                           P        p
(Loss) / earnings per share                                                 12    (203.61)      129.26
Fully diluted (loss) / earnings per share                                   12    (200.99)      127.69




                                                                                 26
BALANCE SHEETS
                                                                         Group                Company
                                                                                                     Restated
                                                            Notes     2008         2007      2008         2007
                                                                       £m           £m        £m           £m
ASSETS
Non−current assets
Goodwill                                                      13      11.3         11.3          -            -
Investment properties                                         14     458.6        437.8          -            -
Properties under the course of development                    14         −         19.7          -            -
Plant and equipment                                           15       0.5          0.6          -            -
Investments in joint ventures                                 16      90.0        151.6          -            -
Investments in funds                                          17      98.9        120.6          -            -
Investments in listed and unlisted shares                     18       9.8         13.3     370.7        263.9
Net investment in finance leases                              20       3.8          5.3          -            -
Deferred income tax assets                                    24       1.9          1.3          -            -
Derivative financial assets                                   23       0.6          0.8          -            -
Trade and other receivables                                   19       0.6             -         -            -
                                                                     676.0        762.3     370.7        263.9
Current assets
Trade and other receivables                                   19      27.5         29.7     415.6        350.9
Current income tax assets                                              1.2          0.4       2.3          1.5
Cash and cash equivalents                                             55.5         34.3       7.1             -
                                                                      84.2         64.4     425.0        352.4
Total assets                                                         760.2        826.7     795.7        616.3


LIABILITIES
Non−current liabilities
Borrowings, including finance leases                        21/22   (350.5)      (286.7)   (144.1)      (119.6)
Trade and other payables                                      26      (9.9)       (14.2)     (0.6)            -
Derivative financial liabilities                              23      (2.2)        (0.5)         -            -
Deferred income tax liabilities                               24      (6.2)       (11.8)         -            -
Retirement benefit obligations                                 3      (0.1)        (0.4)         -            -
Provisions for other liabilities and charges                  25      (1.4)        (5.3)         -            -
                                                                    (370.3)      (318.9)   (144.7)      (119.6)
Current liabilities
Borrowings, including finance leases                        21/22    (55.5)       (25.8)         -            -
Trade and other payables                                      26     (26.0)       (46.8)   (246.2)      (277.6)
Provisions for other liabilities and charges                  25      (3.2)            -         -            -
                                                                     (84.7)       (72.6)   (246.2)      (277.6)
Total liabilities                                                   (455.0)      (391.5)   (390.9)      (397.2)
Net assets                                                           305.2        435.2     404.8        219.1


EQUITY
Capital and reserves attributable to the Company’s equity
holders
Share capital                                                 27       2.8          2.8       2.8          2.8
Reserves                                                      28     303.6        430.7     403.2        217.1
Investment in own shares                                      29      (1.2)        (0.8)     (1.2)        (0.8)
Equity shareholders’ funds                                           305.2        432.7     404.8        219.1
Minority interest                                             35          -         2.5          -            -
Total equity                                                         305.2        435.2     404.8        219.1




                                                                        27
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE


For the year ended 31 March 2008


                                                                                  Group              Company
                                                                                                               Restated
                                                                 Notes          2008       2007     2008          2007
                                                                                 £m         £m       £m             £m
(Loss) / profit for the year                                                  (113.5)      69.4    199.0            3.6
Actuarial profits on retirement benefit obligations recognised      3            0.2           -        -             -
directly in equity
Deferred tax arising on retirement benefit obligations              3           (0.1)          -        -             -
Total recognised income and expense for the year attributable                 (113.4)      69.4    199.0            3.6
to equity shareholders


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


For the year ended 31 March 2008
                                                                                  Group              Company
                                                                                                               Restated
                                                                 Notes          2008       2007     2008          2007
                                                                                 £m         £m       £m             £m


Opening equity shareholders’ funds                                             432.7      350.6    219.1         203.6
Shares issued                                                      27               -       0.1         -           0.1
Share premium on shares issued                                     28            0.3       21.3      0.3          21.3
Acquisition of investment in own shares                            29           (0.5)      (0.4)    (0.5)         (0.4)
Disposal of investment in own shares                               29             0.1       0.6      0.1            0.6
Cost of share based payments                                       28             0.8       1.0      0.8            1.0
Deferred tax arising on share based payments                       28           (0.8)       0.8         -             -
Acquisition of treasury shares                                     28           (1.5)          -    (1.5)             -
                                                                               431.1      374.0    218.3         226.2
Total recognised income and expense for the year                              (113.4)      69.4    199.0            3.6
Dividend paid in year                                              11          (12.5)     (10.7)   (12.5)        (10.7)
Closing equity shareholders’ funds                                             305.2      432.7    404.8         219.1




                                                                         28
CASH FLOW STATEMENTS


For the year ended 31 March 2008


                                                                                      Group                Company
                                                                    Notes          2008         2007      2008         2007
                                                                                    £m           £m        £m           £m
Cash flows from operating activities
Cash generated from operations                                        31            6.9          6.1      (3.4)       (35.9)
Interest paid                                                                     (20.9)       (21.6)     (0.6)        (6.6)
Interest received                                                                   2.1          2.3       1.1          0.2
UK Corporation tax received / (paid)                                                0.4        (11.2)     (0.7)        (7.3)
Net cash outflow from operating activities                                        (11.5)       (24.4)     (3.6)       (49.6)
Cash flows from investing activities
Purchase of investment properties and related capital expenditure                (112.2)       (15.3)         -            -
Sale of investment properties                                                      62.5         51.8          -            -
Purchase of plant and equipment                                                    (0.1)        (0.2)         -            -
Purchase of investments in listed shares                                               -        (0.2)         -            -
Sale of investments in listed shares                                                   -         5.2          -            -
Sale of investments in funds                                                           -         0.5          -            -
Purchase of investments in unlisted shares                                             -        (5.0)         -        (5.0)
Net cash acquired from purchase of shares in subsidiary company                        -       (83.0)         -            -
Purchase of shares in joint ventures                                                   -       (11.0)         -            -
Loans to joint ventures                                                                -       (13.3)         -            -
Loans repaid by joint ventures                                                         -         1.9          -            -
Dividends received from listed investments                                             -         0.1          -            -
Dividends received from unlisted investments                                           -         0.1          -         0.1
Distributions received from funds                                                   6.0          6.3          -            -
Dividends received from joint ventures                                              0.8          1.3          -            -
Dividends received from associates                                                     -         0.3          -            -
Net cash outflow from investing activities                                        (43.0)       (60.5)         -        (4.9)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital                                   0.3         21.4       0.3         21.4
Purchase of own shares for AESOP scheme                                            (0.2)        (0.4)     (0.2)        (0.4)
Disposal of own shares for share option scheme                                      0.1          0.5       0.1          0.5
Purchase of treasury shares                                                        (1.5)            -     (1.5)            -
Dividends paid                                                                    (12.6)       (10.7)    (12.5)       (10.7)
Purchase of derivative financial instruments                                           -        (0.9)         -            -
Increase in bank loans                                                              8.8          3.6          -            -
Repayment of bank loans                                                           (41.2)       (71.2)         -            -
Repayment of other loans                                                               -        (0.4)         -            -
Net cash (outflow) / inflow from financing activities                             (46.3)       (58.1)    (13.8)        10.8
Net decrease in cash and cash equivalents*                                       (100.8)      (143.0)    (17.4)       (43.7)
Cash and cash equivalents at beginning of year*                                  (220.7)       (77.7)   (119.6)       (75.9)
Cash and cash equivalents at end of year*                                        (321.5)      (220.7)   (137.0)      (119.6)
* Includes overdraft facility balances shown in borrowings




                                                                            29
NOTES TO THE FINANCIAL STATEMENTS


1.     ACCOUNTING POLICIES



Basis of preparation


The Financial Statements comprise the consolidated financial statements of the Group for the year ended 31 March 2008 and have been prepared in accordance with
International Financial Reporting Standards and IFRIC interpretations endorsed by the European Union (“EU”) and with those parts of the Companies Act 1985 applicable to
companies reporting under IFRS.


The basis of accounting and format of presentation is subject to change following any further interpretative guidance that may be issued by the International Accounting
Standards Board (“IASB”) and the International Financial Reporting Interpretation Committee (“IFRIC”) from time to time.


The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain assets and liabilities, which are
carried at fair value, and in accordance with those IFRS standards and IFRIC interpretations issued and effective or issued and early adopted as at the time of preparing these
accounts.


The parent company’s financial statements have also been prepared in accordance with IFRS, as applied in accordance with the provisions of the Companies Act 1985. The
Directors’ have taken advantage of the exemption offered by Section 230 of the Companies Act not to present a separate income statement for the parent company.


The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgment in
the process of applying the Group's accounting policies. Although these estimates are based on management's best knowledge of the amount, events or actions, actual results
ultimately may differ from those estimates.


Standards, interpretations and amendments to published standards that are not yet effective


The accounting policies are consistent with those applied in the year ended 31 March 2007, as amended to reflect the adoption of the new Standards, Amendments to
Standards and interpretations which are mandatory for the year ended 31 March 2008. In most cases, these new requirements are not relevant for the Group. This is the case
for IFRS 4 ‘Insurance contracts,’ IFRIC 7 ‘ Applying the restatement approach under IAS 29, Financial reporting in hyper-inflationary economies,’ IFRIC 8 ‘Scope of IFRS
2,’ IFRIC 9 ‘Re-assessment of embedded derivatives;’ and IFRIC 10 ‘Interim financial reporting and impairment.


IFRS 7, ‘Financial Instruments: Disclosures’ and the complimentary amendment to IAS 1, ‘Presentation of financial instruments – Capital disclosures’ has been adopted this
year. This introduces new disclosures relating to financial instruments. These do not have any impact on the classification and valuation of the Group or company’s financial
instruments, or the disclosures relating to taxation and trade and other payables.


IFRIC 11, ‘IFRS 2 – Group and treasury share transactions,’ has been adopted this year. IFRIC 11 provides guidance on whether share-based transactions involving treasury
shares or involving Group entities (for example, options over a parent’s shares) should be accounted for as equity-settled or cash-settled share based payment transactions in
the stand-alone accounts of the parent and Group companies. This interpretation does not have an impact on the Group’s financial statements. The company’s financial
statements have been restated as shown in notes 10, 18, 19, 24 and 28. The impact of this restatement is to increase the profit after tax of the company for the year ended 31
March 2007 by £0.8million. There is no impact on the net assets of the company.


The following new Standards and Interpretations have been issued but are not effective for the year ended 31 March 2008 and have not been adopted early, IAS 23
(Amendment) ‘Borrowing costs,’ IFRS 8 ‘Operating Segments,’ IFRIC 14 ‘IAS 19 – The limit on a defined benefit asset, minimum funding requirements and their
interaction,’ IFRIC 12 ‘Service concession arrangements,’ and IFRIC 13 ‘Customer loyalty programmes.’ It is anticipated that the adoption of these new Standards and
Interpretations in future periods will not have a material impact on the measurement of assets and liabilities included in the financial statements or the Group’s income and
expenses.


Consolidation


(a)         Subsidiary undertakings
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of
the voting rights.


The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de−consolidated from the date control ceases. All inter−company
transactions, balances and unrealised gains on transactions between Group companies are eliminated upon consolidation.

                                                                                       30
(b)          Interests in joint ventures
Interests in jointly controlled entities are accounted for using the equity method. Unrealised gains and losses on transactions between the Group and its joint ventures are
eliminated to the extent of the Group’s interest in the joint ventures. The Group’s share of profit of joint ventures represents the Group’s share of the joint venture’s profit
after tax.


Segment reporting


The Group’s primary reporting format is business activity, being property investment and asset management. As all operations are based in the UK with the exception of one
immaterial investment property based in the Netherlands, there is no secondary reporting format to present.


A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other
business segments.


Plant and equipment


Plant and equipment is initially measured at cost. After initial recognition, the fixed assets are carried at cost less subsequent depreciation and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the items.


Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement
during the financial period in which they are incurred.


Plant and equipment is depreciated by equal annual instalments over their estimated useful lives of between three and ten years and are carried at historic cost less
accumulated depreciation.


Where the carrying amount of a fixed asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Recoverable amount is
the higher of fair value less costs to sell and value in use and is determined for an individual asset. After initial recognition, the item is carried at its cost less any accumulated
depreciation and any accumulated impairment losses.


Goodwill


Business combinations are accounted for by applying the purchase method. The excess of the cost of the business combination over the acquirer’s interest in the net fair value
of the identifiable assets, liabilities and contingent liabilities, recognised in accordance with IFRS 3, Business Combinations, constitutes goodwill, and is recognised as an
asset. After initial recognition, goodwill is measured at cost less any accumulated impairment losses, until disposal or termination of the previously acquired business
(including planned disposal or termination where there are indications that the value of the goodwill has been permanently impaired), when the profit or loss on disposal or
termination will be calculated after charging the book amount of any such goodwill through the income statement.


Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. To the extent that the carrying amount exceeds the
recoverable amount, which is the higher of net realisable value and value in use, the asset is written down to its recoverable amount. Any impairment is recognised in the
income statement and is not subsequently reversed. Net realisable value is the estimated amount at which an asset can be disposed of, less any direct selling costs.


Value in use is the estimate of the discounted future cash flows generated from the asset’s continued use, including those resulting from its ultimate disposal. For the purposes
of assessing value in use, assets are grouped at the lowest levels for which there are separately identifiable cash flows.


The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.


Investment property


(a)          Initial recognition
Property that is held for long−term rental yields or for capital appreciation or both, and that is not occupied by the Group, is classified as investment property.


Investment property comprises freehold land, freehold buildings, land held under operating leases and buildings held under finance leases. When the Group begins to
redevelop an existing investment property for continued future use as an investment property, the property remains an investment property and is accounted for as such.




                                                                                          31
Property that is being constructed or developed for future use as investment property, but which has not previously been classified as such, is classified as property under the
course of development. This is recognised initially at cost and subsequently carried at cost less any impairment. Interest is capitalised (before tax relief) on the basis of the
average rate of interest paid on the relevant debt outstanding until the date of practical completion. On completion the property is transferred to investment property and any
difference between the fair value of the property at that date and its previous carrying amount shall be recognised in the income statement.


Land held under operating leases is classified and accounted for as investment property when the rest of the definition of investment property is met. In such cases, the
operating lease is accounted for as if it were a finance lease.


Investment property is measured initially at its cost, including related transaction costs.


(b)        Fair value
After initial recognition, investment property is carried at fair value. Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature,
location or condition of the specified asset. If this information is not available, the Group uses alternate valuation methods such as recent prices on less active markets or
discounted cash flow projections. These valuations are performed in accordance with the guidance issued by the Royal Institution of Chartered Surveyors. These valuations
are reviewed at each financial reporting period end by independent external valuers who hold recognised and relevant professional qualifications and have recent experience
in the location and category of the investment property being valued. Investment property that is being redeveloped for continuing use as investment property, or for which
the market has become less active, continues to be measured at fair value.


The fair value of investment property reflects, among other things, rental income from current leases and assumptions about rental income from future leases in the light of
current market conditions.


The fair value also reflects, on a similar basis, any cash outflows that could be expected in respect of the property.


Some of those outflows are recognised as a liability, including finance lease liabilities in respect of land classified as investment property; others, including contingent rent
payments, are not recognised in the financial statements.


(c)        Subsequent expenditure
Subsequent expenditure is charged to the asset's carrying amount only when it is probable that future economic benefit associated with the item will flow to the Group and the
cost of the item can be measured reliably. All repairs and maintenance costs are charged to the income statement during the financial period in which they are incurred. Gross
borrowing costs associated with direct expenditure on properties under development or undergoing major refurbishment are capitalised. With specific developments, the
amount capitalised is the gross interest incurred on those borrowings less any investment income arising on their temporary investment. Interest is capitalised as from the
commencement of the development work until the date of practical completion. The capitalisation of finance costs is suspended if there are prolonged periods when
development activity is interrupted. Interest is also capitalised on the purchase cost of a site or property acquired specifically for redevelopment in the short term but only
where activities necessary to prepare the asset for redevelopment are in progress.


(d)        Changes and transfers
Changes in fair values are recorded in the income statement for investment properties.


If an investment property becomes owner−occupied, it is reclassified as property, plant and equipment, and its fair value at the date of reclassification becomes its cost for
accounting purposes. Property that is being constructed or developed for future use as investment property is classified as properties under the course of development and
stated at cost until construction or development is complete, at which time it is reclassified and subsequently accounted for as investment property.


When the Group begins to redevelop an existing investment property with a view to sale, the property is transferred to trading properties and held as a current asset. The
property is re−measured to fair value as at the date of the transfer with any gain or loss being taken to profit or loss. The re−measured amount becomes the deemed cost at
which the property is then carried in trading properties.


Cash and cash equivalents


Cash and cash equivalents comprises cash balances, deposits held at call with banks and other short−term highly liquid investments with original maturities of three months or
less. Cash and cash equivalents are categorised as loans and receivables. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash
management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Bank overdrafts are disclosed in current and
non−current liabilities.




                                                                                          32
Employee benefits


The Group accounts for pensions under IAS 19 ‘Employee Benefits’. In respect of defined benefit pension schemes, obligations are measured at discounted present value
while scheme assets are measured at their fair value.


The operating and financing costs of such plans are recognised separately in the income statement. Service costs are spread systematically over the working lives of the
employees concerned with the charge for the period included in operating costs in the income statement.


Financing costs are recognised in the periods in which they arise and are included in interest expense. Actuarial gains and losses arising from either experience differing from
previous actuarial assumptions or changes to those assumptions are recognised immediately in the statement of recognised income and expense.


Contributions to defined contribution schemes are expensed as incurred.


Income taxes


The charge for current taxation is based on the results for the year as adjusted for items which are non−assessable or disallowed. It is calculated using rates that have been
enacted or substantively enacted by the balance sheet date. Tax payable upon realisation of fair value gains recognised in prior periods is recorded as a current tax charge with
a release of the associated deferred tax.


Deferred tax is provided using the balance sheet liability method in respect of temporary differences between the carrying amount of assets and liabilities in the financial
statements and the corresponding tax bases used in computation of taxable profit with the exception of deferred tax on fair value gains where the tax basis used is the accounts
historic cost. Provision is made for temporary differences between the carrying value of assets and liabilities in the consolidated financial statements and the values used for
tax purposes. Temporary differences are not provided for when they arise from initial recognition of assets and liabilities that do not affect accounting or taxable profit.


When distributions are controlled by the Group, and it is probable the temporary difference will not reverse in the foreseeable future, deferred tax which would arise on the
distribution of profits realised in subsidiaries, associates and joint ventures is provided in the same period as the liability to pay the distribution is recognised in the financial
statements.


Deferred tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax
asset is realised or the deferred tax liability is settled. It is recognised in the income statement except when it relates to items credited or charged directly to equity, in which
case the deferred tax is also dealt with in equity.


Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.


Deferred tax assets and liabilities are offset only when they relate to taxes levied by the same authority, with a legal right to set off and when the Group intends to settle them
on a net basis.


Provisions


Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be
required to settle the obligation, and the amount has been reliably estimated.


Where the Group, as lessee, is contractually required to restore a leased property to an agreed condition, prior to release by a lessor, provision is made for such dilapidation
costs as they are identified.


(a)           Onerous contracts
Provision is made in respect of costs incurred on vacant leasehold properties or for leasehold properties sublet at a level which renders the properties loss−making over the
length of the lease, being the net cash outflow committed to be incurred over the lives of the leases. Any increase or decrease in the provision is taken to the income statement
each financial period. The provision is assessed on a property by property basis taking account of individual cash flows. Cash flows are discounted using the risk free rate.


(b)           Share−based payments
The cost of granting share options and other share based remuneration to employees and directors is recognised through the income statement with reference to the fair value
at the date of the grant. The Group has used the Black−Scholes option valuation model and a stochastic model to establish the relevant costs. The resulting values are
amortised through the income statement over the vesting period of the options and other grants. The charge is reversed if it appears probable that applicable performance
criteria will not be met.




                                                                                           33
Own shares held in connection with employee share plans or other share based payment arrangements are treated as treasury shares and deducted from equity. No profit or
loss is recognised in the income statement on their sale, re−issue or cancellation.


Revenue recognition


Revenue is measured at the fair value of the consideration received or receivable and is stated net of sales taxes and value added taxes. Revenue includes 'Rental and similar
income', ‘Turnover from property trading activities’, 'Service charge and similar income' and 'Turnover from asset management activities'. Revenue is recognised as follows:


(a)        Rental and similar income
Rental income from operating lease income is recognised on a straight−line basis over the lease term.


When the Group provides incentives to its customers, the cost of incentives are recognised over the lease term, on a straight−line basis, as a reduction of rental income.


(b)        Service charge and similar income
Service and management charge income is recognised on a gross basis in the accounting period in which the services are rendered. Where the Group is acting as an agent, the
commission rather than gross income is recorded as revenue.


(c)        Income from investments
Dividend income from investments is recognised when the shareholders' rights to receive payment have been established. Distribution income from funds is recognised on an
accruals basis.


(d)        Income from property disposals
Profits or losses arising from the sale of trading and investment properties are included in the income statement of the Group where an exchange of contracts has taken place
under which any minor outstanding conditions not affecting the transfer of risks and rewards are entirely within the control of the Group. Profits or losses arising from the
sale of trading and investment properties are calculated by reference to their carrying value and are included in operating profit.


(e)        Income from asset management activities
Management fees earned are calculated on an accruals basis. Asset management income is recognised in the accounting period in which the services are rendered.


Performance fees are recognised, in line with the asset management contracts, at the end of the performance period to which they relate, based on the outperformance of
relevant benchmarks. The performance period is normally three years. Where performance falls short of these benchmarks, fees are repayable, up to the amount received for
the previous two years. Where there is a reasonable likelihood that part of a performance fee will be repaid the estimated repayment will not be recognised until the outcome
can be reliably estimated. This policy has been clarified as a result of the expected clawback of performance fees.


(f)        Other interest income
Other interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate.


Leases


(a)        A Group company is the lessee
(i)        Operating lease − leases in which substantially all risks and rewards of ownership are retained by another party, the lessor, are classified as operating leases.
           Payments, including prepayments, made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a
           straight−line basis over the period of the lease.


(ii)       Finance lease − leases of assets where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are
           capitalised at the lease commencement date at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease
           payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding.


The corresponding rental obligations, net of finance charges, are included in current and non−current borrowings. The interest element of the finance cost is charged to the
income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The investment properties
acquired under finance leases are carried at the fair value.


(b)        A Group company is the lessor


(i)        Operating lease − properties leased out under operating leases are included in investment property in the balance sheet.




                                                                                         34
(ii)       Finance lease − when assets are leased out under a finance lease, the present value of the lease payments is recognised as a receivable. The difference between the
           gross receivable and the present value of the receivable accrues as finance income. Lease income is recognised over the term of the lease using the net investment
           method before tax, which reflects a constant periodic rate of return.


Financial instruments and hedging activities


Derivatives


The Group uses derivatives to help manage its interest rate risk. In accordance with its treasury policy, the Group does not hold or issue derivatives for trading purposes.


Derivatives are recognised at fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if
so, the nature of the hedge relationship.


Hedge accounting


The Group’s derivative financial instruments do not qualify for hedge accounting and changes in the fair value of derivative financial instruments are recognised in the income
statement as they arise.


Financial assets


The Group classifies its financial assets in the following categories: financial assets at fair value through the income statement, loans and receivables, held−to−maturity
investments, and available−for−sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the
classification of its investments at initial recognition and reviews this designation at each reporting date.


Purchases and sales of investments are recognised on the trade date; the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at
fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Investments are derecognised when the rights to receive cash flows from
the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available−for−sale financial assets and
financial assets at fair value through the income statement are subsequently carried at fair value.


Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fair value through the income statement' category are included in the
income statement in the period in which they arise.


The fair values of listed investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair
value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same, discounted cash
flow analysis, and option pricing models refined to reflect the issuer's specific circumstances. For unlisted investments, fair value is based on an average spread of
price/earnings ratios from comparable companies, discounted for non-marketability. Changing the assumptions to other reasonably possible alternative assumptions would not
change the fair value significantly. For investments in funds, fair value is measured as the unit price of the holding at the balance sheet date.


(a)        Financial assets at fair value through the income statement
This category has two sub−categories: financial assets held for trading, and those designated at fair value through the income statement at inception. A financial asset is
classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. Derivatives are also classified as held for
trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12
months of the balance sheet date.


(b)        Loans and receivables
Loans and receivables are non−derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides
money, goods or services directly to a debtor with no intention of trading the receivable. They are included in current assets, except for maturities greater than 12 months after
the balance sheet date. These are classified as non−current assets. Loans and receivables are included in trade and other receivables in the balance sheet. Investments in
subsidiary undertakings are carried in the company’s balance sheet at cost less any provision for impairment and are categorised as loans and receivables.


The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired.




Trade and other receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A
provision for impairment in trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the



                                                                                          35
original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows,
discounted at the effective interest rate. The changes to the provision are recognised in the income statement.


Borrowings
Borrowings are initially recognised at the fair value of consideration received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any
difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective
interest method.


Transaction costs are capitalised on the balance sheet and are amortised over the life of the associated borrowing instrument through the effective rate of interest.


Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.


Share capital
Ordinary shares are classified as equity.


Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly
attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of acquisition as part of the purchase consideration.


Where any Group company purchases the Company's equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of
income taxes) is deducted from equity attributable to the Company's equity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently
sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, are included in equity attributable
to the Company's equity holders.


Critical accounting policies and judgements
The preparation of the Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses,
assets and liabilities, and disclosure of contingencies at the date of the Consolidated Financial Statements. If in the future such estimates and assumptions, which are based on
management’s best judgement at the date of the Consolidated Financial Statements, deviate from the actual circumstances, the original estimates and assumptions will be
modified, as appropriate, in the period in which the circumstances change. The following policies are considered to be of greater complexity and / or particularly subject to
the exercise of judgement.


(a)    Goodwill
As required by IAS 36, Impairment of Assets, the Group regularly monitors the carrying value of its assets, including goodwill. Impairment reviews compare the carrying
values to the present value of future cash flows that are derived from the relevant asset or cash−generating unit. These reviews therefore depend on management estimates
and judgements, in particular in relation to the forecasting of future cash flows and the discount rate applied to the cash flows.


(b)    Post−employment benefits
Application of IAS 19, Employee Benefits, requires the exercise of judgement in relation to setting the assumptions used by the actuaries in assessing the financial position of
each scheme. The Group determines the assumptions to be adopted in discussion with its actuaries, and believe these assumptions to be in line with IAS generally accepted
practice.


(c)    Provisions
The Group carries balance sheet provisions in respect of onerous contracts and dilapidations amongst other exposures. Judgement is involved in assessing the exposure in
these areas and hence in setting the level of the required provisions.


(d)    Estimate of fair value of investment properties
The best evidence of fair value is current prices in an active market for similar lease and other contracts. In the absence of such information, the Group determines the amount
within a range of reasonable fair value estimates. In making its judgement, the Group considers information from a variety of sources including:


i)     current prices in an active market for properties of a different nature, condition or location (or subject to different lease or other contracts), adjusted to reflect those
       differences;


ii)    recent prices of similar properties in less active markets, with adjustments to reflect any changes in economic conditions since the date of the transactions that occurred
       at those prices; and


iii)   discounted cash flow projections based on reliable estimates of future cash flows, derived from the terms of any existing lease and other contracts, and (where possible)
       from external evidence such as current market rents for similar properties in the same location and condition, and using discount rates that reflect current market
       assessments of the uncertainty in the amount and timing of the cash flows.

                                                                                           36
(e)   Principal assumptions for management’s estimation of fair value of investment properties
If information on current or recent prices of assumptions underlying the discounted cash flow approach investment properties are not available, the fair values of investment
properties are determined using discounted cash flow valuation techniques. The Group uses assumptions that are mainly based on market conditions existing at each balance
sheet date.


The principal assumptions underlying management’s estimation of fair value are those related to: the receipt of contractual rentals; expected future market rentals; void
periods; maintenance requirements; and appropriate discount rates. These valuations are regularly compared to actual market yield data and actual transactions by the Group
and those reported by the market.


The expected future market rentals are determined on the basis of current market rentals for similar properties in the same location and condition.


(f)   Investments in unlisted shares
The valuation technique is disclosed in the financial assets accounting policy note. These valuations depend on management estimates and judgements, in particular in
relation to the forecasting of future cash flows and the discount rate applied to the cash flows.




                                                                                         37
2.     SEGMENTAL REPORTING


Business Segments
For management purposes the Group is organised into two operating divisions, Property Investment and Asset Management:
                                                                               Property                Asset        Unallocated and
                                                                             Investment          Management          other activities   Group Total
                                                                                    £m                   £m                      £m             £m
Year ended 31 March 2008
Rental and similar income                                                             28.7                    -                     -          28.7
Property management expenses                                                          (5.8)                   -                     -          (5.8)
Service charge and similar income                                                      4.3                    -                     -           4.3
Service charge expense and similar charges                                            (5.1)                   -                     -          (5.1)
Net rental and trading income                                                         22.1                    -                     -          22.1
Revenue from asset management activities
       Management fee income                                                              -               14.0                      -          14.0
       Performance fee income                                                             -                 0.7                     -           0.7
       Performance fee provision                                                          -               (1.6)                     -          (1.6)
                                                                                          -               13.1                      -          13.1
Asset management expenses                                                                 -              (12.6)                     -         (12.6)
Administrative expenses                                                               (0.4)               (1.6)                     -          (2.0)
Operating profit / (loss) before net gain on investments                              21.7                (1.1)                     -          20.6
Net loss from fair value adjustments on investment properties                      (50.7)                     -                     -         (50.7)
Net loss from fair value adjustments on investments                                       -                   -                (25.2)         (25.2)
Profit on sale of investment properties                                                8.1                    -                     -           8.1
Profit on sale of finance lease assets                                                 0.1                    -                     -           0.1
Operating loss                                                                     (20.8)                 (1.1)                (25.2)         (47.1)


Total assets                                                                       477.7                  18.6                 263.2          759.5
Total liabilities excluding borrowings and finance leases                          (26.8)                 (0.2)                (21.3)         (48.3)
Borrowing, including finance leases                                                   (3.8)                   -              (402.2)        (406.0)
Net assets / (liabilities)                                                         447.1                  18.4               (160.3)          305.2


Other segment items:
Capital expenditure                                                                   14.2                    -                     -          14.2
Depreciation                                                                              -                   -                  0.2            0.2




                                                                                 38
                                                                                      Property      Asset Management          Unallocated and       Group Total
                                                                                    Investment                                 other activities
                                                                                           £m                      £m                      £m               £m
Year ended 31 March 2007
Rental and similar income                                                                   21.6                      -                       -            21.6
Property management expenses                                                                (3.8)                     -                       -            (3.8)
Revenue from property trading activities                                                     5.2                      -                       -             5.2
Cost of sales of property trading activities                                                (4.2)                     -                       -            (4.2)
Service charge and similar income                                                            4.2                      -                       -             4.2
Service charge expense and similar charges                                                  (4.7)                     -                       -            (4.7)
Net rental and trading income                                                               18.3                      -                       -            18.3
Revenue from asset management activities
       Management fee income                                                                    -                 13.9                        -            13.9
       Performance fee income                                                                   -                   8.5                       -             8.5
                                                                                                -                 22.4                        -            22.4
Asset management expenses                                                                       -                (12.2)                       -          (12.2)
Administrative expenses                                                                     (1.9)                 (1.8)                       -            (3.7)
Operating profit before net gain on investments                                             16.4                    8.4                       -            24.8
Net gain from fair value adjustments on investment properties                               11.2                      -                       -            11.2
Net gain from fair value adjustments on investments                                             -                     -                   14.1             14.1
Profit on sale of investment properties                                                      1.8                      -                       -             1.8
Profit on sale of investments                                                                   -                     -                    1.0              1.0
Operating profit                                                                            29.4                    8.4                   15.1             52.9


Total assets                                                                              469.1                   20.6                   337.0            826.7
Total liabilities excluding borrowings and finance leases                                (29.8)                   (1.6)                 (47.6)           (79.0)
Borrowing, including finance leases                                                         (1.5)                     -                (311.0)          (312.5)
Net assets / (liabilities)                                                                437.8                   19.0                  (21.6)            435.2


Other segment items:
Capital expenditure                                                                          8.0                      -                       -             8.0
Depreciation                                                                                    -                     -                    0.2              0.2


All turnover and operating profit has arisen from continuing operations.


(a)         Rents receivable includes £0.7million (2007: £0.4million charge) which represents rent allocated to rent free periods.
(b)         Service charge and similar income includes monies received from tenants in respect of service charge costs the tenants bear on their properties. Service charge
            costs not recovered (“void costs”) are included within service charge expense and similar charges of £0.8million (2007: £0.5million).


The parent company is a holding company and does not operate in any segments.


                                                                                                                  2008                   2007
                                                                                                                   £m                      £m
Operating profit is stated after charging:
Depreciation – owned assets                                                                                        0.2                     0.2
Operating lease charges – properties                                                                               0.6                     0.6




                                                                                       39
During the year the following amounts were charged to the income statement in respect of auditors’ remuneration:


                                                                                                          2008            2007
                                                                                                            £m              £m
Remuneration to the principal auditor in respect of audit fees:
Statutory audit of the company and consolidated accounts                                                    0.1             0.1
Remuneration to the principal auditor in respect of other services:
Statutory audit of subsidiary accounts                                                                      0.2             0.4
Audit related services                                                                                         -            0.1
Non−audit services: Taxation                                                                                0.3             0.4
                                                                                                            0.6             1.0


In addition £0.1million was charged by the Auditors for audit services to the joint ventures (2007: £0.1million) and £0.1million for tax work (2007: £0.1million).


3.    EMPLOYEES

                                                                                                          2008            2007
                                                                                                            £m              £m
Staff costs
Wages and salaries                                                                                         11.4            10.4
Social security costs                                                                                       1.1             1.1
Other pension costs                                                                                         1.0             0.8
                                                                                                           13.5            12.3



                                                                                                          2008            2007
                                                                                                      Number           Number
The average number of persons employed during the year was:
Management and administrative                                                                               172             145
Repairs and service                                                                                          46              53
                                                                                                            218             198


The parent company had no employees during the year (2007: Nil).


RETIREMENT BENEFIT OBLIGATIONS



The Group operates and contributes to pension schemes for certain Directors and employees and makes some discretionary allowances. The costs charged to the income
statement for the year to 31 March 2008 in respect of these amounted to £1.0million (2007: £0.8million). Pension premiums paid in advance were £0.1million (2007:
£0.2million).


The Group operates a funded defined benefit scheme in the UK, The Warner Estate Group Retirement Benefits Scheme. The costs charged to the income statement for the
year to 31 March 2008 in respect of these amounted to £0.1million (2007: £0.1million). A full valuation was carried out at 1 April 2005. The values at 31 March 2008 were
updates of the 1 April 2005 valuation carried out by a qualified independent actuary.


It has been agreed with the Trustees that the Group contributes 26.8% of pensionable salary plus £0.1million per annum.


The discount rate used to calculate the funding target is equal to the yield on fixed interest gilts of appropriate term at the valuation date plus 2% per annum for active and
deferred members over the period to retirement. The inflation assumption is derived from the difference between the yield on fixed interest gilts and the yield on
indexed−linked gilts at the valuation date.

Warner Estate Holdings PLC employs a building block approach in determining the long term rate of return on pension plan assets. Historical markets are studied and assets
with higher volatility are assumed to generate higher returns consistent with widely accepted capital market principles. The assumed long−term rate of return on each asset
class is set out within this note. The overall expected rate of return on assets is then derived by aggregating the expected return for each asset class over the actual asset
allocation for the Scheme at the 31 March 2008.




                                                                                         40
The following assumptions were made by the Company:


                                                                                                                            2008                    2007
                                                                                                                   % per annum               % per annum
Discount rate                                                                                                                 6.9                     5.4
Rate of increase in pensionable salaries                                                                                      4.2                     3.7
Rate of increases to pensions in payment                                                                                      3.6                     3.2
Price inflation                                                                                                               3.7                     3.2


Mortality assumptions are based on standard mortality tables which allow for future mortality improvements. The assumptions are that a member currently aged 60 will live
on average for a further 26 years if they are male and for a further 29 years if they are female. For a member who retires in future at age 60 the assumptions are that they will
live on average for a further 27 years after retirement if they are male and for a further 30 years after retirement if they are female.


The market value of the assets of the Scheme together with the expected rates of return at the beginning and end of the year were as follows:
                                                                                Long−term            Value at         Long−term                  Value at
                                                                              rate of return        31 March        rate of return              31 March
                                                                             expected at 31             2008       expected at 31                   2007
                                                                               March 2008                            March 2007
                                                                                          %               £m                    %                     £m
Equities                                                                                  7.8             1.5                 8.0                     1.4
Fixed interest bonds                                                                      6.9             3.8                 5.4                     4.2
Cash                                                                                      5.9             0.2                 5.5                     0.2
Total                                                                                     7.5             5.5                 7.5                     5.8


None of the scheme assets are property related.


Reconciliation of funded status to balance sheet


                                                                                     Value at             Value at
                                                                              31 March 2008         31 March 2007
                                                                                           £m                    £m
Fair value of Scheme assets                                                                5.5                   5.8
Present value of non−insured defined benefit of obligations                              (2.0)                  (2.2)
Liability in respect of insured pensioners                                               (3.6)                  (4.0)
Liability recognised on the balance sheet                                                (0.1)                  (0.4)
Related deferred tax asset                                                                      -                0.1
Net pension liability                                                                    (0.1)                  (0.3)


Changes to the present value of the defined benefit obligation
                                                                                                                                     2008              2007
                                                                                                                                      £m                    £m
Opening defined benefit obligation                                                                                                    6.2                   6.3
Current service cost                                                                                                                  0.1                     -
Interest cost                                                                                                                         0.3                   0.3
Actuarial profits on Scheme liabilities*                                                                                             (0.7)             (0.1)
Net benefits paid out                                                                                                                (0.3)             (0.3)
Closing defined benefit obligation                                                                                                    5.6                   6.2
*Includes changes to the actuarial assumptions.




                                                                                          41
Changes to the fair value of Scheme assets
                                                                                                                            2008              2007
                                                                                                                             £m                 £m
Opening fair value of Scheme assets                                                                                          5.8                5.8
Expected return on assets                                                                                                    0.4                0.3
Actuarial losses on Scheme assets                                                                                           (0.5)             (0.1)
Contributions by the employer                                                                                                0.1                0.1
Contributions by plan participants                                                                                              -                 -
Net benefits paid out                                                                                                       (0.3)             (0.3)
Closing fair value of Scheme assets                                                                                          5.5                5.8


Actual return on Scheme assets
                                                                                                                            2008              2007
                                                                                                                             £m                 £m
Expected return on Scheme assets                                                                                             0.3                0.3
Actuarial losses on Scheme assets                                                                                           (0.5)             (0.1)
Actual return on Scheme assets                                                                                              (0.2)               0.2


Analysis of income statement charge
                                                                                                                            2008              2007
                                                                                                                             £m                 £m
Current service cost                                                                                                         0.1                 −
Interest cost                                                                                                                0.3                0.3
Expected return on plan assets                                                                                              (0.3)             (0.3)
Expense recognised in income statement                                                                                       0.1                 −


Analysis of amounts recognised in statement of recognised income and expense
                                                                                                                            2008              2007
                                                                                                                             £m                 £m
Total actuarial gains                                                                                                        0.2                 −
Related deferred tax                                                                                                        (0.1)                −
Total loss in statement of recognised income and expense                                                                     0.1                 −


Cumulative amount of losses recognised in statement of recognised income and expense                                        (0.1)             (0.2)


History of asset values, defined benefit obligation, surplus / (deficit) in Scheme and experience gains and losses
                                                             2008                 2007               2006                  2005                2004
                                                               £m                   £m                 £m                    £m                 £m
Fair value of Scheme assets                                    5.5                  5.8                5.8                   5.1                 4.9
Defined benefit obligation                                    (5.6)               (6.2)               (6.3)                (5.4)               (5.4)
Deficit in Scheme                                             (0.1)               (0.4)               (0.5)                (0.3)               (0.5)
Experience (losses) /gains on Scheme assets                   (0.5)               (0.1)                0.7                   0.1                 0.1
Experience gains on Scheme liabilities                         0.1                  0.1                0.1                     -                   -


The estimated amounts of contributions expected to be paid to the Scheme during the year to March 2009 are £0.1million.


4.     DIRECTORS’ REMUNERATION


A summary of Directors’ remuneration, including disclosures required by the Companies Act 1985 and those specified by the Financial Services Authority, is contained in the
Report and Accounts which will be published in due course.




                                                                                    42
5.       PROFIT ON SALE OF INVESTMENT PROPERTIES


                                                                                     2008           2007
                                                                                       £m             £m


Surplus over book value and fair value gains                                           8.1            1.8


6.       PROFIT ON SALE OF INVESTMENTS


                                                                                     2008           2007
                                                                                       £m             £m
Surplus over book value:
     Listed investments                                                                     -         1.0


7.       FINANCE INCOME


                                                                                     2008           2007
                                                                                       £m             £m
Income from investments
     Dividends from listed investments                                                      -         0.1
     Dividend from unlisted investment                                                      -         0.1
     Distributions from funds (see note 17)                                            6.1            6.0
                                                                                       6.1            6.2
Interest receivable and similar income:
     From joint ventures                                                               0.6            1.5
     Other interest                                                                    0.7            0.5
Other finance income
     Expected return on pension scheme assets                                          0.4            0.3
     Interest on pension scheme liabilities                                          (0.3)          (0.3)
                                                                                       0.1              -
                                                                                       7.5            8.2


Dividends from listed investments, unlisted investments and distributions from funds represent income from financial assets at fair value through the income statement.
Other interest represents income from financial assets categorised as loans and receivables.


8.       FINANCE EXPENSE


                                                                                     2008           2007
                                                                                       £m             £m
Interest payable on loans and overdrafts                                              21.3           14.1
Charges in respect of cost of raising finance                                          0.8            8.6
                                                                                      22.1           22.7
Less: Interest capitalised                                                           (1.2)          (1.3)
                                                                                      20.9           21.4
Interest payable under finance leases                                                  0.3            0.1
                                                                                      21.2           21.5


Interest is capitalised at an average interest rate of 7.68% which is equal to the average cost of borrowing on the development work at Folkestone which was completed in
November 2007. Interest payable on loans and overdrafts and charges in respect of raising finance represent expenses on financial liabilities at amortised cost.




                                                                                       43
9.       TAXATION

                                                                                               2008                2007
                                                                                                 £m                 £m
Taxation on profit on ordinary activities
UK corporation tax:
     Current at 30 % (2006: 30%)                                                                (2.1)                8.1
     Over provision in respect of prior year’s tax charge                                       (0.8)              (2.8)
                                                                                                (2.9)                5.3
     Deferred taxation                                                                          (7.1)             (17.8)
     REIT conversion charge                                                                         -              10.9
                                                                                              (10.0)               (1.6)


Reconciliation of taxation charge                                                              2008                2007
                                                                                                 £m                 £m
(Loss) / profit on ordinary activities before taxation                                       (123.5)               67.8
Tax @ 30%                                                                                     (37.1)               20.3
Effect of REIT exemption / conversion
        Net operating profits                                                                   (4.4)                    -
        Realised profit on disposal of investment properties                                    (2.4)                    -
        Fair value losses on investment properties                                              15.2                     -
        Release of deferred tax on conversion                                                       -             (18.3)
        Conversion charge                                                                           -              10.9
        Trading properties appropriated to investment properties                                    -               1.8
                                                                                                 8.4               (5.6)
Share of joint ventures’ post tax losses / (profits)                                            18.2               (8.1)
Net tax on assets sold during the year                                                              -              (1.5)
Net capital allowances on asset disposals                                                           -              (1.9)
Disallowable expenses                                                                            0.2                0.8
Share Scheme timing difference                                                                      -              (0.3)
Net tax on fair value gains of assets                                                               -              (2.5)
Overprovision in respect of prior years                                                         (0.8)              (2.8)
Effect on deferred tax following change in corporation tax rate                                  1.1                     -


                                                                                              (10.0)               (1.6)


10.      PROFIT OF WARNER ESTATE HOLDINGS PLC


The Company has taken advantage of the exemption provided by Section 230 of the Companies Act 1985 from presenting its own income statement. Profit attributable to
members includes £199.0million (2007: £3.6million restated) which has been dealt with in the accounts of the Company.


11.      DIVIDENDS


Group and Company                                                                              2008              2007
                                                                                                 £m                £m
On Ordinary 5p shares
Final 11p at 31 March 2007 paid 21 September 2007                                                6.2               5.3
(Final at 31 March 2006: 10.0p)
Interim 11.25p at 30 September 2007 paid 22 February 2008                                        6.3               5.4
(Interim at 30 September 2006: 10.0p)
                                                                                                12.5              10.7


A final dividend of 11.25p per share amounting to a total of £6.2million is proposed by the Board of which the PID element is 6.25p. The dividend proposed is not accounted
for until it has been approved at the Annual General Meeting. The amount will be accounted for as an appropriation of revenue reserves in the year ending 31 March 2009.



                                                                                    44
12.    EARNINGS PER SHARE


Losses per share of 203.61p (2007: 129.26p earnings) are calculated on the losses for the year of £113.5million (2007: £69.4million profit) and the weighted average of
55,759,748 (2007: 53,709,342) shares in issue throughout the year.


Diluted losses per share of 200.99p (2007: 127.69p earnings) are calculated on the profit for the year as above divided by the weighted average number of shares in issue,
being 56,485,386 (2007: 54,369,516) after the dilutive impact of share options granted.


A reconciliation of the weighted average number of shares used to calculate earnings per share and to that used to calculate diluted earnings per share is shown below:
                                                                                                        2008                  2007


Earnings per share: weighted average number of shares                                              55,759,748            53,709,342
Weighted average ordinary shares to be issued under employee incentive arrangements                  725,638               660,174
Diluted earnings per share: weighted average number of shares                                      56,485,386            54,369,516


13.    GOODWILL


                                                                                                       £m
Group
Cost
At 31 March 2007                                                                                      11.3
Additions                                                                                                -
At 31 March 2008                                                                                      11.3
Impairments                                                                                              -
At 31 March 2007 and 31 March 2008                                                                       -
Net book value at 31 March 2008                                                                       11.3
Net book value at 31 March 2007                                                                       11.3


Goodwill is not amortised but is subject to an annual impairment test. Goodwill of £11.2million is allocated to the cash generating unit (“CGU”) defined as the fund
management business owned by Industrial Funds Limited. Goodwill of £0.1million is allocated to the CGU defined as the property investment business owned by JS Real
Estate Plc. The recoverable amount of each of the CGUs has been calculated based on the value−in−use calculations. These calculations use cash flow projections based on
financial projections approved by management covering a five year period.


14.    INVESTMENT PROPERTIES AND PROPERTIES UNDER THE COURSE OF DEVELOPMENT


                                                                     Freehold      Leasehold                 Total         Properties
                                                                                    with over          Investment          Under the
                                                                                     50 years           Properties          Course of
                                                                                   unexpired                             Development
                                                                          £m              £m                      £m              £m
Group
At 31 March 2007                                                        397.2              40.6                 437.8            19.7
Additions                                                                25.0              75.2                 100.2                 -
Capital expenditure                                                        4.9              0.2                   5.1             9.1
Transfers                                                                28.8                  -                 28.8           (28.8)
Disposals                                                               (63.3)                 -                (63.3)                -
Exchange differences                                                       0.7                 -                  0.7                 -
Net losses from fair value adjustments on investment property           (33.9)            (16.8)                (50.7)                -
At 31 March 2008                                                        359.4              99.2                 458.6                 -


The properties under the course of development relate to the Group’s investment in a shopping centre development at Folkestone. This development was completed in
November 2007 and the property transferred to investment properties.


The Group’s investment portfolio was valued externally principally by Cushman & Wakefield Healey & Baker on an open market basis in accordance with the recommended
guidelines of the Royal Institution of Chartered Surveyors as at 31 March 2008.




Investment properties were valued as follows:
                                                                                      45
                                                                                                                      £m
Cushman & Wakefield Healey & Baker                                                                                369.4
CB Richard Ellis                                                                                                     84.2
DTZ Debenham Tie Leung                                                                                                4.7
                                                                                                                  458.3


A reconciliation of investment property valuations to the balance sheet carrying value of property is shown below:
                                                                                                                     2008          2007
                                                                                                                      £m             £m
Investment property at market value as determined by external valuers and Directors’ valuation                    458.3            441.6
Add minimum payment under head leases separately included as a creditor in the balance sheet                          3.7            1.5
Less accrued lease incentives separately accrued as a debtor in the balance sheet                                    (0.7)             -
Less properties treated as finance lease assets                                                                      (2.7)         (5.3)
Balance sheet carrying value of investment property                                                               458.6            437.8


Included within investment properties is interest capitalised of £3.5million at 31 March 2008 (2007: £2.3million).


All repairs and maintenance costs are charged to the income statement during the financial period in which they are incurred. Therefore, no costs in respect of repairs and
maintenance are included within the above figures (2007: £Nil)


On an historical cost basis the investment properties which have been included above at valuation would have been shown at cost as £455.5million (2007: £399.7million).


Investment properties valued at £453.6million are used as security for Group loans.


15.    PLANT AND EQUIPMENT


                                                                                                                      £m
Group
Cost
At 31 March 2007                                                                                                      1.4
Additions                                                                                                             0.1
Disposals                                                                                                                -
At 31 March 2008                                                                                                      1.5


Depreciation
At 31 March 2007                                                                                                      0.8
Charge for year                                                                                                       0.2
Disposals                                                                                                                -
At 31 March 2008                                                                                                      1.0
Net book value at 31 March 2008                                                                                       0.5
Net book value at 31 March 2007                                                                                       0.6


Plant and equipment include plant, machinery, fixtures, fittings, motor vehicles and equipment.




                                                                                      46
16.    INVESTMENTS IN JOINT VENTURES


Group                                                                          £m
Share of joint ventures
At 31 March 2007                                                             151.6
Share of post-tax losses for the year                                        (60.8)
Net equity movements                                                          14.6
Net loan movements                                                           (15.4)
At 31 March 2008                                                              90.0




                                                                              2008    2007
                                                                               £m       £m
Unlisted shares at cost                                                       87.7     72.8
Group’s share of post acquisition retained (losses) / profits and reserves    (1.3)    59.8
                                                                              86.4    132.6
Amounts owed by joint ventures                                                  3.6    19.0
                                                                              90.0    151.6




                                                                               47
Included in share of joint ventures' gross assets and liabilities are:
                                                                    Agora              Radial     Agora     Greater    Others     Total
                                                                 Shopping        Distribution       Max     London
                                                                  Centres            Limited     Limited     Offices
                                                                                                            Limited
                                                                           (a)           (b)         (c)         (d)      (e)
                                                                           £m            £m          £m          £m       £m        £m
Year to 31 March 2008
Group share of results
Revenue                                                                    8.9            8.6       11.7         3.3         -     32.5
  Operating profit before net gains on investments                         5.4            8.1        7.9         2.4      0.5      24.3
  Net loss from fair value adjustments on investment                 (13.1)            (22.0)      (26.3)      (1.9)         -    (63.3)
  properties
  Operating (loss) / profit                                              (7.7)         (13.9)      (18.4)        0.5      0.5     (39.0)
  Net finance expense                                                    (4.5)          (7.0)       (8.1)      (2.4)         -    (22.0)
  Change in fair value of derivative financial                           (2.3)          (1.0)       (2.9)      (1.2)         -     (7.4)
  instruments
  (Loss) / profit before income tax                                  (14.5)            (21.9)      (29.4)      (3.1)      0.5     (68.4)
  Taxation – current                                                     (0.5)            0.1        0.3           -     (0.1)     (0.2)
  Taxation – deferred                                                      1.0            0.3        5.8         0.7         -      7.8
(Loss) / profit for the year                                         (14.0)            (21.5)      (23.3)      (2.4)      0.4     (60.8)


Amounts receivable by Group
  Asset management fees                                                    0.4            0.4        1.0         0.4         -      2.2
  Performance fees                                                           -               -          -          -         -         -
  Interest receivable                                                        -               -          -        0.6         -       0.6


Group share of
Non−current assets
  Investment properties                                                  124.9         123.5       153.1       48.1          -    449.6
  Finance lease assets                                                       -            3.2           -          -         -       3.2
  Derivative financial assets                                                -            0.2        3.6           -         -      3.8
  Deferred income tax assets                                               0.6               -          -        0.4         -      1.0
  Other non−current assets                                                 1.3               -          -          -         -      1.3
                                                                         126.8         126.9       156.7       48.5          -    458.9
Current assets
  Finance lease assets                                                       -            0.3           -          -         -      0.3
  Other current assets                                                     1.9            3.8        4.2         1.8      0.3      12.0
                                                                           1.9            4.1        4.2         1.8      0.3      12.3
Total assets                                                             128.7         131.0       160.9       50.3       0.3     471.2
Non−current liabilities
  Derivative financial liabilities                                       (1.2)               -          -      (0.5)         -     (1.7)
  Deferred income tax liabilities                                            -          (0.1)       (1.1)          -         -     (1.2)
  Borrowings, including finance leases                               (86.0)           (107.9)    (132.1)      (39.5)         -   (365.5)
  Other non−current liabilities                                          (0.7)          (0.9)           -          -         -     (1.6)
                                                                     (87.9)           (108.9)    (133.2)      (40.0)         -   (370.0)
Current liabilities
  Borrowings, including finance leases                                       -               -          -          -         -         -
  Other current liabilities                                              (3.4)          (2.8)       (6.3)      (2.0)     (0.3)    (14.8)
                                                                         (3.4)          (2.8)       (6.3)      (2.0)     (0.3)    (14.8)
Total liabilities                                                    (91.3)           (111.7)    (139.5)      (42.0)     (0.3)   (384.8)
Share of net assets                                                       37.4          19.3        21.4         8.3         -     86.4




                                                                                        48
Included in share of joint ventures' gross assets and liabilities are:
                                                                    Agora              Radial     Agora     Greater    Others     Total
                                                                 Shopping        Distribution       Max     London
                                                                  Centres            Limited     Limited     Offices
                                                                                                            Limited
                                                                           (a)           (b)         (c)         (d)      (e)
                                                                           £m            £m          £m          £m       £m        £m
Year to 31 March 2007
Group share of results
Revenue                                                                    8.5            7.0       11.3         1.5         -     28.3
  Operating profit before net gains on investments                         3.6            6.3        5.3         1.2         -     16.4
  Net gain from fair value adjustments on investment                       3.6            7.2        6.6         0.4         -     17.8
  properties
  Profit on sale of investment                                               -            0.4           -          -         -      0.4
  properties
  Operating profit                                                         7.2           13.9       11.9         1.6         -     34.6
  Net finance expense                                                    (5.0)          (6.4)       (7.0)      (1.2)      0.1     (19.5)
  Change in fair value of derivative financial                               -            1.5        6.5         0.7         -      8.7
  instruments
  Profit before income tax                                                 2.2            9.0       11.4         1.1      0.1      23.8
  Taxation – current                                                       0.6               -          -          -     (0.1)       0.5
  Taxation – deferred                                                      7.7            3.0       (4.7)      (0.3)         -       5.7
  Profit after income tax                                                 10.5           12.0        6.7         0.8         -     30.0
  REIT conversion charge                                                 (1.3)          (1.5)           -          -         -     (2.8)
Profit for the year                                                        9.2           10.5        6.7         0.8         -     27.2


Amounts receivable by Group
  Asset management fees                                                    0.7            0.8        1.0           -         -       2.5
  Performance fees                                                         3.0               −       3.7           -         -      6.7
  Interest receivable                                                      0.5            0.7           -        0.3         -       1.5


Group share of
Non−current assets
  Investment properties                                                  132.2         143.8       179.0       49.5          -    504.5
  Finance lease assets                                                       -            3.4           -          -         -       3.4
  Derivative financial assets                                              1.1            1.2        6.5         0.7         -       9.5
  Other non−current assets                                                 0.4               -          -          -         -      0.4
                                                                         133.7         148.4       185.5       50.2          -    517.8
Current assets
  Finance lease assets                                                       -            0.2           -          -         -       0.2
  Other current assets                                                     5.2            7.3        4.9         1.2      3.1      21.7
                                                                           5.2            7.5        4.9         1.2      3.1      21.9
Total assets                                                             138.9         155.9       190.4       51.4       3.1     539.7
Non−current liabilities
  Deferred income tax liabilities                                        (0.4)          (0.4)       (6.9)      (0.3)         -     (8.0)
  Borrowings, including finance leases                                   (4.5)        (110.0)     (131.9)     (39.4)         -   (285.8)
  Other non−current liabilities                                          (1.1)          (1.3)           -          -         -     (2.4)
                                                                         (6.0)        (111.7)    (138.8)      (39.7)         -   (296.2)
Current liabilities
  Borrowings, including finance leases                               (72.9)                  -          -          -         -    (72.9)
  Other current liabilities                                              (6.1)          (3.6)      (24.5)      (1.5)     (2.3)    (38.0)
                                                                     (79.0)             (3.6)      (24.5)      (1.5)     (2.3)   (110.9)
Total liabilities                                                    (85.0)           (115.3)    (163.3)      (41.2)     (2.3)   (407.1)
Share of net assets                                                       53.9           40.6       27.1       10.2       0.8     132.6




                                                                                        49
  (a) Agora Shopping Centres was set up on 5 March 2003 and subsequently acquired the Pyramids, Birkenhead on 25 June 2003 and The Grange, Birkenhead on 30
         September 2004. On 7 March 2006, The Pyramids, Birkenhead and The Grange, Birkenhead were disposed of into the Agora Max joint venture group.
  (b) Fairway Industrial Limited was set up on 29 August 2003 and changed its name to Radial Distribution Limited on 14 October 2004.
  (c) Agora Max Limited was set up on 16 September 2005 and subsequently acquired The Pallasades, Birmingham on 25 October 2005. The Pyramids and The Grange,
         both in Birkenhead, were acquired from Agora Shopping Centres on 7 March 2006.
  (d) Greater London Offices Limited was set up on 28 September 2006 and subsequently acquired Old Broad Street and Central House, London.
  (e) Net assets relate to investments in smaller joint ventures acquired through Ashtenne.


Joint venture investment properties are valued by DTZ Debenham Tie Leung and CB Richard Ellis.
All joint ventures are incorporated in the United Kingdom.


Amounts owed by joint ventures comprise:
                                                                                  2008          2007
Group                                                                               £m            £m
Agora Shopping Centres Limited                                                        -          (1.1)
Greater London Offices Limited                                                      3.6           3.6
Agora Max Limited                                                                     -          17.5
Others                                                                                -          (1.0)
                                                                                    3.6          19.0


During the year the transactions on the loan accounts between the Group and the joint ventures were as follows:


                                                                                Repaid         Loaned             Total
                                                                                    £m             £m               £m
      Agora Shopping Centres Limited                                                1.1                  -          1.1
      Agora Max Limited                                                          (17.5)                  -        (17.5)
      Others                                                                        1.0                  -          1.0
                                                                                 (15.4)                  -        (15.4)


17.      INVESTMENTS IN FUNDS


Group
                                                                                   £m
As at 1 April 2007                                                               120.6
Net loss from fair value adjustments                                            (21.7)
At 31 March 2008                                                                  98.9




                                                                                     50
Fund Information:
                                                                                 AIF                Apia            Others                 Total
                                                                                   (a)                (b)                 (c)
                                                                                  £m                 £m                   £m                 £m
Year to 31 March 2008


Distributions receivable                                                          2.1                 4.0                   -                6.1


Net assets at 31 March 2008                                                     577.8              221.2                    -
Percentage share at 31 March 2008                                              6.52%             27.43%                     -
Group share of net assets                                                        37.7               60.7                  0.5               98.9




Fund Information:
                                                                                 AIF                Apia             Others                Total
                                                                                   (a)                (b)                 (c)
                                                                                  £m                  £m                  £m                 £m
Year to 31 March 2007


Distributions receivable                                                          2.9                 3.1                   -                6.0


Net assets at 31 March 2007                                                     687.5              266.5                    -
Percentage share at 31 March 2007                                              6.52%             28.07%                     -
Group share of net assets                                                        44.8               74.8                  1.0              120.6


(a)   The Group invested £12million in the Ashtenne Industrial Fund in August 2005; a £23.1million investment was acquired on the purchase of the remaining 50% of
      Industrial Funds Limited.
(b)   Apia was set−up on 7 June 2005 and the Group invested an initial £44.1million. A further £10.0million was invested in December 2005, of which £0.9million was
      disposed of in March 2006, and £0.4million in May 2006. It is treated as an investment rather than an associate as the Group does not have the power to exert significant
      control as a Trustee which is independent of the Group is responsible for the strategic decisions of the unit trust and the Group’s investment holding in the unit trust will
      continue to reduce over the short−term.
(c)   This relates to minority interest holdings in Agora Max Unit Trust, Agora Max Birkenhead Unit Trust and The Pallasades Birmingham Unit Trust.


  The units held in AIF valued at £21.6million and the units in Apia valued at £60.7million are used as security for Group loans.


18.    INVESTMENTS IN LISTED AND UNLISTED SHARES



                                                                                         Group                     Company
                                                                                                                                Restated
                                                                                     2008          2007          2008              2007
                                                                                         £m          £m            £m                £m
Subsidiary undertakings (a)                                                                -            -        361.7            251.9
Listed investments (b)                                                                   0.5         1.1              -                -
Unlisted investments                                                                     9.3        12.2           9.0             12.0
                                                                                         9.8        13.3         370.7            263.9




                                                                                          51
(a)    SUBSIDIARY UNDERTAKINGS


                                                              Shares in             Loans to
                                                             subsidiary           subsidiary       Company
                                                           undertakings         undertakings          total
                                                                    £m                   £m             £m
Cost
At 31 March 2007 as previously reported                             198.4                  51.6       250.0
Prior year adjustment                                                     1.9                 -         1.9
                                                                    200.3                  51.6       251.9
Additions                                                           116.0                     -       116.0
Disposals                                                               (6.2)                 -        (6.2)
At 31 March 2008                                                    310.1                  51.6       361.7


(b)    LISTED INVESTMENTS


                                                                Group               Company
                                                                         £m                 £m
Listed on the London Stock Exchange
At 31 March 2007                                                         1.1                   -
Net loss from fair value adjustments                                    (0.6)                  -
At 31 March 2008                                                         0.5                   -


                                                                 Group              Company
                                                                         £m                 £m
Historic cost of listed investments
At 31 March 2008                                                          3.9                 -
At 31 March 2007                                                          3.9                 -

(C)    UNLISTED INVESTMENTS


                                                                    Group           Company
                                                                          £m                £m
At 31 March 2007                                                         12.2              12.0
Net movements                                                           (2.9)              (3.0)
At 31 March 2008                                                          9.3               9.0


19.    TRADE AND OTHER RECEIVABLES


                                            Group              Company
                                                                                Restated
                                          2008      2007      2008                 2007
                                           £m        £m        £m                    £m
Amounts falling due within one year:
Trade receivables                          7.4      17.1            -                  -
Amounts owed by Group undertakings           -         -     414.8                349.5
Other debtors                             13.8       6.9       0.8                   0.2
Prepayments and accrued income             6.3       5.7            -                1.2
                                          27.5      29.7     415.6                350.9
Amounts falling due after more than
one year:
Lease incentive debtors                    0.6         -            -                  -


Total trade and other receivables         28.1      29.7     415.6                350.9




20.    NET INVESTMENT IN FINANCE LEASES
                                                               52
Group
                                                     2008                                                                2007
                        Gross investment        Unearned finance          Net investment          Gross investment    Unearned finance    Net investment
                            in finance lease                 income       in finance lease         in finance lease             income    in finance lease
                                          £m                    £m                    £m                       £m                  £m                 £m
Within one year                           0.2                  (0.2)                     -                     0.3                (0.3)                  -
Between two
and five years                            0.8                  (0.8)                     -                     1.2                (0.9)               0.3
Later than five
years                                  14.3                   (10.5)                  3.8                     20.5               (15.5)               5.0
Total                                  15.3                   (11.5)                  3.8                     22.0               (16.7)               5.3


The Group has leased out an investment property under a finance lease of 63 years in duration. This is accounted for as a finance lease receivable rather than an investment
property and is equal to the total of the discounted future lease payments and the discounted unguaranteed residual value of the property. During the year the Group disposed
of a building classified as a finance lease with a carrying value of £1.5million. Net sales proceeds were £1.6million. The unguaranteed residual value of the remaining
buildings comprising the investment property is £2.4million (2007: £3.1million). The fair value of the Group’s finance lease receivables approximates to the carrying value.


21.      BORROWINGS, INCLUDING FINANCE LEASES


                                                        Group                            Company
                                                     2008               2007            2008               2007
                                                      £m                 £m                  £m              £m
Amounts falling due after more than
one year:
Bank overdrafts                                     322.0              255.0            144.1             119.6
Bank loans                                           24.8               30.2                  -                -
Finance lease obligations (see note 23)               3.7                1.5                  -                -
                                                    350.5              286.7            144.1             119.6
Amounts falling due within one year:
Bank overdrafts                                      55.0                   -                 -                -
Bank loans                                            0.4               25.8                  -                -
Finance lease obligations (see note 23)               0.1                   -                 -                -
                                                     55.5               25.8                  -                -


Total borrowings, including finance                 406.0              312.5            144.1             119.6
leases
Cash and cash equivalents                           (55.5)             (34.3)           (7.1)                  -
Net borrowings                                      350.5              278.2            137.0             119.6


Bank loans and overdrafts are secured on certain properties valued at £453.6million as detailed in note 14 and by floating charges on unit holdings in the Apia Regional Office
Fund and the Ashtenne Industrial Fund, valued at £60.7million and £21.6million respectively, as set out in note 17.




                                                                                         53
Bank loans and overdrafts                       2008               2007
                                                  £m                 £m
Group
Within one year or on demand                     55.4               25.8
Between one and two years                         0.5                0.4
Between two and five years                     347.2               286.0
                                               403.1               312.2
Future finance costs                            (0.9)               (1.2)
                                               402.2               311.0


Company
Within one year on demand                            -                  -
Between two and five years                     144.1               119.6
                                               144.1               119.6


Of the borrowings at 31 March 2008 £25.2million were non−recourse loans (2007: £25.6million).


As stated in note 23, the Group’s operations are predominantly in the UK and therefore bank borrowings are denominated in Sterling. The Group’s average cost of debt at the
year end was 5.84% (2007: 6.18%). The proportions of debt held on fixed or floating rate debt, together with the hedging in place at 31 March 2008, are set out in the Net
Debt section of the Finance Review. A comparison of the fair values to carrying values of financial assets and liabilities is also set out in note 23.


22.     FINANCE LEASE OBLIGATIONS


Group                                                                                   2008          2007
                                                                                          £m            £m
(a) Minimum lease payments under finance leases fall due:
Not later than one year                                                                   0.3           0.1
Later than one year and not later than five years                                         1.3           0.5
Later than five years                                                                    15.1          12.3
                                                                                         16.7          12.9
Future finance charges on finance leases                                               (12.9)        (11.4)
Present value of finance lease liabilities                                                3.8           1.5
(b) Present value of minimum finance lease obligations:
Not later than one year                                                                   0.1              -
Later than one year and not later than five years                                         0.3           0.1
Later than five years                                                                     3.4           1.4
                                                                                          3.8           1.5


The fair value of the Group’s finance lease obligations approximate to the carrying value.


Finance lease obligations are in respect of leased investment properties.


Finance lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.


23.     FINANCIAL RISK MANAGEMENT


TREASURY POLICY


The Group enters into derivative transactions such as interest rate swaps and caps in order to manage the financial risks arising from the Group’s activities. The main
financial risks arising from the Group’s financing structure are liquidity risk and interest rate risk. The policies for managing each of these risks and the principal effects of
these policies on the results for the year are set out below.




                                                                                            54
LIQUIDITY RISK


The Group’s policy is to ensure that there are always sufficient working capital facilities available to meet the requirements of the business. On renewal of a revolving credit
facility in June 2008, the maturity profile of Group debt is that the fixed rate debt has a maturity of more than four years and the floating rate debt will mature between two to
five years. The revolving credit facilities are for three years each, the intention being to renew these facilities and extend them for a further three years before they mature.
The effect is to minimise any refinancing risk.


Capital expenditure to be incurred by the Group is funded through the revolving credit facilities. In the joint ventures, capital expenditure is funded through dedicated capital
expenditure facilities. This policy ensures that adequate funds are always available to meet any capital expenditure commitments as and when they fall due.


The tables below set out the maturity analysis of the Group’s financial liabilities based on undiscounted contractual obligations



Group
2008                                 Less than 1 year          1 to 2 years      2 to 5 years     Over 5 years                        Total
                                                    £m                  £m                 £m                £m                         £m
Bank loans and overdrafts                          55.4                  0.5            347.2                   -                     403.1
Trade and other payables                           26.0                 3.3                6.6                  -                      35.9
Finance lease liabilities                           0.3                 0.3                1.0              15.1                       16.7
                                                   81.7                 4.1             354.8               15.1                      455.7


Interest on bank loans and                         20.9                20.9               21.5                  -                      63.3
overdrafts
Cash inflows from gross
settled derivatives                               (0.7)                (0.8)             (1.3)                  -                      (2.8)
                                                  101.9                24.2             375.0               15.1                      516.2


Group
2007                                 Less than 1 year          1 to 2 years      2 to 5 years     Over 5 years                        Total
                                                    £m                  £m                 £m                £m                         £m
Bank loans and overdrafts                          25.8                  0.4            286.0                   -                     312.2
Trade and other payables                           46.8                 3.3               10.9                  -                      61.0
Finance lease liabilities                           0.1                 0.1                0.4              12.3                       12.9
                                                   72.7                 3.8             297.3               12.3                      386.1


Interest on bank loans and                         17.6                15.7               17.5                  -                      50.8
overdrafts
Cash inflows from gross
settled derivatives                               (0.3)                (0.6)             (1.5)                  -                      (2.4)
                                                   90.0                18.9             313.3               12.3                      434.5


Company
2008                                 Less than 1 year          1 to 2 years      2 to 5 years     Over 5 years                        Total
                                                    £m                  £m                 £m                £m                         £m
Bank loans and overdrafts                             -                    -            144.1                   -                     144.1
Trade and other payables                          246.2                 0.2                0.4                  -                     246.8
                                                  246.2                 0.2             144.5                   -                     390.9


Interest on bank loans and                            -                    -                  -                 -                          -
overdrafts
Cash inflows from gross
settled derivatives                                   -                    -                  -                -                           -
                                                  246.2                 0.2             144.5                   -                     390.9




                                                                                         55
Company
2007                                  Less than 1 year          1 to 2 years      2 to 5 years     Over 5 years                        Total
                                                      £m                 £m                £m                 £m                         £m
Bank loans and overdrafts                               -                  -             119.6                  -                      119.6
Trade and other payables                            277.6                  -                  -                 -                      277.6
                                                    277.6                  -             119.6                  -                      397.2


Interest on bank loans and                              -                  -                  -                 -                           -
overdrafts
Cash inflows from gross
settled derivatives                                     -                  -                  -                 -                           -
                                                    277.6                  -             119.6                  -                      397.2



The contractual obligation for interest payments on the bank loans and overdrafts belong to a fellow group company, and therefore no interest on bank loans or overdrafts is
shown in the company’s maturity analysis.




INTEREST RATE RISK

The Group is exposed to market price risk through interest rate movements. As demonstrated in the section on Hedging in the Finance Review, the Group’s policy is to
substantially eliminate the risk arising from changes in interest rates by hedging the floating rate debt to provide certainty as to how much the interest cost will be, such that in
the long term any fluctuations in interest rates will have little or no impact on reported profits. The Group is, however, exposed to market price risk in respect of the fair value
of its fixed rate financial instruments.


The Group’s policy is to eliminate substantially the exposure to interest rate fluctuations in order to provide certainty over the amount of interest payable both in the
short−term and the long−term, given the current level of borrowings. One quarter of the Group’s debt is fixed and the remainder is floating. The floating debt is either linked
to LIBOR or the Base Rate. The fixed rate debt together with swaps and caps effective as at 31 March 2008, equate to 70% (2007:63%) of Group debt.


The Group is exposed to fair value interest rate risk on its fixed rate debt and cash flow interest rate risk on floating rate bank loans and revolving credit facilities. The
forecast cash and borrowings profile of the Group is monitored regularly to assess the mix of fixed and floating rate debt and the Group uses interest rate derivatives where
appropriate to reduce its exposure to changes in interest rates and the economic environment.


At 31 March 2008, the Group’s floating rate debt was £324.7million (2007: £ 256.9million), net of cash balances available for offset as detailed below. Of this, £220.1million
(2007: £145.9million) has been hedged with derivative instruments of which £70.1million (2007: £45.9million) is hedged by swaps and callable swaps, and a further
£150.0million (2007: £100.0million) is hedged by a cap @ 6.25% until 2012.


The derivative instruments are used to hedge the variability of cash flows from debt instruments. The fair values of derivatives are determined by discounting the future cash
flows using the mid point of the relevant yields curves prevailing on the reporting dates. The derivatives are held for hedging purposes and provide protection against the
effects of the rising short term interest rates. However, it is recognised that of the total hedging in place at 31 March 2008, £50.0million (2007: £25.0million) may be called at
the Bank’s discretion within the next five years.


There is an additional callable swap in place amounting to £25.0million @ 3.84% which becomes effective in March 2009. The bank has the right to cancel or double the
swap to £50.0million in March 2012 and it is callable every three years thereafter.


The Group has elected not to designate the hedge contracts as being hedge effective for accounting purposes and therefore changes in the fair value of the hedge contracts will
be taken to the income statement.




                                                                                         56
INTEREST RATE SENSITIVITY


The table below shows the Group’s sensitivity to movements in interest rates. The Group has considered the movements in interest rates over the last two years and has
concluded that a 0.5% increase or decrease is a reasonable benchmark.


                                                                        Group                                                                               Company
2008                                           Interest            Callable        Interest Rate       Fixed Rate       Residual                Total              Total
                                                  Rate               Swaps                Caps              Debt              Debt
                                                Swaps
                    Net debt                    £20.1m              £50.0m             £150.0m            £25.2m        £104.6m              £349.9m             £137.0m
                    Average Rate                 5.96%               4.25%                6.25%            5.52%          6.12%                5.84%              6.12%


                                                    £m                  £m                  £m                £m               £m                 £m                 £m
                    Fair Value                     (0.2)               (2.0)                 0.6                -                 -              (1.6)                  -
Sensitivity         Rise of 50bps                   0.1                  2.4                 0.5                -                 -               3.0                   -
                    Fall of 50bps                  (0.1)               (3.3)               (0.2)                -                 -              (3.6)                  -
Interest Rate       Rise of 50bps                   0.1                    -                 0.8                -              0.5                 1.4               0.7
                    Fall of 50bps                  (0.1)                   -               (0.8)                -             (0.5)              (1.4)              (0.7)




                                                                         Group                                                                                  Company
2007                                             Interest            Callable        Interest Rate      Fixed Rate        Residual                Total              Total
                                                     Rate              Swaps                 Caps             Debt             Debt
                                                   Swaps
                       Net debt                   £20.9m              £25.0m             £100.0m            £39.7m        £111.0m              £296.6m            £119.6m
                       Average Rate                5.96%               4.34%                7.25%            5.67%            6.14%              6.18%              6.14%


                                                      £m                   £m                   £m              £m               £m                  £m                £m
                       Fair Value                    (0.1)               (0.3)                  0.8                 -                 -              0.4                    -
Sensitivity            Rise of 50bps                   0.2                 1.3                  1.0                 -                 -              2.5                    -
                       Fall of 50bps                 (0.2)               (1.9)                 (0.4)                -                 -            (2.5)                    -
Interest Rate          Rise of 50bps                   0.1                     -                0.5                 -             0.5                1.1                0.6
                       Fall of 50bps                 (0.1)                     -               (0.5)                -           (0.5)              (1.1)              (0.6)


The total sensitivity to interest rate increases and decreases is the total impact on both the income statement and equity.


The residual debt is net of cash balances of £52.3million (2007: £14.4million) for the Group and £7.1million (2007: Nil) for the company which can be offset under the
Group’s borrowing arrangements.


At 31 March 2008 the fair value of the Group’s derivative instruments resulted in a £1.6million net asset (2007: £0.4million net asset). Had the valuation rates been 0.5%
higher, the fair value would have been £3.0million higher (2007:£2.5million). Had the valuation rates been 0.5% lower, the fair value would have been £3.6million lower
(2007: £2.5million).


At 31 March 2008, the Group had fixed rate liabilities of £25.2million (2007: £39.7million) at a rate of 5.52%. (2007: 5.67%). At 31 March 2008 the fair value adjustment
(which is not booked) of the fixed rate liabilities was a negative £0.2million (2007: £1.0million), giving a fair value of £25.4million (2007: £38.7million).


At 31 March 2008, the residual floating rate debt amounted to £104.6million (2007: £111.0million). If short term interest rates had been 0.5% higher the annualised cost to
the Group would have been £0.5million (2007: £0.5million). Had short term rates been 0.5% lower the Group would have benefited by the same amount.


FOREIGN CURRENCY RISK

The Group has no material foreign currency exposure as the Group’s operations are predominantly in the UK and therefore virtually all revenue and costs are denominated in
Sterling.




                                                                                          57
CREDIT RISK


The Group has no significant concentration of credit risk as exposure is spread over a large number of counterparties.


The credit risk in liquid funds and derivative financial instruments is limited due to the counterparties being banks with high credit ratings assigned by international credit
rating agencies. As at the balance sheet date the book value of loans £350million and the fair values of swaps and caps approximates the maximum credit risk the Group is
exposed to.


The maximum amount the Group is exposed to on investments in funds, listed and unlisted investments is the carrying values in the balance sheet. Investments in funds are
with reputable counterparties. Financial information is issued by all investments on a regular basis which is reviewed by management.


The Group is exposed to credit risk in respect of its trade receivables. Potential customers are evaluated for creditworthiness and, where necessary, collateral is secured in the
form of rent deposits. There is no concentration of credit risk within the lease portfolio to either business sector or individual company as the Group has a well spread and
diverse customer base.


At 31 March 2008, trade receivables consisting of rents and asset management fees receivable, of £7.4million (2007: £17.1million) were past due but not impaired. These
relate to customers for whom there is no recent history of default. The amounts presented in the balance sheet are net of allowances for doubtful receivables.


The ageing analysis of these trade receivables is as follows:


Group                                                                                    2008          2007
                                                                                          £m             £m
Up to three months                                                                        6.5           15.9
Three to six months                                                                       0.9            1.2
                                                                                          7.4           17.1


CAPITAL RISK MANAGEMENT


The current capital structure of the Group is considered appropriate and consists of a mix of equity and debt. Equity comprises issued capital, reserves and retained earnings
as disclosed in Notes 27 and 28. Debt primarily comprises long-term committed revolving credit facilities from banks as disclosed in Note 21.


The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns in order to optimise return to shareholders, and it aims to
maintain a prudent mix between debt and equity financing.


FINANCIAL LIABILITIES


Borrowing facilities


The Group has various borrowing facilities excluding term loans that were not fully utilised at the year end in which the conditions for utilising those facilities were met.


                                                                               2008             2007
                                                                               £m               £m
Expiring in one year or less:
Total facilities                                                               90.0             −
Unutilised and available for drawing                                           14.0             −
Expiring between two and five years:
Total facilities                                                               325.0            263.4
Unutilised and available for drawing                                           27.0             54.4


Interest rate derivatives to manage the interest rate profile are analysed as follows:


Group:
£19.35million swapped at 5.965% fixed to June 2009 (1)
£0.7million swapped at 5.88% fixed to March 2009 (1)
£150.0million capped at 6.25% to June 2012
£25.0million callable swap at 4.34% to March 2032 (2)
                                                                                           58
£25.0million callable swap at 4.16% to March 2033 (3)
£25.0million callable swap at 3.84% from March 2009 to March 2033 (4)


Joint Ventures:
£175.0million swapped at 4.1% to April 2008 (1)
£109.5million swapped at 4.5775% to February 2021 (1)
£124.2million capped at 5.00% to November 2008 (5)
£124.2million swapped at 4.54% from November 2008 to February 2021 (1)
£94.6million swapped at 4.96% to December 2009 (1)
£27.0million capped at 5.5% to December 2009 (1) & (6)
£72.2million swapped at 4.49% to October 2023 (1) & (7)
£31.7million swapped at 5.89% to October 2009 (8)
£50.0million swapped at 4.375% from April 2008 to April 2033 (1) & (9)
£50.0million swapped at 4.35% from April 2008 to April 2033 (1) & (9)
£85.0million swapped at 4.67% from April 2008 to September 2011 (1) & (10)


Note (1)   The quarterly payment / receipt is the difference between 3 month LIBOR and the rate quoted
Note (2)   Barclays Capital has the right to call the SWAP in March 2009 and each two year interval thereafter
Note (3)   Barclays Capital has the right to call the SWAP in December 2009 and each two year interval thereafter
Note (4)   Barclays Capital has the right to cancel or double the swap to £50million in March 2012 and call the swap every three years thereafter.
Note (5)   Should LIBOR fall below 4.45% the fixed rate of 4.7% will be charged
Note (6)   Should LIBOR fall below 4.18% the fixed rate of 4.68% will be charged
Note (7)   Barclays Capital has the right to call the SWAP in October 2011 and each five year interval thereafter
Note (8)   The quarterly payment / receipt is the difference between a zero coupon and the rate quoted
Note (9)   Bank of Scotland has the right to call the SWAP in April 2012 and each five year interval thereafter
Note (10) Bank of Scotland has the right to call the SWAP in April 2009 and April 2010



Gains and Losses on Derivatives held to Manage Debt

The Group uses interest rate derivatives to manage its interest rate profile. Changes in the fair value of these derivatives are recognised in the income statement. An analysis of
these derivatives and gains / (losses) thereon is as follows:


Group
                                                                                                        Derivative          Derivative financial                Total
                                                                                                   financial assets                   liabilities
                                                                                                                £m                            £m                  £m
Fair value at 31 March 2007                                                                                    (0.8)                          0.5                (0.3)
Change in fair value of derivative financial instruments during the year                                         0.2                          1.7                  1.9
Fair value at 31 March 2008                                                                                    (0.6)                          2.2                  1.6




                                                                                        59
           Financial Instruments - Categories                                         Group
                                                                         2008                        2007


                                                                Carrying        Fair value    Carrying   Fair value
                                                                   value                         value
                                                                        £m            £m           £m          £m
Financial assets


Fair value through income statement – held for trading
           Derivative financial assets                                  0.6            0.6         0.8         0.8
Fair value through income statement – designated on inception
           Investments in funds                                        98.9          98.9       120.6        120.6
           Investments in listed and unlisted shares                    9.8            9.8        13.3        13.3
Net investment in finance leases                                        3.8            3.8         5.3         5.3
Loans and receivables
           Trade and other receivables                                 28.1          28.1         29.7        29.7
           Cash and cash equivalents                                   55.5          55.5         34.3        34.3


Financial liabilities


Fair value through income statement – held for trading
           Derivative financial liabilities                            (2.2)         (2.2)       (0.5)        (0.5)
Amortised cost
           Borrowings                                             (402.2)          (402.4)     (311.0)      (310.0)
           Trade and other payables                                (35.9)           (35.9)      (61.0)       (61.0)
Finance lease obligations                                              (3.8)         (3.8)       (1.5)        (1.5)




                                                                                    Company
                                                                         2008                        2007


                                                                Carrying        Fair value    Carrying   Fair value
                                                                   value                         value
                                                                        £m            £m           £m          £m
Financial assets


Loans and receivables
           Investments in listed and unlisted shares               370.0            370.0       263.9        263.9
           Trade and other receivables                             415.6            415.6       350.9        350.9
           Cash and cash equivalents                                    7.1            7.1           -            -


Financial liabilities


Amortised cost
           Borrowings                                             (144.1)          (144.1)     (119.6)      (119.6)
           Trade and other payables                               (246.8)          (246.8)     (277.6)      (277.6)




                                                                  60
24.    DEFERRED INCOME TAX


                                                                                                        Group                           Company
                                                                                                                                                Restated
                                                                                                      2008             2007         2008             2007
                                                                                                       £m                 £m            £m            £m
Deferred taxation assets
  Deferred taxation arising from unrealised derivative financial instruments valuations                0.6                0.1            −             −
  Deferred taxation arising from retirement benefit obligations                                          −                0.1            −             −
  Deferred taxation arising from share based payments                                                  0.3                1.1            −              -
  Unrealised property and investment valuations                                                        1.0                 −             −             −
                                                                                                       1.9                1.3            −              -
Deferred taxation liabilities
Deferred taxation arising from the temporary differences noted below:
  Unrealised property and investment valuations                                                       (6.2)           (11.8)             −             −
                                                                                                      (6.2)           (11.8)             −             −


The movement in deferred tax assets and liabilities during the year is as follows:
                                                                                                              Group                                         Company
                                                                   Unrealised           Derivative      Retirement            Share                      Share
                                                                    fair value            financial         benefit           Based                      Based
                                                                         gains        instruments       obligations        Payments          Total    Payments        Total
                                                                           £m                   £m              £m              £m             £m          £m           £m
Deferred tax assets at 31 March 2007 as previously reported                   −                 0.1              0.1             1.1           1.3           1.0        1.0
Prior year adjustment                                                         −                   −                   −            −            −           (1.0)     (1.0)
                                                                              -                 0.1              0.1             1.1           1.3              -         -
Charged to income statement                                                 1.0                 0.5                   −            −           1.5             −         −
Charged to reserves                                                           −                   −             (0.1)           (0.8)        (0.9)             −         −
Total impact                                                                1.0                 0.5             (0.1)           (0.8)          0.6             −         −
Deferred tax assets at 31 March 2008                                        1.0                 0.6                   −          0.3           1.9             −         −


                                                                    Unrealised        Group Total
                                                                     fair value
                                                                          gains
                                                                            £m                 £m
Deferred tax liabilities at 31 March 2007                                (11.8)              (11.8)
Charged to income statement                                                 5.6                5.6
Total impact                                                                5.6                5.6
Deferred tax liabilities at 31 March 2008                                 (6.2)               (6.2)


25.    OTHER PROVISIONS


                                                                      Onerous        Performance              Total
                                                                     contracts               fees
                                                                           £m                 £m                £m
Group
At 31 March 2007                                                            5.3                   -             5.3
Charged to consolidated income statement:                                   1.2                1.6              2.8
Utilised during the year                                                   (3.5)                  -           (3.5)
At 31 March 2008                                                            3.0                1.6              4.6




                                                                                        61
Provisions have been analysed between current and non−current as follows:
                                                                                        Group
                                                                                      2008         2007
                                                                                       £m               £m
Non−current                                                                            1.4              5.3
Current                                                                                3.2                  −
                                                                                       4.6              5.3


The onerous lease provision is made in relation to onerous leases on properties which are vacant or sublet at a level which renders the properties loss−making over the
remaining life of the lease. The remaining lease lengths range between 1 and 11 years.


The provision represents the net cash flows on the properties as calculated by DTZ Debenham Tie Leung.


The key assumptions used are:
Rental growth rate                   1.50% per annum
Inflation rate                       1.50% per annum
Discount rate                        6.50%


26. TRADE AND OTHER PAYABLES


                                                                Group                            Company
                                                             2008             2007              2008            2007


                                                               £m               £m                £m              £m
Amounts falling due within one year:
Trade payables                                                 1.2              1.3                −              0.3
Amounts owed to Group undertakings                               −               −              240.5           250.7
Other taxation and social security                             2.0              1.8               1.1              −
Other payables                                                11.9            22.9                4.2            20.3
Accruals and deferred income                                  10.9            20.8                0.4             6.3
                                                              26.0            46.8              246.2           277.6
Amounts falling due after more than one year:
Other payables                                                 9.9            14.2                0.6              −
Total trade and other payables                                35.9            61.0              246.8           277.6


27.    SHARE CAPITAL


                                                                                                  2008           2007
Group and Company                                                                                  £m             £m
Authorised
60,000,000 Ordinary shares of 5p                                                                    3.0           3.0
Allotted, called up and fully paid
Ordinary shares of 5p
At 1 April                                                                                          2.8           2.7
Allotted through exercise of shares (2008: 62,655 shares, 2007: 3,605,702 shares)                       −         0.1
At 31 March (2008: 56,170,865 shares, 2007: 56,108,210 shares)                                      2.8           2.8


62,655 new Ordinary shares of 5p each were allotted for a cash consideration of £0.3million on the exercise of share options; 22,655 at 367.5p per share and 40,000 at 495.0p
per share.




                                                                                        62
At 31 March 2008 there were share options to subscribe for Ordinary shares under the Warner Estate Holdings 1995 Share Option Scheme as follows:


At 303.5p per share exercisable between 16 August 2004 and 15 August 2011                  89,510 shares
At 319p per share exercisable between 17 July 2005 and 16 July 2012                       100,910 shares
At 367.5p per share exercisable between 27 June 2006 and 26 June 2013                     159,399 shares
At 495p per share exercisable between 8 July 2007 and 7 July 2014                         165,817 shares
                                                                                          515,636 shares




Warner Estate Holdings PLC Share Options Scheme
                                                                2008                                  2007
                                                        Number          Average                Number          Average
                                                                        exercise                                exercise
                                                                           price                                   price
                                                                                 p                                    p
At 1 April                                               606,529           399.2                840,014           386.3
Options granted                                                 -                -                     -               -
Options exercised                                       (27,855)           391.3              (214,105)           352.2
Options expired/lapsed                                  (63,038)           495.0                       -               -
Options forfeited                                               -                -             (19,380)           445.1


At 31 March                                              515,636           387.9                606,529           399.2


All 515,636 of the options outstanding at 31 March 2008 (2007: 606,529) were exercisable (2007: 372,474).


At 31 March 2008 there were share options to subscribe for Ordinary shares at nil cost under the Warner Estate Holdings Performance Share Plan as follows:
Exercisable between 4 October 2008 and 3 April 2009                                       131,085 shares
Exercisable between 19 January 2009 and 18 July 2010                                       22,867 shares
Exercisable between 26 June 2009 and 25 December 2010                                     159,855 shares
Exercisable between 1 August 2009 and 31 January 2010                                       4,703 shares
Exercisable between 21 February 2010 and 20 August 2011                                     4,589 shares
Exercisable between 31 July 2010 and 30 January 2011                                      258,907 shares
                                                                                          582,006 shares


Warner Estate Holdings PLC Performance Share Plan
                                                                2008                                  2007
                                                        Number          Average                Number          Average
                                                                        exercise                                exercise
                                                                           price                                   price
                                                                                 p                                    p
At 1 April                                               364,756                 -              194,510                -
Options granted                                          269,385                 -              214,417                -
Options exercised                                               -                -                     -               -
Options expired/lapsed                                          -                -                     -               -
Options forfeited                                       (52,135)                 -             (44,171)                -
                                                                                                                       -
At 31 March                                              582,006                 -              364,756                -


None of the options outstanding at 31 March 2008 were exercisable (2007: Nil).


The average share price during the year was 537.7p (2007: 778.2p).




                                                                                     63
28.       OTHER RESERVES


                                                                    Non−distributable Reserves                             Distributable Reserves


                                                                   Share       Share Based     Revaluation               Other       Treasury      *Retained
                                                                Premium          Payments         Reserve             Reserve          Shares       Earnings     Total
                                                                      £m               £m              £m                  £m              £m            £m        £m
Group
At 31 March 2007                                                     40.4               1.8          151.0                 8.0               -         229.5     430.7
Premium on shares issued                                              0.3                 -              -                    -              -             -       0.3
Retained loss for the year                                                -               -              -                    -              -       (113.5)   (113.5)
Realised on disposal of investment properties                             -               -         (10.4)                    -              -          10.4          -
Net loss from fair value adjustment on investment                         -               -         (50.7)                    -              -          50.7          -
properties
Share of joint ventures’ net loss from fair value                         -               -         (63.3)                    -              -          63.3          -
adjustment on investment properties
Net loss from fair value adjustment on listed                             -               -          (0.6)                    -              -           0.6          -
investments
Net loss from fair value adjustment on unlisted                           -               -         (24.6)                    -              -          24.6          -
investments
Change in fair value of derivative financial                              -               -          (1.9)                    -              -           1.9          -
instruments
Change in fair value of joint ventures’ derivative                        -               -          (7.4)                    -              -           7.4          -
financial instruments
Dividends paid                                                            -               -              -                    -              -        (12.5)     (12.5)
Actuarial gains on pension scheme assets                                  -               -               -                   -              -           0.2       0.2
Deferred tax movement on pension assets                                   -               -              -                    -              -         (0.1)      (0.1)
Cost of share based payments                                              -             0.8              -                    -              -             -       0.8
Reallocation of AESOP costs                                               -            0.7               -                    -              -         (0.7)          -
Deferred tax movement on share based payments                             -           (0.8)              -                    -              -             -      (0.8)


Acquisition of treasury shares                                            -               -              -                    -          (1.5)             -      (1.5)
AT 31 MARCH 2008                                                     40.7               2.5          (7.9)                 8.0           (1.5)         261.8     303.6
*The closing balance on retained earnings reserve includes £0.1million liability (2007: £0.3million) stated after a deferred tax asset of £nil (2007: £0.1million) in
respect of the Group's defined benefit pension scheme as set out in note 3 to the accounts.


The total expenses for share based payments for the Group was £0.8million (2007: £1.0million).


The key assumptions used in valuing the fair value of share based payments are as follows:
Exercise price                 £nil
Share price                    Price at date of grant
Expected term                  3 years
Expected volatility(1)         25% for awards granted on 30 July 2007, 22% for awards granted on 21 February 2007, 19% for all other awards
Expected dividend yield        Dividends paid in the 12 months prior to grant calculated as a percentage of the share price on the date of grant
Risk free interest rate        Not applicable as exercise price is £nil
Model used                     Black-Scholes


(1)
      Volatility is calculated by looking at the historical share price movements prior to the date of grant over a period of time commensurate with the expected term for each
award (i.e. 3 years). The formula calculates the ratio of each day’s price to the preceding value, which gives a “dimensionless” figure. The final step is to calculate the
standard deviation of the logs of these ratios and to annualise this figure.




                                                                                          64
                                                                       Non−distributable Reserves                                             Distributable Reserves


                                                                     Share         Share Based            Revaluation      Other Reserve     Treasury      Retained
                                                                   Premium           Payments                  Reserve                        Shares       Earnings    Total
Company                                                                £m                       £m                 £m                  £m         £m            £m       £m
At 31 March 2007 as previously reported                               40.4                      1.8              (1.9)                 7.0          -         169.8    217.1
Prior year adjustment                                                    -                     (0.8)                 -                   -          -           0.8         -
At 31 March 2007 as restated                                          40.4                      1.0              (1.9)                 7.0          -         170.6    217.1
Premium on shares issued                                               0.3                         -                 -                   -          -              -     0.3
Retained loss for the year                                                -                        -                 -                   -          -         199.0    199.0
Net loss from fair value adjustment on unlisted                          -                         -             (3.0)                   -          -           3.0         -
investments
Dividends paid                                                            -                        -                 -                   -          -         (12.5)   (12.5)
Cost of share based payments                                             -                      0.8                  -                   -          -              -     0.8
Reallocation of AESOP costs                                               -                     0.7                  -                   -          -          (0.7)        -
Acquisition of treasury shares                                           -                         -                 -                   -      (1.5)              -    (1.5)
AT 31 MARCH 2008                                                      40.7                      2.5              (4.9)                 7.0      (1.5)         359.4    403.2


29. INVESTMENT IN OWN SHARES


Group and Company
                                                     Number             Cost
                                                              m           £m
At 31 March 2007                                          187.4              0.8
Additions                                                 122.5              0.5
Disposals                                                 (33.8)        (0.1)
At 31 March 2008                                          276.1             1.2


Additions relate to the Inland Revenue Approved All−Employee Share Ownership Plan.
Included in investment in own shares are shares relating to the Inland Revenue Approved All−Employee Share Ownership Plan, as follows:
                                                                                   2008                                  2007
                                                                   Number           Cost          Market       Number     Cost      Market
                                                                                                       value                         value
                                                                        m             £m                 £m         m      £m          £m
Partnership shares purchased by employees held in Trust               41.0                -              0.1      29.4          -      0.2
Matching and Free shares not yet vested                              180.0            1.0                0.6     137.7     0.7         1.2
                                                                     221.0            1.0                0.7     167.1     0.7         1.4


The vesting of Matching and Free shares is conditional on meeting the conditions of the scheme which are summarised in the Report and Accounts which will be published in
due course.


30. DIRECTORS’ INTERESTS AND RELATED PARTY TRANSACTIONS


Transactions between the company and subsidiaries, which are related parties, have been eliminated on consolidation for the Group.
Compensation of key management personnel is disclosed in the Report and Accounts which will be published in due course.




                                                                                          65
Transactions between the parent company and its subsidiaries are shown below:
                                                                                2008        2007
Subsidiary                                   Nature of transaction               £m          £m
Cardiff and Provincial Properties Limited    Dividend                              -         2.3
Clay Estates Limited                         Dividend                              -         0.8
Clay Group Limited                           Dividend                           40.4           -
Lancaster Holdings Limited                   Dividend                              -         1.0
Lancaster Investments Limited                Dividend                              -         0.5
Lotkeep Limited                              Dividend                              -         3.0
Warner Estate (Folkestone) Limited           Dividend                            0.7           -
Warner Estate (Jersey) Limited               Dividend                           85.0           -
Warner Estate, Limited                       Dividend                              -         3.0
Warner Investments Limited                   Dividend                           27.4         2.0




                                                                                       66
Balances outstanding between the parent company and its subsidiaries are shown below:
                                                            Amounts owed by                   Amounts owed to
                                                              subsidiaries                      subsidiaries
                                                                           Restated
                                                               2008              2007             2008           2007
Subsidiary                                                       £m                £m               £m             £m
Apia Asset Management Limited                                      -               0.1                 -             -
Ashtenne Holdings Limited                                          -                 -                 -        (16.7)
Birkby Limited                                                     -                 -                 -         (0.1)
Cardiff and Provincial Properties Limited                          -                 -             (9.7)        (15.1)
Clay Estates Limited                                               -                 -           (79.6)         (29.4)
Clay Group Limited                                                 -                 -             (5.1)         (1.6)
Clay Investments Limited                                           -                 -                 -         (8.8)
Clay Property Limited                                              -                 -                 -        (20.5)
Industrial Funds Limited                                         7.6                 -                 -             -
JS Real Estate Limited                                             -                 -           (13.5)              -
Lancaster Holdings Limited                                         -              55.7           (90.9)              -
Lancaster Investments (West Bromwich) Limited                      -               2.2                 -             -
Lancaster Investments Limited                                   26.2               3.3                 -             -
Lotkeep Limited                                                    -                 -             (3.2)        (25.7)
Mainscene Limited                                                  -                 -                 -        (21.3)
Park Street Properties Limited                                     -              15.1                 -             -
Principal Leasehold Properties Limited                             -               3.0           (12.2)              -
Radial Asset Management Limited                                    -               0.1                 -             -
Skipper Offices Limited                                            -                 -             (0.7)         (0.7)
Vere Street Investments Limited                                  4.3               5.2                 -             -
Vere Street (Jersey) Limited                                       -               0.4                 -             -
Warner Active Management No 2 Limited                              -                 -                 -         (3.6)
Warner Estate (AIF) Limited                                        -                 -             (1.3)         (0.7)
Warner Estate (GLO) Limited                                      9.5               9.5                 -             -
Warner Estate Asset Management Limited                             -                 -             (3.6)             -
Warner Estate Development (Folkestone) Limited                   2.0                 -                 -             -
Warner Estate (Folkestone) Limited                                 -                 -                 -         (0.3)
Warner Estate Investments Limited                              133.3              34.4                 -             -
Warner Estate (Jersey) Limited                                     −               8.7             (0.5)             -
Warner Estate (Joint Ventures) Limited                         140.9              92.5                 -             -
Warner Estate, Limited                                          31.6              73.9                 -             -
Warner Estate Management Limited                                 2.9              12.4                 -             -
Warner Estate Property Limited                                  56.5                 -                 -        (24.0)
Warner Estate Property Management Limited                          -                 -           (20.2)              -
Warner Funds Limited                                               -                 -                 -        (34.6)
Warner Industrial Acquisition Limited                              -              33.0                 -             -
Warner Industrial Investments Limited                              -                 -                 -        (38.0)
Warner Investments Limited                                         -                 -                 -         (9.6)
                                                               414.8            349.5             240.5          250.7
No fees were paid in respect of contracts, which provided services in the ordinary course of business to the Group, and in which Directors have or had interests.


During the year there were loan transactions between the Group and joint ventures, as set out in note 16. Interest payable on these loans and management charges, payable by
the joint ventures, are also set out in note 16.




                                                                                         67
31.     RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW
                                                                                      Group                        Company
                                                                                   2008           2007            2008         2007


                                                                                    £m                £m           £m           £m


Operating profit / (loss) before net gains on investments                          20.6            24.8           (3.2)        (3.1)
Depreciation of plant and equipment                                                 0.2               0.2             -            -
Decrease in inventories                                                                -              3.5             -            -
Decrease / (increase) in trade and other receivables                                9.0           (8.3)           28.5       (212.1)
(Decrease) / increase in trade and other payables                                 (22.9)         (14.1)          (28.7)       179.3
Cash generated from operations                                                      6.9               6.1         (3.4)       (35.9)


32. CONTINGENT LIABILITIES
                                                                                   2008                 2007
                                                                                     £m                     £m
Contingent liabilities in respect of guarantees given by the Company
in respect of borrowings of its subsidiaries as follows:
Bank overdrafts                                                                    231.8                136.1
                                                                                   231.8                136.1


These liabilities have not been recognised on the balance sheet.


33. OPERATING LEASE COMMITMENTS
                                                                                              2008                2007
                                                                                                £m                  £m
Group
Annual commitments in respect of operating leases on properties are as follows:
Within one year                                                                                 0.2                 0.2
Expiring between two and five years                                                             0.6                 0.8
Expiring after five years                                                                       1.3                 1.7
                                                                                                2.1                 2.7


34.        OPERATING LEASES GRANTED


The Group earns rental income by leasing its investment properties to tenants under operating leases.
At the balance sheet date, the Group had contracted with tenants to receive the following future minimum lease payments:

                                                                                              2008                2007
                                                                                                £m                  £m
Group


Within one year                                                                                28.6               22.3
Expiring between two and five years                                                            75.2               72.3
Expiring after five years                                                                     127.8              137.8
                                                                                              231.6              232.4


35. MINORITY INTEREST


This represents investments held by The FI5 Partnership in Balmcrest Estates Limited. The company paid out a final dividend during the year and is now in liquidation.




                                                                                      68
36.   FIXED ASSET INVESTMENTS


                                                                                       Issued Percentage
                                                                                        Share       Held
                                                                                      Capital

Principal Subsidiary Companies                                                              £
Holding and Services
*Apia Asset Management Limited:                                £1 Ordinary Shares           1       100
*Ashtenne Asset Management Limited:                           10p Ordinary Shares         100       100
*Ashtenne Holdings Limited:                                   20p Ordinary Shares    7,220,942      100
Industrial Funds Limited:                                    £1 A Ordinary Shares     250,000       100
                                                             £1 B Ordinary Shares     250,000       100
*Radial Distribution Asset Management Limited:                 £1 Ordinary Shares           1       100
Warner Estate Management Limited:                              £1 Ordinary Shares           2       100
*Warner Active Management No 2 Limited:                        £1 Ordinary Shares           1       100
*Warner Active Management No 4 Limited:                        £1 Ordinary Shares           1       100
*Warner Advisors (Jersey) Limited (Jersey):                    £1 Ordinary Shares           1       100
Warner Estate Asset Management Limited:                       10p Ordinary Shares    1,636,000      100
*Warner Estate (GLO) Limited (Jersey):                         £1 Ordinary Shares           1       100
Warner Estate Joint Ventures Limited:                          £1 Ordinary Shares           1       100
Warner Estate Property Management Limited:                    10p Ordinary Shares    3,987,000      100


Property Investment
JS Real Estate Limited:                                       25p Ordinary Shares   16,283,350      100
Lancaster Holdings Limited:                                    £1 Ordinary Shares         100       100
                                                               £1 Deferred Shares         100       100
Lancaster Investments Limited:                                          £1 Shares       1,000       100
Vere Street Investments Limited:                               £1 Ordinary Shares           2       100
Warner Estate Development (Folkestone) Limited:                £1 Ordinary Shares           1       100
Warner Estate Investments Limited:                             £1 Ordinary Shares           1       100
Warner Estate Property Limited:                                £1 Ordinary Shares           1       100


Other Investment
Cardiff and Provincial Properties Limited:                    25p Ordinary Shares     162,000       100
Warner Estate, Limited:                                        £1 Ordinary Shares           1       100
*Warner Estate (AIF) Limited (Jersey):                         £1 Ordinary Shares           1       100
                                                  £1 Redeemable Preference Shares   12,000,000      100




                                                                            69
Joint Ventures
Property Investment
*Agora Shopping Centres Limited:                                               £1 A Ordinary Shares      7,323,013            100
                                                                               £1 B Ordinary Shares      7,323,013               -
*Agora Max Limited:                                                            £1 A Ordinary Shares     25,538,535            100
                                                                               £1 B Ordinary Shares     25,538,535               -
*Apia Regional Office Fund (General Partner) Limited:                          £1 A Ordinary Shares         25,000               -
                                                                               £1 B Ordinary Shares         25,000            100
*Greater London Offices Limited:                                               £1 A Ordinary Shares        500,000            100
                                                                               £1 B Ordinary Shares        500,000               -
*Radial Distribution Limited:                                                  £1 A Ordinary Shares      8,345,419            100
                                                                               £1 B Ordinary Shares      8,345,419               -


There are no special rights or constraints attached to these shares.


Principal Other Investments
Investment in Shares
*Ashtenne Industrial (General Partner) Limited:                                £1 A Ordinary Shares             120              -
                                                                               £1 B Ordinary Shares              60           100
Bride Hall Group Limited:                                                        5p Ordinary Shares        250,000              25
*Stonemartin PLC (Listed):                                                       1p Ordinary Shares     22,370,069           12.52


Investment in Funds
*Apia Regional Office Fund Unit Trust (Jersey):                                              £1 Units 190,532,109            27.43
*Ashtenne Industrial Fund Unit Trust (Jersey):                                               £1 Units 358,695,267             6.52


* Held through a subsidiary company
All companies are incorporated in the UK and registered in England unless otherwise indicated.


The companies listed above are those subsidiary undertakings whose results or financial position, in the opinion of the Directors, principally affected the figures in the
Group’s financial statements. The Company has taken advantage of s231(5) and (6) Companies Act 1985 in not listing all of its subsidiary and joint venture undertakings.
All of the subsidiaries have been consolidated in the Group financial statements.




                                                                                        70

				
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