Mountview Estates PLC

Mountview Estates P.L.C.

Annual Report and Accounts 2016

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

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.

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Our Performance

REVENUE

GROSS PROFIT

£79.8m
11.9%

(2015: £71.3m)

£53.0m
13.5%

(2015: £46.7m)

PROFIT BEFORE TAX

£48.4m
21.0%

(2015: £40.0m)

PROFIT BEFORE TAX EXCLUDING 
INVESTMENT PROPERTIES REVALUATION

£46.9m
17.3%

(2015: £40.0m)

SHAREHOLDERS’ EQUITY

EARNINGS PER SHARE

£311.8m
8.4%

(2015: £287.7m)

992.9p
21.7%

(2015: 816.0p)

NET ASSETS PER SHARE

DIVIDEND PER SHARE

£79.9
8.3%

(2015: £73.8)

300p
9.1%

(2015: 275p)

Mountview Estates P.L.C.
Annual Report and Accounts 2016

1

CONTENTS

STRATEGIC REPORT

1  Our Performance

2  Chairman’s Statement

3  Chief Executive’s Statement

4  Where we Operate

4  Review of Operations

GOVERNANCE

8  Directors and Advisers

9  Directors’ Report

17  Statement of Directors’ Responsibilities

18  Corporate Governance

23  Remuneration Report

FINANCIAL STATEMENTS

30  Consolidated Statement  
of Comprehensive Income

31  Consolidated Statement  
of Financial Position

32  Consolidated Statement  
of Changes in Equity

33  Consolidated Cash Flow Statement

34  Notes to the Consolidated Financial 

Statements

53  Independent Auditors’ Report to the 
Members of Mountview Estates P.L.C.

56  Company Balance Sheet under UK GAAP

57  Company Cash Flow under UK GAAP

58  Notes to the Financial Statements 

under UK GAAP

67  Independent Auditors’ Report to the 
Members of Mountview Estates P.L.C. 
on the Parent Company Financial 
Statements

69  Table of Comparative Figures

OTHER INFORMATION

70  Notice of Meeting

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 100 pence per share are as follows: 

73  Adoption of Financial Reporting  

Standard FRS 102

74  Shareholders’ Information

Ex-dividend date 
Record date 
Payment date 

14 July 2016 
15 July 2016 
15 August 2016 

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

2
Chairman’s Statement

Dear Shareholder,

FINANCIAL RESULTS
First and foremost, I am delighted to report to you that 
our Executive team have achieved another year of record 
results. Profits before tax for the year to 31 March 2016 have 
increased by 21% to £48.4 million. As you can see detailed 
in the pages that follow, your Company continues to derive 
rising returns from its portfolio of properties.

This impressive achievement has been delivered by 
a combination of astute buying, efficient property 
management and the skilful realisation of value from 
property reversions. Our Executive Directors, managers and 
staff deserve our congratulations and the report of your 
Chief Executive sets out the background to these results in 
more detail.

Accordingly, your Board has increased the dividend, but 
only by a margin that it feels is sustainable in the light of 
current business risk. The dividend for the full year will be 
increased by 25p to £3.00, an increase of 9%. We believe 
this to be sustainable and dividend cover remains at over 
three times. We expect to continue to pay the major part 
of the annual dividend towards the end of March, as in the 
current year, for the foreseeable future.

STRATEGY
At Mountview we remain a tightly focused property 
trading business, specialising in Regulated Tenancies. Our 
portfolio is centred around London and the Home Counties. 
Although other types of private rented tenancy have 
increased during the year, Regulated Tenancies will remain 
the core of our business. We believe that this focus is at the 
heart of our continuing success.

Whilst we have continued to deliver strong growth in 
revenue and profits over the last five years, there is no 
denying that returns have been enhanced by general 
increases in property values. In recent times the Chancellor 
of the Exchequer has made changes in taxation to make 
property investment by institutions and individuals less 
attractive and this has slowed general property transaction 
volume in recent months. Further, the recent decision by 
the UK to leave the EU has negatively impacted the value 
of property companies as investors expect a downturn in 
prices. It is very difficult to predict what will happen, but 
we face volatile and uncertain times as a result of these 
and other factors. Our cautious approach to investment is 
appropriate to these circumstances and our strong Balance 
Sheet will allow us to make advantageous purchases in 
adverse conditions, should they arise.

OUR PEOPLE
The results would not be achieved without a great deal of 
hard work done by the Executives and staff of Mountview 
and, on behalf of all shareholders, I thank them for their 
efforts. During my first year as Chairman, I have met many 
of the Company’s employees and have been impressed 
by the quality of our people and their engagement and 
commitment to our business. As our Chief Executive said in 
his comments last year, we continue to develop our staff at 
all levels so that the performance of the Company can be 
protected and enhanced as we move forward.

I would also like to thank Alistair Sinclair, a Non-Executive 
Director of the Company who retired in December 2015. 
Alistair made an extremely valuable contribution during his 
five years’ service. I am delighted to welcome Dr. Andrew 
Williams to the Board in Alistair’s place.

GOVERNANCE
We have made some changes to the composition of 
the Board’s Committees following the resignation of 
Alistair Sinclair. Audit is now chaired by Mhairi Jarvis and 
Remuneration is chaired by myself. We have also extended 
the scope of the Audit Committee to include the review 
of risk and in future it will be called the Audit and Risk 
Committee. All NEDs are members of the Audit and Risk 
and Remuneration Committees.

Your Board is also responding to requests from shareholders 
for greater transparency in the conduct of the Company’s 
affairs and this is reflected in changes to this report. We 
have expanded the Remuneration Committee and Audit 
and Risk Committee reports to provide more insight into 
their workings.

I am grateful to the shareholders who have given up their 
time to meet with me during this last year. I have found our 
discussions to be most useful and have shared the feedback 
generally with the Board. I look forward to seeing you at our 
Annual General Meeting.

A.C.J. Solway 
Non-Executive Chairman 
14 July 2016

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Chief Executive’s Statement

Mountview Estates P.L.C.
Annual Report and Accounts 2016

3

Whilst this statement reviews the results for the year 
ended 31 March 2016 there is also a statement from our 
Non-Executive Chairman, Tony Solway. By the time you 
receive these Report and Accounts, Tony will have been 
in office for over a year. In the meantime, Alistair Sinclair 
has retired from his position as Non-Executive Director. 
Alistair served the Company well for over five years for 
which we thank him wholeheartedly. His position was taken 
by Dr. Andrew Williams, who becomes the first member 
of the third generation of the Sinclair family to hold office 
in the Company. After more than seventy-nine years of 
Mountview’s existence it is a pleasure to have this degree of 
continuity and we welcome Andrew to the Board. 

During the financial year ended 31 March 2016 revenue has 
increased by 11.9%, gross profit has increased by 13.5%, and 
profit before tax has increased by 21%. This has enabled 
earnings per share to increase by 21.7% to 993 pence which 
covers the increased dividend per share 3.3 times. The 
recommended  final dividend of 100 pence per share in 
respect of the year ended 31 March 2016 will be payable on 
15 August 2016 to Shareholders on the Register of Members 
as at 15 July 2016. The total dividends for the year at 300 
pence per share will have increased by a further 9.1% when 
compared with the previous year.

During my twenty-six years as Chief Executive Officer, 
dividends have multiplied more than 26 times. A review 
of the Table of Comparative Figures shows an extended 
period of sustained success and congratulations are due 
in particular to those who have given lengthy service in 
establishing this strong performance but also to those who 
have brought their expertise to the Company more recently. 
It is these staff and colleagues who have made the dividend 
payments possible and I would like to see them rewarded 
accordingly. 

There are as ever economic uncertainties and we cannot 
influence the macro-economic situation, but Mountview has 
strong foundations. Borrowings have been further reduced 
and we continue to make good purchases. We research 
all opportunities thoroughly and I believe that we can 
contemplate the future with confidence. 

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D.M. Sinclair
Chief Executive Officer 
14 July 2016

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

4
Where we operate

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

3.7%
Derbyshire, 
Leicestershire,
Nottinghamshire

11.0%
Remainder of England and Wales

20.9%
Bedfordshire, Berkshire, Essex, 
Buckinghamshire, Cambridgeshire, 
Hertfordshire, Oxfordshire, Norfolk, 
Suffolk, Middlesex, Northamptonshire

24.3%
London (North)

25.8%

London (South)

14.3%

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

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.

£79.8m

REVENUE
(2015: £71.3m)

£53.0m

GROSS PROFIT
(2015: £46.7m)

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 2016

No. of units

Cost (£m)

Regulated, Assured Shorthold 
tenancies and other

Assured tenancies

Life tenancies

Ground rents

2,190

245

307

1,135

266.29

29.71

36.27

1.83

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

5

Analysis of the Group Trading portfolio at the lower of cost and estimated net realisable value by 
geographical location as at 31 March 2016

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

Life tenancies  
(£m)

Ground rents  
(£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

80.33

70.09

41.29

63.92

11.58

28.79

0.09

15.16

6.35

5.84

0.77

8.06

0.69

0.85

0.06

0.13

0.10

–

24.28

25.77

14.28

20.92

3.73

11.02

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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, 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 Mountview. 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:

We achieved sales of £61.4 million (2015: £53.4 million), 
demonstrating the liquidity of the Portfolio. The average 
sales price achieved was £294,000 (2015: £278,000). 

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.

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Sales Price (£)

No. of units

1 million +

500,000 – 1 million

below 500,000

Location

London

London and other

2

26

181

London and other

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

6
Review of Operations continued

ANALYSIS OF ACQUISITIONS

Regulated, ASTs, and other

Assured tenancies

Life tenancies

Ground rents

Ground rents created

Total

Not included in the above:

Assured tenancies created net

No. of units

49

7

10

2

22

90

8

Year ended  
31 March 
2016
Cost 
£m 

14.38

1.75

12.16

–

0.04

28.33

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

Included in the above table are the following: 
Portfolio of regulated tenancies

Tonbridge, Kent

24

4.8

No. of units

Cost £m 

Life tenancies acquired during the year

No. of units

Cost £m 

Penthouse Suite, London SW7

Freehold House, London SW3

1

1

6.5

4.5

The Groups 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 40.

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 £28.3 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 2016 
is as follows:

Louise Goodwin Limited

A.L.G. Properties Limited

2016

32 units

4 units

2015

33 units

4 units

All of the properties are situated in Belsize Park, London 
NW3, one of the capital’s most prestigious locations.

Louise Goodwin Limited and A.L.G. Properties Limited 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 
Leasehold unit for £1.7million in Louise Goodwin Limited 
(2015: disposed of one Ground Rent unit for £54,000 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 purchasers who actively seek new homes 
in this area.

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

7

The valuation of the investment portfolio increased 
during the year by £1.5 million. The properties 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 44 to 45.

REVIEW OF BUSINESS AND PRINCIPAL 
RISKS
Details of the Group’s performance during the year and 
expected future developments are contained in the Chief 
Executive’s Statement. The Group has established the 
following Financial Key Performance Indicators:

FINANCIAL KEY PERFORMANCE INDICATORS
PROFIT BEFORE TAX (£M)
REVENUE (£M)
+21%
+11.9%

71.3

79.8

40.0

48.4

2015

2016

2015

2016

INTEREST COVER IN 
RELATION TO PROFIT 
BEFORE INTEREST  
AND TAXATION

EARNINGS PER SHARE (P)
+21.7%

42

992.9

816.0

24

2015

2016

2015

2016

NET ASSET PER SHARE (£)
+8.3%

GEARING RATIO (%)

73.8

79.9

17.2

11.8

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 property market was buoyant throughout 2015/16 
peaking at the end of the tax year partially due to the 
changes to stamp duties on properties imposed by the 
Budget 2015.

However in the wake of the “Brexit” vote we are facing an 
uncertain time as to how the property market is going to 
adjust.

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:

2015

2016

2015

2016

There are no non-financial key performance indicators that 
management consider appropriate. 

D.M. Sinclair
Chief Executive Officer
14 July 2016

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

8
Directors and Advisers

D.M. SINCLAIR FCA (CEO)

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

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
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. 

A.J. SINCLAIR FCA

Joined the Company as a Non-Executive Director on 
1 November 2010. Fellow of the 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.

Resigned on 31 December 2015.

MRS. M.L. JARVIS MRICS*

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 advisers, 
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.

DR. A.R. WILLIAMS

Joined the Company as a Non-Executive Director on  
1 December 2015. He replaces Alistair Sinclair, who retired 
from the Board on 31 December 2015. Andrew is a qualified 
member of the medical profession, and a member of the 
Sinclair concert party. He will represent the interests of the 
family and private Shareholders generally.

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Directors’ Report

Mountview Estates P.L.C.
Annual Report and Accounts 2016

9

The Directors have pleasure in presenting to the Members their 79th Annual Report together with the Financial Statements 
for the year ended 31 March 2016.

1. RESULTS AND DIVIDENDS
The results for the year are set out in the Income Statement on page 30.

The Directors recommend the payment of a final dividend of 100 pence per share. The dividend will be paid on  
15 August 2016, subject to approval at the Annual General Meeting on 10 August 2016, to Shareholders on the register  
at the close of business on 15 July 2016. 

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, Mr. D.M. Sinclair retires from the Board by rotation and  
being eligible, offers himself for reappointment. A resolution for his reappointment will be proposed at the Annual  
General Meeting.

In accordance with the Company’s Articles of Association, Dr. A.R. Williams was appointed as a Director on 1 December 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 2016 was £250,000 divided into 5,000,000 Ordinary Shares  
of 5p of which 3,899,014 were in issue (2015: 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 2016

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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

Mr. A.C.J. Solway (appointed 11 June 2015)

Dr. A.R. Williams (appointed 1 December 2015)

Mr. A.J. Sinclair, (resigned 31 December 2015) including the following holding of  
Viewthorpe (Old) Limited – 28,208 and 8532630 Canada Inc. – 44,276, both companies being  
wholly-owned by Mr. A.J. Sinclair, and the holding of 8532729 Canada Inc. – 60,000, which company  
is wholly-owned by Mrs Mary Gillin Sinclair 

All the above interests are beneficial.

6. NOTIFIABLE INTERESTS IN SHARE CAPITAL 

31 March 
2016 

31 March 
2015 

538,383

 538,383

12,302 

500

52,915

 12,302 

–

–

132,484

132,484

As at 14 July 2016, 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*

Mr. Charles Pike and Mr. Xavier Nicholas, Trustees of the W.D.I. Sinclair Grandchildren Settlement*

Mr. Charles Pike and Mr. Xavier Nicholas, Trustees 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

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11

7. VIABILITY STATEMENT
The Directors have assessed the viability of the Company over the period to 31 March 2019.  

The Strategy of the business is conducted at Group level and is reviewed throughout the year at Board meetings in the light 
of market conditions and investment opportunities.  

Mountview’s strategy is based on a tight focus of our core business of regulated tenancies, together with a prudent 
approach to key financial ratios and funding requirements.  The Board has developed a matrix of risks which it now 
considers at each meeting. The matrix encompasses: 

•  Trading risks associated with the profitable acquisition and disposal of properties

•  Risks to rental income

•  Liquidity risk in the event of market disruption

•  Gearing and borrowing ratios in light of market conditions

•  HR risks associated with executives, managers and staff 

•  Risk associated with operations and property maintenance.

In making their assessment, the Directors assessed the potential impact of the principal risks in severe but plausible 
scenarios and assessed the most relevant potential impact of these risks and how to manage them.   

On the basis of this and other matters considered and reviewed by the Board during the year, the Board confirms that it has 
reasonable expectations that the Company will be able to continue in operation and meet its liabilities as they fall due over 
the period used for the assessments. The Directors consider the following factors to be key to this assessment:

•  The Company has strong reserves and low indebtedness, which would enable it to take profitable advantage of adverse 

market conditions

•  The Company’s properties are attractive to a broad constituency of buyers and can be marketed through several different 

channels, if needed

•  The Company’s rental income is sufficient to cover expenses in the event of market illiquidity

•  Contingency and succession planning to cover the unexpected absence of key members of staff has commenced.

Given Mountview’s strong financial position the Directors consider that it is well positioned to take advantage of both 
favourable and adverse market conditions. The Company also has adequate banking facilities in place over a spread of 
maturities which could be renegotiated, augmented or replaced if necessary within the required timescales.

8. 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 2016

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Directors’ Report continued

9. GREENHOUSE GAS EMISSIONS DISCLOSURE 
INTRODUCTION

In accordance with The Companies Act 2006, (Strategic and Directors’ Reports) Regulations 2013, Mountview Estates PLC 
(‘Mountview’) is required to report on greenhouse gas (GHG) emissions in tonnes of carbon dioxide equivalent (tCO2e) for 
which it is responsible. In this report, the term ‘carbon emissions’ not only includes carbon dioxide (CO2) but covers the 
‘Kyoto’ greenhouse gases: methane (CH4 ), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), nitrogen 
trifluoride (NF3 ) and sulphur hexafluoride (SF6 ).

Carbon Clear is a world-leading carbon management consultancy with a proven track record of helping organisations to 
measure, reduce and offset their carbon emissions. 

Mountview employed Carbon Clear to measure its carbon footprint with the following objectives: 

•  Define the footprint boundary and collect the required data

•  Calculate Mountview’s carbon footprint

•  Report the results.

The reporting period is 1 April 2015 – 31 March 2016.

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 has committed to report Scope 1, Scope 2 and limited Scope 3 emissions 
under Mandatory Greenhouse Gas Reporting legislation.

HEADLINE RESULTS

This report details Mountview’s GHG emissions for the period 1 April 2015 to 31 March 2016. 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 GHG emissions from Scopes 1 and 2. Relevant activity data were identified and collected and 
provided to the GHG independent consultant, Carbon Clear. The validity and completeness of the data were checked by 
Carbon Clear and used to calculate the GHG emissions for Mountview. The calculations performed follow the  
ISO-14064-1:2006 standard and give absolute and intensity factors for Mountview’s emissions. 

The results show that total gross GHG emissions in the period were 115 tonnes of CO2e, comprised of the following:

•  Direct Emissions (Scope 1) amounted to 37.3 tonnes of CO2e or 32.4% of the total

•  Indirect Emissions (Scope 2) amounted to 57.2 tonnes of CO2e or 49.7% of the total

•  Indirect Other Emissions (Scope 3) amounted to 20.6 tonnes of CO2e or 17.9% of the total.

The results are presented in the following Tables 1 and 2, and Figure 1.

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9. GREENHOUSE GAS EMISSIONS DISCLOSURE CONTINUED
TABLE 1: EMISSIONS DATA

Activity

Natural Gas 

Company owned vehicles

Subtotal

Electricity 

Subtotal

Additional Upstream Activities

Type of Emissions

Direct (Scope 1)

Indirect (Scope 2)

Indirect Other (Scope 3)

Total emissions (tCO2e)

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)

57

2014/15 
tCO2e 

2015/16 
tCO2e 

% Change

16.3

26.7

43.0

64.4

64.4

23.4

130.7

13.5

23.8

37.3

57.2

57.2

20.6

115

-17%

-11%

-13%

-11%

-11%

-12%

-12%

2014/15

2015/16

% Change

130.7

115.0

71,300,000

79,730,000

1.8

1.4

-12%

12%

-21%

24

21

13

Electricity

Company Owned
Vehicles

Well To Tank

Natural Gas

YEAR ON YEAR COMPARISON 

In order for the 2015/16 emissions to be directly comparable to the 2014/15 emissions, the 2014/15 reporting year has been 
re-baselined to encompass updated calculation methodologies and improved quality of data, leading to a more accurate final 
figure. A detailed year on year analysis reveals overall gross emissions have decreased by 12% from 2014/15 to 2015/16.

Scope 1 emissions have decreased by 13% compared to the previous reporting year. Natural gas consumption has seen 
a decrease of 17%, which can be attributed to a reduction in natural gas consumption at Mountview House. The 11% 
decrease in Company owned vehicles emissions is due to a reduction in the size of the Company fleet. 

Scope 2 emissions have decreased by 11% compared to the previous reporting year. Similarly to the natural gas, the 
reduction in electricity usage is primarily due to reduced consumption at Mountview House.

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Directors’ Report continued

9. GREENHOUSE GAS EMISSIONS DISCLOSURE CONTINUED
NOTES

•   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.

•   Mountview is responsible for electricity charges in the communal areas for 39 blocks of flats and the Company pays on 
average £30 electricity charge per flat. The approximate electricity consumption for communal areas is 8,726 kWh or  
4.0 tCO2e scope 2 emissions. 

•   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 have been used for the completion of this document:

•   “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)

•  “Quarterly Energy Prices’ March 2016”, Department for Energy and Climate Change (DECC)

10. EMPLOYEES
The Company provides regular training related to the use of computer software and for 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.

11. DIVERSITY
As at 31 March 2016, the Company had one female Executive Director, Mrs. Marie Bray, who has been on the Board since 
2004, and one female Non-Executive Director, Mrs. Mhairi Jarvis who has been on the Board since July 2014. Female Board 
membership represents 40% of the Board.

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.

12. 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.

13. 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.

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14. DIRECTORS’ AND OFFICERS’ LIABILITY INSURANCE
The Company purchases liability insurance covering the Directors and Officers of the Company and its Subsidiary 
undertakings and this has been in place throughout the financial year under review.

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.

15. 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 
39 and 40. Details regarding the Company’s use of financial instruments are set out in Note 20 to the Consolidated Financial 
Statements on pages 49 and 50.

16. REMUNERATION POLICY

The Company’s Shareholders will be asked to approve the Remuneration Report at the Annual General Meeting to be  
held on 10 August 2016 and accordingly, a resolution will be proposed at the Annual General Meeting.

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17. CORPORATE GOVERNANCE
The Directors’ statement on Corporate Governance is set out on pages 18 to 22. 

18. 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.

19. DONATIONS
During the year the Group made charitable donations of £52,782 (2015: £31,230).

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 (2015: £nil).

20. 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 Operations.

The Group is historically profitable, has considerable liquidity and regularly reviews its long-term borrowing facilities with its 
lenders. 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 19.

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Directors’ Report continued

21. POST BALANCE SHEET EVENTS
There are no material events that have occurred subsequent to the end of the financial year that require disclosure.

22. 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.

23. AUDITORS AND DISCLOSURE OF INFORMATION TO THE AUDITOR
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 Directors in order to make themselves aware of any 
relevant audit information and to establish that the Company’s Auditors are aware of that information.

24. RELATIONSHIP 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.

Under the terms of the relationship agreement, the Principal Concert Party Shareholder, Mr. D.M. Sinclair (a member of 
the Sinclair family concert party), has agreed to procure the compliance of other individual members of the Sinclair family 
concert party who are treated as controlling shareholders with independence obligations contained in the relationship 
agreement. The Sinclair family concert party, as controlling shareholders of the Company have a combined aggregate 
holding of approximately 53% of the Company’s voting rights.

The Board confirms that, since the entry into the relationship agreement until 14 July 2016, being the latest practicable date 
prior to the publication of this annual report and accounts:

•  the Company has complied with the independence provisions included in the relationship agreement;

•  so far as the Company is aware, the independence provisions included in the relationship agreement have been 

complied with by the Sinclair family concert party and their associates; and

•  so far as the Company is aware, the procurement obligation included in the relationship agreement has been complied 

with by the Principal Concert Party Shareholder.

25. DISCLOSURES REQUIRED UNDER LISTING RULE 9.8.4R
For the purpose of LR 9.8.4CR, the only information required to be disclosed:

Agreement with principal shareholders

Note 24 

All other sub-sections of LR9.8.4CR are not applicable.

By Order of the Board

M.M. Bray 
Company Secretary 
14 July 2016

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

17

The Directors are responsible for preparing the Annual Report, the Directors’ Remuneration Report and the financial 
statements in accordance with applicable law and regulations. 

The Directors are required by the Companies Act 2006 to prepare financial statements for each financial year that give a 
true and fair view of the state of affairs of the Group and the Company as at the end of the financial year, and of the profit or 
loss of the Group for the financial year. Under that law, the Directors are required to prepare the Group financial statements 
in accordance with International Financial Reporting Standards (‘IFRS’) as adopted by the European Union (‘EU’) and have 
elected to prepare the Parent Company financial statements in accordance with United Kingdom Generally Accepted 
Accounting Practice (UK Accounting Standards and applicable law). 

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 IFRS as adopted by the EU 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; 

•  present information, including accounting policies, in a manner that provides relevant, reliable, comparable and 

understandable information; 

•  provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users 
to understand the impact of particular transactions, other events and conditions on the entity’s financial position and 
financial performance; and 

•  prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the Group and 

the Company will continue in business. 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s 
transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company. 
This will 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 also have general 
responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and the Company, 
and to prevent and detect fraud and other irregularities. 

The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United 
Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other 
jurisdictions. 

The Directors consider that the Annual Report and Financial Statements, taken as a whole, is fair, balanced and 
understandable and provides the information necessary for Shareholders to assess the Group’s and the Company’s 
performance, business model and priorities. 

Each of the Directors, whose names and functions are set out on page 8, confirm that, to the best of their knowledge: 

•  the financial statements, which have been prepared in accordance with the relevant financial reporting framework, give a 
true and fair view of the assets, liabilities, financial position and profit or loss of the Group and the undertakings included 
in the consolidation taken as a whole; and 

•  the Strategic Report contained within this document includes a fair review of the development and performance of the 
business and the position of the Group and the undertakings included in the consolidation taken as a whole, together 
with a description of the principal risks and uncertainties that the Group faces.

By Order of the Board

M.M. Bray 
Company Secretary 
14 July 2016

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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 September 2014 
edition 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.  
The roles of D.M. Sinclair as CEO and A.C.J. Solway as Non-Executive Chairman are separate and distinct. 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. A.C.J. Solway and Mrs. M.L. Jarvis are 
deemed to be independent Non-Executive Directors. Dr. A.R. Williams is a Non-Executive Director but he is not considered 
to be independent for the purposes of the UK Corporate Governance Code. 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 2016, 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 adhoc 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. Company strategy is proposed by 
the Executive Directors and that strategy is rigorously discussed, debated and agreed by the Board. The Non-Executive 
Directors work with the Executive Directors to deliver on the agreed strategy. 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. A.C.J.
Solway1

Mr. D.M. 
Sinclair4

Mrs. M.M. 
Bray4

Mr. A.J. 
Sinclair2

Mrs. M.L. 
Jarvis

Dr. A.R. 
Williams3

3

2

3

1

4

2

2

2

4

2

2

2

3

2

1

2

4

3

3

1

1

1

1

–

1.  Mr. A.C.J. Solway was appointed to the Board on 11 June 2015. He was eligible to attend 3 Board Meetings and 6 Committee Meetings.
2.  Mr. A.J. Sinclair resigned from the Board on 31 December 2015. He was eligible to attend 3 Board Meetings and 5 Committee Meetings.
3.  Dr. A.R. Williams was appointed to the Board on 1 December 2015. He was eligible to attend 1 Board Meeting and 2 Committee Meetings.
4.  Mr. D.M. Sinclair and Mrs. M.M. Bray were invited to attend 2 Audit Committee Meetings and 2 Remuneration Committee Meetings.

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.

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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 as a Director, either to fill a vacancy or 

as an addition to the existing Board

•  The Board has the power to appoint any person who is willing to act as a Director, either to fill a vacancy or as an 

addition to the existing Board. Any Director appointed by the Board is required to retire at the first AGM of the Company 
following his or her appointment

•  The total number of Directors (other than any alternate Directors) must not be more than 12 or less than two

•  In addition to any power to remove a Director conferred by Section 168 of the Companies Act 2006, the Company may, 
by ordinary resolution, remove any Director before the expiration of his or her period of office, but without prejudice 
to any claim for damages which he or she may have for breach of any contract of service between him or her and the 
Company. The Company may then appoint another person, who is willing to act, as 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 the Company have adequate resources to continue in 
existence for at least the next 12 months from the date of signing the Financial Statements. 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 
the 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. A.C.J. Solway (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 was chaired by Mr. A.J. Sinclair, up until his retirement from the Board on 31 December 2015, 
following which Mr. A.C.J. Solway assumed the role as Chair of the Committee. The Committee monitors, reviews and 
makes recommendations to the Board on all elements of the remuneration of the Executive Directors. The Committee 
meets three times 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 and Mrs. M.M. Bray are invited by the Remuneration Committee members to attend a 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 23 to 29. 

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Corporate Governance continued

NOMINATION COMMITTEE
All the Directors of the Company are members of this Committee.

There were two meetings during this year and key matters considered were:

•  Appointment of a 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.

•  Appointment of a Non-Executive Director.

The Nomination Committee has recommended and obtained approval from the full Board for the nomination of  
Dr. A.R. Williams as a Non-Executive Director with effect from 1 December 2015. Dr. A.R. Williams is a member of the 
concert party and he represents the interests of the family and private Shareholders generally.

AUDIT COMMITTEE
The Audit Committee during the period comprised Mr. A.C.J. Solway (independent Non-Executive Director and Non-
Executive Chairman), Mrs. M.L. Jarvis (independent Non-Executive Director), Mr. A.J. Sinclair (Non-Executive Director) until 
he retired from the Board on 31 December 2015, and Dr. A.R. Williams (Non-Executive Director) who was appointed to the 
Committee on 1 December 2015. The Committee was chaired by Mrs. M.L. Jarvis.

ACTIVITIES OF THE COMMITTEE 

The Committee operates within the defined Terms of Reference which can be found on the Company’s website at  
www.mountviewplc.co.uk. During the year the Committee has undertaken each of its principal responsibilities, receiving 
relevant reports from external Auditors and management and challenging assumptions and judgements made. 

The Committee performs a detailed review of the tone and content of the annual and half year press releases and the 
Annual Report and Accounts. The Committee is satisfied that controls over accuracy and consistency of information 
presented in the Annual Report and Accounts are robust and has confirmed to the Board that it believes this Annual Report 
and Accounts is fair, balanced and understandable. 

EFFECTIVENESS OF THE EXTERNAL AUDIT PROCESS 

Following best practice and in accordance with its Terms of Reference, the Committee annually reviews the audit 
requirements of the Company. The Committee reviewed BSG Valentine’s proposals for the audit and is confident that 
appropriate plans were put in place to carry out an effective and high quality audit. BSG Valentine confirmed to the 
Committee that they maintained appropriate internal safeguards to ensure their independence and objectivity. Following 
our annual review of auditor quality and independence, we have determined that it is not necessary to tender the audit 
contract for the time being and recommend BSG Valentine’s reappointment to the Board, approval of which will be sought 
from Shareholders at the AGM. As part of its review the Committee notes that the Group Audit Partner was rotated in 2012 
and the current audit partner‘s five year term will end in 2017.

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KEY AREAS FORMALLY DISCUSSED AND REVIEWED

Principal responsibilities of the Audit Committee 

Key areas formally discussed and reviewed by the Audit  
Committee during the financial year ending 31 March 2016

Reporting and External Audit 

•  Monitoring the integrity of the Company’s financial statements 

•  Results, commentary and announcements 

and all formal announcements relating to the Company’s 
financial performance, reviewing financial reporting 
judgements contained within them

•  Making recommendations to the Board regarding the 

appointment of the external Auditors and approving the 
external Auditor’s remuneration, terms of engagement, 
monitoring independence, objectivity and effectiveness

•  Key accounting policy judgements, including variations 

•  Impact of future financial reporting standards

•  Going concern and financial viability

•  External Auditor effectiveness 

•  External Auditor management letter, containing observations 
arising from the annual audit leading to recommendations for 
financial reporting improvement

•  External Auditor’s remuneration and audit tender frequency.

Valuations 

•  Monitoring and reviewing the valuation process for the 

•  Annual report on the effectiveness of the valuer which 

Investment properties held 

considers the quality of the valuation process and judgement.

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•  Valuer competence and effectiveness  

Risk and internal control

•  Reviewing the principal risks and uncertainties as identified 
by the Audit Committee, including those that could affect 
solvency or liquidity 

•  Reviewing the risk management disclosures on our approach 

to risk in the Annual Report

Other 

•  Assessment of the risk register including identification of the 

Company’s principal risks.

•  Reviewing the Committee’s Terms of Reference and 

•  Review of whistle-blowing policy

monitoring its execution 

•  Considering compliance with legal requirements, accounting 

standards and the Listing Rules 

•  Reviewing the whistle-blowing policy and operation

•  Review of the Audit Committee’s Terms of Reference,

•  Implementation of FRS 102 Reduced Disclosure Framework

•  Review of the effectiveness of the Audit Committee.

The Committee gives careful consideration before appointing the Auditors to provide other non-audit services.

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 three times a year and one of these meetings is with the external Auditors without either of the 
Executive Directors in attendance. Mr. D.M. Sinclair and Mrs M.M. Bray were invited to attend two of the meetings held  
by the Audit Committee. The Chairman of the Audit Committee reports to the Board on matters discussed with the  
external Auditors. 

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. 

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Corporate Governance continued

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 AND INTERNAL FINANCIAL CONTROL
Details of the Company’s risk management profile are included in paragraph 15 in the Directors’ Report on page 15  
and in Note 3 to the Consolidated Financial Statements on pages 39 to 40.

An ongoing process for identifying, evaluating and managing the significant risks faced by the Group was in place 
throughout the period from 1 April 2015 to the date of approval of the Annual Report and Accounts. The effectiveness of 
this process is reviewed annually by the Board. 

The Directors are responsible for establishing and maintaining the Group’s system of internal financial control. Internal 
control systems in any group are designed to identify, evaluate and manage risks faced by that group and meet the 
particular needs of that group and the risks to which it is exposed. By their nature such 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 
14 July 2016

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Remuneration Report

Dear Shareholder, 

In my first year as Chairman of the Remuneration Committee, I am pleased to present the Directors’ Remuneration Report 
for the financial year ended 31 March 2016, which has been prepared by the Remuneration Committee and approved by 
the Board of Directors (the “Board”).

REMUNERATION POLICY 
The Remuneration Policy is designed to attract, motivate and retain the right talent for our business in order that it can 
continue to deliver excellent returns for Shareholders.

The Remuneration Committee believes that there should be a clearer link between financial results and the total 
remuneration of Executive Directors. Key metrics would be primarily Profit Before Tax. Financial results would also be 
reviewed alongside such comparative data on remuneration levels as we are able to obtain to ensure our executives are 
fairly paid for their performance.

Given the long term nature of the business, the Remuneration Committee also believes that it should retain the flexibility to 
reward excellent performance irrespective of market conditions in any given year and should retain the ability to change the 
basis of remuneration as circumstances dictate. 

The Remuneration Committee also considers non-financial corporate goals in respect of remuneration and we have started 
to focus on a number of key areas, such as succession planning and management development, governance and risk 
management, in determination of remuneration.

We continue to review market comparators in respect of our remuneration policy to ensure it is appropriate. Given 
Mountview’s unique business profile such comparators are difficult to find and apply – and data on the remuneration of 
peer group jobs is very limited. We have, therefore, looked at the broader comparator group of FTSE 350 companies. We 
intend to do more work in the coming year to refine and improve our understanding of comparative remuneration.

We have made some changes to the characterisation of certain emoluments and, at the request of the Executive Directors, 
the Remuneration Committee has agreed to consolidate pension contributions into salary. The Committee has done so 
on the basis of industry norms of pension contributions of 15% of salary. Both the CEO and CFO have been asked to sign 
waivers to any future contributions by the Company. There will be a small additional cost to the Company in respect of 
these additional amounts now payable as salary. 

The Remuneration Committee also considered the recent changes to the Corporate Governance Code as regards malus 
or clawback provisions in respect of Executive bonuses. Our conclusion was that these were not appropriate given the 
experience and long service of the Executive Directors to whom these provisions could be applied.

The Remuneration Committee also discussed the introduction of long term share incentives to better motivate Executives 
and to align their interests with those of Shareholders. We agreed that this was not required in the case of the Executive 
Directors, who both have valuable holdings of the Company’s shares. 

As Mountview’s Executive Directors are rewarded by salary and bonus only, Shareholders should expect higher levels of 
bonus as a percentage of base salary than might be generally accepted to be the norm in other companies where there are 
long term share incentive schemes.

DIRECTORS CONTRACTS 
Some comments have been made about the Executive Directors having 12 month notice periods. Mountview is a small 
company by number of staff employed and the Company’s performance is necessarily driven by our CEO and CFO in 
particular. In this context, the Remuneration Committee considers these contracts to be appropriate.

SHAREHOLDER AGM 
In conclusion, I am grateful for the contributions of my colleagues on the Remuneration Committee and for the input of 
Shareholders on this topic. Our aim is to ensure both remuneration policy and remuneration itself are considered, fair 
to both Executives and Shareholders, and aligned with Shareholders’ interests. The Remuneration Committee seriously 
considers all Shareholder feedback received at and outside the Annual General Meeting.

A.C.J. Solway
Chairman of the Remuneration Committee

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Remuneration Report continued

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 three 
Non-Executive Directors of whom two are independent Non-Executive Directors: Mr. A.C.J. Solway and Mrs. M.L. Jarvis. Mr. 
A.J. Sinclair was the Chairman of the Remuneration Committee up until his retirement from the Board on 31 December 2015, 
following which Mr. A.C.J. Solway chairs the Committee. Dr. A.R. Williams (Non-Executive Director) was appointed to the 
Committee on 1 December 2015. The Board as a whole considers the remuneration of the Non-Executive Directors.  

External advisers were not used in the financial year under review.

REMUNERATION POLICY

The tables below summarise the main elements of the remuneration packages for the Executive Directors.

Purpose and link to strategy

Operation

Opportunity

Performance metrics

Changes in year

Base salary

To provide a competitive level of non-variable remuneration aligned to market practice for similar 
sized organisations; to reflect the seniority of the post and expected contribution to the delivery  
of the Company’s strategy.

Basic salaries are reviewed by the Remuneration Committee annually with uplifts effective from 
1 April being by reference to cost of living, responsibilities and market rates, as for all employees.

N/A

N/A

See page 26 “Directors Total Remuneration Table”

Benefits

Purpose and link to strategy

To aid recruitment and retention of high-quality Executives.

Operation

Opportunity

Performance metrics

Changes in year

Private medical insurance
Life assurance

N/A

N/A

None

Pension

Purpose and link to strategy

To aid recruitment and retention of high-quality Executives.

Operation

Opportunity

Performance metrics

Changes in year

The Company has contributed into a personal pension arrangement for all of the Executive Directors.

N/A

N/A

As from 1 April 2016 the Executive Directors will cease to receive pension contribution from  
the Company.

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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 into account the Group’s 
performance by way of comparison with other property and similar-sized companies.

NON-EXECUTIVE DIRECTORS

The Non-Executive Directors receive fees of £36,000 p.a. The Non-Executive Chairman’s fees increased from £60,000 p.a.  
to £72,000 p.a. from October 2015.

The Non-Executive Directors are not entitled to bonuses, benefits or pension contributions. 

PENSIONS

The Company contributed during the financial year 10% of the total of the Executive Directors’ gross annual salaries and 
bonuses to a Stakeholder Pension Scheme. As from 1 April 2016 the Executive Directors will cease to receive pension 
contributions from 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.

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Remuneration Report continued

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

1 April 2004

A.C.J Solway

11 June 2015

J.B. Fulton 

A.J. Sinclair

M.L. Jarvis

1 July 2014

Dr. A.R. Williams 

1 December 2015

No fixed term

No fixed term

23 months

Resigned on 30 June 2015

Resigned on 31 December 2015

12 months 

29 months 

12 months

12 months

none

none

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 only entitled to accrued fees 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 relevant factors. In the light of these the Remuneration 
Committee determines an appropriate amount.

IMPLEMENTATION REPORT

AUDITED INFORMATION
DIRECTORS’ TOTAL REMUNERATION SINGLE FIGURE TABLE

2016

Executive

D.M. Sinclair

Mrs. M.M. Bray

Non-Executive

A.C.J. Solway (appointed on 11 June 2015)

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

A.J. Sinclair (resigned on 31 December 2015 )

M.L. Jarvis 

Dr. A.R. Williams (appointed on 1 December 2015)

* includes contribution in respect of 1 month’s salary as a bonus.

Salary 
£000

Bonus
 £000

Benefits in 
kind 
£000

Pensions 
contributions  
£000

Total
  £000 

378

285

54

15

27

36

12

500

345

–

–

–

–

–

24

–

–

–

–

–

–

41*

31*

–

–

–

–

–

943

661

54

15

27

36

12

807

845

24

72

1,748

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Salary 
£000

Bonus 
£000

Benefits in 
kind 
£000

Pensions 
contributions 
£000

Total 
£000

360

265

60

36

27

748

300

210

–

–

–

510

19

–

–

–

–

19

99

71

 –

–

–

778

546

60

36

27

170

1,447

CEO single figure of 
total remuneration
£’000

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778

659

662

520

21%

20%

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 

UNAUDITED INFORMATION
CEO SINGLE FIGURE

2016

2015

2014

2013

2012

D.M. Sinclair

D.M. Sinclair

D.M. Sinclair

D.M. Sinclair

D.M. Sinclair

PERCENTAGE CHANGE IN REMUNERATION OF CEO AND EMPLOYEES 

The percentage change in remuneration between 2016 and 2015 for the CEO and for all employees in the Group was:

CEO

Employee population

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Remuneration Report continued

PERFORMANCE GRAPH
The graph 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
2011

2012

2013

2014

2015

2016

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 2015 and 2016 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 (£)
+6.9m

DIVIDEND (£)
+0.9m

TOTAL EMPLOYEE PAY (£)
+0.6m

38.71

31.82

2015

2016

10.72

11.69

2015

2016

3.02

2015

3.63

2016

STATEMENT OF IMPLEMENTATION OF REMUNERATION POLICY  
IN THE CURRENT FINANCIAL YEAR
With effect from 1 April 2016 the basic salary of CEO will be increased to £500,000 and the Finance Director to £375,000. 
Pension benefits for both Executive Directors will be terminated with effect from 1 April 2016.

DETAILS OF THE REMUNERATION COMMITTEE
The Remuneration Committee during the period comprised two independent Non-Executive Directors and one  
Non-Executive Director.

Details of the Directors who were members of the Committee during the year are disclosed on page 19.

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29

STATEMENT OF VOTING AT GENERAL MEETING

At the AGM held on 19 August 2015 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

2,047,525

82,154

2,129,679

1,460

2,131,139

96.14

3.86

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

Mr. A. C. J Solway (appointed 11 June 2015)

Dr. A.R. Williams (appointed 1 December 2015)

Mr .A.J. Sinclair, (resigned 31 December 2015) including the following holding of  
Viewthorpe (Old) Limited – 28,208 and 8532630 Canada Inc. – 44,276, both companies being 
wholly-owned by Mr. A.J. Sinclair, and the holding of 8532729 Canada Inc. – 60,000, which 
company is wholly-owned by Mrs. Mary Gillin Sinclair

All the above interests are beneficial.

31 March 
2016

31 March 
2015

538,383

12,302

500

52,916

538,383

12,302

–

–

132,484

132,484

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

30
Consolidated Statement  
of Comprehensive Income

for the year ended 31 March 2016

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 
2016 
£000

Year ended 
31 March 
2015 
£000

Notes

4

4

13

13

8

19

9

11

79,765

(26,751)

53,014

(5,148)

197

48,063

1,504

49,567

(1,179)

48,388

(9,593)

(83)

(9,676)

38,712

992.9p

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

The notes on pages 34 to 52 are an integral part of these consolidated financial statements.

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Consolidated Statement  
of Financial Position

for the year ended 31 March 2016

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 reserve

Capital redemption 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

Mountview Estates P.L.C.
Annual Report and Accounts 2016

31

As at
31 March 
2016 
£000

As at
31 March 
2015 
£000

Notes

12

13

15

16

21

22

22

22

23

18

19

18

17

1,911

29,448

31,359

2,008

29,399

31,407

334,108

323,020

1,720

1,706

337,534

368,893

1,948

1,625

326,593

358,000

195

25

55

56

195

25

55

56

311,421

311,752

287,330

287,661

39,700

5,342

45,042

3,625

3,000

5,474

12,099

57,141

368,893

60,200

5,259

65,459

963

2,343

1,574

4,880

70,339

358,000

Approved by the Board on 14 July 2016.

D.M. Sinclair 
Chief Executive  Director

M.M. Bray 

The notes on pages 34 to 52 are an integral part of these consolidated financial statements.

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Annual Report and Accounts 2016

32
Consolidated Statement  
of Changes in Equity

for the year ended 31 March 2016

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

Changes in equity for year ended 
31 March 2016

Balance as at 1 April 2015

Profit for the year

Dividends

Balance at 31 March 2016

Share 
capital 
£000

Capital 
reserve 
£000

Capital 
redemption 
reserve 
£000

Notes

Other 
reserves 
£000

Retained 
earnings 
£000

Total 
£000

195

195

195

195

10

23 

10

23 

25

25

25

25

55

55

55

55

56

265,260

265,591

31,817

(9,747)

31,817

(9,747)

56

287,330

287,661

56

287,330

287,661

38,712

38,712

(14,621)

(14,621)

56

311,421

311,752

The notes on pages 34 to 52 are an integral part of these consolidated financial statements.

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Consolidated Cash Flow  
Statement

for the year ended 31 March 2016

Cash flows from operating activities

Profit from operations

Adjustment for:

Depreciation

(Gain) on disposal of investment properties 

(Increase) in fair value of investment properties

Operating cash flows before movement in working capital

(Increase) in inventories

Decrease/(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

Repayment of borrowings

Equity dividend paid

Net cash (outflow) from financing activities 

Net (decrease)/increase in cash and cash equivalents 

Opening cash and cash equivalents

Cash and cash equivalents at end of year

Mountview Estates P.L.C.
Annual Report and Accounts 2016

33

Year ended 
31 March 
2016 
£000

Year ended 
31 March 
2015 
£000

Notes

49,567

41,712

113

(197)

(1,504)

47,979

(11,088)

228

657

37,776

(1,179)

(5,693)

30,904

1,700

(48)

(16)

–

1,636

(20,725)

(14,621)

(35,346)

(2,806)

887

13

13

12 

18

(1,919)

140

–

(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

The notes on pages 34 to 52 are an integral part of these consolidated financial statements.

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

34
Notes to the Consolidated  
Financial Statements

for the year ended 31 March 2016

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 14 July 2016.

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. The accounts 
will be prepared in accordance with FRS 102 for the first time. These are presented on pages 56 to 66.

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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35

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
Fixtures and fittings and office equipment
Computer equipment

– 2%
– 20%
– 25%

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36
Notes to the Consolidated  
Financial Statements continued

for the year ended 31 March 2016

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 the 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 the 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. The analysis of the Group revenue as at 31 March 2016 is on 
page 40.

(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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37

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) LEASING

Rentals payable under operating leases are charged to profit and loss on a straight-line basis over the term of the relevant 
lease.

(Q) DERIVATIVES

The Group has not hedge accounted during the year.

(R) ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS  
AND INTERPRETATIONS

There are no new standards, amendments or interpretations that are effective for the first time for the current financial year 
that have a material impact on the Group.

The Group is assessing the impact of the following revised standards and interpretations that are not yet effective. Where 
already endorsed by the EU, these changes will be adopted on the effective dates noted. Where not yet endorsed by the 
EU the adoption date is less certain.

•  Annual Improvements to IFRSs 2012 – 2014, effective 2017 financial year;

•  IFRS 9 Financial Instruments: Classification and Measurement, effective 2019 financial year (not yet endorsed by the EU);

•  IFRS 15 Revenue from Contracts with Customers, effective 2018 financial year (not yet endorsed by the EU).

(S) 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 £20 million (2015: £30 million) revolving loan facility with HSBC Bank. The termination date is November 2019.

The Group has a £60 million (2015: £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.

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38
Notes to the Consolidated  
Financial Statements continued

for the year ended 31 March 2016

2. ACCOUNTING POLICIES CONTINUED
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 – Professional 
Standards – Global and UK Edition, 2014 as amended.

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.

Inventory expected to be settled in more than 12 months

The Board estimates that inventory of £20.5 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, both 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.

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39

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 Consolidated Gross Borrowings to Consolidated Net Tangible Assets ratio and 
interest cover ratio. These covenants were complied with during the financial year.

(B) CREDIT RISK

Exposure to credit risk and interest risk arises in the normal course of the Group’s business.

The Group has no significant concentration of credit risk. Credit risk arises from cash and cash equivalents as well as 
credit exposures with respect to rental customers, including outstanding receivables. The Directors are of the opinion that 
credit risk is minimal due to the low level of trade receivables relative to the Balance Sheet totals. Regulated tenants are 
incentivised through the benefit of their tenancy agreement to avoid default on their rent.

Lifetime tenancies are generally at low or zero rent and hence suffer minimal credit risk.

(C) LIQUIDITY RISK

The Group’s liquidity position is monitored daily by management and is reviewed quarterly by the Board of Directors.  
The Group ensures that it maintains sufficient cash for operational requirements at all times. The nature of its business is 
very cash generative from its gross rents and sales of trading properties.

In adverse trading conditions, new acquisitions can be minimised, and as a consequence will reduce the gearing level and 
improve the liquidity. A summary table with the majority of financial liabilities is presented in Note 18.

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Annual Report and Accounts 2016

40
Notes to the Consolidated  
Financial Statements continued

for the year ended 31 March 2016

3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES CONTINUED

(D) CAPITAL RISK MANAGEMENT 

The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern. The Group 
monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total debt and equity.

Total borrowings

Less cash

Net borrowings

Total equity

Total borrowings plus equity

Gearing ratio

2016 
£000

43,325

(1,706)

41,619

311,752

353,371

11.8%

2015 
£000

61,163

(1,625)

59,538

287,661

347,199

17.15%

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

2016 
£000

2015 
£000

61,442

18,323

79,765

21,033

5,718

26,751

40,409

12,605

53,014

53,382

17,949

71,331

18,696

5,925

24,621

34,686

12,024

46,710

Subsequent sale of properties included in the Market Valuation undertaken by Allsop LLP as at 30 September 2014.

The properties sold during the financial year 2015/2016 were valued at £42.6 million.

The Market Values were on the basis that properties would be sold subject to any then existing leases and tenancies.

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41

5. SEGMENTAL INFORMATION
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks 
and returns that are different from those of other business segments. The Group monitors its operations in the following 
segments:

Revenue

Operating profit before changes in fair 
value of investment properties

Finance costs

Profit after tax

Assets

Liabilities

Fixed assets

  Capital expenditure

  Depreciation

Property 
trading 
£000

79,256

47,597

(1,179)

2016

Property 
investment 
£000

509

466

–

2015

Group 
£000

Property 
trading 
£000

Property 
investment 
£000

79,765

70,801

48,063

(1,179)

38,712

41,382

(1,736)

339,254

51,750

29,639

368,893

5,391

57,141

322,405

70,270

–

90

64

23

64

113

33

95

Group 
£000

71,331

41,655

(1,736)

31,817

358,000

70,339

33

140

530

273

–

35,595

69

–

45

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)

2016 
£000

2015 
£000

113

–

40

12

9

39

140

–

40

12

9

48

12,605

36

12,024

42

The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on page 26.

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

2016 

26

2015 

26

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

I

F
N
A
N
C
A
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I

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T
A
T
E
M
E
N
T
S

O
T
H
E
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I

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42
Notes to the Consolidated  
Financial Statements continued

for the year ended 31 March 2016

7. STAFF COSTS (INCLUDING DIRECTORS)

Wages and salaries

Social security costs

Pension costs

Directors’ remuneration

2016 
£000

3,070

377

184

3,631

2015 
£000

2,512

300

208

3,020

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

1,748

1,447

The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on pages 23 to 29. 

The Company contributes 3% of the total annual gross salaries and bonuses of each employee to a Stakeholder Pension 
Scheme.

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 20% (2015: 21%)

Deferred tax: Current year 20% (2015: 21%)

Taxation attributable to the Company and its subsidiaries

(b) Factors affecting income tax expense

The charge for the year can be reconciled to the profit per the income statement as follows:

Profit on ordinary activities before taxation

Profit on ordinary activities multiplied by rate of tax 20% (2015: 21%)

Expenses not deductible for tax

Depreciation in excess of capital allowances

Taxation on capital gains

Profit on sale of assets

Fair value adjustments

Deferred tax

Sundry adjusting items

2016 
£000

1,179

2016 
£000

9,593

83

9,676

2015 
£000

1,736

2015 
£000

8,422

(263)

8,159

48,388

9,678

39,976

8,394

21

15

226

(39)

(301)

83

(7)

16

17

10

–

(12)

(263)

(3)

Taxation attributable to the Company and its subsidiaries

9,676

8,159

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

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43

10. DIVIDENDS
On 24 August 2015, a dividend of 175p per share (2014: 150p per share) was paid to the Shareholders. On 29 March 2016  
a dividend of 200p per share (2015: 100p per share) was paid to the Shareholders. This resulted in total dividends paid in  
the year of £14.6 million (2015: £9.74 million).

In respect of the current year, the Directors propose that a final dividend of 100p per share will be paid to the Shareholders 
on 15 August 2016. 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 2016 is payable to all Shareholders on the Register of Members on 15 July 2016. The total 
estimated final dividend to be paid is £3.89 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)

38,712

31,817

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

3,899,014

3,899,014

Basic and diluted earnings per share

992.9p

816.0p

2016 
£000

2015 
£000

The Company has no dilutive potential Ordinary Shares.

12. PROPERTY, PLANT AND EQUIPMENT

Cost

At 1 April 2015

Additions

Disposals

At 31 March 2016

Depreciation

At 1 April 2015

Charge for the year

On disposals

At 31 March 2016

Net book value

At 31 March 2015

At 31 March 2016

Property, plant and equipment are located within the UK. 

Freehold 
property 
£000

Fixtures 
and fittings 
£000

Computer 
equipment 
£000

2,671

–

–

2,671

754

53

–

807

1,917

1,864

289

16

(190)

115

213

55

(190)

78

76

37

20

–

–

20

5

5

–

10

15

10

Total 
£000

2,980

16

(190)

2,806

972

113

(190)

895

2,008

1,911

I

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A
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G
C
R
E
P
O
R
T

G
O
V
E
R
N
A
N
C
E

I

F
N
A
N
C
A
L

I

S
T
A
T
E
M
E
N
T
S

O
T
H
E
R

I

N
F
O
R
M
A
T
O
N

I

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44
Notes to the Consolidated  
Financial Statements continued

for the year ended 31 March 2016

12. PROPERTY, PLANT AND EQUIPMENT CONTINUED

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. 

13. INVESTMENT PROPERTIES

Fair value at 1 April 2015/(2014)

Subsequent expenditure

Disposals

Increase in fair value during the year

At 31 March 2016/(2015)

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

2016 
£000

2015 
£000

29,399

29,396

48

(1,503)

1,504

29,448

–

(54)

57

29,399

The sales of investments properties are not included in the Group Revenue.

During the financial year we disposed of one unit for £1.7 million. The difference between the sales price of £1.7 million and  
the market fair value of £1.503 million resulted in a gain of £197,000 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 properties were valued on 31 March 2016 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 as amended. 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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45

13. INVESTMENT PROPERTIES CONTINUED
In relation to Allsop LLP’s preceding financial year, the proportion of the total fees payable by Mountview Estates P.L.C.  
to the total fee income of Allsop LLP was less than 5% which is regarded by the RICS as negligible.

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

LOUISE GOODWIN LIMITED

•  Freehold: £26,093,000 (Twenty-six million, and ninety three thousand pounds).

A.L.G. PROPERTIES LIMITED

•  Freehold: £3,355,000 (Three million, three hundred and fifty five 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(s) “Critical accounting judgements and key areas of estimation uncertainty”.

A revaluation surplus of £1.504 million has arisen on valuation of investment properties to Market Value as at 31 March 2016  
(2015: surplus of £57,000) and this has been taken to the Income Statement.

The Directors are of the opinion that the Fair Value equates to the Market Value.

14. INVESTMENTS
FIXED ASSET INVESTMENTS

These represent the cost of shares in the following wholly-owned subsidiary undertakings, which are incorporated and 
operate in England and Wales. Their results are consolidated in the accounts of the Group, for the period during which they 
are subsidiary undertakings.

Principal activity

Hurstway Investment Company Limited

Property trading

Louise Goodwin Limited

A.L.G. Properties Limited

Property investment

Property investment

Cost 
2015 
2016
£000

1

15,351

2,924

18,276

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

I

F
N
A
N
C
A
L

I

S
T
A
T
E
M
E
N
T
S

O
T
H
E
R

I

N
F
O
R
M
A
T
O
N

I

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46
Notes to the Consolidated  
Financial Statements continued

for the year ended 31 March 2016

15. INVENTORIES

Residential properties

2016 
£000

2015 
£000

334,108

323,020

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 at £665,866,266 (six hundred and sixty five million, eight hundred and sixty six thousand, two 
hundred and sixty six pounds) by an External Valuer, Martin Angel FRICS of Allsop LLP. The valuation showed a spectacular 
increase in the value of our trading stock, but to a large degree this was because we held the stock over an extended 
period of years. The individual values are not finely accurate, even though we have no reason to doubt the overall total of 
the valuation. Thus the valuation is not a useful tool for running the business because we are always going to await vacant 
possession, and no perceived uplift in value can justify selling a tenanted property. The nature of our business and the rules 
and conventions under which we operate place no obligation upon us to value our trading stock at any given time. Our 
conservative gearing lets us take the long-term view and any valuation within less than five years would serve little purpose, 
and would be a disproportionate expense. See Note 4.

16. TRADE AND OTHER RECEIVABLES

Trade receivables

Prepayments and accrued income

2016 
£000

258

1,462

1,720

2015 
£000

214

1,734

1,948

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

2016 
£000

1,072

377

1,551

3,000

2015 
£000

1,114

185

1,044

2,343

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

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47

2016 
£000

3,625

39,700

–

43,325

2016 
£000

(3,625)

1,706

(1,919)

2016 
£000

3,625

39,700

43,325

(3,625)

39,700

2015 
£000

738

60,200

 225 

61,163

2015 
£000

(738)

1,625

887

2015 
£000

963

60,200

61,163

(963)

60,200

18. BANK OVERDRAFTS AND LOANS

Bank overdrafts

Bank loans

Other loans

CASH AND CASH EQUIVALENTS

Bank overdrafts

Cash

Cash and cash equivalents as at 31 March

Maturity profile of financial liabilities at 31 March 2016 was as follows:

Amounts repayable:

In one year or less

Between one and five years

Less: amount due for settlement within 12 months (shown under current liabilities)

Amount due for settlement after 12 months

I

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A
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G
C
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E
P
O
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T

G
O
V
E
R
N
A
N
C
E

I

F
N
A
N
C
A
L

I

S
T
A
T
E
M
E
N
T
S

O
T
H
E
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I

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48
Notes to the Consolidated  
Financial Statements continued

for the year ended 31 March 2016

18. BANK OVERDRAFTS AND LOANS CONTINUED
The average interest rates paid were as follows:

Bank overdrafts

Bank loans

Other loans

2016 
£000

2.10%

2.53%

1.0%

2015 
£000

2.26%

2.81%

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 £10 million (2015: £15 million) with Barclays Bank. This is due for review 

in November 2016 and the rate of interest payable is:

•  1.6% over base rate on overdraft

•  Headroom of this facility at 31 March 2016 amounted to £6.4 million (2015: £14.3 million).

2.  The Group has a £60 million (2015: £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 2016 amounted to £36.5 million (2015: £44 million).

3.  The Group has a £20 million (2015: £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 2016 
amounted to £3.8 million (2015: £800,000).

4.  Other loans which were repaid during the year consisted of loans from connected persons, and companies of which 

Mr. D.M. Sinclair is a Director. There were no outstanding loans as at 31 March 2016 (2015: £50,000). Interest payable on 
these loans was at 0.5% above Barclays Bank Plc base rate. 

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19. DEFERRED TAX
ANALYSIS FOR FINANCIAL REPORTING PURPOSES

Deferred tax liabilities

Net position at 31 March

The movement for the year in the Group’s net deferred tax position was as follows:

At 1 April

Debit/(Credit) to income for the year

At 31 March

2016 
£000

5,342

5,342

2016 
£000

5,259

83

5,342

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

REVALUATION OF PROPERTIES

At 1 April

Debit/(Credit) to income for the year

At 31 March

20. FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL ASSETS

2016 
£000

5,259

83

5,342

2015 
£000

5,259

5,259

2015 
£000

5,522

(263)

5,259

2015 
£000

5,522

(263)

5,259

The Group’s financial assets at the year end consist of trade receivables and cash at bank and in hand of £1.706 million 
(2015: £1.625 million).

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

The trade receivables amounted to £1.720 million (2015: £1.948 million).

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

FAIR VALUE OF BORROWINGS

Bank overdrafts

Secured bank loans

2016 
£000

3,625

39,700

43,325

2015 
£000

963

60,200

61,163

Interest charged in the Income Statement for the above borrowings amounted to £1.17 million (2015: £1.73 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 2016 it is estimated that a general increase of 1 point in interest rates would decrease the Group’s profit 
before tax by approximately £433,250 (2015: £611,000).

I

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

I

F
N
A
N
C
A
L

I

S
T
A
T
E
M
E
N
T
S

O
T
H
E
R

I

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A
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Notes to the Consolidated  
Financial Statements continued

for the year ended 31 March 2016

20. FINANCIAL INSTRUMENTS CONTINUED
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 2016

Interest bearing loans and borrowings

Trade and other payables

At 31 March 2015

Interest bearing loans and borrowings

Trade and other payables

RECONCILIATION OF MATURITY ANALYSIS

At 31 March 2016

Interest bearing loans and borrowings per accounts

Interest

Financial liability cash flows as above 

At 31 March 2015

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

Over 
5 years 
£000

3,625

3,000

39,700

–

Less than 
1 year 
£000

Between 
1 and 5 years 
£000

963

2,343

60,200

–

–

–

Over 
5 years 
£000

–

– 

Less than 
1 year 
£000

Between 
1 and 5 years 
£000

Over 
5 years 
£000

3,625

76

3,701

39,700

3,113

42,813

–

–

–

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

–

–

–

Total 
£000

43,325

3,000

Total 
£000

61,163

2,343

Total 
£000

43,325

3,189

46,514

Total 
£000

61,163

8,158

69,321

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51

2016 
£000

2015 
£000

250

195

2016 
£000

25

55

56

136

250

195

2015 
£000

25

55

56

136

I

S
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A
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E
G
C
R
E
P
O
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T

G
O
V
E
R
N
A
N
C
E

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 reserve

Capital redemption 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 2016 stood at £56,000  
(2015: £56,000).

23. RETAINED EARNINGS

Balance at 1 April 2015

Net profit for the year

Dividends paid

Balance at 31 March 2016

£000

287,330

38,712

(14,621)

311,421

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

52
Notes to the Consolidated  
Financial Statements continued

for the year ended 31 March 2016

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 £36,493 (2015: £41,961) were 
charged for these services.

(b) Included within other loans repayable in less than one year and on demand was a loan from Sinclair Estates Limited.  
The balance outstanding at the balance sheet date was £nil (2015: £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 £422 (2015: £3,511).

(c) Included within other loans repayable in less than one year and on demand was a loan from Ossian Investors Limited. 
The balance outstanding at the balance sheet date was £nil (2015: £50,000). 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 £331 (2015: £370).

(d) Included within other loans, repayable in less than one year and on demand was a loan from Mrs. D. Sinclair, a 

shareholder of the Company. The balance outstanding at the Balance Sheet date was £nil (2015: £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 £877 (2015: £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

2016 
£000

2015 
£000

31

20

51

51

38

89

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

53

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 2016, 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 Note 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 17, 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 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 2016 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 2016

54
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 £3.3 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 as 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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Mountview Estates P.L.C.
Annual Report and Accounts 2016

55

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 pages 11 and 15 in relation to going concern and longer term viability;

•  the part of the Corporate Governance Statement relating to the Company’s compliance with the eleven 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 2016.

Athanasios Athanasiou (Senior Statutory Auditor)  
for and on behalf of BSG Valentine 
Chartered Accountants and Statutory Auditors 
London, United Kingdom 
14 July 2016

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

56
Company Balance Sheet  
under UK GAAP

for the year ended 31 March 2016

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 14 July 2016.

D.M. Sinclair 
Chief Executive  Director

M.M. Bray 

31 March 
2016 
£000

31 March 
2015 
£000

Notes

4

5

6

7

8

9

12

13

13

13

14

1,875

18,276

20,151

1,965

18,276

20,241

305,158

307,089

5,889

1,619

312,666

(18,966)

293,700

313,851

(39,700)

274,151

195

55

25

39

1,748

1,504

310,341

(14,330)

296,011

316,252

(60,200)

256,052

195

55

25

39

273,837

274,151

255,738

256,052

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Company Cash Flow  
under UK GAAP

for the year ended 31 March 2016

Cash Flows from Operating Activities 

Profit from operations

Adjustments for:

Depreciation

Interest payable and similar charges

Tax on profit on ordinary activities 

Accrued expenses/(income)

Changes in:

Stocks

Trade and other debtors

Trade and other creditors

Cash generated from operations

Interest paid

Tax paid

Net cash from operating activities

Cash Flows from Investing Activities

Purchase of tangible assets

Net cash used in investing activities

Cash Flows from Financing Activities

Proceeds from borrowings

Proceeds from loans from Group undertakings

Dividends paid

Net cash used in financing activities

Net (decrease)/increase in cash and cash equivalents

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of year

Mountview Estates P.L.C.
Annual Report and Accounts 2016

57

Year ended
31 March 
2016 
£000

Year ended 
31 March 
2015 
£000

32,720

29,679

90

1,179

8,207

254

1,931

(4,142)

427

40,666

 (1,179)

(4,767)

34,720

–

–

95

1,736

7,917

(151)

(784)

(234)

(3,660)

34,598

(1,736) 

(6,583)

26,279

(24)

(24)

(20,725)

(10,181)

(2,146)

(14,621)

(37,492)

(2,772)

766

(2,006)

636

(9,747)

(19,292)

6,963

(6,197)

766

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Annual Report and Accounts 2016

58
Notes to the Financial Statements 
under UK GAAP

for the year ended 31 March 2016

1. STATEMENT OF COMPLIANCE
These financial statements have been prepared in compliance with FRS 102, ‘The Financial Reporting Standard applicable 
in the UK and the Republic of Ireland’.

2. ACCOUNTING POLICIES
BASIS OF PREPARATION

The financial statements have been prepared on the historical cost basis.

The financial statements are prepared in sterling, which is the functional currency of the entity.

TRANSITION TO FRS 102

FRS 102 is being applied for the first time. Therefore, the entity transitioned from previous UK GAAP to FRS 102 as at  
1 April 2014. Details of how FRS 102 has affected the reported financial position and financial performance is given  
in note 18.

REVENUE RECOGNITION

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.

INCOME TAX

The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period.  
Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income  
or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively.

Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts  
of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the 
reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 
deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of 
deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been 
enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

OPERATING LEASES

Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease 
incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.

TANGIBLE ASSETS

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and 
impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation 
less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

An increase in the carrying amount of an asset as a result of a revaluation is recognised in other comprehensive income and 
accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in 
profit or loss. A decrease in the carrying amount of an asset as a result of revaluation is recognised in other comprehensive 
income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. 
Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset,  
the excess shall be recognised in profit or loss.

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Annual Report and Accounts 2016

59

2. ACCOUNTING POLICIES CONTINUED
DEPRECIATION

Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic 
life of that asset as follows:

Freehold property
Fixtures and fittings
Computer equipment

INVESTMENTS

– 2% straight line
– 20% straight line
– 25% straight line

Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.

IMPAIRMENT OF FIXED ASSETS

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated 
where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. 
Prior impairments are also reviewed for possible reversal at each reporting date.

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset,  
an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating 
unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent 
of the cash inflows from other assets or groups of assets.

For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated 
to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of 
whether other assets or liabilities of the Company are assigned to those units.

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 the property with 
vacant possession in its current condition.

DEFINED CONTRIBUTION PLANS

Contributions to defined contribution plans are recognised as an expense in the period in which the related service is 
provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction  
in future payments or a cash refund.

CRITICAL ACCOUNTING JUDGEMENTS AND KEY AREAS OF ESTIMATION UNCERTAINTY
Going concern 

The Directors are required to make an assessment of the Company’s ability to continue to trade as a going concern.

The two main considerations were as follows:

1.  Refinancing of banking facilities 

The Company has a £20 million (2015: £30 million) revolving loan facility with HSBC Bank. The termination date is  
November 2019.

The Company has a £60 million (2015: £75 million) revolving loan facility with Barclays Bank. The term termination date of 
this facility is December 2018.

2.  Convenant compliance 

The core facility has two convenants, Consolidated Gross Borrowing to Consolidated Net Tangible Assets ratio, and interest 
cover ratio. The Company has remained well within both of these convenants during the year.

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Annual Report and Accounts 2016

60
Notes to the Financial Statements 
under UK GAAP continued

for the year ended 31 March 2016

2. ACCOUNTING POLICIES CONTINUED
On this basis, the Directors have a reasonable expectation that the Company has 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. 

Carrying value of trading stock

The Company’s residential trading stock is carried in the balance sheet at the lower of cost and net realisable value.

As the Company’s business model is to sell trading stock on vacancy, net realisable value is the net sales proceeds which the 
Company expects on sale of a property with vacant possession.

Inventory expected to be settled in more than 12 months

The Board estimates that inventory of £18.9 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.

Regular 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. STAFF COSTS (INCLUDING DIRECTORS)

Wages and salaries

Social security costs

Pension costs

DIRECTORS’ REMUNERATION

2016 
£000

3,070

377

184

3,631

2016 
£000

2015 
£000

2,512

300

208

3,020

2015 
£000

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

1,748

1,447

The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on pages 23 to 29.

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

2016 

26

2015 

26

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Annual Report and Accounts 2016

61

Freehold 
property 
£000

Fixtures 
and fittings 
£000

Computer 
equipment 
£000

2,671

–

–

2,671

754

53

–

807

1,917

1,864

176

–

(160)

16

143

32

(160)

15

33

1

20

–

–

20

5

5

–

10

15

10

Total 
£000

2,867

–

(160)

2,707

902

90

(160)

832

1,965

1,875

4. TANGIBLE ASSETS

Cost

At 1 April 2015

Additions

Disposals

At 31 March 2016

Depreciation

At 1 April 2015

Charge for the year

On disposals

At 31 March 2016

Net book value

At 31 March 2015

At 31 March 2016

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

5. INVESTMENTS

Cost
At 1 April 2015 and 31 March 2016

Impairment
At 1 April 2015 and 31 March 2016

Carrying amount
At 31 March 2016

 Subsidiaries

The Company owns 100% of the Ordinary Share capital of the following companies:

Subsidiary undertaking

Hurstway Investment Company Limited

Louise Goodwin Limited

A.L.G. Properties Limited

Country of 
incorporation

UK

UK

UK

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Shares 
in Group 
undertakings 
£000

18,276

–

18,276

Principal activity

Property trading

Property investment

Property investment

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Annual Report and Accounts 2016

62
Notes to the Financial Statements 
under UK GAAP continued

for the year ended 31 March 2016

6. STOCKS

Residential properties

7. DEBTORS: DUE WITHIN ONE YEAR

Trade debtors

Amounts owed by group undertakings

Prepayments and accrued income

8. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Bank loans and overdrafts

Amounts owed to Group undertakings

Accruals and deferred income

Corporation Tax

Other taxes and social security costs

Other creditors

Other loans

2016 
£000

2015 
£000

305,158

307,089

2016 
£000

164

4,321

1,404

5,889

2016 
£000

3,625

7,617

1,405

4,774

238

1,307

–

2015 
£000

179

–

1,569

1,748

2015 
£000

737

9,763

1,152

1,334

98

1,021

225

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

18,966

14,330

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63

9. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Bank loans

Maturity profile of financial liabilities at 31 March 2016 was as follows:

Amounts repayable:

Between one and five years

2016 
£000

39,700

39,700

2015 
£000

60,200

60,200

2016 
£000

2015 
£000

39,700

39,700

60,200

60,200

The Directors consider that the carrying amount of bank overdrafts and loans approximates their fair value.

The other principal features of the Company’s borrowings are as follows.

1.  The Company has short-term borrowing facilities of £10 million with Barclays Bank. This facility is due for review in 

November 2016 and the rate of interest payable is:

•  1.6% over base rate on overdraft.

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  Headroom of this facility at 31 March 2016 amounted to £6.4 million (2015: £14.3 million).

2.  The Company has a £60 million (2015: £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 2016 amounted to £36.5 million (2015: £44 million).

3.  The Company has a £20 million (2015: £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 2016 
amounted to £3.8 million (2015: £800,000).

4.  Other loans which were repaid during the year consisted of loans from connected persons, and companies of which 

Mr. D.M. Sinclair is a Director. There were no outstanding loans as at 31 March 2016 (2015: £50,000). Interest payable on 
these loans was at 0.5% above Barclays Bank Plc base rate.

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64
Notes to the Financial Statements 
under UK GAAP continued

for the year ended 31 March 2016

10. CASH AND CASH EQUIVALENTS

Bank overdrafts

Cash

Cash and cash equivalents as at 31 March

Maturity profile of financial liabilities at 31 March 2016 was as follows:

Amounts repayable:

In one year or less

Between one and five years

Less: amount due for settlement within 12 months (shown under current liabilities)

Amount due for settlement after 12 months

11. FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL ASSETS

2016 
£000

(3,625) 

1,619

(2,006) 

2016 
£000

3,625

39,700

43,325

(3,625)

39,700

2015 
£000

(738) 

1,504

766 

2015 
£000

963

60,200 

61,163

(963)

60,200

The Company’s financial assets at the year end consist of trade receivables and cash at bank and in hand of £1.619 million 
(2015: £1.504 million).

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

The trade receivables amounted to £5.889 million (2015: £1.747 million).

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

FAIR VALUE OF BORROWINGS

Bank overdrafts

Secured bank loans

2016 
£000

3,625 

39,700

43,325

2015 
£000

 963

60,200

61,163

Interest charged in the Income Statement for the above borrowings amounted to £1.17 million (2015: £1.73 million).

The Directors consider that the carrying amount of borrowing approximates their fair value. The details of the terms of the 
borrowings can be seen in Note 9.

As at 31 March 2016 it is estimated that a general increase of 1 point in interest rates would decrease the Company’s profit 
before tax by approximately £433,250 (2015: £611,000).

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2016 
£000

2015 
£000

250

195

2016 
£000

55

25

39

119

250

195

2015 
£000

55

25

39

119

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12. 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

13. 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 2016 stood at £39,000 
(2015: £39,000).

14. PROFIT AND LOSS ACCOUNT

Balance at 1 April

Net profit for the year 

Dividends paid

Balance at 31 March

2016 
£000

2015 
£000

255,738

235,805

32,720

(14,621)

29,680

(9,747)

273,837

255,738

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Notes to the Financial Statements 
under UK GAAP continued

for the year ended 31 March 2016

15. RELATED PARTY TRANSACTIONS

During the financial year there were no key management personnel emoluments, other than remuneration.

(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 £36,493 (2015: £41,961) were charged 
for these services.

(b) Included within other loans repayable in less than one year and on demand was a loan from Sinclair Estates Limited. The 
balance outstanding at the balance sheet date was £nil (2015: £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 £422 (2015: £3,511).

(c) Included within other loans repayable in less than one year and on demand was a loan from Ossian Investors Limited. 

The balance outstanding at the balance sheet date was £nil (2015: £50,000). 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 £331 (2015: £370).

(d) Included within other loans repayable in less than one year and on demand was a loan from Mrs. D. Sinclair, a 

Shareholder of the Company. The balance outstanding at the balance sheet date was £nil (2015: £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 £877 (2015: £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.

16. DIRECTOR’S ADVANCE, CREDITS AND GUARANTEES
As at 31 March 2016 the Company owed Mr. D.M. Sinclair £6,215 in relation to an informal loan.

17. OPERATING LEASE COMMITMENTS
At 31 March 2016 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

2016 
£000

2015 
£000

31

20

–

51

51

38

–

89

18. TRANSITION TO FRS 102
These are the first financial statements that comply with FRS 102. The Company transitioned to FRS 102 on 1 April 2014.

No transitional adjustments were required in equity or profit or loss for the year.

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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 2016 
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), including FRS 102 “The Financial Reporting Standard applicable in the UK and 
Republic of Ireland”.

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 17 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 2016; 

•  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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Independent Auditors’ Report continued

to the members of Mountview Estates P.L.C. on the Parent Company Financial Statements

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, 
in our opinion:

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

been received from branches not visited by us; or

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

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

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

OTHER MATTER
We have reported separately on the Group Financial Statements of Mountview Estates P.L.C. for the year ended  
31 March 2016.

Athanasios Athanasiou (Senior Statutory Auditor)  
for and on behalf of BSG Valentine 
Chartered Accountants and Statutory Auditors 
London, United Kingdom 
14 July 2016

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69

Table of Comparative Figures

for the year ended 31 March 2016

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 
a percentage of dividend 

Cost of Executive Directors’ remuneration as 
a percentage of total remuneration

Cost of Executive Directors’ remuneration as 
a percentage of dividend

Executive Directors’ remuneration as 
a percentage of profit before taxation

IFRS 
2010 
£000

IFRS 
2011 
£000

IFRS 
2012 
£000

IFRS 
2013 
£000

IFRS 
2014 
£000

56,697

29,255

7,620

21,635

554.8p

165p

3.36

6,432

2,759

1,569

47,655

23,560

6,589

16,971

435.3p

165p

2.64

6,432

2,390

1,233

42,931

22,805

5,350

17,455

447.7p

165p

2.71

6,432

2,184

1,117

56,646

28,928

6,783

22,145

568.0p

175p

3.25

6,823

2,479

1,319

66,150

35,394

6,952

28,442

729.5p

200p

3.64

7,798

2,598

1,132

As at 
31 March 
2016 
IFRS 2016 
£000

79,765

48,388

9,676

38,712

992.9p

300p

3.31

IFRS 
2015 
£000

71.331

39,976

8,159

31,817

816.0p

275p

2.98

10,722

11,697*

3,020

1,324

3,631

1,604

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42.89%

37.15%

33.95%

36.33%

33.32%

28.17%

31.04%

56.87%

51.59%

51.14%

53.2%

43.57%

43.84%

44.18%

24.3%

19.1%

17.3%

19.3%

14.52%

12.35%

13.71%

5.36%

5.23%

4.90%

4.56%

3.20%

3.31%

3.31%

*  The £11.69 million dividend in relation to 2016 is made up of the interim dividend of £7.80 million and the final dividend of £3.89 million, which will be paid on 

15 August 2016, subject to approval at the AGM on 10 August 2016.

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70
Notice of Meeting

Notice is hereby given that the 79th 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 10 August 2016 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 2016.

2.  To declare a final dividend of 100 pence per share payable on 15 August 2016 to Shareholders on the register at  

15 July 2016.

3.  To re-appoint Mr. D.M. Sinclair as a Director of the Company.

4.  To elect Dr. A.R. Williams as a Director of the Company.

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

Accounts for the year ended 31 March 2016. 

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.

By Order of the Board

M.M. Bray 
Company Secretary

Mountview House  
151 High Street 
Southgate 
London N14 6EW

14 July 2016

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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 (as amended). 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 close of 
business on 8 August 2016 (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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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 Guidance 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 Guidance 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 of 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 14 July 2016 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 14 July 2016, 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 14 July 2016 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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Adoption of Financial Reporting 
Standard FRS 102  

Reduced Disclosure Framework

Following the publication of FRS 100 ‘Application of Financial Reporting Requirements’ by the Financial Reporting Council, 
the Company proposes to change its accounting framework for its financial statements for its financial year commencing 
1 April 2016. The Directors consider that it is in the best interests of the Company for it to adopt FRS 102 Reduced 
Disclosure Framework and this does not affect the Group accounts in any way. The Company’s election to adopt FRS 102 for 
its Parent Company financial statements does not require Shareholder approval. A Shareholder or Shareholders holding in 
aggregate 5 per cent or more of the total allotted shares in the Company may serve an objection in writing to its registered 
office Mountview House, 151 High Street, Southgate, London N14 6EW) no later than 9 August 2016.

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Mountview Estates P.L.C.
Annual Report and Accounts 2016

74
Shareholders’ Information

FINANCIAL CALENDAR 2016

Final dividend record date

Annual Report posted to Shareholders

Annual General Meeting

Final dividend payment

Interim results

15 July

15 July

10 August

15 August

24 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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Mountview Estates P.L.C.

Annual Report and Accounts 2016

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Mountview Estates P.L.C.
Mountview House,
151 High Street,
Southgate,
London N14 6EW

Tel: +44 (0) 20 8920 5777
Fax: +44 (0) 20 8882 9981

www.mountviewplc.co.uk

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