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London & Associated Properties PLC

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FY2021 Annual Report · London & Associated Properties PLC
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LONDON & 
ASSOCIATED  
PROPERTIES 

ANNUAL REPORT 2021

Contents

OVERVIEW
1 

LAP at a glance

2  Chairman’s statement and Chief Executive’s review 2021

STRATEGIC REPORT
5 

Financial and performance review 

10  Principal activities, strategy & business model

10  Risks and uncertainties

11  Bisichi risks and uncertainties

12  Key performance indicators

13  Corporate responsibility

GOVERNANCE
15  Directors & advisors

16  Directors’ report

19  Corporate Governance

21  Governance Statement by the Chairman of The Remuneration Committee

22  Annual remuneration report

26  Remuneration Policy Summary

28  Audit committee report

29  Directors’ responsibilities statement

30 

Independent auditor’s report

FINANCIAL STATEMENTS
36  Consolidated income statement

36  Consolidated statement of comprehensive income

37  Consolidated balance sheet

38  Consolidated statement of changes in shareholders’ equity

39  Consolidated cash flow statement

40  Group accounting policies

47  Notes to the financial statements

75  Five year financial summary

Financial calendar

Annual General Meeting  
15 June 2022

Announcement of half year results to 30 June 2022 
Late August 2022

Announcement of annual results for 2022 
Late April 2023

OVERVIEW

OVERVIEW

LAP at a glance

London & Associated Properties PLC (“LAP”) is a main market listed group 
which invests in industrial and retail property in the UK while also managing 
property assets. LAP owns £66.9 million of property. As a property company 
we look to create environments where tenants can thrive.

The Group also holds a substantial investment in Bisichi PLC, which operates 
coal mines in South Africa and owns UK property. In accordance with IFRS 
10 the results of Bisichi have been consolidated in the group accounts.

FINANCIAL HIGHLIGHTS

Fully diluted net  
assets per equity share

34.78p
2020: 34.99p

KEY PROJECTS

IFRS net assets

£40.2m
2020: £39.5m

Properties portfolio  
valuation*

£66.9m
2020: £71.0m
*Includes investment properties, head leases, 
assets held for sale and property inventory.  
Excludes properties under management.

KEY PROJECTS

HIGHLIGHT

 Directly owned

• Orchard Square, Sheffield

•  Food hub development at Sheffield complete and 

• Runcorn Manor Park Industrial Estate

trading

• West Ealing development

• Kings Square, West Bromwich

• Adlington Court Industrial Estate, Warrington

Coal 
production

•  In South Africa, Black Wattle produced 1.04m 
metric tonnes of Run of Mine Coal in 2021 
(2020: 1.18m metric tonnes)

•  Runcorn Industrial portfolio being managed actively 

for rental growth

•  Sale of Radcliffe portfolio at significantly above 

December 2020 valuation

•  Sale of largest unit at Runcorn for healthy profit on 

original cost

•  Ealing residential development property progressing 

on plan

•  New residential development in Purley in the 

planning stage

•  Agreement signed to acquire an additional 

6.1million metric tonnes of Run of Mine coal 
contiguous to Black Wattle Colliery, the South 
African mining operations, extending the life of 
mine to eight years.

London & Associated Properties PLC 2021 1

OVERVIEW

Chairman’s statement and 
Chief Executive’s review 2021

We are pleased to present the Chairman’s and Chief Executive’s 
review for 2021. The first half of the year was marked by further 
lockdowns and in the second half the Omicron variant created 
significant headwinds. Nonetheless, LAP has made good progress overall. 
We have achieved this by continuing to focus on reducing costs; 
repositioning our portfolio away from fashion-orientated retail and 
shopping centres; and maintaining intensive management of our assets.  

CONSOLIDATED RESULTS
Our efforts over the last few difficult years have started to achieve 
results. The result attributable to LAP shareholders was close to 
breakeven (attributable loss £0.2 million as compared with £6.7 million 
last year) and our attributable net assets are now £29.7 million as 
compared with £29.9 million.

The consolidated property portfolio was valued at £66.9 million at 
year end 2021. With some £4.2 million of property sales during the 
year, the like for like comparison at year end 2020 is £66.8 million. 
This slight increase in valuation reflects capital expenditure invested 
of £1.0 million offset by valuation reductions of £0.9 million. 

The lower overall valuation of £0.9 million resulted from a £1.75 million 
reduction on one shopping centre asset; a £0.8 million inventory 
impairment on a shopping centre redevelopment; an increase of 
£1.2 million (20.5%) in our industrial portfolio; and an increase in the 
remaining portfolio of community retail assets of £0.45 million (1.7%). 
It should be borne in mind that these valuations were undertaken at 
year end 2021 and the evidence suggests that values have improved 
since then. Also, the improvement in industrial property valuations 
and the greater resilience of community retail are encouraging as we 
transition the business away from retail shopping centres.

Pleasingly like for like rental income for the Group (excluding sold 
properties and bad debt charges) increased by £0.3 million (4.5%)  
to £5.9 million. These results reflect a stabilisation of rents being 
achieved on new lettings within the retail portfolio together with a 
reduction in the number and value of concessions being provided  
to tenants as a result of the pandemic.

Rental income resilience can also be seen in our occupancy levels, 
which were 96.0% at year end (2020: 92.2%). An industrial unit 
accounting for 1.0% of the current voids is now under offer. Rent 
collection levels have improved with 83% of Q1 2022 rents received 
to date compared to 53% at the corresponding time last year.

We have continued to cut company overheads during 2021, including 
moving head office to smaller premises. As previously reported, in 
2019 we outsourced all of our day to day property management activity 
and consequently have fewer employees. We assigned the 
remainder of the lease on our old premises in November 2021, which 
means that the savings are yet to show in our figures: the annual 
saving will be £0.2 million.

DEBT MANAGEMENT
LAP has continued to maintain excellent relationships with its lenders 
and its record of never breaching a banking covenant remains intact.  
No loans expired or were renewed in 2021. In 2022 there will be two 
loan expiries, the £10 million debenture from Aviva, and the £13.3 
million loan through QSix (formerly PMM), which is secured only against 
Orchard Square in Sheffield with no recourse to LAP. The latter loan 
has an option to extend for a further year subject to certain conditions.

LAP has engaged a debt advisor and has commenced the process of 
seeking new lenders.We will keep shareholders updated as the 
refinancing progresses. 

LAP PROPERTY ACTIVITIES
Orchard Square, Sheffield
During 2021 we have made significant progress in repositioning this 
former shopping centre into a mixed use and experiential location in 
the heart of Sheffield. This has been facilitated by our joint venture 
with Market Asset Management (“MAM”) through which we converted 
a former ladieswear shop and a Starbucks into a street food venue 
- Sheffield Plate - with six food retailers and two bars. It opened in 
September at a total cost to LAP of £0.4 million. All the units were 
let in advance of opening and there is a waiting list of operators. 
Income to LAP and MAM is based on 20% of the operators’ turnover 
and we will receive 50% of all income once operating expenses are 
covered. LAP’s net share of income from this venture is projected to 
be £0.1 million per annum.

As with hospitality venues across the country, trading in the important 
run-up to Christmas was badly hit by the Omicron variant. However, 
food sales are ahead of budget since the start of 2022. Further, 
reviews have been consistently good and a number of local 
publications (including the Sheffield Express and Star) have rated it 
the best food place in Sheffield.

Elsewhere in Orchard Square, we are working to complement Sheffield 
Plate by introducing further restaurants and bars. For example, and 
since year end, we are currently under offer to a restaurant at a rent 
of £56,000 per annum for the unit previously let to Fat Face. We 
received three offers from restaurants and expressions of interest from 
others which augurs well for repositioning the Square further away 
from traditional retail as other units become available. In addition, 
one of our original restaurant tenants is doubling the size of its unit. 
We are confident that tenants will trade well at Orchard Square.

We have engaged marketing specialists to introduce a range of 
events and activities within the Square to increase footfall and 
spend. The appeal to customers will be further enhanced by the 
weatherproofing that we will be installing during the next few 
months following the award of a grant from the Future High Street 
Fund in 2020. The grant will also be used to refurbish and re-brand 
Orchard Square. The rest of Orchard Square remains fully let with 
the exception of a unit being kept vacant as part of the creation of 
eight flats for which planning permission has been granted.

2  London & Associated Properties PLC 2021

OVERVIEW Chairman’s statement and Chief Executive’s review 2021

West Bromwich
Kings Square in West Bromwich remains fully let. We are currently 
under offer to sell this asset and further reduce the proportion of 
shopping centres within our portfolio. As is always the case when an 
asset is under offer, there is no guarantee that the other party will 
perform. However, the buyer is highly credible and the purchase is of 
strategic importance to it. The price agreed is in line with its valuation 
and we will keep shareholders informed as matters progress.

Runcorn
At Manor Park in Runcorn, we refurbished two units during 2021.
The first of these was the largest in the portfolio at 38,500 sq ft. 
Although intending to relet the unit, we received and accepted an 
offer in May for the freehold of the unit at £2.35 million. The sale 
completed in September 2021.

The second unit (15,000 sq ft) has since been let at a rent equating 
to £5.50 per sq ft. The passing rent on our remaining units is sub-£5 
per sq ft so this is a pleasing result and will have a positive effect on 
rent reviews going forward. 

Disposals
We sold two further assets during 2021. The first of these was a pair of 
retail blocks in Radcliffe near Bury, Lancashire. These were sold in May 
for £1.8 million against a book value of £1.7 million. The cash receipts 
were placed on deposit to be reinvested. We also sold an arcade that 
formed part of a block in Rugeley, Staffordshire for £0.5 million, which 
was in line with book value. Although we exchanged unconditional 
contracts in December 2021, completion took place in January 2022. 
Proceeds were again reinvested.

Acquisition
Since year end we have acquired (for cash) four industrial units in 
Warrington for £2.37 million. The units are fully let and produce 
aggregate rent of £0.12 million per annum. However, we believe 
them to be reversionary and look forward to implementing our asset 
management plan.

West Ealing
We have now finalised all of the outstanding conditions attaching to 
the planning consent obtained at the end of 2020 for 56 flats and 
four retail units. This took longer than anticipated due to covid 
related absences at the local authority. Since year end we and our 
joint venture partners have instructed an agent to market this 
investment as consented land. There is no certainty that there will 
be a sufficiently attractive bid on this basis to induce us to sell, but 
interest so far has been strong. Our alternative course of action 
remains to build out the development. LAP owns 45% of the equity 
investment in this asset and has invested £1.5 million in total.

Purley
We have also worked with the same joint venture partners to 
acquire options on six semi-detached houses with large gardens in 
Purley, London. A planning application has since the year end been 
submitted for 44 flats and 4 town houses. We will update 
shareholders on progress in due course.

The remainder of our portfolio has performed well and remains 
effectively fully let.

DRAGON RETAIL PROPERTIES
Dragon owns a property in Clifton, Bristol let to Boots the Chemist 
and Lizard Lounge, one of Bristol’s best-known nightclubs. After a 
difficult period during lockdown when neither tenant paid rent, we 
are pleased to report that rental payments have resumed.

Dragon’s loan of £1.2 million from Santander expired in September 
2020, although it has been extended several times as we have 
sought to refinance with a new lender following Santander’s 
withdrawal from the retail property lending market. We are now in 
the due diligence process with another established lender and hope 
to complete a new loan in the near future.

BISICHI PLC
For 2021, Bisichi plc, our 42% owned subsidiary, made a profit before 
interest, tax, depreciation and amortisation (EBITDA) of £5.8 million 
(2020: loss: £2.4 million) and an operating profit before depreciation, 
fair value adjustments and exchange movements (Adjusted EBITDA) of 
£5.0 million (2020: loss: £1.1 million). £4.3 million in adjusted EBITDA 
was attributable to the second half of the year. 

The most challenging priority for Bisichi was the continuity of its South 
African mining and processing operations, particularly during the peak 
of the Covid-19 pandemic. In early 2020, when global coal demand 
fell, the average weekly price of Free on Board (FOB) coal from Richards 
Bay Coal Terminal (API4 price) fell from a high of US$92 in January 
2020 to $44 in mid-April 2020. Thereafter, prices remained largely 
supressed until the end of 2020. Under these very difficult 
circumstances, Bisichi worked to ensure that its South African 
operations continued operating in an efficient manner until global 
economic activity and markets improved. 

As 2021 unfolded, the improvement in global economic activity had 
a significant impact on demand for coal in the international market, 
alleviating many of the challenges its South African operations faced 
in 2020. Strong demand for coal in the seaborne market resulted in 
significantly higher API4 prices, particularly in the second half of the 
year - when the price peaked at over $245 in October. Overall, the 
API4 price averaged $125 in 2021 compared to $65 in 2020. Despite 
constraints in transporting coal for export on the South African rail 
network which were largely beyond Bisichi’s control, at Sisonke Coal 
Processing (our South African coal processing operation) it was able 
to take advantage of the improved international coal price by 
increasing export sales during the year to 320,000 metric tonnes 
(2020: 230,000 metric tonnes). The overall increase in revenue, 
operating costs and earnings during the year was mainly attributable 
to coal processing operations. 

London & Associated Properties PLC 2021 3

STRATEGIC 

REPORT

STRATEGIC REPORT Chairman’s statement and Chief Executive’s review 2021

The overall performance of Bisichi’s South African operations would 
have been even better if it had not encountered some difficult mining 
conditions at Black Wattle, its mining operation, which adversely 
impacted coal production during the period. Overall, the mine 
produced 1.04 million metric tonnes compared to 1.18 million  
metric tonnes in 2020. 

During the year Bisichi continued to work closely with Vunani 
Mining, its BEE partner in Black Wattle, to seek further opportunities 
to extend the life of mine at Black Wattle. At the end of last year, 
Black Wattle signed an agreement to acquire an additional coal 
reserve contiguous to Black Wattle which required further drilling to 
ascertain its commercial viability and indicative size. Recently 
concluded geological assessment indicates an expected run of mine 
tonnage of 6.1 million metric tonnes. This reserve will be mined by 
opencast methods, the coal will be processed at Sisonke Coal 
Processing, and then sold into existing markets. This new reserve, 
which is subject to regulatory approval, will extend Black Wattle’s 
life of mine to eight years. Vunani Mining played a key role in 
acquiring these reserves, and will share equally in any distributable 
income as part of their non-controlling interest in Black Wattle. 

Looking forward, Bisichi expects its mining production to improve 
further once it completes its transition into new mining areas at 
Black Wattle in the first half of 2022. In addition, coal market 
conditions continue to improve. In the first quarter of this year,  
the weekly API4 price averaged $238 and exports from its South 
African operations in the same period have been in line with the 
average export tonnages achieved in 2021. However, looking 
beyond the first quarter, uncertainties remain, particularly with 
regard to the international coal price and the impact of constraints 
in transporting coal for export on the South African rail network. 

In the UK, Bisichi saw annual rental revenue from its retail property 
portfolio remain stable in 2021 at £1.12 million (2020: £1.18 million). 
For the year ended 31 December 2021 Bisichi’s directors have 
recommended an ordinary dividend of 4p (2020: Nil) per share and a 
special dividend of 2p (2020: Nil) per share. LAP will receive £0.3 million.

Finally, we would like to thank employees, advisors and stakeholders 
for their ongoing efforts and support.

Sir Michael Heller, 
Chairman 

28 April 2022

John Heller, 
Chief Executive

4  London & Associated Properties PLC 2021

 
 
 
STRATEGIC 
REPORT

Financial and performance review

The financial statements for 2021 have been 
prepared to reflect the requirements of IFRS 10. 
This means that the accounts of Bisichi PLC (a 
London Stock Exchange main market quoted 
company – BISI) (“Bisichi”), have been  
consolidated with those of LAP.

Bisichi continues to operate as a fully independent company and 
currently LAP owns only 41.52% of the issued ordinary share 
capital. However, because related parties also have shareholdings in 
Bisichi and there is a wide disposition of other shareholdings, LAP is 
deemed under IFRS 10 to have effective control of Bisichi for 
accounting purposes. This treatment means that the income and net 
assets of Bisichi are disclosed in full and the value attributable to the 
“non-controlling interest” (58.48%) is shown separately in the equity 
section as a non-controlling interest. There is no impact on the net 
assets attributable to LAP shareholders.

Dragon Retail Properties Limited (“Dragon”) and West Ealing 
Projects Limited (“West Ealing”), are both 50:50 joint ventures with 
Bisichi and are also consolidated. A new joint venture, Development 
Physics Limited (“DPL”) is owned 33% each by LAP, Bisichi and a 
third party. This too is consolidated.

Shareholders are aware that LAP is a property business with a 
significant investment in a listed mining company.

The last couple of years and the effects of the global pandemic have 
accelerated trends driving change in the way real estate is used by 
workers and the public. LAP’s long-standing strategy of divestment 
away from shopping centres and towards industrial property has 
meant that these changes have not had a significant effect on the 
business. Our diversified portfolio has been resilient in 2021, with 
our industrial portfolio performing strongly, as has our community-
based retail portfolio, serving local communities in the areas where 
they live and increasingly work. 

In spite of the Government imposed moratorium on normal debt 
enforcement procedures, the business has received a significant 
proportion of rents due. Many of our tenants are owner managed 
businesses serving their local community. We do not have a 
significant exposure to large fashion led retailers who have been 
hardest hit by changing customer buying patterns. The below table 
outlines the proportion of rent receipts, by quarter billed, at 28 
March 2022. The figures in brackets show those recovered at a 
similar time last year (21 April 2021). It is pleasing to note the 
improvement in rent receipts year on year.

PERIOD
Q2 2021   (Q2 2020)
Q3 2021   (Q3 2020)
Q4 2021   (Q4 2020)
Q1 2022   (Q1 2021)

% RECOVERY
93%   (92%)
92%   (91%)
92%   (78%)
83%   (53%)

The effect of consolidating the results, assets and liabilities of the 
property business and the mining company make the figures 
complex and less transparent. Property company accounts are 
already subject to significant volatility as valuations of property 
assets as well as derivative liabilities can be subject to major 
movements based on market sentiment. Most of these changes, 
though, have little or no effect on the cash position and it is, of 
course, self-evident that cash flow is the most important factor 
influencing the success of a property business. We explain the 
factors affecting the property business first, clearly separating these 
from factors affecting the mining business which we do not manage. 
Comments about Bisichi (the mining business) are based on information 
provided by the independent management of that company.

This report comments on the performance of each of the Group’s 
segments separately.

Property Investment Activity
During 2021 two properties were sold further progressing our twin 
strategy of divesting away from retail property and recycling capital 
into areas where there is greater scope to increase value through asset 
management activities. We sold a retail portfolio in Radcliffe and a large 
single unit at our industrial property in Runcorn. These sales generated 
gross proceeds of £4.65 million and a net profit of £436,000.

In January 2022 part of the proceeds of these sales was reinvested and 
we completed the acquisition of an industrial property in Warrington 
for £2.37 million, where we feel there is significant rental and value 
growth available. £1 million has been placed on deposit with the 
lender who had the security over the Radcliffe property, awaiting 
deployment. In January 2022, we also completed the sale of a retail 
market in Rugeley with gross proceeds of £420,000, which is shown 
as a current asset in the Balance Sheet.

LONDON & ASSOCIATED PROPERTIES PLC
Our key objective is to ensure that we offer safe and secure 
environments in which people can live, work and visit.

LAP’s core objectives in 2021 have continued to be:

•  Provide environments in which tenants can thrive.

•  Continually improve the business’ operating cashflow.

•  Reduce exposure to the retail sector.

•  Ensure gearing is at an appropriate level.

•   Maintain sufficient cash in the business to be able to take 

advantage of opportunities as they arise.

We will look to continue our diversification away from retail when 
opportunities arise that would enhance shareholder value.

LAP continues to look for investment opportunities, particularly 
within the industrial sector.

Property Development Activity
In 2020 and in early 2021, development activity was slowed due  
to the uncertainty around the cash requirements on the business 
arising as a result of the pandemic, but was restarted in Q2 2021.

In September 2021, we completed the development of a street 
food hub at our property in Sheffield, branded Sheffield Plate. This 
was an important step in the reposition of this asset towards a food 
and beverage led offering in Sheffield city centre. 

London & Associated Properties PLC 2021 5

STRATEGIC REPORT Financial and performance review

We continue to progress our broader realisation plans for this 
property including creating potential residential opportunities.

The Aviva debenture is secured with a mixture of industrial and 
community retail assets currently valued at £16.985 million. 

LAP continues to develop and refurbish all its properties to provide 
environments in which tenants can thrive.

Our joint venture residential developments are discussed in more 
detail later in this review.

Funding
LAP has two loans reaching the end of their terms within the next 
twelve months, a 25 year debenture with Aviva of £10 million 
ending in August 2022 and a 3 year loan with Phoenix CRE S.à.r.l 
with a current principal outstanding of £13.3 million, ending in 
September 2022, with an option to extend to September 2023.

We are in the process of refinancing this debenture with a lower 
cost medium term loan using the existing security alongside 
additional unencumbered industrial and community retail properties, 
currently valued at circa £2.8 million.

The Phoenix CRE S.à.r.l loan is secured against Orchard Square, 
Sheffield. There are currently a number of development activities 
being carried out at this property, which, as stated above, have been 
delayed due to the pandemic. So that we can complete the current 
development phases we will activate the loan’s extension option, to 
enable us to maximise the value of this asset, prior to considering 
our options which include selling the asset and repaying this loan.

All of LAP’s loans are covenant compliant.

INCOME STATEMENT

BUSINESS ANALYSIS
Rental income
Service charge income
Management income from third party properties
LAP Revenue
Direct property costs
Impairment of inventory
Overheads
Depreciation
Operating profit/(loss)
Finance income
Finance expenses
Result before valuation movements 
Other segment items
Net decrease on revaluation of investment properties
Profit on disposal of investment properties
Decrease in value of other investments
Loss on disposal of fixed assets
Adjustment to interest rate derivative
Revaluation and other movements
LAP loss for the year before taxation

Note: The figures exclude inter-company transactions.

2021
£’000 
5,024 
852 
18 
5,894 
(2,181)
(816)
(2,345)
(241)
311
12 
(1,713)
(1,390)

(316)
436
-
(133)
130 
117
(1,273)

2020
£’000 
4,377 
795 
18 
5,190
(2,192)
(2,300)
(2,317)
(258)
(1,877)
5 
(2,200)
(4,072)

(664)
-
(20) 
-

(200) 
(884)
(4,956)

The above figures for LAP and commentary below exclude management 
fee income from Bisichi and Dragon of £236,000 (2020: £236,000).

LAP generated an operating profit of £0.3 million (2020: loss of 
£1.9 million). A significant element of this result arises from the 
non-cash items of depreciation and inventory impairment. 
Adjusting for these, LAP generated an operating profit excluding 
depreciation and inventory impairment of £1.4 million (2020: £0.7 
million). This is a pleasing outcome that we hope will continue with 
further asset management initiatives.

LAP generates the majority of its income from property rentals, 
property management fees and development activities.

Like for like rental income was up by £0.1 million (2.9%), which 
reflects a stabilisation of rents being achieved on new lettings within 
the retail portfolio together with a reduction in the number and value 
of concessions being provided to tenants as a result of the pandemic.

Further overhead initiatives in 2021 achieved a reduction in 
overheads of £0.3 million. However, staff costs have increased by £0.3 
million in 2021, as compared with 2020 when no staff bonuses were 
paid, and the Chief Executive waived an element of his remuneration. 
The net effect is that overheads have not changed year on year.

While lending arrangements did not change materially from 2020 
and interest paid on all facilities was similar to last year, a long 
standing provision of £0.5m for contingent interest was no longer 
required, resulting in a decrease in finance expenses.

6  London & Associated Properties PLC 2021

Investment property valuation reductions of £0.3 million (2020: 
£0.7 million) arose from a decrease in retail property values of £1.5 
million (2020: £1.9 million) and an increase in industrial property 
values of £1.2 million (2020: £1.2 million). In the 2021 valuation our 
community retail assets achieved an increase of £0.25 million but 
this was over-shadowed by a reduction of £1.75 million relating to 
one shopping centre in the West Midlands. This further strengthens 
our view that community retail investments are showing signs of 
recovery with the market differentiating between these assets 
(where there are low vacancy rates and competitive demand for 
space) and fashion focused retail investments.

While the loss on disposal of fixed assets of £0.1 million is small, it 
arose from our decision to move to smaller serviced offices and 
dispose of the remaining two years of our head office lease in 
Mayfair. This happened in November 2021 and will generate 
reductions in overhead costs in 2022 and beyond on both a cash 
and accounting basis of £0.2 million.

Excluding the impairment of trading properties, the adjusted loss 
before valuation movements was £0.6 million (2020: £1.8 million). 
This excludes management income from Bisichi and Dragon.

Producing a profit through the activities described above, combined 
with the refinancing of expensive long term debt in 2022 as well as 
generating more rental income, through ongoing asset management 
initiatives, remains the business’ key focus for the future.

STRATEGIC REPORT Financial and performance review

BALANCE SHEET

SEGMENT ASSETS
- Non-current assets – property
- Non-current assets – property, plant & equipment
Trading assets
- Cash & cash equivalents
- Current assets – others
Total assets excluding investment in joint ventures
Segment liabilities
Borrowings
Current liabilities
Non-current liabilities
Total liabilities
Net assets

Note: The figures exclude inter-company transactions.

2021 
£’000 
28,386
840
25,213 
5,473 
1,635
61,547 

(30,981)
(5,172)
(3,148)
(39,301)
22,246 

2020 
£’000 
33,383 
797 
25,013 
3,413
978
63,584

(30,889)
(5,898)
(3,526)
(40,313)
23,271 

Total assets, consisting mainly of trading and investment properties, 
have reduced from £63.6 million to £61.5 million. This was due 
principally to an £0.8 million impairment reducing our Sheffield 
development property to net realisable value, an £0.3m reduction in 
the value of investment properties and using current assets to 
reduce liabilities by £1.0m.

The reduction in non-current property assets is mostly as a result of 
the sale of two properties during the year at a carrying value of 
£4.17 million along with a £0.3 million investment property 
revaluation deficit and the reclassification of an investment property 
carried at £0.75 million, as a current asset following a decision by 
Directors to sell the property before the year end.

The increase in property, plant and equipment relates to a change in 
the head office location of the Company. The lease comes to an end in 
2024 at which point the asset will be fully depreciated. The present 
value of future rentals of £0.75 million is included within liabilities.

Trading assets include Sheffield Orchard Square, which is currently 
being developed for sale and two London residential developments 
in West Ealing and Purley. All of these properties are held at the 
lower of cost and net realisable value.

Borrowings have remained consistent year on year, with the same 
facilities in place at the end of the year as were in place at the start 
of the year.

LAP’s main borrowings consist of a £13.3 million term loan facility 
expiring in September 2022, a debenture of £10 million repayable in 
August 2022 a £3.6 million term loan facility expiring in 2028 and a 
rolling development loan relating to West Ealing of £4.2 million that 
expires in April 2022 and is currently being refinanced with a new 
lender. As in previous years, all loans and debentures are secured on 
core property and are covenant compliant at the year end.

GEARING
Total borrowings
Less cash and cash equivalents
Net borrowings
Total Equity

2021
£’000
30,981
(5,473)
25,508
22,246
114.7%

2020
£’000
30,889
(3,413)
27,476
23,271
118.1%

The business has not set a target gearing level but monitors its debt and asset values constantly to maintain an appropriate level, taking into 
account market sentiment, the availability and cost of debt and cash flow forecasts.

CASH FLOW

CASH FLOW FROM OPERATIONS
Cash inflows from operating activities
Cash inflows/(outflows) from investing activities
Cash outflows from financing activities
Net increase/(decrease) in cash and cash equivalents

Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December

2021 
£’000
398
4,141
(2,479)
2,060

3,413
5,473

2020 
£’000
250
(300)
(2,246)
(2,296)

5,709
3,413

 Note: The figures within the LAP cashflow include inter-company transactions such as management fee income of £236,000 (2020: £236,000).

Cash inflows from operating activities take account of expenditure on 
development properties of £1.0 million (2020: £0.4 million). Excluding 
this expenditure, adjusted cash inflows from operating expenditure 
were £1.4 million (2020: £0.6 million). A significant proportion of this 
improvement has arisen following the lifting of pandemic trading 
restrictions and subsequent improvement in rents received.

Investing activities include the sale of two properties, as discussed 
above, for net proceeds of £4.1 million received in the year. 

A further £0.4 million of proceeds relating to the sale of one of the 
properties, will be received over the next two years.

Financing activities in 2021 largely related to interest payments for the 
servicing of debt, no significant new finance has been put in place over 
the past two years. In 2021 loans on investment properties were paid 
down by £0.6 million (2020: £0.2 million) and receipts from loans on 
development properties were £0.5 million (2020: £0.1 million).

London & Associated Properties PLC 2021 7

 
 
STRATEGIC REPORT Financial and performance review

WEST EALING PROJECTS LIMITED
West Ealing is a 50:50 joint venture between LAP and Bisichi 
created with the purpose of delivering a primarily residential 
development in West Ealing, London. The joint venture owns 90% 
of the property which is under development and on which £7.48 
million has been spent to date (2020: £7.06 million), West Ealing is 
disclosed within LAP in the segmental analysis in note 1 to the 
financial statements. There is a linked development loan of £4.20 
million (2020: 4.03 million), described further in note 18. Planning 
permission is held for the creation of 56 new residential apartments 
and ground floor shops on the site.

DEVELOPMENT PHYSICS LIMITED

Development Physics is a 1/3:1/3:1/3 joint venture between LAP, 
Bisichi and Metroprop Real Estate, set up in the year, with the 
purpose of delivering a residential development of 44 flats and 4 
town houses in Purley, London. Development Physics acquired a 
series of options on the site and has registered for planning 
permission for its development. £0.2 million has been spent to date 
on the development. 

BISICHI PLC
Although the results of Bisichi PLC have been consolidated in these 
financial statements, the Board of LAP has no direct influence over 
the management of Bisichi. The comments below are based on the 
published accounts of Bisichi.

The Bisichi group results are stated in full in its published 2021 financial 
statements which are available on its website www.bisichi.co.uk.

Bisichi has two core revenue streams – investment in retail property 
in the UK and coal mining in South Africa.

The Bisichi group’s profit before tax was £2.8 million (2020: loss 
£4.9 million). The movement compared to the prior year can be 
attributed mainly to higher prices achieved for coal and higher coal 
sale volumes in the second half of the year. 

UK retail property investments were valued at the year end at 
£10.70 million (2020: £10.47 million). The property portfolio is 
actively managed by LAP and generated rental income of £0.9 
million in the year (2020: £0.9 million).

Bisichi has a structured trade finance facility with Absa Bank Limited 
for R85 million held by Sisonke Coal Processing (Pty) Limited, a 
100% subsidiary of Black Wattle Colliery (Pty) Limited. This facility 
comprises of an R85 million revolving facility to cover the working 
capital requirements of the group’s South African operations. The 
facility is renewable annually on 25 January and is secured against 
inventory, debtors and cash that are held in the group’s South 
African operations. 

Bisichi holds a 5 year term facility of £3.9 million with Julian Hodge 
Bank Limited at an initial LTV of 40%, with the loan being secured 
against the company’s UK retail property portfolio. The amount 
repayable on the loan at year end was £3.8 million (2020: £3.8 
million). The debt package has a five-year term and is repayable at 
the end of the term in December 2024. The interest cost of the loan 
is 4.00% above Bank of England base rate. The loan is secured by 
way of a first charge over the investment properties in the UK which 
are included in the financial statements at a value of £10.5 million. 
No banking covenants were breached by Bisichi during the year. 

Bisichi’s cash and cash equivalents increased during the year by 
£1.5 million (2020: decrease of £4.1 million). After taking into 
account an exchange gain of £0.1 million (2020: £0.2 million) on the 
translation of year end net balance of cash and cash equivalents 
that were held in South African Rands, the net balance of cash and 
cash equivalents (including bank overdrafts) at year end was a cash 
positive amount of £0.5 million (2020: cash negative of £1.1 
million).

8  London & Associated Properties PLC 2021

Bisichi has considerable financial resources available at short notice 
including cash and cash equivalents (excluding bank overdrafts) of 
£3.0 million (2020: £3.7 million) and listed investments of £4.3 
million (2020: £2.6 million) as at year end. The above financial 
resources total £7.3 million (2020: £6.4 million).

Bisichi’s net assets at 31st December 2021 were £16.7 million 
(2020: £14.9 million), with a profit after tax of £1.7 million and 
exchange gains of £0.1 million.

Bisichi continues to seek to expand its operations in South Africa 
through the acquisition of additional coal reserves. In the UK, Bisichi 
is looking forward to progressing its development in West Ealing 
and Development Physics as well as expanding on its equity 
investment portfolio. This is in line with Bisichi’s overall strategy of 
balancing the high risk of mining operations with a dependable cash 
flow and capital appreciation from UK property investment 
operations and equity investments.

DRAGON RETAIL PROPERTIES LIMITED
Dragon is a UK property investment company. The company has a 
Santander bank loan of £1.2 million secured against its investment 
property, see note 18, which was covenant compliant at the end of 
the year. 

The loan originally expired in October 2020 but has been extended 
to April 2022, and the lender has offered to extend this further if 
required. We have agreed terms with a new lender to refinance this 
loan in full and are expecting to complete this shortly.

Dragon paid management fees of £72,000 (2020: £72,000) split 
equally between the two joint venture partners. Dragon has net 
assets of £1.3 million (2020: £1.3 million). Dragon continues to 
trade at near break even after tax.

ACCOUNTING JUDGEMENTS AND GOING 
CONCERN
The most significant judgements made in preparing these accounts 
relate to the carrying value of the properties and investments. The 
Group uses external property valuers to determine the fair value of 
most of its properties. 

Under IFRS10 the Group has included Bisichi PLC in the 
consolidated accounts, as it is deemed to be under the effective 
control of LAP and has therefore been treated as a subsidiary.

The Directors exercise their commercial judgement when reviewing 
the Group’s cash flow forecasts and the underlying assumptions on 
which the forecasts are based. The Group’s business activities, 
together with the factors likely to affect its future development, are 
set out in the Chairman’s Statement and Chief Executive’s Review 
and in this Report. Further disclosure of specific factors affecting 
going concern are discussed in more detail in the going concern 
section of the group accounting policies section of the financial 
statements. In addition, the Directors consider that Note 21 to the 
financial statements sets out the Group’s objectives, policies and 
processes for managing its capital; its financial risk management 
objectives; details of its financial instruments and hedging activities; 
and its exposure to credit risk, liquidity risk and other risks.

STATEMENT REGARDING SECTION 172 OF THE UK 
COMPANIES ACT 
Section 172 of the UK Companies Act requires the Board to report 
on how the directors have had regard to the matters outlined below 
in performing their duties. During the year, the Directors consider 
that they have acted in a way, and have made decisions that would 
most likely promote the success of the Group for the benefit of its 
members as a whole as outlined in the matters below: 

STRATEGIC REPORT Financial and performance review

•   The likely consequences of any decision in the long term: see 
Principal Activity, Strategy & Business Model and Risks and 
Uncertainties on pages 10 to 11;

•   The interests of the Group’s employees; ethics and compliance; 

fostering of the Company’s business relationships with suppliers, 
customers and others; and the impact of the Group’s operations 
on the community and environment: see Corporate Responsibility 
and Sustainability reports on pages 13 to 14;

•   The need to act fairly between members of the Company: see the 

Corporate Responsibility section on pages 13 to 14;

•   The desirability of maintaining a reputation for high standards of 

business conduct: see the Corporate Governance section on pages 
19 to 20.

GOING CONCERN
LAP
In reviewing going concern it is necessary to consider separately the 
position of LAP Group and Bisichi. Although both are consolidated into 
group accounts (as required by IFRS 10), they are managed independently 
and in the unlikely event that Bisichi was unable to continue trading this 
would not affect the ability of LAP Group to continue operating as a going 
concern. The same would be true for Bisichi in reverse.

The directors have reviewed the cash flow forecasts of the LAP 
Group and the underlying assumptions on which they are based for 
the 15 months from the date of signing. The LAP Group’s business 
activities, together with the factors likely to affect its future 
development, are set out in the Chairman and Chief Executive’s 
Statement and Financial Review. In addition, Note 21 to the 
financial statements sets out the Group’s objectives, policies and 
processes for managing its capital; its financial risk management 
objectives; details of its financial instruments and hedging activities; 
and its exposure to credit risk and liquidity risk.

Directors assess the longer term prospects of the business over a 
four year time horizon as covered by the Group’s annual rolling 
four-year strategic financial plan. This is considered to be the 
optimum balance between our need to plan for the long term, 
recognising that property investment is a long-term business, and 
the progressively unreliable nature of forecasting in later years.

There are two significant loans expiring in the second half of 2022 
that directors fully anticipate will be refinanced in full and on time. 
This is discussed further in the Going Concern section of the 
Accounting Policies and Note 21 to the financial statements.

As our tenants return to more normalised trading conditions 
following the lifting of all restrictions imposed in response to the 
pandemic, we do not consider uncertainty arising specifically as a 
result of the pandemic to be a going concern risk. Tenant arrears 
increased as a result of the pandemic but this effect is not ongoing.

Bisichi
Detailed budget and cash flow forecasts for Bisichi’s operations 
demonstrate that Bisichi has sufficient resources to meet its liabilities 
as they fall due for at least the next 12 months and that Bisichi will be 
able to manage its business risks and have adequate cash resources to 
continue in operational existence for the foreseeable future. Further 
details can be found in the Bisichi plc 2021 Financial Statements 
which are available on their web site: www.bisichi.co.uk.

Overall Position
With a quality property portfolio comprising a majority of tenants with 
long leases supported by suitable financial arrangements, the Directors 
believe that the group property operations (including Bisichi and 
Dragon) are well placed to address the current business risks 
successfully, despite the continuing uncertain economic climate. The 
mining operations too, as a key industry in South Africa, have a positive 
future. It is also relevant that LAP would be able to continue as a viable 
business if Bisichi were to face unexpected problems as there are no 
cross guarantees and LAP is not dependent on the income from Bisichi. 

Having made enquiries and having considered the principal risks 
facing the Group, including liquidity and solvency risks, and material 
uncertainties, the Directors have a reasonable expectation that the 
Group and the Company have adequate resources to continue in 
operational existence for the foreseeable future. Thus, they 
continue to adopt the going concern basis of accounting in 
preparing the annual financial statements.

TAXATION
The LAP Group tax strategy is to account for tax on an accurate and 
timely basis. We only structure our affairs based on sound 
commercial principles and wish to maintain a low tax risk position. 
We do not engage in aggressive tax planning.

The LAP Group (excluding Bisichi and Dragon) has unused tax losses 
and deductions with a potential value of £11.1 million (2020: £8.0 
million). As LAP returns to profit, these tax losses and deductions 
should be utilised.

DIVIDENDS AND FUTURE PROSPECTS
Due to the current economic uncertainties, the LAP Board has agreed 
that it will not be recommending a dividend for the financial year 
ending 31 December 2021 (2020: £nil).

Looking forwards to medium term trading, we intend to pursue our 
previously stated strategies. These include further reducing the 
Group’s reliance on shopping centres although we feel that our 
value-orientated properties with low reliance on fashion retailers have 
inbuilt defensive qualities. We do not need to fire-sell assets therefore, 
but we are prepared to enter into negotiations with parties that have 
approached us to explore disposals or joint ventures to redevelop 
certain assets within our portfolio. A number of these negotiations are 
ongoing although we are not yet able to say if any will come to 
fruition. A retail market in Rugeley was sold for gross proceeds of 
£520,000 in January 2022.

We will also pursue our policy of investing in other asset classes, 
including industrial property where we have enjoyed success and in 
further joint ventures to undertake residential development. Our 
development in Ealing has received planning consent and options for 
either building out the development or seeking to sell our shares in the 
joint venture are being considered currently. Our development in 
Purley is currently in the planning stage. We acquired an industrial 
property in Warrington in January 2022 for £2.37 million, which we 
believe has potential for both value and rental growth.

We continue to progress the development of the Sheffield shopping 
centre. Planning permission has been granted for 8 apartments above 
ground floor level to be built in a space previously used for property 
management activities and not income producing. We are planning to 
commence the development of the central square to enable year-
round activities to further support all of the tenants at the property, 
particularly the new street food operation, Sheffield Plate, completed 
this year and other new food, beverage and entertainment venues at 
the property. Both of these developments have been allocated 
funding by the local council.

Bisichi
In the first quarter of 2022, the API4 price average was $238 and 
exports from Bisichi’s South African operations in the first quarter of 
2022 have been in line with the average export tonnages achieved 
in 2021. The API4 price averaged $125 in 2021 compared to $65 in 
2020. 

However, looking beyond the first quarter, uncertainties remain, 
particularly in regard to the sustainability of the higher international 
coal price and the impact of continued constraints in transporting 
coal for export on the South African rail network. 

Bisichi continues to seek opportunities to expand its operations in 
South Africa through the acquisition of additional coal reserves.  

London & Associated Properties PLC 2021 9

STRATEGIC REPORT
STRATEGIC REPORT

Principal activities, strategy & business model

The LAP Group’s principal business model is the investment in and management and development of industrial and retail property through 
direct investment and joint ventures. 

The principal activity of Bisichi PLC is coal mining in South Africa. Further information is available in its 2021 Financial Statements which are 
available on their web site: www.bisichi.co.uk

STRATEGIC PRIORITIES ARE
Maximising income

Creating quality property

Capital strength

Maintain the value of investment  
in Bisichi

OUR STRATEGY IS
By achieving an appropriate tenant mix and providing vibrant environments with excellent facilities 
we can increase tenant demand for space and enhance income.
We look to improve the tenant experience at all our properties by achieving an appropriate tenant 
mix and a vibrant trading environment through investment activity, enhancement, refurbishment 
and development.
We operate within a prudent and flexible financial structure. Our gearing policy provides financial 
stability whilst giving capacity and flexibility to look for further investments.
By encouraging the Bisichi management to maximise sustainable profits and cash distributions.

Risks and uncertainties

DESCRIPTION OF RISK
Pandemic risk

DESCRIPTION OF IMPACT
Health and safety of employees and 
stakeholders. Risks related to business 
interruption and tenant failures as 
outlined below.

MITIGATION
Strategies for mitigating the risks have been defined 
and specific measures are in place.

ASSET MANAGEMENT:
Tenant failure

Financial loss.

Leases not renewed

Financial loss.

Asset liquidity (size and  
geographical location)
PEOPLE:
Retention and  
recruitment of staff

REPUTATION:
Business interruption

Initial and subsequent assessment of tenant covenant 
strength combined with an active credit control function.
Lease expiries regularly reviewed. Experienced teams 
with strong tenant and market knowledge who  
manage appropriate tenant mix.
Regular reporting of current and projected position  
to the Board with efficient treasury management.

Assets may be illiquid and affect flexing 
of balance sheet.

Unable to retain and attract the best 
people for the key roles. 

Nomination Committee and senior staff review 
skills gaps and succession planning. Training and 
development offered.

Loss in revenue.

Impact on footfall.

Adverse publicity.

Documented Recovery Plan in place. 

General and terrorism insurance policies in place 
and risks monitored by trained security staff. 

Potential for criminal/civil proceedings.

Health and Safety policies in place. 

FINANCING:
Fluctuation in property  
values

Impact on covenants and other loan 
agreement obligations.

Reduced availability of  
borrowing facilities

Insufficient funds to meet existing debts/
interest payments and  
operational payments.

Loss of cash and deposits

Financial loss.

Fluctuation of interest rates

Uncertainty of interest rate costs.

CCTV in centres.

Secure income flows. 

Regular monitoring of LTV and IC covenants and other 
obligations.

Focus on quality assets.
Efficient treasury management. 

Loan facilities extended where possible.

Regular reporting of current and projected position  
to the Board.
Only use a spread of banks and financial institutions 
which have a strong credit rating.
Manage derivative contracts to achieve a balance 
between hedging interest rate exposure and  
minimising potential cash calls.

10  London & Associated Properties PLC 2021

STRATEGIC REPORT

Bisichi risks and uncertainties

Bisichi (although it is consolidated into group accounts as required by IFRS 10) is managed independently of LAP. The risks outlined below 
are an abbreviated summary of the risks reported by the Directors of Bisichi to the shareholders of that Company. Full details are available 
in the published accounts of Bisichi (www.bisichi.co.uk).

These risks, although critical to Bisichi, are of less significance to LAP which only has a minority investment of 41.52% in the company. In 
the unlikely event that Bisichi was unable to continue trading, it would not affect the ability of LAP to continue operating as a going 
concern. 

DESCRIPTION OF RISK
Coal prices can be impacted materially  
by market and currency variations,  
geopolitical and pandemic factors

DESCRIPTION OF IMPACT
Affects sales value and therefore 
margins.

Mining operations are inherently risky.  
Mineral reserves, regulations, licensing,  
power availability, health and safety can  
all damage operations
Currency risk

Cashflow variation because of mining risks, 
commodity price or currency variations

Loss of production causing loss  
of revenue.

Affects realised sales value and  
therefore margins.
Variations can deliver significant 
shifts in cash flow.

There has been no change in the risks faced by either LAP or Bisichi.

MITIGATION
Bisichi primarily focuses on managing its 
underlying production and processing 
costs to mitigate coal price volatility as 
well as from time to time entering into 
forward sales contracts with the goal of 
preserving future revenue streams. The 
Group has not entered into any such 
contracts in 2020 and 2021.

Bisichi assesses on an ongoing basis the 
impact that the pandemic, geo-political 
events in Ukraine, regulatory changes 
related to climate change and 
governmental CO2 emission 
commitments may have on the  
Group’s mining operations and  
future investment decisions.
Use of geology experts, careful  
attention to regulations, health and 
safety training, employee dialogue to 
minimise controllable risks.
Regular monitoring and review of 
forward currency situation.
UK property investments used to  
offset high risk mining operations.

London & Associated Properties PLC 2021 11

STRATEGIC REPORT

Key performance indicators

The Group’s Key Performance Indicators are selected to ensure clear alignment between its strategy and shareholder interests.  
The KPIs are calculated using data from management reporting systems.

KPI 
STRATEGIC PRIORITY
MAXIMISING INCOME – LIKE FOR LIKE PROPERTY INCOME

PERFORMANCE

To increase the like-for-
like income from each 
property year on year.

Like-for-like rental income 
as a percentage of the 
prior year rental.

MAXIMISING INCOME – OCCUPANCY

We aim to maximise 
the total income in our 
properties by achieving 
full occupancy.

The estimated rental value 
("ERV") of the empty units 
as a percentage of our 
total income.

The like-for-like rental income of the 
group by property has increased by 
£253,000 (4.5%) (2020: decrease of 
£258,000 and 5.3%).

In the continuing difficult trading 
environment, this is considered 
positive. 

Void levels decreased to 3.97% 
(2020: 7.85%). In 2021, 1.17% 
of these are attributable to 
refurbishment activities (2020: 
4.27%). Void levels excluding 
refurbishment activities of 2.8% 
(2020: 3.6%) is considered positive.

CAPITAL STRENGTH – GROWTH IN NET ASSET VALUE PER SHARE

Movement in the net 
assets per share.

The net assets per share reduced 
by 0.21 pence per share (0.6%) to 
34.78p (2020: 34.99p).

This is a satisfactory result.

The net assets per 
share is the principal 
measure used by the 
group for monitoring its 
performance and is an 
indicator of the level of 
reserves available for 
distribution by way of 
dividend.

CHANGE IN LIKE-FOR-LIKE 
INCOME*

500

250

0.0

-250

-500

9.0

8.0

6.0

4.0

2.0

0.0

75.0

50.0

25.0

0.0

2019

2020 2021

VOIDS 

2019

2020

2021

NET ASSETS PER SHARE

2019

2020

2021

12  London & Associated Properties PLC 2021

STRATEGIC REPORT

Corporate responsibility

SUSTAINABLE DEVELOPMENT
Bisichi’s Black Wattle continues to strive to conduct business in a safe, 
environmentally and socially responsible manner. Some highlights of 
their Health, Safety and Environment performance during 2021:

•   Black Wattle Colliery recorded two Lost time Injuries during 2021 

(2020: One). 

•  No cases of Occupational Diseases were recorded. 

•   Zero claims for the Compensation for Occupational Diseases were 

submitted.

In South Africa, the new government regulated Broad-Based Socio-
Economic Empowerment Charter for the Mining and Minerals 
Industry, 2020 (New Mining Charter) came into force from March 
2020. The New Mining Charter is a regulatory instrument that 
facilitates sustainable transformation, growth and development of the 
mining industry. Bisichi is committed to fully complying with the New 
Mining Charter and providing adequate resources to this area in order 
to ensure opportunities are expanded for historically disadvantaged 
South Africans (HDSAs) to enter the mining and minerals industry. In 
addition, Bisichi continue to adhere to and make progress in terms of 
their Social and Labour Plan and various BEE initiatives. A fuller 
explanation of these can be found in Bisichi’s 2021 Financial 
Statements which are available on their web site: www.bisichi.co.uk

GREENHOUSE GAS REPORTING
As a quoted organisation incorporated in the UK, we have reported 
on all emission sources required under the Companies (Directors’ 
Report) and Limited Liability Partnerships (Energy and Carbon 
Report) Regulations 2018 for the period 1st January 2021 to 31st 
December 2021.

Table 1. Landlord & tenant controlled areas

Scope 1 emissions

Scope 2 emissions

Table 2. LAP controlled areas

Scope 1 emissions

Scope 2 emissions

2 Totals differ due to rounding

Table 3. Tenant controlled areas

Scope 1 emissions

Scope 2 emissions

EMISSIONS SOURCE tCO2e
Natural gas
Refrigerants
Electricity
Total tCO2e
Intensity ratio (tCO2e/£k)

EMISSIONS SOURCE tCO2e
Natural gas
Refrigerants
Electricity
Total tCO2e

EMISSIONS SOURCE tCO2e
Natural gas
Refrigerants
Electricity
Total tCO2e

The emissions are detailed in Tables 1, 2 and 3 below.

We have employed the Financial Control definition to outline our 
carbon footprint boundary, reporting Scope 1 & 2 emissions only for 
both landlord & tenant-controlled areas of LAP owned properties 
and facilities.

LAP has landlord-controlled areas in Kings Square, Orchard Square, 
Brewery Street, Shipley, and Bridgend. Properties that LAP manage 
on behalf of others or are not wholly owned by LAP are excluded 
from our footprint boundary. An estimate of the emissions 
associated with the LAP offices on Bruton Place has been included 
in this year’s calculations.

Emissions for landlord-controlled areas have been calculated based 
on actual consumption data collected from each property. Emissions 
from tenant-controlled areas have been calculated based on floor 
area and energy consumption benchmarks for general retail services 
in the UK.

We have used the main requirements of the ISO14064-1 standard 
and HM Government Environmental Reporting Guidelines (2019) 
including streamlined energy and carbon reporting guidance. 
Emission factors were from the UK Government’s GHG Conversion 
Factors for Company Reporting 2021.

As well as reporting Scope 1 and Scope 2 emissions, the regulations 
require that at least one intensity ratio is reported for the given 
reporting period. The intensity figure below shows emissions in 
tCO2e per thousand pounds revenue.
Energy efficiency
Due to the impacts of the pandemic, LAP have not implemented 
any energy efficiency programs or specific measures during the 
2021 year.

1  ISO14064-1:2018 - Greenhouse gases - Part 1: Specification with guidance at 

the organization level for quantification and reporting of greenhouse gas 
emissions and removals 

2021
59
0
1,443
1,502
0.289

2021
57
0
115
172

2021
1
0
1,330
1,331

2020
38
0
1,523
1,561
0.299

20202
38
0
64
101

2020
0
0
1,459
1,459

CHANGE
55%
n/a
-5%
-4%

CHANGE
52%
n/a
80%
70%

CHANGE
n/a
n/a
-8.9%
-8.8%

London & Associated Properties PLC 2021 13

STRATEGIC REPORT Corporate responsibility

Table 4. Coal mining carbon footprint

Emissions source:
Emissions from the combustion of fuel or the operation of any facility including fugitive emissions from 
refrigerants use
Emissions resulting from the purchase of electricity, heat, steam or cooling by the company for its own 
use (location based)
Total gross emissions/tCO2e 
Intensity:
Intensity 1 Tonnes of CO2 per pound sterling of revenue
Intensity 2 Tonnes of CO2 per pound of coal produced

2021
CO2E
TONNES

2020
CO2E
TONNES

41,960 

46,162

12,040

12,482

54,000

58,644

0.0011
0.0516

0.0020
0.0497

KWH
83,079,614
10,186

KWH
N/A
N/A

ANTI-SLAVERY AND HUMAN TRAFFICKING
The Group is committed to the prevention of the use of forced labour 
and has a zero tolerance policy for human trafficking and slavery. 

The Group’s policies and initiatives in this area can be found within the 
Group’s Anti-slavery and human trafficking statement found on the 
Group’s website at www.lap.co.uk. 

DIVERSITY AND EQUALITY
The Board recognises the importance of diversity, both in its 
membership, and in the Group’s employees. It has a clear policy to 
promote diversity across the business. The Board considers that 
quotas are not appropriate in determining its composition and has 
therefore chosen not to set targets. All aspects of diversity, including 
but not limited to gender, are considered at every level of recruitment. 
Gender diversity of the Board and the Group is set out below.

DIRECTORS, EMPLOYEES AND GENDER 
REPRESENTATION
At the year end the LAP Group (excluding Bisichi and Dragon), had  
6 directors (6 male, 0 female), 2 senior managers (1 male, 1 female) 
and 11 employees (7 male, 4 female).

BISICHI PLC
In terms of directors, employees and gender representation, at the year 
end the Group had 9 directors (8 male, 1 female), 6 senior managers  
(5 male, 1 female) and 229 employees (160 male, 69 female).

Detailed information relating to the Bisichi Strategic Report is available 
in its 2021 financial statements.

Approved on behalf of the board of directors

Jonathan Mintz 
Finance Director

28 April 2022

Energy consumption used to calculate above emissions 
Of which UK

ENVIRONMENT

United Kingdom
The Group’s principal UK activity is property investment, which involves 
renting premises to commercial businesses. We seek to provide those 
tenants with good quality premises from which they can operate in an 
efficient and environmentally friendly manner. Where possible, 
improvements, repairs and replacements are made in an environmentally 
efficient manner and waste re-cycling arrangements are in place at all 
the Company’s locations.

South Africa
The Bisichi group’s principal activity in South Africa is coal mining. 
Under the terms of the mine’s Environmental Management 
Programme approved by the Department of Mineral Resource 
(“DMR”), Black Wattle undertakes a host of environmental 
protection activities to ensure that the approved Environmental 
Management Plan is fully implemented. A performance assessment 
audit was conducted to verify compliance to their Environmental 
Management Programme and no significant deviations were found.

EMPLOYEE, SOCIAL, COMMUNITY AND HUMAN 
RIGHTS
The Group’s policy is to attract staff and motivate employees by 
offering competitive terms of employment. The Group provides equal 
opportunities to all employees and prospective employees including 
those who are disabled and operates in compliance with all relevant 
national legislation.

The Group believes that it is in the interest of shareholders to consider 
social and human rights issues when conducting business. Various 
policies and initiatives implemented by the Group that fall within these 
areas are discussed within this report.

14  London & Associated Properties PLC 2021

GOVERNANCE

Directors & advisors

EXECUTIVE DIRECTORS
Sir Michael Heller MA FCA*  
(Chairman)

John A Heller LLB MBA  
(Chief Executive)

Jonathan Mintz FCA  
(Finance Director) 

NON-EXECUTIVE DIRECTORS 
Howard D Goldring BSC (ECON) ACA† 
Howard Goldring was, until 2020, Executive Chairman of Alberon 
Holdings Limited which specialises in the discretionary management of 
investment portfolios for pension funds, charities, family trusts and 
private clients. He also acted as an advisor providing high level asset 
allocation advice to family offices and pension schemes. He has been 
a member of the LAP Board since July 1992, and has over 40 years’ 
experience of the real estate market. He was a director of Baronsmead 
VCT 2 PLC from 2010-2016, and has specialised in providing many 
companies with investor relations support.

Clive A Parritt FCA CF FIIA #† 
Clive Parritt joined the board on 1 January 2006. He is a chartered 
accountant with over 40 years’ experience of providing strategic, 
financial and commercial advice to businesses of all sizes. He is a 
director of Brown Advisory US Smaller Companies plc and a 
member of the Performance, Audit and Risk Committee of Arts 
Council England. Until April 2016 he was Group Finance Director of 
Audiotonix Limited (an international manufacturer of audio mixing 
consoles). He has chaired and been a director of a number of other 
public and private companies. Clive Parritt was President of the 
Institute of Chartered Accountants in England and Wales in 
2011-12. He is Chairman of the Audit Committee and as Senior 
Independent Director he chairs the Nomination and 
RemunerationCommittees.

Robin Priest MA 
Robin Priest joined the board on 31 July 2013. He is a senior 
advisor to Alvarez & Marsal LLP (“A&M”) and to a major listed 
German real estate investment fund manager. He has more than 38 
years’ experience in real estate and structured finance. He was 
formerly Managing Director of A&M’s real estate practice, advising 
private sector and public sector clients on both operational and 
financial real estate matters. Prior to joining A&M, Robin was lead 
partner for Real Estate Corporate Finance in London with Deloitte 
LLP and before this he founded and ran a property company backed 
by private equity. He is also a trustee of London’s Oval House 
Theatre.

*   Member of the nomination committee  
†   Member of the audit, remuneration and nomination committees 
#   Senior independent director 

SECRETARY & REGISTERED OFFICE
Jonathan Mintz FCA 
2nd Floor, 12 Little Portland Street,  
London W1W 8BJ 

AUDITOR
Kreston Reeves LLP 

PRINCIPAL BANKERS
Phoenix CRE Sàrl

Santander UK plc

Metro Bank plc

SOLICITORS
Pinsent Masons LLP

Wake Smith Solicitors Limited

STOCKBROKER
Shore Capital Markets Limited 

REGISTRARS & TRANSFER OFFICE
Link Group 
Shareholder Services 
The Registry 
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL

UK telephone: 0871 664 0300 
International telephone: +44 371 664 0300

(Calls cost 12p per minute plus your phone company’s access 
charge. Calls outside the United Kingdom will be charged at the 
applicable international rate). 

Lines are open between 9.00am to 5.30pm, Monday to Friday, 
excluding public holidays in England and Wales. 

Website: www.linkassetservices.com 
Email: enquiries@linkgroup.co.uk

Company registration number 
341829 (England and Wales)

WEBSITE
www.lap.co.uk

E-MAIL
admin@lap.co.uk

London & Associated Properties PLC 2021 15

GOVERNANCE

GOVERNANCE

Directors’ report

The Directors submit their report and the audited 
financial statements for the year ended  
31  December 2021.

STRATEGIC REPORT
A comprehensive review and assessment of the Group’s activities 
during the year as well as its position at the year end and prospects 
for the forthcoming year are included in the Chairman’s Statement 
and Chief Executive’s Review and the Strategic Report. These 
reports can be found on pages 2 to 14 and should be read in 
conjunction with this report.

PRINCIPAL ACTIVITIES
The principal activities of the Group during the year were property 
investment and development, as well as investment in joint ventures 
and an associated company. The associated company is Bisichi PLC 
(Bisichi) in which the Company holds a 41.52 % interest. Bisichi is 
listed on the main market of the London Stock Exchange and 
operates in England and South Africa with subsidiaries which are 
involved in overseas mining and mining investment. The results, 
together with the assets and liabilities, of Bisichi are consolidated 
with those of LAP in accordance with the terms of IFRS 10 even 
though the Group only has a minority interest – under IFRS 10 the 
58.48% majority interest is disclosed as a “non-controlling interest”.

BUSINESS REVIEW AND POST BALANCE SHEET 
EVENTS
Review of the Group’s development and performance

A review of the Group’s development and performance can be 
found below and should be read in conjunction with the Strategic 
Report on pages 5 to 14.

Details of any post balance sheet events are disclosed in Note 29 to 
the financial statements.

FUTURE DEVELOPMENTS
The Group continues to look for new opportunities to acquire real 
estate assets where it feels it can increase value by applying its intensive 
management skills. At the same time, it seeks to reduce its interest 
payments on its loans as they expire or where opportunities arise to 
refinance on better terms. We also seek to improve our existing estate 
through the continued pursuit of asset management initiatives.

PROPERTY ACTIVITIES
The Group is a long-term investor in property. It acquires 
properties, actively manages those assets to improve rental income, 
and thus seeks to enhance the value of its properties over time.  
In reviewing performance, the principal areas regularly monitored 
by the Group include:

•   Rental income – the aim of the Group is to maximise the 
maintainable income from each property by careful tenant 
management supported by sympathetic and revenue enhancing 
development. Income may be affected adversely by the inability 
of tenants to pay their rent, but careful monitoring of rent 
collection and tenant quality helps to mitigate this risk. Risk is also 
minimised by a diversified tenant base, which should limit the 
impact of the failure of any individual tenant.

16  London & Associated Properties PLC 2021

•   Developments – the Group develops customer-focused spaces 
to generate returns and portfolio income growth above that 
available from standing investments alone.

•   Cash flow – allowing for voids, acquisitions, development 

expenditure, disposals and the impact of operating costs and 
interest charges, the Group aims to maintain a positive cash flow 
over time.

•   Financing costs – the exposure of the Group to interest rate 
movements is managed partly by the use of swap and cap 
arrangements (see Note 21 for full details of the contracts in 
place) and also by using loans with fixed terms and interest rates. 
These arrangements are designed to ensure that our interest 
costs are known in advance and are always covered by 
anticipated rental income.

•   Property valuations – market sentiment and economic conditions 

have a direct effect on property valuations, which can vary 
significantly (upwards or downwards) over time. Bearing in mind 
the long term nature of the Group’s business, valuation changes 
have little direct effect on the ongoing activities or the income 
and expenditure of the Group. Tenants generally have long term 
leases, so rents are unaffected by short term valuation changes. 
Borrowings are secured against property values and if those 
values fall very significantly, this could limit the ability of the 
Group to develop the business using external borrowings. The 
risk is minimised by trying to ensure that there is adequate cover 
to allow for fluctuations in value on a short term basis. 

It continues to be the policy of the Group to realise property assets 
when the valuation of those assets reaches a level at which the 
directors consider that the long-term rental yield has been reached. 
The Group also seeks to acquire additional property investments on 
an opportunistic basis when the potential rental yields offer scope 
for future growth.

INVESTMENT ACTIVITIES
The investments in joint ventures and Bisichi are for the long term.

LAP manages the UK property assets of Bisichi. However, the 
principal activity of Bisichi is overseas mining investment (in South 
Africa). While IFRS 10 requires the consolidation of Bisichi, the 
investment is held to generate income and capital growth over the 
longer term. It is managed independently of LAP and should be 
viewed by shareholders as an investment and not a subsidiary. The 
other listed investments are held as current assets to provide the 
liquidity needed to support the property activities while generating 
income and capital growth. 

Investments in property are made through joint ventures when the 
financing alternatives and spreading of risk make such an approach 
desirable. 

DIVIDEND
In the light of the current uncertain economic environment, the 
directors are not recommending payment of a final dividend for 
2021 (2020: Nil per share). 

GOVERNANCE Directors’ report

THE COMPANY’S ORDINARY SHARES HELD IN TREASURY
At 31 December 2021, 216,715 (2020: 218,197) ordinary shares were 
held in Treasury with a market value of £26,006 (2020: £17,456).

significant benefit to the business. The board has considered the 
re-appointment of Howard Goldring and recommends his re-election 
as a Director.

Treasury shares held at 1 January 2021 
at 31 December 2021

218,197 
216,715

1,482 shares were issued to employees in the year in place of cash for 
dividends associated with shares held within the share incentive plan.

Treasury shares are not included in issued share capital for the purposes 
of calculating earnings per share or net assets per share and they do 
not qualify for dividends payable.

INVESTMENT PROPERTIES
The freehold and long leasehold properties of the Company, its 
subsidiaries, Dragon and Bisichi were revalued as at 31 December 
2021 by independent professional firms of chartered surveyors 
– Allsop LLP, London (72.3 per cent of the portfolio), Carter Towler, 
Leeds (27.7 per cent). The valuations, which are reflected in the 
financial statements, amount to £37.9 million (2020: £42.6 million). 

Property of £25.7 million (2020: £25.0 million) is included under 
current assets, with £25.2 million of inventory (2020: £25.0 million), 
at the lower of cost or net realisable value and £0.5 million as assets 
held for sale (2020: £nil), at the net sale proceeds on completion of 
the sale in January 2022.

Taking account of prevailing market conditions, the valuation of the 
properties at 31 December 2021 resulted in a decrease of £0.1 million 
(2020: decrease of £2.3 million). The proportion of this revaluation 
attributable to the Group (net of taxation) is reflected in the 
consolidated income statement and the consolidated balance sheet. 

FINANCIAL INSTRUMENTS 
Note 21 to the financial statements sets out the risks in respect of 
financial instruments. The board reviews and agrees overall treasury 
policies, delegating appropriate authority for applying these policies 
to the Chief Executive and Finance Director. Financial instruments 
are used to manage the financial risks facing the Group and 
speculative transactions are prohibited. Treasury operations are 
reported at each board meeting and are subject to weekly internal 
reporting. Hedging arrangements are in place for the Company, its 
subsidiaries and joint ventures in order to limit the effect of higher 
interest rates upon the Group. Where appropriate, hedging 
arrangements are covered in the Chairman and Chief Executive’s 
Statement and the Financial Review. 

DIRECTORS
Sir Michael Heller, J A Heller, J Mintz, H D Goldring, C A Parritt and 

R Priest were Directors of the company for the whole of 2021. 

Sir Michael Heller, H D Goldring and J Mintz are retiring by rotation 
at the Annual General Meeting in 2022 and offer themselves for 
re-election.

Sir Michael Heller is Executive Chairman and has been a Director 
since 1971. He has a contract of service determinable upon six 
months’ notice. Sir Michael Heller is a chartered accountant and a 
member of the nomination committee. He is Executive Chairman of 
Bisichi Mining PLC, our associate company. The board has 
considered the re-appointment of Sir Michael Heller and 
recommends his re-election as a Director.

Howard Goldring has been a Director since 1992 and has a contract 
of service determinable upon three months’ notice. He is an 
Independent Director and a member of the audit, nomination and 
remuneration committees. Howard Goldring is a chartered 
accountant and global asset allocation specialist. He was Executive 
Chairman of Alberon Holdings Limited until 2020. His specialized 
economic knowledge and broad commercial experience are of 

Jonathan Mintz has been a Director since 2019 and is also the 
Company Secretary. He has a contract of employment determinable 
upon three months’ notice. Jonathan Mintz is an ACA qualified 
Finance Director experienced in real estate, consultancy, and 
construction in the UK and internationally. He has worked in the 
property and infrastructure sector for the majority of his career, 
holding senior positions with listed and private property and 
construction businesses. The board has considered the re-appointment 
of Jonathan Mintz and recommends his re-election as a Director.

DIRECTORS’ INTERESTS 
The interests of the Directors in the ordinary shares of the 
Company, including family and trustee holdings, where appropriate, 
can be found on page 23 in the Annual Remuneration Report. 

Substantial shareholdings 

31 DEC 2021

31 DEC 2020

NO.

%
48,080,880 56.35 48,080,511 56.35

NO.

%

Sir Michael Heller  
and family
Stonehage Fleming 
Investment 
Management Ltd
James Hyslop
5,286,258
Maland Pension Fund 3,500,000 

7,513,214

8.81

7,663,214

8.98

6.20
4.10 

4,886,258
3,515,472

5.73
4.12

The Company does not consider that the Heller family has a controlling 
share interest irrespective of the number of shares held as no 
individual party holds a majority and there is no legal obligation for 
shareholders to act in concert. The Directors do not consider that 
any single party has control.

The Company is not aware of any other holdings exceeding 3 per 
cent of the issued share capital.

SHARE CAPITAL AND TAKEOVER DIRECTIVE
The Company has one class of share capital, namely ordinary shares. 
Each ordinary share carries one vote. All the ordinary shares rank 
pari passu. There are no securities issued by the Company which 
carry special rights with regard to control of the Company. 

The identity of all significant direct or indirect holders of securities 
in the Company and the size and nature of their holdings is shown 
in “Substantial Shareholdings” above.

The rights of the ordinary shares to which the HMRC approved 
Share Incentive Plan relates are exercisable by the trustees on 
behalf of the employees.

There are no restrictions on voting rights or on the transfer of 
ordinary shares in the Company, save in respect of treasury shares. 
The rules governing the appointment and replacement of Directors, 
alteration of the articles of association of the Company and the 
powers of the Company’s Directors accord with usual English 
company law provisions. Each Director is subject to re-election at 
least every three years. 

The Company is not party to any significant agreements that take 
effect, alter or terminate upon a change of control of the Company 
following a takeover bid. The Company is not aware of any agreements 
between holders of its ordinary shares that may result in restrictions 
on the transfer of its ordinary shares or on voting rights.

There are no agreements between the Company and its Directors or 
employees providing for compensation for loss of office or 
employment that occurs because of a takeover bid.

London & Associated Properties PLC 2021 17

GOVERNANCE Directors' report

STATEMENT AS TO DISCLOSURE OF INFORMATION 
TO THE AUDITOR
The Directors in office at the date of approval of the financial 
statements have confirmed that, so far as they are aware, there is 
no relevant audit information of which the auditor is unaware. Each 
of the Directors has confirmed that they have taken all the steps 
that they ought to have taken as a Director in order to make them 
aware of any relevant audit information and to establish that it has 
been communicated to the auditor. 

INDEMNITIES AND INSURANCE 
The Articles of Association of the company provide for it to indemnify, 
to the extent permitted by law, directors and officers (excluding the 
Auditor) of the company, including officers of subsidiaries and associated 
companies, against liabilities arising from the conduct of the Group’s 
business. The indemnities are qualifying third party indemnity provisions 
of the Companies Act 2006 and each of these qualifying third party 
indemnities was in force during the course of the financial year ended 
31 December 2021 and as at the date of this Directors’ report. No 
amount has been paid under any of these indemnities during the year.

The Group maintains Directors and Officers insurance, which is 
reviewed annually and is considered to be adequate by the 
Company and its insurance advisers.

DONATIONS
No political donations were made during the year (2020: £Nil). No 
donations for charitable purposes were made during the year (2020: 
£Nil).

CORPORATE RESPONSIBILITY
Environment
The environmental considerations of the group’s South African coal 
mining operations are covered in the Bisichi PLC Strategic Report.

The group’s UK activities are principally property investment 
whereby premises are provided for rent to commercial businesses. 
The group seeks to provide those tenants with good quality 
premises from which they can operate in an efficient and 
environmentally efficient manner and waste re-cycling arrangements 
are in place at all the company’s locations.

Greenhouse gas emissions
Details of the group’s greenhouse gas emissions for the year ended 
31 December 2021 can be found on pages 13 and 14 of the 
Strategic Report.

Employment
The group’s policy is to attract staff and motivate employees by offering 
competitive terms of employment. The group provides equal 
opportunities to all employees and prospective employees including 
those who are disabled. The Bisichi PLC Strategic Report gives details of 
the Bisichi group’s activities and policies concerning the employment, 
training, health and safety and community support and social 
development concerning the Bisichi group’s employees in South Africa.

GOING CONCERN
The directors have reviewed the cash flow forecasts of the Group and 
the underlying assumptions on which they are based. The Group’s 
business activities, together with the factors likely to affect its future 
development, are set out in the Chairman’s Statement and Chief 
Executive’s Review and in the Financial and Performance Review. In 
addition, note 21 to the financial statements sets out the Group’s 
objectives, policies and processes for managing its capital; its financial 
risk management objectives; details of its financial instruments and 
hedging activities; and its exposure to credit risk and liquidity risk.

18  London & Associated Properties PLC 2021

With secured banking facilities, sound financial resources, low void 
rates and long term leases in place the Directors believe it remains 
appropriate to adopt the going concern basis of accounting in 
preparing the annual financial statements.

The Bisichi directors continue to adopt the going concern basis  
of accounting in preparing the Bisichi annual financial statements.

CORPORATE GOVERNANCE
The Corporate governance report can be found on pages 19 and 20 
of the annual report and accounts.

ANNUAL GENERAL MEETING
The Annual General Meeting will be held at Meeting Room 2, 12 
Charles II Street, St James, London SW1Y 4QU on Wednesday 15 
June 2022 at 10.00 a.m. Items 1 to 8 will be proposed as ordinary 
resolutions. More than 50 per cent. of shareholders’ votes cast at 
the meeting must be in favour for those ordinary resolutions to be 
passed. The Directors consider that all of the resolutions to be put 
to the meeting are in the best interests of the Company and its 
shareholders as a whole and accordingly the board unanimously 
recommends that shareholders vote in favour of all of the resolutions 
as the Directors intend to do in respect of their own beneficial 
holdings of ordinary shares. Please note that the following paragraphs 
are only summaries of certain of the resolutions to be proposed at 
the Annual General Meeting and do not represent the full text of 
the resolutions. You should therefore read this section in conjunction 
with the full text of the resolutions contained in the notice of 
Annual General Meeting which accompanies this Directors’ Report.

ORDINARY RESOLUTIONS

Resolution 8 – Authority to allot securities
Paragraph 8.1.1 of Resolution 8 would give the Directors the authority 
to allot shares in the Company and grant rights to subscribe for or 
convert any security into shares in the Company up to an aggregate 
nominal value of £2,841,200. This represents approximately 1/3 
(one third) of the ordinary share capital of the Company in issue 
(excluding treasury shares) as at 26 April 2022 (being the last 
practicable date prior to the publication of this Directors’ Report).

In line with guidance issued by the Institutional Voting Information 
Service (IVIS), paragraph 8.1.2 of Resolution 8 would give the directors 
the authority to allot shares in the Company and grant rights to 
subscribe for or convert any security into shares in the Company up to 
a further aggregate nominal value of £2,841,200, in connection with 
an offer by way of a rights issue. This amount represents approximately 
another 1/3 (one third) of the ordinary share capital of the Company 
in issue (excluding treasury shares) as at 26 April 2022 (being the 
last practicable date prior to the publication of this Directors’ Report).

The Directors’ authority will expire on the earlier of 31 August 2023 
or the next AGM. The Directors do not currently intend to make use 
of this authority. However, if they do exercise the authority, the 
Directors intend to follow best practice as recommended by the 
IVIS regarding its use (including as regards the Directors standing for 
re-election in certain cases).

OTHER MATTERS
Kreston Reeves LLP has acted as auditor since its appointment  
at the 2021 AGM on 15 June 2021. Kreston Reeves LLP has 
expressed its willingness to continue in office as auditor. A proposal 
will be made at the Annual General Meeting for its reappointment.

By order of the board 

Jonathan Mintz 
Secretary

For and on behalf of London & Associated Properties PLC

2nd Floor, 12 Little Portland Street
London, W1W 8BJ 

GOVERNANCE

Corporate Governance

The Company has adopted the Corporate Governance 
Code for Small and Mid-Size Quoted Companies 
(the QCA Code) published by the Quoted Companies 
Alliance. The QCA Code provides governance 
guidance to small and mid-size quoted companies. 
The paragraphs below set out how the Company 
has applied this guidance during the year. The 
Company has complied with the QCA Code 
throughout the year. 

PRINCIPLES OF CORPORATE GOVERNANCE
The board promotes good corporate governance in the areas of risk 
management and accountability as a positive contribution to 
business prosperity. The board endeavours to apply corporate 
governance principles in a sensible and pragmatic fashion having 
regard to the circumstances of the business. The key objective is to 
enhance and protect shareholder value.

BOARD STRUCTURE
During the year the board comprised the Chairman, the Chief 
Executive, one other executive Director and three non-executive 
Directors. Their details appear on page 15. The board is responsible 
to shareholders for the proper management of the Group.

The Directors’ responsibilities statement in respect of the accounts 
is set out on page 29. The non-executive Directors have a particular 
responsibility to ensure that the strategies proposed by the 
executive Directors are fully considered. To enable the board to 
discharge its duties, all Directors have full and timely access to all 
relevant information and there is a procedure for all Directors, in 
furtherance of their duties, to take independent professional advice, 
if necessary, at the expense of the Group. The board has a formal 
schedule of matters reserved to it and normally has eleven regular 
meetings scheduled each year. Additional meetings are held for 
special business when required. 

The board is responsible for overall Group strategy, approval of 
major capital expenditure and consideration of significant financial 
and operational matters.

The board committees, which have written terms of reference, deal 
with specific aspects of the Group’s affairs: 

•   The nomination committee is chaired by C A Parritt and 

comprises one other non-executive Director and the executive 
Chairman. The committee is responsible for proposing candidates 
for appointment to the board, having regard to the balance and 
structure of the board. In appropriate cases recruitment 
consultants may be used to assist the process. All Directors are 
subject to re-election at a maximum of every three years.

•   The remuneration committee is responsible for making 

recommendations to the board on the Company’s framework of 
executive remuneration and its cost. The committee determines 
the contract terms, remuneration and other benefits for each of 
the executive directors, including performance related bonus 
schemes, pension rights, option grants and compensation 
payments. The board itself determines the remuneration of the 
non-executive Directors. The committee comprises two non-
executive Directors and it is chaired by C A Parritt. The executive 
Chairman of the board is normally invited to attend. The Annual 
Remuneration Report is set out on pages 22 to 25.

•   The audit committee comprises two non-executive Directors and 
is chaired by C A Parritt. The audit committee report, with its 
terms of reference, is set out on page 28. The Chief Executive 
and Finance Director are normally invited to attend.

BOARD AND BOARD COMMITTEE MEETINGS HELD 
IN 2021
The number of regular meetings during the year and attendance 
was as follows:

Sir Michael Heller  Board

MEETINGS 
HELD
10

MEETINGS 
ATTENDED
10

Nomination committee

Remuneration committee
Board

Audit committee
Board

Audit committee
Board

Audit committee

Nomination committee

Remuneration committee
Board

Audit committee

Nomination committee

Remuneration committee
Board

J A Heller* 

J Mintz* 

C A Parritt

H D Goldring 

R Priest

1

1
10

2
10

2
 10

 2

 1

 1
10

2

1

1
10

1

1
10

2
10

2
 10

 2

 1

 1
9

2

1

1
10

*Attended audit committee by invitation.

PERFORMANCE EVALUATION – BOARD, 
BOARD COMMITTEES AND DIRECTORS
The performance of the board as a whole, its committees and the 
non-executive Directors is assessed by the Chairman and the Chief 
Executive and is discussed with the senior independent non-
executive Director. Their recommendations are discussed at the 
nomination committee prior to proposals for re-election being 
recommended to the board. The performance of executive 
Directors is discussed and assessed by the remuneration committee. 
The senior independent Director meets regularly with the Chairman, 
executive and non-executive Directors individually outside of formal 
meetings. The Directors will take outside advice in reviewing 
performance but have not found this to be necessary to date.

London & Associated Properties PLC 2021 19

There are no internal control issues to report in the annual report 
and financial statements for the year ended 31 December 2021. Up 
to the date of approval of this report and the financial statements, 
the board has not been required to deal with any related material 
internal control issues. The Directors confirm that the board has 
reviewed the effectiveness of the system of internal control as 
described during the period.

COMMUNICATION WITH SHAREHOLDERS
Prompt communication with shareholders is given high priority. 
Extensive information about the Group and its activities is provided 
in the Annual Report. In addition, a half-year report is produced for 
each financial year and published on the Company’s website. The 
Company’s website www.lap.co.uk is updated promptly with 
announcements and Annual Reports upon publication. Copies from 
previous years are also available on the website. 

The share price history and market information can be found at 
https://www.londonstockexchange.com/stock/LAS/london-
associated-properties-plc/company-page. The company code is LAS. 

There is a regular dialogue with the Company’s stockbrokers and 
institutional investors. Enquiries from individuals on matters relating 
to their shareholdings and the business of the Group are dealt with 
promptly and informatively.

The Company’s website is under continuous development to enable 
better communication with both existing and potential new 
shareholders. 

THE BRIBERY ACT 2010
The Company is committed to acting ethically, fairly and with 
integrity in all its endeavours and compliance with the Company’s 
anti–bribery code is monitored closely. 

GOVERNANCE Corporate Governance

INDEPENDENT DIRECTORS
The senior independent non-executive Director is C A Parritt. The 
other independent non-executive Directors are H D Goldring and R 
Priest. R Priest provides services to the Company on a fee paying 
basis. C A Parritt also provides some advisory services as part of his 
accounting practice.

The board encourages all three non-executive Directors to act 
independently and does not consider that length of service of any 
individual non-executive Director, has resulted in the inability or 
failure to act independently. In the opinion of the board the three 
non-executive Directors continue to fulfil their roles as independent 
non-executive Directors. Their background and skills are set out on 
page 15.

The independent Directors exchange views regularly between board 
meetings and meet when required to discuss corporate governance 
and other issues concerning the Group.

INTERNAL CONTROL
The Directors are responsible for the Group’s system of internal 
control and for reviewing its effectiveness at least annually, and for 
the preparation and review of its financial statements. The board 
has designed the Group’s system of internal control in order to 
provide the Directors with reasonable assurance that assets are 
safeguarded, that transactions are authorised and properly recorded 
and that material errors and irregularities are either prevented or 
would be detected within a timely period. However, no system of 
internal control can eliminate the risk of failure to achieve business 
objectives or provide absolute assurance against material 
misstatement or loss. The key elements of the control system in 
operation are:

•   The board meets regularly on full notice with a formal schedule of 

matters reserved for its decision and has put in place an 
organisational structure with clearly defined lines of responsibility 
and with appropriate delegation of authority;

•   There are established procedures for planning, approval and 

monitoring of capital expenditure and information systems for 
monitoring the Group’s financial performance against approved 
budgets and forecasts;

•   The responsible executives are required regularly to undertake a 

full assessment process to identify and quantify the risks that face 
the functional activities for which they are responsible and assess 
the adequacy of the prevention, monitoring and modification 
practices in place for those risks. In addition, regular reports about 
significant risks and associated control and monitoring procedures 
are made to the executive Directors. The process adopted by the 
Group accords with the guidance contained in the document 
“Internal Control Guidance for Directors on the Combined Code” 
issued by the Institute of Chartered Accountants in England and 
Wales. The audit committee receives reports from external 
auditors and from executive Directors of the Group. During the 
period the audit committee has reviewed the effectiveness of the 
system of internal control as described above. The board receives 
periodic reports from all committees.

•   There are established procedures for the presentation and review 

of the financial statements and the Group has in place an 
organisational structure with clearly defined lines of responsibility 
and with appropriate delegation of authority.

20  London & Associated Properties PLC 2021

GOVERNANCE

Governance statement by the Chairman 
of the remuneration committee

The remuneration committee is pleased to present 
its report for the year ended 31 December 2021. 
The report is presented in two parts in accordance 
with the remuneration regulations.

The first part is the Annual Remuneration Report which details 
remuneration awarded to Directors and non-executive Directors 
during the year. The shareholders will be asked to approve the 
Annual Remuneration Report as an ordinary resolution (as in 
previous years) at the AGM in June 2022. 

The second part is the Remuneration Policy which details the 
remuneration policy for Directors, can be found at www.lap.co.uk. 
The current remuneration policy was subject to a binding vote 
which was approved by shareholders at the AGM in July 2020. The 
approval will continue to apply for a 3 year period commencing from 
then. The committee reviewed the existing policy and deemed that 
no changes were necessary to the current arrangements. 

Both of the reports have been prepared in accordance with The 
Large and Medium-sized Companies and Groups (Accounts and 
Reports) (Amendment) Regulations 2013.

The Company’s auditor, Kreston Reeves LLP is required by law to 
audit certain disclosures and where disclosures have been audited 
that is indicated in the independent auditor’s report.

C A Parritt 
Chairman, Remuneration Committee

28 April 2022

London & Associated Properties PLC 2021 21

GOVERNANCE

Annual remuneration report

THE FOLLOWING INFORMATION HAS BEEN AUDITED 

Single total figure of remuneration for the year ended 31 December 2021 

SALARY  

AND FEES
£’000

BONUSES
£’000

BENEFITS
£’000

LONG TERM 
INCENTIVE 
AWARDS
£’000

PENSIONS
£’000

TOTAL  
2021
£’000 

TOTAL FIXED 
REMUNERA-
TION
£’000 

TOTAL  
VARIABLE 
REMUNERA-
TION 
£’000 

Executive Directors
Sir Michael Heller*
Sir Michael Heller - Bisichi
J A Heller
J Mintz

Non-executive Directors
H D Goldring*+
C A Parritt*+
R Priest*

Total 

7
83
533
160
783

18
37
35
90
873

-
-
-
50
50

-
-
-
-
50

68
-
25
8
101

13
-
-
13
114

-
-
-
-
-

-
-
-
-
-

-
-
32
15
47

-
-
-
-
47

75
83
590
233
981

31
37
35
103
1,084

75
83
590
183
931

31
37
35
103
1,034

-
-
-
50
50

-
-
-
-
50

J A Heller has an entitlement to an employer pension contribution of £31,500 for 2021 (2020: £30,000). He has elected for this not to be 
paid at this time. 

Single total figure of remuneration for the year ended 31 December 2020 

SALARY  

AND FEES
£’000

BONUSES
£’000

BENEFITS
£’000

LONG TERM 
INCENTIVES
AWARDS
£’000

PENSIONS
£’000 

TOTAL 
2020
£’000 

TOTAL FIXED 
REMUNERA-
TION
£’000 

TOTAL VARI-
ABLE REMU-
NERATION 
£’000 

Executive Directors
Sir Michael Heller*
Sir Michael Heller - Bisichi
J A Heller
J Mintz

Non-executive Directors
H D Goldring+
C A Parritt*+
R Priest*

Total 

*  Note 25 “Related party transactions”

7
83
348
160
598

18
37
35
90
688

-
-
-
-
-

-
-
-
-
-

62
-
40
4
106

11
-
-
11
117

-
-
-
-
-

-
-
-
-
-

-
-
30
15
45

-
-
-
-
45

69
83
418
179
749

29
37
35
101
850

69
83
418
179
749

29
37
25
101
850

-
-
-
-
-

-
-
-
-
-

+    Members of the remuneration committee for years ended 31 December 2020 and 31 December 2021. C A Parritt was the chair of the remuneration committee 

throughout both years.

Benefits include the provision of car, health and other insurance and 
subscriptions.

Sir Michael Heller is a director of Bisichi PLC, (a subsidiary for IFRS 
10 purposes) and received a salary from that company of £82,500 
(2020: £82,500) for services. He did not receive a bonus in 2021 
(2020: £Nil).

Although Sir Michael Heller receives reduced remuneration in 
respect of his services to LAP, the Company does supply office 
premises, property management, general management, accounting 
and administration services for a number of companies in which Sir 
Michael Heller has an interest. The board estimates that the annual 
value of these services, if supplied to a third party, would have been 
£300,000 (2020: £300,000). Further details of these services are 
set out in Note 25 to the financial statements “Related party 
transactions”.

22  London & Associated Properties PLC 2021

J A Heller is a director of Dragon Retail Properties Limited, (a 
subsidiary for IFRS 10 purposes) and received benefits from that 
company of £3,404 (2020: £11,132) for services. This is included in 
the remuneration figures disclosed above. J A Heller did not draw 
£185,000 of his salary in 2020 due to economic uncertainty at that 
time.

The remuneration figures for C A Parritt include fees paid to his 
accountancy practice for consultancy services provided to the 
Group. This is detailed in Note 25 to the financial statements.

R Priest provides consultancy services to the Group. This is detailed 
in Note 25 to the financial statements.

GOVERNANCE Annual remuneration report

Summary of directors’ terms

Executive Directors
Sir Michael Heller
John Heller
Jonathan Mintz
Non-executive Directors
H D Goldring
C A Parritt
R Priest

TOTAL PENSION ENTITLEMENTS 
Two directors had benefits under money purchase schemes. Under 
his contract of employment, one Director was entitled to a regular 
employer contribution (currently £15,000 a year). Under his contract 
of employment, the other Director was entitled to a regular 
employer contribution (currently £31,500 a year) but has elected 
not to receive it. There are no final salary schemes in operation. No 
pension costs are incurred on behalf of non-executive Directors. 
There are no additional benefits payable to any Director in the 
event of early retirement.

SHARE INCENTIVE PLAN (SIP)
In 2006 the Directors set up an HMRC approved share incentive 
plan (SIP). The purpose of the plan, which is open to all eligible LAP 
executive Directors and head office based staff, is to enable them to 
acquire shares in the Company and give them a continuing stake in 
the Group. 

The SIP comprises four types of share – (1) free shares under which 
the Company may award shares of up to the value of £3,000 each 
year, (2) partnership shares, under which members may save up to 
£1,500 per annum to acquire shares, (3) matching shares, through 
which the Company may award up to two shares for each share 
acquired as a partnership share, and (4) dividend shares, acquired 
from dividends paid on shares within the SIP.

1. Free shares: No free shares were issued in 2020 or 2021. 

2. Partnership shares: No partnership shares were issued in 2020  
or 2021.

3.  Matching shares: The partnership share agreements for the year 
to 31 October 2021 provide for two matching shares to be 
awarded free of charge for each partnership share acquired.  
No partnership shares were acquired in 2021 (2020: nil). 
Matching shares will usually be forfeited if a member leaves 
employment in the Group within five years of their grant.

4.  Dividend shares: Dividends on shares acquired under the SIP will 
be utilised to acquire additional shares. Accumulated dividends 
received on shares in the SIP to 31 December 2021 amounted to 
£156 (2020: £Nil). Of these J A Heller received 369 shares valued 
at £39 (2020: Nil). No other Directors received dividend shares.

DATE OF  

CONTRACT

UNEXPIRED TERM

NOTICE PERIOD

1 January 1971
1 May 2003
11 February 2019

1 July 1992
1 January 2006
31 July 2013

Continuous
Continuous
Continuous

Continuous
Continuous
Continuous

6 months
12 months
3 months

3 months
3 months
3 months

The SIP is set up as an employee benefit trust. The trustee is 
London & Associated Securities Limited, a wholly owned subsidiary 
of LAP, and all shares and dividends acquired under the SIP will be 
held by the trustee until transferred to members in accordance with 
the rules of the SIP. 

SHARE OPTION SCHEMES
The Company has an HMRC approved scheme (Approved Scheme). 
It was set up in 1986 in accordance with HMRC rules to gain HMRC 
approved status which gave the members certain tax advantages. 
There are no performance criteria for the exercise of options under 
the Approved Scheme, as this was set up before such requirements 
were considered to be necessary. No Director has any options 
outstanding under the Approved Scheme nor were any options 
granted under the Approved Scheme for the year ended 31 
December 2021.

A share option scheme known as the “Non-approved Executive 
Share Option Scheme” (Unapproved Scheme) which does not have 
HMRC approval was set up during 2000. At 31 December 2021 
there were no options to subscribe for ordinary shares outstanding. 
The exercise of options under the Unapproved Scheme is subject to 
the satisfaction of objective performance conditions specified by 
the remuneration committee which conforms to institutional 
shareholder guidelines and best practice provisions. Further details 
of this scheme are set out in Note 23 “Share Capital” to the financial 
statements.

PAYMENTS TO PAST DIRECTORS 
No payments were made to past Directors in the year ended 31 
December 2021 (2020: none).

PAYMENTS FOR LOSS OF OFFICE
No payments for loss of office were made in the year ended 31 
December 2021 (2020: none). 

STATEMENT OF DIRECTORS’ SHAREHOLDINGS AND SHARE INTERESTS

Directors’ interests
The interests of the Directors in the ordinary shares of the Company, including family and trustee holdings, where appropriate, were as follows:

Sir Michael Heller
J A Heller 
J Mintz
H D Goldring
C A Parritt 
R Priest

† These non-beneficial holdings are duplicated with those of Sir Michael Heller.

BENEFICIAL  
INTERESTS

NON-BENEFICIAL 
INTERESTS

31 DEC 21
5,749,341
1,872,410
100,000
19,819
36,168
-

1 JAN 21
5,749,341
1,872,041
-
19,819 
36,168
-

31 DEC 20
19,277,931
†14,073,485
-
-
-
-

1 JAN 20
19,277,931
†14,073,485
-
-
-
-

London & Associated Properties PLC 2021 23

GOVERNANCE Annual remuneration report

The beneficial holdings of Directors shown above include their interests in the Share Incentive Plan.

No share awards were made to the Directors in the year, and accordingly no discretion was exercised in determining any award or bonus 
payment as a result of any share price appreciation.

There are no requirements or guidelines for any Director to own shares in the Company.

THE FOLLOWING INFORMATION IS UNAUDITED:

The graph illustrates the Company’s performance as compared with a broad equity market index over a five year period. 
Performance is measured by total shareholder return. The directors have chosen the FTSE All Share – Total Return Index as a 
suitable index for this comparison as it gives an indication of performance against a large spread of quoted companies. 

The middle market price of London & Associated Properties PLC ordinary shares at 31 December 2021 was 12.0p (2020: 
8.0p). During the year the share middle market price ranged between 18.0p and 8.0p. 

Total Shareholder Return

155

135

115

95

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75

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55

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01/01/2017

01/01/2018

01/01/2019

01/01/2020

01/01/2021

      London & Associated Properties

        FTSE All Share Index

REMUNERATION OF THE CHIEF EXECUTIVE OVER THE LAST TEN YEARS 

YEAR
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012

CEO
J A Heller
J A Heller
J A Heller
J A Heller
J A Heller
J A Heller
J A Heller
J A Heller
J A Heller
J A Heller

CHIEF EXECUTIVE SINGLE  
TOTAL FIGURE OF  
REMUNERATION 
£’000
590
418
648
870
487
569
762
835
716
417

ANNUAL BONUS PAYMENT 
AGAINST MAXIMUM  
OPPORTUNITY*
%
0%
0%
0%
20%
11%
18%
41%
49%
n/a
n/a

LONG-TERM INCENTIVE  
VESTING RATES  
AGAINST MAXIMUM  
OPPORTUNITY*
%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a

*There were no formal criteria or conditions to apply in determining the amount of bonus payable or the number of shares to be issued prior to 2014.

In light of the prevailing economic situation at the time the Chief Executive did not draw £185,000 (35%) of his salary in 2020.

PERCENTAGE CHANGE IN EXECUTIVE AND NON-EXECUTIVE DIRECTOR REMUNERATION (AUDITED) 
The table below shows the percentage change in remuneration of the Directors undertaking the role of Chief Executive Officer, Finance 
Director and Non-Executive Directors and the average of Company’s colleagues in London & Associated Properties PLC on a full-time 
equivalent basis.

24  London & Associated Properties PLC 2021

GOVERNANCE Annual remuneration report

DIRECTOR
Executive:
Sir Michael Heller
J A Heller
J Mintz
Non-Executive:
H D Goldring
C A Parritt
R Priest
Colleague pay

BASE SALARY % 
CHANGE 2021 V 2020

BENEFITS %  
CHANGE 2021 V 2020

BONUSES %  
CHANGE 2021 V 2020

0%
53%1
0%

0%
0%
0%
0%

10%
-38%
100%

18%
0%
0%
0%

0%
0%
100%

0%
0%
0%
100%

1  J A Heller waived a portion of his salary in 2020 which resulted in a 53% increase year on year. His base salary entitlement was unchanged 

from 2020.

RELATIVE IMPORTANCE OF SPEND ON PAY
The total expenditure of the Group on remuneration to all employees (Note 26 refers) is shown below:

Employee Remuneration
Distributions to shareholders

2021
£’000 
8,999
0

2020
£’000 
7,289
0

STATEMENT OF IMPLEMENTATION OF 
REMUNERATION POLICY
The policy was approved at the AGM in June 2020 and was 
effective from 1 August 2020. The vote on the remuneration policy 
is binding in nature. The Company may not then make a 
remuneration payment or payment for loss of office to a person 
who is, is to be, or has been a director of the Company unless that 
payment is consistent with the approved remuneration policy, or 
has otherwise been approved by a resolution of members. During 
the year there were no deviations from the procedure for the 
implementation of the remuneration policy as set out in the policy.

CONSIDERATION BY THE DIRECTORS OF MATTERS 
RELATING TO DIRECTORS’ REMUNERATION
The Remuneration Committee considered the executive Directors’ 
remuneration and the Board considered the non-executive Directors’ 
remuneration in the year ended 31 December 2021. No increases were 
awarded and no external advice was taken in reaching this decision. The 
Company did not engage any consultants to provide advice or services 
to materially assist the remuneration committee’s considerations.

SHAREHOLDER VOTING
At the Annual General Meeting on 30 July 2020, there was an 
advisory vote on the resolution to approve the Remuneration 
Report, other than the part containing the remuneration policy.

In addition, on 30 July 2020, there was a binding vote on the resolution to approve the Remuneration Policy. The results are detailed below

Resolution to approve the Remuneration Report (15 June 2021)
Resolution to approve the Remuneration Policy (30 July 2020)

% OF VOTES  
FOR 
77.57
80.73 

% OF VOTES  
AGAINST 
22.43
19.27 

NUMBER OF 
VOTES 
WITHHELD
0
27,265

Although a number of shareholders voted against the approval of the remuneration report at the 2021 AGM, the Remuneration Committee 
and the Board believe that the current remuneration policy (approved by shareholders in 2020) is still appropriate. They have noted that a 
number of shareholders voted against the remuneration report. However, they believe that it is essential to reward executive directors at a 
commercial rate and that the payments are in accordance with the agreed Policy.

London & Associated Properties PLC 2021 25

GOVERNANCE

Remuneration policy summary

The remuneration policy summary below is an extract 
of the group’s current remuneration policy on directors’ 
remuneration (excluding Bisichi PLC), which was 
approved by a binding vote at the 2020 AGM. The 
approved policy took effect from 1 August 2020. 

Notes to the Remuneration Policy
The remuneration committee considers the performance 
measures outlined in the table above to be appropriate 
measures of performance and that the KPIs chosen align the 
interests of the directors and shareholders. 

In setting the policy, the Remuneration Committee has taken 
the following into account:

POLICY TABLE

PURPOSE

ELEMENT
Executive directors
Base salary 

To recognise:

Skills  
Responsibility 
Accountability  
Experience 
Value
To provide competitive retirement benefits

Pension 

POLICY

OPERATION

OPPORTUNITY AND PERFORMANCE CONDITIONS

Considered by remuneration committee on appointment

Set at a level considered appropriate to attract, retain, motivate  
and reward the right individuals

Reviewed annually whenever there is a change 

There is no prescribed maximum salary or maximum rate of increase, although any 

of role or operational responsibility

Paid monthly in cash

increase in excess of inflation is unlikely, unless there are changes in responsibility

No individual director will be awarded a base salary in excess of £575,000 a year

No specific performance conditions are attached to base salaries

Company contribution offered at up to 10% of base salary as part  
of overall remuneration package

The contribution payable by the Company is 

Company contribution offered at up to 10% of base salary as part of overall 

included in the director’s contract of employment 

remuneration package

Benefits 

To provide a competitive benefits package

Contractual benefits include:

Annual  
bonus

To reward and incentivise

Car or car allowance 
Group health cover 
Death in service cover 
Permanent health insurance
In assessing the performance of the executive team, and in particular  
to determine whether bonuses are merited the remuneration 
committee takes into account the overall performance of the business, 
as well as individual contribution to the business in the period

Share  
options 

To provide executive directors with 

a long-term interest in the company

Where it is necessary to attract, retain, motivate and reward the right 
individuals, the directors may establish new schemes to replace any 
expired schemes

Share incentive 
plan (SIP)

To offer a shorter term incentive in the 
company and to give directors a stake in  
the group

Non-executive directors 
Base salary

To recognise:

Skills 
Responsibility 
Experience 
Risk 
Value

Pension
Benefits
Share options

26  London & Associated Properties PLC 2021

Offered to executive directors and head office staff

Maximum participation levels are set by HMRC Of any bonus awarded, Directors may opt to have maximum of £3,000 per year paid 

Considered by the board on appointment

Set at a level considered appropriate to attract, retain and motivate  
the individual 

Experience and time required for the role are considered on 
appointment

No pension offered
No benefits offered except in exchange for sacrificing fees. 
Non-executive directors do not participate in the share option schemes

Paid into money purchase schemes

No specific performance conditions are attached to pension contributions

The committee retains the discretion to approve 

The costs associated with benefits offered are closely controlled and reviewed on an 

changes in contractual benefits in exceptional 

annual basis

circumstances or where factors outside the 

control of the Group lead to increased costs 

(e.g. medical inflation)

No director will receive benefits of a value in excess of 30% of their base salary

No specific performance conditions are attached to contractual benefits

The remuneration committee is using its discretion 

The current maximum bonus will not exceed 80% of base salary in any one year 

to determine the level of bonus on an annual basis

but the remuneration committee reserves the power to award up to 150% in an 

In assessing performance consideration is given 

exceptional year

to the level of net rental income, cash flow, voids, 

Performance conditions will be assessed on an annual basis

The performance measures applied may be financial, non-financial, corporate, 

divisional or individual and in such proportion as the remuneration committee 

considers appropriate

realised development gains and income from 

managing joint ventures, as well as NAV changes. 

Achieved results are then compared with 

expectation taking account of market conditions

Bonuses are generally offered in cash or shares

remuneration committee

Offered at appropriate times by the  

The aggregate number of shares over which options may be granted under all of the 

company’s option schemes (including any options and awards granted under the 

company’s employee share plans) in any period of ten years, will not exceed, at the 

time of grant, 10% of the ordinary share capital of the company from time to time

Share options will be offered by the remuneration committee at their discretion and 

will be subject to appropriate performance criteria at the time.

in ‘Free Shares’ under the SIP scheme rules

Reviewed annually

No individual non-executive director will be awarded a base salary in excess of 

£40,000 a year

No performance conditions are attached to base salaries

GOVERNANCE Remuneration policy summary

•   The need to attract, retain and motivate individuals of a calibre 
who will ensure successful leadership and management of the 
company

•   The LAP Group’s general aim of seeking to reward all employees 
fairly according to the nature of their role and their performance

•   Remuneration packages offered to similar companies within the 

same sector

•   The need to be flexible and adjust with operational changes 

throughout the term of this policy

The remuneration of non-executive directors is determined by the 
board, and takes into account additional remuneration for services 
outside the scope of the ordinary duties of non-executive directors.

For details of remuneration of other company employees please see 
page 25

•   The need to align the interests of shareholders as a whole with 

A copy of the full policy can be found at www.lap.co.uk.

the long-term growth of the Group; and

POLICY TABLE

ELEMENT

PURPOSE

Executive directors

Base salary 

To recognise:

Skills  

Responsibility 

Accountability  

Experience 

Value

POLICY

OPERATION

OPPORTUNITY AND PERFORMANCE CONDITIONS

Considered by remuneration committee on appointment

Set at a level considered appropriate to attract, retain, motivate  

and reward the right individuals

Reviewed annually whenever there is a change 

of role or operational responsibility

Paid monthly in cash

There is no prescribed maximum salary or maximum rate of increase, although any 
increase in excess of inflation is unlikely, unless there are changes in responsibility

No individual director will be awarded a base salary in excess of £575,000 a year

No specific performance conditions are attached to base salaries

Pension 

To provide competitive retirement benefits

Company contribution offered at up to 10% of base salary as part  

of overall remuneration package

The contribution payable by the Company is 
included in the director’s contract of employment 

Company contribution offered at up to 10% of base salary as part of overall 
remuneration package

Benefits 

To provide a competitive benefits package

Contractual benefits include:

Car or car allowance 

Group health cover 

Death in service cover 

Permanent health insurance

Annual  

bonus

To reward and incentivise

In assessing the performance of the executive team, and in particular  

to determine whether bonuses are merited the remuneration 

committee takes into account the overall performance of the business, 

as well as individual contribution to the business in the period

Share  

options 

To provide executive directors with 

Where it is necessary to attract, retain, motivate and reward the right 

a long-term interest in the company

individuals, the directors may establish new schemes to replace any 

expired schemes

plan (SIP)

company and to give directors a stake in  

the group

Non-executive directors 

Base salary

To recognise:

Skills 

Responsibility 

Experience 

Risk 

Value

Pension

Benefits

Share options

Experience and time required for the role are considered on 

the individual 

appointment

No pension offered

No benefits offered except in exchange for sacrificing fees. 

Non-executive directors do not participate in the share option schemes

Paid into money purchase schemes
The committee retains the discretion to approve 
changes in contractual benefits in exceptional 
circumstances or where factors outside the 
control of the Group lead to increased costs 

(e.g. medical inflation)
The remuneration committee is using its discretion 
to determine the level of bonus on an annual basis

In assessing performance consideration is given 
to the level of net rental income, cash flow, voids, 
realised development gains and income from 
managing joint ventures, as well as NAV changes. 
Achieved results are then compared with 
expectation taking account of market conditions

Bonuses are generally offered in cash or shares
Offered at appropriate times by the  
remuneration committee

No specific performance conditions are attached to pension contributions
The costs associated with benefits offered are closely controlled and reviewed on an 
annual basis

No director will receive benefits of a value in excess of 30% of their base salary

No specific performance conditions are attached to contractual benefits

The current maximum bonus will not exceed 80% of base salary in any one year 
but the remuneration committee reserves the power to award up to 150% in an 
exceptional year

Performance conditions will be assessed on an annual basis

The performance measures applied may be financial, non-financial, corporate, 
divisional or individual and in such proportion as the remuneration committee 
considers appropriate

The aggregate number of shares over which options may be granted under all of the 
company’s option schemes (including any options and awards granted under the 
company’s employee share plans) in any period of ten years, will not exceed, at the 
time of grant, 10% of the ordinary share capital of the company from time to time

Share options will be offered by the remuneration committee at their discretion and 
will be subject to appropriate performance criteria at the time.

Share incentive 

To offer a shorter term incentive in the 

Offered to executive directors and head office staff

Maximum participation levels are set by HMRC Of any bonus awarded, Directors may opt to have maximum of £3,000 per year paid 

in ‘Free Shares’ under the SIP scheme rules

Considered by the board on appointment

Set at a level considered appropriate to attract, retain and motivate  

Reviewed annually

No individual non-executive director will be awarded a base salary in excess of 
£40,000 a year

No performance conditions are attached to base salaries

London & Associated Properties PLC 2021 27

 
GOVERNANCE

Audit committee report

The committee’s terms of reference have been 
approved by the board and follow published 
guidelines, which are available on request from the 
company secretary.

The audit committee’s primary tasks are to:

•   review the scope of external audit, to receive regular reports from 

Kreston Reeves LLP and to review the half-yearly and annual 
accounts before they are presented to the board, focusing in 
particular on accounting policies and areas of management 
judgement and estimation;

MEETINGS
The committee meets at least twice a year prior to the publication of the 
annual results and discusses and considers the half year results prior to 
their approval by the board. The audit committee meetings are attended 
by the external audit partner, chief executive, finance director and 
company secretary. During the year the members of the committee also 
meet on an informal basis to discuss any relevant matters which may 
have arisen. Additional formal meetings may be held as necessary.

During the past year the committee:

•   met with the external auditors, and discussed their reports to  

the audit committee;

•   monitor the controls which are in force to ensure the integrity  

•  approved the publication of annual and half year financial results;

of the information reported to the shareholders;

•  considered and approved the annual review of internal controls;

•   act as a forum for discussion of internal control issues and 
contribute to the board’s review of the effectiveness of the 
Group’s internal control and risk management systems and 
processes; 

•   to review the risk assessments made by management, consider 

key risks with action taken to mitigate these and to act as a forum 
for discussion of risk issues and contribute to the board’s review 
of the effectiveness of the Group’s risk management control and 
processes; 

•  consider once a year the need for an internal audit function;

•   advise the board on the appointment of the external auditors,  
the rotation of the audit partner every five years and on their 
remuneration for both audit and non-audit work; discuss the 
nature and scope of their audit work and undertake a formal 
assessment of their independence each year, which includes:

i) 

 a review of non-audit services provided to the Group and 
related fees;

ii)    discussion with the auditors of their written report detailing 

all relationships with the Company and any other parties that 
could affect independence or the perception of 
independence;

iii)    a review of the auditors’ own procedures for ensuring the 
independence of the audit firm and partners and staff 
involved in the audit, including the regular rotation of the 
audit partner; and

iv)   obtaining a written confirmation from the auditors that,  
in their professional judgement, they are independent.

•   decided that there was no current need for an internal audit function 

due to the scale of the business and processes in place;

•   agreed the independence of the auditors and approved their fees 
for both audit and non-audit services as set out in Note 2 to the 
financial statements; 

•   noted the revised procedures applied by the auditors following 

the FRC comments on the 2018 audit, concluded in March 2020;

•   the chairman of the audit committee has also had separate 

meetings and discussions with the external audit partner; and

•   conducted a tender process to appoint Kreston Reeves as the 

company’s auditor.

FINANCIAL REPORTING 
As part of its role, the Audit Committee assessed the audit findings 
that were considered most significant to the financial statements, 
including those areas requiring significant judgement and/or 
estimation. When assessing the identified financial reporting matters, 
the committee assessed quantitative materiality primarily by 
reference to the carrying value of the group’s total assets, given that 
the group operates a principally asset based business. When determining 
quantitative materiality, the Board also gave consideration to the 
value of revenues generated by the group and net asset value, given 
that they are key trading and business KPIs. The qualitative aspects 
of any financial reporting matters identified during the audit process 
were also considered when assessing their materiality. Based on the 
considerations set out above we have considered quantitative 
errors individually or in aggregate in excess of approximately £1.153 
million in relation to the Group and £0.626 million in relation to the 
parent company and £0.3 million for the Bisichi group to be material.

EXTERNAL AUDITOR
The 2021 financial year is the first year in which Kreston Reeves LLP 
has acted as auditor to London & Associated Properties PLC. 
Kreston Reeves was appointed on 15 June 2021 at the AGM. Prior 
to this RSM UK Audit LLP acted as auditor, resigning in 2021 under 
the mandatory audit firms rotation rules.

In the United Kingdom London & Associated Properties PLC 
provides extensive administration and accounting services to Bisichi 
PLC, which has its own audit committee and employs Kreston 
Reeves LLP as its auditor.

28  London & Associated Properties PLC 2021

C A Parritt  
Chairman – Audit Committee

28 April 2022

 
 
 
 
GOVERNANCE

Directors’ responsibilities statement

The directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the group’s and the 
company’s transactions and disclose with reasonable accuracy at 
any time the financial position of the group and the company and 
enable them to ensure that the financial statements and the 
Directors’ Remuneration Report comply with the Companies Act 
2006. They are also responsible for safeguarding the assets of the 
group and the company and hence for taking reasonable steps for 
the prevention and detection of fraud and other irregularities.

DIRECTORS’ STATEMENT PURSUANT TO THE 
DISCLOSURE GUIDANCE AND TRANSPARENCY 
RULES
The Directors consider that the Annual Report and Accounts, taken 
as a whole, is fair, balanced and understandable and provides the 
information necessary for shareholders to assess the Group’s and 
Company’s position and performance, business model and strategy

Each of the directors, whose names and functions are listed on page 
15 confirm that, to the best of each person’s knowledge:

a.  the financial statements, prepared in accordance with the 

applicable set of accounting standards, give a true and fair view of 
the assets, liabilities, financial position and loss of the company 
and the undertakings included in the consolidation taken as a 
whole; and

b.  the Strategic Report contained in the Annual Report includes a 

fair review of the development and performance of the business 
and the position of the company and the undertakings included in 
the consolidation taken as a whole, together with a description of 
the principal risks and uncertainties that they face.

The directors are responsible for the maintenance and integrity of 
the corporate and financial information included on the London & 
Associated Properties PLC website. 

Legislation in the United Kingdom governing the preparation and 
dissemination of financial statements may differ from legislation in 
other jurisdictions. 

Directors are responsible for preparing the 
Strategic Report and the Directors’ Report, the 
Directors’ Remuneration Report and the financial 
statements in accordance with applicable law and 
regulations.

Company law requires the directors to prepare group and company 
financial statements for each financial year. The directors have 
elected under company law to prepare group financial statements in 
accordance with UK-adopted international accounting standards. 
The directors have also prepared the Group Financial Statements in 
accordance with the requirements of international financial 
reporting standards adopted pursuant to Regulation (EC) No 
1606/2002 as it applies in the European Union. The directors have 
elected under company law to prepare the company financial 
statements in accordance with United Kingdom Generally Accepted 
Accounting Practice (United Kingdom Accounting Standards and 
applicable law) including FRS 101 “Reduced Disclosure Framework”.

The group financial statements are required by law and international 
accounting standards in conformity with the requirements of the 
Companies Act 2006 and UK-adopted international financial 
reporting standards adopted pursuant to Regulation (EC) No 
1606/2002 as it applies in the European Union to present fairly the 
financial position and performance of the group; the Companies Act 
2006 provides in relation to such financial statements that 
references in the relevant part of that Act to financial statements 
giving a true and fair view are references to their achieving a fair 
presentation.

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 state of affairs of the group and the company and of the 
profit or loss of the group for that period. 

In preparing each of the group and company financial statements, 
the directors are required to:

a.  select suitable accounting policies and then apply them 

consistently;

b.  make judgements and accounting estimates that are reasonable 

and prudent;

c.  for the group financial statements, state whether applicable 

UK-adopted international accounting standards and international 
financial reporting standards adopted pursuant to Regulation (EC) 
No 1606/2002 as it applies in the European Union have been 
followed, subject to any material departures disclosed and 
explained in the Financial Statements;

d.  for the company financial statements, state whether applicable 
UK accounting standards have been followed, subject to any 
material departures disclosed and explained in the company 
financial statements;

e.  prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the group and the 
company will continue in business.

London & Associated Properties PLC 2021 29

 
GOVERNANCE

Independent auditor’s report

TO THE SHAREHOLDERS OF LONDON & ASSOCIATED PROPERTIES PLC

FOR THE YEAR ENDED 31 DECEMBER 2021

OPINION
We have audited the financial statements of 
London & Associated Properties PLC (the ‘parent 
company’) and its subsidiaries (the ‘Group’) for the 
year ended 31 December 2021 which comprise 
the consolidated income statement, consolidated 
statement of comprehensive income, consolidated 
and company balance sheets, consolidated and 
company statements of changes in shareholders’ 
equity, consolidated cash flow statement and 
notes to the financial statements, including a 
summary of significant Group accounting policies. 
The financial reporting framework that has been 
applied in their preparation of the group financial 
statements is applicable law and UK adopted 
international accounting standards. The financial 
reporting framework that has been applied in the 
preparation of the parent company financial 
statements is applicable law and United Kingdom 
Accounting Standards, including FRS 101 Reduced 
Disclosure Framework (United Kingdom Generally 
Accepted Accounting Practice).

In our opinion: 

•   the financial statements give a true and fair view of the state of 

the Group’s and of the parent company's affairs as at 31 
December 2021 and of the Group’s profit for the year then ended;

•   the group financial statements have been properly prepared in 

accordance with UK adopted international accounting standards;

•   the parent company financial statements have been properly 

prepared in accordance with United Kingdom Generally Accepted 
Accounting Practice; and

•   the financial statements have been prepared in accordance with 

the requirements of the Companies Act 2006.

BASIS FOR OPINION
We conducted our audit in accordance with International Standards on 
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under 
those standards are further described in the Auditor’s responsibilities 
for the audit of the financial statements section of our report. We are 
independent of the Group and the parent company in accordance with 
the ethical requirements that are relevant to our audit of the financial 
statements in the UK, including the FRC’s Ethical Standard as applied 
to listed public entities, and we have fulfilled our other ethical 
responsibilities in accordance with these requirements. We believe 
that the audit evidence we have obtained is sufficient and appropriate 
to provide a basis for our opinion.

30  London & Associated Properties PLC 2021

AN OVERVIEW OF THE SCOPE OF OUR AUDIT
As part of designing our audit, we determined materiality and 
assessed the risks of material misstatement in the financial 
statements. In particular, we looked at where the directors made 
subjective judgements, for example in respect of significant 
accounting estimates that involved making assumptions and 
considering future events that are inherently uncertain. As in all of 
our audits we also addressed the risk of management override of 
internal controls, including evaluating whether there was evidence 
of bias by the directors that represented a risk of material 
misstatement due to fraud.

COVERAGE OVERVIEW

GROUP 
REVENUE

GROUP 
PROFIT/
(LOSS) 
BEFORE TAX

GROUP NET 
ASSETS

Full statutory audit 
(Kreston Reeves  
and BDO)

Limited procedures

Totals at 
31 December 2021:

99.9%

0.1%

94.5%

5.5%

90.8%

9.2%

100%

100%

100%

We tailored the scope of our audit to ensure that we performed 
sufficient work to be able to give an opinion on the financial 
statements as a whole, taking into account the structure of the 
Group and the parent company, the accounting processes and 
controls, and the industry in which they operate.

Our scoping considerations for the Group audit were based both on 
financial information and risk. As noted above limited assurance audit 
work – which is to say the audit of balances and transactions material 
at a group level – was only applied in respect of a small element of the 
group. The below table summarises for the parent company, and its 
subsidiaries, the level of assurance gained:

GROUP COMPONENT

LEVEL OF ASSURANCE

London & Associated Properties PLC Full statutory audit (Kreston Reeves LLP)

Analytical Properties Limited

Full statutory audit (Kreston Reeves LLP)

Orchard Square Limited

Full statutory audit (Kreston Reeves LLP)

Dragon Retail Limited

Full statutory audit (Kreston Reeves LLP)

London & Associated Management 
Services Limited

Full statutory audit (Kreston Reeves LLP)

LAP Ocean Holdings Limited

Full statutory audit (Kreston Reeves LLP)

Analytical Properties Holdings 
Limited

Full statutory audit (Kreston Reeves LLP)

West Ealing Projects Limited

Full statutory audit (Kreston Reeves LLP)

Bisichi PLC

Full statutory audit (Kreston Reeves LLP)

Mineral Products Limited

Full statutory audit (Kreston Reeves LLP)

Bisichi (Properties) Limited

Full statutory audit (Kreston Reeves LLP)

Bisichi Northampton Limited

Full statutory audit (Kreston Reeves LLP)

Black Wattle Colliery (Pty) Limited

Full statutory audit (BDO South Africa 
Incorporated)

Sisonke Coal Processing (Pty) Limited Full statutory audit (BDO South Africa 

Incorporated)

Black Wattle Klipfontein (Pty) Limited Full statutory audit (BDO South Africa 

Incorporated)

All other group undertakings

Limited assurance

 
 
 
 
 
 
 
 
 
GOVERNANCE Independent auditor’s report

KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional 
judgment, were of most significance in our audit of the financial 
statements of the current period and include the most significant 
assessed risks of material misstatement (whether or not due to 
fraud) that we identified, including those which had the greatest 

effect on the overall audit strategy, the allocation of resources in 
the audit; and directing the efforts of the engagement team. These 
matters were addressed in the context of our audit of the financial 
statements as a whole, and in forming our opinion thereon, and we 
do not provide a separate opinion on these matters. This is not a 
complete list of all risks identified by our audit.

REVENUE RECOGNITION:

Significance and nature of key risk

How our audit addressed the key risk

Revenue is a key performance indicator for users in assessing 
the group’s financial statements. Revenue generated has a 
significant impact on cash inflows and profit before tax for the 
group. As such revenue is a key determinant in profitability and 
the group’s ability to generate cash.

Rental income revenue was recalculated based on the terms included 
in signed lease agreements. Again, the recognition stages detailed in 
the relevant standards were carefully considered to ensure revenue 
recognised was in line with these and a substantive approach was 
taken.

Revenue comprises two key revenue streams: the property 
rental income and sale of coal.

Rental income is recognised in the Group income statement on 
a straight-line basis over the term of the lease.

Coal revenue is recognised when the customer has a legally 
binding obligation to settle under the terms of the contract.

Sales of coal and coal processing services in the period were tested 
from the trigger point of the sale to the point of recognition in the 
financial statements, corroborating this to contract sales or service 
terms and the recognition stages detailed in IFRS 15.

Revenue streams were further analytically reviewed via comparison to 
our expectations. Expectations were based on a combination of prior 
financial data, budgets and our own assessments based on industry 
competitors.

Cut-off of revenue was reviewed for sales of coal by analysing sales 
recorded during the period just before and after the financial year end 
and determining if the recognition applied was appropriate, whilst 
rental income cut-off has been reviewed by generating a proof in total 
of the income from the tenancy agreements and comparing to the 
income per the nominal ledger.

Walkthrough testing was performed to ensure that key systems and 
controls in place around the revenue cycle operated as designed.

The accuracy of revenue disclosures in the accounts were confirmed 
to be consistent with the revenue cycle observed and audited. The 
completeness of these disclosures was confirmed by reference to the 
full disclosure requirements as detailed in IFRS 15.

KEY OBSERVATIONS COMMUNICATED TO THE AUDIT COMMITTEE

We have no concerns over the material accuracy of revenue recognised in the financial statements.

VALUATION/IMPAIRMENT OF INVESTMENT PROPERTIES AND INVENTORY:

Significance and nature of key risk

How our audit addressed the key risk

Investment properties comprise freehold and long leasehold 
land and buildings, whilst properties classified as inventory are 
properties which are currently being developed.

Investment properties are carried at fair value in accordance 
with IAS 40 and are revalued annually by professional external 
surveyors and included in the balance sheet at their fair value. 
Gains or  losses  arising from changes in the fair values of 
assets are recognised in the consolidated income statement 
in the period to which they relate. In accordance with IAS 40, 
investment properties are not depreciated.

Appropriate classification of each property was considered, IAS 40 
for investment properties, IAS 2 for inventory and IFRS 5 for non-
current assets held for sale, to ensure each property has been classified 
correctly and therefore accounted for and disclosed within these 
financial statements in accordance with the relevant standard.

External valuation reports were obtained and vouched to stated fair 
values. The competence and independence of the valuation experts 
was carefully considered to ensure that the reports they produce can 
be relied upon.

The fair value of the head leases is the net present value of the 
current head rent payable on leasehold properties until the 
expiry of the lease.

A meeting was held with the valuers to challenge the assumptions 
in their report and discuss the movements in the values of specific 
properties.

Supporting calculations for the long leasehold land and buildings were 
reviewed to ensure they are materiality accurate and any assumptions 
are considered to be reasonable.

KEY OBSERVATIONS COMMUNICATED TO THE AUDIT COMMITTEE

We have no concerns over the material accuracy of investment properties and inventory values recognised in the financial statements.

London & Associated Properties PLC 2021 31

GOVERNANCE Independent auditor’s report

VALUATION/IMPAIRMENT OF MINING RESERVES:

Significance and nature of key risk

How our audit addressed the key risk

The purpose of mine development is to establish secure working 
conditions and infrastructure to allow the  safe and efficient 
extraction of recoverable reserves.

The accounting requirements of IFRS 6 and IAS 16 were considered 
to ensure capitalisation of costs to mine development under IAS 16 
was appropriate.

Depreciation on mine development costs is not charged 
until production commences or the assets are put to use. On 
commencement of full commercial production, depreciation is 
charged over the life of the associated mine reserves extractable 
using the asset on a unit of production basis.

The unit of production calculation is based on tonnes mined 
as a ratio to proven and probable reserves  and also includes 
future forecast capital expenditure. The cost recognised includes 
the recognition of any decommissioning assets related to mine 
development.

In considering impairment indicators, as governed by IAS 36, the 
life of mine assessment was obtained. All significant input variables 
were considered and stress-tested to assess headroom between 
modelling and the value of mine development.

Consideration was given to the competence and independence 
of the technical expert involved with the production of historic 
technical reports on which the life of mine assessment is partially 
built.

Depreciation of mine development was recalculated based on 
the unit of production basis to ensure accurately recorded. This 
basis was also considered for reasonableness by reference to the 
accounting policies of industry peers.

The accuracy and appropriateness of mine development disclosures 
in the accounts were confirmed to be consistent with the mine 
development accounting cycle observed and audited.

KEY OBSERVATIONS COMMUNICATED TO THE AUDIT COMMITTEE

We have no concerns over the material accuracy of mining reserves and development values recognised in the financial statements.

OUR APPLICATION OF MATERIALITY
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing and extent of our audit 
procedures. When evaluating whether the effects of misstatements, both individually and on the financial statements as a whole, could reasonably 
influence the economic decisions of the users we take into account the qualitative nature and the size of the misstatements. Based on our 
professional judgement, we determined materiality as follows:

Materiality

GROUP

£1,153,000

Basis for determining materiality

3% of net assets

PARENT COMPANY

£626,000

3% of net assets

Rationale for benchmark applied

The group's principal activity is that of 
investment, management and development 
of industrial and retail property and 
exploration and mining operation. To this 
end, the business is highly asset focused. 
Therefore, a benchmark for materiality of the 
net assets of the group is considered to be 
appropriate.

The parent company’s principal activity is that 
of investment, management and development 
of industrial and retail property. To this end, the 
business is highly asset focused. Therefore, 
a benchmark for materiality of the net assets 
of the group is considered to be appropriate.

Performance materiality

Basis for determining performance 
materiality

£807,000

70% of materiality

£440,000

70% of materiality

Rationale for performance materiality 
applied

On the basis of our risk assessments, 
together with our assessment of the Group’s 
overall control environment, our judgement 
was that performance materiality was 70% 
of our planning materiality. In assessing the 
appropriate level, we consider the nature of 
the group and that this is our first year of 
undertaking the audit of the Group.

On the basis of our risk assessments, 
together with our assessment of the 
Company’s overall control environment, our 
judgement was that performance materiality 
was 70% of our planning materiality. In 
assessing the appropriate level, we consider 
the nature of the group and that this is our 
first year of undertaking the audit of the 
Company.

Triviality threshold

£58,000

£31,000

Basis for determining triviality threshold

5% of materiality

5% of materiality

32  London & Associated Properties PLC 2021

GOVERNANCE Independent auditor’s report

We reported all audit differences found in excess of our triviality 
threshold to the directors and the Audit Committee.

For each Group company within the scope of our Group audit, we 
allocated a materiality that is less than our overall Group materiality. 
The range of materiality allocated across each Group company was 
between £227,000 and £1,000. The scope of our audit was 
influenced by our application of materiality as we set certain 
quantitative thresholds for performance materiality and use these 
thresholds as a consideration tool to help to determine the scope of 
our audit and the nature, timing and extent of our audit procedures 
on the individual financial statement line items and disclosures and 
in evaluating the effect of misstatements, both individually and in 
aggregate on the financial statements as a whole.

We determined component materiality for the parent company to be 
capped at below group materiality. This was also the case for group 
subsidiaries registered outside of the UK. For the trading subsidiaries, 
3% of that subsidiary’s net assets was used. Performance materiality 
was calculated at 70% of component materiality.

CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the 
Directors' use of the going concern basis of accounting in the 
preparation of the financial statements is appropriate. Our 
evaluation of the Directors’ assessment of the Group and parent 
company’s ability to continue to adopt the going concern basis of 
accounting including the following:

•   Gaining an understanding of the systems and controls around 
managements’ going concern assessment, including for the 
preparation and review process for forecasts and budgets.

•   Evidence was obtained that management have undertaken a formal 
going concern assessment, including sensitivity analysis on cash 
flow forecasts, clear consideration of external factors including the 
COVID pandemic and the war in Ukraine and the potential liquidity 
impact of these on cash balances including available facilities.

•   We have evaluated the financial strength of the business at the 

year end date.

•   We tested the mechanical integrity of forecast model by checking 

the accuracy and completeness of the model, including 
challenging the appropriateness of estimates and assumptions 
with reference to empirical data and external evidence.

•   Based on our above assessment we performed our own 
sensitivity analysis in respect of the key assumptions 
underpinning the forecasts.

•   We considered post year end performance of the business and any 
significant events which may impact the going concern of the group.

•   The group's banking facility documentation was reviewed to 
ensure that any covenants in place have not been breached.

•   We reviewed the adequacy and completeness of the disclosure 

included within the financial statements in respect of going concern.

Based on the work we have performed, we have not identified any 
material uncertainties relating to events or conditions that, 
individually or collectively, may cast significant doubt on the group’s 
or the parent company’s ability to continue as a going concern for a 
period of at least twelve months from when the financial statements 
are authorised for issue.

In relation to the Group and Parent Company’s reporting on how they 
have applied the UK Corporate Governance Code, we have nothing 
material to add or draw attention to in relation to the directors’ 
statement in the financial statements about whether the directors 
considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with 
respect to going concern are described in the relevant sections of 
this report.

OTHER INFORMATION
The other information comprises the information included in the 
annual report other than the financial statements and our auditor’s 
report thereon. The directors are responsible for the other 
information contained within the annual report. Our opinion on the 
financial statements does not cover the other information and, 
except to the extent otherwise explicitly stated in our report, we do 
not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, 
consider whether the other information is materially inconsistent 
with the financial statements, or our knowledge obtained in the 
course of the audit, or otherwise appears to be materially misstated. 
If we identify such material inconsistencies or apparent material 
misstatements, we are required to determine whether this gives rise 
to a material misstatement in the financial statements themselves. If, 
based on the work we have performed, we conclude that there is a 
material misstatement of this other information, we are required to 
report that fact.

We have nothing to report in this regard.

OUR OPINION ON THE REMUNERATION REPORT
Kreston Reeves has audited the Annual remuneration report set out 
on pages 22 to 25 of the Annual Report for the year ended 31 
December 2021. The directors of the Company are responsible for 
the preparation and presentation of the Remuneration Report in 
accordance with the Companies Act 2006. Kreston Reeves’ 
responsibility is to express an opinion on the Remuneration Report, 
based on our audit conducted in accordance with International 
Accounting Standards. In Kreston Reeves’ opinion, the 
Remuneration Report of the Group for the year, complies with the 
requirements of the Companies Act 2006.

OPINIONS ON OTHER MATTERS PRESCRIBED BY 
THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course of the audit:

•   the information given in the strategic report and the directors’ 

report for the financial year for which the financial statements are 
prepared is consistent with the financial statements; and

•   the strategic report and the directors’ report have been prepared 

in accordance with applicable legal requirements.

London & Associated Properties PLC 2021 33

 
GOVERNANCE Independent auditor’s report

MATTERS ON WHICH WE ARE REQUIRED TO 
REPORT BY EXCEPTION
In the light of our knowledge and understanding of the Group and 
parent company and its environment obtained in the course of the 
audit, we have not identified material misstatements in the strategic 
report or the directors’ report.

We have nothing to report in respect of the following matters in 
relation to which the Companies Act 2006 requires us to report to 
you if, in our opinion:

•   adequate accounting records have not been kept by the parent 

company, or returns adequate for our audit have not been 
received from branches not visited by us; or

•   the parent company financial statements are not in agreement 

with the accounting records and returns; or

•   certain disclosures of directors’ remuneration specified by law are 

not made; or

•   we have not received all the information and explanations we 

require for our audit

CORPORATE GOVERNANCE STATEMENT
The Listing Rules require us to review the directors’ statement in 
relation to going concern, longer-term viability and that part of the 
Corporate Governance Statement relating to the Group’s and Parent 
Company’s compliance with the provisions of the UK Corporate 
Governance Code specified for our review.

Based on the work undertaken as part of our audit, we have 
concluded that each of the following elements of the Corporate 
Governance Statement is materially consistent with the financial 
statements and our knowledge obtained during the audit:

•   Directors’ statement with regards to the appropriateness of 

adopting the going concern basis of accounting and any material 
uncertainties identified set out on page 18;

•   Directors’ explanation as to its assessment of the group’s 

prospects, the period this assessment covers and why the period 
is appropriate set out on page 9;

•   Directors’ statement on whether it has a reasonable expectation 
that the group will be able to continue in operation and meets its 
liabilities set out on page 9;

•   Directors’ statement on fair, balanced and understandable set out 

on page 29;

•   Board’s confirmation that it has carried out a robust assessment 
of the emerging and principal risks set out on pages 10 to 11;

•   Section of the Annual Report that describes the review of 

effectiveness of risk management and internal control systems set 
out on page 20; and

•   Section describing the work of the Audit Committee set out on 

page 28.

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the directors’ responsibilities statement 
(set out on page 29), the directors are responsible for the 
preparation of the financial statements and for being satisfied that 
they give a true and fair view, and for such internal control as the 
directors determine is necessary to enable the preparation of 
financial statements that are free from material misstatement, 
whether due to fraud or error.

In preparing the financial statements, the directors are responsible 
for assessing the Group’s and parent company’s ability to continue 
as a going concern, disclosing, as applicable, matters related to going 
concern and using the going concern basis of accounting unless the 
directors either intend to liquidate the Group or parent company or 
to cease operations, or have no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF 
THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether 
the financial statements as a whole are free from material 
misstatement, whether due to fraud or error, and to issue an 
auditor’s report that includes our opinion. Reasonable assurance is a 
high level of assurance but is not a guarantee that an audit 
conducted in accordance with ISAs (UK) will always detect a 
material misstatement when it exists. Misstatements can arise from 
fraud or error and are considered material if, individually or in the 
aggregate, they could reasonably be expected to influence the 
economic decisions of users taken on the basis of these financial 
statements.

Irregularities, including fraud, are instances of non-compliance with 
laws and regulations. We design procedures in line with our 
responsibilities, outlined above, to detect material  misstatements in 
respect of irregularities, including fraud. The extent to which our 
procedures are capable of detecting irregularities, including fraud is 
detailed below:

CAPABILITY OF THE AUDIT IN DETECTING 
IRREGULARITIES, INCLUDING FRAUD
Based on our understanding of the group and industry, and through 
discussion with the directors and other management (as required by 
auditing standards), we identified that the principal risks of non- 
compliance with laws and regulations related to health and safety, 
anti-bribery and employment law. We considered the extent to 
which non-compliance might have a material effect on the financial 
statements. We also considered those laws and regulations that 
have a direct impact on the preparation of the financial statements 
such as the Companies Act 2006, IFRS, FRS 101, taxation 
legislation and mining laws and regulations. We communicated 
identified laws and regulations throughout our team and remained 
alert to any indications of non-compliance throughout the audit. We 
evaluated management’s incentives and opportunities for fraudulent 
manipulation of the financial statements (including the risk of 
override of controls) and determined that the principal risks were 
related to posting inappropriate journal entries to increase revenue 
or reduce expenditure, management bias in accounting estimates 
and judgemental areas of the financial statements including the 
valuation of investment properties and the mining reserves. Audit 
procedures performed by the group engagement team and 
component auditors included:

34  London & Associated Properties PLC 2021

GOVERNANCE Independent auditor’s report

•   We obtained an understanding of the legal and regulatory 

frameworks that are applicable to the Group and determined that 
the most significant are those that relate to the reporting 
framework and the relevant tax compliance regulations in the 
jurisdictions in which London & Associated Properties PLC 
operates. In addition, we concluded that there are certain 
significant laws and regulations that may have an effect on the 
determination of the amounts and disclosures in the financial 
statements, mainly relating to health and safety, employee 
matters, bribery and corruption practices, environmental and 
certain aspects of company legislation recognising the regulated 
nature of the Group’s mining and oil and gas activities and its 
legal form; and

•   Detailed discussions were held with management to identify any 
known or suspected instances of non- compliance with laws and 
regulations; and

•   Conclude on the appropriateness of the directors’ use of the 
going concern basis of accounting and, based on the audit 
evidence obtained, whether a material uncertainty exists related 
to events or conditions that may cast significant doubt on the 
Group’s or the parent company’s ability to continue as a going 
concern. If we conclude that a material uncertainty exists, we are 
required to draw attention in our auditor’s report to the related 
disclosures in the financial statements or, if such disclosures are 
inadequate, to modify our opinion. Our conclusions are based on 
the audit evidence obtained up to the date of our auditor’s report. 
However, future events or conditions may cause the Group or the 
parent company to cease to continue as a going concern.

•   Evaluate the overall presentation, structure and content of the 
financial statements, including the disclosures, and whether the 
financial statements represent the underlying transactions and 
events in a manner that achieves fair presentation.

•   Challenging assumptions and judgements made by management 

•   Obtain sufficient appropriate audit evidence regarding the financial 

in its significant accounting estimates; and

•   Confirmation of related parties with management, and review of 
transactions throughout the period to identify any previously 
undisclosed transactions with related parties outside the normal 
course of business; and

•   Reading minutes of meetings of those charged with governance; 

and

•   Performing analytical procedures with automated data analytics 

tools to identify any unusual or unexpected relationships, 
including related party transactions, that may indicate risks of 
material misstatement due to fraud;

Because of the inherent limitations of an audit, there is a risk that 
we will not detect all irregularities, including those leading to a 
material misstatement in the financial statements or non-compliance 
with regulation. This risk increases the more that compliance with a 
law or regulation is removed from the events and transactions 
reflected in the financial statements, as we will be less likely to 
become aware of instances of non-compliance.

As part of an audit in accordance with ISAs (UK), we exercise 
professional judgment and maintain professional scepticism 
throughout the audit. We also:

•   Identify and assess the risks of material misstatement of the 

financial statements, whether due to fraud or error, design and 
perform audit procedures responsive to those risks, and obtain 
audit evidence that is sufficient and appropriate to provide a basis 
for our opinion. The risk of not detecting a material misstatement 
resulting from fraud is higher than for one resulting from error, as 
fraud may involve collusion, forgery, intentional omissions, 
misrepresentations, or the override of internal control.

•   Obtain an understanding of internal control relevant to the audit 
in order to design audit procedures that are appropriate in the 
circumstances, but not for the purpose of expressing an opinion 
on the effectiveness of the Group’s internal control.

•   Evaluate the appropriateness of accounting policies used and the 
reasonableness of accounting estimates and related disclosures 
made by the directors.

information of the entities or business activities within the Group to 
express an opinion on the consolidated financial statements. We are 
responsible for the direction, supervision and performance of the 
Group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, 
among other matters, the planned scope and timing of the audit and 
significant audit findings, including any significant deficiencies in 
internal control that we identify during our audit.

Other matters which we are required to address

We were appointed by the audit committee on 19 November 2021 
to audit the financial statements for the year ending 31 December 
2021. Our total uninterrupted period of engagement is 1 year, 
covering the year ended 31 December 2021.

The non-audit services prohibited by the FRC’s Ethical Standard 
were not provided to the group or the parent company and we 
remain independent of the group and the parent company in 
conducting our audit.

Our audit opinion is consistent with the additional report to the 
audit committee.

USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in 
accordance with Chapter 3 of Part 16 of the Companies Act 2006. 
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 auditor 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.

Stephen Tanner BSc(Econ) FCA (Senior Statutory Auditor)  
For and on behalf of

Kreston Reeves LLP  
Chartered Accountants  
Statutory Auditor  
London

28 April 2022

London & Associated Properties PLC 2021 35

financial state-

ments

FINANCIAL 
STATEMENTS

Consolidated income statement
for the year ended 31 December 2021

Group revenue
Operating costs
Operating (loss)/profit
Finance income
Finance expenses
Result before revaluation and other movements

Non–cash changes in valuation of assets and liabilities and other movements
Exchange (losses)/gains
Decrease in value of investment properties
Profit on disposal of investment properties
Loss on disposal of fixed assets
Increase in value of trading investments
Decrease in value of other investments
Adjustment to interest rate derivative
Profit/(loss) for the year before taxation
Income tax (charge)/credit
Profit/(loss) for the year

Attributable to:
Equity holders of the Company
Non-controlling interest
Profit/(loss) for the year

Earnings per share
Loss per equity share - basic and diluted

NOTES

1

4
4

8

21
2
5

24

2021
£’000

 56,477 
(53,457)
 3,020 
 34 
(2,543)
 511 

(121)
(111)
 436 
(133)
 812 
–  
 130 
 1,524 
(698)
 826 

(152)
 978 
 826 

2020
£’000

 35,018 
(39,942)
(4,924)
 30 
(2,869)
(7,763)

 39 
(2,269)
–  
–  
 67 
(20)
(200)
(10,146)
 1,086 
(9,060)

(6,704)
(2,356)
(9,060)

7

(0.18)p

(7.86)p

Consolidated statement of comprehensive 
income
for the year ended 31 December 2021

Profit/(loss) for the year
Other comprehensive expense:
Items that may be subsequently recycled to the income statement:
Exchange differences on translation of Bisichi PLC foreign operations
Other comprehensive expense for the year net of tax
Total comprehensive income/(expense) for the year net of tax
Attributable to: 
Equity shareholders
Non–controlling interest
Total comprehensive income/(expense) for the year net of tax

36  London & Associated Properties PLC 2021

2021
£’000

 826 

(63)
(63)
 763 

(177)
 940 
 763 

2020
£’000

(9,060)

(464)
(464)
(9,524)

(6,866)
(2,658)
(9,524)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS

Consolidated balance sheet
at 31 December 2021

Non–current assets
Market value of properties attributable to Group
Present value of head leases
Property
Mining reserves, property, plant and equipment
Investments at fair value through profit and loss ("FVPL")

Current assets
Inventories - Property
Inventories - Mining
Assets held for sale
Trade and other receivables
Corporation tax recoverable
Investments in listed securities held at FVPL
Cash and cash equivalents

Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Interest rate derivatives
Current tax liabilities

Non–current liabilities
Borrowings
Interest rate derivatives
Lease liabilities
Provisions
Deferred tax liabilities

Total liabilities
Net assets
Equity attributable to the owners of the parent
Share capital
Share premium account
Translation reserve (Bisichi PLC)
Capital redemption reserve
  Retained earnings (excluding treasury shares)
  Treasury shares
Retained earnings 
Total equity attributable to equity shareholders
Non–controlling interest
Total equity

Net assets per share attributable to equity shareholders

NOTES

2021
£’000

2020
£’000

8
8

9
14

12
13
10
15

16

17
18
                19 

18
21
19
20
22

23

23

24

7

 37,945 
 3,221 
 41,166 
 9,917 
 3,631 
 54,714 

 25,213 
 1,253 
 504 
 9,917 
 19 
 685 
 8,518 
 46,109 
 100,823 

(15,197)
(31,405)
(513)
(70)
(726)
(47,911)

(7,259)
–  
(3,734)
(1,391)
(309)
(12,693)
(60,604)
 40,219 

 8,554 
 4,866 
(1,055)
 47 
 17,415 
(144)
 17,271 
 29,683 
 10,536 
 40,219 

 42,640 
 3,344 
 45,984 
 10,986 
 1,746 
 58,716 

 25,013 
 3,445 
–  
 8,190 
–  
 833 
 7,194 
 44,675 
 103,391 

(16,133)
(10,274)
(514)
–  
(209)
(27,130)

(30,853)
(200)
(3,865)
(1,442)
(355)
(36,715)
(63,845)
 39,546 

 8,554 
 4,866 
(1,030)
 47 
 17,567 
(144)
 17,423 
 29,860 
 9,686 
 39,546 

34.78p

34.99p

These financial statements were approved by the board of directors and authorised for issue on 28 April 2022 and signed on its behalf by:

Sir Michael Heller 
Director 

Jonathan Mintz 
Director 

Company Registration No. 341829 

London & Associated Properties PLC 2021 37

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS

Consolidated statement of changes in 
shareholders’ equity 
for the year ended 31 December 2021

SHARE 
CAPITAL 
£’000
 8,554 
–  

–  

–  

–  
–  

Balance at 1 January 2020
Loss for year
Other comprehensive expense:
Currency translation
Total other comprehensive 
expense
Total comprehensive 
expense
Transactions with owners:
Dividends – non–controlling 
interests
Transactions with owners 
Balance at 31 December 
2020
(Loss)/profit for year
Other comprehensive 
expense:
Currency translation
Total other comprehensive 
expense
Total comprehensive 
expense
Transactions with owners:
Dividends – non–controlling 
interests
Transactions with owners 
–  
Balance at 31 December 2021  8,554 

–  
 8,554 

–  
–  

–  

–  

–  

SHARE  
PREMIUM 
£’000
 4,866 
–  

TRANSLA-
TION 
RESERVES  
£’000
(868)
–  

CAPITAL 
REDEMP-
TION 
RESERVE 
£’000
 47 
–  

TREASURY  
SHARES 
£’000
(144)
–  

RETAINED  
EARNINGS 
EXCLUDING  
TREASURY  
SHARES 
£’000
 24,271 
(6,704)

TOTAL 
EXCLUDING 
NON– 
CON-
TROLLING 
INTERESTS 
£’000
 36,726 
(6,704)

NON– 
CON-
TROLLING 
INTERESTS 
£’000
 12,407 
(2,356)

TOTAL 
EQUITY 
£’000
 49,133 
(9,060)

–  
–  

–  

–  

(162)
(162)

(162)

–  

–  
–  

–  

–  

–  
–  

–  

–  

–  
–  

(162)
(162)

(302)
(302)

(464)
(464)

(6,704)

(6,866)

(2,658)

(9,524)

–  

–  

(63)

(63)

–  
 4,866 

–  
(1,030)

–  
 47 

–  
(144)

–  
 17,567 

–  
 29,860 

(63)
 9,686 

(63)
 39,546 

–  

–  
–  

–  

–  

–  

(25)
(25)

(25)

–  

–  

–  
–  

–  

–  

–  

(152)

(152)

 978 

 826 

–  
–  

–  

–  

–  
–  

(25)
(25)

(38)
(38)

(63)
(63)

(152)

(177)

 940 

 763 

–  

–  

(90)

(90)

–  
 4,866 

–  
(1,055)

–  
 47 

–  
(144)

–  
 17,415 

–  
 29,683 

(90)
 10,536 

(90)
 40,219 

38  London & Associated Properties PLC 2021

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS

Consolidated cash flow statement
for the year ended 31 December 2021

Operating activities
Profit/(loss) for the year before taxation
Finance income
Finance expense
Decrease in value of investment properties
Increase in value of trading investments
Adjustment to interest rate derivative
Profit on sale of invenstment properties
Depreciation
Loss on disposal of non-current assets
Development expenditure on inventories
Exchange adjustments
Change in inventories
Change in receivables
Change in payables
Cash generated from operations
Income tax paid
Cash inflows from operating activities
Investing activities
Acquisition of investment properties, mining reserves, plant and equipment
Sale of investment properties
Disposal of other investments
Acquisition of other investments
Interest received
Cash inflows/(outflows) from investing activities
Financing activities
Interest paid
Interest obligation under finance leases
Repayment of lease liabilities
Lease assignment costs paid
Receipt of bank loan - Bisichi PLC
Repayment of bank loan - Bisichi PLC
Repayment of bank loan - Dragon Retail Properties Ltd
Receipt of bank loan - London & Associated Properties PLC
Repayment of bank loan - London & Associated Properties PLC
Equity dividends paid - non-controlling interests
Cash outflows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange adjustment
Cash and cash equivalents at end of year

The cash flows above relate to continuing operations.

NOTES 

 4
 4
 8

 21

9

12

2021 
£’000

 1,524 
(34)
 2,543 
 111 
(812)
(130)
(436)
 2,815 
 133 
(1,016)
 121 
 2,921 
(1,813)
(107)
 5,820 
(216)
 5,604 

(1,871)
 4,219 
 705 
(1,630)
 34 
 1,457 

(2,621)
(199)
(235)
(101)
 46 
(317)
(21)
 522 
(606)
–  
(3,532)
 3,529 
 2,348 
 105 
 5,982 

2020   
£’000

(10,146)
(30)
 2,869 
 2,269 
(47)
 200 
–  
 2,455 
–  
(398)
(39)
 1,173 
(380)
 3,717 
 1,643 
(198)
 1,445 

(3,515)
–  
 253 
(1,379)
 30 
(4,611)

(2,675)
(178)
(231)
–  
 61 
(200)
–  
 105 
(169)
(63)
(3,350)
(6,516)
 8,691 
 173 
 2,348 

Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise the following balance sheet amounts:

Cash and cash equivalents (before bank overdrafts)
Bank overdrafts
Cash and cash equivalents at end of year

2021 
£’000
 8,518 
(2,536)
 5,982 

2020 
£’000
 7,194 
(4,846)
 2,348 

18 

£1,000,000 of cash deposits at 31 December 2021 were charged as security to bank loans (2020: £nil).

London & Associated Properties PLC 2021 39

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group accounting policies

FINANCIAL STATEMENTS

Group accounting policies

The following are the principal Group accounting policies:

BASIS OF ACCOUNTING
The Group financial statements are prepared in accordance with UK 
adopted international accounting standards and the requirements of 
the Companies Act 2006 and are additionally required under the 
Disclosure Guidance and Transparency Rules of the Financial 
Conduct Authority to prepare the group financial statements in 
accordance with international financial reporting standards adopted 
pursuant to Regulation (EC) No 1606/2002 as it applies in the 
European Union. The consolidated financial statements transitioned 
to UK-adopted international accounting standards for the financial 
period beginning 1 January 2021. There was no impact or change in 
accounting policies from the transition. UK adopted International 
Accounting Standards differs in certain respects from International 
Financial Reporting Standards as adopted by the EU. The differences 
have no material impact on the Financial Statements for the periods 
presented, which therefore also comply with International Reporting 
Standards as adopted by the EU.

The directors have elected under company law to prepare the 
company financial statements in accordance with United Kingdom 
Generally Accepted Accounting Practice (United Kingdom Accounting 
Standards and applicable law) and these are presented in Note 30.

The financial statements are prepared under the historical cost 
convention, except for the revaluation of freehold and leasehold 
properties and financial assets at fair value through profit and loss as 
well as fair value of interest rate derivatives at fair value.

The Group financial statements are presented in Pounds Sterling 
and all values are rounded to the nearest thousand pounds (£’000) 
except when otherwise stated.

The functional currency for each entity in the Group is the currency 
of the country in which the entity has been incorporated. Details of 
the country in which each entity has been incorporated can be 
found in note 11.

The exchange rates used in the accounts were as follows:

£1 STERLING: RAND

£1 STERLING: DOLLAR

Year-end rate
Annual average

2021
20.7672
20.4060

2020 
20.0145
21.0936

2021 
1.3706
1.3685

2020 
1.3663
1.2833

London & Associated Properties PLC (“LAP”), the parent company, is 
a public limited company incorporated and domiciled in England and 
quoted on the London Stock Exchange. The Company registration 
number is 341829. LAP and its subsidiaries (“the Group”) consist of 
LAP, all of its subsidiary undertakings, including Bisichi PLC (“Bisichi”) 
and Dragon Retail Properties Limited (“Dragon”). The Group without 
Bisichi and Dragon is referred to as LAP Group.

GOING CONCERN
In reviewing going concern it is necessary to consider separately the 
position of LAP Group and Bisichi. Although both are consolidated 
into group accounts (as required by IFRS 10), they are managed 
independently and in the unlikely event that Bisichi was unable to 
continue trading this would not affect the ability of LAP Group to 
continue operating as a going concern. The same would be true for 
Bisichi in reverse.

40  London & Associated Properties PLC 2021

The directors have reviewed the cash flow forecasts of the LAP 
Group and the underlying assumptions on which they are based for 
the 15 months from the date of signing. The LAP Group’s business 
activities, together with the factors likely to affect its future 
development, are set out in the Chairman and Chief Executive’s 
Statement and Financial Review. In addition, Note 21 to the 
financial statements sets out the Group’s objectives, policies and 
processes for managing its capital; its financial risk management 
objectives; details of its financial instruments and hedging activities; 
and its exposure to credit risk and liquidity risk.

As our tenants return to more normalised trading conditions 
following the lifting of all restrictions imposed in response to the 
pandemic, we do not consider uncertainty arising as a result of the 
pandemic to be an ongoing going concern matter. Tenant arrears 
increased as a result of the pandemic but this effect is not ongoing.

There are two significant loans which expire in 2022, the potential 
outcomes of which the directors have examined in detail when 
considering going concern. The directors have also considered the 
debt covenants on existing loans and the effects that a wide range 
of property valuation movements would have on these and the 
Group’s ability to mitigate these effects. Debt refinancing in 2022 is 
the key going concern issue.

Subsequent to year end in the first quarter of 2022 geo-political 
events in Ukraine resulted in higher global energy prices. Although 
the final outcome of the events in Ukraine is uncertain, the 
Directors at present do not foresee the events having a significant 
negative impact on the Group’s UK and South African operations’ 
ability to remain in operation for the foreseeable future. 

Debt Refinancing
The £10 million, 8.109% Aviva debenture expires in August 2022. 
Based on 31 December 2021 external valuations of the security held 
against this debenture, this has a loan to value of 58.9%. The security 
for this loan consists of a mix of industrial and community retail 
property. We are currently sourcing a new loan secured by these 
properties and other unencumbered properties held by the company 
and expect to conclude this in good time to repay the Aviva debenture 
in full and achieve significant ongoing debt service cost savings.

The £13.3 million, 5.95% + SONIA (with 1% to 1.5% collar), 
Phoenix CRE S.à r.l. term loan expires in September 2022, and is 
secured against the Orchard Square, Sheffield property, currently 
valued by the bank at £19.0 million, with a loan to value of 69.9%. 
Orchard Square, Sheffield is a development property with a number 
of value enhancing opportunities that we continue to explore prior 
to a sale. The loan has a one-year extension, which we will look to 
take up in order that development activities can be progressed and 
the value of the property optimised prior to a sale. Should a valuation 
by the bank result in an LTV breach then we consider there to be 
sufficient resources within the Group to cure this. Should the directors 
decide not to cure any breach then the property would be sold and 
the equity remaining after the repayment of the loan remitted to 
the Group. The directors do not consider that this would present a 
going concern risk to the Group based on likely cashflow effects.

Dragon has a £1.16 million 2.75% + bank base rate Santander term 
loan that expires in April 2022. An offer has been received from a 
new lender to refinance this loan in full, the particulars of which are 
being considered currently. Santander has offered an extension to 
the existing loan, should it be required, to enable a smooth 
transition to the new lender.

Group accounting policies

FINANCIAL STATEMENTS Group accounting policies

Broadway Regen has a £3.2 million 7.0% development loan expiring in 
April 2022. This is a residential development which is expected to have 
strong returns. An offer for a new loan has been received from a new 
lender at an improved debt cost and is expected to be in place in time to 
refinance the existing loan.

Bisichi PLC
The directors note the consideration of going concern by the Bisichi 
board, but also note that any failure of Bisichi would not itself impact on 
the going concern status of the LAP group for the reasons set out on 
page 8 of the financial statements.

The directors believe that the LAP Group has adequate resources to 
continue in operational existence for the foreseeable future and that the 
LAP Group is well placed to manage its business risks. Thus they 
continue to adopt the going concern basis of accounting in preparing 
the annual financial statements.

The Bisichi directors continue to adopt the going concern basis of 
accounting in preparing the Bisichi annual financial statements.

INTERNATIONAL FINANCIAL REPORTING 
STANDARDS (IFRS)
The Group has adopted all of the new and revised Standards and 
Interpretations issued by the International Accounting Standards 
Board (“IASB”) that are relevant to its operations and effective for 
accounting periods beginning 1 January 2021. 

The Group has not adopted any Standards or Interpretations in 
advance of the required implementation dates.

Certain new accounting standards and amendments are effective 
for annual periods beginning after 1 January 2021, and have not 
been applied in preparing these Financial Statements:

•   Amendments to IFRS 3 Business Combinations Reference to the 

Conceptual Framework 

•   Amendments to IAS 16 Property, Plant and Equipment - Proceeds 

before Intended Use

•   Amendments to IAS 37 Provisions, Contingent Liabilities, 

Contingent Assets Onerous Contracts – Cost of Fulfilling a 
Contract

The amendments that are not yet effective are not expected to 
have a material impact on the Group in the current or future 
reporting periods and on the foreseeable future transactions.

We are committed to improving disclosure and transparency and 
will continue to work with our different stakeholders to ensure they 
understand the detail of these accounting changes. We continue to 
remain committed to a robust financial policy.

KEY JUDGEMENTS AND ESTIMATES
The preparation of the financial statements requires management to 
make assumptions and estimates that may affect the reported 
amounts of assets and liabilities and the reported income and 
expenses, further details of which are set out below. Although 
management believes that the assumptions and estimates used are 
reasonable, the actual results may differ from those estimates. 
Further details of the estimates and judgements which may have a 
material impact on next year’s financial statements are contained in 
the Directors’ Report.

PROPERTY OPERATIONS
Fair value measurements of investment properties
An assessment of the fair value of these assets is undertaken 
annually. The fair value measurements are estimated based on the 
amounts for which the assets and liabilities could be exchanged 
between market participants. To the extent possible, the 
assumptions and inputs used take into account externally verifiable 
inputs. However, such information is by nature subject to 
uncertainty and is discussed further in the Directors’ Report and 
shown in note 8.

Inventories - Property
When the Group begins to redevelop an existing investment 
property with a view to sale, the property is transferred to inventory 
and held as a current asset. The property is re-measured to fair 
value as at the date of the transfer with any gain or loss being taken 
to the income statement. The re-measured amount becomes the 
deemed cost at which the property is then carried in trading 
properties plus any costs for asset management initiatives or 
development in preparation for sale and subject to any provision 
required to reduce cost to net realisable value.

In assessing the net realisable value of a property development, the 
directors make significant estimates and judgements regarding, inter 
alia, forecast sales and costs per square foot, gross internal area, 
affordable housing allocations and appropriate rates of financing. 
The degree to which these variables can be accurately forecast will 
depend on the stage of development of the particular project and 
the impact of changes in these assumptions to the net realisable 
value could be material. Further detail is included in note 12.

TRADE DEBTORS
An estimate of lifetime expected credit losses under IFRS 9 using 
the simplified approach has been made by the Directors considering 
historic trade debtor recoveries, specific knowledge of individual 
debtors and forward looking macro-economic factors. Further detail 
is included in note 21.

MINING OPERATIONS
Life of mine and reserves
The directors of Bisichi consider their judgements and estimates 
surrounding the life of the mine and its reserves to have significant 
effect on the amounts recognised in the financial statements and to 
be an area where the financial statements are subject to significant 
estimation uncertainty. The life of mine remaining is currently 
estimated at 8 years. This life of mine is based on the group’s 
existing coal reserves including reserves acquired but subject to 
regulatory approval. The life of mine excludes future coal purchases 
and coal reserve acquisitions. The group’s estimates of proven and 
probable reserves are prepared utilising the South African code for 
the reporting of exploration results, mineral resources and mineral 
reserves (the SAMREC code) and are subject to assessment by an 
independent Competent Person experienced in the field of coal 
geology and specifically opencast and pillar coal extraction. 
Estimates of coal reserves impact assessments of the carrying value 
of property, plant and equipment, depreciation calculations and 
rehabilitation and decommissioning provisions. There are numerous 
uncertainties inherent in estimating coal reserves and changes to 
these assumptions may result in restatement of reserves. These 
assumptions include geotechnical factors as well as economic 
factors such as commodity prices, production costs and yield.

London & Associated Properties PLC 2021 41

FINANCIAL STATEMENTS Group accounting policies

DEPRECIATION, AMORTISATION OF MINERAL 
RIGHTS, MINING DEVELOPMENT COSTS AND 
PLANT & EQUIPMENT
The annual depreciation/amortisation charge is dependent on 
estimates, including coal reserves and the related life of the mine, 
expected development expenditure for probable reserves, the 
allocation of certain assets to relevant ore reserves and estimates of 
residual values of the processing plant. The charge can fluctuate 
when there are significant changes in any of the factors or 
assumptions used, such as estimating mineral reserves which in turn 
affects the life of mine or the expected life of reserves. Estimates of 
proven and probable reserves are prepared by an independent 
Competent Person. Assessments of depreciation/amortisation rates 
against the estimated reserve base are performed regularly. Details 
of the depreciation/amortisation charge can be found in note 9.

BASIS OF CONSOLIDATION
TThe Group accounts incorporate the accounts of LAP and all of its 
subsidiary undertakings, together with the Group’s share of the 
results and net assets of its joint ventures. 

Non–controlling interests in subsidiaries are presented separately 
from the equity attributable to equity owners of the parent 
company. When changes in ownership in a subsidiary do not result 
in a loss of control, the non–controlling shareholders’ interests are 
initially measured at the non–controlling interests’ proportionate 
share of the subsidiaries’ net assets. Subsequent to this, the carrying 
amount of non–controlling interests is the amount of those interests 
at initial recognition plus the non–controlling interests’ share of 
subsequent changes in equity. Total comprehensive income is 
attributed to non–controlling interests even if this results in the 
non–controlling interests having a deficit balance.

PROVISION FOR MINING REHABILITATION 
INCLUDING RESTORATION AND DE-
COMMISSIONING COSTS 
A provision for future rehabilitation including restoration and 
decommissioning costs requires estimates and assumptions to be 
made around the relevant regulatory framework, the timing, extent 
and costs of the rehabilitation activities and of the risk free rates 
used to determine the present value of the future cash outflows. 
The provisions, including the estimates and assumptions contained 
therein, are reviewed regularly by management. The Group engages 
an independent expert to assess the cost of restoration and 
decommissioning annually as part of management’s assessment of 
the provision. Details of the provision for mining rehabilitation can 
be found in note 20. 

MINING IMPAIRMENT 
Property, plant and equipment representing the Group’s mining 
assets in South Africa are reviewed for impairment at each reporting 
date. The impairment test is performed using the approved Life of 
Mine plan and those future cash flow estimates are discounted 
using asset specific discount rates and are based on expectations 
about future operations. The impairment test requires estimates 
about production and sales volumes, commodity prices, proven and 
probable reserves (as assessed by the Competent Person), operating 
costs and capital expenditures necessary to extract reserves in the 
approved Life of Mine plan. Changes in such estimates could impact 
recoverable values of these assets. Details of the carrying value of 
property, plant and equipment can be found in note 9. 

The impairment test indicated significant headroom as at 31 
December 2021 and therefore no impairment is considered 
appropriate. The key assumptions include: coal prices, including 
domestic coal prices based on recent pricing and assessment of 
market forecasts for export coal; production based on proven and 
probable reserves assessed by the independent Competent Person 
and yields associated with mining areas based on assessments by 
the Competent Person and empirical data. A 10% reduction in 
average forecast coal prices or a 14% reduction in yield would give 
rise to a breakeven scenario. However, the Bisichi directors consider 
the forecasted yield levels and pricing to be appropriate and 
supportable best estimates.

SUBSIDIARIES
Subsidiaries are entities controlled by the Group. The Group controls 
an entity when it is exposed to, or has rights to, variable returns from 
its involvement with the entity and has the ability to affect those 
returns through its power over the entity. Subsidiaries acquired 
during the year are consolidated using the acquisition method. Their 
results are incorporated from the date that control passes. 

All intra Group transactions, balances, income and expenses are 
eliminated on consolidation. Details of the Group’s subsidiary 
companies are set out in Note 11.

The directors are required to consider the implications of IFRS 10 
on the LAP investment in Bisichi PLC (“Bisichi”). Related parties also 
have shareholdings in Bisichi. When combined with the 42% held by 
LAP and, taking account of the wide disposition of other 
shareholders, there is potential for LAP and these related parties to 
exercise voting control over Bisichi. IFRS 10 makes it clear that 
possible voting control is of more significance than actual 
management control. 

For this reason the directors have concluded that there is a 
requirement to consolidate Bisichi with LAP. While, in theory, they 
could achieve control, in practice they do not get involved in the day 
to day operations of Bisichi. The directors have presented 
consolidated accounts using the published accounts of Bisichi but it 
is important to note that any figures, risks and assumptions 
attributable to that company are the responsibility of the Bisichi 
Board of directors.

As a result of treating Bisichi as a subsidiary, Dragon Retail Properties 
Limited, West Ealing Projects Limited and Development Physics 
Limited are also subsidiaries for accounting purposes, as LAP and 
Bisichi’s combined ownership in these entities exceeds 50%.

GOODWILL
Goodwill arising on acquisition is recognised as an intangible asset 
and initially measured at cost, being the excess of the cost of the 
acquired entity over the Group’s interest in the fair value of the 
assets and liabilities acquired. Goodwill is carried at cost less 
accumulated impairment losses. Goodwill arising from the difference 
in the calculation of deferred tax for accounting purposes and fair 
value in negotiations is judged not to be an asset and is accordingly 
impaired on completion of the relevant acquisition. 

REVENUE
The Group’s revenue from contracts with customers, as defined 
under IFRS 15, includes sales of coal and property income from 
rents, service charge and management fees.

42  London & Associated Properties PLC 2021

FINANCIAL STATEMENTS Group accounting policies

Rental income
Rental income arises from properties where leases have granted 
tenants a right of occupation and use of the properties. Rental 
income and lease incentives are recognised in accordance with IFRS 
16 Leases. Rental income from investment property is recognised as 
revenue on a straight-line basis over the lease term. Lease 
incentives and costs associated with entering into tenant leases are 
amortised over the lease term. Rent reviews are recognised when 
such reviews have been agreed with tenants.

Changes in the scope or the consideration for a lease, that was not 
part of the original terms and conditions, which might arise as a 
result of lease concessions, are accounted as a lease modification. 
Lease modifications are accounted for as a new lease from the 
effective date of the modification, considering any prepaid or 
accrued lease payments relating to the original lease as part of the 
lease payments for the new lease.

Service charge income
Service charge income, property fee income and management fees 
are recognised in accordance with IFRS 15 Revenue from contracts 
with customers, which prescribes accounting nor taxable profit the 
use of a five-step model for the recognition of revenue. These 
income streams are recognised as revenue in the period in which 
they are earned.

Reverse surrender premiums
Payments received from tenants to surrender their lease obligations 
are recognised immediately in the income statement.

Dilapidations
Dilapidations monies received from tenants in respect of their lease 
obligations are recognised immediately in the income statement.

Other revenue
Revenue in respect of listed investments held for trading represents 
investment dividends received and profit or loss recognised on 
realisation. Dividends are recognised in the income statement when 
the dividend is received. 

PROPERTY OPERATING EXPENSES
Operating expenses are expensed as incurred and any property 
operating expenditure not recovered from tenants through service 
charges is charged to the income statement. 

EMPLOYEE BENEFITS
Share based remuneration 
The Group operates a long–term incentive plan and two share 
option schemes. The fair value of the conditional awards on shares 
granted under the long–term incentive plan and the options granted 
under the share option scheme is determined at the date of grant. 
This fair value is then expensed on a straight–line basis over the 
vesting period, based on an estimate of the number of shares that 
will eventually vest. At each reporting date, the fair value of the 
non–market based performance criteria of the long–term incentive 
plan is recalculated and the expense is revised. In respect of the 
share option scheme, the fair value of options granted is calculated 
using the binomial method.

PENSIONS
The Company operates a defined contribution pension scheme. The 
contributions payable to the scheme are expensed in the period to 
which they relate. 

FOREIGN CURRENCIES
Monetary assets and liabilities are translated at year end exchange 
rates and the resulting exchange rate differences are included in the 
consolidated income statement within the results of operating activities 
if arising from trading activities, including inter-company trading 
balances and within finance cost / income if arising from financing.

For consolidation purposes, income and expense items are included 
in the consolidated income statement at average rates, and assets 
and liabilities are translated at year end exchange rates. Translation 
differences arising on consolidation are recognised in other 
comprehensive income. Foreign exchange differences on 
intercompany loans are recorded in other comprehensive income 
when the loans are not considered trading balances and are not 
expected to be repaid in the foreseeable future. Where foreign 
operations are sold or closed, the cumulative exchange differences 
attributable to that foreign operation are recognised in the consolidated 
income statement when the gain or loss on disposal is recognised. 

Transactions in foreign currencies are translated at the exchange 
rate ruling on transaction date. 

FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised in the Group’s 
consolidated statement of financial position when the group 
becomes a party to the contractual provisions of the instrument. 

Financial assets
Financial assets are classified as either financial assets at amortised 
cost, at fair value through other comprehensive income (“FVTOCI”) 
or at fair value through profit or loss (“FVPL”) depending upon the 
business model for managing the financial assets and the nature of 
the contractual cash flow characteristics of the financial asset. 

A loss allowance for expected credit losses is determined for all 
financial assets, other than those at FVPL, at the end of each 
reporting period. The Group applies a simplified approach to 
measure the credit loss allowance for trade receivables using the 
lifetime expected credit loss provision. The lifetime expected credit 
loss is evaluated for each trade receivable taking into account 
payment history, payments made subsequent to year end and prior 
to reporting, past default experience and the impact of any other 
relevant and current observable data. The group applies a general 
approach on all other receivables classified as financial assets. The 
general approach recognises lifetime expected credit losses when 
there has been a significant increase in credit risk since initial recognition.

The Group no longer recognises a financial asset when the 
contractual rights to the cash flows from the asset expire, or when it 
transfers the financial asset and substantially all the risks and 
rewards of ownership of the asset to another party. The Group does 
not recognise financial liabilities when the Group’s obligations are 
discharged, cancelled, or have expired.

Investments
Current financial asset investments and other investments classified 
as non-current (“The investments”) comprise shares in listed 
companies. The investments are measured at fair value. Any 
changes in fair value are recognised in the consolidated income 
statement and accumulated in retained earnings. 

Trade and other receivables
Trade receivables are recorded at amortised cost. As the interest 
that would be recognised from discounting future cash payments 
over the short payment period is not considered to be material, 
trade receivables which do not carry any interest are stated at their 
nominal value as reduced by credit loss allowances for estimated 
recoverable amounts.

London & Associated Properties PLC 2021 43

FINANCIAL STATEMENTS Group accounting policies

Trade and other payables
Trade and other payables are non-interest bearing and are stated at 
their nominal value, as the interest that would be recognised from 
discounting future cash payments over the short payment period is 
not considered to be material.

Bank loans and overdrafts
Bank loans and overdrafts are included as financial liabilities on the 
Group balance sheet net of the unamortised costs of issue. The cost 
of issue is recognised in the consolidated income statement over 
the life of the bank loan. Interest payable on those facilities is 
expensed as a finance cost in the period to which it relates.

Debenture loans
The debenture loan is included as a financial liability on the balance 
sheet net of the unamortised costs on issue. The cost of issue is 
recognised in the consolidated income statement over the life of the 
debenture. Interest payable to debenture holders is expensed in the 
period to which it relates. 

Leases
At inception, the Group assesses whether a contract is or contains a 
lease. This assessment involves the exercise of judgement about 
whether the Group obtains substantially all the economic benefits from 
the use of that asset, and whether the Group has the right to direct the 
use of the asset. The Group recognises a right-of-use (“ROU”) asset and 
the lease liability at the commencement date of the lease.

Lease liabilities include the present value of payments which generally 
include fixed payments and variable payments that depend on an index 
(such as an inflation index). Each lease payment is allocated between the 
liability and finance cost. The lease payments are discounted using the 
interest rate implicit in the lease if that rate can be readily determined or 
if not, the incremental borrowing rate is used. The finance cost is 
charged to profit or loss over the lease period so as to produce a 
constant rate of interest on the remaining balance of the liability for each 
period. In the cashflow statement the principal and interest portions of 
the lease payments are classified within financing activities.

The ROU asset is measured at a cost based on the amount of the initial 
measurement of the lease liability, plus initial direct costs and the cost of 
obligations to refurbish the asset, less any incentives received. The ROU 
asset (other than the ROU assets that relate to land or property that 
meets the definition of investment property under IAS 40) is depreciated 
over the shorter of the lease term or the useful life of the underlying 
asset. The ROU asset is subject to testing for impairment if there is an 
indicator of impairment. ROU assets are included in the heading 
Property, plant and equipment, and the lease liability is included in the 
headings current and non-current lease labilities on the Balance Sheet

Lease liabilities arise for those investment properties held under a 
leasehold interest and recorded as investment property. The liability 
is calculated as the present value of the minimum lease payments, 
reducing in subsequent reporting periods by the apportionment of 
payments to the lessor. Lease payments are allocated between the 
liability and finance charges to achieve a constant financing rate. 
Contingent rents payable, such as rent reviews or those related to 
rental income, are charged as an expense in the period in which they 
are incurred. 

The Group has elected not to recognise ROU assets and liabilities for 
leases where the total lease term is less than or equal to 12 months, or 
for low value leases under £10,000. The payments for such leases are 
recognised in the Income Statement on a straight-line basis over the 
lease term.

44  London & Associated Properties PLC 2021

Interest rate derivatives
The Group uses derivative financial instruments to hedge the 
interest rate risk associated with the financing of the Group’s 
business. No trading in such financial instruments is undertaken. At 
each reporting date, these interest rate derivatives are recognised at 
their fair value to the business, being the Net Present Value of the 
difference between the hedged rate of interest and the market rate 
of interest for the remaining period of the hedge. 

Ordinary shares
Shares are classified as equity when there is no obligation to 
transfer cash or other assets. Incremental costs directly attributable 
to the issue of new shares are shown in equity as a deduction, net 
of tax, from the proceeds.

Treasury shares 
When the Group’s own equity instruments are repurchased, 
consideration paid is deducted from equity as treasury shares until 
they are cancelled. When such shares are subsequently sold or 
reissued, any consideration received is included in equity. 

INVESTMENT PROPERTIES
Valuation
Investment properties are those that are held either to earn rental 
income or for capital appreciation or both, including those that are 
undergoing redevelopment for future use as an investment 
property. They are reported on the Group balance sheet at fair 
value, being the amount for which an investment property could be 
exchanged between knowledgeable and willing parties in an arm’s 
length transaction. The directors’ property valuation is at fair value. 

The external valuation of properties is undertaken by independent 
valuers who hold recognised and relevant professional qualifications 
and have recent experience in the locations and categories of 
properties being valued. Surpluses or deficits resulting from changes 
in the fair value of investment properties are reported in the Group 
income statement in the period in which they arise.

The Group owns a number of properties on long term and short-
term leaseholds. These are leased out to tenants under operating 
leases, are classified as investment properties or development 
properties as appropriate and included in the balance sheet at fair 
value. The obligation to the freeholder or superior leaseholder for 
the buildings element of the leasehold is included in the balance 
sheet at the present value of the minimum lease payments at inception.

Capital expenditure 
Investment properties are measured initially at cost, including 
related transaction costs. Additional expenditure of a capital nature, 
directly attributable to the redevelopment or refurbishment of an 
investment property held for future use as an investment property, 
up to the point of it being completed for its intended use, is 
capitalised in the carrying value of that property. Where there is a 
change of use, such as commencement of development with a view 
to sale, the property is transferred to inventory at deemed cost, 
which is its fair value on the date of the change in use. Capitalised 
interest is calculated with reference to the actual rate payable on 
borrowings for development purposes, or for that part of the 
development costs financed out of borrowings the capitalised 
interest is calculated on the basis of the average rate of interest paid 
on the relevant debt outstanding. 

Disposal 
The disposal of investment properties is recorded on completion of 
the contract. On disposal, any gain or loss is calculated as the 
difference between the net disposal proceeds and the valuation at the 
last year end plus subsequent capitalised expenditure in the period. 

Depreciation and amortisation
In applying the fair value model to the measurement of investment 
properties, depreciation and amortisation are not provided. 

FINANCIAL STATEMENTS Group accounting policies

OTHER ASSETS AND DEPRECIATION
OTHER ASSETS AND DEPRECIATION

The cost, less estimated residual value, of other property, plant and 
equipment is written off on a straight–line basis over the asset’s 
expected useful life. Residual values and useful lives are reviewed, 
and adjusted if appropriate, at each balance sheet date. Changes to 
the estimated residual values or useful lives are accounted for 
prospectively. The depreciation rates generally applied are: 

Motor vehicles
Office equipment

25–33 per cent per annum
10–33 per cent per annum

ASSETS HELD FOR SALE
Non-current assets are classified as held-for-sale if it is highly 
probable that they will be recovered primarily through sale rather 
than through continuing use. Such assets are generally measured at 
the lower of their carrying amount and fair value less costs of sale. 
Impairment losses on initial classification as assets held-for-sale and 
subsequent gains and losses on remeasurement are recognised in 
profit or loss. Once classified as held-for-sale, intangible assets and 
property, plant and equipment are no longer amortised or 
depreciated, and any equity-accounted investment is no longer 
equity accounted.

INVENTORIES–PROPERTY
PProperties held as trading inventory are those which are being 
developed with a view to sale. Inventories are recorded at the lower 
of cost and net realisable value. If the net realisable value of 
inventory is lower than its carrying value, an impairment loss is 
recorded in the income statement. If, in subsequent periods, the net 
realisable value of inventory that was previously impaired increases 
above its carrying value, the impairment is reversed to align the 
carrying value of the property with the net realisable value. 
Inventory is presented on the balance sheet within current assets.

INCOME TAXES
The charge for current taxation is based on the results for the year 
as adjusted for disallowed or non–assessable items. Tax payable 
upon realisation of revaluation gains recognised in prior periods is 
recorded as a current tax charge with a release of the associated 
deferred tax. Deferred tax is the tax expected to be payable or 
recoverable on differences between the carrying amounts of assets 
and liabilities in the financial statements and the corresponding tax 
bases used in the tax computations and is recorded using the 
balance sheet liability method. Deferred tax liabilities are generally 
recognised for all taxable temporary differences and deferred tax 
assets are recognised to the extent that it is probable that taxable 
profits will be available against which deductible temporary 
differences can be utilised. In respect of the deferred tax on the 
revaluation surplus, this is calculated on the basis of the chargeable 
gains that would crystallise on the sale of the investment portfolio 
as at the reporting date. The calculation takes account of indexation 
on the historic cost of properties and any available capital losses. 
Deferred tax is calculated at the tax rates that are expected to apply 
in the period when the liability is settled or the asset is realised. 
Deferred tax is charged or credited in the Group income statement, 
except when it relates to items charged or credited directly to 
equity, in which case it is also dealt with in equity. 

DIVIDENDS
Dividends payable on the ordinary share capital are recognised as a 
liability in the period in which they are approved.

CASH AND CASH EQUIVALENTS
Cash comprises cash in hand and on-demand deposits. Cash and 
cash equivalents comprise short-term, highly liquid investments that 
are readily convertible to known amounts of cash and which are 
subject to an insignificant risk of changes in value and original 
maturities of three months or less. 

The cash and cash equivalents shown in the cashflow statement are 
stated net of bank overdrafts that are repayable on demand in accordance 
with IAS 7. This includes the structured trade finance facility held in 
South Africa as detailed in note 21. These facilities are considered 
to form an integral part of the treasury management of the Group 
and can fluctuate from positive to negative balances during the period.

BISICHI PLC
Mining revenue
Coal revenue is derived principally from export revenue and 
domestic revenue. 

Both export revenue and domestic revenue is recognised when the 
customer has a legally binding obligation to settle under the terms 
of the contract when the performance obligations have been 
satisfied, which is once control of the goods has transferred to the 
buyer at the delivery point. For export revenue this is generally 
recognised when the product is delivered to the export terminal 
location specified in the customer contract, at which point control of 
the goods have been transferred to the customer. For domestic coal 
revenues this is generally recognised on collection by the customer 
from the mine or from the mine’s rail siding when loaded into 
transport, where the customer pays the transportation costs. 
Fulfilment costs to satisfy the performance obligations of coal 
revenues such as transport and loading costs borne by the Group 
from the mine to the delivery point are recoded in operating costs.  

Coal revenue is measured based on consideration specified in the 
contract with a customer on a per metric tonne basis. Both export 
and domestic contracts are typically on a specified coal volume basis 
and less than a year in duration. Export contracts are typically linked 
to the price of Free on Board (FOB) Coal from Richards Bay Coal 
Terminal (API4 price). Domestic contracts are typically linked to a 
contractual price agreed. 

Mining costs
Expenditure is recognised in respect of goods and services received. 
Where coal is purchased from third parties at point of extraction the 
expenditure is only recognised when the coal is extracted and all of 
the significant risks and rewards of ownership have been transferred.

Mining reserves, plant and equipment
The cost of property, plant and equipment comprises its purchase 
price and any costs directly attributable to bringing the asset to the 
location and condition necessary for it to be capable of operating in 
accordance with agreed specifications. Freehold land is not 
depreciated. Other property, plant and equipment is stated at 
historical cost less accumulated depreciation. The cost recognised 
includes the recognition of any decommissioning assets related to 
property, plant and equipment.

Heavy surface mining and other plant and equipment is depreciated 
at varying rates depending upon its expected usage. The depreciation 
rates generally applied are between 5-10 per cent per annum, but 
limited to the shorter of its useful life or the life of the mine. 

Other non–current assets, comprising motor vehicles and office 
equipment, are depreciated at a rate of between 10% and 33% per 
annum which is calculated to write off the cost, less estimated 
residual value of the assets, on a straight line basis over their 
expected useful lives. 

London & Associated Properties PLC 2021 45

FINANCIAL STATEMENTS Group accounting policies

Mine inventories
Inventories are stated at the lower of cost and net realisable value. 
Cost includes materials, direct labour and overheads relevant to the 
stage of production. Cost is determined using the weighted average 
method. Net realisable value is based on estimated selling price less 
all further costs to completion and all relevant marketing, selling and 
distribution costs. 

Mine provisions
Provisions are recognised when the Group has a present obligation 
as a result of a past event which it is probable will result in an 
outflow of economic benefits that can be reliably estimated.

A provision for rehabilitation of the mine is initially recorded at 
present value and the discounting effect is unwound over time as  
a finance cost. Changes to the provision as a result of changes in 
estimates are recorded as an increase/decrease in the provision and 
associated decommissioning asset. The decommissioning asset is 
depreciated in line with the Group’s depreciation policy over the life 
of mine. The provision includes the restoration of the underground, 
opencast, surface operations and de-commissioning of plant and 
equipment. The timing and final cost of the rehabilitation is 
uncertain and will depend on the duration of the mine life and  
the quantities of coal extracted from the reserves. 

Mine impairment
Whenever events or changes in circumstance indicate that the 
carrying amount of an asset may not be recoverable that asset is 
reviewed for impairment. This includes mining reserves, plant and 
equipment and net investments in joint ventures. A review involves 
determining whether the carrying amounts are in excess of the 
recoverable amounts. 

An asset’s recoverable amount is determined as the higher of its fair 
value less costs of disposal and its value in use. Such reviews are 
undertaken on an asset-by-asset basis, except where assets do not 
generate cash flows independent of other assets, in which case the 
review is undertaken on a company or Group level.

If the carrying amount of an asset exceeds its recoverable amount 
the carrying value is written down to its estimated recoverable 
amount (being the higher of the fair value less cost to sell and value 
in use). Any change in carrying value is recognised in the 
comprehensive income statement.

Mine reserves and development cost
The purpose of mine development is to establish secure working 
conditions and infrastructure to allow the safe and efficient 
extraction of recoverable reserves. Depreciation on mine 
development is not charged until production commences or the 
assets are put to use. On commencement of full commercial 
production, depreciation is charged over the life of the associated 
mine reserves extractable using the asset on a unit of production 
basis. The unit of production calculation is based on tonnes mined 
as a ratio to proven and probable reserves and also includes future 
forecast capital expenditure. The cost recognised includes the 
recognition of any decommissioning assets related to mine 
development.

Post production stripping
In surface mining operations, the Group may find it necessary to 
remove waste materials to gain access to coal reserves prior to and 
after production commences. Prior to production commencing, 
stripping costs are capitalised until the point where the overburden 
has been removed and access to the coal seam commences. 
Subsequent to production, waste stripping continues as part of the 
extraction process as a run of mine activity. There are two benefits 
accruing to the Group from stripping activity during the production 
phase: extraction of coal that can be used to produce inventory and 
improved access to further quantities of material that will be mined 
in future periods. Economic coal extracted is accounted for as 
inventory. The production stripping costs relating to improved 
access to further quantities in future periods are capitalised as a 
stripping activity asset, if and only if, all of the following are met:

•   it is probable that the future economic benefit associated with 

the stripping activity will flow to the Group;

•   the Group can identify the component of the ore body for which 

access has been improved; and

•   the costs relating to the stripping activity associated with that 

component or components can be measured reliably.

In determining the relevant component of the coal reserve for which 
access is improved, the Group separates its mine into geographically 
distinct sections or phases to which the stripping activities being 
undertaken within that component are allocated. Such phases are 
determined based on assessment of factors such as geology and 
mine planning.

The Group depreciates deferred costs capitalised as stripping assets 
on a unit of production method, with reference to the tons mined 
and reserve of the relevant ore body component or phase.

SEGMENTAL REPORTING
For management reporting purposes, the Group is organised into 
business segments distinguishable by economic activity. The 
Group’s business segments are LAP operations, Bisichi operations 
and Dragon operations. These business segments are subject to 
risks and returns that are different from those of other business 
segments and are the primary basis on which the Group reports its 
segmental information. This is consistent with the way the Group is 
managed and with the format of the Group’s internal financial 
reporting. Significant revenue from transactions with any individual 
customer, which makes up 10 per cent or more of the total revenue 
of the Group, is separately disclosed within each segment. All coal 
exports are sales to coal traders at Richard Bay’s terminal in South 
Africa with the risks and rewards passing to the coal trader at the 
terminal. Whilst the coal traders will ultimately sell the coal on the 
international markets the Group has no visibility over the ultimate 
destination of the coal. Accordingly, the export sales are recorded as 
South Africa revenue. 

LAP and its subsidiaries (“the Group”) consist of LAP, all of its 
subsidiary undertakings, including Bisichi PLC (“Bisichi”) and Dragon 
Retail Properties Limited (“Dragon”). The Group without Bisichi and 
Dragon is referred to as LAP Group.

46  London & Associated Properties PLC 2021

FINANCIAL STATEMENTS
FINANCIAL STATEMENTS

Notes to the financial statements
for the year ended 31 December 2021

1.    RESULTS FOR THE YEAR AND SEGMENTAL ANALYSIS
These operating segments (LAP, Bisichi and Dragon) are each viewed separately and have been so reported below.

Business segments

BUSINESS ANALYSIS 

Rental income
Service charge income
Management income from third party properties
Mining
Group Revenue
Direct property costs
Impairment of inventory - property
Direct mining costs
Overheads
Depreciation
Operating profit
Finance income
Finance expenses
Result before valuation movements 

Other segment items
Net (decrease)/increase on revaluation of investment properties
Profit on disposal of investment properties
Exchange losses
Net increase on revaluation of investments held for trading
Loss on disposal of fixed assets
Adjustment to interest rate derivative
Revaluation and other movements
Loss for the year before taxation

Segment assets
- Non-current assets - property
- Non-current assets - plant & equipment
- Non-current assets - other
- Inventory - property
- Current assets - others
- Assets held for sale
- Cash & cash equivalents
Total assets

Segment liabilities
Borrowings
Current liabilities
Non-current liabilities
Total liabilities
Net assets

Major customers
Customer A
Customer B
Customer C

These customers are for mining revenue in South Africa.

GEOGRAPHIC ANALYSIS

Revenue
Operating loss
Non-current assets excluding investments
Total net assets
Capital expenditure

LAP   
£’000  

BISICHI

£’000  

DRAGON

£’000  

 5,024 
 852 
 18 
–  
 5,894 
(2,181)
(816)
–  
(2,345)
(241)
 311 
 12 
(1,713)
(1,390)

(316)
 436 
–  
–  
(133)
 130 
 117 
(1,273)

 28,386 
 840 
–  
 25,213 
 1,131 
 504 
 5,473 
 61,547 

(30,981)
(5,172)
(3,148)
(39,301)
 22,246 

 904 
 130 
–  
 49,401 
 50,435 
(200)
–  
(38,008)
(7,035)
(2,571)
 2,621 
 22 
(799)
 1,844 

 255 
–  
(121)
 812 
–  
–  
 946 
 2,790 

 10,700 
 9,065 
 3,631 
–  
 10,367 
–  
 3,018 
 36,781 

(6,519)
(11,272)
(2,286)
(20,077)
 16,704 

2021 
TOTAL
£’000  

 6,053 
 1,005 
 18 
 49,401 
 56,477 
(2,406)
(816)
(38,008)
(9,412)
(2,815)
 3,020 
 34 
(2,543)
 511 

(111)
 436 
(121)
 812 
(133)
 130 
 1,013 
 1,524 

 125 
 23 
–  
–  
 148 
(25)
–  
–  
(32)
(3)
 88 
–  
(31)
 57 

(50)
–  
–  
–  
–  
–  
(50)
 7 

 2,080 
 12 
–  
–  
 376 
–  
 27 
 2,495 

(1,164)
(62)
–  
(1,226)
 1,269 

 41,166 
 9,917 
 3,631 
 25,213 
 11,874 
 504 
 8,518 
 100,823 

(38,664)
(16,506)
(5,434)
(60,604)
 40,219 

–  
–  
–  

 23,206 
 12,656 
 6,169 

–  
–  
–  

 23,206 
 12,656 
 6,169 

UNITED
KINGDOM
£’000

 7,300 
 183 
 42,066 
 36,784 
 409 

SOUTH
AFRICA 
£’000

 49,177 
 2,837 
 9,017 
 3,435 
 1,781 

 2021 
TOTAL  
£’000  

 56,477 
 3,020 
 51,083 
 40,219 
 2,190 

London & Associated Properties PLC 2021 47

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

1.    RESULTS FOR THE YEAR AND SEGMENTAL ANALYSIS CONTINUED

BUSINESS ANALYSIS

Rental income
Service charge income
Management income from third party properties
Mining
Group Revenue

Direct property costs
Impairment of inventory - property
Direct mining costs
Overheads
Exchange losses
Depreciation 

Operating loss/(profit)
Finance income
Finance expenses
Result before valuation movements

Other segment items
Net decrease on revaluation of investment properties
(Decrease)/increase in value of other investments
Net increase on revaluation of investments held for trading
Adjustment to interest rate derivative
Revaluation and other movements
Loss for the year before taxation

Segment assets
- Non-current assets - property
- Non-current assets - plant & equipment
- Cash & cash equivalents
- Inventories - property
- Non-current assets - other
- Current assets - others
Total assets

Segment liabilities
Borrowings
Current liabilities
Non-current liabilities
Total liabilities
Net assets

Major customers
Customer A
Customer B
Customer C

These customers are for mining revenue in South Africa. 

GEOGRAPHIC ANALYSIS

Revenue
Operating loss
Non-current assets excluding investments
Total net assets
Capital expenditure

LAP
£’000

4,377
795
18
-
5,190 

(2,192)
(2,300)
-
(2,317)
-
(258)

(1,877)
5
(2,200)
(4,072)

(664)
(20)
-
(200)
(884)
(4,956)

33,383
797
3,413
25,013
-
978
63,584

(30,889)
(5,898)
(3,526)
(40,313)
23,271

-
-
-  

BISICHI
£’000

919
156
-
28,624
29,699

(142)
-
(24,645)
(5,820)
(38)
(2,193)

(3,139)
25
(641)
(3,755)

(1,295)
39
67
-
(1,189)
(4,944)

10,471
10,174
3,768
-
1,746
11,037
37,196

(9,053)
(10,866)
(2,343)
(22,262)
14,934

9,042
7,588
6,291

UNITED
KINGDOM
£’000

6,521
(1,323)
46,842
36,636
365

DRAGON
£’000

108
21
-
-
129

(5)
-
-
(28)
-
(4)

92
-
(28)
64

(310)
-
-
-
(310)
(246)

 2,130 
15 
13
–  
–  
453
 2,611 

(1,185)
(92)
7
(1,270)
1,341

–  
–  
–  

SOUTH
AFRICA 
£’000

28,497
(3,601)
10,128
2,910
3,435

2020
TOTAL
£’000

5,404
972
18
28,624
35,018

(2,339)
(2,300)
(24,645)
(8,165)
(38)
(2,455)

(4,924)
30
(2,869)
(7,763)

(2,269)
19
67
(200)
(2,383)
(10,146)

45,984 
 10,986 
7,194 
 25,013 
 1,746 
12,468 
103,391 

(41,127)
(16,856)
(5,862)
(63,845)
39,546

9,042
7,588
6,291

 2020 
TOTAL  
£’000  

35,018
(4,924)
56,970
 39,546 
 3,800 

Group revenue is external to the Group and the directors consider that inter segmental revenues are not material.

48  London & Associated Properties PLC 2021

 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

2.    LOSS BEFORE TAXATION 

Profit/(loss) before taxation is stated after charging/(crediting):
Staff costs (see note 26)
Depreciation on tangible fixed assets - owned assets
Depreciation on tangible fixed assets - right of use
Exchange loss
Amounts payable to the auditor in respect of both audit and non-audit services
Audit services
Statutory - Company and consolidation
Subsidiaries - audited by KR (2020: RSM)
Subsidiaries - audited by other auditors
Further assurance services
Other services 

Staff costs are included in overheads.

3.  DIRECTORS’ EMOLUMENTS

Emoluments
Defined contribution pension scheme contributions

Sir Michael Heller received £83,000 (2020: £83,000) as a Director of Bisichi PLC.

Details of directors’ emoluments and share options are set out in the remuneration report.

4.  FINANCE INCOME AND EXPENSES

Finance income
Finance expenses
Interest on bank loans and overdrafts
Other loans
Interest on lease obligations
Total finance expenses

5.  INCOME TAX

Current tax
Corporation tax on profit of the period
Corporation tax on profit of previous periods
Total current tax

Deferred tax
Loss relief
Origination of timing differences
Revaluation of investment properties
Accelerated capital allowances
Unredeemed capital reductions
Adjustment in respect of prior years
Total deferred tax (note 22)
Tax on profit on ordinary activities

2021 
£’000 

 8,999 
 2,577 
 238 
(121)

 41 
 71 
 8 
 6 
–  
 126 

2021 
£’000 

 1,037 
 47 
 1,084 

2021 
£’000 

 34 

(1,345)
(1,121)
(77)
(2,543)

2021 
£’000 

 750 
(19)
 731 

 386 
(99)
 227 
(111)
(443)
 7 
(33)
 698 

2020 
£’000 

 7,289 
 2,200 
 255 
 39 

 88 
 19 
 110 
 4 
 9 
 230 

2020 
£’000 

 805 
 45 
 850 

2020 
£’000 

 30 

(1,615)
(968)
(286)
(2,869)

2020 
£’000 

 30 
 2 
 32 

 109 
 117 
(201)
(1,143)
–  
–  
(1,118)
(1,086)

London & Associated Properties PLC 2021 49

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

5.  INCOME TAX CONTINUED
Factors affecting tax charge for the year
The corporation tax assessed for the year is different from that at the effective rate of corporation tax in the United Kingdom of 19.00 per 
cent  (2020: 19.00 per cent). The differences are explained below:

Profit/(loss) for the year before taxation
Taxation at 19 per cent (2020: 19 per cent)

Effects of:
Capital gains / (losses) on disposal
Other differences
Losses not recognised
Non taxable income
Adjustment in respect of prior years 
Deferred tax rate adjustment
Income tax charge for the year

Analysis of United Kingdom and overseas tax:
United Kingdom tax included in above:

Corporation tax
Adjustment in respect of prior years
Current tax
Deferred tax

Overseas tax included above:

Corporation tax
Adjustments in respect of prior years
Current tax
Deferred tax

2021 
£’000 

 1,524 
 290 

(63)
 59 
 52 
 174 
(19)
 205 
 698 

2020 
£’000 

(10,146)
(1,927)

–  
 334 
 973 
–  
 2 
(468)
(1,086)

2021
£’000 

2020
£’000 

-
               (19)
(19)
    74        
    55        

18
                  -
18
(14)
4

2021
£’000 

750
-
750
(107)
643

2020 
£’000 

12
2
14
(1,104)
(1,090)

Overseas tax is derived from the Group’s South African mining operation. The deferred tax rate adjustment arises due to the deferred tax 
rate used in the UK for the year of 25% (2020: 19%) and the corporation tax rate assessed in South Africa for the year of 28% (2020: 28%) 
being different from the corporation tax rate in the UK. 

Factors that may affect future tax charges:
Based on current capital expenditure plans, the Group expects to continue to be able to claim capital allowances in excess of depreciation 
in future years, but at a slightly lower level than in the current year.
A deferred tax provision has been made for gains on revaluing investment properties. 
The Finance (no. 2) Act 2017 was substantively enacted on 16 November 2017. This includes a restriction on the utilisation of brought 
forward tax losses and corporate interest in certain circumstances effective from 1 April 2017.
An increase in the rate of corporation tax to 25% from April 2023 was substantially enacted on 24 May 2021. The impact of this increase in 
the Corporation Tax rate, which will be recognised in 2023, is likely to be negligible.

6.    DIVIDEND
No dividends were paid in the year relating to the current or prior period (2020: Nil)
The Directors are not recommending a final dividend for 2021 (2020: Nil), because of the uncertain state of the global economy.

7.   LOSS PER SHARE AND NET ASSETS PER SHARE
Loss per equity share has been calculated as follows:

Loss attributable to equity shareholders for the year (£’000)

Weighted average number of ordinary shares in issue (’000)
Loss per equity share

2021
(152)

 85,326 
(0.18)p

2020
(6,704)

 85,325 
(7.86)p

Weighted average number of shares in issue is calculated after excluding treasury shares of 216,715 (2020: 218,197).

Net assets per equity share have been calculated as follows:

Net assets attributable to equity shareholders (£’000)
Shares in issue (’000)
Net assets per equity share

50  London & Associated Properties PLC 2021

2021
 29,683 
 85,326 
34.78p

2020
 29,860 
 85,325 
34.99p

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

8.   INVESTMENT PROPERTIES

Cost or valuation at 1 January 2021
Transfer to assets held for sale (note 10)
Capital expenditure
Disposals
Decrease in present value of head leases
(Decrease)/increase on revaluation
At 31 December 2021

Representing assets stated at:
Valuation
Present value of head leases

At 31 December 2021
At 31 December 2020

Cost or valuation at 1 January 2020
Acquisition of property
Increase in present value of head leases
Decrease on revaluation
At 31 December 2020

Representing assets stated at:
Valuation
Present value of head leases

TOTAL 
£’000

FREEHOLD 
£’000

LEASEHOLD  
OVER 50 YEARS 
£’000

LEASEHOLD 
UNDER 50 
YEARS 
£’000

 45,984 
(504)
 90 
(4,170)
(123)
(111)
 41,166 

 37,945 
 3,221 
 41,166 

 41,166 
 45,984 

 29,953 
(504)
 90 
(4,170)
–  
 1,654 
 27,023 

 27,023 
–  
 27,023 

 27,023 
 29,953 

 15,834 
–  
–  
–  
(123)
(1,775)
 13,936 

 10,721 
 3,215 
 13,936 

 13,936 
 15,834 

 197 
–  
–  
–  
–  
 10 
 207 

 201 
 6 
 207 

 207 
 197 

TOTAL 
£’000

FREEHOLD
£’000

LEASEHOLD
OVER 
50 YEARS 
£’000

LEASEHOLD 
UNDER
50 YEARS 
£’000

 47,906 
329
18
(2,269)
 45,984 

 42,640 
 3,344 
 45,984

 30,658 
329
-
(1,034)
 29,953 

29,953 
–  
 29,953 

 17,041 
-
18
(1,225)
 15,834 

12,497 
 3,337 
 15,834 

 207 
-
-
(10)
197 

 190 
7 
197 

The leasehold and freehold properties, excluding the present value of head lease, were valued as at 31 December 2021 by professionally 
qualified independent firms of chartered surveyors. The valuations were made at fair value. The directors’ property valuations in 2020 were 
made at fair value. 

Allsop LLP
Carter Towler 
Directors’ valuations

Add: present value of headleases

2021 
£’000

27,420
10,525
  -
37,945
3,221
41,166

2020 
£’000

31,620
10,270
750
42,640
3,344
45,984

Head leases on investment property represent the right-of-use asset on certain investment property that has a head lease interest. In the 
current year total cash outflow for head leases and other lease liabilities is £0.2 million (2020: £0.2 million). A number of these leases 
provide for payment of contingent rent, usually a proportion of net rental income, in addition to fixed rents.

The historical cost of investment properties, including total capitalised interest of £1,161,000 (2020: £1,161,000) was as follows:

Cost at 1 January 
Transfer to assets held for sale (note 
10)
Additions 
Disposals 
Cost at 31 December 

2021
LEASEHOLD 
OVER 50 
YEARS
£’000

LEASEHOLD 
UNDER 50 
YEARS 
£’000

 18,883 
–  

–  
–  
 18,883 

 785 
–  

–  
–  
 785 

2020
LEASEHOLD 
OVER 50 
YEARS
£’000

LEASEHOLD 
UNDER 50 
YEARS 
£’000

 18,883 
–  

–  
–  
 18,883 

 785 
–  

–  
–  
 785 

FREEHOLD
£’000

 35,213 
–  

 329 
–  
 35,542 

FREEHOLD
£’000

 35,542 
(674)

 90 
(4,205)
 30,753 

London & Associated Properties PLC 2021 51

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

8.   INVESTMENT PROPERTIES CONTINUED 

Each year external valuers are appointed by the executive directors on behalf of the Board. The valuers are selected based upon their 
knowledge, independence and reputation for valuing assets such as those held by the Group.

Valuations are performed annually and are performed consistently across all properties in the Group’s portfolio. At each reporting date 
appropriately qualified employees of the Group verify all significant inputs and review the computational outputs. Valuers submit their 
report to the Board on the outcome of each valuation.

Valuations take into account tenure, lease terms and structural condition. The inputs underlying the valuations include market rent or 
business profitability, likely incentives offered to tenants, forecast growth rates, yields, EBITDA, discount rates, construction costs including 
any specific site costs (for example section 106), professional fees, developer’s profit including contingencies, planning and construction 
timelines, lease regear costs, planning risk and sales prices based on known market transactions for similar properties to those being valued.

Valuations are based on what is determined to be the highest and best use. When considering the highest and best use the valuer will 
consider, on a property by property basis, its actual and potential uses which are physically, legally and financially viable. Where the highest 
and best use differs from the existing use, the valuer will consider the cost and likelihood of achieving and implementing this change in 
arriving at the valuation.

There are often restrictions on Freehold and Leasehold property which could have a material impact on the realisation of these assets. The 
most significant of these occur when planning permission or lease extension and renegotiation of use are required or when a credit facility is 
in place. These restrictions are factored into the property’s valuation by the external valuer.

The methods of fair value measurement are classified into a hierarchy based on the reliability of the information used to determine the 
valuation, as follows:

Level 1: valuation based on inputs on quoted market prices in active markets.

Level 2:  valuation based on inputs other than quoted prices included within level 1 that maximise the use of observable data directly or 

from market prices or indirectly derived from market prices.

Level 3: where one or more significant inputs to valuations are not based on observable market data.

CLASS OF PROPERTY
LEVEL 3

Freehold –  
external valuation

Leasehold over 
50 years – 
external valuation

Leasehold under 50 
years –  
external valuation

Freehold –  
Directors’ valuation

CARRYING /
FAIR VALUE
2021
£’000

CARRYING/  
FAIR VALUE 
2020 
£’000

VALUATION  
TECHNIQUE

27,023

29,205 Income capitalisation

10,721

12,495 Income capitalisation

201

190 Income capitalisation

-

750 Income capitalisation

KEY UNOBSERVABLE
INPUTS

Estimated Rental Value
Per sq ft p.a
Equivalent Yield

Estimated Rental Value
Per sq ft p.a
Equivalent Yield

Estimated Rental Value
Per sq ft p.a
Equivalent Yield

Estimated Rental Value
Per sq ft p.a
Equivalent Yield

RANGE 
(WEIGHTED 
AVERAGE) 
2021

RANGE 
(WEIGHTED 
AVERAGE)  

2020

£6 – £33
(£17)
5.5% – 14.7%
(9.3%)
£5 – £10
(£7)
5.8% – 22.3%

(16.5%) 
£5 – £5
(£5)
28.8% - 28.8%
(28.8%)
n/a

£5 – £33
(£15)
5.5% – 16.7%
(10.3%)
£5 – £10
(£7)
5.8% – 22.7%

(15.6%) 
£5 – £5
(£5)
31.6% – 31.6%
(31.6%)
£4 – £4
(£4)
12.1% – 12.1%
(12.1%)

At 31 December 

37,945

42,640

There are interrelationships between all these inputs as they are determined by market conditions. The existence of an increase in more 
than one input would be to magnify the input on the valuation. The impact on the valuation will be mitigated by the interrelationship of two 
inputs in opposite directions, for example, an increase in rent may be offset by an increase in yield.

The table below illustrates the impact of changes in key unobservable inputs on the carrying / fair value of the Group’s properties.

ESTIMATED RENTAL VALUE
10% INCREASE OR (DECREASE)

EQUIVALENT YIELD
25 BASIS POINT CONTRACTION
OR (EXPANSION)

2021
£’000

2020
£’000

2,700(2,700) 2,918/(2,918)
1,072(1,072) 1,250/(1,250)
19/(19)
75/(75)

20(20)
n/a

2021
£’000

852(799)
193(186)
2/(2)
n/a

2020
£’000

859/(809)
255/(244)
2/(1)
16/(15)

Freehold – external valuation
Leasehold over 50 years – external valuation
Leasehold under 50 years – external valuation
Freehold – Directors’ valuation

52  London & Associated Properties PLC 2021

FINANCIAL STATEMENTS Notes to the financial statements

9.  MINING RESERVES, PLANT AND EQUIPMENT

Cost at 1 January 2021
Exchange adjustment
Additions
Disposals
At 31 December 2021

Accumulated depreciation at 1 January 2021
Exchange adjustment
Charge for the year
Disposals in year
Accumulated depreciation at 31 December 2021
Net book value at 31 December 2021

Cost at 1 January 2020
Exchange adjustment
Valuation increase
Additions
Cost at 31 December 2020

Accumulated depreciation at 1 January 2020
Exchange adjustment
Charge for the year
Accumulated depreciation at 31 December 2020
Net book value at 31 December 2020

TOTAL
£’000 

 31,589 
(1,115)
 2,604 
(1,409)
 31,669 

 20,603 
(761)
 2,815 
(905)
 21,752 
 9,917 

 29,860 
(1,852)
 110 
 3,471 
 31,589 

 19,388 
(1,240)
 2,455 
 20,603 
 10,986 

Included in the above line items are right-of-use assets over the following:

Net book value at 1 January 2021
Exchange adjustment
Additions
Disposals
Depreciation
Net book value at 31 December 2021

Net book value at 1 January 2020
Revaluation
Additions
Exchange adjustment
Depreciation
Net book value at 31 December 2020

10.   ASSETS HELD FOR SALE

At 1 January 
Transfer from investment property (note 8) 
At 31 December

MINING 
RESERVES
£’000 

MINING
EQUIPMENT
£’000 

RIGHT OF 
 USE ASSET -
OFFICE
BUILDING
£’000 

OFFICE 
EQUIPMENT 
AND MOTOR
VEHICLES
£’000 

 1,138 
(41)
–  
–  
 1,097 

 1,123 
(41)
 7 
–  
 1,089 
 8 

 1,226 
(88)
–  
–  
 1,138 

 1,212 
(89)
–  
 1,123 
 15 

TOTAL
£’000 

1,006
(6)
823
(504)
(308)
1,011

 924
109
 284 
(18)
(293)
1,006 

 28,371 
(1,059)
 1,772 
(21)
 29,063 

 18,399 
(710)
 2,498 
(21)
 20,166 
 8,897 

 26,674 
(1,733)
–  
 3,430 
 28,371 

 17,405 
(1,136)
 2,130 
 18,399 
 9,972 

 1,164 
–  
 788 
(1,164)
 788 

 466 
–  
 238 
(660)
 44 
 744 

 1,054 
–  
 110 
–  
 1,164 

 211 
–  
 255 
 466 
 698 

 916 
(15)
 44 
(224)
 721 

 615 
(10)
 72 
(224)
 453 
 268 

 906 
(31)
–  
 41 
 916 

 560 
(15)
 70 
 615 
 301 

MINING
EQUIPMENT
£’000 

OFFICE
BUILDING
£’000 

 OFFICE 
EQUIPMENT 
AND MOTOR
VEHICLES
£’000 

263
(6)
-
-
(38)
219

52
-
 248 
(18)
(19)
 263 

698
-
788
(504)
(238)
744

843
109
 - 
-
(254)  
 698 

2021 
£’000

–  
                 504 
 504 

 45 
-
35
-
(32)
48

29
-
 36 
-
(20)
 45 

2020 
£’000

–  
–  
–  

In December 2021 a retail market in Rugeley was placed for sale with an auction house and the sale subsequently completed in January 
2022. The property was therefore reclassified as an asset held for sale at 31 December 2021 and valued at its sales value less costs of sale 
before being transferred.

London & Associated Properties PLC 2021 53

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

11.   SUBSIDIARY COMPANIES
In accordance with Section 409 of the Companies Act 2006 a full list of subsidiaries, the principal activity, the country of incorporation and 
the percentage of equity owned, as at 31 December 2021 is disclosed below:

ENTITY

ACTIVITY

PERCENTAGE 
OF SHARE 
CAPITAL

REGISTERED ADDRESS

Analytical Investments Limited (note F)
Analytical Portfolios Limited (note F)
Analytical Properties Holdings Limited
Analytical Properties Limited
Analytical Ventures Limited (note F)
24 Bruton Place Limited (note F)
24 BPL (Harrogate) Limited (note F)
24 BPL (Harrogate ) Two Limited (note F)
Brixton Village Limited (note F)
Market Row Limited (note F)
Newincco 1243 Limited (note F)
Newincco 1244 Limited (note F)
Newincco 1245 Limited (note F)

Dormant
Dormant
Property 
Property
Property
Dormant
Investment
Investment
Property
Property
Property
Property
Property 
Management 
Services
Property 
Property
Property
Property
Dormant
Dormant
Dormant
Property 
Management 
Services
London & African Investments Limited (note F) Dormant
Dormant
Orchard Chambers Residential Limited
Property
Orchard Square Limited
Coal mining
Bisichi PLC (note D)
Share dealing
Mineral Products Limited (notes A, D)
Bisichi (Properties) Limited (notes A, D)
Property
Bisichi Mining (Exploration) Limited (notes A, D) Holding 
company
Sisonke Coal Processing (pty) Limited  
Coal 
processing
(notes A, D)
Black Wattle Colliery (Pty) Limited (notes A, D) Coal mining

Newincco 1299 Limited (note F)
Newincco 1300 Limited (note F)
LAP Ocean Holdings Limited
LAP Ocean Two Limited (note F)
London & Associated Limited (note F)
London & Associated (Rugeley) Limited
London & Associated Securities Limited
London & Associated Management  
Services Limited

100%
100% 
100%
100%
100%
100%
88%
100%
100%
100%
100%
100%
100%

100%
100%
100%
100%
100%
100%
100%
100%

100% 
100%
100%
41.52%
100%
100%
100%

62.5%

62.5%

Bisichi Coal Mining (Pty) Limited (notes A, D)

Coal mining

100%

Urban First (Northampton) Limited (notes A, D) Dormant
Property
Bisichi Trustee Limited (notes A, D)
Dormant
Bisichi Mining Management Services Limited 
(notes A, D)
Ninghi Marketing Limited (notes A, D)
Bisichi Northampton Limited (notes A, D)
Amandla Ehtu Mineral Resource Development 
(Pty) Limited (notes A, D)
Black Wattle Klipfontein (Pty) Limited  
(notes A, D)
Dragon Retail Properties Limited (notes B, D) Property 
Property 
Newincco 1338 Limited (notes C, F)
Property
West Ealing Projects Limited (notes B, D)
Property
Broadway Regen Limited (notes D, E)
Property
Development Physics Limited (notes D, G)
Property
DP (Pampisford) Limited (notes D, H)

Dormant
Property
Dormant

Coal mining

100%
100%
100%

90.1%
100%
70%

62.5%

50%
100%
50%
90%
33.3%
100%

12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ

COUNTRY OF 
INCORPORATION

England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales

12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ

England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales

12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ

England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales

Samora Machel Street, Bethal Road, 
Middelburg, Mpumalanga, 1050
Samora Machel Street, Bethal Road, 
Middelburg, Mpumalanga, 1050
Samora Machel Street, Bethal Road, 
Middelburg, Mpumalanga, 1050
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ

12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
Samora Machel Street, Bethal Road, 
Middelburg, Mpumalanga, 1050
Samora Machel Street, Bethal Road, 
Middelburg, Mpumalanga, 1050
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ
73 Cornhill, London, EC3V 3QQ
12 Little Portland Street, London W1W 8BJ
12 Little Portland Street, London W1W 8BJ

South Africa

South Africa

South Africa

England and Wales
England and Wales
England and Wales

England and Wales
England and Wales
South Africa

South Africa

England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales

Details on the non–controlling interest in subsidiaries are shown under note 25.
Companies shown as Dormant are exempt from audit by virtue of s479A Companies Act 2006.
Note A: these companies are owned by Bisichi and the equity shareholdings disclosed relate to that company.
Note B: this entity is a joint venture owned 50% by LAP and 50% by Bisichi.
Note C: this company is owned by Dragon and the equity shareholdings disclosed relate to that company.
Note D:  Bisichi, Dragon, West Ealing Projects, Development Physics and their subsidiaries are included in the consolidated financial 

statements in accordance with IFRS 10.

Note E: This company is 90% owned by West Ealing Projects and the equity shareholdings disclosed relate to that company.
Note F: These companies have been dissolved after the 31st December 2021.
Note G: This entity is a joint venture owned 33.33% by LAP and 33.33% by Bisichi
Note H: This company is 100% owned by Development Physics and the equity shareholdings disclosed relate to that company. 

54  London & Associated Properties PLC 2021

FINANCIAL STATEMENTS Notes to the financial statements

12. INVENTORIES - PROPERTY
Development property and infrastructure:

At 1 January 
Capitalised expenditure
Capitalised interest
Impairments
At 31 December

2021
£’000

25,013
738
278
(816)
25,213

2020 
£’000

26,915  
116
282
(2,300)
25,013

The net realisable value of developments is assessed by the directors and is subject to key estimates made in respect of future sales prices 
and build costs. Variations in these assumptions can have significant effects on the net realisable value of developments.

In 2018 the Group acquired a development property through West Ealing Projects Limited a 50:50 joint venture with Bisichi. This property 
is held at cost of £7.481 million (2020: £7.056 million) and is currently being developed for sale.

In 2018 the Group decided to develop for sale Orchard Square, Sheffield and transferred the asset to inventory. In 2019 part of this 
property was sold. The remainder of the property is held at a value of £17.5 million, being cost of £22.4 million less an impairment provision 
of £4.9 million, and continues to be developed for sale. A 5% movement in the estimated sales price of this development would have an 
effect of £2.4 million (2020: £2.4 million) on its net realisable value. A 5% movement in the estimated build costs of this development would 
have an effect of £1.8 million (2020: £1.8 million) on its net realisable value. The uncertainties in the assumptions used to calculate the net 
realisable value of this development will reduce over time, but will not resolve within the next 12 months due to the duration of this project.

In 2021 the group acquired an option over a residential development opportunity in Purley, London through a joint venture held 33:33:33 
with Bisichi and an external partner. This property is held at cost of £0.232 million (2020: £nil) and is currently being developed for sale.

13.  INVENTORIES - MINING

Coal
Washed
Mining production
Work in progress
Other

14.  CURRENT ASSET INVESTMENTS AT FVPL

At 1 January
Additions
Gain / loss 
Disposals
Impairments
At 31 December

2021
£’000

 1,185 
 59 
–  
 9 
 1,253 

UNLISTED
SHARES
£’000

–  
 20 
–  
–  
(20)
–  

2020 
£’000

 2,924 
 394 
 111 
 16 
 3,445 

LOAN
STOCK
£’000

287
 1,359 
 201 
(101)
–  
 1,746 

2021
TOTAL
£’000

 1,746 
 1,630 
 701 
(446)
–  
3,631

2020
TOTAL
£’000

 287 
 1,379 
 201 
(101)
(20)
 1,746 

The non-current asset investments belong to Bisichi and are all listed on UK and overseas stock exchanges (Level 1 hierarchy) as follows:

Net book and market value of readily realisable investments listed on stock exchanges in 
the United Kingdom
Net book and market value of readily realisable investments listed on overseas stock 
exchanges

15.  TRADE AND OTHER RECEIVABLES

Trade receivables
Other receivables
Prepayments and accrued income

2021
£’000

1,564

2,067

3,631

2021
£’000

 7,387 
 1,383 
 1,147 
 9,917 

2020 
£’000

959

787

1,746

2020 
£’000

 6,610 
 940 
 640 
 8,190 

Note 21 details the group’s credit risk management and loss allowances held for trade receivables. 

London & Associated Properties PLC 2021 55

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

16.  INVESTMENTS IN LISTED SECURITIES HELD AT FVPL

Market value of listed Investments:
Listed in United Kingdom
Listed outside United Kingdom

Original cost of listed investments
Unrealised deficit of market value versus cost

2021
£’000 

478
207
685
846
(161)

2020 
£’000 

567
266
833
1,098
(265)

The investments in listed securities held at FVPL belong to Bisichi and the market value of listed investments is derived from their quoted 
share price on public markets (Level 1 hierarchy).

17.   TRADE AND OTHER PAYABLES

Trade payables
Other taxation and social security costs
Other payables
Accruals and deferred income

2021
£’000

 7,284 
 45 
 4,494 
 3,374 
 15,197 

2020 
£’000

 7,191 
 618 
 3,570 
 4,754 
 16,133 

The directors consider that the carrying amount of trade and other payables approximates to their fair value.

18.   BORROWINGS

2021
£’000
CURRENT

2021
£’000
NON-CURRENT

2021
£’000
CURRENT

2020
£’000
NON-CURRENT

Other loans (Bisichi)
£1.25 million term bank loan (secured) repayable by 2022 (Dragon)*
Bank overdrafts (secured) (Bisichi)
£14 million term bank loan (secured) repayable by 2022 at 6.95 per cent*
£0.04 million term loan (unsecured) repayable by 2026 at 2.5 per cent
£10 million first mortgage debenture stock 2022 at 8.109 per cent*
£3.96 million term bank loan (secured) repayable by 2024 (Bisichi)*
£4.2 million term loan (secured) - repayable by 2022 (Broadway Regen)
£3.932 million term loan (secured) repayable by 2028*

 130 
 1,164 
 2,536 
 13,251 
 8 
 9,990 
–  
 4,192 
 134 
 31,405 

 14 
–  
–  
–  
 29 
–  
 3,839 
–  
 3,377 
 7,259 

Borrowings analysis by origin:

United Kingdom
South Africa

 264 
 1,185 
 4,846 
 193 
 4 
–  
–  
 3,670 
 112 
 10,274 

2021
£’000 

35,984
2,680
38,664

 144 
–  
–  
 13,449 
 36 
 9,973 
 3,799 
–  
 3,452 
 30,853 

2020 
£’000 

35,873
5,254
41,127

* The £10 million debenture and bank loans are shown after deduction of un-amortised issue costs.

Interest payable on the term bank loans is variable being based upon the relevant bank’s base rate or the Sterling Overnight Index Average 
(SONIA) plus margin.

No banking covenants were breached by the group during the year, other than mentioned below.

The £14 million term loan taken out in September 2019, with Phoenix CRE S.à r.l., is secured by way of a charge on a single freehold 
property, included in the financial statements as inventory at a value of £17.5 million. This loan has an interest rate of 5.95% above SONIA, 
where SONIA has a minimum and maximum rate of 1.0% and 1.5%, respectively. Following a bank valuation in April 2021, the facility was 
placed into cash trap. In July 2021 the loan was paid down by an additional £0.3 million to take the facility out of cash trap. There is an 
option for the borrower to extend this loan for a further year to September 2023.

The First Mortgage Debenture Stock August 2022 is secured by way of a charge on specific freehold and leasehold properties which are 
included in the financial statements at a value of £17.0 million.

In September 2018 a 10 year term, loan of £3.932 million was taken out with Metro Bank secured by way of a charge on freehold and leasehold 
properties which are included in the financial statements at a value of £6.6 million. There is also £1.0 million of cash held as security following 
the sale of the Radcliffe property, that was previously charged to this loan. The interest cost of the loan is 2.95 per cent above the bank’s base 
rate and the loan is amortised over a 20 year repayment profile, with a final bullet payment after 10 years.

56  London & Associated Properties PLC 2021

 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

18. 

  BORROWINGS CONTINUED 

In South Africa, an R85million trade facility is held with Absa Bank Limited by Sisonke Coal Processing (Pty) Limited (“Sisonke Coal 
Processing”) in order to cover the working capital requirements of Bisichi’s South African operations. The interest cost of the loan is at the 
South African prime lending rate plus 3.8% The facility is renewable annually each January, is repayable on demand and is secured by way of 
a first charge over specific pieces of mining equipment, inventory and the debtors of the relevant company which holds the loan which are 
included in the financial statements at a value of £8.84 million. All banking covenants were either adhered to or waived by Absa Bank 
Limited during the year. 

Bisichi holds a £3.96million term loan facility with Julian Hodge Bank Limited. The loan is secured against Bisichi’s UK retail property 
portfolio. The debt package has a five year term and is repayable at the end of the term in December 2024. The interest cost of the loan is 
4.00% above the Bank of England base rate. The loan is secured by way of a first charge over the investment properties in the UK which are 
included in the financial statements at a value of £10.53 million. No banking covenants were breached during the year.

The bank loan of £1.17 million (Dragon) which is repayable in April 2022 is secured by way of a first charge on specific freehold property 
which is included in the financial statements at a value of £2.08 million. The interest cost of the loan is 2.75 per cent above the bank’s base 
rate. Terms have been agreed with a new lender to refinance this loan in full and this is progressing. An extension of the existing loan is 
available, to allow time for refinancing discussions to be concluded.

The bank loan of £4.122 million (Broadway Regen) which is repayable in April 2022, following an extension of the facility, is secured by way 
of a first charge on a specific freehold development property, which is included in the financial statements at £7.5 million. The interest cost 
of the loan is fixed at 7.0% per annum. A credit approved offer to refinance this loan with a new lender has been received and accepted and 
will repay the existing lender in full.

The Group’s objectives when managing capital are: 

–   To safeguard the Group’s ability to continue as a going concern, so that it may provide returns for shareholders and benefits for other 

stakeholders; and

–  To provide adequate returns to shareholders by ensuring returns are commensurate with the risk.

Analysis of the changes in liabilities arising from financing activities:

Balance at 1 January
Exchange adjustments
Cash movements excluding exchange adjustments
Valuation movements
Balance at 31 December

19. LEASE LIABILITIES

Minimum lease payments fall due:
Within one year
Second to fifth year
After five years

Future finance charges on lease liabilities
Present value of lease liabilities

Present value of lease liabilities:
Within one year
Second to fifth year
After five years

2021
£’000
BANK 
BORROWINGS

2021
£’000
LEASE 
OBLIGATIONS

2020
£’000
BANK 
BORROWINGS

2020
£’000
LEASE 
OBLIGATIONS

 41,127 
(148)
(2,491)
 176 
 38,664 

 4,379 
(6)
(39)
(87)
 4,247 

 41,183 
(386)
 131 
 199 
 41,127 

 4,266 
(18)
(329)
 460 
 4,379 

2021 
HEAD 
LEASES ON 
INVESTMENT 
PROPERTY1 
£’000

208
823
18,973
20,004
(16,783)
3,221

206
759
2,256
3,221

2021
TOTAL 
£’000

565
1,623
18,973
21,161
(16,914)
4,247

513
1,478
2,256
4,247

2021 
OFFICE 
£’000

2021
OTHER 
£’000

287
527
-
814
(67)
747

253
494
-
747

70
273
-
343
(64)
279

54
225
-
279

2020
TOTAL 
£’000

550
1,569
20,233
22,352
(17,973)
4,379

514
1,438
2,427
4,379

Lease liabilities greater than one year are £3,734,000 (2020: £3,865,000).

1 Many head leases on investment properties provide for contingent rent in addition to the rents above, usually a proportion of rental income. 

Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

London & Associated Properties PLC 2021 57

 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

20.  PROVISIONS

At 1 January
Exchange adjustment
At 31 December

The above provision relates to mine rehabilitation costs in Bisichi.

21.  FINANCIAL INSTRUMENTS
Total financial assets and liabilities 
The Group’s financial assets and liabilities and their fair values are as follows: 

2021 
£’000 

 1,442 
(51)
 1,391 

2020 
£’000 

 1,554 
(112)
 1,442 

Cash and cash equivalents
Investments - non-current assets
Investments - current assets
Trade and other receivables 
Other assets
Derivative liabilities
Bank overdrafts
Bank loans
Lease liabilities
Other liabilities
Total financial liabilities before debentures

Fair value of debenture stocks 
Fair value of the Group’s debenture liabilities:

Debenture stocks
Tax at 19 per cent (2020: 19 per cent)
Post tax fair value adjustment
Post tax fair value adjustment – basic pence per share

          2021 

          2020 

FAIR 
VALUE 
£’000 

 8,518 
 3,631 
 685 
9,917 
 8,770 
(70)
(2,536)
(26,153)
(4,247)
(11,778)
(13,263)

BOOK
VALUE 
£’000 

(10,000)
–  
–  
–  

CARRYING 
VALUE 
£’000 

 8,518 
 3,631 
 685 
9,917
 8,770 
(70)
(2,536)
(26,138)
(4,247)
(11,778)
(13,248)

FAIR 
VALUE 
£’000 

 7,194 
 1,746 
 833 
8,190
 7,550 
(200)
(4,846)
(26,308)
(4,379)
(11,262)
(21,482)

CARRYING 
VALUE 
£’000 

 7,194 
 1,746 
 833 
8,190 
 7,550 
(200)
(4,846)
(26,308)
(4,379)
(11,262)
(21,482)

FAIR 
VALUE 
£’000 

(10,124)
–  
–  
–  

2021 
FAIR VALUE  
ADJUSTMENT 
£’000 

2020 
FAIR VALUE 
ADJUSTMENT 
£’000 

(124)
 24 
(100)
(0.12p)

(315)
 60 
(255)
(0.30p)

Except for debenture stocks there is no material difference between the carrying value and fair value of financial liabilities or financial assets. 
The fair values of the debentures are based on the net present value at the relevant gilt interest rate of the future payments of interest on 
the debentures.

Treasury policy 
The Group enters derivative transactions such as interest rate swaps, interest rate collars and forward exchange contracts in order to help 
manage the financial risks arising from the Group’s activities. The main risks arising from the Group’s financing structure are interest rate 
risk, liquidity risk and market price risk, credit risk, commodity price risk and foreign exchange risk. The policies for managing each of these 
risks and the principal effects of these policies on the results are summarised below.

Sensitivity analysis
The Group has variable interest term debts which are covered by derivatives. Additionally, the Group has a variable interest term debt with 
minimum and maximum rates. At 31 December 2021, with other variables unchanged, a 1% increase in interest rates would change the 
profit/loss for the year by £126,000 (2020: £155,000).

58  London & Associated Properties PLC 2021

 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

21. 

 FINANCIAL INSTRUMENTS CONTINUED 

Interest rate risk 
Treasury activities take place under procedures and policies approved and monitored by the Board to minimise the financial risk faced by 
the Group.

The Bisichi United Kingdom bank loans and overdraft are secured by way of a first charge on certain fixed assets. The rates of interest vary 
based on Bank of England base rate in the UK.

The Bisichi South African bank loans are secured by way of a first charge over specific pieces of mining equipment, inventory and the 
debtors of the relevant company which holds the loan. The rates of interest vary based on PRIME in South Africa.

The £3.932 million bank loan is secured by way of a first charge on specific freehold and leasehold property. The rate of interest varies 
based on the bank’s base rate.

The £1.17 million bank loan (Dragon) is secured by way of a first charge on specific freehold property. The rate of interest varies based on 
the bank’s base rate.

The £4.122 million bank loan (Broadway Regen) is secured by way of first charge on a specific freehold development property. This loan is 
based on a fixed interest rate of 7.0%.

The £14 million bank loan is secured by way of first charge on a specific freehold development property held in inventory. The rates of 
interest vary based on SONIA in the UK, with a minimum SONIA of 1% and a maximum SONIA of 1.5%.

Liquidity risk 
The Group’s policy is to minimise refinancing risk by balancing its exposure to interest risk and to refinancing risk. In effect the Group seeks 
to borrow for as long as possible at the lowest acceptable cost. Efficient treasury management and strict credit control minimise the costs 
and risks associated with this policy which ensures that funds are available to meet commitments as they fall due. Cash and cash 
equivalents earn interest at rates based on banks’ base rates in the UK. The cash resources and funding facilities together are considered 
adequate to meet the Group’s anticipated cash flow requirements for the foreseeable future.

In South Africa, a R85million trade facility is held with Absa Bank Limited by Sisonke Coal Processing (Pty) Limited (“Sisonke Coal 
Processing”) in order to cover the working capital requirements of Bisichi’s South African operations. The interest cost of the loan is at the 
South African prime lending rate plus 3.8% The facility is renewable annually each January, is repayable on demand and is secured against 
inventory, debtors and cash that are held by Sisonke Coal Processing (Pty) Limited. The facility is included in cash and cash equivalents 
within the cashflow statement.

In the UK, Bisichi holds a £3.96 million term loan facility with Julian Hodge Bank Limited. The loan is secured against the group’s UK retail 
property portfolio. The debt package has a five year term and is repayable at the end of the term in December 2024. The interest cost of 
the loan is 4.00% above the Bank of England base rate.

The £14 million term loan with Pheonix CRE S.à r.l. is secured on a single freehold property and is repayable in September 2022. The 
interest cost is 5.95% above SONIA, where SONIA has a minimum and maximum rate of 1.0% and 1.5%, respectively. There is an option to 
extend this loan for one year to September 2023.

The table below analyses the Group’s financial liabilities (excluding interest rate derivatives) into maturity groupings and also provides details 
of the liabilities that bear interest at fixed, floating and non–interest bearing rates.

Bank overdrafts (floating)
Debentures (fixed)
Bank loans (fixed)
Bank loans (floating)*
Lease liabilities
Trade and other payables (non-interest)

Bank overdrafts (floating)
Debentures (fixed)
Bank loans (fixed)
Bank loans (floating)*
Lease liabilities
Trade and other payables (non-interest)

2021 
TOTAL 
£’000 

 2,536 
 10,000 
 4,229 
 22,002 
 21,161 
 11,778 
 71,706 

2020 
TOTAL 
£’000 

 4,846 
 10,000 
 3,710 
 23,108 
 22,352 
 16,016 
 80,032 

LESS THAN
1 YEAR
£’000 

2-5 YEARS  
£’000 

 2,536 
 10,000 
 4,200 
 14,679 
 565 
 11,778 
 43,758 

LESS THAN
1 YEAR
£’000 

 4,846 
–  
 3,674 
 1,754 
 550 
 16,016 
 26,840 

–  
–  
 29 
 4,426 
 1,623 
–  
 6,078 

2-5 YEARS 
£’000 

–  
 10,000 
 36 
 18,619 
 1,569 
–  
 30,224 

OVER 
5 YEARS 
£’000 

–  
–  
–  
 2,897 
 18,973 
–  
 21,870 

OVER
5 YEARS 
£’000 

–  
–  
–  
 2,735 
 20,233 
–  
 22,968 

The Group would normally expect that sufficient cash is generated in the operating cycle to meet the contractual cash flows as disclosed 
above through effective cash management. 

* Certain bank loans are fully hedged with appropriate interest derivatives. Details of all hedges are shown on the next page.

.

London & Associated Properties PLC 2021 59

 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

21. 

 FINANCIAL INSTRUMENTS CONTINUED 

Market price risk
The Group is exposed to market price risk through interest rate and currency fluctuations.

Credit risk 
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.

The Group is mainly exposed to credit risk on its cash and cash equivalents, trade and other receivables. The maximum exposure to credit 
risk is represented by the carrying amount of each financial asset in the balance sheet which at year end amounted to £21,601,000 (2020: 
£17,323,000). 

To mitigate risk on its cash and cash equivalents, the group only deposits surplus cash with well-established financial institutions of high 
quality credit standing.

The Group’s credit risk is primarily attributable to its trade receivables. Ageing of past due gross trade receivables and the carrying amount 
net of loss allowances is set out below.

0-30 days
31-60 days
61-90 days
91+ days

Being:
Mining
Property

2021

2020

GROSS 
AMOUNT
£’000

LOSS 
ALLOWANCE
£’000

NET CARRYING 
AMOUNT 
£’000

GROSS 
AMOUNT
£’000

LOSS 
ALLOWANCE
£’000

NET CARRYING 
AMOUNT
£’000

6,604
 29 
 250 
 1,140 
 8,023 

6,158
1,865
8,023

 (144) 
 (16) 
 (7) 
 (469) 
(636) 

-
(636)
(636)

6,460  
13  
 243 
 671 
 7,387 

6,158
1,229
7,387

 4,310 
 1,570 
 15 
1,330 
 7,225 

4.944
2,281
7,225

 (135) 
 (6) 
 (3) 
 (471) 
 (615) 

-
(615)
(615)

4,175  
1,564
 12
 859 
 6,610 

4,944
1,666
6,610

Gross trade receivables mainly consist of amounts invoiced for rent, service charge and management fees and the sales of coal and all are 
inclusive of VAT and form part of Revenue (see Note 1).

Trade receivables are presented in the balance sheet net of loss allowances. The Group applies the IFRS 9 simplified approach to measuring 
expected credit losses (ECLs) which uses a lifetime expected loss allowance for all trade receivables. Expected loss rates are based on the 
historic credit loss experienced and adjusted for current and forward information affecting the ability of the individual customers to settle 
receivables.

In the current and prior reporting period, the current and forward information considers the impact of Covid-19. Trade receivables are 
written off when there is no reasonable expectation of recovery.

In determining the ECLs an analysis of various factors has been performed on a customer by customer basis and considers the impact of 
Covid-19 and economic conditions. These factors include an assessment of the customer’s default risk based on: industry and geographic 
location; and payment record, which includes how many days past due the receivable is, payment concessions granted and credit rating. 
ECLs are recognised net of securities held for the customer.

Potential customers are evaluated for creditworthiness and where necessary collateral is secured. There is no concentration of credit risk 
within the lease portfolio to either business sector or individual company as the Group has a diverse customer base with no one customer 
accounting for more than eight per cent of property rental income.

The loss allowances for trade receivables as at 31 December reconcile to the opening allowances as follows:

Opening loss allowance at 1 January
Increase in loan loss allowance recognised in profit and loss during the year
Receivables written off during the year as uncollectable
Unused amount reversed
Closing loss allowance at 31 December

2021 
£’000 

615
290 
(262) 
(7)
636

2020 
£’000 

308
307  
-  
-
615

As at 31 December 2021, the Group held a loss allowance provision for trade receivables of £636,000 (2020: £615,000) and the impairment 
risk remains low with the loss allowance of £636,000 million representing 10.5% of total gross rental income for the year (2020: 11.4%). 

Customers’ credit ratings are reviewed regularly. The Group’s review includes measures such as the use of external ratings and establishing 
purchase limits for each customer. 

The Group exposure to credit risk on its other receivables is mitigated through ongoing review of the underlying performance and resources 
of the counterparty including evaluation of different scenarios of probability of default and expected loss applicable to each of the 
underlying balances.

60  London & Associated Properties PLC 2021

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

21. 

 FINANCIAL INSTRUMENTS CONTINUED 

Foreign exchange risk 
Only Bisichi is subject to this risk. All trading is undertaken in the local currencies except for certain export sales which are invoiced in US 
Dollars. It is not the Bisichi Group’s policy to obtain forward contracts to mitigate foreign exchange risk on these contracts as payment 
terms are within 15 days of invoice or earlier. Funding is also in local currencies other than inter-company investments and loans and it is 
also not the Bisichi Group’s policy to obtain forward contracts to mitigate foreign exchange risk on these amounts. During 2021 and 2020 
the Bisichi Group did not hedge its exposure of foreign investments held in foreign currencies. 

The principal currency risk to which the Bisichi Group is exposed in regard to inter-company balances is the exchange rate between Pounds 
Sterling and South African Rand. It arises as a result of the retranslation of Rand denominated inter-company trade receivable balances held 
within the UK which are payable by South African Rand functional currency subsidiaries. 

Based on the Bisichi Group’s net financial assets and liabilities at 31 December 2021, a 25% strengthening of Sterling against the South 
African Rand, with all other variables held constant, would decrease the Bisichi Group’s profit after taxation by £218,000 (2020: £360,000). 
A 25% weakening of Sterling against the South African Rand, with all other variables held constant would increase the Bisichi Group’s profit 
after taxation by £364,000 (2020: £601,000). 

The 25% sensitivity has been determined based on the average historic volatility of the exchange rate.

The table below shows the Bisichi currency profiles of cash and cash equivalents:

Sterling
South African Rand
US Dollar

Cash and cash equivalents earn interest at rates based on LIBOR in Sterling and Prime in Rand. 

The tables below shows the Bisichi currency profiles of net monetary assets and liabilities by functional currency:

2021:

Sterling
South African Rand
US Dollar

2020:

Sterling
South African Rand
US Dollar

2021
£’000 

1,397
1,017
604
3,018

2020 
£’000 

1,641
809
1,318
3,768

UK
£’000 

SOUTH AFRICA 
£’000 

1,123
65
1,462
2,650

-
 (5,088)
-
 (5,088)

UK
£’000 

SOUTH AFRICA 
£’000 

(70)
39
1,736
1,705

-
 (8,878)
-
 (8,878)

Borrowing facilities 
At 31 December 2021 the Group was within its bank borrowing facilities and was not in breach of any of the covenants. Term loan 
repayments are as set out at the end of this note. Details of other financial liabilities are shown in Notes 17, 18 and 19. 
Interest rate and hedge profile 

Fixed rate borrowings
Floating rate borrowings
– Subject to interest rate collar 
– Other borrowings

Average fixed interest rate
Weighted average collared interest rate
Weighted average cost of debt on overdrafts, bank loans and debentures
Average period for which borrowing rate is fixed
Average period for which borrowing rate is swapped

2021 
£’000 

2020 
£’000 

 14,219 

 13,683 

 13,251 
 11,194 
 38,664 

7.77%
6.95%
6.81%
0.6 years
0.7 years

 13,642 
 13,802 
 41,127 

7.80%
6.95%
7.04%
2.1 years
1.7 years

The Group’s floating rate debt bears interest based on Bank of England base rate, Banks’ base rate and SONIA for the term bank loans and 
bank base rate for the overdraft.

At 31 December 2021 the Group had a £14 million floating rate loan to September 2022, where SONIA has a minimum and maximum rate 
of 1.0% and 1.5%, respectively. At the year end the fair value liability in the accounts was £70,000 (2020: £200,000), as valued by the Group. 

London & Associated Properties PLC 2021 61

 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

21. 

 FINANCIAL INSTRUMENTS CONTINUED 

Fair value of financial instruments
Fair value estimation
The Group has adopted the amendment to IFRS 7 for financial instruments that are measured in the balance sheet at fair value. This 
requires the methods of fair value measurement to be classified into a hierarchy based on the reliability of the information used to 
determine the valuation, as follows:

–  Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

–   Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or 

indirectly (that is, derived from prices) (level 2).

–  Inputs for the asset or liability that are not based on observable market data (that is unobservable inputs) (level 3).

Financial assets
Quoted equities – non-current assets
Quoted equities – current assets
Financial liabilities
Interest rate collar

Financial assets
Quoted equities – non-current assets
Quoted equities – current assets
Financial liabilities
Interest rate swaps

LEVEL 1 
£’000

LEVEL 2 
£’000

LEVEL 3 
£’000

3,631
685

–

–
–

70

–
–

–

LEVEL 1 
£’000

LEVEL 2 
£’000

LEVEL 3 
£’000

1,746
833

–
–

–

200

–
–

–

2021
GAIN/(LOSS) 
TO INCOME 
STATEMENT
£’000

701
(161)

130

2020
GAIN/(LOSS) 
TO INCOME 
STATEMENT
£’000

201 
(135)

(200)

TOTAL 
£’000

3,631
685

70

TOTAL 
£’000

1,746
833

200

Capital structure
The Group sets the amount of capital in proportion to risk. It ensures that the capital structure is commensurate to the economic conditions 
and risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may vary the amount of 
dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group considers its capital to include share capital, share premium, capital redemption reserve, translation reserve and retained 
earnings, but excluding the interest rate derivatives.

Consistent with others in the industry, the Group monitors its capital by its debt to equity ratio (gearing levels). This is calculated as the net 
debt (loans less cash and cash equivalents) as a percentage of the equity calculated as follows:

Total debt
Less cash and cash equivalents
Net debt
Total equity

2021
£’000 

42,911
(8,518)
34,393
40,294
85.4%

2020 
£’000

45,506
(7,194)
38,312
39,748
96.4%

The Group does not have any externally imposed capital requirements.

Following the introduction of IFRS 16 total debt now includes lease liabilities.

Financial assets
The Group’s principal financial assets are bank balances and cash, trade and other receivables, investments and assets held for sale. The 
Group has no significant concentration of credit risk as exposure is spread over a large number of counterparties and customers. The credit 
risk in liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by 
international credit–rating agencies. The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the 
balance sheet are net of allowances for doubtful receivables, estimated by the Group’s management based on prior experience and the 
current economic environment.

Financial assets maturity
Cash and cash equivalents all have a maturity of less than three months.

Cash at bank and in hand

2021
£’000 

8,518

2020 
£’000

7,194

These funds are primarily invested in short term bank deposits maturing within one year bearing interest at the bank’s variable rates. 

62  London & Associated Properties PLC 2021

FINANCIAL STATEMENTS Notes to the financial statements

21. 

 FINANCIAL INSTRUMENTS CONTINUED 

Financial liabilities maturity
The following table sets out the maturity profile of contractual undiscounted cashflows of financial liabilities as at 31 December:

Repayment of borrowings

Bank loans and overdrafts:
Repayable on demand or within one year
Repayable between two and five years
Repayable after five years

Debentures:
Repayable within one year
Repayable between two and five years

2021
£’000 

2020 
£’000

21,415
4,455
2,804
28,674

9,990
-
38,664

10,274
18,145
2,735
31,154

-
9,973
41,127

Certain borrowing agreements contain financial and other conditions that if contravened by the Group, could alter the repayment profile.

22.   DEFERRED TAX LIABILITIES

Balance at 1 January
Transferred to consolidated income statement
Exchange adjustment
Balance at 31 December

The deferred tax balance comprises the following:
Revaluation of properties
Accelerated capital allowances
Short-term timing differences
Unredeemed capital deductions
Losses and other deductions
Deferred tax liability provision at end of year:

There is no time limit in respect of the Group tax loss relief.

2021 
£’000 

 355 
(33)
(13)
 309 

 347 
 2,718 
(557)
(1,057)
(1,142)
 309 

2020 
£’000 

 1,654 
(1,118)
(181)
 355 

 113 
 2,916 
(486)
(645)
(1,543)
 355 

In addition, the Group has unused losses and reliefs with a potential value of £11,145,000 (2020: £8,022,000), which have not been 
recognised as a deferred tax asset. As the Group returns to profit, these losses and reliefs can be utilised. The valuation of losses is based 
on a 25% tax rate (2020: 19%).

23. SHARE CAPITAL
The Company has one class of ordinary shares which carry no right to fixed income.

Authorised:  ordinary shares of 10p each 
Allotted, issued and fully paid share capital
Ordinary shares of 10p - issued during the year
Less: held in Treasury (see below)
"Issued share capital" for reporting purposes

Treasury shares

NUMBER OF 
ORDINARY 10P
SHARES
2021

NUMBER OF 
ORDINARY 10P
SHARES
2020

 110,000,000 
 85,542,711 

 110,000,000 
 85,542,711 

(216,715)
 85,325,996 

(218,197)
 85,324,514 

2021 
£’000 

 11,000 
 8,554 
–  
(22)
 8,532 

2020 
£’000 

 11,000 
 8,554 
–  
(22)
 8,532 

NUMBER OF ORDINARY  
10P SHARES 

COST /ISSUE VALUE

Shares held in Treasury at 1 January 
Issued for share incentive plan - dividends investment (Dec 2020 - 10.5p)
Shares held in Treasury at 31 December 

 218,197 
(1,482)
 216,715 

 218,197 
–  
 218,197 

2021

2020

2021 
£’000 

 144 
–  
 144 

2020 
£’000 

 144 
–  
 144 

London & Associated Properties PLC 2021 63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

23. 

  SHARE CAPITAL CONTINUED 

Share Option Schemes
Employees’ share option scheme (Approved scheme)
At 31 December 2021 there were no options to subscribe for ordinary shares outstanding, issued under the terms of the Employees’ Share 
Option Scheme.

This share option scheme was approved by members in 1986, and has been approved by Her Majesty’s Revenue and Customs (HMRC). 

There are no performance criteria for the exercise of options under the Approved scheme, as this was set up before such requirements 
were considered to be necessary.

A summary of the shares allocated and options issued under the scheme up to 31 December 2021 is as follows:

CHANGES DURING THE YEAR 

AT 1
JANUARY
2021

OPTIONS
EXERCISED

OPTIONS
GRANTED

OPTIONS
LAPSED

AT 31 
DECEMBER
2021

Shares issued to date 
Shares allocated over which options have not been granted
Total shares allocated for issue to employees under the scheme

 2,367,604 
 1,549,955 
 3,917,559 

–  
–  
–  

–  
–  
–  

–  
–  
–  

 2,367,604 
 1,549,955 
 3,917,559 

Non–approved Executive Share Option Scheme (Unapproved scheme)
A share option scheme known as the “Non–approved Executive Share Option Scheme” which does not have HMRC approval was set up 
during 2000. At 31 December 2021 there were no options to subscribe for ordinary shares outstanding.

The exercise of options under the Unapproved scheme is subject to the satisfaction of objective performance conditions specified by the 
remuneration committee which confirms to institutional shareholder guidelines and best practice provisions.

A summary of the shares allocated and options issued under the scheme up to 31 December 2021 is as follows:

CHANGES DURING THE YEAR

AT 1
JANUARY
2021

OPTIONS
EXERCISED

OPTIONS
GRANTED

OPTIONS
LAPSED

AT 31 
DECEMBER
2021

Shares issued to date 
Shares allocated over which options have not yet been granted
Total shares allocated for issue to employees under the scheme 

 450,000 
 550,000 
 1,000,000 

–  
–  
–  

–  
–  
–  

–  
–  
–  

 450,000 
 550,000 
 1,000,000 

The Bisichi PLC Unapproved Option Schemes 
Details of the share option schemes in Bisichi are as follows:

YEAR OF GRANT

2015
2018

SUBSCRIPTION 
PRICE PER SHARE 

PERIOD WITHIN 
WHICH OPTIONS 
EXERCISABLE 

NUMBER OF SHARES
FOR WHICH OPTIONS 
OUTSTANDING AT 
31 DECEMBER 2020

NUMBER OF 
SHARE OPTIONS 
ISSUED/EXERCISED/ 
(CANCELLED) 
DURING YEAR 

NUMBER OF SHARES 
FOR WHICH OPTIONS 
OUTSTANDING AT 
31 DECEMBER 2021

87.0p Sep 2015 – Sep 2025
73.5p Feb 2018 - Feb 2028

 300,000 
 380,000 

–  
–  

 300,000 
 380,000 

The exercise of options under the Unapproved Share Option Schemes, for certain option issues, is subject to the satisfaction of the 
objective performance conditions specified by the remuneration committee, which will conform to institutional shareholder guidelines and 
best practice provisions in force from time to time.

There are no performance or service conditions attached to 2015 and 2018 options which are outstanding at 31 December 2021. 

Outstanding at 1 January
Outstanding at 31 December
Exercisable at 31 December

2021
WEIGHTED 
AVERAGE
EXERCISE PRICE

79.5p
79.5p
79.5p

2021
NUMBER

 680,000 
 680,000 
 680,000 

2020
WEIGHTED
AVERAGE
EXERCISE PRICE

79.5p
79.5p
79.5p

2020
NUMBER

 680,000 
 680,000 
 680,000 

64  London & Associated Properties PLC 2021

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements
FINANCIAL STATEMENTS Notes to the financial statements

24.   NON–CONTROLLING INTEREST (“NCI”)

As at 1 January
Share of profit/(loss) for the year
Dividends paid
Exchange movement
As at 31 December

The following subsidiaries had material NCI:

Bisichi PLC 
Black Wattle Colliery (Pty) Ltd

2021 
£’000 

 9,686 
 978 
(90)
(38)
 10,536 

2020 
£’000 

 12,407 
(2,356)
(63)
(302)
 9,686 

Summarised financial information for these subsidiaries is set out below. The information is before inter–company eliminations with other 
companies in the Group.

BISICHI PLC

Revenue

Profit/(loss) for the year attributable to owners of the parent
Profit/(loss) for the year attributable to NCI
Profit/(loss) for the year
Other comprehensive expense attributable to owners of the parent
Other comprehensive expense attributable to NCI
Other comprehensive expense for the year

Balance sheet
Non–current assets
Current assets
Total assets

Current liabilities
Non–current liabilities
Total liabilities
Net assets at 31 December

Cash flows
From operating activities
From investing activities
From financing activities
Net cash flows

2021 
£’000 

2020 
£’000 

 50,520 

 29,805 

 1,491 
 215 
 1,706 
(52)
(8)
(60)

 24,526 
 13,582 
 38,108 

(14,135)
(6,138)
(20,273)
 17,835 

 5,209 
(2,684)
(1,070)
 1,455 

(3,354)
(440)
(3,794)
(395)
(69)
(464)

 23,646 
 15,004 
 38,650 

(16,175)
(6,286)
(22,461)
 16,189 

 1,065 
(4,267)
(926)
(4,128)

The non–controlling interest comprises of a 37.5% shareholding in Black Wattle Colliery (Pty) Ltd, a coal mining company incorporated in 
South Africa. 

Summarised financial information reflecting 100% of the underlying subsidiary’s relevant figures, is set out below.

BLACK WATTLE COLLIERY (PTY) LIMITED (“BLACK WATTLE”)

Revenue
Expenses
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income for the year
Balance sheet
Non–current assets
Current assets
Current liabilities
Non–current liabilities
Net assets at 31 December

2021
£’000 

 49,225 
(47,787)
 1,438 
- 
1,438 

 9,019 
 9,329 
(14,287)
(1,904)
 2,157 

2020
£’000 

 28,555 
(31,498)
(2,943)
-

(2,943) 

 10,130 
 9,781 
(16,915)
(2,224)
 772 

The non–controlling interest relates to the disposal of a 37.5% shareholding in Black Wattle in 2010. The total issued share capital in Black 
Wattle Colliery (Pty) Ltd was increased from 136 shares to 1,000 shares at par of ZAR1 (South African Rand) through the following shares issue:

–  a subscription for 489 ordinary shares at par by Bisichi Mining (Exploration) Limited increasing the number of shares held from 136 ordinary 
shares to a total of 625 ordinary shares; 

–  a subscription for 110 ordinary shares at par by Vunani Mining (Pty) Ltd; 

–  a subscription for 265 “A” shares at par by Vunani Mining (Pty) Ltd

London & Associated Properties PLC 2021 65

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

24. 

  NON–CONTROLLING INTEREST (“NCI”)  CONTINUED 

Bisichi Mining (Exploration) Limited is a wholly owned subsidiary of Bisichi PLC incorporated in England and Wales. 

Vunani Mining (Pty) Ltd is a South African Black Economic Empowerment company and minority shareholder in Black Wattle. 

The “A” shares rank pari passu with the ordinary shares save that they will have no dividend rights until such time as the dividends paid by Black 
Wattle Colliery (Pty) Ltd on the ordinary shares subsequent to 30 October 2008 will equate to ZAR832,075,000.

A non–controlling interest of 15% in Black Wattle is recognised for all profits distributable to the 110 ordinary shares held by Vunani Mining (Pty) 
Ltd from the date of issue of the shares (18 October 2010). An additional non–controlling interest will be recognised for all profits distributable 
to the 265 “A” shares held by Vunani Mining (Pty) Ltd after such time as the profits available for distribution, in Black Wattle Colliery (Pty) Ltd, 
before any payment of dividends after 30 October 2008, exceeds R832,075,000. 

On 12 April 2022 the total issued share capital in Black Wattle Colliery (Pty) Ltd was increased further from 1000 shares to 1002 shares at par of 
R1 through the following share issue:

 a subscription of 1 “B” Share at par by Bisichi Mining (Exploration Limited);

 a subscription of 1 “B” Share at par by Vunani Mining (Pty) Ltd

The “B” shares rank pari passu with the ordinary shares save that they have sole rights to the distributable profits attributable to certain mining 
reserves held by Black Wattle Colliery (Pty) Ltd. A non-controlling interest is recognised for all profits distributable to the “B” shares held by 
Vunani Mining (Pty) Ltd from the date of issue of the shares (12 April 2022).

25.   RELATED PARTY TRANSACTIONS

Related party: 
Simon Heller Charitable Trust
  Current account 
Loan account 

Directors and key management
  M A Heller and J A Heller

J Mintz
  C A Parritt
  R Priest
London & Associated Securities
Totals at 31 December 2021
Totals at 31 December 2020

COST 
RECHARGED
TO (BY) 
RELATED
PARTY
£’000

AMOUNTS 
OWED
BY (TO) 
RELATED
PARTY
£’000

ADVANCED TO
(BY) RELATED
PARTY
£’000

(63)
–  

 18 
–  
(18)
(35)
–
(98)
(108)

(i)

(ii)
(ii)

–  
(700)

–  
 10 
–  
(9)
–
(699)
(709)

–  
–  

–  
 10 
–  
–  
(179)
(169)
–  

Nature of costs recharged – (i) Property management fees (ii) Consultancy fees. 

Directors 

London & Associated Properties PLC provides office premises, property management, general management, accounting and administration 
services for a number of private property companies in which Sir Michael Heller and J A Heller have an interest. Under an agreement with 
Sir Michael Heller no charge is made for these services on the basis that he reduces by an equivalent amount the charge for his services to 
London & Associated Properties PLC. The board estimates that the value of these services, if supplied to a third party, would have been 
£300,000 for the year (2020: £300,000). 

The companies for which services are provided are: Barmik Properties Limited, Cawgate Limited, Clerewell Limited, Cloathgate Limited, 
Ken–Crav Investments Limited, London & South Yorkshire Securities Limited, Metroc Limited, Penrith Retail Limited, Shop.com Limited, 
South Yorkshire Property Trust Limited, Wasdon Investments Limited, Wasdon (Dover) Limited, and Wasdon (Leeds) Limited.

In addition the Company received management fees of £10,000 (2020: £10,000) for work done for two charitable foundations, the Michael 
& Morven Heller Charitable Foundation and the Simon Heller Charitable Trust.

The Simon Heller Trust has placed on deposit with LAP £700,000 at an interest rate of 9% which is refundable on demand.

An interest free loan of £10,000 was made to J Mintz during the year and remained outstanding at year end.

R Priest provided consultancy services to the Company on an invoiced fee basis. 

In 2012 a loan was made by Bisichi to one of the Bisichi directors, Mr A R Heller, for £116,000. Interest is payable on the director’s Loan at 
a rate of 6.14 per cent. There is no fixed repayment date for the director’s Loan. The loan amount outstanding at year end was £41,000 
(2020: £41,000) and no repayment (2020: £nil) was made during the year.

The directors are considered to be the only key management personnel and their remuneration including employer’s national insurance for 
the year was £1,186,000 (2020: £920,000). All other disclosures required, including interest in share options in respect of those directors, 
are included within the remuneration report.

66  London & Associated Properties PLC 2021

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

26.   EMPLOYEES
The average number of employees, including directors, of the Group during the year was as follows: 

Production
Administration

Staff costs during the year were as follows:

Salaries and other costs
Social security costs
Pension costs

27.   CAPITAL COMMITMENTS

Commitments for capital expenditure approved and contracted for at the year end

2021

214
32
246

2021 
£’000

8,274
347
378
8,999

2021 
£’000

 81 

2020

221
34
255

2020 
£’000  

6,651
236
402
7,289

2020 
£’000  

 485 

28.   LEASE RENTALS RECEIVABLE
The Group leases out its investment properties to tenants under operating leases. The future aggregate minimum rentals receivable under 
non–cancellable operating leases are as follows:

2021 
£’000

2020 
£’000  

2021
2022
2023
2024
2025 +

5,024

5,013
              4,244                4,418 
              3,384                3,637 
              2,786                2,829 
            17,637              18,553 
34,450

33,075

29. CONTINGENT LIABILITIES AND EVENTS AFTER THE REPORTING PERIOD
There were no contingent liabilities at 31 December 2021 (2020: £Nil), except as disclosed in Note 21.

Bank guarantees have been issued by the bankers of Black Wattle Colliery (Pty) Limited on behalf of the Company to third parties. The 
guarantees are secured against the assets of the Company and have been issued in respect of the following:

Rail siding & transportation
Rehabilitation of mining land
Water & electricity

2021 
£’000

48
1,700
46
1,794

2020 
£’000  

50
1,441
48
1,539

The interpretation of laws and regulations in South Africa where Bisichi operates can be complex and can lead to challenges from or 
disputes with regulatory authorities. Such situations often take significant time to resolve. Where there is a dispute and where a reliable 
estimate of the potential liability cannot be made, or where Bisichi, based on legal advice, considers that it is improbable that there will be 
an outflow of economic resources, no provision is recognised.

Black Wattle Colliery (Pty) Ltd is currently involved in a tax dispute in South Africa related to VAT. The dispute arose during the year ended 
31 December 2020 and is related to events which occurred prior to the years ended 31 December 2020. As at the date of this report, the 
Group has been advised that it has a strong legal case, that it has complied fully with the legislation and, therefore, no economic outflow is 
expected to occur. Because of the nature and complexity of the dispute, the possible financial effect of a negative decision cannot be 
measured reliably. Accordingly, no provision has been booked at the year end.   At this stage, the Group believes that the dispute will be 
resolved in its favour. 

In January 2022 the Group sold a retail market in Rugeley, Staffordshire for £520,000.

In January 2022 the Group acquired an industrial property in Warrington, Cheshire for £2.37 million.

Except for these transactions there were no other events or transaction that require adjustment or disclosure.

67  London & Associated Properties PLC 2021

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

30.  COMPANY FINANCIAL STATEMENTS
Company balance sheet at 31 December 2021

Fixed assets
Tangible assets
Other investments:
Associated company 
Subsidiaries and others

Current assets
Assets held for sale
Debtors
Cash and cash equivalents

Current liabilities
Amounts falling due within one year
Borrowings
Net current liabilities
Total assets less current liabilities

Non-current liabilities
Amounts falling due after more than one year
Deferred tax falling due after more than one year
Net assets

Capital and reserves
Share capital
Share premium account
Capital redemption reserve
Treasury shares
Retained earnings
Shareholders’ funds

NOTES

30.3

30.4
30.4

30.5

30.6
30.7

30.7

30.9

30.9

2021 
£’000 

2020
£’000 

 20,556 

 24,582 

 489 
 4,545 
 5,034 
 25,590 

 504 
 7,191 
 3,707 
 11,402 

(3,618)
(9,990)
(2,206)
 23,384 

(1,383)
(451)
 21,550 

 8,554 
 4,866 
 47 
(144)
 8,227 
 21,550 

 489 
 45,459 
 45,948 
 70,530 

–  
 6,170 
 2,557 
 8,727 

(47,592)
–  
(38,865)
 31,665 

(11,448)
(671)
 19,546 

 8,554 
 4,866 
 47 
(144)
 6,223 
 19,546 

The profit for the financial year was £2,004,000 (2020: loss of £4,421,000)

These financial statements were approved by the board of directors and authorised for issue on 28th April 2022 and signed on its behalf by:

Sir Michael Heller 
Director 

Jonathan Mintz 
Director

Company Registration No. 341829 

68  London & Associated Properties PLC 2021

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

30. 

 COMPANY FINANCIAL STATEMENTS  CONTINUED 

COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2021

Balance at 1 January 2020
Loss for the year
Total comprehensive expense

Balance at 31 December 2020
Profit for the year
Total comprehensive income
Balance at 31 December 2021

SHARE
CAPITAL
£’000 

SHARE 
PREMIUM
£’000 

CAPITAL
REDEMPTION
RESERVE
£’000 

TREASURY 
SHARES
£’000 

 8,554 
–  
–  

 8,554 
–  
–  
 8,554 

 4,866 
–  
–  

 4,866 
–  
–  
 4,866 

 47 
–  
–  

 47 
–  
–  
 47 

(144)
–  
–  

(144)
–  
–  
(144)

RETAINED 
EARNINGS
EXCLUDING 
TREASURY 
SHARES
£’000 

 10,644 
(4,421)
(4,421)

 6,223 
 2,004 
 2,004 
 8,227 

TOTAL
EQUITY
£’000 

 23,967 
(4,421)
(4,421)

 19,546 
 2,004 
 2,004 
 21,550 

£8.2 million (2020: £6.2 million) of retained earnings (excluding treasury shares) is distributable.

30.1. COMPANY 
Accounting policies
The following are the main accounting policies of the Company:

Basis of preparation
The financial statements have been prepared on a going concern basis and in accordance with Financial Reporting Standard 101 ’Reduced 
Disclosure Framework’ (FRS 101) and Companies Act 2006. The financial statements are prepared under the historical cost convention as 
modified to include the revaluation of freehold and leasehold properties and fair value adjustments in respect of current asset investments 
and interest rate hedges.

The results of the Company are included in the consolidated financial statements. No profit or loss is presented by the Company as 
permitted by Section 408 of the Companies Act 2006. 

In these financial statements, the company has applied the exemptions available under FRS 101 in respect of the following disclosures:

•  Cash Flow Statement and related notes; 

•  Comparative period reconciliations for share capital, tangible fixed assets and intangible assets; 

•  Disclosures in respect of transactions with wholly owned subsidiaries; 

•  Disclosures in respect of capital management; 

•  The effects of new but not yet effective IFRSs; 

•  Disclosures in respect of the compensation of Key Management Personnel.

As the consolidated financial statements include the equivalent disclosures, the Company has also taken the exemptions under FRS 101 
available in respect of the following disclosures:

•  IFRS 2 Share Based Payments in respect of Group settled share based payments;

•  The disclosures required by IFRS 7 and IFRS 13 regarding financial instrument disclosures have not been provided apart from those 
which are relevant for the financial instruments which are held at fair value and are not either held as part of the trading portfolio or 
derivatives.

Key judgements and estimates
The preparation of the financial statements requires management to make assumptions and estimates that may affect the reported amounts 
of assets and liabilities and the reported income and expenses, further details of which are set out below. Although management believes 
that the assumptions and estimates used are reasonable, the actual results may differ from those estimates. Further details of the estimates 
are contained in the Directors’ Report and in the Group accounting policies.

Investments in subsidiaries, associated undertakings and joint ventures
Investments in subsidiaries, associated undertakings and joint ventures are held at cost less accumulated impairment losses.

London & Associated Properties PLC 2021 69

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

30.1. COMPANY CONTINUED 

Fair value measurements of investment properties and investments 
An assessment of the fair value of certain assets and liabilities, in particular investment properties, is required. In such instances, fair value 
measurements are estimated based on the amounts for which the assets and liabilities could be exchanged between market participants. To 
the extent possible, the assumptions and inputs used take into account externally verifiable inputs. However, such information is by nature 
subject to uncertainty. The fair value measurement of the investment properties may be considered to be less judgemental where external 
valuers have been used as is the case with the Company. 

The following accounting policies are consistent with those of the Group and are disclosed on pages 40 to 46 of the Group financial 
statements.

•  Revenue 

•  Property operating expenses

•  Employee benefits

•  Financial instruments 

•  Investment properties

•  Other assets and depreciation

•  Assets held for sale

•  Income taxes

•  Leases

30.2. RESULT FOR THE FINANCIAL YEAR
The Company’s result for the year was a profit of £2,004,000 (2020: loss of £4,421,000). In accordance with the exemption conferred by 
Section 408 of the Companies Act 2006, the Company has not presented its own profit and loss account.

30.3. TANGIBLE ASSETS 

INVESTMENT PROPERTIES

TOTAL
£’000

FREEHOLD
£’000

 LEASEHOLD
OVER 50 YEARS
£’000

 LEASEHOLD
UNDER 50 
YEARS
£’000

OFFICE
EQUIPMENT
AND MOTOR 
VEHICLES
£’000

Cost or valuation at 1 January 2021
Transfer to assets held for sale
Additions in the year
Disposals
Decrease in present value of head 
leases
Increase/(decrease) on revaluation
Cost or valuation at 31 December 2021

Representing assets stated at:
Valuation
Cost

Depreciation at 1 January 2021
Charge for the year
Disposals
Depreciation at 31 December 2021
Net book value at 1 January 2021
Net book value at 31 December 2021

 25,296 
(504)
 1,878 
(5,407)
(94)

(541)
 20,628 

 19,716 
 912 
 20,628 

 714 
 241 
(883)
 72 
 24,582 
 20,556 

 16,050 
(504)
 1,090 
(4,020)
–  

 1,199 
 13,815 

 13,815 
–  
 13,815 

–  
–  
–  
–  
 16,050 
 13,815 

 7,539 
–  
–  
–  
(94)

(1,750)
 5,695 

 5,695 
–  
 5,695 

–  
–  
–  
–  
 7,539 
 5,695 

 196 
–  
–  
–  
–  

 10 
 206 

 206 
–  
 206 

–  
–  
–  
–  
 196 
 206 

 347 
–  
–  
(223)
–  

–  
 124 

–
 124 
 124 

 248 
 3 
(223)
 28 
 99 
 96 

OFFICE
BUILDING
£’000

 1,164 
–  
 788 
(1,164)
–  

–  
 788 

–  
 788 
 788 

 466 
 238 
(660)
 44 
 698 
 744 

The freehold and leasehold properties, excluding the present value of head leases and directors’ valuations, were valued as at 31 December 
2021 by professional firms of chartered surveyors. The valuations were made at fair value. The directors’ property valuations were made at 
fair value. 

70  London & Associated Properties PLC 2021

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

30.3. TANGIBLE ASSETS CONTINUED 

Allsop LLP
Directors’ valuation

Add: Present value of headleases

The historical cost of investment properties was as follows:

Cost at 1 January 
Transfer to assets held for sale
Additions 
Disposals 
Cost at 31 December 2021

2021 
£’000 

18,765

                   -   

18,765
951
19,716

2020
£’000

21,990
750
22,740
1,045
23,785

FREEHOLD 
£’000 

LEASEHOLD
OVER 50 YEARS
£’000

 LEASEHOLD
UNDER 50 
YEARS
£’000

 11,553 
(674)
 1,090 
(4,004)
 7,965 

 9,333 
–  
–  
–  
 9,333 

 785 
–  
–  
–  
 785 

Head leases on investment property represent the value attributed to the right of the Company to occupy and use investment property that 
has a head lease interest. In the current year total cash outflow for head leases is £0.1 million (2020: £0.1 million). A number of these leases 
provide for payment of contingent rent, usually a proportion of net rental income, in addition to fixed rents.

Office building represents the value attributed under IFRS 16 to the right of the Company to occupy its sole office building. In the current 
year total cash outflow for the office lease liability is £0.3 million (2020: £0.2 million).

30.4. OTHER INVESTMENTS

COST OR VALUATION

At 1 January 2021
Repayment of Investment
Impairment provision
At 31 December 2021

SHARES IN
SUBSIDIARY
COMPANIES
£’000

SHARES IN
JOINT
VENTURES
£’000

SHARES IN
ASSOCIATE 
£’000

 45,295 
(40,252)
(662)
 4,381 

 164 
–  
–  
 164 

 489 
–  
–  
 489 

TOTAL
£’000

 45,948 
(40,252)
(662)
 5,034 

Subsidiary companies
Details of the Company’s subsidiaries, joint ventures and associates are set out in Note 11. Dragon is a joint venture and Bisichi and 
Development Physics are associates of the Company.

During the year the Company impaired its investment in Orchard Square Limited by £662,000 (2020: impairment of £2,463,000), following 
a reduction in the carrying value of the Orchard Square, Sheffield development property.

During the year the company simplified its internal capital structure reducing the value of capital within its subsidiaries and returning this 
capital to the company through the repayment of intercompany balances. Subsequently impairment provisions on the carrying value of 
these investments was carried out to match the reduction in capital. 

30.5. DEBTORS

Trade debtors
Amounts due from associate and joint ventures
Amounts due from subsidiary companies
Other debtors
Prepayments and accrued income

2021 
£’000 

 499 
 1,114 
 4,547 
 370 
 661 
 7,191 

2020 
£’000

 598 
 995 
 4,154 
 102 
 321 
 6,170 

London & Associated Properties PLC 2021 71

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

30.6. CURRENT LIABILITIES

Trade payables
Amounts owed to subsidiary companies
Amounts owed to joint ventures
Other taxation and social security costs
Lease liabilities
Other creditors
Accruals and deferred income

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2020 
£’000

2021 
£’000 

                   42                     48 
                 321              43,632 
                 156                   156 
                   45                   117 
                 314                   298 
              1,486                1,397 
              1,254                1,944 
 47,592 

 3,618 

During the year the company simplified its internal capital structure reducing the value of capital within its subsidiaries and returning this 
capital to the company through the repayment of intercompany balances.

Borrowings
Borrowings relate to the £10 million debenture which is shown after deduction of un–amortised issue costs. The debenture is repayable in 
August 2022 and further details are set out in note 18.

30.7. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Lease liabilities
Term Debenture stocks:
£10 million First Mortgage Debenture Stock 2022 at 8.109 per cent*

REPAYMENT OF BORROWINGS:

Debentures:
Repayable within one year
Repayable between two and five years
Repayable in more than five years

LEASE LIABILITIES

Minimum lease payments fall due:
Within one year
Second to fifth year
After five years

Future finance charges on lease liabilities
Present value of lease liabilities

Present value of lease liabilities:
Within one year
Second to fifth year
After five years

2021 
£’000 

 1,383 

–  
 1,383 

2021
£’000

9,990
–
–
9,990

2021 
OFFICE 
£’000

287
526
-
813
(67)
746

254
492
-
746

2020 
£’000

 1,475 

 9,973 
 11,448 

2020
£’000

–
9,973
–
9,973

2020
TOTAL
£’000

 331 
 796 
7,933 
 9,060 
(7,287)
 1,773 

298
743
732
1,773

2021 
HEAD LEASES 
ON INVESTMENT 
PROPERTY1 
£’000

60
242
7,153
7,455
(6,504)
951

60
225
666
951

2021
TOTAL 
£’000

347
768
7,153
8,268
(6,571)
1,697

314
717
666
1,697

Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

1 Many head leases on investment properties provide for contingent rent in addition to the rents above, usually a proportion of rental income. 

72  London & Associated Properties PLC 2021

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

30.8. DEFERRED TAX LIABILITY

Deferred Taxation
Balance at 1 January
Transfer to profit and loss account
Balance at 31 December

The deferred tax balance comprises the following:
Accelerated capital allowances
Short–term timing differences
Revaluation of investment properties
Deferred tax liability at year end

30.9. SHARE CAPITAL

Details of share capital, treasury shares and share options are set out in Note 23. 

30.10. RELATED PARTY TRANSACTIONS

2021 
£’000 

(671)
 220 
(451)

(466)
(278)
 293 
(451)

2020 
£’000

(345)
(326)
(671)

(438)
(208)
(25)
(671)

Related party: 
Development Physics Limited
  Current account 
Dragon Retail Properties Limited
  Current account 
Bisichi PLC 
  Current account 
Simon Heller Charitable Trust
  Current account 
Loan account 

Directors and key management
  M A Heller and J A Heller

J Mintz
  C A Parritt
  R Priest
London & Associated Securities
Totals at 31 December 2021
Totals at 31 December 2020

COST 
RECHARGED
TO (BY) 
RELATED
PARTY
£’000

AMOUNTS 
OWED
BY (TO) 
RELATED
PARTY
£’000

ADVANCED TO
(BY) RELATED
PARTY
£’000

–  

 36 

 200 

(63)
–  

 18 
–
(18)
(35)
–
 138 
 128 

(i)

(ii)

(i)
–
(iii)
(iii)

 76 

(156)

 41 

–  
(700)

–  
10  
–  
(9)
–
(738)
(822)

 76 

–  

–  

–  
–  

–  
10  
–  
–  
(179)
(93)
–  

Nature of costs recharged – (i) Management fees (ii) Property management fees (iii) Consultancy fees 

During the period, the Company entered into transactions, in the ordinary course of business, with other related parties. The company has 
taken advantage of the exemption under paragraph 8(k) of FRS101 not to disclose transactions with wholly owned subsidiaries.

Dragon Retail Properties Limited – ‘Dragon’ is owned equally by the Company and Bisichi PLC.

Bisichi PLC – The company has 41.52 per cent ownership of ‘Bisichi’.

Other details of related party transactions are given in note 25.

30.11. EMPLOYEES

THE AVERAGE WEEKLY NUMBER OF EMPLOYEES OF THE COMPANY DURING THE YEAR WERE AS FOLLOWS: 

 Directors & Administration 

STAFF COSTS DURING THE YEAR WERE AS FOLLOWS:

 Salaries 
 Social Security costs 
 Pension costs 

2021 
£’000

17

2021
£’000

 1,279 
158
 71 
1,508

2020 
£’000

19

2020
£’000

 1,139 
 139 
 121 
1,399

London & Associated Properties PLC 2021 73

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL STATEMENTS Notes to the financial statements

30.12. CAPITAL COMMITMENTS
There was a capital commitment of £40,000 at 31 December 2021, being approved and contracted for (2020: £Nil).

30.13.  FUTURE AGGREGATE MINIMUM RENTALS RECEIVABLE
The Company leases out its investment properties to tenants under operating leases. The future aggregate minimum rentals receivable 
under non–cancellable operating leases are as follows:

2021
2022
2023
2024
2025 +

30.14. CONTINGENT LIABILITIES AND POST BALANCE SHEET EVENTS
There were no contingent liabilities at 31 December 2021 (2020: £Nil).

In January 2002 the Company sold a retail market in Rugeley, Staffordshire for £520,000.

In January 2022 the Company acquired an industrial property in Warrington, Cheshire for £2.37 million.

Except for these transactions there were no other events or transaction that require adjustment or disclosure.

2021 
£’000

1,454
1,161
889
606
2,348
6,458

2020 
£’000

1,623
1,372
1,115
878
2,737
7,725

74  London & Associated Properties PLC 2021

 
 
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS

Five year financial summary

Portfolio size
Investment properties–LAP^
Investment properties–Dragon Retail Properties
Investment properties–Bisichi ^
Assets held for sale-LAP
Inventories-LAP

Portfolio activity
Acquisitions
Disposals
Additions to inventory at cost

Consolidated income statement
Group income
Profit/(loss) before tax
Taxation
(Loss)/profit attributable to shareholders
(Loss)/earnings per share – basic and diluted
Dividend per share

Consolidated balance sheet
Shareholders’ funds attributable to equity shareholders
Net borrowings, excluding lease obligations
Net assets per share

Consolidated cash flow statement
Cash generated from operations

Notes: 

^ Excluding the present value of head leases

2021 
£M

2020
£M

2019
£M

2018
£M

25
2
11
1
25
64

£M
0.09
(4.17)
1.02
(3.06)

£M
56.48
1.52
(0.70)
(0.15)
(0.18)p
0.00p

£M
29.70
30.15
34.80p

£M
5.82

31
2
10
-
25
68

£M
0.33
–
0.39
0.72

£M
35.02
(10.15)
1.09
(6.70)
(7.86)p
0.00p

£M
29.86
33.93
34.99p

£M
1.64

31
2
12
-
27
72

£M
0.14
(12.59)
0.41
0.14

£M
63.97
(4.54)
(0.95)
(6.48)
(7.59)p
0.00p

£M
36.73
27.65
43.04p

£M
14.98

32
2
13
2
39
88

£M
6.55
(36.44)
6.26
(23.63

£M
56.65
1.27
(0.68)
(2.08)
(2.44)p
0.18p

£M
43.38
35.99
50.83p

£M
1.92

2017
£M

62
3
13
36
-
114

£M
–
–
–
–

£M
47.87
11.28
(2.98)
7.69
9.01p
0.30p

£M
45.86
58.42
53.74p

£M
10.29

London & Associated Properties PLC 2021 75

76  London & Associated Properties PLC 2021

www.lap.co.uk

FSC® C001785

LONDON & ASSOCIATED PROPERTIES PLC
12 LITTLE PORTLAND STREET 
LONDON W1W 8BJ

EMAIL: ADMIN@LAP.CO.UK