BISICHI PLC

Annual Report (ESEF) • Apr 28, 2022

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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. 2 Bisichi PLC Strategic Report As we reflect back on the last two years, the most challenging priority for your Company was the continuity of our South African mining and processing operations, particularly during the peak of the Covid-19 pandemic. In early 2020, when global coal demand fell, the average weekly price of Free on Board (FOB) coal from Richards Bay Coal Terminal (API4 price) fell from a high of US$92 in January 2020 to $44 in mid-April 2020. Thereafter, prices remained largely supressed until the end of the year. Under these very difficult circumstances, your management worked tirelessly, along with our key stakeholders, to ensure that our South African operations continued operating in an efficient manner until global economic activity and our markets improved. As 2021 unfolded, an improvement in global economic activity had a significant impact on demand for coal in the international market, alleviating many of the challenges our South African operations faced in 2020. Strong demand for coal in the seaborne market resulted in significantly higher API4 prices, particularly in the second half of the year when the price peaked at over $245 in October. Overall, the API4 price averaged $125 in 2021 compared to $65 in 2020. Despite constraints in transporting coal for export on the South African rail network, constraints which were largely beyond our control, at Sisonke Coal Processing (our South African coal processing operation), we were able to take advantage of the improved international coal price by increasing our export sales during the year to 320,000 metric tonnes (2020: 230,000 metric tonnes). The overall increase in Group revenue, operating costs and earnings during the year is mainly attributable to our coal processing operations. The overall performance of our South African operations would have been even better if we had not encountered some difficult mining conditions at Black Wattle, our South African mining operation, which impacted adversely our coal production during the period. Overall, the mine achieved production of 1.04million metric tonnes compared to 1.18million metric tonnes in 2020. During the year we continued to work closely with Vunani Mining, our BEE partner in Black Wattle, to seek further opportunities to extend the life of mine at Black Wattle. At the end of last year, Black Wattle signed an agreement to acquire an additional coal reserve contiguous to Black Wattle which required further drilling to ascertain its commercial viability and indicative size. We are very pleased to report that the recently concluded geological assessment indicates an expected run of mine tonnage of 6.1million metric tonnes. This reserve will be mined by opencast methods, the coal will be processed at Sisonke Coal Processing, and then sold into our existing markets. This new reserve, which is subject to regulatory approval, will extend Black Wattle’s life of mine to eight years. Vunani Mining played a key role in acquiring these reserves, and will share equally in any distributable income as part of their non-controlling interest in Black Wattle. Further details of this acquisition can be found in our Mining and Financial and Performance Reviews. Looking forward, we expect the Group’s mining production to improve further once we complete our transition into new mining areas at Black Wattle in the first half of 2022. In addition, we have seen coal market conditions continue to improve in 2022 to date. In the first quarter of this year, the weekly API4 price averaged $238 and exports from our South African operations in the first quarter of 2022 have been in line with the average export tonnages we achieved in 2021. However, looking beyond the first Chairman’s Statement In the wake of the challenges arising from the Covid-19 pandemic, I am pleased to report to shareholders that for the year ended 31 December 2021, your company made a profit before interest, tax, depreciation and amortisation (EBITDA) of £5.8million (2020: loss: £2.4 million) and an operating profit before depreciation, fair value adjustments and exchange movements (Adjusted EBITDA) of £5.0million (2020: loss: £1.1million). £4.3million in adjusted EBITDA is attributable to the second half of the year. Strategic Report 33 33Bisichi PLC Strategic Report quarter, uncertainties remain, particularly with regard to the international coal price and the impact of constraints in transporting coal for export on the South African rail network. In the UK, despite the Covid-19 pandemic, we have seen rental revenue from our retail property portfolio remain stable in 2021. Overall, the Group billed revenue from our directly owned property portfolio of £1.12million (2020: £1.18million) during the year. The Group continues to hold its joint venture investment, with London & Associated Properties PLC and Metroprop Real Estate Ltd, in the freehold of a retail and residential redevelopment in West Ealing, London. As previously announced, planning permission for an expanded residential redevelopment of 56 flats on the site has been received. Planning approval documents for the planning consent are currently being finalised and we look forward to updating shareholders further on the situation in due course. Finally, in light of the strong results achieved for the year and in 2022 to date, your directors believe the company has the financial strength to recommence distribution of dividends to shareholders. For the year ended 31 December 2021 the directors recommend a dividend of 4p (2020: Nil) per share and a special dividend of 2p (2020: Nil) per share. The dividends will be payable on Friday 29 July 2022 to shareholders registered at the close of business on 8 July 2022. On behalf of the Board and shareholders, I would like to thank all of our staff for their hard work and dedication during the course of a difficult year. Sir Michael Heller Chairman 13 April 2022 4 Bisichi PLC Strategic Report Principal activity, strategy & business model The company carries on business as a mining company and its principal activity is coal mining in South Africa. The company’s strategy is to create and deliver long term sustainable value to all our stakeholders through our business model which can be broken down into three key areas: 1 2 3 Acquisition & investment Production & sustainability Processing & marketing The Group actively seeks new opportunities to extend the life of its existing mining and processing operations in South Africa. The Group aims to achieve this through new commercial arrangements and the acquisition of additional coal reserves nearby to our existing mining operations. In addition, we seek to balance the high risk of our mining operations with a dependable cash flow from our UK property investment operations and listed equity investment portfolios. The company primarily invests in retail property across the UK as well as residential property development. The UK Retail property portfolio is managed by London & Associated Properties PLC whose responsibility is to actively manage the portfolio to improve rental income and thus enhance the value of the portfolio over time. The Group strives to mine its South African coal reserves in an economical and sustainable manner that delivers long term value to all our stakeholders. 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. 55Bisichi PLC Strategic Report Mining review We are pleased to report that, after a challenging 2020, higher prices for our coal have accelerated the recovery of our South African operations in 2021. Although we continued to manage the health and safety impact of the Covid-19 pandemic on the Group’s mining and processing operations in South Africa, business conditions significantly improved in 2021. Looking forward into 2022, to date we have continued to see higher coal prices contributing strongly to the performance of our South African operations. Covid-19 update The Group continues to consult with the government authorities and its stakeholders in South Africa to ensure appropriate measures are taken across its South African mining and processing operations. Such measures have been primarily focussed on the health and safety of our employees. Further details on these measures can be found in our Sustainability report on page 7. Production and operations Difficult mining conditions at Black Wattle, our South African mining operation, impacted production in 2021. Overall, the mine achieved production of 1.04 million metric tonnes compared to 1.18 million metric tonnes in 2020. Looking forward, the mine will be transitioning into new coal reserves over the first half of 2022 where mining conditions and production capacity is expected to improve in comparison to the reserves mined in 2021. Although mining production may be impacted in the first half of 2022, mining production is expected to improve once this transition to the new reserves is complete. Overall, we expect the Group’s mining production in 2022 to remain at similar levels to 2021. As noted in the Chairman’s statement, we are very pleased to report the acquisition of 6.1 million metric tonnes of coal reserves contiguous to Black Wattle. The new reserve, which is currently subject to regulatory approval, will extend the life of mine of Black Wattle to eight years. The acquisition was negotiated in conjunction with a re-negotiation of 2.1million metric tonnes of separate coal reserves previously acquired from the same seller, as announced in our 2018 annual report. In addition to a nominal financial consideration, an option for offtake of processed coal from both reserves has been entered into with the seller. We would like to thank Vunani Mining, our Black Economic Empowered shareholders at Black Wattle, for their significant contribution in acquiring these reserves. In light of their integral involvement, it has been agreed that Vunani Mining will share equally in any distributable income from the coal reserves as part of their non-controlling interest in Black Wattle. This has been achieved through the issue of new shares in Black Wattle. Further details on the share issue can be found in the Financial and Performance Review on page 16. Main trends/markets Improvement in global economic activity had a significant impact on demand and prices achievable for our coal in 2021. In the international market the average weekly price of Free On Board (FOB) Coal from Richard Bay Coal Terminal (API4 price) averaged $125 in 2021 compared to $65 in 2020 when coal prices and economic activity remained largely supressed due to the Covid-19 pandemic. The higher prices, along with a stable US Dollar compared to the South African Rand, resulted in the Group achieving an overall average Rand price of R1,129 per tonne of export coal sold from the mine in 2021 compared to R547 in 2020. The Group’s export sales are via Richards Bay Coal Terminal, primarily under the Quattro programme which allows junior black- economic empowerment coal producers direct access to the coal export market via the terminal. Although our export volumes to Richards Bay were limited by industry constraints in transporting coal for export on the South African rail network, overall exports volumes from our South African operations increased during the year to 320,000 metric tonnes compared to 230,000 metric tonnes in 2020. 6 Bisichi PLC Strategic Report Principal activity, strategy & business model These export constraints, arising from the problems of the rail network, contributed to a stable supply of coal to the South African domestic market in 2021. As a result, domestic coal prices in 2021 remained largely unchanged by comparison with the 2020 prices; the Group achieved an average domestic price of R470 per tonne coal sold compared to R450 in 2020. Overall, domestic sales volumes from our South African operations increased during the year to 1.13million metric tonnes (2020: 0.97million metric tonnes). Overall, the Group achieved an average Rand price per tonne of coal sold of R616 compared to R469 in 2020. In addition to the higher coal prices, higher overall sales volumes and a reduction in stocks contributed to the increase in Sterling Group revenue during the year. Looking forward into 2022, in the first quarter we have seen the API4 price average $238 and exports from our South African operations to date have been in line with the average export tonnages we achieved in 2021. However, looking beyond the first quarter, uncertainties remain. These are particularly with regard to the sustainability of the higher international coal price as well as the impact of continued constraints in transporting coal for export on the South African rail network. Sustainable development The Group’s South African operations continue to strive to conduct business in a safe, environmentally and socially responsible manner. Some highlights of our Health, Safety and Environment performance in 2021: • • The Group’s South African operations recorded two Lost time Injuries during 2021 (2020: One). • • No cases of Occupational Diseases were recorded. • • Zero claims for the Compensation for Occupational Diseases were submitted. In South Africa, the new government regulated Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2020 (New Mining Charter) came into force from March 2020. The New Mining Charter is a regulatory instrument that facilitates sustainable transformation, growth and development of the mining industry. The Group is committed to fully complying with the New Mining Charter and providing adequate resources to this area in order to ensure opportunities are expanded for historically disadvantaged South Africans (HDSAs) to enter the mining and minerals industry. In addition, we continue to adhere and make progress in terms of our Social and Labour Plan and our various BEE initiatives. A fuller explanation of these can be found in our Sustainable Development Report on page 7. Prospects Management would like to thank all our employees and stakeholders in helping overcome many of the unprecedented challenges presented by the Covid-19 pandemic over the last two years. Going forward, I am confident that 2022 should be another successful year for our South African operations. Andrew Heller Managing Director 13 April 2022 77Bisichi PLC Strategic Report Social, community and humanrights issues The Group believes that it is in the shareholders’ interests to consider social and human rights issues when conducting business activities both in the UK and South Africa. Various policies and initiatives implemented by the Group that fall within these areas are discussed within this report. Health, Safety & Environment (HSE) The Group is committed to creating a safe and healthy working environment for its employees and the health and safety of our employees is of the utmost importance. HSE performance in 2021: • • No cases of Occupational Diseases were recorded. • • Zero claims for the Compensation for Occupational Diseases were submitted. • • No machines operating at Black Wattle exceeded the regulatory noise level. • • The Group’s South African operations recorded two Lost time Injuries during 2021. In addition to the required personnel appointments and assignment of direct health and safety responsibilities on the mine, a system of Hazard Identification and Risk Assessments has been designed, implemented and maintained at Black Wattle and at Sisonke Coal Processing. Health and Safety training is conducted on an ongoing basis. We are pleased to report all relevant employees to date have received training in hazard identification and risk assessment in their work areas. A medical surveillance system is also in place which provides management with information used in determining measures to eliminate, control and minimise employee health risks and hazards and all Occupational Health hazards are monitored on an ongoing basis. Various systems to enhance the current HSE strategy have been introduced as follows: • • In order to improve hazard identification before the commencing of tasks, mini risk assessment booklets have been distributed to all mine employees and long term contractors on the mine. • • Dover testing is conducted for all operators. Dover testing is a risk detection and accident reduction tool which identifies employees’ problematic areas in their fundamental skills in order to receive appropriate training. • • A Job Safety Analysis form is utilised to ensure effective identification of hazards in the workplace. • • In order to capture and record investigation findings from incidents, an incident recording sheet is utilised by line management and contractors. • • Black Wattle Colliery utilises ICAM (Incident Cause Analysis Method). • • On-going training on first aid is being conducted with all employees involved with this discipline. Covid-19 measures in 2021: The Group continues to monitor and adhere to all of the South African government’s Covid-19 related guidelines and regulations including all updates and advice from the National Department of Health, the Department of Minerals Resources and Energy and the Office of the President. These measures include: • • Regular communications with employees on all guidelines, government restrictions and best practice hygiene and health recommendations; • • Conducting various issue-based hazard identification and risk assessments; • • Temperature screening of those entering certain of our offices and sites; • • Working from home (in both the UK and South Africa), where possible or required; • • Social distancing measures at operating sites; • • Restrictions on non-essential visits to operating sites; and • • Intensified cleaning and hygiene at offices and sites. 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. 8 Bisichi PLC In particular the Group has endeavoured to follow the guidelines of the 10-point plan developed by the Department of Minerals Resources and Energy in line with the guidelines of the Department of Health and the National Institute of Communicable Diseases (NICD) as follows: • • Educate employees on the virus, symptoms and prevention. • • Follow guidelines from the NICD, educate health workers on how to manage Covid-19. Consider alternate arrangements for supply of chronic medication to reduce crowds. • • Ensure that all health workers have access to protective clothing, gloves, masks, cleaning materials and pharmaceutical agents. • • Vaccinate employees for seasonal influenza. • • All employees are encouraged to know their status, get onto ARVs if positive for HIV. • • Manage suspected cases or contacts of cases using guidelines from the NICD. • • Liaise with the NICD on procedure to be followed for suspected and confirmed cases. • • Only essential travel to areas with Covid-19 should be undertaken. • • All suspected and confirmed cases in the mining industry should be reported to the NICD. • • Monitor and stay aware of the latest information on the Covid-19 pandemic. Black Wattle Colliery Social and Labour Plan (SLP) and Community Projects Black Wattle Colliery is committed to true transformation and empowerment as well as poverty eradication within the surrounding and labour providing communities. Black Wattle is committed to providing opportunities for the sustainable socio- economic development of its stakeholders, such as: • • Employees and their families, through Skills Development, Education Development, Human Resource Development, Empowerment and Progression Programmes. • • Surrounding and labour sending communities, through Local Economic Development, Rural and Community Development, Enterprise Development and Procurement Programmes. • • Empowering partners, through Broad- Based Black Economic Empowerment (BBBEE) and Joint Ventures with Historically Disadvantaged South African (HDSA) new mining entrants and enterprises. • • The company engages in on going consultation with its stakeholders to develop strong company-employee relationships, strong company- community relationships and strong company-HDSA enterprise relationships. The key focus areas in terms of the detailed SLP programmes were updated as follows: • • Implementation of new action plans, projects, targets and budgets were established through regular workshops with all stakeholders. • • A comprehensive desktop socio- economic assessment was undertaken on baseline data of the Steve Tshwete Local Municipality (STLM) and Nkangala District Municipality (NDM). • • The STLM is still in the process of finalising its 2022-2027 Local Economic Development (LED) Plan. Once finalised, Black Wattle Colliery will select projects from the 2022-2027 STLM LED plan for the inclusion in its 2022-2027 SLP. The Black Wattle Colliery SLP will thereafter be submitted to the department of Mineral Resources and Energy for approval. • • The building of the new school hall at the Phumelele Secondary School in the Rockdale Township will be completed during the second quarter of 2022. • • Various upgrades were initiated at the Evergreen School nearby to Black Wattle. Black Wattle has implemented various community initiatives including: • • A community training environmental project, where local community members are trained to safely cut and remove non-indigenous vegetation, the making, bagging and sales of charcoal. • • Certain community members have been identified for training in areas regarding mining and beneficiation. These areas include but are not limited to conveyor maintenance, operation of mining machinery and training in environmental waste management. • • An interlocking block manufacturing operation will be started during 2022, making interlocking blocks for building homes • • Two HDSA females completed their University studies in the 2021 academic year. • • Two local community HDSA members were enrolled for the new academic year. Strategic Report Sustainable development 99Bisichi PLC Strategic Report Sustainable development Environment & Environment Management Programme South Africa Under the terms of the mine’s Environmental Management Programme approved by the Department of Mineral Resource and Energy (“DMRE”), Black Wattle undertakes a host of environmental protection activities to ensure that the approved Environmental Management Plan is fully implemented. In addition to these routine activities, Black Wattle regularly carries out environmental monitoring activities on and around the mine, including evaluation of ground water quality, air quality, noise and lighting levels, ground vibrations, air blast monitoring, and assessment of visual impacts. In addition to this Black Wattle also performs quarterly monitoring of all boreholes around the mine to ensure that no contaminated water filters through to the surrounding communities. Black Wattle is fully compliant with the regulatory requirements of the Department of Water Affairs and Forestry and has an approved water use licence. Black Wattle Colliery has substantially improved its water management by erecting and upgrading all its pollution control dams in consultation with the Department of Water Affairs and Forestry. A performance assessment audit was conducted to verify compliance to our Environmental Management Programme and no significant deviations were found. United Kingdom The Group’s UK activities are principally retail property investment as well as residential property development whereby we provide or develop premises which are rented to retail businesses or sold on to end users. We seek to provide tenants and users in both these areas with good quality premises from which they can operate or reside in an environmentally sound manner. Procurement In compliance with the Mining Charter and the Mineral and Petroleum Resource Development Act, the Group’s South African operations has implemented a BBBEE-focussed procurement policy which strongly encourages our suppliers to establish and maintain BBBEE credentials. At present, BBBEE companies provide approximately 90 percent of Black Wattle’s equipment and services. Mining Charter In South Africa, the new government regulated Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2020 (New Mining Charter) came into force from March 2020. The New Mining Charter is a regulatory instrument that facilitates sustainable transformation, growth and development of the mining industry. The Group’s mining operation is expected to reach various levels of compliance to the New Mining Charter over a period of five years from March 2020. The Group is committed to providing adequate resources to this area in order to ensure full compliance to the New Mining Charter is achieved over the transitional period. As part of Black Wattle’s commitment to the New Mining Charter, the company seeks to: • • Expand opportunities for historically disadvantaged South Africans (HDSAs), including women and youth, to enter the mining and minerals industry and benefit from the extraction and processing of the country’s resources; • • Utilise the existing skills base for the empowerment of HDSAs; and • • Expand the skills base of HDSAs in order to serve the community. Employment The Group’s South African operations are committed to achieving the goals of the South African Employment Equity Act and is pleased to report the following: • • Black Wattle Colliery has exceeded the 10 percent women in management and core mining target. • • Black Wattle Colliery has achieved over 15 percent women in core mining. • • 94 percent of the women at Black Wattle Colliery are HDSA females. Black Wattle Colliery has successfully submitted their annual Employment Equity Report to the Department of Labour. In terms of staff training some highlights for 2021 were: • • 12 employees were trained in ABET (Adult Basic Educational Training) on various levels; • • An additional 9 disabled HDSA women continued their training on ABET levels one to four. • • We are pleased to confirm that 1 HDSA male completed his apprenticeships in 2021. • • Further to the above we confirm that 1 HDSA female was allocated a Bursary for the 2021 period whilst 2 HDSA males and 2 HDSA females continued their Bursaries. Highlights for 2021 for Sisonke Coal Processing: • • 5 employees were trained in ABET (Adult Basic Educational Training) on various levels 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. In terms of directors, employees and gender representation, at the year end the Group had 9 directors (8 male, 1 female), 6 senior managers (5 male, 1 female) and 229 employees (160 male, 69 female). Anti-slavery and human trafficking The Group is committed to the prevention of the use of forced labour and has a zero tolerance policy for human trafficking and slavery. The Group’s policies and initiatives in this area can be found within the Group’s Anti-slavery and human trafficking statement found on the Group’s website at www.bisichi.co.uk. Green House Gas reporting We have reported on all of the emission sources required under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations. The data detailed in these tables represent emissions and energy use for which the Group is responsible. To calculate our emissions, we have used the main requirements of the Greenhouse Gas Protocol Corporate Standard and a methodology adapted from the Intergovernmental Panel on Climate Change (2019), along with the UK Government GHG Conversion Factors for Company Reporting 2021. Any estimates included in our totals are derived from actual data which have been extrapolated to cover the full reporting periods. Our reporting includes our energy use and emissions associated with our UK office, which are minimal (2 tonnes of CO 2 e). The IPCC methodology Tier 1 (+2) Methodology (2006 with 2019 edits) - Low, Average, and High CH 4 Emission Factors – Medium Scenario) was used to calculate emissions from surface coal mining activities. The Group has not implemented any energy efficiency programs or specific measures during the 2021 year. The group’s carbon footprint: 2021 CO 2 e Tonnes 2020 CO 2 e Tonnes Emissions source: Emissions from the combustion of fuel or the operation of any facility including fugitive emis-sions from refrigerants use 41,960 46,162 Emissions resulting from the purchase of electricity, heat, steam or cooling by the company for its own use (location based) 12,040 12,482 Total gross emissions 54,000 58,644 Intensity: Tonnes of CO 2 per £ sterling of revenue 0.0011 0.0020 Tonnes of CO 2 per tonne of coal produced 0.0516 0.0497 kWh kWh Energy consumption used to calculate above emissions 83,079,614 99,450,585 Of which UK 10,186 5,571 1111Bisichi PLC Strategic Report Principal risks & uncertainties PRINCIPAL RISK PERFORMANCE AND MANAGEMENT OF THE RISK COAL PRICE AND VOLUME RISK COVID-19 RISK The Group is exposed to coal price risk as its future revenues will be derived based on contracts or agreements with physical off-take partners at prices that will be determined by reference to market prices of coal at delivery date. The Group’s South African mining and coal processing operational earnings are significantly dependent on movements in both the export and domestic coal price. The price of export sales is derived from a US Dollar- denominated export coal price and therefore the price achievable in South African Rands can be influenced by movements in exchange rates and overall global demand and supply. The volume of export sales achievable can be influenced by rail capacity and export quota constraints at Richards Bay Coal Terminal under the Quattro programme. The domestic market coal prices are denominated in South African Rand and are primarily dependant on local demand and supply. In the short term, the Covid-19 pandemic and geo-political events in Ukraine may result in additional price volatility in both the export and domestic market due to fluctuations in both demand and supply. Longer term both the demand and supply of coal in the domestic and global market may be negatively impacted by regulatory changes related to climate change and governmental CO 2 emission commitments. The Group primarily focuses on managing its underlying production and processing costs to mitigate coal price volatility as well as from time to time entering into forward sales contracts with the goal of preserving future revenue streams. The Group has not entered into any such contracts in 2020 and 2021. The Group’s export and domestic sales are determined based on the ability to deliver the quality of coal required by each market together with the market factors set out opposite. Volumes of export sales achieved during the year were primarily dependent on the Group’s ability to produce the higher quality of coal required for export, obtaining adequate rail capacity and utilising allowable export quotas under the Quattro programme. The volume of domestic market sales achieved during the year were primarily dependant on local demand and supply as well as the Group’s ability to produce the overall quality of coal required. The Group continues to assess on an ongoing basis its dependence on the above factors and evaluate alternative means to ensure coal sales and prices achieved are optimised. The Group assesses on an ongoing basis the impact that Covid-19, geo-political events in Ukraine, regulatory changes related to climate change and governmental CO 2 emission commitments may have on the Group’s mining operations and future investment decisions. 12 Bisichi PLC PRINCIPAL RISK PERFORMANCE AND MANAGEMENT OF THE RISK MINING RISK As with many mining operations, the reserve that is mined has the risk of not having the qualities and accessibility expected from geological and environmental analysis. This can have a negative impact on revenue and earnings as the quality and quantity of coal mined and sold by our mining operations may be lower than expected. 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. CURRENCY RISK The Group’s operations are sensitive to currency movements, especially those between the South African Rand, US Dollar and British Pound. These movements can have a negative impact on the Group’s mining operations revenue as noted above, as well as operational earnings. The Group is exposed to currency risk in regard to the Sterling value of inter-company trading balances with its South African operations. It arises as a result of the retranslation of Rand denominated inter-company trade receivable balances into Sterling that are held within the UK and which are payable by South African Rand functional currency subsidiaries. The Group is exposed to currency risk in regard to the retranslation of the Group’s South African functional currency net assets to the Sterling reporting functional currency of the Group. A weakening of the South African Rand against Sterling can have a negative impact on the financial position and net asset values reported by the Group. Export sales within the Group’s South African operations are derived from a US Dollar-denominated export coal price. A weakening of the US Dollar can have a negative impact on the South African Rand prices achievable for coal sold by the Group’s South African mining operations. This in turn can have a negative impact on the Group’s mining operations revenue as well as operational earnings as the Group’s mining operating costs are Rand denominated. In order to mitigate this, the Group may enter into forward sales contracts in local currencies with the goal of preserving future revenue streams. The Group has not entered into any such contracts in 2021 and 2020. Although it is not the Group’s policy to obtain forward contracts to mitigate foreign exchange risk on inter-company trading balances or on the retranslation of the Group’s South African functional currency net assets, management regularly review the requirement to do so in light of any increased risk of future volatility. Refer to the ‘Financial Review’ for details of significant currency movement impacts in the year. Strategic Report Principal risks & uncertainties 1313Bisichi PLC PRINCIPAL RISK PERFORMANCE AND MANAGEMENT OF THE RISK NEW RESERVES AND MINING PERMISSIONS The life of the mine, acquisition of additional reserves, permissions to mine (including ongoing and once-off permissions) and new mining opportunities in South Africa generally are contingent on a number of factors outside of the Group’s control such as approval by the Department of Mineral Resources and Energy, the Department of Water Affairs and Forestry and other regulatory or state owned entities. In addition, the Group’s South African operations are subject to the government Mining Charter with the New Mining Charter coming into force from March 2020. Failure to meet existing targets or further regulatory changes to the Mining Charter, could adversely affect the mine’s ability to retain its mining rights in South Africa. The work performed in the acquisition and renewal of mining permits as well as the maintenance of compliance with permits includes factors such as environmental management, health and safety, labour laws and Black Empowerment legislation (such as the New Mining Charter); as failure to maintain appropriate controls and compliance may in turn result in the withdrawal of the necessary permissions to mine. The management of these regulatory risks and performance in the year is noted in the Mining Review on page 5 as well as in the Sustainable Development report on page 7 and in this section under the headings environmental risk, health & safety risk and labour risk. Additionally, in order to mitigate this risk, the Group strives to provide adequate resources to this area including the employment of adequate personnel and the utilisation of third party consultants competent in regulatory compliance related to mining rights and mining permissions. The Group also continues to actively seek new opportunities to expand its mining operations in South Africa through the acquisition of additional coal reserves and new commercial arrangements with existing mining right holders. POWER SUPPLY RISK The current utility provider for power supply in South Africa is the government run Eskom. Eskom continues to undergo capacity problems resulting in power cuts and lack of provision of power supply to new projects. Any power cuts or lack of provision of power supply to the Group’s mining operations may disrupt mining production and impact on earnings. The Group’s mining operations have to date not been affected by power cuts. However the Group manages this risk through regular monitoring of Eskom’s performance and ongoing ability to meet power requirements. In addition, the Group continues to assess the ability to utilise diesel generators as an alternative means of securing power in the event of power outages. FLOODING RISK The Group’s mining operations are susceptible to seasonal flooding which could disrupt mining production and impact on earnings. Management monitors water levels on an ongoing basis and various projects have been completed, including the construction of additional dams, to minimise the impact of this risk as far as possible. Strategic Report Principal risks & uncertainties 14 Bisichi PLC PRINCIPAL RISK PERFORMANCE AND MANAGEMENT OF THE RISK ENVIRONMENTAL RISK The Group’s South African mining operations are required to adhere to local environmental regulations. Any failure to adhere to local environmental regulations, could adversely affect the mine’s ability to mine under its mining right in South Africa. 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. HEALTH & SAFETY RISK Attached to mining there are inherent health and safety risks. Any such safety incidents disrupt operations, and can slow or even stop production. In addition, the Group’s South African mining operations are required to adhere to local Health and Safety regulations as well as enhanced health and Safety measures related to Covid-19. 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. LABOUR RISK The Group’s mining operations and coal washing plant facility are labour intensive and unionised. Any labour disputes, strikes or wage negotiations may disrupt production and impact earnings. In order to mitigate this risk, the Group strives to ensure open and transparent dialogue with employees across all levels. In addition, appropriate channels of communication are provided to all employment unions at Black Wattle to ensure effective and early engagement on employment matters, in particular wage negotiations and disputes. Refer to the ‘Employment’ section on page 9 for further details. Strategic Report Principal risks & uncertainties 1515Bisichi PLC PRINCIPAL RISK PERFORMANCE AND MANAGEMENT OF THE RISK CASHFLOW RISK Commodity price risk, currency volatility and the uncertainties inherent in mining may result in favourable or unfavourable cashflows. In order to mitigate this, we seek to balance the high risk of our mining operations with a dependable cash flow from our UK property investment operations which are actively managed by London & Associated Properties PLC and our equity investment portfolio. Due to the long term nature of the leases, the effect on cash flows from property investment activities are expected to remain stable as long as tenants remain in operation. Refer to Financial and Performance review on page 20 for details of the property and investment portfolio performance. PROPERTY VALUATION RISK Fluctuations in property values, which are reflected in the Consolidated Income Statement and Balance Sheet, are dependent on an annual valuation of the Group’s commercial and residential development properties. A fall in UK commercial and residential property can have a marked effect on the profitability and the net asset value of the Group as well as impact on covenants and other loan agreement obligations. The economic performance of the United Kingdom, including the potential final impact of the United Kingdom leaving the European Union (“Brexit”), the final impact of Covid-19 pandemic, an impact from geo-political events in Ukraine as well as the current overall economic performance and trends of the UK retail market, may impact the level of rental income, yields and associated property valuations of the Group’s UK property assets including its investments in Joint Ventures. 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 Brexit, the Covid-19 pandemic, geo-political events in Ukraine and the current economic performance of the UK retail market on the future performance of the Group’s existing UK portfolio. In addition, the Group assesses on an ongoing basis the performance of the UK retail market on the Group’s banking covenants, loan obligations and future investment decisions. Refer to page 20 for details of the property portfolio performance. COVID-19 RISK The Group is continually assessing and managing any potential further risks brought about by the Covid-19 pandemic. Overall, the Group is primarily exposed to impacts on the health and safety of its employees and stakeholders. In the UK, uncertainties remain on the final impact on retail property revenue and values from the Covid-19 pandemic as outlined under property valuation risk above. In South Africa, the Group may be impacted by additional health and safety measures related to its workforce and coal price risk as outlined under the same heading above. Risks faced by the business are assessed by the Board on an ongoing basis. Strategies for mitigating the risks have been defined and specific measures for achieving these have already been implemented. These include the measures outlined in the Sustainability development section of this report. The final impact of the Covid-19 pandemic remains uncertain and the Group will adapt plans accordingly as any new information becomes available or government advice changes. Strategic Report Principal risks & uncertainties 16 Bisichi PLC Strategic Report EBITDA, adjusted EBITDA and mining production are used as key performance indicators for the Group and its mining activities as the Group has a strategic focus on the long term development of its existing mining reserves and the acquisition of additional mining reserves in order to realise shareholder value. Mining production can be defined as the coal quantity in metric tonnes extracted from our reserves during the period and held by the mine before any processing through the washing plant. Whilst profit/(loss) before tax is considered as one of the key overall performance indicators of the Group, the profitability of the Group and the Group’s mining activities can be impacted by the volatile and capital intensive nature of the mining sector. Accordingly, EBITDA and adjusted EBITDA are primarily used as key performance indicators as they are indicative of the value associated with the Group’s mining assets expected to be realised over the long term life of the Group’s mining reserves. In addition, for the Group’s property investment operations, the net property valuation and net property revenue are utilised as key performance indicators as the Group’s substantial property portfolio reduces the risk profile for shareholders by providing stable cash generative UK assets and access to capital appreciation. Certain key performance indicators below are not Generally Accepted Accounting Practice measures and are not intended as a substitute for those measures, and may or may not be the same as those used by other companies. Key performance indicators The key performance indicators for the group are: 2021 £’000 2020 £’000 For the group: Operating profit /(loss) before depreciation, fair value adjustments and exchange movements (adjusted EBITDA) 5,028 (1,111) EBITDA 5,849 (2,387) Profit/(Loss) before tax 2,501 (5,196) For our property investment operations: Net property valuation 10,525 10,270 Net property revenue 1,119 1,181 For our mining activities: Operating profit/(loss) before depreciation, fair value adjustments and exchange movements (adjusted EBITDA) 4,266 (1,821) EBITDA 4,145 (1,782) Tonnes ’000 Tonnes ’000 Mining production 1,046 1,180 Quantity of coal sold 1,447 1,199 Financial & performance review The movement in the Group’s Adjusted EBITDA from a loss of £1.1million in 2020 to a profit of £5.0million in 2021 can mainly be attributed to higher prices achievable for our coal and higher coal sale volumes from the Group’s South African operations in the second half of the year. This offset the higher operating costs achieved in 2021. 1717Bisichi PLC The key performance indicators of the group can be reconciled as follows: Mining £’000 Property £’000 Other £’000 2021 £’000 Revenue 49,226 1,119 175 50,520 Transport and loading cost (5,569) - - (5,569) Mining and washing costs (32,438) - - (32,438) Other operating costs excluding depreciation (6,953) (527) (5) (7,485) Operating profit before depreciation, fair value adjustments and exchange movements (adjusted EBITDA) 4,266 592 170 5,028 Exchange movements (121) - - (121) Fair value adjustments - 255 - 255 Gains on investments held at fair value through profit and loss (FVPL) - - 812 812 Operating profit excluding depreciation 4,145 847 982 5,974 Share of loss in joint venture - (125) - (125) EBITDA 4,145 722 982 5,849 Net interest movement (777) Depreciation (2,571) Profit before tax 2,501 The key performance indicators of the Group can be reconciled as follows: Mining £’000 Property £’000 Other £’000 2020 £’000 Revenue 28,567 1,181 57 29,805 Transport and loading cost (1,906) - - (1,906) Mining and washing costs (22,739) - - (22,739) Other operating costs excluding depreciation (5,743) (523) (5) (6,271) Operating (loss)/profit before depreciation, fair value adjustments and exchange movements (adjusted EBITDA) (1,821) 658 52 (1,111) Exchange movements 39 - - 39 Fair value adjustments - (1,295) - (1,295) Gains on investments held at fair value through profit and loss (FVPL) - - 67 67 Operating (loss)/profit excluding depreciation (1,782) (637) 119 (2,300) Share of loss in joint venture - (87) - (87) EBITDA (1,782) (724) 119 (2,387) Net interest movement (616) Depreciation (2,193) Loss before tax (5,196) Strategic Report Financial & performance review 18 Bisichi PLC Adjusted EBITDA is used as a key indicator of the operating trading performance of the Group and its operating segments representing operating profit before the impact of depreciation, fair value adjustments, gains/(losses) on disposal of other investments and foreign exchange movements. The Group’s operating segments include its South African mining operations and UK property. The performance of these two operating segments are discussed in more detail below. The Group achieved an EBITDA for the year of £5.8million (2020: loss £2.4million). The movement compared to the prior year can mainly be attributed to the operating profit before depreciation from our mining activities of £4.3million (2020: loss £1.8million). The Group’s fair value gains, related to our UK property were £0.3million (2020: loss £1.3million) and those related to investments held at fair value through profit and loss were £0.8million (2020: £0.1million). Overall, the Group reported an overall profit before tax of £2.5million (2020: loss £5.2 million). Taxation for the year increased to £0.8million (2020: gain of £1.4million). This resulted in the Group achieving an overall profit for the year after tax of £1.7million (2020: loss £3.8million), of which £1.5million (2020: loss £3.4million) was attributable to equity holders of the company. South African mining operations South African Rand UK Sterling 2021 R’000 2020 R’000 2021 £’000 2020 £’000 Revenue 1,004,444 602,581 49,223 28,567 Transport and loading costs (113,641) (40,204) (5,569) (1,906) Mining and washing costs (661,929) (479,647) (32,438) (22,739) Operating profit before other operating costs and depreciation 228,874 82,730 11,216 3,922 Other operating costs (excluding depreciation) (6,950) (5,743) Operating profit before depreciation, fair value adjustments and exchange movements (adjusted EBITDA) 4,266 (1,821) Exchange movements (121) 39 EBITDA 4,145 (1,782) 2021 ’000 2020 ’000 Mining production in tonnes 1,046 1,180 2021 R 2020 R Net Revenue per tonne of mining production 852 477 Mining and washing costs per tonne of mining production (633) (406) Operating profit per tonne of mining production before other operating costs and depreciation 219 71 Net Revenue per tonne of mining production can be defined as the revenue price achieved per metric tonne of mining production less transportation and loading costs. Performance The key performance indicators of the group’s South African mining operationsarepresented in South African Rand and UK Sterling as follows: Strategic Report Financial & performance review 1919Bisichi 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: Domestic ’000 Export ’000 2021 ’000 Domestic ’000 Export ’000 2020 ’000 Quantity of coal sold in tonnes 1,127 320 1,447 969 230 1,199 Domestic R’000 Export R’000 2021 R’000 Domestic R’000 Export R’000 2020 R’000 Revenue 530,905 473,539 1004,444 442,516 160,065 602,581 R R R R R R Net Revenue per tonne of coal sold 470 1,129 616 450 547 469 Mining and washing costs per tonne of coal sold (457) (400) Operating profit per tonne of coal sold before other operating costs and depreciation 158 69 The quantity of coal sold can be defined as the quantity of coal sold in metric tonnes by the Group in any given period. Net Revenue per tonne of coal sold can be defined as the revenue price achieved less transportation and loading costs per metric tonne of coal sold. Total net revenue per tonne of coal sold for the Group’s mining and processing operations increased for the year from R469 per tonne of coal sold in 2020 to R616 in 2021, mainly attributable to the average price increase achieved in the export market. A decrease in mining production during the year, attributable to difficult mining conditions, was offset by an increase in buy-in coal processed and a decrease in coal inventories due to improved coal demand resulting in the quantity of coal sold for the year increasing to 1.447million tonnes (2020: 1.199million tonnes). Overall, the increase in revenue per tonne of coal sold and the higher coal sales volumes, particularly in the export market, resulted in revenue from the Group’s South African mining operations increasing during the year to R1.005billion compared to revenue of R0.603billion in the prior year. Mining and washing costs per tonne of coal sold during the year increased from R400 per tonne in 2020 to R457 per tonne in 2020 due to incremental increases in both mining and washing costs. This resulted in an increase in total mining and washing costs for the Group to R661.9million (2020: R479.6million). Other operating costs (excluding depreciation) of £6.95million (2020: £5.74million) include general administrative costs as well as administrative salaries and wages related to our South African mining operations that are incurred both in South Africa and in the UK. These costs are not significantly impacted by movements in mining production and coal processing. The increase during the year can mainly be attributed to lower administrative salaries and wages costs incurred in 2020 due to the financial performance of the Group in the same period. Overall costs in South Africa were in line with management’s expectations and local inflation. Overall, the movement in the Group’s Adjusted EBITDA from a loss of £1.1million in 2020 to a profit of £5.0million in 2021 can mainly be attributed to higher prices achievable for our coal and increased coal sales from the Group’s South African coal processing operations. This offset the higher mining, washing and operating costs incurred in 2021. A further explanation of the mines operational performance can be found in the Mining Review on page 5. Non-controlling interest Black Wattle As mentioned in the Chairman’s statement and Mining Review, the Group’s subsidiary Black Wattle Colliery (Pty) Ltd signed an agreement to acquire additional coal reserves during the year. The new reserves of 6.1million metric tonnes, will extend the life of mine of Black Wattle to eight years and remains subject to regulatory approval. The acquisition was negotiated in conjunction with a re-negotiation of 2.1million metric tonnes of separate coal reserves previously acquired from the same seller, as previously announced in our 2018 annual report. 20 Bisichi PLC Strategic Report Financial & performance review Vunani Mining (Pty) Ltd our black economic empowered shareholders at Black Wattle, were integral in the success in acquiring both of these reserves. As a result, it was agreed that Vunani Mining will share equally in any distributable economic benefit from the coal reserves as part of their non-controlling interest in Black Wattle. This has been achieved through a new shares issue in Black Wattle that was completed subsequent to year end on 12 April 2022. The total issued share capital in Black Wattle Colliery (Pty) Ltd was increased further from 1000 shares to 1002 shares at par of R1 through the following share issue: •• a subscription of 1 “B” Share at par by Bisichi Mining (Exploration Limited), a 100% subsidiary of the Group; •• a subscription of 1 “B” Share at par by Vunani Mining (Pty) Ltd The “B” shares rank pari passu with the ordinary shares save that they have sole rights to the distributable profits attributable to the above mining reserves held by Black Wattle Colliery (Pty) Ltd. A non-controlling interest is therefore recognised for all profits distributable to the “B” shares held by Vunani Mining (Pty) Ltd from the date of issue of the shares (12 April 2022). Details of Vunani’s non-controlling interest held at year end can be found in the Non-controlling interest note on page 88. UK property investment Performance The Group’s portfolio is managed actively by London & Associated Properties plc. Rental performance was marginally below levels achieved in 2021. Net property revenue (excluding joint ventures and service charge income) across the portfolio decreased during the year to £1.119million (2020: £1.181million). The property portfolio was externally valued at 31 December 2021 and the value of UK investment properties attributable to the Group at year end increased to £10.525million (2020: £10.270million) mainly due to the reduced impact of Covid-19. Joint venture property investments The Group holds a £0.6million (2020: £0.7million) joint venture investment in Dragon Retail Properties Limited, a UK property investment company. The open market value of the company’s share of investment properties included within its joint venture investment in Dragon Retail Properties decreased marginally during the year to £1.040million (2020: £1.065million). The following table summarises the main components of the consolidated cashflow for the year: Year ended 31 December 2021 £’000 Year ended 31 December 2020 £’000 Cash flow generated from operations before working capital and other items 5,028 (1,111) Cash flow from operating activities 4,432 449 Cash flow from investing activities (2,706) (4,292) Cash flow from financing activities (271) (285) Net (decrease) / increase in cash and cash equivalents 1,455 (4,128) Cash and cash equivalents at 1 January (1,078) 2,878 Exchange adjustment 105 172 Cash and cash equivalents at 31 December 482 (1,078) Cash and cash equivalents at 31 December comprise: Cash and cash equivalents as presented in the balance sheet 3,018 3,768 Bank overdrafts (secured) (2,536) (4,846) 482 (1,078) 2121Bisichi PLC Strategic Report Financial & performance review The Group continues to hold a £0.5million (2020: £0.6million) 50% joint venture investment in West Ealing Projects Limited, a UK unlisted property development company. West Ealing Projects Limited’s only asset is a property development in West Ealing, London. The carrying value of the Group’s share of the trading property inventory included within this development is valued at £3.7million (2020: £3.5million). The joint venture has obtained planning consent for a residential development of 56 flats. We look forward to updating shareholders further in due course. During the year the Group acquired a one third joint venture investment holding in Development Physics Limited, a UK unlisted property development company. The remaining two thirds is held equally by London & Associated Properties PLC and Metroprop Real Estate Ltd. The company was set up with the purpose of delivering a residential development of 44 flats and 4 town houses in Purley, London. Development Physics acquired a series of options on the site and has registered for planning permission for its development. At year end, the negative carrying value of the investment held by the Group was £3,000 (2020: £Nil). We look forward to updating shareholders further in due course. Overall, the Group achieved net property revenue of £1.2million (2020: £1.3million) for the year which includes the company’s share of net property revenue from its investment in joint ventures of £88,000 (2020: £71,000). Other Investments During the year the Group’s non-current investments held at fair value through profit and loss increased from £1.7million in 2020 to £3.6million due to net additions during the year of £1.2million (2020: £1.3million) and gains from investments of £0.7million (2020: £0.2million). The investments comprise of £1.56million (2020: £0.96million) investments listed on stock exchanges in the United Kingdom and £2.07million (2020: £0.79million) of investments listed on overseas stock exchanges. Cashflow & financial position Cash flow generated from operating activities increased compared to the prior year to £4.4million (2020: £0.4million). This can mainly be attributed to the operating profit during the year of £3.4million (2020: loss £4.5million) and a positive cash movement attributable to a decrease in stocks of £2.1million (2020: cash decrease of £1.1million). This offset an increase in trade receivables of £1.9million (2020: decrease £0.1million). All of the above can mainly be attributed to the improved coal sales and revenue per tonne achieved during the year. Investing cashflows primarily reflect the net effect of capital expenditure during the year of £1.8million (2020: £3.2million) which can mainly be attributable to mine development costs at Black Wattle of £1.6million (2020: £2.5million). As at year end the Group’s mining reserves, plant and equipment had a carrying value of £9.0million (2020: £10.1 million) with capital expenditure being offset by depreciation of £2.5million (2020: £2.2milion) and exchange translation movements of £0.4million (2020: £0.6million) for the year. Other investing cashflows also include the net acquisition of listed investments of £0.9million (2020: £1.1million). Cash outflows from financing activities includes a net decrease in borrowings of £0.3million (2020:£0.2million). In addition, no dividends were paid to shareholders during the year (2020: £0.1million). Overall, the Group’s cash and cash equivalents increased during the year by £1.5million (2020: decrease £4.1million). After taking into account an exchange gain of £0.1million (2020: £0.2million) on the translation of the Group’s year end net balance of cash and cash equivalents that were held in South African Rands, the Group’s net balance of cash and cash equivalents (including bank overdrafts) at year end was £0.5million (2020: negative amount of £1.1million). The Group has considerable financial resources available at short notice including cash and cash equivalents (excluding bank overdrafts) of £3.0million (2020: £3.8 million) and listed investments of £4.3million (2020: £2.6million) as at year end. The above financial resources totalling £7.3million (2020: £6.4million). The net assets of the Group reported as at year end were £17.8million (2020: £16.2million) and total assets at £38.1million (2020: £38.7million). Liabilities decreased from £22.5million to £20.3million during the year primarily due to a decrease in current borrowings from £5.1million to £2.7million. The overall exchange loss recorded through the translation reserve on translation of the Group’s South African net assets at year end decreased to £0.05million (2020: £0.40million) as a result of the lower weakening of the South African Rand against UK sterling year to year. Further details on the Group’s cashflow and financial position are stated in the Consolidated Cashflow Statement on page 59 and the Consolidated Balance Sheet on page 56 and 57. 22 Bisichi PLC Strategic Report Financial & performance review Loans South Africa The Group has a structured trade finance facility with Absa Bank Limited for R85million held by Sisonke Coal Processing (Pty) Limited, a 100% subsidiary of Black Wattle Colliery (Pty) Limited. This facility comprises of an R85million revolving facility to cover the working capital requirements of the Group’s South African operations. The facility is renewable annually at 25 January and is secured against inventory, debtors and cash that are held in the Group’s South African operations. United Kingdom The Group holds a 5 year term facility of £3.9m with Julian Hodge Bank Limited at an initial LTV of 40%. The loan is secured against the company’s UK retail property portfolio. The amount repayable on the loan at year end was £3.8million. The debt package has a five year term and is repayable at the end of the term in December 2024. In the last quarter of 2021 the base interest rate on the loan changed from LIBOR to the Bank of England base rate. The overall interest cost of the loan is 4.00% above the Bank of England base rate. The loan is secured by way of a first charge over the investment properties in the UK which are included in the financial statements at a value of £10.5million. No banking covenants were breached by the Group during the year. Statement regarding Section 172 of the UK Companies Act Section 172 of the UK Companies Act requires the Board to report on how the directors have had regard to the matters outlined below in performing their duties. The Board consider the Group’s customers, employees, local communities, suppliers and shareholders as key stakeholders of the Group. During the year, the Directors consider that they have acted in a way, and have made decision that would, most likely promote the success of the Group for the benefit of its members as a whole as outlined in the matters below: • • The likely consequences of any decision in the long term: see Principal activity, strategy & business model on page 4 and Principal Risks and Uncertainties on page 11; • • The interests of the Group’s employees; ethics and compliance; fostering of the Company’s business relationships with suppliers, customers and others; and the impact of the Group’s operations on the community and environment: see Sustainability report on page 7; • • The need to act fairly between members of the Company: see the Corporate Governance section on page 26. Future prospects As mentioned in the Chairman’s statement, In the first quarter of the year, we have seen the API4 price average $238 and exports from our South African operations in the first quarter of 2022 have been in line with the average export tonnages we achieved in 2021. However, looking beyond the first quarter, uncertainties remain, particularly in regard to the sustainability of the higher international coal price and the impact of continued constraints in transporting coal for export on the South African rail network. The Group continues to seek opportunities to expand its operations in South Africa through the acquisition of additional coal reserves. In the UK, management is looking forward to progressing its property development opportunities in West Ealing and Development Physics as well as expanding on its equity investment portfolio. This is in line with the Group’s overall strategy of balancing the high risk of our mining operations with a dependable cash flow and capital appreciation from our UK property investment operations and equity investments. To date, the Group’s financial position has remained strong and at present, the Group has adequate financial resources to ensure the Group remains viable for the foreseeable future and that liabilities are met. A full going concern and viability assessment can be found in the Directors report on page 30. Further information on the outlook of the company can be found in both the Chairman’s Statement on page 2 and the Mining Review on page 5 which form part of the Strategic Report. Signed on behalf of the Board of Directors Garrett Casey Finance Director 13 April 2022 22 2323Bisichi PLC Governance * SIR MICHAEL HELLER MA, FCA (Chairman) ANDREW R HELLER MA, ACA (Managing Director) GARRETT CASEY CA (SA) (Finance Director) ROBERT GROBLER Pr Cert Eng (Director of mining) O+ CHRISTOPHER A JOLL MA (Non-executive) Christopher Joll was appointed a Director on 1 February 2001. He has held a number of non-executive directorships of quoted and un-quoted companies and currently runs his own event management business. He is also a published author, lecturer and a writer and director of documentary films. O * JOHN A SIBBALD BL (Non-executive) John Sibbald has been a Director since 1988. After qualifying as a Chartered Accountant he spent over 20 years in stockbroking, specialising in mining and international investment. JOHN WONG ACA, CFA (Non-executive) (Appointed 15 October 2020) John Wong was appointed a Director on 15 October 2020. After training as a Chartered accountant he has worked in the fund management industry for almost 20 years and has extensive experience in investment management, in particular within the mining sector. SECRETARY AND REGISTERED OFFICE Garrett Casey CA (SA) 12 Little Portland Street London W1W8BJ BLACK WATTLE COLLIERY AND SISONKE COAL PROCESSING DIRECTORS Andrew Heller (Managing Director) Ethan Dube Robert Grobler Garrett Casey Millicent Zvarayi COMPANY REGISTRATION Company registration No. 112155 (Incorporated in England and Wales) WEBSITE www.bisichi.co.uk E-MAIL admin@bisichi.co.uk AUDITOR Kreston Reeves LLP, London PRINCIPAL BANKERS United Kingdom Julian Hodge Bank Limited Santander UK PLC Investec PLC South Africa ABSA Bank (SA) First National Bank (SA) CORPORATE SOLICITORS United Kingdom Ashfords LLP, London Fladgate LLP, London Olswang LLP, London Wake Smith Solicitors Limited, Sheffield South Africa Beech Veltman Inc, Johannesburg Brandmullers Attorneys, Middelburg Cliffe Decker Hofmeyer, Johannesburg Herbert Smith Freehills, Johannesburg Natalie Napier Inc, Johannesburg Tugendhaft Wapnick Banchetti and Partners, Johannesburg STOCKBROKERS Shore Capital Stockbrokers Limited REGISTRARS AND TRANSFEROFFICE Link Group Shareholder Services The Registry 10th Floor Central Square 29 Wellington Street Leeds LS1 4DL UK telephone: 0371 664 0300 Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 a.m. – 5.30 p.m., Monday to Friday excluding public holidays in England and Wales. Website: https://www.linkgroup.com/ Email: shareholderenquiries@ linkgroup.co.uk Company registration number: 341829 (England and Wales) MANAGEMENT TEAM OTHER DIRECTORS AND ADVISORS * Member of the nomination committee + Senior independent director O Member of the audit, nomination andremuneration committees. 24 Bisichi PLC Governance 2021 £’000 2020 £’000 2019 £’000 2018 £’000 2017 £’000 Consolidated income statement items Revenue 50,520 29,805 48,106 49,945 40,350 Operating profit /(loss) 3,403 (4,493) 3,658 6,526 3,763 Profit/(Loss) before tax 2,501 (5,196) 3,027 5,959 1,485 Trading profit /(loss) before tax 1,559 (3,881) 4,493 6,397 3,317 Revaluation and impairment profit /(loss) before tax 942 (1,315) (1,466) (438) (1,832) EBITDA 5,849 (2,387) 5,868 8,587 3,734 Operating profit before depreciation, fair value adjustments and exchange movements (adjusted EBITDA) 5,028 (1,111) 7,457 9,088 5,819 Consolidated balance sheet items Investment properties 10,525 10,270 11,565 13,045 13,245 Other non-current investments 4,761 3,001 1,629 1,357 925 15,286 13,271 13,194 14,402 14,170 Current Investments held at fair value 685 833 1,119 887 1,050 15,971 14,104 14,313 15,289 15,220 Other assets less liabilities less non-controlling interests 1,541 1,969 5,619 4,280 1,922 Total equity attributable to equity shareholders 17,512 16,073 19,932 19,569 17,142 Net assets per ordinary share (attributable) 164.0p 150,5p 186.7p 183.3p 160.6p Dividend per share 6.00p 0p 1.00p 6.00p 5.00p Financial calendar 16 June 2022 Annual General Meeting Late August 2022 Announcement of half-year results to 30 June 2022 Late April 2023 Announcement of results for year ending 31 December 2022 Five year summary 2525Bisichi PLC Governance Review of business, future developments and post balance sheet events The Group continues its mining activities. Income for the year was derived from sales of coal from its South African operations. The Group also has a property investment portfolio for which it receives rental income and a joint venture investment in a UK residential property development. The results for the year and state of affairs of the Group and the company at 31 December 2021 are shown on pages 54 to 99 and in the Strategic Report on pages 2 to 22. Future developments and prospects are also covered in the Strategic Report and further details of any post balance sheet events can be found in note 32 to the financial statements. Over 98 per cent of staff are employed in the South African coal mining industry – employment matters and health and safety are dealt with in the Strategic Report. The management report referred to in the Director’s responsibilities statement encompasses this Directors’ Report and Strategic Report on pages 2 to 22. Corporate responsibility Environment The environmental considerations of the Group’s South African coal mining operations are covered in the Strategic Report on pages 2 to 22. The Group’s UK activities are principally property investment whereby premises are provided for rent to retail businesses and a joint venture investment in a UK residential property development. The Group seeks to provide those tenants with good quality premises from which they can operate in an efficient and environmentally friendly manner. Wherever possible, improvements, repairs and replacements are made in an environmentally efficient manner and waste re-cycling arrangements are in place at all the company’s locations. Greenhouse Gas Emissions Details of the Group’s greenhouse gas emissions for the year ended 31 December 2021 can be found on page 10 of the Strategic Report. Employment The Group’s policy is to attract staff and motivate employees by offering competitive terms of employment. The Group provides equal opportunities to all employees and prospective employees including those who are disabled. The Strategic Report gives details of the Group’s activities and policies concerning the employment, training, health and safety and community support and social development concerning the Group’s employees in South Africa. Dividend policy As outlined in the Strategic report on page 2 the directors are proposing the payment of a dividend of 4p (2020: 0p) and a special dividend of 2p (2020: Nil) per share for 2021. No interim dividend for 2021 has been paid (Interim 2020: 0p). The total dividend per ordinary share for 2021 will therefore be 6p (2020: 0p) per ordinary share. Investment properties and other properties The investment property portfolio is stated at its open market value of £10,525,000 at 31 December 2021 (2020: £10,270,000) as valued by professional external valuers. The open market value of the company’s share of investment properties and development property inventory held at cost included within its investments in joint ventures is £4,787,000 (2020: £4,597,000). Financial instruments Note 22 to the financial statements sets out the risks in respect of financial instruments. The Board reviews and agrees overall treasury policies, delegating appropriate authority to the managing director. Treasury operations are reported at each Board meeting and are subject to weekly internal reporting. Directors The directors of the company for the year were Sir Michael Heller, A R Heller, G J Casey, C A Joll, R J Grobler (a South African citizen), J A Sibbald and J Wong. The directors retiring by rotation are Sir M A Heller, Mr C A Joll and Mr J A Sibbald who offers themselves for re-election. Sir Michael Heller has been an executive Director since 1972 and Chairman since 1981. He is a Chartered Accountant and has a contract of employment determinable at six months’ notice. Directors’ report The directors submit their report together with the audited financial statements for the year ended 31 December 2021. 26 Bisichi PLC Christopher Joll was appointed a Director on 1 February 2001. He has held a number of non-executive directorships of quoted and un-quoted companies and currently runs his own event management business. He is also a published author, lecturer and a writer and director of documentary films. John Sibbald has been a non-executive Director since 1988. He is a retired Chartered Accountant. For most of his career he was employed in stockbroking in the City of London where he specialised in mining and international investment. He has a contract of service determinable at three months’ notice. No director had any material interest in any contract or arrangement with the company during the year other than as shown in this report. Directors’ shareholdings The interests of the directors in the shares of the company, including family and trustee holdings where appropriate, are shown on page 34 of the Annual Remuneration Report. Substantial interests The following have advised that they have an interest in 3 per cent. or more of the issued share capital of the company as at 13 April 2022: London & Associated Properties PLC – 4,432,618 shares representing 41.52 per cent. of the issued capital. (Sir Michael Heller is a director and shareholder of London & Associated Properties PLC). Sir Michael Heller 330,117 shares representing 3.09 per cent. of the issued capital. A R Heller 785,012 shares representing 7.35 per cent. of the issued capital. Stonehage Fleming Investment Management Ltd – 1,981,154 shares representing 18.56 per cent. of the issued share capital. James Hyslop 345,000 shares representing 3.23 per cent. of the issued share capital. Disclosure of information to auditor The directors in office at the date of approval of the financial statements have confirmed that as far as they are aware that there is no relevant audit information of which the auditor is unaware. Each of the directors has confirmed that they have taken all reasonable steps they ought to have taken as directors to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor. Indemnities and insurance The Articles of Association and Constitution of the company provide for them to indemnify, to the extent permitted by law, directors and officers (excluding the Auditor) of the companies, including officers of subsidiaries, and associated companies against liabilities arising from the conduct of the Group’s business. The indemnities are qualifying third-party indemnity provisions for the purposes of the UK Companies Act 2006 and each of these qualifying third-party indemnities was in force during the course of the financial year ended 31 December 2021 and as at the date of this Directors’ report. No amount has been paid under any of these indemnities during the year. The Group has purchased directors’ and officers’ insurance during the year. In broad terms, the insurance cover indemnifies individual directors and officers against certain personal legal liability and legal defence costs for claims arising out of actions taken in connection with Group business. Corporate Governance The Board acknowledges the importance of good corporate governance. The paragraphs below set out how the company has applied this guidance during the year. Principles of corporate governance The Group’s Board appreciates the value of good corporate governance not only in the areas of accountability and risk management, but also as a positive contribution to business prosperity. The Board endeavours to apply corporate governance principles in a sensible and pragmatic fashion having regard to the circumstances of the Group’s business. The key objective is to enhance and protect shareholder value. Board structure During the year the Board comprised the executive chairman, the managing director, two other executive directors and three non-executive directors. Their details appear on page 23. The Board is responsible to shareholders for the proper management of the Group. The Directors’ responsibilities statement in respect of the accounts is set out on page 43. The non-executive directors have a particular responsibility to ensure that the strategies proposed by the executive directors are fully considered. Governance Directors’ report 2727Bisichi PLC To enable the Board to discharge its duties, all directors have full and timely access to all relevant information and there is a procedure for all directors, in furtherance of their duties, to take independent professional advice, if necessary, at the expense of the Group. The Board has a formal schedule of matters reserved to it and meets bi-monthly. The Board is responsible for overall Group strategy, approval of major capital expenditure projects and consideration of significant financing matters. The following Board committees, which have written terms of reference, deal with specific aspects of the Group’s affairs: • • The nomination committee comprises of two non-executive directors C A Joll (Chairman) and JA Sibbald as well as the executive chairman. The committee is responsible for proposing candidates for appointment to the Board, having regard to the balance and structure of the Board. In appropriate cases recruitment consultants are used to assist the process. Each director is subject to re-election at least every three years. • • The remuneration committee is responsible for making recommendations to the Board on the company’s framework of executive remuneration and its cost. The committee determines the contractual terms, remuneration and other benefits for each of the executive directors, including performance related bonus schemes, pension rights and compensation payments. The Board itself determines the remuneration of the non-executive directors. The committee comprises of two non-executive directors C A Joll (Chairman) and JA Sibbald. The company’s executive chairman is normally invited to attend meetings. The report on directors’ remuneration is set out on pages 32 to 39. • • The audit committee comprises of two non-executive directors C A Joll (Chairman) and JA Sibbald. Its prime tasks are to review the scope of external audit, to receive regular reports from the company’s auditor and to review the half-yearly and annual accounts before they are presented to the Board, focusing in particular on accounting policies and areas of management judgment and estimation. The committee is responsible for monitoring the controls which are in force to ensure the integrity of the information reported to the shareholders. The committee acts as a forum for discussion of internal control issues and contributes to the Board’s review of the effectiveness of the Group’s internal control and risk management systems and processes. The committee also considers annually the need for an internal audit function. It advises the Board on the appointment of external auditors and on their remuneration for both audit and non-audit work, and discusses the nature and scope of the audit with the external auditors. The committee, which meets formally at least twice a year, provides a forum for reporting by the Group’s external auditors. Meetings are also attended, by invitation, by the company chairman, managing director and finance director. The audit committee also undertakes a formal assessment of the auditors’ independence each year which includes: • • a review of non-audit services provided to the Group and related fees; • • discussion with the auditors of a written report detailing consideration of any matters that could affect independence or the perception of independence; • • a review of the auditors’ own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner; and • • obtaining written confirmation from the auditors that, in their professional judgement, they are independent. The audit committee report is set out on page 40. An analysis of the fees payable to the external audit firm in respect of both audit and non-audit services during the year is set out in Note 5 to the financial statements. Performance evaluation – board, board committees and directors The performance of the board as a whole and of its committees and the non- executive directors is assessed by the chairman and the managing director and is discussed with the senior independent director. Their recommendations are discussed at the nomination committee prior to proposals for re-election being recommended to the Board. The performance of executive directors is discussed and assessed by the remuneration committee. The senior independent director meets regularly with the chairman and both the executive and non-executive directors individually outside of formal meetings. The directors will take outside advice in reviewing performance but have not found this necessary to date. Governance Directors’ report 28 Bisichi PLC Independent directors The senior independent non-executive director is Christopher Joll. The other two independent non-executive directors are John Sibbald and John Wong. Christopher Joll has been a non- executive director for over twenty years, John Sibbald has been a non-executive director for over thirty years and John Wong was appointed to the Board on 15 October 2020. The Board encourages the non-executive directors to act independently. The board considers that their length of service does not, and has not, resulted in their inability or failure to act independently. In the opinion of the Board, Christopher Joll and John Sibbald continue to fulfil their role as independent non-executive directors. The independent directors regularly meet prior to Board meetings to discuss corporate governance issues. Meetings held Meetings Attended Sir Michael Heller Board Nomination committee Audit committee 5 1 2 5 1 2 A R Heller Board Audit committee 5 2 5 2 G J Casey Board Audit committee 5 2 5 2 R J Grobler Board 5 1 C A Joll Board Audit committee Nomination committee Remuneration committee 5 2 1 1 5 2 1 1 J A Sibbald Board Audit committee Nomination committee Remuneration committee 5 2 1 1 2 0 1 0 J Wong Board 5 1 Board and board committee meetings The number of meetings during 2021 and attendance at regular Board meetings and Board committees was as follows: 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. The directors are guided by the internal control guidance for directors issued by the Institute of Chartered Accountants in England and Wales. During the period, the audit committee has reviewed the effectiveness of internal control as described above. The Board receives periodic reports from its committees. There were no significant issues identified during the year ended 31 December 2021 (and up to the date of approval of the report) concerning material internal control issues. The directors confirm that the Board has reviewed the effectiveness of the system of internal control as described during the period. Governance Directors’ report 2929Bisichi PLC Communication with shareholders Communication with shareholders is a matter of priority. Extensive information about the Group and its activities is given in the Annual Report, which is made available to shareholders. Further information is available on the company’s website, www.bisichi.co.uk. There is a regular dialogue with institutional investors. Enquiries from individuals on matters relating to their shareholdings and the business of the Group are dealt with informatively and promptly. Takeover directive The company has one class of share capital, ordinary shares. Each ordinary share carries one vote. All the ordinary shares rank pari passu. There are no securities issued in the company which carry special rights with regard to control of the company. The identity of all substantial direct or indirect holders of securities in the company and the size and nature of their holdings is shown under the “Substantial interests” section of this report above. A relationship agreement dated 15 September 2005 (the “Relationship Agreement”) was entered into between the company and London & Associated Properties PLC (“LAP”) in regard to the arrangements between them whilst LAP is a controlling shareholder of the company. The Relationship Agreement includes a provision under which LAP has agreed to exercise the voting rights attached to the ordinary shares in the company owned by LAP to ensure the independence of the Board of directors of the company. Other than the restrictions contained in the Relationship Agreement, there are no restrictions on voting rights or on the transfer of ordinary shares in the company. The rules governing the appointment and replacement of directors, alteration of the articles of association of the company and the powers of the company’s directors accord with usual English company law provisions. Each director is re-elected at least every three years. The company is not party to any significant agreements that take effect, alter or terminate upon a change of control of the company following a takeover bid. The company is not aware of any agreements between holders of its ordinary shares that may result in restrictions on the transfer of its ordinary shares or on voting rights. There are no agreements between the company and its directors or employees providing for compensation for loss of office or employment that occurs because of a takeover bid. The Bribery Act 2010 The Bribery Act 2010 came into force on 1 July 2011, and the Board took the opportunity to implement a new Anti- Bribery Policy. The company is committed to acting ethically, fairly and with integrity in all its endeavours and compliance of the code is closely monitored. Annual General Meeting The annual general meeting of the company (“Annual General Meeting”) will be held at Meeting Room 2, 12 Charles II Street, St James, London SW1Y 4QU on Thursday, 16 June 2022 at 11.00 a.m. Resolutions 1 to 10 will be proposed as ordinary resolutions. More than 50 per cent. of shareholders’ votes cast must be in favour for those resolutions to be passed. The directors consider that all of the resolutions to be put to the meeting are in the best interests of the company and its shareholders as a whole. The Board recommends that shareholders vote in favour of all resolutions. Please note that the following paragraph is a summary of resolution 10 to be proposed at the Annual General Meeting and not the full text of the resolution. You should therefore read this section in conjunction with the full text of the resolutions contained in the notice of Annual General Meeting. Directors’ authority to allot shares (Resolution 10) In certain circumstances it is important for the company to be able to allot shares up to a maximum amount without needing to seek shareholder approval every time an allotment is required. Paragraph 10.1.1 of resolution 10 would give the directors the authority to allot shares in the company and grant rights to subscribe for, or convert any security into, shares in the company up to an aggregate nominal value of £355,894. This represents approximately 1/3 (one third) of the ordinary share capital of the company in issue (excluding treasury shares) at 13 April 2022 (being the last practicable date prior to the publication of this Directors’ Report). Paragraph 10.1.2 of resolution 10 would give the directors the authority to allot shares in the company and grant rights to subscribe for, or convert any security into, shares in the company up to a further aggregate nominal value of £355,894, in connection with a pre- emptive rights issue. This amount represents approximately 1/3 (one third) of the ordinary share capital of the company in issue (excluding treasury shares) at 13 April 2022 (being the last practicable date prior to the publication of this Directors’ Report). Therefore, the maximum nominal value of shares or rights to subscribe for, or convert any security into, shares which may be allotted or granted under resolution 10 is £711,788. Resolution 10 complies with guidance issued by the Investment Association (IA). The authority granted by resolution 109 will expire on 31 August 2023 or, if earlier, the conclusion of the next annual general meeting of the company. The directors have no present intention to make use of this authority. However, if they do exercise the authority, the directors intend to follow emerging best practice as regards its use as recommended by the IA. Governance Directors’ report 30 Bisichi PLC Donations No political donations were made during the year (2020: £nil). Going concern The Group’s business activities, together with the factors likely to affect its future development are set out in the Chairman’s Statement on the preceding page 2, the Mining Review on pages 5 to 6 and its financial position is set out on page 21 of the Strategic Report. In addition Note 22 to the financial statements includes the Group’s treasury policy, interest rate risk, liquidity risk, foreign exchange risks and credit risk. In South Africa, a structured trade finance facility with Absa Bank Limited for R85million is held by Sisonke Coal Processing (Pty) Limited, a 100% subsidiary of Black Wattle Colliery (Pty) Limited. This facility comprises of a R85million revolving facility to cover the working capital requirements of the Group’s South African operations. The facility is renewable annually at 25 January and is secured against inventory, debtors and cash that are held in the Group’s South African operations. The Directors do not foresee any reason why the facility will not continue to be renewed at the next renewal date, in line with prior periods and based on their banking relationships. The directors expect that the coal market conditions experienced by its South African coal mining and processing operations in 2021 will be similar going into 2022. The directors therefore have a reasonable expectation that the mine will achieve positive levels of cash generation for the Group in 2022. As a consequence, the directors believe that the Group is well placed to manage its South African business risks successfully. In the UK, forecasts demonstrate that the Group has sufficient resources to meet its liabilities as they fall due for at least the next 12 months, from the approval of the financial statements, including those related to the Group’s UK Loan facility outlined below. The Group holds a 5 year term facility of £3.9m with Julian Hodge Bank Limited at an initial LTV of 40%. The loan is secured against the company’s UK retail property portfolio. The amount repayable on the loan at year end was £3.9million. The debt package has a five year term and is repayable at the end of the term in December 2024. In the last quarter of 2021 the base interest rate on the loan changed from LIBOR to the Bank of England base rate. The overall interest cost of the loan is 4.00% above the Bank of England base rate. All covenants on the loan were met during the year and the directors have a reasonable expectation that the Group has adequate financial resources at short notice, including cash and listed equity investments, to ensure the existing facility’s covenants are met on an ongoing basis. Dragon Retail Properties Limited (“Dragon”), the Group’s 50% owned joint venture, holds a Santander bank loan of £1.2million secured against its investment property, see note 14. The bank loan of £1.164million is secured by way of a first charge on specific freehold property at a value of £2.08 million. The interest cost of the loan is 2.75 per cent above the bank’s base rate. A refinancing of this loan is currently underway. The loan originally expired in October 2020 but has been extended to April 2022, and the lender has offered to extend this further if required. Dragon has agreed terms with a new lender to refinance this loan in full and are expecting to complete this shortly. Subsequent to year end in the first quarter of 2022 geo-political events in Ukraine resulted in higher global energy prices. Although the final outcome of the events in Ukraine is uncertain, the Directors at present do not foresee the events having a significant negative impact on the Group’s UK and South African operations ability to remain in operation for the foreseeable future. Detailed budget and cash flow forecasts for the Group’s operations demonstrated that the Group has sufficient resources to meet its liabilities as they fall due for at least the next 12 months and the Directors believe the Group would be able to manage its business risks and have adequate cash resources to continue in operational existence for the foreseeable future. As a result of the banking facilities held as well as the acceptable levels of cash expected to be held by the Group over the next 12 months, the Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and that the Group is well placed to manage its business risks. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements. By order of the board G.J Casey Secretary 12 Little Portland Street London W1W8BJ 13 April 2022 Governance Directors’ report 3131Bisichi PLC Governance The first part is the Annual Remuneration Report which details remuneration awarded to Directors and non-executive Directors during the year. The shareholders will be asked to approve the Annual Remuneration Report as an ordinary resolution (as in previous years) at the AGM in June 2022. During the year, in light of the performance of the Group, the board determined to award bonuses to certain executive directors of the Group. The second part is the Remuneration Policy which details the remuneration policy for Directors, and can be found at www.bisichi.co.uk. The current remuneration policy was subject to a binding vote which was approved by shareholders at the AGM in July 2020. The approval will continue to apply for a 3 year period commencing from then. The committee reviewed the existing policy and deemed that no changes were necessary to the current arrangements. Both of the above reports have been prepared in accordance with The Large & Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. The company’s auditors, Kreston reeves LLP are required by law to audit certain disclosures and where disclosures have been audited they are indicated as such. Christopher Joll Chairman – remuneration committee 12 Little Portland Street London W1W8BJ 13 April 2022 Statement of the Chairman of the remuneration committee The remuneration committee presents its report for the year ended 31 December 2021. The report is presented in two parts in accordance with the remuneration regulations. 32 Bisichi PLC Governance The following information has been audited: Single total figure of remuneration for the year ended 31 December 2021: Salaries and Fees £’000 Benefits £’000 Bonuses £’000 Long Term Incentive Awards £’000 Pension £’000 Total 2021 £’000 Total Fixed Remuner- ation £’000 Total Variable Remuner- ation £’000 Executive Directors Sir Michael Heller 83 - - - - 83 83 - A R Heller 495 34 400 - - 929 529 400 G J Casey 185 17 200 - 19 421 221 200 R Grobler 205 11 176 - 17 409 233 176 Non–Executive Directors C A Joll 40 - - - - 40 40 - J A Sibbald 3 3 - - - 6 6 - J Wong (appointed 15 October 2021) 50 - - - - 50 50 - Total 1,061 65 776 - 36 1,938 1,162 776 Members of the remuneration committee for the year ended 31 December 2021 Single total figure of remuneration for the year ended 31 December 2020: Salaries and Fees £’000 Benefits £’000 Bonuses £’000 Long Term Incentive Awards £’000 Pension £’000 Total 2020 £’000 Total Fixed Remuner- ation £’000 Total Variable Remuner- ation £’000 Executive Directors Sir Michael Heller 83 - - - - 83 83 - A R Heller 495 56 - - - 551 551 - G J Casey 154 20 - - 11 185 185 - R Grobler 193 10 - - 16 219 219 - Non–Executive Directors C A Joll 40 - - - - 40 40 - J A Sibbald 3 3 - - - 6 6 - J Wong (appointed 15 October 2020) 12 - - - - 12 12 - Total 980 88 - - 27 1,096 1,096 - Members of the remuneration committee for the year ended 31 December 2020 Annual remuneration report 3333Bisichi PLC Governance Annual remuneration report Summary of directors’ terms Date of contract Unexpired term Notice period Executive directors Sir Michael Heller November 1972 Continuous 6 months A R Heller January 1994 Continuous 3 months G J Casey June 2010 Continuous 3 months R J Grobler April 2008 Continuous 3 months Non-executive directors C A Joll February 2001 Continuous 3 months J A Sibbald October 1988 Continuous 3 months J Wong October 2020 Continuous 3 months Pension schemes and incentives Two (2020: Two) directors have benefits under money purchase pension schemes. Contributions in 2021 were £35,177 (2020: £27,323), see table above. There are no additional benefits payable to any director in the event of early retirement. Scheme interests awarded during the year During the year no share options were granted under share option schemes. Share option schemes The company currently has only one Unapproved Share Option Scheme which is not subject to HM revenue and Customs (HMRC) approval. The 2012 scheme was approved by the remuneration committee of the company on 28 September 2012. Number of share options Option price 1 January 2021 Options granted/ (Surren- dered) in 2021 31 December 2021 Exercisable from Exercisable to The 2012 Scheme A R Heller 87.01p 150,000 - 150,000 18/09/2015 17/09/2025 A R Heller 73.50p 150,000 - 150,000 06/02/2018 06/02/2028 G J Casey 87.01p 150,000 - 150,000 18/09/2015 17/09/2025 G J Casey 73.50p 230,000 - 230,000 06/02/2018 06/02/2028 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. 34 Bisichi PLC Governance Annual remuneration report Payments to past directors No payments were made to past directors in the year ended 31 December 2021 (2020: £nil). Payments for loss of office No payments for loss of office were made in the year ended 31 December 2021 (2020: £nil). Statement of Directors’ shareholding and share interest Directors’ interests The interests of the directors in the shares of the company, including family and trustee holdings where appropriate, were as follows: Beneficial Non-beneficial 31.12.2021 1.1.2021 31.12.2021 1.1.2021 Sir Michael Heller 148,783 148,783 181,334 181,334 A R Heller 785,012 785,012 - - R J Grobler - - - - G J Casey 40,000 40,000 - - C A Joll - - - - J A Sibbald - - - - J Wong - - - - There are no requirements or guidelines for any director to own shares in the Company. The following section is unaudited. The following graph illustrates the company’s performance compared with a broad equity market index over a ten year period. Performance is measured by total shareholder return. The directors have chosen the FTSE All Share Mining index as a suitable index for this comparison as it gives an indication of performance against a spread of quoted companies in the same sector. The middle market price of Bisichi PLC ordinary shares at 31 December 2021 was 60p (2020: 109p). During the year the share price ranged between 45p and 120p. 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 2012 2013 2014 2015 2016 2017 2018 2019 2020 – Bisichi Mining – FTSE All Share Share Price (rebased) 3535Bisichi PLC Governance Annual remuneration report Year Managing Director Managing Director Single total figure of remuneration £’000 Annual bonus payout against maximum opportunity % Long-term incentive vesting rates against maximum opportunity % 2021 A R Heller 929 27% N/A 2020 A R Heller 551 0% N/A 2019 A R Heller 1,035 34% N/A 2018 A R Heller 1,073 34% N/A 2017 A R Heller 898 25% N/A 2016 A R Heller 850 22% N/A 2015 A R Heller 912 22% N/A 2014 A R Heller 862 22% N/A 2013 A R Heller 614 N/A N/A 2012 A R Heller 721 N/A N/A Bisichi PLC does not have a Chief Executive so the table includes the equivalent information for the Managing Director. There were no formal criteria or conditions to apply in determining the amount of bonus payable or the number of shares to be issued prior to 2014. Percentage change in remuneration and Company performance Director Base Salary % Change 2021 v 2020 Benefits % Change 2021 v 2020 Bonuses % Change 2021 v 2020 Executive: Sir Michael Heller 0% 0% 0% A R Heller 1 0% (39%) N/A G J Casey 1 20% (10%) N/A R Grobler 1 6% 3% N/A Non-Executive: C A Joll 0% 0% 0% J A Sibbald 0% 0% 0% J Wong 2 0% 0% 0% Employee remuneration on a full-time equivalent basis: Employees of the Company 1&3 8% (26%) N/A 1 Bonus changes from 2021 to 2020 for AR Heller, G J Casey, R Grobler and Employees of the Company are disclosed as not applicable as no bonuses were awarded to the various directors and employees in 2020. 2 Mr J Wong was appointed as a non-executive Director on 15 October 2020 so the annual change is apportioned. 3 The comparator group chosen is all UK based employees as the remuneration committee believe this provides the most accurate comparison of underlying increases based on similar annual bonus performances utilised by the Group. Remuneration of the Managing Director over the last ten years The table below demonstrates the remuneration of the holder of the office of Managing Director for the last ten years for the period from 1 January 2012 to 31 December 2021. 36 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: 2021 £’000 2020 £’000 Employee remuneration 7,491 5,890 Distribution to shareholders (see note below) 641 - The distribution to shareholders in the current year is subject to shareholder approval at next the Annual General Meeting. Statement of implementation of remuneration policy The remuneration policy was approved at the AGM on 9 July 2020. The policy took effect from the conclusion of the AGM and will apply for 3 years unless changes are deemed necessary by the remuneration committee. The company may not make a remuneration payment or payment for loss of office to a person who is, is to be, or has been a director of the company unless that payment is consistent with the approved remuneration policy, or has otherwise been approved by a resolution of members. During the year, there were no deviations from the procedure for the implementation of the remuneration policy as set out in the policy. Consideration by the directors of matters relating to directors’ remuneration The remuneration committee considered the executive directors remuneration and the board considered the non-executive directors remuneration in the year ended 31 December 2021. The Company did not engage any consultants to provide advice or services to materially assist the remuneration committee’s considerations. Shareholder voting At the Annual General Meeting on 22 June 2021, there was an advisory vote on the resolution to approve the remuneration report, other than the part containing the remuneration policy. In addition, on 9 July 2020 there was a binding vote on the resolution to approve the current remuneration policy the results of which are detailed below: % of votes for % of votes against No of votes withheld Resolution to approve the Remuneration Report (22 June 2021) 72.05% 27.95% - Resolution to approve the Remuneration Policy (9 July 2020) 69.87% 30.13% - The remuneration committee and directors have considered the percentage of votes against the resolutions to approve the remuneration report and policy. Reasons given by shareholders, as known by the directors, have been the level of remuneration awarded and the general remuneration policy itself. The remuneration committee consider the remuneration policy and performance conditions within remain appropriate and therefore no further action has been taken. Service contracts All executive directors have full-time contracts of employment with the company. Non-executive directors have contracts of service. No director has a contract of employment or contract of service with the company, its joint venture or associated companies with a fixed term which exceeds twelve months. Directors notice periods (see page 33 of the annual remuneration report) are set in line with market practice and of a length considered sufficient to ensure an effective handover of duties should a director leave the company. All directors’ contracts as amended from time to time, have run from the date of appointment. Service contracts are kept at the registered office. 3737Bisichi PLC Governance Annual remuneration report Remuneration policy table The remuneration policy table below is an extract of the Group’s current remuneration policy on directors’ remuneration, which was approved by a binding vote at the 2020 AGM. The approved policy took effect from 9 July 2020. A copy of the full policy can be found at www.bisichi.co.uk. Element Purpose Policy Operation Opportunity and performance conditions Executive directors Base salary To recognise: Skills Responsibility Accountability Experience Value Considered by remuneration committee on appointment. Set at a level considered appropriate to attract, retain motivate and reward the right individuals. Reviewed annually Paid monthly in cash No individual director will be awarded a base salary in excess of £700,000 per annum. No specific performance conditions are attached to base salaries. Pension To provide competitive retirement benefits Company contribution offered at up to 10% of base salary as part of overall remuneration package. The contribution payable by the company is included in the director’s contract of employment. Paid into money purchase schemes Company contribution offered at up to 10% of base salary as part of overall remuneration package. No specific performance conditions are attached to pension contributions. Benefits To provide a competitive benefits package Contractual benefits can include but are not limited to: Car or car allowance Group health cover Death in service cover Permanent health insurance The committee retains absolute discretion to approve changes in contractual benefits in exceptional circumstances or where factors outside the control of the Group lead to increased costs (e.g. medical inflation) The costs associated with benefits offered are closely controlled and reviewed on an annual basis. No director will receive benefits of a value in excess of 30% of his base salary. No specific performance conditions are attached to contractual benefits. The value of benefits for each director for the year ended 31 December 2021 is shown in the table on page 32. 38 Bisichi PLC Governance Annual remuneration report Element Purpose Policy Operation Opportunity and performance conditions Annual Bonus To reward and incentivise In assessing the performance of the executive team, and in particular to determine whether bonuses are merited the remuneration committee takes into account the overall performance of the business. Bonuses are generally offered in cash The remuneration committee determines the level of bonus on an annual basis applying such performance conditions and performance measures as it considers appropriate 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. Share Options To provide executive directors with a long-term interest in the company Granted under existing schemes (see page 33) Offered at appropriate times by the remuneration committee Entitlement to share options is not subject to any specific performance conditions. Share options will be offered by the remuneration committee as appropriate taking into account the factors considered above in the decision making process in determining remuneration policy. The aggregate number of shares over which options may be granted under all of the company’s option schemes (including any options and awards granted under the company’s employee share plans) in any period of ten years, will not exceed, at the time of grant, 10% of the ordinary share capital of the company from time to time. In determining the limits no account shall be taken of any shares where the right to acquire the shares has been released, lapsed or has otherwise become incapable of exercise. The company currently has one Share Option Scheme (see page 33). For the 2012 scheme the remuneration committee has the ability to impose performance criteria in respect of any new share options granted, however there is no requirement to do so. There are no performance conditions attached to the options already issued under the 2012 scheme, the options vest on issue and there are no minimum hold periods for the resulting shares issued on exercise of the option. 3939Bisichi PLC Element Purpose Policy Operation Opportunity and performance conditions Non-executive directors Base salary To recognise: Skills Experience Value Considered by the board on appointment. Set at a level considered appropriate to attract, retain and motivate the individual. Experience and time required for the role are considered on appointment. Reviewed annually No individual director will be awarded a base salary in excess of £60,000 per annum. No specific performance conditions are attached to base salaries. Pension No pension offered Benefits No benefits offered except to one non- executive director who is eligible for health cover (see annual remuneration report page 32) The committee retains the discretion to approve changes in contractual benefits in exceptional circumstances or where factors outside the control of the Group lead to increased costs (e.g. medical inflation) The costs associated with the benefit offered is closely controlled and reviewed on an annual basis. No director will receive benefits of a value in excess of 30% of his base salary. No specific performance conditions are attached to contractual benefits. Share Options Non-executive directors do not participate in the share option schemes 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. Governance Annual remuneration report 40 Bisichi PLC Governance The Audit Committee’s prime tasks are to: • • review the scope of external audit, to receive regular reports from the auditor and to review the half-yearly and annual accounts before they are presented to the board, focusing in particular on accounting policies and areas of management judgment and estimation; • • monitor the controls which are in force to ensure the integrity of the information reported to the shareholders; • • assess key risks and to act as a forum for discussion of risk issues and contribute to the board’s review of the effectiveness of the Group’s risk management control and processes; • • act as a forum for discussion of internal control issues and contribute to the board’s review of the effectiveness of the Group’s internal control and risk management systems and processes; • • consider each year the need for an internal audit function; • • advise the board on the appointment of external auditors and rotation of the audit partner every five years, and on their remuneration for both audit and non-audit work, and discuss the nature and scope of their audit work; • • participate in the selection of a new external audit partner and agree the appointment when required; • • undertake a formal assessment of the auditors’ independence each year which includes: ~ a review of non-audit services provided to the Group and related fees; ~ discussion with the auditors of a written report detailing all relationships with the company and any other parties that could affect independence or the perception of independence; ~ a review of the auditors’ own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner; and ~ obtaining written confirmation from the auditors that, in their professional judgement, they are independent. Meetings The committee meets prior to the annual audit with the external auditors to discuss the audit plan and again prior to the publication of the annual results. These meetings are attended by the external audit partner, managing director, director of finance and company secretary. Prior to bi-monthly board meetings the members of the committee meet on an informal basis to discuss any relevant matters which may have arisen. Additional formal meetings are held as necessary. During the past year the committee: • • met with the external auditors, and discussed their 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. Audit committee report The committee’s terms of reference have been approved by the board and follow published guidelines, which are available from the company secretary. The audit committee comprises the two non-executive directors, Christopher Joll (chairman), an experienced financial PR executive and John Sibbald, a retired chartered accountant. 4141Bisichi 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 £300,000 to £350,000 to be material. External Auditors Kreston Reeves LLP were appointed as the statutory auditors during the year and they have expressed their willingness to continue in office and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting. In the United Kingdom the company is provided with extensive administration and accounting services by London & Associated Properties PLC which has its own audit committee and employs a separate firm of external auditors, RSM UK Audit LLP. BDO South Africa Inc. acts as the external auditor to the South African companies, and the work of that firm was reviewed by Kreston Reeves LLP for the purpose of the Group audit. Christopher Joll Chairman – audit committee 12 Little Portland Street London W1W8BJ 13 April 2022 42 Bisichi PLC Governance In accordance with your instructions we have carried out a valuation of the freehold property interests held as at 31 December 2021 by the company as detailed in our Valuation Report dated 16 February 2022. Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2021 of the interests owned by the company was £10,525,000 being made up as follows: £’000 Freehold 8,230 Leasehold 2,295 10,525 Leeds 16 February 2022 Carter Towler Regulated by Royal Institute of Chartered Surveyors Valuers’ certificates To the directors of Bisichi PLC 4343Bisichi PLC Governance Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the Group financial statements in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006. The directors have elected to prepare the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and company and of the profit or loss for the Group for that period. In preparing these financial statements, the directors are required to: • • select suitable accounting policies and then apply them consistently; • • make judgements and accounting estimates that are reasonable and prudent; • • state with regard to the Group financial statements whether they have been prepared in accordance with UK- adopted international accounting standards in conformity with the requirements of the Companies Act 2006 subject to any material departures disclosed and explained in the financial statements; • • state with regard to the parent company financial statements, whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; • • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company and the Group will continue in business; and • • prepare a director’s report, a strategic report and director’s remuneration report which comply with the requirements of the Companies Act 2006. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the annual report and accounts, taken as a whole, are fair, balanced, and understandable and provides the information necessary for shareholders to assess the Group’s performance, business model and strategy. Website publication The directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the company’s website is the responsibility of the directors. The directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein. Directors’ responsibilities pursuant to DTR4 The directors confirm to the best of their knowledge: • • the Group financial statements have been prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group. • • the annual report includes a fair review of the development and performance of the business and the financial position of the Group and the parent company, together with a description of the principal risks and uncertainties that they face. Directors’ responsibilities statement The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations. 44 Bisichi PLC Governance Independent auditor report to the shareholders of Bisichi Plc for the year ended 31 December 2021 Opinion We have audited the financial statements of Bisichi PLC (the ‘parent company’) and its subsidiaries (the ‘Group’) for the year ended 31 December 2021 which comprise the consolidated income statement, consolidated statement of other comprehensive income, consolidated and company balance sheets, consolidated and company statements of changes in equity, consolidated cash flow statement and notes to the financial statements, including a summary of significant Group accounting policies. The financial reporting framework that has been applied in their preparation of the group financial statements is applicable law and UK adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice). In our opinion, the financial statements: • • the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 December 2021 and of the Group’s profit for the year then ended; • • the group financial statements have been properly prepared in accordance with UK adopted international accounting standards; • • the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and • • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 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 external factors including the COVID pandemic and the war in Ukraine and the potential liquidity impact of these on cash balances including available facilities. • • Analysed the financial strength of the business at the year end date and considered key trends in balance sheet strength and business performance over the last three years. • • Confirmations gained that operation of the business, including mine production and sale at Black Wattle Colliery have not been disrupted in the period by any external or internal factors. • • Testing the mechanical integrity of forecast model by checking the accuracy and completeness of the model, including challenging the appropriateness of estimates and assumptions with reference to empirical data and external evidence. • • 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 4545Bisichi PLC 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 30; • • Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period is appropriate set out on page 22; • • Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 11 to 15; • • The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems set out on page 28 and • • The section describing the work of the Risk and Audit Committee set out on page 27. 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. 46 Bisichi PLC Governance Independent auditor report to the shareholders of Bisichi Plc We reported all audit differences found in excess of our triviality threshold to the directors and the management board. For each Group company within the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range of materiality allocated across each Group company was between £227,000 and £23,300. The scope of our audit was influenced by our application of materiality as we set certain quantitative thresholds for performance materiality and use these thresholds as a consideration tool to help to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole. We determined component materiality for the parent company to be capped at below group materiality. This was also the case for group subsidiaries registered outside of the UK. For the UK-registered trading subsidiaries, 4% of that subsidiary’s net assets was used. Performance materiality was set in the range of 70-80% of component materiality. Our application of materiality Group financial statements Parent company financial statements Materiality £359,600 £355,000 Basis for determining materiality 2% of net assets Capped below group materiality Rationale for benchmark applied The group's principal activity of that of an exploration and mining operation and investment property holdings. To this end the business is highly asset focused. Therefore a benchmark for materiality of the NA's of the group is considered to be appropriate. The parent company materiality has been capped at below group materiality. This was to address the aggregation risk in the group audit. Performance materiality £269,700 £269,600 Basis for determining performance materiality 75% of materiality Capped below group materiality Rationale for performance materiality applied On the basis of our risk assessments, together with our assessment of the Group’s overall control environment, our judgement was that performance materiality was 75% of our planning materiality. In assessing the appropriate level, we consider the nature, the number and impact of the audit differences identified in the previous year’s audit. The parent company performance materiality has been capped at below group performance materiality. This was to address the aggregation risk in the group audit. Triviality threshold £17,980 £17,975 Basis for determining triviality threshold 5% of materiality Capped below group materiality 4747Bisichi PLC Governance Independent auditor report to the shareholders of Bisichi Plc Coverage overview Group revenue Group profit/(loss) before tax Group net assets Totals at 31 December 2021: £50,519,592 £2,501,171 £17,835,066 Full statutory audit (Kreston Reeves and BDO) £50,519,592 (100%) £2,377,426 (95%) £17,092,472 (96%) Limited procedures £Nil £123,745 (5%) £742,594 (4%) We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group and the parent company, the accounting processes and controls, and the industry in which they operate. Our scoping considerations for the Group audit were based both on financial information and risk. As noted above limited assurance audit work – which is to say the audit of balances and transactions material at a group level – was only applied in respect of a small element of the group. The below table summarises for the parent company, and its subsidiaries, in terms of the level of assurance gained: Group component Level of assurance Bisichi PLC Full statutory audit (Kreston Reeves) Mineral Products Limited Full statutory audit (Kreston Reeves) Bisichi (Properties) Limited Full statutory audit (Kreston Reeves) Bisichi Northampton Limited Full statutory audit (Kreston Reeves) Black Wattle Colliery (Pty) Limited Full statutory audit (BDO) Sisonke Coal Processing (Pty) Limited Full statutory audit (BDO) Black Wattle Klipfontein (Pty) Limited Full statutory audit (BDO) Bisichi Coal Mining (Pty) Limited Full statutory audit (BDO) All other group undertakings Limited assurance (Kreston Reeves) 48 Bisichi PLC Governance Independent auditor report to the shareholders of Bisichi Plc Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit. Revenue recognition: £50,519,592 Significance and nature of key risk Revenue is a key performance indicator for users in assessing the group’s financial statements. Revenue generated has a significant impact on cash inflows and profit before tax for the group. As such revenue is a key determinant in profitability and the group’s ability to generate cash. Revenue comprises two key revenue streams: the sale of coal and property rental income. Coal revenue is recognised when the customer has a legally binding obligation to settle under the terms of the contract. Rental income is recognised in the Group income statement on a straight-line basis over the term of the lease. How our audit addressed the key risk Sales of coal and coal processing services in the period were tested from the trigger point of the sale to the point of recognition in the financial statements, corroborating this to contract sales or service terms and the recognition stages detailed in IFRS 15. Rental income revenue was recalculated based on the terms included in signed lease agreements. Again, the recognition stages detailed the relevant standards were carefully considered to ensure revenue recognised was in line with these. This substantive testing covered 100% of total property rental revenues. Revenue streams were further analytically reviewed via comparison to our expectations. Expectations were based on a combination of prior financial data/budgets and our own assessments based on our knowledge gained of the business. Cut-off of revenue was reviewed by analysing sales recorded during the period just before and after the financial year end and determining if the recognition applied was appropriate. Walkthrough testing was performed to ensure that key systems and controls in place around the revenue cycle operated as designed. The accuracy of revenue disclosures in the accounts were confirmed to be consistent with the revenue cycle observed and audited. The completeness of these disclosures was confirmed by reference to the full disclosure requirements as detailed in IFRS 15. Key observations communicated to the Risk and Audit Committee We have no concerns over the material accuracy of revenue recognised in the financial statements. 4949Bisichi PLC Governance Independent auditor report to the shareholders of Bisichi Plc Valuation/impairment of investment properties: £10,700,134 Significance and nature of key risk Investment properties comprise freehold and long leasehold land and buildings. Investment properties are carried at fair value in accordance with IAS 40. 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: £8,896,000 Significance and nature of key risk The purpose of mine development is to establish secure working conditions and infrastructure to allow the safe and efficient extraction of recoverable reserves. 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. 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. 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. 50 Bisichi PLC Other information The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Our opinion on the remuneration report Kreston Reeves has audited the Annual remuneration report set out on pages 32 to 39 of the Annual Report for the year ended 31 December 2021. The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with the Companies Act 2006. Kreston Reeves’ responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with International Accounting Standards. In Kreston Reeves’ opinion, the Remuneration Report of the Group for the year, complies with the requirements of the Companies Act 2006. Our consideration of climate change related risks The financial impacts on the Group of climate change and the transition to a low carbon economy (“climate change”) were considered in our audit where they have the potential to directly or indirectly impact key judgements and estimates within the financial statements. The Group continues to develop its assessment of the potential impacts of climate change. Climate risks have the potential to materially impact the key judgements and estimates within the financial report. Our audit considered those risks that could be material to the key judgement and estimates in the assessment of the carrying value of non-current assets and closure and rehabilitation provisions. The key judgements and estimates included in the financial statements incorporate actions and strategies, to the extent they have been approved and can be reliably estimated in accordance with the Group’s accounting policies. Accordingly, our key audit matters address how we have assessed the Group’s climate related assumptions to the extent they impact each key audit matter. Our audit procedures were performed with the involvement of our climate change and valuation specialists. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: •• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and •• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. Matters on which we are required to report by exception In the light of our knowledge and understanding of the Group and parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: •• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or •• the parent company financial statements are not in agreement with the accounting records and returns; or •• certain disclosures of directors’ remuneration specified by law are not made; or •• we have not received all the information and explanations we require for our audit Responsibilities of directors As explained more fully in the directors’ responsibilities statement (set out on page 43), the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group’s and parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or parent company or to cease Governance Independent auditor report to the shareholders of Bisichi Plc 5151Bisichi PLC Governance Independent auditor report to the shareholders of Bisichi Plc operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Capability of the audit in detecting irregularities, including fraud Based on our understanding of the group and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure, management bias in accounting estimates and judgemental areas of the financial statements such as the valuation of investment properties and mining reserve and development asset. Audit procedures performed by the group engagement team and component auditors included: •• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most significant are those that relate to the reporting framework and the relevant tax compliance regulations in the jurisdictions in which Bisichi PLC operates. In addition, we concluded that there are certain significant laws and regulations that may have an effect on the determination of the amounts and disclosures in the financial statements, mainly relating to health and safety, employee matters, bribery and corruption practices, environmental and certain aspects of company legislation recognising the regulated nature of the Group’s mining and oil and gas activities and its legal form. •• Detailed discussions were held with management to identify any known or suspected instances of non- compliance with laws and regulations. •• Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud. •• Challenging assumptions and judgements made by management in its significant accounting estimates, including assessing the capabilities of the property valuers and discussing with the valuers how their valuations were calculated and the data and assumptions they have used to calculate these. •• Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud. •• Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business. •• Reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with relevant tax and regulatory authorities. •• Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions. •• Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation. •• We ensured our global audit team (including Kreston Reeves and BDO) has deep industry experience through working for many years on relevant audits, including experience of mining and investment property management. Our audit planning included considering external market factors, for example geopolitical risk, the potential impact of climate change, commodity price risk and major trends in the industry. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non- compliance. 52 Bisichi PLC Governance Independent auditor report to the shareholders of Bisichi Plc As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: •• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. •• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. •• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. •• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group or the parent company to cease to continue as a going concern. •• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. •• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Other matters which we are required to address We were appointed by the audit committee on 19 November 2021 to audit the financial statements for the year ending 31 December 2021. Our total uninterrupted period of engagement is 1 year, covering the year ended 31 December 2021. The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and we remain independent of the group and the parent company in conducting our audit. During the period under review, agreed upon procedures were completed in respect of a number of the group’s service charge accounts. Our audit opinion is consistent with the additional report to the audit committee. Use of our report This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Anne Dwyer BSc(Hons) FCA (Senior Statutory Auditor) For and on behalf of Kreston Reeves LLP Chartered Accountants Statutory Auditor London Date: 19 April 2022 Financial statements 54 Consolidated income statement 55 Consolidatedstatementofothercomprehensiveincome 56 Consolidatedbalancesheet 58 Consolidatedstatementofchangesinshareholders’equity 59 Consolidatedcashflowstatement 60 Groupaccountingpolicies 68 Notestothefinancialstatements 94 Companybalancesheet 95 Companystatementofchangesinequity 96 Companyaccountingpolicies 53BisichiPLC 54 BisichiPLC Financial statements Notes 2021 Trading £’000 2021 Revaluations and impairment £’000 2021 Total £’000 2020 Trading £’000 2020 Revaluations and impairment £’000 2020 Total £’000 Group revenue 2 50,520 - 50,520 29,805 - 29,805 Operatingcosts 3 (45,492) - (45,492) (30,916) - (30,916) Operatingprofit/(loss)before depreciation,fairvalueadjustments andexchangemovements 5,028 - 5,028 (1, 111) - (1,111) Depreciation 3 (2,571) - (2,571) (2, 193) - (2,193) Operatingprofit/(loss)beforefairvalue adjustmentsandexchangemovements 1 2,45 7 - 2,457 (3,304) - (3,304) Exchange(losses)/gains (121) - (121) 39 - 39 Increase/(Decrease)invalueof investmentproperties 4 - 255 255 - (1,295) (1,295) Gainoninvestmentsheldatfairvalue - 812 812 - 67 67 Operating profit/(loss) 1 2,336 1,06 7 3,403 (3,265) (1,228) (4,493) Shareoflossinjointventures 13 - (125) (125) - (87) (8 7) Profit/(Loss) before interest and taxation 2,336 942 3 , 278 (3,265) (1,315) (4,580) Interestreceivable 22 - 22 25 - 25 Interestpayable 7 (7 99) - (7 99) (641) - (641) Profit/(Loss) before tax 5 1,559 942 2,501 (3,881) (1,315) (5, 196) Taxation 8 (453) (342) (795) 1,225 177 1,402 Profit/(Loss) for the year 1, 106 600 1,7 06 (2,656) (1, 138) (3, 7 94) Attributable to: Equityholdersofthecompany 891 600 1,491 (2,216) (1, 138) (3,354) Non-controllinginterest 27 215 - 215 (440) - (440) Profit/(Loss) for the year 1, 106 600 1, 706 (2,656) (1, 138) (3,7 94) Profit/(Loss)pershare–basic 10 13.96p (31.42p) Profit/(Loss)pershare–diluted 10 13.94p (31.42p) Tradinggainsandlossesreflectallthetradingactivityonminingandpropertyoperationsandrealisedgains.Revaluationgains andlossesreflectstherevaluationofinvestmentpropertiesandotherassetswithintheGroupandanyproportionofunrealised gainsandlosseswithinJointVentures.Thetotalcolumnrepresentstheconsolidatedincomestatementpresentedinaccordance withIAS1. Consolidated income statement for the year ended 31 December 2021 Financial statements BisichiPLC 55 Financial statements Consolidated statement ofother comprehensiveincome for the year ended 31 December 2021 2021 £’000 2020 £’000 Profit/(Loss) for the year 1, 706 (3,7 94) Other comprehensive income/(expense): Items that may be subsequently recycled to the income statement: Exchangedifferencesontranslationofforeignoperations (60) (46 7) Other comprehensive income for the year net of tax (60) (46 7) Total comprehensive income for the year net of tax 1,646 (4,261) Attributable to: Equityshareholders 1,439 (3,7 52) Non-controllinginterest 207 (509) 1,646 (4,261) 56 BisichiPLC Financial statements Notes 2021 £’000 2020 £’000 Assets Non-current assets Investmentproperties 11 10, 700 10,4 71 Miningreserves,plantandequipment 12 9,065 10, 17 4 Investmentsinjointventuresaccountedforusingequitymethod 13 1, 130 1,255 Otherinvestmentsatfairvaluethroughprofitandloss(“FVPL”) 13 3,631 1, 7 46 Total non-current assets 24,526 23,646 Current assets Inventories 16 1,253 3,445 Tradeandotherreceivables 17 8,626 6,958 InvestmentsinlistedsecuritiesheldatFVPL 18 685 833 Cashandcashequivalents 3,018 3, 7 68 Total current assets 13,582 15,004 Total assets 38, 108 38,650 Liabilities Current liabilities  Borrowings 20 (2,666) (5, 110)  Tradeandotherpayables 19 (10, 7 43) (10,856)  Currenttaxliabilities (7 26) (209) Total current liabilities (14, 135) (16, 17 5) Non-current liabilities  Borrowings 20 (3,853) (3,943)  Provisionforrehabilitation 21 (1,390) (1,442) Leaseliabilities 31 (389) (427)  Deferredtaxliabilities 23 (506) (4 7 4) Total non-current liabilities (6, 138) (6,286) Total liabilities (20,27 3) (22,461) Net assets 17 ,835 16,189 Consolidated balance sheet at 31 December 2021 5757BisichiPLC Financial statements Consolidated balance sheet A R Heller G J Casey Company Registration No. 112155 Director  Director Notes 2021 £’000 2020 £’000 Equity  Sharecapital 24 1,068 1,068  Sharepremiumaccount 258 258  Translationreserve (2,540) (2,488)  Otherreserves 25 707 707  Retainedearnings 18,019 16,528 Total equity attributable to equity shareholders 17 ,512 16,0 73 Non-controllinginterest 27 323 116 Total equity 17 ,835 16,189 Thesefinancialstatementswereapprovedandauthorisedforissuebytheboardofdirectorson13April2022andsignedonits behalfby: 58 BisichiPLC Financial statements Share capital £’000 Share Premium £’000 Transla- tion reserves £’000 Other reserves £’000 Retained earnings £’000 Total £’000 Non- controlling interest £’000 Total equity £’000 Balance at 1 January 2020 1,068 258 (2,090) 707 19,989 19,932 625 20,557 Lossfortheyear - - - - (3,354) (3,354) (440) (3, 794) Othercomprehensiveexpense - - (398) - - (398) (69) (46 7) Totalcomprehensiveexpense fortheyear - - (398) - (3,354) (3, 7 52) (509) (4,261) Dividend(note9) - - - - (10 7) (10 7) - (107) Balance at 1 January 2021 1,068 258 (2,488) 707 16,528 16,073 116 16, 189 Profitfortheyear - - - - 1,491 1,491 215 1,7 06 Othercomprehensiveincome - - (52) - - (52) (8) (60) Totalcomprehensiveincomefor theyear - - (52) - 1,491 1,439 2 07 1,646 Dividend(note9) - - - - - - - - Balance at 31 December 2021 1,068 258 (2,540) 707 18,019 17 ,512 323 17 ,835 Consolidated statement of changes inshareholders’ equity for the year ended 31 December 2021 5959BisichiPLC Financial statements Year ended 31 December 2021 £’000 Yearended 31December 2020 £’000 Cash flows from operating activities Operatingprofit/Loss 3,403 (4,493) Adjustmentsfor:  Depreciation 2,571 2, 193  Unrealised(gain)/lossoninvestmentproperties (255) 1,295  GainoninvestmentsheldatFVPL (812) (6 7)  Exchangeadjustments 121 (39) Cash flow before working capital 5,028 (1, 111) Changeininventories 2, 105 (1, 12 7) Changeintradeandotherreceivables (1,900) 122 Changeintradeandotherpayables 192 3,37 9 Cash generated from operations 5,425 1,263 Interestreceived 22 25 Interestpaid (799) (641) Incometaxpaid (216) (198) Cash flow from operating activities 4,432 449 Cash flows from investing activities Acquisitionofreserves,property,motorvehicles,plantandequipment (1, 781) (3, 186) Investmentinjointventure - - Disposalofotherinvestments 70 5 253 Acquisitionofotherinvestments (1,630) (1,359) Cash flow from investing activities (2, 706) (4,292) Cash flows from financing activities Borrowingsdrawn 46 61 Borrowingsandleaseliabilitiesrepaid (317) (239) Equitydividendspaid - (10 7) Minoritydividendspaid - - Cash flow from financing activities (271) (285) Net increase in cash and cash equivalents 1,455 (4, 128) Cashandcashequivalentsat1January (1,078) 2,8 7 8 Exchangeadjustment 105 172 Cash and cash equivalents at 31 December 482 (1,0 7 8) Cashandcashequivalentsat31Decembercomprise:  Cashandcashequivalentsaspresentedinthebalancesheet 3,018 3, 7 68  Bankoverdrafts(secured) (2,536) (4,846) 482 (1,0 7 8) Consolidated cash flow statement for the year ended 31 December 2021 60 BisichiPLC Financial statements Basis of accounting Theresultsfortheyearended31 December2021havebeenpreparedin accordancewithUK-adopted internationalaccountingstandardsin conformitywiththerequirementsofthe CompaniesAct2006.Inapplyingthe Group’saccountingpoliciesand assessingareasofjudgmentand estimationmaterialityisappliedas detailedonpage40oftheAudit CommitteeReport.Theprincipal accountingpoliciesaredescribedbelow: TheGroupfinancialstatementsare presentedin£sterlingandallvaluesare roundedtothenearestthousandpounds (£000)exceptwhenotherwisestated. Thefunctionalcurrencyforeachentityin theGroup,andforjointarrangements andassociates,isthecurrencyofthe countryinwhichtheentityhasbeen incorporated.Detailsofwhichcountry eachentityhasbeenincorporatedcanbe foundinNote15forsubsidiariesandNote 14forjointarrangementsandassociates. Theexchangeratesusedintheaccounts wereasfollows: Going concern TheGrouphaspreparedcashflow forecastswhichdemonstratethatthe Grouphassufficientresourcestomeet itsliabilitiesastheyfalldueforatleast thenext12monthsfromdateofsigning. InSouthAfrica,astructuredtradefinance facilitywithAbsaBankLimitedfor R85millionisheldbySisonkeCoal Processing(Pty)Limited,a100% subsidiaryofBlackWattleColliery(Pty) Limited.Thisfacilitycomprisesofa R85millionrevolvingfacilitytocoverthe workingcapitalrequirementsofthe Group’sSouthAfricanoperations.The facilityisrenewableannuallyat25 Januaryandissecuredagainstinventory, debtorsandcashthatareheldinthe Group’sSouthAfricanoperations.The Directorsdonotforeseeanyreasonwhy thefacilitywillnotcontinuetoberenewed atthenextrenewaldate,inlinewithprior periodsandbasedontheirbanking relationships. Thedirectorsexpectthatthecoalmarket conditionsexperiencedbyitsSouth Africancoalminingandprocessing operationsin2021willbesimilargoing into2022.Thedirectorsthereforehavea reasonableexpectationthattheminewill achievepositivelevelsofcashgeneration fortheGroupin2022.Asa consequence,thedirectorsbelievethat theGroupiswellplacedtomanageits SouthAfricanbusinessriskssuccessfully. IntheUK,forecastsdemonstratethatthe Grouphassufficientresourcestomeet itsliabilitiesastheyfalldueforatleast thenext12months,fromtheapprovalof thefinancialstatements,includingthose relatedtotheGroup’sUKLoanfacility outlinedbelow. TheGroupholdsa5yeartermfacilityof £3.9mwithJulianHodgeBankLimitedat aninitialLTVof40%.Theloanissecured againstthecompany’sUKretailproperty portfolio.Theamountrepayableonthe loanatyearendwas£3.9million.The debtpackagehasafiveyeartermandis repayableattheendofthetermin December2024.Inthelastquarterof 2021thebaseinterestrateontheloan changedfromLIBORtotheBankof Englandbaserate.Theoverallinterest costoftheloanis4.00%abovetheBank ofEnglandbaserate.Allcovenantson theloanweremetduringtheyearandthe directorshaveareasonableexpectation thattheGrouphasadequatefinancial resourcesatshortnotice,includingcash andlistedequityinvestments,toensure theexistingfacility’scovenantsaremet onanongoingbasis. DragonRetailPropertiesLimited (“Dragon”),theGroup’s50%ownedjoint venture,holdsaSantanderbankloanof £1.2millionsecuredagainstitsinvestment property,seenote14.Thebankloanof £1.164millionissecuredbywayofafirst chargeonspecificfreeholdpropertyata valueof£2.08million. Group accounting policies for the year ended 31 December 2021 £1 Sterling: Rand £1 Sterling: Dollar 2021 2020 2021 2020 Year-endrate 20.7672 20.0145 1.3706 1.3663 Annualaverage 20.4060 21.0936 1.3685 1.2833 6161BisichiPLC Financial statements Group accounting policies Theinterestcostoftheloanis2.75per centabovethebank’sbaserate.A refinancingofthisloaniscurrently underway.Theloanoriginallyexpiredin October2020buthasbeenextendedto April2022,andthelenderhasofferedto extendthisfurtherifrequired.Dragonhas agreedtermswithanewlenderto refinancethisloaninfullandare expectingtocompletethisshortly. Subsequenttoyearendinthefirst quarterof2022geo-politicaleventsin Ukraineresultedinhigherglobalenergy prices.Althoughthefinaloutcomeofthe eventsinUkraineisuncertain,the Directorsatpresentdonotforeseethe eventshavingasignificantnegative impactontheGroup’sUKandSouth Africanoperationsabilitytoremainin operationfortheforeseeablefuture. Asaresultofthebankingfacilitiesheld aswellastheacceptablelevelsofcash expectedtobeheldbytheGroupover thenext12months,theDirectorsbelieve thattheGrouphasadequateresources tocontinueinoperationalexistencefor theforeseeablefutureandthattheGroup iswellplacedtomanageitsbusiness risks.Thustheycontinuetoadoptthe goingconcernbasisofaccountingin preparingtheannualfinancial statements. International Financial Reporting Standards (IFRS) TheGrouphasadoptedallofthenew andrevisedStandardsandInterpretations issuedbytheInternationalAccounting StandardsBoard(“IASB”)thatare relevanttoitsoperationsandeffectivefor accountingperiodsbeginning1January 2021. Anumberofnewstandards,amendments tostandardsandinterpretationshave beenissuedbutarenotyeteffectivefor theGroup.TheGrouphasnotadopted anyStandardsorInterpretationsin advanceoftherequiredimplementation dates.Theapplicationofthesenew standards,amendmentsand interpretationsarenotexpectedtohavea significantimpactontheGroup’sincome statementorbalancesheet. Wearecommittedtoimprovingdisclosure andtransparencyandwillcontinuetowork withourdifferentstakeholderstoensure theyunderstandthedetailofthese accountingchanges.Wecontinuetoremain committedtoarobustfinancialpolicy. Key judgements and estimates Areaswherekeyestimatesandjudgements areconsideredtohaveasignificanteffect ontheamountsrecognisedinthefinancial statementsinclude: Life of mine and reserves Thedirectorsconsidertheirjudgements andestimatessurroundingthelifeofthe mineanditsreservestohavesignificant effectontheamountsrecognisedinthe financialstatementsandtobeanarea wherethefinancialstatementsare subjecttosignificantestimation uncertainty.Thelifeofmineremainingis currentlyestimatedat8years.Thislifeof mineisbasedontheGroup’sexisting coalreservesincludingreservesacquired butsubjecttoregulatoryapproval.The Groupactivelyseeksnewopportunities toextendthelifeofmineofitsexisting miningoperationsordevelopnew independentminingoperationsinSouth Africa.Thelifeofmineexcludesfuturecoal purchasesandcoalreserveacquisitions. TheGroup’sestimatesofprovenand probablereservesarepreparedutilising theSouthAfricancodeforthereporting ofexplorationresults,mineralresources andmineralreserves(theSAMRECcode) andaresubjecttoassessmentbyan independentCompetentPerson experiencedinthefieldofcoalgeology andspecificallyopencastandpillarcoal extraction.Estimatesofcoalreserves impactassessmentsofthecarryingvalue ofproperty,plantandequipment, depreciationcalculationsand rehabilitationanddecommissioning provisions.Therearenumerous uncertaintiesinherentinestimatingcoal reservesandchangestothese assumptionsmayresultinrestatementof reserves.Theseassumptionsinclude geotechnicalfactorsaswellaseconomic factorssuchascommodityprices, productioncostsandyield. Depreciation, amortisation of mineral rights, mining development costs and plant & equipment Theannualdepreciation/amortisation chargeisdependentonestimates, includingcoalreservesandtherelated lifeofmine,expecteddevelopment expenditureforprobablereserves,the allocationofcertainassetstorelevantore reservesandestimatesofresidualvalues oftheprocessingplant.Thechargecan fluctuatewhentherearesignificant changesinanyofthefactorsor assumptionsused,suchasestimating mineralreserveswhichinturnaffectsthe lifeofmineortheexpectedlifeof reserves.Estimatesofprovenand probablereservesarepreparedbyan independentCompetentPerson. Assessmentsofdepreciation/ amortisationratesagainsttheestimated reservebaseareperformedregularly. Detailsofthedepreciation/amortisation chargecanbefoundinnote12. 62 BisichiPLC Financial statements Group accounting policies Provision for mining rehabilitation including restoration and de-commissioning costs Aprovisionforfuturerehabilitation includingrestorationand decommissioningcostsrequires estimatesandassumptionstobemade aroundtherelevantregulatory framework,thetiming,extentandcosts oftherehabilitationactivitiesandofthe riskfreeratesusedtodeterminethe presentvalueofthefuturecashoutflows. Theprovisions,includingtheestimates andassumptionscontainedtherein,are reviewedregularlybymanagement.The Groupannuallyengagesanindependent experttoassessthecostofrestoration andfinaldecommissioningaspartof management’sassessmentoftheprovision. Detailsoftheprovisionformining rehabilitationcanbefoundinnote21. Impairment Property,plantandequipment representingtheGroup’sminingassetsin SouthAfricaarereviewedforimpairment whenthereareindicatorsofimpairment. Theimpairmenttestisperformedusing theapprovedLifeofMineplanandthose futurecashflowestimatesarediscounted usingassetspecificdiscountratesand arebasedonexpectationsaboutfuture operations.Theimpairmenttestrequires estimatesaboutproductionandsales volumes,commodityprices,provenand probablereserves(asassessedbythe CompetentPerson),operatingcostsand capitalexpendituresnecessarytoextract reservesintheapprovedLifeofMine plan.Changesinsuchestimatescould impactrecoverablevaluesofthese assets.Detailsofthecarryingvalueof property,plantandequipmentcanbe foundinnote12. Theimpairmenttestindicatedsignificant headroomasat31December2021and thereforenoimpairmentisconsidered appropriate.Thekeyassumptions include:coalprices,includingdomestic coalpricesbasedonrecentpricingand assessmentofmarketforecastsfor exportcoal;productionbasedonproven andprobablereservesassessedbythe independentCompetentPersonand yieldsassociatedwithminingareas basedonassessmentsbytheCompetent Personandempiricaldata.An10% reductioninaverageforecastcoalprices ora14%reductioninyieldwouldgive risetoabreakevenscenario.However, thedirectorsconsidertheforecasted yieldlevelsandpricingtobeappropriate andsupportablebestestimates. Fair value measurements of investmentproperties Anassessmentofthefairvalueof investmentproperties,isrequiredtobe performed.Insuchinstances,fairvalue measurementsareestimatedbasedon theamountsforwhichtheassetsand liabilitiescouldbeexchangedbetween marketparticipants.Totheextent possible,theassumptionsandinputs usedtakeintoaccountexternally verifiableinputs.However,such informationisbynaturesubjectto uncertainty.Thefairvalueofinvestment propertyissetoutinnote11,whilstthe carryingvalueofinvestmentsinjoint ventureswhichthemselvesinclude investmentpropertyheldatfairvalueby thejointventureissetoutatnote13. Measurement of development property Thedevelopmentpropertyincluded withintheGroup’sjointventure investmentinWestEalingProjectslimited isconsideredbyManagementtofall outsidethescopeofinvestmentproperty. Apropertyintendedforsaleinthe ordinarycourseofbusinessorinthe processofconstructionordevelopment forsuchsale,forexample,property acquiredexclusivelywithaviewto subsequentdisposalinthenearfutureor fordevelopmentandresaleisexpectedto berecordedundertheaccountingstandard ofIAS2Inventories.Thedirectorshave discussedthecommercialapproachwith thedirectorsoftheunderlyingjoint ventureandthecurrentplanistosellor tocompletethedevelopmentandsell. TheDirectorsthereforeconsiderthekey judgementofaccountingtreatmentofthe propertydevelopmentunderIAS2 Inventoriestobecorrect. IAS2Inventoriesrequirethecapitalised coststobeheldatthelowerofcostor netrealisablevalue.At31December 2021,thecostscapitalisedwithinthe developmentbasedonadirector’s appraisalforthepropertyestimatedthe netrealisablevalueatasurplusoverthe costforthedevelopment.Thedirectors havereviewedtheunderlyinginputsand keyassumptionsmadeintheappraisal andconsiderthemadequate.However, suchinformationisbynaturesubjectto uncertainty.Thecostofthedevelopment propertyissetoutinnote14. Basis of consolidation TheGroupaccountsincorporatethe accountsofBisichiPLCandallofits subsidiaryundertakings,togetherwith theGroup’sshareoftheresultsofitsjoint ventures.Non-controllinginterestsin subsidiariesarepresentedseparately fromtheequityattributabletoequity ownersoftheparentcompany.On acquisitionofanon-whollyowned subsidiary,thenon-controlling shareholders’interestsareinitially measuredatthenon-controllinginterests’ proportionateshareofthefairvalueof thesubsidiariesnetassets. 6363BisichiPLC Financial statements Group accounting policies Thereafter,thecarryingamountof non-controllinginterestsistheamountof thoseinterestsatinitialrecognitionplus thenon-controllinginterests’shareof subsequentchangesinequity.For subsequentchangesinownershipina subsidiarythatdonotresultinalossof control,theconsiderationpaidor receivedisrecognisedentirelyinequity. Thedefinitionofcontrolassumesthe simultaneousfulfilmentofthefollowing threecriteria: • • Theparentcompanyholdsdecision- makingpowerovertherelevant activitiesoftheinvestee, • • Theparentcompanyhasrightsto variablereturnsfromtheinvestee,and • • Theparentcompanycanuseits decision-makingpowertoaffectthe variablereturns. Investeesareanalysedfortheirrelevant activitiesandvariablereturns,andthe linkbetweenthevariablereturnsandthe extenttowhichtheirrelevantactivities couldbeinfluencedinordertoensurethe definitioniscorrectlyapplied. Revenue TheGroup’srevenuefromcontractswith customers,asdefinedunderIFRS15, includescoalrevenueandservicecharge income. Coalrevenueisderivedprincipallyfrom exportrevenueanddomesticrevenue. Bothexportrevenueanddomestic revenueisrecognisedwhenthecustomer hasalegallybindingobligationtosettle underthetermsofthecontractwhenthe performanceobligationshavebeen satisfied,whichisoncecontrolofthe goodshastransferredtothebuyeratthe deliverypoint.Forexportrevenuethisis generallyrecognisedwhentheproductis deliveredtotheexportterminallocation specifiedinthecustomercontract,at whichpointcontrolofthegoodshave beentransferredtothecustomer.For domesticcoalrevenuesthisisgenerally recognisedoncollectionbythecustomer fromthemineorfromthemine’srail sidingwhenloadedintotransport,where thecustomerpaysthetransportation costs.Fulfilmentcoststosatisfythe performanceobligationsofcoalrevenues suchastransportandloadingcosts bornebytheGroupfromtheminetothe deliverypointarerecodedinoperating costs. Coalrevenueismeasuredbasedon considerationspecifiedinthecontract withacustomeronapermetrictonne basis.Bothexportanddomestic contractsaretypicallyonaspecifiedcoal volumebasisandlessthanayearin duration.Exportcontractsaretypically linkedtothepriceofFreeonBoard(FOB) CoalfromRichardsBayCoalTerminal (API4price).Domesticcontractsare typicallylinkedtoacontractualprice agreed. Servicechargesrecoverablefromtenants arerecognisedovertimeastheserviceis rendered. Leasepropertyrentalincome,asdefined underIFRS16,isrecognisedintheGroup incomestatementonastraight-linebasis overthetermofthelease.Thisincludes theeffectofleaseincentives. Expenditure Expenditureisrecognisedinrespectof goodsandservicesreceived.Wherecoal ispurchasedfromthirdpartiesatpointof extractiontheexpenditureisonly recognisedwhenthecoalisextracted andallofthesignificantrisksand rewardsofownershiphavebeen transferred. Investment properties Investmentpropertiescomprisefreehold andlongleaseholdlandandbuildings. Investmentpropertiesarecarriedatfair valueinaccordancewithIAS40 ‘InvestmentProperties’.Propertiesare recognisedasinvestmentproperties whenheldforlong-termrentalyields,and afterconsiderationhasbeengiventoa numberoffactorsincludinglengthof lease,qualityoftenantandcovenant, valueoflease,managementintentionfor futureuseofproperty,planningconsents andpercentageofpropertyleased. Investmentpropertiesarerevalued annuallybyprofessionalexternal surveyorsandincludedinthebalance sheetattheirfairvalue.Gainsorlosses arisingfromchangesinthefairvaluesof assetsarerecognisedintheconsolidated incomestatementintheperiodtowhich theyrelate.InaccordancewithIAS40, investmentpropertiesarenot depreciated.Thefairvalueofthehead leasesisthenetpresentvalueofthe currentheadrentpayableonleasehold propertiesuntiltheexpiryofthelease. Mining reserves, plant and equipment and development cost Thecostofproperty,plantandequipment comprisesitspurchasepriceandany costsdirectlyattributabletobringingthe assettothelocationandcondition necessaryforittobecapableof operatinginaccordancewithagreed specifications.Freeholdlandincluded withinminingreservesisnotdepreciated. Otherproperty,plantandequipmentis statedathistoricalcostlessaccumulated depreciation.Thecostrecognised includestherecognitionofany decommissioningassetsrelatedto property,plantandequipment. 64 BisichiPLC Financial statements Group accounting policies 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. 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 25–33percentperannum Office equipment 10–33percentperannum Provisions and contingent liabilities Provisionsarerecognisedwhenthe Grouphasapresentobligationasaresult ofapasteventwhichitisprobablewill resultinanoutflowofeconomicbenefits thatcanbereliablyestimated. Aprovisionforrehabilitationofthemine isinitiallyrecordedatpresentvalueand thediscountingeffectisunwoundover timeasafinancecost.Changestothe provisionasaresultofchangesin estimatesarerecordedasanincrease/ decreaseintheprovisionandassociated decommissioningasset.The decommissioningassetisdepreciatedin linewiththeGroup’sdepreciationpolicy overthelifeofmine.Theprovision includestherestorationofthe underground,opencast,surface operationsandde-commissioningofplant andequipment.Thetimingandfinalcost oftherehabilitationisuncertainandwill dependonthedurationoftheminelife andthequantitiesofcoalextractedfrom thereserves. 6565BisichiPLC Financial statements Group accounting policies Managementexercisesjudgmentin measuringtheGroup’sexposuresto contingentliabilitiesthroughassessing thelikelihoodthatapotentialclaimor liabilitywillariseandwherepossiblein quantifyingthepossiblerangeoffinancial outcomes.Wherethereisadisputeand whereareliableestimateofthepotential liabilitycannotbemade,orwherethe Group,basedonlegaladvice,considers thatitisimprobablethattherewillbean outflowofeconomicresources,no provisionisrecognised. Employee benefits Share based remuneration Thecompanyoperatesashareoption scheme.Thefairvalueoftheshare optionschemeisdeterminedatthedate ofgrant.Thisfairvalueisthenexpensed onastraight-linebasisoverthevesting period,basedonanestimateofthe numberofsharesthatwilleventuallyvest. Thefairvalueofoptionsgrantedis calculatedusingabinomialorBlack- Scholes-Mertonmodel.Paymentsmade toemployeesonthecancellationor settlementofoptionsgrantedare accountedforastherepurchaseofan equityinterest,i.e.asadeductionfrom equity.Detailsoftheshareoptionsin issuearedisclosedintheDirectors’ RemunerationReportonpage32under theheadingShareoptionschemeswhich iswithintheauditedpartofthatreport. Pensions TheGroupoperatesadefinedcontribution pensionscheme.Thecontributions payabletotheschemeareexpensedinthe periodtowhichtheyrelate. Foreign currencies Monetaryassetsandliabilitiesare translatedatyearendexchangeratesand theresultingexchangeratedifferences areincludedintheconsolidatedincome statementwithintheresultsofoperating activitiesifarisingfromtradingactivities, includinginter-companytradingbalances andwithinfinancecost/incomeifarising fromfinancing. Forconsolidationpurposes,incomeand expenseitemsareincludedinthe consolidated income statement at averagerates,andassetsandliabilities aretranslatedatyearendexchangerates. Translationdifferencesarisingon consolidationarerecognisedinother comprehensiveincome.Foreignexchange differencesonintercompanyloansare recordedinothercomprehensiveincome whentheloansarenotconsideredas tradingbalancesandarenotexpectedto berepaidintheforeseeablefuture.Where foreignoperationsaredisposedof,the cumulativeexchangedifferencesofthat foreignoperationarerecognisedinthe consolidatedincomestatementwhenthe gainorlossondisposalisrecognised. Transactionsinforeigncurrenciesare translatedattheexchangeraterulingon thetransactiondate. Financial instruments Financialassetsandfinancialliabilitiesare recognisedintheGroup’sconsolidated statementoffinancialpositionwhenthe Groupbecomesapartytothecontractual provisionsoftheinstrument. Financial assets Financialassetsareclassifiedaseither financialassetsatamortisedcost,atfair valuethroughothercomprehensive income(“FVTOCI”)oratfairvaluethrough profitorloss(“FVPL”)dependinguponthe businessmodelformanagingthe financialassetsandthenatureofthe contractualcashflowcharacteristicsof thefinancialasset. Alossallowanceforexpectedcredit lossesisdeterminedforallfinancial assets,otherthanthoseatFVPL,atthe endofeachreportingperiod.TheGroup appliesasimplifiedapproachtomeasure thecreditlossallowancefortrade receivablesusingthelifetimeexpected creditlossprovision.Thelifetimeexpected creditlossisevaluatedforeachtrade receivabletakingintoaccountpayment history,paymentsmadesubsequentto yearendandpriortoreporting,past defaultexperienceandtheimpactofany otherrelevantandcurrentobservabledata. TheGroupappliesageneralapproachon allotherreceivablesclassifiedasfinancial assets.Thegeneralapproachrecognises lifetimeexpectedcreditlosseswhenthere hasbeenasignificantincreaseincredit risksinceinitialrecognition. TheGroupderecognisesafinancialasset whenthecontractualrightstothecash flowsfromtheassetexpire,orwhenit transfersthefinancialassetand substantiallyalltherisksandrewardsof ownershipoftheassettoanotherparty. TheGroupderecognisesfinancial liabilitieswhentheGroup’sobligationsare discharged,cancelledorhaveexpired. Bank loans and overdrafts Bankloansandoverdraftsareincludedas financialliabilitiesontheGroupbalance sheetattheamountsdrawnonthe particularfacilitiesnetoftheunamortised costoffinancing.Interestpayableon thosefacilitiesisexpensedasfinance costintheperiodtowhichitrelates. 66 BisichiPLC Financial statements Group accounting policies Lease liabilities Foranynewcontractsenteredintothe Groupconsiderswhetheracontractis,or containsalease.Aleaseisdefinedas‘a contract,orpartofacontract,that conveystherighttouseanasset(the underlyingasset)foraperiodoftimein exchangeforconsideration’.Toapplythis definitiontheGroupassesseswhetherthe contractcontainsanidentifiedassetand hastherighttoobtainsubstantiallyallof theeconomicbenefitsfromuseofthe identifiedassetthroughouttheperiodof use. Atleasecommencementdate,theGroup recognisesaright-of-useassetanda leaseliabilityonthebalancesheet. Right-of-useassets,excludingproperty headleases,havebeenincludedin property,plantandequipmentandare measuredatcost,whichismadeupofthe initialmeasurementoftheleaseliability andanyinitialdirectcostsincurredbythe Group.TheGroupdepreciatesthe right-of-useassetsonastraight-linebasis fromtheleasecommencementdateto theearlieroftheendoftheusefullifeof theright-of-useassetortheendofthe leaseterm. Atthecommencementdate,theGroup measurestheleaseliabilityatthepresent valueoftheleasepaymentsunpaidat thatdate,discountedusingtheinterest rateimplicitintheleaseifthatrateis readilyavailableortheGroup’s incrementalborrowingrate.Liabilities relatingtoshorttermleasesareincluded withintradeandotherpayables. Leasepaymentsincludedinthe measurementoftheleaseliabilityare madeupoffixedpaymentsandvariable paymentsbasedonanindexorrate, initiallymeasuredusingtheindexorrate atthecommencementdate.Subsequent toinitialmeasurement,theliabilitywillbe reducedforpaymentsmadeandincreased forinterest.Itisre-measuredtoreflect anyreassessmentormodification.When theleaseliabilityisre-measured,the correspondingadjustmentisreflectedin theright-of-useasset,orprofitandlossif theright-of-useassetisalreadyreduced tozero. Leaseliabilitiesthatariseforinvestment propertiesheldunderaleaseholdinterest andaccountedforasinvestmentproperty areinitiallycalculatedasthepresentvalue oftheminimumleasepayments,reducing insubsequentreportingperiodsbythe apportionmentofpaymentstothelessor. TheGrouphaselectedtoaccountfor short-termleasesandleasesoflow-value assetsusingthepracticalexpedients availableinIFRS16.Insteadofrecognising aright-of-useassetandleaseliability,the paymentsinrelationtotheseare recognisedasanexpenseinprofitorloss onastraight-linebasisovertheleaseterm. Investments Currentfinancialassetinvestmentsand otherinvestmentsclassifiedasnon- current(“Theinvestments”)compriseof sharesinlistedcompanies.The investmentsaremeasuredatfairvalue. Anychangesinfairvaluearerecognised intheprofitorlossaccountand accumulatedinretainedearnings. Trade receivables Tradereceivablesareaccountedforat amortisedcost.Tradereceivablesdonot carryanyinterestandarestatedattheir nominalvalueasreducedbyappropriate expectedcreditlossallowancesfor estimatedrecoverableamountsasthe interestthatwouldberecognisedfrom discountingfuturecashpaymentsover theshortpaymentperiodisnot consideredtobematerial. Trade payables Tradepayablescostarenotinterest bearingandarestatedattheirnominal value,astheinterestthatwouldbe recognisedfromdiscountingfuturecash paymentsovertheshortpaymentperiod isnotconsideredtobematerial. Other financial assets and liabilities TheGroup’sotherfinancialassetsand liabilitiesnotdisclosedaboveare accountedforatamortisedcost. Joint ventures Investmentsinjointventures,beingthose entitiesoverwhoseactivitiestheGroup hasjointcontrol,asestablishedby contractualagreement,areincludedat costtogetherwiththeGroup’sshareof post-acquisitionreserves,onanequity basis.Dividendsreceivedarecredited againsttheinvestment.Jointcontrolis thecontractuallyagreedsharingofcontrol overanarrangement,whichexistsonly whendecisionsaboutrelevantstrategic and/orkeyoperatingdecisionsrequire unanimousconsentofthepartiessharing control.Controloverthearrangementis assessedbytheGroupinaccordance withthedefinitionofcontrolunderIFRS 10.Loanstojointventuresareclassified asnon-currentassetswhentheyarenot expectedtobereceivedinthenormal workingcapitalcycle.Tradingreceivables andpayablestojointventuresare classifiedascurrentassetsandliabilities. 6767BisichiPLC Financial statements Group accounting policies Inventories Inventoriesarestatedatthelowerofcost andnetrealisablevalue.Costincludes materials,directlabourandoverheads relevanttothestageofproduction.Cost isdeterminedusingtheweightedaverage method.Netrealisablevalueisbasedon estimatedsellingpricelessallfurther costsofcompletionandallrelevant marketing,sellinganddistributioncosts. Impairment Whenevereventsorchangesin circumstanceindicatethatthecarrying amountofanassetmaynotbe recoverableanassetisreviewedfor impairment.Thisincludesmining reserves,plantandequipmentandnet investmentsinjointventures.Areview involvesdeterminingwhetherthecarrying amountsareinexcessoftheir recoverableamounts.Anasset’s recoverableamountisdeterminedasthe higherofitsfairvaluelesscostsof disposalanditsvalueinuse.Such reviewsareundertakenonanasset-by- assetbasis,exceptwhereassetsdonot generatecashflowsindependentofother assets,inwhichcasethereviewis undertakenonacashgeneratingunit basis. Ifthecarryingamountofanasset exceedsitsrecoverableamountan asset’scarryingvalueiswrittendownto itsestimatedrecoverableamount(being thehigherofthefairvaluelesscostto sellandvalueinuse)ifthatislessthan theasset’scarryingamount.Anychange incarryingvalueisrecognisedinthe comprehensiveincomestatement. Deferred tax Deferredtaxisthetaxexpectedtobe payableorrecoverableondifferences betweenthecarryingamountsofassets andliabilitiesinthefinancialstatements andthecorrespondingtaxbasesusedin thetaxcomputations,andisaccounted forusingthebalancesheetliability method.Deferredtaxliabilitiesare generallyrecognisedforalltaxable temporarydifferencesanddeferredtax assetsarerecognisedtotheextentthatit isprobablethattaxableprofitswillbe availableagainstwhichdeductible temporarydifferencescanbeutilised.In respectofthedeferredtaxonthe revaluationsurplus,thisiscalculatedon thebasisofthechargeablegainsthat wouldcrystalliseonthesaleofthe investmentportfolioasatthereporting date.Thecalculationtakesaccountof indexationonthehistoricalcostofthe propertiesandanyavailablecapital losses. Deferredtaxiscalculatedatthetaxrates thatareexpectedtoapplyintheperiod whentheliabilityissettledortheassetis realised.Deferredtaxischargedor creditedintheGroupincomestatement, exceptwhenitrelatestoitemschargedor crediteddirectlytoothercomprehensive income,inwhichcaseitisalsodealtwith inothercomprehensiveincome. Dividends Dividendspayableontheordinaryshare capitalarerecognisedasaliabilityinthe periodinwhichtheyareapproved. Cash and cash equivalents Cashcomprisescashinhandand on-demanddeposits.Cashandcash equivalentscomprisesshort-term,highly liquidinvestmentsthatarereadily convertibletoknownamountsofcash andwhicharesubjecttoaninsignificant riskofchangesinvalueandoriginal maturitiesofthreemonthsorless.The cashandcashequivalentsshowninthe cashflowstatementarestatednetof bankoverdraftsthatarerepayableon demandasperIAS7.Thisincludesthe structuredtradefinancefacilityheldin SouthAfricaasdetailedinnote22. Thesefacilitiesareconsideredtoforman integralpartofthetreasurymanagement oftheGroupandcanfluctuatefrom positivetonegativebalancesduringthe period. Segmental reporting Formanagementreportingpurposes,the Groupisorganisedintobusiness segmentsdistinguishablebyeconomic activity.TheGroup’smaterialbusiness segmentsareminingactivitiesand investmentproperties.Thesebusiness segmentsaresubjecttorisksandreturns thataredifferentfromthoseofother businesssegmentsandaretheprimary basisonwhichtheGroupreportsits segmentinformation.Thisisconsistent withthewaytheGroupismanagedand withtheformatoftheGroup’sinternal financialreporting.Significantrevenue fromtransactionswithanyindividual customer,whichmakesup10percentor moreofthetotalrevenueoftheGroup,is separatelydisclosedwithineach segment.Allcoalexportsaresalesto coaltradersatRichardBay’sterminalin SouthAfricawiththerisksandrewards passingtothecoaltraderattheterminal. Whilstthecoaltraderswillultimatelysell thecoalontheinternationalmarketsthe Companyhasnovisibilityoverthe ultimatedestinationofthecoal. Accordingly,theexportsalesare recordedasSouthAfricanrevenue. 68 BisichiPLC Financial statements 1. SEGMENTAL REPORTING 2021 Business analysis Mining £’000 Property £’000 Other £’000 Total £’000 SignificantrevenuecustomerA 23,206 - - 23,206 SignificantrevenuecustomerB 12,656 - - 12,656 SignificantrevenuecustomerC 6,169 - - 6,169 Otherrevenue 7,195 1,119 175 8,489 Segment revenue 49,226 1,119 175 50,520 Operating(loss)/profitbeforefairvalueadjustments &exchangemovements 1,695 592 170 2,457 Revaluationofinvestments&exchangemovements (121) 255 812 946 Operating profit and segment result 1,574 847 982 3,403 Segment assets 17,350 12,242 4,319 33,911 Unallocated assets  –Non-currentassets 48  –Cash&cashequivalents 3,018 Total assets excluding investment in joint ventures and assets held for sale 36,977 Segmentliabilities (12,227) (1,522) (5) (13,754) Borrowings (2,680) (3,839) - (6,519) Total liabilities (14,907) (5,361) (5) (20,273) Net assets 16,704 Non segmental assets  –Investmentinjointventures 1,131 Net assets as per balance sheet 17,835 Geographic analysis United Kingdom £’000 South Africa £’000 Total £’000 Revenue 1,294 49,222 50,516 Operatingprofit/(loss)andsegmentresult 687 2,716 3,403 Depreciation (32) (2,539) (2,571) Non-currentassetsexcludinginvestments 10,748 9,018 19,766 Total net assets 14,400 3,435 17,835 Capitalexpenditure 35 1,781 1,816 Notes to the financial statements for the year ended 31 December 2021 6969BisichiPLC Financial statements Notes to the financial statements 1. SEGMENTAL REPORTING CONTINUED 2020 Business analysis Mining £’000 Property £’000 Other £’000 Total £’000 SignificantrevenuecustomerA 9,042 - - 9,042 SignificantrevenuecustomerB 7,588 - - 7,588 SignificantrevenuecustomerC 6,291 - - 6,291 Otherrevenue 5,646 1,181 57 6,884 Segment revenue 28,567 1,181 57 29,805 Operating(loss)/profitbeforefairvalueadjustments &exchangemovements (4,014) 658 52 (3,304) Revaluationofinvestments&exchangemovements 39 (1,295) 67 (1,189) Operating profit and segment result (3,975) (637) 119 (4,493) Segment assets 19,110 11,891 2,581 33,582 Unallocated assets  –Non-currentassets 45  –Cash&cashequivalents 3,768 Total assets excluding investment in joint ventures and assets held for sale 37,395 Segmentliabilities (11,919) (1,471) (19) (13,409) Borrowings (5,253) (3,799) - (9,052) Total liabilities (17,172) (5,270) (19) (22,461) Net assets 14,934 Non segmental assets  –Investmentinjointventures 1,255 Net assets as per balance sheet 16,189 70 BisichiPLC Financial statements Notes to the financial statements 1. SEGMENTAL REPORTING CONTINUED Geographic analysis United Kingdom £’000 South Africa £’000 Total £’000 Revenue 1,238 28,567 29,805 Operatingprofit/(loss)andsegmentresult (931) (3,562) (4,493) Depreciation (21) (2,172) (2,193) Non-currentassetsexcludinginvestments 10,516 10,129 20,645 Total net assets 13,279 2,910 16,189 Capitalexpenditure 36 3,435 3,471 2. REVENUE 2021 £’000 2020 £’000 Revenue from contracts with customers: Coalsalesandprocessing 49,226 28,567 Servicechargesrecoverablefromtenants 130 156 Other: Rental income 989 1,025 Otherrevenue 175 57 Revenue 50,520 29,805 Segmentalminingrevenueisderivedprincipallyfromcoalsalesandisrecognisedoncethecontrolofthegoodshastransferred fromtheGrouptothebuyer.Segmentalpropertyrevenueisderivedfromrentalincomeandservicechargesrecoverablefrom tenants.Thisisconsistentwiththerevenueinformationdisclosedforeachreportablesegment(seenote1).Rentalincomeis recognisedonastraight-linebasisoverthetermofthelease.Servicechargesrecoverablefromtenantsarerecognisedovertime astheserviceisrendered.Revenueismeasuredbasedontheconsiderationspecifiedinthecontractwiththecustomerortenant. 3. OPERATING COSTS 2021 £’000 2020 £’000 Mining 38,008 24,645 Property 400 342 Cost of sales 38,408 24,987 Administration 9,655 8,122 Operating costs 48,063 33,109 Thedirectpropertycostsare:  Directpropertyexpense 351 272 Bad debts 49 70 400 342 Operatingcostsaboveincludedepreciationof£2,571,000(2020:£2,193,000). 7171BisichiPLC Financial statements Notes to the financial statements 4. (LOSS)/GAIN ON REVALUATION OF INVESTMENT PROPERTIES Thereconciliationoftheinvestment(deficit)/surplustothegainonrevaluationofinvestmentpropertiesintheincomestatementis setoutbelow: 2021 £’000 2020 £’000 Investmentdeficit 255 (1,313) Gain/(Loss)onvaluationmovementinrespectofheadleasepayments (26) 18 Loss on revaluation of investment properties 229 (1,295) 5. PROFIT BEFORE TAXATION Profitbeforetaxationisarrivedataftercharging: 2021 £’000 2020 £’000 Staff costs (see note 29) 7,491 5,890 Depreciation 2,571 2,193 Exchangeloss (121) 39 Feespayabletothecompany’sauditorfortheauditofthecompany’sannualaccounts 51 84 Feespayabletothecompany’sauditoranditsassociatesforotherservices:  Theauditofthecompany’ssubsidiariespursuanttolegislation 37 26  Auditrelatedservices - 4  Non-auditrelatedservices - 2 Decrease/(Increase)invalueofInventory 2,105 (1,128) Thedirectorsconsidertheauditorswerebestplacedtoprovidetheabovenon-auditandauditrelatedserviceswhichreferto regulatorymatters.Theauditcommitteereviewsthenatureandextentofnon-auditservicestoensurethatindependenceis maintained. 6. DIRECTORS’ EMOLUMENTS Directors’emolumentsareshownintheDirectors’remunerationreportonpage32whichiswithintheauditedpartofthatreport. 7. INTEREST PAYABLE 2021 £’000 2020 £’000 Onbankoverdraftsandbankloans 554 547 Unwindingofdiscount - - Leaseliabilities 29 26 Otherinterestpayable 216 68 Interest payable 799 641 72 BisichiPLC Financial statements Notes to the financial statements 8. TAXATION 2021 £’000 2020 £’000 (a) Based on the results for the year: Currenttax-UK - - Currenttax-Overseas 750 12 Corporationtax-adjustmentinrespectofprioryear–UK - 2 Currenttax 750 14 Deferredtax 45 (1,416) Total tax in income statement charge 795 (1,402) (b) Factors affecting tax charge for the year: ThecorporationtaxassessedfortheyearisdifferentfromthatatthestandardrateofcorporationtaxintheUnitedKingdomof 19.00%(2020:19%). Thedifferencesareexplainedbelow: Profit/Lossonordinaryactivitiesbeforetaxation 2,501 (5,196) Taxonprofit/lossonordinaryactivitiesat19.00%(2020:19.00%) 475 (987) Effectsof: Expensesnotdeductiblefortaxpurposes 49 23 Capitalgains(losses)ondisposal 20 - Adjustmenttotaxrate 260 (360) Otherdifferences (9) (80) Adjustmentinrespectofprioryears - 2 Total tax in income statement (credit) / charge 795 (1,402) (c) Analysis of United Kingdom and overseas tax: UnitedKingdomtaxincludedinabove: Currenttax - - Deferredtax 152 (312) 152 (312) Overseastaxincludedinabove: Currenttax 750 12 Adjustmentinrespectofprioryears - 2 Currenttax 750 14 Deferredtax (107) (1,104) 643 (1,090) OverseastaxisderivedfromtheGroup’sSouthAfricanminingoperation.Refertonote1forareportontheGroups’miningand SouthAfricansegmentalreporting.TheadjustmenttotaxratearisesduetothedeferredtaxrateusedintheUKfortheyearof 25%(2020:19%)andthecorporationtaxrateassessedinSouthAfricafortheyearof28%(2020:28%)beingdifferentfrom thecorporationtaxrateintheUK. 7373BisichiPLC Financial statements Notes to the financial statements 9. SHAREHOLDER DIVIDENDS 2021 Per share 2021 £’000 2020 Pershare 2020 £’000 Dividendspaidduringtheyearrelatingtothepriorperiod - - 1.00p 107 Dividendsrelatingtothecurrentperiod: Proposeddividendfor2021 4p 427 - - Proposedspecialdividendfor2021 2p 214 - - 6p 641 ThedividendsrelatingtothecurrentperiodarenotaccountedforuntiltheyhavebeenapprovedattheAnnualGeneralMeeting. 10. PROFIT/(LOSS) AND DILUTED PROFIT/(LOSS) PER SHARE Boththebasicanddilutedprofit/(loss)persharecalculationsarebasedonaprofitaftertaxof£1,491,000(2020:lossof £3,354,000).Thebasicprofit/(loss)persharehasbeencalculatedonaweightedaverageof10,676,839(2020:10,676,839) ordinarysharesbeinginissueduringtheperiod.Thedilutedprofitpersharehasbeencalculatedontheweightedaveragenumber ofsharesinissueof10,676,839(2020:10,676,839)plusthedilutivepotentialordinarysharesarisingfromshareoptionsof21,923 (2020:Nil)totalling10,698,762(2020:10,676,839). 11. INVESTMENT PROPERTIES Freehold £’000 Long Leasehold £’000 Head Lease £’000 Total £’000 Valuationat1January2021 7, 875 2,395 201 10,471 Revaluation 355 (100) (26) 229 Valuation at 31 December 2021 8,230 2,295 175 10,700 Valuation at 1 January 2020 9,020 2,545 183 11,748 Revaluation (1,145) (150) 18 (1,277) Valuation at 31 December 2020 7, 8 7 5 2,395 201 10,471 Historicalcost At 31 December 2021 5,851 728 - 6,579 At31December2020 5,851 728 - 6,579 Longleaseholdpropertiesarethoseforwhichtheunexpiredtermatthebalancesheetdateisnotlessthan50years.All investmentpropertiesareheldforuseinoperatingleasesandallpropertiesgeneratedrentalincomeduringtheperiod. FreeholdandLongLeaseholdpropertieswereexternallyprofessionallyvaluedat31Decemberonanopenmarketbasisby: 2021 £’000 2020 £’000 CarterTowler 10,525 10,270 ThevaluationswerecarriedoutinaccordancewiththeStatementsofAssetValuationandGuidanceNotespublishedbyTheRoyal InstitutionofCharteredSurveyors. EachyearexternalvaluersareappointedbytheExecutiveDirectorsonbehalfoftheBoard.Thevaluersareselectedbasedupon theirknowledge,independenceandreputationforvaluingassetssuchasthoseheldbytheGroup. 74 BisichiPLC Financial statements Notes to the financial statements 11. INVESTMENT PROPERTIES CONTINUED ValuationsareperformedannuallyandareperformedconsistentlyacrossallinvestmentpropertiesintheGroup’sportfolio.At eachreportingdateappropriatelyqualifiedemployeesoftheGroupverifyallsignificantinputsandreviewthecomputational outputs.ValuerssubmittheirreporttotheBoardontheoutcomeofeachvaluationround. Valuationstakeintoaccounttenure,leasetermsandstructuralcondition.Theinputsunderlyingthevaluationsincludemarketrent orbusinessprofitability,likelyincentivesofferedtotenants,forecastgrowthrates,yields,EBITDA,discountrates,construction costsincludinganyspecificsitecosts(forexamplesection106),professionalfees,developer’sprofitincludingcontingencies, planningandconstructiontimelines,leaseregearcosts,planningriskandsalespricesbasedonknownmarkettransactionsfor similarpropertiestothosebeingvalued. Valuationsarebasedonwhatisdeterminedtobethehighestandbestuse.Whenconsideringthehighestandbestuseavaluer willconsider,onapropertybypropertybasis,itsactualandpotentialuseswhicharephysically,legallyandfinanciallyviable. Wherethehighestandbestusediffersfromtheexistinguse,thevaluerwillconsiderthecostandlikelihoodofachievingand implantingthischangeinarrivingatitsvaluation. ThereareoftenrestrictionsonFreeholdandLeaseholdpropertywhichcouldhaveamaterialimpactontherealisationofthese assets.Themostsignificantoftheseoccurwhenplanningpermissionorleaseextensionandrenegotiationofusearerequiredor whenacreditfacilityisinplace.Theserestrictionsarefactoredintheproperty’svaluationbytheexternalvaluer. IFRS13setsoutavaluationhierarchyforassetsandliabilitiesmeasuredatfairvalueasfollows: Level1: valuationbasedoninputsonquotedmarketpricesinactivemarkets Level2: valuationbasedoninputsotherthanquotedpricesincludedwithinlevel1thatmaximisetheuseofobservabledata directlyorfrommarketpricesorindirectlyderivedfrommarketprices. Level3: whereoneormoresignificantinputstovaluationsarenotbasedonobservablemarketdata Theinter-relationshipbetweenkeyunobservableinputsandtheGroups’propertiesisdetailedinthetablebelow: Class of property Level 3 Valuation technique Key unobservable inputs Carrying/ fair value 2021 £’000 Carrying/ fairvalue 2020 £’000 Range (weighted average) 2021 Range (weighted average) 2020 Freehold–external valuation Incomecapitalisation Estimatedrental valuepersqftp.a 8,230 7, 8 75 £6 – £29 (£21) £6–£27 (£19) EquivalentYield 8.9% – 14.7% (11.2%) 9.4%– 16.7% (11.8%) Longleasehold– externalvaluation Incomecapitalisation Estimatedrental valuepersqftp.a 2,295 2,395 £9 – £9 (£9) £8–£8 (£8) Equivalentyield 9.8% – 9.8% (9.8%) 8.9%–8.9% (8.9%) At 31 December 2021 10,525 10,270 Thereareinterrelationshipsbetweenalltheseinputsastheyaredeterminedbymarketconditions.Theexistenceofanincreasein morethanoneinputwouldbetomagnifytheinputonthevaluation.Theimpactonthevaluationwillbemitigatedbythe interrelationshipoftwoinputsinoppositedirections,forexample,anincreaseinrentmaybeoffsetbyanincreaseinyield. 7575BisichiPLC Financial statements Notes to the financial statements 11. INVESTMENT PROPERTIES CONTINUED Thetablebelowillustratestheimpactofchangesinkeyunobservableinputsonthecarrying/fairvalueoftheGroup’sproperties: Estimated rental value 10% increase or decrease Equivalent yield 25 basis point contrac- tion or expansion 2021 £’000 2020 £’000 2021 £’000 2020 £’000 Freehold–externalvaluation 823 / (823) 788/(788) 203 / (193) 185/(177) LongLeasehold–externalvaluation 230 / (230) 240/(240) 60 / (57) 69/(65) 12. MINING RESERVES, PLANT AND EQUIPMENT Mining reserves £’000 Mining equipment anddevelop- ment costs £’000 Motor vehicles £’000 Office equipment £’000 Total £’000 Costat1January2021 1,138 28,371 372 174 30,055 Exchangeadjustment (41) (1,059) (11) (4) (1,115) Additions - 1,772 35 9 1,816 Disposals - (21) - - (21) Cost at 31 December 2021 1,097 29,063 396 179 30,735 Accumulateddepreciationat1January2021 1,123 18,399 215 144 19,881 Exchangeadjustment (41) (710) (7) (3) (761) Chargefortheyear 7 2,499 56 9 2,571 Disposals - (21) - - (21) Accumulated depreciation at 31 December 2021 1,089 20,167 264 150 21,670 Net book value at 31 December 2021 8 8,896 132 29 9,065 Costat1January2020 1,226 26,674 361 175 28,436 Exchangeadjustment (88) (1,733) (25) (6) (1,852) Additions - 3,430 36 5 3,471 Disposals - - - - - Cost at 31 December 2020 1,138 28,371 372 174 30,055 Accumulateddepreciationat1January2020 1,212 17,405 171 140 18,928 Exchangeadjustment (89) (1,136) (10) (5) (1,240) Chargefortheyear - 2,130 54 9 2,193 Disposals - - - - - Accumulated depreciation at 31 December 2020 1,123 18,399 215 144 19,881 Net book value at 31 December 2020 15 9,972 157 30 10,174 76 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: Mining Equipment anddevelop- ment costs £’000 Motor vehicles £’000 Total £’000 Netbookvalueat1January2021 263 45 308 Additions - 35 35 Exchangeadjustment (6) - (6) Depreciation (38) (32) (70) Net book value at 31 December 2021 219 48 267 Netbookvalueat1January2020 52 29 81 Additions 248 36 284 Exchangeadjustment (18) - (18) Depreciation (19) (20) (39) Net book value at 31 December 2020 263 45 308 13. INVESTMENTS HELD AS NON-CURRENT ASSETS 2021 Net investment in joint ventures assets £’000 2021 Other £’000 2020 Net investment injoint ventures assets £’000 2020 Other £’000 At1January 1,255 1,746 1,342 287 Shareof(loss)/gainininvestment - 701 - 201 Additions - 1,630 - 1,359 Disposals - (446) - (101) Shareof(loss)/gaininjointventures (125) - (87) - Net assets at 31 December 1,130 3,631 1,255 1,746 7777BisichiPLC Financial statements Notes to the financial statements 13. INVESTMENTS HELD AS NON-CURRENT ASSETS CONTINUED Otherinvestmentscompriseofthefollowing: 2021 £’000 2020 £’000 Netbookvalueofunquotedinvestments - - NetbookandmarketvalueofreadilyrealisableinvestmentslistedonstockexchangesintheUnited Kingdom 1,564 959 Netbookandmarketvalueofreadilyrealisableinvestmentslistedonoverseasstockexchanges 2,067 787 3,631 1,746 14. JOINT VENTURES Development Physics Limited ThecompanyownsathirdoftheissuedsharecapitalofDevelopmentPhysicsLimited,anunlistedpropertydevelopmentcompany. Atyearend,thenegativecarryingvalueoftheinvestmentheldbytheGroupwas£3,000(2020:£Nil).Theremainingtwothirdsis heldequallybyLondon&AssociatedPropertiesPLCandMetropropRealEstateLtd.DevelopmentPhysicsLimitedisincorporated inEnglandandWalesanditsregisteredaddressis12LittlePortlandStreet,London,W1W8BJ.Ithasissuedsharecapitalof99 (2020:99)ordinarysharesof£1each.Nodividendswerereceivedduringtheperiod. Dragon Retail Properties Limited Thecompanyowns50%oftheissuedsharecapitalofDragonRetailPropertiesLimited,anunlistedpropertyinvestment company.Atyearend,thecarryingvalueoftheinvestmentheldbytheGroupwas£637,000(2020:£670,000).Theremaining 50%isheldbyLondon&AssociatedPropertiesPLC.DragonRetailPropertiesLimitedisincorporatedinEnglandandWalesand itsregisteredaddressis12LittlePortlandStreet,London,W1W8BJ.Ithasissuedsharecapitalof500,000(2020:500,000) ordinarysharesof£1each.Nodividendswerereceivedduringtheperiod.ItholdsaSantanderbankloanof£1.164millionsecured againstitsinvestmentproperty.Thebankloanof£1.164millionissecuredbywayofafirstchargeonspecificfreeholdpropertyata valueof£2.08million.Theinterestcostoftheloanis2.75percentabovethebank’sbaserate.Arefinancingofthisloanis currentlyunderway.TheloanoriginallyexpiredinOctober2020buthasbeenextendedtoApril2022,andthelenderhasoffered toextendthisfurtherifrequired.Thecompanyhasagreedtermswithanewlendertorefinancethisloaninfullandareexpecting tocompletethisshortly. West Ealing Projects Limited Thecompanyowns50%oftheissuedsharecapitalofWestEalingProjectsLimited,anunlistedpropertydevelopmentcompany. Atyearend,thecarryingvalueoftheinvestmentheldbytheGroupwas£496,000(2020:£585,000).Theremaining50%isheld byLondon&AssociatedPropertiesPLC.WestEalingProjectsLimitedisincorporatedinEnglandandWalesanditsregistered addressis12LittlePortlandStreet,London,W1W8BJ.Ithasissuedsharecapitalof1,000,000(2020:1,000,000)ordinaryshares of£1each.Nodividendswerereceivedduringtheperiod. 78 BisichiPLC Financial statements Notes to the financial statements 14. JOINT VENTURES CONTINUED Development Physics £’000 Dragon £’000 West Ealing £’000 2021 £’000 Dragon £’000 West Ealing £’000 2020 £’000 Turnover - 168 58 226 143 192 335 Profitandloss: (Loss)/Profitbeforedepreciation, interestandtaxation (10) (32) (215) (257) (280) 100 (180) Depreciationandamortisation - (3) - (3) (10) - (10) (Loss)/Profitbeforeinterestand taxation (10) (35) (215) (260) (290) 100 (190) InterestIncome - - - - - - - Interestexpense - (31) (1) (32) (28) - (28) (Loss)/Profitbeforetaxation (10) (66) (216) (292) (318) 100 (218) Taxation - - 38 38 44 - 44 (Loss)/Profit after taxation (10) (66) (178) (254) (274) 100 (174) Balance sheet Non-current assets - 2,091 - 2,091 2,146 - 2,146 Cashandcashequivalents - 27 5 32 12 27 39 Propertyinventory 232 - 7,494 7,7 2 6 - 7,056 7,056 Othercurrentassets 27 374 70 471 460 103 563 Othercurrentliabilities (269) (53) (6,549) (6,871) (92) (5,962) (6,054) Net current assets (10) 348 1,020 1,358 380 1,224 1,604 Non-currentborrowings - (1,165) (28) (1,193) (1,186) (54) (1,240) Othernon-currentliabilities - - - - - - - Net assets at 31 December (10) 1,274 992 2,256 1,340 1,170 2,510 Share of net assets at 31 December (3) 637 496 1,130 670 585 1,255 7979BisichiPLC Financial statements Notes to the financial statements 15. SUBSIDIARY COMPANIES Thecompanyownsthefollowingordinarysharecapitalofthesubsidiarieswhichareincludedwithintheconsolidatedfinancial statements: Activity Percentageof sharecapital Registeredaddress Countryof incorporation Directly held: MineralProductsLimited Sharedealing 100% 12LittlePortlandStreet,London, W1W8BJ England andWales Bisichi(Properties)Limited Property 100% 12LittlePortlandStreet,London, W1W8BJ England andWales BisichiNorthamptonLimited Property 100% 12LittlePortlandStreet,London, W1W8BJ England andWales BisichiTrusteeLimited Property 100% 12LittlePortlandStreet,London, W1W8BJ England andWales UrbanFirst(Northampton)Limited Property 100% 12LittlePortlandStreet,London, W1W8BJ England andWales BisichiMining(Exploration)Limited Holding company 100% 12LittlePortlandStreet,London, W1W8BJ England andWales NinghiMarketingLimited Dormant 90.1% 12LittlePortlandStreet,London, W1W8BJ England andWales BisichiMiningManagement ServicesLimited Dormant 100% 12LittlePortlandStreet,London, W1W8BJ England andWales BisichiCoalMining(Pty)Limited Coalmining 100% SamoraMachelStreet,BethalRoad, Middelburg,Mpumalanga,1050 SouthAfrica Indirectly held: BlackWattleColliery(Pty)Limited Coalmining 62.5% SamoraMachelStreet,BethalRoad, Middelburg,Mpumalanga,1050 SouthAfrica SisonkeCoalProcessing(Pty)Limited Coal processing 62.5% SamoraMachelStreet,BethalRoad, Middelburg,Mpumalanga,1050 SouthAfrica BlackWattleKlipfontein(Pty)Limited Coalmining 62.5% SamoraMachelStreet,BethalRoad, Middelburg,Mpumalanga,1050 SouthAfrica AmandlaEhtuMineralResource Development(Pty)Limited Dormant 70% SamoraMachelStreet,BethalRoad, Middelburg,Mpumalanga,1050 SouthAfrica Detailsonthenon-controllinginterestinsubsidiariesareshownundernote27. 80 BisichiPLC Financial statements Notes to the financial statements 16. INVENTORIES 2021 £’000 2020 £’000 Coal Washed 1,185 2,924 MiningProduction 59 394 Workinprogress - 111 Other 9 16 1,253 3,445 17. TRADE AND OTHER RECEIVABLES 2021 £’000 2020 £’000 Financial assets falling due within one year:  Tradereceivables 6,328 5,155  Amountowedbyjointventure 1,067 952  Otherreceivables 984 680 Non-financial instruments falling due within one year:  Prepaymentsandaccruedincome 247 171 8,626 6,958 Financialassetsfallingduewithinoneyearareheldatamortisedcost.Thefairvalueoftradeandotherreceivablesapproximates theircarryingamounts.TheGroupappliesasimplifiedapproachtomeasurethecreditlossallowancefortradereceivablesusing thelifetimeexpectedcreditlossprovision.Thelifetimeexpectedcreditlossisevaluatedforeachtradereceivabletakinginto accountpaymenthistory,paymentsmadesubsequenttoyearendandpriortoreporting,pastdefaultexperienceandtheimpactof anyotherrelevantandcurrentobservabledata.TheGroupappliesageneralapproachonallotherreceivablesclassifiedas financialassets.Atyearend,theGroupallowancefordoubtfuldebtsprovidedagainsttradereceivableswas£140,000(2020: £91,000). 18. INVESTMENTS IN LISTED SECURITIES HELD AT FVPL 2021 £’000 2020 £’000 Market value of listed Investments: ListedinGreatBritain 478 567 ListedoutsideGreatBritain 207 266 685 833 Originalcostoflistedinvestments 846 1,098 Unrealisedsurplus/deficitofmarketvalueversuscost (161) (265) 8181BisichiPLC Financial statements Notes to the financial statements 19. TRADE AND OTHER PAYABLES 2021 £’000 2020 £’000 Tradepayables 7,171 7,168 Amountsowedtojointventures 156 156 Leaseliabilities(Note31) 65 81 Otherpayables 2,281 1,839 Accruals 844 1,374 DeferredIncome 226 238 10,743 10,856 20. FINANCIAL LIABILITIES – BORROWINGS Current Non-current 2021 £’000 2020 £’000 2021 £’000 2020 £’000 Bankoverdraft(secured) 2,536 4,846 - - Bankloan(secured) 130 264 3,853 3,943 2,666 5,110 3,853 3,943 2021 £’000 2020 £’000 Bankoverdraftandloaninstalmentsbyreferencetothebalancesheetdate:  Withinoneyear 2,666 5,110  Fromonetotwoyears 11 128  Fromtwotofiveyears 3,842 3,815 6,519 9,053 Bankoverdraftandloananalysisbyorigin:  UnitedKingdom 3,839 3,799  SouthernAfrica 2,680 5,254 6,519 9,053 InSouthAfrica,anR85milliontradefacilityisheldwithAbsaBankLimitedbySisonkeCoalProcessing(Pty)Limited(“SisonkeCoal Processing”)inordertocovertheworkingcapitalrequirementsoftheGroup’sSouthAfricanoperations.Theinterestcostofthe loanisattheSouthAfricanprimelendingrateplus3.8%ThefacilityisrenewableannuallyeachJanuary,isrepayableondemand andissecuredbywayofafirstchargeoverspecificpiecesofminingequipment,inventoryandthedebtorsoftherelevant companywhichholdstheloanwhichareincludedinthefinancialstatementsatavalueof£8,843,219.Allbankingcovenantswere eitheradheredtoorwaivedbyAbsaBankLimitedduringtheyear. IntheUK,theGroupholdsa£3.96milliontermloanfacilitywithJulianHodgeBankLimited.Theloanissecuredagainstthe Group’sUKretailpropertyportfolio.ThedebtpackagehasafiveyeartermandisrepayableattheendoftheterminDecember 2024.Inthelastquarterof2021thebaseinterestrateontheloanchangedfromLIBORtotheBankofEnglandbaserate.The overallinterestcostoftheloanis4.00%abovetheBankofEnglandbaserate.Theloanissecuredbywayofafirstchargeover theinvestmentpropertiesintheUKwhichareincludedinthefinancialstatementsatavalueof£10,525,000.Nobanking covenantswerebreachedbytheGroupduringtheyear. 82 BisichiPLC Financial statements Notes to the financial statements 20. FINANCIAL LIABILITIES – BORROWINGS CONTINUED Consistentwithothersintheminingandpropertyindustry,theGroupmonitorsitscapitalbyitsgearinglevels.Thisiscalculatedas thetotalbankloansandoverdraftlessremainingcashandcashequivalentsasapercentageofequity.Atyearendthegearingof theGroupwascalculatedasfollows: 2021 £’000 2020 £’000 Totalbankloansandoverdraft 6,519 9,053 Lesscashandcashequivalents(excludingoverdraft) (3,018) (3,768) Net debt 3,501 5,285 Total equity attributable to shareholders of the parent 17,512 16,073 Gearing 20.0% 32.9% Analysisofthechangesinliabilitiesarisingfromfinancingactivities: Bank borrowings £’000 Bank overdrafts £’000 Lease liabilities £’000 2021 £’000 Bank borrowings £’000 Bank overdrafts £’000 Lease liabilities £’000 2020 £’000 Balanceat1January 4,207 4,846 508 9,561 4,402 4,842 262 9,506 Exchangeadjustments (10) (138) (6) (154) (56) (330) (18) (404) Cashmovementsexcluding exchangeadjustments (214) (2,172) (57) (2,443) (139) 334 (39) 156 Additions - - 9 9 - - 303 303 Balanceat31December 3,983 2,536 454 6,973 4,207 4,846 508 9,561 21. PROVISION FOR REHABILITATION 2021 £’000 2020 £’000 Asat1January 1,442 1,554 Exchangeadjustment (52) (112) Increaseinprovision - - Unwindingofdiscount - - Asat31December 1,390 1,442 8383BisichiPLC Financial statements Notes to the financial statements 22. FINANCIAL INSTRUMENTS Total financial assets and liabilities TheGroup’sfinancialassetsandliabilitiesareasfollows,representingboththefairvalueandthecarryingvalue: Financial Assets measured at amortised cost £’000 Financial Liabilities measured at amortised cost £’000 Investments heldat FVPL £’000 2021 £’000 Financial Assets measured at amortised cost £’000 Financial Liabilities measured at amortised cost £’000 Investments heldat FVPL £’000 2020 £’000 Cashandcashequivalents 3,018 - - 3,018 3,768 - - 3,768 Non-currentother investmentsheldatFVPL - - 3,631 3,631 - - 1,746 1,746 Investmentsinlisted securitiesheldatFVPL - - 685 685 - - 833 833 Tradeandotherreceivables 8,379 - - 8,379 6,787 - - 6,787 Bankborrowingsand overdraft - (6,519) - (6,519) - (9,053) - (9,053) LeaseLiabilities - (454) - (454) - (508) - (508) Otherliabilities - (11,178) - (11,178) - (10,746) - (10,746) 11,397 (18,151) 4,316 (2,438) 10,555 (20,307) 2,579 (7,173) Investmentsinlistedsecuritiesheldatfairvaluethroughprofitandlossfallunderlevel1ofthefairvaluehierarchyintowhichfair valuemeasurementsarerecognisedinaccordancewiththelevelssetoutinIFRS7.Thecomparativefiguresfor2020fallunder thesamecategoryoffinancialinstrumentas2021. Thecarryingamountofshortterm(lessthan12months)tradereceivableandotherliabilitiesapproximatetheirfairvalues.Thefair valueofnon-currentborrowingsinnote20approximatesitscarryingvalueandwasdeterminedunderlevel2ofthefairvalue hierarchyandisestimatedbydiscountingthefuturecontractualcashflowsatthecurrentmarketinterestratesforUKborrowings andfortheSouthAfricanoverdraftfacility.Thefairvalueoftheleaseliabilitiesinnote31approximatesitscarryingvalueandwas determinedunderlevel2ofthefairvaluehierarchyandisestimatedbydiscountingthefuturecontractualcashflowsatthecurrent marketinterestrates. Treasury policy Althoughnoderivativetransactionswereenteredintoduringthecurrentandprioryear,theGroupmayusederivativetransactions suchasinterestrateswapsandforwardexchangecontractsasnecessaryinordertohelpmanagethefinancialrisksarisingfrom theGroup’sactivities.ThemainrisksarisingfromtheGroup’sfinancingstructureareinterestraterisk,liquidityrisk,marketrisk, creditrisk,currencyriskandcommoditypricerisk.Therehavebeennochangesduringtheyearofthemainrisksarisingfromthe Group’sfinancestructure.Thepoliciesformanagingeachoftheserisksandtheprincipaleffectsofthesepoliciesontheresults aresummarisedbelow. Interest rate risk Interestrateriskistheriskthatthevalueofafinancialinstrumentorcashflowsassociatedwiththeinstrumentwillfluctuatedueto changesinmarketinterestrates.InterestrateriskarisesfrominterestbearingfinancialassetsandliabilitiesthattheGroupuses. TreasuryactivitiestakeplaceunderproceduresandpoliciesapprovedandmonitoredbytheBoardtominimisethefinancialrisk facedbytheGroup.Interestbearingassetscomprisecashandcashequivalentswhichareconsideredtobeshort-termliquid assetsandloanstojointventures. 84 BisichiPLC Financial statements Notes to the financial statements 22. FINANCIAL INSTRUMENTS CONTINUED Interestbearingborrowingscomprisebankloans,bankoverdraftsandvariableratefinanceleaseobligations.Theratesofinterest varybasedonBankofEnglandintheUKandPRIMEinSouthAfrica. Asat31December2021,withothervariablesunchanged,a1%increaseordecreaseininterestrates,oninvestmentsand borrowingswhoseinterestratesarenotfixed,wouldrespectivelychangetheprofit/lossfortheyearby£80,000(2020:£37,000). Theeffectonequityofthischangewouldbeanequivalentdecreaseorincreasefortheyearof£80,000(2020:£37,000). Liquidity risk TheGroup’spolicyistominimiserefinancingrisk.Efficienttreasurymanagementandstrictcreditcontrolminimisethecostsand risksassociatedwiththispolicywhichensuresthatfundsareavailabletomeetcommitmentsastheyfalldue.Asatyearendthe GroupheldborrowingfacilitiesintheUKinBisichiPLCandinSouthAfricainBlackWattleColliery(Pty)Ltd. Thefollowingtablesetsoutthematurityprofileofcontractualundiscountedcashflowsoffinancialliabilitiesasat31December: 2021 £’000 2020 £’000 Withinoneyear 14,122 16,174 Fromonetotwoyears 238 371 Fromtwotofiveyears 4,391 4,268 Beyondfiveyears 129 232 18,880 21,045 Thefollowingtablesetsoutthematurityprofileofcontractualundiscountedcashflowsoffinancialliabilitiesasat31December maturingwithinoneyear: 2021 £’000 2020 £’000 Withinonemonth 11,509 13,088 Fromonetothreemonths 1,699 2,106 Fromfourtotwelvemonths 914 980 14,122 16,174 InSouthAfrica,anR85milliontradefacilityisheldwithAbsaBankLimitedbySisonkeCoalProcessing(Pty)Limited(“SisonkeCoal Processing”)inordertocovertheworkingcapitalrequirementsoftheGroup’sSouthAfricanoperations.Theinterestcostofthe loanisattheSouthAfricanprimelendingrateplus3.8%ThefacilityisrenewableannuallyeachJanuary,isrepayableondemand andissecuredagainstinventory,debtorsandcashthatareheldbySisonkeCoalProcessing(Pty)Limited.Thefacilityisincluded incashandcashequivalentswithinthecashflowstatement. IntheUK,theGroupholdsa£3.96milliontermloanfacilitywithJulianHodgeBankLimited.Theloanissecuredagainstthe Group’sUKretailpropertyportfolio.ThedebtpackagehasafiveyeartermandisrepayableattheendoftheterminDecember 2024.Inthelastquarterof2021thebaseinterestrateontheloanchangedfromLIBORtotheBankofEnglandbaserate.The overallinterestcostoftheloanis4.00%abovetheBankofEnglandbaserate. Asaresultoftheaboveagreedbankingfacilities,theDirectorsbelievethattheGroupiswellplacedtomanageitsliquidityrisk. 8585BisichiPLC Financial statements Notes to the financial statements 22. FINANCIAL INSTRUMENTS CONTINUED Credit risk TheGroupismainlyexposedtocreditriskonitscashandcashequivalents,tradeandotherreceivablesandamountsowedby jointventuresasperthebalancesheet.Themaximumexposuretocreditriskisrepresentedbythecarryingamountofeach financialassetinthebalancesheetwhichatyearendamountedto£11,397,000(2020:£10,555,000). Tomitigateriskonitscashandcashequivalents,theGrouponlydepositssurpluscashwithwell-establishedfinancialinstitutions ofhighqualitycreditstanding. TheGroup’screditriskisprimarilyattributabletoitstradereceivables.Tradedebtor’screditratingsarereviewedregularly.TheGroup’s reviewincludesmeasuressuchastheuseofexternalratingsandestablishingpurchaselimitsforeachcustomer.TheGrouphad amountsduefromitssignificantrevenuecustomersattheyearendthatrepresented53%(2020:68%)ofthetradereceivables balance.Theseamountshavebeensubsequentlysettled.TheGroupapproachtomeasurethecreditlossallowancefortrade receivablesisoutlinedinnote17.Atyearend,theGroupallowancefordoubtfuldebtsprovidedagainsttradereceivableswas£140,000 (2020:£91,000).Asatyearendtheamountoftradereceivablesheldpastduedatelesscreditlossallowanceswas£201,000(2020: £282,000).Todate,theamountoftradereceivablesheldpastduedatelesscreditlossallowancesthathasnotsubsequentlybeen settledis£106,000(2020:£155,000).Managementhavenoreasontobelievethatthisamountwillnotbesettled. TheGroupexposuretocreditriskonitsloanstojointventuresandotherreceivablesismitigatedthroughongoingreviewofthe underlyingperformanceandresourcesofthecounterpartyincludingevaluationofdifferentscenariosofprobabilityofdefaultand expectedlossapplicabletoeachoftheunderlyingbalances. Financial assets maturity On31December2021,cashatbankandinhandamountedto£3,018,000(2020:£3,768,000)whichisinvestedinshorttermbankdeposits maturingwithinoneyearbearinginterestatthebank’svariablerates.Cashandcashequivalentsallhaveamaturityoflessthan3months. Foreign exchange risk Alltradingisundertakeninthelocalcurrenciesexceptforcertainexportsaleswhichareinvoicedindollars.ItisnottheGroup’s policytoobtainforwardcontractstomitigateforeignexchangeriskonthesecontractsaspaymenttermsarewithin15daysof invoiceorearlier.Fundingisalsoinlocalcurrenciesotherthaninter-companyinvestmentsandloansanditisalsonottheGroup’s policytoobtainforwardcontractstomitigateforeignexchangeriskontheseamounts.During2021and2020theGroupdidnot hedgeitsexposureofforeigninvestmentsheldinforeigncurrencies. TheprincipalcurrencyrisktowhichtheGroupisexposedinregardtointer-companybalancesistheexchangeratebetween PoundssterlingandSouthAfricanRand.ItarisesasaresultoftheretranslationofRanddenominatedinter-companytrade receivablebalancesheldwithintheUKwhicharepayablebySouthAfricanRandfunctionalcurrencysubsidiaries. BasedontheGroup’snetfinancialassetsandliabilitiesasat31December2021,a25%strengtheningofSterlingagainstthe SouthAfricanRand,withallothervariablesheldconstant,woulddecreasetheGroup’sprofitaftertaxationby£218,000(2020: £360,000).A25%weakeningofSterlingagainsttheSouthAfricanRand,withallothervariablesheldconstantwouldincreasethe Group’sprofitaftertaxationby£364,000(2020:£601,000). The25%sensitivityhasbeendeterminedbasedontheaveragehistoricvolatilityoftheexchangerate. Thetablebelowshowsthecurrencyprofilesofcashandcashequivalents: 2021 £’000 2020 £’000 Sterling 1,397 1,641 SouthAfricanRand 1,017 809 USDollar 604 1,318 3,018 3,768 CashandcashequivalentsearninterestatratesbasedonBankofEnglandratesinSterlingandPrimeinRand. 86 BisichiPLC Financial statements Notes to the financial statements 22. FINANCIAL INSTRUMENTS CONTINUED ThetablesbelowshowsthecurrencyprofilesofnetmonetaryassetsandliabilitiesbyfunctionalcurrencyoftheGroup: 2021: Sterling £’000 South African Rands £’000 Sterling 1,123 - SouthAfricanRand 65 (5,088) USDollar 1,462 - 2,650 (5,088) 2020: Sterling £’000 South African Rands £’000 Sterling (70) - SouthAfricanRand 39 (8,878) USDollar 1,736 - 1,705 (8,878) 23. DEFERRED TAXATION 2021 £’000 2020 £’000 Asat1January 474 2,071 Recognisedinincome 45 (1,416) Exchangeadjustment (13) (181) Asat31December 506 474 Thedeferredtaxbalancecomprisesthefollowing: Revaluations 641 299 Capitalallowances 2,253 2,478 Shorttermtimingdifference (832) (692) Unredeemedcapitaldeductions (1,057) (645) Lossesandotherdeductions (499) (966) 506 474 Refertonote8fordetailsofdeferredtaxrecognisedinincomeinthecurrentyear.Taxratesof25%(2020:19%)intheUKand 28%(2020:28%)inSouthAfricawereutilisedtocalculateyearenddeferredtaxbalances. 8787BisichiPLC Financial statements Notes to the financial statements 24. SHARE CAPITAL 2021 £’000 2020 £’000 Authorised:13,000,000ordinarysharesof10peach 1,300 1,300 Allottedandfullypaid: 2021 Number of ordinary shares 2020 Numberof ordinary shares 2021 £’000 2020 £’000 At1Januaryandoutstandingat31December 10,676,839 10,676,839 1,068 1,068 25. OTHER RESERVES 2021 £’000 2020 £’000 Equityshareoptions 621 621 Netinvestmentpremiumonsharecapitalinjointventure 86 86 707 707 26. SHARE BASED PAYMENTS DetailsoftheshareoptionschemeareshownintheDirectors’remunerationreportonpage33undertheheadingShareoption schemeswhichiswithintheauditedpartofthisreport.Furtherdetailsoftheshareoptionschemesaresetoutbelow. TheBisichiPLCUnapprovedOptionSchemes: Year of grant Subscription price per share Period within which options exercisable Numberofshare forwhichoptions outstandingat 31December2020 Numberof shareoptions lapsed/surrendered /awarded duringyear Number of share for which options outstanding at 31 December 2021 2015 87.0p Sep 2015 – Sep 2025 300,000 - 300,000 2018 73.50p Feb 2018 – Feb 2028 380,000 - 380,000 Therearenoperformanceorserviceconditionsattachedto2015and2018optionswhichareoutstandingat31December2021. 88 BisichiPLC Financial statements Notes to the financial statements 26. SHARE BASED PAYMENTS CONTINUED 2021 Number 2021 Weighted average exercise price 2020 Number 2020 Weighted average exercise price Outstandingat1January 680,000 79.46p 680,000 79.46p Lapsed/Surrenderedduringtheyear - - - - Issuedduringtheyear - - - - Outstandingat31December 680,000 79.46p 680,000 79.46p Exercisable at 31 December 680,000 79.46p 680,000 79.46p 27. NON-CONTROLLING INTEREST 2021 £’000 2020 £’000 Asat1January 116 625 Shareofprofit/(loss)fortheyear 215 (440) Dividendspaid - - Exchangeadjustment (8) (69) Asat31December 323 116 Thenon-controllinginterestcomprisesofa37.5%interestinBlackWattleColliery(Pty)Ltdanditswhollyownedsubsidiary SisonkeCoalProcessing(Pty)Ltd.BlackWattleColliery(Pty)LtdisacoalminingcompanyandSisonkeCoalProcessing(Pty)Ltd isacoalprocessingcompanybothincorporatedinSouthAfrica.Summarisedfinancialinformationreflecting100%ofthe underlyingconsolidatedrelevantfiguresofBlackWattleColliery(Pty)Ltd’sanditswhollyownedsubsidiarySisonkeCoal Processing(Pty)Ltdissetoutbelow. 2021 £’000 2020 £’000 Revenue 49,225 28,555 Expenses (47,787) (31,498) Profit/(loss) for the year 1,438 (2,943) OthercomprehensiveIncome - - Total comprehensive income for the year 1,438 (2,943) Balancesheet  Non-currentassets 9,019 10,130  Currentassets 9,329 9,781  Currentliabilities (14,287) (16,915)  Non-currentliabilities (1,904) (2,224) Net assets at 31 December 2,157 772 8989BisichiPLC Financial statements Notes to the financial statements 27. NON-CONTROLLING INTEREST CONTINUED Thenon-controllinginterestoriginatesfromthedisposalofa37.5%shareholdinginBlackWattleColliery(Pty)Ltdin2010when thetotalissuedsharecapitalinBlackWattleColliery(Pty)Ltdwasincreasedfrom136sharesto1,000sharesatparofR1(South AfricanRand)throughthefollowingsharesissue: - asubscriptionfor489ordinarysharesatparbyBisichiMining(Exploration)Limitedincreasingthenumberofsharesheldfrom 136ordinarysharestoatotalof625ordinaryshares; - asubscriptionfor110ordinarysharesatparbyVunaniMining(Pty)Ltd; - asubscriptionfor265“A”sharesatparbyVunaniMining(Pty)Ltd BisichiMining(Exploration)LimitedisawhollyownedsubsidiaryofBisichiPLCincorporatedinEnglandandWales. VunaniMining(Pty)LtdisaSouthAfricanBlackEconomicEmpowermentcompanyandminorityshareholderinBlackWattle Colliery(Pty)Ltd. The“A”sharesrankparipassuwiththeordinarysharessavethattheywillhavenodividendrightsuntilsuchtimeasthedividends paidbyBlackWattleColliery(Pty)Ltdontheordinarysharessubsequentto30October2008willequatetoR832,075,000. Anon-controllinginterestof15%inBlackWattleColliery(Pty)Ltdisrecognisedforallprofitsdistributabletothe110ordinary sharesheldbyVunaniMining(Pty)Ltdfromthedateofissueoftheshares(18October2010).Anadditionalnon-controlling interestwillberecognisedforallprofitsdistributabletothe265“A”sharesheldbyVunaniMining(Pty)Ltdaftersuchtimeasthe profitsavailablefordistribution,inBlackWattleColliery(Pty)Ltd,beforeanypaymentofdividendsafter30October2008,exceeds R832,075,000. On12April2022thetotalissuedsharecapitalinBlackWattleColliery(Pty)Ltdwasincreasedfurtherfrom1000sharesto1002 sharesatparofR1throughthefollowingshareissue: asubscriptionof1“B”ShareatparbyBisichiMining(ExplorationLimited); asubscriptionof1“B”ShareatparbyVunaniMining(Pty)Ltd The“B”sharesrankparipassuwiththeordinarysharessavethattheyhavesolerightstothedistributableprofitsattributableto certainminingreservesheldbyBlackWattleColliery(Pty)Ltd.Anon-controllinginterestisrecognisedforallprofitsdistributableto the“B”sharesheldbyVunaniMining(Pty)Ltdfromthedateofissueoftheshares(12April2022). 90 BisichiPLC Financial statements Notes to the financial statements 28. RELATED PARTY TRANSACTIONS 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 Related party: London&AssociatedPropertiesPLC(note(a)) 41 - 200 (192) WestEalingProjectsLimited(note(b)) - (998) - (158) DragonRetailPropertiesLimited(note(c)) 156 - (36) 44 DevelopmentPhysicsLimited(note(d)) - (67) - (67) As at 31 December 2021 197 (1,065) 164 (373) London&AssociatedPropertiesPLC(note(a)) 43 - 200 (190) WestEalingProjectsLimited(note(b)) - (952) - (112) DragonRetailPropertiesLimited(note(c)) 156 - (36) 44 As at 31 December 2020 199 (952) 164 (258) (a) London & Associated Properties PLC–London&AssociatedPropertiesPLC(“LAP”)isasubstantialshareholderandparent companyofBisichiPLC.Propertymanagement,officepremises,generalmanagement,accountingandadministrationservices areprovidedforBisichiPLCanditsUKsubsidiaries.BisichiPLCcontinuestooperateasafullyindependentcompanyand currentlyLAPownsonly41.52%oftheissuedordinarysharecapital.However,LAPisdeemedunderIFRS10tohave effectivecontrolofBisichiPLCforaccountingpurposes. (b) West Ealing Projects Limited –WestEalingProjectsLimited(“WestEaling”)isanunlistedpropertycompanyincorporatedin EnglandandWales.WestEalingisownedequallybythecompanyandLondon&AssociatedPropertiesPLCandisaccounted asajointventureandtreatedasanon-currentassetinvestment. (c) Dragon Retail Properties Limited–(“Dragon”)isownedequallybythecompanyandLondon&AssociatedPropertiesPLC. Dragonisaccountedasajointventureandistreatedasanon-currentassetinvestment. (d) Development Physics Limited–DevelopmentPhysicsLimited(“DP”)isanunlistedpropertycompanyincorporatedinEngland andWales.DPisownedequallybythecompany,London&AssociatedPropertiesPLCandMetropropRealEstateLtdandis accountedasajointventureandtreatedasanon-currentassetinvestment. Keymanagementpersonnelcompriseofthedirectorsofthecompanywhohavetheauthorityandresponsibilityforplanning, directing,andcontrollingtheactivitiesofthecompany.Detailsofkeymanagementpersonnelcompensationandinterestinshare optionsareshownintheDirectors’RemunerationReportonpages32and33undertheheadingsDirectors’remuneration,Pension schemesandincentivesandShareoptionschemeswhichiswithintheauditedpartofthisreport.Thetotalemployers’national insurancepaidinrelationtotheremunerationofkeymanagementwas£189,000(2020:£97,000).In2012aloanwasmadetoone ofthedirectors,MrARHeller,for£116,000.InterestispayableontheDirector’sLoanatarateof6.14percent.Thereisnofixed repaymentdatefortheDirector’sLoan.Theloanamountoutstandingatyearendwas£41,000(2020:£41,000)andnorepayment (2020:£nil)wasmadeduringtheyear. 9191BisichiPLC Financial statements Notes to the financial statements 28. RELATED PARTY TRANSACTIONS CONTINUED Thenon-controllinginteresttoVunaniMining(Pty)Ltdisshowninnote27.Inaddition,theGroupholdsaninvestmentinVunani Limitedwithafairvalueof£45,000(2020:£38,000)andaninvestmentinVunaniCapitalPartners(Pty)Ltdof£38,000(2020: £nil).BotharerelatedpartiestoVunaniMining(Pty)Ltdandareclassifiedasnon-currentavailableforsaleinvestments. 29. EMPLOYEES 2021 £’000 2020 £’000 Staffcostsduringtheyearwereasfollows: Salaries 6,995 5,512 Socialsecuritycosts 189 97 Pensioncosts 307 281 Sharebasedpayments - - 7,491 5,890 2021 2020 TheaverageweeklynumbersofemployeesoftheGroupduringtheyearwereasfollows: Production 214 221 Administration 15 15 229 236 30. CAPITAL COMMITMENTS 2021 £’000 2020 £’000 Commitmentsforcapitalexpenditureapprovedandcontractedforattheyearend - 485 92 BisichiPLC Financial statements Notes to the financial statements 31. LEASE LIABILITIES AND FUTURE PROPERTY LEASE RENTALS Theleaseliabilitiesaresecuredbytherelatedunderlyingassets.Theundiscountedmaturityanalysisofleasepaymentsat31 December2021isasfollows: Mining Equipment& Development costs £’000 MotorVehi- cles £’000 Head LeaseProp- erty £’000 2021 £’000 2020 £’000 Withinoneyear 42 28 13 83 84 Secondtofifthyear 161 21 44 226 236 Afterfiveyears 91 - 1,336 1,427 1,680 294 49 1,393 1,736 2,000 Discountingadjustment (62) (2) (1,218) (1,282) (1,492) Presentvalue 232 47 175 454 508 Thepresentvalueofminimumleasepaymentsat31December2021isasfollows: Mining Equipment& Development costs £’000 MotorVehi- cles £’000 Head LeaseProp- erty £’000 2021 £’000 2020 £’000 Withinoneyear(Note19) 27 27 11 65 81 Secondtofifthyear 205 20 35 260 195 Afterfiveyears - - 129 129 232 Presentvalue 232 47 175 454 508 Withtheexceptionofshort-termleasesandleasesoflow-valueunderlyingassets,eachleaseisreflectedonthebalancesheetas aright-of-useassetandaleaseliability.TheGroupclassifiesitsright-of-useassetsinaconsistentmannertoitsproperty,plant andequipment.Leaseliabilitiesduewithinoneyearareclassifiedwithintradeandotherpayablesinthebalancesheet. TheGrouphasoneleaseforminingequipmentinSouthAfricaandoneleaseformotorvehiclesintheUnitedKingdom.Both leaseshavetermsoflessthan5yearsareeithernon-cancellableormayonlybecancelledbyincurringasubstantivetermination fee.LeasepaymentsforminingequipmentaresubjecttochangesinconsumerpriceinflationinSouthAfrica. TheGrouphasoneleasecontractforaninvestmentproperty.Theremainingtermfortheleasedinvestmentpropertyis127years (2020:128years).Theannualrentpayableisthehigherof£7,500or6.25%oftherevenuederivedfromtheleasedassets. TheGrouphasenteredintorentalleasesonitsinvestmentpropertyportfolioconsistingmainlyofcommercialproperties.These leaseshavetermsofbetween1and106years.Allleasesincludeaclausetoenableupwardrevisionoftherentalchargeonan annualbasisaccordingtoprevailingmarketconditions. 9393BisichiPLC Financial statements Notes to the financial statements 31. LEASE LIABILITIES AND FUTURE PROPERTY LEASE RENTALS CONTINUED Thefutureaggregateminimumrentalsreceivableundernon-cancellableoperatingleasesareasfollows: 2021 £’000 2020 £’000 Withinoneyear 948 814 Secondyear 830 711 Thirdyear 776 590 Fourthyear 710 536 Fifthyear 634 471 Afterfiveyears 9,956 9,562 13,854 12,684 32. CONTINGENT LIABILITIES AND POST BALANCE SHEET EVENTS Bank Guarantees BankguaranteeshavebeenissuedbythebankersofBlackWattleColliery(Pty)Limitedonbehalfofthecompanytothirdparties. Theguaranteesaresecuredagainsttheassetsofthecompanyandhavebeenissuedinrespectofthefollowing: 2021 £’000 2020 £’000 Railsiding 48 50 Rehabilitationofminingland 1,700 1,441 Water&electricity 46 48 Contingent tax liability TheinterpretationoflawsandregulationsinSouthAfricawheretheGroupoperatescanbecomplexandcanleadtochallenges fromordisputeswithregulatoryauthorities.Suchsituationsoftentakesignificanttimetoresolve.Wherethereisadisputeand whereareliableestimateofthepotentialliabilitycannotbemade,orwheretheGroup,basedonlegaladvice,considersthatitis improbablethattherewillbeanoutflowofeconomicresources,noprovisionisrecognised. BlackWattleColliery(Pty)LtdiscurrentlyinvolvedinataxdisputeinSouthAfricarelatedtoVAT.Thedisputearoseduringthe yearended31December2020andisrelatedtoeventswhichoccurredpriortotheyearsended31December2020.Asat13April 2022,theGrouphasbeenadvisedthatithasastronglegalcase,thatithascompliedfullywiththelegislationand,therefore,no economicoutflowisexpectedtooccur.Becauseofthenatureandcomplexityofthedispute,thepossiblefinancialeffectofa negativedecisioncannotbemeasuredreliably.Accordingly,noprovisionhasbeenbookedattheyearend.Atthisstage,the Groupbelievesthatthedisputewillberesolvedinitsfavour. 94 BisichiPLC Financial statements Notes 2021 £’000 2020 £’000 Fixed assets Tangibleassets 35 93 90 Investmentinjointventures 36 665 665 Otherinvestments 36 9,987 8,102 10,745 8,857 Current assets Debtors–amountsduewithinoneyear 37 3,636 4,782 Debtors–amountsdueinmorethanoneyear 37 220 248 Bank balances 788 1,810 4,644 6,840 Creditors–amountsfallingduewithinoneyear 38 (454) (563) Net current assets 4,190 6,277 Total assets less current liabilities 14,935 15,134 Creditors–amountsfallinginmorethanoneyear 38 (20) (16) Net assets 14,915 15,118 Capital and reserves Calledupsharecapital 24 1,068 1,068 Sharepremiumaccount 258 258 Availableforsalereserve - - Otherreserves 622 622 Retainedearnings 33 12,967 13,170 Shareholders’ funds 14,915 15,118 Thelossforthefinancialyear,beforedividends,was£203,000(2020:profit£83,000) Thecompanyfinancialstatementswereapprovedandauthorisedforissuebytheboardofdirectorson13April2022andsigned onitsbehalfby: A R Heller G J Casey Company Registration No. 112155 Director  Director Company balance sheet at 31 December 2021 9595BisichiPLC Financial statements Company statement of changes in equity for the year ended 31 December 2021 Share capital £’000 Share premium £’000 Other reserve £’000 Retained earnings £’000 Shareholders funds £’000 Balanceat1January2020 1,068 258 622 13,194 15,142 Dividendpaid - - - (107) (107) Profitandtotalcomprehensiveincomefortheyear - - - 83 83 Balance at 1 January 2021 1,068 258 622 13,170 15,118 Dividendpaid - - - - - Profitandtotalcomprehensiveincomefortheyear - - - (203) (203) Balance at 31 December 2021 1,068 258 622 12,967 14,915 96 Bisichi PLC Financial statements Company accounting policies for the year ended 31 December 2021 The following are the main accounting policies of the company: Basis of preparation The financial statements have been prepared in accordance with Financial Reporting Standard 100 Application of Financial Reporting Requirements and Financial Reporting Standard 101 Reduced Disclosure Framework. The principal accounting policies adopted in the preparation of the financial statements are set out below. The financial statements have been prepared on a historical cost basis, except for the revaluation of leasehold property and certain financial instruments. Going concern Details on the Group’s adoption of the going concern basis of accounting in preparing the annual financial statements can be found on page 60. Disclosure exemptions adopted In preparing these financial statements the company has taken advantage of all disclosure exemptions conferred by FRS 101 as well as disclosure exemptions conferred by IFRS 2, 7, 13 and 16. Therefore these financial statements do not include: • • certain comparative information as otherwise required by IFRS; • • certain disclosures regarding the company’s capital; • • a statement of cash flows; • • the effect of future accounting standards not yet adopted; • • 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 Joint ventures Investments in joint ventures, being those entities over whose activities the Group has joint control as established by contractual agreement, are included at cost, less impairment. Other Investments Investments of the company in subsidiaries are stated in the balance sheet as fixed assets at cost less provisions for impairment. Other investments comprising of shares in listed companies are classified at fair value through profit and loss. Foreign currencies Monetary assets and liabilities expressed in foreign currencies have been translated at the rates of exchange ruling at the balance sheet date. All exchange differences are taken to the profit and loss account. Financial instruments Details on the Group’s accounting policy for financial instruments can be found on page 65. Deferred taxation Details on the Group’s accounting policy for deferred taxation can be found on page 67. Leased assets and liabilities Details on the Group’s accounting policy for leased assets and liabilities can be found on page 66. Pensions Details on the Group’s accounting policy for pensions can be found on page 65. Share based remuneration Details on the Group’s accounting policy for share based remuneration can be found on page 65. Details of the share options in issue are disclosed in the directors’ remuneration report on page 33 under the heading share option schemes which is within the audited part of this report. Notes to the financial statements 9797BisichiPLC 33. PROFIT & LOSS ACCOUNT AseparateprofitandlossaccountforBisichiPLChasnotbeenpresentedaspermittedbySection408(2)oftheCompaniesAct 2006.Thelossforthefinancialyear,beforedividendspaid,was£203,000(2020:profit:£83,000) Detailsofsharecapitalaresetoutinnote24oftheGroupfinancialstatementsanddetailsoftheshareoptionsareshowninthe Directors’RemunerationReportonpage33undertheheadingShareoptionschemeswhichiswithintheauditedpartofthisreport andnote26oftheGroupfinancialstatements. 34. DIVIDENDS Detailsondividendscanbefoundinnote9intheGroupfinancialstatements. 35. TANGIBLE FIXED ASSETS Leasehold Property £’000 Motor Vehicles £’000 Office equipment £’000 Total £’000 Costat1January2021 45 69 70 184 Additions - 35 - 35 Cost at 31 December 2021 45 104 70 219 Accumulateddepreciationat1January2021 - 24 70 94 Chargefortheyear - 32 - 32 Accumulated depreciation at 31 December 2021 - 56 70 126 Net book value at 31 December 2021 45 48 - 93 Netbookvalueat31December2020 45 45 - 90 Leaseholdpropertyconsistsofasingleunitwithalongleaseholdtenant.Thetermremainingontheleaseis38years.Motor VehiclescomprisewhollyofRightofUseleasedassets. 36. INVESTMENTS Joint ventures shares £’000 Sharesin subsidiaries £’000 Other investments £’000 Total £’000 Netbookvalueat1January2021 665 6,356 1,746 8,102 Investedduringtheyear - - 1,630 1,630 Repayment - - (446) (446) Unrealisedsurplus/deficitovercost - - 701 701 Net book value at 31 December 2021 665 6,356 3,631 9,987 Investmentsinsubsidiariesaredetailedinnote15.Intheopinionofthedirectorstheaggregatevalueoftheinvestmentin subsidiariesisnotlessthantheamountshowninthesefinancialstatements. Otherinvestmentscompriseof£3,631,000(2020:£1,746,000)sharesinlistedcompanies. Financial statements Notes to the financial statements 98 BisichiPLC Financial statements Notes to the financial statements 37. DEBTORS 2021 £’000 2020 £’000 Amounts due within one year: Amountsduefromsubsidiaryundertakings 2,421 3,709 Otherdebtors 94 85 Jointventure 1,065 952 Prepaymentsandaccruedincome 56 36 3,636 4,782 Amounts due in more than one year: Deferredtaxation 220 248 220 248 Amountsduewithinoneyearareheldatamortisedcost.TheGroupappliesasimplifiedapproachtomeasurethelossallowance fortradereceivablesusingthelifetimeexpectedlossprovision.TheGroupappliesageneralapproachonallotherreceivables.The generalapproachrecogniseslifetimeexpectedcreditlosseswhentherehasbeenasignificantincreaseincreditrisksinceinitial recognition.Thecompanyhasreviewedandassessedtheunderlyingperformanceandresourcesofitscounterpartiesincludingits subsidiaryundertakingsandjointventures. 38. CREDITORS 2021 £’000 2020 £’000 Amounts falling due within one year: Jointventure 156 156 Othertaxationandsocialsecurity 64 63 Othercreditors 164 188 LeaseLiabilities 26 29 Accrualsanddeferredincome 44 127 454 563 Amounts falling due in more than one year: LeaseLiabilities 20 16 LeaseliabilitiescompriseofleasesonMotorvehicleswithremainingleasesof1-3years.Withtheexceptionofshort-termleases andleasesoflow-valueunderlyingassets,eachleaseisreflectedonthebalancesheetasaright-of-useassetandaleaseliability. 9999BisichiPLC Financial statements Notes to the financial statements 39. RELATED PARTY TRANSACTIONS At31 December Duringtheyear At31December Amountsowed byrelatedparty £’000 Costs recharged/ accrued(to)/ byrelated party £’000 Cashpaid (to)/by relatedparty £’000 Related party: BlackWattleColliery(Pty)Ltd(note(a)) (637) (923) 1,617 NinghiMarketingLimited(note(b)) (102) - - As at 31 December 2021 (739) (923) 1,617 BlackWattleColliery(Pty)Ltd(note(a)) (1,331) (958) - NinghiMarketingLimited(note(b)) (102) - - As at 31 December 2020 (1,433) (958) - (a) Black Wattle Colliery (Pty) Ltd–BlackWattleColliery(Pty)LtdisacoalminingcompanybasedinSouthAfrica. (b) Ninghi Marketing Limited–NinghiMarketingLimitedisadormantcoalmarketingcompanyincorporatedinEngland&Wales. BlackWattleColliery(Pty)LtdandNInghiMarketingLimitedaresubsidiariesofthecompany. Inadditiontotheabove,thecompanyhasissuedacompanyguaranteeofR20,061,917(2020:R20,061,917)(SouthAfricanRand) tothebankersofBlackWattleColliery(Pty)Ltdinordertocoverbankguaranteesissuedtothirdpartiesinrespectofthe rehabilitationofminingland. Aprovisionof£102,000hasbeenraisedagainsttheamountowingbyNinghiMarketingLimitedinprioryearsasthecompanyisdormant. In2012aloanwasmadetooneofthedirectors,MrARHeller,for£116,000.FurtherdetailsontheloancanbefoundinNote28of theGroupfinancialstatements. UnderFRS101,thecompanyhastakenadvantageoftheexemptionfromdisclosingtransactionswithotherwhollyownedGroup companies.Detailsofotherrelatedpartytransactionsaregiveninnote28oftheGroupfinancialstatements. 41. EMPLOYEES 2021 £’000 2020 £’000 Theaverageweeklynumbersofemployeesofthecompanyduringtheyearwereasfollows: Directors&administration 5 5 Staffcostsduringtheyearwereasfollows: Salaries 1,426 758 Socialsecuritycosts 189 97 Pensioncosts 31 28 Sharebasedpayments - - 1,646 883