Panther Securities Regulatory News (PNS)

Panther Securities P.L.C.

Final Results

Year ended 31 December 2010

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ANNUAL FINANCIAL REPORT ANNOUNCEMENT

In accordance with the Disclosure and Transparency Rules, we set out below the extracts from the 2010 Annual Financial Report in un-edited full text.

CHAIRMAN'S STATEMENT

RESULTS

I am delighted to be able to present extremely satisfactory results for the year ended 31st December 2010. Our pre tax profits under the International Financial Reporting Standards were £6,401,000 compared to last year's pre tax £2,953,000.

Our rental income receivable during the year was £7,717,000 compared to £7,380,000 the previous year and after taking account of our many recent purchases is currently running at a rate of nearly £8,500,000 per annum.

Our entire property portfolio was independently valued by G L Hearn Chartered Surveyors as at 31st December 2010 and produced a surplus of £4,039,000 compared to last year's deficit of £6,216,000. However, this revaluation surplus was counter-balanced by a further deficit of £2,549,000 in our financial derivatives liability compared to the credit of £5,277,000 last year. You all know my view that none of these figures should be brought into the consolidated 'trading' income statement and I will not bore you again with the reasons why.

During the year we invested £8,450,000 in new acquisitions which are detailed below and a further £750,000 in the equipment that came with the film studio purchase although a small part of this equipment was sold soon after the purchase for £200,000. As mentioned above, these purchases, mostly made late in the year, should eventually add over £1,000,000 per annum to our rent roll.

During the year we sold 9,252,000 ordinary shares in Elektron PLC netting £3,172,000 giving us a profit on cost of £2,473,000. We still hold 2,367,000 ordinary shares and subsidiaries of Elektron PLC remain valued tenants at four of our factories.

During the year we purchased just under 20% of the equity, at a cost of £1,642,000, in Beale PLC which is a department store group established in 1881. This purchase, together with a strong increase in some of our other quoted holdings, led to the portfolio having a year end market value of £6,452,000 (compared to £4,651,000 at 31st December 2009) even after the substantial disposal of Elektron PLC's shares mentioned above.

We were particularly active in property acquisitions during the year 2010.

13-18 Skinnergate, Darlington

In April we acquired a 9,000 sq ft freehold retail investment at a cost of £515,000. This was let to Argos at £54,000 per annum and although the lease had expired, Argos continues to trade from the unit and we believe they will continue as tenants for the foreseeable future.

204-205 High Street, Burton-upon-Trent

In July the company purchased for £295,000 this vacant freehold double retail unit with a basement and two self contained floors above in a prime pedestrianised retail position. Tunnel Shoes, our joint venture company, is trading successfully from the unit.

Charles House, Premier House and 78 Darlington Street, Wolverhampton

In August the company purchased the freehold of this mixed use, retail, office and leisure property of approximately 70,000 sq ft standing on 1.2 acres of land, at a cost of £1,500,000, excluding incidental costs of acquisition. It is currently producing a rental of £278,000 per annum gross (net approximately £195,000) from 16 tenants and has potential to increase the income.

79 High Street, Ramsgate

In August we purchased this small freehold vacant retail unit with upper parts at a cost of £78,000. There is potential for additional site development as it is adjacent to 81-85 High Street, which we already own, and which has full planning permission for 20 flats.

Merton Studios

In August the Company acquired the freehold site at Merton Studios, Bosun House, South Wimbledon, SW19 from FremantleMedia Limited which encompasses over 200,000 sq ft of brick built warehouse on 4.5 acres of land.

Until recently this building was used as a film studio for the production of the television series 'The Bill'. The entire contents of the property were included with the deal and includes numerous sets, all related equipment and also an estimated 45,000 costumes previously used between 1970s to date in the television series which are available for hire. The purchase price for the freehold site, together with the stock, equipment and fixed assets contained within was £4,750,000 paid in cash plus stamp duty.

The Group has invested £150,000 for a 25% minority interest in the equity of a new company (outside the Group), Wimbledon Studios Limited, which will run the former Merton Studios business as an independent film studio. The other equity shareholders include myself, the management team of the film studios and other outside investors. The management company structure was arranged so that the management company had separate risk capital and allowed the entrepreneurial team who introduced the proposal sufficient equity to make them work with the unbounded enthusiasm that an owner manager usually has. This management company has been granted a 10 year lease on the studio buildings at a rent of £490,000 p.a., the initial year being rent free. They also lease the stock and fixed assets contained within the building on a finance lease that is at a commercial rate to us. The Group believes Wimbledon Film Studios will provide a good long term property investment, with considerable potential.

60 High Street, Sittingbourne

In September the Group purchased this vacant freehold from receivers for £230,000. The property is a former bank sited in the main shopping area in the centre of the town and benefits from a rear storage building which was formerly a cottage.

59/61 High Street, Sittingbourne

In October we acquired from a mortgagee, a freehold double frontage retail shop and upper parts for £223,000 in the main shopping area of the town. This was purchased vacant and will be suitable, after minor works, to lease to our joint venture retailer, Tunnel Shoes, who will take about one third of the property.

Union Street, Glasgow

In October we purchased a feuhold multi-let retail and leisure building for £540,000, from an L.P.A. receiver. The gross rental is £71,000 and the net rental is approximately £65,000.

49/61 High Street, Croydon

In November the Group purchased this long-leasehold property from the receiver for £562,000. It is a large leisure unit formerly used as a bar/club with 12,000 sq ft over three floors, of which 7,350 sq ft is on the ground floor. This was purchased vacant and could be let to one user or split into 4 or 5 retail units. It is currently under offer to a substantial tenant who is currently seeking planning permission for a different use.

90 Market Street, Eastleigh

In December we acquired a freehold vacant shop and upper part in the central trading position in this town. The cost was approximately £200,000 and the property is now let at £25,000 per annum with an option for the tenant to purchase.

Disposals

Tenbury Wells

This is a small site adjoining a 50,000 sq ft vacant factory standing on 4 acres. This land was surplus to the potential use of the factory and was sold at approximately book cost of £350,000.

Development Progress

Our development application for High Street, Broadstairs received consent in January 2011 and we are now marketing the shop unit. When we secure a pre let we will begin development of both the shop unit and ten flats.

The Southend application for a renovated quadruple shop with 45 student units above was refused on grounds that minor amendments were required. As is usual for these self-serving useless bureaucrats, they failed to contact either us or the architects during the period beforehand when the amendments could have easily been made before going before the committee. The application therefore has to be resubmitted amidst more long delays to the detriment of the owner and the community at large. Additionally, whilst the vacant building is waiting to be reused, vacant rates are now chargeable. This is disgraceful.

However, of more importance is our outline planning application on our Holloway Head, Birmingham site which at long last has been approved.

The outline approval is for a mixed use development totalling 450,000 sq ft which includes a car showroom, casino, restaurants, 100,000 sq ft offices and a new headquarters building for the Girl Guides, 131 bedroom three star hotel and a maximum number of 303 flats plus appropriate car parking.

Almost a year ago our scheme application had to be withdrawn as the Planning Officer had insufficient time to prepare her report. Of course, new regulations came in and various minor changes had to be made which meant waiting another year to obtain approval.

As always the developers and local community suffer most, Birmingham suffering more than most under their politically correct yet management incorrect style of government.

This development site is about 85% owned by us and the majority of the remaining area is owned by the Girl Guides Association, with whom we have agreed to provide a new, larger and more suitable modern day headquarters as part of the scheme.

We consider this development is probably too large for us to carry out on our own and we will probably look for a development partner with the experience, expertise and financial muscle better able to carry out this seventy five to one hundred million pound scheme.

Tenant Activity

During the year we lost a total of 36 tenants (20 commercial and 16 residential), which produced £499,000 per annum rent. During the same period, we let to 52 new tenants (33 commercial and 19 residential), at rents totalling £817,000 per annum yielding a net gain of £318,000 per annum. These figures do not include rents from new investment acquisitions or lease renewals.

Vacant Rates

Although I remain hopeful of this new coalition government, I am concerned that in their dash for cash they have decided to re-impose the very onerous full charge for vacant rates. This is both unfair and also foolish, as most companies will now look at ways to mitigate this burden. We are already currently considering the demolition of three or four properties which, in due course, will be developed, but could have been temporarily let at low tenant favourable rents in the meantime.

I have mentioned earlier the way planners create long and unnecessary delays, dealing with planning applications and therefore now we will also have to pay extra long period vacant rates due to their negligence. In recent years, rating appeals appear to have been deliberately delayed by valuation officers, which has the effect of the local authority being able to charge more than the correct amount, only to very belatedly paying it back some two or three years later. This is a completely unacceptable and sneaky form of business practice in this economic climate when cash flow is so important.

Political Donations

Once again I am asking shareholders to approve a donation of £25,000 to the Conservative Party and more so than most former years I would like to state my reasons. The election as we know gave the Conservatives a massive swing in their favour but it was not quite enough to achieve a clear working majority probably due to floods of false promises made by the opposition parties.

Many of you who have concurred with my views will have been disappointed that a coalition government has been formed. However, to date this government are considering many of the measures that I have suggested in my earlier reports or ramblings and if they are successful in reducing even a quarter of the red tape measures foisted upon us by the previous incompetent government, our efforts would have been worthwhile.

During the early part of the Second World War, when Britain's plight was desperate, Churchill formed an alliance with Stalin's Russia to fight the Nazi enemy. When asked how he could deal with such a tyrant, he effectively said he would dine with the devil if it helped to save his country. So be it - a modern day coalition was born. This uneasy coalition will only last until it is obvious that our country has stepped well back from the precipice of bankruptcy whereupon the coalition will fall apart and we will all be at risk of the old bunch of spendthrifts taking over the country's finances again.

Charitable Donations

A number of our shareholders have previously suggested we support charities and, as a successful company, we are pleased to become a Foundation Partner of LandAid, a property industry charity which brings together the resources, expertise and influence of the industry to transform the lives of the young and disadvantaged by providing them with the facilities, skills and support to reach their potential. We support LandAid by donating £10,000 per year.

Finance

I am pleased to say that we have agreed terms and received credit committee approval for new club loan facilities with HSBC and Santander for a total of £75,000,000 where the banks are equal lenders. This will replace our existing facility of £42,500,000 with HSBC.

Once the legal work is complete and Santander has carried out their valuations, we will have access to an extra £32,500,000 for further investment. Our resources also include a further £6,000,000 being existing cash funds we hold on deposit.

Whilst the margins at 2% and 2.25% over LIBOR are higher than previously enjoyed, we feel certain we will be able to invest the funds profitably over the five years of the term loan.

Dividends

In February 2010 we paid an interim dividend of 10p per share and anticipated a final dividend of 2p per share. I am pleased to say that in addition to this we will pay a special dividend of an extra 3p per share because of the profitable sale of most of our Elektron shares.

Net Asset Value

Our net asset value at 31st December 2010 was 422p per share compared to 403p per share last year. This figure excludes approximately 18p value per share held in stock properties which are carried in the balance sheet at the lower of cost or market value.

Post Balance Sheet Events

25, 26 & 27 Victoria Street, Wolverhampton

In February 2011 we reacquired, for £200,000, the freehold of these vacant derelict shops and upper parts which we had sold in June 2006 for £333,000.

We own most of the island site which has a chance for redevelopment or refurbishment now that the Town Council's grandiose and unnecessary development scheme and the consequent compulsory purchase order has been shelved and rescinded.

Dover Market

Some of our shareholders may have noticed that recently I walked with a slight limp. In February 2011 we secured a letting on our former market at Pencester Road, Dover to Poundland Limited on a 10 year lease without a break at £110,000 per annum. To secure a letting such as this, a tenant usually requires a landlord's "arm and a leg". We were lucky as we only had to pay all their shop-fitting costs (so don't worry I didn't have to lose any body parts, but the loss of money from our virtual back pocket did give me a sympathetic temporary lopsided limp). Our generosity was however worthwhile as they now occupy a 7,500 sq ft unit in the middle of our parade of 15 shops and upper parts. Our parade is close to the prime trading position in Dover and lettings to this type of tenant draws many extra shoppers to our parade, benefitting all of the parade's tenants and, by osmosis, back to us as landlords.

67 High Street, Ayr, Scotland

In March 2011 we purchased 67 High Street, a vacant listed freehold shop and upper part in the prime shopping position opposite Marks & Spencer and British Home Stores. Our purchase was from an LPA Receiver at £275,000.

Northgate & St Aldgate Street, Gloucester

On 15 April 2011 we exchanged contracts to acquire this freehold block of 17 shops and 21 flats in Gloucester City Centre, located on a busy secondary position close to Debenhams and Marks and Spencer. The purchase price of £2,115,000 (plus costs) produces a current income of £207,000, which may rise to circa £280,000 when fully let. Completion will take place on 19th May 2011. This property should prove to represent excellent value and a healthy return on capital, together with various angles associated with a large, city centre block of property which is unbroken.

Wimbledon Film Studios (www.wimbledonstudios.com)

On 17th March 2011 a very successful party was held at the Soho Hotel for the launch of Wimbledon Studios. Over 250 guests from the media and film production world attended, along with the CEO of Film London, Adrian Wootton, gave a speech on the importance of films and the production facilities based in London. I am also pleased to say that the Mayor of London, Boris Johnson, also felt the event was important enough to attend and, following the screening of a short 3D film showing the studio facilities, gave a congratulatory speech. It was particularly pleasing to have the most popular mayor since Dick Whittington at the function, both Mayors' popularity being based on the fact they rid London of the RATS, unfortunately not yet the RATES!

Prospects

There is a mountain of freehold commercial property that the banks have to sell or refinance over the next five years and, as a small company, we are only looking to acquire three of four profitable property molehills to provide our investment requirements.

With our new bank facilities secured, albeit at higher margins, and our existing liquidity and positive cash-flow, I am confident that we will be able to secure many profitable transactions that will lay down the groundwork for a steady and rising income for the future.

Finally I wish to thank our small but dedicated team of staff, financial advisers, legal advisers, agents, accountants for all their hard work during the past year and, of course, our tenants.

Andrew S Perloff

CHAIRMAN

20th April 2011 

CHAIRMAN'S RAMBLINGS

On 20th April 2010 the Deepwater Horizon Rig, drilling for oil in the Gulf of Mexico on behalf of BP PLC exploded, killing eleven workers. This was a disaster and a tragedy any way one looks at it.

I read that America uses eighteen times more petroleum products per capita than the rest of the world and, despite having huge domestic oil resources remain reliant on the rest of the world's producers, such is their need for ever more oil. It is therefore essential that they explore and find resources closer to home necessitating extensive and excessive offshore drilling.

Only two months earlier, the American administration had opened up considerable further offshore areas for exploration. However, within ten days of the explosion, an immediate ban was placed on further drilling.

At the same time the American President and his advisers went into publicity overdrive to deflect criticism from themselves. BP PLC became The BRITISH Petroleum Company and with Tony Hayward, the Managing Director, its villain in chief, the intention being to show this was not the fault of American people, conveniently forgetting nearly 40% of BP is owned by American investors and both Haliburton, the works contractors to the oil rig and Transocean, the oil rig owners were also American companies.

The disaster's catastrophic effects seemingly increased daily, every American newspaper was excitably spouting a diatribe of hate and factually uninformed and incorrect disaster scenarios.

The vilification of British Petroleum and of Tony Hayward continued unabated for some time until eventually he was forced to step down as Chairman. The company's stock market value fell by over £50 billion (ie £20 billion of American investors' money). 

The American government blackmailed BP into providing a $20 billion fund for compensation, including payment of salaries for workers laid off because of the drilling cessation orders issued by the American government!

Once the accident had happened, the only company with the experience and capabilities of dealing with the immediate problem ironically was BP.

The helpfully named (just to reassure our American friends that no fault lay with them) British Petroleum company and their English MD became a convenient scapegoat to deflect any political antagonism. I doubt if the same level of abuse and vilification would have arisen if it were a Russian or Chinese exploration company? We know what would happen if it was an American company. Practically nothing.

They have previous form on this when the Exxon Valdez oil tanker broke up off the coast of Scotland in 1977 releasing its entire cargo of oil and ruining the locals' fishing industry and later in 1985 in India when the Union Carbide Co chemical plant accidentally exploded killing and horribly maiming many thousands of innocent victims.

Politicians throughout the ages have always found it expedient to find a scapegoat to attach and blame.

The ill treatment dished out to Tony Hayward as Managing Director is not dissimilar to the treatment of many high profile bankers and their bonuses, thus I must ramble on further into bankers bonuses.

Banker Bashing

The banking and related finance industry probably employs about 1,000,000 people. The majority of them receive only slightly better pay and conditions than other private sector industries. Those at the higher level are well paid. Probably no more than one in two hundred of them receive the huge bonuses that appear to produce the jealous vilification so assiduously encouraged by politicians of every persuasion.

Blaming successful and high earning bankers is for deflection of blame for the great financial crash of 2008/9. The politicians' mantra of "It's the greedy bankers fault with their risky trading strategies that caused the recession".

I have dealt with many of the banking industry and have found that the majority of those at the higher level are knowledgeable and dedicated to their organisation and work much harder and longer hours (often with more stressful work involved) than those in other industries. The large bonuses they earn are a matter for the owners of the bank to decide i.e., the shareholders, not the government.

When a million pound bonus is mentioned one rarely hears the rest of the story, i.e., the Treasury receives £650,000 tax (including National Insurance) and from the remainder the recipient probably pays for his two children's private education, almost certainly private medical insurance, employs a nanny and gardener, runs two expensive cars with high VAT tax rates, high road and fuel tax, thus probably providing approximately another £150,000 benefit to the country at large and drawing little from it.

Thus this single million pound bonus earner provides the pension for 150 little old ladies, wherewithal for 75 asylum seekers or pays for the education of 150 other peoples' children.

Let us consider what would happen if the billion of bankers' bonuses had not been paid. The banks net income would rise by this amount only for LITTLE or NO tax to be paid as they have lost 10's of billions on their tax loans and would be fully entitled to set off these losses against net income, ie, the treasury would be worse off in direct tax by a minimum of 4 billion pounds and probably a further 1 billion from indirect taxes - this is meaningful amounts even for the most spendthrift of Governments.

We are told that the top 10,000 taxpayers pay about 7% of the total income tax which I calculate as 2,500 times as much as if all earners were treated equally.

Provided it is earned outside of the public sector which we all pay for, that politicians and journalists should be shouting from the rooftops, we want more million pound bonuses, many more rich people and many more large incomes because the recipients pay exponentially more to allow the country to be munificent to those who are less well off rather than the current situation of frightening off 20,000 people to squeeze into Monte Carlo, Andorra, The Channel Islands, Switzerland, Luxembourg and little pimples of islands in the Caribbean. They should be encouraged to return to our green and pleasant land with lower tax rates, flattery, respect and special privileges. The extra taxes received and huge employment generated because of nil tax rates that could be offered to the lowest earners would transform a million more lives as they are taken out of the benefits trap.

This probably won't happen as it is easier to obtain a vote by way of offering envy and confiscation from the deserving haves rather than reason and logic which might help the country.

Attacking Tony Hayward and high earning bankers reminds me of two of my old stories which I must relate.

George's Tale

Some 35 years ago, when I was still young enough to enjoy late night entertainment, I often visited night clubs in central London. It is pleasing to recall that at that time my thick dark brown hair showed not a whisper of silver, my suit size was three times smaller than I currently need today and my then inexhaustible supply of energy nowadays makes me exhausted even to think about it.

Upon reflection, despite these bountiful blessings, I am surprised at my desire to visit clubs which were all dingy, dark, smoky, noisy, invariably subterranean and outrageously expensive. Perhaps it was because they were the "in clubs" of their day where the tout le monde, le demi monde and aspiring celebrities spent their leisure hours.

One such Saturday night in a St James' venue with a few friends where the poorly lit room with dance floor was packed out and too dark and smoky to see more than five feet, we decided to eat at the adjoining dining area. Being less smoky and crowded we managed, by pushing and shoving, to secure a well positioned central dining table. The service of course was slow but it mattered not as we had come to see and be seen. The limited but expensive menu was thankfully before the advent of nouvelle cuisine! My order of Cumberland sausages, mashed potato with onions and gravy eventually arrived (and may have something to do with the fact of my current suit size) and by then we had carefully surveyed the room and noticed all the young and beautiful with the old and rich along with one or two recognisable minor celebrity faces.

However, we were very excited that George Best was at the adjoining table surrounded by friends, admirers and hangers-on! George was an icon of his day and for those who are too young to remember, he was and probably still is, rated as Manchester United's best football player and if not on a par with today's players, very well paid for those days. Although his playing days were over, he was still young, fit, extremely good looking with an abundance degree in wit and charm.

Many years later, when asked why all of his money had been exhausted and what he had spent it on he replied "I spent it on booze, birds and fast cars and the rest I just squandered". Indeed, he was a man of our times.

He and his table appeared to be enjoying themselves immensely, laughing and joking with his fans who were pleased to buy him whatever drinks took his fancy.

About halfway through my main course I noticed an extremely elegant, beautiful, young, slim woman whose long blonde hair fell halfway down her back. She sashayed up to the bar with two young men in attendance and was instantly seated on a tall bar stool. This caused a conversational hiatus at the next table and one of my friends explained the pretty girl was George's most recent ex. Despite this the next table continued its jollity and George continued to receive lavish hospitality. By the time I had finished my sausages and mash, George's face looked looser and redder and his upper body was wilting badly. I was then pleasantly distracted when my apple and rhubarb crumble, ice-cream and cream arrived and I slowly tucked into my favourite dessert (perhaps 4 sizes bigger!) I had nearly polished it off when I noticed George had slumped completely, his head resting on his arms flat on the table while his friends just continued to talk and joke around him.

At the bar the beautiful ex was smiling away, happily in conversation with her friends. Suddenly, like lightning, George jumped up, knocked his chair over and with two of the magnificent body swerves for which he was famous, went round the adjoining tables and then with the striker's speed he was also known for, rushed to the bar and struck the man standing next to his ex a couple of times, pulled him to the floor, jumped on him and continued to rain blows on his competition. I doubt it was 30 seconds before his friends were up and beside him to pull him away and usher him to the cloakroom and out of the club, one of which good humouredly stayed behind to pay for repairs and make apologies to the ex and the young man who appeared more surprised than damaged.

I suppose it must be one of my character defects that I went home in the early hours of the next day entirely pleased with that evening's entertainment.

The Asylum Seeker Tenant

A story related to me ten years or so ago about one of our tenants at Panther House will also interest my readers.

Our tenant, an asylum seeker, from Afghanistan, had taken one of our smaller rooms at Panther House and established a successful business importing and selling knitwear and woollen goods. I had little personal contact with him as he was an extremely good tenant, paying on time and causing no disturbance with other tenants and quietly getting on with business.

He was extremely polite when our paths crossed in the corridors and being of normal build and height, not particularly memorable. Like most successful small businessmen he could be seen working much longer than civil service hours.

One day on his journey home to Hendon in the early hours of the evening, he was walking up the hill from the station when he heard 'click click... clickety, click', the unmistakable noise of high heels briskly hitting the pavement. I defy any man to say he wouldn't look round upon hearing that high heel clickety click. Our friend turned and saw they belonged to a young woman who obviously had worked late and was going home in her smart office wear, clutching her briefcase tightly to her side.

It appeared to our tenant that the young woman was being followed by two rough looking large youths who were also walking along at a brisk pace and gaining on her.

Our tenant's instant appraisal was that the young office worker was worried that she was being followed. As she drew up beside him he gallantly asked "Would you like me to escort you home?" The woman politely replied "No, thank you" and sped on her way, click click... clickety click. With his foreign looks she may have not want to jump out of the frying pan and into the fire.

He then knelt down and pretended to tie up his shoe laces until the two youths were almost upon him. He then stood up, his 5"9" against their 6' plus height and said "Excuse me, but you appear to be following that young lady, why?"

Their reply was both vulgar, insulting and in language even I cannot print but, more worryingly, one of then started to sidle around behind our tenant.

Our tenant suddenly kicked the verbally abusive one in the 'goolies' causing him to immediately collapse in pain and on the way down he was given a hard rabbit punch on the back of the neck putting him out of action for a while. The other, startled by this turn of events, started to throw a punch. With surprising speed our tenant grabbed his wrist and instantaneously swung his leg round and kicked the legs from under the aggressor who was also felled. Our tenant then grabbed each of them in a powerful neck hold with his arms and they started to beg for mercy.

Within minutes a police squad car had screeched up and two or three police jumped out. One of the potential muggers was known to the police and 'out on bail' and the other was found to be carrying a knife. They were shoved into the back of the car and driven away and I know not what happened thereafter.

It was not however serendipity that caused the police to arrive at just the right time but the fact that the young men had been making a nuisance of themselves in a local grocery shop some 10 minutes earlier and the proprietor had already called the police.

As always, my ramblings are little convoluted and it may be hard for readers to understand the connection between my thoughts on BP PLC, the bankers, George Best and our Afghan tenant, of course I will explain.

In every case the wrong person/people have been attacked.

First and easiest is poor old George. In an alcoholic haze of receiving excessive hospitality, George attacked a young man who had the double misfortune to not only have been served excessively slowly at the bar, but had positioned himself beside George's ex having had no connection whatsoever and thus not one of George's rivals. But he received the blows, such is the unfairness of life.

Our Afghan tenant, who looked so innocuous, who had left his home country to start a new life in England, had previously had a position at which he excelled as an Army training teacher ...... in unarmed combat!! Thus our unsuccessful possible muggers could not have possibly known they were picking on the wrong man.

Blame IKE

In my view, the vilification of Tony Hayward of BP PLC was attacking the wrong man. If America wanted to blame one man they should have attacked IKE - IKE who you may ask.

Dwight D. Eisenhower, the 34th President of the United States, loved by all and known as IKE, was the General who successfully oversaw the allied armies invasion of Europe from England against the Nazi oppression and, of course, like all successful Generals, was very popular. He thus was able some seven years after the war to become President of the United States of America on the slogan 'We like IKE'.

In 1952 Gamal Abdel Nasser, an Egyptian Army General, had overthrown the Egyptian monarchy and taken control of the country, by 1956 he was not obtaining the success he wanted for his country and was being thwarted in his ambition to build the Great Aswan dam. The Americans and the British were not prepared to finance it.

Nasser needed foreign currency to finance his grand project, the Aswan Dam, so he nationalised the Suez Canal, which had been built using mainly French and English investors money in the 1860's. Originally a large part was owned by the Egyptian monarchy which when needing money in the 1880's sold their holding quickly to the British government funded by Rothschild Bank.

It was a valuable trade route for Britain and the West, especially for oil deliveries from the Middle East which proved vital in the two world wars when in those times 66% of Britain's oil was delivered through this canal.

What happened after Nasser annexed the canal is that the British, French and Israelis colluded to attack and retake the Suez Canal. With a surprisingly careful and well executed plan they succeeded. Unfortunately they deliberately failed to tell or obtain the blessing of the Americans of their plan.

Dwight D. Eisenhower was furious and because he had an upcoming election he wanted to portray himself to voters of the USA as a man who gave them peace.

He expressed his displeasure to both Britain and France but much more importantly, he organised economic sanctions against Britain and France. There was a run on sterling, the pound collapsed and Britain and France had ignominiously to pull out of their aggressive protectionist stance.

From that moment on, every tin pot little dictator or country knew that Britain and France were powerless without American help who didn't seem to care unless its direct interests were at risk. Even after foreign skill and money had been considerably expended under written contracts made between the capital rich Western industries and smaller, and often only recently formed states, oil fields were highly taxed, expropriated and confiscated and an oil cartel formed.

Because of this America is short of reasonably priced oil and has to drill in its offshore areas at a higher cost and risk to the environment, all because IKE did not support America's only real friend when they needed it.

Since I first wrote this piece, the Middle East has flared up again and oil scarcity and security is again on the agenda and proving the mistake of allowing dictators, despots and messianic regimes to dishonour and break trading agreements.

So don't blame Hayward, blame IKE!

Blame for Banking Crisis

The banking crisis cannot be blamed on a few top bankers, who of course made mistakes, and being involved with big businesses, they were big mistakes at enormous costs to everyone involved.

Thus, the blame falls on every one! 

·; We, who borrowed more than we could afford. 

·; We, who speculated on assets we did not understand. 

·; We, who spent money on credit cards at interest rates and on terms which were impossible to pay back. 

·; We, who arranged loans for others and encouraged people to exaggerate their income on the mortgage application form. 

·; We, who signed those false loan applications.

·; We, who bought businesses practically entirely on borrowed money with a view to jiggling around its assets and then sell on at a profit to someone else who had also borrowed excessively. 

·; We, who had cash savings who went from bank to bank to bank to obtain a slightly higher interest rate.

·; We, who placed funds in places where we would be unable to pinpoint them on a map. 

·; We, who gave money to banks and funds to manage being those who offered the most attractive adverts with little thought of money's security.

·; We, who always wanted to spend more than we could possibly earn.

However, these are all human traits and we choose governments to make laws and rules to protect us from ourselves. AND THEY FAILED. The previous socialist government turned a blind eye to what was going on for many years, as it produced false profits, which they would still cream off a substantial portion as tax and then use and spend on their ill-conceived sugar coated social schemes.

Regulations were created, but they merely created forms for box ticking and failed to notice the reality of the businesses situation taking place. 

The Governor of the Bank of England, who could have dined with the chairman of the two dozen largest banks and in his after dinner speech could have said "I do not like the idea of mortgages of more than 90% of value, I do not want to see self-certification mortgages allowed, I do not like the amount of structured products you are creating. Trading on the banks' own account should not be more than 15% above the total carried out for clients, and this amount is only to help fluidity in the market. Now enjoy your dessert of rhubarb and apple crumble and cream, and tomorrow morning tell your colleagues my views and thank them for the great work they are doing, on behalf of the City of London and our country".

Now if that dinner and speech had taken place in 2004 or 5, I doubt if we would have the banking problems (in this country at least) that exist today.

Blame not one person, but two. Socialist chancellor Gordon Brown and his chosen Governor of the Bank of England.

Andrew S Perloff

CHAIRMAN

20th April 2011

The accounts were approved by the Board of Directors and authorised for issue on 20th April 2011. They were signed on its behalf by:

A.S. Perloff

Chairman

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2010

Within retained earnings are unrealised gains of £630,000 and deferred tax liability of £164,000 (2009 - losses of £122,000 and a deferred tax asset of £34,000) reserves relating to fair value of available for sale investments (shares).

1. Revenue and cost of sales

The Group's main operating segment is investment and dealing in property and securities. The majority of the revenue, cost of sales and profit or loss before taxation being generated in the United Kingdom. The Group is not reliant on any key customers.

M.R.G. Systems Limited is an operating business segment whose principal activity is that of electronic designers, engineers and consultants. 70% of its revenues arose in the United Kingdom and 100% of its cost of sales.

Tunnel Limited is an operating segment whose principal activity is that of value shoe retailer. 100% of its revenues arose in the United Kingdom. 50% of the company is owned by the Group as a joint venture and only the Group's share is represented in these accounts. 

The split of assets, tax effect and cash flow of each segment is not shown as these are not material in relation to M.R.G. Systems Limited or Tunnel Limited.

2.

2. Income tax expense

The charge for taxation comprises the following:

Domestic income tax is calculated at 28.0% (2009 - 28.0%) of the estimated assessable profit or loss for the year. The future provision for deferred tax has been calculated on the basis of 27% (2009 - 28%).

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

3. Dividends

Amounts recognised as distributions to equity holders in the period:

The Directors recommend a payment of a final dividend of 5p per share (including a 3p special dividend) (2009 - 4p), following the interim dividends paid on 5 February 2010 of 10p per share. The final dividend of 5p will be payable on 6 July 2011 to shareholders on the register at the close of business on 3 June 2011 (Ex dividend on 1 June 2011). The full dividend for the year ended 31 December 2010 is anticipated to be 15p (including the 3p special dividend). 

4. Earnings per ordinary share (basic and diluted)

The calculation of earnings per ordinary share is based on earnings, after excluding non-controlling interests, being a profit of £5,864,000 (2009 - £2,488,000) and on 16,869,000 ordinary shares being the weighted average number of ordinary shares in issue during the year (2009 - 16,869,000). There are no potential ordinary shares in existence.

5. Net assets per share

The calculation of net asset per ordinary share is based on the equity attributable to share holders of the equity in the parent company, and on 16,869,000 ordinary shares being number of ordinary shares in issue at 31 December 2010 and 31 December 2009.

6. Investment property

At 31 December 2010, £89,020,000 (2009 - £77,634,000) and £19,940,000 (2009 - £19,024,000) included within investment properties relates to freehold and leasehold properties respectively.

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

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

Costs relating to ongoing and potential developments are included in additions to investment properties and in the year ended 31 December 2010 amounted to £49,000 (2009 - £346,000).

The Group did not have any contractual obligations at the statement of financial position date to purchase or develop investment property. 

As at 31 December 2010, the investment properties were valued independently at their open market, by GL Hearn, Chartered Surveyors. The market value shown at 31 December 2009 was valued internally by the Directors.

The property rental income earned by the Group from its investment property, all of which is leased out under operating leases, amounted to £7,051,000 (2009 - £6,619,000).

7. Available for sale investments (shares)

The available for sale investments represent investments in listed and unquoted equity securities that offer the Group the opportunity for return through dividend income and fair value gains. They have no fixed maturity or coupon rate. The fair values of the listed securities are based on quoted market prices. The available for sale securities carried at fair value are classified as level 1 in the fair value hierarchy specified in IFRS 7. The fair value of available for sale investments in unquoted equity securities, which are not publically traded, cannot be measured and have therefore been shown at cost. The valuation of the available for sale investments is sensitive to stock exchange conditions.

At the year end, Panther Securities PLC owned 29% of the issued share capital of O Twelve Estates Limited. This was treated as an investment rather than an associate under IAS 28, as the Group could not exercise significant influence. Soon after the year end, O Twelve Estates Limited raised additional equity and as at the date of reporting these accounts, Panther Securities PLC owns 7.5% of the issued share capital of O Twelve Estates Limited as it did not take up its rights.

Panther Securities PLC also held 19.9% of the issued share capital of Beale PLC, at the year end. This has been treated as an investment rather than as an associate under IAS 28, since, apart from holding less than 20% of the issued share capital, the Group could not exercise significant influence.

8. Derivative financial instruments

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

Bank loans totalling £35,000,000 (2009 - £35,000,000) are fixed using interest rate swaps reducing the Group exposure to fair value interest rate risk. Other borrowings are arranged at floating rates, thus exposing the Group to cash flow interest rate risk.

Financial instruments for Group and Company

The derivative financial assets and liabilities are designated as held for trading.

* Fixed rate came into effect on 1 September 2008. Rate includes 1% margin. The contract includes mutual breaks, the first one being on 23 November 2014 (and every 5 years thereafter).

** HSBC has the option to enter the Group into a further interest swap arrangement which is exercisable to be effective from 1/12/2011. This arrangement would be at the rate and hedged amount as shown above and the duration would be until 1 December 2021.

Interest rate derivatives are shown at fair value in the income statement, and are classified as level 2 in the fair value hierarchy specified in IFRS 7.

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

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

Interest rate risk

For the year ended 31 December 2010, if on average the 3 month LIBOR over the year had been 100 basis points (1%) higher with all other variables held constant, under the financing structure in place at the year end, post-tax profit for the year would have been approximately £90,000 higher (2009 - the profit would have been lower by £91,000). This analysis excludes any affect this rate adjustment might have on expectations of future interest rates movements which is likely to affect the estimation of the fair value of the derivative financial assets/ liabilities (as this movement would also be shown within the income statement affecting post-tax profit or loss), but indicates the likely cash saving/ (cost) a 100 basis points (1%) movement would have had for the Group. 

Treasury management

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

9. Events after the balance sheet date

There were no material transactions after the balance sheet date.

10. Investment in joint venture

The Group owns 50% of the 2 £1 issued equity shares in Tunnel Limited, a company incorporated in England and Wales, which is a retailer of value shoes. As well as the £1 equity investment, the Group has invested £85,000 by way of an interest free intercompany loan which was mainly used for the purchase of stock. The joint venture company trades out of some of the Group's premises which are currently on rent free terms with the intention that once the business is established, market rents will be payable.

The Group's share of joint venture revenue, expenses and losses are shown at note 1.

The following amounts represent the Group's 50% share of the revenue and expenses and assets and liabilities for the period ended 31 December 2010:

11. Investment in associate undertaking

The Group purchased 25% of the equity (newly issued share capital for cash) in Wimbledon Studios Limited for £150,000 in August 2010. The company operates as an independent film studio letting out sets and offices to media and television organisations. The Studios hope to be fully trading by July 2011. The entity operates out of a Group wholly owned property for which a market rental has been agreed (initially one year's rent free).

In accordance with IAS 28 (revised 2008) - Investments in Associates, the Group has equity accounted for its share of the profits and losses and assets and liabilities of this entity.

The aggregated financial information of Wimbledon Studios Limited for the period ended 31 December 2010 is set out below:

12. Director remuneration

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

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

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

13. Related party transactions

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

The compensation of the Group's key management personnel is shown in note 12 above.

Notes 10 and 11 detail the Group's transactions with joint ventures and associated undertakings. 

In respect of Wimbledon Studios Limited, A S Perloff, Chairman, also independently made an investment in 25% in that company's equity for consideration of £150,000. 

Additionally, Panther Securities PLC made advances to the two independent directors of Wimbledon Studios Limited, of £62,500 each, in order for them to be able to purchase their shareholdings in that company. Both loans are unsecured for a maximum term of 3 years and attract interest of 4% per annum.

There were no further transactions with other related parties.

14. Copies of the full set of Report and Accounts will be posted to shareholders shortly, will be available from the Company's registered office at Deneway House, 88-94 Darkes Lane, Potters Bar, Hertfordshire, EN6 1AQ and also will be available for download on the Group's website www.panthersecurities.co.uk.