Bisichi PLC Annual Report 2023 Company Registration No. 00112155 A tribute to CHRISTOPHER JOLL Director 2001-2024 It was with great sadness that the Board of Bisichi announced the death of our senior non-executive Director, Christopher Joll, on 18th April 2024, at the age of 75 years old. Christopher was a director of Bisichi for 23 years. As well as maintaining a keen eye on the running of the company, Christopher was a very active participant in Board meetings, always requesting forecasts and projections from the Executive Directors. He was the most articulate member of the Board, rewriting and improving anything that had been drafted. His extremely wise counsel, integrity, communication skills and enthusiasm for the company will be sorely missed. Christopher attended Oxford University and spent seven years in The Life Guards, including completing four tours of duty in Northern Ireland. Christopher built his career in financial PR which is where Bisichi first came across him. He was also a British military historian, author of an incredible fifteen books and manager of the British Military Tournament. Christopher was the essence of an English gentleman and board meetings will not be the same without him. Contents Strategic report STRATEGIC REPORT 2 Chairman’s Statement 4 Principal activity, strategy & business model 5 Mining review 7 Sustainable development 20 Principal risks & uncertainties 24 Financial & performance review GOVERNANCE 31 Directors and advisors 32 Five year summary 32 Financial calendar 33 Directors’ report 40 Statement of the Chairman of the remuneration committee 41 Annual remuneration report 50 Audit committee report 52 Valuers’ certificates 53 Directors’ responsibilities statement 54 Independent auditor report to the shareholders of Bisichi Plc The Directors present the Strategic Report of the company for the year ending 31 December 2023. 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. FINANCIAL STATEMENTS 64 Consolidated income statement 65 Consolidated statement of other comprehensive income 66 Consolidated balance sheet 68 Consolidated statement of changes in shareholders’ equity 69 Consolidated cash flow statement 70 Group accounting policies 80 Notes to the financial statements 108 Company balance sheet 109 Company statement of changes in equity 110 Company accounting policies Bisichi PLC 11 Strategic Report Strategic Report Chairman’s Statement For the year ended 31 December 2023, your company made a profit before interest, tax, depreciation and amortisation (EBITDA) of £3.4million (2022: £40.0million) and an operating profit before depreciation, fair value adjustments and exchange movements (Adjusted EBITDA) of £2.6million (2022: £39.4million). 2023 was a challenging year for your company and its South African operations. The lower earnings for the Group, compared to 2022, are mainly attributable to lower export sales, due to the performance of Transnet, the South African state rail provider, and lower prices for our coal sold by Sisonke Coal Processing, the Group’s South African coal processing operation. In addition, earnings were further impacted by difficult mining conditions and low mining production at our coal mining asset, Black Wattle Colliery. During 2022, the Group benefited from significantly higher prices of Free on Board (FOB) coal from Richards Bay Coal Terminal (API4 price). However, during 2023, the weekly API4 price averaged US$120 compared to US$273 in 2022. In addition to the weaker international coal price, constraints in transporting coal for export on the South African rail network, which were beyond our control, significantly impacted the Group’s export sales during the period. Due to the lack of available rail capacity, the Group exported 134,000 metric tonnes in 2023, compared to 262,000 metric tonnes in 2022 and 320,000 in 2021. This, in turn, had a further impact on earnings during the period, as coal allocated for export was eventually sold into the domestic market at prices that were significantly lower than the export price achievable by rail through Richards Bay. Transnet, the South African state rail operator, and the wider South African coal industry, are working hard to collectively implement measures to increase rail capacity. We are pleased to report that in 2024 to date, we have seen an improved performance in our railed coal export volumes compared to 2023. We remain optimistic that the measures, once fully implemented, will have a significant positive impact on both the export and domestic prices achievable for our coal. At Black Wattle, difficult mining conditions impacted profitability during the period. For the majority of 2023, geological issues reduced the production from our opencast mining area as well as increasing related mining and blasting costs. In order to mitigate these issues, the mine opened a lower cost second mining area in the third quarter of 2023. Since the commencement of this new mining area, we have seen a significant improvement in mining production and lower operating costs and we expect the improved performance at Black Wattle to continue throughout 2024. The low coal production levels at Black Wattle in 2023 had a knock-on effect on overall levels of coal processed at Sisonke Coal Processing. The Group sold 1.031million metric tonnes during the year compared to 1.287million metric tonnes in 2022. The decrease in the Group’s mining revenue during the period to £49.3million (2022: £95.1million) can mainly be attributable to the lower prices achievable for our coal and the lower overall quantity of coal sold, particularly into the export market. Looking forward into 2024, we will continue to see the benefits, both in terms of mining cost and production, from the new mining area at Black Wattle. In addition, we have seen a stabilisation in coal prices in both the export and domestic market and an improved performance by Transnet. We remain confident in the Group’s ability to achieve significant value from our South African operations. 2 Bisichi PLC In the UK, we have seen rental revenue from our retail property portfolio improve in 2023. The Group billed revenue from our directly owned property portfolio of £1.3million (2022: £1.11million) 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. As previously reported, we obtained a resolution to grant planning consent for 56 flats and four retail units at the end of 2020. During 2023 the joint venture has been finalising detailed designs for the project and working with contractors and designers to improve building efficiency and maximise potential returns. Currently, the joint venture is working toward developing the project to completion. Detailed negotiations to finance construction are underway with the intention of commencing work in the second half of 2024. Finally, in light of the challenging year, your directors propose a final year-end dividend of 4p (2022: 12p) per share. The final dividend proposed will be payable on Friday 26 July 2024 to shareholders registered at the close of business on 5 July 2024. This takes the total dividends per share for the year to 7p (2022: 22p). On behalf of the Board and shareholders, I would like to thank all of our staff for their hard work and dedication during the course of the year. Andrew Heller Executive Chairman & Managing Director 22 April 2024 Strategic Report Strategic Report Chairman’s Statement The Group recognises the need for, and is committed to, the diversification of its future business activities. The Group is continually looking at alternative mining, commodity and renewable energy related opportunities, as well as new opportunities to add to our existing UK property and listed equity related investment portfolios. In the interim, we continue to work closely with Vunani Mining, our BEE partner in Black Wattle and Sisonke Coal processing, to ensure that we are responsible stewards of our legacy coal operations 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. During the period the Group’s total non-current and current listed equity related investments held at fair value through profit and loss increased to £15.0million (2022: £13.5million). The Group achieved dividend income from investments during the period of £0.56million (2022: £0.59million) and a gain in value from investments of £0.8million (2022: £1.0million). The Group’s listed equity related investment portfolios comprise primarily of listed equities and listed equity related funds involved or invested in extractive and energy related business activities, including entities involved in the extraction of commodities needed for the clean energy transition. 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 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, commodity and renewable energy 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 related 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. The Group’s listed equity related investment portfolios comprise primarily of listed equities and listed equity related funds involved or invested in extractive and energy related business activities, including entities involved in the extraction of commodities needed for the clean energy transition. 4 Bisichi PLC 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. Strategic Report Mining review 2023 was a difficult year in terms of performance for our South African coal mining and processing operations. A lack of rail capacity for export and lower international coal prices significantly impacted the profitability of the Group. With more stability in the coal market going into 2024, management will be focussing on improving production levels and keeping operating costs low. Production and operations Geological issues in areas mined at Black Wattle, our South African mining operation, had a significant impact on production, particularly in the first half of 2023. The geological issues related to both the coal seams mined and the overburden removed. This, in turn, impacted the rate of extraction and overall cost per tonne of coal mined. In the third quarter of 2023, management took the decision to transition both our mining contractors to a new mining area. After overcoming temporary water issues in the last quarter of 2023, mining of this new area has steadily progressed going into 2024. Overall, the mine achieved production of 807,000 metric tonnes (2022: 824,000 metric tonnes) during the year. In 2024 to date, we have seen a significant improvement in mining production and lower operating costs compared to the previous mining area. We expect the improved performance at Black Wattle to continue throughout 2024. We continue to work closely with Vunani Mining, our BEE partner in Black Wattle and Sisonke Coal processing, to ensure that we are responsible stewards of our legacy coal operations, which have a life of mine of six 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 stabilisation of global energy markets in 2023, compared to 2022, had a significant impact on 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 $120 in 2023 compared to $273 in 2022. The lower prices, offsetting a stronger US Dollar compared to the South African Rand, resulted in the Group achieving an average Rand price of R1,357 per tonne of export coal sold from the mine in 2023, compared to R3,770 in 2022. 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 continued to be limited by constraints in transporting coal for export on the South African rail network, leading to a decrease in exports volumes from our South African operations during the year to 134,000 metric tonnes compared to 262,000 metric tonnes in 2022. Transnet, the South African state rail operator, and the wider South African coal industry, are working hard to implement collectively implement measures to increase rail capacity. Feedback to date on the application of these measures has been promising and we are pleased to report that, in 2024 to date, we have seen an improved performance in our railed coal export volumes compared to 2023. In light of the export constraints, the Group supplied a higher proportion of coal into the South African domestic market in 2023, compared to 2022, at prices that were significantly lower than the export price achievable by rail through Richards Bay. For the year, the Group achieved an average domestic price of R938 per tonne coal sold compared to R774 in 2022. The average price increase in the domestic market in 2023, compared to 2022, was attributable to an increase in higher quality coal, destined for the export market, being sold domestically due to the lack of export rail capacity available. Domestic sales volumes from our South African operations decreased during the year to 0.90million metric tonnes (2022: 1.03million metric tonnes). Bisichi PLC 55 Mining review Strategic Report Mining review In 2023, the Group achieved an average overall Rand price per tonne of coal sold of R992 compared to R1,384 in 2022. The decrease in Group revenue in 2023 can mainly be attributed to the lower export coal prices achieved and lower volumes of coal sold, particularly into the export market. Further details on the financial performance of the Group’s mining segment can be found in the Financial & performance review on page 24 of this report. Looking forward to 2024, we have seen coal prices remain stable in both our markets and we remain optimistic about a continued improvement in the provision of coal export rail capacity by Transnet. 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 2023: •• The Group’s South African operations recorded 2 Lost time Injuries during 2023 (2022: Two). •• One case of Occupational Diseases was recorded. •• One claim for the Compensation for Occupational Diseases was 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 are pleased to report that Black Wattle has achieved a level 3 Broad Based Black Economic Empowerment (BBBEE) verification certificate for 2024 and we continue to adhere and make progress in terms of our Social and Labour Plan and our various Black Economic Empowerment (“BEE”) initiatives. A fuller explanation of these can be found in our Sustainable Development Report on page 7. Prospects Management would like to thank all our South African employees and stakeholders for their significant contribution to the Group’s performance in 2023. Going forward, your management are optimistic that 2024 will be a successful year for our South African operations. 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 2023: •• One case of Occupational Diseases was recorded. •• One claim for the Compensation for Occupational Diseases was submitted. •• No machines operating at Black Wattle exceeded the regulatory noise level. •• The Group’s South African operations recorded 2 Lost Time Injuries during 2023. 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. Looking forward into 2024, Black Wattle intends to enhance the safety of our employees and contractors onsite through the sourcing and procurement of a Proximity Detection System (“PDS”) solution for the mine. The PDS solution comprises a sensing device that detects the presence of another person, vehicle or object and a sophisticated interface that provides an audible and visual alarm. These systems warn both the vehicle operator and the pedestrian of the imminent danger of a potential collision. The Group continues to monitor and adhere to all of the South African government’s guidelines and regulations including all updates and advice from the National Department of Health and the Department of Minerals Resources and Energy. 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. Bisichi PLC 77 Sustainable development Strategic Report Sustainable development •• Empowering partners, through Broad- Based Black Economic Empowerment (BBBEE) and Joint Ventures with Historically Disadvantaged South African (HDSA) new mining entrants and enterprises. •• The company engages in on going consultation with its stakeholders to develop strong company-employee relationships, strong company- community relationships and strong company-HDSA enterprise relationships. 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). •• Through engagements with the Department of Education and STLM regarding the Local Economic Development projects for the current SLP year cycle (2022-2026). The department endorsed the Khulunolwazi School Project in late 2023. The project is currently in a planning phase for the implementation of the project in various phases. At present, drawing plans for the school are being finalised, which requires approval from the local municipality. 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. Thereafter the vegetation is utilised in the making, bagging and sales of charcoal. •• A waste management project at Uitkyk community, nearby to Black Wattle, involving the collection and recycling of waste from their community. •• 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; - training in environmental waste management; - drivers licenses; and - security officer training •• One HDSA female completed her University studies in the 2023 academic year. •• Various upgrades were initiated at the Evergreen School nearby to Black Wattle. Black Wattle continues to support Care for Wild, a globally recognized local conservation organization dedicated to preserving endangered species and safeguarding the precious biodiversity of our planet. As the largest orphaned rhino sanctuary in the world, Care for Wild specialise in the rescue, rehabilitation, rewilding, and protection of orphaned and injured rhinos. However, their mission extends far beyond rhinos alone, they are deeply committed to the preservation of endangered species that play vital roles in their ecosystems and the conservation of biodiversity. The Group recognizes the critical importance of this goal in safeguarding biodiversity and aspire to play a significant role in its realization through our sponsorship of three Rhinos as well as various related community gardening initiatives at the sanctuary. 8 Bisichi PLC 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. Strategic Report Sustainable development 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. We are very pleased to report that Black Wattle has a achieved a level 3 BBBEE certificate for 2024. At present, 88 percent of the companies utilised by Black Wattle for equipment and services are BBBEE companies. 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 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; •• Utilise the existing skills base for the empowerment of HDSAs; and •• Expand the skills base of HDSAs in order to serve the community. Employment & diversity In the UK, the Board of Bisichi PLC at 31 December 2023 comprised of: Men Women Not specified/prefer not to say Number of board members Percentage of the board 7 0 0 100% 0% 0% Number of senior positions on the board Number in executive management Percentage of Executive management 2 0 0 3 0 0 100% 0% 0% 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 6 0 1 0 0 86% 0% 14% 0% 0% 2 0 0 0 0 3 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 Strategic Report Sustainable development The Company notes the diversity targets included in the Listing Rules, being: •• at least 40% of the individuals on the Board are women; •• at least one of the specified senior positions is held by a woman; and •• at least one individual on the Board is from a minority ethnic background. At 31 December 2023 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. Should the Board look to appoint further directors in the future, the Company will give due consideration to how it may achieve the diversity targets while ensuring the appropriate structure of the Board and mix of skills and expertise relevant to the Company’s operations. As part of its recruitment processes, the Company gives careful consideration to all potential applicants however has a particular regard to those with knowledge and experience of the mining and extractives sector and in particular the South African market. This necessary focus narrows considerably the pool of potential applicants and poses potential challenges in both recruitment and meeting the diversity targets. The Company will keep this under ongoing review. Given the Company’s current organizational structure and limited headcount in the United Kingdom, and its highly regulated obligations in South Africa under the Employment Equity Act, New Mining Charter, SLP and BBBEE regulations in South Africa, the Board considers that a formal diversity policy, would not be practicable for the Company to develop over and above its extensive policies and procedures already implemented in South Africa. The Company and the Board already integrates equality and diversity in all aspects of the Company’s business and all decisions are made on merit and without regard to protected characteristics. Where appropriate and practicable for the Company, the Company considers and implements positive actions to enable the Company to provide additional support. This can include, for example, making adjustments to assist staff and ensuring that, to the extent possible, all relevant perspectives are included in decision making on an ongoing basis. 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 Company will keep the requirement for a formal diversity policy under review and will give serious consideration to the adoption of a policy, tailored to the nature of the Company’s business, its operations and resources at the appropriate point. 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. •• 95 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), 5 senior managers (5 male and 2 from a minority ethnic or HDSA Background) and 212 other employees (143 male and 118 from a minority ethnic or HDSA Background, 69 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 2023 were: •• One employee was trained in ABET (Adult Basic Educational Training) on various levels; •• An additional eight disabled HDSA women continued their training on ABET levels one to four; •• Four HDSA persons were enrolled for apprenticeships in 2023 categorised as follows: - One HDSA female employee; - Two HDSA females from the local community; and - One HDSA male from the local community. •• Two HDSA persons continued their internships in 2023; these are categorised as follows: - One HDSA female from the local community continued her studies in Safety Management. - One HDSA female from the local community continued her studies as a Safety Officer (COMSOQ1). Further to the above, we confirm that one HDSA Female completed her bursary studies in 2023, while two HDSA females continued their bursary studies in 2023. Highlights for 2023 for Sisonke Coal Processing: •• One employee was trained in ABET (Adult Basic Educational Training) on various levels. 10 Bisichi PLC Strategic Report Sustainable development Employment terms and conditions for our employees based at our UK office and at our South African mining operations are regulated by and are operated in compliance with all relevant prevailing national and local legislation. Employment terms and conditions provided to mining staff meet or exceed the national average. The Group’s mining operations and coal washing plant facility are labour intensive and unionised. During the year no labour disputes, strikes or wage negotiations disrupted production or had a significant impact on earnings. The Group’s relations to date with labour representatives and labour related unions continue to remain strong. 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. 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 second 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. Bisichi PLC 1111 Strategic Report Sustainable development 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. Governance Management’s role in assessing and managing climate- related risks and opportunities. 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 engaged 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. 12 Bisichi PLC Strategic Report Sustainable development TCFD PILLAR Strategy TCFD RECOMMENDED DISCLOSURE Climate-related risks and opportunities the Group has identified over the short, medium, and long run. BISICHI PLC 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. 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. Bisichi PLC 1313 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 continue to evaluate opportunities to reduce these emissions taking into particular consideration the financial viability and long term sustainability of the projects. The Board has identified the need to mitigate GHG emission in its mining process and rehabilitation activities at Black Wattle. 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. Strategic Report Sustainable development TCFD PILLAR Strategy TCFD RECOMMENDED DISCLOSURE Impact of climate- related risks and opportunities on businesses, strategy, and financial planning. (continued) BISICHI PLC In addition to the above, Black Wattle has been actively engaged with the Steve Tshwete Local Municipality (“STLM”) to mitigate GHG emissions in its rehabilitation activities by finding alternative uses for unrehabilitated mining voids on the mine. Discussions are progressing to transfer certain unrehabilitated mining voids to STLM in order for the areas to be developed into a “Waste Eco Park”. The proposed development will include the licensing and development of a proposed landfill for waste disposal, recycling facilities, and a general waste management facility. The proposed Waste Management Facility will be a state-of-the- art treatment and resource beneficiation facility inclusive of final disposal to landfill. Further environmental screening studies are currently being undertaken by STLM. Any significant developments will be reported to shareholders in due course. 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. 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. Bisichi PLC 1515 Strategic Report Sustainable development TCFD PILLAR Strategy TCFD RECOMMENDED DISCLOSURE Resilience of strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. Risk Management Processes for identifying and assessing climate related risks. 16 Bisichi PLC BISICHI PLC 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. 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. Strategic Report Sustainable development TCFD PILLAR TCFD RECOMMENDED DISCLOSURE BISICHI PLC 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. 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. Bisichi PLC 1717 Strategic Report Sustainable development TCFD PILLAR Metrics and Targets TCFD RECOMMENDED DISCLOSURE 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. 18 Bisichi PLC BISICHI PLC 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 80. 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 6 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. 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 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 2023. 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 (1.2 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 2023 CO2e Tonnes 2022 CO2e Tonnes 39,709 39,564 7,601 12,267 47,310 51,831 1 47,309 0.0010 0.0587 3 51,828 0.0005 0.0629 kWh kWh 90,218,230 7,601 87,292,816 12,341 Bisichi PLC 1919 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 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 2022 and 2023. 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. 20 Bisichi PLC 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. 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 2023 and 2022. 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. 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 work performed in the acquisition and renewal of mining permits as well as the maintenance of compliance with permits includes factors such as environmental management, health and safety, labour laws and Black Empowerment legislation (such as the New Mining Charter); as failure to maintain appropriate controls and compliance may in turn result in the withdrawal of the necessary permissions to mine. The management of these regulatory risks and performance in the year is noted in the Mining Review on page 5 as well as in the Sustainable Development report on page 7 and in this section under the headings environmental risk, health & safety risk and labour risk. Additionally, in order to mitigate this risk, the Group strives to provide adequate resources to this area including the employment of adequate personnel and the utilisation of third party consultants competent in regulatory compliance related to mining rights and mining permissions. The Group’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. Bisichi PLC 2121 Strategic Report Principal risks & uncertainties PRINCIPAL RISK FLOODING RISK PERFORMANCE AND MANAGEMENT OF THE RISK The Group’s mining operations are susceptible to 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. 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. 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. 22 Bisichi PLC 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. 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. 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 & diversity’ section on page 9 for further details. Strategic Report Principal risks & uncertainties PRINCIPAL RISK PERFORMANCE AND MANAGEMENT OF THE RISK SOCIO-ECONOMIC, POLITICAL INSTABILITY & REGULATORY ENVIRONMENT RISK The Group is exposed to a wide range of political, economic, regulatory, social and tax environments, particularly in South Africa. Regulation applicable to resource companies can often be subject to adverse and unexpected changes. Environmental, social, economic and tax regulatory codes can be complex and uncertain in their application. The Group may be impacted by adverse actions and decisions by governments including operational delays, delays or loss of permits or licenses to operate. Laws and regulations in the countries in which we operate may change or be implemented in a manner that may have a materially adverse effect on the Group. Our operations may also be affected by political, economic and unemployment instability, including terrorism, civil disorder, violent crime, war and social unrest. CASHFLOW RISK Commodity price risk, currency volatility and the uncertainties inherent in mining may result in favourable or unfavourable cashflows. 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 economic performance of the United Kingdom, including 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. The Group actively engages with governments, regulators and other stakeholders within the countries in which it operates. The Group endeavours to operate its businesses according to high legal, ethical, social and human rights standards and comply with all applicable environmental, social and tax laws and regulations. The Group’s assets and investments are diversified across various countries which reduces the Group’s exposure to any particular country. The Board regularly assesses the political and socio- economic environment and related risks of the countries it operates and invests in. 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. 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. Management continues to monitor and evaluate the impact of 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 £39.4million in 2022 to £2.6million in 2023 can mainly be attributed to the performance of the Group’s South African operations. Lower volumes of coal sold, lower export coal prices and a lower proportion of sales into the export market at Sisonke Coal Processing had a significant impact on the Group’s revenue in 2023. 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 2023 £’000 2,647 3,354 610 10,610 1,268 1,380 1,222 Tonnes ‘000 807 1,031 2022 £’000 39,363 39,980 38,014 10,465 1,108 38,126 37,856 Tonnes ‘000 824 1,287 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 47,424 (2,812) (35,808) (7,424) 1,380 (158) - - 1,222 - 1,222 (960) (1,493) (1,231) Mining £’000 93,413 (5,201) (38,008) (12,078) 38,126 (270) - - 37,856 - 37,856 (663) (1,093) 36,100 Property £’000 Other £’000 1,268 - - (557) 711 - 145 - 856 (39) 817 (291) - 526 Property £’000 1,108 - - (456) 652 - (60) - 592 (89) 503 (210) - 293 561 - - (5) 556 - - 759 1,315 - 1,315 - - 1,315 Other £’000 590 - - (5) 585 - - 1,036 1,621 - 1,621 - - 1,621 2023 £’000 49,253 (2,812) (35,808) (7,987) 2,647 (158) 145 759 3,393 (39) 3,354 (1,251) (1,493) 610 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 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 £3.4million (2022: £40.0million). The movement compared to the prior year can mainly be attributed to the decreased EBITDA from our mining activities of £1.2million (2022: £37.9million). In addition, the Group’s fair value gain, related to our UK property was £0.15million (2022: loss £0.1million) and gains related to investments held at fair value through profit and loss were £0.8million (2022: £1.0million). The Group reported a profit before tax of £0.6million (2022: £38.0million) for the year resulting in a decrease in taxation for the year to £0.3million (2022: £11.9 million). This resulted in the Group achieving an overall profit for the year after tax of £0.3million (2022: £26.1million), of which £0.26million (2022: £17.6million) 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: South African Rand 2023 R’000 2022 R’000 1,087,690 1,886,276 (64,497) (821,307) (105,023) (767,490) 201,886 1,013,763 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 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 2023 £’000 47,422 (2,812) (35,808) 8,802 (7,422) 1,380 (158) 1,222 2023 ‘000 807 2023 R 1,268 (1,018) 250 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 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 Revenue Net Revenue per tonne of coal sold Mining and washing costs per tonne of coal sold Operating profit per tonne of coal sold before other operating costs and depreciation Domestic ‘000 897 Domestic R’000 843,218 R 938 Export ‘000 134 Export R’000 2023 ‘000 1,031 2023 R’000 Domestic ‘000 1,025 Domestic R’000 Export ‘000 262 Export R’000 2022 ‘000 1,287 2022 R’000 244,472 1,087,690 795,132 1,091,144 1,886,276 R 1,357 R 992 (797) 196 R 774 R 3,770 R 1,384 (596) 788 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 decreased for the year from R1,384 per tonne of coal sold in 2022 to R992 in 2023, mainly attributable to the average price decreases per tonne in the export market. This offset the average price increases in the domestic market. The average price increases in the domestic market were attributable to an increase in higher quality coal, destined for the export market, being sold domestically due to the lack of export rail capacity available. A decrease in mining production from Black Wattle and a decrease in buy-in coal processed during the year offset a decrease in coal inventories at the end of the year resulting in the quantity of coal sold for the year decreasing to 1.031million tonnes (2022: 1.287million tonnes). Overall, revenue from the Group’s South African mining operations decreased during the year to R1.088billion (2022: R1.886billion) mainly due to the lower coal export prices achievable and a decrease in overall coal volumes sold, particularly into the export market due to a lack of available export rail capacity. Mining and washing costs per tonne of coal sold during the year increased from R596 per tonne in 2022 to R797 per tonne in 2023 mainly due to an increases in mining costs per tonne from Black Wattle as outlined in the Mining Review on page 5. This resulted in an increase in total mining and washing costs for the Group to R821.3million (2022: R767.4million). Other operating costs (excluding depreciation) of £7.4million (2022: £12.08million) 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 decrease during the year can mainly be attributed to higher salaries and wages costs of the Group in 2022 due to the financial performance 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 £39.4million in 2022 to £2.6million in 2023 can mainly be attributed to the performance of the Group’s South African mining and coal processing operations outlined above. A further explanation of the mines operational performance can be found in the Mining Review on page 5. Bisichi PLC 2727 Other Investments During the year the Group’s non-current investments held at fair value through profit and loss increased from £12.6million in 2022 to £14.3million due to net additions during the year of £0.8million (2022: £8.2million) and gains from investments of £0.9million (2022: £0.7million). The investments comprise of £6.8million (2022: £6.8million) of investments listed on stock exchanges in the United Kingdom and £7.4million (2022: £5.8million) of investments listed on overseas stock exchanges. The Group’s listed investments continue to comprise primarily listed equities involved in extractive and energy related business activities, including entities involved in the extraction of commodities needed for the clean energy transition. Strategic Report Financial & performance review UK property investment Performance The Group’s portfolio is managed actively by London & Associated Properties plc. Rental performance levels improved in 2023. Net property revenue (excluding joint ventures and service charge income) across the portfolio increased during the year to £1.26million (2022: £1.11million). The property portfolio was externally valued at 31 December 2023 and the value of UK investment properties attributable to the Group at year end increased marginally to £10.610million (2022: £10.465million). Joint venture property investments The Group holds a £0.6million (2022: £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 £1.015million (2022: £1.019million). The Group continues to hold a £0.4million (2022: £0.4million) 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 £4.4million (2022: £4.1million). The joint venture has obtained planning consent for a residential development of 56 flats and four retail units. During 2023 the joint venture has been finalising detailed designs for the project and working with contractors and designers to improve 28 Bisichi PLC building efficiency and maximise potential returns. Currently, the joint venture is in detailed negotiations to finance construction of this development and intend to commence work in the second half of 2024. 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. A planning application submitted in 2023 for 44 flats and 4 town houses was rejected in January 2023 despite being recommended for approval by the planning officer. Our appeal, although we won on design and construction matters, was ultimately unsuccessful on a legal technicality and we are currently considering whether to submit a new application. At year end, the negative carrying value of the investment held by the Group was £24,000 (2022: £14,000). Overall, the Group achieved net property revenue of £1.4million (2022: £1.2million) for the year which includes the company’s share of net property revenue from its investment in joint ventures of £113,000 (2022: £108,000). Strategic Report Financial & performance review Cashflow 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) Cash flow generated from operating activities decreased compared to the prior year to £1.8million (2022: £30.7million). This can mainly be attributed to the decrease in operating profit during the year to £1.9million (2022: £39.0million). The decrease in operating profit can mainly be attributed to the weaker overall performance of the Group’s South African coal mining and processing operations. Investing cashflows primarily reflect the net acquisitions of listed equity investments of £0.8million (2022: £8.1million) and capital expenditure during the year of £5.9million (2022: £8.5million) 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 £18.8million (2022: £16.4 million) with capital expenditure being offset by depreciation of £1.4million (2022: £1.1milion) and exchange translation movements of £2.0million (2022: £0.6million) for the year. Cash outflows from financing activities includes a net decrease in borrowings of £0.5million (2022: increase £0.5million). In addition, dividends were paid during the year to equity shareholders of £2.3million (2022: £0.6million). Overall, the Group’s cash and cash equivalents decreased during the year by £7.8million (2022: increase of £6.9million). The Group’s net balance of cash and cash equivalents (including bank overdrafts) at year end was negative £0.3million (2022: £7.4million). The Group has considerable financial resources available at short notice including cash and cash equivalents (excluding bank overdrafts) of £3.2million (2022: £10.6 million) and listed investments of £15.0million (2022: £13.5million) as at year end. The above financial resources totalling £18.2million (2022: £24.1million). Year ended 31 December 2023 £’000 Year ended 31 December 2022 £’000 2,647 1,778 (6,701) (2,874) (7,797) 7,365 140 (292) 3,242 (3,534) (292) 39,768 30,698 (16,584) (7,206) 6,908 482 (25) 7,365 10,590 (3,225) 7,365 The net assets of the Group reported as at year end were £33.6million (2022: £35.6million) and total assets at £59.8million (2022: £63.8million). Liabilities decreased from £28.2million to £26.2million during the year primarily due to an decrease in trade and other payables from £13.3million to £11.6million offsetting an increase in tax payable from £4.3million to £5.2million. Further details on the Group’s cashflow and financial position are stated in the Consolidated Cashflow Statement on page 69 and the Consolidated Balance Sheet on page 66 and 67. 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 £3.9million. 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 £10.6million. The debt package has a five year term and is repayable at the end of the term in December 2024. The Group intends to renew or refinance the loan prior to the end of its term. 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 20; •• 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 35. Future prospects In the first quarter of the 2024, we have seen improved production from Black Wattle, our coal mining operation. In our South African coal markets, coal prices have stabilised and the availability of rail for export has improved for the year to date in comparison to 2023. In light of this, management will be focussing on sustaining 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, commodity and renewable energy 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 39. 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 22 April 2024 Governance 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 * JOHN A SIBBALD BL (Non-executive) Jonh 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 over 20 years and has extensive experience in investment management, in particular within the mining sector. JOHN A HELLER LLB, MBA (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. 00112155 (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 Central Square 29 Wellington Street Leeds LS1 4DL 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: 00112155 (England and Wales) * Member of the nomination committee O Member of the audit, nomination and remuneration committees. 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 2023 £’000 49,253 1,900 610 (255) 865 3,354 2,647 10,610 15,260 25,870 734 26,604 5,386 31,990 299.6p 7.00p 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 18 June 2024 Late August 2024 Late April 2025 Annual General Meeting Announcement of half-year results to 30 June 2024 Announcement of results for year ending 31 December 2024 32 Bisichi PLC Governance Directors’ report The directors submit their report together with the audited financial statements for the year ended 31 December 2023. 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 an equity investment portfolio, 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 2023 are shown on pages 64 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 recycling 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 2023 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 (2022: 4p) and a special dividend of 0p (2022: 8p) per share for 2023. An interim dividend for 2023 of 3p (Interim 2022: 10p) has been paid on 2 February 2024. The total dividend per ordinary share for 2023 will therefore be 7p (2022: 22p) per ordinary share. Investment properties and other properties The investment property portfolio is stated at its open market value of £10,610,000 at 31 December 2023 (2022: £10,465,000) 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 £5,176,000 (2022: £4,812,000). 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. Bisichi PLC 3333 Governance Directors’ report Following the year under review, the Company made an investment into a fund in which John Wong (an independent non-executive director) is linked by virtue of his engagement as the fund manager and having a material interest in the fund. In accordance with the Companies Act 2006, the Company’s articles of association and the Disclosure Guidance and Transparency Rules, John Wong recused himself from discussions relating to the proposed investment and the Board resolved to impose certain conditions on John Wong given his interests including, but not limited to, restricting the availability of information to John Wong and to exclude him from discussions and voting on matters relating to the investment and its ongoing review in line with the Company’s treasury policies. In accordance with the requirements of the Disclosure Guidance and Transparency Rules, the Company released an announcement containing the prescribed information on 3 April 2024. 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 (ceased to be a director on 18 April 2024), R J Grobler (a South African citizen), J A Sibbald, J Wong and J Heller (appointed 29 March 2023). Mr J Heller was appointed as a non- executive director by the Board on 29 March 2023. Mr J Heller is the Chairman and Managing Director of London & Associated Properties PLC which holds a 41.6% stake in Bisichi. Mr J Heller has extensive & valuable experience in property investment and management. The directors retiring by rotation are Mr AR Heller, Mr RJ Grobler and Mr J Wong, each of whom offer themselves for re-election. Mr A R Heller has been an executive director of the company since 1998. He is a Chartered Accountant and has been employed by the Group since 1994 under a contract of employment determinable at three months’ notice. The Board recommends the re-election of Mr AR Heller. Mr R J Grobler was appointed as General Mine Manager by Black Wattle Colliery (Proprietary) Ltd on 1 May 2000. He was appointed to the Board of Bisichi PLC as Director of Mining on 22 August 2008. He has over 40 years’ experience in the South African coal mining industry. The board recommends the re-election of RJ Grobler. Mr J Wong is a qualified Chartered Accountant and a Chartered Financial Analyst with extensive experience in the insurance and investment management industries. As noted on page 34, Mr J Wong is linked to an investment made by the Company and the Board has put in place certain measures to restrict access to information and exclude Mr J Wong from discussions and voting on matters relating to such investments. As such, the Board considers that Mr J Wong remains independent and, following the steps taken by the Board, can fulfil his duties to the Company notwithstanding his outside interests. The Board recommends the re-election of Mr J Wong. Other than noted above, 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 43 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 2023: London & Associated Properties PLC – 4,432,618 shares representing 41.6 per cent. of the issued capital (The Heller family is a shareholder of London & Associated Properties PLC). The Heller Family – 330,117 shares A R Heller – Stonehage Fleming Investment Management Ltd – representing 3.09 per cent. of the issued capital. 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. 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. 34 Bisichi PLC Governance Directors’ report 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 2023 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 53. The non-executive directors have a particular responsibility to ensure that the strategies proposed by the executive directors are fully considered. 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: •• In 2023, the nomination committee comprised of two non-executive directors C A Joll (Chairman) (ceased to be a director on 18 April 2024) 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. During 2023, the committee comprised of two non-executive directors C A Joll (Chairman) ) (ceased to be a director on 18 April 2024) and JA Sibbald. The company’s executive chairman is normally invited to attend meetings. The report on directors’ remuneration is set out on pages 40 to 49. •• In 2023, the audit committee comprised of two non-executive directors C A Joll (Chairman) (ceased to be a director on 18 April 2024) 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. Bisichi PLC 3535 Governance Directors’ report Where such directors were not members of the relevant committee, meetings are also attended, by invitation of the committee, by the Company’s executive chairman 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 pages 50 and 51. 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 executive chairman 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 executive 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. 36 Bisichi PLC Independent directors The senior independent non-executive director during 2023 was Christopher Joll (ceased to be a director on 18 April 2024). The other two independent non-executive directors are John Sibbald and John Wong. Christopher Joll was a non-executive director of the company 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 continued to fulfil their role as independent non-executive directors during the year. The Board considers that as a result of the systems and controls the Company has put in place, notwithstanding his outside business interests, including in relation to certain funds in which the Company has invested, John Wong remains independent. The independent directors regularly meet prior to Board meetings to discuss corporate governance issues. Internal control The directors are responsible for the Group’s system of internal control and review of its effectiveness annually. The Board has designed the Group’s system of internal control in order to provide the directors with reasonable assurance that its assets are safeguarded, that transactions are authorised and properly recorded and that material errors and irregularities are either prevented or would be detected within a timely period. However, no system of internal control can eliminate the risk of failure to achieve business objectives or provide absolute assurance against material misstatement or loss. The key elements of the control system in operation are: •• the Board meets regularly with a formal schedule of matters reserved to it for decision and has put in place an organisational structure with clearly defined lines of responsibility and with appropriate delegation of authority; •• there are established procedures for planning, approval and monitoring of capital expenditure and information systems for monitoring the Group’s financial performance against approved budgets and forecasts; •• UK property and financial operations are closely monitored by members of the Board and senior managers to enable them to assess risk and address the adequacy of measures in place for its monitoring and control. The South African operations are closely supervised by the UK based executives through daily, weekly and monthly reports from the directors and senior officers in South Africa. This is supplemented by regular visits by the UK based finance director to the South African operations which include checking the integrity of information supplied to the UK; and •• as required by the Disclosure Guidance and Transparency Rules, the Company has in place systems and controls to identify and classify related party transactions and to ensure the Company complies with its obligations in relation to such transactions. Governance Directors’ report 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. Board and board committee meetings The number of meetings during 2023 and attendance at regular Board meetings and Board committees was as follows: Sir Michael Heller (ceased to be a director on 30 January 2023) A R Heller G J Casey R J Grobler C A Joll (ceased to be a director on 18 April 2024) J A Sibbald J Wong J A Heller (appointed 29 March 2023) There were no significant issues identified during the year ended 31 December 2023 (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. 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 Board Meetings held Meetings Attended 1 - 1 5 2 5 2 5 5 2 1 1 5 2 1 1 5 3 - - - 5 2 5 2 1 3 1 1 1 4 2 1 1 4 3 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. Bisichi PLC 3737 Governance Directors’ report 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 with the policy is closely monitored. 38 Bisichi PLC 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, 18 June 2024 at 11.00 a.m. Resolutions 1 to 9 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 9 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 9) 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 9.1.1 of resolution 9 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 22 April 2024 (being the last practicable date prior to the publication of this Directors’ Report). Paragraph 9.1.2 of resolution 9 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 22 April 2024 (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 9 is £711,788. Resolution 9 complies with guidance issued by the Investment Association (IA). The authority granted by resolution 9 will expire on 31 August 2025 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 (2022: £nil). Governance Directors’ report 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. Significant investments have been made in opening new mining areas at Black Wattle Colliery (Pty) Ltd and production in 2024 to date has improved. The directors expect that coal market conditions for the Group’ will remain at a stable and profitable level through 2024. The directors therefore have a reasonable expectation that the mine will achieve positive levels of cash generation for the Group in 2024. 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 overall interest cost of the loan is 4.00% above the Bank of England base rate. The debt package has a five year term and is repayable at the end of the term in December 2024. The Group intends to renew or refinance the loan prior to the end of its term. All covenants on the loan were met during the year and in the period since the year end. 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 or to repay the loan if the loan cannot be renewed or refinanced by the end of its term. Dragon Retail Properties Limited (“Dragon”), the Group’s 50% owned joint venture, holds a Santander bank loan of £0.95million 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 4.2 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 July 2024. Santander have indicated that they are willing to provide a new term loan and we expect to complete this in the near future. Detailed budget and cash flow forecasts for the Group’s operations demonstrated that the Group has sufficient resources to meet its liabilities as they fall due for at least the next 12 months from the approval date of these financial statements. 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 22 April 2024 Bisichi PLC 3939 Governance Statement of the Chairman of the remuneration committee The remuneration committee presents its report for the year ended 31 December 2023. 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 12 April 2024 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 2024. During the year, in light of the performance of the Group, the board determined to award bonuses to certain executive directors of the Group. The second part is the Remuneration Policy which details the remuneration policy for Directors, and can be found at www.bisichi.co.uk. The current remuneration policy was subject to a binding vote which was approved by shareholders at the AGM in June 2023. The approval will continue to apply for a 3 year period commencing from then. The committee reviewed the existing policy and deemed that no changes were necessary to the current arrangements. The remuneration committee considered the overall performance of the group as well as of each director in the year ended 31 December 2023 and remuneration including bonuses were awarded in line with the performance conditions of the remuneration policy. 40 Bisichi PLC Governance Annual remuneration report The following information has been audited: Single total figure of remuneration for the year ended 31 December 2023: Salaries and Fees £’000 Benefits £’000 Bonuses £’000 Long Term Incentive Awards £’000 Notional Value of Vesting Share Options Pension £’000 Total 2023 £’000 Total Fixed Remuneration £’000 Total Variable Remuneration £’000 Executive Directors Sir Michael Heller (ceased to be a director on 30 January 2023) A R Heller G J Casey R Grobler Non–Executive Directors C A Joll* J A Sibbald* J Wong J Heller (appointed on 29 March 2023) Total 17 - 850 300 203 80 3 85 - 49 17 16 21 3 - 9 - - 75 - - - - - 1,538 115 75 - - - - - - - - - - 85 30 18 - - - - 133 - - - - - - - - - 17 984 422 237 101 6 85 9 17 984 347 237 101 6 85 9 - - 75 - - - - - 1,861 1,786 75 *Members of the remuneration committee for the year ended 31 December 2023 A R Heller has an entitlement to an employer pension contribution of £85,000 for 2023. He has elected for this not to be paid at this time. 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 Notional Value of Vesting Share Options 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 1,217 - 42 17 17 - 3 - 79 580 1,100 575 356 - - - 2,611 - - - - - - - - - - 19 19 - - - 38 - 273 273 - - - - 546 *Members of the remuneration committee for the year ended 31 December 2022 Total 2022 £’000 780 1,910 1,078 610 52 6 55 4,491 Total Fixed Remuneration £’000 Total Variable Remuneration £’000 200 537 230 254 52 6 55 1,334 580 1,373 848 356 - - - 3,157 Bisichi PLC 4141 Annual remuneration report Governance Annual remuneration report 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. Summary of directors’ terms Date of contract Unexpired term Executive directors A R Heller G J Casey R J Grobler Non-executive directors C A Joll (ceased to be a director on 18 April 2024) J A Sibbald J Wong J Heller January 1994 June 2010 April 2008 February 2001 October 1988 October 2020 March 2023 Continuous Continuous Continuous Continuous Continuous Continuous Continuous Notice period 3 months 3 months 3 months 3 months 3 months 3 months 3 months Pension schemes and incentives Three (2022: Two) directors have benefits under money purchase pension schemes. Contributions in 2023 were £133,410 (2022: £37,869), see table above. Under his contract of employment, A R Heller was entitled to a regular employer contribution (currently £85,000 a year) but has elected to defer the payment into his pension scheme. There are no additional benefits payable to any director in the event of early retirement. Scheme interests awarded during the year During the year no share options were granted under share option schemes. Share option schemes The company currently has only one Unapproved Share Option Scheme which is not subject to HM revenue and Customs (HMRC) approval. The 2012 scheme was approved by the remuneration committee of the company on 28 September 2012. Number of share options Option price* 1 January 2022 Options granted/ (Surrendered) in 2022 31 December 2022 Exercisable from Exercisable to 352.00p 352.00p - - 380,000 380,000 380,000 380,000 01/09/2022 01/09/2022 31/08/2032 31/08/2032 The 2012 Scheme A R Heller G J Casey *Middle market price at date of grant No consideration is payable for the grant of options under the 2012 Unapproved Share Option Scheme. There are no performance or service conditions attached to the 2012 Unapproved Share Option scheme. No part of the award was attributable to share price appreciation and no discretion has been exercised as a result of share price appreciation or depreciation. During the year, there were no changes to the exercise price or exercise period for the options. 42 Bisichi PLC Governance Annual remuneration report Payments to past directors No payments were made to past directors in the year ended 31 December 2023 (2022: £nil). Payments for loss of office No payments for loss of office were made in the year ended 31 December 2023 (2022: £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 (ceased to be a director on 30 January 2023) A R Heller R J Grobler G J Casey C A Joll J A Sibbald J Wong J A Heller (appointed 29 March 2023) Beneficial Non-beneficial 31.12.2023 1.1.2023 31.12.2023 148,783 785,012 - 148,783 785,012 - 40,000 40,000 - - - - - - - - 181,334 - - - - - - - 1.1.2023 181,334 - - - - - - - There are no requirements or guidelines for any director to own shares in the Company. 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 2023 was 127.5p (2022: 305p). During the year the share price ranged between 100p and 310p. 400 350 300 250 200 150 100 50 ) d e s a b e r ( e c i r P e r a h S 0 2014 – Bisichi Mining – FTSE All Share 2015 2016 2017 2018 2019 2020 2021 2022 2023 Bisichi PLC 4343 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 2014 to 31 December 2023. Year 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 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 £’000 850 1,637 929 551 1,035 1,073 898 850 912 862 Annual bonus payout against maximum opportunity* % 0% 74% 27% 0% 34% 34% 25% 22% 22% 22% 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. Percentage change in remuneration and Company performance The table below represents the change in remuneration of the directors in comparison to company performance: Sir Michael Heller £’000 (92%) 0% (100%) 141% 0% N/A1 0% 0% 0% Executive Non-executive A R Heller £’000 72% 17% (100%) G J Casey £’000 55% 0% (87%) R Grobler £’000 (7%) (6%) (100%) C A Joll £’000 54% N/A1 0% J A Sibbald £’000 0% 0% 0% J Wong £’000 55% 0% 0% J Heller £’000 N/A3 N/A3 N/A3 0% 24% 175% 0% (39%) N/A1 5% 0% 188% 20% (10%) N/A1 6% 55% 102% 6% 3% N/A1 0% 0% (100%) 0% 40% (100%) 3% 18% (100%) (7%) (17%) (100%) 30% 0% 0% 0% 0% 0% 5% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 10% 0% 0% 0% 0% 0% N/A2 N/A2 N/A2 N/A3 N/A3 N/A3 N/A3 N/A3 N/A3 N/A3 N/A3 N/A3 2023 Base Salary Benefits Bonuses 2022 Base Salary Benefits Bonuses 2021 Base Salary Benefits Bonuses 2020 Base Salary Benefits Bonuses Employee remuneration on a full-time equivalent basis: Employees of the Company4 (20%) 0% (94%) 47% 0% 478% 8% (26%) N/A1 1% 33% (100%) 1 Bonus and benefit changes are disclosed as not applicable if a bonus or benefit was awarded in the current year and no bonus or benefit were awarded to the director in the prior year. 2 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. 3 Mr J Heller was appointed as a non-executive Director on 29 March 2023 so the annual change is not applicable. 4 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. 44 Bisichi PLC 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) 2023 £’000 7,270 747 2022 £’000 11,991 2,348 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 6 June 2023. The policy took effect from the conclusion of the AGM and will apply for 3 years unless changes are deemed necessary by the remuneration committee. The company may not make a remuneration payment or payment for loss of office to a person who is, is to be, or has been a director of the company unless that payment is consistent with the approved remuneration policy, or has otherwise been approved by a resolution of members. During the year, there were no deviations from the procedure for the implementation of the remuneration policy as set out in the policy. Consideration by the directors of matters relating to directors’ remuneration The remuneration committee considered the executive directors remuneration and the board considered the non-executive directors remuneration in the year ended 31 December 2023. 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 6 June 2023, there was an advisory vote on the resolution to approve the remuneration report, other than the part containing the remuneration policy. In addition, on 6 June 2023 there was a binding vote on the resolution to approve the current remuneration policy. The results of which are detailed below: Resolution to approve the Remuneration Report (6 June 2023) Resolution to approve the Remuneration Policy (6 June 2023) % of votes for % of votes against No of votes withheld 75.13% 73.18% 24.87% 26.82% - 600,000 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. Bisichi PLC 4545 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 42 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 2023 AGM. The approved policy took effect from 6 June 2023. 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. Reviewed annually Paid monthly in cash 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. 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. 46 Bisichi PLC Governance Annual remuneration report ELEMENT PURPOSE POLICY OPERATION Benefits To provide a competitive benefits package Annual Bonus To reward and incentivise 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 remuneration committee determines the level of bonus on an annual basis applying such performance conditions and performance measures as it considers appropriate 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 OPPORTUNITY AND PERFORMANCE CONDITIONS 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 2023 is shown in the table on page 41. 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 4747 Governance Annual remuneration report ELEMENT PURPOSE POLICY OPERATION Share Options To provide executive directors with a long-term interest in the company Granted under existing schemes (see page 42) and new schemes Offered at appropriate times by the remuneration committee 48 Bisichi PLC OPPORTUNITY AND PERFORMANCE CONDITIONS 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 42). 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. Governance Annual remuneration report ELEMENT PURPOSE POLICY OPERATION OPPORTUNITY AND PERFORMANCE CONDITIONS NON-EXECUTIVE DIRECTORS Base salary To recognise: Skills Experience Value Pension Benefits Share Options 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 for health cover (see annual remuneration report page 41) Non-executive directors do not participate in the share option schemes Reviewed annually 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. 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. 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 4949 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 comprised of two non-executive directors during the year, 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, executive chairman, 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. 50 Bisichi PLC Governance Audit committee report Financial reporting As part of its role, the Audit Committee assessed the audit findings that were considered most significant to the financial statements, including those areas requiring significant judgment and/ or estimation. When assessing the identified financial reporting matters, the committee assessed quantitative materiality primarily by reference to profit before tax. The Board also gave consideration to: •• the carrying value of the Group’s total assets, given that the Group operates a principally asset based business; •• the value of revenues generated by the Group, given the importance of coal production and processing; •• Adjusted EBITDA, given that it is a key trading KPI, when determining quantitative materiality; and •• Going concern, given the potential impact of macro-economic activity on the Group’s operations. 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. 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 12 April 2024 Bisichi PLC 5151 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 2023 by the company as detailed in our Valuation Report dated 31 January 2024. Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2023 of the interests owned by the company was £10,610,000 being made up as follows: Freehold Leasehold Leeds 31 January 2024 £’000 8,395 2,215 10,610 Carter Towler Regulated by Royal Institute of Chartered Surveyors 52 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 5353 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 2023 Opinion We have audited the financial statements of Bisichi PLC (the ‘parent company’) and its subsidiaries (the ‘Group’) for the year ended 31 December 2023 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). 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 2023 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. 54 Bisichi PLC 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. 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 significant external factors including the impact of the war in Ukraine and the potential liquidity impact such factors on cash balances including available facilities. •• Analysed the financial strength of the business at the year end date and considered key trends in balance sheet strength and business performance over the last three years. •• Confirmations gained that operation of the business, including mine production and sale at Black Wattle Colliery have not been disrupted in the period by any external or internal factors. •• Testing the mechanical integrity of forecast model by checking the accuracy and completeness of the model, including challenging the appropriateness of estimates and assumptions with reference to empirical data and external evidence. •• Based on our above assessment we performed our own sensitivity analysis in respect of the key assumptions underpinning the forecasts. •• We performed stress-testing analysis on the core cash generating units of the business to confirm cash inflow levels needed to maintain minimal liquidity required to meet liabilities as they fall due. •• We considered post year end performance of the business, comparing this to budget as well as considering the development of key liquidity ratios in the business. 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. Governance Independent auditor report to the shareholders of Bisichi Plc •• The group’s banking facility documentation was reviewed to ensure that any covenants in place have not been breached. •• We reviewed the adequacy and completeness of the disclosure included within the financial statements in respect of going concern. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the entity’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. In relation to the Group and Parent Company’s reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the Group’s and Parent Company’s ability to continue as a going concern. Corporate Governance Statement The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Group’s and Parent Company’s compliance with the provisions of the UK Corporate Governance Code specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit: •• Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 39; •• 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 33; •• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 20 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 5555 Independent auditor report to the shareholders of Bisichi Plc Governance Independent auditor report to the shareholders of Bisichi Plc Our application of materiality Materiality £1,005,000 (2022: £711,200) £816,700 (2022: £710,000) Group financial statements Parent company financial statements Basis for determining materiality Rationale for benchmark applied ~3% of net assets ~3% of net assets 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 based on the net assets of the group is considered to be appropriate. The company’s principal activity is that of a holding company for the group and as such has no direct trade. It does hold investments balances with subsidiaries. Therefore a benchmark for materiality based on the net assets of the company is considered to be appropriate. Performance materiality £703,500 (2022: £533,400) £571,600 (2022: £533,500) Basis for determining performance materiality Rationale for performance materiality applied 70% of materiality 70% of materiality On the basis of our risk assessments, together with our assessment of the Group’s overall control environment and the business being listed on the LSE, our judgement was that performance materiality was 70% 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. On the basis of our risk assessments, together with our assessment of the company’s overall control environment and the company being listed on the LSE, our judgement was that performance materiality was 70% 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. Triviality threshold £50,200 (2022: £35,560) Basis for determining triviality threshold 5% of materiality £40,800 (2022: £35,500) 5% of 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 £571,600 and £19,600. 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. 56 Bisichi PLC Independent auditor report to the shareholders of Bisichi Plc Governance Independent auditor report to the shareholders of Bisichi Plc Coverage overview Totals at 31 December 2023: £49,452,801 £610,242 £33,594,091 Full statutory audit (Kreston Reeves and BDO) £49,452,801 (100%) £595,457 (97.6%) £33,492,433 (99.7%) Limited procedures £Nil £14,785 (2.4%) £101,658 (0.3%) Group revenue Group profit/(loss) before tax Group net assets 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 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) All other group undertakings Limited assurance (Kreston Reeves) Bisichi PLC 5757 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: £49,452,801 (2022: £95,110,894) 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. 58 Bisichi PLC Governance Independent auditor report to the shareholders of Bisichi Plc Valuation/impairment of investment properties: £10,818,441 (2022: £10,635,000) 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. 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. 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. 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: £18,722,439 (2022: £16,177,515) 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 5959 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 41 to 49 of the Annual Report for the year ended 31 December 2023. 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. 60 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 53), 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. Governance Independent auditor report to the shareholders of Bisichi Plc 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. 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 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. Bisichi PLC 6161 Governance Independent auditor report to the shareholders of Bisichi Plc 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. 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. 62 Bisichi PLC 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 3 years, covering the years ended 31 December 2021 and 31 December 2023. 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. 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: 23 April 2024 Financial statements 64 Consolidated income statement 65 Consolidated statement of other comprehensive income 66 Consolidated balance sheet 68 Consolidated statement of changes in shareholders’ equity 69 Consolidated cash flow statement 70 Group accounting policies 80 Notes to the financial statements 108 Company balance sheet 109 Company statement of changes in equity 110 Company accounting policies Bisichi PLC 63 Financial statements Financial statements Consolidated income statement for the year ended 31 December 2023 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 Increase/(Decrease) 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 2023 Trading £’000 Notes 1 49,253 3 (46,606) 2,647 (1,493) 1,154 (158) - - 996 (31) 965 222 (1,473) (286) (47) (333) (384) 51 (333) 1 1 1 4 1 14 7 5 8 27 10 10 2023 Revaluations and impairment £’000 - - - - - - 145 759 904 (8) 896 - - 896 (253) 643 643 - 643 2023 Total £’000 2022 Trading £’000 49,253 (46,606) 95,111 (55,748) 2,647 39,363 (1,493) (1,093) 1,154 38,270 (158) 145 759 1,900 (39) 1,861 222 (1,473) 610 (300) (270) - - 38,000 - 38,000 174 (1,047) 37,127 (11,878) 310 25,249 16,755 8,494 25,249 259 51 310 2.43p 2.43p 2022 Revaluations and impairment £’000 - - - - - - (60) 2022 Total £’000 95,111 (55,748) 39,363 (1,093) 38,270 (270) (60) 1,036 1,036 976 (89) 887 - - 887 (30) 857 857 - 857 38,976 (89) 38,887 174 (1,047) 38,014 (11,908) 26,106 17,612 8,494 26,106 164.96p 164.96p 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. 64 Bisichi PLC Financial statements Consolidated statement of other comprehensive income for the year ended 31 December 2023 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 2023 £’000 310 2022 £’000 26,106 (675) (675) (365) (210) (155) (365) (43) (43) 26,063 17,593 8,470 26,063 Bisichi PLC 65 Financial statements Consolidated balance sheet at 31 December 2023 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”) Deferred tax asset 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 66 Bisichi PLC Notes 2023 £’000 2022 £’000 11 12 13 13 23 16 17 18 20 19 20 21 31 23 10,818 18,896 1,002 14,258 318 45,292 2,579 7,934 734 3,242 14,489 59,781 (7,461) (11,589) (5,191) (24,241) (22) (1,614) (310) - (1,946) (26,187) 33,594 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 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 2023 £’000 1,068 258 2022 £’000 1,068 258 (3,028) (2,559) 1,112 32,580 31,990 1,604 33,594 1,112 33,923 33,802 1,759 35,561 These financial statements were approved and authorised for issue by the board of directors on 22 April 2024 and signed on its behalf by: A R Heller Director G J Casey Director Company Registration No. 00112155 Bisichi PLC 6767 Financial statements Consolidated statement of changes in shareholders’ equity for the year ended 31 December 2023 Share Premium £’000 Translation reserves £’000 Other reserves £’000 Retained earnings £’000 258 (2,540) 707 Balance at 1 January 2022 Profit for the year Other comprehensive expense Total comprehensive expense for the year Dividend (note 9) Share options cancelled Share options issued Share capital £’000 1,068 - - - - - - - - - - - - - (19) (19) - - - Balance at 1 January 2023 1,068 258 (2,559) Profit for the year Other comprehensive income Total comprehensive income for the year Dividend (note 9) - - - - - - - - - (469) (469) - Non- controlling interest £’000 323 8,494 (24) 8,470 Total £’000 17,512 17,612 (19) 17,593 Total equity £’000 17,835 26,106 (43) 26,063 18,019 17,612 - 17,612 (1,708) (1,708) (7,034) (8,742) - - (142) 547 - - (142) 547 33,923 33,802 1,759 35,561 259 - 259 259 (469) (210) 51 (206) (155) 310 (675) (365) (1,602) (1,602) - (1,602) - - - - (142) 547 1,112 - - - - Balance at 31 December 2023 1,068 258 (3,028) 1,112 32,580 31,990 1,604 33,594 68 Bisichi PLC Financial statements Consolidated cash flow statement for the year ended 31 December 2023 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 / (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 (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 2023 £’000 Year ended 31 December 2022 £’000 1,900 38,976 1,493 (145) - (759) 158 2,647 2,046 (2,026) 113 2,780 222 (1,361) 137 1,778 (5,944) - (757) (6,701) 99 (624) (2,349) - (2,874) (7,797) 7,365 140 (292) 3,242 (3,534) (292) 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 (8,124) (16,584) 524 (55) (641) (7,034) (7,206) 6,908 482 (25) 7,365 10,590 (3,225) 7,365 Bisichi PLC 6969 Financial statements Group accounting policies for the year ended 31 December 2023 General information Bisichi PLC (“the Company”) is a company incorporated and domiciled in the UK. The policies have been applied consistently to all years presented, unless stated. The group’s registered office and principal address can be found on page 31. Basis of accounting The results for the year ended 31 December 2023 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 pages 50 and 51 of the Audit Committee Report. Key judgements and estimates are disclosed below on page 73. 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 2023 2022 £1 Sterling: Dollar 2023 2022 23.3014 22.9364 20.5785 20.1929 1.2732 1.2389 1.2102 1.2967 Basis of measurement The consolidated financial statements have been prepared on a historical cost basis, except for the following items (refer to individual accounting policies for details): • • Financial instruments – fair value through profit and loss • • Investment property 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. Significant investments have been made in opening new mining areas at Black Wattle Colliery (Pty) Ltd and production in 2024 to date has improved. The directors expect that coal market conditions for the Group’ will remain at a stable and profitable level through 2024. The directors therefore have a reasonable expectation that the mine will achieve positive levels of cash generation for the Group in 2024. As a consequence, the directors believe that the Group is well placed to manage its South African business risks successfully. 70 Bisichi PLC Financial statements Group accounting policies 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 overall interest cost of the loan is 4.00% above the Bank of England base rate. The debt package has a five year term and is repayable at the end of the term in December 2024. The Group intends to renew or refinance the loan prior to the end of its term. All covenants on the loan were met during the year. 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 or to repay the loan if the loan cannot be renewed or refinanced by the end of its term. Dragon Retail Properties Limited (“Dragon”), the Group’s 50% owned joint venture, holds a Santander bank loan of £0.95million 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 4.2 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 July 2024. Santander have indicated that they are willing to provide a new term loan and we expect to complete this in the near 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. UK-adopted International Financial Reporting Standards (adopted 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 2023. New standards and interpretations that are relevant to the Group are summarised below: Standard Overview Amendments to IAS 1 and IFRS Practice Statement 2 – Making Materiality Judgements – Disclosure of Accounting Policies Amendments to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors The amendments to IAS 1 require an entity to disclose material accounting policies. The amendments introduce a definition for accounting estimates which is ‘monetary amounts in financial statements that are subject to measurement uncertainty’. Measurement uncertainty will arise when monetary amounts required to apply an accounting policy cannot be observed directly. In such cases, accounting estimates will need to be developed using judgements and assumptions. Impact No significant impact No significant impact Amendments to IAS 12 – Income Taxes - Deferred Tax related to Assets and Liabilities arising from a Single Transaction This amendment to IAS 12 Income Taxes introduces an exception to the “initial recognition exemption” when the transaction gives rise to equal taxable and deductible temporary differences. No significant impact Amendments to IAS 12 – Income Taxes - International Tax Reform – Pillar Two Model Rules This amendment to IAS 12 Income Taxes introduces disclosures to help investors better understand a company’s exposure to income taxes arising from the reform, particularly before legislation implementing the rules is in effect. No significant impact Bisichi PLC 7171 Financial statements Group accounting policies 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. New standards, amendments and interpretations issued but not yet effective that are relevant to the Group are summarised below: Standard Overview Amendments to IAS 1 - Classification of Liabilities as Current or Non-current Amendments to IAS 1 - Non-current Liabilities with Covenants Amendments to IFRS 16- Lease Liability in a Sale and Leaseback Amendments to IAS 7 and IFRS 7 Amendments to IAS 21 – Lack of Exchangeability Effective date: 1 January 2024 (early adoption permitted). The standard has been amended to clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. Effective date: 1 January 2024 (early adoption permitted). The standard confirms that only those covenants with which an entity must comply on or before the end of the reporting period affect the classification of a liability as current or non- current. Effective date: 1 January 2024 (early adoption permitted). The amendments address the accounting that should be applied by a seller- lessee in a sale and leaseback transaction when the leaseback contains variable lease payments, that do not depend on an index or rate. Effective date: 1 January 2024 (early adoption permitted). The amendments require an entity to disclose information about its supplier finance arrangements to enable users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk. Effective date: 1 January 2025 (early adoption permitted). The amendments have been made to clarify: • when a currency is exchangeable into another currency; and • how a company estimates a spot rate when a currency lacks exchangeability. Potential Impact No significant impact expected No significant impact expected No significant impact expected No significant impact expected No significant impact expected 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. 72 Bisichi PLC Financial statements Group accounting policies 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, as disclosed in note 12, to have a 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 6 years. This life of mine is based on the Group’s existing coal reserves including reserves acquired but subject to regulatory approval. The Group continues to evaluate 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. 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 2023 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 9% reduction in average forecast coal prices or a 8% 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. Bisichi PLC 7373 Financial statements Group accounting policies 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 2023, the costs capitalised within the 74 Bisichi PLC 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. 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. Financial statements Group accounting policies 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 and head leases. 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. 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. 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. Bisichi PLC 7575 Financial statements Group accounting policies 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 76 Bisichi PLC 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. 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 42 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 statements Group accounting policies Financial assets Financial assets are classified as either financial assets at amortised cost, at fair value through other comprehensive income (“FVTOCI”) or at fair value through profit or loss (“FVPL”) depending upon the business model for managing the financial assets and the nature of the contractual cash flow characteristics of the financial asset. A loss allowance for expected credit losses is determined for all financial assets, other than those at FVPL, at the end of each reporting period. The Group applies a simplified approach to measure the credit loss allowance for trade receivables using the lifetime expected credit loss provision. The lifetime expected credit loss is evaluated for each trade receivable taking into account payment history, payments made subsequent to year end and prior to reporting, past default experience and the impact of any other relevant and current observable data. The Group applies a general approach on all other receivables classified as financial assets. The general approach recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. The Group derecognises financial liabilities when the Group’s obligations are discharged, cancelled or have expired. Bank loans and overdrafts Bank loans and overdrafts are included as financial liabilities on the Group balance sheet at the amounts drawn on the particular facilities net of the unamortised cost of financing. Interest payable on those facilities is expensed as finance cost in the period to which it relates. Lease liabilities For any new contracts entered into the Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Group assesses whether the contract contains an identified asset and has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use. At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. Right-of-use assets, excluding property head leases, have been included in property, plant and equipment and are measured at cost, which is made up of the initial measurement of the lease liability and any initial direct costs incurred by the Group. The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate. Liabilities relating to short term leases are included within trade and other payables. Lease payments included in the measurement of the lease liability are made up of fixed payments and variable payments based on an index or rate, initially measured using the index or rate at the commencement date. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is re-measured to reflect any reassessment or modification. When the lease liability is re-measured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. Lease liabilities that arise for investment properties held under a leasehold interest and accounted for as investment property are initially calculated as the present value of the minimum lease payments, reducing in subsequent reporting periods by the apportionment of payments to the lessor. The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients available in IFRS 16. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term. Investments Current financial asset investments and other investments classified as non- current (“The investments”) comprise of shares in listed companies. The investments are measured at fair value. Any changes in fair value are recognised in the profit or loss account and accumulated in retained earnings. 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. Bisichi PLC 7777 Financial statements Group accounting policies 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. 78 Bisichi PLC 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. 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. Financial statements Group accounting policies 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 7979 Financial statements Notes to the financial statements for the year ended 31 December 2023 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 profit and segment result Depreciation Non-current assets excluding investments Total net assets Capital expenditure 80 Bisichi PLC Mining £’000 22,283 10,659 4,854 9,628 47,424 (113) (158) (271) 2023 Property £’000 - - - 1,268 1,268 711 145 856 Other £’000 - - - 561 561 556 759 1,315 26,767 13,402 14,996 (17,680) (3,563) (21,243) (709) (3,920) (4,629) 3 - 3 United Kingdom £’000 1,829 411 (34) 10,873 26,018 35 South Africa £’000 47,424 1,489 (1,459) 18,842 7,576 5,909 Total £’000 22,283 10,659 4,854 11,457 49,253 1,154 746 1,900 55,165 54 3,242 58,461 (18,386) (7,483) (24,869) 32,592 1,002 33,594 Total £’000 49,253 1,900 (1,493) 29,715 33,594 5,944 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 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 Bisichi PLC 8181 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 2023 £’000 2022 £’000 47,424 181 1,087 561 49,253 93,413 98 1,010 590 95,111 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 2023 £’000 38,620 339 38,959 9,140 48,099 305 34 339 2022 £’000 43,209 269 43,478 13,363 56,841 250 19 269 Operating costs above include depreciation of £1,493,000 (2022: £1,093,000). 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 surplus/(deficit) Gain/(Loss) on valuation movement in respect of head lease payments Gain/(Loss) on revaluation of investment properties 82 Bisichi PLC 2023 £’000 145 38 183 2022 £’000 (60) (5) (65) 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 Inventories recognised as an expense 2023 £’000 7,270 1,493 (158) 55 2022 £’000 11,991 1,093 (270) 50 40 35,808 43 35,969 6. DIRECTORS’ EMOLUMENTS Directors’ emoluments are shown in the Directors’ remuneration report on page 41 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 2023 £’000 771 112 27 563 2022 £’000 507 319 25 196 1,473 1,047 Bisichi PLC 8383 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 2023 £’000 - 1,318 - 1,318 (1,018) 300 2022 £’000 - 11,520 - 11,520 388 11,908 (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 23.5% (2022: 19%). The differences are explained below: Profit/ Loss on ordinary activities before taxation Tax on profit/ loss on ordinary activities at 23.50% (2022: 19.00%) Effects of: Expenses not deductible for tax purposes Non-taxable income 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 charge/(credit) (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 610 143 241 (95) - (75) 86 - 300 - (93) (93) 1,318 - 1,318 (925) 393 38,014 7,223 280 (83) 14 4,491 (17) - 11,908 - (937) (937) 11,520 - 11,520 1,325 12,845 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% (2022: 25%) and the corporation tax rate assessed in South Africa for the year of 27% (2022: 28%) being different from the corporation tax rate in the UK. 84 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 2023 Per share 12p 2023 £’000 1,282 2022 Per share 6.00p 3.00p 4.00p 0.00p 7.00p 320 427 - 747 10p 4p 8p 22p 2022 £’000 641 1,067 427 854 2,348 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 £1,602,000 (2022: £1,708,000) comprise of dividends paid during the year relating to the prior period of £1,282,000 (2022: £641,000) and the interim dividend of £320,000 (£1,067,000). The final dividend for 2023 is not accounted for until it has 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 £259,000 (2022: £17,612,000). The basic profit/(loss) per share of 2.43p has been calculated on a weighted average of 10,676,839 (2022: 10,676,839) ordinary shares being in issue during the period. The diluted profit per share of 2.43p has been calculated on the weighted average number of shares in issue of 10,676,839 (2022: 10,676,839) plus the dilutive potential ordinary shares arising from share options of nil (2022: nil) totalling 10,676,839 (2022: 10,676,839). 11. INVESTMENT PROPERTIES Valuation at 1 January 2023 Revaluation Valuation at 31 December 2023 Valuation at 1 January 2022 Revaluation Valuation at 31 December 2022 Historical cost At 31 December 2023 At 31 December 2022 Freehold £’000 Long Leasehold £’000 8,270 125 8,395 8,230 40 8,270 5,851 5,851 2,195 20 2,215 2,295 (100) 2,195 728 728 Head Lease £’000 170 38 208 175 (5) 170 - - Total £’000 10,635 183 10,818 10,700 65 10,635 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. Bisichi PLC 8585 Financial statements Notes to the financial statements 11. INVESTMENT PROPERTIES CONTINUED Freehold and Long Leasehold properties were externally professionally valued at 31 December on an open market basis by: Carter Towler 2023 £’000 10,610 2022 £’000 10,465 The valuations were carried out in accordance with the Statements of Asset Valuation and Guidance Notes published by The Royal Institution of Chartered Surveyors. Each year external valuers are appointed by the Executive Directors on behalf of the Board. The valuers are selected based upon their knowledge, independence and reputation for valuing assets such as those held by the Group. 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 86 Bisichi PLC Financial statements Notes to the financial statements 11. INVESTMENT PROPERTIES CONTINUED The inter-relationship between key unobservable inputs and the Groups’ properties is detailed in the table below: Class of property Level 3 Valuation technique Freehold – external valuation Income capitalisation Long leasehold – external valuation Income capitalisation Key unobservable inputs Estimated rental value per sq ft p.a Equivalent Yield Estimated rental value per sq ft p.a Equivalent yield Carrying/ fair value 2023 £’000 8,395 Carrying/ fair value 2022 £’000 8,270 2,215 2,195 Range (weighted average) 2023 £4 – £29 (£21) Range (weighted average) 2022 £4 – £29 (£21) 8.8% – 13.5% (10.7%) £9 – £9 (£9) 8.9% – 15.8% (11.4%) £8 – £8 (£8) 10.4% – 10.4% (10.4%) 9.8% – 9.8% (9.8%) At 31 December 10,610 10,465 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 v aluation. 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. 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 Estimated rental value 10% increase or decrease Equivalent yield 25 basis Point contraction or expansion 2023 £’000 2022 £’000 2023 £’000 2022 £’000 840/(840) 827 / (827) 215/(205) 205 / (195) 222/(222) 220 / (220) 55/(52) 57 / (55) Bisichi PLC 8787 Financial statements Notes to the financial statements 12. MINING RESERVES, PLANT AND EQUIPMENT Cost at 1 January 2023 Exchange adjustment Additions Disposals Cost at 31 December 2023 Accumulated depreciation at 1 January 2023 Exchange adjustment Charge for the year Disposals Accumulated depreciation at 31 December 2023 Net book value at 31 December 2023 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 Mining equipment and develop- ment costs £’000 Motor vehicles £’000 Office equipment £’000 36,291 (4,333) 5,903 37,861 21,347 (2,517) 1,443 - 20,273 17,588 29,063 134 7,117 (23) 36,291 20,167 166 1,037 (23) 21,347 14,944 385 (33) 27 379 256 (20) 28 - 264 115 396 3 55 (69) 385 264 3 38 (49) 256 129 168 (14) 14 168 97 (10) 22 - 109 59 179 1 60 (72) 168 150 1 18 (72) 97 71 Mining reserves £’000 2,332 (273) - - 2,059 1,099 (174) - 925 1,134 1,097 (13) 1,248 - 2,332 1,089 10 - - 1,099 1,233 Total £’000 39,176 (4,653) 5,944 40,467 22,799 (2,721) 1,493 - 21,571 18,896 30,735 125 8,480 (164) 39,176 21,670 180 1,093 (144) 22,799 16,377 88 Bisichi PLC 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: Net book value at 1 January 2023 Additions Exchange adjustment Depreciation Net book value at 31 December 2023 Net book value at 1 January 2022 Additions Exchange adjustment Depreciation Net book value at 31 December 2022 13. INVESTMENTS HELD AS NON-CURRENT ASSETS At 1 January Gain in investment Additions Disposals Share of (loss) in joint ventures Net assets at 31 December Other investments comprise of the following: Mining Equipment and develop- ment costs £’000 Motor vehicles £’000 186 1 (24) (35) 128 219 - 5 (38) 186 2023 Other £’000 2023 Net investment in joint ventures assets £’000 1,041 12,590 - - - (39) 856 1,189 (377) - 21 - - (12) 9 48 - - (27) 21 2022 Net investment in joint ventures assets £’000 1,130 - - - (89) Total £’000 207 1 (24) (47) 137 267 - 5 (65) 207 2022 Other £’000 3,631 718 9,758 (1,517) - 1,002 14,258 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 2023 £’000 - 6,843 7,415 14,258 2022 £’000 - 6,782 5,808 12,590 Dividend income from investments held as non-current assets was £501,000 (2022: £437,000) for the year. Bisichi PLC 8989 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 £24,000 (2022: £14,000). 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, W1W 8BJ. It has issued share capital of 99 (2022: 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 £593,000 (2022: £606,000). 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, W1W 8BJ. It has issued share capital of 500,000 (2022: 500,000) ordinary shares of £1 each. No dividends were received during the period. It holds a Santander bank loan of £0.95million secured against its investment property. The bank loan of £0.95million 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 4.2 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 July 2024. 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 £434,000 (2022: £449,000). 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, W1W 8BJ. It has issued share capital of 1,000,000 (2022: 1,000,000) ordinary shares of £1 each. No dividends were received during the period. 90 Bisichi PLC Financial statements Notes to the financial statements 14. JOINT VENTURES CONTINUED Development Physics £’000 - Dragon £’000 168 West Ealing £’000 65 2023 £’000 233 Development Physics £’000 - Dragon £’000 168 West Ealing £’000 53 2022 £’000 221 (28) 53 (32) - (28) - - (28) - (28) - 5 483 - - (559) (71) - - (71) (24) (2) 51 - (79) (28) - (28) 2,030 57 - 112 (950) (64) (845) - - 1,185 593 - (32) - (1) (33) - (33) - 9 8,889 64 (4,386) (3,709) 867 - - 867 434 (7) (2) (9) - (80) (89) - (89) 2,030 71 9,372 176 (5,336) (4,332) (49) - - 1,981 1,002 (33) (5) (71) (109) - (33) - - (33) - (33) - 2 348 2 - (395) (43) - - (43) (14) (3) (8) - (51) (59) (2) (61) 2,038 107 - 269 (1,143) (59) (826) - - 1,212 606 - (71) - (1) (72) (34) (106) - 9 8,112 47 (4,399) (2,862) 907 (9) - 898 449 (3) (112) - (52) (164) (36) (200) 2,038 118 8,460 318 (5,542) (3,316) 38 (9) - 2,067 1,041 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 Bisichi PLC 9191 Financial statements Notes to the financial statements 15. SUBSIDIARY COMPANIES The company owns the following ordinary share capital of the subsidiaries which are included within the consolidated financial statements: Activity Percentage of share capital Registered address Country of incorporation Directly held: Mineral Products Limited Bisichi (Properties) Limited Bisichi Northampton Limited Bisichi Trustee Limited Share dealing 100% Property Property Property 100% 100% 100% 100% Urban First (Northampton) Limited Property Bisichi Mining (Exploration) Limited Holding company 100% Ninghi Marketing Limited Bisichi Mining Management Services Limited Dormant Dormant 90.1% 100% Bisichi Coal Mining (Pty) Limited Coal mining 100% Indirectly held: Black Wattle Colliery (Pty) Limited Coal mining 62.5% Sisonke Coal Processing (Pty) Limited Coal processing 62.5% Black Wattle Klipfontein (Pty) Limited Coal mining 62.5% Amandla Ehtu Mineral Resource Development (Pty) Limited Dormant 70% Details on the non-controlling interest in subsidiaries are shown under note 27. 92 Bisichi PLC 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 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 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 South Africa South Africa South Africa South Africa Financial statements Notes to the financial statements 16. INVENTORIES Coal Washed Mining Production Work in progress Other 2023 £’000 1,949 542 85 3 2022 £’000 4,758 162 221 58 2,579 5,199 The amount of inventories recognised as an expense during the period was £35,808,000 (2022: £35,969,000). 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 2023 £’000 4,180 1,844 1,727 183 7,934 2022 £’000 4,067 1,379 860 131 6,437 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 £374,000 (2022: £89,000). Bisichi PLC 9393 Financial statements Notes to the financial statements 18. INVESTMENTS IN LISTED SECURITIES HELD AT FVPL At 1 January (Loss)/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 (deficit)/surplus of market value versus cost 2023 Other £’000 886 (97) - (55) 734 2023 £’000 618 116 734 760 (26) Dividend income from investments in listed securities held at FVPL was £54,000 (2022: £147,000) for the year. 2022 Other £’000 685 318 449 (566) 886 2022 £’000 686 200 886 846 40 2022 £’000 8,519 120 54 2,000 2.366 223 13,282 2023 £’000 8,673 33 63 1,949 649 222 11,589 Current Non-current 2023 £’000 3,534 3,927 7,461 2022 £’000 3,225 570 3,795 2023 £’000 - 22 22 2022 £’000 - 3,930 3,930 19. TRADE AND OTHER PAYABLES Trade payables Amounts owed to joint ventures Lease liabilities (Note 31) Other payables Accruals Deferred Income 20. FINANCIAL LIABILITIES – BORROWINGS Bank overdraft (secured) Bank loan (secured) 94 Bisichi PLC Financial statements Notes to the financial statements 20. FINANCIAL LIABILITIES – BORROWINGS CONTINUED 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 2023 £’000 2022 £’000 7,461 22 - 7,483 3,920 3,563 7,483 3,795 3,906 24 7,725 3,880 3,845 7,725 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 £9,373,603 (2022: £11,482,554). All banking covenants were either adhered to or waived by Absa Bank Limited during the year. In the UK, the Group holds a £3.9 million 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 £10,610,000 (2022: £10,465,000). No banking covenants were breached by the Group during the year. The Group intends to renew or refinance the loan prior to the end of its term. Dragon Retail Properties Limited (“Dragon”), the Group’s 50% owned joint venture, holds a Santander bank loan of £0.95million 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 4.2 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 July 2024. Santander have indicated that they are willing to provide a new term loan and we expect to complete this in the near future. 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: Total bank loans and overdraft Less cash and cash equivalents (excluding overdraft) Net debt Total equity attributable to shareholders of the parent Gearing 2023 £’000 7,483 (3,242) 4,241 31,990 (13.3%) 2022 £’000 7,725 (10,590) (2,865) 33,802 (8.5%) Bisichi PLC 9595 Financial statements Notes to the financial statements 20. FINANCIAL LIABILITIES – BORROWINGS CONTINUED Analysis of the changes in liabilities arising from financing activities: Balance at 1 January Exchange adjustments Cash movements excluding exchange adjustments Additions Balance at 31 December Bank borrowings £’000 4,499 (64) (486) Bank Lease overdrafts £’000 3,225 (388) 697 liabilities £’000 398 (24) (39) - 3,949 - 3,534 38 373 2023 £’000 8,122 (476) 172 38 7,856 21. PROVISION FOR REHABILITATION Bank borrow- ings £’000 3,983 (9) 525 Bank overdrafts £’000 2,536 11 678 Lease liabilities £’000 454 5 (56) 2022 £’000 6,973 7 1,147 - 4,499 - 3,225 (5) 398 (5) 8,122 As at 1 January Exchange adjustment Increase in provision Unwinding of discount As at 31 December 22. FINANCIAL INSTRUMENTS Total financial assets and liabilities 2023 £’000 1,715 (213) - 112 1,614 2022 £’000 1,390 6 - 319 1,715 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 3,242 - Financial Liabilities measured at amortised cost £’000 - - Investments held at FVPL £’000 - 14,258 2023 £’000 3,242 14,258 Financial Assets measured at amortised cost £’000 10,590 - Financial Liabilities measured at amortised cost £’000 - - Investments held at FVPL £’000 - 12,590 2022 £’000 10,590 12,590 - - 734 734 - - 886 886 7,571 - - (7,483) - - 7,571 (7,483) - - 10,993 (373) (16,495) (24,351) - - 14,992 (373) (16,495) 1,634 6,306 - - - 16,896 - (7,725) (398) (17,261) (25,384) - - 6,306 (7,725) - - 13,476 (398) (17,261) 4,988 Cash and cash equivalents Non-current other investments held at FVPL Investments in listed securities held at FVPL Trade and other receivables Bank borrowings and overdraft Lease Liabilities Other liabilities 96 Bisichi PLC Financial statements Notes to the financial statements 22. FINANCIAL INSTRUMENTS CONTINUED 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 2022 fall under the same category of financial instrument as 2023. 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. As at 31 December 2023, 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 £56,000 (2022: £35,000). The effect on equity of this change would be an equivalent decrease or increase for the year of £56,000 (2022: £35,000). 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 Sisonke Coal Processing (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 2023 £’000 24,431 62 130 144 2022 £’000 21,511 4,259 479 126 24,767 26,375 Bisichi PLC 9797 Financial statements Notes to the financial statements 22. FINANCIAL INSTRUMENTS CONTINUED 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 2023 £’000 7,512 11,255 5,664 24,431 2022 £’000 15,635 4,150 1,726 21,511 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 £3.9 million 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 Group intends to renew or refinance the loan prior to the end of its term. 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 £10,993,000 (2022: £16,896,000). To mitigate risk on its cash and cash equivalents, the Group only deposits surplus cash with well-established financial institutions of high quality credit standing. The Group’s credit risk is primarily attributable to its trade receivables. Trade debtor’s credit ratings are reviewed regularly. The Group’s review includes measures such as the use of external ratings and establishing purchase limits for each customer. The Group had amounts due from its significant revenue customers at the year end that represented 73% (2022: 84%) 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 £374,000 (2022: £89,000). As at year end the amount of trade receivables held past due date less credit loss allowances was £144,000 (2022: £159,000). To date, the amount of trade receivables held past due date less credit loss allowances that has not subsequently been settled is £19,000 (2022: £122,000). 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. 98 Bisichi PLC Financial statements Notes to the financial statements 22. FINANCIAL INSTRUMENTS CONTINUED Financial assets maturity On 31 December 2023, cash at bank and in hand amounted to £3,242,000 (2022: £10,590,000) 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 2023 and 2022 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 2023, 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 £280,000 (2022: £121,000). 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 £466,000 (2022: £201,000). 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 2023 £’000 1,570 1,109 563 3,242 2022 £’000 7,779 2,238 573 10,590 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: 2023: Sterling South African Rand US Dollar 2022: 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 South African Rands £’000 - (12,583) - (12,583) South African Rands £’000 - (11,743) - (11,743) 2022 £’000 506 388 (22) 872 671 3,855 (813) (1,439) (1,402) 872 Sterling £’000 12,082 40 2,095 14,217 Sterling £’000 14,715 45 1,971 16,731 2023 £’000 872 (1,018) (172) (318) 924 4,562 (846) (2,665) (2,293) (318) Refer to note 8 for details of deferred tax recognised in income in the current year. Tax rates of 25% (2022: 25%) in the UK and 27% (2022: 27%) 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 2023 Number of ordinary shares 2022 Number of ordinary shares 10,676,839 10,676,839 2023 £’000 1,300 2022 £’000 1,300 2023 £’000 1,068 2023 £’000 1,026 86 1,112 2022 £’000 1,068 2022 £’000 1,026 86 1,112 26. SHARE BASED PAYMENTS Details of the share option scheme are shown in the Directors’ remuneration report on page 42 under the heading Share option schemes which is within the audited part of this report. Further details of the share option schemes are set out below. The Bisichi PLC Unapproved Option Schemes: Subscription price per share Period within which options exercisable Number of share for which options outstanding at 31 December 2022 Number of share options lapsed/surrendered /awarded during year Number of share for which options outstanding at 31 December 2023 352.0p Sep 2022 – Sep 2032 760,000 - 760,000 Year of grant 2022 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. Bisichi PLC 101101 Financial statements Notes to the financial statements 26. SHARE BASED PAYMENTS CONTINUED 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% 2023 Weighted average exercise price 2023 Number 760,000 352.00p - - - - 760,000 760,000 352.00p 352.00p 2022 Weighted average exercise price 79.46p 79.46p 352.00p 352.00p 352.00p 2022 £’000 323 1 8,494 (7,034) (25) 1,759 2022 Number 680,000 (680,000) 760,000 760,000 760,000 2023 £’000 1,759 - 51 - (206) 1,604 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 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 2023 £’000 47,423 (47,275) 148 - 148 18,843 9,033 (20,451) (2,262) 5,163 2022 £’000 93,356 (63,289) 30,067 - 30,067 16,325 11,752 (18,873) (3,522) 5,682 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 2023 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 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 - - 33 - 33 - - 120 - 120 - (1,618) - (226) (1,844) - (1,237) - (142) (1,379) 200 - (36) - 164 200 - (36) - 164 (200) (381) (51) (84) (716) (241) (239) - (75) (555) (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 41 and 42 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 £326,000 (2022: £580,000). 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 (2022: £41,000) and no repayment (2022: £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 £40,000 (2022: £44,000) and an investment in Vunani Capital Partners (Pty) Ltd of £70,000 (2022: £189,000). 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 2023 £’000 6,495 326 449 - 7,270 2023 209 15 224 2023 £’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 2023 is as follows: Within one year Second to fifth year After five years Discounting adjustment Present value Mining Equipment & Development costs £’000 Motor Vehicles £’000 41 136 9 186 (30) 156 9 - - 9 - 9 Head Lease Property £’000 13 52 1,564 1,629 (1,421) 208 2023 £’000 62 188 1,573 1,824 (1,451) 373 2022 £’000 8,891 580 300 2,220 11,991 2022 213 15 228 2022 £’000 - 2022 £’000 71 210 1,341 1,622 (1,222) 400 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 2023 is as follows: Within one year (Note 19) Second to fifth year After five years Present value Mining Equipment & Development costs £’000 41 110 5 156 Motor Vehicles £’000 Head Lease Property £’000 9 - - 9 13 41 154 208 2023 £’000 54 157 163 373 2022 £’000 54 170 176 400 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 125 years (2022: 126 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 105 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 2023 £’000 959 854 756 674 624 9,327 13,194 2022 £’000 973 875 801 716 645 9,530 13,540 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 2023 £’000 43 1,614 41 2022 £’000 49 1,715 47 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 22 April 2024, 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 2023 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 2023 £’000 99 665 20,614 21,378 3,820 1,280 1,651 6,751 (782) 5,969 27,347 - 2022 £’000 98 665 18,946 19,709 2,754 1,159 7,928 11,841 (2,514) 9,327 29,036 (9) 27,347 29,027 1,068 258 1,027 24,994 27,347 1,068 258 1,027 26,674 29,027 The loss for the financial year, before dividends payable, was £78,000 (2022: profit of £15,415,000) The company financial statements were approved and authorised for issue by the board of directors on 22 April 2024 and signed on its behalf by: A R Heller Director G J Casey Director 108 Bisichi PLC Company Registration No. 00112155 Financial statements Company statement of changes in equity for the year ended 31 December 2023 Balance at 1 January 2022 Dividends paid Share options cancelled Share options issued Profit and total comprehensive income for the year Balance at 1 January 2023 Dividends paid Profit and total comprehensive income for the year Balance at 31 December 2023 Share capital £’000 1,068 Share premium £’000 258 - - - - 1,068 - - 1,068 - - - - 258 - - 258 Other reserve £’000 Retained earnings £’000 Shareholders funds £’000 622 - (142) 547 - 1,027 - - 1,027 12,967 (1,708) - - 15,415 26,674 (1,602) (78) 24,994 14,915 (1,708) (142) 547 15,415 29,027 (1,602) (78) 27,347 Bisichi PLC 109109 Notes to the financial statements for the year ended 31 December 2023 Financial statements Company accounting policies for the year ended 31 December 2023 The following are the main accounting policies of the company: •• the effect of future accounting standards not yet adopted; Basis of preparation The financial statements have been prepared in accordance with Financial Reporting Standard 100 Application of Financial Reporting Requirements and Financial Reporting Standard 101 Reduced Disclosure Framework. The principal accounting policies adopted in the preparation of the financial statements are set out below. The financial statements have been prepared on a historical cost basis, except for the revaluation of leasehold property and certain financial instruments. Going concern Details on the Group’s adoption of the going concern basis of accounting in preparing the annual financial statements can be found on page 70. •• the disclosure of the remuneration of key management personnel; and •• disclosure of related party transactions with the company’s wholly owned subsidiaries. In addition, and in accordance with FRS 101, further disclosure exemptions have been adopted because equivalent disclosures are included in the company’s Consolidated Financial Statements. Dividends received Dividends are credited to the profit and loss account when received. Depreciation Provision for depreciation on tangible fixed assets is made in equal annual instalments to write each item off over its useful life. The rates generally used are: Office equipment 10 – 33 percent 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. 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. Therefore these financial statements do not include: •• certain comparative information as otherwise required by IFRS; •• certain disclosures regarding the company’s capital; •• a statement of cash flows; 110 Bisichi PLC Other Investments Investments of the company in subsidiaries are stated in the balance sheet as fixed assets at cost less provisions for impairment. Other investments comprising of shares in listed companies are classified at fair value through profit and loss. Foreign currencies Monetary assets and liabilities expressed in foreign currencies have been translated at the rates of exchange ruling at the balance sheet date. All exchange differences are taken to the profit and loss account. Financial instruments Details on the Group’s accounting policy for financial instruments can be found on page 76. Deferred taxation Details on the Group’s accounting policy for deferred taxation can be found on page 78. Leased assets and liabilities Details on the Group’s accounting policy for leased assets and liabilities can be found on page 77. Pensions Details on the Group’s accounting policy for pensions can be found on page 76. Share based remuneration Details on the Group’s accounting policy for share based remuneration can be found on page 76. Details of the share options in issue are disclosed in the directors’ remuneration report on page 42 under the heading share option schemes which is within the audited part of this report. Financial statements Notes to the financial statements for the year ended 31 December 2023 33. PROFIT & LOSS ACCOUNT A separate profit and loss account for Bisichi PLC has not been presented as permitted by Section 408(2) of the Companies Act 2006. The loss for the financial year, before dividends paid, was £78,000 (2022: profit: £15,415,000) 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 42 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 2023 Additions Cost at 31 December 2023 Accumulated depreciation at 1 January 2023 Charge for the year Accumulated depreciation at 31 December 2023 Net book value at 31 December 2023 Net book value at 31 December 2022 Leasehold Property £’000 Motor Vehicles £’000 Office equipment £’000 45 - 45 - - - 45 45 104 27 131 83 17 100 31 21 44 8 52 12 17 29 23 32 Total £’000 193 35 228 95 34 129 99 98 Leasehold property consists of a single unit with a long leasehold tenant. The term remaining on the lease is 36 years. Included in Motor Vehicles is a right-of-use asset with a net book value of £9,000. 36. INVESTMENTS Net book value at 1 January 2023 Invested during the year Repayment Gain in investments Joint ventures shares £’000 Shares in subsidiaries £’000 Other investments £’000 665 6,356 12,590 - - - - - - 1,189 (377) 856 Total £’000 18,946 1,189 (377) 856 Net book value at 31 December 2023 665 6,356 14,258 20,614 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 £14,258,000 (2022: £12,590,000) shares in listed companies. Bisichi PLC 111111 Financial statements Notes to the financial statements for the year ended 31 December 2023 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 2023 £’000 2022 £’000 1,664 188 1,844 124 3,820 1,280 1,280 1,079 237 1,379 59 2,754 1,159 1,159 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 2023 £’000 2022 £’000 63 33 76 104 9 497 782 - 15 120 64 71 11 2,233 2,514 9 Lease liabilities comprise of leases on Motor vehicles with remaining leases of less than 1 year. 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 for the year ended 31 December 2023 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 2023 Black Wattle Colliery (Pty) Ltd (note (a)) Ninghi Marketing Limited (note (b)) As at 31 December 2022 At 31 December Amounts owed by related party £’000 During the year Costs recharged / accrued (to)/ by related party £’000 Cash paid (to)/ by related party £’000 (995) (102) (1,097) (145) (102) (247) (850) - (850) (972) - (972) - - - 1,464 - 1,464 (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 (2022: 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 2023 £’000 2022 £’000 5 5 1,350 326 125 - 1,801 3,264 580 21 2,220 6,085 Bisichi PLC 113113 www.bisichi.co.uk Bisichi PLC 2nd floor, 12 Little Portland Street, London W1W 8BJ email: admin@bisichi.co.uk