London Stock Exchange : LSEGA Financing plc Annual Report 2023

LSEGA Financing plc

Report and financial statements

For the year ended 31 December 2023

Company registration number 13091751

CONTENTS

PAGE

1 .............................................................................................................................................. Directors and Officers

2 ....................................................................................................................................................... Strategic Report

6 ...................................................................................................................................................... Directors' Report

9 ................................................................... Independent Auditor's Report to the Member of LSEGA Financing plc

16 .................................................................................................................................................. Income Statement

17 .................................................................................................................... Statement of Comprehensive Income

18 ......................................................................................................................................................... Balance Sheet

20 ............................................................................................................................. Statement of Changes in Equity

21 ......................................................................................................................... Notes to the Financial Statements

LSEGA FINANCING PLC DIRECTORS AND OFFICERS

DIRECTORS

Oliver David Wolfensberger Catherine Anne Thomas Lisa Margaret Condron Damien Patrick Scott Maltarp

COMPANY SECRETARY

Andrei-Constantin Bosoiu

REGISTERED OFFICE

10 Paternoster Square London

EC4M 7LS

BANKERS

HSBC Bank plc

City of London Branch 60 Queen Victoria Street London

EC4N 4TR

(resigned 16 February 2024)

(appointed 27 February 2024)

INDEPENDENT AUDITORS

Ernst & Young LLP 25 Churchill Place Canary Wharf London

E14 5EY

The directors present their strategic report for LSEGA Financing plc (the 'Company') for the year ended 31 December 2023.

The Company is a public limited company incorporated and domiciled in England and Wales. Its operations are in the UK. The address of its registered office is 10 Paternoster Square, London, EC4M 7LS.

REVIEW OF BUSINESS

The Company is a wholly owned subsidiary of London Stock Exchange Group plc ('LSEG', the 'parent', the 'Group').

During 2023, the Company became the central treasury vehicle for the Group with the purpose of financing and risk management. The Company has taken on a number of new functions that were previously carried out by its parent company.

These include:

• • Cash pooling and intercompany financing;

• • Managing FX risk for the Group, through the use of forwards, swaps and in limited cases, options;

• • Investment in money market funds; and

• • Raising debt through bonds, credit facilities and commercial paper.

All instruments used by the Company are explicitly permitted by the Group's Treasury Policy.

As a result of this change of purpose, it was agreed by the directors that the Company does not act autonomously from its parent and with no further conclusive evidence agreed that its functional currency is the same as its parent company. Consequently, from 1 January 2023 the Company uses GBP as its functional currency. The directors have also changed the presentation currency to GBP for the current year.

The US dollar bonds issued in 2021 remain in place and are listed on the Main Market of the London Stock Exchange (a related company) in the UK. No further bonds have been issued by the Company this year.

In September 2023, a Group company issued further bonds denominated in euros and the Company entered into various interest rate derivative contracts to hedge these amounts for the Group. They are not designated as hedging instruments for the Company.

The Company's profit after tax for the year ended 31 December 2023 was £7,808k (2022: £4,055k) driven mainly by finance income. Net assets were £28,774k (2022: £23,582k). Due to the nature of the business, the directors have concluded that there are no other relevant KPIs.

FUTURE DEVELOPMENTS

The Company is expected to continue to act as the central treasury vehicle of the Group and manage the Group's foreign exchange, interest rate and liquidity risk.

SECTION 172 (1) STATEMENT

Section 172 of the Companies Act 2006 requires a Director of a company to act in the way he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. In doing this Section 172 requires a Director to have regard, amongst other matters, to the:

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likely consequences of any decisions in the long-term; interests of the company's employees; need to foster the company's business relationships with suppliers, customers and others; impact of the company's operations on the community and environment; desirability of the company maintaining a reputation for high standards of business conduct, and need to act fairly as between members of the company.

In discharging our section 172 duties we have regard to the factors set out above. We also have regard to other factors which we consider relevant to the decision being made. Those factors, for example, include the interests and views of our community and the environment, our workforce, our customers, our suppliers, and our relationship with regulators. The Company does not have any direct employees; it instead utilises the workforce of LSEG Group companies (the "Group") We acknowledge that every decision we make will not necessarily result in a positive outcome for all of our stakeholders, however, we aim to ensure consistent and predictable outcomes by having a robust, documented decision-making process which considers the Company's purpose, vision and values, together with its strategic priorities.

We delegate authority for day-to-day management of the Company to executives and then engage management in setting, approving and overseeing execution of the business strategy and related policies.

As the principal activity of the Company is to act as a financing vehicle for the Group and access bond markets and the Group's Revolving Credit Facilities, the Company has had no commercial business, and no employees, customers or suppliers other than other Group companies during the period and as such the breadth of stakeholder considerations that would often apply in operating or commercial trading companies have generally not applied to the decisions made by the Directors

The views of stakeholders, and the impact of the Company's activities on those stakeholders, are an important consideration for the Directors when making relevant decisions. The Board recognises that building strong relationships with our stakeholders will help to deliver the Company's strategy in line with our long-term values and operate the business in a sustainable manner. While there are cases where the Board judges that it should engage directly with certain stakeholder groups or on certain issues, the size and spread of both our stakeholders and the Group means that sometimes our stakeholder engagement will take place at an operational or Group level. For details on the engagement that takes place with the Company's stakeholders at a Group level, please see pages 69 to 74 of the London Stock Exchange Group plc Annual Report for the financial period ended 31 December 2023.

During the period we received information to help us understand the interests and views of the Company's key stakeholders and other relevant factors when making decisions. This information was distributed in a range of different formats including in reports and presentations. As a result of this we have had an overview of engagement with stakeholders and other relevant factors which allows us to understand the nature of the stakeholders' concerns and to comply with our section 172 duty to promote the success of the Company.

We set out below some examples of how we have had regard to the matters set out in Section 172(1)(a)-(f) when discharging our Section 172 duty and the effect of that on certain decisions taken by us.

Annual report and financial statements

The Board convened a meeting to approve the Company's annual report and financial statements for the year ended 31 December 2022. The Directors received presentations and had the opportunity to ask questions on the Company's financial performance. This allowed them to consider the strength of the Company's balance sheet and long-term financial position.

Commercial Paper Programme

In February 2023, the Board approved the accession of the Company to the Group's euro commercial paper programme as a means to optimise the funding structure, minimise interest expense and diversify borrowing sources both for the Group and the Company.

The Company will use this programme, along with the US commercial paper programme to raise short-term finance denominated in sterling, euro and US dollars. Any FX risk arising on foreign currency borrowings will be managed as part of the Company's overall position in accordance with the Group Treasury Policy. Accession to the euro commercial paper programme should permit the Company to gain access to emergency market support programmes for the sterling commercial paper market established by the Bank of England. All issuance by the Company under both programmes will be guaranteed by London Stock Exchange Group plc.

Supplier considerations

The Company relies on external and internal suppliers for certain services which are required to maintain the efficiency and resilience of the Company's operations.

Regular meetings are held with Company's suppliers, which allow for open discussions and encourage a collaborative approach in order to identify and mitigate any risks to the key service provisions of the Company. At those meetings, service level agreements and KPIs are discussed, and feedback is exchanged. We believe that having solid long-term relationships with our suppliers is essential to continue to maintain access to such financing programmes.

Shareholder considerations

As a wholly owned direct subsidiary of London Stock Exchange Group plc, the Company operates within LSEG's strategic framework and in accordance with LSEG's policies and procedures, enjoying a constructive working relationship with the Group. The Company also operates a number of Company specific policies which may impose a higher set of standards, where required.

EMPLOYEES

The Company has no employees (2022: nil).

PRINCIPAL RISKS AND UNCERTAINTIES

LSEG has adopted a group wide risk management system that provides ongoing formal assurance that all subsidiary companies are appropriately controlling all the risks to which they are exposed, ensuring that internal controls operate efficiently and effectively.

The Company is subject to a variety of foreseeable and unforeseeable risks and uncertainties which may have an impact on the Company's ability to execute its strategy and deliver its expected performance. The identification, assessment and management of these risks are central to the Company's operating framework.

The Company's principal risks relate to credit risk, liquidity risk and interest rate risk.

• - Credit risk arises from the possibility that the Company's debtors will not be able to repay their debts when called. This is mitigated by the fact that intercompany debts are covered by letters of support from the parent.

• - Liquidity risk arises from the possibility that the Company will not be able to pay its liabilities as they fall due. The parent company, LSEG plc, has guaranteed the Company's external debts and is a highly rated listed company with access to adequate cash resources. The Company also has direct access to external funding if required.

-Interest rate risk arises from changes in market interest rates. To mitigate this risk, the Company uses interest rate and cross-currency interest rate swaps to manage its risks.

The Company's risk control structure is based on the 'three lines of defence' model:

• • The First line (Management) is responsible and accountable for identifying, assessing and managing risk.

• • The Second line (Risk Management and Compliance) is responsible for defining the risk management process and policy framework and providing challenge to the first line on Risk Management activities. assessing risks and reporting to the Group Board Committees on risk exposure.

• • The Third line (Internal Audit) provides independent assurance to the Board and other key stakeholders over the effectiveness of the systems of controls and the Risk Management Framework.

The Company has considered the ongoing situations in Ukraine and Middle East and does not consider this to pose a significant threat to the Company, but the Group continues to monitor the situation.

CLIMATE CHANGE

The Company's approach to climate change is governed by the Group's policies and procedures. The Group's response to climate change can be found in the Climate Report in the Annual Report of LSEG.

By order of the board:

Damien Patrick Scott Maltarp Director

LSEGA Financing plc 22 March 2024

REGISTERED OFFICE:

10 Paternoster Square, London, EC4M 7LS

The directors present their report and the audited financial statements of the Company for the year ended 31 December 2023.

REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS

The review of the Company's business and future developments are set out within the strategic report on page 2.

DIVIDENDS

The directors do not recommend a dividend for the current year (2022: nil).

DIRECTORS AND DIRECTORS' INTERESTS

The following directors have held office throughout the period and up to the date of approval of the financial statements, unless otherwise stated:

Oliver David Wolfensberger Catherine Anne Thomas Lisa Margaret Condron Damien Patrick Scott Maltarp

(resigned on 16 February 2024)

(appointed 27 February 2024)None of the directors had any interest in the shares of the Company. There are no directors' interests requiring disclosure under the Companies Act 2006.

DIRECTORS' LIABILITIES

The Company has Directors' and Officers' insurance which provides an indemnity to one or more of its directors against liability in respect of proceedings brought by third parties. Such qualifying third-party indemnity provision remains in force as at the date of approving the Directors' Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable United Kingdom law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 101 Reduced Disclosure Framework ('FRS 101').

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 Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

• • select suitable accounting policies in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;

• • make judgements and accounting estimates that are reasonable and prudent;

• • present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;

• • provide additional disclosures when compliance with the specific requirements in FRS 101 is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the group and company financial position and financial performance;

• • state whether applicable United Kingdom Accounting Standards, including FRS 101 have been followed, subject to any material departures disclosed and explained in the financial statements; and

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for preparing a strategic report and directors' report that comply with that law and those regulations. The directors are responsible for the maintenance and integrity of the relevant corporate and financial information included on the Group's website.

GOING CONCERN

The Directors have reviewed the Company's forecasts and projections, taking into account reasonably possible changes in trading performance, which show that the Company has sufficient financial resources. The Company is expected to continue to make profits as a result of its intercompany debt and has significant net assets. The interest rates suffered are fixed for the term of the debt and are lower than the rates charged by the Company on its intercompany loan receivables.

The Company has received a Letter of Support from its parent confirming that in the event of a default by the Company's debtors, the parent would pay the debts in full. The parent company also guarantees the Company's third-party liabilities.

The parent company, LSEG plc, is a well-respected and highly rated company with access to a number of liquidity sources.

On the basis of this review, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for 12 months from the date of approval of the financial statements. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

FINANCIAL INSTRUMENTS

The Company holds both financial assets and financial liabilities at amortised cost and fair value through profit or loss (FVPL).

The financial assets are intra-group receivables, cash, and derivatives. The principal risks associated with these are described in the Strategic Report.

The financial liabilities are the listed bonds and accrued interest, intra-group payables or derivatives. The liquidity risk in respect of these amounts is described in the Strategic Report. The fair value of the listed debt is also disclosed where different from the book value. All derivatives are held at FVPL.

EVENTS AFTER THE REPORTING PERIOD

The Company performed a review of events subsequent to the balance sheet date to the date the financial statements were issued and determined that there were no such events requiring recognition or disclosure in the financial statements.

DIRECTORS' STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

In the case of each of the persons who are directors of the Company at the date when this report was approved:

• • so far as each of the directors is aware, there is no relevant audit information of which the Company's auditors are unaware; and

• • each of the directors has taken all the steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

AUDITORS

On 30 June 2022, the ultimate parent of the Company, LSEG plc, announced the appointment of Deloitte LLP as its auditor for the year ending 31 December 2024. Consequently, Ernst & Young LLP will resign as the Company's statutory auditor at the conclusion of the 2023 audit and the Company will resolve to appoint Deloitte LLP, subject to shareholder approval at the LSEG plc Annual General meeting.

By order of the board:

Damien Patrick Scott Maltarp Director

LSEGA Financing plc 22 March 2024

REGISTERED OFFICE:

10 Paternoster Square, London, EC4M 7LS