Business review

A review of the development of the Group’s business during the year, the principal risks and uncertainties facing the Group and its future prospects are included in the Chairman’s Statement and the Business Review which should be read in conjunction with this report. The information which as required by Section 417 of the Companies Act 2006 may be found in Business Review, in the Corporate Governance Report and in the Corporate Responsibility Report.

Principal activities

The Group is engaged in investment in properties with primarily commercial uses and their improvement through refurbishment and active management. The Group, excluding its interest in Longmartin Properties Limited, is subject to taxation as a REIT.

Results and dividends

The results for the year ended 30 September 2011 are set out in the Group Statement of Comprehensive Income.

An interim dividend of 5.50p per Ordinary share was paid on 1 July 2011 (2010: 5.00p).

The Directors recommend a final dividend in respect of the year ended 30 September 2011 of 5.75p per Ordinary share (2010: 5.25p), making a total dividend for the year of 11.25p per Ordinary share (2010: 10.25p). If authorised at the 2012 Annual General Meeting, the dividend will be paid on 17 February 2012 to members on the register at the close of business on 27 January 2012. The dividend will be paid as a PID.

The PID will be paid after the deduction of withholding tax at the basic rate (currently 20%). However, certain categories of shareholder may be entitled to receive payment of a gross PID if they are UK resident companies, UK public bodies, UK pension funds and managers of ISAs, PEPs and Child Trust Funds. Information together with the relevant forms which must be completed and submitted to Company’s registrar for shareholders who are eligible to receive gross PIDs is available in the Investor Relations section of the Company's website.

Share capital

During the year, 23,413,972 shares were issued. 713,972 shares were issued at prices in the range £1.80 to £2.91 on the exercise of employee share options and 22,700,000 shares were issued in respect of a Placing of Ordinary shares on 8 March 2011 at £4.50. At 30 September 2011, the Company’s issued share capital comprised 250,498,809 Ordinary shares of 25p each.

The Company has one class of Ordinary shares. All shares rank equally and are fully paid. No person holds shares carrying special rights with regard to control of the Company. There are neither restrictions on the transfer of shares nor the size of a holding, which are both governed by the Articles of Association and prevailing legislation. The Directors are not aware of any agreements between holders of shares in the Company that may result in restrictions on the transfer of shares or on voting rights.

Results and dividends

The results for the year ended 30 September 2011 are set out in the Group Statement of Comprehensive Income on page 64. An interim dividend of 5.50p per Ordinary share was paid on 1 July 2011 (2010: 5.00p).

The Directors recommend a final dividend in respect of the year ended 30 September 2011 of 5.75p per Ordinary share (2010: 5.25p), making a total dividend for the year of 11.25p per Ordinary share (2010: 10.25p). If authorised at the 2012 Annual General Meeting, the dividend will be paid on 17 February 2012 to members on the register at the close of business on 27 January 2012. The dividend will be paid as a PID. The PID will be paid after the deduction of withholding tax at the basic rate (currently 20%). However, certain categories of shareholder may be entitled to receive payment of a gross PID if they are UK resident companies, UK public bodies, UK pension funds and managers of ISAs, PEPs and Child Trust Funds. Information together with the relevant forms which must be completed and submitted to Company’s registrar for shareholders who are eligible to receive gross PIDs is available in the Investor Relations section of the Company’s website.

Directors

The rules that the Company has governing the appointment and replacement of Directors are contained in its Articles of Association. Changes to the Articles of Association are only permitted in accordance with legislation and must be approved by a special resolution of shareholders.

The Directors of the Company who served throughout the year ended 30 September 2011 and up to the date of the financial statements, and their interests in the Ordinary share capital of the Company, were as follows:

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There have been no changes to Directors’ shareholdings between 30 September 2011 and the date of this Report.

Details of options granted to executive Directors under the Group’s Share Schemes are set out in the Directors’ Remuneration Report.

No member of the Board had a material interest in any contract of significance with the Company, or any of its subsidiaries, at any time during the year.

Substantial shareholdings

At 28 November 2011, the Company had been notified, in accordance with the UK Listing Authority’s Disclosure Rules and Transparency Rules, that the following nine shareholders held, or were beneficially interested in, 3% or more of the Company’s issued share capital amounting to 49.17%:

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Payment of suppliers

The policy of the Company and Group is to settle suppliers’ invoices within the terms of trade agreed with individual suppliers. Where no specific terms have been agreed, payment is usually made within one month of the invoice for goods or services. At 30 September 2011, the Company’s creditors in respect of invoiced supplies was 27 days purchases (2010: 22 days) and the Group’s creditors in respect of invoiced supplies represented 24 days purchases (2010: 22 days).

Purchase of own shares

The Company was granted authority at the 2011 Annual General Meeting to make market purchases of its own Ordinary shares. This authority will expire at the conclusion of the 2012 Annual General Meeting and a resolution will be proposed to seek further authority. No Ordinary shares were purchased under this authority during the year or in the period from 1 October 2011 to 28 November 2011.

Directors’ indemnities and directors’ and officers’ liability insurance

The Company’s agreement to indemnify each of the Directors against any liability incurred by the Director in the course of their office to the extent permitted by law remains in force. The Group maintains Directors’ and Officers’ Liability Insurance of £10 million.

Charitable and other donations

During the year, the Group made charitable donations in cash amounting to £48,000 (2010: £46,000). The principal charities supported by the Group together with a description of the Group’s community investment is set out in the Corporate Responsibility Report on pages 37 to 41. The Group measures its community investment in line with the London Benchmarking Group guidance. For the year ended 30 September 2011 this was assessed as £356,000. Voluntary contributions to public realm works are excluded from this figure.

The Group made no donations of a political nature during the year. The Group’s policy is not to make political donations but deems it prudent for the Company and its subsidiaries to continue to seek annual authority to do so from the Company’s shareholders at its Annual General Meeting.

Employment and environmental matters

The Group’s employment and environmental policies are described in the Corporate Responsibility.

The Group employs nineteen staff. KPIs relating to employees are included in the Corporate Responsibility Report. Further information may be found in the Corporate Governance and Corporate Responsibility reports and also on the Group’s website.

Financial instruments

The information required in respect of financial instruments as required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008 is given in note 19 of the notes to the financial statements .

Change of control

Each of the Group’s bank facility agreements and the Longmartin joint venture arrangement contains provisions entitling the counterparty to terminate the contractual agreements in the event of a change of control of the Group. The Group’s share schemes contain provisions relating to the vesting and exercising of options in the event of a change of control of the Group.

Contracts and other arrangements

The Group has no contracts or other arrangements which are considered essential to the Group’s business.

Authorisation of directors’ conflicts of interests Directors are required to notify the Company of any conflict or potential conflict of interest. They make an annual declaration to the Company that during the year no conflicts have arisen. The Board confirms that no conflicts have been identified or notified to the Company during the year and accordingly the Board has not authorised any conflicts of interest as permitted by the Company’s Articles of Association.

Independent auditors

A resolution for the reappointment of PricewaterhouseCoopers LLP as auditors to the Company will be proposed at the 2012 Annual General Meeting. The Board, on the advice of the Audit Committee, recommends their reappointment and PricewaterhouseCoopers LLP have consented to act.

2012 Annual General Meeting

The 2012 Annual General Meeting will include, as Special Business, resolutions dealing with authority to issue shares, disapplication of pre-emption rights, authority to purchase the Company’s own shares, authority to make political donations and authority to call a general meeting on not less than 14 days notice. The resolutions are set out in the Notice of Meeting together with explanatory notes which are contained in a separate circular to shareholders which accompanies this Annual Report.

Disclosure of information to auditors

Each Director has confirmed that:

• so far as they are aware, there is no relevant audit information of which the company’s auditors are unaware; and
• they have taken all the steps that they ought to have taken as a director in order to make themself aware of any relevant audit information and to establish that the company’s auditors are aware of that information. This confirmation is given in accordance with section 418 of the Companies Act 2006.

By Order of the Board

Penny Thomas Company Secretary

30 November 2011