Fletcher King PLC

Fletcher King Plc

Annual Report and Accounts 2012

D I R E C T O R S A N D A D V I S E R S

C O N T E N T S

Directors
DJR Fletcher FRICS Chairman
REG Goode FRICS Managing Director
RA Dickman FRICS Executive Director
HE Richardson Non Executive (retired 30 April 2012)
DH Stewart Non Executive*

Secretary and Registered Office
PE Bailey ACA
61 Conduit Street, London W1S 2GB

Financial Advisers and Stockbrokers

Cairn Financial Advisers LLP
61 Cheapside, London EC2V 6AX

Solicitors
Boodle Hatfield
89 New Bond Street, London W1S 1DA

Auditors
Nexia Smith & Williamson
25 Moorgate, London EC2R 6AY

Tax Advisers
Smith & Williamson Limited
25 Moorgate, London EC2R 6AY

Principal Bankers
NatWest Bank Plc
63 Piccadilly, London W1A 2AG

Registrars and Transfer Office
Computershare Investor Services Plc
The Pavilions, Bridgwater Road, Bristol BS13 8AE
Dedicated shareholder telephone number: 0870 889 4095

Audit Committee
HE Richardson (retired 30 April 2012)
DH Stewart (Chairman)
DJR Fletcher

Remuneration Committee
DH Stewart, Chairman
HE Richardson (retired 30 April 2012)
DJR Fletcher

AIM Committee
DH Stewart, Chairman
HE Richardson (retired 30 April 2012)
DJR Fletcher
*Senior Independent Director

Company Number
02014432

Financial Highlights

two

Chairman’s Statement

three – four

Directors’ Report

five – eight

Auditors’ Report

nine – ten

Accounts

eleven – thirty five

Notice of Meeting

thirty six – thirty eight

Form of Proxy

thirty nine

Certificate No.

FS27825

O N E

H I G H L I G H T S

•
•
•
•
•

Revenue for the year of £3.105m (2011: £3.175m)
Profit before tax of £395,000 (2011: £414,000)
Profit for the year of £280,000 (2011: £331,000)
Basic and diluted earnings per share of 3.04p (2011: 3.59p)
Final dividend of 0.75p per share. An interim dividend of 0.75p per share was paid and therefore the total
ordinary dividend for the year will be 1.50p per share (2011: 1.50p)

F I N A N C I A L C A L E N D A R

Half Year Results
Announced in December 2011

Full Year Results
Preliminary announcement 12 July 2012

Annual General Meeting
20 September 2012

Final Dividend
Payable September 2012

Interim Dividend
To be announced in December 2012
Payable in January 2013

T W O

C H A I R M A N ’ S S TAT E M E N T

Results

Revenue for the year was £3.11m (2011: £3.18m) with profit before tax of £395,000 (2011:

£414,000).

The board is proposing a final dividend of 0.75p per share (2011: 0.75p). The final dividend is

subject to shareholders approval at the AGM and will be paid on the 27 September 2012 to those

shareholders on the register at close of business on 31 August 2012. With the interim dividend of

0.75p per share (2011: 0.75p) already paid, the total ordinary dividend for the year will amount to

1.5p per share (2011: 1.5p).

The board consider the results for the year to be satisfactory bearing in mind the difficult economic

and market conditions under which the company has been operating.

Harry Richardson, a non executive director, retired at the year end and I would like to thank him on

behalf of the Board and shareholders for his almost twenty years of loyal service and wise counsel.

He has helped guide the company through both the good times and some of the most economically

challenging times in recent history.

The Commercial Property Market

Little has changed since my report at the same time last year. Lack of growth in the economy

continues to weigh heavily on the property market and the Government cutbacks are making life

particularly difficult outside London and the South-East.

From a property perspective the market continues to be divided with strong demand from both

tenants and investors for Central London boosted by a continuing inward flow of foreign investors.

Contrasting with this is the continued stagnation of most regional markets with investors concerned

over falling rental values, low occupational demand and the risk of voids. Coupled with this is the

ongoing lack of debt finance preventing the traditional property company market from recovering.

We do not see this state of affairs changing in the short to medium term.

Business Overview

The position is very similar to that reported in my Interim statement in December. Our transaction

business continues at a reasonable pace although it slowed in the second half due to a lack of stock

for sale.

Rating instructions continue apace although the Valuation Office is taking longer to settle

outstanding appeals and require more detailed submissions as part of the negotiations. Bank

valuations continue at a low ebb and there is still no sign of any measurable increase in bank lending

to the commercial property sector.

Fund and asset management remain strong and despite the economic downturn we are experiencing

a remarkably low level of tenant failures and continue to collect well in excess of 95% of rents due

within three days of the quarter day.

T H R E E

C H A I R M A N ’ S S TAT E M E N T

Outlook

We see little change in the coming year which will continue to be challenging. We will keep a steady

eye on overhead costs and it will take all our ingenuity and resource to maintain turnover.

We are working hard to expand the recurring income part of our business, namely fund and asset

management whilst pushing hard on investment broking.

I must once again thank our hard working Directors and staff and our loyal clients without whom

these results would not be possible.

DAVID FLETCHER
CHAIRMAN
10 August 2012

F O U R

D I R E C T O R S ’ R E P O R T

The Directors present their report and accounts for the year ended 30 April 2012.

Principal Activities and Business Review

The Group carries on the business of property fund management, property asset management, rating,

valuations and commercial estates agency, providing a comprehensive range of services and expert

advice throughout the United Kingdom.

A review of the Group s business and activities during the year and its future prospects is contained

in the Chairman s Statement.

Results and Dividend

The consolidated statement of comprehensive income is set out on page 11. The profit for the year

after taxation is £280,000 (2011: £331,000). The Directors recommend the payment of an ordinary

final dividend of 0.75p per share (2011: 0.75p). An interim dividend of 0.75p per share (2011: 0.75p

per share) has already been paid to shareholders.

Capital and equity interests

Basic and diluted earnings per share from continuing operations amounted to 3.04p (2011: 3.59p).

During the year no shares were issued to directors or employees pursuant to the exercise of share

options. The total number of ordinary shares in issue at 30 April 2012 was 9.2 million (2011: 9.2

million).

Cash flow and liquidity

Net cash inflow from operating activities amounted to £457,000 (2011: £801,000) which, after

allowing for cash flows including dividends and capital expenditure, resulted in a net increase in

cash balances of £90,000 (2011: £755,000).

At 30 April 2012, the Group s cash at bank and on short term deposit amounted to £2.8 million

(2011: £2.7 million). This was deposited with leading banks.

Key Performance Indicators

There are three main key performance indicators for the Group, all of which are financial:

• Group turnover
• Operating profit
• Earnings per share

These key performance indicators are reviewed in the Chairman’s Statement and the Directors

Report above.

F I V E

D I R E C T O R S ’ R E P O R T

Risk Identification and management

The identification, control and monitoring of risks facing the business remain a management priority.

Financial risk management

The Group manages its treasury operations in accordance with policies and procedures approved by
the Board. Information about the Group’s policies on financial instruments is set out in note 3 of
the accounts. The Group has no borrowings. As the Group operates almost exclusively in the United
Kingdom, there are no significant direct foreign exchange risks. The Group has in place a risk
management programme that seeks to limit the adverse effects on the financial performance of the
Group and these are outlined in note 23 to the accounts.

Economic Risk
The main economic risks that could affect the Group’s performance are a major slowdown in the
economy of the UK and a slump in UK commercial property values. The Group has, where possible,
implemented actions to mitigate some of the effects of these risks. A review of the Group’s
performance, financial results, future development and prospects is contained within the Chairman’s
Statement.

Finance income and taxation

Income from the Group s available-for-sale investments and net bank interest amounted to £21,000
(2011: £23,000) reflecting lower prevailing interest rates. The effective taxation charge was 25.8%
(2011: 27.8%).

Political and Charitable Donations

During the year the Group made no charitable donations or political contributions (2011: £ nil).

Directors

The current Directors of the Company are set out below.

D J R Fletcher
R E G Goode
R A Dickman
D H Stewart

Chairman
Managing Director
Executive Director
Non Executive Director

H E Richardson retired on 30 April 2012. R E G Goode and D H Stewart retire by rotation in
accordance with the Company s Articles of Association, and being eligible offer themselves for
re-election at the forthcoming Annual General Meeting.

R E G Goode has been jointly responsible for running the London office of the company for the last
20 years. Previously he worked in the property investment departments of DTZ and Hillier Parker.
He is involved in the fund and asset management for a number of major institutional and in-house
clients.

D H Stewart had a long career in banking. At Abbey National he led the Business Finance division
and was responsible for all business banking and asset finance activities of First National Bank and
Abbey National. Prior to that he held senior appointments with TSB Group, Hill Samuel Bank,
Creditanstalt and County Natwest Limited.

S I X

D I R E C T O R S ’ R E P O R T

Directors Remuneration

DJR Fletcher
REG Goode
HE Richardson
DH Stewart
R A Dickman

Salary
£000
100
100
-
-
98

Benefits
£000
28
10
-
-
4

Bonus
£000
123
123
-
-
67

Fees
£000
-
-
15
20
-

2012
£000
251
233
15
20
169

298

42

313

35

688

2011
£000

257
240
20
20
203

740

No executive Directors at 30 April 2012 received any pension entitlements.

Supplier Payment Policy

The Company s policy, which is also applied by the Group, is to settle the terms of payment with
suppliers when agreeing the terms of each transaction. This ensures that suppliers are made aware
of the terms of payment. Trade creditors of the Group at 30 April 2012 were equivalent to 23 days
(2011: 25 days) purchases, based on the amount invoiced by suppliers during the year.

Corporate social responsibility

The Board recognises the importance of social and environmental matters in the conduct of the
Group’s business and remains committed to social and environmental awareness throughout its
operations, notwithstanding the relatively low environmental impact of the Group s activities.

Energy efficiency, recycling and the use of “fair trade” products are encouraged. The Board
recognises that enthusiastic, well-trained and high-quality staff are essential to the achievement of
the Group s commercial objectives. Participation in the success of the Group is encouraged via
comprehensive incentive schemes.

The Group provides employment on an equal basis irrespective of race, sex, disability, sexual
orientation and religious beliefs. Employee communication and feedback is encouraged across the
Group.

Authority to Allot Unissued Shares

In accordance with normal practice the Directors propose to take the usual authorities under Sections
551 and 570 of the Companies Act 2006. Therefore it is proposed to extend the Section 551 authority
given at the last Annual General Meeting on 22 September 2011 for a further year in respect of
ordinary 10p shares up to a maximum of 1,790,221 shares (£179,022). Apart from possible issues
under the Employee Share Option Scheme there is at present no intention of issuing any further
ordinary shares. In any event, no issue will be made which would effectively alter the control of the
Company without the prior approval of the Company in general meeting.

Purchase of Shares

The Directors, in line with boards of directors of other listed companies, consider that it would be
appropriate for the Company to have the authority to purchase its own shares as one of a range of
investment options available to them, more especially if the purchase of its own shares produced
an improvement in earnings per share. Shareholders should be assured that the Board will commence
share purchases only after careful consideration and after taking account of the overall financial
position of the Group.

S E V E N

D I R E C T O R S ’ R E P O R T

An ordinary resolution will be proposed to authorise the Company to make market purchases of up
to a maximum of 460,000 of its own shares, representing less than 5% of the existing issued ordinary
shares. The maximum price to be paid on any exercise of the authority will be restricted to 5%
above the average of the middle market quotation as derived from The London Stock Exchange
Daily Official List for the ordinary shares for the ten dealing days immediately prior to purchase.
The minimum price that may be paid for the ordinary shares is the nominal value of 10p per share.
The authority for the purchase sought at the Annual General Meeting will expire at the conclusion
of the following Annual General Meeting which is expected to take place in September 2013. The
intention of the Board is to seek to renew the authority at future Annual General Meetings.

Statement of Directors’ Responsibilities

The directors are responsible for preparing the Directors' Report and the financial statements in
accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under
that law the directors have elected to prepare the financial statements in accordance with 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 provisions of
the Companies Act 2006. 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 affairs of the
company and of the group and of the profit or loss of the group for that period. In preparing these
financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent;
• state that the financial statements comply with IFRSs as adopted by the European Union;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume

that the group will continue in business.

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

The directors are responsible for the maintenance and integrity of the corporate and financial
information included on the company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from legislation in other
jurisdictions.

Disclosure of information to the auditors

In the case of each person who was a Director at the time this report was approved, so far as that
Director was aware there was no relevant available information of which the Group and Company’s
auditors were unaware; and that Director had taken all steps that the Director ought to have taken
as a Director to make himself aware of any relevant audit information and to establish that the
Group and Company’s auditors were aware of that information.

Auditors

A resolution to reappoint the auditors, Nexia Smith & Williamson, will be proposed at the
forthcoming Annual General Meeting.

This report was approved by the Board on 10 August 2012.

P E Bailey
Company Secretary

E I G H T

A U D I T O R S ’ R E P O R T

Independent auditors’ report to the members of Fletcher King plc

We have audited the financial statements of Fletcher King plc for the year ended 30 April 2012

which comprise the Group Statement of Comprehensive Income, the Group and Parent Company

Statements of Financial Position, the Group and Parent Company Statements of Cash Flows, the

Group and Parent Company Statements of Changes in Equity and the related notes 1 to 24. The

financial reporting 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 provisions of 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 we are required to state to them in an auditor s report and for
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility

to anyone other than the company and the company s members as a body, for our audit work, for

this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors Responsibilities set out on page 8, the

directors are responsible for the preparation of the financial statements and for being satisfied that

they give a true and fair view. Our responsibility is to audit 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 Practices Board’s (APB’s) Ethical
Standards for Auditors.

Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at
www.frc.org.uk/apb/scope/private.cfm.

Opinion on financial statements

In our opinion:

(cid:3) the financial statements give a true and fair view of the state of the Group’s and of the
Parent company’s affairs as at 30 April 2012 and of the Group’s profit for the year then

ended;

(cid:3) the group financial statements have been properly prepared in accordance with IFRSs

as adopted by the European Union;

(cid:3) 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

(cid:3) the financial statements have been prepared in accordance with the requirements of the

Companies Act 2006.

N I N E

A U D I T O R S ’ R E P O R T

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in 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:

(cid:3) 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
(cid:3) the parent company financial statements are not in agreement with the accounting

records and returns; or

(cid:3) certain disclosures of directors remuneration specified by law are not made; or
(cid:3) we have not received all the information and explanations we require for our audit.

Stephen Drew
Senior Statutory Auditor, for and on behalf of
Nexia Smith & Williamson
Statutory Auditors
Chartered Accountants

25 Moorgate
London
EC2R 6AY
13 August 2012

T E N

C O N S O L I D AT E D S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E

for the year ended 30 April 2012

Notes

6
11

Revenue
Employee benefits expense
Depreciation expense
Other operating expenses

Operating profit

Income from investments
Finance income

))

7

Profit before taxation

8

Taxation

10

Profit for the year
Other comprehensive income for the year, net of tax

Total comprehensive income for the year,
attributable to equity shareholders

10

Basic and diluted earnings per share

2012))
£000))

3,105))
(1,673))
(46))
(1,012))

374))

11))
10))

395))

(115))

280))
—))

280))

3.04p

2011)))
£000)))

3,175)))
(1,595)))
(59)))
(1,130)))

391)))

13)))
10)))

414)))

(83)))

331)))
— )

331)))

3.59p)

E L E V E N

2012
£000

180
500
63

743

892
2,812

3,704

4,447

576
59
576

1,211

1,211

921
140
2,175

3,236

4,447

2011
£000

226
250
73

549

1,063
2,722

3,785

4,335

534
121
586

1,241

1,241

921
140
2,033

3,094

4,335

C O N S O L I D AT E D S TAT E M E N T O F F I N A N C I A L P O S I T I O N

as at 30 April 2012

Notes

Assets
Non-current assets
Property, plant and equipment
Available-for-sale investments
Deferred tax assets

11
13
18

Current assets
Trade and other receivables
Cash and cash equivalents

14
15

Total assets

Liabilities
Current liabilities
Trade and other payables
Current taxation liabilities
Other creditors

16

17

Total liabilities

19

Shareholders’ equity
Share capital
Share premium
Profit and Loss Reserve

Total shareholders’ equity

Total equity and liabilities

Approved by the Board on 10 August 2012 and signed on its behalf by

David Fletcher
Chairman

T W E LV E

C O M PA N Y S TAT E M E N T O F F I N A N C I A L P O S I T I O N

as at 30 April 2012

Notes

12

14
15

16
17

19

Assets
Non-current assets
Investments in group undertakings

Current assets
Trade and other receivables
Cash and cash equivalents

Total assets

Liabilities
Current liabilities
Trade and other payables
Other creditors

Total liabilities

Shareholders’ equity
Share capital
Share premium
Profit and Loss reserve

Total shareholders’ equity

Total equity and liabilities

Approved by the Board on 10 August 2012 and signed on its behalf by

David Fletcher
Chairman

2012
£000

105

212
1,043

1,255

1,360

21)
14)

35)

35)

921)
140)
264)

1,325)

1,360)

2011)
£000)

105)

8)
694)

702)

807)

128)
21)

149)

149)

921)
140)
(403)

658)

807)

T H I R T E E N

2012)
£000)

395

46)
(11)
(10)

420)
172)
32)

624)

(167)

457

(250)
10)
11)

(229)

(138)

(138)

90)
2,722)

2,812)

C O N S O L I D AT E D S TAT E M E N T O F C A S H F L O W S

for the year ended 30 April 2012

Cash flows from operating activities
Profit before taxation from continuing operations
Adjustments for:
Depreciation expense
Income from investments
Finance income

Cash flows from operating activities before
movement in working capital
(Increase)/decrease in trade and other receivables
Increase in trade and other payables

Cash generated from operations

Taxation paid

Net cash flows from operating activities

Cash flows from investing activities
Purchase of investments
Finance income
Income from investments

Net cash flows from investing activities

Cash flows from financing activities
Dividends paid to shareholders

Net cash flows from financing activities

Net increase in cash and cash equivalents
Cash and cash equivalents at start of year

Cash and cash equivalents at end of year (note 15)

F O U R T E E N

2011)
£000)

414)

59)
(13)
(10)

450)
(59)
489)

880)

(79)

801)

–

)
10)
13)

23)

(69)

(69)

755)
1,967)

2,722)

C O M PA N Y S TAT E M E N T O F C A S H F L O W S

for the year ended 30 April 2012

Cash flows from operating activities
Profit/(Loss) before taxation
Adjustments for:
Finance income
Dividends received from subsidiary undertakings

Cash flows from operating activities before
movement in working capital
Increase in trade and other receivables
Decrease in trade and other payables

Cash absorbed by operations

Cash flows from investing activities
Dividends received from subsidiary undertakings
Finance income

Net cash flows from investing activities

Cash flows from financing activities
Dividends paid to shareholders

Net cash flows from financing activities

Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at start of year

2012)
£000)

805)

(1)
(938)

(134)
(204)
(114)

(452)

938)
1)

939)

(138)

(138)

349)
694)

Cash and cash equivalents at end of year (note 15)

1,043)

2011)
£000)

(67)

(3)
(69)

(139)
–)

48)

(91)

69)
3)

72)

(69)

(69)

(88)
782)

694)

F I F T E E N

S TAT E M E N T S O F C H A N G E S I N E Q U I T Y

for the year ended 30 April 2012

CONSOLIDATED

Balance at 1 May 2010

Total comprehensive income for the year
Equity dividends paid

Balance at 30 April 2011

Total comprehensive income for the year
Equity dividends paid

Balance at 30 April 2012

Share
capital
£0000

Share
premium
£000

Profit)
and)
Loss)
Reserve
£000)

TOTAL)
EQUITY)
£000)

2,832

331)

(69)

140

1,771)

—
—

331)

(69)

140

2,033

3,094)

—
—

280)
(138)

280)
(138)

140

2,175)

3,236)

921

—
—

921

—
—

921

The profit and loss reserve comprises the undistributed profits/(losses) of the Group.

COMPANY

Balance at 1 May 2010

Total comprehensive income for the year
Equity dividends paid

Balance at 30 April 2011

Total comprehensive income for the year
Equity dividends paid

Balance at 30 April 2012

Share
Share
capital
£000

Share
Share
premium
£000

Profit)
and)
loss)
reserve)
£000)

TOTAL)
TOTAL)
EQUITY)
£000)

921

—
—

921

—
—

921

140

(267)

—
—

140

—
—

140

(67)

(69)

(403)

805)
(138)

264)

794)

(67)

(69)

658)

805)
(138)

1,325)

The profit and loss reserve comprises the undistributed profits/(losses) of the Company.

S I X T E E N

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

1. General information
Fletcher King Plc (“the Company”) and its subsidiaries (together ‘the Group’) carry on the business
of property fund management, property asset management, rating, valuations and construction
services throughout the United Kingdom. The Company is a public limited company incorporated
and domiciled in England and Wales and listed on the Alternative Investment Market (“AIM”) of
The London Stock Exchange. The registered office address is 61 Conduit Street, London W1S 2GB.
These consolidated financial statements were approved for issue by the Board of Directors on 10
August 2012. They are presented in Sterling which is the Group s functional currency. The Group
has no overseas operations.

2. Basis of preparation and presentation of financial statements
These consolidated financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union applied in accordance
with the provisions of the Companies Act 2006, and under the historical cost convention.

New standards and interpretations
At the date of authorisation of these financial statements, there were no new standards and
interpretations in issue that were relevant to the group.

At the date of authorisation of these financial statements, the following new standards and
interpretations have been issued but are not yet effective and have not been applied in these financial
statements:-

(cid:3) IFRS 9 Financial instruments (effective 1 January 2013)
(cid:3) IFRS 10 Consolidated Financial Statements (effective 1 January 2013)
(cid:3) IFRS 11 Joint Arrangements (effective 1 January 2013)
(cid:3) IFRS 12 Disclosure of Interests in Other Entities (effective 1 January 2013)
(cid:3) IFRS 13 Fair Value Measurement (effective 1 January 2013)

The directors do not anticipate that the adoption of these standards and interpretations will have a
material impact on the Group’s financial statements. Certain of these standards and interpretations
will require additional disclosures over and above those currently included in these financial
statements in the period of application.

S E V E N T E E N

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

The preparation of financial statements in accordance with IFRS requires the use of certain critical

accounting estimates and also requires management to exercise judgement in applying the Group’s

accounting policies. The areas involving a higher degree of judgement or complexity, or areas where

assumptions and estimates are highly significant to the financial statements, are set out in note 3

below.

3. Principal accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out

below. These policies, which are also applicable to the financial statements of the Company, have

been consistently applied to all the years presented.

Basis of consolidation

The financial statements consolidate the accounts of the Company and all subsidiary undertakings

drawn up to the same year end.

Subsidiaries

Subsidiaries are entities over which the Group has the power to govern the financial and operating

policies generally accompanying a shareholding of more than 50% of the voting rights. The existence

and effect of potential voting rights that are currently exercisable or convertible are considered when

assessing whether the Group controls another entity. Subsidiary entities are consolidated from the

date on which control is transferred to the Group and are deconsolidated from the date on which

control ceases.

In respect of subsidiaries, inter-company transactions, balances and unrealised gains on intra-group

transactions are eliminated on consolidation.

The accounting policies of subsidiaries are changed where necessary to ensure consistency with

the policies adopted by the Group.

E I G H T E E N

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

Property, plant and equipment and depreciation

Property, plant and equipment are stated at historical cost, net of depreciation, at rates calculated to

write off the cost, less residual value, of each asset over its expected useful life. Depreciation rates

on a straight line basis are as follows:-

Motor vehicles

Office furniture and fittings

Computer equipment

Short leasehold premium and improvements

25%

25%

33%

10%

Cost includes expenditure that is directly attributable to the acquisition of the asset. Subsequent

costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,

only when it is probable that future economic benefits associated with the item will flow to the

Group and the cost of the item can be measured reliably. All other repairs and maintenance are

charged to the income statement during the financial period in which they are incurred.

Residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet

date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s

carrying amount is greater than its estimated recoverable amount. Gains and losses on disposal are

determined by comparing proceeds with carrying amount. These are included in the income

statement.

Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the

chief operating decision-maker as required by IFRS 8 “Operating Segments”. The chief operating

decision-maker, who is responsible for allocating resources and assessing performance of the

operating segments, has been identified as the Executive Committee.

N I N E T E E N

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

Financial instruments

Financial assets and liabilities are recognised on the Group’s balance sheet when the Group becomes

a party to the contractual provisions of the instrument. Measurement depends on their classification

and is discussed below:

(i)

Investments

Investments held by the Company in subsidiary entities, not held for sale, are shown at cost less any

provision for impairment.

The Directors determine the classification of investments held by the Group at initial recognition

and re-evaluate this designation at each reporting date. At the balance sheet date all these investments

were classified as available-for-sale. Available-for-sale investments are initially recognised at the fair

value of the consideration given, including associated acquisition costs, which may equate to cost.

On subsequent measurement, available-for-sale investments are measured at either fair value or at

cost where fair value is not readily ascertainable. Changes in fair value are recognised in equity,

together with the related deferred tax asset or liability. When such investments are disposed of, the

accumulated gains or losses, previously recognised in equity, are transferred to the income statement.

Available-for-sale financial assets are included in non-current assets unless management intends to

dispose of the investment within twelve months of the balance sheet date.

(ii) Trade and other receivables

Trade and other receivables are initially measured at fair value, and are subsequently measured at

amortised cost using the effective interest method. A provision is established when there is objective

evidence that the Group will not be able to collect all amounts due. The amount of any provision is

recognised in the income statement. All financial assets are reviewed annually for impairment, with

any losses reflected in the income statement. Investment income is recognised in the income

statement.

(iii) Cash and cash equivalents

Cash and cash equivalents include cash in hand, call deposits held with banks, and other short-term

highly liquid investments with original maturities of three months or less.

(iv) Financial liabilities and equity

Financial liabilities and equity instruments issued by the group are classified in accordance with the

substance of the contractual arrangements entered into and the definitions of a financial liability and

an equity instrument. An equity instrument is any contract that evidences a residual interest in the

assets of the Group after deducting all of its liabilities. The accounting policies adopted for specific

financial liabilities and equity instruments are set out below.

T W E N T Y

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

(a) Trade and other payables

Trade and other payables are initially measured at fair value, and are subsequently measured at

amortised cost using the effective interest rate method.

(b) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new

shares or options are shown in equity as a deduction from the proceeds, net of tax.

Taxation

Current income tax is provided on taxable profits at the current rate. Deferred income tax is provided

in full, using the liability method, on temporary differences arising between the tax bases of assets

and liabilities and their carrying amounts in the consolidated financial statements. Deferred income

tax is determined using rates enacted at the balance sheet date which are expected to apply when

the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are only recognised to the extent that it is probable that future taxable

profit will be available against which the temporary differences can be utilised.

Income tax and deferred tax are reflected in the income statement, unless they relate to items

recognised in equity, in which case they are recognised in equity.

Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result

of past events, it is probable that the Group will be required to settle the obligation, and the amount

can be reliably estimated. Provisions are measured at the Directors best estimate of the expenditure

required to settle the obligation at the balance sheet date.

Revenue recognition

Revenue comprises commissions and fees receivable excluding value added tax and is measured at

fair value. Fees on property transactions and other contingent fee arrangements are recognised as

earned on the unconditional completion of a contract or when a fee is contractually due. Fees for

other professional services are recognised on completion of the assignment.

Interest and investment income is recognised on a time-proportion basis using the effective interest

method.

T W E N T Y- O N E

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

Operating profit

Operating profit is stated before income from investments, finance income, costs and losses on

impairment of available-for-sale investments and taxation.

Employee benefits

No pension schemes are operated by the Group. Contributions to employees’ money-purchase

pension schemes are made on an arising basis where these form part of contractual remuneration

obligations. The Group recognises a liability and an expense for cash-settled bonuses when

contractually obliged or when there is a past practice creating a constructive obligation.

Operating Leases

Leases where the lessor retains substantially all the risks and rewards of ownership are classified as

operating leases. Payments made under operating leases are charged to the income statement on a

straight-line basis over the period of the lease.

Exceptional Items

Items of income and expense that are material by size and/or nature and are non-recurring are

classified as exceptional items on the face of the income statement within their relevant category.

The separate reporting of these items give an indication of the Group’s underlying performance.

Dividend Distributions

Dividends to the Company’s shareholders are recognised as a liability when paid (if interim

dividends) or approved by shareholders (if final dividends).

T W E N T Y- T W O

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

Critical accounting estimates and assumptions

The preparation of the consolidated financial statements in conformity with International Financial

Reporting Standards requires management to make estimates and assumptions concerning the

future. While the resulting accounting estimates will, by definition, seldom equal the related actual

results, in the opinion of the Directors the estimates and assumptions that have a significant risk of

causing a material adjustment to the carrying amounts of assets and liabilities within the next

financial year are detailed below.

(a) Impairment of available-for-sale investments

The fair value of available-for-sale investments is determined by reference to the underlying value

of the assets of those investments at each balance sheet date. The Directors have made provisions

for impairment where there is objective evidence that fair value is less than cost.

(b) Provisions for impairment of trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost

less provision for impairment. The Directors have made provisions for impairment where there is

objective evidence that the Group will not be able to collect all amounts due.

(c) Revenue recognition

The Directors regularly review the basis for recognition of revenue, which comprises commissions

and fees receivable excluding value added tax.

T W E N T Y- T H R E E

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

4. Segment Information – Group

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker to allocate resources to the segments and to assess their performance.
In accordance with IFRS 8 the chief operating decision maker has been identified as the Executive Committee. They review the
Group’s internal reporting in order to assess performance and allocate resources. The Executive Committee considers that the
business comprises a single activity being General Services. Therefore, the Group is organised into one operating segment and
there is one reporting segment. The segment information is the same as that set out in the consolidated statement of comprehensive
income, consolidated statement of financial position, consolidated statement of changes in equity and consolidated statement of
cash flows.cash flows.

Revenues from external customers are classified as follows:-

Property Fund & Asset Management
Professional services

5. Operating profit

Operating profit is stated after charging/(crediting):

Year ended 30 April

2012
£000

2,313
792

3,105

2012)
£000)

Operating lease rentals relating to property
Other operating lease rentals
Depreciation
Rental income
Fees payable to the Company’s auditor for the audit of the
Company’s consolidated annual financial statements
Fees payable to the Company’s auditor and its associates for other services:
- the audit of the accounts of associates of the Company pursuant
- to legislation
- other services supplied pursuant to such legislation
- tax services
- other services

287)
22)
46)
(19)

)
6)

17)
2)
7)
2)

2011
£000

2,267
908

3,175

2011)
£000)

285)
22)
59)
(10)

6)

17)
2)
7)
2)

As permitted by section 408(3) of the Companies Act 2006, the Company has taken advantage of the legal dispensation not to
present its own income statement. The profit after taxation of the Company for the year was £805,000 (2011 loss: £67,000). As
there are no other items of comprehensive income, no separate statement of comprehensive income is presented for the Company.

T W E N T Y- F O U R

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

6. Employee benefits expense

Year ended 30 April

Basic wages and salaries
Performance-based payments

Social security costs
Other costs

2012
)
£000)

1,150)
309)

1,459)

176)
38)

1,673)

The average number of persons (including directors) employed by the Group was as follows:

Year ended 30 April
Continuing operations

Management
Professional
Administration

2012)
No.)

4)
7)
7)

18)

2011)
£000)

1,024)
365)

1,389)

182)
24)

1,595)

2011)
No.)

4)
6)
8)

18)

T W E N T Y- F I V E

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

Key management are those persons having authority and responsibility for planning, directing and controlling the activities of the
entity. In the opinion of the Board, the Group’s key management comprises the executive and non-executive Directors of Fletcher
King Plc. Information regarding their compensation, all of which are short-term benefits, is set out below:

The Group does not operate any pension schemes.

Directors’ Emoluments

Fees
Salaries and benefits
Performance-related bonuses

2012
£000

35
340
313

688

No executive Directors at 30 April 2012 received any pension entitlements. (2011: nil)

Highest Paid Director

Basic Pay
Benefits
Performance Related Bonus

2012
£000

100
28
123

251

Key Management Compensation

Aggregate compensation for key management, being the Directors of the Company, was as follows:

Short term employee benefits

2012
£000

783

2011
£000

40
335
365

740

2011
£000

100
27
130

257

2011
£000

835

In accordance with Aim Rule 19, information of individual director’s remuneration has been disclosed in the Directors’ Report.

7. Finance income

Year ended 30 April

Finance income
Bank interest receivable

2012
£000

10

2011
£000

10

T W E N T Y- S I X

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

8.

Income tax

Year ended 30 April

Current tax
UK corporaton tax – current year
UK corporation tax – prior years

Deferred tax
UK deferred tax – current year

Total tax charged in the income statement

2012)
£000)

111)
(6)

105)

10)

10)

115)

2011)
£000)

121)
(38)

83)

–)

–)

83)

The effective rate of UK corporation tax is calculated as the standard rate of UK corporation tax of 26% less any effective marginal
relief. The difference between the total current tax shown above and the amount calculated applying the effective rate of UK
corporation tax, to the profit before taxation is as follows:

Year ended 30 April

Profit before taxation

Tax on Group profit at UK corporation tax rate of 25.8%

(2011: 27.8%)

Difference between capital allowances and depreciation
Expenses not deductible for tax purposes
Deferred tax – timing differences
Prior year adjustment
Other adjustments

Group total tax charge for the year

2012)
£000)

395)

102)

4)
3)
10)
(6)
2)

115)

2011)
£000)

414)

115)

7)
6)
–)
(38)
(7)

83)

T W E N T Y- S E V E N

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

9. Dividends

Year ended 30 April

Equity dividends on ordinary shares:
Declared and paid during year
Ordinary final dividend for the year ended 30 April 2011:
0.75p per share (2010: nil)
Interim dividend for the year ended 30 April 2012:
0.75p per share (2011: 0.75p)

\

Proposed ordinary final dividend for the year ended
30 April 2012: 0.75p per share

10. Earnings per share

2012
£000

69

69

138

69

2012)
No)

2011
£000

–

69

69

2011)
No)

Weighted average number of shares for basic and diluted
earnings per share

9,209,779)

9,209,779)

Earnings for basic and diluted earnings per share

Basic and diluted earnings per share

£000)
280)

3.04)p

£000)
331)

3.59)p

T W E N T Y- E I G H T

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

11. Property, plant and equipment - Group

Cost
At 1 May 2011 and 30 April 2012

Depreciation
At 1 May 2011
Charge for the year

At 30 April 2012

Net book value at 30 April 2012

Cost
At 1 May 2010 and 30 April 2011

Depreciation
At 1 May 2010
Charge for the year

At 30 April 2011

Net book value at 30 April 2011

Furniture,)
fittings and)
computers)
£000)

Short)
leasehold)
premium and)
improvements)
£000)

Motor)
vehicles)
£000)

154)

102)
19)

121)

33)

154)

76)
26)

102)

52)

53)

53)
–)

53)

–)

53)

48)
5)

53)

–)

276)

102)
27)

129)

147)

276)

74)
28)

102)

174

Total)
£000)

483)

257)
46)

303)

180)

483)

198)
59)

257)

226)

12. Investments in Group undertakings – Company

Year ended 30 April

Shares in Group undertakings at cost:
At 1 May and 30 April

2012)
£000)

105)

2011
£000

105)

As at 30 April 2012, the Company owns 100% of the ordinary share capital of the following companies registered in England and
Wales, the accounts of which are consolidated into the Group accounts: Fletcher King Services Limited, which is the trading
subsidiary through which the Fletcher King business is carried out and Fletcher King Investment Management Plc, the group’s
FSA-regulated investment services company.

T W E N T Y- N I N E

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

13. Available-for-sale investments – Group

Year ended 30 April

At 1 May
Additions

At 30 April

Classified as:
Available-for-sale investments

UK unlisted investments classified as available-for-sale

2012)
£000)

250)
250)

500)

500)

500)

2011
£000

)
)

250)

—)

250)

250)

250)

An amount of £250,000 represents a partnership interest in the Stratton House Investment Properties Limited Partnership
(SHIPS 06) which was acquired during the year ended 30 April 2007. This investment is stated at cost, which is equal to the
fair value of the investment based on the underlying value of the Partnership’s assets.

An amount of £250,000 represents a member’s interest in the Stratton House Investment Properties Syndicate (SHIPS 11)
which was acquired during the year ended 30 April 2012. This investment is stated at cost, which is equal to the fair value of
the investment based on the underlying value of the Syndicate’s assets.

An impairment loss of £178,000 was incurred in 2009 on a 2.5% holding in Stratton House Investment Property Syndicate ’04
to revalue the investment to £nil. This remains the fair value of the investment as at 30 April 2012 and is based on the
underlying value of the Syndicate’s assets.

14. Trade and other receivables

Trade receivables
Amount owed by group undertakings
Other receivables
Prepayments and accrued income

Group)
2012)
£000)

663)
—))
23)
206)

892)

Group)
2011)
£000)

862)
—))
21)
180)

1,063)

Company
2012
£000

Company)
2011)
£000)

—
202
4
6

212

—)
—)
2)
6)

8)

Trade receivables are non-interest bearing and generally have a 30-90 day term. Due to their short maturities, the fair value of trade
receivables approximates their book value.

A provision for impairment of trade receivables is established when there is no objective evidence that the Group will be able to
collect all amounts due according to the original terms. The group considers factors such as default or delinquency in payment,
significant financial difficulties of the debtor and the probability that the debtor will enter bankruptcy in deciding whether the trade
receivable is impaired.

Provisions for impairment of trade
receivables

At 1 May
Charge for the year
Uncollected amounts written off, net of recoveries

At 30 April

Group)
2012)
£000)

Group))
2011))
£000))

Company)
2012)
£000)

Company)
2011)
£000)

—)
—)
—)

—)

—)
—)
—)

—)

—)
—)
—)

—)

—)
—)
—)

—)

As at 30 April 2012, trade receivables of £nil were impaired (2011: £nil).

T H I R T Y

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

As at 30 April 2012, trade receivables of £366,000 (2011: £699,000) were past due, but not impaired. The ageing analysis of these
trade receivables is as follows:

Up to 3 months past due
3 to 6 months past due
Over 6 months past due

At 30 April

15. Cash and cash equivalents

Cash at bank and in hand

Group)
2012)
£000)

Group))
2011))
£000))

Company)
2012)
£000)

Company)
2011)
£000)

364)
1)
1)

366)

Group)
2012)
£000)

2,812)

2,812)

699)
—)
—)

699)

—)
—)
—)

—)

—)
—)
—)

—)

Group))
2011))
£000))

Company)
2012)
£000)

Company)
2011)
£000)

2,722)

2,722)

1,043)

1,043)

694)

694)

Cash and cash equivalents are all denominated in Sterling. The effective interest rate on Group cash balances for the year ended
30th April 2012 was 0.5% (2011: 0.5%). There is no material difference between the fair value and book value of cash and cash
equivalents.

16. Trade and other payables

Trade payables
Amounts owed to group undertakings
Other taxation and social security
Other payables

Group)
2012)
£000)

Group))
2011))
£000))

Company)
2012)
£000)

Company)
2011)
£000)

271)
—)
265)
40)

576)

250)
—)
254)
30)

534)

21)
—)
—)
—)

21)

—)
128)
—)
—)

128)

The carrying amounts of trade and other payables approximate their fair value.

17. Other creditors

)Bonus accruals
Other accruals and deferred income

Group)
2012)
£000)

350)
226)

576)

Group))
2011)
£000))

Company)
2012)
£000)

Company)
2011)
£000)

314)
272)

586)

—)
14)

14)

—)
21)

21)

T H I R T Y- O N E

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

18. Deferred taxation (non-current) – Group

Year ended 30 April

Deferred taxation asset:
Timing differences on provisions
At 1 May
Movement during year

At 30 April

2012)
£000)

73)
(10)

63)

2011)
£000)

73)
–)

73)

19. Share capital

30 April)
2012)
Number)

30 April))
2011))
Number))

30 April)
2012)
£000)

30 April)
2011)
£000)

Ordinary shares of 10p each:
)
Issued and fully paid

9,209,779)

9,209,779))

921)

921)

The Company has one class of ordinary shares which carry no rights to fixed income. No shares were issued during the year.

20. Share based payments

Executive Share Option Scheme:
As at 1 May 2011, no options were outstanding under this scheme. No new options were issued during the year ended 30 April
2012.

1996 Employee Share Option Scheme:
As at 1 May 2011, no options were outstanding under this scheme. No new options were issued during the year ended 30 April
2012.

There is no change to the accounts in the year as all schemes had vested prior to the start of the year.

T H I R T Y- T W O

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

21. Capital and operating lease commitments and contingent liabilities

As at 30 April 2012 and 30 April 2011, neither the Group nor the Company had any capital commitments or contingent liabilities.

As at 30 April 2012 and at 30 April 2011, the Group had outstanding commitments under non-cancellable leases which fall due
as follows:

Within one year
In one to five years

Property leases
2012
2011
£000
£000

287
858

287
1,145

1,145

1,432

Other leases

2012
£000

2011
£000

22
8

30

22
30

52

Total
2012
£000

309
866

Total
2011
£000

309
1,175

1,175

1,484

Property leases relate to office premises occupied by the Group. Other leases relate to office equipment.

22. Related party transactions

Transactions between the Company and its subsidiaries are in the normal course of business and are priced using arm’s length
prices. Such transactions are eliminated on consolidation.

Total inter-company balances between the Company and its subsidiaries, which are unsecured and which relate to the provision
of working capital, are disclosed in the accounts. During the year, the Company had funding transactions with subsidiaries
amounting to £330,000 (2011: £65,000).

Group companies hold investments in a number of property funds (see note 13) in which Group companies also act as fund
manager. During the year, Group companies received fees and were owed amounts as follows:-

SHIPS 04 Fund
SHIPS 06 Fund
SHIPS 11 Fund

Fees

2012)
£000)

2011))
£000))

236)
56)
27)

202)
19)
–)

Amount Due
2012)
£000)

2011)
£000)

56)
12)
3)

47)
9)
–)

All transactions were made in the ordinary course of business and on an arm’s length basis.

Compensation paid to the Company’s Board of directors and key management is disclosed in note 6 and in the Directors Report.

23. Financial instruments

The Group’s and the Company’s financial instruments comprise UK unlisted investments, cash and cash equivalents, and items
such as trade payables and trade receivables which arise directly from its operations. The main purpose of these financial
instruments is to provide finance for the Group’s and the Company’s operations.

The Group’s and the Company’s operations expose them to a variety of financial risks including credit risk, interest rate risk,
liquidity risk and equity price risk. Commensurate with the size of the Group, the directors set the policies regarding financial risk
management, and these are implemented accordingly by Group companies.

Loans and receivables

Trade receivables
Amount owed by group undertakings
Other debtors
Cash and cash equivalents

Group)
2012)
£000)

663)
–)
16)
2,812)

3,491)

Group))
2011))
£000))

863)
–)
16)
2,722)

3,600)

Company)
2012)
£000)

Company)
2011)
£000)

–)
202)
–)
1,043)

1,245)

–))
–))
–))
694)

694)

T H I R T Y- T H R E E

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

Financial liabilities at amortised costs

Trade payables
Other payables
Amounts owed to group undertakings
Bonus accruals
Other accruals and deferred income

Group)
2012)
£000)

271)
40)
–)
350)
226)

887)

Group)
2011)
£000)

Company)
2012)
£000)

Company)
2011)
£000)

250)
30)
–)
314)
272)

866)

21)
–)
–)
–)
14)

35)

–)
–)
128)
–)
21)

149)

Credit risk

)

The Group’s credit risk is attributable both to trade receivables and to cash balances held. The Company’s credit risk is attributable
primarily to cash balances held. The Group has implemented policies to ensure that credit checks are made on potential clients
before work is carried out on their behalf. The amount of exposure to any individual counterparty is subject to limits set by the
directors. Cash balances held are deposited with leading banks.

The carrying amount of financial assets represents the maximum credit exposure. The maximum credit exposure to credit risk at
the reporting date was:

Group)
2012)
£000)

662)
2,812)
16)

3,490)

Group)
2011)
£000)

862)
2,722)
16)

3,600)

Company)
2012)
£000)

Company)
2011)
£000)

–)
1,043)
–)

1,043)

–)
694)
–)

694

Trade receivables
Cash and other equivalents
Other receivables

Interest rate risk

)

The Group and the Company have interest bearing assets, but no interest bearing liabilities. Interest bearing assets comprise only
cash and cash equivalents which earn interest at a variable rate. The interest earned on the Group’s and the Company’s cash and
cash equivalents, denominated in sterling, derived principally from Money Market deposits of differing fixed time periods, and
from call deposits held with banks which provide short-term liquidity to meet liabilities when they fall due.

The Group and the Company are exposed to interest rate risk as a result of these positive cash balances. For the year ended 30
April 2012, if LIBOR had increased by 0.5% with all other variables held constant, post tax profit and equity for the Group would
have been £10,000 (2011: £10,000) higher, and for the Company £1,000 (2011: £3,000) higher. Conversely, if LIBOR had
decreased by 0.5% with all other variables held constant, post tax profit and equity for the Group would have been £10,000 (2011:
£10,000) lower, and for the Company £1,000 (2011: £3,000) lower.

The Group’s cash and cash equivalents earned interest during the year at an average of 0.5% (2011: 0.5%), and the Company’s
cash and cash equivalents earned interest during the year at an average of 0.5% (2011: 0.5%)

T H I R T Y- F O U R

N O T E S T O T H E F I N A N C I A L S TAT E M E N T S

Liquidity risk

)

The Group and the Company actively maintain cash and cash equivalents to ensure that there are sufficient funds available for a
period of at least six months to meet liabilities when they fall due.

The following table shows the contractual maturities of the Group’s and the Company’s financial liabilities, all of which are
measured at amortised cost:

Financial liabilities falling due:
Within 1 month
From 2 to 3 months
From 4 to 6 months

Group)
2012)
£000)

463)
424)
–)

887)

Group)
2011)
£000)

Company)
2012)
£000)

Company)
2011)
£000)

465)
371)
83)

919)

35)
–)
–)

35)

21)
–)
128)

149)

Market risk and sensitivity analysis

Equity price risk
The Group is exposed to equity price risk because of investments held by the Group and classified as available for sale.

The Group’s continuing investments are sensitive to movements in property prices. The investment is the Stratton House Investment
Property Syndicate ’04 has previously been written down to zero based on recent property price movements and the underlying
assets of the Syndicate.

24. Capital risk management

The Group and the Company seek, when managing capital, to safeguard the Group’s and the Company’s ability to continue as going
concerns, in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital.

The Group and the Company define capital as being share capital plus reserves. The Board of Directors monitors the level of capital
employed in order to achieve these objectives.

T H I R T Y- F I V E

N O T I C E O F A N N U A L G E N E R A L M E E T I N G

Notice is hereby given that the Annual General Meeting of Fletcher King Plc will be held at 61 Conduit Street, London
W1S 2GB on 20 September 2012 at 9.00am for the following purposes:

1 To receive and adopt the Directors’ Reports and Accounts for the financial year ended 30 April 2012.

2.To declare a final dividend for the financial year ended 30 April 2012.

3 To re-elect R E G Goode as a Director, who retires by rotation in accordance with the Company’s Articles of

Association and who offers himself for re-election.

4 To re-elect D H Stewart as a Director who retires by rotation in accordance with the Company’s Articles of Association

and who offers himself for re-election.

Biographical details regarding these Directors are included in the accompanying Report and Accounts.

5 To re-appoint Nexia Smith & Williamson as auditors to hold office from the completion of the meeting to the
conclusion of the next meeting at which the accounts are laid before the Company, at a remuneration to be determined
by the Directors.

To consider and, if thought fit, to pass the following resolutions of which resolution number 6 will be proposed as an
ordinary resolution and resolutions number 7 and number 8 will be proposed as special resolutions.

6 ORDINARY RESOLUTION

That the Directors of the Company be and are hereby authorised generally and unconditionally for the purpose of
Section 551 of the Companies Act 2006 (such authority to be in substitution for all previous authorities granted to
the Directors for the purpose of the said Section 551 or Section 80 of the Companies Act 1985) to allot shares in
the Company up to a maximum number of 1,790,221 of the unissued ordinary shares of 10p each of the Company
with a nominal value of £179,022.10, such authority to expire at the conclusion of the next Annual General Meeting
of the Company and at any time thereafter pursuant to any offer or agreement made by the Company before the
expiry of this authority.

7 SPECIAL RESOLUTION

That, subject to the passing of resolution 6, the Directors of the Company be and are hereby empowered pursuant
to Section 570 of the Companies Act 2006 to allot equity securities (as defined in Section 560 of that Act) pursuant
to the authority conferred by the immediately preceding resolution as if subsection (1) of Section 561 of the said
Act did not apply to any such allotment, provided that this power shall be limited:
(a) To the allotment of equity securities in connection with a rights issue in favour of ordinary shareholders where
the equity securities respectively attributable to the interests of all ordinary shareholders are proportionate (as nearly
as may be) to the respective numbers of ordinary shares held by them but subject to such other exclusions or
arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements for legal or
practical problems under the laws of any territory or the requirements of any recognised regulatory body or any stock
exchange in any country; and
(b) to the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate
nominal value of £46,049 (being 5% of the said issued capital of the Company), and shall expire at the conclusion
of the next Annual General Meeting of the Company unless it is renewed by special resolution of the Company in
general meeting, provided that if the Company before such expiry shall make an offer or agreement which would
or might require securities to be allotted after such expiry, the Directors of the Company may allot equity securities
in pursuance of such offer or agreements as if the power conferred hereby had not expired.

T H I R T Y- S I X

N O T I C E O F A N N U A L G E N E R A L M E E T I N G

8 SPECIAL RESOLUTION

That the Company is hereby generally and unconditionally authorised to make one or more market purchases (within
the meaning of Section 693(4) of the Companies Act 2006) of ordinary shares of 10p each in the capital of the
Company (‘ordinary shares’) provided that: (a) The maximum number of ordinary shares hereby authorised to be
purchased is 460,000; (b) the maximum price which may be paid for an ordinary share is 5% above the average of
the middle market quotations for shares of the same class as derived from The London Stock Exchange Daily
Official List for the ten dealing days immediately prior to the date of the purchase of such shares and the minimum
price that may be paid for an ordinary share is the nominal value of 10p per share; (c) the authority hereby conferred
shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2013 or eighteen months
from the passing of this resolution, if earlier, unless such authority is renewed prior to such time; and (d) the
Company may enter into a contract to purchase ordinary shares under the authority hereby 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 such purchases of ordinary shares in pursuance of any such contract or contracts.

By order of the Board
P E Bailey
Secretary
Fletcher King Plc
10 August 2012

Registered Office:
61 Conduit Street
London W1S 2GB

Notes
(a) A member of the Company entitled to attend and vote at the meeting covered by this notice is entitled to appoint a
proxy or proxies to exercise all or any of his or her rights to attend, speak and to vote at the meeting instead of him
or her. A member of the Company can only appoint a proxy using the procedures set out in these notes and the notes
to the proxy form. A proxy need not be a member of the Company. To be valid the form of proxy must be completed,
signed and deposited at the office of the Company’s registrars not less than 48 hours before the time appointed for
the meeting. Completion of the proxy does not preclude a member from subsequently attending and voting at the
meeting in person if he or she so wishes. If a proxy has been appointed and the member subsequently attends the
meeting in person, the proxy appointment will automatically be terminated.

(b) To change your proxy instructions simply submit a new proxy appointment using the method set out above. Note
that the cut-off time for receipt of proxy appointments (as above) also applies in relation to amended instructions;
any amended proxy appointment received after the relevant cut-off time will be disregarded. Where you require
another hard-copy proxy form in order to change the instructions, please contact the Company Secretary at 61
Conduit Street, London, W1S 2GB. 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.

(c)

In order to revoke a proxy instruction, you will need to inform the Company by sending a hard copy notice clearly
stating your intention to revoke your proxy appointment to the office of the Company’s registrars, Computershare
Investor Services Plc, at PO Box No 1075, The Pavilions, Bridgwater Road, Bristol BS99 6ZY. The revocation
notice must be received by the Company no less than 48 hours before the time appointed for the meeting. 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.

(d)

In accordance with Regulation 41 of the Uncertificated Securities Reg 2001, only those members entered on the
Company’s register of members at 6.00pm on 18 September 2012 or, if the meeting is adjourned, shareholders
entered on the Company’s register of members at 6.00pm on the day which is two days before the day of the
adjourned meeting, shall be entitled to attend and vote at the meeting.

T H I R T Y- S E V E N

N O T I C E O F A N N U A L G E N E R A L M E E T I N G

(e) As at 30 April 2012, the Company’s issued share capital comprised 9,209,779 ordinary shares of 10p each. Each
ordinary share carries the right to one vote at a general meeting of the Company and, therefore, the total number
of voting rights in the Company as at 30 April 2012 is 9,209,779.

(f)

In order to facilitate voting by corporate representatives at the Meeting, arrangements will be put in place at the
Meeting so that:

(i)

(ii)

if a corporate member has appointed the Chairman of the Meeting as its corporate representative with
instructions to vote on a poll in accordance with the directions of all the other corporate representatives for
that member at the Meeting, then, on a poll, those corporate representatives will give voting directions to the
Chairman and the Chairman will vote (or withhold a vote) as corporate representative in accordance with
those directions; and

if more than one corporate representative for the same corporate member attends the Meeting but the corporate
member has not appointed the Chairman of the Meeting as its corporate representative, a designated corporate
representative will be nominated, from those corporate representatives who attend, who will vote on a poll and
the other corporate representatives will give voting directions to that designated corporate representative.

Corporate members are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators
on proxies and corporate representatives – www.icas.org – for further details of this procedure. The guidance
includes a sample form of representation letter to appoint the Chairman as a corporate representative as described
in (i) above.

(g) Except as provided above, members who have general queries about the meeting should contact the Company
Secretary A member may not use any electronic address provided in this notice or in any related documents
(including the proxy form) to communicate with the Company for any purposes other than those expressly stated.

T H I R T Y- E I G H T

F O R M O F P R O X Y

For use at the Annual General Meeting of the Fletcher King Plc to be held at 9.00 am on 20 September 2012.

I/We (Block capitals please)

of

being (a) member(s) of the Company, hereby appoint the Chairman of the Meeting or (see Note 5)

as my/our proxy to attend and vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 20
September 2012 at 9.00 am and at any adjournment of the meeting.

I/We direct my/our proxy to vote on the Resolutions set out in the notice convening the Annual General Meeting as follows:

For

Against

Vote Withheld

To Adopt Ordinary Resolution 1

To Adopt Ordinary Resolution 2

To Adopt Ordinary Resolution 3

To Adopt Ordinary Resolution 4

To Adopt Ordinary Resolution 5

To Adopt Ordinary Resolution 6

To Adopt Special Resolution 7

To Adopt Special Resolution 8

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.

Signature

Date

Notes
1

Please indicate with an “X” in the spaces provided how you wish your votes to be cast. If you do not indicate how your votes are
to be cast the proxy will vote as he thinks fit or abstain. The “Vote Withheld” option is provided to enable you to instruct your
proxy not to vote on any particular resolution. Please note that a “Vote Withheld” has no legal effect and will not be counted in
the calculation of the votes “For” or “Against” a resolution. 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.

2

3

4

5

6

In the case of a corporation, this form of proxy must be executed under the common seal or under the hand of an officer or duly
authorised attorney. In the case of joint holders, the vote of the senior who tenders a vote whether in person or by proxy shall be
accepted to the exclusion of the votes of the other registered holders and for this purpose seniority shall be determined by the order
in which the names stand in the register of members.

To be effective this form of proxy, and the power of attorney or other authority (if any) under which it is signed or a notarially
certified or office copy of such power or authority, must be deposited at the office of the Company’s registrars at
Computershare Investor Services Plc, at PO Box No 1075, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, not less than 48
hours before the time of the meeting.

Any alterations made to this form of proxy should be initialled.

If you wish to appoint a proxy other than as above please delete the reference to the Chairman and insert the name of your proxy
or proxies, who need not be members of the Company, in the space provided. A proxy must attend the meeting in person to
represent you. Your appointment of a proxy will not preclude you from attending and voting at the meeting. If you wish your
proxy to make any comments on your behalf, you will need to appoint someone other than the chairman and give them the relevant
instructions directly. Where you appoint as your proxy someone other than the Chairman, you are responsible for ensuring that
they attend the meeting and are aware of your voting intentions.

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. To appoint more than one proxy, please contact the
Company registrars for more information at the address provided in note 3 sufficiently in advance of the meeting so that the
requirements of note 3 may be complied with.

T H I R T Y- N I N E

Third fold and tuck in

BUSINESS REPLY SERVICE
License No. SWB 1002

d
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f

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Computershare Investor Services Plc
PO Box 1075
The Pavilions
Bridgwater Road
Bristol
BS99 6ZY

11

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