Mountview Estates PLC

24162.04   21 July 2015 4:11 PM   Proof 12Mountview Estates P.L.C.Annual Report and Accounts 2015Mountview Estates P.L.C. Annual Report and Accounts 2015Mountview Estates AR2015 - 24162.04.indd   321/07/2015   16:12:22Mountview Estates P.L.C.
Annual Report and Accounts 2015

STRATEGIC REPORT
STRATEGIC REPORT

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.

Contents

STRATEGIC REPORT

GOVERNANCE

FINANCIAL STATEMENTS

1  Our Performance
2  Where we Operate
3  Chief Executive’s Statement
4  Review of Operations

8  Directors and Advisers
9  Directors’ Report
15 Statement of Directors’ 

Responsibilities

16 Corporate Governance
20 Remuneration Report

26 Consolidated Statement  
of Comprehensive Income
27 Consolidated Statement  
of Financial Position
28 Consolidated Statement  
of Changes in Equity
29 Consolidated Cash Flow 

Statement

30 Notes to the Consolidated 
Financial Statements
49 Independent Auditors’ 

Report to the Members of 
Mountview Estates P.L.C.
52 Company Balance Sheet 

under UK GAAP

53 Notes to the Financial 
Statements under UK 
GAAP

59 Independent Auditors’ 

Report to the Members of 
Mountview Estates P.L.C. 
on the Parent Company 
Financial Statements
61 Table of Comparative 

Figures

OTHER INFORMATION

62 Notice of Meeting
66 Shareholders’ Information

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Annual Report and Accounts 2015

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Our Performance

TURNOVER

GROSS PROFIT

PROFIT BEFORE TAX

£71.3m
▲ 7.7%

£46.7m
▲ 21.0%

£40.0m
▲ 13.0%

(2014: £66.2m)

(2014: £38.6m)

(2014: £35.4m)

PROFIT BEFORE TAX 
EXCLUDING INVESTMENT  
PROPERTIES REVALUATION

SHAREHOLDERS’ EQUITY

EARNINGS PER SHARE

£40.0m
▲ 24.2%

£287.7m
▲ 8.3%

816.0p
▲ 11.9%

(2014: £32.2m)

(2014: £265.6m)

(2014: 729.5p)

NET ASSETS PER SHARE

DIVIDEND PER SHARE

£73.8 
▲ 8.4%

(2014: £68.1)

275p
▲ 37.5%

(2014: 200p)

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 175p per share are as follows: 

Ex-dividend date 
Record date 
Payment date 

23 July 2015 
24 July 2015 
24 August 2015 

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

STRATEGIC REPORT
STRATEGIC REPORT

Where We Operate

The figures below are calculated as a percentage of the 
total value of Inventories of Trading properties.

4.27%
Derbyshire, 
Leicestershire,
Nottinghamshire

12.12%
Remainder of England and Wales

22.14%
Bedfordshire, Berkshire, Essex, 
Buckinghamshire, Cambridgeshire, 
Hertfordshire, Oxfordshire, Norfolk, 
Suffolk, Middlesex, Northamptonshire

24.12%
London (North)

23.73%
London (South)

13.62%
Kent, Surrey, Sussex
Dorset, Hampshire, Isle of Wight 

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Annual Report and Accounts 2015

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3

Chief Executive’s Statement

As recently announced, John Fulton relinquished his role 
as Non-Executive Chairman on 30 June 2015, and left the 
Company on that date. John had joined the Company at 
the beginning of 2007 and served the Company loyally 
and efficiently. When it was decided to accept that good 
corporate governance dictates the splitting of the roles 
of Chairman and Chief Executive, John was the natural 
candidate to take on the role of Non-Executive Chairman. 
In this capacity, he has served the Company well, and it 
is perhaps unfortunate that he chose to leave so soon to 
pursue his various other interests.

As Chief Executive for some 25 years, it seems appropriate 
that I should review the results for the year ended 31 March 
2015. During this financial year, turnover has increased by 
7.7%, gross profit has increased by 21% and profit before tax 
has increased by 13%. This has enabled earnings per share 
to increase by 11.9% to 816 pence which still covers the 
dividend per share nearly three times.

The recommended final dividend of 175 pence per share  
in respect of the year ended 31 March 2015 will be payable 
on 24 August 2015 to Shareholders on the Register of 
Members as at 24 July 2015. The total dividends for the  
year at 275 pence per share will have increased by 37.5% 
from 200 pence per share in respect of the year ended  
31 March 2014.

The results of the valuation undertaken as at 30 September 
2014 and published with the interim report showed a 
strength in our balance sheet way beyond the historical cost 
figures.

Borrowings have been reduced and we are still able to 
make good purchases. The enhanced performance this 
year is on top of the very strong performances of the two 
previous years and is a tribute not only to the experience of 
my established colleagues but also to the enthusiasm of our 
more recent recruits.

Our management teams continue to evolve and it may 
become appropriate to appoint one or more of these 
personnel to the Board. The continuing good results 
and the sound financial structure of the Company are a 
testimony to tried and trusted methods and tried and 
trusted personnel. Whilst we are aware of the need for our 
management structure to evolve for the future benefit of the 
Company, our results do not suggest that radical surgery is 
needed as a matter of urgency. 

The default retirement age has been abolished and 
shareholders will be aware that many companies are being 
well served by men and women who would once have been 
regarded as being of advanced years. I may be considered 
to fall into this category, but I will be happy to step aside 
when we have in position those of proven ability who are 
capable of producing results at the level for which I have 
been responsible for an extended period of years.

Tony Solway joined the Company on 11 June 2015 and 
succeeded John Fulton as Non-Executive Chairman 
on 01 July 2015. Tony started his business life in his 
family’s printing company and then progressed to IT and 
management consulting. He has extensive experience in 
the financial services and wealth management industries, 
both in the United Kingdom and globally. His involvement in 
these industries also brought him into contact with property 
businesses, and more recently he has developed a portfolio 
of non-executive directorships. His breadth of experience 
should serve the Company well, and we look forward to a 
long and successful relationship.

D.M. Sinclair 
Chief Executive Officer

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

STRATEGIC REPORT
STRATEGIC REPORT

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

•  Assured tenancy units

•  Ground rent units

•  Life tenancy units

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 2015

Regulated, Assured Shorthold 
tenancies and other

Assured tenancies

Ground rents

Life tenancies

No. of units

Cost (£m)

2,312

270.18

243

1,124

317

26.95

1.81

24.08

Analysis of the Group Trading portfolio at the lower of cost and estimated net realisable value by geographical 
location as at 31 March 2015

Regulated,  
Assured Shorthold tenancies, 
Assured tenancies and other 
(£m)

Ground rents  
(£m)

Life tenancies  
(£m)

Portfolio  
(%)

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

77.00

72.92

38.44

65.15

12.91

30.72

0.69

0.83

0.05

0.13

0.10

–

0.21

2.89

5.50

6.25

0.80

8.43

24.12

23.73

13.62

22.14

4.27

12.12

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Annual Report and Accounts 2015

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54 Grange Road, New Arlesford

65 Belsize Park Gardens

28 Coronation Road, Weymouth

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 (£)

1 million +

500,000 – 1 million

below 500,000

No. of units

Location

3

21

168

London

London  
and other

London  
and other

We achieved sales of £53.4 million (2014: £48.36 million), 
demonstrating the liquidity of the Portfolio. The average 
sales price achieved was £278,000 (2014: £270,000).

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.

REVENUE

£71.3m

(2014: £66.2m)

GROSS PROFIT

£46.7m

(2014: £38.6m)

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

STRATEGIC REPORT
STRATEGIC REPORT

Review of Operations continued

Analysis of Acquisitions

Year ended 
31 March 
2015 
Cost 
£m

No. of units

33

19

21

4

77

13.76

3.32

0.01

0.28

17.37

Regulated tenancies

Assured tenancies (or created)

Ground rents (or created)

Life tenancies

The above analysis does not include legal and commission 
expenses directly related to the acquisition of properties  
or any repairs of a capital nature.

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

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 36.

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 £17.37 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 2015 
is as follows:

Louise Goodwin Limited

A.L.G. Properties Limited

2015

2014

33 units

34 units

4 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 one Ground 
Rent unit for £54,000 in Louise Goodwin Limited (2014: 
disposed of three units for £2.373 million in Louise Goodwin 
Limited).

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.

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Annual Report and Accounts 2015

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Valuations increased during the year by £57,000. 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 40 to 41.

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 (£)
+7.7%

Profit before tax (£m)
+13.0%

66.2

71.3

35.4

40.0

2014

2015

2014

2015

Interest cover in relation 
to profit before interest 
and taxation (x)

Earnings per share (p)
+11.9%

24

729.5

816.0

16

2014

2015

2014

2015

Net assets per share (£)
+8.4%

68.1

73.8

Gearing ratio (%)

22.4

17.2

2014

2015

2014

2015

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 ability 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 this class 
of assets.

Management succession in place over the 
medium term
Significant operating expertise is concentrated in a small 
team of executive and senior management. 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.

Property Market
The UK housing market slowed down in the early part of 
2015. London and South East prices continue to improve 
but at a lower rate with the Regions, generally, showing 
low, yet sustained, levels of growth. Stricter mortgage 
lending, election uncertainty, buy-to-let and tax changes 
have recently tempered the market. However, sustained low 
interest rates, stamp duty changes, help-to-buy schemes, 
pension rule relaxation along with ever increasing scarcity 
continues to enhance the market in which we operate.

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.

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 is conservatively geared and operates well within 
financial covenants.

The Group maintains a good relationship with its bankers. 
Its banking facilities are fully performing with a spread of 
maturities and the Company will address any re-financing 
well before final maturity. 

Approved and agreed on behalf of the Board by:

D.M. Sinclair 
Chief Executive Officer 
23 July 2015

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

GOVERNANCE

Directors and Advisers

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

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. Retained the position of 
Chief Executive (‘CEO’) when the role of Chairman and CEO 
was split into separate roles in 2013. 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.

Resigned on 30 June 2015.

*  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.

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.

A.C.J. Solway* (Non-Executive Chairman) 
Joined the Company on 11 June 2015 and became Non-
Executive Chairman of the Board on 1 July 2015. Following a 
successful career as a financial services executive, Tony now 
holds a portfolio of Non-Executive roles. He is a Chartered 
Fellow of the Institute for Securities and Investment and 
holds the Institute of Directors Certificate In Company 
Direction.

*  Mr. A.C.J. Solway is considered to be independent for the purposes of the 

UK Corporate Governance Code. 

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

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9

Directors’ Report 

The Directors have pleasure in presenting to the Members their 78th Annual Report together with the Financial Statements 
for the year ended 31 March 2015.

1. Results and Dividends
The results for the year are set out in the Income Statement on page 26.

The Directors recommend the payment of a final dividend of 175p per share. The dividend will be paid on 24 August 2015, 
subject to approval at the Annual General Meeting on 19 August 2015, to Shareholders on the register at the close of 
business on 24 July 2015.

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 
Louise Goodwin Limited 
A.L.G. Properties Limited 

Property Trading 
Property Investment 
Property Investment

3. Rotation and Appointment of Directors
In accordance with the Company’s Articles of Association, Mrs.M.M.Bray retires from the Board by rotation and being 
eligible, offers herself for reappointment. A resolution for her reappointment will be proposed at the Annual General 
Meeting.

In accordance with the Company’s Articles of Association, Mr. A.C.J. Solway was appointed as a Director on 11 June 2015 
and offers himself up for election. A resolution for his election will be proposed at the Annual General Meeting. 

4. Share Capital
The authorised share capital of the Company as at 31 March 2015 was £250,000 divided into 5,000,000 Ordinary Shares of 5p 
of which 3,899,014 were in issue (2014: 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.

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Annual Report and Accounts 2015

GOVERNANCE

Directors’ Report continued

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

31 March 
2015 

1 April
2014 

538,383

12,302

538,383

12,302

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

132,484

132,484

All the above interests are beneficial.

Mr. A.C.J. Solway, Non-Executive Chairman, purchased 500 Ordinary Shares in the Company between 31 March 2015 and  
23 July 2015.

6. Notifiable Interests in Share Capital
As at 17 July 2015, 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

147,675

148,220

10.08

4.60

3.03

15.31

7.87

3.79

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.

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Annual Report and Accounts 2015

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11

8. Greenhouse Gas Emissions Disclosure
Introduction
Mandatory Greenhouse Gas (GHG) Reporting regulation requires quoted companies to report the annual quantity of 
emissions in tonnes of carbon dioxide equivalent from activities for which the company is responsible, including: 

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•  The combustion of fuel 

•  The operation of any facility 

•  The purchase of electricity, heat, steam or cooling by the company for its own use. 

The report must cover the “Kyoto” GHGs: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons 
(HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6). The reporting entity is also required to report at least one 
“intensity ratio”, expressing its annual emissions in relation to a quantifiable factor associated with the company’s activities.

The regulation requires quoted companies to report their Scope 1 and Scope 2 emissions. It is not mandatory to report 
Scope 3 emissions however Carbon Clear recommends clients to report Scope 3 emissions as it can lead to greater 
understanding of the company’s wider impacts. Mountview Estates Plc (Mountview) has committed to report Scope 1, 
Scope 2 and limited Scope 3 emissions under Mandatory Greenhouse P.L.C Gas Reporting legislation.

Headline results
This report details Mountview’s GHG emissions for the 12 months ending 31st March 2015. Using an operational control 
approach, Mountview 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 
and collected and provided to independent consultant, Carbon Clear. The validity and completeness of the data were 
checked by Carbon Clear and used to calculate the greenhouse gas emissions for Mountview. 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 154.7 tonnes of CO2e, comprised of the following;

•  Direct Emissions (Scope 1) amounted to 43.0 tonnes of CO2e or 27.8% of the total
•  Indirect Emissions (Scope 2) amounted to 83.6 tonnes of CO2e or 54.1% of the total
•  Indirect Other Emissions (Scope 3) amounted to 28.1 tonnes of CO2e or 18.1% of the total

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The results are presented in Tables 1 and 2 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 emissions (tCO2e)

tCO2e

tCO2e

2013/14

2014/15

% of Total

13.5

62.1

75.6

255.8

255.8

81.0

81.0

412.4

16.3

26.7

43.0

83.6

83.6

28.1

28.1

154.7

21%

-57%

-43%

-67%

-67%

-65%

-65%

-62%

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GOVERNANCE

80

60

40

20

0

Directors’ Report continued

Table 2: Intensity ratio

Intensity Metric

Total Gross Emissions (tCO2e)

Revenue (£)

Tonnes of gross CO2e per million GB £ turnover

Figure 1: Source of emissions
Gross Emission (tCO2e)

84

tCO2e

tCO2e

2013/14

2014/15

% change

412.4

154.7

66,000,000

71,300,000

6.2

2.2

-62%

8%

-65%

28

27

Electricity (kWh)

Well To Tank

Owned Company
Vehicles

16

Natural Gas

Year on year comparison
Overall emissions have decreased 62% from 2013/14 to 2014/15, due to a significant reduction in energy consumption 
across the managed flats. During this reporting period Mountview significantly improved the accuracy of the methodology 
used to determine the total number of managed flats which had communal areas in which Mountview were responsible for 
the energy supply. The revised methodology has resulted in an 85% reduction in emissions from managed flats. This has 
impacted on the carbon intensity metric which has decreased 65% from 2013/14 to 2014/15.

Scope 1 emissions decreased 43% from 2013/14 to 2014/15 due to a 55% reduction in the total miles travelled for business 
in company owned cars. Subsequently, the associated scope 3 WTT emissions associated with fuel consumption also 
significantly decreased. Natural gas consumption increased 20% across the same period.

As a result of reducing the managed flat portfolio electricity consumption decreased 68% and associated scope 2 
emissions decreased 67%. As with company cars, the scope 3 WTT emissions associated with electricity have also 
significantly decreased.

NOTES
1.   Well to Tank (WTT) Emissions: “Well to Tank” – (WTT) is the term used to describe the factors that used 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 250 flats and the company pays on average 

£30 electricity charge per flat. The approximate total electricity consumption for communal areas is 49,393 kWh or 22.83 
tCO2e scope 2 emissions (15% of company’s total emissions) and 1.9 tCO2e of WTT emissions.

3.   Mountview confirmed that there has been no refrigerant use in this compliance year as the air conditioning system is only 

18 months old and it has not required the refrigerant to be topped up as yet.

REFERENCES

The following sources of the carbon emissions factors and electricity expenditure conversions were used:

•  “2015 Guidelines to Defra/DECC’s GHG Conversion Factors for Company Reporting”, Department for Environment, Food 

and Rural Affairs (DEFRA) and Department for Energy and Climate Change (DECC).

•   “Quarterly Energy Prices’ June 2015”, Department for Energy and Climate Change (DECC).

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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 2015, the Company had a female Executive Director, Mrs. Marie Bray, who has been on the Board since 
2004, representing 20% 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 seven Senior Managers (who are not Directors), three of whom are female.

Of the 26 total employees in the Company, 10 are male and 16 are 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.

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 
35 and 36. Details regarding the Company’s use of financial instruments are set out in Note 20 to the Consolidated Financial 
Statements on pages 45 and 46.

15. Remuneration Policy
The Company’s Shareholders will be asked to approve the Remuneration Report at the Annual General Meeting to be held 
on 19 August 2015 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 16 to 19. 

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Annual Report and Accounts 2015

GOVERNANCE

Directors’ Report continued

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 £31,230 (2014: £64,150).

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 (2014: £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 regularly reviews 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 17.

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.

22. Relationship Party Agreement
In accordance with the UK Listing Rules, the Company has entered into an agreement with the Sinclair family concert 
party, which as it controls more than 30% of the Group’s total issued share capital is deemed a controlling shareholder. The 
relationship agreement is intended to ensure the controlling shareholder complies with the independence provisions in 
Listing Rule 9.2.2A.

By Order of the Board

M.M. Bray 
Company Secretary 
23 July 2015

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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 8 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 7 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; 

•  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; and

•  the annual report, taken as a whole, is fair, balanced and understandable, and provides the information necessary for 

shareholders to assess the Group’s performance, business model and strategy.

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 
23 July 2015

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GOVERNANCE

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. A.C.J. 
Solway, newly appointed Non-Executive Chairman, is considered to be independent for the purposes of the UK Corporate 
Governance Code. 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. At present 
the Board does not intend to appoint any Director to fulfil the role of senior independent director given the limited size of the 
Board but may decide to do so in the future.

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 2015, the Board comprised the CEO, one Executive Director and three Non-Executive 
Directors (of which two are 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 Company Secretary sends out the agenda 
and supporting information to all members of the Board in advance of Board meetings. The following table sets out details 
of the number of meetings of the Board (excluding ad hoc meetings) and of the Audit, Nomination 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

Mrs. M.L. Jarvis

6

1

2

4

6

1

1

4

6

2

3

3

6

2

3

1

4

2

3

3

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 about the Company’s 
operations.

The Non-Executive Directors hold meetings without the Executive Directors to discuss remuneration of the Executive 
Directors and to meet with the external auditor to discuss the audit of the annual report and accounts.

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 9.

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.

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•  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.

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 during the period comprised Mr. J.B. Fulton (Non-Executive Director and Non-Executive 
Chairman), Mrs. M.L. Jarvis (Non-Executive Director) 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 25. 

Nomination Committee
All the Directors of the Company are members of this Committee, which is chaired by Mr J.B. Fulton. Mr.J.B. Fulton was not 
involved in the selection process for the recruitment of his successor as Non-Executive Chairman.

There were four meetings during this year and key matter considered was:

•  Appointment of an independent Non-Executive Chairman 

The Nomination Committee keeps the composition of the Board and possible Director appointments under regular review. 
For the purpose of identifying a Non-Executive Chairman 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  
Mr. A.C.J. Solway as independent Non-Executive Chairman to succeed Mr J.B. Fulton with effect 1 from July 2015.

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GOVERNANCE

Corporate Governance continued

Audit Committee
The Audit Committee during the period comprised Mr. J.B. Fulton (independent Non-Executive Director and Non-
Executive Chairman), Mrs. M.L. Jarvis (independent Non-Executive Director) and Mr. A.J. Sinclair (Non-Executive Director). 
The Committee, which was 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. As part of its review the Committee notes that the Group Audit 
Partner was rotated in 2011 and the current audit partner‘s five year term will end in 2016.

The Committee gives careful consideration before appointing the auditors to provide other non-audit service 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.

The Committee meets twice a year and one of these meetings is with the external auditors without either of the Executive 
Directors in attendance. Following which the Chairman reports to the Board on matters discussed with the external 
auditors. Mr. D.M. Sinclair and Mrs M.M. Bray were invited to attend one of the meetings held by the audit Committee. 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.

The Committee is satisfied that the 2015 annual report and accounts taken as a whole provide a fair, balanced and 
understandable assessment of the Company’s position as at 31 March 2015 and has advised the Board accordingly.

Based on the Committee’s assessment of the external auditor’s performance, the Committee has provided the Board with 
its recommendation to be made to the Shareholders on the re-appointment of BSG Valentine as external auditors for the 
year ended 31 March 2016. 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 Financial Reporting 
Council’s Guidance on Audit Committees.

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.

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 13 
and in Note 3 to the Consolidated Financial Statements on pages 35 to 36.

An ongoing process for identifying, evaluating and managing the significant risks faced by the Group was in place 
throughout the period from 1 April 2014 to the date of approval of the Annual Report and Accounts. The effectiveness of 
this process is reviewed annually by the Board. 

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Annual Report and Accounts 2015

19
19

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 systems 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 
23 July 2015

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
S
T
T
A
A
T
T
E
E
M
M
E
E
N
N
T
T
S
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I
I

F
F
N
N
A
A
N
N
C
C
A
A
L
L

I
I

O
O
T
T
H
H
E
E
R
R

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20
20

Mountview Estates P.L.C.
Annual Report and Accounts 2015

GOVERNANCE

Remuneration Report

We confirm that there have been no changes to the remuneration 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. 
This report sets out the Company’s policy on Directors’ remuneration for the forthcoming year, and so as practicable, for 
subsequent years as well as information on remuneration paid to Directors in the financial year ended 31 March 2015. The 
report is divided into two sections: Directors’ remuneration policy report, which was approved at the 2014 AGM and shall 
remain in place for a period of three years. This report is represented for information purposes, with relevant changes made 
to references including page numbers, years of operation, and with details of new Directors’ contracts included; and the 
annual report on remuneration which will be subject to an advisory vote at the 2015 AGM and sets out the remuneration 
paid or payable in relation to the year ended 31 March 2015 and the implementation of the policy for the year ahead. The 
parts of the report that have been audited by the auditors have been highlighted as required by the Large and Medium-
sized Companies and Groups (Accounts and Reports)(Amendment) Regulations 2013.

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 comprised during the period  
two independent Non-Executive Directors Mr. J.B. Fulton and Mrs. M.L. Jarvis, Mr. A.J. Sinclair 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.

Base salary

Purpose and link to strategy

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.

Operation

Opportunity

Performance metrics

Changes in year

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.

N/A

N/A

None

Benefits

Purpose and link to strategy

To aid recruitment and retention of high-quality executives.

Operation

Private medical insurance
Life assurance

Opportunity

Performance metrics

N/A

N/A

Changes in year

The CEO ceased to receive a car allowance.

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Annual Report and Accounts 2015

21
21

Purpose and link to strategy

To aid recruitment and retention of high-quality executives.

Pension

R
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P
O
R
T

S
T
R
A
T
E
G
C

I

G
O
V
E
R
N
A
N
C
E

S
S
T
T
A
A
T
T
E
E
M
M
E
E
N
N
T
T
S
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

Operation

Opportunity

Performance metrics

Changes in year

The Company will contribute into a personal pension arrangement for all of the Executive Directors.

N/A

N/A

None

Non-Executive Directors
The Non-Executive Directors receive 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.

Annual bonus

Purpose and link to strategy

To incentivise performance over a 12-month period and reward personal performance as agreed with the 
Remuneration Committee.

Opportunity

Operation

The level of bonus awarded is determined at the discretion of the Remuneration Committee which takes 
into consideration individual and corporate performance against a pre-determined set of criteria.

In establishing bonus awards, the Remuneration Committee takes in to account the Group’s performance by 
way of comparison with other property and similar-sized companies.

Pensions
The Company contributes 15% 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.

I
I

F
F
N
N
A
A
N
N
C
C
A
A
L
L

I
I

O
O
T
T
H
H
E
E
R
R

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22

Mountview Estates P.L.C.
Annual Report and Accounts 2015

GOVERNANCE

Remuneration Report continued

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:

Contract date

Unexpired term

Notice period

D.M. Sinclair

8 August 2002

M.M. Bray

J.B. Fulton 

A.J. Sinclair

M.L. Jarvis

1 April 2004

1 November 2010

1 July 2014

No fixed term

No fixed term

Resigned on 30 June 2015

15 months

24 months 

12 months

12 months

none

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 annual 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.

Illustration of the application of the remuneration policy
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. 

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Annual Report and Accounts 2015

23
23

Implementation Report
Audited Information
Director’s Total Remuneration Single Figure Table

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

2015

Executive

D.M. Sinclair

Mrs M.M. Bray

Non-Executive

J.B. Fulton 
(resigned as a Non-Executive Chairman on 30 June 2015)

A.J. Sinclair 

M.L. Jarvis  
(appointed as a Non-Executive Director 1 July 2014)

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 

Unaudited Information
CEO Single Figure

2015

2014

2013

2012

2011

D.M. Sinclair

D.M. Sinclair

D.M. Sinclair

D.M. Sinclair

D.M. Sinclair

G
O
V
E
R
N
A
N
C
E

S
S
T
T
A
A
T
T
E
E
M
M
E
E
N
N
T
T
S
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I
I

F
F
N
N
A
A
N
N
C
C
A
A
L
L

I
I

O
O
T
T
H
H
E
E
R
R

Salary  
£000

Bonus 
£000

Benefits  
in kind 
£000

Pensions 
contributions  
£000

360

265

60

36

27

748

300

210

–

–

–

510

19

–

–

–

–

19

99

71

 –

–

–

Total  
£000

778

546

60

36

27

170

1,447

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

CEO single figure of  
total remuneration 
£’000

778

659

662

520

523

Percentage change in remuneration of CEO and employees. The percentage change in remuneration between 2015 and 
2014 for the CEO and for all employees in the Group was:

CEO

Employee population

18%

16%

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24

Mountview Estates P.L.C.
Annual Report and Accounts 2015

GOVERNANCE

Remuneration Report continued

Performance graph
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.

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.

400

350

300

250

200

150

100

50

0
2010

2011

2012

2013

2014

2015

Mountview Estates – Total Return Index

FTSE All Share R/E IVST SVS £ – Total Return Index

Relative importance of spend on pay
The difference in actual expenditure between 2014 and 2015 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)
+3.38m

Dividend (£m)
+2.93m

Total employee pay (£m)
+0.42m

28.44

31.82

2014

2015

7.79
2014

10.72

2015

2.60

3.02

2014

2015

Statement of implementation of remuneration policy in the current financial year
With effect from 1 April 2015 the basic salary of CEO will be increased by 5% and the Finance Director by 7.5%. Pension 
benefits for both Executive Directors will be reduced from 15% to 10% of basic salary and bonuses with effect from 1 April 
2015.

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Annual Report and Accounts 2015

25
25

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
S
T
T
A
A
T
T
E
E
M
M
E
E
N
N
T
T
S
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I
I

F
F
N
N
A
A
N
N
C
C
A
A
L
L

I
I

O
O
T
T
H
H
E
E
R
R

Details of the Remuneration Committee
The Remuneration Committee during the period comprised 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 17.

Statement of voting at general meeting
At the AGM held on 13 August 2014 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)

Total number 
of votes

% of 
votes cast

1,780,789

648,076

2,428,865

–

2,428,865

73.4

26.6

100

–

–

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

31 March 
2015

31 March 
2014

538,383

12,302

538,383

12,302

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

132,484

132,484

All the above interests are beneficial.

Mr. A.C.J. Solway, Non-Executive Chairman, purchased 500 Ordinary Shares in the Company between 31 March 2015 and  
23 July 2015.

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26
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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Consolidated Statement  
of Comprehensive Income

FOR THE YEAR ENDED 31 MARCH 2015

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

Net finance costs

Profit before taxation

Taxation – current

Taxation – deferred

Taxation

Profit attributable to equity Shareholders

Basic and diluted earnings per share (pence)

All the activities of the group are classed as continuing.

Year ended 
31 March 
2015 
£000

Year ended 
31 March 
2014 
£000

Notes

4

4

13

13

8

19

9

11

71,331

(24,621)

46,710

(5,055)

–

41,655

57

41,712

(1,736)

39,976

(8,422)

263

(8,159)

31,817

816.0p

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

The notes on pages 30 to 48 are an integral part of these consolidated financial statements.

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Annual Report and Accounts 2015

27
27

Consolidated Statement  
of Financial Position

FOR THE YEAR ENDED 31 MARCH 2015

As at  
March 2015 
£000

As at  
March 2014 
£000

Notes

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
O
T
T
H
H
E
E
R
R

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 23 July 2015.

D.M. Sinclair 
Chairman 

M.M. Bray 
Director

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

12

13

15

16

21

22

22

22

23

18

19

18

17

2,008

29,399

31,407

2,116

29,396

31,512

323,020

321,323

1,948

1,625

326,593

358,000

1,578

1,217

324,118

355,630

195

55

25

56

195

55

25

56

287,330

287,661

265,260

265,591

60,200

5,259

65,459

963

2,343

1,574

4,880

70,339

358,000

69,800

5,522

75,322

8,168

2,004

4,545

14,717

90,039

355,630

The notes on pages 30 to 48 are an integral part of these consolidated financial statements.

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28

Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Consolidated Statement  
of Changes in Equity

FOR THE YEAR ENDED 31 MARCH 2015

Changes in equity for year ended 
31 March 2014

Balance as at 1 April 2013

Profit for the year

Dividends

Balance at 31 March 2014

Changes in equity for year ended 
31 March 2015

Balance as at 1 April 2014

Profit for the year

Dividends

Balance at 31 March 2015

Share  
capital 
£000

Capital 
reserve 
£000

Capital 
redemption 
reserve 
£000

Notes

Other 
reserves 
£000

Retained 
earnings 
£000

Total 
£000

195

25

55

56

243,641

243,972

195

195

25

25

55

55

28,442

28,442

(6,823)

(6,823)

56

265,260

265,591

56

265,260

265,591

31,817

31,817

(9,747)

(9,747 )

195

25

55

56

287,330

287,661

10

23

10

23 

The notes on pages 30 to 48 are an integral part of these consolidated financial statements.

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

29
29

Consolidated Cash Flow  
Statement

FOR THE YEAR ENDED 31 MARCH 2015

Year ended 
31 March 
2015 
£000

Year ended 
31 March 
2014 
£000

Notes

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

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) 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 in cash and cash equivalents 

Opening cash and cash equivalents

Cash and cash equivalents at end of year

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

41,712

37,738

140

0

0

(57)

41,795

(1,697)

(370)

339

40,067

(1,736)

(11,393)

26,938

54

–

(33)

–

21

–

(10,181)

(9,747)

(19,928)

7,031

(6,144)

887

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)

13

13

12 

18(a)

The notes on pages 30 to 48 are an integral part of these consolidated financial statements.

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

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30
30

Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Consolidated  
Financial Statements

FOR THE YEAR ENDED 31 MARCH 2015

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 23 July 2015.

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 52 to 58.

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.

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Annual Report and Accounts 2015

31
31

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

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%

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Consolidated  
Financial Statements continued

FOR THE YEAR ENDED 31 MARCH 2015

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 2015 is on page 36.

(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.

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Annual Report and Accounts 2015

33
33

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

2. Accounting policies continued
(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.

(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 2014. 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

 — IFRS 10, ‘Consolidated Financial statements’, 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 12, ‘Disclosures of interests in other entities’, brings together all the disclosure requirements about the Group’s 

interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. 

 — 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.

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 9, ‘Financial Instruments’, replaces IAS 39 and sets out the requirements for recognising and measuring financial 
assets, financial liabilities and some contracts to buy or sell non-financial items. IFRS 9 is effective for annual periods 
beginning on or after 1 January 2018.

•  IFRS 15, ‘Revenue from contracts’, replaces both IAS 11 and IAS 19 as well as SIC 31, IFRIC 13, IFRIC 15 and IFRIC 18 and 
establishes a single, comprehensive framework for revenue recognition. IFRS 15 is effective for annual periods beginning 
on or after 1 January 2017. 

All the above IFRSs, IFRIC interpretations and amendments to existing standards are still to be 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

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34

Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Consolidated  
Financial Statements continued

FOR THE YEAR ENDED 31 MARCH 2015

2. Accounting policies continued
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.

(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 a £30 million revolving loan facility with HSBC Bank. The termination date is November 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.

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Annual Report and Accounts 2015

35
35

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

2. Accounting policies continued
Inventory expected to be settled in more than 12 months

The Board estimates that inventory of £18.4 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 the directors 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.

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Consolidated  
Financial Statements continued

FOR THE YEAR ENDED 31 MARCH 2015

3. Financial risk management objectives and policies continued
(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.

(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

2015 
£000

61,163

(1,625)

59,538

287,661

347,199

17.15%

2014 
£000

77,968

(1,217)

76,751

265,591

342,342

22.42%

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

2015 
£000

2014 
£000

53,382

17,949

71,331

18,696

5,925

24,621

34,686

12,024

46,710

48,364

17,786

66,150

21,870

5,685

27,555

26,494

12,101

38,595

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Annual Report and Accounts 2015

37
37

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:

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

Group 
£000

66,150

34,553

(2,344)

28,442

355,630

90,039

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

2015

2014

Property 
trading 
£000

Property 
investment 
£000

Group 
£000

Property 
trading 
£000

Property 
investment 
£000

Revenue

Operating profit before changes in fair value 
of investment properties

Finance costs

Profit after tax

Assets

Liabilities

Fixed assets

  Capital expenditure

  Depreciation

70,801

41,382

(1,736)

322,405

70,270

33

95

530

273

–

71,331

65,649

41,655

(1,736)

31,817

34,221

(2,344)

501

332

–

326,074

89,832

29,556

207

35,595

358,000

69

–

45

70,339

33

140

19

92

518

46

537

138

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 24)

2015 
£000

2014 
£000

140

–

40

12

9

48

138

42

40

12

9

101

12,024

42

12,101

57

The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on page 20.

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

2015 
£000

26

2014 
£000

26

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Consolidated  
Financial Statements continued

FOR THE YEAR ENDED 31 MARCH 2015

7. Staff costs (including Directors)

Wages and salaries

Social security costs

Pension costs

Directors’ remuneration

2015 
£000

2,512

300

208

3,020

2014 
£000

2,170

259

169

2,598

Total Directors’ remuneration including salary, bonuses, benefits in kind and pensions contributions 
amounted to:

1,447

1,219

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 21% (2014: 23%)

Deferred tax: Current year 21% (2014: 23%)

Taxation attributable to the Company and its subsidiaries

2015 
£000

1,736

2015 
£000

8,422

(263)

8,159

2014 
£000

2,344

2014 
£000

7,724

(772)

6,952

(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 21% (2014: 23%)

39,976

8,394

35,394

8,140

Expenses not deductible for tax

Depreciation in excess of capital allowances

Taxation on capital gains

Profit on sale of assets

Revaluation surplus in subsidiaries not taxed

Deferred tax

Sundry adjusting items

16

17

10

--

(12)

(263)

(3)

34

16

305

(39)

(732)

(772)

–

Taxation attributable to the Company and its subsidiaries

8,159

6,952

The deferred tax adjustment relates to the change in fair value of investment properties.

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Annual Report and Accounts 2015

39
39

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

10. Dividends
On 18 August 2014, a dividend of 150p per share (2013: 125p per share) was paid to the Shareholders. On 31 March 2015 a 
dividend of100 p per share (2014: 50p per share) was paid to the Shareholders. This resulted in total dividends paid in the 
year of £9.74million (2014: £6.82 million).

In respect of the current year, the Directors propose that a final dividend of 175 p per share will be paid to the Shareholders 
on 24 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 2015 is payable to all Shareholders on the Register of Members on 24 July 2015. The total 
estimated final dividend to be paid is £6.82 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)

Weighted average number of Ordinary Shares for basic and fully diluted earnings per share

Basic and diluted earnings per share

The Company has no dilutive potential Ordinary Shares.

12. Property, plant and equipment

2015 
£000

2014 
£000

31,817

28,442

3,899,014

3,899,014

816.0p

729.5p

Cost

At 1 April 2014

Additions

Disposals

At 31 March 2015

Depreciation

At 1 April 2014

Charge for the year

On disposals

At 31 March 2015

Net book value

At 31 March 2014

At 31 March 2015

Property, plant and equipment are located within the UK. 

Freehold 
property 
£000

Fixtures 
and fittings 
£000

Computer 
equipment 
£000

2,671

–

–

2,671

701

53

–

754

1,970

1,917

408

13

(132)

289

266

79

(132)

213

142

76

28

20

(28)

20

24

9

(28)

5

4

15

Total 
£000

3,107

33

(160)

2,980

991

141

(160)

972

2,116

2,008

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Consolidated  
Financial Statements continued

FOR THE YEAR ENDED 31 MARCH 2015

12. Property, plant and equipment continued

Freehold 
property 
£000

Fixtures 
and fittings 
£000

Motor
vehicles
£000

Computer 
equipment 
£000

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. 

13. Investment properties

Fair value at 1 April 2014/(2013)

Subsequent expenditure

Disposals

Increase in Fair Value during the year

At 31 March 2015/(2014)

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

2015 
£000

29,396

–

(54)

57

29,399

Total 
£000

3,323

19

(235)

3,107

986

138

(133)

991

2,337

2,116

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 one Ground Rent unit for £54,000.

There was no gain or loss on the disposal made in the current year. In 2014 a gain of £214,000 was made on the disposals, 
and this 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 2015 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.

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Annual Report and Accounts 2015

41
41

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.

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

The aggregate Market Value of the Company’s interests in its investment portfolios was:

Louise Goodwin Limited
•  Freehold: £26,186,000 (Twenty-six million, one hundred and eighty-six thousand pounds).

A.L.G. Properties Limited
•  Freehold: £3,213,000 (Three million, two hundred and thirteen 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 £57,000 has arisen on valuation of investment properties to Market Value as at 31 March 2015 (2014: 
surplus of £3.185 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.

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

Principal activity

Hurstway Investment Company Limited

Property trading

Louise Goodwin Limited

A.L.G. Properties Limited

Property investment

Property investment

Cost 
2014 
2015
£000

1

15,351

2,924

18,276

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Consolidated  
Financial Statements continued

FOR THE YEAR ENDED 31 MARCH 2015

15. Inventories

Residential properties

2015 
£000

2014 
£000

323,020

321,323

The Company’s freehold and long leasehold interests in its portfolio of properties which are held as Trading Stock were 
valued on 30 September 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 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 confirm that the aggregate Market Value of the Company’s interest in its trading properties was

Freehold

£473,759,504

Long leasehold

£192,106,762

Total

£665,866,266

(Six hundred and sixty-five million, eight hundred and sixty-six thousand, two hundred and  
sixty-six pounds)

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.

16. Trade and other receivables

Trade receivables

Prepayments and accrued income

2015 
£000

214

1,734

1,948

2014 
£000

219

1,359

1,578

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.

17. Trade and other payables

Trade creditors

Other taxes and social security costs

Other creditors

2015 
£000

1,114

185

1,044

2,343

2014 
£000

716

167

1,121

2,004

The Directors consider that the carrying amount of trade and other payables approximates their fair value.

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Annual Report and Accounts 2015

43
43

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 2015 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

2015 
£000

738

60,200

   225 

61,163

2015 
£000

(738)

1,625

887

2014 
£000

7,361

69,800

807

77,968

2014 
£000

(7,361)

1,217

(6,144)

2015 
£000

2014 
£000

963

60,200

–

61,163

(963)

60,200

8,168

43,000

26,800

77,968

(8,168)

69,800

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Consolidated  
Financial Statements continued

FOR THE YEAR ENDED 31 MARCH 2015

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

2015 
£000

2.26%

2.81%

1.0%

2014 
£000

2.33%

2.78%

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 2015 

and the rate of interest payable is:

•  1.45% over Base Rate on MML.

•  1.6% over Base rate on overdraft.

•  Headroom of this facility at 31 March 2015 amounted to £14.3 million (2014: £7.6 million).

2.   The Group has a £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 1.8% 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 2015 amounted to £44 million (2014: £32 million).

3.   The Group has a £30 million long-term revolving loan facility with HSBC Bank. The termination date for this facility 

is November 2019. 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 2015 amounted to 
£800,000 (2014: £nil).

4.   Other loans consist of loans from connected persons, and companies of which Mr. D.M. Sinclair is a Director. Loans of 

£50,000 (2014: £806,915) are repayable within one year. Interest payable on these loans is at 0.5% above Barclays Bank Plc 
base rate. 

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Annual Report and Accounts 2015

45
45

19. Deferred Tax
Analysis for financial reporting purposes

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
O
T
T
H
H
E
E
R
R

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) to income for the year

At 31 March

2015 
£000

5,259

5,259

2015 
£000

5,522

(263)

5,259

The following are in deferred tax liabilities recognised by the Group and movements thereon during the period:

Revaluation of properties

At 1 April

(Credit) to income for the year

At 31 March

2015 
£000

5,522

(263)

5,259

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

2014 
£000

5,522

5,522

2014 
£000

6,294

(772)

5,522

2014 
£000

6,294

(772)

5,522

20. Financial instruments
Fair value of financial assets
The Group’s financial assets at the year end consist of trade receivables and cash at bank and in hand of £1.625 million 
(2014: £1.217 million).

The Directors consider that the carrying amount of cash at bank and in hand approximates their fair value.

The trade receivables amounted to £1.948 million (2014: £1.578 million).

The Directors consider that the carrying amount of trade receivables approximates their fair value.

The complaint made by Mountview Estates P.L.C to Barclays Bank PLC in relation to the interest rate SWAP January 2008 
has been resolved on mutually accepted terms. The terms of that resolution are confidential.

Fair value of borrowings

Bank overdrafts and loans

Secured bank loans

2015 
£000

963

60,200

61,163

2014 
£000

8,168

69,800

77,968

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Consolidated  
Financial Statements continued

FOR THE YEAR ENDED 31 MARCH 2015

20. Financial instruments continued
Interest charged in the Income Statement for the above borrowings amounted to £1.73 million (2014: £2.34 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 18.

As at 31 March 2015 it is estimated that general increase of 1 point in interest rates would decrease the Group’s profit 
before tax by approximately £611,000 (2014: £771,000).

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 2015

Interest bearing loans and borrowings

Trade and other payables

At 31 March 2014

Interest bearing loans and borrowings

Trade and other payables

Reconciliation of maturity analysis

At 31 March 2015

Interest bearing loans and borrowings per accounts

Interest

Financial liability cash flows as above 

At 31 March 2014

Interest bearing loans and borrowings per accounts

Interest

Financial liability cash flows as above

Less than 
1 year 
£000

Between 
1 and 5 years 
£000

963

1,626

60,200

–

Less than 
1 year 
£000

Between 
1 and 5 years 
£000

Over 
5 years 
£000

–

– 

Over 
5 years 
£000

8,168

2,004

43,000

26,800

–

Less than 
1 year 
£000

Between 
1 and 5 years 
£000

Over 
5 years 
£000

963

50

1,013

60,200

8,108

68,308

Less than 
1 year 
£000

Between 
1 and 5 years 
£000

8,168

170

8,338

43,000

6,574

49,574

–

–

–

Over 
5 years 
£000

26,800

5,096

31,896

Total 
£000

61,163

1,626

Total 
£000

77,968

2,004

Total 
£000

61,163

8,158

69,321

Total 
£000

77,968

11,840

89,808

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Annual Report and Accounts 2015

47
47

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

2015 
£000

2014 
£000

250

195

2015 
£000

55

25

56

136

250

195

2014 
£000

55

25

56

136

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

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

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 2015 stood at £56,000 (2014: 
£56,000).

23. Retained earnings

Balance at 1 April 2014

Net profit for the year

Dividends paid

Balance at 31 March 2015

£000

265,260

31,817

(9,747)

287,330

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Consolidated  
Financial Statements continued

FOR THE YEAR ENDED 31 MARCH 2015

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 £41,961 (2014: £56,825) 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 £nil (2014: £631,915). 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 £3,511 (2014: £3,483).

(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 £50,000 (2014: £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 £370 (2014: £33).

(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(2014: £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(2014: £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

2015 
£000

2014 
£000

51

38

–

89

47

48

–

95

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49

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

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 2015, 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 15, 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 2015 and of the Group 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.

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.

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Independent  
Auditors’ Report continued

TO THE MEMBERS OF MOUNTVIEW ESTATES P.L.C.

Our application of materiality
We determined materiality for the Group to be £3.4 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 part of the 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 Group Financial 

Statements are prepared is consistent with the Group Financial Statements.

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51

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

•  certain elements of the Report to the shareholders by the Board on Directors’ remuneration.

Other matters
We have reported separately on the Parent Company financial statements of Mountview Estates P.L.C. for the year ended 
31 March 2015.

Athanasios Athanasiou (Senior Statutory Auditor)  
for and on behalf of BSG Valentine 
Chartered Accountants and Statutory Auditors 
London, United Kingdom 
23 July 2015

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Company Balance Sheet 
under UK GAAP

FOR THE YEAR ENDED 31 MARCH 2015

As at  
31 March 
2015 
£000

As at  
31 March 
2014 
£000

Notes

3

4

5

6

7

8

9

10

10

10

11

1,965

18,276

20,241

2,035

18,276

20,311

307,089

306,305

1,748

1,504

310,341

(4,566)

305,775

326,016

(69,965)

256,051

195

55

25

39

1,512

1,165

308,982

(14,249)

294,733

315,044

(78,926)

236,118

195

55

25

39

255,737

256,051

235,804

236,118

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 23 July 2015.

D.M. Sinclair 
Chairman 

M.M. Bray 
Director

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Annual Report and Accounts 2015

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53

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

Notes to the Financial Statements 
under UK GAAP

FOR THE YEAR ENDED 31 MARCH 2015

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

– 2%

– 20%

– 25%

(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 2015 is on page 36.

(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.

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Financial Statements 
under UK GAAP continued

FOR THE YEAR ENDED 31 MARCH 2015

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:

2015 
£000

2,512

300

208

3,020

2014 
£000

2,170

259

169

2,598

2015 
£000

2014 
£000

1,447

1,219

The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on pages 20 to 25.

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 2014

Additions

Disposals

At 31 March 2015

Depreciation

At 1 April 2014

Charge for the year

On disposals

At 31 March 2015

Net book value

At 31 March 2014

At 31 March 2015

All tangible assets of the Company are located within the UK.

2015 
£000

26

2014 
£000

26

Freehold 
property 
£000

Fixtures and 
fittings 
£000

Computer 
equipment 
£000

2,671

–

–

2,671

701

53

–

754

1,970

1,917

178

4

(6)

176

117

32

(6)

143

61

33

28

20

(27)

21

24

9

(27)

6

4

15

Total 
£000

2,877

24

(33)

2,868

842

94

(33)

903

2,035

1,965

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Annual Report and Accounts 2015

55
55

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

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

UK

UK

UK

5. Stocks

Residential properties

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

2015 
£000

1

15,351

2,924

18,276

2014 
£000

1

15,351

2,924

18,276

Principal activity

Property trading

Property investment

Property investment

2015 
£000

2014 
£000

307,089

306,305

2015 
£000

179

1,569

1,748

2015 
£000

737

1,108

1,334

184

978

225

2014 
£000

215

1,297

1,512

2014 
£000

7,361

688

4,155

167

1,071

807

4,566

14,249

Other loans consist of loans from connected persons. Interest payable on these loans was at 0.5% above Barclays Bank Plc 
base rate.

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Financial Statements 
under UK GAAP continued

FOR THE YEAR ENDED 31 MARCH 2015

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 2015 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

2015 
£000

60,200

9,765

–

2014 
£000

69,800

9,126

–

69,965

78,926

2015 
£000

2014 
£000

963

60,200

–

61,163

(963)

60,200

8,168

43,000

26,800

77,968

(8,168)

69,800

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 2015 

and the rate of interest payable is:

•  1.45% over Base Rate on MML.

•  1.6% over Base rate on overdraft.

Headroom of this facility at 31 March 2015 amounted to £14.3 million (2014: £7.6 million).

2.   The Group has a £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 1.8% 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 2015 amounted to £44 million (2014: £32 million).

3.   The Group has a £30 million long-term revolving loan facility with HSBC Bank. The termination date for this facility 

is November 2019. 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 2015 amounted to 
£800,000 (2014: £nil).

4.   Other loans consist of loans from connected persons, and companies of which Mr. D.M. Sinclair is a Director. Loans of 

£50,000 (2014: £806,915) are repayable within one year. Interest payable on these loans is at 0.5% above Barclays Bank Plc 
base rate.

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57
57

R
E
P
O
R
T

S
T
R
A
T
E
G
C

I

2015 
£000

2014 
£000

250

195

2015 
£000

55

25

39

119

250

195

2014 
£000

55

25

39

119

G
G
O
O
V
V
E
E
R
R
N
N
A
A
N
N
C
C
E
E

S
T
A
T
E
M
E
N
T
S

I
I

N
N
F
F
O
O
R
R
M
M
A
A
T
T
O
O
N
N

I
I

I

F
N
A
N
C
A
L

I

O
O
T
T
H
H
E
E
R
R

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

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 2015 stood at £39,000 (2014: 
£39,000).

11. Profit and loss account

Balance at 1 April

Net profit for the year 

Dividends paid

Balance at 31 March

2015 
£000

2014 
£000

235,804

219,424

29,680

(9,747)

23,203

(6,823)

255,737

235,804

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Notes to the Financial Statements 
under UK GAAP continued

FOR THE YEAR ENDED 31 MARCH 2015

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 £41,961 (2014: £56,825) 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 £nil (2014: £631,915). 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 £3,511 (2014: £3,483).

(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 £50,000 (2014: £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 £370 (2014: £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 (2014: £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 (2014: £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 2015 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

2015 
£000

2014 
£000

5

45

–

50

10

37

–

47

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59

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 2015 
which comprise the Parent Company Balance Sheet and the related Notes 1 to 25. 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 15 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 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 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 2015; 

•  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 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.

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

FINANCIAL STATEMENTS

Independent  
Auditors’ Report continued

FOR THE YEAR ENDED 31 MARCH 2015

Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, 
in our opinion:

•  adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not 

been received from branches not visited by us; or

•  the Parent Company Financial Statements are not in agreement with the accounting records and returns; or

•  certain disclosures of Directors’ Remuneration specified by law are not made; or

•  we have not received all the information and explanations we require for our audit.

Other matter
We have reported separately on the Group Financial Statements of Mountview Estates P.L.C. for the year ended  
31 March 2015.

Athanasios Athanasiou (Senior Statutory Auditor)  
for and on behalf of BSG Valentine 
Chartered Accountants and Statutory Auditors 
London, United Kingdom 
23 July 2015

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Table of Comparative Figures

FOR THE YEAR ENDED 31 MARCH 2015

IFRS 
2009 
£000

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

IFRS 
2013 
£000

56,646

28,928

6,783

22,145

568.0p

175p

3.25

6,823

2,479

1,319

As at 
31 March 
2015
IFRS 
2015  
£000

71.331

39,976

8,159

31,817

816.0p

275p

2.98

IFRS 
2014  
£000

66,150

35,394

6,952

28,442

729.5p

200p

3.64

7,798*

10,722

2,598

1,132

3,020

1,324

28.17

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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

41.84

42.89

37.15

33.95

36.33

33.32

56.80

56.87

51.59

51.14

53.2

43.57

43.84

23.7

24.3

19.1

17.3

19.3

14.52

12.35

*  The £10.72 million dividend in relation to 2015 is made up of the interim dividend of £3.90 million and the final dividend of  £6.82 million, which will be paid 

on 24 August 2015, subject to approval at the AGM on 19 August 2015. 

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Mountview Estates P.L.C.
Annual Report and Accounts 2015

OTHER INFORMATION

Notice of Meeting

Notice is hereby given that the 78th Annual General Meeting of the Members of Mountview Estates P.L.C. (incorporated in 
England and Wales with registered number 00328020) (the “Company”) will be held at the offices of Norton Rose Fulbright 
LLP, 3 More London Riverside, London SE1 2AQ on 19 August 2015 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 2015.

2.  To declare a final dividend of 1.75p per share payable on 24 August 2015 to Shareholders on the register at 24 July 2015.

3.  To re-appoint Mrs. M.M.Bray as a Director of the Company.

4.  To elect Mr. A.C.J. Solway as a Director of the Company, provided that resolution 8 is passed.

5.   To approve the Directors’ Remuneration Report (excluding the Directors’ Remuneration Policy) in the Annual Report and 

Accounts for the year ended 31 March 2015. 

6.   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.

7.  To authorise the Directors to determine the Auditors’ remuneration for the ensuing year.

In accordance with Listing Rule 9.2.2 ER, notice is also hereby given for the independent shareholders of the Company only:

8.  To elect Mr A.C.J. Solway as a Director of the Company, provided that resolution 4 is passed.

By Order of the Board

M.M. Bray 
Company Secretary

Mountview House  
151 High Street 
Southgate 
London N14 6EW

23 July 2015

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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.    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.

3.    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.

4.    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 17 August 2015 (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.

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Annual Report and Accounts 2015

OTHER INFORMATION

Notice of Meeting continued 

6.    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.

7.   

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 Conduct 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 23 July 2015 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 23 July 2015, 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 
23 July 2015 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.

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Explanatory note for resolutions 4 and 8:
Changes to the Financial Conduct Authority’s Listing Rules (“LR”) which came into effect in 2014 introduced new voting 
requirements for the election of independent directors in listed companies with a controlling shareholder (a shareholder 
who exercises 30% or more of the votes). Under the new rules, the election or re-election of any director whom the 
Company has determined to be independent under the UK Corporate Governance Code (“the Code”) must be approved 
by the shareholders as a whole, and separately by all shareholders excluding the Sinclair family concert party which is 
collectively deemed to be a controlling shareholder (the “Independent Shareholders”). Therefore at this year’s Meeting 
there will be two votes in relation to the election of the non-executive director, Mr. A.C.J. Solway, one vote by the 
shareholders as a whole and another vote by the Independent Shareholders.

If a vote to re-elect a non-executive director is not passed by the Independent Shareholders, the Company may propose a 
further resolution to re-elect the relevant director between 90 and 120 days from the date of the original vote. This further 
resolution must be passed by a majority of the shareholders as a whole only, and there is no requirement for an additional 
vote by the Independent Shareholders. LR 9.2.2DG allows any non-executive director who is not re-elected by the 
Independent Shareholders to remain in office until the further resolution has been voted on.

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Annual Report and Accounts 2015

OTHER INFORMATION

Shareholders’ information

Financial calendar 2015

Final dividend record date

Annual Report posted to Shareholders

Annual General Meeting

Final dividend payment

Interim results

24 July

24 July

19 August

24 August

26 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

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24162.04   21 July 2015 4:11 PM   Proof 12Mountview Estates P.L.C.Mountview House,151 High Street,Southgate,London N14 6EWTel: +44 (0) 20 8920 5777Fax: +44 (0) 20 8882 9981www.mountviewplc.co.ukMountview Estates P.L.C. Annual Report and Accounts 2015Mountview Estates AR2015 - 24162.04.indd   121/07/2015   16:12:32