Farmer Business Developments plc Annual Report …...Farmer Business Developments plc Annual Report...

Farmer Business Developments plc Annual Report 2015

1Farmer Business Developments plc Annual Report 2015

Chairman’s Statement 2

Board of Directors and Other Information 4

Report of the Directors 5

Independent Auditors’ Report 8

Financial Statements:

Consolidated Income Statement 10

Consolidated Statement of Comprehensive Income 11

Consolidated Statement of Changes in Equity 11

Consolidated Balance Sheet 12

Consolidated Statement of Cash Flows 13

Company Balance Sheet 14

Company Statement of Changes in Equity 15

Company Statement of Cash Flows 15

Notes to the Financial Statements 16

Notice of Annual General Meeting 44

Notes for Shareholders 45

Contents


I am pleased to report that 2015 was another profitable year for Farmer Business Developments plc (“the Company”). Profit before taxation for the year was €11.454m, which is an increase of €5.164m on the 2014 profit of €6.290m. However, our net assets fell from €210.4m to €177.8m at year-end, reflecting the fall in the share price of FBD Holdings plc.

FBD HOLDINGS PLC

FBD Holdings plc had an exceptionally challenging year caused by substantial changes in the claims environment which required €96m to be set aside against the projected cost of prior year claims.

This Company acquired the remaining 50% stake in FBD Property & Leisure Ltd, which became available as a result of the disposal of non-strategic assets by FBD Holdings plc, for a total consideration of €48.5m, which transaction was approved by our shareholders at the EGM in October 2015. In late 2015, Fairfax Financial Holdings invested €70m in FBD Insurance through a convertible bond.

These two measures were critical to restoring the financial strength of FBD Holdings plc and we welcome the clear strategy of focussing its resources primarily on its farming, small business and consumer customers through a single FBD brand.

Our 24.6% stake in FBD Holdings plc accounted for €59m or 33% of our net asset value at year-end. Your Board’s policy is to maintain our stake in FBD Holdings plc as a long term investment in the expectation of both a return to dividend income and capital appreciation.

FBD INSURANCE DISCOUNT

I take this opportunity to remind our farming shareholders, who hold at least 10,000 ordinary shares in our Company, that their investment is recognised and rewarded through a discount of 10% on their insurance premiums with FBD Insurance plc and

through our annual dividends. FBD Insurance has a proven track record of delivering a superior product and service to its core farming customers.

REVIEW OF INVESTMENTS

a) FBD Property & Leisure Limited

Following our buy-out of the property and leisure joint venture on 23rd October 2015, FBD Property & Leisure Ltd (“FBDPLL”) has become our single largest investment at €79.6m, representing 45% of our Balance Sheet value. From that date, 100% of the trading results of FBDPLL are included in our Income Statement.

In early 2015, FBDPLL completed the sale of Temple Bar Hotel in Dublin and used the proceeds to pay down debt. This included repayment of the €7.5m loan provided by this Company in 2011.

The trading performance of FBDPLL improved again in 2015, driven by growth in occupancy and yield. Both the Irish and Spanish markets performed strongly and EBITDA (earnings before interest, tax, depreciation and amortisation) was €9.2m in 2015. Revenue per room in Ireland was up 12%, while in Spain accommodation revenue was up 12% and golf revenue up 13%.

FBDPLL entered a second property development with Taylor Wimpey at the La Cala Resort in Spain during 2015. The development will consist of 103 units comprising 55 townhouses and 48 apartments. This brings to 163 the number of units being developed by FBDPLL and Taylor Wimpey Spain at La Cala. Construction under the second property development began in February 2016 and nine units have been sold to date from plans. The first property development launched in late 2014 consisting of 60 apartments is now sold out generating over €19m in gross sales.

Overall the outlook for the FBDPLL business is positive and we are confident that our investment will deliver strong returns.

b) Berlin Airport

Our investment in development lands at Schoenefeld adjacent to the new Willy Brandt Airport in Berlin remains our third largest interest. We continue to carry this investment at cost of €19.7m, which represents 11% of our net assets.

The airport management company remains committed to their target of commissioning the airport in the second half of 2017 but acknowledges that it could take longer. Nevertheless interest among developers

Chairman’s Statement


is significant and market sentiment around the development lands is positive. We take the view that our patience with this investment will pay off through well-timed sales of development plots to meet demand when the new airport becomes operational.

c) Other InvestmentsThe remaining €19.5m (11%) of our Balance Sheet involves a portfolio of smaller investments and cash. These include international equities and private equity funds, together with an Irish private equity fund, all of which performed well in 2015. We also hold an investment in a shopping centre in Geneva which is trading well.

CORPORATE GOVERNANCE AND BUSINESS OVERSIGHTIn view of the challenges facing the Company, your Board commissioned independent consultants to carry out a full review of governance issues. Arising from this, a number of significant initiatives have been taken to update our structures and your Board is recommending that shareholders approve the changes involved by passing the special resolution at item 9 in the notice of the Annual General Meeting on page 44 of this Annual Report. The main proposals include:

1) Reducing our Company Board size from the current maximum of seventeen to twelve by 2020. This involves maintaining Shareholder representation at six Directors, while reducing Co-operative and IFA Directors from six and five to four and two respectively.

2) Provision for up to two independent non-executive Directors, in which case Co-op representation would be two.

3) A standard term of service for all Directors of 4 years, although Directors may be reappointed, and an upper age limit of 70 years on appointment.

Further measures already in train to strengthen business oversight, and enhance governance and effectiveness at different levels are:

n The appointment of two independent non-executive Directors with specialist expertise in hotels and property to the Board of FBDPLL;

n Modernisation of Farmer Business Developments plc Board sub-committee structure with the establishment of a new Audit Committee and a Nominations Committee; and

n Adoption of a Conflicts of Interest Policy applicable to all Directors within the Group.

NEW SHARE DEALING SERVICE

In response to concerns expressed by shareholders, your Board has decided to engage Davy Select to operate a private grey market in the Company’s shares. This service will replace the matched bargain service operated by Capita Share Dealing Services with effect from 1 July 2016. Davy is responsible for the majority of such trading in the Irish market and they will make a presentation to shareholders at the AGM to outline how the service will work. Full details are included in a note from Davy with this mailing. While the Company remains open to new farmer shareholders, Board policy is to continue to maintain our character as a farmers’ company and prevent opportunists from stake building.

NEW COMPANY WEBSITETo improve communications with our shareholders and to provide ready access to useful information, the Company is launching a new website on 1 July 2016 at www.FarmerBusinessDevelopments.ie.

SHARE REGISTRARSCapita Asset Services, Shareholder Solutions (Ireland) continue to manage the registration and certification of share transfers in the settlement of estates and in private transactions. They may be contacted at 01-5530050 or [email protected].

DIVIDENDFor 2015, the Directors are recommending a dividend of 5c per share (2014: 5c) on the ordinary shares. The Board is committed to a sustainable dividend policy of using available resources to benefit shareholders.

CONCLUSION

Our Company continues to have a strong Balance Sheet with our wholly owned FBDPLL subsidiary, Berlin Airport and smaller investments performing well. FBD Holdings plc has taken decisive action to restore stability and focus on its valued customers in its strategy to return to profitability. We are confident that our portfolio of investments will continue to reward our shareholders with superior returns.

Thank you for your support.

Padraig Walshe Chairman

24 May 2016


Board of Directors and Other Information

BOARD OF DIRECTORS

Padraig Walshe (Chairman)Jack BaylyJohn BryanDonal BuckleyBarry DonnellyJoe HealyJames Kane (Vice Chairman)Michael KennedyKevin KierseyDiarmuid LallyT.J. MaherJohn McCullenPatrick MurphyNeil O’RiordanHugh RyanTommy Joe Tuffy

SECRETARY AND REGISTERED OFFICE

Bryan Barry,Farmer Business Developments plc,Irish Farm Centre,Bluebell,Dublin 12.Phone: 353.1.4260 334Email: [email protected]

AUDITORS

Deloitte, Chartered Accountants and Statutory Audit Firm, Deloitte & Touche House, Earlsfort Terrace, Dublin 2.

SHARE REGISTRAR

Capita Asset Services, Shareholder Solutions (Ireland),2 Grand Canal Square, Grand Canal Harbour,Dublin 2.Phone: 353.1.553 0050 Email: [email protected]

SHARE MARKET

Davy Select,Davy House,49 Dawson Street,Dublin 2.Phone: 353.1.614 9000Email: [email protected]

BANKERS

Allied Irish Banks,Lower Baggot St.,Dublin 2.

SOLICITORS

Arthur Cox,Earlsfort Centre,Earlsfort Terrace,Dublin 2.


Report of the Directors

The Directors present their Annual Report and audited Financial Statements for the year ended 31 December 2015.

PRINCIPAL ACTIVITY, BUSINESS REVIEW AND PROSPECTS

Farmer Business Developments plc (the Company) is an investment holding company. On 23 October 2015, the Company acquired the 50% share previously held by FBD Holdings plc in the FBD Property & Leisure group for €48,500,000. Following this transaction, FBD Property & Leisure is a wholly owned subsidiary of the Company. The activities of FBD Property & Leisure consist of hotel operations in Ireland and Spain and investment in properties associated with these activities. Farmer Business Developments other investments are 24.62% (2014: 24.62%) of the ordinary share capital of FBD Holdings plc, lands zoned for development adjacent to the new Berlin airport and a diversified portfolio of investments and cash deposits. FBD Holdings plc is an investment holding company. The principal activity of its major subsidiary, FBD Insurance plc, is looking after the insurance needs of farmers, private individuals and business owners.

The 2015 results for Farmer Business Developments plc reflect a profit before taxation of €11,454,000 (2014: €6,290,000). After a tax charge of €913,000 (2014: charge €372,000), the Group showed a profit after taxation of €10,541,000 (2014: €5,918,000).

The Consolidated Balance Sheet had Net Assets of €177,773,000 at 31 December 2015, down 15% from €210,356,000 the previous year.

These numbers are considered to be the key performance indicators of the Group.

The Group declared and paid an annual dividend of 5 cent per ordinary share (2014: 5 cent) totalling €2,594,000 (2014: €2,593,000) and preference dividends of €151,000 (2014: €151,000). Retained profit for the year was €7,797,000 (2014: €3,174,000).

The major risks and uncertainties facing the Group’s operating activities lie in the hospitality sector, the primary risk being a downturn in Ireland and Spain that may diminish demand for leisure and business travel. In common with all companies operating in this sector the Group faces risks and uncertainties such as competition and increasing costs. The general economic uncertainty is also a risk for the Group. The Directors are of the opinion that the Group is well positioned to manage these risks.

The major risks and uncertainties facing the Group’s investing activities arise from its exposure to interest rate risk, market risk, foreign currency risk and credit risk through its investments, which are explained in note 29. Within the investment portfolio, the principal individual risk is due to the Company’s significant investment in the shares of FBD Holdings plc, which makes up 33% of its net assets, down from 48% in 2014. While the insurance environment remains challenging, FBD Holdings plc strengthened its capital position and implemented a number of strategic initiatives to restore the group to profitability .

RESULTS

2015 2014

€000s €000s

Profit before taxation 11,454 6,290

Taxation (913) (372)

Profit after taxation 10,541 5,918

Non-controlling interests 17 -

Currency translation movement (16) -

Dividend paid on 14% non-cumulative preference shares (89) (89)

Dividend paid on 11% non-cumulative preference shares (62) (62)

Dividend paid on ordinary shares (2,594) (2,593)

Retained profit for the financial year 7,797 3,174

Net Assets 177,773 210,356


Report of the Directors continued

DIRECTORS

The names of the current Directors are listed on page 4.

At last year’s Annual General Meeting on 4 June 2015, Mr John McCullen and Mr Padraig Walshe retired by rotation and were re-elected as Directors appointed by Shareholders.

On 23 July 2015, Mr Pat Murphy (Glanbia), Mr James Kane (Lakeland) and Mr John Hally (Dairygold) retired as Directors appointed by Co-operative Societies holding shares in the Company. The Societies reappointed Mr Murphy and Mr Kane and appointed Mr Donal Buckley (Dairygold) as a Director.

On 4 December 2015, Mr Pat Smith ceased as a Director of Farmer Business Development plc.

At the forthcoming AGM on 24 June 2016, Mr Jack Bayly and Mr Joe Healy will retire by rotation and are recommended by the Board for re-election by Shareholders.

DIRECTORS’ AND SECRETARY’S INTERESTS

The beneficial interests of the Directors and Secretary of the Company and their spouses, civil partners and minor children in the share capital of the Company, at 31 December 2015 and 1 January 2015 were as follows:

Number of Ordinary Shares of €0.13 each

Number of 14% Non-Cumulative Preference

Shares of €1.27 each

Number of 11% Non-Cumulative Preference

Shares of €0.13 each

Directors: 31/12/15 01/01/15 31/12/15 01/01/15 31/12/15 01/01/15

Jack Bayly 52,575 52,575 600 600 3,000 3,000

John Bryan 2,000 2,000 - - - -

Donal Buckley - - - - -

Barry Donnelly 1,000 1,000 - - - -

Joe Healy 1,000 1,000 - - - -

James Kane 24,921 24,921 - - - -

Michael Kennedy 30,549 30,549 100 100 3,000 3,000

Kevin Kiersey 14,244 14,244 - - - -

Diarmuid Lally 1,000 1,000 - - - -

T.J. Maher 500 500 - - - -

John McCullen 12,567 12,567 100 100 3,000 3,000

Patrick Murphy 5,185 5,185 - - - -

Neil O’Riordan 1,000 1,000 - - - -

Hugh Ryan 22,869 22,869 100 100 - -

Tommy Joe Tuffy 1,000 1,000 - - - -

Padraig Walshe 10,369 10,369 100 100 - -

Secretary

Bryan Barry 6,000 6,000 - - - -


DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTSThe Directors are responsible for preparing the Directors’ Report and the Financial Statements in accordance with the Companies Act 2014 and the applicable regulations.

Irish company law requires the Directors to prepare Financial Statements for each financial year. Under the law, the Directors have elected to prepare the Financial Statements in accordance with FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland (“relevant financial reporting framework”). 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 assets, liabilities and financial position of the Company as at the financial year end date and of the profit or loss of the Company for the financial year and otherwise comply with the Companies Act 2014.

In preparing those Financial Statements, the Directors are required to:

n select suitable accounting policies for the Parent Company and the Group Financial Statements and then apply them consistently;

n make judgements and estimates that are reasonable and prudent;

n state whether the Financial Statements have been prepared in accordance with the applicable accounting standards, identify those standards, and note the effect and the reasons for any material departure from those standards; and

n prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for ensuring that the Company keeps or causes to be kept adequate accounting records which correctly explain and record the transactions of the Company, enable at any time the assets, liabilities, financial position and profit or loss of the Company to be determined with reasonable accuracy, enable them to ensure that the Financial Statements and Directors’ Report comply with the Companies Act 2014 and enable the Financial Statements to be audited. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

SUBSIDIARIESThe Company’s subsidiaries are listed in note 30.

SUBSEQUENT EVENTSThere have been no events subsequent to the year-end which will impact on the Financial Statements for the year ended 31 December 2015.

INDEPENDENT AUDITORSThe auditors, Deloitte, Chartered Accountants and Statutory Audit Firm continue in office in accordance with Section 383(2) of the Companies Act, 2014.

ACCOUNTING RECORDSThe Directors have taken appropriate measures to ensure compliance with Sections 281 to 285 of the Companies Act 2014. The specific measures taken are the use of suitably qualified accounting personnel and the maintenance of appropriate accounting systems. The books of account are located at Irish Farm Centre, Bluebell, Dublin 12.

ANNUAL GENERAL MEETINGThe notice of the Annual General Meeting of the Company which will be held at 12 noon on 24 June 2016 in the Irish Farm Centre, Bluebell, Dublin 12, as set out on page 44.

APPROVAL OF FINANCIAL STATEMENTSThe Financial Statements were approved by the Directors on 24 May 2016.

Signed on behalf of the Board:

Padraig Walshe James Kane Chairman Director

24 May 2016


Independent Auditors’ ReportTo the members of Farmer Business Developments plc

We have audited the financial statements of Farmer Business Developments plc for the year ended 31 December 2015 which comprise the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Equity, the Consolidated Balance Sheet, the Consolidated Statement of Cash Flows, the Company Balance Sheet, Company Statement of Changes in Equity, Company Statement of Cash Flows and the related notes 1 to 35. The relevant financial reporting framework that has been applied in their preparation is the Companies Act 2014 and FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland (“relevant financial reporting framework”).

This report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS

As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the preparation of the Financial Statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014. Our responsibility is to audit and express an opinion on the Financial Statements in accordance with the Companies Act 2014 and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.

SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS

An audit involves obtaining evidence about the amounts and disclosures in the Financial Statements sufficient to give reasonable assurance that the Financial Statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Company’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall presentation of the Financial Statements. In addition, we read all the financial and non-financial information in the Annual Report for the financial year ended 31 December 2015 to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

OPINION ON FINANCIAL STATEMENTS

In our opinion, the Group and parent Company Financial Statements:

n give a true and fair view of the assets, liabilities and financial position of the Group and parent Company as at 31 December 2015 and of the profit of the Group for the financial year then ended; and

n have been properly prepared in accordance with the relevant financial reporting framework and, in particular, with the requirements of the Companies Act 2014.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY THE COMPANIES ACT 2014

n We have obtained all the information and explanations which we consider necessary for the purposes of our audit.

n In our opinion the accounting records of the parent Company were sufficient to permit the Financial Statements to be readily and properly audited.


n The parent Company Balance Sheet is in agreement with the accounting records.

n In our opinion the information given in the Directors’ Report is consistent with the Financial Statements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion, the disclosures of Directors’ remuneration and transactions specified by law are not made.

Kevin Sheehan For and on behalf of Deloitte Chartered Accountants and Statutory Audit Firm, Dublin

24 May 2016


Consolidated Income StatementFor the financial year ended 31 December 2015

2015 2014

Notes €000s €000s

Turnover 4 11,935 -

Cost of sales (4,543) -

Gross profit 7,392 -

Staff costs 5 (4,421) (155)

Lease provision reduction/(increase) 24 342 (300)

Administrative expenses (2,837) (226)

Group operating profit/(loss) 476 (681)

Fair value gain/(loss) on investments 15 1,337 (5,150)

Profit on sale of investments 15 4,146 4,060

Share of results of joint venture 14 1,763 1,930

Profit before interest and taxation 7,722 159

Interest income and other similar items 6 4,091 6,131

Interest payable and similar expenses 7 (359) -

Profit before taxation 8(a) 11,454 6,290

Taxation 10 (913) (372)

Profit after taxation 10,541 5,918

Attributable to non-controlling interests 27 17 -

Profit for the financial year 10,558 5,918

All income arises from continuing activities.

The above results include the results of FBD Property & Leisure group from 23 October 2015 to 31 December 2015.

The Financial Statements were approved by the Board on 24 May 2016.


Consolidated Statement of Comprehensive IncomeFor the financial year ended 31 December 2015

2015 2014


Profit for the financial year 10,558 5,918

OTHER COMPREHENSIVE INCOME

Currency translation movement (16) -

Unrealised losses on investments classified as available for sale 13 (41,124) (50,808)

Total comprehensive loss for the financial year (30,582) (44,890)

Consolidated Statement of Changes in EquityFor the financial year ended 31 December 2015

€000s €000s €000s €000s €000s €000s €000s

At 1 January 2014 7,117 143,353 102,241 4,074 1,196 - 257,981

Profit for the year - - 5,918 - - - 5,918

Other Comprehensive expense - (50,808) - - - - (50,808)

Sale of treasury shares - - 9 - - - 9

Dividends paid and approved - - (2,744) - - - (2,744)

At 31 December 2014 7,117 92,545 105,424 4,074 1,196 - 210,356

Acquisition of subsidiary - - - - - 761 761

Profit for the year - - 10,558 - - (17) 10,541

Other Comprehensive expense - (41,124) (16) - - - (41,140)

Dividends paid and approved - - (2,745) - - - (2,745)

At 31 December 2015 7,117 51,421 113,221 4,074 1,196 744 177,773

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Consolidated Balance SheetAt 31 December 2015

2015 2014


NON CURRENT ASSETS

Tangible fixed assets 12 122,180 -

Investments – available for sale 13 59,012 100,136

Investment in joint venture 14 - 61,079

Investments – designated as at FVTPL 15 47,525 44,861

Negative goodwill 14 (789) -

Deferred taxation asset 20(a) 280 -

228,208 206,076

CURRENT ASSETS

Inventories 16 11,393 -

Debtors 17 (a) 11,940 1,250

Cash and cash equivalents 6,346 12,454

29,679 13,704

CURRENT LIABILITIES

CREDITORS – Amounts falling due within one year 21(a) (27,799) (8,052)

NET CURRENT ASSETS 1,880 5,652

TOTAL ASSETS LESS CURRENT LIABILITIES 230,088 211,728

NON CURRENT LIABILITIES – amounts falling due after one year 21(c) (52,315) (1,372)

NET ASSETS 177,773 210,356

CAPITAL AND RESERVES

Called up share capital presented as equity 25 7,117 7,117

Reserves 168,716 202,043

SHAREHOLDERS’ FUNDS - EQUITY INTERESTS 175,833 209,160

Preference share capital 26 1,196 1,196

SHAREHOLDERS’ FUNDS ATTRIBUTABLE TO THE OWNERS 177,029 210,356

Non-controlling interests 27 744 -

Total Equity 177,773 210,356

The Financial Statements were approved by the Board on 24 May 2016 and signed on its behalf by:


The accompanying notes on pages 16 to 43 form an integral part of the Financial Statements.


Consolidated Statement of Cash FlowsFor the financial year ended 31 December 2015

2015 2014


OPERATING ACTIVITIES

Net cash inflow from operating activities 28 3,324 5,248

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of subsidiary (net of cash acquired) 14 (43,741) -

Purchase of tangible fixed assets (517) -

Loan repayment received from related company 7,500 -

Sale of quoted and unquoted investments 15 5,554 10,959

Purchase of quoted and unquoted investments 15 (10,066) (2,882)

Net cash (outflow)/inflow from investment activities (41,270) 8,077

CASH FLOW FROM FINANCING ACTIVITIES

Sale of treasury shares - 9

Proceeds from new bank borrowings 35,000 -

Repayments of loan obligations (417) -

Ordinary and preference dividends paid 11 (2,745) (2,744)

Net cash inflow/(outflow) from financing activities 31,838 (2,735)

(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS FOR THE YEAR (6,108) 10,590

Cash and cash equivalents at the start of the year 12,454 1,864

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 6,346 12,454


Company Balance SheetAt 31 December 2015

2015 2014


NON CURRENT ASSETS

Investment in joint venture 14 - 61,079

Investments – designated as at FVTPL 15 47,525 44,861

Investment in subsidiaries 18 173,975 132,773

221,500 238,713

CURRENT ASSETS

Debtors – falling due within one year 17(b) 779 1,246


2,815 11,265

CURRENT LIABILITIES

Creditors – Amounts falling due within one year 21(b) (43,530) (40,486)

NET CURRENT LIABILITIES (40,715) (29,221)

TOTAL ASSETS LESS CURRENT LIABILITIES 180,785 209,492

Creditors - Amounts falling due after more than one year 21(d) (5,000) -

NET ASSETS 175,785 209,492


Called up share capital presented as equity 25 7,117 7,117

Reserves 167,472 201,179

ORDINARY SHAREHOLDERS’ FUNDS 174,589 208,296

Preference share capital 26 1,196 1,196

TOTAL SHAREHOLDERS’ FUNDS 175,785 209,492

The Financial Statements were approved by the Board on 24 May 2016 and signed on its behalf by:


The accompanying notes on pages 16 to 43 form an integral part of the Financial Statements.


Company Statement of Changes in Equity For the financial year ended 31 December 2015

Called upshare capitalpresented as

equityRevenuereserves

Capital redemption

reservesPreference

share capitalTotal

equity

€000s €000s €000s €000s €000s

At 1 January 2014 7,117 244,357 4,074 1,196 256,744

Loss for the year - (44,517) - - (44,517)

Sale of treasury shares - 9 - - 9

Dividends paid and approved - (2,744) - - (2,744)

At 31 December 2014 7,117 197,105 4,074 1,196 209,492

Loss for the year - (30,962) - - (30,962)

Dividends paid and approved - (2,745) - - (2,745)

At 31 December 2015 7,117 163,398 4,074 1,196 175,785

Company Statement of Cash FlowsFor the financial year ended 31 December 2015

2015 2014


OPERATING ACTIVITIES

Net cash inflow from operating activities 28(b) 5,372 4,643

CASH FLOW FROM INVESTING ACTIVITIES

Investment in subsidiary (23,598) -

Loan repayment received from related company 7,500 -

Sale of quoted and unquoted investments 15 5,554 10,959

Purchase of quoted and unquoted investments 15 (10,066) (2,882)

Net cash (outflow)/inflow from investment activities (20,610) 8,077

CASH FLOW FROM FINANCING ACTIVITIES

Sale of treasury shares - 9

Proceeds from new bank borrowings 10,000 -

Ordinary and preference dividends paid (2,745) (2,744)

Net cash inflow/(outflow) from financing activities 7,255 (2,735)

(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS FOR THE YEAR (7,983) 9,985

Cash and cash equivalents at the start of the year 10,019 34

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 2,036 10,019


Notes to the Financial StatementsFor the financial year ended 31 December 2015

1 STATEMENT OF ACCOUNTING POLICIES

A) BASIS OF PREPARATION

The Group Financial Statements have been prepared under the historical cost convention as modified by the revaluation of certain financial instruments in accordance with the Companies Acts 2014 and FRS 102.

B) GENERAL INFORMATION AND BASIS OF ACCOUNTING

The financial statements have been prepared under the historical cost convention, modified to include certain items at fair value, and in accordance with Financial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council, and promulgated for use in Ireland by Chartered Accountants Ireland.

C) BASIS OF CONSOLIDATION

The consolidated Financial Statements include the Financial Statements of the Company and its subsidiary undertakings, made up to 31 December 2015. In subsidiary undertakings, control is achieved where the Company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities. The accounting policies of the subsidiaries are in line with those used by the Group.

All intra Group transactions, balances, income and expenses are eliminated on consolidation.

The Group’s share of the results and net assets of a joint venture are included based on the equity method of accounting. A joint venture is an entity subject to joint control by the Group and other parties. Under the equity method of accounting, the Group’s share of the post-acquisition profits and losses of joint ventures is recognised in the Consolidated Income Statement. In the Group and the Company’s Balance Sheets the joint venture is held at cost plus the Group’s share of the post-acquisition profits and losses.

The acquisition of subsidiaries is accounted for using the acquisition method. The cost of acquisition is measured as the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS102 are recognised at their fair value at the acquisition date.

D) NEGATIVE GOODWILL

The excess of the net amount of identifiable assets, liabilities and provisions for contingent liabilities recognised in accordance with FRS 102 over the cost of the business combination is recognised as negative goodwill on the face of the Balance Sheet at the acquisition date. Any excess exceeding the fair value of non-monetary assets acquired is recognised in profit and loss in the periods expected to be benefited.

E) TURNOVER

Turnover recognised in the Consolidated Income Statement account represents the total invoice value of goods or services supplied to customers outside the Group during the year, excluding VAT and discounts. Turnover is recognised to the extent that the Group obtains the right to consideration in exchange for its performance. Where payments are received in advance of goods or services provided, the amounts are recorded as deferred income and included as part of creditors due within one year.

Turnover on property sales is recognised on signing of agreements and when the entity has transferred the significant risks and rewards of ownership of the property and the amount of revenue can be measured reliably.

F) TAXATION AND DEFERRED TAXATION

Current tax, including Irish corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


F) TAXATION AND DEFERRED TAXATION (continued)

Deferred tax arises in respect of all timing differences at the reporting date. Timing differences are differences between taxable profits and total comprehensive income as stated in the financial statements that arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.

Deferred tax assets are recognised only to the extent that is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. They are regarded as recoverable to the extent that, on the basis of available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

Deferred tax relating to property, plant and equipment measured using the revaluation model and investment property is measured using the tax rates and allowances that apply to sale of the asset. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income.

Current tax assets and liabilities are offset only when there is a legally enforceable right to set off the amounts and the Company intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Deferred tax assets and liabilities are offset only if: a) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and b) the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on the Company and the Company intends either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

G) FOREIGN CURRENCY

The individual financial statements of each company in the Group are stated in the currency of the primary economic environment in which it operates (its functional currency).

The functional and the presentation currency of the Group Financial Statements is euro, denoted by the symbol €. Transactions in currencies other than euro are recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities in foreign currencies have been translated into euro at closing rates at the reporting date. Gains and losses on translation are recognised in the Consolidated Income Statement in the period in which they arise except when they relate to items for which gains and losses are recognised in equity. Non-monetary items are translated at the exchange rate at the date of transaction.

H) RETIREMENT BENEFITS

The Group operates a number of defined contribution schemes. Costs arising in respect of the Group’s defined contribution schemes are charged to the consolidated income statement as an expense as they fall due.

I) DIVIDENDS

Dividend income from investments is recognised when the shareholders’ rights to receive payment have been established.


Notes to the Financial Statements continued

1 STATEMENT OF ACCOUNTING POLICIES continued

I) DIVIDENDS (continued)

Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s Financial Statements in the period in which the dividends are approved.

J) TANGIBLE FIXED ASSETS AND DEPRECIATION

All tangible fixed assets are initially recorded at historic cost. The Group has a policy of full valuation by independent external valuers of land and buildings and investment properties on the basis of existing use at least every five years. Tangible fixed assets acquired as part of a business combination are recorded at fair value.

If an asset’s carrying amount is increased as a result of a revaluation, the increase shall be recognised in other comprehensive income and accumulated in equity. However, the increase shall be recognised in Consolidated Income Statement to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit and loss.

The decrease of an asset’s carrying amount as a result of an impairment shall be recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity, in respect of that asset.

Depreciation is provided at rates calculated to write off the cost, less residual value based on prices prevailing at the date of acquisition, of each asset evenly over its expected useful life, over a five to seven year period.

K) REVALUATION OF INVESTMENT PROPERTIES

Investment properties for which fair value can be measured reliably without undue cost or effort on an ongoing basis are measured at fair value annually with any change recognised in the Income Statement. The Directors used a valuation technique based on a discounted cash flow model in determining the fair value of investment property at the reporting date. The determined fair value of the investment property is most sensitive to the estimated discount factor.

L) INVENTORIES

Inventories acquired as part of an acquisition are valued at fair value, otherwise they are valued at the lower of cost and net realisable value after making due allowance for any obsolete or slow moving items. Cost includes all expenditure incurred in bringing inventories to their present location and condition. Net realisable value is the estimated selling price, less further costs expected to be incurred to completion and disposal. Inventories include development land which the Group intend to dispose and/or develop in the short to medium term.

M) FINANCIAL INSTRUMENTS

Financial Instruments are recognised and measured in accordance with Section 12.2(b) of FRS 102 which adapts the provisions of IAS 39 Financial Instruments: Recognition and Measurement. Financial Instruments are recognised in the Consolidated Balance Sheet when the Group becomes a party to the contractual provisions of the instrument.

(i) Investments classified as at fair value through profit or loss (FVTPL) Financial assets are classified as FVTPL (fair value through profit or loss) when the financial asset is either held for trading or it is designated as FVTPL.

A financial asset is classified as held for trading if:

n it has been acquired principally for the purpose of selling in the near term; or

n on initial recognition it is a part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

n it is a derivative that is not designated and effective as a hedging instrument.


M) FINANCIAL INSTRUMENTS (continued)

A financial asset other than a financial asset held for trading may be designated as FVTPL upon initial recognition if:

n such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

n the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

n it forms part of a contract containing one or more embedded derivatives, the entire combined contract (asset or liability) may be designated as FVTPL.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in the Consolidated Income Statement.

(ii) Available for sale investments Available for sale investments of the Group include its shareholding in FBD Holdings plc. This investment is stated at fair value, using the closing bid price, with unrealised gains and losses recognised as a revaluation surplus or deficit in the revaluation reserve in the year in which they arise.

In the accounts of the subsidiary company, Farmer Business Developments Assets Ltd, the investment is stated at fair value using the closing bid price, with unrealised gains and losses reflected through the Consolidated Income Statement.

(iii) Deposits Term deposits with banks comprise cash held for the purpose of investment. Demand deposits with banks are held for operating purposes.

(iv) Loans and receivables Loans are initially measured at fair value plus transaction costs and subsequently carried at amortised cost less any impairment using the effective interest rate method. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts though the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount of initial recognition. Interest is charged on the loans at the market rate.

(v) Investment in Group companyFinancial assets representing the Company’s investment in subsidiary undertakings are stated at cost less provision for any permanent diminution in value.

N) IMPAIRMENT OF FINANCIAL INSTRUMENTS

Financial assets at amortised cost are assessed for indicators of impairment at each reporting date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, the estimated future cash flows of the investment have been impacted.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at financial asset’s original effective interest rate.

If, in a subsequent year, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss, to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.



1 STATEMENT OF ACCOUNTING POLICIES continued

O) SHARE CAPITAL

Ordinary Shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are taken as a deduction within equity, net of tax, from the proceeds.

Preference Shares Preference shares that meet the criteria of FRS102 are classified as equity.

P) TREASURY SHARES

Where the Company purchases its own equity share capital, the consideration paid is deducted from total shareholders’ equity and classified as treasury shares until such shares are cancelled or re-issued. Where such shares are subsequently sold or re-issued, any consideration received is included in total shareholders’ equity.

Q) INTEREST-BEARING LOANS AND BORROWINGS

All interest-bearing loans and borrowings are initially recognised at fair value. After initial recognition debt is increased by the finance cost in respect of the reporting period and reduced by repayments made in the period.

R) CAPITAL INSTRUMENTS

Equity instruments are included in shareholders’ funds. Other instruments, including convertible loan notes are included in liabilities at fair value and if they contain an obligation to transfer economic benefits. The finance cost recognised in the income statement in respect of capital instruments other than equity shares is allocated to periods over the term of the instrument at a constant rate on the carrying amount.

2 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, which are described in note 1, the Directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the Group’s accounting policies

The following are the critical judgements, that the Directors have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

Hotel assets, resorts and investment properties are included in the Balance Sheet at fair value. The fair value of these properties is determined by valuations conducted by management and supported be external professional valuers as required.

The carrying value of inventory acquired as part of the acquisition is valued at its fair value, otherwise value of inventory is recorded at the lower of cost or estimated selling price. The land held for long term capital appreciation is valued at its fair value within investment property.

Financial instruments are measured subsequent to initial recognition at fair value and grouped into Level 1 to 3 based on the degree to which fair value is observable. Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data.


3 BASIS OF PREPARATION - GOING CONCERNAt the time of approving the financial statements, the Directors are confident that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future and that the Financial Statements should be prepared on a going concern basis.

In arriving at this view, the Directors have reviewed its capital commitments for 2016 and have taken account of its significant liquid and near liquid asset resources.

4 TURNOVER - GROUP

(a) By geographical area 2015 2014

€000s €000s

Ireland 3,403 -

Spain 8,532 -

11,935 -

(b) By line of business 2015 2014

€000s €000s

Property 3,855 -

Hotel and Resorts 8,028 -

Lease income 52 -

11,935 -

Turnover for Property, Hotel and Resorts relate to the period from 23 October to 31 December 2015.

5 STAFF NUMBERS AND COSTS - GROUPThe average numbers of persons, excluding the Directors, employed by the Group during the financial year was 129 (2014: nil), analysed as follows:

2015 2014

Numbers Numbers

Irish operations 57 -

Spanish operations 72 -

129 -

Staff costs comprised: 2015 2014

€000s €000s

Salaries and Directors' fees 3,672 151

Social welfare costs 653 4

Pension costs 96 -

Total staff costs 4,421 155

Accrued Group pension costs payable at 31 December 2015 €11,823 (2014: €Nil). Included in staff costs above are Directors’ fees €116,000, (2014: €116,000). Average staff numbers and staff costs include FBD Property & Leisure group from 23 October to 31 December 2015.



6 INTEREST INCOME AND SIMILAR ITEMS

2015 2014

€000s €000s

Dividend income from available for sale investments 2,902 4,470

Interest receivable 1,189 1,661

4,091 6,131

7 INTEREST PAYABLE AND SIMILAR EXPENSES

2015 2014

€000s €000s

Interest paid on bank loans, overdrafts and other loans wholly repayable within five years 359 -

359 -

8 (a) PROFIT BEFORE TAXATION

2015 2014

€000s €000s

The profit before taxation is stated after crediting:

Interest receivable 1,189 1,661

Fair value gain/(loss) on investments 1,337 (5,150)

Profit on sale of investments 4,146 4,060

And after charging:

Depreciation of tangible fixed assets 460 -

Lease provision reduction/(increase) 342 (300)

Directors’ remuneration

– Fees for services as Directors 116 116

8 (b) LOSS AFTER TAXATION

A loss of €30,962,000 (2014: loss €44,517,000) has been reflected in the Financial Statements of the parent Company. In accordance with Section 304(2) of the Companies Act, 2014 the Company is availing of the exemption from presenting its individual Income Statement to the Annual General Meeting and from filing it with the Registrar of Companies.


9 INFORMATION RELATING TO AUDITORS’ REMUNERATION

2015 2014

€000s €000s

Remuneration for work carried out for the Company and Group in respect of the financial year by the statutory audit firm, Deloitte and its affiliates as follows:

Description of service

Audit services

– Group 148 20

– Company 20 14

Tax advisory services

– Group 48 14

– Company 29 14

Fees payable by the Company are included with the fees payable by the Group in each category above.

Fees for audit and tax advisory services for 2015 include fees for FBD Property & Leisure group from 23 October to 31 December 2015.

10 TAXATION - GROUP

(a) Analysis of movement in year 2015 2014

€000s €000s

Current taxation charge 917 372

Deferred taxation (credit) (4) -

913 372

(b) Factors affecting tax charge for year

The tax assessed for the year is lower than the standard rate of corporation tax in Ireland (12.5%) (2014: 12.5%). The differences are explained below.

2015 2014

€000s €000s


Profit on ordinary activities at standard rate of corporation tax in Ireland

of 12.5% (2014: 12.5%) 1,432 786

Effects of:

Non-taxable income/unrealised gains/losses not chargeable/deductible for tax purposes (980) (699)

Income at higher rate 461 208

Adjustments in respect of prior years - 77

Current taxation charge for the period 913 372



11 DIVIDENDS

2015 2014

€000s €000s

Paid:

Dividend of 17.78c (2014: 17.78c) per share on the 14% non-cumulative preference shares of €1.27 each 89 89

Dividend of 1.43c (2014: 1.43c) per share on the 11% non-cumulative preference shares of €0.13 each 62 62

Dividend of 5c (2014: 5c) per share on ordinary shares of €0.13 each 2,594 2,593

2,745 2,744

Proposed:

Dividend of 5c (2014: 5c) per share on the ordinary shares of €0.13 each 2,594 2,594

12 TANGIBLE FIXED ASSETS - GROUP

Hotels Golf Investment

Property Total

€000s €000s €000s €000s

Cost: At 1 January 2015 - - - -

Acquisition 138,536 38,525 20,039 197,100

Additions 1,043 41 - 1,084

At 31 December 2015 139,579 38,566 20,039 198,184

Depreciation:

At 1 January 2015 - - - -

Acquisition 53,798 21,746 - 75,544

Charge for the period 276 184 - 460

At 31 December 2015 54,074 21,930 - 76,004

Net book value:

At 31 December 2015 85,505 16,636 20,039 122,180

At date of acquisition 84,738 16,779 20,039 121,556


12 TANGIBLE FIXED ASSETS - GROUP (continued)

There were no tangibile fixed assets in the prior year.

The net carrying amount of assets held under finance leases included in hotel assets is €269,258 (2014: Nil).

On 23 October 2015, as part of the acquisition of FBD Property & Leisure group, the Group acquired Tangible Fixed Assets with a fair value of €121,556,000. In establishing fair value the Directors have relied upon external professional valuers reports. Market value is defined as the estimated amount for which the property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein parties had each acted knowledgeably, prudently and without compulsion. The approach used for valuing the hotel, golf and land assets is the income capitalisation method using stabilised profit and discounted cash flow method.

Hotel and golf resort assets have been used as security for bank loans totalling €56m.



13 INVESTMENTS – AVAILABLE FOR SALE – GROUP

2015 2014

€000s €000s

Balance at start of year 100,136 150,944

Revaluation deficit (note 24(a)) (41,124) (50,808)

Balance at end of year 59,012 100,136

The balance at year end comprises:

Investment in FBD Holdings plc

8,531,948 (2014: 8,531,948) ordinary shares of €0.60 each 56,396 97,520

1,340,000 (2014: 1,340,000) 14% non-cumulative preference shares of €0.60 each 1,608 1,608

1,470,292 (2014: 1,470,292) 8% non-cumulative preference shares of €0.60 each 1,008 1,008

59,012 100,136

The Company holds 24.62% (2014: 24.62%) of the ordinary share capital of FBD Holdings plc.

FBD Holdings plc is a quoted investment holding Company. The fair value of its ordinary shares at year end was €6.61 (2014: €11.43). Preference shares are included at fair value, the Directors consider the fair value of 14% preference shares to be €1.20 (2014: €1.20) and the fair value of 8% preference shares to be €0.69 (2014: €0.69). The principal activity of its principal subsidiary, FBD Insurance, is looking after the insurance needs of farmers, private individuals and business owners. The registered office of FBD Holdings plc is FBD House, Bluebell, Dublin 12. The financial information shown over-leaf has been prepared under International Financial Reporting Standards. The 2014 figures were restated to reflect a change in accounting policy in relation to other provisions and curtailments of defined benefit pension.

CONSOLIDATED FINANCIAL INFORMATION ON FBD HOLDINGS PLC INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

2015Restated

2014

€000s €000s

Income 347,691 344,892

Expenses (433,148) (349,829)

Result before taxation from continuing operations (85,457) (4,937)

Taxation 11,222 1,013

Result for the financial year from continuing operations (74,235) (3,924)

Result from discontinued operations including loss from sale 668 1,930

Result for the year (73,567) (1,994)

Attributable to:

Equity holders of the parent (73,685) (2,089)

Non-controlling interests 118 95

(73,567) (1,994)


13 INVESTMENTS – AVAILABLE FOR SALE – GROUP (continued)

STATEMENT OF FINANCIAL POSITION OF FBD HOLDINGS PLC AT 31 DECEMBER 2015

2015Restated

2014

€000s €000s

Property, plant & equipment 72,617 62,625

Investment in joint venture - 47,167

Deferred acquisition costs 27,545 28,427

Financial assets 970,095 856,273

Loans and receivables 69,151 68,664

Deferred taxation asset 13,139 5,572

Reinsurance assets 80,083 57,310

Retirement benefit asset 9,110 -


1,263,984 1,152,228

Insurance contract liabilities (926,728) (773,633)

Other provisions (10,938) (7,920)

Convertible debt (50,036) -

Payables (54,054) (37,140)

Deferred taxation liability (2,990) (5,266)

Retirement benefit obligation - (54,254)

NET ASSETS 219,238 274,015


Called up share capital presented as equity 21,409 21,409

Capital reserves 18,553 18,756

Retained earnings 157,670 230,444

Other reserves 18,232 -

ORDINARY SHAREHOLDERS’ FUNDS 215,864 270,609

Preference share capital 2,923 2,923

TOTAL SHAREHOLDERS’ FUNDS 218,787 273,532

Non-controlling interests 451 483

TOTAL EQUITY 219,238 274,015



14 BUSINESS COMBINATIONS – GROUP

In 2011, a 50%:50% joint venture was established with FBD Holdings plc to own and manage the Irish and Spanish property and leisure operations of the FBD Property & Leisure group, previously 100% owned by FBD Holdings plc.

The joint venture up to 23 October has been reflected in the accounts of the Group as follows:

2015 2014

€000s €000s

At start of year 61,079 59,149

Share of results of joint venture 1,763 1,930

Repayment of related party loan (7,500) -

Transfer from Investments (note 15) 10 -

Joint venture value at date of acquisition (55,352) -

Investment in joint venture at 31 December - 61,079

On 23 October 2015, the Group acquired control of the FBD Property & Leisure group through the purchase of 10,000 ‘B’ ordinary shares and the repayment of the B-ICULN previously held by FBD Holdings plc, for a total consideration of €48,500,000.

The following table summarises the consideration paid by the Group, the fair value of assets acquired, liabilities assumed and the non-controlling interests at the acquisition date.

Consideration at 23 October 2015:

€000s

Cash 48,500

Directly attributable costs 99

Total consideration 48,599

For cashflow disclosure purposes the amounts are disclosed as follows:

€000s

Cash 48,500

Directly attributable costs 99

Less: cash and cash equivalents acquired (4,858)

Net cash outflow 43,741


14 BUSINESS COMBINATIONS – GROUP (continued)

Recognised amounts of identifiable assets acquired and liabilities assumed:

Bookvalues Adjustments Fair value

Note €000s €000s €000s

Fixed assets 121,556 - 121,556

Cash and cash equivalents 4,858 - 4,858

Inventories (a) 11,522 3,356 14,878

Trade and other receivables 8,745 - 8,745

Trade and other payables (18,349) - (18,349)

Borrowings (21,387) - (21,387)

Deferred tax assets/(liabilities) (b) (3,961) (839) (4,800)

Total identifiable net assets 102,984 2,517 105,501

Joint venture value at date of acquisition (55,352)

Non-controlling interest (761)

Negative goodwill (789)

48,599

The adjustments arising on acquisition were in respect of the following:

(a) An increase in the value of land acquired.

(b) Deferred tax adjustment arising as a result of the acquisition adjustments.

The revenue from the FBD Property & Leisure group included in the Consolidated Income Statement for 2015 was €11,883,000.



15 INVESTMENTS – DESIGNATED AS AT FAIR VALUE THROUGH PROFIT OR LOSS – GROUP AND COMPANY

2015 2014

€000s €000s

Quoted shares (cost €5,994,000) (2014: €5,994,000) 2,645 2,068

Unquoted shares (cost €37,022,000) (2014: €37,397,000) 44,880 42,793

47,525 44,861

The movements on the above investments are as follows:

2015 2014

€000s €000s

Balance 1 January 44,861 46,707

Purchase of investments* 2,745 10,203

Sale of investments (5,554) (10,959)

Transfer to joint venture (note 14) (10) -

Profit on sale of investments 4,146 4,060

Unrealised gain/(loss) on investments* 1,337 (5,150)

Balance 31 December 47,525 44,861

* In 2014 comparatives above, the obligation of €7,321,000 under the guarantee in respect of one of the Group’s investments is included in “Purchase of investments” and also in “Unrealised loss on investments”.

16 INVENTORIES - GROUP

2015 2014

€000s €000s

Consumables 840 -

Land 10,553 -

11,393 -

The Directors are of the opinion that the carrying values of inventories are not materially different from their replacement cost.

17 (a) DEBTORS – GROUP AMOUNTS FALLING DUE WITHIN ONE YEAR:

2015 2014

€000s €000s

Trade and sundry debtors 9,675 -

Sinking fund reserve 1,553 -

Corporation taxation - 49

Short term loan - 150

Prepayments 712 1,051

11,940 1,250


17 (b) DEBTORS – COMPANY AMOUNTS FALLING DUE WITHIN ONE YEAR:

2015 2014

€000s €000s

Corporation taxation 148 44

Short term loan - 150

Prepayments 631 1,052

779 1,246

18 INVESTMENT IN SUBSIDIARIES - COMPANY:

2015 2014

€000s €000s

Amount owed by subsidiary companies 173,975 132,773

19 SINKING FUND RESERVE - GROUP

The sinking fund exists in Sunset Beach Club Management Limited, a wholly owned subsidiary of Mediterranean Sales Limited which is a subsidiary of FBD Property & Leisure Ltd. The amount outstanding represents funds advanced to the sinking fund by Sunset Developments Limited regarding a major refurbishment project at Sunset Beach Club. The funds due to Sunset Developments Limited are unsecured, carry interest at Euribor +5% and are repayable on demand.

20 (a) DEFERRED TAXATION ASSET - GROUP

2015 2014

€000s €000s

At date of acquisition of FBD Property & Leisure 280 -

Deferred taxation provided for in the accounts is as follows:

Taxation losses carried forward 280 -

20 (b) DEFERRED TAXATION LIABILITY - GROUP

2015 2014

€000s €000s

At date of acquisition of FBD Property & Leisure 5,080 -

Credit to Income Statement (4) -

5,076 -

20 (c) DEFERRED TAXATION ASSET – COMPANY

Deferred tax assets in respect of unrealised losses on investments totalling €2,822,000 (2014: €8,057,000) have not been recognised at the reporting date due to uncertainty on the timing and extent of taxable profits.



21 (a) CREDITORS – GROUP AMOUNTS FALLING DUE WITHIN ONE YEAR:

2015 2014

€000s €000s

Creditors and accruals* 15,226 7,661

Onerous lease provision (note 24) 222 324

Bank and other loans (note 22 (a)) 9,393 -

Corporation taxation 2,179 -

VAT 262 -

PAYE/PRSI 517 -

Amount owed to related company (note 34) - 67

27,799 8,052

*The 2014 “Accruals” comparative above included €7,321,000 which was paid early in 2015 in respect of a guarantee obligation for one of the Group’s investments.

21 (b) CREDITORS – COMPANY AMOUNTS FALLING DUE WITHIN ONE YEAR:

2015 2014

€000s €000s

Accruals* 361 7,588

Amount owed to subsidiary companies 38,169 32,831

Bank loan (note 22(b)) 5,000 -

Amount owed to related company (note 34) - 67

43,530 40,486

*The 2014 “Accruals” comparative above included €7,321,000 which was paid early in 2015 in respect of a guarantee obligation for one of the Company’s investments.

21 (c) CREDITORS – GROUP AMOUNTS FALLING DUE AFTER ONE YEAR:

2015 2014

€000s €000s

Bank loan (note 22(a)) 46,577 -

Deferred taxation liability (note 20(b)) 5,076 -

Onerous lease provision (note 24) 662 1,372

52,315 1,372

21 (d) CREDITORS – COMPANY AMOUNTS FALLING DUE AFTER ONE YEAR:

2015 2014

€000s €000s

Bank loan (note 22(b)) 5,000 -

5,000 -


22 (a) BANK LOANS - GROUP

2015 2014

€000s €000s

Bank borrowings 55,970 -

The maturity of the Group’s bank borrowings is analysed as follows:

On demand or due within one year 9,393 -

Between two and five years 46,577 -

55,970 -

Bank borrowings are analysed as follows:

Included in current liabilities 9,393 -

Included in long term liabilities 46,577 -

55,970 -

All bank borrowings at 31 December 2015 are denominated in euro. The average rate of interest applicable to total loans is 3.36%.

22 (b) BANK LOANS - COMPANY

2015 2014

€000s €000s

Bank borrowings 10,000 -

The maturity of the Group’s bank borrowings is analysed as follows:

On demand or due within one year 5,000 -

Between two and five years 5,000 -

10,000 -

Bank borrowings are analysed as follows:

Included in current liabilities 5,000 -

Included in long term liabilities 5,000 -

10,000 -

All bank borrowings at 31 December 2015 are denominated in euro. The average of interest applicable to total loans is 3%.

23 SECURITY - GROUP

At 31 December 2015, security was given on bank loans totalling €56m by way of all sums cross guarantee by FBD Property & Leisure and its subsidiaries, a charge over Irish hotel and golf resort assets to the fair value of €38m and a share mortgage over FBD Property & Leisure’s Spanish subsidiaries.



24 PROVISION FOR LIABILITIES AND CHARGES – GROUP

2015 2014

€000s €000s

Onerous lease provision

Balance at 1 January 1,696 1,720

Provision released (470) (324)

Unwinding of discount 118 132

(Reduction)/addition in provision (460) 168

Balance at 31 December 884 1,696

Analysed as:

Amounts falling due within one year 222 324

Amounts falling due after one year 662 1,372

884 1,696

In 2012, the sub-lessee of a subsidiary company went into liquidation leading to the creation of an onerous lease provision totalling €2,023,000. The balance of the provision at 31 December 2014 was €1,696,000. During 2015, the company entered into a sub-lease agreement with an unrelated entity for the remaining life of the property lease, ending in October 2021. As a result, the future liabilities of the company will be reduced. A review of the onerous lease provision was conducted following this sub-lease agreement and an adjustment of €460,000 was recorded against the outstanding provision. The balance of the onerous provision as at 31 December 2015 was €884,000, with €222,000 of this provision included in creditors falling due within one year.

25 CALLED UP SHARE CAPITAL PRESENTED AS EQUITY – GROUP AND COMPANY

2015 2014

Number €000s €000s

AUTHORISED:

Ordinary shares of €0.13 each 99,359,130 12,917 12,917

“B” ordinary shares of €1.27 each 5,000,000 6,350 6,350

19,267 19,267

ISSUED:

Ordinary shares of €0.13 each 54,747,876 7,117 7,117

The number of ordinary shares of €0.13 each held as treasury shares at the year-end was 2,877,772 (2014: 2,877,772). This represents 5.3% (2014: 5.3%) of the shares of this class in issue and had a nominal value of €374,000 (2014: €374,000).


26 PREFERENCE SHARE CAPITAL – GROUP AND COMPANY

2015 2014

Number €000s €000s

AUTHORISED:

14% non-cumulative preference shares of €1.27 each 500,000 635 635

11% non-cumulative preference shares of €0.13 each 10,000,000 1,300 1,300

1,935 1,935

ISSUED:

At beginning and end of year

14% non-cumulative preference shares of €1.27 each 500,000 635 635

11% non-cumulative preference shares of €0.13 each 4,315,050 561 561

1,196 1,196

The rights attaching to each class of share capital are set out in the Company’s Articles of Association. In the event of the Company being wound up, the holders of the 14% non-cumulative preference shares rank ahead of the holders of the 11% non-cumulative preference shares, who in turn, rank ahead of the holders of the ordinary shares of €0.13 each.

27 NON-CONTROLLING INTERESTS - GROUP

2015 2014

€000s €000s

Balance at date of acquisition 761 -

Share of results for the period (17) -

744 -



28 (a) RECONCILIATION OF PROFIT BEFORE TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES – GROUP

2015 2014

€000s €000s


Adjustments for:

Depreciation 460 -

Repossession of timeshare weeks (566) -

Decrease in inventories 3,486 -

Increase in debtors (1,993) (42)

Decrease in creditors (463) (263)

Decrease in provision for liabilities and charges (812) (24)

Joint venture trading results (1,763) (1,930)

Profit on the sale of investments (4,146) (4,060)

Decrease in value of investments held at Fair Value through profit or loss (1,337) 5,150

Cash generated from operations 4,320 5,121

Corporation taxation (paid)/refunded (996) 127

Net cash inflow from operating activities 3,324 5,248

28 (b) RECONCILIATION OF LOSS BEFORE TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES – COMPANY

2015 2014

€000s €000s

Loss before taxation (30,044) (44,147)

Adjustments for:

Decrease/(increase) in debtors 572 (125)

Increase/(decrease) in creditors 1,967 (1,154)

Joint venture trading results (1,763) (1,930)

Profit on the sale of investments (4,146) (4,060)

Decrease in value of investments classified as available for sale 41,124 50,808

Decrease in value of investments held at Fair Value through profit or loss (1,337) 5,150

Cash generated from operations 6,373 4,542

Corporation taxation (paid)/refunded (1,001) 101

Net cash inflow from operating activities 5,372 4,643

29 RISK MANAGEMENTThe Group recognises the critical importance of efficient and effective risk management. Risk is categorised as follows:

– Capital management risk– Operational risk– Liquidity risk– Market risk– Credit risk– Concentration risk

Through its interest in its subsidiaries, the Company is exposed to the same risks as the Group.


29 RISK MANAGEMENT (continued)

(a) Capital management

The Group is committed to managing its capital so as to maximise returns to shareholders. The capital of the Group comprises of issued capital, reserves and retained earnings. The Board of Directors review the capital structure regularly to determine the appropriate level of capital required to pursue the Group’s growth plans.

(b) Operational risk

Operational risk could arise as a result of inadequately controlled internal processes or systems, human error, or from external events.

This definition is intended to include all risks to which the Group is exposed and strategic and Group risks that are not considered elsewhere. Hence, operational risks include for example, information technology, information security, human resources, project management, outsourcing, tax, legal and fraud risks.

In accordance with Group policies, the Board of Directors has primary responsibility for the effective identification, management, monitoring and reporting of risks. There are regular reviews by the Board of all major risks. The Board of Directors meet regularly to discuss its investment strategy and the performance of the Company’s investments. The Company engages appropriately qualified personnel to look after its administration.

(c) Liquidity risk

The Group is exposed to daily calls on its cash resources. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The following table provides an analysis of assets into their relevant maturity groups based on the remaining period at the balance sheet date to their contractual maturities.

Assets 2015 2015Carrying

Value Total

ContractedValue

Cashflowwithin 1 year

Cashflow 1-5 years

Cashflowafter

5 years

€000s €000s €000s €000s €000s

Investments – AFS 59,012 59,012 - - 59,012

Investments – FVTPL 47,525 47,525 7,777 19,739 20,009

Inventories 11,393 11,393 11,393 - -

Debtors 11,940 11,940 7,160 4,780 -

Bank and cash 6,346 6,346 6,346 - -

136,216 136,216 32,676 24,519 79,021

Liabilities 2015 2015Carrying

Value Total

ContractedValue


Cashflow 1-5 years

Cashflowafter

5 years

€000s €000s €000s €000s €000s

Creditors 79,230 79,230 27,577 46,577 5,076

Provision for liabilities and charges 884 884 222 662 -

80,114 80,114 27,799 47,239 5,076




Assets 2014 2014Carrying

Value Total

ContractedValue


Cashflow 1-5 years

Cashflowafter

5 years

€000s €000s €000s €000s €000s

Investments – AFS 100,136 100,136 - - 100,136

Investments – FVTPL 44,861 44,861 1,856 - 43,005

Investment in joint venture 61,079 61,424 195 7,650 53,579

Debtors 1,250 1,250 1,250 - -

Bank and cash 12,454 12,454 12,454 - -

219,780 220,125 15,755 7,650 196,720

Liabilities 2014 2014Carrying

Value Total

ContractedValue


Cashflow 1-5 years

Cashflowafter

5 years

€000s €000s €000s €000s €000s

Creditors 8,052 8,052 8,052 - -

Provision for liabilities and charges 1,372 1,372 - 1,296 76

9,424 9,424 8,052 1,296 76

The Boards of Directors have committed to further investment, as detailed in note 31, which has yet to be drawn down.

(d) Market Risk

The Company has invested in quoted and unquoted shares. These investments are subject to market risk, whereby the value of the investments may fluctuate as a result of changes in market prices, changes in market interest rates or changes in the foreign exchange rates of the currency in which the investments are denominated. The extent of the exposure to market risk is mitigated by the formulation of, and adherence to, strict investment guidelines, as approved by the Board of Directors and employment of appropriately qualified and experienced personnel to manage the Group’s investment portfolio.

Interest Rate Risk

The Company is exposed to interest rate risk attached to bank borrowings and deposits held with financial institutions. The Company regularly reviews the appropriate level of exposure to interest rate risk across its investments. Factors taken into account are interest rate volatility and historical returns.



2015 2014

MarketValue

Weightedaverageinterest

rateMarket

Value

Weightedaverageinterest

rate

€000s €000s

Time to maturity:

In one year or less (3,047) 3.36% 12,454 0.50%

In more than one year, but not more than two years (9,293) 3.36% 7,500 2.72%

In more than two years, but not more than five years (37,284) 3.36% - -

(49,624) 19,954

These financial instruments are exposed to fair value interest rate risk. Deposits held and loans received by the Group are at floating interest rate.

Equity Price Risk

The Group is subject to equity price risk due to daily changes in the market values of its holdings of quoted shares. Equity price risk is actively managed by the Board of Directors using the investment policy which is approved periodically by the Board of Directors. All of its investments are approved in advance by the Board of Directors.

The following table provides an analysis of investments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

n Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

n Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

n Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).




Investments 2015Level 1€000s

Level 2€000s

Level 3€000s

Total€000s

Investments – AFS 59,012 - - 59,012

Investments – FVTPL 5,878 - 41,647 47,525

64,890 - 41,647 106,537

Investments 2014Level 1€000s

Level 2€000s

Level 3€000s

Total€000s

Investments – AFS 100,136 - - 100,136

Investments – FVTPL 3,924 - 40,937 44,861

104,060 - 40,937 144,997

The values attributable to the unquoted investments are derived from a number of valuation techniques. Funds totalling €14,963,000 (2014: €14,697,000) are valued using net asset values at 31 December 2015 provided by the fund administrators and amended where the Directors considered it appropriate to do so in respect of unrealised gains. Property totalling €19,739,000 (2014: €19,739,000) is held at cost based on previous valuations and Directors’ assessment of current valuation. Loan notes valued at €4,545,000 (2014: €4,101,000) are carried at par based on portfolio valuations received from the underlying companies. The remaining investments were valued at €2,400,000 (2014: €2,400,000) which the Directors considered the net realisable value of these investments at the reporting date.

Foreign Currency Risk

The Company holds investment assets and equities in foreign currencies hence exposure to exchange rate fluctuations arise. The Company is primarily exposed to sterling, US dollars and Swiss Francs. The Company regularly reviews the appropriate level of foreign currency exposure across its investments.

The carrying amount of the Group’s foreign currency denominated monetary assets at the reporting date is as follows:

2015 2014

€000s €000s

GBP 2,308 10,413

CHF 4,545 4,090

USD 3,437 4,941

(e) Credit Risk

Credit risk is the risk of loss in the value of financial assets due to counterparties failing to meet all or part of their obligations. Financial assets are graded according to current credit ratings issued. All of the Group’s bank deposits are with a financial institution which has a sovereign guarantee.

None of the investments are past due or impaired.



The carrying amount of financial assets recorded in the Financial Statements represents the Group’s maximum exposure to credit risk. The maximum credit risk which the Company is exposed to is detailed as follows:

2015 2014

€000s €000s

Loans and receivables - 7,500

Debtors 11,940 1,250

Cash 6,346 12,454

Investments – quoted 5,878 3,924

Investments – unquoted 41,647 40,937

Investments – available for sale 59,012 100,136

124,823 166,201

(f) Concentration risk

Concentration risk is the risk of loss due to overdependence on a singular entity or category of business. At 31 December 2015, the Group had concentrated 55.4% (2014: 48.6%) of its investments in one company, FBD Holdings plc.

(g) Sensitivity Analysis

The table below identifies the Group’s key sensitivity factors. For each sensitivity test the impact of a change in a single factor is shown, with other assumptions left unchanged.

Sensitivity factor Description of sensitivity factor applied

Interest rate The impact of a change in the ECB benchmark reference interest rate by ± 0.5%

Exchange rates movements The impact of a change in foreign exchange rates by ± 5%

Equity market values The impact of a change in equity market values by ± 10%

Property market values The impact of a change in property market values by ± 10%

The above sensitivity factors are applied with the following pre-tax impacts on profit and shareholders’ funds at 31 December 2015 and 31 December 2014:

2015 2014

€000s €000s

Interest rate 0.5% (232) 377

Interest rate (0.5%) 232 (377)

FX rates 5% 515 972

FX rates (5%) (515) (972)

Equity 10% 7,662 11,690

Equity (10%) (7,662) (11,690)

Property 10% 2,668 2,623

Property (10%) (2,668) (2,623)




Limitations of Sensitivity Analysis

The above table demonstrates the effect of a change in a key assumption while other assumptions remain unchanged. In reality, there is a correlation between the assumptions and other factors. It should also be noted that these sensitivities are non-linear, and larger or smaller impacts should not be interpolated or extrapolated from these results.

The sensitivity analysis do not take into consideration that the Group’s assets are actively managed. Additionally, the financial position of the Group may vary at the time that any actual market movement occurs.

Other limitations in the above sensitivity analysis include the use of hypothetical market movements to demonstrate potential risk that only represent the Group’s view of possible near-term market changes that cannot be predicted with any certainty and the assumption that all interest rates move in an identical fashion.

30 SUBSIDIARY COMPANIES

(a) Direct Subsidiaries Nature of Operations %ownedCity Investment Advisors Ltd Investment trading company 100Farmer Business Developments Assets Ltd Investment trading company 100Farmer Business Developments Investments Ltd Investment trading company 100FBD Property & Leisure Ltd Property & Hotels 100

The Registered Office of each subsidiary, with the exception of FBD Property & Leisure Ltd., is at Irish Farm Centre, Bluebell, Dublin 12. The Registered Office of FBD Property & Leisure Ltd is at Citywest Business Centre, 3013 Lake Drive, Citywest, Dublin 24.

(b) Guarantees

Farmer Business Developments plc’s Irish subsidiaries are exempt from filing their financial statements in the Companies Office with their annual returns, as required by Sections 347 and 348 of the Companies Act, 2014, because, in accordance with Section 357 of that Act, Farmer Business Developments plc, the Company’s holding undertaking, has guaranteed all amounts shown as liabilities in the statutory financial statements of these subsidiaries for the financial year ended 31 December 2015.

31 INVESTMENT COMMITMENTSThe Board of Directors have committed to further investment of €696,000 (2014: €574,000) which has yet to be drawn down.

32 CONTINGENT LIABILITIESThere were no contingent liabilities at 31 December 2015.

33 SUBSEQUENT EVENTS

No events have occurred since the balance sheet date which require disclosure in the Financial Statements.


34 RELATED PARTY TRANSACTIONSAs detailed in note 13, the Group has a 24.62% (2014: 24.62%) shareholding in FBD Holdings plc.

Included in the Financial Statements at the year-end is a balance of € nil (2014: €67,500) due to FBD Holdings plc. This balance was made up of recharges for services provided and recoverable costs which were charged through the Consolidated Income Statement in the year they were incurred. The charge to the Consolidated Income Statement in 2015 was €67,500 (2014: €67,500). Interest is charged on this balance at the market rate. The amount due is repayable on demand.

The Company is availing of the exemption available in FRS 102 Section 33.1(A) not to disclose transactions with its wholly owned subsidiaries.

For the purposes of the disclosure requirement of FRS 102, the term “key management personnel” (i.e. those persons having authority and responsibility for planning, directing and controlling the activities of the Group) comprises of the Board of Directors, Company Secretary and senior management of FBD Property & Leisure group.

The remuneration of key management personnel (“KMP”) charged to the Consolidated Income Statement was as follows:

2015 2014

€000s €000s

Short term employee benefits1 222 155

Post-employment benefits 5 -

227 155

1 Short term benefits include fees to non-executive Directors and Company Secretary, salaries and other short-term benefits to all members of the KMP.

35 RECONCILIATION ON TRANSITION TO FRS 102This is the first year the Company has presented its financial statements under Financial Reporting Standards 102 (FRS 102) issued by the Financial Reporting Council. The last financial statements under previous Irish GAAP were for the year ended 31 December 2013 and the date of transition to FRS 102 was therefore 1 January 2014. As a consequence of adopting FRS 102, a number of accounting policies have been changed to comply with that standard. None of these changes have resulted in an adjustment to equity reported under previous Irish GAAP at 31 December 2014 or 1 January 2014 and there was no effect on the results previously reported for the year ended 31 December 2014.


NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held in The Irish Farm Centre, Bluebell, Dublin 12, on 24 June 2016 at 12 noon for the following purposes:

AS ORDINARY BUSINESS

1 To receive and consider the Directors’ Report and Financial Statements for the year ended 31 December 2015.

2 To confirm a dividend on the 14% non-cumulative preference shares.

3 To confirm a dividend on the 11% non-cumulative preference shares.

4 To declare a dividend of 5.0 cent on the ordinary shares.

5 To elect or re-elect Directors:

(a) Mr Jack Bayly retires by rotation in accordance with the Articles of Association and being eligible, offers himself for re-election.

(b) Mr Joe Healy retires by rotation in accordance with the Articles of Association and being eligible, offers himself for re-election.

6 To approve the remuneration of the Directors.

7 To authorise the Directors to fix the remuneration of the auditors.

AS SPECIAL BUSINESS

8 To consider and, if thought fit, pass the following resolution as a special resolution:

“That for the purposes of the Companies Act, 2014, the reissue price range at which Treasury Shares (as defined by the said Section 209) for the time being held by the Company or any subsidiary of the Company may be re-issued off-market shall be as follows:

a) the maximum price shall be an amount equal to 150 per cent of the net asset value, per share, of the Company as determined by the Board;

b) the minimum price shall be the nominal value of the share.”

9 To consider and, if thought fit, pass the following resolution as a special resolution:

“That the Memorandum and Articles of Association, set forth in the printed document attached hereto and for the purposes of identification signed by the Chairman be approved and adopted as the Memorandum and Articles of Association of the Company, in substitution for, and to the exclusion of, the existing Memorandum and Articles of Association thereof.”

BY ORDER OF THE BOARD

Bryan Barry Secretary

1 June 2016

Notice of Annual General Meeting


Notes for Shareholders

1 Every member entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend, speak and vote instead of him/her. A proxy need not be a member of the Company. A form to be used for appointing a proxy is enclosed.

2 To be valid this proxy form must be completed, signed and returned to reach the registrars of the Company, by post to, Capita Asset Services, Shareholder solutions (Ireland), PO Box 7117, Dublin 2 or by hand (during normal business hours) to Capita Asset Services, Shareholder solutions (Ireland), 2 Grand Canal Square, Dublin 2 or the registered office of the Company at The Irish Farm Centre, Bluebell, Dublin 12, not less than forty-eight hours before the time of the meeting.

3 Nomination of Directors:

“No person other than a Director retiring at the meeting shall, unless recommended by the Directors, be eligible for election to the office of Director at any general meeting unless, not less than 3 nor more than 21 days before the day appointed for the meeting, there shall have been left at the registered office notice in writing signed by a member duly qualified to attend and vote at the meeting for which such notice is given, of his intention to propose such person for election and also notice in writing signed by that person of his willingness to be elected”. (Companies Act, 2014, adopted in Article 1 of the Company’s Articles of Association).

4 An ordinary share shall confer on the holder thereof the right to receive notice of, attend and vote at general meetings of the Company.

5 An 11% preference share shall confer on the holder thereof the right to receive notice of, attend and vote at general meetings of the Company.

6 A 14% preference share shall not confer on the holder thereof the right to receive notice of, or to attend or vote at general meetings of the Company.


Notes


Notes


Notes

Farmer Business Developments plc

Irish Farm Centre, Bluebell

Dublin 12

Company Secretary: 01 426 0334 or [email protected]

Website: www.FarmerBusinessDevelopments.ie

Shareholder enquiries: Capita Asset Services 01 553 0050 or [email protected]

Private share market: Davy Select 01 614 9000 or [email protected]

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