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Financial Statements NPS Property Consultants Limited

For the year ended 31 January 2010

Company No. 02888194

NPS Property Consultants Limited 2 Financial statements for the year ended 31 January 2010

Officers and professional advisers

Company registration number 02888194

Registered office Lancaster House 16 Central Avenue St Andrews Business Park Norwich Norfolk NR7 0HR

Directors P W Adams M L Britch P M Hawes A T Williams

Secretary G Reynolds

Bankers The Co-operative Bank 69 London Street Norwich Norfolk NR2 1HT

Solicitors Legal Services Norfolk County Council County Hall Martineau Lane Norwich Norfolk NR1 2DL

Auditor Grant Thornton UK LLP Chartered Accountants Statutory Auditor Kingfisher House 1 Gilders Way St James Place Norwich Norfolk NR3 1UB


Contents

Report of the directors 4 - 9

Report of the independent auditor 10 - 11

Accounting policies 12 - 14

Group profit and loss account 15

Group balance sheet 16

Company balance sheet 17

Group cash flow cash flow statement 18

Other primary statement 19

Notes to the financial statements 20 - 42


Report of the directors

FRS 17 pension adjustment represents the difference between employer contributions paid (£4,343,000) and the pension cost charged to operating profit (£4,192,000) plus the net finance charge within interest payable (£1,639,000).

The directors present their report and the financial statements of the group for the year ended 31 January 2010.

Principal activities and business review

The principal activities of the group are that of professional property consultants, providing services in the areas of architectural design, building surveying and CDM and project management.

Overview

The group expanded and strengthened its position throughout the UK within its core markets and its vision remains to be the property consultant of choice in the UK, recognised for delivering high quality, valued solutions to all its clients. In 2009 the group looked at the significant challenges facing its traditional markets that could impact upon its main sources of turnover and identified 'Building Schools for the Future' (BSF) as an area of challenge and opportunity. A firm decision to invest working capital “at risk” was made in an attempt to gain a foothold in this market and this has proven to be a major success. In the financial year 2009 the group made its first venture into this market as an equity shareholder within a consortium bidding for the North Lincolnshire Council BSF. In March 2009, the consortium was declared 'Preferred Bidder'. The program has a construction value exceeding £80 million and will deliver 7 schools over 4 years, generating significant fees. The group is currently working on the first four schemes within this contract which have a construction value in excess of £45 million. In the financial year 2010, NPS identified a second BSF opportunity with the London Borough of Lambeth and again formed a consortium with May Gurney Integrated Services plc, with whom success on the North Lincolnshire Council BSF had been achieved. NPS is again an equity shareholder within this consortium and in March 2010 the consortium was declared 'Preferred Bidder'. As a result of the Group’s continued expansion, a pre-tax profit for 2010, before any FRS 17 pension adjustments, was generated of £1,760,382 (2009: loss of £314,784). This profit was marginally below forecast, but was nevertheless an exceptional performance, and indeed targets would have been exceeded had it not been for;

• The downturn in the general economic climate in the second half of 2009 which resulted in restructuring costs of over £400,000;

• A working capital investment in undertaking the BSF bid for the London Borough of Lambeth of over £875,000;

• The commercial acquisitions undertaken during the year increased the goodwill amortisation by £100,000.


During the year, there were a number of highlights, the most significant of which were:

• The success of NPS Humber Limited in its first full year of trading;

• Extension of a number of framework contracts such as the Department of Education and Haringey;

• Contract to deliver Estates Services to Waveney District Council. This commenced 1 August 2009 and is based upon a 5 year term with a possible 2 year extension;

• A three year framework with Manchester City Council for mechanical and electrical engineering services;

• A seven year Building Surveying Contract for Kent County Council;

• Contracts for new Code 5 homes in Swindon and Code 6 in Wakefield;

• Commencement of the Authentic Leadership programme to enhance performance management across the Group.

In addition, the group continued to build on its previous contracts with clients and have secured new opportunities as well as bidding for and securing individual commissions and framework appointments. The group was strengthened by the acquisition on 31 March 2009 of Hamson Partnership Limited, based in Haywards Heath, West Sussex. Hamson’s has a strong track record and reputation in building surveying and sustainability and has a solid client base based primarily around long-term framework contracts.

Outlook The group’s core markets are based primarily upon the number of long-term partnership contracts the group has with Local Authorities and government bodies, but it continues to seek new partnership agreements, ad-hoc commissions and commercial acquisitions to strengthen its position. Since the year-end there have been a number of events that improve the outlook for 2011 and beyond and the most significant of these are;

• The consortium in which NPS is an equity stakeholder has been declared 'Preferred Bidder' in the BSF contract with the London Borough of Lambeth. This is a 10-year contract with a construction value of approximately £185 million. The 10-year contract, which is not dependent upon external equity or debt funding, comprises a complete end-to-end service solution for education including refurbishment, ongoing maintenance and facilities management, information technology and support, with NPS providing the design expertise for the partnership.

In addition to the base workload from these contract wins, the Lambeth bid provides the consortium with a significant opportunity to secure projects on the Primary and Community Programme (which is the programme of capital works for primary schools and children’s community projects) with exclusivity offered on all significant (over £250,000) school projects initiated after financial close is reached in August by the consortium. The fees generated from the core contract and the additional works will be a major source of turnover over the ten year period to the group.


• NPS South West Limited has recently been commissioned by the Borough of Poole to deliver their Primary Capital Programme comprising six schemes with a total construction value of £12 million, ranging from £150,000 to £6 million.

• NPS North East Limited has recently secured an extension to its contract with Wakefield District Housing to March 2014 worth approximately £12 million.

• For 2011, the group has identified the Central Government’s “Total Place” agenda as a key area of opportunities. To this end, NPS Stockport Limited has developed a strategy to deliver this agenda to the Public Sector and is actively marketing this strategy with Local Authorities across Northern England.

• Hamson Partnership Limited has secured three significant framework wins;

o Houses of Parliament Fire Safety Engineering o Hampshire County Council Building Surveying Services o Royal Marsden NHSFT Building Surveying Services

Based upon the activity since the year-end, the prospects for the group are highly positive and order books for 2011 are more than 90% full. In addition, the NPS Group is now a corporate member of the Association of Project Management (APM). The Association for Project Management is the largest professional body of its kind in Europe. This will be an added enhancement to the Group’s existing investment and commitment in the professional development of its project and programme personnel. Key performance indicators The group uses a range of performance measures to monitor and manage the business effectively. These are both financial and non-financial and the most significant of these are the key performance indicators (KPI’s). The key financial performance indicators are turnover, gross profit and margin, net profit and margin. These KPI’s indicate the volume of work the group has undertaken as well as the efficiency and profitability with which this work has been delivered. The Board believe that in order to gain a true reflection and appreciation of the group’s trading activities, the financial KPI’s should be stated before the impact of FRS 17 adjustments. The key non-financial performance indicator is the average number of employees employed by the group. The KPI’s for the year to 31 January 2010, with comparatives, are as follows: 2010 2009 Restated Turnover excluding share of associate (£) 77,008,058 64,341,378 Gross profit (£) 21,525,333 17,693,056 Gross profit margin 28.0% 27.5% Net (loss)/profit before tax (£) 1,760,382 (314,784) Net profit margin 2.3% (0.5%) Average number of employees 1,271 1,231 ==================================== ====================================


Key performance indicators (continued) The results for 2010 show a substantial increase in turnover of £12.7 million or 20% and this is primarily the result of the following:

� The inclusion within the group financial statements of the first full year’s results of the subsidiaries that joined the group in 2009, NPS Humber Limited, Barron & Smith Limited and Robson Liddle Limited;

� The inclusion within the group financial statements of 10 months results of Hamson Partnership

Limited, following acquisition on 31 March 2009.

� Organic growth in turnover arising from existing clients. The increase in turnover, accompanied by decisive management action on the cost base, particularly in relation to employee costs and the size of the workforce, the realisation of anticipated efficiencies following substantial capital investment in operating subsidiaries in 2009 and the benefit from a positive impact of work-in-progress has resulted in an overall increase in the gross profit margin to 28%. Net profit margin has also increased to 2.3% from (0.5%) which is a return to the level achieved in 2008 and the Board is confident that that this figure will increase further in 2011 as a result of contract wins and order books. Average employee numbers have increased by just 40 during the year to 1,271 from 1,231, and this marginal increase has generated a much larger increase in turnover and hence profitability. The Board is confident that this level of staffing is appropriate to the size of the business in the current economic climate and it is also pleased to report that the group has retained all key professional staff.

Results and dividends

The loss for the financial year was £82,248 (2009: loss of £1,704,124). The directors have not recommended a dividend.

Financial risk management objectives and policies

In common with other businesses, the group aims to minimise financial risk. The measures used by the directors to manage this risk include the preparation of profit and cash flow forecasts, regular monitoring of actual performance against these forecasts and ensuring that adequate financing facilities are in place to meet the requirements of the business. Trade debtors are also closely monitored to keep the risk of bad debts to a minimum.

Credit risk

Credit limits are set for customers based on a combination of credit checks and trading history, the limits are reviewed regularly and the debts are actively chased by the credit control department.

Interest rate risk

Borrowings attract interest at both fixed and variable rates, the variable element is agreed at regular intervals with the lending party.

Liquidity risk

Working capital requirements are regularly reviewed in conjunction with available financing facilities as part of routine financial management.


Directors

The directors who served the company during the year were as follows: P W Adams M L Britch P M Hawes A T Williams The company is a wholly owned subsidiary of Norse Group Limited. The group maintains liability insurance for its directors and officers. The directors and officers have also been granted a qualifying third party indemnity provision under section 234 of the Companies Act 2006. Neither the company's indemnity nor insurance provides cover in the event that a director or officer is proved to have acted fraudulently or dishonestly.

Policy on the payment of creditors

The group settles amounts owing to suppliers in accordance with individual supplier terms and conditions.

Directors' responsibilities

The directors are responsible for preparing the report of the directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The financial statements are required by law to give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that year. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group will continue in business.

The directors are responsible for keeping adequate accounting records that disclose with reasonable accuracy at any time the financial position of the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as each of the directors is aware:

• there is no relevant audit information of which the group's auditor is unaware; and

• the directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.


Donations

During the year the group made the following contributions:

2010 2009 £ £

Charitable 287,500 268,000 ==================================== ====================================

Disabled employees

Applications for employment by disabled persons are given full and fair consideration for all vacancies in accordance with their particular aptitudes and abilities. In the event of employee becoming disabled, every effort is made to retrain them in order that their employment with the group may continue.

Employee involvement

The directors recognise the importance of the employees to the ongoing success of the group and they ensure that they are all suitably qualified to undertake their roles and responsibilities. The recruitment and retention of employees is a key group objective and once employees have been recruited, all necessary training is put into place including:

• Induction course

• Customer care training

• Continuous Training and Development for professional employees

• Business related training as identified via the appraisal of employees

• Management training as appropriate

• Personal development

BY ORDER OF THE BOARD

G Reynolds Secretary 16 June 2010

10

Independent auditor's report to the member of NPS Property Consultants Limited

We have audited the financial statements of NPS Property Consultants Limited for the year ended 31 January 2010 which comprise the group profit and loss account, the group and parent company balance sheets, the group statement of total recognised gains and losses, the group cash flow statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the company’s member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s member those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s member, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the statement of directors responsibilities set out on page 8, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.

Scope of audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/UKNP.

Opinion on financial statements

In our opinion the financial statements: - give a true and fair view of the state of the group's and the parent company's affairs as at 31

January 2010 and of the group's loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted

Accounting Practice; and - have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the report of the directors for the financial year for which the financial statements are prepared is consistent with the financial statements.

11

Independent auditor's report to the member of NPS Property Consultants Limited (continued)

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept by the parent company, or returns adequate for

our audit have not been received from branches not visited by us; or - the parent company financial statements are not in agreement with the accounting records and

returns; or - certain disclosures of directors’ remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.

Patrick Harris Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditor, Chartered Accountants Norwich


Accounting policies

Basis of accounting

The financial statements have been prepared under the historical cost convention, and in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

The group has made a small loss for the year, however this is after FRS 17 pension adjustments of approximately £1.5m. These do not represent a cash outflow to the group. Forecasts prepared by the directors indicate a return to profitability in the 2010/11 financial year. Furthermore the group does not have significant external borrowings other than the bank overdraft. Any finance required is provided by the ultimate parent undertaking, Norfolk County Council, by way an available loan facility. The facility available at the year end was £5m. A formal letter has been obtained from Norfolk County Council confirming that it will continue to make available this facility at the current level for a period of at least twelve months from the signing of these financial statements. As a consequence the directors believe that the group and company is well placed to manage its business risks successfully despite the current uncertain economic outlook. Accordingly, it remains appropriate to prepare the financial statements on a going concern basis.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the company and all group undertakings for the year ended 31 January 2010. These are adjusted, where appropriate, to conform to group accounting policies. Acquisitions are accounted for under the acquisition method and goodwill on consolidation is capitalised and written off over twenty years from the year of acquisition. The results of companies acquired or disposed of are included in the profit and loss statement up to the date that control passes respectively. The group's share of the results and assets and liabilities of North Lincolnshire Learning Partnership (PSP) Limited and Engage North Lincolnshire Limited have been consolidated in these financial statements using the gross equity method of accounting, based on un-audited management accounts for the period ended 31 January 2010. The first audited accounts for both companies are for the eleven month period ended 31 March 2010. As a consolidated profit and loss account is published, a separate profit and loss for the parent company is omitted from the group financial statements by virtue of section 408 of the Companies Act 2006.

Turnover

Turnover represents the amount derived from the provision of goods and services, excluding VAT and trade discounts, charged on an accruals basis and recognised to the extent that the group has obtained the right to consideration through its performance.

Turnover in respect of long-term contracts and contracts for on-going services is recognised by reference to the stage of completion.

Amortisation

Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:

Goodwill - straight line over useful economic life of 20 years


Fixed assets

All fixed assets are initially recorded at cost.

Depreciation

Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of that asset as follows:

Leasehold property improvements - shorter of ten years or over period of lease Plant & equipment - 25% reducing balance per annum Motor vehicles - 25% reducing balance per annum Computer equipment - 25% straight line per annum

Stocks

Stocks are valued at the lower of cost and net realisable value.

Work in progress

The attributable profit on long-term contracts is recognised once their outcome can be assessed with reasonable certainty. The profit recognised reflects the proportion of work completed to date on the project. Costs associated with long-term contracts are included in stock to the extent that they cannot be matched with contract work accounted for as turnover. Long term contract balances included in stocks are stated at cost after provision has been made for any foreseeable losses and the deduction of applicable payments on account. Full provision is made for losses on all contracts in the year in which the loss is first foreseen.

Operating lease agreements

Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the lease term.

Finance leases and hire purchase agreements

Assets acquired under finance leases and hire purchase are treated as tangible fixed assets and depreciation is provided accordingly. The present value of future rentals is shown as a liability and the interest element of rental obligations is charged to the profit and loss account over the period of the lease in proportion to the capital balance outstanding.

Taxation

The charge for taxation is based on the result for the period and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.

Deferred tax is recognised on all timing differences where the transactions or events that give an obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred but not reversed by the balance sheet date.

Deferred tax assets are recognised when it is more likely than not that they will be recovered. Deferred tax is measured using rates of tax that have been enacted or substantively enacted by the balance sheet date and is not discounted.


Pension costs and other post-retirement benefits

Defined benefit schemes The amounts charged to operating profit are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the profit and loss account if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The interest cost and the expected return on assets are shown as a net amount of other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised immediately in the statement of total recognised gains and losses.

The defined benefit scheme is funded, with the assets of the scheme held separately from those of the group, in a separate trustee-administered fund. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to the scheme liabilities. The actuarial valuations are prepared on a triennial basis and updated annually. The resulting defined benefit asset or liability, net of the related deferred tax, is presented separately after other net assets on the face of the balance sheet. Further details regarding the group pension schemes are contained in note 19 to the financial statements. Defined benefit schemes treated as money purchase schemes Employees of NPS London Limited are members of the Norfolk Pension Fund Defined Benefit Scheme. The transfer of employees to NPS London Limited from the London Borough of Waltham Forest was on a fully funded actuarial basis, however at the year end the actuary has not allocated the assets and liabilities pertaining to these employees. Accordingly, contributions in respect of these employees have been treated as if they are contributions to a money purchase scheme. Employees of NPS Humber Limited are members of the East Riding Pension Fund, a local government pension scheme. Under the terms of the transfer agreement, the actuarial risks associated with the scheme remain with Kingston Upon Hull City Council. The contributions paid by NPS Humber Limited are set in relation to the current service period only and as such the group has accounted for the contributions to the scheme as if it were a defined contribution scheme. Defined contribution scheme Contributions to defined contribution schemes are charged to the profit and loss account when they fall due on the accruals basis.

Financial instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all of its financial liabilities.

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the balance sheet. Finance costs and gains or losses relating to financial liabilities are included in the profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.


Group profit and loss account

2010 2009 Note £ £

(restated - note 30)

The accompanying accounting policies and notes form part of these financial statements.

Gross turnover 1 78,534,420 64,341,378 Less: share of associate (1,526,362) - --------------------------------------------------- ---------------------------------------------------

Group turnover 77,008,058 64,341,378

Cost of sales (2010 includes exceptional costs of £878,916) 3 (55,331,725) (48,235,322) -------------------------------------------------- ---------------------------------------------------

Gross profit 21,676,333 16,106,056

Other operating charges 2 (20,027,539) (18,344,088) Other operating income 328,091 397,808 ---------------------------------------------- ----------------------------------------------

Group operating profit/(loss) 4 1,976,885 (1,840,224) Share of operating profit in associate 1,255 - ---------------------------------------------- ----------------------------------------------

Profit/(loss) before interest 1,978,140 (1,840,224)

Interest receivable and similar income 7 24,093 170,064 Interest payable and similar charges 8 (1,729,851) (627,624) ---------------------------------------------- ----------------------------------------------

Profit/(loss) on ordinary activities before taxation 272,382 (2,297,784)

Taxation on profit/(loss) on ordinary activities 9 (177,678) 504,990 ---------------------------------------------- ----------------------------------------------

Profit/(loss) on ordinary activities after taxation 94,704 (1,792,794)

Minority interests 23 (176,952) 88,670 ------------------------------------ ----------------------------------------------

Loss for the financial year 24 (82,248) (1,704,124) ==================================== ==============================================

All of the activities of the group are classed as continuing.

NPS Property Consultants Limited (Company number 02888194) 16 Financial statements for the year ended 31 January 2010

Group balance sheet

2010 2009 Note £ £ £ £


Fixed assets Intangible assets 11 4,896,119 3,349,204 Tangible assets 12 3,732,117 3,786,740 Investment in associate - share of gross assets 425,477 - - share of gross liabilities (414,622) - ---------------------------------------------- ----------------------------------------------

13 10,855 - ---------------------------------------------- ----------------------------------------------

8,639,091 7,135,944

Current assets Stocks 14 753,793 652,549 Debtors 15 20,385,045 18,143,741 Cash at bank and in hand 797,437 948,426 ---------------------------------------------- ----------------------------------------------

21,936,275 19,744,716 Creditors: amounts falling due within one year 17 (22,934,788) (21,194,935)

--------------------------------------------------- ---------------------------------------------------

Net current liabilities (998,513) (1,450,219) ---------------------------------------------- ----------------------------------------------

Total assets less current liabilities 7,640,578 5,685,725 ============================================== ==============================================

Financed by: Creditors: amounts after more than one year 18 988,971 200,182 Defined benefit pension scheme liability 19 22,500,720 15,867,360 ---------------------------------------------- ----------------------------------------------

23,489,691 16,067,542 Capital and reserves Called-up equity share capital 22 2,542,968 2,542,968 Profit and loss account 24 (17,956,150) (12,577,438) ---------------------------------------------- ----------------------------------------------

Equity shareholder's deficit 25 (15,413,182) (10,034,470) Minority interests 23 (435,931) (347,347) ---------------------------------------------- ----------------------------------------------

7,640,578 5,685,725 ============================================== ==============================================

These financial statements were approved by the directors and authorised for issue on 16 June 2010 and signed on their behalf by:

M L Britch Director

NPS Property Consultants Limited (Company number 02888194) 17 Financial statements for the year ended 31 January 2010

Company balance sheet


2010 2009

Note £ £ £ £ Fixed assets Tangible assets 12 1,418,918 1,346,824 Investments 13 5,628,076 3,630,744 ---------------------------------------------- ----------------------------------------------

7,046,994 4,977,568

Current assets Stocks 14 230,225 375,079 Debtors 15 9,054,758 13,280,088 Cash at bank and in hand 738,652 743,500 ---------------------------------------------- ----------------------------------------------

10,023,635 14,398,667 Creditors: amounts falling due within one year 17 (14,278,456) (13,720,671)

--------------------------------------------------- ---------------------------------------------------

Net current (liabilities)/assets (4,254,821) 677,996 ---------------------------------------------- ----------------------------------------------

Total assets less current liabilities 2,792,173 5,655,564 ============================================== ==============================================

Financed by: Creditors: amounts after more than one year 18 922,737 11,332 Defined benefit pension scheme liability 19 9,133,920 9,365,040 ---------------------------------------------- ----------------------------------------------

10,056,657 9,376,372 Capital and reserves Called-up equity share capital 22 2,542,968 2,542,968 Profit and loss account 24 (9,807,452) (6,263,776) ---------------------------------------------- ----------------------------------------------

Equity shareholder's deficit (7,264,484) (3,720,808) --------------------------------------------- ------------------------------------,---------

2,792,173 5,655,564 ============================================== ==============================================

These financial statements were approved by the directors and authorised for issue on 16 June 2010 and signed on their behalf by:

M L Britch Director


Group cash flow statement

2010 2009 Note £ £


Net cash inflow from operating activities 26 1,581,675 2,777,439

Returns on investments and servicing of finance 26 (66,758) (61,560)

Taxation paid (19,568) (628,786)

Capital expenditure and financial investment 26 (1,068,924) (1,074,713)

Acquisitions and disposals 26 (688,359) (1,037,364) ---------------------------------------------- ----------------------------------------------

Cash outflow before financing (261,934) (24,984)

Financing 26 (216,181) (223,915) ------------------------------------ ----------------------------------------------

Decrease in cash in the year 26 (478,115) (248,899) ==================================== ==============================================


Other primary statement


Group statement of total recognised gains and losses

2010 2009 £ £ Loss for the financial year (82,248) (1,704,124) Actuarial loss in respect of defined benefit pension scheme (7,725,000) (6,634,000) Deferred tax attributable to the actuarial loss 2,163,000 1,857,520 Transfer share of actuarial loss to minority interest 265,536 65,088 ---------------------------------------------- ----------------------------------------------

Total recognised gains and losses for the year (5,378,712) (6,415,516) ============================================== ===================================================


Notes to the financial statements

1 Turnover

Turnover, which took place in the UK, is attributable to the following classes of business:

2010 2009 £ £

Property consultancy and design services 77,008,058 64,341,378 Construction and civil engineering - associate company 1,526,362 - ---------------------------------------------- ----------------------------------------------

78,534,420 64,341,378 =============================================== ===================================================

2 Other operating charges

2010 2009 £ £ Restated Administrative expenses 20,027,539 18,344,088 ============================================== ==============================================

3 Exceptional item

Included within cost of sales in the current year is £878,916 (2009: £nil) in respect of costs incurred in respect of the bid for the Building Schools for the Future framework contract with the London Borough of Lambeth. These were fully expensed in the year as the contract had not been awarded at the year end.

4 Group operating profit/(loss)

Group operating profit/(loss) is stated after charging/(crediting):

2010 2009 £ £

Amortisation of intangible fixed assets 268,545 167,131 Depreciation of owned fixed assets 1,107,179 1,202,139 Depreciation of fixed assets held under finance leases 194,360 191,440 Profit on disposal of fixed assets (6,229) (5,601) Operating lease costs: Land and buildings 1,758,986 1,572,587 Plant and machinery 347,902 288,976 Auditor's remuneration - audit of the financial statements 11,775 13,500 Auditor's remuneration - other fees 132,600 92,525 ======================================== =================================

Auditor's remuneration - other fees: - Statutory audit of subsidiary undertakings 54,500 45,000 - Taxation services 41,830 34,785 - Accountancy advisory services 14,150 12,740 - Other advisory services 22,120 - ------------------------------- -------------------------------

132,600 92,525 =============================== ==============================


5 Particulars of employees

The average number of staff employed by the group during the financial year amounted to:

2010 2009 Number Number

Architectural services 402 388 Building surveying group 493 477 Business support 205 209 Estates 104 85 CDM and project management 23 26 NPS Norwich 44 46 --------------------- ---------------------

1,271 1,231 ===================== =====================

The aggregate payroll costs of the above were: 2010 2009 £ £

Wages and salaries 38,584,533 32,685,689 Social security costs 3,138,795 2,709,453 Pension costs 5,222,209 6,125,106 --------------------------------------------------- ---------------------------------------------------

46,945,537 41,520,248 =================================================== ===================================================

Pension costs are amounts charged to operating profit and do not include amounts charged to finance costs (note 8) and amounts recognised in the statement of recognised gains and losses. Pension costs for 2010 include £1,030,209 (2009 - £1,123,106) in respect of contributions to defined contribution pension schemes and contributions made in respect of employees that are members of defined benefit schemes that are treated as if they were defined contribution pension schemes.

6 Directors

Remuneration in respect of directors was as follows:

2010 2009 £ £

Emoluments receivable (including benefits in kind) 155,137 158,898 ==================================== ===============================

The number of directors who accrued benefits under group pension schemes was as follows:

2010 2009 No No

Defined benefit schemes 2 2 =============== ===============


7 Interest receivable and similar income

2010 2009 £ £

Bank interest receivable 16,579 154,420 Other loan interest receivable 7,514 15,644 ------------------------------ ----------------------------------

24,093 170,064 ============================= ===============================

8 Interest payable and similar charges

2010 2009 £ £

Interest payable on bank borrowing and similar charges 90,851 231,624 Net finance charges in respect of defined benefit pension schemes (note 19) 1,639,000 396,000 ------------------------------------ ----------------------------------

1,729,851 627,624 ==================================== ===============================

9 Taxation on profit/(loss) on ordinary activities

(a) Analysis of charge/(credit) in the year 2010 2009 £ £ Current tax:

In respect of the year: UK Corporation tax based on the results for the year at 28% 693,430 121,085 (Over)/under provision in prior year (74,754) 35,320 ------------------------------------ ------------------------------------

Total current tax (note 9(b)) 618,676 156,405

Deferred tax:

Deferred tax on FRS 17 pension adjustment (note 16) (416,640) (555,240) Origination and reversal of timing differences excluding FRS 17 (note 16) (69,754) (93,185) Adjustment in respect of prior years (note 16) 45,396 (12,970) ------------------------------------- ------------------------------------

Total deferred tax (440,998) (661,395) ------------------------------------- ------------------------------------

Taxation on profit/(loss) on ordinary activities 177,678 (504,990) ==================================== ====================================


9 Taxation on profit/(loss) on ordinary activities (continued) (b) Factors affecting current tax charge/(credit)

The tax assessed on the profit/(loss) on ordinary activities for the year is higher than the standard rate of corporation tax in the UK of 28% 2010 2009 £ £

Profit/(loss) on ordinary activities before taxation excluding associate 271,127 (2,297,784) ============================================== ===========================================

Profit/(loss) on ordinary activities multiplied by rate of tax 75,916 (643,380) Expenses not deductible for tax purposes 48,960 75,349 Adjustments to tax charge in respect of previous periods (74,754) 35,320 Difference between capital allowances and depreciation (6,830) 79,649 Pension contribution timing difference 416,640 555,240 Other timing differences 90,115 8,118 Goodwill amortisation 68,629 41,598 Effect of higher rates at start of the year - 4,511 ---------------------------------------------- ------------------------------------

Total current tax (note 9(a)) 618,676 156,405 ============================================== ====================================

10 Loss attributable to members of the parent company

The loss dealt with in the financial statements of the parent company was £1,173,436 (2009 - £906,296).

11 Intangible fixed assets

Group Goodwill £

Cost At 1 February 2009 3,606,919 Additions (note 29) 1,830,896 Disposals (15,436) ----------------------------------------------

At 31 January 2010 5,422,379 ==============================================

Amortisation At 1 February 2009 257,715 Charge for the year 268,545 -------------------------------

At 31 January 2010 526,260 ===============================

Net book value At 31 January 2010 4,896,119 ==============================================

At 31 January 2009 3,349,204 ==============================================


12 Tangible fixed assets

Group Leasehold property

improvements Plant &

equipment Motor vehicles

Computer equipment Total

£ £ £ £ £

Cost At 1 February 2009 1,722,591 1,856,969 80,456 4,899,282 8,559,298 Acquisitions (note 29) 6,556 77,553 - 5,783 89,892 Additions 83,873 123,353 27,479 933,513 1,168,218 Disposals - - (20,444) (82,681) (103,125) ---------------------------------------------- -------------------------------------------- ------------------------------- ---------------------------------------------- ----------------------------------------------

At 31 January 2010 1,813,020 2,057,875 87,491 5,755,897 9,714,283 ============================================== ============================================= =============================== ============================================== ==============================================

Depreciation At 1 February 2009 376,999 1,004,927 44,803 3,345,829 4,772,558 Charge for the year 165,931 245,779 7,849 881,980 1,301,539 On disposals - - (12,949) (78,982) (91,931) ---------------------------------------------- -------------------------------------------- ------------------------------- ---------------------------------------------- ----------------------------------------------

At 31 January 2010 542,930 1,250,706 39,703 4,148,827 5,982,166 ============================================== ============================================== =============================== ============================================== ==============================================

Net book value At 31 January 2010 1,270,090 807,169 47,788 1,607,070 3,732,117 ============================================== ==================================== =============================== ============================================== ==============================================

At 31 January 2009 1,345,592 852,042 35,653 1,553,453 3,786,740 ============================================== ==================================== =============================== ============================================== ==============================================

The net book value of fixed assets includes an amount of £255,720 (2009: £456,895) in respect of assets held under finance leases (including hire purchase contracts). The depreciation charge in respect of these assets for the year was £194,360 (2009: £191,440).


12 Tangible fixed assets (continued)

Company Leasehold property

improvements Plant &

equipment Motor vehicles

Computer equipment Total

£ £ £ £ £

Cost At 1 February 2009 511,157 915,005 71,107 2,729,461 4,226,730 Additions 56,063 21,948 27,479 534,493 639,983 Disposals - - (20,444) (82,681) (103,125) ------------------------------------ ------------------------------------ ------------------------------- ---------------------------------------------- ----------------------------------------------

At 31 January 2010 567,220 936,953 78,142 3,181,273 4,763,588 ==================================== ==================================== =============================== ============================================== ==============================================

Depreciation At 1 February 2009 186,292 624,564 42,836 2,026,214 2,879,906 Charge for the year 53,917 68,719 6,003 428,056 556,695 On disposals - - (12,949) (78,982) (91,931) ----------------------------------- ------------------------------------ ------------------------------- ---------------------------------------------- ----------------------------------------------

At 31 January 2010 240,209 693,283 35,890 2,375,288 3,344,670 =================================== ==================================== =============================== ============================================== ==============================================

Net book value At 31 January 2010 327,011 243,670 42,252 805,985 1,418,918 ==================================== ==================================== =============================== ==================================== ==============================================

At 31 January 2009 324,865 290,441 28,271 703,247 1,346,824 ==================================== ==================================== =============================== ==================================== ==============================================

The net book value of fixed assets includes an amount of £89,694 (2009: £179,271) in respect of assets held under finance leases (including hire purchase contracts). The depreciation charge in respect of these assets for the year was £89,577 (2009: £89,577).

13 Investments

Group

Investment in associate undertaking

£ Cost and net book value At 1 February 2009 - Acquired in year 9,600 Share of result for financial year 1,255 ------------------------------ At 31 January 2010 10,855 ===============================

Company

Investment in associate undertaking

Investment in subsidiary

undertakings Total £ £ £ Cost and net book value At 1 February 2009 - 3,630,744 3,630,744 Additions 9,600 1,987,732 1,997,332 ------------------------------ -------------------------------------------- --------------------------------------------- At 31 January 2010 9,600 5,618,476 5,628,076 =============================== ===========================================-- ============================================


13 Investments (continued)

The investment in subsidiary undertakings comprises of the following undertakings incorporated in England.

Holding

Proportion of voting rights and shares held Nature of business

NPS North East Limited Ordinary shares 100% Property consultants NPS North West Limited Ordinary shares 100% Property consultants NPS South East Limited Ordinary shares 100% Property consultants NPS Stockport Limited Ordinary shares 80% Property consultants NPS London Limited Ordinary shares 80% Property consultants NPS South West Limited Ordinary shares 80% Property consultants John Packer Associates Limited Ordinary shares 100% Building services consultants NPS Humber Limited Ordinary shares 60% Property consultants Barron and Smith Limited Ordinary shares 100% Architects Robson Liddle Limited Ordinary shares 100% Building services consultants Hamson Partnership Ltd Ordinary shares 100% Building services consultants Associate undertaking During the year the company acquired a 24% shareholding in North Lincolnshire Learning Partnership (PSP) Limited, a company incorporated in England. The principal activity of North Lincolnshire Learning Partnership (PSP) Limited is that of a holding company. North Lincolnshire Learning Partnership (PSP) Limited owns 80% of the share capital of Engage North Lincolnshire Limited, the principal activity of which is construction and civil engineering.

14 Stocks

The group The company 2010 2009 2010 2009 £ £ £ £ Work in progress 753,793 652,549 230,225 375,709 ==================================== ==================================== ==================================== ====================================

15 Debtors

The group The company 2010 2009 2010 2009 £ £ £ £ Trade debtors 10,473,907 10,918,683 933,535 3,748,845 Amounts owed by group undertakings (note 21) - - 4,848,334 5,088,861 Amounts owed by parent and fellow subsidiary undertakings (note 21) 2,201,477 1,784,552 1,283,236 1,784,552 Amounts owed by associate undertaking 96,000 - 96,000 - Corporation tax repayable - 68,458 - 68,458 Amounts recoverable on contracts 4,906,382 3,584,935 566,741 1,741,916 Other debtors 313,576 167,871 136,985 72,054 Deferred taxation (note 16) 314,067 293,652 179,877 202,636 Prepayments and accrued income 2,079,636 1,325,590 1,010,050 572,766 --------------------------------------------------- ---------------------------------------------- --------------------------------------------------- ----------------------------------------------

20,385,045 18,143,741 9,054,758 13,280,088 =================================================== ============================================== =================================================== ==============================================


16 Deferred taxation

The movement in the deferred taxation asset during the year was:

The group The company 2010 2009 2010 2009 £ £ £ £ Asset brought forward 293,652 187,497 202,636 164,141 Acquired with subsidiary undertaking (3,943) - - - Origination and reversal of timing differences 69,754 93,185 9,755 34,647 Adjustment in respect of prior years (45,396) 12,970 (32,514) 3,848 ------------------------------------ ------------------------------------ ------------------------------------ ------------------------------------

Asset carried forward (note 15) 314,067 293,652 179,877 202,636 ==================================== ==================================== ==================================== ====================================

The deferred tax asset consists of the tax effect of timing differences in respect of:

Group 2010 2009 £ £

Excess of depreciation over capital allowances 232,548 243,167 Other timing differences 81,519 50,485 ------------------------------------ ------------------------------------

314,067 293,652 ==================================== ====================================

Company 2010 2009 £ £

Excess of depreciation over capital allowances 152,405 152,151 Other timing differences 27,472 50,485 ------------------------------------ ------------------------------------

179,877 202,636 ==================================== ====================================

The movement in the deferred tax asset relating to the pension deficit is as follows:

The group The company 2010 2009 2010 2009 £ £ £ £ Asset brought forward 6,170,640 3,757,880 3,641,960 1,955,800 Transfer to subsidiary company - - (1,142,960) - Credit to profit and loss account in year 416,640 555,240 921,760 257,880 Deferred tax on actuarial loss for the year 2,163,000 1,857,520 131,320 1,428,280 ------------------------------------------ ----------------------------------------- -------------------------------------------- -------------------------------------------

Asset carried forward (note 19) 8,750,280 6,170,640 3,552,080 3,641,960 ============================================ ============================================= ============================================== =============================================


17 Creditors: amounts falling due within one year

The group The company 2010 2009 2010 2009 £ £ £ £ Bank overdraft 395,420 68,294 268,504 52,982 Trade creditors 3,546,949 3,195,666 832,879 1,386,570 Amounts owed to group undertakings (note 21) - - 4,130,079 858,596 Amounts owed to parent and fellow subsidiary undertakings (note 21) 5,027,294 4,848,783 4,645,825 4,654,630 Corporation tax 653,430 - 653,430 - Obligations under finance leases 164,705 287,804 42,089 161,258 Other taxation and social security 2,769,905 3,344,096 1,911,022 2,764,099 Other creditors 1,367,044 1,091,858 791,837 1,014,491 Accruals and deferred income 9,010,041 8,358,434 1,002,791 2,828,045 --------------------------------------------------- ---------------------------------------------- --------------------------------------------------- ----------------------------------------------

22,934,788 21,194,935 14,278,456 13,720,671 =================================================== ============================================== =================================================== ==============================================

The group Included within other creditors is £630,310 (2009: £nil) in respect of outstanding pension contributions. The company Included within other creditors is £141,859 (2009: £nil) in respect of outstanding pension contributions.

18 Creditors: amounts falling due after more than one year

The group The company 2010 2009 2010 2009 £ £ £ £ Obligations under finance leases 188,971 200,182 122,737 11,332 Loan notes 800,000 - 800,000 - --------------------------------------- ----------------------------------- ------------------------------------- -------------------------------

988,971 200,182 922,737 11,332 ====================================== =================================== ==================================== =============================

Net obligations under finance leases and hire purchase contracts are secured by the assets concerned. Obligations under finance leases and hire purchase contracts are all repayable within five years. The loan notes fall due for repayment as follows: The group The company 2010 2009 2010 2009 £ £ £ £ Within one year (included within other creditors) 400,000 - 400,000 - Between one and two years 400,000 - 400,000 - Between two and five years 400,000 - 400,000 - --------------------------------------- ----------------------------------- ------------------------------------- -------------------------------

1,200,000 - 1,200,000 - ====================================== =================================== ==================================== =============================


19 Pension commitments

The calculations for FRS 17 disclosures are based on a full actuarial valuation of the scheme as at 31 March 2007 updated to 31 January 2010 by a qualified independent actuary.

The group The main assumptions used by the actuaries to calculate scheme liabilities of the group under FRS 17 were:

2010 2009 2008 % % %

Rate of increase in salaries 4.0 5.1 5.1 - 5.25 Rate of increase in pensions in payment 3.5 3.6 3.5 - 3.6 Discount rate 5.5 6.9 5.8 - 6.3 Inflation assumption 3.5 3.6 3.5 - 3.6

The post retirement mortality assumptions used to value the benefit obligation at the year end are based on the PFA92 and PMA92 tables, projected to calendar year 2033 for non-pensioners and 2017 for pensioners.

The actual return on scheme assets in the year was a gain of £13,915,000 (2009: loss of £14,320,000). The fair value of the scheme assets and the expected rate of return, the present value of the scheme liabilities and the resulting deficit are:

2010 2009 2008 Long-

term rate of return

expected Value

Long-term rate of return expected Value


% £ % £ % £

Equities 7.7 63,157,000 7.5 42,347,000 7.5-7.9 49,895,000 Bonds 5.0 16,281,000 5.7 12,818,000 4.5-5.8 13,632,000 Property 5.7 8,195,000 5.5 6,466,000 5.6-6.5 8,811,000 Cash 4.8 6,951,000 4.0 5,175,000 4.6-7.5 5,323,000 --------------------------------------------------- -------------------------------------------------- ---------------------------------------------------

Total market value of assets 94,584,000 66,806,000 77,661,000 Present value of scheme liabilities (125,835,000) (88,844,000) (91,082,000) --------------------------------------------------- ------------------------------------------------- ---------------------------------------------------

Deficit in the scheme (31,251,000) (22,038,000) (13,421,000) Related deferred tax asset (note 16) 8,750,280 6,170,640 3,757,880 ---------------------------------------------- -------------------------------------------------- ---------------------------------------------------

Net pension liability (22,500,720) (15,867,360) (9,663,120) ============================================== =================================================== ===================================================


19 Pension commitments (continued)

An analysis of the movement in the deficit during the year is shown below: 2010 2009 £ £

At 1 February 2009 (22,038,000) (13,421,000) Initial recognition of FRS 17 defined benefit deficit (138,000) - Total operating charge (4,192,000) (5,002,000) Total finance charge (1,639,000) (396,000) Actuarial loss (7,587,000) (6,634,000) Employer contributions 4,343,000 3,415,000 --------------------------------------------------- ---------------------------------------------------

At 31 January 2010 (31,251,000) (22,038,000) =================================================== ===================================================

The initial recognition of the FRS 17 deficit relates to the subsidiary undertaking, NPS South West Limited. In prior years contributions paid to the Norfolk pension scheme were treated as if they were contributions to a defined benefit pension scheme as the actuary had not allocated the assets and liabilities pertaining to these employees. The allocation took place in the current year at which point the defined benefit pension deficit was recognised in the financial statements. An analysis of the defined benefit cost follows:

Analysis of the amount charged to operating profit/(loss):

2010 2009 £ £ Current service cost (3,613,000) (3,670,000) Past service costs (392,000) (1,332,000) Losses on settlements and curtailments (187,000) - ---------------------------------------------- ----------------------------------------------

Total operating charge (4,192,000) (5,002,000) ============================================== ==============================================

Analysis of the amount charged to finance costs:

2010 2009 £ £

Expected return on assets in the scheme 4,811,000 5,390,000 Interest costs (6,450,000) (5,786,000) ---------------------------------------------- ----------------------------------------------

Total finance charge (note 8) (1,639,000) (396,000) ============================================== ==============================================

Analysis of the amount recognised in statement of total recognised gains and losses:

2010 2009 £ £ Initial recognition of FRS17 defined benefit deficit (138,000) - Actual return less expected return on pension scheme assets 9,104,000 (19,710,000) Experience gains arising from scheme liabilities - 4,518,000 Effect on changes in assumptions (16,691,000) 8,558,000 ---------------------------------------------- ---------------------------------------------------

Actuarial losses (7,725,000) (6,634,000) ============================================== ===================================================


19 Pension commitments (continued) A five year history of experience gains and losses is shown below: 2010 2009 2008 2007 2006 Difference between the expected and actual return on scheme assets:

- amount (£) 9,104,000 (19,710,000) (5,923,000) 1,313,000 6,651,000 - % of scheme assets 10 (30) (8) 2 12

Experience gains/(losses) on scheme liabilities:

- amount (£) - 4,518,000 (5,893,000) 191,000 270,000 - % of the present value of scheme liabilities - 5 (6) – -

Total amount recognised in statement of total recognised gains and losses:

- amount (£) (7,725,000) (6,634,000) (5,240,000) 9,089,000 (5,177,000) - % of the present value of scheme liabilities (6) (7) (6) 13 (7)

The cumulative amount of actuarial gains and losses recognised in the statement of total recognised gains and losses at 31 January 2010 was a net loss of £17,231,000 (2009: net loss of £9,506,000).

Analysis of changes in the value of the scheme assets during the year 2010 2009 £ £ Market value of scheme assets at the beginning of the year 66,806,000 77,661,000 On initial recognition of defined benefit scheme 9,623,000 - Expected return on scheme assets 4,811,000 5,390,000 Actuarial gains/(losses) 9,104,000 (19,710,000) Employer contributions 4,343,000 3,415,000 Member contributions 1,916,000 1,487,000 Benefits paid (2,019,000) (1,437,000) --------------------------------------------------- ---------------------------------------------------

Market value of the scheme assets at the end of the year 94,584,000 66,806,000 ============================================== ==============================================

Analysis of changes in the value of the scheme liabilities during the year 2010 2009 £ £ Present value of scheme liabilities at the start of the year 88,844,000 91,082,000 On initial recognition of defined benefit scheme 9,761,000 - Total operating charge 4,192,000 5,002,000 Interest cost 6,450,000 5,786,000 Member contributions 1,916,000 1,487,000 Benefits paid (2,019,000) (1,437,000) Actuarial losses/(gains) 16,691,000 (13,076,000) --------------------------------------------------- ---------------------------------------------------

Present value of the scheme liabilities at the end of the year 125,835,000 88,844,000 ============================================== ==============================================



Five year history of scheme assets, liabilities and net deficit position

Future funding obligation The directors anticipate that contributions of approximately £4,311,000 (2009: £3,503,000) will be paid in the year to 31 January 2011.

The company The main assumptions used by the actuaries to calculate scheme liabilities of the company under FRS 17 were: 2010 2009 2008 % % %

Rate of increase in salaries 4.0 5.1 5.1 Rate of increase in pensions in payment 3.5 3.6 3.6 Discount rate 5.5 6.9 6.3 Inflation assumption 3.5 3.6 3.6

The post retirement mortality assumptions used to value the benefit obligation at the year end are based on the PFA92 and PMA92 tables, projected to calendar year 2033 for non-pensioners and 2017 for pensioners.

The actual return on scheme assets in the year was a gain of £4,672,000 (2009: loss of £8,889,000).

The fair value of the scheme assets and the expected rate of return, the present value of the scheme liabilities and the resulting deficit are:

2010 2009 2008 Long-

term rate of return

expected Value



% £ % £ % £

Equities 7.7 19,689,000 7.5 23,078,000 7.6 28,512,000 Bonds 5.0 5,538,000 5.7 7,945,000 5.3 8,061,000 Property 5.7 3,384,000 5.5 4,540,000 5.6 6,360,000 Cash 4.8 2,154,000 4.0 2,270,000 4.7 1,782,000 --------------------------------------------------- --------------------------------------------------- ---------------------------------------------------

Total market value of assets 30,765,000 37,833,000 44,715,000 Present value of scheme liabilities (43,451,000) (50,840,000) (51,700,000) --------------------------------------------------- --------------------------------------------------- ---------------------------------------------------

Deficit in the scheme (12,686,000) (13,007,000) (6,985,000) Related deferred tax asset (note 16) 3,552,080 3,641,960 1,955,800 ---------------------------------------------- --------------------------------------------------- ----------------------------------------------

Net pension liability (9,133,920) (9,365,040) (5,029,200) ============================================== =================================================== ==============================================

2010 2009 2008 2007 2006 £'000 £'000 £'000 £'000 £'000 Market value of plan assets at end of year 94,584 66,806 77,661 62,123 53,627 Present value of scheme liabilities at end of year (125,835) (88,844) (91,082) (69,896) (69,410) --------------------------------- -------------------------------- --------------------------------- -------------------------------- -------------------------------- Net deficit in the plan at end of year (31,251) (22,038) (13,421) (7,773) (15,783) ============================= ============================= ============================= ============================= =============================



An analysis of the movement in the deficit during the year is shown below:

2010 2009 £ £

At 1 February 2009 (13,007,000) (6,985,000) Total operating charge (969,000) (2,937,000) Total finance charge (661,000) (204,000) Actuarial loss (3,292,000) (5,101,000) Transfer to subsidiary company 4,082,000 - Employer contributions 1,161,000 2,220,000 --------------------------------------------------- ---------------------------------------------------

At 31 January 2010 (12,686,000) (13,007,000) =================================================== ===================================================

On 1 February 2009 there was a transfer of employees from NPS Property Consultants Limited to NPS South East Limited. The defined benefit deficit relating to these employees was also transferred at that date. An analysis of the defined benefit cost follows:

Analysis of the amount charged to operating profit/(loss): 2010 2009 £ £ Current service cost (947,000) (2,192,000) Past service charge - (745,000) Losses on settlements and curtailments (22,000) - ---------------------------------------------- ---------------------------------------------

Total operating charge (969,000) (2,937,000) ============================================== ==============================================

Analysis of the amount charged to finance costs: 2010 2009 £ £

Expected return on pension scheme assets 1,731,000 3,108,000 Interest on pension scheme liabilities (2,392,000) (3,312,000) ---------------------------------------------- ----------------------------------------------

Total finance charge (661,000) (204,000) ============================================== ==============================================

Analysis of the amount recognised in statement of total recognised gains and losses:

2010 2009 £ £

Actual return less expected return on pension scheme assets 2,941,000 (12,007,000) Experience gains arising on scheme liabilities - 1,821,000 (Loss)/gain arising from changes in assumptions underlying the present value of scheme liabilities (6,233,000) 5,085,000 ---------------------------------------------- ----------------------------------------------

Actuarial loss (3,292,000) (5,101,000) ============================================== ==============================================




2010 2009 2008 2007 2006

Difference between the expected and actual return on scheme assets:

- amount (£) 2,941,000 (12,007,000) (3,549,000) 650,000 3,985,000 - % of scheme assets 10 (32) (8) 2 13

Experience (losses)/gains on scheme liabilities:

- amount (£) - 1,821,000 (2,182,000) 190,000 (81,000) - % of the present value of scheme liabilities - (4) (4) – –

Total amount recognised in statement of total recognised gains and losses:

- amount (£) (3,292,000) (5,101,000) 196,000 5,080,000 (3,113,000) - % of the present value of scheme liabilities (8) (10) -

11

(7)

The cumulative amount of actuarial gains and losses recognised in the statement of total recognised gains and losses at 31 January 2010 was a net loss of £6,806,000 (2009: net loss of £3,514,000).

Analysis of changes in the value of the scheme assets during the year 2010 2009 £ £ Market value of scheme assets at the beginning of the year 37,833,000 44,715,000 Assets transferred to subsidiary undertaking (12,246,000) - Expected return on scheme assets 1,731,000 3,108,000 Actuarial losses 2,941,000 (12,007,000) Employer contributions 1,161,000 2,220,000 Member contributions 509,000 917,000 Benefits paid (1,164,000) (1,120,000) --------------------------------------------------- ---------------------------------------------------

Market value of the scheme assets at the end of the year 30,765,000 37,833,000 ============================================== ==============================================

Analysis of changes in the value of the scheme liabilities during the year 2010 2009 £ £ Present value of scheme liabilities at the start of the year 50,840,000 51,700,000 Liabilities transferred to subsidiary undertaking (16,328,000) - Total operating charge 969,000 2,937,000 Interest cost 2,392,000 3,312,000 Member contributions 509,000 917,000 Benefits paid (1,164,000) (1,120,000) Actuarial gains 6,233,000 (6,906,000) --------------------------------------------------- ---------------------------------------------------

Present value of the scheme liabilities at the end of the year 43,451,000 50,840,000 ============================================== ==============================================




--------------------------------- -------------------------------- --------------------------------- -------------------------------- --------------------------------

============================= ============================= ============================= ============================= ============================= Future funding obligation The directors anticipate that contributions of approximately £1,161,000 (2009: £2,217,000) will be paid in the year to 31 January 2011.

20 Commitments

Operating lease commitments At 31 January 2010 the group and company had annual commitments under non-cancellable operating leases as set out below.

The group Land and buildings Assets other than land and buildings

2010 2009 2010 2009 £ £ £ £ Operating leases which expire: Within 1 year 13,000 8,252 65,434 88,443 Within 1 to 2 years - - 35,474 - Within 2 to 5 years 370,347 248,150 258,731 285,138 Over 5 years 1,408,977 1,481,414 - - ---------- -------------------------------- -- ---------------------------------------- ----------------------------------- --------------------------------- 1,792,324 1,737,816 359,639 373,581 ============================================ ========================================== =================================== ==================================

The company Land and buildings Assets other than land

and buildings 2010 2009 2010 2009 £ £ £ £ Operating leases which expire: Within 1 year 13,000 8,252 7,887 60,235 Within 2 to 5 years - 176,150 55,847 159,392 Over 5 years 225,715 468,912 - - ---------- -------------------------------- -- -------------------------------- ----------------------------------- --------------------------------- 238,715 653,314 63,734 219,627 ============================================ =================================== =================================== ==================================

Capital commitments

At the year end the group was committed to capital expenditure of £313,925 (2009: £nil).

2010 2009 2008 2007 2006 £'000 £'000 £'000 £'000 £'000 Market value of plan assets at end of year 30,765 37,833 44,715 37,309 31,800 Present value of scheme liabilities at end of year (43,451) (50,840) (51,700) (44,268) (43,000)

Net deficit in the plan at end of year (12,686) (13,007) (6,985) (6,959) (11,200)


21 Related party transactions

The group The NPS Property Consultants group had the following transactions in the normal course of trade with the following entities within the Norfolk County Council and subsidiaries group.

Transactions Sales Purchases 2010 2009 2010 2009 £ £ £ £ Norfolk County Council 13,951,404 13,057,429 2,269,793 2,072,789 Norse Commercial Services Limited 378,101 281,607 97,077 798,220 GYB Services Limited - - 5,559 4,942 Suffolk Coastal Services Limited - - 105,596 143,167 Norfolk Environmental Waste Services 97,794 42,860 7,079 2,545 ============================================ ======================================= ========================================= =========================================

Balance Sheet Debtor Creditor 2010 2009 2010 2009 £ £ £ £ Norfolk County Council 2,010,982 1,756,052 4,453,231 4,324,741 Norse Commercial Services Limited 124,121 28,500 11,059 - GYB Services Limited - - 1,937 - Suffolk Coastal Services Limited - - 11,024 - Norfolk Environmental Waste Services 66,374 - 550,043 524,042 ============================================ ============================================ ============================================ ============================================

In addition, the group invests cash with Norfolk County Council on a commercial basis. The amount invested at 31 January 2010 was £738,000 (2009 - £741,000). The amounts owed to Norfolk Environmental Waste Services Limited at the year end relate primarily to tax losses surrendered to companies within the NPS Property Consultants group.


21 Related party transactions (continued)

The company NPS Property Consultants Limited had the following transactions and balances in the normal course of trade with other companies within the NPS Property Consultants group: Transactions Sales Purchases 2010 2009 2010 2009 £ £ £ £ NPS North East Limited 222,521 180,586 35,666 19,059 NPS North West Limited 170,948 43,497 471,453 464,099 NPS Stockport Limited 143,240 52,151 37,989 60,824 John Packer Associates Limited 34,123 55,224 290,615 132,418 NPS London Limited 103,008 214,072 - 110,939 NPS South West Limited 215,934 161,078 128,050 26,032 Robson Liddle Limited 16,372 - 6,900 15,875 Barron and Smith Limited 139,179 71,804 788,503 99,432 NPS South East Limited 419,042 - 676,109 - NPS Humber Limited 316,121 53,670 6,510 - Hamson Partnership Limited 5,061 - - - ============================================ ============================================ ============================================ ============================================ In addition to the above management charges amounting to £2,376,098 (2009: £1,212,511) were charged to subsidiary undertakings. Balance Sheet Debtor Creditor 2010 2009 2010 2009 £ £ £ £ NPS North East Limited - 503,045 395,332 - NPS North West Limited 945,180 666,738 - - NPS Stockport Limited - - 471,010 361,638 John Packer Associates Limited - 91,301 181,235 - NPS London Limited 1,739,720 2,043,452 - - NPS South West Limited 511,903 819,419 - - Robson Liddle Limited 210,590 269,967 - - Barron and Smith Limited 599,280 694,939 - - NPS South East Limited - - 2,073,299 - NPS Humber Limited - - 1,009,203 496,958 Hamson Partnership Limited 841,661 - - - ============================================ ============================================ ============================================ ============================================


21 Related party transactions (continued) In addition NPS Property Consultants Limited had the following transactions in the normal course of trade with the following entities within the Norfolk County Council and subsidiaries group.

Transactions Sales Purchases 2010 2009 2010 2009 £ £ £ £ Norfolk County Council 9,803,139 13,057,429 2,261,638 2,072,789 Norse Commercial Services Limited 361,269 281,607 94,341 798,220 GYB Services Limited - - 5,559 4,942 Suffolk Coastal Services Limited - - 105,596 143,167 Norfolk Environmental Waste Services 18,016 42,860 7,079 2,545 ============================================ ======================================= ========================================= =========================================

Balance Sheet Debtor Creditor 2010 2009 2010 2009 £ £ £ £ Norfolk County Council 1,164,656 1,756,052 4,286,396 4,324,741 Norse Commercial Services Limited 105,195 28,500 9,501 - GYB Services Limited - - 1,937 - Suffolk Coastal Services Limited - - 11,024 - Norfolk Environmental Waste Services 13,385 - 336,967 329,889 ============================================ ============================================ ============================================ ============================================

In addition, the company invests cash with Norfolk County Council on a commercial basis. The amount invested at 31 January 2010 was £738,000 (2009 - £741,000).

22 Share capital

Authorised share capital: 2010 2009 £ £ 2,542,968 Ordinary shares of £1 each 2,542,968 2,542,968 ============================================== ==============================================

Allotted, called up and fully paid: 2010 2009 Number £ Number £

Ordinary shares of £1 each 2,542,968 2,542,968 2,542,968 2,542,968 ============================================== ============================================== ============================================== ==============================================

23 Minority Interests

£

At 1 February 2009 347,347 Profit attributable to minority interests (176,952) Transfer of minority share of defined benefit pension scheme liability 265,536 ----------------------------------------------

At 31 January 2010 435,931 ==============================================


24 Reserves

Group Profit and loss

account £

At 1 February 2009 (12,577,438) Loss for the year (82,248) Actuarial loss in respect of defined benefit pension scheme (5,562,000) Transfer of minority interest share of actuarial loss 265,536 ----------------------------------------------

At 31 January 2010 (17,956,150) ==============================================

Company Profit and loss

account £

At 1 February 2009 (6,263,776) Loss for the year (1,173,436) Defined benefit pension scheme (2,370,240) ----------------------------------------------

At 31 January 2010 (9,807,452) ==============================================

25 Reconciliation of movements in equity shareholder's deficit

2010 2009 £ £ Loss for the financial year (82,248) (1,704,124) Actuarial loss in respect of defined benefit pension scheme (5,562,000) (4,776,480) Transfer of minority interest share of actuarial loss 265,536 65,088 ---------------------------------------------- ----------------------------------------------

Net addition to equity shareholder's deficit (5,378,712) (6,415,516) Opening equity shareholder's deficit (10,034,470) (3,618,954) ---------------------------------------------- ----------------------------------------------

Closing equity shareholder's deficit (15,413,182) (10,034,470) ============================================== ==============================================

26 Notes to the cash flow statement

Reconciliation of operating profit/(loss) to net cash inflow from operating activities

2010 2009 £ £ Operating profit/(loss) 1,976,885 (1,840,224) Amortisation 268,545 167,131 Depreciation 1,301,539 1,393,579 Profit on disposal of fixed assets (6,229) (5,601) (Increase)/decrease in stocks (101,244) 39,029 Increase in debtors (1,433,647) (2,089,557) (Decrease)/increase in creditors (273,174) 3,526,082 Provision for service cost of defined benefit pension scheme 4,192,000 5,002,000 Defined benefit pension scheme contributions paid (4,343,000) (3,415,000) ---------------------------------------------- ----------------------------------------------

Net cash inflow from operating activities 1,581,675 2,777,439 ============================================== ==============================================


26 Notes to the cash flow statement (continued)

Returns on investments and servicing of finance

2010 2009 £ £ Interest received 24,093 170,064 Interest paid (90,851) (231,624) ------------------------------- ------------------------------------

Net cash outflow from returns on investments and servicing of finance (66,758) (61,560) =============================== ====================================

Capital expenditure 2010 2009 £ £ Payments to acquire tangible fixed assets (1,086,347) (1,093,455) Receipts from sale of fixed assets 17,423 18,742 ---------------------------------------------- ----------------------------------------------

Net cash outflow from capital expenditure (1,068,924) (1,074,713) ============================================== ==============================================

Acquisitions 2010 2009 £ £ Cash consideration in respect of acquisitions (616,731) (983,858) Net overdrafts acquired (62,028) (53,506) Purchase of investment in associate (9,600) - ---------------------------------------------- ----------------------------------------------

Net cash outflow from acquisitions (688,359) (1,037,364) ============================================== ==============================================

Financing 2010 2009 £ £ Repayment of finance leases and hire purchase agreements (216,181) (223,915) ------------------------------------ ----------------------------------------------

Net cash outflow from financing (216,181) (223,915) ==================================== ==============================================


26 Notes to the cash flow statement (continued)

Reconciliation of net cash flow to movement in net funds

2010 2009 £ £

Decrease in cash in the year (478,115) (248,899) Cash outflow from decrease in hire purchase obligations 216,181 223,915 ------------------------------------ ------------------------------------

Change in net funds arising from cash flows (261,934) (24,984) New finance leases and hire purchase agreements (81,871) (703,251) Acquired with acquisitions - (8,650) ------------------------------------ ------------------------------------

Movement in net funds in the year (343,805) (736,885)

Net funds at 1 February 2009 392,146 1,129,031 --------------------------------------- ------------------------------------

Net funds at 31 January 2010 48,341 392,146 ==================================== ====================================

At 1 Feb 2009 Cash flows

Non-cash movements

At 31 Jan 2010

£ £ £ £ Cash in hand and at bank 948,426 (150,989) - 797,437 Bank overdraft (68,294) (327,126) - (395,420) ---------------------------------------------- ------------------------------------ ------------------------------------ ------------------------------------

Net cash 880,132 (478,115) - 402,017 Hire purchase agreements (487,986) 216,181 (81,871) (353,676) ---------------------------------------------- -------------------------------- ------------------------------------ ------------------------------------

Net funds 392,146 (261,934) (81,871) 48,341 ============================================== ==================================== ==================================== ====================================

27 Contingent liability

The company is part of a group VAT registration and as such is jointly and severally liable for the VAT liability of the entire group. The amount owed by the group at the year end was £1,707,181 (2009: £2,375,902).

28 Ultimate parent undertaking

The ultimate parent undertaking is Norse Group Limited and consolidated financial statements for this group are available from Companies House, Cardiff, CF14 3UZ.

The ultimate controlling party is Norfolk County Council by its ownership of 100% of the ordinary share

capital of Norse Group Limited.


29 Acquisitions

On 31 March 2009 NPS Property Consultants Limited acquired the entire issued share capital of Hamson Partnership Limited. Details of the asset acquired are given below:

Book value and fair value

£ Tangible fixed assets 89,892 Debtors 855,700 Cash at bank 1,441 Bank overdraft (63,469) Corporation tax creditor (122,780) Other creditors (600,006) Deferred taxation (3,943) ----------------------------------------------

Net assets acquired 156,835 ==============================================

Cash consideration (including costs of acquisition) 616,641 Loan notes 1,200,000 Deferred consideration (included in other creditors) 171,000 ----------------------------------------------

Total consideration 1,987,641 ----------------------------------------------

Goodwill arising 1,830,806 ==============================================

Deferred consideration represents the directors best estimate of further amounts payable. Additional consideration is payable if profit targets are achieved over the next two financial years. The post acquisition results of the above acquisition have not been separately analysed as "acquisitions" as they are not material to the group. In addition to the above additional goodwill of £90 has been recognised in relation to the acquisition of Robson Liddle Limited in the prior year.

30 Restatement of comparatives

On 1 February 2009, a number of staff and contracts were transferred from NPS Property Consultants Limited to the wholly owned subsidiary undertaking, NPS South East Limited. Following this transfer, management reviewed the allocation of costs between cost of sales and administrative expenses and a number of costs that previously were included within cost of sales were transferred to administrative expenses. The directors view is that the new allocation of costs more appropriately reflects the nature of these costs. To ensure the comparability of the numbers included within the profit and loss account the prior year figures have been amended to reflect the revised cost allocation. As a result costs of £3,606,439 which were previously included within cost of sales have been re-allocated to administrative expenses.

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