LONDON & ASSOCIATED PROPERTIES PLC

Annual Report (ESEF) • Apr 30, 2025

213800GLCG54Q578EX512024-01-012024-12-31213800GLCG54Q578EX512024-12-31iso4217:GBP213800GLCG54Q578EX512023-12-31213800GLCG54Q578EX512023-01-012023-12-31iso4217:GBPxbrli:shares213800GLCG54Q578EX512022-12-31ifrs-full:IssuedCapitalMember213800GLCG54Q578EX512022-12-31ifrs-full:SharePremiumMember213800GLCG54Q578EX512022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800GLCG54Q578EX512022-12-31ifrs-full:CapitalRedemptionReserveMember213800GLCG54Q578EX512022-12-31ifrs-full:TreasurySharesMember213800GLCG54Q578EX512022-12-31ifrs-full:RetainedEarningsMember213800GLCG54Q578EX512022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800GLCG54Q578EX512022-12-31ifrs-full:NoncontrollingInterestsMember213800GLCG54Q578EX512022-12-31213800GLCG54Q578EX512023-01-012023-12-31ifrs-full:IssuedCapitalMember213800GLCG54Q578EX512023-01-012023-12-31ifrs-full:SharePremiumMember213800GLCG54Q578EX512023-01-012023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800GLCG54Q578EX512023-01-012023-12-31ifrs-full:CapitalRedemptionReserveMember213800GLCG54Q578EX512023-01-012023-12-31ifrs-full:TreasurySharesMember213800GLCG54Q578EX512023-01-012023-12-31ifrs-full:RetainedEarningsMember213800GLCG54Q578EX512023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800GLCG54Q578EX512023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember213800GLCG54Q578EX512023-12-31ifrs-full:IssuedCapitalMember213800GLCG54Q578EX512023-12-31ifrs-full:SharePremiumMember213800GLCG54Q578EX512023-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800GLCG54Q578EX512023-12-31ifrs-full:CapitalRedemptionReserveMember213800GLCG54Q578EX512023-12-31ifrs-full:TreasurySharesMember213800GLCG54Q578EX512023-12-31ifrs-full:RetainedEarningsMember213800GLCG54Q578EX512023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800GLCG54Q578EX512023-12-31ifrs-full:NoncontrollingInterestsMember213800GLCG54Q578EX512024-01-012024-12-31ifrs-full:IssuedCapitalMember213800GLCG54Q578EX512024-01-012024-12-31ifrs-full:SharePremiumMember213800GLCG54Q578EX512024-01-012024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800GLCG54Q578EX512024-01-012024-12-31ifrs-full:CapitalRedemptionReserveMember213800GLCG54Q578EX512024-01-012024-12-31ifrs-full:TreasurySharesMember213800GLCG54Q578EX512024-01-012024-12-31ifrs-full:RetainedEarningsMember213800GLCG54Q578EX512024-01-012024-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800GLCG54Q578EX512024-01-012024-12-31ifrs-full:NoncontrollingInterestsMember213800GLCG54Q578EX512024-12-31ifrs-full:IssuedCapitalMember213800GLCG54Q578EX512024-12-31ifrs-full:SharePremiumMember213800GLCG54Q578EX512024-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800GLCG54Q578EX512024-12-31ifrs-full:CapitalRedemptionReserveMember213800GLCG54Q578EX512024-12-31ifrs-full:TreasurySharesMember213800GLCG54Q578EX512024-12-31ifrs-full:RetainedEarningsMember213800GLCG54Q578EX512024-12-31ifrs-full:EquityAttributableToOwnersOfParentMember213800GLCG54Q578EX512024-12-31ifrs-full:NoncontrollingInterestsMember213800GLCG54Q578EX51bus:FullAccounts2024-01-012024-12-31213800GLCG54Q578EX51bus:Consolidatedbus:CompanySecretaryDirector12024-01-012024-12-31213800GLCG54Q578EX51bus:Audited2024-01-012024-12-31213800GLCG54Q578EX51bus:Consolidated2024-01-012024-12-31213800GLCG54Q578EX51bus:Consolidated2024-12-31213800GLCG54Q578EX51bus:Director12024-01-012024-12-31213800GLCG54Q578EX51bus:CompanySecretaryDirector12024-01-012024-12-31213800GLCG54Q578EX51bus:FullIFRS2024-01-012024-12-31xbrli:pure LONDON & ASSOCIATED PROPERTIES ANNUAL REPORT 2024 Contents Annual General Meeting 16 June 2025 Announcement of half year results to 30 June 2025 Late August 2025 Announcement of annual results for 2025 Late April 2026 OVERVIEW 1 LAP at a glance 2 Chairman and Chief Executive’s review 2024 STRATEGIC REPORT 4 Financial and performance review 9 Principal activities, strategy & business model 9 Risks and uncertainties 10 Bisichi risks and uncertainties 11 Key performance indicators 12 Corporate responsibility GOVERNANCE 20 Directors & advisors 21 Directors’ report 24 Corporate Governance 26 Governance statement by the Chairman oftheremuneration committee 27 Annual remuneration report 32 Remuneration policy summary 34 Audit committee report 35 Directors’ responsibilities statement 37 Independent auditor’s report FINANCIAL STATEMENTS 44 Consolidated income statement 44 Consolidated statement of comprehensive income 45 Consolidated balance sheet 46 Consolidated statement of changes in shareholders’ equity 47 Consolidated cash flow statement 48 Group accounting policies 55 Notes to the financial statements 84 Five year financial summary Financial calendar London & Associated Properties PLC 2024 1 London & Associated Properties PLC (“LAP” or the "Group") is a main market listed group which invests in and manages UK industrial and retail property. LAP owns £48.0 million of property and seeks to create environments where tenants can thrive. The Group also holds a substantial investment in Bisichi PLC, which operates coal mines in South Africa and owns UK property and other investments. In accordance with IFRS 10 the results of Bisichi have been consolidated in the Group accounts. FINANCIAL HIGHLIGHTS Fully diluted net assets per equity share IFRS net assets Properties portfolio valuation 32.91p £50.6m £48.0m 2023: 33.38p 2023: £48.3m 2023: £46.1m Includes investment properties, head leases, assets held for sale and property inventory. Excludes properties under management. OVERVIEW LAP at a glance KEY PROJECTS KEY PROJECTS HIGHLIGHT Property • Runcorn Manor Park Industrial Estate • Adlington Court Industrial Estate • Essential community retail • West Ealing development • Runcorn industrial portfolio strong rental and value growth • Warrington industrial portfolio strong rental and value growth • Essential community retail portfolio steady rental and value growth • Residential development – construction planned to start late 2025 Coal production • In South Africa, Black Wattle produced 1.5m metric tonnes of Run of Mine Coal in 2024 (2023: 0.8m metric tonnes) • The API4 price averaged $106 in 2024 compared to $120 in 2023 • 209,000 metric tonnes of coal were exported compared to 134,000 metric tonnes in 2023, assisted by continuing efforts to improve rail infrastructure in South Africa • Total domestic and export sales of coal were 1.2 million metric tonnes (2023: 1.0 million metric tonnes) • These factors had a material positive impact on the results for the year • Climate related risks are being addressed for coal processing operations Equity investments • Investments valued at £15.0 million (2023: £15.0 million) • Dividend income of £0.34 million (2023: £0.56 million) • Value increase of £0.07 million (2023: £0.76 million) • Portfolio comprised listed equities and listed equity related funds involved or invested in extractive and energy related business activities, including entities involved in the extraction of commodities needed for the clean energy transition 2 London & Associated Properties PLC 2024 I am pleased to present our accounts for the 12 months to 31 December 2024 CONSOLIDATED RESULTS Total net assets of the Group at the year end were £50.6 million (2023: £48.3 million). Total net assets attributable to shareholders were £28.1 million (2023: £28.5 million). The Group profit before tax was £4.4 million (2023: loss £3.5 million), with losses attributable to shareholders of £0.4 million (2023: £3.9 million). The performance of the Group this year has been supported by improvements in property values and Bisichi's profits (as detailed in the Bisichi section below). Our consolidated property portfolio was valued at £48.0 million at 31 December 2024 compared to £46.1 million on a like-for-like basis a year earlier. This reflects a pleasing valuation increase (including head leases) of £1.8 million. Rental income for the Group (excluding sold properties and bad debt charges) increased by £0.1 million (3.0%) to £3.5 million (2023: £3.4 million). This result reflects the resilience of our assets; even in the current high interest rate environment we have achieved increased rents on many new lettings. Rental income resilience can also be seen in our occupancy levels, which were 96.4% at year end (2023: 97.3%). Rent collection levels have similarly remained strong, with an improved 94% of Q1 2025 rents received to date compared to 92% at the corresponding time last year. We continue to monitor our cost base following the outsourcing of our property management functions and our relocation to smaller offices. LAP’s overheads were £0.3 million (11.3%) lower than in 2023. LAP PROPERTY ACTIVITIES Industrial Industrial constitutes 29% (2023: 27%) of our investment property portfolio by value. At Manor Park, Runcorn, our 100,000 sq ft industrial estate had been fully let, however we currently have one lease expiry where the tenant will hand back the unit. We are negotiating with a number of parties to take a new lease there. Demand remains excellent and we are confident that we will have grown both the rent on this unit and the estimated rental levels of the estate once a new tenant has been identified. At Adlington Court, Warrington, our 25,000 sq ft industrial estate, our largest tenant by rental value who occupied two units went into administration during the year. We took the decision to split the units and have subsequently re-let one of them at a rent of £9.25 psf. This compares very favourably with the previous passing rent of £6.25 psf. The second unit required a higher level of refurbishment and is now being marketed with strong interest being shown. Essential Community Retail Essential community retail constitutes 71% (2023: 73%) of our investment property portfolio by value. This part of our portfolio continues to perform well and remains close to fully let. Income from these properties on a like for like basis has risen by 6.1%. We continue to monitor each property’s performance closely and spend significant energy seeking to minimise residual costs and cash leakage. We did not dispose of any of these assets during the year. West Ealing As previously reported, in 2024 we fully implemented the planning consent for 56 flats and four retail units held by our joint venture, Broadway Regen Limited. In common with the rest of the residential development market this project has experienced a difficult 2024. There have been headwinds throughout, of which the most severe has been inflation in construction costs. Contractors have responded with tender prices in the range of £18-19 million. We and our advisors are currently reviewing these tenders and looking to find savings where possible. Pricing has also been affected by the perceived risk now brought about by new regulation, particularly for tall buildings, which is being factored into the tender process by construction companies. We are exploring a pre-sale of all the flats to minimise risk and interest costs, and we are working with our lenders to agree the best financial outcome for all parties. All of these elements are still underway, and we remain hopeful that we will achieve a satisfactory outcome, but there remain significant risks that may impact our overall financial return from this project including further write-downs of our equity position. During the year, we terminated our relationship with the sponsor and project manager of this development. Purley A planning application submitted in 2022 for 44 flats and 4 town houses was rejected in January 2024 despite being recommended for approval by the planning officer. Our appeal, although we won on design and construction matters, was ultimately unsuccessful and due to the cost and time involved in submitting a new planning application, we have decided not to proceed with the project. The business has since been closed. Impairment provisions for investments of £0.5 million were made in 2023, accordingly the cessation of this development has had limited financial effect in 2024. DEBT MANAGEMENT Our £13.6 million 5-year term loan with QIB (UK) PLC, expiring in 2027, is fully compliant and secured against a portfolio of retail and industrial properties. The interest rate on the loan with QIB is at the Bank of England base rate + 3.95% and there is no amortisation. The lender has agreed to reduce the margin to 2.95% from May 2025, although this has not been formally documented. STRATEGIC REPORT Chairman and Chief Executive’s review 2024 London & Associated Properties PLC 2024 3 STRATEGIC REPORT CHAIRMAN AND CHIEF ExECUTIVE’S REVIEW 2024 DRAGON RETAIL PROPERTIES Since 2001, Dragon has owned a property in Clifton, Bristol let partly to Boots the Chemist and partly to one of Bristol’s best- known nightclubs. Dragon’s loan of £0.7 million from Santander was renewed to July 2027, during the year. BISICHI PLC For 2024, Bisichi plc, our 41.6% owned subsidiary, made a profit before interest, tax, depreciation and amortisation (EBITDA) of £10.8 million (2023: £3.4 million) and an operating profit before depreciation, fair value adjustments and exchange movements (Adjusted EBITDA) of £10.4 million (2023: £2.6 million). During 2024, Bisichi benefited from a significant improvement in mining production and lower mining costs at their South African coal mining asset, Black Wattle Colliery. This offset the lower prices for its coal sold by Sisonke Coal Processing, Bisichi's South African coal processing operation. A successful transition to Bisichi's new mining area at Black Wattle in late 2023 resulted in a steady improvement in mining production in 2024 and lower mining costs compared to the reserves mined in 2023. We are pleased to report that Bisichi achieved production of 1.5 million metric tonnes in 2024, compared to 0.8 million metric tonnes in 2023. The increased production at Black Wattle also positively impacted Sisonke Coal Processing, with coal sales increasing to 1.2 million metric tonnes (2023: 1.0 million metric tonnes). As previously reported, Transnet, the South African state rail operator and the wider South African coal industry are working hard collectively to implement measures to increase rail capacity. We are pleased to report that during the period, Bisichi’s rail exports increased to 209,000 metric tonnes, compared to 134,000 metric tonnes in 2023. In 2024, the improved rail exports were offset by lower prices of Free on Board (FOB) coal from Richards Bay Coal Terminal (API4 price) and achievable domestic prices. During the year, the API4 price averaged US$106 compared to US$120 in 2023. While lower coal prices achievable during the year impacted revenue, the increased coal sales volume enabled Bisichi’s revenue to rise to £52.3 million (2023: £49.3 million). Looking ahead to 2025, Bisichi remains optimistic about the continued benefits from Black Wattle’s enhanced production and the positive developments in rail logistics. However, it is mindful of the current coal market volatility, with lower seaborne coal prices reflecting a temporary build up in global coal supply and a slowdown in demand. Bisichi is proactively managing this by maintaining a diversified customer base and remains confident in the long-term value of its South African operations. Bisichi recognises the need for, and is committed to, the diversification of its future business activities. Bisichi is continually looking at alternative mining, commodity and renewable energy related opportunities, as well as new opportunities to add to its existing UK property and equities investment portfolios. In the interim, Bisichi continues to work closely with Vunani Mining, its BEE partner in Black Wattle and Sisonke Coal Processing, to ensure that it is a responsible steward of its legacy coal operations taking into account the climate-related risks outlined in our climate report on page 12 and the impact these risks may have on all our stakeholders. Bisichi’s total non-current and current listed equity related investments held at fair value through profit and loss were valued at £15.0 million (2023: £15.0 million). Bisichi realised dividend income from investments during the period of £0.34 million (2023: £0.56 million) and a gain in value from investments of £0.07 million (2023: £0.76 million). Bisichi’s investment portfolios comprise primarily listed equities and listed equity related funds involved or invested in extractive and energy related business activities, including entities involved in the extraction of commodities needed for the clean energy transition. In the UK, rental revenue from Bisichi’s retail property portfolio remains a stable contributor, aggregating £1.3 million (2023: £1.3 million). We are also pleased to report that, in December 2024, Bisichi executed a renewed five year term facility with Hodge Bank limited for £3.9 million secured against Bisichi’s UK property portfolio. The directors of Bisichi recommend a final dividend of 4p (2023: 4p) per share, of which LAP would receive £0.2 million. This would take the total dividend per share for the year to 7p (2023: 7p) if approved by its shareholders. Finally, we would like to thank employees, advisers and stakeholders for their ongoing efforts and support. John Heller, Chairman and Chief Executive 29 April 2025 4 London & Associated Properties PLC 2024 The fi nancial statements for 2024 have been prepared to refl ect the requirements of IFRS 10. This means that the accounts of Bisichi PLC (a London Stock Exchange main market quoted company – BISI) (“Bisichi”), have been consolidated with those of LAP. Bisichi continues to operate as a fully independent company and currently LAP owns only 41.6% of the issued ordinary share capital. However, because related parties also have shareholdings in Bisichi and there is a wide disposition of other shareholdings, LAP is deemed under IFRS 10, to have effective control of Bisichi for accounting purposes. This treatment means that the income and net assets of Bisichi are disclosed in full and the value attributable to the “non-controlling interest” (58.4%) is shown separately in the equity section as a non-controlling interest. There is no impact on the net assets attributable to LAP shareholders. Dragon Retail Properties Limited (“Dragon”) and West Ealing Projects Limited (“West Ealing”) are both 50:50 joint ventures with Bisichi and are also consolidated. Another joint venture, Development Physics Limited (“DPL”) was owned 33% each by LAP, Bisichi and a third party. This too is consolidated but was dissolved in Q1 2025, following cessation of its activities. Shareholders are aware that LAP is a property business with a signifi cant investment in a listed mining company. The effect of consolidating the results, assets and liabilities of the property business and the mining company makes the fi gures complex and less transparent. Property company accounts are already subject to signifi cant volatility as valuations of property assets as well as derivative liabilities can be subject to major movements based on market sentiment. Most of these changes, though, have little or no effect on the cash position and it is, of course, self-evident that cash fl ow is the most important factor infl uencing the success of a property business. We explain the factors affecting the property business fi rst, clearly separating these from factors affecting the mining business which we do not manage. Comments about Bisichi (the mining business) are based on information provided by the independent management of that company. This report comments on the performance of each of the Group’s segments separately. LONDON & ASSOCIATED PROPERTIES PLC We own industrial and community essential retail property and additionally are seeking to develop housing for local communities. Our key objective is to ensure that we offer safe and secure environments for people to live and work in and visit. LAP’s core objectives in 2024 have continued to be: • Provide environments in which tenants can thrive. • Continually improve our operating cashfl ow. • Maintain minimal exposure to the fashion led or shopping centre retail sector. • Ensure gearing is at an appropriate level. • Maintain suffi cient cash in the business to be able to take advantage of opportunities as they arise. Rental Income and Occupancy As at 15 April 2025 Q1 2025 collections were 94% (2024: 92%). We continue to engage with occupiers to ensure our properties contain a diversifi ed mix of tenants to match customers’ evolving requirements. This is particularly applicable to our essential retail assets, that serve local communities. Like for like net rental income was down by £61,000 (2.4%). During the year there was an increase in our doubtful debt provisions of £345,000 from 2023, predominantly against three of larger tenants who encountered fi nancial diffi culty. Whilst these units have now been relet, provisions have been made for unpaid rent should we ultimately be unable to recover the amounts due. Excluding provisions and development properties, net rental income increased by £74,000 (2.9%). After excluding sales and acquisitions over the past two years, like for like gross rental income was up £101,000 (3.0%) as shown below. There was £162,000 of net increases in rents from lease reviews, renewals and new lettings and a net decrease of £61,000 from rent lost due to expiries and subsequent vacant periods. Gross Rental Income (£'000) Gross Rental Income Void levels increased slightly to 3.6% at 31 December 2024 (2023: 2.7%) but remain low across the portfolio. Whilst we have seen some tenant failures this year contributing to the void rate, we have received strong interest in these units with new tenants being brought on board, often at increased rents. Voids are largely created through the natural rotation of tenants when their requirements at lease events have changed, and we do not have suitable accommodation available. We monitor tenants’ requirements on a regular basis and aim to understand their intentions in advance of lease events. Property Investment Activities There were no property disposals or acquisitions during 2024. In 2023 we relinquished our interest in Orchard Square Limited as described below and in note 6. LAP continues to look for investment opportunities, particularly within the industrial sector. LAP also continues to develop and refurbish all its properties as appropriate to provide environments in which tenants can thrive. Our joint venture residential developments are discussed later in this review. STRATEGIC REPORT Financial and performance review 2023 Disposals (1,133) Leasing 162 Expiries (61) 101 2024 4,532 3,510 London & Associated Properties PLC 2024 5 STRATEGIC REPORTSTRATEGIC REPORT Financial and performance review INCOME STATEMENT BUSINESS ANALYSIS 2024 £’000 2023 £’000 Rental income 2,303 3,323 Service charge income 149 451 Management income from third party properties 34 18 LAP Revenue 2,486 3,792 Direct property costs (1,100) (1,553) Impairment of inventory (900) - Overheads (2,000) (2,254) Depreciation (267) (266) Operating (loss)/profit (1,781) (281) Finance income 92 110 Finance expenses (1,437) (2,094) Result before valuation movements (3,126) (2,265) Other segment items Net increase/(decrease) on revaluation of investment properties 1,525 (150) Gain/(loss) on disposal of subsidiaries 50 (1,930) Profit/(loss) on disposal of fixed assets - 4 Revaluation and other movements 1,575 (2,076) LAP loss for the year before taxation (1,551) (4,341) Note: The figures exclude inter-company transactions. EBITDA 2024 £’000 2023 £’000 Operating (loss)/profit (1,781) (281) Excluding non-cash items: Depreciation & amortisation 267 266 Impairment of Inventory 900 - EBITDA (614) (15) Income from subsidiaries: Management fees 236 236 Dividend income 311 666 Adjusted EBITDA (67) 887 Funding & Refinancing Activities No loans were repaid, or new loans or other forms of finance assumed in 2024. Our 5-year, £13.6m term loan with QIB taken out in 2022 was covenant compliant throughout the year. In 2023 our term loan with Phoenix CRE S.à.r.l of £12.7 million became due. This loan is secured on a single property, Orchard Square, Sheffield. The loan is non-recourse to the rest of the LAP Group. The property was marketed for sale in 2023 with an agreement for sale being reached with a buyer who was then unable to complete. LAP is working collaboratively with and under the direction of the lender to manage the property, completing key asset management activities prior to remarketing the property for sale when sentiment improves. As LAP has declined the opportunity to repay the loan and cure the breach arising as a result, LAP has effectively lost control of the asset. LAP no longer has exposure, or rights, to variable returns from its involvement with Orchard Square Limited. In accordance with IFRS10, the investment in Orchard Square Limited has been treated as having been relinquished in July 2023. The results of Orchard Square Limited are reflected in the Income Statement to July 2023 with neither the loan nor the asset being shown in the accounts at 31 December 2023 or 2024. Further details can be found in note 19 to the accounts. The loan relating to our development joint venture is discussed later in this review. The above figures for LAP and commentary below exclude the cash items of management fee income from Bisichi and Dragon of £236,000 (2023: £236,000) and dividend income from Bisichi of £311,000 (2023: £666,000). The non-cash item, loss on disposal of subsidiaries in 2023 relates to our decision not to cure the breach of Orchard Square Limited’s loan covenants and the subsequent loss of control as prescribed by IFRS10. In 2024 our joint venture Development Physics Limited closed with a net gain of £50,000 in the year as a result of releasing provisions made in previous years. We have again managed to reduce our overheads this year and continue exploring opportunities to do so again in 2025. LAP generated an adjusted EBITDA loss of £0.1 million (2023: profit £0.9 million). LAP generates the majority of its income from property rentals, property management fees and development activities. Interest costs in 2024 reduced by £749,000 due to the disposal of Orchard Square Limited and increased by £92,000 due to a higher average BoE base rate over the year compared to 2023. Investment property valuation increases of £1.525 million (2023: reductions of £0.15 million) arose from enhanced retail property values of £0.3 million (2023: decrease £0.08 million) and strengthened industrial property values of £1.225 million (2023: decrease £0.07 million). Our retail assets - entirely consisting of essential retail - have low vacancy rates and are witnessing steady increases in rental levels at lease events, which is the main driver of the value growth experienced in 2024. Our industrial assets have seen several pleasing rent increases in 2024, which, similar to the retail portfolio, has been the main driver of value growth. Producing a profit through ongoing asset management activities to generate further rental income, investing cash currently on deposit at the appropriate time into new property investments combined with generating returns from our existing investments, including Bisichi, remains the key focus of the business for the future. 6 London & Associated Properties PLC 2024 STRATEGIC REPORT FINANCIAL AND PERFORMANCE REVIEW BALANCE SHEET SEGMENT ASSETS 2024 £’000 2023 £’000 Non-current assets – property 25,870 23,801 Non-current assets – property, plant & equipment 832 268 Trading asset 8,996 8,889 Assets held for sale - 545 Cash & cash equivalents 1,856 3,799 Current assets – others 1,319 1,237 Total assets excluding investment in joint ventures 38,873 38,539 Segment liabilities Borrowings (18,233) (17,650) Current liabilities (3,142) (3,238) Non-current liabilities (1,692) (1,272) Total liabilities (23,067) (22,160) Net assets 15,806 16,379 Note: The figures exclude inter-company transactions between LAP, Bisichi and Dragon. Total assets, consisting mainly of trading and investment properties, have increased from £38.5 million to £38.9 million. LAP’s property portfolio increased in value by £1.5m million on revaluation. Property, plant and equipment increased by £0.5 million in the year following the extension of the lease on our existing head office for a further 3 years. The trading asset is our residential development JV in Ealing. £1.0 million of development expenditure was incurred in the year, a significant element of which related to non-cash items including bank costs and interest. A £0.9 million impairment provision has been made to reflect the Director’s assessment of the current value of the development. Total liabilities, consisting mainly of bank loans, have increased from £22.2 million to £23.1 million largely reflecting the increase in lending to fund the investment in our residential development JV in Ealing. LAP’s main borrowings consist of a £13.6 million term loan facility expiring in August 2027 and a rolling development loan relating to West Ealing of £4.9 million that expired in January 2025. The lender continues to support us with the build out of the development. As in previous years, all loans are secured on core property and are covenant compliant at the year end. GEARING 2024 £’000 2023 £’000 Total borrowings 18,233 17,650 Less cash and cash equivalents (1,856) (3,799) Net borrowings 16,377 13,851 Total Equity 15,806 16,379 103.6% 84.6% The business has not set a target gearing level but monitors its debt and asset values constantly to maintain an appropriate level, considering market sentiment, the availability and cost of debt and cash flow forecasts. CASH FLOW CASH FLOW FROM OPERATIONS 2024 £’000 2023 £’000 Cash (outflows)/inflows from operating activities (1,133) 1,121 Cash inflows from investing activities 403 641 Cash outflows from financing activities (1,213) (2,648) Net decrease in cash and cash equivalents (1,943) (886) Cash and cash equivalents at 1 January 3,799 4,685 Cash and cash equivalents at 31 December 1,856 3,799 Note: The figures within the LAP cashflow include inter-company transactions such as management fee income of £236,000 (2023: £236,000) and dividends from Bisichi of £311,000 (2023: £666,000). Cash outflows from operating activities include expenditure on development properties of £1.0 million (2023: £0.8 million). Excluding this expenditure, adjusted cash outflows from operating expenditure were £0.1 million (2023: inflows £1.9m). Investing activities include dividend income from Bisichi of £0.3 million (2023: £0.7 million). Financing activities in 2024 include the receipt of a bank loan of £0.5 million in relation to property development expenditure and interest payments on the servicing of debt of £1.5 million (2023: £2.2 million). 2023’s interest payment included loan interest for Orchard Square to July 2023 of £0.7 million. Interest rate risk is discussed further in note 22. WEST EALING PROJECTS LIMITED West Ealing is a 50:50 joint venture between LAP and Bisichi created with the purpose of delivering a primarily residential development in West Ealing, London. The joint venture owns 90% of the property which is under development and on which £9.9 million has been spent to date (2023: £8.9 million), West Ealing is disclosed within LAP in the segmental analysis in note 1 to the financial statements. There is a linked development loan of £4.9 million (2023: £4.4 million), described further in note 19. Planning permission is held for the creation of 56 new residential apartments and 4 ground floor shops on the site. An impairment review has been conducted of the value of the development by the Directors, which has resulted in a £900,000 provision recognising the uncertain commercial outcome including the construction contract cost and future sales prices. A 10% variation in the future construction costs of the project results in a circa £1.8 million change to its current development value. London & Associated Properties PLC 2024 7 STRATEGIC REPORT FINANCIAL AND PERFORMANCE REVIEW DEVELOPMENT PHYSICS LIMITED Development Physics was a joint venture between LAP, Bisichi and Metroprop Real Estate, owned equally by the three parties. It was set up, for the purpose of delivering a residential development of 44 flats and 4 town houses in Purley, London. Following an unsuccessful planning application and subsequent appeal the JV partners decided to stop development activities and allow the options over parcels of land to lapse. The company has subsequently been closed. Provisions for the carrying value of the development were made in previous years and the financial effect of the development in 2024 is limited. BISICHI PLC Although the results of Bisichi PLC have been consolidated in these financial statements, LAP has no direct influence over the management of Bisichi. The comments below are based on the published accounts of Bisichi. The Bisichi group results are stated in full in its published 2024 financial statements which are available at www.bisichi.co.uk. Bisichi has two core revenue streams – coal mining in South Africa and investment in retail proeprty in the UK. 2024 was a strong year for Bisichi’s South African coal mining and processing operations with higher mining production, lower mining costs, and a higher proportion of sales into the export market which offset lower average coal prices in 2024. Bisichi reported a profit before tax of £5.0 million (2023: £0.6 million) for the year resulting in an increase in taxation for the year to £1.6 million (2023: £0.3 million). This resulted in Bisichi achieving an overall profit for the year after tax of £3.4 million (2023: £0.3 million). Bisichi’s UK retail property investment were valued at the year end at £10.760 million (2023: £10.610 million). The property portfolio is actively managed by LAP and generated rental income of £1.3 million in the year (2023: £1.3 million). During the year Bisichi’s total non-current and current listed equity related investments held at fair value through profit and loss remained at £15.0 million (2023: £15.0 million). The Group achieved dividend income from investments during the period of £0.34 million (2023: £0.56 million) and a gain in value from investments of £0.07 million (2023: £0.8 million). The Group’s listed equity related investment portfolios comprise primarily listed equities and listed equity related funds involved or invested in extractive and energy related business activities, including entities involved in the extraction of commodities needed for the clean energy transition. Bisichi has a structured trade finance facility with Absa Bank Limited for R85 million held by Sisonke Coal Processing (Pty) Limited, a 100% subsidiary of Black Wattle Colliery (Pty) Limited. This facility comprises an R85 million revolving facility to cover the working capital requirements of Bisichi’s South African operations. The facility is renewable annually and is secured against inventory, debtors and cash that are held in Bisichi’s South African operations. In December 2024, Bisichi executed a renewed 5-year term facility of £3.9 million with Julian Hodge Bank Limited at an LTV of 50%. The loan is secured against the company’s UK retail property portfolio. The amount repayable on the loan at the year-end is £3.9 million. The overall interest cost of the loan is 4.00% above the Bank of England base rate. The loan is secured by way of a first charge over Bisichi’s investment properties in the UK which are included in the financial statements at a value of £10.76 million. The loan is repayable in December 2029. No banking covenants were breached by Bisichi during the year. Bisichi’s cash and cash equivalents decreased during the year by £0.8 million (2023: £7.8 million). The net balance of cash and cash equivalents (including bank overdrafts) at year end was a negative amount of cash of £1.1 million (2023: £0.3 million). Bisichi has considerable financial resources available at short notice including cash and cash equivalents (excluding bank overdrafts) of £1.2 million (2023: £3.2 million) and listed investments of £15.0 million (2023: £15.0 million) as at year end. These financial resources total £16.2 million (2023: £18.2 million). Bisichi’s net assets at 31st December 2024 were £36.1 million (2023: £33.6 million). Bisichi recognises the need for, and is committed to, diversification of its future business activities. Bisichi is continually looking at alternative mining, commodity and renewable energy related opportunities, as well as new opportunities to add to its existing UK property investment portfolios. In the interim, Bisichi continues to work closely with Vunani Mining, its BEE partner in Black Wattle and Sisonke Coal processing, as it is committed to being a responsible steward of its legacy coal operations taking into account the climate-related risks outlined in Bisichi’s climate report in its 2024 report and accounts and the impact these risks may have on all stakeholders. DRAGON RETAIL PROPERTIES LIMITED Dragon is a UK property investment company, owned 50:50 by LAP and Bisichi. The company has a Santander bank loan of £0.7 million secured against its investment property, which is covenant compliant, see note 19. The loan was renewed with Santander during the year for a further 3 years to July 2027, at a margin of 3.5% above the Bank of England base rate. Dragon incurred management fees of £72,000 (2023: £72,000) split equally between the two joint venture partners. Dragon has net assets of £1.3 million (2023: £1.2 million). Dragon continues to trade at near break-even, excluding property revaluations. ACCOUNTING JUDGEMENTS AND GOING CONCERN The most significant judgements made in preparing these accounts relate to the carrying value of the properties and investments. The Group uses external property valuers to determine the fair value of most of its properties. Under IFRS10 the Group has included Bisichi PLC in the consolidated accounts, as it is deemed to be under the effective control of LAP and has therefore been treated as a subsidiary. The directors of Bisichi consider their judgements and estimates surrounding the life of the mine and its reserves to have significant effect on the amounts recognised in the financial statements and to be an area where the financial statements are subject to significant estimation uncertainty. The life of mine remaining is currently estimated at 5 years. The Directors exercise their commercial judgement when reviewing the Group’s cash flow forecasts and the underlying assumptions on which the forecasts are based. The Group’s business activities, together with the factors likely to affect its future development, are set out in the Chairman’s Statement and Chief Executive’s Review and in this Report. Further disclosure of specific factors affecting going concern are discussed in more detail in the going concern section of the group accounting policies section of the financial statements. In addition, the Directors consider that Note 22 to the financial statements sets out the Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposure to credit risk, liquidity risk and other risks. 8 London & Associated Properties PLC 2024 STRATEGIC REPORT FINANCIAL AND PERFORMANCE REVIEW STATEMENT REGARDING SECTION 172 OF THE UK COMPANIES ACT Section 172 of the UK Companies Act requires the Board to report on how the directors have had regard to the matters outlined below in performing their duties. The Board consider the Group’s customers, employees, local communities, suppliers and shareholders as key stakeholders of the Group. During the year, the Directors consider that they have acted in a way, and have made decisions that would most likely promote the success of the Group for the benefit of its members as a whole as outlined in the matters below: • The likely consequences of any decision in the long term: see Principal Activity, Strategy & Business Model and Risks and Uncertainties on pages 9 to 10; • The interests of the Group’s employees; ethics and compliance; fostering of the Company’s business relationships with suppliers, customers and others; and the impact of the Group’s operations on the community and environment: see Corporate Responsibility and Sustainability reports on pages 12 to 19; • The need to act fairly between members of the Company: see the Corporate Responsibility section on pages 13 to 22; • The desirability of maintaining a reputation for high standards of business conduct: see the Corporate Governance section on pages 24 to 25. GOING CONCERN LAP In reviewing going concern it is necessary to consider separately the position of LAP Group and Bisichi. Although both are consolidated into group accounts (as required by IFRS 10), they are managed independently and in the unlikely event that Bisichi was unable to continue trading this would not affect the ability of LAP Group to continue operating as a going concern. The same would be true for Bisichi in reverse. The directors have reviewed the cash flow forecasts of the LAP Group and the underlying assumptions on which they are based, for the 15 months from the date of signing. The LAP Group’s business activities, together with the factors likely to affect its future development, are set out in the Chairman and Chief Executive’s Statement and Financial Review. In addition, Note 22 to the financial statements sets out the Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposure to credit risk and liquidity risk. Directors assess the longer term prospects of the business over a four year time horizon as covered by the Group’s annual rolling four-year strategic financial plan. This is considered to be the optimum balance between our need to plan for the long term, recognising that property investment is a long-term business, and the progressively unreliable nature of forecasting in later years. Geo-political events in Ukraine and the Middle East are no longer significantly impacting global energy prices. The imposition of tariffs by the United States is not expected to have any significant direct effect on our operations. Although the outcome of these events is uncertain, the Directors at present do not foresee the events having a significant negative impact on the Group’s UK and South African operations’ ability to remain in operation for the foreseeable future. Bisichi Detailed budget and cash flow forecasts for Bisichi’s operations demonstrate that Bisichi has sufficient resources to meet its liabilities as they fall due for at least the next 12 months and that Bisichi will be able to manage its business risks and have adequate cash resources to continue in operational existence for the foreseeable future. Further details can be found in the Bisichi plc 2024 Financial Statements which are available on their web site: www.bisichi.co.uk. Overall position With a quality property portfolio comprising tenants with a mix of short and long leases supported by suitable financial arrangements, the Directors believe that the group property operations (including Bisichi and Dragon) are well placed to address the current business risks successfully. The mining operations too, as a key industry in South Africa, have a positive future. It is also relevant that LAP would be able to continue as a viable business if Bisichi were to face unexpected problems as there are no cross guarantees and LAP is not dependent on the income from Bisichi. Having made enquiries and having considered the principal risks facing the Group, including liquidity and solvency risks, and material uncertainties, the Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements. TAxATION The LAP Group tax strategy is to account for tax on an accurate and timely basis. We only structure our affairs based on sound commercial principles and wish to maintain a low tax risk position. We do not engage in aggressive tax planning. The LAP Group (excluding Bisichi and Dragon) has unused tax losses and deductions with a potential value of £11.0 million (2023: £12.3 million). As LAP returns to profit, these tax losses and deductions should be utilised. DIVIDENDS AND FUTURE PROSPECTS Due to the current economic uncertainties, the LAP Board has agreed that it will not be recommending a dividend for the financial year ending 31 December 2024 (2023: £nil). Looking forwards to medium term trading, we intend to pursue our previously stated strategies. These include investing in both our essential community retail properties which have inbuilt defensive qualities and industrial property where we have enjoyed success. We will recycle properties where we feel asset management opportunities are limited and are prepared to enter into negotiations with parties that have approached us to explore disposals or joint ventures to redevelop certain assets within our portfolio. A number of these negotiations are ongoing although we are not yet able to say if any will come to fruition. Our development in Ealing has received planning consent and we are in negotiations with stakeholders to enable construction to commence. Due to rising construction costs and market volatility, we are not able to provide guidance on the level of cash return this project will ultimately generate. We will continue to consider further joint venture opportunities to undertake residential development. Bisichi Bisichi remains optimistic about the continued benefits from Black Wattle’s enhanced production and the positive developments in rail logistics. However, Bisichi is mindful of the current coal market volatility with lower seaborne coal prices, reflecting a temporary buildup in global coal supply and a slowdown in demand, impacting coal revenue in 2025 to date. With such uncertainty Bisichi is approaching this year with caution and is proactively managing this by maintaining a diversified customer base and remain confident in the long-term value of its South African operations. Bisichi continues to seek and evaluate opportunities to transition into alternative mining, commodity and renewable energy related opportunities through new commercial arrangements. London & Associated Properties PLC 2024 9 STRATEGIC REPORTSTRATEGIC REPORT Principal activities, strategy & business model The LAP Group’s principal business model is the investment in, and management and development of, industrial and retail property through direct investment and joint ventures. The principal activity of Bisichi PLC is coal mining and coal processing in South Africa. Further information is available in its 2024 Financial Statements which are available at www.bisichi.co.uk TEXT TEXT Maximising income By achieving an appropriate tenant mix and providing vibrant environments with excellent facilities we can increase tenant demand for space and enhance income. Creating quality property We look to improve the tenant experience at all our properties by achieving an appropriate tenant mix and a vibrant trading environment through investment activity, enhancement, refurbishment and development. Capital strength We operate within a prudent and flexible financial structure. Our gearing policy provides financial stability whilst giving capacity and flexibility to look for further investments. Maintain the value of investment in Bisichi By encouraging the Bisichi management to maximise sustainable profits and cash distributions. Risks and uncertainties DESCRIPTION OF RISK DESCRIPTION OF IMPACT MITIGATION ASSET MANAGEMENT: Tenant failure Financial loss. Initial and subsequent assessment of tenant covenant strength combined with an active credit control function. Leases not renewed Financial loss. Lease expiries regularly reviewed. Experienced teams with strong tenant and market knowledge who manage appropriate tenant mix. Asset liquidity (size and geographical location) Assets may be illiquid and affect flexing of balance sheet. Regular reporting of current and projected position to the Board with efficient treasury management. PEOPLE: Retention and recruitment of staff Unable to retain and attract the best people for the key roles. Nomination Committee and senior staff review skills gaps and succession planning. Training and development offered. REPUTATION: Business interruption Loss in revenue. Impact on footfall. Adverse publicity. Potential for criminal/civil proceedings. Documented Recovery Plan in place. General, cyber and terrorism insurance policies in place a nd risks monitored by trained security staff. Health and Safety policies in place. CCTV in centres. FINANCING: Fluctuation in property values Impact on covenants and other loan agreement obligations. Secure income flows. Regular monitoring of LTV and IC covenants and other obligations. Focus on quality assets. Reduced availability of borrowing facilities Insufficient funds to meet existing debts/interest payments and operational payments. Efficient treasury management. Loan facilities extended where possible. Regular reporting of current and projected position to the Board. Loss of cash and deposits Financial loss. Only use a spread of banks and financial institutions which have a strong credit rating. Fluctuation of interest rates Uncertainty of interest rate costs. Manage derivative contracts to achieve a balance between hedging interest rate exposure and minimising potential cash calls. 10 London & Associated Properties PLC 2024 STRATEGIC REPORTSTRATEGIC REPORT Bisichi risks and uncertainties Bisichi (although it is consolidated into group accounts as required by IFRS 10) is managed independently of LAP. The risks outlined below are an abbreviated summary of the risks reported by the Directors of Bisichi to the shareholders of that Company. Full details are available in the published accounts of Bisichi (www.bisichi.co.uk). These risks, although critical to Bisichi, are of less significance to LAP which only has a minority investment of 41.6% in the company. In the unlikely event that Bisichi was unable to continue trading, it would not affect the ability of LAP to continue operating as a going concern. DESCRIPTION OF RISK DESCRIPTION OF IMPACT MITIGATION Coal prices can be impacted materially by market and currency variations and geopolitical factors Affects sales value and therefore margins. Bisichi primarily focuses on managing its underlying production and processing costs to mitigate coal price volatility as well as from time to time entering into forward sales contracts with the goal of preserving future revenue streams. Bisichi has not entered into any such contracts in 2023 and 2024. Bisichi assesses on an ongoing basis the impact of volatility in global energy markets, economic volatility and climate change related risks may have on the Group’s mining operations and future investment decisions Mining operations are inherently risky. Mineral reserves, regulations, licensing, power availability, health and safety can all damage operations Loss of production causing loss of revenue. Use of independent geology experts, careful attention to regulations, health and safety training, employee dialogue to minimise controllable risks. Currency risk Affects realised sales value and therefore margins. Regular monitoring and review of forward currency situation. Cashflow variation because of mining risks, commodity price or currency variations Variations can deliver significant shifts in cash flow. UK property investments used to offset high risk mining operations. Socio-economic, political instability & regulatory environment risk The Bisichi Group is exposed to a wide range of political, economic, regulatory, social and tax environments, particularly in South Africa. Bisichi’s assets and investments are diversified across various countries which reduces its exposure to any particular country. Its Board regularly assesses the political and socio-economic environment and related risks of the countries it operates and invests in. There has been no change in the risks faced by either LAP or Bisichi. London & Associated Properties PLC 2024 11 STRATEGIC REPORT Key performance indicators The Group’s Key Performance Indicators are selected to ensure clear alignment between its strategy and shareholder interests. The KPIs are calculated using data from management reporting systems. STRATEGIC PRIORITY KPI PERFORMANCE MAxIMISING INCOME – LIKE FOR LIKE PROPERTY INCOME To increase the like-for- like income from each property year on year. Like-for-like gross rental income as a percentage of the prior year rental. The like-for-like rental income of the group by property has increased by £101,000 (3.0%) (2023: increase of £49,000 and 0.4%). This is considered a positive outcome. MAxIMISING INCOME – OCCUPANCY We aim to maximise the total income in our properties by achieving full occupancy. The estimated rental value ("ERV") of the empty units as a percentage of our total income. Void levels increased to 3.6% (2023: 2.7%). There continue to be minimal voids across the portfolio which is positive. CAPITAL STRENGTH – GROWTH IN NET ASSET VALUE PER SHARE The net assets per share is the principal measure used by the group for monitoring its performance and is an indicator of the level of reserves available for distribution by way of dividend. Movement in the net assets per share. The net assets per share decreased by 0.37 pence per share (1.5%) to 32.91p (2023: 33.38p). This is considered a positive result in a difficult market. CHANGE IN LIKE-FOR-LIKE INCOME VOIDS NET ASSETS PER SHARE 3.0 4.0 5.0 75.0 2.0 50.0 1.0 25.0 0.0 0.0 2022 2022 2023 2023 100 50 0.0 -50 -100 2022 2023 2024 2024 2024 12 London & Associated Properties PLC 2024 STRATEGIC REPORT Corporate responsibility SUSTAINABLE DEVELOPMENT Bisichi’s Black Wattle continues to strive to conduct business in a safe, environmentally and socially responsible manner. Some highlights of their Health, Safety and Environment performance during 2024: • Black Wattle Colliery recorded 1 Lost time Injuries during 2024 (2023: 2). • Two cases of Occupational Diseases were recorded. • Two claims for the Compensation for Occupational Diseases were submitted. In South Africa, the Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry (New Mining Charter) is a regulatory instrument that facilitates sustainable transformation, growth and development of the mining industry. Bisichi is committed to fully complying with the New Mining Charter and providing adequate resources to this area in order to ensure opportunities are expanded for historically disadvantaged South Africans (HDSAs) to enter the mining and minerals industry. In addition, Bisichi continues to adhere to and make progress in terms of their Social and Labour Plan and various BEE initiatives. A fuller explanation of these can be found in Bisichi’s 2024 Financial Statements which are available on their web site: www.bisichi.co.uk CLIMATE CHANGE REPORTING The Group recognises that climate change represents one of the most significant challenges facing the world today and supports the goals of the Paris Agreement and the UN Framework Convention on Climate Change. Our aim is to: • minimize our contribution to greenhouse gas emissions; • to consider and plan for the physical and transitional risks of climate change on our operations; and • to work with stakeholders, including local government and communities, to mitigate the impact of climate-related challenges. In the current year, the Group has aligned climate disclosures in this Strategic Report to the four Task force on Climate-related Financial Disclosure (“TCFD”) recommendations as follows: TCFD AREA TCFD CONSIDERATION LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC Governance Board’s oversight of climate risk and opportunities The LAP & Bisichi Boards have ultimate responsibility for the monitoring and development of the Groups’ approach to climate risk and opportunities. In light of the size of the Group, ESG matters are considered as part of the Group’s regular board meetings and at other appropriate points during the year. The Board has developed and implemented a Climate Change Policy and monitor the content, effectiveness and implementation of this Policy on a regular basis. The Group’s Climate Change Policy can be found on the Group’s website at www.lap.co.uk. Short, medium and long term strategic decisions, including those on capital allocation and portfolio management, are considered by Group management who make recommendations to the Board. Climate related issues and policy are included as significant factors for consideration in the decision making process, both in the management recommendation and in the Board’s consideration of the relevant issue. On-going climate related issues are integrated into the Group’s business risk management process and reporting thereof to the Board and Audit Committee. The Group has regard to best practice in its area of operations, its health and safety and environmental obligations and seeks to ensure high standards of business conduct in its operations. It will review compliance with the TCFD Recommendations on an ongoing basis, and report on its performance on a yearly basis. Management’s role in assessing and managing climate-related risks and opportunities Responsibility for the application of this Policy rests with, but is not limited to, all employees and contractors engaged in relevant activities under the Group’s operational control. The Group’s managers are responsible for promoting and ensuring compliance with this Policy and any related individual site-level policies and practices. At Bisichi’s South African operations, management have commenced engagement with key stakeholders in order to ensure awareness of our climate change policy as well as the potential impact of climate change on our environment and operations. We continue our collaboration with our contractors on GHG Emission Reporting and we are actively looking for opportunities to partner with our stakeholders to drive the uptake of carbon neutral solutions. For material strategic or financial decisions, the Group may consider procuring expert advice from third party consultants on the impact in the short, medium and long term of the decision, and ensure that such information is fully considered as part of the evaluation of the relevant matter. London & Associated Properties PLC 2024 13 STRATEGIC REPORT CORPORATE RESPONSIBILITY TCFD AREA TCFD CONSIDERATION LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC Strategy Climate-related risks and opportunities the Group has identified over the short, medium, and long run Bisichi considers the current life of mine of its South African operations to fall within a short to medium term horizon. Within this horizon, climate change transition risks may impact their South African coal mining and processing operations. Risks include: • coal price and demand volatility; • availability and cost of financing and third party services such as insurance; • delays or restrictions to regulatory approvals; • early retirement of our coal processing and mining operations; and • Carbon pricing and taxes, that may create additional costs through the value chain. The Group have assessed physical climate risk profiles produced by the World Bank, particularly in relation to the South African operations. Bisichi considers the physical risks of variations in climate over the current life of mine of the South African operations to be mainly limited to an increased risk of seasonal flooding that may impact the operating efficiency, costs and revenues of the mining and processing operations. In a longer term horizon, and in a scenario where the useful life of Bisichi’s South African operations is extended, the above short to medium term transitional risks are expected to continue to apply. In addition, in a scenario, such as the International Energy Association’s (“IEA”) Pathway to Net Zero by 2050 (“NZE 2050”), where climate policies are effectively implemented that support a transformation to net zero emissions by 2050 and limiting the rise of global temperatures to 1.5°C by the end of the century, policies will lead to significant coal demand decline over the longer term. This in turn will impact the carrying value and long term viability of Bisichi’s South African coal operations as well as the stakeholders and communities reliant on our operations. Extreme weather events, over the long term in South Africa, such as floods, and droughts, as well as changes in rainfall patterns, temperature, and storm frequency will also affect the operating efficiency, costs and revenues of the mining and processing operations, supply chains and impact the communities living close to the operations. Clean coal research and technology initiatives such as carbon capture may result in opportunities to increase the useful life of Bisichi’s South African coal mining and processing operations. In addition, the clean energy transition provides opportunities for Bisichi to diversify its business activities and equity investment portfolio into renewable and extractive industries that will benefit from and are critical to the transition to a clean energy system. The main sources of scope 1 & 2 Green House Gas (GHG) emissions for the Group have been associated with the South African coal mining and processing operations, namely due to fuel combustion and electricity usage. Improvements in the cost competitiveness of lower emission sources of energy provide opportunities to lower overall operating costs at our operations as well as reduce overall GHG Emissions. In the UK we have identified the following material physical and transitional risks related to our UK property portfolio: • Long term physical risk through changes in climate, flood risk and extreme weather; and • Short-term transition risk from emerging regulation related to energy performance (“EPC”) and enhanced disclosures 14 London & Associated Properties PLC 2024 STRATEGIC REPORT CORPORATE RESPONSIBILITY TCFD AREA TCFD CONSIDERATION LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC Strategy Impact of climate-related risks and opportunities on businesses, strategy, and financial planning Bisichi’s management have incorporated and regularly review the following strategies and procedures in relation to their South African coal operations: • Review of the impact of climate change and the global transition to clean energy, particularly in relation to the current life of mine of Bisichi’s coal operations; • Regular research and analysis of the coal market demand outlook; • Regular research and analysis on the outlook of the South African coal mining industry and climate change regulation including mining regulation, energy procurement and licensing, and carbon taxing; • Regular communication with financial service providers and suppliers on any future changes to availability and cost of services. • Regular research and analysis on the progress of clean coal technology and related regulatory initiatives; and • Regular dialogue and seeking collaboration with governments and local communities and other stakeholders on climate change-related challenges. Bisichi have identified the need to mitigate GHG emission heavy sources of electricity usage at our coal washing plant. Management are currently in the process of evaluating opportunities to reduce these emissions taking into particular consideration the financial viability and long term sustainability of the projects. The below areas have been identified where GHG emissions can be further reduced through: • Minimising land clearance for new project facilities; • Adoption of mitigation strategies for preserving integrity of environment; • Minimising tree felling; • The use of modern, energy and fuel efficient equipment; • The inclusion of the impact of GHG emissions as an evaluation criteria in the selection of mining contractors, suppliers and equipment. Particular consideration will be given to the choice of vehicles used for the mine fleet, employee transportation and the haulage fleet. Where possible energy and fuel efficiency will be a factor in the selection of vehicles as this will not only reduce GHG emissions but also reduce operating costs. In addition to the efficiency of the fleet itself, opportunities will be sought for improving the use of the vehicles. • Scheduling of excavation and haulage activities to optimise activities and avoid double handling, where this is operationally practical; and • The upgrading of energy-intensive machinery over time will be used to improve efficiency and reduce CO 2 emissions compared to machinery that has been removed. Further energy efficiency opportunities will also be investigated. Potential water scarcity has increased management focus on opportunities to increase the usage efficiency of our existing water supply and water recycling systems. The introduction of a closed loop filter press system for coal fines in 2019 and additional other work concluded or planned on our water recycling systems at our coal processing facility will result in a lowering of our overall cost of water and the environmental footprint of our operations. Increased risks of flooding have been incorporated at planning stage in new opencast mining areas that have been opened. Transition and physical risks related to climate change are regularly discussed at Bisichi’s Board level, particularly those related to the long term viability of Bisichi’s South African coal operations and the future allocation of capital. Bisichi regularly considers the need for coal as an energy source both globally and in South Africa over the life of mine of our operations and in its long term planning. Bisichi is committed to responsible stewardship of their legacy South African coal assets taking into account the impact climate change related risks may have on all our local stakeholders. Bisichi recognise the need to collaborate with government, employees and communities, to ensure a just transition for our stakeholders through the transition to a low carbon economy. Bisichi regularly evaluates and continues to seek opportunities to diversify its business activities and equity investment portfolio, particularly into renewable and extractive industries that predominantly mine commodities identified by the IEA as critical in the transition to a clean energy system. Any significant developments will be reported to shareholders in due course. The Board continue to monitor and regularly review adherence by the Group to changes to UK EPC. The Group have incorporated the ongoing impact of EPC regulatory standards into its decision making process. London & Associated Properties PLC 2024 15 STRATEGIC REPORT CORPORATE RESPONSIBILITY TCFD AREA TCFD CONSIDERATION LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC Strategy Resilience of strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. Bisichi’s management have incorporated climate scenarios into their strategic operational planning and review process. Bisichi have assessed the resilience of our coal operations compared to the IEA’s NZE2050 Scenario, which sets out what additional measures would be required over the next ten years to put the world as a whole on track for net zero emissions by mid-century. The Scenario indicates a significant coal demand decline over the longer term impacting the potential commercial longevity of Bisichi’s South African operations. In addition Bisichi have assessed physical climate risk profiles for their South African operations obtained via the World Bank Group’s Climate Change Knowledge Portal. The outcomes of scenario testing and physical climate profiling have been incorporated into the long term strategic planning and decision making processes of Bisichi. Over the short to medium term, considering the potential impact of transitional climate risks on Bisichi Group’s South African operations, the Group’s climate strategy and policy is regularly scrutinised by Bisichi’s senior management and Board in regard to any changes in coal demand outlook and climate regulatory policy that may impact our operations over the current life of mine. A recent example being the Just Energy Transition Investment Plan (“JET IP”) announced by the South African Government for 2023-2027. The Board encourages senior and local management to assess principal and emerging climate-related risks on a regular basis. Risks identified are to be reported to and discussed at Board level and incorporated into the strategy and planning of the Group. Risk management Processes for identifying and assessing climate related risks. The Group’s risk management processes are developed, implemented and reviewed by the Board, who retain ultimate responsibility for them. In addition to the Group’s management of its principal risks and uncertainties, climate change impacts are mainly considered from two environmental perspectives, the impact of our South African coal mining and processing operations on the climate and the effect of global climate change on our operations and stakeholders. Heavy sources of GHG emissions have been identified from our annual Greenhouse Gas emissions recording and reporting. The Bisichi Board and Senior management remain in regular communication with local regulatory bodies, climate research providers, coal market analysts, suppliers, and services providers to ensure climate related risks and changes in regulatory policy are identified and assessed on a regular basis. Bisichi’s senior and local management in South Africa are encouraged by the Board to identify local climate related risks and changes in regulatory policy that may impact our South African coal operations. Bisichi’s management continually engage with governments and local communities and other stakeholders on climate change-related challenges impacting the local area and the South African coal industry at large. Processes for managing climate-related risks. The Board and Senior management co-ordinate the Group’s analysis and planning of the effects of climate change on our business. The Board discuss regularly the impact of any risks identified through the organisation, particularly in relation to material matters that may impact the viability of the Group’s coal operations. The Bisichi Board regularly review and analyse coal market and outlook research, particularly in relation to targets set out in local climate policy such as JET IP and global climate scenarios such as NZE 2050. The mitigation of GHG emissions and identification of climate related risks has been integrated into our corporate policy, project and procurement evaluation criteria at Bisichi’s South African operations to ensure it is consistently applied and managed. The Group continuously monitors and reports key performance indications relating to environmental matters, including the location of CO 2 emissions, their levels and intensity. On an ongoing basis, the Group assesses the impact of carbon pricing, climate regulation and taxation on going concern assumptions, the Group’s current and future strategy and operations. 16 London & Associated Properties PLC 2024 STRATEGIC REPORT CORPORATE RESPONSIBILITY TCFD AREA TCFD CONSIDERATION LONDON & ASSOCIATED PROPERTIES PLC & BISICHI PLC Risk management Processes for identifying, assessing, and managing climate-related risks are integrated into the overall risk management. New or evolving climate change risks identified by both senior and local management are to be reported to and discussed at Board level and incorporated into the strategy, planning and climate policy of the Group. Where possible, plans to mitigate the effect of climate change on Bisichi’s operations and local communities will be integrated into the mines regulatory environmental management and social and labour plans. Metrics and targets Metrics used by the Group to assess climate related risks and opportunities in line with its strategy and risk management process A financial segmentation of the Group’s South African coal mining and processing assets that are impacted by the climate related risks and opportunities outlined above can be found in Bisichi’s 2024 Financial Statements which are available on their website: www.bisichi.co.uk. Bisichi recognises that its ability to reduce overall carbon emissions is constrained at present by the main segment of it business activities, being coal mining and processing in South Africa. Bisichi has, however, sought to appropriately target its emission reduction strategy to the elements of its operations where a meaningful reduction in greenhouse gas emissions can be effected, and this will be reflected in the targets set by the Group in due course. The Group measures and report our CO 2 emissions across the Group including a breakdown of UK and South African operations. See below for disclosure of emissions during the year. Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. The Group is committed to measuring and reporting our scope 1 and 2 greenhouse gas emissions, see below for disclosure of emissions during the year. Scope 3 emissions are not currently measured given the size and life of mine of the Group’s South African coal operations and the uncertainty and impracticality in accurately measuring such emissions throughout the value chain. The Group will continue to assess the above approach as part of its continued review of compliance with the TCFD Recommendations and taking into account any material changes in future business activities. Targets used by the Group to manage climate-related risks and opportunities and performance against targets. Over 99% of the Group’s GHG Emissions relate to Bisichi’s South African coal operations which has a current life of mine of 7 years. In the short term, the Group’s continues to evaluate areas where GHG emissions can be further reduced, particularly scope 2 emissions related to the heavy sources of electricity usage at Bisichi’s coal washing plant. Once the Group has identified the scope of further potential reductions, their time, capital cost and practicability of implementation, short term targets for the Group will be reassessed. Over the long term, as part of the Group’s business strategy, the Board continues to evaluate opportunities to diversify its business activities. In turn, targets related to GHG emissions will be re-evaluated in line with any future changes in the Group’s planned operating activities. London & Associated Properties PLC 2024 17 STRATEGIC REPORT CORPORATE RESPONSIBILITY GREENHOUSE GAS REPORTING As a quoted organisation incorporated in the UK, we have reported on all emission sources required under the Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. for the period 1st January 2024 to 31st December 2024. The emissions are detailed in Tables 1 to 4 below. We have employed the Financial Control definition to outline our carbon footprint boundary, reporting Scope 1 & 2 emissions only for both landlord & tenant-controlled areas of LAP owned shopping centres and facilities. During the year LAP had landlord-controlled areas in Brewery Street, Shipley and Bridgend, Bedworth, and Little Portland Street. Properties that LAP manage on behalf of others or are not wholly owned by LAP are excluded from our footprint boundary. An estimate of the emissions associated with the LAP offices on Little Portland Street has been included in this year’s calculations, as in the previous year. Emissions for landlord-controlled areas have been calculated based on actual consumption data collected from each site. Emissions from tenant-controlled areas have been calculated based on floor area and energy consumption benchmarks for general retail services in the UK. We have used the main requirements of the ISO14064-1 standard and HM Government Environmental Reporting Guidelines (2019) including streamlined energy and carbon reporting guidance. Emission factors were from the UK Government’s GHG Conversion Factors for Company Reporting 2024. As well as reporting Scope 1 and Scope 2 emissions, the regulations require that at least one intensity ratio is reported for the given reporting period. The intensity figure below shows emissions in tCO 2 e per thousand pounds revenue. Table 1. Landlord & tenant controlled areas EMISSIONS SOURCE TCO2E 2024 2023 CHANGE Scope 1 emissions Natural gas 61 29 109% Refrigerants 0 0 N/A Scope 2 emissions Electricity 1,162 1,152 1% Total tCO 2 e 1,223 1,182 4% Intensity ratio (tCO 2 e/£k) 0.40 0.25 59% Table 2. LAP controlled areas EMISSIONS SOURCE TCO2E 2024 2023 CHANGE Scope 1 emissions Natural gas 61 29 109% Refrigerants 0 0 N/A Scope 2 emissions Electricity 114 97 17% Total tCO 2 e 175 126 39% Table 3. Tenant controlled areas EMISSIONS SOURCE TCO2E 2024 2023 CHANGE Scope 1 emissions Natural gas 0 0 N/A Refrigerants 0 0 N/A Scope 2 emissions Electricity 1,048 1,055 -1% Total tCO 2 e 1,048 1,055 -1% Table 4. Coal mining carbon footprint 2024 CO 2 e TONNES 2023 CO 2 e TONNES Emissions source: Emissions from the combustion of fuel or the operation of any facility including fugitive emissions from refrigerants use 60,702 39,709 Emissions resulting from the purchase of electricity, heat, steam or cooling by the company for its own use (location based) 8,438 7,601 Total gross emissions/tCO 2 e 69,140 47,310 Intensity: Intensity 1 Tonnes of CO 2 per pound sterling of revenue 0.0013 0.0010 Intensity 2 Tonnes of CO 2 per pound of coal produced 0.0462 0.0587 kWh kWh Energy consumption used to calculate above emissions 96,215,539 90,218,230 Of which UK 5,055 5,857 18 London & Associated Properties PLC 2024 STRATEGIC REPORT CORPORATE RESPONSIBILITY ENVIRONMENT United Kingdom The Group’s principal UK activity is property investment, which involves renting premises to commercial businesses. We seek to provide those tenants with good quality premises from which they can operate in an efficient and environmentally friendly manner. Where possible, improvements, repairs and replacements are made in an environmentally efficient manner and waste re-cycling arrangements are in place at all the Group’s locations. South Africa Under the terms of the mine’s Environmental Management Programme approved by the Department of Mineral Resource and Energy (“DMRE”), Black Wattle undertakes a host of environmental protection activities to ensure that the approved Environmental Management Plan is fully implemented. In addition to these routine activities, Black Wattle regularly carries out environmental monitoring activities on and around the mine, including evaluation of ground water quality, air quality, noise and lighting levels, ground vibrations, air blast monitoring, and assessment of visual impacts. In addition to this Black Wattle also performs quarterly monitoring of all boreholes around the mine to ensure that no contaminated water filters through to the surrounding communities. Black Wattle is fully compliant with the regulatory requirements of the Department of Water Affairs and Forestry and has an approved water use licence. Black Wattle Colliery has substantially improved its water management by erecting and upgrading all its pollution control dams in consultation with the Department of Water Affairs and Forestry. A performance assessment audit was conducted to verify compliance to our Environmental Management Programme and no significant deviations were found. EMPLOYEE, SOCIAL, COMMUNITY AND HUMAN RIGHTS The Group’s policy is to attract staff and motivate employees by offering competitive terms of employment. The Group provides equal opportunities to all employees and prospective employees including those who are disabled and operates in compliance with all relevant national legislation. The Group believes that it is in the interest of shareholders to consider social and human rights issues when conducting business. Various policies and initiatives implemented by the Group that fall within these areas are discussed within this report. ANTI-SLAVERY AND HUMAN TRAFFICKING The Group is committed to the prevention of the use of forced labour and has a zero tolerance policy for human trafficking and slavery. The Group’s policies and initiatives in this area can be found within the Group’s Anti-slavery and human trafficking statement found on the Group’s website at www.lap.co.uk. EMPLOYMENT AND DIVERSITY The Board of London & Associated Properties PLC at 31 December 2024 comprised: NUMBER OF BOARD MEMBERS PERCENTAGE OF THE BOARD NUMBER OF SENIOR POSITIONS ON THE BOARD NUMBER IN EXECUTIVE MANAGEMENT PERCENTAGE OF EXECUTIVE MANAGEMENT Men 5 100% 2 3 100% Women 0 0% 0 0 0% Not specified/prefer not to say 0 0% 0 0 0% NUMBER OF BOARD MEMBERS PERCENTAGE OF THE BOARD NUMBER OF SENIOR POSITIONS ON THE BOARD NUMBER IN EXECUTIVE MANAGEMENT PERCENTAGE OF EXECUTIVE MANAGEMENT White British or other White (including minority white groups) 5 100% 2 3 100% 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 group, including Arab 0 0% 0 0 0% The above data has been collected through self-reporting by the Board members. Questions asked include gender identity or sex and ethnic background. The Company notes the diversity targets included in the Listing Rules, being: • at least 40% of the individuals on the Board are women; • at least one of the specified senior positions is held by a woman; and • at least one individual on the Board is from a minority ethnic background. At 31 December 2024 the Company did not meet the target that at least 40% of the individuals on its board of directors are women and at least one of the senior positions on the Board is held by a women. Should the Board look to appoint further directors in the future, the Company will give due consideration to how it may achieve the diversity targets while ensuring the appropriate structure of the Board and mix of skills and expertise relevant to the Company’s operations. As part of its recruitment processes, the Company gives careful consideration to all potential applicants. The Company will keep this under ongoing review. The Group is committed to improving upon its gender and diversity targets at all employment levels within the Group through a required build-up of sufficient talent pools, training up of employees and targeted recruitment policies. The Company will keep the requirement for a formal diversity policy under review and will give serious consideration to the adoption of a policy, tailored to the nature of the Company’s business, its operations and resources at the appropriate point. London & Associated Properties PLC 2024 19 STRATEGIC REPORT CORPORATE RESPONSIBILITY BISICHI PLC In terms of directors, employees and gender representation, at the year end the Group had 9 directors (8 male and 2 from a minority ethnic or HDSA Background, 1 female from a minority ethnic or HDSA Background), 6 senior managers (4 male and 2 female all from a minority ethnic or HDSA Background) and 201 other employees (137 male and 112 from a minority ethnic or HDSA Background, 64 female and 61 from a minority ethnic or HDSA Background). The Group’s South African operations are committed to achieving the goals of the South African Employment Equity Act and is pleased to report the following: • Black Wattle Colliery has exceeded the 10 percent women in management and core mining target. • Black Wattle Colliery has achieved over 15 percent women in core mining. • 95 percent of the women at Black Wattle Colliery are HDSA females. Black Wattle Colliery has successfully submitted their annual Employment Equity Report to the Department of Labour. In terms of staff training some highlights for 2024 were: • One employee was trained in ABET (Adult Basic Educational Training) on various levels • An additional seven disabled HDSA women continued their training on ABET levels one to four • Four HDSA persons were enrolled for apprenticeships in 2024 • One HDSA person continued their internships in 2024 • Four additional HDSA persons started new internships in 2024 • One HDSA Female completed her bursary studies in 2024, while two HDSA females continued their bursary studies in 2024 Highlights for 2024 for Sisonke Coal Processing: • One employee was trained in ABET (Adult Basic Educational Training) on various levels Employment terms and conditions for the employees based at Bisichi’s UK office and at their South African mining operations are regulated by and are operated in compliance with all relevant prevailing national and local legislation. Employment terms and conditions provided to mining staff meet or exceed the national average. Bisichi’s mining operations and coal washing plant facility are labour intensive and unionised. During the year no labour disputes, strikes or wage negotiations disrupted production or had a significant impact on earnings. Bisichi’s relations to date with labour representatives and labour related unions continue to remain strong. Detailed information relating to the Bisichi Strategic Report is available in its 2024 financial statements. Approved on behalf of the board of directors. Jonathan Mintz Finance Director 29 April 2025 20 London & Associated Properties PLC 2024 GOVERNANCE Directors & advisors ExECUTIVE DIRECTORS John A Heller LLB MBA (Chairman and Chief Executive) Jonathan Mintz FCA (Finance Director) NON-ExECUTIVE DIRECTORS Clive A Parritt FCA CF FIIA #† Clive Parritt joined the board on 1 January 2006. He is a chartered accountant with over 40 years’ experience of providing strategic, financial and commercial advice to businesses of all sizes. Previously he was Group Finance Director of Audiotonix Limited (an international manufacturer of audio mixing consoles), he has chaired and been a director of a number of other public and private companies. Clive Parritt was President of the Institute of Chartered Accountants in England and Wales in 2011-12. He is Chairman of the Audit Committee and as Senior Independent Director he chairs the Nomination and Remuneration Committees. Robin Priest MA † Robin Priest joined the board on 31 July 2013. He is a senior advisor to Alvarez & Marsal LLP (“A&M”) and, independently, to lenders and insolvency practitioners to assist in restructuring situations. He has more than 40 years’ experience in real estate and structured finance. He was formerly Managing Director of A&M’s real estate practice, advising private sector and public sector clients on both operational and financial real estate matters. Prior to joining A&M, Robin was lead partner for Real Estate Corporate Finance in London with Deloitte LLP and before this he founded and ran a property company backed by private equity. The first part of his career was spent in commercial and investment banking. Andrew R Heller MA, ACA Andrew Heller joined the board on 29 March 2023. He is a qualified Chartered Accountant, serves as Chairman & Managing Director of Bisichi PLC and has nearly 30 years’ experience in the mining industry. † Member of the audit, remuneration and nomination committees # Senior independent director SECRETARY & REGISTERED OFFICE Jonathan Mintz FCA 2nd Floor, 12 Little Portland Street, London W1W 8BJ AUDITOR Kreston Reeves LLP PRINCIPAL BANKERS Santander UK plc Metro Bank plc QIB (UK) plc ABSA Bank (South Africa) First National Bank (South Africa) SOLICITORS Pinsent Masons LLP Wake Smith Solicitors Limited STOCKBROKER Shore Capital Markets Limited REGISTRARS & TRANSFER OFFICE MUFG Corporate Markets Central Square 29 Wellington Street Leeds LS1 4DL UK telephone: 0371 664 0300 International telephone: +44 371 664 0300 (Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate). Lines are open between 9.00am to 5.30pm, Monday to Friday, excluding public holidays in England and Wales. Website: https://www.mpms.mufg.com/ Email: shareholderenquiries@cm.mpms.mufg.com Company registration number 341829 (England and Wales) WEBSITE www.lap.co.uk E-MAIL admin@lap.co.uk London & Associated Properties PLC 2024 21 GOVERNANCE Directors’ report The Directors submit their report and the audited financial statements for the year ended 31 December 2024. STRATEGIC REPORT A comprehensive review and assessment of the Group’s activities during the year as well as its position at the year end and prospects for the forthcoming year are included in the Chairman and Chief Executive’s Review and the Strategic Report. These reports can be found on pages 2 to 19 and should be read in conjunction with this report. PRINCIPAL ACTIVITIES The principal activities of the Group during the year were property investment and development, as well as investment in joint ventures and an associated company. The associated company is Bisichi PLC (Bisichi) in which the Company holds a 41.6% interest. Bisichi is listed on the main market of the London Stock Exchange and operates in England and South Africa with subsidiaries which are involved in overseas mining and mining investment. The results, together with the assets and liabilities, of Bisichi are consolidated with those of LAP in accordance with the terms of IFRS 10 even though the Group only has a minority interest – under IFRS 10 the 58.4% majority interest is disclosed as a “non-controlling interest”. BUSINESS REVIEW AND POST BALANCE SHEET EVENTS A review of the Group’s development and performance can be found below and should be read in conjunction with the Strategic Report on pages 4 to 19. Details of any post balance sheet events are disclosed in Note 30 to the financial statements. FUTURE DEVELOPMENTS The Group continues to look for new opportunities to acquire real estate assets where it feels it can increase value by applying its intensive management skills. At the same time, it seeks to reduce its interest payments on its loans as they expire or where opportunities arise to refinance on better terms. We also seek to improve our existing estate through the continued pursuit of asset management initiatives. PROPERTY ACTIVITIES The Group is a long-term investor in property. It acquires properties, actively manages those assets to improve rental income, and thus seeks to enhance the value of its properties over time. In reviewing performance, the principal areas regularly monitored by the Group include: • Rental income – the aim of the Group is to maximise the maintainable income from each property by careful tenant management supported by sympathetic and revenue enhancing development. Income may be affected adversely by the inability of tenants to pay their rent, but careful monitoring of rent collection and tenant quality helps to mitigate this risk. Risk is also minimised by a diversified tenant base, which should limit the impact of the failure of any individual tenant. • Developments – the Group develops customer-focused spaces to generate returns and portfolio income growth above that available from standing investments alone. • Cash flow – allowing for voids, acquisitions, development expenditure, disposals and the impact of operating costs and interest charges, the Group aims to maintain a positive cash flow over time. • Financing costs – the exposure of the Group to interest rate movements is managed partly by the use of swap and cap arrangements, where appropriate (see Note 22 for full details of the contracts in place) and also by using loans with fixed terms and interest rates. These arrangements are designed to ensure that our interest costs are known in advance and are always covered by anticipated rental income. • Property valuations – market sentiment and economic conditions have a direct effect on property valuations, which can vary significantly (upwards or downwards) over time. Bearing in mind the long term nature of the Group’s business, valuation changes have little direct effect on the ongoing activities or the income and expenditure of the Group. Tenants generally have long term leases, so rents are unaffected by short term valuation changes. Borrowings are secured against property values and if those values fall very significantly, this could limit the ability of the Group to develop the business using external borrowings. The risk is minimised by trying to ensure that there is adequate cover to allow for fluctuations in value on a short term basis. It continues to be the policy of the Group to realise property assets when the valuation of those assets reaches a level at which the directors consider that the long-term rental yield has been reached. The Group also seeks to acquire additional property investments on an opportunistic basis when the potential rental yields offer scope for future growth. INVESTMENT ACTIVITIES The investments in joint ventures and Bisichi are for the long term. LAP manages the UK property assets of Bisichi. However, the principal activity of Bisichi is overseas mining investment (in South Africa). While IFRS 10 requires the consolidation of Bisichi, the investment is held to generate income and capital growth over the longer term. It is managed independently of LAP and should be viewed by shareholders as an investment and not a subsidiary. The other listed investments are held as current assets to provide the liquidity needed to support the property activities while generating income and capital growth. Investments in property are made through joint ventures when the financing alternatives and spreading of risk make such an approach desirable. DIVIDEND In the light of the current uncertain economic environment, the directors are not recommending payment of a final dividend for 2024 (2023: Nil per share). 22 London & Associated Properties PLC 2024 GOVERNANCE DIRECTORS’ REPORT THE COMPANY’S ORDINARY SHARES HELD IN TREASURY At 31 December 2024, 216,715 (2023: 216,715) ordinary shares were held in Treasury with a market value of £20,046 (2023: £27,089). Treasury shares held at 1 January 2024 and 31 December 2024 216,715 No shares (2023: nil) were issued to employees in the year in place of cash for dividends associated with shares held within the share incentive plan. Treasury shares are not included in issued share capital for the purposes of calculating earnings per share or net assets per share and they do not qualify for dividends payable. PROPERTIES The freehold and long leasehold investment properties of the Company, its subsidiaries, Dragon and Bisichi were revalued as at 31 December 2024 by independent professional firms of chartered surveyors – Allsop LLP, London (71.2 per cent of the portfolio), Carter Towler, Leeds (28.8 per cent). The valuations, which are reflected in the financial statements, amount to £37.4 million (2023: £35.1 million). Taking account of prevailing market conditions, there was a £1.8 million increase in the valuation of the properties at 31 December 2024 (2023: decrease of £0.1 million). The proportion of this revaluation attributable to the Group (net of taxation) is reflected in the consolidated income statement and the consolidated balance sheet. FINANCIAL INSTRUMENTS Note 22 to the financial statements sets out the risks in respect of financial instruments. The board reviews and agrees overall treasury policies, delegating appropriate authority for applying these policies to the Chief Executive and Finance Director. Financial instruments are used to manage the financial risks facing the Group and speculative transactions are prohibited. Treasury operations are reported at each board meeting and are subject to weekly internal reporting. Hedging arrangements are used when appropriate by the Company, its subsidiaries and joint ventures in order to limit the effect of higher interest rates upon the Group. Where appropriate, hedging arrangements are covered in the Chairman and Chief Executive’s Statement and the Financial Review. DIRECTORS J A Heller, J Mintz, C A Parritt , R Priest and A R Heller were Directors of the company for the whole of 2024. H D Goldring, was a Director of the company until his retirement on 1 July 2024. J Mintz is retiring by rotation at the Annual General Meeting in 2025 and offers himself for re-election. Jonathan Mintz has been a Director since 2019 and is also the Company Secretary. He has a contract of employment determinable upon three months’ notice. Jonathan Mintz is an ACA qualified Finance Director experienced in real estate, consultancy, and construction in the UK and internationally. He has worked in the property and infrastructure sector for the majority of his career, holding senior positions with listed and private property and construction businesses. The board has considered the re-appointment of Jonathan Mintz and recommends his re-election as a director. DIRECTORS’ INTERESTS The interests of the Directors in the ordinary shares of the Company, including family and trustee holdings, where appropriate, can be found on page 29 in the Annual Remuneration Report. Substantial shareholdings 31 DEC 2024 31 DEC 2023 NO. % NO. % Heller family 48,080,880 56.35 48,080,880 56.35 Stonehage Fleming Investment Management Ltd 7,513,214 8.81 7,513,214 8.81 James Hyslop 5,136,258 6.02 5,136,258 6.02 Maland Pension Fund 3,000,000 3.52 3,000,000 3.52 The Company does not consider that the Heller family has a controlling share interest irrespective of the number of shares held as no individual party holds a majority and there is no legal obligation for shareholders to act in concert. The Directors do not consider that any single party has control. The Company is not aware of any other holdings exceeding 3 per cent of the issued share capital. SHARE CAPITAL AND TAKEOVER DIRECTIVE The Company has one class of share capital, namely ordinary shares. Each ordinary share carries one vote. All the ordinary shares rank pari passu. There are no securities issued by the Company which carry special rights with regard to control of the Company. The identity of all significant direct or indirect holders of securities in the Company and the size and nature of their holdings is shown in “Substantial Shareholdings” above. The rights of the ordinary shares to which the HMRC approved Share Incentive Plan relates are exercisable by the trustees on behalf of the employees. There are no restrictions on voting rights or on the transfer of ordinary shares in the Company, save in respect of treasury shares. The rules governing the appointment and replacement of Directors, alteration of the articles of association of the Company and the powers of the Company’s Directors accord with usual English company law provisions. Each Director is subject to re-election at least every three years. The Company is not party to any significant agreements that take effect, alter or terminate upon a change of control of the Company following a takeover bid. The Company is not aware of any agreements between holders of its ordinary shares that may result in restrictions on the transfer of its ordinary shares or on voting rights. There are no agreements between the Company and its Directors or employees providing for compensation for loss of office or employment that occurs because of a takeover bid. STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITOR The Directors in office at the date of approval of the financial statements have confirmed that, so far as they are aware, there is no relevant audit information of which the auditor is unaware. Each of the Directors has confirmed that they have taken all the steps that they ought to have taken as a Director in order to make them aware of any relevant audit information and to establish that it has been communicated to the auditor. London & Associated Properties PLC 2024 23 GOVERNANCE DIRECTORS’ REPORT INDEMNITIES AND INSURANCE The Articles of Association of the company provide for it to indemnify, to the extent permitted by law, directors and officers (excluding the Auditor) of the company, including officers of subsidiaries and associated companies, against liabilities arising from the conduct of the Group’s business. The indemnities are qualifying third party indemnity provisions of the Companies Act 2006 and each of these qualifying third party indemnities was in force during the course of the financial year ended 31 December 2024 and as at the date of this Directors’ report. No amount has been paid under any of these indemnities during the year. The Group maintains Directors and Officers insurance, which is reviewed annually and is considered to be adequate by the Company and its insurance advisers. DONATIONS No political donations were made during the year (2023: £Nil). No donations for charitable purposes were made during the year (2023: £Nil). CORPORATE RESPONSIBILITY Environment The environmental considerations of the group’s South African coal mining operations are covered in the Bisichi PLC Strategic Report. The group’s UK activities are principally property investment whereby premises are provided for rent to commercial businesses. The group seeks to provide those tenants with good quality premises from which they can operate in an efficient and environmentally efficient manner and waste re-cycling arrangements are in place at all the company’s locations. Greenhouse gas emissions Details of the group’s greenhouse gas emissions for the year ended 31 December 2024 can be found on page 17 of the Strategic Report. Employment The group’s policy is to attract staff and motivate employees by offering competitive terms of employment. The group provides equal opportunities to all employees and prospective employees including those who are disabled. The Bisichi PLC Strategic Report gives details of the Bisichi group’s activities and policies concerning the employment, training, health and safety and community support and social development concerning the Bisichi group’s employees in South Africa. Section 172 statement This is contained within the Strategic Report on page 8. GOING CONCERN The directors have reviewed the cash flow forecasts of the Group and the underlying assumptions on which they are based. The Group’s business activities, together with the factors likely to affect its future development, are set out in the Chairman’s Statement and Chief Executive’s Review and in the Financial and Performance Review. In addition, note 22 to the financial statements sets out the Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposure to credit risk and liquidity risk. With secured banking facilities, sound financial resources, low void rates and long term leases in place the Directors believe it remains appropriate to adopt the going concern basis of accounting in preparing the annual financial statements. The Bisichi directors continue to adopt the going concern basis of accounting in preparing the Bisichi annual financial statements. CORPORATE GOVERNANCE The Corporate governance report can be found on pages 24 and 25 of the annual report and accounts. ANNUAL GENERAL MEETING The Annual General Meeting will be held at 6 Babmaes Street, London SW1Y 6HD on Monday 16 June 2025 at 10.30 a.m. Items 1 to 6 will be proposed as ordinary resolutions. More than 50 per cent. of shareholders’ votes cast at the meeting must be in favour for those ordinary resolutions to be passed. The Directors consider that all of the resolutions to be put to the meeting are in the best interests of the Company and its shareholders as a whole and accordingly the board unanimously recommends that shareholders vote in favour of all of the resolutions as the Directors intend to do in respect of their own beneficial holdings of ordinary shares. Please note that the following paragraphs are only summaries of certain of the resolutions to be proposed at the Annual General Meeting and do not represent the full text of the resolutions. You should therefore read this section in conjunction with the full text of the resolutions contained in the notice of Annual General Meeting which accompanies this Directors’ Report. ORDINARY RESOLUTIONS Resolution 6 – Authority to allot securities Paragraph 6.1.1 of Resolution 6 would give the Directors the authority to allot shares in the Company and grant rights to subscribe for or convert any security into shares in the Company up to an aggregate nominal value of £2,844,200. This represents approximately 1/3 (one third) of the ordinary share capital of the Company in issue (excluding treasury shares) as at 25 April 2025 (being the last practicable date prior to the publication of this Directors’ Report). In line with guidance issued by the Institutional Voting Information Service (IVIS), paragraph 6.1.2 of Resolution 6 would give the directors the authority to allot shares in the Company and grant rights to subscribe for or convert any security into shares in the Company up to a further aggregate nominal value of £2,844,200, in connection with an offer by way of a rights issue. This amount represents approximately another 1/3 (one third) of the ordinary share capital of the Company in issue (excluding treasury shares) as at 25 April 2025 (being the last practicable date prior to the publication of this Directors’ Report). The Directors’ authority will expire on the earlier of 31 August 2026 or the next AGM. The Directors do not currently intend to make use of this authority. However, if they do exercise the authority, the Directors intend to follow best practice as recommended by the IVIS regarding its use (including as regards the Directors standing for re-election in certain cases). OTHER MATTERS Kreston Reeves LLP has acted as auditor throughout the year and has expressed its willingness to continue in office. A proposal will be made at the Annual General Meeting for its reappointment. By order of the board Jonathan Mintz Secretary For and on behalf of London & Associated Properties PLC 2nd Floor, 12 Little Portland Street London, W1W 8BJ 24 London & Associated Properties PLC 2024 GOVERNANCEGOVERNANCE Corporate Governance The Company has adopted the Corporate Governance Code for Small and Mid-Size Quoted Companies (the QCA Code) published by the Quoted Companies Alliance. The QCA Code provides governance guidance to small and mid-size quoted companies. The paragraphs below set out how the Company has applied this guidance during the year. The Company has complied with the QCA Code throughout the year. PRINCIPLES OF CORPORATE GOVERNANCE The board promotes good corporate governance in the areas of risk management and accountability as a positive contribution to business prosperity. The board endeavours to apply corporate governance principles in a sensible and pragmatic fashion having regard to the circumstances of the business. The key objective is to enhance and protect shareholder value. BOARD STRUCTURE During the year the board comprised the Chairman and Chief Executive, one other executive Director and three non-executive Directors. Their details appear on page 20. The board is responsible to shareholders for the proper management of the Group. The Directors’ responsibilities statement in respect of the accounts is set out on page 35. The non-executive Directors have a particular responsibility to ensure that the strategies proposed by the executive Directors are fully considered. To enable the board to discharge its duties, all Directors have full and timely access to all relevant information and there is a procedure for all Directors, in furtherance of their duties, to take independent professional advice, if necessary, at the expense of the Group. The board has a formal schedule of matters reserved to it and normally has eleven regular meetings scheduled each year. Additional meetings are held for special business when required. The board is responsible for overall Group strategy, approval of major capital expenditure and consideration of significant financial and operational matters. The role of Chairman and Chief Executive is held jointly by John Heller. The Board consider this to be appropriate given the size of the business and the additional cost of appointing a separate Chair. The separation of these roles is not a core principal of the QCA. The board committees, which have written terms of reference, deal with specific aspects of the Group’s affairs: • The nomination committee is chaired by C A Parritt and comprises one other non-executive Director and the executive Chairman. The committee is responsible for proposing candidates for appointment to the board, having regard to the balance and structure of the board. In appropriate cases recruitment consultants may be used to assist the process. All Directors are subject to re-election at a maximum of every three years. • The remuneration committee is responsible for making recommendations to the board on the Company’s framework of executive remuneration and its cost. The committee determines the contract terms, remuneration and other benefits for each of the executive directors, including performance related bonus schemes, pension rights, option grants and compensation payments. The board itself determines the remuneration of the non-executive Directors. The committee comprises two non-executive Directors and it is chaired by C A Parritt. The executive Chairman of the board is normally invited to attend. The Annual Remuneration Report is set out on pages 27 to 31. • The audit committee comprises two non-executive Directors and is chaired by C A Parritt. The audit committee report, with its terms of reference, is set out on page 34. The Chief Executive and Finance Director are normally invited to attend. BOARD AND BOARD COMMITTEE MEETINGS HELD IN 2024 The number of regular meetings during the year and attendance was as follows: MEETINGS HELD MEETINGS ATTENDED J A Heller Board Audit committee Nomination committee Remuneration committee 10 2 2 1 10 2 2 1 J Mintz Board Audit committee Remuneration committee 10 2 1 10 2 1 C A Parritt Board Audit committee Nomination committee Remuneration committee 10 2 2 1 10 2 2 1 H D Goldring (resigned 30 June 2024) Board Audit committee Nomination committee Remuneration committee 6 2 2 1 0 0 0 0 R Priest Board Audit committee Nomination committee Remuneration committee 10 2 2 1 10 1 2 1 A Heller Board 10 9 Attended audit & remuneration committees by invitation. London & Associated Properties PLC 2024 25 GOVERNANCE CORPORATE GOVERNANCE PERFORMANCE EVALUATION – BOARD, BOARD COMMITTEES AND DIRECTORS The performance of the board as a whole, its committees and the non-executive Directors is assessed by the Chairman and the Chief Executive and is discussed with the senior independent non- executive Director. Their recommendations are discussed at the nomination committee prior to proposals for re-election being recommended to the board. The performance of executive Directors is discussed and assessed by the remuneration committee. The senior independent Director meets regularly with the Chairman, executive and non-executive Directors individually outside of formal meetings. The Directors will take outside advice in reviewing performance but have not found this to be necessary to date. NON-ExECUTIVE DIRECTORS The senior independent non-executive Director is C A Parritt. The other non-executive Directors are R Priest and A R Heller. R Priest provides services to the Company on a fee paying basis. C A Parritt also provides some advisory services as part of his accounting practice. The board encourages all non-executive Directors to act independently and does not consider that length of service of any individual non-executive Director has resulted in the inability or failure to act independently. In the opinion of the board C A Parritt and R Priest continue to fulfil their roles as independent non- executive Directors. The background and skills of all non- executive directors are set out on page 20. The Directors are responsible for the Group’s system of internal control and for reviewing its effectiveness at least annually, and for the preparation and review of its financial statements. The board has designed the Group’s system of internal control in order to provide the Directors with reasonable assurance that assets are safeguarded, that transactions are authorised and properly recorded and that material errors and irregularities are either prevented or would be detected within a timely period. However, no system of internal control can eliminate the risk of failure to achieve business objectives or provide absolute assurance against material misstatement or loss. The key elements of the control system in operation are: • The board meets regularly on full notice with a formal schedule of matters reserved for its decision and has put in place an organisational structure with clearly defined lines of responsibility and with appropriate delegation of authority; • There are established procedures for planning, approval and monitoring of capital expenditure and information systems for monitoring the Group’s financial performance against approved budgets and forecasts; • The responsible executives are required regularly to undertake a full assessment process to identify and quantify the risks that face the functional activities for which they are responsible and assess the adequacy of the prevention, monitoring and modification practices in place for those risks. In addition, regular reports about significant risks and associated control and monitoring procedures are made to the executive Directors. The process adopted by the Group accords with the guidance contained in the document “Internal Control Guidance for Directors on the Combined Code” issued by the Institute of Chartered Accountants in England and Wales. The audit committee receives reports from external auditors and from executive Directors of the Group. During the period the audit committee has reviewed the effectiveness of the system of internal control as described above. The board receives periodic reports from all committees. • There are established procedures for the presentation and review of the financial statements and the Group has in place an organisational structure with clearly defined lines of responsibility and with appropriate delegation of authority. There are no internal control issues to report in the annual report and financial statements for the year ended 31 December 2024. Up to the date of approval of this report and the financial statements, the board has not been required to deal with any related material internal control issues. The Directors confirm that the board has reviewed the effectiveness of the system of internal control as described during the period. COMMUNICATION WITH SHAREHOLDERS Prompt communication with shareholders is given high priority. Extensive information about the Group and its activities is provided in the Annual Report. In addition, a half-year report is produced for each financial year and published on the Company’s website. The Company’s website www.lap.co.uk is updated promptly with announcements and Annual Reports upon publication. Copies from previous years are also available on the website. The share price history and market information can be found at https://www.londonstockexchange.com/stock/LAS/london- associated-properties-plc/company-page. The company code is LAS. There is a regular dialogue with the Company’s stockbrokers and institutional investors. Enquiries from individuals on matters relating to their shareholdings and the business of the Group are dealt with promptly and informatively. The Company’s website is under continuous development to enable better communication with both existing and potential new shareholders. THE BRIBERY ACT 2010 The Company is committed to acting ethically, fairly and with integrity in all its endeavours and compliance with the Company’s anti–bribery code is monitored closely. 26 London & Associated Properties PLC 2024 GOVERNANCEGOVERNANCE Governance statement by the Chairman of the remuneration committee The remuneration committee is pleased to present its report for the year ended 31 December 2024. The report is presented in two parts in accordance with the remuneration regulations. The first part is the Annual Remuneration Report which details remuneration awarded to Directors and non-executive Directors during the year. The shareholders will be asked to approve the Annual Remuneration Report as an ordinary resolution (as in previous years) at the AGM in June 2025 The second part is the Remuneration Policy which details the remuneration policy for Directors, and it can be found at www.lap. co.uk. The current remuneration policy was subject to a binding vote which was approved by shareholders at the AGM in June 2024. The approval will continue to apply for a 3-year period commencing from then. The committee reviewed the existing policy and deemed that no changes were necessary to the current arrangements. Both reports have been prepared in accordance with The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. The Company’s auditor, Kreston Reeves LLP is required by law to audit certain disclosures and where disclosures have been audited that is indicated in the independent auditor’s report. C A Parritt Chairman, Remuneration Committee 29 April 2025 London & Associated Properties PLC 2024 27 GOVERNANCE Annual remuneration report THE FOLLOWING INFORMATION HAS BEEN AUDITED Single total figure of remuneration for the year ended 31 December 2024 SALARY AND FEES £’000 BONUSES £’000 BENEFITS £’000 LONG TERM INCENTIVE AWARDS £’000 PENSIONS £’000 TOTAL 2024 £’000 TOTAL FIXED REMUNERA- TION £’000 TOTAL VARIABLE REMUNERA- TION £’000 Executive Directors J A Heller 364 - 45 - 36 445 445 - J A Heller - Bisichi - - 9 - - 9 9 - J Mintz 187 70 14 - 18 289 219 70 551 70 68 - 54 743 673 70 Non-executive Directors H D Goldring+ 9 - - - - 9 9 - C A Parritt+ 38 - - - - 38 38 - R Priest 35 - - - - 35 35 - A R Heller - - - - - - - - A R Heller - Bisichi 850 250 50 - 85 1,235 985 250 932 250 50 85 1,317 1,067 250 Total 1,483 320 118 - 139 2,060 1,740 320 J A Heller has an entitlement to an employer pension contribution of £35,995 for 2024 (2023: £33,075). He has elected for this not to be paid at this time. Single total figure of remuneration for the year ended 31 December 2023 SALARY AND FEES £’000 BONUSES £’000 BENEFITS £’000 LONG TERM INCENTIVES AWARDS £’000 PENSIONS £’000 TOTAL 2023 £’000 TOTAL FIXED REMUNERA- TION £’000 TOTAL VARIABLE REMUNERA- TION £’000 Executive Directors Sir Michael Heller 1 - 7 - - 8 8 - Sir Michael Heller - Bisichi 17 - - - - 17 17 - J A Heller 558 - 45 - 36 639 639 - J A Heller – Bisichi - - 9 - - 9 9 - J Mintz 179 70 13 - 17 279 209 70 755 70 74 - 53 952 882 70 Non-executive Directors H D Goldring + 18 - - - - 18 18 - C A Parritt + 38 - - - - 38 38 - R Priest + 35 - - - - 35 35 - A R Heller - - - - - - - - A R Heller - Bisichi 850 - 50 - 85 985 985 - 941 - 50 - 85 1,076 1,076 - Total 1,696 70 124 - 138 2,028 1,958 70 * Note 26 “Related party transactions” + Members of the remuneration committee. C A Parrit was chair of the remuneration committee throughout 2023 and 2024. H D Goldring was a member of the remuneration committtee until his resignation on 30 June 2024. R Priest was appointed to the remuneration committee on 30 January 2024. 28 London & Associated Properties PLC 2024 GOVERNANCE ANNUAL REMUNERATION REPORT Summary of directors’ terms DATE OF CONTRACT UNEXPIRED TERM NOTICE PERIOD Executive Directors John Heller 1 May 2003 Continuous 12 months Jonathan Mintz 11 February 2019 Continuous 3 months Non-executive Directors H D Goldring (Resigned 30/06/24) 1 July 1992 Continuous 3 months C A Parritt 1 January 2006 Continuous 3 months R Priest 31 July 2013 Continuous 3 months A R Heller 29 March 2023 Continuous 3 months TOTAL PENSION ENTITLEMENTS Two directors had benefits under money purchase schemes. Under his contract of employment, one Director was entitled to a regular employer contribution (currently £18,226 a year). Under his contract of employment, the other Director was entitled to a regular employer contribution (currently £34,067 a year) but has elected to defer the payment into his pension scheme. There are no final salary schemes in operation. No pension costs are incurred on behalf of non-executive Directors. There are no additional benefits payable to any Director in the event of early retirement. SHARE INCENTIVE PLAN (SIP) In 2006 the Directors set up an HMRC approved share incentive plan (SIP). The purpose of the plan, which is open to all eligible LAP executive Directors and head office based staff, is to enable them to acquire shares in the Company and give them a continuing stake in the Group. The SIP comprises four types of share – (1) free shares under which the Company may award shares of up to the value of £3,000 each year, (2) partnership shares, under which members may save up to £1,500 per annum to acquire shares, (3) matching shares, through which the Company may award up to two shares for each share acquired as a partnership share, and (4) dividend shares, acquired from dividends paid on shares within the SIP. 1. Free shares: No free shares were issued in 2023 or 2024. 2. Partnership shares: No partnership shares were issued in 2023 or 2024. 3. Matching shares: The partnership share agreements for the year to 31 October 2024 provide for two matching shares to be awarded free of charge for each partnership share acquired. No partnership shares were acquired in 2024 (2023: nil). Matching shares will usually be forfeited if a member leaves employment in the Group within five years of their grant. 4. Dividend shares: Dividends on shares acquired under the SIP will be utilised to acquire additional shares. Accumulated dividends received on shares in the SIP to 31 December 2024 amounted to £nil (2023: £nil). None of the Directors received dividend shares during the year (2023: nil shares). The SIP is set up as an employee benefit trust. The trustee is London & Associated Securities Limited, a wholly owned subsidiary of LAP, and all shares and dividends acquired under the SIP will be held by the trustee until transferred to members in accordance with the rules of the SIP. SHARE OPTION SCHEMES The Company has an HMRC approved scheme (Approved Scheme). It was set up in 1986 in accordance with HMRC rules to gain HMRC approved status which gave the members certain tax advantages. There are no performance criteria for the exercise of options under the Approved Scheme, as this was set up before such requirements were considered to be necessary. No Director has any options outstanding under the Approved Scheme nor were any options granted under the Approved Scheme for the year ended 31 December 2024. A share option scheme known as the “Non-approved Executive Share Option Scheme” (Unapproved Scheme) which does not have HMRC approval was set up during 2000. At 31 December 2024 there were no options to subscribe for ordinary shares outstanding. The exercise of options under the Unapproved Scheme is subject to the satisfaction of objective performance conditions specified by the remuneration committee which conforms to institutional shareholder guidelines and best practice provisions. Further details of this scheme are set out in Note 24 “Share Capital” to the financial statements. PAYMENTS TO PAST DIRECTORS No payments were made to past Directors in the year ended 31 December 2024 (2023: none). PAYMENTS FOR LOSS OF OFFICE No payments for loss of office were made in the year ended 31 December 2024 (2023: none). Benefits include the provision of car, health and other insurance and subscriptions. JA Heller and AR Heller are interested in a number of private property companies that receive services from the Company’s property agents – see Note 26 to the financial statements “Related party transactions”. J A Heller is a director of Dragon Retail Properties Limited, (a subsidiary for IFRS 10 purposes) and received benefits from that company of £10,793 (2023: £10,404) for services. This is included in the remuneration figures disclosed above. In March 2023, J A Heller became a non-executive director of Bisichi PLC (a subsidiary for IFRS 10 purposes) and received a benefit from that company of £9,333 (2023: £9,333). He didn’t receive any other remuneration or a bonus from Bisichi PLC. The remuneration figures for C A Parritt include fees paid to his accountancy practice for consultancy services provided to the Group. This is detailed in Note 26 to the financial statements. R Priest provides consultancy services to the Group. This is detailed in Note 26 to the financial statements. A R Heller, who is the Chairman & Managing Director of Bisichi PLC, (a subsidiary for IFRS 10 purposes) became a non- executive director of LAP on 29 March 2023 but he did not receive any remuneration from LAP during 2024. London & Associated Properties PLC 2024 29 GOVERNANCE ANNUAL REMUNERATION REPORT STATEMENT OF DIRECTORS’ SHAREHOLDINGS AND SHARE INTERESTS Directors’ interests The interests of the Directors in the ordinary shares of the Company, including family and trustee holdings, where appropriate, were as follows: BENEFICIAL INTERESTS NON-BENEFICIAL INTERESTS 31 DEC 24 1 JAN 24 31 DEC 24 1 JAN 24 J A Heller 1,872,410 1,872,410 19,277,931 19,277,931 J Mintz 100,000 100,000 - - H D Goldring * n/a 19,819 - - C A Parritt 36,168 36,168 - - R Priest - - - - A R Heller 816,874 816,874 #19,277,931 #19,277,931 * Resigned 30 June 2024 # These non-beneficial holdings are duplicated with those of J A Heller. The beneficial holdings of Directors shown above include their interests in the Share Incentive Plan. No share awards were made to the Directors in the year, and accordingly no discretion was exercised in determining any award or bonus payment as a result of any share price appreciation. There are no requirements or guidelines for any Director to own shares in the Company. THE FOLLOWING INFORMATION IS UNAUDITED: The graph illustrates the Company’s performance as compared with a broad equity market index over a five year period. Performance is measured by total shareholder return. The directors have chosen the FTSE All Share – Total Return Index as a suitable index for this comparison as it gives an indication of performance against a large spread of quoted companies. The middle market price of London & Associated Properties PLC ordinary shares at 31 December 2024 was 9.25p (2023: 12.5p). During the year the share middle market price ranged between 13.5p and 9.25p. Total Shareholder Return London & Associated Properties FTSE All Share Index 10 20 30 40 50 60 70 80 90 100 110 120 130 Jan 20 Mar 20 May 20 Jul 20 Sep 20 Nov 20 Jan 21 Mar 21 May 21 Jul 21 Sep 21 Nov 21 Jan 22 Mar 22 May 22 Jul 22 Sep 22 Nov 22 Jan 23 Mar 23 May 23 Jul 23 Sep 23 Nov 23 Jan 24 Mar 24 May 24 Jul 24 Sep 24 Nov 24 30 London & Associated Properties PLC 2024 GOVERNANCE ANNUAL REMUNERATION REPORT REMUNERATION OF THE CHIEF ExECUTIVE OVER THE LAST TEN YEARS YEAR CEO CHIEF EXECUTIVE SINGLE TOTAL FIGURE OF REMUNERATION £’000 ANNUAL BONUS PAYMENT AGAINST MAXIMUM OPPORTUNITY % LONG-TERM INCENTIVE VESTING RATES AGAINST MAXIMUM OPPORTUNITY % 2024 J A Heller 453 0% n/a 2023 J A Heller 648 0% n/a 2022 J A Heller 628 0% n/a 2021 J A Heller 590 0% n/a 2020 J A Heller 418 0% n/a 2019 J A Heller 648 0% n/a 2018 J A Heller 870 20% n/a 2017 J A Heller 487 11% n/a 2016 J A Heller 569 18% n/a 2015 J A Heller 762 41% n/a There were no formal criteria or conditions to apply in determining the amount of bonus payable or the number of shares to be issued prior to 2014. Considering the prevailing economic situation at the time the Chief Executive did not draw £185,000 (35%) of his salary in 2020 & 2024. PERCENTAGE CHANGE IN ExECUTIVE AND NON-EXECUTIVE DIRECTOR REMUNERATION (AUDITED) The table below shows the percentage change in remuneration of the Directors undertaking the role of Chief Executive Officer, Finance Director and Non-Executive Directors, and the average of the Company's colleagues in London & Associated Properties PLC on a full-time equivalent basis. The values in column 'a' represent the percentage change in salary & fees; values in column 'b' represent the percentage change in taxable benefits; and values in column 'c' represent the percentage change in bonus outcomes for performance periods in respect of each financial year. Where increases are infinite relative to the preceding year, we have shown them as 100% for illustration. Where a director was appointed or retired part-way through the year, we have annualized pay, except for one-time items. Where comparison to the prior year is not possible, we have used dashes. 2024vs2023 2023vs2022 2022vs2021 2021vs2020 2020vs2019 Percentage change for: a b c a b c a b c a b c a b c Executive Directors: J A Heler (37%) (2%) 0% 0% 42% 0% 5% 52% 0% 53% (38%) 0% (35%) (7%) 0% J Mintz 5% 8% 0% 7% 30% 0% 5% 25% 40% 0% 100% 100% 12% 0% (100%) Non Executive Directors: H D Goldring 0% 0% 0% 0% 0% 0% 0% (100%) 0% 0% 18% 0% 0% 22% 0% C A Parritt 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% R Priest 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% A R Heller 0% 0% 0% - - - - - - - - - - - - Colleague Pay: 5% (22%) 0% 7% 0% 8% 5% 0% 15% 0% 0% 100% 6% 1% (100%) RELATIVE IMPORTANCE OF SPEND ON PAY The total expenditure of the Group on remuneration to all employees (Note 27 refers) is shown below: 2024 £’000 2023 £’000 Employee Remuneration 9,098 8,860 Distributions to shareholders 0 0 London & Associated Properties PLC 2024 31 GOVERNANCE ANNUAL REMUNERATION REPORT SHAREHOLDER VOTING At the Annual General Meeting on 26 June 2024, there was an advisory vote on the resolution to approve the Remuneration Report, other than the part containing the remuneration policy. In addition, on 9 June 2023, there was a binding vote on the resolution to approve the Remuneration Policy. The results are detailed below: % OF VOTES FOR % OF VOTES AGAINST NUMBER OF VOTES WITHHELD Resolution to approve the Remuneration Report (26 June 2024) 98.90 1.10 27,265 Resolution to approve the Remuneration Policy (9 June 2023) 94.20 5.80 2,452,265 STATEMENT OF IMPLEMENTATION OF REMUNERATION POLICY The policy was approved at the AGM in June 2023 and was effective from 1 August 2023. The vote on the remuneration policy is binding in nature. The Company may not then make a remuneration payment or payment for loss of office to a person who is, is to be, or has been a director of the Company unless that payment is consistent with the approved remuneration policy, or has otherwise been approved by a resolution of members. During the year there were no deviations from the procedure for the implementation of the remuneration policy as set out in the policy. CONSIDERATION BY THE DIRECTORS OF MATTERS RELATING TO DIRECTORS’ REMUNERATION The Remuneration Committee considered the executive Directors’ remuneration and the Board considered the non-executive Directors’ remuneration in the year ended 31 December 2024. During the year under review: • There were no major decisions on Directors’ remuneration • There were no substantial changes to Directors’ remuneration • There was no discretion which has been exercised in the award of Directors’ remuneration The Company did not engage any consultants to provide advice or services to materially assist the remuneration committee’s considerations. 32 London & Associated Properties PLC 2024 GOVERNANCE Remuneration policy summary The remuneration policy summary below is an extract of the group’s current remuneration policy on directors’ remuneration (excluding Bisichi PLC), which was approved by a binding vote at the 2023 AGM. The approved policy took effect from 9 June 2023. A copy of the full policy can be found at www.lap.co.uk. POLICY TABLE ELEMENT PURPOSE POLICY Executive directors Base salary To recognise: Skills Responsibility Accountability Experience Value Considered by remuneration committee on appointment Set at a level considered appropriate to attract, retain, motivate and reward the right individuals Pension To provide competitive retirement benefits Company contribution offered at up to 10% of base salary as part of overall remuneration package Benefits To provide a competitive benefits package Contractual benefits include: Car or car allowance Group health cover Death in service cover Permanent health insurance Annual bonus To reward and incentivise In assessing the performance of the executive team, and in particular to determine whether bonuses are merited the remuneration committee takes into account the overall performance of the business, as well as individual contribution to the business in the period Share options To provide executive directors with a long-term interest in the company Where it is necessary to attract, retain, motivate and reward the right individuals, the directors may establish new schemes to replace any expired schemes Share incentive plan (SIP) To offer a shorter term incentive in the company and to give directors a stake in the group Offered to executive directors and head office staff Non-executive directors Base salary To recognise: Skills Responsibility Experience Risk Value Considered by the board on appointment Set at a level considered appropriate to attract, retain and motivate the individual Experience and time required for the role are considered on appointment Pension No pension offered Benefits No benefits offered except in exchange for sacrificing fees. Share options Non-executive directors do not participate in the share option schemes Notes to the Remuneration Policy The remuneration committee considers the performance measures outlined in the table above to be appropriate measures of performance and that the KPIs chosen align the interests of the directors and shareholders London & Associated Properties PLC 2024 33 GOVERNANCE REMUNERATION POLICY SUMMARY In setting the policy, the Remuneration Committee has taken the following into account: • The need to attract, retain and motivate individuals of a calibre who will ensure successful leadership and management of the company • The LAP Group’s general aim of seeking to reward all employees fairly according to the nature of their role and their performance • Remuneration packages offered to similar companies within the same sector • The need to align the interests of shareholders as a whole with the long-term growth of the Group; and • The need to be flexible and adjust with operational changes throughout the term of this policy In addition to the entitlements set out above, Bisichi PLC, which is treated as a subsidiary of the Group under the Companies Act 2006, shall be entitled to pay, and any executive director of Bisichi PLC who is also a director of the Company, shall be entitled to retain, any remuneration permissible in accordance with Bisichi PLC’s remuneration policy. Any such remuneration will be (i) to the extent required, permitted by this remuneration policy and (ii) excluded from the calculation of any limits on remuneration under this remuneration policy. The remuneration of non-executive directors is determined by the board, and takes into account additional remuneration for services outside the scope of the ordinary duties of non-executive directors. For details of remuneration of other company employees please see page 30. OPERATION OPPORTUNITY AND PERFORMANCE CONDITIONS Reviewed annually whenever there is a change of role or operational responsibility Paid monthly in cash There is no prescribed maximum salary or maximum rate of increase, although any increase in excess of inflation is unlikely, unless there are changes in responsibility No individual director will be awarded a base salary in excess of £675,000 a year No specific performance conditions are attached to base salaries The contribution payable by the Company is included in the director’s contract of employment Paid into money purchase schemes Company contribution offered at up to 10% of base salary as part of overall remuneration package No specific performance conditions are attached to pension contributions The committee retains the discretion to approve changes in contractual benefits in exceptional circumstances or where factors outside the control of the Group lead to increased costs (e.g. medical inflation) The costs associated with benefits offered are closely controlled and reviewed on an annual basis No director will receive benefits of a value in excess of 30% of their base salary No specific performance conditions are attached to contractual benefits The remuneration committee is using its discretion to determine the level of bonus on an annual basis In assessing performance consideration is given to the level of net rental income, cash flow, voids, realised development gains and income from managing joint ventures, as well as NAV changes. Achieved results are then compared with expectation taking account of market conditions Bonuses are generally offered in cash or shares The current maximum bonus will not exceed 80% of base salary in any one year but the remuneration committee reserves the power to award up to 150% in an exceptional year Performance conditions will be assessed on an annual basis The performance measures applied may be financial, non-financial, corporate, divisional or individual and in such proportion as the remuneration committee considers appropriate Offered at appropriate times by the remuneration committee The aggregate number of shares over which options may be granted under all of the company’s option schemes (including any options and awards granted under the company’s employee share plans) in any period of ten years, will not exceed, at the time of grant, 10% of the ordinary share capital of the company from time to time Share options will be offered by the remuneration committee at their discretion and will be subject to appropriate performance criteria at the time. Maximum participation levels are set by HMRC Of any bonus awarded, Directors may opt to have maximum of £3,000 per year paid in ‘Free Shares’ under the SIP scheme rules Reviewed annually No individual non-executive director will be awarded a base salary in excess of £50,000 a year No performance conditions are attached to base salaries 34 London & Associated Properties PLC 2024 GOVERNANCEGOVERNANCE Audit committee report The committee’s terms of reference have been approved by the board and follow published guidelines, which are available on request from the company secretary. The audit committee’s primary tasks are to: • review the scope of external audit, to receive regular reports from Kreston Reeves LLP and to review the half-yearly and annual accounts before they are presented to the board, focusing in particular on accounting policies and areas of management judgement and estimation; • monitor the controls which are in force to ensure the integrity of the information reported to the shareholders; • act as a forum for discussion of internal control issues and contribute to the board’s review of the effectiveness of the Group’s internal control and risk management systems and processes; • to review the risk assessments made by management, consider key risks with action taken to mitigate these and to act as a forum for discussion of risk issues and contribute to the board’s review of the effectiveness of the Group’s risk management control and processes; • consider once a year the need for an internal audit function; • advise the board on the appointment of the external auditors, the rotation of the audit partner every five years and on their remuneration for audit work; discuss the nature and scope of their audit work and undertake a formal assessment of their independence each year, which includes: i) a review of non-audit services provided to the Group and related fees; ii) discussion with the auditors of their written report detailing all relationships with the Company and any other parties that could affect independence or the perception of independence; iii) a review of the auditors’ own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner; and iv) obtaining a written confirmation from the auditors that, in their professional judgement, they are independent. MEETINGS The committee meets at least twice a year prior to the publication of the annual results and discusses and considers the half year results prior to their approval by the board. The audit committee meetings are attended by the external audit partner, chief executive, finance director and company secretary. During the year the members of the committee also meet on an informal basis to discuss any relevant matters which may have arisen. Additional formal meetings may be held as necessary. During the past year the committee: • met with the external auditors, and discussed their reports to the audit committee; • approved the publication of annual and half year financial results; • considered and approved the annual review of internal controls; • decided that there was no current need for an internal audit function due to the scale of the business and processes in place; • agreed the independence of the auditors and approved their fees for audit services as set out in Note 2 to the financial statements; • the chairman of the audit committee has also had separate meetings and discussions with the external audit partner; FINANCIAL REPORTING As part of its role, the Audit Committee assessed the audit findings that were considered most significant to the financial statements, including those areas requiring significant judgement and/or estimation. When assessing the identified financial reporting matters, the committee assessed quantitative materiality primarily by reference to the carrying value of the group’s total assets, given that the group operates a principally asset based business. When determining quantitative materiality, the Board also gave consideration to the value of revenues generated by the group and net asset value, given that they are key trading and business KPIs. The qualitative aspects of any financial reporting matters identified during the audit process were also considered when assessing their materiality. Based on the considerations set out above we have considered quantitative errors individually or in aggregate in excess of approximately £1.534 million in relation to the Group and £0.468 million in relation to the parent company and £1.0 million for the Bisichi group to be material. EFFECTIVENESS OF THE ExTERNAL AUDIT PROCESS Receiving high-quality and effective audit services is of paramount importance to the Committee. We continue to monitor carefully the effectiveness of the external auditor as well as their independence. We have full regard to the FRC’s Ethical Standard and ensure that our procedures and safeguards meet these standards. The external auditor produced a detailed audit planning report in preparation for the year-end financial statements. The effectiveness review of the external auditor is considered as part of the Committee’s annual performance evaluation, which also examines the relationship and communications between the Committee and the external auditor. No issues were raised during that review. The Committee concluded that the Auditor was effective during the year and that the relationship and communications were open and constructive. ExTERNAL AUDITOR Kreston Reeves LLP has held office throughout the period under review. In the United Kingdom London & Associated Properties PLC provides extensive administration and accounting services to Bisichi PLC, which has its own audit committee and employs Kreston Reeves LLP as its auditor. C A Parritt Chairman – Audit Committee 29 April 2025 London & Associated Properties PLC 2024 35 GOVERNANCEGOVERNANCE Directors’ responsibilities statement Directors are responsible for preparing the Strategic Report and the Directors’ Report, the Directors’ Remuneration Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare group and company financial statements for each financial year. The directors have elected under company law to prepare group financial statements in accordance with UK-adopted international accounting standards. The directors have elected under company law to prepare the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including FRS 101 “Reduced Disclosure Framework”. The group financial statements are required by law and international accounting standards in conformity with the requirements of the Companies Act 2006 and UK-adopted international financial reporting standards to present fairly the financial position and performance of the group; the Companies Act 2006 provides in relation to such financial statements that references in the relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation. 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 company and of the profit or loss of the group for that period. In preparing each of the group and company financial statements, the directors are required to: a. select suitable accounting policies and then apply them consistently; b. make judgements and accounting estimates that are reasonable and prudent; c. for the group financial statements, state whether applicable UK-adopted international accounting standards have been followed, subject to any material departures disclosed and explained in the Financial Statements; d for the company financial statements, state whether applicable UK accounting standards, comprising FRS101, have been followed, subject to any material departures disclosed and explained in the company financial statements; e. prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and the company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and the 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. DIRECTORS’ STATEMENT PURSUANT TO THE DISCLOSURE GUIDANCE AND TRANSPARENCY RULES The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group’s and Company’s position and performance, business model and strategy Each of the directors, whose names and functions are listed on page 20 confirm that, to the best of each person’s knowledge: a. the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and loss of the company and the undertakings included in the consolidation taken as a whole; and b. the Strategic Report contained in the Annual Report includes a fair review of the development and performance of the business and the position of the company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the London & Associated Properties PLC website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. 36 London & Associated Properties PLC 2024 GOVERNANCE Independent auditor’s report TO THE SHAREHOLDERS OF LONDON & ASSOCIATED PROPERTIES PLC FOR THE YEAR ENDED 31 DECEMBER 2024 OPINION We have audited the financial statements of London & Associated Properties PLC (the ‘Parent Company’) and its subsidiaries (the “Group”), for the year ended 31 December 2024 which comprise the consolidated income statement, consolidated statement of other comprehensive income, consolidated and company balance sheets, consolidated and company statements of changes in equity, consolidated cash flow statement and notes to the financial statements, and notes to the financial statements, including a summary of significant accounting policies. In our opinion: • the financial statements of London & Associated Properties PLC give a true and fair view of the state of the Group’s and of the Parent Company's affairs as at 31 December 2024 and of the Group’s profit for the year then ended and of the Group’s cashflows position as at 31 December 2024; • the Group financial statements have been properly prepared in accordance with UK-adopted international financial accounting standards; and • the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • the Group and Parent Company 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 in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s Ethical Standard as applied to listed 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. AN OVERVIEW OF THE SCOPE OF OUR AUDIT As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. We also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group and the Parent Company, the accounting processes and controls, and the industry in which they operate. We have determined the components of the group based on a combination of finance function and business function of each component. Our scoping considerations for the Group audit were based both on financial information and risk. In total, we have identified 6 distinct components within the group financial statements on the basis of opinion to be issued: Our application of materiality COMPONENT NAME: AUDIT STRATEGY London & Associated Properties Plc Kreston Reeves have undertaken a full statutory audit of the Parent Company accounts and the consolidation accounting. Analytical Properties Limited Kreston Reeves have undertaken a full statutory audit of this entity. Dragon Retail Limited Kreston Reeves have undertaken a full statutory audit of this entity. West Ealing Projects Limited Kreston Reeves have undertaken a full statutory audit of this entity. Broadway Regen Limited Kreston Reeves have undertaken a full statutory audit of this entity. Bisichi Plc Kreston Reeves have undertaken a full statutory audit of the Bisichi UK Plc Investment properties component while B.D.O. South Africa have undertaken full statutory audits on the mining operations in South Africa, under the close supervision of Kreston Reeves, of the mining operating subsidiaries. London & Associated Properties PLC 2024 37 GOVERNANCE INVOLVEMENT OF A COMPONENT AUDITOR A separate audit team in Kreston Reeves with the same engagement partner as the Group audit team was responsible for the audit of Bisichi UK Plc and they have involved B.D.O. South Africa in the conduct of the Group audit for the year ended 31 December 2024. The component auditor undertook specific audit procedures with respect to the financial information of the component listed in the table above. This work was undertaken in full compliance with the requirements of ISA 600 (Revised). OUR APPLICATION OF MATERIALITY We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion. Based on our professional judgement, we determined materiality and performance materiality for the financial statements of the Group and of the Parent Company as follows: GROUP FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL STATEMENTS Materiality £1,517,000 (2023: £1,479,000) £438,000 (2023: £545,000) Basis for determining materiality ~3% of net assets ~3% of net assets Rationale for benchmark applied The group's principal activity is that of an exploration and mining operation and investment property holdings. To this end the business is highly asset focused. Therefore, a benchmark for materiality based on the net assets of the group is considered to be appropriate. This benchmark has been selected after taking into account the key performance indicators used by stakeholders of these financial statements. The company’s principal activity is that of a holding company for the group and as such has no direct trade. It does hold investment balances with subsidiaries. Therefore, a benchmark for materiality based on the net assets of the company is appropriate. This benchmark has been selected after considering the key performance indicators used by stakeholders of these financial statements. Performance materiality £1,062,000 (2023: £1,035,000) £306,000 (2023: £381,000) Basis for determining performance materiality 70% of materiality 70% of company materiality Reporting threshold £76,000 (2023: £73,000) £22,000 (2023: £27,000) Basis for determining reporting threshold 5% of materiality 5% of materiality We reported all audit differences found in excess of our reporting threshold to the audit committee. For each Group component within the scope of our Group audit, we determined component performance materiality that is less than our overall Group performance materiality. The component performance materiality determined for Group components was £690,000. GOVERNANCE INDEPENDENT AUDITOR’S REPORT 38 London & Associated Properties PLC 2024 GOVERNANCE INDEPENDENT AUDITOR’S REPORT 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. This is not a complete list of all risks identified by our audit. REVENUE RECOGNITION: £54,917,000 (2023: £53,183,000) Significance and nature of the key audit matter How our audit addressed the key audit matter Revenue is a key performance indicator for users in assessing the group’s financial statements. The revenue generated has a significant impact on cash inflows and profit before tax for the group. As such revenue is a key determinant in profitability and the group’s ability to generate cash. Revenue comprises two key revenue streams: the sale of coal and property rental income. Coal revenue is recognised when the customer has a legally binding obligation to settle under the terms of the contract. Rental income is recognised in the Group income statement on a straight-line basis over the term of the lease. Sales of coal and coal processing services in the period were tested from the trigger point of the sale to the point of recognition in the financial statements, corroborating this to contract sales or service terms and the recognition stages detailed in IFRS 15. Rental income revenue was recalculated based on the terms included in signed lease agreements. With samples selected from the tenancy schedules, tracing entries into the financial statements. The revenue recognition stages detailed within the standard were carefully considered to ensure revenue recognised was in line with these. Revenue streams were further analytically reviewed via comparison to our expectations. Expectations were based on a combination of prior financial data/budgets and our own assessments based on our knowledge gained of the business. Cut-off of revenue was reviewed by analysing sales recorded during the period just before and after the financial year end and determining if the recognition applied was appropriate. Walkthrough testing was performed to ensure that key systems and controls in place around the revenue cycle operated as designed. The accuracy of revenue disclosures in the accounts were confirmed to be consistent with the revenue cycle observed and audited. The completeness of these disclosures was confirmed by reference to the full disclosure requirements as detailed in IFRS 15. KEY OBSERVATIONS We have no concerns over the material accuracy of revenue recognised in the financial statements. London & Associated Properties PLC 2024 39 GOVERNANCE INDEPENDENT AUDITOR’S REPORT VALUATION/IMPAIRMENT OF INVESTMENT PROPERTIES: £38,991,000 (2023: £36,649,000) VALUATION/IMPAIRMENT OF INVENTORY (DEVELOPMENT PROPERTY): £8,996,000 (2023: £8,889,000) Significance and nature of the key audit matter How our audit addressed the key audit matter Investment properties comprise freehold and long leasehold land and buildings. Investment properties are carried at fair value in accordance with IAS 40. Properties classified as inventory are properties which are currently being developed and are measured at the lower of cost and net realisable value in accordance with IAS 2. Investment properties are revalued annually by professional external surveyors and included in the balance sheet at their fair value. Gains or losses arising from changes in the fair values of assets are recognised in the consolidated income statement in the period to which they relate. In accordance with IAS 40, investment properties are not depreciated. Management performs an annual appraisal on the development property valuations to ensure that the carrying amount is the lower of cost and net realisable value in accordance with IAS 2. The fair value of the head leases is the net present value of the current head rent payable on leasehold properties until the expiry of the lease. Appropriate classification of each property was considered, IAS 40 for investment properties and IAS 2 for inventory to ensure each property has been classified correctly and therefore accounted for and disclosed within these financial statements in accordance with the relevant standard. External valuation reports were obtained and vouched to stated fair values. The competence and independence of the valuation experts was carefully considered to ensure that the reports they produce can be relied upon. A meeting was held with the valuers to challenge the assumptions in their report and discuss the movements in the values of specific properties. Discussions were held with the management to understand and challenge the reasonableness of the valuation assessment prepared for the inventory (development property) balance as at year end. Supporting calculations for the long leasehold land and buildings were reviewed to ensure they are materiality accurate, and any assumptions are reasonable. We have further performed our own separate impairment considerations to consider if events/factors in place at year end present material impairment indicators. Based on work performed, an impairment provision of £900K was recognised on the development property balance as at year end. No impairment provision was deemed necessary to be provided for investment properties. We have further considered the threat of climate change with respect to the potential impact on property values. An auditor’s expert was appointed to review the work of management’s valuation expert and provide their conclusion over the appropriateness of the methodologies, data and assumptions applied. KEY OBSERVATIONS We have no concerns over the material accuracy of investment properties and inventory (development property) values recognised in the financial statements. 40 London & Associated Properties PLC 2024 GOVERNANCE INDEPENDENT AUDITOR’S REPORT VALUATION/IMPAIRMENT OF MINING RESERVES AND DEVELOPMENT: £22,771,000 (2023: £18,896,000) Significance and nature of the key audit matter How our audit addressed the key audit matter The purpose of mine development is to establish secure working conditions and infrastructure to allow the safe and efficient extraction of recoverable reserves. Depreciation on mine development costs is not charged until production commences or the assets are put to use. On commencement of full commercial production, depreciation is charged over the life of the associated mine reserves extractable using the asset on a unit of production basis. The unit of production calculation is based on tonnes mined as a ratio to proven and probable reserves and also includes future forecast capital expenditure. The cost recognised includes the recognition of any decommissioning assets related to mine development. The accounting requirements of IFRS 6 and IAS 16 were considered to ensure capitalisation of costs to mine development under IAS 16 was appropriate. In considering impairment indicators, as governed by IAS 36, the life of mine assessment was obtained. All significant input variables were considered and stress-tested to assess headroom between modelling and the value of mine development. Consideration was given to the competence and independence of the technical expert involved with the production of historic technical reports on which the life of mine assessment is partially built. Depreciation of mine development was recalculated based on the unit of production basis to ensure accurately recorded. This basis was also considered for reasonableness by reference to the accounting policies of industry peers. Additional consideration was given to the remaining expected life of coal mining more generally. We have further considered to threat of climate change with respect to the potential life of the mining operation to ensure that this will not be less than the current legal remaining lifespan of 5 years. The accuracy and appropriateness of mine development disclosures in the accounts were confirmed to be consistent with the mine development accounting cycle observed and audited. KEY OBSERVATIONS We have no concerns over the material accuracy of mining reserves and development values recognised in the financial statements. CONCLUSIONS RELATING TO GOING CONCERN In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the director’s assessment of the Group and Parent company’s ability to continue to adopt the going concern basis of accounting including the following: • We gained an understanding of the systems and controls around managements’ going concern assessment, including for the preparation and review process for forecasts and budgets • We obtained evidence that management have undertaken a formal going concern assessment, including sensitivity analysis of cash flow forecasts, clear consideration of significant external factors and the potential liquidity impact of such factors on cash balances including available facilities. • We have analysed the financial strength of the business at the year-end date and considered key trends in balance sheet strength and business performance over the last three years. • We tested the mechanical integrity of forecast model by checking the accuracy and completeness of the model, including challenging the appropriateness of estimates and assumptions with reference to empirical data and external evidence. • Based on our above assessment, we performed our own sensitivity analysis in respect of the key assumptions underpinning the forecasts. • We performed stress-testing analysis on the core cash generating units of the business to confirm cash inflow levels needed to maintain minimal liquidity required to meet liabilities as they fall due. • We considered post year end performance of the business, comparing this to budget as well as considering the development of key liquidity ratios in the business. • The group's banking facility documentation was reviewed to ensure that any covenants in place have not been breached. • We reviewed the adequacy and completeness of the disclosure included within the financial statements in respect of going concern. • Confirmations gained that operation of the business, including mine production and sale at Black Wattle Colliery have not been disrupted in the period by any external or internal factors. • We considered climate change-related risks facing the business from a physical and transitional risk perspective, this included careful consideration of the estimated remaining life of coal mining as a viable commercial endeavour. 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 the 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. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. London & Associated Properties PLC 2024 41 GOVERNANCE INDEPENDENT AUDITOR’S REPORT OUR CONSIDERATION OF CLIMATE CHANGE RELATED RISKS The financial impacts on the Group of climate change and the transition to a low-carbon economy (climate change) were considered in our audit where they have the potential to directly or indirectly impact key judgements and estimates within the financial statements. The Group continues to develop its assessment of the potential impacts of climate change. Climate risks have the potential to materially impact the key judgements and estimates within the financial report. Our audit considered those risks that could be material to the key judgements and estimates in the assessment of the carrying value of non-current assets and closure and rehabilitation provisions. The key judgements and estimates included in the financial statements incorporate actions and strategies, to the extent they have been approved and can be reliably estimated in accordance with the Group’s accounting policies. Accordingly, our key audit matters address how we have assessed the Group’s climate-related assumptions to the extent they impact each key audit matter. 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. Our opinion on the 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. OUR OPINION ON THE REMUNERATION REPORT Kreston Reeves has audited the Remuneration report set out on pages 27 to 31 of the Annual Report for the financial year. The Directors of the Company are responsible for the preparation and presentation of the Remuneration report in accordance with the Companies Act 2006. Kreston Reeves’ responsibility is to express an opinion on the Remuneration report, based on our audit conducted in accordance with International Accounting Standards. In Kreston Reeves’ opinion, the Remuneration report of the Group for the period complies with the requirements of the Companies Act 2006. OPINIONS ON OTHER MATTERS PRESCRIBED BY 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 our knowledge and understanding of the Group and Parent Company and its 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 are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit 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 UK 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 23; • 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 8; • Director’s statement on whether it has a reasonable expectation that the group will be able to continue in operation and meets its liabilities set out on page 8; • Directors' statement on fair, balanced and understandable set out on page 35; • Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 9 to 10; • Section of the annual report that describes the review of effectiveness of risk management and internal control systems set out on page 25; • Section describing the work of the audit committee set out on page 34. 42 London & Associated Properties PLC 2024 GOVERNANCE INDEPENDENT AUDITOR’S REPORT RESPONSIBILITIES OF DIRECTORS As explained more fully in the directors’ responsibilities statement (set out on page 35), the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, 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 financial statements, the directors are responsible for assessing the Group’s and 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 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. Capability of the audit in detecting irregularities, including fraud Based on our understanding of the group and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations with respect to acting as landlords in the UK and the operation of a coal mine in South Africa, as well as related to health and safety, anti-bribery and employment law. We considered the extent to which non- compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to: posting inappropriate journal entries to increase revenue or reduce expenditure, management bias in accounting estimates and judgemental areas of the financial statements such as the valuation of investment properties. Audit procedures performed by the group engagement team and component auditors included: • We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most significant are those that relate to the reporting framework and the relevant tax compliance regulations in the jurisdictions in which London & Associated Properties PLC operates. In addition, we concluded that there are certain significant laws and regulations that may have an effect on the determination of the amounts and disclosures in the financial statements, mainly relating to health and safety, employee matters, bribery and corruption practices, environmental and certain aspects of company legislation recognising the regulated nature of the Group’s mining activities and its legal form. • Detailed discussions were held with management to identify any known or suspected instances of non- compliance with laws and regulations. • Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud. • With the involvement of an external auditor’s expert, we have challenged assumptions and judgements made by management in its significant accounting estimates, including assessing the capabilities of the property valuers and discussing with the valuers how their valuations were calculated and the data and assumptions they have used to calculate these. • Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud. • Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business. • Reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with relevant tax and regulatory authorities. • Performing integrity testing to verify the legitimacy of banking records obtained from management. • Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions. • Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation. • We ensured our global audit team (including Kreston Reeves and BDO) has deep industry experience through working for many years on relevant audits, including experience of mining and investment property management. Our audit planning included considering external market factors, for example geopolitical risk, the potential impact of climate change, commodity price risk and major trends in the industry. 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. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. London & Associated Properties PLC 2024 43 GOVERNANCE INDEPENDENT AUDITOR’S REPORT • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group or the parent company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and communicate with them all relationships and other matters that may reasonably be thought to bear our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. OTHER MATTERS WHICH WE ARE REQUIRED TO ADDRESS We were reappointed by the Audit Committee in the period to audit the financial statements. Our total uninterrupted period of engagement is 4 periods, covering the financial year ended 31 December 2024. The non-audit services prohibited by the Financial Reporting Council’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 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. Anne Dwyer BSc(Hons) FCA (Senior Statutory Auditor) For and on behalf of Kreston Reeves LLP Chartered Accountants Statutory Auditor London Date: 29 April 2025 44 London & Associated Properties PLC 2024 2024 2023 NOTES £'000 £'000 Group revenue 1 54,917 53,183 Operating costs 1 (49,624) (52,017) Operating profit 5,293 1,166 Finance income 4 202 332 Finance expenses 4 (2,971) (3,646) Result before revaluation and other movements 2,524 (2,148) Non–cash changes in valuation of assets and liabilities and other movements Exchange losses (23) (158) Increase/(decrease) in value of investment properties 9 1,800 (5) Profit on disposal of fixed assets – 4 Gain on investments held at fair value (Bisichi) 68 759 Gain/(loss) on disposal of subsidiary 6 50 (1,930) Decrease in value of other investments – (6) Profit/(loss) for the year before taxation 2 4,419 (3,484) Income tax charge 5 (1,615) (307) Profit/(loss) for the year 2,804 (3,791) Attributable to: Equity holders of the Company (373) (3,861) Non-controlling interest 25 3,177 70 Profit/(loss) for the year 2,804 (3,791) Earnings per share Loss per equity share - basic and diluted 8 (0.44)p (4.52)p Consolidated statement of comprehensive income for the year ended 31 December 2024 2024 2023 £'000 £'000 Profit/(loss) for the year 2,804 (3,791) Other comprehensive expense: Items that may be subsequently recycled to the income statement: Exchange differences on translation of Bisichi PLC foreign operations (122) (675) Total comprehensive income/(expense) for the year net of tax 2,682 (4,466) Attributable to: Equity shareholders (405) (4,056) Non–controlling interest 3,087 (410) Total comprehensive income/(expense) for the year net of tax 2,682 (4,466) Total comprehensive expense per equity share - basic and diluted (0.47)p (4.75)p FINANCIAL STATEMENTS Consolidated income statement for the year ended 31 December 2024 London & Associated Properties PLC 2024 45 FINANCIAL STATEMENTS Consolidated balance sheet at 31 December 2024 2024 2023 NOTES £'000 £'000 Non–current assets Market value of properties attributable to Group 9 37,405 35,060 Present value of head leases 9 1,586 1,589 Property 38,991 36,649 Mining reserves, property, plant and equipment 10 23,603 19,164 Other investments at fair value through profit and loss (“FVPL”) 15 14,339 14,258 Deferred tax 23 – 432 76,933 70,503 Current assets Inventories - Property 13 8,996 8,889 Inventories - Mining 14 3,377 2,579 Assets held for sale 11 – 545 Trade and other receivables 16 7,202 7,413 Investments in listed securities held at FVPL 17 628 734 Cash and cash equivalents 2,926 6,978 23,129 27,138 Total assets 100,062 97,641 Current liabilities Trade and other payables 18 (15,748) (14,463) Borrowings 19 (7,163) (12,792) Lease liabilities 20 (439) (394) Current tax liabilities (3,801) (5,191) (27,151) (32,840) Non–current liabilities Borrowings 19 (17,929) (13,291) Lease liabilities 20 (2,134) (1,582) Provisions 21 (1,590) (1,615) Deferred tax liabilities 23 (699) – (22,352) (16,488) Total liabilities (49,503) (49,328) Net assets 50,559 48,313 Equity attributable to the owners of the parent Share capital 24 8,554 8,554 Share premium account 4,866 4,866 Translation reserve (Bisichi PLC) (1,290) (1,258) Capital redemption reserve 47 47 Retained earnings (excluding treasury shares) 16,052 16,425 Treasury shares 24 (144) (144) Retained earnings 15,908 16,281 Total equity attributable to equity shareholders 28,085 28,490 Non–controlling interest 25 22,474 19,823 Total equity 50,559 48,313 Net assets per share attributable to equity shareholders 8 32.91p 33.38p Diluted net assets per share 8 32.91p 33.38p These financial statements were approved by the board of directors and authorised for issue on 29 April 2025 and signed on its behalf by: John Heller Jonathan Mintz Company Registration No. 341829 Director Director 46 London & Associated Properties PLC 2024 FINANCIAL STATEMENTSFINANCIAL STATEMENTS Consolidated statement of changes in shareholders’ equity for the year ended 31 December 2024 SHARE RETAINED EARNINGS TOTAL EXCLUD- EXCLUDING NON– TRANSLA- CAPITAL ING NON– CON- TION REDEMP- TREAS- TREAS- CON- TROLLING CAPI- SHARE RE- TION URY URY TROLLING INTER- TOTAL TAL PREMIUM SERVES RESERVE SHARES SHARES INTERESTS ESTS EQUITY £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 Balance at 1 January 2023 8,554 4,866 (1,063) 47 (144) 20,286 32,546 21,169 53,715 (Loss)/profit for year – – – – – (3,861) (3,861) 70 (3,791) Other comprehensive expense: Currency translation – – (195) – – – (195) (480) (675) Transactions with owners: Dividends – non–controlling interests – – – – – – – (936) (936) Balance at 31 December 2023 8,554 4,866 (1,258) 47 (144) 16,425 28,490 19,823 48,313 Profit for year – – – – – (373) (373) 3,177 2,804 Other comprehensive expense: Currency translation – – (32) – – – (32) (90) (122) Transactions with owners: Dividends – non–controlling interests – – – – – – – (436) (436) Balance at 31 December 2024 8,554 4,866 (1,290) 47 (144) 16,052 28,085 22,474 50,559 London & Associated Properties PLC 2024 47 FINANCIAL STATEMENTSFINANCIAL STATEMENTS Consolidated cash flow statement for the year ended 31 December 2024 NOTES 2024 2023 £’000 £’000 Operating activities Profit/(loss) for the year before taxation 4,419 (3,484) Finance income 4 (202) (332) Finance expense 4 2,971 3,646 (Increase)/decrease in value of investment properties 9 (1,800) 5 Gain on investments held at FVPL (Bisichi) (68) (759) (Profit)/loss on disposal of subsidiary (50) 1,930 Decrease in value of other investments – 6 Depreciation 10 4,31 1 1,761 Impairment of inventory - property 900 - Profit on disposal of non-current assets – (4) Development expenditure on inventories - property 13 (1,007) (777) Exchange adjustments 23 158 Change in inventories - mining (843) 2,046 Change in receivables (70) (933) Change in payables 1,769 429 Cash generated from operations 10,353 3,692 Income tax (paid) / refunded (1,789) 137 Cash inflows from operating activities 8,564 3,829 Investing activities Disposal of subsidiary – (148) Acquisition of mining reserves, plant and equipment (8,132) (5,952) Sale of plant and equipment – 21 Disposal of other investments 5,372 432 Acquisition of other investments (5,279) (1,189) Interest received 202 332 Cash outflows from investing activities (7,837) (6,504) Financing activities Interest paid (2,804) (3,557) Interest obligation under finance leases (178) (185) Repayment of lease liability (234) (251) Receipt of bank loan - Bisichi PLC 3,845 99 Repayment of bank loan - Bisichi PLC (3,995) (624) Repayment of bank loan - Dragon Retail Properties Ltd (215) (193) Receipt of bank loan - London & Associated Properties PLC 496 – Repayment of bank loan - London & Associated Properties PLC (7) (95) Equity dividends paid - Bisichi PLC (436) (1,372) Cash outflows from financing activities (3,528) (6,178) Net decrease in cash and cash equivalents (2,801) (8,853) Cash and cash equivalents at beginning of year 3,444 12,157 Exchange adjustment 25 140 Cash and cash equivalents at end of year 668 3,444 The cash flows above relate to continuing operations. CASH AND CASH EQUIVALENTS For the purpose of the cash flow statement, cash and cash equivalents comprise the following balance sheet amounts: 2024 2023 £’000 £’000 Cash and cash equivalents (before bank overdrafts) 2,926 6,978 Bank overdrafts 19 (2,258) (3,534) Cash and cash equivalents at end of year 668 3,444 £195,000 of cash deposits at 31 December 2024 were charged as security to bank loans (2023: £195,000). 48 London & Associated Properties PLC 2024 FINANCIAL STATEMENTSFINANCIAL STATEMENTS Group accounting policies The following are the principal Group accounting policies: BASIS OF ACCOUNTING The Group financial statements are prepared in accordance with UK adopted international accounting standards and the requirements of the Companies Act 2006 and as required under the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority the group financial statements are prepared in accordance with UK adopted international financial reporting standards. The directors have elected under company law to prepare the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) including FRS 101 Reduced Disclosure Framework and these are presented in note 31. The financial statements are prepared under the historical cost convention, except for the revaluation of freehold and leasehold properties and financial assets at fair value through profit and loss including interest rate derivatives. The Group financial statements are presented in Pounds Sterling and all values are rounded to the nearest thousand pounds (£’000) except when otherwise stated. The functional currency for each entity in the Group is the currency of the country in which the entity has been incorporated. Details of the country in which each entity has been incorporated can be found in note 12. The exchange rates used in the accounts were as follows: £1 STERLING: RAND £1 STERLING: DOLLAR 2024 2023 2024 2023 Year-end rate 23.6446 23.3014 1.2521 1.2732 Annual average 23.4159 22.9364 1.2780 1.2389 London & Associated Properties PLC (“LAP”), the parent company, is a public limited company incorporated and domiciled in England and quoted on the London Stock Exchange. The Company registration number is 341829. LAP and its subsidiaries (“the Group”) consist of LAP and all its subsidiary undertakings, including Bisichi PLC (“Bisichi”) and Dragon Retail Properties Limited (“Dragon”). The Group without Bisichi and Dragon is referred to as LAP Group. GOING CONCERN In reviewing going concern it is necessary to consider separately the position of LAP Group and Bisichi. Although both are consolidated into group accounts (as required by IFRS 10), they are managed independently and in the unlikely event that Bisichi was unable to continue trading this would not affect the ability of LAP Group to continue operating as a going concern. The same would be true for Bisichi in reverse. The directors have reviewed the cash flow forecasts of the LAP Group and the underlying assumptions on which they are based for the 15 months from the date of signing. The LAP Group’s business activities, together with the factors likely to affect its future development, are set out in the Chairman and Chief Executive’s Statement and Financial Review. In addition, note 22 to the financial statements sets out the Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposure to credit risk and liquidity risk. The directors have reviewed the debt covenants on existing loans and the effects that a wide range of property valuation movements would have on these and the Group’s ability to mitigate these effects. Geo-political events in Ukraine and the Middle East are currently having an impact on global energy prices. The imposition of tariffs by the United States is not expected to have any significant direct effect on our operations. Although the outcome of the events in these regions is uncertain, the Directors at present do not foresee the events having a significant negative effect on the Group’s UK and South African operations. Debt Refinancing LAP’s £13.6 million 5-year term loan with QIB (UK) PLC, at a margin of 3.95% above the BoE base rate, expires in 2027. The loan is covenant compliant and the Directors do not consider that this presents a going concern risk to the Group. The loan is repayable in full at any time, with no exit fees. From May 2025, the loan margin will decrease to 2.95% Dragon has a £0.74 million Santander term loan (at 3.5% + bank base rate) that expires on 18 July 2027. The loan is covenant compliant and the Directors do not consider that this presents a going concern risk to the Group. The loan is repayable in full at any time, with no exit fees. Broadway Regen has a £4.9 million 11.0% development loan which expired in January 2025. This is a residential development which is expected to have positive cash returns. Options are currently being explored before any commitment is made to start the construction phase. Cash flow forecasts on which going concern judgements are made include a range of outcomes for this development and the Directors do not consider that this presents a going concern risk to the Group. The lender continues to support our ongoing efforts to develop this property and we expect the loan to be extended to grant sufficient time to enter into a construction contract and refinance the facility. The directors continually monitor the property lending market and will refinance these loans to reduce the interest burden on the Group, provide future funding certainty and manage financial risk. Bisichi PLC The directors note the consideration of going concern by the Bisichi board, but also note that any failure of Bisichi would not itself impact on the going concern status of the LAP group for the reasons set out on page 8 of the financial statements. The directors believe that the LAP Group has adequate resources to continue in operational existence for the foreseeable future and that the LAP Group is well placed to manage its business risks. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements. The Bisichi directors continue to adopt the going concern basis of accounting in preparing the Bisichi annual financial statements. London & Associated Properties PLC 2024 49 FINANCIAL STATEMENTS Group accounting policies INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) The Group has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (“IASB”) that are relevant to its operations and effective for accounting periods beginning 1 January 2024. These include Amendments to IAS 1 for 'Classification of liabilities as current or non-current' and 'Non-current liabilitiues with covenants'; Amendments to IFRS 16 - 'Lease liability in a sale and leaseback'; and Amendments to IAS 7 and IFRS 7 - 'Supplier finance arrangements'. These have had no significant impact on the financial statements of the Group. The Group has not adopted any Standards or Interpretations in advance of the required implementation dates. The following standards, amendments and interpretations were in issue at the date of approval of these financial statements but were not yet effective for the current accounting period and have not been adopted early. Based on the Group’s current circumstances, the Directors do not anticipate that their adoption in future periods will have a material impact on the financial statements of the Group. • Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability • Amendments to IFRS 9 and IFRS 7, Classification and Measurement of Financial Instruments • IFRS 19, Subsidiaries without Public Accountability: Disclosures • IFRS 18, Presentation and disclosure in financial statements IFRS 18 will replace IAS 1 Presentation of financial statements and is effective for annual periods beginning on or after 1 January 2027. IFRS 18 will not impact the recognition or measurement of items in the financial statements, but its impact on presentation and disclosure is expected to be material. Management is currently assessing the detailed implications of applying the new standard on the Group’s consolidated financial statements. We are committed to improving disclosure and transparency and will continue to work with our different stakeholders to ensure they understand the detail of these accounting changes. We continue to remain committed to a robust financial policy . KEY JUDGEMENTS AND ESTIMATES The preparation of the financial statements requires management to make assumptions and estimates that may affect the reported amounts of assets and liabilities and the reported income and expenses, further details of which are set out below. Although management believes that the assumptions and estimates used are reasonable, the actual results may differ from those estimates. Further details of the estimates and judgements which may have a material impact on next year’s financial statements are contained in the Directors’ Report. PROPERTY OPERATIONS Fair value measurements of investment properties An assessment of the fair value of these assets is undertaken annually. The fair value measurements are estimated based on the amounts for which the assets and liabilities could be exchanged between market participants. To the extent possible, the assumptions and inputs used take into account externally verifiable inputs. However, such information is by its nature subject to uncertainty and is discussed further in the Directors’ Report and shown in note 9. Inventories - Property When the Group begins to redevelop an existing investment property with a view to sale, the property is transferred to inventory and held as a current asset. The property is re- measured to fair value as at the date of the transfer with any gain or loss being taken to the income statement. The re-measured amount becomes the deemed cost at which the property is then carried in trading properties plus any costs for asset management initiatives or development in preparation for sale and subject to any provision required to reduce cost to net realisable value. In assessing the net realisable value of a property development, the directors make significant estimates and judgements regarding, inter alia, forecast sales and costs per square foot, gross internal area, affordable housing allocations and appropriate rates of financing. The degree to which these variables can be accurately forecast will depend on the stage of development of the particular project and the impact of changes in these assumptions to the net realisable value could be material. Further detail is included in note 13. The development property in Ealing has been impaired by £900,000 in the year following an assessment of its net realisable value at 31 December 2024. Trade Debtors An estimate of lifetime expected credit losses under IFRS 9 using the simplified approach has been made by the Directors considering historic trade debtor recoveries, specific knowledge of individual debtors and forward looking macro-economic factors. Further detail is included in note 22. MINING OPERATIONS Life of mine and reserves The directors of Bisichi consider their judgements and estimates surrounding the life of the mine and its reserves to have significant effect on the amounts recognised in the financial statements and to be an area where the financial statements are subject to significant estimation uncertainty. The life of mine remaining is currently estimated at 5 years. This life of mine is based on Bisichi’s existing coal reserves including reserves acquired but subject to regulatory approval. Bisichi actively seeks and evaluates new opportunities to extend the life of its existing mining and processing operations in South Africa. The life of mine excludes future coal purchases and coal reserve acquisitions. Bisichi’s estimates of proven and probable reserves are prepared utilising the South African code for the reporting of exploration results, mineral resources and mineral reserves (the SAMREC code) and are subject to assessment by an independent Competent Person experienced in the field of coal geology and specifically opencast and pillar coal extraction. Estimates of coal reserves impact assessments of the carrying value of property, plant and equipment, depreciation calculations and rehabilitation and decommissioning provisions. There are numerous uncertainties inherent in estimating coal reserves and changes to these assumptions may result in restatement of reserves. These assumptions include geotechnical factors as well as economic factors such as commodity prices, production costs, coal demand outlook and yield. DEPRECIATION, AMORTISATION OF MINERAL RIGHTS, MINING DEVELOPMENT COSTS AND PLANT & EQUIPMENT The annual depreciation/amortisation charge is dependent on estimates, including coal reserves and the related life of the mine, expected development expenditure for probable reserves, the allocation of certain assets to relevant ore reserves and estimates of residual values of the processing plant. The charge can fluctuate when there are significant changes in any of the factors or assumptions used, such as estimating mineral reserves which in turn affects the life of mine or the expected life of reserves. Estimates of proven and probable reserves are prepared by an independent Competent Person. Assessments of depreciation/ amortisation rates against the estimated reserve base are performed regularly. Details of the depreciation/amortisation charge can be found in note 10. 50 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Group accounting policies PROVISION FOR MINING REHABILITATION INCLUDING RESTORATION AND DE- COMMISSIONING COSTS A provision for future rehabilitation including restoration and decommissioning costs requires estimates and assumptions to be made around the relevant regulatory framework, the timing, extent and costs of the rehabilitation activities and of the risk free rates used to determine the present value of the future cash outflows. The provisions, including the estimates and assumptions contained therein, are reviewed regularly by management. Bisichi engages an independent expert to assess the cost of restoration and decommissioning annually as part of management’s assessment of the provision. Details of the provision for mining rehabilitation can be found in note 21. MINING IMPAIRMENT Property, plant and equipment representing Bisichi’s mining assets in South Africa are reviewed for impairment at each reporting date. The impairment test is performed using the approved Life of Mine plan and those future cash flow estimates are discounted using asset specific discount rates and are based on expectations about future operations. The impairment test requires estimates about production and sales volumes, commodity prices, proven and probable reserves (as assessed by the Competent Person), operating costs and capital expenditures necessary to extract reserves in the approved Life of Mine plan. Changes in such estimates could impact recoverable values of these assets. Details of the carrying value of property, plant and equipment can be found in note 10. The impairment test indicated significant headroom as at 31 December 2024 and therefore no impairment is considered appropriate. The key assumptions include: coal prices, including domestic coal prices based on recent pricing and assessment of market forecasts for export coal; production based on proven and probable reserves assessed by the independent Competent Person and yields associated with mining areas based on assessments by the Competent Person and empirical data. An 8% reduction in average forecast coal prices or a 5% reduction in yield would give rise to a breakeven scenario. However, the Bisichi directors consider the forecasted yield levels and pricing to be appropriate and supportable best estimates. BASIS OF CONSOLIDATION The Group accounts incorporate the accounts of LAP and all its subsidiary undertakings, together with the Group’s share of the results and net assets of its joint ventures. Non–controlling interests in subsidiaries are presented separately from the equity attributable to equity owners of the parent company. When changes in ownership in a subsidiary do not result in a loss of control, the non–controlling shareholders’ interests are initially measured at the non–controlling interests’ proportionate share of the subsidiaries’ net assets. Subsequent to this, the carrying amount of non–controlling interests is the amount of those interests at initial recognition plus the non–controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed to non–controlling interests even if this results in the non–controlling interests having a deficit balance. SUBSIDIARIES Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries acquired during the year are consolidated using the acquisition method. Their results are incorporated from the date that control passes. All intra Group transactions, balances, income and expenses are eliminated on consolidation. Details of the Group’s subsidiary companies are set out in note 12. The directors are required to consider the implications of IFRS 10 on the LAP investment in Bisichi PLC (“Bisichi”). Related parties also have shareholdings in Bisichi. When combined with the 41.6% held by LAP and, taking account of the wide disposition of other shareholders, there is potential for LAP and these related parties to exercise voting control over Bisichi. IFRS 10 makes it clear that possible voting control is of more significance than actual management control. For this reason the directors have concluded that there is a requirement to consolidate Bisichi with LAP. While, in theory, they could achieve control, in practice they do not get involved in the day to day operations of Bisichi. The directors have presented consolidated accounts using the published accounts of Bisichi but it is important to note that any figures, risks and assumptions attributable to that company are the responsibility of the Bisichi Board of directors. As a result of treating Bisichi as a subsidiary, Dragon Retail Properties Limited and West Ealing Projects Limited are also subsidiaries for accounting purposes, as LAP and Bisichi’s combined ownership in these entities exceeds 50%. As a result of Orchard Square Limited’s term loan being placed in default in August 2023, the Group no longer has control of this entity and as required by IFRS10 it no longer presents the results of Orchard Square Limited. The results of Orchard Square Limited are included until July 2023 at which point control was lost and a disposal of the company is shown. The assets and liabilities of Orchard Square Limited are not shown in the Balance Sheet at the end of the previous or current year. Further disclosure is made within note 6. In 2024 the Orchard Square loan was restated with the lender and is now compliant, with all rights to net income and sale proceeds generated by the asset vesting to the lender. Following an unsuccessful planning application and subsequent appeal by Development Physics Limited the JV partners decided to cease development activities and allow the options over parcels of land to lapse. The company has subsequently been closed. Provisions for the carrying value of the development were made in previous years and the financial effect of the development in 2024, as shown in note 6, is limited. GOODWILL Goodwill arising on acquisition is recognised as an intangible asset and initially measured at cost, being the excess of the cost of the acquired entity over the Group’s interest in the fair value of the assets and liabilities acquired. Goodwill is carried at cost less accumulated impairment losses. Goodwill arising from the difference in the calculation of deferred tax for accounting purposes and fair value in negotiations is judged not to be an asset and is accordingly impaired on completion of the relevant acquisition. PROPERTY REVENUE The Group’s revenue from contracts with customers, as defined under IFRS 15, includes sales of coal and property income from rents, service charge and management fees. Rental income Rental income arises from properties where leases have granted tenants a right of occupation and use of the properties. Rental income and lease incentives are recognised in accordance with IFRS 16 Leases. Rental income from investment property is recognised as revenue on a straight-line basis over the lease term. Lease incentives and costs associated with entering into tenant leases are amortised over the lease term. Rent reviews are recognised when such reviews have been agreed with tenants. London & Associated Properties PLC 2024 51 FINANCIAL STATEMENTS Group accounting policies Changes in the scope or the consideration for a lease, that was not part of the original terms and conditions, which might arise as a result of lease concessions, are accounted as a lease modification. Lease modifications are accounted for as a new lease from the effective date of the modification, considering any prepaid or accrued lease payments relating to the original lease as part of the lease payments for the new lease. Service charge income This includes income in relation to service charges, directly recoverable expenditure and management fees, which is recognised in accordance with IFRS 15. Revenue from providing services is recognised in the accounting period in which the services are rendered. Revenue from services is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided and recognised over time. The Group generally acts as the principal in service charge transactions as it directly controls the delivery of the services at the point they are provided to the tenant. Where the Group acts as a principal, service charge income is presented gross within revenue and service charge expense presented gross within costs. Reverse surrender premiums Payments received from tenants to surrender their lease obligations are recognised immediately in the income statement. Dilapidations Dilapidations monies received from tenants in respect of their lease obligations are recognised immediately in the income statement. Other revenue Revenue in respect of listed investments held for trading represents investment dividends received and profit or loss recognised on realisation. Dividends are recognised in the income statement when the right to receive the payment is established. PROPERTY OPERATING EXPENSES Operating expenses are expensed as incurred and any property operating expenditure not recovered from tenants through service charges is charged to the income statement. EMPLOYEE BENEFITS Share based remuneration The Group operates a long–term incentive plan and two share option schemes. The fair value of the conditional awards on shares granted under the long–term incentive plan and the options granted under the share option scheme is determined at the date of grant. This fair value is then expensed on a straight– line basis over the vesting period, based on an estimate of the number of shares that will eventually vest. At each reporting date, the fair value of the non–market based performance criteria of the long–term incentive plan is recalculated and the expense is revised. In respect of the share option scheme, the fair value of options granted is calculated using the binomial method. PENSIONS The Company operates a defined contribution pension scheme. The contributions payable to the scheme are expensed in the period to which they relate. FOREIGN CURRENCIES Monetary assets and liabilities are translated at year end exchange rates and the resulting exchange rate differences are included in the consolidated income statement within the results of operating activities if arising from trading activities, including inter-company trading balances and within finance cost / income if arising from financing. For consolidation purposes, income and expense items are included in the consolidated income statement at average rates, and assets and liabilities are translated at year end exchange rates. Translation differences arising on consolidation are recognised in other comprehensive income. Foreign exchange differences on intercompany loans are recorded in other comprehensive income when the loans are not considered trading balances and are not expected to be repaid in the foreseeable future. Where foreign operations are sold or closed, the cumulative exchange differences attributable to that foreign operation are recognised in the consolidated income statement when the gain or loss on disposal is recognised. Transactions in foreign currencies are translated at the exchange rate ruling on transaction date. FINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognised in the Group’s consolidated statement of financial position when the group becomes a party to the contractual provisions of the instrument. Financial assets Financial assets are classified as either financial assets at amortised cost, at fair value through other comprehensive income (“FVTOCI”) or at fair value through profit or loss (“FVPL”) depending upon the business model for managing the financial assets and the nature of the contractual cash flow characteristics of the financial asset. A loss allowance for expected credit losses is determined for all financial assets, other than those at FVPL, at the end of each reporting period. The Group applies a simplified approach to measure the credit loss allowance for trade receivables using the lifetime expected credit loss provision. The lifetime expected credit loss is evaluated for each trade receivable taking into account payment history, payments made subsequent to year end and prior to reporting, past default experience and the impact of any other relevant and current observable data. The group applies a general approach on all other receivables classified as financial assets. The general approach recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition. The Group no longer recognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. The Group does not recognise financial liabilities when the Group’s obligations are discharged, cancelled, or have expired. Investments Current financial asset investments and other investments classified as non-current (“The investments”) comprise shares in listed companies. The investments are measured at fair value. Any changes in fair value are recognised in the consolidated income statement and accumulated in retained earnings. Trade and other receivables Trade receivables are recorded at amortised cost. As the interest that would be recognised from discounting future cash payments over the short payment period is not considered to be material, trade receivables which do not carry any interest are stated at their nominal value as reduced by credit loss allowances for estimated recoverable amounts. Trade and other payables Trade and other payables are non-interest bearing and are stated at their nominal value, as the interest that would be recognised from discounting future cash payments over the short payment period is not considered to be material. 52 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Group accounting policies Bank loans and overdrafts Bank loans and overdrafts are included as financial liabilities on the Group balance sheet net of the unamortised costs of issue. The cost of issue is recognised in the consolidated income statement over the life of the bank loan. Interest payable on those facilities is expensed as a finance cost in the period to which it relates. Leases At inception, the Group assesses whether a contract is or contains a lease. This assessment involves the exercise of judgement about whether the Group obtains substantially all the economic benefits from the use of that asset, and whether the Group has the right to direct the use of the asset. The Group recognises a right-of-use (“ROU”) asset and the lease liability at the commencement date of the lease. Lease liabilities include the present value of payments which generally include fixed payments and variable payments that depend on an index (such as an inflation index). Each lease payment is allocated between the liability and finance cost. The lease payments are discounted using the interest rate implicit in the lease if that rate can be readily determined or if not, the incremental borrowing rate is used. The finance cost is charged to profit or loss over the lease period so as to produce a constant rate of interest on the remaining balance of the liability for each period. In the cashflow statement the principal and interest portions of the lease payments are classified within financing activities. The ROU asset is measured at a cost based on the amount of the initial measurement of the lease liability, plus initial direct costs and the cost of obligations to refurbish the asset, less any incentives received. The ROU asset (other than the ROU assets that relate to land or property that meets the definition of investment property under IAS 40) is depreciated over the shorter of the lease term or the useful life of the underlying asset. The ROU asset is subject to testing for impairment if there is an indicator of impairment. ROU assets are included in the heading Property, plant and equipment, and the lease liability is included in the headings current and non-current lease labilities on the balance sheet. Lease liabilities arise for those investment properties held under a leasehold interest and recorded as investment property. The liability is calculated as the present value of the minimum lease payments, reducing in subsequent reporting periods by the apportionment of payments to the lessor. Lease payments are allocated between the liability and finance charges to achieve a constant financing rate. Contingent rents payable, such as rent reviews or those related to rental income, are charged as an expense in the period in which they are incurred. The Group has elected not to recognise ROU assets and liabilities for leases where the total lease term is less than or equal to 12 months, or for low value leases under £20,000. The payments for such leases are recognised in the Income Statement on a straight-line basis over the lease term. Interest rate derivatives The Group uses derivative financial instruments to hedge the interest rate risk associated with the financing of the Group’s business where appropriate. No trading in such financial instruments is undertaken. At each reporting date, these interest rate derivatives are recognised at their fair value to the business, being the Net Present Value of the difference between the hedged rate of interest and the market rate of interest for the remaining period of the hedge. Ordinary shares Shares are classified as equity when there is no obligation to transfer cash or other assets. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. Treasury shares When the Group’s own equity instruments are repurchased, consideration paid is deducted from equity as treasury shares until they are cancelled. When such shares are subsequently sold or reissued, any consideration received is included in equity. INVESTMENT PROPERTIES Valuation Investment properties are those that are held either to earn rental income or for capital appreciation or both, including those that are undergoing redevelopment for future use as an investment property. They are reported on the Group balance sheet at fair value, being the amount for which an investment property could be exchanged between knowledgeable and willing parties in an arm’s length transaction. The directors’ property valuation is at fair value. The external valuation of properties is undertaken by independent valuers who hold recognised and relevant professional qualifications and have recent experience in the locations and categories of properties being valued. Surpluses or deficits resulting from changes in the fair value of investment properties are reported in the Group income statement in the period in which they arise. The Group owns a number of properties on long term and short-term leaseholds. These are leased out to tenants under operating leases, are classified as investment properties or development properties as appropriate and included in the balance sheet at fair value. The obligation to the freeholder or superior leaseholder for the buildings element of the leasehold is included in the balance sheet at the present value of the minimum lease payments at inception. Capital expenditure Investment properties are measured initially at cost, including related transaction costs. Additional expenditure of a capital nature, directly attributable to the redevelopment or refurbishment of an investment property held for future use as an investment property, up to the point of it being completed for its intended use, is capitalised in the carrying value of that property. Where there is a change of use, such as commencement of development with a view to sale, the property is transferred to inventory at deemed cost, which is its fair value on the date of the change in use. Capitalised interest is calculated with reference to the actual rate payable on borrowings for development purposes, or for that part of the development costs financed out of borrowings the capitalised interest is calculated on the basis of the average rate of interest paid on the relevant debt outstanding. Disposal The disposal of investment properties is recorded on completion of the contract. On disposal, any gain or loss is calculated as the difference between the net disposal proceeds and the valuation at the last year end plus subsequent capitalised expenditure in the period. Depreciation and amortisation In applying the fair value model to the measurement of investment properties, depreciation and amortisation are not provided. OTHER ASSETS AND DEPRECIATION The cost, less estimated residual value, of other property, plant and equipment is written off on a straight–line basis over the asset’s expected useful life. Residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Changes to the estimated residual values or useful lives are accounted for prospectively. The depreciation rates generally applied are: Motor vehicles 25–33 per cent per annum Office equipment 10–33 per cent per annum London & Associated Properties PLC 2024 53 FINANCIAL STATEMENTS Group accounting policies ASSETS HELD FOR SALE Non-current assets are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use. Such assets are generally measured at the lower of their carrying amount and fair value less costs of sale. Impairment losses on initial classification as assets held-for- sale and subsequent gains and losses on remeasurement are recognised in profit or loss. Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-accounted investment is no longer equity accounted. INVENTORIES – PROPERTY Properties held as trading inventory are those which are being developed with a view to sale. Inventories are recorded at the lower of cost and net realisable value. If the net realisable value of inventory is lower than its carrying value, an impairment loss is recorded in the income statement. If, in subsequent periods, the net realisable value of inventory that was previously impaired increases above its carrying value, the impairment is reversed to align the carrying value of the property with the net realisable value. Inventory is presented on the balance sheet within current assets. INCOME TAXES The charge for current taxation is based on the results for the year as adjusted for disallowed or non–assessable items. Tax payable upon realisation of revaluation gains recognised in prior periods is recorded as a current tax charge with a release of the associated deferred tax. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the tax computations and is recorded using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. In respect of the deferred tax on the revaluation surplus, this is calculated on the basis of the chargeable gains that would crystallise on the sale of the investment portfolio as at the reporting date. The calculation takes account of indexation on the historic cost of properties and any available capital losses. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the Group income statement, except when it relates to items charged or credited directly to equity, in which case it is also dealt with in equity. DIVIDENDS Dividends payable on the ordinary share capital are recognised as a liability in the period in which they are approved. CASH AND CASH EQUIVALENTS Cash comprises cash in hand and on-demand deposits. Cash and cash equivalents comprise short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and original maturities of three months or less. The cash and cash equivalents shown in the cashflow statement are stated net of bank overdrafts that are repayable on demand in accordance with IAS 7. This includes the structured trade finance facility held in South Africa as detailed in note 22. These facilities are considered to form an integral part of the treasury management of the Group and can fluctuate from positive to negative balances during the period. BISICHI PLC Mining revenue Coal revenue is derived principally from export revenue and domestic revenue. Both export revenue and domestic revenue is recognised when the customer has a legally binding obligation to settle under the terms of the contract when the performance obligations have been satisfied, which is once control of the goods has transferred to the buyer at the delivery point. For export revenue this is generally recognised when the product is delivered to the export terminal location specified in the customer contract, at which point control of the goods have been transferred to the customer. For domestic coal revenues this is generally recognised on collection by the customer from the mine or from the mine’s rail siding when loaded into transport, where the customer pays the transportation costs. Fulfilment costs to satisfy the performance obligations of coal revenues such as transport and loading costs borne by the Group from the mine to the delivery point are recoded in operating costs. Coal revenue is measured based on consideration specified in the contract with a customer on a per metric tonne basis. Both export and domestic contracts are typically on a specified coal volume basis and less than a year in duration. Export contracts are typically linked to the price of Free on Board (FOB) Coal from Richards Bay Coal Terminal (API4 price). Domestic contracts are typically linked to a contractual price agreed. Mining costs Expenditure is recognised in respect of goods and services received. Where coal is purchased from third parties at point of extraction the expenditure is only recognised when the coal is extracted and all of the significant risks and rewards of ownership have been transferred. Mining reserves, plant and equipment The cost of property, plant and equipment comprises its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in accordance with agreed specifications. Freehold land is not depreciated. Other property, plant and equipment is stated at historical cost less accumulated depreciation. The cost recognised includes the recognition of any decommissioning assets related to property, plant and equipment. Heavy surface mining and other plant and equipment is depreciated at varying rates depending upon its expected usage. The depreciation rates generally applied are between 5-10 per cent per annum but limited to the shorter of its useful life or the life of the mine. Other non–current assets, comprising motor vehicles and office equipment, are depreciated at a rate of between 10% and 33% per annum which is calculated to write off the cost, less estimated residual value of the assets, on a straight line basis over their expected useful lives. Mine inventories Inventories are stated at the lower of cost and net realisable value. Cost includes materials, direct labour and overheads relevant to the stage of production. Cost is determined using the weighted average method. Net realisable value is based on estimated selling price less all further costs to completion and all relevant marketing, selling and distribution costs. 54 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Group accounting policies Mine provisions Provisions are recognised when the Group has a present obligation as a result of a past event which it is probable will result in an outflow of economic benefits that can be reliably estimated. A provision for rehabilitation of the mine is initially recorded at present value and the discounting effect is unwound over time as a finance cost. Changes to the provision as a result of changes in estimates are recorded as an increase/decrease in the provision and associated decommissioning asset. The decommissioning asset is depreciated in line with the Group’s depreciation policy over the life of mine. The provision includes the restoration of the underground, opencast, surface operations and de-commissioning of plant and equipment. The timing and final cost of the rehabilitation is uncertain and will depend on the duration of the mine life and the quantities of coal extracted from the reserves. Mine impairment Whenever events or changes in circumstance indicate that the carrying amount of an asset may not be recoverable that asset is reviewed for impairment. This includes mining reserves, plant and equipment and net investments in joint ventures. A review involves determining whether the carrying amounts are in excess of their recoverable amounts. An asset’s recoverable amount is determined as the higher of its fair value less costs of disposal and its value in use. Such reviews are undertaken on an asset-by-asset basis, except where assets do not generate cash flows independent of other assets, in which case the review is undertaken on a cash generating unit basis. If the carrying amount of an asset exceeds its recoverable amount an asset’s carrying value is written down to its estimated recoverable amount (being the higher of the fair value less cost to sell and value in use) if that is less than the asset’s carrying amount. Any change in carrying value is recognised in the comprehensive income statement. Mine reserves and development cost The purpose of mine development is to establish secure working conditions and infrastructure to allow the safe and efficient extraction of recoverable reserves. Depreciation on mine development is not charged until production commences or the assets are put to use. On commencement of full commercial production, depreciation is charged over the life of the associated mine reserves extractable using the asset on a unit of production basis. The unit of production calculation is based on tonnes mined as a ratio to proven and probable reserves and also includes future forecast capital expenditure. The cost recognised includes the recognition of any decommissioning assets related to mine development. Post production stripping In surface mining operations, the Group may find it necessary to remove waste materials to gain access to coal reserves prior to and after production commences. Prior to production commencing, stripping costs are capitalised until the point where the overburden has been removed and access to the coal seam commences. Subsequent to production, waste stripping continues as part of the extraction process as a run of mine activity. There are two benefits accruing to the Group from stripping activity during the production phase: extraction of coal that can be used to produce inventory and improved access to further quantities of material that will be mined in future periods. Economic coal extracted is accounted for as inventory. The production stripping costs relating to improved access to further quantities in future periods are capitalised as a stripping activity asset, if and only if, all of the following are met: • it is probable that the future economic benefit associated with the stripping activity will flow to Bisichi; • Bisichi can identify the component of the ore body for which access has been improved; and • the costs relating to the stripping activity associated with that component or components can be measured reliably. In determining the relevant component of the coal reserve for which access is improved, Bisichi separates its mine into geographically distinct sections or phases to which the stripping activities being undertaken within that component are allocated. Such phases are determined based on assessment of factors such as geology and mine planning. Bisichi depreciates deferred costs capitalised as stripping assets on a unit of production method, with reference to the tons mined and reserve of the relevant ore body component or phase. The cost is recognised within Mine development costs within the balance sheet. SEGMENTAL REPORTING For management reporting purposes, the Group is organised into business segments distinguishable by economic activity. The Group’s business segments are LAP operations, Bisichi operations and Dragon operations. These business segments are subject to risks and returns that are different from those of other business segments and are the primary basis on which the Group reports its segmental information. This is consistent with the way the Group is managed and with the format of the Group’s internal financial reporting. Significant revenue from transactions with any individual customer, which makes up 10 per cent or more of the total revenue of the Group, is separately disclosed within each segment. All coal exports are sales to coal traders at Richard Bay’s terminal in South Africa with the risks and rewards passing to the coal trader at the terminal. Whilst the coal traders will ultimately sell the coal on the international markets the Group has no visibility over the ultimate destination of the coal. Accordingly, the export sales are recorded as South Africa revenue. LAP and its subsidiaries (“the Group”) consist of LAP, all of its subsidiary undertakings, including Bisichi PLC (“Bisichi”) and Dragon Retail Properties Limited (“Dragon”). The Group without Bisichi and Dragon is referred to as LAP Group. London & Associated Properties PLC 2024 55 FINANCIAL STATEMENTS 1. RESULTS FOR THE YEAR AND SEGMENTAL ANALYSIS These operating segments (LAP, Bisichi and Dragon) are each viewed separately and have been so reported below. BUSINESS SEGMENTS 2024 LAP BISICHI DRAGON TOTAL BUSINESS ANALYSIS £’000 £’000 £’000 £’000 Rental income 2,303 1,039 168 3,510 Service charge income 149 191 10 350 Management income from third party properties 34 – – 34 Mining – 51,023 – 51,023 Group Revenue 2,486 52,253 178 54,917 Direct property costs (1,100) (276) (22) (1,398) Impairment of inventory - property (900) – – (900) Direct mining costs – (33,509) – (33,509) Overheads (2,000) (7,523) (52) (9,575) Depreciation (267) (3,975) – (4,242) Operating (loss)/profit (1,781) 6,970 104 5,293 Finance income 92 110 – 202 Finance expenses (1,437) (1,464) (70) (2,971) Result before valuation movements (3,126) 5,616 34 2,524 Other segment items Net increase on revaluation of investment properties 1,525 150 125 1,800 Exchange losses – (23) – (23) Net increase on revaluation of investments held for trading – 68 – 68 Profit on disposal of subsidiary 50 – – 50 Revaluation and other movements 1,575 195 125 1,895 (Loss)/profit for the year before taxation (1,551) 5,811 159 4,419 Segment assets - Non-current assets - property 25,870 10,966 2,155 38,991 - Non-current assets - plant & equipment 832 22,771 – 23,603 - Non-current assets - other – 14,339 – 14,339 - Inventory - property 8,996 – – 8,996 - Current assets - others 1,319 9,844 44 11,207 - Cash & cash equivalents 1,856 1,034 36 2,926 Total assets 38,873 58,954 2,235 100,062 Segment liabilities Borrowings (18,233) (6,124) (735) (25,092) Current liabilities (3,142) (16,620) (226) (19,988) Non-current liabilities (1,692) (2,731) – (4,423) Total liabilities (23,067) (25,475) (961) (49,503) Net assets 15,806 33,479 1,274 50,559 Major customers Customer A – 13,713 – 13,713 Customer B – 8,273 – 8,273 Customer C – 7,608 – 7,608 These customers are for mining revenue in South Africa. UNITED SOUTH 2024 KINGDOM AFRICA TOTAL GEOGRAPHIC ANALYSIS £’000 £’000 £’000 Revenue 4,234 50,683 54,917 Operating (loss)/profit (2,558) 7,851 5,293 Non-current assets excluding investments 39,891 22,703 62,594 Total net assets 38,142 12,417 50,559 Capital expenditure 903 8,160 9,063 FINANCIAL STATEMENTS Notes to the financial statements for the year ended 31 December 2024 56 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 1. RESULTS FOR THE YEAR AND SEGMENTAL ANALYSIS CONTINUED 2023 LAP BISICHI DRAGON TOTAL BUSINESS ANALYSIS £’000 £’000 £’000 £’000 Rental income 3,323 1,051 168 4,542 Service charge income 451 181 6 638 Management income from third party properties 18 – – 18 Mining – 47,985 – 47,985 Group Revenue 3,792 49,217 174 53,183 Direct property costs (1,553) (209) (10) (1,772) Direct mining costs – (38,548) – (38,548) Overheads (2,254) (7,649) (33) (9,936) Depreciation (266) (1,493) (2) (1,761) Operating (loss)/profit (281) 1,318 129 1,166 Finance income 110 222 – 332 Finance expenses (2,094) (1,473) (79) (3,646) Result before valuation movements (2,265) 67 50 (2,148) Other segment items Net (decrease)/increase on revaluation of investment properties (150) 145 – (5) Exchange losses – (158) – (158) Decrease in value of other investments – – (6) (6) Net increase on revaluation of investments held for trading – 759 – 759 Profit on disposal of fixed assets 4 – – 4 Loss on disposal of subsidiary (1,930) – – (1,930) Revaluation and other movements (2,076) 746 (6) (1,336) (Loss)/profit for the year before taxation (4,341) 813 44 (3,484) Segment assets - Non-current assets - property 23,801 10,818 2,030 36,649 - Non-current assets - plant & equipment 268 18,896 – 19,164 - Non-current assets - other – 14,258 – 14,258 - Non-current assets - deferred tax asset 114 318 – 432 - Inventory - property 8,889 – – 8,889 - Current assets - others 1,123 9,490 113 10,726 - Assets held for sale 545 – – 545 - Cash & cash equivalents 3,799 3,123 56 6,978 Total assets 38,539 56,903 2,199 97,641 Segment liabilities Borrowings (17,650) (7,483) (950) (26,083) Current liabilities (3,238) (16,748) (62) (20,048) Non-current liabilities (1,272) (1,925) – (3,197) Total liabilities (22,160) (26,156) (1,012) (49,328) Net assets 16,379 30,747 1,187 48,313 Major customers Customer A – 22,283 – 22,283 Customer B – 10,659 – 10,659 Customer C – 4,854 – 4,854 These customers are for mining revenue in South Africa. UNITED SOUTH 2023 KINGDOM AFRICA TOTAL GEOGRAPHIC ANALYSIS £’000 £’000 £’000 Revenue 5,760 47,423 53,183 Operating (loss)/profit (481) 1,647 1,166 Non-current assets excluding investments 37,086 19,159 56,245 Total net assets 40,747 7,566 48,313 Capital expenditure 81 5,909 5,990 Group revenue is external to the Group and the directors consider that inter segmental revenues are not material. London & Associated Properties PLC 2024 57 FINANCIAL STATEMENTS Notes to the financial statements 2. PROFIT BEFORE TAXATION 2024 2023 £’000 £’000 Profit before taxation is stated after charging/(crediting): Staff costs (see note 27) 9,098 8,860 Depreciation on tangible fixed assets - owned assets 3,990 1,495 Depreciation on tangible fixed assets - right of use 321 266 Exchange gain (24) (158) Inventories recognised as an expense 107 777 Amounts payable to the auditor in respect of both audit and non-audit services Audit services Statutory - Company and consolidation 50 30 Subsidiaries - audited by KR 131 129 Subsidiaries - audited by other auditors 41 40 222 199 Staff costs are included in overheads. No fees were payable to the auditor for non-audit services. 3. DIRECTORS’ EMOLUMENTS 2024 2023 £’000 £’000 Emoluments 1,920 1,890 Defined contribution pension scheme contributions 139 138 2,059 2,028 Sir Michael Heller received £nil (2023: £17,000) as a Director of Bisichi PLC. Mr J A Heller received £9,000 (2023: £9,000) as a Director of Bisichi PLC Mr A R Heller received £1,235,000 (2023: £985,000) as a Director of Bisichi PLC Details of directors’ emoluments and share options are set out in the remuneration report. 4. FINANCE INCOME AND EXPENSES 2024 2023 £’000 £’000 Finance income 202 332 Finance expenses Interest on bank loans and overdrafts (2,019) (2,658) Unwinding of discount (Bisichi) (20) (112) Other loans (769) (705) Interest on lease obligations (163) (171) Total finance expenses (2,971) (3,646) 5. INCOME TAX 2024 2023 £’000 £’000 Current tax Corporation tax on profit of the period 454 1,318 Corporation tax on profit of previous periods 8 – Total current tax 462 1,318 Deferred tax Loss relief (152) (313) Origination of timing differences 228 (131) Revaluation of investment properties 333 124 Accelerated capital allowances 1,140 725 Unredeemed capital reductions (396) (1,416) Total deferred tax (note 23) 1,153 (1,011) Tax on profit on ordinary activities 1,615 307 58 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 5. INCOME TAX CONTINUED Factors affecting tax charge for the year The corporation tax charge differs from the amount which would be due at the effective rate of corporation tax in the United Kingdom of 25 per cent (2023: 23.5 per cent). The differences are explained below: 2024 2023 £’000 £’000 Profit/(loss) for the year before taxation 4,419 (3,484) Taxation at 25 per cent (2023: 23.5 per cent) 1,105 (819) Effects of: Other differences 138 94 Disallowable expenses – 241 Capital gains on disposal 111 - Impairment of Investment – 367 Losses not recognised 288 968 Non-taxable income (155) (224) Changes in fair values of properties not subject to tax (17) (391) Adjustment in respect of prior years 8 – Overseas tax rate 137 71 Income tax charge for the year 1,615 307 Analysis of United Kingdom and overseas tax: United Kingdom tax included above: 2024 2023 £’000 £’000 Current tax – – Deferred tax (391) (86) (391) (86) Overseas tax included above: 2024 2023 £’000 £’000 Corporation tax 454 1,318 Adjustment in respect of prior years 8 – Current tax 462 1,318 Deferred tax 1,544 (925) 2,006 393 Overseas tax is derived from Bisichi’s South African mining operation. The adjustment to tax rate arises due to the tax rate used in the UK for the year of 25% (2023: 23.5%) and the corporation tax rate assessed in South Africa for the year of 27% (2023: 27%). Factors that may affect future tax charges: Based on current capital expenditure plans, the Group expects to continue to be able to claim capital allowances in excess of depreciation in future years, but at a slightly lower level than in the current year. A deferred tax provision has been made for gains on revaluing investment properties. The Finance (no. 2) Act 2017 was substantively enacted on 16 November 2017. This includes a restriction on the utilisation of brought forward tax losses and corporate interest in certain circumstances effective from 1 April 2017. London & Associated Properties PLC 2024 59 FINANCIAL STATEMENTS Notes to the financial statements 6. DISPOSAL OF SUBSIDIARY In December 2024 a decision was made to cease the residential development in Purely, London following the rejection of our planning application appeal. The company, Development Physics Limited, was subsequently closed and the resulting profit of £50,000 within the consolidated accounts of LAP relates to the release of provisions made in previous years. In July 2023 LAP lost effective control of Orchard Square Limited. LAP no longer has exposure, or rights, to variable returns from its involvement with Orchard Square Limited. In accordance with IFRS10, the investment in Orchard Square Limited has been treated as having been relinquished in 2023 and neither the loan nor the asset is shown in the accounts at 31 December 2023 or 2024. The financial results of Orchard Square Limited for 2023 included within these accounts are presented below. None of Orchard Square Limited’s results for 2024 are included within these accounts. In addition to the results of Orchard Square Limited, losses attributable to our ownership of this subsidiary in 2023 are also presented below. As the loan associated with Orchard Square Limited is non-recourse to the LAP Group, there will be no future losses to be attributed to this subsidiary. All potential losses have been fully provided in 2023. Orchard Square Limited has had no effect on the Group results in 2024 other than £16,000 of management fee income for LAP. Result of Orchard Square Limited for the year 2024 2023 £’000 £’000 Gross property income – 1,258 Direct property costs – (646) Net property income – 612 Overheads – (34) Net revenue from property – 578 Net finance expenses – (750) Income tax – (19) Profit before tax attributable to shareholders – (191) Cash flows from Orchard Square Limited 2024 2023 £’000 £’000 Cash flows from operating activities – 474 Cash flows from investing activities – (12) Cash flows from financing activities – (882) Net cash outflow – (420) Summary of assets and liabilities of Orchard Square Limited 2024 2023 £’000 £’000 Inventory - property – 14,750 Trade and other receivables – 262 Cash and cash equivalents – 148 Total assets – 15,160 Current borrowings – (12,654) Trade and other payables – (565) Balances owed to other group companies – (1,317) Total liabilities – (14,536) Net assets – 624 Additional effects of investment in Orchard Square Limited 2024 2023 £000 £000 Loss on disposal of subsidiary – (1,930) This loss on disposal is shown in the consolidated results of the Group for the year and includes a full provision for the net assets of Orchard Square Limited as at 31 July 2023 and a full provision for the intercompany balances between Orchard Square Limited and the LAP Group at 31 December 2023. 60 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 7. DIVIDEND No dividends were paid in the year relating to the current or prior period (2023: Nil) The Directors are not recommending a final dividend for 2024 (2023: Nil). 8. LOSS PER EQUITY SHARE AND NET ASSETS PER EQUITY SHARE Profit/(loss) per equity share has been calculated as follows: 2024 2023 Loss attributable to equity shareholders for the year (£’000) (373) (3,861) Weighted average number of ordinary shares in issue (’000) 85,326 85,326 Loss per equity share (0.44)p (4.52)p Weighted average number of ordinary shares in issue for the purpose of diluted loss per share (’000) 85,326 85,326 Fully diluted loss per share (0.44)p (4.52)p Weighted average number of shares in issue is calculated after excluding treasury shares of 216,715 (2023: 216,715). Net assets per equity share have been calculated as follows: 2024 2023 Net assets attributable to equity shareholders (£’000) 28,085 28,490 Shares in issue (’000) 85,326 85,326 Net assets per equity share 32.91p 33.38p Net assets diluted (£’000) 28,085 28,490 Shares in issue (’000) 85,326 85,326 Diluted net assets per share 32.91p 33.38p 9. INVESTMENT PROPERTIES LEASEHOLD LEASEHOLD OVER 50 UNDER 50 TOTAL FREEHOLD YEARS YEARS £’000 £’000 £’000 £’000 Cost or valuation at 1 January 2024 36,649 29,250 7,224 175 Transfer from assets held for sale (note 11) 545 545 – – Decrease in present value of head leases (3) – (3) – Increase/(decrease) on revaluation 1,800 1,790 30 (20) At 31 December 2024 38,991 31,585 7,251 155 Representing assets stated at: Valuation 37,405 31,585 5,670 150 Present value of head leases 1,586 – 1,581 5 38,991 31,585 7,251 155 At 31 December 2024 38,991 31,585 7,251 155 At 31 December 2023 36,649 29,250 7,224 175 London & Associated Properties PLC 2024 61 FINANCIAL STATEMENTS Notes to the financial statements 9. INVESTMENT PROPERTIES CONTINUED LEASEHOLD LEASEHOLD OVER 50 UNDER 50 TOTAL FREEHOLD YEARS YEARS £’000 £’000 £’000 £’000 Cost or valuation at 1 January 2023 37,162 29,679 7,298 185 Transfer to assets held for sale (note 11) (545) (545) – – Additions 38 – 38 – Decrease in present value of head leases (1) – (1) – Increase/(decrease) on revaluation (5) 116 (111) (10) At 31 December 2023 36,649 29,250 7,224 175 Representing assets stated at: Valuation 35,060 29,250 5,640 170 Present value of head leases 1,589 – 1,584 5 At 31 December 2023 36,649 29,250 7,224 175 The leasehold and freehold properties, excluding the present value of head leases, were valued as at 31 December 2024 by professionally qualified independent firms of chartered surveyors. The valuations were made at fair value. 2024 2023 £’000 £’000 Allsop LLP 26,645 24,450 Carter Towler 10,760 10,610 37,405 35,060 Add: present value of headleases 1,586 1,589 38,991 36,649 At 31 December 2024 investment properties included £1.6 million (2023: £1.6 million) for the head lease liabilities recognised under IFRS 16. In the current year total cash outflow for head leases and other lease liabilities is £0.1 million (2023: £0.1 million). A number of these leases provide for payment of contingent rent, usually a proportion of net rental income, in addition to fixed rents. The historical cost of investment properties, including total capitalised interest of £1,161,000 (2023: £1,161,000) was as follows: 2024 2023 LEASEHOLD LEASEHOLD LEASEHOLD LEASEHOLD OVER 50 UNDER 50 OVER 50 UNDER 50 FREEHOLD YEARS YEARS FREEHOLD YEARS YEARS £’000 £’000 £’000 £’000 £’000 £’000 Cost at 1 January 32,702 9,551 785 33,283 9,551 785 Transfer from/(to) assets held for sale (note 11) 581 – – (581) – – Additions – – – – – – Disposals – – – – – – Cost at 31 December 33,283 9,551 785 32,702 9,551 785 Each year external valuers are appointed by the executive directors on behalf of the Board. The valuers are selected based upon their knowledge, independence and reputation for valuing assets such as those held by the Group. Valuations are performed annually and are performed consistently across all properties in the Group’s portfolio. At each reporting date appropriately qualified employees of the Group verify all significant inputs and review the computational outputs. Valuers submit their report to the Board on the outcome of each valuation. Valuations take into account tenure, lease terms and structural condition. The inputs underlying the valuations include market rent or business profitability, likely incentives offered to tenants, forecast growth rates, yields, EBITDA, discount rates, construction costs including any specific site costs (for example section 106), professional fees, developer’s profit including contingencies, planning and construction timelines, lease regear costs, planning risk and sales prices based on known market transactions for similar properties to those being valued. Valuations are based on what is determined to be the highest and best use. When considering the highest and best use the valuer will consider, on a property by property basis, its actual and potential uses which are physically, legally and financially viable. Where the highest and best use differs from the existing use, the valuer will consider the cost and likelihood of achieving and implementing this change in arriving at the valuation. 62 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 9. INVESTMENT PROPERTIES CONTINUED There are often restrictions on Freehold and Leasehold property which could have a material impact on the realisation of these assets. The most significant of these occur when planning permission or lease extension and renegotiation of use are required or when a credit facility is in place. These restrictions are factored into the property’s valuation by the external valuer. The methods of fair value measurement are classified into a hierarchy based on the reliability of the information used to determine the valuation, as follows: Level 1: valuation based on inputs on quoted market prices in active markets. Level 2: valuation based on inputs other than quoted prices included within level 1 that maximise the use of observable data directly or from market prices or indirectly derived from market prices. Level 3: where one or more significant inputs to valuations are not based on observable market data. CARRYING / CARRYING/ RANGE FAIR VALUE FAIR VALUE (WEIGHTED RANGE CLASS OF PROPERTY 2024 2023 VALUATION KEY UNOBSERVABLE AVERAGE) (WEIGHTED AV- LEVEL 3 £'000 £’000 TECHNIQUE INPUTS 2024 ERAGE) 2023 Freehold – 31,585 29,250 Income capitalisation Estimated Rental £4 - £34 £4 - £34 external valuation Value (£16) (£16) Per sq ft p.a 5.1% - 12.3% 5.3% - 14.3% (8.4%) (9.2%) Equivalent Yield Leasehold over 5,670 5,640 Income capitalisation Estimated Rental £5 - £10 £5 - £10 50 years – Value (£7) (£7) external valuation Per sq ft p.a 5.8% - 23.7% 5.8% - 23.7% (18.3%) (18.6%) Equivalent Yield Leasehold under 50 150 170 Income capitalisation Estimated Rental £5 - £5 £5 - £5 years – Value (£5) (£5) external valuation Per sq ft p.a 37.0% – 37.0% 32.6% – 32.6% (37.0%) (32.6%) Equivalent Yield At 31 December 37,405 35,060 There are interrelationships between all these inputs as they are determined by market conditions. The existence of an increase in more than one input would be to magnify the input on the valuation. The impact on the valuation will be mitigated by the interrelationship of two inputs in opposite directions, for example, an increase in rent may be offset by an increase in yield. The table below illustrates the impact of changes in key unobservable inputs on the carrying / fair value of the Group’s properties. 10% INCREASE OR (DECREASE) ESTIMATED RENTAL VALUE EQUIVALENT YIELD 25 BASIS POINT CONTRACTION OR (EXPANSION) 2024 2023 2024 2023 £'000 £'000 £'000 £'000 Freehold – external valuation 3,156 (3,156) (2,977) 2,977 1,041 (974) 925 (868) Leasehold over 50 years – external valuation 567 (567) (564) 564 100 (96) 99 (96) Leasehold under 50 years – external valuation 15 (15) (17) 17 1 (1) 1 (1) London & Associated Properties PLC 2024 63 FINANCIAL STATEMENTS Notes to the financial statements 10. MINING RESERVES, PLANT AND EQUIPMENT RIGHT OF OFFICE USE ASSET EQUIPMENT MINING MINING - OFFICE AND MOTOR TOTAL RESERVES EQUIPMENT BUILDING VEHICLES £’000 £’000 £’000 £’000 £’000 Cost at 1 January 2024 41,346 2,059 37,861 796 630 Exchange adjustment (663) (29) (628) – (6) Additions 9,063 20 8,135 831 77 Disposals in year (819) – – (750) (69) At 31 December 2024 48,927 2,050 45,368 877 632 Accumulated depreciation at 1 January 2024 22,182 925 20,273 573 411 Exchange adjustment (350) (13) (332) – (5) Charge for the year 4,311 – 3,969 267 75 Disposals in year (819) – – (750) (69) Accumulated depreciation at 31 December 2024 25,324 912 23,910 90 412 Net book value at 31 December 2024 23,603 1,138 21,458 787 220 Cost at 1 January 2023 40,072 2,332 36,291 796 653 Exchange adjustment (4,653) (273) (4,333) – (47) Valuation decrease (6) – – – (6) Additions 5,952 – 5,903 – 49 Disposals (19) – – – (19) Cost at 31 December 2023 41,346 2,059 37,861 796 630 Accumulated depreciation at 1 January 2023 23,144 1,099 21,347 307 391 Exchange adjustment (2,721) (174) (2,517) – (30) Charge for the year 1,761 – 1,443 266 52 Disposals in year (2) – – – (2) Accumulated depreciation at 31 December 2023 22,182 925 20,273 573 411 Net book value at 31 December 2023 19,164 1,134 17,588 223 219 Included in the above line items are right-of-use assets over the following: OFFICE EQUIPMENT MINING OFFICE AND MOTOR TOTAL EQUIPMENT BUILDING VEHICLES £’000 £’000 £’000 £’000 Net book value at 1 January 2024 370 131 208 31 Additions 930 27 831 72 Disposals (25) (3) – (22) Depreciation (321) (34) (252) (35) Net book value at 31 December 2024 954 121 787 46 Net book value at 1 January 2023 664 186 457 21 Exchange adjustment 27 - - 27 Revaluation (26) (26) - - Depreciation (295) (29) (249) (17) Net book value at 31 December 2023 370 131 208 31 11. ASSETS HELD FOR SALE 2024 2023 £’000 £’000 At 1 January 545 – Transfer (to)/from investment property (note 9) (545) 545 At 31 December – 545 A decision to sell a retail and residential property in Rugeley was made in 2023. The property failed to achieve the expected value at auction and has subsequently been reclassified as investment property in 2024. 64 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 12. SUBSIDIARY COMPANIES In accordance with Section 409 of the Companies Act 2006 a full list of subsidiaries, the principal activity, the country of incorporation and the percentage of equity owned, as at 31 December 2024 is disclosed below: PERCENTAGE OF SHARE COUNTRY OF ENTITY ACTIVITY CAPITAL REGISTERED ADDRESS INCORPORATION Analytical Properties Holdings Limited * Property 100% 12 Little Portland Street, London England and Wales W1W 8BJ Analytical Properties Limited Property 100% 12 Little Portland Street, London England and Wales W1W 8BJ LAP Ocean Holdings Limited * Property 100% 12 Little Portland Street, London England and Wales W1W 8BJ London & Associated (Rugeley) Limited Dormant 100% 12 Little Portland Street, London England and Wales W1W 8BJ London & Associated Securities Limited Investment 100% 12 Little Portland Street, London England and Wales company W1W 8BJ London & Associated Management Services Property 100% 12 Little Portland Street, London England and Wales Limited * Management W1W 8BJ Services Orchard Chambers Residential Limited Property 100% 12 Little Portland Street, London England and Wales W1W 8BJ Bisichi PLC (note C) Coal mining 41.602% 12 Little Portland Street, London England and Wales W1W 8BJ Mineral Products Limited (notes A, C) Share dealing 100% 12 Little Portland Street, London England and Wales W1W 8BJ Bisichi (Properties) Limited (notes A, C) Property 100% 12 Little Portland Street, London England and Wales W1W 8BJ Bisichi Mining (Exploration) Limited (notes A, C) Holding 100% 12 Little Portland Street, London England and Wales company W1W 8BJ Sisonke Coal Processing (pty) Limited (notes Coal 62.5% Samora Machel Street, Bethal South Africa A, C) processing Road, Middelburg, Mpumalanga, 1050 Black Wattle Colliery (Pty) Limited (notes A, C) Coal mining 62.5% Samora Machel Street, Bethal South Africa Road, Middelburg, Mpumalanga, 1050 Bisichi Coal Mining (Pty) Limited (notes A, C) Coal mining 100% Samora Machel Street, Bethal South Africa Road, Middelburg, Mpumalanga, 1050 Urban First (Northampton) Limited (notes A, C) Dormant 100% 12 Little Portland Street, London England and Wales W1W 8BJ Bisichi Trustee Limited (notes A, C) Property 100% 12 Little Portland Street, London England and Wales W1W 8BJ Bisichi Mining Management Services Limited Dormant 100% 12 Little Portland Street, London England and Wales (notes A, C) W1W 8BJ Ninghi Marketing Limited (notes A, C) Dormant 90.1% 12 Little Portland Street, London England and Wales W1W 8BJ Bisichi Northampton Limited (notes A, C) Property 100% 12 Little Portland Street, London England and Wales W1W 8BJ Amandla Ehtu Mineral Resource Development Dormant 70% Samora Machel Street, Bethal South Africa (Pty) Limited (notes A, C) Road, Middelburg, Mpumalanga, 1050 Black Wattle Klipfontein (Pty) Limited (notes A, C) Road, Middelburg, Mpumalanga, Coal mining 62.5% Samora Machel Street, Bethal South Africa 1050 Dragon Retail Properties Limited (notes B, C) Property 50% 12 Little Portland Street, London England and Wales W1W 8BJ West Ealing Projects Limited (notes B, C) Property 50% 12 Little Portland Street, London England and Wales W1W 8BJ Broadway Regen Limited (notes C, D) Property 90% 73 Cornhill, London, EC3V 3QQ England and Wales Details on the non–controlling interest in subsidiaries are shown under note 25. Companies shown as Dormant and those marked with an asterisk () are exempt from audit by virtue of s479A Companies Act 2006. Note A: these companies are owned by Bisichi and the equity shareholdings disclosed relate to that company. Note B: this entity is a joint venture owned 50% by LAP and 50% by Bisichi. Note C: Bisichi, Dragon, West Ealing Projects and their subsidiaries are included in the consolidated financial statements in accordance with IFRS 10. Note D: This company is 90% owned by West Ealing Projects Limited and the equity shareholdings disclosed relate to that company. London & Associated Properties PLC 2024 65 FINANCIAL STATEMENTS Notes to the financial statements 13. INVENTORIES - PROPERTY Development land and infrastructure: 2024 2023 £’000 £’000 At 1 January 8,889 22,862 Capitalised expenditure 545 360 Capitalised interest 462 417 Impairment (900) - Disposal – (14,750) At 31 December 8,996 8,889 The net realisable value of developments is assessed by the directors and is subject to key estimates made in respect of future sales prices and build costs. Variations in these assumptions can have significant effects on the net realisable value of developments. In 2018 the Group acquired a development property through West Ealing Projects Limited a 50:50 joint venture with Bisichi. This property is held at cost of £8.996 million (2023: £8.889 million) and is currently being developed for sale. At 31 December 2024, the development has been impaired by £900,000 to reflect the Director’s assessment of the projects current Net Present Value. In 2021 the group acquired an option over a residential development opportunity in Purley, London through a joint venture held 33:33:33 with Bisichi and an external partner. Following an unsuccessful planning application and appeal, a decision was made not to progress this development and the associated companies were dissolved. The Group disposed of its interest in the Orchard Square, Sheffield development property in 2023. Note 6 explains this in more detail, including its financial effect. 14. INVENTORIES - MINING 2024 2023 £’000 £’000 Coal Washed 2,334 1,949 Mining production 1,022 542 Work in progress – 85 Other 21 3 3,377 2,579 15. INVESTMENTS HELD AS NON-CURRENT ASSETS 2024 2023 TOTAL TOTAL £’000 £’000 At 1 January 14,258 12,590 Additions 5,143 1,189 Gain 174 856 Disposals (5,236) (377) At 31 December 14,339 14,258 The non-current asset investments belong to Bisichi and comprise Level 1 hierarchy: 2024 2023 £’000 £’000 Unquoted investments 1,451 – Market value of readily realisable investments listed on stock exchanges in the United Kingdom 3,115 6,843 Market value of readily realisable investments listed on overseas stock exchanges 9,773 7,415 14,339 14,258 Dividend income from investments held as non-current assets was £308,000 (2023: £501,000) for the year. 16. TRADE AND OTHER RECEIVABLES 2024 2023 £’000 £’000 Trade receivables 5,323 4,695 Other receivables 1,500 2,285 Prepayments and accrued income 379 433 7,202 7,413 Note 22 details the group’s credit risk management and loss allowances held for trade receivables. 66 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 17. INVESTMENTS IN LISTED SECURITIES HELD AT FVPL 2024 2023 £’000 £’000 Market value of listed investments: Listed in Great Britain 628 618 Listed outside Great Britain – 116 628 734 Original cost of listed investments 661 760 Unrealised deficit of market value versus cost (33) (26) The investments in listed securities held at FVPL belong to Bisichi and the market value of listed investments is derived from their quoted share price on public markets (Level 1 hierarchy). 18. TRADE AND OTHER PAYABLES 2024 2023 £’000 £’000 Trade payables 10,339 8,752 Other taxation and social security costs 105 118 Other payables 3,046 3,563 Accruals and deferred income 2,258 2,030 15,748 14,463 The directors consider that the carrying amount of trade and other payables approximates to their fair value. 19. BORROWINGS 2024 2024 2023 2023 £’000 £’000 £’000 £’000 CURRENT NON-CURRENT CURRENT NON-CURRENT Other loans (Bisichi) 8 13 7 22 £0.74 million term bank loan (secured) repayable by 2027 (Dragon) 20 715 950 – Bank overdrafts (secured) (Bisichi) 2,258 – 3,534 – £0.04 million term loan (unsecured) repayable by 2026 8 5 8 12 £3.96 million term bank loan (secured) repayable by 2029 (Bisichi) – 3,845 3,920 – £4.4 million term loan (secured) - repayable by 2024 (Broadway Regen) 4,869 – 4,373 – £13.60 million term bank loan (secured) repayable by 2027 – 13,351 – 13,257 7,163 17,929 12,792 13,291 Borrowings analysis by origin: 2024 2023 £’000 £’000 United Kingdom 22,812 22,520 South Africa 2,280 3,563 25,092 26,083 * Shown after deduction of un-amortised issue costs. Unless stated otherwise in the table above, interest payable on the term bank loans is variable based upon the relevant bank’s base rate, the Bank of England base rate or the Sterling Overnight Index Average (SONIA). No banking covenants were breached by the group during the year. The £13.6 million term loan was taken out in August 2022 with QIB (UK) plc and is secured on specific freehold and leasehold properties, with a secondary charge of £2 million over the assets of LAP the company. The loan has an interest rate of 3.95% above the Bank of England base rate. This loan is covenant compliant. The margin reduces to 2.95% from May 2025, for the remainder of the loan period. In South Africa, an R85million trade facility is held with Absa Bank Limited by Sisonke Coal Processing (Pty) Limited (“Sisonke Coal Processing”) to cover the working capital requirements of the Group’s South African operations. The interest cost of the loan is at the South African prime lending rate plus 3.8% The facility is renewable annually, is repayable on demand and is secured by way of a first charge over specific pieces of mining equipment, inventory and the debtors of the relevant company which holds the loan which are included in the financial statements at a value of £10,008,178 (2023: £9,373,603). All banking covenants were either adhered to or waived by Absa Bank Limited during the year. Bisichi entered into a £3.9 million term loan facility with Julian Hodge Bank Limited during the year. The debt package has a five-year term and is repayable in December 2029. The interest cost of the loan is 4.00% above the Bank of England base rate. The loan is secured by way of a first charge over Bisichi’s UK investment properties which are included in the financial statements at a value of £10,760,000 (2023: £10,610,000). London & Associated Properties PLC 2024 67 FINANCIAL STATEMENTS Notes to the financial statements 19. BORROWINGS CONTINUED Dragon entered into a new £0.74 million loan with Santander during the year. The loan is repayable in April 2027 and is secured by way of a first charge on specific freehold property which is included in the financial statements at a value of £2.2 million. The interest cost of the loan is 3.5 per cent above the bank’s base rate. The bank loan of £4.9 million (Broadway Regen) which is repayable in January 2025, is secured by way of a first charge on a specific freehold development property, which is included in the financial statements at £9.0 million. The interest cost of the loan is fixed at 11.0% per annum. The lender continues to support this development as we progress towards construction start at which point the current loan will be repaid. The Group’s objectives when managing capital are: • To safeguard the Group’s ability to continue as a going concern, so that it may provide returns for shareholders and benefits for other stakeholders; and • To provide adequate returns to shareholders by ensuring returns are commensurate with the risk. Analysis of the changes in liabilities arising from financing activities: 2024 2024 2023 2023 £’000 £’000 £’000 £’000 BANK LEASE BANK BOR- LEASE BORROWINGS OBLIGATIONS ROWINGS OBLIGATIONS Balance at 1 January 26,083 1,976 39,174 2,253 Exchange adjustments (39) (2) (453) (24) Cash movements excluding exchange adjustments (1,047) (329) (138) (290) Additions – 929 (12,654) – Valuation movements 95 (1) 154 37 Balance at 31 December 25,092 2,573 26,083 1,976 20. LEASE LIABILITIES 2024 HEAD LEASES ON 2024 INVESTMENT 2024 2024 2023 TOTAL PROPERTY 1 OFFICE OTHER TOTAL £’000 £’000 £’000 £’000 £’000 Minimum lease payments fall due: Within one year 518 122 323 73 410 Second to fifth year 1,227 485 594 148 622 After five years 9,888 9,888 - - 10,038 11,633 10,495 917 221 11,070 Future finance charges on lease liabilities (9,060) (8,909) (126) (25) (9,094) Present value of lease liabilities 2,573 1,586 791 196 1,976 Present value of lease liabilities: Within one year 439 121 257 61 394 Second to fifth year 1,106 437 534 135 547 After five years 1,028 1,028 - - 1,035 2,573 1,586 791 196 1,976 1 Many head leases on investment properties provide for contingent rent in addition to the rents above, usually a proportion of rental income. Lease liabilities greater than one year are £2,134,000 (2023: £1,582,000). Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default. 21. PROVISIONS 2024 2023 £’000 £’000 At 1 January 1,615 1,716 Exchange adjustment (44) (213) Unwinding of discount 19 112 At 31 December 1,590 1,615 The above provision relates to mine rehabilitation costs in Bisichi . 68 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 22. FINANCIAL INSTRUMENTS Total financial assets and liabilities The Group’s financial assets and liabilities and their fair values are as follows: 2024 2023 FAIR CARRYING FAIR CARRYING VALUE VALUE VALUE VALUE £’000 £’000 £’000 £’000 Cash and cash equivalents 2,926 2,926 6,978 6,978 Investments - non-current assets 14,339 14,339 14,258 14,258 Investments - current assets 628 628 734 734 Trade and other receivables 9,052 9,052 8,889 8,889 Other assets 6,919 6,919 6,875 6,875 Bank overdrafts (2,258) (2,258) (3,534) (3,534) Bank loans (22,856) (22,834) (22,571) (22,549) Lease liabilities (2,573) (2,573) (1,976) (1,976) Other liabilities (13,385) (13,385) (12,315) (12,315) Total financial liabilities before debentures (7,208) (7,186) (2,662) (2,640) Treasury policy The Group enters derivative transactions such as interest rate swaps and forward exchange contracts in order to help manage the financial risks arising from the Group’s activities. The main risks arising from the Group’s financing structure are interest rate risk, liquidity risk, market price risk, credit risk, commodity price risk and foreign exchange risk. The policies for managing each of these risks and the principal effects of these policies on the results are summarised below. Sensitivity analysis The Group has no variable interest term debts which are covered by derivatives. At 31 December 2024, with other variables unchanged, a 1% increase in interest rates would change the profit/loss for the year by £218,000 (2023: £220,000). Interest rate risk Treasury activities take place under procedures and policies approved and monitored by the Board to minimise the financial risk faced by the Group. The £13.6 million bank loan is secured by way of first charge on specific freehold and leasehold properties. The rates of interest vary based on Bank of England base rate in the UK. The Bisichi United Kingdom bank loan is secured by way of a first charge on their UK retail property portfolio. The rates of interest vary based on Bank of England base rate in the UK. The Bisichi South African bank loans and overdraft are secured by way of a first charge over specific pieces of mining equipment, inventory, debtors and cash of the relevant company which holds the loan. The rates of interest vary based on PRIME in South Africa. The £0.74 million bank loan (Dragon) is secured by way of a first charge on specific freehold property. The rate of interest varies based on the bank’s base rate. The £4.9 million bank loan (Broadway Regen) is secured by way of first charge on a specific freehold development property. This loan is based on a fixed interest rate of 11.0% . Liquidity risk The Group’s policy is to minimise refinancing risk by balancing its exposure to interest risk and to refinancing risk. In effect the Group seeks to borrow for as long as possible at the lowest acceptable cost. Efficient treasury management and strict credit control minimise the costs and risks associated with this policy which ensures that funds are available to meet commitments as they fall due. Cash and cash equivalents earn interest at rates based on banks’ base rates in the UK. The cash resources and funding facilities together are considered adequate to meet the Group’s anticipated cash flow requirements for the foreseeable future. The £13.6 million bank loan with QIB (UK) plc is secured against properties within LAP’s retail and industrial portfolio. The debt package has a five-year term and is repayable in 2027. The interest cost of the loan is 3.95% above the Bank of England base rate in the UK reducing to 2.95% above base rate in May 2025. In South Africa, a R85million trade facility is held with Absa Bank Limited by Sisonke Coal Processing (Pty) Limited (“Sisonke Coal Processing”) in order to cover the working capital requirements of Bisichi’s South African operations. The interest cost of the loan is at the South African prime lending rate plus 3.8% The facility is renewable annually each January, is repayable on demand and is secured against inventory, debtors and cash that are held by Sisonke Coal Processing (Pty) Limited. The facility is included in cash and cash equivalents within the cashflow statement. Bisichi holds a £3.96 million term loan facility with Julian Hodge Bank Limited. The loan is secured against Bisichi’s UK retail property portfolio. The debt package has a five-year term and is repayable at the end of the term in December 2029. The interest cost of the loan is 4.00% above the Bank of England base rate. Bisichi intends to renew or refinance the loan prior to the end of its term. The table below analyses the Group’s financial liabilities (excluding interest rate derivatives) into maturity groupings and also provides details of the liabilities that bear interest at fixed, floating and non–interest bearing rates. London & Associated Properties PLC 2024 69 FINANCIAL STATEMENTS Notes to the financial statements 22. FINANCIAL INSTRUMENTS CONTINUED 2024 LESS THAN 2-5 YEARS OVER TOTAL 1 YEAR 5 YEARS £’000 £’000 £’000 £’000 Bank overdrafts (floating) 2,258 2,258 – – Bank loans (fixed) 4,882 4,877 5 – Bank loans (floating) 18,314 28 18,286 – Lease liabilities 11,633 518 1,227 9,888 Trade and other payables (non-interest) 13,385 13,385 – – 50,472 21,066 19,518 9,888 2023 LESS THAN 2-5 YEARS OVER TOTAL 1 YEAR 5 YEARS £’000 £’000 £’000 £’000 Bank overdrafts (floating) 3,534 3,534 – – Bank loans (fixed) 4,393 4,381 12 – Bank loans (floating) 14,617 957 13,660 – Lease liabilities 11,070 410 622 10,038 Trade and other payables (non-interest) 12,315 12,315 – – 45,929 21,597 14,294 10,038 The Group would normally expect that sufficient cash is generated in the operating cycle to meet the contractual cash flows as disclosed above through effective cash management. Market price risk The Group is exposed to market price risk through interest rate and currency fluctuations. Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group is mainly exposed to credit risk on its cash and cash equivalents, trade and other receivables. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet which at year end amounted to £24,716,000 (2023: £27,671,000). To mitigate risk on its cash and cash equivalents, the group only deposits surplus cash with well-established financial institutions of high-quality credit standing. The Group’s credit risk is primarily attributable to its trade receivables. Ageing of past due gross trade receivables and the carrying amount net of loss allowances is set out below. 2024 2023 GROSS LOSS ALLOW- NET CARRYING GROSS LOSS ALLOW- NET CARRYING AMOUNT ANCE AMOUNT AMOUNT ANCE AMOUNT £’000 £’000 £’000 £’000 £’000 £’000 0-30 days 5,112 - 5,112 3,433 (308) 3,125 30-60 days 9 (4) 5 - - - 60-90 days 13 (4) 9 9 (3) 6 90+ days 726 (529) 197 489 (205) 284 Total 5,860 (537) 5,323 3,931 (516) 3,415 Being: Mining 4,668 - 4,668 2,951 (301) 2,650 Property 1,192 (537) 655 980 (215) 765 5,860 (537) 5,323 3,931 (516) 3,415 Gross trade receivables mainly consist of amounts invoiced for rent, service charge and management fees and the sales of coal and all are inclusive of VAT and form part of Revenue (see note 1). Trade receivables are presented in the balance sheet net of loss allowances. The Group applies the IFRS 9 simplified approach to measuring expected credit losses (ECLs) which uses a lifetime expected loss allowance for all trade receivables. Expected loss rates are based on the historic credit loss experienced and adjusted for current and forward information affecting the ability of the individual customers to settle receivables. Trade receivables are written off when there is no reasonable expectation of recovery. In determining the ECLs an analysis of various factors has been performed on a customer by customer basis and it considers the impact of economic conditions. These factors include an assessment of the customer’s default risk based on: industry and geographic location; and payment record, which includes how many days past due the receivable is, payment concessions granted and credit rating. ECLs are recognised net of securities held for the customer. 70 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 22. FINANCIAL INSTRUMENTS CONTINUED Potential customers are evaluated for creditworthiness and where necessary collateral is secured. There is no concentration of credit risk within the lease portfolio to either business sector or individual company as the Group has a diverse customer base with no one customer accounting for more than three per cent of property rental income. The loss allowances for trade receivables as at 31 December reconcile to the opening allowances as follows: 2024 2023 £’000 £’000 Opening loss allowance at 1 January 516 426 Increase in loan loss allowance recognised in profit and loss during the year 337 341 Receivables written off during the year as uncollectable (315) (251) Closing loss allowance at 31 December 538 516 As at 31 December 2024, the Group held a loss allowance provision for trade receivables of £538,000 (2023: £516,000) and the impairment risk remains low with the loss allowance of £538,000 representing 1.0% of total income for the year (2023: 1.0%). The loss allowance at 31 December 2024 relating to property income is 537,000 (2023: £215,000) representing 13.8% of gross property income in the year (2023: 4.1%). Three larger tenant failures in 2024 contributed £282,000 of the total loss allowance at 31 December 2024. These were all long standing tenants. Customers’ credit ratings are reviewed regularly. The Group’s review includes measures such as the use of external ratings and establishing purchase limits for each customer. The Group exposure to credit risk on its other receivables is mitigated through ongoing review of the underlying performance and resources of the counterparty including evaluation of different scenarios of probability of default and expected loss applicable to each of the underlying balances. Foreign exchange risk Only Bisichi is subject to this risk. All trading is undertaken in the local currencies except for certain export sales which are invoiced in US Dollars. It is not the Bisichi Group’s policy to obtain forward contracts to mitigate foreign exchange risk on these contracts as payment terms are within 15 days of invoice or earlier. Funding is also in local currencies other than inter-company investments and loans and it is also not the Bisichi Group’s policy to obtain forward contracts to mitigate foreign exchange risk on these amounts. During 2024 and 2023 the Bisichi Group did not hedge its exposure of foreign investments held in foreign currencies. The principal currency risk to which the Bisichi Group is exposed in regard to inter-company balances is the exchange rate between Pounds Sterling and South African Rand. It arises as a result of the retranslation of Rand denominated inter-company trade receivable balances held within the UK which are payable by South African Rand functional currency subsidiaries. Based on Bisichi’s net financial assets and liabilities at 31 December 2024, a 25% strengthening of Sterling against the South African Rand, with all other variables held constant, would decrease the Bisichi Group’s profit after taxation by £231,000 (2023: £280,000). A 25% weakening of Sterling against the South African Rand, with all other variables held constant would increase the Bisichi Group’s profit after taxation by £386,000 (2023: £466,000). The 25% sensitivity has been determined based on the average historic volatility of the exchange rate. The table below shows the Bisichi currency profiles of cash and cash equivalents: 2024 2023 £’000 £’000 Sterling 297 1,570 South African Rand 874 1,109 US Dollar 4 563 1,175 3,242 Cash and cash equivalents earn interest based on Bank of England rates in Sterling and Prime in Rand. The tables below show the Bisichi currency profiles of net monetary assets and liabilities by functional currency: UK SOUTH AFRICA 2024: £'000 £'000 Sterling 8,916 - South African Rand 1 (11.283) US Dollar 3,201 - 12,118 (11,283) UK SOUTH AFRICA 2023: £'000 £'000 Sterling 12,082 - South African Rand 40 (12,583) US Dollar 2,095 - 14,217 (12,583) London & Associated Properties PLC 2024 71 FINANCIAL STATEMENTS Notes to the financial statements 22. FINANCIAL INSTRUMENTS CONTINUED Borrowing facilities At 31 December 2024 the Group was within its bank borrowing facilities and was not in breach of any of the covenants. Term loan repayments are as set out at the end of this note. Details of other financial liabilities are shown in notes 18, 19 and 20. Interest rate and hedge profile 2024 2023 £’000 £’000 Fixed rate borrowings 4,882 4,393 Floating rate borrowings – Other borrowings 20,210 17,770 25,092 22,163 Average fixed interest rate 10.98% 10.96% Weighted average cost of debt on overdrafts, bank loans and debentures 10.09% 10.34% Average period for which borrowing rate is fixed 0.1 years 0.3 years The Group’s floating rate borrowings bear interest based on Bank of England base rate. Fair value of financial instruments Fair value estimation The Group has adopted the amendment to IFRS 7 for financial instruments that are measured in the balance sheet at fair value. This requires the methods of fair value measurement to be classified into a hierarchy based on the reliability of the information used to determine the valuation, as follows: • Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). • Inputs other than quoted 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). • Inputs for the asset or liability that are not based on observable market data (that is unobservable inputs) (level 3). 2024 GAIN/(LOSS) TO INCOME LEVEL 1 LEVEL 2 LEVEL 3 TOTAL STATEMENT £’000 £’000 £’000 £’000 £’000 Financial assets Quoted equities – non-current assets 14,339 – – 14,339 174 Quoted equities – current assets 628 – – 628 (33) Financial liabilities Interest rate swaps – – – – – 2023 GAIN/(LOSS) TO INCOME LEVEL 1 LEVEL 2 LEVEL 3 TOTAL STATEMENT £’000 £’000 £’000 £’000 £’000 Financial assets Quoted equities – non-current assets 14,258 – – 14,258 856 Quoted equities – current assets 734 – – 734 (26) Capital structure The Group sets the amount of capital in proportion to risk. It ensures that the capital structure is commensurate to the economic conditions and risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may vary the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group considers its capital to include share capital, share premium, capital redemption reserve, translation reserve and retained earnings, but excluding the interest rate derivatives. Consistent with others in the industry, the Group monitors its capital by its debt to equity ratio (gearing levels). This is calculated as the net debt (loans less cash and cash equivalents) as a percentage of the equity calculated as follows: 2024 2023 £’000 £’000 Total debt 27,665 28,060 Less cash and cash equivalents (2,926) (6,978) Net debt 24,739 21,082 Total equity 50,559 48,313 48.9% 43.6% The Group does not have any externally imposed capital requirements. Following the introduction of IFRS 16 total debt includes lease liabilities. 72 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 22. FINANCIAL INSTRUMENTS CONTINUED FINANCIAL ASSETS The Group’s principal financial assets are bank balances and cash, trade and other receivables, investments and assets held for sale. The Group has no significant concentration of credit risk as exposure is spread over a large number of counterparties and customers. The credit risk in liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit–rating agencies. The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables, estimated by the Group’s management based on prior experience and the current economic environment. FINANCIAL ASSETS MATURITY Cash and cash equivalents all have a maturity of less than three months. 2024 2023 £’000 £’000 Cash at bank and in hand 2,926 6,978 These funds are primarily invested in short term bank deposits maturing within one year bearing interest at the bank’s variable rates. Financial liabilities maturity The following table sets out the maturity profile of contractual undiscounted cashflows of financial liabilities as at 31 December: Repayment of borrowings 2024 2023 £’000 £’000 Bank loans and overdrafts: Repayable on demand or within one year 7,163 8,873 Repayable between two and five years 17,929 17,211 25,092 26,084 Certain borrowing agreements contain financial and other conditions that if contravened by the Group, could alter the repayment profile. 23. DEFERRED TAX (LIABILITY) / ASSET 2024 2023 £’000 £’000 Balance at 1 January 432 (752) Transferred to consolidated income statement (1,153) 1,011 Exchange adjustment 22 173 Balance at 31 December (699) 432 The deferred tax balance comprises the following: Revaluation of properties (1,598) (1,265) Accelerated capital allowances (5,626) (4,558) Short-term timing differences 319 560 Unredeemed capital deductions 3,024 2,665 Losses and other deductions 3,182 3,030 Deferred tax (liability) / asset at end of year: (699) 432 There is no time limit in respect of the Group tax loss relief. In addition, the Group has unused losses and reliefs with a potential value of £10,991,000 (2023: £12,345,000), which have not been recognised as a deferred tax asset. As the Group returns to profit, these losses and reliefs can be utilised. The valuation of losses is based on a 25% tax rate (2023: 25%). 24. SHARE CAPITAL The Company has one class of ordinary shares which carry no right to fixed income. NUMBER OF NUMBER OF ORDINARY 10P ORDINARY 10P SHARES SHARES 2024 2023 2024 2023 £’000 £’000 Authorised: ordinary shares of 10p each 110,000,000 110,000,000 11,000 11,000 Allotted, issued and fully paid share capital 85,542,711 85,542,711 8,554 8,554 Less: held in Treasury (see below) (216,715) (216,715) (22) (22) “Issued share capital” for reporting purposes 85,325,996 85,325,996 8,532 8,532 FINANCIAL STATEMENTS Notes to the financial statements FINANCIAL STATEMENTS Notes to the financial statements 24. SHARE CAPITAL CONTINUED Treasury shares NUMBER OF ORDINARY 10P SHARES COST / ISSUE VALUE 2024 2023 2024 2023 £’000 £’000 Shares held in Treasury at 1 January 216,715 216,715 144 144 Shares held in Treasury at 31 December 216,715 216,715 144 144 Share Option Schemes Employees’ share option scheme (Approved scheme) At 31 December 2024 there were no options to subscribe for ordinary shares outstanding, issued under the terms of the Employees’ Share Option Scheme. This share option scheme was approved by members in 1986 and has been approved by His Majesty’s Revenue and Customs (HMRC). There are no performance criteria for the exercise of options under the Approved scheme, as this was set up before such requirements were considered to be necessary. A summary of the shares allocated and options issued under the scheme up to 31 December 2024 is as follows: CHANGES DURING THE YEAR AT 1 AT 31 JANUARY OPTIONS OPTIONS OPTIONS DECEMBER 2024 EXERCISED GRANTED LAPSED 2024 Shares issued to date 2,367,604 – – – 2,367,604 Shares allocated over which options have not been granted 1,549,955 – – – 1,549,955 Total shares allocated for issue to employees under the scheme 3,917,559 – – – 3,917,559 Non–approved Executive Share Option Scheme (Unapproved scheme) A share option scheme known as the “Non–approved Executive Share Option Scheme” which does not have HMRC approval was set up during 2000. At 31 December 2024 there were no options to subscribe for ordinary shares outstanding. The exercise of options under the Unapproved scheme is subject to the satisfaction of objective performance conditions specified by the remuneration committee which conforms to institutional shareholder guidelines and best practice provisions. A summary of the shares allocated and options issued under the scheme up to 31 December 2024 is as follows: CHANGES DURING THE YEAR AT 1 AT 31 JANUARY OPTIONS OPTIONS OPTIONS DECEMBER 2024 EXERCISED GRANTED LAPSED 2024 Shares issued to date 450,000 – – – 450,000 Shares allocated over which options have not yet been granted 550,000 – – – 550,000 Total shares allocated for issue to employees under the scheme 1,000,000 – – – 1,000,000 The Bisichi PLC Unapproved Option Schemes Details of the share option schemes in Bisichi are as follows: NUMBER OF NUMBER OF SHARES SHARE OPTIONS NUMBER OF SHARES PERIOD WITHIN FOR WHICH OPTIONS ISSUED/EXERCISED/ FOR WHICH OPTIONS SUBSCRIPTION WHICH OPTIONS OUTSTANDING AT (CANCELLED) OUTSTANDING AT YEAR OF GRANT PRICE PER SHARE EXERCISABLE 31 DECEMBER 2023 DURING YEAR 31 DECEMBER 2024 2022 352.0p Feb 2022 - Feb 2032 760,000 – 760,000 The exercise of options under the Unapproved Share Option Schemes, for certain option issues, is subject to the satisfaction of the objective performance conditions specified by the Bisichi remuneration committee, which will conform to institutional shareholder guidelines and best practice provisions in force from time to time. There are no performance or service conditions attached to 2022 options which are outstanding at 31 December 2024. 2024 2023 WEIGHTED WEIGHTED AVERAGE AVERAGE 2024 EXERCISE 2023 EXERCISE NUMBER PRICE NUMBER PRICE Outstanding at 1 January 760,000 352.0p 760,000 352.0p Outstanding at 31 December 760,000 352.0p 760,000 352.0p Exercisable at 31 December 760,000 352.0p 760,000 352.0p 74 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 25. NON–CONTROLLING INTEREST (“NCI”) 2024 2023 £’000 £’000 As at 1 January 19,823 21,169 Share of profit for the year 3,177 70 Dividends paid (436) (936) Exchange movement (90) (480) As at 31 December 22,474 19,823 The following subsidiaries had material NCI: Bisichi PLC Black Wattle Colliery (Pty) Ltd Summarised financial information for these subsidiaries is set out below. The information is before inter–company eliminations with other companies in the Group. 2024 2023 BISICHI PLC £’000 £’000 Revenue 52,289 49,253 Profit for the year attributable to owners of the parent 1,117 259 Profit for the year attributable to NCI 2,288 51 Profit for the year 3,405 310 Other comprehensive expense attributable to owners of the parent (77) (469) Other comprehensive expense attributable to NCI (45) (206) Other comprehensive expense for the year (122) (675) Balance sheet Non–current assets 48,707 45,292 Current assets 12,974 14,489 Total assets 61,681 59,781 Current liabilities (18,962) (24,241) Non–current liabilities (6,589) (1,946) Total liabilities (25,551) (26,187) Net current assets at 31 December 36,130 33,594 Cash flows From operating activities 9,433 2,798 From investing activities (7,929) (6,479) From financing activities (2,341) (4,235) Net cash flows (837) (7,916) The non–controlling interest comprises of a 37.5% shareholding in Black Wattle Colliery (Pty) Ltd, a coal mining company incorporated in South Africa. Summarised financial information reflecting 100% of the underlying subsidiary’s relevant figures, is set out below. 2024 2023 BLACK WATTLE COLLIERY (PTY) LIMITED (“BLACK WATTLE”) £’000 £’000 Revenue 48,335 47,423 Expenses (43,549) (47,275) Profit for the year 4,786 148 Total comprehensive income for the year 4,786 148 Balance sheet Non–current assets 22,704 18,843 Current assets 9,414 9,033 Current liabilities (18,549) (20,460) Non–current liabilities (3,740) (2,252) Net assets at 31 December 9,829 5,164 25. NON–CONTROLLING INTEREST (“NCI”) CONTINUED The non-controlling interest originates from the disposal of a 37.5% shareholding in Black Wattle Colliery (Pty) Ltd in 2010 when the total issued share capital in Black Wattle Colliery (Pty) Ltd was increased from 136 shares to 1,000 shares at par of R1 (South African Rand) through the following shares issue: • a subscription for 489 ordinary shares at par by Bisichi Mining (Exploration) Limited increasing the number of shares held from 136 ordinary shares to a total of 625 ordinary shares; • a subscription for 110 ordinary shares at par by Vunani Mining (Pty) Ltd; • a subscription for 265 “A” shares at par by Vunani Mining (Pty) Ltd On 12 April 2022 the total issued share capital in Black Wattle Colliery (Pty) Ltd was increased further from 1000 shares to 1002 shares at par of R1 through the following share issue: • a subscription of 1 “B” Share at par by Bisichi Mining (Exploration Limited); • a subscription of 1 “B” Share at par by Vunani Mining (Pty) Ltd Bisichi Mining (Exploration) Limited is a wholly owned subsidiary of Bisichi PLC incorporated in England and Wales. Vunani Mining (Pty) Ltd is a South African Black Economic Empowerment company and minority shareholder in Black Wattle Colliery (Pty) Ltd. The “A” shares rank pari passu with the ordinary shares save that they will have no dividend rights until such time as the dividends paid by Black Wattle Colliery (Pty) Ltd on the ordinary shares subsequent to 30 October 2008 will equate to R832,075,000. A non-controlling interest of 15% in Black Wattle Colliery (Pty) Ltd is recognised for all profits distributable to the 110 ordinary shares held by Vunani Mining (Pty) Ltd from the date of issue of the shares (18 October 2010). An additional non-controlling interest will be recognised for all profits distributable to the 265 “A” shares held by Vunani Mining (Pty) Ltd after such time as the profits available for distribution, in Black Wattle Colliery (Pty) Ltd, before any payment of dividends after 30 October 2008, exceeds R832,075,000. The “B” shares rank pari passu with the ordinary shares save that they have sole rights to the distributable profits attributable to certain mining reserves held by Black Wattle Colliery (Pty) Ltd. A non-controlling interest is recognised for all profits distributable to the “B” shares held by Vunani Mining (Pty) Ltd from the date of issue of the shares (12 April 2022). 26. RELATED PARTY TRANSACTIONS COST RE- AMOUNTS CHARGED OWED (BY) / TO RE- (TO) / BY RE- ADVANCED LATED LATED BY RELATED PARTY PARTY PARTY £’000 £’000 £’000 Related party: Simon Heller Charitable Trust Current account (63) – 63 Loan account – (700) – Directors and key management M A Heller, J A Heller and A R Heller 18 (i) – (18) J Mintz – 10 – C A Parritt (18) (ii) – 18 R Priest (35) (ii) (9) 35 London & Associated Securities – (ii) – – Totals at 31 December 2024 (98) (699) 98 Totals at 31 December 2023 (98) (699) – Nature of costs recharged – (i) Property management fees (ii) Consultancy fees. Directors JA Heller and AR Heller have an interest in a number of private property companies. London & Associated Properties PLC uses agents to assist with day to day property management matters. In their agency capacity those agents also provide support to these private property companies. The approximate value of the services amounted to £61,000 (2023 £70,000). In addition the Company received management fees of £10,000 (2023: £10,000) for work done for two charitable foundations, the Michael & Morven Heller Charitable Foundation and the Simon Heller Charitable Trust. Until his death Sir Michael Heller was also interested in the private property companies in which JA Heller and AR Heller are interested The Simon Heller Trust has placed on deposit with LAP £700,000 at an interest rate of 9% which is refundable on demand. An interest free loan of £10,000 made to J Mintz remained outstanding at year end. C A Parritt provided consultancy services to the Company on an invoiced fee basis. R Priest provided consultancy services to the Company on an invoiced fee basis. In 2012 a loan was made by Bisichi to one of the Bisichi directors, Mr A R Heller, for £116,000. Interest is payable on the director’s Loan at a rate of 6.14 per cent. There is no fixed repayment date for the director’s Loan. The loan amount outstanding at year end was £41,000 (2023: £41,000) and no repayment (2023: £nil) was made during the year. The directors are considered to be the only key management personnel and their remuneration including employer’s national insurance for the year was £2,317,000 (2023: £2,279,000). All other disclosures required, including interest in share options in respect of those directors, are included within the remuneration report. FINANCIAL STATEMENTS Notes to the financial statements London & Associated Properties PLC 2024 75 76 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 27. EMPLOYEES The average number of employees, including directors, of the Group during the year was as follows: 2024 2023 Production 200 209 Administration 27 39 227 248 Staff costs during the year were as follows: 2024 2023 £’000 £’000 Salaries and other costs 8,176 7,825 Social security costs 384 497 Pension costs 538 538 9,098 8,860 28. CAPITAL COMMITMENTS There are no commitments for capital expenditure approved or contracted at the year end (2023: £nil). 29. LEASE RENTALS RECEIVABLE The Group leases out its investment properties to tenants under operating leases. The future aggregate minimum rentals receivable under non–cancellable operating leases are as follows: 2024 2023 £’000 £’000 Not later than one year 3,024 2,920 Later than one year, but not more than two years 2,683 2,569 Later than two years, but not more than three years 2,263 2,206 Later than three years, but not more than four years 1,941 1,756 Later than four years, but not more than five years 1,514 1,471 More than 5 years 11,738 11,208 23,163 22,130 30. CONTINGENT LIABILITIES AND EVENTS AFTER THE REPORTING PERIOD There were no contingent liabilities at 31 December 2024 (2023: £220,000), except as disclosed in note 22. An exit fee of £220,000 due to Paragon, the lender to our development in West Ealing, has been incurred and accrued to the balance of the loan. This was disclosed as a contingent liability in 2023. Bank guarantees have been issued by the bankers of Black Wattle Colliery (Pty) Limited on behalf of the Company to third parties. The guarantees are secured against the assets of the Company and have been issued in respect of the following: 2024 2023 £’000 £’000 Rail siding & transportation 42 43 Rehabilitation of mining land 1,590 1,614 Water & electricity 41 41 1,673 1,698 The interpretation of laws and regulations in South Africa where Bisichi operates can be complex and can lead to challenges from or disputes with regulatory authorities. Such situations often take significant time to resolve. Where there is a dispute and where a reliable estimate of the potential liability cannot be made, or where Bisichi, based on legal advice, considers that it is improbable that there will be an outflow of economic resources, no provision is recognised. Black Wattle Colliery (Pty) Ltd is currently involved in a tax dispute in South Africa related to VAT. The dispute arose during the year ended 31 December 2020 and is related to events which occurred prior to the years ended 31 December 2020. As at 24 April 2025, Bisichi has been advised that it has a strong legal case, that it has complied fully with the legislation and, therefore, no economic outflow is expected to occur. Because of the nature and complexity of the dispute, the possible financial effect of a negative decision cannot be measured reliably. Accordingly, no provision has been booked at the year end. At this stage, Bisichi believes that the dispute will be resolved in its favour. There have been no events or transaction that require adjustment or disclosure. London & Associated Properties PLC 2024 77 FINANCIAL STATEMENTS Notes to the financial statements 31. COMPANY FINANCIAL STATEMENTS Company balance sheet at 31 December 2024 NOTES 2024 £’000 2023 £’000 Fixed assets Tangible assets 31.3 987 443 Other investments: Associated company 31.4 489 489 Subsidiaries and others 31.4 164 672 653 1,161 1,640 1,604 Current assets Debtors 31.5 13,504 13,444 Bank balances 1,549 3,398 15,053 16,842 Creditors Amounts falling due within one year 31.6 (1,564) (1,897) Net current assets 13,489 14,945 Total assets less current liabilities 15,129 16,549 Creditors Amounts falling due after more than one year 31.7 (539) (5) Net assets 14,590 16,544 Capital and reserves Share capital 31.9 8,554 8,554 Share premium account 4,866 4,866 Capital redemption reserve 47 47 Treasury shares 31.9 (144) (144) Retained earnings 1,267 3,221 Shareholders’ funds 14,590 16,544 The loss for the financial year was £1,954,000 (2023: £2,355,000) These financial statements were approved by the board of directors and authorised for issue on 29 April 2025 and signed on its behalf by: John Heller Jonathan Mintz Company Registration No. 341829 Director Director 78 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024 SHARE CAPITAL £’000 SHARE PREMIUM £’000 CAPITAL REDEMPTION RESERVE £’000 TREASURY SHARES £’000 RETAINED EARNINGS EXCLUDING TREASURY SHARES £’000 TOTAL EQUITY £’000 Balance at 1 January 2023 8,554 4,866 47 (144) 5,576 18,899 Loss for the year – – – – (2,355) (2,355) Total comprehensive expense – – – – (2,355) (2,355) Balance at 31 December 2023 8,554 4,866 47 (144) 3,221 16,544 Loss for the year – – – – (1,954) (1,954) Total comprehensive expense – – – – (1,954) (1,954) Balance at 31 December 2024 8,554 4,866 47 (144) 1,267 14,590 £1.3 million (2023: £3.2 million) of retained earnings (excluding treasury shares) is distributable. 31.1. COMPANY Accounting policies The following are the main accounting policies of the Company: Basis of preparation The financial statements have been prepared on a going concern basis and in accordance with Financial Reporting Standard 101 ’Reduced Disclosure Framework’ (FRS 101) and Companies Act 2006. The financial statements are prepared under the historical cost convention as modified to include the revaluation of freehold and leasehold properties and fair value adjustments in respect of current asset investments and interest rate hedges. The results of the Company are included in the consolidated financial statements. No profit or loss is presented by the Company as permitted by Section 408 of the Companies Act 2006. In these financial statements, the company has applied the exemptions available under FRS 101 in respect of the following disclosures: • Cash Flow Statement and related notes; • Comparative period reconciliations for share capital, tangible fixed assets and intangible assets; • Disclosures in respect of transactions with wholly owned subsidiaries; • Disclosures in respect of capital management; • The effects of new but not yet effective IFRSs; • Disclosures in respect of the compensation of Key Management Personnel. As the consolidated financial statements include the equivalent disclosures, the Company has also taken the exemptions under FRS 101 available in respect of the following disclosures: • IFRS 2 Share Based Payments in respect of Group settled share based payments; • The disclosures required by IFRS 7 and IFRS 13 regarding financial instrument disclosures have not been provided apart from those which are relevant for the financial instruments which are held at fair value and are not either held as part of the trading portfolio or derivatives. Key judgements and estimates The preparation of the financial statements requires management to make assumptions and estimates that may affect the reported amounts of assets and liabilities and the reported income and expenses, further details of which are set out below. Although management believes that the assumptions and estimates used are reasonable, the actual results may differ from those estimates. Further details of the estimates are contained in the Directors’ Report and in the Group accounting policies. Investments in subsidiaries, associated undertakings and joint ventures Investments in subsidiaries, associated undertakings and joint ventures are held at cost less accumulated impairment losses. Fair value measurements of investment properties and investments An assessment of the fair value of certain assets and liabilities, in particular investment properties, is required. In such instances, fair value measurements are estimated based on the amounts for which the assets and liabilities could be exchanged between market participants. To the extent possible, the assumptions and inputs used take into account externally verifiable inputs. However, such information is by its nature subject to uncertainty. The fair value measurement of the investment properties may be considered to be less judgemental where external valuers have been used as is the case with the Company. London & Associated Properties PLC 2024 79 FINANCIAL STATEMENTS Notes to the financial statements 31.1. COMPANY CONTINUED The following accounting policies are consistent with those of the Group and are disclosed on page 42 to 48 of the Group financial statements. • Revenue • Property operating expenses • Employee benefits • Financial instruments • Investment properties • Other assets and depreciation • Assets held for sale • Income taxes • Leases 31.2. RESULT FOR THE FINANCIAL YEAR The Company’s result for the year was a loss of £1,954,000 (2023: £2,355,000). In accordance with the exemption conferred by Section 408 of the Companies Act 2006, the Company has not presented its own profit and loss account. 31.3. TANGIBLE ASSETS INVESTMENT PROPERTIES OFFICE TOTAL £’000 FREEHOLD £’000 LEASEHOLD OVER 50 YEARS £’000 LEASEHOLD UNDER 50 YEARS £’000 EQUIPMENT AND MOTOR VEHICLES £’000 OFFICE BUILDING £’000 Cost or valuation at 1 January 2024 1,037 – – 175 66 796 Additions in the year 831 – – – – 831 Disposals (750) – – – – (750) Decrease on revaluation (20) – – (20) – – Cost or valuation at 31 December 2024 1,098 – – 155 66 877 Representing assets stated at: Valuation 175 – – 175 – – Cost 943 – – – 66 877 1,118 – – 175 66 877 Depreciation at 1 January 2024 594 – – – 21 573 Charge for the year 267 – – – – 267 Disposals (750) – – – – (750) Depreciation at 31 December 2024 111 – – – 21 90 Net book value at 1 January 2024 443 – – 175 45 223 Net book value at 31 December 2024 987 – – 155 45 787 The freehold and leasehold properties, excluding the present value of head leases and directors’ valuations, were valued as at 31 December 2024 by professional firms of chartered surveyors. The valuations were made at fair value. 2024 £’000 2023 £’000 Allsop LLP 150 170 Add: Present value of headleases 5 5 155 175 80 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 31.3. TANGIBLE ASSETS CONTINUED The historical cost of investment properties was as follows: FREEHOLD £’000 LEASEHOLD OVER 50 YEARS £’000 LEASEHOLD UNDER 50 YEARS £’000 Cost at 1 January 2024 – – 785 Cost at 31 December 2024 – – 785 Head leases on investment property represent the value attributed to the right of the Company to occupy and use investment property that has a head lease interest. In the current year total cash outflow for head leases is £nil (2023: £nil). A number of these leases provide for payment of contingent rent, usually a proportion of net rental income, in addition to fixed rents. Office building represents the value attributed under IFRS 16 to the right of the Company to occupy its sole office building. In the current year total cash outflow for the office lease liability is £0.3 million (2023: £0.3 million). 31.4. OTHER INVESTMENTS COST OR VALUATION TOTAL £’000 SHARES IN SUBSIDIARY COMPANIES £’000 SHARES IN JOINT VENTURES £’000 SHARES IN ASSOCIATE £’000 At 1 January 2024 1,161 508 164 489 Impairment provision (508) (508) – – At 31 December 2024 653 – 164 489 Subsidiary companies Details of the Company’s subsidiaries, joint ventures and associates are set out in note 12. Dragon is a joint venture and Bisichi and West Ealing are associates of the Company. 31.5. DEBTORS 2024 £’000 2023 £’000 Trade debtors 15 27 Amounts due from associate and joint ventures 1,945 1,978 Amounts due from subsidiary companies 11,215 11,138 Other debtors 240 157 Prepayments and accrued income 89 144 13,504 13,444 31.6. CURRENT LIABILITIES Creditors: amounts falling due within one year 2024 £’000 2023 £’000 Trade payables 76 45 Amounts owed to subsidiary companies – 382 Amounts owed to joint ventures – 33 Other taxation and social security costs 105 118 Lease liabilities 257 223 Other creditors 719 738 Accruals and deferred income 407 358 1,564 1,897 Borrowings The company has no bank borrowings. London & Associated Properties PLC 2024 81 FINANCIAL STATEMENTS Notes to the financial statements 31.7. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 2024 £’000 2023 £’000 Lease liabilities 539 5 539 5 Lease liabilities 2024 TOTAL £’000 2024 HEAD LEASES ON INVESTMENT PROPERTY 1 £’000 2024 OFFICE £’000 2023 TOTAL £’000 Minimum lease payments fall due: Within one year 323 – 323 239 Second to fifth year 596 2 594 2 After five years 12 12 – 12 931 14 917 253 Future finance charges on lease liabilities (135) (9) (126) (25) Present value of lease liabilities 796 5 791 228 Present value of lease liabilities: Within one year 257 – 257 223 Second to fifth year 536 2 534 2 After five years 3 3 – 3 796 5 791 228 1 Many head leases on investment properties provide for contingent rent in addition to the rents above, usually a proportion of rental income. Lease liabilities greater than one year are £539,000 (2023: £5,000). Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default. 31.8. DEFERRED TAX LIABILITY 2024 £’000 2023 £’000 Deferred Taxation Balance at 1 January – – Balance at 31 December – – The deferred tax balance comprises the following: Accelerated capital allowances (137) (132) Short–term timing differences 290 290 Revaluation of investment properties (7) (4) Loss relief (146) (154) Deferred tax liability at year end – – 82 London & Associated Properties PLC 2024 FINANCIAL STATEMENTS Notes to the financial statements 31.9. SHARE CAPITAL Details of share capital, treasury shares and share options are set out in note 24. 31.10. RELATED PARTY TRANSACTIONS COST RE- CHARGED TO (BY) RELATED PARTY £’000 AMOUNTS OWED BY (TO) RELATED PARTY £’000 ADVANCED TO (BY) RELATED PARTY £’000 Related party: Dragon Retail Properties Limited Current account 36 (i) 76 73 West Ealing Projects Limited Current account – 1,945 327 Bisichi PLC Current account 200 (ii) – (200) Simon Heller Charitable Trust Current account (63) – 63 Loan account – (700) – Directors and key management M A Heller, J A Heller and A R Heller 18 (i) – (18) J Mintz – 10 – C A Parritt (18) (iii) – 18 R Priest (35) (iii) (9) 35 Totals at 31 December 2024 138 1,322 298 Totals at 31 December 2023 138 1,113 465 Nature of costs recharged – (i) Management fees (ii) Property management fees (iii) Consultancy fees During the period, the Company entered into transactions, in the ordinary course of business, with other related parties. The company has taken advantage of the exemption under paragraph 8(k) of FRS101 not to disclose transactions with wholly owned subsidiaries. Dragon Retail Properties Limited – ‘Dragon’ is owned equally by the Company and Bisichi PLC. Bisichi PLC – The company has 41.602 per cent ownership of ‘Bisichi’. Other details of related party transactions are given in note 26. 31.11. EMPLOYEES The average weekly number of employees of the company during the year were as follows: 2024 2023 Directors & Administration 11 24 Staff costs during the year were as follows: 2024 £’000 2023 £’000 Salaries 1,121 1,330 Social Security costs 125 171 Pension costs 91 89 1,337 1,590 31.12. CAPITAL COMMITMENTS There were no capital commitments at 31 December 2024 (2023 – none). London & Associated Properties PLC 2024 83 FINANCIAL STATEMENTS Notes to the financial statements 31.13. FUTURE AGGREGATE MINIMUM RENTALS RECEIVABLE The Company leases out its investment properties to tenants under operating leases. The future aggregate minimum rentals receivable under non–cancellable operating leases are as follows: Future aggregate minimum rentals receivable 2024 £’000 2023 £’000 1 year 5 7 2 years – 5 5 12 31.14. CONTINGENT LIABILITIES AND POST BALANCE SHEET EVENTS There were no contingent liabilities at 31 December 2024 (2023: none). There have been no events or transactions that require adjustment or disclosure. 84 London & Associated Properties PLC 2024 FINANCIAL STATEMENTSFINANCIAL STATEMENTS Five year financial summary 2024 £M 2023 £M 2022 £M 2021 £M 2020 £M Portfolio size Investment properties–LAP^ 24 22 23 25 31 Investment properties–Dragon Retail Properties 2 2 2 2 2 Investment properties–Bisichi ^ 11 11 10 11 10 Assets held for sale-LAP - 1 – 1 – Inventories-LAP 9 9 23 25 25 46 45 58 64 68 Portfolio activity £M £M £M £M £M Acquisitions - - 2.53 0.09 0.33 Disposals (note 6, 13) - (14.75) (5.70) (4.17) – Additions to inventory at cost 1.01 0.78 0.75 1.02 0.39 1.01 (13.97) (2.42) (3.06) 0.72 Consolidated income statement £M £M £M £M £M Group income 54.92 53.18 100.24 56.48 35.02 Profit/(loss) before tax 4.42 (3.48) 33.17 1.52 (10.15) Taxation (1.62) (0.31) (12.00) (0.70) (1.09) (Loss)/profit attributable to shareholders (0.37) (3.86) 2.70 (0.15) (6.70) (Loss)/profit per equity share – basic and diluted (0.44)p (4.52)p 3.17p (0.18)p (7.86)p Dividend per share 0.00p 0.00p 0.00p 0.00p 0.00p Consolidated balance sheet £M £M £M £M £M Shareholders’ funds attributable to equity shareholders 28.09 28.49 32.55 29.70 29.86 Net borrowings, excluding lease obligations 22.17 19.11 23.47 30.15 33.93 Net assets per share 32.91p 33.38p 38.14p 34.78p 34.99p Consolidated cash flow statement £M £M £M £M £M Cash generated from operations 10.35 3.69 39.39 5.82 1.64 Notes: ^ Excluding the present value of head leases John Heller Jonathan Mintz Company Registration No. 341829 Director Director LONDON & ASSOCIATED PROPERTIES PLC 12 LITTLE PORTLAND STREET LONDON W1W 8BJ EMAIL: ADMIN@LAP.CO.UK www.lap.co.uk FSC ® C001785