Financial Statements

Notes to the Accounts

12 Funds and Joint Ventures

A detailed breakdown of the 100% results of specific funds and joint ventures is set out on the two facing pages, below and across. The total column represents the Group’s share of all funds and joint ventures. All disclosures have been restated to British Land accounting policies under IFRS eliminating performance and management fees due to the Group.

Joint ventures' summary financial statements

	BL Sainsbury Superstores Ltd	BLT Properties Ltd	The Tesco British Land Property Partnership	Tesco BL Holdings Ltd	The Tesco Aqua Limited Partnership	BL Fraser Ltd	The Scottish Retail Property Limited Partnership
Percentage interest in joint ventures - 2008	50%	50%	50%	50%	50%	50%	50%
- 2007		50%	50%	50%	50%	50%	50%
Partners	J Sainsbury plc	Tesco plc	Tesco plc	Tesco plc	Tesco plc	House of Fraser plc	Land Securities Group PLC
Date established	March 2008	November 1996	February 1998	November 1999	March 2007	July 1999	March 2004
Accounting period	5 days ended 31 March 2008	Year ended 31 March 2008	Year ended 31 March 2008	Year ended 31 March 2008	Year ended 31 March 2008	Year ended 31 March 2008	Year ended 31 March 2008
Summarised income statements	£m	£m	£m	£m	£m	£m	£m
Gross rental and related income	1	16	5	30	29	14	30
Net rental and related income	1	16	5	30	29	14	19
Other income and expenditure						(1)	(2)
Net interest - External	(1)	(11)	(3)	(15)	(27)	(8)	(11)
- Shareholders		1
Net interest payable	(1)	(10)	(3)	(15)	(27)	(8)	(11)
Underlying profit before taxation		6	2	15	2	5	6
(Deficit) surplus on revaluation		(49)	(12)	(104)	(58)	(35)	(57)
Disposal of fixed assets							(15)
Goodwill impairment
Non-recurring items¹							15
(Loss) profit on ordinary activities before taxation		(43)	(10)	(89)	(56)	(30)	(51)
REIT conversion charge
Current tax		7		(1)		(1)
Deferred tax
(Loss) Profit on ordinary activities after taxation		(36)	(10)	(90)	(56)	(31)	(51)

Summarised balance sheets
Investment properties	1,190	316	112	601	594	263	263
Development properties
Total properties	1,190	316	112	601	594	263	263
Current assets	5	7	10	11			5
Upstream loans to joint venture shareholders		17
Cash and deposits	47	7	2	13	13	5	16
Gross assets	1,242	347	124	625	607	268	284
Current liabilities	(58)	(5)	(34)	(21)	(26)	(8)	(14)
Bank debt falling due within one year						(4)
Bank debt falling due after one year		(185)	(45)	(315)	(485)	(122)
Securitised debt	(719)						(119)
Obligations under finance leases							(11)
Deferred tax
Gross liabilities	(777)	(190)	(79)	(336)	(511)	(134)	(144)
Net external assets	465	157	45	289	96	134	140
Represented by:
Shareholder loans	24		2		52	1	14
Ordinary shareholders' funds/Partners' capital	441	157	43	289	44	133	126
Total investment	465	157	45	289	96	134	140
Capital commitments		10		5

Funds' summary financial statements

	Hercules Unit Trust	Hercules Income Fund	Pillar Retail Europark Fund	Group's share of other joint ventures and funds³	Group share 2008	Group share 2007
Percentage interest in funds - 2008	36.27%	26.12%	30.26%²
- 2007	36.27%	26.12%	22.35%
Date established	September 2000	September 2004	March 2004
Accounting period	Year ended 31March 2008	Year ended 31 March 2008	Year ended 31 March 2008
Summarised income statements	£m	£m	£m	£m	£m	£m
Gross rental and related income	107	7	34	4	117	115
Net rental and related income	99	6	29	3	106	100
Other income and expenditure	(4)		(11)		(6)	(6)
Net interest - External	(47)	(1)	(12)	(2)	(61)	(59)
- Shareholders					1	2
Net interest payable	(47)	(1)	(12)	(2)	(60)	(57)
Underlying profit before taxation	48	5	6	1	40	37
(Deficit) surplus on revaluation	(514)	(31)	17	(20)	(367)	224
Disposal of fixed assets	4			19	13	33
Goodwill impairment				(3)	(3)	(5)
Non-recurring items¹				2	9
(Loss) profit on ordinary activities before taxation	(462)	(26)	23	(1)	(308)	289
REIT conversion charge						(48)
Current tax				(1)	1	(19)
Deferred tax	7		(6)		1	237
(Loss) Profit on ordinary activities after taxation	(455)	(26)	17	(2)	(306)	459

Summarised balance sheets
Investment properties	2,601	125	456	105	2,889	2,815
Development properties				119	119	77
Total properties	2,601	125	456	224	3,008	2,892
Current assets	18	3	26	23	57	113
Upstream loans to partners/shareholders				15	23	28
Cash and deposits	28	1	50	25	102	80
Gross assets	2,647	129	532	287	3,190	3,113
Current liabilities	(49)	(4)	(40)	(52)	(166)	(158)
Bank debt falling due within one year					(2)	(29)
Bank debt falling due after one year	(21)	(10)	(207)	(63)	(712)	(721)
Securitised debt	(948)				(763)	(581)
Obligations under finance leases				(1)	(6)	(6)
Deferred tax			(29)		(9)	(8)
Gross liabilities	(1,018)	(14)	(276)	(116)	(1,658)	(1,503)
Net external assets	1,629	115	256	171	1,532	1,610
Represented by:
Shareholder loans				14	60	50
Investors' capital/Partners' capital/Ordinary shareholders' funds	1,629	115	256	157	1,472	1,560
Total investment	1,629	115	256	171	1,532	1,610
Capital commitments	40		156	10	79	132

Notes to the Funds and Joint Ventures tables

All joint ventures are incorporated in the United Kingdom. HUT and HIF are domiciled in Jersey, and PREF in Luxembourg.

¹ Non-recurring items relate to the surplus arising on closing out interest rate derivatives following redemption of the related debt out of the proceeds of property sales.

² When the fund is fully invested, this will reach approximately 40%.

³ Included in the column headed ‘ Group’s share of other joint ventures and funds’ are contributions from the following: Fareham Property Partnership, the BL Goodman Limited Partnership, the Public House Company Limited, EFI Zaragoza, the City of London Office Unit Trust (CLOUT), Auchinlea Partnership, Delavan Spain S.L. and Group adjustments. Amounts are shown at the relevant percentage for Group Share.

These financial statements include the results and financial position of the Group’s interest in the Tesco British Land Property Partnership, the Tesco Aqua Limited Partnership, the Scottish Retail Property Limited Partnership, the Fareham Property Partnership, the BL Goodman Limited Partnership, Auchinlea Partnership and the BL Residential Limited Partnership. Accordingly, advantage has been taken of the exemptions provided by Regulation 7 of the Partnerships and Unlimited Companies (Accounts) Regulations 1993, not to attach the partnership accounts to these financial statements.

At 31 March 2008, the investment in Joint Ventures included within the total investment in Funds and Joint Ventures was £833m (2007: £780m). Distributions in the year include the receipt of £43m (£38m capital) from The Scottish Retail Property Limited Partnership; £34m (£17m capital) from Tesco Joint Ventures; £28m from HUT and £12m (capital) from CLOUT. At 31 March 2008 the Group’s share of funds and joint ventures properties is £3,002m (2007: £2,886m) of which £nil (2007: £153m) is carried at directors’ valuation; external net debt is £1,378m (2007: £1,238m) and the mark to market adjustment for external debt is £74m asset (2007: £8m asset).

Summary movement for the year of the investments in Funds and Joint Ventures

	Joint ventures £m	Funds £m	Total £m	Equity £m	Loans £m	Total £m
At 1 April 2007	770	840	1,610	1,560	50	1,610
Additions	296	75	371	360	11	371
Disposals	(29)		(29)	(8)	(21)	(29)
Share of loss after taxation	(150)	(156)	(306)	(306)		(306)
Distributions and dividends: capital	(55)	(12)	(67)	(67)		(67)
revenue	(21)	(34)	(55)	(55)		(55)
Hedging movements	(2)	10	8	8		8
At 31 March 2008	809	723	1,532	1,492	40	1,532