Bisichi PLC Annual Report 2021
Contents
Principal activity, strategy & business model
STRATEGIC REPORT
2 Chairman’s Statement
4
5 Mining Review
7 Sustainable development
11 Principal risks & uncertainties
16 Financial & performance review
GOVERNANCE
23 Directors and advisors
24 Five year summary
24 Financial calendar
25 Directors’ report
31 Statement of the Chairman of the remuneration committee
32 Annual remuneration report
40 Audit committee report
42 Valuers’ certificates
43 Directors’ responsibilities statement
44 Independent auditor’s report
FINANCIAL STATEMENTS
54 Consolidated income statement
55 Consolidated statement of other comprehensive income
56 Consolidated balance sheet
58 Consolidated statement of changes in shareholders’ equity
59 Consolidated cash flow statement
60 Group accounting policies
68 Notes to the financial statements
94 Company balance sheet
95 Company statement of changes in equity
96 Company accounting policies
Strategic report
The Directors present the
Strategic Report of the company
for the year ending 31 December
2021. The aim of the Strategic
Report is to provide shareholders
with the ability to assess how the
Directors have performed their
duty to promote the success of
the company for the collective
benefit of shareholders.
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Strategic Report
Strategic Report
Chairman’s Statement
In the wake of the challenges arising from the Covid-19 pandemic, I am pleased to
report to shareholders that for the year ended 31 December 2021, your company
made a profit before interest, tax, depreciation and amortisation (EBITDA) of
£5.8million (2020: loss: £2.4 million) and an operating profit before depreciation,
fair value adjustments and exchange movements (Adjusted EBITDA) of £5.0million
(2020: loss: £1.1million). £4.3million in adjusted EBITDA is attributable to the
second half of the year.
As we reflect back on the last two years,
the most challenging priority for your
Company was the continuity of our
South African mining and processing
operations, particularly during the peak
of the Covid-19 pandemic. In early 2020,
when global coal demand fell, the
average weekly price of Free on Board
(FOB) coal from Richards Bay Coal
Terminal (API4 price) fell from a high
of US$92 in January 2020 to $44 in
mid-April 2020. Thereafter, prices
remained largely supressed until the end
of the year. Under these very difficult
circumstances, your management worked
tirelessly, along with our key stakeholders,
to ensure that our South African
operations continued operating in an
efficient manner until global economic
activity and our markets improved.
As 2021 unfolded, an improvement in
global economic activity had a significant
impact on demand for coal in the
international market, alleviating many
of the challenges our South African
operations faced in 2020. Strong demand
for coal in the seaborne market resulted
in significantly higher API4 prices,
particularly in the second half of the year
when the price peaked at over $245 in
October. Overall, the API4 price averaged
$125 in 2021 compared to $65 in 2020.
Despite constraints in transporting
coal for export on the South African rail
network, constraints which were largely
beyond our control, at Sisonke Coal
Processing (our South African coal
processing operation), we were able
to take advantage of the improved
international coal price by increasing our
export sales during the year to 320,000
metric tonnes (2020: 230,000 metric
tonnes). The overall increase in Group
revenue, operating costs and earnings
during the year is mainly attributable
to our coal processing operations.
The overall performance of our South
African operations would have been even
better if we had not encountered some
difficult mining conditions at Black Wattle,
our South African mining operation,
which impacted adversely our coal
production during the period. Overall,
the mine achieved production of
1.04million metric tonnes compared to
1.18million metric tonnes in 2020.
During the year we continued to work
closely with Vunani Mining, our BEE
partner in Black Wattle, to seek further
opportunities to extend the life of mine at
Black Wattle. At the end of last year,
Black Wattle signed an agreement to
acquire an additional coal reserve
contiguous to Black Wattle which
required further drilling to ascertain its
commercial viability and indicative size.
We are very pleased to report that the
recently concluded geological assessment
indicates an expected run of mine tonnage
of 6.1million metric tonnes. This reserve
will be mined by opencast methods, the
coal will be processed at Sisonke Coal
Processing, and then sold into our
existing markets. This new reserve, which
is subject to regulatory approval, will
extend Black Wattle’s life of mine to eight
years. Vunani Mining played a key role in
acquiring these reserves, and will share
equally in any distributable income as
part of their non-controlling interest in
Black Wattle. Further details of this
acquisition can be found in our Mining
and Financial and Performance Reviews.
Looking forward, we expect the Group’s
mining production to improve further
once we complete our transition into new
mining areas at Black Wattle in the first
half of 2022. In addition, we have seen
coal market conditions continue to
improve in 2022 to date. In the first
quarter of this year, the weekly API4 price
averaged $238 and exports from our
South African operations in the first
quarter of 2022 have been in line with the
average export tonnages we achieved in
2021. However, looking beyond the first
2 Bisichi PLC
Strategic Report
quarter, uncertainties remain, particularly
with regard to the international coal
price and the impact of constraints in
transporting coal for export on the South
African rail network.
In the UK, despite the Covid-19 pandemic,
we have seen rental revenue from our
retail property portfolio remain stable in
2021. Overall, the Group billed revenue
from our directly owned property portfolio
of £1.12million (2020: £1.18million) during
the year. The Group continues to hold its
joint venture investment, with London &
Associated Properties PLC and Metroprop
Real Estate Ltd, in the freehold of a retail
and residential redevelopment in West
Ealing, London. As previously announced,
planning permission for an expanded
residential redevelopment of 56 flats
on the site has been received. Planning
approval documents for the planning
consent are currently being finalised and
we look forward to updating shareholders
further on the situation in due course.
Finally, in light of the strong results
achieved for the year and in 2022 to
date, your directors believe the company
has the financial strength to recommence
distribution of dividends to shareholders.
For the year ended 31 December 2021
the directors recommend a dividend of
4p (2020: Nil) per share and a special
dividend of 2p (2020: Nil) per share. The
dividends will be payable on Friday 29
July 2022 to shareholders registered at
the close of business on 8 July 2022.
On behalf of the Board and shareholders,
I would like to thank all of our staff for
their hard work and dedication during
the course of a difficult year.
Sir Michael Heller
Chairman
13 April 2022
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Strategic Report
Principal activity, strategy
& business model
The company carries on business as a mining company and its principal activity is
coal mining in South Africa. The company’s strategy is to create and deliver long term
sustainable value to all our stakeholders through our business model which can be
broken down into three key areas:
1
2
3
Production &
sustainability
The Group strives to mine its
South African coal reserves in
an economical and sustainable
manner that delivers long term
value to all our stakeholders.
Processing &
marketing
The Group seeks to achieve
value from its South African coal
processing infrastructure through
the washing, transportation and
marketing of coal into both the
domestic and export markets.
Acquisition &
investment
The Group actively seeks new
opportunities to extend the life of its
existing mining and processing
operations in South Africa. The
Group aims to achieve this through
new commercial arrangements and
the acquisition of additional coal
reserves nearby to our existing
mining operations.
In addition, we seek to balance the
high risk of our mining operations
with a dependable cash flow from our
UK property investment operations
and listed equity investment
portfolios. The company primarily
invests in retail property across the
UK as well as residential property
development. The UK Retail property
portfolio is managed by London &
Associated Properties PLC whose
responsibility is to actively manage
the portfolio to improve rental income
and thus enhance the value of the
portfolio over time.
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Strategic Report
Mining review
We are pleased to report that, after a challenging 2020, higher prices for our coal have
accelerated the recovery of our South African operations in 2021. Although we continued
to manage the health and safety impact of the Covid-19 pandemic on the Group’s
mining and processing operations in South Africa, business conditions significantly
improved in 2021. Looking forward into 2022, to date we have continued to see higher
coal prices contributing strongly to the performance of our South African operations.
Covid-19 update
The Group continues to consult with the
government authorities and its
stakeholders in South Africa to ensure
appropriate measures are taken across its
South African mining and processing
operations. Such measures have been
primarily focussed on the health and
safety of our employees. Further details
on these measures can be found in our
Sustainability report on page 7.
Production and operations
Difficult mining conditions at Black Wattle,
our South African mining operation,
impacted production in 2021. Overall, the
mine achieved production of 1.04 million
metric tonnes compared to 1.18 million
metric tonnes in 2020. Looking forward,
the mine will be transitioning into new coal
reserves over the first half of 2022 where
mining conditions and production capacity
is expected to improve in comparison to
the reserves mined in 2021. Although
mining production may be impacted in the
first half of 2022, mining production is
expected to improve once this transition
to the new reserves is complete. Overall,
we expect the Group’s mining production
in 2022 to remain at similar levels to 2021.
As noted in the Chairman’s statement, we
are very pleased to report the acquisition
of 6.1 million metric tonnes of coal reserves
contiguous to Black Wattle. The new
reserve, which is currently subject to
regulatory approval, will extend the life of
mine of Black Wattle to eight years. The
acquisition was negotiated in conjunction
with a re-negotiation of 2.1million metric
tonnes of separate coal reserves previously
acquired from the same seller, as
announced in our 2018 annual report. In
addition to a nominal financial consideration,
an option for offtake of processed coal from
both reserves has been entered into with
the seller. We would like to thank Vunani
Mining, our Black Economic Empowered
shareholders at Black Wattle, for their
significant contribution in acquiring these
reserves. In light of their integral
involvement, it has been agreed that
Vunani Mining will share equally in any
distributable income from the coal
reserves as part of their non-controlling
interest in Black Wattle. This has been
achieved through the issue of new shares
in Black Wattle. Further details on the
share issue can be found in the Financial
and Performance Review on page 16.
Main trends/markets
Improvement in global economic activity
had a significant impact on demand and
prices achievable for our coal in 2021. In
the international market the average
weekly price of Free On Board (FOB) Coal
from Richard Bay Coal Terminal (API4
price) averaged $125 in 2021 compared
to $65 in 2020 when coal prices and
economic activity remained largely
supressed due to the Covid-19 pandemic.
The higher prices, along with a stable US
Dollar compared to the South African
Rand, resulted in the Group achieving an
overall average Rand price of R1,129 per
tonne of export coal sold from the mine in
2021 compared to R547 in 2020. The
Group’s export sales are via Richards Bay
Coal Terminal, primarily under the Quattro
programme which allows junior black-
economic empowerment coal producers
direct access to the coal export market via
the terminal. Although our export volumes
to Richards Bay were limited by industry
constraints in transporting coal for export
on the South African rail network, overall
exports volumes from our South African
operations increased during the year to
320,000 metric tonnes compared to
230,000 metric tonnes in 2020.
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Strategic Report Principal activity, strategy & business model
Prospects
Management would like to thank all our
employees and stakeholders in helping
overcome many of the unprecedented
challenges presented by the Covid-19
pandemic over the last two years. Going
forward, I am confident that 2022 should
be another successful year for our South
African operations.
Andrew Heller
Managing Director
13 April 2022
Sustainable development
The Group’s South African operations
continue to strive to conduct business in a
safe, environmentally and socially
responsible manner. Some highlights of
our Health, Safety and Environment
performance in 2021:
•
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The Group’s South African operations
recorded two Lost time Injuries during
2021 (2020: One).
No cases of Occupational Diseases
were recorded.
Zero claims for the Compensation for
Occupational Diseases were submitted.
•
•
•
•
In South Africa, the new government
regulated Broad-Based Socio-Economic
Empowerment Charter for the Mining and
Minerals Industry, 2020 (New Mining
Charter) came into force from March
2020. The New Mining Charter is a
regulatory instrument that facilitates
sustainable transformation, growth and
development of the mining industry. The
Group is committed to fully complying
with the New Mining Charter and
providing adequate resources to this area
in order to ensure opportunities are
expanded for historically disadvantaged
South Africans (HDSAs) to enter the
mining and minerals industry. In addition,
we continue to adhere and make progress
in terms of our Social and Labour Plan
and our various BEE initiatives. A fuller
explanation of these can be found in our
Sustainable Development Report on page
7.
These export constraints, arising from the
problems of the rail network, contributed
to a stable supply of coal to the South
African domestic market in 2021. As a
result, domestic coal prices in 2021
remained largely unchanged by
comparison with the 2020 prices; the
Group achieved an average domestic
price of R470 per tonne coal sold
compared to R450 in 2020. Overall,
domestic sales volumes from our South
African operations increased during the
year to 1.13million metric tonnes (2020:
0.97million metric tonnes).
Overall, the Group achieved an average
Rand price per tonne of coal sold of R616
compared to R469 in 2020. In addition to
the higher coal prices, higher overall sales
volumes and a reduction in stocks
contributed to the increase in Sterling
Group revenue during the year.
Looking forward into 2022, in the first
quarter we have seen the API4 price
average $238 and exports from our South
African operations to date have been in
line with the average export tonnages we
achieved in 2021. However, looking
beyond the first quarter, uncertainties
remain. These are particularly with regard
to the sustainability of the higher
international coal price as well as the
impact of continued constraints in
transporting coal for export on the South
African rail network.
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Strategic Report
Sustainable development
The Group is fully committed to ensuring the sustainability of both our UK and
South African operations and delivering long term value to all our stakeholders.
Social, community and
human rights issues
The Group believes that it is in the
shareholders’ interests to consider social
and human rights issues when
conducting business activities both in the
UK and South Africa. Various policies and
initiatives implemented by the Group that
fall within these areas are discussed
within this report.
Health, Safety &
Environment (HSE)
The Group is committed to creating a
safe and healthy working environment for
its employees and the health and safety
of our employees is of the utmost
importance.
HSE performance in 2021:
•
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•
•
•
•
•
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No cases of Occupational Diseases
were recorded.
Zero claims for the Compensation for
Occupational Diseases were submitted.
No machines operating at Black Wattle
exceeded the regulatory noise level.
The Group’s South African operations
recorded two Lost time Injuries during
2021.
In addition to the required personnel
appointments and assignment of direct
health and safety responsibilities on the
mine, a system of Hazard Identification
and Risk Assessments has been
designed, implemented and maintained
at Black Wattle and at Sisonke Coal
Processing.
Health and Safety training is conducted
on an ongoing basis. We are pleased to
report all relevant employees to date have
received training in hazard identification
and risk assessment in their work areas.
A medical surveillance system is also in
place which provides management with
information used in determining measures
to eliminate, control and minimise
employee health risks and hazards and all
Occupational Health hazards are
monitored on an ongoing basis.
Various systems to enhance the current
HSE strategy have been introduced as
follows:
•
•
In order to improve hazard identification
before the commencing of tasks, mini
risk assessment booklets have been
distributed to all mine employees and
long term contractors on the mine.
Dover testing is conducted for all
operators. Dover testing is a risk
detection and accident reduction tool
which identifies employees’ problematic
areas in their fundamental skills in
order to receive appropriate training.
A Job Safety Analysis form is utilised to
ensure effective identification of
hazards in the workplace.
In order to capture and record
investigation findings from incidents, an
incident recording sheet is utilised by
line management and contractors.
Black Wattle Colliery utilises ICAM
(Incident Cause Analysis Method).
On-going training on first aid is being
conducted with all employees involved
with this discipline.
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Covid-19 measures in 2021:
The Group continues to monitor and
adhere to all of the South African
government’s Covid-19 related guidelines
and regulations including all updates and
advice from the National Department of
Health, the Department of Minerals
Resources and Energy and the Office of
the President. These measures include:
•
•
Regular communications with
employees on all guidelines,
government restrictions and best
practice hygiene and health
recommendations;
Conducting various issue-based hazard
identification and risk assessments;
Temperature screening of those
entering certain of our offices and sites;
Working from home (in both the UK and
South Africa), where possible or
required;
Social distancing measures at
operating sites;
Restrictions on non-essential visits
to operating sites; and
Intensified cleaning and hygiene at
offices and sites.
•
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•
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Strategic Report Sustainable development
In particular the Group has endeavoured
to follow the guidelines of the 10-point
plan developed by the Department of
Minerals Resources and Energy in line
with the guidelines of the Department of
Health and the National Institute of
Communicable Diseases (NICD) as
follows:
•
•
Educate employees on the virus,
symptoms and prevention.
Follow guidelines from the NICD,
educate health workers on how to
manage Covid-19. Consider alternate
arrangements for supply of chronic
medication to reduce crowds.
Ensure that all health workers have
access to protective clothing, gloves,
masks, cleaning materials and
pharmaceutical agents.
Vaccinate employees for seasonal
influenza.
All employees are encouraged to know
their status, get onto ARVs if positive
for HIV.
Manage suspected cases or contacts
of cases using guidelines from the
NICD.
Liaise with the NICD on procedure to
be followed for suspected and
confirmed cases.
Only essential travel to areas with
Covid-19 should be undertaken.
All suspected and confirmed cases in
the mining industry should be reported
to the NICD.
Monitor and stay aware of the latest
information on the Covid-19 pandemic.
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8 Bisichi PLC
Black Wattle Colliery Social
and Labour Plan (SLP) and
Community Projects
Black Wattle Colliery is committed to true
transformation and empowerment as well
as poverty eradication within the
surrounding and labour providing
communities.
Black Wattle is committed to providing
opportunities for the sustainable socio-
economic development of its
stakeholders, such as:
•
•
Employees and their families, through
Skills Development, Education
Development, Human Resource
Development, Empowerment and
Progression Programmes.
Surrounding and labour sending
communities, through Local Economic
Development, Rural and Community
Development, Enterprise Development
and Procurement Programmes.
Empowering partners, through Broad-
Based Black Economic Empowerment
(BBBEE) and Joint Ventures with
Historically Disadvantaged South
African (HDSA) new mining entrants
and enterprises.
The company engages in on going
consultation with its stakeholders to
develop strong company-employee
relationships, strong company-
community relationships and strong
company-HDSA enterprise
relationships.
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•
•
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The key focus areas in terms of the
detailed SLP programmes were updated
as follows:
•
•
Implementation of new action plans,
projects, targets and budgets were
established through regular workshops
with all stakeholders.
•
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•
•
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A comprehensive desktop socio-
economic assessment was undertaken
on baseline data of the Steve Tshwete
Local Municipality (STLM) and
Nkangala District Municipality (NDM).
The STLM is still in the process of
finalising its 2022-2027 Local
Economic Development (LED) Plan.
Once finalised, Black Wattle Colliery
will select projects from the 2022-2027
STLM LED plan for the inclusion in its
2022-2027 SLP. The Black Wattle
Colliery SLP will thereafter be
submitted to the department of Mineral
Resources and Energy for approval.
The building of the new school hall at
the Phumelele Secondary School in the
Rockdale Township will be completed
during the second quarter of 2022.
Various upgrades were initiated at the
Evergreen School nearby to Black Wattle.
Black Wattle has implemented various
community initiatives including:
•
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A community training environmental
project, where local community
members are trained to safely cut and
remove non-indigenous vegetation, the
making, bagging and sales of charcoal.
Certain community members have
been identified for training in areas
regarding mining and beneficiation.
These areas include but are not limited
to conveyor maintenance, operation of
mining machinery and training in
environmental waste management.
An interlocking block manufacturing
operation will be started during 2022,
making interlocking blocks for building
homes
Two HDSA females completed their
University studies in the 2021 academic
year.
Two local community HDSA members
were enrolled for the new academic year.
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Strategic Report Sustainable development
Environment & Environment
Management Programme
South Africa
Under the terms of the mine’s
Environmental Management Programme
approved by the Department of Mineral
Resource and Energy (“DMRE”), Black
Wattle undertakes a host of environmental
protection activities to ensure that the
approved Environmental Management Plan
is fully implemented. In addition to these
routine activities, Black Wattle regularly
carries out environmental monitoring
activities on and around the mine, including
evaluation of ground water quality, air
quality, noise and lighting levels, ground
vibrations, air blast monitoring, and
assessment of visual impacts. In addition to
this Black Wattle also performs quarterly
monitoring of all boreholes around the mine
to ensure that no contaminated water filters
through to the surrounding communities.
Black Wattle is fully compliant with the
regulatory requirements of the
Department of Water Affairs and Forestry
and has an approved water use licence.
Black Wattle Colliery has substantially
improved its water management by
erecting and upgrading all its pollution
control dams in consultation with the
Department of Water Affairs and Forestry.
A performance assessment audit was
conducted to verify compliance to our
Environmental Management Programme
and no significant deviations were found.
United Kingdom
The Group’s UK activities are principally
retail property investment as well as
residential property development whereby
we provide or develop premises which are
rented to retail businesses or sold on to end
users. We seek to provide tenants and
users in both these areas with good quality
premises from which they can operate or
reside in an environmentally sound manner.
Procurement
In compliance with the Mining Charter
and the Mineral and Petroleum Resource
Development Act, the Group’s South
African operations has implemented a
BBBEE-focussed procurement policy
which strongly encourages our suppliers
to establish and maintain BBBEE
credentials. At present, BBBEE
companies provide approximately 90
percent of Black Wattle’s equipment and
services.
Mining Charter
In South Africa, the new government
regulated Broad-Based Socio-Economic
Empowerment Charter for the Mining and
Minerals Industry, 2020 (New Mining
Charter) came into force from March
2020. The New Mining Charter is a
regulatory instrument that facilitates
sustainable transformation, growth and
development of the mining industry. The
Group’s mining operation is expected to
reach various levels of compliance to the
New Mining Charter over a period of five
years from March 2020. The Group is
committed to providing adequate
resources to this area in order to ensure
full compliance to the New Mining Charter
is achieved over the transitional period.
As part of Black Wattle’s commitment to
the New Mining Charter, the company
seeks to:
•
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•
•
•
•
Expand opportunities for historically
disadvantaged South Africans
(HDSAs), including women and youth,
to enter the mining and minerals
industry and benefit from the extraction
and processing of the country’s
resources;
Utilise the existing skills base for the
empowerment of HDSAs; and
Expand the skills base of HDSAs in
order to serve the community.
Employment
The Group’s South African operations are
committed to achieving the goals of the
South African Employment Equity Act
and is pleased to report the following:
•
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•
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•
Black Wattle Colliery has exceeded the
10 percent women in management and
core mining target.
Black Wattle Colliery has achieved over
15 percent women in core mining.
94 percent of the women at Black
Wattle Colliery are HDSA females.
Black Wattle Colliery has successfully
submitted their annual Employment
Equity Report to the Department of
Labour.
In terms of staff training some highlights
for 2021 were:
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•
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12 employees were trained in ABET
(Adult Basic Educational Training) on
various levels;
An additional 9 disabled HDSA women
continued their training on ABET levels
one to four.
We are pleased to confirm that 1 HDSA
male completed his apprenticeships in
2021.
Further to the above we confirm that 1
HDSA female was allocated a Bursary
for the 2021 period whilst 2 HDSA
males and 2 HDSA females continued
their Bursaries.
Highlights for 2021 for Sisonke Coal
Processing:
•
•
5 employees were trained in ABET
(Adult Basic Educational Training) on
various levels
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Strategic Report Sustainable development
Employment terms and conditions for our
employees based at our UK office and at
our South African mining operations are
regulated by and are operated in
compliance with all relevant prevailing
national and local legislation. Employment
terms and conditions provided to mining
staff meet or exceed the national
average. The Group’s mining operations
and coal washing plant facility are labour
intensive and unionised. During the year
no labour disputes, strikes or wage
negotiations disrupted production or had
a significant impact on earnings. The
Group’s relations to date with labour
representatives and labour related unions
continue to remain strong.
In terms of directors, employees and
gender representation, at the year end
the Group had 9 directors (8 male, 1
female), 6 senior managers (5 male, 1
female) and 229 employees (160 male,
69 female).
Anti-slavery and human
trafficking
The Group is committed to the prevention
of the use of forced labour and has a zero
tolerance policy for human trafficking and
slavery. The Group’s policies and
initiatives in this area can be found within
the Group’s Anti-slavery and human
trafficking statement found on the
Group’s website at www.bisichi.co.uk.
Our reporting includes our energy use
and emissions associated with our UK
office, which are minimal (2 tonnes of
CO2e). The IPCC methodology *Tier 1 (+2)
Methodology (2006 with 2019 edits) -
Low, Average, and High CH4 Emission
Factors – Medium Scenario) was used to
calculate emissions from surface coal
mining activities. The Group has not
implemented any energy efficiency
programs or specific measures during the
2021 year.
Green House Gas reporting
We have reported on all of the emission
sources required under the Companies
Act 2006 (Strategic Report and Directors’
Reports) Regulations.
The data detailed in these tables
represent emissions and energy use for
which the Group is responsible. To
calculate our emissions, we have used the
main requirements of the Greenhouse
Gas Protocol Corporate Standard and a
methodology adapted from the
Intergovernmental Panel on Climate
Change (2019), along with the UK
Government GHG Conversion Factors for
Company Reporting 2021. Any estimates
included in our totals are derived from
actual data which have been extrapolated
to cover the full reporting periods.
The group’s carbon footprint:
Emissions source:
Emissions from the combustion of fuel or the operation of
any facility including fugitive emis-sions from refrigerants
use
2021
CO2e
Tonnes
2020
CO2e
Tonnes
41,960
46,162
Emissions resulting from the purchase of electricity, heat, steam
or cooling by the company for its own use (location based)
12,040
12,482
Total gross emissions
Intensity:
Tonnes of CO2 per £ sterling of revenue
Tonnes of CO2 per tonne of coal produced
54,000
58,644
0.0011
0.0020
0.0516
0.0497
kWh
kWh
Energy consumption used to calculate above emissions
83,079,614 99,450,585
Of which UK
10,186
5,571
10 Bisichi PLC
Strategic Report
Principal risks & uncertainties
PRINCIPAL RISK
PERFORMANCE AND MANAGEMENT OF THE RISK
COAL PRICE AND VOLUME RISK COVID-19 RISK
The Group is exposed to coal price risk as its future revenues
will be derived based on contracts or agreements with physical
off-take partners at prices that will be determined by reference
to market prices of coal at delivery date.
The Group’s South African mining and coal processing
operational earnings are significantly dependent on
movements in both the export and domestic coal price.
The price of export sales is derived from a US Dollar-
denominated export coal price and therefore the price
achievable in South African Rands can be influenced by
movements in exchange rates and overall global demand and
supply. The volume of export sales achievable can be
influenced by rail capacity and export quota constraints at
Richards Bay Coal Terminal under the Quattro programme.
The domestic market coal prices are denominated in South
African Rand and are primarily dependant on local demand
and supply.
In the short term, the Covid-19 pandemic and geo-political
events in Ukraine may result in additional price volatility in both
the export and domestic market due to fluctuations in both
demand and supply.
Longer term both the demand and supply of coal in the
domestic and global market may be negatively impacted by
regulatory changes related to climate change and
governmental CO2 emission commitments.
The Group primarily focuses on managing its underlying
production and processing costs to mitigate coal price volatility
as well as from time to time entering into forward sales contracts
with the goal of preserving future revenue streams. The Group
has not entered into any such contracts in 2020 and 2021.
The Group’s export and domestic sales are determined based on
the ability to deliver the quality of coal required by each market
together with the market factors set out opposite. Volumes of
export sales achieved during the year were primarily dependent
on the Group’s ability to produce the higher quality of coal
required for export, obtaining adequate rail capacity and utilising
allowable export quotas under the Quattro programme. The
volume of domestic market sales achieved during the year were
primarily dependant on local demand and supply as well as the
Group’s ability to produce the overall quality of coal required. The
Group continues to assess on an ongoing basis its dependence
on the above factors and evaluate alternative means to ensure
coal sales and prices achieved are optimised.
The Group assesses on an ongoing basis the impact that
Covid-19, geo-political events in Ukraine, regulatory changes
related to climate change and governmental CO2 emission
commitments may have on the Group’s mining operations and
future investment decisions.
Bisichi PLC
1111
Strategic Report Principal risks & uncertainties
PRINCIPAL RISK
MINING RISK
As with many mining operations, the reserve that is mined has
the risk of not having the qualities and accessibility expected
from geological and environmental analysis. This can have a
negative impact on revenue and earnings as the quality and
quantity of coal mined and sold by our mining operations may
be lower than expected.
CURRENCY RISK
The Group’s operations are sensitive to currency movements,
especially those between the South African Rand, US Dollar
and British Pound. These movements can have a negative
impact on the Group’s mining operations revenue as noted
above, as well as operational earnings.
The Group is exposed to currency risk in regard to the Sterling
value of inter-company trading balances with its South African
operations. It arises as a result of the retranslation of Rand
denominated inter-company trade receivable balances into
Sterling that are held within the UK and which are payable by
South African Rand functional currency subsidiaries.
The Group is exposed to currency risk in regard to the
retranslation of the Group’s South African functional currency
net assets to the Sterling reporting functional currency of the
Group. A weakening of the South African Rand against Sterling
can have a negative impact on the financial position and net
asset values reported by the Group.
PERFORMANCE AND MANAGEMENT OF THE RISK
This risk is managed by engaging independent geological
experts, referred to in the industry as the “Competent Person”, to
determine the estimated reserves and their technical and
commercial feasibility for extraction. In addition, management
engage Competent Persons to assist management in the
production of detailed life of mine plans as well as in the
monitoring of actual mining results versus expected performance
and management’s response to variances. The Group continued
to engage an independent Competent Person in the current year.
Refer to page 5 for details of mining performance.
Export sales within the Group’s South African operations are
derived from a US Dollar-denominated export coal price. A
weakening of the US Dollar can have a negative impact on the
South African Rand prices achievable for coal sold by the
Group’s South African mining operations. This in turn can have a
negative impact on the Group’s mining operations revenue as
well as operational earnings as the Group’s mining operating
costs are Rand denominated. In order to mitigate this, the Group
may enter into forward sales contracts in local currencies with
the goal of preserving future revenue streams. The Group has
not entered into any such contracts in 2021 and 2020.
Although it is not the Group’s policy to obtain forward contracts
to mitigate foreign exchange risk on inter-company trading
balances or on the retranslation of the Group’s South African
functional currency net assets, management regularly review the
requirement to do so in light of any increased risk of future
volatility.
Refer to the ‘Financial Review’ for details of significant currency
movement impacts in the year.
12 Bisichi PLC
Strategic Report Principal risks & uncertainties
PRINCIPAL RISK
PERFORMANCE AND MANAGEMENT OF THE RISK
NEW RESERVES AND MINING PERMISSIONS
The life of the mine, acquisition of additional reserves,
permissions to mine (including ongoing and once-off
permissions) and new mining opportunities in South Africa
generally are contingent on a number of factors outside of the
Group’s control such as approval by the Department of Mineral
Resources and Energy, the Department of Water Affairs and
Forestry and other regulatory or state owned entities.
In addition, the Group’s South African operations are subject to
the government Mining Charter with the New Mining Charter
coming into force from March 2020. Failure to meet existing
targets or further regulatory changes to the Mining Charter,
could adversely affect the mine’s ability to retain its mining
rights in South Africa.
The work performed in the acquisition and renewal of mining
permits as well as the maintenance of compliance with permits
includes factors such as environmental management, health and
safety, labour laws and Black Empowerment legislation (such as
the New Mining Charter); as failure to maintain appropriate
controls and compliance may in turn result in the withdrawal of
the necessary permissions to mine. The management of these
regulatory risks and performance in the year is noted in the
Mining Review on page 5 as well as in the Sustainable
Development report on page 7 and in this section under the
headings environmental risk, health & safety risk and labour risk.
Additionally, in order to mitigate this risk, the Group strives to
provide adequate resources to this area including the
employment of adequate personnel and the utilisation of third
party consultants competent in regulatory compliance related to
mining rights and mining permissions.
The Group also continues to actively seek new opportunities to
expand its mining operations in South Africa through the
acquisition of additional coal reserves and new commercial
arrangements with existing mining right holders.
POWER SUPPLY RISK
The current utility provider for power supply in South Africa
is the government run Eskom. Eskom continues to undergo
capacity problems resulting in power cuts and lack of provision
of power supply to new projects. Any power cuts or lack of
provision of power supply to the Group’s mining operations may
disrupt mining production and impact on earnings.
The Group’s mining operations have to date not been affected by
power cuts. However the Group manages this risk through
regular monitoring of Eskom’s performance and ongoing ability to
meet power requirements. In addition, the Group continues to
assess the ability to utilise diesel generators as an alternative
means of securing power in the event of power outages.
FLOODING RISK
The Group’s mining operations are susceptible to seasonal
flooding which could disrupt mining production and impact on
earnings.
Management monitors water levels on an ongoing basis and
various projects have been completed, including the
construction of additional dams, to minimise the impact of this
risk as far as possible.
Bisichi PLC
1313
Strategic Report Principal risks & uncertainties
PRINCIPAL RISK
PERFORMANCE AND MANAGEMENT OF THE RISK
ENVIRONMENTAL RISK
The Group’s South African mining operations are required to
adhere to local environmental regulations. Any failure to adhere
to local environmental regulations, could adversely affect the
mine’s ability to mine under its mining right in South Africa.
HEALTH & SAFETY RISK
Attached to mining there are inherent health and safety risks.
Any such safety incidents disrupt operations, and can slow or
even stop production. In addition, the Group’s South African
mining operations are required to adhere to local Health and
Safety regulations as well as enhanced health and Safety
measures related to Covid-19.
LABOUR RISK
The Group’s mining operations and coal washing plant facility
are labour intensive and unionised. Any labour disputes,
strikes or wage negotiations may disrupt production and
impact earnings.
In line with all South African mining companies, the management
of this risk is based on compliance with the Environment
Management Plan. In order to ensure compliance, the Group
strives to provide adequate resources to this area including the
employment of personnel and the utilisation of third party
consultants competent in regulatory compliance related to
environmental management.
To date, Black Wattle is fully compliant with the regulatory
requirements of the Department of Water Affairs and Forestry
and has an approved water use licence. Further details of the
Group’s Environment Management Programme are disclosed in
the Sustainable development report on page 7.
The Group has a comprehensive Health and Safety programme
in place to mitigate this risk. Management strive to create an
environment where Health and safety of our employees is of the
utmost importance. Our Health & Safety programme provides
clear guidance on the standards our mining operation is
expected to achieve. In addition, management receive regular
updates on how our mining operations are performing. Further
details of the Group’s Health and Safety Programme are
disclosed in the Sustainable Development report on page 7.
In order to mitigate this risk, the Group strives to ensure open
and transparent dialogue with employees across all levels. In
addition, appropriate channels of communication are provided to
all employment unions at Black Wattle to ensure effective and
early engagement on employment matters, in particular wage
negotiations and disputes.
Refer to the ‘Employment’ section on page 9 for further details.
14 Bisichi PLC
Strategic Report Principal risks & uncertainties
PRINCIPAL RISK
CASHFLOW RISK
Commodity price risk, currency volatility and the uncertainties
inherent in mining may result in favourable or unfavourable
cashflows.
PERFORMANCE AND MANAGEMENT OF THE RISK
In order to mitigate this, we seek to balance the high risk of our
mining operations with a dependable cash flow from our UK
property investment operations which are actively managed by
London & Associated Properties PLC and our equity investment
portfolio. Due to the long term nature of the leases, the effect on
cash flows from property investment activities are expected to
remain stable as long as tenants remain in operation. Refer to
Financial and Performance review on page 20 for details of the
property and investment portfolio performance.
PROPERTY VALUATION RISK
Fluctuations in property values, which are reflected in the
Consolidated Income Statement and Balance Sheet, are
dependent on an annual valuation of the Group’s commercial
and residential development properties. A fall in UK commercial
and residential property can have a marked effect on the
profitability and the net asset value of the Group as well as
impact on covenants and other loan agreement obligations.
The Group utilises the services of London & Associated Properties
PLC whose responsibility is to actively manage the portfolio to
improve rental income and thus enhance the value of the portfolio
over time. In addition, management regularly monitor banking
covenants and other loan agreement obligations as well as the
performance of our property assets in relation to the overall
market over time.
The economic performance of the United Kingdom, including
the potential final impact of the United Kingdom leaving the
European Union (“Brexit”), the final impact of Covid-19
pandemic, an impact from geo-political events in Ukraine as
well as the current overall economic performance and trends of
the UK retail market, may impact the level of rental income,
yields and associated property valuations of the Group’s UK
property assets including its investments in Joint Ventures.
Management continues to monitor and evaluate the impact of
Brexit, the Covid-19 pandemic, geo-political events in Ukraine and
the current economic performance of the UK retail market on the
future performance of the Group’s existing UK portfolio. In
addition, the Group assesses on an ongoing basis the
performance of the UK retail market on the Group’s banking
covenants, loan obligations and future investment decisions.
Refer to page 20 for details of the property portfolio performance.
COVID-19 RISK
The Group is continually assessing and managing any potential
further risks brought about by the Covid-19 pandemic. Overall,
the Group is primarily exposed to impacts on the health and
safety of its employees and stakeholders. In the UK,
uncertainties remain on the final impact on retail property
revenue and values from the Covid-19 pandemic as outlined
under property valuation risk above. In South Africa, the Group
may be impacted by additional health and safety measures
related to its workforce and coal price risk as outlined under
the same heading above.
Risks faced by the business are assessed by the Board on an
ongoing basis.
Strategies for mitigating the risks have been defined and specific
measures for achieving these have already been implemented.
These include the measures outlined in the Sustainability
development section of this report.
The final impact of the Covid-19 pandemic remains uncertain and
the Group will adapt plans accordingly as any new information
becomes available or government advice changes.
Bisichi PLC
1515
Strategic Report
Financial & performance review
The movement in the Group’s Adjusted EBITDA from a loss of £1.1million in 2020 to
a profit of £5.0million in 2021 can mainly be attributed to higher prices achievable for
our coal and higher coal sale volumes from the Group’s South African operations in
the second half of the year. This offset the higher operating costs achieved in 2021.
EBITDA, adjusted EBITDA and mining
production are used as key performance
indicators for the Group and its mining
activities as the Group has a strategic focus
on the long term development of its existing
mining reserves and the acquisition of
additional mining reserves in order to realise
shareholder value. Mining production can
be defined as the coal quantity in metric
tonnes extracted from our reserves during
the period and held by the mine before any
processing through the washing plant.
Whilst profit/(loss) before tax is considered
as one of the key overall performance
indicators of the Group, the profitability of
the Group and the Group’s mining activities
can be impacted by the volatile and capital
intensive nature of the mining sector.
Accordingly, EBITDA and adjusted EBITDA
are primarily used as key performance
indicators as they are indicative of the value
associated with the Group’s mining assets
expected to be realised over the long term
life of the Group’s mining reserves. In
addition, for the Group’s property
investment operations, the net property
valuation and net property revenue are
utilised as key performance indicators as
the Group’s substantial property portfolio
reduces the risk profile for shareholders by
providing stable cash generative UK assets
and access to capital appreciation. Certain
key performance indicators below are not
Generally Accepted Accounting Practice
measures and are not intended as a
substitute for those measures, and may or
may not be the same as those used by
other companies.
Key performance indicators
The key performance indicators for the group are:
For the group:
Operating profit /(loss) before depreciation, fair value adjustments and exchange movements (adjusted EBITDA)
EBITDA
Profit/(Loss) before tax
For our property investment operations:
Net property valuation
Net property revenue
For our mining activities:
Operating profit/(loss) before depreciation, fair value adjustments and exchange movements (adjusted EBITDA)
EBITDA
Mining production
Quantity of coal sold
16 Bisichi PLC
2021
£’000
2020
£’000
5,028
5,849
2,501
(1,111)
(2,387)
(5,196)
10,525
10,270
1,119
1,181
4,266
4,145
Tonnes
’000
1,046
1,447
(1,821)
(1,782)
Tonnes
’000
1,180
1,199
Strategic Report Financial & performance review
The key performance indicators of the group
can be reconciled as follows:
Revenue
Transport and loading cost
Mining and washing costs
Other operating costs excluding depreciation
Operating profit before depreciation, fair value adjustments and
exchange movements (adjusted EBITDA)
Exchange movements
Fair value adjustments
Gains on investments held at fair value through profit and loss (FVPL)
Operating profit excluding depreciation
Share of loss in joint venture
EBITDA
Net interest movement
Depreciation
Profit before tax
The key performance indicators of the Group
can be reconciled as follows:
Revenue
Transport and loading cost
Mining and washing costs
Other operating costs excluding depreciation
Operating (loss)/profit before depreciation, fair value adjustments
and exchange movements (adjusted EBITDA)
Exchange movements
Fair value adjustments
Gains on investments held at fair value through profit and loss (FVPL)
Operating (loss)/profit excluding depreciation
Share of loss in joint venture
EBITDA
Net interest movement
Depreciation
Loss before tax
Mining
£’000
49,226
(5,569)
(32,438)
(6,953)
4,266
(121)
-
-
4,145
-
4,145
Mining
£’000
28,567
(1,906)
(22,739)
(5,743)
(1,821)
39
-
-
(1,782)
-
(1,782)
Property
£’000
1,119
-
-
(527)
592
-
255
-
847
(125)
722
Other
£’000
175
-
-
(5)
170
-
-
812
982
-
982
Property
£’000
1,181
Other
£’000
57
-
-
(523)
658
-
(1,295)
-
(637)
(87)
(724)
-
-
(5)
52
-
-
67
119
-
119
2021
£’000
50,520
(5,569)
(32,438)
(7,485)
5,028
(121)
255
812
5,974
(125)
5,849
(777)
(2,571)
2,501
2020
£’000
29,805
(1,906)
(22,739)
(6,271)
(1,111)
39
(1,295)
67
(2,300)
(87)
(2,387)
(616)
(2,193)
(5,196)
Bisichi PLC
1717
Strategic Report Financial & performance review
Adjusted EBITDA is used as a key indicator
of the operating trading performance of
the Group and its operating segments
representing operating profit before the
impact of depreciation, fair value
adjustments, gains/(losses) on disposal of
other investments and foreign exchange
movements. The Group’s operating
segments include its South African mining
operations and UK property. The
performance of these two operating
segments are discussed in more detail
below.
The Group achieved an EBITDA for the
year of £5.8million (2020: loss
£2.4million). The movement compared to
the prior year can mainly be attributed to
the operating profit before depreciation
from our mining activities of £4.3million
(2020: loss £1.8million).
The Group’s fair value gains, related to
our UK property were £0.3million (2020:
loss £1.3million) and those related to
investments held at fair value through
profit and loss were £0.8million (2020:
£0.1million). Overall, the Group reported
an overall profit before tax of £2.5million
(2020: loss £5.2 million). Taxation for the
year increased to £0.8million (2020: gain
of £1.4million). This resulted in the Group
achieving an overall profit for the year
after tax of £1.7million (2020: loss
£3.8million), of which £1.5million (2020:
loss £3.4million) was attributable to
equity holders of the company.
South African mining operations
Performance
The key performance indicators of the group’s South African mining
operations are presented in South African Rand and UK Sterling as follows:
Revenue
Transport and loading costs
Mining and washing costs
South African Rand
2020
2021
R’000
R’000
1,004,444
602,581
2021
£’000
49,223
(113,641)
(40,204)
(5,569)
UK Sterling
2020
£’000
28,567
(1,906)
(661,929)
(479,647)
(32,438)
(22,739)
Operating profit before other operating costs and depreciation
228,874
82,730
Other operating costs (excluding depreciation)
Operating profit before depreciation, fair value adjustments and
exchange movements (adjusted EBITDA)
Exchange movements
EBITDA
Mining production in tonnes
Net Revenue per tonne of mining production
Mining and washing costs per tonne of mining production
Operating profit per tonne of mining production before other operating costs and depreciation
11,216
(6,950)
4,266
(121)
4,145
2021
’000
1,046
2021
R
852
(633)
219
3,922
(5,743)
(1,821)
39
(1,782)
2020
’000
1,180
2020
R
477
(406)
71
Net Revenue per tonne of mining production can be defined as the revenue price achieved per metric tonne of mining production
less transportation and loading costs.
18 Bisichi PLC
Strategic Report Financial & performance review
A breakdown of the quantity of coal sold and revenue of the Group’s South African mining operations are presented in metric
tonnes and South African Rand as follows:
Quantity of coal sold in tonnes
Revenue
Net Revenue per tonne of coal sold
Domestic
’000
1,127
Domestic
R’000
530,905
R
470
Mining and washing costs per tonne of coal sold
Operating profit per tonne of coal sold before
other operating costs and depreciation
Export
’000
320
Export
R’000
2021
’000
1,447
2021
R’000
473,539
1004,444
R
1,129
R
616
(457)
158
Domestic
’000
969
Domestic
R’000
442,516
R
450
Export
’000
230
Export
R’000
2020
’000
1,199
2020
R’000
160,065
602,581
R
547
R
469
(400)
69
The quantity of coal sold can be defined
as the quantity of coal sold in metric
tonnes by the Group in any given period.
Net Revenue per tonne of coal sold can
be defined as the revenue price achieved
less transportation and loading costs per
metric tonne of coal sold.
Total net revenue per tonne of coal sold
for the Group’s mining and processing
operations increased for the year from
R469 per tonne of coal sold in 2020 to
R616 in 2021, mainly attributable to the
average price increase achieved in the
export market. A decrease in mining
production during the year, attributable to
difficult mining conditions, was offset by
an increase in buy-in coal processed and
a decrease in coal inventories due to
improved coal demand resulting in the
quantity of coal sold for the year
increasing to 1.447million tonnes (2020:
1.199million tonnes). Overall, the increase
in revenue per tonne of coal sold and the
higher coal sales volumes, particularly in
the export market, resulted in revenue
from the Group’s South African mining
operations increasing during the year to
R1.005billion compared to revenue of
R0.603billion in the prior year.
Mining and washing costs per tonne of
coal sold during the year increased from
R400 per tonne in 2020 to R457 per
tonne in 2020 due to incremental
increases in both mining and washing
costs. This resulted in an increase in total
mining and washing costs for the Group
to R661.9million (2020: R479.6million).
Other operating costs (excluding
depreciation) of £6.95million (2020:
£5.74million) include general administrative
costs as well as administrative salaries and
wages related to our South African mining
operations that are incurred both in South
Africa and in the UK. These costs are not
significantly impacted by movements in
mining production and coal processing.
The increase during the year can mainly be
attributed to lower administrative salaries
and wages costs incurred in 2020 due to
the financial performance of the Group in
the same period. Overall costs in South
Africa were in line with management’s
expectations and local inflation.
Overall, the movement in the Group’s
Adjusted EBITDA from a loss of £1.1million
in 2020 to a profit of £5.0million in 2021
can mainly be attributed to higher prices
achievable for our coal and increased coal
sales from the Group’s South African coal
processing operations. This offset the
higher mining, washing and operating
costs incurred in 2021. A further
explanation of the mines operational
performance can be found in the Mining
Review on page 5.
Non-controlling interest Black Wattle
As mentioned in the Chairman’s statement
and Mining Review, the Group’s subsidiary
Black Wattle Colliery (Pty) Ltd signed an
agreement to acquire additional coal
reserves during the year. The new reserves
of 6.1million metric tonnes, will extend the
life of mine of Black Wattle to eight years
and remains subject to regulatory approval.
The acquisition was negotiated in
conjunction with a re-negotiation of
2.1million metric tonnes of separate coal
reserves previously acquired from the
same seller, as previously announced in
our 2018 annual report.
Bisichi PLC
1919
Strategic Report Financial & performance review
Vunani Mining (Pty) Ltd our black
economic empowered shareholders at
Black Wattle, were integral in the success
in acquiring both of these reserves. As a
result, it was agreed that Vunani Mining
will share equally in any distributable
economic benefit from the coal reserves
as part of their non-controlling interest in
Black Wattle. This has been achieved
through a new shares issue in Black
Wattle that was completed subsequent to
year end on 12 April 2022. The total
issued share capital in Black Wattle
Colliery (Pty) Ltd was increased further
from 1000 shares to 1002 shares at par of
R1 through the following share issue:
•• a subscription of 1 “B” Share at par by
Bisichi Mining (Exploration Limited), a
100% subsidiary of the Group;
•• a subscription of 1 “B” Share at par by
Vunani Mining (Pty) Ltd
The “B” shares rank pari passu with the
ordinary shares save that they have sole
rights to the distributable profits
attributable to the above mining reserves
held by Black Wattle Colliery (Pty) Ltd. A
non-controlling interest is therefore
recognised for all profits distributable to
the “B” shares held by Vunani Mining (Pty)
Ltd from the date of issue of the shares
(12 April 2022).
Details of Vunani’s non-controlling interest
held at year end can be found in the
Non-controlling interest note on page 88.
UK property investment
Performance
The Group’s portfolio is managed actively
by London & Associated Properties plc.
Rental performance was marginally below
levels achieved in 2021. Net property
revenue (excluding joint ventures and
service charge income) across the
portfolio decreased during the year to
£1.119million (2020: £1.181million). The
property portfolio was externally valued
at 31 December 2021 and the value of UK
investment properties attributable to the
Group at year end increased to
£10.525million (2020: £10.270million)
mainly due to the reduced impact of
Covid-19.
Joint venture property investments
The Group holds a £0.6million (2020:
£0.7million) joint venture investment in
Dragon Retail Properties Limited, a UK
property investment company. The open
market value of the company’s share of
investment properties included within its
joint venture investment in Dragon Retail
Properties decreased marginally during
the year to £1.040million (2020:
£1.065million).
The following table summarises the main components of the consolidated cashflow for the year:
Cash flow generated from operations before working capital and other items
Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Exchange adjustment
Cash and cash equivalents at 31 December
Cash and cash equivalents at 31 December comprise:
Cash and cash equivalents as presented in the balance sheet
Bank overdrafts (secured)
20 Bisichi PLC
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
5,028
4,432
(2,706)
(271)
1,455
(1,078)
105
482
3,018
(2,536)
482
(1,111)
449
(4,292)
(285)
(4,128)
2,878
172
(1,078)
3,768
(4,846)
(1,078)
Strategic Report Financial & performance review
The Group continues to hold a £0.5million
(2020: £0.6million) 50% joint venture
investment in West Ealing Projects
Limited, a UK unlisted property
development company. West Ealing
Projects Limited’s only asset is a property
development in West Ealing, London. The
carrying value of the Group’s share of the
trading property inventory included within
this development is valued at £3.7million
(2020: £3.5million). The joint venture has
obtained planning consent for a
residential development of 56 flats. We
look forward to updating shareholders
further in due course.
During the year the Group acquired a one
third joint venture investment holding in
Development Physics Limited, a UK
unlisted property development company.
The remaining two thirds is held equally by
London & Associated Properties PLC and
Metroprop Real Estate Ltd. The company
was set up with the purpose of delivering a
residential development of 44 flats and 4
town houses in Purley, London.
Development Physics acquired a series of
options on the site and has registered for
planning permission for its development. At
year end, the negative carrying value of the
investment held by the Group was £3,000
(2020: £Nil). We look forward to updating
shareholders further in due course.
Overall, the Group achieved net property
revenue of £1.2million (2020: £1.3million)
for the year which includes the company’s
share of net property revenue from its
investment in joint ventures of £88,000
(2020: £71,000).
Other Investments
During the year the Group’s non-current
investments held at fair value through
profit and loss increased from £1.7million
in 2020 to £3.6million due to net
additions during the year of £1.2million
(2020: £1.3million) and gains from
investments of £0.7million (2020:
£0.2million). The investments comprise of
£1.56million (2020: £0.96million)
investments listed on stock exchanges in
the United Kingdom and £2.07million
(2020: £0.79million) of investments listed
on overseas stock exchanges.
Cashflow & financial position
Cash flow generated from operating
activities increased compared to the prior
year to £4.4million (2020: £0.4million).
This can mainly be attributed to the
operating profit during the year of
£3.4million (2020: loss £4.5million) and a
positive cash movement attributable to a
decrease in stocks of £2.1million (2020:
cash decrease of £1.1million). This offset
an increase in trade receivables of
£1.9million (2020: decrease £0.1million).
All of the above can mainly be attributed
to the improved coal sales and revenue
per tonne achieved during the year.
Investing cashflows primarily reflect the
net effect of capital expenditure during
the year of £1.8million (2020: £3.2million)
which can mainly be attributable to mine
development costs at Black Wattle of
£1.6million (2020: £2.5million). As at year
end the Group’s mining reserves, plant
and equipment had a carrying value of
£9.0million (2020: £10.1 million) with
capital expenditure being offset by
depreciation of £2.5million (2020:
£2.2milion) and exchange translation
movements of £0.4million (2020:
£0.6million) for the year. Other investing
cashflows also include the net acquisition
of listed investments of £0.9million
(2020: £1.1million).
Cash outflows from financing activities
includes a net decrease in borrowings of
£0.3million (2020:£0.2million). In
addition, no dividends were paid to
shareholders during the year (2020:
£0.1million).
Overall, the Group’s cash and cash
equivalents increased during the year by
£1.5million (2020: decrease £4.1million).
After taking into account an exchange
gain of £0.1million (2020: £0.2million) on
the translation of the Group’s year end
net balance of cash and cash equivalents
that were held in South African Rands,
the Group’s net balance of cash and cash
equivalents (including bank overdrafts) at
year end was £0.5million (2020: negative
amount of £1.1million).
The Group has considerable financial
resources available at short notice
including cash and cash equivalents
(excluding bank overdrafts) of £3.0million
(2020: £3.8 million) and listed
investments of £4.3million (2020:
£2.6million) as at year end. The above
financial resources totalling £7.3million
(2020: £6.4million).
The net assets of the Group reported as
at year end were £17.8million (2020:
£16.2million) and total assets at
£38.1million (2020: £38.7million).
Liabilities decreased from £22.5million to
£20.3million during the year primarily due
to a decrease in current borrowings from
£5.1million to £2.7million. The overall
exchange loss recorded through the
translation reserve on translation of the
Group’s South African net assets at year
end decreased to £0.05million (2020:
£0.40million) as a result of the lower
weakening of the South African Rand
against UK sterling year to year.
Further details on the Group’s cashflow
and financial position are stated in the
Consolidated Cashflow Statement on
page 59 and the Consolidated Balance
Sheet on page 56 and 57.
Bisichi PLC
2121
Strategic Report Financial & performance review
Loans
South Africa
The Group has a structured trade finance
facility with Absa Bank Limited for
R85million held by Sisonke Coal
Processing (Pty) Limited, a 100%
subsidiary of Black Wattle Colliery (Pty)
Limited. This facility comprises of an
R85million revolving facility to cover the
working capital requirements of the
Group’s South African operations. The
facility is renewable annually at 25
January and is secured against inventory,
debtors and cash that are held in the
Group’s South African operations.
United Kingdom
The Group holds a 5 year term facility of
£3.9m with Julian Hodge Bank Limited at
an initial LTV of 40%. The loan is secured
against the company’s UK retail property
portfolio. The amount repayable on the
loan at year end was £3.8million. The
debt package has a five year term and is
repayable at the end of the term in
December 2024. In the last quarter of
2021 the base interest rate on the loan
changed from LIBOR to the Bank of
England base rate. The overall interest
cost of the loan is 4.00% above the Bank
of England base rate. The loan is 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 £10.5million. No banking
covenants were breached by the Group
during the year.
22 Bisichi PLC
22
Statement regarding Section
172 of the UK Companies Act
Section 172 of the UK Companies Act
requires the Board to report on how the
directors have had regard to the matters
outlined below in performing their duties.
The Board consider the Group’s
customers, employees, local
communities, suppliers and shareholders
as key stakeholders of the Group. During
the year, the Directors consider that they
have acted in a way, and have made
decision that would, most likely promote
the success of the Group for the benefit
of its members as a whole as outlined in
the matters below:
•
•
The likely consequences of any
decision in the long term: see Principal
activity, strategy & business model on
page 4 and Principal Risks and
Uncertainties on page 11;
The interests of the Group’s employees;
ethics and compliance; fostering of the
Company’s business relationships with
suppliers, customers and others; and
the impact of the Group’s operations on
the community and environment: see
Sustainability report on page 7;
The need to act fairly between members
of the Company: see the Corporate
Governance section on page 26.
•
•
•
•
The Group continues to seek opportunities
to expand its operations in South Africa
through the acquisition of additional coal
reserves. In the UK, management is
looking forward to progressing its property
development opportunities in West Ealing
and Development Physics as well as
expanding on its equity investment
portfolio. This is in line with the Group’s
overall strategy of balancing the high risk
of our mining operations with a dependable
cash flow and capital appreciation from
our UK property investment operations
and equity investments.
To date, the Group’s financial position has
remained strong and at present, the
Group has adequate financial resources
to ensure the Group remains viable for
the foreseeable future and that liabilities
are met. A full going concern and viability
assessment can be found in the Directors
report on page 30.
Further information on the outlook of the
company can be found in both the
Chairman’s Statement on page 2 and the
Mining Review on page 5 which form part
of the Strategic Report.
Signed on behalf of the Board of Directors
Future prospects
As mentioned in the Chairman’s statement,
In the first quarter of the year, we have
seen the API4 price average $238 and
exports from our South African operations
in the first quarter of 2022 have been in
line with the average export tonnages we
achieved in 2021. However, looking
beyond the first quarter, uncertainties
remain, particularly in regard to the
sustainability of the higher international
coal price and the impact of continued
constraints in transporting coal for export
on the South African rail network.
Garrett Casey
Finance Director
13 April 2022
Governance
MANAGEMENT TEAM
OTHER DIRECTORS AND ADVISORS
* SIR MICHAEL HELLER
MA, FCA (Chairman)
ANDREW R HELLER
MA, ACA
(Managing Director)
GARRETT CASEY
CA (SA)
(Finance Director)
ROBERT GROBLER
Pr Cert Eng
(Director of mining)
O+ CHRISTOPHER A JOLL
MA (Non-executive)
Christopher Joll was appointed a
Director on 1 February 2001. He has
held a number of non-executive
directorships of quoted and un-quoted
companies and currently runs his own
event management business. He is also
a published author, lecturer and a writer
and director of documentary films.
O * JOHN A SIBBALD
BL (Non-executive)
John Sibbald has been a Director
since 1988. After qualifying as a
Chartered Accountant he spent
over 20 years in stockbroking,
specialising in mining and
international investment.
JOHN WONG
ACA, CFA (Non-executive)
(Appointed 15 October 2020)
John Wong was appointed a
Director on 15 October 2020. After
training as a Chartered accountant
he has worked in the fund
management industry for almost 20
years and has extensive experience
in investment management, in
particular within the mining sector.
SECRETARY AND
REGISTERED OFFICE
Garrett Casey CA (SA)
12 Little Portland Street
London W1W8BJ
BLACK WATTLE COLLIERY
AND SISONKE COAL
PROCESSING DIRECTORS
Andrew Heller
(Managing Director)
Ethan Dube
Robert Grobler
Garrett Casey
Millicent Zvarayi
COMPANY REGISTRATION
Company registration No.
112155 (Incorporated in
England and Wales)
WEBSITE
www.bisichi.co.uk
E-MAIL
admin@bisichi.co.uk
AUDITOR
Kreston Reeves LLP,
London
PRINCIPAL BANKERS
United Kingdom
Julian Hodge Bank Limited
Santander UK PLC
Investec PLC
South Africa
ABSA Bank (SA)
First National Bank (SA)
CORPORATE SOLICITORS
United Kingdom
Ashfords LLP, London
Fladgate LLP, London
Olswang LLP, London
Wake Smith Solicitors
Limited, Sheffield
South Africa
Beech Veltman Inc,
Johannesburg
Brandmullers Attorneys,
Middelburg
Cliffe Decker Hofmeyer,
Johannesburg
Herbert Smith Freehills,
Johannesburg
Natalie Napier Inc,
Johannesburg
Tugendhaft Wapnick
Banchetti and Partners,
Johannesburg
STOCKBROKERS
Shore Capital Stockbrokers
Limited
REGISTRARS AND
TRANSFER OFFICE
Link Group
Shareholder Services
The Registry
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
* Member of the nomination committee
+ Senior independent director
O Member of the audit, nomination
and remuneration committees.
UK telephone:
0371 664 0300
Calls are charged at the standard
geographic rate and will vary by
provider. Calls outside the United
Kingdom will be charged at the
applicable international rate. The
helpline is open between 9.00 a.m.
– 5.30 p.m., Monday to Friday
excluding public holidays in
England and Wales.
Website: https://www.linkgroup.com/
Email: shareholderenquiries@
linkgroup.co.uk
Company registration number:
341829 (England and Wales)
Bisichi PLC
2323
Governance
Five year summary
Consolidated income statement items
Revenue
Operating profit /(loss)
Profit/(Loss) before tax
Trading profit /(loss) before tax
Revaluation and impairment profit /(loss) before tax
EBITDA
Operating profit before depreciation, fair value
adjustments and exchange movements (adjusted EBITDA)
Consolidated balance sheet items
Investment properties
Other non-current investments
Current Investments held at fair value
Other assets less liabilities less non-controlling interests
Total equity attributable to equity shareholders
Net assets per ordinary share (attributable)
Dividend per share
Financial calendar
2021
£’000
2020
£’000
2019
£’000
2018
£’000
2017
£’000
50,520
29,805
48,106
49,945
40,350
3,403
2,501
1,559
942
5,849
5,028
10,525
4,761
15,286
685
15,971
1,541
17,512
164.0p
6.00p
(4,493)
(5,196)
(3,881)
(1,315)
(2,387)
(1,111)
10,270
3,001
13,271
833
14,104
1,969
16,073
150,5p
0p
3,658
3,027
4,493
(1,466)
5,868
7,457
11,565
1,629
13,194
1,119
14,313
5,619
19,932
186.7p
1.00p
6,526
5,959
6,397
(438)
8,587
9,088
13,045
1,357
14,402
887
15,289
4,280
19,569
183.3p
6.00p
3,763
1,485
3,317
(1,832)
3,734
5,819
13,245
925
14,170
1,050
15,220
1,922
17,142
160.6p
5.00p
16 June 2022
Late August 2022
Late April 2023
Annual General Meeting
Announcement of half-year results to 30 June 2022
Announcement of results for year ending 31 December 2022
24 Bisichi PLC
Governance
Directors’ report
The directors submit their report together with the audited financial
statements for the year ended 31 December 2021.
Review of business, future
developments and post
balance sheet events
The Group continues its mining activities.
Income for the year was derived from
sales of coal from its South African
operations. The Group also has a
property investment portfolio for which it
receives rental income and a joint venture
investment in a UK residential property
development.
The results for the year and state of
affairs of the Group and the company
at 31 December 2021 are shown on
pages 54 to 99 and in the Strategic
Report on pages 2 to 22. Future
developments and prospects are also
covered in the Strategic Report and
further details of any post balance sheet
events can be found in note 32 to the
financial statements. Over 98 per cent
of staff are employed in the South African
coal mining industry – employment
matters and health and safety are dealt
with in the Strategic Report.
The management report referred to in
the Director’s responsibilities statement
encompasses this Directors’ Report and
Strategic Report on pages 2 to 22.
Corporate responsibility
Environment
The environmental considerations of the
Group’s South African coal mining
operations are covered in the Strategic
Report on pages 2 to 22.
The Group’s UK activities are principally
property investment whereby premises
are provided for rent to retail businesses
and a joint venture investment in a UK
residential property development.
The Group seeks to provide those
tenants with good quality premises from
which they can operate in an efficient and
environmentally friendly manner.
Wherever possible, improvements, repairs
and replacements are made in an
environmentally efficient manner and
waste re-cycling arrangements are in
place at all the company’s locations.
Greenhouse Gas Emissions
Details of the Group’s greenhouse gas
emissions for the year ended 31
December 2021 can be found on page 10
of the Strategic Report.
Employment
The Group’s policy is to attract staff and
motivate employees by offering
competitive terms of employment. The
Group provides equal opportunities to all
employees and prospective employees
including those who are disabled. The
Strategic Report gives details of the
Group’s activities and policies concerning
the employment, training, health and
safety and community support and social
development concerning the Group’s
employees in South Africa.
Dividend policy
As outlined in the Strategic report on page
2 the directors are proposing the payment
of a dividend of 4p (2020: 0p) and a
special dividend of 2p (2020: Nil) per
share for 2021. No interim dividend for
2021 has been paid (Interim 2020: 0p).
The total dividend per ordinary share for
2021 will therefore be 6p (2020: 0p) per
ordinary share.
Investment properties and
other properties
The investment property portfolio is
stated at its open market value of
£10,525,000 at 31 December 2021
(2020: £10,270,000) as valued by
professional external valuers. The open
market value of the company’s share of
investment properties and development
property inventory held at cost included
within its investments in joint ventures is
£4,787,000 (2020: £4,597,000).
Financial instruments
Note 22 to the financial statements sets
out the risks in respect of financial
instruments. The Board reviews and
agrees overall treasury policies,
delegating appropriate authority to the
managing director. Treasury operations
are reported at each Board meeting and
are subject to weekly internal reporting.
Directors
The directors of the company for the year
were Sir Michael Heller, A R Heller, G J
Casey, C A Joll, R J Grobler (a South
African citizen), J A Sibbald and J Wong.
The directors retiring by rotation are Sir M
A Heller, Mr C A Joll and Mr J A Sibbald
who offers themselves for re-election.
Sir Michael Heller has been an executive
Director since 1972 and Chairman since
1981. He is a Chartered Accountant and
has a contract of employment
determinable at six months’ notice.
Bisichi PLC
2525
Governance Directors’ report
Christopher Joll was appointed a Director
on 1 February 2001. He has held a number
of non-executive directorships of quoted
and un-quoted companies and currently
runs his own event management business.
He is also a published author, lecturer and
a writer and director of documentary films.
John Sibbald has been a non-executive
Director since 1988. He is a retired
Chartered Accountant. For most of his
career he was employed in stockbroking
in the City of London where he
specialised in mining and international
investment. He has a contract of service
determinable at three months’ notice.
No director had any material interest in
any contract or arrangement with the
company during the year other than as
shown in this report.
Directors’ shareholdings
The interests of the directors in the
shares of the company, including family
and trustee holdings where appropriate,
are shown on page 34 of the Annual
Remuneration Report.
Substantial interests
The following have advised that they have
an interest in 3 per cent. or more of the
issued share capital of the company as at
13 April 2022:
London & Associated Properties PLC –
4,432,618 shares representing 41.52 per
cent. of the issued capital. (Sir Michael
Heller is a director and shareholder of
London & Associated Properties PLC).
Sir Michael
Heller
A R Heller
330,117 shares
representing 3.09 per
cent. of the issued capital.
785,012 shares
representing 7.35 per
cent. of the issued capital.
26 Bisichi PLC
Stonehage
Fleming
Investment
Management
Ltd –
1,981,154 shares
representing 18.56 per
cent. of the issued share
capital.
James Hyslop 345,000 shares
representing 3.23 per
cent. of the issued share
capital.
Disclosure of information to
auditor
The directors in office at the date of
approval of the financial statements have
confirmed that as far as they are aware
that there is no relevant audit information
of which the auditor is unaware. Each of
the directors has confirmed that they
have taken all reasonable steps they
ought to have taken as directors to make
themselves aware of any relevant audit
information and to establish that it has
been communicated to the auditor.
Indemnities and insurance
The Articles of Association and
Constitution of the company provide for
them to indemnify, to the extent permitted
by law, directors and officers (excluding
the Auditor) of the companies, including
officers of subsidiaries, and associated
companies against liabilities arising from
the conduct of the Group’s business. The
indemnities are qualifying third-party
indemnity provisions for the purposes of
the UK Companies Act 2006 and each of
these qualifying third-party indemnities
was in force during the course of the
financial year ended 31 December 2021
and as at the date of this Directors’
report. No amount has been paid under
any of these indemnities during the year.
The Group has purchased directors’ and
officers’ insurance during the year. In
broad terms, the insurance cover
indemnifies individual directors and
officers against certain personal legal
liability and legal defence costs for claims
arising out of actions taken in connection
with Group business.
Corporate Governance
The Board acknowledges the importance of
good corporate governance. The
paragraphs below set out how the company
has applied this guidance during the year.
Principles of corporate
governance
The Group’s Board appreciates the value
of good corporate governance not only in
the areas of accountability and risk
management, but also as a positive
contribution to business prosperity. The
Board endeavours to apply corporate
governance principles in a sensible and
pragmatic fashion having regard to the
circumstances of the Group’s business.
The key objective is to enhance and
protect shareholder value.
Board structure
During the year the Board comprised the
executive chairman, the managing
director, two other executive directors
and three non-executive directors. Their
details appear on page 23. The Board is
responsible to shareholders for the
proper management of the Group. The
Directors’ responsibilities statement in
respect of the accounts is set out on
page 43. The non-executive directors
have a particular responsibility to ensure
that the strategies proposed by the
executive directors are fully considered.
Governance Directors’ report
•
•
To enable the Board to discharge its duties,
all directors have full and timely access to all
relevant information and there is a
procedure for all directors, in furtherance of
their duties, to take independent
professional advice, if necessary, at the
expense of the Group. The Board has a
formal schedule of matters reserved to it
and meets bi-monthly.
The Board is responsible for overall Group
strategy, approval of major capital
expenditure projects and consideration of
significant financing matters.
•
•
The following Board committees, which
have written terms of reference, deal with
specific aspects of the Group’s affairs:
•
•
The nomination committee comprises of
two non-executive directors C A Joll
(Chairman) and JA Sibbald as well as the
executive chairman. The committee is
responsible for proposing candidates for
appointment to the Board, having regard
to the balance and structure of the
Board. In appropriate cases recruitment
consultants are used to assist the
process. Each director is subject to
re-election at least every three years.
The remuneration committee is
responsible for making recommendations
to the Board on the company’s
framework of executive remuneration and
its cost. The committee determines the
contractual terms, remuneration and
other benefits for each of the executive
directors, including performance related
bonus schemes, pension rights and
compensation payments. The Board itself
determines the remuneration of the
non-executive directors. The committee
comprises of two non-executive directors
C A Joll (Chairman) and JA Sibbald. The
company’s executive chairman is
normally invited to attend meetings. The
report on directors’ remuneration is set
out on pages 32 to 39.
The audit committee comprises of two
non-executive directors C A Joll
(Chairman) and JA Sibbald. Its prime
tasks are to review the scope of external
audit, to receive regular reports from the
company’s auditor and to review the
half-yearly and annual accounts before
they are presented to the Board,
focusing in particular on accounting
policies and areas of management
judgment and estimation. The committee
is responsible for monitoring the controls
which are in force to ensure the integrity
of the information reported to the
shareholders. The committee acts as a
forum for discussion of internal control
issues and contributes to the Board’s
review of the effectiveness of the
Group’s internal control and risk
management systems and processes.
The committee also considers annually
the need for an internal audit function. It
advises the Board on the appointment of
external auditors and on their
remuneration for both audit and
non-audit work, and discusses the
nature and scope of the audit with the
external auditors. The committee, which
meets formally at least twice a year,
provides a forum for reporting by the
Group’s external auditors.
Meetings are also attended, by invitation,
by the company chairman, managing
director and finance director.
The audit committee also undertakes a
formal assessment of the auditors’
independence each year which includes:
•
•
a review of non-audit services provided
to the Group and related fees;
discussion with the auditors of a written
report detailing consideration of any
matters that could affect independence
or the perception of independence;
•
•
•
•
•
•
a review of the auditors’ own procedures
for ensuring the independence of the
audit firm and partners and staff involved
in the audit, including the regular rotation
of the audit partner; and
obtaining written confirmation from the
auditors that, in their professional
judgement, they are independent.
The audit committee report is set out on
page 40.
An analysis of the fees payable to the
external audit firm in respect of both audit
and non-audit services during the year is
set out in Note 5 to the financial statements.
Performance evaluation –
board, board committees and
directors
The performance of the board as a whole
and of its committees and the non-
executive directors is assessed by the
chairman and the managing director and
is discussed with the senior independent
director. Their recommendations are
discussed at the nomination committee
prior to proposals for re-election being
recommended to the Board. The
performance of executive directors is
discussed and assessed by the
remuneration committee. The senior
independent director meets regularly with
the chairman and both the executive and
non-executive directors individually
outside of formal meetings. The directors
will take outside advice in reviewing
performance but have not found this
necessary to date.
Bisichi PLC
2727
Governance Directors’ report
Independent directors
The senior independent non-executive
director is Christopher Joll. The other two
independent non-executive directors are
John Sibbald and John Wong.
Christopher Joll has been a non-
executive director for over twenty years,
John Sibbald has been a non-executive
director for over thirty years and John
Wong was appointed to the Board on 15
October 2020. The Board encourages
the non-executive directors to act
independently. The board considers that
their length of service does not, and has
not, resulted in their inability or failure to
act independently. In the opinion of the
Board, Christopher Joll and John Sibbald
continue to fulfil their role as independent
non-executive directors.
The independent directors regularly meet
prior to Board meetings to discuss
corporate governance issues.
Internal control
The directors are responsible for the
Group’s system of internal control and
review of its effectiveness annually. The
Board has designed the Group’s system of
internal control in order to provide the
directors with reasonable assurance that its
assets are safeguarded, that transactions
are authorised and properly recorded and
that material errors and irregularities are
either prevented or would be detected
within a timely period. However, no system
of internal control can eliminate the risk of
failure to achieve business objectives or
provide absolute assurance against
material misstatement or loss.
The key elements of the control system in
operation are:
•
•
the Board meets regularly with a formal
schedule of matters reserved to it for
decision and has put in place an
28 Bisichi PLC
Board and board committee meetings
The number of meetings during 2021 and attendance at regular Board meetings and
Board committees was as follows:
Meetings
Meetings
Attended
Sir Michael Heller
A R Heller
G J Casey
R J Grobler
C A Joll
J A Sibbald
Board
Nomination committee
Audit committee
Board
Audit committee
Board
Audit committee
Board
Board
Audit committee
Nomination committee
Remuneration committee
Board
Audit committee
Nomination committee
Remuneration committee
held
5
1
2
5
2
5
2
5
5
2
1
1
5
2
1
1
5
5
1
2
5
2
5
2
1
5
2
1
1
2
0
1
0
1
J Wong
Board
•
•
•
•
organisational structure with clearly
defined lines of responsibility and with
appropriate delegation of authority;
there are established procedures for
planning, approval and monitoring of
capital expenditure and information
systems for monitoring the Group’s
financial performance against approved
budgets and forecasts;
UK property and financial operations are
closely monitored by members of the
Board and senior managers to enable
them to assess risk and address the
adequacy of measures in place for its
monitoring and control. The South
African operations are closely supervised
by the UK based executives through
daily, weekly and monthly reports from
the directors and senior officers in South
Africa. This is supplemented by regular
visits by the UK based finance director to
the South African operations which
include checking the integrity of
information supplied to the UK. The
directors are guided by the internal
control guidance for directors issued by
the Institute of Chartered Accountants in
England and Wales.
During the period, the audit committee has
reviewed the effectiveness of internal
control as described above. The Board
receives periodic reports from its
committees.
There were no significant issues identified
during the year ended 31 December 2021
(and up to the date of approval of the
report) concerning material internal control
issues. The directors confirm that the
Board has reviewed the effectiveness of the
system of internal control as described
during the period.
Governance Directors’ report
Communication with
shareholders
Communication with shareholders is a
matter of priority. Extensive information
about the Group and its activities is given
in the Annual Report, which is made
available to shareholders. Further
information is available on the company’s
website, www.bisichi.co.uk. There is a
regular dialogue with institutional
investors. Enquiries from individuals on
matters relating to their shareholdings
and the business of the Group are dealt
with informatively and promptly.
Takeover directive
The company has one class of share
capital, ordinary shares. Each ordinary
share carries one vote. All the ordinary
shares rank pari passu. There are no
securities issued in the company which
carry special rights with regard to control of
the company. The identity of all substantial
direct or indirect holders of securities in the
company and the size and nature of their
holdings is shown under the “Substantial
interests” section of this report above.
A relationship agreement dated 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 whilst LAP is
a controlling shareholder of the company.
The Relationship Agreement includes a
provision under which LAP has agreed to
exercise the voting rights attached to the
ordinary shares in the company owned by
LAP to ensure the independence of the
Board of directors of the company.
Other than the restrictions contained in the
Relationship Agreement, there are no
restrictions on voting rights or on the
transfer of ordinary shares in the company.
The rules governing the appointment and
replacement of directors, alteration of the
articles of association of the company and
the powers of the company’s directors
accord with usual English company law
provisions. Each director is re-elected at
least every three years. The company is not
party to any significant agreements that
take effect, alter or terminate upon a
change of control of the company following
a takeover bid. The company is not aware
of any agreements between holders of its
ordinary shares that may result in
restrictions on the transfer of its ordinary
shares or on voting rights.
There are no agreements between the
company and its directors or employees
providing for compensation for loss of
office or employment that occurs because
of a takeover bid.
The Bribery Act 2010
The Bribery Act 2010 came into force on
1 July 2011, and the Board took the
opportunity to implement a new Anti-
Bribery Policy. The company is committed
to acting ethically, fairly and with integrity
in all its endeavours and compliance of
the code is closely monitored.
Annual General Meeting
The annual general meeting of the company
(“Annual General Meeting”) will be held at
Meeting Room 2, 12 Charles II Street, St
James, London SW1Y 4QU on Thursday,
16 June 2022 at 11.00 a.m. Resolutions
1 to 10 will be proposed as ordinary
resolutions. More than 50 per cent. of
shareholders’ votes cast must be in
favour for those resolutions to be passed.
The directors consider that all of the
resolutions to be put to the meeting are in
the best interests of the company and its
shareholders as a whole. The Board
recommends that shareholders vote in
favour of all resolutions.
Please note that the following paragraph
is a summary of resolution 10 to be
proposed at the Annual General Meeting
and not the full text of the resolution. You
should therefore read this section in
conjunction with the full text of the
resolutions contained in the notice of
Annual General Meeting.
Directors’ authority to allot
shares (Resolution 10)
In certain circumstances it is important
for the company to be able to allot shares
up to a maximum amount without
needing to seek shareholder approval
every time an allotment is required.
Paragraph 10.1.1 of resolution 10 would
give the directors the authority to allot
shares in the company and grant rights
to subscribe for, or convert any security
into, shares in the company up to an
aggregate nominal value of £355,894.
This represents approximately 1/3 (one
third) of the ordinary share capital of the
company in issue (excluding treasury
shares) at 13 April 2022 (being the last
practicable date prior to the publication
of this Directors’ Report). Paragraph
10.1.2 of resolution 10 would give the
directors the authority to allot shares in
the company and grant rights to
subscribe for, or convert any security
into, shares in the company up to a
further aggregate nominal value of
£355,894, in connection with a pre-
emptive rights issue. This amount
represents approximately 1/3 (one third)
of the ordinary share capital of the
company in issue (excluding treasury
shares) at 13 April 2022 (being the last
practicable date prior to the publication
of this Directors’ Report).
Therefore, the maximum nominal value
of shares or rights to subscribe for, or
convert any security into, shares which
may be allotted or granted under resolution
10 is £711,788. Resolution 10 complies
with guidance issued by the Investment
Association (IA).
The authority granted by resolution 109
will expire on 31 August 2023 or, if earlier,
the conclusion of the next annual general
meeting of the company. The directors
have no present intention to make use of
this authority. However, if they do exercise
the authority, the directors intend to
follow emerging best practice as regards
its use as recommended by the IA.
Bisichi PLC
2929
Governance Directors’ report
Donations
No political donations were made during
the year (2020: £nil).
Going concern
The Group’s business activities, together
with the factors likely to affect its future
development are set out in the
Chairman’s Statement on the preceding
page 2, the Mining Review on pages 5 to
6 and its financial position is set out on
page 21 of the Strategic Report. In
addition Note 22 to the financial
statements includes the Group’s treasury
policy, interest rate risk, liquidity risk,
foreign exchange risks and credit risk.
In South Africa, a structured trade finance
facility with Absa Bank Limited for
R85million is held by Sisonke Coal
Processing (Pty) Limited, a 100%
subsidiary of Black Wattle Colliery (Pty)
Limited. This facility comprises of a
R85million revolving facility to cover the
working capital requirements of the
Group’s South African operations. The
facility is renewable annually at 25
January and is secured against inventory,
debtors and cash that are held in the
Group’s South African operations. The
Directors do not foresee any reason why
the facility will not continue to be renewed
at the next renewal date, in line with prior
periods and based on their banking
relationships.
The directors expect that the coal market
conditions experienced by its South
African coal mining and processing
operations in 2021 will be similar going
into 2022. The directors therefore have a
reasonable expectation that the mine will
achieve positive levels of cash generation
for the Group in 2022. As a
consequence, the directors believe that
the Group is well placed to manage its
South African business risks successfully.
In the UK, forecasts demonstrate that the
Group has sufficient resources to meet
its liabilities as they fall due for at least
the next 12 months, from the approval of
the financial statements, including those
related to the Group’s UK Loan facility
outlined below.
The Group holds a 5 year term facility of
£3.9m with Julian Hodge Bank Limited at
an initial LTV of 40%. The loan is secured
against the company’s UK retail property
portfolio. The amount repayable on the
loan at year end was £3.9million. The
debt package has a five year term and is
repayable at the end of the term in
December 2024. In the last quarter of
2021 the base interest rate on the loan
changed from LIBOR to the Bank of
England base rate. The overall interest
cost of the loan is 4.00% above the Bank
of England base rate. All covenants on
the loan were met during the year and the
directors have a reasonable expectation
that the Group has adequate financial
resources at short notice, including cash
and listed equity investments, to ensure
the existing facility’s covenants are met
on an ongoing basis.
Dragon Retail Properties Limited
(“Dragon”), the Group’s 50% owned joint
venture, holds a Santander bank loan of
£1.2million secured against its investment
property, see note 14. The bank loan of
£1.164million is secured by way of a first
charge on specific freehold property at a
value of £2.08 million. The interest cost
of the loan is 2.75 per cent above the
bank’s base rate. A refinancing of this
loan is currently underway. The loan
originally expired in October 2020 but
has been extended to April 2022, and the
lender has offered to extend this further if
required. Dragon has agreed terms with a
new lender to refinance this loan in full
and are expecting to complete this
shortly.
Subsequent to year end in the first
quarter of 2022 geo-political events in
Ukraine resulted in higher global energy
prices. Although the final outcome of the
events in Ukraine is uncertain, the
Directors at present do not foresee the
events having a significant negative
impact on the Group’s UK and South
African operations ability to remain in
operation for the foreseeable future.
Detailed budget and cash flow forecasts
for the Group’s operations demonstrated
that the Group has sufficient resources to
meet its liabilities as they fall due for at
least the next 12 months and the
Directors believe the Group would be able
to manage its business risks and have
adequate cash resources to continue in
operational existence for the foreseeable
future. As a result of the banking facilities
held as well as the acceptable levels of
cash expected to be held by the Group
over the next 12 months, the Directors
believe that the Group has adequate
resources to continue in operational
existence for the foreseeable future and
that the Group is well placed to manage
its business risks. Thus they continue to
adopt the going concern basis of
accounting in preparing the annual
financial statements.
By order of the board
G.J Casey
Secretary
12 Little Portland Street
London W1W8BJ
13 April 2022
30 Bisichi PLC
Governance
Statement of the Chairman of
the remuneration committee
The remuneration committee presents its report for the year
ended 31 December 2021. The report is presented in two parts
in accordance with the remuneration regulations.
Both of the above reports have been
prepared in accordance with The Large &
Medium-sized Companies and Groups
(Accounts and Reports) (Amendment)
Regulations 2013.
The company’s auditors, Kreston reeves
LLP are required by law to audit certain
disclosures and where disclosures have
been audited they are indicated as such.
Christopher Joll
Chairman – remuneration committee
12 Little Portland Street
London W1W8BJ
13 April 2022
The first part is the Annual Remuneration
Report which details remuneration
awarded to Directors and non-executive
Directors during the year. The shareholders
will be asked to approve the Annual
Remuneration Report as an ordinary
resolution (as in previous years) at the
AGM in June 2022. During the year, in light
of the performance of the Group, the
board determined to award bonuses to
certain executive directors of the Group.
The second part is the Remuneration
Policy which details the remuneration
policy for Directors, and can be found at
www.bisichi.co.uk. The current
remuneration policy was subject to a
binding vote which was approved by
shareholders at the AGM in July 2020.
The approval will continue to apply for a 3
year period commencing from then. The
committee reviewed the existing policy
and deemed that no changes were
necessary to the current arrangements.
Bisichi PLC
3131
Governance
Annual remuneration report
The following information has been audited:
Single total figure of remuneration for the year ended 31 December 2021:
Salaries
and Fees
£’000
Benefits
£’000
Bonuses
£’000
Long Term
Incentive
Awards
£’000
Pension
£’000
Executive Directors
Sir Michael Heller
A R Heller
G J Casey
R Grobler
Non–Executive Directors
C A Joll*
J A Sibbald*
J Wong (appointed 15 October
2021)
83
495
185
205
40
3
50
-
34
17
11
-
3
-
-
400
200
176
-
-
-
Total
1,061
65
776
*Members of the remuneration committee for the year ended 31 December 2021
Single total figure of remuneration for the year ended 31 December 2020:
-
-
-
-
-
-
-
-
Total
Fixed
Remuner-
ation
£’000
Total
Variable
Remuner-
ation
£’000
Total
2021
£’000
83
929
421
409
40
6
50
83
529
221
233
40
6
50
-
400
200
176
-
-
-
-
-
19
17
-
-
-
36
1,938
1,162
776
Salaries
and Fees
£’000
Benefits
£’000
Bonuses
£’000
Long Term
Incentive
Awards
£’000
Pension
£’000
Total
Fixed
Remuner-
ation
£’000
Total
Variable
Remuner-
ation
£’000
Total
2020
£’000
Executive Directors
Sir Michael Heller
A R Heller
G J Casey
R Grobler
Non–Executive Directors
C A Joll*
J A Sibbald*
J Wong (appointed 15 October
2020)
83
495
154
193
40
3
12
-
56
20
10
-
3
-
Total
980
88
*Members of the remuneration committee for the year ended 31 December 2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
16
-
-
-
83
551
185
219
40
6
12
83
551
185
219
40
6
12
27
1,096
1,096
-
-
-
-
-
-
-
-
32 Bisichi PLC
Governance Annual remuneration report
Summary of directors’ terms
Executive directors
Sir Michael Heller
A R Heller
G J Casey
R J Grobler
Non-executive directors
C A Joll
J A Sibbald
J Wong
Date of
contract
Unexpired
term
Notice
period
November 1972 Continuous
January 1994
Continuous
June 2010
April 2008
Continuous
Continuous
February 2001
Continuous
October 1988
October 2020
Continuous
Continuous
6 months
3 months
3 months
3 months
3 months
3 months
3 months
Pension schemes and incentives
Two (2020: Two) directors have benefits under money purchase pension schemes. Contributions in 2021 were £35,177 (2020:
£27,323), see table above. There are no additional benefits payable to any director in the event of early retirement.
Scheme interests awarded during the year
During the year no share options were granted under share option schemes.
Share option schemes
The company currently has only one Unapproved Share Option Scheme which is not subject to HM revenue and Customs (HMRC)
approval. The 2012 scheme was approved by the remuneration committee of the company on 28 September 2012.
Number of share options
Options
granted/
(Surren-
dered)
in
2021
31
December
2021
Exercisable
from
Exercisable
to
-
-
-
-
150,000
18/09/2015 17/09/2025
150,000 06/02/2018 06/02/2028
150,000
18/09/2015 17/09/2025
230,000 06/02/2018 06/02/2028
Option
price*
1 January
2021
87.01p
73.50p
87.01p
73.50p
150,000
150,000
150,000
230,000
The 2012 Scheme
A R Heller
A R Heller
G J Casey
G J Casey
*Middle market price at date of grant
No consideration is payable for the grant of options under the 2012 Unapproved Share Option Scheme. There are no performance
or service conditions attached to the 2012 Unapproved Share Option scheme. No part of the award was attributable to share price
appreciation and no discretion has been exercised as a result of share price appreciation or depreciation. During the year, there
were no changes to the exercise price or exercise period for the options.
Bisichi PLC
3333
Governance Annual remuneration report
Payments to past directors
No payments were made to past directors in the year ended 31 December 2021 (2020: £nil).
Payments for loss of office
No payments for loss of office were made in the year ended 31 December 2021 (2020: £nil).
Statement of Directors’ shareholding and share interest
Directors’ interests
The interests of the directors in the shares of the company, including family and trustee holdings where appropriate, were as follows:
Sir Michael Heller
A R Heller
R J Grobler
G J Casey
C A Joll
J A Sibbald
J Wong
Beneficial
Non-beneficial
31.12.2021
1.1.2021
31.12.2021
148,783
785,012
-
148,783
785,012
-
40,000
40,000
-
-
-
-
-
-
181,334
-
-
-
-
-
-
1.1.2021
181,334
-
-
-
-
-
-
There are no requirements or guidelines for any director to own shares in the Company.
The following section is
unaudited.
The following graph illustrates the
company’s performance compared
with a broad equity market index over
a ten year period. Performance is
measured by total shareholder return.
The directors have chosen the FTSE
All Share Mining index as a suitable
index for this comparison as it gives
an indication of performance against
a spread of quoted companies in the
same sector.
The middle market price of Bisichi
PLC ordinary shares at 31 December
2021 was 60p (2020: 109p). During
the year the share price ranged
between 45p and 120p.
)
d
e
s
a
b
e
r
(
e
c
i
r
P
e
r
a
h
S
160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
34 Bisichi PLC
– Bisichi Mining
– FTSE All Share
2012
2013
2014
2015
2016
2017
2018
2019
2020
Governance Annual remuneration report
Remuneration of the Managing Director over the last ten years
The table below demonstrates the remuneration of the holder of the office of
Managing Director for the last ten years for the period from 1 January 2012
to 31 December 2021.
Year
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Managing
Director
A R Heller
A R Heller
A R Heller
A R Heller
A R Heller
A R Heller
A R Heller
A R Heller
A R Heller
A R Heller
Managing
Director
Single total
figure of
remuneration
£’000
929
551
1,035
1,073
898
850
912
862
614
721
Annual
bonus
payout
against
maximum
opportunity*
%
27%
0%
34%
34%
25%
22%
22%
22%
N/A
N/A
Long-term
incentive
vesting rates
against
maximum
opportunity*
%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Bisichi PLC does not have a Chief Executive so the table includes the equivalent information for the Managing Director.
*There were no formal criteria or conditions to apply in determining the amount of bonus payable or the number of shares to be issued prior to 2014.
Percentage change in remuneration and Company performance
Director
Executive:
Sir Michael Heller
A R Heller 1
G J Casey 1
R Grobler 1
Non-Executive:
C A Joll
J A Sibbald
J Wong 2
Employee remuneration on a full-time equivalent basis:
Employees of the Company 1&3
Base Salary
% Change
2021 v 2020
Benefits
% Change
2021 v 2020
Bonuses
% Change
2021 v 2020
0%
0%
20%
6%
0%
0%
0%
8%
0%
(39%)
(10%)
3%
0%
0%
0%
(26%)
0%
N/A
N/A
N/A
0%
0%
0%
N/A
1 Bonus changes from 2021 to 2020 for AR Heller, G J Casey, R Grobler and Employees of the Company are disclosed as not applicable as no bonuses were
awarded to the various directors and employees in 2020.
2 Mr J Wong was appointed as a non-executive Director on 15 October 2020 so the annual change is apportioned.
3 The comparator group chosen is all UK based employees as the remuneration committee believe this provides the most accurate comparison of underlying
increases based on similar annual bonus performances utilised by the Group.
Bisichi PLC
3535
Governance Annual remuneration report
Relative importance of spend on pay
The total expenditure of the Group on remuneration to all employees (see Notes 29 and 9 to the financial statements) is shown below:
Employee remuneration
Distribution to shareholders (see note below)
2021
£’000
7,491
641
2020
£’000
5,890
-
The distribution to shareholders in the current year is subject to shareholder approval at next the Annual General Meeting.
Statement of implementation of remuneration policy
The remuneration policy was approved at the AGM on 9 July 2020. The policy took effect from the conclusion of the AGM and will
apply for 3 years unless changes are deemed necessary by the remuneration committee. The company may not make a
remuneration payment or payment for loss of office to a person who is, is to be, or has been a director of the company unless that
payment is consistent with the approved remuneration policy, or has otherwise been approved by a resolution of members. During
the year, there were no deviations from the procedure for the implementation of the remuneration policy as set out in the policy.
Consideration by the directors of matters relating to directors’ remuneration
The remuneration committee considered the executive directors remuneration and the board considered the non-executive
directors remuneration in the year ended 31 December 2021. The Company did not engage any consultants to provide advice or
services to materially assist the remuneration committee’s considerations.
Shareholder voting
At the Annual General Meeting on 22 June 2021, there was an advisory vote on the resolution to approve the remuneration report,
other than the part containing the remuneration policy. In addition, on 9 July 2020 there was a binding vote on the resolution to
approve the current remuneration policy the results of which are detailed below:
Resolution to approve the Remuneration Report (22 June 2021)
Resolution to approve the Remuneration Policy (9 July 2020)
% of votes
for
% of votes
against
No of votes
withheld
72.05%
69.87%
27.95%
30.13%
-
-
The remuneration committee and directors have considered the percentage of votes against the resolutions to approve the
remuneration report and policy. Reasons given by shareholders, as known by the directors, have been the level of remuneration
awarded and the general remuneration policy itself. The remuneration committee consider the remuneration policy and
performance conditions within remain appropriate and therefore no further action has been taken.
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 33 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.
36 Bisichi PLC
Governance Annual remuneration report
Remuneration policy table
The remuneration policy table below is an extract of the Group’s current remuneration policy on directors’ remuneration, which was
approved by a binding vote at the 2020 AGM. The approved policy took effect from 9 July 2020. A copy of the full policy can be
found at www.bisichi.co.uk.
Element Purpose
Policy
Operation
Considered by remuneration
committee on appointment.
Reviewed annually
Paid monthly in cash
Executive directors
Base
salary
To recognise:
Skills
Responsibility
Accountability
Experience
Value
Pension
To provide
competitive
retirement
benefits
Set at a level considered
appropriate to attract, retain
motivate and reward the
right individuals.
Company contribution
offered at up to 10% of
base salary as part of overall
remuneration package.
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
Opportunity and performance
conditions
No individual director will be awarded
a base salary in excess of £700,000
per annum.
No specific performance conditions
are attached to base salaries.
The contribution payable
by the company is included
in the
Company contribution offered at up to
10% of base salary as part of overall
remuneration package.
director’s contract of
employment.
No specific performance conditions
are attached to pension contributions.
Paid into money purchase
schemes
The committee retains
absolute 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 2021
is shown in the table on page 32.
Bisichi PLC
3737
Governance Annual remuneration report
Element Purpose
Policy
Operation
Opportunity and performance conditions
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
Share
Options
To provide executive
directors with a
long-term interest in
the company
Granted under
existing schemes
(see page 33)
Offered at
appropriate times
by the remuneration
committee
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.
There is no formal framework by which the company
assesses performance and performance conditions
and measures will be assessed on an annual basis
by the remuneration committee. In determining the
level of the bonus, the remuneration committee will
take into account internal and external factors and
circumstances that occur during the year under
review. The performance measures applied may
be financial, non-financial, corporate, divisional or
individual and in such proportion as the remuneration
committee considers appropriate to the prevailing
circumstances. The company does not consider,
given the company’s size, nature and stage of
operations that a formal framework is required.
Entitlement to share options is not subject to any
specific performance conditions.
Share options will be offered by the remuneration
committee as appropriate taking into account the
factors considered above in the decision making
process in determining remuneration policy.
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 one Share Option
Scheme (see page 33). 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, the options vest on issue and there
are no minimum hold periods for the resulting
shares issued on exercise of the option.
38 Bisichi PLC
Governance Annual remuneration report
Element Purpose
Policy
Operation
Opportunity and performance conditions
Non-executive directors
Base
salary
To recognise:
Skills
Experience
Value
Pension
Benefits
Share
Options
Reviewed annually No individual director will be awarded a base salary in excess of
£60,000 per annum.
No specific performance conditions are attached to base
salaries.
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.
No pension offered
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 30% of
his base salary.
No specific performance conditions are attached to contractual
benefits.
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)
No benefits offered
except
to one non-
executive director
who is eligible for
health
cover (see annual
remuneration
report
page 32)
Non-executive
directors do not
participate in
the share option
schemes
In order to ensure that shareholders have sufficient clarity over director remuneration levels, the company has, where possible,
specified a maximum that may be paid to a director in respect of each component of remuneration. The remuneration committee
consider the performance measures outlined in the table above to be appropriate measures of performance and that the KPI’s
chosen align the interests of the directors and shareholders.
Details of remuneration of other company employees can be found in Note 29 to the financial statements.
Bisichi PLC
3939
Governance
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.
•
•
•
•
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.
•
•
•
•
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;
•
•
•
•
•
•
40 Bisichi PLC
Meetings
The committee meets prior to the annual
audit with the external auditors to discuss
the audit plan and again prior to the
publication of the annual results. These
meetings are attended by the external
audit partner, managing director, director
of finance and company secretary. Prior to
bi-monthly board meetings the members
of the committee meet on an informal
basis to discuss any relevant matters
which may have arisen. Additional formal
meetings are held as necessary.
During the past year the committee:
•
•
met with the external auditors, and
discussed their reports to the Audit
Committee;
approved the publication of annual and
half-year financial results;
considered and approved the annual
review of internal controls;
decided that due to the size and nature
of operation there was not a current
need for an internal audit function;
agreed the independence of the
auditors and approved their fees for
both audit related and non-audit
services as set out in note 5 to the
financial statements.
•
•
•
•
•
•
•
•
Governance Audit committee report
Financial reporting
As part of its role, the Audit Committee
assessed the audit findings that were
considered most significant to the
financial statements, including those
areas requiring significant judgment and/
or estimation. When assessing the
identified financial reporting matters, the
committee assessed quantitative
materiality primarily by reference to profit
before tax. The Board also gave
consideration to:
•
•
the carrying value of the Group’s total
assets, given that the Group operates a
principally asset based business;
the value of revenues generated by the
Group, given the importance of coal
production and processing;
Adjusted EBITDA, given that it is a key
trading KPI, when determining
quantitative materiality; and
Going concern, given the potential
impact of macro-economic activity on
the Group’s operations.
•
•
•
•
•
•
External Auditors
Kreston Reeves LLP were appointed as
the statutory auditors during the year and
they have expressed their willingness to
continue in office and a resolution to
reappoint them will be proposed at the
forthcoming Annual General Meeting. 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. BDO South Africa Inc. acts
as the external auditor to the South
African companies, and the work of that
firm was reviewed by Kreston Reeves LLP
for the purpose of the Group audit.
Christopher Joll
Chairman – audit committee
12 Little Portland Street
London W1W8BJ
13 April 2022
The qualitative aspects of any financial
reporting matters identified during the
audit process were also considered when
assessing their materiality. Based on the
considerations set out above we have
considered quantitative errors individually
or in aggregate in excess of
approximately £300,000 to £350,000 to
be material.
Bisichi PLC
4141
Governance
Valuers’ certificates
To the directors of Bisichi PLC
In accordance with your instructions we have carried out a valuation of the freehold property interests held as at 31 December
2021 by the company as detailed in our Valuation Report dated 16 February 2022.
Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2021 of the interests owned
by the company was £10,525,000 being made up as follows:
Freehold
Leasehold
Leeds
16 February 2022
£’000
8,230
2,295
10,525
Carter Towler
Regulated by Royal Institute of Chartered Surveyors
42 Bisichi PLC
Governance
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
UK-adopted international accounting
standards in conformity with the
requirements of the Companies Act 2006.
The directors 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 UK-
adopted international accounting
standards in conformity with the
requirements of the Companies Act
2006 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
UK-adopted international accounting
standards in conformity with the
requirements of the Companies Act
2006 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 of the
principal risks and uncertainties that
they face.
•
•
Bisichi PLC
4343
Independent auditor report to the shareholders of Bisichi Plc
•
•
•
•
the financial statements have been
prepared in accordance with the
requirements of the Companies Act
2006
Governance
Independent auditor report to the shareholders of
Bisichi Plc for the year ended 31 December 2021
Opinion
We have audited the financial statements
of Bisichi PLC (the ‘parent company’) and
its subsidiaries (the ‘Group’) for the year
ended 31 December 2021 which comprise
the consolidated income statement,
consolidated statement of other
comprehensive income, consolidated and
company balance sheets, consolidated
and company statements of changes in
equity, consolidated cash flow statement
and notes to the financial statements,
including a summary of significant Group
accounting policies. The financial
reporting framework that has been
applied in their preparation of the group
financial statements is applicable law and
UK adopted international accounting
standards. The financial reporting
framework that has been applied in the
preparation of the parent company
financial statements is applicable law and
United Kingdom Accounting Standards,
including FRS 101 Reduced Disclosure
Framework (United Kingdom Generally
Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance
with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are
further described in the Auditor’s
responsibilities for the audit of the
financial statements section of our report.
We are independent of the Group in
accordance with the ethical requirements
that are relevant to our audit of the
financial statements in the UK, including
the FRC’s Ethical Standard as applied to
listed entities, and we have fulfilled our
other ethical responsibilities in
accordance with these requirements. We
believe that the audit evidence we have
obtained is sufficient and appropriate to
provide a basis for our opinion.
Evidence obtained that management
have undertaken a formal going concern
assessment, including sensitivity
analysis on cash flow forecasts, clear
consideration of external factors
including the COVID pandemic and the
war in Ukraine and the potential liquidity
impact of these on cash balances
including available facilities.
Analysed the financial strength of the
business at the year end date and
considered key trends in balance sheet
strength and business performance
over the last three years.
Confirmations gained that operation of
the business, including mine production
and sale at Black Wattle Colliery have
not been disrupted in the period by any
external or internal factors.
Testing the mechanical integrity of
forecast model by checking the
accuracy and completeness of the
model, including challenging the
appropriateness of estimates and
assumptions with reference to empirical
data and external evidence.
•
•
•
•
•
•
In our opinion, the financial statements:
•
•
•
•
•
•
the financial statements give a true and
fair view of the state of the Group’s and
of the parent company’s affairs as at 31
December 2021 and of the Group’s
profit for the year then ended;
the group financial statements have
been properly prepared in accordance
with UK adopted international
accounting standards;
the parent company financial
statements have been properly
prepared in accordance with United
Kingdom Generally Accepted
Accounting Practice; and
44 Bisichi PLC
Conclusions relating to going
concern
In auditing the financial statements, we
have concluded that the Directors’ use of
the going concern basis of accounting in
the preparation of the financial
statements is appropriate. Our evaluation
of the directors assessment of the Group
and Parent companies ability to continue
to adopt the going concern basis of
accounting including the following:
•
•
Gained an understanding of the
systems and controls around
managements’ going concern
assessment, including for the
preparation and review process for
forecasts and budgets.
•
•
•
•
•
•
Based on our above assessment we
performed our own sensitivity analysis
in respect of the key assumptions
underpinning the forecasts.
We performed stress-testing analysis on
the core cash generating units of the
business to confirm cash inflow levels
needed to maintain minimal liquidity
required to meet liabilities as they fall due.
We considered post year end
performance of the business,
comparing this to budget as well as
considering the development of key
liquidity ratios in the business.
Governance Independent auditor report to the shareholders of Bisichi Plc
An overview of the scope of
our audit
As part of designing our audit, we
determined materiality and assessed the
risks of material misstatement in the
financial statements. In particular, we
looked at where the directors made
subjective judgements, for example in
respect of significant accounting
estimates that involved making
assumptions and considering future
events that are inherently uncertain. As in
all of our audits we also addressed the
risk of management override of internal
controls, including evaluating whether
there was evidence of bias by the
directors that represented a risk of
material misstatement due to fraud.
• • The group’s banking facility
documentation was reviewed to ensure
that any covenants in place have not
been breached.
• • We reviewed the adequacy and
completeness of the disclosure
included within the financial statements
in respect of going concern.
Based on the work we have performed,
we have not identified any material
uncertainties relating to events or
conditions that, individually or collectively,
may cast significant doubt on the entity’s
ability to continue as a going concern for
a period of at least twelve months from
when the financial statements are
authorised for issue.
In relation to the Group and Parent
Company’s reporting on how they have
applied the UK Corporate Governance
Code, we have nothing material to add or
draw attention to in relation to the
directors’ statement in the financial
statements about whether the directors
considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the
responsibilities of the directors with
respect to going concern are described in
the relevant sections of this report.
However, because not all future events or
conditions can be predicted, this
statement is not a guarantee as to the
Group’s and Parent Company’s ability to
continue as a going concern.
Corporate Governance
Statement
The Listing Rules require us to review the
directors’ statement in relation to going
concern, longer-term viability and that
part of the Corporate Governance
Statement relating to the Group’s and
Parent Company’s compliance with the
provisions of the UK Corporate
Governance Code specified for our
review.
Based on the work undertaken as part of
our audit, we have concluded that each of
the following elements of the Corporate
Governance Statement is materially
consistent with the financial statements
or our knowledge obtained during the audit:
• • Directors’ statement with regards to the
appropriateness of adopting the going
concern basis of accounting and any
material uncertainties identified set out
on page 30;
• • Directors’ explanation as to its
assessment of the company’s prospects,
the period this assessment covers and
why the period is appropriate set out on
page 22;
• • Board’s confirmation that it has carried
out a robust assessment of the emerging
and principal risks set out on pages 11
to 15;
• • The section of the Annual Report that
describes the review of effectiveness of
risk management and internal control
systems set out on page 28 and
• • The section describing the work of the
Risk and Audit Committee set out on
page 27.
Bisichi PLC
4545
Governance Independent auditor report to the shareholders of Bisichi Plc
Our application of materiality
Materiality
£359,600
£355,000
Group financial statements
Parent company financial statements
Basis for determining
materiality
Rationale for benchmark
applied
2% of net assets
Capped below group materiality
The group's principal activity of that of
an exploration and mining operation and
investment property holdings. To this end the
business is highly asset focused. Therefore a
benchmark for materiality of the NA's of the
group is considered to be appropriate.
The parent company materiality has been
capped at below group materiality. This was to
address the aggregation risk in the group audit.
Performance materiality £269,700
£269,600
Basis for determining
performance materiality
Rationale for
performance materiality
applied
75% of materiality
Capped below group materiality
On the basis of our risk assessments, together
with our assessment of the Group’s overall
control environment, our judgement was
that performance materiality was 75% of
our planning materiality. In assessing the
appropriate level, we consider the nature, the
number and impact of the audit differences
identified in the previous year’s audit.
The parent company performance materiality
has been capped at below group performance
materiality. This was to address the aggregation
risk in the group audit.
Triviality threshold
£17,980
£17,975
Basis for determining
triviality threshold
5% of materiality
Capped below group materiality
We reported all audit differences found in
excess of our triviality threshold to the
directors and the management board. For
each Group company within the scope of
our Group audit, we allocated a
materiality that is less than our overall
Group materiality. The range of
materiality allocated across each Group
company was between £227,000 and
£23,300. The scope of our audit was
influenced by our application of
materiality as we set certain quantitative
thresholds for performance materiality
and use these thresholds as a
consideration tool to help to determine
the scope of our audit and the nature,
timing and extent of our audit procedures
on the individual financial statement line
items and disclosures and in evaluating
the effect of misstatements, both
individually and in aggregate on the
financial statements as a whole.
We determined component materiality for
the parent company to be capped at
below group materiality. This was also the
case for group subsidiaries registered
outside of the UK. For the UK-registered
trading subsidiaries, 4% of that
subsidiary’s net assets was used.
Performance materiality was set in the
range of 70-80% of component
materiality.
46 Bisichi PLC
Governance Independent auditor report to the shareholders of Bisichi Plc
Coverage overview
Totals at 31 December
2021:
Full statutory audit
(Kreston Reeves and BDO)
Group revenue
£50,519,592
Group profit/(loss) before tax
£2,501,171
Group net assets
£17,835,066
£50,519,592 (100%)
£2,377,426 (95%)
£17,092,472 (96%)
Limited procedures
£Nil
£123,745 (5%)
£742,594 (4%)
We tailored the scope of our audit to
ensure that we performed sufficient
work to be able to give an opinion on
the financial statements as a whole,
taking into account the structure of the
Group and the parent company, the
accounting processes and controls,
and the industry in which they operate.
Our scoping considerations for the
Group audit were based both on
financial information and risk. As noted
above limited assurance audit work –
which is to say the audit of balances
and transactions material at a group
level – was only applied in respect of a
small element of the group. The below
table summarises for the parent
company, and its subsidiaries, in terms
of the level of assurance gained:
Group component
Bisichi PLC
Mineral Products Limited
Bisichi (Properties) Limited
Bisichi Northampton Limited
Black Wattle Colliery (Pty) Limited
Sisonke Coal Processing (Pty) Limited
Black Wattle Klipfontein (Pty) Limited
Bisichi Coal Mining (Pty) Limited
All other group undertakings
Level of assurance
Full statutory audit (Kreston Reeves)
Full statutory audit (Kreston Reeves)
Full statutory audit (Kreston Reeves)
Full statutory audit (Kreston Reeves)
Full statutory audit (BDO)
Full statutory audit (BDO)
Full statutory audit (BDO)
Full statutory audit (BDO)
Limited assurance (Kreston Reeves)
Bisichi PLC
4747
Governance Independent auditor report to the shareholders of Bisichi Plc
Key audit matters
Key audit matters are those matters that,
in our professional judgment, were of
most significance in our audit of the
financial statements of the current period
and include the most significant assessed
risks of material misstatement (whether
or not due to fraud) that we identified,
including those which had the greatest
effect on: the overall audit strategy, the
allocation of resources in the audit; and
directing the efforts of the engagement
team. These matters were addressed in
the context of our audit of the financial
statements as a whole, and in forming our
opinion thereon, and we do not provide a
separate opinion on these matters. This is
not a complete list of all risks identified by
our audit.
Revenue recognition: £50,519,592
Significance and nature of key risk
Revenue is a key performance indicator for users in
assessing the group’s financial statements. Revenue
generated has a significant impact on cash inflows and
profit before tax for the group. As such revenue is a
key determinant in profitability and the group’s ability to
generate cash.
Revenue comprises two key revenue streams: the sale of
coal and property rental income.
Coal revenue is recognised when the customer has a legally
binding obligation to settle under the terms of the contract.
Rental income is recognised in the Group income statement
on a straight-line basis over the term of the lease.
How our audit addressed the key risk
Sales of coal and coal processing services in the period were
tested from the trigger point of the sale to the point of recognition
in the financial statements, corroborating this to contract sales or
service terms and the recognition stages detailed in IFRS 15.
Rental income revenue was recalculated based on the terms
included in signed lease agreements. Again, the recognition
stages detailed the relevant standards were carefully considered
to ensure revenue recognised was in line with these. This
substantive testing covered 100% of total property rental
revenues.
Revenue streams were further analytically reviewed via
comparison to our expectations. Expectations were based on
a combination of prior financial data/budgets and our own
assessments based on our knowledge gained of the business.
Cut-off of revenue was reviewed by analysing sales recorded
during the period just before and after the financial year end and
determining if the recognition applied was appropriate.
Walkthrough testing was performed to ensure that key systems
and controls in place around the revenue cycle operated as
designed.
The accuracy of revenue disclosures in the accounts were
confirmed to be consistent with the revenue cycle observed and
audited. The completeness of these disclosures was confirmed by
reference to the full disclosure requirements as detailed in IFRS
15.
Key observations communicated to the Risk and Audit Committee
We have no concerns over the material accuracy of revenue recognised in the financial statements.
48 Bisichi PLC
Governance Independent auditor report to the shareholders of Bisichi Plc
Valuation/impairment of investment properties: £10,700,134
Significance and nature of key risk
Investment properties comprise freehold and long leasehold
land and buildings. Investment properties are carried at fair
value in accordance with IAS 40.
How our audit addressed the key risk
Appropriate classification of investment properties under IAS 40
was considered, especially in relation to long leasehold land and
buildings.
Investment properties are revalued annually by professional
external surveyors and included in the balance sheet at their
fair value. Gains or losses arising from changes in the fair
values of assets are recognised in the consolidated income
statement in the period to which they relate. In accordance
with IAS 40, investment properties are not depreciated.
The fair value of the head leases is the net present value of
the current head rent payable on leasehold properties until
the expiry of the lease.
External valuation reports were obtained and vouched to stated
fair values. The competence and independence of the valuation
experts was carefully considered to ensure that the reports they
produce can be relied upon.
The key assumptions made within these reports were reviewed
and considered for reasonableness, including rental yield
analysis. We have further performed our own separate impairment
considerations to consider if events/factors in place at year end
present material impairment indicators.
Key observations communicated to the Risk and Audit Committee
We have no concerns over the material accuracy of investment property values recognised in the financial statements.
Valuation/impairment of mining reserves and development: £8,896,000
Significance and nature of key risk
The purpose of mine development is to establish secure
working conditions and infrastructure to allow the safe and
efficient extraction of recoverable reserves.
How our audit addressed the key risk
The accounting requirements of IFRS 6 and IAS 16 were
considered to ensure capitalisation of costs to mine development
under IAS 16 was appropriate.
Depreciation on mine development costs is not charged
until production commences or the assets are put to
use. On commencement of full commercial production,
depreciation is charged over the life of the associated mine
reserves extractable using the asset on a unit of production
basis.
The unit of production calculation is based on tonnes
mined as a ratio to proven and probable reserves
and also includes future forecast capital expenditure.
The cost recognised includes the recognition of any
decommissioning assets related to mine development.
In considering impairment indicators, as governed by IAS 36,
the life of mine assessment was obtained. All significant input
variables were considered and stress-tested to assess headroom
between modelling and the value of mine development.
Consideration was given to the competence and independence of
the technical expert involved with the production of historic technical
reports on which the life of mine assessment is partially built.
Depreciation of mine development was recalculated based on
the unit of production basis to ensure accurately recorded. This
basis was also considered for reasonableness by reference to the
accounting policies of industry peers.
The accuracy and appropriateness of mine development
disclosures in the accounts were confirmed to be consistent with
the mine development accounting cycle observed and audited.
Key observations communicated to the Risk and Audit Committee
We have no concerns over the material accuracy of mining reserves and development values recognised in the financial
statements.
Bisichi PLC
4949
Governance Independent auditor report to the shareholders of Bisichi Plc
Other information
The other information comprises the
information included in the annual report
other than the financial statements and
our auditor’s report thereon. The directors
are responsible for the other information
contained within the annual report. Our
opinion on the financial statements does
not cover the other information and, except
to the extent otherwise explicitly stated in
our report, we do not express any form of
assurance conclusion thereon. Our
responsibility is to read the other information
and, in doing so, consider whether the
other information is materially inconsistent
with the financial statements or our
knowledge obtained in the course of the
audit, or otherwise appears to be materially
misstated. If we identify such material
inconsistencies or apparent material
misstatements, we are required to
determine whether this gives rise to a
material misstatement in the financial
statements themselves. If, based on the
work we have performed, we conclude
that there is a material misstatement of
this other information, we are required to
report that fact. We have nothing to report
in this regard.
Our opinion on the
remuneration report
Kreston Reeves has audited the Annual
remuneration report set out on pages 32
to 39 of the Annual Report for the year
ended 31 December 2021. The directors
of the Company are responsible for the
preparation and presentation of the
Remuneration Report in accordance with
the Companies Act 2006. Kreston Reeves’
responsibility is to express an opinion on
the Remuneration Report, based on our
audit conducted in accordance with
International Accounting Standards. In
Kreston Reeves’ opinion, the Remuneration
Report of the Group for the year, complies
with the requirements of the Companies
Act 2006.
50 Bisichi PLC
Our consideration of climate
change related risks
The financial impacts on the Group of
climate change and the transition to a low
carbon economy (“climate change”) were
considered in our audit where they have
the potential to directly or indirectly
impact key judgements and estimates
within the financial statements.
The Group continues to develop its
assessment of the potential impacts of
climate change. Climate risks have the
potential to materially impact the key
judgements and estimates within the
financial report. Our audit considered
those risks that could be material to the
key judgement and estimates in the
assessment of the carrying value of
non-current assets and closure and
rehabilitation provisions.
The key judgements and estimates
included in the financial statements
incorporate actions and strategies, to the
extent they have been approved and can
be reliably estimated in accordance with
the Group’s accounting policies.
Accordingly, our key audit matters
address how we have assessed the
Group’s climate related assumptions to
the extent they impact each key audit
matter. Our audit procedures were
performed with the involvement of our
climate change and valuation specialists.
Opinions on other matters
prescribed by the Companies
Act 2006
In our opinion, based on the work
undertaken in the course of the audit:
•• the information given in the strategic
report and the directors’ report for the
financial year for which the financial
statements are prepared is consistent
with the financial statements; and
•• the strategic report and the 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 our knowledge and
understanding of the Group and parent
company and its environment obtained in
the course of the audit, we have not
identified material misstatements in the
strategic report or the directors’ report.
We have nothing to report in respect of
the following matters in relation to which
the Companies Act 2006 requires us to
report to you if, in our opinion:
•• 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 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
Responsibilities of directors
As explained more fully in the directors’
responsibilities statement (set out on
page 43), the directors are responsible
for the preparation of the financial
statements and for being satisfied that
they give a true and fair view, and for
such internal control as the directors
determine is necessary to enable the
preparation of financial statements that
are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the
directors are responsible for assessing
the Group’s and parent company’s ability
to continue as a going concern,
disclosing, as applicable, matters related
to going concern and using the going
concern basis of accounting unless the
directors either intend to liquidate the
Group or parent company or to cease
Governance Independent auditor report to the shareholders of Bisichi Plc
operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for
the audit of the financial
statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion.
Reasonable assurance is a high level of
assurance but is not a guarantee that an
audit conducted in accordance with ISAs
(UK) will always detect a material
misstatement when it exists.
Misstatements can arise from fraud or
error and are considered material if,
individually or in the aggregate, they
could reasonably be expected to
influence the economic decisions of users
taken on the basis of these financial
statements.
Capability of the audit in detecting
irregularities, including fraud
Based on our understanding of the group
and industry, and through discussion with
the directors and other management (as
required by auditing standards), we
identified that the principal risks of
non-compliance with laws and regulations
related to health and safety, anti-bribery
and employment law. We considered the
extent to which non-compliance might
have a material effect on the financial
statements. We also considered those
laws and regulations that have a direct
impact on the preparation of the financial
statements such as the Companies Act
2006. We communicated identified laws
and regulations throughout our team and
remained alert to any indications of
non-compliance throughout the audit. We
evaluated management’s incentives and
opportunities for fraudulent manipulation
of the financial statements (including the
risk of override of controls), and
determined that the principal risks were
related to posting inappropriate journal
entries to increase revenue or reduce
expenditure, management bias in
accounting estimates and judgemental
areas of the financial statements such as
the valuation of investment properties
and mining reserve and development
asset. Audit procedures performed by the
group engagement team and component
auditors included:
•• We obtained an understanding of the
legal and regulatory frameworks that
are applicable to the Group and
determined that the most significant
are those that relate to the reporting
framework and the relevant tax
compliance regulations in the
jurisdictions in which Bisichi PLC
operates. In addition, we concluded
that there are certain significant laws
and regulations that may have an effect
on the determination of the amounts
and disclosures in the financial
statements, mainly relating to health
and safety, employee matters, bribery
and corruption practices, environmental
and certain aspects of company
legislation recognising the regulated
nature of the Group’s mining and oil
and gas activities and its legal form.
•• Detailed discussions were held with
management to identify any known or
suspected instances of non-
compliance with laws and regulations.
•• Identifying and assessing the design
effectiveness of controls that
management has in place to prevent
and detect fraud.
•• Challenging assumptions and
judgements made by management in
its significant accounting estimates,
including assessing the capabilities of
the property valuers and discussing
with the valuers how their valuations
were calculated and the data and
assumptions they have used to
calculate these.
•• Performing analytical procedures to
identify any unusual or unexpected
relationships, including related party
transactions, that may indicate risks of
material misstatement due to fraud.
•• Confirmation of related parties with
management, and review of
transactions throughout the period to
identify any previously undisclosed
transactions with related parties
outside the normal course of business.
•• Reading minutes of meetings of those
charged with governance, reviewing
internal audit reports and reviewing
correspondence with relevant tax and
regulatory authorities.
•• Review of significant and unusual
transactions and evaluation of the
underlying financial rationale
supporting the transactions.
•• Identifying and testing journal entries,
in particular any manual entries made
at the year end for financial statement
preparation.
•• We ensured our global audit team
(including Kreston Reeves and BDO)
has deep industry experience through
working for many years on relevant
audits, including experience of mining
and investment property management.
Our audit planning included considering
external market factors, for example
geopolitical risk, the potential impact of
climate change, commodity price risk
and major trends in the industry.
Because of the inherent limitations of an
audit, there is a risk that we will not detect
all irregularities, including those leading
to a material misstatement in the financial
statements or non-compliance with
regulation. This risk increases the more
that compliance with a law or regulation is
removed from the events and
transactions reflected in the financial
statements, as we will be less likely to
become aware of instances of non-
compliance.
Bisichi PLC
5151
Governance Independent auditor report to the shareholders of Bisichi Plc
Use of our report
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 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.
Anne Dwyer BSc(Hons) FCA (Senior
Statutory Auditor)
For and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
London
Date: 19 April 2022
As part of an audit in accordance with
ISAs (UK), we exercise professional
judgment and maintain professional
scepticism throughout the audit. We also:
report. However, future events or
conditions may cause the Group or the
parent company to cease to continue
as a going concern.
•• Identify and assess the risks of material
•• Evaluate the overall presentation,
misstatement of the financial
statements, whether due to fraud or
error, design and perform audit
procedures responsive to those risks,
and obtain audit evidence that is
sufficient and appropriate to provide a
basis for our opinion. The risk of not
detecting a material misstatement
resulting from fraud is higher than for
one resulting from error, as fraud may
involve collusion, forgery, intentional
omissions, misrepresentations, or the
override of internal control.
•• Obtain an understanding of internal
control relevant to the audit in order to
design audit procedures that are
appropriate in the circumstances, but
not for the purpose of expressing an
opinion on the effectiveness of the
Group’s internal control.
•• Evaluate the appropriateness of
accounting policies used and the
reasonableness of accounting
estimates and related disclosures made
by the directors.
•• Conclude on the appropriateness of the
directors’ use of the going concern
basis of accounting and, based on the
audit evidence obtained, whether a
material uncertainty exists related to
events or conditions that may cast
significant doubt on the Group’s or the
parent company’s ability to continue as
a going concern. If we conclude that a
material uncertainty exists, we are
required to draw attention in our
auditor’s report to the related
disclosures in the financial statements
or, if such disclosures are inadequate,
to modify our opinion. Our conclusions
are based on the audit evidence
obtained up to the date of our auditor’s
structure and content of the financial
statements, including the disclosures,
and whether the financial statements
represent the underlying transactions
and events in a manner that achieves
fair presentation.
•• Obtain sufficient appropriate audit
evidence regarding the financial
information of the entities or business
activities within the Group to express
an opinion on the consolidated financial
statements. We are responsible for the
direction, supervision and performance
of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged
with governance regarding, among other
matters, the planned scope and timing of
the audit and significant audit findings,
including any significant deficiencies in
internal control that we identify during
our audit.
Other matters which we are
required to address
We were appointed by the audit committee
on 19 November 2021 to audit the financial
statements for the year ending 31
December 2021. Our total uninterrupted
period of engagement is 1 year, covering
the year ended 31 December 2021. The
non-audit services prohibited by the FRC’s
Ethical Standard were not provided to the
group or the parent company and we
remain independent of the group and the
parent company in conducting our audit.
During the period under review, agreed
upon procedures were completed in
respect of a number of the group’s service
charge accounts. Our audit opinion is
consistent with the additional report to the
audit committee.
52 Bisichi PLC
Financial statements
54 Consolidated income statement
55 Consolidated statement of other comprehensive income
56 Consolidated balance sheet
58 Consolidated statement of changes in shareholders’ equity
59 Consolidated cash flow statement
60 Group accounting policies
68 Notes to the financial statements
94 Company balance sheet
95 Company statement of changes in equity
96 Company accounting policies
Bisichi PLC
53
Financial statements
Financial statements
Consolidated income statement
for the year ended 31 December 2021
Group revenue
Operating costs
Operating profit/(loss) before
depreciation, fair value adjustments
and exchange movements
Depreciation
Operating profit/(loss) before fair value
adjustments and exchange movements
Exchange (losses)/gains
Increase/(Decrease) in value of
investment properties
Gain on investments held at fair value
Operating profit/(loss)
Share of loss in joint ventures
Profit/(Loss) before interest and
taxation
Interest receivable
Interest payable
Profit/(Loss) before tax
Taxation
Profit/(Loss) for the year
Attributable to:
Equity holders of the company
Non-controlling interest
Profit/(Loss) for the year
Profit/(Loss) per share – basic
Profit/(Loss) per share – diluted
Notes
2
3
3
1
4
1
13
7
5
8
27
10
10
2021
Revaluations
and
impairment
£’000
-
-
-
-
-
-
255
812
1,067
(125)
942
-
-
942
(342)
600
600
-
600
2021
Trading
£’000
50,520
(45,492)
5,028
(2,571)
2,457
(121)
-
-
2,336
-
2,336
22
(799)
1,559
(453)
1,106
891
215
1,106
2021
Total
£’000
50,520
(45,492)
5,028
2020
Trading
£’000
29,805
(30,916)
(1,111)
(2,571)
2,457
(2,193)
(3,304)
39
-
-
(3,265)
-
(3,265)
25
(641)
(3,881)
1,225
(2,656)
(2,216)
(440)
(2,656)
(121)
255
812
3,403
(125)
3,278
22
(799)
2,501
(795)
1,706
1,491
215
1,706
13.96p
13.94p
2020
Revaluations
and
impairment
£’000
-
-
-
-
-
-
2020
Total
£’000
29,805
(30,916)
(1,111)
(2,193)
(3,304)
39
(1,295)
(1,295)
67
(1,228)
(87)
(1,315)
-
-
(1,315)
177
(1,138)
(1,138)
-
(1,138)
67
(4,493)
(87)
(4,580)
25
(641)
(5,196)
1,402
(3,794)
(3,354)
(440)
(3,794)
(31.42p)
(31.42p)
Trading gains and losses reflect all the trading activity on mining and property operations and realised gains. Revaluation gains
and losses reflects the revaluation of investment properties and other assets within the Group and any proportion of unrealised
gains and losses within Joint Ventures. The total column represents the consolidated income statement presented in accordance
with IAS 1.
54 Bisichi PLC
Financial statements
Consolidated statement of other
comprehensive income
for the year ended 31 December 2021
Profit/(Loss) for the year
Other comprehensive income/(expense):
Items that may be subsequently recycled to the income statement:
Exchange differences on translation of foreign operations
Other comprehensive income for the year net of tax
Total comprehensive income for the year net of tax
Attributable to:
Equity shareholders
Non-controlling interest
2021
£’000
1,706
(60)
(60)
1,646
1,439
207
1,646
2020
£’000
(3,794)
(467)
(467)
(4,261)
(3,752)
(509)
(4,261)
Bisichi PLC 55
Financial statements
Consolidated balance sheet
at 31 December 2021
Assets
Non-current assets
Investment properties
Mining reserves, plant and equipment
Investments in joint ventures accounted for using equity method
Other investments at fair value through profit and loss (“FVPL”)
Total non-current assets
Current assets
Inventories
Trade and other receivables
Investments in listed securities held at FVPL
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Borrowings
Trade and other payables
Current tax liabilities
Total current liabilities
Non-current liabilities
Borrowings
Provision for rehabilitation
Lease liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
56 Bisichi PLC
Notes
2021
£’000
2020
£’000
11
12
13
13
16
17
18
20
19
20
21
31
23
10,700
9,065
1,130
3,631
24,526
1,253
8,626
685
3,018
13,582
38,108
(2,666)
(10,743)
(726)
(14,135)
(3,853)
(1,390)
(389)
(506)
(6,138)
(20,273)
17,835
10,471
10,174
1,255
1,746
23,646
3,445
6,958
833
3,768
15,004
38,650
(5,110)
(10,856)
(209)
(16,175)
(3,943)
(1,442)
(427)
(474)
(6,286)
(22,461)
16,189
Financial statements Consolidated balance sheet
Equity
Share capital
Share premium account
Translation reserve
Other reserves
Retained earnings
Total equity attributable to equity shareholders
Non-controlling interest
Total equity
Notes
24
25
27
2021
£’000
1,068
258
2020
£’000
1,068
258
(2,540)
(2,488)
707
18,019
17,512
323
17,835
707
16,528
16,073
116
16,189
These financial statements were approved and authorised for issue by the board of directors on 13 April 2022 and signed on its
behalf by:
A R Heller
Director
G J Casey
Director
Company Registration No. 112155
Bisichi PLC
5757
Financial statements
Consolidated statement of changes
in shareholders’ equity
for the year ended 31 December 2021
Balance at 1 January 2020
Loss for the year
Other comprehensive expense
Total comprehensive expense
for the year
Dividend (note 9)
Share
capital
£’000
1,068
-
-
-
-
Share
Premium
£’000
Transla-
tion
reserves
£’000
Other
reserves
£’000
Retained
earnings
£’000
Total
£’000
258
(2,090)
707
19,989
19,932
Non-
controlling
interest
£’000
625
-
-
-
-
-
(398)
(398)
-
-
-
-
-
(3,354)
-
(3,354)
(3,354)
(398)
(3,752)
(107)
(107)
Balance at 1 January 2021
1,068
258
(2,488)
707
16,528
16,073
Profit for the year
Other comprehensive income
Total comprehensive income for
the year
Dividend (note 9)
-
-
-
-
-
-
-
-
-
(52)
(52)
-
-
-
-
-
1,491
-
1,491
1,491
(52)
1,439
-
-
Balance at 31 December 2021
1,068
258
(2,540)
707
18,019
17,512
58 Bisichi PLC
Total
equity
£’000
20,557
(3,794)
(467)
(4,261)
(107)
16,189
1,706
(60)
1,646
-
17,835
(440)
(69)
(509)
-
116
215
(8)
207
-
323
Financial statements
Consolidated cash flow statement
for the year ended 31 December 2021
Cash flows from operating activities
Operating profit/Loss
Adjustments for:
Depreciation
Unrealised (gain)/loss on investment properties
Gain on investments held at FVPL
Exchange adjustments
Cash flow before working capital
Change in inventories
Change in trade and other receivables
Change in trade and other payables
Cash generated from operations
Interest received
Interest paid
Income tax paid
Cash flow from operating activities
Cash flows from investing activities
Acquisition of reserves, property, motor vehicles, plant and equipment
Investment in joint venture
Disposal of other investments
Acquisition of other investments
Cash flow from investing activities
Cash flows from financing activities
Borrowings drawn
Borrowings and lease liabilities repaid
Equity dividends paid
Minority dividends paid
Cash flow from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 January
Exchange adjustment
Cash and cash equivalents at 31 December
Cash and cash equivalents at 31 December comprise:
Cash and cash equivalents as presented in the balance sheet
Bank overdrafts (secured)
Year ended
31 December
2021
£’000
Year ended
31 December
2020
£’000
3,403
(4,493)
2,571
(255)
(812)
121
5,028
2,105
(1,900)
192
5,425
22
(799)
(216)
4,432
(1,781)
-
705
(1,630)
(2,706)
46
(317)
-
-
(271)
1,455
(1,078)
105
482
3,018
(2,536)
482
2,193
1,295
(67)
(39)
(1,111)
(1,127)
122
3,379
1,263
25
(641)
(198)
449
(3,186)
-
253
(1,359)
(4,292)
61
(239)
(107)
-
(285)
(4,128)
2,878
172
(1,078)
3,768
(4,846)
(1,078)
Bisichi PLC
5959
Financial statements
Group accounting policies
for the year ended 31 December 2021
Basis of accounting
The results for the year ended 31
December 2021 have been prepared in
accordance with UK-adopted
international accounting standards in
conformity with the requirements of the
Companies Act 2006. In applying the
Group’s accounting policies and
assessing areas of judgment and
estimation materiality is applied as
detailed on page 40 of the Audit
Committee Report. The principal
accounting policies are described below:
The Group financial statements are
presented in £ sterling and all values are
rounded to the nearest thousand pounds
(£000) except when otherwise stated.
The functional currency for each entity in
the Group, and for joint arrangements
and associates, is the currency of the
country in which the entity has been
incorporated. Details of which country
each entity has been incorporated can be
found in Note 15 for subsidiaries and Note
14 for joint arrangements and associates.
The exchange rates used in the accounts
were as follows:
Year-end rate
Annual average
£1 Sterling: Rand
2021
2020
£1 Sterling: Dollar
2021
2020
20.7672
20.4060
20.0145
21.0936
1.3706
1.3685
1.3663
1.2833
Going concern
The Group has prepared cash flow
forecasts which demonstrate that the
Group has sufficient resources to meet
its liabilities as they fall due for at least
the next 12 months from date of signing.
In South Africa, a structured trade finance
facility with Absa Bank Limited for
R85million is held by Sisonke Coal
Processing (Pty) Limited, a 100%
subsidiary of Black Wattle Colliery (Pty)
Limited. This facility comprises of a
R85million revolving facility to cover the
working capital requirements of the
Group’s South African operations. The
facility is renewable annually at 25
January and is secured against inventory,
debtors and cash that are held in the
Group’s South African operations. The
Directors do not foresee any reason why
the facility will not continue to be renewed
at the next renewal date, in line with prior
periods and based on their banking
relationships.
The directors expect that the coal market
conditions experienced by its South
African coal mining and processing
operations in 2021 will be similar going
into 2022. The directors therefore have a
reasonable expectation that the mine will
achieve positive levels of cash generation
for the Group in 2022. As a
consequence, the directors believe that
the Group is well placed to manage its
South African business risks successfully.
In the UK, forecasts demonstrate that the
Group has sufficient resources to meet
its liabilities as they fall due for at least
the next 12 months, from the approval of
the financial statements, including those
related to the Group’s UK Loan facility
outlined below.
The Group holds a 5 year term facility of
£3.9m with Julian Hodge Bank Limited at
an initial LTV of 40%. The loan is secured
against the company’s UK retail property
portfolio. The amount repayable on the
loan at year end was £3.9million. The
debt package has a five year term and is
repayable at the end of the term in
December 2024. In the last quarter of
2021 the base interest rate on the loan
changed from LIBOR to the Bank of
England base rate. The overall interest
cost of the loan is 4.00% above the Bank
of England base rate. All covenants on
the loan were met during the year and the
directors have a reasonable expectation
that the Group has adequate financial
resources at short notice, including cash
and listed equity investments, to ensure
the existing facility’s covenants are met
on an ongoing basis.
Dragon Retail Properties Limited
(“Dragon”), the Group’s 50% owned joint
venture, holds a Santander bank loan of
£1.2million secured against its investment
property, see note 14. The bank loan of
£1.164million is secured by way of a first
charge on specific freehold property at a
value of £2.08 million.
60 Bisichi PLC
Financial statements Group accounting policies
The interest cost of the loan is 2.75 per
cent above the bank’s base rate. A
refinancing of this loan is currently
underway. The loan originally expired in
October 2020 but has been extended to
April 2022, and the lender has offered to
extend this further if required. Dragon has
agreed terms with a new lender to
refinance this loan in full and are
expecting to complete this shortly.
Subsequent to year end in the first
quarter of 2022 geo-political events in
Ukraine resulted in higher global energy
prices. Although the final outcome of the
events in Ukraine is uncertain, the
Directors at present do not foresee the
events having a significant negative
impact on the Group’s UK and South
African operations ability to remain in
operation for the foreseeable future.
As a result of the banking facilities held
as well as the acceptable levels of cash
expected to be held by the Group over
the next 12 months, the Directors believe
that the Group has adequate resources
to continue in operational existence for
the foreseeable future and that the Group
is well placed to manage its business
risks. Thus they continue to adopt the
going concern basis of accounting in
preparing the annual financial
statements.
International Financial Reporting
Standards (IFRS)
The Group has adopted all of the new
and revised Standards and Interpretations
issued by the International Accounting
Standards Board (“IASB”) that are
relevant to its operations and effective for
accounting periods beginning 1 January
2021.
A number of new standards, amendments
to standards and interpretations have
been issued but are not yet effective for
the Group. The Group has not adopted
any Standards or Interpretations in
advance of the required implementation
dates. The application of these new
standards, amendments and
interpretations are not expected to have a
significant impact on the Group’s income
statement or balance sheet.
We are committed to improving disclosure
and transparency and will continue to work
with our different stakeholders to ensure
they understand the detail of these
accounting changes. We continue to remain
committed to a robust financial policy.
Key judgements and estimates
Areas where key estimates and judgements
are considered to have a significant effect
on the amounts recognised in the financial
statements include:
Life of mine and reserves
The directors consider their judgements
and estimates surrounding the life of the
mine and its reserves to have significant
effect on the amounts recognised in the
financial statements and to be an area
where the financial statements are
subject to significant estimation
uncertainty. The life of mine remaining is
currently estimated at 8 years. This life of
mine is based on the Group’s existing
coal reserves including reserves acquired
but subject to regulatory approval. The
Group actively seeks new opportunities
to extend the life of mine of its existing
mining operations or develop new
independent mining operations in South
Africa. The life of mine excludes future coal
purchases and coal reserve acquisitions.
The Group’s estimates of proven and
probable reserves are prepared utilising
the South African code for the reporting
of exploration results, mineral resources
and mineral reserves (the SAMREC code)
and are subject to assessment by an
independent Competent Person
experienced in the field of coal geology
and specifically opencast and pillar coal
extraction. Estimates of coal reserves
impact assessments of the carrying value
of property, plant and equipment,
depreciation calculations and
rehabilitation and decommissioning
provisions. There are numerous
uncertainties inherent in estimating coal
reserves and changes to these
assumptions may result in restatement of
reserves. These assumptions include
geotechnical factors as well as economic
factors such as commodity prices,
production costs and yield.
Depreciation, amortisation of mineral
rights, mining development costs and
plant & equipment
The annual depreciation/amortisation
charge is dependent on estimates,
including coal reserves and the related
life of mine, expected development
expenditure for probable reserves, the
allocation of certain assets to relevant ore
reserves and estimates of residual values
of the processing plant. The charge can
fluctuate when there are significant
changes in any of the factors or
assumptions used, such as estimating
mineral reserves which in turn affects the
life of mine or the expected life of
reserves. Estimates of proven and
probable reserves are prepared by an
independent Competent Person.
Assessments of depreciation/
amortisation rates against the estimated
reserve base are performed regularly.
Details of the depreciation/amortisation
charge can be found in note 12.
Bisichi PLC
6161
Financial statements Group accounting policies
Provision for mining rehabilitation
including restoration and
de-commissioning costs
A provision for future rehabilitation
including restoration and
decommissioning costs requires
estimates and assumptions to be made
around the relevant regulatory
framework, the timing, extent and costs
of the rehabilitation activities and of the
risk free rates used to determine the
present value of the future cash outflows.
The provisions, including the estimates
and assumptions contained therein, are
reviewed regularly by management. The
Group annually engages an independent
expert to assess the cost of restoration
and final decommissioning as part of
management’s assessment of the provision.
Details of the provision for mining
rehabilitation can be found in note 21.
Impairment
Property, plant and equipment
representing the Group’s mining assets in
South Africa are reviewed for impairment
when there are indicators of impairment.
The impairment test is performed using
the approved Life of Mine plan and those
future cash flow estimates are discounted
using asset specific discount rates and
are based on expectations about future
operations. The impairment test requires
estimates about production and sales
volumes, commodity prices, proven and
probable reserves (as assessed by the
Competent Person), operating costs and
capital expenditures necessary to extract
reserves in the approved Life of Mine
plan. Changes in such estimates could
impact recoverable values of these
assets. Details of the carrying value of
property, plant and equipment can be
found in note 12.
The impairment test indicated significant
headroom as at 31 December 2021 and
therefore no impairment is considered
appropriate. The key assumptions
include: coal prices, including domestic
coal prices based on recent pricing and
assessment of market forecasts for
export coal; production based on proven
and probable reserves assessed by the
independent Competent Person and
yields associated with mining areas
based on assessments by the Competent
Person and empirical data. An 10%
reduction in average forecast coal prices
or a 14% reduction in yield would give
rise to a breakeven scenario. However,
the directors consider the forecasted
yield levels and pricing to be appropriate
and supportable best estimates.
Fair value measurements of
investment properties
An assessment of the fair value of
investment properties, is required to be
performed. In such instances, fair value
measurements are estimated based on
the amounts for which the assets and
liabilities could be exchanged between
market participants. To the extent
possible, the assumptions and inputs
used take into account externally
verifiable inputs. However, such
information is by nature subject to
uncertainty. The fair value of investment
property is set out in note 11, whilst the
carrying value of investments in joint
ventures which themselves include
investment property held at fair value by
the joint venture is set out at note 13.
Measurement of development property
The development property included
within the Group’s joint venture
investment in West Ealing Projects limited
is considered by Management to fall
outside the scope of investment property.
A property intended for sale in the
ordinary course of business or in the
process of construction or development
for such sale, for example, property
acquired exclusively with a view to
subsequent disposal in the near future or
for development and resale is expected to
be recorded under the accounting standard
of IAS 2 Inventories. The directors have
discussed the commercial approach with
the directors of the underlying joint
venture and the current plan is to sell or
to complete the development and sell.
The Directors therefore consider the key
judgement of accounting treatment of the
property development under IAS 2
Inventories to be correct.
IAS 2 Inventories require the capitalised
costs to be held at the lower of cost or
net realisable value. At 31 December
2021, the costs capitalised within the
development based on a director’s
appraisal for the property estimated the
net realisable value at a surplus over the
cost for the development. The directors
have reviewed the underlying inputs and
key assumptions made in the appraisal
and consider them adequate. However,
such information is by nature subject to
uncertainty. The cost of the development
property is set out in note 14.
Basis of consolidation
The Group accounts incorporate the
accounts of Bisichi PLC and all of its
subsidiary undertakings, together with
the Group’s share of the results of its joint
ventures. Non-controlling interests in
subsidiaries are presented separately
from the equity attributable to equity
owners of the parent company. On
acquisition of a non-wholly owned
subsidiary, the non-controlling
shareholders’ interests are initially
measured at the non-controlling interests’
proportionate share of the fair value of
the subsidiaries net assets.
62 Bisichi PLC
Financial statements Group accounting policies
Thereafter, the carrying amount of
non-controlling interests is the amount of
those interests at initial recognition plus
the non-controlling interests’ share of
subsequent changes in equity. For
subsequent changes in ownership in a
subsidiary that do not result in a loss of
control, the consideration paid or
received is recognised entirely in equity.
The definition of control assumes the
simultaneous fulfilment of the following
three criteria:
•
•
•
•
•
•
The parent company holds decision-
making power over the relevant
activities of the investee,
The parent company has rights to
variable returns from the investee, and
The parent company can use its
decision-making power to affect the
variable returns.
Investees are analysed for their relevant
activities and variable returns, and the
link between the variable returns and the
extent to which their relevant activities
could be influenced in order to ensure the
definition is correctly applied.
Revenue
The Group’s revenue from contracts with
customers, as defined under IFRS 15,
includes coal revenue and service charge
income.
Coal revenue is derived principally from
export revenue and domestic revenue.
Both export revenue and domestic
revenue is recognised when the customer
has a legally binding obligation to settle
under the terms of the contract when the
performance obligations have been
satisfied, which is once control of the
goods has transferred to the buyer at the
delivery point. For export revenue this is
generally recognised when the product is
delivered to the export terminal location
specified in the customer contract, at
which point control of the goods have
been transferred to the customer. For
domestic coal revenues this is generally
recognised on collection by the customer
from the mine or from the mine’s rail
siding when loaded into transport, where
the customer pays the transportation
costs. Fulfilment costs to satisfy the
performance obligations of coal revenues
such as transport and loading costs
borne by the Group from the mine to the
delivery point are recoded in operating
costs.
Coal revenue is measured based on
consideration specified in the contract
with a customer on a per metric tonne
basis. Both export and domestic
contracts are typically on a specified coal
volume basis and less than a year in
duration. Export contracts are typically
linked to the price of Free on Board (FOB)
Coal from Richards Bay Coal Terminal
(API4 price). Domestic contracts are
typically linked to a contractual price
agreed.
Service charges recoverable from tenants
are recognised over time as the service is
rendered.
Lease property rental income, as defined
under IFRS 16, is recognised in the Group
income statement on a straight-line basis
over the term of the lease. This includes
the effect of lease incentives.
Expenditure
Expenditure is recognised in respect of
goods and services received. Where coal
is purchased from third parties at point of
extraction the expenditure is only
recognised when the coal is extracted
and all of the significant risks and
rewards of ownership have been
transferred.
Investment properties
Investment properties comprise freehold
and long leasehold land and buildings.
Investment properties are carried at fair
value in accordance with IAS 40
‘Investment Properties’. Properties are
recognised as investment properties
when held for long-term rental yields, and
after consideration has been given to a
number of factors including length of
lease, quality of tenant and covenant,
value of lease, management intention for
future use of property, planning consents
and percentage of property leased.
Investment properties are revalued
annually by professional external
surveyors and included in the balance
sheet at their fair value. Gains or losses
arising from changes in the fair values of
assets are recognised in the consolidated
income statement in the period to which
they relate. In accordance with IAS 40,
investment properties are not
depreciated. The fair value of the head
leases is the net present value of the
current head rent payable on leasehold
properties until the expiry of the lease.
Mining reserves, plant and
equipment and development cost
The cost of property, plant and equipment
comprises its purchase price and any
costs directly attributable to bringing the
asset to the location and condition
necessary for it to be capable of
operating in accordance with agreed
specifications. Freehold land included
within mining reserves is not depreciated.
Other property, plant and equipment is
stated at historical cost less accumulated
depreciation. The cost recognised
includes the recognition of any
decommissioning assets related to
property, plant and equipment.
Bisichi PLC
6363
Financial statements Group accounting policies
•
•
•
•
the Group can identify the component
of the ore body for which access has
been improved; and
the costs relating to the stripping
activity associated with that component
or components can be measured
reliably.
In determining the relevant component of
the coal reserve for which access is
improved, the Group componentises its
mine into geographically distinct sections
or phases to which the stripping activities
being undertaken within that component
are allocated. Such phases are
determined based on assessment of
factors such as geology and mine
planning.
The Group depreciates deferred costs
capitalised as stripping assets on a unit of
production method, with reference the
tons mined and reserve of the relevant
ore body component or phase. The cost
is recognised within Mine development
costs within the balance sheet.
Other assets and depreciation
The cost, less estimated residual value, of
other property, plant and equipment is
written off on a straight-line basis over
the asset’s expected useful life. This
includes the washing plant and other key
surface infrastructure. Residual values
and useful lives are reviewed, and
adjusted if appropriate, at each balance
sheet date. Changes to the estimated
residual values or useful lives are
accounted for prospectively. Heavy
surface mining and other plant and
equipment is depreciated at varying rates
depending upon its expected usage.
The depreciation rates generally applied
are:
Mining
equipment
Motor
vehicles
Office
equipment
5 – 10 per cent per annum of
the earlier of its useful life or
the life of the mine
25 – 33 per cent per annum
10 – 33 per cent per annum
Provisions and contingent liabilities
Provisions are recognised when the
Group has a present obligation as a result
of a past event which it is probable will
result in an outflow of economic benefits
that can be reliably estimated.
A provision for rehabilitation of the mine
is initially recorded at present value and
the discounting effect is unwound over
time as a finance cost. Changes to the
provision as a result of changes in
estimates are recorded as an increase /
decrease in the provision and associated
decommissioning asset. The
decommissioning asset is depreciated in
line with the Group’s depreciation policy
over the life of mine. The provision
includes the restoration of the
underground, opencast, surface
operations and de-commissioning of plant
and equipment. The timing and final cost
of the rehabilitation is uncertain and will
depend on the duration of the mine life
and the quantities of coal extracted from
the reserves.
The purpose of mine development is to
establish secure working conditions and
infrastructure to allow the safe and
efficient extraction of recoverable reserves.
Depreciation on mine development costs is
not charged until production commences
or the assets are put to use. On
commencement of full commercial
production, depreciation is charged over
the life of the associated mine reserves
extractable using the asset on a unit of
production basis. The unit of production
calculation is based on tonnes mined as a
ratio to proven and probable reserves and
also includes future forecast capital
expenditure. The cost recognised includes
the recognition of any decommissioning
assets related to mine development.
Post production stripping
In surface mining operations, the Group
may find it necessary to remove waste
materials to gain access to coal reserves
prior to and after production commences.
Prior to production commencing, stripping
costs are capitalised until the point where
the overburden has been removed and
access to the coal seam commences.
Subsequent to production, waste
stripping continues as part of extraction
process as a mining production activity.
There are two benefits accruing to the
Group from stripping activity during the
production phase: extraction of coal that
can be used to produce inventory and
improved access to further quantities of
material that will be mined in future
periods. Economic coal extracted is
accounted for as inventory. The
production stripping costs relating to
improved access to further quantities in
future periods are capitalised as a
stripping activity asset, if and only if, all of
the following are met:
•
•
it is probable that the future economic
benefit associated with the stripping
activity will flow to the Group;
64 Bisichi PLC
Financial statements Group accounting policies
Management exercises judgment in
measuring the Group’s exposures to
contingent liabilities through assessing
the likelihood that a potential claim or
liability will arise and where possible in
quantifying the possible range of financial
outcomes. Where there is a dispute and
where a reliable estimate of the potential
liability cannot be made, or where the
Group, based on legal advice, considers
that it is improbable that there will be an
outflow of economic resources, no
provision is recognised.
Employee benefits
Share based remuneration
The company operates a share option
scheme. The fair value of the share
option scheme is determined at the date
of grant. This fair value is then expensed
on a straight-line basis over the vesting
period, based on an estimate of the
number of shares that will eventually vest.
The fair value of options granted is
calculated using a binomial or Black-
Scholes-Merton model. Payments made
to employees on the cancellation or
settlement of options granted are
accounted for as the repurchase of an
equity interest, i.e. as a deduction from
equity. Details of the share options in
issue are disclosed in the Directors’
Remuneration Report on page 32 under
the heading Share option schemes which
is within the audited part of that report.
Pensions
The Group operates a defined contribution
pension scheme. The contributions
payable to the scheme are expensed in the
period to which they relate.
Foreign currencies
Monetary assets and liabilities are
translated at year end exchange rates and
the resulting exchange rate differences
are included in the consolidated income
statement within the results of operating
activities if arising from trading activities,
including inter-company trading balances
and within finance cost/income if arising
from financing.
For consolidation purposes, income and
expense items are included in the
consolidated income statement at
average rates, and assets and liabilities
are translated at year end exchange rates.
Translation differences arising on
consolidation are recognised in other
comprehensive income. Foreign exchange
differences on intercompany loans are
recorded in other comprehensive income
when the loans are not considered as
trading balances and are not expected to
be repaid in the foreseeable future. Where
foreign operations are disposed of, the
cumulative exchange differences of that
foreign operation are recognised in the
consolidated income statement when the
gain or loss on disposal is recognised.
Transactions in foreign currencies are
translated at the exchange rate ruling on
the transaction date.
Financial instruments
Financial assets and financial liabilities are
recognised in the Group’s consolidated
statement of financial position when the
Group becomes a party to the contractual
provisions of the instrument.
Financial assets
Financial assets are classified as either
financial assets at amortised cost, at fair
value through other comprehensive
income (“FVTOCI”) or at fair value through
profit or loss (“FVPL”) depending upon the
business model for managing the
financial assets and the nature of the
contractual cash flow characteristics of
the financial asset.
A loss allowance for expected credit
losses is determined for all financial
assets, other than those at FVPL, at the
end of each reporting period. The Group
applies a simplified approach to measure
the credit loss allowance for trade
receivables using the lifetime expected
credit loss provision. The lifetime expected
credit loss is evaluated for each trade
receivable taking into account payment
history, payments made subsequent to
year end and prior to reporting, past
default experience and the impact of any
other relevant and current observable data.
The Group applies a general approach on
all other receivables classified as financial
assets. The general approach recognises
lifetime expected credit losses when there
has been a significant increase in credit
risk since initial recognition.
The Group derecognises a financial asset
when the contractual rights to the cash
flows from the asset expire, or when it
transfers the financial asset and
substantially all the risks and rewards of
ownership of the asset to another party.
The Group derecognises financial
liabilities when the Group’s obligations are
discharged, cancelled or have expired.
Bank loans and overdrafts
Bank loans and overdrafts are included as
financial liabilities on the Group balance
sheet at the amounts drawn on the
particular facilities net of the unamortised
cost of financing. Interest payable on
those facilities is expensed as finance
cost in the period to which it relates.
Bisichi PLC
6565
Financial statements Group accounting policies
Lease liabilities
For any new contracts entered into the
Group considers whether a contract is, or
contains a lease. A lease is defined as ‘a
contract, or part of a contract, that
conveys the right to use an asset (the
underlying asset) for a period of time in
exchange for consideration’. To apply this
definition the Group assesses whether the
contract contains an identified asset and
has the right to obtain substantially all of
the economic benefits from use of the
identified asset throughout the period of
use.
At lease commencement date, the Group
recognises a right-of-use asset and a
lease liability on the balance sheet.
Right-of-use assets, excluding property
head leases, have been included in
property, plant and equipment and are
measured at cost, which is made up of the
initial measurement of the lease liability
and any initial direct costs incurred by the
Group. The Group depreciates the
right-of-use assets on a straight-line basis
from the lease commencement date to
the earlier of the end of the useful life of
the right-of-use asset or the end of the
lease term.
At the commencement date, the Group
measures the lease liability at the present
value of the lease payments unpaid at
that date, discounted using the interest
rate implicit in the lease if that rate is
readily available or the Group’s
incremental borrowing rate. Liabilities
relating to short term leases are included
within trade and other payables.
Lease payments included in the
measurement of the lease liability are
made up of fixed payments and variable
payments based on an index or rate,
initially measured using the index or rate
at the commencement date. Subsequent
to initial measurement, the liability will be
reduced for payments made and increased
for interest. It is re-measured to reflect
any reassessment or modification. When
the lease liability is re-measured, the
corresponding adjustment is reflected in
the right-of-use asset, or profit and loss if
the right-of-use asset is already reduced
to zero.
Lease liabilities that arise for investment
properties held under a leasehold interest
and accounted for as investment property
are initially calculated as the present value
of the minimum lease payments, reducing
in subsequent reporting periods by the
apportionment of payments to the lessor.
The Group has elected to account for
short-term leases and leases of low-value
assets using the practical expedients
available in IFRS 16. Instead of recognising
a right-of-use asset and lease liability, the
payments in relation to these are
recognised as an expense in profit or loss
on a straight-line basis over the lease term.
Investments
Current financial asset investments and
other investments classified as non-
current (“The investments”) comprise of
shares in listed companies. The
investments are measured at fair value.
Any changes in fair value are recognised
in the profit or loss account and
accumulated in retained earnings.
66 Bisichi PLC
Trade receivables
Trade receivables are accounted for at
amortised cost. Trade receivables do not
carry any interest and are stated at their
nominal value as reduced by appropriate
expected credit loss allowances for
estimated recoverable amounts as the
interest that would be recognised from
discounting future cash payments over
the short payment period is not
considered to be material.
Trade payables
Trade payables cost are not interest
bearing and are stated at their nominal
value, as the interest that would be
recognised from discounting future cash
payments over the short payment period
is not considered to be material.
Other financial assets and liabilities
The Group’s other financial assets and
liabilities not disclosed above are
accounted for at amortised cost.
Joint ventures
Investments in joint ventures, being those
entities over whose activities the Group
has joint control, as established by
contractual agreement, are included at
cost together with the Group’s share of
post-acquisition reserves, on an equity
basis. Dividends received are credited
against the investment. Joint control is
the contractually agreed sharing of control
over an arrangement, which exists only
when decisions about relevant strategic
and/or key operating decisions require
unanimous consent of the parties sharing
control. Control over the arrangement is
assessed by the Group in accordance
with the definition of control under IFRS
10. Loans to joint ventures are classified
as non-current assets when they are not
expected to be received in the normal
working capital cycle. Trading receivables
and payables to joint ventures are
classified as current assets and liabilities.
Financial statements Group accounting policies
Inventories
Inventories are stated at the lower of cost
and net realisable value. Cost includes
materials, direct labour and overheads
relevant to the stage of production. Cost
is determined using the weighted average
method. Net realisable value is based on
estimated selling price less all further
costs of completion and all relevant
marketing, selling and distribution costs.
Impairment
Whenever events or changes in
circumstance indicate that the carrying
amount of an asset may not be
recoverable an asset is reviewed for
impairment. This includes mining
reserves, plant and equipment and net
investments in joint ventures. A review
involves determining whether the carrying
amounts are in excess of their
recoverable amounts. An asset’s
recoverable amount is determined as the
higher of its fair value less costs of
disposal and its value in use. Such
reviews are undertaken on an asset-by-
asset basis, except where assets do not
generate cash flows independent of other
assets, in which case the review is
undertaken on a cash generating unit
basis.
If the carrying amount of an asset
exceeds its recoverable amount an
asset’s carrying value is written down to
its estimated recoverable amount (being
the higher of the fair value less cost to
sell and value in use) if that is less than
the asset’s carrying amount. Any change
in carrying value is recognised in the
comprehensive income statement.
Deferred tax
Deferred tax is the tax expected to be
payable or recoverable on differences
between the carrying amounts of assets
and liabilities in the financial statements
and the corresponding tax bases used in
the tax computations, and is accounted
for using the balance sheet liability
method. Deferred tax liabilities are
generally recognised for all taxable
temporary differences and deferred tax
assets are recognised to the extent that it
is probable that taxable profits will be
available against which deductible
temporary differences can be utilised. In
respect of the deferred tax on the
revaluation surplus, this is calculated on
the basis of the chargeable gains that
would crystallise on the sale of the
investment portfolio as at the reporting
date. The calculation takes account of
indexation on the historical cost of the
properties and any available capital
losses.
Deferred tax is calculated at the tax rates
that are expected to apply in the period
when the liability is settled or the asset is
realised. Deferred tax is charged or
credited in the Group income statement,
except when it relates to items charged or
credited directly to other comprehensive
income, in which case it is also dealt with
in other comprehensive income.
Dividends
Dividends payable on the ordinary share
capital are recognised as a liability in the
period in which they are approved.
Cash and cash equivalents
Cash comprises cash in hand and
on-demand deposits. Cash and cash
equivalents comprises short-term, highly
liquid investments that are readily
convertible to known amounts of cash
and which are subject to an insignificant
risk of changes in value and original
maturities of three months or less. The
cash and cash equivalents shown in the
cashflow statement are stated net of
bank overdrafts that are repayable on
demand as per IAS 7. This includes the
structured trade finance facility held in
South Africa as detailed in note 22.
These facilities are considered to form an
integral part of the treasury management
of the Group and can fluctuate from
positive to negative balances during the
period.
Segmental reporting
For management reporting purposes, the
Group is organised into business
segments distinguishable by economic
activity. The Group’s material business
segments are mining activities and
investment properties. These business
segments are subject to risks and returns
that are different from those of other
business segments and are the primary
basis on which the Group reports its
segment information. This is consistent
with the way the Group is managed and
with the format of the Group’s internal
financial reporting. Significant revenue
from transactions with any individual
customer, which makes up 10 percent or
more of the total revenue of the Group, is
separately disclosed within each
segment. All coal exports are sales to
coal traders at Richard Bay’s terminal in
South Africa with the risks and rewards
passing to the coal trader at the terminal.
Whilst the coal traders will ultimately sell
the coal on the international markets the
Company has no visibility over the
ultimate destination of the coal.
Accordingly, the export sales are
recorded as South African revenue.
Bisichi PLC
6767
Financial statements
Notes to the financial statements
for the year ended 31 December 2021
1. SEGMENTAL REPORTING
Business analysis
Significant revenue customer A
Significant revenue customer B
Significant revenue customer C
Other revenue
Segment revenue
Operating (loss)/profit before fair value adjustments
& exchange movements
Revaluation of investments & exchange movements
Operating profit and segment result
Segment assets
Unallocated assets
– Non-current assets
– Cash & cash equivalents
Total assets excluding investment in joint ventures and assets held for sale
Segment liabilities
Borrowings
Total liabilities
Net assets
Non segmental assets
– Investment in joint ventures
Net assets as per balance sheet
Geographic analysis
Revenue
Operating profit/(loss) and segment result
Depreciation
Non-current assets excluding investments
Total net assets
Capital expenditure
68 Bisichi PLC
Mining
£’000
23,206
12,656
6,169
7,195
49,226
1,695
(121)
1,574
17,350
2021
Property
£’000
Other
£’000
-
-
-
1,119
1,119
592
255
847
12,242
-
-
-
175
175
170
812
982
4,319
(12,227)
(2,680)
(14,907)
(1,522)
(3,839)
(5,361)
(5)
-
(5)
United
Kingdom
£’000
1,294
687
(32)
10,748
14,400
35
South
Africa
£’000
49,222
2,716
(2,539)
9,018
3,435
1,781
Total
£’000
23,206
12,656
6,169
8,489
50,520
2,457
946
3,403
33,911
48
3,018
36,977
(13,754)
(6,519)
(20,273)
16,704
1,131
17,835
Total
£’000
50,516
3,403
(2,571)
19,766
17,835
1,816
Financial statements Notes to the financial statements
1. SEGMENTAL REPORTING CONTINUED
Business analysis
Significant revenue customer A
Significant revenue customer B
Significant revenue customer C
Other revenue
Segment revenue
Operating (loss)/profit before fair value adjustments
& exchange movements
Revaluation of investments & exchange movements
Operating profit and segment result
Segment assets
Unallocated assets
– Non-current assets
– Cash & cash equivalents
Total assets excluding investment in joint ventures and assets held for sale
Segment liabilities
Borrowings
Total liabilities
Net assets
Non segmental assets
– Investment in joint ventures
Net assets as per balance sheet
Mining
£’000
9,042
7,588
6,291
5,646
28,567
(4,014)
39
(3,975)
19,110
2020
Property
£’000
Other
£’000
-
-
-
1,181
1,181
658
(1,295)
(637)
11,891
-
-
-
57
57
52
67
119
2,581
(11,919)
(5,253)
(17,172)
(1,471)
(3,799)
(5,270)
(19)
-
(19)
Total
£’000
9,042
7,588
6,291
6,884
29,805
(3,304)
(1,189)
(4,493)
33,582
45
3,768
37,395
(13,409)
(9,052)
(22,461)
14,934
1,255
16,189
Bisichi PLC
6969
Financial statements Notes to the financial statements
1. SEGMENTAL REPORTING CONTINUED
Geographic analysis
Revenue
Operating profit/(loss) and segment result
Depreciation
Non-current assets excluding investments
Total net assets
Capital expenditure
2. REVENUE
Revenue from contracts with customers:
Coal sales and processing
Service charges recoverable from tenants
Other:
Rental income
Other revenue
Revenue
United
Kingdom
£’000
1,238
(931)
(21)
10,516
13,279
36
South
Africa
£’000
28,567
(3,562)
(2,172)
10,129
2,910
3,435
Total
£’000
29,805
(4,493)
(2,193)
20,645
16,189
3,471
2021
£’000
2020
£’000
49,226
130
989
175
28,567
156
1,025
57
50,520
29,805
Segmental mining revenue is derived principally from coal sales and is recognised once the control of the goods has transferred
from the Group to the buyer. Segmental property revenue is derived from rental income and service charges recoverable from
tenants. This is consistent with the revenue information disclosed for each reportable segment (see note 1). Rental income is
recognised on a straight-line basis over the term of the lease. Service charges recoverable from tenants are recognised over time
as the service is rendered. Revenue is measured based on the consideration specified in the contract with the customer or tenant.
3. OPERATING COSTS
Mining
Property
Cost of sales
Administration
Operating costs
The direct property costs are:
Direct property expense
Bad debts
Operating costs above include depreciation of £2,571,000 (2020: £2,193,000).
70 Bisichi PLC
2021
£’000
38,008
400
38,408
9,655
48,063
351
49
400
2020
£’000
24,645
342
24,987
8,122
33,109
272
70
342
Financial statements Notes to the financial statements
4. (LOSS)/GAIN ON REVALUATION OF INVESTMENT PROPERTIES
The reconciliation of the investment (deficit)/surplus to the gain on revaluation of investment properties in the income statement is
set out below:
Investment deficit
Gain/(Loss) on valuation movement in respect of head lease payments
Loss on revaluation of investment properties
5. PROFIT BEFORE TAXATION
Profit before taxation is arrived at after charging:
Staff costs (see note 29)
Depreciation
Exchange loss
Fees payable to the company’s auditor for the audit of the company’s annual accounts
Fees payable to the company’s auditor and its associates for other services:
The audit of the company’s subsidiaries pursuant to legislation
Audit related services
Non-audit related services
Decrease/(Increase) in value of Inventory
2021
£’000
255
(26)
229
2021
£’000
7,491
2,571
(121)
51
37
-
-
2,105
2020
£’000
(1,313)
18
(1,295)
2020
£’000
5,890
2,193
39
84
26
4
2
(1,128)
The directors consider the auditors were best placed to provide the above non-audit and audit related services which refer to
regulatory matters. The audit committee reviews the nature and extent of non-audit services to ensure that independence is
maintained.
6. DIRECTORS’ EMOLUMENTS
Directors’ emoluments are shown in the Directors’ remuneration report on page 32 which is within the audited part of that report.
7. INTEREST PAYABLE
On bank overdrafts and bank loans
Unwinding of discount
Lease liabilities
Other interest payable
Interest payable
2021
£’000
2020
£’000
554
-
29
216
799
547
-
26
68
641
Bisichi PLC
7171
Financial statements Notes to the financial statements
8. TAXATION
(a) Based on the results for the year:
Current tax - UK
Current tax - Overseas
Corporation tax - adjustment in respect of prior year – UK
Current tax
Deferred tax
Total tax in income statement charge
2021
£’000
2020
£’000
-
750
-
750
45
795
-
12
2
14
(1,416)
(1,402)
(b) Factors affecting tax charge for the year:
The corporation tax assessed for the year is different from that at the standard rate of corporation tax in the United Kingdom of
19.00% (2020: 19%).
The differences are explained below:
Profit/ Loss on ordinary activities before taxation
Tax on profit/ loss on ordinary activities at 19.00% (2020: 19.00%)
Effects of:
Expenses not deductible for tax purposes
Capital gains\(losses) on disposal
Adjustment to tax rate
Other differences
Adjustment in respect of prior years
Total tax in income statement (credit) / charge
(c) Analysis of United Kingdom and overseas tax:
United Kingdom tax included in above:
Current tax
Deferred tax
Overseas tax included in above:
Current tax
Adjustment in respect of prior years
Current tax
Deferred tax
2,501
475
49
20
260
(9)
-
795
-
152
152
750
-
750
(107)
643
(5,196)
(987)
23
-
(360)
(80)
2
(1,402)
-
(312)
(312)
12
2
14
(1,104)
(1,090)
Overseas tax is derived from the Group’s South African mining operation. Refer to note 1 for a report on the Groups’ mining and
South African segmental reporting. The adjustment to tax rate arises due to the deferred tax rate used in the UK for the year of
25% (2020: 19%) and the corporation tax rate assessed in South Africa for the year of 28% (2020: 28%) being different from
the corporation tax rate in the UK.
72 Bisichi PLC
Financial statements Notes to the financial statements
9. SHAREHOLDER DIVIDENDS
Dividends paid during the year relating to the prior period
Dividends relating to the current period:
Proposed dividend for 2021
Proposed special dividend for 2021
2021
Per share
-
4p
2p
6p
2021
£’000
-
2020
Per share
1.00p
427
214
641
-
-
2020
£’000
107
-
-
The dividends relating to the current period are not accounted for until they have been approved at the Annual General Meeting.
10. PROFIT/(LOSS) AND DILUTED PROFIT/(LOSS) PER SHARE
Both the basic and diluted profit/(loss) per share calculations are based on a profit after tax of £1,491,000 (2020: loss of
£3,354,000). The basic profit/(loss) per share has been calculated on a weighted average of 10,676,839 (2020: 10,676,839)
ordinary shares being in issue during the period. The diluted profit per share has been calculated on the weighted average number
of shares in issue of 10,676,839 (2020: 10,676,839) plus the dilutive potential ordinary shares arising from share options of 21,923
(2020: Nil) totalling 10,698,762 (2020: 10,676,839).
11. INVESTMENT PROPERTIES
Valuation at 1 January 2021
Revaluation
Valuation at 31 December 2021
Valuation at 1 January 2020
Revaluation
Valuation at 31 December 2020
Historical cost
At 31 December 2021
At 31 December 2020
Freehold
£’000
Long
Leasehold
£’000
Head
Lease
£’000
7,875
355
8,230
9,020
(1,145)
7,875
5,851
5,851
2,395
(100)
2,295
2,545
(150)
2,395
728
728
201
(26)
175
183
18
201
-
-
Total
£’000
10,471
229
10,700
11,748
(1,277)
10,471
6,579
6,579
Long leasehold properties are those for which the unexpired term at the balance sheet date is not less than 50 years. All
investment properties are held for use in operating leases and all properties generated rental income during the period.
Freehold and Long Leasehold properties were externally professionally valued at 31 December on an open market basis by:
Carter Towler
2021
£’000
10,525
2020
£’000
10,270
The valuations were carried out in accordance with the Statements of Asset Valuation and Guidance Notes published by The Royal
Institution of Chartered Surveyors.
Each year external valuers are appointed by the Executive Directors on behalf of the Board. The valuers are selected based upon
their knowledge, independence and reputation for valuing assets such as those held by the Group.
Bisichi PLC
7373
Financial statements Notes to the financial statements
11. INVESTMENT PROPERTIES CONTINUED
Valuations are performed annually and are performed consistently across all investment properties in the Group’s portfolio. At
each reporting date appropriately qualified employees of the Group verify all significant inputs and review the computational
outputs. Valuers submit their report to the Board on the outcome of each valuation round.
Valuations take into account tenure, lease terms and structural condition. The inputs underlying the valuations include market rent
or business profitability, likely incentives offered to tenants, forecast growth rates, yields, EBITDA, discount rates, construction
costs including any specific site costs (for example section 106), professional fees, developer’s profit including contingencies,
planning and construction timelines, lease regear costs, planning risk and sales prices based on known market transactions for
similar properties to those being valued.
Valuations are based on what is determined to be the highest and best use. When considering the highest and best use a valuer
will consider, on a property by property basis, its actual and potential uses which are physically, legally and financially viable.
Where the highest and best use differs from the existing use, the valuer will consider the cost and likelihood of achieving and
implanting this change in arriving at its valuation.
There are often restrictions on Freehold and Leasehold property which could have a material impact on the realisation of these
assets. The most significant of these occur when planning permission or lease extension and renegotiation of use are required or
when a credit facility is in place. These restrictions are factored in the property’s valuation by the external valuer.
IFRS 13 sets out a valuation hierarchy for assets and liabilities measured at fair value as follows:
Level 1:
valuation based on inputs on quoted market prices in active markets
Level 2:
directly or from market prices or indirectly derived from market prices.
valuation based on inputs other than quoted prices included within level 1 that maximise the use of observable data
Level 3:
where one or more significant inputs to valuations are not based on observable market data
The inter-relationship between key unobservable inputs and the Groups’ properties is detailed in the table below:
Class of property
Level 3
Freehold – external
valuation
Valuation technique
Key
unobservable inputs
Income capitalisation Estimated rental
value per sq ft p.a
Equivalent Yield
Carrying/
fair value
2021
£’000
8,230
Carrying/
fair value
2020
£’000
Range
(weighted
average)
2021
Range
(weighted
average)
2020
7,875
£6 – £29
£6 – £27
(£21)
8.9% – 14.7%
(£19)
9.4% –
(11.2%)
16.7%
Long leasehold –
external valuation
Income capitalisation Estimated rental
2,295
2,395
£9 – £9
value per sq ft p.a
Equivalent yield
(11.8%)
£8 – £8
(£8)
(£9)
9.8% – 9.8%
8.9% – 8.9%
(9.8%)
(8.9%)
At 31 December 2021
10,525
10,270
There are interrelationships between all these inputs as they are determined by market conditions. The existence of an increase in
more than one input would be to magnify the input on the valuation. The impact on the valuation will be mitigated by the
interrelationship of two inputs in opposite directions, for example, an increase in rent may be offset by an increase in yield.
74 Bisichi PLC
Financial statements Notes to the financial statements
11. INVESTMENT PROPERTIES CONTINUED
The table below illustrates the impact of changes in key unobservable inputs on the carrying / fair value of the Group’s properties:
Freehold – external valuation
Long Leasehold – external valuation
12. MINING RESERVES, PLANT AND EQUIPMENT
Cost at 1 January 2021
Exchange adjustment
Additions
Disposals
Cost at 31 December 2021
Accumulated depreciation at 1 January 2021
Exchange adjustment
Charge for the year
Disposals
Accumulated depreciation at 31 December 2021
Net book value at 31 December 2021
Cost at 1 January 2020
Exchange adjustment
Additions
Disposals
Cost at 31 December 2020
Accumulated depreciation at 1 January 2020
Exchange adjustment
Charge for the year
Disposals
Accumulated depreciation at 31 December 2020
Net book value at 31 December 2020
Estimated rental
value 10% increase
or decrease
2021
£’000
2020
£’000
Equivalent yield
25 basis point contrac-
tion or expansion
2021
£’000
2020
£’000
823 / (823)
788 / (788)
203 / (193)
185 / (177)
230 / (230)
240 / (240)
60 / (57)
69 / (65)
Mining
equipment
and develop-
ment costs
£’000
Mining
reserves
£’000
Motor
vehicles
£’000
Office
equipment
£’000
1,138
(41)
-
-
1,097
1,123
(41)
7
-
1,089
8
1,226
(88)
-
-
1,138
1,212
(89)
-
-
1,123
15
28,371
(1,059)
1,772
(21)
29,063
18,399
(710)
2,499
(21)
20,167
8,896
26,674
(1,733)
3,430
-
28,371
17,405
(1,136)
2,130
-
18,399
9,972
372
(11)
35
-
396
215
(7)
56
-
264
132
361
(25)
36
-
372
171
(10)
54
-
215
157
174
(4)
9
-
179
144
(3)
9
-
150
29
175
(6)
5
-
174
140
(5)
9
-
144
30
Total
£’000
30,055
(1,115)
1,816
(21)
30,735
19,881
(761)
2,571
(21)
21,670
9,065
28,436
(1,852)
3,471
-
30,055
18,928
(1,240)
2,193
-
19,881
10,174
Bisichi PLC
7575
Financial statements Notes to the financial statements
12. MINING RESERVES, PLANT AND EQUIPMENT CONTINUED
Included in the above line items are right-of-use assets over the following:
Mining
Equipment
and develop-
ment costs
£’000
Motor
vehicles
£’000
263
-
(6)
(38)
219
52
248
(18)
(19)
263
2021
Other
£’000
1,746
701
1,630
(446)
-
3,631
45
35
-
(32)
48
29
36
-
(20)
45
2020
Net
investment
in joint
ventures
assets
£’000
1,342
-
-
-
(87)
1,255
Total
£’000
308
35
(6)
(70)
267
81
284
(18)
(39)
308
2020
Other
£’000
287
201
1,359
(101)
-
1,746
2021
Net
investment in
joint
ventures
assets
£’000
1,255
-
-
-
(125)
1,130
Net book value at 1 January 2021
Additions
Exchange adjustment
Depreciation
Net book value at 31 December 2021
Net book value at 1 January 2020
Additions
Exchange adjustment
Depreciation
Net book value at 31 December 2020
13. INVESTMENTS HELD AS NON-CURRENT ASSETS
At 1 January
Share of (loss)/gain in investment
Additions
Disposals
Share of (loss)/gain in joint ventures
Net assets at 31 December
76 Bisichi PLC
Financial statements Notes to the financial statements
13. INVESTMENTS HELD AS NON-CURRENT ASSETS CONTINUED
Other investments comprise of the following:
Net book value of unquoted investments
Net book and market value of readily realisable investments listed on stock exchanges in the United
Kingdom
Net book and market value of readily realisable investments listed on overseas stock exchanges
2021
£’000
-
1,564
2,067
3,631
2020
£’000
-
959
787
1,746
14. JOINT VENTURES
Development Physics Limited
The company owns a third of the issued share capital of Development Physics Limited, an unlisted property development company.
At year end, the negative carrying value of the investment held by the Group was £3,000 (2020: £Nil). The remaining two thirds is
held equally by London & Associated Properties PLC and Metroprop Real Estate Ltd. Development Physics Limited is incorporated
in England and Wales and its registered address is 12 Little Portland Street, London, W1W8BJ. It has issued share capital of 99
(2020: 99) ordinary shares of £1 each. No dividends were received during the period.
Dragon Retail Properties Limited
The company owns 50% of the issued share capital of Dragon Retail Properties Limited, an unlisted property investment
company. At year end, the carrying value of the investment held by the Group was £637,000 (2020: £670,000). The remaining
50% is held by London & Associated Properties PLC. Dragon Retail Properties Limited is incorporated in England and Wales and
its registered address is 12 Little Portland Street, London, W1W8BJ. It has issued share capital of 500,000 (2020: 500,000)
ordinary shares of £1 each. No dividends were received during the period. It holds a Santander bank loan of £1.164million secured
against its investment property. The bank loan of £1.164million is secured by way of a first charge on specific freehold property at a
value of £2.08 million. The interest cost of the loan is 2.75 per cent above the bank’s base rate. A refinancing of this loan is
currently underway. The loan originally expired in October 2020 but has been extended to April 2022, and the lender has offered
to extend this further if required. The company has agreed terms with a new lender to refinance this loan in full and are expecting
to complete this shortly.
West Ealing Projects Limited
The company owns 50% of the issued share capital of West Ealing Projects Limited, an unlisted property development company.
At year end, the carrying value of the investment held by the Group was £496,000 (2020: £585,000). The remaining 50% is held
by London & Associated Properties PLC. West Ealing Projects Limited is incorporated in England and Wales and its registered
address is 12 Little Portland Street, London, W1W8BJ. It has issued share capital of 1,000,000 (2020: 1,000,000) ordinary shares
of £1 each. No dividends were received during the period.
Bisichi PLC
7777
Financial statements Notes to the financial statements
14. JOINT VENTURES CONTINUED
Development
Physics
£’000
Turnover
Profit and loss:
(Loss)/Profit before depreciation,
interest and taxation
Depreciation and amortisation
(Loss)/Profit before interest and
taxation
Interest Income
Interest expense
(Loss)/Profit before taxation
Taxation
(Loss)/Profit after taxation
Balance sheet
Non-current assets
Cash and cash equivalents
Property inventory
Other current assets
Other current liabilities
Net current assets
Non-current borrowings
Other non-current liabilities
Net assets at 31 December
Share of net assets at 31 December
-
(10)
-
(10)
-
-
(10)
-
(10)
-
-
232
27
(269)
(10)
-
-
(10)
(3)
Dragon
£’000
168
West
Ealing
£’000
58
2021
£’000
226
Dragon
£’000
143
West
Ealing
£’000
192
2020
£’000
335
(32)
(3)
(35)
-
(31)
(66)
-
(66)
2,091
27
-
374
(53)
348
(1,165)
-
1,274
637
(215)
(257)
(280)
-
(215)
-
(1)
(216)
38
(178)
-
5
7,494
70
(6,549)
1,020
(28)
-
992
496
(3)
(260)
-
(32)
(292)
38
(254)
2,091
32
7,726
471
(6,871)
1,358
(1,193)
-
2,256
1,130
(10)
(290)
-
(28)
(318)
44
(274)
2,146
12
-
460
(92)
380
(1,186)
-
1,340
670
100
-
100
-
-
100
-
100
-
27
7,056
103
(5,962)
1,224
(54)
-
1,170
585
(180)
(10)
(190)
-
(28)
(218)
44
(174)
2,146
39
7,056
563
(6,054)
1,604
(1,240)
-
2,510
1,255
78 Bisichi PLC
Financial statements Notes to the financial statements
15. SUBSIDIARY COMPANIES
The company owns the following ordinary share capital of the subsidiaries which are included within the consolidated financial
statements:
Activity
Percentage of
share capital
Registered address
Country of
incorporation
Directly held:
Mineral Products Limited
Share dealing 100%
Bisichi (Properties) Limited
Property
100%
Bisichi Northampton Limited
Property
100%
Bisichi Trustee Limited
Property
100%
Urban First (Northampton) Limited
Property
100%
Bisichi Mining (Exploration) Limited
Ninghi Marketing Limited
Bisichi Mining Management
Services Limited
Holding
company
Dormant
100%
90.1%
Dormant
100%
Bisichi Coal Mining (Pty) Limited
Coal mining
100%
12 Little Portland Street, London,
W1W8BJ
12 Little Portland Street, London,
W1W8BJ
12 Little Portland Street, London,
W1W8BJ
12 Little Portland Street, London,
W1W8BJ
12 Little Portland Street, London,
W1W8BJ
12 Little Portland Street, London,
W1W8BJ
12 Little Portland Street, London,
W1W8BJ
12 Little Portland Street, London,
W1W8BJ
England
and Wales
England
and Wales
England
and Wales
England
and Wales
England
and Wales
England
and Wales
England
and Wales
England
and Wales
Samora Machel Street, Bethal Road,
Middelburg, Mpumalanga, 1050
South Africa
Indirectly held:
Black Wattle Colliery (Pty) Limited
Coal mining
62.5%
Samora Machel Street, Bethal Road,
Middelburg, Mpumalanga, 1050
South Africa
Sisonke Coal Processing (Pty) Limited
Coal
processing
62.5%
Samora Machel Street, Bethal Road,
Middelburg, Mpumalanga, 1050
South Africa
Black Wattle Klipfontein (Pty) Limited
Coal mining
62.5%
Samora Machel Street, Bethal Road,
South Africa
Amandla Ehtu Mineral Resource
Development (Pty) Limited
Dormant
70%
Middelburg, Mpumalanga, 1050
Samora Machel Street, Bethal Road,
Middelburg, Mpumalanga, 1050
South Africa
Details on the non-controlling interest in subsidiaries are shown under note 27.
Bisichi PLC
7979
Financial statements Notes to the financial statements
16. INVENTORIES
Coal
Washed
Mining Production
Work in progress
Other
17. TRADE AND OTHER RECEIVABLES
Financial assets falling due within one year:
Trade receivables
Amount owed by joint venture
Other receivables
Non-financial instruments falling due within one year:
Prepayments and accrued income
2021
£’000
1,185
59
-
9
2020
£’000
2,924
394
111
16
1,253
3,445
2021
£’000
6,328
1,067
984
247
8,626
2020
£’000
5,155
952
680
171
6,958
Financial assets falling due within one year are held at amortised cost. The fair value of trade and other receivables approximates
their carrying amounts. The Group applies a simplified approach to measure the credit loss allowance for trade receivables using
the lifetime expected credit loss provision. The lifetime expected credit loss is evaluated for each trade receivable taking into
account payment history, payments made subsequent to year end and prior to reporting, past default experience and the impact of
any other relevant and current observable data. The Group applies a general approach on all other receivables classified as
financial assets. At year end, the Group allowance for doubtful debts provided against trade receivables was £140,000 (2020:
£91,000).
18. INVESTMENTS IN LISTED SECURITIES HELD AT FVPL
Market value of listed Investments:
Listed in Great Britain
Listed outside Great Britain
Original cost of listed investments
Unrealised surplus / deficit of market value versus cost
80 Bisichi PLC
2021
£’000
478
207
685
846
(161)
2020
£’000
567
266
833
1,098
(265)
Financial statements Notes to the financial statements
19. TRADE AND OTHER PAYABLES
Trade payables
Amounts owed to joint ventures
Lease liabilities (Note 31)
Other payables
Accruals
Deferred Income
2021
£’000
7,171
156
65
2,281
844
226
2020
£’000
7,168
156
81
1,839
1,374
238
10,743
10,856
20. FINANCIAL LIABILITIES – BORROWINGS
Current
Non-current
Bank overdraft (secured)
Bank loan (secured)
2021
£’000
2,536
130
2,666
2020
£’000
4,846
264
5,110
Bank overdraft and loan instalments by reference to the balance sheet date:
Within one year
From one to two years
From two to five years
Bank overdraft and loan analysis by origin:
United Kingdom
Southern Africa
2021
£’000
-
3,853
3,853
2021
£’000
2,666
11
3,842
6,519
3,839
2,680
6,519
2020
£’000
-
3,943
3,943
2020
£’000
5,110
128
3,815
9,053
3,799
5,254
9,053
In South Africa, an R85million trade facility is held with Absa Bank Limited by Sisonke Coal Processing (Pty) Limited (“Sisonke Coal
Processing”) in order to cover the working capital requirements of the Group’s South African operations. The interest cost of the
loan is at the South African prime lending rate plus 3.8% The facility is renewable annually each January, is repayable on demand
and is secured by way of a first charge over specific pieces of mining equipment, inventory and the debtors of the relevant
company which holds the loan which are included in the financial statements at a value of £8,843,219. All banking covenants were
either adhered to or waived by Absa Bank Limited during the year.
In the UK, the Group holds a £3.96million term loan facility with Julian Hodge Bank Limited. 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 in December
2024. In the last quarter of 2021 the base interest rate on the loan changed from LIBOR to the Bank of England base rate. The
overall interest cost of the loan is 4.00% above the Bank of England base rate. The loan is 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 £10,525,000. No banking
covenants were breached by the Group during the year.
Bisichi PLC
8181
Financial statements Notes to the financial statements
20. FINANCIAL LIABILITIES – BORROWINGS CONTINUED
Consistent with others in the mining and property industry, the Group monitors its capital by its gearing levels. This is calculated as
the total bank loans and overdraft less remaining cash and cash equivalents as a percentage of equity. At year end the gearing of
the Group was calculated as follows:
2021
£’000
6,519
(3,018)
3,501
17,512
20.0%
Bank
borrowings
£’000
Bank
overdrafts
£’000
Lease
liabilities
£’000
4,402
4,842
(56)
(139)
(330)
334
2021
£’000
9,561
(154)
(2,443)
9
-
-
6,973
4,207
4,846
262
(18)
(39)
303
508
2021
£’000
1,442
(52)
-
-
2020
£’000
9,053
(3,768)
5,285
16,073
32.9%
2020
£’000
9,506
(404)
156
303
9,561
2020
£’000
1,554
(112)
-
-
1,390
1,442
Total bank loans and overdraft
Less cash and cash equivalents (excluding overdraft)
Net debt
Total equity attributable to shareholders of the parent
Gearing
Analysis of the changes in liabilities arising from financing activities:
Bank
borrowings
£’000
Bank
overdrafts
£’000
Lease
liabilities
£’000
Balance at 1 January
Exchange adjustments
Cash movements excluding
exchange adjustments
Additions
4,207
(10)
(214)
4,846
(138)
(2,172)
-
-
Balance at 31 December
3,983
2,536
508
(6)
(57)
9
454
21. PROVISION FOR REHABILITATION
As at 1 January
Exchange adjustment
Increase in provision
Unwinding of discount
As at 31 December
82 Bisichi PLC
Financial statements Notes to the financial statements
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:
Financial
Assets
measured
at
amortised
cost
£’000
Financial
Liabilities
measured
at
amortised
cost
£’000
Cash and cash equivalents
3,018
Non-current other
investments held at FVPL
Investments in listed
securities held at FVPL
-
-
Trade and other receivables
8,379
-
-
-
-
Bank borrowings and
overdraft
Lease Liabilities
Other liabilities
-
-
-
11,397
(6,519)
(454)
(11,178)
(18,151)
Investments
held at
FVPL
£’000
-
3,631
2021
£’000
3,018
3,631
685
685
-
-
-
-
4,316
8,379
(6,519)
(454)
(11,178)
(2,438)
Financial
Assets
measured
at
amortised
cost
£’000
3,768
-
-
6,787
Financial
Liabilities
measured
at
amortised
cost
£’000
-
-
-
-
-
-
-
(9,053)
(508)
(10,746)
Investments
held at
FVPL
£’000
-
1,746
2020
£’000
3,768
1,746
833
833
-
-
-
-
6,787
(9,053)
(508)
(10,746)
10,555
(20,307)
2,579
(7,173)
Investments in listed securities held at fair value through profit and loss fall under level 1 of the fair value hierarchy into which fair
value measurements are recognised in accordance with the levels set out in IFRS 7. The comparative figures for 2020 fall under
the same category of financial instrument as 2021.
The carrying amount of short term (less than 12 months) trade receivable and other liabilities approximate their fair values. The fair
value of non-current borrowings in note 20 approximates its carrying value and was determined under level 2 of the fair value
hierarchy and is estimated by discounting the future contractual cash flows at the current market interest rates for UK borrowings
and for the South African overdraft facility. The fair value of the lease liabilities in note 31 approximates its carrying value and was
determined under level 2 of the fair value hierarchy and is estimated by discounting the future contractual cash flows at the current
market interest rates.
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.
Bisichi PLC
8383
Financial statements Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
Interest bearing borrowings comprise bank loans, bank overdrafts and variable rate finance lease obligations. The rates of interest
vary based on Bank of England in the UK and PRIME in South Africa.
As at 31 December 2021, with other variables unchanged, a 1% increase or decrease in interest rates, on investments and
borrowings whose interest rates are not fixed, would respectively change the profit/loss for the year by £80,000 (2020: £37,000).
The effect on equity of this change would be an equivalent decrease or increase for the year of £80,000 (2020: £37,000).
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 PLC and in South Africa in Black Wattle Colliery (Pty) Ltd.
The following table sets out the maturity profile of contractual undiscounted cash flows of financial liabilities as at 31 December:
Within one year
From one to two years
From two to five years
Beyond five years
2021
£’000
14,122
238
4,391
129
2020
£’000
16,174
371
4,268
232
18,880
21,045
The following table sets out the maturity profile of contractual undiscounted cash flows of financial liabilities as at 31 December
maturing within one year:
Within one month
From one to three months
From four to twelve months
2021
£’000
11,509
1,699
914
14,122
2020
£’000
13,088
2,106
980
16,174
In South Africa, an R85million trade facility is held with Absa Bank Limited by Sisonke Coal Processing (Pty) Limited (“Sisonke Coal
Processing”) in order to cover the working capital requirements of the Group’s South African operations. The interest cost of the
loan is at the South African prime lending rate plus 3.8% The facility is renewable annually each January, is repayable on demand
and is secured against inventory, debtors and cash that are held by Sisonke Coal Processing (Pty) Limited. The facility is included
in cash and cash equivalents within the cashflow statement.
In the UK, the Group holds a £3.96million term loan facility with Julian Hodge Bank Limited. 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 in December
2024. In the last quarter of 2021 the base interest rate on the loan changed from LIBOR to the Bank of England base rate. The
overall interest cost of the loan is 4.00% above the Bank of England base rate.
As a result of the above agreed banking facilities, the Directors believe that the Group is well placed to manage its liquidity risk.
84 Bisichi PLC
Financial statements Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
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 £11,397,000 (2020: £10,555,000).
To mitigate risk on its cash and cash equivalents, the Group only deposits surplus cash with well-established financial institutions
of high quality credit standing.
The Group’s credit risk is primarily attributable to its trade receivables. Trade debtor’s credit ratings are reviewed regularly. The Group’s
review includes measures such as the use of external ratings and establishing purchase limits for each customer. The Group had
amounts due from its significant revenue customers at the year end that represented 53% (2020: 68%) of the trade receivables
balance. These amounts have been subsequently settled. The Group approach to measure the credit loss allowance for trade
receivables is outlined in note 17. At year end, the Group allowance for doubtful debts provided against trade receivables was £140,000
(2020: £91,000). As at year end the amount of trade receivables held past due date less credit loss allowances was £201,000 (2020:
£282,000). To date, the amount of trade receivables held past due date less credit loss allowances that has not subsequently been
settled is £106,000 (2020: £155,000). Management have no reason to believe that this amount will not be settled.
The Group exposure to credit risk on its loans to joint ventures and other receivables is mitigated through ongoing review of the
underlying performance and resources of the counterparty including evaluation of different scenarios of probability of default and
expected loss applicable to each of the underlying balances.
Financial assets maturity
On 31 December 2021, cash at bank and in hand amounted to £3,018,000 (2020: £3,768,000) which is invested in short term bank deposits
maturing within one year bearing interest at the bank’s variable rates. Cash and cash equivalents all have a maturity of less than 3 months.
Foreign exchange risk
All trading is undertaken in the local currencies except for certain export sales which are invoiced in dollars. It is not the Group’s
policy to obtain forward contracts to mitigate foreign exchange risk on these contracts as payment terms are within 15 days of
invoice or earlier. Funding is also in local currencies other than inter-company investments and loans and it is also not the Group’s
policy to obtain forward contracts to mitigate foreign exchange risk on these amounts. During 2021 and 2020 the Group did not
hedge its exposure of foreign investments held in foreign currencies.
The principal currency risk to which the Group is exposed in regard to inter-company balances is the exchange rate between
Pounds sterling and South African Rand. It arises as a result of the retranslation of Rand denominated inter-company trade
receivable balances held within the UK which are payable by South African Rand functional currency subsidiaries.
Based on the Group’s net financial assets and liabilities as at 31 December 2021, a 25% strengthening of Sterling against the
South African Rand, with all other variables held constant, would decrease the Group’s profit after taxation by £218,000 (2020:
£360,000). A 25% weakening of Sterling against the South African Rand, with all other variables held constant would increase the
Group’s profit after taxation by £364,000 (2020: £601,000).
The 25% sensitivity has been determined based on the average historic volatility of the exchange rate.
The table below shows the currency profiles of cash and cash equivalents:
Sterling
South African Rand
US Dollar
2021
£’000
1,397
1,017
604
3,018
2020
£’000
1,641
809
1,318
3,768
Cash and cash equivalents earn interest at rates based on Bank of England rates in Sterling and Prime in Rand.
Bisichi PLC
8585
Financial statements Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
The tables below shows the currency profiles of net monetary assets and liabilities by functional currency of the Group:
2021:
Sterling
South African Rand
US Dollar
2020:
Sterling
South African Rand
US Dollar
23. DEFERRED TAXATION
As at 1 January
Recognised in income
Exchange adjustment
As at 31 December
The deferred tax balance comprises the following:
Revaluations
Capital allowances
Short term timing difference
Unredeemed capital deductions
Losses and other deductions
Sterling
£’000
1,123
65
1,462
2,650
Sterling
£’000
(70)
39
1,736
1,705
2021
£’000
474
45
(13)
506
641
2,253
(832)
(1,057)
(499)
506
South
African
Rands
£’000
-
(5,088)
-
(5,088)
South
African
Rands
£’000
-
(8,878)
-
(8,878)
2020
£’000
2,071
(1,416)
(181)
474
299
2,478
(692)
(645)
(966)
474
Refer to note 8 for details of deferred tax recognised in income in the current year. Tax rates of 25% (2020: 19%) in the UK and
28% (2020: 28%) in South Africa were utilised to calculate year end deferred tax balances.
86 Bisichi PLC
Financial statements Notes to the financial statements
24. SHARE CAPITAL
Authorised: 13,000,000 ordinary shares of 10p each
Allotted and fully paid:
At 1 January and outstanding at 31 December
25. OTHER RESERVES
Equity share options
Net investment premium on share capital in joint venture
2021
Number of
ordinary
shares
2020
Number of
ordinary
shares
10,676,839
10,676,839
2021
£’000
1,300
2020
£’000
1,300
2021
£’000
1,068
2021
£’000
621
86
707
2020
£’000
1,068
2020
£’000
621
86
707
26. SHARE BASED PAYMENTS
Details of the share option scheme are shown in the Directors’ remuneration report on page 33 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 PLC Unapproved Option Schemes:
Subscription
price per share
Period within
which options
exercisable
Number of share
for which options
outstanding at
31 December 2020
Number of
share options
lapsed/surrendered
/awarded
during year
Number of
share for which
options
outstanding at
31 December 2021
87.0p
73.50p
Sep 2015 – Sep 2025
Feb 2018 – Feb 2028
300,000
380,000
-
-
300,000
380,000
Year of grant
2015
2018
There are no performance or service conditions attached to 2015 and 2018 options which are outstanding at 31 December 2021.
Bisichi PLC
8787
Financial statements Notes to the financial statements
26. SHARE BASED PAYMENTS CONTINUED
Outstanding at 1 January
Lapsed/Surrendered during the year
Issued during the year
Outstanding at 31 December
Exercisable at 31 December
27. NON-CONTROLLING INTEREST
As at 1 January
Share of profit/(loss) for the year
Dividends paid
Exchange adjustment
As at 31 December
2021
Weighted
average
exercise
price
79.46p
-
-
2021
Number
680,000
-
-
2020
Number
680,000
-
-
680,000
680,000
79.46p
79.46p
680,000
680,000
2021
£’000
116
215
-
(8)
323
2020
Weighted
average
exercise
price
79.46p
-
-
79.46p
79.46p
2020
£’000
625
(440)
-
(69)
116
The non-controlling interest comprises of a 37.5% interest in Black Wattle Colliery (Pty) Ltd and its wholly owned subsidiary
Sisonke Coal Processing (Pty) Ltd. Black Wattle Colliery (Pty) Ltd is a coal mining company and Sisonke Coal Processing (Pty) Ltd
is a coal processing company both incorporated in South Africa. Summarised financial information reflecting 100% of the
underlying consolidated relevant figures of Black Wattle Colliery (Pty) Ltd’s and its wholly owned subsidiary Sisonke Coal
Processing (Pty) Ltd is set out below.
Revenue
Expenses
Profit/(loss) for the year
Other comprehensive Income
Total comprehensive income for the year
Balance sheet
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets at 31 December
88 Bisichi PLC
2021
£’000
49,225
(47,787)
1,438
-
1,438
9,019
9,329
(14,287)
(1,904)
2,157
2020
£’000
28,555
(31,498)
(2,943)
-
(2,943)
10,130
9,781
(16,915)
(2,224)
772
Financial statements Notes to the financial statements
27. NON-CONTROLLING INTEREST CONTINUED
The non-controlling interest originates from the disposal of a 37.5% shareholding in Black Wattle Colliery (Pty) Ltd in 2010 when
the total issued share capital in Black Wattle Colliery (Pty) Ltd was increased from 136 shares to 1,000 shares at par of R1 (South
African Rand) through the following shares issue:
- a subscription for 489 ordinary shares at par by Bisichi Mining (Exploration) Limited increasing the number of shares held from
136 ordinary shares to a total of 625 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 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.
On 12 April 2022 the total issued share capital in Black Wattle Colliery (Pty) Ltd was increased further from 1000 shares to 1002
shares at par of R1 through the following share issue:
a subscription of 1 “B” Share at par by Bisichi Mining (Exploration Limited);
a subscription of 1 “B” Share at par by Vunani Mining (Pty) Ltd
The “B” shares rank pari passu with the ordinary shares save that they have sole rights to the distributable profits attributable to
certain mining reserves held by Black Wattle Colliery (Pty) Ltd. A non-controlling interest is recognised for all profits distributable to
the “B” shares held by Vunani Mining (Pty) Ltd from the date of issue of the shares (12 April 2022).
Bisichi PLC
8989
Financial statements Notes to the financial statements
28. RELATED PARTY TRANSACTIONS
Related party:
London & Associated Properties PLC (note (a))
West Ealing Projects Limited (note (b))
Dragon Retail Properties Limited (note (c))
Development Physics Limited (note (d))
As at 31 December 2021
London & Associated Properties PLC (note (a))
West Ealing Projects Limited (note (b))
Dragon Retail Properties Limited (note (c))
As at 31 December 2020
At 31 December
During the year
Amounts
owed
to related
party
£’000
Amounts
owed
by related
party
£’000
Costs
recharged
(to)/by
related
party
£’000
Cash paid
(to)/by
related
party
£’000
41
-
156
-
197
43
-
156
199
-
(998)
-
(67)
(1,065)
-
(952)
-
(952)
200
-
(36)
-
164
200
-
(36)
164
(192)
(158)
44
(67)
(373)
(190)
(112)
44
(258)
(a) London & Associated Properties PLC – London & Associated Properties PLC (“LAP”) is a substantial shareholder and parent
company of Bisichi PLC. Property management, office premises, general management, accounting and administration services
are provided for Bisichi PLC and its UK subsidiaries. Bisichi PLC continues to operate as a fully independent company and
currently LAP owns only 41.52% of the issued ordinary share capital. However, LAP is deemed under IFRS 10 to have
effective control of Bisichi PLC for accounting purposes.
(b) West Ealing Projects Limited – West Ealing Projects Limited (“West Ealing”) is an unlisted property company incorporated in
England and Wales. West Ealing is owned equally by the company and London & Associated Properties PLC and is accounted
as a joint venture and treated as a non-current asset investment.
(c) Dragon Retail Properties Limited – (“Dragon”) is owned equally by the company and London & Associated Properties PLC.
Dragon is accounted as a joint venture and is treated as a non-current asset investment.
(d) Development Physics Limited – Development Physics Limited (“DP”) is an unlisted property company incorporated in England
and Wales. DP is owned equally by the company, London & Associated Properties PLC and Metroprop Real Estate Ltd and is
accounted as a joint venture and treated as a non-current asset investment.
Key management personnel comprise of the directors of the company who have the authority and responsibility for planning,
directing, and controlling the activities of the company. Details of key management personnel compensation and interest in share
options are shown in the Directors’ Remuneration Report on pages 32 and 33 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 £189,000 (2020: £97,000). In 2012 a loan was made to one
of the directors, Mr A R Heller, for £116,000. Interest is payable on the Director’s Loan at a rate of 6.14 per cent. There is no fixed
repayment date for the Director’s Loan. The loan amount outstanding at year end was £41,000 (2020: £41,000) and no repayment
(2020: £nil) was made during the year.
90 Bisichi PLC
Financial statements Notes to the financial statements
28. RELATED PARTY TRANSACTIONS CONTINUED
The non-controlling interest to Vunani Mining (Pty) Ltd is shown in note 27. In addition, the Group holds an investment in Vunani
Limited with a fair value of £45,000 (2020: £38,000) and an investment in Vunani Capital Partners (Pty) Ltd of £38,000 (2020:
£nil). Both are related parties to Vunani Mining (Pty) Ltd and are classified as non-current available for sale investments.
29. EMPLOYEES
Staff costs during the year were as follows:
Salaries
Social security costs
Pension costs
Share based payments
The average weekly numbers of employees of the Group during the year were as follows:
Production
Administration
30. CAPITAL COMMITMENTS
Commitments for capital expenditure approved and contracted for at the year end
2021
£’000
6,995
189
307
-
7,491
2021
214
15
229
2021
£’000
-
2020
£’000
5,512
97
281
-
5,890
2020
221
15
236
2020
£’000
485
Bisichi PLC
9191
Financial statements Notes to the financial statements
31. LEASE LIABILITIES AND FUTURE PROPERTY LEASE RENTALS
The lease liabilities are secured by the related underlying assets. The undiscounted maturity analysis of lease payments at 31
December 2021 is as follows:
Within one year
Second to fifth year
After five years
Discounting adjustment
Present value
Mining
Equipment &
Development
costs
£’000
Motor Vehi-
cles
£’000
Head
Lease Prop-
erty
£’000
42
161
91
294
(62)
232
28
21
-
49
(2)
47
13
44
1,336
1,393
(1,218)
175
The present value of minimum lease payments at 31 December 2021 is as follows:
Within one year (Note 19)
Second to fifth year
After five years
Present value
Mining
Equipment &
Development
costs
£’000
Motor Vehi-
cles
£’000
Head
Lease Prop-
erty
£’000
27
205
-
232
27
20
-
47
11
35
129
175
2021
£’000
83
226
1,427
1,736
(1,282)
454
2021
£’000
65
260
129
454
2020
£’000
84
236
1,680
2,000
(1,492)
508
2020
£’000
81
195
232
508
With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as
a right-of-use asset and a lease liability. The Group classifies its right-of-use assets in a consistent manner to its property, plant
and equipment. Lease liabilities due within one year are classified within trade and other payables in the balance sheet.
The Group has one lease for mining equipment in South Africa and one lease for motor vehicles in the United Kingdom. Both
leases have terms of less than 5 years are either non-cancellable or may only be cancelled by incurring a substantive termination
fee. Lease payments for mining equipment are subject to changes in consumer price inflation in South Africa.
The Group has one lease contract for an investment property. The remaining term for the leased investment property is 127 years
(2020: 128 years). The annual rent payable is the higher of £7,500 or 6.25% of the revenue derived from the leased assets.
The Group has entered into rental leases on its investment property portfolio consisting mainly of commercial properties. These
leases have terms of between 1 and 106 years. All leases include a clause to enable upward revision of the rental charge on an
annual basis according to prevailing market conditions.
92 Bisichi PLC
Financial statements Notes to the financial statements
31. LEASE LIABILITIES AND FUTURE PROPERTY LEASE RENTALS CONTINUED
The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:
Within one year
Second year
Third year
Fourth year
Fifth year
After five years
2021
£’000
948
830
776
710
634
9,956
13,854
2020
£’000
814
711
590
536
471
9,562
12,684
32. CONTINGENT LIABILITIES AND POST BALANCE SHEET EVENTS
Bank Guarantees
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:
Rail siding
Rehabilitation of mining land
Water & electricity
2021
£’000
48
1,700
46
2020
£’000
50
1,441
48
Contingent tax liability
The interpretation of laws and regulations in South Africa where the Group operates can be complex and can lead to challenges
from or disputes with regulatory authorities. Such situations often take significant time to resolve. Where there is a dispute and
where a reliable estimate of the potential liability cannot be made, or where the Group, based on legal advice, considers that it is
improbable that there will be an outflow of economic resources, no provision is recognised.
Black Wattle Colliery (Pty) Ltd is currently involved in a tax dispute in South Africa related to VAT. The dispute arose during the
year ended 31 December 2020 and is related to events which occurred prior to the years ended 31 December 2020. As at 13 April
2022, the Group has been advised that it has a strong legal case, that it has complied fully with the legislation and, therefore, no
economic outflow is expected to occur. Because of the nature and complexity of the dispute, the possible financial effect of a
negative decision cannot be measured reliably. Accordingly, no provision has been booked at the year end. At this stage, the
Group believes that the dispute will be resolved in its favour.
Bisichi PLC
9393
Financial statements
Company balance sheet
at 31 December 2021
Fixed assets
Tangible assets
Investment in joint ventures
Other investments
Current assets
Debtors – amounts due within one year
Debtors – amounts due in more than one year
Bank balances
Creditors – amounts falling due within one year
Net current assets
Total assets less current liabilities
Creditors – amounts falling in more than one year
Net assets
Capital and reserves
Called up share capital
Share premium account
Available for sale reserve
Other reserves
Retained earnings
Shareholders’ funds
Notes
35
36
36
37
37
38
38
24
33
2021
£’000
93
665
9,987
10,745
3,636
220
788
4,644
(454)
4,190
14,935
(20)
14,915
1,068
258
-
622
12,967
14,915
2020
£’000
90
665
8,102
8,857
4,782
248
1,810
6,840
(563)
6,277
15,134
(16)
15,118
1,068
258
-
622
13,170
15,118
The loss for the financial year, before dividends, was £203,000 (2020: profit £83,000)
The company financial statements were approved and authorised for issue by the board of directors on 13 April 2022 and signed
on its behalf by:
A R Heller
Director
G J Casey
Director
94 Bisichi PLC
Company Registration No. 112155
Financial statements
Company statement of changes in equity
for the year ended 31 December 2021
Balance at 1 January 2020
Dividend paid
Profit and total comprehensive income for the year
Balance at 1 January 2021
Dividend paid
Profit and total comprehensive income for the year
Balance at 31 December 2021
Share
capital
£’000
1,068
-
-
1,068
-
-
1,068
Share
premium
£’000
258
-
-
258
-
-
258
Other
reserve
£’000
622
Retained
earnings
£’000
Shareholders
funds
£’000
13,194
15,142
-
-
622
-
-
622
(107)
83
13,170
-
(203)
12,967
(107)
83
15,118
-
(203)
14,915
Bisichi PLC
9595
Notes to the financial statements
Financial statements
Company accounting policies
for the year ended 31 December 2021
The following are the main accounting
policies of the company:
• • the disclosure of the remuneration of
key management personnel; and
Basis of preparation
The financial statements have been
prepared in accordance with Financial
Reporting Standard 100 Application of
Financial Reporting Requirements and
Financial Reporting Standard 101
Reduced Disclosure Framework. The
principal accounting policies adopted in
the preparation of the financial
statements are set out below.
The financial statements have been
prepared on a historical cost basis, except
for the revaluation of leasehold property
and certain financial instruments.
Going concern
Details on the Group’s adoption of the
going concern basis of accounting in
preparing the annual financial statements
can be found on page 60.
Disclosure exemptions adopted
In preparing these financial statements
the company has taken advantage of all
disclosure exemptions conferred by FRS
101 as well as disclosure exemptions
conferred by IFRS 2, 7, 13 and 16.
Therefore these financial statements do
not include:
• • certain comparative information as
otherwise required by IFRS;
• • certain disclosures regarding the
company’s capital;
• • a statement of cash flows;
• • the effect of future accounting
standards not yet adopted;
96 Bisichi PLC
• • 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:
Office equipment
10 – 33 percent
Joint ventures
Investments in joint ventures, being those
entities over whose activities the Group
has joint control as established by
contractual agreement, are included at
cost, less impairment.
Other Investments
Investments of the company in
subsidiaries are stated in the balance
sheet as fixed assets at cost less
provisions for impairment.
Other investments comprising of shares
in listed companies are classified at fair
value through profit and loss.
Foreign currencies
Monetary assets and liabilities expressed
in foreign currencies have been
translated at the rates of exchange ruling
at the balance sheet date. All exchange
differences are taken to the profit and
loss account.
Financial instruments
Details on the Group’s accounting policy
for financial instruments can be found on
page 65.
Deferred taxation
Details on the Group’s accounting policy
for deferred taxation can be found on
page 67.
Leased assets and liabilities
Details on the Group’s accounting policy
for leased assets and liabilities can be
found on page 66.
Pensions
Details on the Group’s accounting policy
for pensions can be found on page 65.
Share based remuneration
Details on the Group’s accounting policy
for share based remuneration can be
found on page 65. Details of the share
options in issue are disclosed in the
directors’ remuneration report on page
33 under the heading share option
schemes which is within the audited part
of this report.
Financial statements Notes to the financial statements
33. PROFIT & LOSS ACCOUNT
A separate profit and loss account for Bisichi PLC has not been presented as permitted by Section 408(2) of the Companies Act
2006. The loss for the financial year, before dividends paid, was £203,000 (2020: profit: £83,000)
Details of share capital are set out in note 24 of the Group financial statements and details of the share options are shown in the
Directors’ Remuneration Report on page 33 under the heading Share option schemes which is within the audited part of this report
and note 26 of the Group financial statements.
34. DIVIDENDS
Details on dividends can be found in note 9 in the Group financial statements.
35. TANGIBLE FIXED ASSETS
Cost at 1 January 2021
Additions
Cost at 31 December 2021
Accumulated depreciation at 1 January 2021
Charge for the year
Accumulated depreciation at 31 December 2021
Net book value at 31 December 2021
Net book value at 31 December 2020
Leasehold
Property
£’000
Motor
Vehicles
£’000
Office
equipment
£’000
45
-
45
-
-
-
45
45
69
35
104
24
32
56
48
45
70
-
70
70
-
70
-
-
Total
£’000
184
35
219
94
32
126
93
90
Leasehold property consists of a single unit with a long leasehold tenant. The term remaining on the lease is 38 years. Motor
Vehicles comprise wholly of Right of Use leased assets.
36. INVESTMENTS
Net book value at 1 January 2021
Invested during the year
Repayment
Unrealised surplus/deficit over cost
Net book value at 31 December 2021
Joint
ventures
shares
£’000
Shares in
subsidiaries
£’000
Other
investments
£’000
665
6,356
-
-
-
-
-
-
665
6,356
1,746
1,630
(446)
701
3,631
Total
£’000
8,102
1,630
(446)
701
9,987
Investments in subsidiaries are detailed in note 15. In the opinion of the directors the aggregate value of the investment in
subsidiaries is not less than the amount shown in these financial statements.
Other investments comprise of £3,631,000 (2020: £1,746,000) shares in listed companies.
Bisichi PLC
9797
Financial statements Notes to the financial statements
37. DEBTORS
Amounts due within one year:
Amounts due from subsidiary undertakings
Other debtors
Joint venture
Prepayments and accrued income
Amounts due in more than one year:
Deferred taxation
2021
£’000
2020
£’000
2,421
94
1,065
56
3,636
220
220
3,709
85
952
36
4,782
248
248
Amounts due within one year are held at amortised cost. The Group applies a simplified approach to measure the loss allowance
for trade receivables using the lifetime expected loss provision. The Group applies a general approach on all other receivables. The
general approach recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial
recognition. The company has reviewed and assessed the underlying performance and resources of its counterparties including its
subsidiary undertakings and joint ventures.
38. CREDITORS
Amounts falling due within one year:
Joint venture
Other taxation and social security
Other creditors
Lease Liabilities
Accruals and deferred income
Amounts falling due in more than one year:
Lease Liabilities
2021
£’000
2020
£’000
156
64
164
26
44
454
20
156
63
188
29
127
563
16
Lease liabilities comprise of leases on Motor vehicles with remaining leases of 1-3 years. With the exception of short-term leases
and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability.
98 Bisichi PLC
Financial statements Notes to the financial statements
39. RELATED PARTY TRANSACTIONS
At 31 December
Related party:
Black Wattle Colliery (Pty) Ltd (note (a))
Ninghi Marketing Limited (note (b))
As at 31 December 2021
Black Wattle Colliery (Pty) Ltd (note (a))
Ninghi Marketing Limited (note (b))
As at 31 December 2020
At 31
December
Amounts owed
by related party
£’000
During the year
Costs
recharged /
accrued (to)/
by related
party
£’000
Cash paid
(to)/ by
related party
£’000
(637)
(102)
(739)
(1,331)
(102)
(1,433)
(923)
-
(923)
(958)
-
(958)
1,617
-
1,617
-
-
-
(a) Black Wattle Colliery (Pty) Ltd – Black Wattle Colliery (Pty) Ltd is a coal mining company based in South Africa.
(b) Ninghi Marketing Limited – Ninghi Marketing Limited is a dormant coal marketing company incorporated in England & Wales.
Black Wattle Colliery (Pty) Ltd and NInghi Marketing Limited are subsidiaries of the company.
In addition to the above, the company has issued a company guarantee of R20,061,917 (2020: R20,061,917) (South African Rand)
to the bankers of Black Wattle Colliery (Pty) Ltd in order to cover bank guarantees issued to third parties in respect of the
rehabilitation of mining land.
A provision of £102,000 has been raised against the amount owing by Ninghi Marketing Limited in prior years as the company is dormant.
In 2012 a loan was made to one of the directors, Mr A R Heller, for £116,000. Further details on the loan can be found in Note 28 of
the Group financial statements.
Under FRS 101, the company has taken advantage of the exemption from disclosing transactions with other wholly owned Group
companies. Details of other related party transactions are given in note 28 of the Group financial statements.
41. EMPLOYEES
The average weekly numbers of employees of the company during the year were as follows:
Directors & administration
Staff costs during the year were as follows:
Salaries
Social security costs
Pension costs
Share based payments
2021
£’000
2020
£’000
5
1,426
189
31
-
1,646
5
758
97
28
-
883
Bisichi PLC
9999