Panther Securities Annual Report 2018

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FY2018 Annual Report · Panther Securities

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ANNUAL REPORT &
FINANCIAL STATEMENTS

201(cid:25)

Company number (cid:17)(cid:17)293147

The Year in Brief

Revenue – rents receivable

Profit before tax

Total comprehensive income for the year

Net assets of the Group

Earnings/(loss) per 25p ordinary share
Basic and diluted – continuing operations
Basic and diluted – discontinued operations

2018
£’000

13,607

8,700

6,884

94,029

2017
£’000

12,946

24,791

21,257

91,212

39.9p
—

120.2p
(0.3)p

Dividend per ordinary share
(based on those proposed in relation to the financial year)

27p*

22p**

Net assets attributable to ordinary

shareholders per 25p ordinary share

532p

516p

* 6p was paid in 2018, 15p special was paid in January 2019, and 6p is proposed (to be paid in 2019).

** 5p was paid in 2017, 10p special was paid in 2018 and 7p was paid in 2018.

Contents

The Year in Brief

Directors, Secretary and Advisors

Chairman’s Statement

Chairman’s Ramblings

Group Strategic Report

Directors’ Report

Corporate Governance

Independent Auditors’ Report on the
Consolidated Financial Statements

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Accounts

Independent Auditors’ Report on the Parent
Company Financial Statements

Parent Company Statement of Financial Position

Parent Company Statement of Changes in Equity

Notes to the Parent Company Accounts

Notice of Annual General Meeting

10 Year Review

Panther Securities P.L.C.

Directors, Secretary and Advisors

Directors

Andrew Stewart Perloff (Chairman and Chief Executive)

* Bryan Richard Galan (Non-executive)
* Peter Michael Kellner (Non-executive)

John Henry Perloff (Executive)
Simon Jeffrey Peters (Finance)

Company Secretary

Simon Jeffrey Peters

Registered Office

Unicorn House, Station Close, Potters Bar, Herts, EN6 1TL

Company number

00293147

Website

Auditor

Bankers

www.pantherplc.com

Nexia Smith & Williamson
25 Moorgate, London, EC2R 6AY

HSBC Bank PLC
31 Holborn, London, EC1N 4HR

Santander Corporate Banking
2 Triton Square, Regents Place, London, NW1 3AN

Shawbrook Bank Ltd
PO Box 878, Newport, NP20 9LJ

Nomad, Financial Advisors
and Joint Brokers

Allenby Capital Limited
5 St Helen’s Place, London, EC3A 6AB

Joint Brokers

Registrars

Solicitors

Raymond James Investment Services
77 Cornhill, London, EC3V 3QQ

Link Asset Services
The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU

Howard Kennedy LLP
1 London Bridge, London, SE1 9BG

DMH Stallard LLP
6 New Street Square, New Fetter Lane, London, EC4A 3BF

Brodies LLP
110 Queen Street, Glasgow, G1 3BX

Fox Williams LLP
Ten Dominion Street, London, EC2M 2EE

Blake Morgan LLP
New Kings Court, Tollgate, Chandler’s Ford, Eastleigh,
Hampshire, SO53 3LG

* Member of the Audit Committee and Remuneration Committee

Panther Securities P.L.C.

Chairman’s Statement

I am pleased to be able to present our accounts for the

investment market, i.e. planning permission for change

year ended 31 December 2018 which show a profit

of use, new lettings, development, or special

before tax of £8,700,000 compared to £24,791,000 for

purchasers such as tenants/adjoining owners etc.

the previous year. Both these figures were substantially

affected by non-cash adjustments to our property

Over the last two years we have been successful

portfolio valuation. Last year there was an uplift of

crystallising some of these situations. In the year ended

£16,776,000 whilst this year there was a downward

31 December 2017 as well as our usual business, we

movement of £6,396,000 in the property portfolio

also exchanged contracts for a delayed sale on a

valuation. There is no doubt that a degree of uncertainty

Croydon residential upper part and also our Holloway

has affected property values and the uncertainty

Head site which was

sold for approximately

created is due to the debacle in the retail environment

£11,000,000, with both finally completing in 2018.

whereby many household names have failed or

attempted to restructure via CVAs (Company Voluntary

There has been an unusual amount of activity with

Arrangements) and even some profitable companies

regard to sales in this accounting period. With all of the

are asking for

rent

reductions because of

their

larger sales we have kept shareholders abreast with

anticipated loss of turnover and therefore profits.

appropriate Stock Exchange announcements, but I

mention them again later.

This is mainly due to government neglecting to adjust

property taxes in the light of retail shopping patterns.

This year we sold nine small

to medium sized

The ‘goose that

laid the golden eggs’

for

the

properties, but more importantly, due to their size,

government’s spendthrift ways is now in intensive care

where the angle (some may say an Angel!) of

whilst

they are too preoccupied elsewhere,

in a

opportunity arose – Holloway Head, Birmingham,

shambles of

their own making,

to care about

St Nicholas House, Sutton and Wimbledon Studios

addressing this issue.

which had proceeds totalling about £37,000,000. Total

net sales proceeds were £40,790,000 in 2018.

However, our Group’s good judgement or no doubt an

element of good luck, has led to a more financially

This was not

theoretical valuations or contractual

secure position than many property companies. How,

promises but actual cash received. These large sales

you may ask? Our shareholders will know because I

were all well

in excess of

the latest

independent

repeat myself until boredom sets in that we have a wide

valuations and considerably higher than their historic

spread of properties throughout the country in many

cost. This was achieved with the loss of only

different locations, size and various types of property,

£1,400,000 per annum rent, i.e. less than 3.8% return,

quality of tenants, mainly occupied, with tenants who

and thus the Group is now in a sounder financial

generally pay their rents. Our rents cover all our costs,

position than ever previously.

predominately interest charges but also vacancy and

management costs as well as excessive taxes.

The rents receivable during the year ended 31 December

2018 were £13,607,000 compared to £12,946,000 in

Within our portfolio there are many of what I would call

the previous year and they are holding up well with the

‘opportunity properties’. This is where a change of

income from disposals being replaced by the income

circumstances would attract a much bigger profit than

from some of our more recent acquisitions.

would occur through the vicissitudes of the normal

Panther Securities P.L.C.

Chairman’s Statement continued

Disposals

Margate

leaves us with the ground floor let to Sainsbury’s PLC

and Princess Alice Hospice which produces circa

In January 2018 we sold 34 Marine Terrace, Margate

£108,000 p.a. This property is in central Croydon’s main

for £450,000, compared to book value of £250,000.

shopping centre area.

In February 2018, the following three properties were

Wimbledon Studios

sold at auction. Stonehouse, Gloucester, 19 Queen

In July 2018 we simultaneously exchanged and

Street, Ramsgate and High Street, Dudley.

completed on the sale of our freehold investment in

Stonehouse – Gloucester

Wimbledon Studios in Deer Park Road, SW19 for

£18,800,000. This was sold to a nominee of the Scottish

MRG Systems Ltd (“MRG”) a former subsidiary,

Widows Property Authorised Contractual Scheme.

occupied our freehold office at The Mill at Stonehouse,

Gloucester. This former mill of 15,000 sq ft had been let

The studios were built in 1970 and provide internal

to MRG at £93,000 p.a. The letting assisted them in

accommodation of circa 140,000 square foot over circa

being independent before

the

employee

and

4.5 acres. It has a long history as studios and many

management buyout

last

year, which showed

household name productions took place there, including

£900,000, a very good profit on original cost.

‘The Bill’ for over 30 years, ‘The Iron Lady’, ‘I’m a

Ramsgate

celebrity…get me out of here’, and several popular music

videos. This property had a book value of £13,550,000

19 Queen Street, Ramsgate, a freehold shop

as at 31 December 2017 and was originally purchased

investment producing rental

income of £12,000 p.a.

vacant, including stock, equipment and fixed assets for

sold for £147,000, a small profit on book value.

circa £4,750,000 (plus stamp duty) in September 2010.

Dudley

Being an entrepreneurial organisation the Group initially

High Street, Dudley, a large, freehold long term vacant

attempted to run its own film studio in this property.

shop and upper part in very poor condition held for

Although well run by an enthusiastic management

development

realised

£276,000 which was

team, the cut throat competition and constant need for

considerably in excess of its previous book value.

investment in improved technological equipment in the

industry made it unviable thus it was not a successful

Stockport

venture.

In March 2018 we sold Grove House, Stockport, a

vacant freehold shop and office building, an investment

We quickly found new tenants, Marjan Television

we had held for many years during most of which time it

Network Ltd, who took occupation in November 2014

had produced a good rental return for us. Despite the

at a rent of £1,050,000 p.a. We spent about

building being in good condition, a developer purchased

£1,000,000 upgrading the property, mainly on the roof,

it to convert to residential units. We received £900,000

and the tenants spent a significant amount on internal

which was well above the previous book value.

works and equipment bringing it up to a state of the art,

Croydon

In March 2018, after a long delay, we finally completed

modern functioning television and film studio for satellite

broadcasting to foreign countries.

the sale of the vacant upper parts of 49/61 High Street,

This was a very interesting and ultimately rewarding

Croydon for £800,000, just above its book value, and

transaction.

Panther Securities P.L.C.

Holloway Head, Birmingham

dispose of their interest in the building. It was agreed that

Despite exchanging contracts for sale in June 2017, the

the Company and the Crown Agents should offer for sale

completion of the sale of the Group’s development site

our joint interests which would enable the freehold of the

in Holloway Head, Birmingham was finally completed

site to be offered with vacant possession at an early date,

on 31 August 2018, which was considerably after the

giving the property/site development possibilities and thus

initial agreed completion date.

an increased ‘marriage’ value.

A payment of £850,000 was received in 2017 but due

After a marketing campaign by the agents, Carter

to the uncertain nature of the transaction the full

Jonas, a number of offers were received and in April

anticipated (non-received) proceeds were not included

2018 the Company exchanged contracts to sell the

in the 2017 accounts. A £400,000 additional deposit

joint freehold/long leasehold interest to Saint Nicholas

was received in May 2018, a third deposit of £500,000

House Ltd, a newly formed company, with a delayed

was received in August 2018 and finally we received

completion of three months. The total consideration

£9,520,000 on 31 August 2018 giving us a total

receivable for the joint freehold/long leasehold interest in

received for the site of £11,270,000.

St Nicholas House was £12,750,000. Our share of the

gross sale price proceeds amounts to approximately

Sale of St Nicholas House, Sutton

£7,837,500, compared to its December 2017 book

In April 2018 we exchanged contracts to sell the joint

figure of £5,540,000.

freehold/long leasehold interest in St Nicholas House

and it was completed on 7 September 2018. Surrey

Following completion, the Company no longer receives

Motors Limited,

formed in 1919, has a long and

the £320,000 p.a. rental

income on this investment

interesting history, and was acquired by us in 1987 and

property.

is a wholly owned subsidiary of Panther Securities PLC.

Its sole asset was the freehold of St Nicholas House,

Ramsgate (Developments)

Sutton, a building of approximately 140,000 sq ft gross

In July 2018 we submitted 81, 83 and 85 High Street,

accommodation. The basement and ground floor are

Ramsgate for sale by auction. This property, which we

used for retail/ancillary storage and parking. The nine

had owned for many years, was a cleared site on which

upper floors are offices.

we had received planning permission for 14 flats. The

sale achieved £286,000 which I considered to be at the

The building was originally constructed in the early

lower end of expectations, but as this site had been

1960s with the offices pre let to the Crown Agents (a

troublesome and occupied an enormous amount of

quasi-government organisation), who originally took a

management time, it was felt that a local developer may

99 year lease at a ground rent which had proportionate

be better dealing with the matter.

rental reviews every 21 years. This lease had an option

to extend for 25 years (on the same terms), but ignoring

The adjoining property, 79 High Street, Ramsgate, a

the option it had approximately 44 years unexpired at a

four storey building in need of refurbishment and with

low ground rent and thus our tenant’s lease had

permission for conversion to a number of units failed to

significant value.

sell at the same auction but was sold post auction at

£180,000 a few months later which was only slightly

Towards the middle of 2016 the Crown Agents

less than the reserve price. This unit made a good profit

approached us indicating that they wanted to vacate and

on cost.

Panther Securities P.L.C.

Chairman’s Statement continued

Mutley Plain, Plymouth

further three years at a revised rent. These were both

This freehold property had been purchased as an

family owned department stores that have been trading

investment some years ago but the retail position

in the area for over 100 years.

declined substantially and after the tenant vacated, it

was vacant for a few years and thus was sold in

The properties meet the Group’s criteria in that there is

November 2018 for £175,000 which I am sad to say

good short-term income and substantial property value,

was a loss of £43,000 on book value.

and we feel that in the medium to long-term we can

realise strong growth,

if necessary, via potential

Acquisitions

alternative uses.

Palmers Department Stores, Great Yarmouth &

Lowestoft

Since we completed our purchases JE Beale PLC a

In November 2018 we purchased the freeholds of two

100% subsidiary of Beales Ltd (both referred to as

department stores and leased them back to Palmers

“Beales”), has taken assignment on both leases. Beales

Limited, who have been trading from them, or in the

were previously in discussions with Palmers, but broke

local area, for over 100 years.

off discussions when the current management buyout

Great Yarmouth

of Beales was being arranged and picked up these

discussions again at a later stage and completed the

This store is situated in the main shopping square and

assignment.

contains about 57,000 sq ft of useable space. It also

owns about 90 spaces, being half of the council run car

We believe that the assignment is beneficial for the

park immediately behind the store, from which it derives

Panther Group as we obtained better security in that

a substantial income.

we retained Palmers liability and in addition have the

added protection of Beales. There is also a possibility

The store is based at 37-39 Market Place, Great

that Beales will aim to trade from these premises for

Yarmouth. This was purchased at a cost of £1,500,000

longer than the existing lease term. Included in the

(excluding acquisition costs, stamp duty and legal

Progress Report below is an update on Beales.

costs) and was subject to a leaseback at £132,500 p.a.

Debenhams Store, Dumfries

Lowestoft

On 30 November 2018, we completed the purchase of

The store is based at 66-76 (even numbers) London

a freehold leased to Debenhams in Dumfries for

Road North, Lowestoft. This was purchased at a cost

£1,100,000. The property is relatively modern and

of £850,000 (excluding acquisition costs, stamp duty

contains 46,000 sq ft, with 15,000 sq ft of this being on

and legal costs) and is subject to a leaseback at

the ground floor in a prime pedestrianised position. The

£75,000 p.a. This property contains about 19,000 sq ft

rental income is £350,000 pa with a lease that expires

located in the prime pedestrianised shopping position in

in 2037 with no breaks.

the town, with many well-known multiple traders

adjoining and nearby.

Given Debenhams

have

gone

into pre-pack

administration and if they were to vacate we believe we

Both the Lowestoft and Great Yarmouth properties are

could divide up the property relatively easily and re-let,

let on three year leases with a tenant’s option for a

and still receive a high yield.

Panther Securities P.L.C.

Progress Report

Beales

This is useful additional

income following our recent

disposals.

Beales was previously owned by Portnard Ltd, which

owns 47% of Panther Securities PLC. In October 2018,

Swindon

Beales was sold to its management and now has

Following discussions with the Council, we have literally

additional backing from a private equity house. This did

gone back to the drawing board and our architects are

not change the trading or commercial relationship

currently redesigning the scheme to produce a building

between Beales and the Panther Group.

of only seven or eight storeys in height with lower

building costs. The Council has also agreed in principle

Beales had circa £1 million of rental arrears with our

to adjust some of their requirements so that the smaller

group, mainly relating to its company voluntary

scheme with only 50/60 flats plus four or

five

arrangement (CVA) period, which it had not managed to

retail/restaurant units on the ground floor will not only

catch up on.

be an attractive visual asset to the community but also

Subsequently we agreed with the new owners a

strategy for Beales to deal with the arrears by April

Finance

now viable.

2019, after incorporating a discount on these historic

In July 2018 we paid down our revolving facility loan of

arrears. The 2018 year end rental arrears provision

£15,000,000, which can be redrawn.

covers the loss that we have taken on the discount.

Since the management takeover and refinancing we

£15,500,000 (see Consolidated Statement of Financial

have received significant amounts towards the arrears.

Positions for details as some of the cash is restricted to

Accordingly, they have qualified for the agreed discount

property purchases) in the bank as well as £15,000,000

(a lot of this was received post year end).

that can be redrawn as above. We still have written into

At the date of signing these accounts we had circa

Maldon

In our interim accounts we stated that we had agreed

our facility agreement a possible £10,000,000 loan

extension which requires credit approval.

a substantial letting on our industrial building in Maldon.

Some of

the above funds will be utilised to pay

We completed a three year lease at a rental of £650,000

corporation tax, VAT and for other working capital

p.a. from November 2018, and still have some vacant

purposes. Even after

these

costs

and cash

space available which has the potential to yield further

requirements we presently have circa £42,000,000 of

rent when let.

funds available for investment opportunities.

As a reminder, we refurbished this unit with the surrender

One of our current interest rate swaps ends in 2021. We

payments for dilapidations, which included carrying out

entered into a further swap on £25,000,000 nominal

roof works for £315,000. In total we have spent circa

value, which commences in 2021, and will result in

£600,000 on this property since our tenant vacated. This

Panther having an interest rate saving of £625,000 p.a.

property was previously let for £500,000 p.a., and we

in loan interest costs, compared to our current financing

received £1,950,000 to accept a surrender in March

structure. This swap has a 10 year term.

2017 in lieu of dilapidations and loss of future rental.

Panther Securities P.L.C.

Chairman’s Statement continued

Dividends

positive, but growing our rental

income will be more

The Directors are recommending a final dividend for the

difficult than in the past but we have the potential to add

year ended 31 December 2018 of 6p per share. This

value to our portfolio.

will be payable on 5 September 2019 to shareholders

on the register at the close of business on 9 August

Finally I would like to thank our small but dedicated

2019 (ex-dividend on 8 August 2019).

team of staff, growing team of financial advisers, legal

advisers, agents and accountants for all their hard work

The Group has made unprecedented returns over the

during the past year, which has been extremely busy

last two calendar years and we are pleased to have

and even more demanding than usual. Special thanks

shared this with our shareholders being 27p per share

are also extended to our tenants, especially the retail

(6p final dividend recommended above, 15p special

traders, most of whom pay their rents and excessively

and 6p interim) for the year ended 31 December 2018

high and unfair business rates.

and 22p per share (7p final, 10p special and 5p interim)

for the year ended 31 December 2017.

Andrew S Perloff

Future Prospects

We had a very good trading year ended 31 December

2018. I expect our prospects for the near future will be

Chairman

29 April 2019

Panther Securities P.L.C.

Chairman’s Ramblings

Many years ago when I was an office boy at a West End

forthcoming requesting why you want the information

estate agent, one of my daily duties was the filing of

and of course a much higher fee must be paid before

Extel cards. These cards contained information on all

anything can be dispatched.

quoted companies and having little else to do I studied

them with the zeal of a Talmudic scholar. Within about

To illustrate this point, I contacted Panther Securities’

six months I was aware of much information on all of

registrar who had been used by us for well over

these companies.

40 years, such a long relationship counted for nothing

as their forms had to be completed and the bill paid

Through a friend who worked at a stockbroker’s office,

before we could receive the documents on any new

I started buying penny shares – £25 worth of Burma

company I was interested in.

Mines at 6d a share or £50 of British Tar Products at

1/3d a share. Despite my newly acquired/extensive

THUS NO TRUST

knowledge, I chose my shares either by an appealing

name or low share price – I then bought them (by

Our registrars have merged and been taken over

ordering on the phone) and was sent a buying contract

several times during our long relationship but I do not

which I would settle within a couple of weeks.

recall once writing to the Directors’ for their passport

details or utility bills!

Oh! How times have changed! Nowadays, before I can

buy shares, my broker (whom I have dealt with for over

Banks must constantly update our personal and

40 years) has to have a plethora of regularly reviewed

financial information despite lengthy relationships. The

information about me/the company and my buying

provenance of large deposits are questioned, cheques

order has to have the money in their account before I

bounced for the most minor reasons and usually by

can make the purchase. This is what they call progress!

someone on the opposite side of the world.

As time went on my purchases became larger and I

We are faced with the same situation with solicitors,

became interested who other

larger co-investing

auction houses and organisations that we have had

shareholders might be. I began to visit Companies

long relationships with over many, many years. They are

House in City Road where, for a small fee, the file on

forced to go through these procedures due to

any particular company could be obtained. A veritable

bureaucratic humbug and stupidity.

wealth of information could be found here.

In the ensuing years most companies began to employ

assumed it had been mislaid. Nevertheless, it was

registrars who retained the information on shareholders

reported as probably misplaced but in the meantime we

and ownership changes etc. These details could be

asked if a watch could be put into place to flag up any

requested and would usually arrive with a small fee

unusual use. When the card didn’t reappear it was

Recently, my wife noticed a credit card was missing and

statement.

reported accordingly so a replacement could be issued.

We were then told that it had been used on a gambling

Progress continued unabated and it is now possible to

website in Bucharest, Romania. All bets were for

receive information by email. The speed and

comparatively small sums but it had been used 36

convenience of this is however offset by the forms that

times! My wife has never placed a bet in her life let alone

must be completed before the information is

online, the card being mainly used for groceries, so

Panther Securities P.L.C.

Chairman’s Ramblings continued

even a one chip Romanian computer should have seen

Exchange, I wandered around the area, eventually

how suspicious this usage was and suspended the

coming across an old fashioned jewellery shop in the

card account.

perimeter of the Royal Exchange. Feeling happy with

my exoneration and with Christmas looming, I entered

THUS NO COMPETENCE

the shop to ask about two items that had caught my

It would seem that greater technological advances often

interested in buying a Christmas present for my new

create greater opportunities for criminals and thus I

wife.

eye. I had got married a few months before and was

often long for bygone times.

TRUSTING TRADER!

The proprietor was very helpful, describing the pieces in

detail, one an 18 carat gold bracelet laced with rubies

and the second a gold necklace and earrings set with

After our successful takeover in 1972 of Levers Optical

amethysts in the original Victorian case, and told me

Company (now Panther Securities PLC),

I was

each was £200. I thought my then wife would be happy

summoned to the Stock Exchange Building by the

with either item but my dilemma, I explained to the

Takeover Panel. Rather troubled by this I, together with

owner, was that I couldn’t make up my mind. He smiled

my solicitor and brokers to the offer, met with the

understandingly and told me to take both and let her

Takeover Panel who consisted of eight or nine officials

choose. I could return one item when a decision had

situated on the 25th floor.

been reached along with a cheque for the other. I was

astonished! I had no cheque book or even enough cash

It soon became apparent that they were concerned

for a small deposit. I was, however, delighted to take

with insider dealing. It appeared that a resident of

up his suggestion and he wrapped them beautifully

Glasgow, possibly an optician whose name ended in

adding that he hoped she would like one of them. We

Stein, Berg or McCohen had bought 500 shares just

exchanged business cards and I left. As simply as that!

before our Bid Announcement. For a company that had

few stock market dealings it appeared suspicious to

My wife’s eyes lit up when I showed her. She declared

them.

they were magnificent and loved them both. I was

young and slightly naïve but despite my pleasant

I was extensively interrogated but questions were easily

surprise at her response, a cheque for £400 was duly

dealt with as I had never been to Glasgow or indeed

sent to the jeweller who had trusted an unknown young

Scotland, knew no one from the region except one

man who had walked in from the street. Maybe the old

board member to whom I suggested they talk, even

man was wise enough to know what was likely to

though he was unaware of our intentions.

happen but in any event he was doubly repaid by his

The inquisition ended amicably enough but I wondered

TRUST in me.

why so much effort had been put into such a minor

Time moves on and in 1984 I came across a small ad

matter which had resulted in a mere £250 profit for

in the Financial Times for the sale of a controlling

someone.

shareholding in a small public company. Shell

companies had special attractions at that time. When I

Leaving the Stock Exchange Building, which adjoined

received the details it appeared that the vendor had

the Bank of England building and also the Royal

rescued the company from receivership and wanted to

Panther Securities P.L.C.

capitalize on his efforts. The company, A Brown & Sons,

original factory had been sold off but the remainder was

had been formed in 1860 and was a pioneer of printing,

providing its income on makeshift agreements.

specializing in books for the many new schools that

were being created in late Victorian time after the first

The factory had been divided up in an extremely

Education Act. In 1928 the company built a large state

amateurish manner, obviously by the vendor, and I, who

of the art printing factory in Hull and what now remained

was considered by all who knew me as being the

of the freehold estate was its major asset together with

second worst DIY workman in the world (Malcolm

another freehold of a former large manor house called

Bloch being the worst), was relegated by one position.

Great Stukeley Manor. This property,

located near

Huntingdon, was now divided into eight flats and a club

The partitions, where they existed, were made of

on the ground floor.

hardboard, orange box wood, sometimes nailed

together but also stuck with tape, many of which did

The manor house was very imposing and stood in

not even reach the ceiling. Other divisions were marked

about four acres. Only the top floor was occupied by a

by chalk lines on the floor. Wires and plugs were

controlled tenant – the other flats and premises being in

attached with sticky tape and the fuse boards dated

poor but reparable condition.

from 1928. Old machinery was scattered throughout,

During our inspection with the vendor I thought it would

building that time and health & safety forgot but rents

be advisable to see the top floor flat as it would give us

were cheap, no one told us to “**** ORF” (which was

some idea of the condition of the roof. He informed us

nice) and we were asked pleasantly if some of the leaks

some of which was still in use by the tenants. It was the

that the tenant was however likely to be out and when

in the roof could be fixed.

I asked about his relationship with the tenant I was

emphatically told “Oh yes, we have an excellent

The dire condition of the building had been factored into

relationship”.

our purchase price and no value was placed on the

shell company for its potential utilization.

We reached the top floor and I knocked tentatively on

the door to see if the tenant was indeed at home.

After being appointed to the board we soon arranged a

Through the closed door I heard movement then a

£500,000 bank facility for investment and trading

voice shouted clearly and loudly “**** ORF!!! You’re not

purposes. The business did so well over the following

coming in here and that ******* of a landlord knows

two or three years that we were approached by a

why”!!! We left all agreeing that there was some work to

business friend with an offer

to buy 29.9% (the

do to improve that landlord and tenant relationship.

maximum you could buy without making an outright

expensive bid for the entire company) but who also

Nevertheless, we agreed a price for the shares and

wanted to have management control.

arranged for the vendor to visit our office to complete

the deal. The remaining 150 or so shareholders shortly

We had first come across this friend nearly 20 years

afterwards received an offer from our solicitor for their

earlier when we sold him a freehold vacant triple shop

shares at the same price we had paid per share.

and upper part in Atlantic Road, Brixton for £25,000

We subsequently visited the freehold factory in Hull.

were delighted with this quick sale and he was even

Having seen the deeds we knew that about half of the

more delighted when about six months later he sold it

which we had only recently purchased for £15,000. We

Panther Securities P.L.C.

Chairman’s Ramblings continued

at auction for £50,000. He then became our friend for

During my long career there have been many times I

the rest of his life, discussing possible deals, purchases

have agreed a deal with a simple handshake showing

and sales with us on a regular basis. He was an

mutual TRUST.

extremely pleasant and entrepreneurial type of dealer,

often working in different ways from most property

TRUST IS VITAL IN ALL ASPECTS OF LIFE.

dealers/developers.

Politics especially so:-

We discussed the properties A Brown owned, and

agreed values with him and converted this into a price

Tim Farron, although a Liberal Democrat (most policies

per share, which was by now quoted by Harvard

of which I do not support), is however a hardworking

Securities on their recently created and successful

and dedicated Constituency MP, who of late has been

securities exchange.

remorseless in chasing Ministers about the unfairness of

the retail business taxes that affect his large but much

Without going into great detail he told us what he

rural constituency. He recently asked Jake Berry MP

intended to do and agreed to buy 29.9% of the total

(the Parliamentary Under Secretary of State for the

equity. We agreed to retain about 25% of equity and let

Northern Powerhouse & Local Growth – I often believe

him have full board control and stay invested for any

the bigger the title the more useless is the incumbent).

uplift in the share price he generated.

However, the question was:-

Shortly after this, he came to our office with a bank draft

“The Government’s plans for a puny 2% digital tax

made out to us for about £300,000. We prepared all

on mega online firms that avoid paying their fair

the paperwork to transfer the 29.9% shareholding and

share is an insult to shops on the high street in

then realised the shares had been kept securely in a

towns such as Grange, Windermere and Kendal.

bank vault and we would need at least a few days to

Will he support higher taxes on tax dodgers, which

retrieve them. He then left us to pay in the bank draft

would raise enough money to slash business rates

with only our verbal promise that we would deliver the

for our town centres and help to save our high

share certificates to him as soon as possible.

streets?”

This showed an AMAZING DEGREE OF TRUST!

The answer received was:-

We were happy to retain a big shareholding and let him

“The government have been clear

that online

loose on the company as the 30% cash sale was

taxation in retail needs to be done as part of an

double our original total investment cost and any extra

international agreement, but we have also been

share sales at a later date would produce pure profits.

clear that, if we cannot get such an agreement, we

will come forward with our own 2% tax on online

There is much more to the saga of A Brown but the

retail to ensure that we can continue, as we did in

essence of this story is TRUST.

the last Budget, to give relief to those retailing on

Our friend trusted us to do what we promised and we

a third off the business rates of shops with a

trusted him to do well.

rateable value of under £51,000.”

our high streets. This year, we have already slashed

Panther Securities P.L.C.

I did not believe that to be the correct answer and

Perhaps half of the legal MPs should retire so that we

checked with our rating expert. I was, of course, correct

can have some butchers, bakers, builders, department

in my fears. There were so many exceptions on uses

store owners, manufacturers, farmers and bankers who

allowed etc that although substantially correct if the use

actually understand how the country works.

of the word “shops” is taken in its literal legal sense. But

there are hundreds of exceptions and, in particular,

As usual I have rambled on a bit but the main point is

vacant shops (i.e., an attack on landlords who have lost

that solicitors are able, by careful choice of words, to

their tenant, probably because of the policy of excessive

disseminate in a way to obscure and confuse the true

property taxation).

effect on the population of their laws and policies. It

takes a long time for this to be understood by the

I instantly realised this must be a solicitor’s answer so I

general population who then simplify the previous

researched further which proved Jake Berry was a

presentations and just call it lies.

former solicitor, one of about 118 solicitors in the House

of Commons, about 18% of the MPs as there are about

Currently most people do not TRUST the politicians or

120,000 qualified lawyers in the whole country, about

their statements and thus take little notice of their

0.002% of the population they are thus grossly over-

promises and announced expectations and form

represented in our

legislatory organisation, about

opinions from what

they experience in their lives

900 times.

experienced outside of the Westminster bubble.

There is thus an overwhelming reason to make

How nice it would be if we had politicians who we could

complicated laws that only the legal profession can

trust!

understand thus they bring in new laws that obviously

benefit

their profession hugely,

i.e., contingent

Yours

compensation liability claims, encouraging people to

make claims, many of which are either patently false or

Andrew S Perloff

obviously exaggerated. They also create huge areas of

Chairman

potential claim, by way of new deliberately complicated

29 April 2019

laws – in total only the lawyers’ benefit.

Shakespeare’s play, Henry VI part 2, which I believe was

about the uprising of Henry VI – has a famous line spoken

by one of the uprising– not surprisingly Dick the Butcher,

i.e., a trader “The first thing we do, let’s kill all the

lawyers”, this said in the context of making the country a

better place for all the population to live in. Thus my

thoughts are not new, in fact over 400 years old.

Panther Securities P.L.C.

Group Strategic Report

About the Group
Panther Securities PLC (“the Company” or “the Group”)
is a property investment company quoted on the AIM
market (AIM). Prior to 31 December 2013 the Company
was fully listed and included in the FTSE fledgling index.
It was first fully listed as a public company in 1934. The
Group owns and manages over 850 individual property
units within approximately 145 separately designated
buildings over the mainland United Kingdom. The
Group specialises in property investing and managing of
good secondary retail, industrial units and offices, and
also owns and manages many residential flats in several
town centre locations.

Strategic objective
The primary objective of the Group is to maximise long-
term returns for our shareholders by stable growth in
net asset value and dividend per share,
from a
consistent and sustainable rental income stream.

Progress indicators
Progress will be measured mainly through financial
results, and the Board considers the business
if it can increase shareholder return and
successful
asset value in the long-term, whilst keeping acceptable
levels of risk by ensuring gearing covenants are well
maintained.

Key Ratios and measures

Gross Profit Margin (gross profit/turnover)

Gearing (debt*/(debt* + equity))

Interest Cover**

Finance cost rate (finance costs/average

borrowings for the year)

Yield (rents investment properties/average

market value investment properties)

Net assets value per share

Earnings/(loss) per share – continuing

Dividend per share

Investment property acquisitions

Investment property disposal proceeds

2018****

71%

39%

2017

71%

45%

2016

77%

49%

2015

73%

48%

4.17 times

2.37 times

1.66 times

1.65 times

6.6%

6.4%

6.6%

7.7%

532p

39.9p

7.1%

516p

120.2p

27.0p***

22.0p***

£3.9m

£40.8m

£8.9m

£2.2m

7.7%

407p

(5.5)p

12.0p

£5.0m

£5.8m

7.5%

428p

38.7p

22p***

£2.2m

£4.0m

Debt in short and long term loans, excluding any liability on financial derivatives

** Profit before taxation excluding interest, less movement on investment properties and on financial instruments

and impairments, divided by interest

***

Includes 15p (2017:10p) per share special dividend

**** IFRS 9 and 15 have only been reflected in 2018 and the prior year figure not restated.

Business Review
2018 has been one of the most successful years for the
Group for disposals, generating £40.8m proceeds and
£11.8m of profit or being 40% above book value. With
the additional funds, the Group chose to de-gear (this
facility can be re-drawn) as well as pay a large special
dividend. The Group also reinvested some of the
proceeds, £2m into equities (which are relatively liquid)
and purchased £3.9m of investment properties.

Even with the disposals, including Wimbledon with the
loss of £1.05m annual rents, we expect our rental
income to be slightly higher in 2019 (than 2018) due to
acquisitions late in 2018 (where we haven’t seen a full
years benefit) and due to a significant letting in Maldon
(circa £0.65m pa) at the year end.

Panther Securities P.L.C.

Group Strategic Report continued

The Income Statement also shows lower
‘other
income’, mainly due to the large surrender premium on
Maldon in the prior year (not spent on refurbishing the
unit) of circa £1.4m and also a large £0.4m fee to
extend our Birmingham completion date (not repeated).

The administration costs and costs of sales have crept
up as we see more costs associated with running the
portfolio, in particular there are heavier costs on our
recent shopping centre acquisitions compared to the
disposals, such as St Nicholas House and Wimbledon
which had little costs of management associated with
them. We have also seen an increase in bad debt charge
in the year due to the worsening of the market – our
charge was 5.8% of turnover compared to 4.1% in the
prior year.

The Group recognised a loss in value following the
directors’ year end valuation, showing a reduction in
value of £6.4m (compared to a £16.8 million uplift in
2017 following an external valuation).

The interest rate swaps also recovered helping the
overall profitability for
the year by £0.9m (2017:
improvement of £1.85m). This improvement is after
taking account of our new financial derivative which is
currently sitting at a mark to market loss (as expected).

Going forward
At the end of 2017 we stated that “we are looking to
sell properties where we can achieve a high return or
they are non-core to save up a “cash pile”, as we
expect uncertain times in the near to medium term and
as an entrepreneurial company expect to fair well.” This
is exactly what we did and we are incredibly pleased
that we have put ourselves into such a strong position
heading into more uncertain economic times. The
outcome exceeded our expectations.

With our existing finance and cash funds we would be
disappointed if we did not pick up a few good
investments in 2019, however these have to be carefully
selected as a lot of the risks perceived by the average
property investor are real.

Even though there are uncertainties going forward
which may affect property prices in the short term, we
are protected by our portfolio’s diversity, experienced

management team, ability to adapt and by having
access to funds to benefit from opportunities.

Financing
The Group had previously entered into a £75 million
club loan facility (£60 million term and £15 million
revolving), which was renewed on 19 April 2016 with a
five year term. As mentioned earlier we de-geared, by
repaying £15m of our facility that can be redrawn. We
also had at the year-end £20m of cash funds (£14.44m
restricted to property purchases). The loan was also
drafted with the option of increasing our facilities by a
further £10 million (subject to banks’ approval), which
may be useful if an exceptional deal came our way.

At the Statement of Financial Position date the Group
had £20m of cash funds, £15m available facility and a
further £10m included in our loan agreement but
requiring credit approval.

The Group has not offered a scrip dividend option for its
latest dividends and has no plans for the current
proposed dividend to provide shareholders with this
option.

Financial derivative
We have seen an improvement (of a non-cash nature) in
our long term liability on derivative financial instruments
of £0.89m (2017: £1.85m fair value gain). Following this
gain the total derivative financial
liability on our
Consolidated Statement of Financial Position is £25.5m
(2017: £26.4m).

instruments (shown in note 28) are
These financial
interest rate swaps that were entered into to remove the
cash flow risk of interest rates increasing by fixing our
interest costs. We have seen that in uncertain economic
times there can be large swings in the accounting
valuations. Small movements in the expectation of
future interest rates can have a significant impact on
their fair value; this is partly due to their long dated
nature.

rates were significantly higher.

These contracts were entered into in 2008 when long
In a
term interest
hypothetical world if we could fix our interest at current
rates and term we would have much lower interest
costs. Of course we cannot undo these contracts that

Panther Securities P.L.C.

were entered into historically, without a significant
financial cost, but
for accounting purposes these
financial instruments are compared to current market
rates, with the additional liability compared to the market
rates, as shown on our Statement of Financial Position.

In 2018 the Company entered into a new 10 year fixed
interest rate swap agreement, with a £25,000,000
nominal value which commences on 1 December 2021.
The swap’s interest rate is 2.131% which will come into
existence when the Company’s current £25,000,000
swap with a rate of 4.63% ends, resulting in an annual
saving of circa £625,000.

By entering this transaction, the Company will have
certainty that its interest costs from December 2021 will
be significantly lower compared to its current costs.

Financial Risk Management
The Company and Group operations expose it to a
variety of financial risks, the main two being the effects of
changes in credit risk of tenants and interest rate
movement exposure on borrowings. The Company and
Group have in place a risk management programme that
seeks to limit
the adverse effects on the financial
performance of the Company and Group by monitoring
and managing levels of debt finance and the related
finance costs. The Company and Group also use interest
rate swaps to protect against adverse interest rate
movements with no hedge accounting applied. Mark-to-
market valuations on our financial instruments have been
erratic due to current low market interest rates and due
to their long term nature. These large mark-to-market
movements are shown within the Income Statement.

However, the actual cash outlay effect is nil when
considered alongside the term loan, as the instruments
have been used to fix the risk of further cash outlays
due to interest rate rises or can be considered as a
method of locking in returns (difference between rent
yield and interest paid at a fixed rate).

Given the size of the Company and Group, the Directors
have not delegated the responsibility of monitoring
financial risk management to a sub-committee of the
Board. The policies set by the Board of Directors are
implemented by the Company and Group’s finance
department.

Credit risk
The Company and Group have implemented policies
that require appropriate credit checks on potential
tenants before lettings are agreed. In many cases a
deposit is requested unless the tenant can provide a
strong personal or other guarantee. The amount of
exposure to any individual counterparty is subject to a
limit, which is reassessed annually by the Board.

Exposure is reduced significantly due to the Group
tenants who operate in
having a large spread of
different industries.

Price risk
The Company and Group are exposed to price risk due
to normal inflationary increases in the purchase price of
the goods and services it purchases in the UK. The
exposure of the Company and Group to inflation is low
due to the low cost base of the Group and natural
hedge we have from owning “real” assets. Price risk on
income is protected by the rent
review clauses
contained within our tenancy agreements and often
secured by medium or long-term leases.

Liquidity risk
The Company and Group actively manage liquidity by
maintaining a long-term finance facility, strong
relationships with many banks and holding cash
reserves. This ensures that the Company and Group
have sufficient available funds for operations and
planned expansion or the ability to arrange such.

Interest rate risk
The Company and Group have both interest bearing
assets and interest bearing liabilities. Interest bearing
assets consist of cash balances which earn interest at
fixed rate when placed on deposit. The Company and
Group have a policy of only borrowing debt to finance
the purchase of cash generating assets (or assets with
the potential to generate cash). The Directors revisit the
appropriateness of this policy annually.

Principal risks and uncertainties of the Group
The successful management of risk is something the
Board takes very seriously as it is essential for the Group
to achieve long-term growth in rental income, profitability
and value. The Group invests in long term assets and
seeks a suitable balance between minimising or avoiding
risk and gaining from strategic opportunities.

Panther Securities P.L.C.

Group Strategic Report continued

The Group’s principal risks and uncertainties are all very
much connected as market strength will affect property
values, as well as rental terms and the Group’s finance,
or term loan, whose security is derived primarily from
the property assets of the business. The financial health
the Group is checked against covenants that
of
measure the value of the property, as a proportion of
the loan, as well as income tests. The two measures of
the Group’s finances are to check if the Group can
support the interest costs (income tests) and also the
ability to repay (valuation covenants).

3) We invest in good secondary property, which
tends to be lower value/cost, meaning we can be
better diversified than is possible with the
equivalent funds invested in prime property. There
are not many property companies of our size who
have over 850 individual units over 145
buildings/locations. Secondary property also, very
importantly,
is much higher yielding which
generally means the investment generates better
interest cover and its value is less sensitive to
market changes in rent or loss of tenants.

The Group has a successful strategy to deal with these
risks, primarily its long lasting business model and
strong management. This meant the business had little
or no issues during the 2008 financial crisis, which
some commentators say was the worst financial crisis
since the Great Depression of the 1930s.

Market risk
If we want to buy, sell or let properties there is a market
that governs the prices or rents achieved. A property
company can get caught out if it borrows too heavily
on property at the wrong time in the market, affecting its
loan covenants. If
loan covenants are broken, the
Company may have to sell properties at non-optimum
times (or worse) which could decrease shareholder
value. Property markets are very cyclical and we in
effect have three strategies to deal with or mitigate the
risk, but also take advantage of this opportunity:

Strong, experienced management means when
the market is strong we look to dispose of assets
and when it is weak we try and source bargains
i.e. an emergent strategy also called an
entrepreneurial approach.

The Group has a diversified property portfolio, and
maintains a spread of sectors over, retail, industrial,
office and residential. The other diversification is
having a spread regionally, of the different classes
of property over the UK. Often in a cycle not all
sectors or locations are affected evenly, meaning
that one or more sectors could be performing
stronger, maybe even booming, whilst others are
struggling. The strong investment sectors provide
the Group with opportunities that can be used to
support slower sectors through sales or income.

Panther Securities P.L.C.

assist with

Property risk
As mentioned above we invest in most sectors in the
market
diversification. Many
commentators consider the retail sector to be in period
of severe flux, considerably affected by changing
consumer habits such as internet shopping as well as
a preference for experiences over products. Of the
Group’s investment portfolio, retail makes up the largest
sector being circa 60 to 65% by income generation.
However the retail sector is affected to lesser degrees
in what we would describe as neighbourhood parades,
as opposed to traditional shopping high streets. The
large part of our
in these
neighbourhood parades, meaning we are less affected
by consumer habits and even benefit from some of the
changes. Neighbourhood parades provide more leisure,
services and convenience retail.

retail portfolio is

For example we have undertaken a few lettings to local or
smaller store formats, to big supermarket chains, which
would not have taken place many years ago. Block policy
is another key mitigating force within our property risks.
Block policy means we tend to buy a block rather than
one off properties, giving us more scope to change or get
substantial planning if our type of asset is no longer
lettable. The obvious example is turning redundant
regional offices into residential. Also by having a row of
shops, we can increase or reduce the size of retail units
to meet the current requirements of retailers.

Finance risk
The final principal risk, which ties together the other
principal risks and uncertainties, is that if there are
severe adverse market or property risks then these will
ultimately affect our financing, making our lender either
force the Group to sell assets at non-optimal times, or

take possession of the Group’s assets. We describe the
above factors in terms of management, business model
and diversification to help mitigate against property and
market risks which as a consequence mitigate our
finance risk.

The main mitigating factor is to maintain conservative
levels of borrowing, or headroom to absorb downward
movements in either valuation or income cover. The
other key mitigating factor, is to maintain strong, honest
and open relationships with our lenders, and good
relationships with their key competitors. This means

that if issues arise, there will be enough goodwill for the
Group to stay in control and for the issues to resolve
themselves, and hopefully save the situation. As
a Group we also hold uncharged properties and
cash resources, which can be used to rectify any
breaches of covenants.

Given the size of the Company and Group, the Directors
have not delegated the responsibility of monitoring
financial risk management and the effectiveness of the
Company’s risk management and related control
systems to a sub-committee of the Board.

Other non-financial risks
The Directors consider that the following are potentially material non-financial risks.

Impact

Action taken to mitigate

Risk

Reputation

Regulatory changes

Ability to raise capital/deal
flow reduced

Transactional and holding
costs increase

People related issues

Loss of key employees/low
morale/inadequate skills

Computer failure

Loss of data, debtor history

Asset management

Wrong asset mix, asset
illiquidity, hold cash

Act honourably, invest well and be prudent.

Seek high returns to cover additional costs.
Lobby Government -“Ramblings”. Use advisers when
necessary.

Maintain market level remuneration packages, flexible
working and training. Strong succession planning and
recruitment. Suitable working environment.

External IT consultants, backups, offsite copies. Latest
virus and internet software.

Draw on wealth of experience to ensure balance
between income producing and development
opportunities. Continued spread of tenancies and
geographical location. Prepare business for the
economic cycles.

The Group Strategic Report set out on the above pages also includes the Chairman’s Statement shown earlier in
these accounts and was approved and authorised for issue by the Board and signed on its behalf by:

S. J. Peters
Company Secretary

29 April 2019

Unicorn House
Station Close
Potters Bar
Hertfordshire EN6 1TL

Panther Securities P.L.C.

Directors’ Report
Company number 00293147

The Directors submit their report together with the
audited financial statements of the Company and of the
Group for the year ended 31 December 2018.

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

Company law requires the directors to prepare
financial statements for each financial year. Under that
law the directors have elected to prepare the Group
financial statements in accordance with applicable law
and International Financial Reporting Standards
(IFRSs) as adopted by the European Union and the
Company financial statements in accordance with
United Kingdom Generally Accepted Accounting
Practice (UK GAAP)
including FRS101 “Reduced
Disclosure Framework”. 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 Company and of
the Group and of the profit or loss of the Group for
that period.

In preparing these financial statements, the Directors
are required to:

(cid:1) select suitable accounting policies and then apply

them consistently;

(cid:1) make judgments and accounting estimates that are

reasonable and prudent;

(cid:1) state whether applicable IFRSs as adopted by the
European Union have been followed subject to any
material departures disclosed and explained in the
Group financial statements; and

(cid:1) prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the Group 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 the
financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the
assets of the Company and the Group and hence for

taking reasonable steps for
detection of fraud and other irregularities.

the prevention and

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.

Going concern
The Group’s business activities, together with the factors
likely to affect its future development, performance and
position are set out in the Chairman’s Statement and
Group Strategic Report. The financial position of the
Group, including key financial ratios is set out in the
Group Strategic Report. In addition, the Directors’ Report
includes the Group’s objectives, policies and processes
for managing its capital; the Group Strategic Report
includes details of
risk management
its financial
objectives; and the notes to the accounts provide details
of its financial instruments and hedging activities, and its
exposures to credit risk and liquidity risk.

The Group is strongly capitalised, has high liquidity
together with a number of long term contracts with its
customers many of which are household names. The
Group has a diverse spread of tenants across most
industries and investment properties based in many
locations across the country.

The Group has a long term loan in place which was
renewed on 19 April 2016. The Group always maintains
excellent relations with its lenders.

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. For these reasons they
continue to adopt the going concern basis in preparing
the financial statements.

Principal activities, review of business and future
developments
The principal activity of
investment and dealing in property and securities.

the Group consists of

The review of activities during the year and future
developments is contained in the Chairman’s Statement
and Group Strategic Report.

Panther Securities P.L.C.

Company’s objectives and management of capital
Our primary objective is to maximise long-term return
for our shareholders by stable growth in net asset value
and dividend per share,
from a consistent and
sustainable rental income stream.

Directors and their beneficial interests in shares
of the Company
The Directors who served during the year and their
beneficial
interests in the Company’s issued share
capital were:

The Company’s principal capital base includes share
capital and retained reserves, which is prudently
invested to achieve the above objective and is
supplemented with medium to long-term bank finance.

Results and dividends
The profit for the year after taxation, amounted to
£7,047,000 (2017: a profit of £21,242,000).

The interim dividend of £1,061,000 (6.0p per share) on
ordinary shares was paid on 29 November 2018.

The Directors recommend a final dividend of
£1,061,000 (6.0p per share) payable on 5 September
2019 to shareholders on the register at the close of
business on 9 August 2019 (Ex dividend on 8 August
2019). The total dividend for
the year ended
31 December 2018 being anticipated at 27p per share
(including the special of 15p paid in January 2019).

There will be no option of a scrip dividend offered for
the 2018 final dividend of 6p per share (to be paid in
September 2019). There was no scrip option for the
interim dividend in November 2018.

Ordinary shares
of £0.25 each
2017

2018

A. S. Perloff (Chairman)
B. R. Galan (Non-executive)
P. M. Kellner (Non-executive)
J. H. Perloff
S. J. Peters

4,244,360 4,244,360
338,669
22,000
107,500
187,929

338,669
22,000
107,500
187,929

A. S. Perloff and his family trusts have beneficial
interests in shares owned by Portnard Limited, a
Company under their control, amounting to 8,405,175
(2017 – 8,405,175).

have been

There
shareholdings since 31 December 2018.

changes

in Directors’

interest

No beneficial
is attached to any shares
registered in the names of Directors in the Company’s
subsidiaries. No right has been granted by the
Company to subscribe for shares in or debentures of
the Company.

Directors’ emoluments
Directors’ emoluments of £285,000 (2017 – £277,000) are made up as follows:

Director

Executive
A. S. Perloff
J. T. Doyle*
J. H. Perloff
S. J. Peters

Non-executive
B. R. Galan
P. M. Kellner

Salary/
Fees
£’000

Bonus
£’000

Taxable
Pension
Benefit Contribution
£’000
£’000

Total
2018
£’000

Total
2017
£’000

—
—
61
80

10
10

161

—
—
19
53

8
8

3
—
1
7

—
—

—
——
2
23

—
—

83
163

18
18

285

5
86*
60
106

10
10

277

* £40,000 included within the salary relates to compensation for loss of office. J. T. Doyle ceased to be a director on 15 June 2017. Further details

can be found in note 33.

Panther Securities P.L.C.

Directors’ Report continued

Pension and other benefits
A. S. Perloff is the sole member and beneficiary of a
non-contributory Director’s pension scheme. The Group
ceased contributions in 1997 and accordingly made no
contributions to the pension fund in 2018 and does not
anticipate making further contributions.

S. J. Peters had pension contributions paid in the year
by the Company of £21,000 (2017 – £24,000) into his
personal stakeholders’ contribution pension scheme.
S. J. Peters, J.T. Doyle (in 2017) and J.H. Perloff also
received a contribution into a stakeholder’s pension
fund following auto-enrolment at the statutory rate of a
1% contribution up to 31 March 2018 and 2%
thereafter of their gross salary by the Company.

No other payments were paid in respect of any other
Director during the year (2017 – £nil).

Third party indemnity provision for Directors
Qualifying third party indemnity provision for the benefit
of five directors was in force during the financial year
and as at the date this report was approved.

Status
Panther Securities P.L.C. is a Company quoted on the
and is
Alternative
incorporated in England and Wales.

Investment Market

(“AIM”)

Events after the reporting date
Details of events after the report date are given in the
Chairman’s Statement and note 32 to the consolidated
accounts.

Auditors
In the case of each person who was a Director at the
time this report was approved:

(cid:1) so far as that Director was aware there was no
relevant available information of which the
Company’s auditors were unaware; and

(cid:1) that Director had taken all steps that the Director
ought to have taken as a Director to make himself
aware of any relevant audit information and to
establish that the Company’s auditors were aware
of that information.

Capital structure
Details of the issued share capital of the Company are
shown in note 23. The Company has one class of
ordinary shares which carries no right to fixed income.
Each share carries the right to one vote at general
meetings of the Company. The details of the Group’s
treasury policy are shown in note 28.

This information is given and should be interpreted in
accordance with the provisions of s418 of
the
Companies Act 2006.

A resolution to re-appoint the auditors, Nexia Smith &
Williamson, will be proposed at the next Annual General
Meeting.

Financial risk management
Information regarding the use of financial instruments
and the approach to financial risk management is
detailed in the Group Strategic Report.

Donations
During the year the Group made a £nil political donation
(2017 – £nil). The Group makes donations to charities
through advertisements at charity events and in the
diaries of charities, the total of which in 2018 was
£10,000 (2017 – £5,000). The Group is a Foundation
Partner of the preferred charity of the property industry,
Land Aid, donating £10,000 (2017 – £10,000).

This report was approved and authorised for issue by
the Board and signed on its behalf by:

S. J. Peters
Company Secretary

29 April 2019

Unicorn House
Station Close
Potters Bar
Hertfordshire EN6 1TL

Panther Securities P.L.C.

Corporate Governance

The Board
The Board currently consists of five directors, of whom
two are non-executives. It meets regularly during each
year to review appropriate strategic, operational and
financial matters and otherwise as required. In the year
the Board met three times with all members present. It
supervises the executive management and a schedule
of items reserved for the full Board’s approval is in place.
Panther Securities P.L.C. has an Executive Chairman
who is also the Chief Executive.

The Board considers the two non-executive Directors to
be independent and to represent
the interests of
shareholders. Both non-executive Directors are of the
highest calibre. Each is independently minded with a
breadth of successful business and relevant experience.
They are entitled to the same information as the Executive
Directors and are an integral part of the team, making a
most valuable contribution. Both non-executive Directors
have a sufficient level of expertise to challenge and hold
the executive Directors to account.

Each Board member has responsibility to ensure that
the Group’s strategies lead to increased shareholder
value.

Biographical details of Executive Directors:-
Andrew Perloff (Chairman)
He has over 55 years’ experience in the property sector,
including over 45 years’ experience of being a director of
a Public Listed Company mainly as Panther’s Chairman.
He has significant experience of corporate activity
including ten contested take-over bids and has also
served on the Board of Directors of six other public listed
companies. He is currently a non-executive director of
Airsprung Group PLC as well as Anglia Home Furnishings
Ltd and was previously a director of Beale Ltd.

Simon Peters (Finance Director)
He is a member of the Chartered Institute of Taxation,
a Fellow of the Chartered Certified Accountants and
was formerly with KPMG LLP and the Lombard Bank
Finance Department. He is currently a non-executive
director of Airsprung Group PLC as well as Anglia
Home Furnishings Ltd and was previously a director of
Beale Ltd (including when it was fully listed on the LSE).
He joined Panther in 2004 and was appointed Finance
Director in 2005.

John Perloff (Executive)
Previously with a commercial West End agent
specialising in retail acquisitions and disposals, he

joined Panther in 1994. His areas of responsibility
include property lettings and acquisitions. He was
appointed Executive Director in 2005.

Biographical details of Non-executive Directors:-
Bryan Galan (Non-executive)
Chairman of the Remuneration Committee. He is a
Fellow of the Royal Institution of Chartered Surveyors. He
was formerly joint Managing Director of Amalgamated
Investment and Property Co. Limited and was previously
a Non-executive Director of Rugby Estates Investment
Trust Plc.

Peter Kellner (Non-executive)
Chairman of the Audit and Nomination Committees. He
is an Associate of the Chartered Institute of Bankers
and of the Institute of Taxation. He was formerly joint
General Manager of the U.K. banking operations of
Credit Lyonnais Bank Nederland NV.

QCA Corporate Governance Code
The Directors recognise the importance of good
corporate governance and have chosen to adopt and
apply the Quoted Companies Alliance’s 2018 Corporate
Governance Code (the ‘QCA Code’). The QCA Code
was developed by the Quoted Companies Alliance in
consultation with a number of significant institutional
small company investors, as an alternative corporate
governance code applicable to AIM companies. The
underlying principle of the QCA Code is that “the
purpose of good corporate governance is to ensure
that the company is managed in an efficient, effective
and entrepreneurial manner
the benefit of all
shareholders over the longer term”. Details of how the
Company addresses the key governance principles
defined in the QCA Code can be found below.

for

1. Establish a strategy and business model which
promote long-term value for shareholders
Panther’s strategy and business model are set out
in the Group Strategic Report above. The strategic
objective section of the Group Strategic Report
states that the primary objective of the Group is to
maximise long-term returns for our shareholders by
stable growth in net asset value and dividend per
share, from a consistent and sustainable rental
income stream. The key challenges to the business
and how these are mitigated are also detailed in the
Group Strategic Report.

Panther Securities P.L.C.

Corporate Governance continued

2. Seek to understand and meet shareholder

Board

needs and expectations
good
strongly
The
communication with investors. The Company sends
out announcements via post to shareholders who
have requested this and all shareholders can join
our mailing list, even if they hold shares in CREST.

encourages

The person at
the Company with principal
responsibility for liaising with shareholders is: Andrew
Perloff, Chairman. Shareholders may also contact the
Company in writing via the following email address:
info@pantherplc.com. Inquiries that are received will
be directed to the Chairman if appropriate, who will
consider a response. The Company may exercise
discretion as to which shareholder questions shall be
responded to, and the information used to answer
questions will be information that is freely available in
the public domain. If deemed necessary, the inquiries
will be brought to Board’s attention. All shareholders
are invited to our Annual General Meeting. Board
members are available by phone to discuss the
company and there is also shareholders access,
before during and after Annual General Meetings
for discussions,
therefore providing lots of
opportunities for shareholders to understand and
address any issues.

The Board has historically approved a regular
dividend for many years, which has always been
maintained or
increased. The Board aims to
maintain a sustainable and appropriate level of
dividend cover. Where exceptional years arise, the
Board anticipates this will normally be reflected with
special dividends where practicable.

The Board believes the Company’s mode of
engaging with shareholders is adequate and
effective.

3. Take into account wider stakeholder and
social responsibilities and their implications
for long-term success
its corporate social
The Group is aware of
responsibilities and recognises the importance of
maintaining effective working relationships across a
range of stakeholder groups.

On the basis of the Directors’ knowledge and long
experience of the operation of the Group, the Board
recognises that the long-term success of the Group

Panther Securities P.L.C.

and

relationships:

is reliant upon the efforts of the following key
resources
the Group’s
employees, tenants, lenders, regulatory authorities,
local residents and the general public affected by
our activities. The Company actively seeks
employees’ feedback on their employment with the
Company. The Company does this on an ongoing
basis, but also holds bi-weekly all party staff
meetings where employees are able to provide
feedback. The property and finance departments
frequently liaise with tenants, which can include
receiving tenant feedback. The Company’s lenders
have teams of account and relationship managers,
which the Company communicates with on a
regular basis and provides regular management
updates and is able to receive any feedback from
lenders. The Company is open to feedback from
local residents and the general public that may be
affected by our activities, and in particular this is
often part of the planning process.

The Group understands the necessity of balancing
the needs of all our stakeholder groups while
maintaining focus on the Board’s primary
responsibility to promote the success of the Group
for the benefit of its members as a whole.

The Group ensures compliance with regulatory
bodies and legislation through various procedures
and protocols and receives feedback on matters
such as planning on a regular basis. The Group
undertakes to resolve any feedback received from
stakeholders where appropriate and where such
amendments are consistent with the Group’s longer
term strategy. However, no material changes to the
Company’s working processes have been required
over the year to 31 December 2018, or more
recently, as a result of stakeholder
feedback
received by the Company.

4. Embed

risk

effective

management,
considering both opportunities and threats,
throughout the organization
The Board’s discussion on risk management as
described in the disclosure above in respect of
Principle One and in the Group Strategic Report,
which detail risks to the business and how these are
mitigated. The Groups internal controls are
designed to manage rather than eliminate risk and
provide reasonable assurance against
fraud,
material misstatement or loss.

The Board seeks to ensure that the correct and
necessary level of insurance is in place to cover
certain aspects of risks including actions taken
against the Directors, as well as all the properties
we own. The insured values and types of cover are
carefully reviewed periodically and this is a
requirement of our main loan agreement.

A commentary on how the Company reviews its
internal controls can be found in the disclosure
regarding Principle Nine below.

5. Maintain the Board as a well-functioning,

balanced team led by the Chair
The Board consist of three Executive Directors and
two Non-Executive Directors. Biographies of the
directors can be found above, the Board considers
its two non-executive Directors (Bryan Galan and
Peter Kellner) to be independent. Mr Galan and Mr
Kellner have been directors of the Company since
1994, although the rest of the Board consider them
to continue to be independent, as they are sufficiently
removed from the day-to-day operations of the
Company to retain a critical and independent view.
Further commentary in respect of the Company’s
Non-Executive Directors can be found above.

As detailed above, the Board met three times with
all members present, the Audit Committee met
three times with all members present and the
Remuneration Committee met three times with all
members present. Andrew Perloff, Simon Peters
and John Perloff work full time. Mr Galan and Mr
Kellner currently work on average 6 days per year.

financial and
All Directors are kept apprised of
operational
information in a timely fashion and in
advance of any meetings. The Executive Directors
regularly attend meetings to ensure decisions are
made and inter-departmental communication is
strong and transparent.

6. Ensure that between them, the directors have
the necessary up-to-date experience, skills
and capabilities
The Company has an Executive Chairman who is
also the Chief Executive, being Andrew Perloff. The
Company’s Finance Director is Simon Peters. John
Perloff is an Executive Director. Bryan Galan and
Peter Kellner
are Non-Executive Directors.
Biographies of the directors are above.

The Board has a wide and well-rounded level of
expertise and experience with a clear and proven
track record. Professionally qualified members of
the Board keep up to date with their Continuing
Professional Development, which ensures they are
familiar with changes and current developments in
their fields and some members are on other boards
which helps them see best practise elsewhere. The
Board Members take particular interests in keeping
appraised on key issues and developments
pertaining to the Group.

During the year ended 31 December 2018, neither
the Board nor any committee has sought external
advice on a significant matter and no external
advisers to the Board or any of its committees have
been engaged.

Aside from the directors’ stated roles and the role of
Simon Peters as Company Secretary, the Board
members do have any particular internal advisory
responsibilities

individual

7. Evaluate Board performance based on clear
and relevant objectives, seeking continuous
improvement
The individual Board members are appraised by the
Chairman and/or Non-Executives as appropriate on
their performance. This process is informal in nature
and is performed on an ongoing basis, rather than
junctures. The main
at pre-determined annual
director
against which
criteria
effectiveness is considered are: ensuring that the
right actions in the business are being taken and
ensuring that directors continue to be effective. The
Company’s director evaluation process has not
changed materially relative to previous years, on the
basis that the Board are of the view that the above
processes are appropriate for
the Company’s
requirements, given the nature of the Company’s
business and levels of experience on the Board.
There were no material findings from the Company’s
Board appraisals over the year ended 31 December
2018, which was the same in the previous year.

the Directors are periodically subject

All of
to
re-election on a rotation basis at the Annual General
Meeting.

Panther Securities P.L.C.

Corporate Governance continued

The Company does not currently have a periodic
appraisal process for the effectiveness of the Board
the
as a whole nor
committees (and this has not changed over
previous years).

the effectiveness of

for

to the

changes

The Board considers succession planning and the
need for further board or senior management
appointments. The Board believes that there is no
need for
current board,
management and committee structures and
membership in order to meet the needs of the
Company’s current and medium-term requirements.
Regarding longer term succession planning, the
Board currently comprises a good spread of ages
which provides a natural succession buffer.

8. Promote a corporate culture that is based on

ethical values and behaviours
The Board promotes a corporate culture of
professional behaviour,
integrity, professional
competence and due care, objectivity and
confidentiality. These values are promoted from the
top down and embedded in our working practices
and company policies. As noted in the disclosure
above in respect of Principle Three, the Company
holds bi-weekly all party staff meetings where
employees are able provide feedback, which allows
the Board and management to have insights into
the Company’s culture.

When new employees join the Company, they are
provided a staff handbook and are required to
become familiarised with the Company’s working
practices and company policies. The Board and
management are prepared to take appropriate
action against unethical behaviour, violation of
company policies or misconduct.

9. Maintain

structures

governance

and
processes that are fit for purpose and support
good decision-making by the Board
The Board is satisfied with the Company’s corporate
governance, given the Company’s size and the
nature of its operations, and as such there are no
specific plans for any material changes to the
Company’s corporate governance arrangements in
the shorter term.

As noted in the disclosure above in respect of
Principle Five, Andrew Perloff is both Chairman and

Panther Securities P.L.C.

Chief Executive Officer of the Company. In his role
as Chairman, Mr Perloff has overall responsibility for
corporate governance matters in the Company,
leadership of
the board and ensuring its
effectiveness on all aspects of its role. In his role as
Chief Executive Officer Mr Perloff
leads the
Company’s staff and is responsible for implementing
those actions required to deliver on the agreed
strategy. Mr Perloff and his family trusts are the
beneficiaries of
the Company’s
the majority of
ordinary shares. Mr Perloff is one of the original co-
founders of
the Panther Securities property
investment business and has been a significant
driving force underlying the Group’s development.
On this basis, the Board considers that it remains
in the best interests of the Group to maintain Mr
Perloff’s positions as both Chairman and Chief
Executive Officer (a position that he has held for a
this is
number of years), notwithstanding that
contrary to recommended best practice in the QCA
Code. Feedback received from shareholders has
been positive on this point.

The Executive Directors have a responsibility for the
operational management of the Group’s activities.
The Non-executive Directors provide independent
and objective insight and judgment
to Board
decisions. The Board has overall responsibility for
promoting the success of the Group.

The Board has established an Audit Committee and
a Remuneration Committee comprised only of our
Non-Executive Directors to provide a level of
independence and objectivity.

Audit Committee
The Audit Committee consists solely of the two non-
executive Directors and it is chaired by Peter Kellner.
Its terms of reference are that it meets at least twice
a year to review the Group’s accounting policies,
financial and other reporting procedures, with the
external auditors in attendance when appropriate.
Over the year to 31 December 2018 the committee
met three times with all members present. The
internal controls are reviewed annually ensuring their
effectiveness and any specific issues are dealt with
if and when they arise. When the Board reviews
internal controls they consider the effectiveness of
controls, concentrating on all material controls,
including operational and compliance controls, and
risk management systems.

Remuneration Committee
The Remuneration Committee consists solely of the
non-executive Directors, Bryan Galan
two
(Chairman) and Peter Kellner. Its terms of reference
are that it reviews the terms and conditions of
service of the Chairman and Executive Directors,
satisfy
ensuring that
performance and other criteria. When setting
remuneration
consults with
the Committee
the Chairman of the Board and no external third
parties are consulted. In the year to 31 December
2018 the Committee met
three times with all
members present.

and benefits

salaries

reward levels

role,
throughout

Remuneration policy
Company policy is to reward fairly the Executive
Directors sufficiently to retain and motivate these
In determining remuneration,
key individuals.
their
consideration is given to their
performance,
the
organisation, as well as the external employment
market. The Remuneration Committee considers
that currently the Executive Directors’ remuneration
is below market comparables, however some
directors are incentivised by their personal holdings
in the Company. The only element of remuneration
that reflects specific performance is the bonuses,
however this is adjusted to reflect market conditions
and company results.

(cid:1) Approval of company policies

(cid:1) Other matters, such key adviser appointments

and insurance

10. Communicate how the Group is governed and
is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Company provides extensive information about
the Group’s activities in the Annual Report and
Financial Statements and the Interim Report, copies
of which are sent to shareholders. Additional copies
are available by application. The Group is active in
communicating with both its institutional and private
shareholders and welcomes queries on matters
relating to shareholdings and the business of the
Group. All shareholders are encouraged to attend
the Annual General Meeting, at which Directors and
senior management are introduced and are
available for questions. The Company provides a
website with up to date information,
including
announcements and company accounts.

the

importance

of
The Board recognises
communication with the Group’s shareholders and
various stakeholders. The Group updates its
website regularly with any announcements and
always welcomes shareholders’ queries which are
welcomed by all members of the Board whenever
they arise.

The Company does not have a Nomination
committee, as the need for appointments and
decisions regarding appointments are considered
by the Board as a whole.

The key matters reserved for the Board are the
following:

(cid:1) Strategy

(cid:1) Structure and capital

(cid:1) Financial reporting and controls

(cid:1) Internal controls

(cid:1) Significant investments

(cid:1) Board membership and other appointments

(cid:1) Delegation of authority

(cid:1) Corporate governance

The Annual General Meeting also provides an
important opportunity to meet shareholders. The
Board has hot drinks before and after the Annual
General Meeting where dialogue is encouraged.

The detailed results of voting on all resolutions in
future general meetings will not be posted to the
Group’s website or announced, as the Board feels
that
these results have in recent years been
unambiguous and generally unanimous.

Where a significant proportion of votes (e.g. 20% of
independent votes) have been cast against a
resolution at any general meeting, the Board will
post this on the Group’s website and will include,
on a timely basis, an explanation of what actions it
intends to take to understand the reasons behind
that vote result, and, where appropriate, any
different action it has taken, or will take, as a result
of the vote.

Panther Securities P.L.C.

Corporate Governance continued

The Group’s financial reports for the last five years can
be found online: http://www.pantherplc.com/financial/
reports-and-accounts/

Notices of Annual General Meetings of the Company
for the last five years are included at the end of each of
report and accounts. Within the last
the annual
five years, other than its Annual General Meetings,
the Company has not held and other General Meetings
of Shareholders.

Certain details regarding the Company’s Audit
Committee and Remuneration Committee and their
work over the year to 31 December 2018 can be found
in the disclosure above in respect of Principle Nine. The
Company’s Audit Committee and Remuneration
Committee do not produce public reports on their work
over the year, although their work and key findings are
communicated to the Board. Details of the Company’s
remuneration policy can be found in the disclosure
above in respect of Principle Nine and details of the
Directors’ remuneration can be found above in the
Directors’ Report.

Panther Securities P.L.C.

Independent Auditors’ Report

Independent Auditor’s Report to the Members of Panther Securities P.L.C.

Opinion
We have audited the Group financial statements of Panther Securities PLC (‘the Group’) for the year ended
31 December 2018 which comprise the Consolidated Income Statement,
the Consolidated Statement of
Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated Statement of Changes in
Equity, the Consolidated Statement of Cash Flows and the Notes to the Consolidated Accounts, including a summary
of significant accounting policies. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

In our opinion, the Group financial statements:

(cid:1) give a true and fair view of the state of the Group’s affairs as at 31 December 2018 and of its profit for the year then

ended;

(cid:1) have been properly prepared in accordance with IFRSs as adopted by the European Union; and

(cid:1) 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
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 Group financial statements in the UK, including the FRC’s Ethical
Standard as applied to SME listed entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.

Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report
to you where:

(cid:1) the Directors’ use of the going concern basis of accounting in the preparation of the Group financial statements

is not appropriate; or

(cid:1) the Directors have not disclosed in the Group financial statements any identified material uncertainties that may
cast significant doubt about the Group’s ability to continue to adopt the going concern basis of accounting for
a period of at least twelve months from the date when the Group financial statements are authorised for issue.

Key audit matters
We identified the key audit matters described below as those that were of most significance in the audit of the
financial statements of the current period. Key audit matters include the most significant assessed risks of material
misstatement, including those risks that had the greatest effect on our overall audit strategy, the allocation of
resources in the audit and the direction of the efforts of the audit team.

Panther Securities P.L.C.

Independent Auditors’ Report continued

In addressing these matters, we have performed the procedures below which were designed to address the matters
in the context of the financial statements as a whole and in forming our opinion thereon. Consequently, we do not
provide a separate opinion on these individual matters.

Key audit
matter

Valuation of
investment
properties
(Group)

Description of risk

How the matter was addressed in the audit
and key observations arising with respect
to that risk

The valuation of
the Group’s investment
property portfolio is inherently subjective due
to, among other factors, the individual nature
its location and the
of each property,
expected future rentals for that particular
property.

the
We read the valuation reports for all
properties and confirmed that
the valuation
approach for each was in accordance with
RICS standards and suitable for use in
determining the carrying value for the purpose of
the financial statements.

We attended a meeting with management and
the non-executive directors to consider the
draft valuation.

We assessed the Valuers’ qualifications and
expertise to determine whether there were any
matters that might have affected their objectivity
or may have imposed scope limitations upon
their work.

ledger. The tenant

We tested a sample of current rents receivable
the valuation for consistency with the
per
ledger
Group’s tenant
data was subject to separate sample testing
to ensure that the records within the system is
consistent
lease
the
documentation.

underlying

with

We compared sale prices to the previous
valuations to understand whether the sale price
provides evidence of fair value or reflects factors
specific to the sale and not the general market.

Our work focused on the highest value
properties in the portfolio and those where the
assumptions used suggested a possible outlier
versus market data for the relevant sector.

We concluded that the assumptions used in the
valuations were supportable in light of available
and comparable market evidence.

The valuations were carried out by the
Directors supported by a Royal Institute of
Chartered Surveyors
(‘RICS’) qualified
employee
accordance with RICS
Professional Standards.

In determining a property’s valuation the
Valuers take into account property-specific
tenancy
information such as the current
agreements and rental income. They apply
assumptions for yields and estimated market
rent, which are influenced by prevailing
market yields and comparable market
transactions, to arrive at the final valuation.
For developments, the residual appraisal
method is used, by estimating the fair value
of
a
capitalisation method less estimated costs to
completion and a risk premium.

completed

project

using

the

The significance of
the estimates and
judgements involved, coupled with the fact
that only a small percentage difference in
valuations, when
individual
aggregated, could result
in a material
misstatement, warrants specific audit focus
in this area.

property

The Group’s accounting policy for investment
properties is included within note 4. Details
of the Groups valuation methodology and
resulting valuation can be found in note 16.

Panther Securities P.L.C.

Key audit
matter

Valuation of
derivative
financial
instruments
(Group and
Company)

Revenue
recognition
(Group)

Description of risk

The Group has entered into three interest
rate swaps (‘swaps’) which are carried at fair
value through profit and loss. Assessing the
fair value of the swaps is inherently subjective
as the Group uses its judgement to select
suitable valuation techniques and make
assumptions which are mainly based on
market conditions existing at the reporting
date.

The Group benchmarks its valuations against
those provided by the counterparty bank and
a third party bank.

The Group’s accounting policy for derivative
instruments is included within
financial
note 4. Details of the Group’s derivative
financial instruments can be found in note 28.

How the matter was addressed in the audit
and key observations arising with respect
to that risk

We gained an understanding of the Group’s
methodology in respect of determining the fair
value as at the Statement of Financial Position
date and assessed compliance with the
requirements of relevant accounting standards.

We used internal experts to compute an
independent estimate of fair value as at the
Statement of Financial Position date. Additionally
we have considered the disclosures in the
financial statements in respect of swaps
outstanding as at the reporting date.

We are satisfied that the fair value of swaps and
presentation in the Annual Report and Financial
Statements is appropriate and is in line with the
requirements of relevant accounting standards.

Revenue for the Group consists primarily of
rental income.

In testing revenue recognition we have:

Revenue growth is a key performance
indicator of the Group. Revenue expectations
may place pressure on management
to
distort revenue recognition. This may result
in overstatement or deferral of revenues to
assist in meeting current or future targets or
expectations.

include

These
spreading of occupier
incentives and guaranteed rent increases as
these balances require adjustments made to
rental income to ensure revenue is recorded
on a straight-line basis over the course of a
lease, coupled with turnover and profit rents
which require the use of estimates.

(cid:1) performed detailed testing of a sample of
revenue transactions including agreement to
supporting documentation and recalculation
of income deferral;

(cid:1) performed detailed testing of a sample of
to supporting
units including agreement
documentation and recalculation of income
deferral; and

(cid:1) agreed a sample of accrued income
balances, arising as a result of occupier
incentives, guaranteed rent
increases or
profit or turnover estimation to supporting
documentation and recalculated the income
accrual.

The Group’s accounting policy for revenue
recognition is included within note 4.

The results of our testing were satisfactory.

Panther Securities P.L.C.

Independent Auditors’ Report continued

Materiality
The materiality for the Group financial statements as a whole was set at £5,978,000. This has been determined with
reference to the benchmark of the Group’s total assets, which we consider to be one of the principal considerations
for members of the Parent Company in assessing the performance of the Group. Materiality represents 3% of the
total assets as presented on the face of the Consolidated Statement of Financial Position.

The materiality for the Parent Company financial statements as a whole was set at £4,291,000. This has been
determined with reference to the benchmark of the Parent Company’s total assets as the Parent Company exists
only as a holding company for the Group and carries on no trade in its own right. Materiality represents 3% of total
assets as presented on the face of the Parent Company’s Statement of Financial Position.

A number of key performance indicators of the Group are driven by Income Statement items and we therefore
applied a lower specific materiality of £272,000, based on 2% of Group revenue. This lower specific materiality was
applied to the components of the Group and Parent Company’s Income Statement, excluding investment property
valuation movements and fair value movements on derivative financial instruments.

An overview of the scope of our audit
Of the Group’s 26 reporting components, we subjected all to audits for Group reporting purposes. The components
within the scope of our work covered 100% of Group revenue, Group profit before tax and Group net assets. The
Group audit team visited one location in the UK covering the 26 components that we subjected to audit.

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

In connection with our audit of the Group financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the Group financial statements
or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the Group financial statements or a material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:

(cid:1) the information given in the Group Strategic Report and the Directors’ Report for the financial year for which the

Group financial statements are prepared is consistent with the Group financial statements; and

(cid:1) the Group Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal

requirements.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and its environment obtained in the course of the
audit, we have not identified material misstatements in the Group Strategic Report or the Directors’ Report.

Panther Securities P.L.C.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report
to you if, in our opinion:

(cid:1) certain disclosures of Directors’ remuneration specified by law are not made; or

(cid:1) 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 set out on page 20, 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.

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

Other matter
We have reported separately on the Parent Company’s financial statements of Panther Securities PLC for the year
ended 31 December 2018.

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

Jacqueline Oakes
Senior Statutory Auditor, for and on behalf of
Nexia Smith & Williamson
Statutory Auditor
Chartered Accountants

25 Moorgate
London
EC2R 6AY

30 April 2019

Panther Securities P.L.C.

Consolidated Income Statement
For the year ended 31 December 2018

Revenue

Cost of sales

Gross profit

Other income

Administrative expenses

Bad debt expense

Operating profit

Profit on disposal of investment properties

Movement in fair value of investment properties

Finance costs – bank loan interest

Finance costs – swap interest

Investment income

Loss on disposal of fixed assets

Profit realised on the profit on the disposal of

available for sale investments

Profit (realised) on the disposal of investments

Fair value gain on derivative financial liabilities

Profit before income tax

Income tax expense

Profit for the year

Loss for the period from discontinued operations

Profit for the year

Discontinued operations attributable to:

Equity holders of the parent

Non-controlling interest

Loss for the year

Continuing operations attributable to:

Equity holders of the parent

Profit for the year

Earnings per share

Basic and diluted – continuing operations

Basic and diluted – discontinued operations

31 December
2018
£’000

31 December
2017
£’000

Notes

13,607

(3,947)

9,660

457

(1,819)

(796)

7,502

11,750

(6,396)

12,856

(2,526)

(2,533)

(41)

—

886

8,700

(1,653)

7,047

—

7,047

—

7,047

39.9p

—

12,946

(3,779)

9,167

1,905

(1,568)

(537)

8,967

1,071

16,776

26,814

(2,302)

(2,726)

—

1,128

—

1,850

24,791

(3,490)

21,301

(59)

21,242

(52)

(7)

(59)

21,301

120.2p

(0.3p)

Panther Securities P.L.C.

Consolidated Statement of Comprehensive Income
For the year ended 31 December 2018

Profit for the year

Other comprehensive income

Items that may be reclassified subsequently

to profit or loss

Movement in fair value of available for

sale investments taken to equity

Realised fair value on disposal of available for sale

investments previously taken to equity

Deferred tax relating to movement in fair value of

available for sale investments taken to equity

Realised tax relating to disposal of investments

previously taken to equity

Items that will not be reclassified subsequently

to profit or loss

Movement in fair value of investments taken to equity

Deferred tax relating to movement in fair value of

investments taken to equity

Other comprehensive (loss)/income for the year,

net of tax

Total comprehensive income for the year

Attributable to:

Equity holders of the parent

Non-controlling interest

31 December
2018
£’000

31 December
2017
£’000

Notes

7,047

21,242

—

(197)

(163)

6,884

—

6,884

279

(269)

(53)

—

21,250

21,257

(7)

21,250

Panther Securities P.L.C.

Consolidated Statement of Financial Position
Company number 00293147

As at 31 December 2018

ASSETS
Non-current assets
Plant and equipment
Investment properties
Deferred tax asset
Investments

Current assets
Stock properties
Trade and other receivables
Cash and cash equivalents (restricted)
Cash and cash equivalents

Total assets

EQUITY AND LIABILITIES
Capital and reserves
Share capital
Share premium account
Treasury shares
Capital redemption reserve
Retained earnings
Total equity
Non-current liabilities
Long-term borrowings
Derivative financial liability
Deferred tax liabilities
Obligations under finance leases

Current liabilities
Trade and other payables
Short-term borrowings
Current tax payable

Total liabilities
Total equity and liabilities

31 December
2018
£’000

31 December
2017
£’000

Notes

15
16
26
18

19
21

23
24
24
24

25
28
26
30

27
25

—
170,236
1,811
1,850
173,897

448
4,896
14,436
5,614
25,394
199,291

4,437
5,491
(213)
604
83,710
94,029

58,864
25,514
—
7,510
91,888

10,192
1,071
2,111
13,374
105,262
199,291

54
201,825
—
17
201,896

448
3,677
—
5,941
10,066
211,962

4,437
5,491
(213)
604
80,893
91,212

74,270
26,400
1,183
7,552
109,405

10,945
159
241
11,345
120,750
211,962

The accounts were approved by the Board of Directors and authorised for issue on 29 April 2019. They were signed
on its behalf by:

A.S. Perloff
Chairman

Panther Securities P.L.C.

Consolidated Statement of Changes in Equity
For the year ended 31 December 2018

Balance at 1 January 2017

Total comprehensive income

Treasury shares purchased

Dividends

Share
capital
£’000

4,437

Share
premium
£’000

5,491

—

Balance at 1 January 2018

4,437

5,491

Total comprehensive income

Dividends

—

Treasury

Capital
shares redemption
£’000
£’000

Retained
earnings
£’000

Total
£’000

—

(213)

—

(213)

—

604

61,747

72,279

—

21,257

—

(213)

(2,111)

604

80,893

91,212

—

6,884

(4,067)

Balance at 31 December 2018

4,437

5,491

(213)

604

83,710

94,029

Panther Securities P.L.C.

Consolidated Statement of Cash Flows
For the year ended 31 December 2018

Cash flows from operating activities

Operating profit

Depreciation charges for the year

Decrease in stock properties

Rent paid treated as interest

Profit before working capital change

(Increase)/decrease in receivables

(Decrease)/increase in payables

Cash generated from operations

Interest paid

Income tax paid

Net cash (used in)/generated from continuing operating activities

Net cash (used in) discontinued operating activities

Cash flows from investing activities

Purchase of plant and equipment

Purchase of investment properties

Purchase of investments**

Corporate disposal (net of cash sold)

Proceeds from sale of investment property

Proceeds from sale of available for sale investments**

Proceeds from sale of investments**

Dividend income received

Interest income received

31 December
2018
£’000

31 December
2017
Restated
£’000

7,502

—

(571)

6,944

(1,219)

(319)

5,406

(4,375)

(2,743)

(1,712)

—

(3,894)

(2,271)

—

40,790

—

275

8,967

124

(528)

8,572

302

293

9,167

(4,324)

(1,194)

3,649

(35)

(10)

(8,870)

—

(12)

2,239

2,046

—

Net cash generated from/(used in) investing activities

34,924

(4,580)

Cash flows from financing activities

Repayments of loans

Loan arrangement fees and associated costs

Purchase of own shares

Draw down of loan

Dividends paid

Net cash (used in)/generated from financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at the beginning of year*

Cash and cash equivalents at the end of year*

(15,161)

(375)

—

500

(4,067)

(19,103)

14,109

5,941

20,050

(159)

—

(213)

4,503

(2,111)

2,020

1,054

4,887

5,941

* Of this balance £14,436,000 (2017: £nil) is restricted by the Group’s lenders i.e. it can only be used for purchase of investment

property.

** Shares in listed and/or unlisted companies.

Panther Securities P.L.C.

Notes to the Consolidated Accounts
For the year ended 31 December 2018

General information
Panther Securities P.L.C. (the “Company”) is a Public Limited Company limited by shares and incorporated in
England and Wales. The addresses of its Registered Office and principal place of business are disclosed in the
introduction to the Annual Report. The principal activities of the Company and its subsidiaries (the Group) are
described in the Director’s Report.

New and revised International Financial Reporting Standards
New and amended Standards which became effective in the year
The Group has adopted the following new and amended standards:

(cid:1)

IFRS 9: Financial instruments

IFRS 15: Revenue for Contracts with Customers

The disclosures required as a result of these amendments are given in note 4 and note 31.

On initial application of IFRS 9 the Group has applied transitional relief and opted not to restate prior periods.
There were no differences identified arising from the adoption of IFRS 9 in relation to measurement and
impairment that required recognition at the date of initial application, namely 1 January 2018. The group elected
to present, in OCI, changes in the fair value of all its equity investments previously classified as available-for-
sale, because these investments are held as long-term strategic investments that are not expected to be sold
in the short to medium term.

IRFS 9 Financial Instruments (became effective for accounting periods commencing on or after 1 January
2018). This standard deals with the classification, measurement and recognition of financial assets and
liabilities. The Group does not apply hedge accounting on the financial derivatives held, and as such there is
no material impact on the financial statements relating to such items. Derivative financial instruments continue
to qualify for designation as at fair value through profit and loss. IFRS 9 requires the Group to make an
assessment of Expected Credit Losses (‘ECLs’) on its debtors based on tenant payment history and the
Directors’ assessment of the future credit risk relating to its trade receivables at reporting dates. The Directors
assessment resulted in no material differences and there has been no adjustment to opening balances as a
result of IFRS 9.

The Group has elected to apply IFRS 15 prospectively from 1 January 2018. Application of the standard has
not had a material effect on the financial statements and no adjustment was required to opening reserves as
at 1 January 2018.

In addition to the adoption of IFRS 9 and 15, the following amendments have been issued and are effective
for the first time in this period; however there has been no material impact on these financial statements as a
result of the changes introduced:

(cid:1)

Amendments to IFRS 4: “Applying IFRS 9 with IFRS 4”

Amendments to IAS 40: “Transfers of investment property”

Amendments to IFRS 1 and IAS 28 in “Annual Improvements 2014-2017 cycle”

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

New and revised International Financial Reporting Standards continued
Standards, interpretations and amendments to published standards that are not yet effective
Certain new standards, amendments and interpretations to existing standards have been published that are
mandatory for the Group’s accounting periods beginning on or after 1 January 2019 or later periods and have
not been early adopted. It is anticipated that these new standards, interpretations and amendments currently
in issue at the time of preparing the financial statements (April 2019) are not expected to have a material effect
on the consolidated financial statements of the Group.

(cid:1)

IFRS 16 Leases – the adoption of this standard for lessees, will result in almost all
leases being
recognised on the Statement of Financial Position, as the distinction between operating and finance
leases will be removed. This is not expected to significantly impact the financial statements of the Group
as the Group already treats investment properties held under operating leases as finance leases in
accordance with IAS 40 Investment Property. The Group has a very low number of operating leases, at
low values comparatively to investment properties, these are for its office and a few smaller assets which
will be affected by this standard, however, these are not material to the financial statements.

The Parent Company and subsidiaries have not adopted IFRS in their individual accounts.

Critical accounting judgements and key sources of estimation uncertainty
Sources of judgement and estimation uncertainty in respect of the valuation of derivative financial instruments
and investment properties are noted in their accounting policies and respective notes.

Significant accounting policies
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards adopted for use in the European Union. The financial statements have been prepared on the
historical cost basis, except for the revaluation of Investment Properties, Derivative Financial Instruments and
Investments which are carried at fair value.

The preparation of the financial statements requires management to make estimates and assumptions that
affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent
liabilities at the date of the financial statements. If in the future such estimates and assumptions which are
based on management’s best judgement at the date of the financial statements, deviate from the actual
circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the
circumstances change. Where necessary, the comparatives have been reclassified or extended from the
previously reported results to take into account presentational changes. The principal accounting policies are
set out below.

Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern
the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries disposed of are included within the Income Statement, as profit/(loss) from
discontinued operations, to the effective date of disposal. Prior year balances are restated to present the
performance of these discontinued operations with this single line. Where necessary, adjustments are made
to the financial statements of subsidiaries to bring their accounting policies into line with those used by other
members of the Group. All
intra-Group transactions, balances, income and expenses are eliminated on
consolidation.

Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group’s
equity therein. Non-controlling interests consist of the amount of those interests at the date of the original
business combination and the non-controlling share of changes in equity since the date of the combination.
Profits applicable to the non-controlling interest in the subsidiary’s equity are allocated against the interests of
the Group.

Panther Securities P.L.C.

Business combinations
The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is
measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or
assumed, consideration payable including equity instruments issued by the Group in exchange for control of
the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets,
liabilities and contingent liabilities that meet the conditions for recognition are recognised at their fair values at
the acquisition date.

Investment properties
Investment properties, which are properties held to earn rentals and/or capital appreciation, are revalued
annually using the fair value model of accounting for Investment Property at the Statement of Financial Position
date. When revaluing properties judgements are made based on the covenant strength of tenants, remainder
of lease term of tenancy, location and other developments which have taken place in the form of open market
lettings, rent reviews, lease renewals and planning consents. Gains or losses arising from changes in the fair
value of investment property are included in the Income Statement in the period in which they arise.

In accordance with IAS 17 (‘Leases’) and IAS 40 (‘Investment Property’), a property interest held under an
operating lease, which meets the definition of an investment property, is classified as an investment property.
The property interest is initially accounted for as if it were a finance lease, recognising as an asset and a liability
the present value of the minimum lease payments due by the Group to the freeholder. Subsequently, and as
described above, the fair value model of accounting for investment property is applied to these interests. A
corresponding interest charge is applied to the finance lease liabilities based on the effective interest rate. Fair
value measurement of investment property is classified as Level 3 in the fair value hierarchy. Using the fair
value model in IAS 40 is a recurring measurement.

Investment property disposals are recognised on the date that exchange of contracts become unconditional
and there is a reasonable expectation that completion will occur. At this point the investment property is
derecognised and any difference between consideration received and carrying value is recognised in the
Income Statement.

Transfers between investment property and stock properties
Transfers from stock properties to investment property are made at fair value; any difference between the fair
value of the property at the date of transfer and its carrying amount is recognised in profit or loss. For a transfer
from investment property carried at fair value to inventories, the property’s deemed cost for subsequent
accounting in accordance with IAS 2 (‘Inventories’) is its fair value at the date of change in use.

Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable
is based on taxable profit or loss for the period. Taxable profit or loss differs from profit or loss as reported in
the Income Statement because it excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by the Statement of Financial
Position date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for
using the Statement of Financial Position liability method. Deferred tax liabilities are generally 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 goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects neither the
taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries
and associates, and interests in joint ventures, 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.

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

Significant accounting policies continued
The carrying amount of deferred tax assets is reviewed at each Statement of Financial Position date and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered. Deferred tax is calculated at the tax rates that have been substantively
enacted on or before the Statement of Financial Position date. Deferred tax is charged or credited to the
Income Statement, except when it relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt within equity.

Current tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current assets and liabilities on a net basis. Corporation tax for the period is
charged at 19.00% (2017 – 19.25%), representing the best estimate of the weighted average annual
corporation tax rate expected for the full financial year.

Segment reporting
An operating segment is a component of an entity about which separate financial information is available that
is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in
assessing performance.

Retirement benefit costs
The Company operates a defined contribution pension scheme and any pension charge represents the
amounts payable by the Company to the fund in respect of the year.

Revenue recognition
IFRS 15 Revenue from Contracts is applicable to management fees and other income but excludes rent
receivable. The majority of the Group’s income is from tenant leases and is outside the scope of the new
standard. The financial impact of the new standard is considered immaterial and does not materially impact
the financial statements.

Revenue comprises:

(cid:1)

Rental income from tenancy occupied properties net of Value Added Tax where appropriate: The income
is recognised on an accruals basis.

Sale of stock properties: This is recognised on the date that exchange of contracts becomes
unconditional, provided that there is a reasonable expectation that completion will occur.

Other income comprises:

(cid:1)

Property management
fees on service charge managed properties net of Value Added Tax
where appropriate. Income is recognised on an accruals basis when the performance obligations have
been met.

Surrender premiums received on the early termination of tenant leases. Income is recognised on the
date of surrender of the lease.

Option premium and extension fees are recognised when the performance obligations are met and their
signed contracts.

Dilapidation fees received but not expensed against repair costs. Income is recognised when the
dilapidation fee has been contractually agreed with the tenant.

The fair value of consideration received or receivable on the above services is recognised when the above
revenue can be reliably measured. Revenue from services is recognised evenly over the period in which the
services are provided.

Panther Securities P.L.C.

Plant and equipment
Fixtures, fittings and motor vehicles are stated at cost less accumulated depreciation and any accumulated
impairment losses. Depreciation is provided at rates calculated to write off the cost of plant and equipment
less their residual value, over their expected useful lives. The rates used across the Group are as follows:

Fixtures and equipment
Motor vehicles

10% – 33%
20%

Straight line
Straight line

The gain or loss arising on the disposal or retirement of an item of plant and equipment is determined as
the difference between the sales proceeds and the carrying amount of the asset and is recognised in the
Income Statement.

Impairment of property, plant and equipment
At each Statement of Financial Position date, the Group reviews the carrying amounts of its property, plant and
equipment to determine whether there is any indication that those assets have suffered an impairment loss. If
any such indication exists the recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the
Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable
amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset is
estimated to be less than the carrying amount of the asset, it is reduced to its recoverable amount. An
impairment loss is recognised immediately in the Income Statement, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss up to value of previous revaluation is treated as a
revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset in prior years.
A reversal of an impairment loss is recognised immediately in the Income Statement, unless the relevant
asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a
revaluation increase.

Leasing
All leases are operating leases.

The Group as lessor
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease.
Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount
of the leased asset and recognised on a straight line basis over the lease term.

The Group as lessee
Rentals payable under operating leases are charged to profit or loss on a straight line basis over the term of
the relevant lease.

Benefits received or provided as an incentive to enter into an operating lease are also spread on a straight line
basis over the lease term.

The accounting policy for investment properties describes the Group’s treatment of investment properties held
under an operating lease.

Financial instruments
Financial assets and financial liabilities are recognised on the Group’s Statement of Financial Position when the
Group becomes party to the contractual provisions of the instrument.

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

Significant accounting policies continued
Trade receivables
Trade receivables are initially recognised at fair value, and are subsequently measured at amortised cost using
the effective interest rate method. IFRS 9 requires the Group to make an assessment of Expected Credit
Losses (‘ECLs’) on its debtors based on tenant payment history and the Directors’ assessment of the future
credit risk relating to its trade receivables at reporting dates. The Directors assessment resulted in no material
differences and there has been no adjustment to opening balances as a result of IFRS 9.

Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits.

Financial liabilities and equity
Financial liabilities and equity instruments issued by the Group are classified according to the substance of the
contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An
equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting
all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set
out below.

Trade payables
Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the
effective interest rate method.

Bank borrowings
Interest bearing bank loans and overdrafts are initially measured at fair value less any transaction fees such as
loan arrangement fees, and are subsequently measured at amortised cost, using the effective interest rate
method. Any difference between the proceeds and the settlement or redemption of borrowings is recognised
over the term of the borrowings.

Where new bank financing is obtained on substantially different terms to the existing financing the original
financial liability is derecognised and a new financial liability recognised.

Derivative financial instruments
Certain financial instruments are entered into by the Directors on behalf of the Group to hedge against interest
rate fluctuations. These include interest rate swaps, options, collar and caps. Gains and losses on revaluation
exclude interest expense on derivatives. The Group does not hold or issue derivatives for trading purposes.
Such derivative financial instruments are initially recognised at fair value on the date at which a derivative
contract is entered into and are subsequently remeasured at fair value at each reporting date.

The Directors estimate the fair value annually for these financial instruments using the year end yield curve to
extract the markets estimate of future pricing for interest rates, this valuation is then considered alongside two
valuations obtained from different banks (one being HSBC bank – the counterparty to these agreements) in
deciding the most appropriate value. This is an estimation and as such there is uncertainty to the fair value
shown within the accounts. For derivatives that do not qualify for hedge accounting, any gains or losses arising
from changes in fair value are taken directly to the Income Statement for the year. None of the Group’s
derivative financial instruments qualify for hedge accounting.

Investments
Under IFRS 9, these investments are carried at fair value through other comprehensive income and classified
in the Statement of Financial Position as investments. Fair values of these investments are based on quoted
market prices where available. The fair value of the investments in unquoted equity securities cannot be
measured reliably and they have therefore been measured at cost. Movements in fair value are taken
directly to equity. When these investments are considered impaired in accordance with the requirements of
IFRS 9, the impairment losses are recognised in the Income Statement. On realisation of the investments, the
cumulative gain or
loss previously recognised through equity is reclassified from reserves to the
Income Statement.

Panther Securities P.L.C.

The Group has not designated any financial assets that are not classified as held for trading as financial assets
at fair value through the Income Statement. The investments represent investments in listed and unquoted
equity securities that offer the Group the opportunity for return through dividend income and fair value gains.
They have no fixed maturity or coupon rate. Those shares that are expected to be held for the long term are
shown as non-current assets and those that are held for short term are shown as current assets.

Impairment of investments
At each Statement of Financial Position date the Group reviews any decline in the fair value of investments to
determine whether there is any objective evidence that those assets are impaired. If the asset is judged to be
impaired the cumulative loss that had been recognised in other comprehensive income is reclassified from
equity to the Income Statement being the difference between the acquisition cost and the current fair value,
less any impairment loss for that financial asset previously recognised in the Income Statement.

Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable
that the Group will be required to settle that obligation. Provisions are measured at the Directors’ best estimate
of the expenditure required to settle the obligation at the Statement of Financial Position date, and are
discounted to present value where the effect is material.

Stock properties
Properties that are purchased for future sale are classified as stock properties. Stock properties are valued at
the lower of cost and net realisable value. Cost comprises the cost of the property and those overheads that
have been incurred in bringing the stock properties to their present condition. Net realisable value represents
the estimated selling price less all estimated costs to be incurred in marketing, selling and distribution.

Share capital
Share capital represents the nominal value of shares issued by the Company.

Share premium
Share premium represents amounts received in excess of nominal value on the issue of share capital.

Treasury shares
Treasury shares represents the cumulative amounts paid to re-purchase shares in the company.

Capital redemption reserve
The capital redemption reserve arises on the purchase of the Company’s own shares for cancellation.

Retained earnings
Retained earnings represent the accumulated comprehensive income and losses of the Group less
dividends paid.

Dividends
Dividends are recognised based on the value per share declared. Where scrip dividends are issued, the value
of such shares, measured as the amount of the cash dividend alternative, is credited to share capital and
share premium. The net movement in equity represents the cash paid on the dividend.

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

Revenue, cost of sales and other income
The Group’s only operating segment is investment and dealing in property and securities. All revenue, cost of
sales and profit or loss before taxation is generated in the United Kingdom. The Group is not reliant on any
key customers.

Other income

Surrender premium (Maldon)

Contract extension fee (disposals)

Service charge management fees

Guarantee fee

Dilapidations and other

Operating profit

The operating profit for the year is stated after charging:

Depreciation of tangible fixed assets – owned by the Group

Fees payable to the Group’s auditor for the audit of both the

parent company and the Group’s annual report and accounts

Fees paid to the Group’s auditor for other services:

The audit of the parent’s subsidiaries

Other services provided

Staff costs

Staff costs, including Directors’ remuneration, were as follows:

Wages and salaries

Social security costs

Pension contributions

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

Directors

Other employees

2018
£’000

—

113

212

457

2018
£’000

947

107

1,087

2017
£’000

1,365

400

102

—

1,905

2017
£’000

777

887

2018
Number

2017
Number

Panther Securities P.L.C.

Directors’ remuneration

Emoluments for services as Directors

2018
£’000

285

2017
£’000

277

There are no Directors with retirement benefits accruing under money purchase pension schemes in respect
of qualifying services. Please refer to the Directors’ Report for information on the highest paid Director and in
respect of individual Directors’ emoluments.

Key management are those persons having authority and responsibility for planning, directing and controlling
the activities of the Group. In the opinion of the Board, the Group’s key management comprises the Executive
and Non-Executive Directors of Panther Securities PLC. Information regarding their emoluments is set
out above.

The following disclosures are in respect of employee benefits payable to the Directors of Panther Securities
PLC across the Group and are thus stated in accordance with IFRS:

Emoluments for services as directors

Employers NI

Compensation for loss of office

Short term employee benefits (salaries and benefits)

Investment income

Interest on bank deposits

Dividends from equity investments

10. Finance costs

Interest payable on bank overdrafts and loans

Interest payable on financial derivatives

Interest payable on finance lease liabilities*

2018
£’000

285

—

321

2018
£’000

1,955

2,533

571

5,059

2017
£’000

237

298

2017
£’000

1,774

2,726

528

5,028

Investment properties held under operating leases have been treated as being held under finance leases in accordance
with IAS 40.

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

11.

Income tax charge
The charge for taxation comprises the following:

Current year UK corporation tax

Prior year UK corporation tax

Current year deferred tax (credit)/expense – note 26

Income tax expense for the year

2018
£’000

4,684

(71)

4,613

(2,960)

1,653

2017
£’000

1,115

1,169

2,321

3,490

Domestic income tax is calculated at 19.00% (2017 – 19.25%) of the estimated assessable profit or loss for
the year. The provision for deferred tax has been calculated on the basis of 17.0% (2017 – 17.0%).

The total charge for the year can be reconciled to the accounting profit or loss as follows;

Profit before taxation

Profit before tax multiplied by the average
of the standard rate of UK corporation
tax of 19.00% (2017 – 19.25%)

Tax effect of expenses that are not deductible

in determining taxable profit

Dividend income not allowable for tax purposes

Tax on chargeable gains in excess of profits

Losses brought forward

Movement in deferred tax on revalued assets

Difference in current and deferred tax rates

Prior year corporation tax over provision

Tax charge

2018
£’000

8,700

2018
%

2017
£’000

24,791

2017
%

1,653

19.00

4,772

19.25

(1)

2,010

—

(1,601)

(352)

(71)

1,653

0.2

—

23.0

—

(18.4)

(4.0)

(0.8)

(6)

—

(11)

(930)

(419)

3,490

12. Loss or profit attributable to members of the parent undertaking

Dealt with in the accounts of:

– the parent undertaking

– subsidiary undertakings

2018
£’000

(5,283)

12,330

7,047

Panther Securities P.L.C.

0.1

—

(3.8)

(1.7)

0.2

2017
£’000

(3,249)

24,491

21,242

Reconciliation of parent company profit and loss

Profit of parent company before intercompany adjustments

Intercompany dividends (removed on consolidation)

Loss attributable to members of the Parent undertaking

13. Dividends

Amounts recognised as distributions to equity holders in the period:

Special dividend for the year ended 31 December 2017

of 10p per share

Final dividend for the year ended 31 December 2017

of 7p per share (2016: 9p per share)

Interim dividend for the year ended 31 December 2018

of 6p per share (2017: 5p per share)

2018
£’000

22,880

(28,163)

(5,283)

2018
£’000

1,768

1,238

1,061

4,067

2017
£’000

7,149

(10,398)

(3,249)

2017
£’000

—

1,227

884

2,111

The Directors recommend a payment of a final dividend, for the year ended 31 December 2018 of 6p per
share (2017 – 7p), following the interim dividend paid on 29 November 2018 of 6p per share and a special
dividend paid on 17 January 2019 of 15p per share. The final dividend of 6p per share will be payable on
5 September 2019 to shareholders on the register at the close of business on 09 August 2019 (Ex dividend
on 08 August 2019).

The full ordinary dividend for the year ended 31 December 2018 is anticipated to be 27p per share, being
the 6p interim per share paid, the 15p special dividend per share and the recommended final dividend of
6p per share.

14. Earnings/(loss) per ordinary share (basic and diluted)

The calculation of profit per ordinary share is based on the profit, after excluding non-controlling interests,
being a profit of £7,047,000 (2017 – £21,301,000) and on 17,683,469 ordinary shares being the weighted
average number of ordinary shares in issue during the year excluding treasury shares (2017 – 17,715,199).
There are no potential ordinary shares in existence. The Company holds 63,460 (2017 – 63,460) ordinary
shares in treasury.

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

15. Plant and equipment

Fixtures and
Equipment
£’000

Motor
Vehicles
£’000

Cost

At 1 January 2017

Additions

Disposal of MRG

Disposals

At 1 January 2018

Disposals

At 31 December 2018

Accumulated depreciation

At 1 January 2017

Depreciation charge for the year

Disposal of MRG

Disposals

At 1 January 2018

Depreciation charge for the year

Disposals

At 31 December 2018

Carrying amount

At 31 December 2018

At 31 December 2017

At 1 January 2017

895

(215)

(526)

164

(75)

832

(205)

(526)

110

(34)

—

Total
£’000

903

(215)

(526)

172

(75)

840

(205)

(526)

118

(34)

—

Panther Securities P.L.C.

16.

Investment properties

Fair value

At 1 January 2017

Additions

Disposals

Transferred from stock properties

Fair value adjustment on property held on operating leases

Revaluation increase

At 1 January 2018

Additions

Disposals

Fair value adjustment on property held on operating leases

Revaluation increase

At 31 December 2018

Carrying amount

At 31 December 2018

At 31 December 2017

Investment
Properties
£’000

176,489

8,870

(1,320)

164

846

16,776

201,825

3,894

(29,040)

(47)

(6,396)

170,236

201,825

At 31 December 2018, £129,739,000 (2017 – £154,747,000) and £40,497,000 (2017 – £47,078,000) included
within investment properties relates to freehold and leasehold properties respectively.

On the historical cost basis, investment properties would have been included as follows:

Cost of investment properties

2018
£’000

123,902

2017
£’000

129,725

The Group has pledged £154,743,000 (ignoring finance lease obligations) of
investment property
(2017 – £180,460,000) as security for the loan facilities granted to the Group at the Statement of Financial
Position date.

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

16.

Investment properties continued
Costs relating to ongoing and potential developments are included in additions to investment properties and
in the year ended 31 December 2018 amounted to £nil (2017 – £nil).

The property rental income earned by the Group from its investment property, all of which is leased out under
operating leases, amounted to £13,518,000 (2017 – £12,818,000).

Property valuations are complex, require a degree of judgement and are based on data some of which is
publicly available and some that is not. Consistent with EPRA guidance, we have classified the valuations of
our property portfolio as level 3 as defined by IFRS 13 Fair Value Measurement. Level 3 means that the
valuation model cannot rely on inputs that are directly available from an active market; however there are
related inputs from auction results that can be used as a basis. These inputs are analysed by segment in
relation to the property portfolio. All other factors remaining constant, an increase in rental income would
increase valuation, whilst an increase in equivalent nominal yield would result in a fall in value and vice versa.

In establishing fair value the most significant unobservable input is considered to be the appropriate yield to
apply to the rental income. This is based on a number of factors including financial covenant strength of the
tenant, location, marketability of the unit if it were to become vacant, quality of property and potential
alternative uses.

Yields applied across the majority of the portfolio are in the range of 6.5% – 11.0% with the average yield
being circa 9.0%. Assuming all else stayed the same; a decrease of 1.0% in the average yield would result in
an increase in fair value of £18,460,000 (2017: £23,118,000). An increase of 1.0% in the average yield would
result in a corresponding decrease in fair value.

The property valuations were carried out by the directors at 31 December 2018 (independently by GL Hearn
at 31 December 2017). The valuation methodology applied by the Directors and GL Hearn is in accordance
with The RICS Valuation Global Standards (effective from July 2017), which is consistent with the required
IFRS 13 methodology. IFRS 13 defines fair value as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at the measurement date.

For some properties, valuation was based on an end development rather than investment income in order to
achieve highest and best use value. To get the valuation in this instance the end development is discounted
by profit for a developer and cost to build to get to the base estimated market value of investment.

The amount of unrealised gains or losses on investment properties is charged to the Income Statement as the
movement in fair value of investment properties, for 2018 this was a fair value loss of £6,396,000 (2017 – fair
value gain of £16,776,000). The amount of realised gains or losses is shown as the profit on disposal of
investment properties within the income statement, for 2018 there was a realised gain of £11,750,000
(2017 – £1,071,000).

Panther Securities P.L.C.

17. Subsidiaries

Details of the Company’s subsidiaries at 31 December 2018 are as follows;

Name of subsidiary

Panther Trading Limited

Panther (Dover) Limited

Panther Developments Limited

Panther Shop Investments Limited

Country of
incorporation
and operation

Great Britain

Panther Shop Investments (Midlands) Limited Great Britain

Panther Investment Properties Limited

Panther (Bromley) Limited (*)

Snowbest Limited

Surrey Motors Limited

Westmead Building Company Limited

Multitrust Property Investments Limited

Great Britain

Activity

Property

Etonbrook Properties PLC

Great Britain

Non-trading

Northstar Property Investment Limited

Panther (VAT) Properties Limited

Northstar Land Limited

London Property Company PLC

Eurocity Properties PLC

Eurocity Properties (Central) Limited (**)

CJV Properties Limited (**)

Panther AL Limited

Panther AL (VAT) Limited

Melodybright Limited

Panther Hinckley (VAT) Limited

Abbey Mills Properties Limited

Great Britain

Lord Street Properties (Southport) Limited

Great Britain

* – 100% subsidiary of Surrey Motors Limited
** – 100% subsidiaries of Eurocity Properties PLC

Property

Dormant

Property

Proportion of Proportion
of voting
power held
%

ownership
interest
%

100

99.99

All companies have a 31 December year end and have been included in the consolidated financial statements.

The registered office of all the above companies is Unicorn House, Station Close, Potters Bar, Herts., EN6 1TL.

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

18.

Investments

Cost or valuation

At 1 January 2017

Movement in fair value taken to equity

Disposals

Reclassifying balance of MRG as investment

At 1 January 2018

Additions

Movement in fair value taken to equity

Disposals

At 31 December 2018

Comprising at 31 December 2018:

At cost

At valuation/net realisable value

Carrying amount

At 31 December 2018

At 31 December 2017

Non-current
assets
£’000

908

279

(1,187)

2,271

(197)

(241)

1,850

1,833

1,850

The investments represent investments in listed and unquoted equity securities that offer the Group the
opportunity for return through dividend income and fair value gains. They have no fixed maturity or coupon rate.
The fair values of the listed securities are based on quoted market prices. The securities carried at fair value
are classified as level 1 in the fair value hierarchy specified in IFRS 13. The fair value of investments in unquoted
equity securities, which are not publically traded, cannot be reliably measured and have therefore been shown
at cost. The valuation of the investments is sensitive to stock exchange conditions.

Price risk
For the year ended 31 December 2018 if the average share price of the portfolio was 10% lower, then the loss
recognised in Other Comprehensive Income would have been £183,000 lower (2017: £nil). Corresponding
gains would be seen for a 10% uplift.

19. Stock properties

Stock properties

2018
£’000

448

2017
£’000

448

The cost of stock properties recognised as expense and included in cost of sales amounted to £nil (2017 –
£124,000). Impairments of £nil have been recognised against stock properties (2017 – £nil).

The market value of stock properties is £1,190,000 (2017 – £1,255,000).

£1,090,000 (2017: £1,155,000) of stock properties at market value have been provided as security for the bank
loan from HSBC and Santander referred to in note 25.

The market value shown as at 31 December 2018 was undertaken by the Directors (31 December 2017 was
valued independently by GL Hearn). The stock properties are held at the lower of cost and market value and
as such any uplift is not recognised in the financial statements.

Panther Securities P.L.C.

20. Capital commitments

Capital expenditure that has been contracted for but has

not been provided for in the accounts

The above relates to building works.

21. Trade and other receivables

Trade receivables

Bad debt provision

Other receivables

Prepayments

Accrued income

2018
£’000

100

2018
£’000

4,795

(1,659)

3,136

1,210

474

4,896

2017
£’000

137

2017
£’000

4,126

(1,569)

2,557

161

409

550

3,677

The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
Net trade receivables are financial assets. The total of financial assets included within the financial statements
at amortised cost is £23,736,000 (2017 – £9,209,000) (which relates to £3,686,000 (2017 – £3,268,000)
included in the above (less prepayments) and the Group’s cash or cash equivalents).

Debts are specifically provided once recovery becomes doubtful. The bad debt provision includes all
material doubtful debts that the directors are aware of. Other receivables and accrued income are shown net
of provisions.

Movement in allowance for doubtful debts on trade and other receivables and cash and
cash equivalents:

Trade
receivables
£’000

Accrued
income
£’000

Other
receivables
£’000

Cash
and cash
equivalents
£’000

Total
bad debt
provisions
£’000

Balance at 1 January 2017

Amount written off as uncollectable

Charge/(credit) to income statement

Balance at 1 January 2018

Amounts written off as uncollectable

Charge/(credit) to income statement

Balances at 31 December 2018

1,538

(260)

291

1,569

(707)

797

1,659

571

—

571

—

571

—

250

—

250

—

(4)

—

(1)

2,161

(260)

537

2,438

(707)

796

2,527

The cash and cash equivalents balances provided against related to balances on account with Kaupthing
Singer and Friedlander before they went into administration. The Group at the Statement of Financial Position
date had received 85.75p in the pound from an original balance of £332,000.

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

22. Other financial assets

Cash and cash equivalents
Cash and cash equivalents comprise of cash held by the Group and short-term bank deposits. The carrying
amount of these assets approximates their fair value.

Credit risk
The Group’s financial assets are cash and cash equivalents and trade and other receivables.

The credit risk on liquid funds is mitigated by the use of bank counterparties with high credit-ratings assigned
by international credit-rating agencies. Kaupthing Singer and Friedlander went into administration and all of its
balances are provided against (see note 21). Further information on the Group’s credit risk is detailed within
the Group Strategic Report.

23. Share capital

Allotted, called up and fully paid
17,746,929 (2017 – 17,746,929) ordinary shares of £0.25 each

2018
£’000

4,437

2017
£’000

4,437

The Company has one class of ordinary shares which carry no fixed right to income.

During 2018 no ordinary shares were issued in the period (2017 – no ordinary shares were issued). 63,460
(2017 – 63,460) ordinary shares are held in treasury.

24. Capital reserves

Share premium account

At 31 December

Treasury shares

At 31 December

Capital redemption reserve

At 31 December

25. Bank loans

Bank loans due within one year

(within current liabilities)

2018
£’000

5,491

(213)

604

2018
£’000

1,071

2017
£’000

5,491

(213)

604

2017
£’000

159

Bank loans due within more than one year

58,864

74,270

(within non-current liabilities)

Total bank loans

59,935

74,429

Panther Securities P.L.C.

Analysis of debt maturity

Trade and other payables**

Bank loans repayable

On demand or within one year

In the second year

In the third year to the fifth year

2018
£’000
Interest*

—

1,693

1,664

2,070

5,427

2018
£’000
Capital

6,749

1,071

58,115

67,006

2018
£’000
Total

6,749

2,764

2,735

60,185

72,433

2017
£’000
Total

6,702

2,052

3,039

75,919

87,712

* based on the year end 3 month LIBOR floating rate – 0.90%, and bank rate of 0.58%
** Trade creditors, other creditors and accruals

On 19 April 2016 the Group renewed its £75,000,000 loan facility by entering into a new 5 year term loan with
HSBC and Santander. The Group has the option to draw down an additional £10,000,000 under the same
agreement subject to the banks credit approval process.

A Shawbrook bank loan of £257,000 at the year end is repayable over its life to September 2022.

Bank loans are secured by fixed and floating charges over the assets of the Group.

The estimate of interest payable is based on current interest rates and as such, is subject to change.

The Directors estimate the fair value of the Group’s borrowings, by discounting their future cash flows at the
market rate (in relation to the prevailing market rate for a debt instrument with similar terms). The fair value of
bank loans is not considered to be materially different to the book value. Bank loans are financial liabilities.

26. Deferred taxation

The following are the major deferred tax assets and liabilities recognised by the Group, and the movements
thereon, during the current and prior reporting periods.

Asset at 1 January 2017

Debit to equity for the year

Debit to profit and loss for the year

Liability at 1 January 2018

Debit to equity for the year

Credit to profit and loss for the year

Asset at 31 December 2018

Total
£’000

1,140

(2)

(2,321)

(1,183)

2,960

1,811

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

26. Deferred taxation continued

Deferred taxation arises in relation to:

Deferred tax

Deferred tax liabilities:

Investment properties

Deferred tax assets:

Tax allowances in excess of book value

Fair value of investments

Derivative financial liability

Net deferred tax asset/(liability)

2018
£’000

2017
£’000

(2,840)

(5,963)

281

4,336

1,811

292

—

4,488

(1,183)

As at 31 December 2018 the substantively enacted rate was 17% (2017: 17%) and this has been used for
the deferred tax calculation.

27. Trade and other payables

Trade creditors

Social security and other taxes

Other creditors

Obligations under finance leases (see note 30)

Accruals

Deferred income

2018
£’000

5,126

462

1,138

571

485

2,410

10,192

2017
£’000

4,327

887

969

577

1,406

2,779

10,945

Trade creditors and accruals comprise amounts outstanding for trade purchases.

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

All trade and other payables are due within one year. Trade creditors and accruals are financial liabilities.

Liabilities included within the financial statements at amortised cost total £75,227,000 (2017 – £90,149,000)
(includes payables above and the long term and short term borrowings, excluding deferred income plus finance
lease liabilities).

Panther Securities P.L.C.

28. Derivative financial instruments

The main risks arising from the Group’s financial instruments are those related to interest rate movements.
Whilst there are no formal procedures for managing exposure to interest rate fluctuations, the Board continually
reviews the situation and makes decisions accordingly. Hence, the Company will, as far as possible, enter
into fixed interest rate swap arrangements. The purpose of such transactions is to manage the interest rate
risks arising from the Group’s operations and its sources of finance.

2018
Rate

7.01%

6.58%

Bank loans
Interest is charged as to:

Fixed/Hedged

HSBC Bank plc*

HSBC Bank plc**

Unamortised loan
arrangement fees

Floating element

HSBC Bank plc

Shawbrook Bank Ltd

2018
£’000

35,000

25,000

(322)

—

257

59,935

2017
£’000

35,000

25,000

(489)

14,501

417

74,429

2017
Rate

7.01%

6.58%

Bank loans totalling £60,000,000 (2017 – £60,000,000) are fixed using interest rate swaps removing the
Group’s exposure to fair value interest rate risk. Other borrowings are arranged at floating rates, thus exposing
the Group to cash flow interest rate risk.

Financial instruments for Group and Company
The derivative financial assets and liabilities are designated as held for trading.

Derivative Financial Liability

Interest rate swap

Net fair value gain on
derivative financial assets

Hedged
amount
£’000

35,000

25,000

Average
rate

5.06%

4.63%

2.13%

Duration
of contract
remaining
‘years’

2018
Fair
value
£’000

2017
Fair
value
£’000

19.69

2.92

10.00

(21,482)

(22,831)

(2,517)

(1,515)

(3,569)

—

(25,514)

(26,400)

886

1,850

* Fixed rate came into effect on 1 September 2008. Rate includes 1.95% margin. The contract includes mutual breaks, the

first potential one was on 23 November 2014 (and every 5 years thereafter).

** This arrangement came into effect on 1 December 2011 when HSBC exercised an option to enter the Group into this
interest swap arrangement. The rate shown includes a 1.95% margin. This contract includes a mutual break on the fifth
anniversary and its duration is until 1 December 2021.

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

28. Derivative financial instruments continued

Interest rate derivatives are shown at fair value in the Income Statement, and are classified as level 2 in the fair
value hierarchy specified in IFRS 13.

The vast majority of the derivative financial liabilities are due in over one year and therefore they have been
disclosed as all due in over one year.

The above fair values are based on quotations from the Group’s banks and Directors’ valuation.

Analysis of debt maturity
Annual cash flows in respect of derivative financial instruments are approximately £2,533,000 per annum
based on current LIBOR rates.

Interest rate risk
For the year ended 31 December 2018, if on average the 3 month LIBOR over the year had been 100 basis
points (1%) higher with all other variables held constant, under the financing structure in place at the year end,
profit before tax for the year would have been approximately £91,000 lower (2017: £127,000 lower). This
analysis excludes any affect this rate adjustment might have on expectations of future interest rates movements
which is likely to affect the estimation of the fair value of the derivative financial liabilities (as this movement
would also be shown within the Income Statement affecting post-tax profit or loss), but indicates the likely cash
saving/(cost) a 100 basis points (1%) movement would have had for the Group.

Treasury management
The long-term funding of the Group is maintained by three main methods, all with their own benefits. The
Group has equity finance, has surplus profits and cash flow which can be utilised, and also has loan facilities
with financial institutions. The various available sources provide the Group with more flexibility in matching the
suitable type of financing to the business activity and ensure long-term capital requirements are satisfied.
Please also see the Financial Risk management: Objectives, policies and processes for managing risk, of the
Group Strategic Report.

29. Contingent liabilities

There were no contingent liabilities at the year end (2017: nil).

30. Operating lease arrangements and obligations under finance leases

The Group as lessee
The Group paid rent under non-cancellable operating leases in the year of £940,000 (2017 – £759,000).

The majority of these non-cancellable lease obligations are long leasehold investments in which the Group
receives a profit rent. These investments often have rents payable, often with a contingent element (for example
paying a proportion of collected rents), and a minimum rent obligation that is due to the superior landlord.

The average lease length is 195 years. The minimum rental payment obligations due under these operating
leases and anticipated rental income derived from these investments are shown below. The difference between
the rents payable in the year of £940,000 (2017: £759,000) and the minimum for the year of £611,000 (2017:
£614,000) is related to the contingent element only payable out of rents receivable.

Minimum future payments under non-cancellable operating leases
(Lessee)

Payable within one year

Payable between one year and five years

Payable in more than five years

2018
£’000

611

2,562

44,283

47,456

2017
£’000

614

2,536

45,203

48,353

Panther Securities P.L.C.

Anticipated rental income derived under non-cancellable sub leases
(Lessor)

Payable within one year

Payable between one year and five years

Payable in more than five years

2018
£’000

3,727

10,820

7,446

21,993

2017
£’000

4,026

12,432

9,116

25,574

Obligations under finance leases
Investment property held under an operating lease is initially accounted for as if it were a finance lease,
recognising as an asset and a liability the present value of the minimum lease payments due by the group to
the freeholder. Subsequently and as described in accounting policies, the fair value model of accounting for
investment property is applied to these interests.

Obligations under finance leases due within one year

(included within current liabilities)

Obligations under finance leases due within one to five years

Obligations under finance leases due in more than five years

(included within non-current liabilities)

Total obligations under finance leases

2018
£’000

571

2,284

5,226

7,510

8,080

2017
£’000

577

2,308

5,244

7,552

8,129

The Group as a lessor
The Group rents out its investment properties under operating leases. Revenue represents the Groups rental
income for the year.

Contracted rental income derived under non-cancellable operating leases on investment properties

Payable within one year

Payable between one year and five years

Payable in more than five years

2018
£’000

11,863

35,315

39,045

86,223

2017
£’000

11,985

37,990

49,638

99,613

Panther Securities P.L.C.

Notes to the Consolidated Accounts continued
For the year ended 31 December 2018

31. Reconciliation of liabilities from financing activities

1 January
2017
£’000

Derivative financial instruments

(28,250)

Finance leases (current)

Finance leases (non-current)

Borrowings (current)

Borrowings (non-current)

(514)

(6,769)

(150)

(69,769)

(105,452)

1 January
2018
£’000

Non-cash
movements
Cash flow New Leases movements
£’000

non-cash 31 December
2017
£’000

£’000

Other

—

528

—

158

(4,503)

(3,817)

—

(60)

(743)

—

1,850

(26,400)

(531)

(40)

(167)

(577)

(7,552)

(159)

(74,270)

(803)

1,114

(108,958)

Non-cash
movements
Cash flow New Leases movements
£’000

non-cash 31 December
2018
£’000

£’000

Other

Derivative financial instruments

(26,400)

Finance leases (current)

Finance leases (non-current)

Borrowings (current)

Borrowings (non-current)

(577)

(7,552)

(159)

(74,270)

(108,958)

—

571

—

161

14,125

14,857

—

(529)

—

(523)

886

(571)

571

(1,073)

1,281

1,094

(25,514)

(571)

(7,510)

(1,071)

(58,864)

(93,530)

32. Events after the reporting date

In March 2019, we exchanged to sell our freehold property in Victoria Street, Wolverhampton development site
with a completion date set for the end of July 2019 for £710,000 with a non-refundable deposit collected of
£85,200 received at exchange.

33. Related party transactions

Transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this note.

The compensation of the Group’s key management personnel is shown in note 8 to the financial statements
and Directors’ emoluments are shown in note 8 and the Directors’ Report.

Included within the financial statements is £863,000 (2017: £840,000) of rental income in respect of JE Beale
PLC, a company which for part of the year had some common directors to the Group. Within the Consolidated
Statement of Financial Position £1,261,000 (2017: £573,000) is outstanding and included within trade
receivables. We have made a bad debt provision on this debtor and therefore the net balance showing as
receivable at the year-end is £552,000 (2017: 191,000). In order to accelerate the collection of these rent
arrears a discount was offered for quick repayment but the write off is fully covered within the existing provision.
These balances include a new lease entered into by the Group to JE Beale PLC, in Great Yarmouth and
Lowestoft. These were both leases that JE Beale PLC took assignment from existing tenant, and they are
both three year leases with combined rental income of £207,500pa.

JE Beale PLC ceased to be considered a related party in October 2018 when Portnard Ltd (a major
shareholder in the Company) sold its entire shareholding in this business. JE Beale PLC will still continue to
be the Group’s tenant.

Panther Securities P.L.C.

In July 2017, the Group purchased 63,460 shares which J. T. Doyle, who resigned as a director from the
Group in June 2017, sold through the market. The purchase price paid was £213,000 or £3.35 per share,
which will be slightly more than he would have received due to fees and market maker spread. In 2018 we paid
him a bonus of £20,000 based on his previous involvement in a transaction that completed in the year, but
exchanged when he was a director.

At 31 December 2018 included within creditors was, £24,000 (2017: £29,000) payable to the estate of late
F Perloff, £4,000 (2017: £7,000 due to him) due from H Perloff, both close family members of a director.
Movement in the year related to property management services.

At 31 December 2018 included within creditors was, £49,000 (2017: £56,000) owed to Maland Pension Fund
a company sponsored pension scheme (for a director). This is a trading relationship as the balance owed was
in relation to a jointly managed property were the interests were split and have been for many years.
No contributions have been made by the company for over a decade and there are no plans to make any
further contributions.

In December 2017, MRG Systems Ltd was disposed of by the Group. This disposal was a related party
transaction under AIM Rules, as some of the shares were purchased by Directors in MRG which was part of
the Group.

During the year dividends of £1,127,000 (2017: £304,000) were paid to directors of the Group.

34. Approval of financial statements

The financial statements were approved by the Board of Directors and authorised for issue on 29 April 2019.

Panther Securities P.L.C.

Parent Company Independent Auditor’s Report

Independent Auditor’s Report to the Members of Panther Securities PLC

Opinion
We have audited the financial statements of Panther Securities PLC (the ‘Parent Company’) for the year ended
31 December 2018 which comprise the Parent Company Statement of Financial Position, the Parent Company
Statement of Changes in Equity and the Notes to the Parent Company Accounts, 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 101 “Reduced Disclosure Framework” (United Kingdom
Generally Accepted Accounting Practice).

In our opinion, the Parent Company financial statements:

(cid:1)

give a true and fair view of the state of the Parent Company’s affairs as at 31 December 2018;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice;
and

have been prepared in accordance with the requirements of the Companies Act 2006.

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

Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report
to you where:

(cid:1)

the Directors’ use of the going concern basis of accounting in the preparation of the Parent Company financial
statements is not appropriate; or

the Directors have not disclosed in the Parent Company financial statements any identified material
uncertainties that may cast significant doubt about the Parent Company’s ability to continue to adopt the
going concern basis of accounting for a period of at least twelve months from the date when the Parent
Company financial statements are authorised for issue.

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

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

Panther Securities P.L.C.

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.

Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:

(cid:1)

the information given in the Strategic Report and the Directors’ Report for the financial year for which the
Parent Company financial statements are prepared is consistent with the Parent Company financial statements;
and

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

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 where the Companies Act 2006 requires us to report
to you if, in our opinion:

(cid:1)

adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit
have not been received from branches not visited by us; or

the Parent Company financial statements are not in agreement with the accounting records and returns; or

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

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

Responsibilities of Directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 20, the directors are responsible
for the preparation of the Parent Company financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the Directors determine is necessary to enable the preparation of Parent
Company financial statements that are free from material misstatement, whether due to fraud or error.

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

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

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

Panther Securities P.L.C.

Parent Company Independent Auditor’s Report continued

Other matter
We have reported separately on the Group financial statements of Panther Securities PLC for the year ended
31 December 2018. That report includes the key audit matters and other audit planning and scoping matters that
relate to the Parent Company.

Use of our opinion
This report is made solely to the Parent 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 Parent 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 Parent Company and
the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Jacqueline Oakes
Senior Statutory Auditor, for and on behalf of
Nexia Smith & Williamson
Statutory Auditor
Chartered Accountants

25 Moorgate
London
EC2R 6AY

30 April 2019

Panther Securities P.L.C.

Parent Company Statement of Financial Position
Company number 00293147

As at 31 December 2018

Notes

£’000

2018
£’000

£’000

2017
£’000

Fixed assets

Investments

Current assets

Debtors

Cash at bank and in hand

98,724

18,141

116,865

Creditors: amounts falling due within one year

(15,940)

26,198

24,365

105,707

5,427

111,134

(10,807)

Net current assets

Total assets less current liabilities

Creditors: amounts falling due after

more than one year

Derivative financial liability

Net assets

Capital and reserves

Called up share capital

Share premium account

Treasury shares

Capital redemption reserve

Profit and loss account

Shareholders’ funds

100,925

127,123

(58,678)

(25,514)

42,931

4,437

5,491

(213)

604

32,612

42,931

100,327

124,692

(74,011)

(26,400)

24,281

4,437

5,491

(213)

604

13,962

24,281

As permitted under Section 408 of the Companies Act 2006, no Income Statement or Statement of Comprehensive
Income is presented for the parent company.

The Parent Company made a profit of £22,880,000 (2017: £7,149,000).

The accounts were approved by the Board of Directors and authorised for issue on 29 April 2019. They were signed
on its behalf by:

A.S. Perloff
Chairman

Panther Securities P.L.C.

Parent Company Statement of Changes in Equity
For the year ended 31 December 2018

Balance at 1 January 2017

Profit for the year

Treasury shares purchased

Movement in fair value of

available for sale investments

taken to equity

Realised fair value on disposal of

available for sale investments

previously taken to equity

Deferred tax relating to movement

in fair value of available for sale

investments taken to equity

Realised tax relating to disposal

of available for sale investments

previously taken to equity

Dividends

Share
capital
£’000

4,437

Share
premium
£’000

5,491

—

Balance at 1 January 2018

4,437

5,491

(213)

Profit for the year

Movement in fair value of

investments taken to equity

Deferred tax relating to movement

in fair value of investments

taken to equity

Dividends

—

Treasury

Capital
shares redemption
£’000
£’000

Retained
earnings
£’000

—

(213)

604

—

8,916

7,149

—

Total
£’000

19,448

7,149

(213)

—

279

—

(269)

—

(53)

—

604

—

(2,111)

13,962

24,281

22,880

—

(197)

—

(4,067)

Balance at 31 December 2018

4,437

5,491

(213)

604

32,612

42,931

Panther Securities P.L.C.

Notes to the Parent Company Accounts
For the year ended 31 December 2018

35. Accounting policies for the Parent Company

The Parent Company financial statements have been prepared in accordance with Financial Reporting
Standard 101 Reduced Disclosure Framework.

Basis of preparation of financial statements
The company has taken advantage of the following disclosure exemptions under FRS 101:

(cid:1)

the exemption from providing certain comparative information;

the exemption from preparing a statement of cash flows;

the exemption from declaring compliance with IFRS;

the exemption from disclosing aspects of capital risk management;

the exemption from providing a reconciliation on the number of shares outstanding;

the exemption from disclosing information about IFRS in issue but not yet adopted;

the exemption from disclosing key management personnel compensation; and

the exemption from disclosing transactions between wholly owned group members.

In relation to the following exemptions equivalent disclosures have been given in the consolidated financial
statements:

(cid:1)

the exemption from certain financial instrument disclosures; and

the exemption from certain fair value disclosures.

Critical accounting judgements and key sources of estimation uncertainty
The preparation of
to make judgements, estimates and
assumptions that affect the amounts reported for assets and liabilities as at the Statement of Financial Position
date and the amounts reported for revenues and expenses during the year. However, the nature of estimation
means that actual outcomes could differ from those estimates.

financial statements requires management

Judgements and key sources of estimation uncertainty of the Group, applicable to the consolidated financial
statements have been disclosed in note 3 to the consolidated financial statements. There are no additional
judgements and key sources of estimation uncertainty that are applicable to the Parent Company only.

Significant accounting policies
The accounting policies of the Parent Company are identical to those adopted in the Consolidated Financial
Statements of the Group, where applicable, with the exception of revenue recognition and the addition of
investments in subsidiaries.

Revenue recognition
Turnover comprises dividend income from investments recognised when the Company’s rights to receive
payment have been established.

Investments
Investments in subsidiaries undertakings are stated at cost less any provisions for impairment. Investments in
quoted or listed shares are carried at fair value through other comprehensive income and classified in the
Statement of Financial Position as investments. Fair values of these investments are based on quoted market
prices where available. The fair value of the investments in unquoted equity securities cannot be measured
reliably and they have therefore been measured at cost. Movements in fair value are taken directly to equity.
When these investments are considered impaired in accordance with the requirements of IFRS 9, the
impairment losses are recognised in the Income Statement. On realisation of the investments, the cumulative
gain or loss previously recognised through equity is reclassified from reserves to the Income Statement.

Panther Securities P.L.C.

2017
£’000

777

887

2017
Number

Total
£’000

Notes to the Parent Company Accounts continued
For the year ended 31 December 2018

36. Staff costs

Staff costs, including Directors’ remuneration, were as follows:

Wages and salaries

Social security costs

Pension contributions

2018
£’000

947

107

1,087

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

2018
Number

Directors

Other employees

37. Fixed asset investments

Cost or valuation

At 1 January 2018

Movement in fair value of Investments

taken to equity

Purchase of shares

Disposal

At 31 December 2018

Investments:

Listed

Unlisted

Shares in
Group
undertakings
£’000

Other
investments
£’000

24,348

24,365

—

24,348

—

24,348

(197)

2,271

(241)

1,850

1,833

(197)

2,271

(241)

26,198

1,833

24,365

The above investments are shown at market value where there is an active market for these shares. The
historic cost of listed investments is £2,030,000 (2017: £nil).

For details of the Company’s subsidiaries at 31 December 2018, see note 17.

Panther Securities P.L.C.

38. Debtors

Due less than one year:

Trade debtors

Corporation tax

Amounts owed by Group undertakings

Other debtors

Prepayments and accrued income

Due more than one year:

Deferred tax (note 41)

39. Creditors

Amounts falling due within one year

Trade creditors

Bank loans

Amounts owed to Group undertakings

Social security and other taxes

Other creditors

Accruals and deferred income

2018
£’000

287

2,573

90,809

—

685

4,370

98,724

2018
£’000

1,109

1,000

13,610

2017
£’000

216

862

100,108

4,488

105,707

2017
£’000

117

—

9,706

157

778

40. Creditors

Amounts falling due after more than one year

Bank loans

15,940

10,807

2018
£’000

58,678

2017
£’000

74,011

The bank loan is secured by first fixed charges on the properties held within the Group and floating charge over
all the assets of the Company. The lenders have also taken fixed security over the shares held in the Group
undertakings.

41. Deferred taxation

The following potential deferred taxation asset is recognised:

Fair value of investments

Fair value of financial instruments

2018
£’000

4,336

4,370

2017
£’000

—

4,488

Panther Securities P.L.C.

Notes to the Parent Company Accounts continued
For the year ended 31 December 2018

42. Called up share capital

Authorised

30,000,000 ordinary shares of £0.25 each

Allotted, called up and fully paid

17,746,929 (2017: 17,746,929) ordinary shares of £0.25 each

2018
£’000

7,500

4,437

2017
£’000

7,500

4,437

The Company is limited by shares and has one class of ordinary shares which carry no right to fixed income.

During 2018, no ordinary shares were issued in the period (2017: none). 63,460 (2017 – 63,460) ordinary
shares of £0.25 each are held in treasury representing 0.4% of the Company’s issued share capital.

43. Other commitments

At 31 December 2018 the Company had total commitments under non-cancellable operating leases
as follows:

Expiry date:

Less than one year

44. Related party transactions

Land and buildings

2018
£’000

—

2017
£’000

—

At 31 December 2018 included within creditors was, £24,000 (2017: £29,000) payable to the estate of late F
Perloff, £4,000 (2017: £7,000 due to him) due from H Perloff, both close family members of a director.
Movement in the year related to property management services.

During the year dividends of £1,127,000 (2017: £304,000) were paid to directors of the Group.

Panther Securities P.L.C.

45. Risk management

For information on the Company’s risk management please refer to note 28 of the Group accounts.

46. Events after the reporting period date

There were no material events after the reporting date.

47. Authorisation of financial statements and statement of compliance with FRS101

The financial statements of Panther Securities PLC (the “Company”) for the year ended 31 December 2018
were authorised for issue by the Board of Directors on 29 April 2019 and the Statement of Financial
Position was signed on the board’s behalf by A S Perloff. Panther Securities PLC is incorporated and
domiciled in England and Wales. These financial statements were prepared in accordance with Financial
Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable
accounting standards.

The Company’s financial statements are presented in Sterling and all values are rounded to the nearest (£000’s)
except when otherwise indicated.

The results of Panther Securities PLC are included within the consolidated financial statements of Panther
Securities PLC. The principal accounting policies adopted by the Company are set out in note 35.

Panther Securities P.L.C.

Notice of Annual General Meeting

Notice is hereby given that the 85th Annual General Meeting of Panther Securities P.L.C. will be held at Nexia Smith
and Williamson, 25 Moorgate, London EC2R 6AY on 21 June 2019 at 11.30 a.m. for the following purposes:-

As Ordinary Business
1.

To receive and adopt the Group Strategic Report, Directors’ Report and Financial Statements for the year
ended 31 December 2018 contained in the document entitled “Annual Report and Financial Statements 2018”.

To authorise the payment of a final dividend of 6.0p per ordinary share.

To re-elect B. R. Galan who is retiring by rotation, as a Director.

To re-elect P. M. Kellner who is retiring by rotation, as a Director.

To re-appoint the auditors Nexia Smith & Williamson and to authorise the Directors to determine their remuneration.

As Special Business
To consider, and, if thought fit, pass the following resolutions of which resolutions 6 and 8 will be proposed as
ordinary resolutions and resolution 7 as a special resolution.

That for the purposes of section 551 Companies Act 2006 (and so that expressions used in this resolution shall
bear the same meaning as in the said section 551):

6.1

the Directors be and are generally and unconditionally authorised to allot equity securities (as defined in
section 560 of the Companies Act 2006) up to a maximum aggregate nominal amount of £2,400,000
to such persons and at such times and on such terms as they think proper during the period expiring
at the earlier of 15 months from the date of passing of this resolution and the conclusion of the Annual
General Meeting of the Company to be held in 2020 (unless previously revoked or varied by the Company
in general meeting) except that the Company may before such expiry make any offer or agreement
which could or might require relevant securities to be allotted after such expiry and the Directors may
allot relevant securities pursuant to any such offer or agreement as if such authority had not expired; and

6.2

this resolution revokes and replaces all unexercised authorities previously granted to the directors
pursuant to section 551 of the Companies Act 2006 but without prejudice to any allotment of shares or
grant of rights already made, offered or agreed to made pursuant to such authorities.

That, subject to the passing of resolution 6, set out in the Notice convening this Meeting, the Directors are
empowered in accordance with section 571 of the Companies Act 2006 to allot equity securities (as defined
in section 560 of the Companies Act 2006) for cash, pursuant to the authority conferred on them to allot equity
securities (as defined in section 560 of the Act) by that resolution and/or to sell equity securities held as treasury
shares for cash pursuant to section 727 of the Companies Act 2006, in each case as if section 561 (1) of the
Companies Act 2006 did not apply to any such allotment or sale, provided that the power conferred by this
resolution shall be limited to:

7.1

the allotment of equity securities in connection with an issue or offering in favour of or sale to holders
of equity securities and any other persons entitled to participate in such issue or offering where the
equity securities respectively attributable to the interests of such holders and persons are proportionate
(as nearly as may be) to the respective number of equity securities held by or deemed to be held by
them on the record date of such allotment, subject only to such exclusions or other arrangements as
the Directors may consider necessary or expedient to deal with fractional entitlements or legal or
practical problems under the laws or requirements of any recognised regulatory body or stock exchange
in any territory;

Panther Securities P.L.C.

7.2

7.3

the allotment or sale (otherwise than pursuant to paragraph7.1 above) of equity securities up to an
aggregate nominal value not exceeding £221,000; and

the power granted by this resolution, unless renewed, shall expire at the earlier of 15 months from the
date of passing of this resolution and the conclusion of the Annual General Meeting of the Company to
be held in 2020 but shall extend to the making, before such expiry, of an offer or agreement which would
or might require equity securities to be allotted after such expiry and the Directors may allot equity
securities in pursuance of such offer or agreement as if the authority conferred hereby had not expired.

That the Company is generally and unconditionally authorised for the purpose of section 701 Companies Act
2006 to make market purchases (as defined in section 693 (4) of the said Act) of ordinary shares of 25p each
in the capital of the Company (“ordinary shares”) provided that the Company be and is hereby authorised to
purchase its own shares by way of market purchase upon and subject to the following conditions:-

8.1

The maximum number of shares which may be purchased is 2,500,000 ordinary shares;

8.2

8.3

The maximum price (exclusive of expense) at which any share may be purchased is the price equal to
5 per cent, above the average of the middle market quotations of an ordinary share as derived from the
London Stock Exchange Daily Official List for the five business days preceding the date of such purchase,
and the minimum price at which any share may be purchased shall be the par value of such share; and

The authority to purchase conferred by this Resolution shall expire at the conclusion of the next Annual
General Meeting of the Company provided that any contract for the purchase of any shares as aforesaid
which was concluded before the expiry of the said authority may be executed wholly or partly after the
said authority expires.

The directors believe that the proposals in resolutions 1-8 are in the best interests of shareholders as a
whole and they unanimously recommend that you vote in favour of the resolutions.

By order of the Board
S. J. Peters
Company Secretary

Registered Office
Unicorn House
Station Close, Potters Bar
Hertfordshire EN6 1TL

29 April 2019

See over for notes.

Panther Securities P.L.C.

Notice of Annual General Meeting continued

Notes
1.

Any member of the Company entitled to attend and vote at this meeting is also entitled to appoint a proxy to
attend and vote in his stead. Such a proxy need not also be a member of the Company.

A shareholder may appoint more than one proxy in relation to the Annual General Meeting provided that each
proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder.

A proxy form is enclosed. To appoint a proxy, shareholders must complete:

•

a form of proxy and return it together with the power of attorney or other authority (if any) under which
it is signed or a notarially certified copy of such authority, to Link Asset Services, PXS, 34 Beckenham
Road, Beckenham, BR3 4TU; or

a CREST Proxy Instruction (as set out in paragraph 5 below);

in each case so that it is received not later than 48 hours before the meeting. To appoint more than one proxy,
you will need to complete a separate proxy form in relation to each appointment.

Please read the notes on the proxy form. The return of a completed proxy form, will not prevent a shareholder
attending the Annual General Meeting and voting in person if he/she wishes to do so.

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment
service may do so for the Annual General Meeting and any adjournment(s) of the meeting by using the
procedures described in the CREST Manual (available via www.euroclear.com/CREST). CREST personal
members or other CREST sponsored members, and those CREST members who have appointed a service
provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the
appropriate action on their behalf.

In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate
CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear
UK & Ireland Limited’s specifications, and must contain the information required for such instruction, as
described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a
proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid,
be transmitted so as to be received by the Company’s agent RA10, by the latest time for receipt of proxy
appointments set out in paragraph 2 above. 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
Company’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
After this time, any change of instructions to proxies appointed through CREST should be communicated to
the appointee through other means.

CREST members and, where applicable, their CREST sponsors or voting service providers, should note that
Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular
messages. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a
CREST personal member, or sponsored member, or has appointed any voting service provider(s), to procure
that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that
a message is transmitted by means of the CREST system by any particular time. In this connection, CREST
members and, where applicable, their CREST sponsors or voting service providers are referred, in particular,
to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in
which the names of the joint holders appear in the Company’s register of members in respect of the joint
holding (the first-named being the most senior).

Any person to whom this Notice is sent who is a person nominated under section 146 of the Companies Act
2006 to enjoy information rights (a “Nominated Person”) may, under an agreement between him/her and the

Panther Securities P.L.C.

shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else
appointed) as a proxy for the Annual General Meeting. If a Nominated Person has no such proxy appointment
right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions
to the shareholder as to the exercise of voting rights. The statement of the rights of shareholders in relation to
the appointment of proxies in paragraphs 1, 2 and 3 above does not apply to Nominated Persons. The rights
described in these paragraphs can only be exercised by shareholders of the Company.

A statement of all transactions of each Director and his family interests in the share capital of the Company
will be available for inspection at the Company’s registered office during normal business hours from the date
of this notice up to the close of the Annual General Meeting and will be available for inspection at the place of
the Annual General Meeting for at least 15 minutes prior to and during the meeting.

10. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, the Company gives notice that
only those shareholders included in the register of members of the Company at the close of business on
20 June 2019 or, if the meeting is adjourned, in the register of members at close of business. on the day
which is two days before the day of any adjourned meeting, will be entitled to attend and to vote at the Annual
General Meeting in respect of the number of shares registered in their names at that time. Changes to entries
on the share register at close of business on 20 June 2019, or, if the meeting is adjourned, in the register of
members at close of business. on the day which is two days before the day of any adjourned meeting, will be
disregarded in determining the rights of any person to attend or vote at the Annual General Meeting.

11. As at 9.00 a.m. on 30 April 2019, the Company’s issued share capital comprised 17,683,469 ordinary shares
of 25 pence each. Each ordinary share carries the right to one vote at a general meeting of the Company and,
therefore, the total number of voting rights in the Company as at 9.00 a.m. on 30 April 2019 is 17,683,469.

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: (i) the audit of the Company’s accounts (including the auditor’s report and the conduct of the audit)
that are to be laid before the Annual General Meeting; or (ii) 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
shareholders requesting any such website publication to pay its expenses in complying with sections 527 or
528 of the Companies Act 2006. Where the Company is required to place a statement on a website under
section 527 of the Companies Act 2006, it must forward the statement to the Company’s auditor not later than
the time when it makes the statement available on the website. The business which may be dealt with at the
Annual General Meeting includes any statement that the Company has been required under section 527 of
the Companies Act 2006 to publish on a website.

13. Any member attending the meeting has the right to ask questions. The Company must answer any such
question relating to the business being dealt with at the meeting but no such answer need be given if: (a) to
do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential
information; (b) the answer has already been given on a website in the form of an answer to a question; or
(c) it is undesirable in the interests of the Company or the good order of the meeting that the question be
answered.

14.

If you have sold or otherwise transferred all your ordinary shares in the Company, please forward this annual
report and accounts to the purchaser or transferee or to the stockbroker, bank or other person through whom
the sale or transfer was effected for transmission to the purchaser or transferee.

15. No Director is employed under a contract of service.

16. You may not use any electronic address provided in this Notice, or any related documents including the proxy

form, to communicate with the Company for any purposes other than those expressly stated.

17. A copy of this Notice, and other information required by section 311A of the Companies Act 2006, can be

found at www.pantherplc.com.

Panther Securities P.L.C.

Notice of Annual General Meeting continued

Explanatory Notes to the Notice of Annual General Meeting
The following notes provide an explanation as to why certain resolutions set out in the notice of the Annual General
Meeting of the Company to be held on 21 June 2019 are to be put to shareholders.

All resolutions save for Resolution 8 are ordinary resolutions and will be passed if more than 50% of the votes cast
for or against are in favour. Resolution 8 is a special resolution and requires 75% of the votes cast.

Resolution 1 – Laying of accounts and adoption of reports
The directors are required by the Companies Act 2006 to present to the shareholders of the Company at a general
meeting the reports of the directors and auditors, and the audited accounts of the Company, for the year ended 31
December 2018. The report of the directors and the audited accounts have been approved by the directors, and
the report of the auditors has been approved by the auditors. A copy of each of these documents may be found in
the document entitled “Annual Report and Financial Statements 2018”.

Resolutions 3 and 4 – Re-election of directors
In accordance with the Articles of Association of the Company Bryan Galan and Peter Kellner will stand for re-
election as directors of the Company. Biographical information for the directors and details of why the Board believes
that they should be re-elected is shown in the Corporate Governance Report.

Resolution 5 – Auditors’ re-appointment and remuneration
The Companies Act 2006 requires that auditors be appointed at each general meeting at which accounts are laid,
to hold office until the next such meeting. The resolution seeks shareholder approval for the re-appointment of Nexia
Smith & Williamson and the giving to the directors the authority to determine the remuneration of the auditors for
the audit work to be carried out by them in the next financial year. The amount of the remuneration paid to the
auditors for the next financial year will be disclosed in the next audited accounts of the Company.

Resolution 6 – Authority to the directors to allot shares
The Companies Act 2006 provides that the directors may only allot shares if authorised by shareholders to do so.
Resolution 6 will, if passed, authorise the directors to allot shares and to grant rights to subscribe for, or convert
securities into, shares up to a maximum nominal amount of £2,400,000, which represents an amount which is
approximately equal to 55% of the issued ordinary share capital of the Company as at 29 April 2019 the latest
practicable date prior to the publication of the notice.

Resolution 7 – Dis-application of statutory pre-emption rights
The Companies Act 2006 requires that, if the Company issues new shares for cash or sells any treasury shares, it
must first offer them to existing shareholders in proportion to their current holdings. It is proposed that the directors
be authorised to issue shares for cash and/or sell shares from treasury up to an aggregate nominal amount of
£241,000 (representing approximately 5% of the Company’s issued ordinary share capital as at 29 April 2019, the
latest practicable date prior to the publication of the notice) without offering them to shareholders first in order to raise
a limited amount of capital easily and quickly if needed. The resolution also modifies statutory pre-emption rights to
deal with legal, regulatory or practical problems that may arise on a rights or other pre-emptive offer or issue. If
resolution 7 is passed, this authority will expire at the same time as the authority to allot shares given pursuant to
resolution 6.

Resolution 8 – Purchase of own shares by the Company
If passed, this resolution will grant the Company authority for a period of up to the end of the next annual general
meeting to buy its own shares in the market. The resolution limits the number of shares that may be purchased to
5% of the Company’s issued share capital as at 30 April 2019, the latest practicable date prior to the publication of
the notice. The price per ordinary share that the Company may pay is set at a minimum amount (excluding expenses)
of 25 pence per ordinary share and a maximum amount (excluding expenses) of 5% over the average of the previous
five business days’ middle market prices. The directors will only make purchases under this authority if they believe
that to do so would result in increased earnings per share and would be in the interests of the shareholders generally.

Panther Securities P.L.C.

Ten Year Review

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Panther Securities P.L.C.

Printed by Michael Searle & Son Limited

PANTHER-AR-COVER-FINAL.pdf 1 01/05/2015 10:31:04

CMY

Panther Securities P.L.C.
Unicorn House
Station Close
Potters Bar
Hertfordshire EN6 1TL
www.pantherplc.com

ANNUAL REPORT &

FINANCIAL STATEMENTS

201(cid:25)

Company number (cid:17)(cid:17)293147

PANTHER-AR-COVER-FINAL.indd All Pages

07/05/2014 16:57