<pre> Part 3 : For preceding part double click [nRn2a6633X] Carrying amount Past due but not impaired 61-90 days 91-120 days More than 121 days Trade and other receivables 51 51 - - - The group allows an average receivables payment period of 60 days after invoice date. It is the group's policy to assess receivables for recoverability on an individual basis and to make provision where it is considered necessary. Trade receivables that are neither impaired nor past due are made up of 7 debtors' balances (2006: 1). The largest individual debtor corresponds to 80% of the total balance (2006: 100%). Historically these debtors have always paid balances when due, unless this is disputed. The average age of these debtors is 12 days (2006: 23 days). No debtors' balances have been renegotiated during the year or in the prior year. Foreign Currency Risk Foreign currency risk refers to the risk that the value of a financial commitment or recognised asset or liability will fluctuate due to changes in foreign currency rates. The group is exposed to foreign currency risk as a result of its investment into the Stonehage Westcity Property Fund. The group makes use of forward exchange contracts to manage the risk relating to future transactions, in accordance with its risk management policy. The fair value of the forward exchange contract is £19,923,055 (2006: £nil). Loss on the forward exchange contract is £1,550,000 (2006: £nil). No amounts were recognised directly in equity during the period or the prior period as the relationship between the forward exchange contracts and the item being hedged does not meet certain conditions in order to qualify as a hedging relationship. Fluctuations in the fair values of forward exchange contracts are recognised directly in profit or loss. Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation. The financial obligation in the Group is principally restricted to trade and other payables and obligations from the forward exchange contract. 15. SHARE CAPITAL 31 December 31 December 31 Dec 31 Dec 2007 2006 2007 2006 No. No. £'000 £'000 Authorised Ordinary shares of 1p each 141,793,724 141,793,724 1,418 1,418 Issued and fully paid Ordinary shares of 1p each 74,299,301 74,299,301 743 743 16. RESERVES Share Premium Account Share Based Payments Reserve Other Capital Reserves Retained Income £ £ £ £ At 1 January 2006 16,841 38 3,976 (7,002) Share Based Payment - 93 - - Issue of Share Capital 6,588 - - - Capital Reduction (23,429) - 21,512 4,889 Retained Profit for the Year - - - 1,317 At 1 January 2007 - 131 25,488 (796) Share Based Payment - 190 - - Retained Profit for the Year - - - (1,604) Adjustment relating to previous capital reduction - - 101 (101) Unclaimed Dividend Adjustment - - - - As at 31 December 2007 - 321 25,589 (2,501) As permitted by Section 230 of the Companies Act 1985, the income statement of the company is not presented as part of these accounts. The consolidated loss for the financial year of £1,604,000 (2006:£1,317,000 profit) includes a loss of £1,869,000 (2006: £ 1,241,000 profit) which is dealt with in the accounts of the company. Nature and purpose of other reserves Share based payments reserve The share based payments reserve is used to recognise the fair value of options expensed but not exercised. Other Capital Reserves The special reserve arose following the cancellation of amounts included in the capital redemption reserve and share premium account. The special reserve is not to be treated as representing realised profits of the Company and will be treated as an undistributable reserve for the purposes of section 264 of the Companies Act 1985, as it may apply to the Company, for so long as any debts of or claims against the Company as at 11 October 2006 shall remain outstanding. 17. NET CASH OUTFLOW FROM OPERATING ACTIVITIES Company Company Group Group 2007 2006 2007 2006 £'000 £'000 £'000 £'000 Operating Profit/(Loss) (1,604) 1,225 (1,869) 1,334 Loss on sale of property, plant and equipment 13 - 13 - Depreciation 37 18 37 18 Share based payments expense 190 93 190 93 Share of profits of equity accounted investment (34) (76) - - (Increase)/decrease in the fair value of investments (1,570) 32 (1,570) 32 Finance income (335) (676) (335) (676) Finance expense - 125 - 125 Costs of acquiring other financial assets - 400 - 400 (Increase)/decrease in receivables (296) (69) (296) (69) (Increase)/decrease in prepayments 22 (15) 22 178 (Decrease)/increase in payables 1,440 (369) 1,440 (285) Impairment of subsidiaries - - - (1,294) (Decrease)/increase in provisions (53) (5,455) (53) (5,455) Management Charge - - 2,543 - Employee Benefits Expense - - (2,312) - Non cash movements on advances to related entities - (4,950) - (4,950) Non cash consideration on sale of investment property - 4,950 - - (2,190) (4,767) (2,190) (10,549) 18. GROUP FINANCIAL COMMITMENTS The group had no commitments under non-cancellable operating leases at the year end (2006 Nil) 19. CONTINGENT LIABILITIES Contingent liabilities Indemnities and warranties The Group continues to have contingent liabilities in connection with indemnities and warranties given to the purchasers of its former businesses. As no claims have been made under these indemnities and warranties, the Directors are unable to quantify these potential liabilities. Property lease liabilities The Group continues to have contingent liabilities in connection with the property leases of its former businesses, for which it is exposed to lease obligations in the event of an assignee's default. The remaining lengths of these leases range from 4 to 6 years. Whilst all assignees continue to meet their obligations under these leases, the current total rent obligations (which may be subject to periodic reviews), before allowing for any mitigating activities, for all such leases are approximately £1,880,000. £400,600 of this is due within one year. No provision has been made in respect of these contingent matters. 20. RELATED PARTY TRANSACTIONS Trading transactions During the year group companies entered into the following transactions with related parties who are not members of the Group. 2007 2006 £'000 £'000 Rent paid to Floral Holdings Limited, a company in which 137 18 Michael Rapp is a director Development work recharges and other fees paid to Westcity - 185 Properties Limited, a company in which Ira Rapp is a director Development work recharges paid to Phillimore Hill (SJA) - 15 Limited, a company in which Ira Rapp is a director Advisory & Consulting Fee paid by Capital & Counties Ltd, 160 - whose holding company is Liberty International a company in which Michael Rapp is a non-executive Director Key Management comprise of senior employees, details of which are included in Note 3 21. SHARE BASED PAYMENT PLANS The expense recognised for employee services received during the year is shown in the following table : Year ended 31/12/07 Year ended 31/12/06 £000 £000 Expense arising from equity settled share-based payment 190 93 transactions Total expense arising from share-based payment transactions 190 93 The share-based payment plans are described below The 1995 Scheme Under the 1995 Approved Scheme, options are subject to performance conditions linked to the growth in earnings per share over a total period of three consecutive financial years being such to place the company within the comparable top quartile of FTSE 100 companies ranked by reference to growth in earnings per share over the same period. Options under this scheme were issued to one director and one employee. The Equity Partnership Plan Options issued under the Westcity Equity Partnership Plan are subject to performance conditions linked to average total shareholder return exceeding a specified market index of average shareholder return over a specified period. Options under this scheme have only been issued to one director, Mr Wood-Ward. The 2006 Scheme All other options issued under the 2006 Approved Scheme are subject to performance conditions linked to the "Base EPS" (EPS for the financial year ending 31 December 2006). The condition is that the EPS for the Assessment Period must not be less than the amount found by compounding the Base EPS annually at the rate of 12.5%. If the Base EPS are less than 1.0 pence, the condition is that the EPS for the Assessment Period must not be less than 1.265 pence (for options exercisable no earlier than two years from the Date of Grant) or 1.425 pence (if the Option is exercisable no earlier than three years from the Date of Grant). This scheme covers directors and employees of Westcity plc. Movements in the year The following table illustrates the number and weighted average exercise prices of, and movements in, share options during the year 2007 2007 2006 2006 No Price No Price Outstanding at 1 January 4,266,190 44.32p 266,190 42.5p Granted during the year 390,000 43.93p 4,000,000 44.44p Forfeited during the year - - - - Exercised during the year - - - - Expired during the year - - - - Outstanding at 31 December 4,656,190 44.29p 4,266,190 44.32p Exercisable at 31 December - - - - The weighted average remaining contractual life for the share options outstanding as at 31 December 2007 is 9.316 years (2006 9.273) The weighted average fair value of options granted during the year was £0.2061 (2006: £0.0956 - No shares granted). The range of exercise prices for options outstanding at the year end was £0.3275 - £0.4625 (2006 £0.425 - £0.4625) The following table lists the inputs to the models used for the share based payment plans 1995 Scheme Equity Partnership Plan 2006 Scheme Expected volatility (%) 20% 20% 20% Risk-free interest rate (%) 5% 5% 5% Expected life of option (years) 4.5 4 5 Weighted average exercise price (£) 0.425 0.425 0.4625 Valuation model used Black Scholes Black Scholes Black Scholes 22. EVENTS SINCE THE BALANCE SHEET DATE In June 2007, the Company entered into a forward exchange contract to limit its currency exposure to the Euro based on its investment in the Stonehage Westcity Property Fund ("Fund"), which is Euro-denominated. With the strengthening of the Euro against the Pound in the last year, the value of the Company's investment in the Fund has increased. However, a corresponding foreign exchange loss has resulted from the forward exchange transaction which at 31st December 2007 was £1,550,000 for which the liability has been recognised (see Note 2). As at 9th June 2008, this loss amounted to £2,983,321 and was settled in cash and the security over the units of the Fund (per Note 9) was released. As a result of this cash outflow, the Company secured a two year loan facility from Chapman International Investment Ltd, the Company's largest shareholder. The Company will grant Chapman a charge over 5 million units in the Fund, as security for the loan. The loan is repayable at the end of the 2 year period. The facility will only be drawn down to the extent that the Company's remaining cash resources for working capital are insufficient. Enquiries: Westcity PLC 020 7424 6711 Michael Tannenbaum, Finance Director KBC Peel Hunt (Nominated Adviser and Broker) 020 7418 8900 Jonathan Marren Oliver Stratton This information is provided by RNS The company news service from the London Stock Exchange END FR QQLFLVQBFBBK </pre>