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For the year ended 30 September 2004.

The directors present their report and the audited financial statements for the year ended 30 September 2004.

Principal activities

During the year the group has continued its activities of property trading and development.

Review of business development and prospects

Development of the group’s activities and its prospects are reviewed in the chairman’s statement and the chief executive’s statement.

Results for the year

The results of the group are set out in the consolidated profit and loss account, which shows a profit on ordinary activities after taxation for the financial year of £33.0m (2003: £29.4m).

An interim dividend of 4.04p per share (2003: 3.51p) was paid on 23 July 2004 amounting to £1.0m (2003: £0.8m) and the directors recommend the payment of a final dividend of 19.20p per share (2003: 12.80p), to be paid on 4 March 2005, amounting to £4.7m (2003: £3.2m). The profit, after dividend, of £27.3m (2003: £25.3m) will be transferred to reserves.

Directors

Directors’ and other interests

The interests of the directors in the shares of the company at 30 September 2004 and 7 December 2004 (or date of resignation, if earlier), with comparative figures as at 1 October 2003 (or date of appointment, if later), are as follows:

  Ordinary shares of 25p each (thousands)
  Beneficial Non-beneficial
  1 Oct 2003 30 Sept 2004 7 Dec 2004 1 Oct 2003 30 Sept 2004 7 Dec 2004
Robert Dickinson 222 202 202 494 457 457
Stephen Dickinson 780 771 771 576 541 541
Rupert Dickinson 182 249 249 46 43 42
Robin Herbert 50 50 50
Andrew Cunningham 73 74 74
Nichola Pease 71 48 48 37 37 37
Robert Hiscox 2,500 2,500 2,500
Sean Slade 40 32 32
John Barnsley 2 3 3
Robin Broadhurst
  1,420 1,429 1,429 3,653 3,578 3,577

Shares held in trust of which Robert Dickinson is a trustee, included in the above beneficially owned by:

  Ordinary shares of 25p each (thousands)
  Beneficial Non-beneficial
  1 Oct 2003 30 Sept 2004 7 Dec 2004 1 Oct 2003 30 Sept 2004 7 Dec 2004
Stephen Dickinson 2 1 1
Rupert Dickinson 2 1 1
Andrew Cunningham 2 1 1
Sean Slade 2 1 1

Shares held in trust of which Robert Dickinson and Stephen Dickinson are both trustees, included in the above non-beneficial holdings:

  - - - 14 14 14

Save as disclosed above, as at 7 December 2004, the company is aware of the following interests amounting to 3% or more in the company’s shares:

  Holding Holding
  (thousands) %
Schroder Investment Management Limited* 2,220 8.95
Aberforth Partners* 1,252 5.05
Barclays Global Investors Limited* 1,067 4.30
F & C Asset Management Plc* 1,001 4.03
Morley Fund Management Limited* 877 3.53
Henderson Global Investors* 806 3.25
*Shares held by funds managed or advised by the company indicated and/or its subsidiaries.
The company is not aware of any other substantial interests amounting to 3% or more.

Retirement and rotation of directors

Robin Herbert and Nichola Pease will retire from the board of directors at the annual general meeting to be held in February 2005. Robin Broadhurst was appointed a director on 26 February 2004, and in accordance with the Articles of Association, will offer himself for re-election at the annual general meeting. Stephen Dickinson, Robert Hiscox and Andrew Cunningham retire by rotation and, being eligible, offer themselves for re-election at the annual general meeting. Robert Dickinson is standing for re-election again this year. The Companies Act 1985 requires him to do so as he attained the age of 70 since the last annual general meeting in February 2004. Stephen Dickinson has also reached the age of 70.

On 12 November 2004 Sean Slade resigned from the board.

Directors’ interests in significant contracts

No directors were materially interested in any contract of significance.

Directors’ insurance

The group maintains insurance for Grainger Trust plc’s directors in respect of their duties as directors.

Statement of directors’ responsibilities

The directors are required by UK Company law to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the company and the group as at the end of the financial year and of the profit or loss of the group for that period.

The directors confirm that suitable accounting policies have been used and applied consistently and that reasonable and prudent judgements and estimates have been made in the preparation of the financial statements for the year ended 30 September 2004. The directors also confirm that applicable accounting standards have been followed and that the financial statements have been prepared on the going concern basis.

The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and the group and to enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and of the group, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Acquisitions

There were no material corporate acquisitions in the year. Details of minor acquisitions are given in note 26 of the Financial Statements section.

Creditor payment policy

In respect of the financial year following that covered by this report, it is the group’s policy to pay suppliers in accordance with their normal terms and conditions of trading. Payment in respect of the purchase of property is subject to and will comply with contractual terms. Trade creditors existing at 30 September 2004 relating to purchases of property stock generally complete 28 days after exchange of contracts. Trade creditor days relating to other trade creditors of the company and group were calculated as 30 days (2003: 38 days).

Charitable donations

During the year the group made charitable donations amounting to £25,455 (2003: £4,480).

Health and safety

The company seeks to achieve the highest standards in respect of health and safety of employees, and the safety of tenants. Consultants are employed to ensure that the company complies with health and safety regulations and each year 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 issued.

Employment of disabled persons

The company gives full and fair consideration to applications for employment made by disabled persons, having regard to their particular aptitudes and abilities. In the event of an employee becoming disabled, every effort is made to ensure that their employment within the company continues and that appropriate training is arranged where necessary. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Auditors

PricewaterhouseCoopers LLP have expressed their willingness to continue in office as auditors to the company and group. A resolution to reappoint them as auditors to the company will be proposed at the next annual general meeting.

Issue of shares

As disclosed in note 20 to the financial statements, the company issued 48,307 25p ordinary shares during the year for an aggregate consideration of £132,000.

By order of the board

Marie Glanville signature
Marie Glanville
Company Secretary
21 December 2004

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