Bisichi Regulatory News (BISI)

BISICHI MINING PLC Results for the year ended 31 December 2012 STRONG PERFORMANCE IN 2012 Financial summary:

* Turnover: £35,962,000 (2011: £29,909,000)

* EBITDA: £4,573,000 (2011: £1,150,000)

Summary of performance:

* Strong performance at Black Wattle, South Africa

* Monthly Run of mine increased to an average of 165,000 metric tonnes per

month in second half 2012 * Increased output combined with weak SA Rand offset weaker international coal price * UK retail portfolio continues to perform well with very low voids

* Final Dividend proposed of 3p per share payable in cash in addition to the

interim dividend of 1p per share

Chairman, Michael Heller, comments:

"Because of uncertainties of the price of coal during the remainder of 2013 itis difficult to forecast the results for the whole year, however we remainconfident on the prospects for the business in 2013."

For further information, please call:

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

CHAIRMAN'S STATEMENT

In the year to 31 December 2012 Bisichi Mining is pleased to report that it

achieved earnings before interest, tax, depreciation and amortisation (EBITDA)of £4.6million (2011: £1.2million).

This good result comes from a strong performance at Black Wattle, our SouthAfrican coal mining subsidiary where, as a result of the opening of a thirdopencast pit, our monthly run of mine production has increased from an averageof 110,000 metric tonnes achieved in the first half of 2011 to 165,000 metrictonnes in the second half of 2012. The physical demand for the lower quality coal we are currently mining hasremained strong in both the domestic and export markets and the South Africancoal market has continued to benefit from the improved performance of the SouthAfrican railway network, Transnet. This improved performance, along with theweakening of the South African Rand against the US Dollar, has helped us offsetthe impact of the weaker international coal prices. Demand is currently verystrong in both the domestic and export markets for high quality coal. We expectto shortly address this demand by accessing higher quality reserves at BlackWattle.

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

The Company's UK retail property portfolio, which is managed by London &Associated Properties PLC, continues to perform well despite the ongoingdifficulties in the UK retail property sector. Voids across the portfolio wereat the very low level of 2.27%.

Because of the uncertainties of the price of coal during the remainder of 2013your directors are recommending a final dividend of 3p (2011: 3p) payable on 2August 2013 to shareholders registered at the close of business on 5 July 2013making the total for the year 4p (2011: 4p). Although it is difficult toforecast the results for the whole year, we remain confident on the prospectsfor the business in 2013.

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

Sir Michael Heller Chairman 18 April 2013

MINING REVIEW

As noted in the Chairman's statement, higher production contributedsignificantly to Black Wattles' profitability in 2012. In addition, thecontinued improved performance of Transnet, the State rail provider, ensuredstrong demand for our coal. This demand along with the weakening of the SouthAfrican Rand against the US Dollar helped offset the impact of weakerinternational coal prices throughout 2012.

Production

Run of mine production from Black Wattle continued strongly in 2012 with totalproduction for the year of 1.87million metric tonnes (2011: 1.45million metrictonnes). The majority of this production came in the second half of the yearwith overall monthly production increasing from 149,000 metric tonnes in thefirst half of 2012 to 165,000 metric tonnes in the second half.

At the end of last year we began to expand further into our existing opencastreserves by opening up additional opencast pits. The ability to sourceproduction from various opencast pits has allowed Black Wattle to maintainprofitable levels of production.

Looking forward into 2013, Black Wattle will be mining into deeper reserves byopencast mining. We will do everything that we can to keep costs under controlin these deeper reserves and to ensure that 2013 is another very good year.

Markets

Although domestic prices improved steadily in 2012, international coal pricescontinued to weaken. At the beginning of 2012, the average weekly price of Freeon Board (FOB) Coal from Richards Bay Coal Terminal (API4) was over $100. Bythe end of the first half of the year the price had weakened to under $90 whereit remained in a range of US$85 to US$90 for the rest of the year. However adepreciation in the South African Rand against the US Dollar helped offset thisdecline. The performance of Transnet continues to have a positive effect on demand forour coal. In 2012, Transnet railed 68.5 million tonnes to Richards Bay CoalTerminal compared to 65.7million tonnes in 2011 and 62.8million tonnes in 2010.In addition, strong demand in the domestic market, in particular from localpower utilities, ensured stockpiles remained low.

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 withinformation used in determining measures to eliminate, control and minimiseemployee health risks and hazards and all Occupational Health hazards aremonitored on an ongoing basis.

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

* In order to improve hazard identification before the commencing of tasks,

mini risk assessment booklets have been distributed to all mine employees

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 and contractors.

* In order to capture and record investigation findings from incidents, an

incident recording sheet was introduced to line management and contractors.

* Black Wattle Colliery utilises ICAM (Incident cause analysis method).

* Hazard Identification and Risk Assessment training was given to all levels

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.

* 21 employees were trained in ABET (Accreditation Board for Engineering and

Technology) level one and another 19 will be trained in 2013 on level one,

two and three. HSE performance in 2012:

* No new cases of Occupational Diseases were recorded.

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

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

* Black Wattle Colliery recorded one Lost time Injury during 2012

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 byerecting a new pollution control dam as well as upgrading existing dams inconsultation with the Department of Water Affairs and Forestry.

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

A performance assessment audit was conducted to verify compliance to ourEnvironmental Management Programme, no significant deviations were found.

Black Wattle Colliery Social and Labour Plan (SLP) progress

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

Black Wattle is committed to providing opportunities for the sustainablesocio-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 asfollows:

* 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.

* Black Wattle Colliery has concluded extensive work on various Agricultural

projects as well as the E-Bag Recycling projects.

Procurement

In compliance with the Mining Charter and the Mineral and Petroleum ResourceDevelopment Act, Black Wattle has implemented a BBBEE-focussed procurementpolicy which strongly encourages our suppliers to establish and maintain BBBEEcredentials. At present, BBBEE companies provide approximately 80 percent ofBlack Wattle's equipment and services. We closely monitor our monthlyexpenditure and welcome potential BBBEE suppliers to compete for equipment andservice contracts at Black Wattle. Black Wattle also sells much of its coalproducts to empowered companies.

Black Wattle Colliery is proud to announce that we are now a level 5 BBBEEcontributor.

Employment Equity

Black Wattle is committed to achieving the goals of the Employment Equity Actand 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 18.5 percent women in core mining. * 97 percent of the women at Black Wattle Colliery are HDSA females.

Prospects

Since permissions were granted in 2010 to mine opencast the reserves at BlackWattle, management have worked tirelessly to increase production from ouropencast reserves in order to reach acceptable levels of profitability. Goingforward into 2013, we wish to build on the success of the past year not only atBlack Wattle but also, in partnership with our BEE partners, in growing ourreserve base in South Africa.

As a result, I am confident that 2013 should be another successful year for ourSouth African operations.

Andrew HellerManaging Director 18 April 2013 BUSINESS REVIEW

Review of the group's development and performance

The Chairman's Statement and the Mining Review on the preceding pages 2 to 7give a comprehensive review and assessment of the group's activities during thepast 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 tocoal washing, therefore a stoppage or disruption to the process couldsignificantly impact earnings. However, there is scope to raise earningssubstantially if the yield from the washing process is improved evenmarginally.

Mining risk: Attached to mining there are inherent health and safety risks. Anysuch safety incidents disrupt operations, and can slow or even stop production.The group has a comprehensive Health and Safety programme in place to mitigatethis. As with many mining operations, the reserve that is mined has the risk ofnot having the qualities and accessibility expected from geological andenvironmental analysis.

Currency risk: The group's South African operations are sensitive to currencymovements, especially those between the South African Rand, US Dollar andBritish Pound.

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

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

* Promote equitable access to South Africa's mineral resources for all people

in South Africa;

* Expand opportunities for historically disadvantaged South Africans (HDSAs),

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 HDSAs; * Expand the skills base of HDSAs 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 Charterrequirements. However any regulatory changes to these, or failure to meetexisting targets, could adversely affect the mine's ability to retain itsmining rights in South Africa.

Transport risk: At present the government owned Transnet Freight Rail (TFR) isthe sole rail freight provider for coal in South Africa. The group's SouthAfrican operations are therefore reliant on TFR for delivery of its exportquality coal directly or indirectly via the Southern African ports to its endcustomers. Power supply risk: The current utility provider for power supply in SouthAfrica is the government run Eskom. Eskom continues to undergo capacityproblems resulting in power cuts and lack of provision of power supply to newprojects. The group's mining operations have to date not been affected by powercuts.

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

Environmental risk: The group's South African mining operations are required toadhere to local environmental regulations. Details of the groups EnvironmentManagement Programme is disclosed in the Mining review on page 6. Health & Safety risk: The group's South African mining operations are requiredto adhere to local Health and Safety regulations. Details of the group's Healthand Safety Programme is disclosed in the Mining Review on page 6.

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

Cashflow risk: We seek to balance the high risk of our mining operations with adependable cash flow from our UK property investment operations. Fluctuationsin property values, which are reflected in the Consolidated Income Statementand Balance Sheet, are dependent on an annual valuation of commercialproperties. A fall in UK commercial property can have a marked effect on theprofitability and the net asset value of the group. However, due to the longterm nature of the leases, the effect on cash flows from property investmentactivities will remain stable as long as tenants remain in operation.

Future development

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

Environment and employment

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

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

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 group isworking with the bank on the renewal of the current banking facilities and thebank has agreed to an extension of the existing £5 million term facility and £2million overdraft to the 30 June 2013 from its original expiry date of 31December 2012, whilst the discussions are on-going and the new facility isdocumented.

The property portfolio was externally valued at 31 December 2012 and the valueof UK investment properties attributable to the group at year end was £11.6million (2011: £12.1million).

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 £1.8million (2011: £4.0million). The net assets of the group at the yearend were £17.8million (2011: £17.0million). During the year the company lent £2million to Dragon Retail Properties Limited, our joint venture company at6.875 per cent annual interest.

Further details on the group's financial position are stated in theConsolidated Balance Sheet on page 38.

Cashflow

The group's cashflow position remains strong. Cash and cash equivalents(including bank overdrafts) of the group at year end were £0.7million (2011: £1.1million).

Further details on the group's cashflow position are stated in the ConsolidatedCashflow Statement on page 41. Cash and cash equivalents as per the CashflowStatement comprise Cash and cash equivalents as presented in the balance sheetand 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 theNet Property Valuation as shown in note 10.

DIRECTORS & ADVISORS *Sir Michael HellerMA, FCA (Chairman) Andrew R HellerMA, ACA(Managing Director) Garrett CaseyCA (SA)(Finance Director) Robert GroblerPr Cert Eng(Director of mining) O+Christopher A JollMA (Non-executive)

Christopher Joll was appointed a Director on 1 February 2001. He has held anumber of non-executive directorships of quoted and un-quoted companies andis currently senior partner of MJ2 Events LLP an event management business.

OJohn 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 directorO Member of the audit, nomination and remuneration committees. Secretary & Registered officeHeather A Curtis ACIS24 Bruton PlaceLondon W1J 6NE Black Wattle CollieryDirectorsRobert Corry (Chairman)Andrew Heller (Managing Director)Robert GroblerEthan DubeGarrett Casey Director of PropertyMike J Dignan FRICS AuditorPKF (UK) LLP Principal bankersUnited KingdomBarclays Bank PLCNational Westminster Bank PLCSouth AfricaABSA Bank (SA)First National Bank (SA)Standard Bank (SA) Corporate solicitorsUnited KingdomOlswang LLP, LondonMemery Crystal, LondonFladgate LLP, London South AfricaTugendhaft Wapnick Banchetti and Partners, JohannesburgLeppan Beech Incorporated, JohannesburgRoutledge Modise attorneys, 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.com Company RegistrationCompany registration No. 112155(Incorporated in England and Wales) Websitewww.bisichi.co.uk E-mailadmin@bisichi.co.uk BISICHI MINING PLC FINANCIAL CALENDAR 5 June 2013 Annual General Meeting 2 August 2013 Payment of final dividend for 2012 (if approved) Late August 2013 Announcement of half-year results to 30 June 2013 18 November 2013 Second interim management statement Late April 2014 Announcement of results for year ending 31 December 2013 Directors' report

The directors submit their report together with the audited financialstatementsfor the year ended 31 December 2012.

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 2012 are shown on pages 34 to 70 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 operationsare 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 those tenants with good quality premises from whichthey can operate in an efficient and environmentally friendly manner. Whereverpossible, improvements, repairs and replacements are made in an environmentallyefficient manner and waste re-cycling arrangements are in place at all thecompany's locations.

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 2012 of 1p was paid on 1 February 2013 (Interim 2011:1p). The directors recommend the payment of a final dividend for 2012 of 3p perordinary share (2011: 3p) making a total dividend for 2012 of 4p (2011: 4p).

Subject to shareholder approval, the total dividend per Ordinary Share for 2012will be 4p per Ordinary Share

The final dividend will be payable on Friday 2 August 2013 to shareholdersregistered at the close of business on 5 July 2013.

Investment properties

The investment property portfolio is stated at its open market value of £11,612,000, at 31 December 2012 (2011: £12,068,000) as valued by professionalexternal valuers. The open market value of the company's shareholding ofinvestment properties included within its investments in joint ventures is £3,336,000 (2011: £3,505,000).

Financial instruments

Note 22 to the financial statements sets out the risks in respect of financialinstruments. The Board reviews and agrees overall treasury policies, delegatingappropriate authority to the managing director. Financial instruments are usedto manage the financial risks facing the group - speculative transactions arenot permitted. Treasury operations are reported at each Board meeting and aresubject to weekly internal reporting.

Directors

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

The directors retiring by rotation are Sir Michael Heller, Mr C A Joll and Mr JA Sibbald who offer themselves for re-election. The board recommends theirre-election. Brief details of the directors standing for re-election are:

Sir Michael Heller has been an executive director since 1972 and chairman since1981. He is a chartered accountant and has a contract of employmentdeterminable at six months notice.

Christopher Joll has been a director since 1 February 2001 and has a contractof service determinable at three months notice. He has held a number ofnon-executive directorships of both quoted and un-quoted companies and iscurrently senior partner of MJ2 Events LLP an event management business.

John Sibbald has been a non-executive director since 1988. He is a retiredchartered accountant. For most of his career he was employed in stockbroking inthe 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 thecompany during the year other than as shown in this report.

Directors' shareholdings

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

Beneficial Non-beneficial 31.12.2012 1.1.2012 31.12.2012 1.1.2012 Sir Michael Heller 148,783 148,783 181,334 181,334 A R Heller 785,012 785,012 - - C A Joll - - - - J A Sibbald - - - - R J Grobler - - - - G J Casey - - - -

There have not been any changes in the above shareholdings since 31 December2012 and the date of this report.

Details of the options to subscribe for new ordinary shares of the companygranted to the directors are contained under "Share option schemes" in theremuneration report on page29.

Substantial interestsThe following have advised that they have an interest in 3 per cent. or more ofthe issued share capital of the company as at 15 April 2013: London & Associated Properties PLC - 4,432,618 shares representing 41.99 percent. of the issued capital. (Sir Michael Heller is a director and shareholderof London & Associated Properties PLC).

Sir Michael Heller - 330,117 shares representing 3.13 per cent. of the issuedcapital.

A R Heller - 785,012 shares representing 7.44 per cent. of the issued capital.

Neil Kirton - 352,000 shares representing 3.33 per cent. of the issued capital.

Cavendish Asset Management Limited - 1,025,110 shares representing 9.71 percent. of the issued share capital.

Disclosure of information to auditorThe directors in office at 31 December 2012 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 Corporate GovernanceCode for SQC. The paragraphs below set out how the company has applied thisguidance during the year. The company has complied with the Quoted CompaniesAlliance guidance throughout the year, except insofar that non-executivedirectors are not appointed for fixed terms (section A.7.2).

Principles 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 principles in a sensible and pragmatic fashion having regard to thecircumstances of the group's business. The key objective is to enhance andprotect shareholder value.

Board structure

During the year the Board comprised the executive chairman, the managingdirector, two other executive directors and two non-executive directors. Theirdetails appear on page17. The Board is responsible to shareholders for theproper management of the group. The Directors' responsibilities statement inrespect of the accounts is set out on page32. The non-executive directors havea particular responsibility to ensure that the strategies proposed by theexecutive directors are fully considered. To enable the Board to discharge itsduties, all directors have full and timely access to all relevant informationand there is a procedure for all directors, in furtherance of their duties, totake independent professional advice, if necessary, at the expense of thegroup. The Board has a formal schedule of matters reserved to it and meetsbi-monthly.

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

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

• The nomination committee is chaired by Christopher Joll and comprises thenon-executive directors and the executive chairman. The committee isresponsible for proposing candidates for appointment to the Board, havingregard to the balance and structure of the Board. In appropriate casesrecruitment consultants are used to assist the process. Each director issubject to re-election at least every three years.

• The remuneration committee is responsible for making recommendations to theBoard on the company's framework of executive remuneration and its cost. Thecommittee determines the contractual terms, remuneration and other benefits foreach of the executive directors, including performance related bonus schemes,pension rights and compensation payments. The Board itself determines theremuneration of the non-executive directors. The committee comprises thenon-executive directors. It is chaired by Christopher Joll. The company'sexecutive chairman is normally invited to attend meetings. The report ondirectors' remuneration is set out on pages 27 to29. • The audit committee comprises the two non-executive directors and is chairedby Christopher Joll. Its prime tasks are to review the scope of external audit,to receive regular reports from the company's auditor and to review thehalf-yearly and annual accounts before they are presented to the Board,focusing in particular on accounting policies and areas of management judgmentand estimation. The committee is responsible for monitoring the controls whichare in force to ensure the integrity of the information reported to theshareholders. The committee acts as a forum for discussion of internal controlissues and contributes to the Board's review of the effectiveness of thegroup's internal control and risk management systems and processes. Thecommittee also considers annually the need for an internal audit function. Itadvises the Board on the appointment of external auditors and on theirremuneration for both audit and non-audit work, and discusses the nature andscope of the audit with the external auditors. The committee, which meetsformally at least twice a year, provides a forum for reporting by the group'sexternal auditors. Meetings are also attended, by invitation, by the companychairman, managing director and finance director.

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

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

• discussion with the auditors of a written report detailing all relationshipswith the company and any other parties that could affect independence or theperception of independence; • a review of the auditors' own procedures for ensuring the independence of theaudit firm and partners and staff involved in the audit, including the regularrotation of the audit partner; and

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

The audit committee report is set out on page30.

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

Performance evaluation - board, board committees and directors

The performance of the board as a whole and of its committees and thenon-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 in reviewingperformance but have not found this necessary to date.

Independent Directors

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

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

John Sibbald has been a non-executive director for over twenty years. As aconsequence he does not fully meet the criteria for independence set out in theUK Corporate Governance Code (The Code).

The Board encourages Christopher Joll and John Sibbald to act independently.The criteria on which they fail to meet The Code's criteria is namely length ofservice and a connection with the company's public relations advisers, whichshould not, and has not, resulted in their inability or failure to actindependently. In the opinion of the Board, Christopher Joll and John Sibbaldcontinue to fulfil their role as independent non-executive directors.

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

Board and board committee meetings

The number of meetings during 2012 and attendance at regular Board meetings andBoard committees was as follows:

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

The audit committee had two meetings in 2012 with the external auditorspresent, prior to release of the 2011 annual results. Members of the committeediscussed the 30 June 2011 half year results prior to their approval by thefull 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's systemof internal control in order to provide the directors with reasonable assurancethat its assets are safeguarded, that transactions are authorised and properlyrecorded and that material errors and irregularities are either prevented orwould be detected within a timely period. However, no system of internalcontrol can eliminate the risk of failure to achieve business objectives orprovide absolute assurance against material misstatement or loss.

The key elements of the control system in operation are:

• The Board meets regularly with a formal schedule of matters reserved to itfor decision and has put in place an organisational structure with clearlydefined lines of responsibility and with appropriate delegation of authority;

• There are established procedures for planning, approval and monitoring ofcapital expenditure and information systems for monitoring the group'sfinancial performance against approved budgets and forecasts;

• UK property and financial operations are closely monitored by members of theBoard and senior managers to enable them to assess risk and address theadequacy of measures in place for its

monitoring and control. The South African operations are closely supervised bythe UK based executives through daily, weekly and monthly reports from thedirectors and senior officers in South Africa. This is supplemented by monthlyvisits by the UK based finance director to the South African operations whichinclude checking the integrity of information supplied to the UK. The directorsare guided by the internal control guidance for directors issued by theInstitute of Chartered Accountants in England and Wales.

During the period, the audit committee has reviewed the effectiveness ofinternal control as described above. The Board receives periodic reports fromits committees.

There are no significant issues disclosed in the Annual Report for the yearended 31 December 2012 (and up to the date of approval of the report)concerning material internal control issues. The directors confirm that theBoard has reviewed the effectiveness of the system of internal control asdescribed during the period.

Communication with shareholders

Communication with shareholders is a matter of priority. Extensive informationabout the group and its activities is given in the Annual Report, which is madeavailable to shareholders. Further information is available on the company'swebsite, www.bisichi.co.uk. There is a regular dialogue with institutionalinvestors. Enquiries from individuals on matters relating to theirshareholdings and the business of the group are dealt with informatively andpromptly. 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 thatsuppliers have complied with all relevant terms and conditions. Trade creditorsoutstanding at the year-end represented 53 days trade purchases (2011 - 52days).

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 "Relationship Agreement")was entered into between the company and London & Associated Properties PLC("LAP") in regard to the arrangements between them while LAP is a controllingshareholder of the company. The Relationship Agreement includes a provisionunder which LAP has agreed to exercise the voting rights attached to theordinary shares in the company owned by LAP to ensure the independence of theBoard of directors of the company. Other than the restrictions contained in the Relationship Agreement, there areno restrictions on voting rights or on the transfer of ordinary shares in thecompany. The rules governing the appointment and replacement of directors,alteration of the articles of association of the company and the powers of thecompany's directors accord with usual English company law provisions. Eachdirector is re-elected every three years or more frequently. The company is notparty to any significant agreements that take effect, alter or terminate upon achange of control of the company following a takeover bid. The company is notaware of any agreements between holders of its ordinary shares that may resultin restrictions on the transfer of its ordinary shares or on voting rights.

There are no agreements between the company and its directors or employeesproviding for compensation for loss of office or employment that occurs becauseof a takeover bid.

The Bribery Act 2010 The Bribery Act 2010 came into force on 1 July 2011, and the Board took theopportunity to implement a new Anti-Bribery Policy. All directors and staffhave since completed an e-learning training course and continue to do so on abi-annual basis. The company is committed to acting ethically, fairly and withintegrity in all its endeavours and compliance of the code is closelymonitored.

Annual General Meeting

The annual general meeting of the company ("Annual General Meeting") will beheld at the Royal Automobile Club, 89 Pall Mall, London SW1Y 5HS on Tuesday, 5June 2013 at 11.00 a.m. Resolutions 1 to 10 will be proposed as ordinaryresolutions. More than 50 per cent. of shareholders' votes cast must be infavour for these resolutions to be passed. Resolutions 11 to 13 will beproposed as special resolutions. At least 75 per cent. of shareholders' votescast must be in favour for these resolutions to be passed. The directors consider that all of the resolutions to be put to the meeting arein the best interests of the company and its shareholders as a whole. The Boardrecommends that shareholders vote in favour of all resolutions. Please note that the following paragraphs are only summaries of certainresolutions to be proposed at the Annual General Meeting and not the full textof the resolutions. You should therefore read this section in conjunction withthe full text of the resolutions contained in the notice of Annual GeneralMeeting. To approve a loan of £116,000 to a director, Mr A R Heller (Resolution 9) The directors are proposing that shareholder approval if given to approve,affirm and ratify a loan that has been made to one of the directors, Mr A RHeller, to fund his acquisition of a car. Under section 197(1) Companies Act2006, approval of shareholders is required in relation to loans made by acompany to its directors. A company is permitted under section 214 CompaniesAct 2006 to obtain such shareholders' approval after the loan transaction hascompleted so long as it is within a reasonable period of time.

Memorandum pursuant to section 197 (3) Companies Act 2006

The company made a loan of £116,000 to Mr A R Heller (a director of thecompany) ("Director's Loan") on

30 November 2012, the purpose of which was for Mr A R Heller to purchase a car.Interest is payable on the Director's Loan at a rate of 6.14 per cent.. Thereis no fixed repayment date for the Director's Loan. It is intended that theprincipal amount of the Director's Loan will be repaid when the car purchasedby Mr A R Heller has been sold. Any tax and National Insurance contributionsarising will be bourne by Mr A R Heller.

The company took out a loan of £116,000 with ING Lease (UK) Limited ("INGLoan") on 30 November 2012 in order to facilitate payment of the Director'sLoan. The ING Loan is repayable by the company on 30 December 2015 and interestis payable on the ING Loan at a rate of 6.14 per cent..

Directors' authority to allot shares (Resolution 10)

In certain circumstances it is important for the company to be able to allotshares up to a maximum amount without needing to seek shareholder approvalevery time an allotment is required. Paragraph 10.1.1 of Resolution 10 wouldgive the directors the authority to allot shares in the company and grantrights to subscribe for, or convert any security into, shares in the company upto an aggregate nominal value of £351,894. This represents approximately 1/3(one third) of the ordinary share capital of the company in issue (excludingtreasury shares) at 15 April 2013 (being the last practicable date prior to thepublication of this Directors' Report). Paragraph 10.1.2 of Resolution 10 wouldgive the directors the authority to allot shares in the company and grantrights to subscribe for, or convert any security into, shares in the company upto a further aggregate nominal value of £351,894, in connection with apre-emptive rights issue. This amount represents approximately 1/3 (one third)of the ordinary share capital of the company in issue (excluding treasuryshares) at 15 April 2013 (being the last practicable date prior to thepublication of this Directors' Report).

Therefore, the maximum nominal value of shares or rights to subscribe for, orconvert any security into, shares which may be allotted or granted underresolution 10 is £703,788.

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

The authority granted by resolution 10 will expire on 31 August 2014 or, ifearlier, the conclusion of the next annual general meeting of the company. Thedirectors have no present intention to make use of this authority. However, ifthey do exercise the authority, the directors intend to follow emerging bestpractice as regards its use as recommended by the ABI.

Disapplication of pre-emption rights (Resolution 11)

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

Shares allotted for cash must normally first be offered to shareholders inproportion to their existing shareholdings. The directors will, at theforthcoming Annual General Meeting seek power to allot equity securities (asdefined by section 560 of the Companies Act 2006) or sell treasury shares forcash as if the pre-emption rights contained in Section 561 of the Companies Act2006 did not apply: (a) in relation to pre-emptive offers and offers to holders of other equitysecurities if required by the rights of those securities or as the directorsotherwise consider necessary, up to a maximum nominal amount of £351,894 whichrepresents approximately 1/3 (one third) of the ordinary share capital of thecompany in issue (excluding treasury shares) and, in relation to rights issuesonly, up to a maximum additional amount of £351,894 which representsapproximately 1/3 (one third) of the ordinary share capital of the company inissue (excluding treasury shares), in each case as at 15 April 2013 (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 whichrepresents approximately 10 per cent. of the ordinary share capital of thecompany in issue (excluding treasury shares) as at 15 April 2013 (being thelast practicable date prior to the publication of this Directors' Report).

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

The power in resolution 11 will expire when the authority given by resolution10 is revoked or expires.

The directors have no present intention to make use of this authority.

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 2012. The noticeperiod required by the Companies Act 2006 for general meetings of the companyis 21 days unless shareholders approve a shorter notice period, which cannothowever be less than 14 clear days. Annual General Meetings must always be heldon at least 21 clear days' notice. It is intended that the flexibility offeredby this resolution will only be used for time-sensitive, non-routine businessand where merited in the interests of shareholders as a whole. The approvalwill be effective until the Company's next Annual General Meeting, when it isintended that a similar resolution will be proposed. In order to be able tocall a general meeting on less than 21 clear days' notice, the company mustmake a means of electronic voting available to all shareholders for thatmeeting.

Purchase of own Ordinary Shares (Resolution 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 15 April 2013 (being the last practicable date prior topublication of this Directors' Report)). The minimum price (exclusive ofexpenses) which the company would be authorised to pay for each ordinary sharewould be 10 pence (the nominal value of each ordinary share). The maximum price(again exclusive of expenses) which the company would be authorised to pay foran ordinary share is an amount equal to 105 per cent. of the average marketprice for an ordinary share for the five business days preceding any suchpurchase. The authority conferred by resolution 13 will expire at the conclusion of thecompany's next annual general meeting or 15 months from the passing of theresolution, whichever is the earlier. Any purchases of ordinary shares would bemade by means of market purchase through the London Stock Exchange. If granted,the authority would only be exercised if, in the opinion of the directors, todo so would result in an increase in earnings per share or net asset value pershare and would be in the best interests of shareholders generally. Inexercising the authority to purchase ordinary shares, the directors may treatthe shares that have been bought back as either cancelled or held as treasuryshares (shares held by the company itself). No dividends may be paid on shareswhich are held as treasury shares and no voting rights are attached to them. As at 15 April 2013 (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 per cent.of the company's issued share capital (excluding treasury shares) as at thatdate. Such number of options to subscribe for new ordinary shares wouldrepresent approximately 8.40 per cent. of the reduced issued share capital ofthe company (excluding treasury shares) assuming full use of the authority tomake market purchases sought under resolution 13.

Donations

No political or charitable donations were made during the year (2011:Nil).

Going concernThe group's business activities, together with the factors likely to affect itsfuture development are set out in the Chairman's Statement on the precedingpage 2, the Mining Review on pages 5 to 15 and it's financial position is setout on page 12 of the Business Review. In addition Note 22 to the financialstatements includes the group's treasury policy, interest rate risk, liquidityrisk and hedging profile. The group has considerable financial resourcesavailable and long term leases with the majority of its tenants of its propertyportfolio. Black Wattle Colliery, its direct mining asset returned toprofitability in the second half of 2011 and has been profitable to date. Thedirectors have a reasonable expectation that the mining and market conditionsexperienced in 2012 will be similar going into 2013. As a consequence, thedirectors believe that the company is well placed to manage its business riskssuccessfully. The group is working with the bank on the renewal of the currentbanking facilities and the bank has agreed, in principle, to an extension ofthe £5million term facility and £2 million overdraft to the 30th June 2013,from its original expiry date of 31 December 2012, whilst the discussions areon-going and the new facility is documented. The directors have a reasonableexpectation that the company has adequate resources to continue in operationalexistence for the foreseeable future and that the company is well placed tomanage its business risks. Thus they continue to adopt the going concern basisof accounting in preparing the annual financial statements.

Other matters

The auditors, PKF (UK) LLP, have merged their business into BDO LLP. Aresolution to appoint BDP LLP will be put to the Annual General Meeting.

By order of the boardHeather CurtisSecretary 24 Bruton PlaceLondon W1J 6NE18 April 2013 Remuneration Report The remuneration committee is pleased to present its report for the year ended31 December 2012The remuneration committee is a formally constituted committee and is comprisedexclusively 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, on behalfof the Board, the remuneration and other benefits of the executive directorsand senior executives, including pensions, share options and service contracts.The company's policy is to ensure that the executive directors are rewardedcompetitively in relation to other companies in order to retain and motivatethem. The emoluments of each executive director comprises basic salary, a bonusat the discretionof the remuneration committee, provision of a car, premiums paid in respect ofindividual defined contribution pension arrangements, health insurance premiumand 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. Alldirectors' contracts, as amended from time to time, have run from the date ofappointment. Details of the directors standing for re-election are given under"Directors'" in the Directors' report. The policy of the committee is not togrant employment contracts or contracts of service in excess of six months andthere are no provisions for termination payments. A summary of terms of serviceand employment is as follows: Start date Unexpired Notice of contract term period Executive directors Sir Michael Heller November 1972 Continuous 6 months A R Heller January 1994 Continuous 3 months G J Casey June 2010 Continuous 3 months R J Grobler April 2008 Continuous 3 months Non-executive directors C A Joll February 2001 Continuous 3 months J A Sibbald October 1988 Continuous 3 months

The following information has been audited:

Directors' remuneration

Salaries Bonus Benefits Total Pension Total Total and fees before Contributions 2012 2011 Pensions £'000 £'000 £'000 £'000 £'000 £'000 £'000 Executive Directors Sir Michael Heller 75 - - 75 - 75 75 A R Heller 350 150 14 514 30 544 626 G J Casey 109 75 9 193 15 208 177 R Grobler 162 - 26 188 8 196 232 696 225 49 970 53 1,023 1,110 Non- ExecutiveDirectors C A Joll 25 - - 25 - 25 24 J A Sibbald 2 - 3 5 - 5 4 27 - 3 30 - 30 28 Total 723 225 52 1,000 53 1,053 1,138 Pension schemes and incentivesThree (2011: three) directors have benefits under money purchase pensionschemes. Contributions in 2012 were £53,000 (2011: £53,000), see table above.Directors are not entitled to benefits under any bonus or incentive schemesapart from the share option schemes details of which are set out below. Bonusesare awarded by the remuneration committee when merited.

Performance bonuses were awarded by the remuneration committee to two executivedirectors during 2012 (2011:3).

Share option schemesThe Company currently has four "Unapproved" Share Option Schemes which are notsubject to HM Revenue and Customs (HMRC) approval. The "Second Scheme" wasapproved by shareholders on 23 June 2005, options having been provisionallygranted under it on 23 September 2004. The "2006 Scheme" was approved byshareholders on 29 June 2006, and the "2010 Scheme" was approved byshareholders on 7 June 2011. The "2012 Scheme" was approved by the remunerationcommittee of the Company on 28 September 2012 in replacement of a scheme whichwas adopted on 15 June 1999 (the "First Scheme"). Existing options overordinary shares granted under the First Scheme lapsed on 29 September 2012. Replacement options could not be granted under theFirst Scheme as the period for new grants under the scheme had expired.Accordingly, the remuneration committee approved the adoption by the Company ofthe 2012 Scheme with similar rules to the First Scheme. All available optionsunder each of the Schemes have been granted. Number of share options Option 1 Options 31 Exercisable Exercisable price* January Granted December from to 2012 in 2012 2012 Second Scheme A R Heller 149p 80,000 - 80,000 23/9/2007 22/9/2014 The 2006 Scheme A R Heller 237.5p 275,000 - 275,000 4/10/2009 3/10/2016 Employee 237.5p 50,000 - 50,000 4/10/2009 3/10/2016 The 2010 Scheme G J Casey 202.5p 80,000 - 80,000 31/08/2013 30/08/2020 THE 2012 SCHEME A R Heller 34p 233,000 233,000 233,000 01/10/2012 30/09/2022

*Middle market price at date of grant

No consideration is payable for the grant of options under the Unapproved ShareOption Schemes

Performance conditions: The exercise of options under the Unapproved Share Option Schemes, for certainoption issues, is subject to the satisfaction of objective performanceconditions specified by the remuneration committee, which will conform toinstitutional shareholder guidelines and best practice provisions in force fromtime to time. The performance conditions for Second Scheme and the 2010 scheme,agreed by members on 23 June 2005 and 31 August 2010 respectively, requiresgrowth in net assets over a three year period to exceed the growth in theretail price index by a scale of percentages. There are no performanceconditions attached to the other schemes. The middle market price of Bisichi Mining PLC ordinary shares at 31 December2012 was 110p (2011-145p). During the year the share price ranged between 95pand 160p.

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

The following information is unaudited:

The following graph illustrates the company's performance compared with a broadequity market index over a five year period. Performance is measured by totalshareholder return. The directors have chosen the FTSE All Share - Total ReturnIndex as a suitable index for this comparison as it gives an indication ofperformance against a large spread of quoted companies. Christopher JollChairman - remuneration committee 24 Bruton PlaceLondonW1J 6NE18 April 2013 Audit committee report The committee's terms of reference have been approved by the board and followpublished guidelines, which are available from the company secretary. The auditcommittee comprises the two non-executive directors, Christopher Joll(chairman), an experienced financial PR executive and John Sibbald, a retiredchartered accountant.

The Audit Committee's prime tasks are to:

Review the scope of external audit, to receive regular reports from the auditorand to review the half-yearly and annual accounts before they are presented tothe board, focusing in particular on accounting policies and areas ofmanagement judgment and estimation;

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

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

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

Consider each year the need for an internal audit function;

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

Participate in the selection of a new external audit partner and agree theappointment when required;

Undertake a formal assessment of the auditors' independence each year whichincludes:

• a review of non-audit services provided to the group and related fees; • discussion with the auditors of a written report detailing all relationshipswith the company and any other parties that could affect independence or theperception of independence; • a review of the auditors' own procedures for ensuring the independence of theaudit firm and partners and staff involved in the audit, including the regularrotation of the audit partner; and

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

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 AuditCommittee;

Approved the publication of annual and half-year financial results;

Considered and approved the annual review of internal controls;

Decided that due to the size and nature of operation there was not a currentneed for an internal audit function;

Agreed the independence of the auditors and approved their fees for both auditand 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 companyis provided with extensive administration and accounting services by London &Associated Properties PLC which has its own audit committee and employs aseparate firm of external auditors, Baker Tilly UK Audit LLP. In South AfricaPKF (Jhb) Inc. acts as the external auditor to the South African companies, andthe work of that firm was reviewed by PKF (UK) LLP for the purpose of the groupaudit. Christopher JollChairman - audit committee 24 Bruton PlaceLondon W1J 6NE18 April 2013 VALUERS' CERTIFICATES

To the directors of Bisichi Mining PLC

In accordance with your instructions we have carried out a valuation of thefreehold property interests held as at 31 December 2012 by the company asdetailed in our Valuation Report dated 21 February 2013.

Having regard to the foregoing, we are of the opinion that the open marketvalue as at 31 December 2012 of the interests owned by the Company was£11,612,000 being made up as follows:

£000 Freehold 8,889Leasehold 2,723 11,612 Leeds BNP Paribas Real Estate Advisory & Property Management UK Limited21 February 2013 Regulated by Royal Institute of Chartered Surveyors DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the directors' report, thedirectors' remuneration report and the financial statements in accordance withapplicable law and regulations.

Company law requires the directors to prepare financial statements for eachfinancial year. Under that law the directors are required to prepare the groupfinancial statements in accordance with International Financial ReportingStandards as adopted by the European Union and have elected to prepare theparent company financial statements in accordance with United Kingdom GenerallyAccepted Accounting Practice (United Kingdom Accounting Standards andapplicable law). Under company law the directors must not approve the financialstatements unless they are satisfied that they give a true and fair view of thestate of affairs of the company and the group and of the profit or loss of thegroup 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 accounting records that aresufficient to show and explain the company's transactions, to disclose withreasonable accuracy at any time the financial position of the company and toenable them to ensure that the financial statements comply with the CompaniesAct 2006 and Article 4 of the IAS Regulation. They are also responsible forsafeguarding the assets of the company and the group and hence for takingreasonable steps for the prevention and detection of fraud and otherirregularities. The directors are responsible for the maintenance and integrity of thecorporate 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' report includes a

fair review of the development and performance of the business and the

position of the company and the undertakings included in the consolidation

taken as a whole, together with a description of the principal risks and

uncertainties that they face.

The names and functions of all the directors are stated on page17.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BISICHI MINING PLC

We have audited the financial statements of Bisichi Mining PLC for the yearended 31 December 2012 which comprise the consolidated income statement, theconsolidated statement of comprehensive income, the consolidated and companybalance sheets, the consolidated cash flow statement, the consolidatedstatement of changes in shareholders' equity and the related notes. Thefinancial reporting framework that has been applied in the preparation of thegroup financial statements is applicable law and International FinancialReporting Standards (IFRSs) as adopted by the European Union. The financialreporting framework that has been applied in the preparation of the parentcompany financial statements is applicable law and United Kingdom AccountingStandards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the company's members, as a body, in accordancewith Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has beenundertaken so that we might state to the company's members those matters we arerequired to state to them in an auditor's report and for no other purpose. Tothe fullest extent permitted by law, we do not accept or assume responsibilityto anyone other than the company and the company's members as a body, for ouraudit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

As explained more fully in the directors' responsibilities statement, thedirectors are responsible for the preparation of the financial statements andfor being satisfied that they give a true and fair view. Our responsibility isto audit and express an opinion on the financial statements in accordance withapplicable law and International Standards on Auditing (UK and Ireland). Thosestandards require us to comply with the Auditing Practices Board's EthicalStandards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in thefinancial statements sufficient to give reasonable assurance that the financialstatements are free from material misstatement, whether caused by fraud orerror. This includes an assessment of: whether the accounting policies areappropriate to the group's and the parent company's circumstances and have beenconsistently applied and adequately disclosed; the reasonableness ofsignificant accounting estimates made by the directors; and the overallpresentation of the financial statements. In addition, we read all thefinancial and non-financial information in the annual report to identifymaterial inconsistencies with the audited financial statements. If we becomeaware of any apparent material misstatements or inconsistencies we consider theimplications 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 2012 and of the

group's profit for the year then ended;

* the group financial statements have been properly prepared in accordance

with IFRSs as adopted by the 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 matters where theCompanies Act 2006 requires us 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.

Andrew Huddleston (Senior statutory auditor)

for and on behalf of PKF (UK) LLP, Statutory auditor

London, UK

18 April 2013

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2012

2012 2012 2012 2011 2011 2011 Notes Trading Revaluations Total Trading Revaluations Total £'000 £'000 £'000 £'000 £'000 £'000 Group revenue 1 35,962 - 35,962 29,909 - 29,909 Operating costs 2 (30,478) - (30,478) (27,565) - (27,565) Operating profit 5,484 - 5,484 2,344 - 2,344before depreciation,fair value adjustmentsand exchange movements Depreciation 2 (2,253) - (2,253) (2,488) - (2,488) Operating profit/ 1 3,231 - 3,231 (144) - (144)(loss) before fairvalue adjustments andexchange movements Exchange losses (357) - (357) (975) - (975) Decrease in value of 3 - (456) (456) - (42) (42)investment properties Gains/(Loss) on held - 39 39 - (167) (167)for tradinginvestments Operating Profit/ 1 2,874 (417) 2,457 (1,119) (209) (1,328)(loss) Share of profit/(loss) 13 64 (201) (137) 21 (31) (10)in joint ventures Profit/(Loss) before 2,938 (618) 2,320 (1,098) (240) (1,338)interest and taxation Interest receivable 281 - 281 268 - 268 Interest payable 6 (411) - (411) (380) - (380) Profit/Loss before tax 4 2,808 (618) 2,190 (1,210) (240) (1,450) Taxation 7 (842) 192 (650) 762 142 904 Profit/(Loss) for the 1,966 (426) 1,540 (448) (98) (546)year Attributable to: 1,721 (426) 1,295 (346) (98) (444) Equity holders of thecompany Non-controlling 27 245 - 245 (102) - (102)interest Profit/(Loss) for the 1,966 (426) 1,540 (448) (98) (546)year Profit/(Loss) per 9 16.30p (4.03)p 12.27p (3.30)p (0.93)p (4.23)pshare - basic Profit/(Loss) per 9 16.05p (3.97)p 12.08p (3.30)p (0.93)p (4.23)pshare - diluted

Trading income reflects all the trading activity on mining and propertyoperations. Revaluation Income reflects the revaluation of investmentproperties and other assets within the group and any proportion of theseamounts within Joint Ventures. The total column represents the consolidatedincome statement presented in accordance with IAS 1.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2012

2012 2011 £'000 £'000 Profit/(Loss) for the year 1,540 (546) Other comprehensive income: Exchange differences on translation of foreign (391) (575)operations Taxation - - Other comprehensive income for the year net of (391) (575)tax Total comprehensive income for the year net of 1,149 (1,121)tax Attributable to: Equity shareholders 936 (958) Non-controlling interest 213 (163) 1,149 (1,121)

Company Registration No. 112155

CONSOLIDATED BALANCE SHEET at 31 December 2012 Notes 2012 2011 £'000 £'000 Assets Non-current assets Value of investment properties 10 11,612 12,068 Fair value of head lease 31 202 222 11,814 12,290 Mining reserves, plant and equipment 11 8,638 7,926 Investments in joint ventures 12 3,061 2,579 Loan to joint venture 12 1,117 - Other investments 12 131 148 Total non-current assets 24,761 22,943 Current assets Inventories 16 1,876 1,206 Trade and other receivables 17 7,604 6,067 Corporation tax recoverable 49 133 Held for trading investments 18 787 730 Cash and cash equivalents 1,802 4,041 12,118 12,177 Non-current asset held for sale 14 - 1,785 Total current assets 12,218 13,962 Total assets 36,879 36,905 Liabilities Current liabilities Borrowings 20 (6,186) (8,157) Trade and other payables 19 (9,218) (8,590) Current tax liabilities (2) - Total current liabilities (15,406) (16,747) Non-current liabilities Borrowings 20 (86) (86) Provision for rehabilitation 21 (989) (965) Finance lease liabilities 31 (202) (222) Deferred tax liabilities 23 (2,437) (1,881) Total non-current liabilities (3,714) (3,154) Total liabilities (19,120) (19,901) Net assets 17,759 17,004 Equity Share capital 24 1,056 1,056 Share premium account 169 169 Translation reserve (805) (446) Other reserves 25 528 500 Retained earnings 16,367 15,494 Total equity attributable to equity 17,315 16,773shareholders Non-controlling interest 27 444 231 Total equity 17,759 17,004

These financial statements were approved and authorised for issue by the boardof directors on 18 April 2013 and signed on its behalf by:

A R Heller G J Casey

Director Director

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

for the year ended 31 December 2012

Share Share Translation Other Retained Non-controlling Total capital Premium reserves reserves earnings Total

interest equity

£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 1,045 - 68 485 16,356 17,954 394 18,348January 2011 Revaluation of - - - - (42) (42) - (42)investmentproperties Other income - - - - (402) (402) (102) (504)statementmovements Loss for the year - - - - (444) (444) (102) (546) Exchange - - (514) - - (514) (61) (575)adjustment Total - - (514) - (444) (958) (163) (1,121)comprehensiveincome for theyear Dividend 11 169 - - (418) (238) - (238) Equity share - - - 15 - 15 - 15options Balance at 1 1,056 169 (446) 500 15,494 16,773 231 17,004January 2012 Revaluation of - - - - (456) (456) - (456)investmentproperties Other income - - - - 1,751 1,751 245 1,996statementmovements Profit for the - - - - 1,295 1,295 245 1,540year Exchange - - (359) - - (359) (32) (391)adjustment Total - - (359) - 1,295 936 213 1,149comprehensiveincome for theyear Dividend - - - - (422) (422) - (422) Equity share - - - 28 - 28 - 28options Balance at 31 1,056 169 (805) 528 16,367 17,315 444 17,759December 2012

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 December 2012

Year ended Year ended 31 December 2012 31 December 2011 £'000 £'000 Cash flows from operating activities Operating profit/(loss) 2,457 (1,328) Adjustments for: Depreciation 2,253 2,488 Share based payment expense 27 15 (Gain)/Loss on investment held for trading (39)

167

Unrealised loss on investment properties 456

42

Share of profit of joint venture 64

21

Cash flow before working capital 5,218 1,405 Change in inventories (670) (501) Change in trade and other receivables (2057)

(2,385)

Change in trade and other payables 1150 2,340 Change in provisions 117 124 Acquisitions of held for trading investments (18)

(291)

Cash generated from operations 3,740 692 Interest received 281 268 Interest paid (411) (380) Income tax received 83 245 Cash flow from operating activities 3,693

825

Cash flows from investing activities Acquisition of reserves, plant and equipment (3,681)

(2,528)

Proceeds from sale of investment properties, - 7reserves, plant and equipment Disposal/(Acquisitions) of investments 16

(888)

Cash flow from investing activities (3,665)

(3,409)

Cash flows from financing activities Borrowings drawn 86 - Borrowings repaid (214) (347) Equity dividends paid (422) (238) Cash flow from financing activities (550)

(585)

Net decrease in cash and cash equivalents (522)

(3,169)

Cash and cash equivalents at 1 January 1,114 3,977 Exchange adjustment 126 306 Cash and cash equivalents at 31 December 718

1,114

Cash and cash equivalents at 31 December comprise: Cash and cash equivalents as presented in the 1,802 4,041balance sheet Bank overdrafts (secured) (1,084) (2,927) 718 1,114 GROUP ACCOUNTING POLICIES

for the year ended 31 December 2012

Basis of accounting

The results for the year ended 31 December 2012 have been prepared inaccordance with International Financial Reporting Standards (IFRS) as adoptedby the European Union and with those parts of the Companies Act 2006 applicableto companies reporting under IFRS. The principal accounting policies aredescribed below:

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

Going concern

The group has considerable financial resources available and long term leaseswith the majority of its tenants of its property portfolio. Black WattleColliery, its direct mining asset returned to profitability in the second halfof 2011 and has been profitable to date. The directors have a reasonableexpectation that the mining and market conditions experienced in 2012 will besimilar going into 2013. As a consequence, the directors believe that thecompany is well placed to manage its business risks successfully. The group is working with the bank on the renewal of the current bankingfacilities and the bank has agreed to an extension, in principle, of the £5million term facility and £2million overdraft to the 30th June 2013 from itsoriginal expiry date of 31 December 2012, whilst the discussions are on-goingand the new facility is documented. The directors have reasonable expectationthat the company has adequate resources to continue in operational existencefor the foreseeable future and that the company is well placed to manage itsbusiness risks. Thus they continue to adopt the going concern basis ofaccounting in preparing the annual financial statements.

International Financial Reporting Standards (IFRS)

The financial statements are prepared in accordance with InternationalFinancial Reporting Standards and Interpretations in force at the reportingdate. These are prepared under the historic cost basis as modified by therevaluation of investment properties and held for trading investments.

During 2012 all other standards and interpretations that were mandatory for theaccounting period and were required to be adopted by the group either had nomaterial impact on the group's financial statements or were not relevant to theoperations of the group. The group has not adopted any standards or interpretations in advance of therequired implementation dates. It is not expected that adoption of anystandards or interpretations which have been issued by the InternationalAccounting Standards Board but have not been adopted will have a materialimpact on the financial statements. Specifically, the Directors' haveconsidered the impact of IFRIC 20 which concerns the treatment of strippingcosts. The Directors are of the view that the accounting treatment detailed inthis standard would not result in a change of the Group's accounting policy.

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 valuation ofthe 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. Non-controlling interests in subsidiaries are presentedseparately from the equity attributable to equity owners of the parent company.When changes in ownership in a subsidiary do not result in a loss of control,the non-controlling shareholders' interest are initially measured at thenon-controlling interests' proportionate share of the subsidiaries net assets.Subsequent to this, the carrying amount of non-controlling interests is theamount of those interests at initial recognition plus the non-controllinginterests' share of subsequent changes in equity. Total comprehensive income isattributed to non-controlling interests even if this results in thenon-controlling interests having a deficit balance.

Revenue

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

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

Rental income which excludes services charges recoverable from tenants, isrecognised in the group income statement on a straight-line basis over the termof the lease. This includes the effect of lease incentives.

Investment 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 are notrecognised as investment properties and are held at depreciated historicalcost.

The fair value of the head leases is the net present value of the current headrent payable on leasehold properties until the expiry of the lease.

Mining reserves, plant and equipment

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

Provisions

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

A provision for rehabilitation of the mine is carried at present value and isprovided for over the life of mine. The provision includes the restoration ofthe underground, opencast, surface operations and de-commissioning of plant andequipment and is estimated to be utilised at the end of the life of mine of thegroup. The timing and final cost of the rehabilitation is uncertain and willdepend on the duration of the mine life and the quantities of coal extractedfrom the reserves.

Mine reserves and development cost

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

Surface mine 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 charged tothe income statement over the life of the recoverable reserves of the scheme.

Other assets and depreciation

The cost, less estimated residual value, of other property, plant and equipmentis written off on a straight-line basis over the asset's expected useful life.Residual values and useful lives are reviewed, and adjusted if appropriate, ateach balance sheet date. Changes to the estimated residual values or usefullives are accounted for prospectively. Heavy surface mining and other plant andequipment is depreciated at varying rates depending upon its expected usage.

The depreciation rates generally applied are:

Mining equipment The shorter of its useful life or the life of the 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 28 under the heading Share option schemes which is within the audited partof that report. Pensions

The group operates a defined contribution pension scheme. The contributionspayable 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 andthe resulting exchange rate differences are included in the consolidated incomestatement within the results of operating activities if arising from tradingactivities and within finance cost/income if arising from financing. For consolidation purposes, income and expense items are included in theconsolidated income statement at average rates, and assets and liabilities aretranslated at year end exchange rates. Translation differences arising onconsolidation are recognised in other comprehensive income. Where foreignoperations are disposed of, the cumulative exchange differences of that foreignoperation are recognised in the consolidated income statement when the gain orloss on disposal is recognised.

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

Financial Instruments

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

Bank loans and overdrafts

Bank loans and overdrafts are included as financial liabilities on the groupbalance sheet at the amounts drawn on the particular facilities net of theunamortised cost of financing. Interest payable on those facilities is expensedas finance cost in the period to which it relates.

Finance lease 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 amounts asthe 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 areaccounted for at amortised cost.

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 amountand fair value less costs to sell.

Inventories

Inventories are stated at the lower of cost and net realisable value. Costincludes materials, direct labour and overheads relevant to the stage ofproduction. Net realisable value is based on estimated selling price less allfurther costs to completion and all relevant marketing, selling anddistribution costs.

Other 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 ofan asset may not be recoverable an asset is reviewed for impairment. An asset'scarrying value is written down to its estimated recoverable amount (being thehigher of the fair value less cost to sell and value in use) if that is lessthan the asset's carrying amount.

Deferred 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, and isaccounted for using the balance sheet liability method. Deferred taxliabilities are generally recognised for all taxable temporary differences anddeferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporarydifferences can be utilised. In respect of the deferred tax on the revaluationsurplus, this is calculated on the basis of the chargeable gains that wouldcrystallise on the sale of the investment portfolio as at the reporting date.The calculation takes account of indexation on the historical cost of theproperties and any available capital losses. Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the group income statement, except when it relates toitems charged or credited directly to other comprehensive income, in which caseit is also dealt with in other comprehensive income.

Dividends

Dividends payable on the ordinary share capital are recognised as a liabilityin 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 convertible toknown amounts of cash and which are subject to an insignificant risk of changesin value and original maturities of three months or less. The cash and cashequivalents shown in the cashflow statement are stated net of bank overdrafts.

Segmental 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 STATEMENTS

for the year ended 31 December 2012

1. Segmental reporting Business analysis Mining Property 2012 Total Other £'000 £'000 £'000 £'000 Significant revenue 10,510 - - 10,510customer A Significant revenue 6,120 - - 6,120customer B Significant revenue 3,110 - - 3,110customer C Other revenue 15,212 957 53 16,222 Segment revenue 34,952 957 53 35,962 Operating profit before 2,519 666 46 3,231fair value adjustments &exchange movements Revaluation of (357) (456) 39 (774)investments & exchangemovements Operating profit and 2,162 210 85 2,457segment result Segment assets 15,789 12,322 2,786 30,897 Unallocated assets * Non-current assets 2 * Cash & cash 1,802 equivalents Total assets excluding 32,701investment in jointventures Segment liabilities (9,416) (2,159) (1,271) (12,846) Borrowings (102) (5,086) - (5,188) (9,518) (7,245) (66) (16,829) Unallocated liabilities (1,086) Total liabilities (19,120) Net assets 13,581 Investment in joint 4,178ventures non segmental Net assets as per balance 17,759sheet Geographic analysis United South Other Unallocated Total Kingdom Africa £'000 £'000 £'000 £'000 £'000 Revenue 1,010 34,952 - - 35,962 Operating profit and 295 2,162 - - 2,457segment result Non-current assets 11,814 8,638 - - 20,452excluding investments Total net assets 5,857 6,170 43 5,689 17,759 Capital expenditure 1 3,680 - - 3,681

1. Segmental reporting continued

Business analysis Mining Property 2011 Total Other £'000 £'000 £'000 £'000 Significant revenue 8,577 - - 8,577customer A Significant revenue 7,527 - - 7,527customer B Significant revenue 2,280 - - 2,280customer C Other Revenue 10,508 989 28 11,525 Segment revenue 28,892 989 28 29,909 Operating (loss)/profit (787) 630 13 (144)before fair valueadjustments & exchangemovements Revaluation of investments (975) (42) (167) (1184)& exchange movements Operating (loss)/profit and (1,762) 588 (154) (1,328)segment result Segment assets 15,212 12,551 730 28,493 Unallocated assets - Non-current assets 7 - Cash & cash equivalents 4,041 Total assets excluding 32,541investment in jointventures Segment liabilities (7,928) (2,498) (27) (10,453) Borrowings (316) (5,000) - (5,316) (8,244) (7,498) (27) (15,769) Unallocated liabilities (4,132) Total liabilities (19,901) Net assets 12,640 Investment in joint 4,364ventures non segmental Net assets as per balance 17,004sheet Geographic analysis United South Other Unallocated Total Kingdom Africa £'000 £'000 £'000 £'000 £'000 Revenue 1,017 28,892 - - 29,909 Operating profit/(loss) 434 (1,762) - - (1,328)and segment result Non-current assets 12,290 7,920 - 6 20,216excluding investments Total net assets 5,725 6,944 57 4,278 17,004 Capital expenditure 1 2,527 - - 2,528 2. Operating costs 2012 2011 £'000 £'000 Mining 25,501 22,579 Property 135 104 Cost of sales 25,636 22,683 Administration 7,095 7,370 Operating costs 32,731 30,053 The direct property costs are: Ground rent 9 6 Direct property expense 86 70 Bad debts 40 28 135 104

Operating costs above include depreciation of £2,253,000 (2011: £2,488,000)

3. (Loss)/Gain on revaluation and sale of investment properties

The reconciliation of the investment deficit to the loss on revaluation ofinvestment properties in the income statement is set out below:

2012 2011 £'000 £'000 Investment deficit (476) (53) Loss on valuation movement in respect of head lease 20 11payments Loss on revaluation of investment properties (456)

(42)

4. Profit/(Loss) before taxation

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

2012 2011 £'000 £'000 Staff costs (see note 29) 6,000 5,872 Depreciation 2,253 2,488 Exchange loss 357 975 Fees payable to the company's auditor for 33

26

the audit of the company's annual accounts Fees payable to the company's auditor andits associates for other services: The audit of the company's subsidiaries, pursuant to 31 34legislation Corporate finance 17 - Other services 5 5

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

5. Directors' emoluments

Directors' emoluments are shown in the Directors' remuneration report on pages28 and 29 under the heading Directors' remuneration which is within the auditedpart of that report. 6. Interest payable 2012 2011 £'000 £'000 On bank overdrafts and bank loans 352 369 Other interest payable 59 11 Interest payable 411 380 7. Taxation 2012 2011 £'000 £'000 (a) Based on the results for the year: Corporation tax 7 - Adjustment in respect of prior years - SA - (332) Current tax 7 (332) Deferred tax - current year 643 (572) Total tax in income statement 650

(904)

(b) Factors affecting tax charge for the year: The corporation tax assessed for the year is differentfrom that at the standard rate of corporation tax in theUnited Kingdom of 24.5% (2011: 26.5%) The differences are explained below:

Profit/(Loss) on ordinary activities before taxation 2,190 (1,450)

Tax on profit/ (loss) on ordinary activities at 24.5% 537 (384)(2011: 26.5%) Effects of: Expenses not deductible for tax purposes 25 30 Capital losses on disposal - (11) Non-taxable income - (37) Other differences 88 (170) Adjustment in respect of prior years - (332) Total tax 650 (904)

(c) Analysis of United Kingdom and Overseas tax

United Kingdom tax included in above:

Corporation tax 2

-

Adjustment in respect of prior years - - Current tax 2 - Deferred tax (101) (201) (99) (201)

Overseas tax included in above:

Corporation tax 5

-

Adjustment in respect of prior years - (332) Current tax 5 (332) Deferred tax 744 (371) 749 (703) 8. Dividends paid 2012 2012 2011 2011 Per share £'000 Per share £'000 Dividends paid during the year 4.00 p 422 4.00 p 418relating to the prior period Dividends to be paid: Interim dividend for 2012 paid on 1 1.00 p 105 1.00 p 105February 2013 Proposed final dividend for 2012 3.00 p 317 3.00 p 317 4.00 p 422 4.00 p 422

The dividends to be paid are not accounted for until they have been approved atthe Annual General Meeting. The amount will be accounted for as anappropriation of retained earnings in the year ending 31 December 2013.

9. Profit/(Loss) and diluted profit/(loss) per share

Both the basic and diluted profit/(loss) per share calculations are based on aprofit of £1,295,000 (2011: loss of £444,000). The basic profit/(loss) pershare has been calculated on a weighted average of 10,556,839 (2011:10,495,395) ordinary shares being in issue during the period. The dilutedprofit/(loss) per share has been calculated on the weighted average number ofshares in issue of 10,556,839 (2011: 10,495,395) plus the dilutive potentialordinary shares arising from share options of 165,722 (2011: nil) totalling10,722,561 (2011: 10,495,395). In 2011, dilutive potential ordinary shares of 239,607 were excluded from thecalculation of diluted ordinary shares as there was no dilutive effect due tothe loss for the year. 10. Investment properties Freehold Long Total £'000 Leasehold £'000 £'000 Valuation at 1 January 2012 9,118 2,950 12,068 Revaluation (229) (227) (456) Valuation at 31 December 2012 8,889 2,723 11,612 Valuation at 1 January 2011 9,110 3,000 12,110 Revaluation 8 (50) (42) Valuation at 31 December 2011 9,118 2,950 12,068 Historical cost At 31 December 2012 4,801 728 5,529 At 31 December 2011 4,801 728 5,529

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

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

Freehold and Long Leasehold properties were externally professionally valued at31 December on an open market basis by:

2012 £'000 BNP Paribas Real Estate 11,612 11,612

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

The Royal Institution of Chartered Surveyors.

11. Mining reserves, plant and equipment

Mining Mining Motor Office Total Reserves equipment Vehicles equipment £'000 £'000 £'000 £'000 £'000 Cost at 1 January 2012 1,815 14,467 170 115 16,567 Exchange adjustment (164) (1,310) (11) (6) (1,491) Additions - 3,678 - 3 3,681 Cost at 31 December 2012 1,651 16,835 159 112 18,757 Accumulated depreciation 1,523 6,905 127 86 8,641 at 1 January 2012 Exchange adjustment (138) (626) (7) (4) (775) Charge for the year 53 2,183 9 8 2,253 Accumulated depreciation 1,438 8,462 129 90 10,119 at 31 December 2012 Net book value at 31 213 8,373 30 22 8,638December 2012 Cost at 1 January 2011 2,212 14,940 429 128 17,709 Exchange adjustment (397) (2,683) (53) (14) (3,147) Additions - 2,526 - 2 2,528 Disposals - (316) (206) (1) (523) Cost at 31 December 2011 1,815 14,467 170 115 16,567 Accumulated depreciation 1,768 5,897 345 84 8,094at 1 January 2011 Exchange adjustment (318) (1,059) (41) (7) (1,425) Charge for the year 73 2,383 22 10 2,488 Disposals in year - (316) (199) (1) (516) Accumulated depreciation 1,523 6,905 127 86 8,641 at 31 December 2011 Net book value at 31 292 7,562 43 29 7,926December 2011

12. Investments held as non-current assets

2012 2012 2011 2011 Joint Other Joint Other Ventures Ventures Assets Assets £'000 £'000 £'000 £'000 At 1 January 2579 431 2,404 433 Transfers 618 (298) (703) - Additions - - 888 - Exchange adjustment - (2) - (2) Share of (loss)/gain in joint (136) - (10) -ventures Net assets at 31 December 3,061 131 2,579 431 Loan to joint venture: At 1 January - - 1,203 - Exchange adjustments (100) (216) Additions 114 - 116 - Transfers 1,103 - (1,103) - At 31 December 1,117 - - - At 31 December 4,178 131 2,579 431 Provision for diminution in value: At 1 January - (283) - (283) Transfer - 283 - - At 31 December - - - (283) Net book value at 31 December 4,178 131 2,579

148

Included in other investments are: 2012 2011 £'000 £'000 Net book value of unquoted 124 135investments Net book value of investments listed 7

13

on overseas stock exchanges 131 148 Market value of the overseas listed 11

13

investments The transfer of the investment and loan to joint venture relates to the stakein the joint venture company, Ezimbokodweni Mining (Proprietary) Limited whichwas held as a non-current asset held for sale in the prior year. Furtherdetails are disclosed in note 14.

13. Joint ventures

The 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(2011: 500,000) ordinary shares of £1 each. During 2011 the company acquired 12.5% of the units of Langney Shopping CentreUnit Trust, an unlisted property unit trust incorporated in Jersey. 12.5% ofthe 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 UKReal Estate Fund. The company owns 49% of the issued share capital of Ezimbokodweni Mining (pty)Limited. This asset was reclassified as a non-current asset held for sale inthe prior year but was transferred back to investments in joint ventures in2012. Further details are provided in note 14. Langney Dragon Ezimbokodweni 12.5% 50% 49% 2012 2011 £'000 £'000 £'000 £'000 £'000 Turnover 90 102 - 192 183 Profit and loss (Loss)/Profit before tax (42) (93) - (135) (9) Taxation - (2) - (2) (1) (Loss)/Profit after (42) (95) - (137) (10)taxation Balance sheet Non-current assets 1,931 1,405 1,114 4,450 3,519 Current assets 112 1,789 3 1,904 1,425 Current liabilities (87) (1,487) (1,117) (2,691) (1,131) Non-current liabilities (1,174) (110) - (1,284) (1,234) Share of net assets at 31 782 1,597 - 2,379 2,579December

14. Non-current assets held for sale

2012 2011 £'000 £'000 At 1 January 1785 - Transfer of stake in joint venture company - 1,785now held for sale Transfer of stake in joint venture company (1785)

-

now held as non-current asset investment Net assets at 31 December - 1,785 On 26 January 2012 the Company announced that it had entered into an agreementfor the sale of its 49% participation in a South African registered jointventure company, Ezimbokodweni Mining (Proprietary) Limited ("Ezimbokodweni"),for ZAR 54.2 million. Ezimbokodweni was established in 2005 with Endulwini Coal Limited to acquirefrom BHP Billiton Energy Coal South Africa Limited ("BECSA") a shallow coaldeposit located in the Witbank coalfield of Mpumalanga, some 40 km from theCompany's existing coal mining operations at the Black Wattle colliery. Sincethen, Ezimbokodweni has been negotiating with BECSA and the South AfricanDepartment of Mineral Resources ("DMR") to finalise the acquisition and preparefor opencast mining. In 2011, following the intervention of the DMR, the Company had agreed todispose of its stake in Ezimbokodweni. The agreement made on 26 January 2012was conditional on the satisfaction by 15 May 2012 of conditions precedent. At15 May 2012 the conditions precedent remained unfulfilled and the agreement todispose of its stake in Ezimbokodweni lapsed.

However to date, Ezimbokodweni has continued to negotiate with the respectiveparties to finalise the acquisition of the reserve and prepare for opencastmining. As a result the asset has been reallocated to investments in jointventures. Details of which can be found in Note 12.

15. Subsidiary companies

The company owns the following ordinary share capital of the principalsubsidiaries which are included within the consolidated financial statements: Activity Percentage of Country of share capital incorporation Mineral Products Limited Share dealing 100% England and Wales Black Wattle Colliery Coal mining 62.5% South Africa(pty) Limited Bisichi Coal Mining (pty) Coal mining 100% South AfricaLimited Bisichi Mining Holding company 100% England and Wales(Exploration) Limited Ninghi Marketing Limited Dormant 90.1% England and Wales Details on the non-controlling interest in subsidiaries are shown under note27. 16. Inventories 2012 2011 £'000 £'000 Coal Washed 1,165 284 Run of mine 365 440 Work in progress 290 432 Other 56 50 1,876 1,206

17. Trade and other receivables

2012 2011 £'000 £'000 Amounts falling due withinone year: Trade receivables 5,089 5,818 Amount owed by joint 2,000 -venture Other receivables 315 130 Prepayments and accrued 200 119income 7,604 6,067

18. Held for trading investments

2012 2011 £'000 £'000 Market value of ListedInvestments: Listed in Great Britain 731 657 Listed outside Great Britain 56 73 787 730 Original cost of Listed 749 749Investments Unrealised surplus/(deficit) of 38 (19)market value over cost 19. Trade and other payables 2012 2011 £'000 £'000 Trade payables 4,824 4,313 Amounts owed to joint 1,205 1,205ventures Other payables 545 528 Accruals and deferred income 2,644 2,544 9,218 8,590

20. Financial liabilities - borrowings

Current Non-current 2012 2011 2012 2011 £'000 £'000 £'000 £'000 Bank overdraft (secured) 1,084 2,927 - - Bank loan (secured) 5,102 5,230 86 86 6,186 8,157 86 86 2012 2011 £'000 £'000 Bank overdraft and loaninstalments by referenceto the balance sheet date: Within one year 6,186 8,157 From one to two years - 86 From two to five years 86 - 6,272 8,243 Bank overdraft and loananalysis by origin: United Kingdom 5,145 5,000 Southern Africa 1,127 3,243 6,272 8,243 The United Kingdom bank loans and overdraft are secured by way of a firstcharge over the investment properties in the UK which are included in thefinancial statements at a value of £11,612,000. The South African bank loansare secured by way of a first charge over specific pieces of mining equipment,inventory and the debtors of the relevant company which holds the loan whichare included in the financial statements at a value of £8,505,000. 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 2012 thisincreased to 25.8% (2011: 25.1%) which was calculated as follows: 2012 2011 £'000 £'000 Total debt 6,272 8,243 Less cash and cash (1,802) (4,041)equivalents Net debt 4,470 4,202 Total equity 17,315 16,773 Gearing 25.8% 25.1%

21. Provision for rehabilitation

2012 2011 £'000 £'000 As at 1 January 965 1,025 Exchange adjustment (87) (184) Additions 111 124 As at 31 December 989 965 22. Financial instrumentsTreasury policy The 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-term liquidassets and loans to joint ventures. Interest bearing borrowings comprise bankloans, bank overdrafts and variable rate finance lease obligations. The ratesof interest vary based on LIBOR in the UK and PRIME in South Africa. As at 31 December 2012, with other variables unchanged, a 1% increase ordecrease in interest rates, on investments and borrowings whose interest ratesare not fixed, would respectively decrease or increase the loss for the year by£19,000 (2011: £28,000). The effect on equity of this change would be anequivalent decrease or increase for the year of £19,000 (2011: £28,000).

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. The following table sets out the maturity profile of the financial liabilitiesas at 31 December: 2012 2011 £'000 £'000 Within one year 15,239 16,578 From one to two years 13 185 From two to five years 123 37 Beyond five years 139 73 15,514 16,873 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 and cashthat are held by Black Wattle Colliery (pty) Limited. This facility comprisesof a R40million revolving loan to cover the working capital requirements of thegroup's South African operations, and a R20million loan facility to coverguarantee requirements related to the group's South African mining operations.The facility is renewed on an annual basis. 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 is secured against the group's UK retail propertyportfolio. At 31 December 2012 the group was within its bank borrowingfacilities and had not breached any of its covenants. The group is working withthe bank on the renewal of the current banking facilities and the bank hasagreed to an extension, in principle, of the existing facilities to the 30 June2013 from its original expiry date of 31 December 2012, whilst the discussionsare on-going and the new facility is documented.

Credit risk

The group is exposed to credit risk on its cash and cash equivalents, trade andother receivables and amounts owed by joint ventures as per the balance sheet.At the balance sheet date there was no significant concentration of creditrisk. The maximum exposure to credit risk is represented by the carrying amountof each financial asset in the balance sheet which at year end amounted to £10,323,000 (2011: £9,989,000). 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 trade receivables held past duedate was £147,000 (2011: £313,000). The amount of trade receivables held pastdue date has subsequently been settled.

Financial assets maturity

On 31 December 2012, cash at bank and in hand amounted to £1,802,000 (2011: £4,041,000) 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 boththe fair value and the carrying value:

Loans and Financial Assets at 2012 2011 receivables Liabilities fair value measured at through £'000 £'000 £'000 amortised profit and cost loss £'000 £'000 Cash and cash 1,802 - - 1,802 4,041equivalents Investments held - - 787 787 730for trading Other Investments - - 131 131 148 Trade and other 8,521 - - 8,521 5,948receivables Bank Borrowings - (6,272) - (6,272) (8,243) Finance leases - (202) - (202) (222) Other Liabilities - (9,040) - (9,040) (8,407) 10,323 (15,514) 918 (4,273) (6,005) Investments held for trading fall under level 1 of the fair value hierarchyinto which fair value measurements are recognised in accordance with the levelsset out in IFRS 7. Other investments are held at cost. The directors are of theopinion that the difference in value between cost and fair value of otherinvestments is not significant or material. The comparative figures for 2011fall under the same category of financial instrument as 2012.

Commodity price risk

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

From time to time the group may manage its exposure to commodity price risk byentering into forward sales contracts with the goal of preserving futurerevenue streams.

Foreign exchange risk

All trading is undertaken in the local currencies. Funding is also in localcurrencies other than inter-company investmentsand loans and it is not the group's policy to obtain forward contracts tomitigate foreign exchange risk on these amounts. During 2012 and 2011 the groupdid not hedge its exposure of foreign investments held in foreign currencies.

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

2012 2011 £'000 £'000 Sterling 131 2,152 South African Rand 1,527 1,737 US Dollar 144 152 1,802 4,041

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

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

2012: Sterling South African £'000 Rands £'000 Sterling (4,187) - South African Rand 1,054 (1,296) US Dollar 157 - (2,976) (1,296) 2011: Sterling South African £'000 Rands £'000 Sterling (4,461) - South African Rand 1,172 (2,888) US Dollar 172 - (3,117) (2,888) The directors consider there to be no significant risk from exchange ratemovements of foreign currencies against the functional currencies of thereporting companies within the group. As such no sensitivity analysis isprepared. 23. Deferred taxation 2012 2011 £'000 £'000 Balance at 1 January 1,881 2,340 Recognised in income 643 (572) Reallocated - 291 Exchange adjustment (87) (178) 2,437 1,881 The deferred tax balancecomprises the following: Revaluation of properties 895 1,089 Capital allowances 1,312 678 Short-term timing 230 114differences 2,437 1,881 24. Share capital 2012 2011 £'000 £'000 Authorised: 1,300 1,300 13,000,000 ordinary sharesof 10p each Allotted and fully paid: 1,056 1,056 10,556,839 (2011:10,556,839) ordinaryshares 25. Other reserves 2012 2011 £'000 £'000 Equity share options 442 414 Net premium on share 86 86capital in jointventure 528 500 26. Share based payments Details of the share option scheme are shown in the Directors' remunerationreport on page 28 and 29 under the heading Share option schemes which is withinthe audited part of this report. Further details of the share option schemesare set out below.

The Bisichi Mining PLC Unapproved Option Schemes:

Year of Subscription Period within Number of Number of Number ofgrant price per which options share for share share share which options exercisable options issued/ for which outstanding exercised/ options at 31 (cancelled) December during year outstanding 2011 at 31 December 2012 2002 34.0p Sep 2005 - Sep 313,000 (313,000) - 2012 2004 149.0p Sep 2007 - Sep 80,000 - 80,000 2014 2006 237.5p Oct 2009 - Oct 325,000 - 325,000 2016 2010 202.5p Aug 2013 - Aug 80,000 - 80,000 2020 2012 34.0p Oct 2012 - Sep - 233,000 233,000 2022 The exercise of options under the Unapproved Share Option Schemes, for certainoption issues, is subject to the satisfaction of objective performanceconditions specified by the remuneration committee, which will conform toinstitutional shareholder guidelines and best practice provisions in force fromtime to time. The performance conditions for the 2004 and 2010 scheme, agreedby members on 23 June 2005 and 31 August 2010 respectively, requires growth innet assets over a three year period to exceed the growth of the retail pricesindex by a scale of percentages. There are no performance conditions attachedto the other schemes.

The 2012 options were valued at £212,000 at date of grant using theBlack-Scholes-Merton model with the following assumptions:

Expected volatility 38.83% Expected life 4.00 Years Risk free rate 0.50 % Expected dividends 3.48 % Expected volatility was determined by reference to the historical volatility ofthe share price over a period commensurate with the option's expected life. Theexpected life used in the model is based on the risk-averse balance likely toberequired by the option holders. 2012 2012 2011 2011 Number Weighted Number Weighted average average Exercise Exercise price price Outstanding at 1 January 798,000 145.2p 798,000 145.2p Granted during year 233,000 34.0p - - Cancelled during the year (233,000) 34.0p - - Exercised During the year (80,000) 34.0p - - Outstanding at 31 December 718,000 157.6p 798,000 145.2p Exercisable at 31 December 638,000 152.0p 718,000 138.9p 27. Non-controlling Interest 2012 2011 £'000 £'000 As at 1 January 231 394 Share of profit/(loss) for the year 245 (102) Exchange adjustment (32) (61) As at 31 December 444 231 The non-controlling interest relates to the disposal of a 37.5% shareholding inBlack Wattle Colliery (pty) Ltd in 2010. The total issued share capital inBlack Wattle Colliery (pty) Ltd was increased from 136 shares to 1000 shares atpar of R1 (South African Rand) through the following shares issue:

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

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

- a subscription for 265 "A" shares at par by Vunani Mining (pty) Ltd

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

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

The "A" shares rank pari passu with the ordinary shares save that they willhave no dividend rights until such time as the dividends paid by Black WattleColliery (pty) Ltd on the ordinary shares subsequent to 30 October 2008 willequate to R832,075,000. A non-controlling interest of 15% in Black Wattle Colliery (pty) Ltd isrecognised for all profits distributable to the 110 ordinary shares held byVunani Mining (pty) Ltd from the date of issue of the shares (18 October 2010).An additional non-controlling interest will be recognised for all profitsdistributable to the 265 "A" shares held by Vunani Mining (pty) Ltd after suchtime as the profits available for distribution, in Black Wattle Colliery (pty)Ltd, before any payment of dividends after 30 October 2008, exceedsR832,075,000.

28. Related Party Transactions

At 31 During the December year Amounts Amounts Costs Cash paid owed owed recharged (to) to related by related (to) / by / by related related party party party party £'000 £'000 £'000 £'000 Related party: London & Associated Properties 6 - 172 (533)PLC (note (a)) Langney Shopping Centre Unit - (15) - 64Trust (note (b)) Dragon Retail Properties 1,205 (2,000) (145) (1,855)Limited (note (c)) Ezimbokodweni Mining (pty) - (1,117) (14) -Limited (note (d)) As at 31 December 2012 1,211 (3,132) 13 (2,324) London & Associated Properties 367 - 275 (234)PLC (note (a)) Langney Shopping Centre Unit - (15) (21) 6Trust (note (b)) Dragon Retail Properties 1,205 - (42) 42Limited (note (c)) Ezimbokodweni Mining (pty) - (1,103) 100 -Limited (note (d)) As at 31 December 2011 1,572 (1,118) 312 (186)

London & Associated Properties PLC is a substantial shareholder.

Langney Shopping Centre Unit Trust and Dragon Retail Properties Limited arejoint ventures and are treated as non-current asset investments.

Ezimbokodweni Mining (pty) Limited is a joint venture and is treated as anon-current asset investment.

(a) London & Associated Properties PLC

Property management, office premises, general management, accounting andadministration services are provided for Bisichi Mining PLC and its UKsubsidiaries.

(b) Langney Shopping Centre Unit Trust

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

(c) Dragon Retail Properties Limited

Dragon Retail Properties Limited ("Dragon") is owned equally by the company andLondon & Associated Properties PLC. During the year the company lent £2millionto Dragon at 6.875 per cent annual interest.

(d) Ezimbokodweni Mining (pty) Limited

Ezimbokodweni Mining is a prospective coal production company based in SouthAfrica.

Details of key management personnel compensation and interest in share optionsare shown in the Directors' Remuneration Report on pages 28 to 29 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 £108,000. A loan has been made to one of the directors, Mr A RHeller, for £116,000. This loan is subject to shareholder approval. Details ofloans to directors can also be found in the Directors' Report on page 24. 29. Employees 2012 2011 Number Number The average weekly numbers of employees of thegroup during the year were as follows: Production 218 229 Administration 19 18 237 247 £'000 £'000 Staff costs during the year were as follows: Salaries 5,607 5,485 Social security costs 129 117 Pension costs 236 255 Share based payments 28 15 6,000 5,872 30. Capital commitments 2012 2011 £'000 £'000 Commitments for capital expenditure approved 507

558

but not contracted for at the year end Share of commitment of capital expenditure in 1,829

-

joint venture

31. Head lease commitments and future property lease rentals

Present value of head leases on properties

Minimum lease payments Present value of minimum lease payments 2012 2011 2012 2011 £'000 £'000 £'000 £'000 Within one year 13 13 13 13 Second to fifth year 50 53 47 50 After five years 1,527 1,627 142 159 1,590 1,693 202 222 Discounting (1,388) (1,471) - -adjustment Present value 202 222 202 222 Finance lease liabilities are in respect of leased investment property. Many ofthe leases provide for contingent rents in addition to the rents above whichare a proportion of rental income. Finance lease liabilities are effectivelysecured as the rights to the leased asset revert to the lessor in event ofdefault. The group leases out its investment properties under operating leases. Thefuture aggregate minimum rentals receivable under non-cancellable operatingleases are as follows: 2012 2011 £'000 £'000 Within one year 847 902 Second to fifth year 2,718 2,669 After five years 10,332 10,169 13,897 13,740 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: 2012 2011 £'000 £'000 Rail siding 78 2 Rehabilitation of mining land 1,454 1,599 Water & electricity 68 74

Company Registration No. 112155

COMPANY BALANCE SHEETat 31 December 2012 2012 2011 Notes £'000 £'000 Fixed assets Tangible assets 34 11,614 12,075 Investment in joint ventures 35 1,734 1,734 Other investments 35 1,686 1,698 Debtors - amounts due in more than one year 36 1,055 - 16,089 15,507 Current assets Debtors - amounts due within one year 36 3,436 2,584 Bank balances 1,136 3,237 4,572 5,821 Creditors - amounts falling due within one year 37 (7,287) (7,394) Net current liabilities (2,715) (1,573) Total assets less current liabilities 13,374

13,934

Creditors - amounts falling due in more than one 37 (86)

-

year - medium term bank loan Provision for liabilities and charges 38 (40) - Net assets 13,248 13,934 Capital and reserves Called up share capital 24 1,056 1,056 Share premium account 39 169 169 Revaluation reserve 39 5,685 6,141 Other reserves 39 443 415 Retained earnings 39 5,895 6,153 Shareholders' funds 13,248 13,934

The company financial statements were approved and authorised for issue by theboard of directors on 18 April 2013 and signed on its behalf by:

A R Heller G J Casey Director Director COMPANY ACCOUNTING POLICIES

for the year ended 31 December 2012

The following are the main accounting policies of the company:

Accounting convention

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

Dividends received

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

Depreciation

Provision for depreciation on tangible fixed assets is made in equal annualinstalments to write each item off over its useful life. The rates generallyused are:

Motor vehicles 25 - 33 per cent

Office equipment 10 - 33 per cent

Foreign currencies

Monetary assets and liabilities expressed in foreign currencies have beentranslated at the rates of exchange ruling at the balance sheet date. Allexchange differences are taken to the profit and loss account.

Investment 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 not inaccordance with the Companies Act 2006, results in the accounts giving a trueand fair view. Depreciation or amortisation is only one of many factorsreflected in the valuation and the amount which might otherwise have been showncannot be separately identified or quantified.

Investments

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

Financial Instruments

Bank loans and overdrafts

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

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

Interest rate 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

Amounts due from subsidiary undertakings are held at present value where theinterest that would be recognised from discounting future cash payments isconsidered to be material. Other debtors do not carry interest and are statedat their nominal value as reduced by appropriate allowances for estimatedrecoverable amounts.

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 taxation As required by FRS 19 "Deferred Tax", full provision is made for deferred taxarising from all timing differences between the recognition of gains and lossesin the financial statements and recognition in the tax computation, except forthose timing differences in respect of which the standard specifies thatdeferred tax should not be recognised. Deferred tax assets and liabilities arecalculated at the tax rates expected to be effective at the time the timingdifferences are expected to reverse.

Leased Assets and Obligations

All leases are "Operating Leases" and the annual rentals are charged to theprofit and loss account on a straight line basis over the lease term. Rent freeperiods or other incentives received for entering into a lease are accountedfor over the period of the lease so as to spread the benefit received over thelease term. Pensions

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

Share based 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 28 and 29 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 2012

33. Dividends

The aggregate amount of dividends comprises:

2012 2011 £'000 £'000

Final dividends in respect of prior year but not recognised 422 418as liabilities in that year:

The aggregate amount of dividends to be paid and not recognised as liabilitiesas at year end is £422,000 (2011: £422,000).

34. Tangible fixed assets Investment properties Freehold Long Motor Office Total £'000 Leasehold Vehicles Equipment £'000 £'000 £'000 £'000 Cost or valuation at 1 9,118 2,950 48 52 12,168January 2012 Additions - - - 1 1 Revaluation (229) (227) - - (456) Cost or valuation at 31 8,889 2,723 48 53 11,713December 2012 At valuation 8,889 2,723 - - 11,612 At cost - - 48 53 101 8,889 2,723 48 53 11,713 Accumulated depreciation - - 47 46 93 at 1 January 2012 Charge for the year - - 1 5 6 Accumulated depreciation - - 48 51 99 at 31 December 2012 Net book value at 31 December 8,889 2,723 - 2 11,6142012

Net book value at 31 December 9,118 2,950 1 6 12,0752011

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

35. Investments Joint Subsidiaries ventures Shares Shares Loans Other Total Investments £'000 £'000 £'000 £'000 £'000 Cost at 1 January 2012 1,734 361 1,320 300 1,981 Drawn in year - - 5 - 5 Transfer - - - (300) (300) Cost at 31 December 2012 1,734 361 1,325 - 1,686 Provision for impairment As at 1 January - - - (283) (283) Transfer - - - 283 283 As at 31 December 2012 - - - - - Net book value at 31 December 1,734 361 1,325 - 1,6862012

Net book value at 31 December 1,734 361 1,320 17 1,6982011

Other investments comprise £nil (2011: £17,000) shares.

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

36. Debtors 2012 2011 £'000 £'000 Amounts due within one year: Amounts due from subsidiary undertakings 928 2,322 Tax recoverable - 21 Other debtors 309 128 Joint venture 2000 - Prepayments and accrued income 199 113 3,436 2,584 Amounts due in more than one year: Amounts due from subsidiary 1,055 -undertakings 37. Creditors 2012 2011 £'000 £'000 Amounts falling due within one year: Bank overdraft (secured) 59 - Bank loan (secured) 5,000 5,000 Joint venture 1205 1,205 Current taxation 2 - Other taxation and social security 86 96 Other creditors 233 246 Accruals and deferred income 702 847 7,287 7,394 Amounts falling due in more than one year: Bank loan (secured) 86 - 2012 2011 £'000 £'000 Bank and other loaninstalments by referenceto the balance sheet date: Within one year 5000 5000 From one to two years - - From two to five years 86 - 5,086 5,000

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

38. Provisions for liabilities

Deferred taxation Balance at 1 January - - Provision 40 - 40 -

No provision has been made for the approximate taxation liability at 24.5%(2011: 26.5%) of £895,000 (2011: £1,086,000) which would arise if theinvestment 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 1,056 169 6,141 415 6,153 13,9342012 Dividend paid - - - - (422) (422) Revaluation of - - (456) - - (456)investment property Share options - - - 28 - 28 Retained profit for - - - - 164 164the year Balance at 31 1,056 169 5,685 443 5,895 13,248December 2012

A profit and loss account for Bisichi Mining PLC has not been presented aspermitted by Section 408(2) of the Companies Act 2006. The profit for thefinancial year, before dividends, was £164,000 (2011: £75,000)

Details of share capital are set out in note 24 and details of the shareoptions are shown in the Directors' Remuneration Report on page 28 under theheading Share option schemes which is within the audited part of this reportand note 26.

40. Related party transactions

At 31 During the year December Amounts Costs Cash paid owed recharged (to) by related (to) / by / by party related related party £'000 party £'000 £'000 Related party: Black Wattle Colliery (pty) Ltd (171) 107 -(note (a)) Ninghi Marketing Limited (note (102) - -(b)) As at 31 December 2012 (273) 107 - Black Wattle Colliery (pty) Ltd (300) 1,485 654(note (a)) Ninghi Marketing Limited (note (102) - -(b)) As at 31 December 2011 (402) 1,485 654

(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 inEngland & Wales.

In addition to the above, the company has issued a company guarantee ofR20,000,000 (2011: R20,000,000) (South African Rand) to the bankers of BlackWattle Colliery (pty) Ltd in order to cover bank guarantees issued to thirdparties in respect of the rehabilitation of mining land.

Under Financial Reporting Standard 8 Related Party Disclosures, the Company hastaken advantage of the exemption from disclosing transactions with other whollyowned Group companies.

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