London Finance &
Investment Group PLC
Annual Report and Financial Statements
30th June 2020
LONDON FINANCE &
INVESTMENT GROUP PLC
ANNUAL REPORT & FINANCIAL STATEMENTS
30th JUNE 2020
LONDON FINANCE & INVESTMENT GROUP PLC
(“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 Western Selection PLC (“Western”). Western’s share capital is admitted to
trading on the Aquis Growth Market.
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 PLC
(“City Group”)
City Group, which is owned by Lonfin and Western, provides office accommodation, company
secretarial, finance and head office services to both companies and to other clients requiring a
London presence, including companies in which Lonfin and Western have an investment.
_____________________________________________
Contents
Directors
Corporate Contacts
Summary of Net Assets
Financial Calendar
Strategic Report
Composition of General Portfolio
Statement of Directors’ Responsibilities in Respect of the Financial Statements
Independent auditor’s report to the members of London Finance & Investment Group PLC
Consolidated Statement of Total Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Consolidated Statement of Changes in Shareholders’ Equity
Company Statement of Changes in Shareholders’ Equity
Notes to the Financial Statements
Directors’ Report
Corporate Governance Statement
Audit Committee Report
Directors’ Remuneration Report
Summary of Results
NOTICE OF ANNUAL GENERAL MEETING
Proxy Form
Page
1
2
3
3
4
12
13
14
20
21
22
23
24
25
26
27
43
49
55
59
66
67
Enclosed
London Finance & Investment Group PLC___________
Directors
D.C. MARSHALL, Chairman ♦
David Marshall joined the Board in 1971. He is the chairman of London Finance & Investment
Group PLC. David is also chairman of Western and chief executive of Marshall Monteagle PLC.
He is also a non-executive director of Industrial & Commercial Holdings PLC. He resides in South
Africa, where he has interests in listed trading, financial and property companies.
E.J. BEALE, Non-Executive ♦
Edward Beale is a Chartered Accountant and is the Financial Director of Marshall Monteagle
PLC. He was a member of the Accounting Council of the Financial Reporting Council for 6 years
until August 2013. He is currently a member, and previously was chairman, of the Corporate
Governance Expert Group of the Quoted Companies Alliance. He is a non-executive director of
Western, Brand Architekts Group plc, Heartstone Inns Limited and Industrial & Commercial
Holdings PLC. He joined the Board in April 2016.
J.H. MAXWELL, CA, CCMI, Senior Independent Non-Executive *
John Maxwell, who is a Chartered Accountant, was appointed a Director of the Company in
November 2003. He currently serves as Chief Executive Officer of Vulcan Industries Plc and as a
non-executive director of The Grosvenor Waterside Residents Company Limited. John is
Chairman of the Remuneration and Nomination Committees.
•
F.W.A. LUCAS, BSc, PhD, Independent Non-Executive *
Frank Lucas was appointed a Director in August 1999. He is a mining geologist by profession
and one of the founding shareholders and a Director of Loeb Aron & Company Ltd. Frank is
Chairman of the Audit Committee.
•
W.H. MARSHALL, Non-Executive
Warwick Marshall joined the Board in January 2019. Warwick is a son of David Marshall. After
training as an accountant in London and subsequently completing his National Service in South
Africa, he established the trading division of the Monteagle Group in 1996 initially trading in
retailer branded fast moving consumer goods, and then later diversifying into metals, minerals
and logistics. He has extensive investment experience in his private capacity.
* Member of the Audit Committee
♦ Member of the Investment Committee
Member of the Nomination Committee
• Member of the Remuneration Committee
1
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Corporate Contacts
United Kingdom
Republic of South Africa
Company
Secretary
Registered
Office
City Group PLC
1 Ely Place, London,
EC1N 6RY
Tel: + 44 (0) 20 7796 9060
Company
Registered
Number
201151
11 Sunbury Park
La Lucia Ridge Office Estate
La Lucia 4051
Durban
Tel: +27 (0)31 566 7600
Website
www.city-group.com/london-finance-investment-group-plc
Registrars
Sponsor
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
West Midlands B62 8HD
Tel: +44 (0)121 585 1131
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 member of the Sasfin Group)
29 Scott Street, Waverley 2090
Johannesburg, South Africa
Tel: +27 (11) 809 7500
Independent
Auditor
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
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London Finance & Investment Group PLC___________
Summary of Net Assets
At 30th June
Strategic Investments at fair value:
Western Selection Plc
Finsbury Food Group Plc
General Equity Portfolio at fair value
Tangible non-current assets
Right of use asset
Cash, bank balances and deposits
Other net current liabilities
Lease liabilities
Deferred taxation
Non-Controlling interests
2020
£000
2,751
3,540
6,291
9,948
31
512
269
(59)
(571)
(520)
(103)
2019
Restated for
IFRS 16
£000
3,576
4,020
7,596
11,383
39
568
240
(438)
(632)
(395)
(92)
2019
£000
3,576
4,020
7,596
11,383
39
-
240
(485)
-
(395)
(100)
Net assets, including investments at fair value
15,798
18,269
18,278
Net assets per share
50.6
58.5
59.0
0.55p
0.60p
32.5p
0.55p
0.60p
37.5p
0.55p
0.60p
37.5p
Dividends*
Interim
Proposed Final
Mid-market price on 30th June
*Information on Dividends is set out on page 7
Financial Calendar
Announcement of
Preliminary Results for the
year ended 30th June 2020
18th September 2020
Annual General Meeting
25th November 2020
Final Dividend for 2020
Half year results to
31st December 2020
Payable on 2nd December 2020 to shareholders on the register
of members at 20th November 2020
to be announced in February 2021
Interim Dividend for 2021
to be announced in February 2021
3
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Strategic Report
Strategy, Business Model and Investment Policy
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 Group’s investment policy is to invest in a range of ‘Strategic’, ‘General Portfolio’ and from time to
time ‘Other Investments’. General Portfolio Investments comprise liquid stock market investments, both
in equity instruments and bonds, and, at the Board’s discretion, ‘Other Investments’ are typically
property and other physical assets. Strategic Investments are significant investments in smaller UK
quoted companies. These are balanced by the General Portfolio, which consists of a broad range of
investments in major USA, UK and other European companies which provides a diversified exposure to
international equity markets.
Further information on the Group’s Investment Policy can be found in the Directors’ Report on page 43.
The Group’s net assets per share for 2020 have decreased from the previous year to 50.6p and 17.6%
over the last five years. Shareholders’ dividends for 2020 remains the same at 1.15p and increased by
15% over the last five years. Information on the Group’s performance against the Board’s key
performance indicators (KPIs) is set out on page 9 of this report.
Results
Net assets have reduced to 50.6p per share (2019 restated – 58.5p per share)
Strategic Investments have decreased in value over the year, from £7,596,000 to £6,291,000
Strategic investments are yielding 2.6% (2019 – 3.6%)
The General Portfolio has decreased, adjusting for investment purchases and sales, over the
year, by 13% from £11,383,000 to £9,948,000
Fair value movement is £1,265,000
No significant increase in Group operating costs
A final dividend of 0.60p per share is recommended, making a total of 1.15p per share for the
year (2019 – 1.15p)
The Company and its subsidiaries (“Group”) recorded an operating profit for the year, before interest,
tax and changes to the fair value adjustments of investments of £130,000, compared to an restated
operating profit for the previous year, before tax and changes to the fair value adjustments of
investments, of £366,000. The significant decrease in fair value of strategic investments that occurred
during the year has led to Total Comprehensive Loss for the year of £2,112,000 compared to restated
loss of £1,767,000 for the previous year. Basic and headline losses per share are 2.6p (2019- earnings
of 2.9p).
Strategic Investments
Strategic Investments have reduced in value by £1,305,000 due to the market movements in the
share prices.
Western Selection PLC (“Western”)
The Group holds 7,860,515 ordinary shares, being 43.8%, of the issued share capital of Western.
On 18th September 2020, Western announced unaudited preliminary results showing a loss after tax of
£180,000 for the year to 30th June 2020 (2019 loss – £2,611,000). Losses per share are 1.0p (2019 -
14.5p).
Western’s Board has not recommend payment of an interim or a final dividend for the year, compared to
the payment of an interim dividend of 1.1p for 2019.
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London Finance & Investment Group PLC___________
Strategic Report (continued)
Western’s net assets at market value at 30th June 2020 were £8,127,000 equivalent to 45p per share, a
decrease of 29.7% from 64p last year.
Our share of the net assets of Western, including the value of Western’s investments at market value,
was £3,560,000 (2019 - £5,005,000). The fair value for Western recorded in the Statement of Financial
Position is the market value of £2,751,000 (2019 - £3,576,000). This represents 17.3% (2019 – 19.3%)
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. Western’s business model is to take sizeable minority stakes in relatively
small companies usually before or as their shares are admitted to trading on one of the UK’s stock
exchanges and have directors in common through which they can provide advice and support for these
growing companies. These may or may not become associated companies. The aim is that these
companies (“Core Holdings”) will grow to a stage at which Western’s support is no longer required and
its stake can be sold over time into the relevant stock market. Companies that are targeted as Core
Holdings will have an experienced management team, a credible business model and good prospects
for growth.
Western is a strategic investment which is technically a subsidiary of the Company that has not been
consolidated due to the application of the investment entity exemption under IFRS 10.
David Marshall is the Chairman of Western and Edward Beale is non-executive director.
Western’s main Core Holdings are Northbridge Industrial Services plc, Brand Architekts Group plc and
Bilby Plc.
An extract from Western’s announcement on 18th September 2020 relating to its main Core Holdings is
set out below:
Core Holdings
Northbridge Industrial Services plc (“Northbridge”)
Northbridge hires and sells specialist industrial equipment to a non-cyclical customer base. With offices
or agents in the UK, USA, Dubai, Germany, Belgium, France, Australia, New Zealand, China and
Singapore, 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 and oil tools. Further information about Northbridge is available on their website:
www.northbridgegroup.co.uk
Northbridge, which is admitted to trading on AIM, announced its results for the year ended 31st
December 2019 on 7th April 2020 and recorded a loss after tax of £236,000 for the year (2018- loss
after tax £2,409,000). No dividend was recommended by Northbridge and no dividends were received
by Western from Northbridge during the year (2019 - £Nil).
Western holds 3,300,000 Northbridge shares which represents 11.8% of Northbridge’s issued share
capital. The market value of this investment at 30 June 2020 was £2,739,000 (2019 - £4,900,500) which
represents approximately 33.7% (2019 – 42 %) of Western’s net assets.
Brand Architekts Group plc (“BAG”)
BAG, which is admitted to trading on AIM, is a beauty brands business specialising in the delivery a
growing portfolio of innovative and exciting new products, spanning areas such as haircare, skincare
and body care, to consumers and retailers. Further information about BAG is available on its website:
https://www.brandarchitekts.com/
BAG announced its interim results for the 28 week period ended 11th January 2020 on 10th March 2020
and reported profit after tax of £6,600,000 (2019 final results for the 52 week period - £3,640,000).
5
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This figure was heavily impacted by the profit of £8.8m on disposal of its manufacturing business, offset
by a loss on discontinued operations of £2.5m.
Western holds 1,300,000 BAG shares which represents 7.6% of BAG’s issued share capital. The
market value has decreased to £1,625,000 (2019 - £2,502,000), which represents approximately 20%
(2019 – 21.4%) of Western’s net assets.
Edward Beale is a non-executive director of BAG.
Bilby Plc (“Bilby”)
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, which is admitted to trading on AIM, announced its results for the year ended 31 March 2020 on
27 July 2020 showing a profit after tax of £1,379,000 compared to a loss after tax of £8,596,000 for the
previous year ended 31 March 2019. No interim dividends were paid during the year and Bilby’s Board
did not recommend a final dividend (2019 - £67,500).
Western holds 6,336,363 Bilby shares which represents 10.79% of Bilby’s issued share capital.
Following the additional £400,000 acquisitions during the year, the market value of this investment on
30 June 2020 has increased to £1,235,590 (2019- £877,000), which represents approximately 15.2%
(2019 – 7.5%) of Western’s net assets.
Associated Companies
Tudor Rose International Limited (“Tudor Rose International”)
As announced in our final results on 30th September 2019, this investment had been fully provided
against. With effect from 8 April 2020 the Company sold its entire shareholding of 441,090 A Ordinary
shares and 175,000,000 Preference shares in Tudor Rose International for £3 plus contingent deferred
consideration and an option to repurchase the shares at the same value. The option to repurchase the
shares may be exercised on any date between 1st April 2022 and 31st March 2023. No deferred
consideration is expected, and the Board does not expect to exercise the option to repurchase the
shares.
Edward Beale and David Marshall resigned as directors of the Company with effect from 11th March
2020.
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, which is admitted to trading on AIM, is available on its website: www.finsburyfoods.co.uk
At 30th June 2020, Lonfin held 6,000,000 Finsbury shares, representing 4.6% of Finsbury’s issued
share capital. The market value of the holding was £3,540,000 as at 30th June 2020 (cost - £1,724,000)
and represents approximately 22% (2019 – 22%) of Lonfin’s net assets.
As at the date of publication, Finsbury has not announced their final results for the year ended 30th June
2020 to be able to present in these financial statements.
Edward Beale was a non-executive director of Finsbury up until 23rd November 2016.
6
London Finance & Investment Group PLC___________
Strategic Report (continued)
General Portfolio
The investments comprising the General Portfolio at 30th June 2020 are listed on page 12.
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 30th June 2020, the number of holdings in the General Portfolio was 31 (2019 – 30). We have
decreased the amount invested in the General Portfolio over the year by £170,000 (2019 - decreased
by £49,000).
The opening value of our General Portfolio investments at 30th June 2019 was £11,383,000 which
compared with a cost of such investments at the same date of £6,208,000. After investment purchases
during the year of £163,000 and investment sales (including selling expenses) during the same period
of £966,000, the value of the General Portfolio investments as at 30th June 2020 had decreased by
13% to £9,948,000. Further details of our General Portfolio investments are set out on page 12.
Board Changes
Whilst the Board is satisfied that it has a sufficient spread of skills, experience and support within the
Board to operate the Company and to develop the Company’s investment business, the Board will
continue to seek further suitable Board candidates who can add value to the Board.
Operations, Directors and Employees
All of our operations and those of Western, with the exception of investment selection, are outsourced
to our subsidiary, City Group PLC (“City Group”). City Group also provides office accommodation,
company secretarial, finance and head office services to a number of other companies. City Group is
responsible 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 6 people.
Dividend
The Board recommends a final dividend of 0.60p (ZAR 12.61848 cents) per share, making a total of
1.15p (ZAR 24.18542 cents) per ordinary share for the year (2019 – 1.15p). Subject to shareholders’
approval at the Company’s AGM to be held on Wednesday, 25th November 2020, the dividend will be
paid on Wednesday, 2nd December 2020 to those shareholders on the register at the close of business
on Friday, 20th November 2020. Shareholders on the South African register will receive their dividend in
South African rand converted from sterling at the closing rate of exchange on Thursday, 17th September
2020 being GBP1= ZAR 21.0308
JSE Disclosure Requirements
In respect of the normal gross cash dividend, and in terms of the South African Tax Act, the following
dividend tax ruling only applies to those shareholders who are registered on the South African register
on Friday, 20th November 2020.
The number of shares in issue as at the dividend declaration date is 31,207,479;
The dividend has been declared from income reserves. Funds are sourced from the Company’s
main bank account in London and is regarded as a foreign dividend by South African
shareholders; and
The Company’s UK Income Tax reference number is 948/L32120.
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Dividend dates:
Last date to trade (SA)
Shares trade ex-dividend (SA)
Shares trade ex-dividend (UK)
Record date (UK and SA)
Pay date
Tuesday, 17th November 2020
Wednesday, 18th November 2020
Thursday, 19th November 2020
Friday, 20th November 2020
Wednesday, 2nd December 2020
The JSE Listings Requirements require disclosure of additional information in relation to any dividend
payments.
Shareholders registered on the South African register are advised that a dividend withholding tax will be
withheld from the gross final dividend amount of ZAR 12.61848 cents per share at a rate of 20% unless
a shareholder qualifies for an exemption; shareholders registered on the South African register who do
not qualify for an exemption will therefore receive a net dividend of ZAR 10.094784 cents per share.
The dividend withholding tax and the information contained in this paragraph is only of direct application
to shareholders registered on the South African register, who should direct any questions about the
application of the dividend withholding tax to Computershare Investor Services (Pty) Limited, Tel: +27
11 370 5000.
Share certificates may not be de-materialised or re-materialised between Wednesday, 18th November
2020 and Friday, 20th November 2020, both days inclusive. Shares may not be transferred between the
registers in London and South Africa during this period either.
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. The Company also has a bank revolving credit facility which will run until
30th September 2022. The interest rate on any funds drawn down is 2.75% above the bank’s base rate.
The Group currently has no borrowings under this facility.
As an investment company, our principal risks and uncertainties which arise from the Group’s financial
instruments are:
Stock market volatility, economic uncertainty and Brexit
The Group’s investment performance will be affected by general economic and market conditions.
Although the Group 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 Group’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.
The United Kingdom left the European Union on 31st January 2020 however as trade deal
negotiations currently remain unsettled the eventual outcome of Brexit is still unknown. Until the
nature of the UK’s future relationship with the EU becomes clear and depending on the terms of that
relationship the ability of UK businesses to plan for the future is and will continue to be affected.
Q1 of 2020 also saw the emergence of the novel coronavirus Covid-19 with the United Kingdom
going into lockdown on 23rd March 2020. Covid-19 has had significant personal and social effects on
the world due to the loss of life and locking down of entire countries. In addition to this there has also
been a significant financial impact including on the stock market both in the United Kingdom and
worldwide which has affected the value of investments as well as their desire to pay dividends.
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London Finance & Investment Group PLC___________
Strategic Report (continued)
Possible volatility of share prices of Strategic Investments and General Portfolio investments
A number of factors outside the control of the Group, such as Covid-19, 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. Exchange rate movements
will contribute to the volatility of prices of foreign stocks.
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 boards of such
companies 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 Group to make strategic investments and therefore there is no
guarantee that the Group will be able to do so at a price the directors believe will represent fair
value.
Liquidity of equity investments in strategic investments
Strategic investments may be made in the equity of “small cap” companies, both listed and unlisted.
There is a risk that due to the low level of liquidity in the equity of these strategic investments the
Group may not be able to realise its investment, either at all, or at a price the Group believes reflects
fair value.
The depth and overlap of experience of directors means that there is no key-man dependency. Note 21
on pages 39 to 41 sets out the policies of the Board, which have remained substantially unchanged for
the year under review, for managing risks associated with its financial instruments.
In addition, the Group is exposed to investment risk arising from the selection of investments which it
mitigates by drawing on the investment experience of its directors.
Key Performance Indicators
Key Performance Indicators (‘KPIs’) are the yardsticks against which the Board measures the
performance of the Group. Our objectives are real growth over the long term in dividends and net
assets per share. Our performance on these KPIs are shown below. As an investment company, we
have no relevant non-financial KPIs. In addition, the Board also compares the Group’s total shareholder
return (TSR) with the TSR of the FTSE Eurofirst 100 index. A graph setting out that performance is set
out on page 61.
Net assets per share
Change in net assets per share over 5 years
Dividends (net) per share
Definition of KPIs used above
2020
50.6p
(17.6%)
1.15p
2019
(restated)
58.5p
17.7%
1.15p
2018
2017
2016
65.4p
46%
1.15p
65.6p
108%
1.1p
61.4p
75%
1.05p
Net assets per share - Net assets including investments at market value at the period end valuation
divided by the number of shares in issue at the year end.
Dividends per share - Dividends declared for the year divided by the number of shares in issue at the
year end.
9
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Financing Structure
The Group is financed by equity funding. However, the Board believes that a reasonable level of
gearing can enhance returns to shareholders. Accordingly, the Group has secured a bank credit
revolving facility with Coutts & Co which was extended in 2019 to 30th September 2022. At 30th June
2020, the Group had undrawn bank facilities of £1,900,000.
The Board currently has no plans to implement a share buy-back policy.
Although the Board has no intention of issuing further shares in the Company at this time, to provide
Directors with flexibility over the management of the Company’s capital, Shareholders are being asked
to approve resolutions at the forthcoming AGM which would permit the Company to issue new ordinary
shares, details of which are explained in the Directors’ Report on page 46. Similar resolutions have
been approved by Shareholders at the Company’s previous AGMs.
S172 Statement
In line with their duties as set out in s172 of the Companies Act 2006, the Board of Directors act in a
way they consider would be most likely to promote the long term success of the Group for the benefit of
its members as a whole, whilst also having regard to the views and interests of wider stakeholders and
matters as set out in S172(1).
As an investment Group, the goal of the Group is to provide financial returns to the shareholders over
the long term. In this respect the Board of Directors, at all times, have due consideration as to the po-
tential effect of investment decisions and the benefit they may bring to the shareholders. Key invest-
ment decisions and matters that are of strategic importance to the Group are appropriately informed by
s172 factors.
With regards to wider stakeholders, the Board of Directors consider the underlying strategic companies
in which the Group has invested as well as advisors and suppliers amongst the key stakeholders of the
Group. In this respect the Board of Directors engage with these stakeholders on a frequent basis in or-
der to build and strengthen such relationships. It is noted that, due to the nature of the Group, it does
not have executives, employees or operations to consider as stakeholders except in the case of City
Group PLC.
The views of and impact upon the wider stakeholders of the Group are considered as part of the board
decision process including engaging with stakeholders to ensure they have a clear understanding of the
long term goals of the Group and how the Board of Directors intend to achieve these goals.
The Board of Directors are committed to upholding the highest standard of corporate governance within
the Group and to ensure that they maintain a high level of knowledge and understanding of governance
requirements to be implemented by the Group. The Board of Directors have also implemented policies
to ensure the integrity and sustainability of the Group is upheld.
The Directors’ Report and Corporate Governance report contain further details as to how the Board of
Directors undertake their decisions with regards to S172 of the Companies Act 2006 and the effect on
the decision making of the Board.
Outlook
The continued political and economic uncertainty in Europe, where a Brexit trade deal has yet to be
delivered, and globally, with Covid-19 and the negative impact from tariff issues, will clearly impact on
world economies and we can expect further volatility and turbulence in the markets ahead. Whilst the
last 12 months have been challenging for the Group’s investments, particularly its Strategic
Investments, and we can expect further challenges ahead, the Board is confident that the Group has a
solid base of investments which can lead to further capital growth in the medium to long term.
10
London Finance & Investment Group PLC___________
Strategic Report (continued)
Future Developments
The Group’s development and its financial performance are dependent on the success of its Investment
Strategy and the continued support of its Shareholders. Against a background of challenging and
uncertain times in the markets particularly due to Covid-19, the Board continues to seek out
investments which will generate growth in shareholder value. The Board also continues to monitor and
enhance the quality of investments in the General Portfolio. A resolution was put to Shareholders at last
year’s AGM to amend the Company’s Investment Policy so that up to 40 investments may be held in the
Company’s General Portfolio at any time. The resolution was approved. Aside from this change, the
Board continues to pursue its current Investment Policy and has no plans to make any further changes
to the policy in the near future. As at 30th June 2020, the Company held 31 investments in the General
Portfolio.
By Order of the Board
City Group PLC
Company Secretary
18 September 2020
11
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Composition of General Portfolio
At 30th June 2020
L’Oreal
Nestle
LVMH Moet Hennessey
Investor AB ‘B’
Pernod Ricard
Unilever
Procter & Gamble Co
Schindler-Holdings AG CHF1.00 REGD (Post Subd)
Heineken Holding
Brown Forman (B)
Antofagasta
Reckitt Benckiser Group
Givaudan
Diageo
Danone
British American Tobacco
Henkel Preferred
Phillip Morris International Inc
3M Co
Becton Dickinson & Co
Exxon Mobil Corp
Deutsche Post
Royal Dutch Shell B
Compagnie Financiere Richemont SA
HSBC Holding
Anheuser Busch Inbev SA
BASF
AP Moeller-Maersk A/S
Otis Worldwide Corp
Raytheon (previously United Technologies Corp)
Imperial Brands
Analysis by currency
Euro
Sterling
US Dollar
Swiss Franc
Swedish Kronas
Danish Kronas
£000
548
540
533
445
440
439
434
410
403
396
375
364
362
342
336
304
311
289
276
265
233
222
220
211
208
191
190
179
175
170
137
9,948
£000
3,173
2,390
2,238
1,523
445
179
9,948
%
5.5
5.4
5.4
4.5
4.4
4.4
4.4
4.1
4.1
4.0
3.8
3.7
3.6
3.4
3.4
3.1
3.1
2.9
2.8
2.7
2.3
2.2
2.2
2.1
2.1
1.9
1.9
1.8
1.8
1.7
1.3
100
%
31.9
24.0
22.5
15.3
4.5
1.8
100
12
London Finance & Investment Group PLC___________
Statement of Directors’ Responsibilities in Respect of the
Financial Statements
The Directors are responsible for preparing the Strategic Report, the Directors’ Report, the Corporate
Governance Statement, the Audit Committee Report, the Directors’ Remuneration Report and the
financial statements in accordance with applicable law and regulations.
Company law requires 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 Group and the Parent Company and of the profit or loss of the Group and
Parent Company for that period.
In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare financial statements in accordance with IFRSs as adopted by the European Union, subject
to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the Group and Parent Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Group and Parent Company’s transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Parent Company and enable them to ensure that the
financial statements and the Directors’ Remuneration Report comply with the Companies Act 2006 and,
as regards the group financial statements, Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Company’s website. The Company does not have a website but information
about the Company is available on its subsidiary, City Group’s website. Legislation in the United
Kingdom governing the preparation and dissemination of the financial statements may differ from
legislation in other jurisdictions.
Each of the Directors whose names and functions are listed on page 1 confirms that to the best of each
person’s knowledge and belief:
The financial statements, prepared in accordance with IFRSs as adopted by the EU, give a true
and fair view of the assets, liabilities, financial position and profit/loss of the Group and the Parent
Company.
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 Parent Company, together with
a description of the principal risks and uncertainties that they face, and
The Annual Report, taken as a whole, is fair, balanced and understandable and provides the in-
formation necessary for Shareholders to assess the Group’s performance, business model and
strategy.
By Order of the Board
City Group PLC
Company Secretary
18 September 2020
13
_____________________________________________
Independent auditor’s report to the members of London
Finance & Investment Group PLC
Opinion
We have audited the financial statements of London Finance & Investment Group PLC (the ‘parent
company’) and its subsidiaries (the ‘group’) for the year ended 30th June 2020 which comprise the
Consolidated Statement of Total Comprehensive Income, the Consolidated and Company Statements of
Financial Position, the Consolidated and Company Statements of Cash Flows, the Consolidated and
Company Statements of Changes in Shareholders’ Equity and the notes to the financial statements, including
a summary of significant accounting policies. 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 and as regards the parent company financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
the financial statements give a true and fair view of the state of the group’s and of the parent company’s
affairs as at 30th June 2020 and of the group’s and parent company’s profit/(loss) for the year then
ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union and as applied in accordance with the provisions of the Companies Act
2006; and
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.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the group
and parent company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to principal risks, going concern and viability statement
We have nothing to report in respect of the following information in the annual report, in relation to which the
ISAs (UK) require us to report to you whether we have anything material to add or draw attention to:
the disclosures in the annual report, as set out on pages 8 and 9, that describe the principal risks and
explain how they are being managed or mitigated;
the directors’ confirmation, as set out on pages 8, 9 and 44 in the annual report that they have carried out
a robust assessment of the principal risks facing the group, including those that would threaten its
business model, future performance, solvency or liquidity;
the directors’ statement, as set out on page 44 in the financial statements about whether the directors
considered it appropriate to adopt the going concern basis of accounting in preparing the financial
statements and the directors’ identification of any material uncertainties to the group and the parent
company’s ability to continue to do so over a period of at least twelve months from the date of approval of
the financial statements;
whether the directors’ statement relating to going concern required under the Listing Rules in accordance
with Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or
the directors’ explanation, as set out on page 44 in the annual report as to how they have assessed the
prospects of the group, over what period they have done so and why they consider that period to be ap-
propriate, and their statement as to whether they have a reasonable expectation that the group will be
14
London Finance & Investment Group PLC___________
able to continue in operation and meet its liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any necessary qualifications or assumptions.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. For planning and fieldwork, we consider materiality to be the magnitude by which mis-
statements, including omissions, either individually or in aggregate, could reasonably be expected to influ-
ence the economic decisions of users that are taken on the basis of the financial statements. Importantly,
misstatements below this level will not necessarily be evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating
their effect on the financial statements. The application of these key considerations gives rise to two levels of
materiality, the quantum and purpose of which are tabulated below.
Group Materiality
Materiality
measure
Group financial
statement
materiality – Based
on 1% of invested
assets (the
aggregate of non-
current and current
investments)
Purpose and basis
Key considerations and
benchmarks
Assessing whether
statements as a whole present a true
and fair view.
the
financial The value of investments
The level of judgement inher-
ent in the valuation
The range of reasonable alter-
native valuations
Materiality is based on the investment
balance on the basis that this is the
main driver of the balance sheet.
The level of normalised
earnings
Specific materiality
– classes of
transactions and
balances other than
those at fair value –
Based on 5%. of
estimated
normalised EBITDA
excluding fair value
movements
for
Under ISA 320, an auditor is required
to consider whether there are one or
more classes of transactions or
which
balances,
account
misstatements of lesser amounts than
materiality
could reasonably be
expected to influence the economic
decisions of users taken on the basis
of the financial statements. This
specific level of materiality was used
to test non-investment related
transactions and balances.
Amount
£
175,000
37,540
We have applied a performance materiality of 80%. We reassessed materiality at the end of the audit and did
not find it necessary to revise our planning materiality.
We have applied a lower level materiality in the audit of the in-scope component entities i.e. London Finance
& Investment Group PLC (Parent), City Group PLC and Lonfin Investments Limited.
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess
of 5% of materiality as well as differences below that threshold that, in our view, warranted reporting on
qualitative grounds.
15
_____________________________________________
An overview of the scope of our audit
Our audit approach was developed by obtaining an understanding of the group’s activities, the key functions
undertaken on behalf of the Board by specialist outsourced service providers and the overall control envi-
ronment. Based on this understanding we assessed those aspects of the group and subsidiary companies
transactions and balances which were most likely to give rise to a material misstatement and were most
susceptible to irregularities including fraud or error. Specifically, we identified what we considered to be key
audit matters and planned our audit approach accordingly.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters included those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Area
Valuation
and
existence of
investments
(note 13)
Reason
The valuation of the portfolio at 30
June 2020 was £16.239m (2019 -
£18.979m), comprising a general
portfolio of listed investments and two
strategic investments in Western
Selection PLC and Finsbury Group
PLC.
The valuation of investments, which
are held at fair value, was considered
a key audit matter as investments are
the single most significant component
of the financial statements and the
fair value movements thereon could
have a pervasive impact on the
financial statements. Furthermore,
although the relevant investments are
in companies whose shares are
traded on recognised stock
exchanges, the nature of those
exchanges and volume of trades in
those shares may be such that there
is insufficient liquidity for bid price to
be a suitably reliable measure of fair
value.
Additionally, there is a risk that the
investments recorded as held by the
Group may not represent assets of
the Group.
Audit response
Investments comprise a general portfolio of listed
investments and two separate strategic holdings,
we applied our audit procedures to the general
portfolio and both the strategic investments. Spe-
cifically, we:
performed initial analytical procedures to
determine the extent of our work consid-
ering, inter alia, the composition of the
investment portfolio, the sectors invested
in and, based on publicly available data,
the expected movements on the portfo-
lio;
had regard to the size of investment
stake held, the impact of liquidity con-
straints and any unusual movement in
observable share prices around the year
end;
confirmed that bid price had been used;
confirmed there were no contra-
indicators, such as liquidity considera-
tions, to suggest bid price was not the
most appropriate indication of fair value;
and
re-performed the calculation of the in-
vestment valuations and benchmarked
key inputs and estimates to independent
information and our own research.
We confirmed the existence of invest-
ments through agreeing 100% of the in-
vestments held to Custodian reports in-
dependently obtained from the Custodi-
an and to share certificates held.
Based on the procedures we performed, we
found that the valuation of the Group’s
investments was supported by the evidence we
obtained and that the Group had title to the
investments reported in the financial statements.
16
London Finance & Investment Group PLC___________
Area
Reason
Audit response
Investment income arises from
dividend income from the group’s
Revenue
recognition
- investment investment portfolio. Such income is
not predictable, and its generation is
income
outside of the control of the group.
(note 1 & 3)
For this reason, we considered there
was a risk investment income could
be incomplete.
We assessed the design and the implementation
of the controls relating to revenue recognition and
we developed expectations for investment
income receivable based on investment holdings
and publicly available information.
In respect of dividends receivable, we compared
actual income to expectations set based on
independent published data of dividends
declared by the portfolio companies held.
We agreed a sample of income receipts from
bank statement to the nominal ledger and vice
versa.
Based on the procedures we performed, we
found that revenue is reasonable based on the
evidence obtained.
Other information
The other information comprises the information included in the annual report other than the financial state-
ments and our auditor’s report thereon. The directors are responsible for the other information. Our opinion
on the group and parent company financial statements does not cover the other information and, except to
the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon. In connection with our audit of the financial statements, our responsibility is to read the other infor-
mation and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement of
the other information, we are required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our responsibility to specifically address the follow-
ing items in the other information and to report as uncorrected material misstatements of the other infor-
mation where we conclude that those items meet the following conditions:
‘Fair, balanced and understandable’ (set out on page 56) – the statement given by the directors that
they consider the annual report and financial statements taken as a whole is fair, balanced and under-
standable and provides the information necessary for shareholders to assess the group’s performance,
business model and strategy, is materially inconsistent with our knowledge obtained in the audit; or
Audit Committee reporting (as set out on pages 55 to 58) – the section describing the work of the Audit
Committee does not appropriately address matters communicated by us to the Audit Committee; or
Directors’ statement of compliance with the UK Corporate Governance Code (as set out on page
49) – the parts of the directors’ statement required under the Listing Rules relating to the company’s
compliance with the UK Corporate Governance Code containing provisions specified for review by the
auditor in accordance with Listing Rule 9.8.10R (2) do not properly disclose a departure from a relevant
provision of the UK Corporate Governance Code.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in ac-
cordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
17
_____________________________________________
the information given in the strategic report and the directors’ report for the financial year for which the
financial statements are prepared is consistent with the financial statements and those reports have been
prepared in accordance with applicable legal requirements;
the information about internal control and risk management systems in relation to financial reporting and
about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Guidance
and Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA Rules), is
consistent with the financial statements and has been prepared in accordance with applicable legal
requirements; and
information about the company’s corporate governance code and practices and about its administrative,
management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of
the FCA Rules.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment
obtained in the course of the audit, we have not identified material misstatements in:
the strategic report or the directors’ report; or
the information about internal control and risk management systems in relation to financial reporting pro-
cesses and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA
Rules.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements and the part of the directors’ remuneration report to be
audited are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
a corporate governance statement has not been prepared by the parent company.
Responsibilities of directors
As explained more fully in the statement of directors responsibilities in respect of the financial statements, the
directors are responsible for the preparation of the group and parent company financial statements and for
being satisfied that they give a true and fair view, and for such internal control as the directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing
the group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, mat-
ters related to going concern and using the going concern basis of accounting unless the directors either in-
tend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but
to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of
our auditor’s report.
18
London Finance & Investment Group PLC___________
Other matters which we are required to address
Following the recommendation of the Audit Committee, we were appointed by the Board on 30th November
2016 to audit the financial statements for the year ending 30th June 2017 and subsequent financial periods.
We were reappointed by the members of the company at the Annual General Meeting held on 13th
November 2019. This is the fourth financial period we have audited, and the current engagement partner has
a further two years as Senior Statutory Auditor of the group before an audit rotation is required.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent
company and we remain independent of the group and the parent company in conducting our audit.
We assessed the risks of material misstatement of the financial statements, whether due to fraud or error,
and then designed and performed audit procedures responsive to those risks, including obtaining audit
evidence that is sufficient and appropriate to provide the basis for our opinion. We planned and conducted
our audit so as to obtain reasonable assurance of detecting any material misstatements in the financial
statements resulting from irregularities or fraud.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on
the financial statements from our sector experience and through discussion with the directors. We have
identified requirements of the Disclosure Guidance and Transparency Rules, the UK Corporate Governance
Code and the Companies Act 2006 to be significant in the context of this entity. We considered the extent of
compliance with those laws and regulations as part of our procedures on the related financial statements
items.
We communicated laws and regulations throughout our audit team and remained alert to any indications of
non-compliance throughout the audit.
As with any audit, there remained a higher risk of non-detection of irregularities, as these may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
Our audit opinion is consistent with the additional report to the Audit Committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’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 members as a body, for our audit work, for this report, or for the opinions we
have formed.
Ian Cowan (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
United Kingdom
18 September 2020
19
_____________________________________________
Consolidated Statement of Total Comprehensive Income
For the year ended 30th June
Operating Income
Notes
4a
4a
3
13
4b
7
Dividends receivable
Rental and other income
Profits on sales of investments
Management service fees
Administrative expenses
Investment operations
Management services
Total administrative expenses
Operating profit
Unrealised changes in the carrying value of General
Portfolio investments
Exceptional costs
Interest payable
(Loss)/Profit before taxation
Tax income/(expense)
(Loss)/Profit after taxation
Non-controlling interest
(Loss)/Profit attributable to shareholders
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Unrealised changes in the carrying value of Strategic
investments
Other taxation -
Deferred tax
Total Other Comprehensive (Loss)/Income
attributable to shareholders
Total Comprehensive (Loss)/Income attributable
to owners of the parent
Reconciliation of headline earnings
Basic and diluted earnings per share
Adjustment for the unrealised changes in the
carrying value of investments, net of tax
Headline earnings per share
Restated
for IFRS 16
2019
£000
687
130
15
260
1,092
(398)
(328)
(726)
366
748
(67)
(57)
990
(95)
895
13
908
2020
£000
425
150
68
284
927
(417)
(380)
(797)
130
(700)
-
(62)
(632)
(164)
(796)
(11)
(807)
2019
£000
687
130
15
260
1,092
(398)
(334)
(732)
360
748
(67)
(34)
1,007
(95)
912
5
917
(1,305)
(3,054)
(3,054)
7
-
379
379
(1,305)
(2,675)
(2,675)
(2,112)
(1,767)
(1,758)
9
9
(2.6)p
-
(2.6)p
2.9p
-
2.9p
2.9p
(2.3)p
0.6p
The notes on pages 27 to 42 form part of these financial statements.
20
London Finance & Investment Group PLC___________
Consolidated Statement of Financial Position
At 30th June
Notes
10
11
13
13
14
15
11
16
11
17
18
Restated for
IFRS 16
2019
£000
39
568
7,596
8,203
11,383
194
240
11,817
(232)
(49)
(400)
(681)
2020
£000
31
512
6,291
6,834
9,948
166
269
10,383
(225)
(52)
-
(277)
2019
£000
39
-
7,596
7,635
11,383
194
240
11,817
(279)
-
(400)
(679)
10,106
11,136
11,138
(519)
(520)
(1,039)
(583)
(395)
(978)
-
(395)
(395)
15,901
18,361
18,378
1,560
2,320
1,708
4,712
5,498
15,798
103
15,901
1,560
2,320
6,085
4,565
3,739
18,269
92
18,361
1,560
2,320
6,085
4,574
3,739
18,278
100
18,378
Non-current Assets
Property, Plant and Equipment
Right of use asset
Investments
Current Assets
Listed investments
Trade and other receivables
Cash and cash equivalents
Current Liabilities
Trade and other payables
Lease liabilities
Borrowings
Net Current Assets
Non-current Liabilites
Lease liabilities
Deferred Taxation
Total Assets less Total Liabilities
Capital and Reserves
Ordinary share capital
Share premium account
Unrealised profits and losses on investments
Share of retained realised profits and losses of
subsidiaries
Company’s retained realised profits and losses
Capital and reserves attributable to owners
Non-controlling interests
Total Capital and Reserves
Approved and authorised by the Board
On 18 September 2020
Edward Beale
Director
The notes on pages 27 to 42 form part of these financial statements.
21
_____________________________________________
Company Statement of Financial Position
At 30th June
Non-current Assets
Investments in Group companies
Current Assets
Listed investments
Trade and other receivables
Cash and cash equivalents
Current Liabilities
Trade and other payables
Borrowings
Net Current Assets
Deferred Taxation
Total Assets less Total Liabilities
Capital and Reserves
Ordinary share capital
Share premium account
Unrealised profits and losses on investments
Realised Profit and Loss
Balance at 1st July
Net Profit/(Loss)/ for the period
Dividends paid
Balance at 30th June
Equity shareholders’ funds
Notes
12
13
14
15
16
17
18
18
18
2020
£000
2,074
9,948
16
91
10,055
(132)
-
(132)
9,923
(520)
11,477
1,560
2,320
2,099
5,979
3,739
2,118
(359)
5,498
11,477
2019
£000
528
11,383
23
101
11,507
(131)
(400)
(531)
10,976
(395)
11,109
1,560
2,320
3,490
7,370
4,253
(154)
(360)
3,739
11,109
Under Section 408 of the Companies Act 2006, the Parent Company is exempt from the requirement to
present its own income statement.
Approved and authorised by the Board
On 18 September 2020
Edward Beale
Director
London Finance & Investment Group PLC
Registered in England and Wales – Number 201151
The notes on pages 27 to 42 form part of these financial statements.
22
London Finance & Investment Group PLC___________
Consolidated Statement of Cash Flows
For the year ended 30th June
Cash flows from operating activities
(Loss)/Profit before tax
Adjustments for non-cash -
Finance expense
Depreciation charges
Depreciation on right of use asset
Unrealised changes in the fair value of
investments
Realised gain on disposal of investments
Decrease in trade and other receivables
Decrease in trade and other payables
Taxes paid
Net cash inflow from operating activities
Cash flows from investment activity
Acquisition of property, plant and equipment
Acquisition of current investments
Proceeds from disposal of current investments
Net cash inflow from investment activity
Cash flows from financing
Interest paid
Interest paid on lease liabilities
Repayment of lease liabilities
Equity dividends paid
Net (repayment)/drawdown of loan facilities
Net cash outflow from financing
Increase/(Decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning
of the year
Cash and cash equivalents at end of the year
Notes
13
13
7
13
16
20
Restated for
IFRS 16
2019
£000
990
57
13
46
(756)
(7)
58
(112)
(44)
245
(39)
(611)
667
17
(18)
(23)
-
(360)
75
(326)
(64)
304
240
2020
£000
(632)
62
10
62
1,265
(633)
10
(7)
(39)
98
(2)
(163)
966
801
(31)
(31)
(49)
(359)
(400)
(870)
29
240
269
The notes on pages 27 to 42 form part of these financial statements
.
2019
£000
1,007
34
13
-
(756)
(7)
58
(83)
(44)
222
(39)
(611)
667
17
(18)
-
-
(360)
75
(303)
(64)
304
240
23
_____________________________________________
Company Statement of Cash Flows
For the year ended 30th June
Cash flows from operating activities
Profit before tax
Adjustments for non-cash and non-operating activities -
Finance expense
Release of Impairment provision
Unrealised changes in the fair value of investments
Realised gain on disposal of investments
Decrease in trade and other receivables
Decrease in trade and other payables
Overseas Taxes paid
Net cash outflow from operating activities
Cash flows from investment activity
Acquisition of investments
Proceeds from disposal of investments
Net cash inflow from investment activity
Cash flows from financing
Interest paid
Equity dividends paid
Decrease in loan to subsidiary
Net (repayment)/drawdown of loan facilities
Net cash (outflow)/inflow from financing
(Decrease)/Increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at end of the year
Notes
12
13
13
7
12
16
2020
£000
891
31
(1,681)
1,266
(633)
7
(16)
(39)
(174)
(163)
966
803
(15)
(359)
135
(400)
(639)
(10)
101
91
The notes on pages 27 to 42 form part of these financial statements.
2019
£000
644
35
-
(756)
(7)
13
(11)
(43)
(125)
(611)
667
56
(18)
(360)
374
75
71
2
99
101
24
London Finance & Investment Group PLC___________
Consolidated Statement of Changes in Shareholders’ Equity
Ordinary
Share
Share Premium
Capital Account
Unrealised
profits and
losses on
Investments
Share of Company’s
retained
Retained
realised
realised
profits and
profits and
losses of
losses
Subsidiaries
Total
Total
Non-
Controlling Equity
Interests
£000
£000
£000
£000
£000
£000
£000
£000
Year ended 30th June
2020
Balances at 1st July 2019
1,560
2,320
(Loss)/profit for the Year
Other Comprehensive
Income
Total comprehensive
income
Impairment provision
released
Dividends paid and total
transactions with
shareholders
Balnaces at 30th June
2020
Year ended 30th June
2019 (Restated for
IFRS 16)
Balances at 1st July 2018
Profit/(loss) for the Year
IFRS 16 Adjustment
Other Comprehensive
Income
Total comprehensive
income
Dividends paid and
total transactions with
shareholders
Balances at 30th
June 2019
-
-
-
-
-
-
-
-
-
-
6,085
(1,391)
(1,305)
(2,696)
(1,681)
-
4,565
147
-
147
-
-
3,739 18,269
92 18,361
437
(807)
11
(796)
-
(1,305)
-
(1,305)
437
(2,112)
11
(2,101)
1,681
-)
(359)
(359)
-
-
-)
(359)
1,560
2,320
1,708
4,712
5,498)
15,798
103
15,901
1,560
2,320
8,056
4,207
4,253 20,396
105 20,501
-
-
-
-
-
-
-
-
-
-
704
-
(2,675)
367
(9)
-
(154)
-
917
(9)
(5)
(8)
912
(17)
- (2,675)
- (2,675)
(1,971)
358
(154)
(1,767)
(13)
(1,756)
-
-
(360)
(360)
-
(360)
1,560
2,320
6,085
4,565
3,739 18,269
92 18,361
The notes on pages 27 to 42 form part of these financial statements.
25
_____________________________________________
Company Statement of Changes in Shareholders’ Equity
Year ended 30th June 2020
Balances at 1st July 2019
(Loss)/profit for the Year and
total comprehensive income
Dividends paid and total transactions
with shareholders
Ordinary
Share
Capital
Share
Premium
Account
Unrealised
profits and
losses on
Investments
£000
£000
£000
Realised Equity Total
profits
and
losses
£000
£000
1,560
2,320
3,490
3,739
11,109
-
-
-
-
(1,391)
2,118
727
-
(359)
(359)
Balances at 30th June 2020
1,560
2,320
2,099
5,498
11,477
Year ended 30th June 2019
Balances at 1st July 2018
Profit/(loss) for the Year and total
comprehensive income
Dividends paid and total transactions
with shareholders
1,560
2,320
2,786
4,253
10,919
-
-
-
-
704
(154)
550
-
(360)
(360)
Balances at 30th June 2019
1,560
2,320
3,490
3,739
11,109
The notes on pages 27 to 42 form part of these financial statements.
26
London Finance & Investment Group PLC___________
Notes to the Financial Statements
For the year ended 30th June 2020
1. Accounting Policies
The consolidated financial statements of the London Finance & Investment Group PLC have been
prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the
European Union and interpretations issued by the IFRS Interpretations Committee (IFRS IC) and with
the Companies Act 2006 applicable to companies reporting under 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.
(i)
With the exception of Western, these consolidated financial statements include the results and
net assets of the Group’s subsidiaries (all of which are companies) for the year to 30th June
2020. The non-controlling interests are wholly attributable to equity interests in subsidiaries.
Western has not been consolidated as the Directors consider that the Group, as the parent and
ultimate parent undertaking, is able to take advantage of the investment entity exemption in
IFRS10. Accordingly, the Group’s investment in Western, a Strategic Investment, is carried at
fair value with fair value movements going through the Statement of Other Comprehensive
Income.
(ii)
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.
Revenue from management services is recognised when the right to such income is
established through a contract and in line with the provision of services to which they relate.
(iii)
The Company pays final and interim dividends. Dividends are recognised in the period in
which they are appropriately authorised. For interim dividends, this will mean the date on which
they are paid and, for final dividends, this will mean the date on which they are approved in
general meeting.
(iv)
Financial assets are classified by category, depending on the purpose for which the asset was
acquired. The Group’s accounting policy is as follows:
a) Fair value through income: Non-derivative financial assets other than unquoted invest-
ments and trade and other receivables are classified as strategic and general portfolio in-
vestments and are recognised as being at fair value through Profit or Loss or Other Com-
prehensive Income. They are valued using quoted bid prices and movements in value are
taken to the income statement.
Investments in the general portfolio are held at fair value through Profit or Loss with
changes in the fair value recognised in profit or loss. They are valued using quoted market
prices.
27
_____________________________________________
Investments in the strategic portfolio are held at fair value through Other Comprehensive
Income with changes in the fair value recognised in Other Comprehensive Income and
accumulated in the unrealised profits and losses on investments reserve. They are valued
using quoted market prices. When the investment is disposed of or is determined to be
impaired, the cumulative gain or loss previously accumulated in the unrealised profits and
losses on investments reserve is reclassified to realised profits and losses.
Derivative financial instruments, which have been entered into to hedge future cash flows
but which for accounting purposes are not designated as hedging instruments consist of an
Interest rate swap contract. This is initially measured at fair value and is revalued at
subsequent reporting dates using bank valuation.
b) Unquoted investments. These are stated at cost net of impairment provisions because fair
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.
(v)
Borrowings are recognised initially at fair value and subsequently carried at amortised cost.
(vi)
The charge for taxation is based on the taxable profit or loss for the year. Taxable profit or loss
differs from net profit or loss as reported in the Statement of Total Comprehensive Income. 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.
(vii)
(viii)
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 probable 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 in equity.
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.
Property plant and equipment - Computer and electronic equipment expenditure of less than
£2,500 is written off in the year of acquisition. All other property, plant and equipment is stated
at historical cost less depreciation. Historical cost includes expenditure that is directly attributa-
ble to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the group and the cost of the item can be meas-
ured reliably. The carrying amount of any component accounted for as a separate asset is de-
recognised when replaced. All other repairs and maintenance are charged to profit or loss dur-
ing the reporting period in which they are incurred. Gains and losses on disposals are deter-
mined by comparing proceeds with carrying amount. These are included in profit or loss.
Property, plant and equipment are depreciated at rates calculated to write off the cost of
relevant assets over their effective useful economic lives. Depreciation is charged at the
following rates:
Leasehold improvements – over the life of the lease
Office equipment
– 20% on cost
28
London Finance & Investment Group PLC___________
Notes to the Financial Statements (continued)
1. Accounting Policies (continued)
(ix)
Leases - At lease commencement date, the Group recognises a right-of-use asset and a lease
liability in the Statement of Financial Position. The right-of-use asset is measured at cost, which
is made up of the initial measurement of the lease liability, any initial direct costs incurred by the
Group and an estimate of any costs to dismantle and remove the asset at the end of the lease.
The Group depreciates the right-of-use assets on a straight-line basis from the lease com-
mencement date to the earlier of the end of the useful life of the right-of-use asset or the end of
the lease term.
The Group also assesses the right-of-use asset for impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the present value of the
lease payments unpaid at that date, discounted using the interest rate of the Group’s incremen-
tal borrowing rate (5%).
Lease payments included in the measurement of the lease liability are made up of fixed pay-
ments, payments arising from options reasonably certain to be exercised and amounts ex-
pected to be payable under a residual value guarantee.
If the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use
Asset.
The Group has elected to account for short-term leases and leases of low-value assets using
the practical expedients. Instead of recognising a right-of-use asset and lease liability, the pay-
ments in relation to these are recognised as an expense in profit or loss on a straight-line basis
over the lease term.
On the statement of financial position, right-of-use assets and lease liabilities have been
presented separately from Property, Plant and Equipment and Trade and other payables.
(x)
Cash and cash equivalents comprise cash balances.
2. Changes in accounting policies and disclosures
a) New standards, amendments and interpretations adopted by the Group
IFRS 16 “Leases” specifies how a company reporting under IFRS will recognise, measure, and
disclose leases. The standard provides a single lessee accounting model, requiring lessees to
recognise assets and liabilities for all leases unless the lease term is 12 months or less or the
underlying asset has a low value. Lessors continue to classify leases as operating or finance, with
IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor IAS 17. The
standard replaces IAS 17 ‘Leases’ and related interpretations. The standard is effective for annual
periods beginning on or after 1st January 2019.
The Group has only one operating lease that was affected by the new standard. The right of use of
asset and lease liability have been estimated based on a 5% discount factor and the cashflows
predicted over the 10-year lease life. The Income statement was affected with additional
depreciation and interest charges which replaced rental costs.
The application of IFRS 16 requires the Group to make judgements that affect the calculation of the
lease. These include: determining the discount rate of future cashflows, which is based on the costs
of capital, and determining the rental costs, where an expected increase of 10% has been applied
at the 5 year review point.
The Group has applied the full retrospective approach and has restated the comparative figures for
the year prior to first adoption (note 11).
No other new standards, amendments or interpretations, effective for the first time for financial
years beginning on or after 1st January 2019 have had a material impact on the Group or Parent
Company.
29
_____________________________________________
b) New standards, amendments and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for
financial periods beginning after 1st January 2020 and have not been applied in preparing these
consolidated financial statements. None of these are expected to have a significant effect on the
consolidated financial statements of the Group.
3. Operating profit – Segmental Analysis
The Directors manage the Group through two classes of business, Investment Operations and
Management Services, and present the segmental analysis on that basis. The segment performance
measure is operating profit.
Investment
Operations
Restated
for IFRS
16
2019
£000
687
-
2020
£000
425
-
68
-
493
(417)
76
15
-
702
(399)
303
Management
Services
Restated
for IFRS
16
2019
£000
-
131
2020
£000
-
150
-
284
434
(380)
54
-
260
391
(328)
63
Dividends – Listed investments
Rental and other income
Profits on sales of investments, including
provisions
Management services fees
Operating income
Administration expense – normal
Operating profit
All revenues are derived from operations within the UK. Consequently, no separate geographical
segment information is provided.
4. Administration Expenses
a)
Administration expenses include:
Depreciation
Depreciation on Right of use asset
Auditors’ remuneration
Directors’ emoluments
Staff Costs
b)
Exceptional costs
*Includes relocation costs and additional rent
charges
Restated
for IFRS
16
2019
£000
2020
£000
10
62
27
76
392
13
46
25
76
384
- Audit services
- Note 5
- Note 6
- Office move*
-
67
30
London Finance & Investment Group PLC___________
Notes to the financial statements (continued)
5. Directors' Emoluments and Related Party Disclosures
The key management personnel are considered to be the Group directors. Their emoluments are
detailed in the Directors’ Remuneration Report on pages 60 to 66.
Related Party Disclosures
London Finance & Investment Group PLC (“Lonfin”) and its wholly owned subsidiary, Lonfin
Investments Limited, owns 43.8% of Western Selection PLC (“Western”).
Western is a company incorporated in England with its registered office at 1 Ely Place, London, EC1N
6RY. Under IFRS 10, Lonfin is considered to be the parent and ultimate parent undertaking of a group
of companies including Western for which group financial statements are drawn up. Copies of these
group financial statements have been delivered to the Registrar of Companies. Western’s financial
statements are not consolidated with this group as the Company, as the Parent Company is able to take
advantage of the investment entity exemption in IFRS 10.
Mr. D.C. Marshall and Mr. E.J Beale are directors.
Mr. D.C. Marshall’s shareholdings in Lonfin, and Mr E.J. Beale’s share options, are set out in the
Directors’ Report on pages 43 to 48.
Lonfin and Western own City Group in the ratio 51.4% and 48.6% respectively. City Group provides
office accommodation, company secretarial, finance and head office services to both Lonfin and
Western and to various other companies in the UK 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 receivable by City Group from those companies, their associates and subsidiaries, total
£413,000 (2019 - £406,480) for the year under review. At the reporting date the aggregate balance due
in respect of fees invoiced was £118,000 (2019 - £130,000). Settlement is within normal credit terms.
At 30th June 2020, as disclosed in Notes 13 and 14 below, City Group owed the Company £Nil (2019 –
£5,000) and it owed City Group £55,000 (2019 - £60,000) for fees. The Company was also owed
£304,000 (2019 - £439,000) by Lonfin Investments Limited as disclosed in Note 11 below. 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.
6. Staff Costs
Other than the Directors, the Company has no staff or staff costs. All the Group’s staff, other than the
Directors, are employed by the Company’s subsidiary, City Group. Group staff costs, excluding Group
Directors’ fees which are shown in the Directors’ Remuneration Report on pages 59 to 65, were:
Salaries
Social security costs
Defined contribution pension scheme contributions
The average weekly number of staff employed, excluding Group
Directors, was:
2020
£000
337
40
15
392
6
2019
£000
330
41
13
384
6
31
43
1
51
95
990
188
(180)
86
1
95
(379)
-
(379)
_____________________________________________
7. Tax Expense
The tax charge for the year comprises:
Tax on overseas investment income
Corporation tax
Deferred Tax
Tax charged
2020
£000
39
-
125
164
Restated for
IFRS 16
2019
£000
The tax assessed for the year is lower than the standard rate of corporation tax in the UK.
The differences are explained below:
(Loss)/profit on ordinary activities before taxation
Taxation at 19% (2019 – 19%)
Effects of:
Non-taxable items – fair values and franked
income
Loss (utilised)/carried forward
Under provision
Tax (credited)/charged
Other tax:
Deferred tax
Corporation tax
Other tax impacting other comprehensive
income
(632)
(120)
323
(39)
-
164
-
-
-
Dividends received from UK companies are recognised in the income statement net of their
associated tax credit.
Factors affecting the tax charge in future years The Group’s future tax charge, and effective tax
rate are affected by the latest budget announcement that corporation tax rates will remain at 19%
and the ability of the Group to utilise the accumulated capital losses which at present have been
taken into account when evaluating the Group’s deferred tax liability. Based on current tax
legislation and investment management strategy, the Directors are satisfied that the Group’s
capital losses can be utilised and retain value.
32
London Finance & Investment Group PLC___________
Notes to the financial statements (continued)
8. Dividends
Amounts recognised as distributions to the shareholders of the Company in the year were as
follows:
Final dividend for the prior year ended
30th June
Interim dividend for the current year
ended 30th June
2020
Per Share
2019
Per Share
0.60p
0.55p
0.60p
0.55p
The total dividends paid and to be paid in 2020 and 2019 were £359,000 (1.15p per share) and
£360,000 (1.15p per share) respectively. A final dividend in respect of the year ended 30th June 2020
of 0.60p per share is to be proposed at the AGM to be held on 25th November 2020. These financial
statements do not reflect this dividend.
9. Earnings per share
Reconciliation of headline earnings
Basic and headline (loss)/earnings per share, based on the loss
attributable to the shareholders after tax and non-controlling
interests of £807,000 (2019 – restated profit £908,000) and on
31,207,479 shares issued
Diluted (loss)/earnings per share, based on the loss attributable to
the shareholders after tax and non-controlling interests of £807,000
(2019 – restated profit £908,000) and on 31,207,479 shares issued
plus 80,000 share options granted in 2016.
2020
2019
(2.6)p
2.9p
(2.6)p
2.9p
10. Property, Plant and Equipment
Group
At cost – 1st July 2019
Additions in the year
Disposals in the year
30th June 2020
Depreciation
Balance – 1st July 2019
Charges for the year
Disposals in the year
30th June 2020
Net book amount 30th June 2020
Net book amount 30th June 2019
The office equipment is held by a subsidiary company.
Office
Equipment
£000
82
2
-
84
43
10
-
53
31
39
33
_____________________________________________
11. Operating leases
The Group has an operating lease commitment in respect of an office property entered into in October
2018 which terminates in October 2028. The Company has guaranteed the obligations under this lease.
Right of use asset – Office
At cost – 1st July and 30th June
Adjustment to cost
Depreciation
Balance – 1st July
Charges for the year
Depreciation 30th June
Net book amount 30th June
Lease Liabilities
Current
Non-Current
Total Lease Liabilities
Maturity Analysis
Less than one year
One to five years
More than five years
Amounts recognised in the Consolidated Statement of Total
Comprehensive Income
Interest on lease liabilities
Restated
for IFRS
16
2019
£000
2020
£000
614
6
620
(46)
(62)
(108)
614
-
614
-
(46)
(46)
512
568
2020
2019
Restated
for IFRS
16
£000
49
583
632
£000
52
519
571
52
251
268
49
231
352
31
23
34
London Finance & Investment Group PLC___________
Notes to the financial statements (continued)
12. Investment in Group companies
Operating subsidiaries, incorporated and operating in England and consolidated in these
financial statements.
Principal Activities
Percentage
of Equity
2020
£000
2019
£000
Management services
Investment holding
51.4%
100%
Held by the Company – at cost
City Group PLC
Lonfin Investments Limited
Loan to subsidiary at 1st July
Amount repaid in the year
Loan to subsidiary before
provision at 30th June
Provision
- Loan to subsidiary as at 30th
June
89
-
2,120
(135)
1,985
-
1,985
2,074
89
-
2,494
(374)
2,120)
(1,681)
439)
528)
The address of the registered office of these subsidiaries is 1 Ely Place, London EC1N 6RY.
13.
Investments
Cost at 1st July 2019
Opening unrealised gain/(losses)
Opening valuation as at 1st July 2019
Movements in the year
Purchases
Sales - proceeds
Realised gain on disposal
Net unrealised gains transferred to
realised gain on disposal
Unrealised fair value losses in the year
Closing valuation at 30th June 2020
General
Portfolio
£000
6,208
5,175
11,383
163
(966)
633
(565)
(700)
9,948
Strategic Holdings
Finsbury
Western
Selection Food Group
£000
£000
6,159
(2,583)
3,576
-
-
-
-
(825)
2,751
1,723
2,297
4,020
-
-
-
-
(480)
3,540
Total
£000
14,090
4,889
18,979
163
(966)
633
(565)
(2,005)
16,239
35
_____________________________________________
Cost at 1st July 2018
Cost at 1st July 2018
Opening unrealised gain/(losses)
Opening valuation as at 1st July 2018
Movements in the year
Purchases
Sales - proceeds
Realised gain on disposal
Net unrealised gains transferred to
realised gain on disposal
Unrealised fair value gains/(losses) in
the year
Closing valuation at 30th June 2019
Cost at 30th June 2020
Unrealised gain/(losses) at 30th June
Closing valuation at 30th June 2020
General
Portfolio
£000
6,256
4,420
10,676
611
(667)
7
8
748
11,383
6,038
3,910
9,948
Strategic Holdings
Western
Selection
£000
6,159
(2,229)
3,930
Finsbury
Food
Group
£000
1,723
4,997
6,720
-
-
-
-
-
-
-
-
Total
£000
14,138
7,188
21,326
611
(667)
7
8
(354)
3,576
(2,700)
4,020
(2,306)
18,979
6,159
(3,408)
2,751
1,723
1,817
3,540
13,920
2,319
16,239
Western Selection PLC, a subsidiary undertaking, is traded on the Aquis Growth Market and is
incorporated and operates in the UK with a financial year end of 30th June.
At 30th June 2020 and 30th June 2019, Western had 17,949,872 ordinary shares of 40p each in issue,
of which 7,860,515 shares (43.8%) are held by the Company’s wholly owned subsidiary, Lonfin
Investments Limited.
Extracts from Western’s unaudited results are as follows:
(Loss)/Profit after tax
Non-current assets
Current assets
Liabilities within one year
Capital
Reserves
Share Premium account
Capital Reserve account
Net asset value per share
Value of investment in Western at Net asset value per share
Middle market price per share on 30th June
Value of investment in Western at market value
2020
£000
(180)
5,752
2,502
(127)
7,180
2,654
3
45p
3,560
35p
2,751
2019
£000
(2,611)
8,434
3,115
(123)
7,180
2,654
3
64p
5,005
45.5p
3,576
36
London Finance & Investment Group PLC___________
Notes to the financial statements (continued)
14. Trade and other receivables
Trade debtors
Other debtors
Prepayments and accrued income
15. Trade and other payables
Group companies
Other taxes
Other creditors
Trade creditors
Accruals
Derivative financial instrument
16. Borrowings
Bank revolving credit facility
Group
Company
2020
£000
124
13
29
166
2019
£000
129
25
40
194
2020
£000
-
-
16
16
2019
£000
-
5
18
23
Group
Company
Restated
for IFRS
16
2019
£000
-
25
92
18
78
19
232
2020
£000
-
-
92
10
86
37
225
2020
£000
55
-
-
5
35
37
132
2019
£000
60
-
5
9
38
19
131
Group
2020
£000
-
2019
£000
400
Company
2020
£000
-
2019
£000
400
The Group has not drawn down on its revolving credit facility with Coutts & Co. The revolving credit
facility incurs interest at the rate of 2.75% per annum above the Bank’s base rate and is presented as a
current liability. The facility is secured by a charge by Coutts & Co over the General Portfolio.
The Group also has an interest rate swap from Coutts & Co to minimise the impact of possible interest
rate fluctuations. The fair value of the interest rate swap as at 30th June 2020 is a liability of £37,000,
and as it is not material, it is presented in Trade and other Payables, Note 15, as a Derivative financial
instrument.
37
_____________________________________________
17. Deferred taxation
The Group has provided £520,000 in respect of potential taxation on unrealised investment gains (2019
- £395,000). This is after taking into account available tax losses of £223,000 (2019: £562,000).
Balance at 1st July
Profit or Loss
Other Comprehensive Income
Balance at 30th June
Group
2020
£000
395
125
-
520
Group Company Company
2019
2020
£000
£000
343
52
-
395
2019
£000
722
52
(379)
395
395
125
-
520
Deferred tax has been provided at a weighted average of 19% (2019: 19%).
18. Share Capital and Reserves
Allotted, issued and fully paid ordinary shares
of 5p each
31,207,479 at 1st July 2019 and 30th June
2020
Company and Group
2020
£000
2019
£000
1,560
1,560
The Group and the Company’s capital comprises its shareholders’ equity. Our objective is to manage
capital in a manner that enables the continued payment of dividends to be achieved.
The following describes the nature and purpose of each reserve within shareholders’ equity: -
Ordinary share capital
Share premium
Unrealised profits and losses
on investments
Share of retained realised profits
and losses of subsidiaries
Description and purpose
Nominal value of issued share capital.
Amount subscribed for share capital in excess of
nominal value, less issue expenses.
Cumulative unrealised gains and losses on investments.
The Group’s share of cumulative undistributed post-
acquisition gains and losses of subsidiaries recognised
in the income statement.
Company’s retained realised profits Realised profits of the Group and Company less realised
losses and unrealised losses other than on investments.
and losses
The balances and movements on each of the above reserves are disclosed in the Consolidated and
Company Statement of Financial Positions on pages 21 and 22 and the Consolidated Statement of
Changes in Shareholders’ Equity on page 25.
38
London Finance & Investment Group PLC___________
Notes to the financial statements (continued)
18. Share Capital and Reserves (continued)
Share Options
The Group has had two long-term incentive plans established to incentivise full-time employees and
directors of City Group and to recognise outstanding efforts or achievements, or otherwise to attract,
motivate or retain staff: The Group’s Unapproved Employee Benefit Scheme (which terminated on 29th
September 2019) and a more recent scheme, the Group’s Company Share Option Plan.
On 29th February 2016 options over 80,000 ordinary shares in the Company, with an exercise price of
37.5p per share, were granted under the rules of the Group’s Company Share Option Plan. The options
granted may be exercised no later than the tenth anniversary of the date of grant and had not been
exercised as at 30th June 2020. The fair value of these options at the date of grant was estimated using
the Black-Scholes model to be £9,000 and, as this is not material, no expense has been booked for
these share options.
19. 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 disclosed in Note 6 and in the Directors’ Remuneration Report on pages 60 to 66.
20. Reconciliation of consolidated net cash flow to movement in net debt
Group
2019/2020
Cash at bank
Borrowings (Coutts)
Lease liability
Net Cash/(Debt)
2018/2019
Cash at bank
Borrowings (Coutts)
Lease liability
Net Debt
At start
of year
£000
240
(400)
(632)
(792)
Non-cash
Cash
Flow transactions
£000
£000
-
29
-
400
80
(19)
509
(19)
At end
of year
£000
269
-
(571)
(302)
304
(325)
-
(21)
(64)
(75)
23
(116)
-
-
(655)
(655)
240
(400)
(632)
(792)
21. Financial Instruments
Set out below is 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 Directors monitor
its performance against these objectives on a continuous basis and through bi-monthly reports of the
investment’s portfolio and cash position.
39
_____________________________________________
The categories of financial instruments used by the Group to achieve its objectives as set out in the
Directors’ Report are:
Financial assets
At fair value through Other comprehensive income
Non-current investments (strategic investments)
At fair value through profit or loss
Current asset investments (general portfolio)
Loans and receivables at amortised costs
Trade and other receivables
Cash at bank
Financial liabilities
At amortised costs
Trade and other payables (including corporation tax)
Lease liabilities
Borrowings
At fair value through profit or loss
Derivative financial instrument
2020 Restated
for IFRS
16
2019
£000
£000
6,291
7,596
9,948
11,383
166
269
188
571
-
194
240
213
632
400
37
19
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 3.25% (2019 – 3.25%) and on
deposits was nil. The sensitivity of the Group to a 1% change in interest rates would have been
£9,600 in the current year (2019 – £10,600).
In order to minimise the impact from possible interest rate fluctuations the Company entered into
an Interest rate swap agreement with Coutts & Co on 1st October 2018. The fair value of the
Interest rate swap, a derivative financial instrument as at 30th June 2020 is a liability of £37,000
(2019 - £19,100).
The Group’s principal financial assets are its investment portfolios. The investment portfolios
consist of equity investments, for which an interest rate profile is not relevant. Interest is not
charged on trade and other receivables nor incurred on trade and other payables.
Currency Exposures
The table below shows the Group’s currency exposures. Such exposures comprise the monetary
assets, at fair values, that are not traded in Sterling.
Currency
Euro
Swiss Franc
US Dollar
Danish kroner
Swedish kroner
2020
£000
3,173
1,523
2,238
179
445
7,558
2019
£000
3,510
1,664
2,470
208
525
8,377
40
London Finance & Investment Group PLC___________
Notes to the financial statements (continued)
21. Financial Instruments (continued)
The sensitivity to a 1%
fair values as set out by
change in the sterling exchange rate would be to increase or decrease the
£74,829 in aggregate (2019 - £83,770).
Liquidity Risk
The Group’s policy is that its borrowings should be flexible and available over the medium term.
The Group has a loan facility of £1,900,000 which expires on 30th September 2022, none of which
was drawn down at 30th June 2020. 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 the shares of Western and Finsbury.
The Group 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
such investments must have an aggregate fair value of at least 167% of borrowings at any point in
time.
Market Risk
The Group is exposed to market risk through the equity investments in other companies. The
Group 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 Group’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 £62,000 (2019 - £76,000) and a corresponding
decrease in the unrealised profits reserve. A 1% increase, would, on the same basis, increase fair
values and increase the unrealised profits reserve. The same percentage increase/decrease in the
current asset investments would increase/decrease carrying values by £99,500 (2019 - £113,800)
and unrealised profits reserve (or earnings where a decline was below cost) by an equal amount.
The Directors consider 1% to be a basis for the sensitivity analysis due to the diversified spread of
investments over a range of liquid markets.
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.
Market value has been used for the valuation of Western despite the low liquidity of this investment
because shares have traded at a relatively stable price with low volatility, and there is no better
indicator available for fair value.
The fair value of short-term deposits, borrowings and trade and other receivables and payables
approximates to the carrying amount because of the short maturity of these instruments.
41
_____________________________________________
Credit risk
No concentration of credit risk exists in the Group’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.
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 2020,
is disclosed below:
Company
Lonfin Investments Limited
City Group PLC
Western Selection PLC*
Country
United Kingdom
United Kingdom
United Kingdom
% ownership
100%
51.4%
43.8%
*No individual investor has control of the company
42
London Finance & Investment Group PLC___________
Directors’ Report
The Directors present their Report for the year ended 30th June 2020. Much of the information
previously provided as part of the Directors’ Report is now required, under company law, to be
presented as part of the Strategic Report which is set out on pages 4 to 11.
This Directors’ Report includes the information required to be included under the Companies Act or,
where provided elsewhere, an appropriate cross-reference is given. The Corporate Governance
Statement, approved by the Board, is provided on pages 49 to 54 and is incorporated by reference
herein.
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, significant events after the financial year end, 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.
Investment Policy
The Group’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 Group’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 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 30 and
40 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” and “other” investments immediately following such investment, with the
balance of the portfolio, to be in the “general portfolio”. “Other investments” will be limited to 50% of the
overall value of the investment portfolio, measured immediately following such investment. No one
“strategic investment” or “other investment” will represent more than 30% and 50% respectively of the
value of all investments immediately following the making of 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 Group’s gearing is limited at or below 70% of the total value of investments.
43
_____________________________________________
Going Concern
Covid-19 was declared a global pandemic on 11th March 2020 and has had a profound personal, social
and financial impact around the world. On the 23rd March 2020 the United Kingdom went into lockdown
which impacted all areas of the economy. Consequently, there have been large fluctuations on stock
markets in both the United Kingdom and globally, and stock market indices have recovered
substantially since their lows in March 2020. The long term effect is likely to be on dividends cancelled,
deferred, or re-based, and on increased volatility.
At the time of writing the pandemic continues to have an effect on both the United Kingdom and global
economies and, with the potential for new waves of the pandemic occurring, it is not possible to say with
any certainty when the effects of the pandemic may dissipate substantially.
In response to these uncertainties the Board has sought to minimise the risks to the Group and are
actively monitoring the performance of the Group’s investments. Due to the relatively low cost of
operating the Group compared to the high value of assets held and that the Group has access to funds
that will allow the Group and Parent Company to continue trading, the Board is satisfied that the Group
shall continue to be able to meet its financial obligations as they fall due both in the short and longer
term. The board will continue to seek out investment opportunities that will enhance the financial
performance of the Group.
The Board continues to adopt the going concern basis of accounting in the preparation of these
financial statements.
Risk Management and Principal Risks
A description of the principal risks which arise from the Group’s financial instruments is set out in the
Strategic Report on pages 8 and 9 and in Note 21 to the Financial Statements (Financial Instruments)
on pages 39 to 41.
Viability Statement
In accordance with the provisions of the UK Corporate Governance Code, the Board has assessed the
viability of the Group. The Group is a long-term investor and the Board believes it is appropriate to as-
sess the Group’s viability over a five-year period which reflects the Board’s long-term investment ap-
proach. The Board believes this five-year period reflects a proper balance between the long-term hori-
zon and the inherent uncertainties of looking to the future.
In assessing the viability of the Group, the Board has carried out a robust assessment of the following
factors:
the principal risks and uncertainties facing the Group as set out in the Strategic Report on
pages 8 and 9;
the potential operational and financial impacts of these risks and uncertainties in severe but
plausible scenarios together with the effectiveness of any mitigating actions;
the Group’s current position and strategy;
the liquidity of the Group’s Investment Portfolio; and
the Board’s risk appetite.
The Board has also considered such matters as significant economic or stock market volatility, a sub-
stantial reduction in the liquidity of the portfolio or changes in investor sentiment, all of which could have
an impact on the Group’s prospects and viability in the future.
Taking into account all of these factors, the Group’s current position and the potential impact of the
principal risks and uncertainties faced by the Group, the Board has concluded that it has a reasonable
expectation that the Group will be able to continue in operation and meet its liabilities as they fall due
over the five-year period to 30th June 2025.
44
London Finance & Investment Group PLC___________
Directors’ Report (continued)
Directors’ and Directors’ Interests
A list of the present directors of the Company is shown on page 1.
A list of all the directors who served during the year and their beneficial interests (and those of their
connected persons) in the Company’s ordinary shares as at 30th June 2019 and 2020 is set out below:
D.C. Marshall *
F.W.A. Lucas †
J.H. Maxwell
E.J. Beale
W.H. Marshall *
30th June 2020
No. of Ordinary Shares
12,890,693
162,500
65,000
-
12,890,693
30th June 2019
No. of Ordinary Shares
12,890,693
162,500
65,000
-
12,890,693
*
These holdings arise as the individuals concerned are/were trustees and/or directors of entities that hold/held ordinary
shares in the Company. The interest of Mr. W.H. Marshall, overlaps with the interest of Mr. D.C. Marshall. Neither Mr
†
Of this figure, Dr. F.W.A. Lucas owns 80,000 ordinary shares personally and 82,500 ordinary shares are owned by
Loeb Aron & Company Ltd, of which Dr. F.W.A. Lucas is a director and shareholder.
On 29th February 2016, Mr E.J. Beale, being an eligible employee under the rules of the London
Finance & Investment Group Company Share Option Plan, was granted options over 80,000 ordinary
shares with an exercise price of 37.5p per share. The options granted may be exercised no later than
the tenth anniversary of the date of grant.
There have been no changes in directors' share interests between 1st July 2020 and the date of this
report.
Subject to the Company’s Articles of Association, 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, as amended, now require all the directors of the Company to offer themselves
for re-election on an annual basis. Accordingly, this year, Mr D.C. Marshall, Dr F.W.A. Lucas, Mr J.H.
Maxwell, Mr E.J. Beale and Mr W. H. Marshall will retire and, being eligible, offer themselves for re-
election as directors at the AGM on 25th November 2020.
Substantial Interests
In addition to the directors’ shareholdings shown above, as at 30th June 2020, the Company had been
notified under Disclosure and Transparency Rule 5 of the following significant holdings of voting rights
in its shares.
Identity of person or group
Lynchwood Nominees Limited
W.T. Lamb Investments Limited
Winterflood Client Nominees Limited
No. of Ordinary
Shares
14,928,832
4,629,000
2,174,524
Percentage of issued
Ordinary Share capital
47.8%
14.8%
7.0%
No changes to the significant holdings set out above have been notified to the Company between 1st
July 2020 and the date of this report.
45
_____________________________________________
Independent Auditor
The respective responsibilities of the Directors and the Independent Auditor, PKF Littlejohn LLP, in
connection with the financial statements appear on pages 14 to 19.
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 Independent Auditor for the purposes of their audit and to establish that the Independent
Auditor is aware of that information. The Directors are not aware of any relevant audit information of
which the Independent Auditor are is unaware.
At the Company’s forthcoming AGM to be held on 25h November 2020 a resolution will be proposed
that PKF Littlejohn LLP be re-appointed as the Company’s Independent Auditor following the AGM.
Corporate Governance
Information on the Company’s corporate governance can be found in the Corporate Governance
Statement on pages 50 to 55
The Company’s Articles of Association may only be amended by special resolution and are available on
the Company’s website at www.city-group.com/london-finance-investment-group.plc
Annual General Meeting (AGM)
The Notice of the AGM, to be held on 25th November 2020, can be found on pages 67 to 71 and sets
out the business to be considered at the meeting. Resolutions 1 to 11 will be proposed as Ordinary
Resolutions and Resolution 12 will be proposed as a Special Resolution. Certain elements of the
business relating to these Resolutions are explained below:
Resolution 3
Directors’ Remuneration Report
The annual report on Directors’ Remuneration, as set out in the Directors’ Remuneration Report on
pages 60 to 67 provides information on the Directors’ remuneration. Resolution 4 proposes the approval
of the Directors’ Remuneration Report, other than the part containing the Directors’ Remuneration
Policy, which will be the subject of Resolution 3.
Resolutions 4, 5, 6, 7 and 8
Re-election of Directors
The Directors, David Marshall, Dr Frank Lucas, John Maxwell, Edward Beale and Warwick Marshall,
are subject to annual re-election. Accordingly, each of these Directors will retire at the AGM on 25th
November 2020 and each offers himself for re-election as a director of the Company. The Board has
confirmed, following a performance review of the directors and the Chairman, that each of the directors,
subject to re-election, continues to perform effectively and demonstrates commitment to his role.
Further information relating to their experience and background can be found on page 1.
Resolution 9
Re-appointment of the Independent Auditor
It is proposed that PKF Littlejohn LLP be re-appointed as the Company’s Independent Auditor to
continue in office following the AGM on 25th November 2020.
Resolution 10
Allotment of share capital
Resolution 11 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 AGM in 2020. 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.
46
London Finance & Investment Group PLC___________
Directors’ Report (continued)
Annual General Meeting (AGM) (continued)
Resolution 11
Disapplication of pre-emption rights
Resolution 12 will empower the directors to allot ordinary shares for cash, pursuant to the authority
granted by Resolution 11, 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 17th September 2020 (being the latest practicable date prior to
publication of this report). The power given by this resolution shall expire upon the expiry of the
authority conferred by Resolution 11 set out above, Although the directors will be entitled to make offers
or agreements before the expiry of that power which would or might require equity securities to be
allotted.
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.
Recommendation
The Board believes that the approval of Resolutions 1 to 12 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 12 as the directors
intend to do in respect of their own beneficial holdings which as at 17th September 2020 (being the
latest practicable date prior to publication of this report) amount in aggregate to 145,000 ordinary
shares, representing approximately 0.46% of the ordinary shares currently in issue.
Relationship Agreement
In compliance with the Listing Rules the Company has entered into a Relationship Agreement with
David 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 2020 and so
far as the Company is aware, the controlling shareholder has complied with the provisions and also the
procurement obligation contained in the Relationship Agreement.
Material Agreements
There are no agreements which the Company is party to that might affect its control following a
takeover bid; and there are no agreements between the Company and its directors concerning
compensation for loss of office.
Other than the Relationship Agreement referred to above, the Board is not aware of any contractual
agreements which ought to be disclosed in the Directors’ Report.
Directors’ Service Contracts and Letters of Appointment
None of the Directors has a service contract with the Company. Each of the Directors has received a
Letter of Appointment from the Company in respect of his services under the terms of the Company’s
Articles of Association.
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.
47
_____________________________________________
Political and Charitable Donations
No political or charitable donations have been made during this last financial year.
Environmental, Social and Human Rights Issues
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.
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 2020, the Group
purchased electricity equating to a carbon dioxide equivalent of 10 tonnes (1 tCO2e/employee) (2019 –
10 tonnes).
By Order of the Board
City Group PLC
Company Secretary
18 September 2020
48
London Finance & Investment Group PLC___________
Corporate Governance Statement
Corporate Governance Policy
Corporate Governance is the process by which companies are controlled and directed to achieve the
objectives of the organisation. Key to the 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”), updated from time to time by the Financial Reporting Council (FRC),
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 of the Code and confirm that the Company complies with the Code’s
provisions or explain why it does not. In July 2018, the Code’s Principles and Provisions were revised
further by the FRC to simplify the Code and enhance requirements for governance structures and
processes. The 2018 Code Principles and Provisions apply to companies whose accounting periods
commence on or after 1st January 2019. Accordingly, for the year ended 30 th June 2020, the Company
has applied the principles of the 2018 UK Corporate Governance Code and confirms its compliance
with those principles or has duly explained any non-compliance.
The JSE (Johannesburg Stock Exchange) requires that JSE listed companies report on their
compliance with the Code of Corporate Practices and Conduct (‘King Code’) contained in the King
Report on Corporate Governance. Currently, all JSE listed companies are required to comply with the
disclosure requirements and principles of the King Code as set out the King IV Report. As the
Company’s primary listing is on the Main Market of the London Stock Exchange and, as such, is
required to comply with the Code, the Company is not required to comply with the King Code as well.
Compliance
This Corporate Governance Statement describes how the Company applies the principles set out in
2018 UK Corporate Governance Code (the “Code”). The Company has been in full compliance with the
Code throughout the year ended 30th June 2020.
Composition of the Board
The Board comprises the Chairman, David Marshall, Senior Independent Non-Executive Director, John
Maxwell, Dr Frank Lucas, Edward Beale and Warwick Marshall. All of the Directors are Non-Executive
Directors.
Independence of the Chairman
The board has reviewed the independence of the Chairman in respect of David Marshall having served
more than nine years on the board. The board consider David Marshall to be an effective Chairman who
continues to use independent judgement in his role and brings a wealth of experience to the role. The
Board are therefore are satisfied that David Marshall continue in hie role as Chairman.
Independence of the Directors
The Board has reviewed the independence of the non-executive directors and John Maxwell and Dr
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 Board has concluded that John Maxwell and Dr 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 Dr Frank Lucas is a director of Loeb Aron & Company Limited which
acted as Nex Exchange Growth Market (Now Aquis Growth Market) corporate adviser to Western until
June 2018.
49
_____________________________________________
Conflicts of Interest
The Articles of Association reflect the codification of certain directors’ duties arising from the Companies
Act 2006 and in particular the duty for directors to avoid conflicts of interest. The Board has a process in
order for Directors to report conflicts of interest or potential conflicts of interest.
All Directors are required to notify the Company Secretary, City Group, of any situations, or potential
situations where they consider that they have or may have a direct or indirect interest or duty that
conflicts or may possibly conflict with the interests of the Company.
Appointment, election and re-election of Directors
Responsibility for the process of appointment of the directors rests with the Board acting on the
recommendations of the Nomination Committee. The removal of directors is generally a Board decision.
Subject to the Company’s Articles of Association, the appointment or removal of directors is ultimately
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.
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 all members
of the Board, other than newly appointed Directors who are subject to election, are subject to annual re-
election and there is, therefore, no requirement at the forthcoming AGM or in the future for any directors
to retire by rotation.
Resolutions approving the re-election and election of each of the Directors will be proposed to
Shareholders at the forthcoming AGM. The Board has reviewed the skills and experience of each and
supports their re-election or election, as the case may be.
As a long-term investment company it is appropriate for the Directors to serve on the Board for more
than a single term, subject to continuing satisfactory performance. Given the small size of the Board,
this results in infrequent changes to the composition of the Board.
Workings of the Board
The Board 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.
As an investment company, all matters and all decisions are reserved for the Board except for any
matter specifically delegated to a Board committee or any operational decisions of the Company’s
subsidiary undertakings.
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.
Board Operation
As an investment company, the Company’s Board is comprised of Non-Executive directors. It has no
Chief Executive or any other executive directors. The Non-Executive Chairman leads the Board and
ensures that it deals with all aspects of its role. He is responsible for the effective performance of the
Board through control of the Board’s agenda and the 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, subject to constraints imposed as a result of covid-19
50
London Finance & Investment Group PLC___________
Corporate Governance Statement (continued)
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.
As an investment company, all matters and all decisions are reserved for the Board except for any
matter specifically delegated to a Board committee or any operational decisions of the Company’s
subsidiary undertakings.
A representative of City Group, the Company Secretary, attends all Board meetings to record
proceedings and is available at all times 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 and the provision of
management, regulatory and financial information. Management reports including cash movements,
portfolio movements and valuations are regularly circulated to all Directors for review.
The Board met on six occasions during the year; there were also four Audit Committee meetings, one
Remuneration Committee meeting and one Nomination Committee meeting during the year. All such
meetings were quorate and followed a formal agenda.
Attendance at the Board meetings and the Audit, Remuneration and Nomination Committee meetings
during the year is shown in the following table:
Board
Audit
Remuneration Nomination
Committee Committee Committee
No. of meetings in the
year to 30th June 2020
D.C. Marshall
F.W.A. Lucas
J.H. Maxwell
E.J. Beale
W. H. Marshall
6
5
5
6
6
3
The Board’s Committees
The Board now has four committees:
4
-
3
4
1
-
-
1
1
-
-
1
-
1
1
-
The Investment Committee is chaired by David Marshall and its other member is Edward Beale. The
Nomination Committee is chaired by John Maxwell and its other member is Dr Frank Lucas. The
Audit Committee is chaired by Dr Frank Lucas and its other member is John Maxwell. Both members
of the Audit Committee have recent and relevant financial experience. The Remuneration Committee
is chaired by John Maxwell and its other member is Dr Frank Lucas.
Committee Meetings are held independently of Board meetings and invitations to attend are extended
by the committee chairmen to other directors and the Group’s advisers as appropriate.
Investment Committee
The Investment Committee takes responsibility, between Board Meetings, for the investment decisions
relating to the Company’s General Portfolio which consists of a broad range of investments in major
USA, UK and other European companies which provides a diversified exposure to international equity
markets. All investment decisions are then implemented on the Company’s behalf by City Group which
also carries out required valuation and accounting work.
51
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Audit Committee
The Audit Committee has a number of specific responsibilities including reviewing the Group’s financial
statements and supporting documentation and all audit related matters.
A separate report from the Audit Committee is set out on pages 55 to 58.
Nomination Committee
The Nomination Committee, which meets from time to time, 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.
Remuneration Committee
The Remuneration Committee reviews, determines and recommends to the Board the future
Remuneration Policy for the Chairman of the Board and the Directors. The Remuneration Committee
will consider base fees and, where appropriate, salaries, annual and long-term incentive entitlements
and awards and, where appropriate, pension arrangements. In determining the remuneration policy for
the Board, the Remuneration Committee takes into account many factors having regard to the
requirements of the Code.
The aggregate remuneration of directors is limited by the Company’s Articles of Association and this
aggregate amount and the Company’s Remuneration Policy can only be changed by the Company in
General Meeting. The current rates of remuneration are set out in detail in the Directors’ Remuneration
Report on pages 62 to 64. 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 and Edward Beale. No director is involved in the determination of his own pay.
New Directors’ Induction
New directors receive an induction programme which includes legal and regulatory responsibilities,
information on the Group’s operations and investment company industry matters.
Performance Evaluation
The Board evaluates its own performance and that of its committees and its Chairman and individual
Directors through the annual completion and review of questionnaires. All Directors are encouraged to
maintain personal continuing professional education programmes and all Directors are entitled to
receive relevant and appropriate training if required.
The Board is satisfied, having concluded its most recent evaluations, that each Director’s performance
continues to be effective and that each Director remains fully committed to the Company. Furthermore,
the Board is satisfied that its committees, as currently constituted, continue to be effective.
52
London Finance & Investment Group PLC___________
Corporate Governance Statement (continued)
Board Succession and Diversity
In evaluating the performance of the Board and its members, the Board reviews its structure and
whether it has the right mix of relevant skills, diversity and experience for the effective conduct of the
Company’s business.
The Board has set a target of 25% female members for the Company’s Board and female candidates
will be considered on their merits when vacancies arise. There are no female Board members or senior
management members at present.
Internal Control and Risk Management
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 Board, through the 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.
The reporting and review procedures provide assurance to the Board as to the adequacy and
effectiveness of internal controls. The Board recognises 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.
Auditors
The Board, through the Audit Committee, is developing a good working relationship with its Independent
Auditor, PKF Littlejohn LLP, who were appointed at the Annual General Meeting in November 2016.
Shareholder Communications
The Board strives to present a fair, balanced and understandable assessment of the Group’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.
53
_____________________________________________
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. Shareholders are also encouraged,
if they have any questions or enquiries to make contact with the Company at any time during the year
by contacting the Company Secretary, City Group PLC (1 Ely Place, London EC1N 6RY; Tel: 020 7796
9060).
David Marshall
Chairman
18 September 2020
54
London Finance & Investment Group PLC___________
Audit Committee Report
Audit Committee
The members of the Audit Committee (the “Committee”) are Dr Frank Lucas (Chairman) and John
Maxwell. Both members are considered to be independent and neither member has any conflicts of
interest. Both Dr Frank Lucas and John Maxwell have recent and relevant financial experience.
The Committee meets at least twice a year to consider the Group’s financial reporting and reports from
the Company’s Independent Auditor.
The terms of reference for the Committee, which are available on request and on the Company
Secretary’s website, are reviewed and re-assessed on an annual basis.
Responsibilities
The main responsibilities of the Committee are:
to review the half yearly and annual financial statements of the Group, the accounting policies
applied therein and compliance with financial and regulatory reporting requirements.
to assess whether the annual report and financial statements, taken as a whole, is fair,
balanced and understandable and provide the information necessary for Shareholders to
assess the Group’s position and performance, business model and strategy.
to meet with the Independent Auditor to review their proposed audit programme of work and the
findings of the Independent Auditor on completion of their work. The Committee also uses these
meetings as an opportunity to assess the effectiveness of the audit process.
if appropriate, to develop and implement policy on the engagement of the Independent Auditor
to supply non-audit services.
to make recommendations to the Board in relation to the appointment or re-appointment of the
Independent Auditor and to approve their remuneration and the terms of their engagement.
to monitor and review annually the Independent Auditor’s independence, objectivity,
effectiveness, resources and qualification.
to review and monitor the internal control systems and risk management systems (including
non- financial risks) on which the Group is reliant.
to consider annually whether there is a need for the Group to have its own internal audit
function.
to review the arrangements in place whereby management, office and Group secretarial
services are provided to the Group and whereby management and staff may, in confidence,
raise concerns about possible improprieties in matters of financial reporting or other matters
(‘whistleblowing’) and
to report to the Board from time to time on any significant financial reporting issues and the
views and judgements the Committee might have or make in connection with such issues and
in connection with the preparation of the Group’s financial statements.
Audit Committee Activities
The Audit Committee met on four occasions in the year ended 30th June 2020, in August 2019, twice in
September 2019 and in February this year. After the year end, the Committee met in September. In the
course of such meetings the Committee has also met with the rest of the Board and with the Company’s
Independent Auditor, PKF Littlejohn LLP.
55
_____________________________________________
The Audit Committee has undertaken the following activities in the year ended 30th June 2020 in
discharge of its responsibilities:
Financial Statements
In accordance with the provisions of the Code, financial statements issued by the Company need to
comply with the requirement for such statements to be ‘fair, balanced and understandable’. With this in
mind, the Committee reviewed and considered the draft 2020 Annual Report & Financial Statements as
a whole and subsequently made recommendations to the Board and City Group, the Company
Secretary. The Committee considers the revised 2020 Annual Report & Financial Statements to be ‘fair,
balanced and understandable’.
The Group’s 2020 interim results and report were also reviewed and considered by the Committee prior
to publication in February 2020.
Valuations
Listed investments are a significant component of the Group’s investment business and are also a
significant feature in the Group’s financial statements. The Committee has reviewed the Group’s
valuation policy for its investments. All such investments are listed in active stock markets and the
Committee considers that the Group’s General Portfolio Investments are substantially liquid. The
Group’s investments are valued using independent pricing sources, in accordance with the stated
accounting policies and these have been reviewed by the Committee. The Committee also considered
the valuation basis for Strategic Investments, which are quoted on junior UK stock markets to be
appropriate, notwithstanding their illiquidity.
Going concern and viability statements
The Committee assessed whether it was appropriate to prepare the Group’s 2020 Annual Report &
Financial Statements and for the 2020 Interim results and report on a going concern basis and following
such assessments, made recommendations to the Board whose conclusions were included in the
Interim results and report published in February 2020 and are set out in the Directors’ Report on page
44.
The Group’s assets consist substantially of equity shares in companies listed on recognised stock
exchanges and in most circumstances are realisable within a short time-scale. The Committee and the
Board believe it is appropriate to continue to adopt the going concern basis in the preparation of the
financial statements and they consider that the Group has a very low level of costs and has adequate
resources to continue in operational existence for the foreseeable future.
The Committee also assessed the viability of the Group. After reviewing the Group’s Strategic
Investments and General Portfolio investments, its gearing and considering the impact of volatility in
stock markets, currencies and commodities, the Committee was satisfied that the viability statement,
which relates to a period of five years ending 30th June 2025, could be made in the 2020 Annual Report
& Financial Statements for the reasons set out in the Directors’ Report on page 44.
Significant Risks and Issues
The significant accounting issue considered by the Committee during the year in relation to the Group's
financial statements was the valuation of investments particularly with reference to the on-going effects
of Covid-19.
A further significant risk is to ensure the investment portfolio accounted for in the financial statements
reflects ownership of the relevant securities.
The incomplete or inaccurate recognition of income in the financial statements are also risks. Internal
control systems, including reconciliations are in place to ensure income is fully accounted for.
56
London Finance & Investment Group PLC___________
Audit Committee Report (continued)
Internal control
The Board as whole is responsible for the Group’s system of internal control and for reviewing its
effectiveness. The system is designed to manage rather than eliminate the risk of failure to achieve the
Group’s business objectives and can only provide reasonable and not absolute assurance against
material misstatement or loss.
The Committee has also, in the course of the financial year ended 30th June 2020, reviewed the
Group’s internal control processes and is satisfied that no significant areas of weakness have been
identified and that the existing processes and controls are appropriate having regard to the Group’s
investment business.
In particular, the Committee reviews reports from its subsidiary, City Group, to ensure that internal
controls over the Group’s investments are adequate. The Group’s audit includes independent
confirmation of the existence of all investments and the valuation of investments to external price
sources.
Audit process and the Independent Auditor
PKF Littlejohn LLP was appointed as the Company’s new Independent Auditor at the Company’s AGM
in November 2016 and was re-appointed as the Company’s Independent Auditor at the Company’s
AGM in December 2019.
The Committee meets each year with the Independent Auditor. The Company’s Independent Auditor,
PKF Littlejohn LLP, provided a detailed planning report in advance of the annual audit work. The
Committee was able to review PKF Littlejohn LLP’s detailed planning report prior to commencement of
the audit work and, following completion of their audit work, the Committee discussed with PKF
Littlejohn LLP their audit report and findings. In the course of these discussions the Committee was able
to review the level and scope of materiality adopted by PKF Littlejohn LLP in the audit process.
Audit effectiveness
The Committee reviews annually the audit process conducted by PKF Littlejohn LLP and considers its
effectiveness. In the course of its review, the Committee will consider the quality of the PKF Littlejohn
LLP staff, the appropriateness of the audit methodology as applied to the Company’s business activities
and the level of challenge from PKF Littlejohn LLP and the quality of reporting to the Board and the
Committee. As part of its evaluation, the Committee also obtains assurance from PKF Littlejohn LLP on
the quality of its audit work.
Non-audit work
In order to safeguard the Independent Auditor’s independence and objectivity, City Group, the Company
Secretary, maintains a schedule of specific non-audit work activities which are carried out independently
of the Independent Auditor. City Group has confirmed to the Committee that PKF Littlejohn LLP has not
carried out any non-audit work activities on behalf of the Company in the year ended 30th June 2020 or
since the year-end.
Re-appointment of PKF Littlejohn LLP as Independent Auditor
PKF Littlejohn LLP was re-appointed as the Company’s Independent Auditor at last year’s AGM. The
Committee has concluded that PKF Littlejohn LLP have provided an effective audit and the Committee
has recommended to the Board the re-appointment of PKF Littlejohn LLP as the Group’s Independent
Auditor at the Company’s forthcoming AGM.
57
_____________________________________________
Relations with Shareholders
The Board places great importance on communication with shareholders and up to date information can
be obtained on the Group through City Group, the Company Secretary. The Group’s Annual Report &
Financial Statements is sent to shareholders and the Annual Report & Financial Statements and the
Company’s Interim results and report can be downloaded from City Group’s website www.city-
group.com/london-finance-investment-group-plc
Due to Covid-19 restrictions, the Company will hold a closed AGM to ensure compliance with the local
requirements as set out by the UK Government. Shareholders are encouraged to submit their proxy
forms by the deadline of 12.30 p.m. (13.30 p.m. South Africa time) on 23 November 2020 to ensure
their votes are counted and to email any questions that they may have to mail@city-group.com.
Dr Frank Lucas
Chairman of the Audit Committee
18 September 2020
58
London Finance & Investment Group PLC___________
Directors’ Remuneration Report
Remuneration Committee
The members of the Committee” are John Maxwell (Chairman) and Dr Frank Lucas. Both members are
considered to be independent and neither member has any conflicts of interest. Both John Maxwell and
Dr Frank Lucas have recent and relevant financial experience.
The Committee meets at least once a year to consider the remuneration arrangements for the Directors
and senior managers. The Committee will ensure that the arrangements are aligned to the Company’s
strategy, the aim of which is to promote long term sustainable success and generate growth in
shareholder value in real terms over the medium to long term whilst maintaining a progressive dividend
policy. The Committee reviews, considers and makes recommendations on changes to the directors’
remuneration policy in the future.
The terms of reference for the Committee, which are available on request and on the Company
Secretary’s website, are reviewed and re-assessed on an annual basis.
Key Objectives of the Committee
The key objectives of the Committee in reviewing the Company’s Remuneration Policy and making
recommendations to the Board as to changes in the policy are as follows:
remuneration for the current Directors, all of whom are Non-Executive Directors, should be
competitive, but not excessive, in order to motivate and retain its Directors and grow the Group
successfully
remuneration packages for new Non-Executive Directors or Executive Directors, should the
appointment of Executive Directors be considered appropriate, should be competitive but not
excessive, in order to attract, motivate and retain such Directors and grow the Group
successfully
remuneration of Executive Directors, if the appointment of Executive Directors is considered
appropriate, should be linked to the long-term performance of the Group’s business
any performance related remuneration for Executive Directors should be set so as to align the
interests of the Executive Directors with those of the Shareholders
In determining remuneration arrangements for the Directors, the Committee will also take into
consideration the pay and employment conditions in other parts of the Group
The Form of the Directors’ Remuneration Report
The Directors’ Remuneration 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.
The Directors’ Remuneration Report comprises three sections:
a remuneration policy, which sets out the framework for remuneration arrangements for the
Directors; a resolution approving this policy will be put to shareholders at the Company’s AGM
on 25th November 2020;
an annual report on Directors’ remuneration, which sets out all payments made to Directors
during the year; and
an annual statement by the Chairman of the Remuneration Committee, John Maxwell.
59
_____________________________________________
Directors’ Remuneration Policy
The current remuneration policy for the Directors was approved by shareholders at the Company’s
AGM held in November 2019. The Company’s Remuneration Policy needs to be put to a binding
shareholders’ vote at least once every three years.
The Committee has reviewed the Company’s Remuneration Policy and has considered whether
changes to the policy should be made at this time. A new policy shall not be required to be presented to
the shareholders until the AGM in 2022 unless the Committee consider it appropriate to propose
revisions to the policy before this date.
The Directors’ Remuneration Policy is as follows:
Salaries and fees
The Company’s Board has no Executive Directors and is entirely comprised of Non-Executive Directors.
The Company’s Remuneration Policy at present is to pay fixed fees to these directors. No salaries are
payable and there is no variable element of pay for the Directors.
The level of Directors’ fees is set with a view to attract, motivate and retain talented individuals. The
maximum amount of a Director’s fee will be set by the Board from time to time, following
recommendations from the Committee, and increases will not be higher than inflation unless this can be
justified having regard to the performance of the Group or additional responsibilities taken on by
Directors.
The Group’s policy for future increases in Directors’ fees is similar to the policy for increases in salaries
to City Group employees but in the case of Directors’ fees the reviews will be performed every 3-5
years, with a review having taken place in July 2018. The next review is expected to take place in May
2021.
Long term Incentive Schemes
Save for the Group’s Company Share Option Plan, the Group has no other long-term incentive
schemes. The Group has no plans to adopt any further long-term incentive schemes in the future,
although the Board will keep such schemes under review in the light of changing legislation.
The Group’s Company Share Option Plan was also established, in September 2006, to incentivise full-
time employees and directors of City Group and to recognise outstanding efforts or achievements, or
otherwise to attract, motivate or retain staff.
Edward Beale has been the only Director to receive option awards. Edward Beale was awarded options
on 29th February 2016 over 80,000 shares, prior to his appointment to the Board, and these options
may be exercised at any time prior to 1st March 2026.
Bonuses or other Discretionary Payments
The Company does not make bonus payments or other discretionary payments to any of the Directors.
Part of the profits of City Group (currently 50%) are allocated to a staff bonus pool.
Pensions and other Benefits
The Directors are covered by the Company’s directors’ and officers’ liability insurance cover which is
renewed annually. Other than this insurance cover, no other benefits, such as pension contributions,
private medical health cover, death in service insurance, life insurance or company cars are provided
for the Directors.
60
London Finance & Investment Group PLC___________
Directors’ Remuneration Report (continued)
Remuneration on Appointment to the Board
It is anticipated that new Non-Executive Directors will be remunerated on a similar basis to existing
Directors. No additional payments will be made to such Directors.
The Company has no Executive Directors at present and there is no intention in the immediate future to
appoint any Executive Directors. However, should it be appropriate in the future to recruit an Executive
Director, the remuneration package offered 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 incentive arrangements proposed to be granted on appointment will be
subject to Shareholder approval.
The remuneration package offered in respect of an Executive Director could include fixed and variable
bonuses, pension contributions, private medical health cover, death in service insurance, travel and
other allowances as well as a basic salary.
Loss of Office
The Chairman and the Directors have no entitlement to compensation for loss of office as Directors of
the Company.
City Group
The remuneration paid to the directors and employees of the Company's subsidiary, City Group, in the
year ended 30th June 2020 was reviewed and considered by the board of City Group, which includes
David Marshall and Edward Beale.
Performance Graph
The above graph shows Lonfin's Total Shareholder Return (TSR) performance compared to the TSR of
the FTSE Eurofirst 100 index over the past five years. The Group’s main activity is that of an investment
Group and the Board believes that because the Group’s General Portfolio concentrates on FTSE 100
companies, or European equivalent, this index is best suited as the comparator index. The Group 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 three-month
basis in order to reduce the volatility associated with spot prices.
61
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Annual Report on Directors’ Remuneration
The following report sets out details of remuneration paid to the Chairman and the Directors in the
financial year ended 30th June 2020 and describes how the Company’s Remuneration Policy will be
implemented for the year ending 30th June 2020.
Chairman’s Remuneration
As the Company has no Chief Executive Officer the table below shows the total remuneration of the
Chairman, David Marshall, for the 5 years to 30th June 2020 (all of which have been audited) by way of
comparison with the total return to shareholders illustrated in the Performance Graph set out above.
The table and related information below, which have been audited, also shows the total remuneration
expected to be paid to the Chairman in the year ending 30th June 2020.
The Chairman’s remuneration is by way of fixed fees only. He receives no variable pay element or
equity incentives or taxable benefits.
David Marshall, Non-Executive Chairman,
Total fees paid (audited)
Year ended 30th June
2016
2017
2018
2019
2020
Year ending 30th June
2021
£
18,000
18,000
18,000
20,000
20,000
Total fees expected to be paid
20,000
The Chairman, David Marshall, cedes his Director’s fees to Marshall Monteagle PLC. The Chairman
receives no other payment or benefits from the Company.
Directors’ Remuneration
The Company’s Board is entirely comprised of Non-Executive Directors and the Company’s
Remuneration Policy at present is to pay fixed fees to these directors. No salaries are payable and
there is no variable element of pay for the Directors.
The table and related information set out below, which have been audited, shows the fees paid to David
Marshall, the Chairman, and the Directors, in the year ended 30th June 2020, compared with the fees
paid to the Chairman and the Directors in the previous year. The table also shows the fees expected to
be paid to the Chairman and the Directors in the year ending 30th June 2021.
Non-Executive Directors
Total fees payable
Year ending
30th June 2021
Total fees paid (audited)
Year ended
30th June 2020
Year ended
30th June 2019
Mr. D. C. Marshall
Mr. J.H. Maxwell
Dr. F.W.A. Lucas
Mr E.J. Beale
Mr W.H. Marshall
£
20,000
14,000
14,000
14,000
14,000
76,000
£
20,000
14,000
14,000
14,000
14,000
76,000
£
20,000
14,000
14,000
14,000
14,000
76,000
62
London Finance & Investment Group PLC___________
Directors’ Remuneration Report (continued)
Mr D.C.Marshall previously ceded his Director’s fees to a company which supplied his services. In the year ended 30th
June 2020, Mr Marshall has ceded his Director’s fees to Marshall Monteagle PLC.
Dr F.W.A. Lucas has ceded his Director’s fees to Loeb Aron & Co Limited.
♦
Mr E.J. Beale has ceded his Director’s fees to Marshall Monteagle PLC
Following a review in July 2018 by the Committee of the level of fees payable to the Chairman and the
Directors, and noting that the level of fees had not increased for a number of years, it was
recommended to the Board that the fee levels be increased by 11% on the previous year.
The remuneration of the Chairman and the Directors for the year ending 30th June 2021 will be at the
same level as for the year ended 30th June 2020.
The Group’s policy for future increases in fees to Directors is similar to the policy for increases in salary
to Group employees save that in the case of Directors’ fees the reviews will be performed every 3-5
years with the next review being expected to take place in May 2021.
Directors’ and Group Employees’ Remuneration compared to Shareholders dividends
The table below compares the total remuneration paid to the Board and the Group’s employees to the
distributions paid to Shareholders by way of dividends in the last three years.
The Board’s and the Group’s employees’ total remuneration for the three years ended 30th June 2020,
which has been audited, is set out below.
Year ended 30th June
2018
2019
2020
The Board and employees of
the Group’s total
remuneration (audited)
£
441,000
460,000
468,000
Dividends paid to
Shareholders (audited)
£
343,000
360,000
359,000
Directors’ interests in the Company
The interests of the Directors (and their connected persons) at 30th June 2020 are as set out in the
table in the Directors’ Report on page 45.
Long term Incentive Schemes
No option awards under the Group’s Company Share Option Plan have been made to any of the
Directors or employees of the Group in the year ended 30th June 2020 and no option awards are
envisaged for the year ending 30th June 2020.
No Directors or employees of the Group have received option awards under the Company’s Group
Share Option Plan in the past save for Edward Beale who, being at the time an eligible employee under
the rules of the Group’s Company Share Option Plan, on 29th February 2016 was granted options over
80,000 ordinary shares in the Company with an exercise price of 37.5p per share. These options may
be exercised at any time prior to 1st March 2026. This information has been audited.
63
_____________________________________________
Bonuses or other Discretionary Payments
No bonuses or other discretionary payments have been made by the Group to any of the Directors in
the year ended 30th June 2020 and no bonuses or other discretionary payments will be paid in the year
ending 30th June 2021. This information has been audited.
Pensions and other Benefits
No pension contributions have been paid in respect of any of the Directors in the year ended 30th June
2020 and no pension contributions will be paid by the Company in the year ending 30th June 2021. This
information has been audited.
Loss of Office
No payments or commitments in respect of payments in respect of loss of office have been paid to any
Director in the year ended 30th June 2020 and no such payments will be paid in the year ending 30th
June 2021. This information has been audited.
Remuneration on Appointment to the Board
No payments or commitments in respect of payments in respect of any Board appointments have been
paid in the year ended 30th June 2020. This information has been audited.
It is anticipated that, if new Non-Executive Directors are appointed in the year ending 30th June 2021 or
in subsequent years, they will be remunerated on a similar basis to the fees which are then paid to the
existing Directors and no additional payments will be made.
Should it be considered appropriate to appoint an Executive Director to the Board in the year ending
30th June 2021 or in subsequent years, the remuneration package to be offered will be in line with the
policy for Executive Directors as set out in the Directors Remuneration Policy above.
City Group
The remuneration payable to the executive directors and employees of the Company's subsidiary, City
Group, for the year ended 30th June 2021 will be reviewed and considered by the board of City Group,
which includes David Marshall and Edward Beale.
64
London Finance & Investment Group PLC___________
Annual Statement by John Maxwell, Chairman of the Remuneration Committee
On behalf of the Board, I am pleased to present the Directors’ Remuneration Report for the year ended
30th June 2020.
I confirm that the Directors’ Remuneration Policy, set out above, summarises the policy which was
approved by shareholders at the AGM in November 2019. The Company’s Remuneration Policy needs
to be put to a binding shareholders’ vote at least once every three years
At this time, the Board is comprised wholly of Non-Executive Directors, including the Chairman, who
only receive directors’ fees, the scale of which is limited by the provisions of the Company’s Articles of
Association. Notwithstanding the scale of fees received by each of the Directors, the Board as a whole
is committed to promoting the success of the Company and the growth in the Company’s net assets
and the dividends paid to Shareholders.
I also confirm that the Annual Report on Directors’ Remuneration set out above summarises the entire
remuneration paid to members of the Board for the year ended 30th June 2020 and the remuneration
arrangements for the Board for the year ending 30th June 2020. A resolution to approve the Directors’
Remuneration Report, will be proposed at the Company’s AGM to be held on 25th November this year
at which the financial statements will be approved.
Due to Covid-19 restrictions, the Company will hold a closed AGM to ensure compliance with the local
requirements as set out by the UK Government. Shareholders are encouraged to submit their proxy
forms by the deadline of 12.30 p.m. (13.30 p.m. South Africa time) on 23 November 2020 to ensure
their votes are counted and to email any questions that they may have to mail@city-group.com.
This Directors’ Remuneration Report was approved by the Board and signed on its behalf by:
John Maxwell
Chairman of the Remuneration Committee
18 September 2020
65
_____________________________________________
Summary of Results
For the five years ended 30th June 2020
Consolidated Statement of Financial
Position
Issued share capital
Share premium and other reserves
Company’s retained realised profits
Shareholders’ funds (all equity)
Non-controlling interest
Disposition of Capital
Non-current assets
Current assets
Listed investments (General Portfolio)
Other current assets
Cash and deposits
Liabilities and deferred tax
Restated
for IFRS
2020
£000
16
2019
£000
2018
£000
2017
£000
2016
£000
1,560
8,740
5,498
15,798
103
15,901
1,560
12,960
3,749
18,269
92
18,361
1,560
14,583
4,253
20,396
105
20,501
1,560
14,379
4,544
20,483
97
20,580
1,560
12,680
4,928
19,168
90
19,258
6,834
8,203
10,663
10,687
12,439
9,948
166
269
10,383
(1,316)
15,901
11,383
194
240
11,817
(1,659)
18,361
10,676
251
304
11,231
(1,393)
20,501
10,766
220
222
11,208
(1,315)
20,580
7,125
272
588
7,985
(1,166)
19,258
Net assets per share
Dividend per share
50.6p
1.15p
58.6p
1.15p
65.7p
1.15p
65.9p
1.1p
61.4p
1.05p
66
London Finance & Investment Group PLC___________
NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that the Annual General Meeting of London Finance &
Investment Group PLC (the “Company”) will be held at the offices of City Group PLC, 1
Ely Place, London EC1N 6RY on Wednesday 25th November 2020 at 12.30 p.m. (13.30
p.m. South Africa time).
Covid-19 Restrictions
Following the recent increase in Covid-19 cases in the United Kingdom, the board will
implement the following measures for the Annual General Meeting, in line with the current
measures being implemented by the Government in the United Kingdom, in order to safeguard
the health of its shareholders and stakeholders.
The formal business of the Annual General Meeting will only be to consider and vote upon the
resolutions set out in the notice of meeting below. In order to maintain the highest safety
standards, attendance at the meeting will be limited to two persons physically present acting
as proxy on behalf of shareholders, which will be sufficient to make it a quorate meeting.
Shareholders are encouraged to nominate the Chairman to act as their proxy as no additional
proxies will be admitted to the meeting in person.
In line with corporate governance best practice and in order that the proxy votes of
shareholders are fully reflected in the voting on the resolutions, the Chairman of the meeting
will direct that voting on all resolutions, as set out in this notice, will take place by way of a poll.
Under the Company’s Articles, votes on a poll may be given personally, by a corporate
representative or by proxy.
As Shareholders will not be able to attend this year's Annual General Meeting the Company
requests that shareholders raise any issues or concerns, arising from the business proposed to be
conducted at the meeting, to the Company’s company secretary. Appropriate questions may be
emailed to mail@city-group.com. Responses will be posted to the Company’s website.
Resolutions
The Resolutions to be voted upon at the Annual General Meeting are as follows:
To consider and, if thought fit, pass the following resolutions, of which Resolutions 1 to 10 will
be proposed as Ordinary Resolutions and Resolution 11 will be proposed as a Special
Resolution.
1.
2.
3.
4.
To receive the financial statements for the year ended 30th June 2020, together with
the reports of the directors and auditors thereon.
To declare a final dividend for the year ended 30th June 2020 of 0.60 pence for each
ordinary share in the capital of the Company.
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 Financial Statements for the year ended 30th June 2020.
To re-elect Mr D.C. Marshall as a director, who, is subject to annual re-election and
who retires and offers himself for re-election.
67
_____________________________________________
To re-elect Dr F.W.A. Lucas as a director, who is subject to annual re-election and who
5.
retires and offers himself for re-election
6.
7.
8.
9.
10.
To re-elect Mr J. H. Maxwell as a director, who is subject to annual re-election and who
retires and offers himself for re-election.
To re-elect Mr E. J. Beale as a director, who is subject to annual re-election and who
retires and offers himself for re-election.
To re-elect Mr W. H. Marshall as a director, who. is subject to annual re-election and
who retires and offers himself for re-election.
To re-appoint PKF Littlejohn LLP as the Company’s Independent Auditor and to
authorise the directors to agree its 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 ordinary shares), provided that this authority
shall expire at the conclusion of the annual general meeting of the Company to be held
in 2021, 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.
11.
THAT,
(a)
subject to the passing of Resolution 11 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 11, as if section 561(1) of that Act did not apply to
any such allotment, provided that this power shall be limited to:
(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 ordinary
shares 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 all or part 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 ordinary shares), representing approximately 5% of the
issued ordinary share capital of the Company;
68
London Finance & Investment Group PLC___________
(b)
the power given by this resolution shall expire upon the expiry of the authority
conferred by Resolution 11 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.
By Order of the Board
City Group PLC
Company Secretary
1 Ely Place
London EC1N 6RY
18 September 2020
69
_____________________________________________
Notes
1.
2.
3
4.
5.
6.
7.
8.
9.
A form of proxy is enclosed.
Shareholders are encouraged to nominate the Chairman as their proxy due to the limits on
individuals being able to attend the meeting in person.
To be valid the form of proxy should be completed and returned so as to reach the Company’s
Registrars, Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, West
Midlands, B62 8HD, 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 12.30 p.m. (13.30 p.m.
South Africa time) on 23rd November 2020.
Any member or his/her proxy, with the right to attend the Meeting has the right to submit any
question, relating to the business of the Meeting, to the company secretary at mail@city-
group.com. All questions should be received by 12.30 p.m. (13.30 p.m. South Africa time) on
23rd November 2020
Only shareholders registered in the register of members of the Company as at 6.00 p.m. (7.00
p.m. South Africa time) on 20th November 2020 shall be entitled to vote by proxy at the Meeting
in respect of the number of shares registered in their name at such time as long as their proxy
form is submitted within the deadline.
In the case of joint holders, the vote of the senior holder who tenders a vote 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.
Copies of directors’ letters of appointment are available on request to the company secretary by
making the request to mail@city-group.com.
As at 17th September 2020 (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 17th September 2020 are 31,207,479.
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 shareholders’ statements, members’
resolutions and members’ items of business received after the date of this Notice) may be
found at www.city-group.com/london-finance-investment-group-plc
10.
Shareholders 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 Meeting; 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 shareholders 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 Meeting includes any statement that the Company has been required to publish on its
website pursuant to this right.
Note: For shareholders registered on the South African branch of the register:
11.
A form of proxy is attached for the convenience of any certificated or dematerialised Lonfin
shareholders with own-name registrations who cannot attend the Meeting, but who wish to be
represented thereat. To be valid completed forms of proxy must be received by the transfer
secretaries of the Company, Computershare Proprietary Limited, 15 Biermann Avenue
Rosebank, 2196 (PO Box 61051, Marshalltown, 2107) by no later than 12.30 p.m. (13.30 p.m.
South Africa time) on 23rd November 2020.
70
London Finance & Investment Group PLC___________
All beneficial owners of Lonfin shares who have dematerialised their shares through a CSDP or
broker, other than those with own-name registration, and all beneficial owners of shares who
hold certificated shares through a nominee, must provide their CSDP, broker or nominee with
their voting instructions, in accordance with the agreement between the beneficial owner and
the CSDP, broker or nominee as the case may be. Should such beneficial owners wish to
attend the meeting in person they must request their CSDP, broker or nominee to issue them
with the appropriate letter of authority. If shareholders who have not dematerialised their shares
or who have dematerialised their shares with own-name registration and who are entitled to
attend and vote at the Meeting do not deliver proxy forms to the transfer secretaries timeously,
such shareholders will nevertheless at any time prior to the commencement of the voting on the
resolutions at the Meeting be entitled to lodge the form of proxy in respect of the Meeting, in
accordance with the instructions therein with the Chairman of the Meeting.
Record Dates:
Please take note of the following important dates
Record date for the purpose of determining which shareholders of the Company are
entitled to receive Notice of the Annual General Meeting (‘the notice record date’)
Annual Report published on SENS and posting date
Friday 9th
October
By Thursday
22nd October
Tuesday 17th
The last date to trade in order to be eligible to participate in and vote at the Annual
November
General Meeting
Friday 20th
Record date for the purpose of determining which shareholders of the Company are
entitled to participate in and vote at the Annual General Meeting (‘the voting record November
date’)
Last day for lodging forms of proxy by 13.30 p.m. (SA time)
2020
Date of the Annual General Meeting at 13.30 p.m. (SA time)
Result of Annual General Meeting published on SENS
Monday,
23rd
November
Wednesday,
25th
November
Wednesday,
25th
November
Change of Address:
Members are requested to advise the United Kingdom Registrars, Neville Registrars Limited, or the
South African Registrars, Computershare Investor Services (Pty.) Limited, of any change of address.
71
_____________________________________________
FORM OF PROXY
I/We,……………………………………………………………………………………………………….
……………………………………………………………………………………………………………..
(for South African Shareholders only:
Telephone number:………………………………….Mobile phone number:……..………………….
Email address…………………………………………………………………………………………....).
being (a) member(s) of the above-named company (the “Company”) hereby appoint the chairman of the
Annual General 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 25th November 2020 at 12:30 p.m. (13.30 p.m. South Africa time) 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.
For
Against Withheld
RESOLUTIONS
Ordinary Resolutions
1. To receive the financial statements for the year ended 30th
June 2020, together with the reports of the directors and
auditors thereon.
2. To declare a final dividend for the year ended 30thJune 2020.
3. To approve the Directors’ Remuneration Report (excluding
The Director’s Remuneration Policy).
4. To re-elect Mr D.C. Marshall as a director.
5. To re-elect Dr F.W.A. Lucas as a director.
6. To re-elect Mr J. H. Maxwell as a director.
7. To re-elect Mr. E. J. Beale as a director.
8. To re-elect Mr W. H. Marshall as a director.
9. To re-appoint PKF Littlejohn LLP as Auditors of the
Company and to authorise the directors to agree its
remuneration.
10. To authorise the directors to allot shares under Section 551
of the Companies Act 2006.
Special Resolution
11. To disapply pre-emption rights.
Dated………………………………………2020
Signature……………………………………
72
London Finance & Investment Group PLC___________
Notes
1.
2.
3.
4.
6.
7.
8.
In line with the restrictions at the Annual General Meeting as set out in the notice, the
shareholders are encouraged to nominate the Chairman as their proxy due to the limits on
individuals being able to attend the meeting in person.
Please indicate with a cross in the appropriate box how you wish your votes to be cast at the
Meeting. 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.
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.
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’s Registrars:
Neville Registrars Limited, Neville House, Steelpark Road, Halesowen, West Midlands,
B62 8HD UK; or
the South African Registrars, Computershare Investor Services (Pty.) Limited:
o by hand to 15 Biermann Avenue, Rosebank, 2196; or
o by mail to P.O. Box 61051, Marshalltown 2107, South Africa
not later than 12:30 p.m. (13.30 p.m. South Africa time) on 23rd November 2020. (See Note 11
to the Notice above).
Completion and return of this form of proxy will be taken as your final votes. Admission to the
Annual General Meeting will not be permitted in line with the restrictions as set out in the notice.
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).
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.