Nine costs for retail investors to consider

Costs of listing in the London Stock Exchange(LSE)

Novice investors watch out!Novice investor watch out!

More than 30% of AIM-Listed companieshave dealt investors a loss of 95% or more!

That 863 companies, since 1995.

Only 39 AIM-Listed companies have made areturn of 1,000% or more!

What are the causes?

The AIM-market, junior market to the main listing is self-regulated.

Most AIM companies are 'start-ups' looking to broaden itsborrowing options.

In case, financial institutions stop lending to them!

Unfortunately, nine out of ten businesses fail whether it isprivately owned or, publicly traded!

You should be alarmed

Because the only way a publicly-listedcompany survives is to ask you for

cash!

Here are nine costs a publicly-listedare obligated to pay before the money

goes into business operations

ESPECIALLY, WHEN MANAGEMENT ASK FOR FURTHERFINANCING!

1. Further share issue

In any stock market in the world, when a company issues newshares they need to pay a fee to the Stock Exchange!

In the London Stock Exchange, you pay the following:

For companies listed on the primary market, it has to pay amaximum fee £165,000 to raise up to £500m. Above that it needto pay £118 for every new million pounds raised. There is a 20%

VAT tax on top!

For companies listed on the AIM market, it has to pay £166 forevery million pounds raised between £5m-£250m. But

maximum fee is limited to £44,590.

2. To stay listed on the StockExchange

The main market

For the AIM market

Need to pay the charge of £6,250, regardless of size

20% VAT applies!

£6,250 minimum fee for companies with market cap of £0 to£50m.

£52,000 maximum for firms that have a market cap greaterthan £500m or above.

3. Auditors' fees

Audit fees vary from company to companyand depend on the size of its operations.

To determine the size of audit fee, you needto compare the size of business operationsrather than the company’s marketcapitalisation.

Companies Revenue Market Cap. Audit fees

1. 4D Phrama £0 £481m £20,000

2. ZincOx Resources plc $38m (£25m) £1.18m $130,000 (£86,000)

3. Royal Dutch Shell $421bn (£277bn)

£56.6bn(reflect

London-listedelement)

4. Tesco £62bn £11.7bn

$50m (£33m)

£5.4m

4. Tax Compliances

Paying taxes apply to every business owner

However, some publicly-listed businesses would show howmuch they pay for tax services, and others companies would tie

it up to other legal and professional costs like 4D Pharma

Again, the amount of tax companies’ pay depends on the size ofits operations.

Companies Revenue Market cap. Tax compliance fees

1. Topps Tiles

2. ZincOx Resources plc

3. Royal Dutch Shell

4. Tesco

£195m

$38m (£25m)

$421bn (£277bn)

£62bn

£297m

£1.18m

£92bn

£11.7bn

£70,000

$28,000 (£18,421)

$1m (£657,000)

£0.9m

5. RNS releases

RNS releases are a way for companies to communicate toshareholders. The purpose of the RNS is to give breaking

news (it a written form) that affect the firm’s market value.

Companies listed on the London Stock Exchange will have to pay£20,000 per annum to release real-time information or, £13,500 per

annum for delayed information.

There is another £5,000 per annum payable to the stockexchange to release RNS via XML feed though there is no

charge via Millennium Exchange.

6. Non-Executive directors

The ‘Overseers’ of the company are independent directors who ensurethe business is probably run

They also chair board meetings relating to Remuneration,Nomination and Audit committee.

If companies are non-revenue producing

Then you the shareholders have to footthe bill for these non-executive directors!

CompaniesTotal non-executive directors pay

including chairman

1.Topps Tiles

2. ZincOx Resources plc

3. Royal Dutch Shell

4. Tesco

5. 4D Pharma

£226,000

$129,000 (£84,868)

€2.425m (£1.73m)

£1.8m

£70,000

A good non-executive director shouldhave experience working andmanaging a similar business.

Therefore, understanding what thecompany is trying to achieve and how

they will get there.

7. REGISTRARS

A registrar is going to keep a register of who own the company’s shares.In the UK, there Are three registrars (Capita, Equiniti and

Computershare).

Other tasks a registrar does are to pay dividends to shareholders,provide shareholders information for lost share certificates and trace

the history of companies that changed its name, gone bankrupt or beentaken over.

8. Nominated adviser

A nominated adviser or NOMAD, advises companieslisted on the AIM market.

The financial adviser needs to have experience in advisingcompanies on listing in the market and delisting from the AIM

market.

9. Broker

The role of a role broker is to help the company to assess thelevel of interest in its shares, advice on market and trading

issues, provide advice on the pricing of shares and investmentopportunities.

ALL THREE of these services (registrars,NOMAD and broker) all cost money.

That depends on the individual financial services firm theychoose

So with all these costs involved, before the company can invest in itsoperations, WE MUST.....

REMEMBER

WHEN COMPANIES ARE ASKING TO RAISE A FEW 'HUNDRED' THOUSANDS OFPOUNDS FOR A CONSISTENT PERIOD OF TIME THAN.........

its looking for you, the retail investor to foot the billof the ABOVE COSTS.

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