Mountview estAtes P.L.C.
Annual Report and Accounts 2014
M
o
u
n
t
v
i
e
w
E
s
t
a
t
e
s
P.
L
.
C
.
A
n
n
u
a
l
R
e
p
o
r
t
a
n
d
A
c
c
o
u
n
t
s
2
0
1
4
Mountview Estates P.L.C.
Annual Report and Accounts 2014
Strategic Report
Contents / ABout us
Mountview Estates P.L.C. was
established in 1937 as a small
family business based in North
London by two brothers, Frank
and Irving Sinclair.
Mountview Estates P.L.C. is a Property Trading
Company. The Company owns and acquires
tenanted residential property throughout the UK
and sells such property when it becomes vacant.
StratEgIC rEPOrt
FINaNCIaL StatEMENtS
01 Our Performance
02 Where we Operate
03 Chairman’s Statement
04 Review of Operations
gOvErNaNCE
11 Directors and Advisers
12 Directors’ Report
16 Statement of Directors’
Responsibilities
17 Corporate Governance
20 Remuneration Report
25 Consolidated Statement of
Comprehensive Income
26 Consolidated Statement of
Financial Position
27 Consolidated Statement of
Changes in Equity
28 Consolidated Cash Flow
Statement
29 Notes to the Consolidated
Financial Statements
46 Independent Auditors’
Report to the Members of
Mountview Estates P.L.C.
49 Company Balance Sheet
under UK GAAP
50 Notes to the Financial
Statements under UK
GAAP
56 Independent Auditors’
Report to the Members of
Mountview Estates P.L.C.
on the Parent Company
Financial Statements
58 Table of Comparative
Figures
OthEr INFOrMatION
59 Notice of Meeting
62 Shareholders’ Information
1
Our PerfOrmance
£66.2m
£38.6m
£35.4m
Turnover
+17%
(2013: £56.6m)
Gross profit
+14.5%
(2013: £33.7m)
Profit before tax
+22.5%
(2013: £28.9m)
£32.2m
Profit before tax
excluding investment
properties revaluation
+22.4%
(2013: £26.3m)
£265.6m
Equity holders’ funds
+8.9%
(2013: £244.0m)
729.5p
Earnings per share
+28.4%
(2013: 568p)
£68.1
Net assets per share
+8.8%
(2013: £62.6)
200p
Dividend per share
+14.3%
(2013: 175p)
Mountview Estates P.L.C. advises its shareholders
that, following the issue of the final results, the
relevant dates in respect of the proposed final
dividend payment of 150p per share are as follows:
Ex-dividend date
Record date
Payment date
16 July 2014
18 July 2014
18 August 2014
Governanceother informationfinancial statementsStrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 2
Strategic Report
where we OPerate
The figures below are calculated as a percentage of the total
value of Inventories of Trading properties.
1
Portfolio percentage
4.58%
Derbyshire,
Leicestershire,
Nottinghamshire
4
Portfolio percentage
23.31%
London (South)
2
Portfolio percentage
13.08%
Remainder of England
and Wales
5
Portfolio percentage
22.27%
London (North)
3
Portfolio percentage
14.00%
Kent, Surrey, Sussex,
Dorset, Hampshire,
Isle of Wight
6
Portfolio percentage
22.76%
Bedfordshire, Berkshire,
Essex, Buckinghamshire,
Cambridgeshire,
Hertfordshire, Oxfordshire,
Norfolk, Suffolk,
Middlesex,
Northamptonshire
Mountview Estates P.L.C. Annual Report and Accounts 2014 3
chairman’s statement
I am delighted to report both increased turnover and increased
profits for the year ended 31 March 2014.
Profit before tax for the year was £35.4 million
(2013: £28.9 million) representing an increase of £6.5 million
and growth of 22.5%. This performance reflects a very buoyant
housing market in our core geographical area. These results are
the second highest in the history of the Company and this must
be considered an excellent achievement. Equally pleasing is
the increase in Shareholders’ funds of 8.9% to £265.6 million
together with a reduction in borrowings of 16.5% to
£78 million.
These results have meant that we are able to recommend an
increased final dividend of 150p per share in respect of the
year ended 31 March 2014. This final dividend is payable on
18 August 2014 to Shareholders on the Register of Members
as at 18 July 2014. This will make a total dividend for the year
ended 31 March 2014 of 200p per share (2013: 175p per
share). The increased dividend is still more than three times
covered by the earnings per share.
In the year, we have continued to purchase new trading stock.
We have been able to invest £23.9 million in new properties.
The buoyant housing market has brought more players into
our core market and this has resulted in greater competition for
new purchases. However, we believe we have continued to buy
wisely, investing in properties located in our key locations and
where we see good value and potential profits.
Whilst it has never been a requirement to value the trading
stock, it has been a concern for some of the Shareholders.
The Board has decided to undertake the valuation of the
trading stock and anticipate that the results will be published
together with the Interim Report 2014.
The results are made with a stable, experienced and
committed executive and management team and staff.
We continue to develop managerial staff and this is an
important part of business progression.
Duncan Sinclair has been with the Company for 43 years,
during which he has occupied the positions of Company
Secretary, Director, Executive Chairman and Chief Executive.
The Company has grown and developed significantly
since Duncan became Chief Executive in 1990. The search
to find and establish Duncan’s successor is on going
and now intensifying. This is an important phase in the
Company’s development.
I am pleased to announce that Mrs Mhairi Jarvis will join our
Board as an independent Non-Executive Director with effect
from 1 July 2014. Mhairi is a Chartered Surveyor, who brings to
this role a wealth of experience in the UK residential property
sector. She is a graduate of the University of Aberdeen in
Land Economy and has worked for over 15 years in a variety
of private practice and consulting roles with auction houses,
agencies and asset managers.
On 23 June 2014, Mountview Estates P.L.C. was included in the
FTSE All-Share Ex-Multinational Index for the first time.
This is my first statement as Chairman since we made the
decision to split the combined role of Chairman and Chief
Executive at last year’s Annual General Meeting. I am grateful
for the support of my fellow Directors and wish to express my
thanks to them.
J.B. Fulton FCA
Non-Executive Chairman
Governanceother informationfinancial statementsStrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 4
review Of OPeratiOns
The Group’s business model is simple.
We are a property trading company that
buys tenanted properties at a discount to
notional vacant possession value and then
sells them when they become vacant.
OuR PORTFOLIO
Categories of property held as trading stock
The Group trades in the following categories:
• Regulated tenanted (residential) units
• Ground rent units
• Life tenancy units
• Assured tenancies
A unit is a property, however large or small, whether freehold
or leasehold, which is held subject to one tenancy.
Analysis of the Group Trading portfolio by type as at
31 March 2014
Regulated, Assured Shorthold tenancies,
and other
Assured tenancies
Ground rents
Life tenancies
No. of
units
Cost
£m
2,424
271.75
231
1,127
329
23.04
1.84
24.69
Analysis of the Group Trading portfolio at the lower of cost
and estimated net realisable value by geographical location
as at 31 March 2014
Regulated,
Assured
Shorthold
tenancies,
Assured
tenancies
and other
£m
70.66
71.08
Ground
rents
£m
Life
tenancies
£m
0.70
0.86
0.21
2.96
Portfolio
%
22.27
23.31
39.43
0.05
5.49
14.00
66.59
0.12
6.42
22.76
13.81
0.11
0.80
4.58
33.22
-
8.81
13.08
London (North)
London (South)
Kent, Surrey,
Sussex, Dorset
Hampshire,
Isle of Wight
Bedfordshire,
Berkshire, Essex,
Buckinghamshire,
Cambridgeshire,
Hertfordshire,
Oxfordshire,
Norfolk, Suffolk,
Middlesex,
Northamptonshire
Derbyshire,
Leicestershire and
Nottinghamshire
Remainder of
England and Wales
Mountview Estates P.L.C. Annual Report and Accounts 2014Strategic Report
5
Austerfield Pumping Station
Brookfield Court, Hayes
Woodlands Walk, Gu17
We achieved sales of £48.36 million (2013: £39.96 million),
demonstrating the liquidity of the Portfolio. The average sales
price achieved was £270,000 (2013: £225,000).
£66.2m
£38.6m
Revenue
(2013: £56.6m)
Gross profit
(2013: £33.7m)
SALES
At Mountview, we have a relatively straightforward yet proven
way of working: we buy tenanted residential properties and
sell them when they become vacant. We buy both regulated
tenancy and life tenancy property. The former, which are
characterised by rental returns below market value balanced by
earlier settlement, are becoming increasingly short in supply.
Since the Housing Act 1988 no new such tenancies have
been created.
Life tenancy stock has nominal rental income, is bought at a
greater discount to vacant possession value and has a higher
margin on sale. A key attraction of this sector to Mountview is
the fact that property maintenance is usually the responsibility
of the life tenant and this leads to lower ongoing costs to
ourselves. We carry out regular checks to ensure that all
properties are maintained in good condition.
During the financial year the Group has sold the following
number of units:
Sales Price (£)
4 million
1 million – 1,500,000 million
500,000 – 1 million
below 500,000
No. of
units
1
1
14
163
Location
London
London
London
London and
other
Governanceother informationfinancial statementsStrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 6
review Of OPeratiOns continued
4
1
3
2
£23.9m
Kingsway, Mortlake
Perrers Road, W6
Mountview Estates P.L.C. Annual Report and Accounts 2014Strategic ReportAnalysis of acquisitions1. Regulated tenancies 1522. Life tenancies 13. Ground rents 224. Assured tenancies 5 7
PuRCHASES
The majority of our residential properties that are subject to a
regulated tenancy are concentrated in London and the South
East. Returns from the regulated portfolios are derived from a
combination of below market rental income and trading profits
on the sale of property, when the property falls vacant and the
reversionary gain is crystallised.
Most properties acquired are unimproved and therefore of
low average value. One of the core Mountview capabilities is
to actively manage these properties: we identify opportunities
to add value by carrying out refurbishments prior to their sale.
The greatest gains are available at the upper end of the market
and this is where we concentrate our refurbishment activities.
These properties are sold by private treaty.
The Group residential trading properties are carried in the
balance sheet at the lower of cost and net realisable value.
Net realisable value is the estimated net proceeds of sale if the
property were to be vacant at the date of the balance sheet.
RenTAl inCoMe
The Company’s rental income is derived from five
different sources:
Regulated tenancies
Assured tenancies
Assured shorthold tenancies
Life tenancies
Ground rents
AnAlysis of ACquisiTions
Regulated tenancies
Life tenancies
Ground rents (or created)
Assured tenancies (or created)
No. of
units
152
1
22
5
180
Year ended
31 March 2014
Cost £m
23.01
0.16
0.03
0.73
23.93
Where possible we still target those properties where the rent
is capped and where our team has identified opportunities
to make key improvements. For example, a relatively
modest investment can ensure that a property benefits from
services and amenities that have been lacking in the past.
In many cases, this leads directly to a substantial increase in
rental income.
The operating contribution from the core business (comprising
profits on sale of trading properties and rental income)
is analysed in Note 4 on page 35.
The above analysis does not include legal and commission
expenses directly related to the acquisition of properties or any
repairs of a capital nature.
Chester Close, uxbridge
Governanceother informationfinancial statementsStrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 8
review Of OPeratiOns continued
SuMMARY PROSPECTS FOR THE GROuP
The professional knowledge and skills of our compact team
ensured that we were able to purchase properties for a total
of £23.9 million.
Looking ahead, we believe that we will identify similar
opportunities in the coming months. Our strength is based
on a tight focus on our core business of regulated tenancies
together with a prudent approach. We have kept gearing low
and borrowing under control.
Since the end of the financial year we have continued to sell
and purchase properties and we are pleased with the results
achieved. Given our financial strength, we believe that we are
in a strong position to take advantage of any prime purchasing
opportunities which may arise in the near future.
invesTMenT CoMpAnies
The analysis of the investment portfolio as at 31 March 2014 is
as follows:
Louise Goodwin Limited
A.L.G. Properties Limited
2014
34 units
4 units
2013
37 units
4 units
All of the properties are situated in Belsize Park, London NW3,
one of the capital’s most prestigious locations.
The only significant departures from the Company’s normal
activities, these investment companies were purchased in
1999 when we took the opportunity to build a presence in
one of the best locations in London. Although rental returns
have proven to be less significant than we anticipated, the
investment portfolio has nevertheless generated consistently
strong cash flow.
When the properties become vacant, we refurbish and sell
them. During the financial year, we disposed of three units for
£2.373 million in Louise Goodwin Limited. (2013: disposed
of one unit for £1.88 million in Louise Goodwin Limited and
one freehold for £59,000 in A.L.G. Properties Limited).
ouTlook
We will continue to maintain our strategy for the investment
portfolio, deriving rental income in the short to medium term
and capital through sales when units become vacant. We are
prepared to refurbish the properties and sell them by private
treaty to discerning purchasers who actively seek new homes in
this area.
As Belsize Park is an extremely desirable area with high levels
of demand, the outlook remains positive.
vAluATions
Valuations increased during the year by £3.185 million.
The properties comprised within the investment portfolio have
been revalued externally for the purpose of these accounts.
The value attributed to each individual property reflects the
change in its condition where appropriate and any adjustment
resulting from changes in market circumstances.
Details of the valuation of the investment portfolio are
disclosed in Note 13 to the Consolidated Financial Statement
on pages 39 to 40.
Louise Goodwin Limited
34 units
(2013: 37 units)
A.L.G. Properties Limited
4 units
(2013: 4 units)
Mountview Estates P.L.C. Annual Report and Accounts 2014Strategic Report 9
total disposals
in investment companies
£2.373m
Belsize Park Gardens
Belsize Park
Governanceother informationfinancial statementsStrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 10
review Of OPeratiOns continued
RevieW of business And pRinCipAl Risks
Details of the Group’s performance during the year and
expected future developments are contained in the Chairman‘s
Statement. The Group has established the following Financial
Key Performance Indicators:
financial key performance indicators
Turnover (£m)
Profit before tax (£m)
56.6
66.2
35.4
28.9
2013
2014
2013
2014
+17%
+22.5%
Interest cover in relation
to profit before interest
and taxation (x)
16
7.5
Earnings per share (p)
729.5
568
2013
2014
2013
2014
Risk review
The Group’s business is subject to a number of different risk
factors but management considers the key risks to the Group’s
business are:
The Group’s inability to maintain the size of its Regulated
Tenancy portfolio
The Group may experience difficulty in replacing asset sales
at Vacant Possession with sufficient stock.
The Group has performed creditably in replacing assets over
the last seven years and would expect to be able to make
acquisitions for the next few years.
Management succession in place over the medium term
Significant operating expertise is concentrated in a small team
of executive and senior management. New management
is being recruited and trained to operate in the Group’s
highly specialised market. The business requires a medium
term, evolutionary approach to management changes to
minimise risk to the business. The continuing development of
managerial staff is an important part of business progression.
The Group is intensifying the search to recruit a successor to
the Chief Executive.
House price inflation becomes severe house price deflation
House prices tend to behave in a cyclical fashion; a shortage
of supply is nothing new and mortgage approvals are
gently recovering, but a period of house price deflation, as
experienced in 2008, may return over the medium term.
+28.4%
The Group’s exposure is weighted towards the stronger
London and South East markets and this geographical area
is typically a consistent above-average performer.
Net assets per share (£)
Gearing ratio (%)
62.6
68.1
27.5
22.4
2013
2014
2013
2014
+8.8%
With relatively low leverage the Group can continue to
maintain its borrowings on a floating rate basis. Currently the
risk of the Group’s debt not being refinanced on maturity is
viewed as small.
The Group maintains a good relationship with its bankers and
has recently refinanced its facilities with Barclays and HSBC
Bank for a further period of five years on market terms.
The Group is conservatively geared and operates well within
financial covenants.
Mountview Estates P.L.C. Annual Report and Accounts 2014Strategic Report 11
r
e
p
o
r
t
s
t
r
a
t
e
g
c
i
G
O
v
E
R
N
A
N
C
E
s
t
a
t
e
m
e
n
t
s
i
n
f
o
r
m
a
t
o
n
i
i
f
n
a
n
c
a
l
i
o
t
h
e
r
Governance
directOrs and advisers
d.M. sinclair fCA (Ceo)
Joined the Company as Company Secretary in 1977, became
a Director on 1 January 1982 and succeeded his late father as
Chairman on 5 June 1990. Fellow of the Institute of Chartered
Accountants in England and Wales.
Mrs. M.M. bray fCCA
Joined the Company in 1996 and became Company Secretary.
Became a Director on 1 April 2004. Fellow of the Association
of Chartered Certified Accountants.
non-exeCuTive diReCToRs
J.b. fulton fCA* (non-executive Chairman)
Joined the Company as a Non-Executive Director on 1 January
2007. Became a Non-Executive Chairman on 14 August
2013. Fellow of the Institute of Chartered Accountants in
England and Wales. He has held senior financial roles in
multinational companies.
* J.B. Fulton is considered to be independent for the purposes of the UK Corporate
Governance Code.
A.J. sinclair fCA
Joined the Company as a Non-Executive Director on
1 November 2010. Fellow of Institute of Chartered Accountants
in England and Wales. Son of the late Frank Sinclair, co-founder
of the Company. Retired as Head of Correspondent Banking
for National Bank of Canada but remains as an Adviser on
International Banking.
Mrs. M.l. Jarvis MRCs*
Joined the Company as a Non-Executive Director on 1 July
2014. Member of the Royal Institution of Chartered Surveyors.
She has held various roles with property companies, including
Jones Lang LaSalle, and now acts as an Adviser to clients
in a range of property sectors, including residential and
commercial property.
* Mrs. M.L. Jarvis is considered to be independent for the purposes of the UK Corporate
Governance Code.
secretary and Registered office
Mrs. M.M. Bray FCCA
Mountview House,
151 High Street,
Southgate,
London N14 6EW
bankers
HSBC Bank Plc
60 Queen Victoria Street,
London EC4N 4TR
Barclays Bank Plc
One Churchill Place,
London E14 5HP
Auditors
BSG Valentine
Lynton House,
7–12 Tavistock Square,
London WC1H 9BQ
solicitors
Norton Rose Fulbright LLP
3 More London Riverside,
London SE1 2AQ
Registrars and Transfer office
Capita Asset Services
The Registry,
34 Beckenham Road,
Beckenham,
Kent BR3 4TU
brokers
N+1 Singer
One Bartholomew Lane,
London EC2N 2AX
financial Advisers
SPARK Advisory Partners Limited
5 St John’s Lane,
London EC1M 4BH
Mountview Estates P.L.C. Annual Report and Accounts 2014
12
directOrs’ rePOrt
The Directors have pleasure in presenting to the Members their 77th Annual Report together with the Financial Statements for the
year ended 31 March 2014.
1. ResulTs And dividends
The results for the year are set out in the Income Statement on page 25.
The Directors recommend the payment of a final dividend of 150p per share. The dividend will be paid on 18 August 2014,
subject to approval at the Annual General Meeting on 13 August 2014, to Shareholders on the register at the close of business
on 18 July 2014.
2. ACTiviTies
The principal activities of the Company and its subsidiary undertakings are as follows:
parent Company
Mountview Estates P.L.C.
Property Trading
subsidiary undertakings (wholly-owned)
Hurstway Investment Company Limited Property Trading
Louise Goodwin Limited
A.L.G. Properties Limited
Property Investment
Property Investment
3. RoTATion And AppoinTMenT of diReCToRs
In accordance with the Company’s Articles of Association, Mr. A.J. Sinclair retires from the Board by rotation and being eligible,
offers himself for reappointment. A resolution for his reappointment will be proposed at the Annual General Meeting.
In accordance with the Company’s Articles of Association, Mrs. M.L. Jarvis was appointed as a Director during the course of the
year and offers herself up for election. A resolution for her election will be proposed at the Annual General Meeting.
4. sHARe CApiTAl
The authorised share capital of the Company as at 31 March 2014 was £250,000 divided into 5,000,000 Ordinary Shares of 5p
of which 3,899,014 were in issue (2013: 3,899,014).
The rights and obligations attaching to the Company’s shares, as well as the powers of the Company’s Directors, are set out in the
Company’s Articles of Association, a copy of which can be viewed on the Company’s website at www.mountviewplc.co.uk
The Company’s Articles of Association can only be amended by special resolution of the Shareholders.
5. diReCToRs’ inTeResTs in sHARe CApiTAl
The number of Ordinary Shares in the Company in which the Directors and their families were interested is as follows:
ordinary shares of 5p each
Mr. D.M. Sinclair including the following holding of Sinclair Estates Limited – 54,165
Mr. D.M. Sinclair is a Director of the above company
Mrs. M.M. Bray
Mr. A.J. Sinclair, including the following holding of Viewthorpe (Old) Limited – 28,208 and 8532630
Canada Inc. – 44,276, both companies being wholly-owned by Mr. A.J. Sinclair, and the holding of
8532729 Canada Inc. – 60,000, which Company is wholly-owned by Mrs. Mary Gillin Sinclair
All the above interests are beneficial.
31 March
2014
1 April
2013
538,383
12,302
538,383
12,302
132,484
132,484
There have been no changes in the interest of the Directors in the share capital of the Company between 31 March 2014 and
16 July 2014.
Mountview Estates P.L.C. Annual Report and Accounts 2014Governance
13
r
e
p
o
r
t
s
t
r
a
t
e
g
c
i
G
O
v
E
R
N
A
N
C
E
s
t
a
t
e
m
e
n
t
s
i
n
f
o
r
m
a
t
o
n
i
i
f
n
a
n
c
a
l
i
o
t
h
e
r
6. noTifiAble inTeResTs in sHARe CApiTAl
As at 16 July 2014, the following disclosures of major holdings of voting rights have been made (and have not been amended
or withdrawn) to the Company pursuant to the requirements of Disclosure and Transparency Rule 5:
Mr. Phillip Wheater, Mr. David Wright and Mr. Alistair Sinclair, Trustees of the Frank and
Daphne Sinclair Grandchildren Settlement*
Withers Trust Corporation Limited as Trustee of the W.D.I. Sinclair Grandchildren Settlement*
Withers Trust Corporation Limited as Trustee of the Doris Sinclair Will Trust*
Mrs. M.A. Murphy**
Mrs. E. Langrish-Smith**
Mrs. A. Williams**
Mrs. S. Simkins**
* denotes indirect holding
** denotes combined direct and indirect holding
Ordinary Shares
of 5p each
% of Issued
Share Capital
393,193
179,400
118,100
596,745
307,000
145,650
148,220
10.08
4.60
3.03
15.31
7.87
3.73
3.80
7. enviRonMenTAl MATTeRs And soCiAl/CoMMuniTy issues
Given the size of the Company and the nature of its business as a property trading company, the Company does not currently
have any specific policies in place in relation to environmental, social, human rights or community issues, but keeps these issues
under review.
8. GReenHouse GAs eMissions disClosuRe
Recently implemented Mandatory Greenhouse Gas (GHG) reporting regulation requires quoted companies to report their Scope
1 and Scope 2 emissions. It is not mandatory to report Scope 3 emissions. Mountview Estates P.L.C. has committed to report
Scope 1, Scope 2, and limited Scope 3 emissions under Mandatory Greenhouse Gas Reporting legislation.
Using an operational control approach, the Company assessed its boundaries to identify all of the activities and facilities for which
it is responsible and reported on all of the material greenhouse gas (GHG) emissions from Scopes 1 and 2. Relevant activity data
were identified, collected and provided to an independent consultant. The validity and completeness of the data were checked
by the independent consultant and used to calculate the greenhouse gas emissions for the Company. The calculations performed
follow the ISO-14064-1:2006 standard and give absolute and intensity factors for company’s emissions.
The results show that total gross GHG emissions in the period were 412.4 tonnes of CO2e, comprised of the following:
• Direct Emissions (Scope 1) amounted to 75.6 tonnes of CO2e or 18% of the total
• Indirect Emissions (Scope 2) amounted to 255.8 tonnes of CO2e or 62% of the total
• Indirect Other Emissions (Scope 3) amounted to 81.0 tonnes of CO2e or 20% of the total.
The results are presented below.
Table 1: Emissions data
Type of emissions
Direct (Scope 1)
Indirect (Scope 2)
Activity
Natural Gas
Owned Company Vehicles
subtotal
Electricity
Subtotal
Indirect Other (Scope 3)
Well To Tank All Scopes
subtotal
ToTAl
tCo2e
% of Total
3.3%
15.1%
18.3%
62.0%
62.0%
19.6%
19.6%
13.5
62.1
75.6
255.8
255.8
81.0
81.0
412.4
Mountview Estates P.L.C. Annual Report and Accounts 2014
14
directOrs’ rePOrt continued
8. GReenHouse GAs eMissions disClosuRe continued
Table 2: Intensity ratio
Type of emissions
Total Gross Emissions (tCO2e)
Revenue (£)
Tonnes of gross Co2e per million Gb £ turnover
tCo2e
412.4
66,000,000
6.2
Figure 1: Source of emissions
Group Emissions (tCO2e)
256
81
62
13
Electricity
(kWh)
Well To Tank
Owned
Company Vehicles
Natural Gas
NOTES
1. Well to Tank (WTT) Emissions: “Well to Tank” – (WTT) is the term used to describe the factors that use to be in Scope 2, total indirect GHG in Defra 2012. These factors enable organisations to
account for the emissions associated with extracting, refining, and transportation of the raw fuel to the vehicle, asset or process under scrutiny.
2. Mountview is responsible for electricity charges in the communal areas for 1,800 flats and the Company pays £30 electricity charge per flat. The approximate total electricity consumption for
communal areas is 355,633 kWh or 158 tCO2e (38% of Company’s total emissions).
9. eMployees
The Company provides regular training relating to the use of computer software and the general professional development of the staff
concerned. A great number of our employees have worked for the Company for many years and there is very little turnover of staff.
10. diveRsiTy
As at 31 March 2014, the Company had a female Executive Director, Mrs. Marie Bray, who has been on the Board since 2004,
representing 25% of Board membership. As disclosed above Mrs. M.L. Jarvis joined the Board with effect from 1 July 2014, taking
female Board membership representation to 40%.
The Company has 7 Senior Managers (who are not Directors), of which 2 are female.
Of the 26 total employees in the Company, 10 are male and 16 female
11. siGnifiCAnT AGReeMenTs
Certain banking agreements to which the Company is a party (described in Note 18 to the Consolidated Financial Statements) alter or
terminate upon a change of control of the Company following a takeover bid.
There are no other significant agreements to which the Company is a party that take effect, alter or terminate upon a change of control
of the Company following a takeover bid.
There are no contractual or other agreements or arrangements in place between the Company and third parties which, in the opinion
of the Directors, are essential to the business of the Company.
12. diReCToRs’ inTeResTs in ConTRACTs
There was no contract in existence during or at the end of the financial year in which a Director of the Company is, or was, materially
interested, and which is or was significant in relation to the Company’s business.
13. diReCToRs’ And offiCeRs’ liAbiliTy insuRAnCe
The Company purchases liability insurance covering the Directors and Officers of the Company and its Subsidiary undertakings.
The Company’s Articles of Association at Article 163 permit the provision of indemnities to the Directors (at the discretion of the
Board), which constitute qualifying third party indemnity and qualifying pension scheme indemnity provisions under the Companies
Act 2006.
Mountview Estates P.L.C. Annual Report and Accounts 2014Governance 15
14. finAnCiAl Risk MAnAGeMenT obJeCTives And poliCies
Financial risk management objectives and policies are set out in Note 3 to the Consolidated Financial Statements on pages
34 and 35. Details regarding the Company’s use of financial instruments are set out in Note 20 to the Consolidated Financial
Statements on pages 43 and 44.
r
e
p
o
r
t
s
t
r
a
t
e
g
c
i
G
O
v
E
R
N
A
N
C
E
s
t
a
t
e
m
e
n
t
s
i
n
f
o
r
m
a
t
o
n
i
i
f
n
a
n
c
a
l
i
o
t
h
e
r
15. ReMuneRATion poliCy
The Company’s Shareholders will be asked to approve the Remuneration Report and the Remuneration Policy, which forms part of
the Remuneration Report, contained in the Annual Report and Accounts at the Annual General Meeting to be held on 13 August
2014 and accordingly, such resolutions will be proposed at the Annual General Meeting.
16. CoRpoRATe GoveRnAnCe
The Directors’ statement on Corporate Governance is set out on pages 17 to 19.
17. HeAlTH And sAfeTy
The Group is committed to achieving a high standard of health and safety. The Group regularly reviews its health and safety
policies and practices to ensure that appropriate standards are maintained. The gas supply and appliances within all of the
Group’s relevant residential properties are independently inspected under the Gas Safety (Installation and Use) Amended
Regulations 1996 and certificates of compliance obtained.
18. donATions
During the year the Group made charitable donations of £64,150 (2013: £46,160).
The main beneficiaries of such charitable donations are: Willow Foundation, Cancer Research UK and Cystic Fibrosis.
There were no political donations made during the year (2013: £nil).
19. GoinG ConCeRn bAsis
The Directors continue to adopt the going concern basis in preparing the accounts.
The financial position of the Group including key financial ratios is set out in the Review of Business and Prospects.
The Group is historically profitable, has considerable liquidity and recently reviewed its long-term borrowing facilities with the
banks. As a result, the Directors believe the Group is very well placed to manage its business risks successfully and have a good
expectation that both the Company and the Group have adequate resources to continue their operations. Further detailed
information is set out on page 33.
20. posT bAlAnCe sHeeT evenTs
There are no material events that have occurred subsequent to the end of the financial year that require disclosure.
21. AudiToRs
Messrs. BSG Valentine have indicated their willingness to continue in office and a resolution for the reappointment
of BSG Valentine as auditors for the ensuing year will be proposed at the Annual General Meeting.
By Order of the Board
M.M. Bray
Company Secretary
18 July 2014
Mountview Estates P.L.C. Annual Report and Accounts 2014
16
statement Of directOrs’
resPOnsibilities
The Directors are responsible for preparing the Annual Report, the Directors’ Remuneration 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
prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by
the European Union, and the Parent Company financial statements in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 Group
and the Company 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 judgements and accounting estimates that are reasonable and prudent;
• state whether IFRSs as adopted by the European Union and applicable UK Accounting Standards have been followed, subject
to any material departures disclosed and explained in the Group and Parent Company financial statements respectively; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will
continue in business.
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
enable them to ensure that the financial statements and the Directors’ remuneration report comply with the Companies Act
2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They 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.
Each of the Directors, whose names and functions are listed on page 11 confirm that, to the best of their knowledge:
• the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair
view of the assets, liabilities, financial position and profit of the Group;
• the Strategic Report on pages 1 to 10 includes a fair review of the development and performance of the business and
the position of the Group, together with a description of the principal risks and uncertainties that it faces;
• so far as the Directors are aware, there is no relevant audit information of which the Company’s auditors are unaware; and
• the Directors have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any
relevant audit information and to establish that the Company’s auditors are aware of that information.
The maintenance and integrity of the Mountview Estates P.L.C. website is the responsibility of the Directors; the work carried
out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for
any changes that may have occurred to the financial statements since they were initially presented on the website.
By Order of the Board
M.M. Bray
Company Secretary
18 July 2014
Mountview Estates P.L.C. Annual Report and Accounts 2014Governance 17
r
e
p
o
r
t
s
t
r
a
t
e
g
c
i
G
O
v
E
R
N
A
N
C
E
s
t
a
t
e
m
e
n
t
s
i
n
f
o
r
m
a
t
o
n
i
i
f
n
a
n
c
a
l
i
o
t
h
e
r
cOrPOrate gOvernance
Mountview Estates P.L.C. is a family controlled company. There is a concert party in existence, whose net aggregate shareholdings
amount to approximately 53% of the issued share capital of the Company.
The Company has applied the principles and provisions set out in the UK Corporate Governance Code as issued by the Financial
Reporting Council, a copy of which can be found at www.frc.org.uk/corporate/ukcgcode.cfm, including both the main principles
and the supporting principles throughout the accounting period except as detailed in this section.
The UK Corporate Governance Code requires that there should be a clear division of responsibilities at the head of the Company
between the running of the Board and the executives’ responsibility for running the Company’s business. In addition, the UK
Corporate Governance Code requires (for smaller Companies) there to be at least two independent Non-Executive Directors
and that the Company should have at least three Non-Executive Directors. In this regard the Board has carefully considered
the number of independent Non-Executive Directors and as from 1 July appointed Mrs. M. Jarvis as an independent Non-
Executive Director.
Each Board member has responsibility to ensure that the Group’s strategies lead to increased shareholder value.
THe boARd
As at the year ended 31 March 2014, the Board comprised the CEO, one Executive Director and two Non-Executive Directors
(of which one is considered to be independent for the purpose of the UK Corporate Governance Code). All Directors have
access to independent professional advice at the expense of the Company and to the services of the Company Secretary
who is responsible to the Board for ensuring the correct procedures are followed.
In addition to ad-hoc meetings arranged to discuss particular transactions and events, the full Board meets at least four times a
year and retains full and effective control over the Group’s activities. The following table sets out details of the number of meetings
of the Board (excluding ad hoc meetings) and of the Audit and Remuneration Committees during the year and the attendance at
these meetings by the Directors who were in office during the period.
Meetings
Full Board
Audit Committee
Remuneration Committee
Nomination Committee
Mr. D.M.
Sinclair
Mrs. M.M.
Bray
Mr. A.J.
Sinclair
Mr. J.B.
Fulton
7
1
2
2
7
1
1
6
7
2
3
2
7
2
3
6
Day-to-day management is delegated to the Executive Board which focuses on major transactions, business growth, strategy,
cash management and control.
There is regular communication with the Non-Executive Directors in order to keep them informed on the Company’s operations.
All members of the Board are subject to the re-election provisions of the Articles of Association which require that one third of
their number offer themselves for re-election each year and, on appointment, at the first Annual General Meeting (AGM) after
appointment. Details of those Directors offering themselves for reappointment are set out in the Directors’ Report on page 12.
The Articles of Association of the Company contain the following provisions relating to the appointment and replacement
of Directors:
• The Company may, by ordinary resolution, appoint a person who is willing to act to be a Director, either to fill a vacancy
or as an addition to the existing Board.
• The Board has the power to appoint any person who is willing to act as a Director, either to fill a vacancy or as an addition
to the existing Board. Any Director appointed by the Board is required to retire at the first AGM of the Company following
his or her appointment.
• The total number of Directors (other than any alternate Directors) must not be more than 12 or less than two.
• In addition to any power to remove a Director conferred by Section 168 of the Companies Act 2006, the Company may,
by ordinary resolution remove any Director before the expiration of his or her period of office, but without prejudice to any
claim for damages which he or she may have for breach of any contract of service between him or her and the Company.
The Company may then appoint another person who is willing to act, to be a Director in his or her place in accordance
with the Articles of Association.
Mountview Estates P.L.C. Annual Report and Accounts 2014
18
cOrPOrate gOvernance continued
GoinG ConCeRn
After making diligent enquiries, including the review of future anticipated cash flows and compliance with banking covenants,
the Directors have a reasonable expectation that the Group and Company have adequate resources to continue in existence
for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the accounts.
diReCToRs – peRfoRMAnCe evAluATion
The Directors consider that the small size of the Group and Board does not warrant a formal evaluation process. However,
performance of the Directors is evaluated on an ongoing basis by the Board. Based on the close working relationships of Board
and the Committees, the Directors are satisfied with both the performance of the Board and its Committees. In making decisions
throughout the year, the Board is strongly aware of its responsibilities to the Company’s Shareholders.
Any areas of concern are addressed during regular management or Board meetings.
ReMuneRATion CoMMiTTee
The Remuneration Committee comprises Mr. J.B. Fulton (Non-Executive Director and Non-Executive Chairman) and
Mr. A.J. Sinclair (Non-Executive Director). The Committee, which is chaired by Mr. A.J. Sinclair, monitors, reviews and makes
recommendations to the Board on all elements of the remuneration of the Executive Directors. The Committee meets twice
a year and the aim of the Committee is to provide total remuneration packages which attract, retain and motivate Executive
Directors of the appropriate calibre.
Mr. D.M. Sinclair, the CEO of the Company, is invited by the Remuneration Committee members to attend one meeting or part
of any meeting as and when appropriate.
No Director is involved in deciding his/her own remuneration and the remuneration of the Non-Executive Directors is determined
by the full Board.
The report of Directors’ Remuneration is set out on pages 20 to 24.
noMinATion CoMMiTTee
In accordance with best practice of Corporate Governance Mr. J.B. Fulton is the Chairman and all the Directors of the Company
are members. There were six meetings during this year and key matters considered were:
• Appointment of an independent external search consultant.
• Reviewing and interviewing potential Non-Executive Directors.
The Nomination Committee keeps the composition of the Board and possible Directors appointments under regular review and
when the Board and Nomination Committee determine that it may be appropriate to appoint further Directors it would engage
an independent external search consultant to assist in the process.
For the purpose of identifying a Non-Executive candidate during the year, an external search was commissioned, using an
independent Executive search firm, Trust Associates Ltd., which has no other connection with the Company.
The Nomination Committee has recommended and obtained approval from the Full Board for the nomination of an independent
Non-Executive Director Mrs. M.L. Jarvis.
AudiT CoMMiTTee
The Audit Committee comprises Mr. J.B. Fulton (Non-Executive Director and Non-Executive Chairman) and Mr. A.J. Sinclair
(Non-Executive Director). The Committee, which is chaired by Mr. J.B. Fulton, has clear terms of reference agreed by the Board
and is responsible for ensuring that the Group’s system of financial control is adequate. It also keeps under review the cost
effectiveness of the audit and the independence and objectivity of the auditors.
This includes the approval of any non-audit service fees above a relatively normal level.
The Committee is satisfied that the taxation services provided by BSG Valentine are overseen by partners and staff who are
excluded from the audit procedure.
Mr. D.M. Sinclair and Mrs M.M. Bray attended one of the meetings held by the Audit Committee.
Mountview Estates P.L.C. Annual Report and Accounts 2014Governance 19
The Committee meets twice a year and one of these meetings is with the external auditors without an Executive Director in
attendance. The Chairman of the Audit Committee reports to the Board on matters discussed with external auditors. The Audit
Committee monitors the integrity of the financial statements and reviews the interim and annual financial statements before
submission to the Board. Further the Committee seeks to ensure that the external auditors are independent.
r
e
p
o
r
t
s
t
r
a
t
e
g
c
i
i
f
n
a
n
c
a
l
i
o
t
h
e
r
Based on the Committee’s assessment of the external auditor’s performance, the Committee has provided the Board with its
recommendation to the Shareholders on the re-appointment of BSG Valentine as external auditors for the year ended 31 March
2015. There are no contractual obligations restricting the Committee’s choice of auditor.
Mr. J.B. Fulton is a Fellow of the Institute of Chartered Accountants in England and Wales.
The Audit Committee has satisfied itself that the Company complies with the principles set out in the Smith Report.
CoMMuniCATions WiTH sHAReHoldeRs
The Board as a whole acknowledges its responsibility for ensuring satisfactory dialogue with Shareholders and the Chairman is
available to meet Shareholders on request to discuss specific concerns they may have. The Company principally communicates
with and updates its Shareholders as to its progress by way of the Annual Report and Accounts and half yearly interim reports
which are posted on the Company’s website www.mountviewplc.co.uk. Investors may use the Company’s Annual General
Meeting to communicate with the Board. The entire Board will be available at the Annual General Meeting for Shareholders
to ask questions. The Board including the Non-Executive Directors, is available throughout the year to listen to the views of
Shareholders and meetings are held during the year when appropriate.
G
O
v
E
R
N
A
N
C
E
s
t
a
t
e
m
e
n
t
s
i
n
f
o
r
m
a
t
o
n
i
Risk MAnAGeMenT & inTeRnAl finAnCiAl ConTRol
Details of the Company’s risk management profile are included in paragraph 14 in the Report of the Directors on page 15
and in Note 3 to the Consolidated Financial Statements on pages 34 to 35.
An ongoing process for identifying, evaluating and managing the significant risks faced by the Group was in place throughout the
period from 1 April 2013 to the date of approval of the Annual Report and Accounts. The effectiveness of this process is reviewed
annually by the Board.
The Directors are responsible for establishing and maintaining the Group’s system of internal financial control. Internal control
systems in any group are designed to identify, evaluate and manage risks faced by that group and meet the particular needs of
that group and the risks to which it is exposed. By their nature such system can provide reasonable but not absolute protection
against material misstatement or loss. Due to its size, the Group does not have a dedicated internal audit function. The key
procedures which the Directors have established with a view to providing effective internal financial control are as follows:
identification of business risks – The Board is responsible for identifying the major business risks faced by the Group, such
as fluctuations in interest rates, inflation rates, fluctuations in consumer spending, employment levels and for determining
the appropriate course of action to manage those risks.
Management structure – The Board has overall responsibility for the Group and there is a formal schedule of matters specifically
reserved for decision by the Board.
Corporate accounting – Responsibility levels are communicated throughout the Group as part of the corporate accounting
procedures. These procedures set out authorisation levels, segregation of duties and other control procedures.
quality and integrity of personnel – The integrity and competence of personnel is ensured through high recruitment standards
and close Board supervision.
Monitoring – Internal financial control procedures are reviewed by the Board as a whole. These reviews embrace the provision
of regular information to management, and monitoring of performance and key performance indicators.
By Order of the Board
M.M. Bray
Company Secretary
18 July 2014
Mountview Estates P.L.C. Annual Report and Accounts 2014
20
remuneratiOn rePOrt
This is the first new style of remuneration report since the passage of the Enterprise and Regulatory Reform Act 2013.
We have pleasure in complying with the additional detail required in the new reporting requirements and would confirm
that there have been no changes to the policy in the current year. We believe that this will provide even more assurance for
shareholders that our remuneration is considered, fair and fully aligned with shareholder interests.
A.J. Sinclair
Chairman of the Remuneration Committee
unAudiTed infoRMATion
Remuneration Committee
The Remuneration Committee, as constituted by the Board is responsible for the determination of the remuneration of
the Executive Directors of Mountview Estates P.L.C. The Remuneration Committee currently comprises one independent
Non-Executive Director Mr. J.B. Fulton and Non-Executive Director Mr. A.J. Sinclair who is the Chairman of the Remuneration
Committee. The Board as a whole considers the remuneration of the Non-Executive Directors. External advisers were not used in
the financial year under review.
ReMuneRATion poliCy
The tables below summarise the main elements of the remuneration packages for the Executive Directors.
Purpose and link to strategy
Operation
Opportunity
Performance metrics
Changes in year
Purpose and link to strategy
Operation
Opportunity
Performance metrics
Changes in year
Base salary
To provide a competitive level of non-variable remuneration aligned to market practice for similar
sized organisations; to reflect the seniority of the post and expected contribution to the delivery
of the Company’s strategy.
Basic salaries are reviewed by the Remuneration Committee annually with uplifts effective from
1 April being by reference to cost of living, responsibilities and market rates, as for all employees.
The basic salary for the CEO will be increased by 20%, and for the Finance Director by 6%
Variable rate of increases in salaries of up to 10% will be applied to staff
The uplifts will be effective from 1 April 2014.
N/A
None
Benefits
To aid recruitment and retention of high-quality executives.
Car allowance
Private medical insurance
Life assurance
N/A
N/A
The CEO ceased to receive a car allowance and the increase in his basic salary is reflected above
Purpose and link to strategy
Operation
Opportunity
Performance metrics
Changes in year
Pension
To aid recruitment and retention of high-quality executives.
The Company will contribute into a personal pension arrangement for all of the
Executive Directors.
The pension contribution is based on 15% of basic salary and bonuses and it will take effect from
1 April 2014.
N/A
None
Mountview Estates P.L.C. Annual Report and Accounts 2014Governance
21
r
e
p
o
r
t
s
t
r
a
t
e
g
c
i
G
O
v
E
R
N
A
N
C
E
s
t
a
t
e
m
e
n
t
s
i
n
f
o
r
m
a
t
o
n
i
i
f
n
a
n
c
a
l
i
o
t
h
e
r
Purpose and link to strategy
ReMuneRATion poliCy continued
Annual bonus
To incentivise performance over a 12-month period and reward personal performance as agreed
with the Remuneration Committee.
The level of bonus awarded is determined at the discretion of the Remuneration Committee who
consider the level within a range appropriate to the interests of the Company.
In assessing personal performance the Remuneration Committee takes into account the Group’s
corporate performance within the property sector and other similar sized companies.
Opportunity
Operation
non-executive directors
The Non-Executive Director receives fees of £36,000 p.a. The Non-Executive Chairman receives fees of £60,000 p.a.
The Non-Executive Directors are not entitled to bonuses, benefits or pension contributions.
pensions
The Company contributes 10% of the total of the Executive Directors’ gross annual salaries and bonuses to a Stakeholder Pension
Scheme. This scheme is available to all employees of the Company.
Approach to Recruitment Remuneration
When setting the remuneration package for a new Executive Director, the Committee will apply the same principles and
implement the policy as set out above.
Base salary will be set at a level appropriate to the role and experience of the Executive Director being appointed. This may
include agreement on future increases up to a market rate, in line with increased experience and / or responsibilities, subject to
good performance, where it is considered appropriate.
In relation to external appointments, the Committee may structure a remuneration package that it considers appropriate to
recognise awards or benefits that will or may be forfeited on resignation from a previous position, taking into account timing
and valuation and such other specific matters as it considers relevant. The policy is that the maximum payment under any such
arrangements (which may be in addition to the normal variable remuneration) should be no more than the Committee considers
is required to provide reasonable compensation to the incoming Director.
In case of an employee who is promoted to the position of Executive Director, it is the Company’s policy to honour pre-existing
award commitments in accordance with their terms.
Non-Executive Director appointments will be through a Non-Executive Director Agreement. Non-Executive Directors’ base
fees, including those of the Chairman, will be set at a competitive market level, reflecting experience, responsibility and
time commitment.
Non-Executive Directors do not receive any performance-related remuneration, or any benefits.
Details of the Directors’ Service Agreements and letters of appointment with the Company, and the unexpired terms there under
are as follows:
D.M. Sinclair
M.M. Bray
J.B. Fulton
A.J. Sinclair
Contract date
8 August 2002
1 April 2004
1 January 2013
1 November 2010
Unexpired term
No fixed term
No fixed term
17 months
27 months
Notice period
12 months
12 months
none
none
The Executive Directors are entitled to a compensation payment after a change in control of the Company. Such compensation
payment (subject to deduction of income tax as required by law and any other sums owed by the Executive Director to the
Company) is equal to the Executive Director’s gross remuneration as reported in the Company’s last audited accounts as
announced to the London Stock Exchange.
Each of the Executive Directors who served during the year has a service agreement, which can be terminated on one year’s
notice by either party.
Non-Executive Directors are entitled to accrued fees only due to them as at the date of termination of their appointment.
Mountview Estates P.L.C. Annual Report and Accounts 2014
22
remuneratiOn rePOrt continued
illustration of the application of the remuneration policy
D.M. Sinclair (£’000)
M.M. Bray (£’000)
Minimum
100%
419
Minimum
100%
293
Salary, pension and benefits
Bonus
The Bonus element of remuneration is calculated by reference to minimum and maximum range which depends on appropriate
factors and in the light of these what the Remuneration Committee determines might be a commensurate amount.
provision on payment for loss of office
If an Executive Director’s employment is to be terminated, the Committee policy in respect of the Service Agreement, in the
absence of a breach of the Service Agreement by the Director, is to agree a termination payment based on the value of base
salary and contractual pension amounts and benefits that would have accrued to the Director during the contractual notice
period. The policy is that, as is considered appropriate at the time, the departing Director may work, or be placed on garden
leave, for part of his notice period (for up to maximum period of 6 months) or receive a payment in lieu of notice in accordance
with the provision of the Service Agreement. The Committee will also honour all other contractual entitlements of the Director
which may apply to the circumstances of the termination of the Director’s employment.
In addition, where the Director may be entitled to pursue a claim against the Company in respect of his/her statutory employment
rights or any other claim arising from the employment or its termination, the Committee will be entitled to negotiate settlement
terms (financial or otherwise) with the Director that the committee considers to be reasonable in all circumstances and in the best
interests of the Company and to enter into a settlement agreement with the Director to effect both the terms agreed under the
Service Agreement and the settlement of any additional statutory or other claims, including bonus payments and to record any
agreement in relation to bonus payment in line with the policies described above.
The Committee will consider whether a departing Director should receive an annual bonus in respect of the financial year in
which the termination occurs or in respect of any period of the financial year following termination for which the director has
been deprived of the opportunity to earn annual bonus. If the employment ends by reason of redundancy, retirement with the
agreement of the Company, ill health or disability or death or for any other reason considered appropriate by the Committee, the
Director may be considered for a bonus payment.
iMpleMenTATion RepoRT
AudiTed infoRMATion
director’s Total Remuneration single figure Table
2014
executive
D.M. Sinclair
Mrs M.M. Bray
non-executive
J.B. Fulton
(appointed as a Non-Executive Chairman 14 August 2013)
A.J. Sinclair
salary
£000
bonus
£000
benefits
in kind
£000
pensions
contributions
£000
300
250
51
36
637
240
180
–
–
420
65
–
–
–
65
54
43
–
97
Total
£000
659
473
51
36
1,219
Mountview Estates P.L.C. Annual Report and Accounts 2014Governance
23
r
e
p
o
r
t
s
t
r
a
t
e
g
c
i
G
O
v
E
R
N
A
N
C
E
s
t
a
t
e
m
e
n
t
s
i
n
f
o
r
m
a
t
o
n
i
i
f
n
a
n
c
a
l
i
o
t
h
e
r
director’s Total Remuneration single figure Table continued
2013
executive
D.M. Sinclair
K. Langrish-Smith (deceased 17 December 2012)
Mrs M.M. Bray
non-executive
J.B. Fulton
A.J. Sinclair
unAudiTed infoRMATion
Ceo single figure
2014
2013
2012
2011
2010
D.M. Sinclair
D.M. Sinclair
D.M. Sinclair
D.M. Sinclair
D.M. Sinclair
Salary
£000
Bonus
£000
Benefits
in kind
£000
Pensions
contributions
£000
300
112
250
36
36
734
240
45
180
–
–
465
68
12
–
–
–
80
54
15
43
–
–
112
Total
£000
662
184
473
36
36
1,391
CEO single figure of
total remuneration
£’000
659
662
520
523
552
Percentage change in remuneration of CEO and employees. The percentage change in remuneration between 2014 and 2013
for the CEO and for all employees in the Group was:
CEO
Employee population
performance graph
(-0.4%)
4.8%
The graph below is prepared in accordance with the Directors’ Remuneration Report Regulations 2002 and illustrates the
Company’s performance compared to a broad equity market index over the past five years. As the Company is a constituent of
the FTSE All-Share Real Estate Index, that index is considered the most appropriate form of broad equity market index against
which the Company’s performance should be plotted. Performance is measured by Total Shareholder Return as represented by
share price performance and dividend.
450
400
350
300
250
200
150
100
50
0
2009
Mountview Estates – Total Return Index
FTSE All Share R/E IVST SVS £ – Total Return Index
2010
2011
2012
2013
2014
The graph looks at the value of £100 invested in Mountview Estates P.L.C. on 31 March each year compared to the value of £100
invested in the FTSE All-Share Real Estate Index.
Mountview Estates P.L.C. Annual Report and Accounts 2014
24
remuneratiOn rePOrt continued
Relative importance of spend on pay
The difference in actual expenditure between 2013 and 2014 on remuneration for all employees in comparison to profit after tax
and distributions to shareholders by way of dividend are set out in the tabular graphs below:
Profit after tax (£m)
Dividend (£m)
Total employee pay (£m)
28.4
22.1
6.823
7.79
2.5
2.6
2013
2014
2013
2014
2013
2014
+6.29m
+0.975m
+0.1m
statement of implementation of remuneration policy in the current financial year
With effect from 1 April 2014 the basic salary of CEO will be increased by 20% and the Finance Director by 6%.
CEO will be rewarded in accordance with all the elements set out in the policy
details of the Remuneration Committee
The Remuneration Committee currently comprises one independent Non-Executive Director and one Non-Executive Director.
Details of the Directors who were members of the Committee during the year are disclosed on page 18.
statement of voting at general meeting
At the AGM held on 14 August 2013 the Directors’ Remuneration Report received the following votes based on Proxy forms
from shareholders.
For
Against
Total votes cast (for and against)
Votes withheld
Total votes cast (including withheld votes)
directors’ interests in share capital
Total number of votes
1,143,542
100
1,143,642
–
1,143,642
% of votes cast
99.9
0.01
100
–
–
The number of Ordinary Shares in the Company in which the Directors and their families were interested is as follows:
ordinary shares of 5p each
Mr. D.M. Sinclair including the following holding of Sinclair Estates Limited – 54,165
Mr. D.M. Sinclair is a Director of the above company
Mrs. M.M. Bray
Mr. A.J. Sinclair, including the following holding of Viewthorpe (Old) Limited – 28,208 and 8532630
Canada Inc. – 44,276, both companies being wholly-owned by Mr. A.J. Sinclair, and the holding of
8532729 Canada Inc. – 60,000, which Company is wholly-owned by Mrs. Mary Gillin Sinclair
31 March
2014
1 April
2013
538,383
12,302
538,383
12,302
132,484
132,484
All the above interests are beneficial.
There have been no changes in the interest of the Directors in the share capital of the Company between 31 March 2014 and
16 July 2014.
Mountview Estates P.L.C. Annual Report and Accounts 2014Governance
25
cOnsOlidated statement Of
cOmPrehensive incOme
for the year ended 31 march 2014
Revenue
Cost of sales
Gross profit
Administrative expenses
Gain on sale of investment properties
operating profit before changes in fair value of investment properties
Increase in fair value of investment properties
profit from operations
Change in fair value of derivatives
Net finance costs
profit before taxation
Taxation – current
Taxation – deferred
Taxation
profit attributable to equity shareholders
Basic and diluted earnings per share (pence)
The notes on pages 29 to 45 are an integral part of these consolidated financial statements.
year ended
31 March 2014
£000
Year ended
31 March 2013
£000
66,150
(27,555)
38,595
(4,256)
214
34,553
3,185
37,738
–
(2,344)
35,394
(7,724)
772
(6,952)
28,442
729.5p
56,646
(22,906)
33,740
(3,759)
84
30,065
2,602
32,667
563
(4,302)
28,928
(6,511)
(272)
(6,783)
22,145
568.0p
Notes
4
4
13
13
8
19
9
11
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 26
cOnsOlidated statement Of
financial POsitiOn
for the year ended 31 march 2014
Assets
non-current assets
Property, plant and equipment
Investment properties
Current assets
Inventories of trading properties
Trade and other receivables
Cash at bank
Total assets
equity and liabilities
Capital and reserves attributable to equity holders of the Company
Share capital
Capital redemption reserve
Capital reserve
Other reserves
Retained earnings
non-current liabilities
Long-term borrowings
Deferred tax
Current liabilities
Bank overdrafts and loans
Trade and other payables
Current tax payable
Total liabilities
Total equity and liabilities
Approved by the Board on 18 July 2014.
As at
March 2014
£000
As at
March 2013
£000
Notes
12
13
15
16
21
22
22
22
23
18
19
18
17
2,116
29,396
31,512
2,337
27,852
30,189
321,323
316,626
1,578
1,217
324,118
355,630
1,198
900
318,724
348,913
195
55
25
56
195
55
25
56
265,260
265,591
243,641
243,972
69,800
5,522
75,322
8,168
2,004
4,545
14,717
90,039
355,630
84,950
6,294
91,244
8,427
1,631
3,639
13,697
104,941
348,913
D.M. Sinclair
Chairman
M.M. Bray
Director
The notes on pages 29 to 45 are an integral part of these consolidated financial statements.
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements
27
cOnsOlidated statement Of
changes in equity
for the year ended 31 march 2014
Share
capital
£000
Notes
Capital
reserve
£000
Capital
redemption
reserve
£000
Cash flow
hedge
reserve
£000
Other
reserves
£000
Retained
earnings
£000
Total
£000
Changes in equity for year
ended 31 March 2013
Balance as at 1 April 2012
Reduction in reserve
Profit for the year
Dividends
Balance at 31 March 2013
Changes in equity for year
ended 31 March 2014
Balance as at 1 April 2013
Profit for the year
Dividends
20
10
23
10
195
25
55
(1,040)
1,040
195
25
55
195
25
55
56
227,928
227,219
1,040
22,145
22,145
(6,432)
(6,432)
56
243,641
243,972
56
243,641
243,972
28,442
28,442
(6,823)
(6,823)
56
265,260
265,591
–
–
–
balance at 31 March 2014
195
25
55
The notes on pages 29 to 45 are an integral part of these consolidated financial statements.
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
28
cOnsOlidated cash flOw
statement
for the year ended 31 march 2014
Cash flows from operating activities
Profit from operations
Adjustment for:
Depreciation
Loss on disposal of property, plant and equipment
Gain on disposal of investment properties
(Increase) in fair value of investment properties
operating cash flows before movement in working capital
(Increase) in inventories
(Increase)/Decrease in receivables
Increase in payables
Cash generated from operations
Interest paid
Income taxes paid
net cash inflow from operating activities
investing activities
Proceeds from disposal of investment properties
Capital expenditure on investment properties
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
net cash inflow from investing activities
Cash flows from financing activities
Increase in borrowings
Repayment of borrowings
Equity dividend paid
net cash (outflow) from financing activities
net increase/(decrease) in cash and cash equivalents
Opening cash and cash equivalents
Cash and cash equivalents at end of year
year ended
31 March 2014
£000
Year ended
31 March 2013
£000
Notes
37,738
32,667
138
42
(214)
(3,185)
34,519
(4,697)
(380)
373
29,815
(2,344)
(6,908)
20,563
2,373
(518)
(19)
150
1,986
–
(15,305)
(6,823)
(22,128)
421
(6,565)
(6,144)
163
3
(84)
(2,602)
30,147
(15,554)
173
246
15,012
(4,302)
(5,675)
5,035
1,939
(567)
(74)
–
1,298
687
(5,050)
(6,432)
(10,795)
(4,462)
(2,103)
(6,565)
13
13
12
18(a)
The notes on pages 29 to 45 are an integral part of these consolidated financial statements.
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements
29
nOtes tO the cOnsOlidated
financial statements
for the year ended 31 march 2014
1. GeneRAl infoRMATion
Mountview Estates P.L.C. (the Company) and its subsidiaries (the Group) is a property trading company with a portfolio in England
and Wales.
The Company is a public limited liability company incorporated, domiciled and registered in England.
The address of its registered office is: 151 High Street, Southgate, London N14 6EW. The Company website is:
www.mountviewplc.co.uk
The Company has its premium listing on the London Stock Exchange.
These consolidated financial statements have been approved for issue by the Board of Directors on 18 July 2014.
2. ACCounTinG poliCies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
(a) basis of preparation
The Group’s financial statements have been prepared under the historical cost convention, as modified by the revaluation
of investment properties, and in accordance with applicable International Financial Reporting Standards, (IFRS) as adopted
by the EU.
The Company has elected to prepare its Parent Company financial statements in accordance with UK GAAP. These are presented
on pages 49 to 55.
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies.
The areas involving a higher degree of judgement or complexity or areas where assumptions and estimates are significant to the
Consolidated Financial Statements are disclosed in Note 2(t) “Estimates and Judgements”.
(b) basis of consolidation
The Group’s financial statements incorporate the results of Mountview Estates P.L.C. and all of its subsidiary undertakings made up
to 31 March each year. Control is achieved where the Company has the power to govern the financial and operating policies of an
investee enterprise so as to obtain benefits from its activities.
The Group exercises control through 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.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
On acquisition, the identifiable assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the
date of acquisition. The purchase method has been used in consolidating the subsidiary financial statements.
All significant inter company transactions, balances and unrealised gains on transactions between group companies are
eliminated on consolidation within the consolidated accounts.
Consistent accounting policies have been used across the Group.
(c) segment reporting
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and
returns that are different from those of other business segments.
The Group has identified two such segments as follows:
• core portfolio
• residential investments.
Above segments are UK based. More details are given in Note 5.
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 30
nOtes tO the cOnsOlidated
financial statements continued
for the year ended 31 march 2014
2. ACCounTinG poliCies continued
(d) income Tax
The charge for current tax 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 accounted for using the balance sheet liability method in respect of temporary differences arising from differences
between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base used in the
computation of taxable profit. In principle, deferred tax liabilities are 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. Such assets and liabilities are not recognised if the temporary difference arises from the initial
recognition (other than in a business combination) of other assets and liabilities in a transaction, which affects neither the tax profit
nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the
Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax is calculated at the rates that are expected to apply when the asset or liability is settled. Deferred tax is charged or
credited 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.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
(e) Revenue
Revenue includes proceeds of sales of properties, rents from properties, which are held as trading stock, investment and other
sundry items of revenue before charging expenses.
Rental income is recognised over the rental period.
Sales of properties are recognised on legal completion as in the Directors’ opinion this is the point at which the substantial risks
and rewards of ownership have been transferred.
(f) dividend distribution
Dividend distribution to the Company’s Shareholders is recognised as an expense in the Group’s financial statements in the period
in which the dividends are approved.
(g) interest expense
Interest expense for borrowings is recognised within “finance costs” in the income statement using the effective interest rate
method. The effective interest method is a method of calculating the financial liability and of allocating the interest expense over
the relevant period.
(h) property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the item. 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.
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life of
that asset using the straight-line method as follows:
Freehold property
– 2%
Fixtures and fittings and office equipment – 20%
Computer equipment
– 25%
Motor vehicles – reducing balance method – 20%
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements 31
2. ACCounTinG poliCies continued
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each financial year. An asset’s
carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its estimated
recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are
included in the Income Statement.
(i) impairment of assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are
subject to amortisation or depreciation are reviewed for impairment whenever events or changes in circumstances indicate that
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows (cash generating units). Any impairment is recognised in the Income Statement in the year in which it occurs.
(j) investment property
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the companies
in the consolidated group, is classified as investment property.
Investment property is measured initially at its cost including related transaction costs.
After initial recognition, investment property is carried at fair value. Fair value is based on active market prices adjusted, if
necessary, for any difference in the nature, location or condition of the specified asset. If this information is not available the Group
uses alternative valuation methods such as recent prices or less active markets or discounted cash flow projections.
Subsequent expenditure is included in the carrying amount of the property 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 costs are charged to the income statement during the financial period in which they are incurred.
Gains or losses arising from changes in the fair value of the Group’s investment properties are included in the income statement
of the period in which they arise.
(k) inventories – trading properties
These comprise residential properties all of which are held for resale, and are shown in the financial statements at the lower of
cost and estimated net realisable value. Cost includes legal fees and commission charges incurred during acquisition together
with improvement costs. Net realisable value is the net sale proceeds which the Group expects on sale of a property in its current
condition with vacant possession. Where residential properties are sold tenanted, net realised value is the current market value net
of associated selling costs. There were no such sales during the financial year. The analysis of the Group revenue as at 31 March
2014 is on page 35.
(l) pension costs
The Group operates a stakeholder contribution pension scheme for employees. The annual contributions payable are charged
to the Income Statement. The Group has no further payment obligations once the contributions have been paid.
(m) financial instruments
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group has become a party to the
contractual provisions of the instrument. Trade and other receivables and trade and other payables and cash and cash equivalents
are measured at their net realisable value.
(n) bank borrowings
Loans are recorded at fair value at initial recognition and thereafter at amortised costs under the effective interest method.
(o) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments
with original maturities of three months or less, and bank overdrafts.
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 32
nOtes tO the cOnsOlidated
financial statements continued
for the year ended 31 march 2014
2. ACCounTinG poliCies continued
(p) Hire purchase agreements
Assets held under hire purchase agreements are capitalised and disclosed under tangible fixed assets at their fair value.
The capital element of the future payments is treated as a liability and the interest is charged to the profit and loss account
on a straight-line basis.
(q) leasing
Rentals payable under operating leases are charged to profit and loss on a straight-line basis over the term of the relevant lease.
(r) derivatives
The Group has not hedge accounted during the year.
(s) impact of standards and interpretations issued
i) New and amended standards issued in the year. At the date of approval of these financial statements, the following
interpretations and amendments were issued, endorsed by the EU and are mandatory for the Group for the first time for the
financial year beginning 1 April 2013. There are no new standards, amendments or interpretations that are effective for the first
time for the current financial year that have had a material impact on the Group.
ii) New and amended standards
− IAS 1, “Financial Statement Presentation” has been amended and introduced the requirement to group items presented
in “other comprehensive income” on the basis of whether they are potentially reclassable to profit or loss subsequently
(reclassification adjustments). The Group has adopted this revised presentation in these financial statements.
− IAS 12, “Deferred Tax: Recovery of Underlying Assets” introduces a rebuttable presumption that deferred tax on investment
properties measured at fair value will be recognised on a sales basis, unless an entity has a business model that would indicate
the investment property will be consumed in the business.
− IFRS 13, ‘Fair value measurement’, provides consistency by making available a single source of guidance on how fair value is
measured. IFRS 13 is applied when fair value measurements or disclosures are required or permitted by other IFRSs. IFRS 13
is effective for annual periods beginning or after 1 January 2013.
iii) New and amended standards not effective
At the date of authorisation of these financial statements, there were a number of new standards, amendments to existing
standards and interpretations in issue that have not been applied in preparing these consolidated financial statements. The Group
has no plan to adopt these standards earlier than the effective date. Those that are most relevant to the Group are set out below.
• IFRS 10, ‘Consolidated Financial Statements’, which establishes a single control model that applies to all entities including
special purpose entities and requirements management to exercise judgement over which entities are required to be
consolidated. IFRS 10 is effective for annual periods beginning on or after 1 January 2014.
• IFRS 12, ‘Disclosures of interests in other entities’ brings together all the disclosure requirements about an entity’s interests
in subsidiaries, joint arrangements, associates and unconsolidated structured entities. IFRS 12 is effective for annual periods
beginning on or after 1 January 2014.
In addition, as part of the IASB’s project to replace IAS 39 ‘Financial Instruments: Recognition and Measurement’, the IASB
has issued the phases of IFRS 9 covering the classification and measurement of financial assets and the accounting for
financial liabilities.
The other phases, covering hedge accounting and impairment, are still to be completed. In December 2011, the IASB decided
that IFRS 9 will be effective for annual periods beginning on or after 1 January 2015. The date for EU adoption is not yet known.
All the above IRFSs, IFRIC interpretations and amendments to existing standards are endorsed by the European Union (‘EU’) at
the date of approval of these financial statements.
The Directors are currently considering the potential impact arising from the future adoption of these standards and
interpretations listed above.
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements 33
2. ACCounTinG poliCies continued
(t) Critical accounting judgements and key areas of estimation uncertainty
Going concern
The Directors are required to make an assessment of the Group’s ability to continue to trade as a going concern.
The two main considerations were as follows:
1. Refinancing of banking facilities
The Group has re-negotiated a £20 million revolving loan facility with HSBC Bank. The termination date is January 2020.
The Group has re-negotiated a £10 million revolving loan facility with HSBC Bank. The termination date is December 2019.
The Group has a £75 million revolving loan facility with Barclays Bank. The termination date of this facility is December 2018.
2. covenant compliance
The core facility has two covenants, Consolidated Gross Borrowings to Consolidated Net Tangible Assets ratio, and also interest
cover ratio. The Group has remained well within both of these covenants during the year.
On the basis of the above, the Directors have a reasonable expectation that the Group and the Company have adequate
resources to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Distinction between investment and trading property
The Group considers the intention at the outset when each property is acquired in order to classify the property as either an
investment or a trading property. Where the intention is to either trade the property or where the property is held for immediate
sale upon receiving vacant possession within the ordinary course of business, the property is classified as trading property.
Where the intention is to hold the property for its long-term rental yield and/or capital appreciation, the property is classified
as an investment property.
Investment properties
In considering the values attributable to the investment portfolio, the following factors are taken into consideration:
• sales of properties within the Group’s portfolio during the preceding 12 months
• sales of properties in the same district whenever the information is available
• published market research concerning the performance of the property market in this region and district
• factors affecting individual properties and units in relation to value, and factors in the district which might affect the values
of individual properties and units.
The valuation of the portfolios was made in accordance with the requirements of the RICS Valuation Standards Manual,
Sixth Edition and International Valuation Standard 40.
Carrying value of trading stock
The Group’s residential trading stock is carried in the balance sheet at the lower of cost and net realisable value.
As the Group’s business model is to sell trading stock on vacancy, net realisable value is the net sales proceeds which the Group
expects on sale of a property with vacant possession.
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 34
nOtes tO the cOnsOlidated
financial statements continued
for the year ended 31 march 2014
2. ACCounTinG poliCies continued
Inventory expected to be settled in more than 12 months
The Board estimate that inventory of £15.7 million will be settled within the next 12 months, with the remaining inventory value
expected to be settled in more than 12 months. This estimation is based on the average cost of sales of inventory over the last
three year period. Mountview’s business, historic and current has involved the purchase for sale of residential properties subject to
regulated tenancies, such properties being sold when vacant possession is obtained.
Regulated tenancies by their nature are not for any specific period of time and in most cases they do not become vacant until the
death of the tenant.
It is difficult to predict with any certainty the time at which Mountview’s inventory properties might become vacant.
3. finAnCiAl Risk MAnAGeMenT obJeCTives And poliCies
1. financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including price risk and cash flow risk) credit risk and
liquidity risk. The Group’s policies on financial risk management are to minimise the risk of adverse effect on performance and to
ensure the ability of the Group to continue as a going concern.
The financial risks relate to the following financial instruments: trade receivables, cash and cash equivalents, trade and other
payables and borrowings.
(a) Market risk
The Group is exposed to market risk through interest rates and availability of credit.
Price risk
• the Group is exposed to property price and property rental risk.
cash flow and fair value interest rate risk
• as the Group has no significant interest bearing assets, its income and operating cash flows are substantially independent of
changes in market interest rates.
Long-term borrowings
• borrowings issued at variable rates expose the Group to cash flow interest rate risk. The Group’s cash flow and fair value interest
rate risk is constantly monitored by the Group’s management.
The Board is confident that based on the historical performance of the Group, the finance costs are sufficiently covered by profits
from operations.
The Group has two covenants covering loan to value ratio and interest cover. These covenants were complied with during the
financial year and we are confident to meet them at the interim stage.
(b) Credit risk
Exposure to credit risk and interest risk arises in normal course of the Group’s business.
The Group has no significant concentration of credit risk. Credit risk arises from cash and cash equivalents as well as credit
exposures with respect to rental customers, including outstanding receivables. The Directors are of the opinion that credit risk is
minimal due to the low level of trade receivables relative to the Balance Sheet totals. Regulated tenants are incentivised through
the benefit of their tenancy agreement to avoid default on their rent.
Lifetime tenancies are generally at low or zero rent and hence suffer minimal credit risk.
(c) Liquidity risk
The Group’s liquidity position is monitored daily by management and is reviewed quarterly by the Board of Directors. The Group
ensures that it maintains sufficient cash for operational requirements at all times. The nature of its business is very cash generative
from its gross rents and sales of trading properties.
In adverse trading conditions, new acquisitions can be minimised, and as a consequence reduce the gearing level and improve
the liquidity. A summary table with majority of financial liabilities is presented in Note 18.
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements 35
3. finAnCiAl Risk MAnAGeMenT obJeCTives And poliCies continued
(d) Capital risk management
The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern. The Group
monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total debt and equity.
Total borrowings
less cash
net borrowings
Total equity
Total borrowings plus equity
Gearing ratio
4. AnAlysis of Revenue And CosT of sAles
All revenue arises in the United Kingdom.
1. Rental income from tenancies of occupied properties. The income is recognised on an accruals basis.
2. Sale of stock properties. This is recognised on the date of legal completion.
Revenue
Gross sales of properties
Gross rental income
Cost of sales
Cost of properties sold
Property expenses
Gross profit
Sales of properties
Net rental income
2014
£000
77,968
(1,217)
76,751
265,591
342,342
22.42%
2013
£000
93,377
(900)
92,477
243,972
336,449
27.5%
2014
£000
2013
£000
48,364
17,786
66,150
21,870
5,685
27,555
26,494
12,101
38,595
39,968
16,678
56,646
16,156
6,750
22,906
23,812
9,928
33,740
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
36
nOtes tO the cOnsOlidated
financial statements continued
for the year ended 31 march 2014
5. seGMenTAl infoRMATion
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and
returns that are different from those of other business segments. The Group monitors its operations in the following segments:
Revenue
Operating profit before changes in
fair value of investment properties
Finance costs
Profit after tax
Assets
Liabilities
Fixed assets
Capital expenditure
Depreciation
property
trading
£000
65,649
34,221
(2,344)
property
investment
£000
501
332
–
326,074
89,832
29,556
207
2014
Group
£000
66,150
34,553
(2,344)
28,442
355,630
90,039
Property
trading
£000
56,198
30,066
(4,302)
Property
investment
£000
448
(1)
316,552
104,684
32,361
257
2013
Group
£000
56,646
30,065
(4,302)
22,145
348,913
104,941
19
92
518
46
537
138
74
117
567
46
641
163
Head office costs have been allocated and included within the Group’s two operating segments. The Group’s two main business
segments operate within the United Kingdom.
6. pRofiT fRoM opeRATions
The operating profit is stated after charging:
Depreciation of tangible fixed assets
Loss on disposal of fixed assets
Auditors’ remuneration
– the audit of the Parent Company and Consolidated Financial Statements
– the audit of the Company’s subsidiaries pursuant to legislation
– tax compliance work
Operating expenses for investment properties
And after crediting:
– net rental income
– administrative charges to related companies (Note 25)
2014
£000
2013
£000
138
42
40
12
9
101
163
3
40
12
9
236
12,101
52
9,928
38
The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on pages 22 to 23.
The Company contributes 3% of the total annual gross salaries and bonuses of each employee to a Stakeholder Pension Scheme.
The average monthly number of employees during the year was as follows:
Office and management
2014
26
2013
24
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements
37
7. sTAff CosTs (inCludinG diReCToRs)
Wages and salaries
Social security costs
Pension costs
directors’ remuneration
2014
£000
2,170
259
169
2,598
2013
£000
2,113
254
112
2,479
Total Directors’ remuneration including salary, bonuses, benefits in kind and pensions contributions
amounted to:
1,219
1,391
8. finAnCe CosTs
Interest on bank overdrafts, and loans
9. inCoMe TAx expense
(a) Analysis of charge in the year
Current tax: UK Corporation Tax 23% (2013: 24%)
Deferred tax: Current year 23% (2013: 24%)
Taxation attributable to the Company and its subsidiaries
(b) factors affecting income tax expense
The charge for the year can be reconciled to the profit per the income statement as follows:
Profit on ordinary activities before taxation
Profit on ordinary activities multiplied by rate of tax 23% (2013: 24%)
Expenses not deductible for tax
Depreciation in excess of capital allowances
Taxation on capital gains
Profit on sale of assets
Marginal relief
Revaluation surplus in subsidiaries not taxed
Deferred tax
Cash flow hedge adjustment
Sundry adjusting items
2014
£000
2,344
2013
£000
4,302
2014
£000
2013
£000
7,724
(772)
6,952
6,511
272
6,783
35,394
8,140
28,928
6,942
34
16
305
(39)
–
(732)
(772)
–
–
25
18
316
(19)
(3)
(624)
272
(135)
(9)
Taxation attributable to the Company and its subsidiaries
6,952
6,783
The deferred tax adjustment relates to the change in fair value of investment properties.
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
38
nOtes tO the cOnsOlidated
financial statements continued
for the year ended 31 march 2014
10. dividends
On 19 August 2013, a dividend of 125p per share (2012: 115p per share) was paid to the Shareholders. On 31 March 2014 a
dividend of 50p per share (2013: 50p per share) was paid to the Shareholders. This resulted in total dividends paid in the year
of £6.82 million (2013: £6.43 million).
In respect of the current year, the Directors propose that a final dividend of 150p per share will be paid to the Shareholders on
18 August. This dividend is subject to approval by the Shareholders at the Annual General Meeting and has not been included
as a liability in these financial statements.
The proposed final dividend for 2014 is payable to all Shareholders on the Register of Members on 18 July 2014. The total
estimated final dividend to be paid is £5.84 million.
11. eARninGs peR sHARe
The calculations of earnings per share are based on the following profits and number of shares.
Net profit for financial year (basic and fully diluted)
2014
£000
2013
£000
28,442
22,145
Weighted average number of Ordinary Shares for basic and fully diluted earnings per share
3,899,014
3,899,014
Basic and diluted earnings per share
729.5p
568.0p
The Company has no dilutive potential Ordinary Shares.
12. pRopeRTy, plAnT And equipMenT
Cost
At 1 April 2013
Additions
Disposals
At 31 March 2014
depreciation
At 1 April 2013
Charge for the year
On disposals
At 31 March 2014
net book value
At 31 March 2013
At 31 March 2014
Property, plant and equipment are located within the UK.
freehold
property
£000
fixtures
and fittings
£000
Motor
vehicles
£000
Computer
equipment
£000
2,671
–
–
2,671
648
53
–
701
2,023
1,970
400
19
(11)
408
202
78
(14)
266
198
142
224
–
(224)
0
119
–
(119)
0
105
0
28
–
–
28
17
7
–
24
11
4
Total
£000
3,323
19
(235)
3,107
986
138
(133)
991
2,337
2,116
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements
39
Total
£000
3,296
74
(47)
3,323
855
163
(32)
986
2,441
2,337
2013
£000
26,537
568
(1,855)
2,602
27,852
12. pRopeRTy, plAnT And equipMenT continued
Freehold
property
£000
Fixtures
and fittings
£000
Motor vehicles
£000
Computer
equipment
£000
Cost
At 1 April 2012
Additions
Disposals
At 31 March 2013
depreciation
At 1 April 2012
Charge for the year
On disposals
At 31 March 2013
net book value
At 31 March 2012
At 31 March 2013
Property, plant and equipment are located within the UK.
13. invesTMenT pRopeRTies
Fair value at 1 April 2013/(2012)
Subsequent expenditure
Disposals
Increase in Fair Value during the year
At 31 March 2014/(2013)
2,671
–
–
2,671
595
53
–
648
2,076
2,023
333
67
–
400
122
80
–
202
211
198
271
–
(47)
224
128
23
(32)
119
143
105
21
7
–
28
10
7
–
17
11
11
2014
£000
27,852
518
(2,159)
3,185
29,396
The sales of investments properties are not included in the Group Revenue.
During the financial year we disposed of three units for a total of £2.373 million.
The difference between the sales price £2.373 million (2013: £1.939 million) and the market fair value £2.159 million
(2013: £1.855 million) of £214,000 (2013: £84,000) is shown in the Consolidated Income Statement as a separate item.
The realised gains on sales are transferred to Reserves in the Group accounts.
louise Goodwin limited and A.l.G. properties limited
The Companies’ freehold and long leasehold properties were valued on 31 March 2014 by an external valuer Martin Angel, FRICS
of Allsop LLP. The valuations are in accordance with the requirements of the RICS Valuation – Professional Standards – Global and
UK Edition, 2014. The properties are all held for investment and Market Values are on the basis that the properties would be sold
subject to any existing leases and tenancies. The valuer’s opinion of Market Value was primarily derived using comparable recent
market transactions on arm’s-length terms.
Allsop LLP has undertaken work for Mountview Estates P.L.C. for in excess of 20 years including acquisitions, disposals
and valuations.
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
40
nOtes tO the cOnsOlidated
financial statements continued
for the year ended 31 march 2014
13. invesTMenT pRopeRTies continued
In relation to Allsop LLP’s preceding financial year, the proportion of the total fees payable by Mountview Estates P.L.C. to the total
fee income of Allsop LLP was less than 5% which is regarded by the RICS as negligible.
The aggregate Fair Value of the Company’s interests in its investment portfolios was:
louise Goodwin limited
• Freehold: £26,248,000 (Twenty-six million, two hundred and forty-eight thousand pounds).
A.l.G. properties limited
• Freehold: £3,148,000 (Three million, one hundred and forty eight thousand pounds).
Information relating to the basis of valuation of investment properties and the judgements and assumption adopted by
management is set out in Note 2(u) “Estimates and Judgements”.
A revaluation surplus of £3.185 million has arisen on valuation of investment properties to Market Value as at 31 March 2014
(2013: surplus of 2.602 million) and this has been taken to the income statement.
The Directors are of the opinion that the fair value equates to the Market Value.
14. invesTMenTs
fixed asset investments
These represent the cost of shares in the following wholly-owned subsidiary undertakings, which are incorporated and operate
in England and Wales. Their results are consolidated in the accounts of the Group, for the period during which they are
subsidiary undertakings.
principal activity
Hurstway Investment Company Limited
Property trading
Louise Goodwin Limited
A.L.G. Properties Limited
Property investment
Property investment
15. invenToRies
Residential properties
16. TRAde And oTHeR ReCeivAbles
Trade receivables
Prepayments and accrued income
Cost
2013
2014
£000
1
15,351
2,924
18,276
2014
£000
2013
£000
321,323
316,626
2014
£000
219
1,359
1,578
2013
£000
339
859
1,198
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
There are no bad or doubtful debts at the year end. There are no material debts past due, and there are no financial assets that
are impaired.
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements
41
17. TRAde And oTHeR pAyAbles
Trade creditors
Other taxes and social security costs
Other creditors
The Directors consider that the carrying amount of trade and other payables approximates their fair value.
17(A) CoMMiTMenTs undeR HiRe puRCHAse AGReeMenT
Future commitments under hire purchase agreements are as follows:
Amounts payable within 1 year
18. bAnk oveRdRAfTs And loAns
Bank overdrafts
Bank loans
Other loans
18.(A) CAsH And CAsH equivAlenTs
Bank overdrafts
Cash
Cash and cash equivalents as at 31 March
Maturity profile of financial liabilities at 31 March 2014 was as follows:
Amounts repayable:
In one year or less
Between one and five years
Over five years
Less: amount due for settlement within 12 months (shown under current liabilities)
Amount due for settlement after 12 months
2014
£000
716
167
1,121
2,004
2013
£000
589
151
891
1,631
2014
£000
–
2013
£000
22
2014
£000
7,361
69,800
807
77,968
2014
£000
(7,361)
1,217
(6,144)
2013
£000
7,465
84,950
962
93,377
2013
£000
(7,465)
900
(6,565)
2014
£000
2013
£000
8,168
43,000
26,800
77,968
(8,168)
69,800
8,427
84,950
–
93,377
(8,427)
84,950
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
42
nOtes tO the cOnsOlidated
financial statements continued
for the year ended 31 march 2014
18.(A) CAsH And CAsH equivAlenTs continued
The average interest rates paid were as follows:
Bank overdrafts and money market loan
Bank loans
Other loans
2014
2.33%
2.78%
1.0%
2013
2.48%
4.31%
1.0%
The Directors consider that the carrying amount of bank overdrafts and loans approximates their fair value.
The other principal features of the Group’s borrowings are as follows.
1. The Group has short-term borrowing facilities of £15 million with Barclays Bank. This facility expires at November 2014 and the
rate of interest payable is:
• 1.75% over LIBOR on £6 million.
• 1.9% over Base rate on £9 million.
Headroom of this facility at 31 March 2014 amounted to £7.6 million (2013: £7.5 million).
2. The Group has renewed its £75 million long-term loan facility with Barclays Bank. This is a five year revolving loan and the
termination date of this facility is December 2018. The rate of interest payable on the loan is 2.1% above LIBOR. The loan is
secured by a cross guarantee between Mountview Estates P.L.C. and its subsidiaries. The loan is not repayable by instalments.
Headroom under this facility at 31 March 2014 amounted to £32 million (2013: £18.5 million).
3. The Group has re-negotiated a £10 million long-term revolving loan facility with HSBC Bank. The termination date for this
facility is December 2019. The rate of interest payable on the new loan is 2.25% above LIBOR. The loan has the benefit of
Negative Pledge. The loan is not repayable by instalments. Headroom under this facility at 31 March 2014 amounted to
£3.2 million (2013: 1.55 million).
The Group has re-negotiated a £20 million long-term revolving loan facility with HSBC Bank. The termination date for this
facility is January 2020. The rate of interest payable on the new loan is 2.25% above LIBOR. The loan has the benefit of a
Negative Pledge. The loan is not repayable by instalments. Headroom under this facility at 31 March 2014 amounted to
£nil (2013: £nil).
4. Other loans consist of loans from connected persons, and companies of which Mr. D.M. Sinclair is a Director. Loans of £806,915
(2013: £962,800) are repayable within one year. Interest payable on these loans is at 0.5% above Barclays Bank Plc base rate.
19. defeRRed TAx
Analysis for financial reporting purposes
Deferred tax liabilities
Net position at 31 March
The movement for the year in the Group’s net deferred tax position was as follows:
At 1 April
(Credit)/Debit to income for the year
At 31 March
2014
£000
5,522
5,522
2014
£000
6,294
(772)
5,522
2013
£000
6,294
6,294
2013
£000
6,023
271
6,294
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements
43
19. defeRRed TAx continued
The following are in deferred tax liabilities recognised by the Group and movements thereon during the period:
Revaluation of properties
At 1 April
(Credit)/Debit to income for the year
At 31 March
20. finAnCiAl insTRuMenTs
fair value of financial assets
2014
£000
6,294
(772)
5,522
2013
£000
6,023
271
6,294
The Group’s financial assets at the year end consist of trade receivables and cash at bank and in hand of £1.217 million
(2013: £900,000).
The Directors consider that the carrying amount of cash at bank and in hand approximates their fair value.
The trade receivables amounted to £1.578 million (2013: £1.2 million).
The Directors consider that the carrying amount of trade receivables approximates their fair value.
fair value of borrowings
Bank overdrafts and loans
Secured bank loans
2014
£000
8,168
69,800
77,968
2013
£000
8,427
84,950
93,377
Interest charged in the Income Statement for the above borrowings amounted to £2.34 million (2013: £4.32 million).
The Directors consider that the carrying amount of borrowings approximates their fair value. The details of the terms of the
borrowings together with the average interest rates can be seen in Note 19.
As at 31 March 2014 it is estimated that general increase of 1 point in interest rates would decrease the Group’s profit before tax
by approximately £771,000 (2013: £450,000).
undiscounted maturity profile of financial liabilities
The following table analyses the Group’s financial liabilities and derivative financial liabilities at the balance sheet date into relevant
maturity groupings based on the remaining period to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows. As the amounts included in the table are the contractual undiscounted cash flows, these
amounts will not always equal the amounts disclosed on the balance sheet for borrowings, derivative financial instruments, and
trade and other payables.
Trade and other payables due within 12 months equal their carrying balances as the impact of discounting is not significant.
At 31 March 2014
Interest bearing loans and borrowings
Trade and other payables
less than
1 year
£000
between
1 and 5 years
£000
over
5 years
£000
8,168
2,004
43,000
26,800
–
Total
£000
77,968
2,004
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
44
nOtes tO the cOnsOlidated
financial statements continued
for the year ended 31 march 2014
20. finAnCiAl insTRuMenTs continued
At 31 March 2013
Interest bearing loans and borrowings
Trade and other payables
Reconciliation of maturity analysis
At 31 March 2014
Interest loans and borrowings
Drawdown 31.3.14
Interest
Total
At 31 March 2013
Interest bearing loans and borrowings per accounts
Interest
Financial liability cash flows as above
21. CAlled up sHARe CApiTAl
Authorised:
5,000,000 Ordinary Shares of 5p each
Allotted, issued and fully paid:
3,899,014 Ordinary Shares of 5p each
22. oTHeR ReseRves
Capital redemption reserve
Capital reserve
Other reserves
Less than
1 year
£000
Between
1 and 5 years
£000
8,705
1,051
92,542
–
Over
5 years
£000
–
–
less than
1 year
£000
between
1 and 5 years
£000
over
5 years
£000
8,168
170
8,338
43,000
6,574
49,574
26,800
5,096
31,896
Less than
1 year
£000
Between
1 and 5 years
£000
Over
5 years
£000
8,427
278
8,705
84,950
7,592
92,542
–
–
–
2014
£000
250
195
2014
£000
55
25
56
136
Total
£000
101,247
1,051
Total
£000
77,968
11,840
89,808
Total
£000
93,377
7,870
101,247
2013
£000
250
195
2013
£000
55
25
56
136
Capital redemption reserve relates to buy-back of the Company’s own shares.
The Group does not maintain insurance cover against other risks except where several properties are located in close physical
vicinity. A reserve is maintained to deal with such non-insured risks and at 31 March 2014 stood at £56,000 (2013: £56,000).
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements
45
£000
243,641
28,442
(6,823)
265,260
23. ReTAined eARninGs
Balance at 1 April 2013
Net profit for the year
Dividends paid
balance at 31 March 2014
24. RelATed pARTy TRAnsACTions
1. During the financial year there were no key management personnel emoluments, other than remuneration.
2. (a) Mountview Estates P.L.C. provides general management and administration services to Ossian Investors Limited and Sinclair
Estates Limited, companies of which Mr. D.M. Sinclair is a Director. Fees of £56,825 (2013: £38,179) were charged for
these services.
(b) Included within other loans repayable in less than one year and on demand is a loan from Sinclair Estates Limited.
The balance outstanding at the balance sheet date was £631,915 (2013: £637,800). Interest was payable on the loan at a
rate of 0.5% above Barclays Bank Plc base rate. Interest paid in the year on this loan amounted to £3,483 (2013: £3,152).
(c) Included within other loans repayable in less than one year and on demand is a loan from Ossian Investors Limited.
The balance outstanding at the balance sheet date was £nil (2013: £nil). Interest was payable on the loan at a rate of 0.5%
above Barclays Bank Plc base rate. Interest paid in the year on this loan amounted to £33 (2013: £767).
(d) Included within other loans, repayable in less than one year and on demand is a loan from Mrs. D. Sinclair, a shareholder
of the Company. The balance outstanding at the balance sheet date was £175,000 (2013: £175,000). Interest was payable
on the loan at a rate of 0.5% above Barclays Bank Plc base rate. Interest paid in the year on this loan amounted to £1,750
(2013: £1,750).
(e) All of the above loans are unsecured.
(f) Transactions between the Group and its subsidiaries, which are related parties, have been eliminated on consolidation and
have not been disclosed in this note.
25. opeRATinG leAse CoMMiTMenTs
The future aggregate minimum lease payments payable by the Group under non-cancellable operating leases are as follows:
Operating lease payments due:
Not later than one year
Later than one year and not later than five years
Later than five years
2014
£000
2013
£000
47
48
–
95
–
10
–
10
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
46
indePendent
auditOrs’ rePOrt
to the members of mountview estates p.l.c.
We have audited the Group Financial Statements of Mountview Estates P.L.C. for the year ended 31 March 2014, which comprise
the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Statement of Consolidated Cash Flows and the related Notes 1 to 25. The financial reporting
framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRS) as
adopted by the European Union.
This report is made solely for 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 purposes. 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 16, the Directors are responsible for the
preparation of the Group 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 Group 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 Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
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 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 Annual Report 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 material misstatements or inconsistencies with the audited financial statements we consider the
implications for our report.
opinion on finAnCiAl sTATeMenTs
In our opinion the Group Financial Statements:
• give a true and fair view of the state of the Group’s affairs as at 31 March 2014 and of the Group profit and of its profit for the
year then ended;
• have been properly prepared in accordance with IFRS as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of the IAS Regulation.
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements 47
ouR AssessMenT of Risks of MATeRiAl MissTATeMenT
We identified the following risks that we believed would have the greatest impact on our overall strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team:
• Revenue recognition;
• Valuation of investment and trading properties; and
• Risk of fraud and management override.
ouR AppliCATion of MATeRiAliTy
We determined materiality for the Group to be £3.5 million, which is approximately 1% of gross assets. This provided a basis
for determining the nature, timing and extent of risk assessment procedures, identifying and assessing the risk of material
misstatements and determining the nature, timing and extent of further audit procedure .
We agreed with the Audit Committee that we would report to them corrected and uncorrected differences in excess of 5% of the
materiality level, as well as differences below that threshold that in our view warranted reporting on qualitative grounds.
An oveRvieW of THe sCope of ouR AudiT
The Group reports its operating results and financial position along two business lines being UK residential trading properties,
and UK residential investment properties. The Parent Company and all three subsidiaries are audited by BSG Valentine.
The accounting books and records for all business lines are located at the Group’s head office in North London.
In our audit we tested and examined information, using sampling and other techniques, to the extent we considered necessary to
provide a reasonable basis for us to draw conclusions. We obtained audit evidence through testing the effectiveness of controls,
substantive procedures or a combination of both.
The principal ways in which we responded to the risks identified above included:
Revenue recognition
Our testing of revenue transactions focused on understanding whether cash had been received and reading extracts of the
related contracts – for example a property sale completion statement or a rental contract.
valuation of investment and trading properties
For investment properties we checked that the property database information supplied to external valuers by management was
consistent with the underlying property records held by the Group and tested during our audit.
Our assessment of the net realisable value of trading properties held as inventories focused on the critical accounting assumptions
disclosed in Note 2 to the Financial Statements. In addition we reviewed recent comparable market data.
Risk of fraud and management override
Procedures included analytical procedures and journal entry testing in order to identify and address the risk of management
override of controls. We designed testing procedures and thresholds for all balances in such a way to ensure that the risk of fraud
and error is mitigated. We also examined accounting estimates relevant to the Financial Statements.
opinion on oTHeR MATTeR pResCRibed by THe CoMpAnies ACT 2006
In our opinion:
• the information given in the Strategic Report and the Directors’ Report for the financial year for which the Group Financial
Statements are prepared is consistent with the Group Financial Statements.
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
48
indePendent
auditOrs’ rePOrt continued
to the members of mountview estates p.l.c.
MATTeRs on WHiCH We ARe RequiRed To RepoRT by exCepTion
We have nothing to report in respect of the following.
Under the ISAs (UK and Ireland), we are required to report to you if, in our opinion, information in the Annual Report is:
• materially inconsistent with the information in the audited financial statements; or
• apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Group acquired in the course of
performing our audit; or
• is otherwise misleading.
In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during
the audit and the Directors’ statement that they consider the Annual Report is fair, balanced and understandable and whether the
Annual Report appropriately discloses those matters that we communicated to the Audit Committee which we consider should
have been disclosed.
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• 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;
Under the Listing Rules we are required to review:
• the Directors’ statement set out on page 15 in relation to going concern; and
• the part of the Corporate Governance Statement relating to the Company’s compliance with the nine provisions of the UK
Corporate Governance Code specified for our review; and
oTHeR MATTeRs
We have reported separately on the Parent Company financial statements of Mountview Estates P.L.C. for the year ended
31 March 2014 and on the information in the Directors’ Remuneration Report that is described as having been audited.
Athanasios Athanasiou (Senior Statutory Auditor)
for and on behalf of BSG Valentine
Chartered Accountants and Statutory Auditors
London, United Kingdom
18 July 2014
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements 49
cOmPany balance sheet
under uk gaaP
as at 31 march 2014
fixed assets
Tangible assets
Investments
Current assets
Stocks
Debtors
Cash at bank and in hand
Creditors: amounts falling due within one year
net current assets
Total assets less current liabilities
Creditors: amounts falling due after more than one year
Capital and reserves
Called up share capital
Capital redemption reserve
Capital reserve
Other reserves
Profit and loss account
Approved by the Board on 18 July 2014.
D.M. Sinclair
Chairman
M.M. Bray
Director
As at
31 March 2014
£000
As at
31 March 2013
£000
Notes
3
4
5
6
7
8
9
10
10
10
12
2,035
18,276
20,311
2,225
18,276
20,501
306,305
301,501
1,512
1,165
308,982
(14,249)
294,733
315,044
(78,926)
236,118
195
55
25
39
1,138
866
303,505
(13,138)
290,367
310,868
(91,130)
219,738
195
55
25
39
235,804
236,118
219,424
219,738
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
50
nOtes tO the financial
statements under uk gaaP
for the year ended 31 march 2014
1. ACCounTinG poliCies
(a) basis of accounting
The Accounts have been prepared under the historical cost convention, and in accordance with applicable Accounting Standards.
(b) investments
Fixed assets investments in subsidiary undertakings are stated at cost less any provision for impairment.
(c) Taxation
Corporation tax payable is provided on taxable profits at the current rate.
(d) Turnover
Turnover includes proceeds of sales of properties, rents from properties which are held as trading stock, or investment and any
other sundry items of revenue before charging expenses. Sales of properties are recognised on completion.
(e) depreciation
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic life
of that asset using the straight-line method as follows:
Freehold property
Fixtures and fittings and office equipment
Computer equipment
Motor Vehicles – reducing balance method
–
–
–
–
2%
20%
25%
20%
(f) impairment of fixed assets
Fixed assets are subject to review for impairment in accordance with FRS11 “Impairment of Fixed Assets and Goodwill”.
Any impairment is recognised in the Profit and Loss Account in the year in which it occurs.
(g) stocks
These comprise residential properties all of which are held for resale, and are valued at the lower of cost and estimated net
realisable value. Cost to the Group includes legal fees and commission charges incurred during acquisition together with
improvement costs. Net realisable value is the net sale proceeds which the Group expects on sale of a property with vacant
possession in its current condition. The analysis of the Group revenue as at 31 March 2014 is on page 35.
(h) leasing
Rentals payable under operating leases are charged to profit and loss on a straight-line basis over the term of the relevant lease.
(i) deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date
where transactions or events have occurred at that date that will result in an obligation to pay more, or right to pay less or to
receive more, tax, with the following exceptions:
• provision is made for tax on gains arising from the revaluations (and similar fair value adjustments) of fixed assets, and gains on
disposal of fixed assets that have been rolled over into replacement assets, only to the extent that, at balance sheet date, there
is binding agreement to dispose of these assets concerned. However, no provision is made where, on the basis of all available
evidence at the balance sheet date, it is more likely than not that the taxable gain will be rolled over into replacement assets
and charged to tax only where the replacement assets are sold;
• deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there will
be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements 51
2. sTAff CosTs (inCludinG diReCToRs)
Wages and salaries
Social security costs
Pension costs
directors’ remuneration
Total Directors’ remuneration including salary, bonuses, benefits in kind
and pensions contributions amounted to:
2014
£000
2,170
259
169
2,598
2013
£000
2,113
254
112
2,479
2014
£000
2013
£000
1,219
1,391
The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on pages 22 to 23.
The Company contributes 3% of the total annual gross salaries and bonuses of each employee to a Stakeholder Pension Scheme.
The average monthly number of employees during the year was as follows:
Office and management
3. TAnGible AsseTs
Cost
At 1 April 2013
Additions
Disposals
At 31 March 2014
depreciation
At 1 April 2013
Charge for the year
On disposals
At 31 March 2014
net book value
At 31 March 2013
At 31 March 2014
All tangible assets of the Company are located within the UK.
2014
£000
26
2013
£000
24
freehold
property
£000
fixtures
and fittings
£000
Motor
vehicles
£000
Computer
equipment
£000
2,671
–
–
2,671
648
53
–
701
2,023
1,970
171
7
–
178
85
32
–
117
86
61
224
–
(224)
–
119
–
(119)
–
105
–
28
–
–
28
17
7
–
24
11
4
Total
£000
3,094
7
(224)
2,877
869
92
(119)
842
2,225
2,035
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
52
nOtes tO the financial
statements under uk gaaP continued
for the year ended 31 march 2014
4. invesTMenTs
fixed asset investments
These represent the cost of shares in the following wholly-owned subsidiary undertakings, which are incorporated and operate
in England and Wales. Their results are consolidated in the accounts of the Group, for the period during which they are
Subsidiary undertakings.
Hurstway Investment Company Limited
Louise Goodwin Limited
A.L.G. Properties Limited
The Company owns 100% of the Ordinary Share capital of the following companies:
Subsidiary undertaking
Country of incorporation
Hurstway Investment Company Limited
Louise Goodwin Limited
A.L.G. Properties Limited
5. sToCks
Residential properties
UK
UK
UK
6. debToRs: due WiTHin one yeAR
Trade debtors
Prepayments and accrued income
7. CRediToRs: AMounTs fAllinG due WiTHin one yeAR
Bank loans and overdrafts
Trade creditors
Corporation Tax
Other taxes and social security costs
Other creditors
Other loans
2014
£000
1
15,351
2,924
18,276
2013
£000
1
15,351
2,924
18,276
Principal activity
Property trading
Property investment
Property investment
2014
£000
2013
£000
306,305
301,501
2014
£000
215
1,297
1,512
2014
£000
7,361
688
4,155
167
1,071
807
2013
£000
324
814
1,138
2013
£000
7,465
578
3,128
152
853
962
14,249
13,138
Other loans consist of loans from connected persons. Interest payable on these loans was at 0.5% above Barclays Bank Plc
base rate.
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements
53
8. CRediToRs: AMounTs fAllinG due AfTeR MoRe THAn one yeAR
Bank loans
Amounts owed to subsidiary undertakings
Other loans
Maturity profile of financial liabilities at 31 March 2014 was as follows:
Amounts repayable:
In one year or less
Between one and five years
Over five years
Less: amount due for settlement within 12 months (shown under current liabilities)
Amount due for settlement after 12 months
2014
£000
69,800
9,126
–
2013
£000
84,950
6,180
–
78,926
91,130
2014
£000
2013
£000
8,168
43,000
26,800
77,968
(8,168)
69,800
8,427
84,950
–
93,377
(8,427)
84,950
The Directors consider that the carrying amount of bank overdrafts and loans approximates their fair value.
The other principal features of the Group’s borrowings are as follows.
1. The Group has short-term borrowing facilities of £15 million with Barclays Bank. This facility expires at November 2014 and the
rate of interest payable is:
• 1.75% over LIBOR on £6 million.
• 1.9% over Base rate on £9 million.
Headroom of this facility at 31 March 2014 amounted to £7.6 million (2013: £7.5 million).
2. The Group has renewed its £75 million long-term loan facility with Barclays Bank. This is a five year revolving loan and the
termination date of this facility is December 2018. The rate of interest payable on the loan is 2.1% above LIBOR. The loan is
secured by a cross guarantee between Mountview Estates P.L.C. and its subsidiaries. The loan is not repayable by instalments.
Headroom under this facility at 31 March 2014 amounted to £32 million (2013: £18.5 million).
3. The Group has re-negotiated a £10 million long-term revolving loan facility with HSBC Bank. The termination date for this
facility is December 2019. The rate of interest payable on the new loan is 2.25% above LIBOR. The loan has the benefit of
Negative Pledge. The loan is not repayable by instalments. Headroom under this facility at 31 March 2014 amounted to
£3.2 million (2013: 1.55 million).
The Group has re-negotiated a £20 million long-term revolving loan facility with HSBC Bank. The termination date for this
facility is January 2020. The rate of interest payable on the new loan is 2.25% above LIBOR. The loan has the benefit of a
Negative Pledge. The loan is not repayable by instalments. Headroom under this facility at 31 March 2014 amounted to
£nil (2013: £nil).
4. Other loans consist of loans from connected persons, and companies of which Mr. D.M. Sinclair is a Director. Loans of £806,915
(2013: £962,800) are repayable within one year. Interest payable on these loans is at 0.5% above Barclays Bank Plc base rate.
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
54
nOtes tO the financial
statements under uk gaaP continued
for the year ended 31 march 2014
9. CAlled up sHARe CApiTAl
Authorised:
5,000,000 Ordinary Shares of 5p each
Allotted, issued and fully paid:
3,899,014 Ordinary Shares of 5p each
10. oTHeR ReseRves
Capital redemption reserve
Capital reserve
Other reserves
Balance at 31 March
2014
£000
250
195
2014
£000
55
25
39
119
2013
£000
250
195
2013
£000
55
25
39
119
Capital redemption reserve relates to buy-back of the Company’s own shares.
The Group does not maintain insurance cover against other risks except where several properties are located in close physical
vicinity. A reserve is maintained to deal with such non-insured risks and at 31 March 2014 stood at £39,000 (2013: £39,000).
11. pRofiT And loss ACCounT
Balance at 1 April
Net profit for the year
Dividends paid
Balance at 31 March
2014
£000
2013
£000
219,424
207,281
23,203
(6,823)
18,575
(6,432)
235,804
219,424
Mountview Estates P.L.C. Annual Report and Accounts 2014Financial Statements
55
12. RelATed pARTy TRAnsACTions
1. During the financial year there were no key management personnel emoluments, other than remuneration.
2. (a) Mountview Estates P.L.C. provides general management and administration services to Ossian Investors Limited and Sinclair
Estates Limited, companies of which Mr. D.M. Sinclair is a Director. Fees of £56,825 (2013: £38,179) were charged for
these services.
(b) Included within other loans repayable in less than one year and on demand is a loan from Sinclair Estates Limited.
The balance outstanding at the balance sheet date was £631,915 (2013: £637,800). Interest was payable on the loan at a
rate of 0.5% above Barclays Bank Plc base rate. Interest paid in the year on this loan amounted to £3,483 (2013: £3,152).
(c) Included within other loans repayable in less than one year and on demand is a loan from Ossian Investors Limited.
The balance outstanding at the balance sheet date was £nil (2013: £nil). Interest was payable on the loan at a rate of 0.5%
above Barclays Bank Plc base rate. Interest paid in the year on this loan amounted to £33 (2013: £767).
(d) Included within other loans, repayable in less than one year and on demand is a loan from Mrs. D. Sinclair, a shareholder
of the Company. The balance outstanding at the balance sheet date was £175,000 (2013: £175,000). Interest was payable
on the loan at a rate of 0.5% above Barclays Bank Plc base rate. Interest paid in the year on this loan amounted to £1,750
(2013: £1,750).
(e) All of the above loans are unsecured.
(f) Transactions between the Group and its Subsidiaries, which are related parties, have been eliminated on consolidation and
have not been disclosed in this note.
13. opeRATinG leAse CoMMiTMenTs
At 31 March 2014 the Company had aggregate annual commitments under non-cancellable operating leases as set out below.
Operating lease payments due:
Not later than one year
Later than one year and not later than five years
Later than five years
2014
£000
2013
£000
10
37
–
47
–
10
–
10
Governanceother informationFinancial statementsstrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
56
indePendent
auditOrs’ rePOrt
to the members of mountview estates p.l.c. on the parent company financial statements
We have audited the Parent Company Financial Statements of Mountview Estates P.L.C. for the year ended 31 March 2014 which
comprise the Parent Company Balance Sheet and the related Notes 1 to 13 The financial reporting framework that has been
applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted
Accounting Practice).
This report is made solely to the Company’s 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 opinion we have formed .
RespeCTive ResponsibiliTies of diReCToRs And AudiToRs
As explained more fully in the Statement of Directors’ Responsibilities set out on page 16 the Directors are responsible
for the preparation of the Parent Company 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 Parent Company 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 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 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 Annual Report to identify material inconsistencies with
the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider
the implications for our report.
opinion on finAnCiAl sTATeMenTs
In our opinion the Parent Company Financial Statements:
• give a true and fair view of the state of the Company’s affairs as at 31 March 2014;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
opinion on oTHeR MATTeRs pResCRibed by THe CoMpAnies ACT 2006
In our opinion:
• the part of the report of the Remuneration Committee and Directors’ Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006; and
• 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 Parent Company Financial Statements.
Mountview Estates P.L.C. Annual Report and Accounts 2014Other Information 57
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 and the part of the Directors’ Remuneration Report to be audited 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.
oTHeR MATTeR
We have reported separately on the Group Financial Statements of Mountview Estates P.L.C. for the year ended 31 March 2014.
Athanasios Athanasiou (Senior Statutory Auditor)
for and on behalf of BSG Valentine
Chartered Accountants and Statutory Auditors
London, United Kingdom
18 July 2014
Governanceother informationFinancial statementsStrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 58
table Of cOmParative figures
Revenue
Profit before taxation
Taxation
Profit after taxation
Earnings per share
Rate of dividend
Cover
Cost of dividend
Total remuneration (including Directors)
Executive Directors’ remuneration
Total remuneration (including Directors)
as percentage of dividend
Cost of Executive Directors’
remuneration as percentage
of total remuneration
Cost of Executive Directors’
remuneration as percentage
of dividend
IFRS
2008
£000
IFRS
2009
£000
54,338
29,529
8,861
20,668
530.1p
155p
3.42
6,042
2,846
1,498
53,599
13,062
3,673
9,389
241.0p
155p
1.55
6,042
2,528
1,436
IFRS
2010
£000
56,697
29,255
7,620
21,635
554.8p
165p
3.36
6,432
2,759
1,569
IFRS
2011
£000
47,655
23,560
6,589
16,971
435.3p
165p
2.64
6,432
2,390
1,233
IFRS
2012
£000
42,931
22,805
5,350
17,455
447.7p
165p
2.71
6,432
2,184
1,117
As at 31
March 2014
ifRs
2014
£000
66,150
35,394
6,952
28,442
729.5p
200p
3.64
7,798*
2,598
1,132
IFRS
2013
£000
56,646
28,928
6,783
22,145
568.0p
175p
3.25
6,823
2,479
1,319
47.10
41.84
42.89
37.15
33.95
36.33
33.32
52.64
56.80
56.87
51.59
51.14
53.2
43.57
24.7
23.7
24.3
19.1
17.3
19.3
14.52
* The £7.79 million dividend in relation to 2014 is made up of the interim dividend of £1.95 million and the final dividend of
£5.84 million, which will be paid on 18 August 2014, subject to approval at the AGM on 13 August 2014.
Mountview Estates P.L.C. Annual Report and Accounts 2014Other Information
59
nOtice Of meeting
Notice is hereby given that the 77th Annual General Meeting of the Members of Mountview Estates P.L.C. (incorporated in
England and Wales with registered number 00328020) will be held at the offices of Norton Rose Fulbright LLP, 3 More London
Riverside, London SE1 2AQ on 13 August 2014 at 11.30 a.m. for the following purposes:
As oRdinARy business:
1.
To receive and consider the Reports of the Directors and the Auditors and the audited Statements of Accounts of the
Company for the year ended 31 March 2014.
2. To declare a final dividend of 150p per share payable on 18 August 2014 to Shareholders on the register at 18 July 2014.
3. To re-appoint Mr. A.J. Sinclair as a Director of the Company.
4.
To elect Mrs. M.L. Jarvis as a Director of the Company.
5.
6.
7.
To approve the Directors’ Remuneration Report (excluding the Directors’ Remuneration Policy set out on pages 20 to 21 of
this report) set out in the Annual Report and Accounts for the year ended 31 March 2014.
To approve the Directors’ Remuneration Policy, the full text of which is contained in the Directors’ Remuneration Report set
out in the Annual Report and Accounts for the year ended 31 March 2014.
To re-appoint Messrs BSG Valentine as Auditors of the Company to hold office from the conclusion of the Meeting to the
conclusion of the next meeting at which the accounts are laid before the meeting.
8.
To authorise the Directors to determine the Auditors’ remuneration for the ensuing year.
By Order of the Board
M.M. Bray
Company Secretary
Mountview House
151 High Street
Southgate
London N14 6EW
18 July 2014
Governanceother informationFinancial statementsStrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 60
nOtice Of meeting continued
noTes:
1.
A Member who is entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend, speak and
vote instead of him/her. A proxy need not also be a Member of the Company. If a Member appoints more than one proxy to
attend the Meeting, each proxy must be appointed to exercise the rights attached to a different share or shares held by the
Member. If a Member wishes to appoint more than one proxy and so requires additional Forms of Proxy, the Member should
contact Capita Asset Services (PXS1), 34 Beckenham Road, Beckenham, Kent BR3 4ZF.
2.
3.
4.
A Form of Proxy is enclosed with this Report and Accounts and should be completed in accordance with the instructions
contained therein. Completion and return of the Form of Proxy will not prevent a Member from attending the Meeting and
voting in person. To be effective, the Form of Proxy and any power of attorney or other authority under which it is signed
(or a notarially certified copy of such authority) must be deposited at the office of the Company’s Registrars, Capita Asset
Services (PXS1), 34 Beckenham Road, Beckenham, Kent BR3 4ZF, not later than 48 hours before the time of the Meeting
or any adjournment thereof. Amended instructions must also be received by the Company’s Registrars by the deadline for
receipt of Forms of Proxy.
To appoint a proxy or to give or amend an instruction to a previously appointed proxy via the CREST system, the CREST
message must be received by the issuer’s agent RA10 by no later than 48 hours before the time of the Meeting or any
adjournment thereof. 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.
After this time any change of instructions to a proxy appointed through CREST should be communicated to the proxy
by other means. CREST Personal Members or other CREST sponsored members, and those CREST Members who have
appointed voting service provider(s) should contact their CREST sponsor or voting service provider(s) for assistance with
appointing proxies via CREST. For further information on CREST procedures, limitations and system timings please refer to the
CREST Manual. We may treat as invalid a proxy appointment sent by CREST in the circumstances set out in Regulation 35(5)
(a) of the Uncertificated Securities Regulations 2001. In any case your proxy instruction must be received by the Company’s
registrars no later than 48 hours before the time of the Meeting or any adjournment thereof.
Any person receiving a copy of this Notice as a person nominated by a Member to enjoy information rights under Section
146 of the Companies Act 2006 (a “Nominated Person”) should note that the provisions in Notes 1 and 2 above concerning
the appointment of a proxy or proxies to attend the Meeting in place of a Member, do not apply to a Nominated Person as
only Shareholders have the right to appoint a proxy. However, a Nominated Person may have a right under an agreement
between the Nominated Person and the Member by whom he or she was nominated to be appointed, or to have someone
else appointed, as a proxy for the Meeting. If a Nominated Person has no such proxy appointment right or does not wish to
exercise it, he/she may have a right under such an agreement to give instructions to the Member as to the exercise of voting
rights at the Meeting.
Nominated persons should also remember that their main point of contact in terms of their investment in the Company
remains the Member who nominated the Nominated Person to enjoy information rights (or, perhaps the custodian or broker
who administers the investment on their behalf). Nominated Persons should continue to contact that Member, custodian or
broker (and not the Company) regarding any changes or queries relating to the Nominated Person’s personal details and
interest in the Company (including any administrative matter). The only exception to this is where the Company expressly
requests a response from a Nominated Person.
5.
Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 (as amended) and for the purposes of Section
360B of the Companies Act 2006, entitlement to attend and vote at the Meeting and the number of votes which may be
cast thereat will be determined by reference to the register of members of the Company as at 6.00 pm on 11 August 2014
(the ”Specified Time”) or 48 hours (excluding any day or part of any day that is not a working day) before the date of any
adjourned Meeting. If the Meeting is adjourned to a time not more than 48 hours after the Specified Time, that time will also
apply for the purpose of determining the entitlement of Members to attend and vote and for the purpose of determining the
number of votes they may cast at the adjourned Meeting. Changes to entries on 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.
Mountview Estates P.L.C. Annual Report and Accounts 2014Other Information
61
6.
7.
Any corporation which is a Member can appoint one or more corporate representatives who may exercise on its behalf all of
its powers as a Member, provided that, if it is appointing more than one corporate representative, it does not do so in relation
to the same shares. It is therefore no longer necessary to nominate a designated corporate representative.
If the Chairman, as a result of any proxy appointments, is given discretion as to how the votes the subject of those proxies are
cast and the voting rights in respect of those discretionary proxies, when added to the interests in the Company’s securities
already held by the Chairman, result in the Chairman holding such number of voting rights that he has a notifiable obligation
under the Disclosure and Transparency Rules, the Chairman will make the necessary notifications to the Company and the
Financial Services Authority. As a result, any Member holding 3% or more of the voting rights in the Company who grants
the Chairman a discretionary proxy in respect of some or all of those voting rights and so would otherwise have a notification
obligation under the Disclosure and Transparency Rules, need not make a separate notification to the Company and the
Financial Services Authority.
8.
Under Section 527 of the Companies Act 2006, Members meeting the threshold requirements set out in that section have the
right to require the Company to publish on a website a statement setting out any matter relating to:
(a) the audit of the Company’s accounts (including the auditor’s report and the conduct of the audit) that are to be laid before
the meeting; or
(b) any circumstance connected with an auditor of the Company ceasing to hold office since the previous meeting at which
annual accounts and reports were laid in accordance with Section 437 of the Companies Act 2006.
The Company may not require the members requesting any such website publication to pay its expenses in complying with
Sections 527 or 528 Companies Act 2006. Where the Company is required to place a statement on a website under Section
527 Companies Act 2006, it must forward the statement to the Company’s auditor not later than the time when it makes the
statement available on the website. The business which may be dealt with at the meeting includes any statement that the
Company has been required under Section 527 Companies Act 2006 to publish on a website.
9.
Any Member attending the Meeting has the right to ask questions. The Company must cause to be answered any question
relating to the business being dealt with at the Meeting put by a Member attending the Meeting. However, Members should
note that no answer need be given in the following circumstances:
(a) if to do so would interfere unduly with the preparation of the Meeting or would involve a disclosure of
confidential information;
(b) if the answer has already been given on a website in the form of an answer to a question; or
(c) if it is undesirable in the interests in the Company or the good order of the meeting that the question be answered.
10. This Notice, together with information about the total numbers of shares in the Company in respect of which Members are
entitled to exercise voting rights at the Meeting as at 18 July 2014 being the last business day prior to the printing of this
Notice and, if applicable, any members’ statements, members’ resolutions or members’ matters of business received by the
Company after the date of this Notice, will be available on the Company’s website www.mountviewplc.co.uk.
11. Any electronic address provided either in this Notice or in any related documents (including the Form of Proxy) may not be
used to communicate with the Company for any purposes other than those expressly stated.
12. As at 18 July 2014, being the last business day prior to the printing of this Notice, the Company’s issued capital consisted
of 3,899,014 Ordinary Shares carrying one vote each. Therefore, the total voting rights in the Company as at 18 July 2014
are 3,899,014.
13. Copies of the Directors’ service contracts and letters of appointment with the Company are available for inspection at the
registered office at Mountview House, 151 High Street, Southgate, London N14 6EW during normal business hours on
weekdays (Saturdays, Sundays and English public holidays excepted) from the date of this notice until the conclusion of the
Meeting and will also be available for inspection on the date and at the place of the Meeting from 15 minutes prior to the
commencement of the Meeting until the conclusion of the Meeting.
Governanceother informationFinancial statementsStrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014
62
sharehOlders’ infOrmatiOn
finAnCiAl CAlendAR 2014
Final dividend record date
Annual Report posted to Shareholders
Annual General Meeting
Final dividend payment
Interim results
18 July
21 July
13 August
18 August
27 November
Copies of this statement are being sent to shareholders. Copies may be obtained from the Company’s registered office:
Mountview House
151 High Street
Southgate
London N14 6EW
All administrative enquiries relating to shareholdings should be addressed to the Company’s Registrars:
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Mountview Estates P.L.C. Annual Report and Accounts 2014Other Information 63
Governanceother informationFinancial statementsStrategic reportMountview Estates P.L.C. Annual Report and Accounts 2014 64
Mountview Estates P.L.C. Annual Report and Accounts 2014Other Information M
o
u
n
t
v
i
e
w
E
s
t
a
t
e
s
P.
L
.
C
.
A
n
n
u
a
l
R
e
p
o
r
t
a
n
d
A
c
c
o
u
n
t
s
2
0
1
4
Mountview Estates P.L.C.
Mountview House,
151 High Street,
Southgate,
London N14 6EW
Tel: +44 (0) 20 8920 5777
Fax: +44 (0) 20 8882 9981
www.mountviewplc.co.uk