31066 5 July 2022 8:09 am proof 22
Mountview Estates P.L.C.
Annual Report and Accounts 2022
MOUNTVIEW ESTATES P.L.C. Annual Report and Accounts 2022
31066 5 July 2022 8:09 am proof 22
Mountview Estates P.L.C. Annual Report and Accounts 2022
About Us
Mountview Estates was established in 1937 as a small family
business based in North London by two brothers, Frank and
Irving Sinclair.
Mountview Estates P.L.C. is a Property Trading Company.
TheCompany owns and acquires tenanted residential
property in England and Wales and sells such property when
itbecomes vacant.
31066 5 July 2022 8:09 am proof 22
01
Mountview Estates P.L.C. Annual Report and Accounts 2022
STRATEGIC REPORT
Contents
Revenue
0.5%
£66.0m
(2021: £65.7m)
Gross Profit
5.3%
£40.9m
(2021: £43.2m)
Profit before Tax
8.4%
£34.9m
(2021: £38.1m)
Profit before Tax
*excluding Investment Properties
Revaluation
6.3%
£34.4m
(2021: £36.7m)
Shareholders’
Equity
0.4%
£393.5m
(2021: £394.9m)
Earnings per
Share
13%
689.5p
(2021: 792.3p)
Net Assets per
Share
0.4%
£100.9
(2021: £101.3)
Dividend per
Share
76.5%
750p
*
(2021: 425p)
* The total dividend payable for the year of 750p per share includes the special dividend of 275p per share paid as part of the interim dividend on
28 March 2022
Mountview Estates P.L.C. advises its shareholders that, following the issue of the final results, the relevant dates in respect of
the proposed final dividend payment of 250 pence per share are as follows:
Ex dividend date 7 July 2022
Record date 8 July 2022
Payment date 15 August 2022
STRATEGIC REPORT
01 Our Performance
02 Chairman’s Statement
04 Chief Executive’s Statement
05 Our purpose and how we operate
06 Where we Operate
06 Review of Operations
14 Section 172 Statement
16 TCFD Disclosures
18 Operational response to Covid-19
GOVERNANCE
20 Directors and Advisers
21 Directors’ Report
28 Statement of Directors’ Responsibilities
29 Corporate Governance
34 Report of the Nomination Committee
36 Report of the Audit and Risk Committee
40 Remuneration Report
FINANCIAL STATEMENTS
54 Consolidated Statement
of Comprehensive Income
55 Consolidated Statement
of Financial Position
56 Consolidated Statement
of Changes in Equity
57 Consolidated Cash Flow Statement
58 Notes to the Consolidated Financial
Statements
75 Independent Auditors’ Report to the
Members of Mountview Estates P.L.C.
80 Company Balance Sheet under UK GAAP
81 Company Statement of Changes in
Equity under UK GAAP
82 Notes to the Financial Statements
under UK GAAP
88 Independent Auditors’ Report to
the Members of Mountview Estates
P.L.C. on the Parent Company
Financial Statements
92 Table of Comparative Figures
OTHER INFORMATION
93 Notice of Meeting
98 Shareholders’ Information
Our Performance
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Mountview Estates P.L.C. Annual Report and Accounts 2022
02
Dear Shareholder,
INTRODUCTION
After two years of Covid-19 the UK’s very successful
vaccination programme finally saw a return to something
more closely resembling life as we knew it as 2020 began.
We have seen this in being able to welcome not just our
teams back into the office, as a new work-life balance settles
in, but also to welcome shareholders back to our Annual
General Meeting (AGM) in 2021 – and we are looking
forward to seeing even more this year.
Against this backdrop Mountview has again delivered a
robust financial performance, as we continue to execute
our long-standing strategy focused on regulated tenancies.
Throughout the pandemic Mountview demonstrated strong
resilience by adapting working practices and respecting
the wishes of our tenants and other stakeholders to
accommodate Covid-19 concerns while still delivering
positive sets of results since March 2020 – all without
needing to consider any of the government support
that was on offer. As I describe below and as we note
elsewhere in this Annual Report, we are confident that we
have emerged stronger and more nimble and anticipate
continuing to deliver this success as we move forward.
OPERATIONAL PERFORMANCE
The role of serendipity in Mountview’s business which we
have for a couple of years explained in our annual report,
has rarely been more evident than in the current year.
Revenues are marginally up year on year – though from
fewer units sold, 135 compared with 158 in the prior financial
year. So, average sales prices are up. However, gross margin
is down as these fewer properties also represented on
average more recent purchases which therefore carried
a higher cost in our books. Covid-19 also continued to
play a role in our operations as some tenants who were
reluctant to allow strangers into their homes previously
were more open following vaccination and so the backlog
of maintenance that arose during Covid-19 has largely
unwound – hence the increase of around £1M in operational
costs. The final piece of the operational picture for the last
year is that, while there was still an increase in the value of
our investment properties, this was also £1M lower than in
2020/21 – primarily because many of these properties were
flats without direct access to outside space – a factor that
became more desirable during Covid-19 and was a driver of
price rises elsewhere.
On the purchase side, the tail end of Covid-19, and in
particular the stamp duty holiday, attracted a different type
of purchaser into the auction rooms who was willing to buy
regulated tenancies at smaller discounts than we believed
was reasonable. While it is likely that these purchases
will realise the benefits that the purchasers were looking
for, at the prices realised they did not fit our risk profile
and we let them pass to avoid damaging future value for
shareholders. The positive from this for shareholders is that,
as purchasing activity slowed, we were sitting on larger cash
reserves and, following discussion, decided to return this
to our shareholders through the special dividend that we
announced alongside our interim results.
GOVERNANCE
Corporate governance continues to evolve in the UK and
this year saw the introduction of Task Force on Climate-
related Financial Disclosures (TCFD) reporting (see page 16)
and also the first year of transition to electronic tagging of
these accounts. For both of these developments we have
chosen to work with experienced consultants who work in
each of these areas on a daily basis to provide the best of
advice and ensure that our own staff remain free to serve
our tenants and our other stakeholders.
This is an evolution that is continuing, and we await further
changes as the Financial Reporting Council is replaced
with the establishment of a new regulator the Audit,
Reporting and Governance Authority (ARGA) and the
Department for Business, Energy & Industrial Strategy
(BEIS) recommendations about restoring trust in audit and
governance begin to be put in place. Through our network
we are able not only to identify evolving requirements and
market sentiment but also with our advisers, to discuss
how and where they are likely to impact on Mountview and
begin to prepare using a mix of both internal resources
and external advisers to assist in formulating the necessary
action plans.
Further, as more fully described in the Remuneration
Committee report, we decided to review the remuneration
policy a year earlier than was required. The result is a
rebalancing of executive remuneration that we believe more
closely fits the risk profile of Mountview and the important
work of both Duncan Sinclair and Marie Bray in guiding your
Company day to day.
Chairman’s Statement
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Mountview Estates P.L.C. Annual Report and Accounts 2022
STRATEGIC REPORT
PEOPLE
As always, the success of the Company in the year is down
to the skills, experience and dedication of our people
who once again have adapted and innovated as Covid-19
restrictions eased and more normal patterns of living re-
emerge. Our ‘new normal’ is stabilising with hybrid working
now a feature and one welcomed by all as it permits a better
– and this year self-directed rather than imposed - work-
life balance. Once more, as last year, we anticipated that
evolving economic conditions would affect our workforce
and, as our Chief Executive, Duncan Sinclair, describes in
more detail in his statement, again shared the results of our
performance with the people who generated it by awarding
larger than normal increases through higher salary or bonus
awards to our staff.
THE COMING YEAR
While the worst ravages of Covid-19 are, we hope,
retreating in our rear view mirror another world event, the
war in Ukraine, has taken its place as a dominating external
factor. As a Company we have contributed to the charities
supporting Ukrainian refugees and will consider making
further such payments in the coming months. We have
already seen widespread inflation and, while interest rates
were always expected to rise post pandemic, this effect
is being reinforced and we do expect further rises later in
the year. Economists’ views on where inflation and interest
rates are going and how long lasting their effects will be
vary across the board though we do anticipate that the era
of rock bottom interest rates is behind us. The effect of this
will be real and notional rises in the interest costs we are
exposed to – and potentially at levels that would eat into
the ongoing rental return – and thus into the overall lifetime
return on a property-by-property basis. In this context
we believe that our decision noted above to stick to our
principles of risk management and not chase purchases
at any price is proving a sound one that will protect
shareholder value going forward.
It remains to be seen how these changes translate into
appetite and prices realised in the auction rooms on sale
and purchase – but I can report that so far the prices being
realised are holding up in the first months of the year, and
also that we have been able to secure good purchases
both at auction and through portfolios that come on the
market from time to time. In this way, we are hopeful that
we will be able to continue to realise good profits on vacant
possession and also acquire new stock to sustain your
business going forward.
A.W. Powell
Non-Executive Chairman
5 July 2022
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Mountview Estates P.L.C. Annual Report and Accounts 2022
04
Dear Shareholder,
After two years of Covid-19 constrained activity it is to
be hoped that our lives may now resume more normal
levels of activity. Most of those operating in the property
industry found ways of circumventing the various difficulties
presented by the last two years and may even have found
methodology that serves them better.
Our turnover for last year shows a modest increase but
increases in the cost of the properties sold and the cost
of maintenance where we had previously been unable to
enter properties because of Covid-19 have been the main
contributors to a thirteen per cent fall in Earnings per Share.
Nevertheless none of this does anything to undermine
the financial stability of the Company and your Board
remain confident enough to recommend an increased final
dividend of 250 pence per share.
If shareholders approve the final dividend at the Annual
General Meeting on 10 August 2022 (2022 AGM) it will be
payable on 15 August 2022 to shareholders on the register
at 8 July 2022.
Mountview may be considered to have been merely in the
right place at the right time these last two years but we
are a small workforce who have worked hard, adapting as
necessary, to stay in that right place. I thank my staff and
colleagues for their hard work and loyalty and believe that
the future prosperity of the Company should reward them
and allow them to be protected from the ravages that the
economy may inflict upon us.
As we now embrace some of the post-Brexit benefits
and the removal of Covid-19 constraints we now face the
great economic ogre of inflation. Government and Bank of
England policy has kept inflation at what has been regarded
as the healthy level of about 2% for more than thirty years.
We are now confronted by the prospect of double-digit
inflation which will not be gone in the blink of an eye and
may be with us for years rather than months.
House price inflation may be considered to have been our
friend and may continue to be so and with our long term
financial prudence I consider the Company to be in a very
sound financial position. We did not furlough any staff, we
did not make any staff redundant and we did not receive
any government funding to help us to survive the pandemic.
As we now enter a period of what are expected to be
difficult economic circumstances we may find opportunities
of which we can take advantage, but my main concern is
that we should look after all of our stakeholders. Our most
important stakeholders are our shareholders and all of our
executive staff.
At the A.G.M. on 10 August 2022 we recommend a final
dividend of 250 pence per share subject to shareholder
approval. This is an increase of 25 pence per share which
represents an uplift of more than 11% on the final dividend
of 225 pence per share paid last year. Whilst I am very
happy to look after my shareholders in this manner I am very
mindful to look after the Mountview staff who make all this
possible. My greatest concern is for the most modestly paid
but it is vital that the more highly paid are rewarded for their
endeavours because it is their decisions which make the
future prosperity of Mountview possible. In this light I trust
that shareholders will support those resolutions that allow
the potential to support the decision makers.
Interest rates are expected to rise throughout the year and
our low gearing will enable us to survive those rises better
than most. Indeed the increase in the cost of money may
reduce the competition for potential purchases.
We understand that some purchasers may be prepared
to pay a higher percentage of vacant possession value for
some properties but we will not be prepared to compromise
our principles. Margins may narrow but we will never pay
prices that undermine the financial stability of the Company.
The future of the Company is secure but it may require a
little more patience than has been necessary in recent years.
D.M. Sinclair
Chief Executive Officer
5 July 2022
Chief Executive’s Statement
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Mountview Estates P.L.C. Annual Report and Accounts 2022
STRATEGIC REPORT
Mountview’s core purpose is to acquire and maintain
regulated tenancy residential property providing below
market rent accommodation for our tenants until we get
vacant possession when we sell such properties. In meeting
this purpose, the Group has a long established strategy,
business model and set of operating procedures. All these
have been developed and refined by marrying the values
of the founders and the knowledge and experience of
our executives and staff with the evolving environment
that we operate in. The strategy and business model are
reviewed annually and discussed with major shareholders,
the majority of whom have confirmed their support for the
Company to continue to operate unchanged.
Our key strengths that underpin our culture and support our
continuing success are:
• Our team’s experience and knowledge of their sector
and the communities we operate in
• A long-term view, underpinned by family values
• A conservative approach to financing, and management
of our cost base
• Investing responsibly to maintain our existing assets and
acquire new assets
• Operating responsibly in the communities we serve
This purpose and our values have served us well during
the phases of the Covid-19 pandemic, its lockdowns and
periods of relaxation of restrictions and finally the impact of
the vaccination programme that led to lifting of restrictions.
Throughout the pandemic, as we describe more fully in
our notes on Covid-19 (page 18), the needs of different
stakeholder groups were often conflicting forcing a re-think
of how we work. Our responses drew on:
• the long experience of our staff in both the Group and
the markets aligned with
• creativity, as we adapted our work to the changed
circumstance, followed by
• learning and continuous improvement as we
implemented changed processes and
• communications with affected stakeholder groups so
that they understood what was being done and why.
We are grateful to all our teams for the way that they
continued our successful work while adapting to
accommodate the safety concerns of our stakeholders and
our tenants in particular.
CORPORATE RESPONSIBILITY:
The Group recognises that it has a role that extends beyond
the direct legal and financial obligations that follow from
carrying out its day to day operations for example into wider
Environmental, Societal and Governance (ESG) areas that
are of concern to the UK as a whole and where collective
action is needed to address current and emerging issues.
We note below and elsewhere in this report examples of
how we view these responsibilities and the steps we have
taken to build them into our day to day activities.
GOVERNANCE:
The Board has responsibility for overseeing the adoption of
ESG considerations into our decision making and our day
to day operations. For example, when making investment
decisions environmental considerations and community
impact form a part of the due diligence process. Similar
considerations apply to routine operational questions that
are delegated to our teams – including, when needed,
an escalation process to have proposed courses of action
considered by the executives or the Board. ESG matters
identified or escalated, are reported by exception to the
Board and considered during our discussion of risks facing
the business.
STAKEHOLDERS AND SOCIAL AND COMMUNITY
ISSUES:
Our section 172 Statement is set out on page 14, it
describes how and where we engage with our wider
stakeholder group and our impact on local communities
– for example through seeking local contractors where
possible to aid proximity between suppliers and tenants and
retain the economic benefits within the local community.
Our approach to employee engagement, training and
diversity matters is set out in the Directors’ Report on
page 25.
Given the size of the Group and the nature of its business
as a property trading company, the Group has developed
informal approaches to social, human rights or community
issues, that are based on our values and which are reflected
in our staff manual and also our supplier code of conduct,
but without being converted into formal umbrella policies.
THE ENVIRONMENT:
Similarly, for the environment, as explained more fully in
our notes on TCFD (Page 16) and also on page 23, we are
mindful of our impact on the climate and our contribution
to the national initiatives for tackling climate change.
Accordingly we adopt practices aimed at reducing our
environmental impact and thus contributing to addressing
climate change. We use sustainable energy suppliers
where possible and promote the use of eco products and
recycling in our operations. However, as our total carbon
footprint is minute in a UK context (see our Carbon report
on pages 23 and 24) we have not converted these principles
into a formal policy. We keep this under review, including
during discussion of risk at Board meetings, and should we
conclude that, from either internal or external sources, formal
policies are warranted we would develop and adopt them.
Our purpose and how we operate
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Mountview Estates P.L.C. Annual Report and Accounts 2022
06
Review of Operations
The figures on the map are calculated as a
percentage of the total value of Inventories of
Trading properties.
KEY
35.0%
London
(North)
22.1%
London
(South)
20.3%
South East
Bedfordshire
Berkshire
Buckinghamshire
Cambridgeshire
Essex
Hertfordshire
Middlesex
Norfolk
Northamptonshire
Oxfordshire
Suffolk
13.6%
South
Dorset
Hampshire
Isle of Wight
Kent
Surrey
Sussex
2.2%
North
Midlands
Derbyshire
Leicestershire
Nottinghamshire
6.8%
Remainder of
England and Wales
The Group’s strategy and business model is
simple. We are a property trading company
that buys tenanted properties at a discount to
estimated vacant possession value and then
sells them when they become vacant.
Revenue
£66.0m
(2021: £65.7m)
Gross Profit
£40.9m
(2021: £43.2m)
OUR PORTFOLIO
Categories of property held as trading stock
The Group trades in the following categories:
• Regulated tenancy residential units
• Assured tenancy residential units
• Life tenancy residential units
• Freehold and leasehold ground rent units
A unit is a property, however large or small, whether
freehold or leasehold, which is held subject to one tenancy.
Analysis of the Group Trading portfolio
by type as at 31 March 2022
No.
of units
Cost
£m
Regulated, Assured Shorthold
tenancies, & Other
1,824 312.6
Assured tenancies 256 41.9
Life tenancies 212 31.8
Freehold & leasehold ground rents
1,177 6.9
2.2%
20.3%
22.1%
13.6%
35.0%
6.8%
Where we Operate
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Mountview Estates P.L.C. Annual Report and Accounts 2022
STRATEGIC REPORT
Analysis of the Group Trading portfolio at the lower of cost and estimated net realisable value by geographical location
as at 31 March 2022
Regulated, Assured
Shorthold tenancies,
Assured tenancies
& other
£m
Life
tenancies
£m
Ground
rents
£m
Portfolio
%
London (North) 131.24 0.55 5.76 34.99
London (South) 71.12 15.08 0.85 22.14
Bedfordshire, Berkshire, Buckinghamshire, Cambridgeshire, Essex,
Hertfordshire, Middlesex, Norfolk, Northamptonshire, Oxfordshire, Suffolk 74.39 5.14 0.23 20.28
Dorset, Hampshire, Isle of Wight, Kent, Surrey, Sussex 48.11 5.32 0.07 13.60
Midlands, Derbyshire, Leicestershire, Nottinghamshire 8.22 0.52 – 2.22
Remainder of England and Wales 21.42 5.21 – 6.77
VACANT PROPERTIES
The number of properties which were vacant and their status at the end of the financial year are set out below.
31.03.22 31.03.21
Exchanged and due for completion 22 13
Under offer 8 17
Marketed by private treaty 14 12
Marketed for rent 1 2
Scheduled for Auction 9 6
Not self contained/requiring remedial works 12 10
Legal and insurance issues 10 11
Properties to be inspected – 2
76 73
SALES
At Mountview, we have a relatively straightforward yet proven way of working: we buy tenanted residential properties and
sell them when they become vacant. We buy both regulated tenancy and life tenancy properties. The former, which are
characterised by rental returns below market value, are becoming increasingly short in supply. Since the Housing Act 1988
no new regulated tenancies have been created.
Life tenancy stock has nominal rental income, is bought at a greater discount to vacant possession value and has a
higher margin on sale. A key attraction of this sector to Mountview is the fact that property maintenance is usually the
responsibility of the life tenant and this leads to lower ongoing costs to the Group. We carry out regular checks to ensure
that all properties are maintained in good condition.
During the financial year we achieved sales of £46.8 million (2021: £46.7 million), demonstrating the liquidity of the Portfolio.
The average sales price achieved was £346,807 (2021: £291,706).
The Group’s sales for financial years 2022 and 2021 are set out below
Sales
2022
£m
2021
£m
Gross sales of properties 46.82 46.67
Cost of properties sold 19.28 17.81
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08
Sales price range – 2022 No of units Sales price £m Location
1 million + 1 1.3 London & South East
500,000 – 1 million 18 12.0 London & South East
below 500,000 116 33.5 London & others
Sales price range – 2021 No of units Sales price £m Location
1 million + 1 1.5 London & South East
500,000 – 1 million 15 11.1 London & South East
below 500,000 144 34.1 London & others
Further information is provided in Note 4 to the Consolidated Financial Statements on page 64.
PURCHASES
The majority of our residential properties that are subject to a regulated tenancy are concentrated in London and the South
East. Returns from the regulated portfolios are derived from a combination of below market rental income and trading
profits on the sale of property, when the property becomes vacant and the reversionary gain is crystallised.
Most properties acquired are unimproved and therefore of low average value. One of the core Mountview capabilities is
to actively manage these properties: we identify opportunities to add value by carrying out refurbishments prior to their
sale. The greatest gains are available at the upper end of the market and this is where we concentrate our refurbishment
activities. These properties are predominantly sold by private treaty.
The Group’s trading properties are carried in the balance sheet at the lower of cost and net realisable value. Net realisable
value is the estimated net proceeds of sale if the property, in its current condition, were to be vacant at the date of the
balance sheet.
ANALYSIS OF ACQUISITIONS
The Group’s acquisitions for financial years 2022 and 2021 are set out below. The analysis does not include legal and
commission expenses directly related to the acquisition of properties or any repairs of a capital nature.
Year ended 31 March 2022 No. of units Cost £m
Regulated, ASTs, and other 38 10.44
Assured tenancies 7 1.82
Life tenancies 1 0.21
Leasehold ground rents 7 0.08
Ground rents created 11 –
Total 64 12.55
Not included in the above table:
Assured tenancies created 11
THE TABLE ABOVE INCLUDES THE FOLLOWING:
Portfolios No. of units Cost £m
Wigsell Portfolio 12 1.60
The portfolio comprises of 3 regulated assured tenancies and 6 freehold ground rent tenancies.
Winchester Portfolio 5 1.48
The portfolio comprises of 3 regulated tenancies and 2 assured shorthold tenancies.
Review of Operations (Continued)
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Mountview Estates P.L.C. Annual Report and Accounts 2022
STRATEGIC REPORT
Year ended 31 March 2021 No. of units Cost £m
Regulated, ASTs, and other 68 21.16
Assured tenancies 4 0.24
Life tenancies 4 0.27
Leasehold ground rents 6 0.01
Ground rents created 16 –
Total 98 21.68
Not included in the above table:
Assured tenancies created 16
THE TABLE ABOVE INCLUDES THE FOLLOWING:
Portfolios No. of units Cost £m
Summer Portfolio 53 16.05
The portfolio comprised 53 regulated tenancies.
RENTAL INCOME
The Company’s rental income is derived from five different
sources:
• Regulated tenancies
• Assured tenancies
• Assured shorthold tenancies
• Life tenancies
• Ground rents
Where possible we still target those properties where
the rent is capped and where our team has identified
opportunities to make key improvements. For example,
after discussing proposals with the tenant, installing services
and amenities that have been lacking in the past can both
improve conditions for our tenants and lead to an increase
in rental income.
The operating contribution from the core business
(comprising profits on sale of trading properties and rental
income) is analysed in Note 4 on page 64.
SUMMARY PROSPECTS FOR THE GROUP
This time last year we were still wrestling with the effects of
Covid-19 – which hopefully has receded. New challenges,
however, face us such as fallout from the war in Ukraine and
the wider inflationary pressures and increases in interest
rates bite. Just how they will affect the general housing
market in the longer term is not clear. However as we have
seen in harder times in the past, the houses that Mountview
brings to auction are typically in high demand as they offer
a lower priced entry to the housing market or, if sold to
developers, leaves them with the opportunity for ‘developer
profit’. We are hopeful therefore that Mountview will be well
placed to weather any down turn in the housing market,
should it occur through both continuing sales of attractive
properties and also with the opportunity to purchase
potentially discounted replacement properties both through
auction and private tender.
During 2021-22, the professional knowledge and skills of our
compact team ensured that, as well as overseeing a healthy
sales stream, we were able to purchase properties for a total
of £12.55 million.
Our strength is based on a tight focus on our core business
of regulated tenancies together with a prudent operational
approach. We have kept gearing low.
Since the end of the financial year on 31 March 2022 we
have continued to sell and purchase properties through
auctions and we are pleased with the results achieved.
Given our financial strength, we believe that we are in a
strong position to take advantage of any prime purchasing
opportunities which may arise in the future.
INVESTMENT COMPANIES
The analysis of the investment portfolio as at 31 March 2022
is as follows:
2022 2021
Louise Goodwin Limited 26 units 27 units
A.L.G. Properties Limited 4 units 4 units
All of the properties are situated in Belsize Park, London
NW3, one of the capital’s most prestigious locations.
Louise Goodwin Limited and A.L.G. Properties Limited were
purchased in 1999 when we took the opportunity to build a
presence in one of the best locations in London. Although
rental returns have proven to be less significant than we
anticipated, the investment portfolio has nevertheless
generated consistently strong cash flow.
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10
We will continue to maintain our strategy for the investment portfolio, deriving rental income in the short to medium term
and capital through sales during favourable market conditions. As described in note 13 to the Accounts, during the year
one investment property was sold for £620,000 (2021: nil). We are prepared to refurbish the properties and sell them by
private treaty to purchasers who actively seek homes in this area.
The valuation of the investment portfolio increased during the year by £444,000 (2021: increased £1,452,000). The properties
within the investment portfolio have been revalued externally for the purpose of these accounts. The value attributed to
each individual property reflects the change in its condition where appropriate and any adjustment resulting from changes
in market circumstances.
Details of the valuation of the investment portfolio are disclosed in Note 13 to the Consolidated Financial Statement on
page 68.
REVIEW OF BUSINESS AND PRINCIPAL RISKS
Details of the Group’s performance during the year and expected future developments are contained in the Chief
Executive’s and Chairman’s Statements as well as this Strategic Report. The Group has the following Financial Key
Performance Indicators:
FINANCIAL KEY PERFORMANCE INDICATORS
REVENUE (£m)
0.5%
PROFIT BEFORE TAX (£m)
8.4%
INTEREST COVER IN RELATION
TO PROFIT BEFORE INTEREST
AND TAXATION
2022 2021
66.0
65.7
20212022
34.9
38.1
20212022
56.0
118.0
57.5
EARNINGS PER SHARE (Pence)
13.0%
NET ASSETS PER SHARE (£)
0.4%
GEARING RATIO (%)
20212022
689.5
792.3
20212022
100.9
101.3
20212022
5.1
4.5
DIVIDEND PER SHARE
for year (Pence)*
76.5%**
20212022
750
425
* Subject to the approval by shareholders of final dividend of 250 pence at the 2022 Annual General Meeting
** The total dividend payable for the year of 750p per share includes the special dividend of 275p per share
paid as part of the interim dividend on 28 March 2022
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STRATEGIC REPORT
NON FINANCIAL METRICS:
The Group’s drivers of their main source of revenues and
profit arising in the current year – sales on vacant possession
– are beyond the control of the Group as they are in turn
driven by factors that are outside the Group’s control: the
timing of vacant possession, the location and thus market
price of properties disposed of, the original purchase date
and price of the properties sold and the current market
appetite for the properties that are sold.
Consequently, in view of this and the stable and long
standing nature of the Group’s business model and
operating procedures, and the very close involvement of
the Executive Directors in the day to day operations of the
business, the Group has not developed and does not use
non-financial indicators as the Directors believe that they
would not add to the Group’s ability to manage the business
day to day.
The Board do receive regular updates from the Executive
Directors and also from the heads of department who report
on salient matters arising in their areas of responsibility and
on their programme of upcoming routine and project work.
These reports do not contain standard recurring statistics
focusing instead on immediate matters for consideration
that vary meeting to meeting.
RISK REVIEW – PRINCIPAL RISKS
ANDUNCERTAINTIES
In our recent annual reports we have considered the impact
of Covid on our principal risks. So, in our 2020 Annual
Report we specifically considered risk by risk the possible
impact that Covid-19 could have on the business. Last year
in our 2021 Annual Report we noted that for the most part
these did not materialize and so we removed these risk by
risk comments. Although we noted the exception was in
relation to risk 7 – Operations and Property Maintenance
where some tenants were reluctant to allow contractors
or inspectors into their homes due to their personal
circumstances. We respected these wishes so only essential
work was carried out by contractors who abided by our
Covid-19 secure regime. It increased the risk of maintenance
backlog but this year we have seen a further decrease in
this risk following the vaccination programme tenants were
more ready to accept contractors into their houses and as
a result we have caught up on the backlog that built up
in the last two years meaning that this risk is now free of a
Covid-19influence.
As a result for this year we have removed the specific
references to Covid-19 from the commentary on the
underlying risks. A fuller note of our approach to our
work during the pandemic, including risk management, is
contained in the separate note on our operational response
to Covid-19 on page 18. This position will be kept under
constant review.
We have carried out a robust assessment of the principal
risks facing the Company, including those that would
threaten its business model, future performance or solvency.
The following list of risks does not comprise all of the
risks the Company or Group may face, and they are not
presented in order of importance.
1. TRADING STOCK – REGULATED
TENANCIES
RISK
Reduced opportunity to replace asset sales of vacant
properties due to the reducing number of regulated
tenancies available for purchase.
MITIGATION
The Group has developed clear criteria that are applied
when considering asset purchases. Using these, the Group
has performed creditably in a difficult market replacing
this class of assets in the year ended 31 March 2022, with
good purchasing again during the year. The ‘Analysis of
Acquisitions’ is on page 8.
2. MARKET
RISK
Weak macro-economic conditions triggered by external
events including for example Brexit, Covid-19, the war
inUkraine and the cost of living crisis.
MITIGATION
The Group’s exposure is weighted towards the stronger
London and South East markets and this geographical area
has over the long term consistently been an above-average
performer.
3. FINANCIAL
RISK
Reduced availability of financing options resulting in inability
to meet business plans.
MITIGATION
The Group monitors its bank accounts and loans closely to
maintain sufficient capacity. We review our loan facilities
regularly. The Group is conservatively geared and operates
well within financial covenants. Financial Key Performance
indicators are on page 10. Details of the Group’s current
facilities are set out in Note 18 on page 71.
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4. DIVIDENDS
RISK
The Group seeks to provide shareholders with good returns
on their investment. This aim could be put at risk if the
Group was unable to sustain the level of dividends for
anyreason.
MITIGATION
We carefully monitor our strategy and our results in order to
identify any risk to dividend levels.
The Group maintains a strong balance sheet. With
appropriate banking facilities, we are able to maintain
our trading stock by taking advantage of purchasing
opportunities when they occur.
5. PEOPLE
RISK
Capacity to maintain strategy is compromised due
to inability to attract and retain suitably experienced
employees.
MITIGATION
Mountview employs a relatively small workforce which
accommodates personal interaction at all levels.
The Company has a stringent recruitment process to ensure
we employ appropriately skilled staff. We carry out regular
appraisals and offer employees opportunities for training
and development courses. The Company has a good record
of long-term service, a great number of our employees have
worked for the group for over 10 years. Details of employees
and diversity are set out in Notes 9 and 10 of the Directors’
Report on page 25.
6. REGULATORY
RISK
Risk of not meeting new or changed regulatory
requirements and obligations that affect the Group’s
business activities and could lead to fines or penalties.
MITIGATION
The Group engages in close working relationships with
appropriate authorities and advisers to ensure it meets its
obligations.
7. OPERATIONS AND PROPERTY
MAINTENANCE
RISK
Legal action against the Group for failure to meet its
obligations under property management and safety legislation.
MITIGATION
In addition to its own regular inspections, the Group
engages professional external companies to undertake
health and safety, gas and electrical checks, fire risk
assessments, etc to ensure we meet our commitments as
employers and landlords. Our staff receive regular training
to ensure their skills are kept up to date.
Our Compliance Officer monitors our performance against
existing regulations and tracks and prepares for new
requirements as they are published.
8. CLIMATE
RISK
The impact on the Group of climate related matters.
For example, physical risks following changing weather
patterns, including extreme weather events, that could lead
to increased wear and tear or other property damage and
transition risks, for example following regulatory changes.
MITIGATION
The regular inspections noted above provide the Group
with opportunities to identify properties that may be at risk
which would be considered for more frequent inspections.
Due diligence for purchases aims to identify properties with
higher than normal inherent risks for flooding or other water
risks. We explain more fully on page 16 in our notes on
TCFD how we approach and handle climate related risks.
EMERGING RISK
As well as monitoring the incidence of currently identified
risks we also look for emerging trends in operations that could
become active risks. In addition, we carry out horizon scanning
through our network of stakeholders, notably our advisers, and
also by reviewing published emerging riskreports.
Where emergent risks arise and are concluded to be
relevant to Mountview’s business then when considering
which risks, including climate risks, to include in our
framework we use the TRAP (Terminate; Reduce; Accept;
Pass on) model to guide our approach.
THE OVERALL RISK ENVIRONMENT
Given Mountview’s business model and financial
strength, while any risks materialising could well have a
negative impact on short term performance, and lead to
inconvenience, none are significant enough to threaten
the continued existence of the Group. We are confident
that we can meet our strategic and operational goals and
in particular are in a strong position to take advantage of
purchasing opportunities as they arise. Risks are considered
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Mountview Estates P.L.C. Annual Report and Accounts 2022
STRATEGIC REPORT
to be broadly unchanged from 2021 with moderate
assessments for both probability of occurrence and impact.
These principal risks were part of the Group’s assessment of
long term viability, details of which are set out in the viability
statement on page 13.
VIABILITY STATEMENT
In accordance with the 2018 UK Corporate Governance
Code (the Code) the Board has assessed the prospects
of the Group over a longer period than the 12 months
required by the ‘Going Concern’ provision. The Directors
have assessed the viability of the Group over the three year
period to 31 March 2025 and conducted this review taking
account of the Group’s current financial position, longer
term strategy, principal risks and future prospects and plans.
A three year period is considered appropriate for the
assessment as it corresponds with the Group’s internal
planning period and, in addition the term of the debt
facilities supports an assessment over this period.
The strategy of the business is set at Group level and is
reviewed throughout the year at Board meetings in the light
of market conditions and investment opportunities. This
strategy is based on a tight focus on our core business of
regulated tenancies, together with a prudent approach to
key financial ratios and funding requirements. The Board
has developed a matrix of risks which it considers at each
meeting. The principal operational risks faced by the Group
and their mitigation are described on pages 11 and 12.
The Group’s Financial Risk Management Objectives and
Policies are shown in Note 3 on pages 63 and 64 Notes to
the Consolidated Financial Statements. The consolidated
risk register is maintained by the Audit and Risk Committee
as described in the Report of the Audit and Risk Committee
on page 37.
In assessing viability, the Directors considered the principal
risks (see pages 11 and 12) in severe but plausible scenarios
up to and including double digit impacts on revenue
streams, costs and interest, their potential impact and
how to manage them. In the current year, and as further
discussed in our TCFD disclosures (page 16), this analysis
also included scenarios reflecting different impacts related
to climate change including a heightened regulatory regime
and a greater incidence of flooding or other extreme
climate events.
On the basis of this and other matters considered and
reviewed by the Board during the year, the Board confirms
that it has reasonable expectations that the Group will be
able to continue in operation and meet its liabilities as they
fall due over the three year period used for the assessments.
The Directors consider the following factors to be key to this
assessment:
• The Group’s properties are attractive to a broad
constituency of buyers and can be marketed through
different channels if needed
• The Group’s rental income is sufficient to cover expenses
in the event of market illiquidity
• The Group has strong reserves and low indebtedness,
which would enable it to take profitable advantage of
adverse market conditions
• The Group maintains contingency and succession
planning covering the unexpected absence of key
members of staff.
Given Mountview’s strong financial position each of the
Directors considers that the Group is well positioned to
take advantage of both favourable and adverse market
conditions. The Group also has adequate banking facilities
in place over a spread of maturities which could be
renegotiated, augmented or replaced if necessary within the
required timescales.
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14
SECTION 172 STATEMENT
RELATIONS WITH SHAREHOLDERS AND
OTHER STAKEHOLDERS
The Board recognises that effective engagement with our
stakeholders is a key part of our operations and meeting our
strategy. Following the increased profile given to stakeholder
engagement associated with the 2018 Code, and in support
of the matters set out in Section 172(1) of the Companies Act
2006 we have reviewed our stakeholder groups and for each
key stakeholder codified how we engage with them. This
work has created a clear framework for the Board to work with
when taking material decisions as it provides a checklist to
ensure we identify and consider those who could be affected.
The list below shows the key stakeholders identified and
outlines the nature of our engagement with each of them.
Intuitively the Board has for many years taken account of
the various stakeholder groups when considering major
decisions. The framework provides us with a tool to help
ensure that in major decisions we do consider the relevant
stakeholder groups, and has been used during the year,
forexample:
• Acquisition of properties when offered portfolios and
considering which properties we make an offer on;
• Maintenance in deciding on the scope of works and the
contractors to engage;
• Other financial decisions for example those related to
remuneration of all staff, dividends and banking facilities
needed; and
• Updating the Group’s stance on Covid-19 following the
vaccination programme, including the impact on staff,
tenants and other stakeholder groups as described on
pages 18 and 19.
The majority of decisions which involve stakeholders are
operational in nature and are delegated down to the teams
dealing with the individual stakeholder groups to ensure
timely responses to questions or issues raised. As described
elsewhere the Board gets regular updates from the heads
of department both through the Executive Directors and in
writing. In rare cases, for example if the needs of different
stakeholder groups, including environmental considerations,
are not aligned and time is not a critical factor, these
decisions may be referred to the Executive Directors or the
Board for consideration or endorsement of proposed action.
The Board keeps our stakeholder framework under
regular review and updates as we identify new groups or
changes to the nature, scope or extent of engagement
with existinggroups. There was no change in our key
stakeholders during the year.
STAKEHOLDER GROUPS AND NATURE
OF OUR ENGAGEMENT:
Engagement with all stakeholder groups has evolved
during the pandemic and with the vaccination programme
heralding a ‘new normal’ despite continuing high rates of
infection we are adopting the best practices that have also
evolved combining traditional means such as face to face
contact with technological means for remote contact to
sustain the relationships in the manner most comfortable
for our stakeholders. This evolution has also included
new or adapted processes which have become effective
operationally and, we believe, have a role to play absent
the prior Covid-19 risks. Throughout, communications
has been the watchword and have assisted in ensuring
that stakeholder needs are properly understood and
taken into account when making decisions. As noted in
our commentary on Our purpose and how we operate on
page5 and also the section on our operational response to
Covid-19 there were occasions where the needs of different
groups conflicted and a decision was needed that would
not fully satisfy all parties. In taking these decisions the
overall safety of the groups affected has been the primary
consideration in reaching our eventual course of action.
1. SHAREHOLDERS
• In addition to reporting formal financial results twice
a year, the AGM presentation and discussion and
regulatory announcements throughout the year, the
Chairman and other members of the Board hold ad hoc
meetings or calls on request with shareholders. This
includes annual discussions with the major shareholders
to gather their views on the Company strategy and
business model. Shareholders of all sizes contact us
throughout the year by letter, phone or e-mail. We
respond to questions on an individual basis or by
regulatory announcements depending on the nature of
questions asked. A summary of the matters covered in
all contact with shareholders – which in 2021-22 reverted
to a more conventional mix of face to face and electronic
means – is given to the Board at the next available
meeting after the discussion or contact.
2. EMPLOYEES
• Section 9 in the Directors’ report explains the
arrangements in place to enable the Company’s staff to
engage with the Board. Given the size of the Company’s
workforce, rather than adopting one of the methods of
engagement in provision 5 of the 2018 Code, the Board
reviewed and determined that the current arrangements
are sufficient.
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STRATEGIC REPORT
3. CONTRACTORS AND SUPPLIERS
• All contractors are subject to thorough review by our
property management team when first appointed
and periodically thereafter. All contractors must sign
up to our Contractor Code of Conduct. Similarly, all
consultants or advisers are subject to review by the
Board before appointment. Major appointments – such
as the external auditors are subject to a formal tender
process and annual appointment. Regular contact
between the part of the business that engages the
contractor/supplier means that we are able to provide
and receive feedback to improve the level of service
going forward.
4. FUNDERS – BANKS
• The CFO holds regular meetings with our principal
banks. At the time that facilities are renewed the CEO
and CFO negotiate the new agreement.
5. CUSTOMERS – TENANTS AND BUYERS
REGULATED TENANCIES
• These tenants form the bulk of our ‘customers’. We
engage with them periodically in relation to services
in the properties, and when necessary to ensure our
compliance with all obligations. As described in the
section on our operational response to Covid-19 on
page 18, contact with some of these tenants was
modified during the pandemic to reflect and respect
their individual wishes and circumstances. There remain
some who are particularly vulnerable and we respect that
but for others the vaccination programme has allowed a
more normal level of contact to resume.
OTHER TENANCIES
• Day-to-day engagement with these tenants tends to be
through the property management team in relation to
maintenance or the renewals team when tenancies are
up for renewal. The same considerations apply to this
group as they do with the regulated tenants.
BUYERS AT VACANT POSSESSION
• These buyers tend to be one-off purchases so that
we do not have on-going relationships with buyers.
We maintain a close working relationship with the
auction houses and estate agents through whom we
sellproperties.
6. CORPORATE REGULATORY BODIES
• This group includes the Financial Reporting Council
(FRC), the Financial Conduct Authority (FCA) and others
who are responsible for developments relevant to our
listing and reporting to our shareholders and others.
Their role includes changes in law, accounting and
auditing standards and any other relevant matters. We
regularly review issuers’ websites to remain informed
on changes to regulation; similarly our various external
advisers also alert us to developments that they believe
should be brought to our attention. These reviews will
be followed by ad hoc contact as and when needed for
clarification. Similarly, we also assist, when requested, in
the periodic quality reviews carried out by the FRC and
others.
7. OPERATIONAL REGULATORY BODIES
• These bodies include the Gas Safe Register, the Health
and Safety Executive, The Environment Agency and
others. For all, in addition to responding to periodic
updates, we monitor their websites to remain current on
changes to regulation for their application to Mountview,
followed by ad hoc contact as and when needed for
clarification. We have appointed an external consultant
to provide Mountview with its own Health and Safety
policy which our contractors agree to abide by. This is
monitored by the external consultant.
8. LOCAL GOVERNMENT
• We liaise with various local Government bodies
and review their websites on a need to know basis.
Departments in local Government that we may contact
on a property specific basis include Social Services
& Environmental Health. We are currently using the
Ministry of Housing, Communities & Local Government
website in order to ensure compliance with Energy
Performance Certificates. We also have regular contact
with rent officers on matters concerning rent, property
condition and maintenance and other matters that may
arise on an ad hoc basis and periodic contact with local
planning officers as and when works on properties,
including trees with TPOs, need permission before work
can start.
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9. PROFESSIONAL ADVISERS
CORPORATE ADVISERS INCLUDING AUDITORS
• We have long standing relationships with the advisers
noted on page 20. We work with them on a combination
of retainer or ad hoc basis as they assist when matters
relevant to their area of expertise arise – including input
to the Annual Report and Accounts and related market
communications. Our engagement with the auditors is
set out in the Report of the Audit and Risk on page 38.
In addition we work with a range of other external
specialists as needed. For example in the current year
this has included working with Allsops on the valuation
of investment properties (see Note 13 on page 68),
EcoAct in relation to our Carbon reporting (see Note 7
on pages 23 to 24) Achill in relation to TCFD matters,
Tax Systems in relation to our ESEF filing and publication
and Winckworth Sherwood LLP on employment matters.
OPERATIONAL ADVISERS
• These advisers include the legal advisers that we work
with, notably on property transactions, and auctioneers
and agents who form an essential part of the sales
process when properties become vacant
10. LOCAL COMMUNITIES
• We engage early with local communities when
maintenance work could affect them for example
location of skips or disruption during works. Where
possible when maintenance work is needed on our
properties we employ well regarded locally based
contractors who meet the criteria in our Contractor
Codeof Conduct.
TASK FORCE ON CLIMATE RELATED FINANCIAL
DISCLOSURES (TCFD)
OVERVIEW:
Mountview is committed to adopting the recommendations
of the Task Force on Climate-Related Financial Disclosures
(TCFD). The TCFD aims to inform investors and other
stakeholders on climate-related risks and opportunities that
are relevant to our business. Below we have provided more
detail on how, given our current context, as shown through
our carbon footprint shown in our Streamlined Energy and
Carbon Reporting disclosures (SECR) as computed by Eco
Act (Page 23) and our current experience of low exposure to
physical climate risks our wider exposure to and influence
on climate are currently limited.
Accordingly, we have considered our “comply or explain”
obligation under the FCA’s Listing Rule 9.8.6R and confirm
that we have made disclosures that we believe, in our
context, are consistent with the spirit behind the TCFD
Recommendations and Recommended Disclosures, but
without creating structures and processes that for our
context are not warranted. Specifically, in this context we
believe that developing detailed plans and governance
structures would be of limited value to the Group and to
our stakeholders. We have identified and track the metrics
described below which we believe cover the risks currently
identified. As described below, we have established
a Climate Working Group of Non-Executive Directors
(NEDs) and managers with line responsibilities in climate
matters to monitor our exposures and alert the Board
should circumstances change and more formal structures
be required – as will be found in companies with a much
greater exposure to and impact on the environment than
Mountview has.
MOUNTVIEW’S CONTEXT FOR
ADDRESSING CLIMATE MATTERS:
As noted above, in considering Mountview’s approach to
climate related risks the context of the business needs to be
borne in mind. Specifically, this relates to the stability of the
business given the long-standing strategy, business model
and operational procedures. Further, as evidenced by our
SECR reporting (page 23) our carbon footprint as computed
for us by EcoAct is currently 68 tons. Notwithstanding that
taken together these two factors might suggest that climate
was not as significant a matter for Mountview as it would
be for many others, we do take our role in climate change
seriously so that climate risks form an integral part of our
risk management framework and discussions at Audit and
Risk Committee and Board meetings. Importantly, the Board
has formally committed to meeting net zero before 2050 to
align with the Paris Agreement objective of 1.5 degrees.
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STRATEGIC REPORT
Our Climate Working Group (CWG) has been established
to assist in our monitoring and management of climate-
related risks and opportunities, together with input from
our independent climate advisers. We are able to track
emergent climate risks that manifest themselves through
our business or risks that we are alerted to by our advisers,
which are affecting others or may be coming onto the
national agenda in the coming months. In this way, we
believe that we have established protocols and practices
that are consistent with both the aims of the TCFD and
the context of our business as described above. The result
is an approach that has the flexibility to be light touch for
most of our work – but with the ability to move quickly and
bring in the requisite skills through our network, should a
climate issue emerge. For example, on the horizon is the
expected tightening of the energy performance certificate
(EPC) requirements where the detailed requirements remain
subject to further consultation before becoming law. Thus
the CWG has a current task to monitor the development
of these requirements and prepare for the necessary
operational and financial planning that will follow once the
provisions are finalised.
While climate is an important issue for us, given our context
it is not currently a matter of sufficient significance to
warrant the formation of a dedicated Board committee and
is instead managed through our CWG incorporating normal
functional roles. This is a matter that we keep under review
and should circumstances change and greater prominence
be warranted then we will revisit our approach.
MOUNTVIEW’S WORK PROGRAMME:
The Climate Working Group has identified actions for the
coming year including:
• As a part of our standing site inspection programme,
exploring the exposure at a property level the flood or
other risks faced by the 42 properties identified through
the Environment Agency data
• Exploring the operational and financial impact of the
tighter EPC regulations for landlords on our property
portfolio as the new regulations evolve.
• Keeping under review the extent of our Scope 3
exposures as new sources are identified.
Governance Describe the organisation’s governance around climate-related risks and opportunities including the
board’s oversight of climate-related risks and opportunities and management’s role in assessing and
managing climate-related risks and opportunities
Ultimate responsibility for climate-related matters lies with Mountview’s Board, with the executives charged
with overseeing the implementation by our functional teams of decisions taken. To assist in designing
responses to climate matters Mountview has set up a Climate Working Group (CWG) comprising the
Chairman, our independent NED and representatives of the Property management, Finance and IT
functions and advised by our external consultants. This group reports quarterly to the Board highlighting
matters to be considered when reviewing operational plans and budgets.
The Audit and Risk Committee maintains the Group’s risk matrix, including our principal risks (see page 36
to 39). The Group’s Risk Matrix, which includes climate-related risks, is reviewed at each Audit and Risk
Committee meeting and then at each Board meeting.
Strategy Describe the actual and potential impacts of climate-related risks and opportunities on the organisation’s
businesses, strategy and financial planning where such information is material” including the climate-
related risks and opportunities the organisation has identified over the short, medium and long term; the
impact of climate-related risks and opportunities on the organisation’s business, strategy and financial
planning and the resilience of the organisation’s strategy, taking into consideration different climate-related
scenarios, including a 2°C or lower scenario
Mountview’s strategy and business model are long-standing and stable and manifest themselves through
the operational plans and procedures of the Group. Notwithstanding this stability the CWG has identified
possible climate scenarios around increasing regulation e.g. related to the EPC requirements (a medium
term Transition matter) and growing incidence of extreme weather events following temperature rises
under a 2°C scenario, including flooding exposure (Physical risk matters across all horizons) and using
them has identified properties at risk using externally sourced profiles. Based on this data, the CWG has
identified the work programme noted above and has qualitatively assessed the exposure of the Group,
where possible, should such events occur.
In terms of the impact of these risks on the Group’s strategy and financial planning, the results of this
analysis indicate that at present the Group would be able to accommodate the impact of these risks
through normal operating procedures and budgets. As noted in our work programme we are monitoring
the development of the EPC regulations-though the operational and financial impact will only be properly
quantifiable once the final regulations, requirements, improvement options and exemptions have been
published. No scenario has indicated the need to revisit our strategy and business model.
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Risk Management Describe how the organisation identifies, assesses and manages climate-related risk, including the
organisation’s processes for identifying and assessing climate-related risks; the organisation’s processes for
managing climate-related risks and how processes for identifying, assessing and managing climate-related
risks are integrated into the organisation’s overall risk management
Identified climate risks are tracked regularly as described above. Other climate-related risks are identified
as a part of our monitoring approach to emergent risks (see Page 12) which considers both a ‘bottom
up’, property level incidents, and ‘top down’ horizon scanning, for new risks. In this we get input from our
external consultants. Our overall approach to risk management, including management of climate change
risk, is described on pages 10 to 13.
Where emergent risks arise and are concluded to be relevant to Mountview’s business then when
considering which risks, not just climate risks, to include in our framework we use the TRAP (Terminate:
Reduce; Accept; Pass on) model to guide our approach.
Metrics and targets Describe the metrics and targets used to assess and manage relevant climate-related risks and
opportunities where such information is material including the metrics used by the organisation to
assess climate-related risks and opportunities in line with its strategy and risk management process; the
organisations Scope 1, Scope 2, and if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the
related risks and the targets used by the organisation to manage climate-related risks and opportunities
and performance against targets
The metrics we use to assess climate-related risks include:
• Our SECR carbon reporting, including looking at trends in the results provided by EcoAct – see page 23
• Our EPC ratings 91.4% passed or with valid exemptions; 6.6% currently having remedial works carried
out and 2% not yet assessed due to access issues (including Covid-19 related matters)
• The number of properties flagged as ‘at risk’ based on Environment Agency data covering post codes
at risk 42 in 2022 (2021: 42)
• The incidence of maintenance triggered by extreme weather conditions. (An insignificant proportion of
the overall maintenance expenditure in both 2021 and 2022)
As described above, while climate-related matters
are clearly a factor in our business, given the currently
low significance of the potential impact under current
regulations and the uncertainty around future EPC
requirements, formal targets have not currently been set.
This matter will be kept under review as the CWG’s work
progresses. As noted on page 16 the Board have formally
committed to meeting net zero before 2050 to align with
the Paris agreement objective of 1.5 degrees and, in relation
to our carbon emissions, are following best practice by
reducing our emissions through positive action as far as
possible. Once we have reached a level that, in conjunction
with our advisers EcoAct is determined to be residual, at
that point we will seek carbon offsetting to cover the last
step in meeting the net zero target.
OPERATIONAL RESPONSE TO COVID-19
The restrictions related to the Covid-19 pandemic were
declared shortly before the Company’s 2019/2020 financial
year-end and continued into the 2021/2022 financial year
until the vaccination programme permitted a relaxation.
Throughout the pandemic, serving and assisting our
tenants, while also respecting the safety measures
recommended by the Government, became our priority
and led to the steps outlined below to minimise disruption
as far as was possible. With the lifting of restrictions many
of the modified working practices that were needed and
embedded to establish effective working practices during
the pandemic are being embraced as a part of our ‘new
normal’. In addition, following the roll-out of the vaccination
programme, many of our tenants, who were concerned
about house visits in the early stages of the pandemic,
have felt ready to welcome our staff and contractors and,
as a result, the backlog of maintenance built up during the
pandemic has now been cleared.
Review of Operations (Continued)
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Mountview Estates P.L.C. Annual Report and Accounts 2022
STRATEGIC REPORT
PERSONNEL:
No staff were furloughed or laid off during the pandemic,
nor did we access or participate in any of the Government
support schemes. Further to meet the Government
guidelines we:
• identified staff in the high risk groups supporting them
through the initial self-isolation and then as guidelines
evolved
• supported our staff working from home using
technology to enable this
• introduced safety measures including screens, PPE
supplies, anti-viral products and providing covid test kits
in the office.
The safety measures remain in place to help support and
sustain the peace of mind and safety of our staff and other
stakeholders.
PROPERTY INSPECTION AND
MAINTENANCE:
We secured our contractors confirmation that they would
adhere to Government guidelines on safe working. As a
result, property inspections and maintenance continued
during the pandemic, but with limited access to carry out
essential urgent maintenance where tenants had Covid
safety concerns. Consequently this lead to a backlog of
property and related maintenance during an extended
period. However, through the efforts of staff, contractors
and tenants we have been able to catch up and remedy this
in 2021/2022, which has resulted in an increase in property
expenses in the financial year 2021/2022.
RENT:
We worked with tenants experiencing hardship as a result
of loss of income through Covid-19 and, on a case by
case basis, established the facts, advised on the help and
assistance available to them and, if necessary, agreed a
payment plan to safeguard their tenancy.
AUDIT:
The audits since 2020 have all been affected, including the
need to conduct at least some of the audit work remotely.
As a result of the co-operation between our finance team
and our external auditors we have not needed to amend the
timetable for any of our audits during the pandemic.
ANNUAL GENERAL MEETING:
As shareholders will know, the arrangements for the 2020
AGM were modified and the meeting was held as a closed
meeting with the minimum shareholder attendance to
ensure it was quorate and only to conduct the formal
business of the meeting. In 2021 we were able to welcome
shareholders back to an in-person meeting, and look
forward to welcoming even more shareholders to our 2022
AGM. The plans for the 2022 AGM are set out in the Notice
of Meeting on page 93.
Approved and agreed on behalf of the Board by:
D.M. Sinclair
Chief Executive Officer
5 July 2022
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Mountview Estates P.L.C. Annual Report and Accounts 2022
20
Directors and Advisers
as at the date of this Annual Report and Accounts
MR D.M. SINCLAIR FCA (CEO)
Joined the Company as Company Secretary in 1977,
became a Director on 1 January 1982 and succeeded
his late father as Chairman on 5 June 1990. Retained the
position of Chief Executive (‘CEO’) when the roles of
Chairman and CEO were split into separate roles in 2013.
Fellow of the Institute of Chartered Accountants in England
and Wales.
MRS M.M. BRAY FCCA (CFO)
Joined the Company in 1996 and became Company
Secretary. Became a Director on 1 April 2004. Fellow of the
Association of Chartered Certified Accountants.
NON-EXECUTIVE DIRECTORS
MR A.W. POWELL FCA FIMC* (CHAIRMAN)
Joined the Company as Non-Executive Director on
1 April 2018, assumed the role of Acting Chairman on
31 March 2019, and was confirmed as Chairman on
19 November 2019. Mr Powell is a fellow of the Institute of
Chartered Accountants in England and Wales and a fellow
of the Institute of Management Consultants.
* Mr A.W. Powell was considered at the time of his
appointment in 2018, and at the time of his appointment
as Chairman in 2019, to be independent for the purposes
of the UK Corporate Governance Code.
MS M.L. ARCHIBALD MRICS*
(CHAIR OF THE REMUNERATION COMMITTEE)
Joined the Company as a Non-Executive Director on
1 July 2014. Member of the Royal Institution of Chartered
Surveyors. She has held various roles with property advisers,
including Jones Lang Lasalle, and now acts as an adviser to
clients in a range of property sectors, including residential
and commercial property.
* Ms M.L. Archibald is considered to be independent for
the purposes of the UK Corporate Governance Code.
DR A.R. WILLIAMS
Joined the Company as a Non-Executive Director on
1 December 2015. Dr Williams is a qualified member of the
medical profession, and a member of the Sinclair concert
party. He represents the interests of the family and private
shareholders generally.
SECRETARY AND REGISTERED OFFICE
Mrs M.M. Bray FCCA
Mountview House,
151 High Street,
Southgate,
London N14 6EW
BANKERS
HSBC Bank Plc
1-3 Bishopsgate,
London EC2N 3AQ
Barclays Bank PLC
One Churchill Place,
London E14 5HP
AUDITORS
BSG Valentine (UK) LLP
Lynton House,
7–12 Tavistock Square,
London WC1H 9BQ
SOLICITORS
Norton Rose Fulbright LLP
3 More London Riverside,
London SE1 2AQ
REGISTRARS AND TRANSFER OFFICE
Link Group
10th Floor,
Central Square,
29 Wellington Street,
Leeds LS1 4DL
BROKERS
Singer Capital Markets
One Bartholomew Lane,
London EC2N 2AX
FINANCIAL ADVISERS
SPARK Advisory Partners Limited
5 St John’s Lane,
London EC1M 4BH
31066 5 July 2022 8:09 am proof 22
21
Mountview Estates P.L.C. Annual Report and Accounts 2022
GOVERNANCE
Directors’ Report
The Directors (as listed on page 20) have pleasure in presenting to the Members their 85th Annual Report together with
the Financial Statements for the year ended 31 March 2022. The Corporate Governance Statement on pages 29 to 33 forms
part of this Directors’ Report and is incorporated into the Directors’ Report by reference. Additional information which is
incorporated by reference into this Directors’ Report, including information required in accordance with the Companies Act
2006 can be found as follows:
Disclosure Location
Financial risk management objectives and policies Notes to the financial statements, pages 63 and 64
Statement of Directors’ responsibilities page 28
Directors’ interests in share capital Remuneration Report, page 53
Compensation for loss of office arrangements. Remuneration Report, page 48
For the purpose of LR 9.8.4R, the only information required to be disclosed can be found in the following locations:
Disclosure Location
Agreements with controlling shareholder Directors’ Report, Note 19, page 27
All other sub-sections of LR 9.8.4R are not applicable.
1. RESULTS AND DIVIDENDS
The results for the year are set out in the Consolidated Statement of Comprehensive Income on page 54.
The Directors recommend the payment of a final dividend of 250 pence per share. The dividend will be paid on 15 August
2022, subject to approval at the Annual General Meeting (AGM) on 10 August 2022, to shareholders on the register at the
close of business on 8 July 2022.
Details of the AGM, including the notice of AGM, are set out on pages 93 to 97.
2. ACTIVITIES
The principal activities of the Company and its subsidiary undertakings are as follows:
PARENT COMPANY
Mountview Estates P.L.C. Property Trading
Registered Office: Mountview House, 151 High Street, Southgate, London, N14 6EW
Registered in England 328020
SUBSIDIARY UNDERTAKINGS (WHOLLY OWNED)
Hurstway Investment Company Limited Property Trading
Registered Office: Mountview House, 151 High Street, Southgate, London, N14 6EW
Registered in England 344034
Louise Goodwin Limited Property Investment
Registered Office: Mountview House, 151 High Street, Southgate, London, N14 6EW
Registered in England 691455
A.L.G. Properties Limited Property Investment
Registered Office: Mountview House, 151 High Street, Southgate, London, N14 6EW
Registered in England 508842
3. BOARD OF DIRECTORS
The names of the current Directors, along with their details, are set out on page 20 and are incorporated into this report by
reference.
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Mountview Estates P.L.C. Annual Report and Accounts 2022
22
4. APPOINTMENT AND RETIREMENT OF DIRECTORS
The appointment and retirement of Directors is governed by the Company’s Articles of Association, the Code, the
Companies Act 2006 and related legislation. The Articles of Association contain the following provisions relating to the
appointment and replacement of Directors:
• The Company may, by ordinary resolution, appoint a person who is willing to act as a Director, either to fill a vacancy or
as an addition to the existing Board
• The Board has the power to appoint any person who is willing to act as a Director, either to fill a vacancy or as an
addition to the existing Board. Any such Director holds office until the next AGM and may offer himself/herself for
election
• The total number of Directors (other than any alternate Directors) must not be more than 12 or less than two
• In addition to any power to remove a Director conferred by Section 168 of the Companies Act 2006, the Company may,
by ordinary resolution, remove any Director before the expiration of his or her period of office, but without prejudice
to any claim for damages which he or she may have for breach of any contract of service between him or her and the
Company. The Company may then appoint another person, who is willing to act, as a Director in his or her place in
accordance with the Articles of Association.
In accordance with the Code all Directors will seek re-election at the 2022 AGM.
The Nomination Committee report on pages 34 and 35 describes the process currently used for identifying and appointing
new Directors to the Board.
5. SHARE CAPITAL
The authorised share capital of the Company as at 31 March 2022 was £250,000 divided into 5,000,000 Ordinary Shares of5p,
of which 3,899,014 were in issue (2021: 3,899,014). As at 5 July 2022, there has been no change in the issued share capital.
The rights and obligations attaching to the Company’s shares, as well as the powers of the Company’s Directors,
are set out in the Company’s Articles of Association, a copy of which can be viewed on the Company’s website at
www.mountviewplc.co.uk.
There are no restrictions concerning the transfer of shares in the Company, no special rights with regard to control attached
to the shares, no agreements between holders of shares regarding transfer known to the Company and no agreement
which the Company is party to that affects its control following a takeover bid.
Changes to the Company’s Articles of Association must be approved by shareholders in accordance with the Articles of
Association and legislation in force from time to time.
6. NOTIFIABLE INTERESTS IN SHARE CAPITAL
As at 5 July 2022, the following disclosures of major holdings of voting rights have been made (and have not been amended
or withdrawn) to the Company pursuant to the requirements of Chapter 5 of Disclosure Guidance and Transparency Rules:
Ordinary
Shares of 5p
each
% of Issued
Share
Capital
Mr Phillip Wheater, Mr David Wright and Mr Alistair Sinclair, Trustees of the Frank and
Daphne Sinclair Grandchildren Settlement* 393,193 10.08
Mrs M.A. Murphy** including:
• BBTJ 402,000
• ALFL Ltd 79,350 598,545 15.36
Mrs E. Langrish-Smith** 307,000 7.87
Mrs A. Williams** 130,250 3.34
Mrs S. Simkins** 148,220 3.80
Talisman Dynamic Master Fund Ltd* 221,937 5.69
* Denotes indirect holding.
** Denotes combined direct and indirect holding.
Directors’ Report (Continued)
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Mountview Estates P.L.C. Annual Report and Accounts 2022
GOVERNANCE
7. STREAMLINED ENERGY AND CARBON REPORTING DISCLOSURES
INTRODUCTION
The directors of Mountview Estates P.L.C are required to report its energy consumption and greenhouse gas (GHG)
emissions as part of its Annual Report and Accounts, in accordance with the Companies (Directors’ Report) and Limited
Liability Partnerships (Energy and Carbon Report) Regulations 2018, also known as Streamlined Energy and Carbon
Reporting (SECR).
Mountview engaged EcoAct Ltd (EcoAct), formerly Carbon Clear Ltd, to calculate its energy consumption and carbon
footprint for the reporting period of 1 April 2021 to 31 March 2022.
EcoAct’s scope of work was to:
• Define the reporting boundary and collect the required data;
• Calculate Mountview’s energy consumption and carbon footprint;
• Report the results.
EcoAct is a world-leading carbon management consultancy with a proven track record of helping organisations to measure,
reduce and offset their carbon emissions.
EXECUTIVE SUMMARY
Total gross GHG emissions in the reporting period were 67.5 tCO
2
e, which can be attributed as follows:
• Direct Emissions (Scope 1) 32.4 tCO
2
e or 48% of the total
• Indirect Emissions (Scope 2) 20.0 tCO
2
e or 30% of the total
• Indirect Other Emissions (Scope 3) 15.1 tCO
2
e or 22% of the total.
The results are presented below:
Figure 1: Total Emissions Broken Down by Activity and Scope
Type of Emissions Activity tCO
2
e % of Total
Direct (Scope 1) Natural Gas 12.9 19%
Company Vehicles 19.5 29%
Subtotal 32.4 48%
Indirect (Scope 2) Electricity used in company hybrid vehicles 0.8 1%
Electricity 19.2 29%
Subtotal 20.0 30%
Indirect (Scope 3) WTT and T&D (All Scopes) 15.1 22%
Subtotal 15.1 22%
TOTAL (tCO
2
e)
67.5
100%
1.
Under the Mandatory Greenhouse Gas Regulation, a company is required to report its scope 1 and 2 emissions. It is not mandatory to report scope 3
emissions.
2.
An operational control boundary was used to calculate Mountview’s carbon footprint.
Figure 2: GHG Emissions (tCO
2
e) by Activity (2021-22)
Purchased
Electricity
19.2
Company
Owned Vehicles
20.3
WTT and
T&D
15.1
Natural
Gas
12.9
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Mountview Estates P.L.C. Annual Report and Accounts 2022
24
Figure 3: Emissions Intensity Metrics
Figure 3 shows a year-on year comparison of emissions intensities using revenue and number of FTEs as normalisation
factors:
Intensity Metric 2021/22 2020/21 % Change
Total Emissions (tCO
2
e) 67.5 67.2 0.5%
Revenue (£’mil) 66.0 65.7 0.5%
Number of employees (staff and directors) 29 29 0.0%
tCO
2
e per employee 2.3 2.3 0.0%
tCO
2
e per £’mil turnover 1.02 1.02 0.0%
Total emissions normalised by the number of employees increased by 0.5%, whereas total emissions per million £ of
turnover remained the same as last year.
YEAR-ON-YEAR ANALYSIS
Emissions produced by Mountview have increased by 0.5% compared to last year from, 67.2 tCO
2
e to 67.5 tCO
2
e.
This can be attributed to a 32.9% increase in emissions from company owned vehicles due to increased mileage as we
emerge from the Covid-19 pandemic.
Scope 1 emissions have increased by 0.3%, from 32.3 to 32.4 tCO
2
e compared with the previous reporting year. This is due
to:
• Emissions from company vehicles have increased by 33.7%. This is due to increased mileage compared to the previous
reporting period which was affected by restriction related to Covid-19 impacting business travel.
Scope 2 emissions have decreased by 13.7% compared to the previous reporting year. This can be attributed to:
• A 9% decrease in the emission factor for UK grid electricity.
• The office electricity consumption (kWh) decreased by 6.7%; the estimated electricity consumption in managed
communal areas increased by 5%. Since the numbers of managed communal areas increased from 24 to 27. It should
be noted that the electricity consumption of the second floor decreased by 81% compared to the previous year due to
accurate meter readings as opposed to estimated meter readings in the previous year.
• A small percentage (4.1%) of Scope 2 emissions is attributed to the shift of company vehicles to plug-in hybrid vehicles
that consume additional electricity.
Emissions from electricity accounts for 29.6% of Mountview’s overall carbon footprint. In addition to its head office,
Mountview are also responsible for electricity use in the communal areas of 27 managed blocks of flats. Emissions have
been estimated for these flats using the following assumptions:
• The Company pays an average £37 electricity charge per managed flat towards communal areas.
• The Company covers communal area charges for 27 properties.
• The average electricity standard rate is 18.3p/kWh. This is based on the average price of electricity purchased by
non-domestic consumers in the UK with “very small” properties, for the last 3 quarters of 2021.
REFERENCES
The following sources have been used for the completion of this document:
• ‘UK Government GHG Conversion Factors for Company Reporting’ for 2021, released by Department for Business,
Energy and Industrial Strategy and Department for Environmental Food and Rural Affairs, as found in
https://www.gov.uk/government/publications/greenhouse-gas-reporting-conversion-factors-2021.
• ‘Prices of fuels purchased by non-domestic consumers in the UK’, Table 3.4.2, March 2022, Department for Business,
Energy & Industrial Strategy, as found in https://www.gov.uk/government/statistical-data-sets/gas-and-electricity-
prices-in-the-non-domestic-sector.
Directors’ Report (Continued)
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Mountview Estates P.L.C. Annual Report and Accounts 2022
GOVERNANCE
8. SUSTAINABILITY AND CLIMATE
CHANGE
As an asset owner and manager Mountview sits at the top of
the investment chain and uses this position to influence those
that we work with in relation to factors such as air pollution
and energy uses. We do this in a number of ways including:
• Using local contractors wherever possible to reduce
travel needed and also retain the economic and social
benefits of work done within local communities
• Using sustainable source electricity suppliers
• On expiry of leases, replacing cars leased by the Group
with hybrid models
• Converting lighting to ‘eco-lamps’ where possible
• We have obtained an Energy Performance Certificate
(E.P.C.), or have valid exemptions for 91.4% of properties
in our portfolio with 6.6% awaiting re-test and 2.0% yet
to review due to access issues. Following these reviews,
we have undertaken, where necessary, loft insulation,
cavity wall insulation, provision for storage heaters and
dual plate power meters
In conjunction with our external advisers, we continue to
monitor developments in relation to climate change.
As noted in the Strategic Report, given the size of the
Company and the current low impact on the environment
as outlined above, the Company has informal rather than
formal environmental policies. However this matter is kept
under regular review including during consideration of risks
as an agenda item at Board meetings and should the Board
consider that due to external or internal developments that
formulating formal policies would be beneficial then we
would draft and adopt the relevant policies.
9. EMPLOYEES
Notwithstanding that the Group’s strategy, business model
and operations are long established with well developed
underlying processes that reflect our business drivers, the
performance of the business could not be sustained without
a strong, skilled and knowledgeable workforce who enjoy
their work at Mountview. This is manifested in one statistic
in particular which is the average time in role of our staff
– which currently stands at over 12 years. The Group has
family roots and it is our belief that a similar feel remains
today within what is a small and highly skilled workforce
of 24 staff plus the Directors. This is an environment in
which every member of staff meets and talks with one or
both of the Executive Directors, if not on a daily basis then
on a weekly basis – something that is continuing under
the hybrid working practices that were developed during
the pandemic, and these practices are set to continue.
In addition, the executives have one on one meetings
with staff annually to discuss performance, bonus and
salary levels individually and in general. Matters raised
during these discussions are reported to the Board and
Remuneration Committee. In view of the size of the Group
and the regular contact with all staff, more formal means of
employee engagement are not considered appropriate at
this time. This matter will be kept under regular review.
This regular contact fosters an environment in which staff
can air and discuss concerns. It is also the case that staff
know that if there was any matter that they felt might be
sensitive to raise within the operational side of the business
that they can approach any of the Non-Executive Directors
(NEDs) to discuss the matter.
In this regard the Group has policies on whistleblowing
and related policies on bribery, gifts, conflicts of interest
and related matters that are included in the staff manual,
explained to new staff on joining and are reviewed annually
for continued suitability by the Audit and Risk Committee
who report to the Board on this matter.
It is a standing item on the Board agenda to receive a report
on and consider any reporting made under these provisions;
during 2021-22 no incidents were reported.
TRAINING:
The Group provides regular training related to the use
of computer software and for the general professional
development of the staff concerned. For example we
provide appropriate training when there are developments
in relevant legislation, regulation or practice.
We encourage all of our staff to continue their education
and support staff following courses aimed at gaining
professional qualifications.
10. DIVERSITY
Mountview is committed to employing and retaining a
skilled workforce with a diversity of qualifications and talents
from a variety of backgrounds. Given the infrequency of
recruitment Mountview does not have a formal diversity
policy, instead having regard to evolving best practice at
the time of an appointment. The Company is committed
to equal opportunities for all and that recruitment and
selection be strictly on the basis of merit and ability.
As at 31 March 2022, the Group had one female Executive
Director, Mrs Marie Bray, who has been on the Board since
2004, and one female Non-Executive Director, Ms Mhairi
Archibald, who has been on the Board since July 2014.
Female Board membership represented 40% of the Board.
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Mountview Estates P.L.C. Annual Report and Accounts 2022
26
The Group has seven Senior Managers (who are not
Directors), three of whom are female.
Of the 24 employees and 5 directors in the Group, 11 are
male and 18 are female.
11. SIGNIFICANT AGREEMENTS
Certain banking agreements to which the Group is a
party (described in Note 18 to the Consolidated Financial
Statements) alter or terminate upon a change of control of
the Group following a takeover bid.
There are no other significant agreements to which the
Group is a party that take effect, alter or terminate upon a
change of control of the Group following a takeover bid.
There are no contractual or other agreements or
arrangements in place between the Group and third parties
which, in the opinion of the Directors, are essential to the
business of the Group.
12 DIRECTORS’ INTERESTS IN
CONTRACTS
There was no contract in existence during or at the end of
the financial year in which a Director of the Company is, or
was, materially interested, and which is or was significant in
relation to the Group’s business.
13. DIRECTORS’ AND OFFICERS’
LIABILITY INSURANCE
The Company purchases liability insurance covering the
Directors and Officers of the Company and its Subsidiary
undertakings and this has been in place throughout the
financial year under review.
The Company’s Articles of Association at Article 163
permit the provision of indemnities to the Directors (at the
discretion of the Board), which constitute qualifying third
party indemnity and qualifying pension scheme indemnity
provisions under the Companies Act 2006.
14. HEALTH AND SAFETY
The Group is committed to achieving a high standard of
health and safety. The Group regularly reviews its health
and safety policies and practices to ensure that appropriate
standards are maintained. The gas supply and appliances
within all of the Group’s relevant residential properties are
independently inspected under the Gas Safety (Installation
and Use) Amended Regulations 1996 and certificates of
compliance obtained. Similarly there is a regular programme
of electrical inspections. We are complying with fire
and health and safety legislation. The Group satisfies its
commitments in respect of any remedial work identified by
these inspections.
15. GOING CONCERN BASIS
The Directors continue to adopt the going concern basis in
preparing the accounts.
The financial position of the Group including key financial
ratios is set out in the Review of Operations on page 10.
The Group is historically profitable, has considerable
liquidity and regularly reviews its long-term borrowing
facilities with its lenders. As a result, the Directors believe
the Group is very well placed to manage its business risks
successfully and have a good expectation that both the
Company and the Group have adequate resources to
continue their operations for the foreseeable future.
The Group’s longer term Viability Statement is presented on
page 13.
16. AUDITORS
Messrs BSG Valentine (UK) LLP have indicated their
willingness to continue in office and a resolution for the
reappointment of BSG Valentine (UK) LLP as auditors for the
ensuing year will be proposed at the AGM.
17. AUDITORS AND DISCLOSURE OF
INFORMATION TO THE AUDITORS
So far as each Director is aware, there is no relevant audit
information of which the Company’s auditors are unaware.
Each Director has taken the steps that they ought to have
taken as Directors in order to make themselves aware of
any relevant audit information and to establish that the
Company’s auditors are aware of that information.
Directors’ Report (Continued)
31066 5 July 2022 8:09 am proof 22
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Mountview Estates P.L.C. Annual Report and Accounts 2022
GOVERNANCE
18. CONCERT PARTY
Mountview Estates PLC is a family controlled company.
There is a concert party in existence whose net aggregate
shareholdings amount to over 50% of the issued share
capital of the Company.
19. RELATIONSHIP AGREEMENT
In accordance with the FCA’s Listing Rules (the Listing Rules),
the Company has entered into an agreement with the
Sinclair family concert party, which, as it controls more than
30% of the Group’s total issued share capital, is deemed
a controlling shareholder. The relationship agreement is
intended to ensure the controlling shareholder complies
with the independence provisions in Listing Rule 9.2.2AR.
Under the terms of the relationship agreement, the Principal
Concert Party Shareholder, Mr D.M. Sinclair (a member of
the Sinclair family concert party), has agreed to procure the
compliance of other individual members of the Sinclair family
concert party who are treated as controlling shareholders
with independence obligations contained in the relationship
agreement. The Sinclair family concert party, as controlling
shareholders of the Company have a combined aggregate
holding of over 50% of the Company’s voting rights.
The Board confirms that, since the entry into the relationship
agreement as at 5 July 2022, being the latest practicable
date prior to the publication of this annual report and
accounts:
• the Company has complied with the independence
provisions included in the relationship agreement;
• so far as the Company is aware, the independence
provisions included in the relationship agreement have
been complied with by the Sinclair family concert party
and their associates; and
• so far as the Company is aware, the procurement
obligation included in the relationship agreement has
been complied with by the Principal Concert Party
Shareholder.
20. GENERAL MEETING
At the AGM held on 11 August 2021, the resolutions
concerning the re-election of both Mr A.W. Powell and Ms
M. L. Archibald as Directors of the Company did not receive
support of a majority of the independent shareholders who
voted, which is a requirement of the Listing Rules where the
Company has a controlling shareholder, and therefore Mr
Powell and Ms Archibald stood for re-election at a general
meeting held on 22 November 2021 (General Meeting).
Both Mr Powell and Ms Archibald were re-elected at the
General Meeting. Between the 2021 AGM and the General
Meeting certain Board members contacted a number of
major shareholders. All shareholders (including the Sinclair
family concert party members) were entitled to vote on the
resolutions to re-elect Mr Powell and Ms Archibald at the
General Meeting.
As reported through the regulatory announcement to the
market, following the 2021 AGM the Company identified
as far as possible those shareholders who did not support
the various resolutions and attempted to engage with them
to seek their views. Some shareholders did not wish to
engage. The Company remains committed to shareholder
engagement and we will continue to offer to meet with
shareholders to take into account their concerns and
considerations in the future.
The Directors’ report was approved by the Board on
5July2022 and is signed on its behalf by:
M.M. Bray
Company Secretary
5 July 2022
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Mountview Estates P.L.C. Annual Report and Accounts 2022
28
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report, the Directors’ Remuneration Report and the Group
and Company financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the
Directors are required to prepare the Group financial
statements in accordance with UK adopted international
accounting standards and applicable UK law.
The Directors have elected to prepare the Company
financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (UK GAAP)
including FRS 102 and applicable law.
Under company law, the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group
and Company and of their profit or loss for that period.
In preparing these financial statements, the Directors are
required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• in respect of Group financial statements, state whether
UK adopted international accounting standards have
been followed, subject to any material departures
disclosed and explained in the Financial Statements;
• in respect of the Company financial statements state
whether applicable UK accounting standards have been
followed, subject to any material departures disclosed
and explained in those statements; and
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group and the Company will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that its financial statements
comply with the Companies Act 2006. They have general
responsibility for taking such steps as are reasonably open
to them to safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Each of the Directors, (as set out on page 20) as at the date
of this Report, confirms to the best of their knowledge that:
• The Financial Statements, prepared in accordance with
the applicable set of accounting standards, give a true
and fair view of the assets, liabilities, financial position
and profit of the Group and the Company.
• The strategic report includes a fair review of the
development and performance of the business and the
position of the Group and the Company, together with
a description of the principal risks and uncertainties that
they face.
• The annual report and financial statements, taken as
a whole, are fair, balanced and understandable and
provide the information necessary for shareholders to
assess the Group’s performance, business model and
strategy.
By Order of the Board
M.M. Bray
Company Secretary
5 July 2022
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GOVERNANCE
Corporate Governance
Last year we described the steps we had taken for
establishing and sustaining governance processes that
reflected all of the prevailing UK Corporate Governance
Code (the Code), the Group’s circumstances and structure
and the constraints placed by Covid-19. We believe that
the overlay of Covid-19 has strengthened our processes
by testing them under ‘stress’ and also by opening up
new ways of working that might otherwise not have been
considered. Now that the vaccination programme is
permitting a return to ‘normal’ we are seeking to adopt
many of the modified processes whilst ensuring that they
remain consistent with the Code. Nevertheless during the
year, as explained in Our operational response to Covid-19
on page 18 Covid-19 has played a part in affecting how
we have worked meaning that throughout this period the
Board has:
• operated as normal meeting both remotely and in
person for Board and Committee meetings as well as
having informal discussions between meetings
• retained close oversight of our operations and the
continuing suitability of our strategy
• monitored our existing and emerging risks updating
our risk matrix as needed to ensure we have good risk
management and controls in place
Throughout we believe that our purpose, culture and
values have informed and supported the decisions that
we have taken, supported by the commitment, experience
and creativity of all at Mountview. In addition, effective
engagement with our stakeholders, as described in our
Section 172 statement on page 14 has underpinned our
work during the year. Following Covid-19 our engagement
with stakeholders now includes both traditional and recently
developed electronic means. Contact with them, and
other stakeholders, is key to understanding their views and
receiving their feedback. As a result a considerable amount
of Board time has been taken up with reporting back on
contact with shareholders and other stakeholders and
discussing and responding to points that they have raised.
CORPORATE GOVERNANCE CODE
COMPLIANCE STATEMENT
In respect of the year ended 31 March 2022, the Company
was subject to the Code, a copy of which can be found
at www.frc.org.uk/corporate/ukcgcode.cfm. The Board
confirms that the Company applied the principles and
complied with the provisions of the Code, except as
disclosed in this section.
We remain committed to the benefits of a robust governance
framework and believe that through our approach we are
able to best safeguard the interests of, and deliver long term
value to, our shareholders and other stakeholders. A key
component of this approach is a strong focus on remaining
up to date on current and emerging developments in our
markets, legislation and regulation and the governance
environment. This we achieve through a combination of
reading, contact with our advisers and directors attending
updates, including via webinars, and then sharing salient
points raised with the rest of the Board for discussion during
Board meetings. In addition, we have again worked closely
with Prism Cosec our corporate governance consultants, and
our other advisers to identify the best ways to build evolving
practice into our approach. We are mindful that our structure,
which has evolved through our history and is aligned with
our culture and values, is not fully compliant with some of the
provisions in the Code.
Equally, we recognise the value of bringing different
perspectives to bear on issues arising within the business in
terms of both contribution to debate and risk management
and mitigation. We manage this by involving our various
advisers when matters relevant to their areas of expertise
arise. In this way we are able to ensure that we get the
necessary expert input when it is needed.
Taking account of the Code in the context of our size, with
24 employees plus Directors, our shareholdings and the
nature of our operations where we have a focused, stable
and enduring strategy, and stable workforce and suppliers,
we have looked at each of the principles and provisions of
the Code to consider the spirit behind them as well as the
actual wording used. Given this context where the Board
and the Executives in particular are much closer to the
employees and operations than is likely to be the case for
many quoted companies, we have, as envisaged by the
Code, adopted alternative solutions to provisions where we
believe this to be appropriate.
We are of the view that throughout we are operating
within the spirit behind the principles of good corporate
governance – in a manner that is appropriate to our
business, our size and our economic footprint. In particular,
as a small Board, we recognise that there are matters
concerning the size and composition of the Board that
fall into this category. The Board and also shareholders,
when consulted, are at one with their view that new Board
positions should be created only when there is a clear need
and when the appointee will add capacity or skills that are
needed by the business in order for it to continue to pursue
its strategy.
Below we note the areas where we believe we comply
with the spirit of the Code but do not currently adhere
completely to the detailed requirements. These matters
are kept under constant review as a whole by the Board.
Should there be a material change in the Company’s
strategy, business model, structure or risk environment then
these points would be re-visited and, after consulting with
shareholders on proposals, we would make such changes as
are appropriate given the changed circumstances.
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30
INDEPENDENT NON-EXECUTIVE
DIRECTORS (NEDS): (SECTION 2
PROVISION 11)
The number of independent NEDs (excluding the
Chairman) is currently less than at least half the Board as
required by the Code. This is a matter which the Board
and the NEDs have reviewed in the context of the skills
and experience needed either directly on the Board or
indirectly through advisers and concluded that given the
size of the Company and the stable nature of its strategy,
business model and operations, the current composition,
with one independent NED and three NEDs (including the
Chairman) in total supported by external advisers, remains
appropriate.
APPOINTMENT OF A SENIOR
INDEPENDENT DIRECTOR (SID):
(SECTION 2 PROVISION 12)
Excluding the Chairman, the Company has one
independent NED and the Board has concluded that it
is too small to merit the appointment of a SID. Should
this change and the Board and shareholders consider
that the needs of the business warrant widening the NED
pool to a level that creates a clear SID role then we would
appointone.
COMPOSITION OF COMMITTEES IN
GENERAL: (SECTION 3 PROVISION 17;
SECTION 4 PROVISION 24; AND SECTION
5 PROVISION 32)
The Board is small and therefore the composition of each of
the Committees is limited by the available pool of Directors.
As noted above, should it be concluded that appointing
further independent NEDs was appropriate and would
bring value, then composition of the Committees would be
reviewed.
BOARD EVALUATION AND DIVERSITY:
(SECTION 3 PROVISIONS 21 AND 23)
The Directors consider that the small size of the Group
and the Board does not warrant a formal performance
evaluation process. However, performance of the Directors
is evaluated on an ongoing basis by the Board. In addition,
there is no formal policy on diversity and inclusion,
again because of the size of the Company, although the
Company is committed to equal opportunities for all and
that recruitment and selection be strictly on the basis of
merit and ability. Both these matters are continually kept
under review.
ROLE CONCURRENCE – AUDIT
COMMITTEE: (SECTION 4 PROVISION 24)
The Chairman of the Board is also the Chairman of the
Audit and Risk Committee. The Board consists of 60%
accountants and the Board has determined that there is no
need to appoint a further NED with financial experience.
The Board, and separately the NEDs, have considered the
Chairman’s role on the Audit and Risk Committee and are
firmly of the view that this combined role continues to be in
the best interests of the Company for the time being. This
situation continues to be reviewed on a regular basis.
INTERNAL AUDIT FUNCTION
(SECTION 4 PRINCIPLE M AND
PROVISIONS 25 AND 26)
At present the size of the business does not warrant a full
time internal audit function. As discussed in the Report of
the Audit and Risk Committee this is kept under constant
review and options for cover are reviewed annually in light
of the size and complexity of the business.
REMUNERATION OF THE CHAIRMAN:
(SECTION 5 PROVISION 33)
The remuneration of the Chairman is not set by the
Remuneration Committee. Instead, in line with the principle
of no one being involved in setting their own remuneration,
the Chairman’s remuneration, and that of the other
NEDs is reviewed by the Executive Directors who make a
recommendation to the Board as a whole for final approval,
within the limits set by the Company’s Articles.
IN THIS REPORT
In the following pages we describe our governance
approach under the headings:
• Board leadership and Group Purpose (page 31)
• Division of Responsibilities (page 32)
• Composition, Succession and Evaluation – the report of
the Nomination Committee (pages 34 and 35)
• Audit, Risk and Internal Control – the report of the
Audit and Risk Committee (pages 36 to 39)
• Remuneration – the report of the Remuneration
Committee (pages 40 to 53)
By Order of the Board
M.M. Bray
Company Secretary
5 July 2022
Corporate Governance (Continued)
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GOVERNANCE
BOARD LEADERSHIP AND
GROUP PURPOSE
The role of the Board is to provide leadership to the Group,
ensuring that the necessary financial and human resources
are in place to enable the Group to meet its strategy and
objectives. In addition, the Board ensures that there are
appropriate financial and business systems and controls in
place to safeguard shareholders’ interests and maintain an
appropriate and effective governance framework. In making
decisions throughout the year, the Board is strongly aware
of its responsibilities to the Company’s shareholders as well
as other stakeholders including managing possible conflicts
of interest between different stakeholder groups.
SETTING OUR STRATEGY
Group strategy is proposed by the Executive Directors and
that strategy is rigorously discussed, debated and agreed
by the Board. The NEDs work with the Executive Directors
to deliver on the agreed strategy. The Directors constantly
seek feedback from any source or stakeholder on how well
the current operations are working to meet the strategy as
the working environment evolves. Information received is
analysed for new and emerging risks and opportunities that
may have implications for the strategy and operations, and
the risks monitored.
UNDERSTANDING STAKEHOLDER NEEDS
The Board is mindful of its responsibilities towards all
stakeholders and engagement with them as described
elsewhere in this Annual Report, including:
• our purpose and wider responsibilities (page 5)
• engagement with our employees (page 14)
• engagement with stakeholder groups (pages 14 to 16)
Understanding and taking into account the short and long
term interests of stakeholders when making decisions is
central to how the Company operates, recognising that
these interests will vary by issue and that trade-offs will
often be needed as noted in our Section 172 statement
(page 14) and our operational response to Covid-19
(page18).
THE WORK OF THE BOARD
The Board meets formally at least four times a year, with ad
hoc meetings to discuss particular transactions and events
called as and when required. All Directors are expected
to attend all meetings of the Board, and any committees
they are members of, and devote sufficient time to the
Company’s affairs to fulfil their duties as Directors. During
the year most Board and committee meetings were held by
conference call due to the Covid-19 pandemic.
The Board operates in accordance with the Company’s
Articles of Association and there is a Schedule of Matters
Reserved for Board Decision which includes approval of
strategy, budgets, financial reports, public announcements,
significant acquisitions of property, major capital
expenditure, funding and dividend policy. In addition
the Board reviews and approves matters related to the
operation of the Board and its committees, and, where
material, any new or significantly amended operational or
staff policies. Routine operational questions are delegated
to the relevant team. However, when needed, there is an
escalation process to have a proposed course of action
considered by the Executive Directors or the Board.
The Company Secretary sends out the agenda and
supporting information to all members of the Board in
advance of Board meetings. At each meeting the Executive
Directors provide an operational update, noting any issues
arising and upcoming sales or purchases in the pipeline.
The Board receives, by rotation or exception, reports
from the heads of department again noting any issues
arising. The risk matrix, updated for any new information
or emerging risks, is reviewed as are any potential
conflicts of interest. Any meetings or other contact with
shareholders or other key stakeholders are reported back
and, where necessary, responses discussed and agreed. The
information supplied to the Board and its committees is
kept under review to ensure it is fit for purpose, and that it
enables sound decision-making.
All Directors have access to independent professional
advice at the expense of the Group and to the services of
the Company Secretary who is responsible to the Board
for ensuring the correct procedures are followed, as well as
providing corporate governance updates and guidance.
The Directors consider that the small size of the Board
does not warrant a formal performance evaluation process.
However, performance of the Directors is evaluated on an
ongoing basis by the Board. This is a matter continually
under review.
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32
Attendance at and number of Board and committee meetings is set out below:
Meetings
Mr A.W.
Powell
Mr D.M.
Sinclair
1
Mrs M.M.
Bray
1
Ms M.L.
Archibald
Dr A.R.
Williams
Full Board 6 6 6 6 6
Audit and Risk Committee 5 4 4 5 5
Remuneration Committee 6 2 2 6 6
Nomination Committee 2 2 2 2 2
1.
Mr D.M. Sinclair and Mrs M.M. Bray were invited to attend 4 Audit and Risk Committee Meetings and 2 Remuneration Committee Meetings
In accordance with the Code, all members of the Board
offer themselves for re-election each year as described in
the notice for the upcoming 2022 AGM and as set out in the
Directors’ Report on page 22 and in the Notice of Meeting
on page 94.
DIVISION OF RESPONSIBILITIES
The Code requires that there should be a clear division of
responsibilities between the roles of CEO and Chairman,
both roles being separate and distinct. The Chairman
is responsible for leading the Board and ensuring its
effectiveness, including the Board’s decision making
process, building a constructive relationship between
Executive and Non-Executive Directors, and, for fostering
open debate with an appropriate balance of challenge
and support. The CEO is responsible for leading the
development and execution of long term strategies of the
business and has specific responsibilities in relation to all
matters to do with property purchase and sale.
THE EXECUTIVE DIRECTORS
Day-to-day management is delegated to the Executive
Directors with focus on major transactions, business growth,
strategy, cash management and control. There is regular
communication with the NEDs in order to keep them
informed about the Group’s operations. This is done via a
schedule of regular Board meetings throughout the year
supplemented by ad hoc meetings as needed to address
specific matters arising.
The Group has seven Senior Managers reporting to the
Executive Directors. There are six core departments
– Accounts, Property Management, Property Trading,
Rent, IT and Administration – with staff reporting
either to the Property Managers and/or directly to the
ExecutiveDirectors.
THE NON-EXECUTIVE DIRECTORS
The role of the NEDs, as described in their letters of
appointment, is to bring independent and objective
judgement and scrutiny to all matters before the Board
and its committees. During the appointment process steps
are taken to confirm that they will have the time needed to
meet their responsibilities to the Group.
Throughout the year the NEDs hold meetings periodically
without the Executive Directors including meetings to
discuss remuneration of the Executive Directors and to
meet with the external auditor to discuss the audit of the
Annual Report and Accounts.
The Code requires at least half the Board, excluding
the Chairman, should be independent NEDs. For the
purpose of the code, on appointment as a NED and on
appointment as Chairman, Mr A.W. Powell was considered
to be independent and Ms M.L. Archibald is deemed to
be an independent NED. Dr A.R. Williams is a NED but he
is not considered to be independent for the purposes of
theCode.
At present the Board does not intend to appoint any
Director to fulfil the role of SID, given the limited size of the
Board, but may decide to do so in the future.
OUR GOVERNANCE FRAMEWORK
The Directors recognise their accountability as a Board to
the shareholders for the effective stewardship of the Group
and its strategy, operations, governance and control. In this
the Board are supported by three committees whose roles
and current composition are:
Corporate Governance (Continued)
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GOVERNANCE
THE NOMINATION COMMITTEE
This Committee is responsible for reviewing the balance
of experience, skills and knowledge on the Board, for
succession planning and recommending any appointments
to strengthen the Board’s expertise and for managing
any re-appointments as needed. Due to the small size of
the Board all members of the Board are members of the
Nomination Committee.
THE AUDIT AND RISK COMMITTEE
This Committee is responsible for monitoring Mountview’s
accounting policies and processes, audit arrangements
and for reviewing the risk management framework. It is
also responsible for the clarity and completeness of the
Company’s disclosure to shareholders. The Committee is
comprised of all the NEDs, including the Chairman.
THE REMUNERATION COMMITTEE
The Committee is comprised of all the NEDs, including the
Chairman, and is responsible for both setting remuneration
policy and for the implementation of that policy as regards
the Executive Directors. NED remuneration is proposed by
the Executive Directors and determined by the Board.
Further detail on the Terms of Reference of these
Committees can be found on the Company’s website
(www.mountviewplc.co.uk). Reports of their activities
follow later in this Annual Report and Accounts on
pages34to 53.
RISK MANAGEMENT AND INTERNAL
FINANCIAL CONTROL
The Board has overall responsibility for risk management
and the Audit and Risk Committee is specifically charged
with the governance of the risk management, internal
control and audit processes. The Board has carried out
a robust assessment of the principal risks, as well as
considering emerging risks faced by the Group which
are set out on pages 11 and 12 and more detail on the
function of the Audit and Risk Committee is set out on
pages 36 to 39.
Details of the Company’s financial risk management
objectives and policies are included in Note 3 to the
Consolidated Financial Statements on pages 63 and 64.
An ongoing process for identifying, evaluating and
managing the significant operational risks faced by the
Group was in place throughout the period from 1 April 2021
to the date of approval of the Annual Report and Accounts.
The effectiveness of this process is reviewed annually by
theBoard.
The Directors are responsible for establishing and
maintaining the Group’s system of internal financial control.
Internal control systems in any group are designed to
identify, evaluate and manage risks faced by the Group
and meet the particular needs of the Group and the risks
to which it is exposed. By their nature such systems can
provide reasonable but not absolute protection against
material misstatement or loss. As noted on page 38, the
Group does not have a dedicated internal audit function.
The key procedures which the Directors have established
with a view to providing effective internal financial control
are as follows:
Identification of business risks – The Board is responsible
for identifying the major business risks, as well as
emerging risks, faced by the Group. The principal risks and
uncertainties faced by the Group are set out in the Review
of Operations on pages 11 to 13 together with mitigating
factors for each risk.
Management structure – The Board has overall
responsibility for the Group and, as described on page 31,
there is a formal schedule of matters specifically reserved
for decision by the Board.
Corporate accounting – Responsibility levels are
communicated throughout the Group as part of the
corporate accounting procedures. These procedures set out
authorisation levels, segregation of duties and other control
procedures.
Quality and integrity of personnel – The integrity
and competence of personnel is ensured through high
recruitment standards, the regular day to day contact
between the Executive Directors and staff, and close Board
supervision.
Monitoring – Internal financial control procedures are
monitored and reviewed by the Board as a whole. These
reviews embrace the provision of regular information to
management, and monitoring of performance and key
performance indicators.
The Board is satisfied that the control procedures are
adequate to provide accurate information and safeguard
the assets of the Group.
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34
Report of the
Nomination Committee
MEETINGS
Committee Member
Meetings
Attended
Meetings
eligible to
Attend
Mr D.M. Sinclair – Chair 2 2
Mrs M.M. Bray 2 2
Ms M.L. Archibald 2 2
Mr A.W. Powell 2 2
Dr A.R. Williams 2 2
All the Directors of the Company are members of the Nomination Committee.
Dear Shareholder,
I am pleased to present the Nomination Committee report which sets out its role and activities during the year.
HOW THE NOMINATION COMMITTEE OPERATES
The Board considers that given its size, it would be unnecessarily burdensome to establish a separate Nomination
Committee that did not include the entire Board and believes that this enables all Directors to be kept fully informed of
any issues that arise. The committee and the Board recognise that this means that of the five members only one is an
independent NED which is not in accordance with Provision 17 of the Code (see Corporate Governance Report page 30)
but consider, that this is an appropriate and pragmatic alternative approach given the size of the Board.
The Nomination Committee met twice during the year ended 31 March 2022, supplemented by informal meetings and
discussions. Only the members of the Nomination Committee have the right to attend meetings, but we may invite other
Executives or advisers to attend all or part of any meeting as appropriate.
ROLE OF THE NOMINATION COMMITTEE
The main roles and responsibilities of the Nomination Committee are set out in its terms of reference, which are reviewed
annually and are available on the Group’s website. These responsibilities include assisting the Board in discharging its
responsibilities relating to the composition and make-up of the Board and its committees, succession planning, the
endorsement of Directors for re-election at the AGM and, when needed, the appointment of additional Directors.
The Board believes in the benefit of having a broad range of skills and backgrounds and the need to have a balance of
experience, independence, diversity - including gender, and knowledge of the Group and its Board of Directors. These
matters are taken into account during recruitment but ultimately we look to appoint the best candidate for the role on the
basis of their merit and ability taking into account the needs of the Group, including the skills needed to support delivery of
the Group’s strategic objectives and to ensure the effective functioning of the Board now and in the future.
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GOVERNANCE
PROCESS FOR BOARD APPOINTMENTS
PROCESS FOR BOARD APPOINTMENTS
No new appointments to the Board were made during 2021/22.
The Nomination Committee has a formal appointment process in place that embraces the principles described above and
would be used should the need for a new appointment be identified. The key steps in the process are:
• The Nomination Committee considers the skills and experience that it believes are needed for the Group to function
effectively, taking account of the skills of the existing Board members and those of external advisers that the Board
needs to draw on from time to time.
• Where a particular skill set is believed to be in continuous demand then the Nomination Committee will evaluate
the balance of the skills currently on the Board in order to identify a specification of the personal attributes, skills and
capabilities and experience needed, including, but not limited to, the skill set that prompted this evaluation.
• Should it be appropriate to filling the vacancy to look for an external candidate, then an independent external search
consultant will be appointed, the needs of the appointment and the recruitment process discussed and agreed.
• The process, including interviews and evaluation will be followed in conjunction with the external consultant.
• The conclusion of the process would be a recommendation to the Board.
DIVERSITY
As at 31 March 2022, the Group had one female Executive Director, Mrs Marie Bray, who has been on the Board since 2004,
and one female Non-Executive Director, Ms Mhairi Archibald, who has been on the Board since July 2014. Female Board
membership represented 40% of the Board. The Group has 7 Senior Managers (who are not Directors), 3 of whom are
female. Of our 24 employees and 5 Directors, 11 are male and 18 are female.
Given the size of the Company and the Board and the infrequency of appointments, the Company has no formal policy
on diversity or inclusion for either the Board or other members of staff, although the Board keeps this under review. The
Company is committed to equal opportunities for all and recruitment and selection of new Directors is strictly on the basis
of merit and ability.
ACTIVITIES OF THE COMMITTEE
The Nomination Committee, and related Board discussions, covered the following matters:
• the composition of the Board and the Board’s committees
• the balance of skills, experience and knowledge required by the Board and its committees and the business as a whole
• the re-election of all the Directors at the AGM in 2022, taking into account their contribution and time commitments
• the review of the Group’s approach to and provisions for succession planning, taking account of the length of service of
each director, developing staff, diversity and gender balance and Board evaluation. These matters are discussed in the
Directors’ Report and the Corporate Governance Report.
As a result of their work, the Nomination Committee is satisfied that the Board has the necessary experience, knowledge
and skills to lead the Group and deliver on its strategy. The Group have also developed succession planning arrangements
to cover for both the short term absence of a Director, or the situation where we are seeking a new Director – when the
process outlined above would be followed.
BOARD AND COMMITTEE EVALUATION
The Directors consider that the small size of the Group and Board does not warrant a formal performance evaluation
process. However, performance of the Directors is evaluated on an ongoing basis by the Board. This is a matter continually
under review.
D.M. Sinclair
Chairman of the Nomination Committee
5 July 2022
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36
Report of the Audit and
Risk Committee
MEETINGS
Committee Member
Meetings
Attended
Meetings
eligible to
Attend
Mr A.W. Powell - Chair 5 5
Ms M.L. Archibald 5 5
Dr A.R. Williams 5 5
Non Member
Mr D.M. Sinclair
1
4 4
Mrs M.M. Bray
1
4 4
1.
Mr D.M. Sinclair and Mrs M.M. Bray were invited to attend 4 Audit and Risk Committee meetings.
Dear Shareholder,
I am pleased to present the Audit and Risk Committee Report for the year ended 31 March 2022. The Board considers
that I have recent and relevant financial experience as recommended under provision 24 of the Code as it applies to the
Company for the financial year under review. In line with the Code, the Audit and Risk Committee (the Committee) as a
whole is deemed to have competence relevant to the sector in which the Company operates.
The Committee and the Board recognises that, given the size and composition of the Board, only one NED is independent.
Also as Chairman of the Board I have a dual role. It has been determined that while it is not in accordance with Provision
24 of the code (see Corporate Governance Report on page 30) this is a pragmatic alternative approach given the size of
theboard.
The Committee plays a vital role in ensuring that the interests of the shareholders are protected and in assisting the Board
in discharging its responsibilities by challenging the integrity of the financial statements, in reviewing the effectiveness of
the internal controls systems within the Group and in considering the scope of the annual audit and the nature and extent
of any permitted non-audit work that may be undertaken by the external auditor.
This report details the activities of the Committee that were undertaken during the year to 31 March 2022.
ROLE OF THE AUDIT AND RISK COMMITTEE
The Committee’s principal roles and responsibilities, as set out in its terms of reference (which can be found on the Group’s
website at www.mountviewplc.co.uk), include:
• monitoring the integrity of the Group’s financial statements;
• reviewing the tone and content of the Interim Report, the Annual Report and Accounts and any associated regulatory
news announcements;
• reviewing the Group’s internal financial controls and risk management systems;
• assessing the performance and independence of the external auditor, including the application of our policy on non-
audit services;
• selecting the external auditor and making appropriate recommendations through the Board to permit shareholder
consideration at the Annual General Meeting;
• assessing the effectiveness of the external audit process;
• acting as a conduit between the Board and the external auditor;
• considering the need for an internal audit function;
• reviewing any incidents of whistleblowing occurring within the Group and ensuring adequate review and
investigation;and
• reporting to the Board on how it has discharged its responsibilities.
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GOVERNANCE
ACTIVITIES OF THE COMMITTEE
During the year the Committee met on five occasions, including meetings prior to the issue of the preliminary and interim
results to review audit planning and conduct and then audit recommendations, where appropriate, and consider any
significant issues arising from the audit and review process. At a meeting in March 2022 the Committee agreed the external
audit terms of engagement and the auditor’s scope, proposed approach and fees for the annual audit for the financial year
1 April 2021 to 31 March 2022.
Outside of the formal meeting programme, as Committee chairman I stay in contact with key individuals involved in the
Company’s governance, including the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), the external audit
lead partner and other external advisers.
The Committee is satisfied that controls over accuracy and consistency of information presented in the Annual Report and
Accounts are robust and has confirmed to the Board that it believes this Annual Report and Accounts are fair, balanced and
understandable.
In addition as they covered topics relevant to corporate reporting, the Committee participated in the tendering processes
carried out to appoint advisers to assist in our TCFD disclosures (Achill were the successful consultancy) and our ESEF
tagging and reporting (Tax Systems were the successful consultancy).
KEY AREAS FORMALLY DISCUSSED AND REVIEWED
Principal Responsibilities of the Committee
Key areas formally discussed and reviewed by
the Committee during the year
REPORTING AND EXTERNAL AUDIT
• Monitoring the integrity of the Company’s financial statements and all
formal announcements relating to the Company’s financial performance,
reviewing financial reporting judgements contained within them
• Making recommendations to the Board regarding approval of the external
auditor’s remuneration, terms of engagement, monitoring independence,
objectivity and effectiveness
• Results, commentary and announcements
• Key accounting policy judgements, including valuations
• Impact of future financial reporting standards
• Going concern and long term viability
• External auditor effectiveness
• External auditor management letter, containing observations arising from
the annual audit leading to recommendations for financial reporting
improvement
• External auditor’s remuneration and audit tender frequency (last tendered
in 2017)
VALUATIONS
• Monitoring and reviewing the valuation process for the investment
properties
• Valuer competence and effectiveness
• Annual report on the effectiveness of the valuer which considers the quality
of the valuation process and judgement
• Challenge the Executives in respect of both the independent external
valuations and Directors’ valuations across the entire property portfolio
RISK AND INTERNAL CONTROL
• Reviewing the principal risks and uncertainties as well as emerging risks,
including those that could affect solvency or liquidity, future performance
and its business model
• Reviewing the risk management disclosures on our approach to risk in the
Annual Report and Accounts
• Maintenance of the Risk Register including identifying and then making a
robust assessment of the principal risks facing the Group
• Horizon scanning for emerging risks
• Review of risk disclosures as part of review of accounts
OTHER
• Reviewing the committee’s Terms of Reference and monitoring its
execution
• Considering the impact of hybrid working on the system of internal
controls
• Considering compliance with legal requirements, accounting standards,
the Listing Rules and Disclosure Guidance and Transparency Rules
• Reviewing the whistle-blowing policy and operation and related policies
including the anti-bribery and gift policy
• Considering the need for an internal audit function
• Reviewing the effectiveness of internal controls
• Reviewed and confirmed the Terms of Reference; execution and
effectiveness monitored through a progress table and externally sourced
questionnaires.
• Reviewed the impact on controls of staff working from home, including IT
controls over remote access.
• Reviewed processes for monitoring new relevant regulation, notably for
TCFD and ESEF including discussion with external advisers
• Review of whistle-blowing arrangements as set out in the staff manual.
Confirmation from the CFO that there have been none during the year
• Reviewed the need for an internal audit function
• Reviewed reports by the Executive Directors, senior managers, including IT,
and the external auditors on the operation of controls
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EXTERNAL AUDIT
Audit tenure: – Following best practice and in accordance with its Terms of Reference, the Committee annually reviews
the audit requirements of the Company and suitability of the auditor. BSG Valentine (UK) LLP has been the Group’s auditor
since 2007 and was re-appointed following a formal tender process in 2017. Current UK regulations require rotation of the
lead audit partner every five years, a formal tender of the audit every ten years and a change of auditor every twenty years.
As in 2021 the 2022 Audit Report will be signed off by Gary Allen; this will be his third year as Senior Statutory Auditor.
Objectivity and independence: – These aspects are critical to the integrity of the Group’s audit. Prior to the planning
meeting the Committee reviewed the auditor’s own policies and procedures concerning objectivity and independence,
including reviewing their Transparency Report found on their website. We also confirmed that the auditor’s evaluation and
remuneration processes did not contain incentives for cross-selling.
Planning and contact: – Prior to the audit the Committee, together with the Executive Directors, met with the external
auditor BSG Valentine to review their proposals for the audit and agreed their terms of engagement, their proposed
approach and their fees for the audit. The Committee is confident that appropriate plans were put in place to carry out an
effective and high quality audit. BSG Valentine re-confirmed to the Committee during the meeting that they maintained
appropriate internal safeguards to ensure their independence and objectivity.
Effectiveness of the external audit process: – The Committee appraised BSG Valentine’s performance and independence
by ensuring there is a comprehensive engagement letter in place, assessing their audit plan, including the quality and
consistency of their team and then assessing the quality of their reports. The Chairman was in contact with the audit
team, during the audit to discuss progress and any issues arising from the audit. In addition, we received feedback from
Mountview’s finance team who noted that BSG Valentine were professional and constructive while maintaining their
independence and robustness when carrying out their work.
At the conclusion of their work the Committee met with the external auditor without the Executive Directors present to
discuss their audit findings, including recommendations for financial reporting improvement and their management letter
containing observations arising from the annual audit. The discussion also covered the application of materiality and
adjusted and unadjusted audit differences. No such differences were identified during the current or prior year’s audit.
Re-appointment: – Based on their review the Committee believes BSG Valentine remains effective in its role and,
BSG Valentine having indicated their willingness to be reappointed as the Group’s external auditor, the Committee
has recommended to the Board that they be appointed for another year. A resolution to this effect will be proposed at
theAGM.
Non-audit services: – The Group’s policy requires that all non-audit fee work that falls within the category of allowed
services under the applicable Ethical Standards is reported to the Committee. The Committee can confirm that this policy
was adhered to and that no such services were provided by BSG Valentine during the year. Accordingly the Committee has
concluded that the auditor’s objectivity and independence were safeguarded. The fees paid to BSG Valentine are shown in
Note 6 to the Accounts.
INTERNAL AUDIT
The need for a dedicated internal audit function was reviewed by the Committee during the year and was not felt to be
necessary given the size and relatively simple structure of the Group and its operations, the close day to day involvement of
the Executive Directors and the internal control procedures in place. This is kept under regular review. The Committee has
the power to commission assurance work from time to time as it sees fit.
Report of the Audit and
Risk Committee
(Continued)
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GOVERNANCE
VIABILITY STATEMENT AND GOING CONCERN
The Committee provides advice to the Board on the form and basis underlying both the going concern and the longer-
term viability statement, including the potential impact of climate, inflation and interest rate changes. The Committee are
satisfied that while these remain relevant factors that, at the date of signing this report, a reverse scenario with the potential
to seriously damage the validity of either statement is unlikely.
Therefore the Committee concluded that it remains appropriate for the financial statements to be prepared on a going
concern basis and recommended the viability statement to the Board.
The Company’s going concern statement can be found on page 26. The viability statement can be found on page 13.
SIGNIFICANT ISSUES CONSIDERED IN RELATION TO THE FINANCIAL STATEMENTS
Significant issues and accounting judgements are identified by the finance team and the external audit process and are
considered and reviewed by the Committee. The significant issues considered by the Committee in respect of the year
ended 31 March 2022 are set out in the table below:
Issues How the issues were addressed
Climate related
risks
Following the implementation of the TCFD reporting requirements, the Committee in conjunction with our
Climate Working Group (see TCFD disclosures page 16) explored scenarios that could lead to enhanced
exposure to the Company from the impact of both transition and physical risks. This work included exploring
whether the effect of the impact of such risks could lead to a material impact on the accounts that met the
criteria for being considered a liability, or contingent liability. As a result of the work the Committee and the
Climate Working Group considered that at this point the exposures were all at a level that could be readily
met within current operating budgets and equally did not meet the recognition criteria. As a result the
Committee concluded that currently no adjustment to the accounts for climate related matters was needed,
though equally recognized that changes in legislation or a rapidly worsening climate – notably warming might
change this picture. This matter is therefore being kept under regular review by both the Committee and the
Climate Working Group. Finally, as noted above, the Committee considered the impact of climate on the
going concern and viability statements.
Valuation of investment
property portfolio
The Committee discussed the valuation with the valuers independently of management. This provided the
opportunity for the valuers to explain the process they follow to value the portfolio and for the Committee to
challenge the key assumptions. On the basis of this discussion the Committee concluded that the valuations
were independent and an appropriate basis for the year-end financial accounts.
Net realisable value of the
trading property portfolio
The Committee’s consideration of this aspect focused on the more recent purchases which have the greatest
risk and included reviewing the processes used by the property team to assess values and hence consider the
need for a provision. On the basis of these discussions the Committee was satisfied that the valuation was in
line with the accounting policy for trading properties, and there was no need for anyprovision.
The Committee also considered a number of other judgements made by management, none of which were material in the
context of the Group’s results or net assets.
KEY ISSUES FOR 2022/23
The Committee is always looking at ways to strengthen its support around governance to ensure that the Company’s
communications and processes are in line with good practice in this area. For 2022/23 this will continue to include
monitoring evolving best practice under the Code and other regulations. In particular for 2022/23 this will include the
changes in the Listing Rules to accommodate reporting on diversity and any changes to the regulatory environment
following the Government’s response to the BEIS consultation on Restoring trust in audit and corporate governance –
whether this be through the Code, primary or secondary legislation or through any oversight body (for example the Audit,
Reporting and Governance Authority (ARGA), the new regulator to replace the FRC).
A.W. Powell
Chairman of the Audit and Risk Committee
5 July 2022
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Remuneration Report
MEETINGS
Committee Member
Meetings
Attended
Meetings eligible
to Attend
Ms M.L. Archibald – Chair 6 6
Mr A.W. Powell 6 6
Dr A.R. Williams 6 6
Non Member
Mr D.M. Sinclair
1
2 2
Mrs M.M. Bray
1
2 2
1.
Mr D.M. Sinclair and Mrs M.M. Bray were invited to attend part of 2 Remuneration Committee meetings and were not present for discussion concerning
the process of determining their awards or the amount of those awards.
Dear Shareholder,
On behalf of the Remuneration Committee and the Board, I am pleased to introduce our 2022 Remuneration Report for
which we are seeking your support at our AGM on 10 August 2022.
ROLE OF THE REMUNERATION COMMITTEE
The goal of the Remuneration Committee is to independently formulate and apply remuneration bases that align the
interests of our Executive Directors with those of our shareholders, and are fair and transparent in execution, as well as
being in accordance with the approved remuneration policy.
The role of the Remuneration Committee is set out in our terms of reference which can be found on the Company’s website
at www.mountviewplc.co.uk. The Remuneration Committee has reviewed these terms of reference and confirmed that
they remain appropriate.
ACTIVITIES OF THE COMMITTEE
The Remuneration Policy applying to this report was approved by a majority vote in favour of the policy at the AGM held on
12 August 2020 and effective from that date.
The main work of the Remuneration Committee in the current year has been:
• The application of this policy in the determination of the Executive Directors’ awards in the context of the ongoing
circumstances presented by the Covid-19 pandemic but in recognition that working life is now returning to pre
pandemic normal with minor modifications, and
• The review of the remuneration policy – as described below and in the following report.
REVIEW OF THE REMUNERATION POLICY
Notwithstanding that the current remuneration policy is due to expire during 2023, following our observations during the
pandemic and also in response to comments from shareholders, the Remuneration Committee concluded that it would be
appropriate to re-balance the total remuneration between salary and short term incentive (STI) and also to reconsider the
CFO remuneration as a percentage of the CEO’s. This is described more fully in the main body of this report. Accordingly
the Remuneration Committee decided to carry out a full review of the remuneration policy, and will be asking shareholders
to approve the new remuneration policy, incorporating the rebalancing, at the AGM on 10 August 2022.
Our review was carried out in conjunction with FIT Remuneration Consultants LLP (FIT) and is described in more detail in the
main body of the report. FIT, who were appointed by the Remuneration Committee, provide no other services to the Group
and has no other connection with the Company or any of its directors. During the initial discussions prior to engaging FIT,
the Remuneration Committee satisfied itself that FIT demonstrated the necessary depth of knowledge for the agreed role
and objectivity in providing answers to questions posed during that discussion. FIT’s role was to help design the process to
be followed and to provide expert input and comment on the areas that needed consideration in the policy and the wider
Remuneration Report. They also reviewed the final draft of the Remuneration Report prior to publication. The total fees
paid to FIT for the financial year for their assistance were £9,810 plus VAT.
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GOVERNANCE
EXECUTIVE DIRECTORS’ AWARDS
The Remuneration Committee maintain the view that companies which have been regarded as within the peer group
over the last few years were in real estate sub-sectors that were being severely impacted by Covid-19, reducing their
comparability and usefulness. The Remuneration Committee did take note of data from this group but again we have
placed less weight on it than in prior years, applying our own discretion when reaching decisions.
During the financial year a supreme effort was made by Mountview’s teams in recovering day to day business to include
all functions of the business, of note being the ability to revert to a normal level of inspections, repair and maintenance
programmes to properties and be able to pursue rent arrears with the legislative backing that was stalled during the
pandemic. The Mountview (excluding the Executive Directors) staff were awarded salary increases of approximately 10% in
recognition of their further adaptation to the standing down of pandemic related limitations midway through the 2021/2022
year.
Each changing phase of the pandemic, presented new sets of challenges to not just the staff, but also to the Executive
Directors who led the process, including taking decisions on when to relax and when to tighten processes for the protection
of staff and other stakeholders. Their diligence and decision taking and the skills and dedication of our staff has ensured
that despite the challenges faced Mountview was able to continue to operate smoothly throughout the year.
In reviewing the bonus figures for the year, the Remuneration Committee has adopted the approach used in prior years of
taking into account the financial metrics of the Group (primarily profit before tax), non-financial factors and, where relevant,
peer group and market benchmarks and trends.
Specifically when looking at the performance of the Executive Directors we have been mindful of both their contribution
to ensuring that operations and the various transitions we have faced during the year ran smoothly, and also the drivers
behind the fall in profits during the year. We have referred in prior years, and elsewhere in this Annual Report and Accounts,
to the role of chance and external factors outside the role or control of the Executive Directors when it comes to the cost of
properties sold and thus gross margin, but in the current year there were also two additional factors. The first was that we
took account of the effect of managing the catch-up of the maintenance backlog that arose during the pre-vaccine phase
of Covid-19 (£1M) and also the role of the revaluation change as computed by Allsops which was also £1M down on 2021,
and is something that is outside the control of the Executive Directors. Using our discretion when taking these factors into
account as part of our consideration of the financial metrics the Remuneration Committee, agreed to hold the total of salary
and short term incentive steady year on year.
Applying these principles to the year under review the bonus awards for the CEO and CFO were set at £479,000 and
£330,000 respectively.
The Remuneration Committee has also agreed to an increase in Executive Director salaries but as in previous years this
percentage increase, based on the rebalanced packages, is lower than the increase for Mountview’s staff.
REGULATORY CHANGES
In carrying out their work during the year, the Remuneration Committee’s members have continued to have regard to the
changing regulatory environment around remuneration. In our Remuneration Report in 2021 in light of our recognition
of the Code and legislation aimed at greater transparency and disclosure of remuneration practices, we again include
presentation of the table showing the percentage change in remuneration of Directors and employees.
We are grateful to our Executive Directors and their continuing efforts to deliver the best results to shareholders and other
stakeholders in line with the Company’s strategy. I am also thankful for the valuable contributions of my fellow Remuneration
Committee members throughout the year.
M.L. Archibald
Chairman, Remuneration Committee
5 July 2022
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REMUNERATION POLICY REVIEW
OBJECTIVES OF THE REVIEW
Whilst the Remuneration Committee considered that the existing remuneration policy has served the Company and its
shareholders well, the Remuneration Committee has taken the opportunity to consider carefully the appropriate structure of
the components of the remuneration packages of our Executive Directors, and the total remuneration levels in the context
of the nature of operations and risks faced by the Group. In addition to the Remuneration Committee’s own deliberations,
recent feedback and comments received from advisers and shareholders have informed the process.
In the conduct of the review process and the updated policy we have sought to reflect the characteristics outlined in
Provision 40 of the Code as follows:
Clarity – we sought to engage with major shareholders during the review. The new policy with reasons for changes
adopted and suggestions not taken up have been discussed with our shareholders and directors.
Simplicity – as discussed further below, we have retained the simplicity of the current policy avoiding artificial or immaterial
metrics.
Risk –the risk environment of the Group was at the heart of our review which was aimed at ensuring that the policy reflected
but did not add to that environment as could be the case with, for example, misaligned metrics that could encourage
inappropriate risk taking.
Predictability – the Short-Term Incentive (STI) arrangements lead to a predictable range of outcomes.
Proportionality – the policy is designed to lead to awards that blend the objectivity of financial metrics and subjectivity
involved in assessing non-financial performance.
Alignment to culture – the principles of rewarding individual performance and thus contribution to Group results are
reflected in remuneration structures throughout the Group.
OVERVIEW OF THE REVIEW
The Executive Directors have led the Company as it has delivered very good results despite the adversity faced, including
almost two years of Covid-19 lockdown and the change from office based working to home based and hybrid working.
These results continue to flow through to dividends to the benefit of all shareholders. These results have been delivered by
applying a long standing strategy and stable business model and operations that reflect this strategy. The maturity of these
aspects of the business mean that, in the Remuneration Committee’s view, the inherent risk of the operations is lower than
it has been in the past and lower than for many other quoted companies. The Remuneration Committee’s main conclusion
from reviewing the current structure was that it would be appropriate to alter the components and balance of the Executive
Directors’ remuneration packages to better reflect this risk profile – and notably to adjust the weighting of remuneration
from bonus to salary whilst broadly maintaining the level of total remuneration. Further the Committee also reviewed
the relative balance of CEO to CFO remuneration with reference to similar situations where the CFO handled multiple
responsibilities. The resulting proposals are described in more detail below.
In developing the proposals set out in this report, the Remuneration Committee, informed by detailed consultation with,
and research by, FIT and in their role as our employment lawyers responsible for our employment agreements, review of
proposals by Winckworth Sherwood LLP, and through consultation with the Concert Party and other major shareholders
looked at the mix between fixed (salary) and variable (STI) remuneration and also at the relative balance of remuneration
between the Executive Directors. While employees were not specifically consulted as a part of the review, the Remuneration
Committee did take into account the general pay and conditions that apply to the staff which are determined by the
Executive Directors with whom they work closely on a day to day basis. Following discussion and the research and feedback
from advisors and shareholders, the Remuneration Committee considered that the remuneration packages awarded to our
Executive Directors should be rebalanced as follows:
1. The mix of salary and other fixed remuneration to variable remuneration could be shifted from the current split of 55%
fixed and 45% variable to a level in the region of 75% fixed: 25% variable.
Remuneration Report (Continued)
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GOVERNANCE
2. Based on research by FIT, it is apparent that in line with other Chief Financial Officers in the FTSE where they have
responsibilities in addition to the finance function the CFO’s relative remuneration level has fallen behind these peers.
The findings showed that for this peer group, particularly where there were multiple responsibilities rather than just a
doubling up of responsibilities, the balance of CFO to CEO remuneration was close to 80%. Given that, in addition to
her role as Chief Financial Officer, Marie Bray is also the Group’s Company Secretary, and, in addition, she has aspects to
her responsibilities that elsewhere would be within the remit of a Chief Operating Officer, the Remuneration Committee
concluded that Marie Bray’s total remuneration award, which is currently approximately 71.5% of Chief Executive Officer
Duncan Sinclair’s total remuneration award, should be increased to 80% of Duncan Sinclair’s total remuneration award to
reflect this peer group.
REBALANCED REMUNERATION PACKAGES
As a result of the consultation and analysis carried out, the Remuneration Committee is proposing to rebalance the
remuneration packages of the executives as follows:
2021/22 Actuals £000 2021/22 Rebalanced £000
Salary
£000
Benefits
£000
Bonus
£000
Total
£000
Salary
£000
Benefits
£000
Bonus
£000
Total
£000
D.M. Sinclair £591 £27 £479 £1,097 £800 £27 £270 £1,097
M.M. Bray £450 £0 £330 £780 £650 £0 £225 £875
PROPOSED POLICY CHANGES
As a result of the consultation and analysis carried out, the Remuneration Committee is also proposing a number of policy
changes:
• those relating to the components of Executive and Non-Executive Directors’ remuneration are noted in the tables
below - for example altering the maximum percentage of base salary that may be awarded as bonus to retain the
total remuneration at broadly the levels shown in the rebalanced figures noted above, and
• other changes following our review to clarify the position on aspects that are typically found in remuneration policies
but which in the past the Remuneration Committee has considered were not relevant to the Company’s current
circumstances – notably in relation to malus and clawback and post-employment shareholding requirements
In addition, where needed, minor editorial changes have been made without altering the substance of the previous policy.
The Remuneration Committee continues to believe that due to the nature and stability of the Group’s business the
situations in which these latter aspects of the policy may be applicable are likely to be remote. Nonetheless for the
avoidance of doubt, and to reflect the growing expectations around clarity on these matters and market good practice the
Remuneration Committee has included its position on these matters in the policy.
The Remuneration Committee is now seeking the wider shareholder approval of the proposed new structure within the
policy at the AGM on 10 August 2022.
KEY PRINCIPLES OF REMUNERATION POLICY
The Company’s Remuneration Policy continues to be designed to attract, motivate and retain the right talent for our
business in order that it can continue to deliver excellent returns for shareholders.
As noted above the Remuneration Committee believes that the weighting of components making up the total
remuneration should be amended, and that within this new mix that there should be a clear link between the Group’s
financial results and the short-term incentive element of the remuneration of Executive Directors. In order to achieve this,
the remuneration policy provides for the Executive Directors’ total remuneration to comprise the following elements: base
salary, a short-term incentive award, pension and benefits. All elements are considered annually by the Remuneration
Committee, most notably its review focuses on base salary and the short-term incentive award. Base salary is reviewed with
regard to seniority, inflationary increases, personal performance, changes in responsibilities, market themes and peer group;
whereas the short-term incentive award is reviewed and aligned to:
1. the Group’s financial metrics (primarily profit before tax);
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2. the Executive Director’s personal contribution; and
3. non-financial corporate goals to build for long term sustainable success, including management development,
succession planning and the maintenance of a robust business infrastructure.
At the same time the Remuneration Committee takes account of the pay and conditions for our staff and reviews market
comparators to ensure that reward is appropriate. The Remuneration Committee considers the relative performance of
the Group’s results in relation to its peers in determining where appropriate benchmarks should be set (i.e. upper quartile,
median or lower quartile). The Remuneration Committee then considers these factors in the context of historical and
current performance when applying its judgement and discretion in the process for determining awards.
Given that the Executive Directors (particularly the Chief Executive Officer) have significant personal holdings of the
Company’s shares that were not acquired through a share based incentive scheme, the Remuneration Committee does not
consider that a long-term incentive share scheme (LTI) or other similar share schemes are appropriate and that no post-
employment holding period is required in respect of these holdings. Similarly, the Remuneration Committee considers
that in view of these factors and the experience and long service of the Executive Directors, that the additional protections
typically provided by malus and clawback provisions are unlikely to be required at this time. Nevertheless, to reflect market
practice the Remuneration Committee has developed specific terms to cover these points and included them in the revised
policy (see below). The use of an LTI, a post-employment holding period and clawback provisions will be further reviewed if
other Executive Director appointments are made in the future.
The Executive Directors do not receive a pension, but the Remuneration Policy still provides the ability to provide for a
pension contribution in the event that new appointments are made in the future. Pension contributions are made on behalf
of other employees working at the Company.
USE OF METRICS WHEN CONSIDERING THE SHORT TERM INCENTIVE
As noted elsewhere in this Annual Report and Accounts, the Group’s main drivers of their principal source of revenues
and profit arising in the current year – sales on vacant possession – are beyond the control of the Group or the Executive
Directors. The timing of vacant possession, the location and thus market price of properties disposed of, the original
purchase date of the properties sold and the appetite for the properties that are sold are all factors beyond the Group’s
control.
It is also the case that at a transaction level, the net proceeds are a function of the historic and current astuteness,
judgement and experience brought to bear when purchasing properties, setting reserve prices and the pricing of those
sales being made by private treaty – all of which are ongoing activities firmly in the remit of the Executive Directors and
their teams.
The Remuneration Committee considered that, while firmly of the view that there should be a clear link between the
Group’s financial results and the short term incentive element of the remuneration of the Executive Directors, the use of
metrics that attempted to link Executive Director’s performance with the current year’s profits would be unreliable and, at
best, be artificial and, at worst, be misleading. Consequently, the Remuneration Committee concluded that the current
approach continued to be appropriate.
MALUS AND CLAWBACK PROVISIONS
Malus and clawback provisions operate in respect of the annual bonus to protect shareholder interests and reduce the risk
of inappropriate risk taking. Events or actions that could trigger the activation of malus and clawback provisions would be:
• material misstatement of audited financial results;
• an error in calculating a performance condition;
• risk management failure;
• any circumstances justifying summary dismissal from office or employment with the Group (including but not limited to
dishonesty, fraud or breach of trust);
• significant reputational damage;
• corporate failure or insolvency.
Remuneration Report (Continued)
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GOVERNANCE
SHAREHOLDING REQUIREMENT AND POST EMPLOYMENT HOLDING PERIOD
The Company has no shareholding requirement for Executive Directors in view of their current substantial personal
holdings, although the Remuneration Committee reserves the right to introduce such a requirement should new Executive
Directors be appointed in the future.
Similarly, given that the shareholdings of the current Executive Directors have been acquired other than as a result of
share-based incentive schemes the Remuneration Committee does not believe that any post employment holding period
is appropriate in relation to these shares. However, should such a share based incentive scheme be introduced for current
or new Executive Directors then the Remuneration Committee reserves the right to review this policy in relation to shares
acquired through share based incentive schemes and to apply a post employment holding period, should it consider it
appropriate to do so, based on a review of prevailing practice at that time.
DISCRETION
The Remuneration Committee considers annually both salary and the STI awards which operate in accordance with the
policy tables on pages 45 and 46. Consistent with market practice, the Remuneration Committee retains discretion over a
number of areas relating to the operation and administration of these awards. This includes the ability within the policy to:
• adjust targets and/or set different measures or weightings for the applicable awards, if the Committee determines that
either for the current year external developments support modification of the terms or determines that the original
conditions are no longer appropriate or do not fulfil their initial purpose for the longer term. In either case such changes
would be explained in the directors’ remuneration report and, if appropriate, be discussed with our major shareholders
• adjust the outcomes under the plan to ensure these are aligned to and are reflective of the underlying business aims
and performance of the Group, or in response to external factors that affect the Group’s performance in a manner
consistent with other listed companies.
In particular, in relation to the STI awards the areas of discretion include, but are not limited to, determining the
participation of new Executive Directors, the award levels, setting or amending performance measures and targets,
treatment of awards on a change of control, treatment of awards for leavers and adjusting awards (e.g. as a result of a
change in capital structure).
REMUNERATION POLICY DETAIL TABLES
The tables below summarise the main elements of the remuneration packages of the Executive Directors, the key features
of each element, their purpose and linkage to strategy.
EXECUTIVE DIRECTORS
Component Proposed new policy Changes from old policy
BASE SALARY
Purpose and link to strategy To provide a competitive level of non-variable remuneration and major
element of total remuneration aligned to the Company’s peer group and
reflective of the seniority of the post, the experience of the Executive and
the known and expected contribution to the Group’s strategy.
Explains that the salary
element provides a more
significant part of total
remuneration.
Operation Base salaries are reviewed each year with regard to the seniority of
the individual, changes to responsibilities, performance, peer group
developments and inflationary increases taking into account the
Consumer Prices Index, published annual remuneration surveys and the
average change in workforce salaries, excluding promotion, merit or
similar components of workforce rises, if this is lower than the published
inflation indices. While all the factors above are taken into account, the
percentage annual increase will normally not exceed the small cap upper
quartile figure increase for executives as reported annually by FIT or other
reputable provider of survey data.
Places a cap on the
maximum annual
increases while retaining
the potential for lower
rates should external
indicators suggest this was
appropriate.
Opportunity Base salaries are fixed for each financial year and effective from 1 April
each year.
Unchanged
Performance metrics None Unchanged
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46
Component Proposed new policy Changes from old policy
PENSION
Purpose and link to strategy To attract and retain high quality Executives by providing income in
retirement.
Unchanged
Operation The Company would offer contributions to an approved defined
contribution pension scheme. The current Executive Directors do not
receive contributions under a pension scheme.
Clarifies that the current
Executive Directors do
not receive a pension
contribution.
Opportunity Contributions would be made at the rate applied to workforce pensions
and be based on base salary only. Contributions may be made at a higher
rate through salary sacrifice.
Unchanged
Performance metrics None Unchanged
BENEFITS
Purpose and link to strategy To aid the recruitment and retention of high quality Executives. Unchanged
Operation The Company provides private medical insurance, sick pay and life
assurance. Other non-pensionable benefits may be provided if the
Remuneration Committee considers it appropriate. The Remuneration
Committee reserves the discretion to introduce new benefits where it
concludes that it is appropriate to do so, having regard to the particular
circumstances and to market practice.
Introduces the flexibility to
add further benefits in line
with altered circumstances,
or market practice.
Otherwise unchanged.
Opportunity The benefits are fixed in relation to the Executive’s base salary. The
Remuneration Committee reviews the appropriateness of these benefits.
The value of benefits may vary from year to year depending on the cost
to the Company from third-party providers.
Unchanged
Performance metrics None Unchanged
SHORT TERM INCENTIVE
Purpose and link to strategy Incentive awards are to be aligned with Group financial performance and
reward personal contribution to results.
Unchanged
Operation Awards are reviewed each year with regard to the individual’s
performance and their contribution to the Group’s performance, financial
results and peer group comparators.
Unchanged
Opportunity Any award under this scheme will be set at a level that aligns the short-
term incentive award with the Group’s financial performance, while also
reflecting non-financial contributions and remaining comparable with
our peer group. The maximum percentage of base salary payable for an
award under this scheme is 100%.
Maximum reduced from
150% to 100% so that
in financial terms the
maximum is essentially
unchanged from the prior
policy
Performance metrics The Remuneration Committee considers financial metrics (currently
primarily profit before tax), other non-financial achievements and
corresponding movements within the peer group over the course of the
financial year under review.
Unchanged
Remuneration Report (Continued)
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47
Mountview Estates P.L.C. Annual Report and Accounts 2022
GOVERNANCE
NON-EXECUTIVE DIRECTORS
The policy on Non-Executive Directors’ fees is set out below:
Component Proposed new policy Changes from old policy
FEES
Purpose and link to strategy Non-Executive Directors receive a fee to cover their time and expenses
in attending Board, Committee and any other meetings that they are
required to attend over the year.
Non-Executive Directors may receive additional fees and expenses for
attending meetings not otherwise in the ordinary course of their duties,
or where additional effort is needed above that required by the terms of
their appointment.
Unchanged
Operation Fees are reviewed periodically by the Board with reference to the
expected time commitment and market level for such services
Non-Executive Directors are not entitled to any other incentives or
benefits beyond their fees and reimbursement for travel and related
business expenses reasonably incurred in performing their duties.
Unchanged
Opportunity The aggregate fees and any benefits of the Chairman and Non-Executive
Directors will not exceed the limit from time to time prescribed within the
Company’s Articles of Association for such fees, currently £250,000 p.a. in
aggregate.
Any increases in fee levels made will be appropriately disclosed in the
Annual Report.
Unchanged
Performance metrics None Unchanged
APPROACH TO RECRUITMENT REMUNERATION
When setting the remuneration package for a new Executive Director, the Remuneration Committee will apply the same
principles and policy as set out above. Depending on individual circumstances, the Remuneration Committee will consider
providing pension contributions and other long-term incentives appropriate to the individual and their responsibilities.
Base salary will be set at a level appropriate to the role and experience of the Executive Director being appointed. This may
include agreement on future increases up to a market rate, in line with increasing experience and responsibilities, subject to
good performance, where it is considered appropriate by the Remuneration Committee.
In relation to external appointments, the Remuneration Committee may structure a remuneration package that it considers
appropriate to recognise awards or benefits that may or will be forfeited on resignation from a previous position, taking
into account timing and valuation – and any other matters it considers relevant. The policy is that the maximum payment
under any such arrangement (which may be in addition to the normal variable remuneration) should be no more than the
Remuneration Committee considers is required to provide reasonable compensation to the incoming Executive Director.
In the case of an employee who is promoted to the position of Executive Director, it is the Company’s policy to honour pre-
existing award commitments (including awards, incentives, benefits and contractual arrangements) in accordance with their
terms to the extent that such pre-existing commitments are permitted by the Code.
Where any recruitment involves the agreed relocation of the individual, the Company may offer additional benefits and
meet some or all associated costs for periods that would be agreed by the Remuneration Committee on a case by case
basis.
Where an individual is appointed as a result of an acquisition, merger or other corporate event, the Company will honour
any legacy terms and conditions to the extent that such legacy terms are permitted by the Code.
Non-Executive Directors appointments will be made based on a Non-Executive Director agreement. Non-Executive
Directors’ fees, including those of the Chairman, will be set at a competitive market level, reflecting the experience of the
individual and the responsibility and time commitment of the role.
In all cases the Remuneration Committee will bear in mind the best interests of the Company.
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48
DETAILS OF DIRECTORS’ SERVICE CONTRACTS
EXECUTIVE DIRECTORS
Contract Date Unexpired Term Notice Period
Mr D.M. Sinclair 8 August 2002 No fixed term 12 months
Mrs M.M. Bray 1 April 2004 No fixed term 12 months
The Executive Directors’ service contracts contain provisions relating to matters such as salary, salary continuance in the
event of illness, holidays, life and medical insurance, etc. The Executive Directors’ service contracts can be terminated on 12
months’ notice by either party.
The Executive Directors are entitled to a compensation payment upon a change of control of the Company. Such
compensation payment (subject to the deduction of income and other taxes required by law and any other sums owed by
the Executive Director to the Company) is equal to the Executive Director’s annual gross remuneration as reported in the
Company’s last audited accounts. The Executive Directors’ contracts make no other provision for termination payments
other than for salary and benefits in lieu of notice.
Executive Directors are entitled to reasonable out of pocket expenses when on Company business.
NON-EXECUTIVE DIRECTORS
Contract Date Unexpired Term Notice Period
Ms M.L. Archibald 1 July 2020 12 months 1 month
Dr A.R. Williams 1 December 2021 29 months 1 month
Mr A.W. Powell 1 April 2021 21 months 1 month
Non-Executive Directors are only entitled to accrued fees due to them at the date of termination of their appointment and,
where appropriate, a payment in lieu of their contractual notice period.
OTHER MATTERS
The Remuneration Committee may make non-substantial amendments to the policy set out above.
In making its decisions, the Remuneration Committee shall take into account the conditions of the Group as a whole and
proposals as regards the general staff.
Lastly, the Remuneration Committee considers the views of investor bodies and shareholders. The Company seeks an
ongoing dialogue with shareholders on all matters of strategic importance – including remuneration.
POLICY REGARDING EXTERNAL APPOINTMENTS
Executive Directors are not actively encouraged to hold external directorships. Duncan Sinclair is a director of Sinclair
Estates Ltd. and Ossian Investors Ltd, companies which hold property assets in run-off. He is also a Trustee of The Sinclair
Charity and a Director of Sinclair Events Ltd.
Non-Executive Directors are appointed because of their skills and experience and it is accepted that they have other
commitments beyond Mountview. The Chairman keeps the availability of Non-Executive Directors under review to ensure
that they have the capacity to support the Company as required.
Remuneration Report (Continued)
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Mountview Estates P.L.C. Annual Report and Accounts 2022
GOVERNANCE
ILLUSTRATION OF POSSIBLE OUTCOME IN CEO AND CFO REMUNERATION £000s
At expectation*
Minimum**
Maximum***
CEO
CFO
Total
1,137
909
857
675
1,687
1,350
CEO
CFO
CEO
CFO
Base Salary Fixed Benefits
Variable
830
(73.0%)
280
(24.63%)
675
(74.26%)
234
(25.74%)
830
(96.85%)
27
(3.15%)
27
(2.37%)
675
(100.0%)
830
(49.2%)
830
(49.2%)
27
(1.6%)
675
(50.0%)
675
(50.0%)
* As noted earlier in the remuneration report, formal targets are not used in determining the short-term incentive awards, with the award being based on
year on year relative financial and non-financial performance and the Executive Director’s personal contribution which includes a mix of objective and
subjective measures. For the purposes of the ‘At expectation’ illustration we have assumed that the Short Term Incentive award would represent the same
proportion of the base salary as in 2021/22 using the rebalanced figures shown on page 43.
** Minimum is based on fixed remuneration consisting of projected annual salary for 2022/23 with fixed benefits but assuming no Short-Term Incentive award.
*** Maximum is based on fixed remuneration consisting of projected annual salary for 2022/23 with fixed benefits with the maximum Short-Term Incentive
award opportunity of 100% of base salary.
APPLICATION OF THE REMUNERATION POLICY
The Remuneration Committee starts its process by reviewing the market benchmarks for remuneration amongst the
Group’s peer group, with particular focus on any movements in salaries for the current year and recent Group performance.
The Remuneration Committee would then determine the appropriate level of base salary for the Executive Directors with
reference to these results, and as described above also considering relative performance against the peer group and other
market metrics where relevant. As the peer group population is recognised as becoming less reliable, the Remuneration
Committee has incorporated discretion to a greater degree in this financial year.
The Remuneration Committee sets the Executive Directors’ Short-Term Incentive award at a level to reflect the Group’s
financial performance while remaining comparable with our peer group. The award is referenced to the financial metrics of
the Group (primarily profit before tax) and also takes account of such other factors as the Remuneration Committee sees fit
such as
• Any other non-financial factors to be considered;
• The total remuneration of other peer group companies and movement in market benchmarks.
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50
ANNUAL REMUNERATION REPORT (AUDITED INFORMATION)
DIRECTORS’ TOTAL REMUNERATION SINGLE FIGURE TABLE
2022
Salary
£000
Benefits in
kind
1
£000
Total Fixed
Remuneration
2
£000
Bonus
3
£000
Total
£000
Executive
D.M. Sinclair 591 27 618 479 1,097
M.M. Bray 450 – 450 330 780
Non-Executive
4
A.W. Powell 102 – 102 – 102
M.L. Archibald 40 – 40 – 40
Dr A.R. Williams 40 – 40 – 40
1,223 27 1,250 809 2,059
1.
The Benefits in kind are as set out in the policy table.
2.
The current Executive Directors do not receive a pension contribution thus the Total Fixed remuneration comprises salary and benefits.
3.
The approach used for the bonus awards is described in the ‘Role of the Remuneration Committee’ note on page 41. The Company does not operate a LTI
scheme, and thus the bonus figures are the Total Variable Remuneration
4.
Commensurate with his role as Chairman Tony Powell’s salary was increased to £102k p.a. from 1 April 2021. The salary of both M.L. Archibald and
Dr A.R. Williams was increased to £40k p.a. from 1 April 2021
2021
Salary
£000
Benefits in
kind
1
£000
Total Fixed
2
Remuneration
£000
Bonus
3
£000
Total
£000
Executive
D.M. Sinclair 573 25 598 497 1,095
M.M. Bray 435 – 435 345 780
Non-Executive
A.W. Powell 99 – 99 – 99
M.L. Archibald 39 – 39 – 39
Dr A.R. Williams 39 – 39 – 39
1,185 25 1,210 842 2,052
1.
The Benefits in kind are as set out in the policy table.
2.
The current Executive Directors do not receive a pension contribution thus the Total Fixed remuneration comprises salary and benefits.
3.
The approach used for the bonus awards is described in the ‘Role of the Remuneration Committee’ note on page 41. The Company does not operate a LTI
scheme, and thus the bonus figures are the Total Variable Remuneration.
UNAUDITED INFORMATION
CEO SINGLE FIGURE
Bonus as % of
maximum bonus
*
CEO single figure of
total remuneration
£000
2022 D.M. Sinclair 54.00% 1,097
2021 D.M. Sinclair 57.82% 1,095
2020 D.M. Sinclair 53.69% 1,027
2019 D.M. Sinclair 52.96% 975
2018 D.M. Sinclair 56.70% 977
2017 D.M. Sinclair 68.67% 1,038
2016 D.M. Sinclair 88.18% 943
2015 D.M. Sinclair 55.56% 778
2014 D.M. Sinclair 53.33% 659
2013 D.M. Sinclair 53.33% 662
* Prior to 2017 the Remuneration Policy did not have a maximum for STI – so the bonus as a percentage of maximum is not formally computable. However,
for the purposes of comparison we have computed these percentages for earlier years as if the post 2020 policy applied.
Remuneration Report (Continued)
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Mountview Estates P.L.C. Annual Report and Accounts 2022
GOVERNANCE
CFO SINGLE FIGURE
Bonus as % of
maximum bonus
*
CFO single figure of
total remuneration
£000
2022 M.M. Bray 48.89% 780
2021 M.M. Bray 52.87% 780
2020 M.M. Bray 48.77% 729
2019 M.M. Bray 48.09% 692
2018 M.M. Bray 51.62% 692
2017 M.M. Bray 63.11% 730
2016 M.M. Bray 80.70% 661
2015 M.M. Bray 52.83% 546
2014 M.M. Bray 48.00% 473
2013 M.M. Bray 48.00% 473
* Prior to 2017 the remuneration policy did not have a maximum for STI – so the bonus as a percentage of maximum is not formally computable. However,
for the purposes of comparison we have computed these percentages for earlier years as if the post 2020 policy applied.
PERCENTAGE CHANGE IN REMUNERATION OF DIRECTORS AND EMPLOYEES
The percentage change in remuneration between 2020 and 2022 for the Directors and for all employees, excluding the
Directors, in the Group was:
2021-22 2020-21
Base
Salary
Taxable
Benefits
Annual
Bonus
Base
Salary
Taxable
Benefits
Annual
Bonus
Executive Directors
D.M. Sinclair 3.14% 8.00% -3.62% 3.24% 0.00% 11.19%
M.M. Bray 3.45% N/A -4.35% 3.33% N/A 12.01%
Non-Executive Directors
A.W. Powell 3.03% N/A N/A 0.00% N/A N/A
M.L. Archibald 2.56% N/A N/A 0.00% N/A N/A
Dr A.R. Williams 2.56% N/A N/A 0.00% N/A N/A
Employee population 9.58% -16.75%* -1.97% 4.02% -1.98%* 32.75%
* The 2021/22 staff taxable benefits have reduced as, when the recent car leases ended, a change has been made from conventional cars to hybrid cars. This switch
attracts a lower taxable benefit leading to a reduction in car benefits of 20.00% (2021 - -2.6%), other staff benefits reduced by 8% (2021 – increase of 0.6%).
PERFORMANCE GRAPH
The graph illustrates the Company’s performance compared to a broad equity market index over the past ten years. As
the Company is a constituent of the FTSE 350 Real Estate Index, that index is considered the most appropriate form of
broad equity market index against which the Company’s performance should be plotted. Performance is measured by Total
Shareholder Return as represented by share price performance and dividend.
The graph looks at the value of £100 invested in Mountview Estates P.L.C. compared to the value of £100 invested in the
FTSE All-Share Index and the FTSE 350 Real Estate Index on 31 March each year.
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Mountview Estates P.L.C. Annual Report and Accounts 2022
52
10 YEAR TSR RETURN – ANNUAL CHART
0
50
100
150
200
250
300
350
450
400
Mountview Estates – Total Return Index
FTSE 350 SS Real Estate £ – Total Return Index FTSE All Share Index – Total Return Index
31/03/2012
31/03/2013
31/03/2014
31/03/2015
31/03/2016
31/03/2017
31/03/2018
31/03/2019
31/03/2020
31/03/2021
31/03/2022
RELATIVE IMPORTANCE OF SPEND ON PAY
The difference in actual expenditure between 2021/22 and 2020/21 on remuneration for all employees in comparison to
profit after tax and distributions to shareholders by way of dividend is set out in the tabular graphs below:
PROFIT AFTER TAX (£M)
4.01
2022
26.88
2021
30.89
DIVIDEND (£M)*
12.68
2022
28.27
2021
15.59
TOTAL EMPLOYEE PAY
0.13M
2022
4.56
2021
4.43
* The £28.27 million dividend in relation to 2022 includes £10.72 million as a special dividend paid on 28 March 2022
STATEMENT OF IMPLEMENTATION OF REMUNERATION POLICY IN THE CURRENT FINANCIAL YEAR
Executive Directors:
Following consultation with our advisers on the current trends in the market in relation to executive salary awards, with
effect from 1 April 2022 the basic salary of the CEO will be increased to £830k p.a. and the CFO to £675k p.a.
Non-Executive Directors:
The Board considered the fees payable to the Non-Executive Directors and approved increases from £102k to £105k for the
Chairman and from £40k to £41k for other Non-Executive Directors representing a 3% increase year on year.
Remuneration Report (Continued)
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Mountview Estates P.L.C. Annual Report and Accounts 2022
GOVERNANCE
DETAILS OF THE REMUNERATION COMMITTEE
During 2021/2022 the Remuneration Committee comprised three NEDs, including the Chairman who was independent
on appointment, and one independent NED. The Remuneration Committee and the Board recognize that this is not
in accordance with Provision 32 of the Code (see Corporate Governance Report page 30) however, given the size and
composition of the Board, believe that this alternative approach to the membership of the Remuneration Committee
ispragmatic.
STATEMENT OF VOTING AT GENERAL MEETING
At the Annual General Meetings held on 11 August 2021 and 12 August 2020, the Directors’ Remuneration Report and the
Directors’ Remuneration Policy received the following votes based on proxy forms from shareholders.
Resolution
Number of
shares
Voting
for %
Number of
shares
Voting
against %
Total votes
cast
Votes
withheld
Annual report on Remuneration (2021 AGM) 2,133,588 69.45 938,689 30.55 3,072,277 63
Remuneration Policy (2020 AGM) 2,130,737 69.43 938,149 30.57 3.068,886 0
As reported in a regulatory announcement on 11 February 2022: Following the 2021 AGM in August the Company identified
as far as possible those shareholders who did not support the various resolutions and attempted to engage with them to
seek their views. Some shareholders did not wish to engage. The Company remains committed to shareholder engagement
and will continue to offer to meet with shareholders to take into account their concerns and considerations in the future.
DIRECTORS’ INTERESTS IN SHARE CAPITAL*
The number of Ordinary Shares in the Company in which the Directors and their families were interested is as follows:
31 March
2022
31 March
2021
Ordinary Shares of 5p each
D.M. Sinclair including:
• beneficial holding of Sinclair Estates Limited of 54,165.
(Mr Sinclair is a Director of Sinclair Estates Limited.)
• non-beneficial holding of The Sinclair Charity of 58,117
(Mr Sinclair is a trustee of The Sinclair Charity.)
596,500 596,500
M.M. Bray 12,302 12,302
ML. Archibald 100 100
Dr A.R. Williams 61,810 62,312
* As noted on page 44 the Company does not operate any LTI or similar share schemes.
All the above interests are beneficial unless otherwise stated. There were no other changes in shareholdings during the year
and no changes between 31 March 2022 and the date of this report.
Ms. M.L. Archibald
Chairman of the Remuneration Committee
On behalf of the Board
5 July 2022
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54
Consolidated Statement
of Comprehensive Income
Notes
Year ended
31 March
2022
£000
Year ended
31 March
2021
£000
Revenue 4 66,010 65,730
Cost of sales 4 (25,144 ) (22,508 )
Gross profit 40,866 43,222
Administrative expenses (6,197 ) (5,865 )
Gain on sale of investment properties 13 53 –
Operating profit before changes in fair value of investment properties 34,722 37,357
Increase in fair value of investment properties 13 444 1,452
Profit from operations 35,166 38,809
Net finance costs 8 (298 ) (675 )
Profit before taxation 34,868 38,134
Taxation – current 9 (6,637 ) (6,966 )
Taxation – deferred 19 (1,349 ) (275 )
Taxation 9 (7,986 ) (7,241 )
Profit attributable to equity shareholders and total comprehensive income 26,882 30,893
Basic and diluted earnings per share (pence) 11 689.5 p 792.3 p
All the activities of the Group are classed as continuing.
The Notes on pages 58 to 74 are an integral part of these consolidated financial statements.
for the year ended 31 March 2022
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Mountview Estates P.L.C. Annual Report and Accounts 2022
FINANCIAL STATEMENTS
Consolidated Statement
of Financial Position
Notes
As at
31 March
2022
£000
As at
31 March
2021
£000
Assets
Non-current assets
Property, plant and equipment 12 1,546 1,606
Investment properties 13 25,451 25,574
Current assets
Inventories of trading properties 15 393,275 398,166
Trade and other receivables 16 1,326 1,417
Cash at bank 18 643 597
Total assets 422,241 427,360
Equity and liabilities
Capital and reserves attributable to equity holders of the Company
Share capital 21 195 195
Capital reserve 22 25 25
Capital redemption reserve 22 55 55
Other reserves 22 56 56
Retained earnings 23 393,155 394,540
Non-current liabilities
Long-term borrowings 18 19,200 20,600
Deferred tax 19 5,700 4,351
Current liabilities
Bank overdrafts and short-term loans 18 — 1,280
Trade and other payables 17 1,470 2,142
Current tax payable 2,385 4,116
Total liabilities 28,755 32,489
Total equity and liabilities 422,241 427,360
Approved by the Board on 5 July 2022.
D.M. Sinclair M.M. Bray
Chief Executive Director
Company no: 00328020
The Notes on pages 58 to 74 are an integral part of these consolidated financial statements.
for the year ended 31 March 2022
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56
Consolidated Statement
of Changes in Equity
Changes in equity for year ended
31 March 2021 Notes
Share
capital
£000
Capital
reserve
£000
Capital
redemption
reserve
£000
Other
reserves
£000
Retained
earnings
£000
Total
£000
Balance as at 1 April 2020 195 25 55 56 379,243 379,574
Profit for the year 30,893 30,893
Dividends 10 (15,596 ) (15,596 )
Balance at 31 March 2021 23 195 25 55 56 394,540 394,871
Changes in equity for year ended
31 March 2022
Balance as at 1 April 2021 195 25 55 56 394,540 394,871
Profit for the year 26,882 26,882
Dividends 10 (28,267 ) (28,267 )
Balance at 31 March 2022 23 195 25 55 56 393,155 393,486
The Notes on pages 58 to 74 are an integral part of these consolidated financial statements
for the year ended 31 March 2022
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Mountview Estates P.L.C. Annual Report and Accounts 2022
FINANCIAL STATEMENTS
Consolidated Cash Flow
Statement
Notes
Year ended
31 March
2022
£000
Year ended
31 March
2021
£000
Cash flows from operating activities
Profit from operations 35,166 38,809
Adjustment for:
Depreciation 12 60 64
(Gain) on disposal of investment properties 13 (53 ) –
(Increase) in fair value of investment properties 13 (444 ) (1,452 )
Operating cash flows before movement in working capital 34,729 37,421
Decrease /(Increase) in inventories 4,891 (6,097 )
Decrease in receivables 16 91 2,259
(Decrease) in payables 17 (672 ) (2,688 )
Cash generated from operations 39,039 30,895
Interest paid 8 (298 ) (675 )
Income tax (8,368 ) (6,300 )
Net cash inflow from operating activities 30,373 23,920
Investing activities
Proceeds from disposal of investment properties 13 620 –
Net cash inflow from investing activities 620 –
Cash flows from financing activities
(Repayment) of borrowings (2,349 ) (10,116 )
Equity dividend paid (28,267 ) (15,596 )
Net cash (outflow) from financing activities (30,616 ) (25,712 )
Net Increase)/(Decrease) in cash and cash equivalents 377 (1,792 )
Opening cash and cash equivalents 266 2,058
Cash and cash equivalents at end of year 18 643 266
The Notes on pages 58 to 74 are an integral part of these consolidated financial statements.
for the year ended 31 March 2022
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58
1. GENERAL INFORMATION
The Company is a public limited liability company incorporated, domiciled and registered in England .
The address of its registered office is: 151 High Street, Southgate, London N14 6EW . The Company website is:
www.mountviewplc.co.uk.
The Company has its premium listing on the London StockExchange.
These consolidated financial statements have been approved for issue by the Board of Directors on 5 July 2022.
2. ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to allthe years presented, unless otherwise stated.
(A) BASIS OF PREPARATION
The Group financial statements were prepared under the historical cost convention, as modified by the revaluation of
investment properties.
The Group financial statements were prepared in accordance with UK adopted international accounting standards.
The Company has elected to prepare its Parent Company financial statements in accordance with UK GAAP. These are
presented on pages 80 to 87.
The preparation of financial statements in conformity with UK adopted international accounting standards requires
management to make judgements, estimates and assumptions that affect the application of accounting policies.
The areas involving a higher degree of judgement or complexity or areas where assumptions and estimates are significant
to the Consolidated Financial Statements are disclosed in Note 2(R) ‘Critical Accounting Judgements and Key Areas of
Estimation Uncertainty’.
(B) BASIS OF CONSOLIDATION
The Group’s financial statements incorporate the results of Mountview Estates P.L.C. and all of its subsidiary undertakings
made up to 31 March each year.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
Control is recognised when the Group is exposed to, or has rights to, variable returns from its investment in the entity and
has the ability to affect these returns through its power over the relevant activities of the entity.
On acquisition, the identifiable assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at
the date of acquisition. The purchase method has been used in consolidating the subsidiary financial statements.
All significant inter-company transactions, balances and unrealised gains on transactions between Group companies are
eliminated on consolidation within the consolidated accounts.
Consistent accounting policies have been used across the Group.
Notes to the Consolidated
Financial Statements
for the year ended 31 March 2022
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FINANCIAL STATEMENTS
2. ACCOUNTING POLICIES CONTINUED
(C) SEGMENT REPORTING
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks
and returns that are different from those of other business segments.
The Group has identified two such segments as follows:
• Property Trading
• Property Investment
The segments are UK based. More details are given in Note 5 on page 65.
(D) INCOME TAX
The charge for current tax is based on the results for the year as adjusted for items which are non-assessable or disallowed.
It is calculated using rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from
differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax
base used in the computation of taxable profit. In principle, deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the
temporary difference arises from the initial recognition (other than in a business combination) of other assets and liabilities
in a transaction, which affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where
the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax is calculated using the tax rates and laws that have been enacted or substantively enacted by the reporting
date that are expected to apply when the asset or liability is settled. Deferred tax is charged or credited in the income
statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
(E) REVENUE
Revenue includes proceeds from sales of properties, rental income from properties held as trading stock, investment and
other sundry items of revenue before charging expenses.
Rental income is recognised on a straight-line and accruals basis over the rental period.
Sales of properties are recognised on legal completion as in the Directors’ opinion this is the point at which control passes
to the buyer.
(F) DIVIDEND DISTRIBUTION
Dividend distribution to the Company’s shareholders is recognised as an expense in the Group’s financial statements in the
period in which the dividends are approved.
(G) INTEREST EXPENSE
Interest expense for borrowings is recognised within ‘finance costs’ in the income statement using the effective interest rate
method. The effective interest method is a method of calculating the financial liability and of allocating the interest expense
over the relevant period.
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60
2. ACCOUNTING POLICIES CONTINUED
(H) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes
expenditure that is directly attributable to the acquisition of the item. Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance
costs are charged to the income statement during the financial period in which they are incurred.
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful economic
life of that asset using the straight-line method as follows:
Freehold property – 2% per annum
Fixtures and fittings and office equipment – 20% per annum
Computer equipment – 25% per annum
The assets’ residual values and useful lives are reviewed, andadjusted if appropriate, at the end of each financial year.
Anasset’s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its
estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying
amount. These are included in the IncomeStatement.
(I) IMPAIRMENT OF ASSETS
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets
that are subject to amortisation or depreciation are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use. Forthe purpose of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows (cash generating units). Anyimpairment is recognised in the Income Statement
in the year in which it occurs.
(J) INVESTMENT PROPERTY
Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the
companies in the consolidated group, is classified as investment property.
Investment property is measured initially at its cost including related transaction costs.
After initial recognition, investment property is carried at fair value. Fair value is based on active market prices adjusted, if
necessary, for any difference in the nature, location or condition of the specified asset. If this information is not available the
Group uses alternative valuation methods such as recent prices or less active markets or discounted cash flow projections.
Subsequent expenditure is included in the carrying amount of the property when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs
and maintenance costs are charged to the income statement during the financial period in which they are incurred.
Gains or losses arising from changes in the fair value of the Group’s investment properties are included in the Income
Statement of the period in which they arise.
(K) INVENTORIES – TRADING PROPERTIES
These comprise residential properties, all of which are held for resale, and are shown in the financial statements at the
lower of cost and estimated net realisable value. Cost includes legal fees and commission charges incurred during
acquisition together with improvement costs. Net realisable value is the net sale proceeds which the Group expects on
sale of a property in its current condition with vacant possession. The analysis of the Group revenue as at 31 March 2022
is on page64.
Notes to the Consolidated
Financial Statements
(Continued)
for the year ended 31 March 2022
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FINANCIAL STATEMENTS
2. ACCOUNTING POLICIES CONTINUED
(L) PENSION COSTS
The Group operates a stakeholder contribution pension scheme for employees. The annual contributions payable are
charged to the Income Statement. The Group has no further payment obligations once the contributions have been paid.
(M) FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group has become a party
to the contractual provisions of the instrument. Trade and other receivables, trade and other payables, and cash and cash
equivalents are measured at amortised cost.
(N) BANK BORROWINGS
Loans are recorded at fair value at initial recognition and thereafter at amortised cost under the effective interest method.
(O) CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments
with original maturities of three months or less, and bank overdrafts.
(P) LEASING
Group as lessor
The Group’s non-cancellable operating leases relate to regulated tenancies under which tenants have the right to remain
in a property for the remainder of their lives. It is therefore not possible to estimate timing of future minimum payments in
respect of these regulated tenancies, hence these are not separately disclosed in the financial statements.
Group as lessee
Rentals payable under leases for assets considered to be of low value are charged to the Consolidated Statement of
Comprehensive Income on a straight-line basis over the term of the lease.
(Q) ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
AND INTERPRETATIONS
Standards, interpretation and amendments effective in the current financial year have not had a material impact on the
Group financial statements.
Standards, interpretations and amendments issued but not yet effective are not expected to have a material impact on the
Group financial statements.
(R) CRITICAL ACCOUNTING JUDGEMENTS AND KEY AREAS OF ESTIMATION UNCERTAINTY
Going concern
The Directors are required to make an assessment of the Group’s ability to continue to trade as a going concern.
The two main considerations were as follows:
1. Refinancing of banking facilities
The Group has a £20 million (2021: £20 million) revolving loan facility with HSBC Bank. The termination date of this facility is
November 2023.
The Group has re-negotiated a £60 million (2021: £60 million) revolving loan facility with Barclays Bank. The termination date
of this facility is March 2027.
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62
2. ACCOUNTING POLICIES CONTINUED
2. Covenant compliance
The core facility has two covenants, Consolidated Gross Borrowings as a percentage of Consolidated Net Tangible Assets,
and the ratio of Consolidated PBIT to Consolidated Gross Financing Costs. The Group has remained well within both of
these covenants during the year.
On the basis of the above, the Directors have a reasonable expectation that the Group and the Company have adequate
resources to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Distinction between investment and trading property
The Group considers the intention at the outset when each property is acquired in order to classify the property as either
an investment or a trading property. Where the intention is to either trade the property or where the property is held for
immediate sale upon receiving vacant possession within the ordinary course of business, the property is classified as trading
property. Where the intention is to hold the property for its long-term rental yield and/or capital appreciation, the property
is classified as an investment property.
Investment properties
In considering the values attributable to the investment portfolio, the following factors are taken into consideration:
• sales of properties within the Group’s portfolio during the preceding 12 months
• sales of properties in the same district whenever the information is available
• published market research concerning the performance of the property market in this region and district
• factors affecting individual properties and units in relation to value, and factors in the district which might affect the
values of individual properties and units.
The valuation of the portfolios was made in accordance with the requirements of the RICS Valuation – Global
Standards2022.
Carrying value of trading stock
The Group’s residential trading stock is carried in the balance sheet at the lower of cost and net realisable value.
As the Group’s business model is to sell trading stock on vacancy, net realisable value is the net sales proceeds which
the Group expects on sale of a property with vacant possession. Given that by applying our buying criteria all stock is
purchased at a discount to the value with vacant possession the Directors consider the risk of impairment to be low and
accordingly the Group has no NRV provision.
Inventory expected to be settled in more than 12 months
The Board estimates that inventory of £18.3 million will be settled within the next 12 months, with the remaining inventory
value expected to be settled in more than 12 months. This estimation is based on the average cost of sales of inventory
over the last three year period. Mountview’s business, both historic and current, has involved the purchase for sale of
residential properties subject to regulated tenancies, such properties being sold when vacant possession is obtained.
Regulated tenancies by their nature are not for any specific period of time and in most cases they do not become vacant
until the death of the tenant.
It is difficult to predict with any certainty the time at which Mountview’s inventory properties might become vacant.
Notes to the Consolidated
Financial Statements
(Continued)
for the year ended 31 March 2022
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Mountview Estates P.L.C. Annual Report and Accounts 2022
FINANCIAL STATEMENTS
3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
1. FINANCIAL RISK FACTORS
The Group’s activities expose it to a variety of financial risks: market risk (including price risk and cash flow risk), credit
risk and liquidity risk. The Group’s policies on financial risk management are to minimise the risk of adverse effect on
performance and to ensure the ability of the Group to continue as a going concern.
The financial risks relate to the following financial instruments: trade receivables, cash and cash equivalents, trade and other
payables and borrowings.
(A) MARKET RISK
The Group is exposed to market risk through interest rates and availability of credit.
Price risk
• The Group is exposed to property price and property rental risk.
Cash flow and fair value interest rate risk
• As the Group has no significant interest bearing assets, its income and operating cash flows are substantially
independent of changes in market interest rates.
Long-term borrowings
• Borrowings issued at variable rates expose the Group to cash flow interest rate risk. The Group’s cash flow and fair value
interest rate risk is constantly monitored by the Group’s management.
The Board is confident that based on the historical performance of the Group, the finance costs are sufficiently covered by
the rental income.
The Group has two covenants covering Consolidated Gross Borrowings as a percentage of Consolidated Net Tangible
Assets, and the ratio of Consolidated PBIT to Consolidated Gross Financing Costs. These covenants were complied with
during the financial year.
(B) CREDIT RISK
Exposure to credit risk and interest risk arises in the normal course of the Group’s business.
The Group has no significant concentration of credit risk. Credit risk arises from cash and cash equivalents as well as
credit exposures with respect to rental customers, including outstanding receivables. The Directors are of the opinion that
credit risk is minimal due to the low level of trade receivables relative to the Balance Sheet totals. Regulated tenants are
incentivised through the benefit of their tenancy agreement to avoid default on their rent.
Lifetime tenancies are generally at low or zero rent and hence suffer minimal credit risk.
(C) LIQUIDITY RISK
The Group’s liquidity position is monitored daily by management and is reviewed quarterly by the Board of Directors.
TheGroup ensures that it maintains sufficient cash for operational requirements at all times. The nature of its business
isvery cash generative from its gross rents and sales of trading properties.
In adverse trading conditions, new acquisitions can be minimised, and as a consequence will reduce the gearing level
andimprove the liquidity. A summary table with the majority of financial liabilities is presented in Note 18.
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64
3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES CONTINUED
(D) CAPITAL RISK MANAGEMENT
The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern. The Group
monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total debt and equity.
2022
£000
2021
£000
Total borrowings 19,200 21,880
Less cash (643) (597)
Net borrowings 18,557 21,283
Total equity 393,486 394,871
Net borrowings plus equity 412,043 416,154
Gearing ratio 4.5% 5.1%
4. ANALYSIS OF REVENUE AND COST OF SALES
All revenue arises in England and Wales.
1. Rental income from tenancies of occupied properties. The income is recognised on an accruals basis.
2. Sale of stock properties. This is recognised on the date of legal completion.
2022
£000
2021
£000
Revenue
Gross sales of properties 46,819 46,672
Gross rental income 19,191 19,058
66,010 65,730
Cost of sales
Cost of properties sold 19,281 17,807
Property expenses 5,863 4,701
25,144 22,508
Gross profit
Sales of properties 27,538 28,865
Net rental income 13,328 14,357
40,866 43,222
Sales of properties included in the Market Valuation undertaken by Allsop LLP as at 30 September 2014. (See Note
15 on page 70.)
Allsop
Valuation
£000
Sales Price
£000
Value of the Properties included in the Market Valuation as at 30 September 2014
and sold during the year ended 31 March 2022 22,275 36,812
Properties purchased since 30 September 2014 and sold during the year ended 31 March 2022 – 10,007
Gross sales of properties – 46,819
The Market Values were on the basis that properties would be sold subject to any then existing leases and tenancies.
Notes to the Consolidated
Financial Statements
(Continued)
for the year ended 31 March 2022
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FINANCIAL STATEMENTS
5. SEGMENTAL INFORMATION
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks
and returns that are different from those of other business segments. The Group monitors its operations in the following
segments:
2022 2021
Property
trading
£000
Property
investment
£000
Group
£000
Property
trading
£000
Property
investment
£000
Group
£000
Revenue 65,476 534 66,010 65,216 514 65,730
Operating profit before changes in fair
value of investment properties 34,379 343 34,722 36,997 360 37,357
Finance costs (298) – (298) (675) – (675)
Profit/(loss) after tax 27,609 (727) 26,882 29,425 1,468 30,893
Assets 396,523 25,718 422,241 401,526 25,834 427,360
Liabilities 23,012 5,743 28,755 28,087 4,402 32,489
Fixed assets
Capital expenditure – – – – – –
Depreciation 60 – 60 60 4 64
Revenue of the property investment segment is derived entirely from rental income.
Head office costs have been allocated and included within the Group’s two operating segments. The Group’s two main
business segments operate within England and Wales.
6. PROFIT FROM OPERATIONS
2022
£000
2021
£000
The operating profit is stated after taking into account:
Depreciation of tangible fixed assets 60 64
Gain on disposal of investment property 53 –
Auditors’ remuneration
– the audit of the Parent Company and Consolidated Financial Statements 53 50
– the audit of the Company’s subsidiaries pursuant to legislation 15 15
Operating expenses for investment properties 16 11
And after crediting:
– net rental income 13,328 14,357
– administrative charges to related companies (Note 24) 28 35
The average monthly number of employees during the year was as follows:
2022 2021
Office and management 29 29
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66
7. STAFF COSTS (INCLUDING DIRECTORS)
2022
£000
2021
£000
Wages and salaries 3,983 3,888
Social security costs 516 491
Pension costs 57 54
4,556 4,433
Directors’ remuneration
Total Directors’ remuneration including salary, bonuses and benefits in kind amounted to: 2,059 2,052
The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on page 50.
The Company contributes 3% of the total annual gross salaries and bonuses of each employee, excluding Directors, to a
Stakeholder Pension Scheme.
8. FINANCE COSTS
2022
£000
2021
£000
Interest on bank overdrafts and loans 298 675
9. INCOME TAX EXPENSE
2022
£000
2021
£000
(a) Analysis of charge in the year
Current tax: UK Corporation Tax 19% (2021: 19%) 6,637 6,966
Deferred tax: Current year 25% (2021: 19%) 1,349 275
Taxation attributable to the Company and its subsidiaries 7,986 7,241
(b) Factors affecting income tax expense
The charge for the year can be reconciled to the profit per the income statement as follows:
Profit on ordinary activities before taxation 34,868 38,134
Profit on ordinary activities multiplied by rate of tax19% (2021: 19%) 6,624 7,245
Expenses not deductible for tax (5) (3)
Depreciation in excess of capital allowances (1) (1)
Increase in deferred tax due to increase in tax rate 1,368 –
Taxation attributable to the Company and its subsidiaries 7,986 7,241
The UK budget announcement on 3 March 2021 included an increase in the UK’s main corporation tax rate to 25%, which is
now substantively enacted. The deferred tax liability has been calculated at this rate, resulting in an additional charge, due
to the change in tax rate, of £1.368m.
10. DIVIDENDS
On 16 August 2021, a dividend of 225p per share (2020: 200p per share) was paid to the shareholders. On 28 March 2022
a dividend of 500p per share (2021: 200p per share) which included a special dividend of 275p per share was paid to the
shareholders. This resulted in total dividends paid in the year of £28.27 million (2021: £15.6 million).
In respect of the current year, the Directors propose that a final dividend of 250p per share will be paid to the shareholders
on 15 August 2022. This dividend is subject to approval by the shareholders at the Annual General Meeting and has not
been included as a liability in these financial statements.
The proposed final dividend for 2022 is payable to all shareholders on the Register of Members on 8 July 2022. The total
estimated final dividend to be paid is £9.75million.
Notes to the Consolidated
Financial Statements
(Continued)
for the year ended 31 March 2022
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FINANCIAL STATEMENTS
11. EARNINGS PER SHARE
2022
£000
2021
£000
The calculations of earnings per share are based on the following profits and number of shares:
Net profit for financial year (basic and fully diluted) 26,882 30,893
Weighted average number of Ordinary Shares for basic and fully diluted earnings per share 3,899,014 3,899,014
Basic and diluted earnings per share 689.5p 792.3p
The Company has no dilutive potential Ordinary Shares.
12. PROPERTY, PLANT AND EQUIPMENT
Freehold
property
£000
Fixtures
and fittings
£000
Computer
equipment
£000
Total
£000
Cost
At 1 April 2021 2,671 41 24 2,736
Additions – – – –
Disposals – – – –
At 31 March 2022 2,671 41 24 2,736
Depreciation
At 1 April 2021 1,072 41 17 1,130
Charge for the year 53 – 7 60
On disposals – – – –
At 31 March 2022 1,125 41 24 1,190
Net book value
At 31 March 2021 1,599 – 7 1,606
At 31 March 2022 1,546 – – 1,546
Property, plant and equipment are located within England and Wales.
Freehold
property
£000
Fixtures
and fittings
£000
Computer
equipment
£000
Total
£000
Cost
At 1 April 2020 2,671 41 24 2,736
Additions – – – –
Disposals – – – –
At 31 March 2021 2,671 41 24 2,736
Depreciation
At 1 April 2020 1,019 41 6 1,066
Charge for the year 53 – 11 64
On disposals – – – –
At 31 March 2021 1,072, 41 17 1,130
Net book value
At 31 March 2020 1,652 – 18 1,670
At 31 March 2021 1,599 – – 1,606
Property, plant and equipment are located within England and Wales.
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68
13. INVESTMENT PROPERTIES
2022
£000
2021
£000
Fair value at 1 April 2021/(2020) 25,574 24,122
Subsequent expenditure – –
Disposals (567) –
Increase in fair value during the year 444 1,452
At 31 March 2022/(2021) 25,451 25,574
The sales of investment properties are not included in the Group Revenue.
During the financial year there was one property disposal (2021: £nil). In 2022 the difference between the sales price of
£620,000 and the market fair value of £567,000, resulted in a gain of £53,000. This is shown as a separate line item in the
Consolidated Statement of Comprehensive Income for the year ended 31 March 2022.
The investment properties represent less than 5% of the Group’s portfolio.
LOUISE GOODWIN LIMITED AND A.L.G. PROPERTIES LIMITED
The companies’ freehold properties were valued at 31 March 2022 by an external valuer Jeremy Mayhew-Sanders MRICS
of Allsop LLP. The valuations are done in accordance with the requirements of the RICS Valuation-Global Standards 2022.
These properties are all held for investment and Market Values are on the basis that the properties would be sold subject
to any existing leases and tenancies. The valuer’s opinion of Market Value was derived using comparable recent market
transactions on arm’s length terms.
This is the sixth year in which Mr Mayhew-Sanders has valued the properties for accounts purposes but the tenth
consecutive year in which Allsop LLP has undertaken the work. Allsop LLP has undertaken work for Mountview Estates P.L.C.
for longer than 20 years including acquisitions, disposals and valuations.
In relation to Allsop LLP’s preceding financial year, the proportion of the total fees payable by Mountview Estates P.L.C. to
the total fee income of Allsop LLP was less than 5% which is regarded by the RICS as negligible.
Notes to the Consolidated
Financial Statements
(Continued)
for the year ended 31 March 2022
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Mountview Estates P.L.C. Annual Report and Accounts 2022
FINANCIAL STATEMENTS
13. INVESTMENT PROPERTIES CONTINUED
The aggregate Market Value of the Group’s interests in its investment portfolios was:
LOUISE GOODWIN LIMITED
• Freehold: £22,032,000 (Twenty two million and thirty two thousand pounds).
A.L.G. PROPERTIES LIMITED
• Freehold: £3,419,000 (Three million, four hundred and nineteen thousand pounds).
Information relating to the basis of valuation of investment properties and the judgements and assumption adopted by
management is set out in Note 2(R) “Critical accounting judgements and key areas of estimation uncertainty”.
A revaluation of £444,000 has arisen on valuation of investment properties to Market Value as at 31 March 2022 (2021:
increase of £1,452,000). This is shown as a separate line item in the Consolidated Statement of Comprehensive Income.
The Directors are of the opinion that the Fair Value equates to the Market Value.
Investment properties are the only assets of the Group measured at fair value. They are categorised as Level 3 within the fair
value hierarchy of IFRS13.
14. INVESTMENTS
FIXED ASSET INVESTMENTS
These represent the cost of shares in the following wholly owned subsidiary undertakings, which are incorporated and
operate in England and Wales. Their results are consolidated in the accounts of the Group, for the period during which they
are subsidiary undertakings.
Principal activity
Cost
2021
2022
£000
Hurstway Investment Company Limited
Registered Office: Mountview House, 151 High Street,
Southgate, London, N14 6EW
Registered in England 344034
Property Trading 1
Louise Goodwin Limited
Registered Office: Mountview House, 151 High Street,
Southgate, London, N14 6EW
Registered in England 691455
Property Investment 15,351
A.L.G. Properties Limited
Registered Office: Mountview House, 151 High Street,
Southgate, London, N14 6EW
Registered in England 508842
Property Investment 2,924
18,276
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70
15. INVENTORIES OF TRADING PROPERTIES
2022
£000
2021
£000
Residential properties 393,275 398,166
The Company’s freehold and long leasehold interests in its portfolio of properties held as Trading Stock were valued on
30September 2014 at £665,866,266 (Six hundred and sixty-five million, eight hundred and sixty-six thousand, two hundred
and sixty-six pounds) by an External Valuer, Martin Angel FRICS of Allsop LLP. The Trading Stock is carried in the Accounts
at the lower of cost and net realisable value and such is the discipline we exercise when purchasing a property that, when
influenced by the effects of property price inflation over an extended period of years, the valuation showed a spectacular
increase. The individual values were not finely accurate, even though we have no reason to doubt the overall total of the
valuation. Thus the valuation is not a useful tool for running the business because we are always going to await vacant
possession, and no perceived uplift in value can justify selling a tenanted property. The nature of our business and the
rulesand conventions under which we operate place no obligation upon us to value our trading stock at any given time and
therefore the valuation has not been updated since.
16. TRADE AND OTHER RECEIVABLES
2022
£000
2021
£000
Trade receivables 205 111
Prepayments and accrued income 1,121 1,306
1,326 1,417
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
There are no bad or doubtful debts at the year end. There are no material debts past due, and there are no financial assets
that are impaired.
17. TRADE AND OTHER PAYABLES
2022
£000
2021
£000
Trade creditors 1,065 1,672
Other taxes and social security costs 244 284
Other creditors 161 186
1,470 2,142
The Directors consider that the carrying amount of trade and other payables approximates their fair value.
18. BANK OVERDRAFTS, LOANS AND CASH
2022
£000
2021
£000
Bank overdrafts — 331
Bank loans 19,200 20,600
Other loans — 949
19,200 21,880
CASH AND CASH EQUIVALENTS
2022
£000
2021
£000
Bank overdrafts —
(331)
Cash 643 597
Cash and cash equivalents as at 31 March 643 266
Notes to the Consolidated
Financial Statements
(Continued)
for the year ended 31 March 2022
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FINANCIAL STATEMENTS
18. BANK OVERDRAFTS, LOANS AND CASH CONTINUED
Maturity profile of financial liabilities at 31 March 2022 was as follows:
2022
£000
2021
£000
Amounts repayable:
In one year or less – 1,280
Between one and five years 19,200 20,600
19,200 21,880
Less: amount due for settlement within 12 months (shown under current liabilities) – (1,280)
Amount due for settlement after 12 months 19,200 20,600
The average interest rates paid were as follows:
2022
%
2021
%
Bank overdrafts 1.79 1.70
Bank loans 2.17 2.07
Other loans 0.50 0.50
The Directors consider that the carrying amount of bank overdrafts and loans approximates their fair value.
The other principal features of the Group’s borrowings are as follows.
1. The Group has a short-term borrowing facility of £10 million (2021: £10 million) with Barclays Bank. This is due for review
in November 2022 and the rate of interest payable is:
• 1.6% over base rate on overdraft
• Headroom of this facility at 31 March 2022 amounted to £10 million (2021: £9.7 million).
2. The Group has re-negotiated £60 million (2021: £60 million) long-term revolving loan facility with Barclays Bank with a
termination date of March 2027. The rate of interest is 1.9% above SONIA. The loan is secured by a cross guarantee
between Mountview Estates P.L.C. and its subsidiaries. The loan is not repayable by instalments. Headroom under this
facility at 31 March 2022 amounted to £58 million (2021: £57 million).
3. The Group has a £20 million long-term revolving loan facility with HSBC Bank. The termination date for this facility is
November 2023. The rate of interest payable on the loan is 2.1% above SONIA. The loan includes a Negative Pledge.
The loan is not repayable by instalments. As at 31 March 2022 headroom under this facility amounted to £2.8 million
(2021: £2.4 million).
4. Other loans consisted of loans from connected persons, and companies of which MrD.M. Sinclair is a Director.
Thebalance outstanding as at 31 March 2022 was £NIL (2021: £949,017).
• Interest payable on these loans was at 0.5%.
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72
19. DEFERRED TAX
ANALYSIS FOR FINANCIAL REPORTING PURPOSES
2022
£000
2021
£000
Deferred tax liabilities 5,700 4,351
Net position at 31 March 5,700 4,351
The movement for the year in the Group’s net deferred tax position was as follows:
2022
£000
2021
£000
At 1 April 4,351 4,076
Debit to income for the year 1,349 275
At 31 March 5,700 4,351
The following are in deferred tax liabilities recognised by the Group and movements thereon during the period:
REVALUATION OF PROPERTIES
2022
£000
2021
£000
At 1 April 4,351 4,076
Debit/(Credit) to income for the year 1,349 275
At 31 March 5,700 4,351
20. FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL ASSETS
The Group’s financial assets at the year end, which are measured at amortised cost, consist of cash at bank and in hand of
£0.64 million (2021: £0.60 million) and trade receivables.
The Directors consider that the carrying amount of cash at bank and in hand approximates their fair value.
The trade receivables amounted to £0.21 million (2021: £0.11 million).
The Directors consider that the carrying amount of trade receivables approximates their fair value.
FAIR VALUE OF BORROWINGS
2022
£000
2021
£000
Short-term loans — 1,280
Secured bank loans 19,200 20,600
19,200 21,880
Interest charged in the Statement of Comprehensive Income for the above borrowings amounted to £0.30 million
(2021:£0.68 million).
The Directors consider that the carrying amount of borrowings approximates their fair value. The details of the terms of the
borrowings together with the average interest rates can be seen in Note 18.
As at 31 March 2022 it is estimated that a general increase of 1 point in interest rates would decrease the Group’s profit
before tax by approximately £192,000 (2021: £218,800).
Notes to the Consolidated
Financial Statements
(Continued)
for the year ended 31 March 2022
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FINANCIAL STATEMENTS
20. FINANCIAL INSTRUMENTS CONTINUED
UNDISCOUNTED MATURITY PROFILE OF FINANCIAL LIABILITIES
The following table analyses the Group’s financial liabilities and derivative financial liabilities at the Balance Sheet date into
relevant maturity groupings based on the remaining period to the contractual maturity date. The amounts disclosed in the
table are the contractual undiscounted cash flows. As the amounts included in the table are the contractual undiscounted
cash flows, these amounts will not always equal the amounts disclosed on the Balance Sheet for borrowings, derivative
financial instruments, and trade and other payables.
Trade and other payables due within 12 months equal their carrying balances as the impact of discounting is not significant.
At 31 March 2022
Less than
1 year
£000
Between
1 and 5 years
£000
Over
5 years
£000
Total
£000
Interest-bearing loans and borrowings – 19,200 – 19,200
Trade and other payables 1,470 – – 1,470
At 31 March 2021
Less than
1 year
£000
Between
1 and 5 years
£000
Over
5 years
£000
Total
£000
Interest-bearing loans and borrowings 1,280 20,600 – 21,880
Trade and other payables 2,142 – – 2,142
The Group’s financial liabilities are measured at amortised cost.
RECONCILIATION OF MATURITY ANALYSIS
At 31 March 2022
Less than
1 year
£000
Between
1 and 5 years
£000
Over
5 years
£000
Total
£000
Interest bearing loans and borrowings per accounts – 19,200 – 19,200
Interest 539 842 – 1,381
Financial liability cash flows 539 20,042 – 20,581
At 31 March 2021
Less than
1 year
£000
Between
1 and 5 years
£000
Over
5 years
£000
Total
£000
Interest bearing loans and borrowings per accounts 1,280 20,600 – 21,880
Interest 442 697 – 1,139
Financial liability cash flows 1,722 21,297 – 23,019
21. CALLED UP SHARE CAPITAL
2022
£000
2021
£000
Authorised:
5,000,000 Ordinary Shares of 5p each 250 250
Allotted, issued and fully paid:
3,899,014 Ordinary Shares of 5p each 195 195
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74
22. OTHER RESERVES
2022
£000
2021
£000
Capital reserve 25 25
Capital redemption reserve 55 55
Other reserves 56 56
136 136
Capital redemption reserve relates to buy-back of the Company’s own shares.
The Group does not maintain insurance cover against other risks except where several properties are located in close
physical vicinity. A reserve is maintained to deal with such non-insured risks and at 31 March 2022 stood at £56,000
(2021:£56,000).
23. RETAINED EARNINGS
£000
Balance at 1 April 2021 394,540
Net profit for the year 26,882
Dividends paid (28,267)
Balance at 31 March 2022 393,155
24. RELATED PARTY TRANSACTIONS
1. During the financial year there were no key management personnel emoluments, other than remuneration.
2. (a) Mountview Estates P.L.C. provides general management and administration services to Ossian Investors Limited
and Sinclair Estates Limited, companies of which Mr D.M. Sinclair is a Director. Fees of £27,762 (2021: £34,800) were
charged for these services.
(b) Included within other loans repayable in less than one year and on demand was a loan from Sinclair Estates Limited.
The balance outstanding at the balance sheet date was £NIL (2021: £537,444). Interest was payable on the loan at
0.5%. Interest paid in the year on this loan amounted to £5,714 (2021: £2,960).
(c) Included within other loans repayable in less than one year and on demand was a loan from Ossian Investors
Limited. The balance outstanding at the balance sheet date was £NIL (2021: £411,573). Interest was payable on the
loan at 0.5%. Interest paid in the year on this loan amounted to £1,634 (2021: £1,210).
(d) All of the above loans are unsecured.
(e) Transactions between the Group and its subsidiaries, which are related parties, have been eliminated on
consolidation and have not been disclosed in this note.
(f) The only key management are the Directors.
(g) As at 31 March 2022 the Group owed Mr D.M. Sinclair £9,788 (2021: £51,244) in relation to an informal loan.
25. LEASE COMMITMENTS
The future aggregate minimum lease payments payable by the Group under non-cancellable leases are as follows:
2022
£000
2021
£000
Lease payments due:
Not later than one year 40 61
Later than one year and not later than five years 23 63
63 124
Notes to the Consolidated
Financial Statements
(Continued)
for the year ended 31 March 2022
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FINANCIAL STATEMENTS
Independent Auditor’s Report
OPINION
We have audited the Group Financial Statements of Mountview Estates P.L.C. for the year ended 31 March 2022 which
comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the
Consolidated Statement of Changes in Equity, the Consolidated Cash Flow Statement and the related notes, including a
summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is
applicable law and UK adopted international accounting standards.
In our opinion the Group Financial Statements:
• give a true and fair view of the state of the Group’s affairs as at 31 March 2022 and of its profit for the year then ended;
• have been properly prepared in accordance with UK adopted international accounting standards; 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 Group
Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements
that are relevant to our audit of the Financial Statements in the UK, including the FRC’s Ethical Standard as applied to listed
public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the Group Financial Statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the director’s assessment of the
Group’s ability to continue to adopt the going concern basis of accounting included:
• reviewing the headroom between the Group’s regular income and its fixed cost base;
• consideration of the liquidity of the Group’s assets;
• reviewing post year end property sales;
• reviewing the Group’s available bank facilities and compliance with covenants; and
• consideration of mitigating actions available to management should cash inflows be less than forecast.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Group’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are authorised for issue.
In relation to the Group’s reporting on how they have applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the
directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
OUR APPROACH TO THE AUDIT
Our audit involved obtaining an understanding of the Group and its environment, including its control environment,
internal control systems and applicable laws and regulations. This formed the basis for our assessment of the risk of material
misstatement at the Group level.
The Group reports its operating results and financial position along two business lines, being UK residential trading
properties and investment properties. The Group comprises the Parent Company and three subsidiaries. We performed full
scope audits of each entity using levels of materiality applicable to each entity, which were lower than Group materiality. At
the Group level we also tested the consolidation process. There were no significant changes to our audit approach.
to the members of Mountview Estates P.L.C. year ended 31 March 2022
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76
During our audit we tested and examined information, using sampling and other techniques, to the extent we considered
necessary to provide a reasonable basis for us to draw conclusions. We reviewed the Group’s internal controls and obtained
our audit evidence largely through substantive procedures.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group
Financial Statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context
of our audit of the Group Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
• Revenue recognition – refer to page 59 for the Group’s accounting policy in respect of revenue recognition.
Under International Standard on Auditing (ISA) (UK) 240 there is a presumption that there is a risk of fraud in revenue
recognition. Revenue is also one of the Group’s key performance indicators. We therefore identified revenue recognition as
a significant risk. Revenue was audited in each component to specific performance materiality levels, which were lower than
group performance materiality. We verified the occurrence of property sales by selecting an appropriate sample of those
sales during the year and verifying to both completion statements and bank transactions. We reviewed other supporting
documents to confirm the validity of each completion statement sampled. We also reconciled property stock movements
and performed appropriate cut off procedures to ensure that sales were complete and recorded in the correct accounting
period. We tested rental income for completeness by sampling from property stock, reviewing the underlying rental
agreement and tracing to recorded rental income. Based on our audit testing we did not identify any material instances of
revenue not being recognised in accordance with the Group’s accounting policy.
• Carrying value of property inventory – refer to page 60 for the Group’s accounting policy in respect of the value of
property inventory
Property inventory is the Group’s most significant asset and is carried at the lower of cost and net realisable value (“NRV”).
NRV is based on vacant possession and is subject to change, largely based on movements in the property market. We
therefore determined the valuation of inventory to be a significant risk. Property inventory was audited at component
performance materiality levels, which were lower than group performance materiality. We reviewed sales of all properties
sold during the year and for a suitable period after the year end to ensure that there was no evidence of properties being
sold for less than cost that might indicate potential impairment. We reviewed property purchases during the year to confirm
that, in accordance with the Group’s operating model, these were purchased at a discount to market value with vacant
possession. We also looked at movements in the UK House Price Index for property inventory locations to identify any
indicator of potential impairment. We used this risk assessment to select an appropriate sample of individual properties
for testing. For the selected sample we estimated market value with vacant possession based on publicly available price
information and by discussing valuations with Group management. We then compared the result with the property cost as
recorded in the Group’s records. Based on our audit testing we found the carrying value of inventory to be acceptable.
• Valuation of investment properties – refer to page 60 for the Group’s accounting policy in respect of the value of
investment properties
Whilst we assessed the expected movement in the valuation of investment properties to be immaterial to the Group, we
assessed the valuation of investment properties to be a significant risk as these are material to the Group balance sheet and
are subject to judgement and estimation in arriving at fair value. Investment property valuation was audited at component
performance materiality levels, which were lower than group performance materiality. The investment properties are valued
annually by a suitably independent and qualified valuer as disclosed in note 13 to the financial statements. We reviewed
the terms of engagement of the valuer, the valuation assumptions and the valuation workings. We also discussed the
methodology used with the valuer and compared the revaluation with our expectation based on market data. Based on our
audit testing we consider the valuation of investment property to be acceptable.
Independent Auditor’s Report (Continued)
to the members of Mountview Estates P.L.C. year ended 31 March 2022
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Mountview Estates P.L.C. Annual Report and Accounts 2022
FINANCIAL STATEMENTS
OUR APPLICATION OF MATERIALITY
We determined overall materiality for the Group to be £4.2 million, which is approximately 1% of gross assets. We
concluded that determining materiality based on gross assets was consistent with industry peers and appropriately reflects
the nature of the business.
We calculated performance materiality at a level lower than materiality to reduce the probability that, in aggregate,
uncorrected and undetected misstatements exceed the materiality level for the financial statements as a whole. We
determined performance materiality to be £3.4m, which was set at 80% of overall materiality. Performance materiality was
determined based on our risk assessment, the low level of errors found in prior years, and taking into account the overall
control environment and the number and complexity of components in the group. Lower levels of performance materiality
were set for each entity within the Group based on the risks assessed within each entity.
In addition, we applied a lower materiality of £1.6m to specific income statement items, being net trading profits on the
sale of properties, rental income, rental expenses, administrative expenses and finance charges, and £159k for Directors’
transactions. We believe misstatement of these specific income statement items and directors’ transactions of a lesser
amount than materiality for the financial statements as a whole could reasonably be expected to influence the Company’s
members’ assessment of the financial performance of the Group.
We agreed with the Audit and Risk Committee that we would report to them corrected and uncorrected differences in
excess of 5% of the materiality level, as well as differences below that threshold that in our view warranted reporting on
qualitative grounds.
OTHER INFORMATION
The other information comprises the information included in the annual report other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our
opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the financial year for which the Group
Financial Statements are prepared is consistent with the Financial Statements; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group and its environment obtained in the course of the audit, we
have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the Parent Company Financial Statements and the part of the directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ Remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
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78
CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate
Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during
the audit:
• Directors’ statement with regards the appropriateness of adopting the going concern basis accounting and any material
uncertainties identified set out on page 26;
• Directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the
period is appropriate set out on page 13;
• Directors’ statement on whether it has a reasonable expectation that the Group will be able to continue in operation
and meet its liabilities as set out on page 13;
• Directors’ statement on fair, balanced and understandable set out on page 28;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 33;
• The section of the annual report that describes the review of effectiveness of risk management and internal control
systems set out on page 33; and
• The section describing the work of the audit committee set out on page 37
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of
the Group Financial Statements and for being satisfied that they give a true and fair view, and for such internal control as
the Directors determine is necessary to enable the preparation of Group Financial Statements that are free from material
misstatement, whether due to fraud or error.
In preparing the Group Financial Statements, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE GROUP FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable assurance about whether the Group Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these Group Financial Statements. Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING
IRREGULARITIES, INCLUDING FRAUD
We identified and assessed the risks of material misstatement in respect of irregularities, including fraud and non-
compliance with laws and regulations. Our procedures included enquiry of management and the Audit and Risk Committee,
together with a review of supporting documentation such as board minutes and audit committee meeting minutes. We
contacted the Group’s legal advisers and reviewed legal expenses. We also performed analytical review procedures to
identify any unusual relationships that may indicate a material misstatement, and additionally tested the appropriateness
of journals to address the risk of fraud through management override of controls. We also performed appropriate testing
Independent Auditor’s Report (Continued)
to the members of Mountview Estates P.L.C. year ended 31 March 2022
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Mountview Estates P.L.C. Annual Report and Accounts 2022
FINANCIAL STATEMENTS
in respect of the risk of fraud in revenue recognition as described above under key audit matters. Additionally, the risk of
management bias in the valuation of property inventory and investment property, was covered by our testing on each of
these areas as described above under key audit matters. Relevant laws and regulations, together with potential fraud risks,
were communicated to the audit engagement team at the planning stage to ensure they remained alert to any indications
of fraud or non-compliance with laws and regulations throughout the audit.
The risk of not detecting a material misstatement resulting from fraud or other irregularities is higher than for one resulting
from error, as they may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control and may involve any area of law and regulation not just those directly affecting the financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS
Following the recommendation of the Audit and Risk Committee, we were appointed by the Directors on 21 March 2022.
The period of total uninterrupted engagement is 16 years for the year ended 31 March 2022.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or to the Parent Company
and we remain independent of the Group and the Parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the Audit and Risk Committee.
We have reported separately on the Parent Company Financial Statements of Mountview Estates P.L.C. for the year ended
31 March 2022. The opinion in that report is unmodified.
THE PURPOSE OF OUR AUDIT WORK AND TO WHOM WE OWE OUR
RESPONSIBILITIES
This report is made solely to the company’s members, as a body, in accordance with chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Gary Allen FCA (Senior Statutory Auditor)
For and on behalf of
BSG Valentine (UK) LLP
Chartered Accountants & Statutory Auditor
Lynton House
7 - 12 Tavistock Square
London
WC1H 9BQ
5 July 2022
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80
Company Balance Sheet
under UK GAAP
for the year ended 31 March 2022
Notes
31 March
2022
£000
31 March
2021
£000
Fixed assets
Tangible assets 4 1,546 1,606
Investments 5 18,276 18,276
19,822 19,882
Current assets
Stocks 6 364,769 369,227
Debtors 7 1,093 1,209
Cash at bank and in hand 499 470
366,361 370,906
Creditors: amounts falling due within one year 8 (23,936) (24,617)
Net current assets 342,425 346,289
Total assets less current liabilities 362,247 366,171
Creditors: amounts falling due after more than one year 9 (19,200) (20,600)
343,047 345,571
Capital and reserves
Called up share capital 10 195 195
Capital redemption reserve 11 55 55
Capital reserve 11 25 25
Other reserves 11 39 39
Profit and loss account 12 342,733 345,257
343,047 345,571
The Company’s profit for the year was £25.7m (2021: £27.8m)
Approved by the Board on 5 July 2022.
D.M. Sinclair M.M. Bray
Chief Executive Director
Company no: 00328020
The Notes on pages 82 to 87 are an integral part of the Parent Company financial statements.
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Mountview Estates P.L.C. Annual Report and Accounts 2022
FINANCIAL STATEMENTS
Company Statement of Changes
in Equity under UK GAAP
Changes in equity for year ended
31 March 2021
Share
capital
£000
Capital
reserve
£000
Capital
redemption
reserve
£000
Other
reserves
£000
Retained
earnings
£000
Total
£000
Balance as at 1 April 2020 195 25 55 39 333,084 333,398
Profit for the year 27,769 27,769
Dividends (15,596) (15,596)
Balance at 31 March 2021 195 25 55 39 345,257 345,571
Changes in equity for year ended
31 March 2022
Balance as at 1 April 2021 195 25 55 39 345,257 345,571
Profit for the year 25,743 25,743
Dividends (28,267) (28,267)
Balance at 31 March 2022 195 25 55 39 342,733 343,047
The Notes on pages 82 to 87 are an integral part of the Parent Company financial statements.
for the year ended 31 March 2022
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82
1. STATEMENT OF COMPLIANCE
These financial statements have been prepared in compliance with FRS 102, ‘The Financial Reporting Standard applicable
in the UK and the Republic of Ireland’.
2. ACCOUNTING POLICIES
BASIS OF PREPARATION
The financial statements have been prepared on the historical cost basis.
The financial statements are prepared in sterling, which is the functional currency of the entity.
The Company has taken advantage of the exemption in section 408 of the Companies Act from disclosing its individual
profit and loss account.
As permitted by FRS 102 the Company has taken advantage of the disclosure exemptions available under that standard in
relation to financial instruments and presentation of a cash flow statement and related party transactions with other wholly-
owned members of the Group. Where required, equivalent disclosures are given in the Group accounts of Mountview
Estates plc.
REVENUE RECOGNITION
Turnover includes proceeds of sales of properties, rents from properties which are held as trading stock, or investment and
any other sundry items of revenue before charging expenses.
Rental income is recognised on a straight-line and accruals basis over the rental period.
Sales of properties are recognised on completion.
INCOME TAX
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period.
Taxis recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income
ordirectly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively.
Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax
expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting
date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other
deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of
deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been
enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
LEASING
Company as lessor
The Company’s non-cancellable operating leases relate to regulated tenancies under which tenants have the right to remain
in a property for the remainder of their lives. It is therefore not possible to estimate timing of future minimum payments in
respect of these regulated tenancies, hence these are not separately disclosed in the financial statements.
Company as lessee
Rentals payable under operating leases are recognised as an expense on a straight-line basis over the term of the lease.
TANGIBLE ASSETS
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and
impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation
less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Notes to the Financial Statements
under UK GAAP
for the year ended 31 March 2022
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FINANCIAL STATEMENTS
2. ACCOUNTING POLICIES CONTINUED
DEPRECIATION
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic
life of that asset using the straight-line method as follows:
Freehold property – 2% per annum
Fixtures and fittings – 20% per annum
Computer equipment – 25% per annum
INVESTMENTS
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment
losses.
IMPAIRMENT OF FIXED ASSETS
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated
where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly.
Prior impairments are also reviewed for possible reversal at each reporting date.
For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual
asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-
generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely
independent of the cash inflows from other assets or groups of assets.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised in the Company’s balance sheet when the Company has become a
party to the contractual provisions of the instrument. Trade and other receivables, trade and other payables, loans and cash
and cash equivalents are measured at amortised cost.
STOCKS
These comprise residential properties, all of which are held for resale and are valued at the lower of cost and estimated net
realisable value. Cost to the Company includes legal fees and commission charges incurred during acquisition together
with improvement costs. Net realisable value is the net sale proceeds which the Company expects on sale of the property
with vacant possession in its current condition.
PENSION COSTS
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is
provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in
future payments or a cash refund.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY AREAS OF ESTIMATION UNCERTAINTY
Going concern
The Directors are required to make an assessment of the Company’s ability to continue to trade as a going concern.
The two main considerations were as follows:
1. Refinancing of banking facilities
The Company has re-negotiated a £60 million (2021: £60 million) revolving loan facility with Barclays Bank. The termination
date of this facility is March 2027.
The Company has a £20 million (2021: £20 million) revolving loan facility with HSBC Bank with a termination date of
November 2023.
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84
2. ACCOUNTING POLICIES CONTINUED
2. Covenant compliance
The core facility has two covenants, Consolidated Gross Borrowing as a percentage of Consolidated Net Tangible Assets,
and the ratio of Consolidated PBIT to Gross Financing Costs. The Company has remained well within both of these
covenants during the year.
On this basis, the Directors have a reasonable expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Carrying value of trading stock
The Company’s residential trading stock is carried in the balance sheet at the lower of cost and net realisable value.
As the Company’s business model is to sell trading stock on vacancy, net realisable value is the net sales proceeds which
the Company expects on sale of a property with vacant possession. Given that by applying our buying criteria all stock is
purchased at a discount to the value with vacant possession the Directors consider the risk of impairment to be low and
accordingly the Company has no NRV provision.
Inventory expected to be settled in more than 12 months
The Board estimates that inventory of £18.3 million will be settled within the next 12 months, with the remaining inventory
value expected to be settled in more than 12 months. This estimation is based on the average cost of sales of inventory
over the last three year period. Mountview’s business, historic and current has involved the purchase for sale of residential
properties subject to regulated tenancies, such properties being sold when vacant possession is obtained.
Regulated tenancies by their nature are not for any specific period of time and in most cases they do not become vacant
until the death of the tenant.
It is difficult to predict with any certainty the time at which Mountview’s inventory properties might become vacant.
3. STAFF COSTS (INCLUDING DIRECTORS)
2022
£000
2021
£000
Wages and salaries 3,983 3,888
Social security costs 516 491
Pension costs 57 54
4,556 4,433
Directors’ Remuneration
2022
£000
2021
£000
Total Directors’ remuneration including salary and bonuses and benefits in kind amounted to: 2,059 2,052
The details of Directors’ remuneration are shown in the audited section of the Remuneration Report on page 50.
The Company contributes 3% of the total annual gross salaries and bonuses of each employee, excluding Directors, to a
Stakeholder Pension Scheme.
The average monthly number of employees during the year was as follows:
2022 2021
Office and management 29 29
for the year ended 31 March 2022
Notes to the Financial Statements
under UK GAAP
(Continued)
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Mountview Estates P.L.C. Annual Report and Accounts 2022
FINANCIAL STATEMENTS
4. TANGIBLE ASSETS
Freehold
property
£000
Computer
equipment
£000
Total
£000
Cost
At 1 April 2021 2,671 24 2,695
Additions – – –
Disposals – – –
At 31 March 2022 2,671 24 2,695
Depreciation
At 1 April 2021 1,072 17 1,089
Charge for the year 53 7 60
On disposals – – –
At 31 March 2022 1,125 24 1,149
Net book value
At 31 March 2021 1,599 7 1,606
At 31 March 2021 1,546 – 1,546
All tangible assets of the Company are located within England and Wales.
5. INVESTMENTS
Shares in Group
undertakings
£000
Cost
At 1 April 2021 and 31 March 2022 18,276
Impairment
At 1 April 2021 and 31 March 2022 –
Carrying amount
At 31 March 2022 18,276
The Company owns 100% of the Ordinary Share capital of the following companies:
Subsidiary undertaking Country of incorporation Principal activity
Hurstway Investment Company Limited
Registered Office: Mountview House,
151 High Street, Southgate, London, N14 6EW
England, UK
No: 344034
Property Trading
Louise Goodwin Limited
Registered Office: Mountview House,
151 High Street, Southgate, London, N14 6EW
England, UK
No: 691455
Property Investment
A.L.G. Properties Limited
Registered Office: Mountview House,
151 High Street, Southgate, London, N14 6EW
England, UK
No: 508842
Property Investment
6. STOCKS
2022
£000
2021
£000
Residential properties 364,769 369,227
7. DEBTORS: DUE WITHIN ONE YEAR
2022
£000
2021
£000
Trade debtors 204 110
Prepayments and accrued income 889 1,099
1,093 1,209
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8. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2022
£000
2021
£000
Bank overdraft – 331
Amounts owed to Group undertakings 20,164 17,306
Accruals and deferred income 1,017 1,626
Corporation Tax 2,350 3,935
Other taxes and social security costs 244 284
Other creditors 161 186
Other loans – 949
23,936 24,617
Other loans consist of loans from connected persons. Interest payable on these loans was at 0.5%.
9. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2022
£000
2021
£000
Bank loans 19,200 20,600
19,200 20,600
The Directors consider that the carrying amount of bank overdrafts and loans approximates their fair value.
The other principal features of the Company’s borrowings are as follows.
1. The Company has a short-term borrowing facility of £10 million (2021: £10 million) with Barclays Bank. This is due for
review in November 2022 and the rate of interest payable is:
• 1.6% over base rate on overdraft.
Headroom of this facility at 31 March 2022 amounted to £10 million (2021: £9.7 million).
2. The Group has re-negotiated £60 million (2021 £60 million) long term revolving loan facility with Barclays Bank with a
termination date of March 2027. The rate of interest is 1.9% above SONIA. The loan is secured by a cross guarantee
between Mountview Estates P.L.C. and its subsidiaries. The loan is not repayable by instalments. Headroom under this
facility at 31 March 2022 amounted to £58 million (2021 £57 million).
3. The Company has a £20 million (2021: £20 million) long-term revolving loan facility with HSBC Bank. The termination
date for this facility is November 2023. The rate of interest payable on the loan is 2.1% above SONIA. The loan
includes a Negative Pledge. The loan is not repayable by instalments. As at 31 March 2022 headroom under this facility
amounted to £2.8 million (2021: £2.4 million).
4. Other loans consisted of loans from connected persons, and companies of which Mr D.M. Sinclair is a Director.
Thebalance outstanding as at 31 March 2022 was £NIL (2021: £949,017). Interest payable on these loans was at 0.5%.
10. CALLED UP SHARE CAPITAL
2022
£000
2021
£000
Authorised:
5,000,000 Ordinary Shares of 5p each 250 250
Allotted, issued and fully paid:
3,899,014 Ordinary Shares of 5p each 195 195
for the year ended 31 March 2022
Notes to the Financial Statements
under UK GAAP
(Continued)
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FINANCIAL STATEMENTS
11. OTHER RESERVES
2022
£000
2021
£000
Capital redemption reserve 55 55
Capital reserve 25 25
Other reserves 39 39
Balance at 31 March 119 119
Capital redemption reserve relates to buy-back of the Company’s own shares.
The Company does not maintain insurance cover against other risks except where several properties are located in
closephysical vicinity. A reserve is maintained to deal with such non-insured risks and at 31 March 2022 stood at £39,000
(2021: £39,000).
12. RETAINED EARNINGS
2022
£000
2021
£000
Balance at 1 April 345,257 333,084
Net profit for the year 25,743 27,769
Dividends paid (28,267) (15,596)
Balance at 31 March 342,733 345,257
13. RELATED PARTY TRANSACTIONS
During the financial year there were no key management personnel emoluments, other than remuneration.
(a) Mountview Estates P.L.C. provides general management and administration services to Ossian Investors Limited and
Sinclair Estates Limited, companies of which Mr D.M. Sinclair is a Director. Fees of £27,762 (2021: £34,800) were charged
for these services.
(b) Included within other loans repayable in less than one year and on demand was a loan from Sinclair Estates Limited.
Thebalance outstanding at the balance sheet date was £NIL (2021: £537,444). Interest was payable on the loan at 0.5%.
Interest paid in the year on this loan amounted to £5,714 (2021: £2,960).
(c) Included within other loans repayable in less than one year and on demand was a loan from Ossian Investors Limited.
The balance outstanding at the balance sheet date was £NIL (2021: £411,573). Interest was payable on the loan at 0.5%.
Interest paid in the year on this loan amounted to £1,634 (2021: £1,210).
(d) All of the above loans are unsecured.
(e) Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation and have not been disclosed in this note.
(f) The only key management are the Directors.
(g) As at 31 March 2022 the Company owed Mr D.M. Sinclair £9,788 (2021: £51,244) in relation to an informal loan.
14. LEASE COMMITMENTS
At 31 March 2022 the Company had aggregate annual commitments under non-cancellable operating leases as follows.
2022
£000
2021
£000
Operating lease payments due:
Not later than one year 40 61
Later than one year and not later than five years 23 63
63 124
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88
Independent Auditor’s Report
to the members of Mountview Estates P.L.C. year ended 31 March 2022
OPINION
We have audited the Parent Company Financial Statements of Mountview Estates P.L.C. for the year ended 31 March 2022
which comprise the Company Balance Sheet, Company Statement of Changes in Equity and the related notes, including a
summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is
applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable
in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the Parent Company Financial Statements:
• give a true and fair view of the state of the Parent Company’s affairs as at 31 March 2022;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Parent
Company financial statements section of our report. We are independent of the Parent Company in accordance with
the ethical requirements that are relevant to our audit of the Financial Statements in the UK, including the FRC’s Ethical
Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate. Our evaluation of the director’s assessment of the Parent
Company’s ability to continue to adopt the going concern basis of accounting included:
• reviewing the headroom between the Parent Company’s regular income and its fixed cost base;
• consideration of the liquidity of the Parent Company’s assets;
• reviewing post year end property sales;
• reviewing the Parent Company’s available bank facilities and compliance with covenants; and
• consideration of mitigating actions available to management should cash inflows be less than forecast.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the Parent Company’s ability to continue as a going concern
for a period of at least twelve months from when the financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether
the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
OUR APPROACH TO THE AUDIT
Our audit involved obtaining an understanding of the Parent Company and its environment, including its control
environment, internal control systems and applicable laws and regulations. This formed the basis for our assessment of the
risk of material misstatement. We performed a full scope audit of the Parent Company. There were no significant changes in
our audit approach.
During our audit we tested and examined information, using sampling and other techniques, to the extent we considered
necessary to provide a reasonable basis for us to draw conclusions. We reviewed the Parent Company’s internal controls
and obtained our audit evidence largely through substantive procedures.
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FINANCIAL STATEMENTS
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Parent
Financial Statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context
of our audit of the Parent Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
The key audit matters relating to both the Parent Company and the Group were revenue recognition and valuation of
trading properties. An explanation of these matters and how these were addressed during our audit can be found in our
audit report on the Group Financial Statements on page 76.
We identified one key audit matter that related solely to the Parent Company, which was the recoverability of investments
in subsidiaries. Investments in subsidiaries are stated at cost as described in the Parent Company’s accounting policies
on page 83. The cost of investment should be supported by the underlying value of the subsidiaries. We tested this by a
review of the subsidiaries’ year-end financial statements. We used their net assets as an approximation of recoverable value
and compared these to the cost of investment in the Parent Company. Based on our audit testing we are satisfied with the
recoverability of investments in subsidiaries.
OUR APPLICATION OF MATERIALITY
We determined overall materiality for the Parent Company to be £3.9 million, which is approximately 1% of gross assets. We
concluded that determining materiality based on gross assets was consistent with industry peers and appropriately reflects
the nature of the business.
We calculated performance materiality at a level lower than materiality to reduce the probability that, in aggregate,
uncorrected and undetected misstatements exceed the materiality level for the financial statements as a whole. We
determined performance materiality to be £3.1m, which was set at 80% of overall materiality. Performance materiality was
determined based on our risk assessment, taking into account the overall control environment, the low level of errors found
in prior years and the complexity of the Parent Company’s operations.
In addition, we applied a lower materiality of £1.6m to specific income statement items, being net trading profits, rental
income, rental expenses, administrative expenses and finance charges, and £159k for directors’ transactions. We believe
misstatement of these specific income statement items and directors’ transactions of a lesser amount than materiality for
the financial statements as a whole could reasonably be expected to influence the company’s members’ assessment of the
financial performance of the Parent Company.
We agreed with the Audit and Risk Committee that we would report to them corrected and uncorrected differences in
excess of 5% of the materiality level, as well as differences below that threshold that in our view warranted reporting on
qualitative grounds.
OTHER INFORMATION
The other information comprises the information included in the annual report other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our
opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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90
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with
the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for the financial year for which the Parent
Company Financial Statements are prepared is consistent with the Financial Statements; and
• the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in
the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the Parent Company Financial Statements and the part of the directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ Remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of
the Parent Company Financial Statements and for being satisfied that they give a true and fair view, and for such internal
control as the Directors determine is necessary to enable the preparation of Parent Company Financial Statements that are
free from material misstatement, whether due to fraud or error.
In preparing the Parent Company Financial Statements, the Directors are responsible for assessing the Parent Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the Parent Company or to cease operations, or
have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE PARENT COMPANY
FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the Parent Company Financial Statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these Parent Company Financial Statements. Irregularities, including fraud, are
instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed below:
Independent Auditor’s Report (Continued)
to the members of Mountview Estates P.L.C. year ended 31 March 2022
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FINANCIAL STATEMENTS
EXTENT TO WHICH THE AUDIT WAS CONSIDERED CAPABLE OF DETECTING
IRREGULARITIES, INCLUDING FRAUD
We identified and assessed the risks of material misstatement in respect of irregularities, including fraud and non-
compliance with laws and regulations. Our procedures included enquiry of management and the Audit and Risk
Committee, together with a review of supporting documentation such as board minutes and audit committee meeting
minutes. We contacted the Company’s legal advisers and reviewed legal expenses. We also performed analytical review
procedures to identify any unusual relationships that may indicate a material misstatement, and additionally tested the
appropriateness of journals to address the risk of fraud through management override of controls. We also performed
appropriate testing in respect of the risk of fraud in revenue recognition, and in respect of the risk of management bias in
the valuation of property inventory, as described in the Group audit report under key audit matters on page 76. Relevant
laws and regulations, together with potential fraud risks, were communicated to the audit engagement team at the
planning stage to ensure they remained alert to any indications of fraud or non-compliance with laws and regulations
throughout the audit.
The risk of not detecting a material misstatement resulting from fraud or other irregularities is higher than for one resulting
from error, as they may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control and may involve any area of law and regulation not just those directly affecting the financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS
Following the recommendation of the Audit and Risk Committee, we were appointed by the Directors on 21 March 2022.
The period of total uninterrupted engagement is 16 years for the year ended 31 March 2022.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Parent Company and its
controlled undertakings and we remain independent of the Parent Company and its controlled undertakings in conducting
our audit.
Our audit opinion is consistent with the additional report to the Audit and Risk Committee.
We have reported separately on the Group Financial Statements of Mountview Estates P.L.C. for the year ended 31 March
2022. That report includes details of the group key audit matters. The opinion in that report is unmodified.
THE PURPOSE OF OUR AUDIT WORK AND TO WHOM WE OWE OUR
RESPONSIBILITIES
This report is made solely to the company’s members, as a body, in accordance with chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Gary Allen FCA (Senior Statutory Auditor)
For and on behalf of
BSG Valentine (UK) LLP
Chartered Accountants & Statutory Auditor
Lynton House
7 - 12 Tavistock Square
London
WC1H 9BQ
5 July 2022
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92
Table of Comparative Figures (unaudited)
for the year ended 31 March 2022
IFRS
2016
£000
IFRS
2017
£000
IFRS
2018
£000
IFRS
2019
£000
IFRS
2020
£000
IFRS
2021
£000
As at
31 March
2022
IFRS
2022
£000
Revenue 79,765 78,232 70,272 65,428 64,873 65,730 66,010
Profit before taxation 48,388 44,986 36,905 34,567 34,941 38,134 34,868
Taxation 9,676 8,761 7,024 6,559 6,645 7,241 7,986
Profit after taxation 38,712 36,225 29,881 28,008 28,296 30,893 26,882
Earnings per share 992.9p 929.1p 766.4p 718.3p 725.7p 792.3p 689.5p
Rate of dividend 300p 300p 400p 400p 400p 425p 750p
Cover 3.31 3.17 1.92 1.75 1.81 1.86 0.92
Cost of dividend 11,698 11,698 15,596 15,596 15,596 16,571 29,242*
Total remuneration (including Directors) 3,631 3,747 3,743 3,928 4,093 4,433 4,556
Executive Directors’ remuneration 1,604 1,768 1,669 1,667 1,756 1,875 1,877
Total remuneration (including Directors)
as a percentage of dividend 31.04% 32.03% 24.00% 25.19% 26.24% 26.76% 15.58%
Cost of Executive Directors’ remuneration
as a percentage of total remuneration 44.18% 47.18% 44.59% 42.44% 42.90% 42.30% 41.20%
Cost of Executive Directors’ remuneration
as a percentage of dividend 13.71% 15.11% 10.70% 10.69% 11.26% 11.32% 6.42%
Executive Directors’ remuneration
as a percentage of profit before taxation 3.31% 3.93% 4.52% 4.82% 5.03% 4.92% 5.39%
* The £29.2 million dividend in relation to 2022 is made up of the interim dividend of £19.5 million (comprising an £8.8 million interim dividend and
a £10.7million special dividend) and the final dividend of £9.7 million, which will be paid on 15 August 2022, subject to approval at the AGM on
10 August 2022.
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Notice of Meeting
ATTENDANCE AT THE MEETING
We are keen to welcome shareholders in person to our 2022 Annual General Meeting (2022 AGM). At present, it is possible
under Covid-19 guidance to welcome shareholders to attend the 2022 AGM in person. Those attending the AGM will be
required to follow any specific health and safety measures in place at the venue of the 2022 AGM on 10 August 2022. Failure
to follow these requirements may result in a delay in entering the meeting. Any specific measures in place will be published
prior to the meeting on the Company’s website: www.mountviewplc.co.uk
The safety and security of shareholders, directors, employees and those involved in running the meeting is very important
to us. Therefore, please do not attend in person if you know you have been in contact with a confirmed Covid-19 case in the
last five days, have symptoms of, or have tested positive for Covid-19 yourself.
All resolutions for the consideration at the 2022 AGM will be voted on a poll, rather than a show of hands, and all valid
proxy votes cast will count towards the poll votes. The results will be announced via a regulatory announcement and will be
posted on the Company’s website as soon as practicable after the 2022 AGM.
Shareholders are encouraged to vote in advance by appointing a proxy, regardless of whether or not they intend to attend
the 2022 AGM in person, see details below for appointing a proxy.
APPOINTING A PROXY
Shareholders can vote ahead of the 2022 AGM by appointing a proxy to vote on the resolutions set out in the Notice of
Annual General Meeting (see page 94) and should do so as soon as possible, and in any event by 11.00 am on 8 August
2022. All shareholders are encouraged to appoint the chairman of the meeting as their proxy even if they intend to attend
in person at the 2022 AGM. This is to ensure that your vote is counted even if you (or any other proxy you might otherwise
appoint) are not able to attend in person on the day of the 2022 AGM. Shareholders can vote ahead of the 2022 AGM,
either by completing and returning a Proxy Form or by appointing a proxy electronically via our registrar’s website by
visiting www.signalshares.com. Shareholders will need their Investor Code which is located on their share certificate or on
a recent dividend confirmation. Full instructions are given on the website.
The completion and submission of a form of proxy will not prevent you from attending and voting in person at the 2022
AGM, subject to prevailing Government guidance and to the restrictions set out in the notice of the 2022 AGM and as
notified on the Company’s website.
The Board considers that the resolutions set out in the notice of the 2022 AGM are in the best interests of the Company and
its shareholders as a whole and unanimously recommends shareholders to vote in favour of them as the Directors intend to
do so in respect of their own beneficial shareholdings.
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NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 85th Annual General Meeting of the Members of Mountview Estates P.L.C. (incorporated in
LLP, 3 More London Riverside, London SE1 2AQ on 10 August 2022 at 11.00 am. Shareholders will be asked to consider and,
if thought fit, pass the following resolutions, which will be proposed as ordinary resolutions.
1. To receive and consider the Reports of the Directors and the Auditors and the audited Statements of Accounts of the
Company for the year ended 31 March 2022.
2. To declare a final dividend of 250 pence per share payable on 15 August 2022 to shareholders on the register at
8July2022.
3. To re-elect Mrs M.M. Bray as a Director of the Company.
4. To re-elect Mr D.M. Sinclair as a Director of the Company.
5. To re-elect Ms M.L. Archibald as a Director of the Company, provided that resolution 12 is passed.
6. To re-elect Mr A.W. Powell as a Director of the Company, provided that resolution 13 is passed.
7. To re-elect Dr A.R. Williams as a Director of the Company.
8. To approve the Directors’ Remuneration Report (other than the part containing the Directors’ Remuneration Policy) in
the Annual Report and Accounts for the year ended 31 March 2022.
9. To approve the Directors’ Remuneration Policy set out on pages 43 to 49 of the Directors’ Remuneration Report which
is contained in the Annual Report and Accounts for the year ended 31 March 2022, such policy to take effect from the
conclusion of the Annual General Meeting.
10. To elect Messrs BSG Valentine (UK) LLP as Auditors of the Company to hold office from the conclusion of the Annual
General Meeting to the conclusion of the next meeting at which the Company’s Annual Report and Accounts are laid
before the meeting.
11. To authorise the Directors to determine the Auditors’ remuneration for the ensuing year.
In accordance with Listing Rule 9.2.2ER notice is also hereby given for the independent shareholders of the Company only:
12. To re-elect Ms M.L. Archibald as a Director of the Company, provided that resolution 5 is passed.
13. To re-elect Mr A.W. Powell as a Director of the Company, provided that resolution 6 is passed.
By Order of the Board
M.M. Bray
Company Secretary
Mountview House
151 High Street
Southgate
London N14 6EW
5 July 2022
Notice of Meeting (Continued)
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NOTES:
1. A Member who is entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend, speak
and vote instead of him/her. A proxy need not also be a Member of the Company. If a Member appoints more than one
proxy to attend the meeting, each proxy must be appointed to exercise the rights attached to a different share or shares
held by the Member. If a Member wishes to appoint more than one proxy and so requires additional Forms of Proxy, the
Member should contact Link Group PSX1, Central Square, 29 Wellington Street, Leeds, LS1 4DL.
2. A Form of Proxy is enclosed with this Annual Reports and Accounts and Notice of the 2022 AGM and should be
completed in accordance with the instructions contained therein. To be effective, the Form of Proxy and any power of
attorney or other authority under which it is signed (or a notarially certified copy of such authority) must be deposited
at the office of the Company’s Registrars, Link Group PSX1, Central Square, 29 Wellington Street, Leeds, LS1 4DL, by
11.00 am on 8 August 2022 or in the case of any adjournment of the meeting, not later than 48 hours before the time of
such adjourned meeting. Amended instructions must also be received by the Company’s Registrars by the deadline for
receipt of Forms of Proxy.
3. You may also submit your voting instructions electronically via our registrar’s website. Please go to
www.signalshares.com and enter Mountview Estates P.L.C. If you have not already registered for Signal Shares you
will need to enter your Investor Code which can be found on your share certificate. Once registered you will be able to
vote immediately by selecting ‘Proxy Voting’ from the menu. In order to be a valid proxy appointment, the member’s
electronic message confirming the details of the appointment completed in accordance with those instructions must be
transmitted so as to be received no later than 11.00 am on 8 August 2022. The proxy appointment will not be accepted
if found to contain a computer virus.
4. To appoint a proxy or to give or amend an instruction to a previously appointed proxy via the CREST system, the CREST
message must be received by the issuer’s agent RA10 by 11.00 am on 8 August 2022 or in the case of any adjournment
of the meeting, not later than 48 hours before the time of such adjourned meeting. For this purpose, the time of receipt
will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications
Host) from which the issuer’s agent is able to retrieve the message. After this time any change of instructions to a
proxy appointed through CREST should be communicated to the proxy by other means. CREST Personal Members or
other CREST sponsored members, and those CREST Members who have appointed voting service provider(s) should
contact their CREST sponsor or voting service provider(s) for assistance with appointing proxies via CREST. For further
information on CREST procedures, limitations and system timings please refer to the CREST Manual. We may treat
as invalid a proxy appointment sent by CREST in the circumstances set out in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001 (as amended). In any case your proxy instruction must be received by the Company’s
Registrars, Link Group PSX1, Central Square, 29 Wellington Street, Leeds, LS1 4DL by 11.00 am on 8 August 2022 or not
later than 48 hours before the time of any adjourned meeting.
5. Any person receiving a copy of this Notice as a person nominated by a Member to enjoy information rights under
Section 146 of the Companies Act 2006 (a “Nominated Person”) should note that the provisions in Notes 1 and 2
above concerning the appointment of a proxy or proxies to attend the meeting in place of a Member, do not apply to
a Nominated Person as only Members have the right to appoint a proxy. However, a Nominated Person may have a
right under an agreement between the Nominated Person and the Member by whom he or she was nominated to be
appointed, or to have someone else appointed, as a proxy for the meeting. If a Nominated Person has no such proxy
appointment right or does not wish to exercise it, he/she may have a right under such an agreement to give instructions
to the Member as to the exercise of voting rights at the meeting. Nominated persons should also remember that their
main point of contact in terms of their investment in the Company remains the Member who nominated the Nominated
Person to enjoy information rights (or, perhaps the custodian or broker who administers the investment on their behalf).
Nominated Persons should continue to contact that Member, custodian or broker (and not the Company) regarding
any changes or queries relating to the Nominated Person’s personal details and interest in the Company (including
any administrative matter). The only exception to this is where the Company expressly requests a response from a
Nominated Person.
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6. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 (as amended) and for the purposes of
Section 360B of the Companies Act 2006, entitlement to attend and vote at the meeting and the number of votes
which may be cast thereat will be determined by reference to the Register of Members of the Company as at close of
business on 8 August 2022 (the ”Specified Time”) or 48 hours (excluding any day or part of any day that is not a working
day) before the date of any adjourned meeting. If the meeting is adjourned to a time not more than 48 hours after the
Specified Time, that time will also apply for the purpose of determining the entitlement of Members to attend and vote
and for the purpose of determining the number of votes they may cast at the adjourned meeting. Changes to entries
on the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to
attend and vote at the meeting.
7. Any corporation which is a Member can appoint one or more corporate representatives who may exercise on its behalf
all of its powers as a Member, provided that, if it is appointing more than one corporate representative, it does not do
so in relation to the same shares.
8. If the Chairman, as a result of any proxy appointments, is given discretion as to how the votes the subject of those
proxies are cast and the voting rights in respect of those discretionary proxies, when added to the interests in the
Company’s securities already held by the Chairman, result in the Chairman holding such number of voting rights that he
has a notifiable obligation under the Disclosure Guidance and Transparency Rules, the Chairman will make the necessary
notifications to the Company and the Financial Conduct Authority. As a result, any Member holding 3% or more of the
voting rights in the Company who grants the Chairman a discretionary proxy in respect of some or all of those voting
rights and so would otherwise have a notification obligation under the Disclosure Guidance and Transparency Rules,
need not make a separate notification to the Company and the Financial Conduct Authority.
9. This Notice, together with information about the total numbers of shares in the Company in respect of which
Members are entitled to exercise voting rights at the meeting as at, 5 July 2022, being the last business day prior to
the printing of this Notice and, if applicable, any Members’ statements, Members’ resolutions or Members’ matters
of business received by the Company after the date of this Notice, will be available on the Company’s website
www.mountviewplc.co.uk.
10. Under Section 527 of the Companies Act 2006, Members meeting the threshold requirements set out in that section
have the right to require the Company to publish on a website a statement setting out any matter relating to: (a)
the audit of the Company’s accounts (including the Auditors’ report and the conduct of the audit) that are to be laid
before the meeting; or (b) any circumstance connected with an auditor of the Company ceasing to hold office since
the previous meeting at which annual accounts and reports were laid in accordance with Section 437 of the Companies
Act 2006. The Company may not require the Members requesting any such website publication to pay its expenses in
complying with Sections 527 or 528 Companies Act 2006. Where the Company is required to place a statement on a
website under Section 527 Companies Act 2006, it must forward the statement to the Company’s Auditors not later than
the time when it makes the statement available on the website. The business which may be dealt with at the meeting
includes any statement that the Company has been required under Section 527 Companies Act 2006 to publish on a
website.
11. Any Member attending the meeting has the right to ask questions. The Company must cause to be answered any
question relating to the business being dealt with at the meeting put by a member attending the meeting. However,
Members should note that no answer need be given in the following circumstances:
(a) if to do so would interfere unduly with the preparation of the meeting or would involve a disclosure of confidential
information;
(b) if the answer has already been given on a website in the form of an answer to a question; or
(c) if it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
Members can also send to the Company any questions in relation to the business of the meeting in advance by
email to reception@mountviewplc.co.uk or by writing to the Company Secretary, Mountview House, 151 High
Street, Southgate, London N14 6EW. Please submit questions as soon as possible and in any event no later than
29 July 2022. Responses to relevant questions submitted by 29 July 2022 will be provided, by way of a written Q&A,
grouped into themes, posted on the Company’s website as soon as practicable in advance of the meeting, and no
Notice of Meeting (Continued)
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FINANCIAL STATEMENTS
later than 5 August 2022. Some, but not all, questions may receive individual responses. For questions received after
29 July 2022, the Directors will endeavour to provide answers as soon as practicable but responses may be provided
after 5 August 2022. Responses will not be provided to questions which do not relate to the business of the meeting
or that the Directors determine require disclosure of confidential or commercially sensitive information or are already
answered on the website or are already addressed elsewhere including in the annual report and accounts. The
Company reserves the right to answer questions only from Members or those legally permitted to raise questions at
the meeting.
12. Any electronic address provided either in this Notice or in any related documents (including the Form of Proxy) may not
be used to communicate with the Company for any purposes other than those expressly stated.
13. As at, 5 July 2022, being the last business day prior to the printing of this Notice, the Company’s issued capital
consisted of 3,899,014 Ordinary Shares carrying one vote each. Therefore, the total voting rights in the Company as at,
5 July 2022, are 3,899,014.
14. Copies of the Directors’ service contracts and letters of appointment with the Company are available for inspection at
the registered office at Mountview House, 151 High Street, Southgate, London N14 6EW during normal business hours
on weekdays (Saturdays, Sundays and English public holidays excepted) from the date of this Notice and at the place of
meeting from 15 minutes before the meeting until it ends.
15. Your personal data includes all data provided by you, or on your behalf, which relates to you as a shareholder, including
your name and contact details, the votes you cast and your Shareholder Reference Number (attributed to you by the
Company). The Company determines the purposes for which and the manner in which your personal data is to be
processed. The Company and any third party to which it discloses the data (including the Company’s registrar) may
process your personal data for the purposes of compiling and updating the Company’s records, fulfilling its legal
obligations and processing the shareholder rights you exercise. A copy of the Company’s privacy policy can be found
online at: https://mountviewplc.co.uk/privacy.html
16. Explanatory note for resolutions 5, 6, 12 and 13:
Changes to the Financial Conduct Authority’s Listing Rules (LR) in 2014 introduced new voting requirements for the
election of independent Directors in listed companies with a controlling shareholder (a shareholder who exercises 30%
or more of the votes). Under the rules, the election or re-election of any Director whom the Company has determined
to be independent under the UK Corporate Governance Code must be approved by the shareholders as a whole, and
separately by all shareholders excluding the Sinclair family concert party which is collectively deemed to be a controlling
shareholder (the Independent Shareholders). Therefore at this year’s meeting there will be two votes each in relation
to the re-election of the Non-Executive Director, Ms. M.L. Archibald and the re-election of the Non-Executive Director,
Mr.A. W. Powell, one vote by the shareholders as a whole and another vote by the Independent Shareholders. If a
vote to re-elect a Non-Executive Director is not passed by the Independent Shareholders, the Company may propose
a further resolution to re-elect the relevant Director between 90 and 120 days from the date of the original vote. This
further resolution in respect of each Non-Executive Director must be passed by a majority of the shareholders as a
whole only, and there is no requirement for an additional vote by the Independent Shareholders. LR 9.2.2DG allows
any Non-Executive Director who is not re-elected by the Independent Shareholders to remain in office until the further
resolution has been voted on.
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FINANCIAL CALENDAR 2022
Final dividend record date 8 July
Annual Report posted to Shareholders 8 July
Annual General Meeting 10 August
Final dividend payment 15 August
Interim results 24 November
Copies of this statement are being sent to Shareholders. Copies may be obtained from the Company’s registered office:
Mountview House
151 High Street,
Southgate,
London,
N14 6EW
All administrative enquiries relating to shareholdings should be addressed to the Company’s Registrars:
Link Group
10th Floor,
Central Square,
29 Wellington Street,
Leeds,
LS1 4DL
Shareholder Information
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Mountview Estates P.L.C.
Mountview House, 151 High Street, Southgate, London N14 6EW
Tel:+44 (0) 20 8920 5777 Fax:+44 (0) 20 8882 9981
www.mountviewplc.co.uk
MOUNTVIEW ESTATES P.L.C. Annual Report and Accounts 2022