logo-loader
RNS
Bisichi Mining PLC

BISICHI MINING - Annual Financial Report

BISICHI MINING PLC

Results for the year ended31 December 2018

Summary:

Chairman, Sir , comments:
Michael Heller

“These results can be attributed mainly to the strong performance from Black Wattle which continued to benefit from the infrastructure improvements to the coal washing plant that were reported to shareholders in 2017. These improvements have enabled the group to wash at consistent levels of production and achieve an increased overall yield compared to prior years. In addition, the mine was able to benefit from significantly improved coal prices achievable for our coal during the year.

Looking forward, although we have seen global economic factors impact coal demand in some international markets, the demand for South African coal has remained strong and we expect overall levels of production from Black Wattle to remain consistent with 2018. Accordingly, we continue to be confident about the ability of our South African coal mining operations to contribute strongly to our group earnings and cash generation for the foreseeable future.”

For further information, please call:

or , 020 7415 5030Andrew HellerGarrett CaseyBisichi Mining PLC




ANNUAL REPORT 2018BISICHI MINING PLC

 Strategic report

The Directors present the Strategic Report of the company for the year ending . The aim of the Strategic Report is to provide shareholders with the ability to assess how the Directors have performed their duty to promote the success of the company for the collective benefit of shareholders.Strategic report
31 December 2018

STRATEGIC REPORT

Chairman’s Statement

For the year ended , I am pleased to report that your company achieved earnings before interest, tax, depreciation and amortisation (EBITDA) of £8.6million (2017: £3.7 million) and operating profit before depreciation, fair value adjustments and exchange movements (Adjusted EBITDA) of £9.1million (2017: £5.8million).31 December 2018

These results can be attributed mainly to the strong performance from Black Wattle, our South African coal mining operation, which continued to benefit from the infrastructure improvements to the coal washing plant that were reported to shareholders in 2017. These improvements have enabled the group to wash at consistent levels of production and achieve an increased overall yield compared to prior years. In addition, the mine was able to benefit from significantly improved coal prices achievable for our coal during the year.

Looking forward, although we have seen global economic factors impact coal demand in some international markets, the demand for South African coal has remained strong and we expect overall levels of production from Black Wattle to remain consistent with 2018. Accordingly, we continue to be confident about the ability of our South African coal mining operations to contribute strongly to our group earnings and cash generation for the foreseeable future.

I am also pleased to report that during the course of the year Black Wattle signed an agreement to acquire additional coal reserves. This will enable us to further benefit from the strong levels of domestic demand and is in line with the group’s strategy of actively seeking new opportunities to extend the life of mine of its existing mining operations. The new reserve has an expected run of mine tonnage of 1.9million metric tonnes and is contiguous to Black Wattle’s operations. The acquisition, which is still subject to local regulatory approval, will be financed from the group’s existing South African cash resources and banking facilities.

A fuller explanation on the performance of our mining operations for the year can be found within the Mining Review and Financial & Performance Review sections of this report.

The group’s retail property portfolio, which underpins the group and which is managed actively by London & Associated Properties Plc, continues to perform well, with average rental yields for the portfolio remaining stable during the year. As reported to shareholders earlier this year, the Group has formed a joint venture with London & Associated Properties PLC and which has acquired the freehold of a retail and residential redevelopment in West Ealing, . The joint venture has planning consent for 20 flats at first and second floor levels which will be eligible for the Government Help to Buy Scheme. Since reporting this investment, the joint venture has begun preparing a planning application for a larger residential redevelopment of 55 flats on the site and we look forward to updating shareholders as the development progresses. A fuller explanation of the portfolio’s valuation results and financial position are discussed in the Financial & Performance Review and Directors report.UKLondonUKMetroprop Real Estate Ltd

Looking forward, management is currently investigating other major investment opportunities in both the mining sector and the domestic property sector and is conserving the group’s cash reserves accordingly.

Finally, in light of the strong results achieved for the year, your directors recommend a special dividend of 2p (2017: 1p) per share in addition to a final dividend of 3p (2017: 3p). Both dividends will be payable on Friday to shareholders registered at the close of business on . This takes the total dividends per share for the year to 6p (2017: 5p). Based on the 2018 year end share price, this represents a 6.5% yield.26 July 20195 July 2019

On behalf of the Board and shareholders, I would like to thank all of our staff for their hard work during the course of the year.

Sir ChairmanMichael Heller

25 April 2019

STRATEGIC REPORT

Principal activity, strategy & business model

The company carries on business as a mining company and its principal activity is coal mining in . The company’s strategy is to create and deliver long term sustainable value to all our stakeholders through our business model which can be broken down into three key areas:South Africa

1    Acquisition & investment

            The group actively seeks new opportunities to extend the life of mine of its existing mining operations or develop new independent mining operations in . The group aims to achieve this through new commercial arrangements and the acquisition of additional coal reserves nearby to or independent from our existing mining operations.South Africa

In addition, we seek to balance the high risk of our mining operations with a dependable cash flow from our property investment operations. The company primarily invests in retail property across the as well as residential property development. The Retail property portfolio is managed by London & Associated Properties PLC whose responsibility is to actively manage the portfolio to improve rental income and thus enhance the value of the portfolio over time.UKUKUK

2    Production & sustainability

The group strives to mine its coal reserves in an economical and sustainable manner that delivers long term value to all our stakeholders.

3    Processing & marketing

The group seeks to achieve additional value from its mining investments through the washing, transportation and marketing of coal into both the domestic and export markets.

STRATEGIC REPORT

Mining Review

As noted in the Chairman’s statement, the group’s strong performance in 2018 can be attributed mainly to Black Wattle, our South African coal mining operation. During the year the mine was able to benefit fully from the coal infrastructure improvement implemented in 2017 achieving an increased overall yield compared to the prior year and a consistent Run of Mine production through the washing plant. This allowed the group to benefit from the higher prices achievable for our coal during the year.

Production and operations

For the first half of 2018, the mine achieved mining production of 670,000 metric tonnes (2017 H1: 582,000 metric tonnes), improving on the first half production achieved in 2017, which was impacted by water and stone contamination issues. During the second half of the year, production remained fairly consistent with the exception of some temporary blasting and water issues at our opencast area which had a limited impact on production in the last quarter of the year. Overall the mine achieved production of 649,000 metric tonnes (2017 H2: 714,000 metric tonnes) during the second half of the year.

As a result of the higher production in the first half of the year, overall mining production from Black Wattle increased in 2018, with total mining production for the year of 1.32million metric tonnes (2017: 1.30million metric tonnes). In 2019 we have commenced mining in a new opencast area at Black Wattle contiguous to the area that was mined in 2018. This new area will be mined throughout 2019 and we expect mining production levels and yields achieved in 2018 to be maintained in 2019.

As mentioned in the Chairman’s statement, we are pleased to report that Black Wattle has signed an agreement to acquire a new coal reserve contiguous to Black Wattle’s operations. The reserve has an expected run of mine tonnage of 1.9million metric tonnes, can be mined by opencast and is of a similar quality to Black Wattle’s existing reserves. The acquisition is subject to regulatory approval from the and will be financed out of the group’s existing South African cash resources and banking facilities. The group continues to seek further opportunities to extend the life of mine of its existing mining operations or develop new independent mining operations in .South African Department of Mineral ResourcesSouth Africa

The infrastructure improvements to the washing plant that were completed in 2017, will allow the group to mine or buy in coal from similar reserves within the area that may be affected by stone contamination issues. This broadens the scope of new opportunities for the group to achieve additional value from our coal washing operations in separate from the group’s existing mining operations. In order to maximise these opportunities, in , Black Wattle transferred its washing plant operations into a wholly owned subsidiary called Sisonke Coal Processing which will operate as a stand-alone commercial entity. In addition, the group has committed to further improvements to the washing plant to be implemented in 2019, including a new high-pressure filter press segment which will improve the management and quality of coal fines produced from our washing plant. We look forward to the positive impact the further improvements to the washing plant will have on the returns achievable from our remaining reserves.South AfricaJanuary 2019

Main trends/markets

During 2018 management continued to sell coal into both the export and domestic market. Black Wattle’s export sales were via and primarily under the Quattro programme, which allows junior black-economic empowerment coal producers direct access to the coal export market via . We would like to thank Vunani Limited, our black economic empowered shareholders at Black Wattle, for managing and developing this opportunity.Richards Bay Coal TerminalRichards Bay Coal Terminal

A shortage of coal in the domestic market and strong demand for coal in the international market impacted positively on the prices achievable for our coal during the period. At the beginning of 2018, the average weekly price of Free on Board (FOB) Coal from (API4) was . During the year the API4 price remained mainly range bound between and ending again at by the end of the year. Overall the average weekly API4 price for 2018 was compared to in 2017. The higher overall coal prices compared to the prior period, along with a year on year stable Rand attributed to the group achieving an overall increase in the average Rand price of R879 per tonne of export coal sold in 2018 from the mine compared to R773 in 2017. Looking forward into 2019, although we have seen a weakening in the API$ price in the first quarter of 2019, we expect demand to remain stable for South African coal in the seaborne market.Richards Bay Coal Terminal$95$90$105$95$98$84

In the domestic market, a continued high demand impacted positively on prices achievable for our coal in 2018. Overall, the group achieved an average price of R500 per tonne of domestic coal sold in 2018 compared to R397 in 2017. Looking forward, domestic prices to date have remained stable and we have continued to see strong demand for our coal.

Overall, the increase in group revenue, compared to the prior year, can mainly be attributed to the increased overall yield and higher prices achieved for our coal at Black Wattle.

Sustainable development

Black Wattle continues to strive to conduct business in a safe, environmentally and socially responsible manner. Some highlights of our Health, Safety and Environment performance in 2018:

•     Black Wattle Colliery recorded one Lost Time Injury during 2018 (2017: One).

•     No cases of Occupational Diseases were recorded.

•     Zero claims for the Compensation for Occupational Diseases were submitted.

In , the new government regulated Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (New ) came into force from . The New is a regulatory instrument that facilitates sustainable transformation, growth and development of the mining industry. The group is committed to fully complying with the New and providing adequate resources to this area in order to ensure opportunities are expanded for historically disadvantaged South Africans (HDSAs) to enter the mining and minerals industry. In addition, we continue to adhere and make progress in terms of our Social and Labour Plan and our various BEE initiatives. A fuller explanation of these can be found in our Sustainable Development Report on page 8.South AfricaMining CharterMining CharterMining CharterMarch 2019

Prospects

Looking forward to 2019, management will focus on maintaining production at Black Wattle at the levels achieved in 2018 and increasing our life of mine through the acquisition of additional reserves. Management will also seek to achieve additional value from its investments in the washing plant that is now held in Sisonke Coal Processing. With strong demand for our coal, we believe the group is in a strong position to achieve significant value from our South African mining operations in 2019.

Managing DirectorAndrew Heller

25 April 2019

STRATEGIC REPORT



Sustainable development

The group is fully committed to ensuring the sustainability of both our and South African mining operations and delivering long term value to all our stakeholders.UK

Social, community and human rights issues

The group believes that it is in the shareholders’ interests to consider social and human rights issues when conducting business activities both in the and . Various policies and initiatives implemented by the group that fall within these areas are discussed within this report.UKSouth Africa

Health, Safety & Environment (HSE)

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.

HSE performance in 2018:

•     No cases of Occupational Diseases were recorded.

•     Zero claims for the Compensation for Occupational Diseases were submitted.

•     No machines operating at Black Wattle exceeded the regulatory noise level.

•     Black Wattle Colliery recorded one Lost time Injury during 2018.

In addition to the required personnel appointments and assignment of direct health and safety responsibilities on the mine, a system of Hazard Identification and Risk Assessments has been designed, implemented and maintained at Black Wattle.

Health and Safety training is conducted on an on going basis. We are pleased to report all relevant employees to date have received training in hazard identification 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 hazards are monitored on an on going basis.Occupational Health

Various systems to enhance the current HSE strategy have been introduced as follows:

•     In order to improve hazard identification before the commencing of tasks, mini risk assessment booklets have been distributed to all mine employees and long term contractors on the mine.

•     Dover testing is conducted for all operators. Dover testing is a risk detection and accident reduction tool which identifies employees’ problematic areas in their fundamental skills in order to receive appropriate training.

•     On going basic rigging training is being conducted for all washing plant personnel.

•     A Job Safety Analysis form is utilised to ensure effective identification of hazards in the workplace.

•     In order to capture and record investigation findings from incidents, an incident recording sheet is utilised by line management and contractors.

•     Black Wattle Colliery utilises (Incident Cause Analysis Method).ICAM

•     On going training on conveyor belt operation is being conducted with all employees involved with this discipline.

Black Wattle Colliery Social and Labour Plan (SLP) and Community Projects

Black Wattle Colliery is committed to true transformation and empowerment 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 its stakeholders, such as:

•     Employees and their families, through , , , Empowerment and Progression Programmes.Skills DevelopmentEducation DevelopmentHuman Resource Development

•     Surrounding and labour sending communities, through Local Economic Development, , Enterprise Development and Procurement Programmes.Rural and Community Development

•     Empowering partners, through with Historically Disadvantaged South African (HDSA) new mining entrants and enterprises.Broad-Based Black Economic Empowerment (BBBEE) and Joint Ventures

•     The company engages in on going consultation with its stakeholders to develop strong company-employee relationships, strong company-community relationships and strong company-HDSA enterprise relationships.

The key focus areas in terms of the detailed SLP programmes were updated as follows:

•     Implementation of new action plans, projects, targets and budgets were established through regular workshops with all stakeholders.

•     A comprehensive desktop socio-economic assessment was undertaken on baseline data of the Steve Tshwete Local Municipality (STLM) and Nkangala District Municipality (NDM).

•     Black Wattle has drawn up a new SLP Plan for the next five years (2017 – 2021).

•     The current (LED) programmes were upgraded, and new LED projects were selected in consultation with the key stakeholders from the STLM.Black Wattle Colliery Local Economic Development

•     An appropriate forum was established on the mine and a process initiated for the consultation, empowerment and participation of the employee representatives in the Black Wattle Colliery SLP process.

•     Included within the new SLP Plan is a new LED project which includes the upgrading of in the Rockdale Township. The primary focus is to build additional facilities, including classrooms to cater for the growing population in the area.Phumelele Secondary School

•     Various upgrades were initiated at the nearby to Black Wattle including the erection of new toilet facilities for the boys and girls, which formed part of the mines portable skills development programme for our employees.Evergreen School

Black Wattle has implemented various community initiatives including:

•     A community training environmental project, where local community members are trained to safely cut and remove non- indigenous vegetation.

•     Certain community members have been identified for training in areas regarding mining and beneficiation.  These areas include but are not limited to conveyor maintenance and operation of mining machinery.

•     Two new local community students were enrolled at university for the 2019 academic year.

Environment & Environment Management Programme

South Africa

Under the terms of the mine’s Environmental Management Programme approved by the (“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. In addition to this Black Wattle also performs quarterly monitoring of all boreholes around the mine to ensure that no contaminated water filters through to the surrounding communities.Department of Mineral Resource

Black Wattle is fully compliant with the regulatory requirements of the and and has an approved water use licence.Department of Water AffairsForestry

Black Wattle Colliery has substantially improved its water management by erecting and upgrading all its pollution control dams in consultation with the and .Department of Water AffairsForestry

A performance assessment audit was conducted to verify compliance to our Environmental Management Programme and no significant deviations were found.

United Kingdom

The group’s activities are principally retail property investment as well as residential property development whereby we provide or develop premises which are rented to retail businesses or sold on to end users. We seek to provide tenants and users in both these areas with good quality premises from which they can operate or reside in an environmentally sound manner.UK

Procurement

Black Wattle is a level 7 contributor to B-BBEE and has achieved a 50% BEE procurement recognition level. In compliance with the Mining Charter and the Mineral and Petroleum Resource Development Act, Black Wattle has implemented a BBBEE-focussed procurement policy which strongly encourages our suppliers to establish and maintain BBBEE credentials. At present, BBBEE companies provide approximately 92 percent of Black Wattle’s equipment and services.

Mining Charter

In , the new government regulated Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2018 (New ) came into force from . The New is a regulatory instrument that facilitates sustainable transformation, growth and development of the mining industry. The group’s mining operation is expected to reach various levels of compliance to the New over a period of five years from . The group is committed to providing adequate resources to this area in order to ensure full compliance to the New is achieved over the transitional period. As part of Black Wattle’s commitment to the New , the company seeks to:South AfricaMining CharterMining CharterMining CharterMining CharterMining CharterMarch 2019March 2019

•     Expand opportunities for historically disadvantaged South Africans (HDSAs), including women and youth, to enter the mining and minerals industry and benefit from the extraction and processing of the country’s resources;

•     Utilise the existing skills base for the empowerment of HDSAs; and

•     Expand the skills base of HDSAs in order to serve the community.

Employment

Black Wattle is committed to achieving the goals of the South African Employment Equity Act and is pleased to report the following:

•     Black Wattle Colliery has exceeded the 10 percent women in management and core mining target.

•     Black Wattle Colliery has achieved 12 percent women in core mining.

•     94 percent of the women at Black Wattle Colliery are HDSA females.

Black Wattle Colliery has successfully submitted their annual Employment Equity Report to the .Department of Labour

In terms of staff training some highlights for 2018 were:      

•     13 employees were trained in ABET (Adult Basic Educational Training) on various levels;

•     An additional 5 disabled women continued their training on ABET levels one to four.

•     3 HDSA Females and 3 HDSA Males are progressing in their respective apprenticeships at the mine.

•     Black Wattle had several of the staff of Silver Solutions CC, a black owned private contractor on the mine, trained to become competent to perform plastic pipe welding. The mine makes extensive use of their services in this area.

Employment terms and conditions for our employees based at our office and at 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. The group’s mining operations and coal washing plant facility are labour intensive and unionised. During the year no labour disputes, strikes or wage negotiations disrupted production or had a significant impact on earnings. The group’s relations to date with labour representatives and labour related unions continue to remain strong.UK

In terms of directors, employees and gender representation, at the year end the group had 7 directors (7 male, 0 female), 7 senior managers (6 male, 1 female) and 246 employees (175 male, 71 female).

Anti-slavery and human trafficking

The group is committed to the prevention of the use of forced labour and has a zero tolerance policy for human trafficking and slavery. The group’s policies and initiatives in this area can be found within the group’s Anit-slavery and human trafficking statement found on the group’s website at . www.bisichi.co.uk

reportingGreen House Gas

We have reported on all of the emission sources required under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations.

The group has used the main requirements of the ISO standard 14064-1 to calculate the Scope 1 (Direct Emissions) and Scope 2 (Indirect Emissions) from coal extraction and onsite mining processes for Black Wattle Colliery. We have not measured and reported on our Scope 3 emissions sources. Excluded from the footprint boundary are emission sources considered non material by the group, including refrigerant use onsite.

The following sources of the carbon emissions factors was used: 

      • Government GHG Conversion Factors for Company Reporting, 2018.UK

      • IEA data from IEA CO2 emissions from fuel combustion 2017.

      • Methodology adapted from the on Climate Change (2006)Intergovernmental Panel

Note: The group has recalculated emissions from coal mining activities using a more up to date methane conversion factor; because of this, 2017 emissions from coal mining activities have been restated.



Principal risks & uncertainties



Financial & performance review

The movement in the Group’s Adjusted EBITDA from £5.8million in 2017 to £9.1million in 2018 can mainly be attributed to the increased overall yield and higher prices achieved for our coal at Black Wattle offsetting the impact of higher mining and washing costs. As we continue into 2019, the group’s financial position remains strong and we expect to achieve significant value from our existing mining operations as noted in the Mining Review.

EBITDA, adjusted EBITDA and mining production are used as key performance indicators for the group and its mining activities as the group has a strategic focus on the long term development of its existing mining reserves and the acquisition of additional mining reserves in order to realise shareholder value. Mining production can be defined as the coal quantity in metric tonnes extracted from our reserves during the period and held by the mine before any processing through the washing plant. Whilst profit/(loss) before tax is considered as one of the key performance indicators of the group, the profitability of the group and the group’s mining activities can be impacted by the volatile and capital intensive nature of the mining sector. Accordingly, EBITDA and adjusted EBITDA are primarily used as key performance indicators as they are indicative of the value associated with the group’s mining assets expected to be realised over the long term life of the group’s mining reserves. In addition, for the group’s property investment operations, the net property valuation and net property revenue are utilised as key performance indicators as the group’s substantial property portfolio reduces the risk profile for shareholders by providing stable cash generative assets and access to capital appreciation.UK

   

Revenue recognition restatement – presentation of revenue & costs

During the review of revenue recognition in a revenue recognition error was identified in respect of the treatment of transport and loading costs to deliver export coal under certain export agreements. The costs in prior periods, have been recorded as a deduction against revenue rather than being shown as an operating cost.South Africa

Although this impact has been correctly accounted for in the current year, the equivalent restatement in the prior year is to increase both revenue and operating costs by £2,891,000. There is no profit or net assets impact as a result of the prior year restatement. In prior year figures within the report where there has been an impact from the restatement, the column is reflected with the word “Restated”.

   

Adjusted EBITDA is used as a key indicator of the trading performance of the group and its operating segments representing operating profit before the impact of depreciation, fair value adjustments, gains/(losses) on disposal of other investments and foreign exchange movements. The group’s operating segments include its South African mining operations and property. The performance of these two operating segments are discussed in more detail below.UK

The group achieved EBITDA for the year of £8.6 million (2017: £3.7 million). The movement compared to the prior year can mainly be attributed to increased operating profits before depreciation from our mining activities of £8.2million (2017: £4.9million) as well as the group’s share of losses in joint venture mining assets of £1.8million incurred in 2017 which is discussed in further detail below.

Depreciation for the year, related to our mining operations increased to £2.1million (2017: £1.8million) with the group reporting an overall profit before tax of £6.0million (2017: £1.5million).


South African mining operations

   

   

Net Revenue per tonne of mining production can be defined as the revenue price achieved per metric tonne of mining production less transportation and loading costs.

A breakdown of the quantity of coal sold and revenue of the group’s South African mining operations are presented in metric tonnes and South African Rand as follows:

   

The quantity of coal sold can be defined as the quantity of coal sold in metric tonnes from the mine in any given period. Net Revenue per tonne of coal sold can be defined as the revenue price achieved per metric tonne of coal sold less transportation and loading costs.

Total net revenue for the group’s mining operations increased for the year from R438 per tonne of coal sold in 2017 to R545 in 2018, attributable to the average price increases achieved in both the domestic and export market. As a result of the overall higher mining production, the quantity of coal sold for the year increased to 1.466million tonnes (2017: 1.422million tonnes). This increase in tonnes produced can be attributed to the impact of water and stone contamination issues on production in 2017 which offset the temporary blasting and water issues at our opencast area in the second half of 2018. Overall, the revenue for the group’s South African mining operations increased in the year to R798.3 million (2017: R622.7 million).

The overall increase in mining and washing cost per tonne from R340 per tonne to R416 per tonne can mainly be attributed to higher inherent mining costs from mining operations at our opencast reserves at Black Wattle. As a result of the higher mining cost per tonne and the increase in total mining production, total mining and washing costs for the group increased from R440.2million in 2017 to R549.1million in 2018.

Other operating costs (excluding depreciation) of £6.0million (2017: £5.7million) include general administrative costs as well as administrative salaries and wages related to our South African mining operations that are incurred both in and in the . These costs are not significantly impacted by movements in mining production and the increase during the year can mainly be attributed to salaries and wages related to our South African mining operations that are incurred in the offset by exchange movements on the translation of South African Rand costs into Sterling. Overall costs in were in line with management’s expectations and local inflation.South AfricaUKUKSouth Africa

Overall, the group’s South African mining operations achieved an adjusted EBITDA of £8.2million (2017: £4.9million) attributable to the increase in mining production for the year and higher prices achievable for our coal offsetting the higher mining cost per tonne of our opencast reserves at Black Wattle.

The movement in the group’s EBITDA for mining activities of £8.1million (2017: £2.8million) for the year, in comparison to the result achieved for adjusted EBITDA was as a result of a small exchange rate loss of £0.1million. In 2017, this movement was impacted by the share of loss in joint ventures of £1.8million related to the write off of our investment in as well as an exchange loss of £0.3million. These exchange movements can mainly be attributable to the retranslation of Rand denominated inter-company trade receivable balances with our South African mining operations that are held within the .Ezimbokodweni Mining (Pty) LtdUK

A further explanation of the mines operational performance can be found in the Mining Review on page 6.

Other mining Investments

There were no movements in other mining investments outside of in 2018. During the prior year the group wrote off its £1.8million investment in (“Ezimbokodweni”) made up of a £1.4million loan and a £0.4million joint venture investment.Black Wattle Colliery (Pty) LimitedEzimbokodweni Mining (Pty) Limited

As reported in the Mining review, in , transferred its washing plant operations into a wholly owned subsidiary called which will operate as a stand-alone commercial entity. As the transaction is internal there was no material impact on the financial reporting of the group. Further details on the impact of the transaction on the group’s finance facilities can be found in the section on loans below.January 2019Black Wattle Colliery (Pty) LimitedSisonke Coal Processing (Pty) Limited

property investmentUK

Performance

The group’s portfolio is managed actively by London & Associated properties plc and continues to perform well. Net property revenue (excluding joint ventures and service charge income) across the portfolio decreased marginally during the year to £1.095million (2017: £1.125million). The property portfolio was externally valued at and the value of investment properties attributable to the group at year end decreased to £13.045 million (2017: £13.250million) mainly due to valuation yields applied in a more challenging retail market compared to the prior year.31 December 2018UK

Joint venture property investments

The group holds a £0.8million (2017: £0.9million) joint venture investment in , a property investment company. The open market value of the company’s share of investment properties included within its joint venture investment in marginally decreased during the year to £1.24million (2017: £1.32million).Dragon Retail Properties LimitedDragon Retail PropertiesUK

During the year the group acquired and held a £0.5million (2017: £nil) 50% joint venture investment in , a unlisted property development company. West Ealing Projects Limited’s only asset is a property development in West Ealing, . The carrying value of the group’s share of the trading property inventory included within this development is valued at £3.1million (2017: £nill).West Ealing Projects LimitedUKLondon

Overall, the group achieved net property revenue of £1.2million (2017: £1.2million) for the year which includes the company’s share of net property revenue from its investment in joint ventures of £95,000 (2017: £83,000).


Cashflow & financial position

Cash flow generated from operating activities decreased compared to the prior year to £4.8million (2017: £7.3million). The improved operating profit during the year of £6.5million (2017: £3.8million) was offset by an increase in income tax paid of £2.28million (2017: £0.01million) both as a result of the high profitability of our South African mining operations. In addition, cashflow generation from operating activities was also impacted by a cashflow decrease from trade receivables of £0.9million (2017: increase of £0.9million), as a result of an increase in the trade receivables balances of our South African domestic coal customers, and a cashflow decrease from inventories of £0.8million (2017: increase of £0.9million), mainly as a result of reduced export coal sales from our South African mining operations in the last quarter of 2018 due to temporary weather related issues at .Richards Bay Coal Terminal

Investing cashflows primarily reflect the net effect of capital expenditure during the year of £2.9million (2017: £1.8million) which can mainly be attributable to mine development costs at Black Wattle of £1.2million (£0.4million), the acquisition of new rehabilitation mining machinery of £0.7million (2017: £nil) and infrastructure improvements to the washing plant facility, dams and rail siding at Black Wattle of £0.8million (2017: £1.2million). As at year end the group’s mining reserves, plant and equipment had a carrying value of £8.5million (2017: £8.6million) with capital expenditure being offset by depreciation of £2.1million (2017: £1.8milion) and exchange translation movements of £0.8million (2017: £0.1million) for the year. Other investing cashflows also include the new joint venture investment in West Ealing Projects limited of £0.5million (2017: £nil).

Cash inflows from financing activities includes an increase in borrowings drawn attributable to our South African banking facilities of £0.75million (2017: £0.02million) related to mining asset finance offset by dividends paid to shareholders of £0.53million (2017: 0.43 million).

Overall, the group managed to achieve an increase in cash and cash equivalents of £1.6million (2017: £4.9million) for the year. After taking into account an exchange gain of £0.03million (2017: loss of £0.05million) on the translation of the group’s year end net balance of cash and cash equivalents that were held in South African Rands, the group’s net balance of cash and cash equivalents (including bank overdrafts) at year end was £5.7 million (2017: £4.1million).

The group has considerable financial resources available at short notice including cash and cash equivalents (excluding bank overdrafts) of £9.2million (2017: £5.3million) and investments available for sale of £0.9million (2017: £1.1million). The above financial resources totalling £10.1million (2017: £6.4million).

The net assets of the group reported as at year end were £20.1million (2017: £17.7million). Total assets increased to £41.6million (2017: £36.6million) mainly due to the movement in the groups’ cash and cash equivalents, inventories and trade receivables held at year end, along with the groups’ joint venture investment in West Ealing Projects limited as outlined above.

Liabilities increased from £18.9million to £21.5million during the year primarily due to an increase in South African current borrowings from £0.03million in 2017 to £3.74million in 2018. This increase can mainly be attributed to an increase in borrowings drawn from the groups’ South African structured trade facility utilised by the groups’ mining operations. The overall exchange loss recorded through the translation reserve on translation of the group’s South African net assets at year end increased to £0.4million (2017: gain of £0.1million) as a result of the weakening of the South African Rand against sterling year to year.UK

Further details on the group’s cashflow and financial position are stated in the Consolidated Cashflow Statement on page 61 and the Consolidated Balance Sheet on page 58.

Loans

South Africa

The group has a South African structured trade finance facility with Absa Bank Limited for R100million (South African Rand) which covers the fluctuating working capital requirements of the group’s South African operations. As part of the process and sale of the washing plant facilities from to its wholly owned subsidiary (“Sisonke Coal Processing”), the R100million bank overdraft facility held by with Absa Bank Limited at year end was replaced in by a new structured trade finance facility for R100million held by Sisonke Coal Processing (“new trade facility”). The new trade facility is renewable annually at 25 January and is secured against inventory, debtors and cash that are held in the group’s South African operations.Black Wattle Colliery (Pty) LimitedSisonke Coal Processing (Pty) LimitedBlack Wattle Colliery (Pty) LimitedJanuary 2019

United Kingdom

In , the group signed a £6 million term loan facility with Santander. The Loan is secured against the group’s retail property portfolio. The facility has a five year term, and is repayable at the end of the term in . The amount repayable on the loan at year end was £5.9million (2017: £5.9million). The interest cost of the loan is 2.35% above LIBOR. The group’s intention is to enter into a new facility agreement prior to the termination of the existing facility agreement. Nonetheless the group has adequate financial resources at short notice, including cash and listed equity investments, to repay the existing facility should a new facility not be finalised prior to . During the year the group reduced its loan by £14,000 in order to rectify a breach of one of its loan banking covenants. No other banking covenants were breached by the group during the year.December 2014December 2019December 2019UKUKUK

Future prospects

As we continue into 2019, the group’s financial position remains strong and we expect to achieve significant additional value from our existing mining operations. The group continues to seek to expand its operations in through the acquisition of additional coal reserves. In the , management is looking forward to progressing its development in West Ealing and is currently investigating other major investment opportunities in the domestic property sector. This is in line with the groups’ overall strategy of balancing the high risk of our mining operations with a dependable cash flow and capital appreciation from our property investment operations.South AfricaUKUK

Further information on the outlook of the company can be found in both the Chairman’s Statement on page 2 and the Mining Review on page 6 which form part of the Strategic Report.

Signed on behalf of the Board of Directors

Finance DirectorGarrett Casey

25 April 2019

Governance

Governance

Management team

1          Sir             Chairman            Michael Heller

Bisichi Mining PLC

2                      Managing Director            Andrew Heller

Bisichi Mining PLC

            Managing Director             Black Wattle Colliery

3                      Senior Independent Director             Chairman Audit and Remuneration CommitteesChristopher Joll

4                      Finance Director                         Director             Black Wattle CollieryGarrett Casey



Bisichi Mining PLC

5                      Director of Mining                         Director                       Black Wattle CollieryRobert Grobler



Bisichi Mining PLC

6                      Director             Black Wattle CollieryEthan Dube

7          Millicent Zvarayi             Director             Black Wattle Colliery

8                      Mine Manager             Black Wattle CollieryNico Serfontein



Bisichi Mining PLC

*     Sir       MA, (Chairman)Michael Heller
FCA

      Andrew R Heller       MA, ACA       (Managing Director)

            CA (SA)       (Finance Director)Garrett Casey

            Pr Cert Eng       (Director of mining)Robert Grobler

O+ Christopher A Joll MA (Non-executive) was appointed a Director on . He has held a number of non-executive directorships of quoted and -quoted companies and currently runs his own event management business. He is also a published author, lecturer and a writer and director of documentary films.

Christopher Joll1 February 2001un

O * John A Sibbald BL (Non-executive) has been a Director since 1988. After qualifying as a Chartered Accountant he spent over 20 years in stockbroking, specialising in mining and international investment.

John Sibbald

*     Member of the nomination committee

+    Senior independent director

O   Member of the audit, nomination and remuneration committees.

Directors and advisors

Secretary and registered office

Garrett Casey CA (SA) W1J 6NE    

24 Bruton PlaceLondon

Black Wattle Colliery Directors

(Managing Director) Millicent Zvarayi     Andrew HellerEthan DubeRobert GroblerGarrett Casey




Property portfolio asset manager

James Charlton BSc MRICS

Company Registration

Company registration No. 112155 (Incorporated in and )EnglandWales

Website

www.bisichi.co.uk

E-mail

admin@bisichi.co.uk

Auditor

,BDO LLPLondon

Principal bankers

Santander UK PLC National Westminster Bank PLC Investec PLC          United Kingdom


ABSA Bank (SA) (SA) (SA)               South Africa


First National BankStandard Bank

Corporate solicitors

, , ,United KingdomLondonLondonLondon


Fladgate LLPMemery CrystalOlswang LLP

Brandmullers Attorneys, Middelburg , Hogan Lovells, Eversheds Sutherland, Tugendhaft Wapnick Banchetti and Partners,South AfricaJohannesburgJohannesburgJohannesburgJohannesburg




Herbert Smith Freehills

Stockbrokers

Shore Capital Stockbrokers Limited

Registrars and transfer office

Shareholder Services The Registry Beckenham Kent BR3 4TU telephone: 0871 664 0300 International telephone: +44 371 664 0300 (Calls cost 12p per minute plus your phone company’s access charge. Calls outside the will be charged at the applicable international rate). Lines are open between , Monday to Friday, excluding public holidays in and .Link Asset Services









34 Beckenham RoadUKUnited KingdomEnglandWales9.00am to 5.30pm

Website:www.linkassetservices.com

Email:enquiries@linkgroup.co.uk



Five year summary


Financial calendar

Governance

Directors’ report

The directors submit their report together with the audited financial statements for the year ended .31 December 2018

Review of business, future developments and post balance sheet events

The group continues its mining activities. Income for the year was derived from sales of coal from its South African operations. The group also has a property investment portfolio for which it receives rental income and a joint venture investment in a residential property development.UK

The results for the year and state of affairs of the group and the company at are shown on pages 55 to 99 and in the Strategic Report on pages 2 to 25. Future developments and prospects are also covered in the Strategic Report and further details of any post balance sheet events can be found in note 32 to the financial statements. 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 Strategic Report.31 December 2018

The management report referred to in the Director’s responsibilities statement encompasses this Directors’ Report and Strategic Report on pages 2 to 25.

Corporate responsibility

Environment

The environmental considerations of the group’s South African coal mining operations are covered in the Strategic Report on pages 2 to 25.

The group’s activities are principally property investment whereby premises are provided for rent to retail businesses and a joint venture investment in a residential property development.UKUK

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.

Greenhouse Gas Emissions

Details of the group’s greenhouse gas emissions for the year ended can be found on page 12 of the Strategic Report.31 December 2018

Employment

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 Strategic Report 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

Dividend policy        

An interim dividend for 2018 of 1p was paid on (Interim 2017: 1p). The directors recommend the payment of a final dividend for 2018 of 3p per ordinary share (2017: 3p) as well as a special dividend of 2p (2017: 1p) making a total dividend for 2018 of 6p (2017: 5p).8 February 2019

Subject to shareholder approval, the total dividend per ordinary share for 2018 will be 6p per ordinary share.

The final dividend and the special dividend will be payable on Friday to shareholders registered at the close of business on .26 July 20195 July 2019

Investment properties and other properties

The investment property portfolio is stated at its open market value of £13,045,000 at (2017: £13,245,000) as valued by professional external valuers. The open market value of the company’s share of investment properties and development property inventory held at cost included within its investments in joint ventures is £4,334,000 (2017: £1,315,000).31 December 2018

Financial instruments

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. operations are reported at each Board meeting and are subject to weekly internal reporting.Treasury

Directors

The directors of the company for the whole year were Sir , A R Heller, G J Casey, , R J Grobler (a South African citizen), and J A Sibbald.Michael HellerC A Joll

The directors retiring by rotation are Sir M A Heller, Mr and Mr J A Sibbald who offers themselves for re-election.C A Joll

Sir has been an executive Director since 1972 and Chairman since 1981. He is a Chartered Accountant and has a contract of employment determinable at six months’ notice.Michael Heller

was appointed a Director on . He has held a number of non-executive directorships of quoted and -quoted companies and currently runs his own event management business. He is also a published author, lecturer and a writer and director of documentary films.Christopher Joll1 February 2001un

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 where he specialised in mining and international investment. He has a contract of service determinable at three months’ notice.John SibbaldCity of London

No director had any material interest in any contract or arrangement with the company during the year other than as shown in this report.

Directors’ shareholdings

The interests of the directors in the shares of the company, including family and trustee holdings where appropriate, are shown on page 40 of the Annual Remuneration Report.

Substantial interests                       

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 :15 April 2019

London & Associated Properties PLC – 4,432,618 shares representing 41.52 per cent. of the issued capital. (Sir is a director and shareholder of London & Associated Properties PLC).Michael Heller

Disclosure of information to auditor         

The directors in office at the date of approval of the financial statements have confirmed that as far as 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.

Indemnities and insurance

The Articles of Association and of the company provide for them to indemnify, to the extent permitted by law, directors and officers (excluding the Auditor) of the companies, including officers of subsidiaries, and associated companies against liabilities arising from the conduct of the group’s business. The indemnities are qualifying third-party indemnity provisions for the purposes of the Companies Act 2006 and each of these qualifying third-party indemnities was in force during the course of the financial year ended and as at the date of this Directors’ report. No amount has been paid under any of these indemnities during the year.ConstitutionUK31 December 2018

The group has purchased directors’ and officers’ insurance during the year. In broad terms, the insurance cover indemnifies individual directors and officers against certain personal legal liability and legal defence costs for claims arising out of actions taken in connection with group business.

Corporate Governance

The Board acknowledges the importance of good corporate governance. The paragraphs below set out how the company has applied this guidance during the year.

Principles of corporate governance

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 principles 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.

Board structure

During the year the Board comprised the executive chairman, the managing director, two other executive directors and two non-executive directors. Their details appear on page 29. The Board is responsible to shareholders for the proper management of the group. The Directors’ responsibilities statement in respect of the accounts is set out on page 48. 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 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.Christopher Joll

•     The remuneration committee is responsible for making recommendations to the Board on the company’s framework of executive remuneration and its cost. The committee determines the contractual terms, remuneration and other benefits for each of the executive directors, including performance related bonus schemes, pension rights and compensation payments. The Board itself determines the remuneration of the non-executive directors. The committee comprises the non-executive directors. It is chaired by . The company’s executive chairman is normally invited to attend meetings. The report on directors’ remuneration is set out on pages 37 to 44.Christopher Joll

•     The audit committee comprises the two non-executive directors and is chaired by . Its prime tasks are to review the scope of external audit, to receive regular reports from the company’s auditor 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. The committee is responsible for monitoring the controls which are in force to ensure the integrity of the information reported to the shareholders. The committee acts as a forum for discussion of internal control issues and contributes to the Board’s review of the effectiveness of the group’s internal control and risk management systems and processes. The committee also considers annually the need for an internal audit function. It advises the Board on the appointment of external auditors and on their remuneration for both audit and non-audit work, and discusses the nature and scope of the audit with the external auditors. The committee, which meets formally at least twice a year, provides a forum for reporting by the group’s external auditors.Christopher Joll

Meetings are also attended, by invitation, by the company chairman, managing director and finance director.

The audit committee also undertakes a formal assessment of the auditors’ independence each year which includes:

•     a review of non-audit services provided to the group and related fees;

•     discussion with the auditors of a written report detailing consideration of any matters that could affect independence or the perception of independence;

•     a review of the auditors’ own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner; and

•     obtaining written confirmation from the auditors that, in their professional judgement, they are independent.

The audit committee report is set out on page 45.

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 5 to the financial statements.

Performance evaluation – board, board committees and directors

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.

Independent directors

The senior independent non-executive director is . The other independent non-executive director is John Sibbald.Christopher Joll

has been a non-executive director for over eighteen years and has been a non-executive director for over thirty years. The Board encourages and to act independently. The board considers that their length of service does not, and has not, resulted in their inability or failure to act independently. In the opinion of the Board, and John Sibbald continue to fulfil their role as independent non-executive directors.Christopher JollJohn SibbaldChristopher JollJohn SibbaldChristopher Joll

The independent directors regularly meet prior to Board meetings to discuss corporate governance issues.

Board and board committee meetings

The number of meetings during 2018 and attendance at regular Board meetings and Board committees was as follows:


Internal control

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:

•     the Board meets regularly with a formal schedule of matters reserved to it for decision and has put in place an organisational structure with clearly defined lines of responsibility and with appropriate delegation of authority;

•     there are established procedures for planning, approval and monitoring of capital expenditure and information systems for monitoring the group’s financial performance against approved budgets and forecasts;

•     property and financial operations are closely monitored by members of the Board and senior managers to enable them to assess risk and address the adequacy of measures in place for its monitoring and control. The South African operations are closely supervised by the based executives through daily, weekly and monthly reports from the directors and senior officers in . This is supplemented by monthly visits by the based finance director to the South African operations which include checking the integrity of information supplied to the . The directors are guided by the internal control guidance for directors issued by the .UKUKSouth AfricaUKUKInstitute of Chartered Accountants in England and Wales

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 were no significant issues identified during the year ended (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.31 December 2018

Communication with shareholders

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, . 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.www.bisichi.co.uk

Takeover directive

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 (the “Relationship Agreement”) was entered into between the company and London & Associated Properties PLC (“LAP”) in regard to the arrangements between them whilst LAP is a 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.15 September 2005

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 at least every three years. 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

The Bribery Act 2010 came into force on , and the Board took the opportunity to implement 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.1 July 2011

Annual General Meeting

The annual general meeting of the company (“Annual General Meeting”) will be held at , W1J 6NE on Tuesday, at Resolutions 1 to 10 will be proposed as ordinary resolutions. More than 50 per cent. of shareholders’ votes cast must be in favour for those resolutions to be passed.24 Bruton PlaceLondon11 June 201911.00 a.m.

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.

Please note that the following paragraph is a summary of resolution 10 to be proposed at the Annual General Meeting and not the full text of the resolution. You should therefore read this section in conjunction with the full text of the resolutions contained in the notice of Annual General Meeting.

Directors’ authority to allot shares (Resolution 10)

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 £355,894. This represents approximately 1/3 (one third) of the ordinary share capital of the company in issue (excluding treasury shares) at (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 £355,894, in connection with a pre-emptive rights issue. This amount represents approximately 1/3 (one third) of the ordinary share capital of the company in issue (excluding treasury shares) at (being the last practicable date prior to the publication of this Directors’ Report).24 April 201924 April 2019

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 £711,788.

Resolution 10 complies with guidance issued by the (IA).Investment Association

The authority granted by resolution 10 will expire on 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 IA.31 August 2020

Donations

No political donations were made during the year (2017: £nil).

Going concern

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, the Mining Review on pages 6 to 7 and its financial position is set out on page 23 of the Strategic Report. In addition Note 22 to the financial statements includes the group’s treasury policy, interest rate risk, liquidity risk, foreign exchange risks and credit risk.

The group has prepared cash flow forecasts which demonstrate that the group has sufficient resources to meet its liabilities as they fall due for at least the next 12 months.

In , a structured trade finance facility with Absa Bank Limited for R100million is held by , a 100% subsidiary of . This facility comprises of a R100million revolving facility to cover the working capital requirements of the group’s South African operations. The facility is renewable annually at 25 January and is secured against inventory, debtors and cash that are held in the group’s South African operations. The Directors do not foresee any reason why the facility will not continue to be renewed at the next renewal date, in line with prior periods and based on their banking relationships.South AfricaSisonke Coal Processing (Pty) LimitedBlack Wattle Colliery (Pty) Limited

The directors expect that that the coal market conditions experienced by Black Wattle Colliery, its direct mining asset, in 2018 and the first quarter of 2019 will be similar going into the remainder of 2019. The directors therefore have a reasonable expectation that the mine will achieve positive levels of cash generation for the group in 2019. As a consequence, the directors believe that the group is well placed to manage its South African business risks successfully.

In the , a £6 million term loan facility repayable in is held with . The loan is secured against the company’s retail property portfolio. The amount repayable on the loan at year end was £5.9million (2017: £5.9million). The debt package has a five year term and is repayable at the end of the term. The interest cost of the loan is 2.35% above LIBOR. The group’s intention is to enter into a new facility agreement prior to the termination of the existing facility agreement. Nonetheless the group has adequate financial resources at short notice, including cash and listed equity investments, to repay the existing facility should a new facility not be finalised prior to . In addition its investment property assets benefit from long term leases with the majority of its tenants.UKUKDecember 2019December 2019Santander Bank PLC

As a result of the banking facilities held as well as the acceptable levels of profitability and cash generation the group’s South African operations is expected to achieve for the next 12 months, the Directors believe that the group has adequate resources to continue in operational existence for the foreseeable future and that the group is well placed to manage its business risks. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

By order of the board

G.J Casey Secretary

24 Bruton Place       W1J 6NE    
London

25 April 2019

Governance


Statement of the Chairman of the remuneration committee

The remuneration committee presents its report for the year ended 31 December 2018.

The Annual Remuneration Report details remuneration awarded to directors and non-executive directors during the year. The shareholders will be asked to approve the Annual Remuneration Report as an ordinary resolution (as in previous years) at the AGM in June 2019.

A copy of the remuneration policy, which details the remuneration policy for directors, can be found at . The current remuneration policy was subject to a binding vote which was approved by shareholders at the AGM in . The approved policy took effect from and will apply for a three year period.www.bisichi.co.ukJune 20177 June 2017

The remuneration committee reviewed the existing policy and deemed no changes necessary to the current arrangements.

Both of the above reports have been prepared in accordance with The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013.

The company’s auditors, are required by law to audit certain disclosures and where disclosures have been audited they are indicated as such.BDO LLP

Chairman – remuneration committeeChristopher Joll

W1J 6NE24 Bruton PlaceLondon

25 April 2019

Governance


Annual remuneration report

The following information has been audited:

Single total figure of remuneration for the year ended :31 December 2018

*Members of the remuneration committee for the year ended31 December 2018

Single total figure of remuneration for the year ended :
31 December 2017

*Members of the remuneration committee for the year ended31 December 2017


Pension schemes and incentives 

Three (2017: Three) directors have benefits under money purchase pension schemes. Contributions in 2018 were £39,000 (2017: £61,000), see table above.

Scheme interests awarded during the year

During the year the company granted options over ordinary shares in the Company of (the “Options”) to the following directors of the Company, under the Company’s Unapproved Executive Share Option Scheme 2012 (“the Scheme”), as set out below:10 pence

•     : 150,000 options granted on at an exercise price of £0.7350 per shareAndrew Heller6 February 2018

•     : 230,000 options granted on at an exercise price of £0.7350 per shareGarrett Casey6 February 2018

The above Options are subject to the terms and conditions set out in the rules of the Scheme, and subject to the memorandum and articles of association of the Company. These Options are exercisable at any time during the next 10 years from the dates of grant stated above. No consideration has been paid for the granting of these Options.

Share option schemes

The company currently has only Unapproved Share Option Scheme which is not subject to (HMRC) approval. The 2012 scheme was approved by the remuneration committee of the company on . The “2010 Scheme” which was approved by shareholders on , was cancelled on the when the company entered into an agreement with to surrender the 80,000 Options which were granted on under the Scheme. The aggregate consideration paid by the Company to effect the cancellation was £1.HM revenue and Customs28 September 20127 June 20115 February 201831 August 2010Garrett Casey

*Middle market price at date of grant

No consideration is payable for the grant of options under the 2012 Unapproved Share Option Scheme. There are no performance or service conditions attached to the 2012 Unapproved Share Option scheme.

Payments to past directors

No payments were made to past directors in the year ended (2017: £nil).31 December 2018

Payments for loss of office

No payments for loss of office were made in the year ended (2017: £nil).31 December 2018

Statement of Directors’ shareholding and share interest

Directors’ interests

The interests of the directors in the shares of the company, including family and trustee holdings where appropriate, were as follows:


The following section is unaudited.

The following graph illustrates the company’s performance compared with a broad equity market index over a ten year period. Performance is measured by total shareholder return. The directors have chosen the FTSE All Share Mining index as a suitable index for this comparison as it gives an indication of performance against a spread of quoted companies in the same sector.

The middle market price of ordinary shares at was 92.5p (2017: 70.5p). During the year the share price ranged between 70.5p and 117.5p.Bisichi Mining PLC31 December 2018


Remuneration of the Managing Director over the last ten years

The table below demonstrates the remuneration of the holder of the office of Managing Director for the last ten years for the period from to .1 January 200931 December 2018

does not have a Chief Executive so the table includes the equivalent information for the Managing Director.Bisichi Mining PLC

*There were no formal criteria or conditions to apply in determining the amount of bonus payable or the number of shares to be issued prior to 2014.



Percentage change in remuneration of director undertaking role of Managing Director

does not have a Chief Executive so the table includes the equivalent information for the Managing Director. The comparator group chosen is all based employees as the remuneration committee believe this provides the most accurate comparison of underlying increases based on similar annual bonus performances utilised by the group.Bisichi Mining PLCUK

Relative importance of spend on pay

The total expenditure of the group on remuneration to all employees (see Notes 29 and 9 to the financial statements) is shown below:

Statement of implementation of new remuneration policy

The remuneration policy was approved at the AGM in . The policy took effect from and will apply for 3 years unless changes are deemed necessary by the Remuneration committee. The company may not make a remuneration payment or payment for loss of office to a person who is, is to be, or has been a director of the company unless that payment is consistent with the approved remuneration policy, or has otherwise been approved by a resolution of members.June 20177 June 2017

Consideration by the directors of matters relating to directors’ remuneration

The remuneration committee considered the executive directors remuneration and the board considered the non-executive directors remuneration in the year ended .31 December 2018

Shareholder voting

At the Annual General Meeting on , there was an advisory vote on the resolution to approve the remuneration report, other than the part containing the remuneration policy. In addition, on there was a binding vote on the resolution to approve the current remuneration policy the results of which are detailed below:6 June 20187 June 2017

Service contracts

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 twelve months. Directors notice periods (see page 39 of the annual remuneration report) are set in line with market practice and of a length considered sufficient to ensure an effective handover of duties should a director leave the company.

All directors’ contracts as amended from time to time, have run from the date of appointment. Service contracts are kept at the registered office.




Remuneration policy table

The remuneration policy table below is an extract of the group’s current remuneration policy on directors’ remuneration, which was approved by a binding vote at the 2017 AGM. The approved policy took effect from 7 June 2017. A copy of the full policy can be found at .www.bisichi.co.uk

In order to ensure that shareholders have sufficient clarity over director remuneration levels, the company has, where possible, specified a maximum that may be paid to a director in respect of each component of remuneration. The remuneration committee consider the performance measures outlined in the table above to be appropriate measures of performance and that the KPI’s chosen align the interests of the directors and shareholders.

For details of remuneration of other company employees can be found in Note 29 to the financial statements.




Audit committee report

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, (chairman), an experienced financial PR executive and , a retired chartered accountant.Christopher JollJohn Sibbald

The Audit Committee’s prime tasks are to:

•     review the scope of external audit, to receive regular reports from the auditor 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:

      ~        a review of non-audit services provided to the group and related fees;

      ~        discussion with the auditors of a written report detailing all relationships with the company and any other parties that could affect independence or the perception of independence;

      ~        a review of the auditors’ own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner; and

      ~        obtaining written confirmation from the auditors that, in their professional judgement, they are independent.

Meetings

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:

•     met with the external auditors, and discussed their reports to the Audit Committee;

•     approved the publication of annual and half-year financial results;

•     considered and approved the annual review of internal controls;

•     decided that due to the size and nature of operation there was not a current need for an internal audit function;

•     agreed the independence of the auditors and approved their fees for both audit related and non-audit services as set out in note 5 to the financial statements.

Financial reporting  

As part of its role, the Audit Committee assessed the audit findings that were considered most significant to the financial statements, including those areas requiring significant judgment and/or estimation. When assessing the identified financial reporting matters, the committee assessed quantitative materiality primarily by reference to profit before tax. The Board also gave consideration to the carrying value of the group’s total assets, given that the group operates a principally asset based business as well as the value of revenues generated by the group, given the importance of production, and its Adjusted EBITDA, given that it is a key trading KPI, when determining quantitative materiality. The qualitative aspects of any financial reporting matters identified during the audit process were also considered when assessing their materiality. Based on the considerations set out above we have considered quantitative errors individually or in aggregate in excess of approximately £300,000 to £350,000 to be material.

 


External Auditors    

held office throughout the year. In the 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, . (formerly GT (Jhb) Inc.) acts as the external auditor to the South African companies, and the work of that firm was reviewed by for the purpose of the group audit.BDO LLPRSM UK Audit LLPBDO South Africa Inc.BDO LLPUnited Kingdom

W1J 6NEChairman – audit committeeChristopher Joll



24 Bruton PlaceLondon25 April 2019




Valuers’ certificates

To the directors ofBisichi Mining PLC

In accordance with your instructions we have carried out a valuation of the freehold property interests held as at by the company as detailed in our Valuation Report dated .31 December 201828 January 2019

Having regard to the foregoing, we are of the opinion that the open market value as at of the interests owned by the company was £13,045,000 being made up as follows:31 December 2018




Directors’ responsibilities statement

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

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 and have elected to prepare the 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 group and company and of the profit or loss for the group for that period.European Union

In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

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

•     state with regard to the group financial statements whether they have been prepared in accordance with IFRSs as adopted by the subject to any material departures disclosed and explained in the financial statements;European Union

•     state with regard to the parent company financial statements, whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;UK

•     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; and

•     prepare a director’s report, a strategic report and director’s remuneration report which comply with the requirements of the Companies Act 2006.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the annual report and accounts, taken as a whole, are fair, balanced, and understandable and provides the information necessary for shareholders to assess the group’s performance, business model and strategy.

Website publication

The directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the company’s website in accordance with legislation in the governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the company’s website is the responsibility of the directors. The directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.United Kingdom

Directors’ responsibilities pursuant to DTR4

The directors confirm to the best of their knowledge:

•     the group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the and Article 4 of the IAS Regulation and give a true and fair view of the assets, liabilities, financial position and profit and loss of the group.European Union

•     the annual report includes a fair review of the development and performance of the business and the financial position of the group and the parent company, together with a description or the principal risks and uncertainties that they face.




Independent auditor’s report

To the members ofBisichi Mining PLC

Opinion

We have audited the financial statements of (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended which comprise the consolidated income statement, the consolidated statement of other comprehensive income, the consolidated balance sheet, the consolidated statement of changes in shareholders’ equity, the consolidated cash flow statement, the parent company balance sheet, the parent company statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies. 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 . 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, including Financial Reporting Standard FRS 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).Bisichi Mining PlcEuropean Union31 December 2018

In our opinion:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing () (ISAs ()) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the , including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.UKUKUK

Conclusions relating to going concern and viability statement

We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs () require us to report to you whether we have anything material to add or draw attention to:UK

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The following key audit matters were identified for the period under review:


Our application of materiality

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take into account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.

The Materiality level we applied was calculated based on 5% of profit before tax (2017: 1% of total assets), reflecting the result for the year and the fact that the Group is no longer in a transitionary phase of mining in respect of its South African operations.

The key materiality figures used in the audit are detailed in the table below.

Performance materiality is the application of materiality at the individual account or balance level set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial statements as a whole.

We agreed with the audit committee that we would report to the committee all individual audit differences identified during the course of our audit in excess of £15,000 (2017: £15,000). We also agreed to report differences below these thresholds that, in our view, warranted reporting on qualitative grounds.

An overview of the scope of our audit

Whilst is a company listed on the Standard Segment of the , the Group’s operations principally comprise property interests in the and an operating mine located in . We assessed there to be 6 significant components within the Group, comprising the mine in , corporate accounting function and property companies.Bisichi Mining PlcLondon Stock ExchangeUnited KingdomSouth AfricaSouth Africa

We performed a full scope audit of each of the property companies, corporate accounting function and consolidation.UK

A BDO member firm performed a full scope audit of the mine in , under our direction and supervision as Group auditors under ISA () 600.South AfricaUK

As part of our audit strategy, as Group auditors:

Other information

The Directors are responsible for the other information. The other information comprises the information included in the Bisichi Mining Plc Annual Report 2018, other than the financial statements and our auditor‘s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit the information given in the strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements and those reports have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities statement set out on page 48, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs () will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.UK

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: .  This description forms part of our auditor’s report.www.frc.org.uk/auditorsresponsibilities

Other matters which we are required to address

Following the recommendation of the audit committee, we were appointed to audit the financial statements for the year ending and subsequent financial periods. The period of total uninterrupted engagement is 31 years, covering the years ending 1987 to 2018.31 December 2018

Under the FRC’s Ethical Standard we are required to rotate off as the Company’s Auditors in 2021. During the uninterrupted engagement period the engagement partner has rotated in accordance with the applicable requirements.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent Company and we remain independent of the Group and the Parent Company in conducting our audit.

Our audit opinion is consistent with the additional report to the audit committee.

Use of our report

This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.


Ryan Ferguson

(Senior Statutory Auditor)

For and on behalf of , Statutory AuditorBDO LLP

London, United Kingdom

25 April 2019

is a limited liability partnership registered in and (with registered number OC305127).BDO LLPEnglandWales




Consolidated income statement

for the year ended31 December 2018

Trading gains and losses reflect all the trading activity on mining and property operations and realised gains. Revaluation gains and losses reflects the revaluation of investment properties and other assets within the group and any proportion of unrealised gains and losses within Joint Ventures. The total column represents the consolidated income statement presented in accordance with IAS 1. A revenue recognition error was identified in respect of the prior year. An amount of £2,891,000 had been incorrectly recorded as a deduction against revenue rather than shown as an operating cost. The above comparatives have been restated accordingly. Refer to the group’s accounting policies on page 62.

Financial statements


Consolidated statement of other comprehensive income

for the year ended31 December 2018

Financial statements


Consolidated balance sheet

at31 December 2018

These financial statements were approved and authorised for issue by the board of directors on and signed on its behalf by:25 April 2019

Director                   DirectorA R Heller              G J Casey                              Company Registration No. 112155

Financial statements


Consolidated statement of changes in shareholders’ equity

for the year ended31 December 2018




Consolidated cash flow statement

for the year ended31 December 2018

Financial statements

Group accounting policies

for the year ended31 December 2018

Basis of accounting

The results for the year ended have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. In applying the group’s accounting policies and assessing areas of judgment and estimation materiality is applied as detailed on page 46 of the Audit Committee Report. The principal accounting policies are described below:31 December 2018European Union

The group financial statements are presented in £ sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise stated.

The functional currency for each entity in the group, and for joint arrangements and associates, is the currency of the country in which the entity has been incorporated. Details of which country each entity has been incorporated can be found in Note 15 for subsidiaries and Note 14 for joint arrangements and associates.

The exchange rates used in the accounts were as follows:

Revenue recognition restatement

During the review of revenue recognition in a revenue recognition error was identified in respect of the treatment of transport and loading costs to deliver export coal under certain export agreements. The costs in prior periods, had been incorrectly recorded as a deduction against revenue rather than shown as an operating cost. In the current year such costs have been recorded in operating costs and the comparatives restated accordingly.South Africa

The impact on the current year is to increase both revenue and operating costs by £3,101,000 and the prior year requires an equivalent restatement totalling £2,891,000. There is no profit or net assets impact as a result of the prior year restatement.

Going concern

The group has prepared cash flow forecasts which demonstrate that the group has sufficient resources to meet its liabilities as they fall due for at least the next 12 months from date of signing.

In , a structured trade finance facility with Absa Bank Limited for R100million is held by , a 100% subsidiary of . The facility is renewable annually at 25 January and is secured against inventory, debtors and cash that are held in the group’s South African operations. The Directors do not foresee any reason why the facility will not continue to be renewed at the next renewal date, in line with prior periods and based on their banking relationships. This facility comprises of a R100million revolving facility to cover the working capital requirements of the group’s South African operations.South AfricaSisonke Coal Processing (Pty) LimitedBlack Wattle Colliery (Pty) Limited

The directors expect that that the coal market conditions experienced by Black Wattle Colliery, its direct mining asset, in 2018 and the first quarter of 2019 will be similar going into the remainder of 2019. The directors therefore have a reasonable expectation that the mine will achieve positive levels of cash generation for the group in 2019. As a consequence, the directors believe that the group is well placed to manage its South African business risks successfully.

In the , a £6 million term loan facility repayable in is held with . The loan is secured against the company’s retail property portfolio. The amount repayable on the loan at year end was £5.9million (2017: £5.9million). The debt package has a five year term and is repayable at the end of the term. The interest cost of the loan is 2.35% above LIBOR. . The group’s intention is to enter into a new facility agreement prior to the termination of the existing facility agreement. Nonetheless the group has adequate financial resources at short notice, including cash and listed equity investments, to repay the existing facility should a new facility not be finalised prior to . In addition its investment property assets benefit from long term leases with the majority of its tenants.UKUKDecember 2019December 2019Santander Bank PLC

As a result of the banking facilities held as well as the acceptable levels of profitability and cash generation the group’s South African operations is expected to achieve for the next 12 months, the Directors believe that the group has adequate resources to continue in operational existence for the foreseeable future and that the group is well placed to manage its business risks. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

International Financial Reporting Standards (IFRS)

The Group has adopted all of the new and revised Standards and Interpretations issued by the (“IASB”) that are relevant to its operations and effective for accounting periods beginning .International Accounting Standards Board1 January 2018

‘Revenue from Contracts with Customers’ was issued by the IASB in . It is effective for accounting periods beginning on or after . The new standard replaces the existing accounting standards, and provides enhanced detail on the principle of recognising revenue to reflect the transfer of goods and services to customers at a value which the company expects to be entitled to receive. The standard also updates revenue disclosure requirements. The standard was endorsed by the EU on . The Directors assessed the impact of IFRS 15 on the results of the Group and the only material impact related to the inclusion of property service charge income in revenue rather than being set off against service charge expenditure in operating costs. The impact on the current year was an increase in revenue and an increase in operating costs in the income statement of £137,000. Changes in accounting policies resulting from IFRS 15 have been applied using the full retrospective method, with no restatement of comparative information for prior year in accordance with the practical expedient not to restate contracts that begin and end within the same annual reporting period.IFRS 15 May 20141 January 201822 September 2017UK

 was published in and is effective for the group from . The standard was endorsed by the EU on . IFRS 9 supersedes IAS 39 “Financial Instruments: Recognition and Measurement” and is applicable to financial assets and financial liabilities, and covers the classification, measurement, impairment and de-recognition of financial assets and financial liabilities together with a new hedge accounting model. The adoption of IFRS 9 has resulted in changes in the Group's accounting policies for the recognition, classification and measurement of financial assets and financial liabilities and impairment of financial assets. IFRS 9 modifies the classification and measurement of certain classes of financial assets and liabilities and required the Group to reassess classification of financial assets into three primary categories (amortised cost, fair value through profit and loss, fair value through other comprehensive income), reflecting the business model in which assets are managed and their cash flow characteristics. Financial liabilities continue to be measured at either fair value through profit and loss or amortised cost. In addition, IFRS 9 introduced an expected credit loss (“ECL”) impairment model, which means that anticipated as opposed to incurred credit losses are recognised which may result in earlier recognition of impairments. The only material impact of IFRS 9 on the Group financial statements related to the movement in fair value of the Groups held for trading (previously available for sale) investments and non-current other investments (“the investments”). Under IAS 39 the movement in the investments was measured at fair value through other comprehensive income and taken to an available for sale reserve. Under IFRS 9 the movements are measured at fair value through profit and loss and recorded in the income statement. The Group has not restated prior periods as allowed by the transition provisions of IFRS 9. In order to reclassify the impact of historic movements on the investments, an adjustment of £143,000 has been made to the Group statement of changes in equity at transferring the historical fair value movements of the investments from the available for sale reserve to retained earnings.IFRS 9July 20141 January 201822 November 20171 January 2018

The Group has not adopted any Standards or Interpretations in advance of the required implementation dates. The following new and revised IFRS standards, which are applicable to the group, were issued but are not yet effective:

 ‘Leases’ – IFRS 16 ‘Leases’ was issued by the IASB in and is effective for accounting periods beginning on or after . The new standard will replace IAS 17 ‘Leases’ and will eliminate the classification of leases as either operating leases or finance leases and, instead, introduce a single lessee accounting model. The standard, which has been endorsed by the EU, provides a single lessee accounting model, specifying how leases are recognised, measured, presented and disclosed. The Directors are currently evaluating the financial and operational impact of this standard including the application to service contracts at the mine containing leases. The review of the impact of IFRS 16 will require an assessment of all leases and the impact of adopting this standard cannot be reliably estimated until this work is substantially complete.IFRS 16January 20171 January 2019

The Directors do not anticipate that the adoption of the other standards and interpretations not listed above will have a material impact on the accounts. Certain of these standards and interpretations will, when adopted, require addition to or amendment of disclosures in the accounts.

We are committed to improving disclosure and transparency and will continue to work with our different stakeholders to ensure they understand the detail of these accounting changes. We continue to remain committed to a robust financial policy.

Key judgements and estimates

Areas where key estimates and judgements are considered to have a significant effect on the amounts recognised in the financial statements include:

Life of mine and reserves

The directors consider their judgements and estimates surrounding the life of the mine and its reserves to have significant effect on the amounts recognised in the financial statements and to be an area where the financial statements are subject to significant estimation uncertainty. The life of mine remaining is currently estimated at 4 years. This life of mine is based on the group’s existing coal reserves including reserves acquired but subject to regulatory approval of 1.9million tonnes. The life of mine excludes future coal purchases and coal reserve acquisitions. The group’s estimates of proven and probable reserves are prepared utilising the South African  for the reporting of exploration results, mineral resources and mineral reserves (the ) and are subject to assessment by an independent Competent Person experienced in the field of coal geology and specifically opencast and pillar coal extraction. Estimates of coal reserves impact assessments of the carrying value of property, plant and equipment, depreciation calculations and rehabilitation and decommissioning provisions. There are numerous uncertainties inherent in estimating coal reserves and changes to these assumptions may result in restatement of reserves. These assumptions include geotechnical factors as well as economic factors such as commodity prices, production costs and yield.codeSAMREC code

Depreciation, amortisation of mineral rights, mining development costs and plant & equipment

The annual depreciation/amortisation charge is dependent on estimates, including coal reserves and the related life of mine, expected development expenditure for probable reserves, the allocation of certain assets to relevant ore reserves and estimates of residual values of the processing plant. The charge can fluctuate when there are significant changes in any of the factors or assumptions used, such as estimating mineral reserves which in turn affects the life of mine or the expected life of reserves. Estimates of proven and probable reserves are prepared by an independent Competent Person. Assessments of depreciation/amortisation rates against the estimated reserve base are performed regularly. Details of the depreciation/amortisation charge can be found in note 12.

Provision for mining rehabilitation including restoration and de-commissioning costs

A provision for future rehabilitation including restoration and decommissioning costs requires estimates and assumptions to be made around the relevant regulatory framework, the timing, extent and costs of the rehabilitation activities and of the risk free rates used to determine the present value of the future cash outflows. The provisions, including the estimates and assumptions contained therein, are reviewed regularly by management. The group annually engages an independent expert to assess the cost of restoration and final decommissioning as part of management’s assessment of the provision. Details of the provision for mining rehabilitation can be found in note 21.

Impairment

Property, plant and equipment representing the group’s mining assets in are reviewed for impairment at each reporting date. The impairment test is performed using the approved Life of Mine plan and those future cash flow estimates are discounted using asset specific discount rates and are based on expectations about future operations. The impairment test requires estimates about production and sales volumes, commodity prices, proven and probable reserves (as assessed by the Competent Person), operating costs and capital expenditures necessary to extract reserves in the approved Life of Mine plan. Changes in such estimates could impact recoverable values of these assets. Details of the carrying value of property, plant and equipment can be found in note 12.South Africa

The impairment test indicated significant headroom as at and therefore no impairment is considered appropriate. The key assumptions include: coal prices, including domestic coal prices based on recent pricing and assessment of market forecasts for export coal; production based on proven and probable reserves assessed by the independent Competent Person and yields associated with mining areas based on assessments by the Competent Person and empirical data. A 15% reduction in average forecast coal prices or a 17% reduction in yield would give rise to a breakeven scenario. However, the directors consider the forecasted yield levels and pricing to be appropriate and supportable best estimates.31 December 2018

Fair value measurements of investment properties

An assessment of the fair value of investment properties, is required to be performed. In such instances, fair value measurements are estimated based on the amounts for which the assets and liabilities could be exchanged between market participants. To the extent possible, the assumptions and inputs used take into account externally verifiable inputs. However, such information is by nature subject to uncertainty. The directors note that the fair value measurement of the investment properties, can be considered to be less judgemental where external valuers have been used and as a result of the nature of the underlying assets. The fair value of investment property is set out in note 11, whilst the carrying value of investments in joint ventures which themselves include investment property held at fair value by the joint venture is set out at note 13.

Measurement of development property

The development property included within the group’s joint venture investment in West Ealing Projects limited is considered by Management to fall outside the scope of investment property.  A property intended for sale in the ordinary course of business or in the process of construction or development for such sale, for example, property acquired exclusively with a view to subsequent disposal in the near future or for development and resale is expected to be recorded under the accounting standard of IAS 2 Inventories. The directors have discussed the commercial approach with the directors of the underlying joint venture and the current plan is to obtain further planning permission for the development and then sell or to complete the development and sell. The Directors therefore consider the accounting treatment of the property development under IAS 2 Inventories to be correct.

IAS 2 Inventories require the capitalised costs to be held at the lower of cost or Net realisable value. At , the costs capitalised within the development based on a director’s appraisal for the property estimated the net realisable value at a surplus over the cost for the development. The directors have reviewed the underlying inputs and key assumptions made in the appraisal and consider them adequate. However, such information is by nature subject to uncertainty. The cost of the development property is set out in note 12.31 December 2018

Basis of consolidation

The group accounts incorporate the accounts of and all of its subsidiary undertakings, together with the group’s share of the results of its joint ventures. Non-controlling interests in subsidiaries are presented separately from the equity attributable to equity owners of the parent company. On acquisition of a non-wholly owned subsidiary, the non-controlling shareholders’ interests are initially measured at the non-controlling interests’ proportionate share of the fair value of the subsidiaries net assets. Thereafter, 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. For subsequent changes in ownership in a subsidiary that do not result in a loss of control, the consideration paid or received is recognised entirely in equity.Bisichi Mining PLC

The definition of control assumes the simultaneous fulfilment of the following three criteria:

•     The parent company holds decision-making power over the relevant activities of the investee,

•     The parent company has rights to variable returns from the investee, and

•     The parent company can use its decision-making power to affect the variable returns.

Investees are analysed for their relevant activities and variable returns, and the link between the variable returns and the extent to which their relevant activities could be influenced in order to ensure the definition is correctly applied.

Revenue

Revenue comprises sales of coal and property rental income. Coal revenue is recognised when the customer has a legally binding obligation to settle under the terms of the contract when the performance obligations have been satisfied, which is once control of the goods has transferred to the buyer at the delivery point. Coal Revenue is measured based on consideration specified in the contract with a customer on a per metric tonne basis.

Export revenue is generally recognised when the product is delivered to the export terminal location specified in the customer contract, at which point control of the goods have been transferred to the customer. Domestic coal revenues are generally recognised on collection by the customer from the mine or from the mine’s rail siding when loaded into transport, where the customer pays the transportation costs. Fulfilment costs to satisfy the performance obligations of coal revenues such as transport and loading costs borne by the group from the mine to the delivery point are recoded in operating 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. Service charges recoverable from tenants are recognised over time as the service is rendered.

Expenditure

Expenditure is recognised in respect of goods and services received. Where coal is purchased from third parties at point of extraction the expenditure is only recognised when the coal is extracted and all of the significant risks and rewards of ownership have been transferred.

Investment properties        

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. 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.

Mining reserves, plant and equipment and development cost

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 included within mining reserves is not depreciated. Other property, plant and equipment is stated at historical cost less accumulated depreciation. The cost recognised includes the recognition of any decommissioning assets related to property, plant and equipment.

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 costs is not charged until production commences or the assets are put to use. On commencement of full commercial production, depreciation is charged over the life of the associated mine reserves extractable using the asset on a unit of production basis. The unit of production calculation is based on tonnes mined as a ratio to proven and probable reserves and also includes future forecast capital expenditure. The cost recognised includes the recognition of any decommissioning assets related to mine development.

Post production stripping

In surface mining operations, the group may find it necessary to remove waste materials to gain access to coal reserves prior to and after production commences. Prior to production commencing, stripping costs are capitalised until the point where the overburden has been removed and access to the coal seam commences. Subsequent to production, waste stripping continues as part of extraction process as a mining production activity. There are two benefits accruing to the group from stripping activity during the production phase: extraction of coal that can be used to produce inventory and improved access to further quantities of material that will be mined in future periods. Economic coal extracted is accounted for as inventory. The production stripping costs relating to improved access to further quantities in future periods are capitalised as a stripping activity asset, if and only if, all of the following are met:

•     it is probable that the future economic benefit associated with the stripping activity will flow to the group;

•     the group can identify the component of the ore body for which access has been improved; and

•     the costs relating to the stripping activity associated with that component or components can be measured reliably.

In determining the relevant component of the coal reserve for which access is improved, the group componentises its mine into geographically distinct sections or phases to which the stripping activities being undertaken within that component are allocated. Such phases are determined based on assessment of factors such as geology and mine planning.

The group depreciates deferred costs capitalised as stripping assets on a unit of production method, with reference the tons mined and reserve of the relevant ore body component or phase. The cost is recognised within Mine development costs within the balance sheet.

Other assets and depreciation

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. This includes the washing plant and other key surface infrastructure. 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.

The depreciation rates generally applied are:

Provisions

Provisions are recognised when the group has a present obligation as a result of a past event which it is probable will result in an outflow of economic benefits that can be reliably estimated.

A provision for rehabilitation of the mine is initially recorded at present value and the discounting effect is unwound over time as a finance cost. Changes to the provision as a result of changes in estimates are recorded as an increase / decrease in the provision and associated decommissioning asset. The decommissioning asset is depreciated in line with the group’s depreciation policy over the life of mine. The provision includes the restoration of the underground, opencast, surface operations and de-commissioning of plant and equipment. 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.


Employee benefits

Share based remuneration

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. Payments made to employees on the cancellation or settlement of options granted are accounted for as the repurchase of an equity interest, ie as a deduction from equity. Details of the share options in issue are disclosed in the Directors’ Remuneration Report on page 39 under the heading Share option schemes which is within the audited part of that report.

Pensions

The group operates a defined contribution pension scheme. The contributions payable to the scheme are expensed in the period to which they relate

Foreign currencies

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, including inter-company trading balances 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. Foreign exchange differences on intercompany loans are recorded in other comprehensive income when the loans are not considered as trading balances and are not expected to be repaid in the foreseeable future. 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.

Financial instruments

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

Financial assets

Financial assets are classified as either financial assets at amortised cost, at fair value through other comprehensive income (“FVTOCI”) or at fair value through profit or loss (“FVPL”) depending upon the business model for managing the financial assets and the nature of the contractual cash flow characteristics of the financial asset.

A loss allowance for expected credit losses is determined for all financial assets, other than those at FVPL, at the end of each reporting period. The Group applies a simplified approach to measure the credit loss allowance for trade receivables using the lifetime expected credit loss provision. The lifetime expected credit loss is evaluated for each trade receivable taking into account payment history, payments made subsequent to year end and prior to reporting, past default experience and the impact of any other relevant and current observable data. The group applies a general approach on all other receivables classified as financial assets. The general approach recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. The Group derecognises financial liabilities when the Group’s obligations are discharged, cancelled or have expired.

Bank loans and overdrafts

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

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.

Investments

Current financial asset investments and other investments classified as non-current (“The investments”) comprise of shares in listed companies. The investments are measured at fair value. Any changes in fair value are recognised in the profit or loss account and accumulated in retained earnings.

Trade receivables

Trade receivables are accounted for at amortised cost. Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate expected credit loss 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

Trade payables cost 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.

Other financial assets and liabilities

The groups other financial assets and liabilities not disclosed above are accounted for at amortised cost.

Joint ventures

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. Dividends received are credited against the investment. Joint control is the contractually agreed sharing of control over an arrangement, which exists only when decisions about relevant strategic and/or key operating decisions require unanimous consent of the parties sharing control. Control over the arrangement is assessed by the group in accordance with the definition of control under IFRS 10. Loans to joint ventures are classified as non-current assets when they are not expected to be received in the normal working capital cycle. Trading receivables and payables to joint ventures are classified as current assets and liabilities.

Inventories

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. Cost is determined using the weighted average method. Net realisable value is based on estimated selling price less all further costs to completion and all relevant marketing, selling and distribution costs.

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. This includes mining reserves, plant and equipment and net investments in joint ventures. A review involves determining whether the carrying amounts are in excess of their recoverable amounts. An asset’s recoverable amount is determined as the higher of its fair value less costs of disposal and its value in use. Such reviews are undertaken on an asset-by-asset basis, except where assets do not generate cash flows independent of other assets, in which case the review is undertaken on a cash generating unit basis.

If the carrying amount of an asset exceeds its recoverable amount 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. Any change in carrying value is recognised in the comprehensive income statement.

Deferred tax

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

Dividends payable on the ordinary share capital are recognised as a liability in the period in which they are approved.

Cash and cash equivalents

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 that are repayable on demand as per IAS 7. This includes the structured trade finance facility held in as detailed in note 22. These facilities are considered to form an integral part of the treasury management of the group and can fluctuate from positive to negative balances during the period.South Africa

Segmental reporting

For management reporting purposes, the group is organised into business segments distinguishable by economic activity. The group’s material 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 any individual customer, which makes up 10 percent or more of the total revenue of the group, is separately disclosed within each segment. All coal exports are sales to coal traders at Richard Bay’s terminal in with the risks and rewards passing to the coal trader at the terminal. Whilst the coal traders will ultimately sell the coal on the international markets the Company has no visibility over the ultimate destination of the coal. Accordingly, the export sales are recorded as South African revenue.South Africa

Financial statements


Notes to the financial statements

for the year ended31 December 2018

1. SEGMENTAL REPORTING

   

 

   


2. REVENUE

Segmental mining revenue is derived principally from coal sales and is recognised once the control of the goods has transferred from the group to the buyer. Segmental property revenue is derived from rental income and service charges recoverable from tenants. This is consistent with the revenue information disclosed for each reportable segment (see note 1). Rental income is recognised on a straight-line basis over the term of the lease. Service charges recoverable from tenants are recognised over time as the service is rendered. Revenue is measured based on the consideration specified in the contract with the customer or tenant.


3. OPERATING COSTS

Operating costs above include depreciation of £2,113,000 (2017: £1,790,000).


4. (LOSS)/GAIN ON REVALUATION OF INVESTMENT PROPERTIES

The reconciliation of the investment surplus to the gain on revaluation of investment properties in the income statement is set out below:


5. PROFIT BEFORE TAXATION

Profit before taxation is arrived at after charging:

The directors consider the auditors were best placed to provide the above non-audit and audit related services which refer to regulatory matters. The audit committee reviews the nature and extent of non-audit services to ensure that independence is maintained.


6. DIRECTORS’ EMOLUMENTS

Directors’ emoluments are shown in the Directors’ remuneration report on page 38 which is within the audited part of that report.


7. INTEREST PAYABLE


8. TAXATION

 (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 of 19.00% (2017: 19.25%).United Kingdom

The differences are explained below:

(c) Analysis of and overseas tax:United Kingdom

tax included in above:United Kingdom

Overseas tax is derived from the group’s South African mining operation. Refer to note 1 for a report on the groups’ mining and South African segmental reporting. The adjustment to tax rate arises due to the corporation tax rate assessed in for the year being different from that in the . The South African rate assessed is 28% (2017: 28%).South AfricaUK


9. SHAREHOLDER DIVIDENDS

The dividends relating to the current period are not accounted for until they have been approved at the Annual General Meeting. The amount, in respect of 2018, will be accounted for as an appropriation of retained earnings in the year ending .31 December 2019


10.       PROFIT AND DILUTED PROFIT PER SHARE

Both the basic and diluted profit per share calculations are based on a profit after tax of £3,314,000 (2017: £749,000). The basic profit per share has been calculated on a weighted average of 10,676,839 (2017: 10,676,839) ordinary shares being in issue during the period. The diluted profit per share has been calculated on the weighted average number of shares in issue of 10,676,839 (2017: 10,676,839) plus the dilutive potential ordinary shares arising from share options of 67,350 (2017: nil) totalling 10,744,189 (2017: 10,676,839).

Share options exercisable as at do not have a dilutive effect as the average market price of ordinary shares during the period does not exceed the exercise price of the options.31 December 2018


11. INVESTMENT PROPERTIES

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:

The valuations were carried out in accordance with the Statements of Asset Valuation and Guidance Notes published by The .Royal Institution of Chartered Surveyors

Each year external valuers are appointed by the Executive Directors on behalf of the Board. The valuers are selected based upon their knowledge, independence and reputation for valuing assets such as those held by the group.

Valuations are performed annually and are performed consistently across all investment properties in the group’s portfolio. At each reporting date appropriately qualified employees of the group verify all significant inputs and review the computational outputs. Valuers submit their report to the Board on the outcome of each valuation round.

Valuations take into account tenure, lease terms and structural condition. The inputs underlying the valuations include market rent or business profitability, likely incentives offered to tenants, forecast growth rates, yields, EBITDA, discount rates, construction costs including any specific site costs (for example section 106), professional fees, developer’s profit including contingencies, planning and construction timelines, lease regear costs, planning risk and sales prices based on known market transactions for similar properties to those being valued.

Valuations are based on what is determined to be the highest and best use. When considering the highest and best use a valuer will consider, on a property by property basis, its actual and potential uses which are physically, legally and financially viable. Where the highest and best use differs from the existing use, the valuer will consider the cost and likelihood of achieving and implanting this change in arriving at its valuation.

There are often restrictions on Freehold and Leasehold property which could have a material impact on the realisation of these assets. The most significant of these occur when planning permission or lease extension and renegotiation of use are required or when a credit facility is in place. These restrictions are factored in the property’s valuation by the external valuer.

IFRS 13 sets out a valuation hierarchy for assets and liabilities measured at fair value as follows:

Level 1:   valuation based on inputs on quoted market prices in active markets

Level 2:   valuation based on inputs other than quoted prices included within level 1 that maximise the use of observable data directly or from market prices or indirectly derived from market prices.

Level 3:   where one or more significant inputs to valuations are not based on observable market data




The inter-relationship between key unobservable inputs and the groups’ properties is detailed in the table below:

There are interrelationships between all these inputs as they are determined by market conditions. The existence of an increase in more than one input would be to magnify the input on the valuation. The impact on the valuation will be mitigated by the interrelationship of two inputs in opposite directions, for example, an increase in rent may be offset by an increase in yield.

The table below illustrates the impact of changes in key unobservable inputs on the carrying / fair value of the group’s properties:


12.       MINING RESERVES, PLANT AND EQUIPMENT


13.       INVESTMENTS HELD AS NON-CURRENT ASSETS

   

The adoption of IFRS 9 has resulted in the reclassification of the group’s non-current other investments. In the prior year the investments were classified as available for sale investments measured at fair value with movements taken through other comprehensive income and available for sale reserves. In the current year the investments were reclassified as non-current other investments held at fair value with movements taken through profit and loss and retained earnings. The Group has not restated prior periods as allowed by the transition provisions of IFRS 9.


14.       JOINT VENTURES

Dragon Retail Properties Limited

The company owns 50% of the issued share capital of Dragon Retail Properties Limited, an unlisted property investment company. At year end, the carrying value of the investment held by the group was £815,000 (2017: £874,000). The remaining 50% is held by London & Associated Properties PLC. Dragon Retail Properties Limited is incorporated in and and its registered address is 24 Bruton Place, , W1J 6NE. It has issued share capital of 500,000 (2017: 500,000) ordinary shares of £1 each. No dividends were received during the period.EnglandWalesLondon

West Ealing Projects Limited

The company owns 50% of the issued share capital of West Ealing Projects Limited, an unlisted property development company. At year end, the carrying value of the investment held by the group was £507,000 (2017: £nil). The remaining 50% is held by London & Associated Properties PLC. West Ealing Projects Limited is incorporated in and and its registered address is 24 Bruton Place, , W1J 6NE. It has issued share capital of 1,000,000 (2017: £nil) ordinary shares of £1 each. No dividends were received during the period.EnglandWalesLondon


15.       SUBSIDIARY COMPANIES

The company owns the following ordinary share capital of the subsidiaries which are included within the consolidated financial statements:

Details on the non-controlling interest in subsidiaries are shown under note 27.


16.       INVENTORIES


17.       TRADE AND OTHER RECEIVABLES

Financial assets falling due within one year are held at amortised cost. The fair value of trade and other receivables approximates their carrying amounts. The Group applies a simplified approach to measure the credit loss allowance for trade receivables using the lifetime expected credit loss provision. The lifetime expected credit loss is evaluated for each trade receivable taking into account payment history, payments made subsequent to year end and prior to reporting, past default experience and the impact of any other relevant and current observable data. The group applies a general approach on all other receivables classified as financial assets. At year end, the group allowance for doubtful debts provided against trade receivables was £12,000 (2017: £19,000). There was no additional loss allowance or impairment required during the year as a result of the implementation of IFRS 9.


18.       INVESTMENTS IN LISTED SECURITIES HELD AT FVPL (PREVIOUSLY CLASSIFIED AS AVAILABLE FOR SALE INVESTMENTS)

The adoption of IFRS 9 has resulted in the reclassification of the groups Investments in listed securities. In the prior year the investments were classified as available for sale investments measured at fair value with movements taken through other comprehensive income and available for sale reserves. In the current year the investments were reclassified as Investments in listed securities held at fair value with movements taken through profit and loss and retained earnings. The Group has not restated prior periods as allowed by the transition provisions of IFRS 9.

19.       TRADE AND OTHER PAYABLES


20.       FINANCIAL LIABILITIES – BORROWINGS

   

In , as part of a restructuring and sale of the washing plant facilities from Black Wattle Colliery (Pty) Limited (“Black Wattle”) to its wholly owned subsidiary Sisonke Coal Processing (Pty) Limited (“Sisonke Coal Processing”), the R100million bank overdraft facility held by Black Wattle with Absa Bank Limited at year end (“old trade facility”) was replaced in January 2019 by a new structured trade finance facility for R100million held by Sisonke Coal Processing (“new trade facility”). The South African bank loans are secured by way of a first charge over specific pieces of mining equipment, inventory and the debtors of the relevant company which holds the loan which are included in the financial statements at a value of £8,640,000.South Africa

The bank loans and overdraft are secured by way of a first charge over the investment properties in the which are included in the financial statements at a value of £13,045,000. During the year the group reduced its loan by £14,000 in order to rectify a breach of one of its loan banking covenants. No other banking covenants were breached by the group during the year.United KingdomUKUKUK

Consistent with others in the mining and property industry, the group monitors its capital by its gearing levels. This is calculated as the total bank loans and overdraft less remaining cash and cash equivalents as a percentage of equity. At year end the gearing of the group was calculated as follows:

Analysis of the changes in liabilities arising from financing activities:


21.       PROVISION FOR REHABILITATION


22.       FINANCIAL INSTRUMENTS

Total financial assets and liabilities

The group’s financial assets and liabilities are as follows, representing both the fair value and the carrying value:

Investments in listed securities held at fair value through profit and loss (previously classified as Available for sale investments) 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. The comparative figures for 2017 fall under the same category of financial instrument as 2018.

The carrying amount of short term (less than 12 months) trade receivable and other liabilities approximate their fair values. The fair value of non-current borrowings in note 20 approximates its carrying value and was determined under level 2 of the fair value hierarchy and is estimated by discounting the future contractual cash flows at the current market interest rates for borrowings and for the South African overdraft facility. The fair value of the finance lease liabilities in note 31 approximates its carrying value and was determined under level 2 of the fair value hierarchy and is estimated by discounting the future contractual cash flows at the current market interest rates.UK

policyTreasury

Although no derivative transactions were entered into during the current and prior year, the group may use 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

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. 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 and PRIME in .TreasuryUKSouth Africa

As at 31 December 2018, with other variables unchanged, a 1% increase or decrease in interest rates, on investments and borrowings whose interest rates are not fixed, would respectively change the profit/loss for the year by £101,000 (2017: £82,000). The effect on equity of this change would be an equivalent decrease or increase for the year of £101,000 (2017: £82,000).


Liquidity risk

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 in and in in Black Wattle Colliery (Pty) Ltd.UKSouth AfricaBisichi Mining PLC

The following table sets out the maturity profile of contractual undiscounted cash flows of financial liabilities as at 31 December:

The following table sets out the maturity profile of contractual undiscounted cash flows of financial liabilities as at 31 December maturing within one year:

In , as part of the restructuring and sale of the washing plant facilities from Black Wattle Colliery (Pty) Limited (“Black Wattle”) to its wholly owned subsidiary Sisonke Coal Processing (Pty) Limited (“Sisonke Coal Processing”), the R100million facility held by Black Wattle with Absa Bank Limited at year end (“old trade facility”) was replaced in January 2019 by a new structured trade finance facility for R100million held by Sisonke Coal Processing (“new trade facility”).South Africa

The new trade facility comprises of a R100million revolving facility to cover the working capital requirements of the group’s South African operations. The interest cost of the loan is at the South African prime lending rate. The new trade facility is renewable annually each January, is repayable on demand and is secured against inventory, debtors and cash that are held by Sisonke Coal Processing (Pty) Limited.

The old trade facility, which was also repayable on demand, is included in cash and cash equivalents within the cashflow statement.

In December 2014, the group signed a £6 million term loan facility with Santander. The loan is secured against the group’s retail property portfolio. The debt package has a five year term and is repayable at the end of the term in December 2019. The interest cost of the loan is 2.35% above LIBOR. The group’s intention is to enter into a new facility agreement prior to the termination of the existing facility agreement. Nonetheless the group has adequate financial resources to repay the existing facility should a new facility not be finalised prior to December 2019.UK

As a result of the above agreed banking facilities, the Directors believe that the group is well placed to manage its liquidity risk.

Credit risk

The group is mainly exposed to credit risk on its cash and cash equivalents, trade and other receivables and amounts owed by joint ventures as per the balance sheet. 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 £15,621,000 (2017: £11,650,000).

To mitigate risk on its cash and cash equivalents, the group only deposits surplus cash with well-established financial institutions of high quality credit standing.

The group’s credit risk is primarily attributable to its trade receivables. Trade debtor’s credit ratings are reviewed regularly. The Group's review includes measures such as the use of external ratings and establishing purchase limits for each customer. The group had amounts due from its significant revenue customers at the year end that represented 92% (2017: 93%) of the trade receivables balance. These amounts have been subsequently settled. The Group approach to measure the credit loss allowance for trade receivables is outlined in note 17. At year end, the group allowance for doubtful debts provided against trade receivables was £12,000 (2017: £19,000). As at year end the amount of trade receivables held past due date less credit loss allowances was £17,000 (2017: £24,000). To date, the amount of trade receivables held past due date less credit loss allowances that has not subsequently been settled is £14,000 (2017: £18,000). Management have no reason to believe that this amount will not be settled.  

The Group exposure to credit risk on its loans to joint ventures and other receivables is mitigated through ongoing review of the underlying performance and resources of the counterparty including evaluation of different scenarios of probability of default and expected loss applicable to each of the underlying balances.


Financial assets maturity

On 31 December 2018, cash at bank and in hand amounted to £9,221,000 (2017: £5,327,000) 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.

Foreign exchange risk

All trading is undertaken in the local currencies except for certain export sales which are invoiced in dollars. It is not the group’s policy to obtain forward contracts to mitigate foreign exchange risk on these contracts as payment terms are within 15 days of invoice or earlier. Funding is also in local currencies other than inter-company investments and loans and it is also not the group’s policy to obtain forward contracts to mitigate foreign exchange risk on these amounts. During 2018 and 2017 the group did not hedge its exposure of foreign investments held in foreign currencies.

The principle currency risk to which the group is exposed in regard to inter-company balances is the exchange rate between Pounds sterling and South African Rand. It arises as a result of the retranslation of Rand denominated inter-company trade receivable balances held within the which are payable by South African Rand functional currency subsidiaries.UK

Based on the group’s net financial assets and liabilities as at 31 December 2018, a 25% strengthening of Sterling against the South African Rand, with all other variables held constant, would decrease the group’s profit after taxation by £130,000 (2017: £34,000). A 25% weakening of Sterling against the South African Rand, with all other variables held constant would increase the group’s profit after taxation by £216,000 (2017: £56,000).

The 25% sensitivity has been determined based on the average historic volatility of the exchange rate for 2017 and 2018.

The table below shows the currency profiles of cash and cash equivalents:

Cash and cash equivalents earn interest at rates based on LIBOR in Sterling and Prime in Rand.

The tables below shows the currency profiles of net monetary assets and liabilities by functional currency of the group:

   


23.       DEFERRED TAXATION

Refer to note 8 for details of deferred tax recognised in income in the current year. Tax rates of 17% (2017: 17%) in the and 28% (2017: 28%) in were utilised to calculate year end deferred tax balances.UKSouth Africa


24.       SHARE CAPITAL

Allotted and fully paid:


25.       OTHER RESERVES


26.       SHARE BASED PAYMENTS

Details of the share option scheme are shown in the Directors’ remuneration report on page 39 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:

On the 5 February 2018 the company entered into an agreement with to surrender the 80,000 options which were granted in 2010. The aggregate consideration paid by the group to effect the cancellation was £1.G. Casey

There are no performance or service conditions attached to 2015 options which are outstanding at 31 December 2018 which vested in 2015.

On 6 February 2018 the company granted additional options to the following directors of the company:

•     A. Heller 150,000 options at an exercise price of 73.50p per share. •     230,000 options at an exercise price of 73.50p per share.
G. Casey

The above options vest on date of grant and are exercisable within a period of 10 years from date of grant. There are no performance or service conditions attached to the options. The options were valued at £24,000 at date of grant using the Black-Scholes-Merton model with the following assumptions:

Expected volatility                                                   23.90%

Expected life                                                           4 years

Risk free rate                                                          0.785%

Expected dividends                                                 6.71%

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 used on the risk-averse balance likely to be required by the option holders.


27.       NON-CONTROLLING INTEREST

The non-controlling interest comprises of a 37.5% shareholding in Black Wattle Colliery (Pty) Ltd. A coal mining company incorporated in . Summarised financial information reflecting 100% of the underlying subsidiary’s relevant figures, is set out below.South Africa

The non-controlling interest relates to the disposal of a 37.5% shareholding in Black Wattle Colliery (Pty) Ltd in 2010 when the total issued share capital in Black Wattle Colliery (Pty) Ltd was increased from 136 shares to 1,000 shares at par of R1 (South African Rand) through the following shares issue:

-     a subscription for 489 ordinary shares at par by increasing the number of shares held from 136 ordinary shares to a total of 625 ordinary shares;Bisichi Mining (Exploration) Limited

-     a subscription for 110 ordinary shares at par by Vunani Mining (Pty) Ltd;

-     a subscription for 265 “A” shares at par by Vunani Mining (Pty) Ltd

is a wholly owned subsidiary of incorporated in and .Bisichi Mining (Exploration) LimitedBisichi Mining PLCEnglandWales

Vunani Mining (Pty) Ltd is a South African Black Economic Empowerment company and minority shareholder in Black Wattle Colliery (Pty) Ltd.

The “A” shares 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.


28.       RELATED PARTY TRANSACTIONS

(a) London & Associated Properties PLC – London & Associated Properties PLC is a substantial shareholder and parent company of . Property management, office premises, general management, accounting and administration services are provided for and its subsidiaries.Bisichi Mining PLCBisichi Mining PLCUK

(b) West Ealing Projects Limited – West Ealing Projects Limited (“West Ealing”) is an unlisted property company incorporated in and . West Ealing is owned equally by the company and London & Associated Properties PLC and is accounted as a joint venture and treated as a non-current asset investment.EnglandWales

(c) Dragon Retail Properties Limited – (“Dragon”) is owned equally by the company and London & Associated Properties PLC. Dragon is accounted as a joint venture and is treated as a non-current asset investment.

(d) Ezimbokodweni Mining (Pty) Limited – Ezimbokodweni Mining is a dormant prospective coal production company based in and is accounted as a joint venture.South Africa

Details of key management personnel compensation and interest in share options are shown in the Directors’ Remuneration Report on pages 38 and 39 under the headings Directors’ remuneration, Pension schemes and incentives and Share option schemes which is within the audited part of this report. Refer also to note 26 for details of IFRS 2 charges. The total employers’ national insurance paid in relation to the remuneration of key management was £225,000 (2017: 156,000). In 2012 a loan was made to one of the directors, Mr A R Heller, for £116,000. Interest is payable on the Director’s Loan at a rate of 6.14 per cent. There is no fixed repayment date for the Director’s Loan. The loan amount outstanding at year end was £41,000 (2017: £56,000) and a repayment of £15,000 (2017: £15,000) was made during the year.

The non-controlling interest to Vunani Limited is shown in note 27. In addition, the group holds an investment in Vunani Limited classified as non-current available for sale investments with a fair value of £35,000 (2017: £51,000).


29.       EMPLOYEES


30.       CAPITAL COMMITMENTS


31.       HEAD LEASE COMMITMENTS AND FUTURE PROPERTY LEASE RENTALS

Present value of head leases on properties

The Company has one finance lease contract for an investment property. The remaining term for the leased investment property is 130 years. The annual rent payable is the higher of £7,500 or 6.25% of the revenue derived from the leased assets.

The group has entered into operating leases on its investment property portfolio consisting mainly of commercial properties. These leases have terms of between 1 and 109 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions.

The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:


32.       CONTINGENT LIABILITIES AND POST BLANCE SHEET EVENTS

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:




Company balance sheet

at 31 December 2018

The profit for the financial year, before dividends, was £2,414,000 (2017: loss of £173,000)

The company financial statements were approved and authorised for issue by the board of directors on 25 April 2019 and signed on its behalf by:

Director                                           DirectorA R Heller                              G J Casey                              Company Registration No. 112155




Company statement of changes in equity

for the year ended 31 December 2018




Company accounting policies

for the year ended 31 December 2018

The following are the main accounting policies of the company:

Basis of preparation

The financial statements have been prepared in accordance with Financial Reporting Standard 100 Application of Financial Reporting Requirements and Financial Reporting Standard 101 Reduced Disclosure Framework. The principal accounting policies adopted in the preparation of the financial statements are set out below.

The financial statements have been prepared on a historical cost basis, except for the revaluation of investment property and certain financial instruments.

The adoption of IFRS 9 has resulted in changes in the company’s accounting policies for the recognition, classification and measurement of financial assets and financial liabilities and impairment of financial assets. The only material impact of IFRS 9 on the Company financial statements related to the movement in fair value of other investments comprising of shares in listed companies. Under IAS 39 the movement in the investments was measured at fair value through other comprehensive income and taken to an available for sale reserve. Under IFRS 9 the movements are measured at fair value through profit and loss and taken to retained earnings. The Group has not restated prior periods as allowed by the transition provisions of IFRS 9. In order to reclassify the impact of historic movements on the other investments, an adjustment of £25,000 has been made to the Group statement of changes in equity at 1 January 2018 transferring the historical fair value movements of the investments from the available for sale reserve to retained earnings.

Disclosure exemptions adopted

In preparing these financial statements the company has taken advantage of all disclosure exemptions conferred by FRS 101 as well as disclosure exemptions conferred by IFRS 2, 7 and 13.

Therefore these financial statements do not include:

•     certain comparative information as otherwise required by EU endorsed IFRS;

•     certain disclosures regarding the company’s capital;

•     a statement of cash flows;

•     the effect of future accounting standards not yet adopted;

•     the disclosure of the remuneration of key management personnel; and

•     disclosure of related party transactions with the company’s wholly owned subsidiaries.

In addition, and in accordance with FRS 101, further disclosure exemptions have been adopted because equivalent disclosures are included in the company’s Consolidated Financial Statements.

Dividends received

Dividends are credited to the profit and loss account when received.

Depreciation

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

Joint ventures

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.

Other Investments

Investments of the company in subsidiaries are stated in the balance sheet as fixed assets at cost less provisions for impairment.

The adoption of IFRS 9 has resulted in changes in the recognition, classification and measurement of other investments. Other investments comprising of shares in listed companies are classified in the current year at fair value through profit and loss. In the previous year other investments are classified as non-current available for sale investments carried at fair value. In the prior year any changes in fair value above cost were recognised in other comprehensive income and accumulated in the available-for-sale reserve and any changes in fair value below cost a provision for impairment were recognised in the profit or loss account.  

Foreign currencies

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.

Financial instruments

Details on the group’s accounting policy for financial instruments can be found on page 67.


Deferred taxation

Details on the group’s accounting policy for deferred taxation can be found on page 68.

Leased assets and obligations

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.

Pensions

Details on the group’s accounting policy for pensions can be found on page 67.

Share based remuneration

Details on the group’s accounting policy for share based remuneration can be found on page 67. Details of the share options in issue are disclosed in the directors’ remuneration report on page 39 under the heading share option schemes which is within the audited part of this report.


33.       PROFIT & LOSS ACCOUNT

A separate profit and loss account for has not been presented as permitted by Section 408(2) of the Companies Act 2006. The profit for the financial year, before dividends paid, was £2,414,000 (2017: loss of £173,000)Bisichi Mining PLC

Details of share capital are set out in note 24 of the group financial statements and details of the share options are shown in the Directors’ Remuneration Report on page 39 under the heading Share option schemes which is within the audited part of this report and note 26 of the group financial statements.


34.       DIVIDENDS

Details on dividends can be found in note 9 in the group financial statements.


35.       TANGIBLE FIXED ASSETS

Leasehold property consists of a single unit with a long leasehold tenant. The term remaining on the lease is 41 years.


36.       INVESTMENTS

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.

Other investments comprise £35,000 (2017: £51,000) shares.


37.       DEBTORS

Amounts due within one year are held at amortised cost. The Group applies a simplified approach to measure the loss allowance for trade receivables using the lifetime expected loss provision. The group applies a general approach on all other receivables. The general approach recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition. The company has reviewed and assessed the underlying performance and resources of its counterparties including its subsidiary undertakings and joint ventures. There was no additional loss allowance or impairment required during the year as a result of the implementation of IFRS 9. 


38.       CREDITORS


39.       PROVISIONS FOR LIABILITIES


40.       RELATED PARTY TRANSACTIONS

(a) Black Wattle Colliery (Pty) Ltd – Black Wattle Colliery (Pty) Ltd is a coal mining company based in .South Africa

(b) Ninghi Marketing Limited – Ninghi Marketing Limited is a dormant coal marketing company incorporated in & .EnglandWales

Black Wattle Colliery (PTY) Ltd and NInghi Marketing Limited are subsidiaries of the company.

In addition to the above, the company has issued a company guarantee of R20,061,917 (2017: 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.

A provision of £102,000 has been raised against the amount owing by Ninghi Marketing Limited in prior years as the company is dormant.

In 2012 a loan was made to one of the directors, Mr A R Heller, for £116,000. Further details on the loan can be found in Note 28 of the group financial statements.

Under FRS 101, 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.



41.       EMPLOYEES

Reported EBITDA: £8,600,000 (2016: £3,700,000)

Adjusted EBITDA: £9,100,000 (2016: £5,800,000)
--  Another strong performance from Black Wattle, the group’s South African
        coal mining operation.
--  Mine infrastructure improvements completed in 2017 allowed Black Wattle
        to wash coal at consistent levels of production and achieve an increased
        overall yield compared to prior years.
--  Black Wattle was able to benefit from the significantly improved coal
        prices during the year.
--  Agreement signed to acquire an additional 1.9million metric tonnes of
        Run of Mine coal contiguous to Black Wattle’s operations.
--   property portfolio continues to perform well with average rental
        yields for the portfolio remaining stable during the year.UK
--  In light of the strong results achieved for the year, a special dividend
        of 2p (2016: 1p) per share proposed in addition to a final dividend of
        3p (2017: 3p) taking full year dividend to 6p (2016: 5p) per share.
--  Dividend yield of 6.5% at year end share price.
Earnings before interest, Operating profit before     Dividend yield of
tax, depreciation and     depreciation, fair value
amortisation (EBITDA) of  adjustments and exchange
                          movements (Adjusted EBITDA)
                          of

£8.6million               £9.1million                 6.5%

(2017: £3.7 million)      (2017: £5.8 million)        at year end share price.
The group’s carbon footprint:                                        2018   2017
                                                                    CO2e    CO2e
                                                                   Tonnes Tonnes

Emissions source:

Scope 1 Combustion of fuel & operation of facilities               21,348 15,575

Scope 1 Emissions from coal mining activities (see note below)     27,428 27,004

Scope 2 Electricity, heat, steam and cooling purchased for own use 12,177 11,210

Total                                                              60,953 53,779

Intensity:

Intensity 1 Tonnes of CO2 per pound sterling of revenue            0.0012 0.0013

Intensity 2 Tonnes of CO2 per tonne of coal produced               0.0462 0.0415
PRINCIPAL RISK                         PERFORMANCE AND MANAGEMENT OF THE RISK

COAL PRICE RISK
The group is exposed to coal price     The group primarily focuses on managing
risk as its future revenues will be    its underlying production costs to
derived based on contracts or          mitigate coal price volatility as well
agreements with physical off-take      as from time to time entering into
partners at prices that will be        forward sales contracts with the goal of
determined by reference to market      preserving future revenue streams. The
prices of coal at delivery date.       group has not entered into any such
The group’s South African mining       contracts in 2018 and 2017.
operational earnings are significantly The group’s export and domestic sales
dependent on movements in both the     are determined based on the ability to
export and domestic coal price.        deliver the quality of coal required by
The price of export sales is derived   each market and Quattro programme
from a US Dollar-denominated export    quotas, together with the market factors
coal price and therefore the price     set out opposite. Volumes of export
achievable in South African Rands can  sales achieved during the year were
be influenced by movements in exchange primarily dependent on the mine’s
rates and overall global demand and    ability to produce the higher quality of
supply.                                coal required for export as well as
The domestic market coal prices are    allowable quotas under the Quattro
denominated in South African Rand and  programme and overall global demand. The
are primarily dependant on local       volume of domestic market sales achieved
demand and supply.                     during the year were primarily dependant
Longer term both the demand and supply on local demand and supply as well as
of coal in the domestic and global     the mine’s ability to produce the lower
market may be negatively impacted by   overall quality of coal required.
regulatory changes related to climate  The group assesses on an ongoing basis
change and governmental CO2 emission   the impact any regulatory changes
commitments.                           related to climate change and
                                       governmental CO2 emission commitments
                                       may have on the group’s mining
                                       operations and future investment
                                       decisions.


As with many mining operations, the    This risk is managed by engaging
reserve that is mined has the risk of  independent geological experts, referred
not having the qualities and           to in the industry as the “Competent
accessibility expected from geological Person”, to determine the estimated
and environmental analysis. This can   reserves and their technical and
have a negative impact on revenue and  commercial feasibility for extraction.
earnings as the quality and quantity   In addition, management engage Competent
of coal mined and sold by our mining   Persons to assist management in the
operations may be lower than expected. production of detailed life of mine
                                       plans as well as in the monitoring of
                                       actual mining results versus expected
                                       performance and management’s response to
                                       variances. The group continued to engage
                                       an independent Competent Person in the
                                       current year. Refer to page 6 for
                                       details of mining performance.

CURRENCY RISK
The group’s operations are sensitive   Export sales within the group’s South
to currency movements, especially      African operations are derived from a US
those between the South African Rand,  Dollar-denominated export coal price. A
US Dollar and British Pound. These     weakening of the US Dollar can have a
movements can have a negative impact   negative impact on the South African
on the group’s mining operations       Rand prices achievable for coal sold by
revenue as noted above, as well as     the group’s South African mining
operational earnings.                  operations. This in turn can have a
The group is exposed to currency risk  negative impact on the group’s mining
in regard to the Sterling value of     operations revenue as well as
inter-company trading balances with    operational earnings as the group’s
its South African operations. It       mining operating costs are Rand
arises as a result of the              denominated. In order to mitigate this,
retranslation of Rand denominated      the group may enter into forward sales
inter-company trade receivable         contracts in local currencies with the
balances into Sterling that are held   goal of preserving future revenue
within the  and which are payable by streams. The group has not entered into
South African Rand functional currency any such contracts in 2018 and 2017.
subsidiaries.                          Although it is not the group’s policy to
The group is exposed to currency risk  obtain forward contracts to mitigate
in regard to the retranslation of the  foreign exchange risk on inter-company
group’s South African functional       trading balances or on the retranslation
currency net assets to the Sterling    of the group’s South African functional
reporting functional currency of the   currency net assets, management
group. A weakening of the South        regularly review the requirement to do
African Rand against Sterling can have so in light of any increased risk of
a negative impact on the financial     future volatility.
position and net asset values reported Refer to the ‘Financial Review’ for
by the group.                          details of significant currency movement
                                       impacts in the year.

NEW RESERVES AND 
The life of the mine, acquisition of   The work performed in the acquisition
additional reserves, permissions to    and renewal of mining permits as well as
mine (including ongoing and once-off   the maintenance of compliance with
permissions) and new mining            permits includes factors such as
opportunities in           environmental management, health and
generally are contingent on a number   safety, labour laws and Black
of factors outside of the group’s      Empowerment legislation (such as the New
control such as approval by the        Mining Charter); as failure to maintain
, the   appropriate controls and compliance may
 and        in turn result in the withdrawal of the
Forestry and other regulatory or state necessary permissions to mine. The
owned entities.                        management of these regulatory risks and
In addition, the group’s South African performance in the year is noted in the
operations are subject to the          Mining Review on page 6 as well as in
government  with the New the  report on
 coming into force from  page 8 and in this section under the
. Failure to meet existing   headings environmental risk, health &
targets or further regulatory changes  safety risk and labour risk.
to the Mining Charter, could adversely Additionally, in order to mitigate this
affect the mine’s ability to retain    risk, the group strives to provide
its mining rights in .     adequate resources to this area
                                       including the employment of adequate
                                       personnel and the utilisation of third
                                       party consultants competent in
                                       regulatory compliance related to mining
                                       rights and mining permissions.
                                       The group also continues to actively
                                       seek new opportunities to expand it
                                       mining operations in 
                                       through the acquisition of additional
                                       coal reserves and new commercial
                                       arrangements with existing mining right
                                       holders.

POWER SUPPLY RISK
The current utility provider for power The group’s mining operations have to
supply in  is the          date not been affected by power cuts.
government run Eskom. Eskom continues  However the group manages this risk
to undergo capacity problems resulting through regular monitoring of Eskom’s
in power cuts and lack of provision of performance and ongoing ability to meet
power supply to new projects. Any      power requirements. In addition, the
power cuts or lack of provision of     group continues to assess the ability to
power supply to the group’s mining     utilise diesel generators as an
operations may disrupt mining          alternative means of securing power in
production and impact on earnings.     the event of power outages.

FLOODING RISK
The group’s mining operations are      Management monitors water levels on an
susceptible to seasonal flooding which ongoing basis and various projects have
could disrupt mining production and    been completed, including the
impact on earnings.                    construction of additional dams, to
                                       minimise the impact of this risk as far
                                       as possible.

ENVIRONMENTAL RISK
The group’s South African mining         In line with all South African mining
operations are required to adhere to     companies, the management of this risk
local environmental regulations. Any     is based on compliance with the
failure to adhere to local environmental Environment Management Plan. In order
regulations, could adversely affect the  to ensure compliance, the group
mine’s ability to mine under its mining  strives to provide adequate resources
right in .                   to this area including the employment
                                         of personnel and the utilisation of
                                         third party consultants competent in
                                         regulatory compliance related to
                                         environmental management.
                                         To date, Black Wattle is fully
                                         compliant with the regulatory
                                         requirements of the  and Forestry and has an
                                         approved water use licence. Further
                                         details of the group’s Environment
                                         Management Programme are disclosed in
                                         the Sustainable development report on
                                         page 8.

HEALTH & SAFETY RISK
Attached to mining there are inherent    The group has a comprehensive Health
health and safety risks. Any such safety and Safety programme in place to
incidents disrupt operations, and can    mitigate this risk. Management strive
slow or even stop production. In         to create an environment where Health
addition, the group’s South African      and safety of our employees is of the
mining operations are required to adhere utmost importance. Our Health & Safety
to local Health and Safety regulations.  programme provides clear guidance on
                                         the standards our mining operation is
                                         expected to achieve. In addition,
                                         management receive regular updates on
                                         how our mining operations are
                                         performing. Further details of the
                                         group’s Health and Safety Programme
                                         are disclosed in the Sustainable
                                         Development report on page 8.

LABOUR RISK
The group’s mining operations and coal   In order to mitigate this risk, the
washing plant facility are labour        group strives to ensure open and
intensive and unionised. Any labour      transparent dialogue with employees
disputes, strikes or wage negotiations   across all levels. In addition,
may disrupt production and impact        appropriate channels of communication
earnings.                                are provided to all employment unions
                                         at Black Wattle to ensure effective
                                         and early engagement on employment
                                         matters, in particular wage
                                         negotiations and disputes.
                                         Refer to the ‘Employment’ section on
                                         page 12 for further details.

CASHFLOW RISK
Commodity price risk, currency           In order to mitigate this, we seek to
volatility and the uncertainties         balance the high risk of our mining
inherent in mining may result in         operations with a dependable cash flow
favourable or unfavourable cashflows.    from our  property investment
                                         operations which are actively managed
                                         by London & Associated Properties PLC.
                                         Due to the long term nature of the
                                         leases, the effect on cash flows from
                                         property investment activities are
                                         expected to remain stable as long as
                                         tenants remain in operation. Refer to
                                         page 23 for details of the property
                                         portfolio performance.

PROPERTY VALUATION RISK
Fluctuations in property values, which   The group utilises the services of
are reflected in the 
Statement and Balance Sheet, are         whose responsibility is to actively
dependent on an annual valuation of the  manage the portfolio to improve rental
group’s commercial and residential       income and thus enhance the value of
development properties. A fall in      the portfolio over time. In addition,
commercial and residential property can  management regularly monitor banking
have a marked effect on the              covenants and other loan agreement
profitability and the net asset value of obligations as well as the performance
the group as well as impact on covenants of our property assets in relation to
and other loan agreement obligations.    the overall market over time.
The economic performance of the United   Management continue to monitor and
Kingdom, including the potential impact  evaluate the impact of Brexit and the
of the  leaving the        current economic performance of the 
 (“Brexit”) as well as the retail market on the future
current economic performance and trends  performance of the Group’s existing 
of the  retail market, may impact the  portfolio. In addition, the group
level of rental income, yields and       assesses on an ongoing basis the
associated property valuations of the    impact of Brexit and the current
group’s  property assets including its economic performance of the  retail
investments in Joint Ventures.           market on the group’s banking
                                         covenants, loan obligations and future
                                         investment decisions.
                                         Refer to page 23 for details of the
                                         property portfolio performance.MINING RISKMINING PERMISSIONSMining CharterMining CharterUKSouth AfricaSouth AfricaSouth AfricaSouth AfricaSouth AfricaUKUKUnited KingdomUKUKUKUKUKDepartment of Mineral ResourcesDepartment of Water AffairsSustainable DevelopmentDepartment of
                                         Water AffairsConsolidated Income London & Associated Properties PLCEuropean UnionMarch 2019
Key performance indicators                                         2018   2017
The key performance indicators for the group are:                 £’000  £’000

For the group:

Operating profit before depreciation, fair value adjustments and  9,088  5,819
exchange movements (adjusted EBITDA)

EBITDA                                                            8,587  3,734

Profit/(loss) before tax                                          5,959  1,485

For our property investment operations:

Net property valuation (excluding joint ventures)                13,045 13,245

Net property revenue (excluding joint ventures)                   1,232  1,125

For our mining activities:

Operating profit before depreciation, fair value adjustments and  8,206  4,894
exchange movements (adjusted EBITDA)

EBITDA                                                            8,143  2,811
Tonnes Tonnes
                    ‘000   ‘000

Mining production  1,320  1,296
The key performance indicators of the group       Mining Property Other     2018
can be reconciled as follows:                      £’000    £’000 £’000    £’000

Revenue                                           48,666    1,232    47   49,945

Transport and loading cost                       (3,103)        -     -  (3,103)

Mining and washing costs                        (31,340)        -     - (31,340)

Other operating costs excluding depreciation     (6,017)    (394)   (3)  (6,414)

Operating profit before depreciation, fair         8,206      838    44    9,088
value adjustments and exchange movements
(adjusted EBITDA)

Exchange movements                                  (63)        -     -     (63)

Fair value adjustments                                 -    (215)     -    (215)

Losses on investments held at fair value               -        - (171)    (171)
through profit and loss (FVPL)

Operating profit excluding depreciation            8,143      623 (127)    8,639

Share of (loss)/profit and write off’s in joint        -     (52)     -     (52)
venture

EBITDA                                             8,143      571 (127)    8,587

Net interest movement                                                      (515)

Depreciation                                                             (2,113)

Profit/(loss) before tax                                                   5,959
The key performance indicators of the group       Mining Property Other     2017
can be reconciled as follows:                      £’000    £’000 £’000    £’000
                                                Restated                Restated

Revenue                                           39,191    1,125    34   40,350

Transport and loading cost                       (2,891)        -     -  (2,891)

Mining and washing costs                        (25,664)        -     - (25,664)

Other operating costs excluding depreciation     (5,742)    (228)   (6)  (5,976)

Operating profit before depreciation, fair         4,894      897    28    5,819
value adjustments and exchange movements
(adjusted EBITDA)

Exchange movements                                 (256)        -     -    (256)

Fair value adjustments                                 -     (13)     -     (13)

Gain on disposal of other investments                  -        -     3        3

Operating profit excluding depreciation            4,638      884    31    5,553

Share of (loss)/profit and write off’s in joint  (1,827)        8     -  (1,819)
venture

EBITDA                                             2,811      892    31    3,734

Net interest movement                                                      (459)

Depreciation                                                             (1,790)

Profit/(loss) before tax                                                   1,485
Performance                                South African Rand     UK Sterling
The key performance indicators of the
group’s South African mining operations         2018      2017     2018     2017
are presented in South African Rand and UK     R’000     R’000    £’000    £’000
Sterling as follows:                                  Restated          Restated

Revenue                                      852,650   672,277   48,666   39,191

Transport and loading costs                 (54,366)  (49,586)  (3,103)  (2,891)

Mining and washing costs                   (549,090) (440,241) (31,340) (25,664)

Operating profit before other operating      249,194   182,450   14,223   10,636
costs and depreciation

Other operating costs (excluding                                (6,017)  (5,742)
depreciation)

Operating profit before depreciation, fair                        8,206    4,894
value adjustments and exchange movements
(adjusted EBITDA)

Exchange movements                                                 (63)    (256)

Share of loss in joint ventures                                       -  (1,827)

EBITDA                                                            8,143    2,811
2018  2017
                             ‘000  ‘000

Mining production in tonnes 1,320 1,296
2018  2017
                                                                 R     R

Net Revenue per tonne of mining production                     605   480

Mining and washing costs per tonne of mining production      (416) (340)

Operating profit per tonne of mining production before other   189   140
operating costs and depreciation
Domestic Export  2018 Domestic Export  2017
                                    ‘000   ‘000  ‘000     ‘000   ‘000  ‘000

Quantity of coal sold in tonnes    1,292    174 1,466    1,267    155 1,422
Domestic  Export    2018 Domestic  Export    2017
                                 R’000   R’000   R’000    R’000   R’000   R’000

Total Net Revenue              645,386 152,898 798,284  502,818 119,873 622,691

                                     R       R       R        R       R       R

Net Revenue per tonne of coal      500     879     545      397     773     438
sold
The following table summarises the main components of   Year ended  Year ended
the consolidated cashflow for the year:                31 December 31 December
                                                              2018        2017
                                                             £’000       £’000

Cash flow generated from operations before working           9,112       5,819
capital and other items

Cash flow from operating activities                          4,767       7,270

Cash flow from investing activities                        (3,373)     (1,936)

Cash flow from financing activities                            200       (429)

Net (decrease) / increase in cash and cash equivalents       1,594       4,905

Cash and cash equivalents at 1 January                       4,065       (890)

Exchange adjustment                                             27          50

Cash and cash equivalents at 31 December                     5,686       4,065

Cash and cash equivalents at 31 December comprise:

Cash and cash equivalents as presented in the balance        9,221       5,327
sheet

Bank overdrafts (secured)                                  (3,535)     (1,262)

                                                             5,686       4,065
2018     2017     2016     2015     2014
                                       £’000    £’000    £’000    £’000    £’000
                                             Restated Restated Restated Restated

Consolidated income statement items

Revenue                               49,945   40,350   24,923   27,603   28,716

Operating profit/(loss)                6,526    3,763      637      150    1,364

Profit/(loss) before tax               5,959    1,485      346    (147)    1,568

Trading profit/(loss) before tax       6,397    3,317     (74)    (188)    1,157

Revaluation and impairment             (438)  (1,832)      420       41      411
(loss)/profit before tax

EBITDA                                 8,587    3,734    2,415    1,365    4,609

Operating profit before depreciation,  9,088    5,819    1,516    1,717    4,276
fair value adjustments and exchange
movements (adjusted EBITDA)

Consolidated balance sheet items

Investment properties                 13,045   13,245   13,245   12,800   11,575

Fixed asset investments                1,357      925    2,703    2,112    4,090

                                      14,402   14,170   15,948   14,912   15,665

Investments held at fair value           887    1,050      781      594      796

                                      15,289   15,220   16,729   15,506   16,461

Other assets less liabilities less     4,280    1,922     (72)    (196)      854
non-controlling interests

Total equity attributable to equity   19,569   17,142   16,657   15,310   17,315
shareholders

Net assets per ordinary share         183.3p   160.6p   156.0p   143.4p   162.2p
(attributable)

Dividend per share                     6.00p    5.00p    4.00p    4.00p    4.00p
Annual General Meeting

     Payment of final and special dividend for 2018 (if approved)

Late  Announcement of half-year results to 

Late   Announcement of results for year ending11 June 201926 July 2019August 201930 June 2019April 202031 December 2019
Sir  –                 330,117 shares representing 3.09 per cent.
                                     of the issued capital.

A R Heller –                         785,012 shares representing 7.35 per cent.
                                     of the issued capital.

 – 1,946,154 shares representing 18.23 per
                                     cent. of the issued share capital.

 –                       350,000 shares representing 3.28 per cent.
                                     of the issued share capital.Michael HellerJames HyslopCavendish Asset Management Limited
Meetings Meetings Attended
                                              held

Sir Michael Heller Board                         5                 5
                   Nomination committee          1                 1
                   Audit committee               2                 2

A R Heller         Board                         5                 5
                   Audit committee               2                 2

G J Casey          Board                         5                 5
                   Audit committee               2                 2

R J Grobler        Board                         5                 1

C A Joll           Board                         5                 5
                   Audit committee               2                 2
                   Nomination committee          1                 1
                   Remuneration committee        1                 1

J A Sibbald        Board                         5                 5
                   Audit committee               2                 2
                   Nomination committee          1                 1
                   Remuneration committee        1                 1
Salaries Bonuses Benefits Pension   Total   Share Total
                        and Fees   £’000    £’000   £’000  before options 2018
                           £’000                            Share   £’000 £’000
                                                          options
                                                            £’000

Executive Directors

Sir Michael Heller            82     200        2       -     284       -   284

A R Heller                   495     500       71       5   1,071       2 1,073

G J Casey                    143     200       28      20     391       2   393

R Grobler                    201     137       27      14     379       -   379

Non–Executive Directors

C A Joll*                     33       -        -       -      33       -    33

J A Sibbald*                   2       -        3       -       5       -     5

Total                        956   1,037      131      39   2,163       4 2,167
Salaries Bonuses Benefits Pension   Total   Share Total
                        and Fees   £’000    £’000   £’000  before options 2017
                           £’000                            Share   £’000 £’000
                                                          options
                                                            £’000

Executive Directors

Sir Michael Heller            75       -        -       -      75       -    75

A R Heller                   450     350       66      32     898       -   898

G J Casey                    133     125       14      18     290       -   290

R Grobler                    188     122       16      11     337       -   337

Non–Executive Directors

C A Joll*                     30       -        -       -      30       -    30

J A Sibbald*                   2       -        3       -       5       -     5

Total                        878     597       99      61   1,635       - 1,635
Summary of directors’ terms Date of contract Unexpired term Notice period

Executive directors

Sir Michael 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
Number of share
                     options

                 Option 1 January      Options       31 Exercisable Exercisable
                 price*      2018    granted/( December        from          to
                                  Surrendered)     2018
                                            in
                                          2018

The 2010 Scheme

G J Casey       202.05p    80,000     (80,000)        -  31/08/2013  30/08/2020

The 2012 Scheme

A R Heller       87.01p   150,000            -  150,000  18/09/2015  17/09/2025

A R Heller       73.50p         -      150,000  150,000  06/02/2018  06/02/2028

G J Casey        87.01p   150,000            -  150,000  18/09/2015  17/09/2025

G J Casey        73.50p         -      230,000  230,000  06/02/2018  06/02/2028
Beneficial        Non-beneficial

                   31.12.2018 1.1.2018 31.12.2018 1.1.2018

Sir Michael Heller    148,783  148,783    181,334  181,334

A R Heller            785,012  785,012          -        -

C A Joll                    -        -          -        -

J A Sibbald                 -        -          -        -

R J Grobler                 -        -          -        -

G J Casey              40,000   40,000          -        -
Year Managing        Managing Director       Annual   Long-term incentive
     Director   Single total figure of        bonus vesting rates against
                          remuneration       payout  maximum opportunity*
                                 £’000      against                     %
                                            maximum
                                       opportunity*
                                                  %

2018 A R Heller                  1,073          34%                   N/A

2017 A R Heller                    898          25%                   N/A

2016 A R Heller                    850          22%                   N/A

2015 A R Heller                    912          22%                   N/A

2014 A R Heller                    862          22%                   N/A

2013 A R Heller                    614          N/A                   N/A

2012 A R Heller                    721          N/A                   N/A

2011 A R Heller                    626          N/A                   N/A

2010 A R Heller                    568          N/A                   N/A

2009 A R Heller                    817          N/A                   N/A
Managing Director  UK based employees
                  £’000              £’000

            2018 2017 % change 2018 2017 % change

Base salary  495  450      10%  225  208       8%

Benefits      71   66       8%   30   14     114%

Bonuses      500  350      43%  400  125     220%
2018  2017
                             £’000 £’000

Employee remuneration        7,335 6,396

Distribution to shareholders   641   534
% of votes % of votes No of votes
                                                     for    against    withheld

Resolution to approve the Remuneration Report     70.72%     29.28%           -
(6 June 2018)

Resolution to approve the Remuneration Policy     74.77%     25.16%           -
(7 June 2017)
Element       Purpose         Policy           Operation        Opportunity and
                                                                performance
                                                                conditions

Executive directors

Base salary   To recognise:   Considered by   Reviewed annually No individual
              Skills          remuneration    Paid monthly in   director will be
              Responsibility  committee on    cash              awarded a base
              Accountability  appointment.                      salary in excess
              Experience      Set at a level                    of £700,000 per
              Value           considered                        annum.
                              appropriate to                    No specific
                              attract, retain                   performance
                              motivate and                      conditions are
                              reward the                        attached to base
                              right                             salaries.
                              individuals.

Pension       To provide      Company         The contribution  Company
              competitive     contribution    payable by the    contribution
              retirement      offered at up   company is        offered at up to
              benefits        to 10% of base  included in the   10% of base
                              salary as part  director’s        salary as part
                              of overall      contract of       of overall
                              remuneration    employment.       remuneration
                              package.        Paid into money   package.
                                              purchase schemes  No specific
                                                                performance
                                                                conditions are
                                                                attached to
                                                                pension
                                                                contributions

Benefits      To provide a    Contractual     The committee     The costs
              competitive     benefits can    retains the       associated with
              benefits        include but are discretion to     benefits offered
              package         not limited to: approve changes   are closely
                              Car or car      in contractual    controlled and
                              allowance       benefits in       reviewed on an
                              Group health    exceptional       annual basis.
                              cover           circumstances or  No director will
                              Death in        where factors     receive benefits
                              service cover   outside the       of a value in
                              Permanent       control of the    excess of 30% of
                              health          Group lead to     his base salary.
                              insurance       increased costs   No specific
                                              (e.g. medical     performance
                                              inflation)        conditions are
                                                                attached to
                                                                contractual
                                                                benefits.
                                                                The value of
                                                                benefits for
                                                                each director
                                                                for the year
                                                                ended
                                                                31 December 2018
                                                                is shown in the
                                                                table on page
                                                                38.

Annual Bonus  To reward and   In assessing    The remuneration  The current
              incentivise     the performance committee         maximum bonus
                              of the          determines the    opportunity will
                              executive team, level of bonus on not exceed 200%
                              and in          an annual basis   of base salary
                              particular to   applying such     in any one year,
                              determine       performance       but the
                              whether bonuses conditions and    remuneration
                              are merited the performance       committee
                              remuneration    measures as it    reserves the
                              committee takes considers         power to award
                              into account    appropriate       up to 300% in an
                              the overall                       exceptional
                              performance of                    year.
                              the business.                     Performance
                              Bonuses are                       conditions will
                              generally                         be assessed on
                              offered in cash                   an annual basis.
                                                                The performance
                                                                measures applied
                                                                may be
                                                                financial,
                                                                non-financial,
                                                                corporate,
                                                                divisional or
                                                                individual and
                                                                in such
                                                                proportion as
                                                                the remuneration
                                                                committee
                                                                considers
                                                                appropriate

Share Options To provide      Granted under   Offered at        Entitlement to
              executive       existing        appropriate times share options is
              directors with  schemes (see    by the            not subject to
              a long-term     page 39)        remuneration      any specific
              interest in the                 committee         performance
              company                                           conditions.
                                                                Share options
                                                                will be offered
                                                                by the
                                                                remuneration
                                                                committee as
                                                                appropriate.
                                                                The aggregate
                                                                number of shares
                                                                over which
                                                                options may be
                                                                granted under
                                                                all of the
                                                                company’s option
                                                                schemes
                                                                (including any
                                                                options and
                                                                awards granted
                                                                under the
                                                                company’s
                                                                employee share
                                                                plans) in any
                                                                period of ten
                                                                years, will not
                                                                exceed, at the
                                                                time of grant,
                                                                10% of the
                                                                ordinary share
                                                                capital of the
                                                                company from
                                                                time to time. In
                                                                determining the
                                                                limits no
                                                                account shall be
                                                                taken of any
                                                                shares where the
                                                                right to acquire
                                                                the shares has
                                                                been released,
                                                                lapsed or has
                                                                otherwise become
                                                                incapable of
                                                                exercise.
                                                                The company
                                                                currently has
                                                                two Share Option
                                                                Schemes (see
                                                                page 39). The
                                                                performance
                                                                conditions for
                                                                the 2010 scheme
                                                                requires growth
                                                                in net assets
                                                                over a three
                                                                year period to
                                                                exceed the
                                                                growth in the
                                                                retail price
                                                                index by a scale
                                                                of percentages.
                                                                For the 2012
                                                                scheme the
                                                                remuneration
                                                                committee has
                                                                the ability to
                                                                impose
                                                                performance
                                                                criteria in
                                                                respect of any
                                                                new share
                                                                options granted,
                                                                however there is
                                                                no requirement
                                                                to do so. There
                                                                are no
                                                                performance
                                                                conditions
                                                                attached to the
                                                                options already
                                                                issued under the
                                                                2012 scheme.

Non-executive directors

Base salary   To recognise:   Considered by    Reviewed         No individual
              Skills          the board on     annually         director will be
              Experience      appointment.                      awarded a base
              Value           Set at a level                    salary in excess
                              considered                        of £40,000 per
                              appropriate to                    annum.
                              attract, retain                   No specific
                              and motivate the                  performance
                              individual.                       conditions are
                              Experience and                    attached to base
                              time required                     salaries.
                              for the role are
                              considered on
                              appointment.


Pension                       No pension
                              offered

Benefits                      No benefits      The committee    The costs
                              offered except   retains the      associated with
                              to one           discretion to    the benefit
                              non-executive    approve changes  offered is
                              director who is  in contractual   closely
                              eligible for     benefits in      controlled and
                              health           exceptional      reviewed on an
                              cover (see       circumstances or annual basis.
                              annual           where factors    No director will
                              remuneration     outside the      receive benefits
                              report           control of the   of a value in
                              page 38)         Group lead to    excess of 30% of
                                               increased costs  his base salary.
                                               (e.g. medical    No specific
                                               inflation)       performance
                                                                conditions are
                                                                attached to
                                                                contractual
                                                                benefits.

Share Options                 Non-executive
                              directors do not
                              participate in
                              the share option
                              schemes
£’000

Freehold                                                     10,350

Leasehold                                                     2,695

                                                             13,045

                                                 
 Regulated byLeedsCarter Towler28 January 2019Royal Institute of Chartered Surveyors
--  the financial statements give a true and fair view of the state of the
        Group’s and of the Parent Company’s affairs as at  and
        of the Group’s profit for the year then ended;
    --  the Group financial statements have been properly prepared in accordance
        with IFRSs as adopted by the ;
    --  the Parent Company financial statements have been properly prepared in
        accordance with United Kingdom Generally Accepted Accounting Practice;
        and
    --  the financial statements have been prepared in accordance with the
        requirements of the Companies Act 2006; and, as regards the Group
        financial statements, Article 4 of the IAS Regulation.31 December 2018European Union
--  the directors’ use of the going concern basis of accounting in the
        preparation of the financial statements is not appropriate; or
    --  the directors have not disclosed in the financial statements any
        identified material uncertainties that may cast significant doubt about
        the Group’s or the Parent Company’s ability to continue to adopt the
        going concern basis of accounting for a period of at least twelve months
        from the date when the financial statements are authorised for issue.
KEY AUDIT MATTER                        HOW THE MATTER WAS ADDRESSED IN OUR
                                        AUDIT

Property Valuation.

The Group holds investment property at  We obtained an understanding of
fair value (see note 11 and Key         management’s approach to the valuation
judgements and estimates) together with of investment properties.
further investment property held at
fair value in the Group’s Dragon Retail We reviewed the independent external
Joint Venture (note 14). The assessment valuation reports and confirmed their
of fair value for the property          consistency with the valuations
portfolio requires significant          presented in the financial statements.
judgement and estimates by the          We met with the Group’s independent
Directors, including assessment of      external valuers, who valued all of the
independent third party valuations      Group’s investment properties, to
obtained for the portfolio.             understand the assumptions and
                                        methodologies used in valuing these
Each valuation requires consideration   properties, the market evidence
of the individual nature of the         supporting the valuation assumptions and
property, its location, its cash flows  the valuation movements in the period.
and comparable market transactions. The
valuation of these properties requires  We assessed the competency, independence
assessment of the market yield as well  and objectivity of the independent
as consideration of the current rental  external valuer which included making
agreements.                             inquiries regarding interests and
                                        relationships that may have created a
Any significant input inaccuracies or   threat to the valuer’s objectivity. We
unreasonable bases used in these        have reviewed the scope of the valuation
judgements (such as in respect of       and confirmed that it is in accordance
estimated rental value and net initial  with the Statements of Asset Valuation
yield applied) could result in a        and Guidance Notes published by The
material misstatement.                  .
There is also an inherent risk that
management may influence valuation      We used our knowledge and experience to
judgments.                              evaluate and challenge the valuation
                                        assumptions, methodologies and the
Given these factors, this area was      inputs used. This included establishing
considered to be a significant focus    our own range of expectations for the
for our audit given the subjective      valuation of investment property based
nature of certain assumptions inherent  on externally available metrics.
in each valuation.
                                        We agreed a sample of key observable
                                        valuation inputs supplied to and used by
                                        the external valuer and Directors to
                                        information audited by us, where
                                        applicable, or supporting market
                                        documentation.

Key observations

We found the valuations determined by the Group for its investment properties in
note 11 and investment properties included within the Dragon retail Joint
Venture in note 14 to be consistent with the independent external valuation
reports.

Revenue recognition

The group generated revenues from coal  We assessed the group’s revenue
sales, rental income and service charge recognition policy for domestic and
income (See note 2 and Group Accounting export coal sales for compliance with
Policies).                              the relevant accounting standard. In
                                        doing so, we reviewed sales contracts
We considered it appropriate, noting    and terms with material customers.
that this was the first year of
application of IFRS 15, to assess the   We tested controls over domestic coal
appropriateness of the group’s revenue  sales focused on the authorisation and
recognition policies and their          recording of revenue. We performed tests
application for compliance with IFRS.   of detail verifying a sample of domestic
In addition, we considered there to be  revenue to supporting documentation.
a risk that coal sales revenue is
recorded in the incorrect period.       We obtained third party confirmations
                                        which we confirmed to amounts recorded
As reported under the group accounting  in the ledgers for export sales and
policies, during the course of the      confirmed a sample of sales to contract
audit a material error was identified   terms.
in respect of the group’s accounting
treatment of transport costs to deliver We tested the recording of revenue
export coal to the export terminal      around the year end and assessed the
under a specific agreement. Such        revenue recognition point for
transport costs were previously         consistency with the group’s revenue
incorrectly recorded as a deduction     recognition policy, customer terms and
against revenue. Management have        supporting documents regarding despatch
revised the accounting treatment in     / delivery as applicable.
2018 and restated the prior year
revenue and operating costs             We reviewed credit notes around the year
accordingly.                            end for indications that revenue had
                                        been inappropriately recorded.
The impact on FY 2018 is to increase
revenue and operating costs by £3.1m.   In respect of the change in accounting
The impact of the prior year            treatment for transport costs and
restatement was to increase revenue and associated restatement of the prior year
operating costs by £2.9m. There is no   revenues and operating costs, we have
profit or net assets effect of the      reviewed the relevant contract and
restatement.                            assessed the appropriateness of the
                                        accounting treatment under relevant
                                        accounting standards for the current and
                                        prior period. In doing so, we consulted
                                        with our financial reporting technical
                                        experts.

                                        We have agreed a sample of the costs to
                                        supporting documentation and reviewed
                                        the general ledgers in detail to check
                                        the completeness and accuracy of the
                                        adjustments in the current and prior
                                        period.

Key observations

We found the Group’s revenue recognition policies to be compliant with IFRS and
found that, subsequent to the restatement and adjustment, revenue is recorded in
line with the Group’s stated policies.Royal Institution of Chartered
                                        Surveyors
Materiality                FY2018                     FY2017

Materiality for the        £300,000                   £300,000
Financial Statements as a
whole

Performance Materiality    £26,000 to £188,000        £24,000 to £170,000
levels used for the audits
of the significant
components of the audit

Materiality for the Parent £220,000                   £225,000
Company

Performance materiality    £165,000                   £170,000
for the Parent Company

Audit scope coverage       100% of total assets, 100% 100% of total assets, 100%
                           of revenue and 100% of     of revenue and 100% of
                           profit before tax          profit before tax
--   reporting instructions were sent to the component
        auditor, which included the significant areas to be covered by the audit
        (including areas that were considered to be key audit matters as
        detailed above), and set out the information required to be reported to
        the Group audit team.
    --  The audit partner visited the Group’s mining operation to update our
        understanding of the operations and meet with component management.
    --  We performed a review of the component audit files and held meetings
        with the component audit team during the planning and completion phases
        of their audit.
    --  The Group audit team was actively involved in the direction of the
        audits performed by the component auditors for Group reporting purposes,
        along with the consideration of findings and determination of
        conclusions drawn. We performed our own additional procedures in respect
        of the significant risk areas that represented Key Audit Matters in
        addition to the procedures performed by the component auditor.
    --  The remaining non-significant companies within the Group were
        principally subject to analytical review procedures.Detailed Group
--  adequate accounting records have not been kept by the Parent Company, or
        returns adequate for our audit have not been received from branches not
        visited by us; or
    --  the Parent Company financial statements and the part of the Directors’
        remuneration report to be audited are not in agreement with the
        accounting records and returns; or
    --  certain disclosures of Directors’ remuneration specified by law are not
        made; or
    --  we have not received all the information and explanations we require for
        our audit.
Notes     2018         2018     2018     2017         2017     2017
                       Trading Revaluations    Total  Trading Revaluations    Total
                         £’000                 £’000    £’000          and    £’000
                                        and          Restated   impairment Restated
                                 impairment                          £’000
                                      £’000

Group revenue       2   49,945            -   49,945   40,350            -   40,350

Operating costs     3 (40,857)            - (40,857) (34,531)            - (34,531)

Operating                9,088            -    9,088    5,819            -    5,819
profit before
depreciation,
fair value
adjustments and
exchange
movements

Depreciation        3  (2,113)            -  (2,113)  (1,790)            -  (1,790)

Operating           1    6,975            -    6,975    4,029            -    4,029
profit before
fair value
adjustments and
exchange
movements

Exchange losses           (63)            -     (63)    (256)            -    (256)

Decrease in         4        -        (215)    (215)        -         (13)     (13)
value of
investment
properties

Gain on                      -            -        -        3            -        3
disposal of
other
investments
available for
sale

Loss on                      -        (171)    (171)        -            -        -
investments
held at fair
value

Operating           1    6,912        (386)    6,526    3,776         (13)    3,763
profit/(loss)

Share of           13        -         (52)     (52)        -            8        8
(loss)/profit
in joint
ventures

Write-off of       13        -            -        -        -      (1,827)  (1,827)
investment in
joint venture

Profit/(loss)            6,912        (438)    6,474    3,776      (1,832)    1,944
before interest
and taxation

Interest                   126            -      126      205            -      205
receivable

Interest            7    (641)            -    (641)    (664)            -    (664)
payable

Profit/(loss)       5    6,397        (438)    5,959    3,317      (1,832)    1,485
before tax

Taxation            8  (1,971)           55  (1,916)    (588)           24    (564)

Profit/(loss)            4,426        (383)    4,043    2,729      (1,808)      921
for the year


Attributable
to:

Equity holders           3,697        (383)    3,314    2,557      (1,808)      749
of the company

Non-controlling    27      729            -      729      172            -      172
interest

Profit/(loss)            4,426        (383)    4,043    2,729      (1,808)      921
for the year

Profit per         10                         31.05p                          7.02p
share – basic

Profit per         10                         30.85p                          7.02p
share – diluted
2018  2017
                                                                 £’000 £’000

Profit for the year                                              4,043   921

Other comprehensive income/(expense):

Items that may be subsequently recycled to the income statement:

Exchange differences on translation of foreign operations        (430)    91

Gain on available for sale investments                               -   103

Taxation                                                             -  (20)

Other comprehensive income for the year net of tax               (430)   174

Total comprehensive income for the year net of tax               3,613 1,095

Attributable to:

Equity shareholders                                              2,937   912

Non-controlling interest                                           676   183

                                                                 3,613 1,095
Notes     2018     2017
                                                                  £’000    £’000

Assets

Non-current assets

Value of investment properties                              11   13,045   13,245

Fair value of head lease                                    31      185      152

Investment properties                                            13,230   13,397

Mining reserves, plant and equipment                        12    8,531    8,613

Investments in joint ventures accounted for using equity    13    1,322      874
method

Other investments at fair value through profit and loss     13       35       51
(“FVPL”) (previously classified as other investments
available for sale)

Total non-current assets                                         23,118   22,935

Current assets

Inventories                                                 16    1,511      828

Trade and other receivables                                 17    6,837    6,417

Corporation tax recoverable                                          19        -

Investments in listed securities held at FVPL               18      887    1,050
(previously classified as Available for sale
investments)

Cash and cash equivalents                                         9,221    5,327

Total current assets                                             18,475   13,622

Total assets                                                     41,593   36,557

Liabilities

Current liabilities

Borrowings                                                  20  (9,580)  (1,288)

Trade and other payables                                    19  (7,257)  (7,381)

Current tax liabilities                                            (92)    (356)

Total current liabilities                                      (16,929)  (9,025)

Non-current liabilities

Borrowings                                                  20    (547)  (5,872)

Provision for rehabilitation                                21  (1,571)  (1,349)

Finance lease liabilities                                   31    (185)    (152)

Deferred tax liabilities                                    23  (2,226)  (2,485)

Total non-current liabilities                                   (4,529)  (9,858)

Total liabilities                                              (21,458) (18,883)

Net assets                                                       20,135   17,674

Equity

Share capital                                               24    1,068    1,068

Share premium account                                               258      258

Translation reserve                                             (2,048)  (1,671)

Available for sale reserve                                            -      143

Other reserves                                              25      707      683

Retained earnings                                                19,584   16,661

Total equity attributable to equity shareholders                 19,569   17,142

Non-controlling interest                                    27      566      532

Total equity                                                     20,135   17,674
Share   Share Translation Available-    Other Retained   Total        Non-   Total
                 capital Premium    reserves   for-sale reserves earnings   £’000 controlling  equity
                   £’000   £’000       £’000   reserves    £’000    £’000                       £’000
                                                  £’000                              interest
                                                                                        £’000

Balance at 1       1,068     258     (1,751)         60      683   16,339  16,657         349  17,006
January 2017

Revaluation and        -       -           -          -        -  (1,808) (1,808)           - (1,808)
impairments

Trading                -       -           -          -        -    2,557   2,557         172   2,729

Profit for the         -       -           -          -        -      749     749         172     921
year

Other                  -       -          80         83        -        -     163          11     174
comprehensive
income

Total                  -       -          80         83        -      749     912         183   1,095
comprehensive
income for the
year

Dividend (note         -       -           -          -        -    (427)   (427)           -   (427)
9)

Balance at 31      1,068     258     (1,671)        143      683   16,661  17,142         532  17,674
December 2017

IFRS 9                 -       -           -      (143)        -      143       -           -       -
Reclassification

Balance at 1       1,068     258     (1,671)          -      683   16,804  17,142         532  17,674
January 2018

Revaluation and        -       -           -          -        -    (383)   (383)           -   (383)
impairments

Trading                -       -           -          -        -    3,697   3,697         729   4,426

Profit for the         -       -           -          -        -    3,314   3,314         729   4,043
year

Other                  -       -       (377)          -        -        -   (377)        (53)   (430)
comprehensive
expense

Total                  -       -       (377)          -        -    3,314   2,937         676   3,613
comprehensive
income for the
year

Dividend (note         -       -           -          -        -    (534)   (534)       (642) (1,176)
9)

Share options          -       -           -          -       24        -      24           -      24
charge

Balance at 31      1,068     258     (2,048)          -      707   19,584  19,569         566  20,135
December 2018
Year ended  Year ended
                                                         31 December 31 December
                                                                2018        2017
                                                               £’000       £’000

Cash flows from operating activities

Operating profit                                               6,526       3,763

Adjustments for:

Depreciation                                                   2,113       1,790

Share based payments                                              24           -

Unrealised loss/(gain) on investment properties                  215          13

Realised gain on disposal of other investments available           -         (3)
for sale

Loss on investments held at FVPL                                 171           -

Exchange adjustments                                              63         256

Cash flow before working capital                               9,112       5,819

Change in inventories                                          (797)         896

Change in trade and other receivables                          (894)         919

Change in trade and other payables                               100          69

Cash generated from operations                                 7,521       7,703

Interest received                                                126         124

Interest paid                                                  (598)       (546)

Income tax paid                                              (2,282)        (11)

Cash flow from operating activities                            4,767       7,270

Cash flows from investing activities

Acquisition of reserves, property, plant and equipment       (2,881)     (1,754)

Investment in joint venture                                    (500)           -

Disposal of other investments                                      8          14

Acquisition of other investments                                   -       (196)

Cash flow from investing activities                          (3,373)     (1,936)

Cash flows from financing activities

Borrowings drawn                                                 753          23

Borrowings repaid                                               (19)        (25)

Equity dividends paid                                          (534)       (427)

Cash flow from financing activities                              200       (429)

Net increase in cash and cash equivalents                      1,594       4,905

Cash and cash equivalents at 1 January                         4,065       (890)

Exchange adjustment                                               27          50

Cash and cash equivalents at 31 December                       5,686       4,065

Cash and cash equivalents at 31 December comprise:

Cash and cash equivalents as presented in the balance          9,221       5,327
sheet

Bank overdrafts (secured)                                    (3,535)     (1,262)

                                                               5,686       4,065
£1 Sterling:    £1 Sterling:
                    Rand           Dollar

                  2018    2017   2018    2017

Year-end rate  18.3723 16.6686 1.2690 1.35028

Annual average 17.5205 17.1540 1.3096 1.29174
Mining equipment 5 – 10 per cent per annum, but shorter of its useful life or
                 the life of the mine

Motor            25 – 33 per cent per annum
vehicles

Office equipment 10 – 33 per cent per annum
2018

Business analysis                                 Mining Property Other   Total
                                                   £’000    £’000 £’000    £’000

Significant revenue customer A                    34,112        -     -   34,112

Significant revenue customer B                    11,557        -     -   11,557

Significant revenue customer C                     1,040        -     -    1,040

Other revenue                                      1,957    1,232    47    3,236

Segment revenue                                   48,666    1,232    47   49,945

Operating (loss)/profit before fair value          6,093      838    44    6,975
adjustments & exchange movements

Revaluation of investments & exchange movements     (63)    (215) (171)    (449)

Operating profit and segment result                6,030      623 (127)    6,526

Segment assets                                    15,809   14,333   906   31,048

Unallocated assets

– Non-current assets                                                           2

– Cash & cash equivalents                                                  9,221

Total assets excluding investment in joint                                40,271
ventures and assets held for sale

Segment liabilities                              (8,729)  (2,392) (210) (11,331)

Borrowings                                       (4,287)  (5,840)     - (10,127)

Total liabilities                               (13,016)  (8,232) (210) (21,458)

Net assets                                                                18,813

Non segmental assets

– Investment in joint ventures                                             1,322

Net assets as per balance sheet                                           20,135
Geographic analysis                         United  South  Total
                                           Kingdom   £’000
                                             £’000  £’000

Revenue                                      1,279 48,666 49,945

Operating profit/(loss) and segment result     441  6,085  6,526

Non-current assets excluding investments    13,231  8,530 21,761

Total net assets                            15,567  4,568 20,135

Capital expenditure                             17  2,864  2,881Africa
2017

Business analysis                                 Mining Property Other   Total
                                                   £’000    £’000 £’000    £’000
                                                Restated                Restated

Significant revenue customer A                    27,528        -     -   27,528

Significant revenue customer B                    10,117        -     -   10,117

Significant revenue customer C                       412        -     -      412

Other revenue                                      1,134    1,125    34    2,293

Segment revenue                                   39,191    1,125    34   40,350

Operating (loss)/profit before fair value          3,104      897    28    4,029
adjustments & exchange movements

Revaluation of investments & exchange movements    (256)     (13)     3    (266)

Operating profit and segment result                2,848      884    31    3,763

Segment assets                                    13,500   13,803 3,050   30,353

Unallocated assets

– Non-current assets                                                           3

– Cash & cash equivalents                                                  5,327

Total assets excluding investment in joint                                35,683
ventures and assets held for sale

Segment liabilities                              (9,238)  (2,270) (214) (11,722)

Borrowings                                       (1,329)  (5,832)     -  (7,161)

Total liabilities                               (10,567)  (8,102) (214) (18,883)

Net assets                                                                16,800

Non segmental assets

– Investment in joint ventures                                               874

Net assets as per balance sheet                                           17,674
Geographic analysis                         United    South    Total
                                           Kingdom   Africa    £’000
                                             £’000    £’000 Restated
                                                   Restated

Revenue                                      1,159   39,191   40,350

Operating profit/(loss) and segment result     854    2,909    3,763

Non-current assets excluding investments    13,400    8,610   22,010

Total net assets                            13,416    4,258   17,674

Capital expenditure                             13    1,741    1,754
2018     2017
                                          £’000    £’000
                                                Restated

Revenue from contracts with customers:

Coal Sales                               48,666   39,191

Service charges recoverable from tenants    137        -

Other:

Rental income                             1,095    1,125

Other revenue                                47       34

Revenue                                  49,945   40,350
2018     2017
                                £’000    £’000
                                      Restated

Mining                         34,443   28,555

Property                          338      151

Cost of sales                  34,781   28,706

Administration                  8,189    7,615

Operating costs                42,970   36,321

The direct property costs are:

Ground rent                        11        8

Direct property expense           297      130

Bad debts                          30       13

                                  338      151
2018  2017
                                                                    £’000 £’000

Investment (deficit)/surplus                                        (248)    16

Gain/(Loss) on valuation movement in respect of head lease payments    33  (29)

Loss on revaluation of investment properties                        (215)  (13)
2018  2017
                                                                     £’000 £’000

Staff costs (see note 29)                                            7,335 6,396

Depreciation                                                         2,113 1,790

Exchange loss                                                           63   256

Fees payable to the company’s auditor for the audit of the company’s    56    41
annual accounts

Fees payable to the company’s auditor and its associates (2017:
affiliate) for other services:

The audit of the company’s subsidiaries pursuant to legislation         22    10

Audit related services                                                   1     1

Non-audit related services                                               6     1
2018  2017
                                  £’000 £’000

On bank overdrafts and bank loans   539   443

Unwinding of discount                43    92

Other interest payable               59   129

Interest payable                    641   664
2018  2017
                                                           £’000 £’000

(a) Based on the results for the year:

Current tax - UK                                               -   231

Current tax - Overseas                                     2,026   136

Corporation tax - adjustment in respect of prior year – UK  (19)   (5)

Current tax                                                2,007   362

Deferred tax                                                (91)   202

Total tax in income statement charge                       1,916   564
Profit on ordinary activities before taxation                 5,959 1,485

Tax on profit on ordinary activities at 19.00% (2017: 19.25%) 1,132   286

Effects of:

Expenses not deductible for tax purposes                         56   107

Adjustment to tax rate                                          623   201

Other differences                                               124  (27)

Adjustment in respect of prior years                           (19)   (3)

Total tax in income statement (credit) / charge               1,916   564
Corporation tax                          -   231

Adjustment in respect of prior years  (19)   (5)

Current tax                           (19)   226

Deferred tax                         (175) (197)

                                     (194)    29

Overseas tax included in above:

Current tax                          2,026   136

Deferred tax                            84   399

                                     2,110   535
2018  2018       2017  2017
                                               Per share £’000 Per share £’000

Dividends paid during the year relating to the     5.00p   534     4.00p   427
prior period

Dividends relating to the current period:

Interim dividend for 2018 paid on 8 February       1.00p   107     1.00p   107
2019

Proposed final dividend for 2018                   3.00p   320     3.00p   320

Proposed special dividend for 2018                 2.00p   214     1.00p   107

                                                   6.00p   641     5.00p   534
Freehold      Long  Total
                                 £’000 Leasehold  £’000
                                           £’000

Valuation at 1 January 2018     10,550     2,695 13,245

Additions                           15         -     15

Revaluation                      (215)         -  (215)

Valuation at 31 December 2018   10,350     2,695 13,045

Valuation at 1 January 2017     10,550     2,695 13,245

Addition                            13         -     13

Revaluation                       (13)         -   (13)

Valuation at 31 December 2017   10,550     2,695 13,245

Historical cost

At 31 December 2018              5,851       728  6,579

At 31 December 2017              5,836       728  6,564
2018    2017
               £’000  £’000

 13,045 13,245Carter Towler
Class of   Valuation      Key           Carrying/  Carrying/    Range      Range
property   technique      unobservable fair value fair value (weighted (weighted
Level 3                   inputs             2018       2017            average)
                                            £’000      £’000 average)       2017
                                                                  2018

Freehold – Income         Estimated        10,350     10,550 £7 – £28   £7 – £25
external   capitalisation rental                                 (£20)     (£18)
valuation                 value per sq
                          ft p.a

                          Equivalent                            8.4% –    7.1% –
                          Yield                                 11.8%      11.0%
                                                                (9.3%)    (8.7%)

Long       Income         Estimated         2,695      2,695  £8 – £8   £8 – £8
leasehold  capitalisation rental                                  (£8)      (£8)
– external                value per sq
valuation                 ft p.a

                          Equivalent                            7.9% –    7.7% –
                          yield                                  7.9%      7.7%
                                                                (7.9%)    (7.7%)

At 31                                      13,045     13,245
December
2018
Estimated rental            Equivalent yield
                          value 10% increase            25 basis point
                              or decrease               contraction or
                                                           expansion

                               2018            2017        2018        2017
                              £’000           £’000       £’000       £’000

Freehold – external 1,035 / (1,035) 1,055 / (1,055) 292 / (276) 331 / (311)
valuation

Long Leasehold –        270 / (270)     270 / (270)   88 / (83)   90 / (85)
external valuation
Mining            Mining    Motor    Office   Total
                         reserves     equipment and vehicles equipment   £’000
                            £’000 development costs    £’000     £’000
                                              £’000

Cost at 1 January 2018      1,367            25,902      200       158  27,627

Exchange adjustment         (127)           (2,531)     (22)       (9) (2,689)

Additions                       -             2,777       75        14   2,866

Disposals                       -                 -        -         -       -

Cost at 31 December 2018    1,240            26,148      253       163  27,804

Accumulated depreciation    1,309            17,441      135       129  19,014
at 1 January 2018

Exchange adjustment         (122)           (1,712)     (14)       (6) (1,854)

Charge for the year            26             2,048       30         9   2,113

Disposals                       -                 -        -         -       -

Accumulated depreciation    1,213            17,777      151       132  19,273
at 31 December 2018

Net book value at 31           27             8,371      102        31   8,531
December 2018

Cost at 1 January 2017      1,345            23,724      235       146  25,450

Exchange adjustment            22               447        3         2     474

Additions                       -             1,731        -        10   1,741

Disposals                       -                 -     (38)         -    (38)

Cost at 31 December 2017    1,367            25,902      200       158  27,627

Accumulated depreciation    1,287            15,370      154       119  16,930
at 1 January 2017

Exchange adjustment            21               308        2         1     332

Charge for the year             1             1,763       17         9   1,790

Disposals                       -                 -     (38)         -    (38)

Accumulated depreciation    1,309            17,441      135       129  19,014
at 31 December 2017

Net book value at 31           58             8,461       65        29   8,613
December 2017
2018  2018           2017  2017
                              Net investment in joint Other Net investment Other
                                             ventures             in joint £’000
                                               assets £’000       ventures
                                                £’000               assets
                                                                     £’000

At 1 January                                      874    55          1,321    36

Reclassification IFRS 9                             -   (4)              -     -

Share of (loss)/gain in                             -  (15)              -    19
investment

Additions                                         500     -

Exchange adjustment                                 -   (1)            (8)     -

Share of (loss)/gain in joint                    (52)     -              8     -
ventures

Write-off of investment                             -     -          (447)     -

Net assets at 31 December                       1,322    35            874    55

Loan to joint venture
(Ezimbokodweni):

At 1 January                                        -     -          1,350     -

Exchange adjustments                                -     -           (16)     -

Additions - interest                                -     -             46     -

Write-off of loan                                   -     -        (1,380)     -

At 31 December                                      -     -              -     -

At 31 December                                  1,322    35            874    55

Provision for diminution in
value:

At 1 January                                        -   (4)              -   (4)

Reclassification IFRS 9                             -     4              -     -

At 31 December                                      -     -              -   (4)

Net book value at 31 December                   1,322    35            874    51
2018  2017
                                                                  £’000 £’000

Net book value of unquoted investments                                -     -

Net book and market value of investments listed on overseas stock    35    51
exchanges

                                                                     35    51
Dragon West Ealing    2018    2017
                                               50%         50%   £’000   £’000
                                             £’000       £’000

Turnover                                        83          12      95      83

Profit and loss:

(Loss)/Profit before depreciation, interest   (53)           8    (45)      26
and taxation

Depreciation and amortisation                  (6)           -     (6)     (6)

(Loss)/Profit before interest and taxation    (59)           8    (51)      20

Interest Income                                 51           -      51      68

Interest expense                              (68)           -    (68)    (83)

(Loss)/Profit before taxation                 (76)           8    (68)       5

Taxation                                        17         (1)      16       3

(Loss)/Profit after taxation                  (59)           7    (52)       8

Balance sheet

Non-current assets                           1,235           -   1,235   1,317

Cash and cash equivalents                       45          22      67      46

Property inventory                               -       3,099   3,099       -

Other current assets                           207          39     246   1,218

Current borrowings                               -           -       -       -

Other current liabilities                     (73)       (951) (1,024) (1,062)

Net current assets                             179       2,209   2,388     202

Non-current borrowings                       (582)     (1,702) (2,284)   (609)

Other non-current liabilities                 (17)           -    (17)    (36)

Share of net assets at 31 December             815         507   1,322     874
Activity        Percentage of Registered          Country of
                                 share capital address          incorporation

Mineral Products Share dealing            100% 24 Bruton Place,   England and
Limited                                        London, W1J6NE           Wales

Bisichi          Property                 100% 24 Bruton Place,   England and
(Properties)                                   London, W1J6NE           Wales
Limited

Bisichi          Property                 100% 24 Bruton Place,   England and
Northampton                                    London, W1J6NE           Wales
Limited

Bisichi Trustee  Property                 100% 24 Bruton Place,   England and
Limited                                        London, W1J6NE           Wales

Urban First      Property                 100% 24 Bruton Place,   England and
(Northampton)                                  London, W1J6NE           Wales
Limited

Bisichi Mining   Holding company          100% 24 Bruton Place,   England and
(Exploration)                                  London, W1J6NE           Wales
Limited

Ninghi Marketing Dormant                 90.1% 24 Bruton Place,   England and
Limited                                        London, W1J6NE           Wales

Bisichi Mining   Dormant                  100% 24 Bruton Place,   England and
Managements                                    London, W1J6NE           Wales
Services Limited

Black Wattle     Coal mining             62.5% Samora Machel     South Africa
Colliery (Pty)                                 Street, Bethal
Limited                                        Road,
                                               Middelburg,
                                               Mpumalanga, 1050

Bisichi Coal     Coal mining              100% Samora Machel     South Africa
Mining (Pty)                                   Street, Bethal
Limited                                        Road,
                                               Middelburg,
                                               Mpumalanga, 1050

Sisonke Coal     Coal processing         62.5% Samora Machel     South Africa
Processing (Pty)                               Street, Bethal
Limited                                        Road,
                                               Middelburg,
                                               Mpumalanga, 1050

Black Wattle     Coal mining             62.5% Samora Machel     South Africa
Klipfontein                                    Street, Bethal
(Pty) Limited                                  Road,
                                               Middelburg,
                                               Mpumalanga, 1050

Amandla Ehtu     Dormant                   70% Samora Machel    South Africa
Mineral Resource                               Street, Bethal
Development                                    Road,
(Pty) Limited                                  Middelburg,
                                               Mpumalanga, 1050
2018  2017
                  £’000 £’000

Coal

Washed              777   301

Mining Production   316   286

Work in progress    378   227

Other                40    14

                  1,511   828
2018  2017
                                                       £’000 £’000

Financial assets falling due within one year:

Trade receivables                                      5,311 3,908

Amount owed by joint venture                             752 2,000

Other receivables                                        337   415

Non-financial instruments falling due within one year:

Prepayments and accrued income                           437    94

                                                       6,837 6,417
2018  2017
                                                         £’000 £’000

Market value of listed Investments:

Listed in Great Britain                                    847 1,003

Listed outside Great Britain                                40    47

                                                           887 1,050

Original cost of listed investments                        916   922

Unrealised surplus / deficit of market value versus cost  (29)   128
2018  2017
                               £’000 £’000

Trade payables                 3,949 3,771

Amounts owed to joint ventures   192   192

Other payables                 1,791 1,402

Accruals                       1,089 1,787

Deferred Income                  236   229

                               7,257 7,381
Current   Non-current

                          2018  2017  2018  2017
                         £’000 £’000 £’000 £’000

Bank overdraft (secured) 3,535 1,262     -     -

Bank loan (secured)      6,045    26   547 5,872

                         9,580 1,288   547 5,872
2018  2017
                                                                 £’000 £’000

Bank overdraft and loan instalments by reference to the balance
sheet date:

Within one year                                                  9,580 1,288

From one to two years                                              223    17

From two to five years                                             324 5,855

                                                                10,127 7,160

Bank overdraft and loan analysis by origin:

United Kingdom                                                   5,840 5,832

Southern Africa                                                  4,287 1,328

                                                                10,127 7,160
2018    2017
                                                          £’000   £’000

Total bank loans and overdraft                           10,127   7,160

Less cash and cash equivalents (excluding overdraft)    (9,221) (5,327)

Net debt                                                    906   1,833

Total equity attributable to shareholders of the parent  19,569  17,142

Gearing                                                    4.6%   10.7%
Bank borrowings (including Finance   2018    2017
                                         overdraft)  leases  £’000   £’000
                                              £’000   £’000

Balance at 1 January                          7,160     152  7,312   9,415

Exchange adjustments                          (273)       -  (273)     (4)

Cash movements excluding                      3,240       -  3,240 (2,070)
exchange adjustments

Valuation movements                               -      33     33    (29)

Balance at 31 December                       10,127     185 10,312   7,312
2018  2017
                      £’000 £’000

As at 1 January       1,349 1,236

Exchange adjustment   (150)    21

Increase in provision   329     -

Unwinding of discount    43    92

As at 31 December     1,571 1,349
Financial      Financial Investments held     2018    2017
                        Assets    Liabilities    at FVPL £’000    £’000   £’000
                   measured at    measured at
                amortised cost amortised cost
                         £’000          £’000

Cash and cash            9,221              -                -    9,221   5,327
equivalents

Non-current                  -              -               35       35      51
other
investments
held at FVPL
(previously
classified as
other
investments
available for
sale)

Investments in               -              -              887      887   1,050
listed
securities held
at FVPL
(previously
classified as
Available for
sale
investments)

Trade and other          6,400              -                -    6,400   6,323
receivables

Bank borrowings              -       (10,127)                - (10,127) (7,160)
and overdraft

Finance leases               -          (185)                -    (185)   (152)

Other                        -        (7,113)                -  (7,113) (7,152)
liabilities

                        15,621         17,425              922    (882) (1,713)
2018   2017
                        £’000  £’000

Within one year        17,329  9,110

From one to two years     290    198

From two to five years    392  6,054

Beyond five years         127    105

                       18,138 15,467
2018  2017
                            £’000 £’000

Within one month            3,627 3,824

From one to three months    3,117 2,278

From four to twelve months 10,585 3,008

                           17,329 9,110
2018  2017
                   £’000 £’000

Sterling           6,897 3,402

South African Rand 2,322 1,923

US Dollar              2     2

                   9,221 5,327
2018:              Sterling   South
                      £’000 African
                             Rands
                              £’000

Sterling              1,042       -

South African Rand       37 (1,974)

US Dollar                13       -

                      1,092 (1,974)
2017:              Sterling   South
                      £’000 African
                             Rands
                              £’000

Sterling              (832)       -

South African Rand       54 (1,304)

US Dollar                13       -

                      (765) (1,304)
2018  2017
                                                  £’000 £’000

As at 1 January                                   2,485 2,248

Recognised in income                               (91)   202

Exchange adjustment                               (168)    35

As at 31 December                                 2,226 2,485

The deferred tax balance comprises the following:

Revaluation of properties                           636   691

Capital allowances                                2,369 2,389

Short term timing difference                      (662) (513)

Unredeemed capital deductions                         -  (80)

Losses and other deductions                       (117)   (2)

                                                  2,226 2,485
2018  2017
                                                   £’000 £’000

Authorised: 13,000,000 ordinary shares of 10p each 1,300 1,300
2018       2017  2018  2017
                                            Number of   Number of £’000 £’000
                                              ordinary   ordinary
                                                shares     shares

At 1 January and outstanding at 31 December 10,676,839 10,676,839 1,068 1,068
2018  2017
                                                         £’000 £’000

Equity share options                                       621   597

Net investment premium on share capital in joint venture    86    86

                                                           707   683
Year of Subscription Period within   Number of          Number of     Number of
grant      price per                     share      share options     share for
               share which options   for which lapsed/surrendered which options
                       exercisable     options           /awarded   outstanding
                                   outstanding        during year            at
                                            at                      31 December
                                   31 December                             2018
                                          2017

2010          202.5p    Aug 2013 –      80,000           (80,000)             -
                          Aug 2020

2015           87.0p    Sep 2015 –     300,000                  -       300,000
                          Sep 2025

2018          73.50p    Feb 2018 –           -            380,000       380,000
                          Feb 2028
2018           2018    2017           2017
                                Number       Weighted  Number       Weighted
                                              average                average
                                       exercise price         exercise price

Outstanding at 1 January       380,000         111.3p 380,000         111.3p

Lapsed/Surrendered during the (80,000)         202.5p       -              -
year

Issued during the year         380,000          73.5p       -              -

Outstanding at 31 December     680,000         79.46p 380,000         111.3p

Exercisable at 31 December     680,000         79.46p 380,000         111.3p
2018  2017
                                    £’000 £’000

As at 1 January                       532   349

Share of profit/(loss) for the year   729   172

Dividends received                  (641)     -

Exchange adjustment                  (54)    11

As at 31 December                     566   532
2018     2017
                                           £’000    £’000
                                                 Restated

Revenue                                   48,666   39,191

Expenses                                (43,801) (38,041)

Profit/(loss) for the year                 4,865    1,150

Other comprehensive Income                     -        -

Total comprehensive income for the year    4,865    1,150

Balance sheet

Non-current assets                         8,532    8,613

Current assets                             9,587    6,747

Current liabilities                     (10,540)  (8,652)

Non-current liabilities                  (3,800)  (3,155)

Net assets at 31 December                  3,779    3,553
At 31 December       During the year

                                          Amounts    Amounts     Costs Cash paid
                                             owed       owed recharged   (to)/by
                                       to related by related   (to)/by   related
                                            party      party   related     party
                                            £’000      £’000     party     £’000
                                                                 £’000

Related party:

London & Associated Properties PLC              3          -       153     (183)
(note (a))

West Ealing Projects Limited (note              -      (752)         -     (752)
(b))

Dragon Retail Properties Limited (note        193          -         -     2,046
(c))

Ezimbokodweni Mining (Pty) Limited              -          -         -         -
(note (d))

As at 31 December 2018                        196      (752)       153     1,111

London & Associated Properties PLC             33          -       138     (140)
(note (a))

Langney Shopping Centre Unit Trust              -          -         -         -
(note (b))

Dragon Retail Properties Limited (note        147    (2,000)     (180)       204
(c))

Ezimbokodweni Mining (Pty) Limited              -          -      (46)         -
(note (d))

As at 31 December 2017                        180    (2,000)      (88)        64
2018  2017
                                                                     £’000 £’000

The average weekly numbers of employees of the group during the year
were as follows:

Production                                                             231   192

Administration                                                          15    15

                                                                       246   207

Staff costs during the year were as follows:

Salaries                                                             6,809 5,993

Social security costs                                                  231   161

Pension costs                                                          271   242

Share based payments                                                    24     -

                                                                     7,335 6,396
2018  2017
                                                                   £’000 £’000

Commitments for capital expenditure approved and contracted for at   751     -
the year end
Minimum lease    Present
                          payments      value of
                                         minimum
                                          lease
                                        payments

                          2018    2017  2018  2017
                         £’000   £’000 £’000 £’000

Within one year             12      10    12    10

Second to fifth year        46      38    37    30

After five years         1,443   1,199   136   112

                         1,501   1,247   185   152

Discounting adjustment (1,316) (1,095)     -     -

Present value              185     152   185   152
2018   2017
                      £’000  £’000

Within one year         919    914

Second to fifth year  2,456  2,460

After five years      9,765  9,327

                     13,140 12,701
2018  2017
                              £’000 £’000

Rail siding                      54    64

Rehabilitation of mining land 1,259 1,387

Water & electricity              52    58
Notes    2018    2017
                                                        £’000   £’000

Fixed assets

Tangible assets                                    35      47      48

Investment in joint ventures                       36     665     165

Other investments                                  36   6,391   7,395

                                                        7,103   7,608

Current assets

Debtors – amounts due within one year              37   3,028   3,471

Bank balances                                           5,132   2,129

                                                        8,160   5,600

Creditors – amounts falling due within one year    38 (1,575) (1,406)

Net current assets                                      6,585   4,194

Total assets less current liabilities                  13,688  11,802

Provision for liabilities and charges              39       -    (18)

Net assets                                             13,688  11,784

Capital and reserves

Called up share capital                            24   1,068   1,068

Share premium account                                     258     258

Available for sale reserve                                  -      25

Other reserves                                            622     598

Retained earnings                                  33  11,740   9,835

Shareholders’ funds                                    13,688  11,784
Share   Share Available for   Other Retained Shareholders
                 capital premium  sale reserve reserve earnings        funds
                   £’000   £’000         £’000   £’000    £’000        £’000

Balance at 1       1,068     258             6     598   10,435       12,365
January 2017

Dividend paid          -       -             -       -    (427)        (427)

Loss and total         -       -            19       -    (173)        (154)
comprehensive
income for the
year

Balance at 1       1,068     258            25     598    9,835       11,784
January 2018

IFRS 9                 -       -          (25)       -       25            -
Reclassification

Dividend paid          -       -             -       -    (534)        (534)

Share option           -       -             -      24        -           24
charge

Profit and total       -       -             -       -    2,414        2,414
comprehensive
income for the
year

Balance at 31      1,068     258             -     622   11,740       13,688
December 2018
Leasehold    Motor    Office Total
                                              Property vehicles equipment £’000
                                                 £’000    £’000     £’000

Cost at 1 January 2018                              45        -        67   112

Revaluation                                          -        -         2     2

Cost at 31 December 2018                            45        -        69   114

Accumulated depreciation at 1 January 2018           -        -        64    64

Charge for the year                                  -        -         3     3

Accumulated depreciation at 31 December 2018         -        -        67    67

Net book value at 31 December 2018                  45        -         2    47

Net book value at 31 December 2017                  45        -         3    48
Joint  Shares in subsidiaries Loans       Other Total
                         ventures                  £’000 £’000 investments £’000
                           shares                                    £’000
                            £’000

Net book value at 1           165                  6,356   988          51 7,395
January 2018

Invested during the year      500                      -     -           -     -

Exchange loss                   -                      -  (52)           -  (52)

Repayment                       -                      -  (94)           -  (94)

Transfer                        -                      - (842)           - (842)

Unrealised surplus over         -                      -     -        (16)  (16)
cost

Net book value at 31          665                  6,356     -          35 6,391
December 2018
2018  2017
                                         £’000 £’000

Amounts due within one year:

Amounts due from subsidiary undertakings 2,140 1,289

Trade receivables                            6    16

Other debtors                               58    78

Joint venture                              752 2,000

Prepayments and accrued income              72    88

                                         3,028 3,471
2018  2017
                                       £’000 £’000

Amounts falling due within one year:

Amounts due to subsidiary undertakings   138   279

Joint venture                            192   192

Current taxation                           -   123

Other taxation and social security         6    38

Other creditors                        1,162   659

Accruals and deferred income              77   115

                                       1,575 1,406
2018  2017
                     £’000 £’000

Deferred taxation:

Balance at 1 January    18    18

Provision                -     -

Transfer              (18)     -

                         -    18
At 31                 During the year
                           December

At 31 December             Amounts owed            Costs Cash paid (to)/ by
                       by related party      recharged /      related party
                                  £’000 accrued (to)/ by              £’000
                                           related party
                                                   £’000

Related party:

Black Wattle Colliery             (134)          (1,093)              1,125
(Pty) Ltd (note (a))

Ninghi Marketing                  (102)                -                  -
Limited (note (b))

As at 31 December 2018            (236)          (1,093)              1,125

Black Wattle Colliery             (165)            (999)              2,768
(Pty) Ltd (note (a))

Ninghi Marketing                  (102)                -                  -
Limited (note (b))

As at 31 December 2017            (267)            (999)              2,768
2018  2017
                                                                  £’000 £’000

The average weekly numbers of employees of the company during the
year were as follows:

Directors & administration                                            5     5

Staff costs during the year were as follows:

Salaries                                                          1,752 1,227

Social security costs                                               231   161

Pension costs                                                        38    62

Share based payments                                                 24     -

                                                                  2,045 1,450
NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of...

FOR OUR FULL DISCLAIMER CLICK HERE

428 min read