REG-Bisichi Mining PLC: Final Results <Origin Href="QuoteRef">BISI.L</Origin> - Part 5
22/04/2016 15:35
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Other receivables 490 419
Prepayments and accrued income 57 227
6,187 6,860
18. Available for sale investments
2015 2014
£'000 £'000
Market value of listed Investments:
Listed in Great Britain 568 758
Listed outside Great Britain 26 38
594 796
Original cost of listed investments 737 740
Unrealised deficit / surplus of market value versus (143) 56
cost
19. Trade and other payables
2015 2014
£'000 £'000
Trade payables 1,982 1,682
Amounts owed to joint ventures 223 305
Other payables 1,279 1,320
Accruals and deferred income 750 1,679
4,234 4,986
20. Financial liabilities - borrowings
Current Non-current
2015 2014 2015 2014
£'000 £'000 £'000 £'000
Bank overdraft (secured) 2,234 2,119 - -
Bank loan (secured) 33 20 5,940 6,013
2,267 2,139 5,940 6,013
2015 2014
£'000 £'000
Bank overdraft and loan instalments by reference to
the balance sheet date:
Within one year 2,267 2,139
From one to two years 27 21
From two to five years 5,913 5,992
8,207 8,152
Bank overdraft and loan analysis by origin:
United Kingdom 5,927 5,973
Southern Africa 2,280 2,179
8,207 8,152
The United Kingdom bank loans and overdraft are secured by way of a first
charge over the investment properties in the UK which are included in the
financial statements at a value of £12,800,000.
The South African bank loans are secured by way of a first charge over specific
pieces of mining equipment, inventory and the debtors of the relevant company
which holds the loan which are included in the financial statements at a value
of £4,830,291.
Consistent with others in the mining and property industry, the group monitors
its capital by its gearing levels. This is calculated as the net debt (loans
less cash and cash equivalents) as a percentage of equity. At year end the
gearing of the group was calculated as follows:
2015 2014
£'000 £'000
Total debt 8,207 8,152
Less cash and cash equivalents (1,608) (2,838)
Net debt 6,599 5,314
Total equity attributable to shareholders of 15,310 17,315
the parent
Gearing 43.1% 30.7%
21. Provision for rehabilitation
2015 2014
£'000 £'000
As at 1 January 930 874
Exchange adjustment (162) (31)
Unwinding of discount 79 87
As at 31 December 847 930
22. Financial instruments
Total financial assets and liabilities
The group's financial assets and liabilities are as follows, representing both
the fair value and the carrying value:
Loans and Financial Available for 2015 2014
receivables Liabilities sale £'000 £'000
£'000 measured at investments
amortised £'000
cost
£'000
Cash and cash equivalents 1,608 - - 1,608 2,838
Available for sale - - 594 594 796
investments
Other investments - - 14 14 152
Trade and other 6,954 - - 6,954 7,673
receivables
Bank borrowings and - (8,207) - (8,207) (8,152)
overdraft
Finance leases - (194) - (194) (195)
Other liabilities - (4,024) - (4,024) (4,836)
8,562 (12,425) 608 (3,255) (1,724)
Available for sale investments fall under level 1 of the fair value hierarchy
into which fair value measurements are recognised in accordance with the levels
set out in IFRS 7. Other investments are held at cost. The directors are of the
opinion that the difference in value between cost and fair value of other
investments is not significant or material. The comparative figures for 2014
fall under the same category of financial instrument as 2015.
Treasury policy
Although no derivative transactions were entered into during the current and
prior year, the group may use derivative transactions such as interest rate
swaps and forward exchange contracts as necessary in order to help manage the
financial risks arising from the group's activities. The main risks arising
from the group's financing structure are interest rate risk, liquidity risk,
market risk, credit risk, currency risk and commodity price risk. There have
been no changes during the year of the main risks arising from the group's
finance structure. The policies for managing each of these risks and the
principal effects of these policies on the results are summarised below.
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or
cashflows associated with the instrument will fluctuate due to changes in
market interest rates. Interest rate risk arises from interest bearing
financial assets and liabilities that the group uses. Treasury activities take
place under procedures and policies approved and monitored by the Board to
minimise the financial risk faced by the group. Interest bearing assets
comprise cash and cash equivalents which are considered to be short-term liquid
assets and loans to joint ventures. Interest bearing borrowings comprise bank
loans, bank overdrafts and variable rate finance lease obligations. The rates
of interest vary based on LIBOR in the UK and PRIME in South Africa.
As at 31 December 2015, with other variables unchanged, a 1% increase or
decrease in interest rates, on investments and borrowings whose interest rates
are not fixed, would respectively decrease or increase the loss for the year by
£67,000 (2014: £79,000). The effect on equity of this change would be an
equivalent decrease or increase for the year of £67,000 (2014: £79,000).
Liquidity risk
The group's policy is to minimise refinancing risk. Efficient treasury
management and strict credit control minimise the costs and risks associated
with this policy which ensures that funds are available to meet commitments as
they fall due. As at year end the group held borrowing facilities in the UK in
Bisichi Mining PLC and in South Africa in Black Wattle Colliery (Pty) Ltd.
The following table sets out the maturity profile of the financial liabilities
as at 31 December:
2015 2014
£'000 £'000
Within one year 6,692 7,400
From one to two years 213 223
From two to five years 6,464 6,539
Beyond five years 133 134
13,502 14,296
The following table sets out the maturity profile of the financial liabilities
as at 31 December maturing within one year:
2015 2014
£'000 £'000
Within one month 606 1,587
From one to three months 2,709 2,438
From four to twelve months 3,377 3,375
6,692 7,400
In South Africa, an increase in the structured trade finance facility from
R60million (South African Rand) to R80million was signed by Black Wattle
Colliery (Pty) Limited in October 2013 with Absa Bank Limited, a South African
subsidiary of Barclays Bank PLC. The facility is renewable annually at 30 June
and is secured against inventory, debtors and cash that are held by Black
Wattle Colliery (Pty) Limited.
This facility comprises of a R60million revolving loan to cover the working
capital requirements of the group's South African operations, and a R20million
loan facility to cover guarantee requirements related to the group's South
African mining operations. The interest cost of the loan is at the South
African prime lending rate.
In December 2014, the group signed a £6 million term loan facility with
Santander. The Loan is secured against the group's UK retail property
portfolio. The debt package has a five year term and is repayable at the end of
the term. The interest cost of the loan is 2.35% above LIBOR.
As a result of the above agreed banking facilities, the Directors believe that
the group is well placed to manage its liquidity risk.
Credit risk
The group is mainly exposed to credit risk on its cash and cash equivalents,
trade and other receivables and amounts owed by joint ventures as per the
balance sheet. The maximum exposure to credit risk is represented by the
carrying amount of each financial asset in the balance sheet which at year end
amounted to £8,562,000 (2014: £10,511,000). The group's credit risk is
primarily attributable to its trade receivables. The group had amounts due from
its significant revenue customers at the year end that represented 91% of the
trade receivables balance. These amounts have been subsequently settled.
Trade debtor's credit ratings are reviewed regularly. The group only deposits
surplus cash with well-established financial institutions of high quality
credit standing. As at year end the amount of trade receivables held past due
date was £144,000 (2014: £130,000). To date, the amount of trade receivables
held past due date that has not subsequently been settled is £136,000 (2014: £
85,000). Management have no reason to believe that this amount will not be
settled.
Financial assets maturity
On 31 December 2015, cash at bank and in hand amounted to £1,608,000 (2014: £
2,838,000) which is invested in short term bank deposits maturing within one
year bearing interest at the bank's variable rates. Cash and cash equivalents
all have a maturity of less than 3 months.
Commodity price risk
Commodity price risk is the risk that the group's future earnings will be
adversely impacted by changes in the market of commodities. The group is
exposed to commodity price risk as its future revenues will be derived based on
a contract with a physical off-take partner at prices that will be determined
by reference to market prices of coal at the delivery date.
From time to time the group may manage its exposure to commodity price risk by
entering into forward sales contracts with the goal of preserving future
revenue streams. The group has not entered any such contracts in 2015 and 2014.
Foreign exchange risk
All trading is undertaken in the local currencies. Funding is also in local
currencies other than inter-company investments and loans and it is not the
group's policy to obtain forward contracts to mitigate foreign exchange risk on
these amounts. During 2015 and 2014 the group did not hedge its exposure of
foreign investments held in foreign currencies.
The table below shows the currency profiles of cash and cash equivalents:
2015 2014
£'000 £'000
Sterling 1,135 1,697
South African Rand 470 1,138
US Dollar 3 3
1,608 2,838
Cash and cash equivalents earn interest at rates based on LIBOR in Sterling and
Prime in Rand.
The tables below shows the currency profiles of net monetary assets and
liabilities by functional currency of the group:
2015: Sterling South
£'000 African
Rands
£'000
Sterling (3,221) -
South African Rand 89 (136)
US Dollar 13 -
(3,119) (136)
2014: Sterling South
£'000 African
Rands
£'000
Sterling (2,515) -
South African Rand 153 618
US Dollar 20 -
(2,342) 618
The directors consider there to be no significant risk from exchange rate
movements of foreign currencies against the functional currencies of the
reporting companies within the group, excluding inter-company balances. As such
no sensitivity analysis is prepared.
23. Deferred taxation
2015 2014
£'000 £'000
Balance at 1 January 2,208 1,902
Recognised in income 128 329
Recognised in other comprehensive income (41) 15
Exchange adjustment (293) (38)
2,002 2,208
The deferred tax balance comprises the following:
Revaluation of properties 626 730
Capital allowances 1,487 1,418
Short-term differences (111) 60
2,002 2,208
24. Share capital
2015 2014
£'000 £'000
Authorised: 13,000,000 ordinary shares of 10p each 1,300 1,300
Allotted and fully paid:
2015 2014 2015 2014
Number of Number of £'000 £'000
ordinary ordinary
shares shares
At 1 January 10,676,839 10,636,839 1,068 1,064
Shares issued during the year in regard to employee - 40,000 - 4
share options exercised (note 26)
Outstanding at 31 December 10,676,839 10,676,839 1,068 1,068
25. Other reserves
2015 2014
£'000 £'000
Equity share options 488 566
Net premium on share capital in joint venture 86 86
574 652
26. Share based payments
Details of the share option scheme are shown in the Directors' remuneration
report on pages 28 and 29 under the heading Share option schemes which is
within the audited part of this report. Further details of the share option
schemes are set out below.
The Bisichi Mining PLC Unapproved Option Schemes:
Year of grant Subscription Period within Number of Number of Number of
price per which options share share options share
share exercisable for which issued/ for which
options (cancelled) options
outstanding during year outstanding
at at
31 December 31 December
2014 2015
2006 237.5p Oct 2009 - Oct 2016 325,000 - 325,000
2010 202.5p Aug 2013 - Aug 2020 80,000 - 80,000
2012 34.0p Oct 2012 - Sep 2022 193,000 (193,000) -
2015 87.0p Sep 2015 - Sep 2025 - 300,000 300,000
The exercise of options under the Unapproved Share Option Schemes, for certain
option issues, is subject to the satisfaction of objective performance
conditions specified by the remuneration committee, which will conform to
institutional shareholder guidelines and best practice provisions in force from
time to time. The performance conditions for the 2010 scheme, agreed by members
on 31 August 2010 respectively, requires growth in net assets over a three year
period to exceed the growth of the retail prices index by a scale of
percentages. There are no performance or service conditions attached to the
other schemes.
The 2015 options were valued at £118,000 at date of grant using the
Black-Scholes-Merton model with the following assumptions:
Expected volatility 36.30%
Expected life 4 years
Risk free rate 0.994%
Expected dividends 4.47%
Expected volatility was determined by reference to the historical volatility of
the share price over a period commensurate with the option's expected life. The
expected life used in the model is used on the risk-averse balance likely to be
required by the option holders.
2015 2015 2014 2014
Number Weighted Number Weighted
average average
exercise price exercise price
Outstanding at 1 January 598,000 167.1p 718,000 157.7p
Granted during the year 300,000 87.0p - -
Cancelled during the year (193,000) 34.0p (80,000) (149.0p)
Exercised during the year - 0.0p (40,000) (34.0p)
Outstanding at 31 December 705,000 133.1p 598,000 167.1p
Exercisable at 31 December 705,000 133.1p 598,000 167.1p
27. Non-controlling interest
2015 2014
£'000 £'000
As at 1 January 404 359
Share of profit for the year 4 100
Dividends received - (42)
Exchange adjustment (87) (13)
As at 31 December 321 404
The non-controlling interest comprises of a 37.5% shareholding in Black Wattle
Colliery (Pty) Ltd. A coal mining company incorporated in South Africa.
Summarised financial information reflecting 100% of the underlying subsidiary's
relevant figures, is set out below.
2015 2014
£'000 £'000
Revenue 24,608 25,536
Expenses (24,582) (24,866)
Profit for the year 26 670
Other comprehensive Income - -
Total comprehensive income for the year 26 670
Balance sheet
Non-current assets 5,355 6,030
Current assets 5,932 8,054
Current liabilities (7,156) (9,125)
Non-current liabilities (1,988) (2,260)
Net assets at 31 December 2,143 2,699
The non-controlling interest relates to the disposal of a 37.5% shareholding in
Black Wattle Colliery (Pty) Ltd in 2010. The total issued share capital in
Black Wattle Colliery (Pty) Ltd was increased from 136 shares to 1,000 shares
at par of R1 (South African Rand) through the following shares issue:
- a subscription for 489 ordinary shares at par by Bisichi Mining
(Exploration) Limited increasing the number of shares held from 136 ordinary
shares to a total of 675 ordinary shares;
- a subscription for 110 ordinary shares at par by Vunani Mining (Pty) Ltd;
- a subscription for 265 "A" shares at par by Vunani Mining (Pty) Ltd
Bisichi Mining (Exploration) Limited is a wholly owned subsidiary of Bisichi
Mining PLC incorporated in England and Wales.
Vunani Mining (Pty) Ltd is a South African Black Economic Empowerment company
and minority shareholder in Black Wattle Colliery (Pty) Ltd.
The "A" shares rank pari passu with the ordinary shares save that they will
have no dividend rights until such time as the dividends paid by Black Wattle
Colliery (Pty) Ltd on the ordinary shares subsequent to 30 October 2008 will
equate to R832,075,000.
A non-controlling interest of 15% in Black Wattle Colliery (Pty) Ltd is
recognised for all profits distributable to the 110 ordinary shares held by
Vunani Mining (Pty) Ltd from the date of issue of the shares (18 October 2010).
An additional non-controlling interest will be recognised for all profits
distributable to the 265 "A" shares held by Vunani Mining (Pty) Ltd after such
time as the profits available for distribution, in Black Wattle Colliery (Pty)
Ltd, before any payment of dividends after 30 October 2008, exceeds
R832,075,000.
28. Related party transactions
At 31 December During the year
Amounts Amounts Costs Cash paid
owed owed recharged (to)/by
to related by related (to)/by related
party party related party
£'000 £'000 party £'000
£'000
Related party:
London & Associated Properties PLC (note 59 - 138 (82)
(a))
Langney Shopping Centre Unit Trust (note - (64) - 104
(b))
Dragon Retail Properties Limited (note 223 (2,076) (180) 21
(c))
Ezimbokodweni Mining (Pty) Limited (note - (897) (94) -
(d))
As at 31 December 2015 282 (3,037) (136) 43
London & Associated Properties PLC (note 3 - 138 (135)
(a))
Langney Shopping Centre Unit Trust (note - (168) - 64
(b))
Dragon Retail Properties Limited (note 305 (2,000) (174) (726)
(c))
Ezimbokodweni Mining (Pty) Limited (note - (1,040) (92) -
(d))
As at 31 December 2014 308 (3,208) (128) (797)
London & Associated Properties PLC is a substantial shareholder. Dragon Retail
Properties Limited is a joint venture and is treated as a non-current asset
investment. On the 11 March 2016, the company disposed of its investment in
Langney Shopping Centre Unit Trust, a joint venture. The trust is therefore
held as a non-current asset held for sale. Ezimbokodweni Mining (Pty) Limited
is a joint venture and is treated as a non-current asset investment.
(a) London & Associated Properties PLC - Property management, office premises,
general management, accounting and administration services are provided for
Bisichi Mining PLC and its UK subsidiaries.
(b) Langney Shopping Centre Unit Trust - Langney Shopping Centre Unit Trust is
an unlisted property unit trust incorporated in Jersey.
(c) Dragon Retail Properties Limited - ("Dragon") is owned equally by the
company and London & Associated Properties PLC. During 2012 the company lent £
2million to Dragon at 6.875 per cent annual interest.
(d) Ezimbokodweni Mining (Pty) Limited - Ezimbokodweni Mining is a prospective
coal production company based in South Africa.
Details of key management personnel compensation and interest in share options
are shown in the Directors' Remuneration Report on pages 28 and 29 under the
headings Directors' remuneration, Pension schemes and incentives and Share
option schemes which is within the audited part of this report. The total
employers' national insurance paid in relation to the remuneration of key
management was £157,000 (2014: 114,000). In 2012 a loan was made to one of the
directors, Mr A R Heller, for £116,000. The loan amount outstanding at year end
was £86,000 (2014: £101,000) and a repayment of £15,000 (2014: £15,000) was
made during the year.
29. Employees
2015 2014
£'000 £'000
The average weekly numbers of employees of the group during the year
were as follows:
Production 191 213
Administration 17 18
208 231
£'000 £'000
Staff costs during the year were as follows:
Salaries 4,682 4,676
Social security costs 160 117
Pension costs 221 209
Share based payments 31 55
5,094 5,057
30. Capital commitments
2015 2014
£'000 £'000
Commitments for capital expenditure approved but not contracted for 306 389
at the year end
Share of commitment of capital expenditure in joint venture 1,102 1,402
31. Head lease commitments and future property lease rentals
Present value of head Leases on properties
Minimum lease Present value of
payments minimum lease
payments
2015 2014 2015 2014
£'000 £'000 £'000 £'000
Within one year 12 12 12 12
Second to fifth year 48 49 45 45
After five years 1,549 1,569 137 138
1,609 1,630 194 195
Discounting adjustment (1,415) (1,435) - -
Present value 194 195 194 195
Finance lease liabilities are in respect of leased investment property. Many of
the leases provide for contingent rents in addition to the rents above which
are a proportion of rental income. Finance lease liabilities are effectively
secured as the rights to the leased asset revert to the lessor in event of
default.
The group leases out its investment properties under operating leases. The
future aggregate minimum rentals receivable under non-cancellable operating
leases are as follows:
2015 2014
£'000 £'000
Within one year 923 746
Second to fifth year 2,699 2,399
After five years 9,786 9,868
13,408 13,013
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 secured
against the assets of the company and have been issued in respect of the
following:
2015 2014
£'000 £'000
Rail siding 47 158
Rehabilitation of mining land 1,009 1,114
Water & electricity 42 52
Company balance sheet
at 31 December 2015
Notes 2015 2014
£'000 £'000
Fixed assets
Tangible assets 35 20 34
Investment in joint ventures 36 1,810 1,810
Other investments 36 7,577 7,712
9,407 9,556
Current assets
Debtors - amounts due within one year 37 3,296 2,981
Debtors - amounts due in more than one year 37 659 1,127
Bank balances 1,031 988
4,986 5,096
Creditors - amounts falling due within one year 38 (1,301) (1,218)
Net current liabilities 3,685 3,878
Total assets less current liabilities 13,092 13,434
Creditors - amounts falling due in more than one year - 38 (9) (64)
term bank loan
Provision for liabilities and charges 39 (182) -
Net assets 12,901 13,370
Capital and reserves
Called up share capital 24 1,068 1,068
Share premium account 258 259
Other reserves 489 566
Retained earnings 33 11,086 11,477
Shareholders' funds 12,901 13,370
The company financial statements were approved and authorised for issue by the
board of directors on 18 April 2015 and signed on its behalf by:
A R Heller G J Casey Company
Registration No. 112155
Director Director
Company statement of
changes in equity
for the year ended 31 December 2015
Share Share Other Retained Shareholders
capital premium reserve earnings funds
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 2014 1,064 249 503 10,279 12,095
Dividend paid - - - (427) (427)
Share option charge 4 10 63 - 77
Profit and total comprehensive - - - 1,625 1,625
income for the year
Balance at 1 January 2015 1,068 259 566 11,477 13,370
Dividend paid - - - (427) (427)
Share option charge - (1) 32 - 31
Share option cancelled - - (109) - (109)
Profit and total comprehensive - - - 36 36
income for the year
Balance at 31 December 2015 1,068 258 489 11,086 12,901
Company accounting policies
for the year ended 31 December 2015
The following are the main accounting policies of the company:
Accounting convention: First time adoption of FRS 100 and 101
In the current year the company has adopted FRS 100 and FRS 101. In previous
years the financial statements were prepared under the historical cost
convention, as modified by the revaluation of investment properties, and in
accordance with applicable UK Generally Accepted Accounting Practice.
This change in the basis of preparation has materially altered the recognition
and measurement requirements applied in accordance with previously applicable
UK accounting standards. An explanation of the impact of adoption of FRS 100
and FRS 101 for the first time is included in note 41.
DISCLOSURE EXEMPTIONS ADOPTED
In preparing these financial statements the company has taken advantage of all
disclosure exemptions conferred by FRS 101. Therefore these financial
statements do not include:
• certain comparative information as otherwise required by EU endorsed
IFRS;
• certain disclosures regarding the company's capital;
• a statement of cash flows;
• the effect of future accounting standards not yet adopted;
• the disclosure of the remuneration of key management personnel; and
• disclosure of related party transactions with the company's wholly owned
subsidiaries
In addition, and in accordance with FRS 101, further disclosure exemptions have
been adopted because equivalent disclosures are included in the company's
Consolidated Financial Statements.
Dividends received
Dividends are credited to the profit and loss account when received.
Depreciation
Provision for depreciation on tangible fixed assets is made in equal annual
instalments to write each item off over its useful life. The rates generally
used are:
Motor vehicles 25 - 33 per cent
Office equipment 10 - 33 per cent
Foreign currencies
Monetary assets and liabilities expressed in foreign currencies have been
translated at the rates of exchange ruling at the balance sheet date. All
exchange differences are taken to the profit and loss account.
Investment properties
The investment property portfolio is included in the financial statements at
open market valuation. An external professional valuation is carried out
annually by professional external
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