Final Results

Final Results

Gresham House plc

GRESHAM HOUSE PLC
(the “Company” or the “Group”)
PRELIMINARY FINANCIAL STATEMENT
YEAR ENDED 31 DECEMBER 2010

Gresham House plc (GHE.L), the property and early-stage investment trust, is pleased to announce its preliminary results for the year ended 31 December 2010.

CHAIRMAN’S STATEMENT

I am pleased to report the results for the year ended 31 December 2010.

The Results

The revenue loss has decreased from £901,000 in 2009 to £701,000 in 2010. The net asset value per share has shown a slight improvement of 0.7% from 473.7p in 2009 to 476.9p in 2010.

As the revenue loss for 2010 includes a trading profit from the sale of our development site at Curtis Road, Dorking amounting to £591,000, the comparable running loss has effectively increased by £391,000 from £901,000 in 2009 to £1,292,000 in 2010. The principal reason for this increase is the sharp decline in rental income from £2,112,000 in 2009 to £1,435,000 in 2010 as a result of our policy of vacating space at Newton-le-Willows following the granting of residential planning consent and at Vincent Lane, Dorking where we anticipate obtaining residential and retail planning consent. This adverse variance was slightly offset by an increase in our dividend and interest income from £200,000 in 2009 to £446,000 in 2010 as a result of the acquisition of £5.5 million of corporate bonds following the successful sale of our Hallin Marine investment in February 2010 which was low yielding.

Net Asset Value per share

The net asset value per share increased by 3.2p to 476.9p as a result of the increase in the valuation of the property portfolio by £490,000 and gains on the securities portfolio of £813,000. These increases were offset by the revenue loss and costs of £297,000 in respect of fees payable on the Hallin Marine share disposal and the additional investment in Memorial Holdings Ltd which were required to be written off in the year.

Property Portfolio

The property investments were re-valued by King Sturge LLP at 31 December 2010. Capital expenditure on the portfolio amounted to £3,530,000 during the year of which £3,214,000 related to costs incurred at Newton-le-Willows for demolition, planning and securing vacant possession of the industrial units following the granting of residential planning consent. The remainder of the capital expenditure was at Southern Gateway, Speke including the partial refurbishment and rebranding of an existing building to create the Liverpool Science Centre. The valuation surplus amounted to £490,000 which gave an overall valuation of our property investment portfolio of £28,620,000.

Market conditions in the secondary property sector remain challenging. Despite this, good progress has been made on a number of our investments.

At Newton-le-Willows, where consent for 440 homes has been granted, terms have been agreed with a national house builder for the sale of two thirds of the 28 acre site, subject to detailed planning. Alternative and more valuable uses are being explored for the balance of the site.

At Southern Gateway, our principal tenant has increased its occupational space and extended its lease. In addition, refurbishment of the show suite in the Liverpool Science Centre has been completed and interest is being expressed by potential pharmaceutical occupiers.

At Vincent Lane, Dorking, conditional sale contracts were exchanged in March 2011 with a national house builder and a food retailer, subject to planning, at a price in excess of year end book value. A planning application will be submitted shortly.

During the course of 2010, the development site at Curtis Road, Dorking was sold at approximately 24% over book value – an excellent result in light of market conditions.

At Westhill, Aberdeen, the Hallin Marine headquarters are due to be completed in early May 2011 and agents have now been instructed to seek a purchaser for the investment.

CHAIRMAN’S STATEMENT – Continued

Securities Portfolio

As previously reported, in February 2010 we sold our investment in Hallin Marine Subsea International plc for £8.6 million of which £5.5 million was invested in corporate bonds maturing between 2013 and 2018. The weighted average cash yield of these bonds as at 31 December 2010 was 6.25%. We also received £957,000 from the liquidation of Welsh Industrial Investment Trust plc resulting in a surplus of £156,000 in the year.

The largest holding in the securities portfolio is a 15% shareholding in Memorial Holdings Ltd. The original holding of 5% was acquired in December 2009 and during the year we acquired a further 10% at a cost of £1.712m through the placing of 488,000 new ordinary shares in Gresham House plc at 332.5p per share and the balance paid from cash resources. Memorial Holdings is developing a 55 acre cemetery site in the London Borough of Bromley. Development of the cemetery is well under way and completion of the first phase of ten acres is anticipated towards the end of this year.

In addition, in the summer of 2010, we acquired a 20% interest in a potential residential development site in Edinburgh. Terms have now been agreed with a national house builder, subject to planning, at a level that will show an attractive return.

The Future

After careful deliberation, your Board will be recommending to shareholders at the AGM that the Company should amend its investment objective to enable the orderly realisation of the Group’s assets over a period of approximately two years with a view to returning capital to shareholders thereafter. The present downturn in the commercial property market, coupled with the restricted availability of bank funding, will create a very flat market over the next few years thereby presenting fewer opportunities to generate returns for shareholders. This amendment to the investment objective should also address shareholders’ concerns over the discount at which the shares are currently trading. We anticipate being able to maximise value on our property investments through planning gain and lettings over a period of approximately two years and we intend to dispose of these assets in an orderly fashion. The securities portfolio will also be realised during the same period of time to allow some of the unquoted investments to maximise values. We will endeavour to restrict overhead costs whilst undertaking the realisation of the investment portfolio.

I would like to thank the Board for reaching a difficult decision which I believe can only be of financial benefit to all shareholders.

             
19 April 2011 Tony Ebel

Chairman

 

CHIEF EXECUTIVE’S REPORT

Dear Shareholder,

As you have read in the Chairman’s Statement we propose to put a resolution to shareholders at the annual general meeting to be held on 19 May 2011 to seek your approval to realise the assets of the Company in an orderly fashion over a period of approximately two years with a view to returning capital to shareholders thereafter.

Our principal focus has been on creating value for shareholders in the commercial property market where we are experienced investors. We feel that the market in secondary commercial properties has limited growth potential over the next few years, with investment focus remaining on well located prime properties. The limited availability of capital in the Company, coupled with our restricted ability to raise equity, curtails any possibility of investing in prime properties. Furthermore, debt is difficult to obtain for secondary commercial properties as there are fewer lenders in the market. We therefore believe that the best course of action for shareholders is to conduct an orderly disposal of the Company’s assets.

As at 31 December 2010 the net asset value per share was 476.9p and we intend to maximise returns to shareholders by achieving a carefully planned disposal programme of all the assets.

Results for Year Ended 31 December 2010

The consolidated revenue operating profit for the year was £370,000 compared to £83,000 for 2009. The figure for 2010 did however, as reported in the Chairman’s Statement, include a trading profit of £591,000 in respect of the sale of our development site at Curtis Road, Dorking.

The major variances between the two years can be summarised as follows:

Dividend and interest income has increased by £246,000 mainly as a result of investing in corporate bonds following the disposal of the Hallin Marine shareholding.

Rental income has decreased substantially by £677,000 following our policy to obtain vacant possession at both Newton-le-Willows, where we already have residential planning consent, and Vincent Lane, Dorking where we are seeking planning for alternative uses.

Property outgoings have been well controlled despite the additional vacancies and show a decrease of £139,000 over the expenditure for 2009 primarily as a result of lower costs being incurred for empty rates.

Administrative overheads have increased by £239,000, largely due to increased staff costs as a result of additional head count, salary reviews and redundancy costs, in total amounting to £146,000. In addition it was necessary to increase the provision against a specific loan by £40,000.

Finance costs were slightly down on the levels for 2009 as the comparative figure includes the benefit of £146,000 discount on a loan repayment. The adjusted decrease of some £81,000 is largely due to the much lower value attributed to the movement in the fair value of interest rate swaps in 2010 compared with 2009.

Property Portfolio

The property portfolio consists of five investment properties, which were independently valued at a total of £28,620,000, and one trading property which is shown as a current asset at cost. All the properties now have specific exit strategies to generate maximum value prior to sale. We intend to enhance value through (i) planning gain at Newton-le-Willows and Vincent Lane, Dorking (ii) either selling or letting Northern Gateway at Knowsley and (iii) continuing with our refurbishment and letting plans at Southern Gateway, Speke.

Securities Portfolio

We have a number of investments where we anticipate further growth before disposal. These include:

  • Avesco Group plc whose shares have recovered significantly in the year, resulting in our investment having increased in value from £80,000 at 1 January 2010 to £512,000 at 31 December 2010. The Company has been part of a consortium that has successfully litigated against Disney but, until the claim is finally settled, we believe that the share price will remain undervalued;
  • SpaceandPeople plc where the company continues to progress with some excellent results for the 14 month period ended 31 December 2010 which has subsequently further boosted the value of our investment since year end; and
  • Memorial Holdings Limited where the investment in Kemnal Manor cemetery in the London Borough of Bromley appears to be on course for the opening of the first phase by the end of this year which we anticipate will result in a valuation for our investment in excess of that at the year end.

CHIEF EXECUTIVE’S REPORT - Continued

Loan Book and Cash at Bank

As at 31 December 2010 we had loans of £17.7m and cash in hand of £2.8m. The property loan due for repayment during the year to 31 December 2011 amounts to £2.17m but we do not anticipate a problem renewing this loan for a further period to extend the cover from the date of expiry to projected sale of the relevant property. Excluding the working capital overdraft facility of £2.2m (2009: £8.3m), as at year end the loan to value percentage on our total property portfolio was 53% (2009: 63%).

Future Strategy

We believe that we can extract further value for shareholders from the Group’s investment portfolio over the next two years and our small team will continue to explore all opportunities to maximise the exit value.

             
19 April 2011 Derek Lucie-Smith

Chief Executive

 

GRESHAM HOUSE PLC
PRELIMINARY FINANCIAL STATEMENT
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2010

          2010         2009  
Revenue Capital Total Revenue Capital Total
£' 000 £' 000 £' 000 £' 000 £' 000 £' 000
Income:
Dividend and interest income 446 - 446 200 - 200
Rental income 1,435 - 1,435 2,112 - 2,112
Sale of development in hand 3,025 - 3,025 - - -
Other operating income 186 - 186 62

-

62
Total Income 5,092 - 5,092 2,374 - 2,374
Operating Costs:
Costs of sale of development in hand (2,434) - (2,434) (102) - (102)
Property outgoings (1,068) - (1,068) (1,207) - (1,207)
Administrative overheads (1,221) (297) (1,518) (982) - (982)
Net trading profit/(loss) 369 (297) 72 83 - 83
Gains/(losses) on investments:
Gains on investments held at fair value - 813 813 - 5,872 5,872
Movement in fair value of property investments - 490 490 - (1,524) (1,524)
Profit on disposal of property, plant & equipment 1 - 1 - - -
Group operating profit 370 1,006 1,376 83 4,348 4,431
Finance costs (1,039) - (1,039) (974) - (974)
Share of joint venture operating loss (32) - (32) (10) - (10)
Group and share of joint venture operating profit/(loss) before taxation (701) 1,006 305 (901) 4,348 3,447
Taxation - - - - - -
Profit/(loss) and total comprehensive income (701) 1,006 305 (901) 4,348 3,447
 
Attributable to:
Equity holders of the parent (217) 1,173 956 (1,012) 4,366 3,354
Non-controlling interest (484) (167) (651) 111 (18) 93
(701) 1,006 305 (901) 4,348 3,447
Basic and diluted earnings per ordinary share (4.3p) 23.5p 19.2p (20.7p) 89.4p 68.7p
 

GRESHAM HOUSE PLC
PRELIMINARY FINANCIAL STATEMENT
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2010

Notes

(i) The total column of this statement represents the Group’s Statement of Comprehensive Income, prepared in accordance with IFRSs.

(ii) The revenue and capital columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.

(iii) All revenue and capital items in the above statement derive from continuing operations.

(iv) Dividends - Ordinary shares:

Proposed final dividend of 1p per share (2009: 1p) payable on 3 June 2011 to shareholders on the register at 13 May 2011 at a total cost of £53,699 (2009: £48,819).

(v) The summary of results for the year ended 31 December 2010 does not constitute statutory accounts within the meaning of s435(1) of the Companies Act 2006. The financial information has been extracted from the Group’s full statutory accounts for the year ended 31 December 2010 in which the auditors’ report was neither qualified, nor contained any reference to emphasis of matter, nor any statement under section 498(2) or section 498(3) of the Companies Act 2006. The full statutory accounts will be available on the Company’s website www.greshamhouse.com and will be posted to shareholders shortly.

(vi) The basic and diluted earnings per share figure is based on the net profit for the year attributable to the equity shareholders of £956,000 (2009: £3,354,000) and on 4,990,176 (2009: 4,881,880) ordinary shares, being the weighted average number of ordinary shares in issue during the period.

There are no shares deemed to have been issued as at 31 December 2010. The calculation for diluted earnings per share would have included 8,859 (2009: 8,908) shares deemed to have been issued at nil consideration as a result of options granted but these have not been recognised as they would increase the profit per share.

GRESHAM HOUSE PLC
PRELIMINARY FINANCIAL STATEMENT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

      Year ended 31 December 2010    

Ordinary share capital

Share premium Share option reserve   Capital reserve   Retained earnings   Equity attributable to equity shareholders Non-controlling interest Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 31 December 2009 1,220 847 14 34,729 (13,683) 23,127 424 23,551
Profit/(loss) for the period being total comprehensive income for the period - - - 1,173 (217) 956 (651) 305
Ordinary dividends paid - - - - (49) (49) - (49)
Issue of shares (net of costs of £46,000) 122 1,455 - - - 1,577 - 1,577
Share based payments - - - - - - - -
Balance at 31 December 2010 1,342 2,302 14 35,902 (13,949) 25,611 (227) 25,384

 

Year ended 31 December 2009
Ordinary share capital Share premium Share option reserve Capital reserve Retained earnings Equity attributable to equity shareholders Non-controlling interest Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance as at 31 December 2008 1,220 847 42 30,363 (12,650) 19,822 331 20,153
Profit/(loss) for the period being total comprehensive income for the period - - - 4,366 (1,012) 3,354 93 3,447
Ordinary dividends paid - - - - (49) (49) - (49)
Share based payments - - (28) - 28 - - -
Balance at 31 December 2009 1,220 847 14 34,729 (13,683) 23,127 424 23,551
 

GRESHAM HOUSE PLC
PRELIMINARY FINANCIAL STATEMENT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2010

     
2010       2009
Assets £'000 £'000
Non current assets
Investments – securities 12,386 12,723
Property investments 28,620 24,600
Investment in joint venture 908 -
Other investments - -
Property, plant and equipment - 2
Total non current assets 41,914 37,325
 
Current assets
Trade and other receivables 268 504
Accrued income and prepaid expenses 609 714
Other current assets 1,008 3,408
Cash and cash equivalents 2,831 9,043
Total current assets 4,716 13,669
Total assets 46,630 50,994
 
Current liabilities
Trade and other payables 3,186 1,432
Short term borrowings 14,634 19,037
Other financial liabilities 88 -
Total current liabilities 17,908 20,469
 
Total assets less current liabilities 28,722 30,525
 
Non-current liabilities
Long term borrowings 3,110 6,707
Other financial liabilities 228 267
Deferred taxation - -
3,338 6,974
   
Net assets 25,384 23,551
 
Capital and reserves
Ordinary share capital 1,342 1,220
Share premium 2,302 847
Share option reserve 14 14
Capital reserve 35,902 34,729
Retained earnings (13,949) (13,683)
Equity attributable to equity shareholders 25,611 23,127
Non-controlling interest (227) 424
Total equity 25,384 23,551
 
Basic and diluted net asset value per ordinary share 476.9p 473.7p
 

Notes

Basic and diluted net asset value per ordinary share is based on Equity attributable to equity shareholders at the year end and on 5,369,880 (2009: 4,881,880) ordinary shares being the number of ordinary shares in issue at the year end. No shares were deemed to have been issued at nil consideration as a result of options granted.

The calculation for diluted net asset value per ordinary share would have included 8,859 (2009: 8,908) shares deemed to have been issued at nil consideration as a result of options granted but these have not been recognised as they would increase the net asset value per share.

GRESHAM HOUSE PLC
PRELIMINARY FINANCIAL STATEMENT
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2010

             
2010 2010 2009     2009
£'000 £'000 £'000 £'000
Cashflow from operating activities
Investment income received 63 142
Interest received 73 58
Rental income received 1,635 1,819
Other cash payments (2,172) (2,053)
Net cash generated from operations (401) (34)
 
Interest paid on property loans (838) (717)
(838) (717)
 
Net cash flows from operating activities (1,239) (751)
 
Cash flows from investing activities
Purchase of investments (9,346) (1,252)
Investment in joint venture (940) (10)
Sale of investments 10,197 1,089
Sale of tangible fixed assets 3 980
Expenditure on investment properties (1,191) (374)
Sale of developments in hand 3,025 -
Purchase of developments in hand (249) (234)
1,499 199
Cash flows from financing activities
Repayment of loans (10,222) (18,090)
Receipt of loans 2,222 25,895
Share capital issued 1,577 -
Equity dividends paid (49) (49)
(6,472) 7,756
 
(Decrease)/increase in cash and cash equivalents (6,212) 7,204
 
Cash and cash equivalents at start of period 9,043 1,839
   
Cash and cash equivalents at end of period 2,831 9,043
 

NOTES TO THE GROUP STATEMENT OF CASH FLOWS

 
2010     2009
£’000 £’000
Revenue return before taxation (701) (901)
Interest payable 877 1,052
Profit on disposal of property, plant & equipment (1) -
Depreciation of property, plant & equipment - 1
Share of joint venture losses 32 10
207 162
(Increase)/decrease in current assets (158) 142
Decrease in current liabilities (450) (338)
(401) (34)
 

GRESHAM HOUSE PLC
PRELIMINARY FINANCIAL STATEMENT
SEGMENTAL REPORTING

  Investment     Property Investment     Elimination     Consolidated
2010     2009 2010     2009 2010     2009 2010     2009
Revenue £’000

£’000

£’000 £’000 £’000 £’000 £’000

£’000

External income 479 183 4,599 2,133 - - 5,078 2,316
Inter – segment income 916 981 - - (916) (981) - -
Total revenue 1,395 1,164 4,599 2,133 (916) (981) 5,078 2,316
 
Gain on investments at fair value 813 5,872 - - - - 813 5,872
Movement on property investments at fair value - - 490 (1,524) - - 490 (1,524)
Profit on disposal of property, plant and equipment - - 1 - - - 1 -
Total income and gains 2,208 7,036 5,090 609 (916) (981) 6,382 6,664
 
Segment expenses (47) - (3,502) (1,309) - - (3,549) (1,309)
Inter – segment expense - - (916) (981) 916 981 - -
Interest expense (113) - (926) (974) - - (1,039) (974)
Segment profit/(loss) 2,048 7,036 (254) (2,655) - - 1,794 4,381
Unallocated corporate expenses (1,471) (982)
Operating profit 323 3,399
Share of joint venture loss (32) (10)
Interest income 14 58
Profit before taxation 305 3,447
 
The Group’s policy is to invest in both securities and commercial properties. Accordingly management reporting is split on this basis under the headings “Investment” and “Property Investment” respectively. Inter-segment income consists of management fees and interest on inter-company loans. Unallocated corporate expenses relate to those costs which cannot be readily identified to either segment.

 

All activity and revenue is derived from operations within the United Kingdom. One customer accounted for £3,025,000 of the external income for the Property Investment segment. Property operating expenses relating to property investments that did not generate any rental income were £nil (2009: £117,000).

 
Other Information Investment Property Investment Unallocated Consolidated
2010 2009 2010 2009 2010 2009 2010 2009
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Segment assets 16,413 22,007 30,217 28,987 - - 46,630 50,994
Segment liabilities (2,464) (8,578) (18,782) (18,865) - - (21,246) (27,443)
13,949 13,429 11,435 10,122 - - 25,384 23,551
Capital expenditure 9,297 1,252 3,530 374 - - 12,827 1,626
Depreciation - - - 1 - - - 1
Non-cash expenses other than depreciation - - - - - - - -
All non current assets are located within the United Kingdom.
 

GRESHAM HOUSE PLC
PRELIMINARY FINANCIAL STATEMENT

The principal accounting policies adopted by the Group are fundamentally the same as the previous year other than the Basis of preparation note which is reproduced in full below. Full disclosure of the principal accounting policies and related party transactions are included in the financial statements which will be available on the Company’s website www.greshamhouse.com shortly.

Basis of preparation

The financial statements of the Group and the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

During 2010 the following accounting standards and guidance were adopted by the Group:

(i) IAS 27 Consolidated and separate financial statements.

The amendment has changed the treatment of recognising the amount of losses attributable to the minority (non-controlling) interests. With effect from 1 January 2010 total comprehensive income is attributed to the owners of the parent and to the non-controlling interest without restriction even if this results in the non-controlling interests having a deficit balance.

The following standards and interpretations were also adopted by the Group and were mandatory for the accounting period, but either had no material impact on the Group’s financial statements or were not relevant to the operations of the Group:

(i) IFRS 3 Business combinations

(ii) IFRIC 17 Distributions of non-cash assets to owners

(iii) IFRIC 18 Transfers of assets from customers

(iv) Amendment to IFRS 1 First time adoption of IFRS

(v) Amendment to IAS 39 Financial instruments: Recognition and measurement

The principal accounting policies adopted are set out below. Where presentational guidance set out in the Statement of Recommended Practice (“the SORP”) for investment trusts issued by the Association of Investment Companies (“the AIC”) is consistent with the requirements of IFRS and appropriate in the context of the Company’s activities, the directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

Other standards and interpretations have been issued which will be effective for future reporting periods but have not been adopted in these financial statements as set out in note (v).

As stated in the Chairman’s Statement and the Chief Executive’s Report a resolution will be put to the shareholders at the forthcoming annual general meeting in order to approve an amendment to the Group’s investment objective to enable the orderly realisation of the Group’s assets over a period of approximately two years with a view to returning capital to shareholders thereafter. Should the objective be amended in this way then the Group will technically cease to be a going concern as it will be the intention to realise assets and return capital to shareholders in due course. As formal approval by the shareholders is pending as at the date of approving the financial statements, the directors consider that it remains appropriate to prepare the financial statements on a going concern basis. In the directors’ opinion the valuation basis applied to the assets and liabilities is such that there would be no material adjustments to the financial statements if they had been prepared on a different basis.

The financial statements highlight that the Group has loans of £14.6m due within one year. The directors’ forecasts of the Group’s cash facilities has assumed the sale of certain investments sufficient to repay these loans as and when they fall due other than the Co-operative Bank facility of £10.2m which is technically repayable on demand but has an expiry date of 31 May 2012 and a working capital facility which is in the process of being renewed.

On the basis that (i) confirmation has been received from the Co-operative Bank plc that it is not their current intention to call the loan facility; (ii) confirmation has been received from Royal Bank of Scotland that it is their intention to extend the loan that is due to expire in May 2011; and (iii) the current cash resources within the Group as at 31 March 2011 of £2.9m, these financial statements have been prepared on a going concern basis.

In the event that the investments are not sold at the time envisaged by their forecasts the directors believe that the Group has sufficient assets that could be sold, or alternative sources of finance secured thereon, to fund any timing shortfall.

After making enquiries, and having due regard to the above, the directors believe that the Group has access to sufficient working capital for the foreseeable future and therefore remains a going concern.

GRESHAM HOUSE PLC
PRELIMINARY FINANCIAL STATEMENT
STATEMENT OF THE DIRECTORS’ RESPONSIBILITIES

The directors are responsible for preparing the report of the directors, the directors' remuneration report and the financial statements in accordance with applicable law and regulations. They are also responsible for ensuring that the annual report includes information required by the Listing Rules of the Financial Services Authority.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the Group financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and have elected to prepare the parent company financial statements in accordance with those standards. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period. In preparing these financial statements the directors are required to:

  • select suitable accounting policies and then apply them consistently;
  • make judgments and estimates that are reasonable and prudent;
  • state whether the financial statements have been prepared in accordance with IFRSs as adopted by the European Union; and
  • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the Group financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation and the parent company financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements and other information included in annual reports may differ from legislation in other jurisdictions.

The directors confirm, to the best of their knowledge:

  • that the Group financial statements, which have been prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group; and
  • that the management report included within the report of the directors, the Chairman’s Statement, the Chief Executive’s Report and the Investment Policy includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
           
Further information:
 
Derek Lucie-Smith (Chief Executive, Gresham House plc) 020 7590 7500
Brian Hallett (Finance Director, Gresham House plc) 01489 570861
Hugh Field (Arbuthnot Securities Limited) 020 7012 2000
 

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