FOR IMMEDIATE RELEASE

30 April 2010

LONDON & ASSOCIATED PROPERTIES PLC:

RESULTS FOR 12 MONTHS TO 31 DECEMBER 2009

London & Associated Properties Plc is a fully listed UK shopping centre and
Central London retail property specialist that owns and manages £239m of retail
investments.

HIGHLIGHTS

* Wholly owned property portfolio valued at £213.6m – a like-for-like rise of
4.6% compared to an IPD index of retail property values decline of 4.3%

* NAV increased 46.6% to £59.1m from £40.3m

* EPRA adjusted NNNAV increased 41% to 74.2p a share from 52.7p

* Rental income over period advanced to £17.1m from £16.8m

* Final dividend of 0.4p a share plus a share issue of 0.8p per share
proposed making a total for year of 1.95p a share equivalent – the same as
2008

* £21.9m of properties sold during year showing aggregate £0.9m surplus over
book values – total sales over last four years amount to £159.8m

* 95% of rents collected within two weeks of December 2009 quarter day

* Vacant units only account for 2.2% by rental value of total portfolio

” Our performance in 2009 has been positive. I am satisfied that our policy of
upgrading and investing in the quality of our portfolio has insulated us from
the worst of the economic downturn. I remain reasonably optimistic that we are
well placed to cope with what is likely to be another challenging year for
property companies,” Michael Heller, Chairman.

Contacts:

London & Associated Properties PLC Tel: 020 7415 5000

John Heller, Chief Executive or Robert Corry, Finance Director

Baron Phillips Associates Tel: 020 7920 3161

Baron Phillips

CHAIRMAN’S STATEMENT

I am pleased to report on a year of satisfactory progress. Once again the
quality of our property portfolio, coupled with successful strategic management
of our properties during the year, have contributed to this creditable
performance. The harsh economic conditions of 2008 continued into the first
half of 2009; however the second half of the year saw some improvement in
values with the final quarter witnessing strong demand for quality properties
with stable income streams. A significant proportion of our portfolio meets
these criteria, and our year end valuation reflects this improvement.

Our property portfolio was valued at £213.6 million at 31st December 2009. This
represents an increase of 4.6% on a like-for-like basis which compares
favourably with the Investment Property Databank (IPD), the property industry’s
valuation index, which showed retail property capital values had fallen by 4.3%
over the same period.

Over the year we also grew our rental income from £16.8 million per annum to £
17.1 million. This has been achieved during a difficult period across the
property market, which has witnessed substantial rental declines and a rise in
vacant properties. Our estimated rental value now stands at £17.4 million per
annum.

A number of key factors have been responsible for this performance: First of
all, we have suffered relatively low levels of tenant default. From September
2008, when the property recession commenced in earnest, to date, we have lost £
681,000 of rental income due to tenant failure. This figure is somewhat
distorted by the failure of Zavvi, the music retailer, who occupied a prime
unit at Orchard Square, Sheffield, and who were paying £368,000 per annum. This
unit has since been re-let to Republic at a base rent of £400,000 per annum.
Republic is a fashion retailer with a more dynamic retail offer and a wider
customer audience. To date we have completed lettings with an aggregate rental
income of 108% of the previously passing rent in the vacated units mentioned
above. This has been achieved notwithstanding the fact that three of these
units are still to be re-let.

Secondly, we obtained planning and listed building consents to redevelop our
properties at King’s Road, Chelsea and at Upper Street, Islington. We
successfully carried out developments at both of these properties during the
year and this work has added significantly to their respective values. Both of
these developments had been pre-let.

Thirdly, we pre-let three units at King Edward Court, Windsor at rents in
excess of £115 zone A. This represents a higher rate per square foot than had
been previously achieved in this part of the centre and underscores the
resilience of this shopping centre during the current recession. In fact, both
our larger shopping centres at Windsor and Sheffield, which together account
for rental income approaching £11 million per annum, have continued to
demonstrate rental growth and are fully let, with the exception of one small
unit at Sheffield which forms part of a future redevelopment site.

Finally, we took advantage of the market for prime property and sold, or
exchanged contracts to sell, three properties during the year for a combined
value of £21.9 million. These disposals show an aggregate surplus over book
value of £0.9 million. Total disposals over the last 4 years have now reached
some £159.8 million.

Under the International Financial Reporting Standards (IFRS), the net assets of
the company grew in 2009 by some 47% from £40.3 million to £59.1 million. These
figures are distorted by the requirement to mark to market the interest rate
derivatives that we have in place to hedge our interest payments. Over the year
the gap between the prevailing swap rate and the level at which we started
these contracts has closed substantially. This has led to a write back of £13.3
million to the net assets.

During the year under the more appropriate and generally accepted standards of
the European Real Estate Association (EPRA), our EPRA adjusted net assets per
share grew by 11.5% to 91.5p. When looked at on an EPRA Triple NAV basis, our
NNNAV per share has risen by some 41% over the period to 74.2p from 52.7p,
taking account of the requirement to mark to market the value of our interest
rate derivatives.

On a management adjusted basis, as detailed in the Finance Director’s report,
and without capitalising interest we made a loss before tax of £2.5 million.
This was mainly due to the expected reduction in income from our development
sites, at Kings Road, Islington and Windsor during construction. This year we
expect to move back into profit following the successful completion of our
development programme.

The last few years have seen intensive management of our property portfolio as
we have reconfigured and improved our Centres to increase rental values and
drive forward cash flows. These capital intensive projects have now drawn to a
successful conclusion. Over the last 4 years we have invested £49.3 million
into our portfolio. This includes a gross investment of £30.7 million into King
Edward Court Windsor, which at the time was held in a joint venture with the
Bank of Scotland. The remaining £18.6 million of investment has been funded
from our existing cash resources. LAP still has some £5 million in unencumbered
cash available to exploit opportunities as they arise.

While property values have shown considerable improvements over the last two
quarters and our experience on tenant failure has been below average, the Board
remains cautious about the strength and durability of the current recovery. In
view of this the Board feels that the Group should continue to conserve cash in
the business. Therefore, the Board has taken the decision to maintain the
dividend at the same level as last year. This will be a final cash dividend of
0.4p per share and a capitalisation issue of new shares worth 0.8p per share.

The total assets of the Group, including those of Bisichi Mining PLC, our
associate company, and Dragon Retail Properties, our joint venture with
Bisichi, now stand at £306.4 million.

Bisichi had another successful year and generated a profit before tax of £5.0
million.

Given the backdrop of a testing occupational market, our performance in 2009
has been positive. I am satisfied that our policy of upgrading and investing in
the quality of our portfolio has insulated us from the worst of the economic
downturn. Although it is too early to say with certainty that we are through
the worst of this recession, I remain reasonably optimistic that we are well
placed to cope with what is likely to be another challenging year for property
companies.

Michael Heller, Chairman
16 April 2010

CHIEF EXECUTIVE’S REPORT

2009 was again a challenging year for the property sector. The difficult times
experienced in 2008 when the credit markets effectively collapsed, continued
into the first half of 2009. Retail property values, as measured by IPD, fell
from peak to trough by some 45%, and no property portfolio seemed immune from
this general markdown. The investment market, however, started to stabilise
over the summer and a return of good demand from cash rich buyers meant there
was a surge in value for properties that fulfilled certain criteria towards the
end of the year.

Buyers that have been most active in the investment market recently are
generally looking for stable bond-like income from property during this period
of historically low interest returns. Therefore, those properties which
attracted the interest of the investment market have needed strong cash flows
from quality covenants.

LAP’s property investment portfolio was valued at £213.6 million at 31 December
2009. Our top three properties accounted for 73% of this figure. All of these
properties are fully let, with the exception of one small unit within a future
development site at our centre in Sheffield. They also have long single leases
to strong covenants or are multi-let but with rental income that has increased
over the last 12 months.

Gross rental income from our property portfolio has increased to £17.1 million
during 2009 from £16.8 million the previous year. This is a significant
achievement in the current environment and demonstrates the strength of our
properties and of our rent roll. Our top 50 tenants plus the income from the
car park at King Edward Court, Windsor account for 80% of our gross income.
Almost all of these tenants are household names and some 74% by value of our
leases have more than 5 years to run.

We collected 95% of cash owed to us within 2 weeks of the December 2009 quarter
day. Within our portfolio, vacant units account for just 2.2% by rental value,
0.7% of units are let to tenants on a temporary basis, while 3.4% of our rental
income has moved from being received on a quarterly basis to being received on
a monthly basis. In 2009 ten tenants went into some form of insolvency
accounting for £681,000 per annum. Of these, 7 leases with a rental value of £
739,000 per annum have been re-let. In 2010, to date, we have lost one further
tenant accounting for £26,000.

During the year we invested £3.5 million into developing and improving our
property portfolio. These developments were all carried out with pre-lets in
place, and have led to an incremental income of £858,000, which represents an
annual return on investment of some 25%.

We sold or exchanged contracts to sell three properties during the year, of
which two completed in the financial year. In all three cases, we felt that the
assets in question would demonstrate minimal rental or capital growth over the
medium term. The first property to be sold was a block of shops in Solihull for
which we received £11.5 million. We had carried out two recent lettings there
that had enhanced the rental value of the block, and we felt the property would
be unlikely to show further rental growth for some time.

The other two properties sold were both in Islington. They had been acquired as
part of the London Portfolio in 2006. The Mall, which is the larger property,
was sold for £6.6 million. During the year we had successfully appealed an
earlier refusal for consent to convert the Mall from an antiques arcade to a
single shop. The application was made after pre-letting the entire building to
Jack Wills, the fashion retailer, at £367,500 per annum. The cost of the
amalgamation works and associated fees was £0.8 million and the property was
handed over to the tenant on time and on budget in October 2009. The property
was disposed of in December to show a profit over book value of £1.6 million.

The third property was a single shop adjacent to The Mall which was let to
Foxtons, the estate agency. We achieved £3.8 million for the freehold of the
building which equated to a net initial yield of 5.75%. This showed a profit
over book value of £0.6 million. This sale was completed in January 2010.
Following these disposals our estimated rental income still stands at £17.4
million per annum.

Windsor

At King Edward Court in Windsor, the Centre returned to full occupancy having
lost two retailers to some form of insolvency in December 2008. The two units
that became vacant were on either side of Robert Gatward, a chain of upmarket
jewellers who had recently taken over an existing jewellery business within the
Centre. This presented an opportunity to extend and amalgamate all three units
to create better configured space with more visible frontage.

We obtained planning consent for the works during the year and pre-let the
larger of the shops to Robert Gatward, who have significantly increased their
retail space. Another unit has been let to Fat Face, the fashion chain, while
the remaining space has been taken by Mystique Lingerie.

The combined rent of the three units is £295,000 per annum, a 42% increase over
the previous passing rent. In addition we have managed to increase Zone A rents
to over £115 for the shops fronting onto the principal mall, a record for this
part of the Centre. The total cost of the deal, including all tenant
incentives, has been approximately £0.5 million.

The total income for King Edward Court now stands at a record £7.8 million per
annum, an increase over the year of 6.8%.

Sheffield

Orchard Square continues to trade well following the significant developments
that we have carried out at this centre over the last few years. The shops
remain fully let with the exception of one small unit that forms part of a
future development site.

The income from this centre reached £3.0 million per annum in 2009 compared to
£2.8 million the previous year, and 78% of the leases have more than 5 years to
run. We have previously reported to shareholders that during 2009 we let a
prime shop fronting Fargate to Republic, the fashion retailer, at a record rent
per square foot for the city.

The London Portfolio

We successfully completed the transformation of the Antiquarius building from
an antiques arcade to a large single unit with approximately 16,000 square feet
of retail space. The entire building has been let to Anthropologie, the US
fashion chain, at a rent of £1.1 million per annum. The apartment to the rear
of the building which we refurbished in 2007 has also been let at a further £
50,000 per annum.

The development required listed building and freeholder consents, which were
obtained in April. The total cost of the development has been £1.96 million,
and the net incremental rent is £592,000. Anthropologie took possession of the
building in October 2009 and has recently commenced trading following an
extensive period of fitting-out.

At our markets in Brixton, South London, we have focused over the last year on
improving occupancy and increasing the footfall across both of the markets that
we own there. This has been particularly the case with those units in Brixton
Village, one of the two markets, that have historically been hard to let away
from the main pedestrian flows. We have enjoyed some success through the
introduction of flexible leases for an initial 3 month trial period. These have
only been available for retailers who we believe will add substantially to the
quality of the tenant mix.

The result of this initiative is that Market Row, the more successful of the
markets, remains effectively fully let while Brixton Village now has 90%
occupancy for the first time. Of the 17 tenants that commenced trading on
flexible leases, 10 have now converted to full leases at a market rent. As a
result the rental income for these two properties has increased by 9.4% over
the last 12 months.

Remainder of our portfolio

The remainder of our portfolio continues to trade well in the current difficult
economic environment.

In addition to those properties mentioned above, our portfolio has been
deliberately concentrated into locations where value retailing and day-to-day
shopping is prevalent. We are confident that these locations will continue to
trade at an acceptable level regardless of wider economic difficulties as they
are less dependent on discretionary spending.

Outlook

The UK economic recovery continues to be fragile with a large rise in consumer
savings and a low level of confidence. In addition there is less credit
available for consumers, small businesses and property companies. We do not
expect bank lending to return to the levels of 18 months ago in the near
future.

Consequently, we expect the polarisation already apparent between prime and
secondary properties to continue to widen. Given the nature of our portfolio,
of which 73% is in three high quality properties that can all demonstrate
strong cash flows, we remain cautiously optimistic going forward.

John Heller, Chief Executive
16 April 2010

FINANCE DIRECTOR’S REPORT

In the challenging economic circumstances we faced in the year, we prioritised
the management of our cash flow and our cash resources. We have now completed
the capital expenditure relating to our development programme and those
properties are all income producing. LAP has remained fully covenant compliant
throughout this period.

In the challenging economic circumstances we faced in the year, we prioritised
the management of our cash flow and our cash resources. We have now completed
the capital expenditure relating to our development programme and those
properties are all income producing. LAP has remained fully covenant compliant
throughout this period.

Cash Flow

The Group remains in a satisfactory cash flow positive position.

During the year we sold Solihull and The Mall, Islington for a combined £18.1
million. We also exchanged contracts to sell the Foxtons unit in Islington,
North London for £3.8 million, and completed the disposal in January 2010. The
proceeds from these sales therefore were £21.9 million of which £15.1 million
was used to pay down our Revolving Credit Facility with the Royal Bank of
Scotland. The total amount drawn as at March 2010 stands at £54.4 million.

Income Statement

The Group’s profit before tax as reported under IFRS was £21.4 million (2008: £
57.3 million loss). This figure includes £9.4 million of movement in our
property revaluation reserve and £13.3 million of movement on the marking to
market of our interest derivatives, as well as certain other non-cash items.
These adjustments can lead to considerable volatility in the reporting of our
results. The table below does, though, show the underlying performance of the
Group on a management adjusted basis.

The average cost of debt has reduced to 5.97% for the year (2008: 6.10%). We
closely monitor all interest rate hedging and regularly explore options for
reducing the total interest payable in the future. The interest rate hedges in
place were taken out as a management tool for the business to ensure stability
and security of our cash flows in the medium to long term. It is important to
us that the costs of funds are at a known level. This strategy means that
should interest rates increase in the future we will be protected. We do not
trade in the swaps.

We have again valued the interest rate swaps on the basis of the net present
value of the additional cost of the interest payable over the terms of the
hedging arrangements against the prevailing rates of interest as at 31 December
2009. The Directors consider this to be the most appropriate method of
valuation of these products. This valuation is based on the assumption (as
required by IFRS) that we had to “unwind” these contracts at the balance sheet
date. This is, of course, an unrealistic assumption since the hedges are
designed to provide certainty for our interest costs and are not a traded item.

The tax charge for the year is £2.4 million. This figure includes a corporation
tax credit of £1.2 million and an increase in the deferred tax provision of £
3.6 million. This deferred tax provision has arisen because of the increase in
the value of the property portfolio.

Cash Non-cash 2009 Cash Non-cash 2008
items items Per items items Per
income income
statement statement

£’000 £’000 £’000 £’000 £’000 £’000

Net rental income 9,517 – 9,517 8,958 – 8,958

Income and gains on 148 – 148 298 – 298
investments held for
trading

Profit on sale of 14 – 14 897- – 897
investment properties

Net change on revaluation – 9,422 9,422 – (33,125) (33,125)
of investment properties

Net increase/(decrease) – 178 178 – (1,530) (1,530)
in value of investments
held for trading

Operating profit/(loss) 9,679 9,600 19,279 10,153 (34,655) (24,502)

Share of joint ventures 131 1,078 1,209 131 (547) (416)
and associates

Interest rate derivative – 13,269 13,269 – (21,063) (21,063)

Net interest (12,350) – (12,350) (11,285) – (11,285)

(Loss)/profit before (2,540) 23,947 21,407 (1,001) (56,265) (57,266)
taxation

Balance Sheet

The value of the overall property portfolio was £238.6 million. This includes
the properties owned by Bisichi Mining PLC, Dragon Retail Properties and
Analytical Ventures. On a like-for-like basis this shows an increase of 4.0%.

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

The net assets of the Group under IFRS have increased to £59.1 million in the
year, a rise of 46.6% and an increase of 21.5 pence per share. The more
meaningful EPRA figure shows the net assets to be £72.8 million equivalent to
91.5 pence per share, a rise of 11.5%. The EPRA triple NAV increased by 41%
over the period to 74.2p per share.

Accounting judgments and going concern

The most significant judgements made in preparing these accounts relate to the
carrying value of the properties and investments which are stated at open
market value. The Group uses external professional valuers to determine the
values of our properties. Interest rate hedges (as explained above) are stated
at net present value of the extra costs arising to maturity as compared with
current market rates.

The Directors exercised their commercial judgements when reviewing the cash
flow forecasts of the Group and the underlying assumptions on which they are
based. The Group’s business activities, together with the factors likely to
affect its future development, are set out in the Chairman’s Statement, the
Chief Executive’s Report and this Report. In addition the directors considered
note 17 to the financial statements which includes the company’s objectives,
policies and processes for managing its capital; its financial risk management
objectives; details of its financial instruments and hedging activities; as
well as its exposure to credit risk and liquidity risk.

Per IFRS Deferred Mark-to- Head EPRA
tax market of leases Adjusted
interest net
swaps assets

2009 £’000 £’000 £’000 £’000 £’000

Investment properties 243,109 (29,485) 213,624

Other fixed assets 2,621 2,621

Investments in associate 9,440 9,440
and joint ventures

Other net assets 4,678 4,678

Other non-current (54,395) 7,393 6,347 29,485 (11,170)
liabilities

Net debt (146,349) (146,349)

Net assets 59,104 7,393 6,347 – 72,844

Adjusted EPRA NAV per 91.5p
share

2008

Investment properties 245,770 (27,238) 218,532

Other fixed assets 2,722 2,722

Investments in associate 8,360 8,360
and joint ventures

Other net assets 810 810

Other non-current (49,662) 2,843 19,616 27,238 35
liabilities

Net debt (167,694) (167,694)

Net assets 40,306 2,843 19,616 62,765

Adjusted EPRA NAV per 82.1p
share

With sound financial resources and long term leases in place with the tenants,
the directors believe that the company is well placed to manage its business
risks despite the current uncertain economic outlook. 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

The Directors are again proposing the same final dividend as in 2008. The
company is proposing to pay 1.2p, payable to shareholders on 2nd July 2010.
This makes a total for the year of 1.95p – the same as in 2008. In current
conditions this will be a final dividend of 0.4p per share and a capitalisation
issue of new shares worth 0.8p per share.

Our associated company Bisichi Mining PLC, in which we hold a 41.7% stake, had
a strong year and produced profit before taxation of £5.0 million. This figure
is after a revaluation surplus under IFRS of £0.1 million.

I feel confident that the policy of prudently managing the Group’s cash
resources will benefit us as we continue to go through this period of
uncertainty.

Robert Corry,

Finance Director

16 April 2010

Directors & Advisors

DIRECTORS

EXECUTIVE DIRECTORS

*Michael A Heller MA FCA (Chairman)

John A Heller LLB MBA (Chief executive)

Robert J Corry BA FCA (Finance Director)

Michael C Stevens FCA

NON-EXECUTIVE DIRECTORS

* Howard D Goldring BSC (ECON) ACA

Howard Goldring has been a member of the board since July 1992 and is a global
asset allocation specialist. He is chairman of Delmore Asset Management Limited
which manages investment portfolios and provides global asset allocation advice
to private clients, family offices and pension funds. 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. He is chairman of Barronsmead VCT 2 plc,
DiGiCo Europe Limited and BG Consulting Group Limited as well as being a
director of F&C US Smaller Companies plc. He is Vice President of the Institute
of Chartered Accountants in England and Wales and is a non-executive member of
its Board. He is chairman of the audit committee and as Senior Independent
Director he chairs the Nomination and Remuneration Committees.

* Member of the nomination committee

# Senior independent director

* Member of the audit, remuneration and nomination committees

Secretary & registered office

Michael C Stevens FCA

Carlton House,
22a St James’s Square
London SW1Y 4JH

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

Oriel Securities Limited

Registrars & transfer office

Capita Registrars,

Northern House

Woodsome Park

Fenay Bridge

Huddersfield

W.Yorkshire

HD8 0GA

Telephone 0871 664 0300

(Calls cost 10p per minute + network extras, lines are open Mon-Fri 8.30am to
5.30pm)

or +44 208 639 3399 for overseas callers.

Website: www.capitaregistrars.com

Email: ssd@capitaregistrars.com

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 2009.

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 in which the company
holds a 42 per cent interest. Bisichi Mining PLC 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
The Chairman’s Statement, Chief Executive’s Report and Finance Director’s
Report on the preceding pages 2 to 17 provide 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.

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. Income may be affected adversely by the
inability of tenants to pay their rent. Rent collection and tenant quality are
monitored carefully. This risk is minimised as a result of the 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.

* Financing costs – the exposure of the group to interest rate movements is
managed by the use of swap arrangements (see note 17 on page 47 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 on page 38.

* Property valuations – market sentiment and economic conditions have a direct
effect on property valuations, which therefore 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.

Corporate responsibility
Environment
The group’s principal UK activity is property investment providing premises
which are rented 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. Wherever possible, improvements, repairs and
replacements are made in an environmentally efficient manner and waste
re-cycling arrangements are in place at all the company’s locations.

Employment
The group’s policy is to attract staff and motivate employees by offering
competitive terms of employment. The group provides equal opportunities to all
employees and prospective employees including those who are disabled.

Performance indicators
Our success is principally measured in terms of net asset value per share and
trading cash flow (where we aim over a period of time to deliver a positive
cash return) and net asset value per share after adjusting for valuation
volatility and excluding IFRS adjustments. The directors consider that the Key
Performance Indicator of the Group is the Net Asset per Share value shown at
the foot of the Balance Sheet on page 35 and as discussed in the Finance
Director’s Report. Cash flow is shown on page 37.

Dividend Policy and Capitalisation Issue

An interim dividend for 2009 of 0.75p was paid on 22 January 2010 (2008:
Interim dividend 0.75p paid on 23 January 2009). The directors recommend
payment of a final dividend for 2009 of 0.40p per ordinary share of 10 pence
each (the Final Dividend and Ordinary Share respectively). In addition to the
Final Dividend the directors propose to issue Ordinary Shares in lieu of the
full final dividend that would otherwise have been paid, by issuing to existing
shareholders new Ordinary Shares (the Capitalisation Issue) with an aggregate
value equal to 0.80p (the Capitalisation Amount) for each Ordinary Share held
by them.

Subject to shareholder approval, the total dividend per Ordinary Share for 2009
will be 1.15p per Ordinary Share. When added to the Capitalisation Amount, this
results in an equivalent nominal amount of 1.95p per Ordinary Share (2008:Equivilent
nominal amount of 1.95p per Ordinary Share).

The Final Dividend of 40p per Ordinary Share will be payable on 2 July 2010
to shareholders registered at the close of business on 4 June 2010. The
Capitalisation Issue will take effect on 2 July 2010 to shareholders registered
at the close of business on 4 June 2010.

The Capitalisation Issue is conditional on, amongst other things, shareholders’
approval at the AGM of the company to be held on 7June 2010 of the granting of
authority to the directors to allot and issue Ordinary Shares in connection
with the Capitalisation Issue (the Capitalisation Issue Shares). The
Capitalisation Issue also requires shareholders to authorise the capitalisation
of reserves to allow the Capitalisation Issue Shares to be issued.

Further details concerning the Capitalisation Issue (including certain general
taxation considerations in respect of the Capitalisation Issue) are set out
below and a summary and explanation of the resolution to be proposed at the
Annual General Meeting in respect of the Capitalisation Issue is set out on
page 27 of this Directors’ Report.

The Capitalisation Issue

Reason for Dividend Policy and Capitalisation Issue

In the current economic climate, the board of directors feels that it is
imperative that the group maximises its financial flexibility, including
conserving cash wherever possible, and accordingly considers that it would be
prudent to issue the Capitalisation Issue Shares in lieu of a cash dividend
equal to 0.80p per Ordinary Share. Also, the Capitalisation Issue enables
shareholders to build up their shareholding in the company without incurring
dealing costs or stamp duty.

The board of directors reserves the right not to complete the Capitalisation
Issue if it considers such action would not be in the best interests of the
company or its shareholders.

Entitled Shareholders

Holders of Ordinary Shares on the register as at 4 June 2010 will be entitled
to receive Capitalisation Issue Shares. Accordingly, the last date transfers
will be accepted for registration to participate in the Capitalisation Issue
will be 4 June 2010 (the Capitalisation Issue Record Date).

Entitlement to Capitalisation Issue Shares

Each shareholder’s entitlement to Capitalisation Issue Shares will be
calculated by taking the Capitalisation Amount per Ordinary Share multiplied by
the number of Ordinary Shares held by that shareholder at the Capitalisation
Issue Record Date and dividing that amount by the Capitalisation Issue Price.
The Capitalisation Issue Price will be the average of the middle market
quotations for Ordinary Shares for the three dealing days starting on, and
including, 2 June 2010, the day when the Ordinary Shares are first quoted
“ex-dividend”, as derived from the Official List of the UK Listing Authority.
The Capitalisation Issue Price, once fixed, will also be notified on the
company’s website at www.lap.co.uk.

Entitlements to Capitalisation Issue Shares will be rounded down to the nearest
whole number of Ordinary Shares. No fraction of an Ordinary Share will be
allotted.

The Capitalisation Issue Shares

The company will apply to the UK Listing Authority for the Capitalisation Issue
Shares to be admitted to the Official List and to the London Stock Exchange for
the Capitalisation Issue Shares to be admitted to trading on its market for
listed securities on 2 July 2010. Subject to the applications being successful,
the Capitalisation Issue Shares are expected to be allotted on and dealings in
Capitalisation Issue Shares are expected to begin on or around 2 July 2010.

The Capitalisation Issue Shares will be issued fully paid and will rank pari
passu in all respects with the existing Ordinary Shares, including the right to
receive all dividends or other distributions declared, made or paid after the
date of their issue (but excluding for the avoidance of doubt the Final
Dividend).

Subject to the Capitalisation Issue becoming effective:

(a) (a) In respect of Ordinary Shares held in certificated form on the
Capitalisation Issue Record Date, share certificates will be issued in respect
of Capitalisation Issue Shares and posted to shareholders as soon as reasonably
practicable after the Capitalisation Issue becomes effective; and

(b) (b) In respect of Ordinary Shares held in uncertificated form (i.e. CREST)
on the Capitalisation Issue Record Date, prior to the commencement of dealings
in the Capitalisation Issue Shares on the London Stock Exchange, the
appropriate stock account in CREST of the relevant shareholder will be credited
with such person’s entitlement to Capitalisation Issue Shares. The
Capitalisation Issue Shares are expected to be eligible to be traded through
the CREST system with effect from the date of commencement of dealings on the
London Stock Exchange.

Dividends

The timing of the payment of the company’s cash dividends will not be affected
by the Capitalisation Issue. All mandates and other instructions in force
relating to dividend payments will, unless and until revoked, remain in force.

Share Plans

The company operates an HMRC approved share incentive plan. Executive director
and staff participations may be adjusted to take account of the Capitalisation
Issue in accordance with the rules of the scheme. Participants will be
contacted separately and further information provided as to how their
entitlements might be affected.

UK tax treatment of the Capitalisation Issue

The directors have sought advice as to the expected tax treatment of
shareholders on receipt of Capitalisation Issue Shares. The following
statements are intended only as a general guide to current UK tax law and
practice of Her Majesty’s Revenue & Customs (HMRC). They are intended to apply
only to shareholders who are resident or ordinarily resident in the UK for UK
tax purposes, who hold their Ordinary Shares as investments and who are the
beneficial owners of their Ordinary Shares. The statements may not apply to
certain classes of shareholders such as dealers in securities. Shareholders who
are in any doubt as to their tax position regarding the acquisition, ownership
and disposition of the Capitalisation Issue Shares or who are subject to tax in
a jurisdiction other than the UK should consult their own tax advisers.

The Capitalisation Issue should be treated as a reorganisation of the company’s
share capital for the purposes of taxation of chargeable gains. Accordingly, a
shareholder should not be subject to a charge to tax on capital gains (CGT)
upon receipt of Capitalisation Issue Shares. Instead, a shareholder’s existing
Ordinary Shares and the Capitalisation Issue Shares should, taken together, be
treated for CGT purposes as the same asset, acquired at the time and for the
same price that the shareholder acquired their existing Ordinary Shares. A
subsequent sale or other disposal by a shareholder of some or all of the
Capitalisation Issue Shares might give rise to a CGT liability for that
shareholder.

The receipt of Capitalisation Issue Shares should not give rise to a charge to
tax on income for shareholders. The Capitalisation Issue should not be subject
to stamp duty or stamp duty reserve tax.

Overseas Shareholders

It is the responsibility of overseas shareholders to ensure that all relevant
laws and regulations in overseas jurisdictions applicable to them or their
shareholdings (for example, exchange control laws or regulations) are complied
with and that they obtain any permissions or consents required to be obtained,
or make any filings required to be made by them. Shareholders should consult
their professional advisers if they are not sure whether any formalities must
be observed in order to receive Capitalisation Issue Shares. It is the
responsibility of any person resident outside the UK wishing to receive
Capitalisation Issue Shares to be satisfied as to full observance of the laws
of the relevant territory, including obtaining any government or other consents
which may be required and observing other formalities in such territories.

The company’s ordinary shares held in treasury

During 2009 the company issued 1,580,814 of its own shares from Treasury for an
average price of 33.5p which increased the “issued share capital”by the same
number of shares. Details of the issue of these shares is shown in the table below.

At 31 December 2009 4,293,051 (2008: 5,873,865) shares were held in treasury
with a market value of £1,856,745 (2008:£1,468,466).
At the Annual General Meeting (AGM) in June 2009
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 2010.

Movements in Treasury shares during the year:

Transaction Number of
price shares

Treasury shares held at 1 January 2009 5,873,865

9 February 2009 – Issue of Treasury shares in lieu of 31.25p (1,214,400)
directors bonuses

12 February 2009 – Issue of Treasury shares following 25.66p (50,000)
the exercise of share options

March 2009 – Purchase by the Trustee of the SIP for 29.50p (21,780)
issue of Dividend Shares

May 2009 – Issue of Treasury shares in lieu of senior 38.00p (96,261)
staff bonuses

December 2009 – Issue of Treasury shares in connection

with the HMRC approved share incentive plan 43.00p (198,373)

Treasury shares held at 31 December 2009 4,293,051

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.

Investment properties

The freehold and long leasehold properties of the company and its subsidiaries
were revalued as at 31 December 2009 by external professional firms of
chartered surveyors – Allsop LLP, London (98.1 per cent of the portfolio), and
BNP Paribas, Leeds (1.9 per cent). The valuations, which are reflected in the
financial statements, amount to £213.6 million (2008: £218.5 million).

Taking account of prevailing market conditions, the valuation of group
properties at 31 December 2009 resulted in a increase of £9.4 million (2008:
reduction of £33.1 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 and Dragon Retail
Properties Limited) and the associate company (Bisichi Mining PLC) was a
reduction of £0.2 million (2008 reduction of £4.2 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 17 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 – speculative transactions are prohibited. Treasury operations
are reported at each board meeting and are subject to weekly internal
reporting. Hedging arrangements have been put in place in the company,
subsidiaries and joint ventures in order to limit the exposure to interest rate
risk.

Directors
M A Heller, J A Heller, R J Corry, H D Goldring, C A Parritt and M C Stevens
were directors of the company for the whole of 2009.

M A Heller and H D Goldring, are retiring by rotation at the Annual General
Meeting in 2010 and offer themselves for re-election. Brief details of the
directors offering themselves for re-election are as follows:

Michael Heller is executive chairman and has been a director since 1971. He has
a contract of employment determinable at six months notice. Michael Heller is a
chartered accountant and a member of the nomination committee. He is executive
chairman of Bisichi Mining PLC, our associated company.

Howard Goldring has been a director since 1992 and has a contract of service
determinable at three months notice. He is a member of the audit, remuneration
and nomination committees. Howard Goldring is a chartered accountant and global
asset allocation specialist. He is executive chairman of Delmore Asset
Management Limited which specialises in the management of investment portfolios
and the provision of asset allocation advice for private clients, family
offices and pension funds. The board has considered the re-appointment of
Howard Goldring and recommends his re-election as a director. His specialised
economic knowledge and broad business experience are 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, were as follows:

Beneficial Non-beneficial
interests interests

31 Dec 09 1 Jan 09 31 Dec 09 1 Jan 09

M A Heller 5,450,109 4,871,757 18,902,994 18,520,634

R J Corry 661,879 359,110 – –

H D Goldring 11,309 11,080 – –

J A Heller 1,310,652 1,153,971 * *
13,779,769 13,520,634

C A Parritt 24,867 24,364 – –

M C Stevens 756,747 492,267 +988,140 +777,534

*These non-beneficial holdings are duplicated with those of M A Heller.

+The non-beneficial interest of M C Stevens arises by reason of his being a
director of London & Associated Securities Limited, a company which acts as a
trustee.

No director had any material interest in any contract or agreement with the
group during the year other than as shown in this annual report. (Please see
note 21 to the financial statements and the remuneration report).

Between 1 January 2010 and the date of this report the interests of a number of
directors in the ordinary shares of the company have increased to the following
totals:

Beneficial Non-beneficial

M A Heller 5,878,681 18,902,994

R J Corry 930,450 –

J A Heller 1,872,557 13,779,769

M C Stevens 891,032 988,140

No other changes in the directors’ holdings took place between 1 January 2010
and the date of this report. However, the interests of M A Heller and his
family company interests also increased in this period and are shown in the
“Substantial shareholdings” paragraph below.

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

Substantial shareholdings

At 31 December 2009 M A Heller and his family had an interest in 44.8 million
shares of the company, representing 56.23 per cent of the issued share capital
net of treasury shares (2008: 43.09 million shares representing 56.4 per cent).
Cavendish Asset Management Limited has an interest in 4,810,873 shares
representing 6.04 per cent of the issued share capital of the company (2008:
3,470,351 shares representing 4.54 per cent).

Between 1 January 2010 and the date of this report the following changes
occurred:

The interest of M A Heller and his family increased to 46.44 million shares in
the company, representing 56.78 per cent of the issued share capital net of
Treasury shares.

The company is not aware of any other holdings exceeding 3 per cent of the
issued share capital and no relevant changes have occurred between 1 January
2010 and the date of this report.

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
relate, 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.

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 2009 have confirmed that, as far as they
are aware, there is no relevant audit information of which the auditor is
unaware. All of the directors have confirmed that they have taken all the steps
that they ought to have taken as directors in order to make themselves aware of
any relevant audit information and to establish that it has been communicated
to the auditor.

Corporate governance
The company has adopted the Guidance for Smaller Quoted Companies (SQC’s)
published by the Quoted Companies Alliance (QCA). The QCA provides guidance to
SQC’s. The QCA’s guidance covers the implementation of the Revised Combined
Code on Corporate Governance for SQC’s and the paragraphs below set out how the
company has applied this guidance during the year. The company has complied
with the QCA’s guidance throughout the year, except insofar that non-executive
directors are not appointed for fixed terms (section A.7.2).

Principles of corporate governance
The board promotes good corporate governance in the areas of accountability and
risk management 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 four executive directors, being the
chairman, chief executive, finance director and company secretary, and two
non-executive directors. Their details appear on page 21. The board is
responsible to shareholders for the proper management of the group.

A directors’ responsibility statement in respect of the accounts is set out on
page 32. 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 as 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 the
non-executive directors 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 least 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 the
non-executive directors and it is chaired by C A Parritt. The executive
chairman of the board is normally invited to attend. The directors’
remuneration report is set out on pages 28 to 30.

* The audit committee comprises the non-executive directors and is chaired by C
A Parritt. The audit committee report is set out on page 31.

Board and board committee meetings held in 2009

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 3 3

H D Goldring Board 11 11
Audit committee 3 3
Nomination 1 1
committee 2 2
Remuneration
committee

M A Heller Board 11 11
Nomination 1 1
committee 2 2
Remuneration
committee

J A Heller Board 11 10
Audit committee 3 2

C A Parritt Board 11 11
Audit committee 3 3
Nomination 1 1
committee 2 2
Remuneration
committee

M C Stevens Board 11 11
Audit committee 3 2

Nomination 1 1
committee

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 director is H D Goldring. 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
basis. H D Goldring’s association with Delmore and the length of his service on
the board mean that the criteria for independence set out in the Combined Code
of Corporate Governance are not met.

However the board considers that the independence of H D Goldring is not
impaired either because he has served on the board for more than nine years or
because of his association with Delmore. The board therefore regards H D
Goldring as being independent.

The independent directors regularly meet prior to or after board meetings to
discuss corporate governance and other issues concerning the group.

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.

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 2009 and 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
Communications with shareholders are given high priority. Extensive information
about the group and its activities is provided in the Annual Report and online.
The company’s website www.lap.co.uk is also updated with all announcements and
reports promptly when they are issued. 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 existing and potential new shareholders.

Payments to suppliers
The company and the group agree the terms of contracts when orders are placed.
It is group policy that payments to suppliers are made in accordance with those
terms, provided that suppliers also comply with all relevant terms and
conditions. Trade creditors outstanding at the year end represent 17.8 days
annual trade purchases (2008: 17.3 days).

Donations
No political donations were made during the year (2008: £Nil). Donations for
charitable purposes amounted to £1,525 (2008: £250).

Going concern
The group’s business activities, together with the factors likely to affect its
future development are set out in the Chairman’s Statement on the preceding
pages 2 to 5, Chief Executive’s Report on pages 8 to 11. The Finance Director’s
Report on pages 15 to 17 sets out the financial position of the company, its
cash flows, liquidity position and borrowing facilities. In addition Note 17 to
the financial statements gives details of the group’s financial instruments and
interest rate risk, and maturity and hedging profile.

The group has considerable financial resources together with long term leases
with the majority of the tenants of its property portfolio. As a consequence,
the directors believe that the company is well placed to manage its business
risks successfully despite the current uncertain economic outlook.

The directors 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.

Annual General Meeting

The Annual General Meeting will be held at the RAC Club, 89 Pall Mall, London
SW1Y 5HS on Monday 7June 2010 at 10.30 a.m. Items 1 to 9 will be proposed as
ordinary resolutions. More than 50 per cent of shareholders’ votes must be in
favour for these resolutions to be passed. Items 10 and 11 will be proposed as
special resolutions. At least 75 per cent of shareholders’ votes must be in
favour for these resolutions to be passed. The directors consider that the
Capitalisation Issue and 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

1. Resolution 8 – Directors’ 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 £2,726,200. This
represents approximately 33.3 per cent. of the ordinary share capital of the
company in issue (excluding treasury shares) at 16 April 2010 (being the last
practicable date prior to the publication of this Directors’ Report).

In line with recent 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
£2,726,200 , in connection with a rights issue. This amount represents
approximately 33.3 per cent. of the ordinary share capital of the company in
issue (excluding treasury shares) at 16 April 2010 (being the last practicable
date prior to the publication of this Directors’ Report).

The directors’ authority will expire at the conclusion of the next Annual
General Meeting. The directors have no present intention to make use of this
authority. However, if they do exercise the authority, the directors intend to
follow emerging best practice as regards its use (including as regards the
directors standing for re-election in certain cases), as recommended by the
ABI.

2. Resolution 9 – the Capitalisation Issue

In order to enable the directors to effect the Capitalisation Issue the
following ordinary resolution will be proposed at the Annual General Meeting:

(a) To give the directors the authority to issue new Ordinary Shares in lieu of
paying cash dividends of an amount equivalent to 0.8p per Ordinary Share

Paragraph 9.1 of Resolution 9 will grant the directors authority to capitalise
such amount of the company’s share premium account as the directors may
determine up to £672,000 and to apply such sum in paying up the Capitalisation
Issue Shares.

(b) To give the directors the authority to allot Ordinary Shares

Paragraph 9.2 of Resolution 9 will grant the directors the authority to allot
authorised but unissued Ordinary Shares in the share capital of the company. If
Resolutions 8 and 9 are passed, the maximum aggregate amount the directors are
authorised to allot represents 41.55 per cent. of the total issued ordinary
share capital of the company (excluding treasury shares) as at 16 April 2010
(being the latest practicable date prior to the date of this Directors’
Report). The authority given by paragraph 9.1 of Resolution 9 shall expire at
the conclusion of the company’s Annual General Meeting to be held in 2011.

The directors at present intend to use the authority conferred by paragraph 9.2
of Resolution 9 to allot the Capitalisation Issue Shares.

Further information relating to the proposed Capitalisation Issue is set out on
pages 22 and 23 of this Directors’ Report.

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

1. Resolution 10 – 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 2011, 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
£419,610 representing in accordance with institutional investor guidelines,
approximately 5 per cent. of the total ordinary share capital in issue as at 16
April 2010 (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 have no present intention 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% of the company’s
ordinary share capital within a rolling three-year period without prior
consultation with shareholders.

2. Resolution 11 – purchase of own Ordinary Shares

The effect of Resolution 11 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 8,392,203 ordinary
shares (representing approximately 10 per cent of the company’s issued share
capital as at 16 April 2010 (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 the higher of (i) 105% of the average
market price for an ordinary share for the five business days preceding any
such purchase and (ii) the higher of the last independent trade for an ordinary
share and the highest current independent bid for an ordinary share as derived
from the trading venue where the purchase is carried out. The authority
conferred by Resolution 11 will expire at the conclusion of the company’s next
Annual General Meeting to be held in 2011 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.

As at 16 April 2010 (being the last practicable date prior to the publication
of this Directors’ Report) the total number of options to subscribe for new
ordinary shares in the company as at 31 December 2009 was 70,000 shares
representing 0.09% of the company’s issued share capital as at 31 December
2009. Such number of options to subscribe for new ordinary shares would
represent approximately 0.09% of the reduced issued share capital of the
company assuming full use of the authority to make market purchases sought
under Resolution 11.

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

By order of the board

Michael Stevens,

Secretary

16 April 2010

Carlton House

22a St James’s Square

London SW1Y 4JH

Remuneration Report

The remuneration committee is pleased to present its report for the year ended
31 December 2009.

The remuneration committee is a formally constituted committee of the board and
is comprised entirely of independent non-executive directors.
The members of the committee are C A Parritt (chairman) and H D Goldring.

Remuneration policy for executive directors and non-executive directors

The principal function of the remuneration committee is to determine, on behalf
of the board, the remuneration and other benefits of the executive directors
and senior executives, including pensions, share options and service contracts.
The company’s policy is designed to attract, retain and motivate individuals of
a calibre who will ensure the successful leadership and management of the
company. Remuneration packages are designed to reward the executive directors
and senior executives fairly for their contributions whilst remaining within
the range of benefits offered by similar companies in the sector. The
emoluments of each executive director comprise basic salary, a bonus at the
discretion of the remuneration committee, provision of a car, premiums paid in
respect of individual defined-contribution pension arrangements, health
insurance premium and share options. 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. No pension costs are incurred on behalf of
non-executive directors and they do not participate in the share option
schemes.

The board’s policy is to grant share incentives to executive directors,
managers and staff at appropriate times to provide them with an interest in the
longer term development of the group.

Service and employment 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.
All directors’ contracts, as amended from time to time, have run from the date
of appointment. Details of the directors standing for re-election are provided
under `Directors’ in the directors’ report.

It is the policy of the 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.

Summary of directors’ terms

Date of contract Unexpired term Notice period

Executive directors

M A Heller 01-Jan-71 Continuous 6 months

J A Heller 01-May-03 Continuous 12 months

R J Corry 01-Sep-92 Continuous 6 months

M C Stevens 14-Oct-85 Continuous 6 months

Non-executive
directors

H D Goldring 01-Jul-92 Continuous 3 months

C A Parritt 01-Jan-06 Continuous 3 months

The following information has been audited

Directors’ Remuneration for the year ended 31 December 2009

Salary Bonus Bonus Other Total Pension Total Total Pension Total
And in in benefits before contrib 2009 before contrib 2008
fees cash shares Pension utions Pension utions
contrib- contrib
utions utions

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Executive
directors

M A Heller* 7 – 300 50 357 – 357 204 – 204

J A Heller 300 200 406 46 952 30 982 658 30 688

R J Corry 206 25 6 24 261 146 407 221 118 339

M C Stevens 90 – 6 19 115 65 180 136 67 203

603 225 718 139 1,685 241 1,926 1,219 215 1,434

Non-executive
directors

H D Goldring* 40 – – 4 44 – 44 38 – 38

C A Parritt 30 – – – 30 – 30 25 – 25

70 – – 4 74 – 74 63 – 63

Total 673 225 718 143 1,759 241 2,000 1,282 215 1,497
remuneration
for
directors’
service
during year

* See “Directors” below and Note 20 “Related party transactions”.

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

Pension schemes and incentives

Three (2008: three) directors have benefits under money purchase pension
schemes. Contributions in 2009 were £241,000 (2008: £215,000) as set out in the
table above. Directors are not entitled to benefits under any bonus or
incentive schemes apart from the share option and share incentive plan, details
of which are set out below. Bonuses are awarded by the remuneration committee
when merited. In assessing the performance of the executive team and, in
particular to determine whether bonuses are merited the remuneration committee
takes account of the overall performance of the business. Specific areas
addressed include: enhancement of the asset base by effective development;
changes in rental income generated; quality and risk profile of the tenant
base; voids; timely acquisitions and disposals; security of funding
arrangements; and overall teamwork. Bonuses were awarded by the remuneration
committee to four executive directors during 2009 (2008: four).

Directors

Although M A 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 M A Heller has an interest. The board estimates that the value of these
services, if supplied to a third party, would have been £275,000 (2008: £
275,000) for the year. Further details of these services are set out in Note 20
“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 20 to the financial
statements.

Share option schemes

The company has two share option schemes:

1. The HMRC approved scheme (Approved Scheme) was set up in 1986 in accordance
with HMRC rules to gain HMRC approved status which gave the members certain tax
advantages. No director has any options outstanding under the Approved Scheme.

2. The non HMRC approved scheme (Unapproved Scheme) was set up in 1998 and is
not subject to HMRC rules for approval. One executive director had options in
2009 to subscribe for ordinary shares under the Unapproved Scheme as follows:

Number of share options

Option 1 31 from Exercised
price January Exercised Granted December on
2009 2009 in 2009 2009

Unapproved
Scheme:

M C Stevens 25.66p 50,000 (50,000) – 8 Mar 02 7 Mar 09

M C Stevens exercised the 50,000 options on 12 February 2009 when the mid-
market price was 31.25p

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. The exercise of options under the Unapproved Scheme is subject to
the satisfaction of objective performance conditions specified by the
remuneration committee, which conform to institutional shareholder guidelines
and best practice provisions. These performance conditions have been achieved.

The bid market price of London & Associated Properties PLC ordinary shares at
31 December 2009 was 43.3p (2008: 25.0p). During the year the share mid-market
price ranged between 52.50p and 26.00p.

Share incentive plan

Following a recommendation of the remuneration committee the directors set up an
HMRC approved share incentive plan (SIP) in May 2006. The purpose of the plan,
which is open to all eligible LAP head office based executive directors and
staff is to enable them to acquire shares in the company to 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 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 On 22 December 2009 (2008: 17 November) free shares of up to the
annual maximum of £3,000 per member were awarded at 43.00p (2008: 44.00p) per
share as follows:

Free shares awarded:
Number of members Number of shares Value of shares

2009 2008 2009 2008 2009 2008

£ £

Directors:

R J Corry 1 1 6,977 6,818 3,000 3,000

J A Heller 1 1 6,977 6,818 3,000 3,000

M C Stevens 1 1 6,977 6,818 3,000 3,000

Staff 17 19 72,792 80,682 31,300 35,500

Total at 31 December 20 22 93,723 101,136 40,300 44,500

2. Partnership shares On 17 November 2009 (2008: 17 November) directors and
staff were invited to complete partnership share agreements and commence saving
for partnership shares over the period November 2009 to October 2010. At 31
December 2009 three directors and seven staff had saved a total of £5,250
towards the cost of partnership shares to be acquired in November 2010. The
shares will be acquired at the prevailing market price on the day of
acquisition.

Partnership shares issued:

Number of members Number of shares Value of shares

2009 2008 2009 2008 2009 2008

Directors: £ £

R J Corry 1 1 3,488 3,409 1,500 1,500

J A Heller 1 1 3,488 3,409 1,500 1,500

M C Stevens 1 1 3,488 3,409 1,500 1,500

Staff 7 19 24,416 53,955 10,500 23,740

Total at 31 December 10 22 34,880 64,182 15,000 28,240

3. Matching shares The partnership share agreements for the year to 31 October
2009 provide for two matching shares to be awarded free of charge for each
partnership share acquired in December 2009. On 22 December 2009 69,770
matching shares were allocated (2008: 128,364). Matching shares will usually be
forfeited if a member leaves employment in the group within 5 years of their
grant.

Matching shares granted:

Number of members Number of shares Value of shares

2009 2008 2009 2008 2009 2008

£ £

Directors:

R J Corry 1 1 6,977 6,818 3,000 3,000

J A Heller 1 1 6,977 6,818 3,000 3,000

M C Stevens 1 1 6,977 6,818 3,000 3,000

Staff 7 19 48,839 107,910 21,000 47,480

Total at 31 December 10 22 69,770 128,364 30,000 56,480

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 2009 amounted to £6,547 (2008: £6,833).

Dividend shares issued:

Number of members Number of shares Value of shares

2009 2008 2009 2008 2009 2008

£ £

Directors:

R J Corry 1 1 1,573 – 464 –

J A Heller 1 1 1,573 – 464 –

M C Stevens 1 1 1,573 – 464 –

Staff 17 19 17,061 – 5,033 –

Total at 31 December 20 22 21,780 – 6,425 –

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.

The following information is unaudited
The graph illustrates the company’s performance as compared with a broad equity
market index over a five year period. Performance is measured by total
shareholder return. The directors have chosen the FTSE All Share – Total Return
Index as a suitable index for this comparison as it gives an indication of
performance against a large spread of quoted companies.

C A Parritt
Chairman – Remuneration Committee
16 April 2010

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 Chartered Accountants.

The audit committee’s prime 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;

* consider once a year the need for an internal audit function;

* advise the board on the appointment of 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 the auditors’ 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. Prior to monthly board meetings the members of the committee 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 auditor, 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 had separate meetings 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 PKF (UK) LLP, a separate and independent firm of
registered auditors.

C A Parritt
Chairman – Audit Committee
16 April 2010

Directors’ responsibility statement

The directors are responsible for preparing 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 Services 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 and
the company 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. state for the group financial statements, whether they have been prepared
in accordance with IFRSs adopted by the EU and for the company financial
statements 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 Regulations.
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 on Page 21 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 management reportcontained 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.

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 2009 by the
company as detailed in our Valuation Report dated 22 February 2010.

Having regard to the foregoing, we are of the opinion that the open market
value as at 31 December 2009 of these interests was:

£’000

Freehold 78,209

Leasehold 127,656

205,865

27 Soho Square, London W1D 3AY Allsop LLP

22 February 2010 Property Consultants

Regulated by Royal Institution of
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 2009 by the company as
detailed in our Valuation Report dated 24 February 2010.

Having regard to the foregoing, we are of the opinion that the open market
value as at 31 December 2009 of these interests was:

£’000

Freehold 4,023

Capitol House, Russell Street, BNP Paribas Real Estate
Advisory and Property
Leeds LS1 5SP Management UK Limited

24 February 2010 Regulated by Royal Institution
of

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”) on pages 34 to 62. 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 auditors

As more fully explained in the Directors’ Responsibilities Statement set out on
page 32, 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 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 APB’s website at www.frc.org.uk/apb/scope/UKP.

Opinion on the 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 2009 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.

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 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:

Under the Companies Act 2006 we are required 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.

Under the Listing Rules we are required to review:

* the directors’ statement, set out on page 32, in relation to going concern;
and

* the part of the Corporate Governance Statement relating to the company’s
compliance with the nine provisions of the June 2008 Combined Code
specified for our review.

Nigel Tristem (Senior Statutory Auditor)

For and on behalf of BAKER TILLY UK AUDIT LLP,

Chartered Accountants

2 Bloomsbury Street

London WC1B 3ST

19 April 2010

Consolidated income statement
for the year ended 31 December 2009

2009 2008

Notes £’000 £’000

Gross rental income

Group and share of joint ventures 17,067 16,775

Less: joint ventures – share of rental income (519) (272)

Revenue 1 16,548 16,503

Direct property expenses (2,166) (3,137)

Overheads (4,865) (4,408)

Property overheads 1 (7,031) (7,545)

Net rental income 1 9,517 8,958

Listed investments held for trading 3 148 298

Profit on sale of investment properties 14 897

Net increase/(decrease) on revaluation of 9,422 (33,125)
investment properties

Net increase/(decrease) in value of investments 178 (1,530)
held for trading

Operating profit/(loss) 1 19,279 (24,502)

Share of loss of joint ventures after tax 10 (276) (588)

Share of profit of associate after tax 11 1,485 172

Profit/(loss) before interest and taxation 20,488 (24,918)

Interest rate derivatives 17 13,269 (21,063)

Finance income 5 90 681

Finance expenses 5 (12,440) (11,966)

Profit/(loss) before taxation 21,407 (57,266)

Income tax 6 (2,355) 9,812

Profit/(loss) for the year attributable to the 19,052 (47,454)
owners of the parent

Basic profit/(loss) per share 8 24.32p (62.30)p

Diluted profit/(loss) per share 8 24.32p (62.30)p

The revenue and operating result for the year is derived from continuing
operations in the United Kingdom.

consolidated balance sheet
at 31 December 2009

2009 2008

Notes £’000 £’000

Non-current assets

Market value of properties attributable 213,624 218,532
to Group

Present value of head leases 29,485 27,238

Property 9 243,109 245,770

Plant and equipment 9 816 917

Investments in joint ventures 10 1,396 1,793

Investments in associated company 11 8,044 6,567

Held to maturity investments 12 1,805 1,805

255,170 256,852

Current assets

Trade and other receivables 13 3,976 3,974

Financial assets-investments held for 14 702 2,330
trading

Cash and cash equivalents 8,655 8,191

13,333 14,495

Total assets 268,503 271,347

Current liabilities

Trade and other payables 15 (11,427) (11,268)

Financial liabilities – borrowings 16 (7,216) (7,277)

Current tax liabilities (741) (2,417)

(19,384) (20,962)

Non-current liabilities

Financial liabilities-borrowings 16 (147,788) (160,417)

Interest rate derivatives 17 (6,347) (19,616)

Present value of head leases on (29,485) (27,238)
properties

Deferred tax 18 (6,395) (2,808)

(190,015) (210,079)

Total liabilities (209,399) (231,041)

Net assets 59,104 40,306

Equity attributable to the owners of the
parent

Share capital 19 8,392 8,232

Share premium account 5,042 5,236

Translation reserve in associate (284) (504)

Capital redemption reserve 47 47

Retained earnings (excluding treasury 50,465 33,532
shares)

Treasury shares 19 (4,558) (6,237)

Retained earnings 45,907 27,295

Total shareholders’ equity 59,104 40,306

Net assets per share 8 74.22p 52.73p

Diluted net assets per share 8 74.19p 52.70p

These financial statements were approved by the board of directors and
authorised for issue on 16 April 2010 and signed on its behalf by:

M A Heller R J Corry

Director Director

Company Registration No. 341829

Consolidated statement of changes in shareholders’ equity

for the year ended 31 December 2009

Retained
earnings

Translation Fair Capital Treasury Retained Total
Share Share reserves value redemption Earnings equity
capital premium reserve reserve shares excluding
* treasury
shares

£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000

Balance at 1 January 8,232 5,236 (530) 1,001 47 (6,549) 81,554 88,991
2008

Loss for year – – – – – – (47,454) (47,454)

Other comprehensive
income:

Reclassification of – – – (1,001) – – 1,001 –
fair value of interest
derivatives

Currency translation – – 26 – – – – 26
in associate

Total other – – 26 (1,001) – – 1,001 26
comprehensive income

Total comprehensive – – 26 (1,001) – – (46,453) (47,428)
income

Transactions with
owners:

Equity share options – – – – – – 99 99
in associate

Disposal of own shares – – – – – 129 – 129

Loss on transfer of – – – – – 183 (183) –
own shares

Dividends paid – – – – – – (1,485) (1,485)

Transactions with – – – – – 312 (1,569) (1,257)
owners

Balance at 31 December 8,232 5,236 (504) – 47 (6,237) 33,532 40,306
2008

Profit for year – – – – – – 19,052 19,052

Other comprehensive
income:

Currency translation – – 220 – – – – 220
in associate

Total other – – 220 – – – – 220
comprehensive income

Total comprehensive – – 220 – – – 19,052 19,272
income

Transaction with
owners:

Equity share options – – – – – – (76) (76)
in associate

Issue of own shares 160 (194) – – – – – (34)
and expenses

Disposal of own shares – – – – – 521 – 521

Loss on transfer of – – – – – 1,158 (1,158) –
own shares

Dividends paid – – – – – – (885) (885)

Transactions with 160 (194) – – – 1,679 (2,119) (474)
owners

Balance at 31 December 8,392 5,042 (284) – 47 (4,558) 50,465 59,104
2009

* Interest rate derivatives

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

Consolidated statement of comprehensive income

for the year ended 31 December 2009

2009 2008

£’000 £’000

Profit/(loss) for the year 19,052 (47,454)

Other Comprehensive income:

Currency translation in associate 220 26

Other comprehensive income for the year 220 26

Total comprehensive income for the period 19,272 (47,428)
attributable to owners of the parent

Consolidated cash flow statement

for the year ended 31 December 2009

2009 2008

£’000 £’000

Operating activities

Profit/(Loss) before interest and taxation 20,488 (24,918)

Depreciation 210 200

Profit on disposal of non-current assets (3) (2)

Profit on sale of investment properties (14) (897)

Net (increase)/decrease on revaluation of investment (9,422) 33,125
properties

Share of (profit)/loss of joint ventures and associate (178) 416
after tax

Net (increase)/decrease in value of investments held for (1,209) 1,530
trading

Decrease in net current assets 2,303 2,566

Cash generated from operations 12,175 12,020

Income tax (paid)/repaid (444) 104

Cash inflows from operating activities 11,731 12,124

Investing activities

Investment in shares and loan stock in joint ventures – (2,300)

Property acquisitions and improvements (3,763) (19,788)

Sale of properties 17,805 16,229

Purchase of office equipment and motor cars (133) (294)

Sale of office equipment and motor cars 27 61

Interest received 90 681

Dividends received from associates and joint ventures 273 131

Cash inflows/(outflows) from investing activities 14,299 (5,280)

Financing activities

Issue expenses (34) –

Sale of treasury shares 521 129

Equity dividends paid (885) (1,485)

Interest paid (12,132) (12,210)

Repayment of short term loan from joint ventures (225) (7)

Repayment of medium term bank loan (12,750) (2,571)

Cash outflows from financing activities (25,505) (16,144)

Net increase/(decrease) in cash and cash equivalents 525 (9,300)

Cash and cash equivalents at beginning of year 914 10,214

Cash and cash equivalents at end of year 1,439 914

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

2009 2008

£’000 £’000

Cash and cash equivalents (before bank overdrafts) 8,655 8,191

Bank overdrafts (7,216) (7,277)

Cash and cash equivalents at end of year 1,439 914

£0.6m of cash deposits at 31 December 2009 was charged as security to Axa
Annuity Company.

Consolidated cash flow statement

for the year ended 31 December 2009

2009 2008

£’000 £’000

Operating activities

Profit/(Loss) before interest and taxation 20,488 (24,918)

Depreciation 210 200

Profit on disposal of non-current assets (3) (2)

Profit on sale of investment properties (14) (897)

Net (increase)/decrease on revaluation of investment (9,422) 33,125
properties

Share of (profit)/loss of joint ventures and associate (178) 416
after tax

Net (increase)/decrease in value of investments held for (1,209) 1,530
trading

Decrease in net current assets 2,303 2,566

Cash generated from operations 12,175 12,020

Income tax (paid)/repaid (444) 104

Cash inflows from operating activities 11,731 12,124

Investing activities

Investment in shares and loan stock in joint ventures – (2,300)

Property acquisitions and improvements (3,763) (19,788)

Sale of properties 17,805 16,229

Purchase of office equipment and motor cars (133) (294)

Sale of office equipment and motor cars 27 61

Interest received 90 681

Dividends received from associates and joint ventures 273 131

Cash inflows/(outflows) from investing activities 14,299 (5,280)

Financing activities

Issue expenses (34) –

Sale of treasury shares 521 129

Equity dividends paid (885) (1,485)

Interest paid (12,132) (12,210)

Repayment of short term loan from joint ventures (225) (7)

Repayment of medium term bank loan (12,750) (2,571)

Cash outflows from financing activities (25,505) (16,144)

Net increase/(decrease) in cash and cash equivalents 525 (9,300)

Cash and cash equivalents at beginning of year 914 10,214

Cash and cash equivalents at end of year 1,439 914

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

2009 2008

£’000 £’000

Cash and cash equivalents (before bank overdrafts) 8,655 8,191

Bank overdrafts (7,216) (7,277)

Cash and cash equivalents at end of year 1,439 914

£0.6m of cash deposits at 31 December 2009 was charged as security to Axa
Annuity Company.

Group accounting policies

The following are the principal group accounting policies:

Basis of accounting

The group financial statements for the year ended 31 December 2009 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 25. 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 and
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 is a public listed parent company,
incorporated and domiciled in England and quoted on the London Stock Exchange.
The Company registration number is 341829.

Going concern

The most significant judgements made in preparing these accounts relate to the
carrying value of the properties, investments and interest rate hedges which
are stated at open market value. The Group uses external professional valuers
to determine the values of our properties.

The Directors exercised their commercial judgements when reviewing the cash
flow forecasts of the Group and the underlying assumptions on which they are
based. The Group’s business activities, together with the factors likely to
affect its future development, are set out in the Chairman’s Statement, the
Chief Executive’s Report and Finance Director’s Report. In addition the
Directors considered note 17 of the financial statements which include 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.

With sound financial resources and long term leases in place with the tenants,
the Directors believe that the company is well placed to manage its business
risks despite the current uncertain economic outlook. 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.

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 which are contained in the Directors’ Report.

International Accounting Standards (IAS/IFRS)

At the date of approval of these financial statements, the following new
Standards and interpretations which have been applied in these Financial
statements, were in issue:

IAS 1 (amended) Presentation of financial statements

IAS 23 (amended) Borrowing costs.

IAS 27 (revised) Consolidated and separate financial statements.

IAS 39 (amended) Eligible hedged items.

IFRS 1 (amended) Cost of investment in a subsidiary, jointly controlled entity
or associate.

IFRS 2 (amended) Share-based payments – vesting conditions and cancellations.

IFRS 3 (revised) Business combinations.

IFRS 7 (amended) Financial instruments.

IFRS 8 Operating segments.

IFRIC 9 (amended) Reassessment of Embedded Derivatives.

IFRIC 15 Agreements for the construction of real estate.

IFRIC 17 Distributions of non-cash assets to owners.

Other than additional disclosure, there is no effect on reported income or net
assets.

The directors anticipate that the adoption of the standards and interpretations
in issue but not yet effective in future periods will have no material impact
on the financial statements of the Group.

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 economically benefit 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 25.4.

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 or capital
contributions in lieu of rent free periods. For income from property leased out
under a finance lease, a lease receivable asset is recognised in the balance
sheet at an amount equal to the net investment in the lease, as defined in IAS
17. Minimum lease payments receivable, again as defined in IAS 17, are
apportioned between finance income and the reduction of the outstanding lease
receivable so as to produce a constant periodic rate of return on the remaining
net investment in the lease. 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 are
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
The group uses derivative financial instruments to hedge the interest rate risk
associated with the financing of the group’s business. No trading in such
financial instruments is undertaken. At each reporting date, these interest
rate derivatives are recognised at their fair value to the business, being the
Net Present Value of the difference between the hedged rate of interest and the
market rate of interest for the remaining period of the hedge.

Where a derivative is designated as a hedge of the variability of a highly
probable forecast transaction i.e. 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 i.e. when interest income or
expense is recognised.

The gain or loss arising from any adjustment to the fair value to the business
calculation is recognised immediately in the group income statement when the
criteria set out in IAS 32 allowing the movements to be shown in equity have
not been met.

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 valuation
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
For management reporting purposes, the Group is organised into business
segments distinguishable by economic activity. The Group’s only business
segments are investment properties and other investments. These business
segments are subject to risks and returns that are different from those of
other business segments and are the primary basis on which the Group reports
its segment information. This is consistent with 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 2009

1. Segmental analysis

Following the adoption of IFRS 8 during the year, Operating Segments are based
on the internal reporting and operational management of the Group. The Group is
organised into Property and other investments.

Business segments

2009 2008
Property Listed Property Listed
investments Total investments Total

£’000 £’000 £’000 £’000 £’000 £’000

Rental income 16,548 – 16,548 16,503 – 16,503

Property overheads (7,031) – (7,031) (7,545) – (7,545)

Net rental income 9,517 – 9,517 8,958 – 8,958

Listed investment – 148 148 – 298 298
income

Profit on sale of 14 – 14 897 – 897
investment properties

Net increase/ 9,422 – 9,422 (33,125) – (33,125)
(decrease) on
revaluation of
investment properties

Net increase/ – 178 178 – (1,530) (1,530)
(decrease) on
revaluation of
investments held for
trading

Operating profit/ 18,953 326 19,279 (23,270) (1,232) (24,502)
(loss)*

Total assets 256,556 702 257,258 258,857 2,330 261,187
(excluding investments
in associate and joint
ventures)

Total liabilities (53,654) – (53,654) (60,930) – (60,930)
(excluding borrowings
and current tax)

Borrowings (155,004) – (155,004) (167,694) – (167,694)

Net assets 47,898 702 48,600 30,233 2,330 32,563

Current tax (741) (2,417)
liabilities: non
segmental

Investments in joint 3,196 3,588
ventures: non
segmental (notes 10
and 12)

Investments in 8,044 6,567
associate: non
segmental (note 11)

Investments in 5 5
unlisted companies

Net assets as per 59,104 40,306
balance sheet

Other segment items:

Depreciation 210 – 210 200 – 200

Capital expenditure 3,594 – 3,594 19,208 – 19,208

Rental income

Dragon Group
Property Analytical Retail Share
Ventures Properties 2009
Total Total 2008

£’000 £’000 £’000 £’000 £’000 £’000

Rental income 16,548 818 220 17,586 17,067 16,775

Direct property expenses (2,166) (57) (13) (2,236) (2,201) (3,156)

Overheads (4,865) (222) (70) (5,157) (5,011) (4,563)

9,517 539 137 10,193 9,855 9,056

Less: attributable to (338) (98)
joint ventures

Net rental income 9,517 8,958

*Operating profit is defined as profit before tax and excludes the share of
profit & losses of joint ventures and associate, Finance income and expenses,
and the movement of interest rate derivatives.

Geographical segments

At net rental income level, the Group operates in the United Kingdom only. 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 (2008:none).

2. Profit/(loss) before taxation

2009 2008

£’000 £’000

Profit/(loss) before taxation is arrived at after charging/
(crediting):

Staff costs (note 21) 3,361 2,829

Depreciation on tangible fixed assets – owned assets 210 200

Operating lease rentals – land and buildings 385 373

Profit on disposal of motor vehicles and office equipment (3) (2)

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

Audit services:

Statutory – company and consolidation 81 82

– subsidiaries 54 65

Further assurance services 10 11

Other services 8 8

153 166

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

3. Listed investments held for trading

2009 2008

£’000 £’000

Investment sales 1,948 1,603

Dividends receivable 60 141

2,008 1,744

Cost of sales (1,835) (1,421)

173 323

Attributable overheads (25) (25)

148 298

4. Directors’ emoluments

2009 2008

£’000 £’000

Emoluments 1,759 1,282

Defined contribution pension scheme contributions 241 215

2,000 1,497

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

5. Finance costs

2009 2008

£’000 £’000

Finance income 90 681

Finance expenses

Interest on bank loans and overdrafts (3,013) (9,575)

Interest on other loans (2,108) (2,178)

Interest on derivatives adjustment (5,338) 1,614

Interest on obligations under finance leases (1,981) (1,989)

Total borrowing costs (12,440) (12,128)

Amounts included in the cost of qualifying assets – 162

(12,440) (11,966)

(12,350) (11,285)

No interest payable (2008: £162,000) has been transferred to the cost of
investment properties (Note 9). The amounts capitalised represent the cost of
funds forming part of the Group’s borrowings which were used in financing major
capital projects.

6. Income tax

2009 2008

£’000 £’000

Current tax:

Corporation tax on profit/(loss) of the period – 299

Adjustments in respect of previous periods (1,232) 152

Total current tax (1,232) 451

Deferred tax

Origination and reversal of timing differences (1,052) 2,269

Revaluation of investment properties 658 (7,726)

Accelerated capital allowances 270 397

Fair value of interest derivatives 3,715 (5,898)

Adjustments in respect of previous periods (4) 695

Total deferred tax (note 18) 3,587 (10,263)

Tax on profit/(loss) on ordinary activities 2,355 (9,812)

Factors affecting tax charge for the year

The corporation tax assessed for the year is different from that at the
standard rate of corporation tax in the United Kingdom of 28 per cent (2008:
28.5 per cent). The differences are explained below:

Profit/(loss) on ordinary activities before taxation 21,407 (57,266)

Taxation on ordinary activities at 28 per cent (2008: 28.5%) 5,994 (16,321)

Effects of:

Expenses not deductible for tax purposes 4 8

Other differences (2,059) 5,243

Joint ventures and associate (348) 119

Deferred tax rate adjustment – 292

Adjustment in respect of prior years (1,236) 847

Tax charge/(credit) for the period 2,355 (9,812)

The main component of other differences in the reconciliation relates to
potential capital gains of £1.9 million (2008: indexation allowance £4.8
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. Dividend

2009 2008

Per £’000 Per £’000
share share

Dividends paid during the year relating to the 1.15p 885 1.95p 1,485
prior period

Equivalent final dividend in ordinary shares 0.80p –
issued during the year relating to prior period

1.95p 1.95p

Dividends to be paid:

Interim dividend for 2009 paid on 22 January 0.75p 597 0.75p 571
2010

Proposed equivalent final dividend for 2009 1.20p 981 1.20p 933
(0.4p in cash and 0.8p in ordinary shares)

1.95p 1,578 1.95p 1,504

The proposed final dividend will be payable on 2 July 2010 to shareholders
registered at the close of business on 4 June 2010.

8. Profit/(loss) per share and net assets per share

Profit/(loss) per share have been calculated as follows: 2009 2008

Profit/(loss) for the year for the purposes of basic and 19,052 (47,454)
diluted loss per share (£’000)

Weighted average number of ordinary shares in issue for the 78,345 76,172
purpose of basic profit/(loss) per share (‘000)

Basic profit/(loss) per share 24.32p (62.30)p

Weighted average number of ordinary shares in issue for the 78,345 76,172
purpose of diluted profit/(loss) per share (‘000)

Fully diluted profit/(loss) per share 24.32p (62.30)p

Weighted average number of shares in issue is calculated after excluding
treasury shares of 4,293,051 (2008: 5,873,865).

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

Net assets per share have been calculated as follows:

Net assets Shares in issue Net assets per
share

2009 2008 2009 2008 2009 2008

£’000 £’000 `000 `000 Pence Pence

Basic

At 31 December 59,104 40,306 79,629 76,443 74.22 52.73

Dilution adjustments for
shares subject to option
agreements:

Issue of outstanding share 28 40 70 120
options

Diluted 59,132 40,346 79,699 76,563 74.19 52.70

9. Property and plant and equipment

Investment Properties

Office
Leasehold equipment
over and motor
Freehold 50 years Total vehicles

£’000 £’000 £’000 £’000

Cost or valuation at 1 95,272 150,498 245,770 1,682
January 2009

Additions 1,450 2,011 3,461 133

Disposals (17,791) – (17,791) (81)

Increase in present value of – 2,247 2,247 –
head leases

Increase on revaluation 4,667 4,755 9,422 –

Cost or valuation at 31 83,598 159,511 243,109 1,734
December 2009

Representing assets stated
at:

Valuation 83,598 130,026 213,624 –

Present value of head leases – 29,485 29,485 –

Cost – – – 1,734

83,598 159,511 243,109 1,734

Depreciation at 1 January – – – 765
2009

Charge for the year – – – 210

Disposals – – – (57)

Depreciation at 31 December – – – 918
2009

Net book value at 1 January 95,272 150,498 245,770 917
2009

Net book value at 31 December 83,598 159,511 243,109 816
2009

9. Property and plant and equipment continued

Investment Properties

Office
Leasehold equipment
over and motor
Freehold 50 years Total vehicles

£’000 £’000 £’000 £’000

Cost or valuation at 1 116,206 163,541 279,747 1,554
January 2008

Additions 15,438 3,476 18,914 294

Disposals (15,333) – (15,333) (166)

Decrease in present value of – (4,433) (4,433) –
head leases

Decrease on revaluation (21,039) (12,086) (33,125) –

Cost or valuation at 31 95,272 150,498 245,770 1,682
December 2008

Representing assets stated
at:

Valuation: 95,272 123,260 218,532 –

Present value of head leases – 27,238 27,238 –

Cost – – – 1,682

95,272 150,498 245,770 1,682

Depreciation at 1 January – – – 673
2008

Charge for the year – – – 200

Disposals – – – (108)

Depreciation at 31 December – – – 765
2008

Net book value at 1 January 116,206 163,541 279,747 881
2008

Net book value at 31 December 95,272 150,498 245,770 917
2008

The leasehold over fifty years and freehold properties, excluding the present
value of head leases, were valued as at 31 December 2009 by external
professional firms of chartered surveyors and Directors. The valuations were
made at open market value.

2009 2008

£’000 £’000

Allsop LLP 205,865 214,855

BNP Paribas Real Estate 4,023 3,677

Directors’ valuation 3,736 –

213,624 218,532

Add: Present value of headleases 29,485 27,238

243,109 245,770

Upper Street, Islington, which was held at Directors’ valuation at the balance
sheet date, was sold in January 2010 for £3.8 million.

The historical cost of investment properties, including total capitalised
interest of £6,051,000 (2008: £6,051,000) was as follows:

2009 2008
Leasehold Leasehold
Freehold Over 50 Freehold Over 50
years years

£’000 £’000 £’000 £’000

Cost at 1 January 96,308 131,451 94,957 127,975

Additions 1,450 2,011 15,438 3,476

Disposals (17,150) – (14,087) –

Cost at 31 December 80,608 133,462 96,308 131,451

10. Investment in joint ventures

2009 2008

£’000 £’000

Group share of:

Turnover 519 272

Loss before tax (242) (684)

Taxation (34) 96

Loss after tax (276) (588)

Non-current assets 6,565 6,712

Current assets 1,582 1,874

Current liabilities (3,871) (1,485)

Non-current liabilities (2,880) (5,308)

Net assets 1,396 1,793

Analytical Ventures Limited (Analytical Ventures) – unlisted property
investment company. The company owns 50 per cent of the issued share capital
and 50 per cent of the issued loan stock. The remaining 50 per cent is owned by
the Bank of Scotland. Analytical Ventures is incorporated and operates in
England and Wales and has issued share capital of 7,558,000 ordinary shares
(2008:7,558,000 ordinary shares of £1 each). Analytical Ventures is managed by
a board of directors with neither party having overall control.

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 (2008:500,000 ordinary shares of £1 each).
Dragon is managed by a board of directors with neither party having overall
control.

Shares in joint ventures: 2009 2008

£’000 £’000

At 1 January 1,793 1,881

Share of loss after tax (276) (588)

Dividend received (121) –

Investment valuation – 500

(397) (88)

At 31 December 1,396 1,793

11. Investments in associated company

2009 2008

£’000 £’000

Bisichi Mining PLC – listed mining and property investment
company

Group share of:

Turnover 12,094 10,828

Profit before tax 2,039 929

Taxation (554) (757)

Profit after tax 1,485 172

Non-current assets 9,971 9,573

Current assets 4,308 4,574

Current liabilities (4,345) (5,929)

Non-current liabilities (1,890) (1,651)

Net assets 8,044 6,567

2009 2008

£’000 £’000

Share in associate:

At 1 January 6,567 6,401

Share of profit after tax 1,485 172

Equity share options (76) 99

Currency translation 220 26

Dividend received (152) (131)

1,477 166

At 31 December 8,044 6,567

The company owns 42 per cent (2008: 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 10,451,506 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 by virtue that 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 2009 was £7,611,000
(2008: £6,087,000).

12. Held to maturity investments

Loan Loan
2009 Unlisted Stock 2008 Unlisted Stock
Total Shares in joint Total Shares in joint
ventures ventures

£’000 £’000 £’000 £’000 £’000 £’000

Cost

At 1 January 1,805 5 1,800 5 5 –

Loan stock issue – – – 1,800 – 1,800

At 31 December 1,805 5 1,800 1,805 5 1,800

13. Trade and other receivables

2009 2008

£’000 £’000

Trade receivables 736 966

Amounts due from associate and joint ventures 196 148

Other receivables 437 474

Prepayments and accrued income 2,607 2386

3,976 3,974

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

14. Investments held for trading

2009 2008

£’000 £’000

Market bid value of the listed investment 702 2,330
portfolio

Unrealised deficit of market value over cost (467) (490)

Listed investment portfolio at cost 1,169 2,820

All investments are listed on the London Stock Exchange.

15. Trade and other payables

2009 2008

£’000 £’000

Trade payables 691 1,070

Amounts owed to joint ventures 1,165 1,454

Other taxation and social security costs 825 553

Other payables 789 874

Accruals and deferred income 7,957 7,317

11,427 11,268

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

16. Borrowings

Current borrowings – amounts falling due within one year

2009 2008

£’000 £’000

Bank overdrafts (unsecured) 7,216 7,277

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

Term borrowings

Debenture stocks:

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

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

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

£10 million First Mortgage Debenture Stock 2022 at 8.109 9,787 9,770
per cent*

21,487 21,470

Term bank loans:

£90 million revolving credit facility repayable in 2011* 56,494 69,184

£70 million term bank loan repayable in 2014* 69,807 69,763

126,301 138,947

147,788 160,417

*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 2013, 2016, 2018 and 2022, the long term £90
million bank revolving credit facility repayable in September 2011 and the long
term £70 million term bank loan repayable in November 2014 are secured on
specific freehold and leasehold properties which are included in the financial
statements at a value of £209.6 million.

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.

17. 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.

17. Financial instruments continued

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 Over 5 2009
1 year 2-5 years Total
years

£’000 £’000 £’000 £’000

Bank overdrafts (floating) 7,216 – – 7,216

Debentures (fixed) – 5,000 16,700 21,700

Bank loans (floating)* – 126,679 – 126,679

Trade and other payables 11,427 – – 11,427
(non-interest)

18,643 131,679 16,700 167,022

Less 2-5 Over 5 2008
than years years Total
1 year

£’000 £’000 £’000 £’000

Bank overdrafts (floating) 7,277 – – 7,277

Debentures (fixed) – 5,000 16,700 21,700

Bank loans (floating)* – 69,429 70,000 139,429

Trade and other payables 11,268 – – 11,268
(non-interest)

18,545 74,429 86,700 179,674

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 2009 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 15 and 16.

The Group has undrawn facilities of £35,105,000 (2008: £22,544,000) as follows:

2009 2008

£’000 £’000

Overdrafts 1,784 1,973

Term facilities expiring in two to five years 33,321 20,571

35,105 22,544

Hedge profile

a) There is a hedge to cover part of the £90 million revolving credit facility,
which currently covers the full £57 million drawn. It consists of a 20 year
swap for £35 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.

b) There is a hedge to cover the £70 million term bank loan drawn. It consists
of a 20 year swap for £70 million with a 7 year call option in favour of the
bank, taken out in November 2007, at 4.76 per cent.

At the year end the amount recognised was £4,570,000 deficit (2008: £14,146,000
deficit) being the estimated financial effect of the fair value to the business
of these hedging instruments less the deferred tax thereon.

The Directors have estimated the financial effect of the fair value to the
business of these hedging instruments. This has been calculated as the Net
Present Value of the difference between the 18 year interest rate, which was
4.38 per cent at 31 December 2009 against the rate payable under the specific
hedge. This has given a liability at 31 December 2009 of £6,347,000 (2008: £
19,616,000) as shown in the balance sheet and this value changes by
approximately £1,800,000 for each 0.1% change in interest rate. The banks own
initial quotations at 31 December 2009 to close each of the hedges were £
9,918,000 (2008: £24,893,000). It is not the company’s intention to crystallise
the derivatives.

Under IAS 39 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 banks have an option to cancel the hedges in
November 2014 and January 2015.

Fair value of financial instruments

Fair value estimation

Effective 1 January 2009, the Group adopted amendment to IFRS 7 for financial
instruments that are measured in the balance sheet at fair value, this requires
disclosure of fair value measurements by level of the following fair value
hierarchy:

* 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).

2009

Level 1 Level 2 Level 3 Total Gain/
£’000 £’000 £’000 £’000 (loss) to
income
statement
£’000

Financial assets

Other financial assets held for
trading

Quoted equities 702 – – 702 178

Financial liabilities

Derivative financial instruments

Interest rate swaps – – 6,347 6,347 13,269

2008

Level 1 Level 2 Level 3 Total Gain/
£’000 £’000 £’000 £’000 (loss) to
income
statement
£’000

Financial assets

Other financial assets held for
trading

Quoted equities 2,330 – – 2,330 (1,530)

Financial liabilities

Derivative financial instruments

Interest rate swaps – – 19,616 19,616 (21,063)

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 to the underlying assets. In order to maintain or adjust the
capital structure, the Group may adjust the capital structure, vary the amount
of dividends paid to shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt.

The Group considers its capital to include share capital, share premium,
capital redemption reserve, translation reserve and retained earnings, but
excluding the fair value reserve and 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
2009 this decreased to 221.6 per cent (2008: 266.2 per cent) which was
calculated as follows:

2009 2008

£’000 £’000

Total debt 155,004 167,694

Less cash and cash equivalents (8,655) (8,191)

Net debt 146,349 159,503

Total equity 65,451 59,922

223.6% 266.2%

The gearing reduced primarily due to the rise in the asset values in the year.
All the debt, apart from the overdrafts, is at fixed rates of interest as shown
in notes 16 and 17. The Group does not have any externally imposed capital
requirements.

Financial assets

Financial assets are disclosed in notes 12, 13 and 14 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.

2009 2008

£’000 £’000

Cash at bank and in hand 8,655 8,191

These funds are primarily invested in short term bank deposits maturing within
one year bearing interest at the bank’s variable rates. £0.6 million (2008: £
nil) of the cash is secured against the 2022 First Mortgage Debenture.

Financial liabilities maturity

Repayment of borrowings

2009 2008

£’000 £’000

Bank loans and overdrafts:

Repayable on demand or within one year 7,216 7,277

Repayable between two and five years 126,301 69,184

Repayable after more than five years – 69,763

133,517 146,224

Debentures:

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

Repayable in more than five years 16,487 16,470

155,004 167,694

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 1,784 1,973

which expire in two to five years 33,321 20,571

35,105 22,544

Interest rate risk and hedge profile

2009 2008

£’000 £’000

Fixed rate borrowings 21,700 21,700

Floating rate borrowings

– Subject to interest rate swap 145,000 145,000

– (Excess hedge) / Not hedged (11,105) 1,706

155,595 168,406

Average fixed interest rate 9.69% 9.69%

Weighted average swapped interest rate 5.58% 5.59%

Weighted average cost of debt on overdrafts, bank loans 5.97% 6.10%
and debentures

Average period for which borrowing rate is fixed 9.5 years 10.5
years

Average period for which borrowing rate is swapped 17.9 years 18.9
years

The swapped interest rate have calls by the bank 4.9 years 5.9 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:

2009 2008
Fair Carrying Fair Carrying
value value Value value

£’000 £’000 £’000 £’000

Cash and cash equivalents 8,655 8,655 8,191 8,191

Financial assets – 702 702 2,330 2,330
investments held for
trading

Other assets 3,976 3,976 3,974 3,974

Derivative liabilities (6,347) (6,347) (19,616) (19,616)

Bank overdrafts (7,216) (7,216) (7,277) (7,277)

Bank loans (126,679) (126,301) (139,429) (138,947)

Present value of head (29,485) (29,485) (27,238) (27,238)
leases on properties

Other liabilities (12,168) (12,168) (11,268) (11,268)

Before debentures (168,562) (168,184) (190,333) (189,851)

Fair value of debenture stocks

Fair value of the Group’s Fair 2009 2008
debenture liabilities: Book value Fair value Fair Value
value adjustment adjustment

£’000 £’000 £’000 £’000

Debenture stocks 21,700 29,183 (7,483) (7,579)

Tax at 28 per cent (2008: 2,095 2,122
28 per cent)

Post tax fair value (5,388) (5,457)
adjustment

Post tax fair value (9.40)p (9.91)p
adjustment – basic 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 2009 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.

18. Deferred tax

2009 2008

£’000 £’000

Balance at 1 January 2,808 13,071

Transfer to profit and loss account 3,587 (10,263)

Balance at 31 December 6,395 2,808

The deferred tax balance comprises the
following:

Revaluation of investment properties 5,733 5,075

Accelerated capital allowances 2,116 1,852

Fair value of interest derivatives (1,777) (5,493)

Short-term timing differences 1,321 1,414

7,393 2,848

Loss relief (998) (40)

Provision at end of period 6,395 2,808

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.

19. Share capital

Number of Number of
ordinary ordinary
10p shares 10p shares
2009 2008 2009 2008

£’000 £’000

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

Allotted, issued and fully paid 82,316,972 82,316,972 8,232 8,232

Ordinary shares of 10p – issued 1,605,057 – 160 –
during the year

Less: held in Treasury (see below) (4,293,051) (5,873,865) (429) (588)

“Issued share capital” for 79,628,978 76,443,107 7,963 7,644
reporting purposes

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

The company issued a further 1,605,057 new ordinary shares of 10p each on 3
July 2009, from the amount standing to the credit of the Company’s share
premium account. The existing shareholders as at 5 June 2009 were entitled to
the new Capitalisation Issue ordinary shares as authorised at the Annual
General Meeting on 10 June 2009.

Treasury shares

Number of ordinary 10p shares Cost/issue value

Price. 2009 2008 2009 2008
excl.

Date costs £’000 £’000

Shares held in Treasury at 5,873,865 6,167,545 6,237 6,549
1 January

Issued to meet directors Feb-09 106.18p (1,214,400) – (1,290) –
bonuses

Issued to meet share Feb-09 106.18p (50,000) – (53) –
options exercised

Issued for new share Mar-09 106.18p (21,780) – (23) –
incentive plan

Issued to meet staff May-09 106.18p (96,261) – (102) –
bonuses

Issued to meet directors – (293,680) – (312)
and staff bonuses
(Nov 08 – 106.18p)

Issued for new share Dec-09 106.18p (198,373) – (211) –
incentive plan

Shares held in Treasury at 4,293,051 5,873,865 4,558 6,237
31 December

Share Option Schemes

Employees’ share option scheme (Approved scheme)

At 31 December 2009 the following options to subscribe for ordinary shares were
outstanding, issued under the terms of the Employees’ Share Option Scheme:

Number of shares Date of grant Normal Exercise Date
Option Price

14 October 2003
70,000 39.5p 14 October 2006 to 13
October 2013

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 2009 is as follows:

Changes during the year

At Options Options Options At
1 January Exercised granted lapsed 31
2009 December
2009

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 – – – 3,987,559
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 2009
there were no options to subscribe for ordinary shares outstanding.

Number of shares Date of Grant Exercised Date
Option Price

8 March 1999
50,000 25.66p 12 February 2009

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 2009 is as follows:

Changes during year

Changes during the year

At Options Options Options At
1 January Exercised granted lapsed 31
2009 December
2009

Shares issued to date 400,000 50,000 – – 450,000

Options granted which have not 50,000 (50,000) – – –
been exercised

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

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

20. Related party transactions

Cost Amounts Owed Cash
recharged to (to) by advanced to
(by) related related party (by) related
party party
£’000 £’000 £’000

Related party:

Analytical Ventures Limited

Current Account 29 1 –

Dragon Retail Properties
Limited

Current account 40 40 –

Loan account – (1,205) 225

Bisichi Mining PLC

Current account 348 (i) 143 –

Directors and key management

M A Heller and J A Heller 11 (ii) – –

H D Goldring (Delmore Asset (22) (iii) – –
Management Limited)

Totals at 31 December 2009 406 (1,021) 225

Totals at 31 December 2008 302 (1,306) 7

Nature of costs recharged – (i) Management fees (ii) Property management fees
(iii) Portfolio management fee.

The related party companies above are the associate and joint ventures and are
treated as non current asset investments – details are shown in Note 10 and 11.

Analytical Ventures Limited (joint venture)
Analytical Ventures Limited (Analytical Ventures) is owned 50 per cent by the
company and 50 per cent by the Bank of Scotland.

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 company provides office premises, property management, general management,
accounting and administration services for both joint ventures.

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 M A Heller and J A Heller have an
interest. Under an agreement with M A 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 £
275,000 for the year (2008: £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 £40,000 (2008: £40,000) for
work done for two charitable foundations,

the Michael & Morven Heller Charitable Foundation and the Simon Heller
Charitable Trust.

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.

M A Heller is a director of Bisichi Mining PLC, the associated company and
received a salary of £75,000 (2008: £75,000) for services.

The directors are considered to be the only key management personnel and their
remunerations including employers national insurance for the year was £
2,192,000 (2008: £1,656,000). All other disclosures required including interest
in share options in respect of those directors are included within the
remuneration report.

21. Employees

The average number of employees, including directors, of the Group during the
year involved in management and administration was 37 (2008: 43).

2009 2008

£’000 £’000

Staff costs during the year were as follows:

Salaries and other costs 2,575 2,133

Social security costs 325 280

Pension costs 461 416

3,361 2,829

22. Capital Commitments

2009 2008

£’000 £’000

Commitments to capital expenditure contracted for at 500 –
the year end

The Group’s share of capital commitments of joint ventures at the year end
amounted to £Nil (2008: £Nil).

23. Commitments under operating and finance leases

Operating leases on land and buildings

At 31 December 2009 the Group has total of future minimum commitments under
non-cancellable operating leases on land and buildings as follows:

2009 2008

£’000 £’000

Within one year 390 392

In the second to fifth years inclusive 1,495 1,566

After five years – 325

1,885 2,283

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

The leases are for an average term of 6 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

2009 2008 2009 2008
£’000 £’000 £’000 £’000

Accounts payable under
finance leases:

Within one year 1,874 1,874 1,874 1,874

In the second to fifth years 7,497 7,497 6,967 6,925
inclusive

After five years 234,145 236,019 20,644 18,439

243,516 245,390 29,485 27,238

Future finance charges on (214,031) (218,152) – –
finance leases

Present value of finance 29,485 27,238 29,485 27,238
lease liabilities

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:

2009 2008

£’000 £’000

Within one year 13,156 12,842

In the second to fifth years inclusive 48,079 46,793

After five years 67,808 65,613

129,043 125,248

24. Contingent Liabilities

There were no contingent liabilities at 31 December 2009 (2008: £Nil).

25. Company financial statements

Company balance sheet at 31 December 2009

Notes 2009 2008
£’000 £’000

Fixed assets

Tangible assets 25.3 87,333 98,101

Other investments:

Associated company 25.4 358 358

Subsidiaries and others 25.4 46,290 46,400

25.4 46,648 46,758

133,981 144,859

Current assets

Debtors 25.5 19,638 38,970

Investments 25.6 702 2,330

Bank balances 6,653 5,849

26,993 47,149

Creditors

Amounts falling due within one year 25.7 (25,171) (39,387)

Net current assets 1,822 7,762

Total assets less current liabilities 135,803 152,621

Creditors

Amounts falling due after more than 25.8 (81,063) (100,580)
one year

Net assets 54,740 52,041

Capital and reserves

Share capital 25.10 8,392 8,232

Share premium account 25.11 5,042 5,236

Capital redemption reserve 25.11 47 47

Revaluation reserve 25.11 13,779 10,549

Treasury shares 25.10 (4,558) (6,237)

Retained earnings 25.11 32,038 34,214

Shareholders’ funds 54,740 52,041

These financial statements were approved by the board of directors and
authorised for issue on 16 April 2010 and signed on its behalf by:

M A Heller R J Corry

DirectorDirector

Company Registration No. 341829

25.1. 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 25
(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 the 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 2008 prepared by the
Royal Institution of Chartered Surveyors.

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 cars – 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 Analytical
Ventures Limited and Dragon Retail Properties Limited (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 each reporting date, these
interest rate derivatives are recognised at their fair value to the business,
being the Net Present Values of the difference between the hedged rate of
interest and the rate of interest for the remaining period of the hedge.

Where a derivative is designated as a hedge of the variability of a highly
probable forecast transaction i.e. 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 i.e. when interest income or
expense is recognised.

The gain or loss arising from any adjustment to the fair value to the business
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 recoverable 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.

25.2. Profit/(loss) for the financial year

The company’s profit for the year was £1,613,000 (loss 2008: £11,212,000). 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.

25.3. Tangible assets

Investment Properties

Office
Long
Total Freehold leasehold Equipment
and motor
vehicles

£’000 £’000 £’000 £’000

Cost or valuation at 1 98,916 70,532 26,660 1,724
January 2009

Additions 725 592 – 133

Disposals (12,831) (12,750) – (81)

Increase/(decrease) on 1,484 4,304 (2,820) –
revaluation

Cost or valuation at 31 88,294 62,678 23,840 1,776
December 2009

Representing assets stated
at:

Valuation 86,518 62,678 23,840 –

Cost 1,776 – – 1,776

88,294 62,678 23,840 1,776

Depreciation at 1 January 815 – – 815
2009

Charge for the year 203 – – 203

Disposals (57) – – (57)

Depreciation at 31 December 961 – – 961
2009

Net book value at 1 January 98,101 70,532 26,660 909
2009

Net book value at 31 87,333 62,678 23,840 815
December 2009

The freehold and long leasehold properties were valued as at 31 December 2009
by external professional firms of chartered surveyors. The valuations were made
at open market value on the basis of existing use. The increase in book value
was transferred to revaluation reserve.

2009 2008

£’000 £’000

Allsop LLP 82,495 93,515

BNP Paribas Real Estate 4,023 3,677

86,518 97,192

The historical cost of investment properties, including total capitalised
interest of £1,222,000 (2008: £1,222,000) was as follows:

Freehold Long Leasehold

£’000 £’000

Cost at 1 January 2009 68,526 18,080

Additions 592 –

Disposals (14,496) –

Cost at 31 December 2009 54,622 18,080

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

25.4. Other investments

Shares in Loan stock Shares Loan
subsidiary in in stock
companies subsidiary joint in joint Shares in Unlisted
Total companies ventures ventures associate shares

£’000 £’000 £’000 £’000 £’000 £’000 £’000

At 1 January 2009 46,758 40,663 3,658 274 1,800 358 5

Impairment (110) – – (110) – – –

At 31 December 46,648 40,663 3,658 164 1,800 358 5
2009

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 Property investment 100 100
Holdings Limited

Analytical Properties Limited Property investment – 100

Analytical Properties (St Property investment – 100
Helens) Limited

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 10 and 11.

25.5. Debtors

2009 2008

£’000 £’000

Trade debtors 382 760

Amounts due from subsidiary companies 17,601 35,640

Amounts due from associate and joint ventures 196 148

Deferred tax asset (note 25.9) 267 1,350

Other debtors 25 92

Prepayments and accrued income 1,167 980

19,638 38,970

25.6. Investments

2009 2008

£’000 £’000

Market value of the listed investment 702 2,330
portfolio

Unrealised deficit of market value over cost (467) (490)

Listed investment portfolio at cost 1,169 2,820

All investments are listed on the London Stock Exchange.

25.7. Creditors: Amounts falling due within one year

2009 2008

£’000 £’000

Bank overdrafts (unsecured) 7,191 7,277

Amounts owed to subsidiary companies 9,729 22,817

Amounts owed to joint ventures 1,165 1,454

Corporation tax 741 1,824

Other taxation and social security costs 576 282

Other creditors 360 756

Accruals and deferred income 5,409 4,977

25,171 39,387

25.8. Creditors: Amounts falling due after more than one year

2009 2008

£’000 £’000

Interest rate derivatives 3,082 9,926

Term Debenture stocks:

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

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

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

£10 million First Mortgage Debenture Stock 2022 at 8.109 9,787 9,770
per cent*

21,487 21,470

Term bank loans:

Repayable after more than two years* 56,494 69,184

81,063 100,580

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

Details of terms and security of overdrafts, loans and debentures are set out
in note 16.

Repayment of borrowings:

Bank loans and overdrafts:

Repayable within one year 7,191 7,277

Repayable between two and three years 56,494 69,184

63,685 76,461

Debentures:

Repayable between three and five years 5,000 5,000

Repayable in more than five years 16,487 16,470

85,172 97,931

Hedge profile

There is a hedge to cover part of the £90 million revolving credit facility,
which currently covers the full £56 million drawn.
It consists of a 20 year swap for £35 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.

At the year end the amount recognised was £2,219,000 deficit (2008: £7,147,000
deficit) being the estimated financial effect of the fair value to the business
of these hedging instruments less the deferred tax thereon.

The Directors have estimated the financial effect of the fair value to the
business of these hedging instruments. This has been calculated as the Net
Present Value of the difference between the 18 year interest rate, which was
4.38 per cent at 31 December 2009 against the rate payable under the specific
hedge. This has given a liability at 31 December 2009 of £3,082,000 (2008: £
9,926,000) as shown in the balance sheet. The banks own initial quotations at
31 December 2009 to close each of the hedges were £9,565,000 (2008: £
14,182,000).

The hedges arenot deemed to be eligible for hedge accounting, as the banks have
an option to cancel the hedge in January 2015, even though this is after the
expiry of the term loans and the level of the hedges closely equate to the
amount of the loans outstanding. Any movement in the value of the hedges has
therefore to be charged directly to the Income Statement.

Fair value of financial instruments

Fair value estimation

Effective 1 January 2009, the Group adopted amendment to FRS29 for financial
instruments that are measured in the balance sheet at fair value, this requires
disclosure of fair value measurements by level of the following fair value
hierarchy:

* 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).

2009

Level 1 Level 2 Level 3 Total Gain/(loss)
£’000 £’000 £’000 £’000 to income
statement
£’000

Financial assets

Other financial assets held
for trading

Quoted equities 702 – – 702 178

Financial liabilities

Derivative financial
instruments

Interest rate swaps – – 3,082 3,082 6,844

2008

Level 1 Level 2 Level 3 Total Gain/(loss)
£’000 £’000 £’000 £’000 to income
statement
£’000

Financial assets

Other financial assets held
for trading

Quoted equities 2,330 – – 2,330 (1,530)

Financial liabilities

Derivative financial
instruments

Interest rate swaps – – 9,926 9,926 (10,882)

25.8. Creditors: Amounts falling due after more than one year continued

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 2009
1 year 5 years Total

£’000 £’000 £’000 £’000

Bank overdrafts (floating) 7,191 – – 7,191

Debentures (fixed) – 5,000 16,700 21,700

Bank loans (floating)* – 56,679 – 56,679

Trade and other payables 17,980 – – 17,980
(non-interest)

25,171 61,679 16,700 103,550

Less than 1 2-5 years Over 5 2008
year years
Total

£’000 £’000 £’000 £’000

Bank overdrafts (floating) 7,277 – – 7,277

Debentures (fixed) – 5,000 16,700 21,700

Bank loans (floating)* – 69,429 – 69,429

Trade and other payables 32,110 – – 32,110
(non-interest)

39,387 74,429 16,700 130,516

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 2009 2008
value Carrying Fair Carrying
value value value

£’000 £’000 £’000 £’000

Cash and cash equivalents 6,653 6,653 5,849 5,849

Investments 702 702 2,330 2,330

Other assets 19,638 19,638 38,970 38,970

Bank overdrafts (7,191) (7,191) (7,277) (7,277)

Bank loans (56,679) (56,494) (69,429) (69,184)

Derivative liabilities (3,082) (3,082) (9,926) (9,926)

Other liabilities (17,980) (17,980) (32,110) (32,110)

Before debentures (57,939) (57,754) (71,593) (71,348)

Additional details of borrowings and financial instruments are set out in notes
16 and 17.

25.9. Provisions for liabilities and charges

2009 2008

£’000 £’000

Deferred Taxation

Balance at 1 January (1,350) 1,337

Transfer to profit and loss account 1,083 (2,687)

Balance at 31 December (267) (1,350)

No provision has been made for the approximate taxation liability at 28 per
cent (2008: 28 per cent) of £992,000 (2008: £649,000) which would arise if the
investment properties were sold at the stated valuation.

The deferred tax balance comprises the following:

Accelerated capital allowances 1,189 1,184

Fair value of interest derivatives (863) (2,779)

Short-term timing differences 233 285

Losses (826) (40)

Provision at end of period (267) (1,350)

25.10. Share capital

Details of share capital, treasury shares and share options are set out in note
19.

25.11. Reserves

Share Capital Revaluation Total
Premium redemption reserve Retained
Account reserve Earnings

£’000 £’000 £’000 £’000 £’000

Balance at 1 January 2009 5,236 47 10,549 34,214 50,046

Increase on valuation of – – 1,484 – 1,484
investment properties

Retained profit for year – – – 1,613 1,613

Dividends paid in year – – – (885) (885)

Loss on disposal of – – – (1,158) (1,158)
Treasury Shares

Capitalisation issue of (194) – – – (194)
new ordinary shares and
expenses

Transfer of realised – – 1,746 (1,746) –
revaluation loss

Balance at 31 December 5,042 47 13,779 32,038 50,906
2009

25.12. Related party transactions

Details of related party transactions are given in note 20.

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.

25.13. Capital commitments

2009 2008

£’000 £’000

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

25.14. Commitments under operating leases

At 31 December 2009 the company had annual commitments under non-cancellable
operating leases on land and buildings as follows:

2009 2008

£’000 £’000

Expiring in more than five years 390 392

In addition, the company has an annual commitment to pay ground rents on its
leasehold investment properties which amount to £323,000 (2008: £326,000), the
leases on which expire in more than fifty years.

25.15. Contingent liabilities

There were no contingent liabilities at 31 December 2009 (2008: £Nil).

Five year financial summary

2009 2008 2007 2006 2005

£m £m £m £m £m

Portfolio size

Investment properties-Group^ 214 219 248 193 117

Investment properties-joint 13 13 3 91 140
ventures

Investment 12 12 15 17 15
properties-associate

239 244 266 301 272

Portfolio activity £m £m £m £m £m

Acquisitions – 9.18 112.71 50.70 2.72

Disposals at book value (17.79) (15.33) (41.37) (1.62) (6.70)

Capital Expenditure 3.46 9.73 9.15 5.13 3.34

(14.33) 3.58 80.49 54.21 (0.64)

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

Rental income – Group and 17.07 16.77 14.26 11.84 12.39
share of joint ventures

Less: attributable to joint (0.52) (0.27) (1.23) (3.95) (4.52)
venture partners

Group rental income 16.55 16.50 13.03 7.89 7.87

Profit/(loss) before interest 20.49 (24.91) (16.59) 21.76 21.48
and tax

Profit/(loss) before tax 21.41 (57.27) (23.89) 18.32 17.89

Taxation 2.36 (9.81) (11.38) 3.11 3.04

Profit/(loss) attributable to 19.05 (47.45) (12.50) 15.22 14.85
shareholders

Earnings/(loss) per share – 24.32p (62.30p) (16.40p) 20.00p 18.83p
basic

Earnings/(loss) per share – 24.32p (62.30p) (16.40p) 19.97p 18.79p
fully diluted

Dividend per share 1.95p* 1.95p* 1.95p 1.85p 1.725p

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

Shareholders’ funds 59.10 40.30 88.99 101.86 88.34

Net borrowings 145.65 157.17 147.54 86.12 44.14

Net gearing 246.44% 390.01% 165.79% 84.55% 49.97%

Net assets per share – basic 74.22p 52.73p 116.86p 133.62p 116.04p

– fully diluted 74.19p 52.70p 116.73p 133.47p 115.88p

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

Net cash inflow from 12.18 12.02 3.97 3.44 3.88
operating activities

Capital investment and 13.94 (6.09) 9.84 (26.86) 0.69
financial investment

Notes: ^Excluding the present value of head leases

*Equivalent dividend includes new issue shares equal to 0.8p

END