The Directors present their annual report and the financial statements of the Group for the year ended 31st December 2007.



Principal activities
The principal activities of the Group during the year were property development, investment and trading.

Business review and future developments
A review of the Group’s operations, the current state of the business and future prospects, including the principal risks and uncertainties, are contained in the Chairman’s statement, Review of operations and Financial review and should be read in conjunction with this report. The information which comprises the Business review as required by Section 234ZZB of the Companies Act 1985 may be found in the Review of operations section and in the Corporate social responsibility report

Results and dividends
The profit for the financial year attributable to shareholders amounted to £39,000 (2006: £23,559,000). An interim Ordinary dividend of £983,000 representing 2.4 pence per Ordinary share was paid on 26th October 2007 (2006: £828,000, representing 2.25 pence per Ordinary share). The Board recommends a final Ordinary dividend of 4.8 pence per Ordinary share amounting to £1,948,000 payable on 3rd July 2008 to shareholders on the register at 6th June 2008 (2006: £1,832,000 representing 4.5 pence per Ordinary share).

Group structure
Details of principal subsidiary undertakings are disclosed in note 12(c).

Share capital
The Company’s issued share capital of 40,565,524 Ordinary shares of 50 pence each as at 31st December 2007 represents a single class of shares. Details of the share capital are set out in note 18. Three resolutions relating to share capital will be proposed as Special Business at the forthcoming Annual General Meeting. The full text of the resolutions can be found in the enclosed Notice of Annual General Meeting.

Special Resolution 7: The current authority for the Company to purchase its own shares expires at the conclusion of the forthcoming Annual General Meeting. A special resolution is to be proposed at the Annual General Meeting to authorise the repurchase of up to 6,046,000 Ordinary 50 pence shares, representing approximately 14.9 per cent of the Company’s issued share capital. The Directors have no present intention of making any market purchases of the Company’s shares, but if they considered such action would enhance net assets or earnings per share, they would consider exercising this authority. As at the date of this report, the Company has an unexpired authority to repurchase 5,666,000 Ordinary shares.

Ordinary Resolution 8: The Directors will seek authority to allot relevant securities pursuant to Section 80 of the Companies Act 1985 up to a maximum aggregate nominal value of £6,979,697 being equal to one-third of the issued Ordinary share capital of the Company, together with the number of share options outstanding.

Special Resolution 9: The Directors seek authority to renew the disapplication of shareholders’ pre-emptive rights under Section 89 of the Companies Act 1985 up to an aggregate nominal value of £1,014,425 being equal to 5.0 per cent of the issued Ordinary share capital of the Company. In the event that it is used, no more than 7.5 per cent of the issued share capital will be issued on a non pre-emptive basis in any three-year period.

Additional disclosure under Section 992 of the Companies Act 2006
The rights and obligations that are attached to the shares are specified in the Company’s Articles of Association, or alternatively may be governed by statute. The Articles of Association also deal with the appointment and replacement of Directors. The Articles of Association may be altered by a special resolution of shareholders.

There are no restrictions on the transfer of shares in the Company other than those specified by law or regulation. Other than as specified by the Articles of Association, there are no restrictions on voting rights.

The Company has entered into significant agreements with its commercial partners, which contain change of control clauses and which may give rise to termination or renegotiation. If enforced, the Company may be deprived of potential future earning capacity from such schemes.

Share option schemes
During the year, options over 100,000 shares were granted under the Executive Share Option Plan 2005 and 40,709 options under the Company’s Save As You Earn Option Plan 2005. Further details of the Share Option Schemes are contained in note 18 and in the Remuneration report.

The Directors serving during the year were as follows:
David Jenkins – appointed 1st February 2007
Roy Dantzic – resigned 15th May 2007
Michael Marx
Julian Barwick
Matthew Weiner
Paul Willis – resigned 6th March 2007
Paul Manduca
Victoria Mitchell
Michael Soames

The Directors retiring by rotation at the Annual General Meeting are Julian Barwick and Paul Manduca, who being eligible, offer themselves for re-election. Following the performance evaluation of the Board, Paul Manduca was judged to have made a significant contribution to the Board’s deliberations, reflecting his commitment to the role.

Directors’ conflicts of interests
The Companies Act 2006 sets out in statute for the first time the general duties of directors. The provisions largely codify the existing law, but with some important changes. One of these changes is that a director must avoid a situation where he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the Company’s interests. The new duty is very broad and could apply, for example, if a director becomes a director of another company or a trustee of another organisation. It is due to take effect on 1st October 2008.

The Companies Act 2006 allows directors of public companies to authorise certain conflicts and potential conflicts where the articles of association contain a provision to this effect. Resolution 10 is a special resolution which amends the Articles with effect from 1st October 2008 (or any date on which Section 175 of the Companies Act 2006 comes into effect) to reflect the coming into force of these new provisions so as to give the directors power to authorise situations of actual or potential conflict which might otherwise put a director in breach of his new obligations.

There are safeguards which will apply when directors decide whether to authorise a conflict or potential conflict. First, only independent directors (i.e. those who have no interest in the matter being considered) will be able to take the relevant decision, and secondly, in taking the decision the directors must act in a way they consider, in good faith, will be most likely to promote the success of the Company for the benefit of members as a whole. The directors will be able to impose limits or conditions when giving authorisation if they think this is appropriate.

Directors’ service contracts and interests in the Company’s shares
The unexpired period of Directors’ service contracts and the interests in the shares of the Company of the Directors who were in office as at 31st December 2007 are fully disclosed in the Remuneration report.

Directors’ and officers’ liability insurance
Article 155 of the Company’s Articles of Association provides, among other things, that, insofar as permitted by law, every director shall be indemnified by the Company against all costs, charges, expenses, losses or liabilities incurred in the execution and discharge of the directors’ duties, power or office.

The Company maintains Directors’ and officers’ liability insurance, which is reviewed annually and is considered to be adequately insured.

Financial risk management
Disclosures in respect of financial risk management objectives and exposures are set out in note 16.

Charitable and political donations
Charitable donations during the year, principally to local charities serving the communities in which the Group operates, were £56,600 (2006: £26,100). No political donations were made during the year (2006: £Nil).

Other substantial interests
At the date of this report, the Directors have been notified of the interests in 3.0 per cent or more of the Company’s issued share capital shown in the table below.

  Number of shares %
F & C Asset Management PLC 4,470,872 11.02
Aberdeen Asset Management PLC 3,194,000 7.87
AXA SA 2,035,106 5.02
Henderson Global Investors Limited 2,034,723 5.01
Standard Life Invesments Limited 1,733,827 4.27
Legal & General Group PLC 1,651,098 4.07
Chelsfield Partners LLP 1,646,681 4.06
Stichting Pensioenfonds ABP 1,583,892 3.90
Prudential PLC Group of Companies 1,401,086 3.45


The Group is committed to the principle of equal opportunity in employment. Current and potential employees are offered the same opportunities regardless of gender, race, colour, religion, nationality, ethnic origin, age, sexual orientation, marital status or disability. It is the Group’s policy to apply best practice in the employment of the disabled, including, wherever possible, the retraining and retention of staff who become disabled during their employment.

Payment policy
Amounts due to suppliers are settled promptly within their terms of payment, except in cases of dispute. The number of creditor days outstanding for the Company at 31st December 2007 was two days (2006: two days).

A resolution to appoint PricewaterhouseCoopers LLP as the Company’s auditors will be proposed at the forthcoming Annual General Meeting.

Disclosure of information to auditors
Each Director has confirmed that:

  1. So far as he/she is aware, there is no relevant audit information of which the Group’s auditors are unaware, and;
  2. He/she has taken all the steps that he/she ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Group’s auditors are aware of that information.


This confirmation is given in accordance with Section 234ZA of the Companies Act 1985.

Approved by the Board of Directors
Signed on its behalf by:
S A Lanes
8th April 2008


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