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The Conygar Investment
Company PLC
Report And Accounts
30 September 2016
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The Conygar Investment Company PLC
YEAR ENDED 30 SEPTEMBER 2016
SUMMARY
● Net asset value per share 196.9p at 30 September 2016 decreased by 3.2% from 203.3p at
30 September 2015 due to the write off of our investment at Pembroke Dock. EPRA NAV per share
decreased by 3.1% to 196.9p from 203.2p.
● Acquired a 9.96 acre site from Sainsbury’s at Cross Hands, west of Swansea, for
£2.25 million, and the 203 acre freehold of the former gas storage facility near Rhosgoch,
Anglesey, for £3 million.
● The development pipeline is advancing. At Haverfordwest, infrastructure works have
completed, and at Cross Hands detailed planning consent has been granted and
construction started. We continue to progress the approvals for the other projects.
● In April 2016, completed the refinancing of three portfolios with a new £48.1 million facility
with Lloyds Bank, releasing £21 million after repayment of the two existing loans.
● In December 2016, completed the refinancing of the Edinmore portfolio and Mochdre
Commerce Park with a new £21.4 million facility with HSBC Bank, releasing £13 million after
repayment of the existing loan.
● Total cash available for acquisitions and development funding of £64 million. Net debt of
£27.2 million as at 30 September 2016, representing gearing of 17.9% against net asset value and
20.8% on loan to value basis. Post the HSBC refinancing, net debt of £27.8 million, representing
gearing of 18.3% against net asset value and 21.3% on loan to value basis.
● Investment property portfolio valuation of £130.7 million at 30 September 2016, an increase
of £1.0 million on a like for like basis. Our average unexpired lease length has risen from
4.8 years at 30 September 2015 to 5.8 years at the year end and this reflects a number of new
leases and renewals which have been agreed over the past year.
● Disposed of four investment properties in the year for a total consideration of £7.0 million, a
deficit of £0.3 million to the September 2015 valuation after costs.
● Bought back 5.3 million shares (6.4% of ordinary share capital) at an average price of
167 pence per share.
Summary Group Net Assets As At 30 September 2016
Per Share
£’m p
Investment Properties 130.7 169.2
Investment Properties Under Construction 9.5 12.3
Development Projects 40.7 52.8
Cash 63.7 82.5
Other Net Liabilities (2.7) (3.5)
––––––––––– –––––––––––
241.9 313.3
Bank Loans (55.5) (71.9)
ZDP Liability (34.4) (44.5)
––––––––––– –––––––––––
152.0 196.9
––––––––––– –––––––––––
––––––––––– –––––––––––
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The Conygar Investment Company PLC
Registered in England No. 04907617
CONTENTS
Page
Directors and Advisers 3
Chairman’s & Chief Executive’s Statement 4
Strategic Report 7
Corporate Governance Report 19
Directors’ Remuneration Report 21
Directors’ Report 25
Independent Auditors’ Report 28
Consolidated Statement of Comprehensive Income 30
Consolidated Statement of Changes in Equity 31
Company Statement of Changes in Equity 32
Consolidated Balance Sheet 33
Company Balance Sheet 34
Consolidated Cash Flow Statement 35
Company Cash Flow Statement 36
Notes to the Accounts 37
Investment Property Portfolio 63
Glossary of Terms 65
Notice of Annual General Meeting 66
Form of Proxy 71
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The Conygar Investment Company PLC
DIRECTORS AND ADVISERS
The Board of Directors
N J Hamway (Non-Executive Chairman)
R T E Ware (Chief Executive)
R H McCaskill (Finance Director)
P M C Rabl (Director)
M D Wigley (Non-Executive Director)
Company Secretary
R H McCaskill
Registered Office
Fourth Floor
110 Wigmore Street
London W1U 3RW
Auditors Solicitors
Rees Pollock Gowling WLG (UK) LLP
35 New Bridge Street 4 More London Riverside
London EC4V 6BW London SE1 2AU
Nominated Adviser & Stockbroker Registrars
Liberum Capital Limited Share Registrars Limited
Ropemaker Place, Level 12 The Courtyard
25 Ropemaker Street 17 West Street
London EC2Y 9LY Farnham
Surrey GU9 7DR
Registered Number
04907617
Website
www.conygar.com
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The Conygar Investment Company PLC
CHAIRMAN’S & CHIEF EXECUTIVE’S STATEMENT
Results
We present the Group’s results for the year ended 30 September 2016.
Net asset value per share decreased by 3.2% to 196.9p from 203.3p last year and to 196.9p (2015: 203.2p)
on an EPRA basis. The reason for this fall was the write off of our investment at Pembroke Dock which
amounts to £4.8 million or 6.2p per share. This was a difficult decision but we felt that it was necessary
given the problems we have faced at this site over the past year and these issues are discussed in detail
within the developments section of the Strategic Report. All other parts of the business have performed as
expected and the loss for the year before taxation was £4.7 million (2015: £7.8 million profit).
Net asset value as at 30 September 2016 was £152.0 million compared with £167.8 million at
30 September 2015. During the year, the Group spent £8.9 million on share buy backs and paid a dividend
of £1.4 million and excluding these, the net asset value decreased by 3.3%, which is attributable to the
loss for the year.
The Group’s investment properties as at 30 September 2016 were independently valued at £130.7 million
(2015: £133.2 million), an increase in the valuation of £1m for the year on a like for like basis. This modest
uplift does not truly reflect the performance of the portfolio in the year as it includes a £3 million fall in
the value of our building in Aberdeen. As has been well publicised, the Aberdeen market has been hit hard
by the crisis in the oil industry and this is reflected in the valuation. If we exclude Aberdeen, the investment
property portfolio rose in value by 3.5% in the year on a like for like basis and this is a result of very positive
letting activity across the portfolio during the period.
The Group had cash balances of £63.7 million (2015: £57.4 million) at the year end and bank debt of
£56.4 million (2015: £38.2 million). Including the zero dividend preference share liability of £34.4 million
(2015: £32.5 million), our net gearing is 17.9% or 20.8% on a loan to value basis.
Although the fall in net asset value per share is disappointing, the Group is well placed to deliver the other
development projects and the balance sheet remains robust.
Progress
Development Projects
Two development sites were acquired during the year. The first is a 9.96 acre freehold serviced development
site acquired from Sainsbury’s at Cross Hands, west of Swansea, for £2.25 million plus an overage
provision. In April 2016, a planning application was submitted to Carmarthenshire Council for a 106,000
square foot retail development, along with a 562 space car park, to include a family pub and restaurant,
food stores, a drive-through restaurant and other retail stores. The detailed planning consent was granted
in September 2016 and construction work has now begun.
The second site was acquired in October 2015, and is the freehold of the former gas storage facility site
near Rhosgoch, Anglesey, at a cost of £3 million. This 203 acre brownfield site is situated 6.5 miles from
the existing and proposed Wylfa Nuclear Power Station. We have agreed an option agreement with Horizon
Nuclear Power over the entire site and we hope that this site will be used to house temporary workers who
will be employed to construct the new power station.
In May 2016, the group submitted a planning application on its development site at Nottingham Road,
Ashby-de-la-Zouch, for a Marks & Spencer “Food Hall”, measuring approximately 11,000 square feet
with associated parking services and landscaping. We expect to hear the outcome of the application shortly
and we will commence construction almost immediately, should planning permission be granted. There
are another two acres available for development at the site and discussions are ongoing with potential
occupiers of the remaining land.
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The Conygar Investment Company PLC
CHAIRMAN’S & CHIEF EXECUTIVE’S STATEMENT (continued)
Investment Property Portfolio
There have been a number of significant lettings and lease renewals which have been agreed during the
year.
At Mochdre Commerce Park, an industrial estate strategically located in Colwyn Bay, North Wales,
adjoining the A55 expressway, midway between Holyhead and Chester, a lease was signed by Conwy
County Council for 60,000 square feet of industrial space and 3.2 acres of open storage land on a 35 year
lease, with a first break at year 15 and an initial rent of £240,000 per annum. This letting along with
another 20 year lease to a biotech company for approximately 35,000 square feet has resulted in a
significant increase in the value of this asset as at 30 September 2016.
A crucial reletting was also achieved after the period end at Kelvin Close, Warrington where Hewlett
Packard has agreed to extend their lease by 5 years at an improved rent. This, along with the lettings at
Mochdre, are good examples of how the letting market has remained strong in the period leading up to
and following the EU referendum and this is the picture we have seen across the majority of the UK. In
Scotland, a market which is struggling, we have let Watt Place, Hamilton, an industrial building of 33,000
square feet to Napier University at a very competitive rent. During the year we also let a unit at Kingscourt
Leisure Centre in Dundee to Domino’s Pizza, which we believe is their largest unit in the UK. The Dundee
market has been a particularly difficult one since the financial crash of 2008 and the unit in question had
been vacant since construction, which was some time before our ownership. This letting, which might
appear overdue, is another example of the team’s efforts and this is reflected in the increase in the portfolio
valuation as at 30 September 2016.
As mentioned above, our asset in Aberdeen has been written down heavily in the year. There is a
considerable amount of office space available in and around the city and with only one year’s income left
on the current lease, we will continue to work hard to replace the tenant who has already vacated the
building. Fortunately, our exposure to Aberdeen was greatly reduced during the year ended 30 September
2014 when we sold two buildings there for a consideration of £15.5 million, which was a significant surplus
to our book cost and £1.24 million over the previous valuation in September 2013.
The refurbishment at Brennan House, Farnborough and the Links, Warrington, have now completed and
the initial feedback from the marketing process is positive and we expect to announce lettings at both
locations in our next update.
The contracted annual rent roll of the portfolio was £9.7 million as at 30 September 2016, which is only
£0.1 million lower than at 30 September 2015, despite the disposals in the year. We continue to work hard
at letting vacant space, retaining tenants and pushing down irrecoverable property costs. Our average
unexpired lease length has risen from 4.8 years to 5.8 years at 30 September 2016 and this reflects a
number of new leases and renewals which have been agreed over the past year. We made four disposals in
the year for a gross consideration of £7.0 million, which was £0.3 million lower than the 2015 valuation
after costs.
Financing
The Group’s loan facilities secured on the investment property portfolio have been fully refinanced since
the start of 2016.
In April 2016, the Group completed a new five year £48.1 million loan with Lloyds Bank PLC, Jersey
Branch, which replaced the two facilities we held with the Royal Bank of Scotland PLC. The interest cost
was reduced from 3% and 3.5% per annum margin plus 3 month LIBOR to 1.9% margin plus Bank of
England Base Rate and this refinancing also released £21 million to pursue other projects after repayment
of the RBS loans.
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The Conygar Investment Company PLC
CHAIRMAN’S & CHIEF EXECUTIVE’S STATEMENT (continued)
On 2 December 2016, following the financial year end, the Group also completed a £21.4 million, 5 year
loan with HSBC Bank PLC. This loan replaced the previous loan facility held with Barclays Bank PLC
and the interest cost has been reduced from 3.5% per annum margin plus 3 month LIBOR to 2.15% per
annum margin plus 3 month LIBOR and has also released an additional £13 million after repayment of
the Barclays loan.
The weighted average cost of debt is 2.26% per annum at the time of writing and we are set to benefit
from a continuation of a low interest rate environment.
Dividend
The Board recommends that no final dividend is declared in respect of the year ended 30 September 2016
due to the loss which arose in the year. Your Board will continue to review the dividend payments annually.
More information on the Group’s dividend policy can be found within the Strategic Report on page 14.
Share Buy Back
During the year, the Group acquired 5,299,819 ordinary shares representing 6.4% of its ordinary share
capital, at an average a price of 167.4p per share. This cost £8.9m and, as a result of the buy backs, net
asset value per share has been enhanced by 2.5 pence per share. Following the year end, and the
cancellation of the share premium account on 31 August 2016, the Group has acquired a further 5,070,000
ordinary shares representing 6.1% of its ordinary share capital at an average price of 155.4p per share.
This cost £7.9 million and has enhanced net asset value per share by 2.9 pence per share. The Group will
seek to renew the buy back authority at the forthcoming AGM because we consider it to be a useful capital
management tool.
Outlook
Despite the current political and economic uncertainties, our investment property portfolio has performed
well and we expect this to continue in the short to medium term. At the same time, we are pushing the
development projects forward and we anticipate that construction work will begin at a number of the sites
this year in addition to the ongoing works at Cross Hands. We see the development pipeline as the main
driver of shareholder growth in the medium term and this will be a major focus for the Group in the coming
years.
The refinancings, which have completed during the calendar year, mean that we are well funded for the
medium term and the significant cash balances we hold will enable us to move quickly should worthwhile
opportunities arise.
N J Hamway
Chairman
15 December 2016
R T E Ware
Chief Executive
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The Conygar Investment Company PLC
STRATEGIC REPORT
The Group’s Strategic Report provides a review of the business for the financial year; discusses the Group’s
financial position at the year end and explains the principal risks and uncertainties facing the business and
how we manage those risks. We also outline the Group’s business model and strategy.
Strategy and Business Model
Conygar is an AIM quoted property investment and development group dealing primarily in UK property.
Our aim is to invest in property assets and companies where we can add significant value using our property
management, development and transaction structuring skills.
The business operates two major strands being the property investment side and the development project
side. The investment property portfolio generates surplus cash flow while at the same time we are creating
a pipeline of development projects that are well positioned to deliver good returns in the medium term.
We continue to focus upon positive cash flow and to use modest levels of gearing to enhance returns. Assets
are recycled to release capital as opportunities present themselves and we will continue to buy back shares
where appropriate. The Group is content to hold cash and adopt a patient strategy unless there is a
compelling reason to invest.
Position of the Company at the year end
Despite the write down of the investment at Pembroke Dock in the year, the Group is in a strong position
at the year end with significant underlying earnings, positive cash flow and investment property values that
have increased by 3.5% during the year, excluding our asset in Aberdeen. The development pipeline is
progressing and construction is about to start at several more locations this year. The balance sheet remains
strong with cash of £63.7 million and total debt of £90.9 million, giving net gearing of 17.9%. The Group
has adequate resources to maintain and develop its business and the balance sheet remains both liquid
and robust.
Events since the balance sheet date
There were no significant events since the balance sheet date apart from the refinancing with HSBC and
the share buy backs, both of which are referred to in the Chairman’s and Chief Executive’s Statement, and
the option agreements completed with Horizon Nuclear Power at Rhosgoch and Parc Cybi.
Summary of Group Net Assets
The Group net assets as at 30 September 2016 may be summarised as follows:
Per Share
£’m p
Investment Properties 130.7 169.2
Investment Properties Under Construction 9.5 12.3
Development Projects 40.7 52.8
Cash 63.7 82.5
Other Net Liabilities (2.7) (3.5)
––––––––––– –––––––––––
241.9 313.3
Bank Loans (55.5) (71.9)
ZDP Liability (34.4) (44.5)
––––––––––– –––––––––––
152.0 196.9
––––––––––– –––––––––––
––––––––––– –––––––––––
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The Conygar Investment Company PLC
STRATEGIC REPORT (continued)
Investment Properties
Summary of Portfolio
2016 2015
Valuation at 30 September
Number of properties
Contracted rent (pa)
Current ERV (pa)
Net initial yield
Equivalent yield
Reversionary yield
ERV of vacant units (pa)
Vacancy rate
Average unexpired lease lengths
Asset Management
£130.7 million
32
£9.7 million
£11.6 million
6.2%
8.02%
8.39%
£2.0 million
17.1%
5.8 years
£133.2 million
36
£9.8 million
£11.9 million
7.16%
8.02%
8.35%
£1.7 million
14.1%
4.8 years
At 30 September 2016, the contracted rent for the investment property portfolio was £9.7 million with an
ERV of £11.6 million. The overall vacancy rate in the portfolio is currently 17.1% which is a rise from
14.1% last year. This increase is due to a number of refurbishments that have taken place during the year.
If we exclude our assets at Farnborough and the Links, Warrington, both of which have recently been
refurbished, and our asset at Mochdre, the vacancy rate falls to 6.9%. The average unexpired lease length
is 5.8 years compared to 4.8 years at 30 September 2015. This is positive and a reflection of the new leases
being signed across the portfolio.
In spite of the market slowdown and continuing uncertainty caused to the UK property market by the EU
referendum, there has been good progress on a variety of asset management initiatives across the portfolio.
Outside the central London office market and parts of Scotland, occupier confidence seems to have held
firm and rental values are looking buoyant across the regional market.
During the summer of 2016, we completed the refurbishment of Brennan House in Farnborough where
approximately £2.5 million was spent to create a very high quality product. We also refurbished two
properties at the Links, Warrington for a cost of £1 million. These properties together make up a large
proportion of the vacant space and so we hope to substantially reduce the vacancy rate over the coming
year. We currently have serious interest at Farnborough reflecting a higher rental level than our original
appraisals and hope to have some positive news soon.
At Mochdre Commercial Park, Colwyn Bay, we have signed a lease with the council for a 35 year term on
60,000 square feet in addition to 3.2 acres of open storage land. We have also signed a 20 year lease on
another circa 35,000 square feet to a biotech company. The new rental income for these two leases is
£395,000 per annum. We are in discussions with a number of parties about the remaining space which
represents the other large portion of the vacancy rate.
We continue to maintain good contact with our tenants and work hard to minimise irrecoverable costs and
voids. At Ashby de la Zouch, we have agreed a new ten year lease with GE at an improved rent and have
agreed terms with Marks and Spencer for a “Food Hall” of circa 11,000 square feet. The planning
application for this development has been submitted and we hope to be on site early next year.
We have agreed a number of other lease extensions this year, including one at Warrington with Hewlett
Packard, where we have agreed a new five-year lease at a higher rent. There have also been renewals at a
number of other locations such as Dundee, Stratford-upon-Avon and Bletchley. A large portion of our
vacancy rate is explained by newly refurbished space and we will be working hard both to reduce that
figure and boost the contracted rent over the coming year.
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The Conygar Investment Company PLC
STRATEGIC REPORT (continued)
Disposals
The Group disposed of four properties during the year, at Horsham, Hinckley, Runcorn and Brighouse
for a total consideration of £7.0 million. We will continue to dispose of assets where we feel we can add no
further value or if there is a compelling reason to do so.
Valuation
The investment property portfolio has been independently valued by Jones Lang LaSalle at £130.7 million
as at 30 September 2016. There was a substantial fall in value at Aberdeen, which has suffered badly from
a decrease in oil prices. We had previously disposed of the other two units at a surplus of £1.24 million to
the 2013 valuation and will continue to mitigate the risks to the asset as best as we can.
Despite the decline at Aberdeen the investment property portfolio increased in value reflecting asset
management initiatives which have both protected and increased rental income. Assets such as ours
continue to require active management to protect value and it is pleasing to see this work rewarded through
valuation increases despite the wider market uncertainty.
Capital Expenditure
We incurred £3.7 million of capital expenditure during the year, which was fully financed from our existing
cash resources. There will always be a level of refurbishment work required throughout a portfolio of this
nature, though as at 30 September 2016, the Group had no contractual related capital expenditure
commitments in excess of £1,000,000.
Development Projects and Investment Properties Under Construction
Progress has been made on most of our development projects since we last reported.
Haverfordwest
The substantial infrastructure works to service the 729 residential units and the 9.6 acre retail site were
completed on budget at a cost of £3.7m. Two planning applications were submitted simultaneously in
June 2016 for 100,000 square feet of retail units, a hotel, a 5 screen cinema and 602 car parking spaces.
The applications are currently with Pembrokeshire County Council and we look towards an early
determination of the plans in the New Year. We are also in advanced negotiations with a housebuilder for
the first phase of the residential development, which we are looking to bring forward next year.
Cross Hands
In April 2016, we submitted a detailed planning application for a 106,000 square foot retail development
in Cross Hands, South West Wales. Planning permission was achieved in September and we have appointed
a contractor to deliver the first phase of the scheme, who has commenced works. Running in parallel, we
are progressing legal agreements with a number of national retailers and will have completed the first phase
of the development by October 2017.
Fishguard Harbour
The detailed planning (First Reserved Matters) and marine licence applications, necessary to facilitate the
development platform, marina basin and port expansion area, were submitted in January this year. In
November 2016, the Phasing Plan for the marina and residential development was approved by
Pembrokeshire County Council’s planning committee and we envisage that the First Reserved Matters
application will be considered early in the New Year. In terms of the marine licence, all the necessary
information has been provided to Natural Resources Wales and we are awaiting release of the formal
consent.
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The Conygar Investment Company PLC
STRATEGIC REPORT (continued)
Working in association with Stena Line, we have prepared a draft Harbour Revision Order and this should
be submitted to the Marine Management Organisation early in the New Year. Once this order has been
processed and formalised, we will have successfully negotiated all of the statutory consenting processes
necessary to commence construction of the project. Once the enabling infrastructure works are underway,
we will be turning our attention to the detailed design and subsequent Reserved Matters applications for
all the residential development and buildings relating to the operation of the commercial marina.
Pembroke Dock
We have sadly decided to withdraw from this project and write off our total investment of £4.8 million.
Having commissioned a detailed feasibility study, the results unfortunately concluded that the cost of
constructing the marina would be considerably greater than our first investigation showed (mainly due to
the seabed analysis and the resulting lock structure and outer wall that is now needed). Our initial estimates
were for the marina to cost £8 million, and unfortunately that figure has now risen to over £17 million,
which means that it is not viable.
The land based element at Pembroke Dock had been progressed in tandem and that is viable. We have
attracted a number of substantial retailers to the site and the scheme would improve the environment and
create considerable employment. However, our contract with the client group, which consists of
Pembrokeshire County Council, Milford Haven Port Authority, the Crown Estate and the Welsh Assembly
Government, is dependent on the marina being built by 2022. We have met the Council in an attempt to
separate the land development from the marina and disappointingly, they have refused to agree to this.
Hence our decision to write off our total investment.
Holyhead Waterfront
Earlier this year, Ynys Mon County Council (YMCC) decided to hold a public inquiry to consider the
Town & Village Green Application received on behalf of the Waterfront Action Group. This was held in
October 2016 and the Inspector was tasked with producing his report by the end of November 2016.
YMCC will take the Inspector’s report to its planning committee with a view to accepting or rejecting the
recommendations contained therein. We are confident that the Inspector will recommend that the
Registration Authority (YMCC) reject the application, which presently stands as an impediment to the
implementation of the Waterfront project. Discussions are ongoing with various parties some of whom are
involved in the Wylfa Newydd project, in respect of providing both residential accommodation and the use
of our marine facilities at Soldiers Point.
Parc Cybi Business Park, Holyhead
We have agreed, subject to planning, with a national operator, to construct an 80 bedroom hotel on our 3
acre gateway plot. We hope to progress this new project over the coming year. The truckstop, a joint venture
with Fred Done, the founder and owner of Betfred, has improved trading month on month and is now
averaging over 140 trucks, 3 evenings per week.
We have signed an option agreement with Horizon Nuclear Power (HNP) whereby they can instruct us to
construct a logistics centre on a 6.9 acre site for their use in facilitating the new Wylfa B Nuclear power
station. The option runs until December 2022.
Rhosgoch
We have also signed an option agreement with HNP over our entire 203 acre site running until December
2022. Rhosgoch is one of several sites that HNP are considering as a location for housing the temporary
construction workers.
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The Conygar Investment Company PLC
STRATEGIC REPORT (continued)
Llandudno Junction
In May 2016, Conwy County Borough Council approved our outline planning application for
90,000 square feet of retail floor space. Working in partnership with the Council, we are now marketing
the property with a view to optimising this excellent retail opportunity. Again, we are confident that this
project will come forward over the coming year.
King’s Lynn, Norfolk
This is a six acre residential development site with planning permission for 94 dwellings near to King’s
Lynn, Norfolk. We have exchanged contracts to sell the site, subject to planning, at book value.
Summary of Development Projects
The expenditure in the year on our development land bank amounted to £1.37 million which was offset
by a £2.35 million reimbursement of retention funds from Pembrokeshire County Council following
completion of the infrastructure works at Haverfordwest. Our total investment to date, after writing off
the costs incurred on Pembroke Dock as explained in the Chairman’s and Chief Executive’s statement, is
now £40.82 million (analysed below) or 52.8p per share. We will continue to progress these projects in a
risk-averse manner and to avoid any speculative development. In spite of Pembroke Dock, we have had
good successes in securing planning consents and several of the projects are beginning to advance.
It is our intention to deliver schemes comprising circa 1,300 homes (of which 579 are waterside), 846
marina berths and in excess of 400,000 square feet of commercial and retail development.
As previously stated, it is our intention, once the individual projects are significantly advanced, to introduce
third party valuations as soon as it is practical to do so. We remain confident that there is significant upside
in these projects which will become evident over the medium term.
2016 2015
£’m £’m
Haverfordwest 22.18 23.91
Holyhead Waterfront 10.31 10.19
Parc Cybi, Holyhead 4.79 4.59
Fishguard Waterfront 1.52 1.36
Fishguard Lorry Stop 0.54 0.54
King’s Lynn 0.87 0.85
Llandudno Junction 0.61 0.43
Other – 0.07
Pembroke Dock Waterfront – 4.68
––––––––––– –––––––––––
Total investment to date 40.82 46.62
––––––––––– –––––––––––
––––––––––– –––––––––––
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The Conygar Investment Company PLC
STRATEGIC REPORT (continued)
Financial review
Net Asset Value
The net asset value at the year end was £152.0 million (2015: £167.8 million). The primary movements
were £4.9 million net rental income plus a £1.0 million increase in the value of the investment properties
offset by £6.6 million of finance and administrative costs, £4.8 million to write off Pembroke Dock
development costs, and £8.9 million spent on purchasing our own shares. Excluding the amounts incurred
purchasing Conygar shares and paying dividends, net asset value decreased by 3.3% in the year.
On an EPRA basis, the net asset value is:
2016 2015 2014 2013 2012
£’m £’m £’m £’m £’m
Net asset value 152.0 167.8 169.4 155.1 154.0
Share options 4.1 4.1 8.1 – –
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Diluted net asset value 156.1 171.9 177.5 155.1 154.0
Fair value of hedging instruments – – (0.4) 0.2 0.9
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
EPRA net asset value 156.1 171.9 177.1 155.3 154.9
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
EPRA NAV per share 196.9p 203.2p 195.9p 174.9p 166.9p
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Basic NAV per share 196.9p 203.3p 197.5p 174.6p 165.9p
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
Diluted NAV per share 196.9p 203.3p 196.3p 174.6p 165.9p
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
The EPRA net asset value is calculated on a fully diluted basis and excludes the impact of hedging
instruments as these are held for long term benefit and not expected to crystallise at the balance sheet
date.
The NNNAV or “triple net asset value” is the net asset value taking into account asset revaluations, the
mark to market costs of debt and hedging instruments and any associated tax effect. Our investment
properties are carried on our balance sheet at independent valuation. Our development and trading assets
are carried at the lower of cost and net realisable value. We have not sought to value these assets as, in our
opinion, they are at too early a stage in their development to provide a meaningful figure, so cost is equated
to fair value for these purposes. On this basis, there is no material difference between our stated net asset
value and NNNAV.
Revaluation
The Group’s investment properties were independently valued by Jones Lang LaSalle as at 30 September
2016. In their opinion, the open market value of the investment property portfolio was £130.7 million.
The total portfolio increased in value by £1.0 million over the year on a like for like basis.
Cash flow
The Group generated £2.5 million cash from operating activities (2015: used £12.9 million).
The primary cash inflows in the year were £6.8 million from the sale of investment properties and
£47.1 million (net of costs) from the new Lloyds debt. These were partly offset by cash outflows of £9.8
million to acquire and refurbish investment properties, £29.8 million to repay RBS debt and £8.9 million
to buy back shares, resulting in a net cash inflow of £6.3 million during the year.
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STRATEGIC REPORT (continued)
Net Income From Property Activities
2016 2015
£’m £’m
Rental income 9.4 11.4
Direct property costs (2.9) (2.9)
––––––––––– –––––––––––
Rental surplus 6.5 8.5
––––––––––– –––––––––––
Sale of investment properties 7.0 31.3
Cost of investment properties sold (7.3) (28.9)
––––––––––– –––––––––––
(Loss)/gain on sale of investment properties (0.3) 2.4
––––––––––– –––––––––––
Total net income arising from property activities 6.2 10.9
––––––––––– –––––––––––
––––––––––– –––––––––––
Administrative Expenses
The administrative expenses for the year ended 30 September 2016 were £2.4 million compared with
£1.5 million the previous year. The primary reason for this increase is the reversal in the prior year of 20%
of the 2014 profit share which the remuneration committee decided would not be paid and therefore
administrative expenses were credited with £1.75 million.
Financing
At 30 September 2016, the Group had cash of £63.7 million. The bank debt at 30 September 2016 was
£56.4 million and the zero dividend preference shares liability is £34.4 million. The gearing is 17.9% and
loan to value is 20.8% including cash.
The interest rate risk on the facility continues to be managed by way of interest rate caps and the fair value
of these derivative financial instruments is provided for in full on the balance sheet. The weighted average
cost of all debt including margin is 2.4% and as at 30 September 2016, 66% (2015: 100%) of the Group’s
bank borrowings were hedged.
The finance costs for the year amounted to £4.1 million (2015: £4.4 million), primarily consisting of
£1.6 million bank loan interest (2015: £2.0 million) and interest payable on the zero dividend preference
shares of £1.8 million (2015: £1.7 million). Finance income amounted to £0.3 million (2015: £0.2 million)
reflecting the low returns on short term cash deposits. As a matter of policy, the Group retains instant
access to all cash deposits so it is readily available for use in the business.
As at 30 September 2016, TAPP Property Limited, TOPP Property Limited, TOPP Bletchley Limited,
Lamont Property Acquisition (Jersey) I Limited, Lamont Property Acquisition (Jersey) II Limited and
Lamont Property Acquisition (Jersey) IV Limited (“the borrowers”) jointly maintained a facility with
Lloyds Bank, Jersey of £48,100,000 (2015: £nil) under which £48,100,000 (2015: £nil) had been drawn
down. This facility is repayable on or before 27 April 2021 and is secured by fixed and floating charges
over the assets of the borrowers. The facility is subject to a maximum loan to value covenant of 65%, a
historical interest cover ratio covenant of 200% and a historical debt service cover ratio of 110%.
On 28 April 2016, TAPP Property and TOPP Property repaid the outstanding balances of their facilities
with the Royal Bank of Scotland PLC of £25,931,000 (2015: £29,816,000).
As at 30 September 2016, Conygar Dundee Limited, Conygar Hanover Street Limited, Conygar Stafford
Limited and Conygar St Helens Limited jointly maintained a facility with Barclays Bank PLC of up to
£8,335,000 (2015: £8,335,000) of which £8,335,000 (2015: £8,335,000) had been drawn down. This
facility was repayable on or before 21 November 2016 and was secured by fixed and floating charges over
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The Conygar Investment Company PLC
STRATEGIC REPORT (continued)
the assets of Conygar Dundee Limited, Conygar Hanover Street Limited, Conygar Stafford Limited and
Conygar St Helens Limited. The facility was subject to a maximum loan to value covenant of 52% (2015:
52%) and an interest cover ratio covenant of 225%. As set out in the Chairman’s and Chief Executive’s
statement, the loan was repaid in full on 26 October 2016.
Taxation
The tax charge for the year is £0.7 million on the pre-tax loss of £4.7 million. Tax is payable at the full UK
corporation tax rate of 20.0% on net rental income after deduction of finance costs and administrative
expenses. Deferred taxation has been recognised in the year in respect of the increase in value of the
investment properties held by subsidiaries registered in the United Kingdom and this amounts to
£1.9 million.
Capital Management
Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital.
While the Group does not have a formally approved gearing ratio, the objective above is actively managed
through the direct linkage of borrowings to specific property. The Group seeks to ensure that secured
borrowing stays within agreed covenants with external lenders.
Treasury Policies
The objective of the Group’s treasury policies is to manage the Group’s financial risk, secure cost effective
funding for the Group’s operations and to minimise the adverse effects of fluctuations in the financial
markets on the value of the Group’s financial assets and liabilities, on reported profitability and on the
cash flows of the Group.
The Group finances its activities with a combination of bank loans (£56.4 million), cash and short term
deposits (£63.7 million). Other financial assets and liabilities, such as trade receivables and trade payables,
arise directly from the Group’s operations. The Group may also enter into derivative transactions to manage
the interest rate risk arising from the Group’s operations and its sources of finance. Derivative instruments
may be used to change the economic characteristics of financial instruments in accordance with the Group’s
treasury policies. Interest rate caps amount to an economic hedge of between £36.1 million and £37.0
million (2015: £55.6 million) of the total loan drawdowns of £56.4 million (2015: £38.2 million) for cash
flows to 27 April 2021, but no hedge accounting is used.
The management of cash and similar instruments is monitored weekly with summary cash statements
produced on a fortnightly basis and discussed regularly in management and Board meetings. The overall
aim is to provide sufficient liquidity to meet the requirements of the business in terms of funding
developments and potential acquisitions. Surplus funds are invested with a broad range of institutions with
a range of maturities up to a maximum of 180 days. At any point in time, at least half of the Group’s cash
is held on instant access or short term deposit of less than 30 days.
Dividend Policy
The Board recommends that no dividend is paid in respect of the year ended 30 September 2016.
Our dividend policy is consistent with the overall strategy of the business: namely to invest in property
assets and companies where we can add significant value using our property management, development
and transaction structuring skills.
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STRATEGIC REPORT (continued)
Over the past seven years we have used the surplus cash flow from the investment property portfolio to
enhance these properties by refurbishment, re-letting and extending tenancies, fund the operation of the
business, create a medium term pipeline of development opportunities, pay a modest dividend and buy
back shares where appropriate.
Given that the Group has not made a profit for the year ended 30 September 2016, the Board recommends
that no dividend should be declared for this period. The Board will continue to review our dividend policy
each year. Our focus is, and will continue to be, primarily growth in net asset value per share.
Share Buy Backs
During the year, the Group acquired 5,299,819 ordinary shares at an average price of 167.4p which
represents 6.4% of its ordinary share capital. This cost £8.9 million and net asset value per share has been
enhanced by approximately 2.5 pence per share. The Group will seek to renew the buy back authority at
the forthcoming AGM and will continue to utilise it as and when it makes sense to do so.
Principal Risks and Uncertainties
Managing risk is an integral element of the Group’s management activities and a considerable amount of
time is spent assessing and managing risks to the business. Responsibility for risk management rests with
the Board, with external advisers used where necessary.
Strategic Risks
Strategic risks are risks arising from an inappropriate strategy or through flawed execution of a strategy.
By definition, strategies tend to be longer term than most other risks and, as has been amply demonstrated
in the last few years, the economic and wider environment can alter quickly and significantly. Strategic
risks identified include global or national events, regulatory and legal changes, market or sector changes
and key staff retention.
The Board devotes a considerable amount of time and resources to continually monitoring and discussing
the environment in which we operate and the potential impacts upon the Group. We are confident we have
sufficiently high calibre directors and managers to manage strategic risks.
We are content that the Group has the right approach toward strategy and our financial performance,
strong balance sheet and the expansion of the business during a difficult economic period are good evidence
of that.
Operational Risks
Operational risks are essentially those risks that might arise from inadequate internal systems, processes,
resources or incorrect decision making. Clearly, it is not possible to eliminate operational risk, however a
considerable amount of time and resource is applied towards ensuring we have the right calibre of staff
and external support to minimise such risks, as most operational risks arise from people-related issues. We
have also invested in improved IT systems to support the business and protect data. Our executive directors
are very closely involved in the day-to-day running of the business to ensure sound management judgement
is applied.
The Group has not suffered any material loss from operational risks during the year.
Market Risks
Market risks primarily arise from the possibility that the Group is exposed to fluctuations in the values of,
or income from, its investment property portfolio and development land bank. This is a key risk to the
principal activities of the Group and the exposures are continuously monitored through timely financial
and management reporting and analysis of available market intelligence.
Where necessary, management takes appropriate action to mitigate any adverse impact arising from
identified risks and market risks continue to be monitored closely.
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STRATEGIC REPORT (continued)
Estimation and Judgement Risks
To be able to prepare accounts according to generally accepted accounting principles, management must
make estimates and assumptions that affect the asset and liability items and revenue and expense amounts
recorded in the accounts. These estimates are based on historical experience and various other assumptions
that management and the board of directors believe are reasonable under the circumstances. The results
of these considerations form the basis for making judgements about the carrying value of assets and
liabilities that are not readily available from other sources.
The key sources of estimation uncertainty that have a significant risk of causing material adjustment to
the carrying amounts of assets and liabilities within the next financial year are the following:
Properties held for Development
The net realisable value of properties held for development requires an assessment of fair value of the
underlying assets using property appraisal techniques and other valuation methods. Such estimates are
inherently subjective and actual values can only be determined in a sales transaction.
Investment in Joint Ventures
The net realisable value of properties held for development within the joint ventures requires an assessment
of fair value of the underlying assets using property appraisal techniques and other valuation methods.
Such estimates are inherently subjective and in particular, during the early stages of the development
process.
Properties held for Investment
The fair value of properties held for investment is based upon open market value and is calculated using
a third party valuation provided by an external valuer.
Interest Rate Risk
The Group is exposed to market risk primarily related to interest rates. These exposures are actively
monitored as set out below.
Financial Liabilities
The Group’s policy is to manage the cost of borrowing using variable rate debt. Whilst floating rate
borrowings are not exposed to changes in fair value, the Group is exposed to cash flow risk as costs increase
if market rates rise. The Group’s policy is to use derivative financial instruments to mitigate at least 50%
of this risk in order to achieve a sensible and appropriate level of interest rate protection whilst maintaining
flexibility to match the commercial trading strategy.
In January 2014, the Group issued 30 million zero dividend preference shares (ZDP Shares) raising £29.3
million after costs. Accounted for as a debt instrument, the ZDP Shares have a gross annual redemption
yield of 5.5% payable on the fifth anniversary and are listed on the main market of the London Stock
Exchange.
At 30 September 2016, after taking into account interest rate swaps, 66% (2015: 100%) of the Group’s
bank borrowings were at a fixed rate of interest.
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STRATEGIC REPORT (continued)
The interest rate profile of the Group bank borrowings at 30 September 2016 was as follows:
Interest 30 Sep 16 30 Sep 15
Rate Maturity £’000 £’000
Lloyds Bank, Jersey(1) BOE base +1.9% 2-5 years 48,100 –
Barclays(2) LIBOR +3.5% Less than 1 year 8,335 8,335
Royal Bank of Scotland (TAPP)(3) LIBOR +3% n/a – 20,174
Royal Bank of Scotland (TOPP)(3) LIBOR +3.5% n/a – 9,642
––––––––––– –––––––––––
56,435 38,151
––––––––––– –––––––––––
––––––––––– –––––––––––
(1) Senior bank facility repayable 27 April 2021.
(2) Senior bank facility repaid 26 October 2016.
(3) Senior bank facilities repaid 28 April 2016.
Financial Assets
The interest rate profile of the Group’s cash and derivatives at the balance sheet date was as follows:
30 Sep 16 30 Sep 15
£’000 £’000
Fixed rate – –
Floating rate 63,662 57,386
––––––––––– –––––––––––
63,662 57,386
––––––––––– –––––––––––
––––––––––– –––––––––––
Floating rate financial assets comprise cash and short term deposits at call and money market rates for up
to thirty days and institutional cash funds.
Credit Risk
The risk of financial loss due to a counterparty’s failure to honour its obligations arises principally in
connection with property leases, the investment of surplus cash and transactions where the Group sells
properties with an element of deferred consideration.
Tenant rent payments are monitored regularly and appropriate action is taken to recover monies owed or
if necessary, to terminate the lease. Deferred consideration terms are only agreed with counterparties
approved by the Board or where some additional security is available, and there were none as at 30
September 2016 (2015: none).
The Group policy has been to invest funds and enter into derivative transactions with a broad range of
institutions having investment grade low risk credit ratings and a strong or superior ability to repay short
term debt obligations. The unprecedented credit and banking market disruption of the last few years has
had a significant impact upon the ability to rely upon either credit ratings or the ability of financial
institutions to honour their commitments and the widespread nature of the financial crisis has introduced
considerable uncertainty into the process. As at 30 September 2016, the Group had a single balance of
£67,000 (2015: £74,000) where the counter-party had failed to honour a notice deposit and a full
impairment provision has been recorded against the balance. There are no other receivables which are past
due but not impaired.
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STRATEGIC REPORT (continued)
Liquidity Risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the
use of bank loans secured on the Group’s properties. The Group is exposed to liquidity risk should it
encounter difficulties in realising assets mainly through the sale of investment properties. However, the
Group maintains a prudent approach to financing and cash flow such that the adverse impact of this can
be mitigated.
Price Risk
The Group’s exposure to changing market prices on the value of financial instruments may have an impact
on the carrying value of financial instruments and would arise principally as a result of entering into swaps
or similar transactions to fix interest rates on the Group’s borrowings. The Group’s policies for managing
this risk are to control the levels of fixed rate debt as set out under interest rate risk above. As the Group’s
assets and liabilities are all denominated in Pounds Sterling, there is currently no exposure to currency
risk.
This report was approved by the Board on 15 December 2016 and signed on its behalf by:
R T E Ware
Chief Executive
15 December 2016
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CORPORATE GOVERNANCE REPORT
The Workings of the Board and its Committees
The Board
The Board currently comprises the chief executive, the finance director, a corporate director and two
independent non-executive directors, of whom one is chairman. These demonstrate a range of experience
and sufficient calibre to bring independent judgement on issues of strategy, performance, resources and
standards of conduct which are vital to the success of the company. The Board is responsible to shareholders
for the proper management of the company. A statement of the directors’ responsibilities in respect of the
financial statements and a statement on going concern is given on pages 26 and 27.
The Board has a formal schedule of matters specifically reserved to it. All directors have access to the
advice and services of the company secretary who is responsible to the Board for ensuring that Board
procedures are followed and that applicable rules and regulations are complied with. In addition, the
company secretary ensures that the directors receive appropriate training as necessary. The appointment
and removal of the company secretary is a matter for the Board as a whole.
The Board meets approximately ten times a year, reviewing trading performance, ensuring adequate
funding, setting and monitoring strategy, examining major acquisition possibilities and reporting to
shareholders. The non-executive directors have a particular responsibility to ensure that the strategies
proposed by the executive directors are fully considered. The chairman ensures that the directors may take
independent professional advice as required at the company’s expense.
The following committees deal with specific aspects of the Group’s affairs.
Remuneration Committee
The company’s remuneration committee is chaired by N J Hamway and its other member is M D Wigley.
It is responsible for making recommendations to the Board, within agreed terms of reference, on the
company’s framework of executive remuneration and its cost. The committee determines the contract
terms, remuneration and other benefits for each of the executive directors, including performance related
bonus schemes, pension rights and compensation payments. The Board itself determines the remuneration
of the non-executive directors. The non-executive directors are not involved in any discussions or decisions
about their own remuneration.
Further details of the company’s policies on remuneration, service contracts and compensation payments
are included in the Directors’ Remuneration Report on pages 21 to 24.
Audit Committee
The audit committee is chaired by N J Hamway and its other member is M D Wigley, and it meets not less
than twice annually. The committee also provides a forum for reporting by the company’s external auditors.
Meetings are also attended, by invitation, by the chief executive and the finance director.
The audit committee is responsible for reviewing a wide range of matters including the half-year and annual
financial statements before their submission to the Board and monitoring the controls which are in force
to ensure the integrity of the information reported to the shareholders. The audit committee advises the
Board on the appointment of external auditors and on their remuneration both for audit and non-audit
work, and discusses the nature, scope and results of the audit with external auditors. The audit committee
keeps under review the cost effectiveness and the independence and objectivity of the external auditors.
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CORPORATE GOVERNANCE REPORT (continued)
Relations with Shareholders
Communications with shareholders are given high priority. Pages 7 to 18 of these financial statements
include a detailed review of the business and future developments. There is regular dialogue with
shareholders. The company’s website is found at www.conygar.com.
The Board uses the Annual General Meeting and results meetings to communicate with private and
institutional investors and welcomes their participation. Details of resolutions to be proposed at the Annual
General Meeting on 7 February 2017 can be found in the notice of the meeting on page 66.
Internal Control
The directors acknowledge that they are responsible for the company’s systems of internal control and for
reviewing its effectiveness. The systems are designed to manage rather than eliminate the risk of failure to
achieve the company’s strategic objectives, and can only provide reasonable, not absolute, assurance against
material misstatement or loss.
The company’s key risk management processes and system of internal control procedures include the
following:
● Management structure: Authority to operate is delegated to executive directors within limits set by
the Board. The appointment of executives to the most senior positions within the group requires
the approval of the Board.
● Identification and evaluation of business risks: The major financial, commercial, legal, regulatory
and operating risks within the group are identified through annual reporting procedures.
● Information and financial reporting systems: The group’s planning and financial reporting
procedures include detailed operational budgets for the year ahead. The Board reviews and approves
them.
● Investment appraisal: A budgetary process and authorisation levels regulate capital expenditure. For
expenditure beyond specified levels, detailed written proposals have to be submitted to the Board.
Commercial, legal and financial due diligence work is, where possible, carried out if a business is to
be acquired.
● Audit Committee: The audit committee monitors the controls which are in place and any perceived
weakness in the control environment. The audit committee also considers and determines relevant
action in respect of any control issues raised by external auditors.
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DIRECTORS’ REMUNERATION REPORT
Information Not Subject to Audit
Remuneration Committee
The company’s remuneration committee is chaired by N J Hamway and its other member is M D Wigley.
The committee makes recommendations to the Board, within agreed terms of reference, on an overall
remuneration package for executive directors and any other senior executives.
Remuneration Policy and Review
The company’s policy on directors’ remuneration remains that the overall remuneration package should
be sufficiently competitive to attract, retain and motivate high quality executives capable of achieving the
Group’s objectives and thereby enhancing shareholder value. The package consists of a basic salary, which
is set at the lower end of market rates, with the potential for significant performance related bonuses aligned
to growth in shareholder value, as represented by net assets per share. All Group employees are employed
by the company.
The details of individual components of the executive remuneration package and service contracts are
summarised below.
Basic salary and benefits: The salary and benefits are reviewed annually at the complete discretion of the
remuneration committee. At present, the directors receive no benefits. Basic salaries remain comparable
with the lower quartile of comparable companies, but sufficient to retain directors.
Profit sharing plan: The profit sharing plan is an annual plan in which executive directors and senior
executives will be entitled to an allocation of a profit sharing pool.
The scheme is based upon the increase in the audited fully diluted net asset value per share of the company.
The profit sharing pool is 20% of any increase in the net asset value per share at 30 September over the
previous highest audited diluted net asset value per share (“high watermark”). This ensures that executive
directors cannot accrue any profit share twice in respect of the same net asset value growth. The previous
high watermark was at 30 September 2014.
Before any payment accrues, the increase in fully diluted net asset value per share must now exceed a
hurdle of 10% compounded annually since the last high watermark (196.3p at 30 September 2014). This
results in a target net asset value per share of:
Target
Actual
2016
237.5p
196.9p
2017
261.3p
–
2018
287.4p
–
The actual diluted net asset value per share for the year ended 30 September 2016 was 196.9p which is
below the target of 237.5p, and accordingly a profit sharing pool has not been created this year.
Executive directors are required to invest a minimum of 50% of any net profit share payment in shares of
the company which must be held for a minimum of two years subject to certain good leaver provisions. In
addition:
– the share price discount to fully diluted net asset value per share must not exceed 35%
– in the interests of full transparency, a schedule showing the full calculation will be published in the
financial statements should any profit share accrue
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DIRECTORS’ REMUNERATION REPORT (continued)
The remuneration committee has absolute discretion over participation, pool allocation and determination
of performance conditions, save in a limited number of circumstances covering change in control and
certain good leaver provisions.
Share options: The share options were awarded by the remuneration committee. No share options were
awarded during the year and it is not intended that any further options be granted by the company.
Pensions: The company does not make contributions to directors’ pension plans other than through salary
sacrifice arrangements. Recent legislative changes in respect of compulsory pension provision and auto-
enrolment may eventually force changes upon the company.
Service contracts: The company’s policy is for all executive directors to have contracts of employment with
provision for termination on no more than 12 months’ notice.
Non-executive directors
None of the non-executive directors have service contracts. Letters of Appointment provide for a period
of three years which may be extended by mutual agreement for a further three years. The letters of
appointment were extended on 25 October 2016. The remuneration of the non-executive directors takes
the form solely of fees, which are set by the board, having taken advice on appropriate levels. The non-
executive directors are not involved in any discussions or decision about their own remuneration.
Service contracts
The service contracts and letters of appointment of the directors include the following terms:
Date of Contract Unexpired Term Notice Period
(Months) (Months)
Executive Directors
R T E Ware 25 October 2007 N/A 12
P M C Rabl 29 October 2009 N/A 12
R H McCaskill 1 October 2015 N/A 12
Non-Executive Directors
N J Hamway 25 October 2007 35 6
M D Wigley 25 October 2007 35 6
Mr McCaskill and Mr Wigley retire by rotation and, being eligible, offer themselves for re-election.
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DIRECTORS’ REMUNERATION REPORT (continued)
Audited Information
Directors’ emoluments
2016
2015
Payment Profit
Basic Basic in lieu Share
Salary Fees Total Salary of notice Reversal Fees Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Executive Directors
R T E Ware 352 – 352 352 – (677) – (325)
P M C Rabl 202 – 202 202 – (236) – (34)
R H McCaskill 175 – 175 – – – – –
P A Batchelor – – – 294 225 (392) – 127
S M Vaughan – – – 138 308 (236) – 210
Non-Executive Directors
N J Hamway – 63 63 – – – 120 120
M D Wigley – 42 42 – – – 42 42
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
729 105 834 986 533 (1,541) 162 140
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
No non-cash benefits were paid to directors.
Interests in Options
The company has a share option scheme by which executive directors and other senior executives are able
to subscribe for ordinary shares in the company and acquire shares in the company. The interests of the
directors were as follows:
Cancelled
At Awarded Exercised unexercised At
1 October during during during 30 September
Exercise 2015 the year the year the year 2016
Price No. No. No. No. No.
R T E Ware £2.00 2,025,000 – – – 2,025,000
The options are exercisable between 19 February 2009 and 19 February 2017.
Options awarded may only be exercised if the annual percentage growth in the company’s share price
exceeds that of the FTSE Small Cap Index over the two year period measured from the date upon which
the options are granted. This performance condition may be retested on an annual basis if it is not achieved
on the second anniversary.
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DIRECTORS’ REMUNERATION REPORT (continued)
The market price of the company’s shares on 30 September 2016 was 158p per share. The highest and
lowest market prices during the year for each share option that is unexpired at the end of the year were as
follows:
Highest Lowest
Options in issue during the year 175.5p 127.5p
The interests of the directors to subscribe for or acquire ordinary shares have not changed since the
year-end.
This report was approved by the Board on 15 December 2016 and signed on its behalf by:
R H McCaskill
Company Secretary
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DIRECTORS’ REPORT
Directors’ Report
The directors present their report and the accounts of the group and the company for the year ended
30 September 2016.
Principal Activities and Review of the Business
The principal activity of the group and the company during the year was property trading, property
investment, acquiring property assets with development and investment potential, and investing in
companies with significant property assets. The company’s principal subsidiaries are listed in note 15 to
the accounts.
A review of the company’s activities and likely future developments during this year is dealt with in the
Chairman’s and Chief Executive’s Statement and the Strategic Report.
Significant Events Since the Balance Sheet Date
There were no significant events since the balance sheet date apart from the refinancing with HSBC and
the share buy backs, both of which are referred to in the Chairman’s and Chief Executive’s Statement, and
the option agreements completed with Horizon Nuclear Power at Rhosgoch and Parc Cybi.
Results and Dividends
The group’s trading results for the year and the group’s and company’s financial position at the end of the
year are shown in the attached accounts.
The directors do not recommend a final dividend in respect of the year ended 30 September 2016 (2015:
1.75 pence per ordinary share).
The Directors and Their Interests in the Shares of the Company
The directors who served the company during the year together with their beneficial and family interests
in the shares of the company were as follows:
Ordinary Shares of £0.05 each
At At
30 September 2016 30 September 2015
N J Hamway 1,089,700 984,500
R T E Ware 4,500,000 4,400,000
P M C Rabl 1,525,480 1,485,480
M D Wigley 330,000 330,000
R H McCaskill 2,000 2,000
––––––––––––––––––––––––––––––––––––––––––––––––––––
––––––––––––––––––––––––––––––––––––––––––––––––––––
Details of the directors’ options to subscribe for shares in the company are disclosed in the Directors’
Remuneration Report.
Directors’ Indemnities
The company has made qualifying third party indemnity provisions for the benefit of its directors which
remain in force at the date of this report.
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The Conygar Investment Company PLC
DIRECTORS’ REPORT (continued)
Major Interests in Shares
At 15 December 2016, the directors had been notified of the following interests in excess of 3% of the
company’s issued share capital:
Name No of Shares %
Miton Group Limited 7,999,156 11.09
Majedie Asset Management Limited 4,932,657 6.84
R T E Ware 4,500,000 6.24
Bimaljit Singh Sandhu 3,950,000 5.47
Cove Investment Partners LLP 3,146,369 4.36
Creditor Payment Policy and Practice
It is the company’s policy that payments to suppliers are made in accordance with those terms and
conditions agreed between the company and its suppliers, provided that all trading terms and conditions
have been complied with.
At 30 September 2016, the company had an average of 7 days (2015: 9 days) purchases outstanding in
trade creditors. The group had an average of 14 days (2015: 16 days) outstanding in trade creditors.
Charitable Donations and Political Contributions
The group made no political donations during the year. The group made charitable donations of £41,093
(2015: £38,750) during the year.
Financial Instruments
Details of the group’s financial instruments are given in note 29.
Going Concern
After making enquiries, the directors have a reasonable expectation that the company has adequate
resources to continue in operational existence for the foreseeable future. For this reason, they continue to
adopt the going concern basis in preparing the financial statements.
Directors’ Responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance
with applicable law and regulations. The directors are required to prepare financial statements for the group
in accordance with the International Financial Reporting Standards as adopted by the European Union
(‘IFRS’) and have elected to prepare financial statements for the company in accordance with IFRS.
Company law requires the directors to prepare such financial statements in accordance with IFRS, the
Companies Act 2006 and Article 4 of the IAS Regulation. Under company law the directors must not
approve the financial statements unless they are satisfied that they give a true and fair view of the state of
the affairs of the company and the group and of the profit or loss of the group for that period.
International Accounting Standard 1 requires that the financial statements present fairly for each financial
year the company’s financial position, financial performance and cash flows. This requires the faithful
representation of the effect of transactions, other events and conditions in accordance with the definitions
and recognition criteria for assets, liabilities, income and expenses set out in the International Accounting
Standards Board’s ‘Framework for the preparation and presentation of financial statements’. In virtually
all circumstances, a fair presentation will be achieved by compliance with all the applicable International
Financial Reporting Standards. Directors are also required to:
● properly select and apply accounting policies;
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The Conygar Investment Company PLC
DIRECTORS’ REPORT (continued)
● make judgements and accounting estimates that are reasonable and prudent;
● present information, including accounting policies, in a manner that provides relevant, reliable,
comparable and understandable information; and
● provide additional disclosures when compliance with the specific requirements in IFRS is insufficient
to enable users to understand the impact of particular transactions, other events and conditions on
the entity’s financial position and performance.
The directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the company’s transactions and disclose with reasonable accuracy at any time the financial position
of the company and the group and to enable them to ensure that the financial statements comply with the
Companies Act 2006. The directors are also responsible for safeguarding the assets of the company and
the group and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The directors have chosen, in accordance with S414c (11) of the Companies Act 2006, to include Principal
Risks and Uncertainties within the Strategic Report.
Electronic Publication
The directors are also responsible for the maintenance and integrity of the investor information contained
on the website. Legislation in the UK concerning the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Provision of Information to Auditors
Each of the persons who is a director at the date of approval of this annual report confirms that:
● so far as the director is aware, there is no relevant audit information of which the company’s auditors
are unaware;
● the director has taken all the steps that he ought to have taken as a director in order to make himself
aware of any relevant audit information and to establish that the company’s auditors are aware of
that information.
Auditors
Rees Pollock have expressed their willingness to continue in office and a resolution to re-appoint them as
auditors for the ensuing year will be proposed at the forthcoming annual general meeting.
Annual General Meeting
The Annual General Meeting of the company will be held on Tuesday 7 February 2017 at 4.00pm at the
offices of Gowling WLG (UK) LLP, 4 More London Riverside, London, SE1 2AU.
The notice of meeting and the resolutions to be proposed at that meeting are attached on page 66.
In addition to ordinary business, there are resolutions to give a director’s authority to disapply pre-
exemption rights and allot equity securities together with resolutions to give share buy back authorities.
By Order of the Board
R H McCaskill
Company Secretary
15 December 2016
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The Conygar Investment Company PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
THE CONYGAR INVESTMENT COMPANY PLC
We have audited the financial statements of The Conygar Investment Company PLC for the year ended
30 September 2016 which comprise the consolidated statement of comprehensive income, the consolidated
and company statement of changes in equity, the consolidated and company balance sheets, the
consolidated and company cash flow statements, and the related notes. The financial framework that has
been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs)
as adopted by the European Union and, as regards the parent company financial statements, as applied in
accordance with the Companies Act 2006.
This report is made solely to the company’s members, as a body, 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
members those matters which we are required to state to them in an auditors’ 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 members, as a body, for this report, or the opinions we have formed.
Respective Responsibilities of Directors and Auditors
As explained more fully in the Directors’ Responsibilities Statement set out on pages 26 to 27, 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 and express an opinion on 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 Practice Board’s Ethical Standards for Auditors.
Scope of the Audit of the Financial Statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the financial statements are free from material misstatement,
whether caused by fraud or error. This includes an assessment of: whether the accounting policies are
appropriate to the group’s and the parent company’s circumstances and have been consistently applied
and adequately disclosed; the reasonableness of significant accounting estimates made by the directors;
and the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information in the Report and Accounts to identify
material inconsistencies with the audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in
the course of performing the audit. If we become aware of any apparent misstatements or inconsistencies
we consider the implication for our report.
Opinion on Financial Statements
In our opinion:
● the financial statements give a true and fair view of the group’s and of the parent company’s affairs
as at 30 September 2016 and of the group’s loss for the year then ended;
● the group financial statements have been properly prepared in accordance with IFRSs as adopted
by the European Union;
● the parent company financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union and as applied in accordance with the provisions of the Companies
Act 2006; and
● the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
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The Conygar Investment Company PLC
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
THE CONYGAR INVESTMENT COMPANY PLC (continued)
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
● the part of the Directors’ Remuneration Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
● the information given in the Strategic Report and the Directors’ Report for the financial year for
which the financial statements are prepared is consistent with the financial statements.
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.
Jonathan Munday (Senior statutory auditor)
For and on behalf of Rees Pollock, Statutory Auditor
London
15 December 2016
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 September 2016
Year Year
Ended Ended
30 Sep 16 30 Sep 15
Note £’000 £’000
Rental income 9,222 10,957
Other property income 213 484
Sale of trading investments – 300
–––––––––– ––––––––––
Revenue 9,435 11,741
–––––––––– ––––––––––
Direct costs of:
Rental income 2,909 2,932
Development costs written off 1,581 –
Sale of trading investments – 211
–––––––––– ––––––––––
Direct Costs 4,490 3,143
–––––––––– ––––––––––
Gross Profit 4,945 8,598
Share of results of joint ventures 14 (3) (19)
(Loss)/profit on sale of investment properties 12 (308) 2,436
Surplus on revaluation of investment properties 12 992 2,742
Loss on impairment of goodwill 16 (3,173) –
Other gains and losses 6 (880) (309)
Administrative expenses (2,440) (1,541)
–––––––––– ––––––––––
Operating (Loss)/Profit 3 (867) 11,907
Finance costs 7 (4,135) (4,379)
Finance income 7 259 226
–––––––––– ––––––––––
(Loss)/Profit Before Taxation (4,743) 7,754
Taxation 8 (706) (1,316)
–––––––––– ––––––––––
(Loss)/Profit And Total Comprehensive
(Charge)/Income for the Year (5,449) 6,438
–––––––––– ––––––––––
–––––––––– ––––––––––
Attributable to:
– equity shareholders (5,449) 6,438
– minority shareholders – –
–––––––––– ––––––––––
(5,449) 6,438
–––––––––– ––––––––––
–––––––––– ––––––––––
Basic (loss)/earnings per share 10 (6.90)p 7.72p
Diluted (loss)/earnings per share 10 (6.90)p 7.72p
All of the activities of the Group are classed as continuing.
The notes on pages 37 to 62 form part of these accounts.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2016
Attributable to the equity holders of the Company
Capital Non-
Share Share Redemption Treasury Retained Controlling Total
Capital Premium Reserve Shares Earnings Total Interests Equity
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Group
Changes in equity
for the year ended
30 September 2015
At 1 October 2014 4,932 124,128 1,568 (15,384) 54,185 169,429 20 169,449
Profit for the year – – – – 6,438 6,438 – 6,438
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total comprehensive
income for the year – – – – 6,438 6,438 – 6,438
Issue of share capital 53 1,243 – – – 1,296 – 1,296
Dividend paid – – – – (1,450) (1,450) – (1,450)
Purchase of own shares – – – (7,937) – (7,937) – (7,937)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 30 September 2015 4,985 125,371 1,568 (23,321) 59,173 167,776 20 167,796
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Changes in equity
for the year ended
30 September 2016
At 1 October 2015 4,985 125,371 1,568 (23,321) 59,173 167,776 20 167,796
Loss for the year – – – – (5,449) (5,449) – (5,449)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
Total comprehensive
(charge)/income for
the year – – – – (5,449) (5,449) – (5,449)
Cancellation of share
premium account – (125,371) – – 125,371 – – –
Dividend paid – – – – (1,415) (1,415) – (1,415)
Purchase of own shares – – – (8,873) – (8,873) – (8,873)
Purchase of non-
controlling interest – – – – – – (20) (20)
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
At 30 September 2016 4,985 – 1,568 (32,194) 177,680 152,039 – 152,039
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
–––––––– –––––––– –––––––– –––––––– –––––––– –––––––– –––––––– ––––––––
The notes on pages 37 to 62 form part of these accounts.
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COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 30 September 2016
Capital
Share Share Redemption Treasury Retained Total
Capital Premium Reserve Shares Earnings Equity
£’000 £’000 £’000 £’000 £’000 £’000
Company
Changes in equity for the year
ended 30 September 2015
At 1 October 2014 4,932 124,128 1,568 (15,384) 26,409 141,653
Loss for the year – – – – (844) (844)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Total comprehensive income and
expenditure for the year – – – – (844) (844)
Issue of share capital 53 1,243 – – – 1,296
Dividend paid – – – – (1,450) (1,450)
Purchase of own shares – – – (7,937) – (7,937)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
At 30 September 2015 4,985 125,371 1,568 (23,321) 24,115 132,718
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Changes in equity for the year
ended 30 September 2016
At 1 October 2015 4,985 125,371 1,568 (23,321) 24,115 132,718
Loss for the year – – – – (8,121) (8,121)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Total comprehensive income and
expenditure for the year – – – – (8,121) (8,121)
Cancellation of share
premium account – (125,371) – – 125,371 –
Dividend paid – – – – (1,415) (1,415)
Purchase of own shares – – – (8,873) – (8,873)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
At 30 September 2016 4,985 – 1,568 (32,194) 139,950 114,309
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
The notes on pages 37 to 62 form part of these accounts.
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The Conygar Investment Company PLC
CONSOLIDATED BALANCE SHEET
at 30 September 2016
Company number: 04907617
30 Sep 2016 30 Sep 2015
Note £’000 £’000
Non-Current Assets
Property, plant and equipment 11 21 28
Investment properties 12 130,680 133,190
Investment properties under construction 13 9,476 3,156
Investment in joint ventures 14 10,110 6,660
Loan to joint venture 14 – 3,410
Goodwill 16 – 3,173
–––––––––– ––––––––––
150,287 149,617
–––––––––– ––––––––––
Current Assets
Development and trading properties 17 30,739 33,373
Trade and other receivables 18 3,675 4,969
Derivatives 29 44 37
Cash and cash equivalents 63,662 57,386
–––––––––– ––––––––––
98,120 95,765
–––––––––– ––––––––––
Total Assets 248,407 245,382
Current Liabilities
Trade and other payables 19 4,263 5,370
Bank loans 20 8,335 17,768
Tax liabilities 243 2,254
–––––––––– ––––––––––
12,841 25,392
–––––––––– ––––––––––
Non-Current Liabilities
Bank loans 20 47,210 19,723
Zero dividend preference shares 21 34,415 32,471
Deferred tax 1,902 –
–––––––––– ––––––––––
83,527 52,194
–––––––––– ––––––––––
Total Liabilities 96,368 77,586
–––––––––– ––––––––––
Net Assets 152,039 167,796
–––––––––– ––––––––––
–––––––––– ––––––––––
Equity
Called up share capital 22 4,985 4,985
Share premium account – 125,371
Capital redemption reserve 1,568 1,568
Treasury shares 23 (32,194) (23,321)
Retained earnings 177,680 59,173
–––––––––– ––––––––––
Equity Attributable to Equity Holders 152,039 167,776
Non-controlling interests – 20
–––––––––– ––––––––––
Total Equity 152,039 167,796
–––––––––– ––––––––––
–––––––––– ––––––––––
The accounts on pages 30 to 62 were approved by the Board and authorised for issue on 15 December 2016
and are signed on its behalf by:
R T E WARE
R H MCCASKILL }
The notes on pages 37 to 62 form part of these accounts.
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The Conygar Investment Company PLC
COMPANY BALANCE SHEET
at 30 September 2016
Company number: 04907617
30 Sep 2016 30 Sep 2015
Note £’000 £’000
Non-Current Assets
Investment in subsidiary undertakings 15 68 3,269
Investment properties under construction 13 3,397 –
Property, plant and equipment 11 21 28
–––––––––– ––––––––––
3,486 3,297
–––––––––– ––––––––––
Current Assets
Development and trading properties 17 8,558 7,962
Trade and other receivables 18 99,784 132,347
Cash and cash equivalents 37,902 24,230
–––––––––– ––––––––––
146,244 164,539
–––––––––– ––––––––––
Total Assets 149,730 167,836
Current Liabilities
Trade and other payables 19 35,421 33,872
Tax liabilities – 1,246
–––––––––– ––––––––––
35,421 35,118
–––––––––– ––––––––––
Total Liabilities 35,421 35,118
–––––––––– ––––––––––
Net Assets 114,309 132,718
–––––––––– ––––––––––
–––––––––– ––––––––––
Equity
Called up share capital 22 4,985 4,985
Share premium account – 125,371
Capital redemption reserve 1,568 1,568
Treasury shares 23 (32,194) (23,321)
Retained earnings 139,950 24,115
–––––––––– ––––––––––
Total Equity 114,309 132,718
–––––––––– ––––––––––
–––––––––– ––––––––––
The accounts on pages 30 to 62 were approved by the Board and authorised for issue on 15 December 2016
and are signed on its behalf by:
R T E WARE
R H MCCASKILL }
The notes on pages 37 to 62 form part of these accounts.
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The Conygar Investment Company PLC
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 September 2016
Year Year
Ended Ended
30 Sep 16 30 Sep 15
£’000 £’000
Cash Flows From Operating Activities
Operating (loss)/profit (867) 11,907
Depreciation and amortisation 21 34
Amortisation of reverse lease premium 104 180
Share of results of joint ventures 3 19
Other gains and losses 17 340
Loss/(gain) on sale of investment properties 308 (2,436)
Revaluation of investment properties (992) (2,742)
Loss on impairment of goodwill 3,173 –
Development costs written off 1,581 –
–––––––––– ––––––––––
Cash Flows From Operations Before Changes In Working Capital 3,348 7,302
Change in trade and other receivables 1,294 (1,191)
Change in land, development and trading properties 267 (7,102)
Change in trade and other payables (320) (9,248)
–––––––––– ––––––––––
Cash Flows From Operations 4,589 (10,239)
Finance costs (1,450) (2,020)
Finance income 167 207
Tax paid (815) (859)
–––––––––– ––––––––––
Cash Flows Generated From/(Used In) Operating Activities 2,491 (12,911)
–––––––––– ––––––––––
Cash Flows From Investing Activities
Acquisition of and additions to investment properties (9,759) (3,979)
Sale proceeds of investment properties 6,842 30,971
Investment in joint ventures (215) (573)
Loans repaid by/(advanced to) joint venture 175 (1,206)
Purchase of plant and equipment (14) –
–––––––––– ––––––––––
Cash Flows (Used In)/Generated From Investing Activities (2,971) 25,213
–––––––––– ––––––––––
Cash Flows From Financing Activities
Bank loans drawn down 48,100 –
Bank loans repaid (29,816) (17,578)
Costs paid on new bank loan (971) –
Purchase of interest rate cap (269) –
Dividend paid (1,415) (1,450)
Purchase of own shares (8,873) (7,937)
Issue of shares – 1,296
–––––––––– ––––––––––
Cash Flows Generated From/(Used In) Financing Activities 6,756 (25,669)
–––––––––– ––––––––––
Net increase/(decrease) in cash and cash equivalents 6,276 (13,367)
Cash and cash equivalents at 1 October 57,386 70,753
–––––––––– ––––––––––
Cash and Cash Equivalents at 30 September 63,662 57,386
–––––––––– ––––––––––
–––––––––– ––––––––––
The notes on pages 37 to 62 form part of these accounts.
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The Conygar Investment Company PLC
COMPANY CASH FLOW STATEMENT
for the year ended 30 September 2016
Year Year
Ended Ended
30 Sep 16 30 Sep 15
£’000 £’000
Cash Flows From Operating Activities
Operating loss (8,065) (1,188)
Write down value of investment in subsidiary undertaking 3,201 –
Provision against loan to group undertaking 1,643 –
Depreciation and amortisation 21 40
–––––––––– ––––––––––
Cash Flows From Operations Before Changes in Working Capital (3,200) (1,148)
Change in trade and other receivables 293 (429)
Change in land, developments and trading properties (1,382) (245)
Change in trade and other payables 817 (9,584)
–––––––––– ––––––––––
Cash Flows From Operations (3,472) (11,406)
Finance income 124 209
Finance costs – –
Tax paid – –
–––––––––– ––––––––––
Cash Flows Used In Operating Activities (3,348) (11,197)
–––––––––– ––––––––––
Cash Flows From Investing Activities
Acquisition of and additions to investment properties (3,397) –
Purchase of plant and equipment (14) –
–––––––––– ––––––––––
Cash Flows Used In Investing Activities (3,411) –
–––––––––– ––––––––––
Cash Flows From Financing Activities
Dividend paid (1,415) (1,450)
Loans to joint venture (153) (1,206)
Loans from/(to) subsidiaries 30,872 (970)
Purchase of own shares (8,873) (7,937)
Issue of shares – 1,296
–––––––––– ––––––––––
Cash Flows From/(Used In) Financing Activities 20,431 (10,267)
–––––––––– ––––––––––
Net increase/(decrease) in cash and cash equivalents 13,672 (21,464)
Cash and cash equivalents at 1 October 24,230 45,694
–––––––––– ––––––––––
Cash and Cash Equivalents at 30 September 37,902 24,230
–––––––––– ––––––––––
–––––––––– ––––––––––
The notes on pages 37 to 62 form part of these accounts.
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The Conygar Investment Company PLC
NOTES TO THE ACCOUNTS
for the year ended 30 September 2016
1. Accounting Policies and General Information
1a General Information
The Conygar Investment Company PLC (“the Company”) is a company incorporated and domiciled
in England and Wales, is AIM listed and registered at Companies House under registration number
4907617.
The Company’s subsidiaries are shown in note 15. The Company and its subsidiaries are collectively
referred to below as “the Group”.
The Company’s principal activity is property trading, property investment, acquiring property assets
with development and investment potential, and investing in companies with significant property assets.
1b Basis of Preparation
The Company has prepared the accounts on the basis of all applicable IFRS, including all International
Accounting Standards (IAS), Standing Interpretations Committee (SIC) interpretations issued by the
International Financial Reporting Interpretations Committee (IFRIC) interpretations issued by the
International Accounting Standards Board (IASB) with effective dates for accounting periods
beginning on or after 1 October 2015, together with those parts of the Companies Act 2006 applicable
to companies reporting under IFRS.
The consolidated financial information has been prepared on the historical cost basis except for
investment properties, derivatives and listed investments which are accounted for at fair value.
1c Summary of Significant Accounting Policies
The principal accounting policies of the Group are set out below. These policies have been consistently
applied to all of the periods presented, unless otherwise stated.
Interpretations and Amendments to Published Standards Effective in the Accounts
For the purposes of the preparation of the accounts, the Group has applied all standards and
interpretations that will be effective for the accounting periods commencing on or after 1 October
2015.
The following standards and interpretations have been adopted:
– Annual improvements 2012 (effective for accounting periods beginning on or after 1 July 2014
although endorsed for annual periods on or after 1 February 2015);
– Annual improvements 2013 (endorsed for annual periods on or after 1 January 2015).
Management has assessed the impact of the standards and interpretations on the Group and concluded
they are not applicable to the Group’s circumstances and do not require amendment of the Group’s
accounting policies.
Standards, Interpretations and Amendments to Published Standards that are not yet
Effective
Certain new standards, amendments and interpretations to existing standards have been published
that are mandatory for the Group’s accounting periods beginning on or after 1 October 2016 or later
periods but which the Group has not adopted early are as follows:
– Amendment to IFRS 11, ‘Joint arrangements’ on acquisition of an interest in a joint operation
(effective for accounting periods beginning on or after 1 January 2016);
37
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The Conygar Investment Company PLC
NOTES TO THE ACCOUNTS (continued)
1. Accounting Policies and General Information (continued)
– Amendments to IAS 16, ‘Property, plant and equipment’ and IAS 38, ‘Intangible assets’, on
depreciation and amortisation (effective for accounting periods beginning on or after 1 January
2016);
– Amendments to IAS 27, ‘Separate financial statements’ on the equity method (effective for
accounting periods beginning on or after 1 January 2016);
– Annual improvements 2014 (effective for accounting periods beginning on or after 1 January
2016);
– Amendment to IAS 1, ‘Presentation of financial statements’ on the disclosure initiative (effective
for accounting periods beginning on or after 1 January 2016);
– Amendment to IFRS 10 and IAS 28 on investment entities applying the consolidation exception
(effective for accounting periods beginning on or after 1 January 2016);
–
IAS Amendments to IAS 7, ‘Statement of cash flows’ on disclosure initiative (effective for
accounting periods beginning on or after 1 January 2017);
– Amendments to IAS 12, ‘Income taxes’ on Recognition of deferred tax assets for unrealised losses
(effective for accounting periods beginning on or after 1 January 2017);
–
–
IFRS 9 ‘Financial Instruments’ (effective for accounting periods beginning on or after 1 January
2018);
IFRS 15 ‘Revenue from contracts with customers’ (effective for accounting periods beginning on
or after 1 January 2018);
– Amendment to IFRS 15 ‘Revenue from contracts with customers’ (effective for accounting periods
beginning on or after 1 January 2018);
–
IFRS 16 ‘Leases’ (effective for accounting periods beginning on or after 1 January 2019).
Management continues to monitor the IASB’s on-going work on improvements to financial reporting
but does not currently believe that the amendments and interpretations listed above will have a material
effect on the Group’s reported income or net assets.
Basis of Consolidation The Group accounts consolidate those of the Company and all of its
subsidiary undertakings drawn up to 30 September each year. Subsidiary undertakings are those
entities over which the Group has the ability to govern the financial and operating policies through the
exercise of voting rights. The results of subsidiaries acquired or sold are consolidated for the periods
from or to the date on which control passed. Acquisitions are accounted for under the acquisition
method.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess
of the cost of the business combination over the Group’s interest in the net fair value of the identifiable
assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s interest in the
net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost
of the business combination, the excess is recognised immediately in profit or loss.
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from
the Group’s equity therein. Non-controlling interests consist of the amount of these interests at the
date of the original business combination and the minority’s share of changes in equity since the date
of the combination.
All intra group balances, transactions, income and expenses and profit and losses on transactions
between the Company and its subsidiaries and between subsidiaries are eliminated.
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NOTES TO THE ACCOUNTS (continued)
1. Accounting Policies and General Information (continued)
Revenue Recognition Property revenue consists of gross rental income on an accruals basis, together
with sales of trading, development and investment properties. Rental income receivable in the period
from lease commencement to the earlier of lease expiry and any tenant’s option to break is spread
evenly over that period. Any incentive for lessees to enter into a lease agreement and any costs
associated with entering into the lease are spread over the same period.
A property is regarded as sold when the significant risks and returns have been transferred to the buyer.
For conditional exchanges, sales are recognised when the conditions are satisfied.
Revenue in respect of investment and other income represents investment income, fees and
commissions earned on an accruals basis and profits or losses recognised on investments held for the
short term. Dividends are recognised when the shareholders’ right to receive payment has been
established. Interest income is accrued on a time basis, by reference to the principal outstanding and
the effective interest rate.
Operating Profit Operating profit is stated after charging income from trading investments and after
the share of results of joint ventures but before finance costs and finance income.
Expenses All expenses are accounted for on an accruals basis. They are charged through the income
statement with the exception of share issue expenses, which are charged to the share premium account.
Pension Costs The Group makes voluntary contributions to the defined contribution plans of certain
employees, including directors. A defined contribution plan is a pension plan under which the Group
pays fixed contributions to a separate entity. The Group has no legal or constructive obligation to pay
further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating
to employee service in the current and prior periods. The contributions are recognised as an employee
benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that
a cash refund or reduction in future payments is available.
Profit sharing plan The Group has a profit sharing plan which is an annual plan in which executive
directors and senior executives will be entitled to an allocation of a profit sharing pool based upon the
increase in the net asset value per share of the Company.
Share Based Payments The Group provides equity-settled share-based payments in the form of
share options.
IFRS 2 “Share-based payment” is applied to all share-based payment arrangements granted after 7
November 2002 that had not vested prior to 1 October 2005. Equity-settled share-based payments
are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of
grant. The fair value determined at the date of grant is expensed on a straight line basis over the vesting
period, based on the Group’s estimate of shares which will eventually vest and adjusted for the effect
of non market-based vesting conditions. The Group uses an appropriate valuation model utilising a
Monte Carlo simulation in order to arrive at a fair value at the date share options are granted.
Property, Plant and Equipment Property, plant and equipment is stated at cost less accumulated
depreciation.
Depreciation Depreciation is charged so as to write off the cost of assets, over their estimated useful
lives, using the straight line method, on the following basis:
Plant and equipment
Furniture and fittings
– 25% per annum
– 20% per annum
Amortisation The lease of the Company’s premises is amortised over the length of the lease.
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NOTES TO THE ACCOUNTS (continued)
1. Accounting Policies and General Information (continued)
Taxation The taxation charge represents the sum of tax currently payable and deferred tax. The charge
for current taxation is based on the results for the year as adjusted for items which are non-assessable
or disallowed. It is calculated using rates that have been enacted or substantively enacted by the balance
sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used in
the computation of taxable profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of
the assets to be recovered.
Deferred tax is calculated at the tax rates that have been enacted or substantially enacted by the balance
sheet date and are expected to apply in the period when the liability is settled or the asset is realised.
It is recognised in the Income Statement except when it relates to items credited or charged directly
to equity, in which case the deferred tax is also dealt with in equity.
Investment Properties In accordance with IAS 40 (Revised) both long leasehold and freehold
properties which are held to earn rentals and/or for capital appreciation have been accounted for as
investment properties.
Investment properties are initially recognised at cost, being the fair value of the consideration given,
including acquisition costs associated with the investment property. Subsequent costs, including reverse
lease premiums, are capitalised to the extent that such costs have an ongoing benefit to the property.
After initial recognition, investment properties are measured at fair value, with unrealised gains and
losses recognised in the Income Statement. Fair value is based on the market value, at the balance
sheet date, of the properties as provided by Jones Lang LaSalle, a firm of independent chartered
surveyors, in accordance with the Practice Statements contained in the RICS Appraisal and Valuation
Standards published by the Royal Institution of Chartered Surveyors.
Investments In Joint Ventures A joint venture is an entity in which the Group has an interest. The
joint venture operates in the same way as other entities, except that a contractual arrangement between
the venturers establishes joint control over the economic activity of that entity.
The Group’s interests in jointly controlled entities are incorporated in the financial information using
the equity method of accounting. Investments in joint ventures are carried in the balance sheet at cost
as adjusted by post acquisition changes in the Group’s share of the net assets of the associate, less any
impairment in the value of the individual investments. The Group’s share of the net profit or loss of
the joint venture is shown as a single line item in the consolidated income statement.
Where the Group transacts with a joint venture any profit or loss arising is eliminated to the extent of
the Group’s interest in the relevant joint venture.
Investment In Subsidiaries Investments in subsidiaries are held in the Company balance sheet at
cost and reviewed annually for impairment.
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NOTES TO THE ACCOUNTS (continued)
1. Accounting Policies and General Information (continued)
Goodwill and Impairment reviews Goodwill, representing the excess of the cost of acquisition
over the fair value of the Group’s share of the identifiable net assets acquired, is initially recognised as
an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill
which is recognised as an asset is reviewed for impairment at least annually. For the purposes of
impairment testing, goodwill is allocated to each of the Group’s cash generating units expected to
benefit from the synergies of the combination. Cash generating units to which goodwill has been
allocated are tested for impairment annually, or more frequently where there is an indication that the
unit may be impaired. If the recoverable amount of the cash generating unit is less than the carrying
amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount
of each asset of the unit. The recoverable amount is the higher of fair value less costs to sell and value
in use. In assessing the value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money
and risks specific to the cash generating unit. An impairment loss is recognised immediately in profit
and loss and is not subsequently reversed.
Development and Trading Properties Development and trading properties held for sale are
inventory and are included in the Balance Sheet at the lower of cost and net realisable value. Cost
comprises the original purchase price of the property together with directly attributable acquisition
costs. Where multiple properties are acquired as part of a single transaction the purchase price and
directly attributable costs are allocated to the individual units based on independent valuations. Net
realisable value represents the estimated selling price less all estimated costs of completion.
Cash and Cash Equivalents Cash and cash equivalents are carried in the Balance Sheet at cost. For
the purposes of the cash flow statement, cash and cash equivalents comprise cash in hand, deposits
with banks and other short term liquid investments with original maturities of three months or less.
Trade Receivables Trade receivables are measured on initial recognition at fair value, and are
subsequently measured at amortised cost using the effective interest rate method. Appropriate
allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective
evidence that the asset is impaired. The allowance recognised is measured as the difference between
the asset’s carrying amount and the present value of the estimated future cash flows discounted at the
effective interest rate computed at initial recognition.
Zero Dividend Preference Shares Zero dividend preference shares are recognised as liabilities in
the Statement of Financial Position in accordance with IAS 32 Financial Instruments: Presentation.
After initial recognition, these liabilities are measured at amortised cost, which represents the initial
proceeds of the issuance plus the accrued entitlement to the date of these financial statements.
Borrowing and Borrowing Costs Interest bearing bank loans and overdrafts are initially recorded
at fair value, net of direct finance and other costs yet to be amortised and are subsequently measured
at amortised cost using the effective interest rate method. Finance and other costs incurred in respect
of the obtaining and maintenance of borrowings are accounted for on an accruals basis using the
effective interest rate method and written off to the Statement of Comprehensive Income over the
length of the associated borrowings. Borrowing costs that are directly attributable to the acquisition,
construction or production of assets which necessarily take a substantial period of time to get ready
for their intended use or sale are capitalised as part of the cost of that asset.
Trade Payables Trade payables are recognised initially at fair value, and are subsequently measured
at amortised cost using the effective interest rate method.
Trading Investments Trading investments are measured at fair value. Gains and losses on the re-
measurement of trading investments are recognised directly in the Statement of Comprehensive
Income. Fair values of these investments are based on quoted market prices where available.
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NOTES TO THE ACCOUNTS (continued)
1. Accounting Policies and General Information (continued)
Derivative Financial Instruments Derivative financial assets and financial liabilities are recognised
on the Balance Sheet when the Group becomes a party to the contractual provisions of the instrument.
Derivatives are initially recorded at fair value and are subsequently remeasured to fair value based on
mid-market prices, estimated future cash flows and forward rates as appropriate.
Financial liabilities and equity Financial liabilities and equity instruments are classified according
to the substance of the contractual arrangements entered into. An equity instrument is any contract
that evidence a residual interest in the assets of the Group after deducting all of its liabilities.
Equity instruments Equity instruments issued by the Group are recorded at the proceeds received,
net of direct issue costs. Dividend distributions to the Company’s shareholders are recognised as a
liability in the Group’s financial statements in the period in which the dividend is approved by the
Company’s shareholders.
Treasury shares Shares which have been repurchased are classified as Treasury Shares and shown
as a separate item within equity. They are recognised at the trade date for the amount of consideration
paid, together with directly attributable costs. This is presented as a deduction from total equity.
Preference shares Preference shares are regarded as compound instruments, consisting of a liability
component and an equity component. At the date of issue, the fair value of the liability component is
estimated using the prevailing market interest rate for similar non-convertible debt. The difference
between the proceeds of issue of the convertible loan notes and the fair value assigned to the liability
component, representing the embedded option to convert the liability into equity of the Group, is
included in equity.
Issue costs are apportioned between the liability and equity components of the convertible loan notes
based on their relative carrying amounts at the date of issue. The portion relating to the equity
component is charged directly against equity.
The interest expense on the liability component is calculated by applying the prevailing market interest
rate for similar non-convertible debt to the liability component of the instrument. The difference
between this amount and the interest paid is added to the carrying amount of the convertible loan
note.
Leasing The Group has entered into commercial property leases as lessor of its investment property
portfolio. As the terms of these leases do not transfer substantially all the risks and rewards of ownership
to the lessee they are classified as operating leases. Rentals receivable under operating leases are credited
to income on a straight line basis over the term of the relevant lease. Benefits granted as an incentive
to enter into an operating lease are also spread on a straight line basis over the lease term.
The Group leases its office premises. As the terms of the lease do not transfer substantially all the risks
and rewards of ownership to the Company, the lease is classified as an operating lease. Rentals payable
under operating leases are charged to income on a straight line basis over the term of the relevant lease.
Use of Estimates and Judgements To be able to prepare accounts according to generally accepted
accounting principles, management must make estimates and assumptions that affect the asset and
liability items and revenue and expense amounts recorded in the accounts. These estimates are based
on historical experience and various other assumptions that management and the board of directors
believe are reasonable under the circumstances. The results of these considerations form the basis for
making judgements about the carrying value of assets and liabilities that are not readily available from
other sources.
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NOTES TO THE ACCOUNTS (continued)
1. Accounting Policies and General Information (continued)
The key sources of estimation uncertainty that have a significant risk of causing material adjustment
to the carrying amounts of assets and liabilities within the next financial year are the following:
Properties Held for Investment
The fair value of properties held for investment is based upon open market value and is calculated
using a third party valuation provided by an external independent valuer. The valuations are based
upon assumptions including future rental income, anticipated void cost, the appropriate discount rate
or yield. The independent valuers also take into consideration market evidence for comparable
properties in respect of both transaction prices and rental agreements.
Properties Held for Development
The net realisable value of properties held for development requires an assessment of fair value of the
underlying assets using property appraisal techniques and other valuation methods. Such estimates
are inherently subjective and actual values can only be determined in a sales transaction.
Investment in Joint Ventures
The net realisable value of properties held for development within the joint ventures requires an
assessment of fair value of the underlying assets using property appraisal techniques and other valuation
methods. Such estimates are inherently subjective and in particular during the early stages of the
development process.
Share Based Payments
The estimation of share based payment costs, which require the use of an appropriate valuation model,
including estimations for inputs into the valuation model covering vesting period, expected life, the
number of awards that will ultimately vest and judgements relating to the probability of meeting non-
market performance conditions and the continuing participation of employees. Further details on share
based payments are given in note 24.
2. Segmental Information
The Group has adopted IFRS 8 Operating Segments with effect from 1 October 2009. IFRS 8 requires
the identification of the Group’s operating segments which are defined as being discrete components
of the Group’s operations whose results are regularly reviewed by the Board of directors. The Group
divides its business into the following segments:
● Investment properties, which are owned or leased by the Group for long-term income and for
capital appreciation, and trading properties which are owned or leased with the intention to sell;
and,
● Development properties, which include sites, developments in the course of construction and sites
available for sale.
The only item of revenue or profit/loss relating to the development properties was the part disposal in
the prior year and therefore only the segmented balance sheet is reported.
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NOTES TO THE ACCOUNTS (continued)
2. Segmental Information (continued)
Balance Sheet
30 September 2016 30 September 2015
Investment Development Group Investment Development Group
Properties Properties Other Total Properties Properties Other Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Investment properties 140,156 – – 140,156 136,346 – – 136,346
Investment in joint
ventures – 10,110 – 10,110 – 10,070 – 10,070
Goodwill – – – – – 3,173 – 3,173
Development &
trading properties – 30,739 – 30,739 – 33,373 – 33,373
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
140,156 40,849 – 181,005 136,346 46,616 – 182,962
Other assets 27,947 – 39,455 67,402 35,995 – 26,425 62,420
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Total assets 168,103 40,849 39,455 248,407 172,341 46,616 26,425 245,382
Liabilities (60,077) – (36,291) (96,368) (41,683) – (35,903) (77,586)
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
Net assets 108,026 40,849 3,164 152,039 130,658 46,616 (9,478) 167,796
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– ––––––––– –––––––––
3. Operating Profit
Operating profit is stated after charging:
Year ended Year ended
30 Sep 16 30 Sep 15
£’000 £’000
Audit services – fees payable to the parent company auditor
for the audit of the Company and the consolidated
financial statements 25 25
–––––––––– ––––––––––
Other services – fees payable to the Company auditor for the
audit of the Company’s subsidiaries pursuant to legislation 60 60
–––––––––– ––––––––––
Other services – fees payable to the Company auditor for
tax services 20 20
–––––––––– ––––––––––
Depreciation of owned assets 3 7
–––––––––– ––––––––––
Lease amortisation 18 27
–––––––––– ––––––––––
Operating lease rentals – land and buildings 184 171
–––––––––– ––––––––––
Movement on provision for doubtful debts 107 172
–––––––––– ––––––––––
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NOTES TO THE ACCOUNTS (continued)
4. Particulars of Employees
The aggregate payroll costs of the above were:
Year ended Year ended
30 Sep 16 30 Sep 15
£’000 £’000
Wages and salaries 1,264 443
Social security costs 165 71
–––––––––– ––––––––––
1,429 514
–––––––––– ––––––––––
–––––––––– ––––––––––
The average monthly number of persons, including executive directors, employed by the Company
during the year was seven (2015: nine).
5. Directors’ Emoluments
Year ended Year ended
30 Sep 16 30 Sep 15
£’000 £’000
Emoluments 834 140
–––––––––– ––––––––––
–––––––––– ––––––––––
Emoluments of highest paid director 352 210
–––––––––– ––––––––––
–––––––––– ––––––––––
The board of directors comprise the only persons having authority and responsibility for planning,
directing and controlling the activities of the Group.
6. Other Gains and Losses
Year ended Year ended
30 Sep 16 30 Sep 15
£’000 £’000
Movement in fair value of interest rate swaps (262) (340)
Transaction costs (650) –
Other 32 31
–––––––––– ––––––––––
(880) (309)
–––––––––– ––––––––––
–––––––––– ––––––––––
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NOTES TO THE ACCOUNTS (continued)
7. Finance Income/Costs
Year ended Year ended
30 Sep 16 30 Sep 15
£’000 £’000
Finance Income
Bank interest and interest receivable 259 226
–––––––––– ––––––––––
–––––––––– ––––––––––
Finance Costs
Bank loans (1,584) (2,021)
Amortisation of arrangement fees (741) (642)
ZDP interest payable (1,810) (1,716)
–––––––––– ––––––––––
(4,135) (4,379)
–––––––––– ––––––––––
–––––––––– ––––––––––
8. Taxation on Ordinary Activities
(a) Analysis of tax charge in the year
Year ended Year ended
30 Sep 16 30 Sep 15
£’000 £’000
UK Corporation tax based on the results for the year 577 1,302
(Over)/under provision in prior years (1,773) 14
–––––––––– ––––––––––
Current tax (1,196) 1,316
Deferred tax 1,902 –
–––––––––– ––––––––––
706 1,316
–––––––––– ––––––––––
–––––––––– ––––––––––
(b) Factors affecting tax charge
The tax assessed on the (loss)/profit for the year differs from the standard rate of corporation tax in
the UK of 20.0% (2015: 20.5%).
Year ended Year ended
30 Sep 16 30 Sep 15
£’000 £’000
(Loss)/profit before taxation (4,743) 7,754
–––––––––– ––––––––––
–––––––––– ––––––––––
(Loss)/profit multiplied by rate of tax (949) 1,590
Effects of:
Expenses not deductible for tax purposes 1,314 395
Joint venture losses not taxable 10 4
Gains not subject to UK taxation – (125)
Revaluation gains not taxable (198) (562)
Capital allowances (78) –
Losses utilised (129) –
Movement in tax losses carried forward 607 –
(Over)/under provision in prior years (1,773) 14
–––––––––– ––––––––––
Current tax (credit)/charge for the year (1,196) 1,316
–––––––––– ––––––––––
–––––––––– ––––––––––
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NOTES TO THE ACCOUNTS (continued)
9. Dividends
The directors do not recommend a final dividend in respect of the year ended 30 September 2016
(2015: 1.75 pence per share which amounted to £1,415,000).
10. Earnings Per Share
The calculation of earnings per ordinary share is based on the loss after tax attributable to equity
shareholders of £5,449,000 (2015: profit of £6,438,000) and on the number of shares in issue being
the weighted average number of shares in issue during the period of 78,920,377 (2015: 83,429,315).
There are no diluting amounts in either the current or prior years.
11. Property, Plant and Equipment
Group & Company Premises Office Furniture
Lease Equipment & Fittings Total
£’000 £’000 £’000 £’000
Cost
At 1 October 2014 157 75 95 327
Additions – – – –
–––––––––– –––––––––– –––––––––– ––––––––––
At 30 September 2015 and
1 October 2015 157 75 95 327
Additions – 14 – 14
–––––––––– –––––––––– –––––––––– ––––––––––
At 30 September 2016 157 89 95 341
–––––––––– –––––––––– –––––––––– ––––––––––
Depreciation/Amortisation
At 1 October 2014 112 63 90 265
Provided during the year 27 2 5 34
–––––––––– –––––––––– –––––––––– ––––––––––
At 30 September 2015 and
1 October 2015 139 65 95 299
Provided during the year 18 3 – 21
–––––––––– –––––––––– –––––––––– ––––––––––
At 30 September 2016 157 68 95 320
–––––––––– –––––––––– –––––––––– ––––––––––
Net book value at
30 September 2016 – 21 – 21
–––––––––– –––––––––– –––––––––– ––––––––––
–––––––––– –––––––––– –––––––––– ––––––––––
Net book value at
30 September 2015 18 10 – 28
–––––––––– –––––––––– –––––––––– ––––––––––
–––––––––– –––––––––– –––––––––– ––––––––––
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NOTES TO THE ACCOUNTS (continued)
12. Investment Properties
Group
Reverse
Long Lease
Freehold Leasehold Premiums Total
£’000 £’000 £’000 £’000
Valuation at 1 October 2014 136,672 20,996 672 158,340
Additions 728 95 – 823
Disposals (27,485) (1,050) – (28,535)
Reverse lease premium
amortisation – – (180) (180)
Movement on revaluation 2,637 105 – 2,742
–––––––––– –––––––––– –––––––––– ––––––––––
Valuation at
30 September 2015 112,552 20,146 492 133,190
Additions 1,446 2,226 – 3,672
Disposals (7,150) – – (7,150)
Lease incentive granted 80 – – 80
Reverse lease premium
amortisation – – (104) (104)
Movement on revaluation (538) 1,530 – 992
–––––––––– –––––––––– –––––––––– ––––––––––
Valuation at
30 September 2016 106,390 23,902 388 130,680
–––––––––– –––––––––– –––––––––– ––––––––––
–––––––––– –––––––––– –––––––––– ––––––––––
The historical cost of properties held at 30 September 2016 is £161,164,000 (2015: £164,890,000).
The properties were valued by Jones Lang LaSalle, independent valuers not connected with the Group,
at 30 September 2016 at market value in accordance with the Practice Statements contained in the
RICS Appraisal and Valuation Standards published by the Royal Institution of Chartered Surveyors
which conform to international valuation standards. The valuations are arrived at by reference to market
evidence of transaction prices and completed lettings for similar properties. The properties have been
valued individually and not as part of a portfolio and no allowance has been made for expenses of
realisation or for any tax which might arise. They assume a willing buyer and a willing seller in an arm’s
length transaction. The valuations reflect usual deductions in respect of purchaser’s costs and SDLT
as applicable at the valuation date. The independent valuer makes various assumptions including future
rental income, anticipated void cost, the appropriate discount rate or yield.
As at 30 September 2016, the Group has pledged £nil (2015: £95,530,000) of investment property
to secure Royal Bank of Scotland debt facilities, £89,955,000 (2015: £nil) of investment property to
secure Lloyds Bank, Jersey debt facilities and £33,260,000 (2015: £32,870,000) to secure Barclays
Bank PLC debt facilities. Further details of these facilities are provided in note 29.
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NOTES TO THE ACCOUNTS (continued)
12. Investment Properties (continued)
The property rental income earned from investment property, which is leased out under operating
leases amounted to £9,435,000 (2015: £11,441,000).
(Loss)/profit on sale of investment properties
30 Sep 16 30 Sep 15
£’000 £’000
Gross proceeds on sales of investment properties 6,955 31,335
Costs of sales (113) (364)
–––––––––– ––––––––––
Net proceeds on sales of investment properties 6,842 30,971
Book value (7,150) (28,535)
–––––––––– ––––––––––
(Loss)/profit on sale (308) 2,436
–––––––––– ––––––––––
–––––––––– ––––––––––
Sensitivity Analysis:
Movement in equivalent yield
If the equivalent yield compresses by 0.5% to 7.52% then the portfolio valuation increases by
approximately 7.3%. It reduces by approximately 6.4% if the equivalent yield increases by 0.5% to
8.52%.
Movement in ERV
If ERV’s increase by 5% then the portfolio valuation increases by approximately 4.4% whilst falling by
approximately 4.4% if ERV’s decrease by 5%.
Voids
If the void periods assumed in the valuation are decreased by 6 months then the portfolio valuation
would increase by approximately 1.7%. If void periods increase by 6 months then the portfolio
valuation would decrease by approximately 1.7%.
13. Investment Properties Under Construction
Investment properties under construction are freehold land and buildings representing investment
properties under development or construction and they amount to £9,476,000 (2015: £3,156,000)
as at 30 September 2016. These properties comprise landholdings for current or future development
as investment properties. This methodology has been adopted because the value of these properties is
dependent on a detailed knowledge of the planning status, the competitive position of the assets and
a range of complex development appraisals. The fair value of these properties rests in the planned
developments, and is difficult to estimate pending confirmation of designs and planning permission,
and hence has been estimated by the directors at cost as an approximation to fair value.
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NOTES TO THE ACCOUNTS (continued)
14. Investments
Joint Ventures
Investment in Joint Ventures
30 Sep 16 30 Sep 15
£’000 £’000
At 1 October 2015 6,660 6,087
Share of results of joint ventures (3) (19)
Investment in joint venture 218 592
Reclassify loan to joint venture 3,235 –
–––––––––– ––––––––––
At 30 September 2016 10,110 6,660
–––––––––– ––––––––––
–––––––––– ––––––––––
The Group has a 50% interest in three joint ventures, Conygar Stena Line Limited which is a property
development company, CM Sheffield Limited a property trading company and Roadking Holyhead
Limited a truck stop developer and operator.
Loans to Joint Ventures
30 Sep 16 30 Sep 15
£’000 £’000
Roadking Holyhead Limited – 3,410
–––––––––– ––––––––––
– 3,410
–––––––––– ––––––––––
–––––––––– ––––––––––
In accordance with IAS 39, the loans to Roadking Holyhead Limited, Conygar Stena Line Limited
and C M Sheffield Limited have not been disclosed separately on the balance sheet as the investments
in joint ventures at 30 September 2016 are net liabilities when the loans are excluded.
30 Sep 16 30 Sep 15
£’000 £’000
Conygar Stena Line Limited 7,733 7,406
Roadking Holyhead Limited 3,235 –
C M Sheffield Limited 2 2
–––––––––– ––––––––––
10,970 7,408
–––––––––– ––––––––––
–––––––––– ––––––––––
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NOTES TO THE ACCOUNTS (continued)
14. Investments (continued)
The following amounts represent the Group’s 50% share of the assets and liabilities, and results of the
joint ventures. They are included in the balance sheet and income statement:
Year ended Year ended
30 Sep 16 30 Sep 15
£’000 £’000
Assets
Current assets 10,203 10,158
–––––––––– ––––––––––
10,203 10,158
Liabilities
Current liabilities (93) (88)
–––––––––– ––––––––––
(93) (88)
–––––––––– ––––––––––
Net Assets 10,110 10,070
Operating loss (3) (19)
Finance income – –
–––––––––– ––––––––––
Loss before tax (3) (19)
Tax – –
–––––––––– ––––––––––
Loss after tax (3) (19)
–––––––––– ––––––––––
–––––––––– ––––––––––
There are no contingent liabilities relating to the Group’s interest in joint ventures, and no contingent
liabilities of the ventures themselves.
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NOTES TO THE ACCOUNTS (continued)
15. Fixed Asset Investments
Subsidiaries
Group Company
30 Sep 16 30 Sep 15 30 Sep 16 30 Sep 15
£’000 £’000 £’000 £’000
At 1 October 2015 – – 3,269 3,269
Write down investment in subsidiary
undertaking** – – (3,201) –
–––––––––– –––––––––– –––––––––– ––––––––––
At 30 September 2016 – – 68 3,269
–––––––––– –––––––––– –––––––––– ––––––––––
–––––––––– –––––––––– –––––––––– ––––––––––
Country of % of
Company name Principal activity registration Equity held
Conygar Holdings Ltd Holding Company England 100%
Martello Quays Limited Property trading and development England 100%
Conygar Wales PLC Holding Company England 100%*
Conygar Bedford Square Ltd Property trading and development England 100%*
Conygar Properties Ltd Property trading and development England 100%*
Conygar Developments Ltd Property trading and development England 100%*
Conygar Strand Ltd Property trading and development England 100%*
Conygar Hanover Street Ltd Property investment England 100%*
The Advantage Property Property investment Guernsey 100%*
Income Trust Ltd
TAPP Property Ltd Property investment Guernsey 100%*
TOPP Holdings Ltd Property investment Guernsey 100%*
TAPP Maidenhead Ltd Property investment Guernsey 100%*
TOPP Bletchley Ltd Property investment Guernsey 100%*
TOPP Property Ltd Property investment Guernsey 100%*
Conygar Stena Line Ltd Property trading and development England 50%*
CM Sheffield Ltd Property trading and development England 50%*
Roadking Holyhead Limited Property trading and development England 50%*
Conygar Haverfordwest Ltd Property trading and development England 100%*
Conygar Advantage Ltd Holding company Guernsey 100%*
Conygar Stafford Ltd Property investment England 100%*
Conygar Dundee Ltd Property investment England 100%*
Conygar St Helens Ltd Property investment England 100%*
Conygar Sunley Ltd Property investment England 100%*
Lamont Property Holdings Ltd Property investment Jersey 100%*
Lamont Property Acquisition Holding company Jersey 100%*
(Jersey) I Ltd
Lamont Property Acquisition Property investment Jersey 100%*
(Jersey) II Ltd
Conygar Cross Hands Ltd Property investment Jersey 100%*
Lamont Property Acquisition Property investment Jersey 100%*
(Jersey) IV Ltd
Lamont Property Acquisition Property investment Jersey 100%*
(Jersey) V Ltd
Lamont Property Acquisition Property investment Jersey 100%*
(Jersey) VII Ltd
Conygar Ynys Mon Ltd Property trading and development England 100%*
Conygar Haverfordwest Retail Ltd Dormant Jersey 100%*
Conygar Ashby Ltd Dormant Jersey 100%*
* Indirectly owned
** The Company’s investment in Martello Quay’s Limited which holds the group’s interest in the
development site at Pembroke Dock was fully written down as at 30 September 2016.
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NOTES TO THE ACCOUNTS (continued)
16. Goodwill
Group
30 Sep 16 30 Sep 15
£’000 £’000
At 1 October 3,173 3,173
Impairment in the year (3,173) –
–––––––––– ––––––––––
At 30 September – 3,173
–––––––––– ––––––––––
–––––––––– ––––––––––
The goodwill arose upon the acquisition of the non-controlling interests in Martello Quays Limited and
represented the excess of the consideration over the fair value of the identifiable net assets acquired. The
goodwill was wholly allocated to the development project within Martello Quays Limited, which was
considered to represent a single income and cash generating unit. As set out in the Chairman’s and Chief
Executive’s report, management analysis indicates that the net present value of the project is below the
carrying value at 30 September 2016 such that the goodwill has been fully impaired in the current year.
IFRS requires management to undertake an annual test for impairment of indefinite lived assets, such
as goodwill, and to test for impairment if events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Impairment testing is an area involving management
judgment, requiring assessment as to whether the carrying value of the assets can be supported by the
net present value of future cash flows derived from such assets using cash flow projections which have
been discounted at an appropriate rate. In calculating the net present value of the future cash flows,
certain assumptions are required to be made in respect of highly uncertain matters including
management’s expectations of:
– Timing and quantum of future capital expenditure;
– Timing and quantum of future revenue streams; and
– The selection of discount rates to reflect the risks involved.
The Group prepares and approves formal five year forecasts for Martello Quays Limited which are
used in the value in use calculations. Five years is considered to be the optimum period for a meaningful
forecast and takes into account available sources of both internal and external information.
The Group’s review includes the key assumptions related to sensitivity in the cash flow projections.
The impairment review is based upon value in use calculations. The period of review is five years and
it is assumed that no growth occurs over the period. A range of pre-tax risk adjusted discount rates
(5-15%) were used in order to reflect inherent uncertainties and to produce a sensitivity analysis.
Key assumptions used in value in use calculations
– Valuation of completed construction
The valuation of the completed construction is based upon current knowledge of the local market
utilising both internal and external sources of information and evidence.
– Budgeted capital expenditure
The cash flow forecasts for capital expenditure are based upon on past experience and estimates
provided from both internal and external sources.
– Pre-tax risk adjusted discount rate
The discount rate applied to the cash flows is generally based upon the risk free rate for ten year
government bonds adjusted for a risk premium to reflect the systematic risk of the project, likely
cost of funding and underlying uncertainties.
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NOTES TO THE ACCOUNTS (continued)
17. Property Inventories
Group Company
30 Sep 16 30 Sep 15 30 Sep 16 30 Sep 15
£’000 £’000 £’000 £’000
Properties held for resale or development 30,739 33,373 8,558 7,962
–––––––––– –––––––––– –––––––––– ––––––––––
–––––––––– –––––––––– –––––––––– ––––––––––
18. Trade and Other Receivables
Group Company
30 Sep 16 30 Sep 15 30 Sep 16 30 Sep 15
£’000 £’000 £’000 £’000
Trade receivables 834 1,434 – –
Provision for doubtful debts (48) (217) – –
–––––––––– –––––––––– –––––––––– ––––––––––
786 1,217 –
Amounts owed by group undertakings – – 99,428 131,700
Other receivables 845 1,194 151 589
Prepayments and accrued income 2,044 2,558 205 58
–––––––––– –––––––––– –––––––––– ––––––––––
3,675 4,969 99,784 132,347
–––––––––– –––––––––– –––––––––– ––––––––––
–––––––––– –––––––––– –––––––––– ––––––––––
The directors consider that the carrying amount of trade and other receivables approximates to their
fair value due to the short term nature of these financial assets.
19. Trade and Other Payables
Group Company
30 Sep 16 30 Sep 15 30 Sep 16 30 Sep 15
£’000 £’000 £’000 £’000
Amounts owed to group undertakings – – 34,515 32,997
Social security and payroll taxes – – 115 –
Trade payables 976 2,805 73 820
Accruals and deferred income 3,287 2,565 718 55
–––––––––– –––––––––– –––––––––– ––––––––––
4,263 5,370 35,421 33,872
–––––––––– –––––––––– –––––––––– ––––––––––
–––––––––– –––––––––– –––––––––– ––––––––––
The directors consider that the carrying amounts of the trade and other payables approximate to their
fair value due to the short period of repayment.
20. Bank Loans
Group Company
30 Sep 16 30 Sep 15 30 Sep 16 30 Sep 15
£’000 £’000 £’000 £’000
Bank loans 56,435 38,151 – –
Debt issue costs (890) (660) – –
–––––––––– –––––––––– –––––––––– ––––––––––
55,545 37,491 – –
–––––––––– –––––––––– –––––––––– ––––––––––
–––––––––– –––––––––– –––––––––– ––––––––––
Details of the financial liabilities are given in note 29.
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NOTES TO THE ACCOUNTS (continued)
21. Zero Dividend Preference Shares
Year ended Year ended
30 Sep 16 30 Sep 15
£’000 £’000
Balance at start of year 32,471 30,621
Share issue costs amortised 134 134
Accrued capital 1,810 1,716
–––––––––– ––––––––––
Balance at end of year 34,415 32,471
–––––––––– ––––––––––
–––––––––– ––––––––––
The Group issued 30,000,000 zero dividend preference shares (‘ZDP shares’) at 100 pence per share.
The ZDP shares have an entitlement to receive a fixed cash amount on 9 January 2019, being the
maturity date, but do not receive any dividends or income distributions. Additional capital accrues to
the ZDP shares on a daily basis at a rate equivalent to 5.5% per annum, resulting in a final capital
entitlement of 130.7 pence per share. The ZDP shares were listed on the London Stock Exchange on
10 January 2014.
During the year, the Group has accrued for £1,810,000 of additional capital. The total amount
repayable at maturity is £39,210,000.
The ZDP shares do not carry the right to vote at general meetings of the Group, although they carry
the right to vote as a class on certain proposals which would be likely to materially affect their position.
In the event of a winding-up of Conygar ZDP PLC, the capital entitlement of the ZDP shares (except
for any undistributed revenue profits) will rank ahead of ordinary shares but behind other creditors of
Conygar ZDP PLC.
22. Share Capital
Authorised share capital:
30 Sep 16 30 Sep 15
£ £
140,000,000 (2015: 140,000,000) Ordinary shares of £0.05 each 7,000,000 7,000,000
––––––––––––– –––––––––––––
––––––––––––– –––––––––––––
Allotted and called up:
Amounts recorded as equity:
30 Sep 16 30 Sep 15
No £’000 No £’000
Ordinary shares of £0.05 each 99,714,123 4,985 99,714,123 4,985
–––––––––––––– –––––––––––– –––––––––––––– ––––––––––––
–––––––––––––– –––––––––––– –––––––––––––– ––––––––––––
23. Treasury Shares
In December 2010, the Group began a share buyback programme and during the year ended
30 September 2016 purchased 5,299,819 (2015: 4,372,350) shares on the open market at a cost of
£8,872,556 (2015: £7,937,062). The 22,482,688 (2015: 17,182,869) shares were held in treasury as
at 30 September 2016.
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NOTES TO THE ACCOUNTS (continued)
24. Share Based Payments
Details of options granted over the Company’s share capital are given in the Directors’ Remuneration
Report on page 23. No options were granted in either the current or prior year.
The Group and Company recognised total expenses of £nil (2015: £nil) in relation to equity settled
share-based payment transactions.
25. Deferred Tax
Deferred tax liabilities are recognised in the accounts as follows:
Group 30 Sep 16 30 Sep 15
£’000 £’000
Revaluation surplus 1,902 –
–––––––––– ––––––––––
–––––––––– ––––––––––
Deferred tax on the revaluation surplus is calculated on the basis of the chargeable gains that would
crystallise on the sale of the property portfolio at each balance sheet date. The calculation takes account
of any available indexation on the historic cost of the properties.
26. Commitments
Group as lessee:
At 30 September 2016, the Group and Company had outstanding commitments for future minimum
lease payments under non-cancellable operating leases, which fall due as follows:
30 Sep 16 30 Sep 15
£’000 £’000
Within one year 180 90
In the second to fifth years inclusive 311 –
–––––––––– ––––––––––
491 90
–––––––––– ––––––––––
–––––––––– ––––––––––
Group as lessor:
In addition, the Group holds retail, office, industrial and leisure buildings as investment properties
which are let to third parties. These are non-cancellable leases and the income profile based upon the
unexpired lease length was as follows:
30 Sep 16 30 Sep 15
£’000 £’000
Less than one year 10,553 9,504
Between one and five years 21,723 24,088
Over five years 10,926 14,475
–––––––––– ––––––––––
43,202 48,067
–––––––––– ––––––––––
–––––––––– ––––––––––
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NOTES TO THE ACCOUNTS (continued)
27. Related Party Transactions
The Company has made advances to, and received advances from, the following subsidiaries in order
to provide both long term and additional working capital funding. All amounts are repayable upon
demand, are non-interest bearing, with the exception of loans to Conygar Holdings Limited, and will
be repaid from the trading activities of those subsidiaries. A loan provided to Martello Quays Limited
of £1,643,000 was fully provided for in the year, no other provisions have been made against the
outstanding amounts.
30 Sep 16 30 Sep 15
£’000 £’000
Subsidiaries
Conygar Holdings Limited 63,217 92,118
Conygar Haverfordwest Limited 22,167 24,264
Conygar Strand Limited 2,939 2,908
Martello Quays Limited – 1,573
Conygar Cross Hands Limited 110 –
Conygar Advantage Limited 25 20
Conygar Wales PLC (50) (30)
Conygar Bedford Square – (447)
Conygar ZDP PLC (34,465) (32,521)
–––––––––– ––––––––––
53,943 87,885
–––––––––– ––––––––––
–––––––––– ––––––––––
30 Sep 16 30 Sep 15
£’000 £’000
Joint Ventures
Conygar Stena Line Limited 7,733 7,406
C M Sheffield Limited 2 2
Roadking Holyhead Limited 3,235 3,410
–––––––––– ––––––––––
10,970 10,818
–––––––––– ––––––––––
–––––––––– ––––––––––
The loans to Conygar Stena Line Limited may be analysed as:
30 Sep 16 30 Sep 15
£’000 £’000
Secured interest bearing loan 4,713 4,386
Unsecured non-interest bearing shareholder loan 3,020 3,020
–––––––––– ––––––––––
7,733 7,406
–––––––––– ––––––––––
–––––––––– ––––––––––
During the year, the Company received a management fee from Conygar Stena Line Limited of
£50,000 (2015: £50,000) in respect of management services and intercompany interest of £184,000
(2015: £160,000) due on the secured interest bearing loan.
During the year, the Company received intercompany interest of £355,000 (2015: £674,000) from
Conygar Holdings Limited.
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NOTES TO THE ACCOUNTS (continued)
28. Profit of Parent Company
As permitted by Section 408 of the Companies Act 2006, the profit and loss account of the Company
is not presented as part of these financial statements. The parent company’s loss for the year amounts
to £8,121,000 (2015: loss of £844,000).
29. Financial Instruments
Treasury Policies
The objective of the Group’s treasury policies is to manage the Group’s financial risk, secure cost
effective funding for the Group’s operations and to minimise the adverse effects of fluctuations in the
financial markets on the value of the Group’s financial assets and liabilities, on reported profitability
and on the cash flows of the Group.
The Group finances its activities with a combination of bank loans, cash and short term deposits. Other
financial assets and liabilities, such as trade receivables and trade payables, arise directly from the
Group’s operations. The Group may also enter into derivative transactions to manage the interest rate
risk arising from the Group’s operations and its sources of finance. The main risks associated with the
Group’s financial assets and liabilities are set out below, together with the policies currently applied by
the Board for their management. Derivative instruments may be used to change the economic
characteristics of financial instruments in accordance with the Group’s treasury policies. Interest rate
caps amount to an economic hedge of between £36.1 million and £37.0 million (2015: £55.6 million)
of the total loan drawdowns of £56.4 million (2015: £38.2 million) for cash flows to 27 April 2021,
but no hedge accounting is used.
The management of cash and similar instruments is monitored weekly with summary cash statements
produced on a fortnightly basis and discussed regularly in management and board meetings. The
approach is to provide sufficient liquidity to meet the requirements of the business in terms of funding
developments and potential acquisitions. Surplus funds are invested with a broad range of institutions
with a range of maturities up to a maximum of 180 days. At any point in time, at least half of the
Group’s cash is held on instant access or short term deposit of less than 30 days.
Market Risk
The Group is exposed to market risk primarily related to interest rates. These exposures are actively
monitored.
As the Group’s assets and liabilities are all denominated in Pounds Sterling there is currently no
exposure to currency risk.
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NOTES TO THE ACCOUNTS (continued)
29. Financial Instruments (continued)
Interest Rate Risk
Financial Liabilities
The Group’s policy is to manage the cost of borrowing using variable rate debt. Whilst floating rate
borrowings are not exposed to changes in fair value, the Group is exposed to cash flow risk as costs
increase if market rates rise. The Group’s policy is to use derivative financial instruments to mitigate
at least 50% of this risk in order to achieve a sensible and appropriate level of interest rate protection
whilst maintaining flexibility to match the commercial trading strategy.
At 30 September 2016, after taking into account interest rate swaps and caps, 66% (2015: 100%) of
the Group’s bank borrowings were at a fixed rate of interest.
The interest rate profile of the Group bank borrowings at 30 September 2016 was as follows:
Interest
Rate Maturity 30 Sep 16 30 Sep 15
£’000 £’000
Lloyds Bank, Jersey (1) BOE base +1.9% 2-5 years 48,100 –
Barclays (2) LIBOR +3.5% Less than 1 year 8,335 8,335
Royal Bank of Scotland (TAPP)(3) LIBOR +3% n/a – 20,174
Royal Bank of Scotland (TOPP)(3) LIBOR +3.5% n/a – 9,642
––––––––– –––––––––
56,435 38,151
––––––––– –––––––––
––––––––– –––––––––
(1) Senior bank facility repayable 27 April 2021.
(2) Senior bank facility repaid 26 October 2016.
(3) Senior bank facilities repaid 28 April 2016.
In addition to the bank debt, the Group has a financial liability of £34.4 million relating to 30,000,000
zero dividend preference shares (“ZDP Shares”) which were issued at 100 pence per share.
The ZDP shares have an entitlement to receive a fixed cash amount on 9 January 2019, being the
maturity date, but do not receive any dividends or income distributions. Additional capital accrues to
the ZDP shares on a daily basis at a rate equivalent to 5.5% per annum, resulting in a final capital
entitlement of 130.7 pence per share.
During the year the Group has accrued for £1,810,000 of additional capital. The total amount
repayable at maturity is £39,210,000.
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NOTES TO THE ACCOUNTS (continued)
29. Financial Instruments (continued)
Financial Assets
The interest rate profile of the Group’s cash and derivatives at the balance sheet date was as follows:
30 Sep 16 30 Sep 15
£’000 £’000
Fixed rate – –
Floating rate 63,662 57,386
–––––––––– ––––––––––
63,662 57,386
–––––––––– ––––––––––
–––––––––– ––––––––––
The interest rate profile of the Company’s cash and derivatives at the balance sheet date was as follows:
30 Sep 16 30 Sep 15
£’000 £’000
Fixed rate – –
Floating rate 37,902 24,230
–––––––––– ––––––––––
37,902 24,230
–––––––––– ––––––––––
–––––––––– ––––––––––
Floating rate financial assets comprise cash and short term deposits at call and money market rates for
up to thirty days and institutional cash funds.
Credit Risk
The risk of financial loss due to a counterparty’s failure to honour its obligations arises principally in
connection with property leases, the investment of surplus cash and transactions where the Group sells
properties with an element of deferred consideration.
Tenant rent payments are monitored regularly and appropriate action is taken to recover monies owed
or if necessary to terminate the lease. Deferred consideration terms are only agreed with counterparties
approved by the Board or where some additional security is available, and there were none as at 30
September 2016 (2015: £nil).
The Group policy has been to invest funds and enter into derivative transactions with a broad range
of institutions having investment grade low risk credit ratings and a strong or superior ability to repay
short term debt obligations. The unprecedented credit and banking market disruption in recent years
had a significant impact upon the ability to rely upon either credit ratings or the ability of financial
institutions to honour their commitments and the widespread nature of the financial crisis introduced
considerable uncertainty into the process. As at 30 September 2016, the Group had a single balance
of £67,000 (2015: £74,000) where the counter-party had failed to honour a notice deposit and a full
impairment provision has been recorded against the balance.
There are no other receivables which are past due but not impaired.
Liquidity Risk
The Group’s objective is to maintain a balance between continuity of funding and flexibility through
the use of bank loans secured on the Group’s properties. The Group is exposed to liquidity risk should
it encounter difficulties in realising assets mainly through the sale of investment properties. However,
the Group maintains a prudent approach to financing and cash flow such that the adverse impact of
this can be mitigated.
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NOTES TO THE ACCOUNTS (continued)
29. Financial Instruments (continued)
Loans
As at 30 September 2016, TAPP Property Limited, TOPP Property Limited, TOPP Bletchley Limited,
Lamont Property Acquisition (Jersey) I Limited, Lamont Property Acquisition (Jersey) II Limited and
Lamont Property Acquisition (Jersey) IV Limited (“the borrowers”) jointly maintained a facility with
Lloyds Bank, Jersey of £48,100,000 (2015: £nil) under which £48,100,000 (2015: £nil) had been
drawn down. This facility is repayable on or before 27 April 2021 and is secured by fixed and floating
charges over the assets of the borrowers. The facility is subject to a maximum loan to value covenant
of 65%, a historical interest cover ratio covenant of 200% and a historical debt service cover ratio of
110%.
On 28 April 2016, TAPP Property and TOPP Property repaid the outstanding balances of their facilities
with the Royal Bank of Scotland PLC of £25,931,000 (2015: £29,816,000).
As at 30 September 2016, Conygar Dundee Limited, Conygar Hanover Street Limited, Conygar
Stafford Limited and Conygar St Helens Limited jointly maintained a facility with Barclays Bank PLC
of up to £8,335,000 (2015: £8,335,000) of which £8,335,000 (2015: £8,335,000) had been drawn
down. This facility was repayable on or before 21 November 2016 and was secured by fixed and floating
charges over the assets of Conygar Dundee Limited, Conygar Hanover Street Limited, Conygar
Stafford Limited and Conygar St Helens Limited. The facility was subject to a maximum loan to value
covenant of 52% (2015: 52%) and an interest cover ratio covenant of 225%. As set out in the
Chairman’s and Chief Executive’s statement, the loan was repaid in full on 26 October 2016.
Price Risk
The Group’s exposure to changing market prices on the value of financial instruments may have an
impact on the carrying value of financial instruments and would arise principally as a result of entering
into swaps or similar transactions to fix interest rates on the Group’s borrowings. The Group’s policies
for managing this risk are to control the levels of fixed rate debt as set out under interest rate risk
above.
Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern in order to provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital.
While the Group does not have a formally approved gearing ratio, the objective above is actively
managed through the direct linkage of borrowings to specific property. The Group seeks to ensure that
secured borrowing does not exceed 70% of the current market value of such property.
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NOTES TO THE ACCOUNTS (continued)
29. Financial Instruments (continued)
Fair Values of Financial Assets and Financial Liabilities
The fair values of all the Group’s financial assets and liabilities are set out below:
Book Value Book Value Fair Value Fair Value
30 Sep 2016 30 Sep 2015 30 Sep 2016 30 Sep 2015
£’000 £’000 £’000 £’000
Financial Assets
Cash 63,662 57,386 63,662 57,386
Loans to joint ventures 10,970 10,818 10,970 10,818
Interest rate derivatives 44 37 44 37
Financial Liabilities
Floating rate borrowings 56,435 38,151 56,435 38,151
Fixed rate borrowings 34,719 32,909 34,719 32,909
The fair values of all the Company’s financial assets and liabilities are set out below:
Book Value Book Value Fair Value Fair Value
30 Sep 2016 30 Sep 2015 30 Sep 2016 30 Sep 2015
£’000 £’000 £’000 £’000
Financial Assets
Cash 37,902 24,230 37,902 24,230
Loans to joint ventures 10,970 10,818 10,970 10,818
Derivative Financial Instruments
Market Market
Value at Value at
Protected 30 Sep 2016 30 Sep 2015
rate % Expiry £’000 £’000
£37 million
(2015: £37 million) cap 2.00 (2015: 2.00) Feb 2018 – 52
£36.1 million (2015: n/a) cap* 2.50 (2015: n/a) Apr 2021 44 –
£nil (2015: £4.3 million) swap n/a (2015: 1.055) n/a – (16)
£nil (2015: £10.3 million) cap n/a (2015: 0.75) n/a – 1
–––––––––– ––––––––––
44 37
–––––––––– ––––––––––
–––––––––– ––––––––––
* Effective date 5 February 2018
The valuation of the swaps was provided by JC Rathbone Associates Limited, is a tier 2 valuation and
represents the change in fair value since execution. The fair value is derived from the present value of
the future cash flows discounted at rates obtained by means of the current yield curve appropriate for
those instruments.
The fair value of the Group’s trade debtors and other receivables and trade creditors and other payables
is not considered to vary from historic cost due to the short term nature of these financial assets and
liabilities. As such, they are excluded from the disclosure.
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INVESTMENT PROPERTY PORTFOLIO
for the year ended 30 September 2016
Property Address
Total Area (sq ft)
Industrial
Blantyre
Unit B Watt Place, Hamilton International Technology Park, Blantyre
Kettering
Travis Perkins/Kettering Tiles, Linnell Way
Livingston
3/3a Baird Road, Kirkton Campus
Livingston
Development Site, Kirkton Campus
Mochdre
Mochdre Commerce Park, Parc Masnach
Stratford Upon Avon
Swan Development, Avenue Farm Industrial Estate
Witham
3, 16 and 18 Freebournes Road
Leisure
Dundee
Kingscourt Leisure Complex, Douglas Road
Offices
Aberdeen
Aker Village, Kirkhill Industrial Estate
Ashby de la Zouch
Ashby Park, Ashby de la Zouch
Dundee
Compass House, Dundee
Farnborough
Brennan House, Farnborough Aerospace Centre
Fleet
Integration House, Ancells Business Park, Rye Close
Fleet
Waterfront Business Park, Fleet Road
Lincoln
Witham Park House, Lincoln
Livingston
1 Garbett Road, Kirkton Campus
63
34,338
18,329
13,752
–
173,450
33,965
145,902
87,360
58,826
138,342
30,342
30,010
11,679
30,342
62,356
5,032
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The Conygar Investment Company PLC
INVESTMENT PROPERTY PORTFOLIO (continued)
for the year ended 30 September 2016
Total Area (sq ft)
Offices (continued)
Livingston
6 Fleming Road, Kirkton Campus
Northampton
Charles House, Northampton
Reading
AdVantage Reading, Castle Street
Swindon
Pagoda Park, Westmead Drive
Warrington
Kelvin II, Kelvin Close, Birchwood Park
Warrington
The Links, Kelvin Close
Welwyn Garden City
Units 3-6 Silver Court, Watchmead
Retail
Ayr
156 and 158 – 160 High Street
Ayr
52/56 Newmarket Street
Bletchley
The Brunel Centre
Felixstowe
York House, 96 – 102a Hamilton Road
Rugeley
Shrewsbury Arms Shopping Mall, High Street
St Helens
1 Cotham Street, St Helens
Wolverhampton
Network House, Wolverhampton
Retail Warehouse
Birmingham
Trident Retail Park
10,108
28,213
24,915
41,112
50,553
26,194
29,756
8,601
10,717
96,640
19,545
9,633
41,619
20,171
29,485
Coventry
14,888
Halfords, 36 Foleshill Road
––––––––––––––––
Total Area
1,336,175
––––––––––––––––
––––––––––––––––
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The Conygar Investment Company PLC
GLOSSARY OF TERMS
AIM
EPRA
EPRA EPS
EPRA NAV
EPS
Equivalent Yield
Net Initial Yield
NAV
Reversionary Yield
Conygar
TAP
Loan to Value
PBT
UK
ERV
NNNAV or Triple Asset Value
Passing Rent
Tenant Break
Lease Re-gear
The AIM market of the London Stock Exchange PLC
European Public Real Estate Association
A measure of earnings per share designed by EPRA to present
underlying earnings from core operating activities
A measure of net asset value designed by EPRA presenting net
asset value excluding the effects of fluctuations in value in
instruments that are held for long term benefit, net of deferred tax
Earnings per share, calculated as the earnings for the period after
tax attributable to members of the parent Company divided by
the weighted average number of shares in issue in the period
The constant capitalisation rate which, if applied to all cash flows
from an investment property, equates to the market rent
Annual net rents expressed as a percentage of the investment
property valuation
Net asset value
The anticipated yield which the Net Initial Yield will rise to once
the rent reaches the ERV
The Conygar Investment Company PLC
The Advantage Property Income Trust Limited
The amount of borrowing divided by the value of investment
property expressed as a percentage
Profit before taxation
United Kingdom
Estimated Rental Value being the open market rent as estimated
by the Company’s valuers
A measure of net asset value taking into account asset
revaluations, the fair value of debt and any associated tax effects
The annual gross rental income excluding the effects of lease
incentives
An option in a lease for a tenant to terminate that lease early
A mutual re-negotiation of a lease between landlord and tenant
prior to a lease expiry date
Average Unexpired Lease Length The average unexpired lease term expressed in years weighted by
rental income
Rent-Free Period
A lease incentive offering the tenant a period without paying rent
Vacancy Rate
The estimated rental value of vacant properties expressed as a
percentage of the total estimated rental value of the portfolio
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The Conygar Investment Company PLC
(Company Number 4907617)
(the “Company”)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at the
offices of Gowling WLG (UK) LLP, 4 More London Riverside, London SE1 2AU on 7 February 2017
at 4.00pm to consider and, if thought fit, pass the following resolutions:
Resolutions 1 to 7 are proposed as ordinary resolutions and resolutions 8 to 9 are proposed as
special resolutions.
ORDINARY BUSINESS
Ordinary Resolutions
1 To receive and adopt the Company’s annual accounts for the financial year ended 30 September
2016 together with the directors’ report, and the auditors’ report on those accounts.
2 To approve the directors’ remuneration report for the financial year ended 30th September 2016.
3 To re-appoint Rees Pollock as auditors of the Company to hold office from the conclusion of this
meeting to the conclusion of the next meeting at which accounts are laid before the Company.
4 To authorise the directors of the Company (the “Directors”) to agree the remuneration of the
auditors.
5 To elect the following Director:
Ross Hillier McCaskill
6 To re-appoint the following Director who retires by rotation:
Michael Derek Wigley
SPECIAL BUSINESS
7 (a)
That the Directors be and are generally and unconditionally authorised for the purposes of
section 551 of the Companies Act 2006 (the “Act”) to exercise all the powers of the
Company to allot shares in the Company and grant rights to subscribe for, or convert any
security into shares in the Company provided that this authority shall be limited to the
allotment of up to an aggregate nominal amount of £400,000.00 (comprising 8,000,000
Ordinary Shares) and provided that this authority (unless renewed, varied or revoked by the
Company in a general meeting) is for a period expiring on the earlier of (i) the conclusion
of the next Annual General Meeting of the Company or (ii) the expiry of 15 months from
the passing of this resolution; and
(b)
the Company may, before such expiry of this authority, make an offer or agreement which
would or might require the shares to be allotted or rights to subscribe for, or convert any
security into shares to be granted after such expiry and the Directors may allot shares or
grant rights to subscribe for, or convert any security into shares in pursuance of such offer
or agreement notwithstanding that the authority conferred by this resolution has expired.
This authority is in substitution for all subsisting authorities to allot any shares in the Company
and to grant rights to subscribe for or convert any security into shares in the Company to the extent
unused.
Special Resolutions
8 That subject to the passing of resolution 7 above, the Directors be and are hereby generally and
unconditionally empowered pursuant to sections 570(1) and 573 of the Act to allot equity
securities (within the meaning of section 560(1) of the Act) wholly for cash pursuant to the
authority conferred by resolution 7 and/or by way of a sale of treasury shares as if section 561(1)
of the Act did not apply to any such allotment, provided that this power shall be limited to the
allotment of equity securities:
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The Conygar Investment Company PLC
NOTICE OF ANNUAL GENERAL MEETING (continued)
(a)
in connection with an offer of such securities by way of rights to holders of Ordinary Shares
in proportion (as nearly as may be practicable) to their respective holdings of such shares,
but subject to such exclusions or other arrangements as the directors may deem necessary
or expedient in relation to treasury shares, fractional entitlements or any legal or practical
problems under the laws of any territory, or the requirements of any regulatory body or stock
exchange;
(b)
otherwise than pursuant to sub-paragraph (a) above up to an aggregate nominal amount of
£400,000.00 (comprising 8,000,000 Ordinary Shares);
and this power (unless renewed, varied or revoked by the Company in a general meeting) shall
expire on the earlier of (i) the conclusion of the next Annual General Meeting of the Company after
the passing of this resolution and (ii) the date falling 15 months after the date of the passing of this
resolution, save that the Company may, before such expiry make an offer or agreement which
would or might require equity securities to be allotted, or treasury shares to be sold after such
expiry and the Directors may allot equity securities, or sell treasury shares, in pursuance of any
such offer or agreement notwithstanding that the power conferred by this resolution has expired.
The authority granted by this resolution shall replace all existing authorities previously granted to
the Directors to allot equity securities for cash or by way of a sale of treasury shares as if section
561 (1) of the Act did not apply.
9 That the Company be and is generally and unconditionally authorised for the purposes of section
701(1) of the Act to make one or more market purchases (within the meaning of section 693(4) of
the Act) on the London Stock Exchange of ordinary shares of £0.05 each (each an “Ordinary
Share”) the Company provided that:
(a)
the maximum aggregate number of Ordinary Shares authorised to be purchased is
10,824,215 (representing approximately 15% of the Company’s issued ordinary share
capital);
(b)
the minimum price (excluding expenses) which may be paid for such shares is £0.05 per
share;
(c)
(d)
(e)
the maximum price (excluding expenses) which may be paid for an Ordinary Share shall not
be more than an amount equal to 105% of the average of the middle market quotations for
an Ordinary Share as derived from The London Stock Exchange Daily Official List for the
five business days immediately preceding the date on which the Ordinary Share is
purchased;
unless previously renewed, varied or revoked, the authority conferred shall expire at the
conclusion of the Company’s next Annual General Meeting or 12 months from the date of
passing this resolution, if earlier; and
the Company may make a contract or contracts to purchase Ordinary Shares under the
authority conferred prior to the expiry of such authority which will or may be executed
wholly or partly after the expiry of such authority and may make a purchase of Ordinary
Shares in pursuance of any such contract or contracts.
Registered Office
Fourth Floor
110 Wigmore Street
London
W1U 3RW
By Order of the Board
R H McCaskill
Company Secretary
15 December 2016
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The Conygar Investment Company PLC
NOTICE OF ANNUAL GENERAL MEETING (continued)
Notes
Entitlement to attend and vote
1. In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, only those members registered in the
Company’s register of members at:
(cid:129) 4.00pm on 3 February 2017; or
(cid:129) if this meeting is adjourned, at 4.00pm on the day two days prior to the adjourned meeting,
shall be entitled to attend and vote at the Meeting. Changes to the register of members after the relevant deadline shall be
disregarded in determining the rights of any person to attend and vote at the Meeting.
2. Only the holders of Ordinary Shares registered in the Company shall be entitled to attend and vote at the Meeting. Holders
of ZDP shares have the right to receive notice of this meeting pursuant to the Company’s Articles of Association but do not
have any right to attend, speak and vote at any general meeting of the Company unless the business of the meeting includes
any resolutions to vary, modify or abrogate any of the special rights attached to ZDP shares.
Appointment of proxies
3. As a member of the Company, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and
vote at the Meeting and you should have received a proxy form with this Notice of Meeting. You can only appoint a proxy
using the procedures set out in these notes and the notes to the proxy form.
4. A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details of how to
appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the
proxy form. If you wish your proxy to speak on your behalf at the Meeting you will need to appoint your own choice of
proxy (not the Chairman) and give your instructions directly to them.
5. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You
may not appoint more than one proxy to exercise rights attached to any one share.
6. If you do not give your proxy an indication of how to vote on any resolution, your proxy will vote or abstain from voting at
his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which
is put before the Meeting. A vote withheld is not a vote in law, which means that the vote will not be counted in the
calculation of votes for or against the resolution.
Appointment of proxy using hard copy proxy form
7. The notes to the proxy form explain how to direct your proxy how to vote on each resolution or withhold their vote.
To appoint a proxy using the proxy form, the form must be:
(cid:129) completed and signed;
(cid:129) sent or delivered to the Company at Share Registrars Ltd, The Courtyard, 17 West Street, Farnham, Surrey,
GU9 7DR or;
(cid:129) scanned and emailed to proxies@shareregistrars.uk.com or;
(cid:129) faxed to 01252 719232 and;
(cid:129) received by the Company no later than 4.00pm on 3 February 2017.
In the case of a member which is a company, the proxy form must be executed under its common seal or signed on its
behalf by an officer of the company or an attorney for the company.
Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power
or authority) must be included with the proxy form.
8. If a member appoints a proxy or proxies and then decides to attend the Meeting in person and vote using his poll card, then
the vote in person will override the proxy vote(s). If the vote in person is in respect of the member’s holding, then all proxy
votes will be disregarded. If, however, the member votes at the meeting in respect of less than the member’s entire holding,
then if the member indicates on his polling card that all proxies are to be disregarded, that shall be the case, but if the
member does not specifically revoke proxies, then the vote in person will be treated in the same way as if it were the last
received proxy and earlier proxies will only be disregarded to the extent that to count them would result in the number of
votes being cast exceeding the member’s entire holding. If you do not have a proxy form and/or believe that you should have
one or if you require additional forms, please contact Share Registrars Ltd.
Appointment of proxy by joint members
9. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment
submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint
holders appear in the Company’s register of members in respect of the joint holding (the first-named being the most senior).
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The Conygar Investment Company PLC
NOTICE OF ANNUAL GENERAL MEETING (continued)
Changing proxy instructions
10. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the
cut-off time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended
proxy appointment received after the relevant cut-off time will be disregarded. Where you have appointed a proxy using the
hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact Share
Registrars Ltd. If you submit more than one valid proxy appointment, the appointment received last before the latest time
for the receipt of proxies will take precedence.
Termination of proxy appointments
11. In order to revoke a proxy instruction you will need to inform the Company using the following method:
(cid:129) by sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Share
Registrars Limited (Proxies), The Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR. In the case of a
member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by
an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the
revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation
notice.
The revocation notice must be received by Share Registrars Ltd no later than 4.00pm on 3 February 2017.
If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the
paragraph directly below, your proxy appointment will remain valid.
Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you have appointed a
proxy and attend the Meeting in person, your proxy appointment will automatically be terminated.
Communication
12. Except as provided above, members who have general queries about the Meeting should email the Company Secretary on
rossmccaskill@conygar.com (no other methods of communication will be accepted).
You may not use any electronic address provided either:
(cid:129) in this notice of general meeting; or
(cid:129) any related documents (including the proxy form),
to communicate with the Company for any purposes other than those expressly stated.
Appointment of proxies through CREST
13. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may
do so for the Annual General Meeting and any adjournment(s) thereof by using the procedures described in the CREST
Manual (available from https://www.euroclear.com/site/public/EUI).
CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a
voting service provider(s) should refer to their CREST sponsor or voting service provider(s), who will be able to take the
appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST
message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with CRESTCO Limited’s
specifications and must contain the information required for such instructions, as described in the CREST Manual.
The message, regardless of whether it relates to the appointment of a proxy or to an amendment to the instruction given to
a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent 7RA36 by
the latest time(s) for receipt of proxy appointments specified above. For this purpose, the time of receipt will be taken to
be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the
issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time,
any change of instructions to proxies appointed through CREST should be communicated to the appointee through other
means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that CRESTCO
Limited does not make available special procedures in CREST for any particular messages. Normal system timings and
limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST
member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has
appointed a voting service provider(s), to procure that his or her CREST sponsor or voting service provider(s) take(s)) such
action as shall be necessary to ensure that a message is transmitted by means of CREST by any particular time. In this
connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in
particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001 (as amended).
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The Conygar Investment Company PLC
NOTICE OF ANNUAL GENERAL MEETING (continued)
If a corporation is a member of the Company, it may by resolution of its directors or other governing body authorise one
or more persons to act as its representative or representatives at the Meeting and any such representative or representatives
shall be entitled to exercise on behalf of the corporation all the powers that the corporation could exercise if it were an
individual member of the Company. Corporate representatives should bring with them either an original or certified copy
of the appropriate board resolution or an original letter confirming the appointment, provided it is on the corporation’s
letterhead and is signed by an authorised signatory and accompanied by evidence of the signatory’s authority.
Issued shares and total voting rights
14. As at 15 December 2016 (being the last business day prior to the publication of this Notice) the Company’s issued share
capital consists of 72,161,435 ordinary shares, carrying one vote each. Therefore the total voting rights in the Company as
at 15 December 2016 are 72,161,435.
Documents on display
15. Copies of the Executive Directors’ services contracts with the Company and any of its subsidiary undertakings and letters
of appointment of the Non-Executive Directors are available for inspection at the registered office of the Company during
the usual business hours on any weekday (Saturday, Sunday or public holidays excluded) from the date of this notice until
the conclusion of the Annual General Meeting.
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The Conygar Investment Company PLC
(Company Number 4907617)
(the “Company”)
Annual General Meeting
FORM OF PROXY
I/We ..........................................................................................................................................................................................
of ..............................................................................................................................................................................................
.................................................................................................................................................................................................
being (a) member(s) of the Company, hereby appoint .................................................................................................................
of ..............................................................................................................................................................................................
or failing him the Chairman of the Meeting (see note 3) as my/our proxy to vote for me/us on my behalf as directed below at the Annual
General Meeting of the Company to be held at the offices of Gowling WLG (UK) LLP, 4 More London Riverside SE1 2AU on
7 February 2017 at 4.00pm and at any adjournment thereof. I/we request such proxy to vote on the following resolutions as indicated
below. If no indication is given, my/our proxy will vote or abstain from voting at his or her discretion and I/we authorise my/our proxy to
vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the meeting:
Resolution
Number Resolution For Against Vote Withheld
Ordinary Resolutions
1 To receive and adopt the Company’s annual accounts for the
financial year ended 30 September 2016 together with the
directors’ report, the directors’ remuneration report and the
auditor’s report on those accounts and the auditable part of the
remuneration report.
2 To approve the directors’ remuneration report for the financial
year ended 30 September 2016.
3 To re-appoint Rees Pollock as auditors of the Company.
4 To authorise the directors to agree the remuneration of the
auditors.
5 To re-appoint the following director who retires by rotation:
Ross Hillier McCaskill.
6 To re-appoint the following director who retires by rotation:
Michael Derek Wigley.
7 To give directors’ authority to allot shares in the Company or grant
rights to subscribe for, or convert any security into shares in the
Company up to an aggregate nominal amount of £400,000.00.
Special Resolutions
8 To give a directors’ authority to disapply pre-emption rights and
allot equity securities.
9 To give a share buyback authority of up to a maximum aggregate
number of ordinary shares of 10,824,215.
Names of joint holders (if any) ...................................................................................................................................................
Date ..........................................................................................................................................................................................
Signed .......................................................................................................................................................................................
Notes:
1 As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the
Company. You can only appoint a proxy using the procedures set out in these notes.
2 Please indicate with an “X” in the appropriate boxes how you wish the proxy to vote. The proxy will exercise his discretion as to how he votes or whether he
abstains from voting:
(a) on any resolution referred to above if no instruction is given in respect of that resolution; and
(b) on any business or resolution considered at the meeting other than the resolutions referred to above.
A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution.
3 If you wish to appoint someone other than the Chairman of the Meeting as your proxy please insert their name. If you insert no name then you will have
appointed the Chairman of the Meeting as your proxy. A proxy need not be a member of the Company but must attend the meeting to represent you. Where
you appoint as your proxy someone other than the Chairman of the Meeting, you are responsible for ensuring that they attend the meeting and are aware of
your voting intentions.
4 You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one
proxy to exercise rights attached to any one share.
✄
5 In the case of a corporation, this form of proxy must be executed under its common seal or under the hand of an officer or attorney duly authorised in writing.
6 In the case of joint holders, the votes of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other
joint holders and for this purpose, seniority shall be determined by the order in which the names stand in the Register.
7 To be effective, this Form of Proxy, duly executed together with the power of attorney or other authority (if any) under which it is signed (or a notarially certified
or office copy thereof) must be lodged at the Company’s Registrars, Share Registrars Ltd, The Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR, by
4.00pm on 3 February 2017.
8 Any alterations to this form of proxy should be initialled. If you submit more than one valid proxy appointment, the appointment received last before the latest
time for the receipt of proxies will take precedence. For details on how to change your proxy instructions or revoke your proxy appointment please see the
notes to the notice of meeting.
9 Completion of this form will not prevent you from subsequently attending and voting at the Meeting in person, in which case any votes cast by proxy will be
excluded.
10 This Form of Proxy has been sent to you by post. It may be returned in hard copy form by post or by hand to the Company’s Registrars, Share Registrars Ltd,
The Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR. In each case, the proxy appointment must be received not less than 4.00pm on 3 February 2017
together with any authority (or a notarially certified copy of such authority) under which it is signed.
243532 Conygar Cover 21/12/2016 18:03 Page iv
Perivan Financial Print 243532