British Land Company PLC

Company Balance Sheet UK GAAP	Note		2009 £m	2008 £m
Non-current assets
Investments and loans to subsidiaries	d		24,702	27,322
Investments in joint ventures	d		216	44
Intangible assets	d		25	63
Other investments	d		7	8
			24,950	27,437
Current assets
Debtors	g		397	433
Cash and short-term deposits	e		257	44
			654	477
Current liabilities
Short-term borrowings and overdrafts	e		(3)	(62)
Creditors	h		(145)	(108)
Amounts due to subsidiaries			(19,353)	(19,181)
			(19,501)	(19,351)
Net current liabilities			(18,847)	(18,874)
Total assets less current liabilities			6,103	8,563
Non-current liabilities
Debentures and loans	e		(1,658)	(2,217)
			(1,658)	(2,217)
Net assets			4,445	6,346
Equity
Called up share capital	i		217	131
Share premium	j		1,247	1,272
Other reserves	j		(33)	12
Revaluation reserve	j		139	139
Retained earnings	j		2,875	4,792
Shareholders' funds			4,445	6,346

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(a) Accounting policies

Accounting basis

The financial statements are prepared in accordance with applicable United Kingdom law and Accounting Standards (UK GAAP) and under the historical cost convention as modified by the revaluation of investment properties and fixed asset investments (not in accordance with International Financial Reporting Standards (IFRS) which are applied by the Group).

The major accounting policies of the Company are set out below and have been applied consistently throughout the current and the previous year. The policies that differ from those applied by the Group (as stated in note 1 of the consolidated financial statements) are for investments and deferred taxation:

Going concern

The financial statements are prepared on a going concern basis as explained in the Corporate Governance section

Investments

Investments in joint ventures are stated at cost less provision for impairment. Investments in subsidiaries are stated at cost or directors' valuation less provision for impairment.

Intangible assets

Intangible assets, such as fund management contracts, acquired through business combinations, are measured initially at fair value and are amortised on a straight-line basis over their estimated useful lives, and are subject to regular reviews for impairment.

Deferred taxation

Deferred tax is not recognised when fixed assets are revalued unless by the balance sheet date there is a binding agreement to sell the revalued assets and the gain or loss expected to arise on the sale has been recognised in the financial statements. A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

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(b) Dividends

Details of dividends paid and proposed are included in note 20 of the consolidated financial statements.

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(c) Company loss for the financial year after tax

The Company has not presented its own profit and loss account as permitted by Section 230 of the Companies Act 1985. The loss after tax for the year was £2,411m (2008:loss £324m).

The average monthly number of employees of the Company during the year was 162 (2008: 177). Employee costs include wages and salaries of £21m (2008: £20m), social security costs of £2m (2008: £3m) and pension costs of £3m (2008: £4m).

Details of the executive directors' remuneration are disclosed in the remuneration report. Audit fees in relation to the Parent Company were £0.8m (2008: £0.6m).

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(d) Investments and loans to subsidiaries

	Shares in subsidiaries £m	Loans to subsidiaries £m	Investments in joint ventures £m	Intangible assets £m	Other investments £m	Total £m
At 1 April 2008	20,346	6,976	44	63	8	27,437
Additions	1,231	1,003	9			2,243
Disposals	(324)	(1,295)				(1,619)
Reallocations	(163)		163
Impairment charge	(3,072)			(38)	(1)	(3,111)
At 31 March 2009	18,018	6,684	216	25	7	24,950

Shares in subsidiaries are included at cost or directors' valuation in 1977, 1995, 1997 and 1999 to 2009 inclusive; their historical cost is £21,949m (2008: £21,205m). The amount of £216m (2008: £44m) includes £35m (2008: £26m) of loans to joint ventures by the Company. The Company has a 50% interest in The Public House Company Limited, which is registered and operates in England and Wales. Results of the joint ventures are set out in note 12 of the consolidated financial statements. The historical cost of other investments is £12m (2008: £12m).

The principal subsidiaries are wholly-owned and except where stated, registered and operating in England and Wales, are:

Executive	Property	Broadgate (PHC 7) Limited
The British Land Corporation Limited *	1 & 4 & 7 Triton Limited	Broadgate (PHC 9) Limited
	2 & 3 Triton Limited	Broadgate (PHC 11) 2005 Limited
Finance, Investment and Management	201 Bishopsgate Limited	Broadgate (PHC 15a) Limited
British Land Property Management Limited	BF Propco (No 10) Limited	Broadgate (PHC 16) 2005 Limited
BLD Property Holdings Limited	BL Fixed Uplift Fund Limited Partnership	Eastgate Shopping Centre Basildon Limited
BL European Fund Management LLP	British Land Leisure Limited	Euston Tower Limited
BL European Holdings Limited	British Land Retail Warehouses Limited	Osnaburgh Street Limited
British Land (Joint Ventures) Limited	Broadgate (PHC 2) Limited	Ropemaker Place Unit Trust (Jersey)
British Land Property Advisers Limited	Broadgate (PHC 3) Limited	Stockton Retail Park Limited
Broadgate Financing PLC	Broadgate (PHC 5) 2005 Limited	The Mary Street Estate Limited
	Broadgate (PHC 6) 2005 Limited

^*Direct subsidiary of the Company

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(e) Net debt

		2009 £m	2009 £m
Secured on the assets of the Company
5.264% First Mortgage Debenture Bonds 2035		327	327
5.0055% First Mortgage Amortising Debentures 2035		104	105
5.357% First Mortgage Debenture Bonds 2028		307	307
6.75% First Mortgage Debenture Bonds 2020		220	221
6.75% First Mortgage Debenture Bonds 2011		102	103
Floating Rate Secured Loan Notes 2035		256	256
		1,316	1,319
Unsecured
5.50% Senior Notes 2027		98	98
6.30% Senior US Dollar Notes 2015 1		108	77
10.25% Bonds 2012
Bank loans and overdrafts		139	785
		345	960
Gross debt		1,661	2,279
Interest rate derivatives: liabilities		53	31
Interest rate derivatives: assets		(15)	(13)
		1,699	2,297
Cash and short-term deposits		(257)	(44)
Net debt		1,442	2,253

¹Principal and interest on these borrowings were fully hedged into Sterling at the time of issue.

Maturity analysis of net debt

			2009 £m	2008 £m
Repayable	within one year and on demand		3	62
between:	one and two years		101	3
two and five years			263	473
five and ten years			261	705
ten and fifteen years			211	213
fifteen and twenty years			441	442
twenty and twenty-five years			6	5
twenty-five and thirty years			375	376
			1,658	2,217
Gross debt			1,661	2,279
Interest rate derivatives			38	18
Cash and short-term deposits			(257)	(44)
Net debt			1,442	2,253

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(f) Pension

The Company's pension scheme is the principal pension scheme of the Group and details are set out in note 10 of the consolidated financial statements.

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(g) Debtors

	2009 £m	2008 £m
Trade and other debtors 1	58	22
Amounts owed by subsidiaries	315	388
Corporation tax	9	10
Interest rate derivative assets2	15	13
	397	433

¹Included within this balance is deferred consideration of £34m (2008: £nil) arising on the sale of investment properties. The timing of the receipt is uncertain and may fall due after one year.

²Includes contracted cash flow with a maturity greater than one year at fair value.

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(h) Creditors

	2009 £m	2008 £m
Trade creditors	16	1
Amounts due to joint ventures	29	29
Corporation tax	7	10
Other taxation and social security	3	4
Accruals and deferred income	37	33
Interest rate derivative liabilities*	53	31
	145	108

^*Includes contracted cash flow with a maturity greater than one year at fair value.

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(i) Share capital

	£m	Ordinary shares of 25p each
Issued, called and fully paid
At 1 April 2008	131	522,190,080
Issues	86	341,260,136
At 31 March 2009	217	863,450,216

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(j) Share capital and reserves

	Share capital £m	Share premium £m	Merger reserve £m	Other reserves £m	Revaluation reserve £m	Profit and loss account £m	Total £m
At 1 April 2008	131	1,272		12	139	4,792	6,346
Share issues	86	(25)	682				743
Transfer to retained earnings			(682)			682
Dividends paid						(185)	(185)
Adjustment for share and share option awards						(1)	(1)
Pension scheme movements						(2)	(2)
Retained loss for year						(2,411)	(2,411)
Derivatives valuation movement				(48)			(48)
Exchange movements on net investments				3			3
At 31 March 2009	217	1,247		(33)	139	2,875	4,445

The value of distributable reserves within the profit and loss account is £752m (2008: £806m).

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(k) Contingent liabilities, capital commitments and related party transactions

At 31 March 2009, the Company had no contingent liabilities for guarantees to third parties (2008: £nil). The Company also had no capital commitments (2008 £nil).

The Company has used the exemption under FRS 8 where disclosure is not required of transactions with fellow subsidiary undertakings 90% or more of whose voting rights are controlled within the Group.

Related party transactions are the same for the Company as for the Group. For details refer to note 25 of the consolidated financial statements.

The Company has utilised the exemptions provided by FRS 1 (Revised) and has not presented a cash flow statement. A consolidated cash flow statement has been presented in the Group Financial Statements.

Report of the Auditors

Independent Auditors' Report to the Members of The British Land Company PLC

We have audited the individual Company financial statements of The British Land Company PLC for the year ended 31 March 2009 which comprise the balance sheet and the related notes (a) to (k). These individual Company financial statements have been prepared under the accounting policies set out therein.

We have reported separately on the Group financial statements of The British Land Company PLC for the year ended 31 March 2009 and on the information in the directors' remuneration report that is described as having been audited.

This report is made solely to the Company's members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company's 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 Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

The directors' responsibilities for preparing the annual report and the individual Company financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of directors' responsibilities.

Our responsibility is to audit the individual Company financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the individual Company financial statements give a true and fair view and whether the individual Company financial statements have been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion the directors' report is consistent with the individual Company financial statements. The information given in the directors' report includes that specific information presented in the business review that is cross referred from the business review section of the directors' report.

In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors' remuneration and other transactions is not disclosed.

We read the other information contained in the Annual Report as described in the contents section and consider whether it is consistent with the audited individual Company financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the individual Company financial statements. Our responsibilities do not extend to any further information outside the Annual Report.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the individual Company financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the individual Company financial statements, and of whether the accounting policies are appropriate to the Company's circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the individual Company financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the individual Company financial statements.

Opinion

In our opinion:

• the individual Company financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the Company's affairs as at 31 March 2009;
• the individual Company financial statements have been properly prepared in accordance with the Companies Act 1985; and
• the information given in the directors' report is consistent with the individual Company financial statements.

Deloitte LLP

Chartered Accountants and Registered Auditors

London, United Kingdom

20 May 2009

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