Crest Nicholson Holdings Annual Report (2010)

CREST NICHOLSON HOLDINGS LTD
DIRECTORS REPORT & ACCOUNTS

31st October 2010
COVER ELEMENTS, Epsom
PORT MARINE, Portishead
KEY PERFORMANCE INDICATORS
KEY PERFORMANCE
INDICATORS
Crest Nicholson is a leading developer of sustainable housing and mixed-use communities. We aim to
improve the quality of life for individuals and communities by providing better homes, workplaces, retail
and leisure spaces in which people aspire to live, work and play now and in the future.
47.3m
13,615
>99%
5-star
OPERATING PROFIT
(2009: (4.5m))
SHORT TERM
LANDBANK UNITS
(2009:12,823)
TIMBER SUPPLY
audited with WWF as
assured and legal*
CUSTOMER SERVICE
independent rating
27.5%
6,381m
62%
2 further
GROSS PROFIT MARGIN

(2009:13.9%)
LANDBANK GDV
(2009: 6,159m)
WASTE REDUCTION
to landfill since 2007
BUILDING FOR LIFE AWARDS

AND GOLD STANDARDS
27.9m
78%
33%
CASH FLOW
(2009: 101.9m)
HOMES BUILT ON
BROWNFIELD LAND*
(2009: 86%)
REDUCTION SINCE 2008

in Annual Injury
Incidence Rate
DIRECTORS REPORT & ACCOUNTS 2010 | 2
*Not included in the Directors Report forming part of

the Report and audited financial statements for the year
ended 31st October 2010.
Registered no. 6800600
PARK CENTRAL, Birmingham
CONTENTS
CONTENTS
Chairmans Statement
04
Chief Executives Review
05
Financial Review and

Directors Report
08
Sustainability Review
16
Statement of Directors Responsibilities 22
Independent Auditors Report
23
Consolidated Income Statement
24
Consolidated Statement of
Comprehensive Income
25
Changes in Equity
26
Financial Position
27
Consolidated Statement of Cash Flows 28

Notes to the Consolidated
Financial Statements
29
Company Balance Sheet
53
Notes to the Company

Financial Statements
54
CLARIDGE PARK, Milton Keynes
CHAIRMANS STATEMENT
CHAIRMANS STATEMENT
Following our decisive actions to ensure

the business survived the downturn,
Crest Nicholson successfully negotiated
with lenders to progressively reduce the
restrictions placed on it as a result of the
2009 restructuring.
This has facilitated a return to land buying
and a focus on regrowing the business.
These actions, along with the further steps
being taken by our principal shareholders,

provide a solid platform for future business
growth and profitability.
will ensure we have the right balance of

strategic strengths to drive
economic success.
The change of Government has resulted

in a pause as the sector develops its
understanding of the potential impact of
the comprehensive spending review and
changes in the planning system, and the
figures in this report illustrate the continued
loss of output across the industry.
We are encouraged by our results in what

has been a very challenging financial and
market environment and the Board pays
tribute to the hard work and commitment
of our employees, who ensured that
Crest Nicholson has robustly weathered the
economic downturn and emerged in good
shape to take advantage of opportunities
that arise.
The lack of mortgage finance, coupled

with uncertainties in the planning regime,
means there is hard work still to be done
to meet Government aspirations for
housing delivery.
Crest Nicholsons commitment to
excellence in design and constructive
dialogue with both regulatory and
community stakeholders, together with
our mission to put sustainability principles
and practice at the centre of our business,
Alan Goldman
Chairman
HARBOURSIDE, Bristol
CHIEF EXECUTIVES REVIEW

The tangible outcome of our business approach is high-quality new
developments that successfully balance economic, environmental and
social considerations to deliver an enduring contribution to the public
realm and peoples quality of life.
Our results
Our financial results reflect a year of
marked contrasts in the housing market.
After an encouraging first half, with better
than anticipated volumes and rising sale
prices, we saw public confidence reducing
after the General Election and ahead of
the Comprehensive Spending Review, as
prospective buyers confronted the challenges
of affordability, mortgage availability and
unemployment risks.
Against the backdrop of an uncertain market,
we have made real progress in improving
our financial position through close
collaboration with our banks and advisers,
building confidence by delivering on our
commitments. As a result, we were able
to re-enter the land market and secure

11 new sites in 2010.
We also continued to help first time buyers to
unlock financing through the Governments
HomeBuy Direct scheme and our own
EasyBuy scheme. These schemes supported
20% of our total sales volume this year.
The market
The heavily centralised planning system
of the last 20 years is considered by some
to be the major factor in non-delivery
of national housing targets set by the
previous Government, but macro-economic
constraints have also restricted output.
11 new sites
We were able to re-enter the
land market and secure 11 new
sites in 2010.
MERCHANTS QUAY, Gloucester
That said, the abandonment of regional

and national strategy and targets by the
new Government in favour of local
decision-making represents a radical
change whose impacts are yet to be fully
realised, particularly in terms of delivering
much-needed new sustainable housing.
Crest Nicholsons commitment to
socially and environmentally responsible
development positions us to take a proactive
role under this new localism agenda and
achieve successful planning outcomes. Our
understanding of and commitment to this
broad and complex arena, allied with our
ethos of quality design and construction,
will be even more significant differentiators
than they are today.
Indeed, there is a natural synergy between
good design, localism in planning and
sustainability. Good design must reference
the local landscape; local planning
demands a clear understanding of
community needs and consensus-building;
and sustainability is key to delivering
homes and communities for the
low-carbon economy. In all three areas,
Crest Nicholson is equipped to take a lead.
Viability issues remain a significant
challenge for our industry. For Government
to see the much-needed increase in
new homes there needs to be significant

structural change a more stable macroeconomic environment and a viable delivery
framework in which both developers and
buyers can feel more confident as well as
an improvement in mortgage availability.
Developing our business

The contribution of our employees is vital
to our future success and the exemplary
professionalism of our people in this
difficult year is fully appreciated. We have
made it a priority to invest in retaining
and developing skills in readiness for the
economic upturn. The health, safety and
wellbeing of staff and contractors and
everyone who comes into contact with
Crest Nicholson is of paramount
importance. In 2010, we continued a
positive trend by further reducing accidents
and injuries in our operations and I want
to see the bar raised even higher in
coming years as we work towards
exceptional performance.
Sustainability has for many years been
embedded in our business strategy and
operations and remains key to delivering
the desirable, low carbon homes of the
future. New ideas are fundamental to this,
since business innovation and sustainable
business are two sides of the same coin.
This is why we are investing significant time

and resources to partner with our supply
chain to develop groundbreaking products
and construction techniques through the
AIMC4 consortium.
We have placed the customer at the heart
of our journey, ensuring that innovations
and research place homeowners central to
achieving low carbon emission outcomes,
coupled with the development of desirable,
sustainable communities. In partnership
with CABE, the Group made a public
commitment that all new sites being
acquired will be reviewed against Building
for Life, with a view to achieving a minimum
Silver Standard across every single future
development site.
In partnership with CABE,

the Group made a public
commitment that all new sites
being acquired will be reviewed
against Building for Life, with
a view to achieving a minimum
Silver Standard across every
single future development site.
KALEIDOSCOPE, Cambridge
Our legacy in the built environment is the

true measure of the success of our delivery,
and we remain committed to excellence.
Awards
The breadth of our experience and the
skill base of our employees is continually
reflected in an increasing portfolio of
awards, these awards not only represent
the quality of our end product but also
the high standards that we endeavour to
achieve throughout the business.
We are proud to maintain our record as
holder of more Gold Building for Life
standards than any other developer and
this position was reinforced in 2010 with
the addition of Gold standards for
Avante, Coxheath and One Brighton,
Brighton. This success confirms our
commitment to ensuring that all our sites
undergo the rigorous quality assessment
around which BfL is framed.
Our focus on sustainable delivery has
ensured that we remain a consistent top
performer in the NextGeneration industry
benchmark and we were delighted that our
highly sustainable scheme Icon, Somerset,
was recognised as the overall winner in
the Housing Design Awards 2010. These
accolades firmly underpin the design

quality and sustainable ethos which
Crest Nicholson is striving to replicate
across its portfolio.
We remain privileged to be one of only two
developers to hold the Queens Award for
Enterprise in Sustainable Development.
Our people remain our greatest asset and
we were proud to achieve a regional and
national National Training Award for our
bespoke Sales Advisor training programme.
Furthermore, the priority given to achieving
the highest standards of health and safety
were recognised when seven of our
Site Managers, more than any other
developer, received NHBC Health & Safety
Awards and a further nine Site Managers
received NHBC Pride in the Job awards.
We continually strive to achieve our ultimate
goal of delivering outstanding customer
satisfaction and we are encouraged to
report that we achieved the highest 5 star
rating in the HBF Customer Satisfaction
survey, reflecting the ultimate accolade that
9/10 of our purchasers would recommend
Crest Nicholson to a friend.
Outlook
The volume of housing completions in
2011 is likely to be lower than in 2010,
as the impact of reduced land buying in
recent years and delayed operational
commencements designed to match
production with demand has temporarily
reduced the number of sales outlets from
which the business is operating.
In the short term, the business will continue
to face challenges with subdued prices
and lower volumes. Over the longer term,
the fundamentals of the housing market
remain strong, underpinned by a structural
imbalance between supply and demand.
The steps that have been taken to
restructure the operations and the finances
of the business, along with our continued
commitment to excel in the area of
sustainable development, provide a solid
platform for future profitability.
Stephen Stone
Chief Executive
INGRESS PARK, Greenhithe
BUSINESS REVIEW
FINANCIAL REVIEW & DIRECTORS REPORT

The Directors present their annual report with the consolidated accounts of the
company and its subsidiaries for the year ended 31st October 2010.
Principal activities
and business review
Principal Activity
During the year to 31st October 2010, the
principal activity of the Group was the
design and delivery of sustainable housing
and mixed use communities.
Results and Dividend1

Results for the financial year ended
31st October 2010 reflect a good trading

performance in the face of a subdued
housing market and an increasingly difficult
economic backdrop.
In the first half of the year in particular,
house prices recovered strongly,
underpinned by a shortage of properties
for sale. Stronger pricing has fed through
to improved gross margins, with housing
gross margin percentage rising to 15.5%
from 9.3% in 2009.
Open-market housing completions have

been maintained at a similar level to last
year, although the restricted availability of
mortgage finance has continued to be a
constraint on volumes.
The business has generated positive cash
flow in the year of 27.9m, (2009 101.9m),
with receipts including the benefits from
higher pricing accompanied by strong
controls over work-in-progress.
1
On 24th March 2009, Castle Bidco Ltd, the immediate parent company of Crest Nicholson PLC, was acquired by the company, as part of a financial restructure of the Crest Nicholson business. The company
became the ultimate parent company of Crest Nicholson PLC (Crest), which in turn owns the trading operations of the Group. Comparative figures for 2009 are thus for the period from 24th March 2009 to
31st October 2009.
Year-on-year comparatives for Crest refer to the ongoing trading operations of the Group.
BOLNORE VILLAGE, Haywards Heath
BUSINESS REVIEW
Group profits before financing costs,

share of profits from joint ventures and
tax were 47.3m (2009 Loss of 4.5m).
The 2009 result included an exceptional
item of 18.7m, being an impairment of
the element of goodwill arising on CNHLs
acquisition of Castle Bidco Limited which
was not supported by expected future
cash flows.
After financing costs and taxation, The
Group recorded a loss of 27.6m (2009 loss
of 50.5m)
The Directors do not propose a dividend.
Financial Position
Following the financial restructuring of
the Crest Nicholson Holdings Limited
group in March 2009, the business has
been dependent for its working capital
requirements on funds provided to it
through senior bank facilities totalling
500 million, which are scheduled for
repayment in March 2012.
During the year, the Directors commenced
discussions with its lenders about a further
financial restructuring of the Group, to
increase the equity on the Group balance

sheet and extend bank facilities for a further
three to four years. After the balance
sheet date, Vrde Partners, together with
certain market associates and partners,
progressively acquired the debt of other
group lenders in order to facilitate a
financial restructuring of the Group.
At 23rd March 2011, Vrde Partners,
together with certain market associates and
partners, had control over more than 80% of
the senior debt of the Group, which enables
them to pursue the financial restructuring
of the Group, either by consent or through a
scheme of arrangement. The precise terms
of this restructuring have still to be agreed,
but draft and indicative terms include the
conversion of 359m of debt to equity,
restoring the Group balance sheet to a net
asset position, borrowing facilities being
made available to the Group on normal
commercial terms and the extension of
bank facilities through to 2015. The 359m
of debt conversion comprises 200m of
senior debt, 150m of subordinated PIK
debt and capitalized interest on the PIK
debt of 9m. Vrde Partners have written to
the Directors requesting that the company

works with them to achieve this significant
de-leveraging of the Group balance sheet.
The restructuring of the Group balance
sheet will put the Group on a more
sustainable financial footing and enable
it to pursue commercially attractive
opportunities as they arise.
47.3m
Group profits before financing
costs, share of profits from joint
ventures and tax
THE BEACON, Hindhead
BUSINESS REVIEW
The table below is an unaudited pro forma statement of consolidated net assets of the Group, which has been prepared to illustrate the
effect of the restructuring on the consolidated net assets of the company as if the restructuring had taken place on 31st October 2010.
Group net assets
at 31st October
2010
m
Amortization of
bank debt
fair valuation
discount
m
Debt conversion
Proforma net
assets of the
Group at 31st
October 2010
m
ASSETS
57.8
57.8
Current assets
531.3
531.3
Total assets
589.1
589.1
Non-current assets
LIABILITIES
Non-current liabilities
(507.6)
Current liabilities
(180.5)
Total liabilities
(688.1)
(87.3)
358.9
(416.5)
(99.0)
(87.3)
358.9
172.6
NET (LIABILITIES)/ASSETS
(87.3)
358.9
(236.0)
(180.5)
Note: this unaudited pro forma statement of net assets has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation
and does not represent the actual financial position or results of the Group at that date. The proforma illustrates only the impact of debt conversion and does not
include any other adjustments that may arise.
THE ACADEMY, Kilburn
BUSINESS REVIEW
Housing
Mixed Use Commercial
Total Crest housing completions in 2010

were 1,609 units, down 14.3% on the
1,878 completions achieved in 2009. Open
market completions of 1,330 (2009 1,365)
were down 2.6%, whereas completions of
affordable units were down 45.6% to 279
(2009 513). The lower number of affordable
unit completions was in part a consequence
of a hiatus in new site starts resulting from
the terms of the March 2009 restructuring,
under which a number of sites were
temporarily mothballed.
Conditions in the commercial property

market continue to be subdued and
revenues recognised in the year primarily
relate to sales at our Park Central
development in Birmingham.
The average sale price was 187k, up 13.3%

on the 165k recorded in 2009 reflective
both of improved pricing and the lower
number of affordable units in the 2010
housing mix.
Forward sales for 2011 and later years
amounted to 99.1m (2009 165.7m),
which includes c.20% of 2011 open market
housing sales (2009 37%).
Margins
Group gross profit margin for the period
was 27.5% (2009 13.9%), after sales and
marketing costs. Stronger pricing in the
year has underpinned this improvement,
supported by controls over the levels of
stock and work-in-progress which have
averted any need for excessive discounting.
The business has continued to maintain a
focus on cost savings and efficiencies and
has where appropriate re-negotiated
certain of its development agreements to
secure viable margins.
27.5%
Group gross profit margin for
the period, after sales and
marketing costs.
PAPERMILL WALK, Ingress Park
BUSINESS REVIEW
Land Bank
The Groups contracted land bank is summarised in terms of units and gross development
value as follows:
2010
Units
Short term housing
2009
GDV m
Units
GDV m
13,615
2,605
12,823
2,375
281
335
Total short term
13,615
2,886
12,823
2,710
Strategic land
16,726
3,495
18,330
3,449
Total under contract
30,341
6,381
31,153
6,159
Short term commercial
The short term housing land bank has

increased by 792 plots in the year, as the
Group has re-commenced land buying
after a hiatus during the worst part of the
housing market downturn and converted
a number of plots from the strategic land
bank during the year. The Group continues
to seek benefits from re-planning sites
where appropriate, to adopt a product
mix more suited to the current sales
environment and to secure greater
flexibility on timing of production.
At the 2010 level of Crest turnover, the
short term housing portfolio represents
over 8 years supply, although the growth
intentions for the business would result in

a lower figure. The Group also monitors
the number of selling outlets that it
has, to ensure that the business has an
appropriate number of sites open for sales
at any one time. This measure of land bank
width is a more pertinent guide to potential
future volumes and selective additional land
acquisitions are targeted to maintain the
optimum number of sales outlets.
Our strategic land bank continues to provide
a source of longer-term development
value as sites are converted to short term
portfolio at the prevailing market price.
The Group converted over 1,200 plots from

the strategic land bank during the year and
continues to promote a number of sites for
future development.
Donations
During the year the Group made donations
to charities of 2,000 (2009 2,000).
Employees have continued to support the
Groups nominated charity, The Variety Club
and raised 11,000 for this cause during the
year. There were no political donations made.
ADMIRALTY QUARTER, Portsmouth
BUSINESS REVIEW
RISKS AND
UNCERTAINTIES
Managing risk is a core element of
executive management; a risk management
framework must be proactive and dovetail
with normal business processes, to drive
business benefits.
Making it part of normal business

therefore means:
Having a hierarchy of risk assessments
Focusing on key risks
Linking the assessment of risks to
consequential actions
- Monitoring controls
- Developing mitigating actions
- Establishing ownership
Crest Nicholson operates a risk

management process with a key risks
matrix at Group Board, Divisional Boards,
and Business Improvement Workgroup
(functional) levels. The risk matrices
generated are reviewed and updated
at least annually and at any time when
significant new risks emerge.
The Audit Committee reports to the Board
and the external auditors perform controls
work as part of the annual audit.
BUSINESS REVIEW
The principal risks facing Crest Nicholson in 2011 include but are not limited to those set out in the table below:
AREA
RISK
MITIGATION
MACRO-ECONOMIC
CLIMATE
Consumer confidence is undermined by a

worsening of current economic conditions,
leading to a rise in unemployment and/or
pessimism about employment prospects
Keep economic environment under

review, to ensure the business can respond
appropriately to changes in trading conditions
MORTGAGE LENDING
Mortgage availability will continue to be

constrained, particularly for first time buyers
requiring higher loan-to-value products
Monitor lending product availability,

work to increase finance availability for
developments and seek to assist purchasers
through the use of schemes such as the
Governments HomeBuy Direct. Manage
cash flow by matching production to
finance availability.
PLANNING UNCERTAINTY
The introduction of principles of Localism

to planning matters is likely to cause
uncertainty and delay, as local authorities
weigh the benefits of housing development
against other pressures.
Develop understanding of the new

approach to planning, working closely
with key regulators and decision makers,
and incorporating planning environment
uncertainties into assessment of
land opportunities
RECRUITMENT &
RETENTION
Ability to recruit and retain staff with

the requisite skills to secure and deliver
sustainable developments which generate
appropriate returns
Ensure company is a desirable employer,

with competitive packages, clear career
progression, good communication, training
and review processes
REGULATION
Changes to Government Policy on housing

and planning gain, increasing regulation,
cost and delay will render schemes and land
buying unviable.
Monitor closely changes /proposed changes

in regulatory environment, and make
representations as necessary.
Ensure financial appraisals include new
regulatory cost assessments.
HEALTH, SAFETY
AND ENVIRONMENTAL
Injury to persons, potential loss of life,

serious damage to sites and environment.
Reputational damage and costs.
Executive Board leadership and scrutiny of

health, safety and environment. Dedicated
teams in place, comprehensive procedures
and controls.
Social and environmental risk are analysed in more detail in our comprehensive 2010 Sustainability Report, with a particular focus on the
business risks and opportunities associated with Climate Change.
HARBOURSIDE, Bristol
BUSINESS REVIEW
DIRECTORS
Directors during the year:
Mr S Stone
Mr D P Darby
(Resigned 19th January 2011)
Mr N C Tinker
Mr A I Goldman
Mr A M Coppel
Mr M G McCaig
Disclosure of information
to auditors
The Directors who held office at the date of
approval of this Directors report confirm
that, so far as they are each aware, there
is no relevant audit information of which
the companys auditors are unaware;
and each director has taken all the steps
that he ought to have taken as a director
to make himself aware of any relevant
audit information and to establish that
the companys auditors are aware of that
information.
Auditors
Pursuant to section 487 of the Companies
Act 2006, the auditors will be deemed to
be reappointed and KPMG Audit Plc will
therefore continue in office.
By Order of the Board
K M Maguire
Secretary
Crest House,
Pyrcroft Road,
Chertsey,
Surrey
KT16 9GN
18th April 2011
AVANTE, Coxheath
SUSTAINABILITY REVIEW
The most sustainable business is one that prospers and grows.
Our vision for sustainable communities is part of our core purpose
and sets us apart in our market. This year we continued to address
economic, regulatory and technical challenges and moved further
towards realising the full value of sustainability for our business.
Crest Nicholsons sustainability goals
relate directly to our business strategy
and priorities.
Our reputation as a company with a clear,
long-term vision founded on design and
quality has undoubtedly helped us to
maintain strong relationships with banks
and other stakeholders, particularly
over the last two challenging years. Our
proactive engagement with senior local
authority officers and councillors was a
real highlight this year, providing further
evidence that authorities do want to see
new housing and are looking for ways to
deliver it in sustainable ways.
In every local authority where we hold land,

we were able to talk openly and strategically
about delivery, share a common perspective
on the need for new, sustainable housing
and agree that there should be no
compromise on stretching sustainability
goals including lower carbon new homes.
All this must be balanced against other
community needs such as affordable
homes, local infrastructure and education.
That shared understanding also gave us a
basis for exploring viability challenges for
our industry.
Chris Tinker
Regeneration Chairman
Board Director responsible for Sustainability
BASE, Brentwood
Embedding sustainability thinking and

practice remains a priority. Indeed, 2010 has
seen a great deal of learning in many parts
of the business as technical challenges
have been met and surmounted from
the intricacies of the Governments SAP
calculation tool for energy efficiency design,
to the use of renewable energy.
We firmly believe that sustainability must be
part of our everyday culture. As a business,
we are linking the sustainability agenda
more comprehensively to commerciality
and viability, and revisiting our sustainability
goals and targets.
With business performance, innovation
and sustainability as key goals, we will
continue to participate actively in the AIMC4
consortium, now in its second year. This
is key to delivering the next generation
of sustainable homes cost-effectively in
volume, for which we need products and
build solutions suitable for the real-world
conditions of our industry and to meet our
customers needs.
We have also begun a strategic programme
to understand the performance of our
homes in practice both in terms of build
and customer interfaces and we were

delighted to be awarded a project for
Building Performance Evaluation in the
first such programme launched by the
Technology Strategy Board. The knowledge
from this work, and future programmes,
will ensure continuous improvement cycles
are embedded within Crest Nicholson,
not least to ensure that our homeowners
are able to realise in practice the
sustainability benefits we design into the
homes of the future.
Ultimately, it is with our customers that
we can take important steps to promote
sustainability. Putting aside the fact that the
sustainability value of new homes is still
not fully recognised in the market we can,
and must, make sustainability real for our
customers and our business.
As an industry and as a company we need
to translate customer satisfaction into
inspiring communication, engaging all our
customers in the true benefits of designing
and building for lower carbon, more
sustainable lifestyles.
Customers at one of our Sales and Marketing Suites
KEEPING THE CUSTOMER AT THE

HEART OF THE BUSINESS
Delivering aspirational homes of the future which also deliver
real reductions in carbon emissions means putting the
customer at the heart of everything we do.
In a difficult market, it has been more important than ever to deliver homes of
the highest quality, to ensure we understand our customers needs and to bring
desirable homes to market in the right place at the right price.
As an industry, and as a company, we need to translate customer satisfaction
into inspiring communication, engaging all our customers in the true benefits of
designing and building for lower carbon, more sustainable lifestyles.
Delivering excellence in
customer service
For the second year a 5-star rating
for customer satisfaction in the HBF
independent survey.
96% of our customers would recommend
Crest Nicholson to a friend.
Ensuring the sustainable

homes of the future are
customer focussed
Testing new products and technologies
with Focus Groups.
A long term programme of
Post-occupancy feedback to drive
customer centric innovation.
96%
of our customers would
recommend Crest Nicholson
to a friend
Continuously improving our

handover, induction processes and
homeowner guides.
Working with the Zero Carbon Hub
on Customer Engagement: making
sustainability benefits a homeowner reality.
Working with lenders to drive added value
for sustainability features.
Included in the Sustainability Review is some commentary which was not included in the Directors Report forming part of the
Report and audited financial statements for the year ended 31st October 2010.
AVANTE, Coxheath
DELIVERING SUSTAINABLE
COMMUNITIES
There is much debate around what makes a sustainable
community. Many complex and sometimes conflicting
issues must be carefully balanced in order to create a truly
sustainable community.
A sustainable community is a place that adds to quality of life and stability. It
provides homes with a range of types and tenure that match current lifestyles, but
that can also adapt to changing needs. It will have been created with respect for
the local environment both in terms of the built form and how it supports people
in leading more sustainable lifestyles. It must be well integrated within the locality,
especially in terms of design and character, notwithstanding the need for good
access to transport and other services.
Fundamentally, its a place that can stand the test of time because it is planned,
designed, built and maintained to high standards responding to local community
needs and aspirations and with the long-term future in mind.
Responding to local needs

In-depth consultation, along with detailed
planning and design, ensure we offer
housing choice and a suitable mix of
tenure which will create neighbourhoods
that cater for a wide range of households
and socio-economic groups.
A strategy to understand how our

homes perform and embed new
continuous improvement cycles
A Building Performance Evaluation
(BPE) Strategy to understand the actual
performance of our homes once built and
occupied.
With Oxford Brookes University, we
successfully bid for a Building Performance
Evaluation project in the first such
programme launched by the Technology
Strategy Board.
Delivering responsibly and with

care and consideration
An average score of 33 in the Considerate
Constructors Scheme against the Best
Practice level of 32.
Building for Life

All new schemes will target silver standard

as a minimum.
ICON, Street
LOW CARBON HOMES

FOR THE FUTURE
Embedding sustainability thinking and practice to be part of
our everyday culture remains a priority. New ideas are key to
this, since business innovation and sustainable business are
two sides of the same coin.
Delivery
Over half our homes met EcoHomes or Code
for Sustainable Homes standards, and all were
designed to Code 4.
Innovation
We continued to drive innovation in cost effective
low carbon homes via the AIMC4 Consortium.
Regulations
The UKs stretching carbon reduction targets are a significant challenge for the
design and development of new homes, with technical definitions such as
Zero Carbon and Carbon Compliance still evolving.
Over 99%
Of our timber supply is audited
by WWF as legally sourced, to FSC
or PEFC standards.
We work closely with Regulators, Trade

associations, NGOs and experts to understand
and influence developing regulation. We contribute
to Government Advisory Groups, are part of the
Zero Carbon Hub Workgroups, and are members
of the UKGBC.
Measurement and continuous

improvement
We set targets for reduction in carbon emissions
through energy and water use, and have a focus on
resource management and elimination of waste.
We report our carbon footprint annually according
to the GHG Protocol, our data is externally assured.
www.crestnicholson.com/reports.
Responsible Procurement
We implement a sustainable procurement policy,
sharing the journey with our suppliers to provide
value, quality and demonstrate that their approach
is environmentally responsible.
Over 99% of our timber supply is audited as legally

sourced, 62% to FSC standards, and assured
through our membership of the World Wildlife Fund,
Forest Trade Network.
Site Managers at Avante, Coxheath
A RESPONSIBLE
AND ETHICAL BUSINESS
Developing expertise
The contribution of our employees is vital to our future success

and the exemplary professionalism of our people in this
difficult year is fully appreciated. We have made it a priority to
invest in retaining and developing skills in readiness for the
economic upturn.
Certification Scheme
12 hours of training per employee.

100% carded: employees and
sub-contractors - Construction Skills .
26 new Apprentices
4 new Graduates
Health and safety for all

33% reduction in annual injury incidence
rate since 2008
Our employees talents and skills play

a pivotal part in building a sustainable
business, and we have made it a priority
to invest in developing the expertise of
frontline teams.
Our approach to managing health and
safety is focused on risk reduction,
regular monitoring, behavioural based
procedures and training, and continuous
improvement. We are raising the bar
even higher in coming years as we work
towards exceptional performance in
health and safety.
As a responsible business we focus on

reducing our own carbon emissions,
and publish a Climate Change report
annually. What can be measured
can be managed and we continue to
invest in capturing key information to
understand and reduce our full carbon
footprint. We apply this approach
to resource conservation waste
is surplus material and a major
contributor to the construction industry
carbon emissions.
Zero complaints, prosecutions and fines

194 days of health and safety training
completed
All Sales Advisors now carry personal
safety devices and receive training and
safety measures through the Suzy
Lamplugh Trust.
Reducing our carbon

emissions
Targeting a 25% reduction by 2020 over
2007 levels
Develop a quantitative assessment
picture of our full carbon footprint
Conserving resources
Achieved the 2008 WRAP target
Halving waste to Landfill by 2011.
84% Construction waste recycled in 2010.
Achieved 62% reduction in construction

waste to landfill since 2007
WHITELANDS PARK, Putney
STATEMENT OF DIRECTORS RESPONSIBILITIES
STATEMENT OF DIRECTORS RESPONSIBILITIES

IN RESPECT OF THE DIRECTORS REPORT AND THE FINANCIAL STATEMENTS
The Directors are responsible
for preparing the Directors
Report and the Group and parent
company financial statements in
accordance with applicable law
and regulations.
Company law requires the Directors
to prepare Group and parent company
financial statements for each financial
year. Under that law they have elected to
prepare the Group financial statements
in accordance with IFRSs as adopted by
the EU and applicable law and have
elected to prepare the parent company
financial statements in accordance
with UK Accounting Standards and
applicable law (UK Generally Accepted
Accounting Practice).
Under company law the Directors must not

approve the financial statements unless
they are satisfied that they give a true and
fair view of the state of affairs of the Group
and parent company and of their profit or
loss for that period. In preparing each of
the Group and parent company financial
statements, the Directors are required to:
select suitable accounting policies and
then apply them consistently;
make judgments and estimates that are
reasonable and prudent;
for the Group financial statements, state
whether they have been prepared in
accordance with IFRSs as adopted by
the EU;
for the parent company financial
statements, state whether applicable
UK Accounting Standards have been
followed, subject to any material
departures disclosed and explained in the
financial statements; and
prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the Group
and the parent company will continue
in business.
The Directors are responsible for keeping

adequate accounting records that are
sufficient to show and explain the parent
companys transactions and disclose
with reasonable accuracy at any time the
financial position of the parent company
and enable them to ensure that its financial
statements comply with the Companies Act
2006. They have general responsibility for
taking such steps as are reasonably open
to them to safeguard the assets of the
Group and to prevent and detect fraud and
other irregularities.
The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on
the companys website. Legislation in
the UK governing the preparation and
dissemination of financial statements may
differ from legislation in other jurisdictions.
INDEPENDENT AUDITORS REPORT
INDEPENDENT AUDITORS REPORT

TO THE MEMBERS OF CREST NICHOLSON HOLDINGS LIMITED
We have audited the financial statements
of Crest Nicholson Holdings Limited
for the year ended 31 October 2010 set
out on pages 24 to 56. The financial
reporting framework that has been
applied in the preparation of the Group
financial statements is applicable law and
International Financial Reporting Standards
(IFRSs) as adopted by the EU. The financial
reporting framework that has been applied
in the preparation of the parent company
financial statements is applicable law and
UK Accounting Standards (UK Generally
Accepted Accounting Practice).
This report is made solely to the companys
members, as a body, in accordance with
Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken
so that we might state to the companys
members those matters we are required
to state to them in an auditors report and
for no other purpose. To the fullest extent
permitted by law, we do not accept or
assume responsibility to anyone other than
the company and the companys members,
as a body, for our audit work, for this report,
or for the opinions we have formed.
Respective responsibilities
of Directors and Auditors
As explained more fully in the Directors
Responsibilities Statement set out on page
22, the Directors are responsible for the
preparation of the financial statements
and for being satisfied that they give a true
and fair view. Our responsibility is to audit,
and express an opinion on, the financial
statements in accordance with applicable
law and International Standards on Auditing
(UK and Ireland). Those standards require
us to comply with the Auditing Practices
Boards (APBs) Ethical Standards
for Auditors.
Scope of the audit of the

financial statements
Matters on which we are

required to report by exception
A description of the scope of an audit of

financial statements is provided on the
APBs web-site at www.frc.org.uk/apb/
scope/UKNP.
We have nothing to report in respect of

the following matters where the Companies
Act 2006 requires us to report to you if, in
our opinion:
Opinion on financial statements

In our opinion:
the financial statements give a true and
fair view of the state of the Groups and
of the parent companys affairs as at 31
October 2010 and of the Groups loss for
the year then ended;
the Group financial statements have been
properly prepared in accordance with
IFRSs as adopted by the EU;
the parent company financial statements
have been properly prepared in
accordance with UK Generally Accepted
Accounting Practice;
the financial statements have been
prepared in accordance with the
requirements of the Companies Act 2006.
Opinion on other matter

prescribed by the Companies
Act 2006
In our opinion the information given in the
Directors Report for the financial year for
which the financial statements are prepared
is consistent with the financial statements.
adequate accounting records have not

been kept by the parent company, or
returns adequate for our audit have not
been received from branches not visited
by us; or
the parent company financial statements
are not in agreement with the accounting
records and returns; or
certain disclosures of Directors
remuneration specified by law are not
made; or
we have not received all the information
and explanations we require for our audit.
W E J Holland (Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc,
Statutory Auditor
Chartered Accountants
15 Canada Square,
London
E14 5GL
18th April 2011
ACCOUNTS
CONSOLIDATED INCOME STATEMENT

For year ended 31st October 2010
Note
Revenue continuing activities
Cost of sales
Gross profit
Year ended
31st October 2010
m
Period ended
31st October 2009
m
284.4
238.2
(206.3)
(205.2)
78.1
33.0
(31.0)
(19.1)
Administrative expenses:
-
Administrative expenses
Exceptional charge
Other operating income
(18.7)
(31.0)
(37.8)
0.2
0.3
Operating profit/(loss)
47.3
(4.5)
Financial income
8.2
4.7
Bank finance costs:

-
Nominal bank interest charges
(14.1)
(10.5)
Amortisation of bank debt fair value discount
(61.5)
(35.7)
(75.6)
(46.2)
(8.8)
(5.5)
(76.2)
(47.0)
1.5
0.8
(27.4)
(50.7)
(0.2)
0.2
(27.6)
(50.5)
Other financial expenses

Net financing expense
Share of profit of associates and jointly controlled entities using the equity
accounting method, net of tax
Loss before tax
Income tax
Loss for the year/period attributable to equity shareholders

The notes on pages 29 to 52 form part of these financial statements.
ACCOUNTS
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
Year ended
31st October 2010
m
Period ended
31st October 2009
m
(27.6)
(50.5)
Cash flow hedges: effective portion of changes in fair value
(0.2)
0.2
Actuarial gain/(losses) on defined benefit pension schemes
6.2
(27.3)
Change in fair value of available for sale assets
0.2
Other comprehensive income for the year/period, net of income tax
6.2
(27.1)
(21.4)
(77.6)
Loss for the year/period
Other comprehensive income:
Total comprehensive income attributable to equity shareholders

ACCOUNTS
OF CHANGES IN EQUITY
Share
capital
m
Cash flow
hedging
reserve
m
Retained
earnings
Total
(50.5)
(50.5)
Loss for the period
Shares issued (100)
Actuarial loss on pension scheme
0.2
Balance at 31 October 2009
0.2
(77.8)
(77.6)
Loss for the year
(27.6)
(27.6)
Actuarial gain on pension scheme
6.2
6.2
(0.2)
(0.2)
Change in fair value of available for sale asset
0.2
0.2
Balance at 31 October 2010
(99.0)
(99.0)
st
st
(27.3)
-
(27.3)
0.2
ACCOUNTS
OF FINANCIAL POSITION
at 31st October 2010
Note
2010
m
2009
m
ASSETS
Non-current assets
9
29.0
29.0
Property, plant and equipment
10
4.0
4.8
Investments
11
3.7
11.2
Available for sale assets
12
21.1
57.8
14.6
59.6
Inventories
13
361.9
386.0
Trade and other receivables
14
39.6
41.5
129.8
531.3
101.9
529.4
589.1
589.0
Intangible assets
Current assets
Cash and cash equivalents
Total assets
LIABILITIES
Non-current liabilities
Interest bearing loans and borrowings
15
(433.7)
(367.5)
Trade and other payables
16
(25.0)
(36.6)
Retirement benefit obligations
21
(36.1)
(46.1)
Provisions
18
(12.8)
(17.9)
(507.6)
(468.1)
Current liabilities
Trade and other payables
16
(174.0)
(195.1)
Provisions
18
(6.5)
(3.4)
(180.5)
(198.5)
Total liabilities
(688.1)
(666.6)
Net liabilities
(99.0)
(77.6)
SHAREHOLDERS EQUITY
Share capital
Retained earnings
Total deficit attributable to equity shareholders
(99.0)
(77.6)
(99.0)
(77.6)

These financial statements were approved by the Board of Directors on 18th April 2011 and were signed on its behalf by:
S Stone
N C Tinker
Directors
ACCOUNTS
OF CASH FLOWS
Cash flows from operating activities

Loss for the year/period
Adjustments for:
Depreciation charge
Loss on disposal of fixed assets
Impairment of goodwill
Net finance charges
Share of profit of joint ventures
Taxation
Operating profit before changes in working capital and provisions
Decrease/ (increase) in trade and other receivables
Decrease in inventories
(Decrease)/increase in trade and other payables
Cash generated from operations
Year ended
31st October 2010
Period ended
31st October 2009
(27.0)
(50.5)
1.2
75.6
(1.5)
0.2
0.7
0.1
18.7
47.0
(0.8)
(0.2)
48.5
15.0
1.9
24.1
(36.4)
(4.7)
81.4
9.4
38.1
101.1
(10.8)
(6.2)
Net cash from operating activities
27.3
94.9
Cash flows from investing activities

Acquisition of subsidiary, net of cash acquired
Proceeds from sales of property, plant and equipment
Purchases of property, plant and equipment
Loans to joint ventures
Increase in available for sale assets
Net cash from investing activities
(0.4)
7.9
(6.3)
1.2
15.4
0.1
(0.2)
(0.9)
(5.9)
8.5
Cash flows from financing activities

Net proceeds from the issue of share capital
Debt arrangement & facility fees
Net cash flow from financing activities
(0.6)
(0.6)
(1.5)
(1.5)
Interest paid
Net increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at end of the period
27.9
101.9
129.8
101.9
101.9
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED

FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
Crest Nicholson Holdings Limited
(the company) is a company
incorporated in the UK.
The Group financial statements consolidate
those of the company and its subsidiaries
(together referred to as the Group) and
include the Groups interest in associates
and jointly controlled entities. The parent
company financial statements present
information about the company as a
separate entity and not about its group.
The Group financial statements have been
prepared and approved by the Directors
in accordance with International Financial
Reporting Standards as adopted by the
EU (Adopted IFRSs). The company has
elected to prepare its parent company
financial statements in accordance
with UK GAAP; these are presented on
pages 53 to 56.
The accounting policies set out below have,
unless otherwise stated, been applied
consistently to all periods presented in
these Group financial statements.
Judgements made by the Directors, in the
application of these accounting policies
that have significant effect on the financial
statements and estimates with a significant
risk of material adjustment in the next year
are discussed in note 26.
Measurement convention
The financial statements are prepared
in accordance with the historical cost
convention, except for certain financial
instruments and available for sale assets,
which are carried at fair value.
Basis of preparation
going concern
Following the financial restructuring of
the Crest Nicholson Holdings Limited
group in March 2009, the business has
been dependent for its working capital
requirements on funds provided to it
through senior bank facilities totalling
500 million, which are scheduled for
repayment in March 2012. The Directors
have prepared cash flow projections for the
period to maturity of the senior facilities
in March 2012, which show that the Group
is capable of operating within the bank
facilities currently available and meeting
the financial covenant tests. The nature
of the Groups business is such that there
can be unpredictable variations in the
timing of cash inflows and performance.
The Directors recognise that in the
current economic environment, risks exist
regarding the amount and timing of cash
flows from future sales and future building
costs and have considered the effect of
reasonably possible variations on their
ability to trade.
During the year, the Directors commenced
discussions with its lenders about a further
financial restructuring of the Group, to
increase the equity on the Group balance
sheet and extend bank facilities for a further
three to four years. After the balance
sheet date, Vrde Partners, together with
certain market associates and partners,
progressively acquired the debt of other
group lenders in order to facilitate a
financial restructuring of the Group.
At 23rd March 2011, Vrde Partners,

together with certain market associates and
partners, had control over more than 80% of
the senior debt of the Group, which enables
them to pursue the financial restructuring
of the Group, either by consent or through a
scheme of arrangement. The precise terms
of this restructuring have still to be agreed,
but draft and indicative terms include the
conversion of 350m to equity, restoring the
Group balance sheet to a net asset position,
borrowing facilities being made available
to the Group on normal commercial terms
and the extension of bank facilities through
to 2015. Vrde Partners have written to
the Directors requesting that the company
works with them to achieve this significant
de-leveraging of the Group balance sheet.
At the accounts signature date, the financial
restructuring of the Group has not been
concluded, but the Directors are satisfied,
having regard to current circumstances,
that there is a reasonable expectation
that the Group has adequate resources to
continue in operational existence for the
foreseeable future. For these reasons, the
Directors consider it appropriate to prepare
the financial statements of the Group on
a going concern basis. These financial
statements do not include any adjustments
that would result from the going concern
basis of preparation being inappropriate.
Consolidation
The consolidated accounts include the
accounts of Crest Nicholson Holdings
Limited and entities controlled by the
company (its subsidiaries) at the reporting
date. Control is achieved where the
company has the power to govern the
financial and operating policies of an entity
so as to obtain benefits from its activities.
The profits and losses of subsidiaries
acquired or sold during the year are
included as from or up to their effective
date of acquisition or disposal.
On acquisition of a subsidiary, all of the
subsidiarys separable, identifiable assets
and liabilities existing at the date of
acquisition are recorded at their fair values
reflecting their condition at that date. All
changes to those assets and liabilities,
and the resulting gains and losses that
arise after the Group has gained control
of the subsidiary are charged to the post
acquisition income statement or statement
of recognised income and expense.
Goodwill
Goodwill arising on consolidation
represents the excess of the cost of
acquisition over the Groups interest in
the fair value of the identifiable assets
and liabilities of the acquired entity at the
date of the acquisition. Goodwill arising on
acquisition of subsidiaries and businesses
is capitalised as an asset. Goodwill
allocated to the strategic land holdings is
recognised as an asset, being the intrinsic
value within these holdings in the acquired
entities, which is realised upon satisfactory
planning permission being obtained and
sale of the land.
Goodwill is assessed for impairment at
each reporting date by performing a value
in use calculation, using a discount factor
based on the Groups pre-tax weighted
average cost of capital. It is tested by
reference to the proportion of legally
completed plots in the period compared to
the total plots which are expected to receive
satisfactory planning permission in the

remaining acquired strategic land holdings,
taking account of historic experience
and market conditions. Any impairment
loss is recognised immediately in the
income statement.
Joint ventures
A joint venture is an undertaking in which
the Group has a participating interest
and which is jointly controlled under a
contractual arrangement.
Where the joint venture involves the
establishment of a separate legal entity,
the Groups share of results of the joint
venture after tax is included in a single
line in the consolidated income statement
and its share of net assets is shown
in the consolidated balance sheet as
an investment.
Where the joint venture does not involve the
establishment of a legal entity, the Group
recognises its share of the jointly controlled
assets and liabilities and income and
expenditure on a line by line basis in the
balance sheet and income statement.
Revenue recognition
Revenue comprises the fair value of the
consideration received or receivable, net
of value-added tax, rebates and discounts
but excludes the sale of properties taken
in part exchange.
Revenue is recognised once the value of
the transaction can be reliably measured
and the significant risks and rewards of
ownership have been transferred.
Revenue is recognised on house sales at
legal completion. Revenue is recognised on
land sales and commercial property sales
from the point of unconditional exchange
of contracts. Where the conditions for the
recognition of revenue are met but the
Group still has significant acts to perform
under the terms of the contract, revenue is
recognised as the acts are performed.
Exceptional items
Exceptional items are those significant
items which are separately disclosed by
virtue of their size or incidence to enable
a full understanding of the Groups
financial performance.
Taxation
Income tax comprises current tax and
deferred tax. Income tax is recognised in
the income statement except to the extent
that it relates to items recognised directly
in equity, in which case it is also recognised
in equity.
Current tax is the expected tax payable
on taxable profit for the period and any
adjustment to tax payable in respect of
previous periods. The groups liability for
current tax is calculated using tax rates that
have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is provided on temporary
differences between the carrying amounts
of assets and liabilities in the financial
statements and the corresponding tax
bases used in the computation of taxable
profit. Deferred tax liabilities are recognised
for all taxable temporary differences, except
those exempted by the relevant accounting
standard, and deferred tax assets are
recognised to the extent that it is probable
that taxable profits will be available against
which deductible temporary differences
can be utilised.
Dividends
Dividends are recorded in the Groups
financial statements in the period in
which they are paid.
Property, plant and equipment
Inventories
Retirement benefit costs
Property, plant and equipment is initially

recognised at cost. Freehold land is not
depreciated.
Inventories are valued at the lower of cost

and net realisable value. Land includes land
under development, undeveloped land and
land option payments. Work in progress
comprises direct materials, labour costs,
site overheads, associated professional fees
and other attributable overheads.
The Group operates a defined benefit

pension scheme (closed to new employees)
and also makes payments into a defined
contribution scheme for employees.
Plant, vehicles and equipment are

depreciated on cost less residual value on a
straight line basis at rates varying between
10% and 33% determined by the expected
life of the assets.
Available for sale assets

These assets are initially recognised at
fair value. Changes in fair value relating
to the expected recoverable amount are
recognised in the income statement;
changes in fair value arising from a change
of discount factor are recognised directly in
equity, until the asset is divested.
On disposal of these assets, the
difference between the carrying value
and the consideration received plus
cumulative fair value movements previously
recognised in equity is recognised in the
income statement.
Leases
A finance lease is a lease that transfers
substantially all the risks and rewards
incidental to the ownership of an asset;
all other leases are operating leases.
Assets acquired under finance leases are
capitalised and the outstanding future
lease obligations are shown in creditors.
Operating lease rentals are charged to the
income statement on a straight line basis
over the period of the lease.
Land inventories and the associated land

creditors are recognised in the balance
sheet from the date of unconditional
exchange of contracts. If land is purchased
on deferred settlement terms then the
land and the land creditor are discounted
to their fair value. The land creditor is then
increased to the settlement value over
the period of financing, with the financing
element being charged as interest expense
through the income statement.
Cash and cash equivalents

Cash and cash equivalents are cash
balances in hand and in the bank. For the
purpose of the cash flow statement, bank
overdrafts are considered part of cash and
cash equivalents as they form an integral
part of the Groups cash management.
Offset arrangements across group
businesses are applied to arrive at the
net cash figure.
In respect of defined benefit schemes, the

net obligation is calculated by estimating
the amount of future benefit that employees
have earned in return for their service in
the current and prior periods, such benefits
measured at discounted present value,
less the fair value of the scheme assets.
The discount rate used to discount the
benefits accrued is the yield at the balance
sheet date on AA credit rated bonds that
have maturity dates approximating to
the terms of the Groups obligations. The
calculation is performed by a qualified
actuary using the projected unit method.
The operating and financing costs of such
plans are recognised separately in the
income statement; service costs are spread
systematically over the lives of employees
and financing costs are recognised in the
periods in which they arise.
The Group has applied the requirements
of IAS 19 (revised), recognising expected
scheme gains and losses via the income
statement and actuarial gains and losses
recognised in the period they occur
directly in equity through the statement of
recognised income and expense.
Payments to the defined contribution
schemes are accounted for on an
accruals basis.
Financial Instruments
Trade receivables
Trade receivables which do not carry any
interest are stated at their nominal amount
less impairment losses.
Trade payables
Trade payables are generally stated at
their nominal amount; land payables with
deferred settlement terms are recorded at
their fair value.
Borrowings
Interest bearing bank loans and overdrafts
are measured initially at fair value, net of
direct issue costs. Finance charges are
accounted for on an accruals basis in
the income statement using the effective
interest method and are added to the
carrying amount of the instrument to the
extent that they are not settled in the period
in which they arise or included within
interest accruals.
Derivative financial instruments and

hedge accounting
Derivative financial instruments are
recognised at fair value. The fair value of
swaps is the estimated amount that the
Group would receive or pay to terminate the
swap at the balance sheet date, taking into
account the current creditworthiness of the
swap counterparties.
Where the derivative instrument is deemed
an effective hedge over the exposure being
hedged, the derivative instrument is treated
as a hedge and hedge accounting applied.
Under a fair value hedge the change in the
fair value of the derivative is recognised
in the income statement and offsets the
movement in fair value of the hedged item.
Under a cash flow hedge, gains and losses
on the effective portion of the change in the
fair value of the derivative instrument are
recognised directly in equity.
Changes in the fair value of derivative

financial instruments that do not qualify for
hedge accounting and any ineffectiveness in
the hedge relationship are recognised in the
income statement as they arise.
Hedge accounting is discontinued when
the hedging instrument expires or is sold,
terminated or exercised, or no longer
qualifies for hedge accounting. At that
time, any cumulative gain or loss on the
hedging instrument recognised in reserves
is retained in reserves until the forecasted
transaction occurs. If a hedged transaction
is no longer expected to occur, the net
cumulative gain or loss recognised in
reserves is transferred to net profit or
loss for the period.
Provisions
A provision is recognised in the balance
sheet when the Group has a present legal
or constructive obligation as a result of a
past event and it is probable that an outflow
of economic benefits will be required to
settle the obligation. If the effect is material,
provisions are determined by discounting
the expected future cash flows at a
pre-tax rate that reflects current market
assessments of the time value of money
and, where appropriate, the risks specific
to the liability.
Impact of Standards and

Interpretations in issue but not
yet effective
Improvements to IFRSs were issued in
April 2009 and will be effective for the
Groups 2011 financial statements. These
amendments cover a range of standards
but the Directors do not anticipate any
material impact on the Group. These
amendments are not yet effective for
the period ended 31st October 2010 and
have not been applied in preparing these
consolidated financial statements.
2. REVENUE
There is no Group revenue in geographical
markets outside the United Kingdom.
No segmental information has been
presented as the Directors consider
that there is only one business and
geographical segment.
3. EXCEPTIONAL ITEM
There are no exceptional items in the
current year.
Following the acquisition of Castle Bidco
Limited by Crest Nicholson Holdings
Limited on 24th March 2009, the goodwill
arising on acquisition was assessed for
impairment. An exceptional impairment
charge of 18.7m was made in the period
ended 31st October 2009.
4. PROFIT/(LOSS) FROM OPERATIONS

Profit/(loss) from operations is stated after charging/(crediting) the items set out below:
Year ended
31st October 2010
m
Period ended
31st October
2009
m
25.4
15.8
0.1
1.2
0.7
Hire of plant and machinery
0.2
0.1
Other including land and buildings
4.1
2.5
000
000
36
61
112
114
34
21
Staff costs (Note 5)

Net loss on disposal of property, plant & equipment
Depreciation
Operating lease rentals:
Auditors remuneration:
Audit of these financial statements
Audit of financial statements of subsidiaries pursuant to legislation
Other services relating to taxation
In addition to the Auditors remuneration disclosed above, fees of 2,000 (2009 7,000) were paid to the Groups auditors by the
Crest Nicholson Money Purchase pension scheme in respect of the audit of the scheme.
Amounts paid to the Companys auditor in respect of services to the Company, other than the audit of the Companys financial
statements, have not been disclosed as the information is required instead to be disclosed on a consolidated basis.
5. STAFF NUMBERS & COSTS
Average number of persons employed by the Group

Development
Head office
Staff costs
Wages and salaries
Social security costs
Other pension costs
Year ended
31st October 2010
Period ended
31st October 2009
Number
Number
453
456
11
11
464
467
m
23.0
2.7
(0.1)
m
13.4
1.4
1.0
25.6
15.8
Key Management comprises the Main Board, as the Directors are considered to have the authority and responsibility for
planning, directing and controlling the activities of the Group. Details of Directors remuneration, pension and share based
payments are as follows:-
DIRECTORS REMUNERATION
Aggregate emoluments
Year ended
31st October 2010
Period ended
31st October 2009
000
000
1,915
871
Retirement benefits have accrued to three Directors under the Crest Nicholson defined benefit scheme. The aggregate
value of company contributions paid for Directors was 107,000 (2009 79,000).
Highest paid Director
Emoluments
Defined benefit scheme:
- Accrued pension at end of year
841
341
113
99
6. FINANCE INCOME & COSTS

Year ended
31st October 2010
Period ended
31st October 2009
Interest income
0.7
0.6
Imputed interest on available for sale assets
2.2
0.6
Expected return on defined benefit pension plan assets
5.3
3.5
Finance income
8.2
4.7
Finance costs
Year ended 31st October 2010

Nominal bank
interest charges
m
Amortisation of
bank debt fair
value discount
m
Bank Term loan Facility B
5.4
11.5
16.9
Bank Term loan Facility E
5.2
50.0
55.2
3.5
14.1
61.5
3.5
75.6
Imputed interest on deferred land creditors
1.5
1.5
Interest on defined benefit pension plan obligations
7.3
7.3
8.8
8.8
22.9
61.5
84.4
Other interest
Finance costs
Total
m
Period ended 31st October 2009

Nominal bank
interest charges
Total
Amortisation of
bank debt fair
value discount
m
Bank Term loan Facility B
5.2
6.6
11.8
Bank Term loan Facility E
3.7
29.1
32.8
1.6
10.5
35.7
1.6
46.2
Imputed interest on deferred land creditors
1.5
1.5
Interest on defined benefit pension plan obligations
4.0
4.0
5.5
5.5
16.0
35.7
51.7
Other interest
7. TAXATION
Year ended
31st October 2010
m
Period ended
31st October 2009
m
Current tax income

-
UK Corporation tax on profits for the period
(0.2)
Adjustment in respect of prior years
0.2
Total current tax
0.2
(0.2)
0.2
(0.2)
Deferred tax expense

Origination and reversal of temporary differences (Note 17)
Total tax in income statement
The total tax charge for the period is higher (2009 higher) than the standard rate of UK Corporation tax of 28%.
The differences are explained below:
m
(27.4)
(50.7)
(7.7)
(14.2)
Expenses not deductible for tax purposes
0.8
0.6
Adjustments to tax charge in respect of prior years
0.2
Deductible temporary differences not recognised
(1.3)
(0.4)
Loss before tax

Tax on Loss at 28% (2009 28%)
Effects of:
Land remediation tax credit
(0.2)
Stock fair value adjustment
(11.9)
(12.6)
Unrecognised tax losses
20.1
26.6
0.2
(0.2)
Total tax in income statement
8. DIVIDENDS
There were no distributions to equity shareholders in the year (2009 nil). No dividend has been proposed by the Directors
after the balance sheet date.
9. INTANGIBLE ASSETS
m
Total
Goodwill
Cost
At 23rd January 2009
Acquired through business combination
47.7
At 31st October 2009
47.7
47.7
Impairment
Impairment charge
(18.7)
(18.7)
(18.7)
Carrying value
29.0
At 31 October 2010
29.0
st
Goodwill arose on the acquisition of Castle Bidco Limited on 24th March 2009. Goodwill is allocated to acquired strategic land
holdings and is tested annually for impairment. The recoverable amounts are determined by assessing value in use, using a house
building sector weighted average cost of capital of 9.57% (2009 9.73%), covering a period of 22 years (being the minimum period that
management expects to benefit from the acquired strategic land holdings) and based on current market conditions.
10. PROPERTY, PLANT & EQUIPMENT

Total Plant, Vehicles
& Equipment
m
Cost
8.6
Additions
0.2
Disposals
(0.5)
8.3
Additions
0.4
8.7
Accumulated depreciation
3.1
Charged in the period
0.7
Disposals
(0.3)
3.5
Charged in the period
1.2
At 31 October 2010
4.7
st
Carrying value
4.8
At 31 October 2010
4.0
st
CONSOLIDATED
CHIEF EXECUTIVES
FINANCIAL STATEMENTS
REVIEW | 02
11. INVESTMENTS
Cost of
Investment
Loans
Share of Post
Acquisition
Reserves
m
Total
m
Joint ventures
4.4
(15.3)
(10.9)
Share of profit for the period
0.8
0.8
Additions
6.8
11.2
Re-classification (see note below)
6.8
(14.5)
(3.3)
13.4
13.4
Share of profit for the year
1.5
1.5
Additions
Repayments
(7.9)
(7.9)
3.3
0.4
3.7
The Group has a 50% interest in Crest/Galliford Try (Epsom) LLP, a Limited Liability partnership set up to develop three sites in Epsom.
The LLP purchased the land and is responsible for developing the infrastructure on the sites. The risks and rewards of development
will accrue to the development partners, Crest Nicholson and Galliford Try. Accordingly, fair value provisions of 13.4m acquired through
business combination are no longer shown as deductions from Investments but are classified as provisions of the Crest Nicholson Group.
At 31st October 2010, Crest/Galliford Try (Epsom) LLP had Capital Employed of 61m (2009 78m).
The Group has a 50% interest in Crest Nicholson Bioregional Quintain LLP, a Limited Liability partnership set up to develop a site in
Brighton. The site was substantially completed during the year; at 31st October 2010, Crest Nicholson Bioregional Quintain LLP had Capital
Employed of 3.4m (2009 15m).
The Group owns 500 ordinary shares of 1 each representing 50% of the issued share capital of Brentford Lock Limited, a company
registered in England, which was set up to redevelop a site in West London. The site was completed and all units sold in 2006. At
31st October 2010, 3m was due from Crest Nicholson Operations Limited to Brentford Lock Limited, pending declaration of a final
dividend (2009 3m).
Subsidiary undertakings
The subsidiary undertakings which are significant to the Group and traded during the period are set out below. The Groups interest is in
respect of ordinary issued share capital which is wholly owned and all the subsidiary undertakings are incorporated in Great Britain and
included in the consolidated financial statements.
Subsidiary
Nature of Business
Castle Bidco Limited
Holding company
Crest Nicholson PLC
Holding company
Crest Nicholson Operations Limited
Residential and
commercial property
development
12. AVAILABLE FOR SALE ASSETS

m
8.3
Additions
6.0
Disposals
(0.1)
Change in fair value
0.4
14.6
Additions
6.5
Disposals
(0.2)
Change in fair value
0.2
At 31 October 2010
21.1
st
Crest Nicholson operates an Easybuy scheme, under which up to 25% of the purchase price of selected properties is funded through
a loan from the Group, secured on the property. The Group retains a percentage interest in the market value of the property equal to
the initial percentage of the loan provided. These loans are repayable at the relevant percentage of the market value of the property
upon sale or transfer of ownership of the property or within 10 years, whichever is sooner. The purchaser also has an option to repay
the loan earlier than would otherwise be required, subject to a market valuation of the property. Interest is payable on the outstanding
balance from the fifth anniversary of the purchase.
Crest Nicholson has also participated in the Governments HomeBuy Direct scheme, under which up to 30% of the purchase price
of selected properties was funded through loans of up to 15% each from the Group and from the Homes and Communities Agency,
secured on the property. The Group retains an interest in the market value of the property equal to the initial percentage of the loan
provided. These loans are repayable at the relevant percentage of the market value of the property upon sale or transfer of ownership
of the property or within 25 years, whichever is sooner. The purchaser also has an option to repay the loan earlier than would otherwise
be required, subject to a market valuation of the property. Interest is payable on the outstanding balance from the fifth anniversary of
the purchase.
Available for sale assets are held at fair value. The Directors believe that there is sufficient relevant expertise within the Group to
perform this valuation.
13. INVENTORIES
Work in progress: land, building and development

Completed buildings including show houses
2010
m
2009
m
314.9
338.2
47.0
47.8
361.9
386.0
Included within inventories is 223.4m (2009 235.7m) expected to be recovered in more than 12 months. Inventories to the value of
190.0m (2009 185.3m) were recognised as expenses in the period.
14. TRADE AND OTHER RECEIVABLES

2010
m
2009
m
Current
8.7
10.1
16.5
23.3
Due from associate
9.4
0.1
Other receivables
3.9
5.3
Trade receivables
Recoverable on contracts
1.5
1.1
1.2
39.6
41.5
2010
m
2009
m
Term loans
418.5
349.3
Other loans
12.1
12.6
Loan notes
3.1
5.6
433.7
367.5
2010
m
2009
m
21.5
32.1
3.5
4.5
25.0
36.6
Land payables on contractual terms
24.0
40.7
Other trade payables
19.2
19.6
Payments on account
28.2
22.7
Due to associates
0.9
0.2
Other taxes and social security costs
1.0
1.0
Other payables
24.9
33.9
Accruals
75.8
77.0
174.0
195.1
Interest rate cap

Prepayments and accrued income
15. INTEREST BEARING LOANS AND BORROWINGS
Non-current
16. TRADE AND OTHER PAYABLES
Non-current
Land payables on contractual terms
Accruals
Current
17. DEFERRED TAX ASSETS

Deferred tax assets are recognised to the extent that the realisation of the related tax benefit through future taxable profits is
probable. The company did not recognise deferred tax assets of 53.0m (2009 36.9m) in respect of losses amounting to
196.4m (2009 131.7m) that can be carried forward against future taxable income. The Company did not recognise other deferred
tax assets of 10.4m (2009 15.1m), in relation to retirement benefit obligations 9.7m (2009 12.9m), and 0.7m (2009 2.2m) other
timing differences.
18. PROVISIONS
Rental
and other
obligations
in respect
of vacant
properties
m
Future losses
on joint
ventures
(note 11)
Total
Non-current
3.2
Charged to the income statement
2.4
12.3
-
15.5
2.4
At 31 October 2009
5.6
12.3
17.9
Charged/(credited) to the income statement
0.2
(5.3)
(5.1)
At 31 October 2010
5.8
7.0
12.8
st
st
Current
2.1
2.9
5.0
(0.9)
(0.7)
(1.6)
1.2
2.2
3.4
Charged to the income statement
0.5
2.6
3.1
At 31 October 2010
1.7
4.8
6.5

Credit to the income statement
st
19. CAPITAL AND RESERVES

Share Capital
2010
2009
100
100
100
100
Authorised
10,000 ordinary shares of one penny each
Allotted and fully paid
10,000 ordinary shares of one penny each
At 31st October 2010 there were no options outstanding to subscribe for ordinary shares (2009 nil).
Cash flow hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments
related to hedged transactions that have not yet occurred.
20. FINANCIAL INSTRUMENTS & RISK MANAGEMENT

Group operations are financed through net borrowings, comprising bank and loan facilities which are secured by fixed charges over land
and work-in-progress. The Group has hedged a substantial portion (260 million) of its floating rate interest exposure by the use of a
financial instrument (cap), which caps the LIBOR rate paid by the business to 3%.
Fair values
Financial assets
The carrying amount of financial assets equates to their fair value. Financial assets of the Group at 31st October 2010 consisted of sterling
cash deposits of 129.8m (2009 101.9m), with solicitors and on current account and 21.1m (2009 14.6m) of available for sale assets.
Financial liabilities
The fair value of the facilities and their related hedging instruments is determined by discounting risk-adjusted expected future cash flows
with application of current market interest rates.
The fair values of the facilities determined on this basis are:
Nominal
interest rate
Face
value
2010
m
Carrying
value
2010
m
Fair
value
2010
m
Year of
maturity
Facility B Term loan
12 mth LIBOR + 0.50%
343.5
327.1
281.5
2012
Facility C Term loan
3.4
3.4
3.4
2012
Facility E Term loan
6 mth LIBOR + 2.50%
158.9
88.0
2012
Loan notes
3 mth LIBOR - 0.50%
3.1
3.1
3.1
2012
Other loans
6.75%
12.1
12.1
12.1
2014
521.0
433.7
300.1
2010
Total non-current and current interest

bearing loans
Nominal
interest rate
Face
value
2009
m
Carrying
value
2009
m
Fair
value
2009
m
Year of
maturity
343.5
315.6
317.6
2012
0.9
0.9
0.9
2012
6 mth LIBOR + 2.50%
153.7
32.8
25.9
2012
Loan notes
3 mth LIBOR - 0.50%
5.6
5.6
5.6
2012
Other loans
6.75%
12.6
12.6
12.6
2012 - 13
516.3
367.5
362.6
2009
Total non-current and current interest

bearing loans
The difference between the face value and the carrying value of the Term loans of 16.4m and 70.9m respectively (87.3m in total),
(2009 27.9m and 120.9m respectively (148.8m in total)) is being charged as interest over the life of the facilities.
The carrying amount of the financial liabilities equates to their fair value, with the exception of the Term loans. The Facility B Term loan
has a fair value of 281.5m (2009 317.6m). The 2010 fair valuation has been determined by reference to market evidence for the enterprise
value of the business. The 2009 fair valuation was determined on a discounted cash flow basis, taking into account the margin over cost
of funds that would ordinarily be payable by companies in the Groups market sector. The Facility E Term loan has a fair value of nil (2009
25.9m), reflecting expectations that this loan will be waived in full as part of the 2011 financial restructuring of the Group. The 2009 fair
valuation of this loan was calculated by assessing the debt-free enterprise value of the Group at the balance sheet date and deducting
from this value debt repayments that would rank ahead of this debt.
Land purchased on extended payment terms

When land is purchased on extended payment terms, the Group initially records it at its fair value with a land creditor recorded for any
outstanding monies based on its fair value assessment. Fair value is determined by using the effective interest method. The difference
between the nominal value and the initial fair value is amortised over the period of the extended credit term and charged to finance costs,
increasing the value of the land creditor such that at the date of maturity the land creditor equals the payment required.
Undrawn borrowing facilities

The Group had undrawn committed borrowing facilities of 20m at 31st October 2010 (2009 40m). The repayment terms of the facilities are
set out below. In addition there were undrawn guarantee facilities of 18.4m (2009 6.7m).
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or other counterparty fails to meet its contractual obligations.
Surplus cash is placed on deposit with banks with a minimum credit rating, or in accordance with group policy. The security
and suitability of these banks is monitored by treasury on a regular basis.
Trade and other receivables are mainly amounts due from housing associations and commercial property sales, which are within credit
terms. Management considers that the credit ratings of these various debtors are good and therefore credit risk is considered low.
The maximum exposure to credit risk at 31st October 2010 is represented by the carrying amount of each financial asset in the balance
sheet. The Group has no substantial exposure to any individual third party.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
Cash flow forecasts are produced to monitor the expected cashflow requirements of the Group against the available facilities. The principal
risks within these cashflows relate to achieving the level of sales volume and prices in line with current forecasts.
The following are the contractual maturities including estimated cash flows of the financial liabilities of the Group at 31st October 2010:
Carrying
value
m
Contractual
cash flows
m
Within 1
year
m
1-2 years
2-3 years
327.1
353.1
6.8
346.3
0.1
More than
3 years
m
2010
3.4
3.5
88.0
164.8
3.4
164.8
Loan notes
3.1
3.1
1.0
2.1
Other loans
12.1
15.7
15.7
433.7
540.2
7.9
516.6
15.7
315.6
362.6
5.4
9.7
347.5
2009
0.9
0.9
0.9
32.8
166.4
166.4
Loan notes
5.6
5.8
1.0
1.0
3.8
Other loans
12.6
16.4
16.4
367.5
552.1
6.4
10.7
518.6
16.4
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, will affect the
Groups income or the value of its holdings of financial instruments.
Interest rate risk

The Group is exposed to interest rate risk due to borrowing funds at floating interest rates. Interest rate caps are used to manage this
volatility. At 31st October 2009, the Group hedged a substantial portion (260 million) of its floating rate interest exposure by the use of
a financial instrument (cap), which capped the LIBOR rate paid by the business to 3%. The remaining borrowing requirement is funded
principally through Term loans which are subject to variable interest rates which remain unhedged.
The cap was deemed an effective cash flow hedge at the balance sheet date and was recognised at fair value of nil (2009 1.5m). The fair
value was the estimated amount that the Group would receive if the instrument were sold at the balance sheet date. The cost of the
cap of 1.3m has been recognised in full as a finance cost during the year. The movement in the fair value during the year of 0.2m loss
(2009 0.2m gain) has been recognised directly in equity.
Interest rate risk

At 31st October 2010, the interest rate profile of the financial liabilities of the Group was:
2010
Sterling
Bank borrowings, loan notes and long term creditors
Carrying amount
Floating
rate
financial
liabilities
m
Fixed rate
financial
liabilities
433.7
2009
Sterling
Bank borrowings, loan notes and long term creditors
Total
Financial
liabilities
carrying
no interest
m
117.8
551.5
Total
516.5
Carrying amount
Floating
rate
financial
liabilities
m
Fixed rate
financial
liabilities
m
Financial
liabilities
carrying
no interest
m
367.5
149.0
The floating rate financial liabilities are subject to interest rates referenced to LIBOR. These rates are for a period between one and
twelve months.
For financial liabilities which have no interest payable but for which imputed interest is charged, consisting of land creditors, the
weighted average period to maturity is 26 months (2009 39 months).
The maturity of the financial liabilities is:
Repayable within one year
2010
m
2009
m
96.3
116.9
Repayable between one and two years
430.8
12.2
Repayable between two and five years
12.3
378.8
Repayable after five years
12.1
8.6
551.5
516.5
Sensitivity analysis
A change of 100 basis points in interest rates at the balance sheet date would have increased (decreased) equity and profit or loss by
the amounts shown below. This calculation assumes that the change occurred at the balance sheet date and had been applied to risk
exposures existing at that date.
This analysis assumes that all other variables remain constant and considers the pre-tax effect of financial instruments with variable
interest rates.
2010
Equity
2009
Equity
Income
statement
m
Income
statement
m
Increase in rates
(5.0)
(5.0)
(5.0)
(5.0)
Decrease in rates
5.0
5.0
5.0
5.0
Capital management
New operating policies and procedures were approved by the Board as part of the financial restructuring agreed in March 2009. The Group
has also agreed new covenants with the lenders as part of the terms of the restructure.
The Groups policies seek to match long term assets with long term finance and ensure that there is sufficient working capital to meet the
Groups commitments as they fall due, comply with the loan covenants and continue to sustain trading.
Management will continue to monitor actual cash flows against the approved cash flow forecast.
21. EMPLOYEE BENEFITS

Retirement benefit obligations
Defined contribution scheme
The Group (through Crest Nicholson PLC) operates a defined contribution scheme for new employees. The assets of the scheme are held
separately from those of the Group in an independently administered fund. The service cost of this scheme for the year was 0.8m (2009
0.3m). At the balance sheet date there were no outstanding or prepaid contributions.
Defined benefit scheme

The Group (through Crest Nicholson PLC) operates a contributory defined benefit pension scheme which is closed to new entrants and
was closed to future accrual by existing members during the year. The assets of the schemes are held separately from those of the Group,
being invested in managed funds.
The most recent funding valuation of the scheme was carried out as at 31st January 2010 by a professionally qualified actuary using the
projected unit method.
The assets of the defined benefit scheme have been calculated at fair value and the liabilities, at the balance sheet date under IAS 19
(Revised), using the Projected unit method and based on the following financial assumptions:
31st October 2010
%pa
31st October 2009

%pa
Discount rate
5.7%
5.5%
Salary escalation
0.0%
4.4%
Price inflation
3.5%
3.4%
Pension increases on benefit increasing in line with 5% or RPI if lower
3.1%
3.0%
Expected return on invested assets
5.9%
6.1%
Expected return on insurance annuity contracts
5.7%
5.5%
The expected return on assets reflects the weighted average return on the categories of scheme assets shown below.
Mortality assumptions are as follows:
Mortality before retirement: PNMA 00 medium cohort (year of birth) 1.5% minimum improvement p.a. and PNFA 00
medium cohort (year of birth) 1.5% minimum improvement p.a.
Mortality after retirement: PNMA 00 medium cohort (year of birth) 1.5% minimum improvement p.a. and PNFA 00
medium cohort (year of birth) 1.5% minimum improvement p.a.
The major categories of Scheme assets as a percentage of the total fair value of Scheme assets are as follows:
2010
%
2009
%
Equities
58.2%
50.8%
Bonds
29.3%
28.4%
Property
2.2%
2.1%
Cash
1.3%
4.9%
Secured annuities
9.0%
13.8%
100.0%
100.0%
Total
The amounts recognised in the year (2009 post 24th March 2009) are as follows:
2010
m
2009
m
Current service cost recognised in administrative expenses
0.6
0.5
Gain on curtailment recognised in administrative expenses
(1.7)
Interest cost recognised in finance costs
7.3
4.0
Expected return on scheme assets recognised in finance income
(5.3)
(3.5)
Total
0.9
1.0
Actuarial (gain)/loss
(6.2)
27.3
Total defined benefit scheme (gains)/costs recognised in the year/period
(5.3)
28.3
2010
m
2009
m
Expected return on scheme assets
5.3
3.5
Actuarial gain/(loss) on scheme assets
1.8
(27.3)
Actual return on scheme assets
7.1
(23.8)
The cumulative debit to the SORIE since the adoption of IAS 19 (Revised) is 21.1m (2009 27.3m).
The actual return on scheme assets is:
The amounts included in the balance sheet arising from the Groups obligation in respect of its defined benefit scheme are as follows:
2010
m
2009
m
Present value of defined benefit obligations
131.0
136.4
Fair value of scheme assets
(94.9)
(90.3)
Defined benefit liability recognised in the balance sheet
36.1
46.1
No deferred tax asset has been recognised on the balance sheet in relation to the net pension obligation as realisation of the related tax
benefit through future taxable profits is not considered probable in the foreseeable future (2009 nil).
Movements in the liability recognised on the balance sheet were as follows:
2010
m
2009
m
At beginning of year/period
46.1
20.9
Total (gain)/expense (as shown above)
(5.3)
28.3
Company contributions paid in the year/period
(4.7)
(3.1)
At end of year/period
36.1
46.1
Changes in the present value of the defined benefit obligation were as follows:
2010
m
2009
m
136.4
99.7
Current service cost
0.6
0.5
Gain on curtailment
(1.7)
Interest cost
7.3
4.0
Employee contributions
0.2
0.2
Actuarial (gains)/losses
(4.4)
36.1
Benefits and expenses paid

(7.4)
(4.1)
131.0
136.4
The gain on curtailment arose as a result of the decision to close the scheme to future accrual during the year.
Changes in the fair value of scheme assets were as follows:
2010
m
2009
m
90.3
78.8
Expected return on scheme assets
5.3
3.5
Actuarial gain on scheme assets
1.8
8.8
Employer contributions
4.7
3.1
Employee contributions
0.2
0.2
Benefits and expenses paid
(7.4)
(4.1)
94.9
90.3
2010
m
2009
m
A history of experience adjustments is as follows:
131.0
136.4
Fair value of scheme assets
94.9
90.3
Deficit in the scheme
36.1
46.1
Experience adjustments on scheme liabilities
1.8
35.7
Percentage of scheme liabilities
1.4%
26.2%
Experience adjustments on scheme assets
4.4
8.5
Percentage of scheme assets
4.6%
9.4%
Present value of defined benefit obligation
The expected employer contributions to the defined benefit scheme during 2011 are currently under review but will not be less
than 4m (2010 4.9m).
22. CONTINGENT LIABILITIES

There are performance bonds and other engagements, including those in respect of joint venture partners, undertaken in the ordinary
course of business from which it is anticipated that no material liabilities will arise.
23. OPERATING LEASES

At 31st October 2010 total outstanding commitments for future minimum lease payments under non-cancellable operating leases were:
2010
m
2009
m
3.6
3.8
Land and buildings

Within one year
Less: minimum sub-lease income
(1.3)
(1.6)
Between two and five years
12.4
13.8
(2.6)
(2.7)
After five years
9.2
13.4
(0.3)
(0.7)
21.0
26.0
Within one year
0.6
0.6
Between two and five years
0.9
1.0
1.5
1.6
Other
24. RELATED PARTY TRANSACTIONS

The Group has entered into the following related party transactions:
(i) Transactions with joint ventures, which are disclosed in Note 11. The Group has provided book-keeping services to certain JVs
which have been recharged at cost.
(ii) On 24th March 2009, the Company acquired Castle Bidco Limited, the parent company of Crest Nicholson PLC, pursuant to a
financial restructuring of the Crest Nicholson Group. 90% of the shares in Crest Nicholson Holdings Limited are owned by the
syndicate of lenders who have made Term loans to the business.
At 31st October 2010, the interests of the syndicate lenders in the financial instruments of the Group were as follows:
Term loans (500m face value)
2010
m
2009
m
418.5
349.3
In addition, the syndicate lenders provide a 66.3m bank guarantee facility. Guarantees of 47.9m (2009 59.6m) had been given by the
lenders at 31st October 2010.
Borrowings of the Group are secured against the value of stock and work in progress.
(iii) Compensation of key management personnel is disclosed within Note 5. Key management also hold 8% of the shares in the
Company, with a further 2% held by other senior Crest Nicholson employees.
25. ACCOUNTING ESTIMATES & JUDGEMENTS

Management considers the key estimates and judgments made in the accounts to be related to the valuation of Goodwill, WIP, Deferred tax
and pension liabilities.
Goodwill
The carrying value of goodwill is substantially dependent on the ability of the Group to successfully progress its strategic land holdings.
Changes to the planning regime could undermine current assumptions about the sites which are expected to be successfully developed.
Carrying value of land and work in progress

Inventories of land, work in progress and completed units are stated in the balance sheet at the lower of cost and net realisable value.
Due to the nature of development activity and in particular, the length of the development cycle, the Group has to allocate site-wide
development costs such as infrastructure between units being built and/or completed in the current year and those for future years. It also
has to make estimates of the cost to complete such developments.
There is a degree of inherent uncertainty in making such estimates. The Group has established internal controls that are designed to
ensure an effective assessment is made of inventory carrying values and the costs to complete developments.
Deferred tax
Management has elected not to recognise deferred tax assets arising in respect of losses that can be carried forward against future taxable
income, nor those in relation to retirement benefit obligations and other timing differences, on the grounds that realisation of the related
tax benefit through future taxable profits could not be stated as probable at the balance sheet date.
Pensions
Management has employed the services of an actuary in setting these estimates; however, they recognise the risk that both expected
investment returns and ultimate scheme payments may differ substantially from current forecasts.
26. POST BALANCE SHEET EVENT

After the balance sheet date, Vrde Partners, together with certain market associates and partners, progressively acquired the debt
and equity of other group lenders in order to facilitate a financial restructuring of the Group.
At 23rd March 2011, Vrde Partners, together with certain market associates and partners, had control over more than 80% of the
senior debt and equity of the Group.
COMPANY BALANCE SHEET
COMPANY BALANCE SHEET

As at 31st October 2010
Note
2010
2009
99
99
99
99
99
99
Fixed assets
Investments
Current assets
Cash at bank and in hand
Net current assets
Total assets less current liabilities
Net assets
Capital and reserves

Called up share capital
100
100
Profit and loss account
(1)
(1)
Equity shareholders fund
99
99

Approved by the Board of Directors on 18th April 2011 and were signed on its behalf by:
S Stone
N C Tinker
Directors
There are no recognised gains and losses for the year (2009 nil).
COMPANY FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS

For the period 31st October 2010
1. ACCOUNTING POLICIES
The following accounting policies have been applied consistently in dealing with items which are considered material in
relation to the financial statements.
Basis of preparation
The Company financial statements have been prepared under the historical cost accounting rules and in accordance
with applicable UK Accounting Standards.
The accounting policies have been applied consistently in dealing with items which are considered material.
Under section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own profit
and loss account. Under FRS 1, the company is exempt from the requirement to prepare a cash flow statement on the
grounds that its consolidated financial statements, which include the Company, are publicly available.
The principal accounting policies adopted are set out below.
Investments
Investments in group undertakings are included in the balance sheet at cost less any provision for impairment.
Taxation
The charge for taxation is based on the result for the year and takes into account taxation deferred because of timing
differences between the treatment of certain items for taxation and accounting purposes.
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain
items for taxation and accounting purposes which have arisen, but not reversed by the balance sheet date, except as
otherwise required by FRS 19.
Dividends
Dividends are recorded in the Companys financial statements in the period in which they are paid.
2. STAFF NUMBERS AND COSTS

The Company has no employees.
3. DIVIDENDS
Details of the dividends recognised as distributions to equity shareholders in the period and those proposed after the
balance sheet date are as shown in Note 8 of the Consolidated financial statements.
4. FIXED ASSET INVESTMENTS

FIXED ASSET INVESTMENTS
2010
2009
Shares in and loans to subsidiary undertakings

At start of year/period
Additions
Capital contribution to subsidiary undertaking
397,615,000
Impairment
(397,615,001)
The subsidiary undertakings which are significant to the Group and traded during the period are shown in Note 11 of the Consolidated
financial statements.
5. SHARE CAPITAL
2010
2009
100
100
100
100
Authorised
10,000 Ordinary shares of 1p each
Allotted, called up and fully paid
10,000 Ordinary shares of 1p each
6. RECONCILIATION OF SHAREHOLDERS FUNDS
At 23 January 2009
rd
Issue of shares
Loss for the period
Share
capital
Profit and loss

account
Total
100
100
(397,615,001)
(397,615,001)
397,615,000
397,615,000
100
(1)
99
Result for the year
At 31 October 2010
100
(1)
Gain on equitisation of debt
st
99
The loss dealt with in the books of the Company was nil (2009 397,615,001).
During the prior reporting period ended 31st October 2009, on acquisition of Castle Bidco Limited, the Company became a guarantor to the
senior facilities agreement and the mezzanine facilities agreement of the Castle Bidco Group. Lenders under these facilities made a partial
demand under this guarantee amounting to 397,615,000. This was treated as a capital contribution to Castle Bidco Limited, with the
corresponding receivable from Castle Bidco being subsequently waived. The initial investment of 1 was impaired to nil.
The lenders also agreed to exchange their debt of 397,615,000 for equity in the Company, resulting in a gain on equitisation.
7. CONTINGENT LIABILITIES
There are performance bonds and other engagements, including those in respect of joint venture partners, undertaken in the ordinary
course of business from which it is anticipated that no material liabilities will arise.
In addition, the Company is required from time to time to act as surety for the performance by subsidiary undertakings of contracts entered
into in the normal course of their business.
Under the terms of the bank facilities, each company within the Group is a guarantor of the bank facilities of other group members that
have acceded to the senior facilities agreement.
8. RELATED PARTIES
As 100% of the Companys voting rights are controlled within the Crest Nicholson Group, the Company has taken advantage of the
exemption contained in FRS 8 and has therefore not disclosed transactions or balances with entities which form part of the Group (or
investees of the Group qualifying as related parties).
Crest Nicholson Holdings Limited

Crest House
Pyrcroft Road
Chertsey
Surrey
KT16 9GN
Tel: 01932 580 555
Fax: 0870 336 3990
www.crestnicholson.com

Crest Nicholson Holdings Annual Report (2010)

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CREST NICHOLSON HOLDINGS LTD

DIRECTORS REPORT & ACCOUNTS

COVER ELEMENTS, Epsom

PORT MARINE, Portishead

KEY PERFORMANCE INDICATORS

GROSS PROFIT MARGIN

BUILDING FOR LIFE AWARDS

REDUCTION SINCE 2008

DIRECTORS REPORT & ACCOUNTS 2010 | 2

*Not included in the Directors Report forming part of

Registered no. 6800600

PARK CENTRAL, Birmingham

Chief Executives Review

Financial Review and

Statement of Directors Responsibilities 22

DIRECTORS REPORT & ACCOUNTS 2010 | 3

Independent Auditors Report

Consolidated Income Statement

Consolidated Statement of Cash Flows 28

Company Balance Sheet

Notes to the Company

CLARIDGE PARK, Milton Keynes

Following our decisive actions to ensure

DIRECTORS REPORT & ACCOUNTS 2010 | 4

being taken by our principal shareholders,

will ensure we have the right balance of

The change of Government has resulted

We are encouraged by our results in what

The lack of mortgage finance, coupled

CHIEF EXECUTIVES REVIEW

CHIEF EXECUTIVES REVIEW

DIRECTORS REPORT & ACCOUNTS 2010 | 5

to re-enter the land market and secure

MERCHANTS QUAY, Gloucester

CHIEF EXECUTIVES REVIEW

That said, the abandonment of regional

new homes there needs to be significant

Developing our business

This is why we are investing significant time

In partnership with CABE,

CHIEF EXECUTIVES REVIEW

Our legacy in the built environment is the

accolades firmly underpin the design

INGRESS PARK, Greenhithe

FINANCIAL REVIEW & DIRECTORS REPORT

Results and Dividend1

31st October 2010 reflect a good trading

Open-market housing completions have

DIRECTORS REPORT & ACCOUNTS 2010 | 8

BOLNORE VILLAGE, Haywards Heath

Group profits before financing costs,

DIRECTORS REPORT & ACCOUNTS 2010 | 9

increase the equity on the Group balance

the Directors requesting that the company

THE BEACON, Hindhead

DIRECTORS REPORT & ACCOUNTS 2010 | 10

THE ACADEMY, Kilburn

Mixed Use Commercial

Total Crest housing completions in 2010

Conditions in the commercial property

The average sale price was 187k, up 13.3%

DIRECTORS REPORT & ACCOUNTS 2010 | 11

PAPERMILL WALK, Ingress Park

Total short term