REG-Bisichi Mining PLC: Annual Financial Report <Origin Href="QuoteRef">BISI.L</Origin> - Part 4
28/04/2017 11:50
- Part 4: For the preceding part double click ID:nPRrS92E4c
attached to base salaries.
Pension To provide competitive retirement benefits Company contribution offered at up to 10% of base salary as part of overall remuneration package The contribution payable by the company is included in the director’s contract of employment. Paid into money purchase schemes Company contribution offered at up to 10% of base salary as part
of overall remuneration package. No specific performance
conditions are attached to pension contributions
Benefits To provide a competitive benefits package Contractual benefits can include but are not limited to: Car or car allowance Group health cover Death in service cover Permanent health insurance The committee retains the discretion to approve changes in contractual benefits in exceptional circumstances or where factors outside the control of the Group lead to increased costs (e.g. medical inflation) The costs associated with benefits offered are closely
controlled and reviewed on an annual basis. No director will
receive benefits of a value in excess of 30% of his base salary.
No specific performance conditions are attached to contractual
benefits. The value of benefits for each director for the year
ended 31 December 2016 is shown in the table on page 36.
Annual Bonus To reward and incentivise In assessing the performance of the executive team, and in particular to determine whether bonuses are merited the remuneration committee takes into account the overall performance of the business. Bonuses are generally offered in cash The remuneration committee determines the level of bonus on an annual basis applying such performance conditions and performance measures as it considers appropriate The current maximum bonus opportunity will not exceed 200% of
base salary in any one year, but the remuneration committee
reserves the power to award up to 300% in an exceptional year.
Performance conditions will be assessed on an annual basis. The
performance measures applied may be financial, non-financial,
corporate, divisional or individual and in such proportion as
the remuneration committee considers appropriate
Element Purpose Policy Operation Opportunity and performance conditions
Executive directors (Continued)
Share Options To provide executive directors with a long-term interest in the company Granted under existing schemes (see page 37) Offered at appropriate times by the remuneration committee Entitlement to share options is not subject to any specific performance conditions. Share options will be offered by the remuneration committee as appropriate. The aggregate number of shares over which options may be granted under all of the company’s option schemes (including any options and awards granted under the company’s employee share plans) in any period of ten years, will not exceed, at the time of grant, 10% of the ordinary share capital of the company from time to time. In determining the limits no account shall be taken of any shares where the right to acquire the shares has been released, lapsed or has otherwise
become incapable of exercise. The company currently has two Share Option Schemes (see page 37). The performance conditions for the 2010 scheme requires growth in net assets over a three year period to exceed the growth in the retail price index by a scale of percentages. For the 2012 scheme the remuneration committee has the ability to impose performance criteria in respect of any new share options granted, however there is no requirement to do so. There are no performance conditions attached to the options already issued under the 2012 scheme.
Non-executive directors
Base salary To recognise: Skills Experience Value Considered by the board on appointment. Set at a level considered appropriate to attract, retain and motivate the individual. Experience and time required for the role are considered on appointment. Reviewed annually No individual director will be awarded a base salary in excess of £40,000 per annum. No specific performance conditions are attached to base salaries.
Pension No pension offered
Benefits No benefits offered except to one non-executive director who is eligible for health cover (see annual remuneration report page 36) The committee retains the discretion to approve changes in contractual benefits in exceptional circumstances or where factors outside the control of the Group lead to increased costs (e.g. medical inflation) The costs associated with the benefit offered is closely controlled and reviewed on an annual basis. No director will receive benefits of a value in excess of the higher of 30% of his base salary or £10,000. No specific performance conditions are attached to contractual benefits.
Share Options Non-executive directors do not participate in the share option schemes
Notes to the future policy table
In order to ensure that shareholders have sufficient clarity over director
remuneration levels, the company has, where possible, specified a maximum that
may be paid to a director in respect of each component of remuneration. There
have been no other significant changes made to the future policy from the
previous remuneration policy. The remuneration committee consider the
performance measures outlined in the table above to be appropriate measures of
performance and that the KPI’s chosen align the interests of the directors
and shareholders.
For details of remuneration of other company employees please see page 45.
Remuneration scenarios
An indication of the possible level of remuneration that would be received by
each Executive Director in the year commencing 7 June 2017 in accordance with
the directors’ remuneration policy is shown below.
Assumptions
Minimum
Consists of base salary, benefits and pension.
Base salary, benefits and pension for 2017 are assumed at the levels included
in the single total figure remuneration table for the year ended 31 December
2016 on page 36.
On target
Based on the average percentage bonus awarded to the individual in the three
years ending on 31 December 2016. As outlined in the policy table above, the
remuneration committee has discretion to award bonuses of up to 200% of base
salary in any one year (up to 300% in an exceptional year).
Base salary, benefits and pension for 2017 are assumed at the levels included
in the single total figure remuneration table for the year ended 31 December
2016 on page 36.
Maximum
Based on maximum remuneration receivable of 300% of base salary awarded as
bonus in an exceptional year.
Base salary, benefits and pension for 2017 are assumed at the levels included
in the single total figure remuneration table for the year ended 31 December
2016 on page 36.
Approach to recruitment remuneration
All appointments to the board are made on merit. The components of a new
director’s remuneration package (who is recruited within the life of the
approved remuneration policy) would comprise base salary, pension, benefits,
annual bonus and opportunity to be granted share options as outlined above and
the company’s approach to such appointments are detailed with in the future
policy table above. The company will pay such levels of remuneration to new
directors that would enable the company to attract appropriately skilled and
experienced individuals that is not in the opinion of the remuneration
committee excessive.
Service contracts
All executive directors have full-time contracts of employment with the
company. Non-executive directors have contracts of service. No director has a
contract of employment or contract of service with the company, its joint
venture or associated companies with a fixed term which exceeds twelve months.
Directors’ notice periods (see page 37 of the annual remuneration report)
are set in line with market practice and of a length considered sufficient to
ensure an effective handover of duties should a director leave the company.
All directors’ contracts as amended from time to time, have run from the
date of appointment. Service contracts are kept at the registered office.
Policy on payment for loss of office
There are no contractual provisions agreed prior to 27 June 2012 that could
impact on a termination payment. Termination payments will be calculated in
accordance with the existing contract of employment or service contract. It is
the policy of the remuneration committee to issue employment contracts to
executive directors with normal commercial terms and without extended terms of
notice which could give rise to extraordinary termination payments.
Consideration of employment conditions elsewhere in the Group
In setting this policy for directors’ remuneration the remuneration
committee has been mindful of the company’s objective to reward all
employees fairly according to their role, performance and market forces. In
setting the policy for Directors’ remuneration the remuneration committee
has considered the pay and employment conditions of the other employees within
the group. No formal consultation has been undertaken with employees in
drawing up the policy. The remuneration committee has not used formal
comparison measures.
Consideration of shareholder views
No shareholder views have been taken into account when formulating this
policy. In accordance with the new regulations, an ordinary resolution for
approval of this policy will be put to shareholders at the AGM in June 2017.
Audit committee report
The committee’s terms of reference have been approved by the board and
follow published guidelines, which are available from the company secretary.
The audit committee comprises the two non-executive directors, Christopher
Joll (chairman), an experienced financial PR executive and John Sibbald, a
retired chartered accountant.
The Audit Committee’s prime tasks are to:
• review the scope of external audit, to receive regular reports from the
auditor and to review the half-yearly and annual accounts before they are
presented to the board, focusing in particular on accounting policies and
areas of management judgment and estimation;
• monitor the controls which are in force to ensure the integrity of the
information reported to the shareholders;
• assess key risks and to act as a forum for discussion of risk issues and
contribute to the board’s review of the effectiveness of the group’s risk
management control and processes;
• act as a forum for discussion of internal control issues and contribute to
the board’s review of the effectiveness of the group’s internal control
and risk management systems and processes;
• consider each year the need for an internal audit function;
• advise the board on the appointment of external auditors and rotation of
the audit partner every five years, and on their remuneration for both audit
and non-audit work, and discuss the nature and scope of their audit work;
• participate in the selection of a new external audit partner and agree the
appointment when required;
• undertake a formal assessment of the auditors’ independence each year
which includes:
~ a review of non-audit services provided to the group and related fees;
~ discussion with the auditors of a written report detailing all
relationships with the company and any other parties that could affect
independence or the perception of independence;
~ a review of the auditors’ own procedures for ensuring the
independence of the audit firm and partners and staff involved in the audit,
including the regular rotation of the audit partner; and
~ obtaining written confirmation from the auditors that, in their
professional judgement, they are independent.
Meetings
The committee meets prior to the annual audit with the external auditors to
discuss the audit plan and again prior to the publication of the annual
results. These meetings are attended by the external audit partner, managing
director, director of finance and company secretary. Prior to bi-monthly board
meetings the members of the committee meet on an informal basis to discuss any
relevant matters which may have arisen. Additional formal meetings are held as
necessary.
During the past year the committee:
• met with the external auditors, and discussed their report to the Audit
Committee;
• approved the publication of annual and half-year financial results;
• considered and approved the annual review of internal controls;
• decided that due to the size and nature of operation there was not a
current need for an internal audit function;
• agreed the independence of the auditors and approved their fees for both
audit and not-audit services as set out in note 4 to the financial statements.
FINANCIAL REPORTING
As part of its role, the Audit Committee assessed the audit findings that were
considered most significant to the financial statements, including those areas
requiring significant judgment and/or estimation. When assessing the
identified financial reporting matters, the committee assessed quantitative
materiality primarily by reference to the carrying value of the group’s
total assets, given that the group operates a principally asset based
business. The Board also gave consideration to the value of revenues generated
by the group, given the importance of production, and its Adjusted EBITDA,
given that it is a key trading KPI, when determining quantitative materiality.
The qualitative aspects of any financial reporting matters identified during
the audit process were also considered when assessing their materiality. Based
on the considerations set out above we have considered quantitative errors
individually or in aggregate in excess of approximately £325,000 to £375,000
to be material.
External Auditors
BDO LLP held office throughout the year. In the United Kingdom the company is
provided with extensive administration and accounting services by London &
Associated Properties PLC which has its own audit committee and employs a
separate firm of external auditors, RSM UK Audit LLP (Formerly Baker Tilly UK
Audit LLP). In South Africa Grant Thornton (Jhb) Inc. acts as the external
auditor to the South African companies, and the work of that firm was reviewed
by BDO LLP for the purpose of the group audit.
Christopher Joll
Chairman – audit committee
24 Bruton Place
London W1J 6NE
26 April 2017
Valuers’ certificates
To the directors of Bisichi Mining PLC
In accordance with your instructions we have carried out a valuation of the
freehold property interests held as at 31 December 2016 by the company as
detailed in our Valuation Report dated 31 December 2016.
Having regard to the foregoing, we are of the opinion that the open market
value as at 31 December 2016 of the interests owned by the company was
£13,245,000 being made up as follows:
£’000
Freehold 10,550
Leasehold 2,695
13,245
Leeds 31 December 2016 Carter Towler Regulated by Royal Institute of Chartered Surveyors
Directors’ responsibilities statement
The directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law the directors are required to prepare the group
financial statements in accordance with International Financial Reporting
Standards as adopted by the European Union and have elected to prepare the
company financial statements in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards and
applicable law). Under company law the directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and company and of the profit or
loss for the group for that period.
In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state with regard to the group financial statements whether they have been
prepared in accordance with IFRSs as adopted by the European Union subject to
any material departures disclosed and explained in the financial statements;
• 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; and
• prepare a director’s report, a strategic report and director’s
remuneration report which comply with the requirements of the Companies Act
2006.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the company’s transactions and disclose with
reasonable accuracy at any time the financial position of the company and
enable them to ensure that the financial statements comply with the Companies
Act 2006 and, as regards the group financial statements, Article 4 of the IAS
Regulation. They are also responsible for safeguarding the assets of the
company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities. The Directors are responsible for ensuring
that the annual report and accounts, taken as a whole, are fair, balanced, and
understandable and provides the information necessary for shareholders to
assess the group’s performance, business model and strategy.
Website publication
The directors are responsible for ensuring the annual report and the financial
statements are made available on a website. Financial statements are published
on the company’s website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of financial statements,
which may vary from legislation in other jurisdictions. The maintenance and
integrity of the company’s website is the responsibility of the directors.
The directors’ responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Directors’ responsibilities pursuant to DTR4
The directors confirm to the best of their knowledge:
• the group financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the European
Union and Article 4 of the IAS Regulation and give a true and fair view of the
assets, liabilities, financial position and profit and loss of the group.
• the annual report includes a fair review of the development and
performance of the business and the financial position of the group and the
parent company, together with a description or the principal risks and
uncertainties that they face.
Independent auditor’s report
To the members of Bisichi Mining PLC
We have audited the financial statements of Bisichi Mining PLC for the year
ended 31 December 2016 which comprise the consolidated income statement, the
consolidated statement of other comprehensive income, the consolidated balance
sheet, the consolidated statement of changes in shareholders’ equity, the
consolidated cash flow statement, the parent company balance sheet, the parent
company statement of changes in equity and the related notes. The financial
reporting framework that has been applied in the preparation of the group
financial statements is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
The financial reporting framework that has been applied in preparation of the
parent company financial statements is applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work
has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions we
have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors’ responsibilities, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view. Our responsibility is
to audit and express an opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Financial Reporting Council’s
(FRC’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on
the FRC’s website at www.frc.org.uk/auditscopeukprivate.
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 2016 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.
In our opinion, based on the work undertaken in the course of the audit;
• the information given in the strategic report and directors’ report for
the financial year ended 31 December 2016 for which the financial statements
are prepared is consistent with the financial statements; and
• the strategic report and directors’ report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent
company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors’
report.
Under the Companies Act 2006 we are required to report to you if, in our
opinion:
• adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not
visited by us; or
• the parent company financial statements and the part of the directors’
remuneration report to be audited are not in agreement with the accounting
records and returns; or
• certain disclosures of directors’ remuneration specified by law are not
made; or
• we have not received all the information and explanations we require for
our audit.
Ryan Ferguson
(senior statutory auditor)
For and on behalf of BDO LLP,
statutory auditor
London, United Kingdom
28 April 2017
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
Financial statements
Consolidated income statement
for the year ended 31 December 2016
Notes 2016 Trading £’000 2016 Revaluations and 2016 Total £’000 2015 Trading £’000 2015 Revaluations and impairment £’000 2015 Total £’000
impairment £’000
Group revenue 1 22,815 - 22,815 25,655 - 25,655
Operating costs 2 (21,299) - (21,299) (23,938) - (23,938)
Operating profit before depreciation, fair value adjustments and exchange movements 1,516 - 1,516 1,717 - 1,717
Depreciation 2 (1,785) - (1,785) (1,284) - (1,284)
Operating (loss)/profit before fair value adjustments and exchange movements 1 (269) - (269) 433 - 433
Exchange gains/(losses) 449 - 449 (497) - (497)
Increase in value of investment properties 3 - 445 445 - 225 225
Increase/(decrease) in value of other investments - 12 12 - (11) (11)
Operating profit/(loss) 1 180 457 637 (64) 214 150
Share of profit/(loss) in joint ventures 12 30 (37) (7) 104 (35) 69
Loss on reclassification of asset as held for sale 14 - - - - (138) (138)
Profit before interest and taxation 210 420 630 40 41 81
Interest receivable 270 - 270 245 - 245
Interest payable 6 (554) - (554) (473) - (473)
(Loss)/profit before tax 4 (74) 420 346 (188) 41 (147)
Taxation 7 150 (89) 61 (84) (24) (108)
Profit/(loss) for the year 76 331 407 (272) 17 (255)
Attributable to:
Equity holders of the company 148 331 479 (276) 17 (259)
Non-controlling interest 27 (72) - (72) 4 - 4
(Loss)/profit for the year 76 331 407 (272) 17 (255)
Profit/(loss) per share – basic 9 4.48p (2.43p)
Profit/(loss) per share – diluted 9 4.48p (2.43p)
Trading gains and losses reflect all the trading activity on mining and
property operations. Revaluation gains and losses reflects the revaluation of
investment properties and other assets within the group and any proportion of
these amounts within Joint Ventures, together with impairment loss on
reclassification of assets to held for sale. The total column represents the
consolidated income statement presented in accordance with IAS 1.
Consolidated statement of other comprehensive income
for the year ended 31 December 2016
2016 £’000 2015 £’000
Profit/(loss) for the year 407 (255)
Other comprehensive income/(expense):
Items that may be subsequently recycled to the income statement:
Exchange differences on translation of foreign operations 1,106 (1,167)
Gain/(loss) on available for sale investments 193 (202)
Taxation (13) 41
Other comprehensive income/(expense) for the year net of tax 1,286 (1,328)
Total comprehensive income/(expense) for the year net of
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