BISICHI MINING - Final Results

PR Newswire
London, April 23
                          BISICHI MINING PLC                  Results for the year ended 31 December 2013Financial summary:  \* Turnover: £35,105,000 (2012: £35,962,000)  \* EBITDA: £3,039,000 (2012: £4,684,000)Summary:  \* Strong performance at Black Wattle colliery in the first half was adversely    impacted by short term mining problems in the second half  \* Agreement to purchase 2.3million tonnes of high quality Run of Mine coal    from an adjacent opencast reserve  \* Physical demand for Black Wattle coal remains strong despite weak    international coal prices  \* 266,000 metric tonnes (2012: 160,000 metric tonnes) exported via Richards    Bay under the Quattro Programme  \* The UK retail portfolio continues to perform well with very low voids  \* Final Dividend proposed of 3p per share payable in cash in addition to the    interim dividend of 1p per shareChairman, Sir Michael Heller, comments:"We expect Black Wattle to return to acceptable levels of profitability once wereturn to full production from our lower cost pits in the second half of 2014and, although we expect depressed coal prices to continue for the whole of theyear, we view the outturn for the year with cautious optimism."For further information, please call:Andrew Heller or Garrett Casey, Bisichi Mining PLC 020 7415 5030Bisichi Mining PLCAnnual Report 2013Earnings before interest, tax, depreciation and amortisation(EBITDA) of £3.0million (£4.7million)Agreement to purchase 2.3million tonnes of high quality Run of Minecoal from nearby opencast reserveUK property portfolio continues to perform well with voids at the verylow level of 2.13%STRATEGIC REPORTCHAIRMAN'S STATEMENTIn the year to 31 December 2013 your Company achieved earnings before interest,tax, depreciation and amortisation (EBITDA) of £3.0 million (2012: £4.7million).As we stated in the Interim Report, the year started well for your Company witha strong performance in the first six months at Black Wattle, our South Africancoal mining subsidiary. However, as we reported in the Interim ManagementStatement, in the final quarter of 2013 our open cast mining operations atBlack Wattle were severely impacted when one of our main production pits raninto unrecorded old underground workings. The prompt action taken by yourmanagement ensured that the mine recovered quickly from this incident, but theproduction lost from this area had to be made up by increased production fromone of our higher cost pits. Inevitably, this has had an adverse impact onprofitability. We expect the mine to return to acceptable levels ofprofitability in the second half of 2014 when we return to full production fromour lower cost pits.Looking forward, we are pleased to report that Black Wattle has concluded anagreement with Blue Nightingale Trading 817 (Pty) Ltd ("Blue Nightingale"), ablack owned and managed mining company, to purchase Run of Mine coal from anopencast reserve adjacent to our existing mine. This reserve consists ofapproximately 2.3 million tonnes of high quality coal with very low strippingratios. This is the second mining agreement we have concluded with BlueNightingale and we are very pleased to be involved with them in the developmentof another reserve.We are also pleased to report that Black Wattle continues to perform well underthe Quattro Programme which allows junior black-economic empowerment coalproducers direct access to the coal export market via Richards Bay CoalTerminal. During 2013 the mine railed 266,000 metric tonnes (2012: 160,000metric tonnes) through the programme.We would like to thank Vunani Limited, our black-economic empoweredshareholders at Black Wattle for managing and developing this opportunity.Despite the fact that coal markets have been affected by weak internationalcoal prices, the physical demand for our coal continues to remain strong inboth the domestic and export markets. Nevertheless we expect depressed coalprices to continue for the whole of 2014.Meanwhile, the Company's UK retail property portfolio, which underpins theGroup and which is actively managed by London & Associated Properties PLC,continues to perform well. Despite the regional location of our portfolio,voids across the portfolio were at the extraordinarily low level of 2.13%.Given all of the above but also taking into account the strength anddiversification of our business, your directors have decided to hold thedividend at the 2012 level and will recommend to you, our shareholders, a finaldividend of 3p (2012: 3p) payable on 1 August 2014 to shareholders registeredat the close of business on 4 July 2014 making the total for the year 4p.On behalf of the Board, I would like to thank all of our staff for their hardwork during the course of the year.Sir Michael HellerChairman17 April 2014STRATEGIC REPORTMining REVIEWThe strong earnings and momentum achieved in the first half of the year atBlack Wattle, our South African coal mining operation, were hampered in thesecond half of the year when mining was affected at one of our main productionpits, where we mined into old underground workings which were never recorded onany historical mine plan. Looking forward to 2014, we expect to see the mine toreturn to acceptable levels of profitability by the second half of the year.With new reserves to develop and strong demand for our coal we remain highlyconfident on the prospects of our coal mining activities in South Africa.Production and operationsRun of mine production from Black Wattle remained strong in 2013 with totalproduction for the year of 1.77million metric tonnes (2012: 1.87million metrictonnes). Despite the setbacks in the last quarter the mine continued to sourcecoal from various opencast pits ensuring a steady state of productionthroughout the year.As announced in the Chairman's Statement, we are very pleased to report thatBlack Wattle has concluded an agreement with Blue Nightingale, a South Africanblack owned and managed mining company, to purchase Run of Mine coal from anopencast reserve close to Black Wattle's existing opencast mine. This is thesecond agreement concluded between us and we are very pleased to be continuingour successful relationship. The new reserve consists of approximately2.3million tonnes of coal which can be sold either directly to local powerutilities or transported to Black Wattle where it will be washed and sold intoour existing domestic and export markets.At the end of last year we began relocating machinery to two of our profitableproduction pits. Looking forward into 2014, Black Wattle will plan to increaseproduction from these two areas as well as begin the development of the newreserve at Blue Nightingale.Main trends/marketsInternational coal prices continued to weaken. At the beginning of 2013, theaverage weekly price of Free on Board (FOB) Coal from Richards Bay CoalTerminal (API4) was $89. By the end of the first half of the year the price hadweakened to under $75 where it remained range bound for most of the rest of theyear, a far cry from the prices achieved above $120 two years previously in2011. A depreciation in the South African Rand against the US Dollar has helpedoffset this decline but since the beginning of 2013 to date we have seen only amarginal increase in the Rand export coal price.Health, Safety & Environment (HSE)Black Wattle is committed to creating a safe and healthy working environmentfor its employees and the health and safety of our employees is of the utmostimportance.HSE performance in 2013:• No new cases of Occupational Diseases were recorded.• Zero claims for the Compensation for Occupational Diseases were submitted.• No machines operating at Black Wattle exceeded the regulatory noise level.• Black Wattle Colliery recorded one Lost time Injury during 2013.In addition to the required personnel appointments and assignment of directhealth and safety responsibilities on the mine, a system of HazardIdentification and Risk Assessments has been designed, implemented andmaintained at Black Wattle.Health and Safety training is conducted on an ongoing basis. We are pleased toreport all employees to date have received training in hazard identificationand risk assessment in their work areas.A medical surveillance system is also in place which provides management withinformation used in determining measures to eliminate, control and minimiseemployee health risks and hazards and all Occupational Health hazards aremonitored on an ongoing basis.Various systems to enhance the current HSE strategy have been introduced asfollows:• In order to improve hazard identification before the commencing of tasks,mini risk assessment booklets have been distributed to all mine employees andlong term contractors on the mine.• A Job Safety Analysis form has been introduced to ensure effectiveidentification of hazards in the workplace.• In order to improve the current reporting practice of incidents on the mine,initial reporting of incidents booklets were handed out to all employees andcontractors.• In order to capture and record investigation findings from incidents, anincident recording sheet was introduced to line management and contractors.• Black Wattle Colliery utilises ICAM (Incident cause analysis method).• Hazard Identification and Risk Assessment training was given to all levels ofemployees, line management, Heads of Departments, contractor representativesand contractor employees.• Ongoing training on conveyor belt operation is being conducted with allemployees involved with this discipline.Environment Management ProgrammeUnder the terms of the mine's Environmental Management Programme approved bythe Department of Mineral Resource ("DMR"), Black Wattle undertakes a host ofenvironmental protection activities to ensure that the approved EnvironmentalManagement Plan is fully implemented. In addition to these routine activities,Black Wattle regularly carries out environmental monitoring activities on andaround the mine, including evaluation of ground water quality, air quality,noise and lighting levels, ground vibrations, air blast monitoring, andassessment of visual impacts.Black Wattle is fully compliant with the regulatory requirements of theDepartment of Water Affairs and Forestry and has an approved and externallyaudited water use licence.Black Wattle Colliery has substantially improved its water management byerecting and upgrading all its pollution control dams in consultation with theDepartment of Water Affairs and Forestry.A performance assessment audit was conducted to verify compliance to ourEnvironmental Management Programme and no significant deviations were found.Black Wattle Colliery Social and Labour Plan (SLP) progressBlack Wattle Colliery is committed to true transformation and empowerment aswell as poverty eradication within the surrounding and labour providingcommunities.Black Wattle is committed to providing opportunities for the sustainablesocio-economic development of its stakeholders, such as:• Employees and their families, through Skills Development, EducationDevelopment, Human Resource Development, Empowerment and ProgressionProgrammes.• Surrounding and labour sending communities, through Local EconomicDevelopment, Rural and Community Development, Housing and Living Condition,Enterprise Development and Procurement Programmes; and• Empowerment partners, through Broad-Based Black Economic Empowerment (BBBEE)and Joint Ventures with Historically Disadvantaged South African (HDSA) newmining entrants and enterprises.• The Company engages in ongoing consultation with its stakeholders to developstrong company-employee relationships, strong company-community relationshipsand strong company-HDSA enterprise relationships.The key focus areas in terms of the detailed SLP programmes were updated asfollows:• New implementation action plans, projects, targets and budgets wereestablished through regular workshops with all stakeholders.• A comprehensive desktop socio-economic assessment was undertaken on baselinedata of the Steve Tshwete Local Municipality (STLM) and Nkangala DistrictMunicipality (NDM).• The current Black Wattle Colliery Local Economic Development (LED) programmeswere upgraded, and new LED projects were selected in consultation with the keystakeholders from the STLM.• An appropriate forum was establishedon the mine and a process initiated forthe consultation, empowerment and participation of the employee representativesin the Black WattleColliery SLP process.• Black Wattle Colliery has concluded extensive work on various Agriculturalprojects as well as the E-Bag Recycling projects. The E-Bag Recycling projectaims to minimize the environmental impact of post-consumer PolyethyleneTerephthalate plastic (PET) on the South African landscape. The project wasawarded the PET Entrepreneur award for 2013 and the project was awarded a newbailing machine as part of the award. An additional piece of ground has beenidentified to extend the project to a different area within the Mhluzi Townshipnearby to Black Wattle.• Various upgrades were initiated at the Evergreen School nearby to BlackWattle including upgrades to the roof, classrooms and outer areas.ProcurementIn compliance with the Mining Charter and the Mineral and Petroleum ResourceDevelopment Act, Black Wattle has implemented a BBBEE-focussed procurementpolicy which strongly encourages our suppliers to establish and maintain BBBEEcredentials. At present, BBBEE companies provide approximately 80 percent ofBlack Wattle's equipment and services. We closely monitor our monthlyexpenditure and welcome potential BBBEE suppliers to compete for equipment andservice contracts at Black Wattle. Black Wattle also sells much of its coalproducts to empowered companies.Black Wattle Colliery is proud to announce that we are a level 5 BBBEEcontributor.Employment in South AfricaAs part of Black Wattle's commitment to the South African government MiningCharter, the Company seeks to:• Expand opportunities for historically disadvantaged South Africans (HDSAs),including women, to enter the mining and minerals industry and benefit from theextraction and processing of the country's resources;• Utilise the existing skills base for the empowerment of HDSAs; and• Expand the skills base of HDSAs in order to serve the community.In addition Black Wattle is committed to achieving the goals of the SouthAfrican Employment Equity Act and is pleased to report the following:• Black Wattle Colliery has exceeded the 10 percent women in management andcore mining target.• Black Wattle Colliery has achieved 18.5 percent women in core mining.• 94 percent of the women at Black Wattle Colliery are HDSA females.In terms of staff training some highlights for 2013 were:• 18 employees were trained in ABET (Accreditation Board for Engineering andTechnology) level one;• An additional 4 disabled women have started training on ABET level one andtwo; and• Plans have been put in place for 2014 for a further 11 employees to betrained on ABET level one, two or three and 1 employee will be trained on ABETlevel four.ProspectsManagement continue to remain confident in the ability to achieve significantvalue from our existing South African mining operations and in acquiring anddeveloping new coal reserves, in partnership with our BEE partners.As a result, I look forward to the coming year with confidence.Andrew HellerManaging Director17 April 2014STRATEGIC REPORTRISK & PERFORMANCEThe directors present the Strategic Report of the Company for the year ending31 December 2013. The aim of the Strategic report is to provide shareholderswith the ability to assess how the Directors have performed their duty topromote the success of the Company for the collective benefit of shareholders.Business reviewThe Chairman's Statement and the Mining Review which form part of the StrategicReport on the preceding pages 2 to 7 give a comprehensive and fair review ofthe group's activities during the past year and prospects for the forthcomingyear.Principal activity, strategy & business modelThe Company carries on business as a mining company and its principal activityis coal mining in South Africa. The Company's strategy is to create and deliverlong terms sustainable value to our stakeholders through our business modelwhich can be broken down into four key areas:• acquiring and securing additional coal reserves in South Africa• coal mining• coal washing• coal transportation and marketingIn addition to the four key areas outlined above, we seek to balance the highrisk of our mining operations with a dependable cash flow from our UK propertyinvestment operations. The Company invests in retail property across the UK.The UK property portfolio is managed by London & Associated Properties PLCwhose responsibility is to actively manage the portfolio to improve rentalincome and thus enhance the value of the portfolio over time.Risk & uncertaintiesCoal price risk: The group's mining operational earnings are largely dependenton movements in the coal price.Coal washing: The group's mining operation's earnings are highly sensitive tocoal washing, therefore a stoppage or disruption to the process couldsignificantly impact earnings. However, there is scope to raise earningssubstantially if the yield from the washing process is improved evenmarginally.Mining risk: Attached to mining there are inherent health and safety risks. Anysuch safety incidents disrupt operations, and can slow or even stop production.The group has a comprehensive Health and Safety programme in place to mitigatethis. As with many mining operations, the reserve that is mined has the risk ofnot having the qualities and accessibility expected from geological andenvironmental analysis.Currency risk: The group's South African operations are sensitive to currencymovements, especially those between the South African Rand, US Dollar andBritish Pound.New reserves and mining permissions: The acquisition of additional reserves,permissions to mine and new mining opportunities in South Africa generally arecontingent on a number of factors outside of the group's control, e.g. approvalby the Department of Mineral Resources and the Department of Water Affairs andForestry.Regulatory risk: The group's South African operations are subject to thegovernment Mining Charter and scorecard which primarily seeks to:• Promote equitable access to South Africa's mineral resources for all peoplein South Africa;• Expand opportunities for historically disadvantaged South Africans (HDSAs),including women, to enter the mining and minerals industry and benefit from theextraction and processing of the country's resources;• Utilise the existing skills base for the empowerment of HDSAs;• Expand the skills base of HDSAs in order to serve the community;• Promote employment and the social and economic welfare of mining communitiesand areas supplying mining labour; and• Promote beneficiation of South Africa's mineral commodities beyond mining andprocessing, including the production of consumer goods.The group continues to make good progress towards meeting the Charterrequirements. However any regulatory changes to these, or failure to meetexisting targets, could adversely affect the mine's ability to retain itsmining rights in South Africa.Transport risk: At present the government owned Transnet Freight Rail (TFR) isthe sole rail freight provider for coal in South Africa. The group's SouthAfrican operations are therefore reliant on TFR for delivery of its exportquality coal directly or indirectly via the Southern African ports to its endcustomers.Power supply risk: The current utility provider for power supply in SouthAfrica is the government run Eskom. Eskom continues to undergo capacityproblems resulting in power cuts and lack of provision of power supply to newprojects. The group's mining operations have to date not been affected by powercuts.Flooding risk: The group's mining operations are susceptible to seasonalflooding which could disrupt production. Management monitors water levels on anongoing basis and various projects have been completed, including theconstruction of additional dams, to mitigate this risk.Environmental risk: The group's South African mining operations are required toadhere to local environmental regulations. Details of the groups EnvironmentManagement Programme are disclosed in the Mining Review on page 6.Health & Safety risk: The group's South African mining operations are requiredto adhere to local Health and Safety regulations. Details of the group's Healthand Safety Programme are disclosed in the Mining Review on page 5.Labour risk: The group's mining operations and coal washing plant facility arelabour intensive and unionised. Any labour disputes, strikes or wagenegotiations may disrupt production and impact earnings.Cashflow risk: We seek to balance the high risk of our mining operations with adependable cash flow from our UK property investment operations. Fluctuationsin property values, which are reflected in the Consolidated Income Statementand Balance Sheet, are dependent on an annual valuation of commercialproperties. A fall in UK commercial property can have a marked effect on theprofitability and the net asset value of the group. However, due to the longterm nature of the leases, the effect on cash flows from property investmentactivities will remain stable as long as tenants remain in operation.Key Performance IndicatorsThe Key Performance Indicators for the Group are:                                                                  2013   2012                                                                  £'000  £'000For South African mining activities:Earnings before interest, tax, depreciation, and amortisation     2,268  4,520(EBITDA)For our UK property investment operations:Net property valuation                                            11,559 11,612For the Group:Profit before tax                                                 102    2,190Earnings before interest, tax, depreciation, and amortisation     3,039  4,684(EBITDA)Financial positionIn the UK discussions are continuing with the Royal Bank of Scotland ("RBS") onthe renewal of the current UK banking facilities, being a £5million termfacility and a £1million overdraft. The bank has previously agreed to anextension, from its original expiry date of 31 December 2012, to 30th June2013. Whilst discussions are on-going, no further extension has been formalisedas the terms for a new facility are being negotiated. The directors considerthat with the asset security available, the level of facilities required shouldbe readily available and consider that a new loan will be agreed, either withRBS or an alternative provider, in the near future.The property portfolio was externally valued at 31 December 2013 and the valueof UK investment properties attributable to the group at year end was £11.6million (2012: £11.6million).In South Africa, an increase in the structured trade finance facility fromR60million (South African Rand) to R80million was signed by Black WattleColliery (pty) Limited ("Black Wattle") in October 2013 with Absa Bank Limited,a South African subsidiary of Barclays Bank PLC. The facility is renewedannually at 30 June and is secured against inventory, debtors and cash that areheld in the group's South African operations. This facility comprises of aR60million revolving loan to cover the working capital requirements of thegroup's South African operations, and a R20million loan facility to coverguarantee requirements related to the group's South African mining operations.Subsequent to year end Black Wattle breached one of the covenants of thefacility related to the accounting net asset value of the company. Managementhave been in discussions with the bank to rectify the breach and have no reasonto believe the breach will not be rectified or affect the ongoing use of thefacility or that the facility will not be renewed at the appropriate times.The group's cash and cash equivalents (excluding bank overdrafts) at year endwere £1.7million (2012: £1.8million). The net assets of the group at the yearend were £17.0million (2012: £17.8million). During 2012 the Company lent £2million to Dragon Retail Properties Limited, our joint venture company at6.875 per cent annual interest. This money is repayable on demand and notincluded in the groups cash and cash equivalents.The group has considerable financial resources available at short noticeincluding cash, held for trading investments and its £2m loan to Dragon RetailProperties Limited.Further details on the group's financial position are stated in theConsolidated Balance Sheet on page 46.CashflowThe Company at year end had a net amount owing of cash and cash equivalents(including bank overdrafts) of £1.3 million (2012: net positive balance of £0.7million). Details on the group's cashflow position are stated in theConsolidated Cashflow Statement on page 49. Cash and cash equivalents as perthe Cashflow Statement comprise Cash and cash equivalents as presented in thebalance sheet and bank overdrafts (secured).EnvironmentThe group's UK activities are principally property investment whereby weprovide premises which are rented to retail businesses. We seek to providethose tenants with good quality premises from which they can operate in anefficient and environmentally sound manner.Further information relating to the Company's position on the Environment andEnvironmental Management issues related to our South African operations can befound in The Mining Review which forms part of the Strategic Report on thepreceding pages 5 to 7.EmploymentEmployment terms and conditions for our employees based at our UK office and atour South African mining operations are regulated by and are operated incompliance with all relevant prevailing national and local legislation.Employment terms and conditions provided to mining staff meet or exceed thenational average.Further information relating to the Company's position on Employment issues canbe found in The Mining Review which forms part of the Strategic Report on thepreceding pages 5 to 7.Green House Gas reportingWe have reported on all of the emission sources required under the CompaniesAct 2006 (Strategic Report and Directors' Reports) Regulations.The group has employed the Operational Control boundary definition to outlineour carbon footprint boundary. Included within that boundary are Scope 1 & 2emissions from coal extraction and onsite mining processes for Black WattleColliery. We have not measured and reported on our Scope 3 emissions sources.Excluded from the footprint boundary are emission sources considered nonmaterial by the group, including refrigerant use onsite.We have used the GHG Protocol Corporate Accounting and Reporting Standard(revised edition) and a methodology adapted from the Intergovernmental Panel onClimate Change (2006) to calculate fugitive emissions from surface coal miningactivities. Further emission factors were used from UK Government's GHGConversion Factors for Company Reporting 2014.The Group's carbon footprint:                                                                        2013                                                                        CO2e                                                                        TonnesEmissions source:Scope 1 Combustion of fuel & operation of facilities                    24,862Scope 2 Emissions from coal mining activities                           31,014Scope 3 Electricity, heat, steam and cooling purchased for own use      9,947Total                                                                   65,823Intensity:Intensity 1 Tonnes of CO2 per pound sterling of revenue                 0.00188Intensity 2 Tonnes of CO2 per tonne of coal produced                    0.0372Social, community and human rights issuesThe Company believes that it is in the shareholders' interests to considersocial and human rights issues when conducting business activities both in theUK and South Africa. Further information relating to the Company's position onsocial and community issues can be found in the Mining Review which form partof the Strategic Report on the preceding pages 5 to 7.Directors, employees and gender representationAt the year end the group had 6 directors(6 male, 0 female), 7 senior managers(6 male, 1 female) and 227 employees(174 male, 50 female).Future prospectsThe group seeks to expand its operations in South Africa through theacquisition of additional coal reserves. Further information on the outlook ofthe Company can be found in both the Chairman's Statement on page 2 and theMining Review on page 5 which form part of the Strategic Report.Signed on behalf of the Board of DirectorsGarrett CaseyFinance Director17 April 2014Management team1 Sir Michael HellerChairmanBisichi Mining PLC2 Andrew HellerManaging DirectorBisichi Mining PLC,Managing DirectorBlack Wattle Colliery3 Robert CorryChairmanBlack Wattle Colliery4 Christopher JollSenior Independent Director,Chairman Auditand RemunerationCommittees5 Garrett CaseyFinance DirectorBisichi Mining PLC,DirectorBlack Wattle Colliery6 Robert GroblerDirector of MiningBisichi Mining PLC,DirectorBlack Wattle Colliery7 Ethan DubeDirectorBlack Wattle Colliery8 Nico SerfonteinMine ManagerBlack Wattle CollieryDirectors & advisors\* Sir Michael HellerMA, FCA (Chairman)Andrew R HellerMA, ACA(Managing Director)Garrett CaseyCA (SA)(Finance Director)Robert GroblerPr Cert Eng(Director of mining)O+ Christopher A JollMA (Non-executive)Christopher Joll was appointed a Director on 1 February 2001.He has held a number of non-executive directorships of quoted and un-quotedcompanies and is currently senior partner of MJ2 Events LLP an event managementbusiness.O John A SibbaldBL (Non-executive)John Sibbald has been a Director since 1988. After qualifying as a CharteredAccountant he spent over 20 years in stockbroking, specialising in mining andinternational investment.Secretary & Registered officeHeather A Curtis ACIS24 Bruton PlaceLondon W1J 6NEBlack Wattle CollieryDirectorsRobert Corry (Chairman)Andrew Heller (Managing Director)Ethan DubeRobert GroblerGarrett CaseyDirector of PropertyMike J Dignan FRICSCompany RegistrationCompany registration No. 112155 (Incorporated in England and Wales)[\[email protected\]](/cdn-cgi/l/email-protection)\* Member of the nomination committee+ Senior independent directorO Member of the audit, nomination and remuneration committees.AuditorBDO LLPPrincipal bankersUnited KingdomBarclays Bank PLCNational Westminster Bank PLCInvestec PLCSouth AfricaABSA Bank (SA)First National Bank (SA)Standard Bank (SA)Corporate solicitorsUnited KingdomOlswang LLP, LondonMemery Crystal, LondonFladgate LLP, LondonSouth AfricaTugendhaft Wapnick Banchetti and Partners, JohannesburgHogan Lovells, JohannesburgBrandmullers Attorneys, MiddelburgStockbrokersShore Capital & Corporate LtdRegistrars and transfer officeCapita Asset ServicesThe Registry34 Beckenham RoadBeckenhamKent, BR3 4TUTelephone 0871 664 0300(Calls cost 10p per minute + network extras) or+44 208 639 3399 for overseas callerswww.capitaregistrars.comEmail: [\[email protected\]](/cdn-cgi/l/email-protection) year summary                                           2013   2012   2011    2010    2009                                           £'000  £'000  £'000   £'000   £'000Consolidated income statementRevenue                                    35,105 35,962 29,909  32,824  29,016Operating profit/ (loss)                   123    2,568  (1,328) (1,705) 4,892Profit/ (loss) before tax                  102    2,190  (1,450) (1,813) 5,003Trading Income                             17     2,808  (1,210) (2,209) 4,698Revaluation Income                         85     (618)  (240)   396     305Profit before interest, taxation and       3,039  4,684  1,150   770     7,534depreciationConsolidated balance sheetInvestment properties                      11,559 11,612 12,068  12,110  11,865Fixed asset investments                    4,370  4,309  2,727   3,757   3,755                                           15,929 15,921 14,795  15,867  15,620Current asset investments                  822    787    2,515   605     510                                           16,751 16,708 17,310  16,472  16,130Other assets less liabilities less         (123)  607    (537)   1,482   3,170non-controlling interestsTotal equity attributable to equity        16,628 17,315 16,773  17,954  19,300shareholdersNet assets per ordinary share              156.3p 164.0p 158.9p  171.8p  184.7pDividend per share                         4.00p  4.00p  4.00p   4.00p   4.00pgovernancefinancial calendar11 June    Annual General Meeting    18 November Second interim management2014                                 2014        statement1 August   Payment of final dividend Late April  Announcement of results for2014       for 2013 (if approved)    2015        year ending 31 December 2014Late       Announcement of half-yearAugust     results to 30 June 20142014governancedirectors' reportThe directors submit their report together with the audited financialstatements for the year ended 31 December 2013.Activities and review of businessThe group continues its mining activities. Income for the year was derived fromsales of coal from its South African operations. The group also has a propertyinvestment portfolio for which it receives rental income.The results for the year and state of affairs of the group and the company at31 December 2013 are shown on pages 44 to 84 and in the Strategic Report onpages 2 to 14. Future developments and prospects are also covered in theStrategic Report. Over 99 per cent. of staff are employed in the South Africancoal mining industry - employment matters and health and safety are dealt within the Strategic Report.The management report referred to in the Director's responsibilities statementencompasses this Directors' Report and Strategic Report on pages 2 to 14.Corporate responsibilityEnvironmentThe environmental issues of the group's South African coal mining operationsare covered in the Strategic Report on pages 5 to 14.The group's UK activities are principally property investment whereby premisesare provided for rent to retail businesses.The group seeks to provide those tenants with good quality premises from whichthey can operate in an efficient and environmentally friendly manner. Whereverpossible, improvements, repairs and replacements are made in an environmentallyefficient manner and waste re-cycling arrangements are in place at all thecompany's locations.Greenhouse Gas EmissionsDetails of the group's greenhouse gas emissions for the year ended 31 December2013 can be found on page 14 of the Strategic Report.EmploymentThe group's policy is to attract staff and motivate employees by offeringcompetitive terms of employment. The group provides equal opportunities to allemployees and prospective employees including those who are disabled. TheStrategic Report gives details of the group's activities and policiesconcerning the employment, training, health and safety and community supportand social development concerning the group's employees in South Africa.Dividend policyAn interim dividend for 2013 of 1p was paid on 1 February 2014 (Interim 2012:1p). The directors recommend the payment of a final dividend for 2013 of 4p perordinary share (2012: 3p) making a total dividend for 2013 of 4p (2012: 4p).Subject to shareholder approval, the total dividend per ordinary share for 2013will be 4p per ordinary share.The final dividend will be payable on Friday 1 August 2014 to shareholdersregistered at the close of business on 4 July 2014.Investment propertiesThe investment property portfolio is stated at its open market value of £11,559,000, at 31 December 2013 (2012: £11,612,000) as valued by professionalexternal valuers. The open market value of the company's share of investmentproperties included within its investments in joint ventures is £3,599,000(2012: £3,336,000).Financial instrumentsNote 21 to the financial statements sets out the risks in respect of financialinstruments. The Board reviews and agrees overall treasury policies, delegatingappropriate authority to the managing director. Financial instruments are usedto manage the financial risks facing the group - speculative transactions arenot permitted. Treasury operations are reported at each Board meeting and aresubject to weekly internal reporting.DirectorsThe directors of the company for the whole year were Sir Michael Heller, A RHeller, G J Casey, C A Joll, R J Grobler (a South African citizen), and J ASibbald.The director retiring by rotation is Mr G J Casey who offers himself forre-election.Mr G J Casey has been an executive director of the company since 2010. He is achartered accountant and has a contract of employment determinable at threemonths notice. The board recommends the re-election of G J Casey.No director had any material interest in any contract or arrangement with thecompany during the year other than as shown in this report.Directors' shareholdingsThe interests of the directors in the shares of the company, including familyand trustee holdings where appropriate, are shown on page 32 of the AnnualRemuneration Report.Substantial interestsThe following have advised that they have an interest in 3 per cent. or more ofthe issued share capital of the company as at 15 April 2014:London & Associated Properties PLC - 4,432,618 shares representing 41.52 percent. of the issued capital. (Sir Michael Heller is a director and shareholderof London & Associated Properties PLC).Sir Michael Heller -         330,117 shares representing 3.09 per cent. of the                             issued capital.A R Heller -                 785,012 shares representing 7.35 per cent. of the                             issued capital.Cavendish Asset Management   1,569,110 shares representing 14.7 per cent. ofLimited -                    the issued share capital.James Hyslop -               341,126 shares representing 3.20 per cent. of the                             issued share capital.Disclosure of information to auditorThe directors in office at 31 December 2013 have confirmed that they are awarethat there is no relevant audit information of which the auditor is unaware.Each of the directors has confirmed that they have taken all reasonable stepsthey ought to have taken as directors to make themselves aware of any relevantaudit information and to establish that it has been communicated to theauditor.Corporate governanceThe company has adopted the Corporate Governance Code for Small and Mid-SizeQuoted Companies (the QCA Code) published by the Quoted Companies Alliance. TheQCA Code provides governance guidance to small and mid-size quoted companies.The paragraphs below set out how the company has applied this guidance duringthe year. The company has complied with the QCA Code throughout the year.Principles of corporate governanceThe group's Board appreciates the value of good corporate governance not onlyin the areas of accountability and risk management, but also as a positivecontribution to business prosperity. The Board endeavours to apply corporategovernance principles in a sensible and pragmatic fashion having regard to thecircumstances of the group's business. The key objective is to enhance andprotect shareholder value.Board structureDuring the year the Board comprised the executive chairman, the managingdirector, two other executive directors and two non-executive directors. Theirdetails appear on page 19. The Board is responsible to shareholders for theproper management of the group. The Directors' responsibilities statement inrespect of the accounts is set out on page 42. The non-executive directors havea particular responsibility to ensure that the strategies proposed by theexecutive directors are fully considered. To enable the Board to discharge itsduties, all directors have full and timely access to all relevant informationand there is a procedure for all directors, in furtherance of their duties, totake independent professional advice, if necessary, at the expense of thegroup. The Board has a formal schedule of matters reserved to it and meetsbi-monthly.The Board is responsible for overall group strategy, approval of major capitalexpenditure projects and consideration of significant financing matters.The following Board committees, which have written terms of reference, dealwith specific aspects of the group's affairs:• The nomination committee is chaired by Christopher Joll and comprises thenon-executive directors and the executive chairman. The committee isresponsible for proposing candidates for appointment to the Board, havingregard to the balance and structure of the Board. In appropriate casesrecruitment consultants are used to assist the process. Each director issubject to re-election at least every three years.• The remuneration committee is responsible for making recommendations to theBoard on the company's framework of executive remuneration and its cost. Thecommittee determines the contractual terms, remuneration and other benefits foreach of the executive directors, including performance related bonus schemes,pension rights and compensation payments. The Board itself determines theremuneration of the non-executive directors. The committee comprises thenon-executive directors. It is chaired by Christopher Joll. The company'sexecutive chairman is normally invited to attend meetings. The report ondirectors' remuneration is set out on pages 30 to 34.• The audit committee comprises the two non-executive directors and is chairedby Christopher Joll. Its prime tasks are to review the scope of external audit,to receive regular reports from the company's auditor and to review thehalf-yearly and annual accounts before they are presented to the Board,focusing in particular on accounting policies and areas of management judgmentand estimation. The committee is responsible for monitoring the controls whichare in force to ensure the integrity of the information reported to theshareholders. The committee acts as a forum for discussion of internal controlissues and contributes to the Board's review of the effectiveness of thegroup's internal control and risk management systems and processes. Thecommittee also considers annually the need for an internal audit function. Itadvises the Board on the appointment of external auditors and on theirremuneration for both audit and non-audit work, and discusses the nature andscope of the audit with the external auditors. The committee, which meetsformally at least twice a year, provides a forum for reporting by the group'sexternal auditors. Meetings are also attended, by invitation, by the companychairman, managing director and finance director.The audit committee also undertakes a formal assessment of the auditors'independence each year which includes:• a review of non-audit services provided to the group and related fees;• discussion with the auditors of a written report detailing all relationshipswith the company and any other parties that could affect independence or theperception of independence;• a review of the auditors' own procedures for ensuring the independence of theaudit firm and partners and staff involved in the audit, including the regularrotation of the audit partner; and• obtaining written confirmation from the auditors that, in their professionaljudgement, they are independent.The audit committee report is set out on page 40.An analysis of the fees payable to the external audit firm in respect of bothaudit and non-audit services during the year is set out in Note 4 to thefinancial statements.Performance evaluation - board, board committees and directorsThe performance of the board as a whole and of its committees and thenon-executive directors is assessed by the chairman and the managing directorand is discussed with the senior independent director. Their recommendationsare discussed at the nomination committee prior to proposals for re-electionbeing recommended to the Board. The performance of executive directors isdiscussed and assessed by the remuneration committee. The senior independentdirector meets regularly with the chairman and both the executive andnon-executive directors individually outside of formal meetings. The directorswill take outside advice in reviewing performance but have not found thisnecessary to date.Independent directorsThe senior independent non-executive director is Christopher Joll. The otherindependent non-executive director is John Sibbald.Christopher Joll has been a non-executive director for over ten years and JohnSibbald has been a non-executive director for over twenty years. The Boardencourages Christopher Joll and John Sibbald to act independently. The boardconsiders that their length of service and connection with the company's publicrelations advisers, does not, and has not, resulted in their inability orfailure to act independently. In the opinion of the Board, Christopher Joll andJohn Sibbald continue to fulfil their role as independent non-executivedirectors.The independent directors regularly meet prior to Board meetings to discusscorporate governance issues.Board and board committee meetingsThe number of meetings during 2013 and attendance at regular Board meetings andBoard committees was as follows:                                             Meetings held   Meetings AttendedSir Michael Heller Board                     5               5                   Nomination committee      1               1A R Heller         Board                     5               5                   Audit committee           2               2G J Casey          Board                     5               4                   Audit committee           2               2R J Grobler        Board                     5               2C A Joll           Board                     5               5                   Audit committee           2               2                   Nomination committee      1               1                   Remuneration committee    1               1J A Sibbald        Board                     5               5                   Audit committee           2               2                   Nomination committee      1               1                   Remuneration committee    1               1Internal controlThe directors are responsible for the group's system of internal control andreview of its effectiveness annually. The Board has designed the group's systemof internal control in order to provide the directors with reasonable assurancethat its assets are safeguarded, that transactions are authorised and properlyrecorded and that material errors and irregularities are either prevented orwould be detected within a timely period. However, no system of internalcontrol can eliminate the risk of failure to achieve business objectives orprovide absolute assurance against material misstatement or loss.The key elements of the control system in operation are:• The Board meets regularly with a formal schedule of matters reserved to itfor decision and has put in place an organisational structure with clearlydefined lines of responsibility and with appropriate delegation of authority;• There are established procedures for planning, approval and monitoring ofcapital expenditure and information systems for monitoring the group'sfinancial performance against approved budgets and forecasts;• UK property and financial operations are closely monitored by members of theBoard and senior managers to enable them to assess risk and address theadequacy of measures in place for its monitoring and control. The South Africanoperations are closely supervised by the UK based executives through daily,weekly and monthly reports from the directors and senior officers in SouthAfrica. This is supplemented by monthly visits by the UK based finance directorto the South African operations which include checking the integrity ofinformation supplied to the UK. The directors are guided by the internalcontrol guidance for directors issued by the Institute of Chartered Accountantsin England and Wales.During the period, the audit committee has reviewed the effectiveness ofinternal control as described above. The Board receives periodic reports fromits committees.There are no significant issues disclosed in the Annual Report for the yearended 31 December 2013 (and up to the date of approval of the report)concerning material internal control issues. The directors confirm that theBoard has reviewed the effectiveness of the system of internal control asdescribed during the period.Communication with shareholdersCommunication with shareholders is a matter of priority. Extensive informationabout the group and its activities is given in the Annual Report, which is madeavailable to shareholders. Further information is available on the company'swebsite, www.bisichi.co.uk. There is a regular dialogue with institutionalinvestors. Enquiries from individuals on matters relating to theirshareholdings and the business of the group are dealt with informatively andpromptly.Takeover directiveThe company has one class of share capital, ordinary shares. Each ordinaryshare carries one vote. All the ordinary shares rank pari passu. There are nosecurities issued in the company which carry special rights with regard tocontrol of the company. The identity of all substantial direct or indirectholders of securities in the company and the size and nature of their holdingsis shown under the "Substantial interests" section of this report above.A relationship agreement dated 15 September 2005 (the "Relationship Agreement")was entered into between the company and London & Associated Properties PLC("LAP") in regard to the arrangements between them whilst LAP is a controllingshareholder of the company. The Relationship Agreement includes a provisionunder which LAP has agreed to exercise the voting rights attached to theordinary shares in the company owned by LAP to ensure the independence of theBoard of directors of the company.Other than the restrictions contained in the Relationship Agreement, there areno restrictions on voting rights or on the transfer of ordinary shares in thecompany. The rules governing the appointment and replacement of directors,alteration of the articles of association of the company and the powers of thecompany's directors accord with usual English company law provisions. Eachdirector is re-elected at least every three years. The company is not party toany significant agreements that take effect, alter or terminate upon a changeof control of the company following a takeover bid. The company is not aware ofany agreements between holders of its ordinary shares that may result inrestrictions on the transfer of its ordinary shares or on voting rights.There are no agreements between the company and its directors or employeesproviding for compensation for loss of office or employment that occurs becauseof a takeover bid.The Bribery Act 2010The Bribery Act 2010 came into force on 1 July 2011, and the Board took theopportunity to implement a new Anti-Bribery Policy. All directors and staffcontinue to complete an e-learning training course on a bi-annual basis. Thecompany is committed to acting ethically, fairly and with integrity in all itsendeavours and compliance of the code is closely monitored.Annual General MeetingThe annual general meeting of the company ("Annual General Meeting") will beheld at 24 Bruton Place, London W1J 6NE Wednesday, 11 June 2014 at 11.00 a.m.Resolutions 1 to 8 will be proposed as ordinary resolutions. More than 50 percent. of shareholders' votes cast must be in favour for those resolutions to bepassed. Resolutions 9 to 11 will be proposed as special resolutions. At least75 per cent. of shareholders' votes cast must be in favour for thoseresolutions to be passed.The directors consider that all of the resolutions to be put to the meeting arein the best interests of the company and its shareholders as a whole. The Boardrecommends that shareholders vote in favour of all resolutions.Please note that the following paragraphs are only summaries of certainresolutions to be proposed at the Annual General Meeting and not the full textof the resolutions. You should therefore read this section in conjunction withthe full text of the resolutions contained in the notice of Annual GeneralMeeting.Directors' authority to allot shares (Resolution 8)In certain circumstances it is important for the company to be able to allotshares up to a maximum amount without needing to seek shareholder approvalevery time an allotment is required. Paragraph 8.1.1 of Resolution 8 would givethe directors the authority to allot shares in the company and grant rights tosubscribe for, or convert any security into, shares in the company up to anaggregate nominal value of £355,894. This represents approximately 1/3 (onethird) of the ordinary share capital of the company in issue (excludingtreasury shares) at 15 April 2014 (being the last practicable date prior to thepublication of this Directors' Report). Paragraph 8.1.2 of Resolution 8 wouldgive the directors the authority to allot shares in the company and grantrights to subscribe for, or convert any security into, shares in the company upto a further aggregate nominal value of £355,894, in connection with apre-emptive rights issue. This amount represents approximately 1/3 (one third)of the ordinary share capital of the company in issue (excluding treasuryshares) at 15 April 2014 (being the last practicable date prior to thepublication of this Directors' Report).Therefore, the maximum nominal value of shares or rights to subscribe for, orconvert any security into, shares which may be allotted or granted underresolution 8 is £711,788.Resolution 8 complies with guidance issued by the Association of BritishInsurers (ABI).The authority granted by resolution 8 will expire on 31 August 2015 or, ifearlier, the conclusion of the next annual general meeting of the company. Thedirectors have no present intention to make use of this authority. However, ifthey do exercise the authority, the directors intend to follow emerging bestpractice as regards its use as recommended by the ABI.Disapplication of pre-emption rights (Resolution 9)A special resolution will be proposed at the Annual General Meeting in respectof the disapplication of pre-emption rights.Shares allotted for cash must normally first be offered to shareholders inproportion to their existing shareholdings. The directors will, at theforthcoming Annual General Meeting seek power to allot equity securities (asdefined by section 560 of the Companies Act 2006) or sell treasury shares forcash as if the pre-emption rights contained in Section 561 of the Companies Act2006 did not apply:(a) in relation to pre-emptive offers and offers to holders of other equitysecurities if required by the rights of those securities or as the directorsotherwise consider necessary, up to a maximum nominal amount of £355,894 whichrepresents approximately 1/3 (one third) of the ordinary share capital of thecompany in issue (excluding treasury shares) and, in relation to rights issuesonly, up to a maximum additional amount of £355,894 which representsapproximately 1/3 (one third) of the ordinary share capital of the company inissue (excluding treasury shares), in each case as at 15 April 2014 (being thelast practicable date prior to the publication of this Directors' Report); and(b) in any other case, up to a maximum nominal amount of £106,768 whichrepresents approximately 10 per cent. of the ordinary share capital of thecompany in issue (excluding treasury shares) as at 15 April 2014 (being thelast practicable date prior to the publication of this Directors' Report).In compliance with the guidelines issued by the Pre-emption Group, thedirectors will ensure that, other than in relation to a rights issue, no morethan 7.5 per cent. of the issued ordinary shares (excluding treasury shares)will be allotted for cash on a non pre-emptive basis over a rolling three yearperiod unless shareholders have been notified and consulted in advance.The power in resolution 9 will expire when the authority given by resolution 8is revoked or expires.The directors have no present intention to make use of this authority.Notice of General Meetings (Resolution 10)Resolution 10 will be proposed to allow the company to call general meetings(other than an Annual General Meeting) on 14 clear days' notice. A resolutionin the same terms was passed at the Annual General Meeting in 2013. The noticeperiod required by the Companies Act 2006 for general meetings of the companyis 21 days unless shareholders approve a shorter notice period, which cannothowever be less than 14 clear days. Annual General Meetings must always be heldon at least 21 clear days' notice. It is intended that the flexibility offeredby this resolution will only be used for time-sensitive, non-routine businessand where merited in the interests of shareholders as a whole. The approvalwill be effective until the Company's next Annual General Meeting, when it isintended that a similar resolution will be proposed. In order to be able tocall a general meeting on less than 21 clear days' notice, the company mustmake a means of electronic voting available to all shareholders for thatmeeting.Purchase of own Ordinary Shares (Resolution 11)The effect of resolution 11 would be to renew the directors' current authorityto make limited market purchases of the company's ordinary shares of 10 penceeach. The power is limited to a maximum aggregate number of 1,067,683 ordinaryshares (representing approximately 10 per cent. of the company's issued sharecapital as at 15 April 2014 (being the last practicable date prior topublication of this Directors' Report)). The minimum price (exclusive ofexpenses) which the company would be authorised to pay for each ordinary sharewould be 10 pence (the nominal value of each ordinary share). The maximum price(again exclusive of expenses) which the company would be authorised to pay foran ordinary share is an amount equal to 105 per cent. of the average marketprice for an ordinary share for the five business days preceding any suchpurchase.The authority conferred by resolution 11 will expire at the conclusion of thecompany's next annual general meeting or 15 months from the passing of theresolution, whichever is the earlier. Any purchases of ordinary shares would bemade by means of market purchase through the London Stock Exchange. If granted,the authority would only be exercised if, in the opinion of the directors, todo so would result in an increase in earnings per share or net asset value pershare and would be in the best interests of shareholders generally. Inexercising the authority to purchase ordinary shares, the directors may treatthe shares that have been bought back as either cancelled or held as treasuryshares (shares held by the company itself). No dividends may be paid on shareswhich are held as treasury shares and no voting rights are attached to them.As at 15 April 2014 (being the last practicable date prior to the publicationof this Directors' Report) the total number of options to subscribe for newordinary shares in the company was 678,000 shares representing 6.35 per cent.of the company's issued share capital (excluding treasury shares) as at thatdate. Such number of options to subscribe for new ordinary shares wouldrepresent approximately 7.06 per cent. of the reduced issued share capital ofthe company (excluding treasury shares) assuming full use of the authority tomake market purchases sought under resolution 11.DonationsNo political or charitable donations were made during the year (2012:Nil).Going concernThe group's business activities, together with the factors likely to affect itsfuture development are set out in the Chairman's Statement on the precedingpage 2, the Mining Review on pages 5 to 7 and its financial position is set outon page 13 of the Strategic Report. In addition Note 21 to the financialstatements includes the group's treasury policy, interest rate risk, liquidityrisk and hedging profile.The group has considerable financial resources available at short noticeincluding cash, held for trading investments and its £2m loan to Dragon RetailProperties Limited which is repayable on demand. In addition its investmentproperty assets benefit from long term leases with the majority of its tenants.Black Wattle Colliery, its direct mining asset, experienced a reduction inprofitability in the second half of 2013 due to operational issues related totheir mining activates. The directors expect that these operational issues willbe fully overcome by the second half of 2014 and that the market conditionsexperiencedin 2013 will be similar going into 2014.The directors therefore have a reasonable expectation that the mine will returnto acceptable levels of profitability in the second half of 2014. As aconsequence, the directors believe that the group is well placed to manage itsbusiness risks successfully.In October 2013, an increase in the structured trade finance facility fromR60million (South African Rand) to R80million was signed by Black WattleColliery (pty) Limited ("Black Wattle") with Absa Bank Limited, a South Africansubsidiary of Barclays Bank PLC. The facility is renewed annually at 30 Juneand is secured against inventory, debtors and cash that are held in the group'sSouth African operations. This facility comprises of a R60million revolvingloan to cover the working capital requirements of the group's South Africanoperations, and a R20million loan facility to cover guarantee requirementsrelated to the group's South African mining operations. Subsequent to year endBlack Wattle breached one of the covenants of the facility related to theaccounting net asset value of the company. Management have been in discussionswith the bank to rectify the breach and have no reason to believe the breachwill not be rectified or affect the ongoing use of the facility, or that thefacility will not be renewed again at the appropriate times.The group is working with the Royal Bankof Scotland ("RBS") on the renewal of the current UK banking facilities, beinga £5million term facility and a £1million overdraft. The bank has previouslyagreed to an extension, from its original expiry date of 31 December 2012, to30th June 2013. Whilst discussions are on-going, no further extension has beenformalised as the terms for a new facility are being negotiated. The directorsconsider that with the asset security available, the level of facilitiesrequired should be readily available and consider that a new loan will beagreed, either with RBS or an alternative provider, in the near future. As aresult, the Directors believe that the company will have adequate resources tocontinue in operational existence for the foreseeable future and that thecompany is well placed to manage its business risks. Thus they continue toadopt the going concern basis of accounting in preparing the annual financialstatements.By order of the boardHeather CurtisSecretary24 Bruton PlaceLondon W1J 6NE17 April 2014governanceStatement of the Chairman of the remuneration committeeThe remuneration committee presents its report for the year ended 31 December2013, which this year is presented in two parts in accordance with the newregulations.The first part, is the Annual Remuneration Report which details remunerationawarded to directors and non-executive directors during the year. Theshareholders will be asked to approve the Annual Remuneration Report as anordinary resolution (as in previous years) at the AGM in June 2014.The second part, is the Remuneration Policy Report which details theremuneration policy for directors. This policy is subject to a binding vote byshareholders at the AGM in 2014, and if approved will apply for a 3 year periodcommencing 11 June 2014. The policy is very much in line with the previouspolicy although the level of disclosure has increased in accordance with thenew regulations. The remuneration committee reviewed the existing policy anddeemed no changes necessary to the current arrangements.Both of the above reports have been prepared in accordance with The Large andMedium-sized Companies and Groups (Accounts and Reports) (Amendment)Regulations 2013.The Company's auditors, BDO LLP are required by law to audit certaindisclosures and where disclosures have been audited they are indicated as such.Christopher JollChairman - remuneration committee24 Bruton PlaceLondon W1J 6NE17 April 2014governanceAnnual Remuneration ReportThe following information has been audited:Single total figure of remuneration for the year ended 31 December 2013                          Salaries Bonuses Benefits Pension Total   Notional Total                                                            before  value                          and Fees                                           2013                                                            Share   of                                                            options vesting                                                                    Share                                                                    optionsExecutive DirectorsSir Michael Heller        75       -       -        -       75      -        75A R Heller                450      103     31       30      614     -        614G J Casey                 119      75      10       16      220     -        220R Grobler                 142      50      22       7       221     -        221                          786      228     63       53      1,130   -        1,130Non-Executive DirectorsC A Joll\*                 25       -       -        -       25      -        25J A Sibbald\*              2        -       3        -       5       -        5                          27       -       3        -       30      -        30Total                     813      228     66       53      1,160   -        1,160\*Members of the remuneration committee for the year ended 31 December 2013Single total figure of remuneration for the year ended 31 December 2012                          Salaries Bonuses Benefits Pension Total   Notional Total                                                            before  value                          and Fees                                           2012                                                            Share   of                                                            options vesting                                                                    Share                                                                    optionsExecutive DirectorsSir Michael Heller        75       -       -        -       75      -        75A R Heller                350      150     14       30      544     177      721G J Casey                 109      75      9        15      208     -        208R Grobler                 162      -       26       8       196     -        196                          696      225     49       53      1,023   177      1,200Non-Executive DirectorsC A Joll\*                 25       -       -        -       25      -        25J A Sibbald\*              2        -       3        -       5       -        5                          27       -       3        -       30      -        30Total                     723      225     52       53      1,053   177      1,230\*Members of the remuneration committee for the year ended 31 December 2012Summary of directors' terms                                                   Date of   Unexpired  Notice                                                   contract  term       periodExecutive directorsSir Michael Heller                                 November  Continuous 6 months                                                   1972A R Heller                                         January   Continuous 3 months                                                   1994G J Casey                                          June 2010 Continuous 3 monthsR J Grobler                                        April     Continuous 3 months                                                   2008Non-executive directorsC A Joll                                           February  Continuous 3 months                                                   2001J A Sibbald                                        October   Continuous 3 months                                                   1988Pension schemes and incentivesThree (2012: three) directors have benefits under money purchase pensionschemes. Contributions in 2013 were £53,000 (2012: £53,000), see table above.Scheme interests awarded during the yearNo scheme options were awarded during the year ended 31 December 2013.Share option schemesThe Company currently has four "Unapproved" Share Option Schemes which are notsubject to HM Revenue and Customs (HMRC) approval. The "Second Scheme" wasapproved by shareholders on 23 June 2005, options having been provisionallygranted under it on 23 September 2004. The "2006 Scheme" was approved byshareholders on 29 June 2006, and the "2010 Scheme" was approved byshareholders on 7 June 2011. The "2012 Scheme" was approved by the remunerationcommittee of the Company on 28 September 2012 in replacement of a scheme whichwas adopted on 15 June 1999 (the "First Scheme"). Existing options overordinary shares granted under the First Scheme lapsed on 29 September 2012.Replacement options could not be granted under the First Scheme as the periodfor new grants under the scheme had expired. Accordingly, the remunerationcommittee approved the adoption by the Company of the 2012 Scheme with similarrules to the First Scheme. All available options under each of the Schemes havebeen granted.                              Number of                              share options                              Option 1       Options 31       Exercisable Exercisable                                     January                              price\*         granted December from        to                                     2013    in                                                     2013                                             2013Second SchemeA R Heller                    149p   80,000  -       80,000   23/9/2007   22/9/2014The 2006 SchemeA R Heller                    237.5p 275,000 -       275,000  4/10/2009   3/10/2016Employee                      237.5p 50,000  -       50,000   4/10/2009   3/10/2016The 2010 SchemeG J Casey                     202.5p 80,000  -       80,000   31/08/2013  30/08/2020The 2012 SchemeA R Heller                    34p    233,000 -       233,000  01/10/2012  30/09/2022\*Middle market price at date of grantNo consideration is payable for the grant of options under the Unapproved ShareOption Schemes.Performance conditions:The exercise of options under the Unapproved Share Option Schemes, for certainoption issues, is subject to the satisfaction of objective performanceconditions specified by the remuneration committee, which will conform toinstitutional shareholder guidelines and best practice provisions in force fromtime to time. The performance conditions for Second Scheme and the 2010 scheme,agreed by members on 23 June 2005 and 31 August 2010 respectively, requiresgrowth in net assets over a three year period to exceed the growth in theretail price index by a scale of percentages. There are no performanceconditions attached to the other schemes.Payments to past directorsNo payments were made to past directors in the year ended 31 December 2013.Payments for loss of officeNo payments for loss of office were made in the year ended 31 December 2013.Statement of directors' shareholding and share interestDirectors' interestsThe interests of the directors in the shares of the Company, including familyand trustee holdings where appropriate, were as follows:                       Beneficial                  Non-beneficial                       31.12.2013      1.1.2013    31.12.2013      1.1.2013Sir Michael Heller     148,783         148,783     181,334         181,334A R Heller             785,012         785,012     -               -C A Joll               -               -           -               -J A Sibbald            -               -           -               -R J Grobler            -               -           -               -G J Casey              -               -           -               -The following information is unaudited:The following graph illustrates the Company's performance compared with a broadequity market index over a five year period. Performance is measured by totalshareholder return. The directors have chosen the FTSE All Share Mining indexas a suitable index for this comparison as it gives an indication ofperformance against a spread of quoted companies in the same sector.The middle market price of Bisichi Mining PLC ordinary shares at 31 December2013 was 109.75p (2012-110p). During the year the share price ranged between95p and 126.5p.Remuneration of the Managing Director over the last five yearsThe table below demonstrates the remuneration of the holder of the office ofManaging Director for the last five years for the period from 1 January 2009 to31 December 2013.Year  Managing   Managing Director   Annual bonus payout  Long-term incentive      Director   Single total figure against maximum      vesting rates against                 of                                     opportunity\*         maximum opportunity\*                 remuneration                                     %                    %                 £'0002013  A R Heller 614                 N/A                  N/A2012  A R Heller 544                 N/A                  N/A2011  A R Heller 626                 N/A                  N/A2010  A R Heller 568                 N/A                  N/A2009  A R Heller 817                 N/A                  N/ABisichi Mining plc does not have a Chief Executive so the table includes theequivalent information for the Managing Director.\*There were no formal criteria or conditions to apply in determining the amountof bonus payable or the number of shares to be issued.Percentage change in remuneration of director undertaking role of ManagingDirector                 Managing Director               UK based employees                 £'000                           £'000                 2013     2012     % change      2013     2012     % changeBase salary      450      350      28.6%         194      184      5.4%Benefits         31       14       121.4%        10       9        11.1%Bonuses          103      150      (31.3%)       75       75       0%Bisichi Mining plc does not have a Chief Executive so the table includes theequivalent information for the Managing Director.The comparator group chosen is all UK based employees as the remunerationcommittee believe this provides the most accurate comparison of underlyingincreases based on similar annual bonus performances utilised by the group.Relative importance of spend on payThe total expenditure of the Group on remuneration to all employees (see Notes28 and 32 to the financial statements) is shown below:                                                     2013         2012                                                     £'000        £'000Employee remuneration                                5,850        6,000Distribution to shareholders                         425          422Statement of implementation of remuneration policy in the following yearIf the policy is approved at the AGM in June 2014 it is intended that theremuneration policy take effect from 11 June 2014. The vote on the remunerationpolicy is binding in nature. The Company may not then make a remunerationpayment or payment for loss of office to a person who is, is to be, or has beena director of the Company unless that payment is consistent with the approvedremuneration policy, or has otherwise been approved by a resolution of members.Consideration by the directors of matters relating to directors' remunerationThe remuneration committee considered the executive directors remuneration andthe board considered the non-executive directors remuneration in the year ended31 December 2013. No increases were awarded and no external advice was taken inreaching this decision.Shareholder votingAt the Annual General Meeting on 5 June 2013, there was an advisory vote on theresolution to approve the Remuneration Report the result of which is detailedbelow:                                              % of votes % of votes No of votes                                              for        against    withheldResolution to approve the Remuneration Report 99.10%     0.68%      1,384,750governanceRemuneration PolicyIntroductionThe remuneration policy below is the Group's policy on directors' remuneration,which will be proposed for a binding vote at the 2014 AGM. If approved it isintended that the policy take effect from 11 June 2014.In setting the policy, the Remuneration Committee has taken the following intoaccount:• The need to attract, retain and motivate individuals of a calibre who willensure successful leadership and management of the Company• The Group's general aim of seeking to reward all employees fairly accordingto the nature of their role and their performance• Remuneration packages offered by similar companies within the same sector• The need to align the interests of shareholders as a whole with the long-termgrowth of the Group• The need to be flexible and adjust with operational changes throughout theterm of this policyThe remuneration of non-executive directors is determined by the board, andtakes into account additional remuneration for services outside the scope ofthe ordinary duties of non-executive directors.Future policy tableElement  Purpose        Policy             Operation         Opportunity and                                                             performance                                                             conditionsExecutive directorsBase     To recognise:  Considered by      Reviewed annually There is nosalary                  remuneration                         prescribed maximum         Skills         committee on       Paid monthly in   salary                        appointment        cash              or maximum rate of         Responsibility                                      increase                        Set at a level         Accountability considered                           No specific                        appropriate to                       performance         Experience     attract, retain                      conditions are                        motivate and                         attached to base         Value          reward the right                     salaries                        individuals.Pension  To provide     Company            The contribution  Company contribution         competitive    contribution       payable by the    offered at up to 10%         retirement     offered at up to   Company is        of base salary as         benefits       10% of base salary included in the   part of overall                        as part of overall director's        remuneration package                        remuneration       contract of                        package            employment.       No specific                                                             performance                                           Paid into money   conditions are                                           purchase schemes  attached to pension                                                             contributionsBenefits To provide a   Contractual        The committee     The costs associated         competitive    benefits can       retains the       with benefits         benefits       include but are    discretion to     offered are closely         package        not limited to:    approve changes   controlled and                                           in contractual    reviewed on an                        Car or car         benefits in       annual basis                        allowance          exceptional                                           circumstances or  No specific                        Group health cover where factors     performance                                                             conditions are                        Death in service   outside the       attached to                        cover              control of the    contractual benefits                                           Group lead to                        Permanent health   increased costs   The value of                        insurance          (e.g. medical     benefits for each                                           inflation)        director for the                                                             year ended 31                                                             December 2013 is                                                             shown in the table                                                             on page 30Annual   To reward and  In assessing the   The remuneration  The current maximumBonus    incentivise    performance of the committee         bonus opportunity                        executive team,    determines the    will not exceed 200%                        and in particular  level of bonus on of base salary in                        to determine       an annual basis   any one year, but                        whether bonuses    applying such     the remuneration                        are merited the    performance       committee reserves                        remuneration       conditions and    the power to award                        committee takes    performance       up to 300% in an                        into account the   measures as it    exceptional year                        overall            considers                        performance of the appropriate       Performance                        business.                            conditions will be                                                             assessed on an                        Bonuses are                          annual basis. The                        generally offered                    performance measures                        in cash                              applied may be                                                             financial,                                                             non-financial,                                                             corporate,                                                             divisional or                                                             individual and in                                                             such proportion as                                                             the remuneration                                                             committee considers                                                             appropriateShare    To provide     Granted under      Offered at        Entitlement to shareOptions  executive      existing schemes   appropriate times options is not         directors with (see page 31)      by the            subject to any         a long-term                       remuneration      performance         interest in                       committee         conditions         the company                                                             Share options will                                                             be offered by the                                                             remuneration                                                             committee as                                                             appropriate.                                                             There are no maximum                                                             levels for share                                                             options offered.Non-executive directorsBase     To recognise:  Considered by the  Reviewed annually There is nosalary                  board on                             prescribed maximum         Skills         appointment                          salary or maximum                                                             rate of increase. No         Experience     Set at a level                       specific performance                        considered                           conditions are         Value          appropriate to                       attached to base                        attract, retain                      salaries                        and motivate the                        individual.                        Experience and                        time required for                        the role are                        considered on                        appointmentPension                 No pension offeredBenefits                No benefits        The committee     The costs associated                        offered except to  retains the       with the benefit                        one non-executive  discretion to     offered is closely                        director who is    approve changes   controlled and                        eligible for       in contractual    reviewed on an                        health cover (see  benefits in       annual basis                        annual             exceptional                        remuneration       circumstances or  No specific                        report page 30)    where factors     performance                                           outside the       conditions are                                                             attached to                                           control of the    contractual benefits                                           Group lead to                                           increased costs                                           (e.g. medical                                           inflation)Share                   Non-executiveOptions                 directors do not                        participate in the                        share option                        schemesNotes to the future policy tableThe remuneration committee consider the performance measures outlined in thetable above to be appropriate measures of performance and that the KPI's chosenalign the interests of the directors and shareholders.For details of remuneration of other Company employees please see page 39.Remuneration scenariosAn indication of the possible level of remuneration that would be received byeach Executive Director in the year commencing 11 June 2014 in accordance withthe directors' remuneration policy is shown below.Sir Michael HellerG J CaseyA R HellerR J GroblerAssumptionsMinimumConsists of base salary, benefits and pension.Base salary, benefits and pension for 2014 are assumed at the levels includedin the single total figure remuneration table for the year ended 31 December2013 on page 30.On targetBased on the average percentage bonus awarded to the individual in the threeyears ending on 31 December 2013. As outlined in the policy table above, theremuneration committee has discretion to award bonuses of up to 200% of basesalary in any one year (up to 300% in an exceptional year).Base salary, benefits and pension for 2014 are assumed at the levels includedin the single total figure remuneration table for the year ended 31 December2013 on page 30.MaximumBased on maximum remuneration receivable of 300% of base salary awarded asbonus in an exceptional year.Base salary, benefits and pension for 2014 are assumed at the levels includedin the single total figure remuneration table for the year ended 31 December2013 on page 30.Approach to recruitment remunerationAll appointments to the board are made on merit. The components of a newdirectors remuneration package (who is recruited within the life of theapproved remuneration policy) would comprise base salary, pension, benefits,annual bonus and opportunity to be granted share options as outlined above andapproach to such appointments are detailed with in the future policy tableabove. The Company will pay such levels of remuneration to new directors thatwould enable the Company to attract appropriately skilled and experiencedindividuals that is not in the opinion of the remuneration committee excessive.Service contractsAll executive directors have full-time contracts of employment with theCompany. Non-executive directors have contracts of service. No director has acontract of employment or contract of service with the Company, its jointventure or associated companies with a fixed term which exceeds twelve months.Directors notice periods (see page 31 of the annual remuneration report) areset in line with market practice and of a length considered sufficient toensure an effective handover of duties should a director leave the company.All directors' contracts as amended from time to time, have run from the dateof appointment. Service contracts are kept at the registered office.Policy on payment for loss of officeThere are no contractual provisions agreed prior to 27 June 2012 that couldimpact on a termination payment. Termination payments will be calculated inaccordance with the existing contract of employment or service contract. It isthe policy of the remuneration committee to issue employment contracts toexecutive directors with normal commercial terms and without extended terms ofnotice which could give rise to extraordinary termination payments.Consideration of employment conditions elsewhere in the GroupIn setting this policy for directors' remuneration the remuneration committeehas been mindful of the Company's objective to reward all employees fairlyaccording to their role, performance and market forces. In setting the policyfor Directors' remuneration the remuneration committee has considered the payand employment conditions of the other employees within the Group. No formalconsultation has been undertaken with employees in drawing up the policy. Theremuneration committee has not used formal comparison measures.Consideration of shareholder viewsNo shareholder views have been taken into account when formulating this policy.In accordance with the new regulations, an ordinary resolution for approval ofthis policy will be put to shareholders at the AGM in June 2014.governanceAudit committee reportThe committee's terms of reference have been approved by the board and followpublished guidelines, which are available from the company secretary. The auditcommittee comprises the two non-executive directors, Christopher Joll(chairman), an experienced financial PR executive and John Sibbald, a retiredchartered accountant.The Audit Committee's prime tasks are to:Review the scope of external audit, to receive regular reports from the auditorand to review the half-yearly and annual accounts before they are presented tothe board, focusing in particular on accounting policies and areas ofmanagement judgment and estimation;Monitor the controls which are in force to ensure the integrity of theinformation reported to the shareholders;Assess key risks and to act as a forum for discussion of risk issues andcontribute to the board's review of the effectiveness of the group's riskmanagement control and processes;Act as a forum for discussion of internal control issues and contribute to theboard's review of the effectiveness of the group's internal control and riskmanagement systems and processes;Consider each year the need for an internal audit function;Advise the board on the appointment of external auditors and rotation of theaudit partner every five years, and on their remuneration for both audit andnon-audit work, and discuss the nature and scope of their audit work;Participate in the selection of a new external audit partner and agree theappointment when required;Undertake a formal assessment of the auditors' independence each year whichincludes:• a review of non-audit services provided to the group and related fees;• discussion with the auditors of a written report detailing all relationshipswith the company and any other parties that could affect independence or theperception of independence;• a review of the auditors' own procedures for ensuring the independence of theaudit firm and partners and staff involved in the audit, including the regularrotation of the audit partner; and• obtaining written confirmation from the auditors that, in their professionaljudgement, they are independent.MeetingsThe committee meets prior to the annual audit with the external auditors todiscuss the audit plan and again prior to the publication of the annualresults. These meetings are attended by the external audit partner, managingdirector, director of finance and company secretary. Prior to bi-monthly boardmeetings the members of the committee meet on an informal basis to discuss anyrelevant matters which may have arisen. Additional formal meetings are held asnecessary.During the past year the committee:• Met with the external auditors, and discussed their report to the AuditCommittee;• Approved the publication of annual and half-year financial results;• Considered and approved the annual review of internal controls;• Decided that due to the size and nature of operation there was not a currentneed for an internal audit function;• Agreed the independence of the auditors and approved their fees for bothaudit and not-audit services as set out in note 4 to the financial statements.External AuditorsBDO LLP held office throughout the year. In the United Kingdom the company isprovided with extensive administration and accounting services by London &Associated Properties PLC which has its own audit committee and employs aseparate firm of external auditors, Baker Tilly UK Audit LLP. In South AfricaGrant Thornton (Jhb) Inc. acts as the external auditor to the South Africancompanies, and the work of that firm was reviewed by BDO LLP for the purpose ofthe group audit.Christopher JollChairman - audit committee24 Bruton PlaceLondon W1J 6NE17 April 2014governanceVALUERS' CERTIFICATESTo the directors of Bisichi Mining PLCIn accordance with your instructions we have carried out a valuation of thefreehold property interests held as at 31 December 2013 by the company asdetailed in our Valuation Report dated 14 February 2014.Having regard to the foregoing, we are of the opinion that the open marketvalue as at 31 December 2013 of the interests owned by the Company was £11,559,000 being made up as follows:                                                  £000Freehold                                                                  9,035Leasehold                                                                 2,524                                                                         11,559Leeds                                                     Woolhouse Real Estate14 February 2014                                                   Regulated by Royal Institute                                                         of Chartered SurveyorsgovernanceDIRECTORS' RESPONSIBILITIES STATEMENTThe directors are responsible for preparing the annual report and the financialstatements in accordance with applicable law and regulations.Company law requires the directors to prepare financial statements for eachfinancial year. Under that law the directors are required to prepare the groupfinancial in accordance with International Financial Reporting Standards asadopted by the European Union and have elected to prepare the company financialstatements in accordance with United Kingdom Generally Accepted AccountingPractice (United Kingdom Accounting Standards and applicable law). Undercompany law the directors must not approve the financial statements unless theyare satisfied that they give a true and fair view of the state of affairs ofthe group and company and of the profit or loss for the group for that period.In preparing these financial statements, the directors are required to:• select suitable accounting policies and then apply them consistently;• make judgements and accounting estimates that are reasonable and prudent;• state whether they have been prepared in accordance with IFRSs as adopted bythe European Union subject to any material departures disclosed and explainedin the financial statements;• state with regard to the parent company financial statements, whereapplicable UK accounting standards have been followed, subject to any materialdepartures disclosed and explained in the financial statements;• prepare the financial statements on the going concern basis unless it isinappropriate to presume that the company and the group will continue inbusiness;• prepare a strategic report, director's report and director's remunerationreport which comply with the requirements of the Companies Act 2006.The directors are responsible for keeping adequate accounting records that aresufficient to show and explain the company's transactions and disclose withreasonable accuracy at any time the financial position of the company andenable them to ensure that the financial statements comply with the CompaniesAct 2006 and, as regards the group financial statements, Article 4 of the IASRegulation. They are also responsible for safeguarding the assets of thecompany and hence for taking reasonable steps for the prevention and detectionof fraud and other irregularities.Website publicationThe directors are responsible for ensuring the annual report and the financialstatements are made available on a website. Financial statements are publishedon the company's website in accordance with legislation in the United Kingdomgoverning the preparation and dissemination of financial statements, which mayvary from legislation in other jurisdictions. The maintenance and integrity ofthe company's website is the responsibility of the directors. The directors'responsibility also extends to the ongoing integrity of the financialstatements contained therein.Directors' responsibilities pursuant to DTR4The directors confirm to the best of their knowledge:• The group financial statements have been prepared in accordance withInternational Financial Reporting Standards (IFRSs) as adopted by the EuropeanUnion and Article 4 of the IAS Regulation and give a true and fair view of theassets, liabilities, financial position and profit and loss of the group.• The annual report includes a fair review of the development and performanceof the business and the financial position of the group and the parent company,together with a description or the principal risks and uncertainties that theyface.governanceIndependent auditor's reportTo the members of Bisichi Mining PLCWe have audited the financial statements of Bisichi Mining PLC for the yearended 31 December 2013 which comprise the consolidated income statement, theconsolidated statement of comprehensive income, the consolidated balance sheet,the consolidated statement of changes in shareholders' equity, the consolidatedcash flow statement, the company balance sheet and the related notes. Thefinancial reporting framework that has been applied in the preparation of thegroup financial statements is applicable law and International FinancialReporting Standards (IFRSs) as adopted by the European Union. The financialreporting framework that has been applied in preparation of the parent companyfinancial statements is applicable law and United Kingdom Accounting Standards(United Kingdom Generally Accepted Accounting Practice).This report is made solely to the company's members, as a body, in accordancewith Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has beenundertaken so that we might state to the company's members those matters we arerequired to state to them in an auditor's report and for no other purpose. Tothe fullest extent permitted by law, we do not accept or assume responsibilityto anyone other than the company and the company's members as a body, for ouraudit work, for this report, or for the opinions we have formed.Respective responsibilities of directors and auditorsAs explained more fully in the statement of directors' responsibilities, thedirectors are responsible for the preparation of the financial statements andfor being satisfied that they give a true and fair view. Our responsibility isto audit and express an opinion on the financial statements in accordance withapplicable law and International Standards on Auditing (UK and Ireland). Thosestandards require us to comply with the Financial Reporting Council's (FRC's)Ethical Standards for Auditors.Scope of the audit of the financial statementsA description of the scope of an audit of financial statements is provided onthe FRC's website at www.frc.org.uk/auditscopeukprivate.Opinion on financial statementsIn our opinion:• the financial statements give a true and fair view of the state of thegroup's and the parent company's affairs as at 31 December 2013 and of thegroup's profit for the year then ended;• the group financial statements have been properly prepared in accordance withIFRSs as adopted by the European Union;• the parent company financial statements have been properly prepared inaccordance with United Kingdom Generally Accepted Accounting Practice; and• the financial statements have been prepared in accordance with therequirements of the Companies Act 2006; and, as regards the group financialstatements, Article 4 of the IAS Regulation.Opinion on other matters prescribed by the Companies Act 2006In our opinion:• the part of the directors' remuneration report to be audited has beenproperly prepared in accordance with the Companies Act 2006; and• the information given in the strategic report and directors' report for thefinancial year for which the financial statements are prepared is consistentwith the financial statements.Matters on which we are required to report by exceptionWe have nothing to report in respect of the following:Under the Companies Act 2006 we are required to report to you if, in ouropinion:• adequate accounting records have not been kept by the parent company, orreturns adequate for our audit have not been received from branches not visitedby us; or• the parent company financial statements and the part of the directors'remuneration report to be audited are not in agreement with the accountingrecords and returns; or• certain disclosures of directors' remuneration specified by law are not made;or• we have not received all the information and explanations we require for ouraudit.Andrew Huddleston(senior statutory auditor)For and on behalf of BDO LLP, statutory auditorLondon, United Kingdom17 April 2014BDO LLP is a limited liability partnership registered in England and Wales(with registered number OC305127).Consolidated income statementfor the year ended 31 December 2013                        Notes 2013     2013         2013     2012     2012         2012                              Trading  Revaluations Total    Trading  Revaluations Total                              £'000    £'000        £'000    £'000    £'000        £'000Group revenue           1     35,105   -            35,105   35,962   -            35,962Operating costs         2     (31,271) -            (31,271) (30,367) -            (30,367)Operating profit before       3,834    -            3,834    5,595    -            5,595depreciation, fairvalue adjustments andexchange movementsDepreciation            2     (2,817)  -            (2,817)  (2,253)  -            (2,253)Operating profit/(loss) 1     1,017    -            1,017    3,342    -            3,342before fair valueadjustments andexchange movementsExchange losses               (880)    -            (880)    (357)    -            (357)Decrease in value of    3     -        (53)         (53)     -        (456)        (456)investment propertiesDecrease in value of          -        (1)          (1)other investmentsGains on held for             -        40           40       -        39           39trading investmentsOperating profit/(loss) 1     137      (14)         123      2,985    (417)        2,568Share of profit/(loss)  13    -        99           99       64       (201)        (137)in joint venturesProfit/(Loss) before          137      85           222      3,049    (618)        2,431interest and taxationInterest receivable           326      -            326      281      -            281Interest payable        6     (446)    -            (446)    (522)    -            (522)Profit/(Loss) before    4     17       85           102      2,808    (618)        2,190taxTaxation                7     98       164          262      (842)    192          (650)Profit/(Loss) for the         115      249          364      1,966    (426)        1,540yearAttributable to:Equity holders of the         106      249          355      1,721    (426)        1,295companyNon-controlling         26    9        -            9        245      -            245interestProfit/(Loss) for the         115      249          364      1,966    (426)        1,540yearProfit/(Loss) per share 9     1.00p    2.35p        3.35p    16.30p   (4.03)p      12.27p- basicProfit/(Loss) per share 9     0.99p    2.31p        3.30p    16.05p   (3.97)p      12.08p- dilutedTrading income reflects all the trading activity on mining and propertyoperations. Revaluation Income reflects the revaluation of investmentproperties and other assets within the group and any proportion of theseamounts within Joint Ventures. The total column represents the consolidatedincome statement presented in accordance with IAS 1.Consolidated statement of comprehensive incomefor the year ended 31 December 2013                                                                  2013   2012                                                                  £'000  £'000Profit for the year                                               364    1,540Other comprehensive income:Items that may be subsequently recycled to the income statement:Exchange differences on translation of foreign operations         (858)  (391)Taxation                                                          -      -Other comprehensive income for the year net of tax                (858)  (391)Total comprehensive income for the year net of tax                (494)  1,149Attributable to:Equity shareholders                                               (409)  936Non-controlling interest                                          (85)   213                                                                  (494)  1,149consolidated balance sheetat 31 December 2013                                                           Notes  2013   2012                                                                  £'000  £'000AssetsNon-current assetsValue of investment properties                             10     11,559 11,612Fair value of head lease                                   30     196    202Investment properties                                             11,755 11,814Mining reserves, plant and equipment                       11     7,096  8,638Investments in joint ventures accounted for using equity   12     3,235  3,061methodLoan to joint venture                                      12     984    1,117Other investments                                          12     151    131Total non-current assets                                          23,221 24,761Current assetsInventories                                                15     1,756  1,876Trade and other receivables                                16     8,659  7,604Corporation tax recoverable                                       36     49Held for trading investments                               17     822    787Cash and cash equivalents                                         1,707  1,802Total current assets                                              12,980 12,118Total assets                                                      36,201 36,879                                                        Notes  2013     2012                                                               £'000    £'000LiabilitiesCurrent liabilitiesBorrowings                                              19     (8,042)  (6,186)Trade and other payables                                18     (8,080)  (9,218)Current tax liabilities                                        (2)      (2)Total current liabilities                                      (16,124) (15,406)Non-current liabilitiesBorrowings                                              19     (118)    (86)Provision for rehabilitation                            20     (874)    (989)Finance lease liabilities                               30     (196)    (202)Deferred tax liabilities                                22     (1,902)  (2,437)Total non-current liabilities                                  (3,090)  (3,714)Total liabilities                                              (19,214) (19,120)Net assets                                                     16,987   17,759EquityShare capital                                           23     1,064    1,056Share premium account                                          249      169Translation reserve                                            (1,569)  (805)Other reserves                                          24     587      528Retained earnings                                              16,297   16,367Total equity attributable to equity shareholders               16,628   17,315Non-controlling interest                                26     359      444Total equity                                                   16,987   17,759These financial statements were approved and authorised for issue by the boardof directors on 17 April 2014 and signed on its behalf by:A R Heller G J Casey Company Registration No. 112155Director DirectorConsolidated statement of changes in shareholders' equityfor the year ended 31 December 2013                      Share   Share   Translation Other    Retained Total  Non-        Total                      capital Premium reserves    reserves earnings £'000  controlling equity                      £'000   £'000   £'000       £'000    £'000           interest    £'000                                                                           £'000Balance at 1 January  1,056   169     (446)       500      15,494   16,773 231         17,0042012Revaluation of        -       -       -           -        (456)    (456)  -           (456)investment propertiesOther income          -       -       -           -        1,751    1,751  245         1,996statement movementsLoss for the year     -       -       -           -        1,295    1,295  245         1,540Exchange adjustment   -       -       (359)       -        -        (359)  (32)        (391)Total comprehensive   -       -       (359)       -        1,295    936    213         1,149income for the yearDividend              -       -       -           -        (422)    (422)  -           (422)Equity share options  -       -       -           28       -        28     -           28Balance at 1 January  1,056   169     (805)       528      16,367   17,315 444         17,7592013Revaluation of        -       -       -           -        (53)     (53)   -           (53)investment propertiesOther income          -       -       -           -        408      408    9           417statement movementsProfit for the year   -       -       -           -        355      355    9           364Exchange adjustment   -       -       (764)       -        -        (764)  (94)        (858)Total comprehensive   -       -       (764)       -        355      (409)  (85)        (494)income for the yearDividend (note 8)     -       -       -           -        (425)    (425)  -           (425)Share issues          8       80      -           -        88       -      -           88Equity share options  -       -       -           59       -        59     -           59Balance at 31         1,064   249     (1,569)     587      16,297   16,628 359         16,987December 2013consolidated cash flow statementfor the year ended 31 December 2013                                                              Year     Year                                                              ended    ended                                                              31       31                                                              December December                                                              2013     2012                                                              £'000    £'000Cash flows from operating activitiesOperating profit/(loss)                                       123      2,568Adjustments for:Depreciation                                                  2,817    2,253Share based payment expense                                   120      28(Gain) on investment held for trading                         (40)     (39)Unrealised loss on investment properties                      53       456Unrealised loss on other investments                          1        -Share of profit of joint venture                              -        64Cash flow before working capital                              3,074    5,330Change in inventories                                         120      (670)Change in trade and other receivables                         (2,320)  (2,057)Change in trade and other payables                            433      1,149Change in provisions                                          15       6Acquisitions of held for trading investments                  -        (18)Cash generated from operations                                1,322    3,740Interest received                                             326      281Interest paid                                                 (357)    (411)Income tax received                                           11       83Cash flow from operating activities                           1,302    3,693Cash flows from investing activitiesAcquisition of reserves, plant and equipment                  (3,060)  (3,681)Proceeds from sale of investment properties, reserves,plant and equipment                                           -        -Disposal/(acquisitions) of investments                        (102)    16Cash flow from investing activities                           (3,162)  (3,665)                                                              Year     Year                                                              ended    ended                                                              31       31                                                              December December                                                              2013     2012                                                              £'000    £'000Cash flows from financing activitiesBorrowings drawn                                              39       86Borrowings repaid                                             (96)     (214)Equity dividends paid                                         (425)    (422)Net proceeds from issue of ordinary shares                    27       -Cash flow from financing activities                           (455)    (550)Net decrease in cash and cash equivalents                     (2,315)  (522)Cash and cash equivalents at 1 January                        718      1,114Exchange adjustment                                           275      126Cash and cash equivalents at 31 December                      (1,322)  718Cash and cash equivalents at 31 December comprise:Cash and cash equivalents as presented in the balance sheet   1,707    1,802Bank overdrafts (secured)                                     (3,029)  (1,084)                                                              (1,322)  718group accounting policiesfor the year ended 31 December 2013Basis of accountingThe results for the year ended 31 December 2013 have been prepared inaccordance with International Financial Reporting Standards (IFRS) as adoptedby the European Union and with those parts of the Companies Act 2006 applicableto companies reporting under IFRS. The principal accounting policies aredescribed below:The group financial statements are presented in £ sterling and all values arerounded to the nearest thousand pounds (£000) except when otherwise stated.Going concernThe group has considerable financial resources available at short noticeincluding cash, held for trading investments and its £2m loan to Dragon RetailProperties Limited which is repayable on demand. In addition its investmentproperty assets benefit from long term leases with the majority of its tenants.Black Wattle Colliery, its direct mining asset, experienced a reduction inprofitability in the second half of 2013 due to operational issues related totheir mining activates. The directors expect that these operational issues willbe fully overcome by the second half of 2014 and that the market conditionsexperiencedin 2013 will be similar going into 2014. The directors therefore have areasonable expectation that the mine will return to acceptable levels ofprofitability in the second half of 2014. As a consequence, the directorsbelieve that the group is well placed to manage its business riskssuccessfully.In October 2013, an increase in the structured trade finance facility fromR60million (South African Rand) to R80million was signed by Black WattleColliery (pty) Limited ("Black Wattle") with Absa Bank Limited, a South Africansubsidiary of Barclays Bank PLC. The facility is renewed annually at 30 Juneand is secured against inventory, debtors and cash that are held in the group'sSouth African operations. This facility comprises of a R60million revolvingloan to cover the working capital requirements of the group's South Africanoperations, and a R20million loan facility to cover guarantee requirementsrelated to the group's South African mining operations. Subsequent to year endBlack Wattle breached one of the covenants of the facility related to theaccounting net asset value of the company. Management have been in discussionswith the bank to rectify the breach and have no reason to believe the breachwill not be rectified or affect the ongoing use of the facility, or that thefacility will not be renewed again at the appropriate times.The group is working with the Royal Bank of Scotland ("RBS") on the renewal ofthe current UK banking facilities, being a £5million term facility and a £1million overdraft. The bank has previously agreed to an extension, from itsoriginal expiry date of 31 December 2012, to 30th June 2013. Whilst discussionsare on-going, no further extension has been formalised as the terms for a newfacility are being negotiated. The directors consider that with the assetsecurity available, the level of facilities required should be readilyavailable and consider that a new loan will be agreed, either with RBS or analternative provider, in the near future.As a result, the Directors believe that the company will have adequateresources to continue in operational existence for the foreseeable future andthat the company is well placed to manage its business risks. Thus theycontinue to adopt the going concern basis of accounting in preparing the annualfinancial statements.International Financial Reporting Standards (IFRS)The financial statements are prepared in accordance with InternationalFinancial Reporting Standards and Interpretations in force at the reportingdate. These are prepared under the historic cost basis as modified by therevaluation of investment properties and held for trading investments.During 2013 the following accounting standards and guidance were adopted by thegroup:• IAS 1 Presentation of Financial Statements: Presentation of items of OtherComprehensive Income• IFRS 13 Fair Value Measurement• IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine.The accounting treatment detailed in the above standards have not resulted in achange of the Group's accounting policy and had no impact on the group'sfinancial position or performance.IFRS 13 Fair Value Measurement:IFRS 13 establishes a single source of guidance for fair value measurements andtheir disclosures when fair value is required or permitted. IFRS 13 definesfair value as the price that would be received to sell an asset or paid totransfer a liability in an orderly transaction in the principal (mostadvantageous) market at the measurement date under current market conditions.Fair value under IFRS 13 is an \`exit price' regardless of whether that price isdirectly observable or estimated using another valuation technique. Theapplication of IFRS 13 has not materially impacted the fair value measurementsof the group. Additional disclosures where required, are provided in theindividual notes relating to the assets and liabilities whose fair values weredetermined.All other standards and interpretations that were mandatory for the accountingperiod and were required to be adopted by the group either had no materialimpact on the group's financial statements or were not relevant to theoperations of the group.The group has not adopted any standards or interpretations in advance of therequired implementation dates. The following new or revised standards that areapplicable to the group were issued but not yet effective:• IFRS 9 - Financial Instruments• Amendment to IAS 32• IFRS 10 Consolidated financial statements• IFRS 11 Joint Arrangements• IFRS 12 Disclosure of Interests in Other EntitiesIt is not expected that adoption of any standards or interpretations which havebeen issued by the International Accounting Standards Board but have not beenadopted will have a material impact on the financial statements.Key judgements and estimatesThe directors consider their judgements and estimates surrounding the life ofthe mine and its reserves to have the most significant effect on the amountsrecognised in the financial statements and to be the area where the financialstatements are at most risk of a material adjustment due to estimationuncertainty. Areas where key estimates and judgements are considered to have asignificant effect on the amounts recognised in the financial statementsinclude:Depreciation, amortisation of mineral rights, mining development costs andplant & equipmentThe annual depreciation/amortisation charge to operations, can fluctuate frominitial estimates. This could generally result when there are significantchanges in any of the factors or assumptions used in estimating mineralreserves and resources which in turn affects the life of mine or the expectedlife of reserves. Estimates of proven and probable reserves and resources areprepared by suitable qualified experts. Assessments of depreciation/amortisation rates against the estimated reserve and resource base areperformed regularly.Provision for mining rehabilitation including restoration and de-commissioningcosts A provision for future rehabilitation including restoration anddecommissioning costs requires estimates and assumptions to be made around therelevant regulatory framework, the timing, extent and costs of therehabilitation activities and of the risk adjusted discount rates used todetermine the present value of the future cash outflows. The provisionsincluding the estimates and assumptions contained therein are reviewedregularly by management.Impairment Property, plant and equipment are reviewed for impairment wheneverevents or changes in circumstances indicate that the carrying value may not befully recoverable. Future cash flow estimates are discounted using assetspecific discount rates and are based on expectations about future operations,primarily comprising estimates about production and sales volumes, commodityprices, reserves and resources, operating, rehabilitation and restoration costsand capital expenditures. Changes in such estimates could impact recoverablevalues of these assets. Estimates are reviewed regularly by management.Fair value measurements of investment propertiesAn assessment of the fair value of assets and liabilities, in particularinvestment properties, is required to be performed. In such instances, fairvalue measurements are estimated based on the amounts for which the assets andliabilities could be exchanged at the relevant transaction date or reportingperiod end. To the extent possible, the assumptions and inputs used take intoaccount externally verifiable inputs. However, such information is by naturesubject to uncertainty. The directors note that the fair value measurement ofthe investment properties, can be considered to be less judgemental whereexternal valuers have been used and as a result of the nature of the underlyingassets.Basis of consolidationThe group accounts incorporate the accounts of Bisichi Mining Plc and all ofits subsidiary undertakings, together with the group's share of the results ofits joint ventures. Non-controlling interests in subsidiaries are presentedseparately from the equity attributable to equity owners of the parent company.When changes in ownership in a subsidiary do not result in a loss of control,the non-controlling shareholders' interests are initially measured at thenon-controlling interests' proportionate share of the subsidiaries net assets.Subsequent to this, the carrying amount of non-controlling interests is theamount of those interests at initial recognition plus the non-controllinginterests' share of subsequent changes in equity. Total comprehensive income isattributed to non-controlling interests evenif this results in the non-controlling interests having a deficit balance.RevenueRevenue comprises sales of coal and property rental income. Revenue isrecognised when delivery of the product or service has been made and when thecustomer has a legally binding obligation to settle under the terms of thecontract and has assumed all significant risks and rewards of ownership.Revenue is only recognised on individual sales of coal when all of thesignificant risks and rewards of ownership have been transferred to a thirdparty. In most instances revenue is recognised when the product is delivered tothe location specified by the customer, which is typically when loaded intotransport, where the customer pays the transportation costs.Rental income which excludes services charges recoverable from tenants, isrecognised in the group income statement on a straight-line basis over the termof the lease. This includes the effect of lease incentives.Investment propertiesInvestment properties comprise freehold and long leasehold land and buildings.Investment properties are carried at fair value in accordance with IAS 40\`Investment Properties'. Properties are recognised as investment propertieswhen held for long-term rental yields, and after consideration has been givento a number of factors including length of lease, quality of tenant andcovenant, value of lease, management intention for future use of property,planning consents and percentage of property leased. Investment properties arerevalued annually by professional external surveyors and included in thebalance sheet at their fair value. Gains or losses arising from changes in thefair values of assets are recognised in the consolidated income statement inthe period to which they relate. In accordance with IAS 40, investmentproperties are not depreciated. Properties held for use in the business are notrecognised as investment properties and are held at depreciated historicalcost.The fair value of the head leases is the net present value of the current headrent payable on leasehold properties until the expiry of the lease.Mining reserves, plant and equipmentThe cost of property, plant and equipment comprises its purchase price and anycosts directly attributable to bringing the asset to the location and conditionnecessary for it to be capable of operating in accordance with agreedspecifications. Freehold land is not depreciated. Other property, plant andequipment is stated at historical cost less accumulated depreciation.ProvisionsProvisions are recognised when the group has a present obligation as a resultof a past event which it is probable will result in an outflow of economicbenefits that can be reliably estimated.A provision for rehabilitation of the mine is carried at present value and isprovided for over the life of mine. The provision includes the restoration ofthe underground, opencast, surface operations and de-commissioning of plant andequipment and is estimated to be utilised at the end of the life of mine of thegroup. The timing and final cost of the rehabilitation is uncertain and willdepend on the duration of the mine life and the quantities of coal extractedfrom the reserves.Mine reserves and development costThe purpose of mine development is to establish secure working conditions andinfrastructure to allow the safe and efficient extraction of recoverablereserves. Depreciation on mine development is not charged until productioncommences or the assets are put to use. On commencement of full production,depreciation is charged over the life of the associated mine reserves on astraight-line basis.Surface mine developmentExpenditure incurred prior to the commencement of working surface mine sites,net of any residual value and taking into account the likelihood of the sitebeing mined, is capitalised within property, plant and equipment and charged tothe income statement over the life of the recoverable reserves of the scheme.Other assets and depreciationThe cost, less estimated residual value, of other property, plant and equipmentis written off on a straight-line basis over the asset's expected useful life.Residual values and useful lives are reviewed, and adjusted if appropriate, ateach balance sheet date. Changes to the estimated residual values or usefullives are accounted for prospectively. Heavy surface mining and other plant andequipment is depreciated at varying rates depending upon its expected usage.The depreciation rates generally applied are:Mining equipment The shorter of its useful life or the life of the mineMining reserves  Over the expected life of the reserves using the units of                 production basisMotor vehicles   25-33 per cent per annumOffice equipment 10-33 per cent per annumEmployee benefitsShare based remunerationThe company operates a share option scheme. The fair value of the share optionscheme is determined at the date of grant. This fair value is then expensed ona straight-line basis over the vesting period, based on an estimate of thenumber of shares that will eventually vest. The fair value of options grantedis calculated using a binomial or Black-Scholes-Merton model. Details of theshare options in issue are disclosed in the Directors' Remuneration Report onpage 31 under the heading Share option schemes which is within the audited partof that report.PensionsThe group operates a defined contribution pension scheme. The contributionspayable to the scheme are expensed in the period to which they relate.Foreign currenciesMonetary assets and liabilities are translated at year end exchange rates andthe resulting exchange rate differences are included in the consolidated incomestatement within the results of operating activities if arising from tradingactivities and within finance cost/income if arising from financing.For consolidation purposes, income and expense items are included in theconsolidated income statement at average rates, and assets and liabilities aretranslated at year end exchange rates. Translation differences arising onconsolidation are recognised in other comprehensive income. Where foreignoperations are disposed of, the cumulative exchange differences of that foreignoperation are recognised in the consolidated income statement when the gain orloss on disposal is recognised.Transactions in foreign currencies are translated at the exchange rate rulingon transaction date.Financial instrumentsThe group classifies financial instruments, or their component parts, oninitial recognition as a financial asset, a financial liability or an equityinstrument in accordance with the substance of the contractual arrangement.Bank loans and overdraftsBank loans and overdrafts are included as financial liabilities on the groupbalance sheet at the amounts drawn on the particular facilities net of theunamortised cost of financing. Interest payable on those facilities is expensedas finance cost in the period to which it relates.Finance lease liabilitiesFinance lease liabilities arise for those investment properties held under aleasehold interest and accounted for as investment property. The liability isinitially calculated as the present value of the minimum lease payments,reducing in subsequent reporting periods by the apportionment of payments tothe lessor.Interest rate derivativesThe group uses derivative financial instruments to manage the interest raterisk associated with the financing of the group's business. No trading in suchfinancial instruments is undertaken. At each reporting date, these interestrate derivatives are recognised at fair value, being the estimated amount thatthe group would receive or pay to terminate the agreement at the balance sheetdate, taking into account current interest rates and the current credit ratingof the counterparties. The gain or loss at each fair value re-measurement isrecognised immediately in the income statement.Held for trading investmentsFinancial assets/liabilities held for trading or short-term gain are measuredat fair value and movements in fair value are charged/credited to the incomestatement in the period.Trade receivablesTrade receivables do not carry any interest and are stated at their nominalvalue as reduced by appropriate allowances for estimated recoverable amounts asthe interest that would be recognised from discounting future cash paymentsover the short payment period is not considered to be material.Trade payablesTrade payables are not interest bearing and are stated at their nominal value,as the interest that would be recognised from discounting future cash paymentsover the short payment period is not considered to be material.Other financial assets and liabilitiesThe groups other financial assets and liabilities not disclosed above areaccounted for at amortised cost.Joint venturesInvestments in joint ventures, being those entities over whose activities thegroup has joint control, as established by contractual agreement, are includedat cost together with the group's share of post-acquisition reserves, on anequity basis.InventoriesInventories are stated at the lower of cost and net realisable value. Costincludes materials, direct labour and overheads relevant to the stage ofproduction. Net realisable value is based on estimated selling price less allfurther costs to completion and all relevant marketing, selling anddistribution costs.Other investmentsOther investments that do not have a quoted market price in an active marketand whose fair value cannot be reliably measured are recognised at cost lessany provision for impairment.ImpairmentWhenever events or changes in circumstance indicate that the carrying amount ofan asset may not be recoverable an asset is reviewed for impairment. An asset'scarrying value is written down to its estimated recoverable amount (being thehigher of the fair value less cost to sell and value in use) if that is lessthan the asset's carrying amount.Deferred taxDeferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the tax computations, and isaccounted for using the balance sheet liability method. Deferred taxliabilities are generally recognised for all taxable temporary differences anddeferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporarydifferences can be utilised. In respect of the deferred tax on the revaluationsurplus, this is calculated on the basis of the chargeable gains that wouldcrystallise on the sale of the investment portfolio as at the reporting date.The calculation takes account of indexation on the historical cost of theproperties and any available capital losses.Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the group income statement, except when it relates toitems charged or credited directly to other comprehensive income, in which caseit is also dealt with in other comprehensive income.DividendsDividends payable on the ordinary share capital are recognised as a liabilityin the period in which they are approved.Cash and cash equivalentsCash comprises cash in hand and on-demand deposits. Cash and cash equivalentscomprises short-term, highly liquid investments that are readily convertible toknown amounts of cash and which are subject to an insignificant risk of changesin value and original maturities of three months or less. The cash and cashequivalents shown in the cashflow statement are stated net of bank overdrafts.Segmental reportingFor management reporting purposes, the group is organised into businesssegments distinguishable by economic activity. The group's only businesssegments are mining activities and investment properties. These businesssegments are subject to risks and returns that are different from those ofother business segments and are the primary basis on which the group reportsits segment information. This is consistent with the way the group is managedand with the format of the group's internal financial reporting. Significantrevenue from transactions with any individual customer, which makes up 10percent or more of the total revenue of the group, is separately disclosedwithin each segment.notes to the financial statementsfor the year ended 31 December 2013 1. Segmental reporting 2.2013Business analysis   Mining  Property Other Total                    £'000   £'000    £'000 £'000Significant revenue 12,981  -        -     12,981customer ASignificant revenue 7,448   -        -     7,448customer BSignificant revenue 6,829   -        -     6,829customer COther revenue       6,859   953      35    7,847Segment revenue     34,117  953      35    35,105Operating profit    335     649      33    1,017before fair valueadjustments & exchange movementsRevaluation of      (880)   (53)     39    (894)investments &exchange movementsOperating profit/   (545)   596      72    123(loss) and segmentresultSegment assets      15,849  11,557   2,823 30,229Unallocated assets- Non-current                              46assets- Cash & cash                              1,707equivalentsTotal assets                               31,982excludinginvestment in jointventuresSegment liabilities (8,816) (1,010)  (22)  (9,848)Borrowings          (33)    (5,098)  -     (5,131)                    (8,849) (6,108)  (22)  (14,979)Unallocated                                (4,235)liabilitiesTotal liabilities                          (19,214)Net assets                                 12,768Investment in joint                        4,219ventures nonsegmentalNet assets as per                          16,987balance sheetGeographic analysis                       United  South  Other Unallocated Total                                          Kingdom Africa £'000 £'000       £'000                                          £'000   £'000Revenue                                   988     34,117 -     -           35,105Operating profit/(loss) and segment       668     (545)  -     -           123resultNon-current assets excluding investments  11,765  7,050  -     36          18,851Total net assets                          5,969   7,248  43    3,726       16,987Capital expenditure                       48      3,012  -     -           3,060                                                  2012Business analysis                                 Mining  Property Other   Total                                                  £'000   £'000    £'000   £'000Significant revenue customer A                    10,510  -        -       10,510Significant revenue customer B                    6,120   -        -       6,120Significant revenue customer C                    3,110   -        -       3,110Other Revenue                                     15,212  957      53      16,222Segment revenue                                   34,952  957      53      35,962Operating profit/(loss) before fair value         2,630   666      46      3,342adjustments & exchange movementsRevaluation of investments & exchange movements   (357)   (456)    39      (774)Operating profit/(loss) and segment result        2,273   210      85      2,568Segment assets                                    15,789  12,322   2,786   30,897Unallocated assets- Non-current assets                                                       2- Cash & cash equivalents                                                  1,802Total assets excluding investment in joint                                 32,701venturesSegment liabilities                               (9,416) (2,159)  (1,271) (12,846)Borrowings                                        (102)   (5,086)  -       (5,188)                                                  (9,518) (7,245)  (66)    (16,829)Unallocated liabilities                                                    (1,086)Total liabilities                                                          (19,120)Net assets                                                                 13,581Investment in joint ventures non segmental                                 4,178Net assets as per balance sheet                                            17,759Geographic analysis                       United  South  Other Unallocated Total                                          Kingdom Africa £'000 £'000       £'000                                          £'000   £'000Revenue                                   1,010   34,952 -     -           35,962Operating profit and segment result       295     2,273  -     -           2,568Non-current assets excluding investments  11,814  8,638  -     -           20,452Total net assets                          5,857   6,170  43    5,689       17,759Capital expenditure                       1       3,680  -     -           3,6812. Operating costs                                                                  2013   2012                                                                  £'000  £'000Mining                                                            26,158 25,390Property                                                          192    135Cost of sales                                                     26,350 25,525Administration                                                    7,738  7,095Operating costs                                                   34,088 32,620The direct property costs are:Ground rent                                                       5      9Direct property expense                                           116    86Bad debts                                                         71     40                                                                  192    135Operating costs above include depreciation of £2,817,000 (2012: £2,253,000).3. Loss on revaluation and sale of investment propertiesThe reconciliation of the investment deficit to the loss on revaluation ofinvestment properties in the income statement is set out below:                                                                  2013   2012                                                                  £'000  £'000Investment deficit                                                (47)   (476)Loss on valuation movement in respect of head lease payments      (6)    20Loss on revaluation of investment properties                      (53)   (456)4. Profit/(Loss) before taxationProfit/(Loss) before taxation is arrived at after charging:                                                                  2013   2012                                                                  £'000  £'000Staff costs (see note 28)                                         5,850  6,000Depreciation                                                      2,817  2,253Exchange loss                                                     880    357Fees payable to the company's auditor for the audit of the        35     33company's annual accountsFees payable to the company's auditor and its associates forother services:The audit of the company's subsidiaries, pursuant to legislation  -      31Corporate finance                                                 -      17Other services                                                    1      5The directors consider the auditors were best placed to provide the abovenon-audit services.The audit committee reviews the nature and extent of non-audit services toensure that independence is maintained.5. Directors' emolumentsDirectors' emoluments are shown in the Directors' remuneration report on pages30 and 31 under the heading Directors' remuneration which is within the auditedpart of that report.6. Interest payable                                                                  2013   2012                                                                  £'000  £'000On bank overdrafts and bank loans                                 323    352Unwinding of discount                                             89     111Other interest payable                                            34     59Interest payable                                                  446    5227. Taxation                                                                  2013   2012                                                                  £'000  £'000(a) Based on the results for the year:Corporation tax                                                   -      7Current tax                                                       -      7Deferred tax - current year                                       (213)  643Deferred tax - adjustment in respect of prior year                (49)   -Total tax in income statement                                     (262)  650(b) Factors affecting tax charge for the year:The corporation tax assessed for the year is different from that at thestandard rate of corporation tax in the United Kingdom of 23.5% (2012: 24.5%)The differences are explained below:Profit on ordinary activities before taxation                     102    2,190Tax on profit on ordinary activities at 23.5% (2012: 24.5%)       24     537Effects of:Expenses not deductible for tax purposes                          6      25Adjustment to tax rate                                            (101)  -Other differences                                                 (142)  88Adjustment in respect of prior years                              (49)   -Total tax                                                         (262)  650financial statements notes to the financial statements continued(c) Analysis of United Kingdom and overseas taxUnited Kingdom tax included in above:                                                                  2013   2012                                                                  £'000  £'000Corporation tax                                                   -      2Adjustment in respect of prior years                              -      -Current tax                                                       -      2Deferred tax                                                      (271)  (101)                                                                  (271)  (99)Overseas tax included in above:Corporation tax                                                   -      5Adjustment in respect of prior years                              -      -Current tax                                                       -      5Deferred tax                                                      9      744                                                                  9      7498. Dividends paid                                                    2013   2013   2012   2012                                                    Per    £'000  Per    £'000                                                    share         shareDividends paid during the year relating to the      4.00p  425    4.00p  422prior periodDividends to be paid:Interim dividend for 2013 paid on 31 January 2014   1.00p  106    1.00p  105Proposed final dividend for 2013                    3.00p  319    3.00p  317                                                    4.00p  425    4.00p  422The dividends to be paid are not accounted for until they have been approved atthe Annual General Meeting. The amount will be accounted for as anappropriation of retained earnings in the year ending 31 December 2014.9. Profit/(Loss) and diluted profit/(loss) per shareBoth the basic and diluted profit/(loss) per share calculations are based on aprofit of £355,000 (2012: £1,295,000). The basic profit/(loss) per share hasbeen calculated on a weighted average of 10,596,839(2012: 10,556,839) ordinaryshares being in issue during the period. The diluted profit/(loss) per sharehas been calculated on the weighted average number of shares in issue of10,596,839 (2012: 10,556,839) plus the dilutive potential ordinary sharesarising from share options of 160,982 (2012: 165,722) totalling 10,757,821(2011: 10,722,561).10. Investment properties                                                       Freehold Long      Total                                                       £'000    Leasehold £'000                                                                £'000Valuation at 1 January 2013                            8,889    2,723     11,612Revaluation                                            146      (199)     (53)Valuation at 31 December 2013                          9,035    2,524     11,559Valuation at 1 January 2012                            9,118    2,950     12,068Revaluation                                            (229)    (227)     (456)Valuation at 31 December 2012                          8,889    2,723     11,612Historical costAt 31 December 2013                                    4,801    728       5,529At 31 December 2012                                    4,801    728       5,529Long leasehold properties are those for which the unexpired term at the balancesheet date is not less than 50 years.All investment properties are held for use in operating leases and allproperties generated rental income during the period.Freehold and Long Leasehold properties were externally professionally valued at31 December on an open market basis by:                                                             2013                                                             £'000Woodhouse Real Estate                                        11,559The valuations were carried out in accordance with the Statements of AssetValuation and Guidance Notes published by The Royal Institution of CharteredSurveyors.Each year external valuers are appointed by the Executive Directors on behalfof the Board. The valuers are selected based upon their knowledge, independenceand reputation for valuing assets as those held by the group.Valuations are performed annually and are performed consistently across allinvestment properties in the group's portfolio. At each reporting dateappropriately qualified employees of the group verify all significant inputsand review the computational outputs. Valuers submit their report to the Boardon the outcome of each valuation round.Valuations take into account tenure, lease terms and structural condition. Theinputs underlying the valuations include market rent or business profitability,likely incentives offered to tenants, forecast growth rates, yields, EBITDA,discount rates, construction costs including any specific site costs (forexample section 106), professional fees, developer's profit includingcontingencies, planning and construction timelines, lease regear costs,planning risk and sales prices based on known market transactions for similarproperties to those being valued.Valuations are based on what is determined to be the highest and best use. Whenconsidering the highest and best use a valuer will consider, on a property byproperty basis, its actual and potential uses which are physically, legally andfinancially viable. Where the highest and best use differs from the existinguse, the valuer will consider the cost and likelihood of achieving andimplanting this change in arriving at its valuation.There are often restrictions on Freehold and Leasehold property which couldhave a material impact on the realisation of these assets. The most significantof these occur when planning permission or lease extension and renegotiation ofuse are required or when a credit facility is in place. These restrictions arefactored in the property's valuation by the external valuer.IFRS 13 sets out a valuation hierarchy for assets and liabilities measured atfair value as follows:Level 1: valuation based on inputs on quoted market prices in active marketsLevel 2: valuation based on inputs other than quoted prices included withinlevel 1 that maximise the use of observable data directly or from market pricesor indirectly derived from market prices.Level 3: where one or more inputs to valuations are not based on observablemarket dataThe inter-relationship between key unobservable inputs and the groups'properties is detailed in the table below:Class of property Level 3    Carrying Valuation          Key            Range                             /        technique          unobservable                                                         inputs         (weighted                             fair                             value                                      average)                             2013                                       2013                             £'000Freehold - external          9,035    Income             Estimated      £6valuation                             capitalisation     rental value                                                                        (£6)                                                         Per sq ft p.a                                                                        7.1%                                                         Equivalent                                                         Yield          (7.1%)Long leasehold - external    2,524    Income             Estimated      £7- £25valuation                             capitalisation     rental value                                                                        (£12)                                                         Per sq ft p.a                                                                        7.9% -                                                         Equivalent     10.5%                                                         yield                                                                        (10.3%)At 31 December 2013          11,559There are interrelationships between all these inputs as they are determined bymarket conditions. The existence of an increase in more than one input would beto magnify the input on the valuation. The impact on the valuation will bemitigated by the interrelationship of two inputs in opposite directions, forexample, an increase in rent may be offset by an increase in yield.The table below illustrates the impact of changes in key unobservable inputs onthe carrying / fair value of the Group's properties:                                                 Estimated       Equivalent                                                 rental value    yield                                                 10% increase or 25 basis point                                                 decrease        contraction                                                 £'000           or expansion                                                                 £'000Freehold - external valuation                    180 / (180)     88 / (91)Long Leasehold - external valuation              597 / (594)     298 / (302)11. Mining reserves, plant and equipment                                       Mining   Mining    Motor    Office    Total                                       reserves equipment vehicles equipment £'000                                       £'000    £'000     £'000    £'000Cost at 1 January 2013                 1,651    16,835    159      112       18,757Exchange adjustment                    (341)    (3,479)   (21)     (12)      (3,853)Additions                              -        2,972     76       12        3,060Disposals                              -        -         (49)     -         (49)Cost at 31 December 2013               1,310    16,328    165      112       17,915Accumulated depreciationat 1 January 2012                      1,438    8,462     129      90        10,119Exchange adjustment                    (296)    (1,749)   (15)     (8)       (2,068)Charge for the year                    42       2,757     12       6         2,817Disposals                              -        -         (49)     -         (49)Accumulated depreciation at 31         1,184    9,470     77       88        10,819December 2013Net book value at 31 December 2013     126      6,858     88       24        7,096Cost at 1 January 2012                 1,815    14,467    170      115       16,567Exchange adjustment                    (164)    (1,310)   (11)     (6)       (1,491)Additions                              -        3,678     -        3         3,681Disposals                              -        -         -        -         -Cost at 31 December 2012               1,651    16,835    159      112       18,757Accumulated depreciation at 1 January  1,523    6,905     127      86        8,6412012Exchange adjustment                    (138)    (626)     (7)      (4)       (775)Charge for the year                    53       2,183     9        8         2,253Disposals in year                      -        -         -        -         -Accumulated depreciation at 31         1,438    8,462     129      90        10,119December 2012Net book value at 31 December 2012     213      8,373     30       22        8,63812. Investments held as non-current assets                                                 2013     2013   2012     2012                                                 Joint    Other  Joint    Other                                                 ventures £'000  ventures £'000                                                 assets          assets                                                 £'000           £'000At 1 January                                     3,061    131    2,579    431Transfers                                        -        -      619      (298)Additions                                        75       26     -        -Exchange adjustment                              -        (1)    -        (2)Share of gain/(loss) in joint ventures           99       -      (137)    -Net assets at 31 December                        3,235    156    3,061    131Loan to joint venture:At 1 January                                     1,117    -      -        -Exchange adjustments                             (242)    -      (100)    -Additions                                        109      -      114      -Transfers                                        -        -      1,103    -At 31 December                                   984      -      1,117    -At 31 December                                   4,219    156    4,178    131Provision for diminution in value:At 1 January                                     -        -      -        (283)Transfer                                         -        (4)    -        283Write down of investment                         -        (1)    -        -At 31 December                                   -        (5)    -        -Net book value at 31 December                    4,219    151    4,178    131                                                                  2013   2012                                                                  £'000  £'000Net book value of unquoted investments                            126    124Net book and market value of investments listed on overseas stock 25     7exchanges                                                                  151    13113. Joint venturesThe company owns 50% of the issued share capital of Dragon Retail PropertiesLimited, an unlisted property investment company. The remaining 50% is held byLondon & Associated Properties PLC. Dragon Retail Properties Limited isincorporated in England and Wales. It has issued share capital of 500,000(2012: 500,000) ordinary shares of £1 each.The company owns 12.5% of the units of Langney Shopping Centre Unit Trust, anunlisted property unit trust incorporatedin Jersey. 12.5% of the units in the trust are held by London & AssociatedProperties PLC and 75% are held by Columbus UK GP limited,a partner acting on behalf of Columbus UK Real Estate Fund.The company owns 49% of the issued share capital of Ezimbokodweni Mining (pty)Limited, an unlisted coal production company. The company is incorporated inSouth Africa. It has issued share capital of 100 (2012: 100) ordinary shares ofZAR1 each.                                      Langney Dragon Ezimbokodweni 2013    2012                                      12.5%   50%    49%           £'000   £'000                                      £'000   £'000  £'000Turnover                              165     104    -             269     192Profit and loss(Loss)/Profit before tax              (45)    161    -             116     (135)Taxation                              -       (17)   -             (17)    (2)(Loss)/Profit after taxation          (45)    144    -             99      (137)Balance sheetNon-current assets                    2,043   1,564  981           4,588   4,450Current assets                        242     1,809  3             2,054   1,904Current liabilities                   (88)    (681)  (984)         (1,753) (2,691)Non-current liabilities               (1,385) (952)  -             (2,337) (1,284)Share of net assets at 31 December    812     1,740  -             2,552   2,37914. Subsidiary companiesThe company owns the following ordinary share capital of the principalsubsidiaries which are included within the consolidated financial statements:                                                 Activity Percentage Country of                                                          of                                                                     incorporation                                                          share                                                          capitalMineral Products Limited                         Share    100%       England and                                                 dealing             WalesBlack Wattle Colliery (pty) Limited              Coal     62.5%      South Africa                                                 miningBisichi Coal Mining (pty) Limited                Coal     100%       South Africa                                                 miningBisichi Mining (Exploration) Limited             Holding  100%       England and                                                 company             WalesNinghi Marketing Limited                         Dormant  90.1%      England and                                                                     WalesDetails on the non-controlling interest in subsidiaries are shown under note26.15. Inventories                                                                  2013   2012                                                                  £'000  £'000CoalWashed                                                            481    1,165Run of mine                                                       754    365Work in progress                                                  487    290Other                                                             34     56                                                                  1,756  1,87616. Trade and other receivables                                                                  2013   2012                                                                  £'000  £'000Amounts falling due within one year:Trade receivables                                                 5,658  5,270Amount owed by joint venture                                      2,232  2,000Other receivables                                                 511    134Prepayments and accrued income                                    258    200                                                                  8,659  7,60417. Held for trading investments                                                                  2013   2012                                                                  £'000  £'000Market value of Listed Investments:Listed in Great Britain                                           778    731Listed outside Great Britain                                      44     56                                                                  822    787Original cost of Listed Investments                               737    749Unrealised surplus of market value over cost                      85     3818. Trade and other payables                                                                  2013   2012                                                                  £'000  £'000Trade payablesAmounts owed to joint ventures                                    4,214  4,824Other payables                                                    1,205  1,205Accruals and deferred income                                      704    545                                                                  1,957  2,644                                                                  8,080  9,21819. Financial liabilities - borrowings                                                    Current       Non-current                                                    2013   2012   2013   2012                                                    £'000  £'000  £'000  £'000Bank overdraft (secured)                            3,029  1,084  -      -Bank loan (secured)                                 5,013  5,102  118    86                                                    8,042  6,186  118    86Bank overdraft and loan instalments by reference tothe balance sheet date:Within one year                                                   8,042  6,186From one to two years                                             14     -From two to five years                                            104    86                                                                  8,160  6,272Bank overdraft and loan analysis by origin:United Kingdom                                                    5,366  5,145Southern Africa                                                   2,794  1,127                                                                  8,160  6,272The United Kingdom bank loans and overdraft are secured by way of a firstcharge over the investment properties in the UK which are included in thefinancial statements at a value of £11,559,000. The South African bank loansare secured by way of a first charge over specific pieces of mining equipment,inventory and the debtors of the relevant company which holds the loan whichare included in the financial statements at a value of £8,075,000.Consistent with others in the mining and property industry, the group monitorsits capital by its gearing levels. This is calculated as the net debt (loansless cash and cash equivalents) as a percentage of the equity. At year end thegearing of the group was 38.8% (2011: 25.8%) which was calculated as follows:                                                                2013    2012                                                                £'000   £'000Total debt                                                      8,160   6,272Less cash and cash equivalents                                  (1,707) (1,802)Net debt                                                        6,453   4,470Total equity                                                    16,628  17,315Gearing                                                         38.8%   25.8%20. Provision for rehabilitation                                                                  2013   2012                                                                  £'000  £'000As at 1 January                                                   989    965Exchange adjustment                                               (204)  (87)Unwinding of discount                                             89     111As at 31 December                                                 874    98921. Financial instrumentsTreasury policyAlthough no derivative transactions were entered into during the year, thegroup may use derivative transactions such as interest rate swaps and forwardexchange contracts as necessary in order to help manage the financial risksarising from the group's activities. The main risks arising from the group'sfinancing structure are interest rate risk, liquidity risk, market risk, creditrisk, currency risk and commodity price risk. There have been no changes duringthe year of the main risks arising from the group's finance structure. Thepolicies for managing each of these risks and the principal effects of thesepolicies on the results are summarised below.Interest rate riskInterest rate risk is the risk that the value of a financial instrument orcashflows associated with the instrument will fluctuate due to changes inmarket interest rates. Interest rate risk arises from interest bearingfinancial assets and liabilities that the group uses. Treasury activities takeplace under procedures and policies approved and monitored by the Board tominimise the financial risk faced by the group. Interest bearing assetscomprise cash and cash equivalents which are considered to be short-term liquidassets and loans to joint ventures. Interest bearing borrowings comprise bankloans, bank overdrafts and variable rate finance lease obligations. The ratesof interest vary based on LIBOR in the UK and PRIME in South Africa.As at 31 December 2013, with other variables unchanged, a 1% increase ordecrease in interest rates, on investments and borrowings whose interest ratesare not fixed, would respectively decrease or increase the loss for the year by£18,000 (2012: £19,000). The effect on equity of this change would be anequivalent decrease or increase for the year of £18,000 (2011: £19,000).Liquidity riskThe group's policy is to minimise refinancing risk. Efficient treasurymanagement and strict credit control minimise the costs and risks associatedwith this policy which ensures that funds are available to meet commitments asthey fall due. As at year end the group held borrowing facilities in the UK inBisichi Mining Plc and in South Africa in Black Wattle Colliery (Pty) Ltd.The following table sets out the maturity profile of the financial liabilitiesas at 31 December:                                                                  2013   2012                                                                  £'000  £'000Within one year                                                   15,956 15,239From one to two years                                             38     13From two to five years                                            129    123Beyond five years                                                 134    139                                                                  16,257 15,514The following table sets out the maturity profile of the financial liabilitiesas at 31 December maturing within one year:                                                                         2013                                                                         £'000Within one month                                                         10,207From one to three months                                                 1,998From four to twelve months                                               3,751                                                                         15,956In South Africa, an increase in the structured trade finance facility fromR60million (South African Rand) to R80million was signed by Black WattleColliery (pty) Limited in October 2013 with Absa Bank Limited, a South Africansubsidiary of Barclays Bank PLC. The facility is renewed annually at 30 Juneand is secured against inventory, debtors and cash that are held by BlackWattle Colliery (pty) Limited. This facility comprises of a R60millionrevolving loan to cover the working capital requirements of the group's SouthAfrican operations, and a R20million loan facility to cover guaranteerequirements related to the group's South African mining operations. Subsequentto year end Black Wattle breached one of the covenants of the facility relatedto the accounting net asset value of the company. Management have been indiscussions with the bank to rectify the breach and have no reason to believethe breach will not be rectified or affect the ongoing use of the facility, orthat the facility will not be renewed again at the appropriate times.In the UK the group is working with Royal Bank of Scotland on the renewal ofthe current banking facilities being a £5million term facility and a £1millionoverdraft. The bank has previously agreed to an extension, from its originalexpiry date of 31 December 2012, to 30 June 2013. Whilst discussions areon-going, no further extension has been formalised as the terms for a newfacility are being negotiated. The directors consider that with the assetsecurity available, the level of facilities required should be readilyavailable and consider that a new loan will be agreed, either with RBS or analternative provider, in the near future. This facility is secured against thegroup's UK retail property portfolio. At 31 December 2013 the group was withinits bank borrowing facilities and had not breached any of its covenants.Credit riskThe group is exposed to credit risk on its cash and cash equivalents, trade andother receivables and amounts owed by joint ventures as per the balance sheet.The maximum exposure to credit risk is represented by the carrying amount ofeach financial asset in the balance sheet which at year end amounted to £11,092,000 (2012: £10,323,000). The group's credit risk is primarilyattributable to its trade receivables. The group had amounts due from itssignificant revenue customers at the year end that represented 81% of the tradereceivables balance. These amounts have been subsequently settled.Trade debtor's credit ratings are reviewed regularly. The group only depositssurplus cash with well-established financial institutions of high qualitycredit standing. As at year end the amount of trade receivables held past duedate was £137,000 (2012: £147,000). To date, the amount of trade receivablesheld past due date that has not subsequently been settled is £118,000 (2012: £nil). Management have no reason to believe that this amount will not besettled.Financial assets maturityOn 31 December 2013, cash at bank and in hand amounted to £1,707,000 (2012: £1,802,000) which is invested in short term bank deposits maturing within oneyear bearing interest at the bank's variable rates. Cash and cash equivalentsall have a maturity of less than 3 months.Total financial assets and liabilitiesThe group's financial assets and liabilities are as follows, representing boththe fair value and the carrying value:                                    Loans and   Financial   Assets  2013    2012                                                            at fair                                    receivables Liabilities         £'000   £'000                                                            value                                    £'000       measured at through                                                amortised   profit                                                cost        and                                                            loss                                                £'000                                                            £'000Cash and cash equivalents           1,707       -           -       1,707   1,802Investments held for trading        -           -           822     822     787Other investments                   -           -           151     151     131Trade and other receivables         9,385       -           -       9,385   8,521Bank borrowings                     -           (8,160)     -       (8,160) (6,272)Finance leases                      -           (196)       -       (196)   (202)Other liabilities                   -           (7,901)     -       (7,901) (9,040)                                    11,092      (16,257)    973     (4,192) (4,273)Investments held for trading fall under level 1 of the fair value hierarchyinto which fair value measurements are recognised in accordance with the levelsset out in IFRS 7. Other investments are held at cost. The directors are of theopinion that the difference in value between cost and fair value of otherinvestments is not significant or material. The comparative figures for 2012fall under the same category of financial instrument as 2013.Commodity price riskCommodity price risk is the risk that the group's future earnings will beadversely impacted by changes in the market of commodities. The group isexposed to commodity price risk as its future revenues will be derived based ona contract with a physical off-take partner at prices that will be determinedby reference to market prices of coal at the delivery date.From time to time the group may manage its exposure to commodity price risk byentering into forward sales contracts with the goal of preserving futurerevenue streams.Foreign exchange riskAll trading is undertaken in the local currencies. Funding is also in localcurrencies other than inter-company investments and loans and it is not thegroup's policy to obtain forward contracts to mitigate foreign exchange risk onthese amounts. During 2013 and 2012 the group did not hedge its exposure offoreign investments held in foreign currencies.The table below shows the currency profiles of cash and cash equivalents:                                                                  2013   2012                                                                  £'000  £'000Sterling                                                          139    131South African Rand                                                1,426  1,527US Dollar                                                         142    144                                                                  1,707  1,802Cash and cash equivalents earn interest at rates based on LIBOR in Sterling andPrime in Rand.The tables below shows the currency profiles of net monetary assets andliabilities by functional currency of the group:2013:                                                         Sterling South                                                                       African                                                              £'000                                                                       Rands                                                                       £'000Sterling                                                      (4,082)  -South African Rand                                            768      (1,065)US Dollar                                                     187      -                                                              (3,127)  (1,065)2012:                                                          Sterling South                                                                        African                                                               £'000                                                                        Rands                                                                        £'000Sterling                                                       (4,187)  -South African Rand                                             1,054    (1,296)US Dollar                                                      157      -                                                               (2,976)  (1,296)The directors consider there to be no significant risk from exchange ratemovements of foreign currencies against the functional currencies of thereporting companies within the group. As such no sensitivity analysis isprepared.22. Deferred taxation                                                                  2013   2012                                                                  £'000  £'000Balance at 1 January                                              2,437  1,881Recognised in income                                              (262)  643Exchange adjustment                                               (273)  (87)                                                                  1,902  2,437The deferred tax balance comprises the following:Revaluation of properties                                         713    895Capital allowances                                                1,183  1,312Short-term differences                                            6      230                                                                  1,902  2,43723. Share capital                                                              2013     2012                                                              £'000    £'000Authorised: 13,000,000 ordinary shares of 10p each            1,300    1,300Allotted and fully paid:                                               2013       2012       2013   2012                                               Number of  Number of  £'000  £'000                                               ordinary   ordinary                                               shares     sharesAt 1 January                                   10,556,839 10,556,839 1,056  1,056Shares issued during the year                  80,000     -          8,000  -Outstanding at 31 December                     10,636,839 10,556,839 1,064  1,05624. Other reserves                                                                  2013   2012                                                                  £'000  £'000Equity share options                                              501    442Net premium on share capital in joint venture                     86     86                                                                  587    52825. Share based paymentsDetails of the share option scheme are shown in the Directors' remunerationreport on pages 30 and 31 under the heading Share option schemes which iswithin the audited part of this report. Further details of the share optionschemes are set out below.The Bisichi Mining PLC Unapproved Option Schemes:Year of   Subscription Period within  Number of      Number of    Number ofgrant                                 share                       share          price per    which options                 share          share                       for which      options      for which                       exercisable    options                     options                                                     issued/                                      outstanding at exercised/   outstanding at                                      31 December    (cancelled)  31 December                                      2012                        2013                                                     during year2004      149.0p       Sep 2007 - Sep 80,000         -            80,000                       20142006      237.5p       Oct 2009 - Oct 325,000        -            325,000                       20162010      202.5p       Aug 2013 - Aug 80,000         -            80,000                       20202012      34.0p        Oct 2012 - Sep 233,000        -            233,000                       2022The exercise of options under the Unapproved Share Option Schemes, for certainoption issues, is subject to the satisfaction of objective performanceconditions specified by the remuneration committee, which will conform toinstitutional shareholder guidelines and best practice provisions in force fromtime to time. The performance conditions for the 2004 and 2010 scheme, agreedby members on 23 June 2005 and 31 August 2010 respectively, requires growth innet assets over a three year period to exceed the growth of the retail pricesindex by a scale of percentages. There are no performance conditions attachedto the other schemes.The 2012 options were valued at £212,000 at date of grant using theBlack-Scholes-Merton model with the following assumptions:Expected volatility 38.83%Expected life 4.00 YearsRisk free rate 0.50%Expected dividends 3.48%Expected volatility was determined by reference to the historical volatility ofthe share price over a period commensurate with the option's expected life. Theexpected life used in the model is based on the risk-averse balance likely tobe required by the option holders.                                             2013    2013     2012      2012                                             Number  Weighted Number    Weighted                                                     average            average                                                     exercise           exercise                                                     price              priceOutstanding at 1 January                     718,000 157.7p   798,000   145.2pGranted during year                          -       -        233,000   34.0pCancelled during the year                    -       -        (233,000) 34.0pExercised during the year                    -       -        (80,000)  34.0pOutstanding at 31 December                   718,000 157.7p   718,000   157.6pExercisable at 31 December                   718,000 157.7p   638,000   152.0p26. Non-controlling interest                                                                  2013   2012                                                                  £'000  £'000As at 1 January                                                   444    231Share of profit for the year                                      9      245Exchange adjustment                                               (94)   (32)As at 31 December                                                 359    444The non-controlling interest relates to the disposal of a 37.5% shareholding inBlack Wattle Colliery (pty) Ltd in 2010. The total issued share capital inBlack Wattle Colliery (pty) Ltd was increased from 136 shares to 1,000 sharesat par of R1 (South African Rand) through the following shares issue:- a subscription for 489 ordinary shares at par by Bisichi Mining (Exploration)Limited increasing the number of shares held from 136 ordinary shares to atotal of 675 ordinary shares;- a subscription for 110 ordinary shares at par by Vunani Mining (pty) Ltd;- a subscription for 265 "A" shares at par by Vunani Mining (pty) LtdBisichi Mining (Exploration) Limited is a wholly owned subsidiary of BisichiMining PLC incorporated in England and Wales.Vunani Mining (pty) Ltd is a South African Black Economic Empowerment companyand minority shareholder in Black Wattle Colliery (pty) Ltd.The "A" shares rank pari passu with the ordinary shares save that they willhave no dividend rights until such time as the dividends paid by Black WattleColliery (pty) Ltd on the ordinary shares subsequent to 30 October 2008 willequate to R832,075,000.A non-controlling interest of 15% in Black Wattle Colliery (pty) Ltd isrecognised for all profits distributable to the 110 ordinary shares held byVunani Mining (pty) Ltd from the date of issue of the shares (18 October 2010).An additional non-controlling interest will be recognised for all profitsdistributable to the 265 "A" shares held by Vunani Mining (pty) Ltd after suchtime as the profits available for distribution, in Black Wattle Colliery (pty)Ltd, before any payment of dividends after 30 October 2008, exceedsR832,075,000.27. Related party transactions                                                  At 31 December  During the year                                                  Amounts Amounts Costs     Cash                                                                            paid                                                  owed    owed    recharged                                                                            (to)/by                                                  to      by      (to)/by                                                  related related           related                                                                  related                                                  party   party             party                                                                  party                                                  £'000   £'000             £'000                                                                  £'000Related party:London & Associated Properties PLC (note (a))     -       -       138       (144)Langney Shopping Centre Unit Trust (note (b))     -       (232)   -         (217)Dragon Retail Properties Limited (note (c))       1,205   (2,000) (180)     180Ezimbokodweni Mining (pty) Limited (note (d))     -       (984)   (109)     -As at 31 December 2013                            1,205   (3,216) (151)     (319)London & Associated Properties PLC (note (a))     6       -       172       (533)Langney Shopping Centre Unit Trust (note (b))     -       (15)    -         64Dragon Retail Properties Limited (note (c))       1,205   (2,000) (145)     (1,855)Ezimbokodweni Mining (pty) Limited (note (d))     -       (1,117) (14)      -As at 31 December 2012                            1,211   (3,132) 13        (2,324)London & Associated Properties PLC is a substantial shareholder. LangneyShopping Centre Unit Trust and Dragon Retail Properties Limited are jointventures and are treated as non-current asset investments. Ezimbokodweni Mining(pty) Limited is a joint venture and is treated as a non-current assetinvestment.(a) London & Associated Properties PLC - Property management, office premises,general management, accounting and administration services are provided forBisichi Mining PLC and its UK subsidiaries.(b) Langney Shopping Centre Unit Trust - Langney Shopping Centre Unit Trust isan unlisted property unit trust incorporated in Jersey.(c) Dragon Retail Properties Limited - ("Dragon") is owned equally by thecompany and London & Associated Properties PLC. During 2012 the company lent £2million to Dragon at 6.875 per cent annual interest.(d) Ezimbokodweni Mining (pty) Limited - Ezimbokodweni Mining is a prospectivecoal production company based in South Africa.Details of key management personnel compensation and interest in share optionsare shown in the Directors' Remuneration Report on pages 30 and 31 under theheadings Directors' remuneration, Pension schemes and incentives and Shareoption schemes which is within the audited part of this report. The totalemployers' national insurance paid in relation to the remuneration of keymanagement was £111,000 (2012: 108,000). In 2012 a loan was made to one of thedirectors, Mr A R Heller, for £116,000.28. Employees                                                                  2013   2012                                                                  £'000  £'000The average weekly numbers of employees of the group during theyear were as follows:Production                                                        220    218Administration                                                    20     19                                                                  240    237                                                                  £'000  £'000Staff costs during the year were as follows:Salaries                                                          5,395  5,607Social security costs                                             115    129Pension costs                                                     220    236Share based payments                                              120    28                                                                  5,850  6,00029. Capital commitments                                                                  2013   2012                                                                  £'000  £'000Commitments for capital expenditure approved but not contracted   402    507for at the year endShare of commitment of capital expenditure in joint venture       1,451  1,82930. Head lease commitments and future property lease rentalsPresent value of head Leases on properties                                         Minimum lease   Present value of                                         payments        minimum lease payments                                         2013    2012    2013        2012                                         £'000   £'000   £'000       £'000Within one year                          12      13      12          13Second to fifth year                     49      50      45          47After five years                         1,589   1,527   139         142                                         1,650   1,590   196         202Discounting adjustment                   (1,454) (1,388) -           -Present value                            196     202     196         202Finance lease liabilities are in respect of leased investment property. Many ofthe leases provide for contingent rents in addition to the rents above whichare a proportion of rental income. Finance lease liabilities are effectivelysecured as the rights to the leased asset revert to the lessor in event ofdefault.The group leases out its investment properties under operating leases. Thefuture aggregate minimum rentals receivable under non-cancellable operatingleases are as follows:                                                                  2013   2012                                                                  £'000  £'000Within one year                                                   859    847Second to fifth year                                              3,195  2,718After five years                                                  9,879  10,332                                                                  13,933 13,89731. Contingent liabilitiesBank guarantees have been issued by the bankers of Black Wattle Colliery (pty)Limited on behalf of the company to third parties. The guarantees are securedagainst the assets of the company and have been issued in respect of thefollowing:                                                                  2013   2012                                                                  £'000  £'000Rail siding                                                       62     78Rehabilitation of mining land                                     1,153  1,454Water & electricity                                               54     68Company balance sheetat 31 December 2013                                                         Notes  2013    2012                                                                £'000   £'000Fixed assetsTangible assets                                          33     11,605  11,614Investment in joint ventures                             34     1,810   1,734Other investments                                        34     1,714   1,686Debtors - amounts due in more than one year              35     1,313   1,055                                                                16,442  16,089Current assetsDebtors - amounts due within one year                    35     3,082   3,436Bank balances                                                   799     1,136                                                                3,881   4,572Creditors - amounts falling due within one year          36     (7,425) (7,287)Net current liabilities                                         (3,554) (2,715)Total assets less current liabilities                           12,898  13,374Creditors - amounts falling due in more than one year -  36     (90)    (86)medium term bank loanProvision for liabilities and charges                    37     -       (40)Net assets                                                      12,808  13,248Capital and reservesCalled up share capital                                  23     1,064   1,056Share premium account                                    38     249     169Revaluation reserve                                      38     5,632   5,685Other reserves                                           38     503     443Retained earnings                                        38     5,360   5,895Shareholders' funds                                             12,808  13,248The company financial statements were approved and authorised for issue by theboard of directors on 17 April 2014 and signed on its behalf by:A R Heller G J Casey Company Registration No. 112155Director Directorcompany accounting policiesfor the year ended 31 December 2013The following are the main accounting policies of the company:Accounting conventionThe financial statements have been prepared under the historical costconvention, as modified by the revaluation of investment properties, and inaccordance with applicable UK Generally Accepted Accounting Practice.Dividends receivedDividends are credited to the profit and loss account when received.DepreciationProvision for depreciation on tangible fixed assets is made in equal annualinstalments to write each item off over its useful life. The rates generallyused are:Motor vehicles 25 - 33 per centOffice equipment 10 - 33 per centForeign currenciesMonetary assets and liabilities expressed in foreign currencies have beentranslated at the rates of exchange ruling at the balance sheet date. Allexchange differences are taken to the profit and loss account.Investment propertiesThe investment property portfolio is included in the financial statements atopen market valuation. An external professional valuation is carried outannually by professional external surveyors. Surpluses and deficits arising onvaluations are taken direct to the revaluation reserve. No depreciation oramortisation is provided in respect of freehold and leasehold investmentproperties. The directors consider that this accounting policy, which is not inaccordance with the Companies Act 2006, results in the accounts giving a trueand fair view. Depreciation or amortisation is only one of many factorsreflected in the valuation and the amount which might otherwise have been showncannot be separately identified or quantified.InvestmentsInvestments of the company are stated in the balance sheet as fixed assets atcost less provisions for impairment.Financial instrumentsBank loans and overdraftsBank loans and overdrafts are included in creditors on the company balancesheet net of the unamortised cost of financing.Interest payable on those facilities is expensed as a finance cost in theperiod to which it relates.Interest rate derivativesThe company uses derivative financial instruments to manage the interest raterisk associated with the financing of the group's business. No trading in suchfinancial instruments is undertaken.DebtorsAmounts due from subsidiary undertakings are held at present value where theinterest that would be recognised from discounting future cash payments isconsidered to be material. Other debtors do not carry interest and are statedat their nominal value as reduced by appropriate allowances for estimatedrecoverable amounts.CreditorsCreditors are not interest bearing and are stated at their nominal value.Joint venturesInvestments in joint ventures, being those entities over whose activities thegroup has joint control as established by contractual agreement, are includedat cost, less impairment.Deferred taxationAs required by FRS 19 "Deferred Tax", full provision is made for deferred taxarising from all timing differences between the recognition of gains and lossesin the financial statements and recognition in the tax computation, except forthose timing differences in respect of which the standard specifies thatdeferred tax should not be recognised. Deferred tax assets and liabilities arecalculated at the tax rates expected to be effective at the time the timingdifferences are expected to reverse.Leased assets and obligationsAll leases are "Operating Leases" and the annual rentals are charged to theprofit and loss account on a straight line basis over the lease term. Rent freeperiods or other incentives received for entering into a lease are accountedfor over the period of the lease so as to spread the benefit received over thelease term.PensionsThe company makes contributions to a money purchase scheme and the costs arecharged to the profit and loss account in the period to which they relate.Share based remunerationThe company operates a share option scheme. The fair value of the share optionscheme is determined at the date of grant. This fair value is then expensed ona straight-line basis over the vesting period, based on an estimate of thenumber of shares that will eventually vest. The fair value of options grantedis calculated using a binomial model or Black-Scholes-Merton model. Details ofthe share options in issue are disclosed in the Directors' Remuneration Reporton pages 30 and 31 under the heading Share option schemes which is within theaudited part of this report.32. DividendsThe aggregate amount of dividends comprises:                                                                   2013  2012                                                                   £'000 £'000Final dividends in respect of prior year but not recognised as     425   422liabilities in that year:The aggregate amount of dividends to be paid and not recognised as liabilitiesas at year end is £425,000 (2012: £422,000).33. Tangible fixed assets                                        Investment                                        properties                                        Freehold Long      Motor    Office    Total                                        £'000    leasehold vehicles equipment £'000                                                 £'000     £'000    £'000Cost or valuation at 1 January 2013     8,889    2,723     48       53        11,713Additions                               -        -         38       10        48Disposals                               -        -         (49)     -         (49)Revaluation                             146      (199)     -        -         (53)Cost or valuation at 31 December 2013   9,035    2,524     37       63        11,659At valuation                            9,035    2,524     -        -         11,559At cost                                 -        -         37       63        100                                        9,035    2,524     37       63        11,659Accumulated depreciation at 1 January   -        -         48       51        992013Charge for the year                     -        -         2        2         4Disposals                               -        -         (49)     -         (49)Accumulated depreciation at 31 December -        -         1        53        542013Net book value at 31 December 2013      9,035    2,524     36       10        11,605Net book value at 31 December 2012      8,889    2,723     -        2         11,614Details of historical cost of investment properties are shown in note 10.34. Investments                                         Joint    Shares Loans  Other       Total                                         ventures £'000  £'000  investments £'000                                         shares                 £'000                                         £'000Cost at 1 January 2013                   1,734    361    1,325  -           1,686Invested during year                     76       -      3      26          29Cost at 31 December 2013                 1,810    361    1,328  -           1,715Provision for impairmentAs at 1 January                          -        -      -      -           -Transfer                                 -        -      -      (1)         (1)As at 31 December 2013                   -        -      -      (1)         (1)Net book value at 31 December 2013       1,810    361    1,328  25          1,714Net book value at 31 December 2012       1,734    361    1,325  -           1,686Other investments comprise £25,000 (2012: £nil) shares.Investments in subsidiaries are detailed in note 14. In the opinion of thedirectors the aggregate value of the investment in subsidiaries is not lessthan the amount shown in these financial statements.35. Debtors                                                                  2013   2012                                                                  £'000  £'000Amounts due within one year:Amounts due from subsidiary undertakings                          295    928Trade receivables                                                 163    181Other debtors                                                     135    128Joint venture                                                     2,232  2,000Prepayments and accrued income                                    257    199                                                                  3,082  3,436Amounts due in more than one year:Amounts due from subsidiary undertakings                          1,295  1,055Deferred taxation                                                 18     -                                                                  1,313  1,05536. Creditors                                                                  2013   2012                                                                  £'000  £'000Amounts falling due within one year:Bank overdraft (secured)                                          269    59Bank loan (secured)                                               5,007  5,000Joint venture                                                     1,205  1,205Current taxation                                                  2      2Other taxation and social security                                95     86Other creditors                                                   323    233Accruals and deferred income                                      524    702                                                                  7,425  7,287Amounts falling due in more than one year:Bank loan (secured)                                               90     86                                                                  2013   2012                                                                  £'000  £'000Bank and other loan instalments by reference to the balance sheetdate:Within one year                                                   5,007  5,000From one to two years                                             7      -From two to five years                                            83     86                                                                  5,097  5,086The bank loan of the company is secured by a charge over freehold and longleasehold properties.37. Provisions for liabilities                                                                  2013   2012                                                                  £'000  £'000Deferred taxationBalance at 1 January                                              40     -Provision                                                         -      40Transfer                                                          (40)   -                                                                  -      40No provision has been made for the approximate taxation liability at 23.5%(2012: 24.5%) of £713,000 (2012: £895,000) which would arise if the investmentproperties were sold at the stated valuation.38. Share capital & reserves                             Share   Share   Revaluation Other   Retained Shareholders                             capital premium reserve     reserve earnings funds                             £'000   £'000   £'000       £'000   £'000    £'000Balance at 1 January 2013    1,056   169     5,685       443     5,895    13,248Dividend paid                -       -       -           -       (425)    (425)Revaluation of investment    -       -       (53)        -       -        (53)propertyShare options                8       80      -           60      -        148Retained loss for the year   -       -       -           -       (110)    (110)Balance at 31 December 2013  1,064   249     5,632       503     5,360    12,808A profit and loss account for Bisichi Mining PLC has not been presented aspermitted by Section 408(2) of the Companies Act 2006. The loss for thefinancial year, before dividends, was £110,000 (2012: Profit: £164,000)Details of share capital are set out in note 23 and details of the shareoptions are shown in the Directors' Remuneration Report on page 31 under theheading Share option schemes which is within the audited part of this reportand note 25.39. Related party transactions                                                       At 31    During the year                                                       December                                                       Amounts  Costs     Cash                                                       owed               paid                                                                recharged                                                       by       /         (to)/                                                       related            by                                                       party    accrued                                                                          related                                                       £'000    (to) / by                                                                          party                                                                related                                                                party     £'000                                                                £'000Related party:Black Wattle Colliery (pty) Ltd (note (a))             (2,514)  (1,264)   1,177Ninghi Marketing Limited (note (b))                    (102)    -         -As at 31 December 2013                                 (2,616)  (1,264)   (1,177)Black Wattle Colliery (pty) Ltd (note (a))             (2,921)  (1,396)   1,398Ninghi Marketing Limited (note (b))                    (102)    -         -As at 31 December 2012                                 (3,023)  (1,396)   1,398(a) Black Wattle Colliery (pty) Ltd - Black Wattle Colliery (pty) Ltd is a coalmining company based in South Africa.(b) Ninghi Marketing Limited - Ninghi Marketing Limited is a dormant coalmarketing company incorporated in England & Wales.In addition to the above, the company has issued a company guarantee ofR17,000,000 (2012: R17,000,000) (South African Rand) to the bankers of BlackWattle Colliery (pty) Ltd in order to cover bank guarantees issued to thirdparties in respect of the rehabilitation of mining land.A provision of £102,000 has been raised against the amount owing by NinghiMarketing Limited as the company is dormant.In 2012 a loan was made to one of the directors, Mr A R Heller, for £116,000.Interest is repayable on the loan at a rate of 6.14%. There is no fixedrepayment date and no repayments were made during the year.Under Financial Reporting Standard 8 Related Party Disclosures, the company hastaken advantage of the exemption from disclosing transactions with other whollyowned group companies.Details of other related party transactions are given in note 27 of the Groupfinancial statements.
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