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NHBC Board of Directors As at June 200501 Sir John CarterSir John Carter joined the Boardof NHBC in January 1999 after acareer in the insurance industry,culminating in the roles of ChiefExecutive of Commercial Union plcand Chairman of the Associationof British Insurers. He continuesa number of other businessinterests including advisory roleswith major internationalcompanies. He is Chairman ofLondon Metropolitan University.02 Imtiaz FarookhiImtiaz Farookhi joined NHBC asChief Executive in April 1997. Hewas previously Chief Executive ofLeicester City Council where heled the successful regeneration ofthe city centre. Until recently, heserved on the national Learningand Skills Council, where he wasprominent on skills and furthereducation reform, and was afounder board member of theEnvironment Agency.03 The Lord Glentoran CBELord Glentoran was previouslyChairman of Redland Tile andBrick Ltd., which he successfullytransformed into a multi-millionpound subsidiary company inNorthern Ireland. He is currentlyan opposition front benchspokesman for Northern Ireland.An avid sportsman, he won anOlympic gold medal in thebobsleigh in the 1960s. He iscurrently Chairman of the NHBCNorthern Ireland Committee.04 Sir Graham HartSir Graham Hart joined the Board inDecember 2003, and is alsoChairman of the ConsumerCommittee. Sir Graham retired fromthe post of Permanent Secretary inthe Department of Health in 1997.He was Chairman of the King’s Fundfrom 1998 to 2004, and of CitizensAdvice from 1999 to 2004.05 Malcolm HarrisMalcolm Harris is Group ChiefExecutive of Bovis Homes. Hejoined NHBC’s Board in June 2001,and is the current Chairman ofNHBC’s Finance Committee.He is also a Fellow of the Instituteof Chartered ManagementAccountants, and a Director ofthe Home Builders Federation.06 Peter FosterPeter Foster joined NHBC’s Boardin March 2003. A Fellow of theAssociation of Chartered CertifiedAccountants, he brings over 35years of experience in theinsurance industry with CGNU (nowknown as AVIVA) where he wasGroup Finance Director prior to hisretirement. He was appointedChairman of the Audit Committeeon 1 January 2005.07 Stewart BaseleyChairman and Chief Executiveof Centex UK, Stewart Baseleybecame a Board Member in May2004. He joined Charles Churchin 1987 and, as Chief Executive,oversaw its sale to Beazer in1996. He served as a PLC Directorat Beazer from 1996 to 1998.He is also Chairman of the HomeBuilders Federation.08 09 1011 12 13 1401 02 03 0405 06 0708 Dr David Smith OBEDr David Smith, former ChiefExecutive of Dunfermline BuildingSociety, joined NHBC as BoardMember and Chairman of theScottish Committee in April2004. His previous appointmentsinclude Chairman of the BuildingSocieties Association, VicePresident of the EuropeanMortgage Federation andMember of the CML ExecutiveCommittee. In 1994, Dr Smithwas awarded the OBE.09 Graeme McCallumTaylor Woodrow plc Director,Graeme McCallum becameChairman of NHBC's StandardsCommittee in January 2000.A Fellow of the Institute ofChartered Accountants, he hasworked in the industry for over25 years, and his previousappointments include ChiefExecutive of Wilson ConnollyHoldings plc and ManagingDirector of Alfred McAlpine'sHomes Division.10 Rod MacEachraneNHBC’s Commercial DirectorRod MacEachrane, joined NHBCas a Claims Investigator in 1981.He has had extensive experienceranging from Regional ClaimsManager, Regional Directorand Director of Claims, to hiscurrent role. A charteredquantity surveyor, he is alsoa Director of NHBC BuildingControl Services and NHBCServices Ltd. He has been amember of the Institute ofArbitrators since 1985.11 Richard WerthRichard Werth, Chief Executiveof Banner Homes, becamea Board Member in May 2004.Joining Banner as FinanceDirector in 1987, he oversawa sustained period of expansion.In 1999, he led a public-to-privatemanagement buyout of Banner.12 Dame Yvonne Moores DBEDame Yvonne Moores DBE,former Chief Nursing Officer andDirector of Nursing, became aBoard Member in March 2004.Dame Yvonne is Pro-Chancellorand Chair of SouthamptonUniversity, as well as Patron oftheir Aids Research Centre andInternational Adviser to Thailand'sPrincess SrinagarindraFoundation. She was awarded hertitle of DBE in 1999.13 Richard TamayoFinance Director Richard Tamayo,joined NHBC in 1996. A Fellow ofthe Institute of CharteredAccountants in England andWales, he previously worked inthe house-building industry forBerkeley Group plc.14 Richard Lay CBERichard Lay joined NHBC’sBoard in June 2001. He isChairman of the Portman Estate,and former Chairman of DTZHoldings plc. He is a Fellow ofthe Royal Institution of CharteredSurveyors and was Presidentfrom 1998 to 1999. He is alsoChairman of Corby UrbanRegeneration Company.6 7

Introducing NHBCFor almost 70 years NHBC hasworked to raise the standardof new homes and provideprotection for new home buyers.Its unique stakeholder structureprovides a non-profit distributingframework that ensurescommercial efficiency is marriedwith public interest.NHBC embodies all the stakeholdergroups with an interest in newhomes. Consumers, mortgagelenders, builders and professionalinstitutions are all represented onNHBC’s Governing Council.As the UK’s leading warranty andinsurance provider for newhomes, NHBC’s BuildmarkNHBC’s Standards continue toimprove and evolve to reflect thechanging face of constructionwarranty covers approximately85% of new homes built andcurrently protects more than 1.7million homes.NHBC protects consumers both byproviding the 10-year Buildmarkwarranty and by setting theconstruction Standards with whichmore than 19,500 registeredhouse builders agree to comply.NHBC’s Standards continue toimprove and evolve to reflect thechanging face of construction.NHBC’s commitment to workingwith the house-building industryto raise standards is demonstratedin every part of the business: maintaining a Registerof builders who agreeto comply with NHBC’sRules and Standards setting and monitoringconstruction standards fornew homes inspecting homes at keystages of construction providing comprehensive10-year warranty andinsurance cover for the privateand social housing sectors. protecting consumersand helping the industryby assessing and managingrisks during theconstruction process providing a range ofeducational and technicalinformation and support to thehouse-building industry.NHBC protectsconsumers bothby providingthe 10-yearBuildmarkwarranty andby settingconstructionStandards withwhich morethan 19,500registeredhouse buildersagree to comply8 9

“The industrymust improvethe qualityof customerservice”The Barker ReviewCustomer satisfactionMeeting consumer expectations isa vital element of modernbusiness and during the last yearconsumer protection has remainedcentral to NHBC’s role andpurpose. Supported by itsinfluential Consumer Committee,NHBC has developed a series ofinitiatives that aim to reinforceconsumer protection and help theNHBC continues to work ona broad range of initiativesaimed at improving levelsof customer satisfactionhouse-building industry to improvecustomer satisfaction.The house-building industry hastaken up the challenge to improvelevels of satisfaction amongst newhome buyers. NHBC has supportedthis commitment through itscustomer satisfaction survey,launched in April 2004, which isproviding extensive managementinformation to many NHBCregistered builders on this keyarea of customer satisfaction.More than 100,000 new homebuyers are now being surveyedevery year, 9-12 months after theymove into their new home.The information gathered throughthe survey enhances the data thatNHBC feeds back to the industryin major builder reports.These include individualisedbenchmark information oninspection, handover, disputeresolution and more recently,customer satisfaction.This company specific informationis highly valued by builders andaims to help the industry meetits objectives in building goodquality homes.In the coming year, NHBC willcontinue to work in associationwith the HBF and other industryand professional bodies on a rangeof initiatives aimed at improvinglevels of customer satisfaction inline with the recommendations setout in the Barker Review.18 19

SkillsNHBC is uniquely placed toprovide training that meets thespecific needs of the housebuildingindustry and the widerconstruction industry. Ourportfolio of training programmeshas been increasing year-on-year,providing support for the industrydrive towards a fully qualifiedworkforce and helping to maketraining more accessible both tocompanies and individuals.NHBC now offers over 60 trainingcourses and 6 qualificationprogrammes on a range of technical,managerial, health and safety andpersonal skills, including on-sitetraining, 1-day workshops andin-house courses.NHBC’s qualified trainers deliveredmore than 5,000 days of trainingto the construction industryduring the year.We have long recognised thatgood management is a key factorin raising standards. As the largestprovider of constructionmanagement NVQs (NationalVocational Qualification) in the UK,“Investment in skills needs toincrease to produce higherlevels of output in the future”The Barker ReviewNHBCcontinues toraise the profileof training andskills withinthe industry20NHBC helps house buildersworking towards a fully carded andfully qualified workforce. We alsocontinue to work closely withpartners such as the HBF andCITB-ConstructionSkills to raisethe profile of training withinthe industry.NHBC provides around 20% of allconstruction managementqualifications in the UK and morethan 200 people this yearachieved NVQs through NHBC,including candidates from generalconstruction. All NHBCprogrammes are led by qualifiedassessors with extensiveexperience in construction orconstruction management.During the year NHBC designedan innovative approach aimed tohalve the time required, withoutreducing quality, to achieve ourNVQ Level 3 in constructionsite supervision.It is now possible for candidates toachieve the NVQ in less than sixmonths without compromisingstandards. This represents huge costand time benefits to house buildersand contractors.We have also this year furtherextended our training programmewith a new NVQ level 4programme for Site Inspection.Trade TalksNHBC’s ‘Trade Talks’ broughttraining to more than 4,000 siteoperatives across the UK duringthe year. This successful on-sitetraining scheme helps to raisestandards by identifying commonworkmanship errors that oftenlead to defects and helps housebuilders and their contractors toget it right first time.The Trade Talks series includes: Brickwork and blockwork Carpentry and joinery Drainage Foundations, substructuresand ground floors21

Celebrating 20 years of Building ControlThis year NHBC celebrates its 20thanniversary as an ApprovedInspector of Building Control inEngland and Wales. Now thelargest in the market, we haveprovided building control on morethan 1.5 million homes and lastyear we registered more than90,000 homes for Building Control.Results from this year’s researchshow customers value the nationalconsistency and responsiveness ofour service, our commitment tothe house-building industry andthe support, advice and guidanceof our technical experts.Homeowners also benefit fromthis expertise, enjoying enhancedprotection under the Buildmarkwarranty on homes where NHBCcarries out building control.Responding to changeTo respond to changes indevelopment, NHBC needs theright skill set. As a nationalorganisation we can plan thisproperly. During the year, weestablished a programme to ensurethat we maintain and develop theskills we need for more complexdevelopment, whilst recognisingthat traditional development is stillextremely important.During the year we introduced anew project managementapproach to help co-ordinate therising numbers of complex, highriseand innovative developments.For every scheme we nowappoint a dedicated projectmanager to oversee the successfuldelivery of warranty and buildingcontrol inspections.This new approach has receivedvery positive feedback from theindustry and has provedsuccessful in further improvingour service and allowing us tomeet customer needs. It offers ourcustomers a main single point ofcontact, improved co-ordination ofeach of the services NHBCprovides (including engineering,building control and warrantyinspections). Furthermore itensures that we become involvedat the earliest stage of the project,thereby reducing unnecessaryreworking at a later stage.Commercial Building ControlNHBC’s commercial buildingcontrol service, launched twoyears ago, has enjoyedconsiderable success and has seencontrolled but robust growth thisyear. Our entry into thecommercial sector has alsoallowed us to broaden theknowledge, skills and experienceof our inspection and surveyingstaff and has improved our focusand ability to deal more effectivelywith the ever more complexresidential sector.NHBCcustomers valueour nationalconsistency andresponsiveservice22 23

Pride in theJob is the mostrespected andlong-standingawards schemein the industry25 years of Pride in the JobAs Pride in the Job celebrates itssilver jubilee year, its reputation asthe most prestigious and covetedaward in the house-buildingindustry goes from strengthto strength.Over 18,000 site managers areeligible to win a Pride in the Jobaward but only those who candemonstrate the highest levelsof professionalism in every aspectof their work will make it throughthe rigorous selection process.The judges, from NHBC inspectorsand regional directors throughto the independent nationalpanel, assess every aspect of therole played by site managers.They look at almost 40different elements from overallmanagement skills to themotivation of their teamsand subcontractors to producethe highest quality new homes.Although there have been somechanges throughout thecompetition’s 25 year history theprinciples remain the same – toreward and recognise the verybest site managers across the UK.This year history was made, asGillian Jenkins of Laing O’RourkeScotland Ltd became the firstwoman to win a Pride in the JobSupreme Award.In addition, George Lattimer ofJJ Lattimer took a recordbreaking sixth Supreme Award,while Bill Hughes of Miller HomesNorth West Ltd won the Supremetitle in the large builder categoryfor the second year running.Over the last 25 years Pride in theJob has stood alone as the mostintense and well respected awardsscheme in the house-buildingindustry establishing its winnersas the best in their field.This year GillianJenkins becamethe first womanto win a Pridein the JobSupreme Award24 25

Buildmark –Safeguarding homeownersNHBC’s 10-year Buildmark coverprovides the most comprehensiveprotection for new homes in theUK. More than 1.7 million homesare currently covered by the policyand last year we registered around183,000 new homes.The Buildmark warranty andinsurance cover is divided intothree distinct phases:1. Before a home is completedIf a builder becomes insolventbefore a home is finished,NHBC will protect the buyeragainst specified financiallosses caused by incomplete orfaulty construction.2. Builders’ liability period - thefirst two years after the homehas been builtDuring this time, the builderis responsible for repairingany defects, caused by afailure to build to NHBCTechnical Standards.In the vast majority of cases, thebuilder will rectify those defectswithout NHBC’s intervention.However our free ResolutionService is available to resolvedisputes if a homeowner andbuilder do not agree what repairwork is needed.3. NHBC insurance period - yearsthree to tenFor the last eight years, Buildmarkcovers damage caused bydefects in specified parts of thehome. Cover added in recentyears includes double-glazing,staircases and wet-appliedwall plaster.During the year we haveinvested in further improvementsto our claims customer serviceand are introducing an interactiveon-line claim handling service.Additional cover with NHBCBuilding ControlFor homes where NHBC undertakesbuilding control, we provide furtherspecified cover, including protectionagainst the cost of cleaning upcontaminated land.NHBC’s range ofspecialist warrantiesIn addition to the main Buildmarkpolicy, NHBC also offers otherwarranties aimed at particularsectors of the market.Buildmark Choice forRegistered Social LandlordsThis 10-year warranty andinsurance cover was revised duringthe year in response to customerresearch feedback and consultationwith social housing providers.10-year cover forconversions and renovationsDuring this past year we havelaunched new technicalStandards underpinning theconversions and renovationspolicy by making the requirementsfor builders more stringent toensure that homes are convertedto a high standard.Solo for Self BuildThis offers 10-year insuranceprotection for self-builders initiallyagainst defined defects and thenfor major structural damage forten years.Buildmark LinkBuildmark Link is NHBC’s newproduct for mixed use properties,designed to cater for the changingstyle of urban developments.More than1.7 millionhomeownersare currentlybenefiting fromBuildmark coverNHBC Buildmark is the mostcomprehensive warranty coverin the UK26 27

Last yearmore than193,500 newhomes wereregistered forBuildmarkNHBC’s benchmark statisticsfor 2004/2005BuildmarkMore than 193,500 new homeswere registered for Buildmark, themost comprehensive new homewarranty and insurance cover inthe UK. This accounts for some85% of the total market.Buildmark currently covers 1.7million new homes in the UK.Inspection330 NHBC inspectors carriedout almost one million inspectionsin 2004/2005. In the 20thanniversary year as anApproved Inspector, NHBCcarried out Building Control onmore than 90,000 homes.Claims serviceThe Register of builders More than 19,500 builders arecurrently on NHBC’s Registerwith 3,069 applying to joinduring the past year. 68 builders were deletedfrom the Register fordisciplinary reasons and 110for insolvency reasons.NHBC paid claims totalling £35.1million last year, compared to £30million in 2003/2004: Claims in the first two years ofcover - £9.7 million Claims in years three to ten -£24.7 million Claims resulting from builderinsolvency - £0.7 million330 NHBCinspectorscarried outalmost 1 millioninspectionsin 2004/05Claims frequencyClaims costs% %More than19,500 buildersare currentlyon NHBC’sRegisterThe Resolution Service72.9% of the 7,382 casesinvestigated under NHBC’sResolution Service were found infavour of the homeowner.Independent arbitrationLast year the Financial ServicesOmbudsman (FOS) looked at 38cases in its role as an independentarbitrator. 30 of those cases werefound in favour of NHBC, threepartially in favour and threeagainst. Settlement was reached inthe remaining two cases.Health and safetyHealth and safety remains high onthe agenda with some 22,000health and safety inspectionscarried out by NHBC in the year.TrainingNHBC continues to make strides intraining, providing 5,000 mandaysof training last year andhosting on-site Trade Talks for4,000 delegates. More than 200people were awarded NVQs atlevels two through to five.EcoHomesThe growing awareness ofenvironmental issues in themarketplace was reflected in the7,000 Energy Rating Inspectionscarried out in the year. This is oneof the youngest sectors of NHBC’sbusiness and has grown steadilysince its inception in September2003. NHBC now has a 20% marketshare in EcoHomes assessments.2829

Profit and loss accountConsolidated profit and loss account for the year ended 31 March 2005The summary profit and loss account and balance sheet shown here do not constitute full financial statements, nor do theyinclude all the disclosures required by the Companies Act 1985 which have been made in the full financial statements. Thesestatements, including an unqualified auditors’ report by PricewaterhouseCoopers LLP, are filed with the Registrar ofCompanies and are available from NHBC’s Company Secretary.5 Year financial summaryTotal income £ (million)(excluding capital gains and losses on investments)Claims payments£ (million)Balance sheetConsolidated balance sheet as at 31 March 2005Surplus after taxation£ (million)Insurance reserves £ (million)(Net/Gross of reinsurance recoverable)NetGross3031

NHBC Council As at June 200532Mr A AndersonHomes for ScotlandMr M AndrewConsumer Policy Committeeof BSIMr S BaseleyBoard of DirectorsMr B Bean CBEHonorary Vice-PresidentMs J BennettCouncil of Mortgage LendersMr R BillinghamFederation of Master BuildersMr AR BowesCouncil of Mortgage LendersMr SGJ BoydCouncil of Mortgage LendersMr AT Brett-Jones CBERoyal Institution ofChartered SurveyorsMr RJ BrownHome Builders FederationMr P CarnanLaw Society of ScotlandSir John CarterNHBC ChairmanMr AF CavannaHome Builders FederationMr C ClowesHousing CorporationMr D CochraneCML ScotlandMr IWL CookCouncil of Mortgage LendersMr D CorrCouncil of Mortgage Lenders – NIMr D CrothersDepartment of Social DevelopmentMr T DoranConstruction EmployersFederation - NIMr I FarookhiNHBC Chief ExecutiveMr G FogdenHome Builders FederationMr P FosterBoard of Directors appointmentThe Rt Hon Lord FowlerHonorary Vice-PresidentMr MJ FreshneyHome Builders FederationMr C FudgeConstruction Products AssociationMr WC GairHome Builders FederationLord GlentoranBoard of Directors ChairmanNI CommitteeMrs J HallSociety of Public HealthMr CJ HarborneConsumers AssociationMr MR HarrisBoard of Directors appointmentMr J HarrisonHome Builders FederationSir Graham Hart KCBBoard of Directors appointmentMr N C HendersonCo-opted Member Scottish CommitteeMr AJ HillierHome Builders FederationMr JE HoldsworthInstitution of Civil EngineersMr PD HollidayHome Builders FederationMr DJ HolmanCo-opted MemberMr BAP HuntRoyal Institute of British ArchitectsMr RJ IlottRoyal Institution of CharteredSurveyorsMr I InnesHomes for ScotlandCllr P KentLocal Government AssociationMr N KiddHomes for ScotlandMr M KingLaw SocietyMr D KnightHomes for ScotlandMr RNR Lay CBEBoard of Directors appointmentMr R MacEachraneBoard of Directors appointmentMrs E Martin OBENational Council of Womenof Great BritainMr G MartinRIAS and RIBA Scotland- Joint NominationMr J MastersCo-opted Member NI CommitteeMr R MathisonCML ScotlandMs T McAuleyScottish Consumer CouncilMr G McCallumBoard of DirectorsMr T McClellandRICS - NIMr S McDowellCo-opted Member NI CommitteeMr J McGinnConstruction EmployersFederation – NIDame Yvonne Moores DBE RNBoard of Directors appointmentMr I MoreRoyal Institution of CharteredSurveyors - ScotlandMr CD NobleFederation of Master BuildersMr H Noble OBERoyal Town Planning InstituteMr M NobleHome Builders FederationMs C OatwayScottish HomesSir Michael PickardHonorary Vice-PresidentMr GC PyeHome Builders FederationMr HWG RackhamFederation of Master BuildersMr K RossHomes for ScotlandMr A RowanConstruction EmployersFederation - NIMr TR RoydonHome Builders FederationMr C RudolfRoyal Institute of British ArchitectsMr RH ScottAssociation of ConsultingEngineers - ScotlandMr RL SimpsonCIOB ScotlandMr WB SloanRoyal Society of Ulster ArchitectsMr AH SmithHomes for ScotlandDr DBB Smith OBEBoard of Directors Chairman ofthe Scottish CommitteeMr RJ TamayoBoard of Directors appointmentMr PC TrottCouncil of Mortgage LendersMr G WaddellCouncil of Mortgage LendersMr SC WalkerChartered Institute of BuildingLord Walker of Worcester MBEHonorary Vice-PresidentMr R WerthBoard of DirectorsMr J WhittleRoyal Institute of British ArchitectsObserversMr S HumphreysScottish Committee - ObserverMs A HemmingODPM Observer