Bisichi PLC Annual Report 2022
A tribute to
Sir Michael Heller Kt MA
Chairman 1981-2023
It was with great sadness that the Board of Bisichi announced
the death of its Chairman, Sir Michael Heller Kt MA (1936-2023)
on the 30th January 2023.
Cambridge-educated Sir Michael qualified as an accountant,
but became a businessman and philanthropist of considerable
stature, whose achievements were recognised with a knighthood
in 2013. Instrumental in the development of several companies,
including Bisichi, Sir Michael’s focussed direction and decision
making, wise advice and moral compass, were pivotal to the
Company’s success and will be sorely missed. Meticulously
watching cash flow, and ensuring that the Company always
had regular income, was the cornerstone of Sir Michael’s
business strategy. To a very great degree, this explains why
Bisichi has performed so well when so many of its peers no
longer exist.
Fortunately, despite being unwell and in hospital, Sir Michael
was able to appreciate the Company’s success in 2022. In his
typically humorous fashion, he took enormous pleasure in
telling the nurses at his bedside how well the Company had
done. The greatest legacy that the Board can give him is to
continue the work that he so tirelessly put in to the development
of the Company, and to continue its growth. Thank you Sir
Michael for everything that you have done: the Company is
greatly indebted to you.
Contents
STRATEGIC REPORT
2 Chairman’s Statement
4
Principal activity, strategy
& business model
5 Mining Review
7 Sustainable development
19 Principal risks & uncertainties
24 Financial & performance review
GOVERNANCE
31 Directors and advisors
32 Five year summary
32 Financial calendar
33 Directors’ report
39
Statement of the Chairman
of the remuneration committee
40 Annual remuneration report
54 Audit committee report
56 Valuers’ certificates
57 Directors’ responsibilities statement
Independent auditor’s report
58
FINANCIAL STATEMENTS
68 Consolidated income statement
69
Consolidated statement of other
comprehensive income
70 Consolidated balance sheet
72
Consolidated statement of changes
in shareholders’ equity
73 Consolidated cash flow statement
74 Group accounting policies
82 Notes to the financial statements
108 Company balance sheet
109 Company statement of changes in equity
110 Company accounting policies
Strategic report
The Directors present
the Strategic Report of the
company for the year ending
31 December 2022. 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.
Bisichi PLC
11
Strategic Report
Strategic Report
Chairman’s Statement
I am very pleased to report to shareholders that for the year ended 31 December 2022,
your company made a profit before interest, tax, depreciation and amortisation (EBITDA)
of £40.0million (2021: £5.8million) and an operating profit before depreciation, fair
value adjustments and exchange movements (Adjusted EBITDA) of £39.4million
(2021: £5.0million). These strong earnings for the Group can be attributed to a
strong performance from Sisonke Coal Processing, the Group’s South African coal
processing operation which benefited from significantly improved prices in all its
markets.
During the year, a disconnect in global
energy markets contributed to an
increase in the weekly Free on Board
(FOB) coal price from Richards Bay Coal
Terminal (API4 price) from $125 per
metric tonne at the end of 2021 to a peak
of over $360 in August. Overall, the API4
price averaged $273 in 2022 compared
to $125 in 2021. The higher export prices
achievable for our coal along with higher
domestic prices, particularly during the
second half of the year, contributed
significantly to the increase in Group
revenue and profitability during the year.
Revenues for the year would have been
even better if we had not encountered
constraints in transporting coal for export
on the South African rail network,
constraints which were beyond our
control. For this reason, exports during
the year decreased to 262,000 metric
tonnes compared to 320,000 metric
tonnes in 2021.
At Black Wattle, the Group’s South
African coal mining operation, our
transition into new mining areas impacted
adversely our coal production, particularly
during the first half of the year. As
previously reported, the transition into the
new mining areas was completed in July
last year and in the second half of the
year Black Wattle achieved improved
production of 0.52million metric tonnes
compared to 0.30million metric tonnes in
the first half of the year. The mine
achieved production of 0.82million metric
tonnes in 2022 compared to 1.05million
metric tonnes in 2021. The increases in
our reserves, plant and equipment that
are evident on the balance sheet are
mainly attributable to the costs of
completing the development of the new
mining areas which will be mined
throughout 2023.
Despite the lower coal production from
Black Wattle, at Sisonke Coal Processing
we were able maintain the levels of coal
processed. During the year the Group
sold 1.29million metric tonnes compared
to 1.45million metric tonnes of coal in
2021. For the year, the Group reported
£95.1million in revenue (2021:
£50.5million) with the higher prices
achievable for our coal offsetting the
lower quantity of coal sold.
Looking forward into 2023, we have
already seen coal prices in the export
market come back down to similar levels
last seen at the beginning of 2022. With
the outlook for global energy demand
less certain, your management will be
focussing on improving production levels
at Black Wattle and keeping operating
costs low. We continue to mitigate the
uncertainties in transporting coal for
export on the South African rail network
by maintaining diversified sales through
the domestic market.
We are pleased to include in our annual
report this year our new climate change
report on page 11. The Group recognises
that climate change represents one of the
most significant challenges facing the
world today and supports the goals of the
Paris Agreement and the UN Framework
Convention on Climate Change. The
Group recognises the need, and is
committed to, diversifying its future
business activities into areas outside of
coal. The Group is continually looking at
alternative independent mining and
renewable energy related opportunities,
as well as new opportunities to add to our
existing UK property and listed equity
investment portfolios. In the interim, we
continue to work closely with Vunani
Mining, our BEE partner in Black Wattle
and Sisonke Coal processing, in being
responsible stewards of our legacy coal
operations taking into account the
climate-related risks outlined in our
climate report and the impact these risks
may have on all our stakeholders.
2 Bisichi PLC
Strategic Report
In the UK, we have seen rental revenue
from our retail property portfolio remain
stable in 2022. The Group billed revenue
from our directly owned property
portfolio of £1.11million (2021:
£1.12million) during the year. The Group
continues to hold its joint venture
development investment in West Ealing,
with London & Associated Properties
PLC and Metroprop Real Estate Ltd. A
final decision on whether to sell the land
or build out the flats has yet to be taken.
As previously announced, we are pleased
to welcome John Heller to the Board of
Bisichi PLC as a non-executive director.
The appointment took effect on the 29
March 2023. John is the Chairman and
Managing Director of London &
Associated Properties PLC which holds a
41.6% stake in Bisichi and a Director of
Intu Debenture PLC. John’s valuable
experience in property investment and
management, makes him an excellent
addition to the Board. John’s knowledge
and experience will enhance the Group’s
strategy of growing the company’s
existing and future spread of business
interests and investments, and will help
to offset the loss of our late Chairman, Sir
Michael Heller.
Finally, in light of the strong results achieved
for the year and the performance of our
South African operations, the Directors
propose a total year-end dividend per
share of 12p (2021: 6p) made up a final
dividend of 4p (2021: 4p) and a special
dividend of 8p (2021: 2p). The final and
special dividends proposed will be
payable on Friday 28 July 2023 to
shareholders registered at the close of
business on 7 July 2023. This takes the
total dividends per share for the year to
22p (2021: 6p).
On behalf of the Board, our late Chairman,
and shareholders, I would like to thank all
of our staff for their hard work and
dedication during the course of the year.
Andrew Heller
Executive Chairman & Managing
Director
26 April 2023
Bisichi PLC
33
33
Strategic Report
Principal activity, strategy
& business model
The company carries on business as a mining company and its principal activity is coal
mining and coal processing 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
remaining South African coal
reserves in an economical and
sustainable manner that delivers
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 continues to oversee
responsibly its existing mining and
processing operations in South
Africa as well as actively to seek and
evaluate new alternative mining
related opportunities. The Group
aims to achieve this through new
commercial arrangements.
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.
4 Bisichi PLC
Strategic Report
Mining review
Despite mining and logistical challenges, 2022 was an unprecedented year in terms
of performance for our South African coal mining and processing operations. Higher
coal prices contributing strongly to the profitability of the Group. With more uncertainty
in the coal market going into 2023, management will be focussing on improving
production levels and keeping operating costs low.
Production and operations
The transition to new mining areas at
Black Wattle, our South African mining
operation, impacted production in 2022,
particularly in the first half of the year. For
the year, the mine achieved production of
0.82million metric tonnes compared to
1.05million metric tonnes in 2021. Looking
forward, both our mining contractors have
fully transitioned into the new mining area
where mining conditions are expected to
improve steadily over the course of 2023.
In addition, management will be focussing
on keeping operating costs low in light of
global inflationary pressures that started
to impact our operations during the
course of 2022.
We continue to work closely with Vunani
Mining, our BEE partner in Black Wattle
and Sisonke Coal processing, in being
responsible stewards of our legacy coal
operations, which have a life of mine of
seven years, taking into account the
climate related risks outlined in our
climate report on page 11 and the impact
these risks may have on all our
stakeholders.
Main trends/markets
The disconnect in global energy markets
in 2022 had a significant impact on
demand and prices achievable for our
coal over the year. In the international
market the average weekly price of Free
On Board (FOB) Coal from Richard Bay
Coal Terminal (API4 price) averaged $273
in 2022 compared to $125 in 2021.
The higher prices, along with a stronger
US Dollar compared to the South African
Rand, resulted in the Group achieving an
average Rand price of R3,770 per tonne
of export coal sold from the mine in 2022
compared to R1,129 in 2021. 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. During the second half of
the year exports were limited by
constraints in transporting coal for export
on the South African rail network, exports
volumes from our South African
operations decreased during the year to
262,000 metric tonnes compared to
320,000 metric tonnes in 2021.
In light of the export constraints, the
Group continued to supply the majority of
its coal to the South African domestic
market in 2022. The strong demand in the
international market contributed to higher
domestic prices achievable for our coal,
particularly in the second half of the year.
For the year, the Group achieved an
average domestic price of R774 per tonne
coal sold compared to R470 in 2021.
Domestic sales volumes from our South
African operations decreased slightly
during the year to 1.03million metric
tonnes (2021: 1.13million metric tonnes)
mainly due to a build of coal stocks at
year end.
In 2022, the Group achieved an average
Rand price per tonne of coal sold of
R1,384 compared to R616 in 2021. The
higher coal prices contributed to the
increase in Group revenue during the year
offsetting lower sales volumes.
Looking forward into 2023, in the first
quarter we have seen API4 prices average
$145 and uncertainties remain,
particularly with regard to the outlook for
the international coal price as well as the
impact of continued constraints in
transporting coal for export on the South
African rail network. In light of this,
management will be focussing in 2023 on
improving production levels, maintaining a
diversified sales market, and keeping
operating costs low.
Bisichi PLC
55
Strategic Report Principal activity, strategy & business model
During the year the Group continued with
its various employee and community
related bursary and training initiatives.
One of the key highlights for the year was
the successful completion by Takalani
Sandani, Mine Manager of Black Colliery,
in his bursary studies. On behalf of the
Group, the Board congratulates Takalani
in obtaining his Masters of Business
Administration from the Gordon Institute
of Business Science, an affiliate of the
University of Pretoria.
Prospects
Management would like to thank all our
South African employees and
stakeholders for their significant
contribution to the Group’s performance
in 2022. Going forward, your
management are optimistic that 2023 will
be another successful year for our South
African operations.
Takalani Sandani
at his Graduation
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 2022:
• • The Group’s South African operations
recorded 2 Lost time Injuries during
2022 (2021: Two).
• • 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.
6 Bisichi PLC
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 2022:
• • 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 2 Lost time Injuries during
2022.
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.
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.
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.
Bisichi PLC
77
Strategic Report Sustainable development
• • 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.
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.
• • 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 was completed.
• • Various upgrades were initiated at the
Evergreen School nearby to Black
Wattle.
8 Bisichi PLC
Black Wattle has implemented various
community initiatives including:
• • 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 2023,
making interlocking blocks for building
homes
• • One HDSA Male completed his
University studies in the 2022
academic year.
• • Two HDSA females completed their
University studies in the 2022
academic year.
• • Two local community HDSA members
were enrolled for the new academic
year.
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.
Strategic Report Sustainable development
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:
• • 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;
Employment & diversity
In the UK, the Board of Bisichi PLC at 31 December 2022 comprised of:
• • Utilise the existing skills base for the
empowerment of HDSAs; and
• • Expand the skills base of HDSAs in
order to serve the community.
Men
Women
Not specified/prefer not to say
White British or other White (including minority white
groups)
Mixed/Multiple Ethnic Groups
Asian/Asian British
Black/African/Caribbean/Black British
Other ethnic group, including Arab
Number
of board
members
Percentage
of the board
Number
of senior
positions on
the board
Number in
executive
management
Percentage
of Executive
management
7
0
0
100%
0%
0%
3
0
0
4
0
0
100%
0%
0%
Number
of board
members
Percentage
of the board
Number
of senior
positions on
the board
Number in
executive
management
Percentage
of Executive
management
6
0
1
0
0
86%
0%
14%
0%
0%
3
0
0
0
0
4
0
0
0
0
100%
0%
0%
0%
0%
The above data has been collected through self-reporting by the Board members. Questions asked include gender identity or sex
and ethnic background.
Bisichi PLC
99
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.
Climate Change reporting
The Group recognises that climate
change represents one of the most
significant challenges facing the world
today and supports the goals of the Paris
Agreement and the UN Framework
Convention on Climate Change.
Our aim is to:
• • minimize our contribution to
greenhouse gas emissions;
• • to consider and plan for the physical
and transitional risks of climate change
on our operations; and
• • to work with stakeholders, including
local government and communities, to
mitigate the impact of climate-related
challenges.
Strategic Report Sustainable development
• • An additional 8 disabled HDSA women
continued their training on ABET levels
one to four.
• • Four HDSA persons were enrolled for
apprenticeships in 2022; these are
categorised as follows:
~ One HDSA female employee was
enrolled for her apprenticeship.
~ Two HDSA females and one HDSA
male from the local community were
enrolled for their apprenticeships.
• • Further to the above, we confirm that
one HDSA Male completed his bursary
studies in 2022, while two HDSA
females continued their bursary studies
in 2022.
• • Two HDSA females were allocated new
Bursaries for 2022.
Highlights for 2022 for Sisonke Coal
Processing:
• • One employee was trained in ABET
(Adult Basic Educational Training) on
various levels
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.
At 31 December 2022 the Company did
not meet the target of at least 40% of
the individuals on its board of directors
are women and at least one of the senior
positions on the Board are held by a
women. The Group is committed to
improving upon its gender and diversity
targets at all employment levels within the
Group through a required build-up of
sufficient talent pools, training up of
employees and targeted recruitment
policies. 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:
• • 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.
In terms of directors, employees and
gender representation, at the year end
the Group had 9 directors (8 male and 2
from a minority ethnic or HDSA
Background, 1 female from a minority
ethnic or HDSA Background), 6 senior
managers (5 male and 2 from a minority
ethnic or HDSA Background, 1 female
from a minority ethnic or HDSA
Background) and 228 employees (158
male and 134 from a minority ethnic or
HDSA Background, 70 female and 66
from a minority ethnic or HDSA
Background).
Black Wattle Colliery has successfully
submitted their annual Employment
Equity Report to the Department of
Labour. In terms of staff training some
highlights for 2022 were:
• • 1 employee was trained in ABET (Adult
Basic Educational Training) on various
levels;
10 Bisichi PLC
Strategic Report Sustainable development
Task Force on Climate-related
Financial Disclosures
Bisichi is committed to managing the
impact of its operations on the planet and
the impact of climate change on its
operations, particularly to ensure
continued operational and financial
resilience in a changing world and
marketplace. Bisichi understands the
importance of these matters to its
investors, partners, and regulatory
authorities and, as required by the Listing
Rules, has adopted the Task Force on
Climate-related Disclosure’s framework
for communicating climate related
financial risks.
The Group’s primary operations are coal
mining and processing in South Africa.
Hydrocarbons are a key source of energy
and heat for the foreseeable future and
the Company’s operations have
contributed to meeting market demand
for coal, particularly in South Africa.
However, the Group’s operations form
part of a wider energy and natural
resources market which is in the process
of transitioning, in conjunction with the
published government, national and
supra-national policies, to net-zero.
In the current year, the Group has aligned
its climate disclosures in this Strategic
Report to the four Task force on Climate-
related Financial Disclosures (“TCFD”)
recommendations and the 11
recommended disclosures as outlined
below. This is the first year the Group has
published a report in line with the TCFD
Recommendations and the Group has
endeavoured to make disclosures
consistent with the TCFD recommended
disclosures taking into consideration the
short to medium term life of its South
African coal operation and the size and
complexity of the Group as a whole. The
Group continues to develop and enhance
its infrastructure, strategies, structures,
resources and tools to manage the risks
and opportunities presented by climate
change and to ensure its ongoing climate
change reporting disclosure is fully
consistent in all areas with the TCFD
recommended disclosures.
TCFD PILLAR
Governance
TCFD
RECOMMENDED
DISCLOSURE
Board’s oversight
of climate risk and
opportunities.
BISICHI PLC
The Board has ultimate responsibility for the monitoring and development of the Group’s
approach to climate risk and opportunities.
In light of the size of the Group, ESG matters are considered as part of the Group’s
regular board meetings and at other appropriate points during the year.
The Board has developed and implemented a Climate Change Policy and monitor the
content, effectiveness and implementation of this Policy on a regular basis.
The Group’s Climate Change Policy can be found on the Group’s website at www.bisichi.
co.uk.
Short, medium and long term strategic decisions, including those on capital allocation
and portfolio management, are considered by Group management who make
recommendations to the Board. Climate related issues and policy are included as
significant factors for consideration in the decision making process, both in the
management recommendation and in the Board’s consideration of the relevant issue.
On-going climate related issues are integrated into the Group’s business risk
management process and reporting thereof to the Board and Audit Committee.
The Group has regard to best practice in its area of operations, its health and safety and
environmental obligations and seeks to ensure high standards of business conduct in
its operations. It will review compliance with the TCFD Recommendations on an ongoing
basis, and report on its performance on a yearly basis.
Bisichi PLC
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Strategic Report Sustainable development
TCFD PILLAR
Governance
TCFD
RECOMMENDED
DISCLOSURE
Management’s role
in assessing and
managing climate-
related risks and
opportunities.
Strategy
Climate-related
risks and
opportunities the
Group has identified
over the short,
medium, and long
run.
BISICHI PLC
Responsibility for the application of this Policy rests with, but is not limited to, all employees
and contractors engaged in relevant activities under the Group’s operational control. The
Group’s managers are responsible for promoting and ensuring compliance with this Policy
and any related individual site-level policies and practices.
At our South African operations, management have commenced engagement with key
stakeholders in order to ensure awareness of our climate change policy as well as the
potential impact of climate change on our environment and operations. We continue
our collaboration with our contractors on GHG Emission Reporting, and we are actively
looking for opportunities to partner with our stakeholders to drive the uptake of carbon
neutral solutions.
For material strategic or financial decisions, the Group may consider procuring expert
advice from third party consultants on the impact in the short, medium and long term
of the decision, and ensure that such information is fully considered as part of the
evaluation of the relevant matter.
The Group considers the current life of mine of its South African operations to fall within a
short to medium term horizon. Within this horizon, climate change transition risks may impact
our South African coal mining and processing operations. Risks include:
•• coal price and demand volatility;
•• availability and cost of financing and third party services such as insurance;
•• delays or restrictions to regulatory approvals;
•• early retirement of our coal processing and mining operations; and
•• Carbon pricing and taxes, that may create additional costs through the value chain.
The Group have assessed physical climate risk profiles produced by the World Bank,
particularly in relation to our South African operations. The Group considers the physical
risks of variations in climate over the current life of mine of our South African operations to
be mainly limited to an increased risk of seasonal flooding that may impact the operating
efficiency, costs and revenues of our mining and processing operations.
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Strategic Report Sustainable development
TCFD PILLAR
TCFD
RECOMMENDED
DISCLOSURE
BISICHI PLC
In a longer term horizon, and in a scenario where the useful life of our South African
operations is extended, the above short to medium term transitional risks are expected to
continue to apply. In addition, in a scenario, such as the International Energy Association’s
(“IEA”) Pathway to Net Zero by 2050 (“NZE 2050”), where climate policies are effectively
implemented that support a transformation to net zero emissions by 2050 and limiting
the rise of global temperatures to 1.5°C by the end of the century, policies will lead
to significant coal demand decline over the longer term. This in turn will impact the
carrying value and long term viability of our South African coal operations as well as the
stakeholders and communities reliant on our operations. Extreme weather events, over
the long term in South Africa, such as floods, and droughts, as well as changes in rainfall
patterns, temperature, and storm frequency will also affect the operating efficiency, costs
and revenues of our mining and processing operations, supply chains and impact the
communities living close to our operations.
Clean coal research and technology initiatives such as carbon capture may result in
opportunities to increase the useful life of our South African coal mining and processing
operations. In addition, the clean energy transition provides opportunities for the Group
to diversify its business activities and equity investment portfolio into renewable and
extractive industries that will benefit from and are critical to the transition to a clean
energy system
The main sources of scope 1 & 2 Green House Gas (GHG) emissions for the Group have
been associated with our South African coal mining and processing operations, namely
due to fuel combustion and electricity usage. Improvements in the cost competitiveness
of lower emission sources of energy provide opportunities to lower overall operating
costs at our operations as well as reduce overall GHG Emissions.
In the UK we have identified the following material physical and transitional risks related
to our UK Retail portfolio:
•• Long term physical risk through changes in climate, flood risk and extreme weather;
and
•• Short-term transition risk from emerging regulation related to energy performance
(“EPC”) and enhanced disclosures.
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Strategic Report Sustainable development
TCFD PILLAR
Strategy
TCFD
RECOMMENDED
DISCLOSURE
Impact of climate-
related risks and
opportunities
on businesses,
strategy, and
financial planning.
14 Bisichi PLC
BISICHI PLC
Management have incorporated and regularly review the following strategies and
procedures in relation to it South African coal operations:
•• Review of the impact of climate change and the global transition to clean energy,
particularly in relation to the current life of mine of the Group’s coal operations;
•• Regular research and analysis of the coal market demand outlook;
•• Regular research and analysis on the outlook of the South African coal mining industry
and climate change regulation including mining regulation, energy procurement and
licensing, and carbon taxing;
•• Regular communication with financial service providers and suppliers on any future
changes to availability and cost of services;
•• Regular research and analysis on the progress of clean coal technology and related
regulatory initiatives; and
•• Regular dialogue and seeking collaboration with governments and local communities
and other stakeholders on climate change-related challenges.
The Board has identified the need to mitigate GHG emission heavy sources of electricity
usage at our coal washing plant. Management are currently in the process of evaluating
opportunities to reduce these emissions taking into particular consideration the financial
viability and long term sustainability of the projects.
The below areas have been identified where GHG emissions can be further reduced through:
•• Minimising land clearance for new project facilities;
•• Adoption of mitigation strategies for preserving integrity of environment;
•• Minimising tree felling;
•• The use of modern, energy and fuel efficient equipment;
•• The inclusion of the impact of GHG emissions as an evaluation criteria in the selection of
mining contractors, suppliers and equipment. Particular consideration will be given to the
choice of vehicles used for the mine fleet, employee transportation and the haulage fleet.
Where possible energy and fuel efficiency will be a factor in the selection of vehicles as
this will not only reduce GHG emissions but also reduce operating costs. In addition to the
efficiency of the fleet itself, opportunities will be sought for improving the use of the vehicles.
•• Scheduling of excavation and haulage activities to optimise activities and avoid double
handling, where this is operationally practical; and
•• The upgrading of energy-intensive machinery over time will be used to improve efficiency
and reduce CO2 emissions compared to machinery that has been removed.
Further energy efficiency opportunities will also be investigated.
Potential water scarcity has increased management focus on opportunities to increase
the usage efficiency of our existing water supply and water recycling systems. The
introduction of a closed loop filter press system for coal fines in 2019 and additional
other work concluded or planned on our water recycling systems at our coal processing
facility will result in a lowering of our overall cost of water and the environmental footprint
of our operations. Increased risks of flooding have been incorporated at planning stage in
new opencast mining areas that have been opened.
Strategic Report Sustainable development
TCFD PILLAR
TCFD
RECOMMENDED
DISCLOSURE
BISICHI PLC
Strategy
Resilience of
strategy, taking
into consideration
different climate-
related scenarios,
including a 2°C or
lower scenario.
Transition and physical risks related to climate change are regularly discussed at Board
level, particularly those related to the long term viability of the Group’s South African
coal operations and the future allocation of capital. The Board regularly considers the
need for coal as an energy source both globally and in South Africa over the life of mine
of our operations and in its long term planning. The Board is committed to responsible
stewardship of our legacy South African coal assets taking into account the impact
climate change related risks may have on all our local stakeholders. We recognise the
need to collaborate with government, employees and communities, to ensure a just
transition for our stakeholders through the transition to a low carbon economy.
The Board regularly evaluates and continues to seek opportunities to diversify its
business activities and equity investment portfolio, particularly into renewable and
extractive industries that predominantly mine commodities identified by the IEA as
critical in the transition to a clean energy system. Any significant developments will
be reported to shareholders in due course.
The Board continue to monitor and regularly review adherence by the Group to
changes to UK EPC. The Group have incorporated the ongoing impact of EPC
regulatory standards into its decision making process.
Management have incorporated climate scenarios into our strategic operational
planning and review process. We have assessed the resilience of our coal operations
compared to the IEA’s NZE2050 Scenario, which sets out what additional measures
would be required over the next ten years to put the world as a whole on track for
net zero emissions by mid-century. The Scenario indicates a significant coal demand
decline over the longer term impacting the potential commercial longevity of the
Group’s South African operations. In addition we have assessed physical climate risk
profiles for our South African operations obtained via the World Bank Group’s Climate
Change Knowledge Portal. The outcomes of scenario testing and physical climate
profiling have been incorporated into the long term strategic planning and decision
making processes of the Group.
Over the short to medium term, considering the potential impact of transitional climate
risks on the Group’s South African operations, the Group’s climate strategy and policy
is regularly scrutinised by senior management and the Board in regard to any changes
in coal demand outlook and climate regulatory policy that may impact our operations
over the current life of mine. A recent example being the Just Energy Transition
Investment Plan (“JET IP”) announced by the South African Government for 2023-2027.
The Board encourages senior and local management to assess principal and emerging
climate-related risks on a regular basis. Risks identified are to be reported to and
discussed at Board level and incorporated into the strategy and planning of the Group.
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Strategic Report Sustainable development
TCFD PILLAR
Risk Management
TCFD
RECOMMENDED
DISCLOSURE
Processes for
identifying and
assessing climate
related risks.
Risk Management
Processes for
managing climate-
related risks.
Risk Management
Processes for
identifying,
assessing, and
managing climate-
related risks are
integrated into
the overall risk
management.
16 Bisichi PLC
BISICHI PLC
The Group’s risk management processes are developed, implemented and reviewed
by the Board, who retain ultimate responsibility for them.
In addition to the Group’s management of its principal risks and uncertainties, climate
change impacts are mainly considered from two environmental perspectives, the
impact of our South African coal mining and processing operations on the climate
and the effect of global climate change on our operations and stakeholders.
Heavy sources of GHG emissions have been identified from our annual Greenhouse
Gas emissions recording and reporting.
The Board and Senior management remain in regular communication with local
regulatory bodies, climate research providers, coal market analysts, suppliers, and
services providers to ensure climate related risks and changes in regulatory policy
are identified and assessed on a regular basis. Senior and local management in
South Africa are encouraged by the Board to identify local climate related risks and
changes in regulatory policy that may impact our South African coal operations.
Management continually engage with governments and local communities and other
stakeholders on climate change-related challenges impacting the local area and the
South African coal industry at large.
The Board and Senior management co-ordinate the Group’s analysis and planning
of the effects of climate change on our business. The Board regularly discusses
the impact of any risks identified through the organisation, particularly in relation to
material matters that may impact the viability of the Group’s coal operations. The
Board regularly reviews and analyses coal market and outlook research, particularly
in relation to targets set out in local climate policy such as JET IP and global climate
scenarios such as NZE 2050.
The mitigation of GHG emissions and identification of climate related risks has been
integrated into our corporate policy, project and procurement evaluation criteria at
our South African operations to ensure it is consistently applied and managed.
The Group continuously monitors and reports key performance indications relating to
environmental matters, including the location of CO2 emissions, their levels and intensity.
On an ongoing basis, the Group assesses the impact of carbon pricing, climate
regulation and taxation on going concern assumptions, the Group’s current and
future strategy and operations.
New or evolving climate change risks identified by both senior and local management
are to be reported to and discussed at Board level and incorporated into the strategy,
planning and climate policy of the Group.
Where possible, plans to mitigate the effect of climate change on our operations
and our local communities will be integrated into the mines regulatory environmental
management and social and labour plans.
Strategic Report Sustainable development
TCFD PILLAR
TCFD
RECOMMENDED
DISCLOSURE
BISICHI PLC
Metrics and Targets Metrics used
by the Group to
assess climate
related risks and
opportunities in line
with its strategy and
risk management
process.
Metrics and Targets Scope 1, Scope 2
and, if appropriate,
Scope 3
greenhouse gas
(GHG) emissions,
and the related
risks.
Metrics and Targets Targets used by the
Group to manage
climate-related risks
and opportunities
and performance
against targets.
A financial segmentation of the Group’s South African coal mining and processing
assets that are impacted by the climate related risks and opportunities outlined above
can be found on page 82.
The Group recognises that its ability to reduce overall carbon emissions is
constrained at present by the main segment of it business activities, being coal
mining and processing in South Africa. The Group has, however, sought to
appropriately target its emission reduction strategy to the elements of its operations
where a meaningful reduction in greenhouse gas emissions can be effected, and this
will be reflected in the targets set by the Group in due course.
The Group measures and report our CO2 emissions across the Group including a
breakdown of UK and South African coal operations. See below for disclosure of
emissions during the year.
The Group is committed to measuring and reporting our scope 1 and 2 greenhouse
gas emissions, see below for disclosure of emissions during the year.
Scope 3 emissions are not currently measured given the size and life of mine of
the Group’s South African coal operations and the uncertainty and impracticality in
accurately measuring such emissions throughout the value chain. The Group will
continue to assess the above approach as part of its continued review of compliance
with the TCFD Recommendations and taking into account any material changes in
future business activities.
Over 99% of the Group’s GHG Emissions relate to our South African coal operations
which has a current life of mine of 7 years.
In the short term, the Group’s continues to evaluate areas where GHG emissions
can be further reduced, particularly scope 2 emissions related to the heavy sources
of electricity usage at our coal washing plant. Once the Group has identified the
scope of further potential reductions, their time, capital cost and practicability of
implementation, short term targets for the Group will be reassessed.
Over the long term, as part of the Group’s business strategy, the Board continues
to evaluate opportunities to diversify its business activities. In turn, targets related
to GHG emissions will be re-evaluated in line with any future changes in the Group’s
planned operating activities.
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Strategic Report Sustainable development
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 Bisichi Mining plc 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 2022.
Any estimates included in our totals are derived from actual data which have been extrapolated to cover the full reporting periods.
Our reporting includes our energy use and emissions associated with our UK office, which are minimal (2.5 tonnes of CO2e).
The Group’s carbon footprint:
Emissions source:
Emissions from the combustion of fuel or the operation of any facility including fugitive emissions
from refrigerants use
Emissions resulting from the purchase of electricity, heat, steam or cooling by the company for its
own use (location based)
Total gross emissions
Of which:
UK
South Africa
Intensity:
Tonnes of CO2 per £ sterling of revenue
Tonnes of CO2 per tonne of coal produced
Energy consumption used to calculate above emissions
Of which UK
2022
CO2e
Tonnes
2021
CO2e
Tonnes
39,564
41,960
12,267
12,040
51,831
54,000
3
51,828
0.0005
0.0629
kWh
2
53,998
0.0011
0.0516
kWh
87,292,816
12,341
83,079,614
10,186
18 Bisichi PLC
Strategic Report
Principal risks & uncertainties
PRINCIPAL RISK
PERFORMANCE AND MANAGEMENT OF THE RISK
COAL PRICE AND VOLUME 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, disconnections in global energy markets and
global economic volatility 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
climate related risks such as regulatory changes related to
climate change and governmental CO2 emission commitments.
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.
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 2021 and 2022.
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 of volatility
in global energy markets, economic volatility and climate change
related risks may have on the Group’s mining operations and
future investment decisions as outlined in the Group’s climate
change reporting on page 11.
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.
Bisichi PLC
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Strategic Report Principal risks & uncertainties
PRINCIPAL RISK
CURRENCY RISK
PERFORMANCE AND MANAGEMENT OF THE 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.
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 2022 and 2021.
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.
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
which came 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.
20 Bisichi PLC
Strategic Report Principal risks & uncertainties
PRINCIPAL RISK
PERFORMANCE AND MANAGEMENT OF THE RISK
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.
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.
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.
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Strategic Report Principal risks & uncertainties
PRINCIPAL RISK
PERFORMANCE AND MANAGEMENT OF THE RISK
CLIMATE CHANGE RISK
Climate change is a material issue that can affect our South
African coal business through:
- changes in carbon pricing, taxes, and coal mining regulation;
- extreme climatic events;
- access to capital and services and allocation thereof; and
- reduced demand and prices for coal.
Transition and physical risks related to climate change are
regularly discussed and acted upon at Board and management
levels, particularly those related to the viability of the Group’s
South African coal operations and the future allocation of capital.
Further details of the Group’s performance and management of
climate change related risk is set out in the Group’s climate
change report on page 11.
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.
CASHFLOW RISK
Commodity price risk, currency volatility and the uncertainties
inherent in mining may result in favourable or unfavourable
cashflows.
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.
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 24 for details of the
property and investment portfolio performance.
22 Bisichi PLC
Strategic Report Principal risks & uncertainties
PRINCIPAL RISK
PERFORMANCE AND MANAGEMENT OF THE RISK
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”), counter inflationary regulatory
measures, as well as the current 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 , counter inflationary regulatory measures 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 28 for details of the property portfolio performance.
Bisichi PLC
2323
Strategic Report
Financial & performance review
The movement in the Group’s Adjusted EBITDA from £5.0million in 2021 to
£39.4million in 2022 can mainly be attributed to higher prices achievable for our
coal from the Group’s South African operations. This offset the higher operating
costs and lower coal sale volumes in 2022.
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 indicator
The key performance indicators for the Group are:
For the Group:
Operating profit before depreciation, fair value adjustments and exchange movements (adjusted EBITDA)
EBITDA
Profit before tax
For our property investment operations:
Net property valuation
Net property revenue
For our mining activities:
Operating profit before depreciation, fair value adjustments and exchange movements (adjusted EBITDA)
EBITDA
Mining production
Quantity of coal sold
24 Bisichi PLC
2022
£’000
39,363
39,980
38,014
10,465
1,108
38,126
37,856
Tonnes
‘000
824
1,287
2021
£’000
5,028
5,849
2,501
10,525
1,119
4,266
4,145
Tonnes
‘000
1,046
1,447
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 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
Mining
£’000
93,413
(5,201)
(38,008)
(12,078)
38,126
(270)
-
-
37,856
-
37,856
(663)
(1,093)
Mining
£’000
49,226
(5,569)
(32,438)
(6,953)
4,266
(121)
-
-
4,145
-
4,145
Property
£’000
1,108
-
-
(456)
652
-
(60)
-
592
(89)
503
(210)
-
Other
£’000
590
-
-
(5)
585
-
-
1,036
1,621
-
1,621
-
-
Property
£’000
Other
£’000
1,119
-
-
(527)
592
-
255
-
847
(125)
722
175
-
-
(5)
170
-
-
812
982
-
982
2022
£’000
95,111
(5,201)
(38,008)
(12,539)
39,363
(270)
(60)
1,036
40,069
(89)
39,980
(873)
(1,093)
38,014
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
Bisichi PLC
2525
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 £40.0million (2021: £5.8million).
The movement compared to the prior
year can mainly be attributed to the
EBITDA from our mining activities of
£37.9million (2021: £4.1million). In
addition, the Group’s fair value loss,
related to our UK property was £0.1million
(2021: gain £0.3million) and gains related
to investments held at fair value through
profit and loss were £1.0million (2021:
£0.8million).
The Group reported a profit before tax of
£38.0million (2021: £2.5million) for the
year resulting in an increase in taxation
for the year to £11.9million (2021: £0.8
million). This resulted in the Group
achieving an overall profit for the year
after tax of £26.1million (2021:
£1.7million), of which £17.6million (2021:
£1.5million) 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
Operating profit before other operating costs and depreciation
Other operating costs (excluding depreciation)
Operating profit before depreciation, fair value adjustments and
exchange movements (adjusted EBITDA)
Exchange movements
EBITDA
South African Rand
2022
R’000
2021
R’000
1,886,276
1,004,444
(105,023)
(767,490)
1,013,763
(113,641)
(661,929)
228,874
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
UK Sterling
2022
£’000
93,413
(5,201)
(38,008)
50,204
(12,078)
38,126
(270)
37,856
2022
‘000
824
2022
R
2,162
(931)
1,231
2021
£’000
49,226
(5,569)
(32,438)
11,219
(6,953)
4,266
(121)
4,145
2021
‘000
1,046
2021
R
852
(633)
219
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.
26 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
Domestic
‘000
1,025
Domestic
R’000
Export
‘000
262
Export
R’000
2022
‘000
1,287
2022
R’000
Revenue
795,132
1,091,144
1,886,276
Net Revenue per tonne of coal sold
Mining and washing costs per tonne of
coal sold
R
774
R
3,770
Operating profit per tonne of coal sold before other
operating costs and depreciation
R
1,384
(596)
788
Domestic
‘000
1,127
Domestic
R’000
530,905
R
470
Export
‘000
320
Export
R’000
2021
‘000
1,447
2021
R’000
473,539
1004,444
R
1,129
R
616
(457)
158
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
R616 per tonne of coal sold in 2021 to
R1,384 in 2022, attributable to the
average price increases achieved in both
the export and domestic market. A
decrease in mining production from Black
Wattle and an increase in coal inventories
at the end of the year offset an increase
in buy-in coal processed during the year
resulting in the quantity of coal sold for
the year decreasing to 1.287million
tonnes (2021: 1.447million tonnes).
Overall, revenue from the Group’s South
African mining operations increased
during the year to R1.886billion compared
to revenue of R1.005billion in 2021 with
the increase in revenue per tonne of coal
sold offsetting the lower coal sales
volumes, particularly in the export market.
Mining and washing costs per tonne of
coal sold during the year increased from
R457 per tonne in 2021 to R596 per
tonne in 2022 mainly due to increases in
buy-in coal costs and mining costs per
tonne from Black Wattle. This resulted in
an increase in total mining and washing
costs for the Group to R767.4million
(2021: R661.9million).
Other operating costs (excluding
depreciation) of £12.08million (2021:
£6.95million) include general
administrative costs and 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 higher salaries and wages
costs attributable to the improved
financial performance of the Group in the
same period. Overall costs in South Africa
were in line with management’s
expectations and local inflation.
In summary, the movement in the Group’s
Adjusted EBITDA from £5.0million in
2021 to £39.4million in 2022 can mainly
be attributed to higher prices achievable
from the Group’s South African coal
processing operations. This offset the
higher mining, washing and operating
costs and lower coal sales volumes
incurred in 2022. A further explanation of
the mines operational performance can
be found in the Mining Review on page 5.
Non-controlling interest Black Wattle
As previously reported, 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,
extends the life of mine of Black Wattle to
seven 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
2727
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 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
102.
UK property investment
Performance
The Group’s portfolio is managed actively
by London & Associated Properties plc.
Rental performance was marginally below
levels achieved in 2022. Net property
revenue (excluding joint ventures and
service charge income) across the
portfolio decreased during the year to
£1.108million (2021: £1.119million). The
property portfolio was externally valued at
31 December 2022 and the value of UK
investment properties attributable to the
Group at year end decreased marginally
to £10.465million (2021: £10.525million).
Joint venture property investments
The Group holds a £0.6million (2021:
£0.6million) 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 £1.019million (2021:
£1.040million).
The Group continues to hold a £0.4million
(2021: £0.5million) 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 £4.1million
(2021: £3.7million). The joint venture has
obtained planning consent for a
residential development of 56 flats. During
2022 the joint venture explored the
possibility of a consented land sale but
did not receive sufficiently attractive
offers during a period of extreme building
costs inflation to persuade the venture to
sell. A final decision on whether to sell the
land or build out the flats has yet to be
taken and we look forward to updating
shareholders further in due course.
The Group continues to hold a one third
joint venture investment 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 registered for planning
permission for its development. The
planning application submitted in 2022
was rejected in January 2023 despite
being recommended for approval by the
planning officer. The joint venture has
appealed this decision and we will update
shareholders on progress in due course.
At year end, the negative carrying value of
the investment held by the Group was
£14,000 (2021: £3,000).
Overall, the Group achieved net property
revenue of £1.2million (2021: £1.2million)
for the year which includes the company’s
share of net property revenue from its
investment in joint ventures of £108,000
(2021: £88,000).
Other Investments
During the year the Group’s non-current
investments held at fair value through
profit and loss increased from £3.6million
in 2021 to £12.6million due to net
additions during the year of £8.2million
(2021: £1.2million) and gains from
investments of £0.7million (2021:
£0.7million). The investments comprise of
£6.8million (2021: £1.56million) of
investments listed on stock exchanges in
the United Kingdom and £5.8million
(2021: £2.07million) of investments listed
on overseas stock exchanges. The
Group’s listed investments are primarily in
entities involved in extractive and energy
related (including renewable energy)
business activities.
28 Bisichi PLC
Strategic Report Financial & performance review
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)
Year ended
31 December
2022
£’000
Year ended
31 December
2021
£’000
39,768
30,698
(16,584)
(7,206)
6,908
482
(25)
7,365
10,590
(3,225)
7,365
5,028
4,432
(2,706)
(271)
1,455
(1,078)
105
482
3,018
(2,536)
482
Cash flow generated from operating
activities increased compared to the prior
year to £30.7million (2021: £4.4million).
This can mainly be attributed to the
increase in operating profit during the
year of £39.0million (2021: £3.4million)
net of taxes paid of £7.9million (2021:
refund of £0.2million) and an increase in
inventories of £4.0million (2021: decrease
£2.1million). The operating profit can
mainly be attributed to the improved coal
revenue per tonne achieved during the
year.
Investing cashflows primarily reflect the
net acquisitions of listed equity
investments of £8.1million (2021:
£0.9million) and capital expenditure
during the year of £8.5million (2021:
£1.8million) which can mainly be
attributable to mine development costs at
Black Wattle. As at year end the Group’s
mining reserves, plant and equipment had
a carrying value of £16.4million (2021:
£9.0 million) with capital expenditure
being offset by depreciation of £1.1million
(2021: £2.5milion) and exchange
translation movements of £0.6million
(2021: £0.4million) for the year.
Cash outflows from financing activities
includes a net increase in borrowings of
£0.5million (2021: decrease £0.3million).
In addition, dividends were paid during
the year to equity shareholders of
£0.6million (2021: £Nil) and to minority
shareholders of £7.0million (2021: £Nil).
Overall, the Group’s cash and cash
equivalents increased during the year by
£6.9million (2021: £1.5million). The
Group’s net balance of cash and cash
equivalents (including bank overdrafts) at
year end was £7.4million (2021:
£0.5million).
The Group has considerable financial
resources available at short notice
including cash and cash equivalents
(excluding bank overdrafts) of
£10.6million (2021: £3.0 million) and
listed investments of £13.5million (2021:
£4.3million) as at year end. The above
financial resources totalling £24.1million
(2021: £7.3million).
The net assets of the Group reported as
at year end were £35.6million (2021:
£17.8million) and total assets at
£63.8million (2021: £38.1million).
Liabilities increased from £20.3million to
£28.2million during the year primarily due
to an increase in trade and other
payables from £10.7million to £13.3million
as well as an increase in tax payable from
£0.7million to £4.3million.
Further details on the Group’s cashflow
and financial position are stated in the
Consolidated Cashflow Statement on
page 73 and the Consolidated Balance
Sheet on page 70 and 71.
Bisichi PLC
2929
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 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. 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.
30 Bisichi PLC
30
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 19;
•• 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
34.
Future prospects
In the first quarter of the 2023, we have
seen the API4 price average $145 and
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. In light of this, management will
be focussing on improving production
levels, maintaining a diversified sales
market and keeping operating costs low.
The Group continues to seek and
evaluate opportunities to transition into
alternative mining related opportunities
through new commercial arrangements.
In the UK, management is looking forward
to progressing its property development
opportunities in West Ealing and
Development Physics as well as seeking
other opportunities to expand upon on its
property and equity investment portfolios.
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 38.
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
Garrett Casey
Finance Director
26 April 2023
Governance
MANAGEMENT TEAM
OTHER DIRECTORS AND ADVISORS
* ANDREW R HELLER MA, ACA
(Chairman & 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)
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)
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.
JOHN A HELLER
(Appointed 29 March 2023)
(Non-executive)
John Heller was appointed a Director
on 29 March 2023. John Heller is the
Chairman and Chief Executive of
London & Associated Properties PLC
which holds a 41.6% stake in Bisichi.
John Heller has extensive knowledge
and experience in property investment
and management.
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
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
International telephone:
+44 (0) 371 664 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 8.00 a.m. – 5.30
p.m., Monday to Friday
excluding public holidays in
England and Wales.
Website:
https://www.linkgroup.eu
Email:
shareholderenquiries@
linkgroup.co.uk
Company registration number:
341829 (England and Wales)
Bisichi PLC
3131
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
2022
£’000
95,111
38,976
38,014
37,127
887
39,980
39,363
10,465
13,631
24,096
886
24,982
8,820
33,802
316.6p
22.00p
2021
£’000
50,520
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
2020
£’000
29,805
(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
2019
£’000
48,106
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
2018
£’000
49,945
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
06 June 2023
Late August 2023
Late April 2024
Annual General Meeting
Announcement of half-year results to 30 June 2023
Announcement of results for year ending 31 December 2023
32 Bisichi PLC
Governance
Directors’ report
The directors submit their report together with the audited
financial statements for the year ended 31 December 2022.
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 joint venture
investments in two UK residential
property developments.
The results for the year and state of
affairs of the Group and the company at
31 December 2022 are shown on pages
68 to 113 and in the Strategic Report on
pages 2 to 30. 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 30.
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 30.
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 in West
Ealing.
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.
Climate Change Reporting and
Greenhouse Gas Emissions
The Group’s climate change report and
details on its greenhouse gas emissions
for the year ended 31 December 2022
can be found on page 11 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 3 the directors are proposing the
payment of a final dividend of 4p (2021:
4p) and a special dividend of 8p (2021:
2p) per share for 2022. An interim
dividend for 2022 of 10p (Interim 2021:
0p) has been paid on 3 February 2023.
The total dividend per ordinary share for
2022 will therefore be 22p (2021: 6p) per
ordinary share.
Investment properties and
other properties
The investment property portfolio is
stated at its open market value of
£10,465,000 at 31 December 2022
(2021: £10,525,000) 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
£4,812,000 (2021: £4,787,000).
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 (ceased to be a
director on 30 January 2023) , A R Heller,
G J Casey, C A Joll, R J Grobler (a South
African citizen), J A Sibbald and J Wong.
Bisichi PLC
3333
Governance Directors’ report
Mr J Heller was appointed as a non-
executive director by the Board on 29
March 2023 and offers himself for
re-election. Mr J Heller is the Chairman
and Managing Director of London &
Associated Properties PLC which holds a
41.6% stake in Bisichi with extensive &
valuable experience in property
investment and management. The board
recommends the re-election of Mr J
Heller.
The director retiring by rotation is Mr GJ
Casey who offers himself for re-election.
Mr GJ Casey has been an executive
director of the company since 2010. He is
chartered accountant and has a contract
of employment determinable at three
months’ notice. The board recommends
the re-election of Mr GJ Casey.
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 42 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
31 December 2022:
London & Associated Properties PLC –
4,432,618 shares representing 41.52 per
cent. of the issued capital. (Sir Michael
Heller (Estate) is a shareholder of London
& Associated Properties PLC).
34 Bisichi PLC
Sir Michael Heller
(Estate) –
330,117 shares
representing 3.09 per
cent. of the issued
capital.
A R Heller –
785,012 shares
representing 7.35 per
cent. of the issued
capital.
1,916,154 shares
representing 17.95
per cent. of the issued
share capital.
Stonehage
Fleming
Investment
Management Ltd –
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 2022
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
The Board currently comprises the joint
executive chairman and managing
director, two other executive directors
and four non-executive directors. Their
details appear on page 31. 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 57. 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 39 to 53.
•• 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 executive 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 54.
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/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
3535
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.
Board and board committee meetings
The number of meetings during 2022 and attendance at regular Board meetings and
Board committees was as follows:
Meetings
held
Meetings
Attended
Sir Michael Heller
A R Heller
G J Casey
R J Grobler
C A Joll
J A Sibbald
J Wong
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
Board
5
1
2
5
2
5
2
5
5
2
1
2
5
2
1
2
5
4
1
2
5
2
5
2
1
5
2
1
2
2
0
1
1
5
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
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
36 Bisichi PLC
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.
Governance Directors’ report
There were no significant issues identified
during the year ended 31 December 2022
(and up to the date of approval of the
report) concerning material internal
control issues. The directors confirm that
the Board has reviewed the effectiveness
of the system of internal control as
described during the period.
Communication with
shareholders
Communication with shareholders is a
matter of priority. Extensive 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
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 Tuesday, 6
June 2023 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 26 April 2023 (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 26 April 2023 (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).
Bisichi PLC
3737
Governance Directors’ report
The authority granted by resolution 10 will
expire on 31 August 2024 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.
Donations
No political donations were made during
the year (2021: £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 24 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 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 coal market
conditions for the Group’ will remain at a
stable and profitable level through 2023.
The directors therefore have a reasonable
expectation that the mine will achieve
positive levels of cash generation for the
Group in 2023. 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. 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
£1.143million secured against its
investment property, see note 14. The bank
loan is secured by way of a first charge on
specific freehold property at a value of
£2.03 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
September 2020, but has been extended
to October 2023. Santander have
indicated that they are willing to provide a
new term loan and we expect to complete
this in the near future.
In 2022 a disconnect in global energy
markets resulted in higher global energy
prices. Although the volatility in global
energy markets in 2023 is uncertain, the
Directors at present do not foresee 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.
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
26 April 2023
38 Bisichi PLC
Governance
Statement of the Chairman
of the remuneration committee
The remuneration committee presents its report for the year
ended 31 December 2022. 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
26 April 2023
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 2023. During the
year, in light of the performance of the
Group, the board determined to award
bonuses and share options to certain
executive directors of the Group. In
addition, on 1st September 2022 the
Company bought out 680,000 options
over ordinary shares outstanding which
were exercisable. As an alternative to the
exercise of the options, the Company
cancelled the share options for a
consideration avoiding the need for the
Company to allot shares, for shares to be
sold in the market to meet the tax
liabilities arising from the exercise and
therefore the potential impact to the
Company’s share price and on
shareholders.
The current remuneration policy, which
details the remuneration policy for
directors, 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. A further resolution amending
the policy was approved by shareholders
at a general meeting of the Company
held on 16 June 2022. The resolution
authorises the directors of the Company
to enter into agreements to cancel and
surrender options over Ordinary Shares.
The approvals will continue to apply for a
3 year period up to the AGM on 6 June
2023. The remuneration committee
considered the overall performance of the
group as well as of each director in the
year ended 31 December 2022 and
remuneration including bonuses were
awarded in line with the performance
conditions of the remuneration policy.
The second part, is the new remuneration
policy report which can be found on page
48. The new remuneration policy is
largely in line with the previous policy and
is subject to a binding vote which will be
proposed to shareholders at the AGM on
6 June 2023. Once approved, the
approval of the new policy will apply for a
3 year period effective from the
conclusion of the AGM on 6 June 2023.
Bisichi PLC
3939
Governance
Annual remuneration report
The following information has been audited:
Single total figure of remuneration for the year ended 31 December 2022:
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
Total
200
495
194
218
52
3
55
-
42
17
17
-
3
-
580
1,100
575
356
-
-
-
1,217
79
2,611
-
-
-
-
-
-
-
-
Notional
Value of
Vesting
Share
Options
-
273
273
-
-
-
-
Total
Fixed
Remuner-
ation
£’000
Total
Variable
Remuner-
ation
£’000
200
537
230
254
52
6
55
580
1,373
848
356
-
-
-
Total
2022
£’000
780
1,910
1,078
610
52
6
55
-
-
19
19
-
-
-
38
546
4,491
1,334
3,157
*Members of the remuneration committee for the year ended 31 December 2022
The notional value of vesting share options are based on the value of the share options at grant. The awards are not subject to
performance in line with the scheme terms.
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
Total
83
495
185
205
40
3
50
1,061
-
34
17
11
-
3
-
65
-
400
200
176
-
-
-
776
-
-
-
-
-
-
-
-
*Members of the remuneration committee for the year ended 31 December 2021
40 Bisichi PLC
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
Governance Annual remuneration report
Summary of directors’ terms
Executive directors
A R Heller
G J Casey
R J Grobler
Non-executive directors
C A Joll
J A Sibbald
J Wong
J Heller
Date of
contract
Unexpired
term
Notice
period
January 1994
June 2010
April 2008
Continuous
Continuous
Continuous
February 2001 Continuous
October 1988
Continuous
October 2020 Continuous
Continuous
March 2023
3 months
3 months
3 months
3 months
3 months
3 months
3 months
Pension schemes and incentives
Two (2021: Two) directors have benefits under money purchase pension schemes. Contributions in 2022 were £37,869 (2021:
£35,177), 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 the company granted options over ordinary shares in the Company of 10 pence (the “Options”) to the following
directors of the Company, under the Company’s Unapproved Executive Share Option Scheme 2012 (“the Scheme”), as set out below:
• Andrew Heller: 380,000 options granted on 1 September 2022 at an exercise price of £3.52 per share
• Garrett Casey: 380,000 options granted on 1 September 2022 at an exercise price of £3.52 per share
The exercise price of 352 pence per share was based on the midmarket closing price of the Company’s shares on 31 August
2022, the date prior to the grant. The above Options are subject to the terms and conditions set out in the rules of the Scheme,
and subject to the memorandum and articles of association of the Company. Further details of the Scheme are outlined below
under Share option schemes. The above options were valued at £547,200 at date of grant using the Black-Scholes-Merton model.
These Options are exercisable at any time during the next 10 years from the dates of grant stated above. No consideration has
been paid for the granting of these Options.
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.
The 2012 Scheme
A R Heller
A R Heller
G J Casey
G J Casey
A R Heller
G J Casey
Number of share options
Option
price*
1 January
2022
Options
granted/
(Surrendered)
in
2022
31
December
2022
Exercisable
from
Exercisable
to
87.01p
73.50p
87.01p
73.50p
352.00p
352.00p
150,000
150,000
150,000
230,000
-
-
(150,000)
(150,000)
(150,000)
(230,000)
380,000
380,000
18/09/2015 17/09/2025
-
- 06/02/2018 06/02/2028
-
18/09/2015 17/09/2025
- 06/02/2018 06/02/2028
380,000 01/09/2022 31/08/2032
380,000 01/09/2022 31/08/2032
*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. On 1st September 2022, the Company entered into an
agreement with Andrew Heller and Garrett Casey to cancel the options granted in 2015 and 2018 under the Scheme. The
Company paid each director a cash payment in consideration for cancelling the options. The cash payment was calculated by
reference to the closing midmarket share price on 31 August 2022 less the relevant exercise price. The aggregate consideration
paid by the Company to effect the cancellations was £1,853,270.
Bisichi PLC
4141
Governance Annual remuneration report
Payments to past directors
No payments were made to past directors in the year ended 31 December 2022 (2021: £nil).
Payments for loss of office
No payments for loss of office were made in the year ended 31 December 2022 (2021: £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
31.12.2022
1.1.2022
31.12.2022
148,783
785,012
-
148,783
785,012
-
40,000
40,000
-
-
-
-
-
-
181,334
-
-
-
-
-
-
1.1.2022
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
2022 was 305p (2021: 60p). During
the year the share price ranged
between 81p and 375p.
)
d
e
s
a
b
e
r
(
e
c
i
r
P
e
r
a
h
S
400
350
300
250
200
150
100
20
0
42 Bisichi PLC
– Bisichi Mining
– FTSE All Share
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
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 2013 to 31 December 2022.
Year
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
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
1,637
929
551
1,035
1,073
898
850
912
862
614
Annual bonus payout
against maximum
opportunity*
%
74%
27%
0%
34%
34%
25%
22%
22%
22%
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
Base
Salary
2022
Benefits
2022
Bonuses
2022
Base
Salary
2021
Benefits
2021
Bonuses
2021
Base
Salary
2020
Benefits
2020
Bonuses
2020
0%
24%
0%
55%
141%
0%
5%
6%
N/A
175%
188%
102%
Executive:
Sir Michael Heller 1
A R Heller 2
G J Casey 2
R Grobler 2
Non-Executive:
C A Joll
J A Sibbald
J Wong 3
J Heller 4
Employee remuneration on a full-time equivalent basis:
Employees of the
Company 5
30%
0%
10%
N/A
0%
0%
0%
N/A
0%
0%
0%
N/A
478%
47%
0%
0%
0%
20%
6%
0%
0%
0%
N/A
8%
0%
(39%)
(10%
3%
0%
0%
0%
N/A
0%
N/A
N/A
N/A
0%
0%
0%
N/A
(26%)
N/A
0%
0%
3%
(7%)
5%
0%
N/A
N/A
1%
0%
40%
18%
(17%)
0%
0%
N/A
N/A
(100%)
(100%)
(100%)
(100%)
0%
0%
N/A
N/A
33%
(100%)
1 Bonus changes for 2022 for Sir Michael Heller are disclosed as not applicable as no bonus was awarded to the director in 2021.
2 Bonus changes for 2021 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.
3 Mr J Wong was appointed as a non-executive Director on 15 October 2020 so the annual change is not applicable for 2020 and was apportioned for 2021.
4 Mr J Heller was appointed as a non-executive Director on 29 March 2023 so the annual change is not applicable.
5 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
4343
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)
2022
£’000
11,991
2,348
2021
£’000
7,491
641
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 a resolution amending the policy was approved by shareholders at a general meeting of the Company held on 16 June
2022. The resolution authorises the directors of the Company to enter into agreements to cancel and surrender options over
Ordinary Shares. 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 2022. 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 16 June 2022, 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. In addition, a further resolution amending the policy was approved by shareholders at a
general meeting of the Company held on 16 June 2022. The resolution authorises the directors of the Company to enter into
agreements to cancel and surrender options over Ordinary Shares. The results of the votes above are detailed below:
Resolution to approve the Remuneration Report (16 June 2022)
Resolution to approve the Remuneration Policy (9 July 2020)
Resolution to authorises the directors of the Company to enter into agreements to
cancel and surrender options over Ordinary Shares. (16 June 2022)
% of votes
for
% of votes
against
No of votes
withheld
73.85%
69.87%
100%
26.15%
30.13%
0%
7,174
-
-
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.
44 Bisichi PLC
Governance Annual remuneration report
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 41 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.
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
OPPORTUNITY AND PERFORMANCE CONDITIONS
EXECUTIVE DIRECTORS
Base salary
To recognise:
Skills
Responsibility
Accountability
Experience
Value
Pension
To provide
competitive
retirement
benefits
Considered by
remuneration committee
on appointment.
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
Reviewed annually
Paid monthly in
cash
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
director’s contract
of employment.
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)
Company contribution offered at up to 10% of base
salary as part of overall remuneration package.
No specific performance conditions are attached to
pension contributions.
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 2022 is shown in the table on
page 40.
Bisichi PLC
4545
Governance Annual remuneration report
ELEMENT PURPOSE
POLICY
OPERATION
OPPORTUNITY AND PERFORMANCE CONDITIONS
Annual
Bonus
To reward and
incentivise
Share
Options
To provide
executive
directors with
a long-term
interest in the
company
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
Granted under
existing schemes
(see page 41)
The remuneration
committee
determines the
level of bonus on
an annual basis
applying such
performance
conditions and
performance
measures as
it considers
appropriate
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 41).
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.
46 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
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
No benefits offered
except to one non-
executive director
who is eligible for
health cover (see
annual remuneration
report page 40)
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.
The committee retains
the discretion to
approve changes in
contractual benefits
in exceptional
circumstances or
where factors outside
the control of the Group
lead to increased costs
(e.g. medical inflation)
The costs associated with the benefit offered is
closely controlled and reviewed on an annual basis.
No director will receive benefits of a value in excess
of 30% of his base salary.
No specific performance conditions are attached to
contractual benefits.
Share
Options
Non-executive directors
do not participate in the
share option schemes
Bisichi PLC
4747
Governance Annual remuneration report
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.
In addition to above, during the year a resolution amending the policy was approved by shareholders at a general meeting of the
Company held on 16 June 2022. The resolution authorises the directors of the Company to enter into agreements to cancel and
surrender options over Ordinary Shares.
Details of remuneration of other company employees can be found in Note 29 to the financial statements.
Remuneration policy
The remuneration policy below is the group’s new remuneration policy on directors’ remuneration, which will be proposed for a
binding vote at the 2023 AGM. If approved it is intended that the policy take effect from the conclusion of the AGM on 6 June
2023, and will apply to remuneration determined on or after that date. The previously determined remuneration (determined under
the company’s remuneration policy approved at the 2020 AGM) will continue to apply until that time. In the absence of approval of
the new remuneration policy at the 2023 AGM the previous policy shall continue to apply.
The remuneration of the Company’s executive directors is determined by the remuneration committee. In the decision making
process for the determination, review and implementation of the company’s remuneration policy, the remuneration committee has
taken the following into account:
• The need to attract, retain and motivate individuals of a calibre who will ensure successful leadership and management of the
company
• The group’s general aim of seeking to reward all employees fairly according to the nature of their role and their performance
• Remuneration packages offered by similar companies within the same sector
• The need to align the interests of shareholders as a whole with the long-term growth of the group
• The need to align the determination, review and implementation of the company’s remuneration policy with the long term
strategy and success of the business.
• The need to be flexible and adjust with operational changes throughout the term of this policy
• The need to ensure a link between remuneration and the long term success of the group; and
• The need to consider factors beyond the control of management in determining final outcomes.
The remuneration of non-executive directors is determined by the board, and takes into account additional remuneration for
services outside the scope of the ordinary duties of non-executive directors.
In determining the remuneration for each executive director, the remuneration committee has, and in the determination of the fees
payable to non-executive directors, the Board has, had regard to potential conflicts of interest in the decision making process, and
has sought to mitigate these as far as is possible given the company’s size, nature and stage of operations.
The remuneration policy contains no significant revisions compared with the previous policy other than rates which have been
amended after taking into consideration inflation and the increase in size of the Group.
48 Bisichi PLC
Governance Annual remuneration report
Future Policy Table
The below new remuneration policy table is subject to approval by shareholders at the 2023 AGM:
ELEMENT PURPOSE
POLICY
OPERATION
OPPORTUNITY AND PERFORMANCE CONDITIONS
EXECUTIVE DIRECTORS
Base salary
To recognise:
Skills
Responsibility
Accountability
Experience
Value
Reviewed annually
Paid monthly in cash
Considered by
remuneration committee
on appointment.
Set at a level considered
appropriate to attract,
retain motivate and
reward the right
individuals.
No individual director will be awarded a base salary
in excess of £1,200,000 per annum.
No specific performance conditions are attached
to base salaries.
Pension
To provide
competitive
retirement
benefits
Company contribution
offered at up to 10%
of base salary as part
of overall remuneration
package.
Benefits
To provide a
competitive
benefits
package
Annual
Bonus
To reward and
incentivise
Contractual benefits
can include but are not
limited to:
Car or car allowance
Group health cover
Death in service cover
Permanent health
insurance
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 contribution payable
by the company is
included in the director’s
contract of employment.
Paid into money
purchase schemes
Company contribution offered at up to 10%
of base salary as part of overall remuneration
package.
No specific performance conditions are attached
to pension contributions.
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 2022 is shown in the table on
page 40.
The remuneration
committee determines
the level of bonus on an
annual basis applying
such performance
conditions and
performance measures
as it considers
appropriate
The current maximum bonus opportunity will not
exceed 200% of base salary in any one year, but
the remuneration committee reserves the power to
award up to 300% in an exceptional year.
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.
Bisichi PLC
4949
Governance Annual remuneration report
ELEMENT PURPOSE
POLICY
OPERATION
OPPORTUNITY AND PERFORMANCE CONDITIONS
Share
Options
To provide
executive
directors with
a long-term
interest in the
company
Granted under existing
schemes (see page 41)
and new schemes
Offered at appropriate
times by the
remuneration
committee
Entitlement to share options is not subject to any
specific performance conditions.
Share options will be offered by the remuneration
committee as appropriate 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, surrendered, lapsed or has
otherwise become incapable of exercise.
The company currently has one
Share Option Scheme (see page 41).
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.
The Board is authorised under this policy to enter
into agreements with holders of options over
ordinary shares in the capital of the Company to
cancel or surrender the Options in consideration
of the payment by the Company to the holder
of the Option of cash up to a maximum of the
difference between the exercise price of the
Option and the closing market price on the
business day immediately prior to the day on which
the Company enters into that agreement with the
relevant holder of the Options.
50 Bisichi PLC
Governance Annual remuneration report
ELEMENT PURPOSE
POLICY
OPERATION
OPPORTUNITY AND PERFORMANCE CONDITIONS
NON-EXECUTIVE DIRECTORS
Base salary To recognise:
Skills
Experience
Value
Reviewed annually
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 individual director will be awarded a base salary
in excess of £125,000 per annum.
No specific performance conditions are attached
to base salaries.
Pension
Benefits
No pension offered
No benefits offered
except
to one non-executive
director who is eligible
for health
cover (see annual
remuneration report
page 40)
The committee retains
the discretion to
approve changes in
contractual benefits
in exceptional
circumstances or
where factors outside
the control of the Group
lead to increased costs
(e.g. medical inflation)
The costs associated with the benefit offered
is closely controlled and reviewed on an annual
basis.
No director will receive benefits of a value in
excess of 30% of his base salary or £10,000
whichever is the higher.
No specific performance conditions are attached
to contractual benefits.
Share
Options
Non-executive directors
do not participate in the
share option schemes
Notes to the future policy table
In order to ensure that shareholders have sufficient clarity over director remuneration levels, the company has, where possible,
specified a maximum that may be paid to a director in respect of each component of remuneration. 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. Any differences in the types of remuneration available for directors and other employees
reflect common practice and market norms. The bonus targets for general employees of the Group are more focused on annual
targets that further the company’s interests. The maximum bonus opportunity for employees and directors alike is based on the
seniority and responsibility of the role undertaken.
Bisichi PLC
5151
Governance Annual remuneration report
Remuneration scenarios
An indication of the possible level of remuneration that would be received by each current Executive Director in the year
commencing 1 January 2023 in accordance with the directors’ remuneration policy is shown below.
All performance targets relate to one financial year, and therefore there are no targets which would be impacted by share price
appreciation.
A Heller:
G.Casey:
2,500
2,000
0
0
0
£
’
1,500
1,000
500
0
£2,022
£1,037
73%
48%
52%
27%
£537
100%
900
800
700
600
500
400
300
200
100
0
0
0
0
£
’
£811
72%
£487
53%
£230
100%
47%
28%
R Grobler:
1000
0
0
0
£
’
900
800
700
600
500
400
300
200
100
0
£908
72%
£431
42%
59%
28%
£254
100%
Minimum
On target
Maximum
Minimum
On target
Maximum
Minimum
On target
Maximum
Bonus
Assumptions
Minimum
Consists of base salary, benefits and pension. Base salary, benefits and pension for 2023 are assumed at the levels included in the
single total figure remuneration table for the year ended 31 December 2022 on page 40.
On target
Based on the average percentage bonus awarded to the individual in the three years ending on 31 December 2022. As outlined in
the policy table above, the remuneration committee has discretion to award bonuses of up to 200% of base salary in any one year
(up to 300% in an exceptional year). Base salary, benefits and pension for 2023 are assumed at the levels included in the single
total figure remuneration table for the year ended 31 December 2022 on page 40.
Maximum
Based on maximum remuneration receivable of 300% of base salary awarded as bonus in an exceptional year. Base salary,
benefits and pension for 2023 are assumed at the levels included in the single total figure remuneration table for the year ended 31
December 2022 on page 40.
Approach to recruitment remuneration
All appointments to the board are made on merit. The components of a new director’s remuneration package (who is recruited
within the life of the approved remuneration policy) would comprise base salary, pension, benefits, annual bonus and opportunity to
be granted share options as outlined above and the company’s approach to such appointments are detailed with in the future
policy table above. The company will pay such levels of remuneration to new directors that would enable the company to attract
appropriately skilled and experienced individuals that is not in the opinion of the remuneration committee excessive. The company
has no pre-determined policy for buyouts of previous awards, and each case will be determined on merit, having regard to all
relevant circumstances at the time.
52 Bisichi PLC
Governance Annual remuneration report
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 41 of the annual remuneration report) are set in line
with market practice and of a length considered sufficient to ensure an effective handover of duties should a director leave the
company. All directors’ contracts as amended from time to time, have run from the date of appointment. Service contracts are kept
at the registered office.
Policy on payment for loss of office
There are no contractual provisions agreed prior to 27 June 2012 that could impact on a termination payment. Termination
payments will be calculated in accordance with the existing contract of employment or service contract. It is the policy of the
remuneration committee to issue employment contracts to executive directors with normal commercial terms and without extended
terms of notice which could give rise to extraordinary termination payments. The board retains the discretion to make additional
(ex-gratia) payments on termination should it be appropriate in all the circumstances.
Consideration of employment conditions elsewhere in the Group
In setting this policy for directors’ remuneration the remuneration committee has been mindful of the company’s objective to reward
all employees fairly according to their role, performance and market forces. In setting the policy for Directors’ remuneration the
remuneration committee has considered the pay and employment conditions of the other employees within the group. No formal
consultation has been undertaken with employees in drawing up the policy. The remuneration committee has not used formal
comparison measures.
Consideration of shareholder views
No shareholder views have been taken into account when formulating this policy. In accordance with the new regulations, an
ordinary resolution for approval of this policy will be put to shareholders at the AGM in June 2023.
Bisichi PLC
5353
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;
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.
54 Bisichi PLC
Governance Audit committee report
External Auditors
Kreston Reeves LLP 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 team of external
auditors from Kreston Reeves 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
26 April 2023
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.
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 £700,000 to £800,000 to
be material.
Bisichi PLC
5555
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
2022 by the company as detailed in our Valuation Report dated 20 February 2023.
Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2022 of the interests owned
by the company was £10,465,000 being made up as follows:
Freehold
Leasehold
Leeds
20 February 2023
£’000
8,270
2,195
10,465
Carter Towler
Regulated by Royal Institute of Chartered Surveyors
56 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, international
accounting standards. 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
5757
Independent auditor report to the shareholders of Bisichi Plc
Governance
Independent auditor report to the shareholders of
Bisichi Plc for the year ended 31 December 2022
Opinion
We have audited the financial statements of
Bisichi PLC (the ‘parent company’) and its
subsidiaries (the ‘Group’) for the year ended
31 December 2022 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.
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.
• • 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.
• • 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.
performed our own sensitivity analysis
in respect of the key assumptions
underpinning the forecasts.
• • Based on our above assessment we
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.
• • 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
• • 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.
• • 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.
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 2022 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
• • the financial statements have been
prepared in accordance with the
requirements of the Companies Act 2006.
58 Bisichi PLC
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.
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 38;
• • 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 38;
• • Board’s confirmation that it has carried
out a robust assessment of the
emerging and principal risks set out on
pages 19 to 23;
• • The section of the Annual Report that
describes the review of effectiveness of
risk management and internal control
systems set out on page 36 and
• • The section describing the work of the
Risk and Audit Committee set out on
page 35.
Bisichi PLC
5959
Governance Independent auditor report to the shareholders of Bisichi Plc
Our application of materiality
Materiality
£711,200 (2021: £359,600)
£710,000 (2021: £359,500)
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 £533,400 (2021: £269,700)
£532,500 (2021: £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
£35,560 (2021: £17,980)
£35,500 (2021: £17,980)
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 £234,500 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 lower risk
UK-registered trading subsidiaries, 4% of
those subsidiary’s net assets were used.
Performance materiality was set in the
range of 70-80% of each individual
materiality.
60 Bisichi PLC
Governance Independent auditor report to the shareholders of Bisichi Plc
Coverage overview
Totals at 31 December
2022:
Full statutory audit
(Kreston Reeves and BDO)
Group revenue
£95,110,894
Group profit/(loss) before tax
£38,013,787
Group net assets
£35,560,822
£95,111,894 (100%)
£37,924,360 (99.8%)
£35,285,511 (99.2%)
Limited procedures
£Nil
£89,427 (0.2%)
£275,311 (0.8%)
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
Bisichi Mining (Exploration) 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 (Kreston Reeves)
Full statutory audit (BDO)
Full statutory audit (BDO)
Full statutory audit (BDO)
Full statutory audit (BDO)
Limited assurance (Kreston Reeves)
Bisichi PLC
6161
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: £95,110,894 (2021: £50,520,000)
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.
62 Bisichi PLC
Governance Independent auditor report to the shareholders of Bisichi Plc
Valuation/impairment of investment properties: £10,635,000 (2021: £10,700,000)
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: £16,177,000 (2021: £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
6363
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 40
to 53 of the Annual Report for the year
ended 31 December 2022. 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.
64 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 57), 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 operations, or
have no realistic alternative but to do so.
Governance Independent auditor report to the shareholders of Bisichi Plc
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.
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 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.
•• Performing integrity testing to verify the
legitimacy of banking records obtained
from management.
•• 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
6565
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: 27 April 2023
As part of an audit in accordance with
ISAs (UK), we exercise professional
judgment and maintain professional
scepticism throughout the audit. We also:
•• Identify and assess the risks of material
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
report. However, future events or
conditions may cause the Group or the
parent company to cease to continue
as a going concern.
•• Evaluate the overall presentation,
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 reappointed by the audit
committee in the year to audit the financial
statements. Our total uninterrupted period
of engagement is 2 years, covering the
years ended 31 December 2021 and 31
December 2022.
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.
66 Bisichi PLC
Financial statements
68 Consolidated income statement
69 Consolidated statement of other comprehensive income
70 Consolidated balance sheet
72 Consolidated statement of changes in shareholders’ equity
73 Consolidated cash flow statement
74 Group accounting policies
82 Notes to the financial statements
108 Company balance sheet
109 Company statement of changes in equity
110 Company accounting policies
Bisichi PLC
67
Financial statements
Financial statements
Consolidated income statement
for the year ended 31 December 2022
Group revenue
Operating costs
Operating profit before depreciation,
fair value adjustments and exchange
movements
Depreciation
Operating profit before fair value
adjustments and exchange movements
Exchange losses
(Decrease)/ Increase in value of
investment properties
Gain on investments held at fair value
Operating profit
Share of loss in joint ventures
Profit before interest and taxation
Interest receivable
Interest payable
Profit before tax
Taxation
Profit for the year
Attributable to:
Equity holders of the company
Non-controlling interest
Profit for the year
Profit per share – basic
Profit per share – diluted
Notes
2
3
3
1
4
1
13
7
5
8
27
10
10
2022
Revaluations
and
impairment
£’000
-
-
-
-
-
-
(60)
1,036
976
(89)
887
-
-
887
(30)
857
857
-
857
2022
Trading
£’000
95,111
(55,748)
39,363
(1,093)
38,270
(270)
-
-
38,000
-
38,000
174
(1,047)
37,127
(11,878)
25,249
16,755
8,494
25,249
2022
Total
£’000
95,111
(55,748)
39,363
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
(1,093)
38,270
(270)
(60)
1,036
38,976
(89)
38,887
174
(1,047)
38,014
(11,908)
26,106
17,612
8,494
26,106
164.96p
164.96p
2021
Revaluations
and
impairment
£’000
-
-
-
-
-
-
255
812
1,067
(125)
942
-
-
942
(342)
600
600
-
600
2021
Total
£’000
50,520
(45,492)
5,028
(2,571)
2,457
(121)
255
812
3,403
(125)
3,278
22
(799)
2,501
(795)
1,706
1,491
215
1,706
13.96p
13.94p
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.
68 Bisichi PLC
Financial statements
Consolidated statement of other
comprehensive income
for the year ended 31 December 2022
Profit 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
2022
£’000
26,106
(43)
(43)
26,063
17,593
8,470
26,063
2021
£’000
1,706
(60)
(60)
1,646
1,439
207
1,646
Bisichi PLC 69
Financial statements
Consolidated balance sheet
at 31 December 2022
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
70 Bisichi PLC
Notes
2022
£’000
2021
£’000
11
12
13
13
16
17
18
20
19
20
21
31
23
10,635
16,377
1,041
12,590
40,643
5,199
6,437
886
10,590
23,112
63,755
(3,795)
(13,282)
(4,256)
(21,333)
(3,930)
(1,715)
(344)
(872)
(6,861)
(28,194)
35,561
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
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
2022
£’000
1,068
258
2021
£’000
1,068
258
(2,559)
(2,540)
1,112
33,923
33,802
1,759
35,561
707
18,019
17,512
323
17,835
These financial statements were approved and authorised for issue by the board of directors on 26 April 2023 and signed on its
behalf by:
A R Heller
Director
G J Casey
Director
Company Registration No. 112155
Bisichi PLC
7171
Financial statements
Consolidated statement of changes
in shareholders’ equity
for the year ended 31 December 2022
Share
capital
£’000
1,068
Share
Premium
£’000
Translation
reserves
£’000
Other
reserves
£’000
258
(2,488)
707
Retained
earnings
£’000
16,528
Balance at 1 January 2021
Profit for the year
Other comprehensive expense
Total comprehensive expense
for the year
Dividend (note 9)
-
-
-
-
-
-
-
-
-
(52)
(52)
-
-
-
-
-
Balance at 1 January 2022
1,068
258
(2,540)
707
Non-
controlling
interest
£’000
116
215
(8)
207
Total
equity
£’000
16,189
1,706
(60)
1,646
-
-
323
17,835
8,494
(24)
26,106
(43)
8,470 26,063
Total
£’000
16,073
1,491
(52)
1,439
-
17,512
17,612
(19)
17,593
1,491
-
1,491
-
18,019
17,612
-
17,612
-
-
-
-
(1,708)
(1,708)
(7,034)
(8,742)
(142)
547
1,112
-
-
(142)
547
33,923
33,802
-
-
(142)
547
1,759 35,561
Profit for the year
Other comprehensive income
Total comprehensive income
for the year
Dividend (note 9)
Share options cancelled
Share options issued
-
-
-
-
-
-
-
-
-
-
-
-
-
(19)
(19)
-
-
-
Balance at 31 December 2022 1,068
258
(2,559)
72 Bisichi PLC
Financial statements
Consolidated cash flow statement
for the year ended 31 December 2022
Cash flows from operating activities
Operating profit
Adjustments for:
Depreciation
Unrealised loss/(gain) on investment properties
Share based payment expense
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
Disposal of reserves, property, motor vehicles, plant and equipment
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
2022
£’000
Year ended
31 December
2021
£’000
38,976
3,403
1,093
60
405
(1,036)
270
39,768
(4,009)
2,307
1,114
39,180
175
(728)
(7,929)
30,698
(8,480)
20
2,083
(10,207)
(16,584)
524
(55)
(641)
(7,034)
(7,206)
6,908
482
(25)
7,365
10,590
(3,225)
7,365
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
Bisichi PLC
7373
Financial statements
Group accounting policies
for the year ended 31 December 2022
Basis of accounting
The results for the year ended 31
December 2022 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 55 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
2022
2021
£1 Sterling: Dollar
2022
2021
20.5785
20.1929
20.7672
20.4060
1.2102
1.2967
1.3706
1.3685
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 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 coal market
conditions for the Group’ will remain at a
stable and profitable level through 2023.
The directors therefore have a reasonable
expectation that the mine will achieve
positive levels of cash generation for the
Group in 2023. 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. 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
74 Bisichi PLC
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
£1.143million secured against its
investment property, see note 14. The
bank loan is secured by way of a first
charge on specific freehold property at a
value of £2.03 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 September 2020, but
has been extended to October 2023.
Santander have indicated that they are
willing to provide a new term loan and we
expect to complete this in the near future.
Financial statements Group accounting policies
In 2022 a disconnect in global energy
markets resulted in higher global energy
prices. Although the volatility in global
energy markets in 2023 is uncertain, the
Directors at present do not foresee
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
2022.
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 7 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 and evaluates new
opportunities to extend the life of its
existing mining and processing
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, coal demand outlook
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.
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.
Bisichi PLC
7575
Financial statements Group accounting policies
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 2022 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 28%
reduction in average forecast coal prices
or a 31% 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
2022, 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. 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.
76 Bisichi PLC
Financial statements Group accounting policies
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.
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.
Bisichi PLC
7777
Financial statements Group accounting policies
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
5 – 10 per cent per annum
of the earlier of its useful
life or the life of the mine
Motor
vehicles
Office
equipment
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.
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.
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;
•• 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.
78 Bisichi PLC
Financial statements Group accounting policies
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 41 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.
Bisichi PLC
7979
Financial statements Group accounting policies
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.
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.
80 Bisichi PLC
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.
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
8181
Financial statements
Notes to the financial statements
for the year ended 31 December 2022
1. SEGMENTAL REPORTING
Business analysis
Significant revenue customer A
Significant revenue customer B
Significant revenue customer C
Other revenue
Segment revenue
Operating 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 (loss)/profit and segment result
Depreciation
Non-current assets excluding investments
Total net assets
Capital expenditure
82 Bisichi PLC
Mining
£’000
57,381
29,934
2,167
3,931
93,413
37,033
(270)
36,763
25,911
2022
Property
£’000
-
-
-
1,108
1,108
652
(60)
592
12,682
Other
£’000
-
-
-
590
590
585
1,036
1,621
13,478
(17,928)
(3,845)
(21,773)
(2,536)
(3,880)
(6,416)
(5)
-
(5)
United
Kingdom
£’000
1,698
(3,696)
(41)
10,688
28,285
46
South
Africa
£’000
93,413
42,672
(1,052)
16,324
7,276
8,434
Total
£’000
57,381
29,934
2,167
5,629
95,111
38,270
706
38,976
52,071
53
10,590
62,714
(20,469)
(7,725)
(28,194)
34,520
1,041
35,561
Total
£’000
95,111
38,976
(1,093)
27,012
35,561
8,480
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 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 and segment result
Depreciation
Non-current assets excluding investments
Total net assets
Capital expenditure
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
Bisichi PLC
8383
Financial statements Notes to the financial statements
2. REVENUE
Revenue from contracts with customers:
Coal sales and processing
Service charges recoverable from tenants
Other:
Rental income
Other revenue
Revenue
2022
£’000
2021
£’000
93,413
98
1,010
590
95,111
49,226
130
989
175
50,520
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
2022
£’000
43,209
269
43,478
13,363
56,841
250
19
269
2021
£’000
38,008
400
38,408
9,655
48,063
351
49
400
Operating costs above include depreciation of £1,093,000 (2021: £2,571,000).
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)/surplus
Loss on valuation movement in respect of head lease payments
(Loss)/Gain on revaluation of investment properties
84 Bisichi PLC
2022
£’000
(60)
(5)
(65)
2021
£’000
255
(26)
229
Financial statements Notes to the financial statements
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
(Increase)/Decrease in value of Inventory
2022
£’000
11,991
1,093
(270)
50
43
-
-
(4,009)
2021
£’000
7,491
2,571
(121)
51
37
-
-
2,105
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 40 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
2022
£’000
507
319
25
196
1,047
2021
£’000
554
-
29
216
799
Bisichi PLC
8585
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
2022
£’000
2021
£’000
-
11,520
-
11,520
388
11,908
-
750
-
750
45
795
(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% (2021: 19%).
The differences are explained below:
Profit/ Loss on ordinary activities before taxation
Tax on profit/ loss on ordinary activities at 19.00% (2021: 19.00%)
Effects of:
Expenses not deductible for tax purposes
Capital gains\(losses) on disposal
Differences in tax rates to UK 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
38,014
7,223
280
14
4,491
(100)
-
11,908
-
(937)
(937)
11,520
-
11,520
1,325
12,845
2,501
475
49
20
260
(9)
-
795
-
152
152
750
-
750
(107)
643
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% (2021: 25%) and the corporation tax rate assessed in South Africa for the year of 28% (2021: 28%) being different from
the corporation tax rate in the UK.
86 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:
Interim dividend
Proposed final dividend
Proposed special dividend
2022
Per share
6p
10p
4p
8p
22p
2022
£’000
641
1,067
427
854
2,348
2021
Per share
2021
£’000
-
-
4p
2p
6p
-
-
427
214
641
The interim dividend for 2022 was approved by the Board on 30th August 2022, paid on 3rd February 2023 and accounted for as
payable as at 31 December 2022. The total dividends to shareholders accounted during the year of £1,708,000 (2021: £Nil) comprise
of dividends paid during the year relating to the prior period of £641,000 (2021: £Nil) and the interim dividend of £1,067,000 (£Nil).
The final and special dividends for 2022 are not accounted for until they have been approved at the Annual General Meeting.
10. PROFIT AND DILUTED PROFIT PER SHARE
Both the basic and diluted profit per share calculations are based on a profit after tax attributable to equity holders of the company
of £17,612,000 (2021: £1,491,000). The basic profit/(loss) per share has been calculated on a weighted average of 10,676,839
(2021: 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 (2021: 10,676,839) plus the dilutive potential ordinary shares arising
from share options of nil (2021: 21,923) totalling 10,676,839 (2021: 10,698,762).
11. INVESTMENT PROPERTIES
Valuation at 1 January 2022
Revaluation
Valuation at 31 December 2022
Valuation at 1 January 2021
Revaluation
Valuation at 31 December 2021
Historical cost
At 31 December 2022
At 31 December 2021
Freehold
£’000
Long
Leasehold
£’000
Head
Lease
£’000
8,230
40
8,270
7,875
355
8,230
5,851
5,851
2,295
(100)
2,195
2,395
(100)
2,295
728
728
175
(5)
170
201
(26)
175
-
-
Total
£’000
10,700
(65)
10,635
10,471
229
10,700
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
2022
£’000
10,465
2021
£’000
10,525
The valuations were carried out in accordance with the Statements of Asset Valuation and Guidance Notes published by The Royal
Institution of Chartered Surveyors.
Bisichi PLC
8787
Financial statements Notes to the financial statements
11. INVESTMENT PROPERTIES CONTINUED
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.
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:
valuation based on inputs other than quoted prices included within level 1 that maximise the use of observable data
directly or from market prices or indirectly derived from market prices.
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
Valuation
technique
Key
unobservable inputs
Freehold – external
valuation
Income
capitalisation
Long leasehold –
external valuation
Income
capitalisation
Estimated rental
value per sq ft p.a
Equivalent Yield
Estimated rental
value per sq ft p.a
Equivalent yield
Carrying/
fair value
2022
£’000
8,270
Carrying/
fair value
2021
£’000
8,230
2,195
2,295
Range
(weighted
average)
2022
£4 – £29
(£21)
8.9% – 15.8%
(11.4%)
£8 – £8
(£8)
Range
(weighted
average)
2021
£6 – £29
(£21)
8.9% –
14.7%
(11.2%)
£9 – £9
(£9)
9.8% – 9.8%
(9.8%)
9.8% – 9.8%
(9.8%)
At 31 December 2022
10,465
10,525
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.
88 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 2022
Exchange adjustment
Additions
Disposals
Cost at 31 December 2022
Accumulated depreciation at 1 January 2022
Exchange adjustment
Charge for the year
Disposals
Accumulated depreciation at 31 December 2022
Net book value at 31 December 2022
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
Estimated rental
value 10% increase
or decrease
Equivalent yield
25 basis point
contraction or expansion
2022
£’000
2021
£’000
2022
£’000
2021
£’000
827 / (827)
823 / (823)
205 / (195)
203 / (193)
220 / (220)
230 / (230)
57 / (55)
60 / (57)
Mining
equipment
and develop-
ment costs
£’000
29,063
134
7,117
(23)
36,291
20,167
166
1,037
(23)
21,347
14,944
28,371
(1,059)
1,772
(21)
29,063
18,399
(710)
2,499
(21)
20,167
8,896
Mining
reserves
£’000
1,097
(13)
1,248
-
2,332
1,089
10
-
-
1,099
1,233
1,138
(41)
-
-
1,097
1,123
(41)
7
-
1,089
8
Motor
vehicles
£’000
Office
equipment
£’000
396
3
55
(69)
385
264
3
38
(49)
256
129
372
(11)
35
-
396
215
(7)
56
-
264
132
179
1
60
(72)
168
150
1
18
(72)
97
71
174
(4)
9
-
179
144
(3)
9
-
150
29
Total
£’000
30,735
125
8,480
(164)
39,176
21,670
180
1,093
(144)
22,799
16,377
30,055
(1,115)
1,816
(21)
30,735
19,881
(761)
2,571
(21)
21,670
9,065
Bisichi PLC
8989
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
Net book value at 1 January 2022
Additions
Exchange adjustment
Depreciation
Net book value at 31 December 2022
Net book value at 1 January 2021
Additions
Exchange adjustment
Depreciation
Net book value at 31 December 2021
13. INVESTMENTS HELD AS NON-CURRENT ASSETS
At 1 January
Gain in investment
Additions
Disposals
Share of (loss)/gain in joint ventures
Net assets at 31 December
Other investments comprise of the following:
219
-
5
(38)
186
263
-
(6)
(38)
219
2022
Other
£’000
3,631
718
9,758
(1,517)
-
2022
Net
investment in
joint
ventures
assets
£’000
1,130
-
-
-
(89)
1,041
12,590
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
90 Bisichi PLC
48
-
-
(27)
21
45
35
-
(32)
48
2021
Net
investment
in joint
ventures
assets
£’000
1,255
-
-
-
(125)
1,130
2022
£’000
-
6,782
5,808
12,590
Total
£’000
267
-
5
(65)
207
308
35
(6)
(70)
267
2021
Other
£’000
1,746
701
1,630
(446)
-
3,631
2021
£’000
-
1,564
2,067
3,631
Financial statements Notes to the financial statements
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 £14,000 (2021: £3,000). 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 (2021: 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 £606,000 (2021: £637,000). 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 (2021: 500,000)
ordinary shares of £1 each. No dividends were received during the period. It holds a Santander bank loan of £1.143million secured
against its investment property. The bank loan of £1.143million is secured by way of a first charge on specific freehold property at a
value of £2.038 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 September 2020, but has been extended to October 2023. Santander have
indicated that they are willing to provide a new term loan and we expect to complete this in the near future.
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 £449,000 (2021: £496,000). 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 (2021: 1,000,000) ordinary shares
of £1 each. No dividends were received during the period.
Bisichi PLC
9191
Financial statements Notes to the financial statements
14. JOINT VENTURES CONTINUED
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
Current borrowings
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
Development
Physics
£’000
Dragon
£’000
West
Ealing
£’000
-
168
53
2022
£’000
221
Development
Physics
£’000
Dragon
£’000
West
Ealing
£’000
-
168
58
2021
£’000
226
(33)
-
(33)
-
-
(33)
-
(33)
-
2
348
2
-
(395)
(43)
-
-
(43)
(14)
(5)
(3)
(8)
-
(51)
(59)
(2)
(61)
2,038
107
-
269
(1,143)
(59)
(826)
-
-
1,212
606
(71)
(109)
-
(71)
-
(1)
(72)
(34)
(106)
(3)
(112)
-
(52)
(164)
(36)
(200)
-
9
2,038
118
8,112
8,460
47
318
(4,399)
(2,862)
907
(9)
-
898
449
(5,542)
(3,316)
38
(9)
-
2,067
1,041
(10)
-
(10)
-
-
(10)
-
(10)
-
-
232
27
(269)
(10)
-
-
(10)
(3)
(32)
(215)
(257)
(3)
(35)
-
(31)
(66)
-
(66)
2,091
27
-
374
-
(3)
(215)
(260)
-
(1)
(216)
38
(178)
-
5
7,494
70
-
(32)
(292)
38
(254)
2,091
32
7,726
471
(53)
(6,549)
(6,871)
348
1,020
(1,165)
-
1,274
637
(28)
-
992
496
1,358
(1,193)
-
2,256
1,130
92 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
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 Holding
company
Dormant
Ninghi Marketing Limited
100%
90.1%
Bisichi Mining Management
Services Limited
Bisichi Coal Mining (Pty) Limited
Dormant
100%
Coal mining
100%
Indirectly held:
Black Wattle Colliery (Pty) Limited
Coal mining
62.5%
Sisonke Coal Processing (Pty) Limited Coal
processing
Black Wattle Klipfontein (Pty) Limited Coal mining
62.5%
62.5%
Amandla Ehtu Mineral Resource
Development (Pty) Limited
Dormant
70%
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
Samora Machel Street, Bethal Road,
Middelburg, Mpumalanga, 1050
Country of
incorporation
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
England and Wales
South Africa
Samora Machel Street, Bethal Road,
Middelburg, Mpumalanga, 1050
Samora Machel Street, Bethal Road,
Middelburg, Mpumalanga, 1050
Samora Machel Street, Bethal Road,
Middelburg, Mpumalanga, 1050
Samora Machel Street, Bethal Road,
Middelburg, Mpumalanga, 1050
South Africa
South Africa
South Africa
South Africa
Details on the non-controlling interest in subsidiaries are shown under note 27.
16. INVENTORIES
Coal
Washed
Mining Production
Work in progress
Other
2022
£’000
4,758
162
221
58
5,199
2021
£’000
1,185
59
-
9
1,253
The amount of inventories recognised as an expense during the period was £35,969,000 (2021: £32,912,000).
Bisichi PLC
9393
Financial statements Notes to the financial statements
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
2022
£’000
4,067
1,379
860
131
6,437
2021
£’000
6,328
1,067
984
247
8,626
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 £89,000 (2021:
£140,000).
18. INVESTMENTS IN LISTED SECURITIES HELD AT FVPL
At 1 January
Gain in investments
Additions
Disposals
Market value at 31 December
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
94 Bisichi PLC
2022
Other
£’000
685
318
449
(566)
886
2022
£’000
686
200
886
846
40
2021
Other
£’000
833
110
-
(258)
685
2021
£’000
478
207
685
846
(161)
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
2022
£’000
8,519
120
54
2,000
2.366
223
13,282
2021
£’000
7,171
156
65
2,281
844
226
10,743
20. FINANCIAL LIABILITIES – BORROWINGS
Current
Non-current
Bank overdraft (secured)
Bank loan (secured)
2022
£’000
3,225
570
3,795
2021
£’000
2,536
130
2,666
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
2022
£’000
-
3,930
3,930
2022
£’000
3,795
3,906
24
7,725
3,880
3,845
7,725
2021
£’000
-
3,853
3,853
2021
£’000
2,666
11
3,842
6,519
3,839
2,680
6,519
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, 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 £11,482,554 (2021: £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. 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 £10,465,000 (2021:
£10,525,000). No banking covenants were breached by the Group during the year.
Bisichi PLC
9595
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:
2022
£’000
7,725
(10,590)
(2,865)
33,802
(8.5%)
Bank
borrowings
£’000
Bank
overdrafts
£’000
Lease
liabilities
£’000
4,207
(10)
(214)
4,846
(138)
(2,172)
2022
£’000
6,973
7
1,147
(5)
8,122
-
-
3,983
2,536
508
(6)
(57)
9
454
2022
£’000
1,390
6
-
319
1,715
2021
£’000
6,519
(3,018)
3,501
17,512
20.0%
2021
£’000
9,561
(154)
(2,443)
9
6,973
2021
£’000
1,442
(52)
-
-
1,390
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
Lease
overdrafts
£’000
liabilities
£’000
Balance at 1 January
3,983
2,536
Exchange adjustments
Cash movements
excluding exchange
adjustments
Additions
(9)
525
11
678
-
-
Balance at 31 December
4,499
3,225
21. PROVISION FOR REHABILITATION
454
5
(56)
(5)
398
As at 1 January
Exchange adjustment
Increase in provision
Unwinding of discount
As at 31 December
96 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
Investments
held at
FVPL
£’000
2022
£’000
Financial
Assets
measured
at
amortised
cost
£’000
Financial
Liabilities
measured
at
amortised
cost
£’000
Cash and cash equivalents
10,590
Non-current other investments
held at FVPL
Investments in listed securities
held at FVPL
-
-
Trade and other receivables
6,306
-
-
-
-
Bank borrowings and overdraft
Lease Liabilities
Other liabilities
-
-
-
(7,725)
(398)
(17,261)
-
10,590
3,018
12,590
12,590
886
886
-
-
-
-
6,306
(7,725)
(398)
(17,261)
-
-
8,379
-
-
-
16,896
(25,384)
13,476
4,988
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)
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 2021 fall under the
same category of financial instrument as 2022.
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.
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.
Bisichi PLC
9797
Financial statements Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
As at 31 December 2022, 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 £35,000 (2021: £80,000).
The effect on equity of this change would be an equivalent decrease or increase for the year of £35,000 (2021: £80,000).
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
2022
£’000
21,511
4,259
479
126
2021
£’000
14,122
238
4,391
129
26,375
18,880
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
2022
£’000
15,635
4,150
1,726
21,511
2021
£’000
11,509
1,699
914
14,122
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, 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. 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.
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 £16,896,000 (2021: £11,397,000).
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.
98 Bisichi PLC
Financial statements Notes to the financial statements
22. FINANCIAL INSTRUMENTS CONTINUED
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 84% (2021: 53%) 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 £89,000 (2021: £140,000). As at year end the amount of trade receivables held past due date less credit loss allowances was
£159,000 (2021: £201,000). To date, the amount of trade receivables held past due date less credit loss allowances that has not
subsequently been settled is £122,000 (2021: £106,000). 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 2022, cash at bank and in hand amounted to £10,712,000 (2021: £3,018,000) 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 2022 and 2021 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 2022, 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 £121,000 (2021:
£218,000). 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 £201,000 (2021: £364,000). 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
2022
£’000
7,779
2,238
573
10,590
2021
£’000
1,397
1,017
604
3,018
Cash and cash equivalents earn interest at rates based on Bank of England rates in Sterling and Prime in Rand.
Bisichi PLC
9999
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:
2022:
Sterling
South African Rand
US Dollar
2021:
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
14,715
45
1,971
16,731
Sterling
£’000
1,123
65
1,462
2,650
2022
£’000
506
388
(22)
872
671
3,855
(813)
(1,439)
(1,402)
872
South
African
Rands
£’000
-
(11,743)
-
(11,743)
South
African
Rands
£’000
-
(5,088)
-
(5,088)
2021
£’000
474
45
(13)
506
641
2,253
(832)
(1,057)
(499)
506
Refer to note 8 for details of deferred tax recognised in income in the current year. Tax rates of 25% (2021: 25%) in the UK and
27% (2021: 28%) in South Africa were utilised to calculate year end deferred tax balances.
100 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
2022
Number of
ordinary
shares
2021
Number of
ordinary
shares
10,676,839
10,676,839
2022
£’000
1,300
2021
£’000
1,300
2022
£’000
1,068
2022
£’000
1,026
86
1,112
2021
£’000
1,068
2021
£’000
621
86
707
26. SHARE BASED PAYMENTS
Details of the share option scheme are shown in the Directors’ remuneration report on page 41 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:
Year of grant
Subscription
price per share
Period within
which options
exercisable
Number of share
for which options
outstanding at
31 December 2021
Number of
share options
lapsed/surrendered
/awarded
during year
Number of share for
which options
outstanding at
31 December 2022
2015
2018
2022
87.0p
Sep 2015 – Sep 2025
73.50p
Feb 2018 – Feb 2028
352.0p Sep 2022 – Sep 2032
300,000
380,000
-
(300,000)
(380,000)
760,000
-
-
760,000
Bisichi PLC
101101
Financial statements Notes to the financial statements
26. SHARE BASED PAYMENTS CONTINUED
On 1 September 2022, the company entered into an agreement with A Heller and G. Casey to cancel the 300,000 options which
were granted in 2015 and 380,000 options which were granted in 2018. The aggregate consideration paid by the group to effect
the cancellation was £1,853,270. On 1 September 2022 the company granted additional options to the following directors of the
company:
A. Heller 380,000 options at an exercise price of 352.0p per share.
G. Casey 380,000 options at an exercise price of 352.0p per share.
The options vest on date of grant and are exercisable within a period of 10 years from date of grant. There are no performance or
service conditions attached to the 2022 options which are outstanding at 31 December 2022. The above options were valued at
£547,200 at date of grant using the Black-Scholes-Merton model with the following assumptions:
Expected volatility 54.18% (Based on historic volatility)
Expected life 4 years
Risk free rate 1.58%
Expected dividends 6.90%
Outstanding at 1 January
Lapsed/Surrendered/cancelled during the year
Issued during the year
Outstanding at 31 December
Exercisable at 31 December
27. NON-CONTROLLING INTEREST
As at 1 January
Issue of shares in subsidiary
Share of profit/(loss) for the year
Dividends paid
Exchange adjustment
As at 31 December
102 Bisichi PLC
2022
Weighted
average
exercise
price
79.46p
79.46p
352.00p
352.00p
352.00p
2022
Number
680,000
(680,000)
760,000
760,000
760,000
2021
Weighted
average
exercise
price
79.46p
-
-
79.46p
79.46p
2021
£’000
116
-
215
-
(8)
323
2021
Number
680,000
-
-
680,000
680,000
2022
£’000
323
1
8,494
(7,034)
(25)
1,759
Financial statements Notes to the financial statements
27. NON-CONTROLLING INTEREST CONTINUED
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
2022
£’000
93,356
(63,289)
30,067
-
30,067
16,325
11,752
(18,873)
(3,522)
5,682
2021
£’000
49,225
(47,787)
1,438
-
1,438
9,019
9,329
(14,287)
(1,904)
2,157
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
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
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.
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
103103
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 2022
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
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
-
-
120
-
120
41
-
156
-
197
-
(1,237)
-
(142)
(1,379)
-
(998)
-
(67)
(1,065)
200
-
(36)
-
164
200
-
(36)
-
164
(241)
(239)
-
(75)
(555)
(192)
(158)
44
(67)
(373)
(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 40 and 41 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 £580,000 (2021: £189,000). 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 (2021: £41,000) and no
repayment (2021: £nil) was made during the year.
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 £44,000 (2021: £45,000) and an investment in Vunani Capital Partners (Pty) Ltd of £189,000 (2021:
£38,000). Both are related parties to Vunani Mining (Pty) Ltd and are classified as non-current available for sale investments.
104 Bisichi PLC
Financial statements Notes to the financial statements
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
2022
£’000
8,891
580
300
2,220
11,991
2022
213
15
228
2022
£’000
-
2021
£’000
6,995
189
307
-
7,491
2021
214
15
229
2021
£’000
-
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 2022 is as follows:
Within one year
Second to fifth year
After five years
Discounting adjustment
Present value
Mining
Equipment &
Development
costs
£’000
45
158
53
256
(47)
209
Motor
Vehicles
£’000
12
9
-
21
(1)
20
Head
Lease
Property
£’000
14
43
1,288
1,345
(1,174)
171
2022
£’000
71
210
1,341
1,622
(1,222)
400
2021
£’000
83
226
1,427
1,736
(1,282)
454
Bisichi PLC
105105
Financial statements Notes to the financial statements
31. LEASE LIABILITIES AND FUTURE PROPERTY LEASE RENTALS CONTINUED
The present value of minimum lease payments at 31 December 2022 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
32
127
50
209
11
9
-
20
Head
Lease
Property
£’000
11
34
126
171
2022
£’000
54
170
176
400
2021
£’000
65
260
129
454
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 126 years
(2021: 127 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.
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
106 Bisichi PLC
2022
£’000
973
875
801
716
645
9,530
13,540
2021
£’000
948
830
776
710
634
9,956
13,854
Financial statements Notes to the financial statements
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
2022
£’000
49
1,715
47
2021
£’000
48
1,700
46
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 26 April
2023, 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
107107
Financial statements
Company balance sheet
at 31 December 2022
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
Other reserves
Retained earnings
Shareholders’ funds
Notes
35
36
36
37
37
38
38
24
33
2022
£’000
98
665
18,946
19,709
2,754
1,159
7,928
11,841
(2,514)
9,327
29,036
(9)
29,027
1,068
258
1,027
26,674
29,027
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
The profit for the financial year, before dividends payable, was £15,415,000 (2021: loss of £203,000)
The company financial statements were approved and authorised for issue by the board of directors on 26 April 2023 and signed
on its behalf by:
A R Heller
Director
G J Casey
Director
Company Registration No. 112155
108 Bisichi PLC
Financial statements
Company statement of changes in equity
for the year ended 31 December 2022
Balance at 1 January 2021
Dividends paid
Profit and total comprehensive income for the year
Balance at 1 January 2022
Dividends paid
Share options cancelled
Share options issued
Profit and total comprehensive income for the year
Share
capital
£’000
1,068
-
-
1,068
-
-
-
-
Share
premium
£’000
258
-
-
258
-
-
-
-
Other
reserve
£’000
622
-
-
622
-
(142)
547
-
Balance at 31 December 2022
1,068
258
1,027
Retained
earnings
£’000
Shareholders
funds
£’000
13,170
-
(203)
12,967
(1,708)
-
-
15,415
26,674
15,118
-
(203)
14,915
(1,708)
(142)
547
15,415
29,027
Bisichi PLC
109109
Notes to the financial statements
Financial statements
Company accounting policies
for the year ended 31 December 2022
•• a statement of cash flows;
•• the effect of future accounting
standards not yet adopted;
Other investments comprising of shares
in listed companies are classified at fair
value through profit and loss.
The following are the main accounting
policies of the company:
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.
•• the disclosure of the remuneration of
key management personnel; and
•• disclosure of related party transactions
with the company’s wholly owned
subsidiaries.
In addition, and in accordance with FRS
101, further disclosure exemptions have
been adopted because equivalent
disclosures are included in the company’s
Consolidated Financial Statements.
Dividends received
Dividends are credited to the profit and
loss account when received.
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 74.
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:
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;
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.
110 Bisichi PLC
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 79.
Deferred taxation
Details on the Group’s accounting policy
for deferred taxation can be found on
page 81.
Leased assets and liabilities
Details on the Group’s accounting policy
for leased assets and liabilities can be
found on page 80.
Pensions
Details on the Group’s accounting policy
for pensions can be found on page 79.
Share based remuneration
Details on the Group’s accounting policy
for share based remuneration can be
found on page 79. Details of the share
options in issue are disclosed in the
directors’ remuneration report on page 41
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 profit for the financial year, before dividends paid, was £15,415,000 (2021: loss: £203,000)
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 41 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 2022
Additions
Disposals
Cost at 31 December 2022
Accumulated depreciation at 1 January 2022
Charge for the year
Disposals
Accumulated depreciation at 31 December 2022
Net book value at 31 December 2022
Net book value at 31 December 2021
Leasehold
Property
£’000
Motor
Vehicles
£’000
Office
equipment
£’000
Total
£’000
45
-
-
45
-
-
-
-
45
45
104
-
-
104
56
27
-
83
21
48
70
46
(72)
44
70
14
(72)
12
32
-
219
46
(72)
193
126
41
(72)
95
98
93
Leasehold property consists of a single unit with a long leasehold tenant. The term remaining on the lease is 37 years. Motor
Vehicles comprise wholly of Right of Use leased assets.
36. INVESTMENTS
Joint
ventures
shares
£’000
Shares in
subsidiaries
£’000
Other
investments
£’000
Net book value at 1 January 2022
665
6,356
Invested during the year
Repayment
Gain in investments
-
-
-
-
-
-
3,631
9,758
(1,517)
718
Net book value at 31 December 2022
665
6,356
12,590
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 £12,590,000 (2021: £3,631,000) shares in listed companies.
Total
£’000
9,987
9,758
(1,517)
718
18,946
Bisichi PLC
111111
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
2022
£’000
2021
£’000
1,079
237
1,379
59
2,754
1,159
1,159
2,421
94
1,065
56
3,636
220
220
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:
Amounts due to subsidiary undertakings
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
2022
£’000
2021
£’000
15
120
64
71
11
2,233
2,514
-
156
64
164
26
44
454
9
20
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.
112 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 2022
Black Wattle Colliery (Pty) Ltd (note (a))
Ninghi Marketing Limited (note (b))
As at 31 December 2021
At 31
December
During
the year
Costs
Amounts
owed
by related
party
£’000
recharged /
accrued (to)/
by related
party
£’000
Cash paid
(to)/ by
related party
£’000
(145)
(102)
(247)
(637)
(102)
(739)
(972)
-
(972)
(923)
-
(923)
1,464
-
1,464
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 (2021: 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.
40. 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
2022
£’000
2021
£’000
5
5
3,264
580
21
2,220
6,085
1,426
189
31
-
1,646
Bisichi PLC
113
www.bisichi.co.uk
Bisichi PLC
2nd floor,
12 Little Portland Street,
London W1W 8BJ
email: admin@bisichi.co.uk