Mountview Estates PLC Annual Report 2020

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FY2020 Annual Report · Mountview Estates PLC

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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

Mountview Estates P.L.C.
Annual Report and Accounts 2020

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Mountview Estates P.L.C. Annual Report and Accounts 2020

About Us

Mountview Estates 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 in England and Wales and sells such property when
it becomes vacant.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Our Performance

Revenue

Gross Profit

Profit before Tax

0.8%

£64.9m
(2019: £65.4m)

1.5%

0.9%

£41.4m
(2019: £40.8m)

£34.9m
(2019: £34.6m)

Profit before Tax
*excluding Investment Properties
Revaluation

4.7%

£35.9m
(2019: £34.3m)

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Shareholders’
Equity

Earnings per
Share

Net Assets per
Share

Dividend per
Share

3.5%

£379.6m
(2019: £366.9m)

1.0%

725.7p
(2019: 718.3p)

3.5%

£97.4
(2019: £94.1)

400p
(2019: 400p)

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 200 pence per share are as follows:

Ex dividend date 9 July 2020
Record date
Payment date

10 July 2020
17 August 2020

Contents

STRATEGIC REPORT

FINANCIAL STATEMENTS

OTHER INFORMATION

89 Notice of Meeting

95 Shareholders’ Information

01 Our Performance

02 Chairman’s Statement

03 Chief Executive’s Statement

04 Where we Operate

04 Review of Operations

09 Principal Risks and Uncertainties

12 Section 172 Statement

49 Consolidated Statement
of Comprehensive Income

50 Consolidated Statement
of Financial Position

51 Consolidated Statement
of Changes in Equity

52 Consolidated Cash Flow Statement

53 Notes to the Consolidated Financial

14 Operational response to Covid-19

Statements

GOVERNANCE

15 Directors and Advisers

16 Directors’ Report

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

75 Company Balance Sheet under UK GAAP

76 Company Cash Flow under UK GAAP

77 Notes to the Financial Statements

25 Statement of Directors’ Responsibilities

under UK GAAP

26 Corporate Governance

84 Independent Auditors’ Report to

31 Report of the Audit and Risk Committee

35 Remuneration Report

47 Report of the Nomination Committee

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

88 Table of Comparative Figures

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Chairman’s Statement

Dear Shareholder,

INTRODUCTION
In my statement this year I would first like to refer to
the Covid-19 pandemic where the UK restrictions were
introduced shortly before our year end. As such this did not
affect the 2019-20 financial year, but it has meant that we have
had to adapt in the new year to accommodate working within
the Government restrictions. Inevitably these restrictions have
had an immediate effect on our operations and it is a huge
credit to the Executive Directors and our staff that we have
been able to reorganise to accommodate a mix of home and
office working, social distancing and other safety measures.
These have allowed us to continue to serve our tenants and
other stakeholders in as seamless a way as possible at very
short notice.

Further details of how we have responded to the virus are
included in the Annual Report notably, in a separate report on
our operational response to the virus, and in our discussions
on risk and also the impact on the Annual General Meeting
– which this year will not be possible as the usual ‘ballroom’
event, but will still permit shareholders the key aspects of
voting and being able to ask questions of the Board. The
detailed arrangements for the current year are described
more fully in the Notice of the Meeting on pages 89 to 94.

OPERATIONAL PERFORMANCE
This year has seen an increase in profit after the recent
falls – something that we welcome. As we have noted
in the past, once properties have been purchased, their
conversion into realised value is dependent on a range
of factors covering timing, location of properties coming
vacant and market conditions, all of which are outside the
Group’s control. The key aspect that lies within our control
is purchasing, in particular ensuring that the purchases are
made at an appropriate value – which can mean turning
down properties offered to us. During the year we had
fewer purchasing opportunities which is reflected in the
level of purchases made as we sought to ensure that only
good quality was added to our portfolio. This keen eye
on purchasing has continued into the new financial year,
despite Covid-19 ,and we have been active in auctions, both
buying and selling properties at prices that we would have
been pleased with at any time in recent years.

CORPORATE GOVERNANCE
This year has also seen the full introduction of the 2018
Corporate Governance Code (the Code) and a number of
pieces of legislation that have increased the disclosures in the
Annual Report. We do welcome these developments and the
transparency they permit. In our case we are confident

that we have drawn an appropriate line between meeting
the spirit of these requirements while taking account of the
nature and size of the business. Our report on Corporate
Governance (pages 26 to 30) describes in more detail how
we have embraced the Code, including those areas where
we believe we comply with the spirit, while not adhering
completely to the detailed requirements.

In addition, for the first time we include, as a part of our
Review of Operations, a Section 172 Statement – which
outlines how we engage with our various stakeholder
groups, with examples of how we have taken them into
account in decisions taken during the year.

This year we are also putting a new remuneration policy
to shareholders for approval at the AGM. Given the stable
nature of the strategy and the business model, we are
making a number of changes to the policy after consultation
with shareholders, and to reflect emerging regulation and
practice.

PEOPLE
I have already touched on the way that our staff have quickly
re-organised and adapted to the challenges placed by the
Covid-19 pandemic. I am firmly of the belief that this has
been possible in large part because of workforce’s skills and
long experience within the Group which meant that they
were readily able to adapt to the need to work from home,
while minimising disruption to services to our tenants. In
this, a particular thanks has to go to our IT team for their
speedy work in setting up the necessary infrastructure to
permit this to happen. The Board is grateful for the skills,
hard work and commitment of our people; further details of
our employees can be found in the Review of Operations.

THE COMING YEAR
The coming year is already characterised by macro-level
uncertainty as the nature of the UK’s future relationship
with the EU and other countries evolves and as we face the
continuing challenge of Covid-19 – both of which have the
potential to affect the housing markets. As noted above,
to date we have been able to continue to buy and sell
at auction at what we believe to be fair and appropriate
prices, and as the restrictions are relaxed and our other
channels reopen we are optimistic that this is a trend that
will continue.

A.W.Powell
Non-Executive Chairman
9 July 2020

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Chief Executive’s Statement

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We have had to adapt to new ways of running the office and
I think that we have done so quite effectively. Those of us
who can work from home do so and the office is staffed on
a rota basis so that we are able to maintain social distancing
and still serve our customers appropriately. Over 80% of our
rents are paid directly into the bank and regulated rents are
set at a modest level. Provided tenants pay their rent they
have absolute security of tenure and a significant number
have help from social services.

Auctions are now all conducted remotely and the
auctioneers are becoming more successful at replicating
the ballroom atmosphere. So far this financial year we have
been happy in the auction room both in terms of sale prices
achieved and the prices at which we have been able to
make purchases. Nobody can pretend that life is normal but
our staff are coping very well.

We have not had to furlough any staff or reduce staff
numbers in any other way and I remain confident that our
years of financial prudence will enable us to continue to
conduct the business successfully and to maintain our
dividend payments. Whilst I thank my staff and colleagues
for their hard work, loyalty and expertise in producing
increased profits for the year ended 31 March 2020 I thank
them also for the willingness and good humour with which
they are adapting to the strange circumstances in which we
are finding ourselves.

I look forward to writing this statement in more normal times
next year.

D.M. Sinclair
Chief Executive Officer
9 July 2020

Dear Shareholder,

When I wrote this statement last year I drew attention to
the fact that the British People voted to leave the European
Union on 23 June 2016 but every statement that I had
written since then has been conscious of the uncertainties
that continue pending the conclusion of our withdrawal.

Happily on 12 December 2019 Boris Johnson was elected
with a big majority that enabled us to leave the European
Union on 31 January 2020 but the details of the withdrawal
will not be certain until 31 December 2020.

Now added to these uncertainties are the Covid-19
constraints the effects of which I will review later in this
statement. The financial year under review ended on 31
March 2020 and the lockdown was not imposed until within
ten days of that date. Given the time-lag on transactions in
the property business it is fair to assume that any deal that
was to conclude within those few days was already under
contract before the constraints were imposed.

I believe that the trading results for the year ended 31
March 2020 were not influenced by the Covid-19 pandemic
and that any influence or effects should be considered as
post balance sheet events.

The headline figures in respect of our financial performance
for the year ended 31 March 2020 are detailed under the
heading “Our Performance”on page 1. Whilst Revenue
has dropped by a very modest amount all the other
performance indicators have shown an upward trend.
Gearing has fallen from 11.3% to 7.2% and thus we are in
an even stronger position to make the purchases which are
essential to the future of the Company. Indeed we have
made some good purchases in our new financial year.

The final dividend is maintained at 200 pence per share and
is payable on 17 August 2020 subject to approval at the
Annual General Meeting on 12 August 2020. This will keep
the total annual dividend at 400 pence per share which is
slightly more generously covered 1.75 times than it was last
year.

And now I inevitably turn to “Stay Home, Protect the N.H.S.,
Save Lives” or as expressed more recently “Stay Alert,
Control the Virus, Save Lives”.

Our colleague Andrew Williams is a doctor and it would be
wrong not to express our admiration for his unstinting work
on the front line. Well done and thank you, Andrew!

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Where we Operate

KEY

34.8% London (North)

23.1% London (South)

18.1% South East

Bedfordshire
Berkshire
Buckinghamshire
Cambridgeshire
Essex
Hertfordshire
Middlesex
Norfolk
Northamptonshire
Oxfordshire
Suffolk

14.0% South
Dorset
Hampshire
Isle of Wight
Kent
Surrey
Sussex

2.5% North

Midlands
Derbyshire
Leicestershire
Nottinghamshire

7.5% Remainder of

England and Wales

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

2.5%

7.5%

18.1%

34.8%

14.0%

23.1%

Review of Operations

The Group’s strategy and business model is
simple. We are a property trading company
that buys tenanted properties at a discount
to estimated vacant possession value and
then sells them when they become vacant.

OUR PORTFOLIO
Categories of property held as trading stock

The Group trades in the following categories:

• Regulated tenancy residential units

• Assured tenancy units

• Life tenancy units

• Freehold and leasehold ground rent units

A unit is a property, however large or small, whether
freehold or leasehold, which is held subject to one tenancy.

Revenue
£64.9m

Gross Profit
£41.4m

(2019: £65.4m)

(2019: £40.8m)

Analysis of the Group Trading portfolio
by type as at 31 March 2020

Regulated, Assured Shorthold
tenancies, & Other

Assured tenancies

Life tenancies

Freehold & leasehold ground rents

No.
of units

Cost
£m

1,955

314.72

252

242

1,153

36.71

33.20

7.44

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Analysis of the Group Trading portfolio at the lower of cost and estimated net realisable value by geographical location
as at 31 March 2020

Regulated, Assured
Shorthold tenancies,
Assured tenancies
& other
£m

Life
tenancies
£m

Ground
rents
£m

Portfolio
%

London (North)
London (South)
Bedfordshire, Berkshire, Buckinghamshire, Cambridgeshire, Essex,
Hertfordshire, Middlesex, Norfolk, Northamptonshire, Oxfordshire, Suffolk
Dorset, Hampshire, Isle of Wight, Kent, Surrey, Sussex
Midlands, Derbyshire, Leicestershire, Nottinghamshire
Remainder of England and Wales

129.64
74.53

65.43
49.37
9.14
23.32

0.60
15.08

5.24
5.45
0.55
6.28

6.27
0.85

0.15
0.07
0.10
–

34.82
23.07

18.06
14.00
2.50
7.55

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 properties. The former, which are
characterised by rental returns below market value, are becoming increasingly short in supply. Since the Housing Act 1988
no new regulated 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 the Group. We carry out regular checks to ensure
that all properties are maintained in good condition.

During the financial year we achieved sales of £45.7 million (2019: £46.4 million), demonstrating the liquidity of the Portfolio.
The average sales price achieved was £274,000 (2019: £301,000).

The Group’s sales for financial years 2020 and 2019 are set out below

Sales

Gross sales of properties
Cost of properties sold

Sales price range – 2020

1 million +
500,000 – 1 million
below 500,000

Sales price range – 2019

1 million +
500,000 – 1 million
below 500,000

2020
£m
45.65
17.69

2019
£m

46.43
18.97

Location

London & South East
London & South East
London & others

Location

London & South East
London
London & others

No of units Sales price £m
2.0
10.7
33.0

1
15
151

No of units Sales price £m
3.3
12.2
30.9

3
19
132

Further information is provided in Note 4 to the Consolidated Financial Statements on page 59.

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 becomes vacant and the reversionary gain is crystallised.

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Review of Operations (Continued)

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 predominantly sold by private treaty.

The Group’s 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.

ANALYSIS OF ACQUISITIONS

The Group’s acquisitions for financial years 2020 and 2019 are set out below. The analysis does not include legal and
commission expenses directly related to the acquisition of properties or any repairs of a capital nature.

Year ended 31 March 2020

Regulated, ASTs, and other
Assured tenancies
Life tenancies
Leasehold ground rents
Ground rents created
Total

Not included in the above table:

Assured tenancies created

THE TABLE ABOVE INCLUDES THE FOLLOWING:

Portfolios

LONDON 20 Portfolio

The portfolio comprised 6 regulated tenancies.

Leyton Portfolio

The portfolio comprised 10 regulated tenancies.

Year ended 31 March 2019

Regulated, ASTs, and other
Assured tenancies
Life tenancies
Leasehold ground rents
Ground rents created
Total

Not included in the above table:

Assured tenancies created

THE TABLE ABOVE INCLUDES THE FOLLOWING:

Leasehold Ground Rents

Kensington, London W8

Portfolios

Southern, London & South East

Cost £m
13.08
1.30
0.24
0.80
–
15.42

No. of units
38
5
2
5
7
57

No. of units
6

Cost £m
1.77

No. of units
10

Cost £m
4.00

Cost £m
25.21
1.68
0.71
3.74
0.03
31.37

No. of units
79
8
2
2
14
105

No. of units

Cost £m

3.74

No. of units

Cost £m

6.44

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The portfolio comprised 17 regulated tenancies and 2 assured tenancies.

Epping Portfolio

The portfolio comprised 9 regulated tenancies.

RENTAL INCOME
The Company’s rental income is derived from five different sources:

No. of units

Cost £m

3.32

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• 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 59.

SUMMARY PROSPECTS FOR THE GROUP
Any consideration of prospects for the current year (2020-21) is overshadowed by the impact of Covid-19 and how this will
have affected our earlier plans. A full discussion of the Group’s response to the Covid-19 pandemic and the consequent
Government actions is included in Review of Operations in this annual report on page 14. While Covid-19 and lockdown
protocols have caused a delay in progressing sales and purchases we are achieving satisfactory results at auctions. We
anticipate there will be a short-term reduction in our sales transactions leading to a delayed realisation of gains inherent in
the sales of vacant properties however we expect to take advantage of good purchasing opportunities.

During 2019-20, the professional knowledge and skills of our compact team ensured that we were able to purchase
properties for a total of £15.42 million.

Looking ahead, notwithstanding the potential slowing down of the housing market, 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 operational approach. We have kept gearing low.

Since the end of the financial year we have continued to sell and purchase properties through auctions 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 future.

INVESTMENT COMPANIES
The analysis of the investment portfolio as at 31 March 2020 is as follows:

Louise Goodwin Limited
A.L.G. Properties Limited

2020
27 units
4 units

2019

31 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 4 units for
£4.195 million (2019: £Nil).

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Review of Operations (Continued)

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 homes in this area.

The valuation of the investment portfolio decreased during the year by £969,000 (2019: increased £287,000). 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 including the impact of Covid-19.

Details of the valuation of the investment portfolio are disclosed in Note 13 to the Consolidated Financial Statement on
page 63.

Details of environmental matters and social community issues are disclosed in note 9 in the Directors’ Report on page 19
and information on employees is disclosed in note 11 in the Directors’ Report on page 21. Information in these sections is
incorporated by reference into this Strategic Report.

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 and Chairman’s Statements. The Group has the following Financial Key Performance Indicators:

FINANCIAL KEY PERFORMANCE INDICATORS

REVENUE (£m)
 0.8%

64.9

65.4

PROFIT BEFORE TAX (£m)
 0.9%

34.9

34.6

INTEREST COVER IN RELATION
TO PROFIT BEFORE INTEREST
AND TAXATION
36.0

56.0
33.0

2020

2019

2020

2019

2020

2019

EARNINGS PER SHARE (Pence)
 1.0%

NET ASSETS PER SHARE (£)
 3.5%

GEARING RATIO (%)
 36.3

725.7

718.3

97.4

94.1

11.3

7.2

2020

2019

2020

2019

2020

2019

DIVIDEND PER SHARE (Pence)


400

2020

2019

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Any condition that has a greater effect on the older
members of society will have a disproportionate effect on
regulated tenancies as opposed to other forms of tenancy.
Covid-19 has just such an effect and is likely to reduce the
total population of regulated tenancies more quickly than
previously anticipated. The second factor – the propensity
of owners to sell - is an unknowable component as it is
dependent on many subjective personal factors. Thus, if all
other things are equal, then the supply may be reduced in
proportion to the reduced number of regulated tenancies
in existence – but there should still be properties available
in the short term, though in the longer term that supply may
run out sooner than if Covd-19 had not appeared.

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2. MARKET
RISK

Weak macro-economic conditions – which in our 2019
Annual Report and Accounts was linked to the impact of
political / Brexit uncertainty, and for the current year has
been replaced with the uncertainty associated with the
outcome of negotiations on the trade deal with the EU and
Covid-19.

MITIGATION

The Group’s exposure is weighted towards the stronger
London and South East markets and this geographical area
has consistently been an above-average performer.

COVID-19 IMPACT

As noted above, the Group’s exposure is weighted towards
the stronger London and South East markets. Moreover, in
the auctions that have taken place since the lockdown, sales
prices for London based properties have held up.

RISK REVIEW –
PRINCIPAL RISKS AND UNCERTAINTIES
RISKS POSED BY COVID-19
In the current climate, any discussion of risk must necessarily
start by considering the impact that the Covid-19 pandemic
has had and may have on the business. As a risk factor it
has already had an impact on many aspects of Mountview’s
operations from general market sentiment through to the
very particular impact that it has had on how we work on a
day to day basis. Our operational response to the virus is
described on page 14. In this section we set out the impact
that the virus may have on the principal risks considered in
the Review of Operations.

There is one key difference from the other risks to the
business because, with the virus, we are not looking at a
possible future risk and how that might affect the business
but rather looking at the impact that it already has had
and could have in the future under various scenarios of
seriousness and the Government’s response. Each risk area,
our standing mitigating actions and our comments on the
impact of Covid-19 are shown below.

1. TRADING STOCK – REGULATED
TENANCIES
RISK

Reduced opportunity to replace asset sales of vacant
properties due to the reducing number of regulated
tenancies available for purchase.

MITIGATION

The Group has developed clear criteria that are applied
when considering asset purchases. Using these, the Group
has performed creditably in replacing this class of assets in
the year ended 31 March 2020, with good purchasing again
during the year. The ‘Analysis of Acquisitions’ is on page 6.

COVID-19 IMPACT

The availability of regulated tenancies for purchase is
broadly dependent on two factors - the supply of regulated
tenancies as a whole and the propensity of the owners of
those properties to sell. The first of these is likely to impact
on the longevity of the market for regulated tenancies; the
second to affect the numbers available at any one time.

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Review of Operations (Continued)

3. FINANCIAL
RISK

5. PEOPLE
RISK

Reduced availability of financing options resulting in inability
to meet business plans.

MITIGATION

The Group monitors its bank accounts and loans closely to
maintain sufficient capacity. We review our loan facilities
regularly. The Group is conservatively geared and operates
well within financial covenants. Financial Key Performance
indicators are on page 8. Details of the Groups current
facilities are set out in Note 18 on page 65 and 66.

COVID-19 IMPACT

For this risk the impact of Covid-19 should be limited given
that the earliest termination date for any facility is December
2022 – so under current Government projections some time
beyond the expected lifetime of the Covid-19 pandemic.

4. DIVIDENDS
RISK

The Group seeks to provide shareholders with good returns
on their investment. This aim could be put at risk if the
Group was unable to sustain the level of dividends for any
reason.

MITIGATION

We carefully monitor our strategy and our results in order to
identify any risk to dividend levels.

The Group maintains a strong balance sheet. With
appropriate banking facilities, we are able to maintain
our trading stock by taking advantage of purchasing
opportunities when they occur.

COVID-19 IMPACT

In the short term we do not see any threat to being able
to maintain dividends at their current levels. The current
year’s operations have again generated good profits for the
Group, which support the payment of a dividend at these
levels.

Capacity to maintain strategy is compromised due
to inability to attract and retain suitably experienced
employees.

MITIGATION

Mountview employs a relatively small workforce which
accommodates personal interaction at all levels.

The Company has a stringent recruitment process to ensure
we employ appropriately skilled staff. We carry out regular
appraisals and offer employees opportunities for training
and development courses. The Company has a good record
of long-term service, a great number of our employees have
worked for the group for over 10 years. Details of employees
and diversity are set out in Notes 11 and 12 of the Directors’
Report on pages 21 and 22.

COVID-19 IMPACT

The impact of Covid-19 adds a further risk factor which
is helping staff to remain healthy through the pandemic.
Given the high levels of both skill and experience of the
staff and the provisions made by the Company to facilitate
minimum disruption to our work practices we are meeting
our operational objectives at a satisfactory level.

6. REGULATORY
RISK

Risk of not meeting new or changed regulatory
requirements and obligations that affect the Group’s
business activities and could lead to fines or penalties.

MITIGATION

The Group engages in close working relationships with
appropriate authorities and advisers to ensure it meets its
obligations.

COVID-19 IMPACT

None that we are aware of.

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THE OVERALL RISK ENVIRONMENT

Given Mountview’s business model and financial
strength, while any risks materialising could well have a
negative impact on short term performance, and lead to
inconvenience, none are significant enough to threaten
the continued existence of the Group. While we recognise
there may be a short term negative impact as a result of
Covid-19, we are confident that we can meet our strategic
and operational goals and in particular are in a strong
position to take advantage of purchasing opportunities as
they arise. Risks are considered to be broadly unchanged
from 2019 with moderate assessments for both probability
of occurrence and impact.

These principal risks were part of the Group’s assessment of
long term viability, details of which are set out in Note 8 of
the Directors’ Report on page 18.

7. OPERATIONS AND PROPERTY
MAINTENANCE
RISK

Legal action against the Group for failure to meet its
obligations under property management and safety
legislation.

MITIGATION

In addition to its own regular inspections, the Group
engages professional external companies to undertake
health and safety, gas and electrical checks, fire risk
assessments, etc to ensure we meet our commitments as
employers and landlords. Our staff receive regular training
to ensure their skills are kept up to date.

To address the increasing regulatory workload, the Group
recruited a Compliance Officer whose role is to monitor our
performance against existing regulations and to track and
prepare for new requirements as they are published.

COVID-19 IMPACT

In line with industry recommendations we have currently
suspended non-essential visits until permissible under
Government Covid-19 guidelines. As noted on page 14 in
the note on the operational impact of the virus we have
established a working protocol where maintenance and
repair work is essential.

For work that remains necessary to carry out, the principal
risk arising under this heading arises from staff shortages –
both within our staff and within our contractor group who
carry out the sub-contracted safety and other inspections
and maintenance work. In relation to our own staff the
point has been discussed in risk 5 above. In relation to sub-
contractors we have a wide panel of sub-contractors that
we could call on, and in addition contact details of other
contractors who could carry out work for us. Accordingly
we are confident that any shortfall in staff at contractors
could be covered either by re-scheduling work or through
expanding the current contractor base.

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Review of Operations (Continued)

SECTION 172 STATEMENT
RELATIONS WITH SHAREHOLDERS AND
OTHER STAKEHOLDERS
The Board recognises that effective engagement with our
stakeholders is a key part of our operations and meeting
our strategy. Following the increased profile given to
stakeholder engagement associated with the 2018 Code,
and in support of the matters set out in Section 172(1) of
the Companies Act 2006 we have reviewed our stakeholder
group and for each major group codified how we engage
with them. This work has created a clear framework for
the Board to work with when taking material decisions as
it provides a checklist to ensure we identify and consider
those who could be affected. The listing below shows the
different groups and outlines the nature of our engagement
with them.

Intuitively the Board has for many years taken account of
the various stakeholder groups when considering major
decisions. The framework provides us with a tool to help
ensure that in major decisions we do consider the relevant
stakeholder groups, and has been used during the year, for
example:

• Acquisition of properties when offered portfolios and
considering which properties we make an offer on;

• Maintenance in deciding on the scope of works and the

contractors to engage;

• Other financial decisions for example those related to

remuneration of all staff, dividends and banking facilities
needed; and

• Planning and agreeing the Group’s response to the
Covid-19 pandemic including the impact on staff,
tenants and other stakeholder groups as described on
page 14.

The Board keeps our stakeholder framework under regular
review and update as we identify new groups or changes
to the nature, scope or extent of engagement with existing
groups.

STAKEHOLDER GROUPS AND NATURE
OF OUR ENGAGEMENT:
1. SHAREHOLDERS
•

In addition to reporting formal financial results twice a
year, the AGM presentation and discussion and RNS
announcements throughout the year, the Chairman and
other members of the Board hold ad hoc meetings on
request with shareholders. This includes annual meetings
with the major shareholders to gather their views on the
company strategy and operations. In the current year
we also consulted the largest shareholders on proposed
revisions to our Remuneration Policy. Shareholders of all
sizes contact us throughout the year by letter, phone or
e-mail. We respond to questions on an individual basis
or by RNS depending on the nature of questions asked.

2. EMPLOYEES
• Section 11 in the Directors’ report explains the

arrangements in place to enable the Company’s staff to
engage with the Board. Given the size of the Company’s
workforce, rather than adopting one of the methods
of engagement in provision 5 of the Code, the Board
reviewed and determined that the current arrangements
are sufficient.

3. CONTRACTORS AND SUPPLIERS
• All contractors are subject to thorough review by our
property management team when first appointed
and periodically thereafter. All contractors must sign
up to our Contractor Code of Conduct. Similarly, all
consultants or advisers are subject to review by the
Board before appointment. Major appointments – such
as the Auditors are subject to a formal tender process
and annual appointment. Regular contact between
the part of the business that engages the contractor/
supplier means that we are able to provide and receive
feedback to improve the level of service going forward.

4. FUNDERS – BANKS
• The CFO holds regular meetings with our principal

banks. At the time that facilities are renewed the CEO
and CFO negotiate the new agreement.

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5. CUSTOMERS – TENANTS AND BUYERS
REGULATED TENANCIES

8. LOCAL GOVERNMENT
• We liaise with various local government bodies

• These tenants form the bulk of our ‘customers’. We
engage with them periodically in relation to services
in the properties, and when necessary to ensure our
compliance with all obligations.

OTHER TENANCIES

• Day-to-day engagement with these tenants tends to be
through the property management team in relation to
maintenance or the renewals team when tenancies are
up for renewal.

BUYERS AT VACANT POSSESSION

• These buyers tend to be one-off purchases so that we
do not have on-going relationships with buyers. We
maintain a close working relationship with the auction
houses and estate agents through whom we sell
properties.

6. CORPORATE REGULATORY BODIES
• This group includes the FRC, FCA and others who are
responsible for developments relevant to our listing
and reporting to our shareholders and others. Their
role includes changes in law, accounting and auditing
standards and any other relevant matters. We regularly
review issuers websites to remain informed on changes
to regulation; similarly our various external advisers also
alert us to developments that they believe should be
brought to our attention. These reviews will be followed
by ad hoc contact as and when needed for clarification.
We also assist, when requested, in the periodic quality
reviews carried out by the FRC and others.

7. OPERATIONAL REGULATORY BODIES
• These bodies include the Gas Safe Register, the Health
and Safety Executive, The Environment Agency and
others. For all, in addition to responding to periodic
updates, we monitor their websites to remain current on
changes to regulation for their application to Mountview,
followed by ad hoc contact as and when needed for
clarification. We have appointed an external consultant
to provide Mountview with its own Health and Safety
policy which our contractors agree to abide by. This is
monitored by the external consultant.

and review their websites on a need to know basis.
Departments in local Government that we may contact
on a property specific basis include Social Services
& Environmental Health. We are currently using the
Ministry of Housing, Communities & Local Government
website in order to ensure compliance with Energy
Performance Certificates. We also have regular contact
with rent officers on matters concerning rent, property
condition and maintenance and other matters that may
arise on an ad-hoc basis and periodic contact with local
planning officers as and when works on properties,
including trees with TPOs, need permission before work
can start.

9. PROFESSIONAL ADVISERS
CORPORATE ADVISERS INCLUDING AUDITORS

• We have long standing relationships with the advisers

noted on page 15. We work with them on a combination
of retainer or ad hoc basis as they assist when matters
relevant to their area of expertise arise – including input
to the Annual Report and Accounts and related market
communications. Our engagement with the auditors is
set out in the Report of the Audit and Risk Committee
on pages 31 to 34.

In addition we work with a range of other external
specialists as needed. For example in the current
year this has included working with FIT remuneration
consultants as described in the Remuneration Report,
Allsops on the valuation of investment properties (see
Note 13 on page 63), and Winckworth Sherwood LLP on
employment matters.

OPERATIONAL ADVISERS

• These advisers include the legal advisers that we work
with, notably on property transactions, and auctioneers
and agents who form an essential part of the sales
process when properties become vacant.

10. LOCAL COMMUNITIES
• We engage early with local communities when

maintenance work could affect them for example
location of skips or disruption during works. Where
possible when maintenance work is needed on our
properties we employ well regarded locally based
contractors who meet the criteria in our code of conduct.

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Review of Operations (Continued)

OPERATIONAL RESPONSE TO COVID-19

The Covid-19 pandemic was declared on March 11, with
the UK’s ‘lock-down’ starting on the 23rd – shortly before
the Company’s financial year end. Serving and assisting our
tenants during these challenging times became our priority
and thus we took the steps outlined below to minimise
disruption as far as was possible.

We continue to undertake all obligatory inspections/tests
where access to the property is agreed in advance with the
tenant. Where we are unable to obtain consent to carry
out the inspections/tests the reason why is documented
to demonstrate that we have taken all reasonable steps to
satisfy our obligations.

PERSONNEL:
In compliance with the Government guidelines we support
our staff working from home. Steps taken to facilitate this
while minimising the disruption to operations included:

• extending remote capability to permit staff to access

all their usual business applications and files from their
personal devices.

• enabling call forwarding to permit office calls from/to

their personal mobile phones.

• providing training and guidance where required for

using these services.

We identified those staff who were themselves, or through
their family, in the high risk groups. These staff were
instructed to self-isolate for 12 weeks as required by the
Government.

Where it is essential to come to the office we have
introduced a strict staff rotation policy to ensure social
distance rules are obeyed, increased the cleaning and
hygiene regime, provided anti-bacterial and sanitisation
products, face masks and safety gloves for staff use.

Property inspections and site visits are conducted only when
essential and observance of social distance is crucial.

PROPERTY MAINTENANCE:
All contractors with whom we have worked over the last 2
years were contacted to secure their compliance with our
policy for adherence to Government guidelines on safe
working. This policy includes wearing facemasks, protective
gloves, ensuring social distance and essential hygiene
practices. Given the elderly profile of our tenants (a high risk
category) compliance with this policy is especially important.

We have deferred non urgent works while dealing with
emergencies and essential remedial work in agreement with
the tenant. Contractors are obliged to respect our tenants’
wishes with regard to social distancing and self-isolation.

RENT:
We are working with tenants, on a case by case basis, to
advise on the help and assistance available to them as a
result of loss of income through Covid-19. We establish the
facts in each case and, if necessary, agree a payment plan
to safeguard their tenancy while ensuring we are compliant
with Government guidelines.

AUDIT:
The planning for the year end audit was already underway
when the lockdown restrictions were imposed. We revised
arrangements so that the audit could be conducted
remotely in compliance with Government, FRC and FCA
guidelines. As a result we have not needed to amend our
timetable for the audit or for the production of the annual
report.

ANNUAL GENERAL MEETING:
The arrangements for the current year’s AGM have been
modified in accordance with Government guidelines in
respect of Covid-19 and are detailed in section 23 of the
Directors report on page 24 and in the Notice of Meeting
on page 89.

Approved and agreed on behalf of the Board by:

D.M. Sinclair
Chief Executive Officer
9 July 2020

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Directors and Advisers

as at the date of this Annual Report and Accounts

MR D.M. SINCLAIR FCA (CEO)

Joined the Company as Company Secretary in 1977,
became a Director on 1 January 1982 and succeeded
his late father as Chairman on 5 June 1990. Retained
the position of Chief Executive (‘CEO’) when the roles
of Chairman and CEO were split into separate roles in
2013. Fellow of the Institute of Chartered Accountants
in England and Wales.

MRS M.M. BRAY FCCA (CFO)

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
MR A.W. POWELL FCA FIMC* (CHAIRMAN)

Joined the Company as Non-Executive Director on 1 April
2018, assumed the role of Acting Chairman on 31 March
2019, and was confirmed as Chairman on 19 November
2019. Mr Powell is a fellow of the Institute of Chartered
Accountants in England and Wales and a fellow of the
Institute of Management Consultants.

* Mr A.W. Powell was considered at the time of his

appointment in 2018 to be independent for the purposes
of the UK Corporate Governance Code.

MS M.L. ARCHIBALD MRICS* (FORMERLY JARVIS)
(CHAIR OF THE REMUNERATION COMMITTEE)

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.

* Ms M.L. Archibald 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. Andrew is a qualified member of the
medical profession, and a member of the Sinclair concert
party. He represents the interests of the family and private
shareholders generally.

SECRETARY AND REGISTERED OFFICE
Mrs M.M. Bray FCCA
Mountview House,
151 High Street,
Southgate,
London N14 6EW

BANKERS
HSBC Bank Plc
1-3 Bishopsgate
London EC2N 3AQ

Barclays Bank PLC
One Churchill Place,
London E14 5HP

AUDITORS
BSG Valentine (UK) LLP
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
Link Asset Services (UK) Limited
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

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Directors’ Report

The Directors (as listed on page 15) have pleasure in presenting to the Members their 83rd Annual Report together with the
Financial Statements for the year ended 31 March 2020. Additional information which is incorporated by reference into this
Directors’ Report, including information required in accordance with the Companies Act 2006 can be found as follows:

Disclosure

Location

Financial risk management objectives and policies
Statement of Directors’ responsibilities
Directors’ interests in share capital
Compensation for loss of office arrangements.

Notes to the financial statements, pages 58 and 59
page 25
Remuneration Report, page 46
Remuneration Report, page 41

For the purpose of LR 9.8.4R, the only information required to be disclosed can be found in the following locations:

Disclosure

Location

Agreements with controlling shareholder

Directors’ Report, Note 21, page 23

All other sub-sections of LR 9.8.4R are not applicable.

1. RESULTS AND DIVIDENDS
The results for the year are set out in the Consolidated Statement of Comprehensive Income on page 49.

The Directors recommend the payment of a final dividend of 200 pence per share. The dividend will be paid on 17 August
2020, subject to approval at the Annual General Meeting (AGM) on 12 August 2020, to shareholders on the register at the
close of business on 10 July 2020.

Our proposals for running the AGM this year, in the light of the Covid-19 provisions are outlined in section 23 below.
Details of the AGM, including the notice of AGM, are set out on pages 89 to 94.

2. OUR PURPOSE AND HOW WE OPERATE
Mountview’s core purpose is to acquire and maintain regulated tenancy residential property providing below market rent
accommodation for our tenants until we get vacant possession when we sell such properties. In meeting this purpose, the
Group has a long established strategy, business model and set of operating procedures. All these have been developed
and refined by marrying the values of the founders and the knowledge and experience of our executives and staff with the
evolving environment that we operate in. The strategy and business model are reviewed annually and discussed with major
shareholders the majority of whom have confirmed their support for the Company to continue to operate unchanged.

Our key strengths that underpin our culture and support our continuing success are:

• Our team’s experience and knowledge of their sector and the communities we operate in

• A long-term view, underpinned by family values and ownership

• A conservative approach to financing, and management of our cost base

•

Investing responsibly to maintain our existing assets and acquire new assets

• Operating responsibly in the communities we serve

We describe on pages 12 and 13, our section 172 Statement, how and where we engage with our wider stakeholder group
and our impact on local communities – for example through seeking local contractors where possible to aid proximity
between suppliers and tenants and retain the economic benefits within the local community.

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3. ACTIVITIES
The principal activities of the Company and its subsidiary undertakings are as follows:

PARENT COMPANY
Mountview Estates P.L.C.

Property Trading

Registered Office: Mountview House, 151 High Street, Southgate, London, N14 6EW
Registered in England 328020

SUBSIDIARY UNDERTAKINGS (WHOLLY OWNED)
Hurstway Investment Company Limited

Property Trading

Registered Office: Mountview House, 151 High Street, Southgate, London, N14 6EW
Registered in England 344034

Louise Goodwin Limited

Property Investment

Registered Office: Mountview House, 151 High Street, Southgate, London, N14 6EW
Registered in England 691455

A.L.G. Properties Limited

Property Investment

Registered Office: Mountview House, 151 High Street, Southgate, London, N14 6EW
Registered in England 508842

4. BOARD OF DIRECTORS
The names of the current Directors, along with their details, are set out on page 15 and are incorporated into this report
by reference. Mr A.W. Powell became the acting Non-Executive Chairman on 31 March 2019 and subsequently his
appointment as Non-Executive Chairman was confirmed on 19 November 2019.

5. APPOINTMENT AND RETIREMENT OF DIRECTORS
The appointment and retirement of Directors is governed by the Company’s Articles of Association, the 2018 Corporate
Governance Code, the Companies Act 2006 and related legislation. Further details are set out in the Corporate Governance
section on page 28.

The Board has power to appoint an additional Director to fill a casual vacancy amongst the Directors. Any such Director
holds office until the next AGM and may offer himself/herself for election. In accordance with the 2018 Corporate
Governance Code all Directors will seek re-election at the 2020 AGM.

6. SHARE CAPITAL
The authorised share capital of the Company as at 31 March 2020 was £250,000 divided into 5,000,000 Ordinary Shares
of 5p, of which 3,899,014 were in issue (2019: 3,899,014). As at 9 July 2020, there has been no change in the issued share
capital.

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.

There are no restrictions concerning the transfer of shares in the Company, no special rights with regard to control attached
to the shares, no agreements between holders of shares regarding transfer known to the Company and no agreement
which the Company is party to that affects its control following a takeover bid.

Changes to the Company’s Articles of Association must be approved by shareholders in accordance with the Articles of
Association and legislation in force from time to time.

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Directors’ Report (Continued)

7. NOTIFIABLE INTERESTS IN SHARE CAPITAL
As at 9 July 2020, 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 Chapter 5 of Disclosure Guidance and Transparency Rules:

Mr Phillip Wheater, Mr David Wright and Mr Alistair Sinclair, Trustees of the Frank and
Daphne Sinclair Grandchildren Settlement*
Mr C. Murphy**
Mrs M.A. Murphy** including:
• BBTJ 400,000

• ALFL Ltd 79,350
Mrs E. Langrish-Smith**
Mrs A. Williams**
Mrs S. Simkins**
Talisman Dynamic Master Fund Ltd*

* Denotes indirect holding.

** Denotes combined direct and indirect holding.

Ordinary
Shares of 5p
each

% of Issued
Share
Capital

393,193
117,143

596,745
307,000
139,075
148,220
221,937

10.08
3.00

15.31
7.87
3.57
3.80
5.69

8. VIABILITY STATEMENT
The Directors have assessed the viability of the Group over the three year period to 31 March 2023. The Directors
conducted this review taking account of the Group’s current position, longer term strategy, principal risks and future plans.

A three year period is considered appropriate for the assessment as it corresponds with the Group’s internal planning
period and, in addition the term of the debt facilities supports an assessment over this period.

The strategy of the business is set at Group level and is reviewed throughout the year at Board meetings in the light of
market conditions and investment opportunities. This strategy is based on a tight focus on 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 principal operational risks faced by the Group and their
mitigation are described in the Review of Operations on pages 9 to 11. The Group’s Financial Risk Management Objectives
and Policies are shown in Note 3 on pages 58 and 59 Notes to the Consolidated Financial Statements. The consolidated
risk register is maintained by the Audit and Risk Committee as described in the Report of the Audit and Risk Committee on
page 32.

In assessing viability, the Directors considered the principal risks (see pages 9 and 11) in severe but plausible scenarios,
their potential impact and how to manage them. In the current year this specifically included scenarios reflecting different
durations and impacts of Covid-19 and the Government’s restrictions in relation to the lock down.

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 Group will be able to continue in operation and meet its liabilities as they fall due over the
three year period used for the assessments. The Directors consider the following factors to be key to this assessment:

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

if needed

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

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

market conditions

• Contingency and succession planning to cover the unexpected absence of key members of staff is ongoing.

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 Group 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.

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9. ENVIRONMENTAL MATTERS AND SOCIAL/COMMUNITY ISSUES
Given the size of the Group and the nature of its business as a property trading company, the Group 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.

10. GREENHOUSE GAS EMISSIONS DISCLOSURE
INTRODUCTION

The directors of Mountview Estates P.L.C are required to report its energy consumption and greenhouse gas (GHG)
emissions as part of its Annual Report and Accounts, in accordance with the Companies (Directors’ Report) and Limited
Liability Partnerships (Energy and Carbon Report) Regulations 2018, also known as Streamlined Energy and Carbon
Reporting (SECR).

Mountview engaged EcoAct Ltd (EcoAct), formerly Carbon Clear Ltd, to calculate its energy consumption and carbon
footprint for the reporting period of 1 April 2019 to 31 March 2020.

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EcoAct’s scope of work was to:

• Define the reporting boundary and collect the required data;

• Calculate Mountview’s energy consumption and carbon footprint;

• Report the results.

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

EXECUTIVE SUMMARY

Total gross GHG emissions in the reporting period were 80.9 tCO2e, which can be attributed as follows:

• Direct Emissions (Scope 1) 44.0 tCO2e or 54% of the total
•

Indirect Emissions (Scope 2) 22.5 tCO2e or 28% of the total
Indirect Other Emissions (Scope 3) 14.4 tCO2e or 18% of the total.

•

The results are presented below:

Figure 1: Total Emissions Broken Down by Activity and Scope
Type of Emissions
Direct (Scope 1)

Activity

Natural Gas
Company Owned Vehicles
Subtotal

Indirect (Scope 2)

Indirect (Scope 3)

Electricity
Subtotal

WTT (All Scopes)
Subtotal
TOTAL (tCO2e)

tCO2e
17.2
26.8
44.0

22.5
22.5

14.4
14.4
80.9

% of Total

21%
33%
54%

28%
28%

18%
18%
100%

Under the Mandatory Greenhouse Gas Regulation, a company is required to report its scope 1 and 2 emissions. It is not mandatory to report scope 3
emissions.

An operational control boundary was used to calculate Mountview’s carbon footprint.

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Directors’ Report (Continued)

10. GREENHOUSE GAS EMISSIONS DISCLOSURE CONTINUED
Figure 2: GHG Emissions (tCO2e) by Activity (2019-20)
30

22.5

26.8

14.4

17.2

Electricity

Company Owned
Vehicles

Well To Tank
(WTT)

Natural Gas

Figure 3: Emissions Intensity Metrics

Figure 3 shows a year-on year comparison of emissions intensities using revenue and number of FTEs as normalisation
factors:

Intensity Metric
Total Emissions (tCO2e)
Revenue (£’mil)
Number of employees
tCO2e per employee
tCO2e per £’mil turnover

2019/20
80.9
64.9
29
2.8
1.25

2018/19

% Change

89.5
65.4
29
3.1
1.37

-9.6%
-0.8%
0.0%
-9.6%
-8.8%

Total emissions normalised by the number of employees decreased by 9.6%, in line with the equivalent decrease in overall
emissions, whereas total emissions per million £ of turnover, decreased by 8.8%.

YEAR-ON-YEAR ANALYSIS

Emissions produced by Mountview have decreased by 9.7% compared to last year from, 89.5 tCO2e to 80.9 tCO2e.

Scope 1 emissions have decreased by 7%, from 47.3 to 44.0 tCO2e compared with the previous reporting year. This is due to:

• Emissions from company-owned vehicles have decreased by 14.9%. This is mainly driven by a decrease in annual

mileage of 9%.

• A 8.3% increase in natural gas consumption at the office.

Scope 2 emissions have decreased by 13.9% compared to the previous reporting year. This can be attributed to:

• A 10% decrease in the emission factor for UK grid electricity.

• An overall 5% decrease in electricity consumption. 5% at the office and 7% reduction in estimated electricity

consumption in the managed flats.

Emissions from electricity accounts for 27.8% of Mountview’s overall carbon footprint. In addition to its head office,
Mountview are also responsible for electricity use in the communal areas of 24 managed blocks of flats. Emissions have
been estimated for these flats using the following assumptions:

• The company pays an average £37 electricity charge per managed flat towards communal areas.

• The company covers communal area charges for 24 properties.

• The average electricity standard rate is 16.9p/kWh. This is based on the average price of electricity purchased by

non-domestic consumers in the UK with “very small” properties, for the last 3 quarters of 2019.

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REFERENCES

The following sources have been used for the completion of this document:

•

‘UK Government GHG Conversion Factors for Company Reporting’ for 2019, released by Department for
Business, Energy and Industrial Strategy and Department for Environmental Food and Rural Affairs, as found in
https://www.gov.uk/government/publications/greenhouse-gas-reporting-conversion-factors-2019.

‘Prices of fuels purchased by non-domestic consumers in the UK’, Table 3.4.2, March 2020, Department for Business,
Energy & Industrial Strategy, as found in https://www.gov.uk/government/statistical-data-sets/gas-and-electricity-prices-
in-the-non-domestic-sector.

CLIMATE CHANGE:

As an asset owner and manager Mountview sits at the top of the investment chain and uses this position to influence those
that we work with in relation to factors such as air pollution and energy uses. We do this in a number of ways including:

• Using local contractors wherever possible to reduce travel needed

• Converting lighting to ‘eco-lamps’ where possible

• We have obtained an Energy Performance Certificates (E.P.C.) for over 80% of properties in our portfolio and in so doing
we have undertaken, where necessary, loft insulation, cavity wall insulation, provision for storage heaters and dual plate
power meters

In conjunction with our external advisers, we continue to monitor developments in relation to Climate Change.

11. EMPLOYEES
Notwithstanding that the Group’s strategy, business model and operations are long established with well developed
underlying processes that reflect our business drivers, the performance of the business could not be sustained without
a strong, skilled and knowledgeable workforce who enjoy their work at Mountview. This is manifested in one statistic in
particular which is the average time in role of our staff – which currently stands at over 10 years. The Group has family
roots and it is our belief that a similar feel remains today within what is a small and highly skilled workforce of 24 staff plus
the Directors. This is an environment in which every member of staff meets and talks with one or both of the Executive
Directors, if not on a daily basis then on a weekly basis. In view of the size of the Group and the regular contact with all staff,
more formal means of employee engagement are not considered appropriate at this time. This matter will be kept under
regular review.

This regular contact fosters an environment in which staff can air concerns. It is also the case that staff know that if there was
any matter that they felt might be sensitive to raise within the operational side of the business that they can approach any of
the Non-Executive Directors (NEDs) to discuss the matter.

In this regard the Group has policies on whistleblowing and related policies on bribery, gifts, conflicts of interest and related
matters that are included in the staff manual, explained to new staff on joining and are reviewed annually for continued
suitability by the Audit and Risk Committee who report to the Board on this matter.

It is a standing item on the Board agenda to report, receive a report on and consider any reporting made under these
provisions – and during 2019-20 no incidents were reported.

TRAINING:

The Group provides regular training related to the use of computer software and for the general professional development
of the staff concerned. For example we provide appropriate training when there are developments in relevant legislation,
regulation or practice.

We encourage all of our staff to continue their education and support staff following courses aimed at gaining professional
qualifications.

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Directors’ Report (Continued)

12. DIVERSITY
Mountview is committed to employing and retaining a skilled workforce with a diversity of qualifications and talents from
a variety of backgrounds. Whilst Mountview does not have a formal diversity policy, the company is committed to equal
opportunities for all and that recruitment and selection be strictly on the basis of merit and ability.

As at 31 March 2020, the Group had one female Executive Director, Mrs Marie Bray, who has been on the Board since 2004,
and one female Non-Executive Director, Ms Mhairi Archibald, who has been on the Board since July 2014. Female Board
membership represented 40% of the Board.

The Group has seven Senior Managers (who are not Directors), three of whom are female.

Of the 29 total employees in the Group, 11 are male and 18 are female.

13. SIGNIFICANT AGREEMENTS
Certain banking agreements to which the Group is a party (described in Note 18 to the Consolidated Financial Statements)
alter or terminate upon a change of control of the Group following a takeover bid.

There are no other significant agreements to which the Group is a party that take effect, alter or terminate upon a change of
control of the Group following a takeover bid.

There are no contractual or other agreements or arrangements in place between the Group and third parties which, in the
opinion of the Directors, are essential to the business of the Group.

14 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 Group’s business.

15. 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.

16. CORPORATE GOVERNANCE
The Directors’ statement on Corporate Governance is set out on pages 26 to 30.

17. HEALTH AND SAFETY
The Group is committed to achieving a high standard of health and safety. The Group regularly reviews its health and safety
policies and practices to ensure that appropriate standards are maintained. The gas supply and appliances within all of the
Group’s relevant residential properties are independently inspected under the Gas Safety (Installation and Use) Amended
Regulations 1996 and certificates of compliance obtained. Similarly there is a regular programme of electrical inspection
which is due to cover all of our properties by April 2021, and fire and health and safety inspections. Where these reviews
highlight actions that are needed by either the Group or the tenants we undertake that work or facilitate the work being
done by the tenants.

18. 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 on page 8.

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.

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19. AUDITORS
Messrs BSG Valentine (UK) LLP have indicated their willingness to continue in office and a resolution for the reappointment
of BSG Valentine (UK) LLP as Auditors for the ensuing year will be proposed at the AGM.

20. AUDITORS AND DISCLOSURE OF INFORMATION TO THE AUDITORS
So far as each Director is aware, there is no relevant audit information of which the Company’s Auditors are unaware.

Each Director has taken 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.

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21. RELATIONSHIP AGREEMENT
In accordance with the UK Financial Conduct Authority’s Listing Rules (the 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 the 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 over 50% of the Company’s voting rights, the cumulative holdings reflect a reduction from the corresponding
figure as at 31 March 2019 as a result of a disposal of certain interests.

The Board confirms that, since the entry into the relationship agreement as at 9 July 2020, 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.

22. GENERAL MEETING
At the AGM held on 7 August 2019, the resolutions concerning the re-election of both Mr A.W. Powell and Mrs M. L. Jarvis
(now Archibald) as directors of the Company did not receive support of a majority of the independent shareholders who
voted, which is now a requirement of the Listing Rules where the Company has a controlling shareholder, and therefore Mr
Powell and Mrs Jarvis stood for re-election at a general meeting held on 18 November 2019 (General Meeting). Both Mr
Powell and Mrs Jarvis were re-elected at the General Meeting. Between the 2019 AGM and the General Meeting certain
Board members met with a number of major shareholders. All shareholders (including the Sinclair family concert party
members) were entitled to vote on the resolutions to re-elect Mr Powell and Mrs Jarvis at the General Meeting.

As reported through the RNS market information system, following the 2019 AGM and prior to the General Meeting , the
Company identified as far as possible those shareholders who did not support the various resolutions and attempted to
engage with them to seek their views. They declined to meet or engage. The Company remains committed to shareholder
engagement and we will continue to offer to meet with shareholders to take into account their concerns and considerations
in the future.

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Directors’ Report (Continued)

23. GENERAL MEETING – 2020 AND THE IMPACT OF COVID-19
At the time of publication of this report there is the risk associated with holding a physical AGM during the time of
social distancing and the various other provisions that follow from Covid-19. We are monitoring the announcements by
Department of Business, Energy and Industrial Strategy, Financial Conduct Authority and the Financial Reporting Council
and others on this matter and are following their advice when taking decisions on holding physical meetings – starting
with, but not limited to the current year’s AGM. The current situation following the enactment of the Corporate Insolvency
and Governance Act 2020 (CIGA) supports the previous guidance and this, together with the continuing risk of rapid and
localised ‘lockdowns’ means that your Board has taken the decision that a conventional AGM is not practical in the current
year. The alternative arrangements for the AGM, including asking questions and voting are set out in the Notice of Meeting
in pages 89 to 94.

The Directors’ report was approved by the Board on 9 July 2020 and is signed on its behalf by:

M.M. Bray
Company Secretary
9 July 2020

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Statement of Directors’ Responsibilities

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

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

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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 corporate and financial information on the
Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.

The Directors consider that the Annual Report and Financial
Statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary
for shareholders to assess the Group’s and the Company’s
position, performance, business model and strategy.

Each of the Directors, whose names and functions are
set out on page 15, confirms 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
9 July 2020

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Corporate Governance

2018 UK CORPORATE GOVERNANCE CODE
The Company applies the principles and complies with the provisions set out in the 2018 UK Corporate Governance Code
(the Code) as issued by the Financial Reporting Council (FRC), a copy of which can be found at www.frc.org.uk/corporate/
ukcgcode.cfm. For the year ended 31 March 2020 we complied with provisions of the Code except as disclosed in this
section.

As a Board we take our responsibilities in relation to corporate governance very seriously, seeking to implement
governance processes that reflect both the prevailing Code and the Company’s circumstances and structure. Following
the introduction of the 2018 Code it has been a regular agenda item for the Board as we explore the steps that we may
take to meet the principles and provisions of the Code. Last year we adopted a number of the recommendations including
asking all Directors to stand for re-election. This year with the ongoing support of Prism Cosec, our corporate governance
consultants, and our other advisers we have continued to strengthen our governance processes and reporting. We are
mindful that our structure, which has evolved through our history and is aligned with our culture and values, is not fully
compliant with some of the measures in the Code.

Taking account of the Code in the context of our size, our shareholdings and the nature of our operations where we have
a focused, stable and enduring strategy, and stable workforce and suppliers, we have looked at each of the principles
and provisions of the Code to consider the spirit behind them as well as the actual wording used. We are of the view that
throughout we are operating within the spirit behind the principles of good corporate governance – in a manner that is
appropriate to our business, our size and our economic footprint. In particular, as a small Board, we recognise that there
are matters concerning the size and composition of the Board that fall into this category. The Board and also shareholders,
when consulted, are at one with their view that new Board positions should be created only when there is a clear need
and when the appointee will add capacity or skills that are needed by the business in order for it to continue to pursue its
strategy.

Below we note the areas where we believe we comply with the spirit of the Code but do not currently adhere completely
to the detailed requirements. These matters are kept under constant review as a whole, by the Board. Should there be
a material change in the Company’s strategy, business model or structure then these points would be re-visited and,
after consulting with shareholders on proposals, we would make such changes as are appropriate given the changed
circumstances.

INDEPENDENT NON-EXECUTIVE DIRECTORS (NEDS): (SECTION 2 PROVISION 11)

The number of independent NEDs is currently less than at least half the Board as required by the Code. This is a matter
which the Board and the NEDs have reviewed in the context of the skills needed either directly on the Board or indirectly
through advisers and concluded that given the size of the Company and the stable nature of its strategy, business model
and operations, the current composition, with two independent NEDs and three NEDs in total supported by external
advisers, is appropriate.

APPOINTMENT OF A SENIOR INDEPENDENT DIRECTOR (SID): (SECTION 2 PROVISION 12)

Currently other than the Chairman, the Company has one Independent NED and the Board has concluded that it is too
small to merit the appointment of a SID.

COMPOSITION OF COMMITTEES IN GENERAL: (SECTION 3)

The Board is small and thus the composition of each of the Committees is limited by the available pool of Directors.
As noted above, should it be concluded that appointing further Independent NEDs was appropriate and would bring value,
then composition of Committees would be reviewed.

ROLE CONCURRENCE – AUDIT COMMITTEE: (SECTION 4 PROVISION 24)

The Chairman of the Board is also the Chairman of the Audit and Risk Committee. The Board consists of 60% Accountants
and the Board has determined that there is no need to appoint a further NED with financial experience. The Board, and
separately the NEDs, have considered the Chairman’s role on the Audit and Risk Committee and are firmly of the view that
this combined role continues to be in the best interests of the Company for the time being and will review the situation on a
regular basis.

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INTERNAL AUDIT FUNCTION (SECTION 4 PRINCIPLE M AND PROVISIONS 25 AND 26)

At present the size of the business does not warrant a full time internal audit function. As discussed in the Report of the
Audit and Risk Committee this is kept under constant review and options for cover are reviewed annually in the light of the
size and complexity of the business.

CONCERT PARTY

Mountview Estates PLC is a family-controlled company. There is a concert party in existence, whose net aggregate
shareholdings amount to over 50% of the issued share capital of the Company. Further details are available in Note 21 of
the Directors’ Report.

THE BOARD
LEADERSHIP AND ROLE OF THE BOARD

The role of the Board is to provide leadership to the Group, ensuring that the necessary financial and human resources
are in place to enable the Group to meet its objectives. In addition, the Board ensures that there are appropriate financial
and business systems and controls in place to safeguard shareholders’ interests and maintain an appropriate and effective
governance framework. The Board operates in accordance with the Company’s Articles of Association and there is a
Schedule of Matters Reserved for Board Decision which includes approval of strategy, budgets, financial reports, public
announcements, significant acquisitions of property, major capital expenditure, funding and dividend policy. In addition the
Board reviews and approves matters related to the operation of the Board and its Committees, and, where material, any
new or significantly amended operational or staff policies.

The Code requires that there should be a clear division of responsibilities between the roles of CEO and Chairman,
both roles being separate and distinct. The Chairman is responsible for leading the Board and ensuring its effectiveness,
including the Board’s decision making process, building a constructive relationship between Executive and Non-Executive
Directors, and, for fostering open debate with an appropriate balance of challenge and support. The CEO is responsible for
leading the development and execution of long term strategies of the business and has specific responsibilities in relation
to all matters to do with property purchase and sale.

THE EXECUTIVE DIRECTORS

Day-to-day management is delegated to the Executive Directors with focus on major transactions, business growth,
strategy, cash management and control. There is regular communication with the NEDs in order to keep them informed
about the Group’s operations. This is done via a schedule of regular meetings throughout the year supplemented by ad hoc
meetings as needed to address specific matters arising.

The Group has seven Senior Managers reporting to the Executive Directors. There are six core departments – Accounts,
Property Management, Property Trading, Rent, IT and Administration – with staff reporting either to the Property Managers
and/or directly to the Executive Directors.

THE NON-EXECUTIVE DIRECTORS

The role of the NEDs, as described in their letters of appointment, is to bring independent and objective judgement and
scrutiny to all matters before the Board and its committees. During the appointment process steps are taken to confirm that
they will have the time needed to meet their responsibilities to the Group.

Throughout the year the NEDs hold meetings periodically without the Executive Directors including meetings to discuss
remuneration of the Executive Directors and to meet with the external Auditor to discuss the audit of the Annual Report
and Accounts.

The Code requires (for smaller companies) there to be at least two independent NEDs. Mr A.W. Powell and Ms M.L.
Archibald are deemed to be independent NEDs, meeting this requirement. Dr A.R. Williams is a NED but he is not
considered to be independent for the purposes of the Code.

At present the Board does not intend to appoint any Director to fulfil the role of SID, given the limited size of the Board, but
may decide to do so in the future.

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Corporate Governance (Continued)

GOVERNANCE FRAMEWORK

The Directors recognise their accountability as a Board to the shareholders for the effective stewardship of the Group and
its strategy, operations, governance and control. In this the Board are supported by three sub-committees whose roles and
current composition are:

The Audit and Risk Committee

This Committee is responsible for monitoring Mountview’s accounting policies and processes, audit arrangements and
for reviewing the risk management framework. It is also responsible for the clarity and completeness of the Company’s
disclosure to shareholders. The Committee is comprised of all the NEDs.

The Remuneration Committee

The Committee is comprised of all NEDs and is responsible for both setting remuneration policy and for the
implementation of that policy as regards the Executive Directors. NED remuneration is proposed by the Executive Directors
and determined by the Board.

The Nomination Committee

This Committee is responsible for reviewing the balance of experience, skills and knowledge on the Board, for
recommending any appointments to strengthen the Board’s expertise and for managing any re-appointments as needed.
All members of the Board are members of the Nomination Committee.

Further detail on the Terms of Reference of these Committees can be found on the Company’s website
(www.mountviewplc.co.uk). Reports of their activities follow later in this Annual Report and Accounts on pages 31 to 48.

Appointment of Directors The Articles of Association 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

• 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.

The Nomination Committee report on pages 47 and 48 describes the process currently used for identifying and appointing
new Directors to the Board.

In accordance with the Code, all members of the Board offer themselves for re-election each year as described in the notice
for the upcoming 2020 AGM and as set out in the Directors’ Report on page 17 and in the Notice of Meeting on page 90.

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THE WORK OF THE BOARD

The Board meets formally at least four times a year, with ad hoc meetings to discuss particular transactions and events
called as and when required. All Directors are expected to attend all meetings of the Board, and any committees they are
members of, and devote sufficient time to the Company’s affairs to fulfil their duties as Directors.

The Company Secretary sends out the agenda and supporting information to all members of the Board in advance of
Board meetings. Group strategy is proposed by the Executive Directors and that strategy is rigorously discussed, debated
and agreed by the Board. The NEDs work with the Executive Directors to deliver on the agreed strategy. The information
supplied to the Board and its committees is kept under review to ensure it is fit for purpose, and that it enables sound
decision-making.

In making decisions throughout the year, the Board is strongly aware of its responsibilities to the Company’s shareholders as
well as other stakeholders including managing possible conflicts of interest. Consideration of possible conflicts of interest
is a standing item for all Board meetings; any other areas of concern are addressed during regular management or Board
meetings.

All Directors have access to independent professional advice at the expense of the Group and to the services of the
Company Secretary who is responsible to the Board for ensuring the correct procedures are followed.

The Directors consider that the small size of the Group and the Board does not warrant a formal performance evaluation
process. However, performance of the Directors is evaluated on an ongoing basis by the Board. This is a matter continually
under review.

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Attendance at and number of Board and committee meetings is set out below:

Meetings

Full Board
Audit and Risk Committee
Remuneration Committee
Nomination Committee

Mr A.W.
Powell

Mr D.M.
Sinclair1

Mrs M.M.
Bray1

Ms M.L.
Archibald

Dr A.R.
Williams2

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5
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2

6
6
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2

5
5
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2

1. Mr D.M. Sinclair and Mrs M.M. Bray were invited to attend 5 Audit and Risk Committee Meetings and 2 Remuneration Committee Meetings

2. Dr A.R. Williams was unable to attend 1 Board meeting and 1 Audit and Risk Committee meeting.

RISK MANAGEMENT AND INTERNAL FINANCIAL CONTROL
The Board has overall responsibility for risk management and the Audit and Risk Committee is specifically charged with the
governance of the risk management, internal control and audit processes. The Board has carried out a robust assessment of
the Principal Risks faced by the Group which are set out on pages 9 to 11 and more detail on the function of the Audit and
Risk Committee is set out on pages 31 to 34.

Details of the Company’s financial risk management objectives and policies are included in Note 3 to the Consolidated
Financial Statements on pages 58 and 59.

An ongoing process for identifying, evaluating and managing the significant operational risks faced by the Group was in
place throughout the period from 1 April 2019 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 the group and meet the
particular needs of the 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. As noted on page 27, 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, as well as emerging
risks, faced by the Group. The principal risks and uncertainties faced by the Group are set out in the Review of Operations
on pages 9 to 11 together with mitigating factors for each risk.

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Corporate Governance (Continued)

Management structure – The Board has overall responsibility for the Group and, as described on page 27, 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, the regular day to day contact between the Executive Directors and staff, and close Board supervision.

Monitoring – Internal financial control procedures are monitored and 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.

The Board is satisfied that the control procedures are adequate to provide accurate information and safeguard the assets of
the Group.

EMPLOYEE AND OTHER STAKEHOLDER ENGAGEMENT
Discussion of employee engagement is in the Directors’ Report, section 11 on page 21 and a description of our
engagement with other stakeholders is presented in our Section 172 Statement on page 12.

REMUNERATION
This is covered in the Remuneration report set out on pages 35 to 46.

By Order of the Board

M.M. Bray
Company Secretary
9 July 2020

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Report of the Audit and Risk Committee

MEETINGS

Committee Member

Mr A.W. Powell - Chair
Ms M.L. Archibald
Dr A.R. Williams1
Non Member
Mr D.M. Sinclair2
Mrs M.M. Bray2

Meetings
Attended

Meetings
eligible to
Attend

6
6
5

5
5

6
6
6

5
5

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1. Dr A.R. Williams was unable to attend one meeting.

2. Mr D.M. Sinclair and Mrs M.M. Bray were invited to attend 5 Audit and Risk Committee meetings.

Dear Shareholder,

I am pleased to present the Audit and Risk Committee Report for the year ended 31 March 2020. The Board considers
that I have recent and relevant financial experience as recommended under provision 24 of the Code as it applies to the
Company for the financial year under review. In line with the Code, the Audit and Risk Committee (the Committee) as a
whole is deemed to have competence relevant to the sector in which the Company operates.

The Committee plays a vital role in ensuring that the interests of the shareholders are protected and in assisting the Board
in discharging its responsibilities by challenging the integrity of the financial statements, in reviewing the effectiveness of
the internal controls systems within the Group and in considering the scope of the annual audit and the extent of the non-
audit work undertaken by the external auditor.

This report details the activities of the Committee that were undertaken during the year to 31 March 2020.

ROLE OF THE AUDIT AND RISK COMMITTEE
The Committee’s principal roles and responsibilities, as set out in its terms of reference (which can be found on the Group’s
website at www.mountviewplc.co.uk), include:

• monitoring the integrity of the Group’s financial statements;

•

reviewing the tone and content of the Interim Report, the Annual Report and Accounts and any associated regulatory
news announcements;

•

reviewing the Group’s internal financial controls and risk management systems;

• assessing the performance and independence of the external Auditor, including the application of our policy on non-

audit services

• selecting the external Auditor and making appropriate recommendations through the Board to permit shareholder

consideration at the Annual General Meeting;

• assessing the effectiveness of the external audit process;

• acting as a conduit between the Board and the external Auditor;

• considering the need for an internal audit function;

•

reviewing any incidents of whistleblowing occurring within the Group and ensuring adequate review and investigation;
and

•

reporting to the Board on how it has discharged its responsibilities.

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Report of the Audit and Risk Committee

(Continued)

ACTIVITIES OF THE COMMITTEE
During the year the Committee met on six occasions, including meetings prior to the issue of the preliminary and interim
results to review audit planning and then audit recommendations, where appropriate, and consider any significant issues
arising from the audit and review process. At a meeting in March 2020 the Committee agreed the external audit terms of
engagement and the Auditor’s scope, proposed approach and fees for the annual audit for the financial year 1 April 2019 to
31 March 2020.

Outside of the formal meeting programme, as Committee chairman I stay in contact with key individuals involved in the
Company’s governance, including the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), the external audit
lead partner and other external advisers.

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 are fair, balanced and
understandable.

The Committee has also been monitoring the impact of Covid-19 on both the Group’s operations and also on the conduct
of the audit. Both these aspects are described more fully below.

KEY AREAS FORMALLY DISCUSSED AND REVIEWED

Principal Responsibilities of the Committee

REPORTING AND EXTERNAL AUDIT
• Monitoring the integrity of the Company’s financial statements
and all formal announcements relating to the Company’s
financial performance, reviewing financial reporting judgements
contained within them

Key areas formally discussed and reviewed by
the Committee during the year

• Results, commentary and announcements

• Key accounting policy judgements, including valuations

•

Impact of future financial reporting standards

• Going concern and long term viability with particular attention to

Covid-19

• Making recommendations to the Board regarding approval

• External Auditor effectiveness

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

VALUATIONS
• Monitoring and reviewing the valuation process for the

investment properties

• Valuer competence and 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 (last

tendered in 2017)

• Annual report on the effectiveness of the valuer which considers

the quality of the valuation process and judgement

• Challenge the Executive in respect of both the independent
external valuations and Directors’ valuations across the entire
property portfolio

RISK AND INTERNAL CONTROL
• Reviewing the principal risks and uncertainties, including those

that could affect solvency or liquidity, future performance and
its business model

• Maintenance of the Risk Register including identifying and then
making a robust assessment of the principal risks facing the
Group

• Reviewing the risk management disclosures on our approach to

• Review of risk disclosures as part of review of accounts

risk in the Annual Report and Accounts

OTHER
• Reviewing the Committee’s Terms of Reference and monitoring

its execution

• Reviewed and confirmed the Terms of Reference; execution and
effectiveness monitored through a progress table and externally
sourced questionnaires

• Considering compliance with legal requirements, accounting

• Reviewed processes for monitoring new relevant regulation,

standards and the Listing Rules

including discussion with external advisers

• Reviewing the whistle-blowing policy and operation and related

• Review of whistle-blowing arrangements as set out in staff

policies including the anti-bribery and gift policy

manual. Confirmation from CFO that there have been none
during the year

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EXTERNAL AUDIT
Audit tenure: – Following best practice and in accordance with its Terms of Reference, the Committee annually reviews
the audit requirements of the Company and suitability of the auditor. BSG Valentine (UK) LLP has been the Group’s auditor
since 2007 and was re-appointed following a formal tender process in 2017. Current UK regulations require rotation of
the lead audit partner every five years, a formal tender of the audit every ten years and a change of auditor every twenty
years. Norman Strong, who took over as lead partner for 2019 following the departure of Daniel Burke has retired from BSG
Valentine and the 2020 Audit Report will be signed off by Gary Allen who was the Audit Director for the audit in 2019 and
thus is familiar with the Group. The Committee wishes to thank Norman for his work in connection with the Mountview audit
over the years of BSG Valentine’s tenure as auditor.

Objectivity and independence: – These aspects are critical to the integrity of the Group’s audit. Prior to the planning
meeting the Committee reviewed the auditor’s own policies and procedures concerning objectivity and independence,
including reviewing their Transparency Report found on their website. We also confirmed that the auditor’s evaluation and
remuneration processes did not contain incentives for cross-selling.

Planning and contact: – Prior to the audit the Committee, together with the Executive Directors, met with the external
auditor BSG Valentine to review their proposals for the audit and agreed their terms of engagement, their proposed
approach and their fees for the audit. The Committee is confident that appropriate plans were put in place to carry out an
effective and high quality audit. BSG Valentine re-confirmed to the Committee during the meeting that they maintained
appropriate internal safeguards to ensure their independence and objectivity.

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Effectiveness of the external audit process – The Committee appraised BSG Valentine’s performance and independence
by assessing their audit plan, the quality and consistency of their team and their reports. The Chairman was in contact with
the audit team, during the audit to discuss progress and any issues arising from the audit. In addition, we received feedback
from Mountview’s finance team who noted that BSG Valentine were professional and constructive while maintaining their
independence and robustness when carrying out their work.

At the conclusion of their work the Committee met with the external auditor to discuss their audit findings, including
recommendations for financial reporting improvement and their management letter containing observations arising from
the annual audit. The discussion also covered the application of materiality and adjusted and unadjusted audit differences.
No such differences were identified during the current or prior year’s audit.

Re-appointment – Based on their review the Committee believes BSG Valentine remains effective in its role and, BSG
Valentine having indicated their willingness to be reappointed as the Group’s external auditor, the Committee has
recommended to the Board that they be appointed for another year. A resolution to this effect will be proposed at the
AGM.

Non-audit services – The Group’s policy requires that all non-audit fee work is reported to the Committee and the
Committee can confirm that this policy was adhered to. As in prior years BSG Valentine provided permitted tax compliance
services. The Committee consider that these services were in the category of allowed services under the applicable Ethical
Standards and has concluded that the auditor’s objectivity and independence were safeguarded. The fees paid to BSG
Valentine are shown in Note 6 to the Accounts.

INTERNAL AUDIT
The need for a dedicated internal audit function was reviewed by the Committee during the year and was not felt to be
necessary given the size and relatively simple structure of the Group and its operations, the close day to day involvement of
the Executive Directors and the internal control procedures in place. This is kept under regular review. The Committee has
the power to commission assurance work from time to time as it sees fit.

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Report of the Audit and Risk Committee

(Continued)

VIABILITY STATEMENT AND GOING CONCERN
The Committee provides advice to the Board on the form and basis underlying both the going concern and the longer-term
viability statement. The Covid-19 pandemic clearly could have an impact on both these statements in particular in relation
to its impact on the operation of the property market – crucial for the sale of vacant properties. This aspect was kept
under regular review in relation to both the current state of the market and expectations by informed commentators of the
longevity of the impact of the virus. The Committee are satisfied that while the virus has clearly had an impact on the market
that, at the date of signing this report, this has not been at a level or with an effect to seriously damage the validity of either
statement.

Thus, the Committee concluded that it remains appropriate for the financial statements to be prepared on a going concern
basis and recommended the viability statement to the Board.

The Company’s going concern statement can be found on page 22. The viability statement can be found on page 18.

SIGNIFICANT ISSUES CONSIDERED IN RELATION TO THE FINANCIAL STATEMENTS
Significant issues and accounting judgements are identified by the finance team and the external audit process and are
considered and reviewed by the Committee. The significant issues considered by the Committee in respect of the year
ended 31 March 2020 are set out in the table below:

Issues

How the issues were addressed

The impact of Covid-19

Valuation of investment
property portfolio

Net realisable value of the
trading property portfolio

This pandemic affected all areas of Company activity at the end of the financial year and into the new
year. The Committee, in conjunction with the other directors, had input into the notes on pages 9 to
11 and page 14 on the impact of the virus on the business. In addition the virus had an impact on the
running of the audit – given social distancing requirements and thus the Chairman had more frequent
contact with the auditor before and during the audit to discuss and consider the impact on audit quality.
The Committee were satisfied that arrangements put in place were appropriate in the circumstances and
specifically in light of the evolving guidance from the FRC, FCA, BEIS and others. Finally, as discussed
above, the Committee considered the impact of Covid-19 on the going concern and viability statements.
The Committee discussed the valuation with the valuers independently of management. This provided
the opportunity for the valuers to explain the process they follow to value the portfolio and for the
Committee to challenge the key assumptions. On the basis of this discussion the Committee concluded
that the valuations were independent and an appropriate basis for the year-end financial accounts,
including Allsop’s caveat concerning the uncertainty arising due to Covid-19 as described in note 13 to
the accounts.
The Committee’s consideration of this aspect focused on the more recent purchases which have the greatest
risk and included reviewing the processes used by the property team to assess values and hence consider
the need for a provision. On the basis of these discussions the Committee was satisfied that the valuation
was in line with the accounting policy for trading properties, thus there was no need for any provision.

The Committee also considered a number of other judgements made by management, none of which were material in the
context of the Group’s results or net assets.

KEY ISSUES FOR 2020/21
The Committee is always looking at ways to strengthen its support around governance to ensure that the Company’s
communications and processes are in line with good practice in this area. For 2020/21 this will continue to include
monitoring evolving best practice under the Code and other regulations. In addition we will continue to monitor the key
areas of judgement that are recurring matters and specifically the Company’s response to the evolving Covid-19 pandemic.

A.W. Powell
Chairman of the Audit and Risk Committee
9 July 2020

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Remuneration Report

MEETINGS

Committee Member

Ms M.L. Archibald – Chair
Mr A.W. Powell
Dr A.R. Williams
Non Member
Mr D.M. Sinclair1
Mrs M.M. Bray1

Meetings
Attended

Meetings eligible
to Attend

3
3
3

2
2

3
3
3

2
2

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1. Mr D.M. Sinclair and Mrs M.M. Bray were invited to attend part of 2 Remuneration Committee meetings and were not present for discussion concerning

the process of determining their awards or the amount of those awards.

Dear Shareholder,

On behalf of the Remuneration Committee and the Board, I am pleased to introduce our 2020 Remuneration Report for
which we are seeking your support at our AGM on 12 August 2020. As described more fully below, the report this year
also incorporates a proposed updated Remuneration Policy that, if approved, will apply for the three years commencing
2020/21.

ROLE OF THE REMUNERATION COMMITTEE
The goal of the Remuneration Committee is to independently formulate and apply remuneration bases that align the
interests of our Executive Directors with those of our shareholders, and are fair and transparent in execution.

The role of the Remuneration Committee is set out in our terms of reference which can be found on the Company’s website
at www.mountviewplc.co.uk. The Committee have reviewed these terms of reference and confirmed that they remain
appropriate.

ACTIVITIES OF THE COMMITTEE

The main work of the Remuneration Committee in the current year has been the review and update of the Remuneration
Policy and the determination of the Executive Directors’ awards.

REVIEW OF THE REMUNERATION POLICY:

The current Remuneration Policy is due to expire during 2020 and accordingly we have carried out a review of the policy
and will be asking shareholders to approve the new policy at the AGM on 12 August 2020.

Our review was carried out in conjunction with FIT Remuneration Consultants LLP (FIT) and is described in more detail in the
main body of the report. FIT, who were appointed by the Remuneration Committee, provide no other services to the Group.
During the initial discussions prior to engaging FIT, the Remuneration Committee satisfied itself that FIT demonstrated
the necessary depth of knowledge for the agreed role and objectivity in providing answers to questions posed during that
discussion. FIT’s role was to help design the process to be followed and to provide expert input and comment on the areas
that needed consideration in the policy and the wider Remuneration Report as a whole given the changing regulatory
framework discussed below. They also reviewed the final draft of the Remuneration Report prior to publication. The total
fees paid to FIT for their assistance were £5,700

As a result of the Remuneration Committee’s review of the current policy we have a number of changes that we describe
below, and would like to draw attention to two points. First, that we have lowered the maximum amount for the short-term
incentives from 250% of base salary to 150%. Secondly, we have brought the pension contribution levels that could be made
for future directors (the current Executive Directors do not receive pension contributions) in line with the amount payable to
the workforce as a whole, though they can receive additional contributions through salary sacrifice.

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Remuneration Report (Continued)

EXECUTIVE DIRECTORS’ AWARDS:

The Committee’s other main work for the year concerned the remuneration of the Executive Directors applying the existing
policy which was clarified and approved by shareholders at the General Meeting held in November 2018 and has been in
effect from the date of its approval at the 2017 Annual General Meeting.

In considering the awards we were mindful of the impact that Covid-19 has had on the wider UK economy. For example,
in the current year many of the companies in the peer group in the past two years were in real estate sub-sectors that are
being severely impacted by Covid-19, reducing their comparability. In addition, as a result of transactions others previously
in the peer group are no longer separately quoted. Thus, while the Remuneration Committee did take note of data from
this group, we placed less weight on it than in prior years applying our own discretion when reaching decisions.

We were also cognizant that the pandemic was declared very close to the Company’s year-end, and thus had very little
impact on the financial results of the year under review. We have also seen, as noted elsewhere in this report, that through
the early months of the pandemic the Group has been able to continue to perform at a similar level to previous years.
Taking these factors into account, the Remuneration Committee did not believe that measures taken by others whose
financial results have been affected by the pandemic, including deferral of bonuses or salary, were appropriate.

In approaching the review of the bonus figures for the year, subject to the comment on peer group data, the Remuneration
Committee has adopted the approach used in prior years of taking account of financial metrics of the Group (primarily
profit before tax), non-financial factors and peer group and market benchmarks. Applying these principles to the year under
review year the bonus awards for the CEO and CFO were set at £447K and £308K respectively.

The Remuneration Committee has agreed to an increase in Executive Director salaries of 3.00% (effective 1 April 2020), in
line with the inflation increase for the Company’s general staff.

REGULATORY CHANGES
In carrying out their work during the year the Remuneration Committee’s members have had regard to the changing
regulatory environment around remuneration notably in the 2018 Code and legislation aimed at greater transparency and
disclosure of remuneration practices. Many of these requirements relate to Long Term Incentive Plan (LTI) or executive
pension arrangements which do not apply to the Group.

Other provisions emphasised matters that were already aspects of our policy and practice, for example, the application of
discretion or information disclosed where we have sought to align with the new requirements.

I would like to thank all those shareholders, advisers and others who have taken part in the consultation and review process
that prompted the changes noted above and which we hope you will support in the resolutions being put to members.

We are grateful to our Executive Directors and their continuing efforts to deliver the best results to shareholders in line with
our strategy in markets that remain difficult and are changing in light of the Covid-19 pandemic and economic fallout. I am
also thankful for the valuable contributions of my fellow Committee members throughout the year.

M.L. Archibald
Chairman, Remuneration Committee
9 July 2020

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THE NEW REMUNERATION POLICY
OBJECTIVES OF THE REVIEW:

As described elsewhere in this report, the strategy and business model of the Group are reviewed regularly with shareholders
and they continue to support both. With this in mind and also taking account of the evolution of governance and regulation,
the Remuneration Committee’s key objectives for the current Remuneration Policy review were to ensure that:

•

incentives remain aligned with the strategy;

• packages are competitive against our peer group;

• our Remuneration Policies are suitable to attract, motivate and retain the right talent; and

• our Remuneration Policies and practices are in line with evolving good practice including matters arising from the UK

Corporate Governance Code (Code) published in 2018.

In the conduct of the review process and the updated policy we have sought to reflect the characteristics outlined in
provision 40 of the Code as follows:

Clarity – we sought to engage with major shareholders during the review. The new policy with reasons for changes adopted
and suggestions not taken up have been discussed with our shareholders and directors.

Simplicity – as discussed further below, we have retained the simplicity of the current policy avoiding artificial or immaterial
metrics.

Risk – we have been mindful of the risk environment of the Group and aimed to ensure that the policy reflected but did not add
to that environment as could be the case with, for example, misaligned metrics that could encourage inappropriate risk taking.

Predictability – the Short-Term Incentive (STI) arrangements lead to a predictable range of outcomes, and are the subject
of a cap.

Proportionality – the policy is designed to lead to awards that blend the objectivity of financial metrics and subjectivity
involved in assessing non-financial performance.

Alignment to culture – the principles of rewarding individual performance and thus contribution to Group results are
reflected in remuneration structures throughout the Group.

OVERVIEW OF THE REVIEW:

The process we followed began with a consultation with the major shareholders to seek views on the current policy,
then review and update of the policy in conjunction with FIT, discussion of the proposed changes with the Executive
Directors, a further round of consultation with the major shareholders and then finalisation of the policy that is presented
in this Remuneration Report. While employees were not specifically consulted as a part of the review, the Remuneration
Committee did take into account the general pay and conditions that apply to the staff which are determined by the
Executive Directors with whom they work closely on a day to day basis.

Following from this process, as a part of the review the Remuneration Committee considered metrics that might be
appropriate for the short-term incentive. As noted elsewhere in this annual report, the Group’s drivers of their main source
of revenues and profit arising in the current year – sales on vacant possession – are beyond the control of the Group or
the Executive Directors. This is because these are in turn driven by factors that are outside the Group’s control: the timing
of vacant possession, the location and thus market price of properties disposed of, the original purchase date of the
properties sold and the appetite for the properties that are sold.

It is also the case that at a transaction level, the net proceeds are a function of the historic and current astuteness,
judgement and experience brought to bear when purchasing properties, setting of reserve prices and the pricing of those
sales being made by private treaty – all of which are ongoing activities firmly in the remit of the Executive Directors and their
teams. The Remuneration Committee considered that, while firmly of the view that there should be a clear link between the
Group’s financial results and the short term element of the remuneration of the Executive Directors, metrics that attempted
to link Executive performance with the current year’s profits would be unreliable and, at best, be artificial and, at worst, be
misleading and thus the Remuneration Committee concluded that the current approach continued to be appropriate.

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Remuneration Report (Continued)

The Remuneration Committee takes these factors concerning historical and current performance into account when
applying its judgement and discretion in the process for determining the short-term incentive payments as they are relevant
to the profits generated in any one year.

PROPOSED POLICY CHANGES:

As a result of the consultation and analysis carried out, the Remuneration Committee is proposing a number of policy
changes. Those relating to the components of Executive and Non-Executive Directors’ remuneration are noted in the tables
below. Other changes made are to insert the provision of a time limit, set on a case by case basis, for paying relocation
costs, and clarification of the termination payments for NEDs. In addition, where needed, minor editorial changes have
been made without altering the substance of the previous policy.

KEY PRINCIPLES OF REMUNERATION POLICY
The Company’s 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.

As described above, the Remuneration Committee believes that there should be a clear link between the Group’s financial
results and the short-term incentive element of the remuneration of Executive Directors. In order to achieve this, the
Remuneration Policy provides for the Executive Directors’ total remuneration to comprise the following elements: base
salary, a short-term incentive award, pension and benefits. All elements that are considered annually by the Remuneration
Committee notably in our review of base salary and the Short-Term Incentive award. Base salary is reviewed against
seniority, inflationary increases, personal performance, changes in responsibilities and the peer group; whereas the short-
term incentive award is reviewed and aligned to:

1. the Group’s financial metrics (primarily profit before tax)

2. a Director’s personal contribution; and

3. non-financial corporate goals to build for long term sustainable success, including management development,

succession planning and the maintenance of a robust business infrastructure.

At the same time the Remuneration Committee takes account of the pay and conditions for our staff and reviews market
comparators to ensure that reward is appropriate. The Remuneration Committee considers the relative performance of
the Group’s results in relation to its peers in determining where appropriate benchmarks should be set (i.e. upper quartile,
median or lower quartile).

Given that the Executive Directors (particularly the CEO) have significant holdings of the Company’s shares, the
Remuneration Committee does not consider that a long-term incentive share scheme (LTI) or other similar share schemes
are appropriate. Similarly, the Committee consider that in view of both these factors and the experience and long service
of the Executive Directors, malus and clawback provisions are not appropriate at this time. Both the role of an LTI and
clawback provisions will be reviewed if other Executive appointments are made in the future.

The Executive Directors do not receive a pension, but the Remuneration Policy still provides for a pension contribution in
the event that new appointments are made in the future.

Pension contributions are made on behalf of other employees working at the Company.

REMUNERATION POLICY

Set out below is the Remuneration Policy proposed to take effect from 12 August 2020 subject to shareholder approval at
the AGM to be held on that day. The Remuneration Policy has been developed in consultation with major shareholders
as described above and aims to ensure that the remuneration of the Executive Directors reflects their contribution to the
performance of the Group.

The tables below summarise the main elements of the remuneration packages of the Executive Directors, the key features
of each element, their purpose and linkage to our strategy. The table also notes the changes from the current policy that
have been used in setting the Executive Directors’ 2019/20 Short-Term Incentive awards and their base salaries for 2020/21.

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EXECUTIVE DIRECTORS
Component
BASE SALARY*

Proposed new policy

Purpose and link to
strategy

Operation

To provide a competitive level of non-variable remuneration aligned to the
Company’s peer group and reflective of the seniority of the post, the experience of
the Executive and the known and expected contribution to the Group’s strategy.
Base salaries are reviewed each year with regard to the seniority of the individual,
changes to responsibilities, performance, peer group developments and inflationary
increases taking into account the Consumer Prices Index, published annual
remuneration surveys and the average change in workforce salaries, excluding
promotion, merit or similar components of workforce rises, if this is lower than the
published inflation indices.
Base salaries are fixed for each financial year and effective from 1 April each year.

Opportunity
Performance metrics None
PENSION*

Purpose and link to
strategy
Operation

Opportunity

Performance metrics None
BENEFITS*

To attract and retain high quality Executives by providing income in retirement.

Unchanged

The Company would offer contributions to an approved defined contribution
pension scheme.
Contributions would be made at the rate applied to workforce pensions and be
based on base salary only. Contributions may be made at a higher rate through
salary sacrifice.

Changes from old policy

Unchanged

Clarifies the role of
published surveys and the
inflation component of
workforce salary increases.

Unchanged
Unchanged

Unchanged

Contributions aligned
with the wider workforce,
though salary sacrifice is
possible.
Unchanged

E
C
N
A
N
R
E
V
O
G

Purpose and link to
strategy
Operation

Opportunity

To aid the recruitment and retention of high quality Executives.

Unchanged

The Company provides private medical insurance, sick pay and life assurance. Other
non-pension benefits may be provided if the Remuneration Committee considers it
appropriate.
The benefits are fixed in relation to the Executive’s base salary. The Remuneration
Committee reviews the appropriateness of these benefits. The value of benefits
may vary from year to year depending on the cost to the Company from third-party
providers.

Clarifies that pension
benefits are governed by
policy above.
Unchanged

Performance metrics None
SHORT TERM INCENTIVE*

Purpose and link to
strategy
Operation

Opportunity

Performance metrics

Incentive award to be aligned with Group financial performance and reward
personal contribution to results.
Awards are reviewed each year with regard to the individual’s performance and
their contribution to the Group’s performance, financial results and peer group
comparators.
Any award under this scheme will be set at a level that aligns the short-term incentive
award with the Group’s financial performance, while also reflecting non-financial
contributions and remaining comparable with our peer group. The maximum
percentage of base salary payable for an award under this scheme is 150%.
The Remuneration Committee considers financial metrics (currently primarily profit
before tax), other non-financial achievements and corresponding movements within
the peer group over the course of the financial year under review.

* As noted above, the Committee concluded that clawback provisions were not appropriate at this time.

Unchanged

Maximum reduced from
250% to 150%

Unchanged

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Remuneration Report (Continued)

NON-EXECUTIVE DIRECTORS

The policy on Non-Executive Directors’ fees is set out below:

Component

Proposed new policy

Changes from old policy

FEES
Purpose and link to
strategy

Operation

Opportunity

Non-Executive Directors receive a fee to cover their time and expenses in attending
Board, Committee and any other meetings that they are required to attend over the
year.
Non-Executive Directors may receive additional fees and expenses for attending
meetings not otherwise in the ordinary course of their duties, or where additional
effort is needed above that required by the terms of their appointment.
Fees are reviewed periodically by the Board with reference to the expected time
commitment and market level for such services.
Non-Executive Directors are not entitled to any other incentives or benefits beyond
their fees and reimbursement for travel and related business expenses reasonably
incurred in performing their duties.
The aggregate fees and any benefits of the Chairman and Non-Executive Directors
will not exceed the limit from time to time prescribed within the Company’s Articles
of Association for such fees, currently £250,000 p.a. in aggregate.
Any increases in fee levels made will be appropriately disclosed in the Annual Report.

Unchanged

Moves note on amounts
receivable by NEDs
to ‘Operation’ from
‘Opportunity’. Otherwise
unchanged.
Confirms the cap on
aggregate NED fee levels.

Performance metrics None

Unchanged

APPROACH TO RECRUITMENT REMUNERATION
When setting the remuneration package for a new Executive Director, the Remuneration Committee will apply the same
principles and policy as set out above. Depending on individual circumstances, the Remuneration Committee will consider
providing pension contributions and other long-term incentives appropriate to the individual and their responsibilities.

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 increasing experience and responsibilities, subject to
good performance, where it is considered appropriate by the Remuneration Committee.

In relation to external appointments, the Remuneration Committee may structure a remuneration package that it considers
appropriate to recognise awards or benefits that may or will be forfeited on resignation from a previous position, taking
into account timing and valuation – and any other matters it considers relevant. The policy is that the maximum payment
under any such arrangement (which may be in addition to the normal variable remuneration) should be no more than the
Remuneration Committee considers is required to provide reasonable compensation to the incoming Executive Director.

In the 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 (including awards, incentives, benefits and contractual arrangements) in accordance with their
terms to the extent that such pre-existing commitments are permitted by the Code.

Where any recruitment involves the agreed relocation of the individual, the Company may offer additional benefits and
meet some or all associated costs for periods that would be agreed by the Remuneration Committee on a case by case
basis.

Where an individual is appointed as a result of an acquisition, merger or other corporate event, the Company will honour
any legacy terms and conditions to the extent that such legacy terms are permitted by the Code.

Non-Executive Directors appointments will be made based on a Non-Executive Director agreement. Non-Executive
Directors’ fees, including those of the Chairman, will be set at a competitive market level, reflecting the experience of the
individual and the responsibility and time commitment of the role.

In all cases the Remuneration Committee will bear in mind the best interests of the Company.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

DETAILS OF DIRECTORS’ SERVICE CONTRACTS
EXECUTIVE DIRECTORS

Mr D.M. Sinclair
Mrs M.M. Bray

Contract Date

8 August 2002
1 April 2004

Unexpired Term

Notice Period

No fixed term
No fixed term

12 months
12 months

The Executive Directors’ service contracts contain provisions relating to matters such as salary, salary continuance in the
event of illness, holidays, life and medical insurance, etc. The Executive Directors’ service contracts can be terminated on 12
months’ notice by either party.

The Executive Directors are entitled to a compensation payment upon a change of control of the Company. Such
compensation payment (subject to the deduction of income and other taxes 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. The Executive Directors’ contracts make no other provision for termination payments
other than for salary and benefits in lieu of notice.

Executive Directors are entitled to reasonable out of pocket expenses when on Company business.

NON-EXECUTIVE DIRECTORS

Ms M.L. Archibald
Dr A.R. Williams
Mr A.W. Powell

Contract Date

1 July 2020
1 December 2018
1 April 2018

Unexpired Term

Notice Period

36 months
17 months
9 months

None
None
None

Non-Executive Directors are only entitled to accrued fees due to them at the date of termination of their appointment and,
where appropriate, a payment in lieu of their contractual notice period.

OTHER MATTERS
The Remuneration Committee may make non-substantial amendments to the policy set out above.

In making its decisions, the Remuneration Committee shall take into account the conditions of the Group as a whole and
proposals as regards the general staff.

Lastly, the Remuneration Committee considers the views of investor bodies and shareholders. The Company seeks an
ongoing dialogue with shareholders on all matters of strategic importance – including remuneration.

POLICY REGARDING EXTERNAL APPOINTMENTS
Executive Directors are not actively encouraged to hold external directorships. Duncan Sinclair is a director of Sinclair
Estates Ltd. and Ossian Investors Ltd, companies which hold property assets in run-off. He is also a Trustee of The Sinclair
Charity and a Director of Sinclair Events Ltd.

Non-Executive Directors are appointed because of their skills and experience and it is accepted that they have other
commitments beyond Mountview. The Chairman keeps the availability of Non-Executive Directors under review to ensure
that they have the capacity to support the Company as required.

E
C
N
A
N
R
E
V
O
G

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Remuneration Report (Continued)

ILLUSTRATION OF POSSIBLE OUTCOME IN CEO AND CFO REMUNERATION £000S

Base Salary

Fixed Beneﬁts

Variable

On target*

Minimum**

Maximum***

CEO

CFO

CEO

CFO

CEO

CFO

573
(54.1%)

435
(57.8%)

573
(95.8%)

435
(100.0%)

573
(39.3%)

435
(40%)

25
(2.4%)

318
(42.2%)

25
(4.2%)

25
(1.7%)

461
(43.5%)

860
(59%)

653
(60%)

Total

1059

753

598

435

1458

1088

* As noted earlier in the remuneration report, formal targets are not used in determining the short-term incentive awards, with the award being based on

year on year relative financial and non-financial performance and the Executive Director’s personal contribution which includes a mix of objective and
subjective measures. For the purposes of the ‘At expectation’ illustration we have assumed that the Short Term Incentive award would represent the same
proportion of the base salary as in 2019/20.

** Minimum is based on fixed remuneration consisting of projected annual salary for 20/21 with fixed benefits but assuming no Short-Term Incentive award.

*** Maximum is based on fixed remuneration consisting of projected annual salary for 20/21 with fixed benefits with the maximum Short-Term Incentive award

opportunity of 150% of base salary.

APPLICATION OF THE REMUNERATION POLICY
The Remuneration Committee starts its process by reviewing the market benchmarks for remuneration amongst the
Group’s peer group, with particular focus on any movements in salaries for the current year and recent Group performance.
The Remuneration Committee would then determine the appropriate level of base salary for the Executive directors with
reference to these results, as well as considering relative performance against the peer group.

The Remuneration Committee sets the Executive Directors’ Short-Term Incentive award at a level to reflect the Group’s
financial performance while remaining comparable with our peer group. The award is referenced to the financial metrics of
the Group (primarily profit before tax) and also takes account of such other factors as the Remuneration Committee sees fit
such as:

• Any other non-financial factors to be considered;

• The total remuneration of other peer group companies and movement in market benchmarks.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

IMPLEMENTATION REPORT AUDITED INFORMATION
DIRECTORS’ TOTAL REMUNERATION SINGLE FIGURE TABLE

2020
Executive

D.M. Sinclair
M.M. Bray
Non-Executive
A.W. Powell1
M.L. Archibald
Dr A.R. Williams

Salary
£000

Benefits in
kind2
£000

Total Fixed
Remuneration3
£000

Bonus4
£000

555
421

99
39
39
1,153

25
-

-
-
-
25

580
421

99
39
39
1178

447
308

–
–
–
755

Total
£000

1,027
729

99
39
39
1,933

1 Commensurate with his role as Chairman Tony Powell’s salary was increased to £99k p.a. from 1 April 2019.
2 The Benefits in kind are as set out in the policy table.
³ The current Executive directors do not receive a pension contribution thus the Total Fixed remuneration comprises salary and benefits.
4 The approach used for the bonus awards is described in the ‘Activities of the Committee’ note on page 35. The Company does not operate a LTI scheme,

and thus the bonus figures are the Total Variable Remuneration.

E
C
N
A
N
R
E
V
O
G

2019
Executive

D.M. Sinclair
M.M. Bray
Non-Executive
A.C.J. Solway1
A.W. Powell
M.L. Archibald2
Dr A.R. Williams2

Salary
£000

Benefits in
kind3
£000

Total Fixed4
Remuneration
£000

Bonus5
£000

530
402

124
46
39
39
1,180

24
–

–
–
–
–
24

554
402

124
46
39
39
1,204

421
290

–
–
–
–
711

Total
£000

975
692

124
46
39
39
1,915

A.C.J. Solway’s salary was increased to £99k p.a. from 1 April 2018. His remuneration above includes payment until the cessation of his contract at 30 June
2019.

The Benefits in kind are as set out in the policy table.

2 M.L. Archibald and Dr A.R. Williams salaries were increased to £39k p.a. from 1 April 2018.
3
4
5

The current Executive directors do not receive a pension contribution thus the Total Fixed remuneration comprises salary and benefits.

The approach used for the bonus awards is described in the ‘Activities of the Committee’ note on page 35. The Company does not operate a LTI scheme,
and thus the bonus figures are the Total Variable Remuneration.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Remuneration Report (Continued)

UNAUDITED INFORMATION
CEO SINGLE FIGURE

2020
2019
2018
2017
2016
2015
2014
2013
2012
2011

D.M. Sinclair
D.M. Sinclair
D.M. Sinclair
D.M. Sinclair
D.M. Sinclair
D.M. Sinclair
D.M. Sinclair
D.M. Sinclair
D.M. Sinclair
D.M. Sinclair

Bonus as % of
maximum bonus
*

CEO single figure of
total remuneration
£000

32.20%
31.77%
34.02%
41.20%
52.91%
33.33%
32.00%
32.00%
23.27%
33.60%

1,027
975
977
1,038
943
778
659
662
520
523

Prior to 2017 the Remuneration Policy did not have a maximum for STI – so the bonus as a percentage of maximum is not formally computable. However,
for the purposes of comparison we have computed these percentages for earlier years as if the post 2017 policy applied. In addition, as noted on page 38
the Company does not operate a LTI scheme.

PERCENTAGE CHANGE IN REMUNERATION OF CEO AND EMPLOYEES

The percentage change in remuneration between 2019 and 2020 for the CEO and for all employees, excluding the
Directors, in the Group was:

CEO
Employee population (excluding the Directors)

CFO SINGLE FIGURE

2020
2019
2018
2017
2016
2015
2014
2013
2012
2011

M.M. Bray
M.M. Bray
M.M. Bray
M.M. Bray
M.M. Bray
M.M. Bray
M.M. Bray
M.M. Bray
M.M. Bray
M.M. Bray

5.33%
5.33%

Bonus as % of
maximum bonus
*

CFO single figure of
total remuneration
£000

29.25%
28.86%
30.97%
37.87%
48.42%
31.70%
28.80%
28.80%
20.43%
27.91%

729
692
692
730
661
546
473
473
373
383

Prior to 2017 the remuneration policy did not have a maximum for STI – so the bonus as a percentage of maximum is not formally computable. However,
for the purposes of comparison we have computed these percentages for earlier years as if the post 2017 policy applied. In addition, as noted on page 38
the Company does not operate a LTI scheme.

PERCENTAGE CHANGE IN REMUNERATION OF CFO AND EMPLOYEES

The percentage change in remuneration between 2019 and 2020 for the CFO and for all employees, excluding the
Directors, in the Group was:

CFO
Employee population (excluding the directors)

5.35%
5.33%

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E
C
N
A
N
R
E
V
O
G

PERFORMANCE GRAPH

The graph illustrates the Company’s performance compared to a broad equity market index over the past ten years. As
the Company is a constituent of the FTSE 350 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. compared to the value of £100 invested in the
FTSE All-Share Index and the FTSE 350 Real Estate Index on 31 March each year.

10 YEAR TSR RETURN – ANNUAL CHART

350

300

250

200

150

100

31/03/2010

31/03/2011

31/03/2012

31/03/2013

31/03/2014

31/03/2015

31/03/2016

31/03/2017

31/03/2018

31/03/2019

31/03/2020

Mountview Estates – Total Return Index

FTSE 350 SS Real Estate £ – Total Return Index

FTSE All Share Index – Total Return Index

RELATIVE IMPORTANCE OF SPEND ON PAY

The difference in actual expenditure between 2019/20 and 2018/19 on remuneration for all employees in comparison to
profit after tax and distributions to shareholders by way of dividend is set out in the tabular graphs below:

PROFIT AFTER TAX (£M)
0.29M

28.30

28.01

DIVIDEND (£M)

15.59

TOTAL EMPLOYEE PAY
0.16M

4.09

3.93

2020

2019

2020

2019

2020

2019

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Remuneration Report (Continued)

STATEMENT OF IMPLEMENTATION OF REMUNERATION POLICY IN THE CURRENT FINANCIAL YEAR

With effect from 1 April 2020 the basic salary of CEO will be increased to £573k p.a. and the CFO to £435k p.a.

DETAILS OF THE REMUNERATION COMMITTEE

During 2019/2020 the Remuneration Committee comprised three Non-Executive Directors, two of whom were independent.

Details of the Non-Executive Directors who were members of the Remuneration Committee during the year are disclosed
on page 35.

STATEMENT OF VOTING AT GENERAL MEETING

At the Annual General Meeting held on 7 August 2019 the Non-Executive directors’ Remuneration Report received the
following votes based on proxy forms from shareholders.

Resolution

Annual report on Remuneration (2019
AGM)
Remuneration Policy (2017 AGM)

Number of
shares

Voting
for %

Number of
shares

Voting
against %

Total votes
cast

Votes
withheld

1,997,786
1,700,309

67.96%
67.25%

942,065
828,077

32.04%
32.75%

2,939,851
2,528,386

0
0

As reported through the RNS service on February 10, 2020: Following the 2019 AGM in August and prior to the general
meeting held on 18 November 2019, the Company identified as far as possible those shareholders who did not support
the various resolutions and attempted to engage with them to seek their views. They declined to meet or engage. The
Company remains committed to shareholder engagement and will continue to offer to meet with shareholders to take into
account their concerns and considerations in the future.

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
D.M. Sinclair including:
• beneficial holding of Sinclair Estates Limited of 54,165.
(Mr Sinclair is a Director of Sinclair Estates Limited.)

• non-beneficial holding of The Sinclair Charity of 58,117

(Mr Sinclair is a trustee of The Sinclair Charity.)

M.M. Bray

A.C.J Solway**

Dr A.R. Williams

31 March
2020

31 March
2019

596,500
12,302
–
62,072

595,700

12,302

500

52,916

* As noted on page 38 the Company does not operate any LTI or similar share schemes.

** A.C.J. Solway resigned as at 31 March 2019.

All the above interests are beneficial unless otherwise stated. There were no other changes in shareholdings during the year.

Ms. M.L. Archibald
Chairman of the Remuneration Committee
9 July 2020

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Report of the Nomination Committee

MEETINGS

Committee Member

Mr D.M. Sinclair – Chair
Mrs M.M. Bray
Ms M.L. Archibald
Mr A.W. Powell
Dr A.R. Williams

Meetings
Attended

Meetings
eligible to
Attend

2
2
2
2
2

E
C
N
A
N
R
E
V
O
G

All the Directors of the Company are members of the Nomination Committee.

Dear Shareholder,

I am pleased to present the Nomination Committee report which sets out its role and activities during the year.

HOW THE NOMINATION COMMITTEE OPERATES
The Board considers that given its size, it would be unnecessarily burdensome to establish a separate Nomination
Committee that did not include the entire Board and believes that this enables all Directors to be kept fully informed of any
issues that arise. The Nomination Committee met twice during the year ended 31 March 2020, supplemented by informal
meetings and discussions. Only the members of the Nomination Committee have the right to attend meetings, but we may
invite other executives or advisers to attend all or part of any meeting as appropriate.

As previously reported, Mr A.W. Powell took on the role of Acting Non-Executive Chairman with effect from 31 March 2019,
and following the 19 November 2019 meeting of the Nomination Committee was appointed as Non-Executive Chairman
with immediate effect. This ensured that continuity was provided with a minimum of disruption to the Board and the
business.

ROLE OF THE NOMINATION COMMITTEE
The main roles and responsibilities of the Committee are set out in its terms of reference, which are reviewed annually and
are available on the Group’s website. These responsibilities include assisting the Board in discharging its responsibilities
relating to the composition and make-up of the Board and its Committees, succession planning, the endorsement of
Directors for re-election at the AGM and, when needed, the appointment of additional Directors.

The Board believes in the benefit of having a broad range of skills and backgrounds and the need to have a balance of
experience, independence, diversity - including gender, and knowledge of the Group and its Board of Directors. These
matters are taken into account during recruitment but ultimately we look to appoint the best candidate for the role on the
basis of their merit and ability taking into account the needs of the Group, including the skills needed to support delivery of
the Group’s strategic objectives and to ensure the effective functioning of the Board now and in the future.

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Report of the Nomination Committee

(Continued)

PROCESS FOR BOARD APPOINTMENTS
No new appointments to the Board were made during 2019/20.

The Nomination Committee has a formal appointment process in place that embraces these principles and would be used
should the need for a new appointment be identified. The key steps in the process are:

• The Nomination Committee considers the skills and experience that it believes are needed for the Group to function
effectively, taking account of the skills of the existing Board members and those of external advisers that the Board
needs to draw on from time to time.

• Where a particular skill set is believed to be in continuous demand then the Nomination Committee will evaluate

the balance of the skills currently on the Board in order to identify a specification of the personal attributes, skills and
capabilities and experience needed, including, but not limited to, the skill set that prompted this evaluation.

• Should it be appropriate to filling the vacancy to look for an external candidate, then an independent external search
consultant will be appointed, the needs of the appointment and the recruitment process discussed and agreed.

• The process, including interviews and evaluation will be followed in conjunction with the external consultant.

• The conclusion of the process would be a recommendation to the Board.

DIVERSITY
As at 31 March 2020, the Group had one female Executive Director, Mrs Marie Bray, who has been on the Board since 2004,
and one female Non-Executive Director, Ms Mhairi Archibald, who has been on the Board since July 2014. Female Board
membership represented 40% of the Board. The Group has 7 Senior Managers (who are not Directors), 3 of whom are
female. Of our 29 total employees, 11 are male and 18 are female.

ACTIVITIES OF THE COMMITTEE
The Nomination Committee, and related Board discussions, covered the following matters:

•

the composition of the Board and the Board’s committees

the balance of skills, experience and knowledge required by the Board and its committees and the business as a whole

the internal appointment of Mr A W Powell as Non-Executive Chairman

the re-election of all the Directors at the AGM in 2020, taking into account their contribution and time commitments

the review of the Group’s approach to and provisions for succession planning, developing staff, diversity and gender
balance and Board evaluation. These matters are discussed in the Directors’ Report and the Corporate Governance
Report.

As a result of their work, the Nomination Committee is satisfied that the Board has the necessary experience to lead the
Group and deliver on its strategy.

BOARD AND COMMITTEE EVALUATION
The Directors consider that the small size of the Group and Board does not warrant a formal performance evaluation
process. However, performance of the Directors is evaluated on an ongoing basis by the Board. This is a matter continually
under review.

D.M. Sinclair
Chairman of the Nomination Committee
9 July 2020

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Consolidated Statement
of Comprehensive Income

for the year ended 31 March 2020

Revenue

Cost of sales
Gross profit

Administrative expenses
Gain on sale of investment properties
Operating profit before changes in fair value of investment properties

(Decrease)/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 and total comprehensive income

Basic and diluted earnings per share (pence)

All the activities of the Group are classed as continuing.

Year ended
31 March
2020
£000
64,873
(23,519)
41,354
(5,630)
1,174
36,898
(969)
35,929
(988)
34,941
(7,320)
675
(6,645)
28,296
725.7p

Year ended
31 March
2019
£000

65,428
(24,627)
40,801
(5,442)
–
35,359
287
35,646
(1,079)
34,567
(6,504)
(55)
(6,559)
28,008
718.3p

Notes

4
4

9
19
9

The Notes on pages 53 to 69 are an integral part of these consolidated financial statements.

S
T
N
E
M
E
T
A
T
S

L
A
C
N
A
N
F

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Consolidated Statement
of Financial Position

for the year ended 31 March 2020

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 short-term loans
Trade and other payables
Current tax payable

Total liabilities
Total equity and liabilities

Approved by the Board on 9 July 2020.

D.M. Sinclair
Chief Executive

M.M. Bray
Director

As at
31 March
2020
£000

As at
31 March
2019
£000

Notes

12
13

15
16
18

21
22
22
22
23

18
19

18
17

1,670
24,122
25,792

392,069
3,676
3,553
399,298
425,090

195
25
55
56
379,243
379,574

31,100
4,076
35,176

2,060
4,830
3,450
10,340
45,516
425,090

1,710
28,112
29,822

392,384
1,915
1,981
396,280
426,102

195
25
55
56
366,543
366,874

47,250
4,751
52,001

1,250
2,812
3,165
7,227
59,228
426,102

The Notes on pages 53 to 69 are an integral part of these consolidated financial statements.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Consolidated Statement
of Changes in Equity

for the year ended 31 March 2020

Changes in equity for year ended
31 March 2019

Balance as at 1 April 2018
Profit for the year
Dividends
Balance at 31 March 2019
Changes in equity for year ended
31 March 2020

Balance as at 1 April 2019
Profit for the year
Dividends
Balance at 31 March 2020

Share
capital
£000

Capital
reserve
£000

Capital
redemption
reserve
£000

Notes

Other
reserves
£000

Retained
earnings
£000

Total
£000

195

10
23

354,131
28,008
(15,596)
366,543

354,462
28,008
(15,596)
366,874

366,543
28,296
(15,596)
379,243

366,874
28,296
(15,596)
379,574

The Notes on pages 53 to 69 are an integral part of these consolidated financial statements

S
T
N
E
M
E
T
A
T
S

L
A
C
N
A
N
F

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Consolidated Cash Flow
Statement

for the year ended 31 March 2020

Cash flows from operating activities

Profit from operations
Adjustment for:
Depreciation
(Gain) on disposal of investment properties
Decrease/(Increase) in fair value of investment properties
Operating cash flows before movement in working capital

Decrease/(Increase) in inventories
(Increase) in receivables
Increase in payables
Cash generated from operations

Interest paid
Income tax
Net cash inflow from operating activities
Investing activities

Proceeds from disposal of investment properties
Purchase 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 Increase/(Decrease) in cash and cash equivalents

Opening cash and cash equivalents
Cash and cash equivalents at end of year

Year ended
31 March
2020
£000

Year ended
31 March
2019
£000

Notes

35,929

35,646

12
13
13

16
17

13
12

64
(1,174)
969
35,788
315
(1,761)
2,018
36,360
(988)
(7,035)
28,337

4,195
(24)
4,171

(16,835)
(15,596)
(32,431)
77
1,981
2,058

61
–
(287)
35,420
(15,505)
(56)
969
20,828
(1,079)
(5,677)
14,072

–
–
–

(1,863)
(15,596)
(17,459)
(3,387)
5,368
1,981

The Notes on pages 53 to 69 are an integral part of these consolidated financial statements.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notes to the Consolidated
Financial Statements

for the year ended 31 March 2020

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 9 July 2020.

2. ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.

(A) BASIS OF PREPARATION

The Group’s financial statements have been prepared under the historical cost convention, as modified by the revaluation
of investment properties, and in accordance with applicable International Financial Reporting Standards (IFRS), as adopted
by the EU.

The Company has elected to prepare its Parent Company financial statements in accordance with UK GAAP. These are
presented on pages 75 to 83.

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(R) ‘Critical Accounting Judgements and Key Areas of
Estimation Uncertainty’.

(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.

S
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N
E
M
E
T
A
T
S

L
A
C
N
A
N
F

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notes to the Consolidated
Financial Statements (Continued)

for the year ended 31 March 2020

2. ACCOUNTING POLICIES CONTINUED
(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:

• Property Trading

• Property Investment

The segments are UK based. More details are given in Note 5 on page 60.

(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 from sales of properties, rental income from properties held as trading stock, investment and
other sundry items of revenue before charging expenses.

Rental income is recognised on a straight-line and accruals basis over the rental period.

Sales of properties are recognised on legal completion as in the Directors’ opinion this is the point at which control passes
to the buyer.

(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.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

2. ACCOUNTING POLICIES CONTINUED
(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
costs are charged to the income statement during the financial period in which they are incurred.

Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic
life of that asset using the straight-line method as follows:

Freehold property

– 2% per annum

Fixtures and fittings and office equipment

– 20% per annum

Computer equipment

– 25% per annum

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 2020 is on
page 59.

S
T
N
E
M
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T
A
T
S

L
A
C
N
A
N
F

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notes to the Consolidated
Financial Statements (Continued)

for the year ended 31 March 2020

2. ACCOUNTING POLICIES CONTINUED
(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, trade and other payables, and cash and cash
equivalents are measured at amortised cost.

(N) BANK BORROWINGS

Loans are recorded at fair value at initial recognition and thereafter at amortised costs under the effective interest method.

(O) CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments
with original maturities of three months or less, and bank overdrafts.

(P) LEASING
Group as lessor

The Group’s non-cancellable operating leases relate to regulated tenancies under which tenants have the right to remain
in a property for the remainder of their lives. It is therefore not possible to estimate timing of future minimum payments in
respect of these regulated tenancies, hence these are not separately disclosed in the financial statements.

Group as lessee

Rentals payable under leases for assets considered to be of low value are charged to the Consolidated Statement of
Comprehensive Income on a straight-line basis over the term of the lease.

(Q) ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

AND INTERPRETATIONS

The standard IFRS16 Leases was effective for the current financial year. This standard replaced IAS17 Leases, however as the
Group is a lessor the impact of the change was not significant. The Group’s only operating leases are those for leased cars,
which the Directors have determined are not material and which will be recognised on a straight-line basis over the term of
the lease.

Other standards, interpretation and amendments effective in the current financial year have not had a material impact on the
Group financial statements.

Other standards, interpretations and amendments issued but not yet effective are not expected to have a material impact on the
Group financial statements.

(R) CRITICAL ACCOUNTING JUDGEMENTS AND KEY AREAS OF ESTIMATION UNCERTAINTY
Going concern

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

The two main considerations were as follows:

1. Refinancing of banking facilities

The Group has re-negotiated a £20 million (2019: £20 million) revolving loan facility with HSBC Bank. The termination date
of this facility is November 2023.

The Group has a £60 million (2019: £60 million) revolving loan facility with Barclays Bank. The termination date of this facility
is December 2022.

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2. ACCOUNTING POLICIES CONTINUED
2. Covenant compliance

The core facility has two covenants, Consolidated Gross Borrowings as a percentage of Consolidated Net Tangible Assets,
and the ratio of Consolidated PBIT to Consolidated Gross Financing Costs. The Group has remained well within both of
these covenants during the year.

On the basis of the above, the Directors have a reasonable expectation that the Group and the Company have adequate
resources to continue in operational existence for the foreseeable future.

Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Distinction between investment and trading property

The Group considers the intention at the outset when each property is acquired in order to classify the property as either
an investment or a trading property. Where the intention is to either trade the property or where the property is held for
immediate sale upon receiving vacant possession within the ordinary course of business, the property is classified as trading
property. Where the intention is to hold the property for its long-term rental yield and/or capital appreciation, the property
is classified as an investment property.

Investment properties

In considering the values attributable to the investment portfolio, the following factors are taken into consideration:

• sales of properties within the Group’s portfolio during the preceding 12 months

• sales of properties in the same district whenever the information is available

• published market research concerning the performance of the property market in this region and district

•

factors affecting individual properties and units in relation to value, and factors in the district which might affect the
values of individual properties and units.

The valuation of the portfolios was made in accordance with the requirements of the RICS Valuation – Global
Standards 2020.

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. Given that all stock is purchased at a discount to the value with
vacant possession the Directors consider the risk of impairment to be low.

Inventory expected to be settled in more than 12 months

The Board estimates that inventory of £19.5 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.

S
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N
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M
E
T
A
T
S

L
A
C
N
A
N
F

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notes to the Consolidated
Financial Statements (Continued)

for the year ended 31 March 2020

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
the rental income.

The Group has two covenants covering Consolidated Gross Borrowings as a percentage of Consolidated Net Tangible
Assets, and the ratio of Consolidated PBIT to Consolidated Gross Financing Costs. 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.

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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Mountview Estates P.L.C. Annual Report and Accounts 2020

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
Net borrowings plus equity
Gearing ratio

2020
£000
33,160
(3,553)
29,607
379,574
409,181
7.2%

2019
£000

48,500
(1,981)
46,519
366,874
413,393
11.3%

4. ANALYSIS OF REVENUE AND COST OF SALES
All revenue arises in England and Wales.

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

2020
£000

45,651
19,222
64,873

17,686
5,833
23,519

27,965
13,389
41,354

2019
£000

46,430
18,998
65,428

18,973
5,654
24,627

27,457
13,344
40,801

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

Value of the Properties included in the Market Valuation as at 30 September 2014
and sold during the year ended 31 March 2020
Properties purchased since 30 September 2014 and sold during the year ended 31 March 2020
Gross sales of properties

Allsop
Valuation
£000

Sales Price
£000

29,221
–
–

41,819
3,832
45,651

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

S
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N
E
M
E
T
A
T
S

L
A
C
N
A
N
F

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notes to the Consolidated
Financial Statements (Continued)

for the year ended 31 March 2020

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
64,349

35,722
(988)

400,822
41,190

24
60

2020
Property
investment
£000
524

1,176
–

24,268
4,326

–
4

Group
£000
64,873

36,898
(988)
28,296
425,090
45,516

Property
trading
£000

64,863

35,170
(1,079)

397,787
54,400

24
64

–
53

2019
Property
investment
£000

565

189
–

28,315
4,828

–
8

Group
£000

65,428

35,359
(1,079)
28,008
426,102
59,228

–
61

Revenue of the property investment segment is derived entirely from rental income.

Head office costs have been allocated and included within the Group’s two operating segments. The Group’s two main
business segments operate within England and Wales.

6. PROFIT FROM OPERATIONS

The operating profit is stated after taking into account:
Depreciation of tangible fixed assets
Gain on disposal of investment property
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)

The average monthly number of employees during the year was as follows:

Office and management

2020
£000

64
1,174

40
15
–
95

2019
£000

61
–

36
15
4
94

13,389
33

13,344
42

2020
29

2019

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Mountview Estates P.L.C. Annual Report and Accounts 2020

7. STAFF COSTS (INCLUDING DIRECTORS)

Wages and salaries
Social security costs
Pension costs

Directors’ remuneration

2020
£000
3,554
490
49
4,093

2019
£000

3,454
430
44
3,928

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

1,933

1,915

The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on page 43.

The Company contributes 3% of the total annual gross salaries and bonuses of each employee, excluding Directors, 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 19% (2019: 19%)
Deferred tax: Current year 19% (2019: 19%)
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 19% (2019: 19%)
Expenses not deductible for tax
Depreciation in excess of capital allowances
Deferred tax
Taxation attributable to the Company and its subsidiaries

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

2020
£000
988

2020
£000

7,320
(675)
6,645

34,941
6,638
(2)
(7)
16
6,645

2019
£000

1,079

2019
£000

6,504
55
6,559

34,567
6,567
6
(14)
–
6,559

10. DIVIDENDS
On 12 August 2019, a dividend of 200p per share (2018: 200p per share) was paid to the shareholders. On 30 March 2020 a
dividend of 200p per share (2019: 200p per share) was paid to the shareholders. This resulted in total dividends paid in the
year of £15.6 million (2019: £15.6 million).

In respect of the current year, the Directors propose that a final dividend of 200p per share will be paid to the shareholders
on 17 August 2020. 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 2020 is payable to all shareholders on the Register of Members on 10 July 2020. The total
estimated final dividend to be paid is £7.8 million.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notes to the Consolidated
Financial Statements (Continued)

for the year ended 31 March 2020

11. EARNINGS PER SHARE

The calculations of earnings per share are based on the following profits and number of shares:
Net profit for financial year (basic and fully diluted)
Weighted average number of Ordinary Shares for basic and fully diluted earnings per share
Basic and diluted earnings per share

The Company has no dilutive potential Ordinary Shares.

12. PROPERTY, PLANT AND EQUIPMENT

2020
£000

2019
£000

28,296
3,899,014
725.7p

28,008
3,899,014
718.3p

Cost

At 1 April 2019
Additions
Disposals
At 31 March 2020
Depreciation

At 1 April 2019
Charge for the year
On disposals
At 31 March 2020
Net book value

At 31 March 2019
At 31 March 2020

Property, plant and equipment are located within England and Wales.

Cost

At 1 April 2018
Additions
Disposals
At 31 March 2019
Depreciation

At 1 April 2018
Charge for the year
On disposals
At 31 March 2019
Net book value

At 31 March 2018
At 31 March 2019

Property, plant and equipment are located within England and Wales.

Freehold
property
£000

Fixtures
and fittings
£000

Computer
equipment
£000

2,671
–
–
2,671

966
53
–
1,019

1,705
1,652

41
–
–
41

36
5
–
41

5
–

–
24
–
24

–
6
–
6

–
18

Freehold
property
£000

Fixtures
and fittings
£000

Computer
equipment
£000

2,671
–
–
2,671

913
53
–
966

1758
1,705

41
–
–
41

28
8
–
36

13
5

–
–
–
–

–
–

Total
£000

2,712
24
–
2,736

1,002
64
–
1,066

1,710
1,670

Total
£000

2,712
–
–
2,712

941
61
–
1,002

1771
1,710

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13. INVESTMENT PROPERTIES

Fair value at 1 April 2019/(2018)
Subsequent expenditure
Disposals
(Decrease)/Increase in fair value during the year
At 31 March 2020/(2019)

2020
£000
28,112
–
(3,021)
(969)
24,122

2019
£000

27,825
–
–
287
28,112

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

During the financial year we disposed of 4 units for £4.195 million (2019: nil). The difference between the sales price of
£4.195 million and the market fair value of £3.021 million, resulted in a gain of £1.174 million. This is shown as a separate line
item in the Consolidated Statement of Comprehensive Income for the year ended 31 March 2020.

The investment properties represent less than 5% of the Group’s portfolio.

LOUISE GOODWIN LIMITED AND A.L.G. PROPERTIES LIMITED

The companies’ freehold properties were valued on 31 March 2020 by an external valuer Jeremy Mayhew – Sanders MRICS
of Allsop LLP. The valuations are in accordance with the requirements of the RICS Valuation – Global Standards 2020.
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 derived using comparable recent market
transactions on arm’s length terms.

The outbreak of the Novel Coronavirus (Covid-19), declared by the World Health Organisation as a “Global Pandemic” on
11 March 2020, has impacted global financial markets. Travel restrictions have been implemented by many countries.

Market activity is being impacted in many sectors. As at the valuation date, the Valuers felt that they could attach less
weight to previous market evidence for comparison purposes, to inform opinions of value. Indeed, the current response to
Covid-19 means that the Valuers were faced with an unprecedented set of circumstances on which to base a judgement.

The valuation is therefore reported on the basis of ‘material valuation uncertainty’ as per VPS 3 and VPGA 10 of the RICS
Red Book. Consequently less certainty and a higher degree of caution should be attached to the valuation than would
normally be the case.

This is the fourth year in which Mr Mayhew-Sanders has valued the properties for accounts purposes but the ninth
consecutive year in which Allsop LLP has undertaken the work. Allsop LLP has undertaken work for Mountview Estates P.L.C.
for longer than 20 years including acquisitions, disposals and valuations.

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 Group’s interests in its investment portfolios was:

LOUISE GOODWIN LIMITED

• Freehold: £20,982,000 (Twenty million, nine hundred and eighty two thousand pounds).

A.L.G. PROPERTIES LIMITED

• Freehold: £3,140,000 (Three million, one hundred and forty 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(R) “Critical accounting judgements and key areas of estimation uncertainty”.

A revaluation decrease of £969,000 has arisen on valuation of investment properties to Market Value as at 31 March 2020
(2019: increase of £287,000). This is shown as a separate line item in the Consolidated Statement of Comprehensive Income.

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

Investment properties are the only assets of the Group measured at fair value. They are categorised as Level 3 within the fair
value hierarchy of IFRS13

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Notes to the Consolidated
Financial Statements (Continued)

for the year ended 31 March 2020

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.

Hurstway Investment Company Limited
Registered Office: Mountview House, 151 High Street,
Southgate, London, N14 6EW
Registered in England 344034
Louise Goodwin Limited
Registered Office: Mountview House, 151 High Street,
Southgate, London, N14 6EW
Registered in England 691455
A.L.G. Properties Limited
Registered Office: Mountview House, 151 High Street,
Southgate, London, N14 6EW
Registered in England 508842

Principal activity

Property Trading

Property Investment

Cost
2019
2020
£000

15,351

2,924

18,276

15. INVENTORIES OF TRADING PROPERTIES

Residential properties

2020
£000
392,069

2019
£000

392,384

The Company’s freehold and long leasehold interests in its portfolio of properties 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 were 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 and
therefore the valuation has not been updated since.

16. TRADE AND OTHER RECEIVABLES

Trade receivables
Prepayments and accrued income

2020
£000
2,326
1,350
3,676

2019
£000

257
1,658
1,915

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.

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17. TRADE AND OTHER PAYABLES

Trade creditors
Other taxes and social security costs
Other creditors

2020
£000
1,398
251
3,181
4,830

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

18. BANK OVERDRAFTS, LOANS AND CASH

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 2020 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

The average interest rates paid were as follows:

Bank overdrafts
Bank loans
Other loans

2020
£000
1,495
31,100
565
33,160

2020
£000
(1,495)
3,553
2,058

2020
£000

2,060
31,100
33,160
(2,060)
31,100

2020
%
2.35
2.70
0.50

2019
£000

1,274
248
1,290
2,812

2019
£000

–
47,250
1,250
48,500

2019
£000

–

1,981
1,981

2019
£000

1,250
47,250
48,500
(1,250)
47,250

2019
%

2.25
2.62
0.50

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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 a short-term borrowing facility of £10 million (2019: £10 million) with Barclays Bank. This is due for review

in November 2020 and the rate of interest payable is:

• 1.6% over base rate on overdraft

• Headroom of this facility at 31 March 2020 amounted to £8.5 million (2019: £10 million).

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notes to the Consolidated
Financial Statements (Continued)

for the year ended 31 March 2020

18. BANK OVERDRAFTS, LOANS AND CASH CONTINUED
2. The Group has a £60 million long-term revolving loan facility with Barclays Bank with a termination date of December
2022. The rate of interest payable on the loan is 1.9% 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 2020 amounted to £45 million (2019: £25 million).

3. The Group has a £20 million long-term revolving loan facility with HSBC Bank. The termination date for this facility is
November 2023. The rate of interest payable on the loan is 2.1% above LIBOR. The loan includes a Negative Pledge.
The loan is not repayable by instalments. As at 31 March 2020 headroom under this facility amounted to £3.90 million
(2019: £7.75 million).

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

The balance outstanding as at 31 March 2020 was £565,000 (2019: £1,250,000).

•

Interest payable on these loans was at 0.5%.

19. DEFERRED TAX
ANALYSIS FOR FINANCIAL REPORTING PURPOSES

Deferred tax liabilities
Net position at 31 March

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

At 1 April
(Credit)/Debit to income for the year
At 31 March

2020
£000
4,076
4,076

2020
£000
4,751
(675)
4,076

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

REVALUATION OF PROPERTIES

At 1 April
(Credit)/Debit to income for the year
At 31 March

2020
£000
4,751
(675)
4,076

2019
£000

4,751
4,751

2019
£000

4,696
55
4,751

2019
£000

4,696
55
4,751

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20. FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL ASSETS

The Group’s financial assets at the year end, which are measured at amortised cost, consist of cash at bank and in hand of
£3.55 million (2019: £1.98 million) and trade receivables.

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

The trade receivables amounted to £2.326 million (2019: £0.257 million).

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

FAIR VALUE OF BORROWINGS

Short-term loans
Secured bank loans

2020
£000
2,060
31,100
33,160

2019
£000

1,250
47,250
48,500

Interest charged in the Income Statement for the above borrowings amounted to £0.99 million (2019: £1.08 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 2020 it is estimated that a general increase of 1 point in interest rates would decrease the Group’s profit
before tax by approximately £331,600 (2019: £485,000).

UNDISCOUNTED MATURITY PROFILE OF FINANCIAL LIABILITIES

The following table analyses the Group’s financial liabilities and derivative financial liabilities at the Balance Sheet date into
relevant maturity groupings based on the remaining period to the contractual maturity date. The amounts disclosed in the
table are the contractual undiscounted cash flows. As the amounts included in the table are the contractual undiscounted
cash flows, these amounts will not always equal the amounts disclosed on the Balance Sheet for borrowings, derivative
financial instruments, and trade and other payables.

Trade and other payables due within 12 months equal their carrying balances as the impact of discounting is not significant.

At 31 March 2020

Interest-bearing loans and borrowings
Trade and other payables

At 31 March 2019

Interest-bearing loans and borrowings
Trade and other payables

The Group’s financial liabilities are measured at amortised cost.

Less than
1 year
£000
2,060
4,830

Between
1 and 5 years
£000
31,100
–

Less than
1 year
£000

Between
1 and 5 years
£000

1,250
2,812

47,250
–

Over
5 years
£000
–
–

Over
5 years
£000

–
–

Total
£000
33,160
4,830

Total
£000

48,500
2,812

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notes to the Consolidated
Financial Statements (Continued)

for the year ended 31 March 2020

20. FINANCIAL INSTRUMENTS CONTINUED
RECONCILIATION OF MATURITY ANALYSIS

At 31 March 2020

Interest bearing loans and borrowings per accounts
Interest
Financial liability cash flows

At 31 March 2019

Interest bearing loans and borrowings per accounts
Interest
Financial liability cash flows

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

Less than
1 year
£000
2,060
25
2,085

Between
1 and 5 years
£000
31,100
2,397
33,497

Less than
1 year
£000

Between
1 and 5 years
£000

1,250
14
1,264

47,250
5,049
52,299

Over
5 years
£000
–
–
–

Over
5 years
£000

–
–
–

2020
£000

250

195

2020
£000
25
55
56
136

Total
£000
33,160
2,422
35,582

Total
£000

48,500
5,063
53,563

2019
£000

250

195

2019
£000

25
55
56
136

Capital redemption reserve relates to buy-back of the Company’s own shares.

The Group does not maintain insurance cover against other risks except where several properties are located in close
physical vicinity. A reserve is maintained to deal with such non-insured risks and at 31 March 2020 stood at £56,000
(2019: £56,000).

23. RETAINED EARNINGS

Balance at 1 April 2019
Net profit for the year
Dividends paid
Balance at 31 March 2020

£000

366,543
28,296
(15,596)
379,243

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24. RELATED PARTY TRANSACTIONS
1. 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 £33,100 (2019: £41,675)
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 £465,000 (2019: £1,100,015). Interest was payable on the loan
at 0.5%. Interest paid in the year on this loan amounted to £3,260 (2019: £4,133).

Limited. The balance outstanding at the balance sheet date was £100,000 (2019: £150,000). Interest was payable on
the loan at 0.5%. Interest paid in the year on this loan amounted to £310 (2019: £505).

(d) All of the above loans are unsecured.

(e) Transactions between the Group and its subsidiaries, which are related parties, have been eliminated on

consolidation and have not been disclosed in this note.

(f) The only key management are the Directors.

25. DIRECTORS’ ADVANCE CREDITS AND GUARANTEES
As at 31 March 2020 the Group owed Mr D.M. Sinclair £38,133 (2019: £119,014) in relation to an informal loan.

26. LEASE COMMITMENTS
The future aggregate minimum lease payments payable by the Group under non-cancellable leases are as follows:

Lease payments due:
Not later than one year
Later than one year and not later than five years

2020
£000

42
33
75

2019
£000

39
26
65

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Independent Auditor’s Report

to the members of Mountview Estates P.L.C. year ended 31 March 2020

OPINION
We have audited the Group Financial Statements of Mountview Estates P.L.C. for the year ended 31 March 2020 which
comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the
Consolidated Statement of Changes in Equity, the Consolidated Cash Flow Statement and the related notes, including a
summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

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 2020 and of its profit for the year then ended;

• have been properly prepared in accordance with IFRSs 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.

BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Group
Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements
that are relevant to our audit of the Financial Statements in the UK, including the FRC’s Ethical Standard as applied to listed
public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

CONCLUSIONS RELATING TO PRINCIPAL RISKS, GOING CONCERN
AND VIABILITY STATEMENT
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs (UK)
require us to report to you whether we have anything material to add or draw attention to:

•

the disclosures in the annual report that describe the principal risks and explain how they are being managed or
mitigated;

the Directors’ confirmation in the annual report that they have carried out a robust assessment of the principal risks
facing the Group, including those that would threaten its business model, future performance, solvency or liquidity;

the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt
the going concern basis of accounting in preparing the financial statements and the Directors’ identification of any
material uncertainties to the Group’s ability to continue to do so over a period of at least twelve months from the date of
approval of the financial statements;

• whether the Directors’ statement relating to going concern required under the Listing Rules in accordance with Listing

Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or

•

the Directors’ explanation in the annual report as to how they have assessed the prospects of the Group, over what
period they have done so and why they consider that period to be appropriate, and their statement as to whether
they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as
they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary
qualifications or assumptions.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group
Financial Statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context
of our audit of the Group Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.

• Revenue recognition – refer to page 54 for the Group’s accounting policy in respect of revenue recognition

Under International Standard on Auditing (ISA) (UK) 240 there is a presumption that there is a risk of fraud in revenue
recognition. Revenue is also one of the Group’s key performance indicators. We therefore identified revenue recognition as
a significant risk. We verified the occurrence of property sales by selecting an appropriate sample of those sales during the
year and verifying to both completion statements and bank transactions. We also reconciled property stock movements and
performed appropriate cut off procedures to ensure that sales were recorded in the correct accounting period. We tested
rental income for completeness by sampling from property stock, reviewing the underlying rental agreement and tracing
to recorded rental income. Based on our audit testing we did not identify any material instances of revenue not being
recognised in accordance with the Group’s accounting policy.

• Carrying value of property inventory and the potential impact of the Covid-19 pandemic – refer to page 55 for the

Group’s accounting policy in respect of the value of property inventory

Property inventory is the Group’s most significant asset and is carried at the lower of cost and net realisable value (“NRV”).
NRV is based on vacant possession and is subject to change, largely based on movements in the property market. We
assessed an increased risk this year due to the potential downwards movement in property prices caused by the Covid-19
pandemic. We therefore determined the valuation of inventory to be a significant risk. We reviewed sales of all properties
sold during the year and for a suitable period after the year end to ensure that there was no evidence of properties being
sold for less than cost that might indicate potential impairment. We reviewed property purchases during the year to
confirm that these were purchased at a discount to market value with vacant possession. We also looked at market data
as an indicator of potential impairment. Finally, we selected a sample of individual properties from inventory. For these
we estimated market value with vacant possession, and applied an appropriate discount to reflect a potential decrease in
property prices due to Covid-19. We then compared the result with the property cost as recorded in the Group’s records.
Based on our audit testing we found the carrying value of inventory to be acceptable.

• Valuation of investment properties – refer to page 55 for the Group’s accounting policy in respect of the value of

investment properties

Investment properties were assessed as a significant risk as these are material to the Group balance sheet and are subject
to judgement and estimation in arriving at fair value. Particularly this year, with the potential impact of the Covid-19
pandemic on year-end property prices, there was considered to be greater estimation uncertainty in the valuation. The
investment properties are valued annually by a suitably independent and qualified valuer as disclosed in note 13 to the
financial statements. To address this risk we reviewed the terms of engagement of the valuer and the valuation assumptions
used and the valuation workings. We also discussed the methodology used with the valuer and compared the revaluation
with our expectation based on market data. We also reviewed the valuer’s judgement to revalue the properties downwards
to reflect the estimated impact of Covid-19. We considered the reasonableness of the discount applied based on a review
of property market commentary and emerging price data. We additionally ensured that the increased uncertainty was
appropriately disclosed in the financial statements. Based on our audit testing we consider the valuation of investment
property to be acceptable.

OUR APPLICATION OF MATERIALITY
We determined materiality for the Group to be £4.2 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.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Independent Auditor’s Report (Continued)

to the members of Mountview Estates P.L.C. year ended 31 March 2020

We concluded that determining materiality based on gross assets was more consistent with industry peers and
appropriately reflects the nature of the business.

In addition, we applied lower materiality of £1.7m to specific income statement items, being net trading profits, rental
income, rental expenses, administrative expenses and finance charges, and £170k for Directors transactions. We believe
misstatement of these specific income statement items and directors’ transactions of a lesser amount than materiality for
the financial statements as a whole could reasonably be expected to influence the Company’s members’ assessment of the
financial performance of the Group.

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 investment properties. The Parent Company and all three subsidiaries are audited by BSG Valentine (UK)
LLP. 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 reviewed the Group’s internal controls and obtained
our audit evidence through substantive procedures.

How the scope of our audit addressed each key audit matter is described above under Key audit matters.

OTHER INFORMATION
The Directors are responsible for the other information. The other information comprises the information included in
the Annual report, other than the Financial Statements and our auditor’s report thereon. Our opinion on the Financial
Statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon.

In connection with our audit of the Group Financial Statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the Group Financial Statements
or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement
of the Group Financial Statements or a material misstatement of the other information. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.

In this context, we also have nothing to report in regard to our responsibility to specifically address the following items in
the other information and to report as uncorrected material misstatements of the other information where we conclude that
those items meet the following conditions:

• Fair, balanced and understandable – the statement given by the Directors that they consider 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 position, performance, business model and strategy, is materially inconsistent with
our knowledge obtained in the audit; or

• Audit committee reporting – the section describing the work of the audit committee does not appropriately address

matters communicated by us to the audit committee; or

• Directors’ statement of compliance with the UK Corporate Governance Code – the parts of the Directors’ statement

required under the Listing Rules relating to the company’s compliance with the UK Corporate Governance Code
containing provisions specified for review by the auditor in accordance with Listing Rule 9.8.10R(2) do not properly
disclose a departure from a relevant provision of the UK Corporate Governance Code.

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OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with
the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit

•

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 Financial Statements; and

the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.

•
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group and its environment obtained in the course of the audit, we
have not identified material misstatements in the Strategic Report or the Directors’ Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us 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.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of
the Group Financial Statements and for being satisfied that they give a true and fair view, and for such internal control as
the Directors determine is necessary to enable the preparation of Group Financial Statements that are free from material
misstatement, whether due to fraud or error.

In preparing the Group Financial Statements, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE GROUP FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the Group Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these Group Financial Statements.

We identified and assessed the risks of material misstatement in respect of irregularities, including fraud and non-
compliance with laws and regulations. Our procedures included enquiry of management and the audit committee,
together with a review of supporting documentation such as board minutes and audit committee meeting minutes. We also
performed analytical review procedures to identify any unusual relationships that may indicate a material misstatement, and
additionally tested the appropriateness of journals to address the risk of fraud through management override of controls.
We also performed appropriate testing in respect of the risk of fraud in revenue recognition as described in key audit
matters. Relevant laws and regulations, together with potential fraud risks, were communicated to the audit engagement
team at the planning stage to ensure they remained alert to any indications of fraud or non-compliance with laws and
regulations throughout the audit.

The risk of not detecting a material misstatement resulting from fraud or other irregularities is higher than for one resulting
from error, as they may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control and may involve any area of law and regulation not just those directly affecting the financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Independent Auditor’s Report (Continued)

to the members of Mountview Estates P.L.C. year ended 31 March 2020

OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS
We were appointed by the Directors on 18 March 2020. The period of total uninterrupted engagement is 14 years for the
year ended 31 March 2020.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group and we remain
independent of the Group in conducting our audit.

Our audit opinion is consistent with the additional report to the Audit Committee.

We have reported separately on the Parent Company Financial Statements of Mountview Estates P.L.C for the year ended
31 March 2020. The opinion in that report is unmodified.

THE PURPOSE OF OUR AUDIT WORK AND TO WHOM WE OWE OUR RESPONSIBILITIES
This report is made solely to the company’s members, as a body, in accordance with chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.

Gary Allen FCA (Senior Statutory Auditor)

For and on behalf of
BSG Valentine (UK) LLP
Chartered Accountants & Statutory Auditor
Lynton House
7 – 12 Tavistock Square
London
WC1H 9BQ

9 July 2020

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Company Balance Sheet
under UK GAAP

for the year ended 31 March 2020

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 9 July 2020.

D.M. Sinclair
Chief Executive

M.M. Bray
Director

31 March
2020
£000

31 March
2019
£000

Notes

4
5

6
7
10

12
13
13
13
14

1,670
18,276
19,946

363,195
3,570
3,451
370,216
(25,664)
344,552

364,498
(31,100)
333,398

195
55
25
39
333,084
333,398

1,705
18,276
19,981

363,054
1,781
1,843
366,678
(16,419)
350,259

370,240
(47,250)
322,990

195
55
25
39
322,676
322,990

The Notes on pages 77 to 83 are an integral part of the Parent Company financial statements.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Company Cash Flow
under UK GAAP

for the year ended 31 March 2020

Cash Flows from Operating Activities

Profit from operations
Adjustments for:
Depreciation
Interest payable and similar charges
Tax on profit on ordinary activities
Increase/(Decrease) in accrued income
Changes in:
Stocks
Trade and other debtors
Trade and other creditors
Cash generated from operations
Interest paid
Tax paid
Net cash inflow from operating activities
Cash Flows from Investing Activities

Purchase of property, plant and equipment
Net cash used in financing activities
Cash Flows from Financing Activities

(Repayment) of borrowings
Increase of loans from Group undertakings
Dividends paid

Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of year

Year ended
31 March
2020
£000

Year ended
31 March
2019
£000

Notes

26,004

26,086

6
7

59
988
6,087
159

(141)
(1,789)
1,895
33,262
(988)
(6,182)
26,092

(24)
(24)

(16,835)
6,476
(15,596)

(25,955)
113
1,843
1,956

53
1,079
6,107
(10)

(15,327)
367
949
19,304
(1,079)
(5,098)
13,127

–
–

(1,863)
922
(15,596)

(16,537)
(3,410)
5,253
1,843

The Notes on pages 77 to 83 are an integral part of the Parent Company financial statements.

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Notes to the Financial Statements
under UK GAAP

for the year ended 31 March 2020

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.

The Company has taken advantage of the exemption in section 408 of the Companies Act from disclosing its individual
profit and loss account.

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.

Rental income is recognised on a straight-line and accruals basis over the rental period.

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.

LEASING
Company as lessor

The Company’s non-cancellable operating leases relate to regulated tenancies under which tenants have the right to remain
in a property for the remainder of their lives. It is therefore not possible to estimate timing of future minimum payments in
respect of these regulated tenancies, hence these are not separately disclosed in the financial statements.

Group as lessee

Rentals payable under operating leases are recognised as an expense on a straight-line basis over the term of the lease.

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.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notes to the Financial Statements
under UK GAAP (Continued)

for the year ended 31 March 2020

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 using the straight-line method as follows:

Freehold property
Fixtures and fittings
Computer equipment

INVESTMENTS

– 2% per annum
– 20% per annum
– 25% per annum

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.

FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised in the Company’s balance sheet when the Company has become a
party to the contractual provisions of the instrument. Trade and other receivables, trade and other payables, loans and cash
and cash equivalents are measured at amortised cost.

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 Company includes legal fees and commission charges incurred during acquisition together
with improvement costs. Net realisable value is the net sale proceeds which the Company expects on sale of the property
with vacant possession in its current condition.

PENSION COSTS

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 (2019: £20 million) revolving loan facility with HSBC Bank with a termination date of
November 2023.

The Company has a £60 million (2019: £60 million) revolving loan facility with Barclays Bank. The term termination date of
this facility is December 2022.

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2. ACCOUNTING POLICIES CONTINUED
2. Covenant compliance

The core facility has two covenants, Consolidated Gross Borrowing as a percentage of Consolidated Net Tangible Assets,
and the ratio of Consolidated PBIT to Gross Financing Costs. The Company has remained well within both of these
covenants during the year.

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. Given that all stock is purchased at a discount to the value
with vacant possession the Directors consider the risk of impairment to be low.

Inventory expected to be settled in more than 12 months

The Board estimates that inventory of £19.5 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, historic and current has involved the purchase for sale of residential
properties subject to regulated tenancies, such properties being sold when vacant possession is obtained.

Regulated tenancies by their nature are not for any specific period of time and in most cases they do not become vacant
until the death of the tenant.

It is difficult to predict with any certainty the time at which Mountview’s inventory properties might become vacant.

3. STAFF COSTS (INCLUDING DIRECTORS)

Wages and salaries
Social security costs
Pension costs

DIRECTORS’ REMUNERATION

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

2020
£000
3,554
490
49
4,093

2020
£000
1,933

2019
£000

3,454
430
44
3,928

2019
£000

1,915

The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on page 43.

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

The average monthly number of employees during the year was as follows:

Office and management

2020
29

2019

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notes to the Financial Statements
under UK GAAP (Continued)

for the year ended 31 March 2020

4. TANGIBLE ASSETS

Cost

At 1 April 2019
Additions
Disposals
At 31 March 2020
Depreciation

At 1 April 2019
Charge for the year
On disposals
At 31 March 2020
Net book value

At 31 March 2019
At 31 March 2020

All tangible assets of the Company are located within England and Wales.

5. INVESTMENTS

Cost
At 1 April 2019 and 31 March 2020
Impairment
At 1 April 2019 and 31 March 2020
Carrying amount
At 31 March 2020

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

Freehold
property
£000

Computer
equipment
£000

2,671
–
–
2,671

966
53
–
1,019

1,705
1,652

-
24
–
24

-
6
–
6

-
18

Total
£000

2,671
24
–
2,695

966
59
–
1,025

1,705
1,670

Shares in Group
undertakings £000

18,276

–

18,276

Subsidiary undertaking
Hurstway Investment Company Limited
Registered Office: Mountview House,
151 High Street, Southgate, London, N14 6EW
Louise Goodwin Limited
Registered Office: Mountview House,
151 High Street, Southgate, London, N14 6EW
A.L.G. Properties Limited
Registered Office: Mountview House,
151 High Street, Southgate, London, N14 6EW

6. STOCKS

Residential properties

7. DEBTORS: DUE WITHIN ONE YEAR

Trade debtors
Prepayments and accrued income

Country of incorporation

Principal activity

England, UK
No: 344034

England, UK
No: 691455

England, UK
No: 508842

Property Trading

Property Investment

2020
£000
363,195

2019
£000

363,054

2020
£000
2,326
1,244
3,570

2019
£000

257
1,524
1,781

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8. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Bank overdraft
Amounts owed to Group undertakings
Accruals and deferred income
Corporation Tax
Other taxes and social security costs
Other creditors
Other loans

2020
£000
1,495
15,902
1,357
2,913
251
3,181
565
25,664

Other loans consist of loans from connected persons. Interest payable on these loans was at 0.5%.

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

Bank loans

Maturity profile of financial liabilities at 31 March 2020 was as follows:

Amounts repayable:
Between one and five years

2020
£000
31,100
31,100

2020
£000

31,100
31,100

2019
£000

–
9,426
1,198
3,008
248
1,289
1,250
16,419

2019
£000

47,250
47,250

2019
£000

47,250
47,250

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 a short-term borrowing facility of £10 million (2019: £10 million) with Barclays Bank. This is due for

review in November 2020 and the rate of interest payable is:

• 1.6% over base rate on overdraft.

Headroom of this facility at 31 March 2020 amounted to £8.5 million (2019: £10 million).

2. The Company has a £60 million (2019: £60 million) long-term revolving loan facility with Barclays Bank with a termination
date of December 2022. The rate of interest payable on the loan is 1.9% 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 2020 amounted to £45 million (2019: £25 million).

3. The Company has a £20 million (2019: £20 million) long-term revolving loan facility with HSBC Bank. The termination

date for this facility is November 2023. The rate of interest payable on the loan is 2.1% above LIBOR. The loan includes a
Negative Pledge. The loan is not repayable by instalments. As at 31 March 2020 headroom under this facility amounted
to £3.9million (2019: £7.75 million).

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. The balance outstanding as at 31 March 2020 was £565,000 (2018: £1,250,000). Interest
payable on these loans was at 0.5%.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notes to the Financial Statements
under UK GAAP (Continued)

for the year ended 31 March 2020

10. CASH AND CASH EQUIVALENTS

Bank overdraft
Cash
Cash and cash equivalents as at 31 March

Maturity profile of financial liabilities at 31 March 2020 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

2020
£000
(1,495)
3,451
1,956

2020
£000

2,060
31,100
33,160
(2,060)
31,100

2019
£000
–

1,843
1,843

2019
£000

1,250
47,250
48,500
(1,250)
47,250

The Company’s financial assets at the year end consist of trade receivables and cash at bank and in hand of £3.451 million
(2019: £1.843 million).

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

The trade receivables amounted to £2.326 million (2019: £0.257 million).

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

FAIR VALUE OF BORROWINGS

Short-term loans
Secured bank loans and overdrafts

2020
£000
565
32,595
33,160

2019
£000

1,250
47,250
48,500

Interest charged in the Income Statement for the above borrowings amounted to £0.99 million (2019: £1.08 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 2020 it is estimated that a general increase of 1 point in interest rates would decrease the Company’s profit
before tax by approximately £331,600 (2019: £485,000).

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

2020
£000

250

195

2019
£000

250

195

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13. OTHER RESERVES

Capital redemption reserve
Capital reserve
Other reserves
Balance at 31 March

2020
£000
55
25
39
119

2019
£000

55
25
39
119

Capital redemption reserve relates to buy-back of the Company’s own shares.

The Company 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 2020 stood at £39,000
(2019: £39,000).

14. PROFIT AND LOSS ACCOUNT

Balance at 1 April 2019-2018
Net profit for the year
Dividends paid
Balance at 31 March

2020
£000
322,676
26,004
(15,596)
333,084

2019
£000

312,186
26,086
(15,596)
322,676

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 £33,100 (2019: £41,6756) 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 £465,000 (2019: £1,100,015). Interest was payable on the loan at
0.5%. Interest paid in the year on this loan amounted to £3,260 (2019: £4,133).

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 £100,000 (2019: £150,000). Interest was payable on the loan at
0.5%. Interest paid in the year on this loan amounted to £310 (2019: £505).

d. All of the above loans are unsecured.

e. Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on

consolidation and have not been disclosed in this note.

f. The only key management are the Directors.

16. DIRECTOR’S ADVANCE, CREDITS AND GUARANTEES
As at 31 March 2020 the Company owed Mr D.M. Sinclair £38,133 (2019: £119,014) in relation to an informal loan.

17. LEASE COMMITMENTS
At 31 March 2020 the Company had aggregate annual commitments under non-cancellable operating leases as follows.

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Operating lease payments due:
Not later than one year
Later than one year and not later than five years

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2020
£000

42
33
75

2019
£000

39
26
65

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Independent Auditor’s Report

to the members of Mountview Estates P.L.C. year ended 31 March 2020

OPINION
We have audited the Parent Company Financial Statements of Mountview Estates P.L.C. for the year ended 31 March
2020 which comprises the Company Balance Sheet, Company Cash Flow and the related notes, including a summary of
significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable
law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK
and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the Parent Company Financial Statements:

• give a true and fair view of the state of the Parent Company’s affairs as at 31 March 2020;

• 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.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the parent
company financial statements section of our report. We are independent of the Parent Company in accordance with the
ethical requirements that are relevant to our audit of the Parent Company Financial Statements in the UK, including the
FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.

CONCLUSIONS RELATING TO GOING CONCERN
We have nothing to report in respect of the following matter in relation to which the ISAs (UK) require us to report to you
whether we have anything material to add or draw attention to in relation to:

•

the Directors’ statement in the Parent Company Financial Statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting in preparing the Parent Company Financial Statements and
the Directors’ identification of any material uncertainties to the Parent Company’s ability to continue to do so over a
period of at least twelve months from the date of approval of the Parent Company Financial Statements.

KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Parent
Financial Statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context
of our audit of the Parent Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.

The key audit matters relating to both the Parent Company and the Group were revenue recognition and valuation of
trading properties. An explanation of these matters and how these were addressed during our audit can be found in our
audit report on the Group Financial Statements on page 71.

We identified one key audit matter that related solely to the Parent Company, which was the recoverability of investments
in subsidiaries. Investments in subsidiaries are stated at cost as described in the Parent Company’s accounting policies
on page 78. The cost of investment should be supported by the underlying value of the subsidiaries. We tested this by a
review of the subsidiaries’ year-end financial statements. We used their net assets as an approximation of recoverable value
and compared these to the cost of investment in the Parent Company. Based on our audit testing we are satisfied with the
recoverability of investments in subsidiaries.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

OUR APPLICATION OF MATERIALITY
We determined materiality for the Company to be £3.8 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 concluded that determining materiality based on gross assets was more consistent with industry peers and
appropriately reflects the nature of the business.

In addition, we applied lower materiality of £1.6m to specific income statement items, being net trading profits, rental
income, rental expenses, administrative expenses and finance charges, and £160k for Directors transactions. We believe
misstatement of these specific income statement items and Directors’ transactions of a lesser amount than materiality for
the financial statements as a whole could reasonably be expected to influence the Company’s members’ assessment of the
financial performance of the Company.

AN OVERVIEW OF THE SCOPE OF OUR AUDIT
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 reviewed the Company’s internal controls and
obtained our audit evidence through substantive procedures.

How the scope of our audit addressed each key audit matter is described above under Key audit matters.

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OTHER INFORMATION
The Directors are responsible for the other information. The other information comprises the information included in the
annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express
any form of assurance conclusion thereon.

In connection with our audit of the Parent Company Financial Statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the Parent Company Financial
Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement of the Parent Company Financial Statements or a material misstatement of the other information.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.

OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit:

•

the information given in the strategic report and the directors’ report for the financial year for which the Parent
Company Financial Statements are prepared is consistent with the Parent Company Financial Statements; and

•

the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Independent Auditor’s Report (Continued)

to the members of Mountview Estates P.L.C. year ended 31 March 2020

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Parent Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.

We have nothing to report in respect of the following matters in relation to which 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.

RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Statement of the Directors’ Responsibilities, 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, and for such internal
control as the Directors determine is necessary to enable the preparation of Parent Company Financial Statements that are
free from material misstatement, whether due to fraud or error.

In preparing the Parent Company Financial Statements, the Directors are responsible for assessing the Parent Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Parent Company or to cease operations, or
have no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE PARENT COMPANY
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the Parent Company Financial Statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these Parent Company Financial Statements.

A further description of our responsibilities for the audit of the Parent Company financial statements is located on the FRC’s
website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS
We were appointed by the Directors on 18 March 2020. The period of total uninterrupted engagement is 14 years for the
year ended 31 March 2020.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Parent Company and its
controlled undertakings and we remain independent of the Parent Company and its controlled undertakings in conducting
our audit.

Our audit opinion is consistent with the additional report to the Audit Committee.

We have reported separately on the Group Financial Statements of Mountview Estates P.L.C. for the year ended 31 March
2020. That report includes details of the group key audit matters. The opinion in that report is unmodified

USE OF OUR REPORT
This report is made solely to the Company’s members, as a body, in accordance with chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.

Gary Allen FCA (Senior Statutory Auditor)

For and on behalf of
BSG Valentine (UK) LLP
Chartered Accountants & Statutory Auditor
Lynton House
7 - 12 Tavistock Square
London
WC1H 9BQ

9 July 2020

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Table of Comparative Figures (unaudited)

for the year ended 31 March 2020

IFRS
2014
£000

66,150
35,394
6,952
28,442
729.5p
200p
3.64
7,798
2,598
1,132

IFRS
2015
£000

71.331
39,976
8,159
31,817
816.0p
275p
2.98
10,722
3,020
1,324

IFRS
2016
£000

79,765
48,388
9,676
38,712
992.9p
300p
3.31
11,698
3,631
1,604

IFRS
2017
£000

78,232
44,986
8,761
36,225
929.1p
300p
3.17
11,698
3,747
1,768

IFRS
2018
£000

70,272
36,905
7,024
29,881
766.4p
400p
1.92
15,596
3,743
1,669

As at
31 March
2020
IFRS
2020
£000
64,873
34,941
6,645
28,296
725.7p
400p
1.81
15,596*
4,093
1,756

IFRS
2019
£000

65,428
34,567
6,559
28,008
718.3p
400p
1.75
15,596
3,928
1,667

33.32%

28.17%

31.04%

32.03%

24.00%

25.19%

26.24%

43.57%

43.84%

44.18%

47.18%

44.59%

42.44%

42.90%

14.52%

12.35%

13.71%

15.11%

10.70%

10.69%

11.26%

3.20%

3.31%

3.93%

4.52%

4.82%

5.03%

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

* The £15.6 million dividend in relation to 2020 is made up of the interim dividend of £7.80 million and the final dividend of £7.80 million,

which will be paid on 17 August 2020, subject to approval at the AGM on 12 August 2020.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notice of Meeting

IMPORTANT INFORMATION ON FORMAT OF THE ANNUAL GENERAL MEETING
At the date of the Notice of Meeting, due to the restrictions imposed by Government guidance to address the Covid-19
outbreak and to protect the health and well-being of shareholders, the Company’s Directors, employees and advisers, the
Directors have reluctantly decided that the 2020 Annual General Meeting (the AGM) cannot follow the usual format. The
recently enacted Corporate Insolvency and Governance Act 2020 provides certainty on how general meetings, including
annual general meetings, may be held prior to 30 September 2020. In light of this legislation and of the social distancing
measures and Government restrictions on public gatherings, this year the AGM will be held with only the minimum number
of shareholders present as required to form a quorum under the Company’s Articles of Association (Articles) and only to
conduct the formal business of the meeting (facilitated by the Company). There will be no formal presentations by the
Executive Directors. To ensure everyone’s safety no other shareholders will be permitted entry to the AGM.

Shareholder participation is important to the Directors and all shareholders are encouraged to vote ahead of the AGM by
appointing a proxy to vote on the resolutions set out in the notice of AGM (see page 90) as soon as possible and in any
event by 11.30 a.m. on 10 August 2020. Shareholders are strongly encouraged to appoint the Chairman of the Meeting as
their proxy in order that the Chairman can vote according to the shareholder’s wishes at the AGM to ensure their votes on
the resolutions are counted. Other named proxies will not be allowed to attend the Meeting and therefore votes of such
proxies will not be counted at the AGM. Shareholders can vote ahead of the AGM, either by completing and returning
a Proxy Form or by appointing a proxy electronically via our registrars’ website by visiting www.signalshares.com.
Shareholders will need their Investor Code which can be located on their share certificate or recent dividend confirmation.
Full instructions are given on the website.

All resolutions for consideration at the AGM will be voted on a poll, rather than a show of hands, and all valid proxy votes
cast will count towards the poll votes. The results will be announced via a regulatory announcement and will be posted on
the Company’s website as soon as practicable after the AGM.

Despite the exceptional circumstances, as well as shareholder participation at the AGM, engagement with our shareholders
is important to the Company and the Directors. Therefore, arrangements have been made so that shareholders can
participate in the AGM by submitting questions in advance. Any specific questions on the business of the AGM and on
the resolutions can be submitted ahead of the AGM by email to reception@mountviewplc.co.uk or by writing to the
Company Secretary, Mountview House, 151 High Street, Southgate, London N14 6EW. To enable shareholders to have
time to consider the responses to questions ahead of the voting deadline on 10 August 2020, please submit questions as
soon as possible and in any event no later than 31 July 2020. Responses to relevant questions submitted by 31 July 2020
will be provided, by way of a written Q&A, grouped into themes, posted on the Company’s website as soon as practicable
in advance of the AGM, and no later than 8 August 2020. Some, but not all, questions may receive individual responses.
For questions received after 31 July 2020, the Directors will endeavour to provide answers as soon as practicable but
responses may be provided after 8 August 2020. The Directors anticipate the Q&A will be grouped into themes, and where
there is overlap in submitted questions on similar or related themes one response will be provided covering the specific
issue. Responses will not be provided to questions which do not relate to the business of the meeting or that the Directors
determine require the disclosure of confidential or commercially sensitive information or are already answered on the
website or are already addressed elsewhere including in the annual report and accounts. The Company reserves the right to
answer questions only from shareholders or those otherwise legally permitted to raise questions at the Company’s AGM.

The situation relating to Covid-19 continues to develop and the Directors will continue to monitor closely the situation, as
well as the latest Government guidance, as to how it may affect arrangements for the AGM, which may have to change at
short notice. If it becomes necessary to change the arrangements for the AGM, information will be found on the Company’s
website and via a regulatory announcement.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notice of Meeting (Continued)

NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 83rd 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 on 12 August 2020 at 11.30am for the
purpose of considering and, if thought fit, passing the following resolutions which will be proposed as ordinary resolutions:

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 2020.

2. To declare a final dividend of 200 pence per share payable on 17 August 2020 to shareholders on the register at 10 July

2020.

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

4. To re-elect Mr D.M. Sinclair as a Director of the Company.

5. To re-elect Ms M.L. Archibald (formerly Jarvis) as a Director of the Company, provided that resolution 12 is passed.

6. To re-elect Mr A.W. Powell as a Director of the Company, provided that resolution 13 is passed.

7. To re-elect Dr A.R. Williams as a Director of the Company.

8. To approve the Directors’ Remuneration Report (other than the part containing the Directors’ Remuneration Policy) in

the Annual Report and Accounts for the year ended 31 March 2020.

9. To approve the Directors’ Remuneration Policy set out on pages 38 to 42 of the Directors’ Remuneration Report which
is contained in the Annual Report and Accounts for the year ended 31 March 2020, such Policy to take effect from the
conclusion of the Annual General Meeting.

10. To elect Messrs BSG Valentine as auditors of the Company to hold office from the conclusion of this meeting to the

conclusion of the next general meeting at which the Company’s annual report and accounts are laid before the meeting.

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

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

12. To re-elect Ms M.L. Archibald (formerly Jarvis) as a Director of the Company, provided that resolution 5 is passed.

13. To re-elect Mr A.W. Powell as a Director of the Company, provided that resolution 6 is passed.

By Order of the Board

M.M. Bray
Company Secretary

Mountview House
151 High Street
Southgate
London N14 6EW

9 July 2020

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Mountview Estates P.L.C. Annual Report and Accounts 2020

IMPORTANT NOTE PLEASE READ:
In contrast with previous years when conventional AGMs have been held and you were able to attend in person at the
meeting, along with the Directors and other shareholders, this year for the reasons explained on page 89 (Important
information on format of the annual general meeting) that is not going to be possible for the safety of all shareholders and
Directors.

This year, the arrangements for the 2020 AGM have been changed and the notes that accompany the Notice of Meeting
have been modified to reflect such requirements, including the altered means for shareholders to participate in the 2020
AGM. Although shareholders are not able to attend the AGM in person, shareholders can and are very much encouraged to
participate by submitting proxy votes, electronically or by proxy form by post, and questions on the business of the meeting
in advance of the AGM. In particular please note the following for this year’s AGM:

• unlike in previous years, you, or any named proxy (other than the Chairman of the Meeting), will not be able to attend

the AGM in person – shareholder engagement is important to the Directors and a facility for submitting questions in
advance of the AGM is being provided and shareholders are encouraged to ask questions via this facility.

•

the timetable for submitting proxy votes (either electronically or using the hard copy proxy form) and the proxy
deadline of 11.30 a.m. on 10 August 2020 - unlike in previous years, if you miss the deadline for submitting your proxy
appointment you will not be able to come along to the AGM and attend in person and vote on the day.

the advice to nominate the Chairman of the Meeting as your proxy and to provide voting instructions because
nominating anyone else will mean that your votes will not count.

• all resolutions will be voted on a poll, rather than on a show of hands, and all valid proxy votes cast will count towards

the poll votes – the fact you are not permitted to attend the AGM will not impact your ability to vote and provided you
appoint the Chairman of the Meeting as your proxy your vote will be counted.

•

the AGM results will be announced, as usual, via a regulatory announcement and will be posted on the Company’s
website as soon as practicable after the AGM.

the processes for inspecting Directors service contracts and letters of appointment will not permit seeing them
physically on the day of the AGM.

• any references to ‘attend’ ‘speak’ or ‘vote’ in the notice and notes are there for legal reasons for the validity of the notice

and should not be read as conveying any right to physically attend the meeting.

• modifications to the standard notes to the Notice of Meeting are shown below in bold text.

Please, therefore read the notes below carefully to learn about the altered processes and in case of any questions please
contact Link Asset Services in connection with the voting processes, or Mountview for any other matters. Their contact
details are noted below.

Voting questions: For questions on the voting process either by hard copy or via the registrar’s website please contact Link
Asset Services, by calling them on 0371 664 0300 or, if calling from overseas, on +44 (0) 371 664 0391. Calls are charged at
the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable
international rate. We are open between 09:00 - 17:30, Monday to Friday excluding public holidays in England and Wales.
You can also contact the registrar by email at enquiries@linkgroup.co.uk.

For all other matters please contact Mountview Estates P.L.C. on +44 (0)20 8920 5777 or by e-mail at
reception@mountviewplc.co.uk.

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Mountview Estates P.L.C. Annual Report and Accounts 2020

Notice of Meeting (Continued)

NOTES:
1. A Member who is entitled to attend and vote at the Meeting is entitled to appoint one or more proxies to attend, speak
and vote instead of him/her. A proxy need not also be a Member of the Company. If a Member appoints more than one
proxy to attend the Meeting, each proxy must be appointed to exercise the rights attached to a different share or shares
held by the Member. If a Member wishes to appoint more than one proxy and so requires additional Forms of Proxy, the
Member should contact Link Asset Services (PXS1), 34 Beckenham Road, Beckenham, Kent BR3 4ZF.

Due to the current Government restrictions relating to Covid-19 and restrictions on attendance at the Meeting
detailed on pages 89 and 91, all shareholders are encouraged to appoint the Chairman of the Meeting as their
proxy this year to ensure their vote is recognised at the Meeting. Other named proxies will not be allowed to
attend the Meeting.

2. A Form of Proxy is enclosed with this Notice and should be completed in accordance with the instructions contained
therein. 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, Link Asset
Services (PXS1), 34 Beckenham Road, Beckenham, Kent BR3 4ZF, by 11.30 a.m. on 10 August 2020 or in the case of any
adjournment of the Meeting, not later than 48 hours before the time of such adjourned Meeting. Amended instructions
must also be received by the Company’s Registrars by the deadline for receipt of Forms of Proxy.

3. You may also submit your voting instructions electronically via our registrar’s website. Please go to

www.signalshares.com and enter Mountview Estates P.L.C. If you have not already registered for Signal Shares you
will need to enter your Investor Code which can be found on your share certificate or last dividend confirmation. Once
registered you will be able to vote immediately by selecting ‘Proxy Voting’ from the menu. In order to be a valid proxy
appointment, the member’s electronic message confirming the details of the appointment completed in accordance
with those instructions must be transmitted so as to be received no later than 11.30 a.m. on 10 August 2020. The proxy
appointment will not be accepted if found to contain a computer virus.

4. 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 11.30 a.m. on 10 August 2020 or in the case of any
adjournment of the Meeting, not later than 48 hours before the time of such adjourned Meeting. 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, Link Asset Services (PXS1), 34 Beckenham Road, Beckenham, Kent, BR3 4ZF by 11.30 a.m. on 10
August 2020 or not later than 48 hours before the time of any adjourned Meeting.

5. 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 Members 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.

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6. 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 10 August 2020 (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.

This year please note given the current restrictions on attending the Meeting, Members will not be allowed entry
to attend the Meeting.

7. Any corporation which is a Member can appoint one or more corporate representatives who may exercise on its behalf
all of its powers as a Member, provided that, if it is appointing more than one corporate representative, it does not do
so in relation to the same shares.

This year please note given the current restrictions on attending the Meeting, corporate representatives of a
Member will not be allowed entry to attend the Meeting.

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 Conduct Authority.

9. 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, 9 July 2020, 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.

10. 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 Auditors’ 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 Auditors 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.

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Notice of Meeting (Continued)

11. In normal circumstances any Member attending the Meeting has the right to ask questions. This year due to

the current restrictions on attending the Meeting with Members not being able to attend in person, Members
are being asked to submit any questions in relation to the business of the Meeting in advance by email to
reception@mountviewplc.co.uk or by writing to the Company Secretary, Mountview House, 151 High Street,
Southgate, London N14 6EW. Please submit questions as soon as possible and in any event no later than 31
July 2020. Responses to relevant questions submitted by 31 July 2020 will be provided, by way of a written
Q&A, grouped into themes, posted on the Company’s website as soon as practicable in advance of the
Meeting, and no later than 8 August 2020. Some, but not all, questions may receive individual responses. For
questions received after 31 July 2020, the Directors will endeavour to provide answers as soon as practicable
but responses may be provided after 8 August 2020. Responses will not be provided to questions which do
not relate to the business of the Meeting or that the Directors determine require disclosure of confidential or
commercially sensitive information or are already answered on the website or are already addressed elsewhere
including in the annual report and accounts. The Company reserves the right to answer questions only from
Members or those legally permitted to raise questions at the Meeting.

12. 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.

13. As at, 9 July 2020, 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, 9 July 2020,
are 3,899,014.

14. Copies of the Directors’ service contracts and letters of appointment with the Company are available for inspection,
under normal circumstances, 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.

Given the current exceptional circumstances should a shareholder wish to inspect any of these documents please
submit a request to the Company Secretary at reception@mountviewplc.co.uk.

15. Explanatory note for resolutions 5, 6, 12 and 13

Changes to the Financial Conduct Authority’s Listing Rules (LR) in 2014 introduced new voting requirements for the
election of independent Directors in listed companies with a controlling shareholder (a shareholder who exercises 30%
or more of the votes). Under the rules, the election or re-election of any Director whom the Company has determined
to be independent under the UK Corporate Governance Code must be approved by the shareholders as a whole, and
separately by all shareholders excluding the Sinclair family concert party which is collectively deemed to be a controlling
shareholder (the Independent Shareholders). Therefore at this year’s Meeting there will be two votes each in relation
to the re-election of the Non-Executive Director, Ms. M.L. Archibald (formerly Jarvis) and the re-election of the Non-
Executive Director, Mr. A.W. Powell, one vote by the shareholders as a whole and another vote by the Independent
Shareholders.

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

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Shareholder Information

FINANCIAL CALENDAR 2020
Final dividend record date
Annual Report posted to Shareholders
Annual General Meeting
Final dividend payment
Interim results

10 July
10 July
12 August
17 August
26 November

Copies of this statement are being sent to Shareholders. Copies may be obtained from the Company’s registered office:

Mountview House
151 High Street Southgate
London
N14 6EW

All administrative enquiries relating to shareholdings should be addressed to the Company’s Registrars:

Link Asset Services (UK) Limited
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU

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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

Mountview Estates P.L.C.

Annual Report and Accounts 2020

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