Bottom Line: Pertinent questions

SHAREHOLDERS in Spring Ram have been deprived of the right to vote on the reappointment of their directors - in contravention of the Cadbury code on corporate behaviour - at today's annual meeting. So they will have to express their views in the form of questions. They should make the most of the opportunity.

Shareholders in Spring Ram should ask about the group's property operations, which contributed the bulk of the pounds 7.3m profits last year from non-manufacturing operations. That is 40 per cent of group operating profits before gains on disposals and just as much as the company made out of selling bathrooms and kitchens combined.

What are the company's plans for property? Is it a business or merely a service company? How much has the group invested in property? Does it have sufficient expertise in this field?

Spring Ram capitalised pounds 578,000 interest charges, pounds 1.96m development costs on the new businesses and pounds 1.63m marketing investment. Had the company charged these items against pre-tax profits they would have been pounds 4.17m less than the reported pounds 26.2m and would have fallen by 50 per cent rather than 38 per cent. Does Spring Ram plan to continue capitalising these items?

Fuelling controversy at Spring Ram will not help its share price, but continuing worries about its business will not go away if shareholders bury their heads in the sand.