London Finance &
Investment Group PLC
Annual Report and Financial Statements
30 June 2024
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 has held
investments in United Kingdom listed companies where it has Directors in common.
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, provides office accommodation, company secretarial, finance
and head office services to Lonfin and other clients requiring a London presence, including companies
in which Lonfin has an investment.
The Company and its subsidiaries, all of which are incorporated in England, have their principal place
of business and their registered office at Suite 1.01, Central Court, 25 Southampton Buildings, London
WC2A 1AL.
Contents
Page
Directors
1
Corporate Contacts
2
Summary of Net Assets
3
Financial Calendar
3
Strategic Report
4
Composition of General Portfolio
11
Statement of Directors’ Responsibilities in Respect of the Financial Statements
12
Independent Auditor’s Report To The Members Of London Finance & Investment Group Plc
13
Consolidated Statement of Total Comprehensive Income
20
Consolidated Statement of Financial Position
21
Company Statement of Financial Position
22
Consolidated Statement of Cash Flows
23
Company Statement of Cash Flows
24
Consolidated Statement of Changes in Shareholders’ Equity
25
Company Statement of Changes in Shareholders’ Equity
26
Notes to the Financial Statements
27
Directors’ Report
43
Corporate Governance Statement
50
Audit Committee Report
56
Directors’ Remuneration Report
59
Task Force on Climate-related financial disclosures (“TCFD”) Report
66
Summary of Results
68
NOTICE OF ANNUAL GENERAL MEETING
69
Proxy Form
Enclosed
Directors
W.H. MARSHALL, Chairman ♦
Warwick Marshall joined the Board in January 2019. Warwick is a son of David Marshall, who was
the Company’s Chairman until his retirement on 29 February 2024. On that date, Warwick was
appointed as Chairman. Warwick 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. Warwick lives in Zug, Switzerland and he is a director
of various other group operating companies and has extensive investment experience in his private
capacity.
D.C. MARSHALL, Non-Executive Chairman (retired 29 February 2024)
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, 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.
* Member of the Audit Committee
Member of the Nomination Committee
♦ Member of the Investment Committee • Member of the Remuneration Committee
1
London Finance & Investment Group PLC
Corporate Contacts
United Kingdom
Republic of South Africa
Company
Secretary
Registered
Office
City Group PLC
Suite 1.01, Central Court
25 Southampton Buildings
London, WC2A 1AL
United Kingdom
Tel: + 44 (0) 20 3709 8740
11 Sunbury Park
La Lucia Ridge Office Estate
La Lucia 4051
Durban, South Africa
Tel: +27 (0)31 566 7600
Company
Registered
Number
Website
201151
www.city-group.com/london-finance-investment-group-plc
Registrars
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, South Africa
(P.O. Box 61051, Marshalltown 2107)
Tel: +27 11 370 5000
Sponsor
JSE Limited Sponsor:
Questco Corporate Advisory
Ground Floor, Block C,
Investment Place, 10th Road,
Hyde Park, 2196 Johannesburg,
South Africa
Tel: +27 11 011 9212
Independent
Auditor
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London E14 4HD
2
Summary of Net Assets
At 30 June
2024
2023
£000
£000
Strategic Investments at fair value:
Western Selection Ltd
37
3,144
37
3,144
General Equity Portfolio at fair value
14,032
15,496
Tangible non-current assets
3
3
Right of use asset
-
16
Cash, bank balances and deposits
9,460
1,264
Other net current liabilities
(621)
(238)
Lease liabilities
-
(33)
Deferred taxation
(568)
(1,012)
Non-Controlling interests
-
(157)
Net assets attributable to shareholders, including investments
at fair value
22,343
18,483
Net assets per share
71.6p
59.2p
Dividends*
Interim
0.60p
0.55p
Proposed Final
0.60p
0.60p
Mid-market price on 30 June
62.5p
38.5p
*Information on Dividends is set out in note 8
Financial Calendar
Announcement of
Final Results for the
year ended 30 June 2024
26 September 2024
Annual General Meeting
28 November 2024
Final Dividend for 2024
Payable on 18 December 2024 to shareholders on the register of
members at 6 December 2024
Half year results to
31 December 2024
to be announced in February 2025
Interim Dividend for 2024
to be announced in February 2025
3
London Finance & Investment Group PLC
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’. ‘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 for 2024 have increased from £18,640,000 for the previous year (restated) to
£22,343,000 and have increased 41.5% over the last five years. Shareholders’ total dividends for 2024
will be 1.2p per share. Information on the Group’s performance against the Board’s key performance
indicators (KPIs) is set out on page 8 of this report.
Results
Net assets per share have increased to 71.6p (2023 – 59.2p per share)
The restructuring of Western Selection, which is our only Strategic investment, resulted in a return
of capital of £6,291,000 and a decrease in value of the Strategic Investments, from £3,144,000
to £36,858.
The value of the General Portfolio has decreased, including investment purchases and sales,
over the year, by 9.4% from £15,496,000 to £14,032,000.
The unrealised fair value adjustment to the General Portfolio investments over the period has
decreased by £1,925,000.
The decrease in Group operating costs is mainly a result of lower office costs
A final dividend of 0.60p per share is recommended, making a total of 1.2p per share for the year
(2023 – 1.15p)
The Company and its subsidiaries (the “Group”) recorded an operating profit for the year, before interest,
tax, profit on bargain purchase and changes to the fair value adjustments of investments of £3,830,000,
compared to operating profit for the previous year, before tax and changes to the fair value adjustments
of investments, of £762,000. Basic and headline earnings per share are 13.6p (2023 restated – 5.7p).
4
Strategic Report (continued)
Western Selection Ltd (“Western”)
The Company’s remaining strategic investment has decided to cease operations and return capital to
shareholders. As a consequence, in February 2024, we received £6,291,000 and subsequent to the year-
end a further £92,000. To assist in this process, in June 2024, the Company acquired Western’s
shareholding in City Group for £50,000, bringing ownership up to 100%, and Western’s shareholding in
Industrial & Commercial Holdings plc for £50,000. The shareholding in Industrial & Commercial Holdings
plc was subsequently sold in August 2024 for £50,000.
At 30 June 2024, the Group held 45,786 ordinary shares, being 43.8% of the issued share capital of
Western.
Following the year-end, Western shareholders approved a final return of capital and a capital reduction.
As a result, Western’s issued share capital has reduced from 104,555 ordinary shares to one ordinary
share which is held by the Company’s subsidiary, Lonfin Investments Limited, Steps will now be taken to
wind up Western.
Western did not pay an interim dividend this year and does not propose a final dividend (2023 – Nil).
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. An error in the
application of accounting standards has meant that in previous years changes in the value of the
Company’s investment in Western were incorrectly recognised in Other Comprehensive Income when
they should have been recognised in Profit and Loss. This has been corrected in these accounts and has
no effect on shareholders’ funds. This correction increases prior year profit by £393,000 and prior year
earnings per share by 1.3p.
Warwick Marshall is the non-executive Chairman and Edward Beale is a non-executive director of
Western.
General Portfolio
The investments comprising the General Portfolio at 30 June 2024 are listed on page 11.
The portfolio is diverse with material interests in Food and Beverages, Natural Resources and Chemicals.
We believe that the portfolio of quality companies we hold has the potential to outperform the market in
the medium to long-term.
At 30 June 2024, the number of holdings in the General Portfolio was 31 (2023 – 37). The value of the
General Portfolio over the year has decreased by £1,464,000 (2023 - increased by £1,441,000) from
£15,496,000 to £14,032,000. This 9.4% decrease includes investment purchases during the year of
£6,512,000 and investment sales (including selling expenses) during the same period of £8,891,000.
As at 30 June 2024, the fair value of the General Portfolio investments, after adjusting for sales, has
decreased by 44.3%.
5
London Finance & Investment Group PLC
Directors, Operations and Employees
On 1 March 2024, it was announced that Mr. David Marshall had stepped down from his role as Chairman
and retired from the Board.
David Marshall has been with the Company since 1971 and the Board wishes to express its profound
gratitude to David for his contribution to and his stewardship of the Company throughout this period.
On 1 March 2024, it was also announced that Mr Warwick Marshall had been appointed as the new
Chairman of the Company with effect from 29 February 2024.
All of the Group’s operations, 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 5 people.
Further information on Directors and employees is set out in the Directors’ Report on page 48 of this
document.
Greenhouse Gas Emissions
Scope 2 emissions. During the year ended 30 June 2024, the Group’s electricity consumption for its
leased office premises in London (July to August last year) and the Group’s electricity and gas
consumption for our serviced office premises in London (from 1 September last year) totalled 1,789
KgCO2e equating to a carbon dioxide equivalent of 1.8 tonnes (1.8 tCO2e) (2023: 1,167 KgCO2e
equating to a carbon dioxide equivalent of 1.1 tonnes (1.1 tCO2e) The Company’s report on Task Force
on climate-related financial disclosures is set out on page 66 of this document.
Dividend Declaration
The Board recommends a final dividend of 0.60p (ZAR 13.92988 cents) per share, making a total of 1.2p
(ZAR 27.85976 cents) per ordinary share for the year (2023 – 1.15p). Subject to shareholders’ approval
at the Company’s Annual General Meeting (“AGM”) to be held on 28 November 2024, the dividend will
be paid on Wednesday, 18 December 2024 to those shareholders on the register at the close of business
on Friday, 6 December 2024. Shareholders on the South African register will receive their dividend in
South African Rand converted from Pounds Sterling (“Sterling”) at the closing rate of exchange on
Thursday, 19 September 2024 being GBP1= ZAR 23.21646.
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, 6 December 2024.
•
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)
Tuesday, 3 December 2024
Shares trade ex-dividend (SA)
Wednesday, 4 December 2024
Shares trade ex-dividend (UK)
Thursday, 5 December 2024
Record date (UK and SA)
Friday, 6 December 2024
Pay date
Wednesday, 18 December 2024
6
Strategic Report (continued)
Share certificates may not be de-materialised or re-materialised between Wednesday, 4 December 2024
and Friday, 6 December 2024, both days inclusive. Shares may not be transferred between the registers
in London and South Africa during this period either.
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 13.92988 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 11.14390 cents per share. The
dividend withholding tax and the information contained in this paragraph is only of direct application to
shareholders registered on the South African register, who should direct any questions about the
application of the dividend withholding tax to Computershare Investor Services Proprietary Limited, Tel:
+27 11 370 5000.
Financial Instruments, Principal Risks and Uncertainties
The financial instruments of the Group, in addition to its investments, comprise cash to finance those
investments. The Company also has an overdraft facility with its new banking provider, Credit-Suisse.
The interest rate on any funds drawn down is floating interest and for the current reporting period ranges
between 4.5% and 5.55%. 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, including inflation and energy concerns
The Group’s investment performance will be affected by general economic and market conditions.
Although the Group cannot predict the level of growth in the global economy, as with most businesses,
it believes a period of weak market growth will have an adverse effect on its investments. Volatility
relating to the Group’s investments, including movements in interest rates and returns from equity and
other investments will impact upon the value of the Group’s investment portfolio.
The risk has been increased by global energy supply and food shortage concerns and the rising cost
of living and inflation. These factors diminish investor confidence as well as increasing market
uncertainty which can lead to a downturn in the markets. There have been large fluctuations on the
stock markets in both the United Kingdom and globally, although stock market indices have recovered
substantially since their lows in March 2023. The long-term effect continues to be on maintaining
dividend policies and on increased market volatility.
Investments and General Portfolio investments
A number of external factors outside the control of the Group, such as the continuing war in Ukraine,
the energy supply and food shortage concerns and rising inflation, 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.
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.
7
London Finance & Investment Group PLC
The depth and overlap of experience of the Directors means that there is no key-man dependency. Note
20 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 is 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.
2024
2023
2022
2021
2020
Net assets per share
71.6
59.2
54.8p
60.5p
50.6p
Change in net assets per share over 5
years
41.5%
1.2%
(16.2%)
(7.7%)
(17.6%)
Dividends (net) per share
1.20p
1.15p
1.15p
1.15p
1.15p
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 facility with
Credit-Suisse.
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 47. Similar resolutions have been
approved by shareholders at the Company’s previous AGMs.
S172 Statement
In line with their duties as set out in Section 172 of the Companies Act 2006, the 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 Section172 (1).
As an investment Group, the goal of the Group is to provide financial returns to the shareholders over the
medium to long-term. In this respect the Directors, at all times, have due consideration as to the potential
effect of investment decisions and the benefit they may bring to the shareholders.
8
Strategic Report (continued)
Key investment decisions and matters that are of strategic importance to the Group are appropriately
informed by Section 172 factors. The Company’s website, www.city-group.com/london-finance-and-in-
vestment -group-plc, is available to all shareholders and other stakeholders and key decisions of the
Board are announced to the London Stock Exchange through a Regulatory News Service.
Due to the nature of the Group, the Company does not have executives or employees to consider as
stakeholders except in the case of the staff of City Group PLC, the Company Secretary. Accordingly, with
regards to wider stakeholders, the Directors consider advisers and suppliers to be amongst the key stake-
holders of the Group. In this respect, the Directors engage with these stakeholders on a frequent basis in
order to build and strengthen such relationships. All stakeholders are encouraged to communicate with
the Board through the Chairman or through City Group PLC.
The views of and impact upon the wider stakeholders of the Group are considered as part of the Board
decision-making process including engaging with stakeholders to ensure they have a clear understanding
of the long-term goals of the Group and how the Directors intend to achieve these goals.
The 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 require-
ments to be implemented by the Group. The Directors have also implemented policies to ensure the
integrity and sustainability of the Group is upheld.
The Directors’ Report and Corporate Governance Statement contain further details as to how the Direc-
tors undertake their decisions with regard to Section 172 of the Companies Act 2006 and the effect on
the decision making of the Board.
Outlook
Early in 2022, Russia invaded Ukraine and, at the date of this report, the war between Russia and Ukraine
shows no sign of abating.
The staunch defence put up by the Ukrainians has been remarkable. Casualties are estimated by the
United Kingdom’s Ministry of Defence to total in the hundreds of thousands.
Extensive dis-investment by Western companies from Russia coupled to sanctions levied by many
nations, including the United Kingdom, on Russia have led to economic dislocations worldwide and also
significant derivative effects have been felt in the energy markets.
On 7 October 2023, the world saw horrific terrorist attacks by Hamas, the government of Gaza, on Israel.
These attacks and those of Hezbollah, another Islamist militia in Lebanon, as well as those of the Houthi
in Yemen on commercial shipping in the Red Sea and on Israel, has led to severely heightened global
tensions. Iran has carried out combined mass ballistic missile, drone and rocket attacks on Israel and
these have been, to date, repulsed by a coalition of countries including the United Kingdom.
The conflicts between Hamas, Hezbollah and the Houthis - all proxies of Iran - versus Israel shows no
sign of abating either and there is no way of determining at this stage how potentially maximalist positions
can be ameliorated downwards. It is hard to negotiate with terrorists no doubt and especially so when
moral clarity is subjected to the fogs of war.
Chinese data also points to a diminution in the historical growth rates previously achieved and a polarised
election campaign with no clear front runner in the world’s only true superpower - the United States - adds
political uncertainty to the global mix.
In this context, respected commentators the world over give a myriad of differing views on the effect these
global issues have on equities, bonds and other investments.
9
London Finance & Investment Group PLC
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. The cost of being a listed company continues to
rise inexorably, and the Board is reviewing methods of achieving a step change in size in order that costs
become more proportionate to the size of the business and/or to make savings wherever possible in the
general and administrative costs burden. Audit costs have risen at rates that exceed inflation by a large
quantum and so the frictional costs of merely being listed erode, to a degree, the advantages of common
purpose in a listing – for the smaller company. The Board continues to seek out investments which will
generate growth in shareholder value. Innovations in medicine especially in pharmacology continue to be
made and can result in spectacular outperformances. Similar outperformances in some technology and
software stocks are also increasingly in evidence and the global nature of these behemoth successful
companies has also given them specific size advantages that further lead to productivity and synergistic
effects of some magnitude. The Board continues to pursue its current Investment Policy and will advise
shareholders of any proposed changes.
By Order of the Board
City Group PLC
Company Secretary
25 September 2024
10
Composition of General Portfolio
At 30 June 2024
£000
%
Shell
627
4.5
Exxon Mobil Corp
587
4.2
Chevron Corp USD 0.75
543
3.9
Aviva
519
3.7
Linde AG
517
3.7
BHP Group
516
3.7
Rio Tinto
511
3.6
Legal & General
510
3.6
Glencore PLC
503
3.6
Barclays
488
3.5
Coca-Cola
476
3.4
Bank of America
473
3.4
Deutsche Post
467
3.3
Totalenergies SE
465
3.3
BAE Systems Plc
455
3.2
Halliburton
448
3.2
Nutrien Ltd
437
3.1
Harbour
431
3.1
Microsoft
428
3.0
Heineken Holding
412
2.9
Mercedes-Benz Group
411
2.9
Diageo
408
2.9
LVMH Moet Hennessey
407
2.9
Nestle
404
2.9
Energean
397
2.8
Unilever
397
2.8
Deere & Co
390
2.8
Kraft Heinz
389
2.8
Pernod Ricard
381
2.7
Fedex
343
2.5
Michelin
292
2.1
14,032
100.0
Analysis by currency of market on which stock is traded
US Dollar
5,033
35.9
Euro
2,582
18.4
GB Pound
4,618
32.9
Swiss Franc
1,283
9.1
AUS Dollar
516
3.7
14,032
100
The Company’s investment in overseas multinational companies provides some protection against
significant falls in the value of Sterling.
11
London Finance & Investment Group PLC
Statement of Directors’ Responsibilities in Respect of the
Financial Statements
The Directors are responsible for preparing the Strategic Report, the Directors’ Report, the Corporate
Governance Statement, the Audit Committee Report, the Directors’ Remuneration Report and the
financial statements in accordance with applicable law and regulations.
Company law requires directors to prepare financial statements for each financial year. Under that law
the Directors have elected to prepare the financial statements in accordance with UK-adopted
International Accounting Standards. 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 UK adopted 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. 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 the website of its subsidiary, City Group. 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 UK-adopted International Accounting Stand-
ards, give a true and fair view of the assets, liabilities, financial position and profit/loss of the Group
and the Parent Company.
•
The Directors’ Report contained in the Annual Report includes a fair review of the development and
performance of the business and the position of the Group and the Parent Company, together with
a description of the principal risks and uncertainties that they face, and
•
The Annual Report, taken as a whole, is fair, balanced and understandable and provides the infor-
mation necessary for shareholders to assess the Group’s performance, business model and strat-
egy.
By Order of the Board
City Group PLC
Company Secretary
25 September 2024
12
Independent Auditor’s Report To The Members Of London Finance &
Investment Group Plc
Opinion
We have audited the financial statements of London Finance & Investment Group PLC (the ‘parent
company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2024 which comprise the
Consolidated Statement of Total Comprehensive Income, the Consolidated and Company Statements of
Financial Position, the Consolidated and Company Statements of Cash Flows, the Consolidated and
Company Statements of Changes in Shareholders’ Equity and notes to the financial statements, including
significant accounting policies. The financial reporting framework that has been applied in their
preparation is applicable law and UK-adopted international accounting standards 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 2024 and of the group’s profit for the year then ended;
•
the group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards;
•
the parent company financial statements have been properly prepared in accordance with UK-
adopted international accounting standards 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
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 the 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:
•
Reviewing management’s assessment of going concern, evaluating, and challenging manage-
ment’s key assumptions and inputs in their consideration of the future financial performance and
cash flow requirements; and
•
Assessing factors available to management including their ability to generate cash from their
investment portfolio, should that be required.
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.
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.
13
London Finance & Investment Group PLC
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.
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.
Materiality measure
Key considerations and benchmarks
Amount
£
Group materiality – Based on
1.5 % of invested assets
(2023: 1%) (the aggregate of
non-current and current
investments)
Assessing
whether
the
financial
statements as a whole present a true and
fair view.
Materiality is based on the investment
balance on the basis that this is the key
driver of shareholder value.
2024
Materiality: £213,000
2023
Materiality: £190,000
Parent company materiality:
-
Investment balances
(based on 1% of invest-
ments balance)
-
Non-investment bal-
ances (based on 3.5% of
turnover)
Under ISA (UK) 320 ‘Materiality in
Planning and Performing an Audit’, an
auditor is required to consider whether
there are one or more classes of
transactions or account balances, for
which misstatements of lesser amounts
than materiality could reasonably be
expected to influence the economic
decisions of users taken on the basis of
the financial statements.
Materiality for investment balances is
based on 1% of the year-end portfolio
balance given that this is the most
material balance on the balance sheet
and the key driver of shareholder value
as mentioned above for group materiality.
Balances not related to investments have
been assigned a lower materiality of
3.5% based on turnover due to the
valuation of the general portfolio being
significantly more material than non-
investment related balances. There
would be a risk that a large number of
non-investment related balances would
fall out of scope for testing if the
materiality
relating
to
investment
balances was also applied to these. It is
therefore considered appropriate to use
revenue
as
the
benchmark
for
determining materiality for balances not
directly related to investments.
2024
Investment balances
Materiality: £185,000
Performance Materiality: £148,000
Triviality: £9,000
Non-investment balances
Materiality: £76,000
Performance Materiality: £60,000
Triviality: £3,000
2023
Investment balances
Materiality: £185,000
Performance Materiality: £148,400
Triviality: £9,250
Non-investment balances
Materiality: £128,000
Performance Materiality: £102,400
Triviality: £6,400
14
Performance materiality represents amounts set by the auditor at less than the overall materiality to re-
duce the probability that the aggregate of uncorrected and undetected misstatements exceeds the overall
materiality. In setting this we consider the overall control environment and our experience from previous
audits. Based on these factors we have set performance materiality for the group at 80% (2023: 80%) of
our overall materiality at £170,000 (2023: £152,000). Performance materiality for the parent company
was also set at 80% (2023: 80%).
We have applied lower materiality levels in the audit of the component entities i.e. the parent company,
City Group PLC and Lonfin Investments Limited.
We agreed with the Audit Committee that we would report all audit differences in excess of 5% (2023:
5%) of overall materiality at £10,000 (2023: £9,500) as well as differences below that threshold that, in
our view, warranted reporting on qualitative grounds.
We also report on disclosure matters that we identified when assessing the overall presentation and
disclosure of the financial statements to the Audit Committee.
Our approach to the audit
Our audit approach was developed by obtaining an understanding of the group’s and parent company’s
activities, the key 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 subsidiary companies’ transactions and balances, which were most likely to give rise to a
material misstatement and were most susceptible to irregularities including fraud or error. Specifically, we
identified what we considered to be key audit matters and planned our audit approach accordingly.
The group and all its components were subject to a full scope audit undertaken from our office based in
London by a team with relevant sector experience.
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 Matter
How our scope addressed this matter
Valuation of investments (Note 13)
The valuation of the portfolio at 30 June 2024
was
£14,069,000
(2023:
£18,640,000),
comprising a general portfolio of listed
investments and one strategic investment in
Western Selection Ltd.
The valuation of investments, which are held
at fair value, was considered a key audit
matter as investments are the single most
significant
component
of
the
financial
statements and the fair value movements
thereon could have a pervasive impact on the
financial statements.
Furthermore, the general investments are in
companies whose shares are quoted on
recognised stock exchanges; thus, their bid
prices are readily available.
Our audit procedures included:
We considered the design and implementation of
controls in place over the valuation of investments
and
also
reviewed
the
assumptions
and
underlying evidence supporting the year end
valuations to ensure that they were in line with
IFRS
9,
Financial
Instruments
and
the
International Private Equity and Venture Capital
Valuation (“IPEV”) Guidelines..
We reviewed management’s valuation reports
prepared for all investments considering whether,
in our professional judgement, the methodology is
the most appropriate in the circumstances under
the IPEV guidelines and, for 100% of the
investments we:
15
London Finance & Investment Group PLC
•
Reperformed the calculation of the investment
valuation;
•
For the general portfolio, we verified the key
inputs (bid price and stockholdings) to the
valuation to independent information;
•
For the strategic investments, we assessed for
impairment by reviewing the net asset value of
these investments;
•
Tested 100% of the general investments
balance using a valuation tool which provides
a range of information and prices and real-
time investment reports; and
•
Agreed the existence of investments against
custodian reports.
Based on our audit procedures performed, the
valuation of investments is reasonable.
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.
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:
•
the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
•
the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In the light of 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:
•
adequate accounting records have not been kept by the parent company, or returns adequate for
our audit have not been received from branches not visited by us; or
•
the parent company financial statements and the part of the directors’ remuneration report to be
audited are not in agreement with the accounting records and returns; or
16
•
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.
Corporate governance statement
We have reviewed the directors' statement in relation to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the group’s and parent company's compliance with
the provisions of the UK Corporate Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements
of the Corporate Governance Statement is materially consistent with the financial statements or our
knowledge obtained during the audit:
•
Directors' statement with regards the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set out on page 44;
•
Directors’ explanation as to their assessment of the group’s prospects, the period this
assessment covers and why the period is appropriate set out on page 44;
•
Directors’ statement on whether they have a reasonable expectation that the group will be able
to continue in operation and meet its liabilities set out on page 44;
•
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 56;
•
Board’s confirmation that it has carried out a robust assessment of the emerging and principal
risks set out on page 44;
•
The section of the annual report that describes the review of effectiveness of risk management
and internal control systems set out on page 54; and
•
The section describing the work of the audit committee set out on page 56.
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:
17
London Finance & Investment Group PLC
•
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 effect
on the financial statements. We obtained our understanding in this regard through discussions
with management, industry research, application of cumulative audit knowledge and experience
of the investment 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, UK Corporate Gov-
ernance 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 regulations.
These procedures included, but were not limited to:
o
Making enquiries of management:
o
Reviewing board minutes and regulatory news service announcements with respect to
the group;
o
Reviewing legal and regulatory correspondence; and
o
Reviewing financial statement disclosures and testing to supporting documentation with
respect to balances such as legal expenses to assess compliance with applicable laws
and regulations.
•
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 manage-
ment override of controls, that a potential management bias was identified in relation to the valu-
ation of investments. We addressed this risk by challenging management’s valuations of strategic
investments, whilst considering the performance and liquidity of those investments. In regards to
the general investments portfolio, we also reviewed and compared the key inputs used in the
valuation by using a tool which provides a range of information and prices and real-time invest-
ment reports (refer to Key Audit Matters section).
•
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.
•
With respect to compliance with the laws and regulations applicable to the Group such the Com-
panies Act, FCA Listing Rules and UK Corporate Governance Code, we addressed the risk of
non-compliance through a detailed review of the contents of the Annual Report and Financial
Statements to ensure these had been prepared in accordance with the applicable legal require-
ments.
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 by the Audit Committee, we were appointed by the Board on 30 November
2016 to audit the financial statements for the period ended June 2017 and subsequent financial periods.
Our total uninterrupted period of engagement is 7 years, covering the periods ending 2017 to 2024.
18
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.
Azhar Rana (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor
London E14 4HD
25 September 2024
19
London Finance & Investment Group PLC
Consolidated Statement of Total Comprehensive Income
For the year ended 30 June
Restated*
Operating Income
Notes
2024
2023
£000
£000
Dividends receivable
614
586
Management service fees
361
352
Rental and other income
138
97
Profit on disposal of General portfolio investments
403
633
Profit on disposal of Western Selection
3,183
-
4,699
1,668
Administrative expenses
Investment operations
3
(425)
(495)
Management services
3
(444)
(411)
Total administrative expenses
(869)
(906)
Operating profit
3
3,830
762
Unrealised changes in the carrying value of General Portfolio
investments
13
512
956
Unrealised changes in the carrying value of Western Selection
1
393
Profit on bargain purchase
83
-
Interest payable
6
(7)
Profit before taxation
4,432
2,104
Income tax expense
7
(222)
(312)
Profit after taxation
4,210
1,792
Non-controlling interest
24
(16)
Profit attributable to shareholders
4,234
1,776
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Profit on disposal of Strategic investments
-
118
Unrealised changes in the carrying value of Strategic
investments
-
-
Other taxation -
Income tax on disposal of strategic investments
-
(146)
Total Other Comprehensive (Loss)/Income attributable to
shareholders
-
(28)
Total Comprehensive Income attributable to owners of the
parent
4,234
1,748
Reconciliation of headline earnings
Basic and diluted earnings per share
9
13.6p
5.7p
Adjustment for the unrealised changes in the carrying value of
investments, net of tax
-
-
Headline earnings per share
9
13.6p
5.7p
*Correction of error, see note 22
The notes on pages 27 to 42 form part of these financial statements.
20
Consolidated Statement of Financial Position
Restated*
Restated*
30 Jun
2024
30 Jun
2023
1 Jul
2022
Notes
£000
£000
£000
Non-current Assets
Property, Plant and Equipment
10
3
3
12
Right of use asset
11
-
17
81
Strategic investments at fair value though profit
or loss
13
37
3,144
2,751
Strategic investments at fair value though other
comprehensive income
13
-
-
1,206
40
3,164
4,050
Current Assets
General portfolio investments at fair value
through profit or loss
13
14,032
15,496
14,055
Investment held for sale
50
-
-
Trade and other receivables
14
59
100
109
Cash and cash equivalents
9,460
1,264
407
23,601
16,860
14,571
Current Liabilities
Overdraft
-
-
(66)
Trade and other payables
15
(149)
(151)
(171)
Lease liabilities
11
-
(33)
(75)
Current tax liabilities
(581)
(188)
(198)
(730)
(372)
(510)
Net Current Assets
22,871
16,488
14,061
Non-current Liabilities
Lease liabilities
-
-
(33)
Deferred tax liabilities
16
(568)
(1,012)
(843)
(568)
(1,012)
(876)
Total Assets less Total Liabilities
22,343
18,640
17,235
Capital and Reserves
Ordinary share capital
17
1,560
1,560
1,560
Share premium
2,320
2,320
2,320
Unrealised profits and losses on investments
1,850
225
11
Share of retained realised profits and losses of
subsidiaries
160
4,906
5,331
Company’s retained realised profits and losses
16,453
9,472
7,872
Capital and reserves attributable to owners
22,343
18,483
17,094
Non-controlling interests
-
157
141
Total Capital and Reserves
22,343
18,640
17,235
*Correction of error, see note 22
Approved and authorised by the Board
on 25 September 2024
Edward Beale
Director
The notes on pages 27 to 42 form part of these financial statements.
21
London Finance & Investment Group PLC
Company Statement of Financial Position
At 30 June
2024
2023
Notes
£000
£000
Non-current Assets
Investments in Group companies
12
139
89
Current Assets
General portfolio investments at fair value through profit or
loss
13
14,032
15,496
Investment held for sale
50
-
Trade and other receivables
14
19
19
Cash and cash equivalents
9,170
987
23,271
16,502
Current Liabilities
Trade and other payables
15
(79)
(121)
Current tax liabilities
(581)
(66)
(660)
(187)
Net Current Assets
22,611
16,315
Non-current Liabilities
Deferred tax liabilities
16
(568)
(1,012)
(568)
(1,012)
Total Assets less Total Liabilities
22,182
15,392
Capital and Reserves
Ordinary share capital
17
1,560
1,560
Share premium
17
2,320
2,320
Unrealised profits and losses on investments
1,849
2,040
5,729
5,920
Realised Profit and Loss
Balance at 1 July
9,472
7,872
Net Profit for the period
7,355
1,959
Dividends paid
(374)
(359)
Balance at 30 June
16,453
9,472
Equity shareholders’ funds
22,182
15,392
Total Comprehensive income
7,164
2,469
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 25 September 2024
Edward Beale
Director
London Finance & Investment Group PLC
Registered in England and Wales – Number 201151
The notes on pages 27 to 42 form part of these financial statements.
22
Consolidated Statement of Cash Flows
For the year ended 30 June
Restated*
Notes
2024
2023
£000
£000
Cash flows from operating activities
Profit before tax
4,432
2,104
Adjustments for non-cash items -
Finance expense
(6)
7
Depreciation charges
4
9
Depreciation on right of use asset
11
64
Unrealised changes in the fair value of general portfolio
investments
13
1,925
(679)
Unrealised changes in the fair value of Western Selection
(1,816)
(393)
Realised gain on disposal of investments
13
(4,207)
(911)
Gain on bargain purchase
(83)
-
Lease termination adjustment
(12)
-
Decrease in trade and other receivables
42
8
Decrease in trade and other payables
(2)
(20)
Taxes paid
7
(272)
(300)
Net cash (outflow)/inflow from operating activities
16
(111)
Cash flows from investment activity
Acquisition of general portfolio investments
(6,512)
(4,258)
Acquisition of Minority Interest in subsidiary
(50)
-
Acquisition of other investments – held for sale
(50)
-
Proceeds from disposal of general portfolio investments
13
8,891
4,407
Proceeds from disposal of strategic investments
6,291
1,325
Acquisition of equipment
(4)
-
Net cash inflow from investment activity
8,566
1,474
Cash flows from financing activities
Net Interest received/(paid)
6
(1)
Interest paid on lease liabilities
-
(5)
Repayment of lease liabilities
(15)
(75)
Equity dividends paid
(374)
(359)
Net cash outflow from financing activities
(383)
(440)
Increase in cash and cash equivalents
20
8,196
923
Cash and cash equivalents at the beginning of the year
1,264
341
Net Cash and cash equivalents at end of the year
9,460
1,264
*Correction of error, see note 22
The notes on pages 27 to 42 form part of these financial statements.
23
London Finance & Investment Group PLC
Company Statement of Cash Flows
For the year ended 30 June
Notes
2024
2023
£000
£000
Cash flows from operating activities
Profit before tax
7,382
2,780
Adjustments:
Net finance (income)/expense
(4)
2
Unrealised changes in the fair value of general portfolio
investments
13
1,925
(679)
Gain on disposal of general portfolio investments
13
(2,840)
(911)
Dividends received
(6,161)
-
Decrease in trade and other receivables
9
1
(Increase)/Decrease in trade and other payables
(51)
25
Taxes paid
7
(147)
(77)
Net cash inflow from operating activities
113
1,141
Cash flows from investment activity
Acquisition of general portfolio investments
(6,512)
(4,258)
Acquisition of Minority Interest in subsidiary
(50)
-
Acquisition of other investments – held for sale
(50)
-
Proceeds from disposal of general portfolio investments
8,891
4,407
Dividends received
6,161
-
Net cash inflow from investment activity
8,440
149
Cash flows from financing activities
Net interest received/(paid)
4
(2)
Equity dividends paid
(374)
(359)
Net cash outflow from financing activities
(370)
(361)
Increase in cash and cash equivalents
8,183
929
Cash and cash equivalents at the beginning of the
year
987
58
Net Cash and cash equivalents at end of the year
9,170
987
The notes on pages 27 to 42 form part of these financial statements.
24
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 30 June 2024
Balances at 1 July 2023
1,560
2,320
225
4,906
9,472
18,483
157
18,640
Profit for the Year
-
-
1,625
(4,746)
7,355
4,234
(24)
4,210
Total comprehensive
income
-
-
1,625
(4,746)
7,355
4,234
(24)
4,210
Acquisition of Non-
Controlling Interest
-
-
-
-
-
-
(133)
(133)
Dividends paid and total
transactions with
shareholders
-
-
-
-
(374)
(374)
-
(374)
Balances at 30 June
2024
1,560
2,320
1,850
160
16,453
22,343
-
22,343
Year ended 30 June 2023
Restated*
Balances at 1 July 2022
1,560
2,320
11
5,331
7,872
17,094
141
17,235
Profit for the Year
-
-
903
(1,086)
1,959
1,776
16
1,792
Other Comprehensive
Income
-
-
(689)
661
-
(28)
-
(28)
Total comprehensive
income
-
-
214
(425)
1,959
1,748
16
1,764
Dividends paid and total
transactions with
shareholders
-
-
-
-
(359)
(359)
-
(359)
Balances at 30 June 2023
1,560
2,320
225
4,906
9,472
18,483
157
18,640
*Correction of error, see note 22
The notes on pages 27 to 42 form part of these financial statements.
25
London Finance & Investment Group PLC
Company Statement of Changes in Shareholders’ Equity
Ordinary
Share
Capital
Share
Premium
Account
Unrealised
profits and
losses on
Investments
Realised
profits
and
losses
Equity
Total
£000
£000
£000
£000
£000
Year ended 30 June 2024
Balances at 1 July 2023
1,560
2,320
2,040
9,472
15,392
Profit for the Year and total comprehensive
income
-
-
(191)
7,355
7,164
Dividends paid and total transactions with
shareholders
-
-
-
(374)
(374)
Balances at 30 June 2024
1,560
2,320
1,849
16,453
22,182
Year ended 30 June 2023
Balances at 1 July 2022
1,560
2,320
1,530
7,872
13,282
Profit for the Year and total comprehensive income
-
-
510
1,959
2,469
Dividends paid and total transactions with
shareholders
-
-
-
(359)
(359)
Balances at 30 June 2023
1,560
2,320
2,040
9,472
15,392
The notes on pages 27 to 42 form part of these financial statements.
26
Notes to the Financial Statements
For the year ended 30 June 2024
1. Material Accounting Policies
The consolidated financial statements of the London Finance & Investment Group PLC have been
prepared in accordance with UK-adopted international accounting standards (‘UK-adopted IAS’) and with
the Companies Act 2006.
The preparation of financial statements in conformity with UK-adopted IAS 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.
Going Concern
The Directors have established that: there have been no significant events that are not in the ordinary
course of business since the reporting date, except for the return of capital by Western Selection Ltd. The
Group’s bank facility and liquidity headroom shows that the Company and other Group entities would be
able to operate with appropriate liquidity and be able to meet their liabilities as they fall due. The Directors
therefore believe that the going concern basis is appropriate for the Group.
(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 30 June 2024.
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 Profit or Loss (see note 22).
(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 trade and other receiv-
ables are classified as strategic and general portfolio investments and are recognised as
being at fair value through Profit or Loss. They are valued using quoted bid prices and move-
ments in value are taken to the income statement.
Investments in the general portfolio are held at fair value through Profit or Loss with changes
in the fair value recognised in profit or loss. They are valued using quoted market prices.
27
London Finance & Investment Group PLC
1. Material Accounting Policies (continued)
Our only strategic investment remaining, is the investment in Western Selection Ltd. 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. As
such it is held at fair value through Profit and Loss.
Changes in the fair values are recorded through profit or loss and accumulated under
Unrealised profits and losses on investments reserve.
Gains and losses realised on the sale of these financial assets are recorded in the profit and
loss to the extent of the difference between sale price and fair value previously reported and
the gain or loss previously accumulated in the unrealised profit and losses 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. The interest rate swap contract has been
cancelled as at 30 June 2024.
b) 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.
(vi)
The charge for taxation is based on the taxable profit or loss for the year. Taxable profit or loss
differs from net profit or loss as reported in the Statement of Total Comprehensive Income. It
excludes items of income (primarily franked dividend income) and 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.
(vii)
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.
(viii)
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 attributable 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 measured
reliably. The carrying amount of any component accounted for as a separate asset is derecog-
nised when replaced. All other repairs and maintenance are charged to profit or loss during the
reporting period in which they are incurred. Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These are included in profit or loss.
Property, plant and equipment are depreciated at rates calculated to write off the cost of relevant
assets over their effective useful economic lives. Depreciation is charged at the following rates:
Leasehold improvements – over the life of the lease
Office equipment
– 20% to 33.3% on cost
28
Notes to the Financial Statements (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 incurred
by the Group and an estimate of any costs to dismantle and remove the asset at the end of the
lease.
The Group depreciates the right-of-use assets on a straight-line basis from the lease commence-
ment 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 incremental
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 expected
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 payments
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.
(ix)
The Group operates a defined contribution plan which received fixed contributions from the sub-
sidiary company, City Group PLC. The Group’s legal or constructive obligations for this plan is
limited to the contributions. The expense recognised in the consolidated statement of total com-
prehensive income for the period in relation to these contributions was £16,000 (see note 6).
(x)
Cash and cash equivalents comprise cash balances and short-term fixed rate deposits.
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 1 January 2023 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 1 January 2024 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.
29
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
2024
2023
2024
2023
£000
£000
£000
£000
Dividends – Listed investments
614
586
-
-
Interest received
114
-
-
-
Profit/(Loss) on sales of investments,
including provisions
3,585
633
-
-
Rental and other income
-
-
25
97
Management services fees
-
-
361
352
Operating income
4,313
1,219
386
449
Administration expense – normal
(425)
(495)
(444)
(411)
Operating profit
3,888
724
(58)
38
All revenues are derived from operations within the UK. Consequently, no separate geographical segment
information is provided.
4. Administration Expenses and Other Income
2024
2023
a)
£000
£000
Administration expenses include:
Depreciation
4
9
Depreciation on Right of use asset
11
64
Auditors’ remuneration
- Audit services
46
41
Directors’ emoluments
- Note 5
74
76
Staff Costs
- Note 6
500
473
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 65.
Related Party Disclosures
As at 30 June 2024, London Finance & Investment Group PLC (“Lonfin”) and its wholly owned subsidiary,
Lonfin Investments Limited, owned 43.8% of Western Selection PLC (“Western”).
Western is a company incorporated in England with its registered office at Suite 1.01, Central Court, 25
Southampton Buildings, London WC2A 1AL. 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
Parent Company is able to take advantage of the investment entity exemption in IFRS 10.
Prior to 29 February 2024, Mr. D.C. Marshall and Mr. E.J. Beale were directors of Western. Following Mr
D.C. Marshall’s retirement on 29 February 2024, Mr W.H. Marshall and Mr E.J. Beale are now the non-
executive directors of Western.
30
Notes to the Financial Statements (continued)
Mr. D.C. Marshall’s and Mr W.H. Marshall’s shareholdings in the Company, and Mr E.J. Beale’s share
options, are set out in the Directors’ Report on page 45.
Mr D. C. Marshall does not have a UK bank account and, prior to his retirement from the Board, some
personal costs have been paid by City Group PLC during the year. These have been fully reimbursed
Mr E.J. Beale’s remuneration costs were paid by City Group PLC and fully recharged to his employer
Marshall Monteagle PLC, who is not payroll registered in UK.
The Company owns 100% of City Group. City Group provides company secretarial, finance and head
office services to the Company and to various other companies in the UK and abroad most of which are
associated with the Company.
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 £531,262
(2023 - £470,850) for the year under review. At the reporting date the aggregate balance due in respect
of fees invoiced was £Nil (2023 - £116,000). Settlement is within normal credit terms.
During the year, City Group used legal services totalling £962 provided by Pothecary, Witham Weld LLP
(“PWW”) where Mrs A Beale is a partner. Settlement was within normal credit terms and there is no
outstanding balance at the reporting date.
Prior to the year-end, the Company acquired from Western Selection Limited 15,252,744 ordinary shares
in the capital of Industrial & Commercial Holdings PLC (“ICH”), representing 29.9% of the ICH’s issued
ordinary share capital. These shares were held for sale and, in August this year, the shares were sold to
two entities associated with Christopher Latilla-Campbell, a director of ICH. Mr W.H. Marshall and Mr E.J.
Beale are also directors of ICH and City Group provides company secretarial and head office services to
ICH.
At 30 June 2024, as disclosed in Notes 14 and 15 below, City Group owed the Company £Nil (2023 – £
Nil) and the Company owed City Group £14,183 (2023 - £62,000) for fees. The Company was owed £Nil
(2023 - £Nil) by Lonfin Investments Limited. 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 58 to 64, were:
2024
2023
£000
£000
Salaries
433
402
Social security costs
51
50
Social security costs – previous periods
-
(15)
Defined contribution pension scheme contributions
16
16
500
453
The average weekly number of staff employed, excluding Group
Directors, was:
4
4
31
London Finance & Investment Group PLC
7. Tax Expense
2024
2023
£000
£000
The tax charge for the year comprises:
Tax on overseas investment income
80
77
Income tax
586
66
Deferred Tax charge
(444)
169
Tax charge
222
312
Other comprehensive income -
Income tax
-
146
-
146
The tax assessed for the year is lower than the standard rate of corporation tax in the UK.
The differences are explained below:
2024
2023
£000
£000
Profit on ordinary activities before taxation
4,432
1,711
Taxation at 25% (2023 – 20.5%)
1,108
351
Effects of:
Non-taxable items – fair values and franked income
(966)
(116)
Withholding tax
80
77
Loss carried (forward)/utilised
-
-
Tax charged
222
312
Dividends received from UK companies are recognised in the income statement net of their associated
tax credit.
The Corporation Tax main rate increases gradually for profits over £50,000 reaching 25% for profits over
£250,000.
8. Dividends
Amounts recognised as distributions to the shareholders of the Company in the year were as follows:
2024
2023
Final dividend for the prior year ended 30 June (per share)
0.60p
0.60p
Interim dividend for the current year ended 30 June (per share)
0.60p
0.55p
The total dividends paid and to be paid in 2024 and 2023 were £374,000 (1.2p per share) and £359,000
(1.15p per share) respectively. A final dividend in respect of the year ended 30 June 2024 of 0.60p per
share is to be proposed at the AGM to be held on 28 November 2024. These financial statements do not
reflect this dividend.
32
Notes to the Financial Statements (continued)
9. Earnings per share
Reconciliation of headline earnings
2024
2023
Basic and headline earnings per share, based on the profit attributable
to the shareholders after tax and non-controlling interests of
£4,234,000 (2023 restated – £1,776,000) and on 31,207,479 shares
issued
13.6p
4.4p
Diluted earnings per share, based on the loss attributable to the
shareholders after tax and non-controlling interests of £4,234,000
(2023 restated –£1,776,000) and on 31,207,479 shares issued plus
80,000 share options granted in 2016.
13.6p
4.4p
10. Property, Plant and Equipment
Office
Group
Equipment
£000
At cost – 1 July 2023
84
Additions in the year
4
Scrapped during the year
(48)
30 June 2024
40
Depreciation
Balance – 1 July 2023
81
Charges for the year
4
Scrapped during the year
(48)
30 June 2024
37
Net book amount 30 June 2024
3
Net book amount 30 June 2023
3
The office equipment is held by a subsidiary company.
33
London Finance & Investment Group PLC
Notes to the Financial Statements (continued)
11. Leases
The Group had lease commitment in respect of an office property entered into in October 2018 which
was terminated early on 31 August. 2023. The Company guaranteed the obligations under this lease.
City Group moved into serviced office premises on 31 August 2023 and there are no ongoing lease
liabilities.
Right of use asset – Office
2024
2023
£000
£000
Cost
At 1 July and 30 June
322
322
Adjustment to lease, termination
(6)
-
316
Depreciation
Balance – 1 July
(305)
(241)
Charges for the year
(11)
(64)
Depreciation 30 June
(316)
(305)
Net book amount 30 June
-
17
Lease Liabilities
2024
2023
£000
£000
Current
-
33
Total Lease Liabilities
-
33
Maturity Analysis
Less than one year
-
33
One to five years
-
-
Amounts recognised in the Consolidated Statement of Total
Comprehensive Income
Interest charged on lease liabilities
11
9
12. Investment in Group companies
Operating subsidiaries incorporated and operating in England and consolidated in these financial
statements.
Held by the Company – at cost
Principal Activities
Percentage of
Equity
2024
£000
2023
£000
City Group PLC
Management
services
100%
139
89
Lonfin Investments Limited
Investment holding
100%
-
-
139
89
The address of the registered office of these subsidiaries is Suite 1.01, Central Court, 25 Southampton
Buildings, London WC2A 1AL.
34
Notes to the Financial Statements (continued)
13. Investments
Strategic Holdings
General
Portfolio
Western
Selection
Finsbury
Food Group
£000
£000
£000
Cost at 1 July 2023
11,154
6,159
-
Opening unrealised gain/(losses)
4,342
(1,815)
-
Opening provision
-
(1,200)
-
Opening valuation as at 1 July 2023
15,496
3,144
-
Movements in the year
Purchases
6,512
-
-
Sales – proceeds/return of capital
(8,891)
(6,291)
-
Realised gain on disposal
2,840
1,368
-
Net unrealised (gains)/losses transferred to realised
gain on disposal
(2,437)
1,815
-
Unrealised fair value gains/(losses) in the year
512
1
-
Closing valuation at 30 June 2024
14,032
37
-
Cost at 30 June 2024
11,615
36
-
Unrealised gain/(losses) at 30 June 2024
2,417
1
-
Closing valuation at 30 June 2024
14,032
37
-
Cost at 1 July 2022
10,392
6,159
517
Opening unrealised gain/(losses)
3,663
(3,408)
689
Opening valuation as at 1 July 2022
14,055
2,751
1,206
Movements in the year
Purchases
4,258
-
-
Sales - proceeds
(4,407)
-
(1,324)
Realised gain on disposal
911
-
807
Net unrealised gains transferred to realised gain on
disposal
(277)
-
(689)
Unrealised fair value losses in the year
956
393
-
Closing valuation at 30 June 2023
15,496
3,144
-
Western Selection Limited, a subsidiary undertaking, is incorporated and operates in the UK with a
financial year end of 31 December.
At 30 June 2024, Western had 104,555 ordinary shares of 40p each in issue, of which 45,786 ordinary
shares (43.8% ) were held by the Company’s wholly owned subsidiary, Lonfin Investments Limited (30
June 2023: Western had 17,949,872 ordinary shares of 40p each in issue, of which 7,860,515 ordinary
shares (43.8%) were held by the Company’s wholly owned subsidiary, Lonfin Investments Limited).
Western Selection, as an unlisted investment, is carried at fair value of £37,000 (2023 listed - £3,144,000)
which is calculated on the basis of the initial capital reduction share price of 80.5p.
35
London Finance & Investment Group PLC
13. Investments (continued)
Extracts from Western’s unaudited results are as follows:
2024
2023
£000
£000
Profit/(Loss) after tax
70
390
Non-current assets
-
6,429
Current assets
248
7,317
Liabilities within one year
(23)
(48)
Capital
42
7,180
Reserves
Share Premium account
-
2,654
Capital Reserve account
-
3
Value of investment in Western at Net asset value per share
98
6,000
Value of investment in Western at market value
n/a
2,673
Net asset value per share
215p
76p
Middle market price per share on 30 June
n/a
35p
14. Trade and other receivables
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Trade debtors
28
62
-
-
Other debtors
16
11
4
7
Prepayments and accrued income
15
27
15
12
59
100
19
19
15. Trade and other payables
Group
Company
2024
2023
2024
2023
£000
£000
£000
£000
Group companies
-
-
14
62
Other creditors
42
31
1
1
Trade creditors
9
8
-
5
Accruals
98
112
64
53
149
151
79
121
36
Notes to the Financial Statements (continued)
16. Deferred taxation
The Group has provided £568,000 in respect of potential taxation on unrealised investment gains (2023
- £1,012,000). This is after taking into account available tax losses of £Nil (2023: £Nil) and increase in the
corporation tax rate to 25% from 1 April 2023.
Group
Group
Company
Company
2024
2023
2024
2023
£000
£000
£000
£000
Balance at 1 July
1,012
843
1,012
843
Profit or Loss
(444)
169
(444)
169
Balance at 30 June
568
1,012
568
1,012
Deferred tax has been provided at 25% (2023: 25%).
17. Share Capital and Reserves
Company and Group
2024
2023
£000
£000
Allotted, issued and fully paid ordinary shares of 5p each
31,207,479 at 1 July 2023 and 30 June 2024
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: -
Description and purpose
Ordinary share capital
Nominal value of issued share capital.
Share premium
Amount subscribed for share capital in excess of nominal
value, less issue expenses.
Unrealised profits and losses on
investments
Cumulative unrealised gains and losses on investments.
Share of retained realised profits
and losses of subsidiaries
The Group’s share of cumulative undistributed post-
acquisition gains and losses of subsidiaries recognised in
the income statement.
Retained realised profits and
losses
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 21 and 22 and the Consolidated Statement of
Changes in Shareholders’ Equity on page 25.
37
London Finance & Investment Group PLC
17. Share Capital and Reserves (continued)
Capital management
Capital is defined as the Company’s ordinary share capital and reserves as detailed above.
The primary objective of the Group's capital management is to ensure that it maintains healthy capital
ratios in order to support its business and maximise shareholder value.
To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders
or issue or repurchase shares. No changes were made to the objectives, policies or processes for
managing share capital during the period ended 30 June 2024.
Share Options
The Group has a long-term incentive plan 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 Company Share Option Plan.
On 29 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
have vested and may be exercised no later than the tenth anniversary of the date of grant. They have not
yet been exercised. The fair value of these options at the date of grant was estimated using the Black-
Scholes model to be £9,000.
18. 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. No pension contributions are provided for the Directors.
19. Reconciliation of consolidated net cash flow to movement in net debt
Group
At start
Cash
Non-cash
At end
of year
Flow
transactions
of year
2023/2024
£000
£000
£000
£000
Cash at bank
1,264
8,196
-
9,460
Lease liability
(33)
15
18
-
Net Debt
1,231
8,211
18
9,460
2021/2023
Cash at bank
407
857
-
1,264
Overdraft
(66)
66
-
-
Lease liability
108
80
(5)
(33)
Net Debt
233
1,003
(5)
1,231
38
Notes to the Financial Statements (continued)
20. 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.
IFRS 13 requires disclosure of fair value measurements under the following hierarchy:
Financial assets and liabilities are classified in their entirety into one of the three levels determined on
the basis of the lowest input that is significant to the fair value measurement.
Listed prices (unadjusted) in active markets for identical assets or liabilities – Level 1
Values other than listed prices included within Level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) – Level 2
Values for the asset or liability that are not based on observable market data (that is unobservable
inputs) – Level 3.
The categories of financial instruments used by the Group to achieve its objectives as set out in the
Directors’ Report are:
Fair Value
2024
2023
Financial assets
Hierarchy
Level
£000
£000
At fair value through Profit or Loss
Non-current investments (strategic investments)
1
-
3,144
Non-current investments (strategic investments, unlisted,
note 13)
3
37
-
At fair value through profit or loss
Current asset investments (listed investments)
1
14,032
15,496
Loans and receivables at amortised costs
Trade and other receivables
n/a
44
73
Cash at bank
n/a
9,460
1,264
Financial liabilities
At amortised costs
Trade and other payables
n/a
149
151
Lease liabilities
n/a
-
33
Transfers between levels 1and 3 During the year the group transferred its investment in Western Se-
lection from level 1 into level 3. Western Selection became a private limited company and as a result the
group was unable to obtain listed price for its shareholding. The current valuation is based on the capital
reduction share price of £80p.
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 group has no borrowings
as at 30 June 2024.
39
London Finance & Investment Group PLC
20. Financial Instruments (continued)
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.
2024
2023
Currency
£000
£000
Euro
2,556
3,555
Swiss Franc
1,271
3,173
US Dollar
4,983
5,184
Australian Dollar
511
400
9,321
12,312
The sensitivity to a 1% change in the sterling exchange rate would be to increase or decrease the fair
values as set out by £93,205 in aggregate (2023 - £121,898).
Liquidity Risk
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.
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 investments would result in the fair values of non-current
asset investments decreasing by £3,700 (2023 - £31,000) 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 £140,000 (2023 - £155,000) 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.
40
20. Financial Instruments (continued)
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 of trade and
other debtors during the year, there are no provisions against these assets and none are past their due
date.
21. 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 30 June 2024, is disclosed
below:
Company
Country
% ownership
Lonfin Investments Limited
United Kingdom
100%
City Group PLC
United Kingdom
100%
Western Selection Limited*
United Kingdom
43.8%
*No individual investor has control of the company
22. Change of accounting policy and Correction of error
The Group previously accounted for its investment in Western Selection Ltd as held at fair value though
Other Comprehensive Income, as elected by the company. The unrealised gains and losses were
accumulated under the unrealised investment reserve and on disposal, the cumulative gain or loss in the
investments reserve was reclassified to retained earnings.
Following a review, the Group has reconsidered its accounting treatment. This treatment was incorrect
as the investment in Western is not consolidated because of the IFRS 10 investment entity exemption.
Any investment not consolidated under the IFRS 10 investment exemption is required to be held at fair
value through profit or loss.
The error has been corrected by restating the affected financial statements for the prior periods as follows:
There has been no effect on the Statement of financial position.
Statement of Total comprehensive income (extract)
Operating Income
Notes
2023
Profit
Increase/
(Decrease
2023
Restated
£000
£000
£000
Unrealised changes in the carrying value of
Western Selection
-
393
393
Profit before taxation
1,711
393
2,104
Income tax expense
7
(312)
-
(312)
Profit after taxation
1,399
393
1,792
Non-controlling interest
(16)
-
(16)
Profit attributable to shareholders
1,383
393
1,776
41
London Finance & Investment Group PLC
2023
Profit
Increase/
(Decrease
2023
Restated
Other comprehensive income/(expense)
Items that will not be reclassified to profit or loss
Profit on disposal of Strategic investments
118
-
118
Unrealised changes in the carrying value of
Strategic investments
393
(393)
-
Other taxation -
Income tax on disposal of strategic
investments
(146)
-
(146)
Total Other Comprehensive (Loss)/Income
attributable to shareholders
365
(393)
(28)
Total Comprehensive Income attributable to
owners of the parent
1,748
-
1,748
42
Directors’ Report
The Directors present their Report for the year ended 30 June 2024. 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 45 to 55 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 60% of the total value of investments.
43
London Finance & Investment Group PLC
Directors’ Report (continued)
Going Concern
Pressing concerns for the new Labour Government at present are post Brexit issues to be resolved with
the EU, the impact on the UK and Europe of the war in Ukraine, energy supply issues, the rises in the
cost of living and concerns as regards inflation. These issues will significantly impact on the UK over the
coming months, and we expect further fluctuations in the stock markets and increased volatility.
Nevertheless, we are confident in the quality of our investments and that notwithstanding the current
uncertainty and what troubles lie ahead our investments will enable us to achieve our objective of
generating growth in shareholder value in the medium to long term.
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 7 and 8 and in Note 20 to the Financial Statements (Financial Instruments) on
pages 39 to 41.
Viability Statement
In accordance with the provisions of the UK Corporate Governance Code, the Board has assessed the
viability of the Group. The Group is a long-term investor and the Board believes it is appropriate to assess
the Group’s viability over a five-year period which reflects the Board’s long-term investment approach.
The Board believes this five-year period reflects a proper balance between the long-term horizon 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
7 and 8;
•
the potential operational and financial impacts of these risks and uncertainties are severe, but
plausible scenarios together with the effectiveness of any mitigating actions;
•
the Group’s current position and strategy;
•
the liquidity of the Group’s Investment Portfolio; and
•
the Board’s risk appetite.
The Board has also considered such matters as significant economic or stock market volatility, a sub-
stantial reduction in the liquidity of the portfolio or changes in investor sentiment, all of which could have
an impact on the Group’s prospects and viability in the future.
Taking into account all of these factors, the Group’s current position and the potential impact of the prin-
cipal risks and uncertainties faced by the Group, the Board has concluded that it has a reasonable ex-
pectation that the Group will be able to continue in operation and meet its liabilities as they fall due over
the five-year period to 30 June 2029.
44
Events after the reporting date
There have been no significant post-balance sheet events since the year-end.
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 30 June 2023 and 2024 is set out below:
30 June 2024
30 June 2023
No. of Ordinary Shares
No. of Ordinary Shares
W. H. Marshall
12,885,472*
12,890,693
W. H. Marshall
125,000
-
F.W.A. Lucas †
162,500
162,500
J.H. Maxwell
65,000
65,000
E.J. Beale
-
-
D.C. Marshall (retired 29 February
12,885,472*
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 in 12,885,472 ordinary shares overlaps with the interest of Mr.
D.C. Marshall, who has now retired from the Board. Neither Mr W.H. Marshall nor Mr D.C. Marshall had any beneficial
interest in these 12,885,472 ordinary shares (2023 – 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 29 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.
Mr W. H. Marshall acquired 163,552 ordinary shares on 1 July 2024. Save for the acquisition of these
shares, there have been no changes in directors' share interests between 1 July 2024 and the date of
this report.
There are no requirements or guidelines for Directors to acquire and own shares in the Company.
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 require all the Directors of the Company to offer themselves for re-election on an
annual basis. Accordingly, this year, Mr W.H. Marshall, Mr E.J. Beale, Dr F.W.A. Lucas and Mr J.H.
Maxwell will retire and being eligible, offer themselves for re-election as directors at the AGM on 28
November 2024. On 29 February 2024, Mr D.C. Marshall stood down as Chairman and retired from the
Board.
45
London Finance & Investment Group PLC
Directors’ Report (continued)
Substantial Interests
As at 25 September 2024, the Company was aware of
the following interests in 3% or more of its issued
ordinary share capital:
No. of Ordinary
Shares
Percentage of issued
Ordinary Share capital
Lynchwood Nominees Limited
12,885,472
41.3%
W.T. Lamb Investments Limited
4,650,000
14.9%
Platform Securities Nominees Limited A/c PSLNOM
1,287,2
4.1%
Platform Securities Nominees Limited A/c PSLSIPP
1,442,940
4.6%
No changes to the significant holdings set out above have been notified to the Company between 1 July
2024 and 25 September 2024.
Independent Auditor
The respective responsibilities of the Directors and the Independent Auditor, PKF Littlejohn LLP, in
connection with the financial statements appear on pages 13 to 19.
Each Director has taken all the steps that they ought to have taken as a director including making
appropriate enquiries of fellow Directors to make themselves aware of any information needed by the
Company’s Independent Auditor for the purposes of its 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 Auditors are unaware.
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. During these discussions, the Committee was able to review the level
and scope of materiality adopted by PKF Littlejohn LLP in the audit process. At the Company’s
forthcoming AGM to be held on 28 November 2024 a resolution will be proposed that PKF Littlejohn LLP
be re-appointed as the Company’s Independent Auditor following the AGM.
Corporate Governance
Information on the Company’s corporate governance can be found in the Corporate Governance
Statement on pages 50 to 55.
The Company’s Articles of Association may only be amended by special resolution and are available on
the Company’s website at https://www.city-group.com/london-finance-investment-group-plc/
Annual General Meeting (AGM)
The Notice of the AGM, to be held on 28 November 2024, can be found on pages 69 to 70 and sets out
the business to be considered at the meeting. Resolutions 1 to 9 will be proposed as Ordinary Resolutions
and Resolution 10 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 page
63 provides information on the Directors’ remuneration. Resolution 3 proposes the approval of the
Directors’ Remuneration Report, other than the part containing the proposed Directors’ Remuneration
Policy.
46
Resolutions 4, 5, 6 and 7
Re-election of Directors
The Directors, Warwick Marshall, Edward Beale, Dr Frank Lucas and John Maxwell, are subject to annual
re-election. Accordingly, each of these Directors will retire at the AGM on 28 November 2024 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 of this document.
Resolution 8
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 28 November 2024.
Resolution 9
Allotment of share capital
Resolution 9 provides authority to allot shares in accordance with section 551 of the Companies Act 2006
in the period up to the conclusion of the Company’s AGM in 2025. If passed, this resolution would enable
the Directors to allot shares (and to grant rights to subscribe for or convert any security into shares in the
Company) up to a maximum nominal amount of £189,626 (being 3,792,520 ordinary shares) which is the
amount of the Company’s authorised but unissued share capital. The Directors have no specific plans to
allot any ordinary shares in the Company.
Resolution 10
Disapplication of pre-emption rights
Resolution 10 will empower the Directors to allot ordinary shares for cash, pursuant to the authority
granted by Resolution 9, 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 25 September 2024 (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 9 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 10 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 10 as the Directors intend
to do in respect of their own beneficial holdings which as at the date of this Annual Report, amount in
aggregate to 433,552 ordinary shares, representing approximately 1.4% of the ordinary shares currently
in issue.
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 the Directors concerning compensation for
loss of office.
The Board is not aware of any contractual agreements which ought to be disclosed in the Directors’
Report.
47
London Finance & Investment Group PLC
Directors’ Report (continued)
Business Relationships
The Directors consider the underlying strategic companies in which the Group has invested as well as
advisers and suppliers amongst the key stakeholders of the Group. In this respect, the Directors engage
with these stakeholders on a frequent basis in order to build and strengthen such relationships. All stake-
holders are encouraged to communicate with the Board through the Chairman or through the Company
Secretary
The views of and impact upon the wider stakeholders of the Group are considered as part of the Board
decision-making process including engaging with stakeholders to ensure they have a clear understanding
of the long-term goals of the Group and how the Directors intend to achieve these goals.
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 company secretarial, finance and
head office services to the Company and 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 5 people.
The table below provides the gender split at different levels of the Board and employees within the
Company’s business, including City Group, as at 30 June 2024, together with comparator data for the
previous year.
Male number and percentage
Female number and
percentage
2024
2023
2024
2023
Board
4 (100%)
5 (100%)
0
0
Senior managers
1 (33.3%)
1 (33.3%)
2 (66.6%)
2 (66.6%)
All employees and Board
5 (70%)
7 (70%)
3 (30%)
3 (30%)
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.
The appointment of each of the Directors is pursuant to the terms of a Letter of Appointment which, after
completion of an initial term of three years, continues, subject to the approval of the Board and annual re-
election, until terminated by either party in accordance with the termination provisions contained in the
Letter of Appointment. In the event of termination of a Director’s appointment, there is no compensation
payment for loss of office.
The Chairman’s and the Non-Executive Directors’ Letters of Appointment are available for inspection at
the registered office of the Company, Central Court, Suite 1.01, 25 Southampton Buildings, London
WC2A 1AL.
48
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.
Each of the Directors has the benefit, under the Company’s Articles of Association, of an indemnity, to
the extent permitted by the Companies Act 2006, against any liability incurred by him or her in defending
the Company.
Political and Charitable Donations
No political or charitable donations have been made during this last financial year.
Environmental, Social and Human Rights Issues
The Board does not consider that there is any further information relating to environmental matters,
employees, social, community and human rights issues that it is necessary to report for an understanding
of the development, performance or position of the Company’s business.
By Order of the Board
25 September 2024
City Group PLC
Company Secretary
49
London Finance & Investment Group PLC
Corporate Governance Statement
Corporate Governance Policy
Corporate Governance is the process by which companies are controlled and directed to achieve the
objectives of the organisation. Key to the achievement of objectives is having clarity about the objective
and the right people in place. Processes and structures are of secondary importance as, without a focus
on outcomes and without the right people, it is only by chance that objectives will be met.
The UK Listing Authority requires UK premium listed companies to comply with the UK Corporate
Governance Code (the “Code”), updated from time to time by the Financial Reporting Council (“FRC”),
which focuses on processes and structures, and which is deemed to constitute best practice in Corporate
Governance for most companies. Directors are required to report to shareholders on how the Company
applies the principles of the Code and confirm that the Company complies with the Code’s provisions or
explain why it does not. In July 2018, the Code’s Principles and Provisions were updated by the FRC to
simplify the Code and enhance requirements for governance structures and processes. In January 2024,
the FRC published the latest version of the Code which streamlines many of the existing provisions and
provides new provisions in relation risk management and internal controls. The 2024 Corporate
Governance Code will take effect from January 2025. For the year ended 30 June 2024, 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 Limited (“Johannesburg Stock Exchange” or “JSE”) 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 30 June 2024.
Composition of the Board
The Board comprises the Chairman, Warwick Marshall, Edward Beale, Senior Independent Non-
Executive Director, John Maxwell and Dr Frank Lucas. All of the Directors are Non-Executive Directors.
David Marshall stepped down as Chairman and retired from the Board on 29 February 2024.
Independence of the Chairman
The Board has previously reviewed the independence of the former Chairman, David Marshall having
served more than nine years on the Board. Until his retirement from the Board in February this year, the
Board considered David Marshall to be an effective Chairman who continued to use independent
judgement in his role and brought a wealth of experience to the role.
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 the AQSE Growth Market) corporate adviser to Western
until June 2018.
50
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 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
AGM after their appointment. In addition, at every AGM, 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 of the
Directors and supports their re-election.
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 medium to
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 the Directors to spend time with each other on an informal basis to improve
communication and relations between Directors.
51
London Finance & Investment Group PLC
Corporate Governance Statement (continued)
The Board, through review of the management reports, scrutinises the performance of the Company
against the objective of real growth in shareholder value over the medium to 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 two Nomination Committee meetings 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
30 June 2024
4
2
1
2
W.H. Marshall
4
-
-
-
F.W.A. Lucas
3
2
1
2
J.H. Maxwell
3
2
1
2
E.J. Beale
4
-
-
-
D.C. Marshall
1
-
-
-
The Board’s Committees
The Board now has four committees:
The Investment Committee was chaired by David Marshall until his retirement from the Board in
February this year. The Committee is now chaired by Warwick 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.
52
52
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 56 to 58.
Nomination Committee
The Nomination Committee, which meets from time to time, has been charged with nominating suitable
candidates for the Board to consider recommending to the shareholders for appointment as Directors of
the Company.
Changes to the composition of the Board are not anticipated to occur on a frequent basis. Whenever a
change is anticipated, a job description for the role will be agreed by the Nomination Committee, taking
into account the expertise available to the Group from the other members of the Board and the need to
acquire any specific capabilities. The Nomination Committee will then undertake whatever process is
most appropriate for the identification of suitable candidates and their assessment, taking into account
any other commitments candidates might have. Appointments will be made on merit against objective
criteria.
Remuneration Committee
The Remuneration Committee reviews, determines and recommends to the Board the future
Remuneration Policy for the Chairman of the Board and the Directors. The Remuneration Committee will
consider base fees and, where appropriate, salaries, annual and long-term incentive entitlements and
awards and, where appropriate, pension arrangements. In determining the remuneration policy for the
Board, the Remuneration Committee takes into account many factors having regard to the requirements
of the Code.
The aggregate remuneration of Directors is limited by the Company’s Articles of Association and this
aggregate amount and the Company’s Remuneration Policy can only be changed by the Company in
General Meeting. The current rates of remuneration are set out in detail in the Directors’ Remuneration
Report on pages 62 to 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 included Edward Beale and David
Marshall, until his retirement in February this year, Following David Marshall’s retirement, Warwick
Marshall joined the Board of City Group in place of David Marshall 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 of the current 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.
53
London Finance & Investment Group PLC
Corporate Governance Statement (continued)
Board Succession and Diversity
In evaluating the performance of the Board and its members, the Board reviews its structure and whether
it has the right mix of relevant skills, diversity and experience for the effective conduct of the Company’s
business.
The table below provides the gender split of the Board as at 30 June 2024 as required by the Listing
Rules:
Number
of Board
members
Percentage
of the
Board
Number of senior
positions on the Board
(Chair, CEO, CFO and
SID)
Number in
executive
management
Percentage
of executive
management
Men
4
100
2 (Chair and SID)
0
0
Women
0
0
0
0
0
Not specified/prefer not to say
0
0
0
0
0
The table below provides the ethnicity split of the Board as at 30 June 2024 as required by the Listing
Rules:
Number
of Board
members
Percentage
of the
Board
Number of senior
positions on the Board
(Chair, CEO, CFO and
SID)
Number in
executive
management
Percentage
of executive
management
White British or other white
(including minority-white
groups)
4
100
2 (Chair and SID)
0
0
Mixed/ Multiple Ethnic Groups
0
0
0
0
0
Asian/Asian British
0
0
0
0
0
Black/African/Caribbean/Black
British
0
0
0
0
0
Other Ethnic Groups including
Arab
0
0
0
0
0
Not specified/prefer not to say
0
0
0
0
0
All of the Company’s Directors are male, white and non-executive. The Company has no executive man-
agement. The Company has not met the diversity targets set by the Listing Rules because there have
been no recent changes to the Board which would have provided an opportunity to meet the diversity
targets. The Board does not consider it to be in shareholders’ interests to either replace a Director, or
expand the number of Directors on the Board, solely to meet these targets. Any future changes to the
Board will be made on merit taking into account the diversity of applicants.
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.
54
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, has developed a professional working relationship with its
Independent Auditor, PKF Littlejohn LLP, which was appointed at the Company’s AGM 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.
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 John Maxwell,
the Senior Independent Non-Executive Director, is also always available should a shareholder wish to
draw any matters to his attention.
The AGM 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 ahead of the AGM and 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 (Central Court, Suite 1.01, 25 Southampton Buildings, London
WC2A 1AL).
Warwick Marshall
Chairman
25 September 2024
55
London Finance & Investment Group PLC
Audit Committee Report
Audit Committee
The members of the Audit Committee (the “Committee”) are Dr Frank Lucas (Chairman) and John
Maxwell. Both members are considered to be independent and neither member has any conflicts of
interest. Both Dr Frank Lucas and John Maxwell have recent and relevant financial experience.
The Committee meets at least twice a year to consider the Group’s financial reporting and reports from
the Company’s Independent Auditor.
The terms of reference for the Committee, which are available on request and on the Company
Secretary’s website, are reviewed and re-assessed on an annual basis.
Responsibilities
The main responsibilities of the Committee are:
•
to review the half yearly and annual financial statements of the Group, the accounting policies
applied therein and compliance with financial and regulatory reporting requirements.
•
to assess whether the annual report and financial statements, taken as a whole, is fair, balanced
and understandable and provide the information necessary for shareholders to assess the
Group’s position and performance, its business model and strategy.
•
to meet with the Independent Auditor to review its proposed audit programme of work and the
findings of the Independent Auditor on completion of its 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 its remuneration and the terms of its engagement.
•
to monitor and review annually the Independent Auditor’s independence, objectivity,
effectiveness, resources and qualification.
•
to review and monitor the internal control systems and risk management systems (including non-
financial risks) on which the Group is reliant.
•
to consider annually whether there is a need for the Group to have its own internal audit function.
•
to review the arrangements in place whereby management, office and Group secretarial services
are provided to the Group and whereby management and staff may, in confidence, raise concerns
about possible improprieties in matters of financial reporting or other matters (‘whistleblowing’)
and
•
to report to the Board from time to time on any significant financial reporting issues and the views
and judgements the Committee might have or make in connection with such issues and in
connection with the preparation of the Group’s financial statements.
Audit Committee Activities
The Audit Committee met on two occasions in the year ended 30 June 2024, in September 2023 and in
February 2024. In the course of such meetings the Committee has also met with the rest of the Board.
The Audit Committee has undertaken the following activities in the year ended 30 June 2024 in discharge
of its responsibilities:
56
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 2024 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 2024 Annual Report & Financial Statements to be ‘fair, balanced
and understandable’.
The Group’s 2024 interim results and report were also reviewed and considered by the Committee prior
to publication in February 2024.
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 to be appropriate, notwithstanding their illiquidity.
Going concern and viability statements
The Committee assessed whether it was appropriate to prepare the Group’s 2024 Annual Report &
Financial Statements, and the 2024 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 2024 and are set out in the Directors’ Report on page 43.
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 timescale. 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 30 June 2029, could be made in the 2024 Annual Report &
Financial Statements for the reasons set out in the Directors’ Report on page 43.
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 presentation of changes in the value of the Company’s investment in
Western and the necessary adjustment to prior year results.
A further significant risk is to ensure the General 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.
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 30 June 2024, 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.
57
London Finance & Investment Group PLC
Audit Committee Report (continued)
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 AGMs
in 2017 to 2022 and at the AGM in December 2023.
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 30 June 2024 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 has 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.
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
25 September 2024
58
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 any 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 which can be found on the
Company Secretary’s website, are reviewed and re-assessed on an annual basis.
Key Objectives of the Committee
The key objectives of the Committee in reviewing the Company’s Remuneration Policy and making
recommendations to the Board as to changes in the policy are as follows:
remuneration for the current Directors, all of whom are Non-Executive Directors, should be
competitive, but not excessive, in order to motivate and retain its Directors and grow the Group
successfully
remuneration packages for new Non-Executive Directors or Executive Directors, should the
appointment of Executive Directors be considered appropriate, should be competitive but not
excessive, in order to attract, motivate and retain such Directors and grow the Group successfully
remuneration of Executive Directors, if the appointment of Executive Directors is considered
appropriate, should be linked to the long-term performance of the Group’s business
any performance related remuneration for Executive Directors should be set so as to align the
interests of the Executive Directors with those of the shareholders
In determining remuneration arrangements for the Directors, the Committee will also take into
consideration the pay and employment conditions in other parts of the Group
The Form of the Directors’ Remuneration Report
The Directors’ Remuneration Report has been prepared in accordance with the Directors' Remuneration
Report Regulations and also meets the relevant requirements of the UK Listing Authority Listing Rules.
The Directors’ Remuneration Report comprises three sections:
a remuneration policy, which sets out the framework for remuneration arrangements for the
Directors;
an annual report on Directors’ remuneration, which sets out all payments made to the Directors
during the year; and
an annual statement by the Chairman of the Remuneration Committee, John Maxwell.
A resolution to approve the Directors’ Remuneration Report, other than the part containing the Directors’
Remuneration Policy, in the form contained in this Annual Report was put to shareholders at the AGM
last year and was approved with 14,532,9544 votes in favour and no votes against.
59
London Finance & Investment Group PLC
Directors’ Remuneration Policy
The Company’s Remuneration Policy needs to be put to a binding shareholders’ vote at least once every
three years. Accordingly, the Company’s Remuneration Policy was put to a binding shareholders’ vote at
the Company’s AGM on 10 November 2022 and unanimously approved. Subject to the Committee and
the Board being satisfied that there are no changes to the Policy that need to be made at this time, the
Policy will not need to be put to a binding shareholders’ vote until 2026.
The Committee has reviewed the Company’s Remuneration Policy and has considered whether any
changes to the Policy should be made at this time. The Committee does not consider it appropriate to
propose any revisions to the current Policy.
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 June 2023. A review of Directors’ fees for the year ended 30 June
2025 will be conducted following publication of the Company’s 2024 Annual Report & Financial
Statements.
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 29 February 2016 over 80,000 ordinary shares, prior to his appointment to the Board, and these
options may be exercised at any time prior to 1 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 any profits made by City Group (currently 50%) are allocated to a staff bonus pool.
Pensions and other Benefits
The Directors are covered by the Company’s directors’ and officers’ liability insurance cover
which is renewed annually. Other than this insurance cover, no other benefits, such as
pension contributions, private medical health cover, death in service insurance, life
insurance or company cars are provided for the Directors.
60
61
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 30 June 2024 was reviewed and considered by the Board of City Group, which includes
Warwick Marshall and Edward Beale.
Performance Graph
Lonfin Total Shareholder Return v FTSE Eurofirst 100 Index
EuroFirst 100
London Finance & Investment Group
61
London Finance & Investment Group PLC
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 equivalents, 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.
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 30 June 2024 and describes how the Company’s Remuneration Policy will be implemented
for the year ending 30 June 2025.
A list of all the Directors who served the Company in the financial year ended 30 June 2024 and their
beneficial interests (and those of their connected persons) in the Company’s ordinary shares as at 30
June 2023 and 2024 is set out in the Directors’ Report on page 45 of this document.
Chairman’s Remuneration
As the Company has no Chief Executive Officer the table below shows the total remuneration of the
previous Chairman, David Marshall, for the 5 years to 30 June 2024 and the total remuneration of the
current Chairman, Warwick Marshall, for the period ended 30 June 2024. The total remunerations of
David Marshall and Warwick Marshall are set out below 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 in the year ending 30 June 2025 to the current Chairman, Warwick Marshall, who
was appointed to the role of Chairman on 29 February 2024 following David Marshall’s retirement from
the Board.
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 (until
retirement on 29 February 2024)
Total fees paid
Year ended 30 June
£
2020
20,000
2021
20,000
2022
20,000
2023
20,000
2024
14,000
Warwick Marshall, Non-Executive Chairman
(from 29 February 2024)
Total fees paid
Year ended 30 June
2024
15,000
Total fees expected to be paid
2025
15,000
The previous Chairman, David Marshall, ceded his Director’s fees to Marshall Monteagle PLC and he
received no other payment or benefits from the Company.
62
Directors’ Remuneration Report (continued)
The current Chairman, Warwick Marshall, cedes his Director’s fees to Marshall Monteagle PLC and he
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 previous Chairman, Warwick Marshall, the current Chairman and the Directors, in the year
ended 30 June 2024, compared with the fees paid to David Marshall, Warwick Marshall and the Directors
in the previous year. The table also shows the fees expected to be paid to Warwick Marshall, the current
Chairman, and the Directors in the year ending 30 June 2025.
Total fees payable
Total fees paid
Non-Executive Directors
Year ending
30 June 2025
Year ended
30 June 2024
Year ended
30 June 2023
£
£
£
Mr. W.H. Marshall ≠
15,000
15,000
14,000
Mr D.C. Marshall
-
14,000
20,000
Mr E.J. Beale ⧫
15,000
15,000
14,000
Dr. F.W.A. Lucas
15,000
15,000
14,000
Mr J. H. Maxwell
15,000
15,000
14,000
60,000
74,000
76,000
In the two years ended 30 June 2024:
≠ Mr W H Marshall has ceded his Director’s fees to Marshall Monteagle PLC.
♦ Mr E.J. Beale has ceded his Director’s fees to Marshall Monteagle PLC
Mr D C Marshall has ceded his Director’s fees to Marshall Monteagle PLC.
The remuneration of Warwick Marshall, the current Chairman, and the Directors for the year ending 30
June 2025 will be conducted following publication of the Company’s 2024 Annual Report & Financial
Statements.
The Group’s policy for future increases in fees to the Directors is similar to the policy for increases in
salary to City Group employees save that in the case of Directors’ fees the reviews will be performed
every 3-5 years. A review of Directors’ fees was conducted prior to the finalisation of the Company’s 2024
Annual Report & Financial Statements.
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 30 June 2024,
which has been audited, is set out below.
63
London Finance & Investment Group PLC
Year ended 30 June
The Board and employees of the
Group’s total remuneration
(audited)
Dividends paid to
Shareholders (audited)
2022
£536,000
£359,000
2023
£549,000
£359,000
2024
£573,000
£374,000
Directors’ interests in the Company
The interests of the Directors (and their connected persons) at 30 June 2024 are as set out in the table
in the Directors’ Report on page 45.
Long term Incentive Schemes
No option awards under the Group’s Company Share Option Plan have been made to any of the Directors
or employees of the Group in the year ended 30 June 2024 and no option awards are envisaged for the
year ending 30 June 2025.
None of the 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 29 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 1 March 2026. This information has been audited. Further
information on the valuation of these options is set out in Note 17 to the Financial Statements, Share
Capital and Reserves.
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 30 June 2024 and no bonuses or other discretionary payments will be paid in the year ending
30 June 2025. 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 30 June
2024 and no pension contributions will be paid by the Company in the year ending 30 June 2025. 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 30 June 2024 and no such payments will be paid in the year ending 30 June
2025. 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 30 June 2024. This information has been audited.
It is anticipated that, if new Non-Executive Directors are appointed in the year ending 30 June 2025 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 30
June 2025 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.
64
City Group
The remuneration payable to the executive directors and employees of the Company's subsidiary, City
Group, for the year ended 30 June 2024 will be reviewed and considered by the Board of City Group,
which includes Warwick Marshall and Edward Beale.
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
30 June 2024.
I confirm that the Directors’ Remuneration Policy, set out above, summarises the Company’s current
Remuneration Policy which will not need to be put to a binding shareholders’ vote at the Company’s AGM
until 2026.
At this time, the Board is comprised wholly of Non-Executive Directors, including Warwick Marshall, the
Chairman, who only receive director’s 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 30 June 2024 and the remuneration
arrangements for the Board for the year ending 30 June 2025.
A resolution to approve the Directors’ Remuneration Report (other than the part containing the Directors’
Remuneration Policy), will be proposed at the Company’s AGM to be held on 28 November 2024 at which
time the Company’s 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 25 September 2024
65
London Finance & Investment Group PLC
Task Force on Climate-related financial disclosures (“TCFD”)
Report
This is our third year reporting against the TCFD disclosures and recommendations. Our disclosures are
not yet fully aligned with the TCFD recommendations. Whilst the Company is a small investment business
we continue to look to refine and develop our approach to and our understanding of our climate-related
financial risks and opportunities with a view to meeting the TCFD recommendations in full by 2025.
Governance
The management of our investments is the responsibility of the Board.
The assessment and management of the Company’s principal risks and new and emerging risks, includ-
ing climate-related risks, is a matter for the Audit Committee which, in conjunction with the Investment
Committee, reviews these in relation to the Company’s investments and its business operation and re-
views the Company’s approach, policies and actions in relation to its risks which are then raised and
discussed with the Board.
The Board has overall responsibility for the Company’s investment management and risk management
including the extent of climate-related risks and opportunities.
Strategy
The Company’s Investment Committee, in conjunction with the Board, will continue to seek Strategic
Investment opportunities, that is, investments in smaller UK quoted companies which have capable man-
agement and good opportunities for growth. In considering investment in such companies, the Company
will aim to acquire significant minority holdings and to be represented on their boards where the Com-
pany’s management can use its experience and skills to assist in the development of these companies.
Where possible, we will use our influence with all such companies to ensure that climate impacts are
assessed, and strategies and processes are considered to address them.
Our Strategic Investments in the past have been balanced by the Company’s General Portfolio, which
consists of a broad range of investments in major USA, UK and other European companies which pro-
vides a diversified exposure to international equity markets. Given the size and value of our General
Portfolio investments, we expect that the management of these global companies will ensure that climate-
change impacts are fully assessed, and appropriate strategies and processes are put in place to achieve
net zero emissions by 2050 or sooner.
In the short to medium term, the Board has assessed that the most significant impact to our General
Portfolio investments as a result of climate-change related risks will be the costs to the investee compa-
nies of meeting regulatory changes and adjusting to market change and changing consumer behaviour.
The Board also anticipates that some of the investee companies will identify and benefit from sustainable
climate-change related opportunities.
As our General Portfolio investments come from a broad range of sectors, the Board has assessed that
a climate change related stress scenario of 2°C or lower is unlikely to impact the viability of the Group
over the short to medium term.
The Company’s business operation is simple and straight-forward: with a view to reducing our carbon
footprint, the Company has moved from leased premises and now operates from serviced office premises
just outside the City of London with no employees or staff save for the staff of our company secretary,
City Group. On review of the risks to our operation, the Board has concluded that it would not be impacted
by any material climate-change related risks in the short to medium-term.
66
Risk Management
The Board and the Audit Committee reviews the Company’s actual and emerging risks and risk manage-
ment processes each year. Depending on the level of risks assessed, the Audit Committee and the Board
will consider and agree actions to mitigate these risks.
We will monitor and maintain sufficient diversification in our General Portfolio of investments to mitigate
climate-change related risks associated with those investments.
The Board has not carried out a detailed assessment of the climate-change risks that might affect our
business operation.
The Company will seek to achieve net-zero emissions by 2050 or earlier and with this target in mind we
will continue to examine opportunities to increase efficiencies and reduce energy consumption in our
business operation.
Metrics and Targets
The key measure used to assess the progress of our investments and our own business operation in
reducing environmental impacts is carbon emissions.
The Company and its subsidiaries have no Scope 1 emissions and given the size and nature of the
Company’s investment business and there being little or no business travel, the Company has not previ-
ously needed to report on Scope 3 emissions.
In recent years, the Company has managed and reported on its Scope 2 emissions. During the year
ended 30 June 2023, the Group’s electricity consumption for our leased office premises in London was
1,167 KgCO2e equating to a carbon dioxide equivalent of 1.1 tonne (1.1 tCO2e). On 1 September 2023,
the Company moved to serviced London offices and no longer incurs separate electricity costs. During
the year ended 30 June 2024, the Group’s electricity consumption for our leased office premises (for the
months of July and August last year) and the Group’s electricity and gas consumption for our serviced
office premises (from 1 September last year) totalled 1,789 KgCO2e equating to a carbon dioxide equiv-
alent of 1.8 tonnes (1.8 tCO2e). The risks associated with increasing energy costs at our serviced office
premises in London can be managed as these are low relative to the net assets of the Group.
Excluded from Scope 3 emissions are a proportionate share of the Scope 1 and Scope 2 emissions of
companies that we are invested in where our shareholding is less than 0.01% of the issued share capital,
since we are unable to have any influence over the emissions of those companies. Those companies are
all major multinationals which will have their own plans for achieving net zero emissions by 2050 or earlier,
and the diversified nature of the General Portfolio means that the Company’s exposure to climate-change
related risks from these investments is minimal.
We will continue to manage and report on the Group’s Scope 1 (if any) and Scope 2 emissions with a
target of reducing emissions to net-zero as soon as possible and no later than 2050. We will engage with
the management of Strategic Investments that we might invest in in the future to encourage them to
achieve net-zero emissions by 2050 or earlier. We will continue to factor climate-change related risk into
our investment decision making process.
67
London Finance & Investment Group PLC
Summary of Results
For the five years ended 30 June 2024
2024
£000
2023
£000
2022
£000
2021
£000
2020
£000
Consolidated Statement of Financial
Position
Issued share capital
1,560
1,560
1,560
1,560
1,560
Share premium and other reserves
4,330
7,451
7,662
11,584
8,740
Company’s retained realised profits
16,453
9,472
7,872
5,749
5,498
Shareholders’ funds (all equity)
22,343
18,483
17,094
18,893
15,798
Non-controlling interest
-
157
141
129
103
22,343
18,640
17,235
19,022
15,901
Disposition of Capital
Non-current assets
40
3,164
4,050
8,369
6,834
Current assets
Listed investments (General Portfolio)
14,032
15,496
14,055
12,081
9,948
Other current assets
109
100
109
125
166
Cash and deposits
9,460
1,264
1,156
309
269
23,601
16,860
15,320
12,515
10,383
Liabilities and deferred tax
(1,298)
(1,384)
(2,135)
(1,862)
(1,316)
22,343
18,640
17,235
19,022
15,901
Net assets per share
71.6p
59.2p
54.8p
60.5p
50.6p
Dividend per share
1.2p
1.15p
1.15p
1.15p
1.15p
68
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, Central Court, 25 Southampton
Buildings, London WC2A 1AL on Thursday 28 November 2024 at 12.30 p.m. (2.30 p.m. South Africa
time).
In order to ensure the safety of those planning to attend the Annual General Meeting and that appropriate
safety arrangements are in place, shareholders are asked to inform City Group, the Company Secretary,
of their intention to attend the Annual General Meeting by email to mail@city-group.com.
If shareholders do not wish to attend, we strongly encourage them to appoint the Chairman as their proxy
and submit their Forms of Proxy to the appropriate Registrars as soon as possible. Questions may also
be submitted by email and responses will be provided subsequent to the meeting.
Resolutions
The Resolutions to be proposed and 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 9 will be proposed
as Ordinary Resolutions and Resolution 10 will be proposed as a Special Resolution.
1.
To receive the financial statements for the year ended 30 June 2024, together with the reports of
the Directors and the Independent Auditor thereon.
2.
To declare a final dividend for the year ended 30 June 2024 of 0.60 pence for each ordinary share
in the capital of the Company.
3.
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 30 June 2024.
4.
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
5.
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.
6.
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.
7.
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.
8.
To re-appoint PKF Littlejohn LLP as the Company’s Independent Auditor and to authorise the
Directors to agree its remuneration.
69
London Finance & Investment Group PLC
9.
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
3,792,520 ordinary shares), provided that this authority shall expire at the conclusion of the
Annual General Meeting of the Company to be held in 2025, 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.
10.
THAT,
(a)
subject to the passing of Resolution 9 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 9,
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 9 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
Central Court,
Suite 1.01,
25 Southampton Buildings.
London WC2A 1AL
City Group PLC
Company Secretary
25 September 2024
70
Notes
1.
A Form of Proxy is enclosed.
2.
Shareholders are encouraged to nominate the Chairman as their proxy. A shareholder is entitled
to appoint a proxy other than the Chairman to exercise all or any of their rights to attend and to
speak and vote on their behalf at the Meeting. A shareholder may appoint more than one proxy
in relation to the Meeting provided each proxy is appointed to exercise the rights attached to a
different share or shares held by that shareholder. A proxy need not also be a shareholder but
must attend the meeting for the shareholder’s vote to be counted.
3
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 Mid-
lands, B62 8HD, U.K., for those shareholders on the UK branch of the register, or Computershare
Proprietary Limited, at 15 Biermann Avenue, Rosebank, Johannesburg 2196, South Africa or
Private Bag X9000, Saxonwold 2132, South Africa, for those shareholders on the South African
branch of the register, not later than 12.30 p.m. (2.30 p.m. South Africa time) on Tuesday, 26
November 2024. Any shareholders who miss the deadline for returning their proxies will, if they
wish to vote at the Meeting, need to attend and vote their shares in person at the Meeting.
4.
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 City Group, the Company Secretary, at
mail@city-group.com. All questions should be received by 12.30 p.m. (2.30 p.m. South Africa
time) on Tuesday, 26 November 2024.
5.
Only shareholders registered in the register of members of the Company as at 6.00 p.m. (8.00
p.m. South Africa time) on Tuesday, 26 November 2024 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.
6.
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.
7.
Copies of the Directors’ letters of appointment are available on request to the Company
Secretary, City Group, by making the request to mail@city-group.com
8.
As at the date of the Annual Report, the Company’s issued share capital consists of 31,207,479
ordinary shares, carrying one vote each. Accordingly, the total voting rights in the Company are
31,207,479.
9.
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.
71
London Finance & Investment Group PLC
72
Note: For shareholders registered on the South African branch of the register:
11.
A Form of Proxy is attached for the convenience of any certificated or dematerialised Lonfin
shareholders with own-name registrations who cannot attend the Meeting, but who wish to be
represented thereat. To be valid, completed Forms of Proxy must be received by the transfer
secretaries of the Company, Computershare Proprietary Limited, at 15 Biermann Avenue
Rosebank, Johannesburg 2196 or at Private Bag X9000, Saxonwold, 2132, South Africa by no
later than 2.30 p.m. South Africa time on Tuesday, 26 November 2024.
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:
2024
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’)
Friday, 4 October
Annual Report published on SENS and posting date
Thursday,10 October
The last date to trade in order to be eligible to participate in and vote at
the Annual General Meeting
Thursday, 21 November
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’)
Tuesday, 26 November
Last day for lodging Forms of Proxy by 2.30 p.m. (SA time)
Tuesday, 26 November
Date of the Annual General Meeting at 2.30 p.m. (SA time)
Thursday, 28 November
Result of Annual General Meeting published on SENS
Thursday, 28 November
Change of Address:
Members are requested to advise the United Kingdom Registrars, Neville Registrars Limited, or the South
African Registrars, Computershare Investor Services (Pty.) Limited, of any change of address.
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 28 November 2024 at 12:30 p.m. (2.30 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
For
Against
Withheld
Ordinary Resolutions
1. To receive the financial statements for the year ended 30
June 2024, together with the reports of the directors and
auditors thereon.
2. To declare a final dividend of 0.60p for the year ended 30
June 2024.
3. To approve the Directors’ Remuneration Report (excluding
the Director’s Remuneration Policy).
4. To re-elect Dr F.W.A. Lucas as a director.
5. To re-elect Mr J. H. Maxwell as a director.
6. To re-elect Mr. E. J. Beale as a director.
7. To re-elect Mr W. H. Marshall as a director.
8. To re-appoint PKF Littlejohn LLP as Auditor of the
Company and to authorise the Directors to agree its
remuneration.
9. To authorise the directors to allot shares under Section
551 of the Companies Act 2006.
Special Resolution
10. To disapply pre-emption rights.
Dated………………………………………2024
Signature……………………………………
✃
London Finance & Investment Group PLC
London Finance & Investment Group PLC
Notes
1.
The shareholders are encouraged to nominate the Chairman as their proxy. However, a
shareholder is entitled to appoint a proxy other than the Chairman to exercise all or any of their
rights to attend and to speak and vote on their behalf at the Meeting. A shareholder may appoint
more than one proxy in relation to the Meeting provided each proxy is appointed to exercise the
rights attached to a different share or shares held by that shareholder. A proxy need not also be
a shareholder but must attend the Meeting for the shareholder’s vote to be counted.
2.
Please indicate with a cross in the appropriate box on your Form of Proxy 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.
3.
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.
4.
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 Proprietary Limited:
o
by hand or by mail to 15 Biermann Avenue, Rosebank, Johannesburg 2196,
South Africa; or
o
by mail to Private Bag X9000, Saxonwold 2132, South Africa
not later than 12:30 p.m. (2.30 p.m. South Africa time) on Tuesday, 26 November 2024.
(Shareholders on the South African branch of the register should note Note 11 to the Notice
above). Any shareholders who miss the deadline for returning their proxies will need to attend
and vote their shares in person at the Meeting.
5.
Completion and return of this Form of Proxy will be taken as your final votes where the Chairman
has been appointed as the proxy.
6.
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).
7.
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.