LFG06724
LONDON FINANCE &
INVESTMENT GROUP P.L.C.
REPORT & ACCOUNTS
30TH JUNE
2013
LONDON FINANCE & INVESTMENT GROUP P.L.C.
(“Lonfin”)
Lonfin is a United Kingdom investment finance and management company. Its core portfolio centres
on the larger companies in the FTSE 100 and FTSE Eurofirst 300 indices. Additionally, Lonfin holds
investments in United Kingdom listed companies where it has Directors in common. Lonfin is also a
43.8% shareholder in its associate Western Selection P.L.C. (“Western”), a strategic investment
company. Western’s share capital is admitted to trading on PLUS Stock Exchange.
Lonfin’s shares are quoted in the official lists of the London and Johannesburg stock exchanges.
_______________________________
CITY GROUP P.L.C.
(“City Group”)
City Group, which is owned by Lonfin and Western, provides management, office and secretarial
services to both companies and to other clients requiring a London presence, including companies in
which Lonfin and Western hold investments.
1
London Finance & Investment Group P.L.C. ________________
Contents
Directors and Advisers
Summary of
Shareholders
Investments, Financial Calendar and Analysis of
Directors’ Report
Business Review and Key Performance Indicators
Composition of General Portfolio
Consolidated Statement of Total Comprehensive Income
Consolidated Statement of Changes in Shareholders’ Equity
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Cash Flow
Notes to the Accounts
Corporate Governance
Statement of Directors' Responsibilities in Respect of the Accounts
Remuneration Report
Report of the Independent Auditors
Summary of Results
Notice of Annual General Meeting
Page
2
3
4
4
10
12
13
14
15
16
17
28
30
32
34
36
37
Proxy Form
Enclosed
1
London Finance & Investment Group P.L.C. __________________
Directors
D.C. MARSHALL, Chairman, age 69 ♦
Mr. Marshall joined the board in 1971 and was appointed Chairman in 1984. He resides in South
Africa, where he has interests in listed trading, financial and property companies. He is the
chairman of Western Selection P.L.C., an associate of Lonfin, and is a non-executive director of
Creston plc, Finsbury Food Group Plc, and Northbridge Industrial Services PLC. He is the chief
executive of Marshall Monteagle PLC and chairman of Halogen Holdings P.L.C.
F.W.A. LUCAS, BSc, PhD, Independent Non-executive, age 46 *
Dr. Lucas was appointed a director in 1999. He is a mining geologist by profession and one of the
founding shareholders and a director of Loeb Aron & Company Ltd, an authorised and regulated
investment and issuing house, which specialises in corporate finance and is a Member of the
London Stock Exchange and of PLUS Stock Exchange.
L.H. MARSHALL, Non-executive, age 42 ♦
Mr. Marshall joined the board in 2012. He is the finance director of Marshall Monteagle PLC and
has extensive investment management experience. He is a non-executive director of Hartim
Limited, Halogen Holdings P.L.C. and Heartstone Inns Limited.
J.H. MAXWELL, CA, CCMI, FRSA, Senior Independent Non-executive, age 68 *
Mr. Maxwell, who is a Chartered Accountant, was appointed a director of the Company in 2003.
He currently serves as a non-executive director of RSA Insurance Group PLC, First Assist
Insurance Services Limited and The Royal Automobile Club Motor Sports Association Limited.
J.M. ROBOTHAM, OBE, FCA, Non-executive, age 80
Mr. Robotham joined the board in 1984. He is a non-executive director of Western Selection
P.L.C. and is a Chartered Accountant.
*
♦
Member of the audit committee
Member of the investment committee
Member of nomination committee
Secretaries and
Registered Office
United Kingdom
City Group P.L.C.
30 City Road
London, EC1Y 2AG
Tel: 020 7448 8950
Fax: 020 7638 9426
www.city-group.com
E-mail: lonfin@city-group.com
Republic of South Africa
D.A. Greer
11 Sunbury Park
La Lucia Ridge Office Estate
La Lucia 4051
Durban
Tel: +27 (0)31 566 7600
Registered Number
201251
Computershare Investor Services (Pty.) Limited
70 Marshall Street
Johannesburg, 2001
(P.O. Box 61051, Marshalltown 2107)
Tel: +27 11 370 5000
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent, BR3 4TU
Tel: 0871 664 0300
(Calls cost 10p per minute plus network
extras,
lines are open 8.30am-5.30pm
Monday-Friday)
From outside the UK +44 20 8639 3399
2
______________________________________________________
Summary of Investments
At 30th June
Investment in associate at market value:
Western Selection P.L.C.
Strategic Investments at market value:
Finsbury Food Group plc
MWB Group Holdings Plc
General Equity Portfolio at market value
Tangible non-current assets *
Cash, bank balances and deposits
Bank loans
Other net (liabilities)/assets
Non-controlling interests
Net assets, including investments at market value
Net assets per share
Dividends
Interim
Proposed final
2013
£000
3,930
5,850
-
9,780
5,601
3
116
(650)
(27)
(81)
14,742
47.2p
2012
£000
3,144
1,880
70
5,094
4,533
4
2,217
(1,950)
55
(98)
9,855
31.6p
0.35p
[ ]
0.35p
0.35p
Profit per share (excluding unrealised changes in the market value of
investments):
0.4p
6.4p
Paid on 1st April 2013
[ ] 2013
Payable on [ ] 2013 to holders on [ ] 2013.
Announced in February
Number
%
Total
%
Financial Calendar
Interim dividend
Annual General Meeting
Final dividend for 2013
Half-year results
Analysis of Shareholders
1-
500
501-
1,000
1,001-
5,000
5,001-
10,000
10,001
50,000
50,001-
100,000
100,001-
250,000
500,000
250,001-
500,001- 1,000,000
Over 1,000,000
The current price of the Company's shares can be found on the website of the London Stock Exchange and in
the business section of the major South African newspapers.
100.0
31,207,479
100.0
3
London Finance & Investment Group P.L.C. _________________
Incorporated in England and Wales – number 201251
Directors’ Report
Business Review
Lonfin is an investment company whose target is to achieve growth in shareholder value in real terms over the
medium to long term while maintaining a progressive dividend policy.
In the short term, the performance of the Company can be influenced by overall stock market performance and to
diversify this short term risk the Company has a combination of Strategic Investments and a General Portfolio.
Strategic Investments are significant investments in smaller U.K. quoted companies and these are balanced by a
General Portfolio, which consists of investments in major U.S.A., U.K. and other European companies which
provides an exposure to the equity market.
At 30th June 2013, the two Strategic Investments, in which we have Directors in common, were our associated
company Western Selection P.L.C. and Finsbury Food Group Plc. Detailed comments on our Strategic Investments
are given below.
Net assets have increased over the year by 49.4% from 31.6p per share to 47.2p per share
The General Portfolio has increased over the year by 25.7% compared to increases of 11.6% and 12.8% in
FTSE100 and FTSE Eurofirst 300 respectively.
The General Portfolio is yielding 3.0% (2012 – 3.0%).
Net borrowings of £530,000 compared with £267,000 of net cash at 30 June 2012
Decrease of 4% in operating costs
Results
Our net assets per share have increased 51.6% to 47.3p from 31.6p last year. The increase reflects the appreciation in
the value of our Strategic Investments by 91% particularly Finsbury Food Group. The General Portfolio decreased
by 25.7%, outperforming increases of 11.6% and 12.8% in the FTSE 100 index and the FTSE Eurofirst 300 index,
over the year.
The Group achieved a profit for the year, before tax and the fair value adjustments of investments, of £169,000
(2012, including profit on sale of freehold property of £2,137,000 - £2,074,000). The profit after fair value
adjustments, tax and non-controlling interest was £5,119,000 (2012 - £869,000) giving a profit per share of 16.4p
(2012 – 2.8p).
Strategic Investments
Western Selection P.L.C. (“Western”)
The Group owns 7,864,412 shares, being 43.8%, of the issued share capital of Western.
On [ ] 2013, Western announced a profit before associates and tax of £[ ] for its year to 30th June 2013
(2012 – £164,000). Including associates and after exceptional items and tax, losses per share were. [ ]p (2012 -
profits – 1.0p).
Western has paid an interim dividend of 0.85p and proposes an increased final dividend of 0.9p (2012 - 0.80p).
Western’s net assets at market value were £12,895,000, equivalent to [ ]p per share, a decrease of [ ]% from 72p
last year.
Our share of the net assets of Western including the value of Western’s investments at market value, was £[ ]
million] (2012 - £5.6 million). The fair value recorded in the statement of financial position is the market value of
£3,930,000 (2012 - £3,144,000). This represents 26% (2012 – 32%) of the net assets of the Group.
4
______________________________________________________
Mr. D. C. Marshall is the Chairman of Western and Mr. Robotham and Mr. Beale, the chief executive of our
subsidiary company (City Group P.L.C.), are non-executive Directors. Western has Strategic Investments in Creston
plc, Northbridge Industrial Services plc, Swallowfield plc and Hartim Limited. An extract from Western’s
announcement relating to its Strategic Investments is set out below:
Creston plc
Creston is a marketing services group whose strategy is to grow within its sector both by organic growth and
through selective acquisition to become a substantial, diversified marketing services group. Further information
about Creston is available on their website: www.creston.com.
The audited results for the year to 31st March 2013, show a profit after tax of [£ ] (2012 - £10,300,000),
equivalent to fully diluted earnings of [ p] per share (2012 - 12.34p).
Western maintained its holding of 3,000,000 shares in Creston, which is 4.9% of their issued share capital. The
value of this investment at 30th June 2013 was [£ ] (2012 - £1,650,000) being [ %] (2012 - 13%) of
Western’s assets.
Northbridge Industrial Services PLC
Northbridge hires and sells specialist industrial equipment to a non-cyclical customer base. With offices or agents
in the U.K., U.S.A., Dubai, Germany, Belgium, France, Australia, Singapore, India, Brazil, Korea and Azerbaijan,
Northbridge has a global customer base. This includes utility companies, the oil and gas sector, shipping,
construction and the public sector. The product range includes loadbanks, transformers, generators, compressors,
loadcells and oil
their website:
www.northbridgegroup.co.uk.
information about Northbridge
is available on
Further
tools.
Northbridge announced profits of [£ ] for the year ended 31st December 2012 (2011 - £2,321,000) and
declared a final dividend of 3.25p per share, making [ p ] for the year (2010 - 5.0p).
Western maintained its holding of 2,200,000 shares in Northbridge, which is 14.3% of their issued share capital.
The value of this investment at 30th June 2013 was [£ ] (2012 - £5,984,000) being [ %] (2012 - 46%) of
Western’s assets.
Swallowfield plc
Swallowfield is a market leader in the development, formulation, manufacture and supply of cosmetics, toiletries and
related household products for global brands and retailers operating in the cosmetics, personal care and household
goods market. Further information about Swallowfield is available on their website: www.swallowfield.com.
Swallowfield announced its results to June 2013 showing a profit after tax of [£ ] compared to £1,263,000
for the comparable period last year. Dividends of [£ ] (2012 - £118,000) were received from Swallowfield
during the year.
At the reporting date Western owned 1,869,149 shares which is 16.5% of their issued share capital. The market
value of this investment on 30th June 2013 was [£ ] (2012 - £2,187,000), being [ %] (2012 - 17%) of
Western’s net assets.
Investments in Associates
Hartim Limited
Hartim is the unquoted holding company for Tudor Rose International Limited (“TRI”) which was founded in 1984.
It works closely with a number of leading UK branded fast moving consumer goods companies, offering a complete
sales, marketing and logistical service. Based in Stroud, Gloucestershire, TRI sells into 78 countries worldwide
including USA, Spain, Portugal, Italy, Czech Republic, Russia, Turkey, South Africa, Saudi Arabia, UAE, Malaysia,
Australia and China. Hartim has acquired out of administration its principal distributor in Australia; to maintain
and improve the service that it can offer to principals. Losses are being incurred by this business while it is being
turned around. Hartim has also incurred an exceptional loss in a legal dispute about the exercise of the break
clause in a property lease.
Western holds 49.5% of Hartim, which has a 31st December year end and sustained losses in 2012 of £220,000 after
tax on turnover of £27,799,000. Western’s share of the consolidated loss after exceptional items and tax for the
twelve months to 30th June 2013 was [£ ] (2012 – profit - £342,000) and the book value of the investment at
30th June 2013 was [£ ] (2012 - £1,124,000), being [ %] (2012 - 9%) of Western’s assets.
5
London Finance & Investment Group P.L.C. __________________
MWB Group Holdings Plc (“MWB”)
MWB was placed into administration on 16 November 2012. We made an impairment provision in the subsidiary
holding this investment of £1,611,000 in 2012 and have written off the balance of the carrying value of £70,000 this
year.
Finsbury Food Group Plc (“Finsbury”)
Finsbury is one of the largest producers and suppliers of premium cakes, bread and morning goods in the UK. The
Group currently supplies most of the UK's major supermarket chains, including Asda, Co-op, Morrisons, Sainsbury,
its website:
Somerfield, Tesco and Waitrose.
www.finsburyfoods.co.uk.
information about Finsbury
is available on
Further
The Group increased its holding in Finsbury by 1 million shares at a cost of £390,000 and held 9 million shares,
representing 13.95% of their share capital. The market value of the holding was £5,850,000 on 30th June 2013 (cost -
£2,283,000) and represents 39% (2012 – 19%) of the net assets of the Group.
Mr. D.C. Marshall and Mr. Beale, the Chief Executive of our subsidiary company City Group P.L.C., are non-
executive Directors of Finsbury.
General Portfolio
The investments comprising the General Portfolio at 30th June 2013 are listed on page 11. The spread of the General
Portfolio was increased by the addition of North American holdings. The portfolio is well spread with material
interests in Food and Beverages, Oil, Natural Resources, Chemicals, and Tobacco. We believe that the portfolio of
quality companies we hold has the potential to outperform the market in the medium to long term.
The number of holdings in the General Portfolio has reduced to 29 from 30. We have increased the amount invested
in the General Portfolio over the year by £626,000 (2012: increased by £171,000).
We have renegotiated our bank facility, and now have a facility of £1.5 million expiring in 2017.
Operations & Employees
All of our operations and those of our associate, Western, except investment selection, are outsourced to our
subsidiary, City Group P.L.C. City Group also provides office accommodation, company secretarial and head office
finance services to a number of other U.K. and Jersey clients. City Group has responsibility for the initial
identification and appraisal of potential new strategic investments for the Group and the day to day monitoring of
existing strategic investments.
Dividend
The Board recommend a final dividend is [0.35]p, making [ p] per share for the year (2012 - 0.7p). Subject to
member’s approval, the dividend will be paid on [ ] 2013 to those members on the register at the close of
business on [ ] 2013. Shareholders on the South African register will receive their dividend in South African
rand converted from sterling at the closing rate of exchange on [ ] 2013.
Outlook
We remain concerned that the high national debts of developed countries can only be reduced significantly through
prolonged austerity and/or substantial inflation. We remain invested in large diversified international non-financial
companies, which we think are well placed to outperform the market. We hope that volatility in the financial markets
will provide long term investors, such as ourselves, with buying opportunities.
6
______________________________________________________
Financial Instruments & Risks
The financial instruments of the Group, in addition to its investments, comprise borrowings to finance those
investments and cash. As an investment company our principal market risks arise from the Group’s financial
instruments, and are:
Stock market volatility and economic uncertainty
The Company’s investment performance will be affected by general economic and market conditions. Although the
Company cannot predict the level of growth in the global economy, as with most businesses, it believes a period of
weak market growth will have an adverse effect on its investments. Volatility relating to the Company’s investments,
including movements in interest rates and returns from equity and other investments will impact upon the value of the
Group’s investment portfolio.
Possible volatility of share prices of investments
A number of factors outside the control of the Company may impact the share price performance of its investments.
Such factors could include investor sentiment, local and international stock market conditions, divergence of results
from analysts’ expectations, changes in earnings estimates by analysts and changes in political and economic
sentiment.
Dividends
The ability of the companies that we invest in to pay dividends to shareholders depends upon their profitability, cash
flow and the extent to which as a matter of law they have sufficient distributable reserves from which any proposed
dividends may be paid. There can be no guarantee that the companies we invest in will be able to sustain their
dividend policies in the future.
Ability to make strategic investments
There are limited opportunities for the Company to make strategic investments and therefore there is no guarantee
that the Company will be able to do so at a price the Directors believes will represent fair value.
Liquidity of equity investments in strategic investments
Strategic investments may be made in the equity of “small cap” companies, both listed and unlisted. There is a risk
that due to the low level of liquidity in the equity of these strategic investments the Company may not be able to
realise its investment, either at all, or at a price the Company believes reflects fair value.
The depth and overlap of experience of Directors means that there is no key-man dependency. Note 20 sets out the
policies of the Board, which have remained substantially unchanged for the year under review, for managing risks
associated with its financial instruments. In addition the Group is exposed to investment risk arising from the
selection of investments which it mitigates by drawing on the investment experience of its Directors.
Key Performance Indicators
Key Performance Indicators (“KPIs”) are the yardsticks against which the Board measures the performance of the
Company. Our objectives are real growth over the long term in dividends and net assets per share. Comments on the
movement of these indicators over the year are detailed above.
Net assets per share
Dividends (net) per share
2013
47.3p
[ ]
2012
31.6p
0.7p
2010
35.0p
0.6p
2009
27.1p
0.6p
Definition of KPIs used above
Net Assets per share - Net assets including investments at market value at their most recent valuation divided by the
number of shares in issue at the year end
Dividends per share - Dividends declared for the year.
7
London Finance & Investment Group P.L.C. __________________
Directors
A list of the Directors of the Company is shown on page 2. The interests in the Company’s shares of the Directors
who have held office in the period from 1 July 2012 were as follows:
D.C. Marshall - Beneficial
- Non-beneficial *
F.W.A. Lucas †
J.M. Robotham - Beneficial
- Non-beneficial *
J.H. Maxwell
L. H. Marshall (Appointed 3rd August 2012)
30th June 2013
Shares
[ ]
[ ]
162,500
30,000
11,377,474
65,000
-
30th June 2012
Shares
2,301,000
10,589,693
142,500
30,000
11,187,474
65,000
-
* These holdings arise as the individuals concerned are trustees and/or directors of entities that hold shares in the
Company. The non-beneficial interest of Mr. Robotham overlaps with the non-beneficial interest of Mr. D.C.
Marshall.
† Of this figure Dr. Lucas owns 80,000 shares personally and 82,500 shares are owned by Loeb Aron & Company
Ltd, of which Dr. Lucas is a director and shareholder.
There have been no changes in Directors' share interests between 1st July 2013 and the date of this report. [ CHECK ]
The appointment or removal of Directors is determined by shareholders at a General Meeting. Between General
Meetings the Board may appoint additional Directors who are required to stand for election at the next General
Meeting. In addition the Company’s Articles of Association require one third of Directors to stand for re-election
every year, accordingly Mr. D.C. Marshall retires by rotation and, being eligible, offers himself for re-election at the
Annual General Meeting.
Substantial Interests
In addition to the Directors’ shareholdings shown above, the Company has been notified under Section 808 of the
Companies Act 2006 of the following interests in 3% or more of its shares:
W.T. Lamb Holdings Limited
Philip J. Milton & Company PLC
IFG Trust Company (Jersey) Limited *
* The trustees have discretion over how to vote these shares.
Corporation Taxes Act 2012
The company is not a close company as defined in this Act.
Auditors
Shareholding
4,600,000
2,175,344
1,200,000
% interest
14.7
7.0
3.8
A resolution to re-appoint Steele Robertson Goddard as Auditors will be proposed at the Annual General Meeting in
accordance with Section 489 of the Companies Act 2006.
The Directors have taken all the steps that they ought to have taken to make themselves aware of any information
needed by the Company’s Auditors for the purposes of their audit and to establish that the Auditors are aware of that
information. The Directors are not aware of any relevant audit information of which the Auditors are unaware.
Payment of Suppliers
The Company does not follow any code or statement on payment practice, but the policy of the Company is to abide
by such payment terms as are agreed with suppliers within the terms of supply. The Company does not have a
significant level of trade creditors.
8
______________________________________________________
Financing Structure
The Group is financed by a mixture of debt and equity. The Board believes that a reasonable level of gearing can
enhance returns to shareholders. At 30th June 2013 the Group had bank facilities of £2 million which expire in April
2013. These have since been renegotiated and the Group now has bank facilities of £1.5 million which expire in
2017.
At 30th June 2013 the Company had only one class of share, namely Ordinary Shares of 5p each, of which there were
31,207,479 in issue. The rights and obligations attached to these shares are set out in the Company’s Articles which
may only be amended by a vote of shareholders at a General Meeting. Each share entitles the holder to one vote on
each shareholder resolution. There are no special arrangements or restrictions relating to any of these shares, whether
in terms of transfers, voting or other rights, or relating to changes in control of the company.
To provide Directors with flexibility over the management of the Company’s capital, shareholders are being asked to
approve resolutions at the AGM which would permit the Company to issue new shares as explained below. Similar
resolutions were approved at the last AGM.
Special Business to be transacted at the Annual General Meeting
In addition to the ordinary business to be transacted at the Annual General Meeting of the Company referred to in
resolutions 1 to 5 of the Notice of Meeting, the Directors propose certain special business as set out in Resolutions 6
and 7 for the purposes summarised below:
Resolution 6 - Authority to allot shares - Ordinary resolution
A resolution will be proposed, as an ordinary resolution, at the forthcoming Annual General Meeting, to renew the
Directors authority to allot shares up to the level of the authorised share capital. If passed, this resolution will grant
the Directors power to allot authorised but unissued capital for a maximum period of 15 months.
Resolution 7 - Pre-emption rights - Special resolution
Section 570 of the Companies Act 2006 requires that, when Directors propose to allot shares for cash, they must first
offer such shares to existing shareholders in proportion to their existing shareholdings, unless powers have previously
been given to the Directors under section 563 of the Act to disapply these provisions. The Directors consider it
desirable for shareholders to approve a limited disapplication until the next Annual General Meeting, in order to
permit the allotment of shares for cash in limited circumstances to persons other than shareholders. This limited
disapplication will be in respect of 1,560,000 shares equal to 5% of the issued share capital of the Company.
The Directors have no present intention of issuing any part of the unissued share capital and no issue will be made
which would effectively alter the control of the Company without the approval of the shareholders in general meeting.
[ ] 2013
By Order of the Board
CITY GROUP P.L.C.
Secretaries
9
London Finance & Investment Group P.L.C. __________________
Composition of General Portfolio
at 30th June 2013
Henkel
L’Oreal
Nestle
British American Tobacco
Diageo
Schindler-Holdings
Pernod-Ricard
Investor
Heineken
Novartis
Royal Dutch Shell ‘B’
Unilever
Reckitt Benckiser
BASF
Imperial Tobacco
Danone
ABB
Holcim
Linde
BHP Billiton
Procter & Gamble
Exxon
Philip Morris International
Chevron
Givaudan
Siemens
Anheuser Busch Inbev
LVMH
Glencore International
Analysis by currency
Euro
Sterling
Swiss franc
US dollar
Swedish kroner
£000
315
304
295
293
278
256
252
245
243
243
238
234
228
205
203
198
189
170
147
118
114
109
108
108
106
104
101
100
97
%
5.7
5.5
5.3
5.2
5.0
4.6
4.5
4.4
4.3
4.3
4.2
4.2
4.1
3.7
3.6
3.5
3.4
3.0
2.6
2.1
2.0
1.9
1.9
1.9
1.9
1.9
1.8
1.8
1.7
5,601
100.0
£000
%
1,970
1,688
1,260
438
245
35.1
30.1
22.6
7.8
4.4
5,601
100.0
10
______________________________________________________
Investment Policy
The Company’s investment policy is to invest in a range of “strategic” investments, a “general portfolio” consisting
primarily of highly liquid stock market investments, both in equity instruments and bonds, and, at the Board’s discretion,
‘other investments’, typically property and other physical assets. This investment policy is designed to achieve the
Company’s objectives of capital growth in real terms over the medium term, while maintaining a progressive dividend
policy.
Both “strategic” and “general portfolio” investments can be in any industry sector. “Strategic” investments are significant
minority positions in UK small cap companies which can be either quoted or unquoted; to diversify risk the policy is to
maintain a number of such investments. Most such investments will be in shares of companies that are publicly traded but
investments can also be made in publicly traded and untraded debt or equity instruments of companies that are strategic
investments. The “general portfolio” aims to further diversify risk through a spread of investments and a target of between
20 and 30 holdings in some of the largest [European] quoted companies.
The intention is for between 30 per cent. and 70 per cent. of the overall investment portfolio with a maximum limit of 80 per
cent. to be in “strategic” investments at the point of investment, with the balance of the portfolio, net of “other investments”,
to be in the “general portfolio”. “Other investments” will be limited to 20 per cent. of the overall value of the investment
portfolio, measured at the point of investment. No one “strategic investment” or “other investment” will represent more than
30 per cent. and 20 per cent. respectively of the value of all investments at the time of making such investment and no one
“general portfolio” investment will represent more than 10 per cent. of the value of the “general portfolio” at the time of
such investment.
Within these parameters, changes in strategic and other investments are decided on by the Board and changes to the general
portfolio are decided on by the Board or, between Board meetings, by an Investment Committee of the Board. The
investment guidelines within which the Investment Committee operates allow the Investment Committee discretion within
the parameters set by the Investment Policy. The investment mix and level of borrowings are reviewed at each board
meeting.
The Company’s gearing is limited at or below 70 per cent. of the total value of investments.
11
London Finance & Investment Group P.L.C. __________________
Consolidated Statement of Total Comprehensive Income
For the year ended 30th June
Dividends - Listed investments
Interest receivable
Rental and other income
(Losses)/Profits realised on sales of investments
Management services fees
Operating income
Administration expenses
Operating profit/(loss)
Unrealised changes in the carrying value of investments
Exceptional profit on disposal of property
Interest payable
Profit on ordinary activities before taxation
Tax on result of ordinary activities
Profit on ordinary activities after taxation
Non-controlling interest
Profit for the financial year attributable to members of the holding
company
Other comprehensive income
Total comprehensive income attributable to shareholders
Reconciliation of headline earnings
Basic profit per share
Adjustment for the unrealised changes in the carrying value of investments, net
of tax
Headline profit per share
All profits and losses are on continuing activities.
Notes
3
2
11
6
7
8
8
2013
£000
313
4
54
215
228
814
(610)
204
4,989
-
(33)
5,160
(56)
5,104
17
5,121
-
5,121
16.4p
(16.0)p
0.4p
2012
£000
265
4
70
(32)
295
602
(638)
(36)
(1,134)
2,137
(27)
940
(65)
875
(6)
869
-
869
2.8p
3.6p
6.4p
The notes on pages ● to ● form part of these accounts.
12
_____________________________________________________
Consolidated Statement of Changes in Shareholders’ Equity
Ordinary
Share
Capital
£000
Share
premium
account
£000
Revaluation
Reserve
£000
Unrealised
profits/(losses)
on investments
£000
Share of
undistributed
results of
Subsidiaries
£000
Retained
realised
profits &
losses
£000
Non-
Controlling
interests
£000
Total
equity
£000
Total
£000
904
5,825
9,189
92
9,281
(1,750)
2,086
-
-
-
(1,476)
-
-
-
259
330
869
-
(203)
(203)
(203)
(203)
336
(572)
6,211
9,855
6
-
-
-
98
875
-
(203)
(203)
9,953
336
4,989
-
-
(572)
143
-
-
6,211
(11)
(234)
(234)
9,855
5,121
(234)
(234)
98
(17)
-
-
9,953
5,104
(234)
(234)
5,325
(429)
5,966
14,742
81
14,823
Year ended 30th June 2012
Balances at 1st July 2012
1,560
2,320
Total comprehensive income
Transfer on disposal
Dividends paid
Total transactions with shareholders
-
-
-
-
-
-
-
-
Balances at 30th June 2013
1,560
2,320
Year ended 30th June 2013
Balances at 1st July 2012
1,560
2,320
Total comprehensive income
Dividends paid
Total transactions with shareholders
-
-
-
-
-
-
Balances at 30th June 2013
1,560
2,320
330
-
(330)
-
-
-
-
-
-
-
-
The notes on pages ● to ● form part of these accounts.
13
London Finance & Investment Group P.L.C. __________________
Consolidated Statement of Financial Position
At 30th June
Non-current Assets
Tangible assets
Investments
Current Assets
Listed investments
Trade and other receivables
Cash at bank
Notes
9
11(a)
11(b)
12
Current Liabilities
Trade and other payables: falling due within one year
13
Net Current Assets
Deferred taxation
2013
£000
3
9,780
9,783
5,601
256
116
5,973
(853)
5,120
(80)
2012
£000
4
5,094
5,098
4,533
272
2,217
7,022
(2,167)
4,855
-
Total Assets less Current Liabilities
14,823
9,953
15
1,560
2,320
5,395
(499)
5,966
14,742
81
14,823
1,560
2,320
336
(572)
6,211
9,855
98
9,953
Capital and Reserves
Called up share capital
Share premium account
Unrealised profits and losses on investments
Share of retained realised profits and losses of subsidiaries
Company’s retained realised profits and losses
Non-controlling equity interests
Approved and authorised by the Board on [ ] 2013.
D.C. Marshall
Director
The notes on pages ● to ● form part of these accounts.
14
_______________________________________________________
Company Statement of Financial Position
at 30th June
Non-current Assets
Investments in Group companies
Current Assets
Listed investments
Trade and other receivables
Bank balance
Current Liabilities
Notes
10
11(b)
12
2013
£000
6,147
6,147
5,601
35
76
5,712
2012
£000
5,987
5,987
4,533
18
2,202
6,753
Trade and other payables: falling due within one year
13
(757)
(2,096)
4,955
4,657
(80)
-
11,022
10,644
15/16
16
16
16
1,560
2,320
1,176
5,966
11,022
1,560
2,320
553
6,211
10,644
Net Current Assets
Deferred taxation
Total Assets less Current Liabilities
Capital and Reserves
Called up share capital
Share premium account
Unrealised profits and losses on investments
Realised profits and losses
Equity shareholders' funds
Approved and authorised by the Board on [ ] 2013.
D.C. Marshall
Director
Registered in England and Wales – Number 201251
The notes on pages ● to ● form part of these accounts.
15
London Finance & Investment Group P.L.C. __________________
Consolidated Statement of Cash Flow
For the year ended 30th June
Notes
Cash flows from operating activities
Profit before tax
Adjustments for non-cash and non-operating activities -
Finance expense
Profit on disposal of property
Depreciation charges
Unrealised changes in the fair value of investments
2013
£000
5,160
33
-
1
(4,989)
205
2012
£000
940
27
(2,137)
5
1,134
(971)
Taxes paid
6
(22)
(17)
Changes in working capital
Increase in trade and other receivables
Increase in trade and other payables
Increase in current asset investments
Net cash outflow from operating activities
(16)
64
(375)
(327)
(144)
(12)
158
(301)
(155)
(63)
Cash flows from disposal of property
-
2,495
Cash flows from investment activity
Purchase of strategic investments
Net cash outflow from investment activity
Cash flows from financing
Interest paid
Equity dividends paid
Net repayment of loan facilities
Net cash outflow from financing
(Decrease)/Increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at end of the year
18
18
18
(390)
(390)
(33)
(234)
(1,300)
(1,567)
(2,101)
2,217
116
-
-
(27)
(203)
134
(96)
2,196
21
2,217
The notes on pages ● to ● form part of these accounts.
16
______________________________________________________
Notes to the Accounts
For the year ended 30th June 2013
1. Accounting Policies
(i)
The accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted
by the European Union and with those parts of the Companies Acts 2006 applicable to companies reporting under
IFRS. The accounts are prepared on the historical cost basis, except for certain assets and liabilities which are
measured at fair value, in accordance with IFRS.
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates
and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and
expenses. The estimates and associated assumptions are based on historical experience and other factors that are
believed to be reasonable under the circumstances, the results of which form the basis for making judgements about
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if applicable. The most significant techniques for estimation are described in the
accounting policies below. These policies have been applied consistently to all of the years presented, unless
otherwise stated.
At the date of authorisation of these financial statements the International Accounting Standards Board (IASB) and
the International Financial Reporting Interpretations Committee (IFRIC) have issued new standards and
interpretations and amended or revised standards, to be applied to financial statements with periods commencing
either on or after 1 July 2013. The Company has not opted for early adoption for those which have been endorsed by
the EU. The Directors do not expect that the adoption of these, where applicable, would have a material impact on the
Company’s financial statements in the period of initial application
(ii)
These consolidated accounts include the results of the subsidiaries (all of which are companies) for the year to 30th
June 2013. Results of subsidiaries are included from their effective date of acquisition to their effective dates of
disposal. The non-controlling interests are wholly attributable to equity interests in subsidiaries. Under Section 396
of the Companies Act 2006, the Company is exempt from the requirement to present its own income statement.
(iii) Revenue is recognised only when it is probable that the economic benefits associated with the transaction will flow
to the entity. However, when an uncertainty arises about the collectability of an amount already included in revenue,
the uncollectable amount, or the amount in respect of which recovery has ceased to be probable, is recognised as an
expense, rather than as an adjustment of the amount of revenue originally recognised.
(iv) Dividends receivable are taken to the credit of the income statement in respect of listed shares when the shares are
quoted ex dividend and in respect of unlisted shares when the dividend is declared.
(v) All borrowing costs are recognised in the income statement in the period in which they are incurred.
(vi) Depreciation is provided on non-current assets so as to write them off over their estimated useful lives. Computer
and electronic equipment expenditure of less than £2,500 is written off in the year of acquisition. The annual rates of
depreciation during the year were
Equipment
25% straight line
17
London Finance & Investment Group P.L.C. __________________
1. Accounting Policies (continued)
(vii) Financial assets are classified by category, depending on the purpose for which the asset was acquired. The
company’s accounting policy is as follows:
a)
b)
c)
Fair value through income: Non-derivative financial assets other than unquoted investments and trade and
other receivables are classified as associates, strategic and general portfolio investments and are recognised as
being fair value through income. They are valued using quoted prices and movements in value are taken to the
income statement.
Unquoted investments. These are stated at cost net of impairment provisions because market value cannot be
readily determined. Reviews for indications of impairment are carried out at least annually.
Trade and other receivables. The carrying amounts approximate to their fair values, the transactions giving
rise to these balances arising in the normal course of trade and standard industry terms.
(viii) Cash and cash equivalents comprise cash balances and deposits.
(ix) The charge for taxation is based on the taxable profit for the year. Taxable profit differs from net profit as reported in
the income statement. It excludes items of income (primarily franked dividend income) and expense that are never
taxable or deductible and items which are taxable or deductible in other years.
Deferred taxation is provided on the full liability method, at tax rates that are expected to apply, for temporary
differences arising between the treatment of certain items for taxation and accounting purposes. Deferred tax assets
are recognised only to the extent that the Directors consider that it is more likely than not that there will be suitable
taxable profits from which the underlying timing differences can be deducted. Taxation charges or recoveries are
recognised in the income statement, or directly to equity when related to items recognised directly to equity.
(x)
The Group makes pension contributions to the personal pension plans of certain employees which are defined
contribution (money purchase) schemes. A defined contribution plan is a post-employment benefit plan under which
an entity pays contributions into a separate entity and will have no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit
expense in the periods during which services are rendered by employees.
(xi) Transactions denominated in foreign currencies are translated at the exchange rate at the date of the transaction.
Foreign currency assets and liabilities at the year-end are translated at year-end exchange rates.
2. Operating profit - Segmental Analysis
Dividends - Listed investments
Interest receivable
Rental and other income
(Losses)/Profits on sales of investments, including provisions
Management services fees
Operating income
Administration expenses – normal
Operating profit/(loss)
Investment
Operations
Management
Services
2013
£000
313
4
-
215
-
532
(295)
237
2012
£000
265
3
16
(32)
-
252
(301)
(49)
2013
£000
-
-
54
-
228
282
(315)
(33)
2012
£000
-
1
54
-
295
350
(337)
13
All revenues are derived from operations within the United Kingdom. Consequently no separate geographical
segment information is provided.
18
_______________________________________________________
Notes to the Accounts (continued)
For the year ended 30th June 2013
3. Administration Expenses
Normal administration expenses include:
Depreciation
Auditors' remuneration - audit services
- non-audit services
Directors' emoluments – Note 4
Staff costs - Note 5
Group
2013
£000
2012
£000
1
22
3
48
377
5
22
3
46
390
4. Directors' Emoluments and Related Party Disclosures
The key management personnel are considered to be the Group Directors. Their emoluments are detailed in the
Remuneration Report on pages 34 to 36.
Related Party Disclosures
London Finance & Investment Group P.L.C. and its wholly owned subsidiary ("Lonfin"), owns 43.8% of its associate
Western Selection P.L.C. (“Western”) of which Mr. D.C. Marshall, Mr. Robotham and Mr. Beale, the chief executive
of our subsidiary company (City Group P.L.C.), are Directors. Mr. D.C. Marshall and Mr. Robotham's shareholdings
in Lonfin are set out in the accompanying director’s report.
Lonfin and/or Western hold shares in Finsbury Food Group Plc, Creston plc, and Northbridge Industrial Services
PLC. Mr. D.C. Marshall is a director of Creston plc, Finsbury Food Group plc, and Northbridge Industrial Services
PLC and Mr. Beale is a director of Finsbury Food Group Plc.
Mr. D. C. Marshall and Mr. L. H. Marshall are Directors and Mr. Beale is the non-executive chairman of Marshall
Monteagle PLC, and Mr D. C. Marshall is a shareholder in Marshall Monteagle, which in turn is a substantial
shareholder in Halogen Holdings P.L.C. Mr. D. C. Marshall is chairman of Halogen Holdings P.L.C. and Mr L. H.
Marshall and Mr. Beale are Directors of Halogen Holdings plc.
Lonfin and Western own City Group P.L.C. in the ratio 51.4% and 48.6% respectively. City Group P.L.C. provides
offices and secretarial and administrative services to various companies in the United Kingdom and abroad most of
which are associated with Lonfin and Western including all of the above companies.
City Group operates as a shared service centre and does not seek to make a profit from the provision of its standard
services to these related parties. The various secretarial, accounting, and Directors fees received by City Group
P.L.C. from those companies, their associates and subsidiaries, total £220,000 (2012 - £279,000) for the year under
review. At the statement of financial position date the aggregate balance due in respect of fees invoiced was £66,000
(2012 - £148,000) and no fees had been paid in advance (2012 - nil paid in advance). Settlement is within normal
credit terms.
Other than as disclosed above no Director was interested in any contract between the Directors, the company and any
other related party that subsisted during or at the end of the financial year.
19
London Finance & Investment Group P.L.C. __________________
5.
Staff Costs
Staff costs, excluding those relating to the Directors shown in the Remuneration Report on pages 34 to 36:
Salaries
Social security costs
Pension contributions
The average weekly number of staff employed, including Directors, was:
6.
Taxation
The tax charge for the year comprises:
Tax on ordinary activities
Overprovision in prior year
Tax on overseas investment income
Deferred tax
2013
£000
303
42
32
377
11
-
(46)
22
80
56
2012
£000
309
38
43
390
11
48
-
17
-
65
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The differences are
explained below:
Profit on ordinary activities before taxation
Taxation at 24.5% (2012 – 25.5%)
Effects of:
Non taxable items – fair values and franked income
Loss (utilised)/carried forward
Permanent differences
Tax charge for the year
5,160
1,264
(1,226)
18
-
56
940
240
260
(434)
(1)
65
Dividends received from U.K. companies are recognised in the income statement net of their associated tax credit.
7.
Total Comprehensive Income attributable to members of the holding company
Dealt with in the accounts of: The holding company
The subsidiary undertakings
612
4,509
5,121
259
610
869
20
_______________________________________________________
Notes to the Accounts (continued)
For the year ended 30th June 2013
8.
Earnings per share
Earnings per share are based on the profit on ordinary activities after taxation and
non-controlling interests of £5,121,000 (2012 - £869,000) and on 31,207,479 (2012 -
31,207,479) shares being the weighted average of number of shares in issue during the
year.
Headline earnings are required to be disclosed by the JSE
Headline earnings per share are based on the on ordinary activities after taxation and
non-controlling interests, before unrealised changes in the fair value of investments, of
£171,000 (2012 - £2,003,000) and on 31,207,479 (2012 - 31,207,479) shares being
the weighted average of number of shares in issue during the year.
2013
2012
16.4p
2.8p
0.4p
6.4p
9.
Tangible assets
At Valuation - 1st July 2012
At cost – 1st July 2012
Additions
30th June 2013
Depreciation
Balance - 1st July 2012
Charges for the year
30th June 2013
Net book amount 30th June 2013
Net book amount 30th June 2012
Office
Equipment
£000
51
-
51
47
1
48
3
4
The office equipment is held by a subsidiary company.
10.
Investment in group companies
Operating subsidiaries, incorporated and operating in England and consolidated in these financial statements.
Held by the Company - at cost
City Group P.L.C.
Lonfin Investments Limited
- Loan to subsidiary, less provision
Percentage
of equity
51.4
100
2013
£000
89
6,058
6,147
2012
£000
89
-
5,898
5,987
Principal activities
Management services
Investment holding
The loan to the subsidiary is net of a provision of £1,681,000, because the Board considers the recoverability of the
loan was been impaired by permanent loss in its value of one of the underlying value of one of the investments held
by the subsidiary.
21
London Finance & Investment Group P.L.C. __________________
11.
Investments
(a) held as non-current assets
(i) Listed associated undertaking (Western Selection P.L.C.)
Shares at cost – brought forward
Fair value adjustment – unrealised losses
Market value at 30th June
(ii) Other listed investments (Finsbury Food Group Plc)
At cost, 1st July 2012, less provision
Addition during year
Provided during year
Fair value adjustment – unrealised profit/(losses)
Market value at 30th June
(b) Held as current assets
(i) Listed investments (General Portfolio)
At cost less provision
Fair value adjustment – unrealised gains
Market value at 30th June
2013
£000
Group
2012
£000
6,159
(2,229)
3,930
1,963
390
(70)
3,567
5,850
6,159
(3,015)
3,144
3,574
-
(1,611)
(13)
1,950
Company and Group
3,315
2,286
5,601
2,689
1,844
4,533
Associated undertaking
(c)
Western Selection P.L.C., the associated undertaking, is a strategic investment company traded on PLUS Stock
Exchange and incorporated and operating in Great Britain with a financial year end of 30th June 2013.
At 30th June 2013 it had 17,949,872, ordinary shares of 40p each in issue, of which 43.8% are owned by the
Company’s wholly owned subsidiary, Lonfin Investments Limited.
Extracts from Western’s results are:-to be updated
(Loss)/Profit after tax
Non current asset investments
Current assets
Liabilities due within one year
Net asset value per share
Middle market price per share on 30th June
(182)
12,356
71
805
72p
42.5p
22
______________________________________________________
Notes to the Accounts (continued)
For the year ended 30th June 2013
12. Trade and other receivables
Trade debtors
Other debtors
Prepayments and accrued income
13. Trade and other payables
Bank loans
Group companies
Corporation tax
Other taxes
Other creditors
Trade creditors
Accruals
Group
Company
2013
£000
155
37
62
256
650
-
-
30
4
1
210
895
2012
£000
155
77
40
272
1,950
-
48
10
18
17
124
2,167
2013
£000
6
-
29
35
650
-
-
-
1
-
106
757
2012
£000
6
-
12
18
1,950
42
46
-
1
10
47
2,096
The Company’s loan facilities are secured by a charge over certain of the Company’s listed investments and its
investment property.
14. Deferred taxation
The Company has provided £80,000 in respect of potential taxation on unrealised investment gains. The unrealised
investment gains on the Group’s non-current investments are covered by available losses and indexation relief. No
deferred tax asset is brought into account for the excess of losses as the recovery of these is uncertain.
15. Share Capital and Reserves
Authorised equity share capital
35,000,000 shares of 5p each
Allotted, issued and fully paid shares of 5p each
31,207,479 at 1st July 2012 and 30th June 2013
2013
2012
Company and Group
£000
£000
1,750
1,750
1,560
1,560
The Group & Company’s capital comprises its shareholders’ equity. Our objective is to manage capital in a manner
that enables the continued payment of dividends is being achieved.
23
London Finance & Investment Group P.L.C. __________________
15. Share Capital and Reserves (continued)
The following describes the nature and purpose of each reserve within shareholders’ equity:-
Share capital
Share premium
Description and purpose
Nominal value of issued share capital
Amount subscribed for share capital in excess of nominal value.
Unrealised profits and losses on
investments
Cumulative unrealised gains and losses on investments.
Share of undistributed profits of
subsidiaries
The Company’s share of cumulative undistributed post-acquisition gains and
losses of subsidiaries recognised in the income statement.
Realised profits and losses
Realised profits of the Company less realised losses and unrealised losses other
than on investments.
The balances and movements on each of the above reserves are disclosed in the Consolidated Statement of Total
Comprehensive Income and Changes in Shareholders’ Equity on page 13 and the Company’s Statement of
Comprehensive Income and Changes in Shareholders’ Equity below.
16. Company Statement of Comprehensive Income and Changes in Shareholders’ Equity
Ordinary
share
capital
£000
1,560
Share
premium
account
£000
2,320
Revaluation
reserve
£000
330
Unrealised
profits and
(losses) on
investments
£000
849
Realised
profits
and
(losses)
£000
5,825
Total
£000
10,884
-
(296)
-
-
-
-
-
-
(330)
-
-
-
-
-
-
-
259
330
(37)
-
(203)
(203)
-
-
553
6,211
10,644
553
623
-
-
6,211
10,644
(11)
612
(234)
(234)
(234)
(234)
1,176
5,966
11,022
Year ended 30th June 2012
Balances at 1st July 2012
Total comprehensive income
Transfer on disposal
Dividends paid
Total transactions with shareholders
Balances at 30th June 2012
1,560
2,320
Year ended 30th June 2013
Balances at 1st July 2012
Total comprehensive income
Dividends paid
Total transactions with shareholders
1,560
2,320
-
-
-
-
-
-
Balances at 30th June 2013
1,560
2,320
24
_______________________________________________________
17. Pension Schemes
The Group makes pension contribution to the personal pension schemes of certain employees which are money
purchase schemes and for which it has no responsibility for unfunded liabilities. Amounts paid are declared in Note
5.
18. Reconciliation of consolidated net cash flow to movement in net debt
2012/2013
Cash at bank
Bank loan
2011/2012
Cash at bank
Bank loan
At start
of year
£000
2,217
(1,950)
267
21
(1,816)
(1,795)
Cash
flow
£000
(2,101)
1,300
(801)
2,196
(134)
2,062
At end
of year
£000
116
(650)
(534)
2,217
(1,950)
267
19. Operating leases
The Group has an operating lease commitment in respect of an office property entered into on 12th July 2012 and
terminating on 12th April 2014. Payments of £48,750 were recognised in the year and the minimum amount payable
to termination is £38,200. The Company has guaranteed the obligations under this lease.
20. Financial Instruments
The Directors set out below an explanation of the role that financial instruments have had during the year in creating
or changing the risks the Group faces in its activities. The explanation summarises the objectives and policies for
holding or issuing financial instruments and similar contracts, and the strategies for achieving their objectives that
have been followed during the year. The Company monitors its performance against these objectives on a continuous
basis and through bi-monthly reports of the investments portfolio and cash position.
The categories of financial instruments used by the Company to achieve its objectives as set out in the Directors’
report are:
Financial assets
At fair value through income
Non-current investments (associated companies and strategic investments)
Current asset investments (General portfolio)
Loans and receivables
Trade and other receivables
Cash at bank
Financial liabilities
Trade and other payables
Taxation payable
Bank overdrafts
2013
£000
9,780
5,601
256
116
107
80
650
2012
£000
5,094
4,533
272
2,217
160
48
1,950
25
London Finance & Investment Group P.L.C. __________________
Notes to the Accounts (continued)
For the year ended 30th June 2013
20. Financial Instruments (continued)
Interest Rate Profile
The Group finances its operations through a mixture of retained profits and bank borrowings, in pounds sterling.
Drawings under the facility are at a rate fluctuating with base rate.
The effective rate of interest on borrowings for the year was 0.5% (2012 – 5.6%). The sensitivity of the Group to a
1% change in interest rates would have been £9,000 in the current year. (2012 - £52,000).
The Group’s principal financial assets are its investment portfolios. The investment portfolios consist of equity
investments, for which an interest rate profile is not relevant. Interest is not charged on trade and other receivables
nor incurred on trade and other payables.
Currency Exposures
The table below shows the Group’s currency exposures. Such exposures comprise the monetary assets, at fair values,
that are not traded in Sterling.
Currency
Euro
Swiss franc
US dollar
Danish kroner
Swedish kroner
2013
£000
1,970
1,260
438
-
245
3,913
2012
£000
1,714
961
-
147
169
2,991
The sensitivity to a 1% change in the sterling exchange rate would be to increase or decrease the fair values as set out
by £39,000 in aggregate (2012 - £30,000)
Liquidity Risk – The Group’s policy is that its borrowings should be flexible and available over the medium term.
The bank borrowings were by way of a loan facility of £2 million ending on 30th April 2013. This has been replaced
by a loan facility of £1.5 million expiring in 2017. The Group holds investments, most of which are listed on
recognised stock exchanges. In normal markets these are, by their nature, liquid. However, there are long periods
when the market may not be prepared to deal at realistic prices in unusually large blocks of certain shares and this
particularly applies to our three Strategic Investment holdings. The company maintains a General Portfolio of
investment holdings within normal market size and which have aggregate market values in excess of the borrowings
at any point in time. The policy is these have an aggregate market value of at least 150% of borrowings at any point
in time.
Market Risk
The Company is exposed to market risk through the equity investments in other companies. The Company maintains
a spread of investments over various sectors and monitors performance continuously as described above. The
majority of the investments are in companies with good levels of liquidity. The future values of these investments will
fluctuate because of changes in interest rates and other market factors.
Reviews for indications of permanent impairment are carried out at least annually. The Directors believe that the
exposure to market price risk from these activities is acceptable in the Company’s circumstances.
The sensitivity to each 1% decrease in the value of investments would result in the fair values of non current asset
investments decreasing by £98,000 (2012 - £51,000) and a corresponding increase in the unrealised profits reserve.
A 1% increase, would, on the same basis, increase fair values and decrease the unrealised profits reserve. The same
percentage increase/decrease in the current asset investments would increase/decrease carrying values by £56,000
(2012 - £45,000) and unrealised profits reserve (or earnings where a decline was below cost) by an equal amount.
26
______________________________________________________
20. Financial Instruments (continued)
Fair Value
Investments within the general and strategic portfolios are carried at fair values determined by the prices available
from the markets on which the instruments involved are traded. Unlisted investments are stated at cost net of
impairment provisions because fair value cannot be readily determined. Movements in fair value net of impairment
provisions, are taken through the income statement.
The fair value of short term deposits, overdrafts and trade and other receivables and payables approximates to the
carrying amount because of the short maturity of these instruments.
Credit risk
No concentration of credit risk exists in the Company’s principal financial assets, and credit risk is minimised as the
counter-parties are institutions with high credit ratings. There has been no impairment of trade and other debtors
during the year, there are no provisions against these assets and none are past their due date.
21.
International Financial Reporting Standards
As indicated in note 1, at the date of authorisation of these financial statements the IASB and the International
Financial Reporting Interpretations Committee (IFRIC) have issued interpretations and amended or revised standards,
to be applied to financial statements with periods commencing either on or after 1 January 2013.
None of the new standards, interpretations and amendments, effective for the first time from 1 January 2013, have
had a material effect on the financial statements. None of the other new standards, interpretations and amendments,
which are effective for periods beginning after 1 January 2013 and which have not been adopted early, are expected
to have a material effect on the company's future financial statements.
27
_______________________________________________________
Corporate Governance
Corporate Governance is the process by which companies are controlled and directed. The UK Listing Authority
requires UK premium listed companies to comply with principles of the UK Corporate Governance Code (the Code),
the detailed provisions of which constitutes best practice in Corporate Governance. Directors are required to report
to shareholders on how the Company applies the principles and confirm that the Company complies with the Code’s
provisions or explain why it does not.
The JSE requires that companies report on their compliance with Code of Corporate Practices and Conduct contained
in the King Report on Corporate Governance. The Board has reviewed the matter and recorded that in so far as those
matters contained in the King report are of concern to the company, in complying with the Combined Code, it is
satisfied that the Group complies with the requirements of the King Report.
Composition of the Board
The Board comprises the Chairman, David Marshall, Senior Independent Non-executive director, John Maxwell,
Michael Robotham, Frank Lucas and Lloyd Marshall. John Maxwell and Frank Lucas are considered to be
independent. Brief biographies of all Directors are set out on page 2 of the accounts.
Responsibility for the process of appointment of Directors rests with the Board acting on the recommendations of the
Nomination Committee. The removal of Directors is a Board decision. The Board reviews the need for succession
planning on a regular basis.
The Company’s Articles of Association require that all new Directors seek election to the Board at the next Annual
General Meeting after their appointment. In addition, all Directors are required to stand down after three year terms
and submit themselves for re-election.
As a long term investment company it is appropriate for Directors to serve on the board for more than a single term,
subject to continuing satisfactory performance. Given the small size of the board, this results in infrequent changes to
the composition of the Board.
Workings of the Board
The Board are collectively responsible to shareholders for the success of the Group. Entrepreneurial leadership is
provided by capitalising on the skills and experience of the investment committee allied to the strategic vision and
expertise of other Board members.
The Board operates through three committees, the Investment Committee comprising David Marshall, Lloyd
Marshall and Michael Robotham, the Nomination Committee comprising Michael Robotham and Frank Lucas, and
the Audit Committee comprising Frank Lucas and John Maxwell. All decisions not specifically delegated to a
Committee are reserved for the Board. There is no Remuneration Committee as there are no executive Directors.
The remuneration of Directors other than the Chairman is limited by the Company’s Articles of Association at a
maximum of £10,000 each, unless approved at some other sum by the Company in General Meeting. The current
rates of remuneration are set out in detail in the Remuneration Report. The remuneration of the executive director
and employees of the Company’s subsidiary, City Group P.L.C., is determined by the board of City Group, which
includes David Marshall, Lloyd Marshall and Michael Robotham.
Committee meetings are held independently of Board meetings and invitations to attend are extended by the
committee chairman to other Directors, the group’s advisers and management as appropriate.
As an investment company, there is no Chief Executive. The Chairman is responsible for the effective performance
of the Board through control of the Board’s agenda and running of its meetings. The Chairman organises
opportunities for Directors to spend time with each other on an informal basis to improve communication and
relations between Directors.
A representative of the Company Secretaries attends all Board meetings to record proceedings and is available at any
time to advise on any corporate governance issues that arise. The Company Secretary is also responsible to the
Chairman for the efficient organisation of Board and Committee meetings including circulation of papers in advance
of meetings. Management reports including cash movements, portfolio movements and valuations are regularly
circulated to all Directors for review.
28
London Finance & Investment Group P.L.C. __________________
Corporate Governance (continued)
The Board met on six occasions during the year following a formal agenda. It met one further time by telephone for
ad-hoc reasons (sale of investment property). Attendance at board meetings during the year is shown in the following
table:
No. of meetings in year
Board (scheduled)
6
Audit Committee
1
D.C. Marshall
F.W.A. Lucas
L.H. Marshall
J.H. Maxwell
J.M. Robotham
6
6
6
5
6
-
1
-
-
1
The Nomination Committee did not meet during the year as there was no requirement for it to meet.
The Group’s strategic aim is to generate growth in shareholder value in real terms over the long term through a mix of
investments and utilising a prudent level of bank borrowing. The investment mix and level of gearing are reviewed at
each Board meeting. All major investment decisions are taken by the Board. The Investment Committee has
delegated authority within certain limits for the management of the General Portfolio between Board meetings.
The Board, through review of the management reports, scrutinises the performance of the company against the
objective of real growth in shareholder value over the long term.
The Directors are required to bring to the Board’s attention any interest that they may have on matters under
discussion, and may then be excluded from some or all deliberation on those matters, as is deemed appropriate in the
circumstances.
New Directors receive an induction programme and all Directors are encouraged to maintain personal continuing
professional education programmes
The Board evaluates its own performance and that of its committees and individual Directors.
Audit Committee
The board, through its audit committee, annually reviews all material internal controls, including financial,
operational and compliance controls, and risk management systems. As a result of this review, procedures are
adopted which mitigate those risks which have not been specifically accepted under the Group’s investment policy.
The responsibility on a day to day basis for maintaining a sound system of internal controls rests with the Directors of
City Group P.L.C. which provides day to day administration and accounting services to the Group.
There is a well-established system of internal controls set within a framework of clearly defined structures and
accountabilities with well understood policies and procedures; supported by training, budgeting, reporting and review
procedures. Board decisions are implemented on a day to day basis by the subsidiary company, City Group P.L.C.
The framework for internal financial control established in that company has been reviewed by the Board and is
regarded as effective. The reporting and review procedures provide routine assurance to the Board as to the
adequacy and effectiveness of internal controls. The Board recognise that it is not possible to divide some functions
as would be the case in larger organisations and accepts that close supervision is necessary. The Directors have
considered the need for an internal audit function and do not believe that one is appropriate because monitoring
processes are applied to give reasonable assurance to the Board that the systems of internal control are functioning as
intended.
An annual self-assessment of risk is performed which identifies the areas in which the Group is most exposed to risk,
considers the financial implications and assesses the adequacy and effectiveness of their control. The Board has
discussed the results of this review and the Directors can therefore confirm that they have reviewed the effectiveness
of the company’s system of internal control.
The Board maintains an appropriate relationship with the Group’s auditors through the Audit Committee. The
auditors do not provide any non-audit services other than payroll processing and limited advice on taxation matters.
29
_______________________________________________________
Nomination Committee
The Board has formed a Nomination Committee which has been charged with nominating suitable candidates for the
Board to consider recommending to the shareholders for appointment as Directors of the Company. Changes to the
composition of the Board are not anticipated to occur on a frequent basis. Whenever a change is anticipated, a job
description for the role will be agreed by the Nomination Committee, taking into account the expertise available to
the Group from the other members of the Board and the need to acquire any specific capabilities. The Nomination
Committee will then undertake whatever process is most appropriate for the identification of suitable candidates and
their assessment, taking into account any other commitments candidates might have. Appointments will be made on
merit against objective criteria.
Going Concern
The Directors, after making enquiries, have a reasonable expectation that the Company has adequate resources to
continue in operational existence for the foreseeable future. They therefore continue to adopt the going concern basis
in preparing the accounts.
Shareholder Communications
The Board strives to present a balanced and understandable assessment of the Company’s position and prospects in
all interim and other price-sensitive public reports and in reports to regulators as well as in the information required
to be presented by statutory requirements. The Chairman welcomes comments on the quality of reports and any areas
for improvement.
Shareholder communication centres primarily on the publication of annual and interim accounts and occasional press
releases and trading updates. The Chairman is available for discussions with shareholders throughout the year and
particularly at the time of results announcements. Mr J. H. Maxwell, the senior independent non-executive director is
also always available should a shareholder wish to draw any matters to his attention.
The Annual General Meeting provides a forum for discussion by Shareholders with the Board. Shareholders are
encouraged to attend the AGM and to participate in proceedings by asking questions during the formal part of the
meeting, voting on the resolutions put to the meeting and providing Board members with their views in informal
discussions after the meeting.
Statement of Directors' Responsibilities in Respect of the Accounts
The Directors are responsible for preparing the Directors’ report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the
Directors have elected to prepare the financial statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union. 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 company
and of the profit or loss of the company for that period.
In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare financial statements in accordance with IFRSs as adopted by the European Union , subject to any
material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and
enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
30
London Finance & Investment Group P.L.C. __________________
Corporate Governance (continued)
Each of the Directors whose names and functions are listed on page 2 confirms that to the best of each person’s
knowledge and belief:
the financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of
the assets, liabilities, financial position and profit of the Group and Company; and
the Directors’ Report contained in the Annual Report includes a fair review of the development and
performance of the business and the position of the Group and the Company, together with a description of the
principle risks and uncertainties that they face.
31
_______________________________________________________
Remuneration Report
This report has been prepared in accordance with the Directors' Remuneration Report Regulations and also meets the
relevant requirements of the Listing Rules of the Financial Services Authority. A resolution to approve the report will
be proposed at the Annual General Meeting of the Company at which the financial statements will be approved.
All members of the Board in attendance at the Annual General Meeting will be available to answer shareholders’
questions about Directors’ remuneration.
Unaudited Information
Remuneration Committee
The Company has no Remuneration Committee because, given the size of the Group, it is not considered appropriate
to form a separate remuneration committee of the Board. The remuneration payable to the executive director and
employees of the Company's subsidiary, City Group P.L.C., is considered by the board of City Group, which includes
Mr. D.C. Marshall, Mr L. H. Marshall and Mr. J.M. Robotham.
Remuneration Policy
The Company's remuneration policy is as set out in Articles of Association and applies to both executive and non-
executive Directors. The remuneration of the Chairman is £10,000 p.a. and the remuneration of the non-executive
directors is £7,500 p.a.
Approved Share Option Scheme
This scheme was created to incentivise full time employees and Directors of the Company’s subsidiary City Group.
Performance conditions are attached to options granted which include targets for growth in shareholder value. The
115,384 options granted under this scheme in 2007 have lapsed.
Unapproved Employee Benefit Scheme
This scheme was set up to incentivise full time employees and Directors of the Company’s subsidiary City Group.
Awards will be dependent upon performance and no awards have yet been made under this scheme.
Performance Graph to follow
Lonfin Total Shareholder Return v FTSE Eurofirst 300 Index
June 2007 June 2008 June 2009 June 2010 June 2012 June 2013
32
London Finance & Investment Group P.L.C. __________________
Remuneration Report (continued)
The above graph shows London Finance & Investment Group P.L.C.'s Total Shareholder Return (TSR) performance
compared to the TSR of the FTSE Eurofirst 300 index over the past five years. The Company’s main activity is that
of an investment company and the Board believes that because the portfolio concentrates on FTSE 100 companies, or
European equivalents, that this index is best suited as the comparator index. The Company is not a part of the FTSE
Eurofirst 300 Index, being a member of the FTSE Fledgling index which is not deemed an appropriate comparator as
it contains many small companies of varying nature.
TSR is defined as the percentage change over the period in market price assuming the reinvestment of income and
funding of liabilities of the theoretical holding. TSR has been calculated on a one-month averaging basis in order to
reduce the volatility associated with spot prices.
Audited Information
Service Contracts
None of the Directors has a service contract with the Company.
Directors’ Remuneration
The Directors’ remuneration is by way of Directors fees only and during the year comprised:
Non-executive Chairman
Mr D.C. Marshall
Non-executive Directors
Mr. J.H. Maxwell
Dr. F.W.A. Lucas
Mr. L.H. Marshall (appointed 3rd August 2013)
Mr. J.M. Robotham
2013
Total £
2012
Total £
10,000
*
10,000
7,500
7,500
7,500
15,000
47,500
†
♦
♣
7,500
7,500
6,000
15,000
46,000
*
♦
†
♣
Mr. D.C. Marshall ceded his fees to a company which supplies his services and in which none of the Directors are
beneficially interested. The Chairman received no other payment or benefits from the Company.
Mr. L.H. Marshall ceded his fees of £7,500 to his primary employer.
Dr Lucas ceded his fees of £7,500 (2012 - £7,500) to his primary employer.
Of this sum, £7,500 (2012 - £7,500) relates to Mr. Robotham's fees paid by the Company and the balance is in respect of
fees received from the subsidiary, City Group P.L.C.
Each Director is required to retire by rotation every three years in accordance with the Articles of Association and re-
appointment is not automatic.
The Company does not make bonus payments to any director.
Share Options
Except as noted below, none of the Directors have any options over shares of the Company.
Mr L. H. Marshall was granted Approved Share Options while an employee of City Group but these options have
lapsed.
Long Term Incentives
The Company will consider these in the light of changing legislation, but has no plans to adopt long-term incentives,
other than the Approved Share Option Scheme and Unapproved Employee Benefit Scheme.
Pensions
There are no Company contributions payable to the executive or non-executive Directors in respect of pensions.
18th October 2013
33
On behalf of the Board
DAVID MARSHALL
Chairman
London Finance & Investment Group P.L.C. __________________
Report of the Independent Auditors
To the members of London Finance & Investment Group P.L.C.
We have audited the group and parent company financial statements of London Finance & Investment Group P.L.C. for the
year ended 30th June 2013 which comprise the Consolidated and Parent Company Statements of Financial Position, the
Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity and the Consolidated
Statements of Cash Flow and related notes. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company's members, as a body, in accordance with Sections 495, 496 and 497 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's 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 shareholders as a body, for our
audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities Statement on page 32, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices
Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.
This includes an assessment of: whether the accounting policies are appropriate to the group’s and the parent company’s
circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting
estimates made by the Directors; and the overall presentation of the financial statements.
Opinion on financial statements
In our opinion the financial statements:
give a true and fair view of the state of the group’s and of the parent company’s affairs as at 30th June 2013 and of the
group’s and the parent company’s profit for the year then ended;
the financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as
regards the group financial statements, Article 4 of the IAS Regulation.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Companies Act 2006; and
the information given in the Directors’ Report for the financial year for which the financial statements are prepared is
consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required 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 and the part of the Directors’ Remuneration Report to be audited 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.
34
_______________________________________________________
Under the Listing Rules we are required to review:
the Directors’ statement, set out on page 32, in relation to going concern;
the part of the Corporate Governance Statement relating to the company’s compliance with the nine provisions of the
June 2009 Combined Code specified for our review; and
certain elements of the report to shareholders by the Board on Directors’ remuneration.
Haydn Wood (Senior Statutory Auditor)
For and on behalf of Steele Robertson Goddard
Chartered Accountants and Statutory Auditors
London, United Kingdom
[ ] 2013
35
London Finance & Investment Group P.L.C. __________________
Summary of Results
For the five years ended 30 June 2013
Consolidated Statement of financial position
Issued share capital
Share premium and other reserves
Company’s retained realised profits
Shareholders' funds (all equity)
Non-controlling interests
Disposition of Capital
Long Leasehold Property
Other Non-current Assets (Strategic Investments)
Current assets
Listed investments (General portfolio)
Other current assets
Cash and deposits
2013
£000
2012
£000
2011
£000
2010
£000
2009
£000
1,560
7,216
5,966
14,742
81
14,823
-
9,783
9,783
5,601
256
116
5,973
1,560
2,084
6,211
9,855
98
9,953
1,560
3,530
5,825
10,915
92
11,007
-
5,098
5,098
4,533
272
2,217
7,022
2,093
5,933
8,026
4,668
260
21
4,949
1,560
890
6,004
8,454
84
8,538
1,575
4,667
6,242
4,225
294
17
4,536
1,560
45
6,239
7,844
90
7,934
1,575
4,797
6,372
3,976
309
114
4,399
Liabilities and deferred tax
(933)
14,823
(2,167)
9,953
(1,968)
11,007
(2,240)
8,538
(2,837)
7,934
Net assets per share
Dividend per share
47.2p
31.6p
35.0p
27.1p
25.1p
[ ]
0.7p
0.6p
0.6p
Nil
36
_________________________________________________
Notice of Annual General Meeting
NOTICE is hereby given that the ANNUAL GENERAL MEETING of London Finance & Investment Group
P.L.C. (the “Company”) will be held at the offices of City Group P.L.C., 30 City Road, London, EC1Y 2AG on
Wednesday 28th November 2013 at 10.00 a.m. for the following purposes:-
1.
2.
3.
4.
5.
To receive the Directors' Report and Accounts for the year ended 30th June 2013.
To receive and adopt the Remuneration Report for the year ended 30th June 2013.
To declare a dividend.
To re-elect Mr. D.C. Marshall a director.
To re-appoint the auditors Steele Robertson Goddard and to authorise the Directors to fix their
remuneration.
Special Business
To consider and, if thought fit, pass the following Resolution which will be proposed as an Ordinary
Resolution:-
6.
That the Directors be and are hereby generally and unconditionally authorised to exercise all the powers
of the Company to allot relevant securities (within the meaning of Section 551 of the Companies Act
2006 (“the Act”)) up to a maximum nominal amount of £189,626 (being 3,792,521 shares) to such
persons at such times and on such terms as they think proper during the period expiring at the end of the
next annual general meeting of the Company to be held after the date of the passing of this resolution or,
if earlier, fifteen months from the date of the passing of this resolution; and that the Company be and is
hereby authorised to make prior to the expiry of such period referred above any offer or agreement which
would or might require relevant securities to be allotted after the expiry of the said period and that the
Directors may allot relevant securities in pursuance of any such offer or agreement notwithstanding the
expiry of the authority given by this resolution.
To consider and, if thought fit, pass the following Resolution which will be proposed as a Special Resolution:
7.
That
(a)
in accordance with Section 570 of the Companies Act 2006 the Directors be and are hereby given
power to allot shares pursuant to the authority conferred by the Ordinary Resolution numbered 7
passed at the Annual General Meeting held on 28th November 2013, as and when the same becomes
effective as if Section 563 of the Companies Act 2006 did not apply to any such allotment,
provided that:
(i)
the power hereby conferred shall be limited;
(aa)
to the allotment of shares in the Company in connection with or pursuant to an offer
by way of rights, bonus issues or other similar issues to the holders of Shares of 5p
each in the capital of the Company and other persons entitled to participate therein in
proportion (as nearly as may be) to such holders' holdings of such shares (or, as
appropriate, to the numbers of such shares which such other persons are for those
purposes deemed to hold) subject only to such exclusions or other arrangements as the
Directors may feel necessary or expedient to deal with (i) fractional entitlements or
legal or practical problems under the laws or the requirements of any recognised
regulatory body in any territory (ii) underwriting of such an issue and (iii) applications
by shareholders for equity instruments offered to other shareholders as part of such an
issue, but not taken up by other shareholders; and
37
_________________________________________________
(bb)
to the allotment (otherwise than pursuant to sub-paragraph (i) (aa) of this proviso) of
shares in the Company up to an aggregate nominal amount of £78,000 (1,560,000
shares) representing 5 per cent. of the issued share capital;
(ii)
the power hereby granted shall expire on the earlier of the conclusion of the next Annual
General Meeting of the Company or the date falling 15 months after the date of the passing
of this resolution;
(b)
the said power shall allow and enable the Directors to make an offer or agreement before the expiry
of that power which would or might require shares in the Company to be allotted after such expiry
and the Directors may allot shares in the Company in pursuance of such offer or agreement as if the
said power had not expired
(c) words and expressions defined in or for the purposes of Part 17 of the Companies Act 2006 shall
bear the same meaning herein"
30 City Road,
London EC1Y 2AG.
[ ] 2013
By Order of the Board,
CITY GROUP P.L.C.
Secretaries
Notes A member entitled to attend and vote at the meeting may appoint one or more proxies to attend and, on a poll, to vote
on his behalf.
A proxy need not be a member of the company.
A form of proxy is enclosed. To be valid it should be completed and returned so as to reach the Secretaries, City
Group P.L.C. at 30 City Road, London, EC1Y 2AG, U.K., for those shareholders on the U.K. branch of the register,
or Computershare Investor Services (Pty) Limited, for those shareholders of the South African branch of the register,
not less than 48 hours before the time for the meeting. Completion of a form of proxy does not preclude a member
from subsequently attending and voting in person.
The register of Directors’ shareholdings will be available for inspection by members at the registered office of the
company during usual business hours on any weekday (public holidays excepted), from the date of this notice until
the date of the annual general meeting and at the place of the meeting, from 9.15 a.m. until the conclusion thereof.
Change of Members are requested to advise the United Kingdom Registrars, Capita Registrars, or the South African
Address
Registrars, Computershare Investor Services (Pty.) Limited of any change of address.
38
London Finance & Investment Group P.L.C. __________________
Form of Proxy
I / We, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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being (a) member(s) of the above-named company hereby appoint the chairman of the meeting, failing whom
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as my / our proxy to vote for me / us on my / our behalf at the Annual General Meeting of the Company to be held on
[ ] 2013 and at any adjournment thereof.
1/We hereby authorise and instruct my/our proxy to vote as indicated below on the resolutions to be proposed at such
meeting. Unless otherwise directed the proxy will vote or abstain from voting as he thinks fit.
For
Against
Abstain
RESOLUTIONS
To adopt the reports and accounts.
To adopt the Remuneration Report
To declare a dividend.
To re-elect Mr. D.Ca director.
To appoint the auditors and to authorise the Directors to fix their remuneration
SPECIAL BUSINESS
Ordinary Resolution
To authorise the Directors to allot securities.
Special Resolution
To authorise the Directors to allot securities (subject to limitation) as if pre-
emption rights did not apply.
Dated . . . . . . . . . . . . . . . . . . . . . . . . . . 2013
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes
(i)
(ii)
(iii)
This proxy must be lodged at the offices of the Secretaries, City Group P.L.C., 30 City Road, London, EC1Y 2AG, U.K., or the
South African registrars, Computershare Investor Services (Pty.) Limited, 70 Diagonal Street, Johannesburg 2001, (P.O. Box
61051, Marshalltown 2107) South Africa not later than 48 hours before the time of the meeting, together if appropriate with the
power of attorney or other authority under which it is signed or a notarially certified copy of such power or authority.
In the case of a corporation this proxy should be given under its Common Seal or, if none, should be signed by the attorney or
officer duly authorised.
In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the
exclusion of the votes of the other joint holders. For this purpose seniority is determined by the order in which the names stand in
the Register of Shareholders in respect of joint holdings.
(iv)
If it is desired to appoint as proxy any person other than the chairman of the meeting, the name and address of such person should
be inserted in the relevant place, reference to the chairman deleted, and the alteration initialled.
(v)
A proxy need not be a shareholder.
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