Bisichi Regulatory News (BISI)

30 Apr 2012 07:00

BISICHI MINING PLC Results for the year ended 31 December 2011 STRONG RECOVERY IN THE SECOND HALF

- EBITDA: £1,150,000 (2010: £770,000)

- Final Dividend proposed of 3p per share payable in cash in addition to the interim dividend of 1p per share

- Strong performance at Black Wattle in second half including:

- Monthly coal production increased to 135,000 metric tonnes in the second half

- New markets established for lower quality products drives higher yields and profitability

- 30% increases in price of domestic coal since June last year to catch up with the price of export coal

- 87,500 tonnes of export allocation granted at Richards Bay Coal Terminal

- Sale of Ezimbokodweni Mining now only conditional on consent of the South African Department of Mineral Resources

- Significant revenue generated by the UK retail property portfolio

Chairman, Michael Heller, comments:

"I am pleased to report that the strong recovery in the performanceof Black Wattle that we experienced in the second six months of 2011 is beingsustained in 2012. With higher prices and increased production at the mine, weare optimistic about the prospects for 2012."

For further information, please call:

Andrew Heller or Garrett Casey, Bisichi Mining PLC 020 7415 5030

CHAIRMANS STATEMENT

I am pleased to report to shareholders that a strong performance by Black Wattle, our South African coal mining subsidiary, in the second half of the year has resulted in the group recouping most of the losses incurred in the first half. Although the group reported a small trading loss before exchange losses and tax of £235,000 for the year, it generated a trading profit of £1.5million in the second half of the year.

A number of important events have taken place in the second half which haveaccelerated the turnaround at Black Wattle. Key among these were the openingof a third opencast pit early in the second half and selling some of our coalinto markets that require a lower quality product.As a result of the opening of the third opencast pit, the mine's monthlyproduction in the second half of the year increased to an average of 135,000metric tonnes. This compares favourably with the average monthly production of110,000 metric tonnes achieved in the first half of the year. A furtherincrease in the mine's monthly production is scheduled to impact in 2012.The selling of some of our coal into markets that require lower qualityproduct has contributed significantly to Black Wattles profitability. Althoughthe prices are lower in these markets, the higher yield that can be achievedthrough the washing plant to attain these lower qualities more than offsetsthe price reduction.On the marketing side, although export prices have remained relatively stableover the year, prices have increased significantly in our domestic markets tocatch up with the higher export prices - since June last year to date we haveseen an average increase in the domestic price of over 30% free on mine.Demand for our product in both markets remains strong, helped by thesubstantial improvement in the performance of Transnet, the State railprovider.As previously announced, we are pleased to report that Black Wattle has beengranted use of an annual allocation of 87,500 tonnes of export tonnage atRichards Bay Coal Terminal. This gives Black Wattle direct access to the coalexport market and I would like to thank Vunani Ltd, our co-shareholder inBlack Wattle, for all its hard work in helping Black Wattle obtain thisallocation.

On health and safety, I am very pleased to report that Black Wattle had another very good year. For further information on this please refer to the Mining Review in this report.

As announced on 26 January 2012, the Company has entered into an agreement to dispose of its 49% shareholding in Ezimbokodweni Mining (Pty) Ltd. Consideration for the sale is ZAR 54.2million in cash, which is a substantial premium to the cost of our investment. Ezimbokodweni was established in 2005 with Endulwini Coal Limited to acquire the Pegasus Reserve, a shallow coal deposit located in the Witbank coalfield of Mpumalanga. Since then, Ezimbokodweni has been negotiating with the owner of the reserve, BHP Billiton Energy Coal South Africa Limited and the South African Department of Mineral Resources ("DMR") to finalise the acquisition and prepare for opencast mining.

In early 2011, following the intervention of the DMR, the Companyagreed to dispose of its stake in Ezimbokodweni. The agreement made on 26January 2012 was conditional on the satisfaction by 15 May 2012 of conditionsprecedent, the last of which is the consent of the DMR, which is awaited. Afurther announcement will take place as soon as possible and, assumingcompletion takes place, the proceeds will be used for the further developmentof the group.The Company's UK retail property portfolio continues to generate significantrevenue. During the year it acquired a 12.5% interest in a shopping centre inEastbourne for just under £1million cash; the net initial yield is 8% andthere is development potential. London and Associated Properties PLC managethis and the Company's other properties and voids across the portfolio were atthe very low level of 2.7%.The Board paid an interim cash dividend of 1p during the year. The Directorsnow recommend the declaration of a final dividend of 3p (2010: 3p) payable incash on 13 August 2012 to shareholders registered at the close of business on01 July 2012.

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

In 2012 to date the group has continued to benefit from the higher productionand prices being achieved at Black Wattle and we therefore look forward to thecoming year with confidence.

Michael Heller Chairman 18 April 2012

MINING REVIEW

As noted in the Chairman's statement, a number of important eventshave taken place in the second half of the year that have accelerated theturnaround at Black Wattle, our direct mining subsidiary. The opening of athird opencast pit and the selling of our coal into new markets impactedsignificantly on the mines profitability. In addition, higher prices for ourcoal were achieved throughout the second half of 2011 and have continued into2012.

Looking forward, we expect to continue to see the value of these events contributing strongly to Black Wattle's profitability.

Production

Although total Run of Mine production remained consistent with the prior year at 1.45 million metric tonnes (2010: 1.46 million metric tonnes), overall monthly production through the washing plant increased from 110,000 metric tonnes in the first half of 2011 to 135,000 metric tonnes in the second half. As stated above, this increase in production was a direct result of the opening of a third opencast pit at Black Wattle.As we look forward into 2012, the ability to source production from three different opencast pits will allow Black Wattle to maintain overall monthly production at this higher level. A further increase in production is expected to impact at Black Wattle in the middle of 2012 as we look to expand further our opencast reserves.

Markets

Our ability to increase production at Black Wattle has largely been helped by the improvement in the performance of Transnet, the State rail provider. In 2011, Transnet railed 65.7million tonnes to Richards Bay Coal Terminal compared to 62.8million tonnes in 2010. As a result, our stockpiles have remained low whilst demand for our coal has remained strong.International coal prices stayed relatively stable in 2011. The average weekly price of Free on Board (FOB) Coal from Richards Bay Coal Terminal (API4) was in a range of US$105.00 to US$120.00 per metric tonne for the most of 2011. Although the coal price ended the year near the bottom of the range at $105 per metric tonne, a depreciation in the South African Rand in the second half of the year offset this decline. Prices in the domestic steam coal market continued to increase significantly in the second half of the year and into 2012 - catching up with the higher export prices being achieved.

In the second half of the year we started selling some of our coal into a lower quality market. As noted in the Chairman's Statement, although the prices are lower in these markets, the higher yield that can be achieved through the washing plant to attain these lower qualities more than offsets the price reduction. We have found the demand for this product to be strong in both the domestic and export market. This gives us the flexibility to sell into both markets for the highest return.

As also noted in the Chairman's Statement, we are pleased to report that Black Wattle has been granted use of an annual allocation of 87,500 tonnes of export tonnage at Richards Bay Coal Terminal. The allocation falls under the Quattro Programme which allows junior black economic-empowerment coal producers direct access to the coal export market. We look forward to developing this opportunity along with Vunani Limited our black economic-empowered shareholders at Black Wattle.

Health, Safety & Environment (HSE)

Black Wattle is committed to creating a safe and healthy working environmentfor its employees and the health and safety of our employees is of the utmostimportance. In addition to the required personnel appointments and assignmentof direct health and safety responsibilities on the mine, a system of HazardIdentification and Risk Assessments has been designed, implemented andmaintained at Black Wattle.Health and Safety training is conducted on an ongoing basis. We are pleased toreport all employees to date have received training in hazard identificationand risk assessment in their work areas.

A medical surveillance system is also in place which provides management with information used in determining measures to eliminate, control and minimise employee health risks and hazards and all Occupational Health hazards are monitored on an ongoing basis.

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

- 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.

- A Job Safety Analysis form has been introduced to ensure effective identification of hazards in the workplace.

- In order to improve the current reporting practice of incidents on the mine,initial reporting of incidents booklets were handed out to all employees andcontractors.

- In order to capture and record investigation findings from incidents, an incident recording sheet was introduced to line management and contractors.

- Hazard Identification and Risk Assessment training was given to all levels of employees, line management, Heads of Departments, contractor representatives and contractor employees.

- Ongoing training on conveyor belt operation is being conducted with all employees involved with this discipline.

- 15 employees were trained in ABET (Accreditation Board for Engineering andTechnology) level one and another 35 will be trained in 2012 on level one andtwo.HSE performance in 2011:

- Black Wattle have had a 93 percent reduction in the Lost Time Injury Frequency Rate since July 2008

- No new cases of Occupational Diseases were recorded.

- Zero cases for the Compensation for Occupational Diseases were submitted.

- Zero machines operating at Black Wattle exceeded the regulatory noise level.

Environment Management Programme

Under the terms of the mine's Environmental Management Programme approved bythe Department of Mineral Resource ("DMR"), Black Wattle undertakes a host ofenvironmental protection activities to ensure that the approved EnvironmentalManagement Plan is fully implemented. In addition to these routine activities,Black Wattle regularly carries out environmental monitoring activities on andaround the mine, including evaluation of ground water quality, air quality,noise and lighting levels, ground vibrations, air blast monitoring, andassessment of visual impacts.

Black Wattle Colliery has substantially improved its water management by erecting a new pollution control dam as well as upgrading existing dams in consultation with the Department of Water Affairs and Forestry.

We are very pleased to report that Black Wattle received their approved waterlicense from the Department of Water Affairs and Forestry. An external auditwas also conducted and completed on the approved water license.

Black Wattle Colliery Social and Labour Plan (SLP) progress

Black Wattle Colliery is committed to true transformation and empowerment within the company as well as poverty eradication within the surrounding and labour providing communities.

Black Wattle is committed to providing opportunities for the sustainable socio-economic development of the company's stakeholders:

- Employees and their families, through Skills Development, Education Development, Human Resource Development, Empowerment and Progression Programmes.

- Surrounding and Labour sending communities, through Local Economic Development, Rural and Community Development, Housing and Living Condition, Enterprise Development and Procurement programmes.

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

- The Company, through ongoing consultation with 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:

- New implementation 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).

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

- 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.

Procurement

In compliance with the Mining Charter and the Mineral and Petroleum ResourceDevelopment Act, Black Wattle has implemented a BEE-focussed procurementpolicy which strongly encourages our suppliers to establish and maintain BEEcredentials. At present, BEE companies provide approximately 52 percent ofBlack Wattle's equipment and services. We closely monitor our monthlyexpenditure and welcome potential BEE suppliers to compete for equipment andservice contracts at Black Wattle. Black Wattle also sells much of its coalproducts to empowered companies.

Employment Equity

Black Wattle is committed to achieving the goals of the 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 15.1 percent women in core mining.

- 86.2 percent of the women at Black Wattle Colliery are HDSA females.

Prospects

Since permissions were granted in February 2010 to mine opencast the reservesat Black Wattle, management have implemented several projects to ensure BlackWattle has adequate infrastructure and capacity in place to increaseproduction from our opencast reserves. As a result, the group is in a strongposition to take advantage of the higher market prices and the increasedproduction at Black Wattle.

Going forward, I am confident that 2012 should be successful year for our South African operations.

Andrew HellerManaging Director18 April 2012BUSINESS REVIEW

Review of the group's development and performance

The Chairman's Statement and the Mining Review on the preceding pages 2 to 9 give a comprehensive review and assessment of the group's activities during the past year and prospects for the forthcoming year.

Risk

Coal price risk: The group's mining operational earnings are largely dependenton movements in the coal price. It does have the flexibility in terms ofmarkets where it can sell its coal domestically (to local industrial consumersand the power industry) or to export to various international markets.

Coal washing: The group's mining operation's earnings are highly sensitive to coal washing, therefore a stoppage or disruption to the process could significantly impact earnings. However, there is scope to raise earnings substantially if the yield from the washing process is improved even marginally.

Mining risk: Attached to mining there are inherent health and safety risks. Any such safety incidents disrupt operations, and can slow or even stop production. The group has a comprehensive Health and Safety programme in place to mitigate this. As with many mining operations, the reserve that is mined has the risk of not having the qualities expected from geological analysis. There is scope to increase production by buying in coal to compensate for disruptions in production.

Currency risk: The group's South African operations are sensitive to currency movements, especially those between the South African Rand, US Dollar and British Pound.

New reserves and mining permissions: The acquisition of additional reserves,permissions to mine and new mining opportunities in South Africa generally arecontingent on a number of factors outside of the group's control, e.g.approval by the Department of Mineral Resources.

Regulatory risk: The group's South African operations are subject to the government Mining Charter and scorecard which primarily seeks to:

- Promote equitable access to South Africa's mineral resources for

all people in South Africa;

- Expand opportunities for historically disadvantaged South Africans

(HDSA's), including women, 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 HDSA's; - Expand the skills base of HDSA's in order to serve the community; - Promote employment and the social and economic welfare of mining communities and areas supplying mining labour; and - Promote beneficiation of South Africa's mineral commodities beyond mining and processing, including the production of consumer goods.

The group continues to make good progress towards meeting the Charter requirements. However any regulatory changes to these, or failure to meet existing targets, could adversely affect the mine's ability to retain its mining rights in South Africa.

Transport risk: At present the government owned Transnet FreightRail (TFR) is the sole rail freight provider for coal in South Africa. Thegroup's South African operations are therefore reliant on TFR for delivery ofits export quality coal directly or indirectly via the Southern African portsto its end customers.

Power supply risk: The current utility provider for power supply in South Africa is the government run Eskom. Eskom has recently undergone capacity problems resulting in power cuts and lack of provision of power supply to new projects. The group's mining operations have to date not been affected by power cuts.

Flooding risk: The group's mining operations are susceptible to seasonal flooding which could disrupt production. Management monitors water levels on an ongoing basis and various projects have been completed, including the construction of additional dams, to mitigate this risk.

Environmental risk: The group's South African mining operations are required to adhere to local environmental regulations. Details of the groups Environment Management Programme is disclosed in the Mining review on page 6.

Health & Safety risk: The group's South African mining operationsare required to adhere to local Health and Safety regulations. Details of thegroup's Health and Safety Programme is disclosed in the Mining Review on page6.

Labour risk: The group's mining operations and coal washing plant facility are labour intensive and unionised. Any labour disputes, strikes or wage negotiations may disrupt production and impact earnings.

We seek to balance the high risk of our mining operations with a dependablecash flow from our UK property investment operations. Fluctuations in propertyvalues, which are reflected in the Consolidated Income Statement and BalanceSheet, are dependent on an annual valuation of commercial properties. A fallin UK commercial property can have a marked effect on the profitability andthe net asset value of the group. However, due to the long term nature of theleases, the effect on cash flows from property investment activities willremain stable as long as tenants remain in operation.

Future development

The group seeks to expand its operations in South Africa through the acquisition of additional coal reserves.

Environment and employment

The group's UK activities are principally property investment whereby we provide premises which are rented to retail businesses. We seek to provide those tenants with good quality premises from which they can operate in an efficient and environmentally sound manner.

Our South African mining operations are regulated by and are operated in compliance with all relevant prevailing national and local legislation. Employment terms and conditions provided to mining staff meet or exceed the national average.

Financial Position

In the UK, a term loan facility of £5million and an overdraft facility of£2million were signed in March 2010 with Royal Bank of Scotland. The term loanfacility will expire in December 2012 and is secured against the group's UKretail property portfolio. The property portfolio was externally valued at 31December 2011 and the value of UK investment properties attributable to thegroup at year end was £12.1million (2010: £12.1million). The group intends tonegotiate new facilities before the expiry of the current facility and haveobtained confirmation from the Royal Bank of Scotland that they are not awareof any reason why the bank should not continue to support the companyfollowing the expiry of the current facilities.In South Africa, a structured trade finance facility of R60million (SouthAfrican Rand) was signed in March 2010 with Absa Bank Limited, a South Africansubsidiary of Barclays Bank PLC. This facility comprises of a R40millionrevolving loan to cover the working capital requirements of the group's SouthAfrican operations, and a R20million loan facility to cover Guaranteerequirements related to the group's South African mining operations. TheR60million facility is renewed annually and is secured against inventory,debtors and cash that are held in the group's South African operations.The group's cash and cash equivalents (excluding bank overdrafts) at year endwere £4.0million (2010: £5.4 million). The net assets of the group at year endwere £17.0million (2010: £18.3million).

Further details on the group's financial position are stated in the Consolidated Balance Sheet on page 30.

Cashflow

The group's cashflow position remains strong. Cash and cash equivalents (including bank overdrafts) of the group at year end were £1.1million (2010: £4.0million).

Further details on the group's cashflow position are stated in theConsolidated Cashflow Statement on page 32. Cash and cash equivalents as perthe Cashflow Statement comprise Cash and cash equivalents as presented in thebalance sheet and bank overdrafts (secured).

Performance indicators

The Key Performance Indicators for our South African mining activities are

- Profit before Tax (PBT);

- Earnings before Interest, Tax, Depreciation, and Amortisation (EBITDA); and

- Cashflows from operating, investing and financing activities.

The Key Performance Indicator for our UK property investment operations is the Net Property Valuation as shown in note 10.

MANAGEMENT TEAMMichael HellerChairmanBisichi Mining PLCAndrew HellerManaging DirectorBisichi Mining PLC,Managing DirectorBlack Wattle CollieryRobert CorryChairmanBlack Wattle CollieryRobert GroblerDirector of MiningBisichi Mining PLC,DirectorBlack Wattle CollieryChristopher JollSenior Independent Director,ChairmanAudit and Remuneration CommitteesGarrett CaseyFinance DirectorBisichi Mining PLC,DirectorBlack Wattle CollieryEthan DubeDirectorBlack Wattle CollieryLuis PinelGeneral ManagerBlack Wattle CollieryDIRECTORS & ADVISORS*Michael A HellerMA, FCA (Chairman)Andrew R HellerMA, ACA(Managing Director)Garrett CaseyCA (SA)(Finance Director)Robert GroblerPr Cert Eng(Director of mining)O+Christopher A JollMA (Non-executive)Christopher Joll was appointed a Director on 1 February 2001. He holds anumber of non-executive directorships of un-quoted companies. He is chairmanof MJ2 Financial Limited, a public relations consultancy company specialisingin real estate.O John A SibbaldBL (Non-executive)John Sibbald has been a Director since 1988. After qualifying as a CharteredAccountant he spent over 20 years in stockbroking, specialising in mining andinternational investment.

* Member of the nomination committee

+ Senior independent director

O Member of the audit, remuneration and nomination committees.

Secretary & Registered officeHeather A Curtis ACIS24 Bruton PlaceLondon W1J 6NEBlack Wattle CollieryDirectorsRobert Corry (Chairman)Andrew Heller(Managing Director)Robert GroblerEthan DubeGarrett CaseyDirector of PropertyMike J Dignan FRICSAuditorsPKF (UK) LLPPrincipal bankersUnited KingdomBarclays Bank PLCInvestec Bank PLCNational Westminster Bank PLCSouth AfricaAbsa Bank (SA)First National Bank (SA)Standard Bank (SA)Corporate solicitorsUnited KingdomMemery Crystal LLP,LondonOlswang LLP, LondonPinsent Masons LLP,London

South Africa Routledge Modise in association with Eversheds, Johannesburg Tugendhaft Wapnick Banchetti and Partners, Johannesburg

Stockbrokers

Shore Capital & Corporate Ltd

Registrars and transfer officeCapita RegistrarsThe Registry34 Beckenham RoadBeckenhamKentBR3 4TUTelephone 0871 664 0300(Calls cost 10p per minute + network extras) or+44 208 639 3399 for overseas callersWebsite: www.capitaregistrars.comEmail: ssd@capitaregistrars.comCompany registrationCompany registration No. 112155(Incorporated in England and Wales)Websitewww.bisichi.co.ukE-mailadmin@bisichi.co.uk

FIVE YEAR FINANCIAL SUMMARY

2011

2010 2009 2008 2007

£'000 £'000 £'000 £'000 £'000Consolidated income statementRevenue 29,909 32,824 29,016 25,979 16,693 Revenue Operating (loss)/profit (1,328) (1,705) 4,892 2,616 (191)(Loss)/profit before tax (1,450) (1,813) 5,003 2,117 (459)Trading Income (1,210) (2,209) 4,698 6,031 2,302Revaluation Income (240)

396 305 (3,914) (2,761)

Profit before interest, taxation 1,150

770 7,534 4,383 801and depreciation Consolidated balance sheet Investment properties 12,068 12,110 11,865 11,773 14,725Fixed asset investments 2,727 3,757 3,755 3,406 2,991 14,795 15,867 15,620 15,179 17,716Current asset investments 2,515 605 510 627 770 17,310 16,472 16,130 15,806 18,486Other assets less liabilities (537) 1,482 3,170 (160) (3,127)Total equity attributable to 16,773 17,954 19,300 15,646 15,359equity shareholdersNet assets per ordinary share 158.9p 171.8p 184.7p 149.7p 147.0pDividend per share 4.00p 4.00p 4.00p 3.50p 3.0pFINANCIAL CALENDER

13 March 2012 First interim management statement

31 May 2012 Annual General Meeting

6 August 2012 Payment of final dividend for 2011 (if approved)

Late August 2012 Announcement of half-year results to 30 June 2012

16 November 2012 Second interim management statement

Late April 2013 Announcement of results for year ending 31 December 2012

DIRECTORS' REPORT

The directors submit their report together with the audited financial statements for the year ended 31 December 2011.

Activities and review of businessThe company continues its mining activities. Income for the year was derivedfrom sales of coal from its South African operations. The company also has aproperty investment portfolio for which it receives rental income.The results for the year and state of affairs of the group and the company at31 December 2011 are shown on pages 29 to 55 and in the Mining Review andBusiness Review on pages 5 to 15. Future developments and prospects are alsocovered in the Mining Review. Over 99 per cent of staff are employed in theSouth African coal mining industry - employment matters and health and safetyare dealt with in the Mining and Business Reviews.The management report referred to in the Director's responsibilities statementencompasses this Directors' Report, the Chairmans' Statement on page 2 and theMining Review and Business Review on pages 5 to 15.

Corporate responsibility

Environment

The environmental issues of the group's South African coal mining operations are covered in the Mining Review and Business Review on pages 5 to 15.

The group's UK activities are principally property investment whereby premisesare provided for rent to retail businesses. The group seeks to provide thosetenants with good quality premises from which they can operate in an efficientand environmentally friendly manner. Wherever possible, improvements, repairsand replacements are made in an environmentally efficient manner and wastere-cycling arrangements are in place at all the company's locations.

Employment

The group's policy is to attract staff and motivate employees by offeringcompetitive terms of employment. The group provides equal opportunities to allemployees and prospective employees including those who are disabled. TheMining Review gives details of the group's activities and policies concerningthe employment, training, health and safety and community support and socialdevelopment concerning the group's employees in South Africa.

Dividend policy

An interim dividend for 2011 of 1p was paid on 3 February 2012 (Interim 2010: 1p). The directors recommend the payment of a final dividend for 2011 of 3p per ordinary share (2010: 3p) making a total dividend for 2011 of 4p (2010: 4p).

Subject to shareholder approval, the total dividend per Ordinary Share for 2011 will be 4p per Ordinary Share

The final dividend will be payable on Monday 6 August 2012 to shareholders registered at the close of business on 6 July 2012.

Investment properties

The investment property portfolio is stated at its open market value of £12,068,000, at 31 December 2011(2010:£ 12,110,000) as valued by professional external valuers. The open market value of the companies shareholding of investment properties included within its investments in joint ventures is £3,505,000 (2010: £1,568,000).

Financial instruments

Note 22 to the financial statements sets out the risks in respect of financialinstruments. The Board reviews and agrees overall treasury policies,delegating appropriate authority to the managing director. Financialinstruments are used to manage the financial risks facing the group -speculative transactions are not permitted. Treasury operations are reportedat each Board meeting and are subject to weekly internal reporting.

Directors

The directors of the company for the whole year were M A Heller, A R Heller, GJ Casey, C A Joll, R J Grobler (a South African citizen), and J A Sibbald.

The directors retiring by rotation are Mr R G Grobler, Mr A R Heller, Mr C A Joll and Mr J A Sibbald who offer themselves for re-election. The board recommends their re-election. Brief details of the directors standing for re-election are:

Robert Grobler was appointed as General Mine Manager by Black Wattle Colliery (Proprietary) Ltd on 1 May 2000. He was appointed to the board of Bisichi Mining plc as Director of Mining on 22 April 2008. He has over 40 years experience in the South African coal mining industry. He is a professional engineer and member of the South African Coal Managers Association.

Andrew Heller has been an executive director since 1998. He is a Chartered Accountant and has been employed by the group since 1994 under a contract of employment determinable at three months notice.

Christopher Joll has been a director since 1 February 2001 and has a contract of service determinable at three months notice. He holds a number of non-executive directorships of un-quoted companies. He is chairman of MJ2 Limited, a public relations consultancy specialising in real estate.

John Sibbald has been a non-executive director since 1988. He is a retired chartered accountant. For most of his career he was employed in stockbroking in the City of London where he specialised in mining and international investment. He has a contract of service determinable at three months notice.

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

Directors' shareholdings

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

Beneficial Non-beneficial 31.12.2011 1.1.2011 31.12.2011 1.1.2011M A Heller 148,783 146,666 181,344 181,344A R Heller 785,012 772,000 - -C A Joll - - - -J A Sibbald - - - -R J Grobler - - - -G J Casey - - - -

There have not been any changes in the above shareholdings since 31 December 2011 and the date of this report.

Details of the options to subscribe for new ordinary shares of the company granted to the directors are contained under "Share option schemes" in the remuneration report on page 25.

Substantial interestsThe following have advised that they have an interest in 3 per cent or more ofthe issued share capital of the company as at 17 April 2012:

London & Associated Properties PLC - 4,432,618 shares representing 41.99 per cent of the issued capital. (M A Heller is a director and shareholder of London & Associated Properties PLC).

M A Heller - 330,117 shares representing 3.13 per cent of the issued capital.

A R Heller - 785,012 share representing 7.43 per cent of the issued capital.

Neil Kirton - 382,000 shares representing 3.65 per cent of the issued capital.

Disclosure of information to auditorThe directors in office at 31 December 2011 have confirmed that they are awarethat there is no relevant audit information of which the auditor is unaware.Each of the directors has confirmed that they have taken all reasonable stepsthey ought to have taken as directors to make themselves aware of any relevantaudit information and to establish that it has been communicated to theauditor.Corporate governanceThe company has adopted the Guidance for Smaller Quoted Companies (SQC)published by the Quoted Companies Alliance. The Alliance provides guidance toSQC and their guidance covers the implementation of The UK CorporateGovernance Code for SQC. The paragraphs below set out how the company hasapplied this guidance during the year. The company has complied with theQuoted Companies Alliance guidance throughout the year, except insofar thatnon-executive directors are not appointed for fixed terms (section A.7.2).

Principals of corporate governance

The group's Board appreciates the value of good corporate governance not onlyin the areas of accountability and risk management, but also as a positivecontribution to business prosperity. The Board endeavours to apply corporategovernance principals in a sensible and pragmatic fashion having regard to thecircumstances of the group's business. The key objective is to enhance andprotect shareholder value.

Board structure

During the year the Board comprised the executive chairman, the managingdirector, two other executive directors and two non-executive directors. Theirdetails appear on page 16. The Board is responsible to shareholders for theproper management of the group. A statement of directors' responsibilities inrespect of the accounts is set out on page 27. The non-executive directorshave a particular responsibility to ensure that the strategies proposed by theexecutive directors are fully considered. To enable the Board to discharge itsduties, all directors have full and timely access to all relevant informationand there is a procedure for all directors, in furtherance of their duties, totake independent professional advice, if necessary, at the expense of thegroup. The Board has a formal schedule of matters reserved to it and meetsbi-monthly.

The Board is responsible for overall group strategy, approval of major capital expenditure projects and consideration of significant financing matters.

The following Board committees, which have written terms of reference, deal with specific aspects of the group's affairs:

- The nomination committee is chaired by Christopher Joll and comprises the non-executive directors and the executive chairman. The committee is responsible for proposing candidates for appointment to the Board, having regard to the balance and structure of the Board. In appropriate cases recruitment consultants are used to assist the process. Each director is subject to re-election at least every three years.

- The remuneration committee is responsible for making recommendations to theBoard on the company's framework of executive remuneration and its cost. Thecommittee determines the contractual terms, remuneration and other benefitsfor each of the executive directors, including performance related bonusschemes, pension rights and compensation payments. The Board itself determinesthe remuneration of the non-executive directors. The committee comprises thenon-executive directors. It is chaired by Christopher Joll. The company'sexecutive chairman is normally invited to attend meetings. The report ondirectors' remuneration is set out on pages 24 and 25.- The audit committee comprises the two non-executive directors and is chairedby Christopher Joll. Its prime tasks are to review the scope of externalaudit, to receive regular reports from the Company's auditors, PKF (UK) LLP,and to review the half-yearly and annual accounts before they are presented tothe Board, focusing in particular on accounting policies and areas ofmanagement judgment and estimation. The committee is responsible formonitoring the controls which are in force to ensure the integrity of theinformation reported to the shareholders. The committee acts as a forum fordiscussion of internal control issues and contributes to the Board's review ofthe effectiveness of the group's internal control and risk management systemsand processes. The committee also considers annually the need for an internalaudit function. It advises the Board on the appointment of external auditorsand on their remuneration for both audit and non-audit work, and discusses thenature and scope of the audit with the external auditors. The committee, whichmeets formally at least twice a year, provides a forum for reporting by thegroup's external auditors. Meetings are also attended, by invitation, by thecompany 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 all relationshipswith the company and any other parties that could affect independence or theperception of independence;

- a review of the auditors' own procedures for ensuring the independence of 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 26.

An analysis of the fees payable to the external audit firm in respect of both audit and non-audit services during the year is set out in Note 4 to the financial statements.

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 seniorindependent director. Their recommendations are discussed at the nominationcommittee prior to proposals for re-election being recommended to the Board.The performance of executive directors is discussed and assessed by theremuneration committee. The senior independent director meets regularly withthe chairman and both the executive and non-executive directors individuallyoutside of formal meetings. The directors will take outside advice inreviewing performance but have not found this necessary to date.

Independent Directors

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

Christopher Joll has been a non-executive director for over ten years. As a consequence he does not fully meet the criteria for independence set out in the UK Corporate Governance Code (The Code).

John Sibbald has been a non-executive director of Bisichi for over twenty years - the maximum set out in The Code criteria for independence is nine years. For this reason he does not fully meet the criteria set out in The Code for independence.

The Board encourages Christopher Joll and John Sibbald to act independently.The criteria for independence on which they fail to meet The Code's criteriafor independence, namely length of service and a connection with the company'spublic relations advisers, should not, and has not, resulted in theirinability or failure to act independently. In the opinion of the Board,Christopher Joll and John Sibbald continue to fulfil their role as independentnon-executive directors.

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

Board and board committee meetings

The number of meetings during 2011 and attendance at regular Board meetings and Board committees was as follows:

Meetings held Meetings attendedM A Heller Board 6 6 Nomination committee 1 1A R Heller Board 6 6Audit committee 2 2G J Casey Board 6 5R J Grobler Board 6 1C A Joll Board 6 6Audit committee 2 2 Nomination committee 1 1 Remuneration committee 1 1J A Sibbald Board 6 6 Audit committee 2 2 Nomination committee 1 1Remuneration committee 1 1

The audit committee had two meetings in 2011 with the external auditors present, prior to release of the 2011 annual results. Members of the committee discussed the 30 June 2011 half year results prior to their approval by the full Board. The nomination committee held one meeting during the year.

Internal control

The directors are responsible for the group's system of internal control andreview of its effectiveness annually. The Board has designed the group'ssystem of internal control in order to provide the directors with reasonableassurance that its assets are safeguarded, that transactions are authorisedand properly recorded and that material errors and irregularities are eitherprevented or would be detected within a timely period. However, no system ofinternal control can eliminate the risk of failure to achieve businessobjectives or provide absolute assurance against material misstatement orloss.

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;

- UK property and financial operations are closely monitored by members of theBoard and senior managers to enable them to assess risk and address theadequacy of measures in place for its monitoring and control. The SouthAfrican operations are closely supervised by the UK based executives throughdaily, weekly and monthly reports from the directors and senior officers inSouth Africa. This is supplemented by monthly visits by the UK based financedirector to the South African operations which include checking the integrityof information supplied to the UK. The directors are guided by the internalcontrol guidance for directors issued by the Institute of CharteredAccountants 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 are no significant issues disclosed in the Annual Report for the year ended 31 December 2011 (and up to the date of approval of the report) concerning material internal control issues. The directors confirm that the Board has reviewed the effectiveness of the system of internal control as described during the period.

Communication with shareholders

Communication with shareholders is a matter of priority. Extensive informationabout the group and its activities is given in the Annual Report, which ismade available to shareholders. Further information is available on thecompany's website, www.bisichi.co.uk. There is a regular dialogue withinstitutional investors. Enquiries from individuals on matters relating totheir shareholdings and the business of the group are dealt with informativelyand promptly.Payment of suppliers

The company agrees contract terms with suppliers when orders are placed. Payments to suppliers are made in accordance with those terms, provided that suppliers have complied with all relevant terms and conditions. Trade creditors outstanding at the year-end represented 52 days trade purchases (2010 - 39 days).

Takeover Directive

The company has one class of share capital, ordinary shares. Each ordinaryshare carries one vote. All the ordinary shares rank pari passu. There are nosecurities issued in the company which carry special rights with regard tocontrol of the company. The identity of all substantial direct or indirectholders of securities in the company and the size and nature of their holdingsis shown under the "Substantial interests" section of this report above.A relationship agreement dated 15 September 2005 (the "RelationshipAgreement") was entered into between the company and London & AssociatedProperties PLC ("LAP") in regard to the arrangements between them while LAP isa controlling shareholder of the company. The Relationship Agreement includesa provision under which LAP has agreed to exercise the voting rights attachedto the ordinary shares in the company owned by LAP to ensure the independenceof the Board of directors of the company.Other than the restrictions contained in the Relationship Agreement, there areno restrictions on voting rights or on the transfer of ordinary shares in thecompany. The rules governing the appointment and replacement of directors,alteration of the articles of association of the company and the powers of thecompany's directors accord with usual English company law provisions. Eachdirector is re-elected every three years or more frequently. The company isnot party to any significant agreements that take effect, alter or terminateupon a change of control of the company following a takeover bid. The companyis not aware of any agreements between holders of its ordinary shares that mayresult in restrictions on the transfer of its ordinary shares or on votingrights.

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 1 July 2011, and the Board took the opportunity to begin implementing a new Anti-Bribery Policy. The company is committed to acting ethically, fairly and with integrity in all its endeavours and compliance of the code is closely monitored.

Annual General Meeting

The annual general meeting will be held at the Royal Automobile Club, 89 PallMall, London SW1Y 5HS on Thursday, 31 May 2012 at 11.00 a.m. Resolutions 1 to10 will be proposed as ordinary resolutions. More than 50 per cent ofshareholders' votes cast must be in favour for these resolutions to be passed.Resolutions 11 to 13 will be proposed as special resolutions. At least 75 percent of shareholders' votes cast must be in favour for these resolutions to bepassed.

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.

Directors' authority to allot shares (Resolution 10)

Paragraph 10.1.1 of Resolution 10 would give the directors the authority toallot shares in the company and grant rights to subscribe for, or convert anysecurity into, shares in the company up to an aggregate nominal value of£351,542. This represents approximately 33.3 per cent of the ordinary sharecapital of the company in issue (excluding treasury shares) at 17 April 2012(being the last practicable date prior to the publication of this Directors'Report). Paragraph 10.1.2 of Resolution 10 would give the directors theauthority to allot shares in the company and grant rights to subscribe for, orconvert any security into, shares in the company up to a further aggregatenominal value of £351,542, in connection with a pre-emptive rights issue. Thisamount represents approximately 33.3 per cent. of the ordinary share capitalof the company in issue (excluding treasury shares) at 17 April 2012 (beingthe last practicable date prior to the publication of this Directors' Report).

Therefore, the maximum nominal value of shares or rights to subscribe for, or convert any security into, shares which may be allotted or granted under resolution 10 is £703,084.

Resolution 10 complies with guidance issued by the Association of British Insurers (ABI).

The authority granted by resolution 10 will expire on 31 August 2013 or, ifearlier, the conclusion of the next Annual General Meeting of the company. Thedirectors have no present intention to make use of this authority. However, ifthey do exercise the authority, the directors intend to follow emerging bestpractice as regards its use as recommended by the ABI.

Disapplication of pre-emption rights (11)

A special resolution will be proposed at the Annual General Meeting in respect of the disapplication of pre-emption rights.

Shares allotted for cash must normally first be offered to shareholders inproportion to their existing shareholdings. The directors will, at theforthcoming Annual General Meeting seek power to allot equity securities (asdefined by section 560 of the Companies Act 2006) or sell treasury shares forcash as if the pre-emption rights contained in Section 561 of the CompaniesAct 2006 did not apply:(a) in relation to pre-emptive offers and offers to holders of other equitysecurities if required by the rights of those securities or as the directorsotherwise consider necessary, up to a maximum nominal amount of £351,542 whichrepresents approximately 33.3 per cent. of the ordinary share capital of thecompany in issue (excluding treasury shares) and, in relation to rights issuesonly, up to a maximum additional amount of £351,542 which representsapproximately 33.3 per cent. of the ordinary share capital of the company inissue (excluding treasury shares), in each case as at 17 April 2012 (being thelast practicable date prior to the publication of this Directors' Report); and

(b) in any other case, up to a maximum nominal amount of £105,568 which represents approximately 10 per cent. of the ordinary share capital of the company in issue (excluding treasury shares) as at 17 April 2012 (being the last practicable date prior to the publication of this Directors' Report).

In compliance with the guidelines issued by the Pre-emption Group, thedirectors, will ensure that, other than in relation to a rights issue, no morethan 7.5% of the issued ordinary shares (excluding treasury shares) will beallotted for cash on a non pre-emptive basis over a rolling three year periodunless shareholders have been notified and consulted in advance.

The power in resolution 11 will expire when the authority given by resolution 10 is revoked or expires.

Notice of General Meetings (Resolution 12)

Resolution 12 will be proposed to allow the company to call general meetings(other than an Annual General Meeting) on 14 clear days' notice. A resolutionin the same terms was passed at the Annual General Meeting in 2011. The noticeperiod required by the Companies Act 2006 for general meetings of the companyis 21 days unless shareholders approve a shorter notice period, which cannothowever be less than 14 clear days. Annual General Meetings must always beheld on at least 21 clear days' notice. It is intended that the flexibilityoffered by this resolution will only be used for time-sensitive, non-routinebusiness and where merited in the interests of shareholders as a whole. Theapproval will be effective until the Company's next Annual General Meeting,when it is intended that a similar resolution will be proposed. In order to beable to call a general meeting on less than 21 clear days' notice, the companymust make a means of electronic voting available to all shareholders for thatmeeting.

Purchase of own Ordinary Shares (Resolution 13)

The effect of resolution 13 would be to renew the directors' current authorityto make limited market purchases of the company's ordinary shares of 10 penceeach. The power is limited to a maximum aggregate number of 1,055,684 ordinaryshares (representing approximately 10 per cent of the company's issued sharecapital as at 17 April 2012 (being the last practicable date prior topublication of this Directors' Report)). The minimum price (exclusive ofexpenses) which the company would be authorised to pay for each ordinary sharewould be 10 pence (the nominal value of each ordinary share). The maximumprice (again exclusive of expenses) which the company would be authorised topay for an ordinary share is an amount equal to the higher of (i) 105% of theaverage market price for an ordinary share for the five business dayspreceding any such purchase and (ii) the higher of the price of the lastindependent trade for an ordinary share and the highest current independentbid for an ordinary share as derived from the trading venue where the purchaseis to be carried out. The authority conferred by resolution 13 will expire atthe conclusion of the company's next Annual General Meeting or 15 months fromthe passing of the resolution, whichever is the earlier. Any purchases ofordinary shares would be made by means of market purchase through the LondonStock Exchange. If granted, the authority would only be exercised if, in theopinion of the directors, to do so would result in an increase in earnings pershare or net asset value per share and would be in the best interests ofshareholders generally. In exercising the authority to purchase ordinaryshares, the directors may treat the shares that have been bought back aseither cancelled or held as treasury shares (shares held by the companyitself). No dividends may be paid on shares which are held as treasury sharesand no voting rights are attached to them.As at 17 April 2012 (being the last practicable date prior to the publicationof this Directors' Report) the total number of options to subscribe for newordinary shares in the company was 798,000 shares representing 7.56% of thecompany's issued share capital (excluding treasury shares) as at that date.Such number of options to subscribe for new ordinary shares would representapproximately 8.40% of the reduced issued share capital of the company(excluding treasury shares) assuming full use of the authority to make marketpurchases sought under resolution 13.

Donations

No political or charitable donations were made during the year (2010:Nil).

Going concernThe group's business activities, together with the factors likely to affectits future development are set out in the Chairman's Statement on thepreceding page 2, the Mining Review on pages 5 to 9 and it's financialposition is set out on page15 of the Business Review. In addition Note 22 tothe financial statements includes the group's treasury policy, interest raterisk, liquidity risk and hedging profile.The group has considerable financial resources available and long term leaseswith the majority of its tenants of its property portfolio. The directors havea reasonable expectation of improved market conditions in 2012 with BlackWattle Colliery, its direct mining asset returning to profitability in thesecond half of 2011. As a consequence, the directors believe that the companyis well placed to manage its business risks successfully despite the loss forthe year. The group intends to negotiate new facilities in the UK before theexpiry of the current facility and have obtained confirmation from the RoyalBank of Scotland that they are not aware of any reason why the bank should notcontinue to support the company following the expiry of the currentfacilities.

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Other matters

PKF (UK) LLP has expressed its willingness to continue in office as auditor. A proposal will be made at the annual general meeting for its re-appointment, and for its remuneration to be determined by the directors.

By order of the boardHeather CurtisSecretary24 Bruton PlaceLondon W1J 6NE18 April 2012REMUNERATION REPORT

The remuneration committee is pleased to present its report for the year ended 31 December 2011 The remuneration committee is a formally constituted committee and is comprised exclusively of non-executive directors.

The members of the committee are Christopher Joll (chairman) and John Sibbald.

Remuneration policy for executive directors and non-executive directorsThe principal function of the remuneration committee is to determine, onbehalf of the Board, the remuneration and other benefits of the executivedirectors and senior executives, including pensions, share options and servicecontracts. The company's policy is to ensure that the executive directors arerewarded competitively in relation to other companies in order to retain andmotivate them. The emoluments of each executive director comprises basicsalary, a bonus at the discretion of the remuneration committee, provision ofa car, premiums paid in respect of individual defined contribution pensionarrangements, health insurance premium and share options.The remuneration committee receives updates on pay and employment conditionsapplying to other group employees. These are taken into consideration whensetting executive directors' remuneration consistent with the group's generalaim of seeking to reward all employees fairly according to the nature of theirrole, their performance and market forces.The remuneration of non-executive directors is determined by the board, andtakes into account additional remuneration for services outside the scope ofthe ordinary duties of non-executive directors. No pension costs are incurredon behalf of non-executive directors and they do not participate in the shareoption schemes.Service and employment contractsAll executive directors have full time contracts of employment with thecompany. Non-executive directors have contracts of service. No director has acontract of employment or contract of service with the company, its jointventure or associated companies with a fixed term which exceeds six months.All directors' contracts, as amended from time to time, have run from the dateof appointment. Details of the directors standing for re-election are givenunder 'Directors' in the Directors' report. The policy of the committee is notto grant employment contracts or contracts of service in excess of six monthsand there are no provisions for termination payments. A summary of terms ofservice and employment is as follows: Start date Unexpired Notice of contract term periodExecutive directorsM A Heller November 1972 Continuous 6 monthsA R Heller January 1994 Continuous 3 monthsG J Casey June 2010 Continuous 3 monthsR J Grobler April 2008 Continuous 3 monthsNon-executive directorsC A Joll February 2001 Continuous 3 monthsJ A Sibbald October 1988 Continuous 3 months

The following information has been audited:

Directors' remuneration

Total Salaries before

Pension Total Total

and fees Bonus Benefits Pensions

Contributions 2011 2010

£'000 £'000 £'000 £'000 £'000 £'000 £'000Executive DirectorsM A Heller 75 - - 75 - 75 75A R Heller 350 208 38 596 30 626 568G J Casey 105 50 8 163 14 177 119R Grobler 165 50 8 223 9 232 290 695 308 54 1,057 53 1,110 1,052Non- Executive DirectorsC A Joll 24 - - 24 - 24 20J A Sibbald 2 - 2 4 - 4 5 26 - 2 28 - 28 25Total 721 308 56 1,085 53 1,138 1,077

Pension schemes and incentives

Three (2010: three) directors have benefits under money purchase pension schemes. Contributions in 2011 were £53,000 (2010: £52,000), see table above. Directors are not entitled to benefits under any bonus or incentive schemes apart from the share option schemes details of which are set out below. Bonuses are awarded by the remuneration committee when merited.

Performance bonuses were awarded by the remuneration committee to three executive directors during 2011 (2010:3).

Share option schemesThe company has four "Unapproved" Share Option Schemes which are not subjectto HM Revenue and Customs (HMRC) approval. The "First Scheme" was approved byshareholders on 15 June 1999. The "Second Scheme" was approved by shareholderson 23 June 2005, options having been provisionally granted under it on 23September 2004, the "2006 Scheme" was approved by shareholders on 29 June2006, and the "2010 scheme" was approved by Shareholders on 7 June 2011. Allavailable options under each of the Schemes have been granted. Number of share options Options 31 Option 1 January Granted in December Exercisable Exercisable price* 2011 2011 2011 from toFirst SchemeA R Heller 34p 233,000 - 233,000 30/9/2005 29/9/2012Employee 34p 80,000 - 80,000 30/9/2005 29/9/2012Second SchemeA R Heller 149p 80,000 - 80,000 23/9/2007 22/9/2014The 2006 SchemeA R Heller 237.5p 275,000 - 275,000 4/10/2009 3/10/2016Employee 237.5p 50,000 - 50,000 4/10/2009 3/10/2016The 2010 SchemeG J Casey 202.5p 80,000 - 80,000 31/08/2013 30/08/2020

*Middle market price at date of grant

No consideration is payable for the grant of options under the UnapprovedShare Option Scheme or for the option granted under the 2010 Scheme. Theexercise of options under the Unapproved Share Option Schemes is subject tothe satisfaction of objective performance conditions specified by theremuneration committee, which will conform to institutional shareholderguidelines and best practice provisions in force from time to time. Theremuneration committee has not yet set these guidelines for the First Schemeand the 2006 Scheme. The performance conditions for the Second Scheme, agreedby members on 23 June 2005, requires growth in net assets over a three yearperiod to exceed the growth in the retail price index by a scale ofpercentages. The performance conditions for the option granted under the 2010Scheme, requires growth in group net assets over a three year period to exceedgrowth in the retail price index by a scale of percentages.

The middle market price of Bisichi Mining PLC ordinary shares at 31 December 2011 was 145p (2010-200p). During the year the share price ranged between 137.5p and 230p.

The following information is unaudited:

The board's policy is to grant options to executive directors, managers and staff at appropriate times to provide them with an interest in the longer term development of the group.

The following graph illustrates the company's performance compared with abroad equity market index over a five year period. Performance is measured bytotal shareholder return. The directors have chosen the FTSE All Share - TotalReturn Index as a suitable index for this comparison as it gives an indicationof performance against a large spread of quoted companies.Christopher JollChairman - remuneration committee24 Bruton PlaceLondonW1J 6NE18 April 2012AUDIT COMMITTEE REPORTThe committee's terms of reference have been approved by the board and followpublished guidelines, which are available from the company secretary. Theaudit committee comprises the two non-executive directors, Christopher Joll(chairman), an experienced financial PR executive and John Sibbald, a retiredchartered accountant.

The Audit Committee's prime tasks are to:

Review the scope of external audit, to receive regular reports from PKF (UK) LLP and to review the half-yearly and annual accounts before they are presented to the board, focusing in particular on accounting policies and areas of management judgment and estimation;

Monitor the controls which are in force to ensure the integrity of the information reported to the shareholders;

Assess key risks and to act as a forum for discussion of risk issues and contribute to the board's review of the effectiveness of the group's risk management control and processes;

Act as a forum for discussion of internal control issues and contribute to theboard's review of the effectiveness of the group's internal control and riskmanagement systems and processes;

Consider each year the need for an internal audit function;

Advise the board on the appointment of external auditors and rotation of theaudit partner every five years, and on their remuneration for both audit andnon-audit work, and discuss the nature and scope of their audit work;

Participate in the selection of a new external audit partner and agree 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 relationshipswith the company and any other parties that could affect independence or theperception of independence;

- a review of the auditors' own procedures for ensuring the independence of 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 todiscuss the audit plan and again prior to the publication of the annualresults. These meetings are attended by the external audit partner, managingdirector, director of finance and company secretary. Prior to bi-monthly boardmeetings the members of the committee meet on an informal basis to discuss anyrelevant matters which may have arisen. Additional formal meetings are held asnecessary.

During the past year the committee:

Met with the external auditors, and discussed their report to the 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 and not-audit services as set out in note 5 to the financial statements.

External Auditors

PKF (UK) LLP held office throughout the year. In the United Kingdom the company is provided with extensive administration and accounting services by London & Associated Properties PLC which has its own audit committee and employs a separate firm of external auditors, Baker Tilly UK Audit LLP. In South Africa PKF (Jhb) Inc. is the external auditor to the South African companies, and the work of that firm is reviewed by PKF (UK) LLP.

Christopher JollChairman - audit committee24 Bruton PlaceLondon W1J 6NE18 April 2012VALUERS' CERTIFICATES

To the directors of Bisichi Mining PLC

In accordance with your instructions we have carried out a valuation of the freehold property interests held as at 31 December 2011 by the company as detailed in our Valuation Report dated 2 February 2012.

Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2011 of the interests owned by the Company was £12,068,000 being made up as follows:

£000Freehold 9,118Leasehold 2,950 12,068

Leeds BNP Paribas Real Estate Advisory and Property Management UK Limited

2 February 2012 Regulated by Royal Institute of Chartered Surveyors

DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the directors' report,the directors' remuneration report and the financial statements in accordancewith applicable law and regulations. They are also responsible for ensuringthat the annual report includes information required by the Listing Rules ofthe Financial Services Authority.Company law requires the directors to prepare financial statementsfor each financial year. Under that law the directors are required to preparethe group financial statements in accordance with International FinancialReporting Standards as adopted by the European Union and have elected toprepare the parent company financial statements in accordance with UnitedKingdom Generally Accepted Accounting Practice (United Kingdom AccountingStandards and applicable law). Under company law the directors must notapprove the financial statements unless they are satisfied that they give atrue and fair view of the state of affairs of the company and the group and ofthe profit or loss of the group for that period.

In preparing these financial statements the directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgments and accounting estimates that are reasonable and prudent;

- state whether the group financial statements have been prepared in accordance with IFRSs as adopted by the European Union;

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

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company and the group will continue in business.

The directors are responsible for keeping adequate accountingrecords that are sufficient to show and explain the company's transactions, todisclose with reasonable accuracy at any time the financial position of thecompany and to enable them to ensure that the financial statements comply withthe Companies Act 2006 and Article 4 of the IAS Regulation. They are alsoresponsible for safeguarding the assets of the company and the group and hencefor taking reasonable steps for the prevention and detection of fraud andother irregularities.The directors are responsible for the maintenance and integrity ofthe corporate and financial information included on the company's website.Legislation in the United Kingdom governing the preparation and disseminationof the financial statements and other information included in annual reportsmay differ from legislation in other jurisdictions.

The directors confirm, to the best of their knowledge:

- that the group financial statements, which have been prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit or loss of the group; and

- that the management report included within the directors' reportincludes a fair review of the development and performance of the business andthe position of the company and the undertakings included in the consolidationtaken as a whole, together with a description of the principal risks anduncertainties that they face.

The names and functions of all the directors are stated on page 16.

INDEPENDENT AUDITOR'S REPORT

to the members of Bisichi Mining PLC

We have audited the financial statements of Bisichi Mining PLC forthe year ended 31 December 2011 which comprise the consolidated incomestatement, the consolidated statement of comprehensive income, theconsolidated and company balance sheets, the consolidated cash flow statement,the consolidated statement of changes in shareholders' equity and the relatednotes. The financial reporting framework that has been applied in thepreparation of the group financial statements is applicable law andInternational Financial Reporting Standards (IFRSs) as adopted by the EuropeanUnion. The financial reporting framework that has been applied in thepreparation of the parent company financial statements is applicable law andUnited Kingdom Accounting Standards (United Kingdom Generally AcceptedAccounting Practice).This report is made solely to the company's members, as a body, inaccordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit workhas been undertaken so that we might state to the company's members thosematters we are required to state to them in an auditor's report and for noother purpose. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the company and the company'smembers as a body, for our audit work, for this report, or for the opinions wehave formed.

Respective responsibilities of directors and auditor

As explained more fully in the directors' responsibilitiesstatement, the directors are responsible for the preparation of the financialstatements and for being satisfied that they give a true and fair view. Ourresponsibility is to audit and express an opinion on the financial statementsin accordance with applicable law and International Standards on Auditing (UKand Ireland). Those standards require us to comply with the Auditing PracticesBoard's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts anddisclosures in the financial statements sufficient to give reasonableassurance that the financial statements are free from material misstatement,whether caused by fraud or error. This includes an assessment of: whether theaccounting policies are appropriate to the group's and the parent company'scircumstances and have been consistently applied and adequately disclosed; thereasonableness of significant accounting estimates made by the directors; andthe overall presentation of the financial statements. In addition, we read allthe financial and non-financial information in the annual report & accounts toidentify material inconsistencies with the audited financial statements. If webecome aware of any apparent material misstatements or inconsistencies weconsider the implications for our report.

Opinion on financial statements

In our opinion:

- the financial statements give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2011 and of the group's loss for the year then ended;

- the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

- the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

- 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.

Opinion 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; and

- the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our opinion:

- 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.

Under the Listing Rules we are required to review:

- the directors' statement, set out on page 23, in relation to going concern; and

- the part of the corporate governance statement relating to the company's compliance with the nine provisions of the UK Corporate Governance Code specified for our review; and

- certain elements of the report to the shareholders by the board on directors' remuneration.

Stuart Barnsdall (Senior statutory auditor)for and on behalf of PKF (UK) LLP, Statutory auditorLondon, UK18 April 2012CONSOLIDATED INCOME STATEMENTfor the year ended 31 December 2011 2011 2011 2011 2010 Notes Trading Revaluations Total £'000 £'000 £'000 £'000 Group revenue 1 29,909 - 29,909 32,824Operating costs 2 (27,565) - (27,565) (32,976)Operating profit/(loss) beforedepreciation, fair valueadjustments and exchangemovements 2,344 - 2,344 (152)Depreciation 2 (2,488) - (2,488) (2,414)Operating loss before fair valueadjustments and exchange movements 1 (144) - (144) (2,566)Exchange (losses)/gains (975) - (975) 526 (Decrease)/Increase in valueof investment properties 3 - (42) (42) 245(Loss)/Gains on held for tradinginvestments - (167) (167) 90Operating loss 1 (1,119) (209) (1,328) (1,705)Share of profit/(loss) in joint ventures 13 21 (31) (10) 61Loss before interest and taxation (1,098) (240) (1,338) (1,644)Interest receivable 268 - 268 174Interest payable 6 (380) - (380) (343)Loss before tax 4 (1,210) (240) (1,450) (1,813)Taxation 7 762 142 904 527Profit/(Loss) for the year (448) (98) (546) (1,286) Attributable to: Equity holders of the company (346) (98) (444) (1,212)Non-controlling interest 27 (102) - (102) (74)Profit/(Loss) for the year (448) (98) (546) (1,286) Loss per share - basic 9 (3.30)p (0.93)p (4.23)p (11.60)pLoss per share - diluted 9 (3.30)p (0.93)p (4.23)p (11.60)p

Trading income reflects all the trading activity on mining and property operations. Revaluation Income reflects the revaluation of investment properties and other assets within the group and any proportion of these amounts within Joint Ventures. The total column represents the consolidated income statement presented in accordance with IAS 1.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEfor the year ended 31 December 2011 2011 2010 £'000 £'000 Loss for the year (546) (1,286) Other comprehensive income:Exchange differences on translationof foreign operations (575)

747

Taxation -

-

Other comprehensive income for the year net of tax (575)

747Total comprehensive incomefor the year net of tax (1,121) (539) Attributable to:Equity shareholders (958) (459)Non-controlling interest (163) (80) (1,121) (539)

Company Registration No. 112155

CONSOLIDATED BALANCE SHEETat 31 December 2011 2011 2010 Notes £'000 £'000AssetsNon-current assets

Value of investment properties 10 12,068

12,110Fair value of head lease 31 222 233 12,290 12,343

Mining reserves, plant and equipment 11 7,926

9,615Investments in joint ventures 12 2,579 3,607Other investments 12 148 150Total non-current assets 22,943 25,715 Current assetsInventories 16 1,206 705Trade and other receivables 17 6,067 4,719Corporation tax recoverable 133 115Held for trading investments 18 730 605Cash and cash equivalents 4,041 5,399 12,177 11,543

Non-current asset held for sale 14 1,785

-Total current assets 13,962 11,543Total assets 36,905 37,258 LiabilitiesCurrent liabilitiesBorrowings 20 (8,157) (1,759)Trade and other payables 19 (8,590) (7,865)Current tax liabilities - (362)Total current liabilities (16,747) (9,986) Non-current liabilitiesBorrowings 20 (86) (5,326)Provision for rehabilitation 21 (965) (1,025)Finance lease liabilities 31 (222) (233)Deferred tax liabilities 23 (1,881) (2,340)Total non-current liabilities (3,154) (8,924)Total liabilities (19,901) (18,910)Net assets 17,004 18,348 EquityShare capital 24 1,056 1,045Share premium account 169 -Translation reserve (446) 68Other reserves 25 500 485Retained earnings 15,494 16,356

Total equity attributable to equity shareholders 16,773

17,954Non-controlling interest 27 231 394Total equity 17,004 18,348

These financial statements were approved and authorised for issue by the board of directors on 18 April 2012 and signed on its behalf by:

A R Heller G J CaseyDirector Director

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY for the year ended 31 December 2011

Non- Share Share Translation Other Retained controlling Total capital Premium reserves reserves earnings Total interest equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2010 1,045 - (685) 480 18,460 19,300 19,300

Revaluation of investment properties - - - - 245 245 - 245Other income statement movements - - -

- (1,457) (1,457) (74) (1,531)Loss for the year - - - - (1,212) (1,212) (74) (1,286)Exchange adjustment - - 753 - - 753 (6) 747

Total comprehensive income for the year - - 753

- (1,212) (459) (80) (539)Dividend - - - - (418) (418) - (418)Equity share options - - 5 - 5 - 5

Disposal of shares in subsidiary - -

- (474) (474) 474 -

Balance at 1 January 2011 1,045 - 68 485 16,356 17,954 394 18,348Revaluation of investment properties - - - - (42) (42) - (42)Other income statement movements - - -

- (402) (402) (102) (504)Loss for the year - - - - (444) (444) (102) (546)Exchange adjustment - - (514) - - (514) (61) (575)

Total comprehensive income for the year - - (514) - (444) (958) (163) (1,121)Dividend 11 169 - - (418) (238) - (238)Equity share options - - - 15 - 15 - 15Balance at 31 December 2011 1,056 169 (446) 500 15,494 16,773 231 17,004CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 December 2011 Year ended Year ended 31 December 31 December 2011 2010 £'000 £'000Cash flows from operating activitiesOperating loss (1,328) (1,705)Adjustments for:Depreciation 2,488 2,414Share based payment expense 15 5Loss/(Gain) on investment held for trading 167

(90)

Unrealised loss/(gain) on investment properties 42

(245)

Share of profit of joint venture 21 - Cash flow before working capital 1,405

379

Change in inventories (501)

434

Change in trade and other receivables (2,385)

(2,150)

Change in trade and other payables 2,340

834

Change in provisions 124

253

Acquisitions of held for trading investments (291)

(6)

Cash generated from operations 692 (256)Interest received 268 174Interest paid (380) (343)Income tax received/(paid) 245 (112)Cash flow from operating activities 825

(537)

Cash flows from investing activitiesAcquisition of reserves, plant and equipment (2,528)

(2,639)

Proceeds from sale of investmentproperties, reserves, plant and equipment 7 -(Acquisitions)/Disposal of investments (888)

405

Cash flow from investing activities (3,409)

(2,234)

Cash flows from financing activitiesBorrowings drawn - 2,300Borrowings repaid (347) (231)Equity dividends paid (238) (418)Cash flow from financing activities (585)

1,651

Net (decrease)/increase in cash and cash equivalents (3,169) (1,120)

Cash and cash equivalents at 1 January 3,977

5,077

Exchange adjustment 306

20

Cash and cash equivalents at 31 December 1,114 3,977 Cash and cash equivalents at31 December comprise:Cash and cash equivalentsas presented in the balance sheet 4,041 5,399Bank overdrafts (secured) (2,927) (1,422) 1,114 3,977GROUP ACCOUNTING POLICIESfor the year ended 31 December 2011

Basis of accounting

The results for the year ended 31 December 2011 have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The principal accounting policies are described below:

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

International Accounting Standards (IAS/IFRS) The financial statements are prepared in accordance with International Financial Reporting Standards and Interpretations in force at the reporting date. These are prepared under the historic cost basis as modified by the revaluation of investment properties and held for trading investments.

During 2011 the following accounting standards and guidance were adopted by the group:

IAS 24 Related parties: The revised standard clarifies the definition of arelated party and includes an explicit requirement to disclose commitments torelated parties. The revised standard specifically defines associates of theultimate parent company as related parties of the group and they have beentreated as such in these financial statements.

IAS 1 Presentation of financial statements: Clarifies that entities may present the analysis of each component of other comprehensive income either in the statement of changes in equity or in the notes to the financial statements

During 2011 all other standards and interpretations that were mandatory forthe accounting period and were required to be adopted by the group either hadno material impact on the group's financial statements or were not relevant tothe operations of the group.

The group has not adopted any standards or interpretations in advance of the required implementation dates. It is not expected that adoption of any standards or interpretations which have been issued by the International Accounting Standards Board but have not been adopted will have a material impact on the financial statements.

Comparative information

The directors consider exchange gains/losses to be a material item. As a result exchange gains/losses are classified as a separate line item in the Income Statement. In the prior year, exchange gains/losses in the Income Statement were included within the line item "Operating costs". As a result the comparative amount for exchange gains/losses in the Income Statement, being an exchange gain of £526,000, is reclassified.

Key Judgements and Estimates

The directors consider their judgements and estimates surrounding the life ofthe mine and its reserves to have the most significant effect on the amountsrecognised in the financial statements and to be the area where the financialstatements are at most risk of a material adjustment due to estimationuncertainty.In addition the directors note that other areas, in particular the valuationof the investment properties, are considered to be less judgemental due to thenature of the underlying properties and the use of external valuers.

Basis of consolidation

The group accounts incorporate the accounts of Bisichi Mining Plc and all ofits subsidiary undertakings, together with the group's share of the results ofits joint ventures and associates. Non-controlling interests in subsidiariesare presented separately from the equity attributable to equity owners of theparent company. When changes in ownership in a subsidiary do not result in aloss of control, the non-controlling shareholders' interest are initiallymeasured at the non-controlling interests' proportionate share of thesubsidiaries net assets. Subsequent to this, the carrying amount ofnon-controlling interests is the amount of those interests at initialrecognition plus the non-controlling interests' share of subsequent changes inequity. Total comprehensive income is attributed to non-controlling interestseven if this results in the non-controlling interests having a deficitbalance.

Revenue

Revenue comprises sales of coal and property rental income. Revenue is recognised when delivery of the product or service has been made and when the customer has a legally binding obligation to settle under the terms of the contract and has assumed all significant risks and rewards of ownership.

Revenue is only recognised on individual sales of coal when all of thesignificant risks and rewards of ownership have been transferred to a thirdparty. In most instances revenue is recognised when the product is deliveredto the location specified by the customer, which is typically when loaded intotransport, where the customer pays the transportation costs.

Rental income is recognised in the group income statement on a straight-line basis over the term of the lease. This includes the effect of lease incentives.

Investment Properties

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 propertieswhen held for long-term rental yields, and after consideration has been givento a number of factors including length of lease, quality of tenant andcovenant, value of lease, management intention for future use of property,planning consents and percentage of property leased. Investment properties arerevalued annually by professional external surveyors and included in thebalance sheet at their fair value. Gains or losses arising from changes in thefair values of assets are recognised in the consolidated income statement inthe period to which they relate. In accordance with IAS 40, investmentproperties are not depreciated. Properties held for use in the business arenot recognised as investment properties and are held at depreciated historicalcost.

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

The cost of property, plant and equipment comprises its purchase price and anycosts directly attributable to bringing the asset to the location andcondition necessary for it to be capable of operating in accordance withagreed specifications. Freehold land is not depreciated. Other property, plantand equipment is stated at historical cost less accumulated depreciation.

The life of mine remaining as at year end is currently estimated at 5 years. The life of mine is kept under review and has remained unchanged from the prior year. A provision for rehabilitation of the mine is carried at fair value and is provided for over the life of mine. The provision includes the restoration of the underground, opencast and surface operations and is estimated to be utilised at the end of the life of mine of the group. The timing and final cost of the rehabilitation is uncertain and will depend on the duration of the mine life and the quantities of coal extracted from the reserves.

Mine reserves and development cost

The purpose of mine development is to establish secure working conditions and infrastructure to allow the safe and efficient extraction of recoverable reserves. Depreciation on mine development is not charged until production commences or the assets are put to use. On commencement of full production, depreciation is charged over the life of the associated mine reserves on a straight-line basis.

Surface mine development

Expenditure incurred prior to the commencement of working surface mine sites,net of any residual value and taking into account the likelihood of the sitebeing mined, is capitalised within property, plant and equipment and chargedto the income statement over the life of the recoverable reserves of thescheme.

Other assets and depreciation

The cost, less estimated residual value, of other property, plant andequipment is written off on a straight-line basis over the asset's expecteduseful life. Residual values and useful lives are reviewed, and adjusted ifappropriate, at each balance sheet date. Changes to the estimated residualvalues or useful lives are accounted for prospectively. Heavy surface miningand other plant and equipment is depreciated at varying rates depending uponits expected usage.

The depreciation rates generally applied are:

Mining equipment The shorter of its useful life or the life of the mine

Mining reserves Over the expected life of the reserves

Motor vehicles 25-33 per cent per annum

Office equipment 10-33 per cent per annum

Employee Benefits

Share based remuneration

The company operates a share option scheme. The fair value of the share optionscheme is determined at the date of grant. This fair value is then expensed ona straight-line basis over the vesting period, based on an estimate of thenumber of shares that will eventually vest. The fair value of options grantedis calculated using a binomial or Black-Scholes-Merton model. Details of theshare options in issue are disclosed in the Directors' Remuneration Report onpage 25 under the heading Share option schemes which is within the auditedpart of this 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 and within finance cost/income if arising from financing.

For consolidation purposes, income and expense items are included in theconsolidated income statement at average rates, and assets and liabilities aretranslated at year end exchange rates. Translation differences arising onconsolidation are recognised in other comprehensive income. Where foreignoperations are disposed of, the cumulative exchange differences of thatforeign operation are recognised in the consolidated income statement when thegain or loss on disposal is recognised.

Transactions in foreign currencies are translated at the exchange rate ruling on transaction date.

Financial Instruments

The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Bank loans and overdrafts

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 aleasehold interest and accounted for as investment property. The liability isinitially calculated as the present value of the minimum lease payments,reducing in subsequent reporting periods by the apportionment of payments tothe lessor.Interest rate derivatives

The group uses derivative financial instruments to manage the interest raterisk associated with the financing of the group's business. No trading in suchfinancial instruments is undertaken. At each reporting date, these interestrate derivatives are recognised at fair value, being the estimated amount thatthe group would receive or pay to terminate the agreement at the balance sheetdate, taking into account current interest rates and the current credit ratingof the counterparties. The gain or loss at each fair value re-measurement isrecognised immediately in the income statement.

Held for trading investments

Financial assets/liabilities held for trading or short-term gain are measuredat fair value and movements in fair value are charged/credited to the incomestatement in the period.Trade receivables

Trade receivables do not carry any interest and are stated at their nominalvalue as reduced by appropriate allowances for estimated recoverable amountsas the interest that would be recognised from discounting future cash paymentsover the short payment period is not considered to be material.

Trade payables

Trade payables are not interest bearing and are stated at their nominal value,as the interest that would be recognised from discounting future cash paymentsover the short payment period is not considered to be material.

Other Financial assets and liabilities

The groups other financial assets and liabilities not disclosed above are accounted for as shown below.

Financial assets:

- Cash and cash equivalents are measured at cash value.

- Other receivables at amount owed

- Other loans receivable at amount owed

Finance liabilities:

- Other payables at amount owing

Joint Ventures

Investments in joint ventures, being those entities over whose activities thegroup has joint control, as established by contractual agreement, are includedat cost together with the group's share of post acquisition reserves, on anequity basis.

Non-current assets held for sale

Non-current assets held for sale are measured at the lower of carrying amount and fair value less costs to sell.

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. Net realisable value is based on estimated selling price less all further costs to completion and all relevant marketing, selling and distribution costs.

Other Investments

Other investments that do not have a quoted market price in an active marketand whose fair value cannot be reliably measured are recognised at cost lessany provision for impairment.

Impairment

Whenever events or changes in circumstance indicate that the carrying amount of an asset may not be recoverable an asset is reviewed for impairment. An asset's carrying value is written down to its estimated recoverable amount (being the higher of the fair value less cost to sell and value in use) if that is less than the asset's carrying amount.

Deferred Tax

Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the tax computations, andis accounted for using the balance sheet liability method. Deferred taxliabilities are generally recognised for all taxable temporary differences anddeferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporarydifferences can be utilised. In respect of the deferred tax on the revaluationsurplus, this is calculated on the basis of the chargeable gains that wouldcrystallise on the sale of the investment portfolio as at the reporting date.The calculation takes account of indexation on the historical cost of theproperties and any available capital losses.Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the group income statement, except when it relates toitems charged or credited directly to other comprehensive income, in whichcase 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 equivalentscomprises short-term, highly liquid investments that are readily convertibleto known amounts of cash and which are subject to an insignificant risk ofchanges in value and original maturities of three months or less. The cash andcash equivalents shown in the cashflow statement are stated net of bankoverdrafts.

Segmental Reporting

For management reporting purposes, the group is organised into businesssegments distinguishable by economic activity. The group's only businesssegments are mining activities and investment properties. These businesssegments are subject to risks and returns that are different from those ofother business segments and are the primary basis on which the group reportsits segment information. This is consistent with the way the group is managedand with the format of the group's internal financial reporting. Significantrevenue from transactions with an individual customer, which makes up 10percent or more of the total revenue of the group, is separately disclosedwithin each segment.NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 December 20111. Segmental reportingBusiness analysis 2011 Mining Property Other Total £'000 £'000 £'000 £'000

Significant revenue customer A 8,577 - - 8,577 Significant revenue customer B 7,527 - - 7,527 Significant revenue customer C 2,280 - - 2,280 Other revenue

10,508 989 28 11,525Segment revenue 28,892 989 28 29,909Operating (loss)/profit before fairvalue adjustments & exchangemovements (787) 630 13 (144)Revaluation of investments &exchange movements (975) (42) (167) (1184) Operating (loss)/profitand segment result (1,762) 588 (154) (1,328)Segment assets 15,212 12,551 730 28,493Unallocated assets- Non-current assets 7Cash & cash equivalents 4,041Total assets excluding investmentin joint ventures 32,541Segment liabilities (7,928) (2,498) (27) (10,453)Borrowings (316) (5,000) - (5,316) (8,244) (7,498) (27) (15,769)Unallocated liabilities (4,132)Total liabilities (19,901)Net assets 12,640Investment in joint venturesnon segmental 4,364Net assets asper balance sheet 17,004Geographic analysis United South Kingdom Africa Other Unallocated Total £'000 £'000 £'000 £'000 £'000 Revenue 1,017 28,892 - - 29,909Operating profit/(loss) andsegment result 434 (1,762) - - (1,328)Non-current assets excludinginvestments 12,290 7,920 - 6 20,216Total net assets 5,725 6,944 57 4,278 17,004Capital expenditure 1 2,527 - - 2,528

1. Segmental reporting continued

Business analysis 2010 Mining Property Other Total £'000 £'000 £'000 £'000

Significant revenue customer A 11,265 - - 11,265 Significant revenue customer B 8,456 - - 8,456 Significant revenue customer C 3,398 - - 3,398 Other Revenue

8,707 975 23 9,705Segment revenue 31,826 975 23 32,824 Operating (loss)/profit beforefair value adjustments &exchange movements (3,190) 616 8 (2,566)Revaluation of investments& exchange movements 526 245 90 861 Operating (loss)/profit andsegment result (2,664) 861 98 (1,705)Segment assets 15,061 12,557 606 28,224Unallocated assets- Non-current assets 28Cash & cash equivalents 5,399Total assets excludinginvestment in joint ventures 33,651Segment liabilities (7,769) (2,473) (15) (10,257)Borrowings (663) (5,000) - (5,663) (8,432) (7,473) (15) (15,920)Unallocated liabilities (2,990)Total liabilities (18,910)Net assets 14,741Investment in joint venturesnon segmental 3,607Net assets as per balance sheet 18,348Geographic analysis United South Kingdom Africa Other Unallocated Total £'000 £'000 £'000 £'000 £'000 Revenue 998 31,826 - - 32,824Operating profit/(loss)and segment result 959 (2,664) - - (1,705)Non-current assets excludinginvestments 12,343 9,586 - 29 21,958Total net assets 5,637 6,604 63 6,044 18,348Capital expenditure 2 2,637 - - 2,6392. Operating costs 2011 2010 £'000 £'000 Mining 22,579 26,979Property 104 120Cost of sales 22,683 27,099Administration 7,370 8,291Operating costs 30,053 35,390The direct property costs are:Ground rent 6 9Direct property expense 70 81Bad debts 28 30 104 120

Operating costs above include depreciation of £2,488,000 (2010: £2,414,000)

3. Gain on revaluation and sale of investment properties

The reconciliation of the investment (deficit)/surplus to the (loss)/gain on revaluation of investment properties in the income statement is set out below:

2011 2010 £'000 £'000 Investment (deficit)/surplus (31) 258Gain on valuation movement inrespect of head lease payments (11) (13)(Loss)/Gain on revaluationof investment properties (42) 245 4. Loss before taxation

Loss before taxation is arrived at after charging/(crediting):

2011 2010 £'000 £'000Staff costs (see note 29) 5,872 6,036Depreciation 2,488 2,414Exchange loss/(gain) 975 (526)Fees payable to the company's auditorfor the audit of the company's annual accounts 26 40Fees payable to the company's auditorand its associates for other services:The audit of the company's subsidiaries,pursuant to legislation 34 32Other services 5 5

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

5. Directors' emoluments

Directors' emoluments are shown in the Directors' remuneration report on pages 24 and 25 under the heading Directors' remuneration which is within the audited part of this report.

6. Interest payable 2011 2010 £'000 £'000On bank overdrafts and bank loans 369 291Other interest payable 11 52Interest payable 380 343 7. Taxation 2011 2010 £'000 £'000

(a) Based on the results for the year:

Corporation tax - 352Adjustment in respect of prior years - UK - 6Adjustment in respect of prior years - SA (332) -Current tax (332) 358Deferred tax - current year (572) (885)Total tax in income statement (904) (527) (b) Factors affecting tax charge for the year:The corporation tax assessed for the year isdifferent from that at the standard rate ofcorporation tax in the United Kingdom of26.5% (2010: 28%) The differences are explained below:(Loss)/profit on ordinary activities before taxation (1,450) (1,813)Tax on (loss)/profit on ordinary activitiesat 26.5% (2010: 28%) (384) (508) Effects of:Expenses not deductible for tax purposes 30 84Capital (losses)/gains on disposal (11) 13Non-taxable income (37) -Other differences (170) (127)Adjustment in respect of prior years (332) 11Total tax (904) (527)

(c) Analysis of United Kingdom and Overseas tax

United Kingdom tax included in above:

Corporation tax - 300Adjustment in respect of prior years - 6Current tax - 306Deferred tax (201) 113 (201) 419Overseas tax included in above:Corporation tax - 52Adjustment in respect of prior years (332) -Current tax (332) 52Deferred tax (371) (998) (703) (946)8. Dividends paid 2011 2011 2010 2010 Per share £'000 Per share £'000Dividends paid duringthe year relatingto the prior period 4.00 p 418 4.00 p 418Dividends to be paid:Interim dividend for 2011 paid onthe 3 February 2012 1.00 p 105 1.00 p 105

Proposed final dividend for 2011 3.00 p 317 3.00 p 313

4.00 p 422 4.00 p 418

The dividends to be paid are not accounted for until they have been approved at the Annual General Meeting. The amount will be accounted for as an appropriation of retained earnings in the year ending 31 December 2012.

9. Loss and diluted loss per share

Both the basic and diluted loss per share calculations are based on a loss of£546,000 (2010: £1,286,000). The basic loss per share have been calculated ona weighted average of 10,495,395 (2010: 10,451,506) ordinary shares being inissue during the period. The diluted loss per share have been calculated onthe weighted average number of shares in issue of 10,495,395 (2010:10,451,506) plus the dilutive potential ordinary shares arising from shareoptions of nil (2010: nil) totalling 10,495,395 (2010: 10,451,506).

Dilutive potential ordinary shares of 239,607 (2010: 279,790) were excluded from the calculation of diluted ordinary shares as there was no dilutive effect due to the loss for the year.

10. Investment properties Long Freehold Leasehold Total £'000 £'000 £'000 Valuation at 1 January 2011 9,110 3,000 12,110Revaluation 8 (50) (42)

Valuation at 31 December 2011 9,118 2,950 12,068

Valuation at 1 January 2010 8,865 3,000 11,865 Revaluation

245 - 245

Valuation at 31 December 2010 9,110 3,000 12,110

Historical costAt 31 December 2011 4,801 728 5,529At 31 December 2010 4,801 728 5,529

Long leasehold properties are those for which the unexpired term at the balance sheet date is not less than 50 years.

All investment properties are held for use in operating leases and all properties generated rental income during the period.

Freehold and Long Leasehold properties were externally professionally valued at 31 December on an open market basis by:

2011 £'000

BNP Paribas Real Estate 12,068,000

12,068,000

The valuations were carried out in accordance with the Statements of Asset Valuation and Guidance Notes published by

The Royal Institution of Chartered Surveyors.

11. Mining reserves, plant and equipment

Mining Mining Motor Office Reserves equipment Vehicles equipment Total £'000 £'000 £'000 £'000 £'000 Cost at 1 January 2011 2,212 14,940 429 128 17,709Exchange adjustment (397) (2,683) (53) (14) (3,147)Additions - 2,526 - 2 2,528Disposals - (316) (206) (1) (523)Cost at 31 December 2011 1,815 14,467 170 115 16,567Accumulated depreciationat 1 January 2011 1,768 5,897 345 84 8,094Exchange adjustment (318) (1,059) (41) (7) (1,425)Charge for the year 73 2,383 22 10 2,488Disposals in year - (316) (199) (1) (516)Accumulated depreciationat 31 December 2011 1,523 6,905 127 86 8,641Net book value at31 December 2011 292 7,562 43 29 7,926 Cost at 1 January 2010 1,911 12,581 387 119 14,998Exchange adjustment 318 2,094 42 12 2,466Additions - 2,637 - 2 2,639Disposals (17) (2,372) - (5) (2,394)Cost at 31 December 2010 2,212 14,940 429 128 17,709Accumulated depreciation at1 January 2010 1,407 5,195 271 68 6,941Exchange adjustment 267 829 31 6 1,133Charge for the year 111 2,245 43 15 2,414Disposals in year (17) (2,372) - (5) (2,394)Accumulated depreciationat 31 December 2010 1,768 5,897 345 84 8,094Net book value at31 December 2010 444 9,043 84 44 9,615

12. Investments held as non-current assets

2011 2010 Joint Joint Ventures 2011 Ventures 2010 Assets Other Assets Other £'000 £'000 £'000 £'000At 1 January 2,404 433 2,343 779Disposals - - - (405) Transfers (703)Additions 888 - - -Exchange adjustment - (2) - 59Share of (loss)/gain in joint ventures (10) - 61 -Net assets at 31 December 2,579 431 2,404 433Loan to joint venture:At 1 January 1,203 - 916 -Exchange adjustments (216) 152Additions 116 - 135 -Transfers (1,103) - - -At 31 December - - 1,203 -At 31 December 2,579 431 3,607 433 Provision for diminution in value:At 1 January - (283) - (283)Write down of investment - - - -At 31 December - (283) - (283)Net book value at 31 December 2,579 148 3,607 150 2011 2010 £'000 £'000 Included in other investments are:Net book value of unquoted investments 135 133Net book value of investments listed 13 17

on overseas Stock exchanges

148 150Market value of the overseas 13 17listed investments13. Joint venturesThe company owns 50% of the issued share capital of Dragon Retail PropertiesLimited, an unlisted property investment company. The remaining 50% is held byLondon & Associated Properties PLC. Dragon Retail Properties Limited isincorporated in England and Wales. It has issued share capital of 500,000(2010: 500,000) ordinary shares of £1 each.

During the year the company acquired 12.5% of the units of Langney Shopping Centre Unit Trust, an unlisted property unit trust incorporated in Jersey. 12.5% of the units in the trust are held by London & Associated Properties PLC and 75% are held by Columbus UK GP limited, a partner acting on behalf of Columbus UK Real Estate Fund.

The company owns 49% of the issued share capital of Ezimbokodweni Mining (pty) Limited. This asset is reclassified as a non-current asset held for sale. Details of non-current assets held for sale are shown under note 14.

Langney Dragon 12.5% 50% 2011 2010 £'000 £'000 £'000 £'000 Turnover 87 96 183 103Profit and loss(Loss)/Profit before tax 21 (30) (9) 61Taxation - (1) (1) -(Loss)/Profit after taxation 21 (31) (10) 61Balance sheetNon-current assets 2,000 1,519 3,519 2,786Current assets 112 1,313 1,425 1,339Current liabilities (100) (1,031) (1,131) (2,264)Non-current liabilities (1,124) (110) (1,234) (140)

Share of net assets at 31 December 888 1,691 2,579 1,721

14. Non-current assets held for sale

2011 £'000 At 1 January -Transfer of stake in joint venture 1,785company now held for saleNet assets at 31 December 1,785

On 26 January 2012 the Company announced that it had entered into an agreement for the sale of its 49% participation in a South African registered joint venture company, Ezimbokodweni Mining (Proprietary) Limited ("Ezimbokodweni"), for ZAR 54.2 million.

Ezimbokodweni was established in 2005 with Endulwini Coal Limited to acquire from BHP Billiton Energy Coal South Africa Limited ("BECSA") a shallow coal deposit located in the Witbank coalfield of Mpumalanga, some 40 km from the Company's existing coal mining operations at the Black Wattle colliery. Since then, Ezimbokodweni has been negotiating with BECSA and the South African Department of Mineral Resources ("DMR") to finalise the acquisition and prepare for opencast mining.

In 2011, following the intervention of the DMR, the Company agreed to dispose of its stake in Ezimbokodweni. The agreement made on 26 January 2012 was conditional on the satisfaction by 15 May 2012 of conditions precedent, the last of which is the consent of the DMR, which is awaited.

15. Subsidiary companies

The company owns the following ordinary share capital of the principalsubsidiaries which are included within the consolidated financial statements: Percentage of Country of Activity share capital incorporation Mineral Products Limited Share dealing 100% England and WalesBlack Wattle Colliery (pty) Limited Coal mining 62.5% South AfricaBisichi Coal Mining (pty) Limited Coal mining 100% South AfricaBisichi Mining (Exploration) Limited Holding company 100% England and WalesNinghi Marketing Limited Dormant 90.1% England

and Wales

Details on the non-controlling interest in subsidiaries are shown under note 27.16. Inventories 2011 2010 £'000 £'000CoalWashed 284 540Run of mine 440 122Work in progress 432 -Other 50 43 1,206 705

17. Trade and other receivables

2011 £'000 2010 £'000Amounts falling due within one year:Trade receivables 5,818 3,791Other receivables 130 112

Prepayments and accrued income 119 816

6,067 4,719

18. Held for trading investments

2011 2010 £'000 £'000Market value of Listed Investments:Listed in Great Britain 657 522Listed outside Great Britain 73 83 730 605Original cost of Listed Investments 749 458

Unrealised (deficit)/surplus of market value over cost (19) 147

19. Trade and other payables

2011 £'000 2010 £'000Trade payables 4,313 3,604Amounts owed to joint ventures 1,205 1,205Other payables 528 687

Accruals and deferred income 2,544 2,369

8,590 7,865

20. Financial liabilities - borrowings

Current Non-current 2011 2010 2011 2010 £'000 £'000 £'000 £'000Bank overdraft (secured) 2,927 1,422 - -Bank loan (secured) 5,230 337 86 5,326 8,157 1,759 86 5,326 2011 2010 £'000 £'000Bank overdraft and loaninstalments by referenceto the balance sheet date:Within one year 8,157 1,759From one to two years 86 5,326From two to five years - - 8,243 7,085Bank overdraft and loan analysisby origin:United Kingdom 5,000 5,000Southern Africa 3,243 2,086 8,243 7,086The United Kingdom bank loans and overdraft are secured by way of a firstcharge over the investment properties in the UK which are included in thefinancial statements at a value of £12,068,000. The South African bank loansare secured by way of a first charge over specific pieces of mining equipmentand the debtors of the relevant company which holds the loan which are includein the financial statements at a value of £8,482,000.Consistent with others in the mining and property industry, the group monitorsits capital by its gearing levels. This is calculated as the net debt (loansless cash and cash equivalents) as a percentage of the equity. During 2011this increased to 25.1% (2010: 9.4%) which was calculated as follows: 2011 2010 £'000 £'000Total debt 8,243 7,085Less cash and cash equivalents (4,041) (5,399)Net debt 4,202 1,686Total equity 16,773 17,954Gearing 25.1% 9.4%

21. Provision for rehabilitation

2011 2010 £'000 £'000As at 1 January 1,025 772Exchange adjustment (184) 125Additions 124 128

As at 31 December 965 1,025

22. Financial instruments

Treasury policyThe group enters into derivative transactions such as interest rate swaps andforward exchange contracts as necessary in order to help manage the financialrisks arising from the group's activities. The main risks arising from thegroup's financing structure are interest rate risk, liquidity risk, marketrisk, credit risk, currency risk and commodity price risk. There have been nochanges during the year of the main risks arising from the group's financestructure. The policies for managing each of these risks and the principaleffects 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 orcashflows associated with the instrument will fluctuate due to changes inmarket interest rates. Interest rate risk arises from interest bearingfinancial assets and liabilities that the group uses. Treasury activities takeplace under procedures and policies approved and monitored by the Board tominimise the financial risk faced by the group. Interest bearing assetscomprise cash and cash equivalents which are considered to be short-termliquid assets and loans to joint ventures. Interest bearing borrowingscomprise bank loans, bank overdrafts and variable rate finance leaseobligations. The rates of interest vary based on LIBOR in the UK and PRIME inSouth Africa.As at 31 December 2011, with other variables unchanged, a 1% increase ordecrease in interest rates, on investments and borrowings whose interest ratesare not fixed, would respectively decrease or increase the loss for the yearby £28,000 (2010: £27,000). The effect on equity of this change would be anequivalent decrease or increase for the year of £28,000 (2010: £27,000).

Liquidity risk

The group's policy is to minimise refinancing risk. Efficient treasurymanagement and strict credit control minimise the costs and risks associatedwith this policy which ensures that funds are available to meet commitments asthey fall due. As at year end the group held borrowing facilities in the UK inBisichi Mining Plc and in South Africa in Black Wattle Colliery (Pty) Ltd. Thecompany was within its bank borrowing facilities and had not breached any ofits covenants. New borrowings were signed in March 2010 in both the UK andSouth Africa. Further details are provided in borrowing facilities informationlater in this note. Trade and other payables are all due within one year.

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

2011 2010 £'000 £'000Sterling 2,304 3,710

South African Rand 1,737 1,689

4,041 5,399

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

Market riskThe group is exposed to market price risk through interest rate and currencyfluctuations and commodity price risk.

Credit risk

The group is exposed to credit risk on its cash and cash equivalents and tradeand other receivables as per the balance sheet. At the balance sheet datethere was no significant concentration of credit risk. The maximum exposure tocredit risk is represented by the carrying amount of each financial asset inthe balance sheet which at year end amounted to £9,989,000 (2010: £9,302,000).Trade debtor's credit ratings are reviewed regularly. The group only depositssurplus cash with well-established financial institutions of high qualitycredit standing. As at year end the amount of material receivables held pastdue date was £313,000 (2010: £nil). The amount of material receivables heldpast due date has subsequently been settled.

Financial assets maturity

On 31 December 2011, cash at bank and in hand amounted to £4,041,000 (2010:£5,399,000) which is invested in short term bank deposits maturing within oneyear bearing interest at the bank's variable rates. Cash and cash equivalentsall have a maturity of less than 3 months.

Total financial assets and liabilities

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

Financial Assets at Liabilities fair value measured through Loans at amortised profit and and receivables cost loss 2011 2010 £'000 £'000 £'000 £'000 £'000 Cash and cash equivalents 4,041 - - 4,041 5,399Investments held for trading - - 730 730 605Other Investments - - 148 148 150Trade and other receivables 5,948 - - 5,948 3,903Bank Borrowings - (8,243) - (8,243) (7,085)Finance leases - (222) - (222) (233)Other Liabilities - (8,407) - (8,407) (7,677) 9,989 (16,872) 878 (6,005) (4,938)

Investments held for trading fall under level 1 of the fair value hierarchyinto which fair value measurements are recognised in accordance with thelevels set out in IFRS 7. Other investments are held at cost. The directorsare of the opinion that the difference in value between cost and fair value ofother investments is not significant or material. The comparative figures for2010 fall under the same category of financial instrument as 2011.

Borrowing facilities

In the UK, a term loan facility of £5million and an overdraft facility of£2million were signed by Bisichi Mining Plc in March 2010 with Royal Bank ofScotland. This facility will expire in December 2012 and is secured againstthe group's UK retail property portfolio. The group intends to negotiate newfacilities before the expiry of the current facility and have obtainedconfirmation from the Royal Bank of Scotland that they are not aware of anyreason why the bank should not continue to support the company following theexpiry of the current facilities.In South Africa, a structured trade finance facility of R60million (SouthAfrican Rand) was signed by Black Wattle Colliery (pty) Limited in March 2010with Absa Bank Limited, a South African subsidiary of Barclays Bank PLC. Thefacility is renewed annually and is secured against inventory, debtors andcash that are held by Black Wattle Colliery (pty) Limited. This facilitycomprises of a R40million revolving loan to cover the working capitalrequirements of the group's South African operations, and a R20million loanfacility to cover guarantee requirements related to the group's South Africanmining operations.At 31 December 2011 the group was within its bank borrowing facilities and hadnot breached any of its covenants. Term loan repayments are as set out in Note20. Details of other financial liabilities are shown in notes 19 and 20.

Commodity price risk

Commodity price risk is the risk that the group's future earnings will be adversely impacted by changes in the market of commodities. The group is exposed to commodity price risk as its future revenues will be derived based on a contract with a physical off-take partner at prices that will be determined by reference to market prices of coal at the delivery date.

From time to time the group may manage its exposure to commodity price risk by entering into forward sales contracts with the goal of preserving future revenue streams.

Foreign exchange risk

All trading is undertaken in the local currencies. Funding is also in local currencies other than inter-company investments and loans and it is not thegroup's policy to obtain forward contracts to mitigate foreign exchange risk on these amounts.

As a result of the group's mining assets being held in South Africa and havinga functional currency different than the presentation currency, the groupbalance sheet can be affected significantly by movements in the poundssterling to the South African Rand. During 2011 and 2010 the group did nothedge its exposure of foreign investments held in foreign currencies. There isno significant impact on profit and loss from foreign currency movementsassociated with these South African subsidiary assets and liabilities as theeffect of foreign currency gains or losses arising are recorded through thetranslation reserve.

The effect of a movement in foreign currencies on the income statement and equity of the group is shown in the sensitivity analysis below:

Profit and loss Equity Equity 2011 2010 2011 2010 £'000 £'000 £'000 £'000If there were a 10% weakeningof the South African Rand againstSterling with all other variables (260) (136) (511) (573)held constant - (decrease)If there were a 10% strengtheningof the South African Rand againstSterling with all other variables 321 181 625 701held constant - increase23. Deferred taxation 2011 2010 £'000 £'000Balance at 1 January 2,340 2,985Recognised in income (572) (885)Reallocated 291 -Exchange adjustment (178) 240 1,881 2,340 The deferred taxbalance comprisesthe following:Revaluation of properties 1,086 1,229Capital allowances (1,308) 552

Short-term timing differences 2,103 559

1,881 2,34024. Share capital 2011 2010 £'000 £'000Authorised: 13,000,000 ordinary 1,300 1,300shares of 10p eachAllotted and fully paid: 1,056 1,04510,556,839 (2010: 10,451,506)ordinary shares

During the year 105,333 shares were issued at par as part of a scrip dividend paid relating to the prior year.

25. Other reserves 2011 2010 £'000 £'000Equity share options 414 399Net premium on share capital 86 86in joint venture 500 48526. Share based payments

Details of the share option scheme are shown in the Directors' remuneration report on page 24 and 25 under the heading Share option schemes which is within the audited part of this report. Further details of the share option schemes are set out below.

The Bisichi Mining PLC Unapproved Option Schemes:

Year of grant Number of Number of Number of share for share share which Period for which options options Subscription within options issued/ outstanding price which outstanding at (cancelled) at 31 per options 31 December during December share exercisable 2010 year 20112002 Sep 2005 - 34.0p Sep 2012 313,000 - 313,0002004 Sep 2007 - 149.0p Sep 2014 80,000 - 80,0002006 Oct 2009 - 237.5p Oct 2016 325,000 - 325,0002010 Aug 2013 - 202.5p Aug 2020 80,000 - 80,000The exercise of options under the Unapproved Share Option Schemes is subjectto the satisfaction of objective performance conditions specified by theremuneration committee, which will conform to institutional shareholderguidelines and best practice provisions in force from time to time. Theremuneration committee has not yet set these guidelines for the first schemeand the 2006 scheme. The performance conditions for the 2004 and 2010 scheme,agreed by members on 23 June 2005 and 31 August 2010 respectively, requiresgrowth in net assets over a three year period to exceed the growth of theretail prices index by a scale of percentages.

The 2010 options were valued at £45,000 at date of grant using the Black-Scholes-Merton model with the following assumptions:

Expected volatility 62.80%Expected life 4.00 YearsRisk free rate 1.44 %Expected dividends 1.95 %Expected volatility was determined by reference to the historical volatilityof the share price over a period commensurate with the option's expected life.The expected life used in the model is based on the risk-averse balance likelyto be required by the option holders. 2011 2010 Weighted Weighted average average 2011 Exercise 2010 Exercise Number price Number price

Outstanding at 1 January 798,000 145.2p 718,000 138.9p Granted / (cancelled) during year - - 80,000 202.5p Outstanding at 31 December 798,000 145.2p 798,000 145.2p Exercisable at 31 December 718,000 138.9p 718,000 138.9p

27. Non-controlling Interest

2011 2010 £'000 £'000As at 1 January 394 -Issue of shares in subsidiary - 474Share of loss for the year (102) (74)Exchange adjustment (61) (6)As at 31 December 231 394The issue of shares in subsidiary in 2010 relates to the disposal of a 37.5%shareholding in Black Wattle Colliery (pty) Ltd. The total issued sharecapital in Black Wattle Colliery (pty) Ltd has been increased from 136 sharesto 1000 shares at par of R1 (South African Rand) through the following sharesissue:

- a subscription for 489 ordinary shares at par by Bisichi Mining (Exploration) Limited increasing the number of shares held from 136 ordinary shares to a total of 675 ordinary shares;

- 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

Bisichi Mining (Exploration) Limited is a wholly owned subsidiary of Bisichi Mining PLC incorporated in England and Wales.

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

The "A" shares will rank pari passu with the ordinary shares save that they will have no dividend rights until such time as the dividends paid by Black Wattle Colliery (pty) Ltd on the ordinary shares subsequent to 30 October 2008 will equate to R832,075,000.

A non-controlling interest of 15% in Black Wattle Colliery (pty) Ltd is recognised for all profits distributable to the 110 ordinary shares held by Vunani Mining (pty) Ltd from the date of issue of the shares (18 October 2010). An additional non-controlling interest will be recognised for all profits distributable to the 265 "A" shares held by Vunani Mining (pty) Ltd after such time as the profits available for distribution, in Black Wattle Colliery (pty) Ltd, before any payment of dividends after 30 October 2008, exceeds R832,075,000.

28. Related Party Transactions

At During 31 December the year Costs Amounts Amounts recharged Cash owed owed (to) / by paid (to) to related by related related / by related party party party party £'000 £'000 £'000 £'000Related party:London & Associated Properties PLC(note (a)) 367 - 275

(234)

Langney Shopping Centre Unit Trust(note (b)) - (15) (21)

6

Dragon Retail Properties Limited(note (c)) 1,205 - (42)

42

Ezimbokodweni Mining (pty) Limited(note (d)) - (1,103) 100 -As at 31 December 2011 1,572 (1,118) 312 (186) London & Associated Properties PLC(note (a)) 326 - 275

(92)

Langney Shopping Centre Unit Trust(note (b)) - - -

-

Dragon Retail Properties Limited(note (c)) 1,205 - (72)

72

Ezimbokodweni Mining (pty) Limited(note (d)) - (1,203) (287) -As at 31 December 2010 1,531 (1,203) (84) (20)

London & Associated Properties PLC is a substantial shareholder.

Langney Shopping Centre Unit Trust and Dragon Retail Properties Limited is a joint venture and is treated as a non-current asset investment.

Ezimbokodweni Mining (pty) Limited is a joint venture and is treated as a non-current asset held for sale as shown under Note 14.

(a) London & Associated Properties PLC Property management, office premises, general management, accounting and administration services are provided for Bisichi Mining PLC and its UK subsidiaries.

(b) Langney Shopping Centre Unit Trust

Langney Shopping Centre Unit Trust is an unlisted property unit trust incorporated in Jersey.

(c) Dragon Retail Properties Limited

Dragon Retail Properties Limited is owned equally by the company and London & Associated Properties PLC.

(d) Ezimbokodweni Mining (pty) Limited

Ezimbokodweni Mining is a prospective coal production company based in South Africa.

Details of key management personnel compensation and interest in share optionsare shown in the Directors' Remuneration Report on pages 24 and 25 under theheadings Directors' remuneration, Pension schemes and incentives and Shareoption schemes which is within the audited part of this report. The totalemployers national insurance paid in relation to the remuneration of keymanagement was £117,000.29. Employees 2011 2010 Number NumberThe average weekly numbersof employees of the group duringthe year were as follows:Production 229 257Administration 18 18 247 275 £'000 £'000Staff costs during the yearwere as follows:Salaries 5,485 5,666Social security costs 117 111Pension costs 255 254Share based payments 15 5 5,872 6,03630. Capital commitments 2011 2010 £'000 £'000Commitments for capital expenditure 558 146approved but not contracted forat the year endShare of commitment of capital - 2,451expenditure in joint venture31. Head lease commitments and future property lease rentals

Present value of head leases on properties

Minimum Present value lease of payments Minimum lease payments 2011 2010 2011 2010 £'000 £'000 £'000 £'000Within one year 13 14 13 14Second to fifth year 53 56 50 52After five years 1,627 1,708 159 167 1,693 1,778 222 233Discounting adjustment (1,471) (1,545) - -Present value 222 233 222 233Finance lease liabilities are in respect of leased investment property. Manyof the leases provide for contingent rents in addition to the rents abovewhich are a proportion of rental income. Finance lease liabilities areeffectively secured as the rights to the leased asset revert to the lessor inevent of default.

The group leases out its investment properties under operating leases. The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:

2011 2010 £'000 £'000Within one year 902 805Second to fifth year 2,669 2,707After five years 10,169 10,650 13,740 14,162

32. Contingent liabilities

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 securedagainst the assets of the company and have been issued in respect of thefollowing: 2011 2010 £'000 £'000Rail siding 2 3Rehabilitation of mining land 1,599 1,732Water & electricity 74 90

Company Registration No. 112155

COMPANY BALANCE SHEETat 31 December 2011 2011 2010 Notes £'000 £'000Fixed assetsTangible assets 34 12,075 12,138Investment in joint ventures 35 1,734 846Other investments 35 1,698 1,013 15,507 13,997Current assetsDebtors 36 2,584 2,794Bank balances 3,237 4,841 5,821 7,635Creditors - amounts fallingdue within one year 37 (7,394) (2,508)Net current (liabilities)/assets (1,573) 5,127Total assets less current liabilities 13,934 19,124Creditors - amounts falling duein more than one year -medium term bank loan 37 - (5,000)Net assets 13,934 14,124 Capital and reservesCalled up share capital 24 1,056 1,045Share premium account 24 169 -Revaluation reserve 39 6,141 6,183Other reserves 39 415 400Retained earnings 39 6,153 6,496Shareholders' funds 13,934 14,124

The company financial statements were approved and authorised for issue by the board of directors on 18 April 2012

and signed on its behalf by:A R Heller G J CaseyDirector DirectorCOMPANY ACCOUNTING POLICIESfor the year ended 31 December 2011

The following are the main accounting policies of the company:

Accounting convention

The financial statements have been prepared under the historical cost convention, as modified by the revaluation of investment properties, and in accordance with applicable UK Generally Accepted Accounting Practice.

Dividends 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

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.

Investment properties

The investment property portfolio is included in the financial statements atopen market valuation. An external professional valuation is carried outannually by professional external surveyors. Surpluses and deficits arising onvaluations are taken direct to the revaluation reserve. No depreciation oramortisation is provided in respect of freehold and leasehold investmentproperties. The directors consider that this accounting policy, which is notin accordance with the Companies Act 2006, results in the accounts giving atrue and fair view. Depreciation or amortisation is only one of many factorsreflected in the valuation and the amount which might otherwise have beenshown cannot be separately identified or quantified.

Investments

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

Financial Instruments

Bank loans and overdrafts

Bank loans and overdrafts are included in creditors on the company balance sheet net of the unamortised cost of financing.

Interest payable on those facilities is expensed as a finance cost in the period to which it relates.

Interest rate derivatives

The company uses derivative financial instruments to manage the interest raterisk associated with the financing of the group's business. No trading in suchfinancial instruments is undertaken.

Debtors

Debtors do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated recoverable amounts.

Creditors

Creditors are not interest bearing and are stated at their nominal value.

Joint Ventures

Investments in joint ventures, being those entities over whose activities thegroup has joint control as established by contractual agreement, are includedat cost, less impairment.Deferred taxationAs required by FRS 19 "Deferred Tax", full provision is made for deferred taxarising from all timing differences between the recognition of gains andlosses in the financial statements and recognition in the tax computation,except for those timing differences in respect of which the standard specifiesthat deferred tax should not be recognised. Deferred tax assets andliabilities are calculated at the tax rates expected to be effective at thetime the timing differences are expected to reverse.

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

The company makes contributions to a money purchase scheme and the costs are charged to the profit and loss account in the period to which they relate.

Share based remuneration

The company operates a share option scheme. The fair value of the share optionscheme is determined at the date of grant. This fair value is then expensed ona straight-line basis over the vesting period, based on an estimate of thenumber of shares that will eventually vest. The fair value of options grantedis calculated using a binomial model or Black-Scholes-Merton model. Details ofthe share options in issue are disclosed in the Directors' Remuneration Reporton pages 24 and 25 under the heading Share option schemes which is within theaudited part of this report.

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

For the year ended 31 December 2011

33. Dividends

The aggregate amount of dividends comprises:

2011

2010

£'000

£'000

Final dividends in respect of prior year 418

418

but not recognised as liabilities in that year:The aggregate amount of dividends to be paid and not recognised as liabilitiesas at year end is £422,000 (2010: £418,000).34. Tangible fixed assets Investment properties Long Motor Office Freehold leasehold vehicles equipment Total £'000 £'000 £'000 £'000 £'000Cost or valuationat 1 January 2011 9,110 3,000 137 51 12,298Additions - - - 1 1Disposals - - (89) - (89)Revaluation 8 (50) - - (42)Cost or valuationat 31 December 2011 9,118 2,950 48 52 12,168 At valuation 9,118 2,950 - - 12,068At cost - - 48 52 100 9,118 2,950 48 52 12,168 Accumulated depreciationat 1 January 2011 - - 117 43 160Charge for the year - - 13 3 16Disposals in year - - (83) - (83)Accumulated depreciationat 31 December 2011 - - 47 46 93Net book valueat 31 December 2011 9,118 2,950 1 6 12,075Net book valueat 31 December 2010 9,110 3,000 20 8 12,138

Details of historical cost of investment properties are shown in note 10.

35. Investments Joint ventures Subsidiaries Other investments Shares Shares Loans Total £'000 £'000 £'000 £'000 £'000Cost at 1 January 2011 846 361 1,313 300 1,974Invested during the year 888 - - - -Drawn in year - - 7 - 7Cost at 31 December 2011 1,734 361 1,320 300 1,981 Provision for impairmentAs at 1 January - - (678) (283) (961)Transfer - - 678 - 678As at 31 December 2011 - -

- (283) (283)Net book valueat 31 December 2011 1,734 361 1,320 17 1,698Net book valueat 31 December 2010 846 361 635 17 1,013

Other investments comprise £17,000 (2010: £17,000) shares and £nil (2010:£nil) loans.

Investments in subsidiaries are detailed in note 15. In the opinion of the directors the aggregate value of the investment in subsidiaries is not less than the amount shown in these financial statements.

36. Debtors 2011 2010 £'000 £'000Amounts falling duewithin one year:Amounts due fromsubsidiary undertakings 2,322 2,578Tax recoverable 21 -Other debtors 128 110Prepayments andaccrued income 113 106 2,584 2,79437. Creditors 2011 2010 £'000 £'000 Amounts falling duewithin one year:Bank loan (secured) 5,000 -Joint venture 1,205 1,205Current taxation - 292Other taxation and social security 96 48Other creditors 246 424Accruals and deferred income 847 539 7,394 2,508Amounts falling duein more than one year:Bank loan (secured) - 5,000Bank and other loan instalmentsby reference to thebalance sheet date: Within one year 5,000 -From one to two years - 5,000From two to five years - - 5,000 5,000

The bank loan of the company is secured by a charge over freehold and long leasehold properties.

38. Provisions for liabilities

No provision has been made for the approximate taxation liability at 26.5% (2010: 28%) of £1,086,000 (2010: £1,229,000) which would arise if the investment properties were sold at the stated valuation.

39. Share Capital & Reserves

Share Share Revaluation Other Retained Shareholders Capital premium reserve reserve earnings funds £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2011 1,045 - 6,183 400 6,496 14,124Dividend paid 11 169 - - (418) (238)Revaluation of - - (42) - - (42)investment propertyShare options - - - 15 - 15

Retained profit for the year - - - - 75

75Balance at 1,056 169 6,141 415 6,153 13,93431 December 2011

A profit and loss account for Bisichi Mining PLC has not been presented as permitted by Section 408(2) of the Companies Act 2006. The profit for the financial year, before dividends, was £75,000 (2010: £1,016,000)

Details of share capital are set out in note 24 and details of the shareoptions are shown in the Directors' Remuneration Report on page 25 under theheading Share option schemes which is within the audited part of this reportand note 26.

40. Related party transactions

At 31 December During the year Costs Cash Amounts recharged paid owed (to) / by (to)/ by by related related related party party party £'000 £'000 £'000 Related party:

Black Wattle Colliery (pty) Ltd (note (a)) (300) 1,485 654Ninghi Marketing Limited (note (b)) (102) - -As at 31 December 2011 (402) 1,485 654 Black Wattle Colliery (pty) Ltd (note (a)) (2,776) (2,501) -Ninghi Marketing Limited (note (b)) (102) - -As at 31 December 2010 (2,878) (2,501) -

(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 England & Wales.

In addition to the above, the company has issued a company guarantee of R20,000,000 (2010: R17,000,000) (South African Rand) to the bankers of Black Wattle Colliery (pty) Ltd in order to cover bank guarantees issued to third parties in respect of the rehabilitation of mining land.

Under Financial Reporting Standard 8 Related Party Disclosures, the Company has taken advantage of the exemption from disclosing transactions with other wholly owned Group companies.

Details of other related party transactions are given in note 28 of the Group financial statements.