Helical
Annual Report 2000

Plain-text annual report

Helical Bar Report & Accounts 2000 PUBLIC LIMITED COMPANY Helical Bar plc Contents Corporate Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Chairman's Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Review of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Financial Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Officers and Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Directors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Consolidated Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Statement of Total Recognised Gains and Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Consolidated Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Ten Year Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Notice of Annual General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Financial Calendar Office development at 200 Hammersmith Road, London W6 Helical Bar plc Corporate Statement 1 Helical Bar plc is a property development and investment company. Our objective is to maximise growth in assets per share using a recurring stream of development and trading profits to build up the investment portfolio. Pre-tax profit £m 18.5 22.0 20.0 12.0 9.2 Ordinary dividend per share Pence 8.00 9.00 10.00 11.15 7.30 1996 1997 1998 1999 2000 1996 1997 1998 1999 2000 Diluted net asset value per share Pence 603 482 473 372 330 Increase in shareholders funds pre-dividend £m 45.2 38.2 35.3 17.6 5.1 1996 1997 1998 1999 2000 1996 1997 1998 1999 2000 Note: Special dividends of 100.0p and 2.0p were declared in respect of the periods ended 31st March 1999 and 31st March 1997 respectively. 2 Helical Bar plc Chairman’s Statement Review of the results The year to 31 March 2000 has seen several challenges to the property industry such as the perceived threats to the old order from new and exciting hi-tech industries, the increasing burden government is laying on property investors via differentiated taxation and increased stamp duty, an additional planning regime in London and investors’ growing dissatisfaction with quoted real estate companies. We adjust our strategies accordingly to anticipate changes so as to continue to provide the infrastructure in which new industries can prosper and grow while creating prime investments for our institutional partners. We are pleased that the foresight of our development and investment teams has continued to bear fruit, and sites and investment properties purchased in recent years have contributed to another good year with record pre-tax profits and substantial property revaluations. This performance is particularly pleasing coming after the reduction in net assets of almost 20% by the payment of the 100p special dividend last year. The main driving forces behind the current economic success of the country remain in London and the South East through the growth of the technology, media and telecommunications sector in the West End and Thames Valley and of financial and professional services in the City. Profits before tax for the year to 31 March 2000 were £22.0m, an increase of 10% over the previous year. Gross profits from our development programme contributed £19.3m (1999: £21.6m) to pre-tax profits and were mainly the result of a number of lettings of offices. The investment portfolio contributed £23.7m of net rental income, a substantial increase on the previous year’s £18.5m. Profits on sale of investment properties rose to £4.6m (1999: £0.4m) on net sales of £110.9m (1999: £15.4m). Net interest payable rose to £16.3m (1999: £12.5m) reflecting the higher levels of gearing and base rates during the year. Administration costs rose to £9.7m (1999: £6.9m). After a 27% tax charge (1999: 19%), profits remained steady at £16.0m (1999: £16.1m). Retained profits, after dividends of £3.2m (1999: £33.6m) were £12.7m (1999: retained loss of £18.7m after payment of a special dividend of £28.9m). Your Board is recommending a final dividend of 6.75p per share (1999: 6.00p) which, with the interim dividend of 4.40p (1999: 4.00p), makes a total of 11.15p (1999: 10.00p). This is an increase of 11% on the previous year. The total dividend of 11.15p per share is covered 5 times by profits after tax. A revaluation surplus of £30.4m (1999: £19.9m) on the investment portfolio helped net asset value per share rise by 30% to 620p (1999: 478p) on an undiluted basis and by 27% to 603p (1999: 473p) on a diluted basis. This figure takes no credit for any surplus of value in the trading and development stock. The out performance of the company in contrast to almost all other listed real estate companies has enabled it to reward shareholders through exceptional net asset value growth and substantial increases in dividends, together with special dividends. We are pleased to welcome Antony Beevor as a non-executive member of the Board. Antony, a Managing Director of S G Hambros, is a Deputy Chairman of the Takeover Panel and a non-executive Director of Croda International plc. We operate in an increasingly volatile world where a stop in the strong growth in the United States economy could impact unfavourably in the UK, particularly in London and the South East. Liquidity in these markets is not helped by ever- increasing transaction costs, particularly in any downturn. Net assets have doubled over the last three years after adding back the 100p special dividend paid last year. We have made an encouraging start to the new financial year. We are maintaining the size of our development programme and continue to increase our investment portfolio, reinvesting the cash flows from completed developments. John Southwell Chairman 16 June 2000 Helical Bar plc 3 Office development at 100 Wood Street, London EC1 4 Helical Bar plc Review of Operations Developments Offices It is our objective to provide a continuing flow of development profits from pre-let and speculative office, retail and industrial schemes in partnership with funding institutions. Whilst a small number of schemes are financed with bank funding and, therefore, remain on our balance sheet, the majority of our schemes are pre-sold or forward sold. This policy has a significant effect on our return on capital employed and has enabled us to create and sustain one of the largest development programmes in the country. Development programme - anticipated end values Office Retail Industrial Total £m £m £m £m Completed programme Let and sold 1993-2000 291 198 23 512 Current programme 31 March 2001 31 March 2002 280 120 30 80 31 March 2003 120+ 90+ 520 200 - 10 - 10 310 210 210+ 730 Blenheim House, Leeds, a 32,000 sq.ft. development completed in 1995, was sold to Britannia Invest Holland IIBV and our site at Welshback, Bristol was sold to Fuller Smith Turner plc for development as a hotel. These two properties were the last remaining from the early part of the current development cycle. Looking forward, we have commenced work at our 60,000 sq.ft. development at One Plough Place, London EC4, funded with Henderson Investors. We have also commenced work on two buildings at the former West London Hospital in Hammersmith. No. 200 Hammersmith Road, comprising 65,000 sq.ft., has been forward sold to a limited partnership owned by Mercury Asset Management and HQ Global Offices and will be run as a serviced office facility. The second,The Saunders Building, will utilise the existing façade of the original hospital and comprises some 14,000 sq.ft. Both buildings will be complete by November 2001. We are shortly to start construction at our 140,000 sq.ft. development at The Meadows, Camberley funded with Scottish Widows as a joint venture with Morgan Grenfell Property Unit Trust. We have started a refurbishment of Rex House, 10 Regent Street, London SW1 which will be completed later this year. Future office developments include The Waterfront Business Park, Fleet, where 70,000 sq.ft. of offices are to be built as an extension to the existing park as well as other deals in the pipeline. At Bunhill Row, London EC1, next to our development at 25 Chiswell Street, we are planning to build 100,000 sq.ft. of offices. At the end of the year the company completed its 150,000 sq.ft. development at 100 Wood Street, London EC2 forward funded with Despa, the German investment fund. Designed by Foster and Partners and completed in time to take advantage of the transitional rules on rates relief, the building immediately attracted attention from a number of potential tenants. announce that four floors comprising 56,500 sq.ft. had been let to The Chase Manhattan Bank. We are confident that the remaining space will be let this year and that we shall then be able to take the profits which this development will have generated. In April we were able to Work continued on our 260,000 sq.ft. development at 25 Chiswell Street, London EC1, also funded with Despa. This development, pre-let to City solicitors Slaughter and May, is our largest office development to date and is due for completion by October 2000. Our 35,000 sq.ft. development at 10 Mansion House Place, London EC4, funded with bank finance, was completed and sold during the year to British Arab Commercial Bank for their own occupation. A further 5,500 sq.ft. of space at 6 St Andrew Street, London EC4 was let to solicitors Speechly Bircham leaving one floor of 4,800 sq.ft. remaining This 45,000 sq.ft. development, forward sold to Shell Pension Fund, was completed in September 1999. Our two buildings at Windsor Dials, Windsor (66,000 sq.ft.) were completed during the year. Funded by Strathclyde Pension Fund, the buildings were let to FM Global and The Galileo Company. Also completed during the year was No. 1 Farnham Road, Guildford, a 28,000 sq.ft. development funded with Stargas Nominees, the British Gas Pension Fund, and let on completion to MWB Business Exchange. Helical Bar plc 5 Office development at 25 Chiswell Street, London EC1 Office development at The Meadows, Camberley 6 Helical Bar plc Review of Operations Retail Helical Retail, our joint venture with Oswin Developments, continues to be successful. In the six years since Jim Kelly and his team joined us, we have developed over 1m sq.ft. of retail space with an end value of almost £200m. In the year Helical Retail has completed a number of developments whilst taking options, purchasing sites and negotiating positions to enable it to continue its programme. In October it completed its 230,000 sq.ft. in-town redevelopment of Middlesbrough city centre, known as Captain Cook Square. This unique “New Orleans” style open shopping centre was funded by Norwich Union. At Glasgow, the 80,000 sq.ft. redevelopment of the George Hotel, pre-let to Virgin, Burtons and JD Sports and funded by Hermes was completed. At Horns Road, Ilford, 44,000 sq.ft. of retail space was completed, pre-let to Toys R Us and Currys and pre-sold to Merseyside Superannuation Fund. In Bolton a 5,400 sq.ft. retail unit was completed, sold to Legal and General and let to Sofa Workshop. Currently, the retail team are completing the land assembly of a site in Bolton, next to the Bolton Gate Retail Park completed in 1998, for a 122,000 sq.ft. unit for B&Q pre-funded with HSBC. This retail unit, the largest B&Q in the UK, is due for completion in the summer of 2001. Solihull, a 12,500 sq.ft. retail unit is to be built for Daewoo. This unit, funded by Nestlé Pension Fund, is also due for completion in summer 2001. In Looking forward, a 314,000 sq.ft. redevelopment of the city centre of Ipswich, the “Mint Quarter”, is planned as a joint venture with NCP and plans for a 53,000 sq.ft. redevelopment of Accrington town centre are progressing. A 10,000 sq.ft. second phase is planned alongside Captain Cook Square in Middlesbrough. Negotiations continue with potential tenants for the redevelopment of Dorchester town centre. Options have been obtained on sites in Canterbury, Wigan, Great Yarmouth and Cheltenham. Retail development at Captain Cook Square, Middlesbrough Retail development at the George Hotel, Glasgow Helical Bar plc 7 Retail development at Horns Road, Ilford Retail development at Bolton Gate Retail Park, Bolton 8 Helical Bar plc Review of Operations Investment portfolio Our investment philosophy is based on four guiding principles. Rather than being single sector specialists, Helical elects to rotate between property types so that the portfolio remains orientated towards growth stock. Gearing is used on a tactical basis, being raised to accentuate performance when property returns are judged to materially outperform the cost of debt. The average number of properties remains small to facilitate fast repositioning of the portfolio and encouraging management focus on key assets. Finally, there is a preference for multi-let stock where value can be added through refurbishment and lease restructuring. Over the last three years the office exposure has been raised from 52% to 70% and is now almost exclusively within the South East with the bias having moved west away from the City. The shopping sector component has been sold in light of increasing competition in the high street with retail exposure down to 7%, principally in two retail parks. All the major assets have been acquired from 1997 onwards with the exception of our main industrial properties at Aycliffe and Peterlee which provide useful cash flow to cross-subsidise sites held prior to institutional funding and refurbishment projects. £236m of investment properties were held throughout the last financial year increasing in value by 9.1% and driven by an office performance showing 15.2% growth. £160m of purchases were made and valued at the year end at 9.5% above headline purchase prices but, given the high level of transaction costs due to successive rises in stamp duty, this reduced to 4.6% above gross purchase costs. Historically, Helical’s purchases have been performance dilutive in their first year but the key driver of investment returns over the following two years. £111m of sales were made of which £38m were developments held as investments (Mansion House Place and St Andrew Street). The remainder were sold at 5.4% above March 1999 valuations with the principal transactions being at Aldermary House, EC4 (£2.5m surplus); Cannon Park Shopping Centre, Coventry (£0.7m surplus); Allders Warehouse, Croydon (£0.5m surplus); and The Pavilion,Thames Ditton (£0.5m surplus). The schedule of investment properties on page 10 shows that the underlying performance has been driven principally by high levels of rental growth. Notwithstanding this, average passing rents of the office portfolio at £13 - £32 p.s.f. remain low by Central London standards. The portfolio is highly reversionary with the running yield of 7.1% anticipated to rise to 8.1% within a year and ultimately to 9.1% based on current rental values. These yields exclude £33.6m of vacant investment stock currently undergoing refurbishment. In the short term, whilst supply of accommodation remains tight in our favoured markets with demand strong and supply of new space restricted, further rental growth seems likely. However, we remain vigilant to any demand shocks, particularly those that could emanate from high levels of volatility being experienced by the financial markets. Book Value £m Passing Square Average net rents footage rent Void Space £m 000’s £ per sq. ft. 000’s sq. ft. Office 260.5 16.5 Out of town retail Industrial Other 35.8 75.3 19.8 2.3 7.0 1.4 954 333 2,980 186 17.3 6.9 2.3 7.5 89 - 242 - Total income producing 391.4 27.2 4,408 Investment properties 33.6 - 235 in course of redevelopment Land and sites 16.6 441.6 Investment property at CBXII, Milton Keynes Helical Bar plc Investment Portfolio 9 Property values by sector 0 5 10 15 20 25 30 0 5 10 15 20 25 30 2000 1999 City offices 14% West End offices 30% 19% Other Central London offices 15% South East offices 11% Out of town retail 7% Industrial 19% 5% 12% 8% 26% 26% Other 4% 4% percentage 2000 percentage Valuation increases by sector -5 0 5 10 15 20 25 30 City offices 12% West End offices 7% Other Central London offices 27% South East offices Out of town retail 8% 10% Industrial -3% Other Total 2% 7% percentage City offices West End offices Rental income - running yields and ERV's 0 2 4 5.5% 6 8 10 12 Other Central London offices 4.8% South East offices Out of town retail 6.9% Industrial Other Total Key: Running Yield ERV's 8.3% 7.1% 8.6% 9.5% 7.8% 8.9% 8.3% 9.5% 11.7% 7.9% 8.5% 7.1% 9.2% percentage 10 Helical Bar plc Review of Operations t n e r r u C e g a r e v A g n i s s a P . a . p % n o i t i s i u q c A e c n i S h t w o r G r a e Y . f . s . p t n e R l a t i p a C l a t n e R d e r i u q c A s t n e m m o C s e c i f f o y t i C s s e r d d A . 0 0 8 2 £ % 0 6 1 . % 4 8 1 . 7 9 9 1 l i a t e r e m i r p s u p l 8 9 9 1 n i d e h s i b r u f e r s e c i f f o t e l - i t l u m f o . t f . q s 0 0 0 0 7 , 2 C E n o d n o L , e d i s p a e h C , e s u o H e d i s p a e h C m 0 1 £ f o s s e c x e n i e u l a v h t i w s e i t r e p o r p - o i l o f t r o P t n e m t s e v n I . 0 5 1 3 £ % 9 8 . % 4 3 1 . 9 9 9 1 t t e n r u B o e L o t t e l i l y n a m d n a 4 9 9 1 n i t l i u b g n d i l i u b e c i f f o i p h s g a l f . t f . q s 0 0 0 5 7 , , s s o r C n o t p m o r B , e u n e v A e n a o S l 0 6 s e c i f f o d n E t s e W . 0 0 2 3 £ % 1 7 1 . % 4 4 1 . - . 0 5 3 2 £ - % 3 8 1 . - % 1 4 1 . . 0 0 0 2 £ % 2 1 2 . % 7 1 2 . . 0 0 3 1 £ . 0 5 4 2 £ - . 0 0 3 2 £ . 0 0 6 1 £ % 6 5 4 . % 0 6 1 . - % 0 4 1 . % 5 8 2 . . 0 0 9 1 £ % 7 5 . - % 5 2 4 . % 0 5 2 . % 6 3 3 . - - - % 9 4 4 . % 3 7 1 . . 0 5 6 £ . 0 0 0 1 £ % 0 4 . % 2 5 2 . % 3 4 . % 4 7 3 . 8 9 9 1 0 0 0 2 8 9 9 1 8 9 9 1 8 9 9 1 0 0 0 2 9 9 9 1 8 9 9 1 0 0 0 2 0 0 0 2 8 9 9 1 7 9 9 1 9 9 9 1 e m m a r g o r p t n e m h s i b r u f e r g n i l l o r o t j t c e b u s g n d i l i u b e c i f f o . t f . q s 0 0 0 0 3 , 2 C W n o d n o L y, a w s g n K i 1 7 r o t n e m h s i b r u f e r r o f l d e u d e h c s g n d i l i u b e c i f f o t e l - 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h t r o N , e e l r e t e P & e f f i l c y A l a i r t s u d n I . e s a h c r u p e c n i s h t w o r g l a u t c a e h t s i t i t u b d e s i l a u n n a n e e b t o n s a h e t a r h t w o r g e h t r, a e y e n o n a h t s s e l r o f l d e h n e e b e v a h s e i t r e p o r p e r e h W : e t o N Helical Bar plc 11 Investment property at 60 Sloane Avenue, London SW3 12 Helical Bar plc Financial Review One key financial risk to Helical is adverse movements in interest rates. It has insured against such interest rate movements through the use of a number of interest rate hedging instruments. Borrowings of £160m are capped until 2004 and £111m until 2006 at interest rates between 6.00% and 7.50%. A further £80m is capped until January 2001 at rates between 9.05% and 9.15%. Of current borrowings £105m is fixed at rates of between 5.22% and 9.05%. Using interest rate floors the company is able to benefit from the reduction of rates down to 4.73% and 4.83% on £160m until January 2006. The success of the company’s interest rate hedging can be seen from the valuation of financial assets and liabilities under FRS13. This values these financial instruments on a fair value basis, and at 31 March 2000 an adjustment would increase net assets by £2.4m (1999: decrease by £4.8m). Profits Dividends Gross profits for the year were £43.5m. These compare with gross profits for the year to 31 March 1999 of £39.0m and include net rental income after property overheads of £23.7m (1999: £18.5m) and trading profits of £0.4m (1999: £0.1m). Our development programme contributed £19.3m (1999: £21.6m). Administrative expenses include a £0.6m (1999: nil) write off of goodwill following the sale of our investment property in Croydon and a £0.7m (1999: nil) write off of the deficit in the company’s Employee Share Option Scheme resulting from the waiver of its right to receive dividends. The surplus on book value on sale of investment properties was £4.6m (1999: £0.4m). Interest paid on borrowings, net of interest received on cash balances, increased from £12.5m to £16.3m. This was after capitalisation of £2.7m of interest (1999: £2.1m). Pre-tax profits rose by 10% from £20.0m to £22.0m. The higher tax charge of 27% (1999: 19%) includes a £1.5m provision for deferred tax on a property sold in the current year. After a decreased minority interest of £0.1m (1999: £1.2m), profits before dividends increased to £15.9m (1999: £15.0m). Earnings per share on a diluted basis rose from 50.7p to 53.7p per share. The Board is recommending to members at the Annual General Meeting on 19 July 2000 a final dividend of 6.75p per share (1999: 6.00p) to be paid on 21 July 2000 which, with the interim dividend of 4.40p, makes a total of 11.15p. This is an increase of 11.5% on the previous period’s dividend of 10.00p. by profits after tax. It is covered 5 times Net assets The increase in value of investment properties of £30.4m (1999: £19.9m) and retained profits of £12.7m led to a rise in Helical’s net assets to £184.9m (1999: £142.1m). Net assets per share of 620p compare with 478p in 1999. Diluted net assets per share rose from 473p to 603p and, after taking account of the value ascribed to financial instruments under FRS 13 and unprovided deferred tax, rose from 422p to 564p, a 34% increase. Borrowings and financial risk During the year Helical increased the levels of bank borrowings to fund the expansion of the investment portfolio. At 31 March 2000 its borrowings amounted to £260.1m (1999: £218.8m). The company seeks to manage financial risk by ensuring that there is sufficient financial liquidity to meet foreseeable needs and to invest surplus cash safely and profitably. At the year end Helical had over £120m of undrawn bank facilities and cash of £17.0m (1999: £44.3m). Helical Bar plc Officers and Advisors 13 Company Secretary Tim Murphy ACA Aged 40 Appointed March 1994 Registered office 11-15 Farm Street, London W1X 8NP Telephone 020 7629 0113 Fax 020 7408 1666 Investor relations Email address: info@helical.co.uk Web-site address: www.helical.co.uk Public relations: Financial Dynamics Executive directors Non-executive directors Managing Director Michael Slade BSC (Est.Man) FRICS FSVA, Aged 53 Appointed Managing Director in 1986. Finance Director Nigel McNair Scott MA FCA FCT, Aged 54 Appointed Finance Director in 1987, Nigel McNair Scott is the non-executive Chairman of Avocet Mining PLC and a Director of Govett Strategic Investment Trust. Development Director Gerald Kaye BSC (Est.Man) FRICS, Aged 42 Appointed Development Director in 1994. Investment Director Michael Brown BSC (EST.MAN) ARICS, Aged 39 Appointed Investment Director in 1998. * Member of Audit and Remuneration Committees † Member of Nominations and Appointments Committee Chairman John Southwell MA (Senior non-executive), Aged 67*† Appointed Chairman in 1987, John Southwell is a consultant with Credit Lyonnais Securities Europe (UK), Chairman of Lochain Patrick Holdings Ltd and Director of James Cropper PLC. Ian Butler CBE MA FCA, Aged 75*† Appointed non-executive Director in 1993, Ian Butler is a former Director of Cookson Group plc and a former member of the Cadbury Committee. Giles Weaver FCA, Aged 54*† Appointed non-executive Director in 1993, Giles Weaver is the Managing Director of Murray Johnstone Ltd, Director of James Finlay PLC and Charter European Trust PLC Antony Beevor BA, Aged 60*† Appointed non-executive Director on 11 April 2000, Antony Beevor is a Managing Director of S G Hambros, a Deputy Chairman of the Takeover Panel and a non-executive Director of Croda International plc Advisors Registrars IRG plc Bourne House 34 Beckenham Road Beckenham Kent BR3 4TU Joint stockbrokers Cazenove & Co. 12 Tokenhouse Yard London EC2R 7AN Credit Lyonnais Securities Europe (UK) Broadwalk House 5 Appold Street London EC2A 2DA Merchant bankers Lazard Bros & Co Ltd 21 Moorfields London EC2P 2HT Solicitors Ashurst Morris Crisp Mishcon de Reya Olswang Titmuss Sainer Dechert Norton Rose Bankers Barclays Bank PLC Credit Lyonnais HypoVereinsbank Bank National Westminster Bank Plc The Royal Bank of Scotland plc DePfa Bank AG Auditors Grant Thornton Grant Thornton House Melton Street Euston Square London NW1 2EP 14 Helical Bar plc Directors’ Report The directors present their report and financial statements for the year ended 31 March 2000. Principal activities The principal activity of the company is that of a holding company and the principal activities of the subsidiaries are property investment, dealing and development. A full review of these activities and the group’s future prospects are given in the Review of Operations on pages 4 to 11. Trading results The results for the year are set out on page 20. The profit on ordinary activities before taxation amounts to £22,020,000 (1999: £20,044,000). Share capital The detailed movements in share capital are set out in note 22 to these financial statements. At 31 March 2000 there were 29,611,697 ordinary 5p shares in issue. Dividends A final dividend of 6.75p (1999: 6.00p) per share is recommended for approval at the Annual General Meeting on 19 July 2000. The total ordinary dividends of 11.15p (1999: 10.00p) per share amount to £3,223,000 (1999: £2,434,000 plus special dividend of £28,904,000). Donations Donations to charities amounted to £9,403 (1999: £6,110). A contribution of £10,000 (1999: £10,000) was made to the Conservative Party. Creditor payment policy The group's policy is to settle all agreed liabilities within the terms established with suppliers. At 31 March 2000 there were 21 days’ (1999: 41 days) purchases outstanding in respect of the group's creditors. Auditors Grant Thornton offer themselves for reappointment as auditors in accordance with Section 385 of the Companies Act 1985. Substantial shareholdings At 16 June 2000 the shareholders listed in Table A below had notified the company of a disclosable interest of 3% or more in the nominal value of the ordinary share capital of the company. Directors and their interests The directors who were in office during the year and their interests, all of which were beneficial, in the ordinary shares are listed in Table B below and note 22. The Helical Bar Employees’ Share Ownership Plan Trust, referred to in note 13 owned 708,000 ordinary shares at 31 March 2000 (1999: 708,000). On 16 June 1999 and 7 April 2000, shares acquired by the Helical Bar Profit Sharing Scheme were allocated to directors and staff. The number of shares allocated to directors is disclosed in note 3. Shares purchased by directors since 1 April 1999 are listed in Table C below. There have been no other changes in the above directors’ interests in the period from 31 March 2000 to 16 June 2000. Table A - Substantial shareholdings No. of ordinary shares 3,219,953 2,250,000 1,672,546 1,436,274 1,306,847 1,155,960 Schroder Investment Management Ltd T R Property Investment Trust Fidelity Investments Scudder Threadneedle Hermes Investment Management Jupiter Asset Management The interests of Michael Slade (10.2%) are noted below. Table B - Directors’ interests Ordinary 5p shares J. P. Southwell M. E. Slade N. G. McNair Scott I. G. Butler C.G.H.Weaver G. A. Kaye P. M. Brown Total directors’ interests Percentage of issued share capital 31.03.00 33,870 3,012,604 624,284 12,987 18,000 230,514 117,584 4,049,843 13.7% % 10.87 7.60 5.65 4.85 4.41 3.90 01.04.99 33,870 3,011,147 622,827 12,987 18,000 186,057 57,127 3,942,015 13.3% Table C - Directors’ share purchases Ordinary 5p shares 15 September 1999 3 March 2000 21 March 2000 30 March 2000 7 June 2000 8 June 2000 G. A. Kaye - 25,000 16,000 2,000 14,167 27,200 P. M. Brown 25,000 25,000 9,000 - 10,833 20,800 Helical Bar plc Directors’ Report 15 Report on remuneration The membership of the remuneration committee is as follows: John Southwell (Chairman) Ian Butler Giles Weaver Anthony Beevor (appointed 11 April 2000) None of the committee has any personal financial interest in the matters to be decided (other than as shareholders), potential conflicts of interest arising from cross-directorships nor any day-to-day involvement in running the business. The committee consults the Managing Director and Finance Director about its proposals and has access to professional advice from inside and outside the company. Policy on executive directors’ remuneration Executive remuneration packages are designed to attract, motivate and retain directors of the calibre necessary to maintain the group’s position as a market leader and to reward them for enhancing shareholder value and return. The performance measurement of the executive directors and the determination of their annual remuneration package is undertaken by the committee which consists solely of non-executive directors. There are three main elements of their remuneration package: i. basic annual salary and benefits in kind; ii. annual bonus payments; iii. share option incentives. Basic annual salary and benefits in kind Basic annual salaries for executive directors are reviewed having regard to individual performance and market practice. Executive directors’ basic salaries were last reviewed in September 1999. Benefits in kind provided to executive directors include the provision of a company car and health insurance. Bonus schemes In June 1997 the committee reached agreement with the executive directors to establish a new bonus scheme following the cessation of the old scheme. This new scheme operated from 1 April 1997 and will continue until 31 March 2002. A bonus will be payable under this scheme only if there is an increase in the net asset value of the company and that increase is greater than that achieved by the upper quartile of the Investment Property Databank Index for capital growth of all properties, an ungeared benchmark. If achieved the bonus is payable in cash and is calculated in bands, the amount of bonus increasing with the level of outperformance. Among other constraints, the committee may restrict the bonus if payment would affect the financial or trading position of the group. The executive directors in this bonus scheme for the period were Michael Slade, Nigel McNair Scott, Gerald Kaye and Michael Brown. Additional bonuses were awarded by the committee in recognition of the performances of the development director, Gerald Kaye and the investment director, Michael Brown. Share options The company operated three share option schemes during the year. The Senior Executive 1988 Share Option Scheme ceased to be able to grant options over new shares on 7 June 1998. The scheme can grant options, until 7 June 2001, in respect of shares held by the Helical Bar Employees Share Ownership Plan Trust. Share options granted in respect of this scheme are included in note 22. The Helical Bar 1999 Share Option Scheme received shareholder approval on 16 February 1999. Under this scheme the aggregate market value of shares issued or issuable to an individual under this and other option schemes may not exceed eight times his annual earnings. Share options granted in respect of this scheme are included in note 22. The Helical Bar 1999 Approved Share Option Scheme also received shareholder approval on 16 February 1999 and Inland Revenue approval in March 1999. Under this scheme options up to a maximum value of £30,000 per individual may be granted and options granted to directors in respect of this scheme are included in note 22. The performance criteria of the two 1999 schemes requires total shareholder return over a set period to exceed a certain percentile of the aggregate performance of companies in the Property Sector Index of the FTSE All Share Index. For the approved scheme the relevant period is three years and the 50th percentile. For the unapproved scheme the relevant period is five years and 75th percentile. The Committee considers that these share options, coupled with the associated performance measures, will continue to provide the most effective method of longer term incentivisation for the key executives of the company. 16 Helical Bar plc Directors’ Report Helical Bar profit sharing scheme The Helical Bar Profit Sharing Scheme is open to all employees and has operated since 1997. Under the terms of the scheme the Trustees purchase shares in the company and allocate them to all employees in accordance with the rules of the scheme. Allocations of shares were made to all directors and employees on 16 June 1999 and 7 April 2000. Details of directors’ remuneration-share options This report should be read in conjunction with notes 3 and 22 to the financial statements which also form part of this report. Full details of all elements of the remuneration package of each director are given in note 3 to the financial statements. Details of directors’ share interests and share options are given in note 22 to the financial statements. Service contracts The service contracts of each of the executive directors noted in table B have a one year notice period. Pension contributions The company makes annual contributions into a Small Self Administered Pension Scheme on behalf of Michael Slade and Nigel McNair Scott. Re-election Michael Slade and Nigel McNair Scott are due to retire by rotation and offer themselves for re-election. Anthony Beevor, who was appointed on 11 April 2000, seeks formal re-election for the first time. Non executive directors The remuneration of the non-executive directors is determined by the Board within the limits set out in the Articles of Association and was last increased in April 2000. Non-executive directors do not participate in any of the company’s share option schemes. Non-executive directors do not have a contract of service. On behalf of the Board J. P. Southwell Chairman 16 June 2000 Helical Bar plc Directors’ Report 17 Corporate governance The company is committed to applying the highest principles of corporate governance commensurate with its size. The company has complied throughout the year with the Code provisions set out in Section 1 of the Combined Code. In complying with Code provision D.2.1 on internal control, the company has adopted the transitional approach of reporting on internal financial control allowed by the Stock Exchange in its letter of 27 September 1999. Application of principles The company has applied the principles of good governance contained in the Combined Code appended to the Listing Rules of the Financial Services Authority. Directors The company supports the concept of an effective board leading and controlling the company. The Board is responsible for approving company policy and strategy. It meets three monthly and has a schedule of matters specifically reserved to it for decision. Management supply the Board with appropriate and timely information and the directors are free to seek any further information they consider necessary. All directors have access to advice from the company secretary and independent professionals at the company’s expense. Training is available for new directors and other directors as necessary. The Board consists of four executive directors who hold the key operational positions in the company and four non-executive directors, who bring a breadth of experience and knowledge, of whom all are independent of management and any business or other relationship which could interfere with the exercise of their independent judgement. This provides a balance whereby the Board’s decision making cannot be dominated by an individual or small group. The Chairman of the Board is John Southwell and the company’s business is run by Michael Slade, the Managing Director. The Board has named John Southwell as the senior independent non-executive director. The Board members are described on page 13. All directors are subject to re-election every three years and, on appointment, at the first AGM after appointment. The Nominations and Appointments Committee meets as required to select and recommend to the Board suitable candidates for both executive and non- executive appointments to the Board. It comprises John Southwell, Chairman of the Board (Chairman), and the three other non-executive directors, Ian Butler, Giles Weaver and Antony Beevor. Directors’ remuneration The company recognises that directors’ remuneration is of legitimate concern to the shareholders and is committed to following current best practice. The policy of the company is to provide sufficient levels of remuneration to attract, retain and motivate executive directors.The Remuneration Committee, which carries out the policy on behalf of the Board, comprises John Southwell (Chairman), Ian Butler, Giles Weaver and Antony Beevor, all of whom are independent non-executive directors. It meets at least twice a year. As well as considering conditions in the group as a whole, the Committee takes into account the position of the company relative to other companies and is aware of what these companies are paying, though comparisons are treated with caution to avoid an upward ratchet in remuneration. The Committee consults the Managing Director and has access to independent professional advice. The remuneration packages of individual directors are structured so that the performance related elements form a significant proportion of the total and are designed to align their interests with those of the shareholders. Share options are designed so that they recognise the long term growth of the company. No director has a service contract of more than one year. The remuneration of non-executive directors is determined by a sub-committee of the Board comprising the Managing Director and the Finance Director. It sets out the The Board's report on remuneration is on pages 15 and 16. company's policy in detail and gives full details of all elements in the remuneration package of each individual director. Relations with shareholders The company values the views of its shareholders and recognises their interest in the company’s strategy and performance, Board membership and quality of management. regular meetings with its institutional shareholders to discuss objectives. It therefore holds The AGM is used to communicate with investors and they are encouraged to participate. The Chairmen of the Audit, Remuneration and Nomination Committees are available to answer questions. Separate resolutions are proposed on each issue so that they can be given proper consideration and there is a resolution to approve the annual report and accounts. The company counts all proxy votes and will indicate the level of proxies lodged on each resolution, after it has been dealt with by a show of hands. Accountability and audit The Board represents a balanced and understandable assessment of the company’s position and prospects in all interim and price-sensitive reports and reports to regulators as well as in the information required to be presented by statutory requirements. The Audit Committee comprises Ian Butler, Giles Weaver and Antony Beevor, all of whom are independent non-executive directors, and John Southwell, who is Chairman of the Board and a non-executive director. The terms of reference of the Committee include keeping under review the scope and results of the external audit and its cost effectiveness. The Committee reviews the independence and objectivity of the external auditors. 18 Helical Bar plc Directors’ Report This includes reviewing the nature and extent of non audit services supplied by the external auditors to the company, seeking to balance objectivity and value for money.The responsibilities of the directors as regards the accounts are described below, and that of the auditors on page 19. A statement on going concern is also below. Internal control The Board is responsible for maintaining a sound system of internal control to safeguard shareholders’ investment and the company’s assets. The company has adopted the transitional approach permitted by the Stock Exchange in its letter to listed companies of 27 September 1999 for accounting periods ending prior to 23 December 2000 in respect of the application of Code principle D.2. The Board has reviewed its risk management and identified areas where procedures need to be changed or installed. The company has in place the procedures necessary to implement the guidance, “Internal Control: Guidance for Directors on the Combined Code”. The Board will undertake a full risk and control assessment before reporting on the year ending 31 March 2001. The Board keeps under review whether an internal audit function would add value to the company. The directors are responsible for the group’s system of internal financial control. The system of internal financial control is designed to provide reasonable, but not absolute, assurance against material misstatement or loss. The key features of the group’s system of internal financial control are as follows: - clearly defined organisational responsibilities and limits of authority; - financial controls and review procedures; - financial information systems including cash flow, profit and capital expenditure forecasts and; - an Audit Committee which meets with the Auditors at least twice a year and deals with any significant internal financial control matter. Going concern After making enquiries, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. Year 2000 compliance The company experienced no problems arising out of Year 2000 compliance issues and has received no indication of problems arising at any of its developments or investment properties nor has it received notification of any problems at its major customers, suppliers or trading partners. Directors’ responsibilities for the financial statements Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing those financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and estimates that are reasonable and prudent and; - state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements. The directors are responsible for maintaining proper accounting records, for safeguarding the assets of the group and for taking reasonable steps for the prevention and detection of fraud and other irregularities. Annual General Meeting The Annual General Meeting of the company will be held on 19 July 2000 at 11.30 a.m. at The Westbury, Conduit Street at New Bond Street, London W1A 4UH. There are 4 resolutions concerning special business. The first converts the authorised but unissued convertible cumulative redeemable preference shares into ordinary shares. The second gives your Board the authority for a further five years to allot 9,870,560 shares (one third of the existing issued share capital as at the date hereof). The third gives your Board the power for a further year to issue shares pursuant to a rights issue and a modest number (approximately 5 per cent of the existing issued share capital as at the date hereof) for cash other than to existing shareholders. The fourth extends, for a further year, the authority given at the Annual General Meeting last year for the company to buy in, for cancellation, its ordinary share capital and increases that authority to 14.95 per cent. There have been no instances of the company purchasing its own shares since the last Annual General Meeting. By Order of the Board T. J. Murphy Secretary 16 June 2000 Helical Bar plc Auditor’s Report 19 We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. In Opinion In our opinion the financial statements give a true and fair view of the state of the affairs of the company and the group as at 31 March 2000 and of the profit of the group for the year then ended and have been properly prepared in accordance with the Companies Act 1985. To the members of Helical Bar plc We have audited the financial statements on pages 20 to 41 which have been prepared under the accounting policies set out on pages 24 & 25. Respective responsibilities of directors and auditors The directors are responsible for preparing the Annual Report, including as described on page 18, the financial statements. Our responsibilities, as independent auditors, are established in the United Kingdom by statute, the Auditing Practices Board, the Listing Rules of the Financial Services Authority and by our profession’s ethical guidance. We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act. We also report to you if, in our opinion, the directors’ report is not consistent with the financial statements, if the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law on the Listing Rules regarding directors’ remuneration and transactions with the group is not disclosed. We review whether the statement on page 18 reflects the company’s compliance with those provisions of the Combined Code specified for our review by the Financial Services Authority, and we report if it does not. We are not required to consider whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the group’s corporate governance procedures or its risk and control procedures. We read the other information contained in the Annual Report, including the corporate governance statement, and consider whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Basis of opinion We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the circumstances, consistently applied and adequately disclosed. Grant Thornton Registered Auditors Chartered Accountants London 16 June 2000 20 Helical Bar plc Consolidated Profit & Loss Account Helical Bar plc and subsidiary undertakings for the year ended 31 March 2000 Note Year ended 31 March 2000 £000 Year ended 31 March 1999 £000 149,922 (106,440) 121,244 (82,240) 43,482 (9,669) 33,813 4,555 38,368 (16,348) 22,020 (6,032) 15,988 (77) 15,911 (3,223) 39,004 (6,860) 32,144 415 32,559 (12,515) 20,044 (3,899) 16,145 (1,175) 14,970 (33,631) 12,688 (18,661) 1,829 10,859 55.0p 53.7p (10,302) (8,359) 66.7p 50.7p Turnover Cost of sales Gross profit Administrative expenses Operating profit Profit on sale of investment properties Profit on ordinary activities before interest Net interest payable and similar charges Profit on ordinary activities before taxation Taxation on profit on ordinary activities Profit on ordinary activities after taxation Equity minority interests Profit for the year Dividends paid and proposed including non-equity Retained profit/(loss) for the year By company By subsidiaries Earnings per share Diluted earnings per share 2 2 3 4 5 6 7 23 8 9 9 The notes on pages 24 to 41 form part of these financial statements. Helical Bar plc Balance Sheets 21 Helical Bar plc and subsidiary undertakings as at 31 March 2000 Group Company Note 31 March 2000 £000 31 March 1999 £000 31 March 2000 £000 31 March 1999 £000 10 12 13 14 15 16 17 683 420,354 3,656 424,693 525 22,020 54,786 5,236 16,991 99,558 576 333,372 4,359 338,307 525 35,054 40,148 - 44,310 120,037 - 770 5,908 6,678 - 48 104,393 2,088 9,076 115,605 - 896 6,545 7,441 - 31 121,491 - 31,297 152,819 18 (80,515) (128,662) (8,033) (47,896) Fixed assets Intangible assets Tangible assets Investments Current assets Fixed assets for resale Stock and long term contracts Debtors Investments Cash at bank and in hand Creditors: amounts falling due within one year Net current assets/(liabilities) 19,043 (8,625) 107,572 104,923 19 21 22 23 23 23 23 23 Total assets less current liabilities Creditors: amounts falling due after more than one year Provisions for liabilities and charges Capital and reserves Called-up share capital Share premium account Revaluation reserve Capital redemption reserve Other reserves Profit and loss account Shareholders’ funds Equity minority interests Shareholders’ funds Equity shareholders’ funds Non-equity shareholders’ funds 443,736 329,682 114,250 112,364 (257,384) (187,576) (19,935) (19,858) (1,500) 184,852 1,481 34,502 95,701 7,101 291 44,452 183,528 1,324 184,852 183,528 - 183,528 - 142,106 1,495 34,508 78,948 7,081 291 19,201 141,524 582 142,106 141,510 14 141,524 - - 94,315 92,506 1,481 34,502 - 7,101 1,987 49,244 94,315 - 94,315 94,315 - 94,315 1,495 34,508 - 7,081 1,987 47,435 92,506 - 92,506 92,492 14 92,506 The financial statements were approved by the Board of Directors on 16 June 2000. M. E. Slade, N. G. McNair Scott – Directors The notes on pages 24 to 41 form part of these financial statements. 22 Helical Bar plc Statement of Total Recognised Gains and Losses Helical Bar plc and subsidiary undertakings for the year ended 31 March 2000 Statement of total recognised gains and losses Profit for the year after taxation Minority interest Surplus on revaluation of investment properties Minority interest in revaluation surplus Total recognised gains and losses relating to the year Notes on historical cost profits and losses Reported profit on ordinary activities before taxation Realisation of property revaluation gains of previous years Historical cost profit on ordinary activities before taxation Year ended 31 March 2000 £000 Year ended 31 March 1999 £000 15,988 (77) 30,404 (1,068) 45,247 2000 £000 22,020 12,583 34,603 16,145 (1,175) 19,850 - 34,820 1999 £000 20,044 3,193 23,237 Historical cost profit/(loss) for the year retained 25,271 (15,468) 2000 £000 15,911 (3,223) 12,688 30,404 (1,068) (20) - 42,004 141,524 183,528 1999 £000 14,970 (33,631) (18,661) 19,850 - 1,513 (160) 2,542 138,982 141,524 Reconciliation of movements in shareholders' funds Profit for the year Dividends paid and proposed including non-equity Revaluation of investment property Minority interest in revaluation surplus (Redemption)/issue of shares Expenses of share issue Net addition to shareholders' funds Opening shareholders' funds Closing shareholders' funds The notes on pages 24 to 41 form part of these financial statements. Helical Bar plc Consolidated Cash Flow Statement 23 Helical Bar plc and subsidiary undertakings for the year ended 31 March 2000 Note Year ended 31 March 2000 £000 Year ended 31 March 1999 £000 Net cash inflow from operating activities Returns on investments and servicing of finance Taxation Capital expenditure and financial investment Acquisitions Equity dividends paid Cash flow before management of liquid resources and financing Management of liquid resources Financing (Redemption)/issue of shares Increase in debt Increase/(decrease) in cash 24 25 25 25 11 26 Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash in the year Cash inflow from management of liquid resources Cash inflow from change in debt Debt arrangement expenses Liability acquired with subsidiary Movement in net debt in the year Net debt 1 April 1999 Net debt 31 March 2000 45,569 (19,486) (4,560) (4,886) (9,028) 27,969 (18,161) (3,650) (60,398) - (31,910) (1,648) (24,301) 30,347 (20) (3,086) 2,940 2000 £000 2,940 (30,347) 3,086 (365) (43,910) (68,596) (174,489) (243,085) (55,888) 10,110 1,352 33,324 (11,102) 1999 £000 (11,102) (10,110) (33,324) (256) - (54,792) (119,697) (174,489) The notes on pages 24 to 41 form part of these financial statements. 24 Helical Bar plc Notes to Financial Statements 1. Accounting policies The financial statements have been prepared under the historical cost convention as modified by the revaluation of investment properties and in accordance with applicable accounting standards. The accounting policies have remained unchanged since the previous year, except for the adoption of FRS15. Basis of consolidation The group financial statements consolidate those of the company and its subsidiary undertakings drawn up to 31 March 2000. Profits or losses on intra group transactions are eliminated in full. Turnover Turnover represents rental income and the proceeds from the sale of trading properties and developments. For funded developments, turnover comprises the increase in the valuation of work during the year and profit recognised on each development. directors a binding contract of sale exists. Income from the sale of trading properties is included in the profit and loss account when in the opinion of the Depreciation Depreciation is calculated to write down the cost to residual value of all fixed assets, excluding investment properties, by equal annual instalments over their expected useful lives. The annual rates generally applicable are: - short leasehold property - leasehold improvements - vehicles & office equipment length of lease 10% 25% Developments The attributable profit on developments is recognised once their outcome can be assessed with reasonable certainty. case of developments funded by institutions this profit is recognised on the letting of the developments. In the Stock Stock is stated at the lower of cost and net realisable value. Long-term contract balances included in stock are stated at cost, after provision has been made for any foreseeable losses and the deduction of applicable payments on account. Deferred taxation Deferred tax is provided for under the liability method using the tax rates estimated to apply when the timing differences reverse, and is accounted for to the extent that it is probable that a liability or asset will crystallise. Unprovided deferred tax is disclosed as a contingent liability. Interest capitalised on development properties Interest costs incurred on development properties are capitalised until the earliest of: - the date when the development becomes fully let; - the date when the income exceeds outgoings; - the date of completion of the development. This accounting policy has been changed to adopt the requirements of FRS15. This change has had no material effect on the group. Investments Current asset investments are included at the lower of cost and net realisable value. Other investments are included at cost less amounts written off. Investment property Completed investment properties are included in the balance sheet at their open market values. Any surplus arising is credited to the revaluation reserve, any temporary deficits are netted off against the remaining balance on the reserve. Permanent diminutions in value below original cost are reflected through the profit and loss account. Standard Accounting Practice No. 19, freehold investment properties and leasehold investment properties where the unexpired term is over twenty years are not depreciated but are valued by an external valuer at least every three years. years where an external valuation is not commissioned, a valuation is undertaken by a suitably qualified member of the company’s staff. In accordance with the Statement of In Helical Bar plc Notes to Financial Statements 25 1. Accounting policies (continued) This policy represents a departure from statutory accounting principles which require depreciation to be provided on all fixed assets. The directors consider that this policy is necessary in order that the financial statements may give a true and fair view because current values and changes in current values are of prime importance rather than the calculation of systematic annual depreciation. Depreciation is only one of many factors affecting annual valuation and its effect cannot be quantified. Financing costs The group uses derivative financial instruments to manage exposure to fluctuations in interest rates. Financial assets and liabilities are recognised in the balance sheet at the lower of cost and net realisable value. Provision is made for diminution in value where appropriate. The costs of arranging finance for the group, including financial instruments entered into to protect against the effects of interest rate movements, are written off to the profit and loss account over the terms of, and in proportion to, the associated finance. Goodwill Goodwill arising on acquisition is treated as an intangible asset and the cost written off in equal instalments over its useful economic life, currently estimated to be fifteen years. Employees share ownership plan trust (the “Trust” ) Shares in Helical Bar plc owned by the Trust are stated at the lower of cost and net income from the expected exercise of options over the shares. Any deficit arising between the original cost of the shares and their net realisable value will be funded by the company. 2. Turnover and gross profit on ordinary activities before taxation The analysis of turnover and gross profit by function is as follows: Trading property sales Rental income Developments Other income and provisions Gross profit Central overheads Interest payable less receivable Turnover Gross profit Year ended 31 March 2000 £000 Year ended 31 March 1999 £000 Year ended 31 March 2000 £000 Year ended 31 March 1999 £000 3,890 26,656 116,243 3,133 95 21,482 96,622 3,045 372 23,652 19,345 113 43,482 (9,669) (16,348) 72 18,475 21,601 (1,144) 39,004 (6,860) (12,515) Profit before taxation and profit on sale of investment properties 17,465 19,629 All sales were within the UK. All turnover is attributable to continuing operations. An analysis of property assets can be found in notes 12 and 14 and the directors do not consider a further analysis of net assets to be appropriate. 26 Helical Bar plc Notes to Financial Statements 3. Administrative expenses Operating profit on ordinary activities is stated after: Staff costs Depreciation and amortisation - tangible fixed assets - goodwill - deferred loan arrangement expenses Deficit in ESOP Auditors' remuneration: - audit services - non-audit services Staff costs during the year: - salaries - social security costs - other pension costs Year ended 31 March 2000 £000 Year ended 31 March 1999 £000 6,280 5,008 226 612 365 703 76 53 5,009 857 414 6,280 221 41 256 - 61 82 4,132 501 375 5,008 With the exception of the pension contributions referred to overleaf, other pension costs relate to payments to individual pension plans. The average number of employees of the group during the year was: - management and administration Remuneration in respect of directors was as follows: Chairman J. P. Southwell Non-Executive Directors I. G. Butler C.G.H. Weaver (paid to a third party) Executive Directors M. E. Slade N. G. McNair Scott G. A. Kaye P. M. Brown Salary/ Fees £000 Benefits in kind £000 Bonus £000 40 17 17 463 169 202 169 1,077 13 - - 24 16 17 17 87 - - - 1,000 - 1,517 983 3,500 2000 Total £000 53 17 17 1,487 185 1,736 1,169 4,664 2000 24 1999 Total £000 56 19 19 2,757 366 1,211 828 5,256 1999 26 Pensions 2000 Total £000 1999 Total £000 - - - 2 367 - - 369 - - - 2 330 - - 332 Helical Bar plc Notes to Financial Statements 27 3. Administrative expenses (continued) The pension contributions were paid into a Small Self Administered Scheme and include £333,000 (1999 : £300,000) bonus paid as contributions in respect of Nigel McNair Scott. The assets of this money purchase scheme are administered by trustees in a fund independent from the assets of the group. Gerald Kaye was the highest paid director during the year with a total remuneration, excluding pension contributions, of £1,736,000 (1999: Michael Slade, £2,757,000 including profit on exercise of share options of £1,436,000). On 11 June 1999 the Helical Bar Profit Sharing Scheme purchased 18,545 ordinary shares in the company. On 16 June 1999 under the rules of the Scheme 18,715 shares were allocated to directors and employees of the company. On 30 March 2000 the Scheme purchased 20,000 ordinary shares in the company. On 7 April 2000, under the rules of the Scheme 19,295 shares were allocated to directors and employees of the company. The shares allocated to the directors of the company were as follows: M. E. Slade N. G. McNair Scott G. A. Kaye P. M. Brown On 16 June 1999 On 7 April 2000 No. of shares 1,457 1,457 1,457 1,457 Price 549.0p 549.0p 549.0p 549.0p No. of shares 1,415 1,415 1,415 1,415 Price 565.0p 565.0p 565.0p 565.0p 4. Sale of investment properties Net proceeds from sale of investment properties Book costs Provision for permanent diminution in value Profit on sale of investment properties 5. Net interest payable and similar charges On bank loans and overdrafts Finance arrangement costs Other interest and similar charges Interest capitalised Loan termination costs Interest receivable and similar income Year ended 31 March 2000 £000 Year ended 31 March 1999 £000 110,875 (106,320) - 4,555 2000 £000 17,893 365 2,350 (2,661) (36) (1,563) 16,348 15,446 (14,357) (674) 415 1999 £000 14,097 256 1,760 (2,088) - (1,510) 12,515 28 Helical Bar plc Notes to Financial Statements 6. Taxation on profit on ordinary activities The tax charge represents: - UK corporation tax at 30% (1999 31%) - deferred taxation (note 21) Adjustments in respect of prior years: - UK corporation tax Year ended 31 March 2000 £000 Year ended 31 March 1999 £000 4,595 1,500 6,095 (63) 6,032 3,899 - 3,899 - 3,899 The effective tax charge for the year was reduced from 30% through the availability of capital allowances of approximately £8.9m (1999 £5.4m). 7. Dividends Attributable to equity share capital Ordinary - interim paid 4.40p (1999 4.00p) per share - final proposed 6.75p (1999 6.00p) per share Total ordinary dividends 11.15p (1999 10.00p) per share Special ordinary dividend payable nil (1999 100.00p) per share Total ordinary dividends Attributable to non-equity share capital 5.25p convertible cumulative redeemable preference shares 2012 of 70p each - dividends paid 2000 £000 1,272 1,951 3,223 - 3,223 - 3,223 1999 £000 700 1,734 2,434 28,904 31,338 2,293 33,631 8. Parent company The company has taken advantage of section 230 of the Companies Act 1985 and has not included its own profit and loss account in the financial statements. The group profit after tax for the year includes a profit of £5,052,000 (1999 £23,329,000) which is dealt with in the financial statements of the parent company. 9. Earnings per share Earnings per share is based on the profit after tax, minority interest and preference dividends of £15,911,000 (1999: £12,677,000) and a weighted average of 28,903,697 (1999: 19,014,376) ordinary shares of 5p each in issue during the year. The weighted average of ordinary shares for the year to 31 March 2000 is the number of ordinary shares in issue of 29,611,697 less the 708,000 shares held by the ESOP, which has waived its entitlement to receive dividends. For the year to 31 March 1999, the weighted average is the number of ordinary shares in issue of 17,593,637 at the start of the year less 350,000 shares held by the ESOP at 1 April 1998 plus 370,356 shares issued during the year following the exercise of share options and 1,400,383 shares issued following the conversion of preference shares. Fully diluted earnings per share are based on 29,653,861 (1999: 29,552,075) ordinary shares of 5p, which includes 750,164 (1999: 409,869) ordinary shares representing the weighted average of share options. Helical Bar plc Notes to Financial Statements 29 10. Intangible fixed assets - goodwill Cost at 1 April 1999 Additions Cost at 31 March 2000 Depreciation at 1 April 1999 Provision for the year Depreciation at 31 March 2000 Net book amount at 31 March 2000 Net book amount at 31 March 1999 Group £000 617 719 1,336 41 612 653 683 576 11. Purchase of Glenlake Limited The company purchased 100% of the issued share capital of Glenlake Limited on 4 June 1999 and the acquisition method of accounting has been adopted. The loss after taxation of Glenlake Limited for the period from 1 January 1999, the beginning of the subsidiary’s financial period, to the date of aquisition, was £2,659,000. The loss after taxation for the year ended 31st December 1998 was £126,000. The analysis of net assets acquired is as follows: Fixed assets - investment property Investment Debtors Cash Creditors Loans Net Assets Goodwill arising Consideration in cash Less: Cash acquired with subsidiary £000 52,000 1 692 3,527 (474) (43,910) 11,836 719 12,555 (3,527) 9,028 30 Helical Bar plc Notes to Financial Statements Short Investment Properties In course of leasehold In course of development development property & Vehicles & office Freehold £000 Leasehold £000 Freehold £000 12. Tangible fixed assets Group Leasehold improvements equipment £000 £000 £000 Total £000 Cost or valuation at 1 April 1999 Additions at cost Transfers Disposals Revaluation 239,992 116,990 22,886 (30,401) 30,334 43,050 619 - (37,495) (14) 49,415 33,158 (22,886) (38,424) (604) - 12,262 - - 688 646 - - - - 945 111 - (43) - 334,048 163,140 - (106,363) 30,404 Cost or valuation at 31 March 2000 379,801 6,160 20,659 12,950 646 1,013 421,229 Depreciation at 1 April 1999 Provision for the year Eliminated on disposals Depreciation at 31 March 2000 - - - - - - - - - - - - - - - - Net book amount at 31 March 2000 379,801 6,160 20,659 12,950 Net book amount at 31 March 1999 239,992 43,050 49,415 Company Cost at 1 April 1999 Additions at cost Disposals Cost at 31 March 2000 Depreciation at 1 April 1999 Provision for the year Eliminated on disposals Depreciation at 31 March 2000 Net book amount at 31 March 2000 Net book amount at 31 March 1999 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 178 47 - 225 421 468 646 - - 646 178 47 - 225 421 468 498 179 (27) 650 676 226 (27) 875 363 447 420,354 333,372 922 111 (43) 990 494 174 (27) 641 349 428 1,568 111 (43) 1,636 672 221 (27) 866 770 896 Interest capitalised in respect of the development of investment properties is included in tangible fixed assets to the extent of £1,735,000 (1999: £3,504,000) Interest capitalised during the year in respect of investment properties in the course of development was £1,603,000 (1999: £1,458,000) Helical Bar plc Notes to Financial Statements 31 12. Tangible fixed assets (continued) The investment properties have been valued on an open market basis at 31 March 2000 as follows: Healey & Baker, International Real Estate Consultants Jones Lang LaSalle, International Real Estate Consultants Allsop & Co, Chartered Surveyors Knight Frank, Chartered Surveyors DTZ Debenham Tie Leung, International Property Advisors King Sturge & Co. Chartered Surveyors Directors’ valuation £000 210,700 56,000 33,150 22,350 16,750 14,320 66,300 419,570 The net surplus arising of £30,404,000 (1999 £19,850,000) has been transferred to the revaluation reserve. The historical cost of investment property is £322,807,000 (1999 £258,188,000). 13. Investments Shares in subsidiary undertakings at cost Employees’ Share Ownership Plan Trust - own shares The movement in the year was as follows: At 1 April 1999 Acquired during year Deficit in ESOP written off At 31 March 2000 Group Company 31 March 2000 31 March 1999 31 March 2000 31 March 1999 £000 £000 - 3,656 3,656 4,359 - (703) 3,656 - 4,359 4,359 1,934 2,425 - 4,359 £000 2,252 3,656 5,908 6,545 66 (703) 5,908 £000 2,186 4,359 6,545 4,119 2,426 - 6,545 Following approval at the 1997 Annual General Meeting the Company established the Helical Bar Employees’ Share Ownership Plan Trust (the “Trust”) to be used as part of the remuneration arrangements for employees. The purpose of the Trust is to facilitate and encourage the ownership of shares by or for the benefit of employees by the acquisition and distribution of shares in the Company. At 31 March 2000 the Trust held 699,000 (1999 699,000) ordinary shares in Helical Bar plc over which options had been granted. At 31 March 2000 the Trust held 9,000 (1999 9,000) ordinary shares over which no options had been granted. 32 Helical Bar plc Notes to Financial Statements 13. Investments (continued) The company’s principal subsidiary undertakings, all of which have been consolidated, are: Name of undertaking Nature of business Percentage of ordinary share capital held Aycliffe and Peterlee Development Company Limited Aycliffe and Peterlee Investment Company Limited* Helical Bar (CL) Investment Company Limited* Helical Bar Developments (South East) Limited Helical Bar (Wales) Limited* Helical Properties Limited Helical Properties Investment Limited Intercontinental Land and Development Co. Limited* Helical Bar Developments Limited* Helical Bar (City Developments) Limited* Helical Bar Trustees Limited CPP Investments Limited* Helical Bar (Wood Street) Limited 61 Southwark Street Limited* Helical Bar (Oxford) Limited Helical Properties Retail Limited Helical Bar (CL) Limited* Helical Bar (Chiswell Street) Limited* Baylight Developments Limited Helical Bar (City Investments) Limited* Networth Limited* 56 Cheapside Limited Helical Investment Holdings Limited Helical Bar (Mansion House Place) Limited Helical (Strand) Limited Helical Properties (Basingstoke) Limited* CBX II Limited* Glenlake Limited* Helical (SA) Limited Helical Bar (Rex House) Limited Helical (Fleet) Limited 48 Gracechurch Street Limited Helical (TE) Limited Helical (Interchange) Limited Helical Retail Limited Helical Retail (RBS) Limited* Helical Properties (WSM) Limited* Development and trading Investment Investment Development and trading Development and trading Investment development and trading Investment Investment development and trading Development Development Trustee of Profit Sharing Scheme Investment Development Investment Trading Investment Investment Development Investment Investment Trading Trading Share dealing Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Investment Development and trading Development and trading Investment 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 90% 75% 75% 75% All principal subsidiary undertakings operate in the United Kingdom and are incorporated and registered in England and Wales. *Ordinary capital is held by a subsidiary undertaking. Helical Bar plc Notes to Financial Statements 33 14. Stock Development sites Properties held as trading stock Group 31 March 2000 31 March 1999 Company 31 March 2000 31 March 1999 £000 £000 £000 £000 16,621 5,399 22,020 27,715 7,339 35,054 48 - 48 31 - 31 Interest capitalised in respect of the development of sites is included in stock to the extent of £572,000 (1999: £1,276,000). Interest capitalised during the year in respect of development sites amounted to £1,058,000 (1999: £1,808,000). 15. Debtors Trade debtors Taxation Amounts owed by subsidiary undertakings Other debtors Prepayments and accrued income Group Company 2000 £000 25,805 964 - 1,253 26,764 54,786 1999 £000 9,158 1,171 - 1,126 28,693 40,148 2000 £000 1,527 496 100,650 202 1,518 104,393 1999 £000 220 501 120,354 78 338 121,491 Included in group prepayments and accrued income is an amount of £2,460,000 (1999 £5,099,000) due after more than one year. 16. Current asset investments UK Listed investments at cost Group Company 2000 £000 5,236 5,236 1999 £000 - - 2000 £000 2,088 2,088 1999 £000 - - The market value of listed investments at 31 March 2000 was £5,019,000. 34 Helical Bar plc Notes to Financial Statements 17. Cash at bank and in hand Cash secured against debt repayable within one year Free cash 18. Creditors: amounts falling due within one year Bank overdrafts and term loans Trade creditors Taxation Social security costs and other taxation Dividends payable Other creditors Accruals and deferred income 19. Creditors: amounts falling due after more than one year Bank loans repayable within: - 1-2 years - 2-5 years - after 5 years Deferred arrangement costs Group 31 March 2000 31 March 1999 Company 31 March 2000 31 March 1999 £000 £000 4,761 12,230 16,991 2000 £000 2,692 42,887 4,233 594 1,951 1,894 26,264 80,515 5,464 38,846 44,310 Group 1999 £000 31,223 32,748 5,600 84 30,638 1,005 27,364 128,662 Group 2000 £000 1999 £000 £000 505 8,571 9,076 2000 £000 - 134 1,213 442 2,055 - 4,189 8,033 2000 £000 Company Company 30,397 53,548 175,807 259,752 (2,368) 2,035 34,275 152,746 189,056 (1,480) 257,384 187,576 20,000 - - 20,000 (65) 19,935 £000 - 31,297 31,297 1999 £000 10,650 139 2,906 61 30,638 - 3,502 47,896 1999 £000 - 20,000 - 20,000 (142) 19,858 Bank overdrafts and term loans in creditors falling due within one year and after one year are secured against properties held in the normal course of business by subsidiary undertakings to the value of £402,026,000 (1999 £347,533,000). These will be repayable when the underlying properties are sold. Helical Bar plc Notes to Financial Statements 35 20. Financing and financial instruments Short term debtors and creditors Short term debtors and creditors have been excluded from all the following disclosures. Bank overdraft and loans - maturity After 5 years From 2-5 years From 1-2 years Deferred arrangement costs Due after more than one year Due within one year Group 31 March 2000 31 March 1999 £000 £000 175,807 53,548 30,397 259,752 (2,368) 257,384 2,692 260,076 152,746 34,275 2,035 189,056 (1,480) 187,576 31,223 218,799 The group has various undrawn committed borrowing facilities. The facilities available at 31 March 2000 in respect of which all conditions precedent had been met were as follows: Expiring in one year or less Expiring in more than one year but not more than two years Expiring in more than two years % - 9.050 8.625 8.335 - 5.220/5.450 6.600 2000 Expiry - Feb. 2009 Sept. 2001 June 2000 - July 2002 June 2001 6.809 July 2002 Interest rates Fixed rate borrowings - fixed - fixed - fixed - swaps - swaps - swaps - swaps Weighted average Floating rate borrowings Total borrowings Deferred arrangement costs Provision for loan redemption charge Floating rate borrowings bear interest at rates based on LIBOR. - 9,933 20,000 14,200 - 49,000 11,625 104,758 157,686 262,444 (2,368) - 260,076 £000 % 1999 Expiry Nov. 2013 Feb. 2009 Sept. 2001 June 2000 July 1999 - - 11.419 9.050 8.625 8.335 7.228 - - 8.000 Oct. 2001 2000 £000 50,000 - 74,398 1999 £000 33,403 14,025 6,646 124,398 54,074 £000 8,500 10,239 20,000 14,200 74,500 - - 127,439 90,320 217,759 (1,480) 2,520 218,799 36 Helical Bar plc Notes to Financial Statements 20. Financing and financial instruments (continued) Hedging In addition to the fixed rates, borrowings are also hedged by the following financial instruments: Instrument Current - cap - cap - cap - collar - floor Forward - collar Gearing Total borrowings Cash Net borrowings Net assets Gearing Value £000 50,000 30,000 49,000 31,000 49,000 80,000 Rate % 9.050 9.150 6.000-6.500 4.730-6.500 4.730 Commencement Expiry - - - - - Jan. 2001 Jan. 2001 July 2004 Jan. 2006 Jan. 2006 4.830-7.500 Jan. 2001 Jan. 2006 31 March 2000 31 March 1999 £000 260,076 (16,991) £000 218,799 (44,310) 243,085 174,489 184,852 142,106 131% 123% Fair value of financial assets and financial liabilities Borrowings Interest rate swaps Other financial instruments 2000 1999 Book Value £m 262,444 - (223) Fair Value £m 263,668 (1,551) (2,299) Book Value £m 220,279 - (203) Fair Value £m 222,526 1,305 995 262,221 259,818 220,076 224,826 The fair value of financial assets and financial liabilities represents the mark to market valuations at 31 March 1999 and 31 March 2000. The adjustment to net assets from a recognition of these values would be to increase net asset value per share by 7p (1999: reduce by 15p). Helical Bar plc Notes to Financial Statements 37 21. Deferred taxation Amounts provided for: - unrealised capital gains Amounts unprovided are: - unrealised capital gains - accelerated capital allowances - other timing differences - tax losses Group 31 March 2000 31 March 1999 Company 31 March 2000 31 March 1999 £000 £000 £000 £000 1,500 1,500 21,548 1,210 163 (7,812) 15,109 - - 15,456 1,560 1,406 (6,797) 11,625 - - - - 31 - 31 - - - - 33 - 33 The amounts unprovided represent contingent liabilities at the balance sheet date and are calculated using a tax rate of 30%. Amounts provided for represent the anticipated corporation tax payable on properties sold since the year end for which revaluation surpluses have been recognised. No provision has been made for taxation which would accrue if the remaining investment properties were disposed of at their revalued amounts. The amounts unprovided are shown above under unrealised capital gains. The adjustment to net assets resulting from a recognition of these amounts would be to reduce net asset value per share by 46p (1999 36p). 22. Share capital Authorised - 45,000,000 (1999: 34,000,000) ordinary shares of 5p each - 45,996,768 (1999: 45,996,768) 5.25p convertible cumulative redeemable preference shares 2012 of 70p each Allotted, called up and fully paid at 31 March 2000 Attributable to equity interests: - 29,611,697 (1999: 29,611,697) ordinary shares of 5p each Attributable to non equity interests: - nil (1999: 20,088) 5.25p convertible cumulative redeemable preference shares 2012 of 70p each On 12 April 1999 20,088 preference shares were redeemed. 2000 £000 2,250 32,198 34,448 1999 £000 1,700 32,198 33,898 1,481 1,481 - 1,481 14 1,495 38 Helical Bar plc Notes to Financial Statements 22. Share capital (continued) Share Options At 31 March 2000 options over 3,460,000 (1999 3,460,000) ordinary shares in the company had been granted to directors and employees under the company’s share option schemes. During the year no options were exercised and no new options were granted. Exercise price per share p Number of shares Senior Executive 1988 Share Option Scheme Subscription options Option period ending: - 9 March 2004 - 20 October 2004 - 10 July 2007 - 28 September 2007 - 26 November 2007 Purchase options Option period ending: - 26 November 2004 - 9 July 2005 Helical Bar 1999 Share Option Scheme Subscription options Option period ending - 7 March 2009 Purchase options Option period ending - 7 March 2009 Helical Bar 1999 Approved Share Option Scheme Subscription options Option period ending - 7 March 2009 273.0 252.0 412.5 467.5 452.5 452.5 565.0 100,000 200,000 365,000 100,000 394,000 206,000 400,000 442.5 1,547,768 442.5 93,000 442.5 54,232 3,460,000 Helical Bar plc Notes to Financial Statements 39 22. Share capital (continued) The directors’ interests in these Share Options Schemes during the year were as follows: At Start and end of year Exercise price Date from which exercisable Expiry date Type M E Slade Senior Executive 1988 Share Option Scheme Senior Executive 1988 Share Option Scheme Senior Executive 1988 Share Option Scheme Helical Bar 1999 Share Option Scheme Helical Bar Approved 1999 Share Option Scheme Purchase Purchase Subscription Subscription Subscription 6,000 400,000 394,000 493,221 6,779 1,300,000 N G McNair Scott Senior Executive 1988 Share Option Scheme Helical Bar 1999 Share Option Scheme Senior Executive 1988 Share Option Scheme Helical Bar 1999 Share Option Scheme Helical Bar Approved 1999 Share Option Scheme Purchase Purchase Subscription Subscription Subscription G A Kaye Senior Executive 1988 Share Option Scheme Senior Executive 1988 Share Option Scheme Helical Bar 1999 Share Option Scheme Helical Bar 1999 Share Option Scheme Helical Bar Approved 1999 Share Option Scheme Subscription Subscription Purchase Subscription Subscription P M Brown Senior Executive 1988 Share Option Scheme Senior Executive 1988 Share Option Scheme Helical Bar 1999 Share Option Scheme Helical Bar Approved 1999 Share Option Scheme Purchase Subscription Subscription Subscription 50,000 43,000 250,000 235,221 6,779 585,000 100,000 200,000 50,000 393,221 6,779 750,000 100,000 100,000 293,221 6,779 500,000 452.5p 565.0p 452.5p 442.5p 442.5p 452.5p 442.5p 412.5p 442.5p 442.5p 273.0p 252.0p 442.5p 442.5p 442.5p 26.11.01 10.07.02 26.11.02 08.03.04 08.03.02 26.11.04 09.07.05 26.11.07 07.03.09 07.03.09 26.11.01 08.03.03 10.07.02 08.03.04 08.03.02 26.11.04 07.03.06 10.07.07 07.03.09 07.03.09 10.03.99 21.10.99 08.03.03 08.03.04 08.03.02 09.03.04 20.10.04 07.03.06 07.03.09 07.03.09 452.5p 467.5p 442.5p 442.5p 26.11.01 29.09.02 08.03.04 08.03.02 26.11.04 28.09.07 07.03.09 07.03.09 There have been no changes in the above directors interests in the period to 16 June 2000. The market price of the ordinary shares at 31 March 2000 was 569.0p (1999: 485.0p).This market price varied between 485.0p and 641.0p during the year. 40 Helical Bar plc Notes to Financial Statements Share premium account £000 Non-distributable Capital redemption reserve £000 Distributable Other reserves £000 Revaluation reserve £000 Profit & loss account £000 19,201 12,688 - - 12,583 (20) 44,452 47,435 1,829 (20) 49,244 23. Share premium and reserves Group At 1 April 1999 Profit retained Revaluation of investment property Minority interest in revaluation of investment property Realised on disposals Redemption of preference shares 34,508 - - - - (6) 7,081 - - - - 20 291 - - - - - 78,948 - 30,404 (1,068) (12,583) - At 31 March 2000 34,502 7,101 291 95,701 Company At 1 April 1999 Profit retained Redemption of preference shares At 31 March 2000 34,508 - (6) 34,502 7,081 - 20 7,101 1,987 - - 1,987 - - - - 24. Reconciliation of operating profit to net cash inflow from operating activities Operating profit Depreciation of fixed assets Writedown of fixed assets Deficit in ESOP (Profit)/Loss on sale of fixed assets Write down of goodwill (Increase)/decrease in debtors Increase in creditors Decrease/(increase) in stocks Year ended Year ended 31 March 2000 31 March 1999 £000 £000 33,813 226 - 703 (7) 612 (12,819) 7,346 15,695 32,144 221 500 - 10 41 599 2,708 (8,254) Net cash inflow from operating activities 45,569 27,969 Helical Bar plc Notes to Financial Statements 41 25. Analysis of cash flows for headings netted in the cash flow statement Return on investments and servicing of finance Interest received Interest paid Non-equity dividends paid Taxation Tax received Tax paid Capital expenditure and financial investment Purchase of property Sale of property Purchase of tangible fixed assets Sale of tangible fixed assets Purchase of investments Year ended Year ended 31 March 2000 31 March 1999 £000 £000 1,564 (20,702) (348) 1,510 (15,482) (4,189) (19,486) (18,161) 266 (4,826) (4,560) (109,104) 109,541 (111) 23 (5,235) - (3,650) (3,650) (73,172) 15,446 (293) 46 (2,425) (4,886) (60,398) At 1 April 1999 £000 Cash Flow £000 Acquisition £000 Other non cash changes £000 At 31 March 2000 £000 44,310 (69) 44,241 (31,154) (189,056) 1,480 (218,730) (174,489) 3,028 (88) 2,940 28,619 (26,786) 1,253 3,086 6,026 - - - - (43,910) - (43,910) (43,910) (30,347) - 16,991 (157) (30,347) 16,834 - - (365) (365) (2,535) (259,752) 2,368 (259,919) (30,712) (243,085) 26. Analysis of net debt Cash at bank and in hand Bank overdraft Debt due within one year Debt due after more than one year less: arrangement expenses Total 27. Contingent liabilities The company has entered into cross guarantees in respect of the banking facilities of its subsidiaries. The company has also entered into interest rate floors on £80 million at 4.83% from January 2001 to January 2006, and on a further £80 million at 4.73% from July 1999 to January 2006. Other than these contingent liabilities and the deferred tax referred to in note 21 there were no contingent liabilities at 31 March 2000 (1999 nil). 28. Capital commitments At 31 March 2000 there were no capital commitments (1999 nil). 42 Helical Bar plc Ten Year Review . 1 9 1 1 3 . . 2 9 1 1 3 . . 3 9 1 1 3 . . 4 9 1 1 3 . . 5 9 1 1 3 . . 6 9 1 1 3 . . 7 9 1 1 3 . . 8 9 3 1 3 . . 9 9 3 1 3 . . 0 0 3 1 3 . 0 0 0 £ 0 0 0 £ 0 0 0 £ 0 0 0 £ 0 0 0 £ 0 0 0 £ 0 0 0 £ 0 0 0 £ 0 0 0 £ 0 0 0 £ 7 5 7 4 7 , 1 9 0 1 3 , 6 1 8 4 2 , 2 8 9 4 2 , 1 2 5 0 5 , 8 4 9 5 6 , 9 2 5 0 0 1 , 6 1 4 4 1 2 , 4 4 2 1 2 1 , 2 2 9 9 4 1 , r e v o n r u T 1 7 8 8 1 , 7 4 5 6 1 , 0 1 8 3 1 , 8 1 1 2 1 , 4 9 2 6 1 , 6 8 1 9 1 , 4 7 3 2 2 , 9 0 0 2 2 , 2 8 4 1 2 , 6 5 6 6 2 , e m o c n i l a t n e R 4 6 2 5 2 , 7 2 6 1 1 , 5 9 8 6 1 , 3 1 7 2 1 , 5 7 4 6 1 , 7 9 6 1 2 , 4 8 2 9 2 , 5 7 7 8 3 , 4 0 0 9 3 , 2 8 4 3 4 , t i f o r p s s o r G 8 7 8 2 , ) 7 5 5 7 ( , 2 8 8 5 , 8 7 5 6 , 7 8 1 8 , 0 0 2 9 , 3 3 0 2 1 , 4 9 4 8 1 , 4 4 0 0 2 , 0 2 0 2 2 , n o i t a x a t e r o f e b ) s s o l ( / t i f o r P 6 5 5 2 , ) 8 8 2 6 ( , 2 3 6 5 , 9 4 0 6 , 5 5 6 7 , 2 9 8 7 , 2 3 0 9 , 0 1 6 4 1 , 5 4 1 6 1 , 8 8 9 5 1 , n o i t a x a t r e t f a ) s s o l ( / t i f o r P 6 3 6 1 , 5 5 6 3 8 7 4 4 9 8 5 0 1 , 9 8 1 1 , 6 6 6 1 , 2 5 5 1 , 8 3 3 1 3 , 3 2 2 3 , s d n e d v d i i y r a n d r O i ) 9 3 3 ( ) 8 1 7 7 ( , 1 5 9 3 , 1 5 4 3 , 5 8 7 3 , 6 6 6 3 , 4 6 5 3 , 5 8 9 7 , ) 1 6 6 8 1 ( , 8 8 6 2 1 , i d e n a t e r ) s s o l ( / t i f o r P p 0 0 1 . p 0 4 . p 8 4 . p 8 5 . p 5 6 . p 3 7 . p 0 8 . p 0 9 . p 0 0 1 . p 5 1 1 1 . e r a h s y r a n d r o i r e p d n e d v D i i - - - - - - p 0 2 . - . p 0 0 0 1 - e r a h s y r a n d r o i r e p d n e d v d i i p 9 7 . ) p 2 3 4 ( . p 0 9 2 . p 3 4 2 . p 3 6 2 . p 6 6 2 . p 3 8 2 . p 9 0 4 . p 7 0 5 . p 7 3 5 . e r a h s y r a n d r o i r e p i s g n n r a e l i a c e p S d e t u l i D 0 8 9 8 5 1 , 0 5 6 8 8 , 8 4 0 0 2 1 , 0 9 6 8 1 1 , , 9 7 5 6 5 1 , 5 6 7 0 8 1 , 0 7 5 1 0 2 8 1 7 0 5 2 , 7 5 4 2 3 3 , 0 7 5 9 1 4 , o i l o f t r o p t n e m t s e v n I 2 2 6 3 5 , 4 3 6 5 4 , 0 8 1 6 4 , 7 4 7 3 8 , 9 2 4 1 9 , 2 6 6 2 9 , 4 6 6 5 0 1 , , 2 8 9 8 3 1 , 4 2 5 1 4 1 8 2 5 3 8 1 , s d n u f l ’ s r e d o h e r a h S p 8 5 2 p 0 2 2 p 4 2 2 p 9 9 2 p 6 2 3 p 0 3 3 p 2 7 3 p 2 8 4 p 3 7 4 p 3 0 6 e r a h s r e p s t e s s a t e n d e t u l i D Helical Bar plc Notice of Annual General Meeting 43 Notice is hereby given that the eightieth Annual General Meeting of the company will be held at The Westbury, Conduit Street at New Bond Street, London W1A 4UH on Wednesday 19 July 2000 at 11.30 a.m. for the following purposes As ordinary business 1. To receive and consider the directors’ report and the financial statements for the year ended 31 March 2000. 2. To declare a final dividend of 6.75p per ordinary share of 5p. 3. To re-elect Mr M E Slade, who retires by rotation, as a director of the company. 4. To re-elect Mr N G McNair Scott, who retires by rotation, as a director of the company. 5. To re-elect Mr A R Beevor, who was appointed on 11 April 2000, as a director of the company. 6. To re-appoint Grant Thornton as auditors to the company and to authorise the directors to fix their remuneration. As special business To consider and, if thought fit, to pass the following resolutions of which resolutions 7, 9 and 10 will be proposed as special resolutions and resolution 8 will be proposed as an ordinary resolution: 7. That: a) each of the Convertible Cumulative Redeemable Preference Shares 2012 of 70p in the capital of the company be and they are hereby sub-divided and converted into 14 Ordinary Shares of 5p each; b) Article 3 of the company’s Articles of Association be and it is hereby deleted and replaced by the following: “3. The authorised share capital of the company is £34,447,737 divided into 688,954,752 ordinary shares of 5p each (hereinafter referred to as “Ordinary Shares”).” 8. That the directors be and they are hereby generally and unconditionally authorised, pursuant to Section 80 of the Companies Act 1985, to exercise all powers of the company to allot relevant securities (as defined in Section 80 of that Act) of an aggregate nominal amount of £493,528 provided that this authority shall expire on 18 July 2005 save that the company may before said expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant securities in pursuance of such offer or agreement as if the authority conferred hereby had not expired. 9. That the directors be and are hereby empowered, pursuant to Section 95 of the Companies Act 1985, to allot equity securities for cash (as defined in Section 94 of that Act) pursuant to the authority conferred by Resolution 8 above as if Section 89 of that Act did not apply to any such allotment provided that this power shall be limited to: a) the allotment of equity securities for cash in connection with a rights issue in favour of shareholders on the register of members at such record date or dates as the directors may determine for the purposes of the issue where the equity securities respectively attributable to the interests of all ordinary shareholders are proportionate (as nearly as may be) to their respective entitlements at such record date or dates so determined provided that the directors may make such arrangements in respect of overseas shareholders and in respect of fractional entitlements as they consider necessary or expedient; and b) the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities for cash up to an aggregate maximum nominal amount of £74,029; and shall expire at the conclusion of the next Annual General Meeting of the company after the passing of this resolution, or on 30 September 2001, if earlier, save that the company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired. 10. That the company is hereby generally and unconditionally authorised to make market purchases (within the meaning of Section 163 of the Companies Act 1985) of ordinary shares of 5p each in the capital of the company (‘ordinary shares’) provided that: a) the maximum number of ordinary shares hereby authorised to be purchased is 4,427,000; b) the maximum price which may be paid for an ordinary share is an amount equal to 105 per cent of the average of the middle market quotations for an ordinary share as derived from The Stock Exchange Daily Official List for the 5 business days immediately preceding the day on which the ordinary share is purchased; c) the minimum price which may be paid for an ordinary share is 1p; 44 Helical Bar plc Notice of Annual General Meeting d) the authority hereby conferred shall be in lieu of any existing authority conferred by ordinary resolution to purchase ordinary shares (but without prejudice to any purchase of ordinary shares previously made pursuant to such authority); e) the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of the company after the passing of this resolution, or 30 September 2001, whichever is the earlier, unless such authority is renewed prior to such time; and f) the company may make a contract to purchase the ordinary shares under the authority hereby conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority and may make a purchase of ordinary shares in pursuance of any such contract. By order of the Board T J Murphy Secretary 26 June 2000 Registered Office 11/15 Farm Street London W1X 8NP Registered No. 156663 Notes a) Holders of Ordinary Shares are entitled to attend and vote on all the resolutions proposed at the Annual General Meeting. If you are unable to attend b) Any member entitled to attend and vote is entitled to appoint one or more proxies to attend and, on a poll, vote instead of him. Any such proxy need not be a member of the company. the Annual General Meeting please complete and return the form of proxy so as to reach IRG plc, Proxy Department, Bourne House, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible and in any event so as to reach there not later than 48 hours before the time appointed for holding the meeting. c) Copies of the directors’ contracts of service will be available at the registered office of the company during normal business hours on any weekday (Saturday and public holidays excluded) from the date of this notice until the date of the meeting and will then be available for inspection at the place of the meeting 15 minutes prior to and during the meeting. d) The register of directors’ shareholdings and transactions will be available for reference at the commencement of and during the continuance of the meeting. e) Completion of the form of proxy will not preclude a person from attending and voting in person. f) Entitlement to attend and vote at the meeting will be determined by reference to the Register of Members of the company at midnight on 17 July 2000. Helical Bar plc Financial Calendar Year ended 31 March 2000 Annual General Meeting to be held Final ordinary dividend payable 19 July 2000 21 July 2000 Half year ending 30 September 2000 Results and interim ordinary dividend announced Interim ordinary dividend payable November 2000 December 2000 Year ending 31 March 2001 Results and final dividend announced Final ordinary dividend payable June 2001 July 2001 Designed and produced by Milton PDM, Windsor. Printed by Newgate Press Ltd. 

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