Berkeley Group Holdings PLC (BKG) 2004年年度報告「LSE」.pdf

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1、The Berkeley Group plcAnnual Report 2004The Berkeley Group is Britains leading urbanregenerator.For over a decade Berkeley has beentransforming redundant urban land into vibrant andsustainable new communities.Its exceptional management team has consistentlydemonstrated that it has the skills and vis

2、ion to convertcomplex urban sites into critically acclaimed mixed-usedevelopments which deliver the level of quality andvariety expected by its customers.The Groups financial strength combined with itspioneering approach to land development consistentlydelivers value to its investors.1 St George Wha

3、rf,SW82 Gunwharf Quays,Portsmouth3 The Hamptons,Worcester Park,Surrey4 Building 45,The Royal Arsenal,Woolwich,SE185 Chelsea Bridge Wharf,SW813452Financial Results18 Board of Directors and Advisers20 Directors Report23 Remuneration Report38 Corporate Governance43 Independent Auditors Report44 Consoli

4、dated Profit and Loss Account45 Consolidated and Parent CompanyBalance Sheets46 Consolidated Cash Flow Statement47 Reconciliation of Movements inShareholders Funds48 Notes to the Accounts66 Five Year Summary67 Financial DiaryAbout The Berkeley Group01 2004 Financial Highlights02 Who we are04 Chairma

5、ns Statement07 Operational Review16 Sustainabilitywww.berkeleygroup.co.uk12004 Financial HighlightsIPre-tax Profits:Up 4.1%to 230.2 millionIOperating Margins:Group housebuilding operatingmargins,excluding land sales,reduced to 17.6%from 18.6%asBerkeley exits non-core marketsIEarnings per Share:Incre

6、ased by 12.7%to 130.7 penceIProposed Final Dividend:16.5 pence per share,making a total dividend of 22.3 pence pershare,an increase of 16.1%(2003:total of 19.2 pence)INet Asset Value per Share:Up 14.1%to 946 penceINet Cash:288.2 million cash generatedconverting net debt of 143.0 millionto net cash o

7、f 145.2 millionIROCE:Increased to 21.4%from 19.3%last yearILand Holdings:Up to 26,654 plots from 25,850 last year endIForward Order Book:Strengthened to 945.3 million(2003:920.9 million)IShare Buy-Back:7.0 million(5%)shares bought back for 52 millionIStrategic Review:Berkeley has concluded a strateg

8、icreview,the outcome of which is thatthe Group will in future focus on its urban regeneration business.In consequence,it intends to return12 per share to shareholders in cashover the next six years150125100755025067.991.6105.3116.0130.720002001200220032004Earnings per share(pence)252015105012.914.91

9、6.519.222.320002001200220032004Dividends per share(pence)1000750500250055362871782994620002001200220032004Net assets per share(pence)www.berkeleygroup.co.uk2Who we are12Berkeley is a leader in thebusiness of urban regenerationin Britain.Over 95%of Berkeleysdevelopments take place onbrownfield land.J

10、im Farrer and Tony Pidgley,the Groups Managing Director,founded Berkeley over aquarter of a century ago.Berkeley has been one of theoutstanding successes of theland development industry.Berkeleys unrivalled understanding of the landdevelopment and home building markets isbuilt on a matrix of key fac

11、tors:Pioneering VisionManagement ExpertiseSuperb Land HoldingsProduct Quality and DiversityMarketing FlairFinancial StrengthUnderpinning the success of Berkeley is apowerful combination of its willingness toinnovate and take on projects most others shy away from.Allied to this is a confidencethat fl

12、ows from the experience and financialstrength Berkeley has built up over the pastdecade and more.No other company hassuch a breadth and depth of managementexperience,gained at the cutting edge of thehome building industry.Berkeley:Encourages innovationRewards entrepreneurial flairNurtures its strong

13、 brandsNever forgets the demands of a cyclical industryHas built a sound capital base Invests in new opportunitieswww.berkeleygroup.co.uk3Berkeleys vision is delivered through a number of stronglybranded divisions.These are managed in an autonomousmanner,but each is able to draw on the financial str

14、engthand management experience at the heart of the Group.1 The Pumphouse,New River Village,Hornsey,N82 Leybourne Lakes,Larkfield,Kent3 Salamanca Square,Albert Embankment,SE14 Brewery Square,Clerkenwell,EC134One of the most respected propertydevelopers in London and the South-East of England.With 25

15、years of experience,itsportfolio includes contemporary apartments,traditional townhouses,conversions of period buildings and a range of mixed-use developments.Gunwharf Quays,one of Berkeley Homes keyregeneration sites,recently beat 180 otherentries to win English Partnerships covetedPartnership in R

16、egeneration Award alongsidea BURA(British Urban RegenerationAssociation)Best Practice Award.Crosby takes a leading role in the renaissance of cities outside of the South-East with majordevelopments across the Midlands and the North of England.This is the Groups dedicated commercialproperty developer

17、 and investor,with successesto its name such as the award winningredevelopment of Gunwharf Quays inPortsmouth.This is a company established by the Groupto create new sustainable settlements and help meet agreed housing needs in the countryside.This is the Groups dedicated developer of key worker and

18、 student accommodation.It delivers well designed and convenientlylocated affordable homes that key workersand students can feel proud of.Londons leading mixed-use developer.In 2002,St George became the first propertydeveloper to be awarded the prestigiousQueens Award for Enterprise.This is a joint v

19、enture company founded in1997,between The Berkeley Group andThames Water.It has gained a formidablereputation for introducing a new level ofinnovation to home building in London andthe South-East.St John Homes operates exclusively in the outer North London boroughs and surroundingcounties.St John Ho

20、mes will be focusing onlarge-scale regeneration projects.www.berkeleygroup.co.uk4Chairmans StatementBerkeley operates a totally different business model tothe majority of other housebuilders,concentrating onhighly complex large-scale inner-city urban regenerationschemes on brownfield land.The succes

21、s of ourstrategy is evident in our financial performance.Berkeley is no longer a traditionalhousebuilder it is an urban regenerator.Berkeley concentrates on large-scaleurban regeneration projects,bringing newlife and vitality to neglected areas of ourtowns and cities.This process is complex,needing

22、immense vision,determinationand patience all of which requires a special cocktail of professionalmanagement and entrepreneurial flair.The success of our strategy is evident in our financial performance.Berkeleys focus accords with the publicpolicy agenda on housing,which aims for more mixed-use deve

23、lopment onbrownfield sites.For many years now,Berkeley has had a clearand consistent strategy of balancing earningsper share growth,cash generation and a well-bought land bank to give security of futureprofits.In the half-year statement,I describedour increasing focus on protecting asset valueand ge

24、nerating cash flow as opposed toconcentrating primarily on the profit and lossaccount.This reflected our anticipation of amore normal housing market and alsorecognised the fundamental changes taking place within Berkeley.Strategic ReviewBerkeley operates a totally different businessmodel to the majo

25、rity of other housebuildersas we have chosen to concentrate mainly onhighly complex large-scale inner-city urbanregeneration schemes on brownfield land.Here,our unique mix of skills createsenhanced returns for our shareholders anddelivers benefits for all our stakeholders.During the year the Board o

26、f Berkeley has carried out a full strategic review,inconjunction with the Companys advisors,to assess the best route for deliveringshareholder value.This has taken place in the context of the Boards views about theoutlook for achieving sustainable growth in the markets in which it operates where the

27、re appears to be a natural size for aresidential urban regenerator and takes into account the normalisation of the housingmarket following a decade of boom and anumber of other external factors.The Board developed a number of strategicoptions,which included continuing to growthe business which requi

28、red furtherinvestment and new management teams disposing of the business,or selling off ordemerging individual divisions.All wererejected as not being in the best interest ofshareholders.After careful consideration theBoard has decided to leave behind Berkeleystraditional housebuilding heritage and

29、focusprimarily on larger scale complex regeneration.This route will return substantial capital toshareholders while enabling Berkeley tocontinue to buy land selectively whenattractive opportunities arise in the urbanregeneration market.Critically,it is a path that will retain staff to ensure the sus

30、tainabilityand future of the business with our mainchallenge now being to realise the valuecontained within our strong land bank.The working capital requirement of this more focused business enables Berkeley to propose to return 12.00 per share toshareholders in cash over the next six years to 2010,

31、a total of over 1.4 billion,whilemaximising the value of the continuingbusiness.We plan to return 600 million in the current year.These proposals are subjectto shareholder approval and further details areexpected to be published in August in time forshareholders to consider and approve theseproposal

32、s at the Annual General Meeting on27 August 2004.The Board believes this is a unique way ofenhancing shareholder value while retainingsufficient working capital to fully realise the value within our current and future land holdings.These proposals will be discussed withshareholders over the next two

33、 months and it is expected that a resolution will be tabled in August with the first return of cash toshareholders later this year.The Board believes it is appropriate in the light of the proposed restructuring to reviewthe Remuneration Policy so that it alignsmanagements incentives with achievement

34、 of the return of capital and maximising thevalue of the continuing business.This will also be subject to a consultation process with shareholders.Financial ResultsDuring the 12 months ended 30 April 2004,Berkeley continued its strategy of organicgrowth and we are delighted to announcepre-tax profit

35、s of 230.2 million,an increase of 4.1%for the same period last year.Earnings per share rose by 12.7%from 116.0p to 130.7p.Three factors contributedto this growth;increased pre-tax profits(4.1%),share buy-backs(7.5%)and areduction in the effective tax rate(1.1%).www.berkeleygroup.co.uk5Roger LewisCha

36、irmanShareholders funds increased by 88.4 million to 1,144.5 million(30 April2003:1,056.2 million)an increase of 8.4%.Net assets per share stand at 946p,an increase of 14.1%.The increase inshareholders funds takes account of sharebuy-backs of 52.4 million in the year.Shareholders funds will be furth

37、er reduced in 2004/5 by 20.5 million following sharebuy-backs completed after the year end.Since December 2002,Berkeley haspurchased and cancelled 15,874,138 sharesat a cost of 114.2 million.This equates to an average price of 7.19p a share,at adiscount of 24%to the 30 April 2004 netasset per share

38、value.Return on Capital Employed was 21.4%,up from 19.3%last time.This has increasedprimarily due to Berkeleys retirement from theGunwharf Quays limited partnership.At 30 April 2004 Berkeley had net cashbalances of 145.2 million(30 April 2003:net debt of 143.0 million)after generating288.2 million o

39、f cash flow in the year.Thishas resulted from operating cash flow of215.5 million and a reduction in workingcapital of 220.4 million,offset by the 52.4 million used to buy-back shares,taxand dividend payments totalling 78.1 millionand other cash flows of 17.4 million.DividendsThe Directors are pleas

40、ed to recommend a final dividend of 16.5p net per share.Thisdividend,together with the interim dividend of 5.8p net per share paid in February 2004will make a total dividend of 22.3p anincrease of 16.1%over the 19.2p paid lastyear.The cost of the final dividend will be19.5 million and will be payabl

41、e on 9 September 2004 to shareholders on theregister on 13 August 2004.The current dividend policy of the Group is tomove towards a better balance of interim andfinal dividends,taking into account the moreeven split of pre-tax profits and maintainingthe cover ratio.If the corporate restructuringprop

42、osals,set out in this announcement areapproved,it is not envisaged that there will beany further payments to shareholders outsidethe scheduled capital repayments,unlesssurplus capital is generated.Trading AnalysisGroup turnover was 1,272.4 million(2003:1,150.8 million).This comprises1,130.1 million(

43、2003:1,130.1 million)of residential turnover and 142.3 million(2003:20.8 million)of commercial turnover.During the year Berkeley sold 3,805 houses at an average selling price of 283,000.Thiscompares with 3,544 houses at an averageselling price of 315,000 in the previous year.In the financial year th

44、e Group realised 11.4 million from eight land sales(2003:8.8 million).The Groups policy has alwaysbeen to take advantage of suitable land saleopportunities.That said,its performance doesnot depend on realising such opportunities.At 142.3 million(2003:20.8 million),Groupcommercial turnover reflected

45、the disposal of commercial units on 14 mixed-use sitesincluding 98.8 million from Gunwharf Quays.Now that the retail and leisure phase ofGunwharf Quays is substantially complete,Land Securities has taken full control of thiselement.In aggregate,Land Securities plc willpay Berkeley around 170 million

46、,of which163 million had been received by 30 April2004.The remainder is paid in tranches,thetiming of which will be related,initially,to thebase rents secured,and one year thereafter,to the level of turnover rents.The final amountpayable will depend on the turnover elementof the rents received.The G

47、roups share of joint venture turnovertotalled 123.7 million(2003:99.3 million).This comprises 121.0 million(2003:91.4 million)from residential projects and 2.7 million(2003:7.9 million)fromcommercial schemes.The number of unitssold was 1,034 with an average price of225,000,compared to 637 units at a

48、naverage selling price of 211,000 in theprevious year.The housebuilding operating margin,excluding joint ventures and land sales,hasdecreased from 18.6%to 17.6%.This fall isas a result of a number of factors includingthe Crosby transaction,the exit fromtraditional business both in Crosby andBerkeley

49、 Homes,and the closure ofThirlstone.As mentioned in the half-yearstatement,the Group has taken a reducedoperating margin in over-supplied markets in order to sell forward more aggressively.Over recent reporting periods,the Group has achieved operating margins in a range of 18.5%to 19.5%,depending on

50、 mix.Weexpect to achieve a similar range in the nextfinancial year and to increase it if currentmarket conditions prevail.Joint ventureoperating margins are 17.7%,compared to 16.7%last year.www.berkeleygroup.co.uk6The success of the Group in achieving itsbusiness objectives over the past year has be

51、enpossible only through the exceptional performanceof our people.On behalf of the Board andshareholders,I would like again to express ourcontinued thanks and appreciation to them all for their commitment and dedication.Corporate GovernanceAt the Annual General Meeting in August2003,Berkeley made cer

52、tain commitmentsregarding both its Executive remunerationpolicy and the structure and balance of theBoard of Directors.I am pleased to reportsignificant progress on both counts.Following a detailed consultation process with major shareholders and institutionalshareholder bodies such as the ABI,NAPFa

53、nd PIRC,a new remuneration policy waspresented to shareholders for approval at anExtraordinary General Meeting in February2004.Shareholders demonstrated theirsupport with 94%of votes cast approving the new remuneration policy.In December 2003,Fred Wellings resignedfrom the Board,having served as a N

54、on-executive Director for nine years mostrecently as Chairman of the Audit Committeeand as the Senior Independent Non-executiveDirector.Berkeley is most grateful to Mr Wellings for his contribution to the Groupduring this time.Following his resignation,Tony Palmer was appointed SeniorIndependent Non

55、-executive Director.In February 2004,we were delighted to welcome David Howell to the Board.Mr Howell is the Chief Financial Officer plc and was previously GroupFinance Director of First Choice Holidays plcand a Non-executive Director of NestorHealthcare Group plc.In assuming the role of Chairman of

56、 the Audit Committee,hiscurrent and relevant financial experience hasbeen utilised in its fullest capacity to theimmediate benefit of the Group and balanceof the Board.The Board now comprises the Chairman,fourExecutive Directors and three Non-executiveDirectors.In accordance with statementsmade earl

57、ier in the year,and the provisions of the New Combined Code,the Board iscontinuing to seek a further Non-executiveDirector to achieve the board balance set out in the New Combined Code.Our PeopleThe success of the Group in achieving itsbusiness objectives over the past year hasbeen possible only thr

58、ough the exceptionalperformance of our people.Berkeleycontinues to operate a highly entrepreneurialautonomous and customer focused businessculture,coupled with sound business andcorporate disciplines.This has allowed theGroup to recruit,retain and develop highlytalented and experienced people.On beh

59、alf of the Board and shareholders,I would likeagain to express our continued thanks andappreciation to them all for their commitmentand dedication.SustainabilityThis year the Board publishes its third annual Sustainability Report which records our ongoing commitment to sustainabledevelopment.We were

60、 greatly encouragedthat our approach to sustainability reportingwas commended by a landmark reportcommissioned by the World Wildlife Fund(now known as WWF the GlobalEnvironment Network)and InsightInvestments.The Report assessed the UKsleading housebuilders against a wide range of sustainability crit

61、eria and Berkeley scored70%,placing it second overall.OutlookBerkeley has been operating primarily inmarkets where sales price growth has beenconstrained and volumes have been in linewith expectations that flow from more normalmarket conditions.Berkeleys operationalmodel is to enhance shareholder va

62、lue,producing homes where our customers wish to live and minimising risk as far aspossible.Berkeley is well placed to continueachieving these objectives with an unrivalledland bank,strong forward sales and a focusedmanagement team dedicated to the continuedsuccess of the business.The normal housing

63、market that now exists in the UK plays to all of Berkeleys strengths:location,quality and choice.With our newfocus as an urban regenerator,our strongforward order book and our substantial landbank to develop,Berkeleys shareholders haveevery reason to look to the Companys futurewith confidence.Roger

64、LewisChairmanwww.berkeleygroup.co.uk7 71 St George Wharf,SW8Operational Review1Our strength is our ability to manage the Group to perform strongly,minimising risk whatever thestate of the housing market or the economicconditions that prevail.IntroductionIt is now 28 years since I founded The Berkele

65、yGroup.At that time,my vision which hasremained constant over these three decades was to create a property company which wasnot only highly successful but which alsopioneered new ways of working in partnershipwith all the stakeholders involved in the processof land development.I believed then and st

66、ill do that there was a path that could createtrue harmony between the requirements of our shareholders,employees,customers,government,regional bodies and localauthorities.This is the journey that has takenBerkeley to its position today as Britainspremier urban regenerator.Reaching this point has on

67、ly been possible by a strategy of genuine partnership and thealignment of interests of our stakeholders.Our shareholders have always looked for valuecreation over the long term and the security ofknowing that their business is being managed by safe hands.I believe that our strategy hasachieved these

68、 objectives and will continue to do so going forward.Berkeley has always had a well-founded,clearand consistent strategy and the vision andexpertise to deliver it.At the heart of thecompany is a recognition that adding value toland through development requires a hands-onapproach.Our ability to close

69、ly manage thedevelopment process has been critical to thesuccess of Berkeleys strategy.Berkeleys objective has always been to own and develop an unrivalled land bank and havethe expertise to build and sell the homes created.In our view,to maximise shareholder value ourbusiness has to combine plannin

70、g anddeveloping excellence with marketing flair.Theskills required are hugely varied hence theintensive nature of our management approach.We have a highly trained management team inplace to continue delivering our strategy for thebenefit of all our stakeholders.This team has anatural size and combin

71、es extensive experiencealongside a carefully selected group of youngerpeople.Together this management team offerssuccession in abundance and this preparation forthe future is something for which we continue toplan and nurture our talent.At the heart of Berkeleys success is a uniquelytalented and exp

72、erienced management team,driven by entrepreneurial flair and an unrivalledpractical understanding of the land and propertymarket.Berkeley has always recognised that partof its strength has been built on the committed,hard working and imaginative people it employs.But the success of our business mode

73、l also rests on the manner in which we create ourteams,generating results far in excess of thesimple sum of individuals.Such a performance is not achieved without the commitment,dedication and expertise of our staff.On behalf of the Board and shareholders,I would like,inaddition to the Chairman,to e

74、xpress our sincereappreciation and thanks to them all.Our peopleare our life blood.Meeting the needs of our customers has beenkey to the success of Berkeley and will continueto be our central focus.Every customer has theirown requirements and each looks for a differentexperience whether an investmen

75、t opportunity,a house to live in on their own or with their family,a weekend retreat or a pied-terre in the centreof one of our great cities.To meet these manyand varied expectations,Berkeley must producewww.berkeleygroup.co.uk8homes in locations which appeal to ourcustomers and create the communiti

76、es of tomorrow.As an issue of public policy,housing is growing in importance whether as a result of the Barker Review into the supply of housing,thework of the Office of the Deputy Prime Minister,the Greater London Authority or other national,regional and local statutory agencies orrepresentative bo

77、dies.Berkeley is well placed to capitalise on this public policy focus.Only through active partnership between allstakeholders of the sort Berkeley has alwayspioneered will we be able to deliver the urbanregeneration projects required in order to meet housing needs in a sustainable manner.One exampl

78、e of this partnership approach is theRoyal Arsenal at Woolwich where Berkeley isworking with the London Borough of Greenwich,the London Development Agency and EnglishHeritage on a large-scale development project which will make a major contribution to theregeneration of the area.True partnerships ha

79、ve at their heart an alignment of interests and the bringing togetherof Thames Water and The Berkeley Groupthrough St James to bring redundant land backinto use to create sustainable communities is agreat example of this.These partnerships meetthe ambition of local and central government tomeet hous

80、ing needs in a sustainable mannerwhile providing attractive places to live for peopleacross all income ranges who are looking forhomes to live in.Review of the YearThe year under review has been very significant for Berkeley as we have very largely completed our transformation from a traditional hou

81、sebuilder into a mixed-useurban regenerator.This has gone hand in hand with a number ofother notable achievements that have all beenpart of our strategy to refocus Berkeley as amore simple business but one capable ofcarrying out the most demanding and complexregeneration schemes.These achievements i

82、nclude:Turnover and profits at a record level.The conversion of net debt of 143 million at30 April 2003 into positive net cash balancesof 145.2 million as at 30 April 2004.A strong sales performance with the forwardsales position at 30 April 2004 being evenhealthier than the previous year.The creati

83、on of a new approach and structurefor Crosby that generates significant cash forthe Group and motivates management.The exit from the Gunwharf CommercialPartnership,and once again generatingsignificant funds for the Group.The further strengthening of our strong land position.Business is not about cha

84、nce and theseachievements have been the result of a wellfounded and consistent strategy and have been delivered through the dynamics of ourpeople who add value at every stage of thedevelopment process,be it land optimisation or product enhancement.Much is currently being written about theprospects o

85、f the housing market,the challengesof land supply and the planning system and thefuture of the economy.Our strength is our abilityto manage the Group to perform strongly,minimising risk whatever the state of thehousing market or the economic conditions thatprevail.We believe that the current strateg

86、y ofBerkeley to focus primarily on being an urbanregenerator will enable us to continue to deliver astrong performance for our shareholders and allour stakeholders.Berkeley is now one of the leaders in thetransformation of regeneration in urban Britainand our views and expertise are widely soughtby

87、policy makers all over the country.Berkeleyhas achieved this respect by its willingness towork in partnership with key stakeholders,bybeing prepared to pioneer and through the abilityof its management to undertake the mostcomplex and challenging urban regenerationschemes,creating mixed-use schemes a

88、ndplaces for people to live.The Housing MarketSince 2001,the housing market has gonethrough a number of mini cycles,as can be seen in terms of reservation levels.The first halfof 2001/2(May 2001 to October 2001)was anormal market,while the second half(November2001 to April 2002)was unexpectedly buoy

89、ant,returning to more normal conditions in the firsthalf of 2002/3.This gave way to weak marketconditions in the second half of 2002/3,as aresult of uncertainty caused by world events.The market then returned to more normalconditions through the financial year 2003/4.In addition,reservations to inve

90、stors in 2003/4have exceeded 50%a reassuringdemonstration of the continuing strength of the investment market.The market,particularly in London and the South-East,continues to provide a stable environmentin which to operate.Increases in sales pricesdepend heavily on location,type of developmentand s

91、tage of construction and are running at3.0%to 8.0%above our business plan forecast,at levels similar to the first half.Build costs remainunder pressure and this has intensified in the last six months with the continuing shortage oflabour coupled with the improvement in worldeconomies.Indirect costs,

92、including landfill taxand insurances,have also increased in the year.When coupled with the planning uncertainties,an increase in the affordable housing requirementand Section 106 planning gain payments,it isclear that sales price inflation may no longercover increased costs,thus putting pressure onl

93、and values and operating margins.Nevertheless,high employment levels,especially in London and the South-East combined with interest ratesthat are still historically low despite recentincreases continue to underpin consumerconfidence.At the same time,constraints insupply are likely to continue as a r

94、esult ofplanning delays and the complexity of delivering urban regeneration schemes.Operational Reviewwww.berkeleygroup.co.uk912The normal housingmarket that now exists in the UK plays toBerkeleys key productstrengths:location,quality and choice.1 Wycombe Square,Kensington,W82 The Vulcan,Gunwharf Qu

95、ays,Portsmouth Prior to refurbishmentwww.berkeleygroup.co.uk1012Our sales results this year wereexcellent and I am especiallypleased at the improvement froma great start in our forward salesposition.This is the strength of astrategy that secures an earlycommitment from the customer enhancing the qua

96、lity of futureincome and security in the profit and loss account.1 The Royal Arsenal,Woolwich,SE182 Lyme Wharf,Camden,NW1Operational Reviewwww.berkeleygroup.co.uk11Berkeley has been very selective in the landmarket and has found prices to be extremelycompetitive,especially for sites below 10 million

97、,or for ready to go sites with planning permission.In the Groups full year targets for 2004/5,57%of sales are of units with selling prices under300,000 and 87%of sales are of units under500,000.Given that this end of the market has been performing most strongly,we shouldachieve these forecasts as lo

98、ng as we producehomes in locations where people want to live.The housing market is now what I would regardas normal but thats the type of market we like at Berkeley.It plays to our key productstrengths:location,quality and choice.And itenables our innovative marketing teams to makefull use of our di

99、stinctive brands to communicatethose strengths.Forward SalesOur sales results this year were excellent and I am especially pleased at the improvement from a great start in our forward sales position.This is the strength of a strategy that secures an early commitment from the customer enhancing the q

100、uality of future income andsecurity in the profit and loss account.Berkeleys strategy continues to be to sell homesat an early stage in the development cycle as this secures purchasers commitments and,consequently,the quality of future revenue.Thisstrategy has always stood the Group in goodstead but

101、 is particularly important when there isless vigour in the market.It is positive,therefore,that the Group has increased its forward salesposition from 920.9 million at this time last year,to 945.3 million at 30 April 2004.Of this,156.4 million(2003:229.0 million)is includedas debtors in the balance

102、sheet,with theremaining 788.9 million(2003:691.9 million)benefiting the current year and future years.Land HoldingsBerkeley has always been known for the scaleand quality of its land holdings.This year wevetaken that to a new level.During the year theGroup has more than replaced the number ofplots u

103、sed in production while at the same timegenerating more than 350 million from operatingcash flow and working capital.Berkeley nowcontrols 26,654 plots.This compares with25,850 plots at 30 April 2003.The land market remains highly competitive and Berkeleymaintains strict investment criteria that have

104、 led the Group to withdraw from a number of opportunities.Notwithstanding this,the Group has acquired a number of significant urban regeneration sitesduring the year.The most notable of these is thedevelopment agreement entered into with theLondon Development Agency for 2,000 homesat The Warren,a si

105、te adjacent to the Groupsexisting development at Royal Arsenal,Woolwich.In addition to this,the Group hasacquired a site of 800 units in Gillingham,a 550 unit site at Stanmore,a 290 unit site on a cold storage facility in Sevenoaks,and agreed a 600 unit site at Hillingdon.Furthermore,duringthe year,

106、the Group has continued to review itsexisting holdings,maximising densities where thisis compatible with local planning objectives andpolicy.This has been achieved at Redbank inManchester where the development has beenenhanced by a further 350 units,Clarence Dockin Leeds(a further 270 units),St Geor

107、ge Wharf(a further 140 units)and the residential phase atGunwharf Quays(a further 200 units).At 30 April 2004,of the plots controlled by theGroup,21,449(2003:19,459)are owned and on the balance sheet,while 4,315(2003:3,358)are contracted and a further 890(2003:3,033)have terms agreed and solicitors

108、instructed.Over 95%of our land holdings are on brownfieldor recycled land.This is the backbone of our business.Joint VenturesBerkeley currently has 67.9 million of capitalemployed in joint ventures,an increase of 11.2 million from last years figure of 56.7 million.Our share of joint venture bank bor

109、rowings has risen by 7.8 million to 78.7 million.Berkeleys largest joint venture company is St James,which is jointly owned with ThamesWater.St James is currently developing 2,416Berkeley has always beenknown for the scale andquality of its land holdings.This year weve taken that to a new level.www.

110、berkeleygroup.co.uk1212Our patient approach to development bringsvalue to redundant land and generates realreturn for our shareholders as well asimmense benefits to local communities.Operational Review1 New River Village,Hornsey,N82 Chelsea Bridge Wharf,SW8www.berkeleygroup.co.uk13Few other companie

111、s havesuch a breadth and depth ofmanagement experience,gained at the cutting edge ofthe home building industry.homes within the business,with a similar numberbeing worked up with Thames Water on potentialfuture sites.Berkeley is committed to developing ourpartners land holdings through joint venture

112、s if there is a mutual benefit so to do.Crosby GroupOn 28 August 2003,we announced thetransaction whereby the Crosby managementteam,led by its Chairman Geoff Hutchinson,subscribed for shares in Crosby which,after thegeneration of 450 million of operating cash flow,will entitle them to 50.01%of the e

113、conomic andvoting rights in Crosby.I am delighted that at 30 April 2004,Crosby was ahead of its business plan and generated74 million of operating cash flow in the year.I am particularly pleased that,despite taking over1,000 units to sales in the year,Crosbys landbank has increased to 5,124 plots at

114、 30 April2004,compared to 4,815 a year previously.Given the reduced level of land buying withinCrosby,this largely reflects the value optimisedfrom the land bank and is just one example ofhow this innovative transaction has motivated the senior management team to achieve anenhanced performance.Gunwh

115、arf QuaysI am very proud of Berkeleys contribution to thehistoric city of Portsmouth.Our Gunwharf Quaysdevelopment has been an engine of regenerationfor the city and I hope this will spread in thefuture to new schemes,such as Royal ClarenceYard in Gosport.During this year our partner in the commerci

116、alproperty development at Gunwharf Quays,LandSecurities,took full control of this element forwhich we have been paid 163 million to date.This is a fantastic achievement for Berkeley andis a perfect example of how our patient approachto development brings value to redundant land and generates real re

117、turn for ourshareholders as well as immense benefits to local communities.Its also a demonstration of how Berkeley can meet challenges that some others shy away from.Management StructureBerkeleys confidence flows in part from theexperience weve built up in our managementteams over the last decade.Fe

118、w othercompanies have such a breadth and depth ofmanagement experience,gained at the cuttingedge of the home building industry.But we areconstantly looking at new ways to apply thatexperience in more potent ways for the benefit of our shareholders and customers.Last year we accelerated the simplific

119、ation of ourmanagement structure as we continue to moveaway from developing small sites to large andmuch more complex urban regenerationprojects.These much more complex projectsrequire dedicated management teams focusedon individual sites.It also means we can growwithout adding overheads.Indeed,in t

120、he lastyear our overhead cost was down by over 5%.At the year end,the Group had ten divisions,and26 operating companies,six of which are singleproject-led operations.Last year,the Grouprecorded sales from in excess of 130 sites.This year that will reduce to around 100.Health,Safety and the Environme

121、ntThe Berkeley Group remains committed to itsobjective of continuous improvement of health,safety and environmental standards to ensurethat our sites and workplaces are safe places inwhich to operate.We continually work to reducethe number of incidents that occur to theminimum possible.Last year we

122、committedourselves to achieving a 10%reduction in ournotifiable incident rate which stood at 10.2 per1,000 workers.I am delighted to be able to report that we have exceeded that target with a reduction in notifiable incidents to 7.26 per1,000 workers.This is a great tribute to ourhealth and safety t

123、eam and our entire workforce.AwardsThis year,The Berkeley Group has once again won a number of notable awards for itsachievements.I am delighted by this externalrecognition of the commitment and hard work of our staff and the excellence of our business.A highlight of the year was Berkeley Homesgreat

124、 success in winning English Partnershipscoveted Partnership in Regeneration Award forits exemplary partnership with Portsmouth CityCouncil in regenerating Gunwharf Quays.The scheme was chosen out of 180 entries andalso picked up a prestigious BURA(British UrbanRegeneration Association)Best Practice

125、Awardas an example of outstanding regeneration.Berkeley Homes was also awarded theCommission for Architecture and the BuiltEnvironment Five Festive Fives Award inrecognition of its role in championing greatarchitecture and design.Berkeley Group divisions also gained awardsfrom the Evening Standard,W

126、hat House and the British Safety Council as well as Health andSafety Awards from the Royal Society for thePrevention of Accidents.Barker ReviewThis year saw the publication of the BarkerReview into the under supply of housing.The Berkeley Group welcomed its recognition of the significant constraints

127、 placed upon housingwww.berkeleygroup.co.uk14Operational Review1I am delighted that Berkeley has becomeBritains premier urban regenerator.As a result,Berkeley is now in a uniqueposition with a model that is cashgenerative and which adds value through the development process.supply by a combination o

128、f the shortage of landavailable for development and the planningsystem.We believe that there is a need forregeneration to be more actively championedamong decision makers at local level to ensurethat there is a clear understanding of the benefitsto local communities and to balance the negativevoices

129、 which are traditionally the loudest in theplanning process.Over the coming year Berkeleyis committed to playing its full part in the publicdebate over planning and to continuing toimprove the means by which we consult andcommunicate with local people.The FutureSo,thats the last year,and the story o

130、f how our strategy has taken us here.But what aboutthe future?Berkeley is a very special company,with abusiness model different to other majorhousebuilders.We concentrate on large-scaleurban regeneration,extracting value fromredundant land.That process is complex andrequires huge vision,determinatio

131、n and patience.That needs a certain kind of professionalmanagement,with a large dose ofentrepreneurial skillAnd we have been very successful attransforming Berkeley into a company thatspecialises in this most contemporary form ofdevelopment.Our results speak for themselvesand everyone with a stake i

132、n the Company gainsas a result.We also feel our business model is one thatperforms whether the market is in boom or,as itis now,normal.This is another reason why weare so keen to preserve our unique approach.And our positioning is also well aligned with the public policy debate on housing.TheGovernm

133、ent has recognised the need for asignificant expansion in the construction of newhomes and that this will require action to removethe blockages in the planning system.The Barker Review was an important recognitionof current constraints on the housebuildingindustry but this agenda is going to develop

134、 over the coming years and the focus is onregenerating exactly the sort of brownfield sites that Berkeley has such an expertise in transforming.I am delighted that the Board has set out a clearstrategy for the future and has the expertise toexecute it.The alignment of the aims of ourshareholders,our

135、 people and our customers is of paramount importance and Berkeley is wellplaced to continue producing an enhancedperformance whilst minimising risk.I look forward to the year ahead and movingBerkeley towards being the most efficientproperty company performing at its natural size.Tony PidgleyManaging

136、 Directorwww.berkeleygroup.co.uk15231 The Granary&Bakery,Royal Clarence Yard,Gosport Prior to refurbishment2 No.1 Deansgate,Manchester3 Gunwharf Quays,Portsmouthwww.berkeleygroup.co.uk161 Berkeley Graduate Scholarship Trainee*2 Gunwharf Quays,Portsmouth 3 Royal Clarence Yard,Gosport Prior to refurbi

137、shment4 The Royal Arsenal,Woolwich,SE18*Computer generated image123www.berkeleygroup.co.uk17SustainabilityOur approach to sustainability is an evolving onewhich draws on our experience of implementing a sustainability strategy over the past four years and aims to deliver continuing improvements in o

138、ur performance.The Berkeley Groups commitment tosustainability is founded upon our fundamentalresponsibility to maximise shareholder value.Oursustainability strategy assists us to meet this keygoal in two important ways.First,it reinforcesour commitment to continuous improvementthrough the structure

139、d monitoring and review ofall our procedures thereby giving the Companycompetitive advantage and so creating value.Second,it helps guide our focus on theregeneration of redundant land in major citiesacross the country.This has placed sustainabledevelopment at the heart of our businessstrategy and it

140、s a focus we will continue to pursue.We are pleased with the progress we haveachieved over the past year while conscious thatthere remain challenges ahead.Key importantmilestones for the Group this year have included:Commendation for our approach tosustainability reporting in a landmark reportcommis

141、sioned by the World Wildlife Fund(now known as WWF the GlobalEnvironment Network)and InsightInvestments.The Report assessed the UKsleading housebuilders against a wide rangeof sustainability criteria and Berkeley scored70%,placing it second overall.Continued participation in the Business inthe Envir

142、onment 8th Index of CorporateEnvironmental Engagement.Our score hereimproved for the third consecutive year.The roll out across the Group of an intranet,which is now the heart of ourinternal reporting systems for Berkeleyssustainability strategy.Maintaining a listing in the FTSE4Good and continued e

143、ngagement with sociallyresponsible investors.Initiation of a sustainability performancemanagement tool.Refinement of our key performanceindicator relating to waste.Real progress in the development of thedivisional implementation strategies.Our approach to sustainability is an evolving onewhich draws

144、 on our experience of implementinga sustainability strategy over the past four yearsand aims to deliver continuing improvements inour performance.As we reposition the Company over the comingyear to focus exclusively on urban regeneration,we will continue to develop the sustainabilityagenda throughou

145、t the business.4www.berkeleygroup.co.uk18Board of Directorsand Advisers216751 Tony Pidgley,56Co-founder of the Company in 1976 with JimFarrer.He is the Group Managing Director andChairman of the Executive Committee.2 Roger Lewis FCA,57Appointed Group Chairman on 1 February 1999.He joined the Company

146、 in 1991 and wasappointed a Group Main Board Director in early1992.He is a member of the ExecutiveCommittee and Chairman of the Nomination Committee.3 Tony Carey BSc FRICS,56Joined St George PLC in 1987 and wasappointed Managing Director of that division in 1990.He joined the Group Main Board in1993

147、 and is a member of the ExecutiveCommittee.4 Greg Fry ACA,47 Joined the Company in 1982 and has been aDirector of St George PLC from its inception in1986.He is currently Chairman of the divisionsfour principal operating companies.He wasappointed to the Group Main Board with effectfrom 1 May 1996 and

148、 is a member of theExecutive Committee.5 David Howell FCA,55Appointed a Non-executive Director on24 February 2004.He is currently the ChiefFinancial Officer and a Main Board Director of plc.He was previously GroupFinance Director of First Choice Holidays plcfrom 1998 to 2001 and served as a Non-exec

149、utive Director at Nestor Healthcare Groupplc from 2000 to 2003.He was appointedChairman of the Audit Committee on 24 February 2004 and is a member of the Remuneration Committee.6 Victoria Mitchell,53Appointed a Non-executive Director on 1 May2002.Formerly an Executive Director of Savillsplc,she is n

150、ow a Consultant Director of FPDSavills Limited,a Member of ING REIMResidential Property Fund Advisory Board,aNon-executive Director of The Golding Group(South Africa),and Development Securities plc.She was appointed Chairman of theRemuneration Committee on 11 June 2003 andshe is a member of the Audi

151、t and NominationCommittees.7 Tony Palmer FRICS FCIOB,67Appointed a Non-executive Director on1 January 1998,having retired as ChiefExecutive of Taylor Woodrow plc.He is currentlyChairman of Galliford Try and Pilkingtons TilesGroup.He is the Senior Independent Directorand is a member of the Audit,Remu

152、nerationand Nomination Committees.www.berkeleygroup.co.uk198348 Rob Perrins BSc(Hons)ACA,39Joined the Company in 1994 having qualified asa chartered accountant with Ernst&Young in1991.He was appointed to the Group MainBoard on 1 May 2001 on becoming ManagingDirector of Berkeley Homes plc,moving to h

153、is current role as Group Finance Director on 2 November 2001.He is also a member of theExecutive Committee.Honorary Life PresidentJim Farrer MRICS,73One of the two founders of the Company andwas Group Chairman until his retirement fromfull-time employment in 1992.At that time hewas appointed Honorar

154、y Life President.Company SecretaryElizabeth Taylor FCISRegistered office and principal place of business Berkeley House19 Portsmouth RoadCobham,Surrey KT11 1JGRegistered number1454064 RegistrarsCapita RegistrarsThe Registry34 Beckenham RoadBeckenham,Kent BR3 4TUTel:0870 162 3100Share Price Informati

155、onThe Companys ordinary shares arelisted on the London Stock Exchange.The latest share price is available via the Companys website atwww.berkeleygroup.co.uk.Solicitors AshurstSacker&Partners Shearman&SterlingStockbrokersUBS AuditorsPricewaterhouseCoopers LLPBankersBarclays BankLloyds TSB BankThe Roy

156、al Bank of Scotland Executive CommitteeA W Pidgley(Chairman)R St J H LewisA CareyG J FryR C PerrinsAudit CommitteeD Howell(Chairman)V M MitchellH A PalmerRemuneration CommitteeV M Mitchell(Chairman)H A PalmerD HowellNomination CommitteeR St J H Lewis(Chairman)V M MitchellH A Palmer20www.berkeleygrou

157、p.co.ukDirectors ReportThe Directors submit their report together with the financial statements for the year ended 30 April 2004.Principal activities and review of the businessThe Company is a UK listed holding company of a wider group engaged in residential housebuilding and commercial property inv

158、estment and development.The Chairmans Statement on pages 4 to 6 and the Group Managing Directors Operational Review on pages 7 to 14 provide more detailedcommentaries on the business during the year,together with the outlook for the future.Trading results and dividendsThe Groups consolidated net pro

159、fit after taxation for the financial year was 162,358,000(2003:154,684,000).An increased interim dividend of 5.8p per Ordinary Share(2003:4.8p)was paid on 12 February 2004 amounting to 7,089,000(2003:6,479,000).The Directors recommenda final dividend at an increased amount of 16.5p per Ordinary Shar

160、e(2003:14.4p)amounting to 19,507,000(2003:18,430,000)which addedto the interim dividend will make a total of 22.3p(2003:19.2p)per share of 26,596,000(2003:24,909,000)attributable to the year.The finaldividend,if approved,will be paid on 9 September 2004 to shareholders on the register on 13 August 2

161、004.The shares will be declaredex-dividend on 11 August 2004.The balance of 135,762,000(2003:129,775,000)has been transferred to the reserves.The terms of The Berkeley Group Employee Benefit Trust provide that dividends payable on shares held by the Trust are waived.The Groups joint ventures contrib

162、uted profits before taxation of 18,403,000(2003:13,525,000).Share capitalThe Company had 122,062,309 Ordinary Shares in issue at 30 April 2004.Movements in the Companys share capital are shown in Note 16 to the accounts.In order to improve the efficiency of the Companys share capital,during the year

163、,within the 10%limit authorised by shareholders at the 2003Annual General Meeting,the Company completed the purchase of 6,993,318(2003:6,786,559)of its shares for cancellation,at an average costof 7.44(2003:6.14)per share,for a total cost,net of expenses,of 51,998,948(2003:41,700,248).This represent

164、s 6%(2003:5%)of thecalled-up share capital of the Company at the start of the year.Subsequent to the year end,the Company purchased a further 2,094,261 sharesfor cancellation,at an average cost of 9.80,for a total cost,net of expenses,of 20,523,758.Of the 10%authority given at the 2003 AnnualGeneral

165、 Meeting,3.9%remains available to the Company at the date of this report.This authority expires at the conclusion of the forthcomingAnnual General Meeting at which a resolution will be proposed to renew the 10%authority for a further year.Information on the Groups current share option schemes is set

166、 out in Note 16 to the accounts.Details of the Long Term Incentive Schemes andLong Term Incentive Plan for key executives are set out in the Remuneration Report on pages 23 to 37.DirectorsThe Directors of the Company and their profiles are detailed on pages 18 and 19.All of the Directors served thro

167、ughout the year under reviewexcept Mr Howell who was appointed on 24 February 2004.Messrs.Sach,Hutchinson and Wellings resigned as Directors on 11 June,27 August and 5 December 2003 respectively.In accordance with the Articles of Association of the Company,Messrs.Palmer,Perrins and Lewis retire from

168、 the Board by rotation and,beingeligible,offer themselves for re-election at the forthcoming Annual General Meeting.Mr Howell,having been appointed since the last AnnualGeneral Meeting,retires from the Board under the terms of the Articles of Association and,being eligible,offers himself for re-elec

169、tion.The Directors interests in the share capital of the Company or its subsidiaries are shown in the Remuneration Report on page 37.There hasbeen no change in the interests of the Directors between 30 April 2004 and the date of signing of the accounts.At 30 April 2004,each of theExecutive Directors

170、 was deemed to have a non-beneficial interest in 1,077,317(2003:802,317)Ordinary Shares held by the Trustees of The Berkeley Group Employee Benefit Trust.21www.berkeleygroup.co.ukThere were no contracts of significance during,or at the end of,the financial year in which a Director of the Company is,

171、or was,materiallyinterested,other than those set out in Note 24 to the accounts,the contracts of employment of the Executive Directors,which are terminablewithin one year,and the appointment terms of the Non-executive Directors,which are renewable annually.Substantial shareholdersThe Company has bee

172、n notified of the following interests,amounting to 3%or more of the issued Ordinary Share capital of the Company,as at25 June 2004:Number of%of issuedshares heldshare capitalSaad Investments Company Limited and Mr Al-Sanea15,103,43812.6M&G Investment Management Ltd5,810,4004.8Orbis Investment Manage

173、ment5,135,0004.3Legal&General plc Companies3,903,9253.3DonationsDuring the year,donations by the Group for charitable purposes in the United Kingdom amounted to 440,957(2003:287,000).The Groupmade no political contributions(2003:nil)during the year.Employment policyThe Groups policy of operating thr

174、ough autonomous subsidiaries has ensured close consultation with employees on matters likely to affect theirinterests.The Group is firmly committed to the continuation and strengthening of communication lines with all its employees.A new Equal Opportunities Policy was introduced in 2001.As part of t

175、his,it is the policy of the Group to support the employment of people withdisabilities wherever practicable and to ensure,as far as possible,that training,career development and promotion opportunities are available toall employees.This policy includes employees who become disabled whilst employed b

176、y the Group.Sustainable developmentThe Berkeley Group recognises that its commercial success is increasingly dependent upon the careful consideration of the environmental,socialand economic issues that affect the quality of life in the communities in which it works.In our recently published Sustaina

177、bility Report 2004,we have reported on progress made since last year and have set new objectives andtargets for the future.Health and safety The Group considers the effective management of health and safety to be an integral part of managing its business.Accordingly,the Group MainBoard continues to

178、monitor the strategic development and implementation by all divisions of their Occupational Health and Safety ManagementSystems and that,both at Group and divisional level,they remain compliant with recognised established standards.We remain committed to enhancing the Groups high standards through c

179、ontinuous improvement.Our Health and Safety Working Group,comprising Divisional Executives and Managers,continue to review progress against targets set for our established key performance indicatorsand reports this quarterly to the Group Main Board.The health and safety performance of our four major

180、 divisions(St George,Crosby Group,St James and Berkeley Homes)have been recognisedby awards from the Royal Society for the Prevention of Accidents(RoSPA).Payment of creditorsEach of the Groups operating companies is responsible for agreeing the terms and conditions,including terms of payment,relatin

181、g totransactions with its suppliers.It is Group policy to abide by the agreed terms of payment where the supplier has provided the goods andservices in accordance with the relevant terms and conditions of contract.The average supplier payment period during the year for the Companywas 10 days(2003:24

182、 days).22www.berkeleygroup.co.ukDirectors Report continuedAuditorsA resolution to reappoint PricewaterhouseCoopers LLP as auditors to the Company will be proposed at the Annual General Meeting.Articles of AssociationThe Company last updated its Articles of Association in 1989 and therefore given tha

183、t there have been a number of changes both with regard tothe law,regulation and market practice since this time,the Directors consider that it is prudent to adopt entirely new articles at the forthcomingAnnual General Meeting.A summary of the principle amendments is set out in the Notice of Meeting

184、accompanying this report.Post Balance Sheet EventAs announced on 25 June 2004,the Company has concluded a strategic review,the outcome of which is that the Group will in future focus on selected large scale urban regeneration projects,moving on from its traditional housebuilding heritage.In conseque

185、nce,the Company intendsto return 12.00 per share in cash to shareholders over the next six years.These proposals are subject to shareholder approval and furtherdetails will be published in August in time for shareholders to consider and approve these proposals at an Extraordinary General Meeting.Ann

186、ual General MeetingThe Annual General Meeting of the Company is to be held at the Woodlands Park Hotel,Woodlands Lane,Stoke DAbernon,Cobham,SurreyKT11 3QB at 10.00am on Friday 27 August 2004.The Notice of Meeting,which is contained in a separate letter from the Group Chairmanaccompanying this report

187、,includes a commentary on the business to be transacted at the Annual General Meeting.By order of the BoardE Taylor FCISCompany Secretary30 June 200423www.berkeleygroup.co.ukRemuneration Committee ReportAt the EGM held on 24 February 2004 shareholders approved a new remuneration policy for the Compa

188、nys Executive Directors,the key features ofwhich are as follows:a salary freeze for three years for the Executive Directors(1 May 2003 to 30 April 2006);a change to the structure and method of payment of bonuses;the introduction of a new Long Term Incentive Plan,The Berkeley Group plc 2004 Long-Term

189、 Incentive Plan(the 2004 LTIP);andthe introduction of a new all employee share incentive plan,The Berkeley Group plc 2004 Share Incentive Plan(the 2004 SIP).The percentage of shareholdings voting who supported the new policy and the introduction of the 2004 LTIP were 94%and 92%respectively.This poli

190、cy was formulated by the Remuneration Committee in response to concerns raised by shareholders at the 2003 AGM and was only finalised afterextensive consultation with the Companys major shareholders and institutional shareholder bodies,such as the ABI,NAPF and PIRC.The RemunerationCommittee believed

191、 that the new policy with the emphasis on performance should encourage Executives to focus on delivering the business strategyadopted at that time,thereby enhancing shareholder value as well as providing meaningful incentive to Executives.This report will be put to a secondadvisory vote of the Compa

192、nys shareholders in 2004 at the Annual General Meeting on 27 August 2004.As announced on 25 June 2004,the Company has concluded a strategic review resulting in a proposed restructuring.The Board believes it isappropriate in light of this proposed restructuring to review the new remuneration policy,a

193、pproved by shareholders at the EGM on 24 February 2004,so that it aligns managements incentives with the achievement of the return of capital and maximising the value of the continuing business.The Remuneration Committee will consult fully with key shareholders on the proposed changes.This report ha

194、s been prepared in accordance with The Directors Remuneration Report Regulations 2002(the regulations).The auditors are required toreport on the auditable part of this report and to state whether,in their opinion,that part of the report has been properly prepared in accordance with theCompanies Act

195、1985(as amended by the regulations).The report is,therefore,divided into separate sections for audited and unaudited information.Part 2 of the regulations Unaudited InformationPerformance GraphThe graph shows the Companys performance,measured by total shareholder return(TSR)1,compared with the perfo

196、rmance of the FTSE 250,the FTSE All Share and the Companys comparator group set out below.The Company considers these the most relevant indices for total shareholder returndisclosure required under the regulations.As detailed later in the report,the Company also considers its TSR performance for sha

197、re awards under the2004 LTIP in comparison to that of a comparator group.Total shareholder return from 30 April 1999%Berkeley GroupFTSE 250 IndexFTSE All Share IndexComparator Group120608010040200-20-40-601999200220012000200320041Total Shareholder Return(TSR)is an independently calculated measure sh

198、owing the return on investing in one share of the Company over the performance period(thereturn is the value of the capital gain and reinvested dividends).It is normally used comparatively and the company which achieves the best return is ranked number one.24www.berkeleygroup.co.ukRemuneration Commi

199、tteeThe Remuneration Committee of the Board comprises Mrs V M Mitchell(Chairman),Mr D Howell and Mr H A Palmer,all of whom are Non-executiveDirectors and independent.Mrs V M Mitchell became Chairman of the Remuneration Committee on 11 June 2003 following the resignation from the Main Board of Mr D S

200、ach,the previous Chairman.Mr D Howell was appointed to the Remuneration Committee on 24 February 2004.Mr F Wellings,aNon-executive Director,was a member of the Remuneration Committee during the year until 5 December 2003.The Remuneration Committee membershave no personal financial interest other tha

201、n as shareholders in matters to be decided,no potential conflicts of interest arising from cross directorshipsand no day-to-day involvement in running the business.The Remuneration Committee has formal written terms of reference with the full remit of the Committee role described.A copy of the terms

202、 of reference is available to shareholders by writing to the Company Secretary whose contact details are set out elsewhere in the Report&Accounts.During the year in question the Remuneration Committee formally met four times,with the sub-committee dealing with the design and introduction of the new

203、executiveremuneration policy having approximately 30 meetings with other members of the Board and the Companys major shareholders.The Remuneration Committee appointed and was advised during the year by Kepler Associates and Halliwell Consulting.No other services were providedto the Company by Kepler

204、 Associates and Halliwell Consulting during the year.The current Remuneration Committee advisors are Halliwell Consulting,an independent executive compensation and share scheme consultancy.In determining Executive Directors remuneration for the year,the Remuneration Committee consulted with the Grou

205、p Chairman,Mr R St J H Lewis,theGroup Finance Director,Mr R C Perrins and the Group Managing Director,Mr A W Pidgley.No Director played a part in any discussion about his ownremuneration.The Board has reviewed the Groups compliance with the Combined Code(the Code)on remuneration related matters.It i

206、s the opinion of the Board thatthe Group complied with all remuneration related aspects of the Code during the year,and the New Code by the end of the year.Remuneration Policy OverviewFollowing the concerns raised by shareholders at the 2003 AGM,the Remuneration Committee conducted a full review of

207、the remuneration policy.As part of this process,an extensive shareholder consultation process was carried out in order to ensure that the remuneration policy,as well as meetingthe Companys objectives was in line with shareholders expectations.As a result of this process,a new remuneration policy has

208、 been approved by theCompanys shareholders.This report sets out details of Executive remuneration during the year and the ongoing remuneration policy.The objective of the remuneration policy is to encourage,reward and retain the current Executives.The Remuneration Committee believes thatshareholders

209、 interests are best served by remuneration packages having a large emphasis on performance-related pay.Emphasis on performance shouldencourage Executives to focus on delivering the business strategy.It is the opinion of the Remuneration Committee that the new policy will providemeaningful incentives

210、 to Executives and ensure that the appropriate balance between fixed and performance-related pay is maintained.The policy agreedby shareholders at the EGM on 24 February 2004 was to set the main elements of the Executive Directors remuneration package against the followingquartiles in the Companys c

211、omparator group:Remuneration Committee Report continuedBase salaryAnnual bonus potential PensionBenefits in kindShare incentivesUpper decileUpper decileLower quartile to medianMarket practiceUpper quartile to upper decileFor the purposes of benchmarking remuneration the Remuneration Committee uses t

212、he following comparator group of companies:Company nameAmec plcCarillion PlcMcCarthy&Stone PlcTravis Perkins PlcBalfour Beatty PlcCrest Nicholson PlcNovar PlcUltraframe plcBarratt Developments PlcGeorge Wimpey PlcPersimmon PlcWestbury PlcBellway PlcMarshalls PlcRedrow PlcWilson Bowden PlcBovis Homes

213、 Group PlcMcAlpine(Alfred)PlcTaylor Woodrow PlcThe Remuneration Committee reviews the policy on an annual basis to ensure that it is in line with the Companys objectives and shareholders interests.In addition,the life of the new LTIP and bonus framework is five years,requiring the Company to revert

214、to shareholders for a formal approval at the end of this period for any future arrangements.The charts below demonstrate the balance between fixed and variable performance based pay for each Executive Director for the year ended 30 April 2004:Mr R St J H Lewis Executive ChairmanFixedcompensation57%P

215、erformancecompensation43%Mr A W Pidgley Group Managing DirectorFixedcompensation18%Performancecompensation82%Mr R C Perrins Group Financial DirectorFixedcompensation23%Performancecompensation77%Mr A Carey Divisional DirectorFixedcompensation25%Performancecompensation75%Mr G J Fry Divisional Director

216、Fixedcompensation32%Performancecompensation68%KeyFixed compensation is calculated as:Salary BenefitsPerformance compensation is calculated as:Bonus paid Face value of LTIP on grant Fair value of options on grant25www.berkeleygroup.co.ukThe main elements of these packages and the performance conditio

217、ns are described below.Elements of Executive Directors RemunerationBasic SalaryPolicy:Upper Decile Salary Freeze 1 May 2003-30 April 2006Year Ended 30 April 2004The Remuneration Committee reviewed the Executive Directors salaries in May 2003 and provided the rises set out in the table below.The two

218、rises ofnote are to the Group Managing Director and the Group Finance Director.The Remuneration Committee used a wide range of benchmarks,FTSE 100,Property Companies,Construction and Building Companies and House Builders when deciding on these rises.It was the view of the RemunerationCommittee at th

219、e time that the increase in salary for the Group Managing Director was required to ensure that he retained his comparative position and to draw a line under elements of his remuneration package which had been open for some time.The Remuneration Committee provided the rise to theGroup Finance Directo

220、r based on their view of his performance and growth in capabilities over the period.FY2003SalaryLevel of salary frozen forNamesalariesrises%three-year periodRoger Lewis(Group Chairman)210,0005%220,000Tony Pidgley(Group Managing Director)650,00015%750,000Tony Carey(Divisional Director)385,0005%405,00

221、0Greg Fry(Divisional Director)275,0005%290,000Rob Perrins(Group Finance Director)250,00030%325,000The Executives current salaries are set at the upper decile compared to the comparator group.It is the policy of the Remuneration Committee that theyshould remain at this level in line with the Committe

222、es view that the Company has one of the most experienced Executive teams within the sector.26www.berkeleygroup.co.ukFuture PolicyThe Remuneration Committee,with the rises in 2003,feels that it has reached its desired policy for Executive salary levels and is therefore implementing a salary freeze fo

223、r the Executive team from 1 May 2003 to 30 April 2006(three years).The next salary review date will be,in the normal course of events,1 May 2006.It should be noted that in line with the Companys policy on salary reviews,the reviews on 1 May 2006 will not result in automatic salaryincreases.It is the

224、 policy of the Remuneration Committee to look to the bonus and share arrangements to reward Executives for their performance ratherthan to increases in base salary.The Remuneration Committee will retain the discretion to increase salary levels if Executives are promoted or on the occurrence of any u

225、nforeseen eventwhich materially affects the Company and/or the market in which it operates.In the event of such an unforeseen event the Remuneration Committee willconsult shareholders before adjusting salary levels.When determining the salary of the Executive Directors the Remuneration Committee tak

226、es into consideration:the levels of base salary for similar positions with comparable status,responsibility and skills in organisations of broadly similar size and complexity,in particular those companies within the comparator group;the performance of the individual Executive Director;the individual

227、 Executive Directors experience and responsibilities;andthe pay and conditions throughout the Company.Annual Performance Related BonusPolicy:Upper Decile Bonus PotentialThe policy of the Remuneration Committee is to set the maximum annual bonus potential at the upper decile in relation to the compar

228、ator group.Year Ended 30 April 2004To date the maximum bonus potential for Executives has been uncapped.However,the Remuneration Committee has taken into account the concerns of shareholders regarding the uncapped nature of the Executive bonus arrangements and has decided to alter the structure of t

229、he bonus to reflect theseconcerns(further details of the new structure are set out below).In anticipation of the future change in policy,the Executives agreed to the introduction of a retrospective cap on bonuses for the current bonus year(1 May 2003 30 April 2004)of 300%of salary.However,for the ye

230、ar ended 30 April 2004,where the Remuneration Committee did in fact determine a bonus greater than 200%of salary for the Group Managing Director and the Group FinanceDirector,they decided of their own volition to cap the bonus payment at 200%of salary.Bonus targets are reviewed and agreed by the Rem

231、uneration Committee at the beginning of each financial year.The performance measures for theExecutive Directors bonus scheme are reviewed annually by the Remuneration Committee to ensure that they are appropriate to the current marketconditions and position of the Company,so that they continue to re

232、main challenging.The targets for the year ended 30 April 2004,their level of achievement and the corresponding bonus earned for the Executive Directors is set out in thefollowing tables:The above table shows that the Remuneration Committee set challenging performance conditions for the payment of bo

233、nuses for the year ended 30 April2004,so that while the performance of the Company was strong,this did not result in maximum bonus payments.The performance targets for the bonus year ended 30 April 2004 were based on Group profit targets for the Group Executive Directors and Divisionalprofit targets

234、 for the Divisional Executive Directors.Once the targets were achieved a percentage of the over performance was allocated to the Executivesby the Remuneration Committee using pre-determined formulae.The level of the profit targets is commercially sensitive and therefore is not disclosed by the Compa

235、ny.Remuneration Committee Report continuedNameR LewisT PidgleyT CareyG FryR PerrinsMaximum bonus potential(%of salary)300%300%300%300%300%2003/4 bonus paid165,0001,500,000498,509259,735650,0002003/4 bonus paid(%of salary)75%200%123%90%200%Upper decile bonus payments in the 200%200%175%175%200%compar

236、ator group as a%of salary27www.berkeleygroup.co.ukThe Remuneration Committee felt that profit targets were the appropriate performance measure for bonuses as they were in line of sight of the Executivesand their delivery is key to long-term shareholder value.However,the Remuneration Committee recogn

237、ises that in the current climate it would be helpfulto be able to disclose the detail of the performance targets for bonuses payable to the Executives,which would always be difficult due to thecommercially sensitive nature of this information.Therefore,the Remuneration Committee has decided,in the f

238、uture,to use ROCE(Return on Capital Employed see later for a complete definition)as theperformance measure for the Group Executive Directors as this measure ensures that Executives are focused on maintaining earnings whilst having theadditional benefit of measuring the efficiency with which capital

239、is being used to generate those earnings.For Divisional Executive Directors,75%of thebonus potential will still be based on the satisfaction of Divisional profit targets as the Remuneration Committee feel that it is important that the DivisionalExecutive Directors have a strong focus on the performa

240、nce of the Divisions which they are running,with the remaining 25%based upon Group ROCE.Future PolicyFurther to meetings with major shareholders during the year,the Remuneration Committee has taken into account their concerns regarding the uncappednature of the Executive bonus arrangements.Therefore

241、,the Remuneration Committee is imposing a cap of 300%of salary for the bonus year starting on1 May 2004 30 April 2005 and subsequent bonus years.In practice,the bonus plan will be designed with the effective cap on a maximum payout of200%of salary.The Remuneration Committee would only in very except

242、ional circumstances,outside the normal operation of the bonus plan,consider a bonus paymentgreater than 200%of salary.On the occurrence of very exceptional circumstances and prior to any commitment to make a bonus payment,theRemuneration Committee would consult shareholders to obtain their agreement

243、 that the circumstances gave rise to the level of bonus payment proposed.The structure of bonus payments will be changed as follows:Position%cash%sharesExecutive Bonus will be paid in cash up to a Any bonus payment above 100%of salarymaximum of 100%of salarywill be invested,net of tax,in sharesAny s

244、hares provided under the bonus arrangements must be retained by the Executives for 18 months.The new bonus arrangements will take effect from1 May 2004(the start of the new bonus year).The performance targets for the annual bonus plan for the 2004 Financial Year(1 May 2004 to 30 April 2005)are princ

245、ipally ROCE(Return on CapitalEmployed)at Group level and principally ROCE and PBT(Profit Before Tax)at the Divisional level.The following table shows the weighting for participantsbetween Group and Divisional performance:PositionGroup performanceDivisional performanceChairman 100%of participants bon

246、us potential is basedGroup Managing Directoron the ROCE performance of the GroupFinance DirectorDivisional Executive Directors 25%of participants bonus potential is based 75%of participants bonus potential is based on on the ROCE performance of the Groupachieving Divisional PBT targetsAll Executives

247、A balanced score card will be operated considering other elements of the Companys and individual Executives business objectives when making final bonus determinations.Bonuses will always require the respective ROCE and PBT targets to be met in order to trigger payment.The ROCE target for the 2004 bo

248、nus plan year is set out in the following schedule.Currently the annual ROCE target for the bonus is the same as the three-year average target for the 2004 LTIP.This will not necessarily be the case in future years because the target for the annual bonus is for a 12-month period whereas the target f

249、or the 2004 LTIP is the performance averaged over a 36-month period.However,the Remuneration Committee will not materially change the nature of the performance conditions or their method of calculation without prior shareholder consultation.28www.berkeleygroup.co.ukRemuneration Committee Report cont

250、inuedROCE for bonus year%of ROCE-based bonus payable15%0%*16%20%*17%40%*18%60%*19%80%*20%100%*There is straight line pay-out between points.Participants in the annual bonus plan will only be eligible to receive a bonus if they meet the performance targets.However,the Remuneration Committeewill retai

251、n the discretion to adjust bonus payments(either up or down)if in their opinion the results would otherwise be inappropriate.It should be notedthat this discretion will be exercised sparingly to ensure certainty for participants and transparency for shareholders.If the Remuneration Committee doesexe

252、rcise its discretion to adjust bonus payments it will only do so where there is an objective justification which can be explained to shareholders in theRemuneration Committee report.In addition,the Remuneration Committee will ensure that any changes to the basis of payment or financial performanceta

253、rgets are independently verified.On an ongoing basis,the Remuneration Committee will continue to set robust and challenging performance targets at the beginning of each financial yeartaking into account the business plan for that year and general market conditions.Bonus payments are not pensionable.

254、The following formula sets out how the Company calculates ROCE for both the 2004 annual bonus plan and the new 2004 LTIP:Earnings before Interest,Tax and GoodwillROCE%=x 100Average Shareholders Funds+Average Net Debt(i)Average Shareholders Funds is calculated by taking the Opening Balance Sheet Net

255、Assets from the Groups Accounts for the relevant Financial Yearand the Closing Balance Sheet Net Assets from the Groups Accounts for the relevant Financial Year and dividing by two.(ii)Average Net Debt is calculated by taking the Opening Net Debt from the Groups Accounts for the relevant Financial Y

256、ear and the Closing Net Debt from the Groups Accounts for the relevant Financial Year and dividing by two,and where the Group is cash positive,such cash is excluded from the calculation.Share IncentivesPolicy:Upper Quartile to Upper DecileThe Remuneration Committees policy is to provide annual share

257、 grants to Executives between the upper quartile and upper decile level compared to thecomparator group.The Remuneration Committee determines whether the performance conditions for share awards or options are satisfied.Where the performancerequirements are based on earnings per share,ROCE or PBT the

258、 Committee will use the principles behind the audited figures disclosed in the Companysfinancial statements,and may take advice from independent advisors as to whether any adjustments are required to ensure consistency in accordancewith the terms of the performance conditions.Where the performance m

259、easure is TSR,Halliwell Consulting,the Remuneration Committees advisors,shall calculate the TSR in accordance with the principles behind the regulations and sign-off these figures prior to the release of any award.OverviewUntil the EGM on 24 February 2004,the share incentive arrangements in place fo

260、r executives comprised Long Term Incentive Plans and Executive Share Option Schemes(details are as set out below).It was the Remuneration Committees policy to grant awards to participants under either the Long Term Incentive Plans or the Executive Share Option Schemes and only in exceptional circums

261、tances would grants be made in the same year under both arrangements.29www.berkeleygroup.co.ukFollowing shareholder approval at the EGM,the new 2004 LTIP has been adopted by the Company.The Remuneration Committees policy is thatExecutives who participate in the new 2004 LTIP will receive no further

262、award under either the existing Long Term Incentive Plans or the Executive ShareOption Schemes.It should be noted that participants in the 2004 LTIP will not be entitled to the grant of awards under any other discretionary share planoperated by the Company(participants will be entitled to participat

263、e in any all-employee arrangements operated by the Company).In addition,theRemuneration Committee intends to introduce a shareholding requirement for Executives in conjunction with the new 2004 LTIP,details of which are setout on pages 30-32 of this report.Existing Share Incentive Arrangementsa)The

264、Berkeley Group Long Term Incentive PlanUntil the EGM,the principal form of long term incentive eligible to Executive Directors was through the Berkeley Group Long Term Incentive Plan(theExisting LTIP).Under the Existing LTIP,individuals were granted awards annually,the vesting of which were subject

265、to the attainment of pre-determinedperformance targets measured over a three-year period.Awards were structured to deliver a pre-determined cash value and a number of shares,eachworth at the outset 50%of the value of the total annual award.The shares element was fixed by reference to the market valu

266、e of the Companys sharesat the date of grant.The maximum value that could be delivered under an award(based on the share price at the date of grant)is 200%of an individualsannual salary(excluding bonuses and all other benefits)as at the date of grant.The cash element is payable following the third a

267、nniversary of the date of grant of the award provided the performance targets have been met.The participant is normally only entitled to the share element following the fourth anniversary from the date of grant of the award,by which time theoutstanding value of the underlying shares will have increa

268、sed or decreased in line with the Companys share price performance over the period since thedate of grant.Performance under the Existing LTIP was measured according to the level of audited cumulative pre-tax profits of the division or Groupcompany in which the participant is employed over the releva

269、nt period.Achievement is determined on an all or nothing basis over a period of three yearswith no opportunity for re-testing.For awards under the LTIP to vest,the audited net assets of each division or Group Company,after taking account ofchanges in share capital and dividend distributions,must als

270、o have increased by at least a cumulative rate of 10%per annum since the base year.These performance conditions were selected because it was the Boards view that profit and asset growth will ensure the delivery of enhanced value tothe Companys shareholders.Details of LTIP awards granted during the y

271、ear are set out at page 36.The following table sets out the expected value of the LTIP awards on the date of grant made under the Existing LTIP to the Executive Directors duringthe year ended 30 April 2004:NameT PidgleyT CareyG FryR PerrinsLTIP award(%of salary)200%200%150%150%Expected value of LTIP

272、 award1,500,000810,000435,000487,500Expected value of LTIP awards as a%of salary200%200%150%150%Upper quartile share grants in the comparator group240%215%215%165%Based on historical analysis of the achievement of the performance requirements the expected value of the LTIP is 100%of its face value.b

273、)The Berkeley Group plc 2000 Approved&Unapproved Executive Share Option Plans(the Option Plans)Two executive option plans were introduced in 2000.Under the option plans individuals were eligible to be granted options annually over shares worth upto 100%of annual salary(excluding bonuses and all othe

274、r benefits).The Remuneration Committee had the discretion to vary this amount in exceptionalcircumstances,in which case the limit was 200%of annual salary(excluding bonuses and all other benefits).Exercise of options granted is conditionalupon meeting defined performance targets based on the increas

275、e in earnings per ordinary share over a three-year period.30www.berkeleygroup.co.ukOn 19 April 2004,a grant of options was made to Mr A W Pidgley under the Option Plans,details of which are shown on page 37.The performancetarget attaching to this option provides that over a three-year period EPS gro

276、wth must exceed RPI+4%p.a.for 50%of the option to vest,with full vestingrequiring EPS growth of RPI+8%p.a.The rules of the Plan under which this option was granted allows for limited re-testing.However,the RemunerationCommittee has taken into account the wishes of shareholders and this option to the

277、 Group Managing Director will not allow re-testing of the performancetarget.The expected value of this option on the date of grant is 631,349,84%of salary(using the Black-Scholes Calculation).It should be noted that during the shareholder consultation exercise carried out by the Company this option

278、and its proposed terms were specificallydrawn to shareholders attention.The majority of shareholders(by percentage holding)confirmed that they would accept the grant of this option.No other grants of options have been made to Executive Directors under the Option Plans during the year.Earnings per sh

279、are was selected as the performance measure as,in combination with options,it ensures that both the Companys share price and itsunderlying financial value increases before any benefit is provided to Executives.New Share Incentive ArrangementsThe Berkeley Group plc 2004 Long-Term Incentive Plan(the 2

280、004 LTIP)The 2004 LTIP was approved by shareholders at the EGM on 24 February 2004.Prior to the EGM,the Company conducted a full consultation with majorshareholders and shareholder bodies which ensured that the terms of the Plan were acceptable to the majority of shareholders by percentage holding a

281、ndcomplied with corporate governance best practice.Executive Directors and certain senior executives are eligible to participate in the Companys 2004 LTIP.The Plan provides appropriate incentives toreward sustained success through the achievement of challenging business targets,thereby better aligni

282、ng the interests of shareholders and Executives.The maximum annual award that can be made to an individual is 300%of salary;although it should be noted that the only Executive Director currentlyeligible to receive the maximum level of award is the Group Managing Director.Eligible executives are awar

283、ded rights to receive a maximum number of shares at the beginning of a three-year period,a proportion of which they will beentitled to receive at the end of that period depending on the extent to which(if at all)the challenging performance conditions,set by the RemunerationCommittee at the time the

284、allocation is made,are satisfied.The release of the first grant of awards under the 2004 LTIP will be dependent upon the satisfaction of two performance measures.The release of 50%of each award will be dependant on the comparative Total Shareholder Return performance of the Company against the compa

285、rator group set out earlierin the report over a three-year period and the release of the other 50%of the awards will be dependent on the average ROCE performance of theCompany over a three-year period from the date of grant.The Remuneration Committee has selected a comparative TSR and a ROCE measure

286、 toensure that the Company is not only consistently delivering high levels of returns but that on a comparative basis it is also delivering at least median share price performance against its competitors.In addition,the use of the ROCE measure ensures an efficient use of shareholders funds to genera

287、teprofitability at a consistent level over the long term.When combined with the TSR measure it ensures that this absolute performance successfully flowsthrough to the comparative performance of the Company against its competitors.It should be noted that the Remuneration Committee will satisfy itself

288、 that the recorded TSR is a genuine reflection of the underlying financial performanceof the Company.Due to the combined nature of awards made under the proposed share incentive policy,some of the corporate performance measuresthat the Remuneration Committee will be considering in determining whethe

289、r the recorded TSR is a genuine reflection of the underlying financialperformance of the Company are its ROCE,EPS and PBT performance over the measurement period.No grants were made under the new LTIP during the year.Remuneration Committee Report continued31www.berkeleygroup.co.ukThe following table

290、s set out the proposed levels of award for the 2004/2005 LTIP grant,the performance conditions and level of release for a given level of performance:NameLTIP award as%of salaryMr A W Pidgley(Group Managing Director)300%Mr A Carey(Divisional Executive Director)200%Mr G J Fry(Divisional Executive Dire

291、ctor)150%Mr R C Perrins(Group Finance Director)150%Below Board maximum100%The following table sets out the first proposed release for the 50%of the LTIP award subject to comparative total shareholder return:TSR position against comparator groupLong-Term Incentive Plan%of shares releasedBelow median0

292、%At the median30%*of half the awardAt the upper quartile90%*of half the awardAt the upper decile100%*of half the award*There is straight line vesting between points.The following table sets out the first proposed vesting for the 50%of the LTIP award subject to ROCE:ROCE average%over the three-year h

293、olding periodLong-Term Incentive Plan%of shares released15%0%16%20%*of half the award17%40%*of half the award18%60%*of half the award19%80%*of half the award20%100%*of half the award*There is straight line vesting between points.DilutionIn accordance with the ABI guidelines the Company can issue a m

294、aximum of 10%of its issued share capital in a rolling ten-year period to employeesunder all its share schemes.In addition,of this 10%the Company can only issue 5%to satisfy awards under discretionary or executive schemes.The Company adheres strictly to these limits.Shareholding RequirementThe follow

295、ing table shows the minimum shareholding requirement as a percentage of salary which Executives will be required to build up over a five-year period:PositionCurrent shareholding as%of salary%of salary at end of five-year periodGroup Executive Chairman(Mr R St J H Lewis)1,212%200%Group Managing Direc

296、tor(Mr A W Pidgley)2,609%400%Divisional Director(Mr A Carey)445%200%Divisional Director(Mr G J Fry)338%200%Group Finance Director(Mr R C Perrins)82%200%Executives will be required to retain a proportion of the share awards released each year to build up the shareholding requirement over a five-year

297、period.For example,awards granted in 2004,2005 and 2006 will be released in 2007,2008 and 2009.A proportion of each released award shall be retained asshares so that by the end of 2008 Executives should have met the minimum shareholding requirement.32www.berkeleygroup.co.ukWhen considering whether t

298、he Executive has met the minimum shareholding requirement the Remuneration Committee will take into account all sharesheld by the Executive.Participants will only be required to meet the minimum shareholding requirement from shares provided through the Company sharearrangements;if these do not provi

299、de shares the Executive will not be expected to purchase shares in the market.If the Company share arrangementsprovide the Executive with shares and the appropriate percentage is not retained by the Executive,the Remuneration Committee will reduce the futurelevels of share incentives granted.The Rem

300、uneration Committee will consider the circumstances surrounding an Executives disposal of shares as part of its determination.For example,if an Executive was required by a Court order to transfer shares this would be a mitigating factor.PensionPolicy:Lower Quartile to MedianThe Executive Directors a

301、re all members of one or more of the following pensions schemes in operation within the Group,namely The Berkeley GroupStaff Benefits Plan,The Berkeley Homes Executive Pension Plan and The St George PLC Retirement and Death Benefits Scheme.No element ofremuneration other than basic salary is pension

302、able.Three Directors have benefits accruing to them under a defined contributions scheme and three have benefits accruing to them under a defined benefitsscheme.Non-executive Directors are not eligible to participate in these schemes.Details of pension costs for Executive Directors are set out in th

303、e audited section of the report on page 35.Benefits in KindPolicy:Market PracticeIn line with market practice,the Companys policy is to provide Executive Directors with the following additional benefits:a fully expensed company car;andmedical insurance.Other Remuneration MattersExisting All Employee

304、 Share SchemesSAYE SchemeThe Company operates an Inland Revenue approved savings related share option scheme for the benefit of Group employees.Eligible employees,including Executive Directors and senior executives,may be granted options over the Companys shares at a discount of up to 20%to the prev

305、ailingmarket price at the time of grant of the option,which(subject to certain conditions)can be exercised after either three or five years.Approximately 23%of eligible Group employees currently participate in the scheme.New All-Employee Share SchemesThe Berkeley Group plc 2004 Share Incentive Plan(

306、2004 SIP)Shareholders approved the 2004 SIP at the EGM on 24 February 2004.Under the Inland Revenue approved rules of the SIP the Company can offeremployees the opportunity of purchasing 1,500 of shares a year out of pre-tax salary.The Company can then match each share purchased with anaward of Matc

307、hing Shares.The maximum ratio of Matching Shares to employee purchased shares is two to one.However,the Company is stilldetermining the date of launch and how the SIP will operate.Non-executive Directors FeesPolicy:Upper Decile FeesAll Non-executive Directors have specific terms of engagement and th

308、eir remuneration is determined by the Board within the limits set by the articles of association and based on independent surveys of fees paid to non-executive directors of similar companies.The 2004 fee levels will be based on aspecific survey of the fees paid to non-executive directors in the comp

309、arator group by Halliwell Consulting.The basic fee paid to each Non-executiveDirector in the year was 30,000 per annum.Further fees are payable for additional work performed in respect of the Chairmanship of the Remunerationand Audit Committees(4,000 p.a.).Non-executive Directors cannot participate

310、in any of the Companys share incentive schemes or performance basedplans and are not eligible to join the Companys pension scheme.Remuneration Committee Report continued33www.berkeleygroup.co.ukExecutive Directors ContractsThe policy on termination is that the Company does not make payments beyond i

311、ts contractual obligations.The only event on the occurrence of whichthe Company is potentially liable to make a payment to any of the Executive Directors is on cessation of employment;with the maximum payment being12 months salary.No payment is due on either a Company takeover or in the event of liq

312、uidation.In addition,Executive Directors will be expected tomitigate their loss.The Remuneration Committee is considering introducing phasing the payments of notice on cessation in line with the combined ABIand NAPF guidelines,subject to existing contractual constraints.In addition,the Remuneration

313、Committee ensures that there have been no unjustifiedpayments for failure.None of the Executive Directors contracts provides for liquidated damages.There are no special provisions contained in any of theExecutive Directors contracts which provide for longer periods of notice on a change of control o

314、f the Company.Further,there are no special provisionsproviding for additional compensation on an Executive Directors cessation of employment with the Company.Non-executive DirectorsAll non-executive appointments are subject to a notice period of one month and subject to successful re-election upon r

315、etirement by rotation as requiredby the Companys articles of association.All letters of appointment for Non-executive Directors are renewable annually on 1 May.Further details of all Directors contracts are summarised below:NoticePotentialPotentialperiod byPotentialpaymentpaymentDate ofUnexpiredComp

316、any orterminationupon Companyin event ofcontracttermDirectorpaymenttakeoverliquidationExecutive DirectorsR St J H Lewis24 June 19941 year rolling12 months12 months salarynilnilA W Pidgley24 June 19941 year rolling12 months12 months salarynilnilA Carey20 September 19941 year rolling12 months12 months

317、 salarynilnilT Farrow(1)16 March 19981 year rolling12 monthsn/an/an/aG J Fry27 June 19961 year rolling12 months12 months salarynilnilG Hutchinson(2)27 June 19961 year rolling12 monthsn/an/anilR C Perrins15 July 20021 year rolling12 months12 months salaryniln/aNon-executive DirectorsD Howell24 Februa

318、ry 2004n/a1 monthV M Mitchell1 May 2002n/a1 monthH A Palmer3 June 1997n/a1 monthD S Sach(3)29 June 1999n/a1 monthF Wellings(4)22 March 1994n/a1 month(1)Mr Farrow resigned as a Director with effect from 31 May 2003.His contract was ended by mutual consent and consequently no payment was made in respe

319、ct of loss of office.(2)Mr Hutchinson,who is Managing Director of The Crosby Group plc,resigned as a Main Board Director on 27 August 2003,but remains employed by the Group.(3)Mr Sach resigned as a Director on 11 June 2003.(4)Mr Wellings resigned as a Director on 5 December 2003.34www.berkeleygroup.

320、co.ukRemuneration Committee Report continuedThe following tables and accompanying notes constitute the auditable part of the Remuneration Committee Report,as defined in Part 3,Schedule 7a ofthe Companies Act 1985.Directors remunerationThe remuneration of the Directors of the Company for the year is

321、as follows:Salary/feesBonusBenefitsin kind(9)2004Total2003TotalExecutive DirectorsR St J H Lewis(Chairman)(1)A W PidgleyA CareyG J FryR C Perrins220,000750,000405,000290,000325,000165,0001,500,000498,509259,735650,0001,05433,88331,09329,61122,765386,0542,283,883934,602579,346997,765313,0042,182,5968

322、53,869528,980873,646Non-executive DirectorsD Howell(2)V M Mitchell(3)H A Palmer6,19044,00030,0006,19044,00030,00030,00030,000Former DirectorsT Farrow(4)G Hutchinson(5)D S Sach(6)F Wellings(7)M J Freshney(8)98,0773,76517,00013,7497,51113,749105,5883,76517,000273,242448,39633,00033,00056,6662,189,0323

323、,073,244139,6665,401,9425,656,399(1)Mr Lewis working hours are 31/2days per week.(2)Appointed as a Director on 24 February 2004.(3)10,000 of the fees paid to Mrs Mitchell relate to the additional time commitment involved in implementing the new remuneration policy adopted at the EGM held on 24 Febru

324、ary 2004.(4)Resigned as a Director on 31 May 2003.Mr Farrow received no salary in the year but retained the use of his company car until 30 November 2003.(5)Resigned as a Director on 27 August 2003.Mr Hutchinson is the Managing Director of The Crosby Group plc.He resigned from the Board following th

325、e subscription for new shares in The Crosby Group plc by him and the other members of the Crosby management team,as announced to the London Stock Exchange on 28 August 2003.(6)Resigned as a Director on 11 June 2003.(7)Resigned as a Director on 5 December 2003.(8)Resigned as a Director on 31 May 2002

326、.(9)Benefits in kind relate principally to the provision of a fully expensed motor vehicle and private healthcare.Where Directors were appointed or resigned during the year,the figures in the table relate only to the time when the relevant Director was a Main Board Director.35www.berkeleygroup.co.uk

327、PensionsThe accrued entitlements under the Defined Benefit Plan are as follows:Defined Benefit PlanAccumulatedaccruedIncrease inIncreaseAccumulatedpensionaccruedin accruedTransferaccrued30 AprilpensionpensionvaluepensionPensionableservice2003(Restated)(3)(4)in theyear(1)in theyear(2)of theincrease(1

328、)30 April2004(3)NameAge(years)R St J H Lewis571217,6431,0861,52713,86419,170A W Pidgley5617145,92643,94447,593509,691193,519T Farrow4858,9538,953G Hutchinson451015,0101,6252,00011,97817,010R C Perrins39914,0881,6241,9778,89016,065(1)Excludes inflation.(2)Includes inflation.(3)The pension entitlement

329、 is that which would be paid annually on retirement,based on service to the stated date and pensionable salary at that date.(4)All the Directors,other than Mr Pidgley,joined the Group after the Inland Revenue introduced an Earnings Cap for calculating pension benefits in 1989,and this is reflected i

330、n the calculation of accumulated accrued pension entitlements above.In prior years the disclosure provided assumed that all Directors benefits would be enhanced.This change has been made to properly reflect the scheme rules.The figures at 30 April 2003 in respect of these Directors have been restate

331、d accordingly,as have theassociated transfer values in the table below.TransferChange inTransfervalue attransfervalue at30 AprilvaluePensionable30 April2003during theservice2004(Restated)yearNameAge(years)R St J H Lewis5712233,173206,07027,103A W Pidgley56172,301,0651,155,1841,145,881T Farrow48577,0

332、8572,1304,955G Hutchinson4510123,101101,94221,159R C Perrins39986,75370,58616,167Other than Mr Pidgley,the above Directors are non-contributory members of the plan.The change in transfer value during the year for Mr Pidgley,excluding contributions paid by him,is 1,108,381.The transfer values of the

333、Directors accrued benefits under the Defined Benefit Plan,as set out above,are calculated in accordance with the RetirementBenefits Scheme Transfer Values(GN11)published by the Institute of Actuaries and the Faculty of Actuaries.The transfer values disclosed aboverepresent the value of assets that the pension scheme would need to transfer to another pension provider on transferring the liability i