RegisteredNumber5163698
LSPROPERTY
FINANCE
COMPANY
LIMITED
REPORTANDFINANCIAL
STATEMENTS
FORTHEYEARENDED31 MARCH2011
LS PROPERTY
FINANCE
COMPANY
LIMITED
I
i Directors' Report for the year ended 31 March 2011
The directorssubmittheirreportwiththe auditedfinancialstatementsof the Company for the year ended 31 March2011.
RESULTSFORTHEYEARANDDIVIDEND
The resultsare set out in the Profitand Loss Account on page 4.
The directorsdo not recommend the payment of a dividendfor the year ended 31 March 2011 (2010: £Nil).
PRINCIPAL
ACTIVITY,
REVIEW
OFTHEBUSINESS
ANDFUTURE
DEVELOPMENTS
The Company operates primarilyas a fundingvehicle for LandSecuritiesGroup PLC and its subsidiaries. No changes in the Company's
principalactivityare anticipatedin the foreseeable future.
FINANCIAL
RISKMANAGEMENT
The Company's debt financingand use of interestrate swaps exposes itto a varietyof financialrisksthat includethe effects of changes in
liquidity,fairvalue of swaps, interestrates and exchange rates.
The Company uses interestrate swaps and similarinstruments(forwardrate agreements, forwardstartingswaps, etc) to manage its interest
rate exposure, however there is currentlyno hedging in place to protectagainst currency gains and losses.
The Company's principalfinancialassets are cash and inter-companyloans; ittherefore has negligiblecredit risk. The credit riskon derivative
financialinstrumentsis limiteddue to the Company's policy of monitoringcounterpartyexposures. The Company has no significant
concentrationof credit risk,withexposure spread over a large numberof counterparties.
The Company has a £1.5bn committedfacilitydue 31 August 2013 and five bilateralfacilitiesof a totalof £700.0m. This is designed to ensure
thatthe Company has sufficientavailablefunds to lend to other group undertakingsfor operations and planned futureinvestments.
The fair value of the Company's borrowingsand interestrate swaps varies according to changes in the marketcost of borrowing.
POSTBALANCE
SHEETEVENTS
On 3 May 2011, £23.5m, all of the remaining4.625 per cent Notes due 2013 were repaid.
DIRECTORS
The directors who held office duringthe year and up to the date of this reportwere:
F W Salway
C M Gill
K W B Hannah
D L F Holt
S S S Leung
D Rough
S A West
M R Wood
M F Greenslade
INDEMNITY
The Company has made qualifyingthirdpartyindemnityprovisionsfor the benefit of the respective directorswhich were in place throughoutthe
year and which remainin place at the date of this report.
STATEMENT
OF DISCLOSURE
OF INFORMATION
TO AUDITORS
In the case of each directorin office at the date the Directors'Report is approved, the followingapplies:
so far as the directoris aware, there is no relevantaudit informationof which the Company's auditorsare unaware;and
he has taken all the steps thathe ought to have taken as a directorin order to make himselfaware of any relevantaudit informationand to
establish thatthe Company's auditorsare aware of that information.
Registered Office
5 Strand
London
WC2N5AF
By order of the Board
L F Turner,for and on behalf of LS Company Secretaries Limited,
Company Secretary
20 December 2011
Registered in Englandand Wales
Registered number:5163698
Page 1
LS PROPERTY
FINANCE
COMPANY
LIMITED
I Directors'Responsibilitiesfor the year ended 31 March2011
i
Statement of directors' responsibilities
The directorsare responsible for preparingthe Directors'Report and the financialstatementsin accordance withapplicable law and regulations.
Company law requiresthe directorsto prepare financialstatementsfor each financialyear. Underthatlaw the directors have prepared the
financialstatements in accordance withUnitedKingdomGenerallyAccepted Accounting Practice (UnitedKingdomAccounting Standardsand
applicable law). Undercompany law the directorsmust not approve the financialstatementsunless they are satisfiedthatthey give a true and
fairview of the state of affairsof the Company and of the profitor loss of the Company for thatperiod. In preparingthese financialstatements,
the directors are requiredto:
•
•
•
•
select suitable accounting policies and then apply them consistently;
make judgements and estimates thatare reasonable and prudent;
state whetherapplicable UKAccounting Standardshave been followed, subject to any materialdeparturesdisclosed and explained in the
financialstatements;and
prepare the financialstatementson the going concern basis unless it is inappropriateto presume thatthe Company willcontinue in
business.
The directorsare responsible for keeping adequate accounting records thatare sufficientto show and explainthe Company's transactionsand
disclose with reasonable accuracy at any time the financialposition of the Company and enable them to ensure thatthe financialstatements
comply withthe Companies Act 2006. They are also responsible for safeguardingthe assets of the Company and hence for takingreasonable
steps for the preventionand detection of fraud and other irregularities.
Page 2
LS PROPERTY
FINANCE
COMPANY
LIMITED
IndependentAuditors' Reportto the Membersof LS PropertyFinanceCompanyLimitedfor the year ended I
31
I
I March2011
We have auditedthe financialstatementsof LS PropertyFinance Company Limitedfor the year ended 31 March 2011 which comprise the Profit
and Loss Account, the Reconciliationof Movements in Total Shareholder's Funds, the Balance Sheet and the related notes. The financial
reportingframeworkthat has been applied in theirpreparationis applicable law and UnitedKingdomAccounting Standards (UnitedKingdom
GenerallyAccepted Accounting Practice).
Respective responsibilities of directors and auditors
As explained more fullyin the Directors'ResponsibilitiesStatement,the directors are responsible for the preparationof the financialstatements
and for being satisfiedthatthey give a true and fairview. Our responsibilityis to auditand express an opinion on the financialstatementsin
accordance withapplicable law and International
Standardson Auditing(UK and Ireland). Those standardsrequireus to comply withthe
AuditingPractices Board's EthicalStandardsfor Auditors.
This report,includingthe opinions, has been prepared for and only for the Company's members as a body in accordance withChapter3 of Part
16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibilityfor any other
purpose or to any other person to whom this reportis shown or intowhose hands it may come save where expressly agreed by our prior
consent in writing.
Scope of the audit of the financial statements
An auditinvolves obtainingevidence about the amounts and disclosures in the financialstatementssufficientto give reasonable assurance that
the financialstatementsare free from materialmisstatement,whether caused by fraudor error. This includes an assessment of: whetherthe
accounting policies are appropriateto the Company's circumstances and have been consistentlyapplied and adequately disclosed; the
reasonableness of significantaccountingestimates made by the directors; and the overall presentationof the financialstatements.
Opinion on financial statements
In our opinion the financialstatements:
•
•
•
give a true and fairview of the state of the Company's affairsas at 31 March2011 and of its profitfor the year then ended;
have been properlyprepared in accordance withthe UnitedKingdomGenerallyAccepted Accounting Practice; and
have been prepared in accordance withthe requirementsof the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the informationgiven in the Directors'Report for the financialyear for which the financialstatementsare prepared is consistent
withthe financialstatements.
Matters on which we are required to report by exception
We have nothingto report in respect of the followingmatterswhere the Companies Act 2006 requiresus to reportto you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept, or returnsadequate for our audithave not been received from branches not visitedby
us; or
the financialstatements are not in agreement withthe accounting records and returns;or
certaindisclosures of directors' remunerationspecified by law are not made; or
we have not received all the informationand explanationswe requirefor our audit.
John
(Senior StatutoryAuditor)
Por a 'd on behalf of PricewaterhouseCoopers LLP
Cherfered Accountants and StatutoryAuditors
London
20 December 2011
Page 3
LS PROPERTY
FINANCE
COMPANY
LIMITED
I Profit and Loss Account for the year ended 31 March 2011
Notes
Profit before interest and taxation
Interestreceivable and similarincome
Interestpayable and similarcharges
2011
£'000
2010
£'000
.
3
4
212,752
(212,048)
704
Profit on ordinary activities before taxation
Taxation
Profit for the financial year
226,132
(225,441)
691
(t97)
(193)
507
498
I Reconciliation of Movements in Total Shareholder's Funds for the year ended 31 March 2011
Notes
Profitfor the financialyear
2011
2010
£'000
£'000
507
498
507
498
Addition to shareholder's funds
Opening shareholder's funds
1,904
1,406
Closing shareholder's funds
2,411
1,904
All amounts arise from continuingoperations.
There is no difference between reported profitand historicalcost profiton ordinaryactivitiesbefore taxation.
There are no recognised gains or losses other thanthose shown in the Profitand Loss Account above.
Page 4
LS PROPERTY
FINANCE
COMPANY
LIMITED
I BalanceSheet as at 31 March2011
I
Notes
2011
2010
£'000
£'000
6
3,451,214
3,451,214
3,295,204
3,295,204
Current assets
Loans receivable
Debtors fallingdue withinone year
Cash at bank and in hand
6
7
23,514
37,698
19,063
80,275
299,631
48,394
79,079
427,104
Creditors: amounts falling due within one year
Loan payable
8
(23,514)
(54,350)
Fixed assets
Investments
Loan receivable
Other
Net current assets
Total assets less current liabilities
Creditors: amounts falling due after one year
Loan payable
Borrowings
10
Net assets
Capital and reserves
Called up share capital
Profitand loss account
Total shareholder's funds
11
12
(299,631)
(125,569)
2,411
1,904
3,453,625
3,297,108
(3,023,532)
(427,682)
(3,295,204)
2,411
1,904
2,411
1,904
2,411
1,904
The financialstatementson pages 4 to 8 were approved and authorisedfor issue by the board directorson 20 December 2011 and were signed
on its behalf by:
C MGill
Director
Page 5
LS PROPERTY
FINANCE
COMPANY
LIMITED
Notes to the financial statements for the year ended 31 March 2011
I 1. Accounting Policies
I
The financialstatementshave been prepared on the going concern basis, underthe historicalcost convention.
(a) Interest income and interest expense
Interestincome and interestexpense are recognised on an accruals basis by applyingthe effective interest rate which takes account of the
amortisationof finance costs over the termof the Loan note.
(b) Interest rate swaps
The Company uses interest rate swaps to help manage its interest rate risk, and cross-currency swaps to manage its currency risk. In
accordance with its treasurypolicy, the Company does not hold or issue derivativesfor tradingpurposes.
All derivativesare initiallyrecognised at fairvalue at the date the derivativeis entered into and are subsequently re-measured at fairvalue. The
gains or losses on derivativesare recognised in the income statementimmediately.
(c) Taxation
Taxationis charged at the corporationtax rate of 28%.
(d) Loans receivable / payable
Loan receivable / payable is recognised initiallyat fairvalue less attributabletransactioncosts. Subsequent to initialrecognition,loan receivable
/ payable is stated at amortised cost withany difference between the amount initiallyrecognised and redemptionvalue being recognised in the
profitand loss account over the period of the loan receivable / payable, using the effective interestmethod.
(e) Borrowings
Borrowingsare recognised initiallyat fair value less attributabletransactioncosts. Subsequent to initialrecognition, borrowings are stated at
amortised cost withany difference between the amount initiallyrecognised and redemptionvalue being recognised in the profitand loss account
over the period of the borrowings,using the effective interestmethod.
I 2. Management and administrative expenses
'1
(a) Management services
The Company had no employees duringthe year (2010: None). Managementservices were provided to the Company throughoutthe year by
Land Securities PropertiesLimited,which is a group undedaking.
(b) Directors' emoluments
The directors of the Company received no emoluments from LandSecurities PropertiesLimitedfor theirservices to the Company. The amounts
allocated to services for this Companywere of negligiblevalue (2010: £Nil).
(c) Auditors' remuneration
The Group's auditors' remunerationis borne by Land Securities PropertiesLimited.The proportionof the remunerationwhich relates to the
Company amounts to £1,596 (2010: £1,520). The auditorsreceived no remunerationfor non-auditservices provided to the Company duringthe
year(2010:£Nil).
I 3. Interest receivable and similar income
I
2011
Bank interest
Amortisationof bond issue gains
Fairvalue gains on interestrate swaps
On an amount owing from a group undertaking
Other interestreceivable
2010
£'000
£'000
350
1,191
246
-
367
5,576
212,122
218,998
212,752
226,132
34
Page 6
LS PROPERTY
FINANCE
COMPANY
LIMITED
Notes to the financial statements for the year ended 31 March 2011
I 4. Interest payable and similar charges
J
2011
Borrowings
Amortisationof bond issue losses
Otherfinancingcosts
Fairvalue losses on interestrateswaps
On an amount owing to a group undertaking
2010
£'000
£'000
1,701
25,537
9,132
3,879
200,242
195,866
212,048
225,441
19
954
159
The interestrateswaps held by the Company do not qualifyfor hedge accounting, therefore, gains or losses are recognised in the Profitand
Loss Account.
J 5. Taxation
201t
Analysis of tax charge for the year
Corporationtax on profitfor the year
Tax charge on profit on ordinary activities
2010
£'000
£'000
197
197
193
193
Factors affecting the tax charge for the year
The currenttax charge for the year equates to the standardrate of corporationtax in the UK of 28%.
J 6. Loans receivable
J
2011
Amounts owed from Land Securities (Finance) Limited:
Amounts fallingdue withinone year
Amounts fallingdue aftermore than one year
2010
£'000
£'000
23,514
3,451,214
299,631
3,295,204
3,474,728
3,594,835
The unsecured loan to the group undertakingrelates to fixed rate Loan Notes and is repayable when the note it relates to is repaid. Interestis
charged at the interestrate on the related note plus 0.01%.
J 7. Debtors
J
2011
Corporationtax
Otherdebtors
Prepayments and accrued income
2010
£'000
£'000
310
18,868
18,520
37,698
187
26,059
22,148
48,394
I 8. Loans payable
2011
Amounts owed to LandSecuritiesCapitalMarketsPIc - due withinone year
- due aftermore than one year
2010
£'000
£'000
23,514
3,023,532
299,631
3,295,204
3,047,046
3,594,835
The unsecured loan to the group undertakingrelates to fixed rate Loan Notes and is repayable when the note it relatesto is repaid. Interestis
charged at the interestrate on the related note plus 0.01%
I 9. Creditors: amounts falling due within one year
j
2011
Fairvalue of derivativeinstruments
Amount owed to a group undertaking
Accruals
2010
£'000
£'000
2,029
32,878
19,443
54,350
1,075
98,417
26,077
125,569
Page 7
LS PROPERTY
FINANCE
COMPANY
LIMITED
Notes to the financial statements for the year ended 31 March 2011
I 10. Borrowings
I
2011
£'000
2010
£'000
(318)
Unamortisedissue (expenses) / gains
Syndicated bank debt
428,000
427,682
At 31 March2011, the Company has a £1.5bn authorisedcreditfacilitywith a legal finalmaturityof August 2013, of which £428m of the facility
was drawndown. The facilityis committedand is secured on the assets of the SecurityGroup. The interestrates are floatingat LIBORplus a
marginbetween 1.25% and 1.70%.
I 11. Calledup share capital
I
Allottedand fullypaid
2011
2010
Ordinaryshares of £ 1.00 each
£
£
100
100
I 12. Reserves
At 1 April2010
Profitfor the financialyear
At 31 March 2011
I
Called up
Share
Capital
£'000
Profitand
Loss
Account
£'000
Total
£'000
-
1,904
507
2,411
1,904
507
2,411
I 13. Post balance sheet event
I
On 3 May 2011, £23.5m, all of the remaining4.625 per cent Notes due 2013 were repaid.
I 14. Cash flow statement exemption
The Company is a wholly owned subsidiaryof Land SecuritiesGroup PLC which prepares a consolidated cash flow statement. The Company
has therefore elected to make use of the exemption provided in FinancialReportingStandard1 (revised 1996) "Cash Flow Statements"not to
produce its own cash flow statement.
I
I 15. Related party transactions
The Company is a whollyowned subsidiaryof Land Securities Group PLC and has taken advantage of the exemption provided in paragraph
3(c) of FinancialReportingStandard8 "Related Party Disclosures"not to make disclosure of transactionswithother entitiesthatare partof the
group.
[ 16, Parent company
The immediateparentcompany is Land Securities PLC.
The ultimateparentcompany at 31 March 2011 was Land SecuritiesGroup PLC, which is registered in Englandand Wales. This is the largest
parent company of the group to consolidate these financialstatements.
Consolidated financialstatementsfor the year ended 31 March2011 for Land SecuritiesGroup PLC can be obtained from the Company
Secretary, 5 Strand,London WC2N 5AF. This is the largest and smallestGroup to includethese accounts in its consolidated financial
statements.
Page 8