London Finance &
Investment Group PLC
Annual Report and Financial Statements
30th June 2021
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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.
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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
2
2
3
3
4
11
12
13
19
20
21
22
23
24
25
26
42
48
54
58
65
66
Enclosed
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London Finance & Investment Group PLC___________
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 and lives
in Zug, Switzerland. He established the trading division of the Monteagle Group in 1993 initially
trading in retailer branded fast moving consumer goods, and then later diversifying into metals,
minerals, logistics and trade finance. He is a director of various other group operating companies
and 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
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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___________
London Finance & Investment Group PLC
2021
£000
2,712
5,490
8,202
12,081
22
145
309
(624)
(178)
(806)
(129)
19,022
2020
£000
2,751
3,540
6,291
9,948
31
512
269
(59)
(571)
(520)
(103)
15,798
60.5p
50.6p
0.55p
0.60p
40.5p
0.55p
0.60p
32.5p
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
Net assets, including investments at fair value
Net assets per share
Dividends*
Interim
Proposed Final
Mid-market price on 30th June
*Information on Dividends is set out on page 7
Financial Calendar
Announcement of
Final Results for the
year ended 30th June 2021
27 September 2021
Annual General Meeting
1 December 2021
Final Dividend for 2021
Payable on 22 December 2021 to shareholders on the register of
Half year results to
31st December 2021
to be announced in February 2022
members at 10 December 2021
Interim Dividend for 2021
to be announced in February 2022
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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 2021 have increased from the previous year to 60.5p and
decreased 7.7% over the last five years. Shareholders’ dividends for 2021 remains the same at 1.15p
and increased by 4.5% 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 increased to 60.5p per share (2020 – 50.6p per share)
Strategic Investments have increased in value over the year, from £6,291,000 to £8,202,000
Strategic investments are yielding 0% (2020 – 2.6%)
The General Portfolio has increased, adjusting for investment purchases and sales, over the
year, by 21.4% from £9,948,000 to £12,081,000
Fair value movement is £1,196,000
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 (2020 – 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 £225,000, compared to operating profit
for the previous year, before tax and changes to the fair value adjustments of investments, of £130,000.
The significant increase in fair value of strategic investments that occurred during the year has led to
Total Comprehensive income for the year of £3,421,000 compared to loss of £2,112,000 for the
previous year. Basic and headline profits per share are 4.8p (2020- losses of 2.6p).
Strategic Investments
Strategic Investments have increased in value by £1,911,000 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 24th September 2021, Western announced unaudited preliminary results showing a loss after tax of
£109,000 for the year to 30th June 2021 (2020 loss – £180,000). Losses per share are 0.62p (2020 -
losses of 1.0p).
Western’s Board has not recommended payment of an interim or a final dividend for the year.
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
Strategic Report (continued)
Western’s net assets at market value at 30th June 2021 were £10,038,000 equivalent to 56p per share,
an increase of 24.44% from 45p last year.
Our share of the net assets of Western, including the value of Western’s investments at market value,
was £4,396,000 (2020 – £3,560,000). The fair value for Western recorded in the Statement of Financial
Position is the market value of £2,712,000 (2020 - £2,751,000). This represents 14.2% (2020 – 17.3%)
of the net assets of the Group.
Western’s objective is to generate growth in value for shareholders over the medium to long-term.
Western’s business model is to take sizeable minority stakes in relatively small companies and maintain
a dialogue 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 will grow to a stage at
which our support is no longer required, and our stake can then be sold over time into the relevant stock
market. Companies that are targeted will have an experienced management team, a credible business
model and good prospects for growth. In addition, as part of its Treasury Operations, Western holds a
General Portfolio of shares which consists of investments, primarily in blue-chip companies in the U.S.,
U.K. and Europe.
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 and Kinovo Plc.
An extract from Western’s announcement on 24th September 2021 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 31
December 2020 on 13 April 2021 and recorded a loss after tax, before exceptional items, of £186,000
for the year (2019 - loss after tax £236,000). No dividend was recommended by Northbridge during the
year (2020 - £Nil).
Western holds 3,300,000 Northbridge shares which represents 11.69% of Northbridge’s issued share
capital. The market value of this investment at 30 June 2021 was £3,828,000 (2020 - £2,739,000) which
represents approximately 38.1% (2020 – 33.7%) 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 of 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/
Western sold its entire shareholding of 1,300,000 shares in Brand Architekts on 28 September 2020
realising £1,425,000.
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Kinovo Plc (“Kinovo”) (formerly Bilby Plc)
Kinovo 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 Kinovo is
available on their website: www.kinovoplc.com.
Kinovo, which is admitted to trading on AIM, announced its results for the year ended 31 March 2021 on
6 July 2021 showing a profit before tax, before exceptional items, of £2,363,000 compared to a profit
before tax, before exceptional items, of £3,691,000 for the previous year ended 31 March 2020. No
interim dividends were paid during the year. A final dividend of 0.5p per share was approved at its AGM
held on 1 September 2021 (2020 - £nil).
Western acquired 1,163,637 shares in the period and now holds 7,500,000 Kinovo shares which
represents 12.07% of Kinovo’s issued share capital. Following the additional £408,059 acquisitions
during the year, the market value of this investment on 30 June 2021 has increased to £2,775,000
(2020- £1,235,590), which represents approximately 27.7% (2020 – 15.2%) of Western’s net assets.
Associated Companies
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 2021, Lonfin held 6,000,000 Finsbury shares, representing 4.6% of Finsbury’s issued share
capital. The market value of the holding was £5,490,000 as at 30th June 2021 (value - £3,540,000) and
represents approximately 29% (2020 – 22%) of Lonfin’s net assets.
On 20th September 2021, Finsbury announced operating profits after tax of £12,131,000 for the 52
weeks ended 27th June 2021 (2020 – £10,330,000).
No dividends were received during the financial year. Finsbury has recommended to its shareholders a
final dividend of 2.4p per share for 2021, the resolution for which shall be put to the shareholders at the
Annual General Meeting to be held on 20th November 2021.
General Portfolio
The investments comprising the General Portfolio at 30th June 2021 are listed on page 11.
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 2021, the number of holdings in the General Portfolio was 36 (2020 – 31). The amount
invested in the General Portfolio over the year by has increased by £2,133,000 (2020 - decreased by
£170,000).
The opening value of our General Portfolio investments at 30th June 2020 was £9,948,000 which
compared with a cost of such investments at the same date of £6,038,000. After investment purchases
during the year of £1,706,000 and investment sales (including selling expenses) during the same period
of £769,000, the value of the General Portfolio investments as at 30th June 2021 had increased by
21.4% to £12,081,000. Further details of our General Portfolio investments are set out on page 11.
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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 12.1190 cents) per share, making a total of
1.15p (ZAR 23.1650 cents) per ordinary share for the year (2020 – 1.15p). Subject to shareholders’
approval at the Company’s AGM to be held on Wednesday, 1st December 2021, the dividend will be
paid on Wednesday, 22nd December 2021 to those shareholders on the register at the close of business
on Friday, 10th December 2021. 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, 23rd September
2021 being GBP1= ZAR 20.1983
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, 10th December 2021.
•
•
•
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.
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, 7 December 2021
Wednesday, 8 December 2021
Thursday, 9 December 2021
Friday, 10 December 2021
Wednesday, 22 December 2021
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 12.1190 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 9.6952 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
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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, 8th December
2021 and Friday, 10th December 2021,, 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, Covid 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.
Covid-19 continues to be a global pandemic effecting not only the United Kingdom but countries
across the globe. The United Kingdom has experienced two additional lockdowns in November 2020
and January 2021 which impacted all areas of the economy. Consequently, there have continued to
be large fluctuations on stock markets in both the United Kingdom and globally, although stock
market indices have recovered substantially since their lows in March 2020. The long-term effect
In
continues to be on dividends cancelled, deferred, or re-based, and on increased volatility.
addition,
the Covid-
19 additional lockdowns had an effect on one of the Core Holdings although this has improved since
the opening of hospitality venues
in consumer spending brought about
reduction
through
the
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.
Covid-19 has had an effect on the payment of dividends by companies and Core Holdings in
particular have not paid dividends during this period due to the uncertainty created by Covid-19.
Despite this companies have however slowly begun to return to the payment of dividends and the
Board expect this trend to continue.
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.
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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.
2021
2020
2019
(restated)
Net assets per share
Change in net assets per share over 5
years
Dividends (net) per share
60.5p
50.6p
58.5p
(7.7%)
(17.6%)
17.7%
1.15p
1.15p
1.15p
2018
65.4p
46%
1.15p
2017
65.6p
108%
1.1p
Definition of KPIs used above
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.
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
2021, the Group had undrawn bank facilities of £1,250,000.
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 42. 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).
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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
oder 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 UK economy continues to adapt to the effect of Covid-19 and Brexit. Worldwide we are still coming
to grips with the prospects of living with Covid-19 and this is showing through most prominently in staff
shortages and supply chain disruption. We can expect further volatility and turbulence in the markets
ahead, particularly due to the emergence of the Delta variant of Covid-19. Whilst the last 12 months has
continued to be challenging for the Group’s investments, particularly its Strategic Investments, and we
can likely expect further challenges ahead, the Board is pleased to see one of the Strategic Investments
already committed to return to the payment of dividends and is confident that the Group has a solid
base of investments which can lead to further capital growth in the medium to long term.
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 and the emergence of the Delta variant, 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. 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 2021, the Company held 36 investments in the General
Portfolio.
By Order of the Board
City Group PLC
Company Secretary
24 September 2021
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
Composition of General Portfolio
At 30th June 2021
Pernod Ricard
Nestle
LVMH Moet Hennessey
Heineken Holding
Schindler-Holdings AG CHF1.00 REGD (Post Subd)
Diageo
Procter & Gamble Co
L'Oreal
Unilever
Brown Forman (B)
Givaudan
AP Moeller-Maersk A/S
Deutsche Post
Rio Tinto
Phillip Morris International Inc
BHP Group
Compagnie Financiere Richemont SA
Antofagasta
3M Co
Henkel Preferred
Reckitt Benckiser Group
Danone
Exxon Mobil Corp
British American Tobacco
Linde AG
BAE Systems Plc
Royal Dutch Shell B
Anheuser Busch Inbev SA
Becton Dickinson & Co
BASF
M&G Plc
Otis Worldwide Corp
Imperial Brands
Raytheon
Legal & General
Compagnie Financiere Richemont SA warrant
Analysis by currency
Euro
Sterling
US Dollar
Swiss Franc
Danish Kronas
11
£000
555
545
511
474
456
441
439
435
426
417
404
395
369
367
365
362
358
330
316
316
313
306
301
274
272
261
252
250
246
240
229
226
218
210
198
4
12,081
£000
3,726
3,673
2,520
1,767
395
12,081
%
4.6
4.5
4.2
3.9
3.8
3.7
3.6
3.6
3.5
3.5
3.3
3.3
3.1
3.0
3.0
3.0
3.0
2.7
2.6
2.6
2.6
2.5
2.5
2.3
2.3
2.2
2.1
2.1
2.0
2.0
1.9
1.9
1.8
1.7
1.6
0.0
100
%
31.9
24.0
22.5
15.3
1.8
100
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_____________________________________________
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
Accounting Standards in conformity with the requirements of the Companies Act 2006. 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 International Accounting Standards in conformity
with the requirements of the Companies Act 2006, 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 International Accounting Standards in con-
formity with the requirements of the Companies Act 2006, give a true and fair view of the assets, li-
abilities, 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
24 September 2021
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
Independent auditor’s report to the members of London
Finance & Investment Group PLC
Opinion
We have audited the financial statements of London Finance and Investment Group PLC (the ‘parent
company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2021 which comprise the
Consolidated Statement of Comprehensive Income,
the Consolidated and Parent Company
Statements of Financial Position, the Consolidated and Parent Company Statements of Changes in
Equity, the Consolidated and Parent Company Statements of Cash Flows and notes to the financial
statements, including significant accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law and international accounting standards in conformity with
the requirements of the Companies Act 2006 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 30 June 2021 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with international
accounting standards in conformity with the requirements of the Companies Act 2006;
the parent company financial statements have been properly prepared in accordance with
international accounting standards in conformity with the requirements of the Companies Act
2006 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 regard to the group financial statements, international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union.
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 going concern
In auditing the financial statements, we have concluded that the director’s use of the going concern
basis of accounting in preparation of the financial statements is appropriate. Our evaluation of the
directors’ assessment of the group’s and parent company’s ability to continue to adopt the going
concern basis of accounting included:
•
•
•
Assessing management’s assumptions in their consideration of the future financial performance
and cash flow requirements;
Assessing mitigating factors available to management including their ability to generate cash
from the investment portfolio, should that be required, and the liquidity of the portfolio; and
Assessing whether management has adequately disclosed the conditions which cast significant
doubt on the ability of the group and company to continue as a going concern in the financial
statements
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the group’s or parent
company's ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
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_____________________________________________
In relation to the entities reporting on how they have applied the UK Corporate Governance Code, we
have nothing material to add or draw attention to in relation to the directors’ statement in the financial
statements about whether the director’s considered it appropriate to adopt the going concern basis of
accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described
in the relevant sections of this report.
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 misstatements, including omissions, either individually or in aggregate, could reasonably be
expected to influence 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)
Specific materiality
– classes of
transactions and
balances other
than those at fair
value – Based on
5% of estimated
normalised
EBITDA excluding
fair value
movements
Purpose and basis
Assessing whether
financial
statements as a whole present a
true and fair view.
the
is
based
Materiality
the
investment balance on the basis
that this is the main driver of the
balance sheet.
on
ISA 320, an auditor
is
Under
required to consider whether there
are one or more classes of
transactions or account balances,
lesser
for which misstatements of
than materiality could
amounts
reasonably
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.
expected
be
Key considerations and
benchmarks
The value of investments
The
level of
inherent in the valuation
judgement
The
range of
alternative valuations
reasonable
Amount
£
203,800
(2020 -
175,000)
The level of normalised
earnings
37,540
(2020 -
37,540)
We have applied a performance materiality of 80% - £163,000 (2020 - £140,000). We reassessed mate-
riality 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% - £10,100 (2020 - £8,750) of materiality as well as differences below that threshold that, in
our view, warranted reporting on qualitative grounds.
Our approach to the audit
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
Our audit approach was developed by obtaining an understanding of the group’s activities, the key
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
functions undertaken on behalf of the Board by specialist outsourced service providers and the overall
control environment. Based on this understanding, we assessed those aspects of the group and
control environment. 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
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
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.
identified what we considered to be key audit matters and planned our audit approach accordingly.
The Group and all its components were subject to a full scope audit by a team with relevant sector
experience undertaken from our office based on London.
The Group and all its components were subject to a full scope audit by a team with relevant sector
experience undertaken from our office based on London.
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) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
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) we identified, including those which had the
greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Area
Area
Reason
Reason
Audit response
Audit response
Valuation
Valuation
and
and
existence of
existence of
investments
investments
(note 13)
(note 13)
The valuation of the portfolio at 30
The valuation of the portfolio at 30
June 2021 was £20.283m (2020 -
June 2021 was £20.283m (2020 -
£16.239m), comprising a general
£16.239m), comprising a general
portfolio of listed investments and
portfolio of listed investments and
two strategic investments in
two strategic investments in
Western Selection PLC and
Western Selection PLC and
Finsbury Group PLC.
Finsbury Group PLC.
The valuation of investments, which
The valuation of investments, which
are held at fair value, was
are held at fair value, was
considered a key audit matter as
considered a key audit matter as
investments are the single most
investments are the single most
significant component of the
significant component of the
financial statements and the fair
financial statements and the fair
value movements thereon could
value movements thereon could
have a pervasive impact on the
have a pervasive impact on the
financial statements. Furthermore,
financial statements. Furthermore,
although the relevant investments
although the relevant investments
are in companies whose shares are
are in companies whose shares are
traded on recognised stock
traded on recognised stock
exchanges, the nature of those
exchanges, the nature of those
exchanges and volume of trades in
exchanges and volume of trades in
those shares may be such that
those shares may be such that
there is insufficient liquidity for bid
there is insufficient liquidity for bid
price to be a suitably reliable
price to be a suitably reliable
measure of fair value.
measure of fair value.
Additionally, there is a risk that the
Additionally, there is a risk that the
investments recorded as held by
investments recorded as held by
the Group may not represent
the Group may not represent
assets of the Group.
assets of the Group.
As investments comprise a general portfolio of
As investments comprise a general portfolio of
listed investments and two separate strategic
listed investments and two separate strategic
holdings, we applied our audit procedures to
holdings, we applied our audit procedures to
the general portfolio and both the strategic
the general portfolio and both the strategic
investments. Specifically, we:
investments. Specifically, we:
•
•
•
•
•
•
•
•
•
•
•
•
re-performed the calculation of the
re-performed the calculation of the
investment valuations and
investment valuations and
benchmarked key inputs and
benchmarked key inputs and
estimates to independent information
estimates to independent information
and our own research.
and our own research.
performed initial analytical procedures
performed initial analytical procedures
to determine the extent of our work
to determine the extent of our work
considering, inter alia, the composition
considering, inter alia, the composition
of the investment portfolio, the sectors
of the investment portfolio, the sectors
invested in and, based on publicly
invested in and, based on publicly
available data, the expected
available data, the expected
movements on the portfolio;
movements on the portfolio;
had regard to the size of investment
had regard to the size of investment
stake held, the impact of liquidity
stake held, the impact of liquidity
constraints and any unusual
constraints and any unusual
movement in observable share prices
movement in observable share prices
around the year end;
around the year end;
confirmed that bid price had been
used;
confirmed that bid price had been
used;
confirmed there were no contra-
confirmed there were no contra-
indicators, such as liquidity
indicators, such as liquidity
considerations, to suggest bid price
considerations, to suggest bid price
was not the most appropriate
was not the most appropriate
indication of fair value; and
indication of fair value; and
confirmed the existence of
confirmed the existence of
investments through agreeing 100% of
investments through agreeing 100% of
the investments held to Custodian
the investments held to Custodian
reports independently obtained from
reports independently obtained from
the Custodian and to share certificates
the Custodian and to share certificates
evidencing title by the Group.
evidencing title by the Group.
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_____________________________________________
_____________________________________________
Area
Area
Audit response
Audit response
Reason
Reason
Based on the procedures we performed, we
Based on the procedures we performed, we
found that the valuation of the Group’s
found that the valuation of the Group’s
investments was supported by the evidence
investments was supported by the evidence
obtained and that the Group had title to the
obtained and that the Group had title to the
investments reported in the financial
investments reported in the financial
statements.
statements.
Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information
contained within the annual report. Our opinion on the 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. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
Other information
The other information comprises the information included in the annual report, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information
contained within the annual report. Our opinion on the 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. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be
materially misstated. If we identify such material inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
We have nothing to report in this regard.
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
accordance with the Companies Act 2006.
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
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
In our opinion, based on the work undertaken in the course of the audit:
•
•
•
•
the information given in the strategic report and the directors’ report for the financial year for
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
which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable
the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.
legal requirements.
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.
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.
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:
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
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
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
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
audited are not in agreement with the accounting records and returns; or
•
•
certain disclosures of directors’ remuneration specified by law are not made; 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.
• we have not received all the information and explanations we require for our audit.
Corporate governance statement
The Listing Rules require us to review the directors' statement in relation to going concern, longer-term
viability and that part of the Corporate Governance Statement relating to the group’s and parent
company's compliance with the provisions of the UK Corporate Governance Statement specified for our
review.
Corporate governance statement
The Listing Rules require us to review the directors' statement in relation to going concern, longer-term
viability and that part of the Corporate Governance Statement relating to the group’s and parent
company's compliance with the provisions of the UK Corporate Governance Statement specified for our
review.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the Corporate Governance Statement is materially consistent with the financial statements
or our knowledge obtained during the audit:
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the Corporate Governance Statement is materially consistent with the financial statements
or our knowledge obtained during the audit:
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
• Directors' statement with regards the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set out on page 43;
• Directors’ explanation as to its assessment of the entity’s prospects, the period this assessment
covers and why they period is appropriate set out on page 43.
• Directors' statement that they consider the annual report and the financial statements, taken as
a whole, to be fair, balanced and understandable set out on page 55;
Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on page 43;
The section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on page 52; and
The section describing the work of the audit committee set out on page 54
•
•
•
Responsibilities of directors
As explained more fully in the statement of directors’ responsibilities, 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, matters related to going concern and using the going concern basis of accounting unless the
directors either intend 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
• We obtained an understanding of the group and parent company and the sector in which they
operate to identify laws and regulations that could reasonably be expected to have a direct ef-
fect on the financial statements. We obtained our understanding in this regard through discus-
sions with management, industry research, application of cumulative audit knowledge and ex-
perience of the sector.
• We determined the principal laws and regulations relevant to the group and parent company in
this regard to be those arising from the Listing Rules, applicable FCA rules, Corporate Govern-
ance Code, Companies Act 2006 and UK Tax legislation.
• We designed our audit procedures to ensure the audit team considered whether there were any
indications of non-compliance by the group and parent company with those laws and regula-
tions. These procedures included, but were not limited to:
o
enquiries of management, review of minutes, review of any legal and regulatory corre-
spondence, reviewing financial statement disclosures and testing to supporting docu-
mentation to assess compliance with applicable laws and regulations
17
17
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_____________________________________________
• We also identified the risks of material misstatement of the financial statements due to fraud.
We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from
management override of controls, that a potential management bias was identified in relation to
the valuation of investments. We addressed this risk by challenging the assumptions and judg-
ments made by management. We also reviewed the key inputs used in the valuation by
benchmarking them to independent and reliable sources.
•
As in all of our audits, we addressed the risk of fraud arising from management override of con-
trols by performing audit procedures which included but were not limited to: the testing of jour-
nals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale
of any significant transactions that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities,
including those leading to a material misstatement in the financial statements or non-compliance with
regulation. This risk increases the more that compliance with a law or regulation is removed from the
events and transactions reflected in the financial statements, as we will be less likely to become aware
of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud
rather than error, as fraud
involves intentional concealment, forgery, collusion, omission or
misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
Other matters which we are required to address
Following the recommendation of the Audit Committee, we were appointed by the Board on the 30th
November 2016 to audit the financial statements for the period ended 30 June 2017 and subsequent
financial periods. We were reappointed by the members of the company at the Annual General Meeting
held on 25th November 2020. Our total uninterrupted period of engagement is 5 years, covering the
periods ending 2017 to 2021.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the
parent company and we remain independent of the group and the parent company in conducting our
audit.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them in an auditor’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
Date:
15 Westferry Circus
Canary Wharf
London E14 4HD
18
18
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
Consolidated Statement of Total Comprehensive Income
For the year ended 30th June
Operating Income
Notes
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
Other income
Interest payable
Profit/(Loss) before taxation
Tax expense
Profit/(Loss)after taxation
Non-controlling interest
Profit/(Loss) 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 Income/(Loss) attributable to
shareholders
Total Comprehensive Income/(Loss) 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
4a
4a
3
13
4b
7
7
9
9
The notes on pages 26 to 41 form part of these financial statements.
2021
£000
326
154
245
304
1,029
(392)
(412)
(804)
225
1,651
36
(39)
1,873
(337)
1,536
(26)
1,510
1,911
-
1,911
2020
£000
425
150
68
284
927
(417)
(380)
(797)
130
(700)
-
(62)
(632)
(164)
(796)
(11)
(807)
(1,305)
-
(1,305)
3,421
(2,112)
4.8p
-
4.8p
(2.6)p
-
(2.6)p
19
19
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_____________________________________________
Consolidated Statement of Financial Position
At 30th June
Notes
10
11
13
13
14
15
11
11
16
17
18
2021
£000
22
145
8,202
8,369
12,081
125
309
12,515
(228)
(71)
(299)
2020
£000
31
512
6,291
6,834
9,948
166
269
10,383
(225)
(52)
(277)
12,216
10,106
(107)
(650)
(806)
(1,563)
19,022
1,560
2,320
4,530
4,734
5,749
18,893
129
19,022
(519)
-
(520)
(1,039)
15,901
1,560
2,320
1,708
4,712
5,498
15,798
103
15,901
Non-current Assets
Property, Plant and Equipment
Right of use asset
Investments at fair value though other comprehensive
income
Current Assets
Listed investments at fair value through profit and loss
Trade and other receivables
Cash and cash equivalents
Current Liabilities
Trade and other payables
Lease liabilities
Net Current Assets
Non-current Liabilities
Lease liabilities
Borrowings
Deferred Taxation
Total Assets less Total Liabilities
Capital and Reserves
Ordinary share capital
Share premium
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 24 September 2021
Edward Beale
Director
The notes on pages 26 to 41 form part of these financial statements.
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20
20
London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
Company Statement of Financial Position
At 30th June
Notes
12
13
14
15
16
17
18
18
18
Non-current Assets
Investments in Group companies
Current Assets
Listed investments at fair value through profit or loss
Trade and other receivables
Cash and cash equivalents
Current Liabilities
Trade and other payables
Net Current Assets
Non-current Liabilities
Borrowings
Deferred Taxation
Total Assets less Total Liabilities
Capital and Reserves
Ordinary share capital
Share premium
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
2021
£000
2,079
12,081
17
23
12,121
(106)
(106)
11,365
(650)
(806)
(1,456)
12,639
1,560
2,320
3,010
6,890
5,498
577
(326)
5,749
12,639
2020
£000
2,074
9,948
16
91
10,055
(132)
(132)
9,923
-
(520)
(520)
11,477
1,560
2,320
2,099
5,979
3,739
2,118
(359)
5,498
11,477
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 24 September 2021
Edward Beale
Director
London Finance & Investment Group PLC
Registered in England and Wales – Number 201151
The notes on pages 26 to 41 form part of these financial statements.
21
21
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London Finance & Investment Group PLC___________
Company Statement of Financial Position
At 30th June
_____________________________________________
Consolidated Statement of Cash Flows
Non-current Assets
For the year ended 30th June
Investments in Group companies
Current Assets
Listed investments at fair value through profit or loss
Trade and other receivables
Cash and cash equivalents
Cash flows from operating activities
Trade and other payables
Current Liabilities
Profit/(Loss) before tax
Adjustments for non-cash items -
Finance expense
Net Current Assets
Depreciation charges
Depreciation on right of use asset
Non-current Liabilities
Lease adjustment
Borrowings
Unrealised changes in the fair value of investments
Deferred Taxation
Realised gain on disposal of investments
Decrease in trade and other receivables
Increase/(Decrease) in trade and other payables
Total Assets less Total Liabilities
Taxes paid
Capital and Reserves
Net cash inflow from operating activities
Ordinary share capital
Share premium
Unrealised profits and losses on investments
Cash flows from investment activity
Realised Profit and Loss
Acquisition of property, plant and equipment
Acquisition of current investments
Balance at 1st July
Proceeds from disposal of current investments
Net Profit/(Loss)/ for the period
Dividends paid
Net cash (outflow)/inflow from investment activity
Balance at 30th June
Cash flows from financing activities
Equity shareholders’ funds
Notes
12
13
Notes
14
15
16
13
17
13
7
18
18
18
13
2021
£000
2,079
12,081
2021
17
£000
23
12,121
1,873
(106)
(106)
39
11,365
10
62
(36)
(650)
(1,196)
(806)
(700)
(1,456)
41
10
12,639
(51)
52
1,560
2,320
3,010
6,890
-
(1,706)
5,498
1,469
577
(237)
(326)
5,749
12,639
2020
£000
2,074
9,948
2020
16
£000
91
10,055
(632)
(132)
(132)
62
9,923
10
62
-
-
1,265
(520)
(633)
(520)
10
(7)
11,477
(39)
98
1,560
2,320
2,099
5,979
(2)
(163)
3,739
966
2,118
801
(359)
5,498
11,477
Interest paid
Interest paid on lease liabilities
Repayment of lease liabilities
Equity dividends paid
Net drawdown/(repayment) of loan facilities
(31)
(31)
(49)
Under Section 408 of the Companies Act 2006, the Parent Company is exempt from the requirement to
(359)
present its own income statement.
(400)
(870)
(19)
(28)
(52)
(326)
650
225
16
Net cash inflow/(outflow) from financing activities
Approved and authorised by the Board
On 24 September 2021
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
20
40
269
309
29
240
269
Edward Beale
Director
London Finance & Investment Group PLC
Registered in England and Wales – Number 201151
The notes on pages 26 to 41 form part of these financial statements
The notes on pages 26 to 41 form part of these financial statements.
.
21
22
22
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
Company Statement of Cash Flows
For the year ended 30th June
Cash flows from operating activities
Profit before tax
Adjustments for non-cash items -
Finance expense
Release of Impairment provision
Unrealised changes in the fair value of investments
Realised gain on disposal of investments
(Increase)/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 (outflow)/inflow from investment activity
Cash flows from financing activities
Interest paid
Equity dividends paid
(Increase)/Decrease in loan to subsidiary
Net drawdown/(repayment) of loan facilities
Net cash inflow/(outflow) from financing activities
(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
2021
£000
1,825
11
-
(1,197)
(700)
(1)
(18)
(51)
(131)
(1,706)
1,469
(237)
(19)
(326)
(5)
650
300
(68)
91
23
The notes on pages 26 to 41 form part of these financial statements.
2020
£000
891
31
(1,681)
1,266
(633)
7
(16)
(39)
(174)
(163)
966
803
(15)
(359)
135
(400)
(639)
(10)
101
91
23
23
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_____________________________________________
Consolidated Statement of Changes in Shareholders’ Equity
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
Total
Non-
Controlling
Interests
Total
Equity
£000
£000
£000
£000
£000
£000
£000
£000
Year ended 30th June
2021
Balances at 1st July 2020
1,560
2,320
-
-
-
-
1,708
911
1,911
1,560
2,320
2,822
-
-
-
-
-
-
4,712
5,498)
15,798
103
15,901
22
-
22
-
-
577
1,510
26
1,536
-
1,911
-
1,911
577
3,421
26
3,447
(359)
(359)
33
33
-
-
(359)
33
1,560
2,320
4,530
4,734
5,749
18,893
129
19,022
Balances at 1st July 2019
1,560
2,320
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
The notes on pages 26 to 41 form part of these financial statements.
24
24
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Profit for the Year
Other Comprehensive
Income
Total comprehensive
income
Dividends paid and total
transactions with
shareholders
Unclaimed dividends
Balances at 30th June
2021
Year ended 30th June
2020
(Loss)/profit for the Year
Other Comprehensive
Income
Total comprehensive
income
Impairment provision
released
Dividends paid and total
transactions with
shareholders
Balances at 30th June
2020
London Finance & Investment Group PLC
London Finance & Investment Group PLC___________
Company Statement of Changes in Shareholders’ Equity
Year ended 30th June 2021
Balances at 1st July 2020
Profit for the Year and total comprehensive
income
Dividends paid and total transactions with
shareholders
Unclaimed dividends
Ordinary
Share
Capital
Share
Premium
Account
Unrealised
profits and
losses on
Investments
Realised
profits
and
losses
Equity
Total
£000
£000
£000
£000
£000
1,560
2,320
2,099
5,498
11,477
-
-
-
-
-
-
911
577
1,488
-
-
(359)
(359)
33
33
Balances at 30th June 2021
1,560
2,320
3,010
5,749
12,639
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
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
The notes on pages 26 to 41 form part of these financial statements.
25
25
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_____________________________________________
Notes to the Financial Statements
For the year ended 30th June 2021
1. Accounting Policies
The consolidated financial statements of the London Finance & Investment Group PLC have been
prepared in accordance with International Accounting Standards in conformity with the requirements of
the Companies Act 2006 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
2021. 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 credited to 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.
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26
26
London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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.
Borrowings are recognised initially at fair value and subsequently carried at amortised cost.
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 expenses that are never
taxable or deductible and items which are taxable or deductible in other years.
Deferred taxation is provided on the full liability method, at tax rates that are expected to apply,
for temporary differences arising between the treatment of certain items for taxation and
accounting purposes. Deferred tax assets are recognised only to the extent that the directors
consider that it is 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
the
relevant assets over their effective useful economic lives. Depreciation is charged at
following rates:
Leasehold improvements – over the life of the lease
Office equipment
– 20% on cost
27
(v)
(vi)
(vii)
(viii)
27
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_____________________________________________
Notes to the Financial Statements (continued)
1. Accounting Policies (continued)
(ix)
Leases - At the 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 in-
curred 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)
The group operates a defined contribution plan which received fixed contributions from the sub-
sidiary company City Group PLC. The group legal or constructive obligations for this plan is lim-
ited to the contributions. The expense recognised in the consolidated statement of total com-
prehensive income for the period in relation to these contributions was £15,000 (see note 6).
(xi)
Cash and cash equivalents comprise cash balances
2. Changes in accounting policies and disclosures
a) New standards, amendments and interpretations adopted by the Group
No new standards, amendments or interpretations, effective for the first time for financial years
beginning on or after 1st January 2020 have had a material impact on the Group or Parent
Company.
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 2021 and have not been applied in preparing these
financial statements. None of these are expected to have a significant effect on the financial
statements of the Group or Parent Company.
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28
London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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
Management Services
Dividends – Listed investments
Rental and other income
Profits on sales of
including provisions
Management services fees
Operating income
Administration expense – normal
Operating profit
investments,
2021
£000
326
-
245
-
571
(392)
179
2020
£000
425
-
68
-
493
(417)
76
2021
£000
-
154
-
304
458
(412)
46
2020
£000
-
150
-
284
434
(380)
54
All revenues are derived from operations within the UK. Consequently, no separate geographical
segment information is provided.
4. Administration Expenses and Other Income
a)
Administration expenses include:
Depreciation
Depreciation on Right of use asset
Auditors’ remuneration
Directors’ emoluments
Staff Costs
b)
Other income
2021
£000
10
62
32
76
454
36
2020
£000
10
62
27
76
392
-
- Audit services
- Note 5
- Note 6
- Lease
adjustment
29
29
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_____________________________________________
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 59 to 64.
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 page 44.
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.
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
£395,000 (2020 - £413,000) for the year under review. At the reporting date the aggregate balance due
in respect of fees invoiced was £83,000 (2020 - £118,000). Settlement is within normal credit terms.
At 30th June 2021, as disclosed in Notes 14 and 15 below, City Group owed the Company £Nil (2020 –
£ Nil) and it owed City Group £36,000 (2020 - £55,000) for fees. The Company was also owed
£1,990,000 (2020 - £1,985,000) by Lonfin Investments Limited as disclosed in Note 12 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 64, were:
Salaries
Social security costs
Defined contribution pension scheme contributions
The average weekly number of staff employed, excluding Group
Directors, was:
2021
£000
393
46
15
454
5
2020
£000
337
40
15
392
6
30
30
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
7. Tax Expense
The tax charge for the year comprises:
Tax on overseas investment income
Corporation tax
Deferred Tax
Tax charged
2021
£000
51
-
286
337
The tax assessed for the year is lower than the standard rate of corporation tax in the UK.
The differences are explained below:
Profit/(Loss) on ordinary activities before taxation
Taxation at 19% (2020 – 19%)
Effects of:
Non-taxable items – fair values and franked income
Loss utilised/(carried forward)
Tax charged
1,873
356
(289)
268
337
2020
£000
39
-
125
164
(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 From 1 April 2023, the Corporation Tax main rate
will increase gradually for profits over £50,000 reaching 25% for profits over £250,000. The Group’s
future tax charge, and effective tax rate are affected by this announcement 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.
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
2021
Per Share
2020
Per Share
0.60p
0.55p
0.60p
0.55p
The total dividends paid and to be paid in 2021 and 2020 were £359,000 (1.15p per share) and
£359,000 (1.15p per share) respectively. A final dividend in respect of the year ended 30th June 2021
of 0.60p per share is to be proposed at the AGM to be held on 1st December 2021. These financial
statements do not reflect this dividend.
During the year, old unclaimed dividends amounting £33,000 were credited back to the group.
31
31
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_____________________________________________
Notes to the financial statements (continued)
9. Earnings per share
Reconciliation of headline earnings
Basic and headline earnings/(loss) per share, based on the profit
attributable to the shareholders after tax and non-controlling interests
of £1,510,000 (2020 – loss £807,000) and on 31,207,479 shares
issued
Diluted earnings/(loss) per share, based on the loss attributable to the
shareholders after tax and non-controlling interests of £1,510,000
(2020 – loss £807,000) and on 31,207,479 shares issued plus 80,000
share options granted in 2016.
2021
2020
4.8p
(2.6)p
4.8p
(2.6)p
10. Property, Plant and Equipment
Group
At cost – 1st July 2020
Additions in the year
Disposals in the year
30th June 2021
Depreciation
Balance – 1st July 2020
Charges for the year
Disposals in the year
30th June 2021
Net book amount 30th June 2021
Net book amount 30th June 2020
The office equipment is held by a subsidiary company.
Office
Equipment
£000
84
-
-
84
53
10
-
63
22
31
32
32
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
11. Leases
The Group has an operating lease commitment in respect of an office property entered into in October
2018 which terminates in October 2028. During the year the directors have made the decision to take
advantage of the 5-year break clause in the lease agreement available to the Company. This has led to
adjustment to the carrying values of the Right of use asset and the Lease liability. The Company has
guaranteed the obligations under this lease.
Right of use asset – Office
At 1st July
Adjustment to cost
At 30th June
Depreciation
Balance – 1st July
Lease adjustment
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
2021
£000
620
(298)
322
(108)
(7)
(62)
(177)
145
2021
£000
71
107
178
71
107
-
2020
£000
614
6
620
(46)
-
(62)
(108)
512
2020
£000
52
519
571
52
251
268
Amounts recognised in the Consolidated Statement of Total
Comprehensive Income
Interest charged on lease liabilities
Gain in lease adjustment
29
36
31
-
33
33
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_____________________________________________
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
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 borrowed/(repaid) in the
year
Loan to subsidiary before
provision as at 30th June
2021
£000
89
-
1,985
5
1,990
2,079
2020
£000
89
-
2,120
(135)
1,985
2,074
The address of the registered office of these subsidiaries is 1 Ely Place, London EC1N 6RY.
13. Investments
General
Portfolio
£000
Strategic Holdings
Western
Selection
£000
Finsbury
Food Group
£000
Cost at 1st July 2020
Opening unrealised gain/(losses)
Opening valuation as at 1st July
2020
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 2021
Cost at 30th June 2021
Unrealised gain/(losses) at 30th June
2021
Closing valuation at 30th June 2021
6,038
3,910
9,948
1,706
(1,469)
700
(455)
1,651
12,081
6,975
5,106
12,081
6,159
(3,408)
2,751
-
-
-
-
(39)
2,712
6,159
(3,447)
2,712
1,723
1,817
3,540
-
-
-
-
1,950
5,490
1,723
3,767
5,490
Total
£000
13,920
2,319
16,239
1,706
(1,469)
700
(455)
3,562
20,283
14,857
5,426
20,283
34
34
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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
Strategic Holdings
Western
Selection
£000
6,159
(2,583)
Finsbury
Food Group
£000
1,723
2,297
11,383
3,576
4,020
163
(966)
633
(565)
(700)
9,948
-
-
-
-
(825)
2,751
-
-
-
-
(480)
3,540
Total
£000
14,090
4,889
18,979
163
(966)
633
(565)
(2,005)
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 2021 and 30th June 2020, 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 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
2021
£000
(111)
6,777
4,045
(790)
7,180
2,654
3
56p
4,396
34.5p
2,712
2020
£000
(180)
5,752
2,502
(127)
7,180
2,654
3
45p
3,560
35p
2,751
35
35
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_____________________________________________
Notes to the financial statements (continued)
14. Trade and other receivables
Trade debtors
Other debtors
Prepayments and accrued income
Group
Company
2021
£000
105
-
20
125
2020
£000
124
13
29
166
2021
£000
-
-
17
17
15. Trade and other payables
Group
Company
Group companies
Other creditors
Trade creditors
Accruals
Derivative financial instrument
16. Borrowings
Bank revolving credit facility
2021
£000
-
94
14
102
18
228
Group
2021
£000
650
2020
£000
-
92
10
86
37
225
2020
£000
-
2021
£000
36
-
11
41
18
106
Company
2021
£000
650
2020
£000
-
-
16
16
2020
£000
55
-
5
35
37
132
2020
£000
-
The Group has drawn down £650,000 on its revolving credit facility with Coutts & Co as of 30th June
2021; the facility is repayable in full on the 30th September 2022 and is presented as a non-current
liability. The revolving credit facility incurs interest at the rate of 2.75% per annum above the Bank’s
base rate. 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 2021 is a liability of £18,000,
and as it is not material, it is presented in Trade and other Payables, Note 15, as a Derivative financial
instrument.
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36
36
London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
17. Deferred taxation
The Group has provided £806,000 in respect of potential taxation on unrealised investment gains (2020
- £520,000). This is after taking into account available tax losses of £164,000 (2020: £223,000).
Balance at 1st July
Profit or Loss
Other Comprehensive Income
Balance at 30th June
Group
2021
£000
520
286
-
806
Group
2020
£000
395
125
-
520
Company
2021
£000
520
286
-
806
Company
2020
£000
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 2020 and 30th June 2021
Company and Group
2021
£000
2020
£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
Retained realised profits and losses
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.
Realised profits of the Group and Company less realised
losses and unrealised losses other than on investments.
The balances and movements on each of the above reserves are disclosed in the Consolidated and
Company Statement of Financial Positions on pages 20 and 21 and the Consolidated Statement of
Changes in Shareholders’ Equity on page 24.
37
37
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_____________________________________________
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 2021. 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 59 to 64.
20. Reconciliation of consolidated net cash flow to movement in net debt
Group
2020/2021
Cash at bank
Borrowings
Lease liability
Net Debt
2019/2020
Cash at bank
Borrowings
Lease liability
Net Debt
At start
of year
£000
269
-
(571)
(302)
240
(400)
(632)
(792)
Cash
Non-cash
Flow transactions
£000
£000
-
40
-
(650)
313
80
(530)
313
29
400
80
509
-
-
(19)
(19)
At end
of year
£000
309
(650)
(178)
(519)
269
-
(571)
(302)
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.
38
38
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
21. Financial Instruments (continued)
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 (listed investments)
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
2021
£000
8,202
12,081
125
309
210
178
650
18
2020
£000
6,291
9,948
166
269
188
571
-
37
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 2.85% (2020 – 3.25%) and on deposits
was nil. The sensitivity of the Group to a 1% change in interest rates would have been £3,800 in the
current year (2020 – £9,600).
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 2021 is a liability of £18,000 (2020 - £37,000).
The Group’s principal financial assets are its investment portfolios. The investment portfolios consist of
equity investments, for which an interest rate profile is not relevant. Interest is not charged on trade and
other receivables nor incurred on trade and other payables.
Currency Exposures
The table below shows the Group’s currency exposures. Such exposures comprise the monetary
assets, at fair values, that are not traded in Sterling.
Currency
Euro
Swiss Franc
US Dollar
Danish kroner
Swedish kroner
2021
£000
3,726
1,767
2,520
395
-
8,408
2020
£000
3,173
1,523
2,238
179
445
7,558
The sensitivity to a 1% change in the sterling exchange rate would be to increase or decrease the fair
values as set out by £83,247 in aggregate (2020 - £74,829).
39
39
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_____________________________________________
Notes to the financial statements (continued)
22. Financial Instruments (continued)
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, £650,000 of which was
drawn down at 30th June 2021. 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 £82,000 (2020 - £62,000) 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 £120,800 (2020 - £99,500) 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.
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
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
of trade and other debtors during the year, there are no provisions against these assets and none are
past their due date.
23. 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 2021,
is disclosed below:
Company
Lonfin Investments Limited
City Group PLC
Western Selection PLC*
*No individual investor has control of the company
Country % ownership
United
Kingdom
United
Kingdom
United
Kingdom
100%
51.4%
43.8%
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_____________________________________________
Directors’ Report
The Directors present their Report for the year ended 30th June 2021. 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 10.
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 48 to 53 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.
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
Going Concern
Covid-19 has continued to have a profound personal, social and financial impact around the world. The
United Kingdom has endured two additional lockdowns throughout the year, starting in November 2020
and January 2021, which continued to impact all areas of the economy. Although the Government
removed the majority of legal restrictions on the 19th July 2021, this was amidst rising cases due to the
Delta variant not only in the United Kingdom but also worldwide.
Consequently, there have been additional fluctuations on stock markets in both the United Kingdom and
globally, due to the uncertainty caused by the Delta variant. 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 influence 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. There is also concern
of the potential effects when the Government assistance provided throughout the pandemic so far is
withdrawn from companies that have struggled due to the lockdowns.
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 on a monthly basis. 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 38 to 40.
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.
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Directors’ Report (continued)
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 2026.
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 2020 and 2021 is set out below:
D.C. Marshall *
F.W.A. Lucas †
J.H. Maxwell
E.J. Beale
W.H. Marshall *
30th June 2021
30th June 2020
No. of Ordinary Shares
12,890,693
Shares
162,500
65,000
-
12,890,693
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
D.C. Marshall nor Mr W. H. Marshall had any beneficial interest in these shares (2019 – nil).
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 2021 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 1st December 2021.
Substantial Interests
In addition to the directors’ shareholdings shown above, as at 30th June 2021, 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 2021 and the date of this report.
Gross
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
Independent Auditor
The respective responsibilities of the Directors and the Independent Auditor, PKF Littlejohn LLP, in
connection with the financial statements appear on pages 12 to 18.
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 1 December 2021 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 48 to 53
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 1st December 2021, can be found on pages 66 to 67 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 58 to 64 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 1st
December 2021 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 1st December 2021.
Resolution 10
Allotment of share capital
Resolution 11 provides authority to allot shares in accordance with section 551 of the Companies Act
If passed, this resolution would
2006 in the period up to the conclusion of the Company’s AGM in 2022.
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.
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_____________________________________________
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 23rd September 2021 (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 11 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 11 as the directors
intend to do in respect of their own beneficial holdings which as at 23rd September 2021 (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 2021 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.
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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
for an
understanding of the development, performance or position of the Company’s business.
is necessary to report
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 2021, the Group
purchased electricity equating to a carbon dioxide equivalent of 10 tonnes (1 tCO2e/employee) (2020 –
10 tonnes).
By Order of the Board
City Group PLC
Company Secretary
24th September 2021
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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 30th June 2021, 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 2021.
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.
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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
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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 five occasions during the year; there were also two 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
Committee
Remuneration
Committee
Nomination
Committee
No. of meetings in the year to
30th June 2021
D.C. Marshall
F.W.A. Lucas
J.H. Maxwell
E.J. Beale
W. H. Marshall
5
5
5
5
5
5
2
-
2
2
2
-
1
-
1
1
-
-
1
-
1
1
-
-
The Board’s Committees
The Board now has four committees:
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.
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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 54 to 57.
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 61 to 63. 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.
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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.
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5252
London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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
24th September 2021
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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
effectiveness, resources and qualification.
independence, objectivity,
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 two occasions in the year ended 30th June 2021, in September 2020 and
February 2021. 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.
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
The Audit Committee has undertaken the following activities in the year ended 30th June 2021 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 2021 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 2021 Annual Report & Financial Statements to be ‘fair,
balanced and understandable’.
The Group’s 2021 interim results and report were also reviewed and considered by the Committee prior
to publication in February 2021.
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 2021 Annual Report &
Financial Statements and for the 2021 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 2021 and are set out in the Directors’ Report on page
42.
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 2026, could be made in the 2021 Annual Report
& Financial Statements for the reasons set out in the Directors’ Report on page 42.
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.
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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 2021, 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 November 2020.
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 2021 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.
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56
London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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
Dr Frank Lucas
Chairman of the Audit Committee
24th September 2021
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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
the Directors'
Remuneration Report Regulations and also meets the relevant requirements of the UK Listing Authority
Listing Rules.
in accordance with
The Directors’ Remuneration Report comprises three sections:
•
•
•
a remuneration policy, which sets out the framework for remuneration arrangements for the
Directors;
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.
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58
London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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 around
September 2022.
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 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.
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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 2021 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.
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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 2021 and describes how the Company’s Remuneration Policy will be
implemented for the year ending 30th June 2021.
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 2021 (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 2021.
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
Year ended 30th June
2017
2018
2019
2020
2021
Year ending 30th June
2022
£
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 2021, 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 2022.
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Directors’ Remuneration Report (continued)
Non-Executive Directors
Mr. D. C. Marshall
Mr. J.H. Maxwell
Dr. F.W.A. Lucas
Mr E.J. Beale ⧫
Mr W.H. Marshall
Total fees payable
Year ending
30th June 2022
Total fees paid
Year ended
30th June 2021
Year ended
30th June 2020
£
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
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
The remuneration of the Chairman and the Directors for the year ending 30th June 2022 will be at the
same level as for the year ended 30th June 2021.
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 September 2022.
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 2021,
which has been audited, is set out below.
Year ended 30th June
2019
2020
2021
The Board and employees of
the Group’s total remuneration
(audited)
£
460,000
468,000
530,000
Dividends paid to Shareholders
(audited)
£
360,000
359,000
359,000
Directors’ interests in the Company
The interests of the Directors (and their connected persons) at 30th June 2021 are as set out in the table
in the Directors’ Report on page 44.
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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 2021 and no option awards are
envisaged for the year ending 30th June 2022.
No Directors or current 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.
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 2021 and no bonuses or other discretionary payments will be paid in the year
ending 30th June 2022. 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
2021 and no pension contributions will be paid by the Company in the year ending 30th June 2022. 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 2021 and no such payments will be paid in the year ending 30th
June 2022. 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 2021. This information has been audited.
It is anticipated that, if new Non-Executive Directors are appointed in the year ending 30th June 2022 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 2022 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 2022 will be reviewed and considered by the board of City Group,
which includes David Marshall and Edward Beale.
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_____________________________________________
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 2021.
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 2021 and the remuneration
arrangements for the Board for the year ending 30th June 2021. A resolution to approve the Directors’
Remuneration Report, will be proposed at the Company’s AGM to be held on 1st December this year at
which the financial statements will be approved.
This Directors’ Remuneration Report was approved by the Board and signed on its behalf by:
John Maxwell
Chairman of the Remuneration Committee
24th September 2021
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
Summary of Results
For the five years ended 30th June 2021
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
Net assets per share
Dividend per share
2021
£000
2020
£000
2019
£000
2018
£000
2017
£000
1,560
11,584
5,749
18,893
129
19,022
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
8,369
6,834
8,203
10,663
10,687
12,081
125
309
12,515
(1,862)
19,022
60.5p
1.15p
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
50.6p
1.15p
58.6p
1.15p
65.7p
1.15p
65.9p
1.1p
65
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_____________________________________________
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 1st December 2021 at 12.30 p.m. (14.30
p.m. South Africa time).
In order to ensure the safety of those planning to attend the Annual General Meeting and that
the appropriate safety arrangements are in place, it is requested that shareholders inform the
company secretary of their intention to attend the Annual General Meeting by email to
mail@citygroup.com.
If shareholders do not wish to attend, we strongly encourage you to appoint the Chairman as
your proxy and submit the proxy form as soon as possible. Questions may also be submit-
ted by email and responses. will be provide subsequent to the meeting.
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.
5.
6.
7.
8.
9.
To receive the financial statements for the year ended 30th June 2021, together with
the reports of the directors and auditors thereon.
To declare a final dividend for the year ended 30th June 2021 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 2021.
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.
To re-elect Dr F.W.A. Lucas as a director, who is subject to annual re-election and who
retires and offers himself for re-election
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.
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
10.
11.
(a)
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 2022, 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.
THAT,
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;
(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
67
1 Ely Place
London EC1N 6RY
24th September 2021
67
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_____________________________________________
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.
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. (14.30 p.m.
South Africa time) on 29th November 2021.
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. (14.30 p.m. South Africa time) on
29th November 2021
Only shareholders registered in the register of members of the Company as at 18.00 p.m.
(20.00 p.m. South Africa time) on 26th November 2021 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 23rd 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 23rd 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:
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London Finance & Investment Group PLC___________
London Finance & Investment Group PLC
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. (14.30 p.m.
South Africa time) on 29th November 2020.
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
The last date to trade in order to be eligible to participate in and vote at the Annual
General Meeting
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
date’)
Last day for lodging forms of proxy by 14.30 p.m. (SA time)
Date of the Annual General Meeting at 14.30 p.m. (SA time)
Result of Annual General Meeting published on SENS
2021
Thursday 7th
October
Friday 8th
October
Tuesday 23rd
November
Friday 26th
November
Monday, 29th
November
Wednesday,
1st
December
Wednesday,
1st
December
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.
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London Finance & Investment Group PLC
_____________________________________________
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 1st December 2021 at 12:30 p.m. (14.30 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.
RESOLUTIONS
Ordinary Resolutions
For
Against
Withheld
✃
1. To receive the financial statements for the year ended 30th
June 2021, together with the reports of the directors and
auditors thereon.
2. To declare a final dividend for the year ended 30thJune 2021.
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………………………………………2021
Signature……………………………………
70
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London Finance & Investment Group PLC___________
Notes
1.
2.
3.
4.
6.
7.
8.
The shareholders are encouraged to nominate the Chairman as their proxy.
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
by mail to P.O. Box 61051, Marshalltown 2107, South Africa
o
not later than 12:30 p.m. (14.30 p.m. South Africa time) on 29th November 2021. (See Note 11
to the Notice above).
Completion and return of this form of proxy will be taken as your final votes where the Chairman
has been appointed as the proxy.
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.
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London Finance &
Investment Group PLC
Annual Report and Financial Statements
30th June 2021
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