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Final Results

RNS - London Stock Exchange | 24/04/2014

LONDON & ASSOCIATED PROPERTIES PLC

Final Results for the year ended 31 December 2013

London & Associated Properties plc ("LAP" or the "Company") is a fully listed
UK shopping centre and Central London retail property specialist.

HIGHLIGHTS

* Sale of King Edward Court, Windsor for an aggregate of £108 million

* Further strategic property disposals of £17 million

* New venture formed with Oaktree Capital Management and £120 million
shopping portfolio acquired.

* Property income of £8.2 million (£8.1 million on a like-for-like basis)

* Fully diluted NAV of 59 pence per share (55.29 pence per share)

* Net assets of £49.7 million (£46.5 million)

* Total property assets of £238 million including properties under management
(£244 million)

* Dividend reintroduced of 0.125 pence per share.

Chairman, Sir Michael Heller, comments:

"Following these disposals LAP is in a stronger financial position for the
future. We believe that there will be a number of interesting opportunities for
your Company to invest directly and to co-invest with third parties across the
entire retail sector. We are well placed to take advantage of those
opportunities as they arise."

Ends.

Contact:

London & Associated Properties plc Tel: 020 7415 5000

John Heller, Chief Executive

Robert Corry, Finance Director

Baron Philips Associates Tel: 020 7920 3161

Baron Philips

London & Associated Properties PLC

Report and Accounts 2013

financial highlights

Fully diluted net assets per share

59p 2012: 55.29p

IFRS net assets

£49.7m 2012: £46.5m

Diluted EPRA net asset value per share

64.8p 2012: 80.3p

Portfolio valuation*

£238m 2012: £244m

*Including properties under management

financial calendar

First interim management statement

Friday 16 May 2014

Annual General Meeting

Tuesday 10 June 2014

Announcement of half year results to 30 June 2014

Late August 2014

Second interim management statement

Monday 17 November 2014

Announcement of annual results for 2014

Late April 2015

LAP at a glance

WHOLLY OWNED

Key projects

Orchard Square, Sheffield,
Market Row, Brixton
King Square, West Bromwich

Highlight

Sale of King Edward Court shopping centre for £108m (completed January 2014)

JOINT VENTURES AND INVESTMENTS

Key projects

Kingsgate Centre, Dunfermline
The Rushes Shopping centre, Loughborough
The Vancouver Quarter centre, Kings Lynn
Langney, Eastbourne

Highlights

Appointed by Oaktree Capital Management to co-invest in and manage three of
their shopping centres

Planning permission has been granted for the redevelopment of Langney shopping
centre in Eastbourne

Sold Halifax for £8m successfully concluding the joint venture with Lloyds
Banking Group

MANAGEMENT

Key projects

Agora Portfolio on behalf of Lloyds Banking Group Ealing portfolio on behalf of
NAMA

Highlights

Agora - All assets now successfully disposed of at levels ahead of expectation

Ealing - This final asset was sold significantly ahead of bank value

chairman and chief executive's statement

I am pleased to report on a year of progress at LAP. The most significant event
of 2013 was the successful disposal of King Edward Court in Windsor for £105
million. This brought the total proceeds from this centre to £108 million,
since an additional unit let to Superdry, was sold for £3.175 million in July
2013.

The disposal marks the end of our successful ownership of King Edward Court.
Shareholders will recall that we acquired it in 2002 for £45 million as the
first investment in our joint venture with Bank of Scotland (now Lloyds Banking
Group). Between 2005-07 we redeveloped some 250,000 sq. ft. of Grade A retail
space to meet retailer demand. This scheme cost c.£25 million and included a
new Waitrose supermarket plus shops for Zara, H&M, Top Shop and New Look, as
well as a Travelodge hotel. The development established Windsor as a
significant comparison shopping town, and led to continuous rental growth even
during the most difficult years of the recession.

We felt that the time was right to make this disposal. Strong investor demand
for quality shopping centres reinforced our opinion, and we considered that
further growth would only be achievable through significant development of one
end of the scheme.

The proceeds of the sale have been used to pay off the associated loan from
Lloyds Bank of £70 million. In addition, we terminated the swap used to hedge
this loan at a further cost of £14.6 million.

During 2013 we also received £8.1 million from the sale of the Halifax property
we owned jointly with Lloyds Bank, as this joint venture had reached the end of
its life. During our ownership, we maintained full occupancy and re-geared the
leases to both Tesco, the anchor retail tenant, and Calderdale Borough Council,
the principal tenant of the upper parts. Cash proceeds were used to pay down
the loan secured against the property, and surplus funds of £0.6 million were
added to our cash reserves.

Following these disposals LAP is in a stronger financial position for the
future. We believe that there will be a number of interesting opportunities for
your Company to invest directly and to co-invest with third parties across the
entire retail sector. We are well placed to take advantage of those
opportunities as they arise. Bank finance is improving from the low points of
the last few years but it is still patchy. Consequently a strong balance sheet
remains an important advantage going forward.

These transactions have strengthened our balance sheet and have enabled us to
negotiate better terms with the Royal Bank of Scotland (RBS), but we shall only
renew this line of credit for a short period. Your Board is in detailed
negotiations with different lenders to totally replace the RBS facilities. We
have a number of offers of finance which we are considering. All the offers
received are on significantly better terms than those previously on offer from
RBS.

Profit before tax under IFRS was £1.1 million compared to £7.6 million in the
previous year. However, if the impact of the discontinued operations is
excluded, the result was a profit of £1.6 million as compared to a loss £5.9
million last year. Currently our underlying performance remains strong and we
are anticipating a reduction in future interest costs as the derivatives are
terminated and revised facilities are put in place.

Total assets under management are £277 million. Net assets are £54.6 million
under EPRA.

London & Associated Management Services Ltd (LAMS)

We have always managed properties for joint ventures and associates and in 2010
we took the opportunity to grow this aspect of our business.

London & Associated Management Services Ltd (LAMS) was formed to provide asset
management services for institutional type investors. In that year Lloyds Bank
appointed us to assist with the asset management of a portfolio of shopping
centres. We improved net operating income through intensive asset management
over a relatively short period of time, and this enabled us to successfully
dispose of the centres on improved terms on the Bank's behalf.

LAMS has expanded its workload considerably on behalf of the Banks and other
financial institutions. In 2013 we successfully completed the disposal of two
portfolios of shopping centres and other retail property on behalf of Lloyds
Bank and NAMA (National Asset Management Agency, the Republic of Ireland's
state-controlled "bad bank"). Once again, we enhanced the net operating income
and upgraded the future cash flow profiles of the Centres to ensure maximum
proceeds for the lenders. LAMS received fees of £620k for these projects.

Our reputation for providing a full asset and property management service is
gaining traction in the retail property market. As well as bank work-out
mandates, we have been chosen by Oaktree Capital Management as a joint venture
partner to provide asset and property management services. In December 2013 the
joint venture acquired a portfolio of three shopping centres: the Vancouver
Quarter centre in Kings Lynn, the Rushes in Loughborough and the Kingsgate
shopping centre in Dunfermline, Scotland. LAP's investment in this joint
venture is £2.2 million.

All three centres have suffered from a lack of investment due to the cash
constraints of the previous owners, but fundamentally they are of good quality
and in strong retail locations. We gained management control of these centres
in January of this year and we have already placed a number of vacant units
under offer. We are confident that we will add significant value to these
centres during the life of the joint venture, and I look forward to updating
shareholders on progress in the future.

We report on our major centres as follows.

Orchard Square, Sheffield

Trading at Orchard Square remains strong. Three leases expired during 2013 and
all three tenants have served notice requesting new leases. Two of these
tenants, Waterstones and Clarks shoes, have now agreed new leases, and they
both show that rental income levels have remained close to the peaks achieved
during the last 10 years. We are close to finalising the third lease renewal.

We reported last year that Republic, our tenant in one of the front units on
Fargate, had gone into administration, but was acquired by Sports Direct and
converted into a USC. Sports Direct have met with varied success with this
business and as a consequence, they have decided to close a significant number
of their larger stores, including this one.

The marketing of this unit has met with exceptionally strong interest from a
wide variety of national retailers. Currently we are exploring our options
which include letting the unit as a whole or splitting it into various smaller
units. We have offers from retailers on much of the space, and we will make a
separate announcement once negotiations have been concluded. USC was paying a
rent of £200,000 per annum, and we are confident that we will exceed this
figure.

Brixton Market

Our two indoor markets in Brixton continue to see strong demand for space which
far exceeds supply. Currently there is a waiting list of 160 traders and this
continues to drive rental growth. The Mayor of London is very keen to promote
London Village sites and the success of Brixton has been used as a partial
justification for this policy.

West Bromwich

The opening of the new Sandwell College with 12,000 students at the rear of
King's Square has increased footfall through the centre and it is trading well.
Metro Plaza, the Local Authority's redevelopment of the pedestrian walkway from
the Metro station and the college to the rear entrance of our centre, is well
advanced and upon completion should further boost footfall. A new Tesco store
and other units in a new development on the opposite side of the High Street
are now open and trading, and they have brought significantly more shoppers
into West Bromwich town centre. A very high proportion of shoppers in West
Bromwich arrive by public transport and with the main bus station at the side
of our centre, and the Metro station at the rear, shoppers dependent upon
public transport have to pass through our centre to get to all parts of the
town centre.

Langney

Following a difficult year, during which the centre was closed due to the
collapsing of the atrium roof in heavy rain, we are pleased to report that all
repairs have been carried out. The centre reopened in the summer andis trading
well. The costs of the repairs are being covered by insurance. During the year
we obtained planning consent to extend the centre. Occupier interest is strong
and we expect to agree a number of pre-lets in the near future. We will report
on this further as matters progress.

Other swaps

Having terminated the £70 million swap used to hedge the loan on Windsor, the
company had a further £50.4 million of outstanding swaps. The directors have
taken the decision to terminate these swaps as well, and at the time of writing
there is just £20 million of notional swap remaining. This, too, will be
terminated in the near future. Consequently, the company will be able to take
advantage of the current low interest rates going forward.

Bisichi Mining PLC

Bisichi Mining PLC ("Bisichi") had a strong first half of the year, although
they had a more challenging second half. They had an EBITDA of £3 million
(2012: £4.6 million) and their property values remained resilient for the full
year. Greater detail about the full year of Bisichi's trading can be found in
the accounts of the company at www.bisichi.co.uk.

Dividends

Following the successful re-gearing of our balance sheet and the stronger cash
flows that we anticipate achieving in the coming years, the Board have resolved
to pay dividends in the future. For 2013 your directors are recommending a
modest final dividend of 0.125p per share payable on 4 July 2014 to
shareholders registered at the close of business on 6 June 2014. We hope and
expect that dividends will grow in the future as the business makes further
tangible progress.

We would, as always, like to thank the directors, staff and advisors, but this
year we would like to make special mention of Mike Dignan, our director of
property, who has announced he will be retiring in June this year. Mike joined
LAP (or London & Associated Investment Trust as we were then called) in 1984,
and has worked closely with the Board over the last 30 years. His wise counsel
has always been appreciated and we wish him well for a long and happy
retirement.

Sir Michael Heller, John Heller,
Chairman Chief Executive

17 April 2014

finance director's review

2013 has been a year of significant change for the Group with the sale of the
property in Windsor, which was completed in January 2014. To enable
shareholders to gain a proper reflection of the business going forward, the
impact of this and related transactions have been shown separately
as a discontinued operation.

As a result of the sale our gearing has been reduced substantially and we now
have a strong Balance Sheet going forward which augurs well for the future of
the business.

Cash flow

With the sale of Windsor at the year end, gearing is now 94.1%, down from
180.9% in 2012.

As part of the future financing strategy the Board decided to unwind the long
dated swaps and all have now been terminated, apart from a notional £20 million
at a rate of 4.685%. This means that the group is able to take advantage of the
low interest rates and for 2014, our interest charge (assuming rates remain
unchanged) should show a reduction of more than £7 million. This will give the
group a stronger cash flow going forward. Once we have terminated the long
dated swaps and replaced the £44 million term loan from RBS with a better
priced alternative we intend to put in place appropriate hedging to cover the
position on that specific loan to ensure that we are protected against future
interest rate rises.

During the year a debenture of £5 million matured, which was repaid. We also
took the opportunity to repay a further debenture of £1.7 million, due to
mature in 2016 and rescheduled the 2018 debenture so that it now has £1 million
maturing in 2016, £1 million in 2017 and the balance of £3 million in 2018 at
no extra cost to the company. The remaining £10 million 2022 debenture remains
unchanged. This will generate an annual saving of over £0.7 million per annum.

In the second half of the year we invested £2.2 million into a venture with
Oaktree Capital Management, an American Fund management business. This venture
purchased three shopping centres. London & Associated Management Services
Limited (LAMS) has been awarded the contract to manage these properties, and
this will make a sizeable contribution to Group management income in this area
which we see developing substantially in the coming years.

We are looking to make similar investments as we develop the broad base of the
business.

Income statement

This statement has been adjusted so that the discontinued operations are shown
separately from the ongoing business enabling shareholders to better understand
the current trading position. Group property income on a like for like basis
has increased by £0.2 million.

Our mix of income continues to change as the importance of our management
business (working for joint ventures and third parties) increases in relation
to income earned from our directly owned properties. This is a positive trend
since it helps to reduce the risk to capital and the volatility of net income.

The result, including revaluations and other movements, showed a profit of £1.6
million (2012: loss £5.9 million). Much of this variation was attributable to
the volatility of derivative valuations which along with the related interest
cost will not recur in future years.

We also continue to monitor our overheads and reduce them wherever we can. The
office relocation we made in 2012 will be showing its full effect on the
results in year 2014 and going forward.

The tax credit for the year relates entirely to movement in the deferred tax.

Balance sheet

The underlying assets of the Group on a management adjusted basis are shown in
the table below:

2013 Per IFRS Deferred Mark-to-market Head EPRA

balance tax of interest leases Adjusted
sheet swaps
£'000 £'000 net
£'000 £'000 assets

£'000

Investment properties 92,046 (4,597) 87,449

Other fixed assets 2,403 2,403

Investments in associate and 9,593 9,593
joint ventures

Other assets 9,030 (2,785) (1,914) 4,331

Assets held for sale 15,067 15,067

Other liabilities (24,421) 9,569 4,597 (10,255)

Net debt (53,984) (53,984)

Net assets 49,734 (2,785) 7,655 - 54,604

Adjusted NAV per share 64.8p

2012

Investment properties 234,069 (28,657) 205,412

Other fixed assets 2,173 2,173

Investments in associate and joint 8,608 8,608
ventures

Other assets 8,000 (2,664) (7,805) (2,469)

Other liabilities (75,106) 33,935 28,657 (12,514)

Net debt (131,287) (131,287)

Net assets 46,457 (2,664) 26,130 - 69,923

Adjusted NAV per share 80.3p

Group net assets under IFRS were £49.7 million (2012: £46.5 million), but the
more meaningful EPRA figure shows net assets of £54.6 million (2012: £69.9
million). The reduction is due to the board's decision to terminate the long
term swaps. However this will improve the income position in future years.

Accounting judgements and going concern

The most significant judgements made in preparing these accounts relate to the
carrying value of the properties, investments and interest rate hedges all of
which are stated at fair value. The basis of the valuation
for the interest rate derivatives has been revised in the year (see accounting
policies) because the Board has decided to terminate them rather than hold them
for the long term. For that reason they are now valued at their termination
value as compared to the net present value of the estimated extra costs which
would arise to maturity if current market interest rates stayed the same until
then. The Group uses external professional valuers to determine the values of
our properties.

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
and Chief Executive's Report and in this Report. In addition the Directors
consider that note 17 to the financial statements sets out the company's
objectives, policies and processes for managing its capital; its financial risk
management objectives; details of its financial instruments and hedging
activities; its exposure to credit risk and liquidity risk.

Negotiations are continuing with RBS in relation to the short term renewal of
the £44.2 million term bank facility. While these negotiations are on-going the
existing facility has been allowed to continue. The documentation is being
finalised and should be signed shortly. Negotiations are also in progress for a
new long term facility which will replace the RBS loan and give the group long
term security on better terms.

With a quality property portfolio comprising a majority of long leases
supported by suitable financial arrangements, the Directors believe the company
is well placed to manage its business risks successfully, despite the
continuing uncertain economic climate. The Directors therefore have
a reasonable expectation that the company has 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.

Dividends

In view of the improving strength of the company, the Directors are proposing a
final dividend of 0.125 pence per share payable in July 2014.

Our associated company Bisichi Mining PLC, in which we hold a 42% stake, had a
strong year. Bisichi had an EBITDA of £3 million for 2013 (2012: £4.6 million).
There was a revaluation deficit under IFRS of £53,000 (2012: £456,000).

I am confident that the continued policy of managing the Group's cash resources
prudently will benefit us as we continue to move forward.

Robert Corry,
Finance Director

17 April 2014

portfolio overview

Brixton Village and Market Row

• Critically acclaimed as a Top 10 value location for eating in UK - Guardian
(Life and Style) January 2014

• Colourful and eclectic

• Over 160 traders on waiting list

• Brixton Village Market has become the destination for budget eating in South
London Time Out

principal activity, strategy & business model

The Group's principal business model is the investment in and management of
town centre retail property through direct investment and joint ventures, where
we manage the property ourselves and on behalf of our partners. The main
strategic priorities are:

• Maximising income

• Creating quality property

• Capital strength

OUR KEY STRENGTHS ARE OUR STRATEGY IS

Maximising income By achieving an appropriate tenant mix and shopping
experience we can increase footfall
through the centres, hence tenant demand for space and an enhanced income.

Creating quality property We look to improve the consumer experience at all our
centres 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, which has been
substantially reduced, provides financial stability whilst giving capacity and
flexibility to look for further investments.

risk 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 in house teams with
strong tenant and market knowledge
who manage appropriate tenant mix.

Asset illiquidity Assets may be illiquid Regular reporting of current and
(size and and affect flexing of projected position to the Board
geographical balance sheet. with efficient treasury management.
location)

People:

Retention and Unable to retain and Nomination Committee and senior
recruitment of staff attract the best people staff review skills gaps and
for the key roles. succession planning. Training and
development offered.

Reputation:

Business Loss in revenue. Documented Recovery Plan in place.
interruption
Impact on footfall. General and terrorism insurance
policies in place and risks
Adverse publicity. monitored by trained security
staff.
Potential for criminal/
civil proceedings. Health and Safety policies in
place.

CCTV in centres.

Financing:

Fluctuation in Impact on covenants and Secure income flows.
property values other loan agreement
obligations. Regular monitoring of LTV and IC
covenants and other obligations.

Focus on quality assets.

Reduced availability Insufficient funds to Efficient treasury management.
of meet existing debts/
borrowing facilities interest payments and Loan facilities extended where
operational payments. possible.

Regular reporting of current and
projected position to the Board.

Loss of cash and Financial loss. Only use a spread of banks and
deposits financial institutions which have a
strong credit rating.

Fluctuation of Uncertainty of interest Manage derivative contracts to
interest rates rate costs. achieve a balance between hedging
interest rate exposure and
minimising potential cash calls.

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 - occupancy

We aim to maximise the total income in The ERV of the Void levels have
our properties by achieving full empty units as a remained very
occupancy. percentage of our low in a difficult
total income. trading
environment.

Maximising income - like for like property income

To increase the like-for-like income Like-for-like After a small fall
from the property year on year. rental income as in 2011 the
a percentage of like-for-like
the prior year rental income has
rental. continued to grow.

Capital Strength - growth in net asset value per share

The net assets per share is the Increase in the The net assets per
principal measure used by the group for net assets per share grew by 3.71
monitoring its performance and is an share. pence per share or
indicator of the level of reserves 6.7%.
available for distribution by way of
dividend.

The Rushes Shopping Centre Loughborough

• Open air centre consisting of 15 units

• c 235,000 sq ft

• Anchored by Tesco

• Other tenants include Next, M&S Food, Sports Direct and Argos

• Includes a 440 space car park currently let to NCP

Vancouver Quarter Kings Lynn

• Open air centre consisting of 60 units

• c 385,000 sq ft

• Anchored by Sainsbury's

• Other tenants include Superdrug, Iceland, Poundland and Wilkinsons

• Includes the towns principal car park providing 440 spaces, currently let to
APCOA

Kingsgate Shopping Centre Dunfermline

• Covered centre consisting of 77 units

• c 310,000 sq ft

• Anchored by Debenhams

• Other tenants include River Island, Topshop, New Look and H&M

• Includes the towns principal car park providing 711 spaces, currently let to
APCOA

corporate responsibility

Greenhouse gas reporting

We have reported on all of the emission sources required under the Companies
Act 2006 (Strategic Report and Directors' Reports) Regulations for the
reporting period 1st January 2013 to 31st December 2013.

We have employed the Financial Control definition to outline our carbon
footprint boundary. Included within that boundary are Scope 1 & 2 emissions
from the landlord & tenant controlled areas of shopping centres and facilities
that we own. These include King Edward Court, Orchard Square, Brewery Street,
Brixton Market, Shipley, Bridgend and Kings Square.

Excluded from our footprint boundary are properties that we manage
on behalf of others or not wholly owned by LAP (including The Halifax Shopping
Centre which is a 50/50 Joint Venture with Lloyds); and emissions considered
non material by the business.

We have reported on emissions from Scope 1 & 2 emissions sources only. We have
not measured and reported on our Scope 3 emissions sources. Emissions for
landlord controlled areas have been calculated based on actual consumption
information collected from each shopping centre. Emissions from tenant
controlled areas is calculated based on floor area and energy consumption
benchmarks for general retail services in the UK.

We have used the GHG Protocol Corporate Accounting and Reporting Standard
(revised edition) and guidance provided by UK's Department
of Environment and Rural Affairs (DEFRA) on voluntary and mandatory carbon
reporting. Emission factors were used from UK Government's GHG Conversion
Factors for Company Reporting 2013.

2013

Table1. Emissions from landlord & tenant controlled areas

Emissions Source Amount Unit CO2e (Tonnes)

Scope 1 Natural gas 2,107,320 kwh 939

Refrigerants 5 kg 9

Scope 2 Electricity 12,209,160 kWh 5,117

Total tCO2e 6,065

Table 2. Emissions from tenant controlled areas

Emissions Source Amount Unit CO2e (Tonnes)

Scope 1 Natural gas 0 kwh 0

Refrigerants 0 kg 0

Scope 2 Electricity 10,976,252 kWh 4,890

Total tCO2e 4,890

Table 3. Emission from landlord controlled areas

Emissions Source Amount Unit CO2e (Tonnes)

Scope 1 Natural gas 2,107,320 kwh 939

Refrigerants 5 kg 9

Scope 2 Electricity 1,232,908 kWh 227

Total 1,175

Intensity 1 Tonnes of CO2e per £ revenue 2013 for 0.000074
landlord controlled areas only

Environment

The Group's principal UK activity is property investment, which involves
renting premises to retail 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 of the Company's locations.

Employee, social, community and human rights

The Group's principal UK activity 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.

Director, employees and gender representation

At the year end the company had 6 directors (6 male, 0 female),
5 senior managers (4 male, 1 female) and 19 employees (8 male, 11 female).

Approved on behalf of the board of directors

Robert Corry,
Finance Director

17 April 2014

directors & advisors

EXECUTIVE DIRECTORS

* Sir Michael Heller MA FCA
(Chairman)

John A Heller LLB MBA
(Chief Executive)

Robert J Corry BA FCA
(Finance Director)

NON-EXECUTIVE DIRECTORS

† Howard D Goldring BSC (ECON) ACA
Howard Goldring has been a member of the board since July 1992, he is a global
asset allocation specialist and has over 30 years experience in the real estate
market. He is executive Chairman of Delmore Asset Management Limited which
specialises in the management of investment portfolios for private clients,
charities, family trusts and pension funds. He also acts as an advisor
providing high level asset allocation advice to family offices and pension
schemes, including among others, Tesco Pension Investment Ltd. From 1997-2003
he was consultant director on global asset allocation to Liverpool Victoria
Asset Management Limited.

#† Clive A Parritt FCA CF FIIA
Clive A Parritt joined the board on 1 January 2006. He is a chartered
accountant with over 30 years experience of providing strategic, financial and
commercial advice to businesses of all sizes. He is Chairman of Baronsmead VCT
2 plc, DiGiCo Global Limited and BG Consulting Group Limited as well as being a
director of Jupiter US Smaller Companies plc. Clive 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
Robin Priest joined the board on 31 July 2013. He is a Managing Director of
Alvarez & Marsal Real Estate Advisory Services LLP (A&M) and has more than 30
years of experience in real estate and structured finance. He advises private
sector and public sector clients on both operational and financial real estate
matters. Prior to joining A&M, Robin Priest was lead partner for Real Estate
Corporate Finance in London with Deloitte LLP. He is a member of the investment
committee of a European real estate fund. He is also a trustee of London's Oval
House Theatre.

* Member of the nomination committee

# Senior independent director

† Member of the audit, remuneration and nomination committees

SECRETARY & REGISTERED OFFICE

Heather A Curtis ACIS
24 Bruton Place
London W1J 6NE

DIRECTOR OF PROPERTY

Mike J Dignan FRICS

AUDITOR

Baker Tilly UK Audit LLP

PRINCIPAL BANKERS

HSBC Bank PLC
Lloyds Banking Group PLC
National Westminster Bank PLC
Royal Bank of Scotland PLC

SOLICITORS

Olswang LLP
Pinsent Masons LLP

STOCKBROKER

Westhouse Securities Limited

REGISTRARS & TRANSFER OFFICE

Capita Asset Services
Shareholder Services
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU

Telephone 0871 664 0300
(Calls cost 10p per minute + network extras,
lines are open Mon-Fri 9.00am to 5.30pm)
or +44 208 639 3399 for overseas callers.

Website: www.capitaregistrars.com
Email: shareholderenquiries@capita.co.uk

Company registration number
341829 (England and Wales)

WEBSITE

www.lap.co.uk

E-MAIL

admin@lap.co.uk

directors' report

The directors submit their report and the audited accounts, for the year ended
31 December 2013.

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 Statement and the Strategic
Report. These reports should be read in conjunction with this report.

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 Mining PLC (Bisichi) in which the
company holds a 42 per cent interest. Bisichi is listed on the London Stock
Exchange and operates in England and South Africa with subsidiaries which are
involved in overseas mining and mining investment.

Business review

Review of the Group's development and performance

A review of the Group's development and performance can be found below and
should be read in conjunction with the Strategic Report.

Property activities

The Group is a long-term investor in property. It acquires retail properties,
actively manages those assets to improve rental income and thus 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. Whilst income may be adversely affected by the
inability of tenants to pay their rent, rent collection and tenant quality are
monitored carefully. Risk is also minimised by a diversified tenant base, which
should limit the impact of the failure of any individual tenant.

• 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.

• Financing costs - the exposure of the Group to interest rate movements is
managed by the use of swap arrangements (see note 18 for full details of the
contracts in place). These swap arrangements are designed to ensure that our
interest costs are fixed and always covered by anticipated rental income. Once
put in place we intend that such swaps are generally retained until maturity.
Details of key estimates adopted are contained in the accounting policies note.

• 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 the associate are for the long term.

The Group is an investor in the associate and manages the UK property assets of
the associate. However the principal activity of the associate is overseas
mining investment (principally in South Africa). The investment is held to
generate income and capital growth over the longer term. 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 and
spreading of risk make it desirable.

Dividend policy

The directors are recommending payment of a final dividend for 2013 of 0.125p
per share (2012 nil).

Subject to shareholder approval, the total dividend per ordinary share for 2013
will be 0.125p per ordinary share.

The final dividend will be payable on Friday 4 July 2014 to shareholders
registered at the close of business on 6 June 2014.

The company's ordinary shares held in treasury

At 31 December 2013, 1,254,738 (2012: 1,538,398) ordinary shares were held in
Treasury with a market value of £552,084 (2012: £338,447). At the Annual
General Meeting (AGM) in June 2013 members renewed the authority for the
company to purchase up to 10 per cent. of its issued ordinary shares. The
company will be asking members to renew this authority at the next AGM in June
2014.

Movements in Treasury shares during the year: Number of

Treasury shares held at 1 January 2013 1,538,398

Issued re directors bonuses (130,852 shares at 22p) (130,852)

Issued re staff bonuses (128,026 shares at 22p) (128,026)

Issued re Share Incentive Plan (Directors 4,673 shares at 21.75p) (4,673)

Issued re Share Inventive Plan (Staff 20,109 shares at 21.75p) (20,109)

Treasury shares held at 31 December 2013 1,254,738

Treasury shares are not included in issued share capital for the purposes of
calculating earnings per share and net assets per share, and they do not
qualify for dividends payable.

Following the year-end, 391,503 shares were transferred from Treasury in
respect of shares issued in connection with an approved HMRC Share Incentive
Plan and Directors' and staff bonuses. The shares were issued at 58.25p on 27
February 2014.

Investment properties

The freehold and long leasehold properties of the Company and its subsidiaries
were revalued as at 31 December 2013 by external professional firms of
chartered surveyors - Allsop LLP, London (44.13 per cent of the portfolio),
Woolhouse Real Estate (0.78 per cent), and by the Directors (55.09 per cent).
The valuations, which are reflected in the financial statements, amount to £
190.1 million (2012: £205.4 million). This is split between continuing
operations (£87.4 million) and assets held for sale (£102.7 million).

Taking account of prevailing market conditions, the valuation of Group
properties at 31 December 2013 resulted in a decrease of £5.8 million (2012:
increase of £10.7 million). This is split between continuing operations (£0.5
million) and discontinued operations (£5.3 million). This has been reflected in
the income statement in accordance with the requirements of IFRS. The impact of
property revaluations on the Company's joint ventures (Analytical Ventures
Limited, Dragon Retail Properties Limited and Langney Shopping Centre Unit
Trust) and the associate company (Bisichi Mining PLC) was a reduction of £0.5
million (2012: reduction of £2.5 million). The proportion of this revaluation
attributable to the Group (net of taxation) is reflected in the income
statement and the consolidated balance sheet.

Financial instruments

Note 18 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 in place for 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 Finance Director's Review.

Directors

Sir Michael Heller, J A Heller, R J Corry, H D Goldring, C A Parritt were
Directors of the company for the whole of 2013. Robin Priest was appointed to
the board on 31 July 2013 and will offer himself for election at the Annual
General Meeting in 2014. His details are as follows: Robin Priest is a Managing
Director of Alvarez & Marsal Real Estate Advisory Services LLP (A&M) and has
more than 30 years of experience in real estate and structured finance. He
advises private sector and public sector clients on both operational and
financial real estate matters. Prior to joining A&M, Robin Priest was lead
partner for Real Estate Corporate Finance in London with Deloitte LLP. Robin
Priest has a contract of service with the Company determinable upon three
months notice. The board has considered the appointment of Robin Priest and
recommends his election as Director. His knowledge of structured finance and
experience of dealing with challenging and complex assets and portfolios is of
significant benefit to the business.

Directors' interests

The interests of the Directors in the ordinary shares of the Company, including
family and trustee holdings, where appropriate can be found in the Annual
Remuneration Report.

Substantial shareholdings

At 31 December 2013 Sir Michael Heller and his family had an interest in 47.6
million shares of the Company, representing 56.5 per cent. of the issued share
capital net of treasury shares (2012: 47.5 million shares representing 56.6 per
cent.). Cavendish Asset Management Limited had an interest in 7,717,314 shares
representing 9.16 per cent. of the issued share capital of the Company (2012:
6,985,120 shares representing 8.32 per cent.). James Hyslop had an interest in
3,856,258 shares representing 4.58 per cent. of the issued share capital of the
Company (2012: 3,336,258 shares representing 3.97 per cent.). The Company do
not consider that the Heller family have 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.
Therefore the directors deem no party to have control.

The Company is not aware of any other holdings exceeding 3 per cent. of the
issued share capital. Following the year-end and at the date of this report Sir
Michael Heller and his family's interest increased to 47.9 million shares of
the Company representing 56.6 per cent. of the issued share capital net of
treasury shares.

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 in 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 re-elected at least
every three years. The Company has requested authority from shareholders to buy
back its own ordinary shares and there will be a resolution to renew the
authority at this year's AGM (Resolution 10).

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 on 31 December 2013 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.

Directors and officers liability insurance

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 (2012: £Nil). Donations for
charitable purposes amounted to £2,548 (2012: £3,200).

Greenhouse Gas Reporting

Details of the Company's Greenhouse Gas Reporting for the year ended 31
December 2013 can be found in the Strategic Report

Going concern

The directors have reviewed the cash flow forecasts of the Group and the
underlying assumptions on which they are based. They have also considered
carefully the position in relation to renewal of the Group banking facilities.
The Group's business activities, together with the factors likely to affect its
future development, are set out in the Chairman's and Chief Executive's
Statement and Finance Director's Review. In addition note 18 to the financial
statements sets out the company's objectives, policies and processes for
managing its capital; its financial risk management objectives; details of its
financial instruments and hedging activities; its exposure to credit risk and
liquidity risk.

Negotiations are continuing in relation to the renewal of the £44.2 million
term bank facility which expired originally in September 2012. While these
negotiations have been ongoing the existing facility was extended firstly to 2
July 2013 and subsequently it has been allowed to continue while the
documentation for a new short term facility is finalised. The negotiations have
been protracted because the Board felt that the terms offered initially could
be improved, even allowing for the fact that the facility sought is only for
the short term. The Board is seeking longer term funding from a new lender, as
this will be in the best interests of the Group. Negotiations for a new long
term facility are well advanced and we have received outline offers on good
terms from over 10 financial institutions.

Following the sale of Windsor for £105 million in January 2014, we have paid
off the £70 million loan related to that property and we have terminated the
related interest rate swap at a cost of £14.6 million. The balance of these
proceeds is available to the Group. As a result the gearing of the Group has
improved substantially (details of this are given in Note 18) and further
improved our negotiating position for short and longer term facilities. This
cash could, of course, be used to reduce borrowings but the directors prefer to
use it to further develop the business.

In the circumstances the directors are confident that the short term facility
and a longer term replacement will be in place shortly. Should new funding not
be available, there is more than adequate security to cover the outstanding
loan, net of transaction costs.

With sound financial resources and long term leases in place and taking account
of the outline funding offers received, the Directors do not believe that
current negotiations represent material uncertainties and they are satisfied
that the Group is well placed to manage its business risks despite the current
uncertain economic outlook. Accordingly the Group has adequate resources to
continue in operational existence for the foreseeable future. Thus we continue
to adopt the going concern basis of accounting in preparing the annual
financial statements.

Annual General Meeting

The Annual General Meeting will be held at 24 Bruton Place, London W1J 6NE on
Tuesday 10 June 2014 at 10.30 a.m. Items 1 to 8 will be proposed as ordinary
resolutions. More than 50 per cent. of shareholders' votes must be in favour
for those resolutions to be passed. Items 9 to 11 will be proposed as special
resolutions. At least 75 per cent. of shareholders' votes must be in favour for
those 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 not 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.

Ordinary resolutions

Resolution 8 - Authority to allot securities

Paragraph 8.1.1 of Resolution 8 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 £2,822,649. This
represents approximately 1/3 (one third) of the ordinary share capital of the
company in issue (excluding treasury shares) as at 15 April 2014 (being the
last practicable date prior to the publication of this Directors' Report).

In line with guidance issued by the Association of British Insurers (`ABI')
paragraph 8.1.2 of Resolution 8 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 £
2,822,649, in connection with a rights issue. This amount represents
approximately 1/3 (one third) of the ordinary share capital of the company in
issue (excluding treasury shares) as at 15 April 2014 (being the last
practicable date prior to the publication of this Directors' Report).

The directors' authority will expire on 31 August 2015 or if earlier 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 ABI regarding its use (including as regards the
Directors standing for re-election in certain cases).

Special resolutions

The following special resolutions will be proposed at the Annual General
Meeting:

Resolution 9 - Disapplication of pre-emption rights

Under company law, when new shares are allotted or treasury shares are sold for
cash (otherwise than pursuant to an employee share scheme) they must first be
offered to existing shareholders in proportion to their existing shareholdings.
This special resolution gives the Directors authority, for the period ending on
the date of the next annual general meeting to be held in 2015, to: (a) allot
shares of the company and sell treasury shares for cash in connection with a
rights issue or other pre-emptive offer; and (b) otherwise allot shares of the
company, or sell treasury shares, for cash up to an aggregate nominal value of
£423,397 representing in accordance with institutional investor guidelines,
approximately 5 per cent. of the total ordinary share capital in issue as at 15
April 2014 (being the last practicable date prior to the publication of this
Directors' Report) in each case as if the pre-emption rights in company law did
not apply.

Save in respect of issues of shares in respect of employee share schemes and
share dividend alternatives, the directors do not currently intend to make use
of these authorities. The board intends to adhere to the provisions in the
Pre-emption Group's Statement of Principles not to allot shares for cash on a
non-pre-emptive basis in excess of an amount equal to 7.5 per cent. of the
Company's ordinary share capital within a rolling three-year period without
prior consultation with shareholders. The directors' authority will expire on
on 31 August 2015 or if earlier the next AGM.

Resolution 10 - Purchase of own ordinary shares

The effect of Resolution 10 would be to renew the Directors' current authority
to make limited market purchases of the Company's ordinary shares of 10 pence
each. The power is limited to a maximum aggregate number of 8,467,947 ordinary
shares (representing approximately 10 per cent. of the company's issued share
capital as at 15 April 2014 (being the latest practicable date prior to
publication of this Directors' Report)). The minimum price (exclusive of
expenses) which the Company would be authorised to pay for each ordinary share
would be 10 pence (the nominal value of each ordinary share). The maximum price
(again exclusive of expenses) which the company would be authorised to pay for
an ordinary share is an amount equal to 105 per cent. of the average market
price for an ordinary share for the five business days preceding any such
purchase. The authority conferred by Resolution 10 will expire at the
conclusion of the company's next annual general meeting to be held in 2015 or
15 months from the passing of the resolution, whichever is the earlier. Any
purchases of ordinary shares would be made by means of market purchase through
the London Stock Exchange.

If granted, the authority would only be exercised if, in the opinion of the
Directors, to do so would result in an increase in earnings per share or asset
values per share and would be in the best interests of shareholders generally.
In exercising the authority to purchase ordinary shares, the Directors may
treat the shares that have been bought back as either cancelled or held as
treasury shares (shares held by the company itself). No dividends may be paid
on shares which are held as treasury shares and no voting rights are attached
to them.

Other matters

Baker Tilly UK Audit LLP has expressed its willingness to continue in office as
auditor. A proposal will be made at the Annual General Meeting for
reappointment.

By order of the board

Heather Curtis
Secretary

17 April 2014
24 Bruton Place
London
W1J 6NE

corporate governance

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, the Chief Executive, one
other executive Director and three non-executive Directors. Their details
appear above. The board is responsible to shareholders for the proper
management of the Group.

The Directors' responsibility statement in respect of the accounts is set out
on below. 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 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 are 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 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 below.

The audit committee comprises two non-executive Directors and is chaired by C A
Parritt. The audit committee report is set out below.

Board and board committee meetings held in 2013

The number of regular meetings during the year and attendance was as follows:

Meetings Meetings

held attended

R J Corry Board 11 11

Audit committee 2 2

H D Goldring Board 11 11

Audit committee 2 2

Nomination committee 2 2

Remuneration committee 5 5

Sir Michael Heller Board 11 11

Nomination committee 2 2

Remuneration committee 5 5

J A Heller Board 11 11

Audit committee 2 2

C A Parritt Board 11 11

Audit committee 2 2

Nomination committee 2 2

Remuneration committee 5 5

R Priest* Board 4 3

*From date of appointment on 31 July 2013

Performance evaluation - board, board committees and directors

The performance of the board as a whole and of its committees and the
non-executive Directors is assessed by the Chairman and the Chief Executive and
is discussed with the senior independent 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.

Independent directors

The senior independent non-executive Director is C A Parritt. The other
independent non-executive Directors are H D Goldring and R Priest. Delmore
Asset Management Limited (Delmore) is a company in which H D Goldring is a
majority shareholder and Director. Delmore provides consultancy services to the
company on a fee paying basis. Alvarez and Marsal Real Estate Advisory Services
(A&M) is a company in which
R Priest is a Managing Director. A&M provides consultancy and advisory services
the company on a fee paying basis.

The board encourages all three non-executive directors to act independently and
does not consider that length of service of any individual non-executive
director, nor any connection with the above mentioned consultancy and advisory
companies has resulted in the inability or failure to act independently. In the
opinion of the board the three non-executive directors continue to fulfil their
roles as independent non-executive directors.

The independent Directors exchange views regularly between board meetings and
meet when required to discuss corporate governance and other issues concerning
the Group.

Internal control

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 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 departmental heads are required annually to undertake a full assessment
process to identify and quantify the risks that face their departments and
functions, 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 2013. 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 and two interim management statements
are produced for each financial year and published on the company's website.
The company's website www.lap.co.uk is promptly updated with announcements and
Annual Reports upon publication. Copies from previous years are also available
on the website.

The company's share price is published daily in the Financial Times. The share
price history and market information can be found at http://
www.londonstockexchange.com/prices-and-markets/markets/prices.htm. Our 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 Bribery Act 2010 came into force on 1 July 2011. All directors and staff
have since completed an e-learning course and continue to do so on a bi-annual
basis. The company is committed to acting ethically, fairly and with integrity
in all its endeavours and compliance with the code is closely monitored.

statement by the chairman of remuneration committee

The remuneration committee is pleased to present its report for the year ended
31 December 2013, which this year is presented in two parts in accordance with
the new 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 2014. The second
part, is the Remuneration Policy Report which details the remuneration policy
for directors. This policy is subject to a binding vote by shareholders at the
AGM in 2014, and if approved will apply for a 3 year period commencing 10 June
2014. The policy is very much in line with the previous policy although the
level of disclosure has increased in line with the new regulations. The
committee reviewed the existing policy and deemed no changes necessary to the
current arrangements.

Both of the above 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, Baker Tilly LLP is required by law to audit certain
disclosures and where disclosures have been audited they are indicated as such.

C A Parritt
Chairman, Remuneration Committee

17 April 2014

annual remuneration report

Annual report on remuneration

The following information has been audited

Single total figure of remuneration for the year ended 31 December 2013

Salary Bonuses Benefits Pensions Total National Total
and fees before value
£'000 £'000 £'000 2013
£'000 Share of
options vesting £
'000-
£'000 Share
options

£'000

Executive directors

Sir Michael Heller* 7 216 34 - 257 n/a 257

J A Heller 327 326 30 33 716 n/a 716

R J Corry 166 10 24 33 233 n/a 233

500 552 88 66 1,206 - 1,206

Non-executive directors

H D Goldring*+ 43 - 5 - 48 n/a 48

C A Parritt *+ 32 - - - 32 n/a 32

R Priest *^ 37 - - - 37 n/a 37

112 - 5 - 117 - 117

Total 612 552 93 66 1,323 - 1,323

* Note 21 "Related party transactions".

^ R Priest was appointed to the board on 31 July 2013

+ Members of the remuneration committee for year ended 31 December 2013

Other benefits include the provision of car, health and other insurance and
subscriptions.

Single total figure of remuneration for the year ended 31 December 2012

Salary Bonuses Benefits Pensions Total National Total
and fees before value
£'000 £'000 £'000 2012
£'000 Share of
options vesting £
'000-
£'000 Share
options

£'000

Executive directors

Sir Michael Heller* 7 14 40 - 61 n/a 61

J A Heller 300 45 42 30 417 n/a 417

R J Corry 166 9 23 33 231 n/a 231

473 68 105 63 709 - 709

Non-executive directors

H D Goldring*+ 43 - 4 - 47 n/a 47

C A Parritt *+ 33 - - - 33 n/a 33

76 - 4 - 80 - 80

Total 549 68 109 63 789 - 789

* Note 21 "Related party transactions".

+ Members of the remuneration committee for year ended 31 December 2012

Other benefits include the provision of car, health and other insurance and
subscriptions.

Although Sir Michael Heller receives reduced remuneration in respect of his
services to the Group, the Group does supply office premises, property
management, general management, accounting and administration services for a
number of companies in which Sir Michael Heller has an interest. The board
estimates that the value of these services, if supplied to a third party, would
have been £300,000 (2012: £275,000) for the year. Further details of these
services are set out in Note 21 "Related party transactions" to the financial
statements.

H D Goldring's company, Delmore Asset Management Limited provides consultancy
services to the Group. This is dealt with in Note 21 to the financial
statements.

C A Parritt provides consultancy services to the Group. This is dealt with in
Note 21 to the financial statements.

R Priest is a managing director of Alvarez & Marsal Real Estate Advisory
Services who provide consultancy services to the Group. This is dealt with in
Note 21 to the financial statements.

Summary of directors' terms

Date of Unexpired term Notice period
contract

Executive directors

Sir Michael Heller 1 January 1971 Continuous 6 months

John Heller 1 May 2003 Continuous 12 months

Robert Corry 1 September Continuous 6 months
1992

Non-executive directors

H D Goldring 1 July 1992 Continuous 3 months

C A Parritt 1 January 2006 Continuous 3 months

R Priest 31 July 2013 Continuous 3 months

Total pension entitlements

Two directors have benefits under money purchase schemes. Under their contracts
of employments they are entitled to a regular employer contribution (currently
£33k a year). There are no final salary schemes in operation. No pension costs
are incurred on behalf of non-executive directors.

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 awarded in 2013 (2012: 90,480). However,
35,518 shares were awarded in February 2014 relating to 2013 bonuses and these
are shown below.

Free shares awarded:

Number of Number of Value of
members shares shares

2013 2012 2013 2012 2013 2012

£ £

Directors: 1 1 5,150 13,636 3,000 3,000

R J Corry

J A Heller - 1 - 13,636 - 3,000

Staff 6 5 30,368 63,208 17,690 13,906

Total at 31 December 7 7 35,518 90,480 20,690 19,906

2. Partnership shares: No partnership shares were issued between November 2012
and October 2013.

3. Matching shares: The partnership share agreements for the year to 31 October
2013 provide for two matching shares to be awarded free of charge for each
partnership share acquired. No partnership shares were acquired in 2013 (2012:
nil). Matching shares will usually be forfeited if a member leaves employment
in the group within 5 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 2013 amounted to nil (2012: nil).

Dividend shares issued:

Number of Number of Value of
members shares shares

2013 2012 2013 2012 2013 2012

£ £

Directors:

R J Corry - 1 - 2,462 - 535

J A Heller - 1 - 2,211 - 481

Staff - 12 - 20,109 - 4,373

Total at 31 December - 14 - 24,782 - 5,389

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 2013.

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 2013 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. 70,000 options under the Unapproved Scheme lapsed
during the year to 31 December 2013. Further details of this scheme are set out
in Note 20 "Share Capital" to the financial statements.

Payments to past directors

No payments were made to past directors in the year ended 31 December 2013.

Payments for loss of office

No payments for loss of office were made in the year ended 31 December 2013.

Statement of directors' shareholding and share interest

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 13 1 Jan 13 31 Dec13 1 Jan 13

Sir Michael Heller 6,335,252 6,304,002 19,277,931 19,277,931

R J Corry 1,028,448 998,355 - -

H D Goldring 19,819 19,819 - -

J A Heller 1,673,581 1,630,649 †14,073,485 †14,073,485

C A Parritt 36,166 36,166 - -

†These non-beneficial holdings are duplicated with those of Sir Michael Heller.

The beneficial holdings of Directors shown above include their interests in the
Share Incentive Plan.

Performance graph and table

The graph (unaudited) 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 bid market price
of London & Associated Properties PLC ordinary shares at 31 December 2013 was
22.0p (2012: 22.0p). During the year the share mid-market price ranged between
21.75 and 44.0p.

Remuneration of the Chief Executive over the last five years

Year CEO Chief Executive Single Annual bonus Long-term incentive
total figure of payout vesting rates against
against maximum
remuneration opportunity* maximum opportunity*

£'000 % %

2013 J A 716 n/a n/a
Heller

2012 J A 417 n/a n/a
Heller

2011 J A 671 n/a n/a
Heller

2010 J A 577 n/a n/a
Heller

2009 J A 982 n/a n/a
Heller

*There were no formal criteria or conditions to apply in determining the amount
of bonus payable or the number of shares to be issued.

Percentage change in Chief Executive's Remuneration (audited)

The table below shows the percentage change in Chief Executive remuneration for
the prior year compared to the average percentage change for all other Head
Office based employees. To provide a meaningful comparison, the same group of
employees (although not necessarily the same individuals) appear in the 2012
and 2013 group. The remuneration committee chose Head Office based employees as
the comparator group as this group forms the closest comparator group.

Chief Executive Head Office Employees
£'000 £'000

2013 2012 % change 2013 2012 % change

Base salary 327 300 9% 894 900 (0.6%)

Taxable benefits 30 42 (28%) 117 134 (12%)

Annual bonus 326 45 625% 209 61 242%

Total 683 387 76% 1,220 1,095 11%

Relative importance of spend on pay

The total expenditure of the Group on remuneration to all employees (Note 22
refers) is shown below:

2013 2012

£'000 £'000

Employee Remuneration 2,730 1,946

Distributions to shareholders - 630

Statement of implementation of remuneration policy in the following year

If the policy is approved at the AGM in June 2014 it is intended that the
remuneration policy take effect from 10 June 2014. 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.

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 2013. No increases were awarded and no external advice was taken in
reaching this decision.

Shareholder voting

At the Annual General Meeting on 4 June 2013, there was an advisory vote on the
resolution to approve the Remuneration Report the result of which is detailed
below:

% of votes % of votes Number of
for against votes

withheld

Resolution to approve the 99.16 0.61 54
Remuneration Report

remuneration policy

Introduction

Set out below is the Group policy on directors' remuneration. This will be
proposed for a binding vote at the 2014 AGM. If approved the policy will take
effect from 10 June 2014.

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 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

• The need to be flexible and adjust with operational changes throughout the
term of this 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.

Future policy table

Element Purpose Policy Operation Opportunity and
performance
conditions

Executive
directors

Base To recognise: Considered by Reviewed annually There is no
salary remuneration whenever there is prescribed maximum
Skills committee on a change salary or maximum
appointment of role or rate of increase
Responsibility operational
Set at a level responsibility No specific
Accountability considered performance
appropriate to Paid monthly in conditions are
Experience attract, retain, cash attached to base
motivate and salaries
Value reward the right
individuals

Pension To provide Company The contribution Company
competitive contribution payable by the contribution
retirement offered at up to Company is offered at up to
benefits 10% of base included in the 10% of base salary
salary as part of director's as part of overall
overall contract of remuneration
remuneration employment package
package
Paid into money No specific
purchase schemes performance
conditions are
attached to
pension
contributions

Benefits To provide a Contractual The committee The costs
competitive benefits include: retains the associated with
benefits discretion to benefits offered
package Car or car approve changes are closely
allowance in contractual controlled and
benefits in reviewed on an
Group health exceptional annual basis
cover circumstances or
where factors No specific
Death in service outside the performance
cover control of the conditions are
Group lead to attached to
Permanent health increased costs contractual
insurance (e.g. medical benefits
inflation)
The value of
benefits for each
director for the
year ended 31
December 2013 is
shown in the table
above

Annual To reward and In assessing the Bonus incentivise performance of the executive team, and in particular to determine bonuses are merited the remuneration committee takes into account the overall performance of the business, as well as individual
committee maximum bonus will
determines the not exceed 200% of
level of bonus on base salary in any
an annual basis one year but the
whether applying such remuneration
performance committee reserves
conditions and the power to award
performance up to 300% in an
measures as it exceptional year
considers
appropriate 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 consider
appropriate

Share To provide Granted under Offered at Entitlement to
Options executive existing schemes appropriate times share options
directors with by the granted under the
a long-term remuneration Approved Option
interest in committee scheme are not
the company subject to
performance
criteria. Share
Options granted
under the
Unapproved Scheme
are subject to the
performance
criteria specified
in the Scheme
rules

Share options will
be offered by the
remuneration
committee as
appropriate

There are no
maximum levels for
share options
offered

Share To offer a Offered to Maximum Of any bonus
Incentive shorter term executive participation awarded, Directors
Plan incentive in directors and levels are set by may opt to have
(SIP) the company head office staff HMRC maximum of £3,000
and to give of per year paid
directors a in `Free Shares'
stake in the under the SIP
group scheme rules

Full detail of the
SIP can be found
above

Future policy table continued

Element Purpose Policy Operation Opportunity and
performance
conditions

Non-executive directors

Base To Considered by the Reviewed annually There is no
salary recognise: board on prescribed
appointment maximum salary
Skills or maximum rate
Set at a level of increase
Experience considered
appropriate to No performance
Value attract, retain conditions are
and motivate the attached to
individual base salaries

Experience and
time required for
the role are
considered on
appointment

Pension No pension offered

Benefits No benefits The committee retains the The costs
offered except to discretion to approve associated with
one non-executive changes in contractual benefits
director who is benefits in exceptional offered are
eligible for circumstances or where closely
health cover (see factors outside the controlled and
annual control of the Group lead reviewed on an
remuneration to increased costs (e.g. annual basis
report above) medical inflation)
No specific
performance
conditions are
attached to
contractual
benefits

Share Non-executive
Options directors do not
participate in the
share option
schemes

Notes to the Future Policy Table

The remuneration committee consider the performance measures outlined in the
table above to be appropriate measures of performance. For details of
remuneration of other Company employees please see below

Remuneration scenarios

An indication of the possible level of remuneration that would be received by
each Executive director in the year commencing 10 June 2014 in accordance with
the director's remuneration policy is shown below.

Assumptions

Minimum

Consists of base salary, benefits and pension. Base salary, benefits and
pension for 2014 are assumed at the levels included in the single total figure
remuneration table for the year ended 31 December 2013 above.

On target

Based on the average percentage bonus awarded to the individual in the three
years ending on 31 December 2013. As outlined in the policy table above, the
remuneration committee has discretion to award bonuses of up to 200% of base
salary in any one year (up to 300% in an exceptional year).

Base salary, benefits and pension for 2014 are assumed at the levels included
in the single total figure remuneration table for the year ended 31 December
2013 above.

Maximum

Based on maximum remuneration receivable if 300% base salary awarded as bonus
in an exceptional year

Base salary, benefits and pension for 2014 are assumed at the levels included
in the single total figure remuneration table for the year ended 31 December
2013 above.

Approach to recruitment remuneration

All appointments to the board are made on merit. The components of the
remuneration package (for a new director who is recruited within the life of
the approved remuneration policy) would comprise base salary, pension,
benefits, annual bonus and an opportunity to be granted share options as
outlined above. The approach to such appointments are detailed within the
future policy table above. The Company will pay such levels of remuneration to
new directors that will enable the Company to attract appropriately skilled and
experienced individuals but which are not, in the opinion of the remuneration
committee, excessive.

Service contracts

All executive directors have full-time contracts of employment with the
Company. Non-executive directors have contracts of service. No director has a
contract of employment or contract of service with the Company, its joint
venture or associated companies with a fixed term which exceeds twelve months.
Directors notice periods (see above for the annual remuneration report) are set
in line with market practice and of a length considered sufficient to ensure an
effective handover of duties should a director leave the company.

All directors' contracts as amended from time to time, have run from the date
of appointment. Service contracts are kept at the registered office.

Policy on payment for loss of office

There are no contractual provisions agreed prior to 27 June 2012 that could
impact on a termination payment. Termination payments will be calculated in
accordance with the existing contract of employment or service contract. It is
the policy of the remuneration committee to issue employment contracts to
executive directors with normal commercial terms and without extended terms of
notice which could give rise to extraordinary termination payments.

Consideration of employment conditions elsewhere in the company

In setting this policy for directors' remuneration the remuneration committee
has been mindful of the Company's objective to reward all employees fairly
according to their role, performance and market forces. In setting the policy
for Directors' remuneration the committee has considered the pay and employment
conditions of the other employees within the group. No formal consultation has
been undertaken with employees in drawing up the policy. The committee has not
used formal comparison measures.

Consideration of shareholder views

No shareholder views have been taken into account when formulating this policy.
In accordance with the new regulations, an ordinary resolution for approval of
this policy will be put to shareholders at the AGM in June 2014.

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.

At the year end the audit committee comprised the two non-executive directors -
H D Goldring and C A Parritt, both of whom are Chartered Accountants.

The audit committee's primary tasks are to:

• review the scope of external audit, to receive regular reports from Baker
Tilly UK Audit 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 both audit and
non-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 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.

• agreed the independence of the auditors and approved their fees for both
audit and non-audit services as set out in note 2 to the financial statements.

• the chairman of the audit committee has also had separate discussions with
the external audit partner.

External Auditor

Baker Tilly UK Audit LLP held office throughout the period under review. In the
United Kingdom London & Associated Properties PLC provides extensive
administration and accounting services to Bisichi Mining PLC, which has its own
audit committee and employs BDO LLP, a separate and independent firm of
registered auditor.

C A Parritt
Chairman - Audit Committee

17 April 2014

directors' responsibility statement

The 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 are required under the
Listing Rules of the Financial Conduct Authority to prepare group financial
statements in accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union ("EU") and 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).

The group financial statements are required by law and IFRS adopted by the EU
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 they have been prepared in
accordance with IFRSs adopted by the EU and for the company financial
statements state whether applicable UK accounting standards have been followed,
subject to any material departures disclosed and explained in the company
financial statements;

d. 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 and,
as regards the group financial statements, Article 4 of the IAS Regulation.
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 and Transparency Rules

Each of the directors, whose names and functions are listed above 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 profit 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.

valuers' certificates

To the Directors of London & Associated Properties PLC

In accordance with your instructions we have carried out a valuation of the
freehold and leasehold property interests held as at
31 December 2013 by the company as detailed in our Valuation Reports dated 31
January 2014.

Having regard to the foregoing, we are of the opinion that the fair value as at
31 December 2013 of these interests was:

£'000

Freehold 67,180

Leasehold 16,950

84,130

33 Wigmore Street, London W1U 1BZ Allsop LLP
31 January 2014 Regulated by Royal Institute Chartered Surveyors

To the Directors of London & Associated Properties PLC

In accordance with your instructions we have carried out a valuation of the
freehold property interests held as at 31 December 2013 by the company as
detailed in our Valuation Report dated 14 February 2014.

Having regard to the foregoing, we are of the opinion that the fair value as at
31 December 2013 of these interests was:

£'000

Freehold 1,494

Capitol House, Russell Street, Leeds LS1 5SP Woolhouse Real Estate
14 February 2014 Regulated by Royal Institute Chartered Surveyors

independent auditor's report

to the members of london & associated properties plc

We have audited the group and parent company financial statements ("the
financial statements") which comprise the Consolidated income statement, the
Consolidated balance sheet, the Consolidated statement of changes in
shareholders' equity, the Consolidated statement of comprehensive income, the
Consolidated cash flow statement, the Group accounting policies, the Notes to
the Financial Statements, the Company balance sheet, and the related notes.
The financial reporting framework that has been applied in the preparation of
the group financial statements is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The financial
reporting framework that has been applied in the preparation of the parent
company financial statements is applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we are
required to state to them in an auditor's report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company's members as a body, for our
audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As more fully explained in the Directors' Responsibilities Statement set out
above the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements
in accordance with applicable law and International Standards on Auditing (UK
and Ireland). Those standards require us to comply with the Auditing Practices
Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on
the Financial Reporting Council's website at http://www.frc.org.uk/Our-Work/
Codes-Standards/Audit-and-assurance/Standards-and-guidance/
Standards-and-guidance-for-auditors/Scope-of-audit/UK-Private-Sector-Entity-
(issued-1-December-2010).aspx

Opinion on financial statements

In our opinion

• the financial statements give a true and fair view of the state of the
group's and of the parent company's affairs as at 31 December 2013 and of the
group's profit for the year then ended;

• the group financial statements have been properly prepared in accordance with
IFRSs as adopted by the European Union;

• the parent company financial statements have been properly prepared in
accordance with United Kingdom Generally Accepted Accounting Practice; and

• the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006 and, as regards the group financial
statements, Article 4 of the IAS Regulation.

Emphasis of matter - Going Concern

In forming our opinion on the financial statements, which is not modified, we
have considered the adequacy of the disclosure made in the Group accounting
policies of the financial statements concerning the group and company's ability
to continue as a going concern. As disclosed in the group accounting policies
of the financial statements, the group's £44,200,000 revolving credit facility
was repayable in September 2012 and an agreement has not yet been reached with
the group's finance providers to extend or replace this facility. These
conditions, along with the other matters explained in the Group accounting
policies of the financial statements, indicate the existence of a material
uncertainty which may cast significant doubt about the group and company's
ability to continue as a going concern. The financial statements do not include
the adjustments that would arise if the group and company were unable to
continue as a going concern.

Emphasis of Matter - Change in Estimation of Financial Instruments

In forming our opinion on the financial statements, which is not modified, we
have also considered the adequacy of disclosures made in note 18, to the
financial statements concerning the change in accounting estimate used to value
the group and company's financial instruments. During the period the group and
company's directors have concluded that it is not their intention to hold the
instruments for the period to maturity. The directors have therefore adopted
the counterparty's or termination valuations within these financial statements
as at the year ended 31 December 2013.

The resultant financial instrument liability at 31 December 2013 is £9,569,000
for continuing operations and £14,599,000 for discontinued operations (2012: £
33,935,000). If the directors had continued to adopt the previous valuation
methodology the liability in the balance sheet would have been £7,923,000 for
continuing operations and £11,473,000 for discontinued operations. In relation
to continuing operations this change in accounting estimation has reduced the
profit by £1,646,000 in the current year. Whilst we are satisfied that the
disclosures in the financial statements are appropriate we consider that in the
auditor's judgement this matter is of such importance that it is fundamental to
a users' understanding of the financial statements.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion:

• the part of the Directors' Remuneration Report to be audited has been
properly prepared in accordance with the Companies Act 2006; and

• 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.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not visited
by us; or

• the parent company financial statements and the part of the Directors'
Remuneration Report to be audited are not in agreement with the accounting
records and returns; or

• certain disclosures of directors' remuneration specified by law are not made;
or

• we have not received all the information and explanations we require for our
audit.

Euan Banks (Senior Statutory Auditor)
For and on behalf of
BAKER TILLY UK AUDIT LLP,
Statutory Auditor

Chartered Accountants
25 Farringdon Street
London EC4A 4AB

17 April 2014

consolidated income statement

for the year ended 31 December 2013

Notes 2013 2012

£'000 £'000

Gross property income 8,229 8,069

Net revenue from property 1 2,979 3,755

Listed investments held for trading 3 2 97

Results before finance costs and valuation movements 2,981 3,852

Finance income 5 59 28

Finance expenses 5 (5,616) (5,043)

Result before valuation movements (2,576) (1,163)

Non-cash changes in valuation of assets and liabilities

Net decrease on revaluation of investment properties (488) (3,902)

Net increase in value of investments held for trading 3 4

Share of profit/(loss)of joint ventures, after tax 11 99 (43)

Share of profit of associate, after tax 12 151 545

Adjustment to interest rate derivative 4,419 (1,328)

Result including revaluation and other movements 1,608 (5,887)

Attributable to discontinued operations* 7 (461) 13,510

Profit for the year before taxation 1,147 7,623

Income tax 6 2,326 (354)

Profit for the year attributable to the owners of the 3,473 7,269
parent

Basic and diluted profit/(loss) per share - continuing 9 2.74p (8.95)p
operations

Basic and diluted profit per share - discontinued 9 1.38p 17.60p
operations

Total 9 4.12p 8.65p

*The results previously reported in the year ended 31 December 2012 have been
reclassified to reflect discontinued operations.

consolidated balance sheet

at 31 December 2013

Notes 2013 2012

£'000 £'000

Non-current assets

Market value of properties attributable to Group 87,449 205,412

Present value of head leases 24 4,597 28,657

Property 10 92,046 234,069

Plant and equipment 10 203 260

Investments in joint ventures 11 2,607 1,337

Investments in associated company 12 6,986 7,271

Held to maturity investments 13 2,200 1,913

Deferred tax 19 5,651 3,324

109,693 248,174

Current assets

Assets held for sale 7 126,590 -

Trade and other receivables 14 3,356 4,656

Financial assets - investments held for trading 15 23 20

Cash and cash equivalents 6,990 8,303

136,959 12,979

Total assets 246,652 261,153

Current liabilities

Liabilities associated with assets held for sale 7 (111,523) -

Trade and other payables 16 (10,255) (12,514)

Financial liabilities - borrowings 17 (45,918) (52,666)

(167,696) (65,180)

Non-current liabilities

Financial liabilities - borrowings 17 (15,056) (86,924)

Interest rate derivatives 18 (9,569) (33,935)

Present value of head leases on properties 24 (4,597) (28,657)

(29,222) (149,516)

Total liabilities (196,918) (214,696)

Net assets 49,734 46,457

Equity attributable to the owners of the parent

Share capital 20 8,554 8,554

Share premium account 4,866 4,866

Translation reserve in associate (658) (338)

Capital redemption reserve 47 47

Retained earnings (excluding treasury shares) 38,084 34,749

Treasury shares 20 (1,159) (1,421)

Retained earnings 36,925 33,328

Total shareholders' equity 49,734 46,457

Net assets per share 9 59.00p 55.30p

Diluted net assets per share 9 59.00p 55.29p

These financial statements were approved by the board of directors and
authorised for issue on 17 April 2014 and signed on its behalf by:

Sir Michael Heller R J Corry Company Registration No. 341829
Director Director

consolidated statement of changes in shareholders' equity

for the year ended 31 December 2013

Retained earnings

Share Share Translation Capital Treasury Retained Total

capital premium reserves in redemption shares earnings equity

£'000 £'000 associate reserve £'000 excluding £'000

£'000 £'000 treasury

£'000

Balance at 1 January 8,554 4,866 (216) 47 (1,421) 28,099 39,929
2012

Profit for year - - - - - 7,269 7,269

Other comprehensive
income:

Currency translation in - - (122) - - - (122)
associate

Total other - - (122) - - - (122)
comprehensive income

Total comprehensive - - (122) - - 7,269 7,147
income

Transactions with
owners:

Equity share options in - - - - - 11 11
associate

Dividends paid - - - - - (630) (630)

Transactions with - - - - - (619) (619)
owners

Balance at 31 December 8,554 4,866 (338) 47 (1,421) 34,749 46,457
2012

Profit for year - - - - - 3,473 3,473

Other comprehensive
income:

Currency translation in - - (320) - - - (320)
associate

Total other - - (320) - - - (320)
comprehensive income

Total comprehensive - - (320) - - 3,473 3,153
income

Transaction with
owners:

Equity share options in - - - - - 62 62
associate

Disposal of own shares - - - - 62 - 62

Loss on transfer of own - - - - 200 (200) -
shares

Transactions with - - - - 262 (138) 124
owners

Balance at 31 December 8,554 4,866 (658) 47 (1,159) 38,084 49,734
2013

All the above are attributable to the owners of the parent.

consolidated statement of comprehensive income

for the year ended 31 December 2013

2013 2012

£'000 £'000

Profit for the year 3,473 7,269

Other comprehensive income:

Currency translation in associate (320) (122)

Other comprehensive income for the year net of tax (320) (122)

Total comprehensive income for the period attributable to owners 3,153 7,147
of the parent

consolidated cash flow statement

for the year ended 31 December 2013

2013 2012

£'000 £'000

Operating activities

Net revenue from property - continuing operations 2,979 3,755

- discontinued operations 6,557 7,546

Listed investments held for trading 2 97

Depreciation 54 188

Profit on disposal of non-current assets (21) (121)

Decrease/(increase) in receivables 792 (129)

Decrease in payables 471 767

Decrease in investments held for trading - 619

Cash generated from operations 10,834 12,722

Income tax paid - -

Cash inflows from operating activities 10,834 12,722

Investing activities

Investment in shares and loan stock in joint ventures 409 85

Investment in shares held to maturity (2,200) -

Property acquisitions and improvements (34) (1,115)

Sale of properties - discontinued operations 9,310 -

Purchase of office equipment and motor vehicles (33) (37)

Sale of office equipment and motor vehicles 57 194

Interest received - continuing operations 41 28

- discontinued operations - 19

Dividends received from associate and joint ventures 177 242

Cash inflows/(outflows) from investing activities 7,727 (584)

Financing activities

Sale of treasury shares 62 -

Equity dividends paid - (630)

Interest paid - continuing operations (3,314) (3,213)

- discontinued operations (5,990) (6,301)

Interest on obligation under finance leases - continuing (269) (250)
operations

- discontinued operations (1,786) (1,227)

Debenture stock break costs paid - discontinued operations (545) -

Short term loan from joint ventures and related parties 700 2,000

Repayment of debenture stocks - discontinued operations (6,700) -

Repayment of medium term bank loan (247) (236)

Cash outflows from financing activities (18,089) (9,857)

Net increase in cash and cash equivalents 472 2,281

Cash and cash equivalents at beginning of year 5,028 2,747

Cash and cash equivalents at end of year 5,500 5,028

The cash flows above relate to continuing and discontinued operations. See Note
7 for information on discontinued operations.

Cash and cash equivalents

For the purpose of the cash flow statement, cash and cash equivalents comprise
the following balance sheet amounts:

2013 2012

£'000 £'000

Cash and cash equivalents (before bank overdrafts) 6,990 8,303

Bank overdrafts (1,490) (3,275)

Cash and cash equivalents at end of year 5,500 5,028

£0.5 million of cash deposits at 31 December 2013 was charged as security to a
debenture stock.

group accounting policies

The following are the principal group accounting policies:

Basis of accounting

The Group financial statements are prepared in accordance with International
Financial Reporting Standards (IFRS), as adopted by the European Union and with
those parts of the Companies Act 2006 applicable to companies reporting under
IFRS.

The Company has elected to prepare the parent company's financial statements in
accordance with UK GAAP, as applied in accordance with the provisions of the
Companies Act 2006 and these are presented in Note 26. The financial statements
are prepared under the historical cost convention, except for the revaluation
of freehold and leasehold properties and financial assets held for trading as
well as fair value of interest 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.

London & Associated Properties PLC, the parent company is a listed public
company, incorporated and domiciled in England and quoted on the London Stock
Exchange. The Company registration number is 341829.

Going concern

The directors have reviewed the cash flow forecasts of the Group and the
underlying assumptions on which they are based. They have also considered
carefully the position in relation to renewal of the Group banking facilities.
The 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 Finance Director's Review. In addition Note 18 to the financial statements
sets out the company's objectives, policies and processes for managing its
capital; its financial risk management objectives; details of its financial
instruments and hedging activities; its exposure to credit risk and liquidity
risk.

they are satisfied that the Group is well placed to manage its business risks
despite the current uncertain economic outlook. Accordingly the Group has
adequate resources to continue in operational existence for the foreseeable
future. Thus we continue to adopt the going concern basis of accounting in
preparing the annual financial statements.

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.

The most significant judgements made in preparing these accounts relate to the
carrying value of the properties, investments and interest rate hedges. The
Group uses external professional valuers to determine property values and, as
all hedges are in the process of being terminated, these are valued at
estimated exit values at the balance sheet date.

International Accounting Standards (IAS/IFRS)

The following standards and interpretations have been applied for the first
time in these financial statements:

IFRS 7 Financial Instruments (amendment)

IFRS 13 Fair Value Measurement

IAS 1 Presentation of Financial Statements (amendment)

At the date of approval of these financial statements, the following standards
and interpretations have been issued and adopted by the EU but are not
effective for the year ended 31 December 2013 and have not been adopted early:

IFRS 10 Consolidated Financial Statements

IFRS 11 Joint Arrangements

IFRS 12 Disclosure of Interests in Other Entities IAS 27 Separate
Financial Statements (revised)

IAS 28 Investments in Associates and Joint Ventures (revised)

IAS 32 Financial Instruments: Presentation (amendment)

With the exception of IFRS 10 and IFRS 12, the adoption of the standards and
interpretations in issue but not yet effective is not expected to have a
material impact on the financial statements of the Group. The Directors have
not yet completed the evaluation of the effect of adoption of IFRS 10 and IFRS
12.

Basis of consolidation

The Group accounts incorporate the accounts of London & Associated Properties
PLC and all of its subsidiary undertakings, together with the Group's share of
the results and net assets of its joint ventures and associate.

Subsidiaries

Subsidiaries are those entities controlled by the Group. Control is assumed
when the Group has the power to govern the financial and operating policies of
an entity or business and to benefit economically from its activities.
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 Group trading subsidiary companies are set out in
Note 26.4.

Joint ventures

Investments in joint ventures, being those entities over whose activities the
Group has joint control, as established by contractual agreement, include the
appropriate share of the results and net assets of those undertakings.

Associates

Undertakings in which the Group has a participating interest of not less than
20% of the voting capital and over which it has the power to exert significant
influence are defined as associated undertakings. The financial statements
include the appropriate share of the results and reserves of those
undertakings.

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.

Revenue

Rental income

Rental income arises from operating leases granted to tenants. An operating
lease is a lease other than a finance lease. A finance lease is one whereby
substantially all the risks and rewards of ownership are passed to the lessee.
Rental income is recognised in the Group income statement on a straight-line
basis over the term of the lease. This includes the effect of lease incentives
to tenants, which are normally in the form of rent free periods. Contingent
rents, being the difference between the rent currently receivable and the
minimum lease payments, are recognised in property income in the periods in
which they are receivable. Rent reviews are recognised when such reviews have
been agreed with tenants.

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 dividend is received.

Property operating expenses

Property 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 Company 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 a 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.

Financial instruments

Investments

Held to maturity investments are stated at amortised cost using the effective
interest rate method.

Investments held for trading are included in current assets at fair value. For
listed investments, fair value is the bid market listed value at the balance
sheet date. Realised and unrealised gains or losses arising from changes in
fair value are included in the income statement of the period in which they
arise.

Trade and other receivables

Trade and other receivables are recognised initially at fair value. A provision
for impairment of trade receivables is made when there is evidence that the
Group will not be able to collect all amounts due.

Trade and other payables

Trade and other payables are non interest bearing and are stated at their
nominal value.

Bank loans and overdrafts

Bank loans and overdrafts are included as financial liabilities on the Group
balance sheet net of the unamortised discount and costs of issue. Interest
payable on those facilities is expensed as a finance cost in the period to
which it relates.

Debenture loans

The debenture loans are included as a financial liability on the balance sheet
net of the unamortised costs on issue. The cost of issue is recognised in the
group income statement over the life of the debenture. Interest payable to
debenture holders is expensed in the period to which it relates.

Finance lease liabilities

Finance lease liabilities arise for those investment properties held under a
leasehold interest and accounted for 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 so as 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.

Interest rate derivatives

At 31 December 2013 the Group had hedges totalling £50.4m to cover the £44.2
million facility. These consisted of a 20 year swap for £10.4 million with a 7
year call option in favour of the bank, taken out in November 2007, at 4.76 per
cent; and a 20 year swap for £40 million with a 7 year call option in favour of
the bank, taken out in December 2007, at 4.685 per cent. Since the year end
these hedges have been reduced by £30.4 million (the £10.4 million hedge at
4.76 per cent and £20.0 million of the £40.0 million hedge at 4.685 per cent
have been cancelled) leaving only £20 million of the 4.685 per cent hedge
outstanding.

The Board has decided to terminate all the long dated derivatives rather than
hold them to maturity. This decision has necessitated a revision of the
accounting estimate so that the fair value of derivatives is now recognised on
the basis that they are short term liabilities, rather than being held for the
longer term. At 31 December 2013 the liability for the hedging instruments is
based on the bank termination value adjusted for interest already included
elsewhere in the accounts.

This results in a liability at 31 December 2013 of £9,569,000 in relation to
continuing operations and £14,599,000 in relation to discontinued operations
(2012: £33,935,000). If, as was the case in 2012, the hedges had been valued at
the net present value of the fair value , as against the termination values,
the liability in the balance sheet would have been £7,923,000 in relation to
continuing operations and £11,473,000 in relation to discontinued operations.
The value of the continuing hedging instrument changes by approximately £61,000
for each 0.1% change in interest rate.

The amount recognised in the income statement for continuing operations was a
gain of £4,419,000. Had the hedges been valued at the net present value of the
fair value to the business (as last year), the amount recognised in the income
statement would have been a gain of £6,065,000. Thus, in relation to continuing
operations, the profit has been reduced by £1,646,000 in the current year.
There is no impact on the income statement for discontinued operations because
the sale of Windsor required the hedging instrument to be terminated, and so
had to be accounted for on a terminated basis.

Under IFRS 13 the hedges are not deemed to be eligible for hedge accounting and
any movement in the value of the hedges is therefore charged directly to the
consolidated income statement. The bank has an option to cancel the hedges in
January 2015. The cost to the Group to exit the instruments before January 2015
has been attributed a cost by the bank of £174,000 (2012: £401,000).

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. 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 directors valuation of property assets
held for sale is at post year end disposal value, as property contracts were
exchanged during the year.

The valuation of all other 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
property are reported in the Group income statement in the period in which they
arise.

Capital expenditure

Investment properties are measured initially at cost, including related
transaction costs. Additions to capital expenditure, being costs of a capital
nature, directly attributable to the redevelopment or refurbishment of an
investment property, up to the point of it being completed for its intended
use, are capitalised in the carrying value of that property. The redevelopment
of an existing investment property will remain an investment property measured
at fair value and is not reclassified. 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 accounted for on completion of
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 in respect of investment
properties.

Plant and equipment

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.

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 accounted for
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.

Cash and cash equivalents

Cash comprises cash in hand and on demand deposits, net of bank overdrafts.
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.

Segmental reporting

The Group undertakes one primary activity - the management of properties either
for its own account or for third parties (including associated companies and
joint venture partners). In addition it holds a number of investments
(including a significant stake in its associated company - Bisichi Mining PLC).
The property business is subject to risks and returns that are different from
those attributable to investment activities and this is reflected in the way
the Group is managed and with the format of the Group's internal financial
reporting.

notes to the financial statements

for the year ended 31 December 2013

1. Results for the year and segmental analysis

Operating Segments are based on the internal reporting and operational
management of the Group. The Group is focused primarily on property activities
(which generate all trading income), but it also holds and manages investments.

Business segments

2013 2012

Total Total

£'000 £'000

Property income

Group rental income including share of joint ventures 6,807 7,220

Less: joint ventures - share of rental income (267) (281)

Rental income from group properties 6,540 6,939

Management income from third party properties 1,689 1,130

Property related income 8,229 8,069

Direct property expenses (851) (728)

Overheads (4,399) (3,586)

Property result before finance costs and valuation movements* 2,979 3,755

Total assets (excluding investments in associate and joint 108,246 250,632
ventures and discontinued businesses)

Total liabilities (excluding borrowings and current tax) (24,421) (75,106)

Borrowings (60,974) (139,590)

22,851 35,936

Investments 23 20

Investments in joint ventures: non segmental (notes 11 and 2,607 3,245
13)

Investments in associate: non segmental (note 12) 6,986 7,271

Investments in unlisted companies 2,200 5

Discontinued operations 15,067 -

Net assets as per balance sheet 49,734 46,457

Other segment items:

Net (decrease)/increase on revaluation of investment (488) 3,902
properties

Net increase on revaluation of investments held for trading 3 4

Finance income 59 47

Finance expenses 5,616 5,403

Depreciation 54 188

Capital expenditure 47 1,009

* Property result before finance cost and valuation movements is defined as
profit before tax and excludes the share of profit & losses of joint ventures
and associate, finance income and expenses, movement on revaluation of
investment properties and investments held for trading and the movement of
interest rate derivatives.

Net rental income

Joint Ventures

Group Dragon Langney Total Group 2012
exclude: Retail
Shopping £'000 Share £'000
joint Properties
ventures Centre 2013
£'000
£'000 Unit £'000
Trust

£'000

Property income 8,229 205 1,313 9,747 8,496 8,350

Direct property expenses (851) (15) (184) (1,050) (882) (780)

Overheads (4,399) (116) (409) (4,924) (4,508) (3,661)

2,979 74 720 3,773 3,106 3,909

Less: attributable to joint (127) (153)
ventures

Net rental income 2,979 3,755

Geographical segments

At net rental income level, the Group operates only in the United Kingdom. The
directors consider it to be the only geographical segment of the business.

Further information in respect of the property reportable segment is included
within the primary statements. No customer represents revenue in excess of 10
per cent of total revenue (2012: none).

2. Profit before taxation

2013 2012

£'000 £'000

Profit before taxation is stated after charging/(crediting):

Staff costs (note 22) 2,730 1,946

Depreciation on tangible fixed assets - owned assets 54 188

Operating lease rentals - land and buildings 645 550

Profit on disposal of motor vehicles and office equipment (21) (121)

Amounts payable to the auditor in respect of both audit and
non-audit services

Audit services:

Statutory - company and consolidation 75 69

- subsidiaries 29 29

Further assurance services 19 2

Other services 5 8

128 108

Staff costs and depreciation of tangible fixed assets are included in
overheads.

3. Listed investments held for trading

2013 2012

£'000 £'000

Investment sales - 733

Dividends receivable 2 8

2 741

Cost of sales - (619)

2 122

Attributable overheads - (25)

Net income from listed investments 2 97

4. Directors' emoluments

2013 2012

£'000 £'000

Emoluments 1,257 726

Defined contribution pension scheme contributions 66 63

1,323 789

Details of directors' emoluments and share options are set out in the
remuneration report.

5. Finance income and expenses

2013 2012

£'000 £'000

Finance income 59 28

Finance expenses

Interest on bank loans and overdrafts (1,659) (1,382)

Other loans (1,559) (1,494)

Interest on derivatives (2,111) (1,931)

Interest on obligations under finance leases (287) (236)

Total finance expenses (5,616) (5,043)

(5,557) (5,015)

6. Income tax

2013 2012

£'000 £'000

Current tax

Corporation tax on profit of the period - -

Adjustments in respect of previous periods - -

Total current tax - -

Deferred tax

Origination and reversal of timing differences (3,273) 46

Revaluation of investment properties (1,157) 1,770

Accelerated capital allowances (867) (1,370)

Fair value of interest derivatives 2,971 (92)

Total deferred tax (note 19) (2,326) 354

Tax on profit on ordinary activities (2,326) 354

Factors affecting tax charge for the year

The corporation tax assessed for the year is different from that at the
effective rate of corporation tax in the United Kingdom of 23.25 per cent
(2012: 24.5 per cent). The differences are explained below:

2013 2012

£'000 £'000

Profit for the year before taxation 1,147 7,623

Taxation at 23.25 per cent (2012: 24.5%) 267 1,868

Effects of:

Other differences (3,491) (1,824)

Joint ventures and associate - (33)

Deferred tax rate adjustment 898 343

Tax (credit)/charge for the period (2,326) 354

The main component of other differences in the reconciliation relates to
capital gains of £2.4 million (2012: £0.8 million) and indexation allowances of
£0.7 million (2012: £0.8 million).

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.

Deferred tax provision has been made for gains on revaluing investment
properties. At present it is not envisaged that any tax will become payable in
the foreseeable future.

7. Discontinued operations and assets and liabilities classified as held for
sale

A. Disposals

As part of the Group's strategy to focus on core assets, the Group disposed of
the following properties during the year. The profits and losses arising from
these disposals are classified as discontinued operations:

Property
King Edward Court, Windsor
Chesterfield
Halifax

Contracts for the sale of King Edward Court had been exchanged at the date of
the accounts and completion took place in January 2014. The transaction has,
though, been included as a discontinued operation in order to display a true
and fair view.

B. Result for the year of discontinued operations

2013 2012

£'000 £'000

Gross property income 7,370 8,227

Direct property costs (720) (623)

Net property income 6,650 7,604

Overheads (93) (58)

Net revenue from property 6,557 7,546

Loss on sale of investment properties (165) -

6,392 7,546

Finance expenses (5,990) (6,282)

Debenture break costs (545) -

(143) 1,264

Net (decrease)/increase on revaluations of investment (5,351) 14,594
properties

Share of loss of joint venture after tax (315) (591)

Interest rate derivative 5,348 (1,757)

(Loss)/profit before tax attributable to shareholders (461) 13,510

Income tax 1,626 1,275

C. Cash flows from discontinued operations

2013 2012

£'000 £'000

Cash flows from operating activities 6,392 7,546

Cash flows from investing activities 9.310 19

Cash flows from financing activities (15,021) (7,528)

Net cash inflow from discontinued operations 681 37

D.Summary of assets and liabilities associated with assets held for sale

2013

£'000

Investment properties 102,663

Present value of head leases 23,627

Property 126,290

Trade and other receivables 300

Assets held for sale 126,590

Net current borrowings (70,000)

Trade and other payables (3,297)

Interest rate derivatives (14,599)

Present value of head leases (23,627)

Liabilities associated with assets held for sale (111,523)

Net assets associated with assets held for sale 15,067

8. Dividend

2013 £'000 2012 £'000

Per share Per share

Dividends paid during the year relating to the - - 0.75p 630
prior period

Dividends to be paid:

Proposed final dividend 0.125p 105 - -

9. Profit per share and net assets per share

Profit per share has been calculated as follows:

2013 2012

Profit for the year for the purposes of basic and diluted profit 3,473 7,269
per share (£'000)

Weighted average number of ordinary shares in issue for the 84,266 84,004
purpose of basic profit per share ('000)

Basic profit per share 4.12p 8.65p

Weighted average number of ordinary shares in issue for the 84,266 84,004
purpose of diluted profit per share ('000)

Fully diluted profit per share 4.12p 8.65p

Weighted average number of shares in issue is calculated after excluding
treasury shares of 1,254,738 (2012: 1,538,398).

The profit for continuing operations was £2,308,000 (2012: loss £7,516,000) and
discontinued operations was £1,165,000 (2012: £14,785,000).

There was no dilutive effect of the outstanding options in either year.

Net assets per share have been calculated as follows:

2013 2012

Net assets (£'000) 49,734 46,457

Shares in issue ('000) 84,288 84,004

Basic net assets per share 59.00p 55.30p

Net assets diluted (£'000) 49,734 46,485

Shares in issue ('000) 84,288 84,074

Diluted net assets per share 59.00p 55.29p

10. Property and plant and equipment

Investment Properties

Total Freehold Leasehold Leasehold Office

£'000 £'000 over under equipment

50 years 50 years and motor

£'000 £'000 vehicles

£'000

Cost or valuation at 1 January 2013 234,069 77,257 156,506 306 1,136

Additions 14 - 14 - 33

Disposals (9,475) (7,585) (1,890) - (145)

Discontinued operations (126,290) - (126,290) - -

Decrease in present value of head (433) - (433) - -
leases

(Decrease)/increase on revaluation (5,839) 827 (6,641) (25) -

Cost or valuation at 31 December 2013 92,046 70,499 21,266 281 1,024

Representing assets stated at:

Valuation 87,449 70,499 16,675 275 -

Present value of head leases 4,597 - 4,591 6 -

Cost - - - - 1,024

92,046 70,499 21,266 281 1,024

Depreciation at 1 January 2013 - - - - 876

Charge for the year - - - - 54

Disposals - - - - (109)

Depreciation at 31 December 2013 - - - - 821

Net book value at 1 January 2013 234,069 77,257 156,506 306 260

Net book value at 31 December 2013 92,046 70,499 21,266 281 203

Investment Properties

Total Freehold Leasehold Leasehold Office

£'000 £'000 over under equipment

50 years 50 years and motor

£'000 £'000 vehicles

£'000

Cost or valuation at 1 January 2012 222,409 79,678 142,275 456 1,344

Additions 972 626 346 - 37

Disposals - - - - (245)

Decrease in present value of head (4) - (4) - -
leases

Increase/(decrease) on revaluation 10,692 (3,047) 13,889 (150) -

Cost or valuation at 31 December 2012 234,069 77,257 156,506 306 1,136

Representing assets stated at:

Valuation: 205,412 77,257 127,855 300 -

Present value of head leases 28,657 - 28,651 6 -

Cost - - - - 1,136

234,069 77,257 156,506 306 1,136

Depreciation at 1 January 2012 - - - - 860

Charge for the year - - - - 188

Disposals - - - - (172)

Depreciation at 31 December 2012 - - - - 876

Net book value at 1 January 2012 222,409 79,678 142,275 456 484

Net book value at 31 December 2012 234,069 77,257 156,506 306 260

The leasehold and freehold properties, excluding the present value of head
leases and directors valuations, were valued as at 31 December 2013 by external
professional firms of chartered surveyors. The valuations were made at fair
value. The directors property valuations were made at fair value.

2013 2012

£'000 £'000

Allsop LLP 84,130 201,235

Woolhouse Real Estate 1,494 -

BNP Paribas Real Estate - 4,177

Directors valuations 1,825 -

87,449 205,412

Add: Present value of headleases 4,597 28,657

92,046 234,069

The historical cost of investment properties, including total capitalised
interest of £1,161,000 (2012: £6,051,000) was as follows:

Freehold 2013 Short Freehold 2012 Short

£'000 Leasehold Leasehold £'000 Leasehold Leasehold

Over 50 £'000 Over 50 £'000

years years

£'000 £'000

Cost at 1 January 76,759 122,235 785 76,133 121,889 785

Additions - 14 - 626 346 -

Disposals (12,360) (2,322) - - - -

Discontinued operations - (101,995) - - - -

Cost at 31 December 64,399 17,932 785 76,759 122,235 785

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 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
implanting this change in arriving at its valuation.

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 in 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 inputs to valuations are not based on observable
market data.

Class of property Carrying Valuation Key Range (weighted
/ technique unobservable average) 2013
Level 3 inputs
Fair
value

2013

£'000

Freehold - external 68,674 Income Estimated £4 - £41
valuation capitalisation Rental Value
(£23)
Per sq ft p.a
5.3% - 10.5%
Equivalent
Yield (6.9%)

Leasehold over 50 years 21,266 Income Estimated £7 - £20
- external valuation capitalisation Rental Value
(£15)
Per sq ft p.a
8.9% - 14.3%
Equivalent
Yield (9.6%)

Leasehold under 50 281 Income Estimated £5
years - external capitalisation Rental Value
valuation (£5)
Per sq ft p.a
23.7%
Equivalent
Yield (23.7%)

Freehold - Directors 1,825 Income Estimated £5
valuation capitalisation Rental Value
(£5)
Per sq ft p.a
8.3%
Equivalent
Yield (8.3%)

At 31 December 2013 92,046

The table below illustrates the impact of changes in key unobservable inputs on
the carrying / fair value of the Group's properties.

Estimated rental Equivalent
value yield

10% increase or 25 basis point
(decrease) contraction

£'000 or (expansion)

£'000

Freehold - external valuation 5,883/(5,333) 2,891/(2,673)

Leasehold over 50 years - external valuation 1,404/(1,399) 476/(586)

Leasehold under 50 years - external valuation 21/(31) 3/(3)

Freehold - Directors valuation 153/(153) 56/(53)

11. Investment in joint ventures

2013 2012

£'000 £'000

Group share of:

Turnover 420 638

Loss before tax (195) (683)

Taxation (21) 49

Loss after tax (216) (634)

Split:

Profit/(loss) after tax - continuing operations 99 (43)

- discontinued operations (315) (591)

Non-current assets 3,608 7,522

Current assets 2,050 2,013

Current liabilities (644) (6,040)

Non-current liabilities (2,407) (2,158)

Net assets 2,607 1,337

Analytical Ventures Limited (Analytical Ventures) - unlisted property
investment company. The Company owned 50 per cent of the issued share capital
and £1,907,479 of loan stock of Analytical Ventures. Analytical Ventures became
a 100% subsidiary of the Company in December 2013 and the Company acquired the
remaining loan stock from Uberior.

Dragon Retail Properties Limited (Dragon) - unlisted property trading and
investment company. The Company owns 50 per cent of the issued share capital.
The remaining 50 per cent is owned by Bisichi Mining PLC. Dragon is
incorporated and operates in England and Wales and has issued share capital of
500,000 ordinary shares of £1 each (2012: 500,000 ordinary shares of £1 each).
Dragon is managed by a board of directors with neither party having overall
control.

Langney Shopping Centre Unit Trust (Langney) - unlisted property investment
unit trust. The Company acquired 12.50 per cent of the total ordinary units in
issue in June 2011. A further 12.50 per cent is owned by Bisichi Mining PLC.
The remaining 75 per cent is owned by Columbus Capital Management LLP. Langney
is incorporated in Jersey and has 7,707 (2012: 7,101) ordinary units in issue
of £1,000 each. The Company has a management contract to manage the property
for Langney and accordingly has a significant influence in Langney. It is a
single asset unit trust. During the year the unit holders made additional
capital contributions in proportion to their original holdings and the
Company's share was £75,750.

Shares in joint ventures:

2013 2012

£'000 £'000

At 1 January 1,337 2,039

Share of loss after tax (216) (634)

Dividend received - (68)

Investment in shares 76 -

Transferred to subsidiary undertaking 1,410 -

1,270 (702)

At 31 December 2,607 1,337

12. Investments in associated company

Associate

2013 2012

£'000 £'000

Bisichi Mining PLC - listed mining and property investment
company

Group share of:

Turnover 14,741 15,100

Profit before tax 41 818

Taxation 110 (273)

Profit after tax 151 545

Non-current assets 9,646 10,397

Current assets 5,450 4,624

Current liabilities (6,662) (6,005)

Non-current liabilities (1,297) (1,560)

Minority interest (151) (185)

Net assets 6,986 7,271

2013 2012

£'000 £'000

Share in associate:

At 1 January 7,271 7,011

Share of profit after tax 151 545

Equity share options 62 11

Currency translation (321) (122)

Dividend received (177) (174)

(285) 260

At 31 December 6,986 7,271

The company owns 42 per cent (2012: 42 per cent) of the issued share capital of
Bisichi Mining PLC (Bisichi), a company registered in England and Wales.
Bisichi has an issued share capital of 10,636,839 (2012: 10,556,839) ordinary
shares of 10p each, and its principal countries of operation are the United
Kingdom (property investment) and South Africa (coal mining). Bisichi is an
associated undertaking because London & Associated Properties PLC has a
participating interest. Bisichi has an independent board of directors which
controls its operating and financial policies.

The market (bid) value of this investment at 31 December 2013 was £4,865,000
(2012: £4,654,000). No impairment is necessary as the Directors consider the
market value deficit temporary, having conducted a detailed impairment review.

13. Held to maturity investments

2013 Unlisted Loan 2012 Unlisted Loan
Stock Stock
Total Shares Total Shares
in joint in joint
£'000 £'000 £'000 £'000
ventures ventures

£'000 £'000

Cost

At 1 January 1,913 5 1,908 1,998 5 1,993

Loan stock issued 26 - 26 - - -

Repayments (511) - (511) (85) - (85)

Reclassification (1,423) - (1,423) - - -

Impairment (5) (5) - - - -

Additions - HRGT 2,200 2,200 - - - -

At 31 December 2,200 2,200 - 1,913 5 1,908

HRGT - The Company acquired a 6.95% interest in the equity of HRGT Shopping
Centres LP (HRGT), a limited partnership set up in England to acquire and own 3
shopping centres in Dunfermline, Kings Lynn and Loughborough. 92.10% of the
equity is owned by Oaktree Capital Management and 0.95% by Gooch Cunliffe Whale
LLP. London & Associated Management Services Limited has a management contract
to manage the properties on behalf of HRGT.

14. Trade and other receivables

2013 2012

£'000 £'000

Trade receivables 1,009 1,261

Amounts due from associate and joint ventures 382 178

Other receivables 214 221

Prepayments and accrued income 1,751 2,996

3,356 4,656

The Directors consider that the carrying amount of trade and other receivables
approximates to their fair value.

15. Investments held for trading

2013 2012

£'000 £'000

Market bid value of the listed investment portfolio 23 20

Unrealised deficit of market value over cost - (3)

Listed investment portfolio at cost 23 23

All investments are listed on the London Stock Exchange.

16. Trade and other payables

2013 2012

£'000 £'000

Trade payables 149 1,409

Amounts owed to joint ventures 3,300 3,266

Other taxation and social security costs 744 1,216

Other payables 1,322 939

Accruals and deferred income 4,740 5,684

10,255 12,514

The Directors consider that the carrying amount of trade and other payables
approximates to their fair value.

17. Borrowings

Current borrowings - amounts falling due within one year

2013 2012

£'000 £'000

£5 million First Mortgage Debenture Stock 2013 at 11.3 per cent - 5,000

Bank overdrafts (secured) 1,490 3,275

£1 million term bank loan repayable by 2015 (unsecured) 258 247

£47 million revolving credit facility repayable in 2013* 44,170 44,144
(secured)

45,918 52,666

Non-current borrowings - amounts falling due after more than one year

2013 2012

£'000 £'000

Term borrowings

Debenture stocks:

£1.7 million First Mortgage Debenture Stock 2016 at 8.67 per cent - 1,700

£5 million First Mortgage Debenture Stock 2018 at 11.6 per cent 5,000 5,000

£10 million First Mortgage Debenture Stock 2022 at 8.109 per cent 9,855 9,837
*

14,855 16,537

Term bank loans:

£1 million term bank loan repayable by 2015 201 460

£70 million term bank loan repayable in 2014* - 69,927

201 70,387

15,056 86,924

* The £10 million debenture and bank loans are shown after deduction of
outstanding amortised issue costs.

Interest payable on the term bank loans is variable being based upon the London
inter-bank offered rate (LIBOR) plus margin.

First Mortgage Debenture Stocks August 2018 and 2022 and the £44 million bank
facility repayable in July 2013 are secured on specific freehold and leasehold
properties which are included in the financial statements at a value of £85.8
million. The Directors are working with the bank and advisors on the renewal of
the facility to June 2014 and its replacement with a longer term loan.

An adjustment to the £5 million 2018 debenture stock agreement in the year,
amended the terms to £1 million repayments in August 2016 and August 2017 and £
3 million repayment in 2018.

The bank loans and debentures are secured by way of a first charge over the
investment properties in the UK.

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.

18. Financial instruments

Treasury policy

The Group enters into 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 and market price risk. The
policies for managing each of these risks and the principal effects of these
policies on the results are summarised below.

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
bank loans are secured by way of a first charge on certain fixed assets. The
rates of interest vary based on LIBOR in the UK.

Sensitivity analysis

As all term debt has been covered by hedged derivatives it is not considered
that there is any material sensitivity for the Group to changes in interest
rates.

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 LIBOR
in the UK. These facilities are considered adequate to meet the Group's
anticipated cash flow requirements for the foreseeable future.

The table below analyses the Group's financial liabilities into maturity
Groupings and also provides details of the liabilities that bear interest at
fixed, floating and non-interest bearing rates.

Less than 2-5 years Over 2013

1 year £'000 5 years Total

£'000 £'000 £'000

Bank overdrafts (floating) 1,490 - - 1,490

Debentures (fixed) - 5,000 10,000 15,000

Bank loans (floating)* 44,452 201 - 44,653

Trade and other payables 10,255 - - 10,255
(non-interest)

56,197 5,201 10,000 71,398

Less than 2-5 years Over 2012

1 year £'000 5 years Total

£'000 £'000 £'000

Bank overdrafts (floating) 3,275 - - 3,275

Debentures (fixed) 5,000 1,700 15,000 21,700

Bank loans (floating)* 44,441 70,460 - 114,901

Trade and other payables (non-interest) 12,514 - - 12,514

65,230 72,160 15,000 152,390

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.

*All the bank loans are fully hedged with appropriate interest derivatives.
Details of all hedges are shown below.

Market price risk

The Group is exposed to market price risk through interest rate and currency
fluctuations.

Credit risk

At the balance sheet date there were no significant concentrations of credit
risk. The maximum exposure to credit risk is represented by the carrying amount
of each financial asset in the balance sheet. The Group only deposits surplus
cash with well-established financial institutions of high quality credit
standing.

Borrowing facilities

At 31 December 2013 London & Associated Properties PLC was within its bank
borrowing facilities and was not in breach of any of the covenants. Overdrafts
are renewable annually. Term loan repayments are as set out below. Details of
other financial liabilities are shown in Notes 16 and 17.

The Group has undrawn facilities of £2,510,000 (2012: £3,531,000) as follows:

2013 2012

£'000 £'000

Overdrafts 2,510 725

Term facilities expiring in one year - 2,806

2,510 3,531

Hedge profile

The amount recognised in the income statement for continuing operations was a
gain of £4,419,000. Had the hedges had been valued at the net present value of
the fair value to the business (as last year), the amount recognised in the
income statement would have been a gain of £6,065,000. Thus, in relation to
continuing operations, the profit has been reduced by £1,646,000 in the current
year. There is no impact on the income statement for discontinued operations
because the sale of Windsor required the hedging instrument to be terminated,
and so had to be accounted for on a terminated basis.

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).

Level Level Level Total 2013
1 2 3
£'000 Gain/
£'000 £'000 £'000 (loss)

to income

statement

'000

Financial assets

Other financial assets held for trading

Quoted equities 23 - - 23 3

Financial liabilities

Derivative financial instruments

Interest rate swaps - 9,569 - 9,569 4,419

Discontinued

Derivative financial instruments

Interest rate swaps - 14,599 - 14,599 5,348

Level Level Level Total 2012
1 2 3
£'000 Gain/
£'000 £'000 £'000 (loss)

to income

statement

'000

Financial assets

Other financial assets held for trading

Quoted equities 20 - - 20 4

Financial liabilities

Derivative financial instruments

Interest rate swaps - 33,935 - 33,935 (3,085)

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
exclude 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. During
2013 this decreased to 94.1% per cent (2012: 180.9 per cent) which was
calculated as follows:

2013 2012

£'000 £'000

Total debt 60,974 139,590

Less cash and cash equivalents (6,990) (8,303)

Net debt 53,984 131,287

Total equity 57,389 72,587

94.1% 180.9%

All the debt, apart from the overdrafts, is at fixed rates of interest as shown
in Notes 17 and 18. The Group does not have any externally imposed capital
requirements.

Financial assets

Financial assets are disclosed in Notes 13, 14 and 15 and above.

The Group's principal financial assets are bank balances and cash, trade and
other receivables and investments. 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.

2013 2012

£'000 £'000

Cash at bank and in hand 6,990 8,303

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

Repayment of borrowings

Bank loans and overdrafts:

Repayable on demand or within one year 45,918 47,666

Repayable between two and five years 201 70,387

46,119 118,053

Debentures:

Repayable within one year - 5,000

Repayable between two and five years 5,000 1,700

Repayable in more than five years 9,855 14,837

60,974 139,590

Certain borrowing agreements contain financial and other conditions that if
contravened by the Group, could alter the repayment profile.

Group undrawn banking facilities

Which expire within one year 2,510 3,531

Interest rate risk and hedge profile

2013 2012

£'000 £'000

Fixed rate borrowings 15,000 21,700

Floating rate borrowings

- Subject to interest rate swap 50,400 120,400

- Excess hedge (4,281) (5,499)

61,119 136,601

Average fixed interest rate 9.27% 9.69%

Weighted average swapped interest rate 7.19% 6.00%

Weighted average cost of debt on overdrafts, bank loans and 7.58% 6.48%
debentures

Average period for which borrowing rate is fixed 7.7 6.5
years years

Average period for which borrowing rate is swapped 13.9 14.9
years years

The swapped interest rate have calls by the bank 0.9 1.9
years years

The Group's floating rate debt bears interest based on LIBOR for the term bank
loans and Bank base rate for the overdrafts.

Total financial assets and liabilities

The Group's financial assets and liabilities and their fair values are as
follows:

Fair 2013 Fair 2012

value Carrying Value Carrying

£'000 value £'000 value

£'000 £'000

Cash and cash equivalents 6,990 6,990 8,303 8,303

Financial assets - investments held for 23 23 20 20
trading

Other assets 3,363 3,363 4,656 4,656

Derivative liabilities (9,569) (9,569) (33,935) (33,935)

Bank overdrafts (1,490) (1,490) (3,275) (3,275)

Bank loans (44,653) (44,629) (114,901) (114,778)

Present value of head leases on (3,235) (3,235) (28,657) (28,657)
properties

Other liabilities (10,275) (10,275) (12,514) (12,514)

Total financial liabilities before (58,846) (58,822) (180,303) (180,180)
debentures

Fair value of debenture stocks

Fair value of the Group's debenture liabilities:

Book Fair 2013 2012

value value Fair value Fair Value

£'000 £'000 adjustment adjustment

£'000 £'000

Debenture stocks (15,000) (19,365) (4,365) (6,911)

Tax at 20 per cent (2012: 23 per cent) 873 1,590

Post tax fair value adjustment (3,492) (5,321)

Post tax fair value adjustment - basic (3.7)p (8.23)p
pence per share

There is no material difference in respect of other financial liabilities or
any financial assets.

The fair values were calculated by the directors as at 31 December 2013 and
reflect the replacement value of the financial instruments used to manage the
Group's exposure to adverse rate movements.

The fair values of the debentures are based on the net present value at the
relevant gilt interest rate of the future payments of interest on the
debentures. The bank loans and overdrafts are at variable rates and there is no
material difference between book values and fair values.

19. Deferred tax

2013 2012

£'000 £'000

Deferred tax asset balance at 1 January (3,324) (3,678)

Transfer to consolidated income statement (2,327) 354
Balance at 31 December (5,651) (3,324)

The deferred tax balance comprises the following:

Revaluation of investment properties 3,020 4,177

Accelerated capital allowances 1,029 1,896

Fair value of interest derivatives (4,833) (7,805)

Short-term timing differences 143 1,069

(641) (663)

Loss relief (5,010) (2,661)

Deferred tax asset provision at end of period (5,651) (3,324)

The directors consider the temporary differences arising in connection with the
interests in associate and joint ventures are insignificant. There is no time
limit in respect of the Group tax loss relief.

20. Share capital

Number of Number of 2013 2012

ordinary ordinary £'000 £'000
10p 10p

shares shares

2013 2012

Authorised: Ordinary shares of 10p each 110,000,000 110,000,000 11,000 11,000

Allotted, issued and fully paid share 85,542,711 85,542,711 8,554 8,554
capital

Less: held in Treasury (see below) (1,254,738) (1,538,398) (125) (154)

"Issued share capital" for reporting 84,287,973 84,004,313 8,429 8,400
purposes

The company has one class of ordinary shares which carry no right to fixed
income.

Treasury shares

Number of ordinary Cost/issue
10p shares value

2013 2012 2013 2012

£'000 £'000

Shares held in Treasury at 1 January 1,538,398 1,538,398 1,421 1,421

Issued to meet directors bonuses (Jan 13 (103,580) - (96) -
-22p)

Issued to meet staff bonuses (Jan 13 -22p) (64,818) - (60) -

Issued for new directors share incentive plan (27,272) - (25) -
(Jan 13 -22p)

Issued for new staff share incentive plan (63,208) - (58) -
(Jan 13 - 22p)

Issued for new directors share incentive plan (4,673) - (4) -
(Jan 13 -21.75p)

Issued for new staff share incentive plan (20,109) - (19) -
(Jan 13 -21.75p)

Shares held in Treasury at 31 December 1,254,738 1,538,398 1,159 1,421

Share Option Schemes

Employees' share option scheme (Approved scheme)

At 31 December 2013 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 Her 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 2013 is as follows:

Changes during the year

At 1 Options Options Options At 31

January Exercised granted lapsed December

2013 2013

Shares issued to date 2,367,604 - - - 2,367,604

Options granted which have not been 70,000 - - (70,000) -
exercised

Shares allocated over which options 1,549,955 - - - 1,549,955
have not been granted

Total shares allocated for issue to 3,987,559 - - (70,000) 3,917,559
employees under the scheme

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 2013
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 2013 is as follows:

Changes during the year

At 1 Options Options Options At 31

January Exercised granted lapsed December

2013 2013

Shares issued to date 450,000 - - - 450,000

Shares allocated over which options 550,000 - - - 550,000
have not yet been granted

Total shares allocated for issue to 1,000,000 - - - 1,000,000
employees under the scheme

21. Related party transactions

Cost Amounts Cash
recharged Owed advanced

to/(by) (to)/by to/(by)
related related related

party party party

£'000 £'000 £'000

Related party:

Dragon Retail Properties Limited

Current account (95) (95) -

Loan account - (3,205) -

Langney Shopping Centre Unit Trust

Current account 92 (ii) 40 -

Loan account - 232 232

Bisichi Mining PLC

Current account 138 (i) 138 -

Simon Heller Charitable Trust

Current account (30) (30) -

Loan account - (700) (700)

Directors and key management

M A Heller and J A Heller 16 (ii) 8 -

H D Goldring (Delmore Asset Management (25) (iii) - -
Limited)

C A Parritt (18) (iv) - -

R Priest (Alvarez & Marsal Real Estate (17) (iv) - -
Advisory Services LLP)

Totals at 31 December 2013 61 (3,612) (468)

Totals at 31 December 2012 247 (3,073) (2,019)

Nature of costs recharged - (i) Management fees (ii) Property management fees
(iii) Portfolio management fees (iv) Consultancy fees. The related party
companies above are the associate and joint ventures and are treated as non
current asset investments - details are shown in Notes 11 and 12.

Dragon Retail Properties Limited (joint venture)

Dragon Retail Properties Limited (Dragon) is owned 50 per cent by the Company,
and 50 per cent by Bisichi Mining PLC.

Dragon had surplus cash which was deposited equally with London & Associated
Properties PLC and Bisichi Mining PLC. The £1.2 million deposit is currently
interest free. Dragon loaned £2m to the Company at an interest rate of 6.875
per cent.

Langney Shopping Centre Unit Trust (joint venture)

Langney Shopping centre Unit Trust (Langney) is owned 12.5 per cent by the
Company and 12.5 per cent by Bisichi Mining PLC. The remaining 75 per cent is
owned by Columbus Capital Management LLP. During the year LAP loaned £232,000
at an interest rate of 20 per cent.

The Company provides office premises, property management, general management,
accounting and administration services for Dragon and property management
services to Langney.

Bisichi Mining PLC (associate)

The Company provides office premises, property management, general management,
accounting and administration services for Bisichi Mining PLC and its
subsidiaries.

Directors

London & Associated Properties PLC provides office premises, property
management, general management, accounting and administration services for a
number of private property companies in which Sir Michael Heller and J A Heller
have an interest. Under an agreement with Sir Michael Heller no charge is made
for these services on the basis that he reduces by an equivalent amount the
charge for his services to London & Associated Properties PLC. The board
estimates that the value of these services, if supplied to a third party, would
have been £300,000 for the year (2012: £275,000).

The companies for which services are provided are: Barmik Properties Limited,
Cawgate Limited, Clerewell Limited, Cloathgate Limited, Ken-Crav Investments
Limited, London & South Yorkshire Securities Limited, Metroc Limited, Penrith
Retail Limited, Shop.com Limited, South Yorkshire Property Trust Limited,
Wasdon Investments Limited, Wasdon (Dover) Limited, and Wasdon (Leeds) Limited.

In addition the Company received management fees of £10,000 (2012: £10,000) for
work done for two charitable foundations, the Michael & Morven Heller
Charitable Foundation and the Simon Heller Charitable Trust.

The Simon Heller Trust has placed on deposit with LAP £700,000 at an interest
rate of 9% and refundable on demand.

Delmore Asset Management Limited (Delmore) is a company in which H D Goldring
is a majority shareholder and director. Delmore provides consultancy services
to the company on an invoiced fee basis.

Alvarez & Marsal Real Estate Advisory Services LLP (A&M) is a company in which
R Priest is a director. A&M provides consultancy services to the company on an
invoiced fee basis.

Sir Michael Heller is a director of Bisichi Mining PLC, the associated company
and received a salary from that company of £75,000 (2012: £75,000) for
services.

J A Heller received a loan of £20,000, which has been repaid in the year.

The directors are considered to be the only key management personnel and their
remunerations including employers national insurance for the year were £
1,485,000 (2012: £883,000). All other disclosures required including interest
in share options in respect of those directors are included within the
remuneration report.

22. Employees

The average number of employees, including directors, of the Group during the
year involved in management and administration was 29 (2012: 28).

2013 2012

£'000 £'000

Staff costs during the year were as follows:

Salaries and other costs 2,108 1,427

Social security costs 260 181

Pension costs 362 338

2,730 1,946

23. Capital Commitments

2013 2012

£'000 £'000

Commitments to capital expenditure contracted for at the year end - -

The Group's share of capital commitments of joint ventures at the year end
amounted to £Nil (2012: £Nil).

24. Operating and finance leases

Operating leases on land and buildings

At 31 December 2013 the Group had commitments under non-cancellable operating
leases on land and buildings as follows:

2013 2012

£'000 £'000

Within one year 324 600

In the second to fifth years inclusive - 324

324 924

Operating lease payments represent rentals payable by the Group for its office
premises.

The leases are for an average term of 5 years and rentals are fixed for an
average of one year.

Present value of head leases on properties

Minimum lease Present value
of minimum
payments
lease payments

2013 2012 2013 2012

£'000 £'000 £'000 £'000

Amounts payable under finance leases:

Within one year 294 1,821 294 1,821

In the second to fifth years inclusive 1,177 7,285 1,094 6,770

After five years 29,181 225,472 3,209 20,066

30,653 234,578 4597 28,657

Future finance charges on finance leases (26,056) (205,921) - -

Present value of finance lease liabilities 4,597 28,657 4,597 28,657

Finance lease liabilities are in respect of leased investment property. Many
leases provide for contingent rent in addition to the rents above, usually a
proportion of rental income.

Finance lease liabilities are effectively secured as the rights to the leased
asset revert to the lessor in the event of default.

Future aggregate minimum 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:

2013 2012

£'000 £'000

Within one year 7,303 12,706

In the second to fifth years inclusive 18,058 46,628

After five years 29,788 66,579

55,149 125,913

25. Contingent liabilities and post balance sheet events

There were no contingent liabilities at 31 December 2013 (2012: £Nil), except
as disclosed in Note 18.

Since the year end the Group has terminated a 20 year swap with a notional
value of £70,000,000 with a 7 year call in favour of the bank, taken out in
November 2007, at 4.76%; a 20 year swap with a notional value of £10,400,000
with a 7 year call in favour of the bank, taken out in November 2007, at 4.76%
and £20,000,000 of a 20 year swap with a notional value of £40,000,000 with a 7
year call in favour of the bank, taken out in December 2007, at 4.685%; leaving
a notional £20,000,000 of swap at 4.685% outstanding. The exit cost incurred in
2014 associated with closing these instruments are £20.9m.

On 17 January 2014 the disposal of Windsor Shopping Centre was completed for £
104.7m. Full details are included in Note 7.

26. Company financial statements

Company balance sheet at 31 December 2013

Notes 2013 2012

£'000 £'000

Fixed assets

Tangible assets 26.3 65,912 76,972

Other investments:

Associated company 26.4 489 489

Subsidiaries and others 26.4 47,649 46,196

26.4 48,138 46,685

114,050 123,657

Current assets

Debtors 26.5 15,436 24,287

Investments 26.6 23 20

Bank balances 4,969 6,022

20,428 30,329

Creditors

Amounts falling due within one year 26.7 (78,711) (97,083)

Net current liabilities (58,283) (66,754)

Total assets less current liabilities 55,767 56,903

Creditors

Amounts falling due after more than one year 26.8 (24,625) (30,985)

Net assets 31,142 25,918

Capital and reserves

Share capital 26.10 8,554 8,554

Share premium account 26.11 4,866 4,866

Capital redemption reserve 26.11 47 47

Revaluation reserve 26.11 2,151 6,853

Treasury shares 26.10 (1,159) (1,421)

Retained earnings 26.11 16,683 7,019

Shareholders' funds 31,142 25,918

These financial statements were approved by the board of directors and
authorised for issue on 17 April 2014 and signed on its behalf by:

Sir Michael Heller R J Corry
Director Director

Company Registration No. 341829

26.1. Company

Accounting policies

The following are the main accounting policies of the Company:

Basis of accounting

The financial statements have been 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 and in accordance with applicable accounting
standards. All accounting policies applied are consistent with those of prior
periods.

Investment properties are accounted for in accordance with SSAP 19, "Accounting
for Investment Properties", which provides that these should not be subject to
periodic depreciation charges, but should be shown at open market value. This
is contrary to the Companies Act 2006 which states that, subject to any
provision for depreciation or diminution in value, fixed assets are normally to
be stated at purchase price or production cost. Current cost accounting or the
revaluation of specific assets to market value, as determined at the date of
their last valuation, is also permitted.

The treatment of investment properties under the Companies Act 2006 does not
give a true and fair view as these assets are not held for consumption in the
business but as investments, the disposal of which would not materially affect
any manufacturing or trading activities of the enterprise. In such a case it is
the current value of these investments, and changes in that current value,
which are of prime importance. Consequently, for the proper appreciation of the
financial position, the accounting treatment required by SSAP 19 is considered
appropriate for investment properties. Details of the current value and
historical cost information for investment properties are set out in Note 26.3.
Depreciation or amortisation is only one of the many factors reflected in the
annual revaluation and the amount that might otherwise have been shown cannot
be separately identified or quantified.

The financial statements have been prepared on a going concern basis. Further
details of which are contained in Group accounting policies, in the Finance
Director's report and Directors' report.

Revenue

Revenue comprises rental income, listed investment sales, dividends and other
income. The profit or loss on disposal of properties is recognised on
completion of sale.

Dividends receivable

Dividends are credited to the profit and loss account when the dividend is
received.

Tangible fixed assets

a Investment properties

An external professional valuation of investment properties is carried out
every year. Properties professionally valued by Chartered Surveyors are on an
existing use open market value basis, in accordance with the Practice
Statements contained within the RICS valuation standards 2012 prepared by the
Royal Institution of Chartered Surveyors. Directors valuation of properties are
at fair value.

The cost of improvements includes attributable interest.

b) Other tangible fixed assets

Other tangible fixed assets are stated at historical cost. Depreciation is
provided on all other tangible fixed assets at rates calculated to write each
asset down to its estimated residual value evenly over its expected useful
life. The rates generally used are - office equipment - 10 to 33 per cent per
annum, and motor vehicles - 20 per cent per annum, on a straight line basis.

Investments

Long term investments are described as participating interests and are
classified as fixed assets. Short term investments are classified as current
assets.

a) Investments held as fixed assets
These comprise investments in subsidiaries and investments in Dragon Retail
Properties Limited and Langney Shopping Centre Unit Trust (unlisted joint
ventures), Bisichi Mining PLC (listed associate), and in unlisted companies
which are all held for the long term. Provision is made for any impairment in
the value of fixed asset investments.

b) Investments held as current assets

Investments held for trading are included in current assets and are revalued to
fair value. For listed investments, fair value is the bid market listed value
at the balance sheet date. Realised and unrealised gains or losses arising from
changes in fair value are included in the income statement of the period in
which they arise.

Financial Instruments

Bank loans and overdrafts

Bank loans and overdrafts are included in creditors on the Company balance
sheet at the amounts drawn on the particular facilities. Interest payable on
those facilities is expensed as a finance cost in the period to which it
relates.

Interest rate derivatives

The company uses derivative financial instruments to hedge the interest rate
risk associated with the financing of the company's business. No trading in
such financial instruments is undertaken.

At previous reporting dates, these interest rate derivatives were recognised at
their fair value, being the Net Present Value of the difference between the
hedged rate of interest and the current market rate of interest assuming that
this rate was applied for the remainder of the hedge. Because the Directors
have decided to terminate all interest rate derivatives they are now shown at
their estimated termination value.

Where a derivative is designated as a hedge for the variability of a highly
probable forecast transaction e.g. an interest payment, the element of the gain
or loss on the derivative that is an effective hedge is recognised directly in
equity. When the forecast transaction subsequently results in the recognition
of a financial asset or a financial liability, the associated gains or losses
that were recognised directly in equity are reclassified into the income
statement in the same period or periods during which the asset acquired or
liability assumed affects the income statement
e.g. when interest income or expense is recognised.

The gain or loss arising from any adjustment to the fair value is recognised in
the income statement.

Debtors

Debtors do not carry any interest and are stated at their nominal value as
reduced by appropriate allowances for estimated irrecoverable amounts.

Creditors

Creditors are not interest bearing and are stated at their nominal value.

Joint ventures

Investments in joint ventures, being those entities over whose activities the
Group has joint control as established by contractual agreement, are included
at cost.

Deferred taxation

Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future or a right to
pay less tax in the future have occurred at the balance sheet date. Timing
differences are differences between the company's taxable profits and its
results as stated in the financial statements. Deferred tax is measured at the
average tax rates which are expected to apply in the periods in which timing
differences are expected to reverse, based on tax rates and laws that have been
enacted or substantially enacted by the balance sheet date. Deferred tax is
measured on a non-discounted basis.

Leased assets and obligations

All leases are "Operating Leases" and the annual rentals are charged to the
profit and loss account on a straight line basis over the lease term. Rent free
periods or other incentives received for entering into a lease are accounted
for over the period of the lease so as to spread the benefit received over the
lease term.

Retirement benefits

For defined contribution schemes the amount charged to the profit and loss
account in respect of pension costs and other post retirement benefits is the
contributions payable for the year. Differences between contributions payable
in the year and contributions actually paid are shown as either prepayments or
accruals at the balance sheet date.

26.2. Profit for the financial year

The Company's profit for the year was £9,864,000 (2012 loss: £6,791,000). 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.

26.3. Tangible assets

Investment Properties Office

Total Freehold Long Short Equipment

£'000 £'000 leasehold leasehold and motor

£'000 £'000 vehicles

£'000

Cost or valuation at 1 January 2013 77,894 56,557 19,855 300 1,182

Additions 33 - - - 33

Disposals (6,446) (4,411) (1,890) - (145)

Decrease on revaluation (4,702) (3,387) (1,290) (25) -

Cost or valuation at 31 December 2013 66,779 48,759 16,675 275 1,070

Representing assets stated at:

Valuation 65,709 48,759 16,675 275 -

Cost 1,070 - - - 1,070

66,779 48,759 16,675 275 1,070

Depreciation at 1 January 2013 922 - - - 922

Charge for the year 54 - - - 54

Disposals (109) - - - (109)

Depreciation at 31 December 2013 867 - - - 867

Net book value at 1 January 2013 76,972 56,557 19,855 300 260

Net book value at 31 December 2013 65,912 48,759 16,675 275 203

The freehold and leasehold properties were valued as at 31 December 2013 by
external professional firms of chartered surveyors. The valuations were made at
fair value. The directors property valuations were made at fair value.

2013 2012

£'000 £'000

Allsop LLP 62,390 72,535

Woolhouse Real Estate 1,494 -

BNP Paribas Real Estate - 4,177

Directors valuation 1,825 -

65,709 76,712

The historical cost of investment properties, including total capitalised
interest of £1,161,000 (2012: £1,222,000) was as follows:

Freehold Long Short

£'000 Leasehold Leasehold

£'000 £'000

Cost at 1 January 2013 54,620 17,293 785

Additions - - -

Disposals (6,859) (2,321) -

Cost at 31 December 2013 47,761 14,972 785

Long leasehold properties are held on leases with an unexpired term of more
than fifty years at the balance sheet date.

26.4. Other investments

Cost Total Shares in Loan stock Shares Loan Shares in Unlisted
in in stock
£'000 subsidiary associate shares
subsidiary joint in joint
companies £'000 £'000
companies ventures ventures
£'000
£'000 £'000 £'000

At 1 January 2013 46,685 40,663 3,658 1,052 818 489 5

Additions 2,302 - - 76 26 - 2,200

Repayments (511) - - - (511) - -

Impairment (338) - - - (333) - (5)

At 31 December 2013 48,138 40,663 3,658 1,128 - 489 2,200

In December 2013 the remaining 50% ordinary shares and remaining loan stocks in
Analytical Ventures Limited (joint venture) were acquired by the Company for a
nominal value and it is now a wholly owned subsidiary.

Subsidiary companies

The Company owns 100 per cent of the ordinary share capital of the following
companies that are trading, all of which are registered in England and Wales:

Activity % Held by % Held by
company Group

LAP Ocean Holdings Limited Property Investment 100 100

Antiquarius Limited Property Investment - 100

Brixton Village Limited Property Investment - 100

Market Row Limited Property Investment - 100

Ski Investments Limited Property Investment - 100

Analytical Properties Holdings Property Investment 100 100
Limited

Analytical Properties Limited Property Investment - 100

Analytical Properties (St Helens) Property Investment - 100
Limited

London & Associated Management Property Management 100 100
Services Limited Services

Analytical Ventures Limited Property Investment 100 100

Analytical Ventures (Halifax) Property Management - 100
Limited Services

In the opinion of the Directors the value of the investment in subsidiaries is
not less than the amount shown in these financial statements.

Details of the associate and joint ventures are set out in Notes 11 and 12.

26.5. Debtors

2013 2012

£'000 £'000

Trade debtors 893 903

Amounts due from subsidiary companies 8,949 17,008

Amounts due from associate and joint ventures 381 164

Deferred tax asset (note 26.9) 3,706 4,644

Other debtors 181 187

Prepayments and accrued income 1,326 1,381

15,436 24,287

26.6. Investments

2013 2012

£'000 £'000

Market value of the listed investment portfolio 23 20

Unrealised deficit of market value over cost - (3)

Listed investment portfolio at cost 23 23

All investments are listed on the London Stock Exchange.

26.7. Creditors: amounts falling due within one year

2013 2012

£'000 £'000

Bank overdrafts (unsecured) 1,490 3,275

Bank loans (secured)* 44,170 44,144

Bank loans (unsecured) 258 247

£5 million First Mortgage Debenture Stock 2013 at 11.3 per cent - 5,000

Amounts owed to subsidiary companies 22,982 35,974

Amounts owed to joint ventures 3,300 3,266

Other taxation and social security costs 635 726

Other creditors 1,408 747

Accruals and deferred income 4,468 3,704

78,711 97,083

*The bank loans are shown after deduction of un-amortised issue costs.

26.8. Creditors: amounts falling due after more than one year

2013 2012

£'000 £'000

Interest rate derivatives 9,569 13,988

Term Debenture stocks:

£1.7 million First Mortgage Debenture Stock 2016 at 8.67 per cent - 1,700

£5 million First Mortgage Debenture Stock 2018 at 11.6 per cent 5,000 5,000

£10 million First Mortgage Debenture Stock 2022 at 8.109 per cent 9,855 9,837
*

14,855 16,537

Bank loans:

Repayable after more than one year 201 460

24,625 30,985

*The £10 million debenture is shown after deduction of un-amortised issue
costs.

Details of terms and security of overdrafts, loans and loan renewal and
debentures are set out in note 17.

Repayment of borrowings:

Bank loans and overdrafts:

Repayable within one year 45,918 47,666

Repayable between two and three years 201 460

46,119 48,126

Debentures:

Repayable within one year - 5,000

Repayable between two and five years 5,000 1,700

Repayable in more than five years 9,855 14,837

60,974 69,663

Hedge profile

At 31 December 2013 the Company had hedges totalling £50.4m to cover the £44.2
million facility. These consisted of a 20 year swap for £10.4 million with a 7
year call option in favour of the bank, taken out in November 2007, at 4.76 per
cent; and a 20 year swap for £40 million with a 7 year call option in favour of
the bank, taken out in December 2007, at 4.685 per cent. Since the year end
these hedges have been reduced by £30.4 million (the £10.4 million hedge at
4.76 per cent and £20.0 million of the £40.0 million hedge at 4.685 per cent
have been cancelled) leaving only £20 million of the 4.685 per cent hedge
outstanding.

This results in a liability at 31 December 2013 of £9,569,000 (2012: £
10,771,000). If, as was the case in 2012, the hedges had been valued at the net
present value of the fair value, as against the termination values, the
liability in the balance sheet would have been £7,923,000. The value of the
hedging instrument changes by approximately £61,000 for each 0.1% change in
interest rate.

The amount recognised in the profit and loss account was a gain of £4,419,000.
Had the hedges had been valued at the net present value of the fair value to
the business (as last year), the amount recognised in the profit and loss
account would have been a gain of £6,065,000. Thus the profit has been reduced
by £1,646,000 in the current year.

Under FRS 29 the hedges are not deemed to be eligible for hedge accounting and
any movement in the value of the hedges is therefore charged directly to the
profit and loss account. The bank has an option to cancel the hedges in January
2015. The cost to the Company to exit the instruments before January 2015 has
been attributed a cost by the bank of £174,000 (2012: £182,000).

Fair value of financial instruments

Fair value estimation

The Group has adopted the amendment to FRS29 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).

Level Level Level Total 2013
1 2 3
£'000 Gain/
£'000 £'000 £'000 (loss)
to

profit
and loss

account

£'000

Financial assets

Other financial assets held for trading

Quoted equities 23 - - 23 3

Financial liabilities

Derivative financial instruments

Interest rate swaps - 9,569 - 9,569 4,419

Level Level Level Total 2012
1 2 3
£'000 Gain/
£'000 £'000 £'000 (loss)
to

profit
and loss

account

£'000

Financial assets

Other financial assets held for trading

Quoted equities 20 - - 20 4

Financial liabilities

Derivative financial instruments

Interest rate swaps - 13,988 - 13,988 (1,328)

Liquidity

The table below analyses the Company's financial liabilities into maturity
Groupings and also provides details of the liabilities that bear interest at
Fixed, floating and non-interest bearing rates.

Less than 2-5 years Over 2013

1 year £'000 5 years Total

£'000 £'000 £'000

Bank overdrafts (floating) 1,490 - - 1,490

Debentures (fixed) - 5,000 10,000 15,000

Bank loans (floating)* 44,451 201 - 44,652

Trade and other payables 32,793 - - 32,793
(non-interest)

78,734 5,201 10,000 93,935

Less than 2-5 years Over 2012

1 year £'000 5 years Total

£'000 £'000 £'000

Bank overdrafts (floating) 3,275 - - 3,275

Debentures (fixed) 5,000 1,700 15,000 21,700

Bank loans (floating)* 44,441 460 - 44,901

Trade and other payables (non-interest) 44,416 - - 44,416

97,132 2,160 15,000 114,292

The Company 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.

*The bank loans are fully hedged with appropriate interest derivatives. Details
of the hedges are shown above.

Total financial assets and liabilities

The Company's financial assets and liabilities and their fair values are as
follows:

Fair 2013 Fair 2012

value Carrying value Carrying

£'000 value £'000 value

£'000 £'000

Cash and cash equivalents 4,969 4,969 6,022 6,022

Investments 23 23 20 20

Other assets 15,436 15,436 24,287 24,287

Bank overdrafts (1,490) (1,490) (3,275) (3,275)

Bank loans (44,451) (44,428) (44,441) (44,395)

Derivative liabilities (9,569) (9,569) (13,988) (13,988)

Other liabilities (24,543) (24,543) (44,416) (44,416)

Before debentures (59,625) (59,602) (75,791) (75,745)

Additional details of borrowings and financial instruments are set out in Notes
17 and 18.

26.9. Provisions for liabilities and charges

2013 2012

£'000 £'000

Deferred Taxation

Balance at 1 January (4,644) (4,550)

Transfer to profit and loss account 938 (94)

Balance at 31 December (3,706) (4,644)

No provision has been made for the approximate taxation liability at 20 per
cent (2012: 23 per cent) of £101,000 (liability 2012: £51,000) which would
arise if the investment properties were sold at the stated valuation.

The deferred tax balance comprises the following:

Accelerated capital allowances 934 1,044

Fair value of interest derivatives (1,914) (3,217)

Short-term timing differences 146 156

Losses (2,872) (2,627)

Provision at end of period (3,706) (4,644)

26.10. Share capital

Details of share capital, treasury shares and share options are set out in Note
20.

26.11. Reserves

Share Capital Revaluation Retained Total
Premium
redemption reserve Earnings £'000
Account
reserve £'000 £'000
£'000
£'000

Balance at 1 January 2013 4,866 47 6,853 7,019 18,785

Decrease on valuation of - - (4,702) - (4,702)
investment properties

Retained profit for year - - - 9,864 9,864

Loss on disposal of Treasury - - - (200) (200)
Shares

Balance at 31 December 2013 4,866 47 2,151 16,683 23,747

26.12. Related party transactions

Details of related party transactions are given in Note 21.

As provided under Financial Reporting Standard 8: Related Party Disclosures,
the Company has taken advantage of the exemption from disclosing transactions
with other Group companies.

26.13. Capital commitments

2013 2012

£'000 £'000

Commitments to capital expenditure contracted for at the year end - -

26.14. Commitments under operating leases

At 31 December 2013 the Company had annual commitments under non-cancellable
operating leases on land and buildings as follows:

2013 2012

£'000 £'000

Expiring in less than one year 324 210

Expiring in more than one year but less than five years - 390

324 600

In addition, the Company has an annual commitment to pay ground rents on its
leasehold investment properties which amount to £327,000 (2012: £354,000).

26.15. Contingent liabilities and post balance sheet events

There were no contingent liabilities at 31 December 2013 (2012: £Nil), except
as disclosed in Note 26.8.

Since the year end the Company has terminated a 20 year swap with a notional
value of £10,400,000 with a 7 year call in favour of the bank, taken out in
November 2007, at 4.76% and £20,000,000 of a 20 year swap with a notional value
of £40,000,000 with a 7 year call in favour of the bank, taken out in December
2007, at 4.685%; leaving a notional £20,000,000 of swap at 4.685% outstanding.
The exit cost incurred in 2014 associated with closing these instruments are £
6.4m.

five year financial summary

2013 2012 2011 2010 2009

£m £m £m £m £m

Portfolio size

Investment properties-Group^ 87 205 194 195 214

Investment properties-joint ventures 19 27 29 13 13

Investment properties-associate 12 12 12 12 12

118 244 235 220 239

Portfolio activity £m £m £m £m £m

Acquisitions - - - - -

Disposals (9.47) - (0.60) (20.74) (17.79)

Capital Expenditure - 0.97 0.42 0.49 3.46

(9.47) 0.97 (0.18) (20.25) (14.33)

Consolidated income statement £m £m £m £m £m

Rental income - Group and share of joint 14.18 15.80 16.99 16.50 17.07
ventures (including discontinued)

Less: attributable to joint venture (0.27) (0.63) (0.61) (0.52) (0.52)
partners

Group rental income 13.91 15.17 16.38 15.98 16.55

Profit/(loss) before interest and tax 6.71 18.93 10.89 11.97 20.49

Profit/(loss) before tax 1.15 7.62 (18.56) (10.69) 21.41

Taxation 2.33 (0.35) 3.74 7.19 (2.36)

Profit/(loss) attributable to shareholders 3.48 7.27 (14.82) (3.50) 19.05

Earnings/(loss) per share - basic 4.12p 8.65p (17.63) (4.24)p 24.32p
p

Earnings/(loss) per share - fully diluted 4.12p 8.65p (17.63) (4.24)p 24.32p
p

Dividend per share 0.125p - 0.75p 1.15p 1.15p

Consolidated balance sheet £m £m £m £m £m

Shareholders' funds 49.73 46.46 39.93 55.76 59.10

Net borrowings 53.96 131.27 133.03 130.77 145.65

Net assets per share - basic 59.00p 55.30p 47.53p 66.71p 74.22p

- fully diluted 59.00p 55.29p 47.53p 66.69p 74.19p

Consolidated cash flow statement £m £m £m £m £m

Cash generated from operations 10.83 12.72 10.89 9.58 12.18

Capital investment and financial 7.51 (0.87) (0.50) 20.42 13.94
investment

Note: ^Excluding the present value of head leases