London Finance & Investment Group Plc
Annual Report 2015

Plain-text annual report

238304 London Finance Cover 21/10/2015 14:07 Page iv LONDON FINANCE & INVESTMENT GROUP P.L.C. ANNUAL REPORT & ACCOUNTS 30 T H J U N E 2015 Perivan Financial Print 238304 238304 London Finance Cover 21/10/2015 14:07 Page ii LONDON FINANCE & INVESTMENT GROUP P.L.C. (“Lonfin” or the “Company”) Lonfin is a United Kingdom investment finance and management company. Its core portfolio centres on quality companies in the FTSE Eurofirst 300 and S&P 500 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”). Western’s share capital is admitted to trading on the ICAP Securities & Derivatives Exchange (ISDX). Lonfin’s shares are quoted in the official lists of the London and Johannesburg stock exchanges. The current price of the Company's shares can be found on the website of the London Stock Exchange (www.londonstockexchange.com) and in the business section of some of the major South African newspapers. CITY GROUP P.L.C. (“City Group”) City Group, which is owned by Lonfin and Western, provides management, office and company secretarial services to both companies and to other clients requiring a London presence, including companies in which Lonfin and Western have an investment. 238304 London Finance pp01-pp09 21/10/2015 14:20 Page 1 Contents Page Directors and Advisers 2 Summary of Investments and Financial Calendar 3 Strategic Report 4 Composition of General Portfolio 10 Investment Policy 11 Consolidated Statement of Total Comprehensive Income 12 Consolidated Statement of Changes in Shareholders’ Equity 13 Consolidated Statement of Financial Position 14 Company Statement of Financial Position 15 Consolidated Statement of Cash Flow 16 Notes to the Accounts 17 Directors’ Report 29 Corporate Governance 32 Statement of Directors’ Responsibilities in Respect of the Accounts 35 Directors’ Remuneration Report 36 Report of the Independent Auditors 40 Summary of Results 43 Notice of Annual General Meeting 44 Proxy Form Enclosed 1 238304 London Finance pp01-pp09 21/10/2015 14:20 Page 2 London Finance & Investment Group P.L.C. Directors D.C. MARSHALL, Non-Executive Chairman ◆ David 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, an associate of Lonfin, and is chief executive of Marshall Monteagle PLC and chairman of Halogen Holdings P.L.C. He is a non-executive director of Northbridge Industrial Services plc and Industrial & Commercial Holdings PLC and until November 2014, David was a non-executive director of Creston plc. F.W.A. LUCAS, BSc, PhD, Independent Non-Executive *† Frank 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 ICAP Securities & Derivatives Exchange. L.H. MARSHALL, Non-Executive ◆ Lloyd Marshall joined the Board in 2011. 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 * John Maxwell, who is a Chartered Accountant, was appointed a director of the Company in 2003. He currently serves as a non-executive director of The Royal Automobile Club Motor Sports Association Limited. J.M. ROBOTHAM, OBE, FCA, Non-Executive †◆ Michael 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 United Kingdom Company Secretary City Group P.L.C. and Registered Office 6 Middle Street London, EC1A 7JA Tel: +44 (0)20 7796 9060 www.city-group.com E-mail: lonfin@city-group.com 201151 Capita Asset Services 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 Registered Number Registrars 2 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 Computershare Investor Services (Pty.) Limited 70 Marshall Street Johannesburg, 2001 (P.O. Box 61051, Marshalltown 2107) Tel: +27 11 370 5000 JSE Limited Sponsor Sasfin Capital (a division of Sasfin Bank Limited) 29 Scott Street, Waverley 2090 Johannesburg, South Africa Tel: +27 (11) 809 7500 238304 London Finance pp01-pp09 21/10/2015 14:20 Page 3 Summary of Investments At 30th June 2015 2014 £000 £000 Strategic Investment at market value: Western 3,694 4,166 Finsbury Food Group plc 8,000 4,860 –––––––––––––– –––––––––––––– 11,694 9,026 General Equity Portfolio at market value 5,801 5,927 Tangible non-current assets 31 39 Cash, bank balances and deposits 115 39 Bank loans (1,500) (925) Other net (liabilities)/assets (2) 20 Deferred taxation (442) (111) Non-controlling interests (75) (65) –––––––––––––– –––––––––––––– Net assets, including investments at market value 15,622 13,950 –––––––––––––– –––––––––––––– Net assets per share 50.1p 44.7p Dividends Interim 0.5p 0.45p Proposed final 0.5p 0.45p Profit per share (excluding unrealised changes in the market value of investments): 0.8p 0.7p Financial Calendar Annual General Meeting Final dividend for 2015 Half-year results 2 December 2015 Payable on 11 December 2015 to holders on the register on 20th November 2015 Announced in February 2016 3 238304 London Finance pp01-pp09 21/10/2015 14:20 Page 4 London Finance & Investment Group P.L.C. Incorporated in England and Wales – number 201151 Strategic Report Strategy and Business Model Results Lonfin is an investment company whose objective is to generate growth in shareholder value in real terms over the medium to long term whilst maintaining a progressive dividend policy. The Company invests in other companies as set out in the Investment Policy on page 11. In the short term, the performance of the Company can be influenced by overall stock market performance and to ameliorate this short term risk, the Company has a combination of Strategic Investments together with 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 a broad range of investments in major U.S.A., U.K. and other European companies which provides a diversified exposure to international equity markets. • Net assets have increased over the year by 12.1% from 44.7p per share to 50.1p per share, and our Strategic Investments, adjusting for additions, have increased in value over the year by 23%, due to the increase in value of our investment in Finsbury Food Group plc. • Strategic Investments are yielding 2.7% • The General Portfolio, adjusting for changes, has increased over the year by 1.4% • The General Portfolio is yielding 2.9% (2014 – 2.8%) • Net borrowings of £1,385,000 compared with £886,000 at 30th June 2014 • Operating costs were broadly in line with 2014 The Group achieved a profit for the year, before tax and the fair value adjustments of investments, of £286,000 (2014 – £209,000). The profit, after positive fair value adjustments, tax and non-controlling interest was £1,968,000 (2014 – £43,000 loss after negative fair value adjustments of £339,000) giving a profit per share of 6.3p (2014 loss per share – 0.1p). Strategic Investments Western Selection P.L.C. (“Western”) The Group owns 7,860,515 shares, being 43.8%, of the issued share capital of Western. On 30th September 2015, Western announced a profit before associates and tax of £2,787,000 for its year to 30th June 2015 (2014 – £449,000). Including associates and after exceptional items and tax, profits per share were 15.5p (2014 – profits – 4.5p). Western has paid an interim dividend of 1.05p and proposes an increased final dividend of 1.05p making 2.1p for the year (2014 – 2.0p). Western’s net assets at market value as at 30th June 2015 were £13,487,000 equivalent to 75p per share, a decrease of 26% from 102p last year. Our share of the net assets of Western, including the value of Western’s investments at market value, was £5.9million (2014 – £8 million). The fair value recorded in the statement of financial position is the market value of £3.7million (2014 – £4.2 million). This represents 24% (2014 – 30%) of the net assets of the Group. Western’s objective is to generate growth in value for shareholders over the medium to long term and pay a progressive dividend. 4 238304 London Finance pp01-pp09 21/10/2015 14:20 Page 5 Western’s business model is to take sizeable minority stakes in relatively small companies at a pre-IPO or IPO stage, and have directors in common through which they can provide advice and support for these growing companies. Their aim is that these core holdings will then be sold over time into the market. Companies that are targeted as core holdings will have an experienced management team, a credible business model and also good prospects for growth. Mr. D. C. Marshall is the Chairman of Western and Mr. Robotham and Mr. Beale are non-executive directors. Western’s main core holdings are Northbridge Industrial Services plc, Swallowfield plc, Bilby Plc and Hartim Limited. An extract from Western’s announcement relating to its main core holdings is set out below: Northbridge Industrial Services plc (“Northbridge”) 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 tools. Further information about Northbridge is available on their website: www.northbridgegroup.co.uk. Northbridge will announce its unaudited interim profits after tax for the six months ended 30th June 2015 on 30th September 2015. Western acquired a further 25,000 Northbridge shares on 2 June 2015 for £52,000 bringing its holding to 1,900,000 shares. Western’s holding is 10.2% of Northbridge’s issued share capital. The value of this investment at 30th June 2015 was £3,895,000 (2014 – £9,750,000) being 29% (2014 – 53%) of Western’s net assets. Mr D. C. Marshall is a non-executive director of Northbridge. Swallowfield plc (“Swallowfield”) 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 annual results to 30th June 2015 on 22nd September 2015 and recorded a profit after tax of £746,000 compared to a profit of £157,000 for the comparable period last year. No dividends were received from Swallowfield during the year (2014 – nil). Profits are expected to recover further in the current year and dividends are expected to be resumed shortly. At the reporting date, Western owned 1,869,149 shares which is 16.5% of Swallowfield’s issued share capital. The market value of this investment on 30th June 2015 had increased by 11% to £2,019,000 from the value at June 2014 of £1,813,000. This is 15% (2014 – 10%) of Western’s net assets. Mr E. J. Beale is a non-executive director of Swallowfield. 5 238304 London Finance pp01-pp09 21/10/2015 14:20 Page 6 London Finance & Investment Group P.L.C. Strategic Report (continued) Bilby Plc (“Bilby”) In July 2015 we invested £1,500,000 in acquiring 1,875,000 shares in Bilby which is 5.5% of their issued share capital. Bilby is an established, and award winning, provider of gas installation, maintenance and general building services to local authority and housing associations across London and South East England. They have a strategy of growing organically and by acquisition. Further information about Bilby is available on their website: www.bilbyplc.com. Bilby announced its results for the 14 month period to 31st March 2015 on 23rd June 2015 showing a profit after tax of £1,552,000. It has announced a dividend of 2.32p per share payable in August which will provide us with income of £43,500. Hartim Limited (“Hartim”) 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. Western holds 49.5% of Hartim, which has a 31st December year end, and which generated trading profits before exceptional items in the year to 30th June 2015 of £68,000. Turnover in the period was £18,022,000 (2014 – £20,448,000). Western’s share of a loss after tax, including a charge for disallowed tax losses, for the twelve months to 30th June 2015 was £5,000 (2014 – profit of £382,000, after exceptional profit on former Australian subsidiary of £337,000) and the book value of the investment at 30th June 2015 was £1,223,000 (2014 – £1,228,000) being 9% (2014 – 7%) of Western’s assets. Western has two nominees on the board of Hartim: Mr E. J. Beale and Mr L. H. Marshall (a director of City Group P.L.C., Western’s company secretary). Finsbury Food Group plc (“Finsbury”) Finsbury is one of the largest producers and suppliers of premium cakes, bread and morning goods in the UK and currently supplies most of the UK’s major supermarket chains. Further information about Finsbury is available on its website: www.finsburyfoods.co.uk. During the year Lonfin acquired 1 million additional shares in Finsbury for a cost of £593,000. Lonfin now holds 10 million shares, representing 7.8% of Finsbury’s share capital. The market value of the holding was £8,000,000 as at 30th June 2015 (cost – £2,875,000) and represents 51% (2014 – 35%) of Lonfin’s net assets. On 21st September 2015, Finsbury announced audited profits on continuing operations after tax and minority interests of £8.9 million for the year ended 28th June 2015 (2014 – £5 million). Finsbury paid an interim dividend of 0.83p and has recommended to its shareholders a final dividend of 1.67p per share, making 2.50p for the year (2014 – 1.00p). Mr. Beale is a non-executive director of Finsbury. 6 238304 London Finance pp01-pp09 21/10/2015 14:20 Page 7 General Portfolio The investments comprising the General Portfolio at 30th June 2015 are listed on page 10. The portfolio is diverse with material interests in Food and Beverages, 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. At year end the number of holdings in the General Portfolio was 26. We have decreased the amount invested in the General Portfolio over the year by £100,000 (2014 – increased by £272,000). Operations and Employees All of our operations and those of our associate, Western, except investment selection, are outsourced to our subsidiary, City Group. City Group also provides office accommodation, company secretarial and head office finance services to a number of other U.K. and Jersey companies. City Group has responsibility for the initial identification and appraisal of potential new strategic investments for the Company and the day to day monitoring of existing strategic investments and employs 8 people. All 5 directors of the Company, and the 4 directors of its subsidiaries are unchanged from last year and are male. The Group has set a target of 25% female members of the Company’s Board and female candidates will be considered on their merits when vacancies arise. Excluding directors, 4 of the 6 other employees of the Group at 30th June 2015 were female (30th June 2014 – 3 of 6). Dividend The Board recommend a final dividend of 0.5p per share, making a total of 1p per share for the year (2014 – 0.9p). Subject to shareholders’ approval at the Company’s Annual General Meeting on 2nd December 2015, the dividend will be paid on 11th December 2015 to those shareholders on the register at the close of business on 20th November 2015. Shareholders on the South African register will receive their dividend in South African rand converted from sterling at the closing rate of exchange on 29th September 2015 being GBP1= ZAR 21.1213. The number of shares in issue as at the declaration date is 31,207,479 and the Company’s UK Income Tax reference number is 948/L32120. Dividend dates: Last date to trade (SA) Shares trade ex dividend (SA) Shares trade ex dividend (UK) Record date (UK and SA) Pay date Friday 13th November 2015 Monday 16th November 2015 Thursday 19th November 2015 Friday 20th November 2015 Friday 11th December 2015 The JSE Listings Requirements require disclosure of additional information in relation to any dividend payments. Shareholders registered on the Johannesburg register are advised that the dividend withholding tax will be withheld from the gross final dividend amount of 10.56065 SA cents per share at a rate of 15% unless a shareholder qualifies for an exemption; shareholders registered on the Johannesburg register who do not qualify for an exemption will therefore receive a net dividend of 8.97655 SA cents per share. The dividend is payable in cash as a ‘Dividend’ (as defined in the South African Income Tax Act, 58 of 1962, as amended) by way of a reduction of income reserves. The dividend withholding tax and the information contained in this paragraph is only of direct application to shareholders registered on the Johannesburg register, who should direct any questions about the application of the new dividend withholding tax to Computershare Investor Services (Pty) Limited, Tel: +27 11 373-0004. 7 238304 London Finance pp01-pp09 21/10/2015 14:20 Page 8 London Finance & Investment Group P.L.C. Strategic Report (continued) Share certificates may not be dematerialised or rematerialised between Monday 16th November 2015 and Friday 20th November 2015, both days inclusive. Shares may not be transferred between the registers in London and South Africa during this period either. Outlook We believe our mix of Strategic Investments and a General Portfolio gives us every chance of outperforming the broader market in the medium to long term notwithstanding any short term volatility in markets, currencies and commodities. Future Developments The future development of the Company is dependent on the success of the Company’s investment strategy in the light of economic and equity market developments and the continued support of its shareholders. Business Environment, Financial Instruments & Principal Risks and Uncertainties The financial instruments of the Group, in addition to its investments, comprise cash and borrowings to finance those investments. As an investment company our principal risks and uncertainties 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. Dividend income 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 and the willingness of the Board to pay 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. 8 238304 London Finance pp01-pp09 21/10/2015 14:20 Page 9 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 Company is exposed to investment risk arising from the selection of investments which it mitigates by drawing on the investment experience of its directors. The Board does not consider that there is any further information relating to environmental matters, employees, social, community and human rights issues that it is necessary to report for an understanding of the development, performance or position of the Company’s business. 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. As an investment company we have no relevant non-financial KPIs. Comments on the movement of these indicators over the year are detailed above. 2015 2014 2013 2012 Net assets per share 50.1p 44.7p 45.7p 31.6p Change in net assets per share over 5 years 85% 192% 18% -52% Dividends (net) per share 1.0p 0.9p 0.8p 0.7p Definition of KPIs used above Net Assets per share – Net assets including investments at market value at their period end valuation divided by the number of shares in issue at the year end Dividends per share – Dividends declared for the year. 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 2015 the Group had bank facilities of £1.5 million which expire in 2017. At 30th June 2015 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 of Association 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 in the Directors’ Report. Similar resolutions were approved at the last AGM. 29th September 2015 By Order of the Board CITY GROUP P.L.C. Company Secretary 9 238304 London Finance pp10-pp20 21/10/2015 14:22 Page 10 London Finance & Investment Group P.L.C. Composition of General Portfolio At 30th June 2015 £000 % Investor 327 5.6 Nestlé 314 5.4 Henkel 302 5.2 Schindler Holdings 300 5.2 British American Tobacco 297 5.1 Heineken 280 4.8 Diageo 275 4.7 Imperial Tobacco 273 4.7 Reckitt Benckiser 269 4.6 Pernod-Ricard 254 4.4 Unilever 240 4.1 L’Oreal 239 4.1 Philip Morris International 226 3.9 Anheuser Busch Inbev 208 3.6 Novartis 207 3.6 BASF 194 3.4 Exxon 190 3.4 3M 181 3.1 ABB 176 3.0 United Technologies 168 2.9 Chevron 166 2.9 Danone 164 2.8 Procter & Gamble 164 2.8 Linde 144 2.5 Givaudan 138 2.4 LVMH 105 1.8 ––––––––––––– ––––––– 5,801 100.0 ––––––––––––– ––––––– Analysis by currency £000 % Euro 1,890 32.6 Sterling 1,354 23.3 Swiss franc 1,134 19.6 US dollar 1,096 18.9 Swedish kroner 327 5.6 ––––––––––––– ––––––– 5,801 100.0 ––––––––––––– ––––––– 10 238304 London Finance pp10-pp20 21/10/2015 14:22 Page 11 Investment Policy The Company ’s investment policy is to invest in a range of “strategic” investments, a “general portfolio” consisting of 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 world’s largest quoted companies. The intention is for between 30% and 70%. of the overall investment portfolio with a maximum limit of 80% 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% and 20%. 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% of the total value of investments. The notes on pages 17 to 28 form part of these accounts. 11 238304 London Finance pp10-pp20 21/10/2015 14:22 Page 12 London Finance & Investment Group P.L.C. Consolidated Statement of Total Comprehensive Income For the year ended 30th June 2015 2014 Notes £000 £000 Dividends – Listed investments 487 393 Rental and other income 82 82 Profits realised on sales of investments 175 205 Management services fees 233 205 ––––––––––––– ––––––– Operating income 977 885 Administration expenses 3 (643) (651) ––––––––––––– ––––––– Operating profit 2 334 234 Unrealised changes in the carrying value of investments 11 2,049 (339) Interest payable (48) (25) ––––––––––––– ––––––– Profit/(Loss) on ordinary activities before taxation 2,335 (130) Tax on result of ordinary activities 6 (357) 71 ––––––––––––– ––––––– Profit/(Loss) on ordinary activities after taxation 1,978 (59) Non-controlling interest (10) 16 ––––––––––––– ––––––– Profit/(Loss) for the financial year attributable to members of the holding company 7 1,968 (43) Other comprehensive income – – ––––––––––––– ––––––– Total comprehensive income attributable to shareholders 1,968 (43) ––––––––––––– ––––––– Reconciliation of headline earnings Basic (loss)/profit per share 8 6.3p (0.1)p Adjustment for the unrealised changes in the carrying value of investments, net of tax (5.5)p 0.8p ––––––––––––– ––––––– Headline profit per share 8 0.8p 0.7p ––––––––––––– ––––––– All profits and losses are on continuing activities. The notes on pages 17 to 28 form part of these accounts. 12 238304 London Finance pp10-pp20 21/10/2015 14:22 Page 13 Consolidated Statement of Changes in Shareholders’ Equity Unrealised Share of Retained Ordinary Share profits/ undistributed realised Non- share premium (losses) on results of profits & Controlling Total capital account investments subsidiaries losses Total interests equity £000 £000 £000 £000 £000 £000 £000 £000 Year ended 30th June 2014 Balances at 1st July 2013 1,560 2,320 4,831 (499) 6,046 14,258 81 14,339 ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Total comprehensive income – – (246) 205 (2) (43) (16) (59) ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Dividends paid – – – – (265) (265) – (265) ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Total transactions with shareholders – – – – (265) (265) – (265) ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Balances at 30th June 2014 1,560 2,320 4,585 (294) 5,779 13,950 65 14,015 ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Year ended 30th June 2015 Balances at 1st July 2014 1,560 2,320 4,585 (294) 5,779 13,950 65 14,015 ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Total comprehensive income – – 1,719 320 (71) 1,968 10 1,978 ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Dividends paid – – – – (296) (296) – (296) ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Total transactions with shareholders – – – – (296) (296) – (296) ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– Balances at 30th June 2015 1,560 2,320 6,304 26 5,412 15,622 75 15,697 ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– The notes on pages 17 to 28 form part of these accounts. 13 238304 London Finance pp10-pp20 21/10/2015 14:22 Page 14 London Finance & Investment Group P.L.C. Consolidated Statement of Financial Position At 30th June 2015 2014 Notes £000 £000 Non-current Assets Tangible assets 9 31 39 Investments 11(a) 11,694 9,026 ––––––––––– ––––––––––– 11,725 9,065 ––––––––––– ––––––––––– Current Assets Listed investments 11(b) 5,801 5,927 Trade and other receivables 12 218 245 Cash at bank 115 39 ––––––––––– ––––––––––– 6,134 6,211 ––––––––––– ––––––––––– Current Liabilities Trade and other payables: falling due within one year 13 (1,720) (1,150) ––––––––––– ––––––––––– Net Current Assets 4,414 5,061 Deferred taxation 14 (442) (111) ––––––––––– ––––––––––– Total Assets less Current Liabilities 15,697 14,015 ––––––––––– ––––––––––– Capital and Reserves Called up share capital 15 1,560 1,560 Share premium account 2,320 2,320 Unrealised profits and losses on investments 6,304 4,585 Share of retained realised profits and losses of subsidiaries 26 (294) Company’s retained realised profits and losses 5,412 5,779 ––––––––––– ––––––––––– 15,622 13,950 Non-controlling equity interests 75 65 ––––––––––– ––––––––––– 15,697 14,015 ––––––––––– ––––––––––– Approved and authorised by the Board on 29th September 2015. D.C. Marshall Director The notes on pages 17 to 28 form part of these accounts. 14 238304 London Finance pp10-pp20 21/10/2015 14:22 Page 15 Company Statement of Financial Position At 30th June 2015 2014 Notes £000 £000 Non-current Assets Investments in Group companies 10 6,203 5,923 ––––––––––– ––––––––––– 6,203 5,923 ––––––––––– ––––––––––– Current Assets Listed investments 11(b) 5,801 5,927 Trade and other receivables 12 19 25 Bank balance 71 12 ––––––––––– ––––––––––– 5,891 5,964 Current Liabilities Trade and other payables: falling due within one year 13 (1,597) (997) ––––––––––– ––––––––––– Net Current Assets 4,294 4,967 Deferred taxation 14 (442) (111) ––––––––––– ––––––––––– Total Assets less Current Liabilities 10,055 10,779 ––––––––––– ––––––––––– Capital and Reserves Called up share capital 15/16 1,560 1,560 Share premium account 16 2,320 2,320 Unrealised profits and losses on investments 16 763 1,120 Realised profits and losses 16 5,412 5,779 ––––––––––– ––––––––––– Equity shareholders’ funds 10,055 10,779 ––––––––––– ––––––––––– Approved and authorised by the Board on 29th September 2015. D.C. Marshall Director Registered in England and Wales – Number 201151 The notes on pages 17 to 28 form part of these accounts. 15 238304 London Finance pp10-pp20 21/10/2015 14:22 Page 16 London Finance & Investment Group P.L.C. Consolidated Statement of Cash Flow For the year ended 30th June 2015 2014 Notes £000 £000 Cash flows from operating activities Profit/(Loss) before tax 2,335 (130) Adjustments for non-cash and non-operating activities – Finance expense 48 25 Depreciation charges 8 3 Unrealised changes in the fair value of investments (2,049) 339 ––––––––––– ––––––––––– 342 237 ––––––––––– ––––––––––– Taxes paid 6 (26) (22) ––––––––––– ––––––––––– Changes in working capital Decrease/(increase) in trade and other receivables 27 11 (Decrease)/increase in trade and other payables (5) 23 Decrease/(increase) in current asset investments 100 (272) ––––––––––– ––––––––––– 122 (238) ––––––––––– ––––––––––– Addition to non-current tangible assets – (39) ––––––––––– ––––––––––– Cash flows from tangible non-current assets – (39) ––––––––––– ––––––––––– Cash flows from investment activity Purchase of strategic investments 11 (593) – ––––––––––– ––––––––––– Net cash outflow from investment activity (593) – ––––––––––– ––––––––––– Cash flows from financing Interest paid (48) (25) Equity dividends paid (296) (265) Net drawdown/(repayment) of loan facilities 18 575 275 ––––––––––– ––––––––––– Net cash inflow/(outflow) from financing 231 (15) ––––––––––– ––––––––––– Decrease in cash and cash equivalents 18 76 (77) Cash and cash equivalents at the beginning of the year 39 116 ––––––––––– ––––––––––– Cash and cash equivalents at end of the year 115 39 ––––––––––– ––––––––––– 16 238304 London Finance pp10-pp20 21/10/2015 14:22 Page 17 Notes to the Accounts For the year ended 30th June 2015 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 2015. 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 2015. 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) 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. (iv) 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) 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. b) 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. c) 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. 17 238304 London Finance pp10-pp20 21/10/2015 14:22 Page 18 London Finance & Investment Group P.L.C. Notes to the Accounts (continued) For the year ended 30th June 2015 1. Accounting Policies (continued) (v) 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. (vi) 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 Investment Management Operations Services 2015 2014 2015 2014 £000 £000 £000 £000 Dividends – Listed investments 487 393 – – Rental and other income – – 82 82 Profits on sales of investments, including provisions 175 205 – – Management services fees – – 233 205 –––––––––– –––––––––– –––––––––– –––––––––– Operating income 662 598 315 287 Administration expenses – normal (345) (329) (298) (322) –––––––––– –––––––––– –––––––––– –––––––––– Operating profit/(loss) 317 269 17 (35) –––––––––– –––––––––– –––––––––– –––––––––– All revenues are derived from operations within the United Kingdom. Consequently no separate geographical segment information is provided. 3. Administration Expenses Group 2015 2014 £000 £000 Normal administration expenses include: Depreciation 8 3 Auditor’s remuneration – audit services 30 22 – non-audit services 4 4 Directors’ emoluments – Note 4 75 61 Staff costs – Note 5 292 338 –––––––––– –––––––––– 18 238304 London Finance pp10-pp20 21/10/2015 14:22 Page 19 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 36 to 39. Related Party Disclosures Lonfin and its wholly owned subsidiary, owns 43.8% of its associate Western of which Mr. D.C. Marshall, Mr. J. M. Robotham and Mr. E.J Beale, the Chief Executive of our subsidiary company City Group, are directors. Mr. D.C. Marshall and Mr. J. M. 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 and Northbridge Industrial Services Plc. Mr. D.C. Marshall is a director of Northbridge Industrial Services plc and Mr. E. J. Beale is a director of Finsbury Food Group plc. Mr. D. C. Marshall and Mr. L. H. Marshall are directors and Mr. E.J. Beale is the non-executive Chairman of Marshall Monteagle PLC, and Mr D. C. Marshall, and Mr J. M. Robotham are shareholders in Marshall Monteagle PLC 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. E. J. Beale are directors of Halogen Holdings P.L.C.. Lonfin and Western own City Group in the ratio 51.4% and 48.6% respectively. City Group P.L.C. provides offices and company 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 company secretarial, accounting, and directors’ fees received by City Group from those companies, their associates and subsidiaries, total £204,000 (2014 – £212,000) for the year under review. At the statement of financial position date the aggregate balance due in respect of fees invoiced was £194,000 (2014 – £219,000) and no fees have been paid in advance (2014 – £23,000 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. 5. Staff Costs Staff costs, excluding those relating to the directors shown in the Remuneration Report on pages 36 to 39:– 2015 2014 £000 £000 Salaries 218 261 Social security costs 41 42 Defined contribution pension scheme contributions 33 35 –––––––––– –––––––––– 292 338 –––––––––– –––––––––– The average weekly number of staff employed, excluding Group directors, was: 6 6 –––––––––– –––––––––– 19 238304 London Finance pp10-pp20 21/10/2015 14:22 Page 20 London Finance & Investment Group P.L.C. Notes to the Accounts (continued) For the year ended 30th June 2015 6. Taxation 2015 2014 £000 £000 The tax charge for the year comprises: Tax on ordinary activities – – Overprovision in prior year – – Tax on overseas investment income 26 22 Deferred tax 331 (93) –––––––––– –––––––––– Tax charged/(credited) 357 (71) –––––––––– –––––––––– The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The differences are explained below: Profit/(Loss) on ordinary activities before taxation 2,335 (130) –––––––––– –––––––––– Taxation at 20.75% (2014 – 22.5%) 484 (29) Effects of: Non taxable items – fair values and franked income (147) (49) Loss carried forward 20 7 –––––––––– –––––––––– Tax charged/(credited) for the year 357 (71) –––––––––– –––––––––– 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 2015 2014 £000 £000 Dealt with in the accounts of: The holding company (428) 146 The subsidiary undertakings 2,396 (189) –––––––––– –––––––––– 1,968 (43) –––––––––– –––––––––– 8. Earnings per share 2015 2014 Earnings/(Loss) per share are based on the profit on ordinary activities after taxation and non-controlling interests of £1,968,000 (2014 – loss £43,000) and on 31,207,479 (2014 – 31,207,479) shares being the weighted average of number of shares in issue during the year. 6.3p (0.1)p –––––––––– –––––––––– Headline earnings are required to be disclosed by the JSE. Headline earnings per share are based on the ordinary activities after taxation and non-controlling interests, before unrealised changes in the fair value of investments net of tax, of £250,000 (2014 – £210,000) and on 31,207,479 (2014 – 31,207,479) shares being the weighted average of number of shares in issue during the year. 0.8p 0.7p –––––––––– –––––––––– 20 238304 London Finance pp21-pp28 21/10/2015 14:23 Page 21 9. Tangible assets Office Equipment £000 At cost – 1st July 2014 53 Additions – Disposals – –––––––––– 30th June 2015 53 –––––––––– Depreciation Balance – 1st July 2014 14 Charges for the year 8 Disposals – –––––––––– 30th June 2015 22 –––––––––– Net book amount 30th June 2015 31 –––––––––– Net book amount 30th June 2014 39 –––––––––– 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. Percentage 2015 2014 of equity £000 £000 Principal activities Held by the Company – at cost City Group 51.4 89 89 Management services Lonfin Investments Limited 100 Investment holding – Loan to subsidiary, less provision 6,114 5,834 –––––––––– –––––––––– 6,203 5,923 –––––––––– –––––––––– The loan to the subsidiary is net of a provision of £1,681,000, because the Board considers the recoverability of the loan was impaired by permanent loss in value of one of the investments held by the subsidiary. 21 238304 London Finance pp21-pp28 21/10/2015 14:23 Page 22 London Finance & Investment Group P.L.C. Notes to the Accounts (continued) For the year ended 30th June 2015 11. Investments (a) held as non-current assets Group 2015 2014 £000 £000 (i) Listed associated undertaking (Western Selection P.L.C.) Shares at cost – brought forward 6,159 6,159 Fair value adjustment – unrealised losses (2,465) (1,993) –––––––––– –––––––––– Market value at 30th June 3,694 4,166 –––––––––– –––––––––– (ii) Other listed investments (Finsbury Food Group plc) At cost, 1st July 2014, less provision 2,283 2,283 Addition during year 593 – Fair value adjustment – unrealised profit 5,124 2,577 –––––––––– –––––––––– Market value at 30th June 8,000 4,860 –––––––––– –––––––––– Total at 30th June 11,694 9,026 –––––––––– –––––––––– (b) Held as current assets Company and Group 2015 2014 £000 £000 (i) Listed investments (General Portfolio) At cost less provision 3,306 3,407 Fair value adjustment – unrealised gains 2,495 2,520 –––––––––– –––––––––– Market value at 30th June 5,801 5,927 –––––––––– –––––––––– (c) Associated undertaking Western Selection P.L.C., the associated undertaking, is traded on the ISDX Growth Market and incorporated and operating in the United Kingdom with a financial year end of 30th June 2015. At 30th June 2015 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. 2015 2014 £000 £000 Extracts from Western’s results are: Profit/(loss) after tax 2,774 803 Non current assets 9,690 19,104 Current assets 3,913 24 Liabilities due within one year (116) (683) Net asset value per share 75p 102p Middle market price per share on 30th June 49.5p 57.5p 22 238304 London Finance pp21-pp28 21/10/2015 14:23 Page 23 12. Trade and other receivables Group Company 2015 2014 2015 2014 £000 £000 £000 £000 Trade debtors 173 179 – – Other debtors – 18 – – Prepayments and accrued income 45 48 19 25 –––––––––– –––––––––– –––––––––– –––––––––– 218 245 19 25 –––––––––– –––––––––– –––––––––– –––––––––– 13. Trade and other payables Bank loans 1,500 925 1,500 925 Group companies – – 39 – Corporation tax – – – 21 Other taxes 34 28 3 – Other creditors 4 20 1 1 Trade creditors 29 44 13 – Accruals 153 133 41 50 –––––––––– –––––––––– –––––––––– –––––––––– 1,720 1,150 1,597 997 –––––––––– –––––––––– –––––––––– –––––––––– The Company’s loan facilities are secured by a charge over certain of the Company’s listed investments. 14. Deferred taxation The Company has provided £442,000 in respect of potential taxation on unrealised investment gains (2014 – £111,000). 15. Share Capital and Reserves 2015 2014 £000 £000 Company and Group Authorised equity share capital 35,000,000 shares of 5p each 1,750 1,750 –––––––––– –––––––––– Allotted, issued and fully paid shares of 5p each 31,207,479 at 1st July 2014 and 30th June 2015 1,560 1,560 –––––––––– –––––––––– The Group and Company’s capital comprises its shareholders’ equity. Our objective is to manage capital in a manner that enables the continued payment of dividends is to be achieved. 23 238304 London Finance pp21-pp28 21/10/2015 14:23 Page 24 London Finance & Investment Group P.L.C. Notes to the Accounts (continued) For the year ended 30th June 2015 15. Share Capital and Reserves (continued) The following describes the nature and purpose of each reserve within shareholders’ equity:- Share capital Share premium Unrealised profits and losses on investments Share of undistributed profits of subsidiaries Description and purpose Nominal value of issued share capital. Amount subscribed for share capital in excess of nominal value. Cumulative unrealised gains and losses on investments. The Company’s cumulative undistributed post-acquisition gains and losses of subsidiaries recognised in the income statement. share of 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 on page 12 and the Consolidated Statement of 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 Unrealised Realised Ordinary Share profits and profits share premium on inves- and capital account tments (losses) Total £000 £000 £000 £000 £000 Year ended 30th June 2014 Balances at 1st July 2013 1,560 2,320 972 6,046 10,898 –––––––– –––––––– –––––––– –––––––– –––––––– Total comprehensive income – – 148 (2) 146 –––––––– –––––––– –––––––– –––––––– –––––––– Dividends paid (265) (265) –––––––– –––––––– –––––––– –––––––– –––––––– Total transactions with shareholders – – – (265) (265) –––––––– –––––––– –––––––– –––––––– –––––––– Balances at 30th June 2014 1,560 2,320 1,120 5,779 10,779 –––––––– –––––––– –––––––– –––––––– –––––––– Year ended 30th June 2015 Balances at 1st July 2014 1,560 2,320 1,120 5,779 10,779 –––––––– –––––––– –––––––– –––––––– –––––––– Total comprehensive income – – (357) (71) (428) –––––––– –––––––– –––––––– –––––––– –––––––– Dividends paid – – – (296) (296) –––––––– –––––––– –––––––– –––––––– –––––––– Total transactions with shareholders – – – (296) (296) –––––––– –––––––– –––––––– –––––––– –––––––– Balances at 30th June 2015 1,560 2,320 763 5,412 10,055 –––––––– –––––––– –––––––– –––––––– –––––––– 24 238304 London Finance pp21-pp28 21/10/2015 14:23 Page 25 17. Pension Schemes The Group makes pension contributions 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 At start Cash At end of year flow of year £000 £000 £000 2014/2015 Cash at bank 39 76 115 Bank loan (925) (575) (1,500) –––––––––– –––––––––– –––––––––– (886) (499) (1,385) –––––––––– –––––––––– –––––––––– 2013/2014 Cash at bank 116 (77) 39 Bank loan (650) (275) (925) –––––––––– –––––––––– –––––––––– (534) (352) (886) –––––––––– –––––––––– –––––––––– 19. Operating leases The Group has an operating lease commitment in respect of an office property entered into in January 2014 which terminates in January 2019. Payments of £44,200 were recognised in the year and the minimum amount payable to termination is £170,000. The Company has guaranteed the obligations under this lease. 25 238304 London Finance pp21-pp28 21/10/2015 14:23 Page 26 London Finance & Investment Group P.L.C. Notes to the Accounts (continued) For the year ended 30th June 2015 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: 2015 2014 £000 £000 Financial assets At fair value through income Non-current investments (associated companies and strategic investments) 11,694 9,026 Current asset investments (general portfolio) 5,801 5,927 Loans and receivables Trade and other receivables 218 245 Cash at bank 115 39 Financial liabilities Trade and other payables 220 225 Taxation payable 442 111 Bank overdrafts 1,500 925 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 3.5% (2014 – 3.5%). The sensitivity of the Group to a 1% change in interest rates would have been £14,000 in the current year (2014 – £7,000). 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. 2015 2014 £000 £000 Currency Euro 1,890 1,834 Swiss franc 1,134 1,268 US dollar 1,096 829 Swedish kroner 327 299 –––––––––– –––––––––– 4,447 4,230 –––––––––– –––––––––– The sensitivity to a 1% change in the sterling exchange rate would be to increase or decrease the fair values as set out by £44,000 in aggregate (2014 – £42,000). 26 238304 London Finance pp21-pp28 21/10/2015 14:23 Page 27 20. Financial Instruments (continued) Liquidity Risk – The Group’s policy is that its borrowings should be flexible and available over the medium term. The bank borrowings are by way of 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 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 167% 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 General Portfolio 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 £117,000 (2014 – £90,000) 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 £58,000 (2014 – £59,000) and unrealised profits reserve (or earnings where a decline was below cost) by an equal amount. 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. 27 238304 London Finance pp21-pp28 21/10/2015 14:23 Page 28 London Finance & Investment Group P.L.C. Notes to the Accounts (continued) For the year ended 30th June 2015 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 2015. None of the new standards, interpretations and amendments, effective for the first time from 1 January 2014, 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 2014 and which have not been adopted early, are expected to have a material effect on the Company’s future financial statements. 22. Related Undertakings In accordance with section 409 of the Companies Act 2006, a full list of related undertakings, the country of incorporation and the percentage of equity owned, directly or indirectly, as at 30th June 2015, is disclosed below: Company Country % ownership Lonfin Investments Limited United Kingdom 100% City Group P.L.C. United Kingdom 51.4% Western Selection P.L.C. United Kingdom 43.8% 28 238304 London Finance pp29-pp39 21/10/2015 14:23 Page 29 Directors’ Report The directors present their Report for the year ended 30th June 2015. Results, Future Developments, Dividends, & Financial Instruments A review of the Group’s operations and performance during the financial year, setting out the position at the year-end, significant changes in the year, an indication of the outlook for the future, proposed dividends and the Group’s policy in relation to financial instruments is contained in the Strategic report on pages 4 to 9. 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 2014 were as follows: 30th June 2015 30th June 2014 Shares Shares D.C. Marshall * 12,890,693 12,890,693 F.W.A. Lucas † 162,500 162,500 J.M. Robotham * 12,890,693 12,890,693 J.H. Maxwell 65,000 65,000 L. H. Marshall – – * These holdings arise as the individuals concerned are trustees and/or directors of entities that hold shares in the Company. The interest of Mr. Robotham overlaps with the interest of Mr. D.C. Marshall. At 30th June 2015, Mr Robotham had a beneficial interest in 30,000 (2014 – 30,000) of these shares, and Mr Marshall had no beneficial interest in these shares (2014 – nil). † 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 2015 and the date of this report. 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, and accordingly Mr L. H. 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, as at 30th June 2015, the Company had been notified under Disclosure and Transparency Rule 5 of the following significant holdings of voting rights in its shares. Amount owned Percentage of class W.T. Lamb Investments Limited1 4,600,000 14.7 Philip J. Milton & Company PLC1 2,171,539 6.96 1 Direct holding There have been no changes to the above significant holdings between 1 July and the date of this report. 29 238304 London Finance pp29-pp39 21/10/2015 14:23 Page 30 London Finance & Investment Group P.L.C. Directors’ Report (continued) Auditors A resolution to re-appoint SRG LLP as Auditors will be proposed at the Annual General Meeting. Each director has taken all the steps that they ought to have taken as a director including making appropriate enquiries of fellow directors 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. Going Concern The directors have reasonable expectation that the Group has adequate resources to continue to operate for the foreseeable future. For this reason they adopt the going concern basis for preparing the financial statements. Corporate governance The Company’s statement on corporate governance can be found in the corporate governance report on pages 32 to 34. Annual General Meeting The Notice of Annual General Meeting, to be held on 2nd December 2015, can be found on pages 44 to 46 of these accounts and sets out the business to be considered at the meeting. Certain elements of that business are explained below: Resolution 5 – Reappointment of Non-Executive Director Lloyd Marshall will retire by rotation at the Annual General Meeting and offers himself for re- election in accordance with the Company’s Articles of Association. The Board has confirmed, following a performance review, that Lloyd Marshall continues to perform effectively and demonstrate commitment his role. Further information relating to his experience, skills and background can be found on page 2 of this report. Resolution 7 – Allotment of share capital Resolution 7 provides authority to allot shares in accordance with section 551 of the Companies Act 2006 in the period up to the conclusion of the Company’s annual general meeting in 2016. If passed, this resolution would enable the directors to allot shares (and to grant rights to subscribe for or convert any security into shares in the Company) up to a maximum nominal amount of £189,626 (being 3,792,521 ordinary shares) which is the amount of the Company’s authorised but unissued share capital. The directors have no specific plans to allot any ordinary shares in the Company. Resolution 8 – Disapplication of pre-emption rights Resolution 8 will empower the directors to allot ordinary shares for cash, pursuant to the authority granted by Resolution 7, on a non-pre-emptive basis (a) in connection with a rights issue or open offer and (b) (otherwise than in connection with a rights issue or open offer) up to a maximum nominal value of £78,000 (being 1,560,000 ordinary shares) representing approximately 5% of the issued ordinary share capital of the Company as at 29th September 2015 (being the latest practicable date prior to publication of this report) in the period up to the conclusion of the Company’s annual general meeting in 2016. 30 238304 London Finance pp29-pp39 21/10/2015 14:23 Page 31 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. Resolution 9 – Approved Share Option Scheme This scheme was created to incentivise full time employees and directors of the Company’s subsidiary City Group. Awards will be made to directors and employees of City Group to recognise outstanding efforts or achievements, or otherwise to attract, motivate or retain staff. There are no outstanding awards under this scheme. Options may not be granted more than ten years from 29th September 2006, the date that the scheme was adopted by the Company. Shareholders are being asked to approve amendments to the scheme rules at the Company’s Annual General Meeting on 2nd December 2015, to change the name of the scheme to “The London Finance & Investment Group Company Share Option Plan”, update references to legislation where applicable, and delete clause 2.8 which limits the life of the scheme. Recommendation The Board believes that the adoption of Resolutions 1 to 9 will promote the success of the Company and is in the best interests of the Company and its shareholders as a whole. The Board unanimously recommends that you vote in favour of Resolutions 1 to 9 as the directors intend to do in respect of their own beneficial holdings which as at 29th September 2015 (being the latest practicable date prior to publication of this report) amount in aggregate to 175,000 ordinary shares, representing approximately 0.56% of the ordinary shares currently in issue. Relationship Agreement In compliance with changes to the Listing Rules that came into effect in May 2014, the Company has entered into a Relationship Agreement with Mr D.C. Marshall, the Company’s Chairman, in his capacity as a Trustee of a controlling shareholder of the Company as defined by the Listing Rules. The Company has complied with the independence provisions contained in the Relationship Agreement throughout the year ended 30th June 2015 and so far as the Company is aware, the controlling shareholder has complied with those provisions and also the procurement obligation contained in the Relationship Agreement. Directors’ and Officers’ Liability Insurance During the year, the Company has maintained insurance cover for its directors and officers under a Directors’ and Officers’ liability insurance policy. Greenhouse Gas Emissions The Group is required to report on its greenhouse gas emissions. The Group had no Scope 1 emissions. This report is made in respect of Scope 2 emissions. During the year ended 30th June 2015, the Group purchased electricity equating to a carbon dioxide equivalent of 10 tonnes (1 tCO2e/employee) (2014 – 10 tonnes). 31 238304 London Finance pp29-pp39 21/10/2015 14:23 Page 32 London Finance & Investment Group P.L.C. Corporate Governance Corporate Governance is the process by which companies are controlled and directed to achieve the objectives of the organisation. Key to achievement of objectives is having clarity about the objective and the right people in place. Processes and structures are of secondary importance as, without a focus on outcomes and without the right people, it is only by chance that objectives will be met. The UK Listing Authority requires UK premium listed companies to comply with the UK Corporate Governance Code (the Code), which focuses on processes and structures, and which is deemed to constitute best practice in Corporate Governance for most companies. 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 Company has been in full compliance with the Code throughout the year ended 30th June 2015 except for the fact that Requirement B.7.1. recommends that non-executive directors who have served on the Board longer than nine years should be subject to annual re-election. David Marshall, Frank Lucas, John Maxwell and Michael Robotham have all served longer than nine years. However, having considered the matter, the Board have decided that, given the size of the Company and the nature of the business, it is not appropriate for these directors to be subject to re-election annually. They will, however, be subject to retirement by rotation in accordance with the Company’s Articles of Association as described below. In addition to this, the Code recommends that a majority of the members of a company’s nomination committee should be independent non-executive directors with the chairman also being independent. The Nomination Committee comprises of two directors, only one of which is deemed to be independent and the chairman is not independent. However, the Board, having considered the matter, regards the current composition of the committee to be the most appropriate given the size of the Company, and also the Board, and the balance of skills of the directors. 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 Code, it is satisfied that the Group has complied with the requirements of the King Report throughout the year ended 30th June 2015. 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. The Board has reviewed the independence of the non-executive directors and John Maxwell and Frank Lucas are considered by the Board to be independent despite the fact that both have served on the Board for more than nine years. The Code suggests that serving more than nine years could be relevant to the determination of a non-executive director’s independence. The Board concluded that John Maxwell and Frank Lucas both continue to demonstrate the essential characteristics of independence expected by the Board. In reaching this decision, the Board also took into account the fact that Frank Lucas is a director of Loeb Aron & Company Ltd which acts as an ISDX corporate adviser to Western. 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, at every annual general meeting one- third of the Directors are subject to retirement by rotation provided that the number of directors retiring shall not exceed one-third. 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. 32 238304 London Finance pp29-pp39 21/10/2015 14:23 Page 33 Workings of the Board The Board is 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 has three committees, the Investment Committee is chaired by David Marshall and its other members are Lloyd Marshall and Michael Robotham. The Nomination Committee is chaired by Michael Robotham and its other member is Frank Lucas. The Audit Committee is chaired by Frank Lucas and its other member is John Maxwell. Both members of the Audit Committee have recent and relevant financial experience. All matters not specifically delegated to a committee are reserved for the Board. Committee meetings are held independently of Board meetings and invitations to attend are extended by the committee chairman to other directors and the Group’s advisers as appropriate. There is no Remuneration Committee as there are no executive directors. The aggregate remuneration of directors is limited by the Company’s Articles of Association and this aggregate amount can only be changed 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 directors and employees of the Company’s subsidiary, City Group, is determined by the Board of City Group, which includes David Marshall, Lloyd Marshall and Michael Robotham. 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 City Group, the Company Secretary, 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. The Board met on seven occasions during the year and the Audit Committee met on one occasion, both following a formal agenda. The Nomination Committee did not meet during the year as there was no requirement for it to meet. Attendance at Board and Audit Committee meetings during the year is shown in the following table: Board Audit Committee No. of meetings in year 7 1 D.C. Marshall 7 – F.W.A. Lucas 7 1 L.H. Marshall 7 – J.H. Maxwell 6 1 J.M. Robotham 7 – 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. 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 via questionnaires completed annually. 33 238304 London Finance pp29-pp39 21/10/2015 14:23 Page 34 London Finance & Investment Group P.L.C. Corporate Governance (continued) 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 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. 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 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 Company’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 (see note 3, page 18). 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. 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. 34 238304 London Finance pp29-pp39 21/10/2015 14:23 Page 35 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: (cid:129) select suitable accounting policies and then apply them consistently; (cid:129) make judgements and accounting estimates that are reasonable and prudent; (cid:129) 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; (cid:129) 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. 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: (cid:129) 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 (cid:129) 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. (cid:129) Considers that the annual report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s performance, business model and strategy. 29th September 2015 By Order of the Board CITY GROUP P.L.C. Company Secretary 35 238304 London Finance pp29-pp39 21/10/2015 14:23 Page 36 London Finance & Investment Group P.L.C. Directors’ Remuneration Report This report has been prepared in accordance with the Directors’ Remuneration Report Regulations and also meets the relevant requirements of the UK Listing Authority Listing Rules. 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. A separate resolution will be proposed at the Annual General Meeting of the Company to approve the Company’s remuneration policy. All members of the Board in attendance at the Annual General Meeting will be available to answer shareholders’ questions about directors’ remuneration. 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, is considered by the board of City Group, which includes Mr. D.C. Marshall, Mr. L. H. Marshall and Mr. J.M. Robotham. Unaudited Information Directors’ Remuneration Policy The Company’s Remuneration Policy is to pay fixed fees to directors. There is no variable element of pay for directors and directors are not eligible to receive awards under the Group’s Approved Share Option Scheme or Unapproved Employee Benefit Scheme. No benefits are provided for Group Directors. The Company has no remuneration committee and the level of fees is set by the Board subject to the Company’s Articles of Association. Directors’ remuneration was reviewed during the prior year and increased with effect from 1 January 2014 to £12,000 per annum for Non-Executive Directors and £18,000 per annum for the Chairman. Approved Share Option Scheme This scheme was created to incentivise full time employees and directors of the Company’s subsidiary City Group. Awards will be made to directors and employees of City Group to recognise outstanding efforts or achievements, or otherwise to attract, motivate or retain staff. There are no outstanding awards under this scheme. Options may not be granted more than ten years from 29th September 2006, the date that the scheme was adopted by the Company. Subject to shareholder approval at the Company’s Annual General Meeting on 2nd December 2015, the scheme rules will be amended to change the name of the scheme to “The London Finance & Investment Group Company Share Option Plan”, update references to legislation where applicable, and to remove this termination date. Unapproved Employee Benefit Scheme This scheme was created to incentivise full time employees and directors of the Company’s subsidiary City Group. Awards will be made to directors and employees of City Group to recognise outstanding efforts or achievements, or otherwise to attract, motivate or retain staff. There are no outstanding awards under this scheme and it expires on 29th September 2016. Loss of Office No payments will be made to directors for loss of office. Future Policy Table Directors receive a fixed annual fee The maximum fee will be set by the Board from time to time and increases will not be higher than inflation unless this can be justified by the performance of the Company or additional responsibilities taken on. Fees are set to attract, motivate and retain talented individuals. 36 238304 London Finance pp29-pp39 21/10/2015 14:23 Page 37 The Group’s policy for increases in fees to directors is similar to the policy for increases in salary to employees. Remuneration on Recruitment It is anticipated that new non-executive directors will be remunerated on a similar basis as existing Directors and no additional payments will be made. Should a new executive director be recruited, their remuneration package will be designed to attract high quality individuals and will be commensurate with those available in the market at the time of recruitment for persons with similar experience and any equity incentives granted will be subject to shareholder approval. The remuneration package could include fixed and variable bonuses, pension contributions, medical health and death in service insurance, travel and other allowances as well as a salary. Service Contracts None of the directors has a service contract with the Company. Performance Graph Lonfin Total Shareholder Return v FTSE Eurofirst 100 Index 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -10% London Finance & Investment Group FTSEurofir st 100 ETF Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 The above graph shows Lonfin’s Total Shareholder Return (TSR) performance compared to the TSR of the FTSEEurofirst 100 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 100 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. As the Company has no Chief Executive Officer the table below shows the remuneration of the Chairman for the 5 years to 30th June 2015 by way of comparison with the total return to shareholders illustrated in the graph above. 37 238304 London Finance pp29-pp39 21/10/2015 14:23 Page 38 London Finance & Investment Group P.L.C. Directors’ Remuneration Report (continued) The Chairman’s remuneration is fixed and he receives no variable element or equity incentive. Years ending 30th June: 2011 2012 2013 2014 2015 Total remuneration £’000 10 10 10 14 18 The table below compares the total remuneration paid to the group’s directors and employees to the distributions paid to shareholders by way of dividends in the last two years. Dividends Total staff paid remuneration £’000 £’000 2014 265 408 2015 297 372 38 238304 London Finance pp29-pp39 21/10/2015 14:23 Page 39 Audited Information Directors’ Remuneration The directors’ remuneration is by way of directors’ fees only and during the year comprised: 2015 2014 Total Total £ £ Non-Executive Chairman Mr D.C. Marshall 18,000 * 14,000 Non-Executive Directors Mr. J.H. Maxwell 12,000 9,750 Dr. F.W.A. Lucas 12,000 † 9,750 Mr. L.H. Marshall 12,000 ♦ 9,750 Mr. J.M. Robotham 19,500 ♣ 17,250 –––––––––– –––––––––– 73,500 60,500 –––––––––– –––––––––– * Mr. D.C. Marshall ceded his fees to a company which supplies his services and in which none of the directors, including Mr D.C. Marshall] are beneficially interested. The Chairman received no other payment or benefits from the Company. † Dr Lucas ceded his fees of £12,000 (2014 – £9,750) to his primary employer. ♦ Mr. L.H. Marshall ceded his fees of £12,000 (2014 – £9,750) to his primary employer. ♣ Of this sum, £7,500 (2014 – £7,500) relates to Mr. Robotham’s fees paid by the Company’s subsidiary, City Group and the balance is in respect of fees received from the Company. The Company does not make bonus payments to any director. Directors’ interests in the Company’s shares The interests of directors in the shares of the Company are shown in the Directors’ Report on page 29. Share options None of the directors have any options over shares of the Company. 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 which, subject to shareholder approval at the Company’s Annual General Meeting on 2nd December 2015, will be amended as described on page 36 of this report; and the Unapproved Employee Benefit Scheme which expires on 29 September 2016. Pensions There are no Company contributions payable to the executive or non-executive directors in respect of pensions. 29th September 2015 On behalf of the Board DAVID MARSHALL Chairman 39 238304 London Finance pp40-pp43 21/10/2015 14:25 Page 40 London Finance & Investment Group P.L.C. Report of the Independent Auditors To the members of London Finance & Investment Group PLC We have audited the Group and parent company financial statements of London Finance & Investment Group P.L.C. for the year ended 30th June 2015 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 35, 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. In addition, we read all the financial and non-financial information in the strategic report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion the financial statements: (cid:129) give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 30th June 2015 and of the Group’s and the parent company’s profit for the year then ended; (cid:129) the financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and (cid:129) 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. 40 238304 London Finance pp40-pp43 21/10/2015 14:25 Page 41 Our assessment of risks of material misstatement We have identified the following risks of material misstatement that had the greatest effect on the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team: (cid:129) the valuation of the Group’s investments. Our application of materiality We apply the concept of materiality both in planning and performing our audit, and in evaluation the effect of identified misstatements, if any, on the audit and of uncorrected misstatements, if any, on the financial statements and in forming our audit opinion in the Auditors’ Report. When establishing our overall audit strategy, we determined materiality for the Group to be £15,000 which is 2% of total operating income. This provided a basis for determining the nature, timing and extent of risk assessment procedures, identifying and assessing the risk of material misstatement and determining the nature, timing and extent of further audit procedures. On the basis of our risk assessment, together with our assessment of the Group’s overall control environment, our judgement was that overall performance materiality (i.e. our tolerance for misstatement in an individual account or balance) for the Group should be 50% of materiality, namely £7,500. Our objective in adopting this approach was to ensure that total uncorrected and undetected audit differences in the financial statements did not exceed our materiality level. We have agreed to report to the Audit Committee all audit differences in excess of £7,500, as well as differences below that threshold that, in our view, warrant reporting on qualitative grounds. An overview of the scope of our audit Our response to the risk identified above was as follows: (cid:129) we agreed 100% of year end prices for quoted investments to an independent source. Opinion on other matters prescribed by the Companies Act 2006 In our opinion: (cid:129) the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and (cid:129) 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 ISAs (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is: (cid:129) materially inconsistent with the information in the audited financial statements; or (cid:129) apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Group acquired in the course of performing our audit; or (cid:129) is otherwise misleading 41 238304 London Finance pp40-pp43 21/10/2015 14:25 Page 42 London Finance & Investment Group P.L.C. Report of the Independent Auditors (continued) In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during the audit and the directors’ statement that they consider the annual report is fair, balanced and understandable and whether the annual report appropriately discloses those matters that we communicated to the audit committee which we consider should have been disclosed. Under the Companies Act 2006 we are required to report to you if, in our opinion: (cid:129) certain disclosures of directors’ remuneration specified by law are not made; or (cid:129) we have not received all the information and explanations we require for our audit. Under the Listing Rules we are required to review: (cid:129) the directors’ statement, set out on page 30, in relation to going concern; (cid:129) the part of the Corporate Governance Statement relating to the Company’s compliance with the nine provisions of the UK Corporate Governance Code specified for our review; and (cid:129) certain elements of the report to shareholders by the Board on directors’ remuneration. LONDON, UNITED KINGDOM 29th September 2015 John Park (Senior Statutory Auditor) For and on behalf of SRG LLP Chartered Accountants and Statutory Auditors 42 238304 London Finance pp40-pp43 21/10/2015 14:25 Page 43 Summary of Results For the five years ended 30th June 2015 2015 2014 2013 2012 2011 £000 £000 £000 £000 £000 Consolidated Statement of financial position Issued share capital 1,560 1,560 1,560 1,560 1,560 Share premium and other reserves 8,650 6,611 6,652 2,084 3,530 Company’s retained realised profits 5,412 5,779 6,046 6,211 5,825 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– Shareholders’ funds (all equity) 15,622 13,950 14,258 9,855 10,915 Non-controlling interests 75 65 81 98 92 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– 15,697 14,015 14,339 9,953 11,007 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– Disposition of Capital Long Leasehold Property – – – – 2,093 Other Non-current Assets (Strategic Investments) 11,725 9,065 9,423 5,098 5,933 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– 11,725 9,065 9,423 5,098 8,026 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– Current assets Listed investments (General portfolio) 5,801 5,927 5,601 4,533 4,668 Other current assets 218 245 256 272 260 Cash and deposits 115 39 116 2,217 21 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– 6,134 6,211 5,973 7,022 4,949 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– Liabilities and deferred tax (2,162) (1,261) (1,057) (2,167) (1,968) –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– 15,697 14,015 14,339 9,953 11,007 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– Net assets per share 50.1p 44.7p 45.7p 31.6p 35.0p Dividend per share 1.0p 0.9p 0.8p 0.7p 0.6p 43 238304 London Finance pp44-end 21/10/2015 14:25 Page 44 London Finance & Investment Group P.L.C. This document is important and requires your immediate attention. If you are in doubt about its contents or the action you should take, you are recommended to seek your own personal financial advice without delay from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised pursuant to the Financial Services and Markets Act 2000. If you have sold or transferred all your ordinary shares in the Company, please forward this document and the accompanying Form of Proxy at once to the purchaser or transferee or the agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee. 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., 6 Middle Street, London, EC1A 7JA on Tuesday 2 December 2015 at 10.00 a.m. for the following purposes: To consider and, if thought fit, pass the following resolutions, of which Resolutions 1 to 7 and 9 will be proposed as ordinary resolutions and Resolution 8 will be proposed as a special resolution. 1. 2. 3. 4. 5. 6. 7. To receive the financial statements for the year ended 30th June 2015, together with the reports of the directors and auditors thereon. To declare a final dividend for the year ended 30th June 2015 of 0.5 pence for each ordinary share in the capital of the Company. To approve the Directors’ Remuneration Policy in the form set out in the Directors’ Remuneration Report in the Company’s annual report and accounts for the year ended 30th June 2015. To approve the Directors’ Remuneration Report, other than the part containing the Directors’ Remuneration Policy, in the form set out in the Company’s annual report and accounts for the year ended 30th June 2015. To re-elect Mr L. H. Marshall as a director, who retires by rotation and offers himself for re-election. To re-appoint SRG LLP as Auditors of the Company and to authorise the directors to agree their remuneration. THAT the directors be generally and unconditionally authorised, pursuant to and in accordance with section 551 of the Companies Act 2006, to exercise all the powers of the Company to allot shares in the Company and to grant rights to subscribe for, or to convert any security into shares in the Company (‘Rights’) up to an aggregate nominal amount of £189,626 (being 3,792,521 shares), provided that this authority shall expire at the conclusion of the annual general meeting of the Company to be held in 2016, save that the Company shall be entitled to make offers or agreements before the expiry of this authority which would or might require shares to be allotted or Rights to be granted after such expiry and the directors shall be entitled to allot shares and grant Rights pursuant to any such offers or agreements as if this authority had not expired; and all unexercised authorities previously granted to the directors to allot shares and grant Rights be and are hereby revoked. 8. THAT, (a) subject to the passing of Resolution 7 set out above, the directors be empowered, pursuant to section 570 and section 573 of the Companies Act 2006, to allot equity securities, within the meaning of section 560 of that Act, for cash pursuant to the authority conferred by Resolution 7, as if section 561(1) of that Act did not apply to any such allotment, provided that this power shall be limited to: 44 238304 London Finance pp44-end 21/10/2015 14:25 Page 45 (i) the allotment of shares in the Company in connection with or pursuant to an offer by way of rights, bonus issues or 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 (ii) the allotment to any person or persons (otherwise than in connection with a rights issue) of equity securities up to an aggregate nominal amount of £78,000 (being 1,560,000 shares), representing approximately 5% of the issued ordinary share capital of the Company; (b) the power given by this resolution shall expire upon the expiry of the authority conferred by Resolution 7 set out above, save that the directors shall be entitled to make offers or agreements before the expiry of such power which would or might require equity securities to be allotted after such expiry and the directors shall be entitled to allot equity securities pursuant to any such offers or agreements as if the power conferred hereby had not expired; and (c) words and expressions defined in or for the purposes of Part 17 of the Companies Act 2006 shall bear the same meaning herein. 9. THAT, the rules of The London Finance & Investment Group Long Term Incentive Plan 2006 be amended to change the name of the scheme to “The London Finance & Investment Group Company Share Option Plan”, update references to legislation where applicable, and to delete clause 2.8 which limits the life of the scheme. 6 Middle Street CITY GROUP P.L.C. Company Secretary London EC1A 7JA By Order of the Board, 29th September 2015 45 238304 London Finance pp44-end 21/10/2015 14:25 Page 46 London Finance & Investment Group P.L.C. Notes 1. A form of proxy is enclosed. 2. A proxy need not be a member of the Company. 3. To be valid the form of proxy should be completed and returned so as to reach the Company Secretary, City Group P.L.C. at 6 Middle Street, London, EC1A 7JA, U.K., for those shareholders on the U.K. branch of the register, or Computershare Investor Services (Pty.) Limited, P.O. Box 61051, Marshalltown 2107, for those shareholders on the South African branch of the register, not later than 10.00 a.m. on 30th November 2015. Completion of a form of proxy does not preclude a member from subsequently attending and voting in person. 4. A member may appoint more than one proxy in relation to the Meeting, provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that member. The right to appoint a proxy does not apply to any person to whom this Notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a “Nominated Person”). 5. Any member or his/her proxy attending the Meeting has the right to ask any question at the Meeting relating to the business of the Meeting. 6. Only shareholders registered in the register of members of the Company as at 6 p.m. on 30th November 2015 shall be entitled to attend and vote at the Meeting in respect of the number of shares registered in their name at such time. If the Meeting is adjourned, the time by which a person must be entered in the register of members of the Company in order to have the right to attend and vote at the adjourned Meeting is 48 hours before the time of any adjourned Meeting. Changes to the register of members after the relevant times shall be disregarded in determining the rights of any person to attend and vote at the Meeting. 7. In the case of joint holders, the vote of the senior holder who tenders a vote whether in person or by proxy shall be accepted to the exclusion of the votes of the other joint holders and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the relevant joint holding. 8. Copies of directors’ letters of appointment, together with the amended rules of the London Finance & Investment Group Long Term Incentive Plan 2006, are available for inspection at the registered office of the Company, 6 Middle Street, London, EC1A 7JA during usual business hours on any weekday (Saturdays, Sundays and public holidays excluded) from the date of this Notice until the conclusion of the Meeting and will be available for inspection at the place of the Meeting for at least 15 minutes prior to and during the Meeting. 9. As at 29th September 2015 (being the last business day prior to the publication of this Notice) the Company’s issued share capital consists of 31,207,479 ordinary shares, carrying one vote each. The total voting rights in the Company as at 29th September 2015 are 31,207,479. 10. The information required to be published by section 311(A) of the Companies Act 2006 (information about the contents of this Notice and numbers of shares in the Company and voting rights exercisable at the Meeting and details of any members’ statements, members’ resolutions and members’ items of business received after the date of this Notice) may be found at www.city-group.com. 11. Members satisfying the thresholds in section 527 of the 2006 Act can require the Company to publish a statement on its website setting out any matter relating to (a) the audit of the Company’s accounts (including the Auditor’s report and the conduct of the audit) that are to be laid before the AGM; or (b) any circumstances connected with an Auditor of the Company ceasing to hold office since the last AGM, which the members propose to raise at the meeting. The Company cannot require the members requesting the publication to pay its expenses. Any statement placed on the website must also be sent to the Company’s Auditors no later than the time it makes its statement available on the website. The business which may be dealt with at the AGM includes any statement that the Company has been required to publish on its website pursuant to this right. 12. A Nominated Person may, under an agreement between him/her and the shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy entitled to attend and speak and vote at the Meeting. A Nominated Person is advised to contact the shareholder who nominated him/her for further information on this and the procedure for appointing any such proxy. 13. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder as to the exercise of voting rights. Such Nominated Person is advised to contact the shareholders who nominated him/her for further information on this. Change of Address Members are requested to advise the United Kingdom Registrars, Capita Asset Services, or the South African Registrars, Computershare Investor Services (Pty.) Limited of any change of address. 46 238304 London Finance pp44-end 21/10/2015 14:25 Page 47 London Finance & Investment Group P.L.C. Form of Proxy I/We ................................................................................................................................................................................... ............................................................................................................................................................................................. ............................................................................................................................................................................................. being (a) member(s) of the above-named company (the “Company”) hereby appoint the chairman of the meeting, failing whom ............................................................................................................................................................................................. 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 2nd December 2015 at 10 a.m. and at any adjournment thereof. I/We hereby authorise and instruct my/our proxy to vote (or abstain from voting) 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. RESOLUTIONS For Against Withheld 1. 2. 3. 4. 5. 6. 7. 8. 9. To receive the financial statements for the year ended 30th June 2015, together with the reports of the directors and auditors thereon. To declare a final dividend for the year ended 30th June 2015. To approve the Directors’ Remuneration Policy contained in the Directors’ Remuneration Report. To approve the Directors’ Remuneration Report (excluding the Director’s Remuneration Policy). To re-elect Mr L.H. Marshall as a director. To re-appoint SRG LLP as Auditors of the Company and to authorise the directors to agree their remuneration. To authorise the directors to allot shares under Section 551 of the Companies Act 2006. To disapply pre-emption rights (Special Resolution). To amend the rules of The London Finance & Investment Group Long Term Incentive Plan 2006. Dated . . . . . . . . . . . . . . . . . . . . . . . . . . 2015 Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . ✃ Notes 1. A proxy need not be a member of the Company. You may appoint as your proxy persons of your own choice by inserting their names in the space provided. If no name is inserted in the space provided, the Chairman will be deemed appointed as the proxy. If the proxy is being appointed in relation to less than your full voting entitlement, please enter in the space provided next to the proxy’s name the number of shares in relation to which he or she is authorised to act as your proxy. If left blank your proxy will be deemed to be authorised in respect of your full voting entitlement (or if this proxy form has been issued in respect of a designated account for a shareholder, the full voting entitlement for that designated account). 2. To appoint more than one proxy, you may photocopy this form. All forms must be signed and should be returned together in the same envelope. 3. Please indicate with a cross in the appropriate box how you wish your votes to be cast. If you do not make a specific direction, the proxy will vote (or abstain from voting) at his or her discretion. On any other business which properly comes before the Meeting (including any motion to amend any resolution or to adjourn the Meeting) the proxy will vote or abstain at his or her discretion. 4. The ‘withheld’ vote box on the Form of Proxy is provided to enable you to abstain on any particular resolution. However, it should be noted that a ‘withheld’ vote is not a vote in law and will not be counted in the calculation of the proportion of votes ‘for’ and ‘against’ a resolution but will be counted to establish if a quorum is present. 5. To be valid your signed and dated form of proxy, and power of attorney or other authority (if any), must be received at the offices of the Company Secretary, City Group P.L.C., 6, Middle Street, London, EC1A 7JA, U.K., or the South African registrars, Computershare Investor Services (Pty.) Limited, P.O. Box 61051, Marshalltown 2107, South Africa, not later than 10.00am on 30th November 2015. 6. Completion and return of this form of proxy will not prevent a member from attending and voting at the Meeting. 7. In the case of a corporate shareholder, this form of proxy should either be executed by the company under seal or under the hand of two authorised signatories or a director in the presence of a witness (whose name, address and occupation should be stated). 8. In the case of joint holders, the vote of the first-named in the register of members of the Company will be accepted to the exclusion of that of other joint holders. 238304 London Finance Cover 21/10/2015 14:07 Page iv LONDON FINANCE & INVESTMENT GROUP P.L.C. ANNUAL REPORT & ACCOUNTS 30 T H J U N E 2015 Perivan Financial Print 238304 

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