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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 2021
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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 2021 Our Performance
Revenue
Gross Profit
Profit before Tax
1.2%
£65.7m
(2020: £64.9m)
4.3%
£43.2m
(2020: £41.4m)
9.2%
£38.1m
(2020: £34.9m)
Profit before Tax
*excluding Investment Properties
Revaluation
2.2%
£36.7m
(2020: £35.9m)
Shareholders’
Equity
Earnings per
Share
Net Assets per
Share
Dividend per
Share
4.0%
£394.9m
(2020: £379.6m)
9.2%
792.3p
(2020: 725.7p)
4.0%
£101.3
(2020: £97.4)
6.3%
425p
(2020: 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 225 pence per share are as follows:
Ex dividend date 8 July 2021
9 July 2021
Record date
16 August 2021
Payment date
Contents
STRATEGIC REPORT
01 Our Performance
02 Chairman’s Statement
03 Chief Executive’s Statement
04 Our purpose and how we operate
05 Where we Operate
05 Review of Operations
13 Section 172 Statement
FINANCIAL STATEMENTS
48 Consolidated Statement
of Comprehensive Income
OTHER INFORMATION
87 Notice of Meeting
94 Shareholders’ Information
49 Consolidated Statement
of Financial Position
50 Consolidated Statement
of Changes in Equity
51 Consolidated Cash Flow Statement
52 Notes to the Consolidated Financial
15 Operational response to Covid-19
Statements
GOVERNANCE
17 Directors and Advisers
18 Directors’ Report
25 Statement of Directors’ Responsibilities
69 Independent Auditors’ Report to the
Members of Mountview Estates P.L.C.
74 Company Balance Sheet under UK GAAP
75 Company Statement of Changes in
Equity under UK GAAP
76 Notes to the Financial Statements
26 Corporate Governance
under UK GAAP
31 Report of the Nomination Committee
82 Independent Auditors’ Report to
33 Report of the Audit and Risk Committee
37 Remuneration Report
the Members of Mountview Estates
P.L.C. on the Parent Company
Financial Statements
86 Table of Comparative Figures
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Mountview Estates P.L.C. Annual Report and Accounts 2021STRATEGIC REPORT Chairman’s Statement
PEOPLE
As noted above, our teams have shown agility, adaptability
and creativity during the year that not only helped navigate
the pandemic, but will also lead to improvements in our
operations going forward. On behalf of the Board I would
like to thank everyone at Mountview for their dedication,
skills and hard work that have allowed us to produce this
solid set of results. Further information about employee
engagement can be found in the Review of Operations and
the Directors’ Report.
THE COMING YEAR
In a recent ICAEW webinar on Business Resilience the
presenters noted that the key characteristics found in
resilient companies were leadership, resourcefulness and
adaptive capacity. The response of the Mountview teams to
the pandemic has demonstrated that these are qualities we
possess and which we can build on. Taken together with our
strong financial position and conservative gearing, then as
we look ahead to 2021/22 and beyond, we believe that the
business is well positioned to respond, however the markets
evolve in the coming months and as the various support
mechanisms unwind. The results from early auctions in the
current year are promising and, thus, we are hopeful that we
will be able to continue to acquire new stock to sustain the
business going forward.
A.W. Powell
Non-Executive Chairman
6 July 2021
Dear Shareholder,
INTRODUCTION
In this most unusual of times Mountview has delivered an
improved result for the year. This is despite the effect of
the lockdown restrictions in the first part of the year which
meant that our interim results showed decreases across our
main indicators. As we describe further in our note on our
operational response to Covid-19, the half year shortfall was
primarily due to backlogs of four to six weeks that built up
in the sales chain and were commensurate with the half year
fall in turnover. From this starting point we owe a huge debt
of gratitude to all at Mountview, and in particular to the
Executive Directors who guided our teams during this time,
who worked to recoup much of that backlog, and in doing
so overturn the first half shortfalls, in the second half year.
As we note on page 87, we are currently planning to
be able to welcome our shareholders back to a more
conventional AGM this year, though we remain mindful that
circumstances can change quickly. Should this be necessary
then we will make announcements through the usual
channels.
OPERATIONAL PERFORMANCE
Throughout the pandemic we had two guiding principles
– to protect the health and wellbeing of our staff and to
serve our tenants and other stakeholders in as seamless a
way as possible. While it has been a difficult year and many
of us have suffered in so many ways there have also been
some positives. Our teams have developed and mastered
new ways of working and fulfilling their responsibilities
which without the prompt of the pandemic, we may never
have considered. We will probably adopt some of these
innovations into normal practice once restrictions are lifted.
During this period, the Executives worked closely with their
teams to ensure that changes introduced did not impinge
on the quality of the work performed, and they reported
back to the Board on successes and on the challenges they
faced. Throughout the year, the Board supported them in
their work.
As Duncan describes in more detail in his statement, we
believe that it is the right thing to do to share the benefits of
what has been a remarkable performance with the staff who
helped deliver it and with our shareholders.
02
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Mountview Estates P.L.C. Annual Report and Accounts 2021 Chief Executive’s Statement
In paying enhanced bonuses and giving basic pay rises
above the national norm we have considered not only
performance but also length of service and we have tried
to give protection to the most vulnerable. Nevertheless it is
vital that the whole workforce should benefit.
We made good purchases during the year ended 31 March
2021 and have continued to do so since, and I am confident
that we will continue to source good opportunities. We only
increase the dividend when we are confident of maintaining
that increase and, indeed, I look forward to being able to
announce a future increase in dividend.
The Final Dividend, if approved at the Annual General
Meeting, will be payable on 16 August 2021 to shareholders
on the register at 9 July 2021.
D.M. Sinclair
Chief Executive Officer
6 July 2021
Dear Shareholder,
I finished this statement last year by saying “I look forward
to writing this statement in more normal times next year”.
It is now “next year” and whilst some of the post-Brexit
problems have been solved and the wonderful vaccination
programme is letting us live in less fear of Covid-19,
nevertheless the escape and recovery from the Covid-19
constraints and the damage they did to the economy will be
with us for some time.
We have not had to furlough any staff nor have we
made anyone redundant and our only benefit from any
government action has been the stamp duty holiday. As
such we may be considered lucky and we are not in a
business that has been closed down to protect us from the
pandemic, but I believe that we have made our own luck at
least in part. There has always been at least one accountant
at the helm of this business and the years of financial
prudence have ensured that we always operate within our
means and we have been able to weather the bureaucratic
delays caused by the pandemic.
All our performance indicators show an upward trend, in
particular Profit before Tax and Earnings per Share show
increases of 9.2%, and we feel able to recommend an
increase of 12.5% in the Final Dividend from 200 pence to
225 pence per share subject to shareholder approval at the
Annual General Meeting on 11 August 2021.
When Frank and Irving Sinclair started Mountview 84 years
ago I am sure that one of their primary objectives was to
enhance the lifestyle of their families. Nearly 75% of the
shares in issue are still held by the Sinclair family in their
various names and I am confident that they still benefit as
the founding fathers intended. Similarly those who have
become shareholders since we got our Stock Exchange
listing in 1960 will have benefitted on an equal basis.
We are very happy that many of our staff have been with
us for a long time. They have adapted well to the difficult
circumstances of the last financial year and our good results
are a testimony to their hard work.
Whilst we may applaud the government’s efforts to provide
the finance to help the country survive the Covid crisis we
have been warned that this will have to be repaid. Our
staff may be considered lucky to have continued in full-
time employment but we are concerned that they should
be protected from the effects of repaying what may be
considered to be other people’s debts.
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Mountview Estates P.L.C. Annual Report and Accounts 2021STRATEGIC REPORT 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
• 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
This purpose and our values have served us well during the
Covid-19 pandemic, its lockdowns and periods of relaxation
of restrictions. For example, as we describe more fully in
our notes on Covid-19 (page 15) the needs of different
stakeholder groups were often conflicting forcing a re-think
of how we work. Our responses drew on:
GOVERNANCE:
The Board has responsibility for overseeing the adoption of
ESG considerations into our decision making and our day
to day operations. For example, when making investment
decisions environmental considerations and community
impact form a part of the due diligence process. Similar
considerations apply to routine operational questions that
are delegated to our teams – including, when needed,
an escalation process to have proposed courses of action
considered by the Executives or the Board. ESG matters
identified or escalated, are reported by exception to the
Board and considered during our discussion of risks facing
the business.
STAKEHOLDERS AND SOCIAL AND COMMUNITY
ISSUES:
We describe on page 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.
Our approach to employee engagement, training and
diversity matters is set out in the Directors’ Report on
page 22.
Given the size of the Group and the nature of its business
as a property trading company, the Group has developed
informal approaches to social, human rights or community
issues, that are based on our values and which are reflected
in our staff manual and also our supplier code of conduct,
but without being converted into formal umbrella policies.
•
the long experience of our staff in both the Group and
the markets aligned with
THE ENVIRONMENT:
Similarly, for the environment, as explained more fully
on page 22, we adopt practices aimed at reducing
our environmental impact and thus contributing to
addressing climate change. We use sustainable energy
suppliers where possible and promote the use of eco
products and recycling in our operations. However, as our
total carbon footprint is minute in a UK context (see our
Carbon report on pages 20 and 21) we have not converted
these principles into a formal policy. We keep this under
review, including during discussion of risk at Board
meetings, and should we conclude that, from either internal
or external sources, formal policies are warranted we would
develop and adopt them.
• creativity, as we adapted our work to the changed
circumstance, followed by
•
learning and continuous improvement as we
implemented changed processes and
• communications with affected stakeholder groups so
that they understood what was being done and why.
CORPORATE RESPONSIBILITY:
The Group recognises that it has a role that extends beyond
the direct legal and financial obligations that follow from
carrying out its day to day operations for example into wider
societal and environmental (ESG) areas that are of concern
to the UK as a whole and where collective action is needed
to address current and emerging issues. We note below
and elsewhere in this report examples of how we view these
responsibilities and the steps we have taken to build them
into our day to day activities:
04
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Mountview Estates P.L.C. Annual Report and Accounts 2021 Where we Operate
KEY
34.9% London (North)
22.5% London (South)
20.1% South East
Bedfordshire
Berkshire
Buckinghamshire
Cambridgeshire
Essex
Hertfordshire
Middlesex
Norfolk
Northamptonshire
Oxfordshire
Suffolk
13.2% South
Dorset
Hampshire
Isle of Wight
Kent
Surrey
Sussex
2.2% North
Midlands
Derbyshire
Leicestershire
Nottinghamshire
7.1% Remainder of
England and Wales
The figures on the map are calculated as a
percentage of the total value of Inventories of
Trading properties.
2.2%
7.1%
20.1%
34.9%
13.2%
22.5%
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 residential units
• Life tenancy residential 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
£65.7m
Gross Profit
£43.2m
(2020: £64.9m)
(2020: £41.4m)
Analysis of the Group Trading portfolio
by type as at 31 March 2021
Regulated, Assured Shorthold
tenancies, & Other
Assured tenancies
Life tenancies
Freehold & leasehold ground rents
No.
of units
Cost
£m
1,898
321.31
253
227
1,162
36.71
32.68
7.47
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Mountview Estates P.L.C. Annual Report and Accounts 2021STRATEGIC REPORT Review of Operations (Continued)
Analysis of the Group Trading portfolio at the lower of cost and estimated net realisable value by geographical location
as at 31 March 2021
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
132.13
73.63
74.64
47.05
8.17
22.40
0.55
15.09
5.11
5.60
0.52
5.81
6.30
0.84
0.16
0.07
0.10
–
34.90
22.49
20.07
13.24
2.21
7.09
VACANT PROPERTIES
The number of properties which were vacant and their status at the end of the financial year are set out below.
Exchanged and due for completion
Under offer
Marketed by private treaty
Marketed for rent
Scheduled for Auction
Not self contained/requiring remedial works
Legal and insurance issues
Properties to be inspected
31.03.21
31.03.20
13
17
12
2
6
10
11
2
73
21
29
7
0
6
4
8
0
75
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 £46.7 million (2020: £45.7 million), demonstrating the liquidity of the Portfolio.
The average sales price achieved was £291,706 (2020: £274,000).
The sales figure of £46.7 million includes an amount of £975,000 for a lease extension on one property.
The Group’s sales for financial years 2021 and 2020 are set out below
Sales
Gross sales of properties
Cost of properties sold
06
2021
£m
46.67
17.81
2020
£m
45.65
17.69
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Mountview Estates P.L.C. Annual Report and Accounts 2021 Sales price range – 2021
1 million +
500,000 – 1 million
below 500,000
Sales price range – 2020
1 million +
500,000 – 1 million
below 500,000
No of units Sales price £m
1.5
11.1
34.1
1
15
144
No of units Sales price £m
1
15
151
2.0
10.7
33.0
Location
London & South East
London & South East
London & others
Location
London & South East
London & South East
London & others
Further information is provided in Note 4 to the Consolidated Financial Statements on page 58.
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.
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, in its current condition, were to be vacant at the date of the
balance sheet.
ANALYSIS OF ACQUISITIONS
The Group’s acquisitions for financial years 2021 and 2020 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 2021
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
Summer Portfolio
The portfolio comprised 53 regulated tenancies.
Year ended 31 March 2020
Regulated, ASTs, and other
Assured tenancies
Life tenancies
Leasehold ground rents
Ground rents created
Total
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Cost £m
21.16
0.24
0.27
0.01
–
21.68
No. of units
68
4
4
6
16
98
16
No. of units
53
Cost £m
16.05
No. of units
Cost £m
38
5
2
5
7
57
13.08
1.30
0.24
0.80
–
15.42
07
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Mountview Estates P.L.C. Annual Report and Accounts 2021STRATEGIC REPORT Review of Operations (Continued)
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.
RENTAL INCOME
The Company’s rental income is derived from five different
sources:
• Regulated tenancies
• Assured tenancies
• Assured shorthold tenancies
• Life tenancies
• Ground rents
Where possible we still target those properties where
the rent is capped and where our team has identified
opportunities to make key improvements. For example,
after discussing proposals with the tenant, installing services
and amenities that have been lacking in the past can both
improve conditions for our tenants and lead to an increase
in rental income.
13
No. of units
Cost £m
6
1.77
No. of units
Cost £m
10
4.00
Thus, looking ahead we believe that we are well placed to
continue rental and property sales activities and that we
will identify similar purchase 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 2021
is as follows:
The operating contribution from the core business
(comprising profits on sale of trading properties and rental
income) is analysed in Note 4 on page 58.
Louise Goodwin Limited
A.L.G. Properties Limited
2021
27 units
4 units
2020
27 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.
SUMMARY PROSPECTS FOR THE GROUP
This time last year we were still getting to grips with the
short and potential longer term impact that Covid-19 may
have had on the business. In the event, after an initial
slowing down of transaction flow as the various players
in the sales chain adapted and reorganised to operate
under lockdown, we have largely caught up our backlog of
property sales. As can be seen above, we have also been
able to take advantage of good purchasing opportunities
– both for portfolios and for individual properties coming
onto the market.
During 2020-21, the professional knowledge and skills of our
compact team ensured that, as well as overseeing a healthy
sales stream, we were able to purchase properties for a total
of £21.68 million. In the process we have learned how to do
this under lockdown conditions meaning that however the
pandemic evolves we are confident of being able to sustain
both our purchase and sales activities.
08
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Mountview Estates P.L.C. Annual Report and Accounts 2021 We will continue to maintain our strategy for the investment portfolio, deriving rental income in the short to medium term
and capital through sales during favourable market conditions. During the year there were no sales of investment properties
(2020: 4 units for £4.195 million). 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 increased during the year by £1,452,000 (2020: decreased £969,000). 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 62.
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 as well as this Strategic Report. The Group has the following Financial Key
Performance Indicators:
FINANCIAL KEY PERFORMANCE INDICATORS
REVENUE (£m)
1.2%
65.7
64.9
PROFIT BEFORE TAX (£m)
9.2%
38.1
34.9
INTEREST COVER IN RELATION
TO PROFIT BEFORE INTEREST
AND TAXATION
57.5
56.0
36.0
2021
2020
2021
2020
2021
2020
EARNINGS PER SHARE (Pence)
9.2%
NET ASSETS PER SHARE (£)
4.0%
GEARING RATIO (%)
792.3
725.7
101.3
97.4
7.2
5.1
2021
2020
2021
2020
2021
2020
DIVIDEND PER SHARE
FOR YEAR (Pence)*
6.3%
425
400
2021
2020
* Subject to the approval by shareholders of final dividend
of 225 pence at the 2021 Annual General Meeting
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Mountview Estates P.L.C. Annual Report and Accounts 2021STRATEGIC REPORT Review of Operations (Continued)
NON FINANCIAL METRICS:
coming year.
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 as they 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
and price of the properties sold and the current market
appetite for the properties that are sold.
Consequently, in view of this and the stable and long
standing nature of the Group’s business model and
operating procedures, and the very close involvement of
the Executive Directors in the day to day operations of the
business, the Group has not developed and does not use
non-financial indicators as the Executive Directors believe
that they would not add to the Group’s ability to manage
the business day to day.
The Board do receive regular updates from the Executive
Directors and also from the heads of department who report
on salient matters arising in their areas of responsibility and
on their programme of upcoming routine and project work.
These reports do not contain standard recurring statistics
focusing instead on immediate matters for consideration
that vary meeting to meeting.
RISK REVIEW – PRINCIPAL RISKS AND
UNCERTAINTIES RISKS POSED BY
COVID-19
In our 2020 Annual Report we specifically considered risk
by risk the possible impact that Covid-19 could have on
the business. In the event, for the most part these risks did
not materialise and while initially there were delays while
other providers and professionals in our supply chains
re-organised to work within the restrictions placed by the
Government’s response to the virus, once revised working
process were established these delays were reduced. By the
end of the year the revised working practices introduced
by the Group and its suppliers meant that business activity
was back up towards pre-pandemic levels of performance.
The exception was in relation to risk 7 – Operations and
Property Maintenance where some tenants were reluctant to
allow contractors or inspectors into their homes due to their
personal circumstances. We respected these wishes so only
essential work was carried out by contractors who abided by
our Covid 19-secure regime. Throughout we have remained
in contact with affected tenants to identify when there may
be changes that might permit non-essential works to be
carried out and we are hopeful that with the advent of the
vaccines that we will be able to catch up this backlog in the
As a result for this year we have removed the specific
references to Covid-19 from the commentary on the
underlying risks. A fuller note of our approach to our
work during the pandemic, including risk management, is
contained in the separate note on Covid-19. This position
will be kept under constant review.
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 2021, with good purchasing again
during the year. The ‘Analysis of Acquisitions’ is on page 7.
2. MARKET
RISK
Weak macro-economic conditions – for example arising
from bedding in of the UK’s trade deal with the EU or the
longer term impact of Covid-19.
MITIGATION
The Group’s exposure is weighted towards the stronger
London and South East markets and this geographical area
has over the long term consistently been an above-average
performer.
3. FINANCIAL
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 9. Details of the Group’s current
facilities are set out in Note 18 on pages 64 and 65.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 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.
5. PEOPLE
RISK
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 9 and 10 of the Directors’
Report on page 22.
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.
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.
Our Compliance Officer monitors our performance against
existing regulations and tracks and prepares for new
requirements as they are published.
8. CLIMATE
RISK
The impact on the Group of climate related matters. For
example changing weather patterns, including extreme
weather events, that could lead to increased wear and tear
or other property damage.
MITIGATION
The regular inspections noted above provide the Group
with opportunities to identify properties that may be at risk
which would be considered for more frequent inspections.
Due diligence for purchases aims to identify properties
with higher than normal inherent risks for flooding or other
water risks.
EMERGING RISK
As well as monitoring the incidence of currently identified
risks we also look for emerging trends in operations that
could become active risks. In addition, we carry out horizon
scanning through our network of stakeholders, notably our
advisers, and also by reviewing published emerging risk
reports.
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. 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 2020 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 the viability
statement on page 12.
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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
• The Group maintains contingency and succession
planning covering the unexpected absence of key
members of staff.
Given Mountview’s strong financial position each of the
Directors considers that the Group 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.
VIABILITY STATEMENT
In accordance with the 2018 UK Corporate Governance
Code (the Code) the Board has assessed the prospects
of the Group over a longer period than the 12 months
required by the ‘Going Concern’ provision. The Directors
have assessed the viability of the Group over the three year
period to 31 March 2024 and conducted this review taking
account of the Group’s current financial position, longer
term strategy, principal risks and future prospects and 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 considers at each
meeting. The principal operational risks faced by the Group
and their mitigation are described on pages 10 and 11.
The Group’s Financial Risk Management Objectives and
Policies are shown in Note 3 on pages 57 and 58 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 34.
In assessing viability, the Directors considered the principal
risks (see pages 10 and 11) in severe but plausible scenarios
up to and including double digit impacts on revenue
streams, costs and interest, their potential impact and how
to manage them. In the current year this again included
scenarios reflecting different durations and impacts of
Covid-19 and the related Government’s restrictions.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 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 groups 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
pages 15 and 16.
The majority of decisions which involve stakeholders are
operational in nature and are delegated down to the teams
dealing with the individual stakeholder groups to ensure
timely responses to questions or issues raised. As described
elsewhere the Board gets regular updates from the heads of
department both through the executives and in writing. In
rare cases, for example if the needs of different stakeholder
groups, including environmental considerations, are not
aligned and time is not a critical factor, these decisions
may be referred to the Executive Directors or the Board for
consideration or endorsement of proposed action.
The Board keeps our stakeholder framework under regular
review and updates 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:
Engagement with all stakeholder groups has been modified
since the start of the pandemic meaning that face to face
contact has been rare, relying instead on technological
means for remote contact to sustain the relationships at the
necessary level. Our teams, and our customers and suppliers
have adapted to this and developed working practices that
have limited direct contact to cases where it is unavoidable.
These new processes have become effective operationally
and, we believe, effective in managing Covid-19 risks.
Throughout, communications has been the watchword
and have assisted in ensuring that stakeholder needs are
properly understood and taken into account when making
decisions. As noted in our commentary on Our purpose
and how we operate on page 4 and also the section on
our operational response to Covid-19 there were occasions
where the needs of different groups conflicted and a
decision was needed that would not fully satisfy all parties.
In taking these decisions the overall safety of the groups
affected has been the primary consideration in reaching our
eventual course of action.
1. SHAREHOLDERS
•
In addition to reporting formal financial results twice
a year, the AGM presentation and discussion and
regulatory announcements throughout the year, the
Chairman and other members of the Board hold ad hoc
meetings or calls on request with shareholders. This
includes annual discussions with the major shareholders
to gather their views on the company strategy and
business model. 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
regulatory announcements depending on the nature
of questions asked. A summary of the matters covered
in all contact with shareholders – which in 2020-21 has
been primarily by phone or other electronic means – is
given to the Board at the next available meeting after
the discussion or contact.
2. EMPLOYEES
• Section 9 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.
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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.
5. CUSTOMERS – TENANTS AND BUYERS
REGULATED TENANCIES
• 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. As described in the
section on our operational response to Covid-19 on
page 15, contact with some of these tenants has been
modified during the pandemic to reflect and respect
their individual wishes and circumstances.
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. As with the regulated tenants, our
contact has been modified during the pandemic.
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 Financial Reporting Council
(FRC), the Financial Conduct Authority (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. As described in the Audit and Risk
Committee report, 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.
8. LOCAL GOVERNMENT
• We liaise with various local Government bodies
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.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 9. PROFESSIONAL ADVISERS
CORPORATE ADVISERS INCLUDING AUDITORS
• We have long standing relationships with the advisers
noted on page 17. 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 page 35.
In addition we work with a range of other external
specialists as needed. For example in the current year
this has included working with Allsops on the valuation
of investment properties (see Note 13 on page 62),
EcoAct in relation to our Carbon reporting (see Note 7
on pages 20 to 21) 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 Contractor
Code of Conduct.
OPERATIONAL RESPONSE TO COVID-19
The Covid-19 pandemic was declared shortly before
the Company’s 2020 financial year end – a situation that
continues into the current financial year. Serving and
assisting our tenants during these challenging times became
our priority and, as described in last year’s Annual Report,
we took the steps outlined below to minimise disruption as
far as was possible. We are pleased to note that once the
modified working practices were embedded both within
the Group and also with our counterparty stakeholders,
that we have been able to establish an effective working
environment that accommodates the additional safety
measures recommended by the Government. Progress has
not always been smooth and has led to additional demands
on our teams as they adapted their ways of working to
maintain service levels as close to normal as possible. This is
particularly the case in relation to data intensive aspects of
the business for example sales, purchases and rent reviews
where our counterparties have a similarly reduced access to
their normal systems.
PERSONNEL:
In compliance with the Government guidelines we supported
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 in the high risk groups.
These staff were initially instructed to self-isolate for 12
weeks as required by the Government, and continue to
follow the guidance for their group as it evolves.
Where it is essential to come to the office we 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.
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Mountview Estates P.L.C. Annual Report and Accounts 2021STRATEGIC REPORT Review of Operations (Continued)
AUDIT:
The planning for the 2020 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 did not need to amend
our timetable for the 2020 audit or for the production of the
annual report. We have agreed a similar timetable for both
the 2021 audit and production of the annual report.
ANNUAL GENERAL MEETING:
The arrangements for the 2020 AGM were modified in
accordance with the flexibility permitted by the Corporate
Insolvency and Governance Act 2020 and with Government
guidelines in respect of Covid-19 so that the meeting was
held as a closed meeting with the minimum shareholder
attendance to be quorate and only to conduct the formal
business of the meeting.
We are hopeful that we can welcome shareholders to the
2021 AGM. The requirements for holding AGMs for the
current year are under regular review, particularly in relation
to the incidence of new variants and their potential to
spark a further wave of infection. Given these constraints
the current plans for the 2021 AGM are detailed in section
21 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
6 July 2021
No staff have been furloughed, and we did not access or
participate in any of the Government support schemes
during the pandemic. Similarly no staff have been laid
off or made redundant. In all cases we have adapted and
found solutions that have enabled a high level of continued
performance while respecting both personal and other
stakeholder health concerns.
PROPERTY INSPECTION AND
MAINTENANCE:
All contractors with whom we had worked over the previous
2 years were contacted to secure their compliance with our
policy for adherence to Government guidelines on safe
working. This policy includes wearing face masks, protective
gloves, ensuring social distance and enhanced hygiene
practices. Given the elderly profile of our tenants (a high risk
category) together with others who for other reasons fell
into the higher risk groups, compliance with this policy was
especially important.
Thus, for these higher Covid-risk tenants, we placed their
wishes to limit contact and thus risk of infection ahead of
non-essential maintenance and even of seeking access for
regulatory certification. Throughout communication was the
key with stakeholder groups so that they understood what
was being done and why. We have, therefore, 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.
We also continued to undertake all obligatory inspections/
tests where access to the property was agreed in advance
with the tenant. Where we were unable to obtain consent
to carry out the inspections/tests the reasons why were
documented to demonstrate that we have taken all
reasonable steps to satisfy our obligations.
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.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 T
R
O
P
E
R
C
G
E
T
A
R
T
S
I
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*
(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. Dr Williams 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 Group
Central Square,
29 Wellington Street,
Leeds LS1 4DL
BROKERS
Singer Capital Markets
One Bartholomew Lane,
London EC2N 2AX
FINANCIAL ADVISERS
SPARK Advisory Partners Limited
5 St John’s Lane,
London EC1M 4BH
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Mountview Estates P.L.C. Annual Report and Accounts 2021
Directors’ Report
The Directors (as listed on page 17) have pleasure in presenting to the Members their 84th Annual Report together with
the Financial Statements for the year ended 31 March 2021. The Corporate Governance Statement on pages 26 to 30 forms
part of this Directors’ Report and is incorporated into the Directors’ Report by reference. 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 57 and 58
page 25
Remuneration Report, page 47
Remuneration Report, page 42
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 19, page 24
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 48.
The Directors recommend the payment of a final dividend of 225 pence per share. The dividend will be paid on 16 August
2021, subject to approval at the Annual General Meeting (AGM) on 11 August 2021, to shareholders on the register at the
close of business on 9 July 2021.
Our proposals for running the AGM this year, in the light of the evolving provisions for Covid-19 are outlined in section 21
below. Details of the AGM, including the notice of AGM, are set out on pages 87 to 93.
2. 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
3. BOARD OF DIRECTORS
The names of the current Directors, along with their details, are set out on page 17 and are incorporated into this report by
reference.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 4. APPOINTMENT AND RETIREMENT OF DIRECTORS
The appointment and retirement of Directors is governed by the Company’s Articles of Association, the Code, the
Companies Act 2006 and related legislation. 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. Any such Director holds office until the next AGM and may offer himself/herself for
election
• 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.
In accordance with the Code all Directors will seek re-election at the 2021 AGM.
The Nomination Committee report on pages 31 and 32 describes the process currently used for identifying and appointing
new Directors to the Board.
5. SHARE CAPITAL
The authorised share capital of the Company as at 31 March 2021 was £250,000 divided into 5,000,000 Ordinary Shares of 5p,
of which 3,899,014 were in issue (2020: 3,899,014). As at 6 July 2021, 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.
6. NOTIFIABLE INTERESTS IN SHARE CAPITAL
As at 6 July 2021, 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*
Mrs M.A. Murphy** including:
• BBTJ 402,000
• 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.
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Ordinary
Shares of 5p
each
% of Issued
Share
Capital
393,193
10.08
598,545
307,000
130,250
148,220
221,937
15.36
7.87
3.34
3.80
5.69
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Mountview Estates P.L.C. Annual Report and Accounts 2021STRATEGIC REPORT Directors’ Report (Continued)
7. STREAMLINED ENERGY AND CARBON REPORTING DISCLOSURES
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 2020 to 31 March 2021.
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 67.2 tCO2e, which can be attributed as follows:
• Direct Emissions (Scope 1) 32.3 tCO2e or 48% of the total
•
Indirect Emissions (Scope 2) 23.3 tCO2e or 34% of the total
Indirect Other Emissions (Scope 3) 11.6 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 Vehicles
Subtotal
Indirect (Scope 2)
Indirect (Scope 3)
Electricity used in company hybrid vehicles
Electricity
Subtotal
WTT (All Scopes)
Subtotal
TOTAL (tCO2e)
tCO2e
17.7
14.6
32.3
0.9
22.4
23.3
11.6
11.6
67.2
% of Total
26%
22%
48%
1%
33%
34%
18%
18%
100%
1.
2.
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.
Figure 2: GHG Emissions (tCO2e) by Activity (2020-21)
22.4
15.5
11.6
17.7
Purchased
Electricity
Company
Owned Vehicles
WTT and
T&D
Natural
Gas
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Mountview Estates P.L.C. Annual Report and Accounts 2021 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 (staff and directors)
tCO2e per employee
tCO2e per £’mil turnover
2020/21
67.2
65.7
29
2.3
1.02
2019/20
% Change
80.9
64.9
29
2.8
1.25
-16.8%
1.2%
0.0%
-16.8%
-17.9%
Total emissions normalised by the number of employees decreased by 16.8%, in line with the equivalent decrease in overall
emissions, whereas total emissions per million £ of turnover, decreased by 17.9%.
YEAR-ON-YEAR ANALYSIS
Emissions produced by Mountview have decreased by 16.8% compared to last year from, 80.9 tCO2e to 67.2 tCO2e.
Scope 1 emissions have decreased by 26.6%, from 44.0 to 32.3 tCO2e compared with the previous reporting year. This is
due to:
• Emissions from company vehicles have decreased by 45.5%. This is mainly driven by a decrease in mileage due to the
pandemic and a switch from diesel fleet to plug-in hybrid vehicles.
Scope 2 emissions have increased by 3.3% compared to the previous reporting year. This can be attributed to:
• A 9% decrease in the emission factor for UK grid electricity.
• The office electricity consumption (kWh) increased by 10%; the estimated electricity consumption in managed
communal areas decreased by 1%. It should be noted that the electricity consumption of the office increased compared
to the previous year, despite that c.50% of the employees were working from home due to the regulations related to the
Covid-19 pandemic.
• The year-on-year increase of the office’s electricity consumption may be linked to increased ventilation, in adherence to
the governmental Covid-19 guidelines for air ventilation in the workplace. Increased mechanical ventilation has an effect
on the electricity consumption of the building’s ventilation systems, as observed by many office-based organisations in
the past reporting year.
• A small percentage (3.7%) of Scope 2 emissions is attributed to the to shift of company vehicles to plug-in hybrid
vehicles that consume additional electricity.
Emissions from electricity accounts for 34.5% 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 17.1p/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 2020.
REFERENCES
The following sources have been used for the completion of this document:
•
•
‘UK Government GHG Conversion Factors for Company Reporting’ for 2020, 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-2020.
‘Prices of fuels purchased by non-domestic consumers in the UK’, Table 3.4.2, March 2021, 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.
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Mountview Estates P.L.C. Annual Report and Accounts 2021STRATEGIC REPORT Directors’ Report (Continued)
8. SUSTAINABILITY AND 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 and also retain the economic and social
benefits of work done within local communities
• Using sustainable source electricity suppliers
• On expiry of leases, replacing cars leased by the Group
with hybrid models
• 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.
As noted in the Strategic Report, given the size of the
Company and the current low impact on the environment
as outlined above, the Company has informal rather than
formal environmental policies. However this matter is kept
under regular review including during consideration of risks
as an agenda item at Board meetings and should the Board
consider that due to external or internal developments that
formulating formal policies would be beneficial then we
would draft and adopt the relevant policies.
9. 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 11 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. Covid-19 has meant that much of this
contact has needed to be done remotely, building on the
relationships and understanding built prior to the pandemic.
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 receive a report
on and consider any reporting made under these provisions;
during 2020-21 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.
10. DIVERSITY
Mountview is committed to employing and retaining a
skilled workforce with a diversity of qualifications and talents
from a variety of backgrounds. Given the infrequency of
recruitment Mountview does not have a formal diversity
policy, instead having regard to evolving best practice at
the time of an appointment. 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 2021, 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 24 employees and 5 directors in the Group, 11 are
male and 18 are female.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 15. 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 9.
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 for the foreseeable future.
The Group’s longer term Viability Statement is presented on
page 12.
16. 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.
17. 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.
18. 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.
11. 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.
12 DIRECTORS’ INTERESTS IN
CONTRACTS
There was no contract in existence during or at the end of
the financial year in which a Director of the Company is, or
was, materially interested, and which is or was significant in
relation to the Group’s business.
13. DIRECTORS’ AND OFFICERS’
LIABILITY INSURANCE
The Company purchases liability insurance covering the
Directors and Officers of the Company and its Subsidiary
undertakings 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.
14. 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 inspections. We are complying with fire
and health and safety legislation. The Group satisfies its
commitments in respect of any remedial work identified by
these inspections.
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Mountview Estates P.L.C. Annual Report and Accounts 2021STRATEGIC REPORT Directors’ Report (Continued)
19. 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 Listing Rule 9.2.2AR.
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 Board confirms that, since the entry into the relationship
agreement as at 6 July 2021, 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.
20. GENERAL MEETING
At the AGM held on 12 August 2020, the resolutions
concerning the re-election of both Mr A.W. Powell and Ms
M. L. Archibald as Directors of the Company did not receive
support of a majority of the independent shareholders who
voted, which is a requirement of the Listing Rules where the
Company has a controlling shareholder, and therefore Mr
Powell and Ms Archibald stood for re-election at a general
meeting held on 23 November 2020 (General Meeting).
Both Mr Powell and Ms Archibald were re-elected at the
General Meeting. Between the 2020 AGM and the General
Meeting certain Board members contacted 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 Ms Archibald at the
General Meeting.
As reported through the regulatory announcement to the
market, following the 2020 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.
Some shareholders did not wish to 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.
21. GENERAL MEETING –
2021 AND THE IMPACT OF COVID-19
Notice of the 2021 AGM of Mountview Estates P.L.C., to be
held at Radisson Blu Edwardian Bloomsbury St. Hotel, 9-13
Bloomsbury Street, London, WC1B 3QD on Wednesday,
11 August 2021 at 11.30am, is set out on pages 87 to 93. At
the time of publication of this report, the Board has been
closely monitoring the situation with regard to Covid-19
and its potential impact on the AGM this year. As part of
its monitoring, the Board has noted the gradual easing
of public health restrictions in line with the Government’s
“COVID-19 Response – Spring 2021” roadmap (published
in February 2021). It is expected that all remaining legal
restrictions on social distancing will be lifted on 19 July 2021,
delayed from 21 June 2021. Therefore the Board proposes
to hold the 2021 AGM with shareholders permitted to
attend in person. Given the uncertainty around whether
shareholders will be able to attend the 2021 AGM, because
of the potential for tighter restrictions due to a change
in the situation with Covid-19, between the date of the
notice of the 2021 AGM and the date of the 2021 AGM we
encourage all shareholders to complete and return their
proxy form appointing the Chairman of the meeting as their
proxy. The arrangements for the 2021 AGM are set out on
pages 87 to 93.
The Board considers that the resolutions set out in the
notice of AGM are in the best interests of the Company and
its shareholders as a whole and unanimously recommends
shareholders vote in favour of them as the Directors intend
to do in respect of their own beneficial shareholdings.
The Directors’ report was approved by the Board on 6 July
2021 and is signed on its behalf by:
M.M. Bray
Company Secretary
6 July 2021
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Mountview Estates P.L.C. Annual Report and Accounts 2021 Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report, the Directors’ Remuneration Report and the Group
and Company financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the
Directors are required to prepare the Group financial
statements in accordance with International Accounting
Standards in conformity with the requirements of the
Companies Act 2006 and International Financial Reporting
Standards (IFRSs) adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union.
The Directors have elected to prepare the Company
financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (UK GAAP)
including FRS 102 and applicable law.
Under company law, the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group
and Company and of their profit or loss for that period.
In preparing these financial statements, the Directors are
required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
•
•
in respect of Group Financial Statements, state whether
they have been prepared in accordance with IFRSs as
adopted by the EU;
in respect of the Company financial statements state
whether applicable UK accounting standards have been
followed, subject to any material departures disclosed
and explained in those statements; 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 Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that its financial statements
comply with the Companies Act 2006. They have general
responsibility for taking such steps as are reasonably open
to them to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
Financial Statements may differ from legislation in other
jurisdictions.
Each of the Directors, (as set out on page 17) as at the date
of this Report, confirms to the best of their knowledge that:
• The financial statements, prepared in accordance with
the applicable set of accounting standards, give a true
and fair view of the assets, liabilities, financial position
and profit of the Group and the Company.
• The strategic report includes a fair review of the
development and performance of the business and the
position of the Group and the Company, together with
a description of the principal risks and uncertainties that
they face.
• 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 performance, business model and
strategy.
By Order of the Board
M.M. Bray
Company Secretary
6 July 2021
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Mountview Estates P.L.C. Annual Report and Accounts 2021STRATEGIC REPORT Corporate Governance
Last year we described the steps we had taken for
establishing and sustaining governance processes that
reflected both the prevailing UK Corporate Governance
Code (the Code) and the Group’s circumstances and
structure. Operating during the Covid-19 pandemic added
an extra layer of complexity to meeting this challenge, but
one that we believe we have been able to meet in a way
that has strengthened our processes by testing them under
‘stress’ and also by opening up new ways of working that
might otherwise not have been considered, for example
different means of communicating with all stakeholder
groups or scheduling of work. Our operational response to
Covid-19 is set out on page 15 and throughout this period
the Board has:
• operated as normal meeting remotely for meetings and
informal discussion between meetings
•
retained close oversight of our operations and the
continuing suitability of our strategy
• monitored our existing and emerging risks updating
our risk matrix as needed to ensure we have good risk
management and controls in place
Throughout we believe that our purpose, culture and
values have informed and supported the decisions that
we have taken, supported by the commitment, experience
and creativity of all at Mountview. In addition, effective
engagement with our stakeholders, as described in our
Section 172 statement on page 13 has underpinned our
work during the year. In particular with physical meetings
being precluded by Covid-19 our engagement with
shareholders has been primarily by electronic means.
Contact with them, and other stakeholders, is key to
understanding their views and receiving their feedback.
As a result a considerable amount of Board time has been
taken up with reporting back on contact with shareholders
and other stakeholders and discussing and responding to
points that they have raised.
2018 UK CORPORATE GOVERNANCE
CODE COMPLIANCE STATEMENT
In respect of the year ended 31 March 2021, the Company
was subject to the UK Corporate Governance Code 2018
(the Code), a copy of which can be found at www.frc.org.
uk/corporate/ukcgcode.cfm. The Board confirms that the
Company applied the principles and complied with the
provisions of the Code, except as disclosed in this section.
We remain committed to the benefits of a robust
governance framework and believe that through our
approach we are able to best safeguard the interests of,
and deliver long term value to, our shareholders and other
stakeholders. A key component of this approach is a strong
focus on remaining up to date on current and emerging
developments in our markets, legislation and regulation
and the governance environment. This we achieve through
a combination of reading, contact with our advisers and
directors attending updates, in the current year through
webinars, and then sharing salient points raised with the
rest of the Board for discussion during Board meetings. In
addition, we have again worked closely with Prism Cosec
our corporate governance consultants, and our other
advisers to identify the best ways to build evolving practice
into our approach. 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.
Equally, we recognise the value of bringing different
perspectives to bear on issues arising within the business in
terms of both contribution to debate and risk management
and mitigation. We manage this by involving our various
advisers when matters relevant to their areas of expertise
arise. In this way we are able to ensure that we get the
necessary expert input when it is needed.
Taking account of the Code in the context of our size, with
24 employees plus Directors, 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. Given this context where the Board
and the Executives in particular are much closer to the
employees and operations than is the case for most quoted
companies, we have, as envisaged by the Code, adopted
alternative solutions to provisions where we believe this to
be appropriate.
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, structure or risk environment 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.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 INDEPENDENT NON-EXECUTIVE
DIRECTORS (NEDS): (SECTION 2
PROVISION 11)
The number of independent NEDs (including the Chairman)
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 and experience
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, remains appropriate.
APPOINTMENT OF A SENIOR
INDEPENDENT DIRECTOR (SID):
(SECTION 2 PROVISIONS 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. Should this
change and the Board and shareholders consider that the
needs of the business warrant widening the NED pool to
a level that creates a clear SID role then we would appoint
one.
COMPOSITION OF COMMITTEES IN
GENERAL: (SECTION 3 PROVISION 17;
SECTION 4 PROVISION 24 AND SECTION
5 PROVISION 32)
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.
BOARD EVALUATION AND DIVERSITY:
(SECTION 3 PROVISION 21 AND 23)
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. In addition, there is no
formal policy on diversity and inclusion, again because of the
size of the Company, although the Company is committed
to equal opportunities for all and that recruitment and
selection be strictly on a the basis of merit and ability. Both
these matters are continually kept under review.
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.
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.
REMUNERATION OF THE CHAIRMAN:
(SECTION 5 PROVISION 33)
The remuneration of the Chairman is not set by the
Remuneration Committee. Instead, in line with the principle
of no one being involved in setting their own remuneration,
the Chairman’s remuneration, and that of the other
NEDs is reviewed by the Executive Directors who make a
recommendation to the Board as a whole for final approval,
within the limits set by the Company’s Articles.
IN THIS REPORT
In the following pages we describe our governance
approach under the headings:
• Board leadership and Group Purpose (page 28)
• Division of Responsibilities (page 29)
• Composition, Succession and Evaluation – the report of
the Nomination Committee (pages 31 and 32)
• Audit, Risk and Internal Control – the report of the
Audit and Risk Committee (pages 33 to 36)
• Remuneration – the report of the Remuneration
Committee (pages 37 to 47)
By Order of the Board
M.M. Bray
Company Secretary
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Mountview Estates P.L.C. Annual Report and Accounts 2021 Corporate Governance (Continued)
BOARD LEADERSHIP AND
GROUP PURPOSE
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 strategy and
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. 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 between different stakeholder groups.
SETTING OUR STRATEGY
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 Directors constantly
seek feedback from any source or stakeholder on how well
the current operations are working to meet the strategy as
the working environment evolves. Information received is
analysed for new and emerging risks and opportunities that
may have implications for the strategy and operations, and
the risks monitored.
UNDERSTANDING STAKEHOLDER NEEDS
The Board is mindful of its responsibilities towards all
stakeholders and engagement with them as described
elsewhere in this Annual Report, including:
• our purpose and wider responsibilities (page 4)
• engagement with our employees (page 13)
• engagement with stakeholder groups (pages 13 to 15)
Understanding and taking into account the short and long
term interests of stakeholders when making decisions is
central to how the Company operates, recognising that
these interests will vary by issue and that trade-offs will
often be needed as noted in our Section 172 statement
(pages 13) and our operational response to Covid-19
(pages 15 and 16).
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. During
the year all Board and committee meetings were held by
conference call due to the Covid-19 pandemic.
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. Routine operational questions are delegated
to the relevant team. However, when needed, there is an
escalation process to have a proposed course of action
considered by the Executive Directors or the Board.
The Company Secretary sends out the agenda and
supporting information to all members of the Board in
advance of Board meetings. At each meeting the Executive
Directors provide an operational update, noting any issues
arising and upcoming sales or purchases in the pipeline.
The Board receives, by rotation or exception, reports
from the heads of department again noting any issues
arising. The risk matrix, updated for any new information
or emerging risks, is reviewed as are any potential
conflicts of interest. Any meetings or other contact with
shareholders or other key stakeholders are reported back
and, where necessary, responses discussed and agreed. 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.
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, as well as
providing corporate governance updates and guidance.
The Directors consider that the small size of 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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Mountview Estates P.L.C. Annual Report and Accounts 2021 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.
Williams
6
5
6
2
6
4
2
2
6
4
2
2
6
5
6
2
6
5
6
2
1. Mr D.M. Sinclair and Mrs M.M. Bray were invited to attend 4 Audit and Risk Committee Meetings and 2 Remuneration Committee Meetings
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 2021 AGM and as set out in the
Directors’ Report on page 24 and in the Notice of Meeting
on page 89.
DIVISION OF RESPONSIBILITIES
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. On appointment as Chairman
Mr A.W. Powell was considered to be independent and
Ms M.L. Archibald is deemed to be an independent NED.
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.
OUR 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:
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Mountview Estates P.L.C. Annual Report and Accounts 2021 Corporate Governance (Continued)
THE NOMINATION COMMITTEE
This Committee is responsible for reviewing the balance
of experience, skills and knowledge on the Board, for
succession planning and recommending any appointments
to strengthen the Board’s expertise and for managing
any re-appointments as needed. Due to the small size of
the Board all members of the Board are members of the
Nomination Committee.
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 the 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.
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 47.
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, as well as
considering emerging risks faced by the Group which are set
out on pages 10 and 11 and more detail on the function of
the Audit and Risk Committee is set out on pages 33 to 36.
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 35, 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 5 to 16 together with mitigating
factors for each risk.
Management structure – The Board has overall
responsibility for the Group and, as described on page 28,
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.
Details of the Company’s financial risk management
objectives and policies are included in Note 3 to the
Consolidated Financial Statements on pages 57 and 58.
The Board is satisfied that the control procedures are
adequate to provide accurate information and safeguard
the assets of the Group.
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 2020
to the date of approval of the Annual Report and Accounts.
The effectiveness of this process is reviewed annually by the
Board.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 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
2
2
2
2
2
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 committee and the Board recognise that this means that only two of the five members are
independent NEDs which is not in accordance with Provision 17 of the Code (see Corporate Governance Report page 26)
but consider, that this is an appropriate and pragmatic alternative approach given the size of the Board.
The Nomination Committee met twice during the year ended 31 March 2021, 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.
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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Mountview Estates P.L.C. Annual Report and Accounts 2021 Report of the Nomination Committee
(Continued)
PROCESS FOR BOARD APPOINTMENTS
PROCESS FOR BOARD APPOINTMENTS
No new appointments to the Board were made during 2020/21.
The Nomination Committee has a formal appointment process in place that embraces the principles described above 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 2021, 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 24 employees and 5 Directors, 11 are male and 18 are female.
Given the size of the Company and the Board and the infrequency of appointments, the Company has no formal policy
on diversity or inclusion for either the Board or other members of staff, although the Board keeps this under review. The
Company is committed to equal opportunities for all and recruitment and selection of new Directors is strictly on the basis
of merit and ability.
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 re-election of all the Directors at the AGM in 2021, taking into account their contribution and time commitments
the review of the Group’s approach to and provisions for succession planning, taking account of the length of service of
each director, 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, knowledge
and skills 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
6 July 2021
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Mountview Estates P.L.C. Annual Report and Accounts 2021 Report of the Audit and Risk Committee
MEETINGS
Committee Member
Mr A.W. Powell - Chair
Ms M.L. Archibald
Dr A.R. Williams
Non Member
Mr D.M. Sinclair1
Mrs M.M. Bray1
Meetings
Attended
Meetings
eligible to
Attend
5
5
5
4
4
5
5
5
4
4
1. Mr D.M. Sinclair and Mrs M.M. Bray were invited to attend 4 Audit and Risk Committee meetings.
Dear Shareholder,
I am pleased to present the Audit and Risk Committee Report for the year ended 31 March 2021. 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 nature and extent
of any permitted non-audit work that may be undertaken by the external auditor. The Group’s response to Covid-19 is set
out on page 15; the impact of Covid-19 on the work of the Committee and the external audit is described in this report
where appropriate.
This report details the activities of the Committee that were undertaken during the year to 31 March 2021.
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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Mountview Estates P.L.C. Annual Report and Accounts 2021 Report of the Audit and Risk Committee
(Continued)
ACTIVITIES OF THE COMMITTEE
During the year the Committee met on five occasions, including meetings prior to the issue of the preliminary and interim
results to review audit planning and conduct and then audit recommendations, where appropriate, and consider any
significant issues arising from the audit and review process. At a meeting in March 2021 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 2020 to 31 March 2021.
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.
During the year, as part of the Financial Reporting Council’s (FRC’s) annual review of corporate reporting our 2020
annual report was selected for review. I am pleased to report that the FRC’s review of our report did not require us to
respond to any substantive questions or provide any additional information. The FRC did make a small number of minor
recommendations which have been reviewed by the Committee and the Board and are reflected in this Annual Report
where appropriate.
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
• Making recommendations to the Board regarding approval 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
RISK AND INTERNAL CONTROL
• Reviewing the principal risks and uncertainties as well as emerging risks,
including those that could affect solvency or liquidity, future performance
and its business model
• Reviewing the risk management disclosures on our approach to risk in the
Annual Report and Accounts
OTHER
• Reviewing the Committee’s Terms of Reference and monitoring its
execution
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
• External Auditor effectiveness
• External Auditor management letter, containing observations arising
from the annual audit leading to recommendations for financial reporting
improvement
• External Auditor’s remuneration and audit tender frequency (last tendered
in 2017)
• Annual report on the effectiveness of the valuer which considers the quality
of the valuation process and judgement
• Challenge the Executives in respect of both the independent external
valuations and Directors’ valuations across the entire property portfolio
• Maintenance of the Risk Register including identifying and then making a
robust assessment of the principal risks facing the Group
• Horizon scanning for emerging risks
• Review of risk disclosures as part of review of accounts
• Reviewed and confirmed the Terms of Reference; execution and
effectiveness monitored through a progress table and externally sourced
questionnaires.
• Considering the impact of Covid-19 on the system of internal controls
• Reviewed the impact on controls of staff working from home, including IT
controls over remote access.
• Considering compliance with legal requirements, accounting standards,
• Reviewed processes for monitoring new relevant regulation, including
the Listing Rules and Disclosure Guidance and Transparency Rules.
discussion with external advisers
• Reviewing the whistle-blowing policy and operation and related policies
including the anti-bribery and gift policy
• Review of whistle-blowing arrangements as set out in the staff manual.
Confirmation from the CFO that there have been none during the year
• Considering the need for an internal audit function
• Reviewed the need for an internal audit function
• Reviewing the effectiveness of internal controls
• Reviewed reports by the executive directors, senior managers, including IT,
and the external auditors on the operation of controls
34
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Mountview Estates P.L.C. Annual Report and Accounts 2021
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.
As in 2020 the 2021 Audit Report will be signed off by Gary Allen; this will be his second year as Senior Statutory 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.
Effectiveness of the external audit process: – The Committee appraised BSG Valentine’s performance and independence
by ensuring there is a comprehensive engagement letter in place, assessing their audit plan, including the quality and
consistency of their team and then assessing the quality of 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 without the Executive Directors present 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.
FRC AQR review: – During 2020, the Audit Quality Review (AQR) team of the FRC conducted a review of BSG Valentine’s
audit of the Group’s Consolidated Financial Statements for the year ended March 31, 2019. In addition to the Committee
receiving and reviewing the report the Chairman discussed the report with both the BSG Valentine team and the FRC
Review team. The final AQR report included suggestions and recommendations in relation to documentation of audit
work and conclusions, and some suggestions for modifications to audit testing. An action plan was agreed based on these
suggestions and recommendations which were largely incorporated into the 2020 audit, and which BSG Valentine have
confirmed have been adopted for the 2021 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 that falls within the category of allowed
services under the applicable Ethical Standards is reported to the Committee. The Committee can confirm that this policy
was adhered to and that no such services were provided by BSG Valentine during the year. Accordingly the Committee 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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Mountview Estates P.L.C. Annual Report and Accounts 2021 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, including the potential impact of the ongoing Covid-19 pandemic, and in particular the potential impact
of variants. The Committee are satisfied that while the virus remains a relevant factor that, at the date of signing this report,
a reverse scenario with the potential to seriously damage the validity of either statement is unlikely.
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 23. The viability statement can be found on page 12.
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 2021 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 during the year. The Committee, in conjunction with
the other Directors, had input into the actions taken to mitigate the impact of the virus on the business
(see page 15). Similarly the constraints needed to combat the virus affected the conduct of the audit, thus
the Chairman had frequent contact with the audit partner to discuss the planning and progress of the
audit. The Committee are satisfied that the arrangements put in place were appropriate to ensure a robust
audit was carried out. Finally, as noted 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.
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 2021/22
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 2021/22 this will continue to include
monitoring evolving best practice under the Code and other regulations. In particular for 2021/22 this will include the
changes in the Listing rules to accommodate reporting on the Task Force on Climate Related Financial Disclosures (TFCD)
Recommendations and Recommended Disclosures and the progress of the ongoing BEIS consultation on Restoring trust
in audit and corporate governance. In addition the Executive Directors have identified certain processes developed during
the pandemic that can improve our working efficiency and/or service to tenants and other stakeholders in ‘normal’ times. As
these processes are refined for adoption, they will be discussed to assess their impact, if any, on the control environment.
A.W. Powell
Chairman of the Audit and Risk Committee
6 July 2021
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Mountview Estates P.L.C. Annual Report and Accounts 2021 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
6
6
6
2
2
6
6
6
2
2
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 2021 Remuneration Report for
which we are seeking your support at our AGM on 11 August 2021.
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, as well as
being in accordance with the approved remuneration policy.
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 Remuneration Committee has reviewed these terms of reference and confirmed that
they remain appropriate.
ACTIVITIES OF THE COMMITTEE
The Remuneration Policy applying to this report was approved by a majority vote in favour of the policy at the AGM held on
12 August 2020 and effective at that date.
The main work of the Remuneration Committee in the current year has been the application of this policy in the
determination of the Executive Directors’ awards in the context of the unusual and challenging circumstances presented by
the Covid-19 pandemic.
In considering the awards we were mindful of the impact that Covid-19 had on the Group and on the wider UK economy.
It became increasingly apparent that many of the companies which have been regarded as within the peer group over the
last few years are in real estate sub-sectors that are being severely impacted by Covid-19, reducing their comparability and
usefulness. To this end the Remuneration Committee did take note of data from this group but we placed less weight on it
than in prior years, applying our own discretion when reaching decisions.
The pandemic was declared very close to the Company’s year-end in 2020. We have now experienced 12 months of the
Covid-19 impact and we are pleased to note, as reported elsewhere in this Annual Report and Accounts, that through the
last financial year the Group has been able to successfully continue to perform in the end delivering results ahead of those
in previous years. Furthermore, the Company managed the staffing and running of the day to day function of Mountview
Estates with no necessity for furlough or use of any other Government Covid-19 specific aid. We feel it is valid to adopt the
award approach used last year whereby the Remuneration Committee did not believe that measures taken by others whose
financial results have been significantly affected by the pandemic, including deferral of bonuses or salary, were appropriate.
As described elsewhere in this Annual Report and Accounts, the Group’s performance in the first half of the year was
adversely affected by the first lockdown leading to half year results that were down on the corresponding period of the
previous year. However, in the second half of the year the Executives and the teams at Mountview have recovered these
shortfalls and delivered an annual outturn that is above that of the previous year. To recognise the supreme effort put in by
Mountview’s teams in delivering this result, bonuses in the current year were increased by approximately a third of last year’s
bonuses (see table of Percentage change in remuneration of directors and employees on page 45) and in addition staff
were awarded salary increases at approximately double the levels of previous years.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 Remuneration Report (Continued)
In reviewing the bonus figures for the year, the Remuneration Committee has adopted the approach used in prior years of
taking into account the financial metrics of the Group (primarily profit before tax), non-financial factors and, where relevant,
peer group and market benchmarks and trends. Applying these principles to the year under review the bonus awards for
the CEO and CFO were set at £497,000 and £345,000 respectively.
The Remuneration Committee has also agreed to an increase in Executive Director salaries in line with increases in prior
years, and again lower than the increase for Mountview’s staff.
REGULATORY CHANGES
In carrying out their work during the year, the Remuneration Committee’s members have continued to have regard to
the changing regulatory environment around remuneration. In our Remuneration Report in 2020 we commented on our
recognition of the Code and legislation aimed at greater transparency and disclosure of remuneration practices. This has
continued in the current year and on page 45 we include our first presentation of the table showing the percentage change
in remuneration of Directors and employees.
We are grateful to our Executive Directors and their continuing efforts to deliver the best results to shareholders and
other stakeholders in line with our strategy in markets that have been challenging amidst a year of uncertainty, requiring
adaptability and resilience in response to the evolving Covid-19 pandemic. I am also thankful for the valuable contributions
of my fellow Committee members throughout the year.
M.L. Archibald
Chairman, Remuneration Committee
6 July 2021
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Mountview Estates P.L.C. Annual Report and Accounts 2021 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.
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 with seniority, inflationary increases,
personal performance, changes in responsibilities and the peer group in mind; 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).The Remuneration Committee then takes these factors concerning historical and current
performance and context into account when applying its judgement and discretion in the process for determining awards.
Given that the Executive Directors (particularly the CEO) have significant holdings of the Company’s shares that were
not acquired though a share based incentive scheme, the Remuneration Committee does not consider that a long-term
incentive share scheme (LTI) or other similar share schemes are appropriate and that no post-employment holding period
is required. Similarly, the Committee consider that in view of these factors and the experience and long service of the
Executive Directors, malus and clawback provisions are not appropriate at this time. The role of an LTI, post-employment
holding period 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.
USE OF METRICS WHEN CONSIDERING THE STI;
As was noted under the heading ‘Overview of the Review’ in the 2020 ARA, the Remuneration Committee considered
metrics that might be appropriate for the short-term incentive. As noted elsewhere in this Annual Report and Accounts,
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 incentive 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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Mountview Estates P.L.C. Annual Report and Accounts 2021 Remuneration Report (Continued)
REMUNERATION POLICY
Set out below is the Remuneration Policy approved by shareholders at the Annual General Meeting held on 12 August
2020.
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. .
EXECUTIVE DIRECTORS
Component
BASE SALARY*
Purpose and link to strategy
Operation
Opportunity
Performance metrics
PENSION*
Purpose and link to strategy
Operation
Opportunity
Performance metrics
BENEFITS*
Purpose and link to strategy
Operation
Opportunity
Performance metrics
SHORT TERM INCENTIVE*
Purpose and link to strategy
Operation
Opportunity
Performance metrics
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.
None
To attract and retain high quality Executives by providing income in retirement.
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.
None
To aid the recruitment and retention of high quality Executives.
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.
None
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.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 NON-EXECUTIVE DIRECTORS
The policy on Non-Executive Directors’ fees is set out below:
Component
FEES
Purpose and link to strategy
Operation
Opportunity
Performance metrics
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.
None
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 2021 Remuneration Report (Continued)
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 2021
Unexpired Term
Notice Period
24 months
5 months
33 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.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 ILLUSTRATION OF POSSIBLE OUTCOME IN CEO AND CFO REMUNERATION £000s
Base Salary
Fixed Benefits
Variable
At expectation*
Minimum**
Maximum***
CEO
CFO
CEO
CFO
CEO
CFO
591
(52.4%)
450
(55.8%)
591
(96.0%)
450
(100%)
591
(39.3%)
450
(40.0%)
25
(2.2%)
357
(44.2%)
25
(4.0%)
25
(1.7%)
513
(45.4%)
887
(59.0%)
675
(60.0%)
Total
1,129
807
616
450
1,503
1,125
* 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 2020/21.
** Minimum is based on fixed remuneration consisting of projected annual salary for 2021/22 with fixed benefits but assuming no Short-Term Incentive award.
*** Maximum is based on fixed remuneration consisting of projected annual salary for 2021/22 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, and as described above also considering relative performance against the peer group and other
market metrics where relevant. As the peer group population is recognised as becoming less reliable, the Remuneration
Committee has incorporated discretion to a greater degree in this financial year.
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 2021 Remuneration Report (Continued)
ANNUAL REMUNERATION REPORT (AUDITED INFORMATION)
DIRECTORS’ TOTAL REMUNERATION SINGLE FIGURE TABLE
2021
Executive
D.M. Sinclair
M.M. Bray
Non-Executive
A.W. Powell
M.L. Archibald
Dr A.R. Williams
Salary
£000
Benefits in
kind1
£000
Total Fixed
Remuneration2
£000
Bonus3
£000
573
435
99
39
39
1,185
25
–
–
–
–
25
598
435
99
39
39
1,210
497
345
–
–
–
842
Total
£000
1,095
780
99
39
39
2,052
1.
2.
3.
The Benefits in kind are as set out in the policy table.
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 pages 37 and 38. The Company does not operate a LTI
scheme, and thus the bonus figures are the Total Variable Remuneration
2020
Executive
D.M. Sinclair
M.M. Bray
Non-Executive
A.W. Powell
M.L. Archibald
Dr A.R. Williams
Salary1
£000
Benefits in
kind2
£000
Total Fixed3
Remuneration
£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.
2.
3.
4.
Commensurate with his role as Chairman Tony Powell’s salary was increased to £99k p.a. from 1 April 2019.
The Benefits in kind are as set out in the policy table.
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 pages 37 and 38. The Company does not operate a LTI
scheme, and thus the bonus figures are the Total Variable Remuneration.
44
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Mountview Estates P.L.C. Annual Report and Accounts 2021 UNAUDITED INFORMATION
CEO SINGLE FIGURE
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
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
57.82%
53.69%
52.96%
56.70%
68.67%
88.18%
55.56%
53.33%
53.33%
38.79%
1,095
1,027
975
977
1,038
943
778
659
662
520
*
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 2020 policy applied. The figures for Bonus as
percentage of maximum bonus are different from those reported in 2020 as under the 2020 policy the maximum bonus award was changed from 250% to
150%. In addition, as noted on page 39 the Company does not operate a LTI scheme.
CFO SINGLE FIGURE
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
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
Bonus as % of
maximum bonus
*
CFO single figure of
total remuneration
£000
52.87%
48.77%
48.09%
51.62%
63.11%
80.70%
52.83%
48.00%
48.00%
34.04%
780
729
692
692
730
661
546
473
473
373
*
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 2020 policy applied. The figures for Bonus as
percentage of maximum bonus are different from those reported in 2020 as under the 2020 policy the maximum bonus award was changed from 250% to
150%. In addition, as noted on page 39 the Company does not operate a LTI scheme.
PERCENTAGE CHANGE IN REMUNERATION OF DIRECTORS AND EMPLOYEES
The percentage change in remuneration between 2020 and 2021 for the Directors and for all employees, excluding the
Directors, in the Group was:
Executive Directors
D.M. Sinclair
M.M. Bray
Non-Executive Directors
A.W. Powell
M.L. Archibald
Dr A.R. Williams
Employee population
Base
Salary
Taxable
Benefits
3.24%
3.33%
0.00%
0.00%
0.00%
4.02%
0.00%
N/A
N/A
N/A
N/A
-1.98%*
Annual
Bonus
11.19%
12.01%
N/A
N/A
N/A
32.75%
*
The staff taxable benefits have reduced as, when the recent car leases ended, a change has been made from conventional cars to hybrid cars. This switch
attracts a lower taxable benefit leading to a reduction in car benefits of 2.6% which is offset by a 0.6% increase in other staff benefits.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 Remuneration Report (Continued)
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
400
350
300
250
200
150
100
50
0
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
31/03/2021
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 2020/21 and 2019/20 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)
2.59M
DIVIDEND (£M)
TOTAL EMPLOYEE PAY
0.34M
30.89
28.30
15.59
15.59
4.43
4.09
2021
2020
2021
2020
2021
2020
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Mountview Estates P.L.C. Annual Report and Accounts 2021
STATEMENT OF IMPLEMENTATION OF REMUNERATION POLICY IN THE CURRENT FINANCIAL YEAR
Executive Directors:
With effect from 1 April 2021 the basic salary of CEO will be increased to £591k p.a. and the CFO to £450k p.a.
Non-Executive Directors:
The Board considered the fees payable to the Non-Executive Directors and approved increases from £99k to £102k for the
Chairman and from £39k to £40k for other Non-Executive Directors representing a 3% increase year on year.
DETAILS OF THE REMUNERATION COMMITTEE
During 2020/2021 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 17.
STATEMENT OF VOTING AT GENERAL MEETING
At the Annual General Meeting held on 12 August 2020 the Directors’ Remuneration Report and the Directors’
Remuneration Policy received the following votes based on proxy forms from shareholders.
Resolution
Annual report on Remuneration (2020 AGM)
Remuneration Policy (2020 AGM)
Number of
shares
2,130,838
2,130,737
Voting
for %
Number of
shares
Voting
against %
Total votes
cast
Votes
withheld
69.43%
69.43%
938,048
938,149
30.57%
30.57%
3,068,886
3,068,886
0
0
As reported in a regulatory announcement on February 12, 2021: Following the 2020 AGM in August and prior to the
general meeting held on 23 November 2020, 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. Some shareholders did not wish to
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
ML. Archibald
Dr A.R. Williams
31 March
2021
31 March
2020
596,500
12,302
100
62,312
596,500
12,302
–
62,072
* As noted on page 39 the Company does not operate any LTI or similar share schemes.
All the above interests are beneficial unless otherwise stated. There were no other changes in shareholdings during the year
and no changes between 31 March 2021 and the date of this report.
Ms. M.L. Archibald
Chairman of the Remuneration Committee
On behalf of the Board
6 July 2021
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Mountview Estates P.L.C. Annual Report and Accounts 2021 Consolidated Statement
of Comprehensive Income
for the year ended 31 March 2021
Revenue
Cost of sales
Gross profit
Administrative expenses
Gain on sale of investment properties
Operating profit before changes in fair value of investment properties
Increase/(Decrease) 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
2021
£000
65,730
(22,508)
43,222
(5,865)
–
37,357
1,452
38,809
(675)
38,134
(6,966)
(275)
(7,241)
30,893
792.3p
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
Notes
4
4
13
13
8
9
19
9
11
The Notes on pages 52 to 68 are an integral part of these consolidated financial statements.
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Mountview Estates P.L.C. Annual Report and Accounts 2021
Consolidated Statement
of Financial Position
for the year ended 31 March 2021
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 6 July 2021.
D.M. Sinclair
Chief Executive
M.M. Bray
Director
Company no: 00328020
As at
31 March
2021
£000
As at
31 March
2020
£000
Notes
12
13
15
16
18
21
22
22
22
23
18
19
18
17
1,606
25,574
27,180
398,166
1,417
597
400,180
427,360
195
25
55
56
394,540
394,871
20,600
4,351
24,951
1,280
2,142
4,116
7,538
32,489
427,360
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
The Notes on pages 52 to 68 are an integral part of these consolidated financial statements.
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS
Consolidated Statement
of Changes in Equity
for the year ended 31 March 2021
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
Changes in equity for year ended
31 March 2021
Balance as at 1 April 2020
Profit for the year
Dividends
Balance at 31 March 2021
Notes
Share
capital
£000
195
10
23
10
23
195
195
195
Capital
reserve
£000
Capital
redemption
reserve
£000
Other
reserves
£000
25
25
25
25
55
55
55
55
56
56
55
56
Retained
earnings
£000
366,543
28,296
(15,596)
379,243
Total
£000
366,874
28,296
(15,596)
379,574
379,243
30,893
(15,596)
394,540
379,574
30,893
(15,596)
394,871
The Notes on pages 52 to 68 are an integral part of these consolidated financial statements
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Mountview Estates P.L.C. Annual Report and Accounts 2021
Consolidated Cash Flow
Statement
for the year ended 31 March 2021
Cash flows from operating activities
Profit from operations
Adjustment for:
Depreciation
(Gain) on disposal of investment properties
(Increase)/Decrease in fair value of investment properties
Operating cash flows before movement in working capital
(Increase)/Decrease in inventories
Decrease/(Increase) in receivables
(Decrease)/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 (Decrease)/Increase in cash and cash equivalents
Opening cash and cash equivalents
Cash and cash equivalents at end of year
Year ended
31 March
2021
£000
Year ended
31 March
2020
£000
Notes
38,809
35,929
12
13
13
16
17
8
13
12
18
64
–
(1,452)
37,421
(6,097)
2,259
(2,688)
30,895
(675)
(6,300)
23,920
–
–
–
(10,116)
(15,596)
(25,712)
(1,792)
2,058
266
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
The Notes on pages 52 to 68 are an integral part of these consolidated financial statements.
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS
Notes to the Consolidated
Financial Statements
for the year ended 31 March 2021
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 6 July 2021.
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 financial statements were prepared under the historical cost convention, as modified by the revaluation of
investment properties.
The Group financial statements were prepared in accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006 and International Financial Reporting Standards adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union (“IFRSs 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 74 to 81.
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.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
Control is recognised when the Group is exposed to, or has rights to, variable returns from its investment in the entity and
has the ability to affect these returns through its power over the relevant activities of the entity.
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.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 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 59.
(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 using the tax rates and laws that have been enacted or substantively enacted by the reporting
date 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 2021FINANCIAL STATEMENTS Notes to the Consolidated
Financial Statements (Continued)
for the year ended 31 March 2021
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 2021 is on
page 58.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 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 cost 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
Standards, interpretation and amendments effective in the current financial year have not had a material impact on the
Group financial statements.
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 a £20 million (2020: £20 million) revolving loan facility with HSBC Bank. The termination date of this facility is
November 2023.
The Group has a £60 million (2020: £60 million) revolving loan facility with Barclays Bank. The termination date of this facility
is December 2022.
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Notes to the Consolidated
Financial Statements (Continued)
for the year ended 31 March 2021
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 by applying our buying criteria all stock is
purchased at a discount to the value with vacant possession the Directors consider the risk of impairment to be low and
accordingly the Group has no NRV provision.
Inventory expected to be settled in more than 12 months
The Board estimates that inventory of £18.2 million will be settled within the next 12 months, with the remaining inventory
value expected to be settled in more than 12 months. This estimation is based on the average cost of sales of inventory
over the last three year period. Mountview’s business, both historic and current, has involved the purchase for sale of
residential properties subject to regulated tenancies, such properties being sold when vacant possession is obtained.
Regulated tenancies by their nature are not for any specific period of time and in most cases they do not become vacant
until the death of the tenant.
It is difficult to predict with any certainty the time at which Mountview’s inventory properties might become vacant.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 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.
(C) LIQUIDITY RISK
The Group’s liquidity position is monitored daily by management and is reviewed quarterly by the Board of Directors.
The Group ensures that it maintains sufficient cash for operational requirements at all times. The nature of its business
is very cash generative from its gross rents and sales of trading properties.
In adverse trading conditions, new acquisitions can be minimised, and as a consequence will reduce the gearing level
and improve the liquidity. A summary table with the majority of financial liabilities is presented in Note 18.
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Notes to the Consolidated
Financial Statements (Continued)
for the year ended 31 March 2021
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
2021
£000
21,880
(597)
21,283
394,871
416,154
5.1%
2020
£000
33,160
(3,553)
29,607
379,574
409,181
7.2%
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
2021
£000
46,672
19,058
65,730
17,807
4,701
22,508
28,865
14,357
43,222
2020
£000
45,651
19,222
64,873
17,686
5,833
23,519
27,965
13,389
41,354
Sales of properties included in the Market Valuation undertaken by Allsop LLP as at 30 September 2014. (See Note
15 on page 64.)
Value of the Properties included in the Market Valuation as at 30 September 2014
and sold during the year ended 31 March 2021
Properties purchased since 30 September 2014 and sold during the year ended 31 March 2021
Gross sales of properties
Allsop
Valuation
£000
Sales Price
£000
26,930
–
–
42,287
4,385
46,672
The Market Values were on the basis that properties would be sold subject to any then existing leases and tenancies.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 5. SEGMENTAL INFORMATION
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks
and returns that are different from those of other business segments. The Group monitors its operations in the following
segments:
Revenue
Operating profit before changes in fair
value of investment properties
Finance costs
Profit after tax
Assets
Liabilities
Fixed assets
Capital expenditure
Depreciation
Property
trading
£000
65,216
36,997
(675)
2021
Property
investment
£000
514
360
–
401,526
28,087
25,834
4,402
Group
£000
65,730
37,357
(675)
30,893
427,360
32,489
Property
trading
£000
64,349
35,722
(988)
400,822
41,190
–
60
–
4
–
64
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
24
64
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
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
2021
£000
64
–
50
15
11
2020
£000
64
1,174
40
15
95
14,357
35
13,389
33
2021
29
2020
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS
Notes to the Consolidated
Financial Statements (Continued)
for the year ended 31 March 2021
7. STAFF COSTS (INCLUDING DIRECTORS)
Wages and salaries
Social security costs
Pension costs
Directors’ remuneration
2021
£000
3,888
491
54
4,433
2020
£000
3,554
490
49
4,093
Total Directors’ remuneration including salary, bonuses and benefits in kind amounted to:
2,052
1,933
The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on page 44.
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% (2020: 19%)
Deferred tax: Current year 19% (2020: 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% (2020: 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.
2021
£000
675
2021
£000
6,966
275
7,241
38,134
7,245
(3)
(1)
–
7,241
2020
£000
988
2020
£000
7,320
(675)
6,645
34,941
6,638
(2)
(7)
16
6,645
10. DIVIDENDS
On 12 August 2020, a dividend of 200p per share (2019: 200p per share) was paid to the shareholders. On 30 March 2021 a
dividend of 200p per share (2020: 200p per share) was paid to the shareholders. This resulted in total dividends paid in the
year of £15.6 million (2020: £15.6 million).
In respect of the current year, the Directors propose that a final dividend of 225p per share will be paid to the shareholders
on 16 August 2021. 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 2021 is payable to all shareholders on the Register of Members on 9 July 2021. The total
estimated final dividend to be paid is £8.8million.
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Mountview Estates P.L.C. Annual Report and Accounts 2021
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
2021
£000
2020
£000
30,893
3,899,014
792.3p
28,296
3,899,014
725.7p
Cost
At 1 April 2020
Additions
Disposals
At 31 March 2021
Depreciation
At 1 April 2020
Charge for the year
On disposals
At 31 March 2021
Net book value
At 31 March 2020
At 31 March 2021
Property, plant and equipment are located within England and Wales.
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.
Freehold
property
£000
Fixtures
and fittings
£000
Computer
equipment
£000
2,671
–
–
2,671
1,019
53
–
1,072
1,652
1,599
41
–
–
41
41
–
–
41
–
–
24
–
–
24
6
11
–
17
18
7
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
Total
£000
2,736
–
–
2,736
1,066
64
–
1,130
1,670
1,606
Total
£000
2,712
24
–
2,736
1,002
64
–
1,066
1,710
1,670
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS
Notes to the Consolidated
Financial Statements (Continued)
for the year ended 31 March 2021
13. INVESTMENT PROPERTIES
Fair value at 1 April 2020/(2019)
Subsequent expenditure
Disposals
Increase/(Decrease) in fair value during the year
At 31 March 2021/(2020)
2021
£000
24,122
–
–
1,452
25,574
2020
£000
28,112
–
(3,021)
(969)
24,122
The sales of investments properties are not included in the Group Revenue.
During the financial year there were no property disposals (2020: £4.195 million). In 2020 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 at 31 March 2021 by an external valuer Jeremy Mayhew-Sanders MRICS
of Allsop LLP. The valuations are done in accordance with the requirements of the RICS Valuation-Global Standards 2020.
These 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.
This time last year the Covid-19 virus outbreak was officially classified by the World Health Organisation as a worldwide
pandemic. Economies across the World faced immense disruption in 2020 and been perforated by sustained periods of
‘lockdown’ and closure in an effort to contain the spread of the virus, efforts that continue to disrupt us returning to “normal
life” as we start the second quarter of 2021.
The property market has remained open throughout the previous lockdowns, however the continued restrictions will likely
create further uncertainty, particularly if the restrictions are extended beyond the roadmap outlined by the UK Government.
One year later, however, the UK Governments vaccination programme has exceeded its own targets, lockdown restrictions
are being eased and there appears to be a feeling of cautious optimism. The UK property market has benefitted as
uncertainty recedes. Agents operating in central London report an increase in the number of new instructions and a
corresponding increase in the number of prospective buyers registering with them.
The Government’s decision to extend the temporary Stamp Duty reductions may also be playing a role in explaining this
surge of activity.
With demand at reasonable levels, values in central London are crudely back to pre- pandemic levels and, in some cases,
increasing. The recent marketing of 65F Belsize Park Gardens, within the subject portfolio, is evidence of this. A number
of prospective buyers put forward offers and the final agreed purchase price exceeded the agents guide price and
expectations.
As a result the valuers raised the value across the portfolio by £1,452,000, to the levels they were prior to the pandemic
which equates to an uplift of approximately 5%.
This is the fifth year in which Mr Mayhew-Sanders has valued the properties for accounts purposes but the tenth 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.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 13. INVESTMENT PROPERTIES CONTINUED
The aggregate Market Value of the Group’s interests in its investment portfolios was:
LOUISE GOODWIN LIMITED
• Freehold: £22,247,000 (Twenty two million, two hundred and forty seven thousand pounds).
A.L.G. PROPERTIES LIMITED
• Freehold: £3,327,000 (Three million, three hundred and twenty seven 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 increase of £1,452,000 has arisen on valuation of investment properties to Market Value as at 31 March 2021
(2020: decrease of £969,000). 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.
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
Property Investment
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Cost
2020
2021
£000
1
15,351
2,924
18,276
63
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Notes to the Consolidated
Financial Statements (Continued)
for the year ended 31 March 2021
15. INVENTORIES OF TRADING PROPERTIES
Residential properties
2021
£000
398,166
2020
£000
392,069
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 Trading Stock is carried in the Accounts
at the lower of cost and net realisable value and such is the discipline we exercise when purchasing a property that, when
influenced by the effects of property price inflation over an extended period of years, the valuation showed a spectacular
increase. 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
2021
£000
111
1,306
1,417
2020
£000
2,326
1,350
3,676
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
There are no bad or doubtful debts at the year end. There are no material debts past due, and there are no financial assets
that are impaired.
17. TRADE AND OTHER PAYABLES
Trade creditors
Other taxes and social security costs
Other creditors
2021
£000
1,672
284
186
2,142
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
64
2021
£000
331
20,600
949
21,880
2021
£000
(331)
597
266
2020
£000
1,398
251
3,181
4,830
2020
£000
1,495
31,100
565
33,160
2020
£000
(1,495)
3,553
2,058
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Mountview Estates P.L.C. Annual Report and Accounts 2021 18. BANK OVERDRAFTS, LOANS AND CASH CONTINUED
Maturity profile of financial liabilities at 31 March 2021 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
2021
£000
1,280
20,600
21,880
(1,280)
20,600
2021
%
1.70
2.07
0.50
2020
£000
2,060
31,100
33,160
(2,060)
31,100
2020
%
2.35
2.70
0.50
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 (2020: £10 million) with Barclays Bank. This is due for review
in November 2021 and the rate of interest payable is:
• 1.6% over base rate on overdraft
• Headroom of this facility at 31 March 2021 amounted to £ 9.7 million (2020: £8.5 million).
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 2021 amounted to £57 million (2020: £45 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 2021 headroom under this facility amounted to £2.4 million
(2020: £3.90 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 2021 was £949,017 (2020: £565,000).
•
Interest payable on these loans was at 0.5%.
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS
Notes to the Consolidated
Financial Statements (Continued)
for the year ended 31 March 2021
19. DEFERRED TAX
ANALYSIS FOR FINANCIAL REPORTING PURPOSES
Deferred tax liabilities
Net position at 31 March
The movement for the year in the Group’s net deferred tax position was as follows:
At 1 April
Debit /(Credit) to income for the year
At 31 March
2021
£000
4,351
4,351
2021
£000
4,076
275
4,351
The following are in deferred tax liabilities recognised by the Group and movements thereon during the period:
REVALUATION OF PROPERTIES
At 1 April
Debit/(Credit) to income for the year
At 31 March
20. FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL ASSETS
2021
£000
4,076
275
4,351
2020
£000
4,076
4,076
2020
£000
4,751
(675)
4,076
2020
£000
4,751
(675)
4,076
The Group’s financial assets at the year end, which are measured at amortised cost, consist of cash at bank and in hand of
£0.60 million (2020: £3.55 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 £0.11 million (2020: £2.33 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
2021
£000
1,280
20,600
21,880
2020
£000
2,060
31,100
33,160
Interest charged in the Income Statement for the above borrowings amounted to £0.68 million (2020: £0.99 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 2021 it is estimated that a general increase of 1 point in interest rates would decrease the Group’s profit
before tax by approximately £218,800 (2020: £331,600).
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Mountview Estates P.L.C. Annual Report and Accounts 2021 20. FINANCIAL INSTRUMENTS CONTINUED
UNDISCOUNTED MATURITY PROFILE OF FINANCIAL LIABILITIES
The following table analyses the Group’s financial liabilities and derivative financial liabilities at the Balance Sheet date into
relevant maturity groupings based on the remaining period to the contractual maturity date. The amounts disclosed in the
table are the contractual undiscounted cash flows. As the amounts included in the table are the contractual undiscounted
cash flows, these amounts will not always equal the amounts disclosed on the Balance Sheet for borrowings, derivative
financial instruments, and trade and other payables.
Trade and other payables due within 12 months equal their carrying balances as the impact of discounting is not significant.
At 31 March 2021
Interest-bearing loans and borrowings
Trade and other payables
At 31 March 2020
Interest-bearing loans and borrowings
Trade and other payables
The Group’s financial liabilities are measured at amortised cost.
RECONCILIATION OF MATURITY ANALYSIS
At 31 March 2021
Interest bearing loans and borrowings per accounts
Interest
Financial liability cash flows
At 31 March 2020
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
Less than
1 year
£000
1,280
2,142
Between
1 and 5 years
£000
20,600
–
Less than
1 year
£000
Between
1 and 5 years
£000
2,060
4,830
31,100
–
Less than
1 year
£000
1,280
442
1,722
Between
1 and 5 years
£000
20,600
697
21,297
Less than
1 year
£000
Between
1 and 5 years
£000
2,060
347
2,085
31,100
2,050
33,497
Over
5 years
£000
–
–
Over
5 years
£000
–
–
Over
5 years
£000
–
–
–
Over
5 years
£000
–
–
–
2021
£000
250
195
Total
£000
21,880
2,142
Total
£000
33,160
4,830
Total
£000
21,880
1,139
23,019
Total
£000
33,160
2,397
35,582
2020
£000
250
195
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS
Notes to the Consolidated
Financial Statements (Continued)
for the year ended 31 March 2021
22. OTHER RESERVES
Capital reserve
Capital redemption reserve
Other reserves
2021
£000
25
55
56
136
2020
£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 2021 stood at £56,000
(2020: £56,000).
23. RETAINED EARNINGS
Balance at 1 April 2020
Net profit for the year
Dividends paid
Balance at 31 March 2021
£000
379,243
30,893
(15,596)
394,540
24. RELATED PARTY TRANSACTIONS
1. During the financial year there were no key management personnel emoluments, other than remuneration.
2.
(a) Mountview Estates P.L.C. provides general management and administration services to Ossian Investors Limited
and Sinclair Estates Limited, companies of which Mr D.M. Sinclair is a Director. Fees of £34,800 (2020: £33,100) 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 £537,444 (2020: £465,000). Interest was payable on the loan
at 0.5%. Interest paid in the year on this loan amounted to £2,960 (2020: £3,260).
(c) Included within other loans repayable in less than one year and on demand was a loan from Ossian Investors
Limited. The balance outstanding at the balance sheet date was £411,573 (2020: £100,000). Interest was payable on
the loan at 0.5%. Interest paid in the year on this loan amounted to £1,210 (2020: £310).
(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.
(g) As at 31 March 2021 the Group owed Mr D.M. Sinclair £51,244 (2020: £38,133) in relation to an informal loan.
25. 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
68
2021
£000
61
63
124
2020
£000
42
33
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Mountview Estates P.L.C. Annual Report and Accounts 2021
Independent Auditor’s Report
to the members of Mountview Estates P.L.C. year ended 31 March 2021
OPINION
We have audited the Group Financial Statements of Mountview Estates P.L.C. for the year ended 31 March 2021 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 accounting standards in conformity with the requirements of the Companies Act 2006
and International Financial Reporting Standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in 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 2021 and of its profit for the year then ended;
• have been properly prepared in accordance with international accounting standards in conformity with the requirements
of the Companies Act 2006 and International Financial Reporting Standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in 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 GOING CONCERN
In auditing the Group Financial Statements, we have concluded that the director’s use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the director’s assessment of the
Group’s ability to continue to adopt the going concern basis of accounting included:
•
reviewing the headroom between the Group’s regular income and its fixed cost base;
• consideration of the liquidity of the Group’s assets;
•
•
reviewing post year end property sales;
reviewing the Group’s available bank facilities and compliance with covenants; and
• consideration of mitigating actions available to management should cash inflows be less than forecast.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are authorised for issue.
In relation to the Group’s reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
OUR APPROACH TO THE AUDIT
Our audit involved obtaining an understanding of the Group and its environment, including its control environment,
internal control systems and applicable laws and regulations. This formed the basis for our assessment of the risk of material
misstatement at the Group level.
The Group reports its operating results and financial position along two business lines, being UK residential trading
properties and investment properties. The Group comprises the Parent Company and three subsidiaries. We performed full
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Independent Auditor’s Report (Continued)
to the members of Mountview Estates P.L.C. year ended 31 March 2021
scope audits of each entity using levels of materiality applicable to each entity, which were lower than Group materiality. At
the Group level we also tested the consolidation process. There were no significant changes to our audit approach.
During 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 largely through substantive procedures.
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 53 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. Revenue was audited in each component to specific performance materiality levels, which were lower than
group performance materiality. 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 reviewed other supporting
documents to confirm the validity of each completion statement sampled. We also reconciled property stock movements
and performed appropriate cut off procedures to ensure that sales were complete and 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 – refer to page 54 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
therefore determined the valuation of inventory to be a significant risk. Property inventory was audited at component
performance materiality levels, which were lower than group performance materiality. 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, in accordance with the Group’s operating model, these were purchased at a discount to market value with vacant
possession. We also looked at movements in the UK House Price Index for property inventory locations to identify any
indicator of potential impairment. We used this risk assessment to select an appropriate sample of individual properties
for testing. For the selected sample we estimated market value with vacant possession based on publicly available price
information and by discussing valuations with Group management. 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 54 for the Group’s accounting policy in respect of the value of
investment properties
Whilst we assessed the expected movement in the valuation of investment properties to be immaterial to the Group, we
assessed the valuation of investment properties to be a significant risk as these are material to the Group balance sheet and
are subject to judgement and estimation in arriving at fair value. Investment property valuation was audited at component
performance materiality levels, which were lower than group performance materiality. The investment properties are valued
annually by a suitably independent and qualified valuer as disclosed in note 13 to the financial statements. We reviewed
the terms of engagement of the valuer, the valuation assumptions and the valuation workings. We also discussed the
methodology used with the valuer and compared the revaluation with our expectation based on market data. Based on our
audit testing we consider the valuation of investment property to be acceptable.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 OUR APPLICATION OF MATERIALITY
We determined overall materiality for the Group to be £4.3 million, which is approximately 1% of gross assets. We
concluded that determining materiality based on gross assets was consistent with industry peers and appropriately reflects
the nature of the business.
We calculated performance materiality at a level lower than materiality to reduce the probability that, in aggregate,
uncorrected and undetected misstatements exceed the materiality level for the financial statements as a whole. We
determined performance materiality to be £3.6m, which was set at 83% of overall materiality. Performance materiality was
determined based on our risk assessment and taking into account the overall control environment and the number and
complexity of components in the group. Lower levels of performance materiality were set for each entity within the Group
based on the risks assessed within each entity.
In addition, we applied a lower materiality of £1.7m to specific income statement items, being net trading profits on the
sale of properties, rental income, rental expenses, administrative expenses and finance charges, and £172k 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 and Risk 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.
OTHER INFORMATION
The other information comprises the information included in the annual report other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report. 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. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the course of 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 this gives rise to a
material misstatement in the financial statements themselves. 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 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 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 and the part of the directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ Remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Independent Auditor’s Report (Continued)
to the members of Mountview Estates P.L.C. year ended 31 March 2021
CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate
Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during
the audit:
• Directors’ statement with regards the appropriateness of adopting the going concern basis accounting and any material
uncertainties identified set out on page 23;
• Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why they
period is appropriate set out on page 12;
• Directors’ statement on fair, balanced and understandable set out on page 25;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 30;
• The section of the annual report that describes the review of effectiveness of risk management and internal control
systems set out on page 30; and
• The section describing the work of the audit committee set out on page 34
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. Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING
IRREGULARITIES, INCLUDING FRAUD
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 and Risk Committee,
together with a review of supporting documentation such as board minutes and audit committee meeting minutes. We
contacted the Group’s legal advisers and reviewed legal expenses. 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 above under key audit matters. Additionally, the risk of
management bias in the valuation of property inventory and investment property, was covered by our testing on each of
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Mountview Estates P.L.C. Annual Report and Accounts 2021 these areas as described above under 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.
OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS
Following the recommendation of the Audit and Risk Committee, we were appointed by the Directors on 23 March 2021.
The period of total uninterrupted engagement is 15 years for the year ended 31 March 2021.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or to the Parent Company
and we remain independent of the Group and the Parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the Audit and Risk Committee.
We have reported separately on the Parent Company Financial Statements of Mountview Estates P.L.C. for the year ended
31 March 2021. 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
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Company Balance Sheet
under UK GAAP
for the year ended 31 March 2021
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
The Company’s profit for the year was £27.8m (2020: £26.0m)
Approved by the Board on 6 July 2021.
D.M. Sinclair
Chief Executive
M.M. Bray
Director
Company no: 00328020
31 March
2021
£000
31 March
2020
£000
Notes
4
5
6
7
8
9
10
11
11
11
12
1,606
18,276
19,882
369,227
1,209
470
370,906
(24,617)
346,289
366,171
(20,600)
345,571
195
55
25
39
345,257
345,571
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
The Notes on pages 76 to 81 are an integral part of the Parent Company financial statements.
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Mountview Estates P.L.C. Annual Report and Accounts 2021
Company Statement of Changes
in Equity under UK GAAP
for the year ended 31 March 2021
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
Changes in equity for year ended
31 March 2021
Balance as at 1 April 2020
Profit for the year
Dividends
Balance at 31 March 2021
Share
capital
£000
195
195
195
195
Capital
reserve
£000
Capital
redemption
reserve
£000
Other
reserves
£000
25
25
25
25
55
55
55
55
39
39
39
39
Retained
earnings
£000
322,676
26,004
(15,596)
333,084
Total
£000
322,990
26,004
(15,596)
333,398
333,084
27,769
(15,596)
345,257
333,398
27,769
(15,596)
345,571
The Notes on pages 76 to 81 are an integral part of the Parent Company financial statements.
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS
Notes to the Financial Statements
under UK GAAP
for the year ended 31 March 2021
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.
As permitted by FRS 102 the Company has taken advantage of the disclosure exemptions available under that standard in
relation to financial instruments and presentation of a cash flow statement and related party transactions with other wholly-
owned members of the Group. Where required, equivalent disclosures are given in the Group accounts of Mountview
Estates plc.
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.
Company 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 2021 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 (2020: £20 million) revolving loan facility with HSBC Bank with a termination date of
November 2023.
The Company has a £60 million (2020: £60 million) revolving loan facility with Barclays Bank. The term termination date of
this facility is December 2022.
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Notes to the Financial Statements
under UK GAAP (Continued)
for the year ended 31 March 2021
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 £18.2 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:
2021
£000
3,888
491
54
4,433
2021
£000
2,052
2020
£000
3,554
490
49
4,093
2020
£000
1,933
The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on page 44.
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
2021
29
2020
29
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Mountview Estates P.L.C. Annual Report and Accounts 2021
4. TANGIBLE ASSETS
Cost
At 1 April 2020
Additions
Disposals
At 31 March 2021
Depreciation
At 1 April 2020
Charge for the year
On disposals
At 31 March 2021
Net book value
At 31 March 2020
At 31 March 2021
All tangible assets of the Company are located within England and Wales.
5. INVESTMENTS
Cost
At 1 April 2020 and 31 March 2021
Impairment
At 1 April 2020 and 31 March 2021
Carrying amount
At 31 March 2021
The Company owns 100% of the Ordinary Share capital of the following companies:
Freehold
property
£000
Computer
equipment
£000
2,671
–
–
2,671
1,019
53
–
1,072
1,652
1,599
24
–
–
24
6
11
–
17
18
7
Total
£000
2,695
–
–
2,695
1,025
64
–
1,089
1,670
1,606
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
Property Investment
2021
£000
369,227
2020
£000
363,195
2021
£000
110
1,099
1,209
2020
£000
2,326
1,244
3,570
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS
Notes to the Financial Statements
under UK GAAP (Continued)
for the year ended 31 March 2021
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
2021
£000
331
17,306
1,626
3,935
284
186
949
24,617
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
2021
£000
20,600
20,600
2020
£000
1,495
15,902
1,357
2,913
251
3,181
565
25,664
2020
£000
31,100
31,100
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 (2020: £10 million) with Barclays Bank. This is due for
review in November 2021 and the rate of interest payable is:
• 1.6% over base rate on overdraft.
Headroom of this facility at 31 March 2021 amounted to £9.7 million (2020: £8.5 million).
2. The Company has a £60 million (2020: £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 2021 amounted to £57 million (2020: £45 million).
3. The Company has a £20 million (2020: £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 2021 headroom under this facility amounted
to £2.4 million (2020: £3.9 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 2021 was £949,017 (2020: £565,000). Interest payable on these loans was at 0.5%.
10. 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
2021
£000
250
195
2020
£000
250
195
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Mountview Estates P.L.C. Annual Report and Accounts 2021
11. OTHER RESERVES
Capital redemption reserve
Capital reserve
Other reserves
Balance at 31 March
2021
£000
55
25
39
119
2020
£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 2021 stood at £39,000
(2020: £39,000).
12. RETAINED EARNINGS
Balance at 1 April
Net profit for the year
Dividends paid
Balance at 31 March
2021
£000
333,084
27,769
(15,596)
345,257
2020
£000
322,676
26,004
(15,596)
333,084
13. 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 £34,800 (2020: £33,100) 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 £537,444 (2020: £465,000). Interest was payable on the loan at
0.5%. Interest paid in the year on this loan amounted to £2,960 (2020: £3,260).
(c) Included within other loans repayable in less than one year and on demand was a loan from Ossian Investors Limited.
The balance outstanding at the balance sheet date was £411,573 (2020: £100,000). Interest was payable on the loan at
0.5%. Interest paid in the year on this loan amounted to £1,210 (2020: £310).
(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.
(g) As at 31 March 2021 the Company owed Mr D.M. Sinclair £51,244 (2020: £38,133) in relation to an informal loan.
14. LEASE COMMITMENTS
At 31 March 2021 the Company had aggregate annual commitments under non-cancellable operating leases as follows.
Operating lease payments due:
Not later than one year
Later than one year and not later than five years
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2021
£000
61
63
124
2020
£000
42
33
75
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS
Independent Auditor’s Report
to the members of Mountview Estates P.L.C. year ended 31 March 2021
OPINION
We have audited the Parent Company Financial Statements of Mountview Estates P.L.C. for the year ended 31 March 2021
which comprises the Company Balance Sheet, Company Statement of Changes in Equity 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 2021;
• 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 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
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting
in the preparation of the financial statements is appropriate. Our evaluation of the director’s assessment of the Parent
Company’s ability to continue to adopt the going concern basis of accounting included:
reviewing the headroom between the Parent Company’s regular income and its fixed cost base;
•
• consideration of the liquidity of the Parent Company’s assets;
•
•
• consideration of mitigating actions available to management should cash inflows be less than forecast.
reviewing post year end property sales;
reviewing the Parent Company’s available bank facilities and compliance with covenants; and
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Parent Company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether
the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
OUR APPROACH TO THE AUDIT
Our audit involved obtaining an understanding of the Parent Company and its environment, including its control
environment, internal control systems and applicable laws and regulations. This formed the basis for our assessment of the
risk of material misstatement. We performed a full scope audit of the Parent Company. There were no significant changes in
our audit approach.
During 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 Parent Company’s internal controls
and obtained our audit evidence largely through substantive procedures.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 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 70.
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 77. 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.
OUR APPLICATION OF MATERIALITY
We determined overall materiality for the Parent Company to be £3.9 million, which is approximately 1% of gross assets. We
concluded that determining materiality based on gross assets was consistent with industry peers and appropriately reflects
the nature of the business.
We calculated performance materiality at a level lower than materiality to reduce the probability that, in aggregate,
uncorrected and undetected misstatements exceed the materiality level for the financial statements as a whole. We
determined performance materiality to be £2.2m, which was set at 55% of overall materiality. Performance materiality was
determined based on our risk assessment, taking into account the level that we deemed appropriate for testing individual
transactions and balances, and reflecting the fact that the Parent Company is the most significant component of the Group.
In addition, we applied a lower materiality of £1.7m to specific income statement items, being net trading profits, rental
income, rental expenses, administrative expenses and finance charges, and £172k 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 Parent Company.
We agreed with the Audit and Risk 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.
OTHER INFORMATION
The other information comprises the information included in the annual report other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report. 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. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the course of 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 this gives rise to a
material misstatement in the financial statements themselves. 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.
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Independent Auditor’s Report (Continued)
to the members of Mountview Estates P.L.C. year ended 31 March 2021
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 Parent
Company 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 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 and the part of the directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ Remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ Responsibilities Statement, 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. Irregularities, including fraud, are
instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed below:
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Mountview Estates P.L.C. Annual Report and Accounts 2021 EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING
IRREGULARITIES, INCLUDING FRAUD
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 and Risk
Committee, together with a review of supporting documentation such as board minutes and audit committee meeting
minutes. We contacted the Company’s legal advisers and reviewed legal expenses. 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, and in respect of the risk of management bias in
the valuation of property inventory, as described in the Group audit report under key audit matters on page 70. 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.
OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS
Following the recommendation of the Audit and Risk Committee, we were appointed by the Directors on 23 March 2021.
The period of total uninterrupted engagement is 15 years for the year ended 31 March 2021.
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 and Risk Committee.
We have reported separately on the Group Financial Statements of Mountview Estates P.L.C. for the year ended 31 March
2021. That report includes details of the group key audit matters. 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
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Table of Comparative Figures (unaudited)
for the year ended 31 March 2021
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
IFRS
2019
£000
65,428
34,567
6,559
28,008
718.3p
400p
1.75
15,596
3,928
1,667
As at
31 March
2021
IFRS
2021
£000
65,730
38,134
7,241
30,893
792.3p
425p
1.86
16,571*
4,433
1,875
IFRS
2020
£000
64,873
34,941
6,645
28,296
725.7p
400p
1.81
15,596
4,093
1,756
28.17%
31.04%
32.03%
24.00%
25.19%
26.24%
26.76%
43.84%
44.18%
47.18%
44.59%
42.44%
42.90%
42.30%
12.35%
13.71%
15.11%
10.70%
10.69%
11.26%
11.32%
3.31%
3.31%
3.93%
4.52%
4.82%
5.03%
4.92%
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 £16.6 million dividend in relation to 2021 is made up of the interim dividend of £7.80 million and the final dividend of £8.8 million, which will be paid
on 16 August 2021, subject to approval at the AGM on 11 August 2021.
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Mountview Estates P.L.C. Annual Report and Accounts 2021
Notice of Meeting
IMPORTANT INFORMATION ON FORMAT OF THE ANNUAL GENERAL MEETING
We are keen to welcome shareholders in person to our 2021 Annual General Meeting (2021 AGM), particularly given the
constraints we faced in 2020 due the Covid-19 pandemic. In accordance with the Government’s roadmap to ease Covid-19
restrictions currently it is expected that all remaining legal restrictions on social distancing will be lifted on 19 July 2021,
delayed from 21 June 2021 as announced on 14 June 2021. The Government’s roadmap out of lockdown anticipates the
potential for the resumption of public gatherings indoors by the date of the 2021 AGM. We are therefore proposing to
hold our 2021 AGM at Radisson Blu Edwardian Bloomsbury St. Hotel, 9-13 Bloomsbury Street, London, WC1B 3QD and to
welcome shareholders in person provided we are able within the health and safety constraints of, and rules and policy of,
the venue.
The health and wellbeing of our shareholders, employees, Directors, and advisers remains the Board’s primary concern.
It is essential to remain vigilant notwithstanding the ongoing UK vaccination programme, particularly given the spread of
new variants of the coronavirus in the UK and other parts of the world. Therefore shareholders (or your proxy or corporate
representative) should consider whether it is appropriate to attend the 2021 AGM in person. For any shareholder who does
seek to attend in person strict health and safety measures will be enforced.
However, we are continuing to monitor the impact of Covid-19 including the latest Government guidance and rules, given
the constantly evolving nature of the situation which may change between the date of this Notice of the 2021 AGM and
the date of the 2021 AGM with no guarantee that the guidance will remain the same by the date of the 2021 AGM. We,
therefore, want to ensure that we are able to adapt these arrangements efficiently to respond to changes in circumstances.
On this basis, should the situation change such that we consider that it is no longer possible for shareholders to attend
the meeting we will hold a meeting with a minimum number of shareholders present as required to form a quorum in
accordance with the Company’s Articles of Association and only to conduct the formal business of the meeting (facilitated
by the Company). We will notify shareholders of the change by providing information on the Company’s website and via a
regulatory announcement.
All resolutions for consideration at the 2021 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 2021 AGM.
ATTENDANCE AT THE MEETING
Shareholders intending to attend the 2021 AGM, should this be possible, are asked to pre-register their
attendance in advance as soon as practicable, and in any event by 11.30am on 9 August 2021, by emailing
reception@mountviewplc.co.uk with their name, contact details and Investor Code or Corporate Representative letter.
For the safety of others, in line with Government guidance and rules, shareholders should not attend the 2021 AGM in
person if they are experiencing any of the symptoms connected with Covid-19 or are otherwise required to isolate or
quarantine. Shareholders will be asked to provide contact details or scan the NHS app on arrival at the venue for the 2021
AGM and face masks must be worn at all times, unless exempt. In addition shareholders may be required to make certain
confirmations as a condition of entry to the 2021 AGM including that they (or members of their household) have not recently
displayed symptoms of Covid-19 and/or have not been told to self-isolate by NHS Test and Trace, the NHS Covid-19 App or
otherwise. Shareholders’ guests will not be permitted to attend the meeting other than carers accompanying a shareholder,
although it is strongly recommended that anyone with health concerns does not attend in person. No refreshments will be
offered before or after the meeting. These arrangements, including pre-registration, apply to all persons wishing to attend
the 2021 AGM in person, including proxies and corporate representatives of shareholders.
Shareholders should continue to monitor the Company’s website www.mountviewplc.co.uk as well as regulatory
announcements for any important updates in relation to the 2021 AGM. Shareholders who have pre-registered their
attendance by emailing reception@mountviewplc.co.uk will be kept informed of any changes directly.
Shareholders are encouraged to vote in advance by appointing a proxy, regardless of whether or not they intend to attend
the 2021 AGM in person, see the details below for appointing a proxy.
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Notice of Meeting (Continued)
APPOINTING A PROXY
Shareholders can vote ahead of the 2021 AGM by appointing a proxy to vote on the resolutions set out in the Notice of
2021 AGM (see page 89) as soon as possible and in any event by 11.30am on 9 August 2021. All shareholders are strongly
encouraged to appoint the Chairman of the meeting as their proxy even if they intend to attend the 2021 AGM in person.
This is to ensure that your vote is counted even if you (or any other proxy you might otherwise appoint) are not able to
attend in person on the day of the 2021 AGM. Shareholders can vote ahead of the 2021 AGM, either by completing and
returning a Proxy Form or by appointing a proxy electronically via our registrar’s website by visiting www.signalshares.com.
Shareholders will need their Investor Code which is located on their share certificate or on a recent dividend confirmation.
Full instructions are given on the website.
The completion and submission of a form of proxy will not prevent you from attending and voting in person at the 2021
AGM, subject to prevailing Government guidance and to the restrictions set out in the Notice of 2021 AGM and as notified
by the Company website.
ENGAGEMENT
As well as shareholder participation at the 2021 AGM, engagement with our shareholders is important to the Company and
the Directors. The Directors recognise the importance of the 2021 AGM to shareholders and are keen that shareholders are
able to engage with the business of the meeting. Shareholders should submit any questions on the business of the meeting
in advance by sending them by email to reception@mountviewplc.oc.uk or writing to the Company Secretary, Mountview
House, 151 High Street, Southgate, London N14 6EW. The Company will respond as appropriate in advance of the 2021
AGM.
To enable shareholders to have time to consider the responses to questions ahead of the voting deadline on 9 August 2021,
please submit questions as soon as possible and in any event no later than 31 July 2021. Responses to relevant questions
submitted by 31 July 2021 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 2021 AGM, and no later than 7 August 2021. Some, but not all, questions
may receive individual responses. For questions received after 31 July 2021, the Directors will endeavour to provide answers
as soon as practicable but responses may be provided after 7 August 2021. 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 2021 AGM. Shareholders who pre-register to attend the 2021 AGM in person will be able to ask
questions at the meeting, subject to Government restrictions on attending the meeting.
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Mountview Estates P.L.C. Annual Report and Accounts 2021 NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 84th Annual General Meeting of the Members of Mountview Estates P.L.C. (incorporated in
England and Wales with registered number 00328020) (the Company) will be held at Radisson Blu Edwardian Bloomsbury
St. Hotel, 9-13 Bloomsbury Street, London, WC1B 3QD on 11 August 2021 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 2021.
2. To declare a final dividend of 225 pence per share payable on 16 August 2021 to shareholders on the register at 9 July
2021.
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 as a Director of the Company, provided that resolution 11 is passed.
6. To re-elect Mr A.W. Powell as a Director of the Company, provided that resolution 12 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 2021.
9. 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.
10. 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:
11. To re-elect Ms M.L. Archibald as a Director of the Company, provided that resolution 5 is passed.
12. 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
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Notice of Meeting (Continued)
IMPORTANT NOTE PLEASE READ
In contrast with previous years, excluding 2020, when conventional AGMs have been held and all shareholders were able
to attend in person at the meeting, along with the Directors, other shareholders and advisers, this year for the reasons
explained on page 87 we are once again in 2021 having to adapt the format of the 2021 AGM due to Covid-19 constraints
and Government guidance. There has been a delay to the Government’s roadmap for the lifting of all remaining legal
restrictions in respect of social contact, now expected to be lifted on 19 July 2021. We continue to monitor the impact of
Covid-19 including the latest Government guidelines and rules.
To protect the health and safety of shareholders and colleagues, please note the following measures will be put in place this
year:
• Attendance at the 2021 AGM will be restricted to shareholders only and no guests of shareholders will be permitted to
attend on this occasion, other than carers accompanying shareholders.
• To enable us to comply with the prevailing Government guidance and social distancing measures, shareholders
wishing to attend the meeting in person must notify us no later than 11.30am on Monday 9 August 2021 by email at
reception@mountviewplc.co.uk. Shareholders who have not pre-registered will not be permitted entry to the meeting.
• Upon arrival at the venue for the 2021 AGM, any shareholders pre-registered to attend the meeting will be required to
provide their contact details or scan the NHS app. In addition shareholders may be required to confirm that they do not
have any Covid-19 symptoms and are not required to self-isolate in accordance with Government guidance.
• Refreshments will not be available either before or after the 2021 AGM.
• Shareholders attending the 2021 AGM will be required to follow Government guidance on wearing of face masks (unless
exempt).
•
•
If shareholders are unable to attend the 2021 AGM in person, they are strongly encouraged to submit their votes by
proxy.
In the present circumstances, shareholders are strongly encouraged to vote in advance of the 2021 AGM by submitting a
form of proxy electronically or by post as soon as possible. These must be received by no later than 11.30am on Monday
9 August 2021. Shareholders who wish to appoint a proxy are encouraged to appoint the Chairman of the meeting as
their proxy.
Please, therefore read the notes below carefully to learn about the altered processes and in case of questions contract Link
Group in connection with the voting processes, or Mountview for any other matters. Their contact details are noted below.
Shareholders should check the Company’s website to ensure they have the most up to date information regarding the 2021
AGM. We would like to thank all shareholders in advance for their co-operation and understanding.
Voting questions: For questions on the voting process either by hard copy or via the registrar’s website please contact the
Link Group, 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 2021 NOTES:
1. Members wishing to attend the meeting, should this be possible, are asked to register their attendance as soon
as practicable by emailing reception@mountviewplc.co.uk with their name, contact details and Investor Code or
Corporate Representative letter. Rules around capacity at the venue and changes in the Government’s health and safety
requirements may mean members cannot ultimately attend the meeting.
2. Given the uncertainty around whether members will be able to attend the meeting, whether because the capacity at
the venue does not allow for safety reasons related to Covid-19 restrictions or due to a change in the situation with
Covid-19, we recommend that all Members appoint the Chairman of the meeting as proxy. This will ensure that your
vote is counted even if attendance at the meeting is restricted or you or any other proxy you might appoint are unable
to attend in person.
3. 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 Group (PSX1), Central Square, 29 Wellington Street, Leeds, LS1 4DL.
4. 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 Group
(PSX1), Central Square, 29 Wellington Street, Leeds, LS1 4DL, by 11.30am on 9 August 2021 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.
5. 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. 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 11.30am on 9 August 2021. The proxy appointment will not be accepted if
found to contain a computer virus.
6. 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 11.30am on 9 August 2021 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 Group (PSX1), Central Square, 29 Wellington Street, Leeds, LS1 4DL by 11.30am on 9 August 2021 or not
later than 48 hours before the time of any adjourned meeting.
7. 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 3 and 4
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.
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Notice of Meeting (Continued)
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.
8. 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 9 August 2021 (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.
9. 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.
10. 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.
11. 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, 6 July 2021, 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.
12. 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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Mountview Estates P.L.C. Annual Report and Accounts 2021 13. Any Member attending the meeting has the right to ask questions. The Company must cause to be answered any
question relating to the business being dealt with at the meeting put by a member attending the meeting. However,
Members should note that no answer need be given in the following circumstances:
(a) if to do so would interfere unduly with the preparation of the meeting or would involve a disclosure of confidential
information;
(b) if the answer has already been given on a website in the form of an answer to a question; or
(c) if it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
Members can also send to the Company 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 2021.
Responses to relevant questions submitted by 31 July 2021 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 7 August
2021. Some, but not all, questions may receive individual responses. For questions received after 31 July 2021, the
Directors will endeavour to provide answers as soon as practicable but responses may be provided after 7 August 2021.
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.
14. 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.
15. As at, 6 July 2021, 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, 6 July 2021,
are 3,899,014.
16. Copies of the Directors’ service contracts and letters of appointment with the Company are available for inspection at
the registered office at Mountview House, 151 High Street, Southgate, London N14 6EW during normal business hours
on weekdays (Saturdays, Sundays and English public holidays excepted) from the date of this Notice and at the place of
meeting from 15 minutes before the meeting until it ends.
Given the current circumstances should a shareholder wish to inspect any of these documents in advance
of the meeting after the Notice has been sent please submit a request to the Company Secretary at
reception@mountviewplc.co.uk.
17. Explanatory note for resolutions 5, 6, 11 and 12.
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 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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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS Shareholder Information
FINANCIAL CALENDAR 2021
Final dividend record date
Annual Report posted to Shareholders
Annual General Meeting
Final dividend payment
Interim results
9 July
9 July
11 August
16 August
25 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 Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
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Mountview Estates P.L.C. Annual Report and Accounts 2021 Mountview AR2021.indd 95
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Mountview Estates P.L.C. Annual Report and Accounts 2021FINANCIAL STATEMENTS M
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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 2021
Mountview AR2021.indd 1
Mountview AR2021.indd 1
30501
6 July 2021 8:53 am
Proof 29
06/07/2021 08:53:14
06/07/2021 08:53:14