Results

28 March 2013

Lonrho Plc ("Lonrho")

Lonrho Plc reports strong revenue growth for 2012 and 32% growth in revenues for final quarter.

Lonrho Plc announces its results for the final quarter and 12 month period ended 31 December 2012.

Lonrho's primary focus is on the expanding agriculture and oil and gas markets across Africa.

2012 was a very significant year for Lonrho and the fourth quarter saw completion of the transition of Lonrho into a Company that strategically has aligned its core business units with what it believes are the most important growth opportunities occurring in Africa.

As announced in the trading statement issued in February 2013, Quarter 4 2012 was challenging in several areas of the business where longer than expected lead times on delivering new product lines and stock availability pushed a number of 2012 expectations into 2013 and the Group withdrew from unprofitable lines of business.

Notwithstanding those challenges, during 2012 the Group showed strong progress on its underlying revenue performance, leaving the core businesses well positioned for 2013.

Financial Highlights up to 31 December 2012: 

·; Revenue from core operating divisions1 in the fourth quarter was £46.0m compared with £34.8m for the 3 months to 31 December 2011. On an adjusted like-for-like basis at constant currency2 revenue has increased across all divisions, with an overall increase of 28.0%.

·; For the full year to 31 December 2012, reported revenue was up 21.8% compared to the 15 months to 31 December 2011, from £152.9m to £186.3m, a like-for-like increase at constant currency of 23.6%.

·; The Group's total reported gross margin increased from 26.9% to 28.9% (comparing the 12 month period with the prior 15 months).

·; Net operating loss3 for the year from core operating divisions was £3.4m which falls within the range of £3m - £5m as highlighted in the trading statement released on 1 February 2013.

·; Due to the market conditions faced by Fastjet Plc, the Executive Directors carried out a review of Lonrho's investment in Fastjet which resulted in an impairment charge of £7.7m recorded to the income statement. As a result Lonrho reported a Loss before Tax of £6.3m compared with a Profit before Tax of £0.8m in the 15 months ended 31 December 2011.

·; The Group's Net Indebtedness reduced marginally to £87.2m at the end December 2012 from £88.4m at the end of the 3rd quarter and from £99.1m as at 31 December 2011.

1 Core operating divisions include Agribusiness, Infrastructure, Hotels and Support Services.2 Adjusted like-for-like figures include acquisitions (pre-acquisition comparables based on un-audited management accounts), exclude start-up businesses trading for less than 12 months and are adjusted to constant currency.3 Net operating profit/(loss) is defined as profit before tax for the period (from core operating divisions) excluding, gain/(loss) on associates, jointly controlled entities, investments, amortisation and share based payments.

Operational Highlights in the Fourth Quarter:

Agribusiness Division 

·; Lonrho's 177, 000 tree stone fruit plantation continues to mature and during the last quarter the first commercial peach harvest from the plantation was exported to Europe. The plantation benefits from a seasonal advantage of coming ripe before the South African crop, and hence attracts strong pricing. The crop produced sufficient quality (even though the plantation is still young) that peaches and nectarines were delivered to Tesco in November and December for marketing up to Christmas 2012. The results of this first crop of produce from this plantation, now one of the largest stone fruit orchards in the southern hemisphere, has already generated strong demand for the 2013 crop. The 2013 crop is expected to be three times the size of the 2012 crop as the plantation matures. The plantation will reach full maturity in 2014 and is forecast to yield four million kilograms of fruit per year thereafter.

·; The exclusive Lonrho John Deere distributorships in Angola, South Sudan and Tanzania delivered strong results for the John Deere business and sold close to 150 tractors, implements and equipment in the final quarter. LonAgro Angola delivered impressive year on year growth and revenues were up 383% compared to October to December 2011. The logistical issues encountered by Trak Auto in Mozambique have largely been resolved and the business has begun the year strongly. Entering 2013 Lonrho now has four exclusive John Deere territories and positions the business as one of the leading suppliers of John Deere equipment in Africa.

·; Fish On Line, the fish division's wholesale company, delivered its first own branded goods to Food Lovers Market (a new, fast growing, quality retail chain) in South Africa in the last quarter. This new business relationship provides a quality fish range throughout the 100 stores currently trading across the South Africa.

·; The fourth quarter saw the conclusion of the vertical integration and reorganisation of the agriculture division to be able to deliver a seamless 'field to fork' solution for our clients. The costs of this restructuring exercise were £1.3m. The unification of Rollex Pty and Lonrho Logistics has been completed to improve efficiencies and customer service levels across these businesses. Lonrho Logistics now incorporates all the freight forwarding activities of the Group, including the rapidly growing sea freight business, whilst Rollex Pty is now solely focused on its high value Agri-Processing business based at Johannesburg International airport and building long term, sustainable, supply contracts for major global supermarkets. The reaction from customers to a single source, traceable, verifiable and continuity-focused supply solution has been immensely positive, and the number of supermarkets entrusting Lonrho with their African requirements is increasing rapidly. Having now completed this one stop solution, we are continuing to see strong traction with supermarkets around the world now placing long term, sustainable, growing programmes with the Company to meet their needs. This is the culmination of the 'demand driven' business model that Lonrho has focused on delivering over the past three years.

·; Lonrho's Oceanfresh has continued to build on its core business. To the African consumer the 'Cape Point' own brand for Shoprite Chequers; the "M" brand to Makro / Massmart and the Spar own brand have all seen strong traction during the year. On the international markets, the Company has seen the deployment of 'Kirkland Signature Hake' to Costco roll-out to all of the US market although supply issues noted in the February trading statement caused a reduction in planned promotional activity to coincide with Lent. Hake is a sustainably sourced, quality white fish that is growing in popularity with the US consumer as they discover its texture and taste. Two further Costco Kirkland Signature lines have been agreed, one being Mahi Mahi, which started deliveries to Costco US stores before the year end and the third is due to be launched in the second half of 2013. Other US success in the year has been the start of deliveries of hake into Walmart Sam's Club stores and United Airlines choosing Lonrho's hake for its first and business class in-flight catering.

·; During the year Lonrho was awarded a five year exclusive tuna fishing quota for the 200 mile exclusive fishing zone for the territorial waters off Mozambique. This is a significant opportunity and will come into service in mid-2013.

Infrastructure Division 

·; Lonrho's oil services logistics port, Luba Freeport, continued to perform well and has a seen a healthy increase in vessel movements in the fourth quarter when compared to the prior year. The port saw a total of 277 vessel calls from October to December 2012 compared to 261 in 2011, a 6% increase. The release of eight further exploration blocks and recent positive drilling results are expected to generate significantly increased activity throughout 2013. The larger customers at the port include ExxonMobil, Schlumberger, Baker Hughes, Noble, Tenaris and MI Swaco.

·; E-Kwikbuild continues to face challenges delivering its existing Government projects on a number of levels (which will carry on into Q2 of 2013), whilst the new focus on winning private sector business is building momentum.

Hotels Division 

·; After opening in July, Lonrho's new 'Lansmore' Masa Square in Gaborone has quickly established itself as one of the leading hotels in Botswana.

·; The Cardoso Hotel in Maputo, Lonrho's longest and well established hotel, continues to perform well as the cornerstone of the Hotel division, with occupancy for the year trending over 90%.

·; The first easyHotel by Lonrho in Johannesburg opened successfully in March having been delayed from its planned opening date in December 2012. Initial demand has exceeded expectations.

·; The opening of the Lansmore in Libreville, Gabon is now expected to be in Q2 of 2013.

Support Services

·; The Support Services division expanded its scope of services with the new business start-up Arlington Associates which has successfully won and implemented an initial contract with the Government of Nigeria for the inspection of crude oil and gas exported from Nigeria.

·; The AFEX group service contract with Tullow Oil continued to do well after the opening of a new 250- man camp in northern Kenya in the third quarter and, with expected increased drilling by Tullow, revenues received from AFEX's support contract should nearly double in 2013.

Outlook

2012 was a very significant year for Lonrho and saw the conclusion of the transition of Lonrho into a Company that has successfully completed building the foundations of its core business units. Africa is forecast to deliver strong growth in 2013, and Lonrho has strategically aligned its operations with what it believes are the most important growth opportunities occurring in Africa, supporting the increasing demand from the expanding agriculture, oil and gas and consumer markets.

Despite challenging global market conditions, Lonrho's outlook for 2013 remains in line with the Board's expectations and the Group expects to continue to deliver improved performance across each of its operating divisions.

The Board believes that the strategic action taken in Q3 and Q4 2012, to focus on increasing margins through operational efficiencies and build long term sustainable customer relationships, coupled with the decision to withdraw from less profitable lines of business, positions Lonrho strongly for entering 2013.

ENDS

Statutory accounts

The financial information set out in this announcement does not constitute the Company's statutory accounts for the 12 month period ended 31 December 2012 or the 15 month period ended 31 December 2011. The financial information for the 15 month period ended 31 December 2011 is derived from the statutory accounts for that period. The audit of statutory accounts for the 12 month period ended 31 December 2012 is complete. The auditors reported on those accounts, their report was unqualified and did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report.

Lonrho's full annual report and financial statements will be published on its website (www.lonrho.com) today and are being posted to shareholders.

Chairman's Statement

Ambassador Frances Cook

Non-Executive Chairman

27 March 2013

It is a special honour for me to be addressing shareholders in my first months as your new Chairman.

I have, during my long career with the US Government State Department, lived in Africa for a dozen years and have a strong affinity with the Continent and its people. I have now served 5 years as a Non-Executive Director on the Board of Lonrho and after visiting many of our operations in Africa, I can report, with conviction, that we are very well positioned to participate in, and to help, Africa's emergence as a significant international economic motor.

Already, seven of the world's ten fastest growing economies are in Africa, assisted by the discovery of the impressive quantities of new onshore and offshore hydrocarbons in West and in East Africa.

At Lonrho we are well positioned to support Africa's export sector growth in hydrocarbons and in agriculture. Africa is undergoing the longest single period of economic expansion on the Continent since the independence years a half century ago. Significantly, Africa's macro level growth is widespread, far beyond the oil economies. Expected growth will rise from around 4.5% last year to 4.8% in 2013. Foreign direct investment has been slower into Africa than it should have been, given this kind of impressive record (though it is expected to rise, in the non-oil sectors, from around US$33 billion currently, to around US$84 billion in 2014.) Our CEO, Geoffrey White reports an increasingly new and interested audience, wanting to understand Africa's potential and what our historic Company is doing to take advantage of the Continent's current immense opportunities.

Shareholders know that Lonrho is already invested in core sectors, from Agribusiness to Infrastructure, to Support Services and Hotels, sectors that are necessary to support the rapid growth that is already happening.

Our key division, Agribusiness, which accounts for over 65% of Lonrho revenue from core operating divisions, has been going through a management transition, and restructuring, so it can better compete in the fast moving, global, and demanding agriculture and logistics space. We hired a well-qualified CEO to specifically oversee this division of Lonrho operations, located across Southern Africa, and ranging from fruit and vegetables, to fish and crustacea, and farm machinery. He will be focusing on margin improvement, moving away from a short term trading focus, while continuing to garner contracts with the world's largest food importers (Costco, Walmart and the majority of the UK branded stores are already customers). We have just opened a sales office in China as well. Whilst we had a few disappointments in this sector during this transitional year, it was not due to the revamped business model, but rather to the late delivery of tractors to our John Deere sales operation in Mozambique, and to lower than expected fish size off Namibia. Even with these late year slippages, our Agribusiness division proudly posted a 12 month revenue growth figure of 24.7%. In short, this is a growth platform, and record, we can be proud of.

Our Infrastructure and Support Services core operating divisions continue to grow at a healthy rate, expanding business across a broad range of activities which, among other things, will support the rapid expansion of energy production in Africa. Our IT operations have added another country (Namibia), and our facilities operations, both e-KwikBuild and base support operations (for oil exploration companies, for example) are also expanding into servicing the energy sector. Our oil and gas port operation in Luba, Equatorial Guinea, which I visited in February 2013, will be a model for our engagement with this sector (with a major new Lonrho managed oil and gas logistics port expected to be announced in 2013 in Ghana). These are exciting times in the oil and gas industry in Africa, and Lonrho is becoming a highly regarded leader in logistics for this sector.

Hotels are legacy projects for Lonrho, but we are moving into a more modern form of participation in that sector, creating our own brand for higher end facilities, and opening a series of "easyHotels by Lonrho" for budget business travellers all over the Continent. We opened a Lonrho "Lansmore" in Botswana this year, adding to an historic hotel property in Mozambique, as well as large renovation and management efforts in the DRC of major government owned hotels. In 2013, we expect to expand the "easyHotel by Lonrho" brand all over South Africa, and to launch into North, East and West Africa.

FastJet is in the midst of converting Lonrho's much appreciated Fly540 brand of smaller regional planes, flying local routes, into a continental budget airline, flying larger planes, following the separation of Lonrho's aviation division in June 2012. FastJet Plc, in which Lonrho is the largest shareholder, will still service the under-served "connector" market, as well as extending flights to regional destinations, with reliable, safe and inexpensive flights, using very modern pricing algorithms. From the start of the new operating model in Tanzania four months ago, we expect FastJet to expand its no-frills, reliable service in 2013.

Throughout its 100 year old legacy, Lonrho has been known for its Corporate Responsibility ("CR") across Africa. In 2012, each of our companies named a CR coordinator, so that we can better focus in our chosen areas, education and good environmental citizenship. You will see photographs throughout this report of our CR activities, which should be a source of pride to all Lonrho shareholders. We have instituted, companywide, an annual CR prize, trained our Directors in CR, and joined the UN Global Compact which monitors CR globally. We are committed to leaving a positive "footprint" wherever we work, and to being a good corporate citizen in the 18 countries where we are engaged.

Chief Executive Officer's Statement

Geoffrey White

Director and Chief Executive Officer

27 March 2013

2012 was a very significant year for Lonrho and saw the conclusion, by the end of the year, of the transition of Lonrho into a Company that has successfully completed the establishment of its core business units and is now in a strong position to build on the opportunities in Africa. This transition took longer to complete than expected, and there were some delays in our 2012 plans that caused potential 2012 business to move to 2013. [The majority of these delays have now played out and] the Group is well positioned in 2013 to deliver positive results for shareholders

Lonrho remains solely focused on Africa and being aligned with economic development across the Continent.

In 2013 African growth is being stimulated by the burgeoning oil and gas industry, agricultural opportunities and a consumer market that is young, communicative and developing as a very significant segment of society. The formal sector of the African consumer market is forecast to be US$1.3 trillion by 2020, and the informal sector is forecast to be similar in size.

Africa is becoming one of the world's largest consumer markets.

There is a now an increasing commercial momentum to address this growing consumer market that can be seen across much of Africa, where the development of infrastructure, shopping centres, and consumer focused projects is expanding rapidly, albeit from a very low base.

Surprising to many, seven of the top ten fastest growing economies in the world are now in Africa.

The consumer market, of over one billion people, a large percentage of which are under the age of 25, creates a significant commercial opportunity, and Lonrho's businesses entering 2013 are strategically aligned with the requirements and services needed to meet some of the central demands of African consumer growth.

The growing demand of the consumer market within Africa provides significant opportunities for Lonrho's core businesses.

Our core businesses focus on the oil and gas industry and the agriculture sector. These are not only helping to fuel African consumer growth by creating investment and prosperity, but are also fundamentally changing the standing and importance of Africa to the world. For the first time, the wider world is relying on Africa for energy and for food production.

25% of the world's oil and gas is now believed to be in Africa and 60% of the world's potentially arable land is in Africa. These are important statistics that make the Africa of today of growing global significance. The tide is beginning to turn, rather than Africa being dependent on the world, the world is increasingly becoming dependent on Africa for energy and for food production.

Lonrho has, over the past four years, strategically positioned its core businesses to be well placed to service the requirements of this new dynamic market. Having invested heavily in building the international standard infrastructure to meet this trend, global food retailers are now approaching Lonrho to source fresh and frozen produce from Africa, and the global oil and gas industry is encouraging and supporting our development of the essential infrastructure and logistics necessary to commercially develop Africa's oil and gas resources.

In September 2012, David Lenigas, who was the Executive Chairman of Lonrho since 2006, stepped down from the position to become the Executive Chairman of FastJet plc. The Board thank him for his guidance, time and effort as the Executive Chairman of Lonrho over the past seven years.

Following a review, the Company's senior independent director, Ambassador Frances Cook, was appointed as the Non-Executive Chairman of the Company on the departure of Mr Lenigas. Ambassador Cook brings a unique network of contacts and experience in Africa and the Company looks forward to further benefitting from her guidance and knowledge of the Continent.

Human resources are key to successful operations in Africa. During 2012 the Group continued to recruit industry specialists to further bolster and develop each of the divisional operations. The most senior during 2012 being the appointment of Ben Ward as the CEO of the Agribusiness division. Ben brings with him a long and experienced understanding of the sector.

Entering 2013 Lonrho is structured into four divisions:

Agribusiness (66% of core operating revenues)

Sourcing, production, cold chain logistics, processing and packaging of fruit, vegetables and seafood for Arican and international supermarkets.

At the end of 2012, Lonrho completed the development of a unique, vertically integrated, international standard, cold chain logistics and processing infrastructure. This incorporates the capacity required to source; produce, process, package and deliver fresh and frozen produce from across the countries of southern Africa to market. This division supplies leading retailers in Africa such as Shoprite, Chequers, Makro, Food Lovers and Spar who are all geographically expanding their operations to serve the growth in the African consumer market.

The division also increasingly supplies produce into international supermarket chains such as Costco, Walmart, Asda, Tesco, Spinneys, Waitrose, Carrefour and others.

The world is becoming more and more dependent on Africa for food security. Lonrho provides the international standard delivery infrastructure required for the export of fresh produce from Africa to the global marketplace meeting demand from Europe, the USA, Middle East and, increasingly, China and the Far East.

Lonrho is helping to fulfil the rapidly increasing demand from global supermarkets as they look to Africa as an essential source of fresh produce.

Within the division, Lonrho has also established niche market, demand driven, growing programmes aligned with specific customer requirements.

 The division also distributes John Deere agricultural equipment into Africa.

Infrastructure (13% of core operating revenues)

Providing the logistical infrastructure necessary for the expanding oil and gas industry in Africa

Lonrho Ports division has developed an exclusive oil and gas logistics terminal, Luba Freeport, that is a 'one stop shop' that supports the growing logistics requirements of the offshore industry in Equatorial Guinea. Equatorial Guinea is Africa's third largest oil producer. Following completion of the second phase expansion of the Luba Freeport project, entering 2013, the oil services terminal has grown and is now forecast to handle 85%+ of all the support logistics for the Equatorial Guinea offshore fields.

Long term tenants at Luba Freeport include ExxonMobil, Schlumberger, Noble, Mi Swacco, Ophir, CNOOC, Baker Hughes, Tenaris, Hess, Marathon and others.

Lonrho is seeking to replicate the success of the Luba Freeport project into other locations in both West and East Africa supporting the increasing infrastructure requirements for oil and gas finds on both sides of the Continent, the most advanced being a proposed oil and gas logistics terminal in Ghana.

Hotels (6% of core operating revenues)

The provision of safe, quality accommodation is an essential precursor for economic growth and development in an emerging market.

During 2012 Lonrho Hotels division continued with the plan to roll-out its hotel management company and create a Lonrho branded, corporate focused, hotel chain in Africa. Lonrho Hotels has won management contracts and leases to operate some of the leading hotels in Africa. Managing hotels in five countries, the Lonrho Hotels brand is becoming the choice of travellers to Africa. During 2012 the division successfully added the Grand Hotel Kinshasa, DRC, and The Lansmore Hotel in Gaborone, Botswana to the portfolio.

In early 2013 Lonrho Hotels launched the first 'easyHotel by Lonrho' to meet the growing market demand for budget hotels. The objective being to establish a chain of budget hotel properties managed on behalf of owners, branded 'easyHotel by Lonrho' that provide safe budget accommodation to a consistent standard with reliable quality across the whole of Africa.

Support Services (15% of core operating revenues)

Providing a single point service solution for resource companies, large corporates, NGO's and Governments.

Lonrho's Support Services division provides a fully cohesive support service to major clients across the Continent, delivering a one stop shop for logistics, accommodation, catering, IT and services. Customers are typically oil companies, mining companies, NGO's, the UN, and international Governments who see the benefit in a one stop shop provider offering a total solution for their requirements as they deploy into Africa.

FastJet

In June 2012, Lonrho announced that it had agreed to separate its aviation division, Lonrho Aviation, into Rubicon Diversified Investments Plc, an AIM listed investment company that was subsequently renamed FastJet Plc. (LON : FJET) As a consequence of the separation, Lonrho became the largest shareholder of FastJet with a 74% holding.The founder and largest shareholder in easyJet, Sir Stelios Haji-Ioannou's investment company easyGroup, became a shareholder in FastJet and provides strategic management of the company.

FastJet, in which Lonrho maintains a passive, arms-length, shareholding has subsequently launched as a low cost carrier domestically in Tanzania and believes that with Sir Stelios' direction and experience FastJet has the potential to develop into Africa's leading low cost carrier.

Lonrho's stake in FastJet has been reduced from 74% to 55% post-separation as Fastjet raises development capital to implement its business plan.

Due to current market conditions experienced by FastJet Plc, an impairment review has been carried out which resulted in an impairment charge being recorded in the income statement of £7.7m.

Outlook

2012 was a very significant year for Lonrho and saw the conclusion of the transition of Lonrho into a Company that has successfully completed building the foundations of its core business units. Africa is forecast to deliver strong growth in 2013, and Lonrho has strategically aligned its operations with what it believes are the most important growth opportunities occurring in Africa, supporting the increasing demand from the expanding agriculture, oil and gas and consumer markets.

Despite challenging global market conditions, Lonrho's outlook for 2013 remains in line with the Board's expectations and the Group expects to continue to deliver improved performance across each of its operating divisions.

The Board believes that the strategic action taken in Q3 and Q4 2012, to focus on increasing margins through operational efficiencies and build long term sustainable customer relationships, coupled with the decision to withdraw from less profitable lines of business, positions Lonrho strongly for entering 2013.

Statement of Directors Responsibilities

Statement of Directors' responsibilities in respect of the annual report and the financial statements

The Directors are responsible for preparing the annual report and the Group and parent company financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and parent company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU and applicable law and have elected to prepare the parent company financial statements on the same basis.

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 parent company and of their profit or loss for that period. In preparing each of the Group and parent company financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and estimates that are reasonable and prudent;

• state whether they have been prepared in accordance with IFRSs as adopted by the EU; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and parent company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent company's transactions and disclose with reasonable accuracy at any time the financial position of the parent company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Report of the Directors, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Directors who held office at the date of approval of this Report of the Directors confirm that, so far as they are each aware, there is no relevant audit information of which the Company's Auditors are unaware; and each Director has taken all the steps that he/she ought to have taken as a Director to make himself/herself aware of any relevant audit information and to establish that the Company's Auditors are aware of that information.

Responsibility statement of the Directors in respect of the annual report

We confirm to the best of our knowledge:

• 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 or loss of the Company and the undertakings included in the consolidation taken as a whole; and

• the information that is cross-referred from the Business Review section of the Report of the Directors includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

The Directors of Lonrho Plc are pleased to submit their report, together with the audited financial statements for the 12 month period ended 31 December 2012.

The Company number is 2805337.

Consolidated income statement

For the year ended 31 December 2012 and 15 months ended 31 December 2011

The notes are an integral part of these financial statements.

* The directors have defined Net Operating (Loss)/Profit, a non-GAAP measure, as its key profit performance measure as explained in Note 3

Consolidated and Company statements of

comprehensive income

For the year ended 31 December 2012 and 15 months ended 31 December 2011

The notes are an integral part of these financial statements.

Consolidated and Company statements of

changes in equity

For the year ended 31 December 2012 and 15 months ended 31 December 2011

The notes are an integral part of these financial statements.

The Company had total equity brought forward of £125.6m (2011: £123.0m), and during the period issued shares of £23.1m (2011: £18.9m) with share based payment charges of £2.3m (2011: £nil), shares issued in relation to earn out agreement of £0.4m (2011: £nil), share options issued of £nil (2011: £0.7m), provision for warrants of £1.0m (2011: £nil), share options exercised of £1.1m (2011: £0.7m), costs associated with share issued of £nil (2011: £0.4m) and a loss for the period of £21.6m (2011: £17.3m) resulting in total equity carried forward of £131.9m (2011: £125.6m).

(1) The elimination of non-controlling interest relates to removal of the interest of minority shareholders during the period.

Consolidated and Company statements of

financial position

As at 31 December 2012 and 31 December 2011

The notes are an integral part of these financial statements.

These financial statements were approved by the Board of Directors and authorised for issue on 27 March 2013. They were signed on its behalf by:

Geoffrey White

Director & Chief Executive Officer

Consolidated and Company statements of cash flows

For the year ended 31 December 2012 and 15 months ended 31 December 2011

The notes are an integral part of these financial statements.

Notes to the Financial Statements

1.. Reporting entity

Lonrho Plc (the "Company") is a company incorporated and domiciled in the United Kingdom. The consolidated financial statements of the Company for the 12 month period ended 31 December 2012 comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in associates and jointly controlled entities.

The financial statements were authorised for issue by the Directors on 27 March 2013.

The Company changed its financial year end from 30 September to 31 December annually with effect from the financial period ended 31 December 2011. Accordingly the comparative period information is for the 15 month period to 31 December 2011.

2. Basis of preparation

Statement of compliance

Both the parent Company and the consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (Adopted IFRS). On publishing the parent Company financial statements here together with the Group financial statements, the Company is taking advantage of the exemption in section 408(4) of the Companies Act 2006 not to present its individual income statement and related notes that form a part of these approved financial statements. The loss of the Company is disclosed in note 24 to the accounts.

Going concern

Although the current on-going economic conditions create uncertainty, the Group's forecast and projections, taking into account possible changes in trading performance, together with mitigating actions that are within managements control show that the Group is expected to be able to operate within the level of its debt facilities.

The Directors are carefully monitoring cash resources across the Group and have instigated a number of initiatives to ensure funding will be available for planned projects.

Following the careful review of on-going performance, and after making due enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the accounts

Functional and presentation currency

The financial statements are presented in pounds sterling which is the Company's functional currency. All financial information presented has been rounded to the nearest £0.1m.

Basis of measurement

The financial statements have been prepared on the historical cost basis except for the revaluation of certain long leasehold properties, related derivative financial instruments at fair value and certain jointly controlled entities and biological assets at fair value.

The accounting policies set out in these financial statements have been applied to all periods presented. A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2013 and have not been applied in preparing the Group accounts. None of these are expected to have a significant effect on the financial statements of the group, except for IFRS 9 Financial Instruments. The Group does not plan to adopt this standard early and the extent of the impact has not been

determined.

Use of estimates and judgments

The preparation of financial statements in conformity with Adopted IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Estimates made by management in the application of Adopted IFRS that have significant effect on the financial statements with a significant risk of material adjustment in the next year are discussed in the following notes:

·; valuation of associates (note 18)

·; valuation of biological assets (note 16)

·; share of results of jointly controlled entity (note 19)

·; impairment of interest in jointly controlled entity (note 19)

Judgements made by management in the application of Adopted IFRS that have significant effect on the financial statements are:

·; the determination of the functional currencies of subsidiaries (note 3c)

·; the determination of the accounting treatment in respect of the acquisition of investments as either associates, joint ventures or subsidiaries (note 3(a))

·; the determination whether certain transactions represent business combinations (note 7)

·; the determination of investments as jointly controlled entity based on relative shareholder interest (note 11)

·; the conclusion as to whether certain businesses should be presented as part of continuing or discontinuing operations (note 8)

The timing of revenue recognition is not subject to significant uncertainty.

3. Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. The accounting policies have been applied consistently by Group entities.

(a) Basis of consolidation

Subsidiaries

The consolidated financial statements incorporate the financial statements of Lonrho Plc and entities controlled by Lonrho Plc (its subsidiaries). Control is achieved where Lonrho Plc (the Company) has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.

The portion of a non-controlling interest is stated at the non-controlling interest's proportion of the fair values of the assets and liabilities recognised. Subsequently, losses applicable to the non-controlling interest in excess of the non-controlling interest in the subsidiary's equity are allocated against the interests of the Group where the non-controlling interest has a specific exemption from making an additional investment to cover the losses. Future profits attributable to the non-controlling interest are not recognised until the unrecognised losses have been extinguished.

The results of entities acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

All intra-Group transactions, balances, income and expenses are eliminated on consolidation.

Associates, Joint Ventures and jointly controlled entities

Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 percent and 50 percent of the voting power of

 another entity. Jointly controlled entities are those entities whose activities the Group has joint control, established by contractual arrangement.

Investments in associates and jointly controlled entities are accounted for under the equity method and are usually recognised initially at cost. The cost of the investment includes transaction costs. Upon contribution of a subsidiary to a jointly controlled entity, the Group derecognises the assets and liabilities of the subsidiary, and replaces with the fair value of the jointly controlled entity. Any gain arising is recognised in full in the income statement.

The consolidated financial statements include the Group's share of the profit or loss and other comprehensive income of equity-accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant influence or joint control commences until the date that significant influence or joint control ceases.

When the Group's share of losses exceeds its interest in an equity accounted investee, the carrying amount of the investment, including any long term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

The Company records interests in associate, joint ventures and jointly controlled entities initially at cost and thereafter at cost less provisions for impairment.

The acquisition of subsidiaries and businesses is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair values at the acquisition date, except for non-current assets that are classified as held for sale in accordance with IFRS 5, which are recognised and measured at fair value less costs to sell. 

Business combinations

Goodwill arising on acquisition is initially measured at cost, being the excess of the fair value of the consideration over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised.

When the excess is negative the identified fair values are reassessed to ensure that all acquired assets and liabilities have been recognised.

If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds the fair value of the consideration, the excess is recognised immediately in the income statement.

The interest of non-controlling interests in the acquiree is initially measured at the non-controlling interest's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.

Put options

Equity put options held by non-controlling interest holders are recognised as financial liabilities at the present value of amounts payable on their exercise with a corresponding entry to other reserves. The Group continues to recognise non-controlling interests in respect of these equity investments where the risks and rewards of ownership are deemed to have been retained by the non-controlling interest holders.

(b) Intangible assets

Goodwill

Positive goodwill arising on consolidation is recognised as an asset.

Following initial recognition, goodwill is subject to impairment reviews, at least annually, and measured at cost less accumulated impairment losses. The recoverable amount is estimated at each reporting date. Any impairment loss is recognised immediately in the income statement and is not subsequently reversed when the carrying amount of the asset exceeds its recoverable amount.

Any impairment losses recognised in respect of cash generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units (groups of units) and then, to reduce the carrying amount of other assets in the unit (groups of units) on a pro rata basis.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gain or loss on disposal. Goodwill arising on acquisitions before the date of transition to adopted IFRS has been retained at the previous UK GAAP amounts, after being tested for impairment at that date.

Other intangible assets

Other intangible assets are measured initially at cost and are amortised on a straight-line basis over their estimated useful lives. The carrying amount is reduced by any provision for impairment where necessary.

On a business combination, as well as recording separable intangible assets already recognised in the statement of financial position of the acquired entity at their fair value, identifiable intangible assets that are separable or arise from contractual or other legal rights are also included in the acquisition statement of financial position at fair value.

Amortisation on intangible assets is charged on a straight line basis over their useful economic life, on the following basis:

Brands 5 years

Intellectual property 5 years

Licences Life of licence, not to exceed 5 years

Customer relationships 5 years - 10 years

Franchises 5 years

Contractual rights Life of right, not to exceed 20 years

Costs directly associated with the acquisition of the licenses required to provide commercial airline services are capitalised as intangible assets in accordance with IAS38 within contractual rights. Costs are capitalised from the point that it is highly likely the conditions to acquire the licence will be met and the commercial success of the airline operations is anticipated. Capitalised costs excluded start up losses and any costs not directly attributable to obtaining the licence. No such costs have been incurred in 2012 as they did not meet the conditions for capitalisation as intangible assets.

(c) Foreign currencies

The individual financial statements of each Group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group company are expressed in pounds sterling, which is the functional currency of the Company, and the presentational currency for the consolidated financial statements.

In preparing the financial statements of the individual companies, transactions denominated in foreign currencies are translated into the respective functional currency of the Group entities using the exchange rates prevailing at the dates of transactions. Non-monetary assets and liabilities are translated at the historic rate. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the rates of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the income statement for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value in respect of which gains and losses are recognised directly in equity are also recognised directly in equity.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing at the reporting date. Income and expense are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case weighted average rates are used. Exchange differences arising, if any, are classified in equity and are transferred to the Group's foreign currency translation

reserve within equity. Such translation is recognised as income or as expense in the period in which the operation is disposed of.

All foreign exchange gains or losses that are reflected in the income statement are presented within financing income or expense.

(d) Taxation

The tax expense represents the sum of current tax and deferred tax.

Current taxation

Current tax is based on taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred taxation

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 computation of taxable profit, 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. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on the investments in subsidiaries and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates substantially enacted at the reporting date, that apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

(e) Investments

The Group's investments in equity securities that are not associates or joint ventures are classified as either available-for-sale financial assets or assets at fair value through profit and loss. This designation is made on acquisition of individual investments. For available for sale financial assets subsequent to initial recognition, they are measured at fair value or cost where fair value cannot be assessed and changes therein, other than impairment losses (see below), are recognised directly in equity. When an investment is de-recognised, the cumulative gain or loss in equity is transferred to the income statement. For assets at fair value through profit and loss, subsequent to initial recognition they are measured at fair value and changes recognised within gains/losses on other investments in the income statement.

Impairment

A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired.

A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value.

All impairment losses are recognised in the income statement. Any cumulative loss in respect of an available-for-sale financial asset recognised previously in equity is transferred to the income statement.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in the income statement. For available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity.

(f) Property, plant and equipment

Long leasehold land and buildings are stated in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the reporting date.

Any revaluation increase arising on the revaluation of such land and buildings is credited to the revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case the increase is credited to the income statement to the extent of the decrease previously charged. A decrease in carrying amount arising on the revaluation of such land and building is charged as an expense to the extent that it exceeds the balance if any, held in the revaluation reserve relating to a previous revaluation of that asset. Depreciation on revalued buildings is charged to the income statement. On subsequent sale or retirement of a revalued property, the attributable revaluation surplus remaining is transferred directly to retained earnings.

All other assets are stated at historical cost less accumulated depreciation and accumulated impairment losses.

Depreciation is charged so as to write off the cost or valuation of assets (less estimated residual values updated annually), other than long leasehold land, over their estimated useful lives, on the following basis:

Long leasehold land and buildings 2% of cost

Short leasehold land and buildings Over the term of the lease

Plant and machinery 10% of cost

Fixtures and fittings 15% - 25% of cost

Aircraft 5% - 6.67% of cost

The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement for the period.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets, or where shorter, over the relevant lease term.

In respect of aircraft, subsequent costs incurred which lend enhancement to future periods such as long term scheduled maintenance and major overhaul of aircraft and engines are capitalised and amortised over the length of the period benefiting from those enhancements. All other costs relating to maintenance are charged to the income statement as incurred.

(g) Biological assets

Certain Group subsidiaries involved in the production of fresh produce recognise biological assets, which includes agricultural produce due for harvest on fruit plantations. Under IAS41, Biological Assets are required to be included at fair value. Fair value is determined by reference to the net present value of the biological assets at the reporting date. Biological assets are stated at fair value less estimated point of sale costs, with any resultant gain or loss recognised in the income statement. The valuation of the fruit plantations is based on discounted cashflow models whereby the fair value of the assets is calculated using cashflows for continuous operations taking into account growth and yield potential.

When the fruit or other biological asset is harvested, it is transferred to inventory at the lower of cost and net realisable value.

(h) Impairment of assets excluding goodwill, inventories and deferred tax assets

At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of any impairment loss. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.

An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years.

A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation increase.

(i) Financial instruments

Financial assets and financial liabilities are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and demand deposits and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

Trade receivables

Trade receivables are measured at initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated recoverable amounts are recognised in the income statement when there is objective evidence the asset is impaired.

Restricted cash

Restricted cash is cash at bank that is not freely available due to specific restrictions on its use (note 23). It is presented together with Cash and cash equivalents as Cash at bank in the Statement of financial position.

Trade payables

Trade payables are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method.

Financial liabilities

Financial liabilities are classified according to the substance of the contractual arrangements entered into.

Bank borrowings

Interest bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs.

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

Derivative cash flow hedging instruments

Derivative cash flow hedging instruments are initially recognised, and subsequently measured, at fair value. The fair values of

derivative hedging instruments are determined based on market data to calculate the present value of all estimated flows

associated with each instrument at the balance sheet date. Changes in their fair values are recognised directly in other

comprehensive income (to the extent that they are effective), with the ineffective portion being recognised in the income

statement. In order to qualify for hedge accounting, the Group is required to document prospectively the relationship between

the item being hedged and the hedging instrument.

The Group is also required to demonstrate an assessment of the relationship between the hedged item and the hedging instrument

 which shows that the hedge will be highly effective on an ongoing basis. This effectiveness testing is re-performed periodically to

 ensure that the hedge has remained, and is expected to remain, highly effective.

(i)Financial instruments (continued)

Hedge accounting is discontinued when a hedging instrument is derecognised (e.g. through expiry or disposal), or no longer

qualifies for hedge accounting. Where the hedged item is a highly probable forecast transaction, the related gains and losses

remain in equity until the transaction takes place, when they are reclassified to the income statement. When a hedged futuretransaction is no longer expected to occur, any related gains and losses, previously recognised in other comprehensive income,are immediately reclassified to the income statement.

Derivative fair value changes recognised in the income statement are either reflected in arriving at operating profit (if the hedged item is similarly reflected) or in finance expense.

(j)Capital management

The Board's policy for the Group and Company is to maintain a strong capital base so as to maintain investor, creditor and

market confidence and to sustain future development of the business. The Board of Directors monitors ROCE (return on capital

employed) and ROE (return on equity) as part of its capital management.

(k)Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and where applicable direct expenditure and attributable overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

. Significant accounting policies (continued)

(l) Share based payments

The Group provides benefits to certain employees, including senior executives, in the form of share based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions). The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using a Black-Scholes model. The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.

(m) Interest-bearing borrowings

Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the income statement over the period of the borrowings on an effective interest basis.

(n) Dividends

Interim dividends are recognised when paid and final dividends are recognised as liabilities in the period in which they are approved by shareholders.

(o) Provisions

A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

(p) Revenue recognition

Revenue, for the other major segments not detailed below, is derived from the sale of goods and services and is measured at the fair value of consideration received or receivable, after deducting discounts, volume rebates, value-added tax and other sales taxes. A sale of goods and services is recognised when recovery of the consideration is probable, there is no continuing management involvement with the goods and services and the amount of revenue can be measured reliably.

A sale of goods is recognised when the significant risks and rewards of ownership have passed to the buyer, the associated costs and possible return of goods can be estimated reliably. This is when title and insurance risk have passed to the customer and the goods have been delivered to a contractually agreed location.

A sale of services is recognised when the service has been rendered.

Infrastructure division

Included within the infrastructures division is revenue from port activities. Revenue from port activities represents the income earned from the provision of port facilities, which comprise cargo and other handling, towage, pilotage, conservancy and waste management services and port related rental income. Such revenue is recorded once the service has been provided.

Agribusiness division

Revenue for the agribusiness division includes the invoice value of goods where the Group grows or takes ownership risk on the relevant produce. Where the Group provides logistics or processing services without taking ownership risk on the relevant produce, revenue comprises the invoiced value of the services provided. Revenue is recognised when the supply of the goods or services are completed. There are no discounts or other arrangements that create uncertainty over the level of revenue recognised.

Support services division

The Group supplies an immaterial amount of bundled IT services. When these occur revenue is allocated based on the fair values of the respective services provided.

Aircraft division

Revenue for the aircraft division comprises the invoiced value of airline services, net of passenger taxes, discounts, plus ancillary revenue. Revenue from the sale of flight seats (passenger revenue) is recognised in the period in which the service is provided. Unearned revenue represents flight seats sold but not yet flown and is included within deferred income.

(q) Leases

Leases are classified according to the substance of the transaction. A lease that transfers substantially all the risks and rewards of ownership to the lessee is classified as a finance lease. All other leases are classified as operating leases.

Finance leases

Finance leases are capitalised in the statement of financial position at their fair value or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease. The corresponding liability is shown as a finance lease obligation to the lessor. Leasing repayments comprise both a capital and a finance element. The finance element is written off to the income statement so as to produce an approximately constant periodic rate of charge on the outstanding obligation.

Operating leases

Operating lease rentals are charged to the income statement on a straight line basis over the period of the lease.

(r) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in the income statement in the period in which they are incurred.

(s) Earnings per share

Basic earnings per share is calculated based on the weighted average number of ordinary shares outstanding during the period. Diluted loss per share is based upon the weighted average number of shares in issue throughout the year, adjusted for the dilutive effect of potential ordinary shares. The potential dilutive ordinary shares in issue are employee share options and the equity conversion element of the convertible bond.

(t) Reportable segments

Segments are determined to be the lowest operational segment that the Chief Operating Decision Maker ("CODM") evaluates the result of the segment and allocates resources to that segment. This is based on the Group's internal organisation and the financial information provided to the CODM.

(u) Assets and liabilities classified as held for sale

Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Group's accounting policies. Thereafter generally the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell. Any impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets and deferred tax assets, which continue to be measured in accordance with the Group's accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on re-measurement are recognised in the income statement. Gains are not recognised in excess of any cumulative impairment loss.

(v) Convertible bonds

Convertible bonds are regarded as compound instruments, consisting of a liability component and either an equity component or an embedded derivative component.

At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible debt. The difference between the proceeds of issue of the convertible bonds and the fair value assigned to the liability component represents the value of either an equity component or an embedded derivative component attributable to the embedded option to convert the bonds into equity of the Group.

IAS 32 states that a derivative contract that will be settled by the entity receiving or delivering a fixed number of its own equity instruments in exchange for a fixed amount of cash or another financial asset is an equity instrument. It also states that a contract that will be settled by the entity delivering or receiving a fixed number of its own equity instruments in exchange for a variable amount of cash or another financial asset is a financial asset or financial liability. For the purposes of the consolidated financial statements, when making the assessment of whether a convertible bond, when exercised, gives rise to the exchange of a fixed or variable amount of cash, or other financial asset, the functional currency of the parent company relative to the currency denomination of the bonds is considered in addition to other features within the bond.

For convertible bonds issued by the Group where there is a difference between the currency of the bond and the functional currency of the issuer, the embedded option to convert the bonds is recorded as a derivative liability because it is not a contract to exchange a fixed number of shares for a fixed amount of bonds. The embedded derivative liability component is separately identified and measured at fair value through profit or loss. For convertible bonds issued by the Group where the currency of the bond and the functional currency of the issuer are the same, i.e. where on conversion of the bonds a fixed number of shares is exchanged for a fixed amount of bonds, the value of the embedded option to convert the bonds is recorded within equity on initial recognition.

Issue costs are apportioned between the liability and embedded option components of the convertible bonds (recorded as equity or as a derivative liability) based on their relative carrying amounts at the date of issue.

The interest expense on the liability component is calculated by applying the prevailing market interest rate for similar non-convertible debt to the liability component of the instrument. This interest expense, recognised in the income statement, is calculated using the effective interest method, i.e. the difference between the interest expense on the liability component and the interest paid is added to the carrying amount of the convertible bond.

(w) Non-GAAP measures

Following a review of key performance indicators used by the Directors and consultations with key stakeholders, the Directors have revised the key non-GAAP profit measure used to monitor performance of the business. From 1 January 2012 the key non-GAAP profit measure used by the board is net operating profit which is defined as operating profit before amortisation of acquired intangible assets and share based payment charges less net finance charges. The directors believe that this measure best reflect the trading performance of the group.

4. Segment reporting

The "Chief Operating Decision Maker" (CODM) is deemed to be the Executive Committee who monitors the results of the business segments to assess performance and make decisions about the allocation of revenues. Segment performance is evaluated on both revenue and net operating profit/(loss).

Segment results, assets and liabilities include items directly attributable to a segment as well as those that are allocated on a reasonable basis. Unallocated items comprise mainly corporate assets and expenses.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.

There is no inter-segment revenue.

Business segments

The Group has four core continuing reportable segments which are organised around the basis of products and services which they provide:

·; Agribusiness

·; Infrastructure

·; Support services

·; Hotels

The Group has not aggregated any operating segment in arriving at this analysis. Following the contribution of a subsidiary to a jointly controlled entity (note 11), the transportation division from the 29 June 2012 is no longer considered a core operating division but remains a continuing operation. This is consistent with the reports provided to the (CODM).

The head office division includes head office costs that are not allocated to the operating divisions. The revenue from the head office division relates to income from related parties.

Geographical analysis

All of the segments operate in various parts of Africa, Europe and Americas.

Business segments

*See accounting policy note (w)

Business segments

*See accounting policy note (w)

Geographical analysis