LONDON &
ASSOCIATED
PROPERTIES
ANNUAL REPORT 2023
Contents
OVERVIEW
1
LAP at a glance
2 Chairman and Chief Executive’s review 2023
STRATEGIC REPORT
4
Financial and performance review
9
Principal activities, strategy & business model
9 Risks and uncertainties
10 Bisichi risks and uncertainties
11 Key performance indicators
12 Corporate responsibility
GOVERNANCE
20 Directors & advisors
21 Directors’ report
24 Corporate Governance
26 Governance statement by the Chairman of the remuneration committee
27 Annual remuneration report
32 Remuneration policy summary
34 Audit committee report
36 Directors’ responsibilities statement
37
Independent auditor’s report
FINANCIAL STATEMENTS
44 Consolidated income statement
44 Consolidated statement of comprehensive income
45 Consolidated balance sheet
46 Consolidated statement of changes in shareholders’ equity
47 Consolidated cash flow statement
48 Group accounting policies
55 Notes to the financial statements
84 Five year financial summary
Financial calendar
Annual General Meeting
26 June 2024
Announcement of half year results to 30 June 2024
Late August 2024
Announcement of annual results for 2024
Late April 2025
OVERVIEW
OVERVIEW
LAP at a glance
London & Associated Properties PLC (“LAP” or the "Group") is a main market
listed group which invests in and manages UK industrial and retail property.
LAP owns £46.1 million of property and seeks 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
33.38p
2022: 38.14p
KEY PROJECTS
IFRS net assets
£48.3m
2022: £53.7m
Properties portfolio
valuation*
£46.1m
2022: £60.0m
* Includes investment properties, head leases,
assets held for sale and property inventory.
Excludes properties under management.
KEY PROJECTS
HIGHLIGHT
Property
• Runcorn Manor Park Industrial Estate
• Adlington Court Industrial Estate
• West Ealing development
• Runcorn industrial portfolio strong rental growth
• Warrington industrial portfolio strong rental growth
• Residential development – construction to start
Q3 2024
• Orchard Square, Sheffield
• Interest in shopping centre relinquished during year
Coal
production
• In South Africa, Black Wattle produced 0.81m
metric tonnes of Run of Mine Coal in 2023
(2022: 0.82m metric tonnes)
• The API4 price averaged $120 in 2023
compared to $273 in 2022
• Rail infrastructure constraints impacted export
sales. Due to the lack of rail capacity 134,000
metric tonnes of coal were exported compared
to 262,000 metric tonnes in 2022
• These factors had a material negative impact on
the results for the year
• Measures by local rail operator in place to
improve rail capacity for 2024 and beyond
• Total domestic and export sales of coal were
1.03 million metric tonnes in the year compared
to 1.29 million metric tonnes in 2022
• Climate related risks being addressed for
coal processing operations
London & Associated Properties PLC 2023 1
STRATEGIC
REPORT STRATEGIC REPORT
Chairman and Chief Executive’s
review 2023
I am pleased to present our accounts for the
12 months to 31 December 2023
CONSOLIDATED RESULTS
Our consolidated property portfolio, excluding Orchard Square,
Sheffield (see below) was valued at £46.08 million at 31 December
2023 compared to £45.27 million on a like-for-like basis a year
earlier. This increase in valuation reflects £0.78 million in capital
expenditure as well as a modest valuation increase (including head
leases) of £0.03 million.
Rental income for the Group (excluding sold properties and bad
debt charges) increased by £0.05 million (1.9%) to £2.61 million
(2022: £2.56 million). This result reflects the resilience of our assets;
even in the current high interest rate environment we have achieved
increased rents on many new lettings.
Rental income resilience can also be seen in our occupancy levels,
which were 97.3% at year end (2022: 96.4%). Rent collection levels
have similarly remained strong, with an improved 92% of Q1 2023
rents received to date compared to 90% at the corresponding time
last year.
We continue to monitor our cost base following the outsourcing of
our property management functions and our relocation to smaller
offices. LAP’s overheads were £0.4 million (15%) lower than in
2022.
LAP PROPERTY ACTIVITIES
Industrial
Industrial constitutes 27% of our investment property portfolio by
value.
At Manor Park, Runcorn, our 100,000 sq ft industrial estate,
demand for units remains strong and we have continued to drive
rental growth. Since the year end, we accepted a surrender of a
15,000 sq ft unit that had recently had a rent review and have relet
the unit at a rent some 32% higher. This sets a useful rental tone for
the rest of our units and we continue to seek opportunities to
maximise rental income there.
Similarly, at Warrington our 25,000 sq ft industrial estate, we have
carried out two rent reviews since the year end that have confirmed
the demand for units in this location. We achieved rental uplifts of
55% and 49% over passing rent. We remain optimistic about
demand at both these locations.
Essential Community Retail
Essential community retail constitutes 73% of our investment
property portfolio by value.
The remainder of our portfolio has performed well and remains
close to fully let. We continue to monitor each property’s
performance closely and will look to dispose of any properties that
we consider to be ex-growth or where we identify a special buyer.
West Ealing
As previously reported, we obtained a resolution to grant planning
consent for 56 flats and four retail units at the end of 2020. During
2023, we have been finalising detailed designs for the project and
working with contractors and designers to improve building
efficiency and maximise potential returns. Currently we are in
detailed negotiations to finance construction of this development
and intend to commence work in Q3 2024, targeting apartments
available for sale in Q1 2026.
Purley
We have also worked with the same joint venture partner to acquire
options on six semi-detached houses with large gardens in Purley,
London. A planning application submitted in 2022 for 44 flats and 4
town houses was rejected in January 2023 despite being
recommended for approval by the planning officer. Our appeal,
although we won on design and construction matters, was
ultimately unsuccessful and we are currently considering whether to
submit a new application.
DEBT MANAGEMENT
In September 2023 the £12.7 million loan with QSix on Orchard
Square (in Sheffield) expired. The borrower on this loan is Orchard
Square Limited, our 100% owned subsidiary, and the loan is secured
solely against the asset itself with no recourse to the LAP Group. In
May 2023, we instructed agents to sell Orchard Square in order to
repay the loan. The decision to sell was taken as the lending market
for shopping centres was too weak to support a debt refinancing.
Several offers were received for the centre and heads of terms
reached with one buyer, who was then unable to complete. Since
the loan expired, we have been working collaboratively with QSix in
an arrangement whereby LAP continues to manage the centre on
their behalf, pending another approach to the investment market as
and when sentiment improves; QSix controls the timing of the sale
and approves asset management initiatives. Consequently, we have
written off our investment in Orchard Square and have recognised
in the accounts the maximum loss we can incur (£1.93 million).
Orchard Square Limited is no longer consolidated within the LAP
Group and the loan is not shown in our year end balance sheet. This
is discussed further in note 6 to the accounts.
Our £13.6 million 5-year term loan with QIB (UK) PLC is fully
compliant and secured against a portfolio of retail and industrial
properties. The interest rate on the loan with QIB is at the Bank of
England base rate + 3.95% and there is no amortisation.
DRAGON RETAIL PROPERTIES
Since 2001, Dragon has owned a property in Clifton, Bristol let
partly to Boots the Chemist and partly to Lizard Lounge, one of
Bristol’s best-known nightclubs. Dragon’s loan of £0.95 million from
Santander originally expired in September 2020, but has been
extended to July 2024 and paid down to £0.8 million subsequent to
the year end. Santander has indicated that it is willing to provide a
new term loan, has recently completed a valuation, and we expect
to complete this in the near future.
2 London & Associated Properties PLC 2023
STRATEGIC REPORT Chairman and Chief Executive’s review 2023
Bisichi continues to work closely with Vunani Mining, its Black
Economic Empowerment (BEE) partner in Black Wattle and Sisonke
Coal processing, to be responsible stewards of its legacy coal
operations, taking into account the climate related risks outlined in
our climate report and the impact these risks may have on all our
stakeholders.
We are pleased to include in our annual report our climate change
report on page 12. Bisichi’s operations contribute over 97% of our
CO2 emissions and are the operations on which we have focused in
this report. Bisichi recognises that climate change represents one of
the most significant challenges facing the world today and supports
the goals of the Paris Agreement and the UN Framework
Convention on Climate Change.
While we remain confident in Bisichi’s ability to achieve significant
value from its South African operations, the Company is committed
to diversifying its future business activities into areas other than
coal. Bisichi is continually looking at alternative independent mining
and renewable energy related opportunities, as well as new
opportunities to add to the existing UK property investment
portfolios.
In the UK, Bisichi saw its rental revenue from its retail property
portfolio improve during 2023. Overall, Bisichi billed revenue from
its directly owned property portfolio of £1.3 million (2022: £1.1
million) during the year. In light of the challenging year, the directors
of Bisichi recommended a final dividend of 4p (2022: 12p, including
special dividend) per share, of which LAP would receive £0.2 million.
This would take the total dividends per share for the year to 7p
(2022: 22p) if approved by its shareholders.
Finally, we would like to thank employees, advisers and stakeholders
for their ongoing efforts and support.
John Heller,
Chairman and Chief Executive
29 April 2024
BISICHI PLC
For 2023, Bisichi plc, our 41.6% owned subsidiary, made a profit
before interest, tax, depreciation and amortisation (EBITDA) of £3.4
million (2022: £40 million) and an operating profit before
depreciation, fair value adjustments and exchange movements
(Adjusted EBITDA) of £2.6 million (2022: £39.4 million).
During 2022, Bisichi benefited from significantly higher prices of
Free on Board (FOB) coal from Richards Bay Coal Terminal (API4
price). However, during 2023, the weekly API4 price averaged only
US$120 compared to US$273 in 2022. In addition to the weaker
international coal price, constraints on transporting coal for export
on the South African rail network, which were largely beyond
Bisichi’s control, significantly impacted export sales during the
period. Due to the lack of available rail capacity, Bisichi only
exported 134,000 metric tonnes in 2023, roughly half the 262,000
metric tonnes sold in 2022 and an even lower percentage of the
320,000 metric tonnes exported in 2021.
Limited rail capacity in turn had a further impact on earnings during
the period, as coal allocated for export was eventually sold into the
domestic market at prices that were significantly lower than the
export price achievable by rail through Richards Bay. Transnet, the
South African state rail operator, and the wider South African coal
industry are working hard and collectively to implement measures to
increase rail capacity. Bisichi is pleased to report that in 2024, to
date, there has been an improved performance in railed coal export
volumes compared to the same period in 2023.
Bisichi remains optimistic that the measures, once fully
implemented, will have a significantly positive impact on both the
export and domestic prices achievable for its coal.
At Black Wattle, Bisichi’s South African coal mining operation,
difficult mining conditions impacted profitability during the period.
During the year, Bisichi achieved production of 354,000 metric
tonnes (2022: 301,000 metric tonnes) in the first half of the year
and 453,000 metric tonnes (2022: 523,000) in the second half of
the year. For the majority of 2023, geological issues reduced
production from the opencast mining area as well as increasing
related mining and blasting costs. In order to mitigate these issues,
the mine opened a lower cost second mining area in the third
quarter of 2023. Since the commencement of this new mining area,
Bisichi has seen a significant improvement in mining production and
lower operating costs and expects the improved performance at
Black Wattle to continue throughout 2024.
The lower coal production levels at Black Wattle in 2023 had a
knock-on effect on overall levels of coal processed at Sisonke Coal
Processing. Bisichi sold 1.031 million metric tonnes during the year
compared to 1.287 million metric tonnes in 2022. The decrease in
Bisichi’s mining revenue during the period to £49.3 million (2022:
£95.1 million) can mainly be attributed to the lower prices
achievable for coal and the lower overall quantity of coal sold,
particularly into the export market. Looking forward into 2024,
Bisichi is expected to continue to see the benefits, both in terms of
mining cost and production, from the new mining area at Black
Wattle.
London & Associated Properties PLC 2023 3
STRATEGIC
REPORT
Financial and performance review
The financial statements for 2023 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 41.6% 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” (58.4%) 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. Another 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 effect of consolidating the results, assets and liabilities of the
property business and the mining company makes 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.
LONDON & ASSOCIATED PROPERTIES PLC
We own industrial and community retail property and invest in and
seek to develop housing for local communities. 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 2023 have continued to be:
• Provide environments in which tenants can thrive.
• Continually improve the business’ operating cashflow.
• Reduce exposure to the fashion led or shopping centre
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.
4 London & Associated Properties PLC 2023
Rental Income and Occupancy
As at 19 April 2024 Q1 2024 collections were 92% (2023: 90%).
We continue to engage with occupiers to ensure our properties
contain a diversified mix of tenants to match customers’ evolving
requirements. This is particularly applicable to our essential retail
assets, that serve local communities.
Like for like net rental income was up by £49,000 (1.9%), which
particularly reflects rent increases being achieved at lease events
within our industrial portfolio.
Like for like gross rental income excluding sales was up £50,000 as
shown below. There was £196,000 of net increases in rents from lease
reviews, renewals and new lettings and a net decrease of £146,000
from rent lost due to expiries and subsequent vacant periods.
Gross Rental Income (£'000)
50
{
196
5,337
(845)
(146)
4,542
2022
Sales
Leasing
Expiries
2023
Void levels decreased to 2.7% (2023: 3.6%). Void levels remain low
across the portfolio.
Property Investment Activities
There were no property disposals or acquisitions during 2023, apart
from the relinquishing of our interest in Orchard Square Limited as
described below and in note 19.
LAP continues to look for investment opportunities, particularly
within the industrial sector.
LAP also continues to develop and refurbish all its properties as
appropriate to provide environments in which tenants can thrive.
Our joint venture residential developments are discussed later in
this review.
Funding & Refinancing Activities
No loans were repaid, or new loans or other forms of finance taken
out in 2023.
Our 5-year, £13.6m term loan with QIB taken out in 2022 was
covenant compliant throughout the year.
During the year our term loan with Phoenix CRE S.à.r.l of £12.7 million
became due. This loan is secured on a single property, Orchard Square,
Sheffield, which is fully owned by Orchard Square Limited, a subsidiary
of LAP. The loan is non-recourse to the rest of the LAP Group. The
property was marketed for sale in 2023 with an agreement for sale
being reached with a buyer who was then unable to complete. LAP is
working collaboratively with and under the direction of the lender to
manage the property, completing key asset management activities
prior to remarketing the property for sale when sentiment improves.
STRATEGIC REPORT Financial and performance review
STRATEGIC REPORT
As LAP has declined the opportunity to repay the loan and cure the
breach arising as a result, LAP has effectively lost control of the
asset. LAP no longer has exposure, or rights, to variable returns from
its involvement with Orchard Square Limited. In accordance with
IFRS10, the investment in Orchard Square Limited has been treated
as having been relinquished during the year and neither the loan nor
the asset is shown in the accounts at 31 December 2023.
INCOME STATEMENT
Further details can be found in note 19 to the accounts.
The loan relating to our development joint venture is discussed later
in this review.
BUSINESS ANALYSIS
Rental income
Service charge income
Management income from third party properties
LAP Revenue
Direct property costs
Impairment of inventory
Overheads
Depreciation
Operating (loss)/profit
Finance income
Finance expenses
Result before valuation movements
Other segment items
Net decrease on revaluation of investment properties
Loss on disposal of subsidiary
(Loss)/profit on disposal of investment properties
Profit/(loss) on disposal of fixed assets
Adjustment to interest rate derivative
Revaluation and other movements
LAP loss for the year before taxation
2023
£’000
3,323
451
18
3,792
(1,553)
-
(2,254)
(266)
(281)
110
(2,094)
(2,265)
(150)
(1,930)
-
4
-
(2,076)
(4,341)
2022
£’000
4,175
788
18
4,981
(1,994)
(3,098)
(2,665)
(265)
(3,041)
24
(2,120)
(5,137)
(5)
-
(83)
36
70
18
(5,119)
Note: The figures exclude inter-company transactions.
The above figures for LAP and commentary below exclude the cash
items of management fee income from Bisichi and Dragon of
£236,000 (2022: £236,000) and dividend income from Bisichi of
£666,000 (2022: £711,000).
The non-cash item, loss on disposal relates to our decision not to
cure the breach of Orchard Square Limited’s loan covenants and the
subsequent loss of control as prescribed by IFRS10.
We have again managed to reduce our overheads this year, even
after adjusting for one off £0.2 million loan refinance charges in
2022, despite significant cost inflation.
LAP generated an adjusted EBITDA of £0.9 million (2022: £1.3
million).
EBITDA
Operating (loss)/profit
Excluding non-cash items:
Depreciation & amortisation
Impairment of Inventory
EBITDA
Income from subsidiaries:
Management fees
Dividend income
Adjusted EBITDA
2023
£’000
(281)
266
-
(15)
236
666
887
2022
£’000
(3,042)
265
3,098
321
236
711
1,268
LAP generates the majority of its income from property rentals,
property management fees and development activities.
Whilst there are increased interest costs on our unhedged loans
during the year directly arising from increases in the Bank of England
base rate, due to the removal of Orchard Square Limited in July 2023,
total interest costs year on year are slightly lower. Excluding Orchard
Square Limited, interest costs are £1.34 million (2022: £1.14 million)
vacancy rates and are not as affected as other asset classes by recent
increases in interest rates. This further strengthens our view that the
market is differentiating between local essential retail investments
and shopping centre or fashion focused retail investments.
Whilst our industrial assets are lower yielding and have seen their yields
more affected by rises in interest rates, this has been offset by several
pleasing rent increases following lease events at these properties.
Investment property valuation reductions of £0.15 million (2022:
£nil) arose from a decrease in retail property values of £0.08 million
(2022: £0.1 million) and a decrease in industrial property values of
£0.07 million (2022: increase £0.1 million). Our retail assets entirely
consisting of essential retail, are relatively high yielding, have low
Producing a profit through ongoing asset management activities to
generate further rental income, investing cash currently on deposit at
the appropriate time into new property investments combined with
generating returns from our existing investments, including Bisichi,
remains the key focus of the business for the future.
London & Associated Properties PLC 2023 5
STRATEGIC REPORT Financial and performance review
BALANCE SHEET
SEGMENT ASSETS
Non-current assets – property
Non-current assets – property, plant & equipment
Trading assets
Assets held for sale
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
2023
£’000
23,801
268
8,889
545
3,799
1,237
38,539
(17,650)
(3,238)
(1,272)
(22,160)
16,379
2022
£’000
28,386
543
22,862
-
4,685
1,328
53,915
(30,306)
(4,253)
(1,375)
(35,934)
17,981
Note: The figures exclude inter-company transactions between LAP, Bisichi and Dragon.
Total assets, consisting mainly of trading and investment properties,
have reduced from £53.9 million to £38.6million, with the disposal
of the Sheffield trading property held at £14.75 million.
Total liabilities, consisting mainly of bank loans, have reduced from
£35.9 million to £22.0 million following the removal of the Sheffield
trading property and its associated bank loan of £12.6 million.
Property, plant and equipment reduced by £0.3 million in the year
due to depreciating right of use asset that represents the lease of
our head office. The lease comes to an end in November 2024 at
which point the asset will be fully depreciated. The present value of
future rentals of £0.2 million is included within liabilities.
LAP’s main borrowings consist of a £13.6 million term loan facility
expiring in August 2027 and a rolling development loan relating to
West Ealing of £4.4 million that expires in April 2024. As in previous
years, all loans 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
2023
£’000
17,650
(3,799)
13,851
16,545
83.7%
2022
£’000
30,306
(4,685)
25,621
17,981
142.5%
The business has not set a target gearing level but monitors its debt and asset values constantly to maintain an appropriate level,
considering market sentiment, the availability and cost of debt and cash flow forecasts.
CASH FLOW
CASH FLOW FROM OPERATIONS
Cash inflows/(outflows) from operating activities
Cash inflows from investing activities
Cash outflows from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at 1 January
Cash and cash equivalents at 31 December
2023
£’000
1,121
641
(2,648)
(886)
4,685
3,799
2022
£’000
(723)
3,458
(3,523)
(788)
5,473
4,685
Note: The figures within the LAP cashflow include inter-company transactions such as management fee income of £236,000 (2022: £236,000) and dividends
from Bisichi of £977,000 (2022: £711,000).
Cash outflows from operating activities include expenditure on
development properties of £0.8 million (2022: £0.7 million).
Excluding this expenditure, adjusted cash inflows from operating
expenditure were £1.9 million (2022: £Nil).
Investing activities include net cash from property acquisitions and
sales of £nil (2022: income of £2.6 million), along with dividend
income from Bisichi of £0.7 million (2022: £0.7 million).
Financing activities in 2023 include net loan repayments of £0.3
million (2022: 1.2 million) and interest payments on the servicing of
debt of £2.3 million (2022: £2.3 million). Bank of England interest
rate increases during the year resulted in a £0.5 million increase in
interest payable compared to 2022, whilst the exclusion of Orchard
Square and its loan from the consolidated results in July 2023
reduced interest payable by £0.5 million. Interest rate risk is
discussed further in note 22.
6 London & Associated Properties PLC 2023
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 £8.9
million has been spent to date (2022: £8.1 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 £4.4
million (2022: £4.4 million), described further in note 19. Planning
permission is held for the creation of 56 new residential apartments
and ground floor shops on the site. Construction start is planned for
Q3 2024.
STRATEGIC REPORT Financial and performance review
DEVELOPMENT PHYSICS LIMITED
Development Physics is a joint venture between LAP, Bisichi and
Metroprop Real Estate, owned equally by the three parties, set up,
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 is progressing through
the planning process for its development. £0.5 million (2022: £0.3
million) has been spent to date on the development.
BISICHI PLC
Although the results of Bisichi PLC have been consolidated in these
financial statements, 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 2023
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.
2023 was a difficult year for Bisichi’s South African coal mining and
processing operations. Lower export coal prices and sales volumes of
export coal significantly impacted their profitability. With more stability
in the coal market going into 2024, Bisichi management will be focusing
on improving production levels and keeping operating costs low.
The Bisichi group’s profit before tax was £0.8 million (2022: £38.3
million). In South Africa, Black Wattle produced 0.80m metric tonnes
of Run of Mine Coal in 2023 (2022: 0.82m metric tonnes).
Geological issues in areas mined at Black Wattle, Bisichi’s South
African mining operation, had a significant impact on production,
particularly in the first half of 2023. During the second half of the
year exports continued to be limited by constraints in transporting
coal for export on the South African rail network. During the year
1.03 million metric tonnes of coal were sold compared to 1.29
million metric tonnes in 2022. Of this, 0.13 million metric tonnes
were export sales (2022: 0.26 metric tonnes) and 0.90 million
metric tonnes were domestic sales (2022: 1.03 million metric
tonnes) The API4 price averaged $120 in 2023 compared to $273
in 2022. The stabilisation of global energy markets in 2023,
compared to 2022, had a significant impact on prices achievable for
coal over the year.
UK retail property investments were valued at the year end at
£10.610 million (2022: £10.465 million). The property portfolio is
actively managed by LAP and generated rental income of £1.26
million in the year (2022: £1.11 million).
During the year Bisichi’s total non-current and current listed equity
related investments held at fair value through profit and loss
increased to £15.0 million (2022: £13.5 million). The Group
achieved dividend income from investments during the period of
£0.56 million (2022: £0.59 million) and a gain in value from
investments of £0.8 million (2022: £1.0 million). The Group’s listed
equity related investment portfolios comprise primarily listed
equities and listed equity related funds involved or invested in
extractive and energy related business activities, including entities
involved in the extraction of commodities needed for the clean
energy transition.
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 an R85 million revolving facility to cover the working
capital requirements of Bisichi’s South African operations. The
facility is renewable annually and is secured against inventory,
debtors and cash that are held in Bisichi’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 £3.9 million (2022: £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 £10.6 million.
No banking covenants were breached by Bisichi during the year.
Bisichi’s cash and cash equivalents decreased during the year by
£7.8million (2022: increase of £6.9million). The net balance of cash
and cash equivalents (including bank overdrafts) at year end was a
cash negative amount of £0.3 million (2022: positive net cash of
£7.4 million).
Bisichi has considerable financial resources available at short notice
including cash and cash equivalents (excluding bank overdrafts) of
£3.2 million (2022: £10.6 million) and listed investments of £15.0
million (2022: £13.5 million) as at year end. The above financial
resources total £18.2 million (2022: £24.1 million).
Bisichi’s net assets at 31st December 2023 were £33.6 million
(2022: £35.6 million).
Bisichi recognises the need, and is committed to, diversifying its
future business activities. Bisichi is continually looking at alternative
mining, commodity and renewable energy related opportunities, as
well as new opportunities to add to their existing UK property
investment portfolios. In the interim, Bisichi continue to work
closely with Vunani Mining, their BEE partner in Black Wattle and
Sisonke Coal processing, in being responsible stewards of their
legacy coal operations taking into account the climate-related risks
outlined in Bisichi’s climate report in their 2023 report and accounts
and the impact these risks may have on all stakeholders.
DRAGON RETAIL PROPERTIES LIMITED
Dragon is a UK property investment company, owned 50:50 by LAP
and Bisichi. The company has a Santander bank loan of £0.95
million secured against its investment property, which is covenant
compliant, see note 19.
The loan originally expired in October 2020 but has been extended
to July 2024 and we are negotiating a new longer term loan with
the existing lender.
Dragon incurred management fees of £72,000 (2022: £72,000)
split equally between the two joint venture partners. Dragon has
net assets of £1.2 million (2022: £1.2 million). Dragon continues to
trade at near break-even, excluding property revaluations.
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 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 7 years.
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 22 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;
London & Associated Properties PLC 2023 7
STRATEGIC REPORT Financial and performance review
Overall position
With a quality property portfolio comprising tenants with a mix of
short and 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. 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 £12.3 million (2022: £11.6
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 2023 (2022: £nil).
Looking forwards to medium term trading, we intend to pursue our
previously stated strategies. These include investing in both our
essential community retail properties which have inbuilt defensive
qualities and industrial property where we have enjoyed success.
We will recycle properties where we feel asset management
opportunities are limited and 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.
Our development in Ealing has received planning consent and
construction work is due to commence shortly, with completed
apartments being available to purchase in Q1 2026.
We will continue to consider further joint venture opportunities to
undertake residential development.
Bisichi
In the first quarter of the 2024, Bisichi have seen improved
production from Black Wattle, their coal mining operation. Coal
prices have stabilised and the availability of rail for export has
improved for the year to date in comparison to 2023. In light of this,
Bisichi management will be focusing on sustaining production levels,
maintaining a diversified sales market and keeping operating costs
low.
Bisichi continues to seek and evaluate opportunities to transition
into alternative mining, commodity and renewable energy related
opportunities through new commercial arrangements.
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:
• The likely consequences of any decision in the long term: see
Principal Activity, Strategy & Business Model and Risks and
Uncertainties on pages 9 to 10;
• 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 12 to 19;
• The need to act fairly between members of the Company: see the
Corporate Responsibility section on pages 13 to 22;
• The desirability of maintaining a reputation for high standards of
business conduct: see the Corporate Governance section on
pages 27 to 28.
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 22 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.
Geo-political events in Ukraine and the Middle East are no longer
significantly impacting global energy prices. Although the outcome
of these events 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.
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
2023 Financial Statements which are available on their web site:
www.bisichi.co.uk.
8 London & Associated Properties PLC 2023
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 and coal processing in South Africa. Further information is available in its 2023 Financial
Statements which are available on their web site: www.bisichi.co.uk
STRATEGIC PRIORITIES ARE
OUR STRATEGY IS
Maximising income
Creating quality property
Capital strength
Maintain the value of
investment in Bisichi
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
ASSET MANAGEMENT:
DESCRIPTION OF IMPACT
MITIGATION
Tenant failure
Financial loss.
Leases not renewed
Financial loss.
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.
Asset liquidity (size and
geographical location)
PEOPLE:
Assets may be illiquid and affect flexing
of balance sheet.
Regular reporting of current and projected position to
the Board with efficient treasury management.
Retention and recruitment of staff
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.
REPUTATION:
Business interruption
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.
London & Associated Properties PLC 2023 9
STRATEGIC REPORT
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 41.6% 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
DESCRIPTION OF IMPACT
MITIGATION
Coal prices can be impacted materially
by market and currency variations and
geopolitical factors
Affects sales value and therefore
margins.
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. Bisichi has not entered into
any such contracts in 2022 and 2023.
Bisichi assesses on an ongoing basis the impact
of volatility in global energy markets, economic
volatility and climate change related risks may
have on the Group’s mining operations and
future investment decisions
Use of independent geology experts, careful
attention to regulations, health and safety
training, employee dialogue to minimise
controllable risks.
Mining operations are inherently risky.
Mineral reserves, regulations, licensing,
power availability, health and safety can
all damage operations
Currency risk
Loss of production causing loss of
revenue.
Affects realised sales value and
therefore margins.
Regular monitoring and review of forward
currency situation.
Cashflow variation because of mining risks,
commodity price or currency variations
Variations can deliver significant
shifts in cash flow.
UK property investments used to offset high
risk mining operations.
Socio-economic, political instability &
regulatory environment risk
The Bisichi Group is exposed
to a wide range of political,
economic, regulatory, social and
tax environments, particularly in
South Africa.
Bisichi’s assets and investments are diversified
across various countries which reduces its
exposure to any particular country. Its Board
regularly assesses the political and socio-
economic environment and related risks of the
countries it operates and invests in.
There has been no change in the risks faced by either LAP or Bisichi.
10 London & Associated Properties PLC 2023
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.
The like-for-like rental income of the
group by property has increased by
£49,000 (1.9%) (2022: increase of
£15,000 and 0.4%).
In the continuing difficult trading
environment, this is considered
positive.
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.
Void levels decreased to 2.7% (2022:
3.6%).
There continue to be minimal voids
across the portfolio which is positive.
CAPITAL STRENGTH – GROWTH IN NET ASSET VALUE PER SHARE
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.
Movement in the net
assets per share.
The net assets per share decreased
by 4.76 pence per share (12.5%) to
33.38p (2022: 38.14p).
While this is a poor result, it reflects
the impact of a weak lending market
on property valuations.
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
2021 2022 2023
VOIDS
2021
2022
2023
NET ASSETS PER SHARE
2021
2022
2023
London & Associated Properties PLC 2023 11
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 2023:
• Black Wattle Colliery recorded 2 Lost time Injuries during
CLIMATE CHANGE REPORTING
The Group recognises that climate change represents one of the most
significant challenges facing the world today and supports the goals
of the Paris Agreement and the UN Framework Convention on
Climate Change.
2023 (2022: 2).
Our aim is to:
• One case of Occupational Diseases were recorded.
• minimize our contribution to greenhouse gas emissions;
• One claim for the Compensation for Occupational Diseases
• to consider and plan for the physical and transitional risks of
were submitted.
In South Africa, the Broad-Based Socio-Economic Empowerment
Charter for the Mining and Minerals Industry (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 continues 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 2023 Financial Statements which are available on their
web site: www.bisichi.co.uk
climate change on our operations; and
• to work with stakeholders, including local government and
communities, to mitigate the impact of climate-related challenges.
In the current year, the Group has aligned climate disclosures in this
Strategic Report to the four Task force on Climate-related Financial
Disclosure (“TCFD”) recommendations as follows:
TCFD AREA
TCFD CONSIDERATION
LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC
Governance
Board’s oversight of climate risk
and opportunities
The LAP & Bisichi Boards have ultimate responsibility for the monitoring and
development of the Groups’ approach to climate risk and opportunities.
In light of the size of the Group, ESG matters are considered as part of the
Group’s regular board meetings and at other appropriate points during the year.
The Board has developed and implemented a Climate Change Policy and monitor
the content, effectiveness and implementation of this Policy on a regular basis.
The Group’s Climate Change Policy can be found on the Group’s website at
www.lap.co.uk.
Short, medium and long term strategic decisions, including those on capital
allocation and portfolio management, are considered by Group management
who make recommendations to the Board. Climate related issues and policy are
included as significant factors for consideration in the decision making process,
both in the management recommendation and in the Board’s consideration of
the relevant issue.
On-going climate related issues are integrated into the Group’s business risk
management process and reporting thereof to the Board and Audit Committee.
The Group has regard to best practice in its area of operations, its health and safety
and environmental obligations and seeks to ensure high standards of business
conduct in its operations. It will review compliance with the TCFD Recommendations
on an ongoing basis, and report on its performance on a yearly basis.
Responsibility for the application of this Policy rests with, but is not limited to,
all employees and contractors engaged in relevant activities under the Group’s
operational control. The Group’s managers are responsible for promoting and
ensuring compliance with this Policy and any related individual site-level policies
and practices.
At Bisichi’s South African operations, management have commenced engagement
with key stakeholders in order to ensure awareness of our climate change policy
as well as the potential impact of climate change on our environment and
operations. We continue our collaboration with our contractors on GHG Emission
Reporting and we are actively looking for opportunities to partner with our
stakeholders to drive the uptake of carbon neutral solutions.
For material strategic or financial decisions, the Group may consider procuring
expert advice from third party consultants on the impact in the short, medium
and long term of the decision, and ensure that such information is fully
considered as part of the evaluation of the relevant matter.
Management’s role in assessing
and managing climate-related
risks and opportunities
12 London & Associated Properties PLC 2023
STRATEGIC REPORT Corporate responsibility
TCFD AREA
TCFD CONSIDERATION
LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC
Strategy
Climate-related risks and
opportunities the Group has
identified over the short,
medium, and long run
Bisichi considers the current life of mine of its South African operations to fall
within a short to medium term horizon. Within this horizon, climate change
transition risks may impact their South African coal mining and processing
operations. Risks include:
• coal price and demand volatility;
• availability and cost of financing and third party services such as insurance;
• delays or restrictions to regulatory approvals;
• early retirement of our coal processing and mining operations; and
• Carbon pricing and taxes, that may create additional costs through the
value ch ain.
The Group have assessed physical climate risk profiles produced by the World
Bank, particularly in relation to the South African operations. Bisichi considers
the physical risks of variations in climate over the current life of mine of the
South African operations to be mainly limited to an increased risk of seasonal
flooding that may impact the operating efficiency, costs and revenues of the
mining and processing operations.
In a longer term horizon, and in a scenario where the useful life of Bisichi’s
South African operations is extended, the above short to medium term
transitional risks are expected to continue to apply. In addition, in a scenario,
such as the International Energy Association’s (“IEA”) Pathway to Net Zero by
2050 (“NZE 2050”), where climate policies are effectively implemented that support
a transformation to net zero emissions by 2050 and limiting the rise of global
temperatures to 1.5°C by the end of the century, policies will lead to significant
coal demand decline over the longer term. This in turn will impact the carrying
value and long term viability of Bisichi’s South African coal operations as well as
the stakeholders and communities reliant on our operations. Extreme weather
events, over the long term in South Africa, such as floods, and droughts, as well as
changes in rainfall patterns, temperature, and storm frequency will also affect the
operating efficiency, costs and revenues of the mining and processing operations,
supply chains and impact the communities living close to the operations.
Clean coal research and technology initiatives such as carbon capture may result
in opportunities to increase the useful life of Bisichi’s South African coal mining
and processing operations. In addition, the clean energy transition provides
opportunities for Bisichi to diversify its business activities and equity investment
portfolio into renewable and extractive industries that will benefit from and are
critical to the transition to a clean energy system.
The main sources of scope 1 & 2 Green House Gas (GHG) emissions for the
Group have been associated with the South African coal mining and processing
operations, namely due to fuel combustion and electricity usage. Improvements
in the cost competitiveness of lower emission sources of energy provide
opportunities to lower overall operating costs at our operations as well as
reduce overall GHG Emissions.
In the UK we have identified the following material physical and transitional risks
related to our UK property portfolio:
• Long term physical risk through changes in climate, flood risk and extreme
weather; and
• Short-term transition risk from emerging regulation related to energy
performance (“EPC”) and enhanced disclosures
London & Associated Properties PLC 2023 13
STRATEGIC REPORT Corporate responsibility
TCFD AREA
TCFD CONSIDERATION
LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC
Strategy
Impact of climate-related risks
and opportunities on businesses,
strategy, and financial planning
Bisichi’s management have incorporated and regularly review the following
strategies and procedures in relation to their South African coal operations:
• Review of the impact of climate change and the global transition to clean
energy, particularly in relation to the current life of mine of Bisichi’s coal
operations;
• Regular research and analysis of the coal market demand outlook;
• Regular research and analysis on the outlook of the South African coal mining
industry and climate change regulation including mining regulation, energy
procurement and licensing, and carbon taxing;
• Regular communication with financial service providers and suppliers on any
future changes to availability and cost of services.
• Regular research and analysis on the progress of clean coal technology and
related regulatory initiatives; and
• Regular dialogue and seeking collaboration with governments and local
communities and other stakeholders on climate change-related challenges.
Bisichi have identified the need to mitigate GHG emission heavy sources of
electricity usage at our coal washing plant. Management are currently in the
process of evaluating opportunities to reduce these emissions taking into
particular consideration the financial viability and long term sustainability of the
projects.
The below areas have been identified where GHG emissions can be further
reduced through:
• Minimising land clearance for new project facilities;
• Adoption of mitigation strategies for preserving integrity of environment;
• Minimising tree felling;
• The use of modern, energy and fuel efficient equipment;
• The inclusion of the impact of GHG emissions as an evaluation criteria in
the selection of mining contractors, suppliers and equipment. Particular
consideration will be given to the choice of vehicles used for the mine fleet,
employee transportation and the haulage fleet. Where possible energy and fuel
efficiency will be a factor in the selection of vehicles as this will not only reduce
GHG emissions but also reduce operating costs. In addition to the efficiency
of the fleet itself, opportunities will be sought for improving the use of the
vehicles.
• Scheduling of excavation and haulage activities to optimise activities and avoid
double handling, where this is operationally practical; and
• The upgrading of energy-intensive machinery over time will be used to improve
efficiency and reduce CO2 emissions compared to machinery that has been
removed.
Further energy efficiency opportunities will also be investigated.
Potential water scarcity has increased management focus on opportunities to
increase the usage efficiency of our existing water supply and water recycling
systems. The introduction of a closed loop filter press system for coal fines in
2019 and additional other work concluded or planned on our water recycling
systems at our coal processing facility will result in a lowering of our overall cost
of water and the environmental footprint of our operations. Increased risks of
flooding have been incorporated at planning stage in new opencast mining areas
that have been opened.
Transition and physical risks related to climate change are regularly discussed
at Bisichi’s Board level, particularly those related to the long term viability of
Bisichi’s South African coal operations and the future allocation of capital. Bisichi
regularly considers the need for coal as an energy source both globally and in
South Africa over the life of mine of our operations and in its long term planning.
Bisichi is committed to responsible stewardship of their legacy South African coal
assets taking into account the impact climate change related risks may have on all
our local stakeholders. Bisichi recognise the need to collaborate with government,
employees and communities, to ensure a just transition for our stakeholders
through the transition to a low carbon economy.
Bisichi regularly evaluates and continues to seek opportunities to diversify its
business activities and equity investment portfolio, particularly into renewable
and extractive industries that predominantly mine commodities identified by
the IEA as critical in the transition to a clean energy system. Any significant
developments will be reported to shareholders in due course.
The Board continue to monitor and regularly review adherence by the Group to
changes to UK EPC. The Group have incorporated the ongoing impact of EPC
regulatory standards into its decision making process.
14 London & Associated Properties PLC 2023
STRATEGIC REPORT Corporate responsibility
TCFD AREA
TCFD CONSIDERATION
LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC
Strategy
Resilience of strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower
scenario.
Risk
management
Processes for identifying and
assessing climate related risks.
Processes for managing
climate-related risks.
Bisichi’s management have incorporated climate scenarios into their strategic
operational planning and review process. Bisichi have assessed the resilience of
our coal operations compared to the IEA’s NZE2050 Scenario, which sets out
what additional measures would be required over the next ten years to put the
world as a whole on track for net zero emissions by mid-century. The Scenario
indicates a significant coal demand decline over the longer term impacting the
potential commercial longevity of Bisichi’s South African operations. In addition
Bisichi have assessed physical climate risk profiles for their South African
operations obtained via the World Bank Group’s Climate Change Knowledge
Portal. The outcomes of scenario testing and physical climate profiling have
been incorporated into the long term strategic planning and decision making
processes of Bisichi.
Over the short to medium term, considering the potential impact of transitional
climate risks on Bisichi Group’s South African operations, the Group’s climate
strategy and policy is regularly scrutinised by Bisichi’s senior management and
Board in regard to any changes in coal demand outlook and climate regulatory
policy that may impact our operations over the current life of mine. A recent
example being the Just Energy Transition Investment Plan (“JET IP”) announced
by the South African Government for 2023-2027.
The Board encourages senior and local management to assess principal and
emerging climate-related risks on a regular basis. Risks identified are to be
reported to and discussed at Board level and incorporated into the strategy and
planning of the Group.
The Group’s risk management processes are developed, implemented and
reviewed by the Board, who retain ultimate responsibility for them.
In addition to the Group’s management of its principal risks and uncertainties,
climate change impacts are mainly considered from two environmental
perspectives, the impact of our South African coal mining and processing
operations on the climate and the effect of global climate change on our
operations and stakeholders.
Heavy sources of GHG emissions have been identified from our annual
Greenhouse Gas emissions recording and reporting.
The Bisichi Board and Senior management remain in regular communication
with local regulatory bodies, climate research providers, coal market analysts,
suppliers, and services providers to ensure climate related risks and changes in
regulatory policy are identified and assessed on a regular basis. Bisichi’s senior
and local management in South Africa are encouraged by the Board to identify
local climate related risks and changes in regulatory policy that may impact our
South African coal operations.
Bisichi’s management continually engage with governments and local
communities and other stakeholders on climate change-related challenges
impacting the local area and the South African coal industry at large.
The Board and Senior management co-ordinate the Group’s analysis and
planning of the effects of climate change on our business. The Board discuss
regularly the impact of any risks identified through the organisation, particularly
in relation to material matters that may impact the viability of the Group’s coal
operations. The Bisichi Board regularly review and analyse coal market and
outlook research, particularly in relation to targets set out in local climate policy
such as JET IP and global climate scenarios such as NZE 2050.
The mitigation of GHG emissions and identification of climate related risks has
been integrated into our corporate policy, project and procurement evaluation
criteria at Bisichi’s South African operations to ensure it is consistently applied
and managed.
The Group continuously monitors and reports key performance indications
relating to environmental matters, including the location of CO2 emissions, their
levels and intensity.
On an ongoing basis, the Group assesses the impact of carbon pricing, climate
regulation and taxation on going concern assumptions, the Group’s current and
future strategy and operations.
London & Associated Properties PLC 2023 15
STRATEGIC REPORT Corporate responsibility
TCFD AREA
TCFD CONSIDERATION
LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC
Risk
management
Metrics and
targets
Processes for identifying,
assessing, and managing
climate-related risks are
integrated into the overall
risk management.
Metrics used by the Group
to assess climate related risks
and opportunities in line with its
strategy and risk management
process
Scope 1, Scope 2 and,
if appropriate, Scope 3
greenhouse gas (GHG)
emissions, and the related risks.
Targets used by the Group
to manage climate-related
risks and opportunities and
performance against targets.
New or evolving climate change risks identified by both senior and local
management are to be reported to and discussed at Board level and
incorporated into the strategy, planning and climate policy of the Group.
Where possible, plans to mitigate the effect of climate change on Bisichi’s
operations and local communities will be integrated into the mines regulatory
environmental management and social and labour plans.
A financial segmentation of the Group’s South African coal mining and
processing assets that are impacted by the climate related risks and
opportunities outlined above can be found in Bisichi’s 2023 Financial Statements
which are available on their website: www.bisichi.co.uk.
Bisichi recognises that its ability to reduce overall carbon emissions is
constrained at present by the main segment of it business activities, being
coal mining and processing in South Africa. Bisichi has, however, sought to
appropriately target its emission reduction strategy to the elements of its
operations where a meaningful reduction in greenhouse gas emissions can be
effected, and this will be reflected in the targets set by the Group in due course.
The Group measures and report our CO2 emissions across the Group including
a breakdown of UK and South African operations. See below for disclosure of
emissions during the year.
The Group is committed to measuring and reporting our scope 1 and 2
greenhouse gas emissions, see below for disclosure of emissions during the year.
Scope 3 emissions are not currently measured given the size and life of mine of
the Group’s South African coal operations and the uncertainty and impracticality
in accurately measuring such emissions throughout the value chain. The Group
will continue to assess the above approach as part of its continued review of
compliance with the TCFD Recommendations and taking into account any
material changes in future business activities.
Over 99% of the Group’s GHG Emissions relate to Bisichi’s South African coal
operations which has a current life of mine of 7 years.
In the short term, the Group’s continues to evaluate areas where GHG emissions
can be further reduced, particularly scope 2 emissions related to the heavy sources of
electricity usage at Bisichi’s coal washing plant. Once the Group has identified the
scope of further potential reductions, their time, capital cost and practicability of
implementation, short term targets for the Group will be reassessed.
Over the long term, as part of the Group’s business strategy, the Board
continues to evaluate opportunities to diversify its business activities. In turn,
targets related to GHG emissions will be re-evaluated in line with any future
changes in the Group’s planned operating activities.
16 London & Associated Properties PLC 2023
STRATEGIC REPORT Corporate responsibility
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 2023 to 31st
December 2023.
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 shopping
centres and facilities.
During the year LAP had landlord-controlled areas in Orchard
Square, Brewery Street, Shipley and Bridgend, Bedworth, and Little
Portland Street. 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 Little Portland Street has been included in this year’s
calculations, as in the previous year.
Table 1. Landlord & tenant controlled areas
Scope 1 emissions
Scope 2 emissions
Table 2. LAP controlled areas
Scope 1 emissions
Scope 2 emissions
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
Table 4. Coal mining carbon footprint
Emissions for landlord-controlled areas have been calculated based
on actual consumption data collected from each site. 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 2023.
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.
2023
29
0
1,152
1,182
0.25
2023
29
0
97
126
2023
0
0
1,055
1,055
2022
35
0
1,265
1,300
0.24
2022
35
0
39
74
2022
0
0
1,226
1,226
CHANGE
-15%
n/a
-9%
-9%
6%
CHANGE
-15%
n/a
149%
72%
CHANGE
n/a
n/a
-14%
-14%
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
Energy consumption used to calculate above emissions
Of which UK
2023
CO2E
TONNES
2022
CO2E
TONNES
39,709
39,564
7,601
12,267
47,310
51,831
0.0010
0.0587
0.0005
0.0629
kWh
90,218,230
7,601
kWh
87,292,816
12,341
London & Associated Properties PLC 2023 17
STRATEGIC REPORT Corporate responsibility
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 Group’s locations.
South Africa
Under the terms of the mine’s Environmental Management
Programme approved by the Department of Mineral Resource and
Energy (“DMRE”), Black Wattle undertakes a host of environmental
protection activities to ensure that the approved Environmental
Management Plan is fully implemented. In addition to these routine
activities, Black Wattle regularly carries out environmental
monitoring activities on and around the mine, including evaluation
of ground water quality, air quality, noise and lighting levels, ground
vibrations, air blast monitoring, and assessment of visual impacts. In
addition to this Black Wattle also performs quarterly monitoring of
all boreholes around the mine to ensure that no contaminated water
filters through to the surrounding communities. Black Wattle is fully
compliant with the regulatory requirements of the Department of
Water Affairs and Forestry and has an approved water use licence.
Black Wattle Colliery has substantially improved its water
management by erecting and upgrading all its pollution control dams
in consultation with the Department of Water Affairs and Forestry.
A performance assessment audit was conducted to verify compliance
to our 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.
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.
EMPLOYMENT AND DIVERSITY
The Board of London & Associated Properties PLC at 31 December 2023 comprised:
Men
Women
Not specified/prefer not to say
NUMBER OF
BOARD MEMBERS
6
0
0
PERCENTAGE OF
THE BOARD
100%
0%
0%
NUMBER
OF SENIOR
POSITIONS ON
THE BOARD
3
0
0
NUMBER
OF SENIOR
POSITIONS ON
THE BOARD
3
NUMBER IN
EXECUTIVE
MANAGEMENT
3
0
0
PERCENTAGE
OF EXECUTIVE
MANAGEMENT
100%
0%
0%
NUMBER IN
EXECUTIVE
MANAGEMENT
3
PERCENTAGE
OF EXECUTIVE
MANAGEMENT
100%
NUMBER OF
BOARD MEMBERS
6
PERCENTAGE OF
THE BOARD
100%
White British or other White (including
minority white groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
0
0
0
0
0%
0%
0%
0%
0
0
0
0
0
0
0
0
0%
0%
0%
0%
The above data has been collected through self-reporting by the
Board members. Questions asked include gender identity or sex and
ethnic background.
The Company notes the diversity targets included in the Listing
Rules, being:
• at least 40% of the individuals on the Board are women;
• at least one of the specified senior positions is held by a woman; and
• at least one individual on the Board is from a minority ethnic
background.
At 31 December 2023 the Company did not meet the target that at
least 40% of the individuals on its board of directors are women and
at least one of the senior positions on the Board is held by a
women. Should the Board look to appoint further directors in the
future, the Company will give due consideration to how it may
18 London & Associated Properties PLC 2023
achieve the diversity targets while ensuring the appropriate
structure of the Board and mix of skills and expertise relevant to the
Company’s operations. As part of its recruitment processes, the
Company gives careful consideration to all potential applicants. The
Company will keep this under ongoing review. The Group is
committed to improving upon its gender and diversity targets at all
employment levels within the Group through a required build-up of
sufficient talent pools, training up of employees and targeted
recruitment policies. The Company will keep the requirement for a
formal diversity policy under review and will give serious
consideration to the adoption of a policy, tailored to the nature of
the Company’s business, its operations and resources at the
appropriate point.
STRATEGIC REPORT Corporate responsibility
BISICHI PLC
In terms of directors, employees and gender representation, at the
year end the Group had 9 directors (8 male and 2 from a minority
ethnic or HDSA Background, 1 female from a minority ethnic or HDSA
Background), 5 senior managers (5 male and 2 from a minority ethnic
or HDSA Background) and 212 other employees (143 male and 118
from a minority ethnic or HDSA Background, 69 female and 66 from
a minority ethnic or HDSA Background).
The Group’s South African operations are committed to achieving
the goals of the South African Employment Equity Act and is
pleased to report the following:
• Black Wattle Colliery has exceeded the 10 percent women in
management and core mining target.
• Black Wattle Colliery has achieved over 15 percent women in
core mining.
• 95 percent of the women at Black Wattle Colliery are HDSA
females.
Black Wattle Colliery has successfully submitted their annual
Employment Equity Report to the Department of Labour. In terms
of staff training some highlights for 2023 were:
• One employee was trained in ABET (Adult Basic Educational
Training) on various levels.
• An additional eight disabled HDSA women continued their
training on ABET levels one to four.
• Four HDSA persons were enrolled for apprenticeships in 2023;
• Two HDSA females were allocated new Bursaries for 2023.
Further to the above, we confirm that one HDSA Male completed
his bursary studies in 2023, while two HDSA females continued
their bursary studies in 2023.
Highlights for 2023 for Sisonke Coal Processing:
• One employee was trained in ABET (Adult Basic Educational
Training) on various levels
Employment terms and conditions for the employees based at
Bisichi’s UK office and at their South African mining operations are
regulated by and are operated in compliance with all relevant
prevailing national and local legislation. Employment terms and
conditions provided to mining staff meet or exceed the national
average. Bisichi’s mining operations and coal washing plant facility
are labour intensive and unionised. During the year no labour
disputes, strikes or wage negotiations disrupted production or had a
significant impact on earnings. Bisichi’s relations to date with labour
representatives and labour related unions continue to remain strong.
Detailed information relating to the Bisichi Strategic Report is
available in its 2023 financial statements.
Approved on behalf of the board of directors.
Jonathan Mintz
Finance Director
29 April 2024
London & Associated Properties PLC 2023 19
GOVERNANCE
GOVERNANCE
SECRETARY & REGISTERED OFFICE
Jonathan Mintz FCA
2nd Floor, 12 Little Portland Street,
London W1W 8BJ
AUDITOR
Kreston Reeves LLP
PRINCIPAL BANKERS
Santander UK plc
Metro Bank plc
QIB (UK) plc
SOLICITORS
Pinsent Masons LLP
Wake Smith Solicitors Limited
STOCKBROKER
Shore Capital Markets Limited
REGISTRARS & TRANSFER OFFICE
Link Group
Central Square
29 Wellington Street
Leeds
LS1 4DL
UK telephone: 0371 664 0300
International telephone: +44 371 664 0300
(Calls are charged at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable international rate).
Lines are open between 8.00am to 5.30pm, Monday to Friday,
excluding public holidays in England and Wales.
Website: www.linkgroup.eu
Email: shareholderenquiries@linkgroup.co.uk
Company registration number
341829 (England and Wales)
WEBSITE
www.lap.co.uk
E-MAIL
admin@lap.co.uk
Directors & advisors
EXECUTIVE DIRECTORS
John A Heller LLB MBA
(Chairman and 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.
Previously 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 Remuneration Committees.
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 Brixton House
Theatre.
Andrew R Heller MA, ACA
Andrew Heller joined the board on 29 March 2023. He is a qualified
Chartered Accountant, serves as Chairman & Managing Director of
Bisichi PLC and has nearly 30 years’ experience in the mining industry.
† Member of the audit, remuneration and nomination committees
# Senior independent director
20 London & Associated Properties PLC 2023
GOVERNANCE
GOVERNANCE
Directors’ report
The Directors submit their report and the audited
financial statements for the year ended 31
December 2023.
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 and Chief Executive’s
Review and the Strategic Report. These reports can be found on
pages 2 to 19 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 41.6% 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
58.4% majority interest is disclosed as a “non-controlling interest”.
BUSINESS REVIEW AND POST BALANCE SHEET
EVENTS
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 4 to 19.
Details of any post balance sheet events are disclosed in Note 30 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.
• 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, where appropriate (see Note 22 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
2023 (2022: Nil per share).
London & Associated Properties PLC 2023 21
GOVERNANCE
Directors’ report
GOVERNANCE Directors’ report
THE COMPANY’S ORDINARY SHARES HELD IN
TREASURY
At 31 December 2023, 216,715 (2022: 216,715) ordinary shares
were held in Treasury with a market value of £27,089 (2022: £43,343).
Treasury shares held at 1 January 2023
and 31 December 2023
216,715
No shares (2022: nil) 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.
PROPERTIES
The freehold and long leasehold investment properties of the Company,
its subsidiaries, Dragon and Bisichi were revalued as at 31 December
2023 by independent professional firms of chartered surveyors
– Allsop LLP, London (70.2 per cent of the portfolio), Carter Towler,
Leeds (29.8 per cent). The valuations, which are reflected in the
financial statements, amount to £35.1 million (2022: £35.6 million).
Property of £8.9 million (2022: £22.9 million) is included under
inventory, current assets, at the lower of cost or net realisable value,
Orchard Square Sheffield which was held at £14.75 million in 2022
was disposed in 2023.
Taking account of prevailing market conditions, there was no
material change to the valuation of the properties at 31 December
2023 (2022: decrease of £0.1 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 22 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
J A Heller, J Mintz, H D Goldring, C A Parritt and R Priest were
Directors of the company for the whole of 2023.
Sir Michael Heller was a Director of the company until his death
on 30 January 2023.
A R Heller was appointed as a non-executive by the Board on 29
March 2023. Andrew Heller is the Chairman and Managing Director
of Bisichi PLC in which LAP holds a 41.6% stake and has valuable
mining expertise which strengthens the skill base of the Board. His
knowledge and experience bring a vital perspective to an important
investment for the Group.
C A Parritt and J A Heller are retiring by rotation at the Annual
General Meeting in 2024 and offer themselves for re-election.
22 London & Associated Properties PLC 2023
Clive Parritt has been a director since January 2006 and has a
contract of service determinable upon three months’ notice and is
the senior independent director and chairman of the audit,
nomination and remuneration committees. He is a chartered
accountant with over 40 years’ experience in providing strategic,
financial and commercial advice to business. His financial knowledge
and broad commercial experience are of significant benefit to the
business. The board has considered the re-appointment of Clive
Parritt and recommends his re-election as a director.
John Heller has been a director since 1998 and was appointed chief
executive in September 2001. He has a contract of employment
determinable upon twelve months’ notice. The board has considered
the re-appointment of John Heller 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 29 in the Annual Remuneration Report.
Substantial shareholdings
31 DEC 2023
31 DEC 2022
NO.
48,080,880
7,513,214
Heller family
Stonehage Fleming
Investment
Management Ltd
James Hyslop
5,136,258
Maland Pension Fund 3,000,000
%
NO.
%
56.35 48,080,880 56.35
8.81
7,513,214
8.81
6.02
3.52
5,136,258
2,885,000
6.02
3.38
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.
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 2023 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 (2022: £Nil).
No donations for charitable purposes were made during the year
(2022: £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 2023 can be found on page 17 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.
Section 172 statement
This is contained within the Strategic Report on page 8.
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 22 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.
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 24 and 25
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 26
June 2024 at 10.30 a.m. Items 1 to 7 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 7 – Authority to allot securities
Paragraph 7.1.1 of Resolution 7 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 £2,844,200. This represents approximately 1/3 (one
third) of the ordinary share capital of the Company in issue (excluding
treasury shares) as at 24 April 2024 (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 7.1.2 of Resolution 7 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 £2,844,200, 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 24 April 2024 (being the last
practicable date prior to the publication of this Directors’ Report).
The Directors’ authority will expire on the earlier of 31 August 2025
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 throughout the year and
has expressed its willingness to continue in office. 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
London & Associated Properties PLC 2023 23
GOVERNANCE
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 22. 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 36. 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 27 to 31.
24 London & Associated Properties PLC 2023
• 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 pages 34 to 35. The Chief
Executive and Finance Director are normally invited to attend.
BOARD AND BOARD COMMITTEE MEETINGS
HELD IN 2023
The number of regular meetings during the year and attendance
was as follows:
Sir Michael Heller
(resigned 30
January 2023)
J A Heller*
J Mintz*
C A Parritt
H D Goldring
R Priest
A Heller
(appointed 29
March 2023)
Board
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
Board
MEETINGS
HELD
1
MEETINGS
ATTENDED
0
0
0
10
2
10
2
10
2
1
2
10
2
1
2
10
8
0
0
10
2
10
2
10
2
1
2
9
2
1
2
10
8
*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.
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
NON-EXECUTIVE DIRECTORS
The senior independent non-executive Director is C A Parritt. The
other non-executive Directors are H D Goldring, R Priest and A R
Heller. 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 four 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 C A Parritt,
H D Goldring and R Priest continue to fulfil their roles as
independent non-executive Directors. The background and skills of
all non-executive directors are set out on page 20.
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.
There are no internal control issues to report in the annual report
and financial statements for the year ended 31 December 2023. 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.
London & Associated Properties PLC 2023 25
GOVERNANCE
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 2023.
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 2024
The second part is the Remuneration Policy which details the
remuneration policy for Directors, and it 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 June 2023. 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 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
29 April 2024
26 London & Associated Properties PLC 2023
GOVERNANCE
Annual remuneration report
THE FOLLOWING INFORMATION HAS BEEN AUDITED
Single total figure of remuneration for the year ended 31 December 2023
SALARY
AND FEES
£’000
BONUSES
£’000
BENEFITS
£’000
LONG TERM
INCENTIVE
AWARDS
£’000
PENSIONS
£’000
TOTAL
2023
£’000
TOTAL FIXED
REMUNERA-
TION
£’000
TOTAL
VARIABLE
REMUNERA-
TION
£’000
Executive Directors
Sir Michael Heller*
(resigned 30 January 2023)
Sir Michael Heller - Bisichi
J A Heller*
J A Heller - Bisichi
J Mintz
Non-executive Directors
H D Goldring*+
C A Parritt*+
R Priest*
A R Heller*
A R Heller - Bisichi
Total
1
17
558
-
179
755
18
38
35
-
850
941
1,694
-
-
-
-
70
70
-
-
-
-
-
-
70
7
-
45
9
13
74
-
-
-
-
50
50
124
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
36
-
17
53
-
-
-
-
85
85
138
8
17
639
9
279
952
18
38
35
-
985
1,076
2,028
8
17
639
9
209
882
18
38
35
-
985
1,076
1,958
-
-
-
-
70
70
-
-
-
-
-
-
17
J A Heller has an entitlement to an employer pension contribution of £33,075 for 2023 (2022: £33,075). He has elected for this not to be
paid at this time.
Single total figure of remuneration for the year ended 31 December 2022
SALARY
AND FEES
£’000
BONUSES
£’000
BENEFITS
£’000
LONG TERM
INCENTIVES
AWARDS
£’000
PENSIONS
£’000
TOTAL
2022
£’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
7
200
558
168
933
17
37
35
89
1,022
-
580
-
70
650
-
-
-
-
650
74
-
38
10
122
-
-
-
-
122
-
-
-
-
-
-
-
-
-
-
-
-
33
16
49
-
-
-
-
49
81
780
629
264
1,754
17
37
35
89
1,843
81
200
629
194
1,104
17
37
35
89
1,193
-
580
-
70
650
-
-
-
-
650
* Note 26 “Related party transactions”
+ Members of the remuneration committee for years ended 31 December 2022 and 31 December 2023. C A Parritt was the chair of the remuneration committee
throughout both years.
London & Associated Properties PLC 2023 27
GOVERNANCE Governance statement by the Chairman of the remuneration committee
Benefits include the provision of car, health and other insurance and
subscriptions.
JA Heller and AR Heller are interested in a number of private property
companies that receive services from the Company’s property agents
– see Note 25 to the financial statements “Related party transactions”.
Sir Michael Heller received reduced remuneration in respect of his
services to LAP. However the Company supplied services to a
number of companies in which Sir Michael Heller had an interest.
The Board estimates that the value of these services, if supplied to a
third party would have been £25,000 (2022 - £300,000).
J A Heller is a director of Dragon Retail Properties Limited, (a
subsidiary for IFRS 10 purposes) and received benefits from that
company of £10,404 (2022: £3,404) for services. This is included in
the remuneration figures disclosed above.
Summary of directors’ terms
In March 2023, J A Heller became a non-executive director of
Bisichi PLC, (a subsidiary for IFRS 10 purposes) and received a
benefit from that company of £9,333 (2022: £Nil). He didn’t receive
any other remuneration or a bonus from Bisichi PLC.
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 26 to the financial statements.
R Priest provides consultancy services to the Group. This is detailed
in Note 26 to the financial statements.
A R Heller, who is the Chairman & Managing Director of Bisichi PLC,
(a subsidiary for IFRS 10 purposes) became a non-executive director
of LAP on 29 March 2023 but he did not receive any remuneration
from LAP during 2023.
DATE OF
CONTRACT
UNEXPIRED TERM
NOTICE PERIOD
1 May 2003
11 February 2019
1 July 1992
1 January 2006
31 July 2013
29 March 2023
Continuous
Continuous
Continuous
Continuous
Continuous
Continuous
12 months
3 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 2023.
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 2023 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 24 “Share Capital” to the financial statements.
PAYMENTS TO PAST DIRECTORS
No payments were made to past Directors in the year ended 31
December 2023 (2022: none).
PAYMENTS FOR LOSS OF OFFICE
No payments for loss of office were made in the year ended 31
December 2023 (2022: none).
Executive Directors
John Heller
Jonathan Mintz
Non-executive Directors
H D Goldring
C A Parritt
R Priest
A R Heller
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 £16,853 a year). Under his contract
of employment, the other Director was entitled to a regular
employer contribution (currently £33,075 a year) but has elected to
defer the payment into his pension scheme. 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 2022 or 2023.
2. Partnership shares: No partnership shares were issued in 2022
or 2023.
3. Matching shares: The partnership share agreements for the year
to 31 October 2023 provide for two matching shares to be
awarded free of charge for each partnership share acquired.
No partnership shares were acquired in 2023 (2022: 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 2023 amounted to
£nil (2022: £nil). J A Heller received no shares (2022: nil shares)
and no other Directors received dividend shares.
28 London & Associated Properties PLC 2023
GOVERNANCE Governance statement by the Chairman of the remuneration committee
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
A R Heller
* Resigned 30 January 2023
† These non-beneficial holdings are duplicated with those of Sir Michael Heller.
# These non-beneficial holdings are duplicated with those of J A Heller.
BENEFICIAL
INTERESTS
NON-BENEFICIAL
INTERESTS
31 DEC 23
-
1,872,410
100,000
19,819
36,168
-
816,874
1 JAN 23
5,749,341
1,872,410
100,000
19,819
36,168
-
816,874
31 DEC 22
-
19,277,931
-
-
-
-
#19,277,931
1 JAN 22
19,277,931
†14,073,485
-
-
-
-
#14,073,485
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 2023 was 12.5p (2022: 20.0p). During
the year the share middle market price ranged between 20.5p and 8.5p.
Total Shareholder Return
130
120
110
100
90
80
70
60
50
40
30
20
10
Jan 1 9
M ar 1 9
M ay 1 9
Jul 1 9
Sep 1 9
N ov 1 9
Jan 2 0
M ar 2 0
M ay 2 0
Jul 2 0
Sep 2 0
N ov 2 0
Jan 2 1
M ar 2 1
M ay 2 1
Jul 2 1
Sep 2 1
N ov 2 1
Jan 2 2
M ar 2 2
M ay 2 2
Jul 2 2
Sep 2 2
N ov 2 2
Jan 2 3
M ar 2 3
M ay 2 3
Jul 2 3
Sep 2 3
N ov 2 3
Jan 2 4
London & Associated Properties
FTSE All Share Index
London & Associated Properties PLC 2023 29
GOVERNANCE Governance statement by the Chairman of the remuneration committee
REMUNERATION OF THE CHIEF EXECUTIVE OVER THE LAST TEN YEARS
YEAR
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
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
648
628
590
418
648
870
487
569
762
835
ANNUAL BONUS PAYMENT
AGAINST MAXIMUM
OPPORTUNITY*
%
0%
0%
0%
0%
0%
20%
11%
18%
41%
49%
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.
Considering 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.
DIRECTOR
Executive:
Sir Michael Heller
J A Heller
J Mintz
Non-Executive:
H D Goldring
C A Parritt
R Priest
A R Heller
Colleague pay
BASE SALARY %
CHANGE
2023
2022
BENEFITS %
CHANGE
BONUSES %
CHANGE
2023
2022
2023
2022
N/A
0%
7%
0%
0%
0%
N/A
7%
0%
5%
5%
0%
0%
0%
N/A
5%
N/A
42%
30%
0%
0%
0%
N/A
0%
9%
52%
25%
0%
0%
0%
N/A
7%
N/A
0%
0%
0%
0%
0%
N/A
8%
0%
0%
40%
0%
0%
0%
N/A
15%
RELATIVE IMPORTANCE OF SPEND ON PAY
The total expenditure of the Group on remuneration to all employees (Note 27 refers) is shown below:
Employee Remuneration
Distributions to shareholders
2023
£’000
8,590
0
2022
£’000
13,676
0
30 London & Associated Properties PLC 2023
GOVERNANCE Governance statement by the Chairman of the remuneration committee
STATEMENT OF IMPLEMENTATION OF
REMUNERATION POLICY
The policy was approved at the AGM in June 2023 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. It is to
be presented for approval at the forthcoming AGM. 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 2023. 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 9 June 2023, there was an
advisory vote on the resolution to approve the Remuneration
Report, other than the part containing the remuneration policy.
In addition, on 9 June 2023, there was a binding vote on the resolution to approve the Remuneration Policy. The results are detailed below:
Resolution to approve the Remuneration Report (9 June 2023)
Resolution to approve the Remuneration Policy (9 June 2023)
% OF VOTES
FOR
99.04
94.20
% OF VOTES
AGAINST
0.96
5.80
NUMBER OF
VOTES
WITHHELD
2,912,265
2,452,265
London & Associated Properties PLC 2023 31
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 2023 AGM. The
approved policy took effect from 9 June 2023.
A copy of the full policy can be found at www.lap.co.uk.
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
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 £675,000 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
Annual
bonus
To reward and incentivise
Contractual benefits include:
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
32 London & Associated Properties PLC 2023
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
The current maximum bonus will not exceed 80% of base salary in any one year
discretion to determine the level of bonus on an
but the remuneration committee reserves the power to award up to 150% in an
annual basis
exceptional year
In assessing performance consideration is given
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
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
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
£50,000 a year
No performance conditions are attached to base salaries
GOVERNANCE Remuneration policy summary
In setting the policy, the Remuneration Committee has taken the
following into account:
• 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
treated as a subsidiary of the Group under the Companies Act
2006, shall be entitled to pay, and any executive director of Bisichi
PLC who is also a director of the Company, shall be entitled to
retain, any remuneration permissible in accordance with Bisichi
PLC’s remuneration policy. Any such remuneration will be (i) to the
extent required, permitted by this remuneration policy and (ii)
excluded from the calculation of any limits on remuneration under
this remuneration policy.
same sector
• The need to align the interests of shareholders as a whole with
the long-term growth of the Group; and
• The need to be flexible and adjust with operational changes
throughout the term of this policy
In addition to the entitlements set out above, Bisichi PLC, which is
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 30.
POLICY TABLE
ELEMENT
PURPOSE
Executive directors
Base salary
To recognise:
Skills
Responsibility
Accountability
Experience
Value
Pension
To provide competitive retirement benefits
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
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
To offer a shorter term incentive in the
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
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 £675,000 a year
No specific performance conditions are attached to base salaries
The contribution payable by the Company is
included in the director’s contract of employment
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
Company contribution offered at up to 10% of base salary as part of overall
remuneration package
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.
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
£50,000 a year
No performance conditions are attached to base salaries
London & Associated Properties PLC 2023 33
GOVERNANCE
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
• monitor the controls which are in force to ensure the integrity of
audit committee;
the information reported to the shareholders;
• 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 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.
• approved the publication of annual and half year financial results;
• considered and approved the annual review of internal controls;
• discussed the findings of the FRC’s Audit Quality Review (AQR)
Inspection Report of the external auditor’s audit for 31 December
2021, and noted the external auditor’s proposed actions;
• 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 audit services as set out in Note 2 to the financial statements;
• the chairman of the audit committee has also had separate
meetings and discussions with the external audit partner; and
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 £1.479 million in relation to the Group and £0.545
million in relation to the parent company and £1.0 million for the
Bisichi group to be material.
34 London & Associated Properties PLC 2023
GOVERNANCE Audit committee report
EFFECTIVENESS OF THE EXTERNAL AUDIT
PROCESS
Receiving high-quality and effective audit services is of paramount
importance to the Committee. We continue to monitor carefully the
effectiveness of the external auditor as well as their independence.
We have full regard to the FRC’s Ethical Standard and ensure that
our procedures and safeguards meet these standards.
The FRC’s AQR team completed an inspection of the audit of the
financial statements of London & Associated Properties PLC for the
year ended 31 December 2021.
The Committee has carefully considered the findings that were
raised in the AQR’s report and has concluded that these do not
present any significant concerns on overall external audit
effectiveness when taken with the external auditor’s response and
proposed actions. None of the FRC comments suggest that the
accounts for 2021 were in any way incorrect.
The external auditor produced a detailed audit planning report in
preparation for the year-end financial statements, which included
appropriate consideration of improvements to address the AQR
findings.
The effectiveness review of the external auditor is considered as
part of the Committee’s annual performance evaluation, which also
examines the relationship and communications between the
Committee and the external auditor. No issues were raised during
that review. The Committee concluded that the Auditor was
effective during the year and that the relationship and
communications were open and constructive.
EXTERNAL AUDITOR
Kreston Reeves LLP has held office throughout the period under
review. 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.
C A Parritt
Chairman – Audit Committee
29 April 2024
London & Associated Properties PLC 2023 35
GOVERNANCE
Directors’ responsibilities statement
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
22 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 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 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 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, comprising FRS101, 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.
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.
36 London & Associated Properties PLC 2023
GOVERNANCE
Independent auditor’s report
TO THE SHAREHOLDERS OF LONDON & ASSOCIATED PROPERTIES PLC
FOR THE YEAR ENDED 31 DECEMBER 2023
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 2023 which comprise the
consolidated income statement, consolidated
statement of other comprehensive income,
consolidated and company balance sheets,
consolidated and company statements of changes
in 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:
• 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
2023 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 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 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.
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
companies ability to continue to adopt the going concern basis of
accounting including the following:
• We gained an understanding of the systems and controls around
managements’ going concern assessment, including for the
preparation and review process for forecasts and budgets.
• We obtained evidence that management have undertaken a
formal going concern assessment, including sensitivity analysis of
cash flow forecasts, clear consideration of significant external
factors including the impact of the war in Ukraine and the
potential liquidity impact of such factors on cash balances
including available facilities.
• We have analysed the financial strength of the business at the
year-end date.
• We tested the mechanical integrity of the 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 the post year-end performance of the business,
comparing this to budget as well as considering the development
of key liquidity ratios in the business.
• 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 entity'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. However, because not all future events or conditions
can be predicted, this statement is not a guarantee as to the Group’s
and Parent Company’s ability to continue as a going concern.
London & Associated Properties PLC 2023 37
Independent auditor’s report
GOVERNANCE Independent auditor’s report
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.
• Board’s confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on pages 9 to 10;
• The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems
set out on page 25 and
• The section describing the work of the Audit Committee set out
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 or 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 23;
• Directors’ explanation as to its assessment of the company’s
prospects, the period this assessment covers and why the period
is appropriate set out on page 8;
• 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 8;
• Directors’ statement that the annual report and accounts are fair,
balanced and understandable set out on page 36;
OUR APPLICATION OF MATERIALITY
on page 35.
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.
GROUP FINANCIAL STATEMENTS
PARENT COMPANY FINANCIAL STATEMENTS
Materiality
£1,479,000 (2022: £1,611,000)
£545,000 (2022: £548,000)
Basis for determining materiality
~3% of net assets
~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
£1,035,000 (2022: £1,128,000)
£381,000 (2022: £383,000)
Basis for determining performance
materiality
Rationale for performance materiality
applied
70% of materiality
70% of materiality
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 our previous experience of auditing
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 our previous experience of auditing
the Company.
Triviality threshold
£73,000 (2022: £81,000)
£27,000 (2022: £27,000)
Basis for determining triviality threshold
5% of materiality
5% of materiality
38 London & Associated Properties PLC 2023
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 £46,000 and £828,761. 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 subsidiaries,
3% of that subsidiary’s gross assets or net assets was used. The
gross assets or net assets have been used to calculate materiality for
the subsidiaries as this is considered to be more appropriate in the
circumstances. Performance materiality was calculated at 70% of
component materiality. For the subsidiaries, their materiality and
performance materiality were capped by group materiality and
group performance materiality where appropriate.
COVERAGE OVERVIEW
GROUP
REVENUE
GROUP
PROFIT/
(LOSS)
BEFORE TAX
GROUP NET
ASSETS
100%
99.7%
99.8%
0.0%
100%
0.3%
100%
0.2%
100%
Full statutory audit
(Kreston Reeves and
BDO)
Limited procedures
Totals at 31
December 2023:
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
Analytical Properties Limited
Orchard Square Limited
Dragon Retail Limited
West Ealing Projects Limited
Broadway Regen Limited
DP Pampisford Limited
Development Physics Limited
Bisichi PLC
Mineral Products Limited
Bisichi (Properties) Limited
Bisichi Northampton Limited
Bisichi Mining (Exploration) Limited
(Kreston Reeves LLP)
Full statutory audit
(Kreston Reeves LLP)
Full statutory audit
(Kreston Reeves LLP)
Full statutory audit
(Kreston Reeves LLP)
Full statutory audit
(Kreston Reeves LLP)
Full statutory audit
(Kreston Reeves LLP)
Full statutory audit
(Kreston Reeves LLP)
Full statutory audit
(Kreston Reeves LLP)
Full statutory audit
(Kreston Reeves LLP)
Full statutory audit
(Kreston Reeves LLP)
Full statutory audit
(Kreston Reeves LLP)
Full statutory audit
(Kreston Reeves LLP)
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)
All other group undertakings
Limited assurance
London & Associated Properties PLC 2023 39
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. 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.
Cut-off of revenue was reviewed for sales of coal by analysing sales
recorded during the period, before and after the financial year end
and determining if the recognition applied was appropriate, whilst
rental income cut-off has also been reviewed by analysing revenue
recorded during the period, before and after the financial year end
and determining if the recognition of the deferred income applied was
appropriate. This also includes 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.
40 London & Associated Properties PLC 2023
GOVERNANCE Independent auditor’s report
ORCHARD SQUARE LIMITED EXCLUSION FROM THE GROUP CONSOLIDATION AS AT YEAR END:
Significance and nature of key risk
How our audit addressed the key risk
Orchard Square Limited was one of the group’s subsidiaries
whose operating results have historically been consolidated as
part of the LAP Group accounts.
During the year, it was established that Orchard Square Limited
breached the Income cover ratio covenant on its £12.7 million
loan with Phoenix CRE. This loan is non-recourse to the rest of
the LAP Group. While the group had the option to address the
breach, there was little prospect of recouping any equity, so it
decided not to do so.
Management decided that the LAP group no longer has exposure,
or rights, to variable returns from its involvement with Orchard
Square Limited and cannot be obliged to provide any further
funds to Orchard Square Limited. On this basis, the investment in
Orchard Square Limited has been treated as being relinquished in
accordance with IFRS 10.
This event has a significant impact on the group’s net assets as at
year end.
We obtained management’s assessment demonstrating how the
group lost effective control of Orchard Square Limited during the
year and the rationale justifying the exclusion of the subsidiary
from the consolidated accounts as at year end.
A meeting was held with management to understand and challenge
their assessment on the exclusion of Orchard Square Limited from
consolidation on the basis that LAP Group no longer has exposure,
or rights, to variable returns from its involvement with the
subsidiary and cannot be obliged to provide any further funds to
Orchard Square Limited. On that basis, in accordance with IFRS10,
the investment in Orchard Square Limited has been treated as
having been relinquished during the year and neither the loan nor
the asset is shown in the accounts as at 31 December 2023.
We reviewed the position of LAP Group in accordance with the
requirements of IFRS 10. Supporting facility documentation
between the company and the lender were obtained and reviewed
to ensure that the client’s treatment is deemed appropriate and
reasonable.
We have corroborated the data used by management in
consolidating the results of Orchard Square Limited as part of the
LAP Group accounts up till the point that control was deemed lost
during the year.
We have also ensured that this event has been fully disclosed in
the LAP Consolidated accounts.
KEY OBSERVATIONS COMMUNICATED TO THE AUDIT COMMITTEE
We have no concerns over the exclusion of Orchard Square Limited from the group consolidation as at year end.
VALUATION/IMPAIRMENT OF MINING RESERVES:
Significance and nature of key risk
How our audit addressed the key risk
The valuation of the mine is material to the financial statements
and is considered to be a key accounting estimate.
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 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.
The accounting requirements of IFRS 6 and IAS 16 were
considered to ensure capitalisation of costs to mine development
under IAS 16 was appropriate.
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 it was 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.
London & Associated Properties PLC 2023 41
GOVERNANCE Independent auditor’s 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 27 to 31 of the Annual Report for the year ended 31
December 2023. 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.
OUR CONSIDERATION OF CLIMATE CHANGE
RELATED RISKS
The financial impacts on the Group of climate change and the
transition to a low carbon economy (“climate change”) were
considered in our audit where they have the potential to directly or
indirectly impact key judgements and estimates within the financial
statements.
The Group continues to develop its assessment of the potential
impacts of climate change. Climate risks have the potential to
materially impact the key judgements and estimates within the
financial report. Our audit considered those risks that could be
material to the key judgement and estimates in the assessment of
the carrying value of non-current assets and closure and
rehabilitation provisions.
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.
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.
42 London & Associated Properties PLC 2023
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
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement
(set out on page 36), 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.
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. 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 such as the
valuation of investment properties. Audit procedures performed by
the group engagement team and component auditors included:
• Obtaining 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
GOVERNANCE Independent auditor’s report
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 activities and its legal form.
• Detailed discussions were held with management to identify any
known or suspected instances of non- compliance with laws and
regulations.
• Identifying and assessing the design effectiveness of controls that
management has in place to prevent and detect fraud.
• Challenging assumptions and judgements made by management
in its significant accounting estimates, including assessing the
capabilities of the property valuers and discussing with the
valuers how their valuations were calculated and the data and
assumptions they have used to calculate these. For the
impairment review of the mines, we have undertaken a sensitivity
analysis on the life of the mine model and challenged the
assumptions made by management.
• Performing analytical procedures to identify any unusual or
unexpected relationships, including related party transactions,
that may indicate risks of material misstatement due to fraud.
• 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.
• Reading minutes of meetings of those charged with governance,
and reviewing correspondence with relevant tax and regulatory
authorities.
• Performing integrity testing to verify the legitimacy of banking
records obtained from management.
• Review of significant and unusual transactions and evaluation of
the underlying financial rationale supporting the transactions.
• Identifying and testing journal entries, in particular any manual
entries made at the year-end for financial statement preparation.
• We ensured our global audit team (including Kreston Reeves and
our component auditors) has industry experience through
working for many years on relevant audits, including experience
of mining and investment property management. Our audit
planning included considering external market factors, for
example geopolitical risk, the potential impact of climate change,
commodity price risk and major trends in the relevant industries.
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.
• 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.
• Obtain sufficient appropriate audit evidence regarding the
financial 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 reappointed by the audit committee in the year to audit
the financial statements. Our total uninterrupted period of
engagement is 3 years, covering the years ended 31 December
2021 and 31 December 2023.
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.
During the period under review, agreed upon procedures were completed
in respect of a number of the group’s service charge accounts.
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
Date: 29 April 2024
London & Associated Properties PLC 2023 43
financial state-
ments
FINANCIAL
STATEMENTS
Consolidated income statement
for the year ended 31 December 2023
Group revenue
Operating costs
Operating 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
Decrease in value of investment properties
Loss on disposal of investment properties
Profit on disposal of fixed assets
Gain on investments held at fair value (Bisichi)
Loss on disposal of subsidiary
Decrease in value of other investments
Adjustment to interest rate derivative
(Loss)/profit for the year before taxation
Income tax charge
(Loss)/profit for the year
Attributable to:
Equity holders of the Company
Non-controlling interest
(Loss)/profit for the year
Earnings per share
(Loss)/profit per equity share - basic and diluted
NOTES
1
1
4
4
9
6
20
2
5
25
2023
£'000
53,183
(52,017)
1,166
332
(3,646)
(2,148)
(158)
(5)
–
4
759
(1,930)
(6)
–
(3,484)
(307)
(3,791)
(3,861)
70
(3,791)
2022
£'000
100,243
(64,730)
35,513
199
(3,218)
32,494
(270)
(115)
(83)
36
1,036
–
–
70
33,168
(12,002)
21,166
2,704
18,462
21,166
8
(4.52)p
3.17p
Consolidated statement of comprehensive income
for the year ended 31 December 2023
(Loss)/profit 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 (expense)/income for the year net of tax
Attributable to:
Equity shareholders
Non–controlling interest
Total comprehensive (expense)/income for the year net of tax
44 London & Associated Properties PLC 2023
2023
£'000
2022
£'000
(3,791)
21,166
(675)
(675)
(4,466)
(4,056)
(410)
(4,466)
(43)
(43)
21,123
2,696
18,427
21,123
FINANCIAL STATEMENTS
Consolidated balance sheet
at 31 December 2023
Non–current assets
Market value of properties attributable to Group
Present value of head leases
Property
Mining reserves, property, plant and equipment
Other investments at fair value through profit and loss (“FVPL”)
Deferred tax
Current assets
Inventories - Property
Inventories - Mining
Assets held for sale
Trade and other receivables
Investments in listed securities held at FVPL
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Current tax liabilities
Non–current liabilities
Borrowings
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
Diluted net assets per share
NOTES
2023
£'000
2022
£'000
9
9
10
15
23
13
14
11
16
17
18
19
20
19
20
21
23
24
24
25
8
8
35,060
1,589
36,649
19,164
14,258
432
70,503
8,889
2,579
545
7,413
734
6,978
27,138
97,641
(14,463)
(12,792)
(394)
(5,191)
(32,840)
(13,291)
(1,582)
(1,615)
–
(16,488)
(49,328)
48,313
8,554
4,866
(1,258)
47
16,425
(144)
16,281
28,490
19,823
48,313
33.38p
35,610
1,552
37,162
16,928
12,590
–
66,680
22,862
5,199
–
7,915
886
15,382
52,244
118,924
(17,058)
(22,061)
(414)
(4,256)
(43,789)
(17,113)
(1,839)
(1,716)
(752)
(21,420)
(65,209)
53,715
8,554
4,866
(1,063)
47
20,286
(144)
20,142
32,546
21,169
53,715
38.14p
33.38p
38.14p
These financial statements were approved by the board of directors and authorised for issue on 29 April 2024 and signed on its behalf by:
John Heller
Director
Jonathan Mintz
Director
Company Registration No. 341829
London & Associated Properties PLC 2023 45
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2023
SHARE
CAPITAL
£’000
SHARE
PREMIUM
£’000
TRANSLA-
TION
RESERVES
£’000
CAPITAL
REDEMP-
TION
RESERVE
£’000
TREASURY
SHARES
£’000
RETAINED
EARNINGS
EXCLUDING
TREASURY
SHARES
£’000
TOTAL
EXCLUDING
NON–
CONTROLLING
INTERESTS
£’000
NON–
CON-
TROLLING
INTERESTS
£’000
TOTAL
EQUITY
£’000
Balance at 1 January 2022
Profit for year
8,554
–
4,866
–
(1,055)
–
47
–
(144)
–
17,415
2,704
29,683
2,704
10,536 40,219
18,462 21,166
Other comprehensive expense:
Currency translation
Total other comprehensive expense
Total comprehensive income
Transactions with owners:
Share options charge
Dividends – equity holders
Dividends – non–controlling interests
Transactions with owners
Balance at 31 December 2022
(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 2023
–
–
–
–
–
–
(8)
(8)
(8)
–
–
–
–
8,554
–
–
–
–
–
4,866
–
–
–
–
–
(1,063)
–
–
–
–
–
–
–
(195)
(195)
(195)
–
–
8,554
–
–
4,866
–
–
(1,258)
–
–
–
–
–
–
–
47
–
–
–
–
–
–
47
–
–
–
–
–
2,704
(8)
(8)
2,696
(35)
(35)
(43)
(43)
18,427 21,123
–
–
–
–
(144)
–
167
–
–
167
20,286
(3,861)
167
–
–
167
32,546
(3,861)
237
404
(7,034)
(7,034)
(997)
(997)
(7,627)
(7,794)
21,169 53,715
(3,791)
70
–
–
–
–
–
(3,861)
(195)
(195)
(4,056)
(480)
(480)
(410)
(675)
(675)
(4,466)
–
–
(144)
–
–
16,425
–
–
28,490
(936)
(936)
(936)
(936)
19,823 48,313
46 London & Associated Properties PLC 2023
Group accounting policies
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Consolidated cash flow statement
for the year ended 31 December 2023
Operating activities
(Loss)/profit for the year before taxation
Finance income
Finance expense
Decrease in value of investment properties
Gain on investments held at FVPL (Bisichi)
Loss on disposal of subsidiary
Decrease in value of other investments
Adjustment to interest rate derivative
Loss on sale of investment properties
Depreciation
Profit on disposal of non-current assets
Share based payment expense
Development expenditure on inventories
Exchange adjustments
Change in inventories
Change in receivables
Change in payables
Cash generated from operations
Income tax refunded / (paid)
Cash inflows from operating activities
Investing activities
Disposal of subsidiary
Acquisition of investment properties, mining reserves, plant and equipment
Sale of plant and equipment
Sale of investment properties
Disposal of other investments
Acquisition of other investments
Interest received
Cash outflows from investing activities
Financing activities
Interest paid
Interest obligation under finance leases
Repayment of lease liability
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
Equity dividends paid - non-controlling interests
Cash outflows from financing activities
Net (decrease)/increase 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
2023
£’000
2022
£’000
4
4
9
6
22
10
13
(3,484)
(332)
3,646
5
(759)
1,930
6
–
–
1,761
(4)
–
(777)
158
2,046
(933)
429
3,692
137
3,829
(148)
(5,952)
21
–
432
(1,189)
332
(6,504)
(3,557)
(185)
(251)
–
99
(624)
(193)
–
(95)
(1,372)
–
(6,178)
(8,853)
12,157
140
3,444
33,168
(199)
3,218
115
(1,036)
–
–
(70)
83
1,362
(36)
405
(747)
270
(911)
2,194
811
38,627
(7,946)
30,681
–
(11,011)
102
5,171
2,083
(10,207)
199
(13,663)
(2,751)
(353)
(236)
(52)
524
(55)
(21)
13,337
(14,247)
(641)
(6,323)
(10,818)
6,200
5,982
(25)
12,157
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
2023
£’000
6,978
(3,534)
3,444
2022
£’000
15,382
(3,225)
12,157
19
£195,000 of cash deposits at 31 December 2023 were charged as security to bank loans (2022: £349,000).
London & Associated Properties PLC 2023 47
FINANCIAL STATEMENTS
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 UK adopted international financial reporting.
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 and these are presented in note 31.
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
including interest rate derivatives.
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 12.
The exchange rates used in the accounts were as follows:
Year-end rate
Annual average
£1 STERLING: RAND
£1 STERLING: DOLLAR
2023
23.3014
22.9364
2022
20.5785
20.1929
2023
1.2732
1.2389
2022
1.2102
1.2967
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 00341829. LAP and its subsidiaries (“the Group”) consist
of LAP and all 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.
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 22 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.
48 London & Associated Properties PLC 2023
The directors have reviewed 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.
Geo-political events in Ukraine and the Middle East are currently
having a reduced impact on global energy prices. Although the
outcome of the events in these regions is uncertain, the Directors at
present do not foresee the events having a significant negative
effect on the Group’s UK and South African operations. These risks
are discussed further in Bisichi’s risks and uncertainties on page 10.
Debt Refinancing
The £12.7 million, Phoenix CRE S.à r.l. term loan expired in
September 2023 and was not repaid. It is secured against a subsidiary
of the Group, Orchard Square Limited, whose only asset is the
Orchard Square, Sheffield property. This loan is non-recourse to the
rest of the LAP Group and the LAP Group has no obligation to
provide any further funds to repay this loan. LAP has chosen not to
refinance this loan. As a result, from July 2023, the Group no longer
has effective control of Orchard Square Limited and as required by
IFRS10, from this date it no longer presents the results of Orchard
Square Limited in the consolidated accounts. The assets and
liabilities of Orchard Square Limited, including this term loan are not,
therefore, included in the Balance Sheet as at 31 December 2023.
LAP’s £13.6 million 5-year term loan with QIB (UK) PLC, at a margin
of 3.95% above the BoE base rate, expires in 2027. The loan is
covenant compliant and the Directors do not consider that this
presents a going concern risk to the Group.
Dragon has a £0.95 million Santander term loan (at 4.2% + bank base
rate) that expires on 31 July 2024. Subsequent to the year end this
loan was paid down to £0.8 million and an offer has been received
from Santander to refinance this loan on similar terms for a period
of two or three years. We expect this refinance to be completed in
2024. The loan is covenant compliant and the Directors do not
consider that this presents a going concern risk to the Group.
Broadway Regen has a £4.4 million 11.0% development loan
expiring in April 2024 which we intend to extend until construction
commencement at which point it will be replaced by a new
development loan. This is a residential development for 56 flats and
four retail units which is expected to have good returns. Currently
we are in detailed negotiations to finance construction of this
development and intend to commence work in Q3 2024.
Apartments will be available for sale in Q1 2026. Cash flow
forecasts on which going concern judgements are made include a
range of outcomes for this development and the Directors do not
consider that this presents a going concern risk to the Group.
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.
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.
FINANCIAL STATEMENTS Group accounting policies
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 2023.
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 22.
The Group has not adopted any Standards or Interpretations in
advance of the required implementation dates.
MINING OPERATIONS
The following standards, amendments and interpretations were in
issue at the date of approval of these financial statements but were
not yet effective for the current accounting period and have not
been adopted early. Based on the Group’s current circumstances,
the Directors do not anticipate that their adoption in future periods
will have a material impact on the financial statements of the Group.
• IAS 1 (amended) – Classification of liabilities as current or
non-current, Non-current Liabilities with Covenants;
• IFRS 10 and IAS 28 (amended) – Sale or Contribution of Assets
between an investor and its Associate or Joint Venture;
• IFRS 16 (amended) – Lease Liability in a Sale and Leaseback;
• IAS 7 and IFRS 7 (amended) – Supplier Finance Arrangements;
• IAS 21 (amended) – Lack of Exchangeability.
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 9.
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 13.
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 6 years. This life of mine is based on Bisichi’s existing coal reserves
including reserves acquired but subject to regulatory approval. Bisichi
actively seeks and evaluates new opportunities to extend the life of its
existing mining and processing operations in South Africa. The life of
mine excludes future coal purchases and coal reserve acquisitions.
Bisichi’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, coal demand
outlook and yield.
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 10.
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 21.
London & Associated Properties PLC 2023 49
FINANCIAL STATEMENTS Group accounting policies
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 10.
The impairment test indicated significant headroom as at 31
December 2023 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 9% reduction in
average forecast coal prices or an 8% 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.
BASIS OF CONSOLIDATION
The Group accounts incorporate the accounts of LAP and all 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.
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 12.
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 41.6% 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
50 London & Associated Properties PLC 2023
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%.
As discussed in note 6 the Group no longer has effective control of
Orchard Square Limited and as required by IFRS10 it no longer
includes the results of that company in the consolidation. The
results of Orchard Square Limited are included until control was lost
in July 2023. The maximum loss that can be suffered by the LAP
group has been recognised in the accounts and the assets and
liabilities of Orchard Square Limited have been eliminated.
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.
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
This includes income in relation to service charges, directly
recoverable expenditure and management fees, which is recognised
in accordance with IFRS 15. Revenue from providing services is
recognised in the accounting period in which the services are
rendered. Revenue from services is recognised based on the actual
service provided to the end of the reporting period as a proportion
of the total services to be provided and recognised over time. The
Group generally acts as the principal in service charge transactions
as it directly controls the delivery of the services at the point they
are provided to the tenant. Where the Group acts as a principal,
service charge income is presented gross within revenue and service
charge expense presented gross within costs.
FINANCIAL STATEMENTS Group accounting policies
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 right to receive the payment is established.
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.
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.
London & Associated Properties PLC 2023 51
FINANCIAL STATEMENTS Group accounting policies
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.
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
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 £20,000. The payments for
such leases are recognised in the Income Statement on a straight-
line basis over the lease term.
Interest rate derivatives
The Group uses derivative financial instruments to hedge the
interest rate risk associated with the financing of the Group’s
business where appropriate. 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.
52 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Group accounting policies
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
Properties 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 22. 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.
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.
London & Associated Properties PLC 2023 53
FINANCIAL STATEMENTS Group accounting policies
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 their
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 cash generating
unit basis.
If the carrying amount of an asset exceeds its recoverable amount
an asset’s 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) if that is less than the asset’s carrying amount.
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:
• i t 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. The cost
is recognised within Mine development costs within the balance
sheet.
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.
54 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
Notes to the financial statements
for the year ended 31 December 2023
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
Direct mining costs
Overheads
Depreciation
Operating (loss)/profit
Finance income
Finance expenses
Result before valuation movements
Other segment items
Net (decrease)/increase on revaluation of investment properties
Exchange losses
Decrease in value of other investments
Net increase on revaluation of investments held for trading
Profit on disposal of fixed assets
Loss on disposal of subsidiary
Revaluation and other movements
(Loss)/profit for the year before taxation
Segment assets
- Non-current assets - property
- Non-current assets - plant & equipment
- Non-current assets - other
- Non-current assets - deferred tax asset
- 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)/profit
Non-current assets excluding investments
Total net assets
Capital expenditure
LAP
£’000
3,323
451
18
–
3,792
(1,553)
–
(2,254)
(266)
(281)
110
(2,094)
(2,265)
(150)
–
–
–
4
(1,930)
(2,076)
(4,341)
23,801
268
–
114
8,889
1,123
545
3,799
38,539
(17,650)
(3,238)
(1,272)
(22,160)
16,379
–
–
–
BISICHI
£’000
1,051
181
–
47,985
49,217
(209)
(38,548)
(7,649)
(1,493)
1,318
222
(1,473)
67
145
(158)
–
759
–
–
746
813
10,818
18,896
14,258
318
–
9,490
–
3,123
56,903
(7,483)
(16,748)
(1,925)
(26,156)
30,747
22,283
10,659
4,854
UNITED
KINGDOM
£’000
5,760
(481)
37,086
40,747
81
DRAGON
£’000
168
6
–
–
174
(10)
–
(33)
(2)
129
–
(79)
50
–
–
(6)
–
–
–
(6)
44
2,030
–
–
–
–
113
–
56
2,199
(950)
(62)
–
(1,012)
1,187
–
–
–
SOUTH
AFRICA
£’000
47,423
1,647
19,159
7,566
5,909
2023
TOTAL
£’000
4,542
638
18
47,985
53,183
(1,772)
(38,548)
(9,936)
(1,761)
1,166
332
(3,646)
(2,148)
(5)
(158)
(6)
759
4
(1,930)
(1,336)
(3,484)
36,649
19,164
14,258
432
8,889
10,726
545
6,978
97,641
(26,083)
(20,048)
(3,197)
(49,328)
48,313
22,283
10,659
4,854
2023
TOTAL
£’000
53,183
1,166
56,245
48,313
5,990
London & Associated Properties PLC 2023 55
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
Depreciation
Operating profit
Finance income
Finance expenses
Result before valuation movements
Other segment items
Net decrease on revaluation of investment properties
Loss on disposal of investment properties
Exchange losses
Net increase on revaluation of investments held for trading
Profit on disposal of fixed assets
Adjustment to interest rate derivative
Revaluation and other movements
(Loss)/profit for the year before taxation
Segment assets
- Non-current assets - property
- Non-current assets - plant & equipment
Other investments at fair value through profit and loss account
Inventory - property
Current assets - others
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)/profit
Non-current assets excluding investments
Total net assets
Capital expenditure
LAP
£’000
4,175
788
18
–
4,981
(1,994)
(3,098)
–
(2,665)
(265)
(3,041)
24
(2,120)
(5,137)
(5)
(83)
–
–
36
70
18
(5,119)
24,497
543
–
22,862
1,328
4,685
53,915
(30,306)
(4,253)
(1,375)
(35,934)
17,981
–
–
–
BISICHI
£’000
955
98
–
94,002
95,055
(69)
–
(43,209)
(12,251)
(1,093)
38,433
175
(1,047)
37,561
(60)
–
(270)
1,036
–
–
706
38,267
10,635
16,377
12,590
–
12,280
10,712
62,594
(7,725)
(17,418)
(2,932)
(28,075)
34,519
57,381
29,934
2,167
UNITED
KINGDOM
£’000
6,849
(7,429)
37,767
46,439
2,629
DRAGON
£’000
207
–
–
–
207
(18)
–
–
(65)
(3)
121
–
(51)
70
(50)
–
–
–
–
–
(50)
20
2,030
8
–
–
270
107
2,415
(1,143)
(57)
–
(1,200)
1,215
–
–
–
SOUTH
AFRICA
£’000
93,394
42,942
16,323
7,276
8,434
2022
TOTAL
£’000
5,337
886
18
94,002
100,243
(2,081)
(3,098)
(43,209)
(14,981)
(1,361)
35,513
199
(3,218)
32,494
(115)
(83)
(270)
1,036
36
70
674
33,168
37,162
16,928
12,590
22,862
13,878
15,504
118,924
(39,174)
(21,728)
(4,307)
(65,209)
53,715
57,381
29,934
2,167
2022
TOTAL
£’000
100,243
35,513
54,090
53,715
11,063
Group revenue is external to the Group and the directors consider that inter segmental revenues are not material.
56 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
2. PROFIT BEFORE TAXATION
Profit before taxation is stated after charging/(crediting):
Staff costs (see note 25)
Depreciation on tangible fixed assets - owned assets
Depreciation on tangible fixed assets - right of use
Exchange loss
Impairment of inventory
Inventories recognised as an expense
Amounts payable to the auditor in respect of both audit and non-audit services
Audit services
Statutory - Company and consolidation
Subsidiaries - audited by KR
Subsidiaries - audited by other auditors
Staff costs are included in overheads.
3. DIRECTORS’ EMOLUMENTS
Emoluments
Defined contribution pension scheme contributions
Sir Michael Heller received £17,000 (2022: £780,000) as a Director of Bisichi PLC.
Mr J A Heller received £9,000 (2022: £nil) as a Director of Bisichi PLC
Mr A R Heller received £985,000 (2022: £1,910,000) 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
Unwinding of discount (Bisichi)
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
Total deferred tax (note 23)
Tax on profit on ordinary activities
2023
£’000
2022
£’000
8,860
1,495
266
(158)
–
777
30
129
40
199
2023
£’000
1,890
138
2,028
2023
£’000
332
(2,658)
(112)
(705)
(171)
(3,646)
13,676
1,099
263
(270)
3,098
747
35
102
43
180
2022
£’000
1,794
49
1,843
2022
£’000
199
(1,862)
(319)
(837)
(200)
(3,218)
2023
£’000
2022
£’000
1,318
–
1,318
(313)
(131)
124
725
(1,416)
(1,011)
307
11,522
15
11,537
(1,563)
21
794
1,592
(379)
465
12,002
London & Associated Properties PLC 2023 57
FINANCIAL STATEMENTS Notes to the financial statements
5. INCOME TAX CONTINUED
Factors affecting tax charge for the year
The corporation tax charge differs from the amount which would be due at the effective rate of corporation tax in the United Kingdom of
23.50 per cent (2022: 19.00 per cent). The differences are explained below:
(Loss)/profit for the year before taxation
Taxation at 23.5 per cent (2022: 19 per cent)
Effects of:
Capital losses on disposal
Other differences
Disallowable expenses (Bisichi)
Impairment of Investment
Losses not recognised
Non-taxable income
Changes in fair values of properties not subject to tax
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
Current tax
Deferred tax
2023
£’000
(3,484)
(819)
–
94
241
367
968
(224)
(391)
–
71
307
2023
£'000
-
-
-
(86)
(86)
2023
£'000
1,318
1,318
(925)
393
2022
£’000
33,168
6,302
(308)
543
–
–
155
(255)
1,060
15
4,490
12,002
2022
£’000
2
15
17
(860)
(843)
2022
£’000
11,520
11,520
1,325
12,845
1 Overseas tax is derived from Bisichi’s South African mining operation. The adjustment to tax rate arises due to the tax rate used in the UK for the year of 23.5% (2022:
19%) and the corporation tax rate assessed in South Africa for the year of 28% (2022: 28%).
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.
58 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
6. DISPOSAL OF SUBSIDIARY
In July 2023 Orchard Square Limited breached the Income Cover Ratio covenant on its £12.7 million loan with Phoenix CRE S.à.r.l. This loan
is non-recourse to the rest of the LAP Group. While the LAP Group had the option to cure the breach, there was such little prospect of
recouping any equity, it decided not to do so. LAP Group no longer has exposure, or rights, to variable returns from its involvement with
Orchard Square Limited and cannot be obliged to provide any further funds to Orchard Square Limited. In accordance with IFRS10, the
investment in Orchard Square Limited has been treated as having been relinquished during the year and neither the loan nor the asset is
shown in the accounts at 31 December 2023.
The financial results of Orchard Square Limited for the period to 31 July 2023 and for the full year of 2022 are presented below.
In addition to the results of Orchard Square Limited, losses attributable to our ownership of this subsidiary are also presented below. As the
loan associated with Orchard Square Limited is non-recourse to the LAP Group, there will be no future losses to be attributed to this
subsidiary. All potential losses have been fully provided in the current year.
Result of Orchard Square Limited for the year
Gross property income
Direct property costs
Impairment of Inventory
Net property income
Overheads
Net revenue from property
Net finance expenses
Interest rate derivatives
Income tax
Profit before tax attributable to shareholders
Cash flows from Orchard Square Limited
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net cash (outflow) / inflow
7 MONTHS TO
JULY 2023
£’000
1,258
(646)
–
612
(34)
578
(750)
–
(19)
(191)
7 MONTHS TO
JULY 2023
£’000
474
(12)
(882)
(420)
2022
£’000
2,104
(1,064)
(2,750)
(1,710)
(234)
(1,944)
(978)
70
19
(2,833)
2022
£’000
1,044
(10)
(1,023)
11
Orchard Square Limited has been in cash trap since September 2022. No cash has been distributed to the Group from Orchard Square
Limited since this time.
Summary of assets and liabilities of Orchard Square Limited
Inventory - property
Trade and other receivables
Cash and cash equivalents
Total assets
Current borrowings
Trade and other payables
Balances owed to other group companies
Total liabilities
Net assets
Effects on consolidation of investment in Orchard Square Limited
Loss on disposal of subsidiary
JULY 2023
£’000
14,750
262
148
15,160
(12,654)
(565)
(1,317)
(14,536)
624
2022
£’000
14,750
375
569
15,694
(12,715)
(947)
(1,217)
(14,879)
815
2023
£’000
(1,930)
2022
£’000
–
This loss on disposal is shown in the consolidated results of the Group for the year and includes a full provision for the net assets of
Orchard Square Limited as at 31 July 2023 and a full provision for the intercompany balances between Orchard Square Limited and the LAP
Group at 31 December 2023.
London & Associated Properties PLC 2023 59
FINANCIAL STATEMENTS Notes to the financial statements
7. DIVIDEND
No dividends were paid in the year relating to the current or prior period (2022: Nil)
The Directors are not recommending a final dividend for 2023 (2022: Nil).
8. (LOSS)/PROFIT PER EQUITY SHARE AND NET ASSETS PER EQUITY SHARE
(Loss)/profit per equity share has been calculated as follows:
(Loss) / profit attributable to equity shareholders for the year (£’000)
Weighted average number of ordinary shares in issue (’000)
(Loss) / profit per equity share
Weighted average number of ordinary shares in issue for the purpose of diluted (loss)/profit per share (’000)
Fully diluted (loss) / profit per share
2023
2022
(3,861)
85,326
(4.52)p
85,326
(4.52)p
2,704
85,326
3.17p
85,326
3.17p
Weighted average number of shares in issue is calculated after excluding treasury shares of 216,715 (2022: 216,715).
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
Net assets diluted (£’000)
Shares in issue (’000)
Diluted net assets per share
9. INVESTMENT PROPERTIES
Cost or valuation at 1 January 2023
Transfer to assets held for sale (note 11)
Additions
Decrease in present value of head leases
(Decrease)/increase on revaluation
At 31 December 2023
Representing assets stated at:
Valuation
Present value of head leases
At 31 December 2023
At 31 December 2022
2023
2022
28,490
85,326
33.38p
28,490
85,326
33.38p
32,546
85,326
38.14p
32,546
85,326
38.14p
LEASEHOLD
LEASEHOLD
TOTAL
£’000
FREEHOLD
£’000
OVER 50 YEARS
£’000
UNDER 50
YEARS
£’000
37,162
(545)
38
(1)
(5)
36,649
35,060
1,589
36,649
36,649
37,162
29,679
(545)
–
–
116
29,250
29,250
–
29,250
29,250
29,679
7,298
–
38
(1)
(111)
7,224
5,640
1,584
7,224
7,224
7,298
185
–
–
–
(10)
175
170
5
175
175
185
60 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
9. INVESTMENT PROPERTIES CONTINUED
Cost or valuation at 1 January 2022
Additions
Disposals
Decrease in present value of head leases
(Decrease)/increase on revaluation
At 31 December 2022
Representing assets stated at:
Valuation
Present value of head leases
TOTAL
£’000
FREEHOLD
£’000
LEASEHOLD
OVER
50 YEARS
£’000
LEASEHOLD
UNDER
50 YEARS
£’000
41,166
2,531
(5,695)
(725)
(115)
37,162
35,610
1,552
37,162
27,023
2,531
–
–
125
29,679
29,679
–
29,679
13,936
–
(5,695)
(724)
(219)
7,298
5,751
1,547
7,298
207
–
–
(1)
(21)
185
180
5
185
The leasehold and freehold properties, excluding the present value of head leases, were valued as at 31 December 2023 by professionally
qualified independent firms of chartered surveyors. The valuations were made at fair value.
Allsop LLP
Carter Towler
Add: present value of headleases1
2023
£’000
24,450
10,610
35,060
1,589
36,649
2022
£’000
25,145
10,465
35,610
1,552
37,162
1 At 31 December 2023 investment properties included £1.6 million (2022: £1.6 million) for the head lease liabilities recognised under IFRS 16. In the current year total
cash outflow for head leases and other lease liabilities is £0.1 million (2022: £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.
The historical cost of investment properties, including total capitalised interest of £1,161,000 (2022: £1,161,000) was as follows:
2023
LEASEHOLD
OVER 50
YEARS
£’000
LEASEHOLD
UNDER 50
YEARS
£’000
FREEHOLD
£’000
2022
LEASEHOLD
OVER 50
YEARS
£’000
LEASEHOLD
UNDER 50
YEARS
£’000
FREEHOLD
£’000
Cost at 1 January
Transfer to assets held for sale
(note 11)
Additions
Disposals
Cost at 31 December
33,283
9,551
785
30,753
18,883
(581)
–
–
32,702
–
–
–
9,551
–
–
–
785
–
2,530
–
33,283
–
–
(9,332)
9,551
785
–
–
–
785
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.
London & Associated Properties PLC 2023 61
FINANCIAL STATEMENTS Notes to the financial statements
9. INVESTMENT PROPERTIES CONTINUED
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.
CARRYING /
FAIR VALUE
2023
£'000
CARRYING/ FAIR
VALUE 2022
£’000
VALUATION
TECHNIQUE
29,795
29,679 Income capitalisation
5,640
5,751 Income capitalisation
170
180 Income capitalisation
CLASS OF PROPERTY
LEVEL 3
Freehold – external
valuation
Leasehold over
50 years –
external valuation
Leasehold under
50 years – external
valuation
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
RANGE
(WEIGHTED
AVERAGE)
2023
RANGE
(WEIGHTED
AVERAGE) 2022
£4 – £34
(£16)
5.3% – 14.3%
(9.2%)
£5 – £10
(£7)
5.8% – 23.7%
(18.6%)
£5 – £5
(£5)
32.6% – 32.6%
(32.6%)
£4 – £33
(£17)
5.3% – 15.7%
(8.9%)
£5 – £10
(£6)
5.8% – 22.5%
(17.8%)
£5 - £5
(£5)
31.1% – 31.1%
(31.1%)
At 31 December
35,605
35,610
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.
Freehold – external valuation
Leasehold over 50 years – external valuation
Leasehold under 50 years – external valuation
ESTIMATED RENTAL VALUE
10% INCREASE OR (DECREASE)
EQUIVALENT YIELD
25 BASIS POINT CONTRACTION
OR (EXPANSION)
2023
£'000
2022
£'000
2,977 (2,977)
564 (564)
17 (17)
2,965(2,965)
575(575)
18(18)
2023
£'000
925 (868)
99 (96)
1 (1)
2022
£'000
950(890)
106(102)
1/(1)
62 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
10. MINING RESERVES, PLANT AND EQUIPMENT
Cost at 1 January 2023
Exchange adjustment
Valuation decrease
Additions
Disposals in year
At 31 December 2023
Accumulated depreciation at 1 January 2023
Exchange adjustment
Charge for the year
Disposals in year
Accumulated depreciation at 31 December 2023
Net book value at 31 December 2023
Cost at 1 January 2022
Exchange adjustment
Valuation increase
Additions
Disposals
Cost at 31 December 2022
Accumulated depreciation at 1 January 2022
Exchange adjustment
Charge for the year
Disposals in year
Accumulated depreciation at 31 December 2022
Net book value at 31 December 2022
TOTAL
£’000
40,072
(4,653)
(6)
5,952
(19)
41,346
23,144
(2,721)
1,761
(2)
22,182
19,164
31,669
125
(38)
8,532
(216)
40,072
21,752
180
1,362
(150)
23,144
16,928
Included in the above line items are right-of-use assets over the following:
Net book value at 1 January 2023
Additions
Disposals
Depreciation
Net book value at 31 December 2023
Net book value at 1 January 2022
Exchange adjustment
Revaluation
Depreciation
Net book value at 31 December 2022
11. ASSETS HELD FOR SALE
At 1 January
Transfer from investment property (note 9)
Disposal
At 31 December
MINING
RESERVES
£’000
MINING
EQUIPMENT
£’000
RIGHT OF
USE ASSET
- OFFICE
BUILDING
£’000
OFFICE
EQUIPMENT
AND MOTOR
VEHICLES
£’000
2,332
(273)
–
–
–
2,059
1,099
(174)
–
–
925
1,134
1,097
(13)
–
1,248
–
2,332
1,089
10
–
–
1,099
1,233
TOTAL
£’000
664
27
(26)
(295)
370
1,011
5
(38)
(314)
664
36,291
(4,333)
–
5,903
–
37,861
21,347
(2,517)
1,443
–
20,273
17,588
29,063
134
–
7,117
(23)
36,291
20,166
166
1,038
(23)
21,347
14,944
796
–
–
–
–
796
307
–
266
–
573
223
788
–
(38)
46
–
796
44
–
263
–
307
489
653
(47)
(6)
49
(19)
630
391
(30)
52
(2)
411
219
721
4
–
121
(193)
653
453
4
61
(127)
391
262
MINING
EQUIPMENT
£’000
OFFICE
BUILDING
£’000
OFFICE
EQUIPMENT
AND MOTOR
VEHICLES
£’000
186
-
(26)
(29)
131
219
5
–
(38)
186
457
-
-
(249)
208
744
–
(38)
(249)
457
2023
£’000
–
545
–
545
21
27
-
(17)
31
48
–
–
(27)
21
2022
£’000
504
–
(504)
–
A decision to sell our retail and residential property in Rugeley was made in 2023 which will now go to auction in Q2 2024. The property
was therefore reclassified as an asset held for sale at 31 December 2023.
London & Associated Properties PLC 2023 63
FINANCIAL STATEMENTS Notes to the financial statements
12. 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 2023 is disclosed below:
ENTITY
ACTIVITY
PERCENTAGE
OF SHARE
CAPITAL
Analytical Properties Holdings Limited *
Property
100%
Analytical Properties Limited
Property
100%
LAP Ocean Holdings Limited *
Property
100%
London & Associated (Rugeley) Limited
Dormant
100%
London & Associated Securities Limited
Dormant
100%
London & Associated Management Services Limited*
Orchard Chambers Residential Limited
Orchard Square Limited
Bisichi PLC (note C)
Property
Management
Services
Dormant
100%
100%
Property
100%
Coal mining
41.602%
Mineral Products Limited (notes A, C)
Share dealing 100%
Bisichi (Properties) Limited (notes A, C)
Property
100%
Bisichi Mining (Exploration) Limited (notes A, C)
Sisonke Coal Processing (pty) Limited (notes A, C)
Holding
company
Coal
processing
100%
62.5%
Black Wattle Colliery (Pty) Limited (notes A, C)
Coal mining
62.5%
Bisichi Coal Mining (Pty) Limited (notes A, C)
Coal mining
100%
Urban First (Northampton) Limited (notes A, C)
Dormant
100%
Bisichi Trustee Limited (notes A, C)
Property
100%
Bisichi Mining Management Services Limited
(notes A, C)
Ninghi Marketing Limited (notes A, C)
Dormant
100%
Dormant
90.1%
Bisichi Northampton Limited (notes A, C)
Property
100%
Amandla Ehtu Mineral Resource Development (Pty)
Limited (notes A, C)
Dormant
70%
Black Wattle Klipfontein (Pty) Limited (notes A, C)
Coal mining
62.5%
Dragon Retail Properties Limited (notes B, C)
Property
West Ealing Projects Limited (notes B, C)
Broadway Regen Limited (notes C, D)
Property
Property
50%
50%
90%
Development Physics Limited (notes C, E)
Property
33.3%
DP (Pampisford) Limited (notes D, F)
Property
100%
REGISTERED ADDRESS
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
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
73 Cornhill, London, EC3V
3QQ
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
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
Details on the non–controlling interest in subsidiaries are shown under note 25.
Companies shown as Dormant and those marked with an asterisk(*) 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: Bisichi, Dragon, West Ealing Projects, Development Physics and their subsidiaries are included in the consolidated financial
statements in accordance with IFRS 10.
Note D: This company is 90% owned by West Ealing Projects Limited and the equity shareholdings disclosed relate to that company.
Note E: This entity is a joint venture owned 33.33% by LAP and 33.33% by Bisichi
Note F: This company is 100% owned by Development Physics Limited and the equity shareholdings disclosed relate to that company.
64 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
13. INVENTORIES - PROPERTY
Development land and infrastructure:
At 1 January
Capitalised expenditure
Capitalised interest
Disposal
Impairments
At 31 December
2023
£’000
22,862
360
417
(14,750)
-
8,889
2022
£’000
25,213
443
304
-
(3,098)
22,862
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 £8.889 million (2022: £8.112 million) and is currently being developed for sale.
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 £nil (2022: £nil), with a full provision being made for development
expenditure, until such time as a decision is made to submit a new application following an initial unsuccessful planning application.
The Group has relinquished its interest in the Orchard Square, Sheffield development property. Note 6 explains this in more detail, including
its financial effect.
14. INVENTORIES - MINING
Coal
Washed
Mining production
Work in progress
Other
15. INVESTMENTS HELD AS NON-CURRENT ASSETS
At 1 January
Additions
Gain
Disposals
At 31 December
2023
£’000
2022
£’000
1,949
542
85
3
2,579
2023
TOTAL
£’000
12,590
1,189
856
(377)
14,258
4,758
162
221
58
5,199
2022
TOTAL
£’000
3,631
9,758
718
(1,517)
12,590
The non-current asset investments belong to Bisichi and are all listed on UK and overseas stock exchanges (Level 1 hierarchy) as follows:
Market value of readily realisable investments listed on stock exchanges in the United Kingdom
Market value of readily realisable investments listed on overseas stock exchanges
16. TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
Prepayments and accrued income
Note 22 details the group’s credit risk management and loss allowances held for trade receivables.
2023
£'000
6,843
7,415
14,258
2023
£’000
4,695
2,285
433
7,413
2022
£’000
6,782
5,808
12,590
2022
£’000
4,978
2,290
647
7,915
London & Associated Properties PLC 2023 65
FINANCIAL STATEMENTS Notes to the financial statements
17. 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) / surplus of market value versus cost
2023
£'000
618
116
734
760
(26)
2022
£’000
686
200
886
846
40
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).
18. TRADE AND OTHER PAYABLES
Trade payables
Other taxation and social security costs
Other payables
Accruals and deferred income
2023
£’000
8,752
118
3,563
2,030
14,463
2022
£’000
8,621
39
3,828
4,570
17,058
The directors consider that the carrying amount of trade and other payables approximates to their fair value.
19. BORROWINGS
2023
£’000
CURRENT
2023
£’000
NON-CURRENT
2022
£’000
CURRENT
2022
£’000
NON-CURRENT
Other loans (Bisichi)
£1.25 million term bank loan (secured) repayable by 2024 (Dragon)*
Bank overdrafts (secured) (Bisichi)
£12.7 million term bank loan (secured) repayable by 2023 at 6.95 per
cent* (note 6)
£0.04 million term loan (unsecured) repayable by 2026 at 2.5 per cent
£3.96 million term bank loan (secured) repayable by 2024 (Bisichi)*
£4.4 million term loan (secured) - repayable by 2024 (Broadway Regen)
£13.60 million term bank loan (secured) repayable by 2027 at 7.45%*
7
950
3,534
–
8
3,920
4,373
–
12,792
22
–
–
–
12
–
–
13,257
13,291
Borrowings analysis by origin:
United Kingdom
South Africa
570
1,143
3,225
12,715
9
–
4,399
–
22,061
2023
£'000
22,520
3,563
26,083
50
–
–
–
20
3,880
–
13,163
17,113
2022
£’000
35,329
3,845
39,174
* 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. The Bank of England base rate or the
Sterling Overnight Index Average (SONIA).
No banking covenants were breached by the group during the year, other than mentioned below.
The £12.7 million term loan with Phoenix CRE S.à r.l., is no longer included with the Group accounts following the loss of effective control
by LAP of its subsidiary Orchard Square Limited.
The £13.6 million term loan was taken out in August 2022 with QIB (UK) plc and is secured on specific freehold and leasehold properties,
with a secondary charge of £2 million over the assets of LAP the company. The loan has an interest rate of 3.95% above the Bank of
England base rate. This loan is covenant compliant.
In South Africa, the bank overdraft 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 borrowing 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 £9.37 million (2022: £11.48 million). All banking covenants were either adhered
to or waived by Absa Bank Limited during the year.
66 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
19. BORROWINGS CONTINUED
Bisichi holds a £3.96 million 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 £10.61 million (2022: £10.47 million). No banking covenants were breached during the
year. Bisichi intends to renew or refinance the loan prior to the end of its term.
The bank loan of £0.95 million (Dragon) which is repayable in July 2024 is secured by way of a first charge on specific freehold property which is
included in the financial statements at a value of £2.03 million. The interest cost of the loan is 4.2 per cent above the bank’s base rate. An offer
with the existing lender to refinance this loan with a new term loan has been received and the refinance is expected to complete before July 2024.
The bank loan of £4.4 million (Broadway Regen) which is repayable in April 2024, is secured by way of a first charge on a specific freehold
development property, which is included in the financial statements at £8.1 million. The interest cost of the loan is fixed at 11.0% per
annum. Detailed discussions to convert this into a full development loan prior to the commencement of construction activities are taking
place and are expected to conclude in Q3 2024.
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
Disposal of subsidiary
Valuation movements
Balance at 31 December
20. 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
2023
£’000
BANK
BORROWINGS
2023
£’000
LEASE
OBLIGATIONS
2022
£’000
BANK
BORROWINGS
2022
£’000
LEASE
OBLIGATIONS
39,174
(453)
(138)
(12,654)
154
26,083
2,253
(24)
(290)
–
37
1,976
38,664
3
272
–
235
39,174
2023
HEAD
LEASES ON
INVESTMENT
PROPERTY 1
£’000
121
486
10,029
10,636
(9,048)
1,588
121
437
1,030
1,588
2023
TOTAL
£’000
410
622
10,038
11,070
(9,094)
1,976
394
547
1,035
1,976
2023
OFFICE
£’000
2023
OTHER
£’000
239
-
-
239
(16)
223
223
-
-
223
50
136
9
195
(30)
165
50
110
5
165
4,247
5
(1,235)
–
(764)
2,253
2022
TOTAL
£’000
467
882
9,914
11,263
(9,010)
2,253
414
787
1,052
2,253
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 greater than one year are £1,592,000 (2022: £1,839,000).
Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.
21. PROVISIONS
At 1 January
Exchange adjustment
Unwinding of discount
At 31 December
The above provision relates to mine rehabilitation costs in Bisichi.
2023
£’000
1,716
(213)
112
1,615
2022
£’000
1,391
6
319
1,716
London & Associated Properties PLC 2023 67
FINANCIAL STATEMENTS Notes to the financial statements
22. FINANCIAL INSTRUMENTS
Total financial assets and liabilities
The Group’s financial assets and liabilities and their fair values are as follows:
Cash and cash equivalents
Investments - non-current assets
Investments - current assets
Trade and other receivables
Other assets
Bank overdrafts
Bank loans
Lease liabilities
Other liabilities
Total financial liabilities before debentures
FAIR
VALUE
£’000
6,978
14,258
734
8,889
6,875
(3,534)
(22,571)
(1,976)
(12,315)
(2,662)
2023
CARRYING
VALUE
£’000
6,978
14,258
734
8,889
6,875
(3,534)
(22,549)
(1,976)
(12,315)
(2,640)
FAIR
VALUE
£’000
15,382
12,590
886
8,887
7,268
(3,225)
(35,945)
(2,253)
(12,449)
(8,859)
2022
CARRYING
VALUE
£’000
15,382
12,590
886
8,887
7,268
(3,225)
(35,949)
(2,253)
(12,449)
(8,863)
Treasury policy
The Group enters derivative transactions such as interest rate swaps 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, 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 no variable interest term debts which are covered by derivatives. At 31 December 2023, with other variables unchanged, a
1% increase in interest rates would change the profit/loss for the year by £220,000 (2022: £352,000).
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 £13.6 million bank loan is secured by way of first charge on specific freehold and leasehold properties. The rates of interest vary based
on Bank of England base rate in the UK.
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 £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 £4.4 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 11.0%.
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.
The £13.6 million bank loan with QIB (UK) plc is secured against properties within LAP’s retail and industrial portfolio. The debt package has
a five-year term and is repayable in 2027. The interest cost of the loan is 3.95% above the Bank of England base rate in the UK.
In South Africa, a R85 million 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.
Bisichi holds a £3.96 million 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. Bisichi intends to renew or refinance the loan prior to the end of its term.
68 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
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)
Bank loans (fixed)
Bank loans (floating)
Lease liabilities
Trade and other payables (non-interest)
Bank overdrafts (floating)
Bank loans (fixed)
Bank loans (floating)
Lease liabilities
Trade and other payables (non-interest)
2023
TOTAL
£’000
3,534
4,393
14,617
11,070
12,315
45,929
2022
TOTAL
£’000
3,225
4,428
32,036
11,263
12,449
63,401
LESS THAN
1 YEAR
£’000
3,534
4,381
957
410
12,315
21,597
LESS THAN
1 YEAR
£’000
3,225
4,408
14,428
467
12,449
34,977
2-5 YEARS
£’000
–
12
13,660
622
–
14,294
2-5 YEARS
£’000
–
20
17,608
882
–
18,510
OVER
5 YEARS
£’000
–
–
–
10,038
–
10,038
OVER
5 YEARS
£’000
–
–
–
9,914
–
9,914
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.
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 £27,671,000 (2022:
£35,686,000).
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
30-60 days
60-90 days
90+ days
Total
Being:
Mining
Property
2023
2022
GROSS
AMOUNT
£’000
LOSS
ALLOWANCE
£’000
NET CARRYING
AMOUNT
£’000
GROSS
AMOUNT
£’000
LOSS
ALLOWANCE
£’000
NET CARRYING
AMOUNT
£’000
3,433
-
9
489
3,931
2,951
980
3,931
(308)
-
(3)
(205)
(516)
(301)
(215)
(516)
3,125
-
6
284
3,415
2,650
765
3,415
4,438
18
15
932
5,403
3,878
1,525
5,403
-
(4)
(5)
(417)
(426)
-
(426)
(426)
4,438
14
10
515
4,977
3,878
1,099
4,977
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.
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
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.
London & Associated Properties PLC 2023 69
FINANCIAL STATEMENTS Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
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/(decrease) 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
2023
£’000
426
341
(251)
-
516
2022
£’000
636
(42)
(128)
(40)
426
As at 31 December 2023, the Group held a loss allowance provision for trade receivables of £516,000 (2022: £426,000) and the
impairment risk remains low with the loss allowance of £516,000 representing 1.0% of total income for the year (2022: 0.4%). The loss
allowance at 31 December 2023 relating to property income is £215,000 (2022: £426,000) representing 4.1% of gross property income in
the year (2022: 6.8%).
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.
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 2023 and 2022
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 2023, 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 £280,000 (2022: £121,000).
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 £466,000 (2022: £201,000).
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 show the Bisichi currency profiles of net monetary assets and liabilities by functional currency:
2023:
Sterling
South African Rand
US Dollar
2022:
Sterling
South African Rand
US Dollar
70 London & Associated Properties PLC 2023
2023
£'000
1,570
1,109
563
3,242
2022
£’000
7,779
2,238
573
10,590
UK
£'000
SOUTH AFRICA
£'000
12,082
40
2,095
14,217
-
(12,583)
-
(12,583)
UK
£’000
SOUTH AFRICA
£’000
14,715
45
1,971
16,731
-
(11,743)
-
(11,743)
FINANCIAL STATEMENTS Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
Borrowing facilities
At 31 December 2023 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 18, 19 and 20.
Interest rate and hedge profile
Fixed rate borrowings
Floating rate borrowings
– Other borrowings
Average fixed interest rate
Weighted average cost of debt on overdrafts, bank loans and debentures
Average period for which borrowing rate is fixed
2023
£’000
2022
£’000
4,393
4,428
17,770
22,163
10.96%
10.34%
0.3 years
34,746
39,174
6.97%
8.63%
0.4 years
The Group’s floating rate debt bears interest based on Bank of England base rate, banks’ base rate for the term bank loans and bank base
rate for the overdraft.
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 swaps
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
TOTAL
£'000
14,258
734
-
-
-
-
-
-
-
14,258
734
-
LEVEL 1
£’000
LEVEL 2
£’000
LEVEL 3
£’000
TOTAL
£’000
2023
GAIN/(LOSS)
TO INCOME
STATEMENT
£’000
856
(26)
-
2022
GAIN
TO INCOME
STATEMENT
£’000
12,590
886
-
-
-
-
-
-
-
12,590
886
-
718
40
69
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
2023
£'000
28,060
(6,978)
21,082
48,313
43.6%
2022
£’000
41,427
(15,382)
26,045
53,715
48.5%
The Group does not have any externally imposed capital requirements.
Following the introduction of IFRS 16 total debt includes lease liabilities.
London & Associated Properties PLC 2023 71
FINANCIAL STATEMENTS Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
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
2023
£'000
6,978
2022
£’000
15,382
These funds are primarily invested in short term bank deposits maturing within one year bearing interest at the bank’s variable rates.
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
2023
£'000
2022
£’000
8,873
17,211
26,084
22,061
17,113
39,174
Certain borrowing agreements contain financial and other conditions that if contravened by the Group, could alter the repayment profile.
23. DEFERRED TAX ASSET / (LIABILITY)
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 asset / (liability) at end of year:
There is no time limit in respect of the Group tax loss relief.
2023
£’000
(752)
1,011
173
432
(1,265)
(4,558)
560
2,665
3,030
432
2022
£’000
(309)
(465)
22
(752)
(1,140)
(4,302)
544
1,439
2,707
(752)
In addition, the Group has unused losses and reliefs with a potential value of £12,345,000 (2022: £11,605,000), 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 (2022: 25%).
24. SHARE CAPITAL
The Company has one class of ordinary shares which carry no right to fixed income.
NUMBER OF
ORDINARY 10P
SHARES
2023
NUMBER OF
ORDINARY 10P
SHARES
2022
110,000,000
85,542,711
(216,715)
85,325,996
110,000,000
85,542,711
(216,715)
85,325,996
2023
£’000
11,000
8,554
(22)
8,532
2022
£’000
11,000
8,554
(22)
8,532
Authorised: ordinary shares of 10p each
Allotted, issued and fully paid share capital
Less: held in Treasury (see below)
“Issued share capital” for reporting purposes
72 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
FINANCIAL STATEMENTS Notes to the financial statements
24. SHARE CAPITAL CONTINUED
Treasury shares
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
216,715
–
216,715
218,197
(1,482)
216,715
2023
2022
2023
£’000
144
–
144
2022
£’000
144
–
144
Share Option Schemes
Employees’ share option scheme (Approved scheme)
At 31 December 2023 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 His 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 2023 is as follows:
CHANGES DURING THE YEAR
AT 1
JANUARY
2023
OPTIONS
EXERCISED
OPTIONS
GRANTED
OPTIONS
LAPSED
2,367,604
Shares issued to date
Shares allocated over which options have not been granted
1,549,955
Total shares allocated for issue to employees under the scheme 3,917,559
–
–
–
–
–
–
–
–
–
AT 31
DECEMBER
2023
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 2023 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 2023 is as follows:
CHANGES DURING THE YEAR
AT 1
JANUARY
2023
OPTIONS
EXERCISED
OPTIONS
GRANTED
OPTIONS
LAPSED
450,000
Shares issued to date
550,000
Shares allocated over which options have not yet been granted
Total shares allocated for issue to employees under the scheme 1,000,000
–
–
–
–
–
–
–
–
–
The Bisichi PLC Unapproved Option Schemes
Details of the share option schemes in Bisichi are as follows:
AT 31
DECEMBER
2023
450,000
550,000
1,000,000
YEAR OF GRANT
2022
SUBSCRIPTION
PRICE PER SHARE
PERIOD WITHIN
WHICH OPTIONS
EXERCISABLE
NUMBER OF SHARES
FOR WHICH OPTIONS
OUTSTANDING AT
31 DECEMBER 2022
NUMBER OF
SHARE OPTIONS
ISSUED/EXERCISED/
(CANCELLED)
DURING YEAR
NUMBER OF SHARES
FOR WHICH OPTIONS
OUTSTANDING AT
31 DECEMBER 2023
352.0p Feb 2022 - Feb 2032
760,000
–
760,000
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 Bisichi 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 2022 options which are outstanding at 31 December 2023.
Outstanding at 1 January
Cancelled during the year
Issued during the year
Outstanding at 31 December
Exercisable at 31 December
2023
WEIGHTED
AVERAGE
EXERCISE PRICE
352.0p
-
-
352.0p
352.0p
2023
NUMBER
760,000
–
–
760,000
760,000
2022
WEIGHTED
AVERAGE
EXERCISE PRICE
79.5p
79.5p
352.0p
352.0p
352.0p
2022
NUMBER
680,000
(680,000)
760,000
760,000
760,000
London & Associated Properties PLC 2023 73
FINANCIAL STATEMENTS Notes to the financial statements
25. NON–CONTROLLING INTEREST (“NCI”)
As at 1 January
Share of profit for the year
Dividends paid
Shares issued
Exchange movement
As at 31 December
The following subsidiaries had material NCI:
Bisichi PLC
Black Wattle Colliery (Pty) Ltd
2023
£’000
21,169
70
(936)
–
(480)
19,823
2022
£’000
10,536
18,462
(8,031)
237
(35)
21,169
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 for the year attributable to owners of the parent
Profit for the year attributable to NCI
Profit 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 current assets at 31 December
Cash flows
From operating activities
From investing activities
From financing activities
Net cash flows
2023
£’000
49,253
259
51
310
(469)
(206)
(675)
45,292
14,489
59,781
(24,241)
(1,946)
(26,187)
33,594
2,798
(6,479)
(4,235)
(7,916)
2022
£’000
95,111
17,612
8,494
26,106
(19)
(24)
(43)
40,643
23,112
63,755
(21,333)
(6,861)
(28,194)
35,561
31,252
(16,410)
(7,934)
6,908
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 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
74 London & Associated Properties PLC 2023
2023
£’000
47,423
(47,275)
148
–
148
18,843
9,033
(20,460)
(2,252)
5,164
2022
£’000
93,356
(63,289)
30,067
–
30,067
16,325
11,752
(18,873)
(3,522)
5,682
FINANCIAL STATEMENTS Notes to the financial statements
25. NON–CONTROLLING INTEREST (“NCI”) CONTINUED
The non-controlling interest originates from the disposal of a 37.5% shareholding in Black Wattle Colliery (Pty) Ltd in 2010 when the total
issued share capital in Black Wattle Colliery (Pty) Ltd was increased from 136 shares to 1,000 shares at par of R1 (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
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
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 Colliery (Pty) Ltd.
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 R832,075,000.
A non-controlling interest of 15% in Black Wattle Colliery (Pty) Ltd 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.
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).
26. RELATED PARTY TRANSACTIONS
Related party:
Simon Heller Charitable Trust
Current account
Loan account
Directors and key management
M A Heller, J A Heller and A R Heller
J Mintz
C A Parritt
R Priest
Totals at 31 December 2023
Totals at 31 December 2022
COST
RECHARGED
(BY) / TO
RELATED
PARTY
£’000
AMOUNTS
OWED
(TO) / BY
RELATED
PARTY
£’000
ADVANCED
BY RELATED
PARTY
£’000
(63)
–
18
–
(18)
(35)
(98)
(98)
(i)
(ii)
(ii)
–
(700)
–
10
–
(9)
(699)
(699)
–
–
–
–
–
–
–
–
Nature of costs recharged – (i) Property management fees (ii) Consultancy fees.
Directors
JA Heller and AR Heller have an interest in a number of private property companies. London & Associated Properties PLC uses agents to
assist with day to day property management matters. In their agency capacity those agents also provide support to these private property
companies. The approximate value of the services amounted to £70,000 (2022 £70,000).
In addition the Company received management fees of £10,000 (2022: £10,000) for work done for two charitable foundations, the
Michael & Morven Heller Charitable Foundation and the Simon Heller Charitable Trust.
Until his death Sir Michael Heller was also interested in the private property companies in which JA Heller and AR Heller are interested.
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 made to J Mintz remained outstanding at year end.
C A Parritt provided consultancy services to the Company on an invoiced fee basis.
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
(2022: £41,000) and no repayment (2022: £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 £2,279,000 (2022: £1,981,000). All other disclosures required, including interest in share options in respect of those directors,
are included within the remuneration report.
London & Associated Properties PLC 2023 75
FINANCIAL STATEMENTS Notes to the financial statements
27. 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
Share based payments
2023
209
39
248
2023
£’000
7,825
497
538
–
8,860
2022
213
33
246
2022
£’000
10,323
751
382
2,220
13,676
28. CAPITAL COMMITMENTS
There are no commitments for capital expenditure approved or contracted for at the year end (2022: £nil).
29. 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:
2023
2024
2025
2026
2027 +
2023
£’000
2,920
2,569
2,206
1,756
12,679
22,130
2022
£’000
4,245
3,555
3,022
2,601
15,253
28,676
30. CONTINGENT LIABILITIES AND EVENTS AFTER THE REPORTING PERIOD
An exit fee of £220,000 is due to Paragon bank, the lender to our development in West Ealing when this loan is repaid. Details of any other
contingent liabilities are disclosed in note 22. (2022: £Nil),
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
2023
£’000
43
1,614
41
1,698
2022
£’000
49
1,715
47
1,811
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 26 April 2024, 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.
There have been no events or transaction that require adjustment or disclosure.
76 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
31. COMPANY FINANCIAL STATEMENTS
Company balance sheet at 31 December 2023
Fixed assets
Tangible assets
Other investments:
Associated company
Subsidiaries and others
Current assets
Debtors
Bank balances
Creditors
Amounts falling due within one year
Net current liabilities
Total assets less current liabilities
Creditors
Amounts 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
31.3
31.4
31.4
31.5
31.6
31.7
31.9
31.9
2023
£’000
2022
£’000
443
728
489
672
1,161
1,604
13,444
3,398
16,842
(1,897)
14,945
16,549
489
672
1,161
1,889
15,346
3,867
19,213
(1,976)
17,237
19,126
(5)
16,544
(227)
18,899
8,554
4,866
47
(144)
3,221
16,544
8,554
4,866
47
(144)
5,576
18,899
The loss for the financial year was £2,355,000 (2022: loss £2,651,000)
These financial statements were approved by the board of directors and authorised for issue on 29 April 2024 and signed on its behalf by:
John Heller
Director
Jonathan Mintz
Director
Company Registration No. 341829
London & Associated Properties PLC 2023 77
FINANCIAL STATEMENTS Notes to the financial statements
31. COMPANY FINANCIAL STATEMENTS CONTINUED
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2023
Balance at 1 January 2022
Loss for the year
Total comprehensive expense
Balance at 31 December 2022
Loss for the year
Total comprehensive expense
Balance at 31 December 2023
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
8,227
(2,651)
(2,651)
5,576
(2,355)
(2,355)
3,221
TOTAL
EQUITY
£’000
21,550
(2,651)
(2,651)
18,899
(2,355)
(2,355)
16,544
£3.2 million (2022: £5.6 million) of retained earnings (excluding treasury shares) is distributable.
31.1. 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.
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.
78 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
31.1. COMPANY CONTINUED
The following accounting policies are consistent with those of the Group and are disclosed on page 48 to 54 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
31.2. RESULT FOR THE FINANCIAL YEAR
The Company’s result for the year was a loss of £2,355,000 (2022: loss of £2,651,000). 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.
31.3. TANGIBLE ASSETS
INVESTMENT PROPERTIES
OFFICE
FREEHOLD
£’000
LEASEHOLD
OVER 50 YEARS
£’000
LEASEHOLD
UNDER 50
YEARS
£’000
EQUIPMENT
AND MOTOR
VEHICLES
£’000
OFFICE
BUILDING
£’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
185
–
–
(10)
175
175
–
175
–
–
–
–
185
175
77
8
(19)
–
66
–
66
66
23
–
(2)
21
54
45
796
–
–
–
796
–
796
796
307
266
–
573
489
223
TOTAL
£’000
1,058
8
(19)
(10)
1,037
175
862
1,037
330
266
(2)
594
728
443
Cost or valuation at 1 January 2023
Additions in the year
Disposals
Decrease on revaluation
Cost or valuation at 31 December 2023
Representing assets stated at:
Valuation
Cost
Depreciation at 1 January 2023
Charge for the year
Disposals
Depreciation at 31 December 2023
Net book value at 1 January 2023
Net book value at 31 December 2023
The freehold and leasehold properties, excluding the present value of head leases and directors’ valuations, were valued as at 31 December
2023 by professional firms of chartered surveyors. The valuations were made at fair value. The directors’ property valuations were made at
fair value.
Allsop LLP
Add: Present value of headleases
2023
£’000
170
170
5
175
2022
£’000
180
180
5
185
London & Associated Properties PLC 2023 79
FINANCIAL STATEMENTS Notes to the financial statements
31.3. TANGIBLE ASSETS CONTINUED
The historical cost of investment properties was as follows:
Cost at 1 January 2023
Cost at 31 December 2023
FREEHOLD
£’000
LEASEHOLD
OVER 50 YEARS
£’000
–
–
–
–
LEASEHOLD
UNDER 50
YEARS
£’000
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 £nil (2022: £nil). 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 (2022: £0.3 million).
31.4. OTHER INVESTMENTS
COST OR VALUATION
At 1 January 2023
At 31 December 2023
SHARES IN
SUBSIDIARY
COMPANIES
£’000
SHARES IN
JOINT
VENTURES
£’000
508
508
164
164
TOTAL
£’000
1,161
1,161
SHARES IN
ASSOCIATE
£’000
489
489
Subsidiary companies
Details of the Company’s subsidiaries, joint ventures and associates are set out in note 12. Dragon is a joint venture and Bisichi and
Development Physics are associates of the Company.
In 2022 the Company’s investment Orchard Square Limited investment was impaired to a carrying value of £nil and, as explained in note 6,
following the loss of effective control of this subsidiary, no value is attributed to it at 31 December 2023.
31.5. DEBTORS
Trade debtors
Amounts due from associate and joint ventures
Amounts due from subsidiary companies
Other debtors
Prepayments and accrued income
31.6. CURRENT LIABILITIES
Creditors: amounts falling due within one year
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
Borrowings
The company has no bank borrowings.
80 London & Associated Properties PLC 2023
2023
£’000
27
1,978
11,138
157
144
13,444
2022
£’000
66
1,380
12,931
818
151
15,346
2023
£’000
45
382
33
118
223
738
358
2022
£’000
57
384
120
39
252
786
338
1,897
1,976
FINANCIAL STATEMENTS Notes to the financial statements
31.7. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Lease liabilities
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
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 greater than one year are £5,000 (2022: £226,000).
Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.
31.8. 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
Loss relief
Deferred tax asset at year end
2023
£’000
–
–
–
(132)
290
(4)
(154)
–
2023
£’000
5
5
2022
£’000
227
227
2023
HEAD
LEASES ON
INVESTMENT
PROPERTY 1
£’000
2023
TOTAL
£’000
2023
OFFICE
£’000
2022
TOTAL
£’000
239
2
12
253
(25)
228
223
2
3
228
-
2
12
14
(9)
5
-
2
3
5
239
-
-
239
(16)
223
223
-
-
223
287
241
12
540
(62)
478
251
224
3
478
2022
£’000
(451)
451
–
(39)
290
447
(698)
–
London & Associated Properties PLC 2023 81
FINANCIAL STATEMENTS Notes to the financial statements
31.9. SHARE CAPITAL
Details of share capital, treasury shares and share options are set out in note 24.
31.10. RELATED PARTY TRANSACTIONS
Related party:
Development Physics Limited
Current account
Dragon Retail Properties Limited
Current account
West Ealing Projects Limited
Current account
Bisichi Mining PLC
Current account
Simon Heller Charitable Trust
Current account
Loan account
Directors and key management
M A Heller, J A Heller and A R Heller
J Mintz
C A Parritt
R Priest
London & Associated Securities
Totals at 31 December 2023
Totals at 31 December 2022
COST
RECHARGED
TO (BY)
RELATED
PARTY
£’000
–
36
–
200
(63)
–
18
–
(18)
(35)
–
138
138
AMOUNTS
OWED
BY (TO)
RELATED
PARTY
£’000
ADVANCED TO
(BY) RELATED
PARTY
£’000
226
(33)
84
–
1,619
381
–
–
(700)
–
10
–
(9)
–
1,113
561
–
–
–
–
–
–
–
–
465
306
(i)
(ii)
(i)
(iii)
(iii)
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 41.602 per cent ownership of ‘Bisichi’.
Other details of related party transactions are given in note 26.
31.11. 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
31.12. CAPITAL COMMITMENTS
There was a capital commitment of £nil at 31 December 2023, being approved and contracted for (2022: £nil).
2023
2022
24
18
2023
£’000
1,330
171
89
1,590
2022
£’000
1,432
171
82
1,685
82 London & Associated Properties PLC 2023
FINANCIAL STATEMENTS Notes to the financial statements
31.13. 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:
2023
2024
2025
31.14. CONTINGENT LIABILITIES AND POST BALANCE SHEET EVENTS
There were no contingent liabilities at 31 December 2023 (2022: £Nil).
There have been no events or transaction that require adjustment or disclosure.
2023
£’000
7
5
-
12
2022
£’000
7
7
5
19
London & Associated Properties PLC 2023 83
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 (note 6, 13)
Additions to inventory at cost
CONSOLIDATED INCOME STATEMENT
Group income
(Loss)/profit before tax
Taxation
(Loss)/profit attributable to shareholders
(Loss)/profit per equity 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
^ Excluding the present value of head leases
2023
£M
2022
£M
2021
£M
2020
£M
2019
£M
22
2
11
1
9
45
£M
-
(14.75)
0.78
(13.97)
£M
53.18
(3.48)
(0.31)
(3.86)
(4.52)p
0.00p
£M
28.49
19.11
43.92p
£M
3.69
23
2
10
–
23
58
£M
2.53
(5.70)
0.75
(2.42)
£M
100.24
33.17
(12.00)
2.70
3.17p
0.00p
£M
32.55
23.47
38.14p
£M
39.39
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
34.78p
£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
(12.04)
£M
63.97
(4.54)
(0.95)
(6.48)
(7.59)p
0.00p
£M
36.73
27.65
43.04p
£M
14.98
84 London & Associated Properties PLC 2023
www.lap.co.uk
FSC® C001785
LONDON & ASSOCIATED PROPERTIES PLC
12 LITTLE PORTLAND STREET
LONDON W1W 8BJ
EMAIL: ADMIN@LAP.CO.UK