Annual Report • Dec 31, 2011
Annual Report
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Increase in average monthly production in the second half of the year to an average of 135,000 metric tonnes
UK property portfolio continues to perform well
Independent Auditor's report
Consolidated income statement
I am pleased to report to shareholders that a strong performance by Black Wattle, our South African coal mining subsidiary, in the second half of the year has resulted in the group recouping most of the losses incurred in the fi rst half. Although the group reported a small trading loss before exchange losses and tax of £235,000 for the year, it generated a trading profi t of £1.5million in the second half of the year.
A number of important events have taken place in the second half which have accelerated the turnaround at Black Wattle. Key among these were the opening of a third opencast pit early in the second half and selling some of our coal into markets that require a lower quality product.
As a result of the opening of the third opencast pit, the mine's monthly production in the second half of the year increased to an average of 135,000 metric tonnes. This compares favourably with the average monthly production of 110,000 metric tonnes achieved in the fi rst half of the year. A further increase in the mine's monthly production is scheduled to impact in 2012.
The selling of some of our coal into markets that require lower quality product has contributed signifi cantly to Black Wattles profi tability. Although the prices are lower in these markets, the higher yield that can be achieved through the washing plant to attain these lower qualities more than offsets the price reduction.
On the marketing side, although export prices have remained relatively stable over the year, prices have increased signifi cantly in our domestic markets to catch up with the higher export prices - since June last year to date we have seen an average increase in the domestic price of over 30% free on mine. Demand for our product in both markets remains strong, helped by the substantial improvement in the performance of Transnet, the State rail provider.
As previously announced, we are pleased to report that Black Wattle has been granted use of an annual allocation of 87,500 tonnes of export tonnage at Richards Bay Coal Terminal. This gives Black Wattle direct access to the coal export market and I would like to thank Vunani Ltd, our co-shareholder in Black Wattle, for all its hard work in helping Black Wattle obtain this allocation.
On health and safety, I am very pleased to report that Black Wattle had another very good year. For further information on this please refer to the Mining Review in this report.
As announced on 26 January 2012, the Company has entered into an agreement to dispose of its 49% shareholding in Ezimbokodweni Mining (Pty) Ltd. Consideration for the sale is ZAR 54.2million in cash, which is a substantial premium to the cost of our investment. Ezimbokodweni was established in 2005 with Endulwini Coal Limited to acquire the Pegasus Reserve, a shallow coal deposit located in the Witbank coalfi eld of Mpumalanga. Since then, Ezimbokodweni has been negotiating with the owner of the reserve, BHP Billiton Energy Coal South Africa Limited and the South African Department of Mineral Resources ("DMR") to fi nalise the acquisition and prepare for opencast mining.
In early 2011, following the intervention of the DMR, the Company agreed to dispose of its stake in Ezimbokodweni. The agreement made on 26 January 2012 was conditional on the satisfaction by 15 May 2012 of conditions precedent, the last of which is the consent of the DMR, which is awaited. A further announcement will take place as soon as possible and, assuming completion takes place, the proceeds will be used for the further development of the group.
The company's UK retail property portfolio continues to generate signifi cant revenue. During the year it acquired a 12.5% interest in a shopping centre in Eastbourne for just under £1million cash; the net initial yield is 8% and there is development potential. London and Associated Properties PLC manage this and the Company's other properties and voids across the portfolio were at the very low level of 2.7%.
The Board paid an interim cash dividend of 1p during the year. The Directors now recommend the declaration of a fi nal dividend of 3p (2010: 3p) payable in cash on 6 August 2012 to shareholders registered at the close of business on 6 July 2012.
On behalf of the Board I would like to thank all of our staff for their hard work during the course of the year.
In 2012 to date the group has continued to benefi t from the higher production and prices being achieved at Black Wattle and we therefore look forward to the coming year with confi dence.
Michael Heller Chairman 18 April 2012
Monthly production in the second half of the year increased to an average of 135,000 metric tonnes
As noted in the Chairman's statement, a number of important events have taken place in the second half of the year that have accelerated the turnaround at Black Wattle, our direct mining subsidiary. The opening of a third opencast pit and the selling of our coal into new markets impacted significantly on the mines profitability. In addition, higher prices for our coal were achieved throughout the second half of 2011 and have continued into 2012.
Looking forward, we expect to continue to see the value of these events contributing strongly to Black Wattle's profitability.
Although total Run of Mine production remained consistent with the prior year at 1.45 million metric tonnes (2010: 1.46 million metric tonnes), overall monthly production through the washing plant increased from 110,000 metric tonnes in the first half of 2011 to 135,000 metric tonnes in the second half. As stated above, this increase in production was a direct result of the opening of a third opencast pit at Black Wattle.
As we look forward into 2012, the ability to source production from three different opencast pits will allow Black Wattle to maintain overall monthly production at this higher level. A further increase in production is expected to impact at Black Wattle in the middle of 2012 as we look to expand further our opencast reserves.
Our ability to increase production at Black Wattle has largely been helped by the improvement in the performance of Transnet, the State rail provider. In 2011, Transnet railed 65.7million tonnes to Richards Bay Coal Terminal compared to 62.8million tonnes in 2010. As a result, our stockpiles have remained low whilst demand for our coal has remained strong.
International coal prices stayed relatively stable in 2011. The average weekly price of Free on Board (FOB) Coal from Richards Bay Coal Terminal (API4) was in a range of US\$105.00 to US\$120.00 per metric tonne for the most of 2011. Although the coal price ended the year near the bottom of the range at \$105 per metric tonne, a depreciation in the South African Rand in the second half of the year offset this decline. Prices in the domestic steam coal market continued to increase significantly in the second half of the year and into 2012 – catching up with the higher export prices being achieved.
In the second half of the year we started selling some of our coal into a lower quality market. As noted in the Chairman's Statement, although the prices are lower in these markets, the higher yield that can be achieved through the washing plant to attain these lower qualities more than offsets the price reduction. We have found the demand for this product to be strong in both the domestic and export market. This gives us the flexibility to sell into both markets for the highest return.
As also noted in the Chairman's Statement, we are pleased to report that Black Wattle has been granted use of an annual allocation of 87,500 tonnes of export tonnage at Richards Bay Coal Terminal. The allocation falls under the Quattro Programme which allows junior black economic-empowerment coal producers direct access to the coal export market. We look forward to developing this opportunity along with Vunani Limited our black economic-empowered shareholders at Black Wattle.
Black Wattle is committed to creating a safe and healthy working environment for its employees and the health and safety of our employees is of the utmost importance. In addition to the required personnel appointments and assignment of direct health and safety responsibilities on the mine, a system of Hazard Identifi cation and Risk Assessments has been designed, implemented and maintained at Black Wattle.
Health and Safety training is conducted on an ongoing basis. We are pleased to report all employees to date have received training in hazard identifi cation and risk assessment in their work areas.
A medical surveillance system is also in place which provides management with information used in determining measures to eliminate, control and minimise employee health risks and hazards and all Occupational Health hazards are monitored on an ongoing basis.
Various systems to enhance the current HSE strategy have been introduced as follows:
HSE performance in 2011:
Under the terms of the mine's Environmental Management Programme approved by the Department of Mineral Resource ("DMR"), Black Wattle undertakes a host of environmental protection activities to ensure that the approved Environmental Management Plan is fully implemented. In addition to these routine activities, Black Wattle regularly carries out environmental monitoring activities on and around the mine, including evaluation of ground water quality, air quality, noise and lighting levels, ground vibrations, air blast monitoring, and assessment of visual impacts.
Black Wattle Colliery has substantially improved its water management by erecting a new pollution control dam as well as upgrading existing dams in consultation with the Department of Water Affairs and Forestry.
We are very pleased to report that Black Wattle received their approved water license from the Department of Water Affairs and Forestry. An external audit was also conducted and completed on the approved water license.
Our ability to increase production at Black Wattle has largely been helped by the improvement in the performance of Transnet, the State rail provider
Black Wattle Colliery is committed to true transformation and empowerment within the company as well as poverty eradication within the surrounding and labour providing communities.
Black Wattle is committed to providing opportunities for the sustainable socio-economic development of the company's stakeholders:
The key focus areas in terms of the detailed SLP programmes were updated as follows:
In compliance with the Mining Charter and the Mineral and Petroleum Resource Development Act, Black Wattle has implemented a BEE-focussed procurement policy which strongly encourages our suppliers to establish and maintain BEE credentials. At present, BEE companies provide approximately 52 percent of Black Wattle's equipment and services. We closely monitor our monthly expenditure and welcome potential BEE suppliers to compete for equipment and service contracts at Black Wattle. Black Wattle also sells much of its coal products to empowered companies.
Black Wattle is committed to achieving the goals of the Employment Equity Act and is pleased to report the following:
Since permissions were granted in February 2010 to mine opencast the reserves at Black Wattle, management have implemented several projects to ensure Black Wattle has adequate infrastructure and capacity in place to increase production from our opencast reserves. As a result, the group is in a strong position to take advantage of the higher market prices and the increased production at Black Wattle.
Going forward, I am confi dent that 2012 should be successful year for our South African operations.
Andrew Heller Managing Director 18 April 2012
railway sidings
opencast area 1
The group is in a strong position to take advantage of the higher market prices and the increased production at Black Wattle
old opencast under rehab
washing plant
discard dump offices
opencast area 3
The Chairman's Statement and the Mining Review on the preceding pages 2 to 9 give a comprehensive review and assessment of the group's activities during the past year and prospects for the forthcoming year.
Coal price risk: The group's mining operational earnings are largely dependent on movements in the coal price. It does have the fl exibility in terms of markets where it can sell its coal domestically (to local industrial consumers and the power industry) or to export to various international markets.
Coal washing: The group's mining operation's earnings are highly sensitive to coal washing, therefore a stoppage or disruption to the process could signifi cantly impact earnings. However, there is scope to raise earnings substantially if the yield from the washing process is improved even marginally.
Mining risk: Attached to mining there are inherent health and safety risks. Any such safety incidents disrupt operations, and can slow or even stop production. The group has a comprehensive Health and Safety programme in place to mitigate this. As with many mining operations, the reserve that is mined has the risk of not having the qualities expected from geological analysis. There is scope to increase production by buying in coal to compensate for disruptions in production.
Currency risk: The group's South African operations are sensitive to currency movements, especially those between the South African Rand, US Dollar and British Pound.
New reserves and mining permissions: The acquisition of additional reserves, permissions to mine and new mining opportunities in South Africa generally are contingent on a number of factors outside of the group's control, e.g. approval by the Department of Mineral Resources.
Regulatory risk: The group's South African operations are subject to the government Mining Charter and scorecard which primarily seeks to:
The group continues to make good progress towards meeting the Charter requirements. However any regulatory changes to these, or failure to meet existing targets, could adversely affect the mine's ability to retain its mining rights in South Africa.
Transport risk: At present the government owned Transnet Freight Rail (TFR) is the sole rail freight provider for coal in South Africa. The group's South African operations are therefore reliant on TFR for delivery of its export quality coal directly or indirectly via the Southern African ports to its end customers.
Power supply risk: The current utility provider for power supply in South Africa is the government run Eskom. Eskom has recently undergone capacity problems resulting in power cuts and lack of provision of power supply to new projects. The group's mining operations have to date not been affected by power cuts.
Flooding risk: The group's mining operations are susceptible to seasonal fl ooding which could disrupt production. Management monitors water levels on an ongoing basis and various projects have been completed, including the construction of additional dams, to mitigate this risk.
Environmental risk: The group's South African mining operations are required to adhere to local environmental regulations. Details of the groups Environment Management Programme is disclosed in the Mining review on page 6.
The granting of allocation at Richards Bay Coal Terminal allows Black Wattle direct access to the coal export market
Health & Safety risk: The group's South African mining operations are required to adhere to local Health and Safety regulations. Details of the group's Health and Safety Programme is disclosed in the Mining Review on page 6.
Labour risk: The group's mining operations and coal washing plant facility are labour intensive and unionised. Any labour disputes, strikes or wage negotiations may disrupt production and impact earnings.
We seek to balance the high risk of our mining operations with a dependable cash fl ow from our UK property investment operations. Fluctuations in property values, which are refl ected in the Consolidated Income Statement and Balance Sheet, are dependent on an annual valuation of commercial properties. A fall in UK commercial property can have a marked effect on the profi tability and the net asset value of the group. However, due to the long term nature of the leases, the effect on cash fl ows from property investment activities will remain stable as long as tenants remain in operation.
The group seeks to expand its operations in South Africa through the acquisition of additional coal reserves.
The group's UK activities are principally property investment whereby we provide premises which are rented to retail businesses. We seek to provide those tenants with good quality premises from which they can operate in an effi cient and environmentally sound manner.
Our South African mining operations are regulated by and are operated in compliance with all relevant prevailing national and local legislation. Employment terms and conditions provided to mining staff meet or exceed the national average.
In the UK, a term loan facility of £5million and an overdraft facility of £2million were signed in March 2010 with Royal Bank of Scotland. The term loan facility will expire in December 2012 and is secured against the group's UK retail property portfolio. The property portfolio was externally valued at 31 December 2011 and the value of UK investment properties attributable to the group at year end was £12.1million (2010: £12.1million).
The group intends to negotiate new facilities before the expiry of the current facility and have obtained confi rmation from the Royal Bank of Scotland that they are not aware of any reason why the bank should not continue to support the company following the expiry of the current facilities.
In South Africa, a structured trade fi nance facility of R60million (South African Rand) was signed in March 2010 with Absa Bank Limited, a South African subsidiary of Barclays Bank PLC. This facility comprises of a R40million revolving loan to cover the working capital requirements of the group's South African operations, and a R20million loan facility to cover Guarantee requirements related to the group's South African mining operations. The R60million facility is renewed annually and is secured against inventory, debtors and cash that are held in the group's South African operations.
The group's cash and cash equivalents (excluding bank overdrafts) at year end were £4.0million (2010: £5.4 million). The net assets of the group at year end were £17.0million (2010: £18.3million).
Further details on the group's fi nancial position are stated in the Consolidated Balance Sheet on page 30.
The group's cashfl ow position remains strong. Cash and cash equivalents (including bank overdrafts) of the group at year end were £1.1million (2010: £4.0million).
Further details on the group's cashfl ow position are stated in the Consolidated Cashfl ow Statement on page 32. Cash and cash equivalents as per the Cashfl ow Statement comprise Cash and cash equivalents as presented in the balance sheet and bank overdrafts (secured).
The Key Performance Indicators for our South African mining activities are
The Key Performance Indicator for our UK property investment operations is the Net Property Valuation as shown in note 10.
MA, FCA (Chairman)
Andrew R Heller MA, ACA (Managing Director)
Garrett Casey CA (SA) (Finance Director)
Robert Grobler Pr Cert Eng (Director of mining)
Christopher A Joll MA (Non-executive) Christopher Joll was appointed a Director on 1 February 2001. He holds a number of non-executive directorships of un-quoted companies. He is chairman of MJ2 Financial Limited, a public relations consultancy company specialising in real estate.
London W1J 6NE Black Wattle Colliery Directors Robert Corry (Chairman) Andrew Heller (Managing Director)
Robert Grobler Ethan Dube Garrett Casey
Director of Property Mike J Dignan FRICS
(Incorporated in England and Wales)
Website
E-mail [email protected]
PKF (UK) LLP
Principal bankers
United Kingdom Barclays Bank PLC Investec Bank PLC National Westminster Bank PLC
South Africa Absa Bank (SA) First National Bank (SA) Standard Bank (SA)
Corporate solicitors United Kingdom Memery Crystal LLP, London
Olswang LLP, London Pinsent Masons LLP, London
South Africa Routledge Modise in association with Eversheds, Johannesburg Tugendhaft Wapnick Banchetti and Partners, Johannesburg
Stockbrokers Shore Capital & Corporate Ltd
Capita Registrars The Registry 34 Beckenham Road Beckenham Kent, BR3 4TU Tel: 0871 664 0300 (Calls cost 10p per minute + +44 208 639 3399 for overseas callers www.capitaregistrars.com
Email: [email protected]
| 2011 £'000 |
2010 £'000 |
2009 £'000 |
2008 £'000 |
2007 £'000 |
|
|---|---|---|---|---|---|
| Consolidated income statement | |||||
| Revenue | 29,909 | 32,824 | 29,016 | 25,979 | 16,693 |
| Operating (loss)/profit | (1,328) | (1,705) | 4,892 | 2,616 | (191) |
| (Loss)/profit before tax | (1,450) | (1,813) | 5,003 | 2,117 | (459) |
| Trading Income | (1,210) | (2,209) | 4,698 | 6,031 | 2,302 |
| Revaluation Income | (240) | 396 | 305 | (3,914) | (2,761) |
| Profit before interest, taxation and depreciation | 1,150 | 770 | 7,534 | 4,383 | 801 |
| Consolidated balance sheet | |||||
| Investment properties | 12,068 | 12,110 | 11,865 | 11,773 | 14,725 |
| Fixed asset investments | 2,727 | 3,757 | 3,755 | 3,406 | 2,991 |
| 14,795 | 15,867 | 15,620 | 15,179 | 17,716 | |
| Current asset investments | 2,515 | 605 | 510 | 627 | 770 |
| 17,310 | 16,472 | 16,130 | 15,806 | 18,486 | |
| Other assets less liabilities | (537) | 1,482 | 3,170 | (160) | (3,127) |
| Total equity attributable to equity shareholders | 16,773 | 17,954 | 19,300 | 15,646 | 15,359 |
| Net assets per ordinary share | 158.9p | 171.8p | 184.7p | 149.7p | 147.0p |
| Dividend per share | 4.00p | 4.00p | 4.00p | 3.50p | 3.0p |
| 13 March 2012 | First interim management statement |
|---|---|
| 31 May 2012 | Annual General Meeting |
| 6 August 2012 | Payment of final dividend for 2011 (if approved) |
| Late August 2012 | Announcement of half-year results to 30 June 2012 |
| 16 November 2012 | Second interim management statement |
| Late April 2013 | Announcement of results for year ending 31 December 2012 |
The company continues its mining activities. Income for the year was derived from sales of coal from its South African operations. The company also has a property investment portfolio for which it receives rental income.
The results for the year and state of affairs of the group and the company at 31 December 2011 are shown on pages 29 to 55 and in the Mining Review and Business Review on pages 5 to 15. Future developments and prospects are also covered in the Mining Review. Over 99 per cent of staff are employed in the South African coal mining industry - employment matters and health and safety are dealt with in the Mining and Business Reviews.
The management report referred to in the Director's responsibilities statement encompasses this Directors' Report, the Chairmans' Statement on page 2 and the Mining Review and Business Review on pages 5 to 15.
The environmental issues of the group's South African coal mining operations are covered in the Mining Review and Business Review on pages 5 to 15.
The group's UK activities are principally property investment whereby premises are provided for rent to retail businesses.
The group seeks to provide those tenants with good quality premises from which they can operate in an efficient and environmentally friendly manner. Wherever possible, improvements, repairs and replacements are made in an environmentally efficient manner and waste re-cycling arrangements are in place at all the company's locations.
The group's policy is to attract staff and motivate employees by offering competitive terms of employment. The group provides equal opportunities to all employees and prospective employees including those who are disabled. The Mining Review gives details of the group's activities and policies concerning the employment, training, health and safety and community support and social development concerning the group's employees in South Africa.
An interim dividend for 2011 of 1p was paid on 3 February 2012 (Interim 2010: 1p). The directors recommend the payment of a final dividend for 2011 of 3p per ordinary share (2010: 3p) making a total dividend for 2011 of 4p (2010: 4p).
Subject to shareholder approval, the total dividend per Ordinary Share for 2011 will be 4p per Ordinary Share.
The final dividend will be payable on Monday 6 August 2012 to shareholders registered at the close of business on 6 July 2012.
The investment property portfolio is stated at its open market value of £12,068,000, at 31 December 2011(2010:£ 12,110,000) as valued by professional external valuers. The open market value of the company's shareholding of investment properties included within its investments in joint ventures is £3,505,000 (2010: £1,568,000).
Note 22 to the financial statements sets out the risks in respect of financial instruments. The Board reviews and agrees overall treasury policies, delegating appropriate authority to the managing director. Financial instruments are used to manage the financial risks facing the group – speculative transactions are not permitted. Treasury operations are reported at each Board meeting and are subject to weekly internal reporting.
The directors of the company for the whole year were M A Heller, A R Heller, GJ Casey, C A Joll, R J Grobler (a South African citizen), and J A Sibbald.
The directors retiring by rotation are Mr R G Grobler, Mr A R Heller, Mr C A Joll and Mr J A Sibbald who offer themselves for re-election. The board recommends their re-election. Brief details of the directors standing for re-election are:
Robert Grobler was appointed as General Mine Manager by Black Wattle Colliery (Proprietary) Ltd on 1 May 2000. He was appointed to the board of Bisichi Mining plc as Director of Mining on 22 April 2008. He has over 40 years experience in the South African coal mining industry. He is a professional engineer and member of the South African Coal Managers Association.
Andrew Heller has been an executive director since 1998. He is a Chartered Accountant and has been employed by the group since 1994 under a contract of employment determinable at three months notice.
Christopher Joll has been a director since 1 February 2001 and has a contract of service determinable at three months notice. He holds a number of non-executive directorships of un-quoted companies. He is chairman of MJ2 Limited, a public relations consultancy specialising in real estate.
John Sibbald has been a non-executive director since 1988. He is a retired chartered accountant. For most of his career he was employed in stockbroking in the City of London where he specialised in mining and international investment. He has a contract of service determinable at three months notice.
No director had any material interest in any contract or arrangement with the company during the year other than as shown in this report.
The interests of the directors in the shares of the company, including family and trustee holdings where appropriate, were as follows:
| Beneficial | Non-Beneficial | ||||
|---|---|---|---|---|---|
| 31.12.2011 | 1.1.2011 | 31.12.2011 | 1.1.2011 | ||
| M A Heller | 148,783 | 146,666 | 181,344 | 181,344 | |
| A R Heller | 785,012 | 772,000 | – | – | |
| C A Joll | – | – | – | – | |
| J A Sibbald | – | – | – | – | |
| R J Grobler | – | – | – | – | |
| G J Casey | – | – | – | – |
There have not been any changes in the above shareholdings since 31 December 2011 and the date of this report.
Details of the options to subscribe for new ordinary shares of the company granted to the directors are contained under "Share option schemes" in the remuneration report on page 25.
The following have advised that they have an interest in 3 per cent or more of the issued share capital of the company as at 17 April 2012:
London & Associated Properties PLC – 4,432,618 shares representing 41.99 per cent of the issued capital. (M A Heller is a director and shareholder of London & Associated Properties PLC).
| M A Heller – 330,117 shares representing 3.13 per cent of the issued capital. |
|
|---|---|
| A R Heller – 785,012 share representing 7.43 per cent of the issued capital. |
Neil Kirton – 382,000 shares representing 3.65 per cent of the issued capital.
The directors in office at 31 December 2011 have confirmed that they are aware that there is no relevant audit information of which the auditor is unaware. Each of the directors has confirmed that they have taken all reasonable steps they ought to have taken as directors to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor.
The company has adopted the Guidance for Smaller Quoted Companies (SQC) published by the Quoted Companies Alliance. The Alliance provides guidance to SQC and their guidance covers the implementation of The UK Corporate Governance Code for SQC. The paragraphs below set out how the company has applied this guidance during the year. The company has complied with the Quoted Companies Alliance guidance throughout the year, except insofar that non-executive directors are not appointed for fixed terms (section A.7.2).
The group's Board appreciates the value of good corporate governance not only in the areas of accountability and risk management, but also as a positive contribution to business prosperity. The Board endeavours to apply corporate governance principals in a sensible and pragmatic fashion having regard to the circumstances of the group's business. The key objective is to enhance and protect shareholder value.
During the year the Board comprised the executive chairman, the managing director, two other executive directors and two nonexecutive directors. Their details appear on page 16. The Board is responsible to shareholders for the proper management of the group. A statement of directors' responsibilities in respect of the accounts is set out on page 27. The non-executive directors have a particular responsibility to ensure that the strategies proposed by the executive directors are fully considered. To enable the Board to discharge its duties, all directors have full and timely access to all relevant information and there is a procedure for all directors, in furtherance of their duties, to take independent professional advice, if necessary, at the expense of the group. The Board has a formal schedule of matters reserved to it and meets bi-monthly.
The Board is responsible for overall group strategy, approval of major capital expenditure projects and consideration of significant financing matters.
The following Board committees, which have written terms of reference, deal with specific aspects of the group's affairs:
• The nomination committee is chaired by Christopher Joll and comprises the non-executive directors and the executive chairman. The committee is responsible for proposing candidates for appointment to the Board, having regard to the balance and structure of the Board. In appropriate cases recruitment consultants are used to assist the process. Each director is subject to re-election at least every three years.
The audit committee also undertakes a formal assessment of the auditors' independence each year which includes:
The audit committee report is set out on page 26.
An analysis of the fees payable to the external audit firm in respect of both audit and non-audit services during the year is set out in Note 4 to the financial statements.
The performance of the board as a whole and of its committees and the non-executive directors is assessed by the chairman and the managing director and is discussed with the senior independent director. Their recommendations are discussed at the nomination committee prior to proposals for re-election being recommended to the Board. The performance of executive directors is discussed and assessed by the remuneration committee. The senior independent director meets regularly with the chairman and both the executive and non-executive directors individually outside of formal meetings. The directors will take outside advice in reviewing performance but have not found this necessary to date.
The senior independent non-executive director is Christopher Joll. The other independent non-executive director is John Sibbald.
Christopher Joll has been a non-executive director for over ten years. As a consequence he does not fully meet the criteria for independence set out in the UK Corporate Governance Code (The Code).
John Sibbald has been a non-executive director of Bisichi for over twenty years – the maximum set out in The Code criteria for independence is nine years. For this reason he does not fully meet the criteria set out in The Code for independence.
The Board encourages Christopher Joll and John Sibbald to act independently. The criteria for independence on which they fail to meet The Code's criteria for independence, namely length of service and a connection with the company's public relations advisers, should not, and has not, resulted in their inability or failure to act independently. In the opinion of the Board, Christopher Joll and John Sibbald continue to fulfil their role as independent non-executive directors.
The independent directors regularly meet prior to Board meetings to discuss corporate governance issues.
The number of meetings during 2011 and attendance at regular Board meetings and Board committees was as follows:
| Meetings Held | Meetings Attended | ||
|---|---|---|---|
| M A Heller | Board | 6 | 6 |
| Nomination committee | 1 | 1 | |
| A R Heller | Board | 6 | 6 |
| Audit committee | 2 | 2 | |
| G J Casey | Board | 6 | 5 |
| R J Grobler | Board | 6 | 1 |
| C A Joll | Board | 6 | 6 |
| Audit committee | 2 | 2 | |
| Nomination committee | 1 | 1 | |
| Remuneration committee | 1 | 1 | |
| J A Sibbald | Board | 6 | 6 |
| Audit committee | 2 | 2 | |
| Nomination committee | 1 | 1 | |
| Remuneration committee | 1 | 1 |
The audit committee had two meetings in 2011 with the external auditors present, prior to release of the 2011 annual results. Members of the committee discussed the 30 June 2011 half year results prior to their approval by the full Board. The nomination committee held one meeting during the year.
The directors are responsible for the group's system of internal control and review of its effectiveness annually. The Board has designed the group's system of internal control in order to provide the directors with reasonable assurance that its assets are safeguarded, that transactions are authorised and properly recorded and that material errors and irregularities are either prevented or would be detected within a timely period. However, no system of internal control can eliminate the risk of failure to achieve business objectives or provide absolute assurance against material misstatement or loss.
The key elements of the control system in operation are:
During the period, the audit committee has reviewed the effectiveness of internal control as described above. The Board receives periodic reports from its committees.
There are no significant issues disclosed in the Annual Report for the year ended 31 December 2011 (and up to the date of approval of the report) concerning material internal control issues. The directors confirm that the Board has reviewed the effectiveness of the system of internal control as described during the period.
Communication with shareholders is a matter of priority. Extensive information about the group and its activities is given in the Annual Report, which is made available to shareholders. Further information is available on the company's website, www.bisichi.co.uk. There is a regular dialogue with institutional investors. Enquiries from individuals on matters relating to their shareholdings and the business of the group are dealt with informatively and promptly.
The company agrees contract terms with suppliers when orders are placed. Payments to suppliers are made in accordance with those terms, provided that suppliers have complied with all relevant terms and conditions. Trade creditors outstanding at the year-end represented 52 days trade purchases (2010 – 39 days).
The company has one class of share capital, ordinary shares. Each ordinary share carries one vote. All the ordinary shares rank pari passu. There are no securities issued in the company which carry special rights with regard to control of the company. The identity of all substantial direct or indirect holders of securities in the company and the size and nature of their holdings is 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 while LAP is a controlling shareholder of the company. The Relationship Agreement includes a provision under which LAP has agreed to exercise the voting rights attached to the ordinary shares in the company owned by LAP to ensure the independence of the Board of directors of the company.
Other than the restrictions contained in the Relationship Agreement, there are no restrictions on voting rights or on the transfer of ordinary shares in the company. The rules governing the appointment and replacement of directors, alteration of the articles of association of the company and the powers of the company's directors accord with usual English company law provisions. Each director is re-elected every three years or more frequently. The company is not party to any significant agreements that take effect, alter or terminate upon a change of control of the company following a takeover bid. The company is not aware of any agreements between holders of its ordinary shares that may result in restrictions on the transfer of its ordinary shares or on voting rights.
There are no agreements between the company and its directors or employees providing for compensation for loss of office or employment that occurs because of a takeover bid.
The Bribery Act 2010 came into force on 1 July 2011, and the Board took the opportunity to begin implementing a new Anti-Bribery Policy. The company is committed to acting ethically, fairly and with integrity in all its endeavours and compliance of the code is closely monitored.
The annual general meeting will be held at the the Royal Automobile Club, 89 Pall Mall, London SW1Y 5HS on Thursday, 31 May 2012 at 11.00 a.m. Resolutions 1 to 10 will be proposed as ordinary resolutions. More than 50 per cent of shareholders' votes cast must be in favour for these resolutions to be passed. Resolutions 11 to 13 will be proposed as special resolutions. At least 75 per cent of shareholders' votes cast must be in favour for these resolutions to be passed.
The directors consider that all of the resolutions to be put to the meeting are in the best interests of the company and its shareholders as a whole. The Board recommends that shareholders vote in favour of all resolutions.
Paragraph 10.1.1 of Resolution 10 would give the directors the authority to allot shares in the company and grant rights to subscribe for, or convert any security into, shares in the company up to an aggregate nominal value of £351,542. This represents approximately 33.3 per cent of the ordinary share capital of the company in issue (excluding treasury shares) at 17 April 2012 (being the last practicable date prior to the publication of this Directors' Report). Paragraph 10.1.2 of Resolution 10 would give the directors the authority to allot shares in the company and grant rights to subscribe for, or convert any security into, shares in the company up to a further aggregate nominal value of £351,542, in connection with a pre-emptive rights issue. This amount represents approximately 33.3 per cent. of the ordinary share capital of the company in issue (excluding treasury shares) at 17 April 2012 (being the last practicable date prior to the publication of this Directors' Report).
Therefore, the maximum nominal value of shares or rights to subscribe for, or convert any security into, shares which may be allotted or granted under resolution 10 is £703,084.
Resolution 10 complies with guidance issued by the Association of British Insurers (ABI).
The authority granted by resolution 10 will expire on 31 August 2013 or, if earlier, the conclusion of the next Annual General Meeting of the company. The directors have no present intention to make use of this authority. However, if they do exercise the authority, the directors intend to follow emerging best practice as regards its use as recommended by the ABI.
A special resolution will be proposed at the Annual General Meeting in respect of the disapplication of pre-emption rights.
Shares allotted for cash must normally first be offered to shareholders in proportion to their existing shareholdings. The directors will, at the forthcoming Annual General Meeting seek power to allot equity securities (as defined by section 560 of the Companies Act 2006) or sell treasury shares for cash as if the pre-emption rights contained in Section 561 of the Companies Act 2006 did not apply:
In compliance with the guidelines issued by the Pre-emption Group, the directors, will ensure that, other than in relation to a rights issue, no more than 7.5% of the issued ordinary shares (excluding treasury shares) will be allotted for cash on a non pre-emptive basis over a rolling three year period unless shareholders have been notified and consulted in advance.
The power in resolution 11 will expire when the authority given by resolution 10 is revoked or expires.
Resolution 12 will be proposed to allow the company to call general meetings (other than an Annual General Meeting) on 14 clear days' notice. A resolution in the same terms was passed at the Annual General Meeting in 2011. The notice period required by the Companies Act 2006 for general meetings of the company is 21 days unless shareholders approve a shorter notice period, which cannot however be less than 14 clear days. Annual General Meetings must always be held on at least 21 clear days' notice. It is intended that the flexibility offered by this resolution will only be used for timesensitive, non-routine business and where merited in the interests of shareholders as a whole. The approval will be effective until the Company's next Annual General Meeting, when it is intended that a similar resolution will be proposed. In order to be able to call a general meeting on less than 21 clear days' notice, the company must make a means of electronic voting available to all shareholders for that meeting.
The effect of resolution 13 would be to renew the directors' current authority to make limited market purchases of the company's ordinary shares of 10 pence each. The power is limited to a maximum aggregate number of 1,055,684 ordinary shares (representing approximately 10 per cent of the company's issued share capital as at 17 April 2012 (being the last practicable date prior to publication of this Directors' Report)). The minimum price (exclusive of expenses) which the company would be authorised to pay for each ordinary share would be 10 pence (the nominal value of each ordinary share). The maximum price (again exclusive of expenses) which the company would be authorised to pay for an ordinary share is an amount equal to the higher of (i) 105% of the average market price for an ordinary share for the five business days preceding any such purchase and (ii) the higher of the price of the last independent trade for an ordinary share and the highest current independent bid for an ordinary share as derived from the trading venue where the purchase is to be carried out. The authority conferred by resolution 13 will expire at the conclusion of the company's next Annual General Meeting or 15 months from the passing of the resolution, whichever is the earlier. Any purchases of ordinary shares would be made by means of market purchase through the London Stock Exchange. If granted, the authority would only be exercised if, in the opinion of the directors, to do so would result in an increase in earnings per share or net asset value per share and would be in the best interests of shareholders generally. In exercising the authority to purchase ordinary shares, the directors may treat the shares that have been bought back as either cancelled or held as treasury shares (shares held by the company itself). No dividends may be paid on shares which are held as treasury shares and no voting rights are attached to them.
As at 17 April 2012 (being the last practicable date prior to the publication of this Directors' Report) the total number of options to subscribe for new ordinary shares in the company was 798,000 shares representing 7.56% of the company's issued share capital (excluding treasury shares) as at that date. Such number of options to subscribe for new ordinary shares would represent approximately 8.40% of the reduced issued share capital of the company (excluding treasury shares) assuming full use of the authority to make market purchases sought under resolution 13.
No political or charitable donations were made during the year (2010:Nil).
The group's business activities, together with the factors likely to affect its future development are set out in the Chairman's Statement on the preceding page 2 and the Mining Review on pages 5 to 9 and it's financial position is set out on page15 of the Business Review. In addition Note 22 to the financial statements includes the group's treasury policy, interest rate risk, liquidity risk and hedging profile.
The group has considerable financial resources available and long term leases with the majority of its tenants of its property portfolio. The directors have a reasonable expectation of improved market conditions in 2012 with Black Wattle Colliery, its direct mining asset returning to profitability in the second half of 2011. As a consequence, the directors believe that the company is well placed to manage its business risks successfully despite the loss for the year. The group intends to negotiate new facilities in the UK before the expiry of the current facility and have obtained confirmation from the Royal Bank of Scotland that they are not aware of any reason why the bank should not continue to support the company following the expiry of the current facilities.
The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
PKF (UK) LLP has expressed its willingness to continue in office as auditor. A proposal will be made at the annual general meeting for its re-appointment, and for its remuneration to be determined by the directors.
By order of the board
Heather Curtis Secretary
24 Bruton Place London W1J 6NE
18 April 2012
The remuneration committee is a formally constituted committee and is comprised exclusively of non-executive directors.
The members of the committee are Christopher Joll (chairman) and John Sibbald.
The principal function of the remuneration committee is to determine, on behalf of the Board, the remuneration and other benefits of the executive directors and senior executives, including pensions, share options and service contracts. The company's policy is to ensure that the executive directors are rewarded competitively in relation to other companies in order to retain and motivate them. The emoluments of each executive director comprises basic salary, a bonus at the discretion of the remuneration committee, provision of a car, premiums paid in respect of individual defined contribution pension arrangements, health insurance premium and share options.
The remuneration committee receives updates on pay and employment conditions applying to other group employees. These are taken
into consideration when setting executive directors' remuneration consistent with the group's general aim of seeking to reward all employees fairly according to the nature of their role, their performance and market forces.
The remuneration of non-executive directors is determined by the board, and takes into account additional remuneration for services outside the scope of the ordinary duties of non-executive directors. No pension costs are incurred on behalf of non-executive directors and they do not participate in the share option schemes.
All executive directors have full time contracts of employment with the company. Non-executive directors have contracts of service. No director has a contract of employment or contract of service with the company, its joint venture or associated companies with a fixed term which exceeds six months. All directors' contracts, as amended from time to time, have run from the date of appointment. Details of the directors standing for re-election are given under 'Directors' in the Directors' report. The policy of the committee is not to grant employment contracts or contracts of service in excess of six months and there are no provisions for termination payments. A summary of terms of service and employment is as follows:
| Start date of contract | Unexpired term | Notice period | |
|---|---|---|---|
| Executive directors | |||
| M A Heller | November 1972 | Continuous | 6 months |
| A R Heller | January 1994 | Continuous | 3 months |
| G J Casey | June 2010 | Continuous | 3 months |
| R J Grobler | April 2008 | Continuous | 3 months |
| Non-executive directors | |||
| C A Joll | February 2001 | Continuous | 3 months |
| J A Sibbald | October 1988 | Continuous | 3 months |
The following information has been audited:
| Executive Directors | Salaries and fees £'000 |
Bonus £'000 |
Benefits £'000 |
Total before Pensions £'000 |
Pension Contributions £'000 |
Total 2011 £'000 |
Total 2010 £'000 |
|---|---|---|---|---|---|---|---|
| M A Heller | 75 | – | – | 75 | – | 75 | 75 |
| A R Heller | 350 | 208 | 38 | 596 | 30 | 626 | 568 |
| G J Casey | 105 | 50 | 8 | 163 | 14 | 177 | 119 |
| R Grobler | 165 | 50 | 8 | 223 | 9 | 232 | 290 |
| 695 | 308 | 54 | 1,057 | 53 | 1,110 | 1,052 | |
| Non- Executive Directors | |||||||
| C A Joll | 24 | – | – | 24 | – | 24 | 20 |
| J A Sibbald | 2 | – | 2 | 4 | – | 4 | 5 |
| 26 | – | 2 | 28 | – | 28 | 25 | |
| Total | 721 | 308 | 56 | 1,085 | 53 | 1,138 | 1,077 |
Three (2010: three) directors have benefits under money purchase pension schemes. Contributions in 2011 were £53,000 (2010: £52,000), see table above. Directors are not entitled to benefits under any bonus or incentive schemes apart from the share option schemes details of which are set out below. Bonuses are awarded by the remuneration committee when merited.
Performance bonuses were awarded by the remuneration committee to three executive directors during 2011 (2010:3).
The company has four "Unapproved" Share Option Schemes which are not subject to HM Revenue and Customs (HMRC) approval. The "First Scheme" was approved by shareholders on 15 June 1999. The "Second Scheme" was approved by shareholders on 23 June 2005, options having been provisionally granted under it on 23 September 2004, the "2006 Scheme" was approved by shareholders on 29 June 2006, and the "2010 scheme" was approved by Shareholders on 7 June 2011. All available options under each of the Schemes have been granted.
| Number of share options | ||||||
|---|---|---|---|---|---|---|
| Option price* |
1 January 2011 |
Options Granted in 2011 |
31 December 2011 |
Exercisable from |
Exercisable to |
|
| First Scheme | ||||||
| A R Heller | 34p | 233,000 | – | 233,000 | 30/9/2005 | 29/9/2012 |
| Employee | 34p | 80,000 | – | 80,000 | 30/9/2005 | 29/9/2012 |
| Second Scheme | ||||||
| A R Heller | 149p | 80,000 | – | 80,000 | 23/9/2007 | 22/9/2014 |
| The 2006 Scheme | ||||||
| A R Heller | 237.5p | 275,000 | – | 275,000 | 4/10/2009 | 3/10/2016 |
| Employee | 237.5p | 50,000 | – | 50,000 | 4/10/2009 | 3/10/2016 |
| The 2010 Scheme | ||||||
| G J Casey | 202.5p | 80,000 | – | 80,000 | 31/08/2013 | 30/08/2020 |
*Middle market price at date of grant
No consideration is payable for the grant of options under the Unapproved Share Option Scheme or for the option granted under the 2010 Scheme. The exercise of options under the Unapproved Share Option Schemes is subject to the satisfaction of objective performance conditions specified by the remuneration committee, which will conform to institutional shareholder guidelines and best practice provisions in force from time to time. The remuneration committee has not yet set these guidelines for the First Scheme and the 2006 Scheme. The performance conditions for the Second Scheme, agreed by members on 23 June 2005, requires growth in net assets over a three year period to exceed the growth in the retail price index by a scale of percentages. The performance conditions for the option granted under the 2010 Scheme, requires growth in group net assets over a three year period to exceed growth in the retail price index by a scale of percentages.
The middle market price of Bisichi Mining PLC ordinary shares at 31 December 2011 was 145p (2010–200p). During the year the share price ranged between 137.5p and 230p.
The following information is unaudited:
The board's policy is to grant options to executive directors, managers and staff at appropriate times to provide them with an interest in the longer term development of the group.
The following graph illustrates the company's performance compared with a broad equity market index over a five year period. Performance is measured by total shareholder return. The directors have chosen the FTSE All Share – Total Return Index as a suitable index for this comparison as it gives an indication of performance against a large spread of quoted companies.
Chairman – remuneration committee
24 Bruton Place London W1J 6NE
18 April 2012
The committee's terms of reference have been approved by the board and follow published guidelines, which are available from the company secretary. The audit committee comprises the two non-executive directors, Christopher Joll (chairman), an experienced financial PR executive and John Sibbald, a retired chartered accountant.
The Audit Committee's prime tasks are to:
Review the scope of external audit, to receive regular reports from PKF (UK) LLP and to review the half-yearly and annual accounts before they are presented to the board, focusing in particular on accounting policies and areas of management judgment and estimation;
Monitor the controls which are in force to ensure the integrity of the information reported to the shareholders;
Assess key risks and to act as a forum for discussion of risk issues and contribute to the board's review of the effectiveness of the group's risk management control and processes;
Act as a forum for discussion of internal control issues and contribute to the board's review of the effectiveness of the group's internal control and risk management systems and processes;
Consider each year the need for an internal audit function; Advise the board on the appointment of external auditors and rotation of the audit partner every five years, and on their remuneration for both audit and non-audit work, and discuss the nature and scope of their audit work;
Participate in the selection of a new external audit partner and agree the appointment when required;
Undertake a formal assessment of the auditors' independence each year which includes:
The committee meets prior to the annual audit with the external auditors to discuss the audit plan and again prior to the publication of the annual results. These meetings are attended by the external audit partner, managing director, director of finance and company secretary. Prior to bi-monthly board meetings the members of the committee meet on an informal basis to discuss any relevant matters which may have arisen. Additional formal meetings are held as necessary.
During the past year the committee:
Agreed the independence of the auditors and approved their fees for both audit and not-audit services as set out in note 5 to the financial statements.
PKF (UK) LLP held office throughout the year. In the United Kingdom the company is provided with extensive administration and accounting services by London & Associated Properties PLC which has its own audit committee and employs a separate firm of external auditors, Baker Tilly UK Audit LLP. In South Africa PKF (Jhb) Inc. is the external auditor to the South African companies, and the work of that firm is reviewed by PKF (UK) LLP.
Chairman – audit committee
24 Bruton Place London W1J 6NE
18 April 2012
In accordance with your instructions we have carried out a valuation of the freehold property interests held as at 31 December 2011 by the company as detailed in our Valuation Report dated 2 February 2012.
Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2011 of the interests owned by the Company was £12,068,000 being made up as follows:
| £'000 | ||
|---|---|---|
| Freehold Leasehold |
9,118 2,950 |
|
| 12,068 | ||
Leeds BNP Paribas Real Estate Advisory and Property Management UK Limited 2 February 2012 Regulated by Royal Institute of Chartered Surveyors
The directors are responsible for preparing the directors' report, the directors' remuneration report and the financial statements in accordance with applicable law and regulations. They are also responsible for ensuring that the annual report includes information required by the Listing Rules of the Financial Services Authority.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the group financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and have elected to prepare the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period.
In preparing these financial statements the directors are required to:
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company and the group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions, to disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006 and Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements and other information included in annual reports may differ from legislation in other jurisdictions.
The directors confirm, to the best of their knowledge:
The names and functions of all the directors are stated on page 16.
to the members of Bisichi Mining PLC
We have audited the financial statements of Bisichi Mining PLC for the year ended 31 December 2011 which comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated and company balance sheets, the consolidated cash flow statement, the consolidated statement of changes in shareholders' equity and the related notes. The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group's and the parent company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the annual report & accounts to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
In our opinion:
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
Under the Companies Act 2006 we are required to report to you if, in our opinion:
Under the Listing Rules we are required to review:
for and on behalf of PKF (UK) LLP, Statutory auditor
London UK 18 April 2012
for the year ended 31 December 2011
| 2011 Trading |
2011 Revaluations |
2011 Total |
2010 | ||
|---|---|---|---|---|---|
| Notes | £'000 | £'000 | £'000 | £'000 | |
| Group revenue Operating costs |
1 2 |
29,909 (27,565) |
– – |
29,909 (27,565) |
32,824 (32,976) |
| Operating profit/(loss) before depreciation, fair value | |||||
| adjustments and exchange movements | 2,344 | – | 2,344 | (152) | |
| Depreciation | 2 | (2,488) | – | (2,488) | (2,414) |
| Operating loss before fair value adjustments and | |||||
| exchange movements | 1 | (144) | – | (144) | (2,566) |
| Exchange (losses)/gains | (975) | – | (975) | 526 | |
| (Decrease)/Increase in value of investment properties | 3 | – | (42) | (42) | 245 |
| (Loss)/Gains on held for trading investments | – | (167) | (167) | 90 | |
| Operating loss | 1 | (1,119) | (209) | (1,328) | (1,705) |
| Share of profit/(loss) in joint ventures | 13 | 21 | (31) | (10) | 61 |
| Loss before interest and taxation | (1,098) | (240) | (1,338) | (1,644) | |
| Interest receivable | 268 | – | 268 | 174 | |
| Interest payable | 6 | (380) | – | (380) | (343) |
| Loss before tax | 4 | (1,210) | (240) | (1,450) | (1,813) |
| Taxation | 7 | 762 | 142 | 904 | 527 |
| Profit/(Loss) for the year | (448) | (98) | (546) | (1,286) | |
| Attributable to: | |||||
| Equity holders of the company | (346) | (98) | (444) | (1,212) | |
| Non-controlling interest | 27 | (102) | – | (102) | (74) |
| Profit/(Loss) for the year | (448) | (98) | (546) | (1,286) | |
| Loss per share – basic | 9 | (3.30)p | (0.93)p | (4.23)p | (11.60)p |
| Loss per share – diluted | 9 | (3.30)p | (0.93)p | (4.23)p | (11.60)p |
Trading income reflects all the trading activity on mining and property operations. Revaluation income reflects the revaluation of investment properties and other assets within the group and any proportion of these amounts within Joint Ventures. The total column represents the consolidated income statement presented in accordance with IAS 1.
for the year ended 31 December 2011 2011
| £'000 | 2010 £'000 |
|
|---|---|---|
| Loss for the year | (546) | (1,286) |
| Other comprehensive income: | ||
| Exchange differences on translation of foreign operations | (575) | 747 |
| Taxation | – | – |
| Other comprehensive income for the year net of tax | (575) | 747 |
| Total comprehensive income for the year net of tax | (1,121) | (539) |
| Attributable to: | ||
| Equity shareholders | (958) | (459) |
| Non-controlling interest | (163) | (80) |
| (1,121) | (539) |
at 31 December 2011
| Assets Non-current assets Value of investment properties 10 12,068 12,110 Fair value of head lease 31 222 233 12,290 12,343 Mining reserves, plant and equipment 11 7,926 9,615 Investments in joint ventures 12 2,579 3,607 Other investments 12 148 150 Total non-current assets 22,943 25,715 Current assets Inventories 16 1,206 705 Trade and other receivables 17 6,067 4,719 Corporation tax recoverable 133 115 Held for trading investments 18 730 605 Cash and cash equivalents 4,041 5,399 12,177 11,543 Non-current asset held for sale 14 1,785 – Total current assets 13,962 11,543 Total assets 36,905 37,258 Liabilities Current liabilities Borrowings 20 (8,157) (1,759) Trade and other payables 19 (8,590) (7,865) Current tax liabilities – (362) Total current liabilities (16,747) (9,986) Non-current liabilities Borrowings 20 (86) (5,326) Provision for rehabilitation 21 (965) (1,025) Finance lease liabilities 31 (222) (233) Deferred tax liabilities 23 (1,881) (2,340) Total non-current liabilities (3,154) (8,924) Total liabilities (19,901) (18,910) Net assets 17,004 18,348 Equity Share capital 24 1,056 1,045 Share premium account 169 – Translation reserve (446) 68 Other reserves 25 500 485 Retained earnings 15,494 16,356 Total equity attributable to equity shareholders 16,773 17,954 Non-controlling interest 27 231 394 Total equity 17,004 18,348 |
Notes | 2011 £'000 |
2010 £'000 |
|---|---|---|---|
These financial statements were approved and authorised for issue by the board of directors on 18 April 2012 and signed on its behalf by:
Director Director
A R Heller G J Casey Company Registration No. 112155
for the year ended 31 December 2011
| Share capital £'000 |
Share Premium £'000 |
Translation reserves £'000 |
Other reserves £'000 |
Retained earnings £'000 |
Total £'000 |
Non controlling interest £'000 |
Total equity £'000 |
|
|---|---|---|---|---|---|---|---|---|
| Balance at 1 January 2010 | 1,045 | – | (685) | 480 | 18,460 | 19,300 | 19,300 | |
| Revaluation of investment properties | – | – | – | – | 245 | 245 | – | 245 |
| Other income statement movements | – | – | – | – | (1,457) | (1,457) | (74) | (1,531) |
| Loss for the year | – | – | – | – | (1,212) | (1,212) | (74) | (1,286) |
| Exchange adjustment | – | – | 753 | – | – | 753 | (6) | 747 |
| Total comprehensive income for the year | – | – | 753 | – | (1,212) | (459) | (80) | (539) |
| Dividend | – | – | – | – | (418) | (418) | – | (418) |
| Equity share options | – | – | 5 | – | 5 | – | 5 | |
| Disposal of shares in subsidiary | – | – | – | (474) | (474) | 474 | – | |
| Balance at 1 January 2011 | 1,045 | – | 68 | 485 | 16,356 | 17,954 | 394 | 18,348 |
| Revaluation of investment properties | – | – | – | – | (42) | (42) | – | (42) |
| Other income statement movements | – | – | – | – | (402) | (402) | (102) | (504) |
| Loss for the year | – | – | – | – | (444) | (444) | (102) | (546) |
| Exchange adjustment | – | – | (514) | – | – | (514) | (61) | (575) |
| Total comprehensive income for the year | – | – | (514) | – | (444) | (958) | (163) | (1,121) |
| Dividend | 11 | 169 | – | – | (418) | (238) | – | (238) |
| Equity share options | – | – | – | 15 | – | 15 | – | 15 |
| Balance at 31 December 2011 | 1,056 | 169 | (446) | 500 | 15,494 | 16,773 | 231 | 17,004 |
for the year ended 31 December 2011
| Year ended 31 December 2011 £'000 |
Year ended 31 December 2010 £'000 |
|
|---|---|---|
| Cash flows from operating activities | ||
| Operating loss Adjustments for: |
(1,328) | (1,705) |
| Depreciation | 2,488 | 2,414 |
| Share based payment expense | 15 | 5 |
| Loss/(Gain) on investment held for trading | 167 | (90) |
| Unrealised loss/(gain) on investment properties | 42 | (245) |
| Share of profit of joint venture | 21 | – |
| Cash flow before working capital | 1,405 | 379 |
| Change in inventories Change in trade and other receivables |
(501) (2,385) |
434 (2,150) |
| Change in trade and other payables | 2,340 | 834 |
| Change in provisions | 124 | 253 |
| Acquisitions of held for trading investments | (291) | (6) |
| Cash generated from operations | 692 | (256) |
| Interest received | 268 | 174 |
| Interest paid Income tax received/(paid) |
(380) 245 |
(343) (112) |
| Cash flow from operating activities | 825 | (537) |
| Cash flows from investing activities | ||
| Acquisition of reserves, plant and equipment | (2,528) | (2,639) |
| Proceeds from sale of investment properties, reserves, | ||
| plant and equipment (Acquisitions)/Disposal of investments |
7 (888) |
– 405 |
| Cash flow from investing activities | (3,409) | (2,234) |
| Cash flows from financing activities | ||
| Borrowings drawn | – | 2,300 |
| Borrowings repaid | (347) | (231) |
| Equity dividends paid | (238) | (418) |
| Cash flow from financing activities | (585) | 1,651 |
| Net (decrease)/increase in cash and cash equivalents | (3,169) | (1,120) |
| Cash and cash equivalents at 1 January | 3,977 | 5,077 |
| Exchange adjustment | 306 | 20 |
| Cash and cash equivalents at 31 December | 1,114 | 3,977 |
| Cash and cash equivalents at 31 December comprise: Cash and cash equivalents as presented in the balance sheet |
4,041 | 5,399 |
| Bank overdrafts (secured) | (2,927) | (1,422) |
| 1,114 | 3,977 |
for the year ended 31 December 2011
The results for the year ended 31 December 2011 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The principal accounting policies are described below:
The group financial statements are presented in £ sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise stated.
The financial statements are prepared in accordance with International Financial Reporting Standards and Interpretations in force at the reporting date. These are prepared under the historic cost basis as modified by the revaluation of investment properties and held for trading investments.
During 2011 the following accounting standards and guidance were adopted by the group:
IAS 24 Related parties: The revised standard clarifies the definition of a related party and includes an explicit requirement to disclose commitments to related parties. The revised standard specifically defines associates of the ultimate parent company as related parties of the group and they have been treated as such in these financial statements.
IAS 1 Presentation of financial statements: Clarifies that entities may present the analysis of each component of other comprehensive income either in the statement of changes in equity or in the notes to the financial statements
During 2011 all other standards and interpretations that were mandatory for the accounting period and were required to be adopted by the group either had no material impact on the group's financial statements or were not relevant to the operations of the group.
The group has not adopted any standards or interpretations in advance of the required implementation dates. It is not expected that adoption of any standards or interpretations which have been issued by the International Accounting Standards Board but have not been adopted will have a material impact on the financial statements.
The directors consider exchange gains/losses to be a material item. As a result exchange gains/losses are classified as a separate line item in the Income Statement. In the prior year, exchange gains/ losses in the Income Statement were included within the line item "Operating costs". As a result the comparative amount for exchange gains/losses in the Income Statement, being an exchange gain of £526,000, is reclassified.
The directors consider their judgements and estimates surrounding the life of the mine and its reserves to have the most significant effect on the amounts recognised in the financial statements and to be the area where the financial statements are at most risk of a material adjustment due to estimation uncertainty.
In addition the directors note that other areas, in particular the valuation of the investment properties, are considered to be less judgemental due to the nature of the underlying properties and the use of external valuers.
The group accounts incorporate the accounts of Bisichi Mining Plc and all of its subsidiary undertakings, together with the group's share of the results of its joint ventures and associates. Non-controlling interests in subsidiaries are presented separately 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' interest are initially measured at the non-controlling interests' proportionate share of the subsidiaries net assets. Subsequent to this, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Revenue comprises sales of coal and property rental income. Revenue is recognised when delivery of the product or service has been made and when the customer has a legally binding obligation to settle under the terms of the contract and has assumed all significant risks and rewards of ownership.
Revenue is only recognised on individual sales of coal when all of the significant risks and rewards of ownership have been transferred to a third party. In most instances revenue is recognised when the product is delivered to the location specified by the customer, which is typically when loaded into transport, where the customer pays the transportation costs.
Rental income is recognised in the group income statement on a straight-line basis over the term of the lease. This includes the effect of lease incentives.
Investment 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 properties when held for long-term rental yields, and after consideration has been given to a number of factors including length of lease, quality of tenant and covenant, value of lease, management intention for future use of property, planning consents and percentage of property leased. Investment properties are revalued annually by professional external surveyors and included in the balance sheet at their fair value. Gains or losses arising from changes in the fair values of assets are recognised in the consolidated income statement in the period to which they relate. In accordance with IAS 40, investment properties are not depreciated. Properties held for use in the business are not recognised as investment properties and are held at depreciated historical cost.
The fair value of the head leases is the net present value of the current head rent payable on leasehold properties until the expiry of the lease.
The cost of property, plant and equipment comprises its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in accordance with agreed specifications. Freehold land is not depreciated. Other property, plant and equipment is stated at historical cost less accumulated depreciation.
The life of mine remaining as at year end is currently estimated at 5 years. The life of mine is kept under review and has remained unchanged from the prior year. A provision for rehabilitation of the mine is carried at fair value and is provided for over the life of mine. The provision includes the restoration of the underground, opencast and surface operations and is estimated to be utilised at the end of the life of mine of the group. The timing and final cost of the rehabilitation is uncertain and will depend on the duration of the mine life and the quantities of coal extracted from the reserves.
The purpose of mine development is to establish secure working conditions and infrastructure to allow the safe and efficient extraction of recoverable reserves. Depreciation on mine development is not charged until production commences or the assets are put to use. On commencement of full production, depreciation is charged over the life of the associated mine reserves on a straight-line basis.
Expenditure incurred prior to the commencement of working surface mine sites, net of any residual value and taking into account the likelihood of the site being mined, is capitalised within property, plant and equipment and charged to the income statement over the life of the recoverable reserves of the scheme.
The cost, less estimated residual value, of other property, plant and equipment is 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, at each balance sheet date. Changes to the estimated residual values or useful lives are accounted for prospectively. Heavy surface mining and other plant and equipment is depreciated at varying rates depending upon its expected usage.
| Mining equipment | The shorter of its useful life or the life of the mine |
|---|---|
| Mining reserves | Over the expected life of the reserves |
| Motor vehicles | 25-33 per cent per annum |
| Office equipment | 10-33 per cent per annum |
The company operates a share option scheme. The fair value of the share option scheme is determined at the date of grant. This fair value is then expensed on a straight-line basis over the vesting period, based on an estimate of the number of shares that will eventually vest. The fair value of options granted is calculated using a binomial or Black-Scholes-Merton model. Details of the share options in issue are disclosed in the Directors' Remuneration Report on page 25 under the heading Share option schemes which is within the audited part of this report.
The group operates a defined contribution pension scheme. The contributions payable to the scheme are expensed in the period to which they relate.
Monetary assets and liabilities are translated at year end exchange rates and the resulting exchange rate differences are included in the consolidated income statement within the results of operating activities if arising from trading activities and within finance cost/ income if arising from financing.
For consolidation purposes, income and expense items are included in the consolidated income statement at average rates, and assets and liabilities are translated at year end exchange rates. Translation differences arising on consolidation are recognised in other comprehensive income. Where foreign operations are disposed of, the cumulative exchange differences of that foreign operation are recognised in the consolidated income statement when the gain or loss on disposal is recognised.
Transactions in foreign currencies are translated at the exchange rate ruling on transaction date.
The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.
Bank loans and overdrafts are included as financial liabilities on the group balance sheet at the amounts drawn on the particular facilities net of the unamortised cost of financing. Interest payable on those facilities is expensed as finance cost in the period to which it relates.
Finance lease liabilities arise for those investment properties held under a leasehold interest and accounted for as investment property. The liability is initially calculated as the present value of the minimum lease payments, reducing in subsequent reporting periods by the apportionment of payments to the lessor.
The group uses derivative financial instruments to manage the interest rate risk associated with the financing of the group's business. No trading in such financial instruments is undertaken. At each reporting date, these interest rate derivatives are recognised at fair value, being the estimated amount that the group would receive or pay to terminate the agreement at the balance sheet date, taking into account current interest rates and the current credit rating of the counterparties. The gain or loss at each fair value re-measurement is recognised immediately in the income statement.
Financial assets/liabilities held for trading or short-term gain are measured at fair value and movements in fair value are charged/ credited to the income statement in the period.
Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated recoverable amounts as the interest that would be recognised from discounting future cash payments over the short payment period is not considered to be material.
Trade payables are not interest bearing and are stated at their nominal value, as the interest that would be recognised from discounting future cash payments over the short payment period is not considered to be material.
The groups other financial assets and liabilities not disclosed above are accounted for as shown below.
– Cash and cash equivalents are measured at cash value.
– Other receivables at amount owed
– Other loans receivable at amount owed
– Other payables at amount owing
Investments in joint ventures, being those entities over whose activities the group has joint control, as established by contractual agreement, are included at cost together with the group's share of post acquisition reserves, on an equity basis.
Non-current assets held for sale are measured at the lower of carrying amount and fair value less costs to sell.
Inventories are stated at the lower of cost and net realisable value. Cost includes materials, direct labour and overheads relevant to the stage of production. Net realisable value is based on estimated selling price less all further costs to completion and all relevant marketing, selling and distribution costs.
Other investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are recognised at cost less any provision for impairment.
Whenever events or changes in circumstance indicate that the carrying amount of an asset may not be recoverable an asset is reviewed for impairment. An asset's carrying value is written down to its estimated recoverable amount (being the higher of the fair value less cost to sell and value in use) if that is less than the asset's carrying amount.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the tax computations, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. In respect of the deferred tax on the revaluation surplus, this is calculated on the basis of the chargeable gains that would crystallise on the sale of the investment portfolio as at the reporting date. The calculation takes account of indexation on the historical cost of the properties and any available capital losses.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the group income statement, except when it relates to items charged or credited directly to other comprehensive income, in which case it is also dealt with in other comprehensive income.
Dividends payable on the ordinary share capital are recognised as a liability in the period in which they are approved.
Cash comprises cash in hand and on-demand deposits. Cash and cash equivalents comprises short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and original maturities of three months or less. The cash and cash equivalents shown in the cashflow statement are stated net of bank overdrafts.
For management reporting purposes, the group is organised into business segments distinguishable by economic activity. The group's only business segments are mining activities and investment properties. These business segments are subject to risks and returns that are different from those of other business segments and are the primary basis on which the group reports its segment information. This is consistent with the way the group is managed and with the format of the group's internal financial reporting. Significant revenue from transactions with an individual customer, which makes up 10 percent or more of the total revenue of the group, is separately disclosed within each segment.
for the year ended 31 December 2011
| 2011 | ||||||
|---|---|---|---|---|---|---|
| Mining | Property | Other | Total | |||
| Business analysis | £'000 | £'000 | £'000 | £'000 | ||
| Significant revenue customer A | 8,577 | – | – | 8,577 | ||
| Significant revenue customer B | 7,527 | – | – | 7,527 | ||
| Significant revenue customer C | 2,280 | – | – | 2,280 | ||
| Other revenue | 10,508 | 989 | 28 | 11,525 | ||
| Segment revenue | 28,892 | 989 | 28 | 29,909 | ||
| Operating (loss)/profit before fair value adjustments & exchange | ||||||
| movements | (787) | 630 | 13 | (144) | ||
| Revaluation of investments & exchange movements | (975) | (42) | (167) | (1184) | ||
| Operating (loss)/profit and segment result | (1,762) | 588 | (154) | (1,328) | ||
| Segment assets | 15,212 | 12,551 | 730 | 28,493 | ||
| Unallocated assets | ||||||
| – Non-current assets | 7 | |||||
| – Cash & cash equivalents | 4,041 | |||||
| Total assets excluding investment in joint ventures | 32,541 | |||||
| Segment liabilities | (7,928) | (2,498) | (27) | (10,453) | ||
| Borrowings | (316) | (5,000) | – | (5,316) | ||
| (8,244) | (7,498) | (27) | (15,769) | |||
| Unallocated liabilities | (4,132) | |||||
| Total liabilities | (19,901) | |||||
| Net assets | 12,640 | |||||
| Investment in joint ventures non segmental | 4,364 | |||||
| Net assets as per balance sheet | 17,004 | |||||
| United | South | |||||
| Kingdom | Africa | Other | Unallocated | Total | ||
| Geographic analysis | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Revenue | 1,017 | 28,892 | – | – | 29,909 | |
| Operating profit/(loss) and segment result | 434 | (1,762) | – | – | (1,328) | |
| Non-current assets excluding investments | 12,290 | 7,920 | – | 6 | 20,216 |
Total net assets 5,725 6,944 57 4,278 17,004 Capital expenditure 1 2,527 – – 2,528
| 2010 | |||||
|---|---|---|---|---|---|
| Mining | Property | Other | Total | ||
| Business analysis | £'000 | £'000 | £'000 | £'000 | |
| Significant revenue customer A | 11,265 | – | – | 11,265 | |
| Significant revenue customer B | 8,456 | – | – | 8,456 | |
| Significant revenue customer C | 3,398 | – | – | 3,398 | |
| Other Revenue | 8,707 | 975 | 23 | 9,705 | |
| Segment revenue | 31,826 | 975 | 23 | 32,824 | |
| Operating (loss)/profit before fair value adjustments | |||||
| & exchange movements | (3,190) | 616 | 8 | (2,566) | |
| Revaluation of investments & exchange movements | 526 | 245 | 90 | 861 | |
| Operating (loss)/profit and segment result | (2,664) | 861 | 98 | (1,705) | |
| Segment assets | 15,061 | 12,557 | 606 | 28,224 | |
| Unallocated assets | |||||
| – Non-current assets | 28 | ||||
| – Cash & cash equivalents | 5,399 | ||||
| Total assets excluding investment in joint ventures | 33,651 | ||||
| Segment liabilities | (7,769) | (2,473) | (15) | (10,257) | |
| Borrowings | (663) | (5,000) | – | (5,663) | |
| (8,432) | (7,473) | (15) | (15,920) | ||
| Unallocated liabilities | (2,990) | ||||
| Total liabilities | (18,910) | ||||
| Net assets | 14,741 | ||||
| Investment in joint ventures non segmental | 3,607 | ||||
| Net assets as per balance sheet | 18,348 | ||||
| United | South | ||||
| Kingdom | Africa | Other | Unallocated | Total | |
| Geographic analysis | £'000 | £'000 | £'000 | £'000 | £'000 |
| Revenue | 998 | 31,826 | – | – | 32,824 |
| Operating profit/(loss) and segment result | 959 | (2,664) | – | – | (1,705) |
| Non-current assets excluding investments | 12,343 | 9,586 | – | 29 | 21,958 |
| Total net assets | 5,637 | 6,604 | 63 | 6,044 | 18,348 |
| Capital expenditure | 2 | 2,637 | – | – | 2,639 |
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Mining Property |
22,579 104 |
26,979 120 |
| Cost of sales Administration |
22,683 7,370 |
27,099 8,291 |
| Operating costs | 30,053 | 35,390 |
| The direct property costs are: Ground rent Direct property expense Bad debts |
6 70 28 |
9 81 30 |
| 104 | 120 |
Operating costs above include depreciation of £2,488,000 (2010: £2,414,000)
The reconciliation of the investment (deficit)/surplus to the (loss)/gain on revaluation of investment properties in the income statement is set out below:
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Investment (deficit)/surplus Gain on valuation movement in respect of head lease payments |
(31) (11) |
258 (13) |
| (Loss)/Gain on revaluation of investment properties | (42) | 245 |
Loss before taxation is arrived at after charging/(crediting):
| Staff costs (see note 29) 5,872 6,036 Depreciation 2,488 2,414 Exchange loss/(gain) 975 (526) Fees payable to the company's auditor for the audit of the company's annual accounts 26 40 Fees payable to the company's auditor and its associates for other services: The audit of the company's subsidiaries, pursuant to legislation 34 32 Other services 5 5 |
2011 £'000 |
2010 £'000 |
|---|---|---|
The directors consider the auditors were best placed to provide the above non-audit services.
The audit committee reviews the nature and extent of non-audit services to ensure that independence is maintained.
Directors' emoluments are shown in the Directors' remuneration report on pages 24 and 25 under the heading Directors' remuneration which is within the audited part of this report.
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| On bank overdrafts and bank loans Other interest payable |
369 11 |
291 52 |
| Interest payable | 380 | 343 |
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| (a) Based on the results for the year: | ||
| Corporation tax Adjustment in respect of prior years – UK Adjustment in respect of prior years – SA |
– – (332) |
352 6 – |
| Current tax Deferred tax – current year |
(332) (572) |
358 (885) |
| Total tax in income statement | (904) | (527) |
(b) Factors affecting tax charge for the year:
The corporation tax assessed for the year is different from that at the standard rate of corporation tax in the United Kingdom of 26.5% (2010: 28%)
The differences are explained below:
| (Loss)/profit on ordinary activities before taxation Tax on (loss)/profit on ordinary activities at 26.5% (2010: 28%) |
(1,450) (384) |
(1,813) (508) |
|---|---|---|
| Effects of: | ||
| Expenses not deductible for tax purposes | 30 | 84 |
| Capital (losses)/gains on disposal | (11) | 13 |
| Non-taxable income | (37) | – |
| Other differences | (170) | (127) |
| Adjustment in respect of prior years | (332) | 11 |
Total tax (904) (527)
United Kingdom tax included in above:
| Corporation tax | – | 300 |
|---|---|---|
| Adjustment in respect of prior years | – | 6 |
| Current tax | – | 306 |
| Deferred tax | (201) | 113 |
| (201) | 419 | |
| Overseas tax included in above: | ||
| Corporation tax | – | 52 |
| Adjustment in respect of prior years | (332) | – |
| Current tax | (332) | 52 |
| Deferred tax | (371) | (998) |
| (703) | (946) |
| 2011 Per share |
2011 £'000 |
2010 Per share |
2010 £'000 |
|
|---|---|---|---|---|
| Dividends paid during the year relating to the prior period | 4.00p | 418 | 4.00p | 418 |
| Dividends to be paid: Interim dividend for 2011 paid on the 3 February 2012 Proposed final dividend for 2011 |
1.00p 3.00p |
105 317 |
1.00p 3.00p |
105 313 |
| 4.00p | 422 | 4.00p | 418 |
The dividends to be paid are not accounted for until they have been approved at the Annual General Meeting. The amount will be accounted for as an appropriation of retained earnings in the year ending 31 December 2012.
Both the basic and diluted loss per share calculations are based on a loss of £546,000 (2010: £1,286,000). The basic loss per share have been calculated on a weighted average of 10,495,395 (2010: 10,451,506) ordinary shares being in issue during the period. The diluted loss per share have been calculated on the weighted average number of shares in issue of 10,495,395 (2010: 10,451,506) plus the dilutive potential ordinary shares arising from share options of nil (2010: nil) totalling 10,495,395 (2010: 10,451,506).
Dilutive potential ordinary shares of 239,607 (2010: 279,790) were excluded from the calculation of diluted ordinary shares as there was no dilutive effect due to the loss for the year.
| Freehold £'000 |
Long Leasehold £'000 |
Total £'000 |
|
|---|---|---|---|
| Valuation at 1 January 2011 Revaluation |
9,110 8 |
3,000 (50) |
12,110 (42) |
| Valuation at 31 December 2011 | 9,118 | 2,950 | 12,068 |
| Valuation at 1 January 2010 Revaluation |
8,865 245 |
3,000 – |
11,865 245 |
| Valuation at 31 December 2010 | 9,110 | 3,000 | 12,110 |
| Historical cost At 31 December 2011 |
4,801 | 728 | 5,529 |
| At 31 December 2010 | 4,801 | 728 | 5,529 |
Long leasehold properties are those for which the unexpired term at the balance sheet date is not less than 50 years. All investment properties are held for use in operating leases and all properties generated rental income during the period.
Freehold and Long Leasehold properties were externally professionally valued at 31 December on an open market basis by:
| 2011 | |
|---|---|
| £'000 | |
| BNP Paribas Real Estate | 12,068,000 |
| 12,068,000 |
The valuations were carried out in accordance with the Statements of Asset Valuation and Guidance Notes published by The Royal Institution of Chartered Surveyors.
| Mining Reserves £'000 |
Mining equipment £'000 |
Motor Vehicles £'000 |
Office equipment £'000 |
Total £'000 |
|
|---|---|---|---|---|---|
| Cost at 1 January 2011 Exchange adjustment Additions Disposals |
2,212 (397) – – |
14,940 (2,683) 2,526 (316) |
429 (53) – (206) |
128 (14) 2 (1) |
17,709 (3,147) 2,528 (523) |
| Cost at 31 December 2011 | 1,815 | 14,467 | 170 | 115 | 16,567 |
| Accumulated depreciation at 1 January 2011 Exchange adjustment Charge for the year Disposals in year |
1,768 (318) 73 – |
5,897 (1,059) 2,383 (316) |
345 (41) 22 (199) |
84 (7) 10 (1) |
8,094 (1,425) 2,488 (516) |
| Accumulated depreciation at 31 December 2011 | 1,523 | 6,905 | 127 | 86 | 8,641 |
| Net book value at 31 December 2011 | 292 | 7,562 | 43 | 29 | 7,926 |
| Cost at 1 January 2010 Exchange adjustment Additions Disposals |
1,911 318 – (17) |
12,581 2,094 2,637 (2,372) |
387 42 – – |
119 12 2 (5) |
14,998 2,466 2,639 (2,394) |
| Cost at 31 December 2010 | 2,212 | 14,940 | 429 | 128 | 17,709 |
| Accumulated depreciation at 1 January 2010 Exchange adjustment Charge for the year Disposals in year |
1,407 267 111 (17) |
5,195 829 2,245 (2,372) |
271 31 43 – |
68 6 15 (5) |
6,941 1,133 2,414 (2,394) |
| Accumulated depreciation at 31 December 2010 | 1,768 | 5,897 | 345 | 84 | 8,094 |
| Net book value at 31 December 2010 | 444 | 9,043 | 84 | 44 | 9,615 |
| 2011 | 2010 | ||
|---|---|---|---|
| 2010 | |||
| Other | |||
| £'000 | |||
| 2,404 | 433 | 2,343 | 779 |
| – | – | – | (405) |
| (703) | |||
| 888 | – | – | – |
| 59 | |||
| – | |||
| 2,579 | 431 | 2,404 | 433 |
| – | |||
| – | |||
| – | |||
| – | – | 1,203 | – |
| 2,579 | 431 | 3,607 | 433 |
| – | (283) | – | (283) |
| – | – | – | – |
| – | (283) | – | (283) |
| 2,579 | 148 | 3,607 | 150 |
| Joint Ventures Assets £'000 – (10) 1,203 (216) 116 (1,103) |
2011 Other £'000 (2) – – – – |
Joint Ventures Assets £'000 – 61 916 152 135 – |
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Included in other investments are: Net book value of unquoted investments Net book value of investments listed on overseas Stock exchanges |
135 13 |
133 17 |
| 148 | 150 | |
| Market value of the overseas listed investments | 13 | 17 |
The company owns 50% of the issued share capital of Dragon Retail Properties Limited, an unlisted property investment company. The remaining 50% is held by London & Associated Properties PLC. Dragon Retail Properties Limited is incorporated in England and Wales. It has issued share capital of 500,000 (2010: 500,000) ordinary shares of £1 each.
During the year the company acquired 12.5% of the units of Langney Shopping Centre Unit Trust, an unlisted property unit trust incorporated in Jersey. 12.5% of the units in the trust are held by London & Associated Properties 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. This asset is reclassified as a non-current asset held for sale. Details of non-current assets held for sale are shown under note 14.
| Langney 12.5% £'000 |
Dragon 50% £'000 |
2011 £'000 |
2010 £'000 |
|
|---|---|---|---|---|
| Turnover Profit and loss |
87 | 96 | 183 | 103 |
| (Loss)/Profit before tax Taxation |
21 – |
(30) (1) |
(9) (1) |
61 – |
| (Loss)/Profit after taxation | 21 | (31) | (10) | 61 |
| Balance sheet Non-current assets Current assets Current liabilities Non-current liabilities |
2,000 112 (100) (1,124) |
1,519 1,313 (1,031) (110) |
3,519 1,425 (1,131) (1,234) |
2,786 1,339 (2,264) (140) |
| Share of net assets at 31 December | 888 | 1,691 | 2,579 | 1,721 |
| 2011 £'000 |
|
|---|---|
| At 1 January Transfer of stake in joint venture company now held for sale |
– 1,785 |
| Net assets at 31 December | 1,785 |
On 26 January 2012 the Company announced that it had entered into an agreement for the sale of its 49% participation in a South African registered joint venture company, Ezimbokodweni Mining (Proprietary) Limited ("Ezimbokodweni"), for ZAR 54.2 million.
Ezimbokodweni was established in 2005 with Endulwini Coal Limited to acquire from BHP Billiton Energy Coal South Africa Limited ("BECSA") a shallow coal deposit located in the Witbank coalfield of Mpumalanga, some 40 km from the Company's existing coal mining operations at the Black Wattle colliery. Since then, Ezimbokodweni has been negotiating with BECSA and the South African Department of Mineral Resources ("DMR") to finalise the acquisition and prepare for opencast mining.
In 2011, following the intervention of the DMR, the Company agreed to dispose of its stake in Ezimbokodweni. The agreement made on 26 January 2012 was conditional on the satisfaction by 15 May 2012 of conditions precedent, the last of which is the consent of the DMR, which is awaited.
The company owns the following ordinary share capital of the principal subsidiaries which are included within the consolidated financial statements:
| Activity | Percentage of share capital |
Country of incorporation |
|
|---|---|---|---|
| Mineral Products Limited | Share dealing | 100% | England and Wales |
| Black Wattle Colliery (pty) Limited | Coal mining | 62.5% | South Africa |
| Bisichi Coal Mining (pty) Limited | Coal mining | 100% | South Africa |
| Bisichi Mining (Exploration) Limited | Holding company | 100% | England and Wales |
| Ninghi Marketing Limited | Dormant | 90.1% | England and Wales |
Details on the non-controlling interest in subsidiaries are shown under note 27.
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Coal | ||
| Washed | 284 | 540 |
| Run of mine | 440 | 122 |
| Work in progress | 432 | – |
| Other | 50 | 43 |
| 1,206 | 705 |
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Amounts falling due within one year: Trade receivables Other receivables Prepayments and accrued income |
5,818 130 119 |
3,791 112 816 |
| 6,067 | 4,719 |
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Market value of Listed Investments: Listed in Great Britain Listed outside Great Britain |
657 73 |
522 83 |
| 730 | 605 | |
| Original cost of Listed Investments | 749 | 458 |
| Unrealised (deficit)/surplus of market value over cost | (19) | 147 |
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Trade payables Amounts owed to joint ventures Other payables Accruals and deferred income |
4,313 1,205 528 2,544 |
3,604 1,205 687 2,369 |
| 8,590 | 7,865 |
| Current | Non-current | |||
|---|---|---|---|---|
| 2011 £'000 |
2010 £'000 |
2011 £'000 |
2010 £'000 |
|
| Bank overdraft (secured) Bank loan (secured) |
2,927 5,230 |
1,422 337 |
– 86 |
– 5,326 |
| 8,157 | 1,759 | 86 | 5,326 | |
| Bank overdraft and loan instalments by reference to the balance sheet date: Within one year From one to two years From two to five years |
8,157 86 – |
1,759 5,326 – |
||
| 8,243 | 7,085 | |||
| Bank overdraft and loan analysis by origin: United Kingdom Southern Africa |
5,000 3,243 |
5,000 2,086 |
||
| 8,243 | 7,086 |
The United Kingdom bank loans and overdraft are secured by way of a first charge over the investment properties in the UK which are included in the financial statements at a value of £12,068,000. The South African bank loans are secured by way of a first charge over specific pieces of mining equipment and the debtors of the relevant company which holds the loan which are include in the financial statements at a value of £8,482,000.
Consistent with others in the mining and property industry, the group monitors its capital by its gearing levels. This is calculated as the net debt (loans less cash and cash equivalents) as a percentage of the equity. During 2011 this increased to 25.1% (2010: 9.4%) which was calculated as follows:
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Total debt Less cash and cash equivalents |
8,243 (4,041) |
7,085 (5,399) |
| Net debt | 4,202 | 1,686 |
| Total equity | 16,773 | 17,954 |
| Gearing | 25.1% | 9.4% |
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| As at 1 January Exchange adjustment Additions |
1,025 (184) 124 |
772 125 128 |
| As at 31 December | 965 | 1,025 |
The group enters into derivative transactions such as interest rate swaps and forward exchange contracts as necessary in order to help manage the financial risks arising from the group's activities. The main risks arising from the group's financing structure are interest rate risk, liquidity risk, market risk, credit risk, currency risk and commodity price risk. There have been no changes during the year of the main risks arising from the group's finance structure. The policies for managing each of these risks and the principal effects of these policies on the results are summarised below.
Interest rate risk is the risk that the value of a financial instrument or cashflows associated with the instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest bearing financial assets and liabilities that the group uses. Treasury activities take place under procedures and policies approved and monitored by the Board to minimise the financial risk faced by the group. Interest bearing assets comprise cash and cash equivalents which are considered to be short-term liquid assets and loans to joint ventures. Interest bearing borrowings comprise bank loans, bank overdrafts and variable rate finance lease obligations. The rates of interest vary based on LIBOR in the UK and PRIME in South Africa.
As at 31 December 2011, with other variables unchanged, a 1% increase or decrease in interest rates, on investments and borrowings whose interest rates are not fixed, would respectively decrease or increase the loss for the year by £28,000 (2010: £27,000). The effect on equity of this change would be an equivalent decrease or increase for the year of £28,000 (2010: £27,000).
The group's policy is to minimise refinancing risk. Efficient treasury management and strict credit control minimise the costs and risks associated with this policy which ensures that funds are available to meet commitments as they fall due. As at year end the group held borrowing facilities in the UK in Bisichi Mining Plc and in South Africa in Black Wattle Colliery (Pty) Ltd. The company was within its bank borrowing facilities and had not breached any of its covenants. New borrowings were signed in March 2010 in both the UK and South Africa. Further details are provided in borrowing facilities information later in this note. Trade and other payables are all due within one year.
The table below shows the currency profiles of cash and cash equivalents:
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Sterling South African Rand |
2,304 1,737 |
3,710 1,689 |
| 4,041 | 5,399 |
The group is exposed to market price risk through interest rate and currency fluctuations and commodity price risk.
The group is exposed to credit risk on its cash and cash equivalents and trade and other receivables as per the balance sheet. At the balance sheet date there was no significant concentration of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet which at year end amounted to £9,989,000 (2010: £9,302,000).
Trade debtor's credit ratings are reviewed regularly. The group only deposits surplus cash with well-established financial institutions of high quality credit standing. As at year end the amount of material receivables held past due date was £313,000 (2010: £nil). The amount of material receivables held past due date has subsequently been settled.
On 31 December 2011, cash at bank and in hand amounted to £4,041,000 (2010: £5,399,000) which is invested in short term bank deposits maturing within one year bearing interest at the bank's variable rates. Cash and cash equivalents all have a maturity of less than 3 months.
The group's financial assets and liabilities are as follows, representing both the fair value and the carrying value:
| Loans and receivables £'000 |
Financial Liabilities measured at amortised cost £'000 |
Assets at fair value through profit and loss £'000 |
2011 £'000 |
2010 £'000 |
|
|---|---|---|---|---|---|
| Cash and cash equivalents Investments held for trading Other Investments Trade and other receivables Bank Borrowings Finance leases Other Liabilities |
4,041 – – 5,948 – – – |
– – – – (8,243) (222) (8,407) |
– 730 148 – – – – |
4,041 730 148 5,948 (8,243) (222) (8,407) |
5,399 605 150 3,903 (7,085) (233) (7,677) |
| 9,989 | (16,872) | 878 | (6,005) | (4,938) |
Investments held for trading fall under level 1 of the fair value hierarchy into which fair value measurements are recognised in accordance with the levels set out in IFRS 7. Other investments are held at cost. The directors are of the opinion that the difference in value between cost and fair value of other investments is not significant or material. The comparative figures for 2010 fall under the same category of financial instrument as 2011.
In the UK, a term loan facility of £5million and an overdraft facility of £2million were signed by Bisichi Mining Plc in March 2010 with Royal Bank of Scotland. This facility will expire in December 2012 and is secured against the group's UK retail property portfolio. The group intends to negotiate new facilities before the expiry of the current facility and have obtained confirmation from the Royal Bank of Scotland that they are not aware of any reason why the bank should not continue to support the company following the expiry of the current facilities.
In South Africa, a structured trade finance facility of R60million (South African Rand) was signed by Black Wattle Colliery (pty) Limited in March 2010 with Absa Bank Limited, a South African subsidiary of Barclays Bank PLC. The facility is renewed annually and is secured against inventory, debtors and cash that are held by Black Wattle Colliery (pty) Limited. This facility comprises of a R40million revolving loan to cover the working capital requirements of the group's South African operations, and a R20million loan facility to cover guarantee requirements related to the group's South African mining operations.
At 31 December 2011 the group was within its bank borrowing facilities and had not breached any of its covenants. Term loan repayments are as set out in Note 20. Details of other financial liabilities are shown in notes 19 and 20.
Commodity price risk is the risk that the group's future earnings will be adversely impacted by changes in the market of commodities. The group is exposed to commodity price risk as its future revenues will be derived based on a contract with a physical off-take partner at prices that will be determined by reference to market prices of coal at the delivery date.
From time to time the group may manage its exposure to commodity price risk by entering into forward sales contracts with the goal of preserving future revenue streams.
All trading is undertaken in the local currencies. Funding is also in local currencies other than inter-company investments and loans and it is not the group's policy to obtain forward contracts to mitigate foreign exchange risk on these amounts.
As a result of the group's mining assets being held in South Africa and having a functional currency different than the presentation currency, the group balance sheet can be affected significantly by movements in the pounds sterling to the South African Rand. During 2011 and 2010 the group did not hedge its exposure of foreign investments held in foreign currencies. There is no significant impact on profit and loss from foreign currency movements associated with these South African subsidiary assets and liabilities as the effect of foreign currency gains or losses arising are recorded through the translation reserve.
The effect of a movement in foreign currencies on the income statement and equity of the group is shown in the sensitivity analysis below:
| Profit and loss 2011 £'000 |
2010 £'000 |
Equity 2011 £'000 |
Equity 2010 £'000 |
|
|---|---|---|---|---|
| If there were a 10% weakening of the South African Rand against | ||||
| Sterling with all other variables held constant – (decrease) | (260) | (136) | (511) | (573) |
| If there were a 10% strengthening of the South African Rand against | ||||
| Sterling with all other variables held constant – increase | 321 | 181 | 625 | 701 |
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Balance at 1 January Recognised in income Reallocated Exchange adjustment |
2,340 (572) 291 (178) |
2,985 (885) – 240 |
| 1,881 | 2,340 | |
| The deferred tax balance comprises the following: | ||
| Revaluation of properties Capital allowances |
1,086 (1,308) |
1,229 552 |
Short-term timing differences 2,103 559
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Authorised: 13,000,000 ordinary shares of 10p each | 1,300 | 1,300 |
| Allotted and fully paid: 10,556,839 (2010: 10,451,506) ordinary shares | 1,056 | 1,045 |
During the year 105,333 shares were issued at par as part of a scrip dividend paid relating to the prior year.
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Equity share options Net premium on share capital in joint venture |
414 86 |
399 86 |
| 500 | 485 |
1,881 2,340
Details of the share option scheme are shown in the Directors' remuneration report on page 24 and 25 under the heading Share option schemes which is within the audited part of this report. Further details of the share option schemes are set out below.
The Bisichi Mining PLC Unapproved Option Schemes:
| Year of grant | Subscription price per share |
Period within which options exercisable |
Number of share for which options outstanding at 31 December 2010 |
Number of share options issued/ (cancelled) during year |
Number of share for which options outstanding at 31 December 2011 |
|---|---|---|---|---|---|
| 2002 | 34.0p | Sep 2005 – Sep 2012 | 313,000 | – | 313,000 |
| 2004 | 149.0p | Sep 2007 – Sep 2014 | 80,000 | – | 80,000 |
| 2006 | 237.5p | Oct 2009 – Oct 2016 | 325,000 | – | 325,000 |
| 2010 | 202.5p | Aug 2013 – Aug 2020 | 80,000 | – | 80,000 |
The exercise of options under the Unapproved Share Option Schemes is subject to the satisfaction of objective performance conditions specified by the remuneration committee, which will conform to institutional shareholder guidelines and best practice provisions in force from time to time. The remuneration committee has not yet set these guidelines for the first scheme and the 2006 scheme. The performance conditions for the 2004 and 2010 scheme, agreed by members on 23 June 2005 and 31 August 2010 respectively, requires growth in net assets over a three year period to exceed the growth of the retail prices index by a scale of percentages.
The 2010 options were valued at £45,000 at date of grant using the Black-Scholes-Merton model with the following assumptions:
| Expected volatility | 62.80% |
|---|---|
| Expected life | 4.00 Years |
| Risk free rate | 1.44 % |
| Expected dividends | 1.95 % |
Expected volatility was determined by reference to the historical volatility of the share price over a period commensurate with the option's expected life. The expected life used in the model is based on the risk-averse balance likely to be required by the option holders.
| 2011 Number |
2011 Weighted average Exercise price |
2010 Number |
2010 Weighted average Exercise price |
|
|---|---|---|---|---|
| Outstanding at 1 January Granted / (cancelled) during year Outstanding at 31 December |
798,000 – 798,000 |
145.2p – 145.2p |
718,000 80,000 798,000 |
138.9p 202.5p 145.2p |
| Exercisable at 31 December | 718,000 | 138.9p | 718,000 | 138.9p |
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| As at 1 January | 394 | – |
| Issue of shares in subsidiary | – | 474 |
| Share of loss for the year | (102) | (74) |
| Exchange adjustment | (61) | (6) |
| As at 31 December | 231 | 394 |
The issue of shares in subsidiary in 2010 relates to the disposal of a 37.5% shareholding in Black Wattle Colliery (pty) Ltd. The total issued share capital in Black Wattle Colliery (pty) Ltd has been increased from 136 shares to 1000 shares at 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 a total of 675 ordinary shares;
Bisichi Mining (Exploration) Limited is a wholly owned subsidiary of Bisichi Mining PLC incorporated in England and Wales.
Vunani Mining (pty) Ltd is a South African Black Economic Empowerment company and minority shareholder in Black Wattle Colliery (pty) Ltd.
The "A" shares will rank pari passu with the ordinary shares save that they will have no dividend rights until such time as the dividends paid by Black Wattle Colliery (pty) Ltd on the ordinary shares subsequent to 30 October 2008 will equate to R832,075,000.
A non-controlling interest of 15% in Black Wattle Colliery (pty) Ltd is recognised for all profits distributable to the 110 ordinary shares held by Vunani Mining (pty) Ltd from the date of issue of the shares (18 October 2010). An additional non-controlling interest will be recognised for all profits distributable to the 265 "A" shares held by Vunani Mining (pty) Ltd after such time as the profits available for distribution, in Black Wattle Colliery (pty) Ltd, before any payment of dividends after 30 October 2008, exceeds R832,075,000.
| At 31 December | During the year | ||||
|---|---|---|---|---|---|
| Amounts owed to related party £'000 |
Amounts owed by related party £'000 |
Costs recharged (to) / by related party £'000 |
Cash paid (to)/ by related party £'000 |
||
| Related party: London & Associated Properties PLC (note (a)) Langney Shopping Centre Unit Trust (note (b)) Dragon Retail Properties Limited (note (c)) Ezimbokodweni Mining (pty) Limited (note (d)) |
367 – 1,205 – |
– (15) – (1,103) |
275 (21) (42) 100 |
(234) 6 42 – |
|
| As at 31 December 2011 | 1,572 | (1,118) | 312 | (186) | |
| London & Associated Properties PLC (note (a)) Langney Shopping Centre Unit Trust (note (b)) Dragon Retail Properties Limited (note (c)) Ezimbokodweni Mining (pty) Limited (note (d)) |
326 – 1,205 – |
– – – (1,203) |
275 – (72) (287) |
(92) – 72 – |
|
| As at 31 December 2010 | 1,531 | (1,203) | (84) | (20) |
London & Associated Properties PLC is a substantial shareholder. Langney Shopping Centre Unit Trust and Dragon Retail Properties Limited is a joint venture and is treated as a non-current asset investment. Ezimbokodweni Mining (pty) Limited is a joint venture and is treated as a noncurrent asset held for sale as shown under Note 14.
Property management, office premises, general management, accounting and administration services are provided for Bisichi Mining PLC and its UK subsidiaries.
Langney Shopping Centre Unit Trust is an unlisted property unit trust incorporated in Jersey.
Dragon Retail Properties Limited is owned equally by the company and London & Associated Properties PLC.
Ezimbokodweni Mining is a prospective coal production company based in South Africa.
Details of key management personnel compensation and interest in share options are shown in the Directors' Remuneration Report on pages 24 and 25 under the headings Directors' remuneration, Pension schemes and incentives and Share option schemes which is within the audited part of this report. The total employers national insurance paid in relation to the remuneration of key management was £117,000.
| 2011 Number |
2010 Number |
|
|---|---|---|
| The average weekly numbers of employees of the group during the year were as follows: |
||
| Production Administration |
229 18 |
257 18 |
| 247 | 275 | |
| £'000 | £'000 | |
|---|---|---|
| Staff costs during the year | ||
| were as follows: | ||
| Salaries | 5,485 | 5,666 |
| Social security costs | 117 | 111 |
| Pension costs | 255 | 254 |
| Share based payments | 15 | 5 |
| 5,872 | 6,036 |
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Commitments for capital expenditure approved but not contracted for at the year end | 558 | 146 |
| Share of commitment of capital expenditure in joint venture | – | 2,451 |
Present value of head leases on properties
| 2011 £'000 |
Minimum lease payments 2010 £'000 |
Present value of Minimum lease payments 2011 £'000 |
2010 £'000 |
|
|---|---|---|---|---|
| Within one year | 13 | 14 | 13 | 14 |
| Second to fifth year | 53 | 56 | 50 | 52 |
| After five years | 1,627 | 1,708 | 159 | 167 |
| Discounting adjustment | 1,693 | 1,778 | 222 | 233 |
| (1,471) | (1,545) | – | – | |
| Present value | 222 | 233 | 222 | 233 |
Finance lease liabilities are in respect of leased investment property. Many of the leases provide for contingent rents in addition to the rents above which are a proportion of rental income. Finance lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in event of default.
The group leases out its investment properties under operating leases. The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:
| 2011 | 2010 | |
|---|---|---|
| £'000 | £'000 | |
| Within one year | 902 | 805 |
| Second to fifth year | 2,669 | 2,707 |
| After five years | 10,169 | 10,650 |
| 13,740 | 14,162 |
Bank guarantees have been issued by the bankers of Black Wattle Colliery (pty) Limited on behalf of the company to third parties. The guarantees are secured against the assets of the company and have been issued in respect of the following:
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Rail siding | 2 | 3 |
| Rehabilitation of mining land | 1,599 | 1,732 |
| Water & electricity | 74 | 90 |
at 31 December 2011
| Notes | 2011 £'000 |
2010 £'000 |
|
|---|---|---|---|
| Fixed assets | |||
| Tangible assets | 34 | 12,075 | 12,138 |
| Investment in joint ventures | 35 | 1,734 | 846 |
| Other investments | 35 | 1,698 | 1,013 |
| 15,507 | 13,997 | ||
| Current assets | |||
| Debtors | 36 | 2,584 | 2,794 |
| Bank balances | 3,237 | 4,841 | |
| 5,821 | 7,635 | ||
| Creditors – amounts falling due within one year | 37 | (7,394) | (2,508) |
| Net current (liabilities)/assets | (1,573) | 5,127 | |
| Total assets less current liabilities | 13,934 | 19,124 | |
| Creditors – amounts falling due in more than one year – medium term bank loan | 37 | – | (5,000) |
| Net assets | 13,934 | 14,124 | |
| Capital and reserves | |||
| Called up share capital | 24 | 1,056 | 1,045 |
| Share premium account | 24 | 169 | – |
| Revaluation reserve | 39 | 6,141 | 6,183 |
| Other reserves | 39 | 415 | 400 |
| Retained earnings | 39 | 6,153 | 6,496 |
| Shareholders' funds | 13,934 | 14,124 |
The company financial statements were approved and authorised for issue by the board of directors on 18 April 2012 and signed on its behalf by:
Director Director
A R Heller G J Casey Company Registration No. 112155
for the year ended 31 December 2011
The following are the main accounting policies of the company:
The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment properties, and in accordance with applicable UK Generally Accepted Accounting Practice.
Dividends are credited to the profit and loss account when received.
Provision for depreciation on tangible fixed assets is made in equal annual instalments to write each item off over its useful life. The rates generally used are:
| Motor vehicles | 25 – 33 per cent |
|---|---|
| Office equipment | 10 – 33 per cent |
Monetary assets and liabilities expressed in foreign currencies have been translated at the rates of exchange ruling at the balance sheet date. All exchange differences are taken to the profit and loss account.
The investment property portfolio is included in the financial statements at open market valuation. An external professional valuation is carried out annually by professional external surveyors. Surpluses and deficits arising on valuations are taken direct to the revaluation reserve. No depreciation or amortisation is provided in respect of freehold and leasehold investment properties. The directors consider that this accounting policy, which is not in accordance with the Companies Act 2006, results in the accounts giving a true and fair view. Depreciation or amortisation is only one of many factors reflected in the valuation and the amount which might otherwise have been shown cannot be separately identified or quantified.
Investments of the company are stated in the balance sheet as fixed assets at cost less provisions for impairment.
Bank loans and overdrafts are included in creditors on the company balance sheet net of the unamortised cost of financing.
Interest payable on those facilities is expensed as a finance cost in the period to which it relates.
The company uses derivative financial instruments to manage the interest rate risk associated with the financing of the group's business. No trading in such financial instruments is undertaken.
Debtors do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated recoverable amounts.
Creditors are not interest bearing and are stated at their nominal value.
Investments in joint ventures, being those entities over whose activities the group has joint control as established by contractual agreement, are included at cost, less impairment.
As required by FRS 19 "Deferred Tax", full provision is made for deferred tax arising from all timing differences between the recognition of gains and losses in the financial statements and recognition in the tax computation, except for those timing differences in respect of which the standard specifies that deferred tax should not be recognised. Deferred tax assets and liabilities are calculated at the tax rates expected to be effective at the time the timing differences are expected to reverse.
All leases are "Operating Leases" and the annual rentals are charged to the profit and loss account on a straight line basis over the lease term. Rent free periods or other incentives received for entering into a lease are accounted for over the period of the lease so as to spread the benefit received over the lease term.
The company makes contributions to a money purchase scheme and the costs are charged to the profit and loss account in the period to which they relate.
The company operates a share option scheme. The fair value of the share option scheme is determined at the date of grant. This fair value is then expensed on a straight-line basis over the vesting period, based on an estimate of the number of shares that will eventually vest. The fair value of options granted is calculated using a binomial model or Black-Scholes-Merton model. Details of the share options in issue are disclosed in the Directors' Remuneration Report on pages 24 and 25 under the heading Share option schemes which is within the audited part of this report.
The aggregate amount of dividends comprises:
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Final dividends in respect of prior year but not recognised as liabilities in that year: | 418 | 418 |
The aggregate amount of dividends to be paid and not recognised as liabilities as at year end is £422,000 (2010: £418,000).
| Investment properties | |||||
|---|---|---|---|---|---|
| Long | Motor | Office | |||
| Freehold | leasehold | vehicles | equipment | Total | |
| £'000 | £'000 | £'000 | £'000 | £'000 | |
| Cost or valuation at 1 January 2011 | 9,110 | 3,000 | 137 | 51 | 12,298 |
| Additions | – | – | – | 1 | 1 |
| Disposals | – | – | (89) | – | (89) |
| Revaluation | 8 | (50) | – | – | (42) |
| Cost or valuation at 31 December 2011 | 9,118 | 2,950 | 48 | 52 | 12,168 |
| At valuation | 9,118 | 2,950 | – | – | 12,068 |
| At cost | – | – | 48 | 52 | 100 |
| 9,118 | 2,950 | 48 | 52 | 12,168 | |
| Accumulated depreciation | |||||
| at 1 January 2011 | – | – | 117 | 43 | 160 |
| Charge for the year | – | – | 13 | 3 | 16 |
| Disposals in year | – | – | (83) | – | (83) |
| Accumulated depreciation at 31 December 2011 | – | – | 47 | 46 | 93 |
| Net book value at 31 December 2011 | 9,118 | 2,950 | 1 | 6 | 12,075 |
| Net book value at 31 December 2010 | 9,110 | 3,000 | 20 | 8 | 12,138 |
Details of historical cost of investment properties are shown in note 10.
| Joint | Subsidiaries ventures |
Other | ||||
|---|---|---|---|---|---|---|
| shares £'000 |
Shares £'000 |
Loans £'000 |
investments £'000 |
Total £'000 |
||
| Cost at 1 January 2011 Invested during the year Drawn in year |
846 888 – |
361 – – |
1,313 – 7 |
300 – – |
1,974 – 7 |
|
| Cost at 31 December 2011 | 1,734 | 361 | 1,320 | 300 | 1,981 | |
| Provision for impairment As at 1 January Transfer |
– – |
– – |
(678) 678 |
(283) – |
(961) 678 |
|
| As at 31 December 2011 | – | – | – | (283) | (283) | |
| Net book value at 31 December 2011 | 1,734 | 361 | 1,320 | 17 | 1,698 | |
| Net book value at 31 December 2010 | 846 | 361 | 635 | 17 | 1,013 | |
Other investments comprise £17,000 (2010: £17,000) shares and £nil (2010: £nil) loans.
Investments in subsidiaries are detailed in note 15. In the opinion of the directors the aggregate value of the investment in subsidiaries is not less than the amount shown in these financial statements.
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Amounts falling due within one year: | ||
| Amounts due from subsidiary undertakings | 2,322 | 2,578 |
| Tax recoverable | 21 | – |
| Other debtors | 128 | 110 |
| Prepayments and accrued income | 113 | 106 |
| 2,584 | 2,794 |
| 2011 £'000 |
2010 £'000 |
|
|---|---|---|
| Amounts falling due within one year: | 5,000 | – |
| Bank loan (secured) | 1,205 | 1,205 |
| Joint venture | – | 292 |
| Current taxation | 96 | 48 |
| Other taxation and social security | 246 | 424 |
| Other creditors | 847 | 539 |
| Accruals and deferred income | 7,394 | 2,508 |
| Amounts falling due in more than one year: Bank loan (secured) |
– | 5,000 |
| Bank and other loan instalments by reference to the balance sheet date: | ||
| Within one year | 5,000 | – |
| From one to two years | – | 5,000 |
| From two to five years | – | – |
| 5,000 | 5,000 |
The bank loan of the company is secured by a charge over freehold and long leasehold properties.
No provision has been made for the approximate taxation liability at 26.5% (2010: 28%) of £1,086,000 (2010: £1,229,000) which would arise if the investment properties were sold at the stated valuation.
| Share | Share | Revaluation | Other | Retained | Shareholders | |
|---|---|---|---|---|---|---|
| capital | premium | reserve | reserve | earnings | funds | |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
| Balance at 1 January 2011 | 1,045 | – | 6,183 | 400 | 6,496 | 14,124 |
| Dividend paid | 11 | 169 | – | – | (418) | (238) |
| Revaluation of investment property | – | – | (42) | – | – | (42) |
| Share options | – | – | – | 15 | – | 15 |
| Retained profit for the year | – | – | – | – | 75 | 75 |
| Balance at 31 December 2011 | 1,056 | 169 | 6,141 | 415 | 6,153 | 13,934 |
A profit and loss account for Bisichi Mining PLC has not been presented as permitted by Section 408(2) of the Companies Act 2006. The profit for the financial year, before dividends, was £75,000 (2010: £1,016,000).
Details of share capital are set out in note 24 and details of the share options are shown in the Directors' Remuneration Report on page 25 under the heading Share option schemes which is within the audited part of this report and note 26.
| At 31 December | During the year | ||
|---|---|---|---|
| Amounts owed by related party £'000 |
Costs recharged (to)/by related party £'000 |
Cash paid (to)/by related party £'000 |
|
| Related party: Black Wattle Colliery (pty) Ltd (note (a)) Ninghi Marketing Limited (note (b)) |
(300) (102) |
1,485 – |
654 – |
| As at 31 December 2011 | (402) | 1,485 | 654 |
| Black Wattle Colliery (pty) Ltd (note (a)) Ninghi Marketing Limited (note (b)) |
(2,776) (102) |
(2,501) – |
– – |
| As at 31 December 2010 | (2,878) | (2,501) | – |
Black Wattle Colliery (pty) Ltd is a coal mining company based in South Africa.
Ninghi Marketing Limited is a dormant coal marketing company incorporated in England & Wales.
In addition to the above, the company has issued a company guarantee of R20,000,000 (2010: R17,000,000) (South African Rand) to the bankers of Black Wattle Colliery (pty) Ltd in order to cover bank guarantees issued to third parties in respect of the rehabilitation of mining land.
Under Financial Reporting Standard 8 Related Party Disclosures, the Company has taken advantage of the exemption from disclosing transactions with other wholly owned Group companies.
Details of other related party transactions are given in note 28 of the Group financial statements.
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 immediately.
If you have sold or otherwise transferred all your ordinary shares in Bisichi Mining PLC please forward this document, with the accompanying Form of Proxy, at once to the purchaser or transferee or the stockbroker, bank or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.
To consider and, if thought fit, pass resolutions 1 to 9 as ordinary resolutions:
| 1 | To receive and adopt the Company's annual accounts for the year ended 31 December 2011 | |
|---|---|---|
| together with the directors' report and the auditors' report on those accounts. | (Resolution 1) | |
| 2 | To approve the remuneration report for the year ended 31 December 2011. | (Resolution 2) |
| 3 | To declare and approve a final dividend of 3.0p per share. | (Resolution 3) |
| 4 | To re-elect as a director Mr A R Heller. | (Resolution 4) |
| 5 | To re-elect as a director Mr R G Grobler. | (Resolution 5) |
| 6 | To re-elect as a director Mr C A Joll. | (Resolution 6) |
| 7 | To re-elect as a director Mr J A Sibbald. | (Resolution 7) |
| 8 | To re-appoint PKF (UK) LLP as auditor, to hold office from the conclusion of this meeting until the conclusion of the next annual general meeting. |
(Resolution 8) |
| 9 | To authorise the directors to determine the remuneration of the auditor. | (Resolution 9) |
To consider and, if thought fit, pass resolution 10 as an ordinary resolution and resolutions 11 to 13 as special resolutions:
10 That:
but subject to such exclusions and other arrangements as the directors may consider necessary or appropriate in relation to fractional entitlements, record dates, treasury shares or any legal, regulatory or practical problems in or under the laws of any territory (including the requirements of any regulatory body or stock exchange) or any other matter;
(Resolution 11)
London W1J 6NE Heather Curtis 18 April 2012 Secretary Bisichi Mining PLC
24 Bruton Place By order of the board
Registered in England and Wales – Number 112155
14. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the annual general meeting to be held at 11.00am on 31 May 2012 and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider should refer to their CREST sponsors or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the Company's agent, Capita Registrars Limited (CREST Participant ID: RA10), no later than 48 hours before the time appointed for the meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the Company's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
CREST members and, where applicable, their CREST sponsor or voting service provider should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider takes) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsor or voting service provider are referred in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
15. Only those members entered on the register of members of the Company at 6.00 p.m. on 29 May 2012 or, in the event that this meeting is adjourned, in the register of members as at 6.00 p.m. on the day two days before the date of any adjourned meeting, shall be entitled to attend and vote at the meeting in respect of the number of ordinary shares registered in their names at that time. Changes to the entries on the register of members after the close of business on 29 May 2012 or, in the event that this meeting is adjourned, in the register of members after the close of business on the day two days before the date of the adjourned meeting, shall be disregarded in determining the rights of any person to attend or vote at the meeting.
Pursuant to Chapter 5 of Part 16 of the Companies Act 2006 (sections 527 to 531), where requested by a member or members meeting the qualification criteria set out at note 17 below, the Company must publish on its website, a statement setting out any matter that such member or members propose to raise at the meeting relating to the audit of the Company's accounts (including the auditor's report and the conduct of the audit) that are to be laid before the meeting.
Where the Company is required to publish such a statement on its website:
The request:
In order to be able to exercise the members' right to require the Company to publish audit concerns (see note 16), the relevant request must be made by:
Where a member or members wishes to request the Company to publish audit concerns (see note 16), such request be must be made in accordance with one of the following ways:
The Annual General Meeting will be held at the Royal Automobile Club 89 Pall Mall London SW1Y 5HS
The nearest London Underground stations are Piccadilly Circus and Green Park.
Please note the RAC Club dress code requires gentlemen to wear a business suit or tailored jacket and trousers, together with a collar and tie. Ladies are requested to dress with equal formality.
The notes on the following pages give an explanation of the proposed resolutions.
Resolutions 1 to 10 are proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than half of the votes cast must be in favour of the resolution. Resolutions 11 to 13 are proposed as special resolutions. This means that for each of those resolutions to be passed, at least three-quarters of the votes cast must be in favour of the resolution.
The Directors will present their report and the audited accounts for the year ended 31 December 2011 together with the auditors' report thereon.
Resolution 2 is to approve the Remuneration Report on pages 24 & 25 of the Company's annual report and accounts for the year ended 31 December 2011 ("Annual Report"). Section 439 of the Companies Act 2006 requires that a remuneration report is put to a vote of shareholders at the Annual General Meeting. This vote is advisory and the directors' entitlement to receive remuneration is not conditional on it.
Final dividends are approved by the shareholders of the Company but cannot be more than the amount recommended by the directors. The directors are recommending a final dividend for the year ended 31 December 2011 of 3.0p pence per ordinary share due and payable on 6 August 2012 to the Shareholders on the register at close of business on 6 July 2012. This resolution seeks shareholders' approval of the proposed dividend.
The Articles of Association of the Company require a proportion of the directors to retire at each annual general meeting of the Company. In addition, the Combined Code on Corporate Governance recommends that directors should submit themselves for re-election at least once every three years. This year four of the current directors, A R Heller, R G Grobler, C A Joll and J A Sibbald, will retire and each offer themselves for re-election. Biographical details relating to each director can be found on page 16 of the Annual Report.
The Company is required to appoint auditors at each general meeting at which accounts are laid before shareholders, to hold office until the next such meeting. The resolution proposes that PKF (UK) LLP be re-appointed as auditor for the current year.
This resolution proposes that the directors be authorised to set the remuneration of the auditor.
In certain circumstances it is important for the Company to be able to allot shares up to a maximum amount without needing to seek shareholder approval every time an allotment is required. Paragraph 10.1.1 of Resolution 10 would give the directors the authority to allot shares in the Company and grant rights to subscribe for, or convert any security into, shares in the Company up to an aggregate nominal value of £351,542. This represents approximately 33.3 per cent of the ordinary share capital of the Company in issue (excluding treasury shares) at 17 April 2012 (being the last practicable date prior to the publication of this Directors' Report). Paragraph 10.1.2 of Resolution 10 would give the directors the authority to allot shares in the Company and grant rights to subscribe for, or convert any security into, shares in the Company up to a further aggregate nominal value of £351,542, in connection with a pre-emptive rights issue. This amount represents approximately 33.3 per cent. of the ordinary share capital of the Company in issue (excluding treasury shares) at 17 April 2012 (being the last practicable date prior to the publication of this Directors' Report).
Therefore, the maximum nominal value of shares or rights to subscribe for, or convert any security into, shares which may be allotted or granted under resolution 10 is £703,084.
Resolution 10 complies with guidance issued by the Association of British Insurers (ABI).
The authority granted by resolution 10 will expire on 31 August 2013 or, if earlier, the conclusion of the next Annual General Meeting of the Company. The directors have no present intention to make use of this authority. However, if they do exercise the authority, the directors intend to follow emerging best practice as regards its use as recommended by the ABI.
If the directors wish to allot any of the unissued shares of the Company for cash in accordance with resolution 10, the new shares must generally be offered first to shareholders in proportion to their existing shareholdings.
In certain circumstances, it may be in the interests of the Company for the directors to be able to allot some shares for cash without having to offer them first to existing shareholders.
Under resolution 11 the directors are seeking power to allot equity securities (as defined by section 560 of the Companies Act 2006) or sell treasury shares for cash as if the pre-emption rights contained in Section 561 of the Companies Act 2006 did not apply:
In addition, there are legal, regulatory and practical reasons why it may not always be possible to issue new shares under a rights issue to some shareholders, particularly those resident overseas. To cater for this, the resolution also permits the directors to make appropriate exclusions or arrangements to deal with such difficulties.
In compliance with the guidelines issued by the Pre-emption Group, the directors, will ensure that, other than in relation to a rights issue, no more than 7.5% of the issued ordinary shares (excluding treasury shares) will be allotted for cash on a non pre-emptive basis over a rolling three year period unless shareholders have been notified and consulted in advance.
The power in resolution 11 will expire when the authority given by resolution 10 is revoked or expires.
Resolution 12 will be proposed to allow the Company to call general meetings (other than an Annual General Meeting) on 14 clear days' notice. A resolution in the same terms was passed at the Annual General Meeting in 2011. The notice period required by the Companies Act 2006 for general meetings of the Company is 21 days unless shareholders approve a shorter notice period, which cannot however be less than 14 clear days. Annual General Meetings must always be held on at least 21 clear days' notice. It is intended that the flexibility offered by this resolution will only be used for time-sensitive, non-routine business and where merited in the interests of shareholders as a whole. The approval will be effective until the Company's next Annual General Meeting, when it is intended that a similar resolution will be proposed. In order to be able to call a general meeting on less than 21 clear days' notice, the Company must make a means of electronic voting available to all shareholders for that meeting.
The effect of Resolution 13 would be to renew the directors' current authority to make limited market purchases of the Company's ordinary shares of 10 pence each. The power is limited to a maximum aggregate number of 1,055,684 ordinary shares (representing approximately 10 per cent of the Company's issued share capital as at 17 April 2012 (being the last practicable date prior to publication of this Directors' Report)). The minimum price (exclusive of expenses) which the Company would be authorised to pay for each ordinary share would be 10 pence (the nominal value of each ordinary share). The maximum price (again exclusive of expenses) which the Company would be authorised to pay for an ordinary share is an amount equal to the higher of (i) 105% of the average market price for an ordinary share for the five business days preceding any such purchase and (ii) the higher of the price of the last independent trade for an ordinary share and the highest current independent bid for an ordinary share as derived from the trading venue where the purchase is to be carried out. The authority conferred by resolution 13 will expire at the conclusion of the Company's next Annual General Meeting or 15 months from the passing of the resolution, whichever is the earlier. Any purchases of ordinary shares would be made by means of market purchase through the London Stock Exchange. If granted, the authority would only be exercised if, in the opinion of the directors, to do so would result in an increase in earnings per share or net asset value per share and would be in the best interests of shareholders generally. In exercising the authority to purchase ordinary shares, the directors may treat the shares that have been bought back as either cancelled or held as treasury shares (shares held by the Company itself). No dividends may be paid on shares which are held as treasury shares and no voting rights are attached to them.
As at 17 April 2012 (being the last practicable date prior to the publication of this Directors' Report) the total number of options to subscribe for new ordinary shares in the company was 798,000 shares representing 7.56% of the company's issued share capital (excluding treasury shares) as at that date. Such number of options to subscribe for new ordinary shares would represent approximately 8.40% of the reduced issued share capital of the company (excluding treasury shares) assuming full use of the authority to make market purchases sought under resolution 13.
The directors consider that all of the resolution to be put to the meeting are in the best interests of the Company and its shareholders as a whole. The Board recommends that shareholders vote in favour of all resolutions.
in respect of * ordinary shares being my/our voting entitlement* to attend and vote for me/us on my/our behalf at the Annual General Meeting of the company to be held on Thursday 31 May 2012 at 11.00 am at the Royal Automobile Club, 89 Pall Mall, London, SW1Y 5HS and at any adjournment thereof. I/We direct that my/our vote(s) be cast on the resolutions as indicated by an X in the appropriate spaces below.
Please tick here if this proxy appointment is one of multiple appointments being made*
*For the appointment of more than one proxy, please refer to Explanatory Note 2 below.
| Ordinary Resolutions | For | Against | Vote Withheld |
|---|---|---|---|
| 1 To receive and adopt the company's annual accounts for the year ended 31 December 2011 together with the directors' report and the auditors' report on those accounts. |
|||
| 2 To approve the remuneration report for the year ended 31 December 2011. | |||
| 3 To declare and approve a final dividend of 3.0p per share. | |||
| 4 To re-elect as a director Mr A R Heller. | |||
| 5 To re-elect as a director Mr R Grobler. | |||
| 6 To re-elect as a director Mr C A Joll. | |||
| 7 To re-elect as a director Mr J A Sibbald. | |||
| 8 To re-appoint PKF (UK) LLP as auditor. | |||
| 9 To authorise the directors to determine the remuneration of the auditor. | |||
| Special Business | |||
| 10 To authorise the directors to allot securities. | |||
| Special Resolutions | |||
| 11 To empower the directors to disapply statutory pre-emption rights. | |||
| 12 To authorise the calling of general meetings of the Company on 14 clear days' notice. | |||
| 13 To authorise the Company to make market purchases of its ordinary shares. | |||
| Address | ||
|---|---|---|
| Postcode | ||
| Signed this day of 2012 (signature) |
Notes:
Tuck inside facing flap
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Bisichi Mining PLC 24 Bruton Place London W1J 6NE email: [email protected]
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