BISICHI PLC — Annual Report (ESEF) 2022

Apr 28, 2023

Bisichi PLC Annual Report 2022

A tribute to Sir Michael Heller Kt MA Chairman 1981-2023

It was with great sadness that the Board of Bisichi announced the death of its Chairman, Sir Michael Heller Kt MA (1936-2023) on the 30th January 2023. Qualified as an accountant, but became a businessman and philanthropist of considerable stature, whose achievements were recognised with a knighthood in 2013. Instrumental in the development of several companies, including Bisichi, Sir Michael’s focussed direction and decision making, wise advice and moral compass, were pivotal to the Company’s success and will be sorely missed. Meticulously watching cash flow, and ensuring that the Company always had regular income, was the cornerstone of Sir Michael’s business strategy. To a very great degree, this explains why Bisichi has performed so well when so many of its peers no longer exist. Fortunately, despite being unwell and in hospital, Sir Michael was able to appreciate the Company’s success in 2022. In his typically humorous fashion, he took enormous pleasure in telling the nurses at his bedside how well the Company had done. The greatest legacy that the Board can give him is to continue the work that he so tirelessly put in to the development of the Company, and to continue its growth. Thank you Sir Michael for everything that you have done: the Company is greatly indebted to you.

Strategic report

The Directors present the Strategic Report of the company for the year ending 31 December 2022. The aim of the Strategic Report is to provide shareholders with the ability to assess how the Directors have performed their duty to promote the success of the company for the collective benefit of shareholders.

Contents

STRATEGIC REPORT

• Chairman’s Statement 4
• Principal activity, strategy & business model 5
• Mining Review 7
• Sustainable development 19
• Principal risks & uncertainties 24
• Financial & performance review 24

GOVERNANCE

• Directors and advisors 31
• Five year summary 32
• Financial calendar 32
• Directors’ report 39
• Statement of the Chairman of the Remuneration committee 40
• Annual remuneration report 54
• Audit committee report 56
• Values’ certificates 57
• Directors’ responsibilities statement 58
• Independent auditor’s report 68

FINANCIAL STATEMENTS

• Consolidated income statement 69
• Consolidated statement of other comprehensive income 70
• Consolidated balance sheet 72
• Consolidated statement of changes in shareholders’ equity 73
• Consolidated cash flow statement 74
• Group accounting policies 82
• Notes to the financial statements 108
• Company balance sheet 109
• Company statement of changes in equity 110
• Company accounting policies 110

2 Bisichi PLC

Strategic Report

During the year, a disconnect in global energy markets contributed to an increase in the weekly Free on Board (FOB) coal price from Richards Bay Coal Terminal (API4 price) from $125 per metric tonne at the end of 2021 to a peak of over $360 in August. Overall, the API4 price averaged $273 in 2022 compared to $125 in 2021. The higher export prices achievable for our coal along with higher domestic prices, particularly during the second half of the year, contributed significantly to the increase in Group revenue and profitability during the year. Revenues for the year would have been even better if we had not encountered constraints in transporting coal for export on the South African rail network, constraints which were beyond our control. For this reason, exports during the year decreased to 262,000 metric tonnes compared to 320,000 metric tonnes in 2021.

At Black Wattle, the Group’s South African coal mining operation, our transition into new mining areas impacted adversely our coal production, particularly during the first half of the year. As previously reported, the transition into the new mining areas was completed in July last year and in the second half of the year Black Wattle achieved improved production of 0.52million metric tonnes compared to 0.30million metric tonnes in the first half of the year. The mine achieved production of 0.82million metric tonnes in 2022 compared to 1.05million metric tonnes in 2021. The increases in our reserves, plant and equipment that are evident on the balance sheet are mainly attributable to the costs of completing the development of the new mining areas which will be mined throughout 2023. Despite the lower coal production from Black Wattle, at Sisonke Coal Processing we were able maintain the levels of coal processed. During the year the Group sold 1.29million metric tonnes compared to 1.45million metric tonnes of coal in 2021. For the year, the Group reported £95.1million in revenue (2021: £50.5million) with the higher prices achievable for our coal offsetting the lower quantity of coal sold.

Looking forward into 2023, we have already seen coal prices in the export market come back down to similar levels last seen at the beginning of 2022. With the outlook for global energy demand less certain, your management will be focussing on improving production levels at Black Wattle and keeping operating costs low. We continue to mitigate the uncertainties in transporting coal for export on the South African rail network by maintaining diversified sales through the domestic market. We are pleased to include in our annual report this year our new climate change report on page 11. The Group recognises that climate change represents one of the most significant challenges facing the world today and supports the goals of the Paris Agreement and the UN Framework Convention on Climate Change. The Group recognises the need, and is committed to, diversifying its future business activities into areas outside of coal. The Group is continually looking at alternative independent mining and renewable energy related opportunities, as well as new opportunities to add to our existing UK property and listed equity investment portfolios. In the interim, we continue to work closely with Vunani Mining, our BEE partner in Black Wattle and Sisonke Coal processing, in being responsible stewards of our legacy coal operations taking into account the climate-related risks outlined in our climate report and the impact these risks may have on all our stakeholders.

Chairman’s Statement

I am very pleased to report to shareholders that for the year ended 31 December 2022, your company made a profit before interest, tax, depreciation and amortisation (EBITDA) of £70.0million (2021: £50.8million) and an operating profit before depreciation, fair value adjustments and exchange movements (Adjusted EBITDA) of £67.7million (2021: £50.3million). These strong earnings for the Group can be attributed to a strong performance from Sisonke Coal Processing, the Group’s South African coal processing operation which benefited from significantly improved prices in all its markets.# Strategic Report

Principal activity, strategy & business model

The company carries on business as a mining company and its principal activity is coal mining and coal processing in South Africa. The company’s strategy is to create and deliver long term sustainable value to all our stakeholders through our business model which can be broken down into three key areas:

1. Acquisition & investment
2. Production & sustainability
3. Processing & marketing

The Group continues to oversee responsibly its existing mining and processing operations in South Africa as well as actively to seek and evaluate new alternative mining related opportunities. The Group aims to achieve this through new commercial arrangements. In addition, we seek to balance the high risk of our mining operations with a dependable cash flow from our UK property investment operations and listed equity investment portfolios. The company primarily invests in retail property across the UK as well as residential property development. The UK Retail property portfolio is managed by London & Associated Properties PLC whose responsibility is to actively manage the portfolio to improve rental income and thus enhance the value of the portfolio over time.

The Group strives to mine its remaining South African coal reserves in an economical and sustainable manner that delivers 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.

Mining review

Despite mining and logistical challenges, 2022 was an unprecedented year in terms of performance for our South African coal mining and processing operations. Higher coal prices contributing strongly to the profitability of the Group. With more uncertainty in the coal market going into 2023, management will be focussing on improving production levels and keeping operating costs low.

Production and operations

The transition to new mining areas at Black Wattle, our South African mining operation, impacted production in 2022, particularly in the first half of the year. For the year, the mine achieved production of 0.82 million metric tonnes compared to 1.05 million metric tonnes in 2021. Looking forward, both our mining contractors have fully transitioned into the new mining area where mining conditions are expected to improve steadily over the course of 2023. In addition, management will be focussing on keeping operating costs low in light of global inflationary pressures that started to impact our operations during the course of 2022. We continue to work closely with Vunani Mining, our BEE partner in Black Wattle and Sisonke Coal processing, in being responsible stewards of our legacy coal operations, which have a life of mine of seven years, taking into account the climate related risks outlined in our climate report on page 11 and the impact these risks may have on all our stakeholders.

Main trends/markets

The disconnect in global energy markets in 2022 had a significant impact on demand and prices achievable for our coal over the year. In the international market the average weekly price of Free On Board (FOB) Coal from Richards Bay Coal Terminal (API4 price) averaged $273 in 2022 compared to $125 in 2021. The higher prices, along with a stronger US Dollar compared to the South African Rand, resulted in the Group achieving an average Rand price of R2,770 per tonne of export coal sold from the mine in 2022 compared to R1,129 in 2021. The Group’s export sales are via Richards Bay Coal Terminal, primarily under the Quattro programme which allows junior black- economic empowerment coal producers direct access to the coal export market via the terminal. During the second half of the year exports were limited by constraints in transporting coal for export on the South African rail network, exports volumes from our South African operations decreased during the year to 262,000 metric tonnes compared to 320,000 metric tonnes in 2021. In light of the export constraints, the Group continued to supply the majority of its coal to the South African domestic market in 2022. The strong demand in the international market contributed to higher domestic prices achievable for our coal, particularly in the second half of the year. For the year, the Group achieved an average domestic price of R277 per tonne coal sold compared to R270 in 2021. Domestic sales volumes from our South African operations decreased slightly during the year to 1.03 million metric tonnes (2021: 1.13 million metric tonnes) mainly due to a build of coal stocks at year end. In 2022, the Group achieved an average Rand price per tonne of coal sold of R1,327 compared to R951 in 2021. The higher coal prices contributed to the increase in Group revenue during the year offsetting lower sales volumes.

Looking forward into 2023, in the first quarter we have seen API4 prices average $145 and uncertainties remain, particularly with regard to the outlook for the international coal price as well as the impact of continued constraints in transporting coal for export on the South African rail network. In light of this, management will be focussing in 2023 on improving production levels, maintaining a diversified sales market, and keeping operating costs low.

Sustainable development

The Group’s South African operations continue to strive to conduct business in a safe, environmentally and socially responsible manner. Some highlights of our Health, Safety and Environment performance in 2022:

• The Group’s South African operations recorded 2 Lost time Injuries during 2022 (2021: Two).
• No cases of Occupational Diseases were recorded.
• Zero claims for the Compensation for Occupational Diseases were submitted.

In South Africa, the new government regulated Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2020 (New Mining Charter) came into force from March 2020. The New Mining Charter is a regulatory instrument that facilitates sustainable transformation, growth and development of the mining industry. The Group is committed to fully complying with the New Mining Charter and providing adequate resources to this area in order to ensure opportunities are expanded for historically disadvantaged South Africans (HDSAs) to enter the mining and minerals industry. In addition, we continue to adhere and make progress in terms of our Social and Labour Plan and our various BEE initiatives. A fuller explanation of these can be found in our Sustainable Development Report on page 7.

During the year the Group continued with its various employee and community related bursary and training initiatives. One of the key highlights for the year was the successful completion by Takalani Sandani, Mine Manager of Black Colliery, in his bursary studies. On behalf of the Group, the Board congratulates Takalani in obtaining his Masters of Business Administration from the Gordon Institute of Business Science, an affiliate of the University of Pretoria.

(Image of Takalani Sandani at his Graduation)

Prospects

Management would like to thank all our South African employees and stakeholders for their significant contribution to the Group’s performance in 2022. Going forward, your management are optimistic that 2023 will be another successful year for our South African operations.

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.

In the UK, we have seen rental revenue from our retail property portfolio remain stable in 2022. The Group billed revenue from our directly owned property portfolio of £1.11million (2021: £1.11million) during the year. The Group continues to hold its joint venture development investment in West Ealing, with London & Associated Properties PLC and Metroporp Properties Real Estate Ltd. A final decision on whether to sell the land or build out the flats has yet to be taken.

As previously announced, we are pleased to welcome John Heller to the Board of Bisichi PLC as a non-executive director. The appointment took effect on the 29 March 2023. John is the Chairman and Managing Director of London & Associated Properties PLC which holds a 41.6% stake in Bisichi and a Director of Intu Debenture PLC. John’s valuable experience in property investment and management, makes him an excellent addition to the Board. John’s knowledge and experience will enhance the Group’s strategy of growing the company’s existing and future spread of business interests and investments, and will help to offset the loss of our late Chairman, Sir Michael Heller.

Finally, in light of the strong results achieved for the year and the performance of our South African operations, the Directors propose a total year-end dividend per share of 12p (2021: 8p) made up a final dividend of 4p (2021: 4p) and a special dividend of 8p (2021: 2p). The final and special dividends proposed will be payable on Friday 28 July 2023 to shareholders registered at the close of business on 7 July 2023. This takes the total dividends per share for the year to 22p (2021: 6p).

On behalf of the Board, our late Chairman, and shareholders, I would like to thank all of our staff for their hard work and dedication during the course of the year.

Andrew Heller
Executive Chairman & Managing Director
26 April 2023# Health, Safety & Environment (HSE)

The Group is committed to creating a safe and healthy working environment for its employees and the health and safety of our employees is of the utmost importance. HSE performance in 2022:
* No cases of Occupational Diseases were recorded.
* Zero claims for the Compensation for Occupational Diseases were submitted.
* No machines operating at Black Wattle exceeded the regulatory noise level.
* The Group’s South African operations recorded 2 Lost time Injuries during 2022.

In addition to the required personnel appointments and assignment of direct health and safety responsibilities on the mine, a system of Hazard Identification and Risk Assessments has been designed, implemented and maintained at Black Wattle and at Sisonke Coal Processing. Health and Safety training is conducted on an ongoing basis. We are pleased to report all relevant employees to date have received training in hazard identification and risk assessment in their work areas. A medical surveillance system is also in place which provides management with information used in determining measures to eliminate, control and minimise employee health risks and hazards and all Occupational Health hazards are monitored on an ongoing basis.

Various systems to enhance the current HSE strategy have been introduced as follows:
* In order to improve hazard identification before the commencing of tasks, mini risk assessment booklets have been distributed to all mine employees and long term contractors on the mine.
* Dover testing is conducted for all operators. Dover testing is a risk detection and accident reduction tool which identifies employees’ problematic areas in their fundamental skills in order to receive appropriate training.
* A Job Safety Analysis form is utilised to ensure effective identification of hazards in the workplace.
* In order to capture and record investigation findings from incidents, an incident recording sheet is utilised by line management and contractors.
* Black Wattle Colliery utilises ICAM (Incident Cause Analysis Method).
* Ongoing training on first aid is being conducted with all employees involved with this discipline.

The Group continues to monitor and adhere to all of the South African government’s Covid-19 related guidelines and regulations including all updates and advice from the National Department of Health, the Department of Mineral Resources and Energy and the Office of the President.

Black Wattle Colliery Social and Labour Plan (SLP) and Community Projects

Black Wattle Colliery is committed to true transformation and empowerment as well as poverty eradication within the surrounding and labour providing communities. Black Wattle is committed to providing opportunities for the sustainable socio-economic development of its stakeholders, such as:

• Employees and their families, through Skills Development, Education Development, Human Resource Development, Empowerment and Progression Programmes.
• Surrounding and labour sending communities, through Local Economic Development, Rural and Community Development, Enterprise Development and Procurement Programmes.
• Empowering partners, through Broad-Based Black Economic Empowerment (BBBEE) and Joint Ventures with Historically Disadvantaged South African (HDSA) new mining entrants and enterprises.

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.

• 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 Rockland Townsnip was completed.
* 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 2023, making interlocking blocks for building homes
* One HDSA Male completed his University studies in the 2022 academic year.
* Two HDSA females completed their University studies in the 2022 academic year.
* Two local community HDSA members were enrolled for the new academic year.

Environment & environment management programme

South Africa

Under the terms of the mine’s Environmental Management Programme approved by the Department of Mineral Resources and Energy (DMRE), Black Wattle undertakes a host of environmental protection activities to ensure that the approved Environmental Management Plan is fully implemented. In addition to these routine activities, Black Wattle regularly carries out environmental monitoring activities on and around the mine, including evaluation of ground water quality, air quality, noise and lighting levels, ground vibrations, air blast monitoring, and assessment of visual impacts. In addition to this Black Wattle also performs quarterly monitoring of all boreholes around the mine to ensure that no contaminated water filters through to the surrounding communities. Black Wattle is fully compliant with the regulatory requirements of the Department of Water Affairs and Forestry and has an approved water use licence. Black Wattle Colliery has substantially improved its water management by erecting and upgrading all its pollution control dams in consultation with the Department of Water Affairs and Forestry. A performance assessment audit was conducted to verify compliance to our Environmental Management Programme and no significant deviations were found.

United Kingdom

The Group’s UK activities are principally retail property investment as well as residential property development whereby we provide or develop premises which are rented to retail businesses or sold on to end users. We seek to provide tenants and users in both these areas with good quality premises from which they can operate or reside in an environmentally sound manner.

Procurement

In compliance with the Mining Charter and the Mineral and Petroleum Resource Development Act, the Group’s South African operations has implemented a BBBEE-focussed procurement policy which strongly encourages our suppliers to establish and maintain BBBEE credentials. At present, BBBEE companies provide approximately 90 percent of Black Wattle’s equipment and services.

Strategic Report

Sustainable development

Strategic Report

Sustainable development

Mining Charter

In South Africa, the new government regulated Broad-Based Socio-Economic Empowerment Charter for the Mining and Minerals Industry, 2020 (New Mining Charter) came into force from March 2020. The New Mining Charter is a regulatory instrument that facilitates sustainable transformation, growth and development of the mining industry. The Group’s mining operation is expected to reach various levels of compliance to the New Mining Charter over a period of five years from March 2020. The Group is committed to providing adequate resources to this area in order to ensure full compliance to the New Mining Charter is achieved over the transitional period. As part of Black Wattle’s commitment to the New Mining Charter, the company seeks to:

• Expand opportunities for historically disadvantaged South Africans (HDSAs), including women and youth, to enter the mining and minerals industry and benefit from the extraction and processing of the country’s resources;
• Utilise the existing skills base for the empowerment of HDSAs; and
• Expand the skills base of HDSAs in order to serve the community.

Employment & diversity

In the UK, the Board of Bisichi PLC at 31 December 2022 comprised of:

	Number of board members	Percentage of the board	Number of senior positions on the board	Number in executive management	Percentage of Executive management
Men	7	100%	3	4	100%
Women	0	0%	0	0	0%
Not specified/prefer not to say	0	0%	0	0	0%

	Number of board members	Percentage of the board	Number of senior positions on the board	Number in executive management	Percentage of Executive management
White British or other White (including minority white groups)	6	86%	3	4	100%
Mixed/Multiple Ethnic Groups	0	0%	0	0	0%
Asian/Asian British	1	14%	0	0	0%
Black/African/Caribbean/Black British	0	0%	0	0	0%
Other ethnic group, including Arab	0	0%	0	0	0%

The above data has been collected through self-reporting by the Board members. Questions asked include gender identity or sex and ethnic background.# Strategic Report (Financial) | Performance Review

Performance

The key performance indicators of the Group’s South African mining operations are presented in South African Rand and UK Sterling as follows:

Bisichi PLC

Strategic Report | Financial | Performance Review

A breakdown of the quantity of coal sold and revenue of the Group’s South African mining operations are presented in metric tonnes and South African Rand as follows:

	Domestic ‘000	Export ‘000	2022 Total ‘000	2021 Total ‘000
Quantity of coal sold in tonnes	1,025	262	1,287	1,127
	Domestic R’000	Export R’000	2022 Total R’000	2021 Total R’000
Revenue	795,132	1,091,144	1,886,276	530,905
Net Revenue per tonne of coal sold	774	3,770	1,384	470
Mining and washing costs per tonne of coal sold	(596)	(457)
Operating profit per tonne of coal sold before other operating costs and depreciation	788	158

The quantity of coal sold can be defined as the quantity of coal sold in metric tonnes by the Group in any given period. Net Revenue per tonne of coal sold can be defined as the revenue price achieved less transportation and loading costs per metric tonne of coal sold. Total net revenue per tonne of coal sold for the Group’s mining and processing operations increased for the year from R470 per tonne of coal sold in 2021 to R1,384 in 2022, attributable to the average price increases achieved in both the export and domestic market. A decrease in mining production from Black Wattle and an increase in coal inventories at the end of the year offset an increase in buy-in coal processed during the year resulting in the quantity of coal sold for the year decreasing to 1.287million tonnes (2021: 1.447million tonnes).

Overall, revenue from the Group’s South African mining operations increased during the year to £1.886billion compared to revenue of £1.004billion in 2021 with the increase in revenue per tonne of coal sold offsetting the lower coal sales volumes, particularly in the export market. Mining and washing costs per tonne of coal sold during the year increased from R596 per tonne in 2021 to R596 per tonne in 2022 mainly due to increases in buy-in coal costs and mining costs per tonne from Black Wattle. This resulted in an increase in total mining and washing costs for the Group to £775.4million (2021: £891.9million). Other operating costs (excluding depreciation) of £12.08million (2021: £6.95million) include general administrative costs and administrative salaries and wages related to our South African mining operations that are incurred both in South Africa and in the UK. These costs are not significantly impacted by movements in mining production and coal processing. The increase during the year can mainly be attributed to higher salaries and wages costs attributable to the improved financial performance of the Group in the same period. Overall costs in South Africa were in line with management’s expectations and local inflation.

In summary, the movement in the Group’s Adjusted EBITDA from £5.0million in 2021 to £39.4million in 2022 can mainly be attributed to higher prices achievable from the Group’s South African coal processing operations. This offset the higher mining, washing and operating costs and lower coal sales volumes incurred in 2022. A further explanation of the mines operational performance can be found in the Mining Review on page 5.

Non-controlling interest | Black Wattle

As previously reported, the Group’s subsidiary Black Wattle Colliery (Pty) Ltd signed an agreement to acquire additional coal reserves during the year. The new reserves of 6.1million metric tonnes, extends the life of mine of Black Wattle to seven years and remains subject to regulatory approval. The acquisition was negotiated in conjunction with a re-negotiation of 2.1million metric tonnes of separate coal reserves previously acquired from the same seller, as previously announced in our 2018 annual report.

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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 on 12 April 2022. The total issued share capital in Black Wattle Colliery (Pty) Ltd was increased further from 1000 shares to 4000 shares at par of R1 through the following share issue:

• a subscription of 1 £GBP Share at par by Bisichi Mining (Exploration Limited), a 75% subsidiary of the Group;
• a subscription of 1 £GBP Share at par by Vunani Mining (Pty) Ltd

The £GBP 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 £GBP shares held by Vunani Mining (Pty) Ltd from the date of issue of the shares (12 April 2022). Details of Vunani’s non-controlling interest held at year end can be found in the Non-controlling interest note on page 102.

UK property investment

Performance

The Group’s portfolio is managed actively by London & Associated Properties plc. Rental performance was marginally below levels achieved in 2022. Net property revenue (excluding joint ventures and service charge income) across the portfolio decreased during the year to £1.108million (2021: £1.119million). The property portfolio was externally valued at 31 December 2022 and the value of UK investment properties attributable to the Group at year end decreased marginally to £10.465million (2021: £10.525million).

Joint venture property investments

The Group holds a £0.6million (2021: £0.6million) joint venture investment in Dragon Retail Properties Limited, a UK property investment company. The open market value of the company’s share of investment properties included within its joint venture investment in Dragon Retail Properties decreased marginally during the year to £1.019million (2021: £1.040million).

The Group continues to hold a £0.5million (2021: £0.5million) 50% joint venture investment in West Ealing Projects Limited, a UK unlisted property development company. West Ealing Projects Limited’s only asset is a property development in West Ealing, London. The carrying value of the Group’s share of the trading property inventory included within this development is valued at £4.1million (2021: £3.7million). The joint venture has obtained planning consent for a residential development of 94 flats. During 2022 the joint venture explored the possibility of a consented land sale but did not receive sufficiently attractive offers during a period of extreme building cost inflation to persuade the venture to sell. A final decision on whether to sell the land or build out the flats has yet to be taken and we look forward to updating shareholders further in due course.

The Group continues to hold a one third joint venture investment in Development Physics Limited, a UK unlisted property development company. The remaining two thirds is held equally by London & Associated Properties PLC and Metroprop Real Estate Ltd. The company was set up with the purpose of delivering a residential development of 77 flats and 4 town houses in Purley, London. Development Physics acquired a series of options on the site and registered for planning permission for its development. The planning application submitted in 2022 was rejected in January 2023 despite being recommended for approval by the planning officer. The joint venture has appealed this decision and we will update shareholders on progress in due course. At year end, the negative carrying value of the investment held by the Group was £14,000 (2021: £3,000).

Overall, the Group achieved net property revenue of £1.2million (2021: £1.2million) for the year which includes the company’s share of net property revenue from its investment in joint ventures of £108,000 (2021: £88,000).

Other Investments

During the year the Group’s non-current investments held at fair value through profit and loss increased from £5.6million in 2021 to £12.6million due to net additions during the year of £8.2million (2021: £1.2million) and gains from investments of £0.7million (2021: £0.7million). The investments comprise of £6.8million (2021: £1.56million) of investments listed on stock exchanges in the United Kingdom and £5.8million (2021: £2.07million) of investments listed on overseas stock exchanges. The Group’s listed investments are primarily in entities involved in extractive and energy related (including renewable energy) business activities.

29

Bisichi PLC

Strategic Report | Financial | Performance Review

Cash flow generated from operating activities increased compared to the prior year to £30.7million (2021: £4.4million). This can mainly be attributed to the increase in operating profit during the year of £39.0million (2021: £3.4million) net of taxes paid of £7.9million (2021: refund of £0.2million) and an increase in inventories of £4.0million (2021: decrease £0.1million). The operating profit can mainly be attributed to the improved coal revenue per tonne achieved during the year.Investing cash flows primarily reflect net acquisitions of listed equity investments of £8.1 million (2021: £0.9 million) and capital expenditure during the year of £8.5 million (2021: £1.8 million) which can mainly be attributable to mine development costs at Black Wattle. As at year end the Group’s mining reserves, plant and equipment had a carrying value of £16.4 million (2021: £9.0 million) with capital expenditure being offset by depreciation of £1.1 million (2021: £2.5 million) and exchange translation movements of £0.6 million (2021: £0.4 million) for the year. Cash outflows from financing activities includes a net increase in borrowings of £0.5 million (2021: decrease £0.3 million). In addition, dividends were paid during the year to equity shareholders of £0.6 million (2021: £Nil) and to minority shareholders of £7.0 million (2021: £Nil). Overall, the Group’s cash and cash equivalents increased during the year by £6.9 million (2021: £1.5 million). The Group’s net balance of cash and cash equivalents (including bank overdrafts) at year end was £7.4 million (2021: £0.5 million). The Group has considerable financial resources available at short notice including cash and cash equivalents (excluding bank overdrafts) of £10.6 million (2021: £3.0 million) and listed investments of £13.5 million (2021: £4.3 million) as at year end. The above financial resources totalling £24.1 million (2021: £7.3 million). The net assets of the Group reported as at year end were £35.6 million (2021: £17.8 million) and total assets at £63.8 million (2021: £38.1 million). Liabilities increased from £20.3 million to £28.2 million during the year primarily due to an increase in trade and other payables from £10.7 million to £13.3 million as well as an increase in tax payable from £0.7 million to £4.3 million. Further details on the Group’s cash flow and financial position are stated in the Consolidated Cash Flow Statement on page 73 and the Consolidated Balance Sheet on page 70 and 71. The following table summarises the main components of the consolidated cash flow for the year:

Year ended 31 December 2022 £’000	Year ended 31 December 2021 £’000
Cash flow generated from operations before working capital and other items	39,768
Cash flow from operating activities	30,698
Cash flow from investing activities	(16,584)
Cash flow from financing activities	(7,206)
Net (decrease) / increase in cash and cash equivalents	6,908
Cash and cash equivalents at 1 January	482
Exchange adjustment	(25)
Cash and cash equivalents at 31 December	7,365
Cash and cash equivalents at 31 December comprise:
Cash and cash equivalents as presented in the balance sheet	10,590
Bank overdrafts (secured)	(3,225)
	7,365

30 Bisichi PLC

Strategic Report

Financial & Performance Review

Loans

South Africa

The Group has a structured trade finance facility with Absa Bank Limited for R75 million held by Sisonke Coal Processing (Pty) Limited, a 100% subsidiary of Black Wattle Colliery (Pty) Limited. This facility comprises of an R75 million revolving facility to cover the working capital requirements of the Group’s South African operations. The facility is renewable annually and is secured against inventory, debtors and cash that are held in the Group’s South African operations.

United Kingdom

The Group holds a 5 year term facility of £3.9m with Julian Hodge Bank Limited at an initial LTV of 40%. The loan is secured against the company’s UK retail property portfolio. The amount repayable on the loan at year end was £3.8 million. The debt package has a five year term and is repayable at the end of the term in December 2024. The overall interest cost of the loan is 4.00% above the Bank of England base rate. The loan is secured by way of a first charge over the investment properties in the UK which are included in the financial statements at a value of £10.5 million. 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 considers 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 decisions that would, most likely promote the success of the Group for the benefit of its members as a whole as outlined in the matters below:

• The likely consequences of any decision in the long term: see Principal activity, strategy & business model on page 4 and Principal Risks and Uncertainties on page 19;
• The interests of the Group’s employees; ethics and compliance; fostering of the Company’s business relationships with suppliers, customers and others; and the impact of the Group’s operations on the community and environment: see Sustainability report on page 7;
• The need to act fairly between members of the Company: see the Corporate Governance section on page 34.

Future prospects

In the first quarter of the 2023, we have seen the API4 price average $145 and uncertainties remain, particularly in regard to the sustainability of the higher international coal price and the impact of continued constraints in transporting coal for export on the South African rail network. In light of this, management will be focussing on improving production levels, maintaining a diversified sales market and keeping operating costs low.

The Group continues to seek and evaluate opportunities to transition into alternative mining related opportunities through new commercial arrangements. In the UK, management is looking forward to progressing its property development opportunities in West Ealing and Development Physics as well as seeking other opportunities to expand upon on its property and equity investment portfolios.

This is in line with the Group’s overall strategy of balancing the high risk of our mining operations with a dependable cash flow and capital appreciation from our UK property investment operations and equity investments.

To date, the Group’s financial position has remained strong and at present, the Group has adequate financial resources to ensure the Group remains viable for the foreseeable future and that liabilities are met. A full going concern and viability assessment can be found in the Directors report on page 38. Further information on the outlook of the company can be found in both the Chairman’s Statement on page 2 and the Mining Review on page 5 which form part of the Strategic Report.

Signed on behalf of the Board of Directors

Garrett Casey
Finance Director
26 April 2023

30 3131Bisichi PLC

Governance

• ANDREW R HELLER MA, ACA (Chairman & Managing Director)
• GARRETT CASEY CA (SA) (Finance Director)
• ROBERT GROBLER Pr Cert Eng (Director of mining)
• O+ CHRISTOPHER A JOLL MA (Non-executive)
  Christopher Joll was appointed a Director on 1 February 2001. He has held a number of non-executive directorships of quoted and un-quoted companies and currently runs his own event management business. He is also a published author, lecturer and a director of documentary films.
• O * JOHN A SIBBALD BL (Non-executive)
  Sibbald has been a Director since 1988. After qualifying as a Chartered Accountant he spent over 20 years in stockbroking, specialising in mining and international investment.
• JOHN WONG ACA, CFA (Non-executive)
  John Wong was appointed a Director on 15 October 2020. After training as a Chartered accountant he has worked in the fund management industry for almost 20 years and has extensive experience in investment management, in particular within the mining sector.
• JOHN A HELLER (Appointed 29 March 2023) (Non-executive)
  John Heller was appointed a Director on 29 March 2023. John Heller is the Chairman and Chief Executive of London & Associated Properties PLC which holds a 41.6% stake in Bisichi. John Heller has extensive knowledge and experience in property investment and management.

SECRETARY AND REGISTERED OFFICE

Garrett Casey CA (SA)
12 Little Portland Street
London W1W 8BJ

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

EMAIL

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 & Partners, Johannesburg

STOCKBROKERS

Shore Capital Stockbrokers Limited

REGISTRARS AND TRANSFER OFFICE

Link Group
10th Floor, Central Square
29 Wellington Street
Leeds LS1 4DL

UK telephone: 0371 664 0300
International telephone: +44 (0) 371 664 0300

Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 8.00 a.m. – 5.30 p.m., Monday to Friday excluding public holidays in England and Wales.Website: www.bisichi.co.uk
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 committee.

32 Bisichi PLC
Governance

	2022 £’000	2021 £’000	2020 £’000	2019 £’000	2018 £’000
Consolidated income statement items
Revenue	95,111	50,520	29,805	48,106	49,945
Operating profit/(loss)	38,976	3,403	(4,493)	3,658	6,526
Profit/(Loss) before tax	38,014	2,501	(5,196)	3,027	5,959
Trading profit/(loss) before tax	37,127	1,559	(3,881)	4,493	6,397
Revaluation and impairment profit/(loss) before tax	887	942	(1,315)	(1,466)	(438)
EBITDA	39,980	5,849	(2,387)	5,868	8,587
Operating profit before depreciation, fair value adjustments and exchange movements (adjusted EBITDA)	39,363	5,028	(1,111)	7,457	9,088
Consolidated balance sheet items
Investment properties	10,465	10,525	10,270	11,565	13,045
Other non-current investments	13,631	4,761	3,001	1,629	1,357
	24,096	15,286	13,271	13,194	14,402
Current Investments held at fair value	886	685	833	1,119	887
	24,982	15,971	14,104	14,313	15,289
Other assets less liabilities less non-controlling interests	8,820	1,541	1,969	5,619	4,280
Total equity attributable to equity shareholders	33,802	17,512	16,073	19,932	19,569
Net assets per ordinary share (attributable)	316.6p	164.0p	150.5p	186.7p	183.3p
Dividend per share	22.00p	6.00p	0p	1.00p	6.00p

FINANCIAL CALENDAR
06 June 2023 Annual General Meeting
Late August 2023 Announcement of half-year results to 30 June 2023
Late April 2024 Announcement of results for year ending 31 December 2023

Five year summary

33 Bisichi PLC
Governance Review

Review of business, future developments and post balance sheet events

The Group continues its mining activities. Income for the year was derived from sales of coal from its South African operations. The Group also has a property investment portfolio for which it receives rental income and joint venture investments in two UK residential property developments. The results for the year and state of affairs of the Group and the company at 31 December 2022 are shown on pages 87 to 115 and in the Strategic Report on pages 2 to 30. Future developments and prospects are also covered in the Strategic Report and further details of any post balance sheet events can be found in note 32 to the financial statements. Over 98 per cent of staff are employed in the South African coal mining industry – employment matters and health and safety are dealt with in the Strategic Report.

The management report referred to in the Director’s responsibilities statement encompasses this Director’s Report and Strategic Report on pages 7 to 30.

Corporate responsibility

Environment
The environmental considerations of the Group’s South African coal mining operations are covered in the Strategic Report on pages 7 to 30.
The Group’s UK activities are principally property investment whereby premises are provided for rent to retail businesses and a joint venture investment in a UK residential property development in West Ealing. The Group seeks to provide those tenants with good quality premises from which they can operate in an efficient and environmentally friendly manner. Wherever possible, improvements, repairs and replacements are made in an environmentally efficient manner and waste re-cycling arrangements are in place at all the company’s locations.

Climate Change Reporting and Greenhouse Gas Emissions
The Group’s climate change report and details on its greenhouse gas emissions for the year ended 31 December 2022 can be found on page 11 of the Strategic Report.

Employment
The Group’s policy is to attract staff and motivate employees by offering competitive terms of employment. The Group provides equal opportunities to all employees and prospective employees including those who are disabled. The Strategic Report gives details of the Group’s activities and policies concerning the employment, training, health and safety and community support and social development concerning the Group’s employees in South Africa.

Dividend policy
As outlined in the Strategic report on page 3 the directors are proposing the payment of a final dividend of 12p (2021: 4p) and a special dividend of 8p (2021: 2p) per share for 2022. An interim dividend for 2022 of 10p (Interim 2021: 0p) has been paid on 3 February 2023. The total dividend per ordinary share for 2022 will therefore be 22p (2021: 6p) per ordinary share.

Investment properties and other properties
The investment property portfolio is stated at its open market value of £10,465,000 at 31 December 2022 (2021: £10,525,000) as valued by professional external valuers. The open market value of the company’s share of investment properties and development property inventory held at cost included within its investments in joint ventures is £4,812,000 (2021: £4,787,000).

Financial instruments
Note 22 to the financial statements sets out the risks in respect of financial instruments. The Board reviews and agrees overall treasury policies, delegating appropriate authority to the managing director. Treasury operations are reported at each Board meeting and are subject to weekly internal reporting.

Directors
The directors of the company for the year were Sir Michael Heller (ceased to be a director on 30 January 2023), A R Heller, G J Casey, C A Joll, R J Grobler (a South African citizen), J A Sibbald and J Wong.

Directors’ report
The directors submit their report together with the audited financial statements for the year ended 31 December 2022.

34 Bisichi PLC

Mr J Heller was appointed as a non- executive director by the Board on 29 March 2023 and offers himself for re-election. Mr J Heller is the Chairman and Managing Director of London & Associated Properties PLC which holds a 41.6% stake in Bisichi with extensive & valuable experience in property investment and management. The board recommends the re-election of Mr J Heller.

The director retiring by rotation is Mr G J Casey who offers himself for re-election. Mr G J Casey has been an executive director of the company since 2010. He is chartered accountant and has a contract of employment determinable at three months’ notice. The board recommends the re-election of Mr G J Casey.

No director had any material interest in any contract or arrangement with the company during the year other than as shown in this report.

Directors’ shareholdings
The interests of the directors in the shares of the company, including family and trustee holdings where appropriate, are shown on page 42 of the Annual Remuneration Report.

Substantial interests
The following have advised that they have an interest in 3 per cent. or more of the issued share capital of the company as at 31 December 2022:
London & Associated Properties PLC – 4,432,618 shares representing 41.52 per cent. of the issued capital. (Sir Michael Heller (Estate) is a shareholder of London & Associated Properties PLC).
Sir Michael Heller (Estate) – 330,117 shares representing 3.09 per cent. of the issued capital.
A R Heller – 785,012 shares representing 7.35 per cent. of the issued capital.
Stonehage Fleming Investment Management Ltd – 1,916,154 shares representing 17.95 per cent. of the issued share capital.

Disclosure of information to auditor
The directors in office at the date of approval of the financial statements have confirmed that as far as they are aware that there is no relevant audit information of which the auditor is unaware. Each of the directors has confirmed that they have taken all reasonable steps they ought to have taken as directors to make themselves aware of any relevant audit information and to establish that it has been communicated to the auditor.

Indemnities and insurance
The Articles of Association and Constitution of the company provide for them to indemnify, to the extent permitted by law, directors and officers (excluding the Auditor) of the companies, including officers of subsidiaries, and associated companies against liabilities arising from the conduct of the Group’s business. The indemnities are qualifying third-party indemnity provisions for the purposes of the UK Companies Act 2006 and each of these qualifying third-party indemnities was in force during the course of the financial year ended 31 December 2022 and as at the date of this Directors’ report. No amount has been paid under any of these indemnities during the year.
The Group has purchased directors’ and officers’ insurance during the year. In broad terms, the insurance cover indemnifies individual directors and officers against certain personal legal liability and legal defence costs for claims arising out of actions taken in connection with Group business.

Corporate Governance
The Board acknowledges the importance of good corporate governance. The paragraphs below set out how the company has applied this guidance during the year.

Principles of corporate governance
The Group’s Board appreciates the value of good corporate governance not only in the areas of accountability and risk management, but also as a positive contribution to business prosperity. The Board endeavours to apply corporate governance principles in a sensible and pragmatic fashion having regard to the circumstances of the Group’s business. The key objective is to enhance and protect shareholder value.

Board structure
The Board currently comprises the joint executive chairman and managing director, two other executive directors and four non-executive directors. Their details appear on page 41. The Board is responsible to shareholders for the proper management of the Group. The Directors’ responsibilities statement in respect of the accounts is set out on page 57. The non-executive directors have a particular responsibility to ensure that the strategies proposed by the executive directors are fully considered.# Directors’ report

Bisichi 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 financial matters.

The following Board committees, which have written terms of reference, deal with specific aspects of the Group’s affairs:

• The nomination committee comprises of two non-executive directors C A Joll (Chairman) and JA Sibbald as well as the executive chairman. The committee is responsible for proposing candidates for appointment to the Board, having regard to the balance and structure of the Board. In appropriate cases recruitment consultants are used to assist the process. Each director is subject to re-election at least every three years.
• The remuneration committee is responsible for making recommendations to the Board on the company’s framework of executive remuneration and its cost. The committee determines the contractual terms, remuneration and other benefits for each of the executive directors, including performance related bonus schemes, pension rights and compensation payments. The Board itself determines the remuneration of the non-executive directors. The committee comprises of two non- executive directors C A Joll (Chairman) and JA Sibbald. The company’s executive chairman is normally invited to attend meetings. The report on directors’ remuneration is set out on pages 39 to 53.
• The audit committee comprises of two non-executive directors C A Joll (Chairman) and JA Sibbald. Its prime tasks are to review the scope of external audit, to receive regular reports from the company’s auditor and to review the half-yearly and annual accounts before they are presented to the Board, focusing in particular on accounting policies and areas of management judgment and estimation. The committee is responsible for monitoring the controls which are in force to ensure the integrity of the information reported to the shareholders. The committee acts as a forum for discussion of internal control issues and contributes to the Board’s review of the effectiveness of the Group’s internal control and risk management systems and processes. The committee also considers annually the need for an internal audit function. It advises the Board on the appointment of external auditors and on their remuneration for both audit and non-audit work, and discusses the nature and scope of the audit with the external auditors. The committee, which meets formally at least twice a year, provides a forum for reporting by the Group’s external auditors. Meetings are also attended, by invitation, by the company executive chairman/ managing director and finance director.

The audit committee also undertakes a formal assessment of the auditors’ independence each year which includes:
* a review of non-audit services provided to the Group and related fees;
* discussion with the auditors of a written report detailing consideration of any matters that could affect independence or the perception of independence;
* a review of the auditors’ own procedures for ensuring the independence of the audit firm and partners and staff involved in the audit, including the regular rotation of the audit partner; and
* obtaining written confirmation from the auditors that, in their professional judgement, they are independent.

The audit committee report is set out on page 27. An analysis of the fees payable to the external audit firm in respect of both audit and non-audit services during the year is set out in Note 5 to the financial statements.

Performance evaluation – board, board committees and directors

The performance of the board as a whole and of its committees and the non- executive directors is assessed by the chairman/managing director and is discussed with the senior independent director. Their recommendations are discussed at the nomination committee prior to proposals for re-election being recommended to the Board. The performance of executive directors is discussed and assessed by the remuneration committee. The senior independent director meets regularly with the chairman and both the executive and non-executive directors individually outside of formal meetings. The directors will take outside advice in reviewing performance but have not found this necessary to date.

Bisichi PLC

Independent directors

The senior independent non-executive director is Christopher Joll. The other two independent non-executive directors are John Sibbald and John Wong. Christopher Joll has been a non-executive director for over twenty years, John Sibbald has been a non-executive director for over thirty years and John Wong was appointed to the Board on 15 October 2020. The Board encourages the non-executive directors to act independently. The board considers that their length of service does not, and has not, resulted in their inability or failure to act independently. In the opinion of the Board, Christopher Joll and John Sibbald continue to fulfil their role as independent non-executive directors. The independent directors regularly meet prior to Board meetings to discuss corporate governance issues.

Board and board committee meetings

The number of meetings during 2022 and attendance at regular Board meetings and Board committees was as follows:

	Meetings held	Meetings Attended
Sir Michael Heller
Board	5	4
Nomination committee	1	1
Audit committee	2	2
G R Heller
Board	5	5
Audit committee	2	2
J C Casey
Board	5	5
Audit committee	2	2
R Groler
Board	5	1
C A Joll
Board	5	5
Audit committee	2	2
Nomination committee	1	2
Remuneration committee	2	2
J A Sibbald
Board	5	2
Audit committee	2	0
Nomination committee	1	1
Remuneration committee	2	1
J Wong
Board	5	5

Internal control

The directors are responsible for the Group’s system of internal control and review of its effectiveness annually. The Board has designed the Group’s system of internal control in order to provide the directors with reasonable assurance that its assets are safeguarded, that transactions are authorised and properly recorded and that material errors and irregularities are either prevented or would be detected within a timely period. However, no system of internal control can eliminate the risk of failure to achieve business objectives or provide absolute assurance against material misstatement or loss.

The key elements of the control system in operation are:
* the Board meets regularly with a formal schedule of matters reserved to it for decision and has put in place an organisational structure with clearly defined lines of responsibility and with appropriate delegation of authority;
* there are established procedures for planning, approval and monitoring of capital expenditure and information systems for monitoring the Group’s financial performance against approved budgets and forecasts;
* UK property and financial operations are closely monitored by members of the Board and senior managers to enable them to assess risk and address the adequacy of measures in place for its monitoring and control. The South African operations are closely supervised by the UK based executives 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.

Bisichi PLC

There were no significant issues identified during the year ended 31 December 2022 (and up to the date of approval of the report) concerning material internal control issues. The directors confirm that the Board has reviewed the effectiveness of the system of internal control as described during the period.

Communication with shareholders

Communication with shareholders is a matter of priority. Extensive information about the Group and its activities is given in the Annual Report, which is made available to shareholders. Further information is available on the company’s website, www.bisichi.co.uk. There is a regular dialogue with institutional investors. Enquiries from individuals on matters relating to their shareholdings and the business of the Group are dealt with informatively and promptly.

Takeover directive

The company has one class of share capital, ordinary shares. Each ordinary share carries one vote. All the ordinary shares rank pari passu. There are no securities issued in the company which carry special rights with regard to control of the company. The identity of all substantial direct or indirect holders of securities in the company and the size and nature of their holdings is shown under the ‘Substantial interests’ section of this report above. A relationship agreement dated 15 September 2005 (the ‘Relationship Agreement’) was entered into between the company and London & Associated Properties PLC (‘LAP’) in regard to the arrangements between them whilst LAP is a controlling shareholder of the company.The Relationship Agreement includes a provision under which LAP has agreed to exercise the voting rights attached to the ordinary shares in the company owned by LAP to ensure the independence of the Board of Directors of the company. Other than the restrictions contained in the Relationship Agreement, there are no restrictions on voting rights or on the transfer of ordinary shares in the company. The rules governing the appointment and replacement of directors, alteration of the articles of association of the company and the powers of the company’s directors accord with usual English company law provisions. Each director is re-elected at least every three years. The company is not party to any significant agreements that take effect, alter or terminate upon a change of control of the company following a takeover bid. The company is not aware of any agreements between holders of its ordinary shares that may result in restrictions on the transfer of its ordinary shares or on voting rights. There are no agreements between the company and its directors or employees providing for compensation for loss of office or employment that occurs because of a takeover bid.

The Bribery Act 2010

The Bribery Act 2010 came into force on 1 July 2011, and the Board took the opportunity to implement a new Anti-Bribery Policy. The company is committed to acting ethically, fairly and with integrity in all its endeavours and compliance of the code is closely monitored.

Annual General Meeting

The annual general meeting of the company (AGM) will be held at Meeting Room 2, 12 Charles II Street, St James, London SW1Y 4QU on Tuesday, 6 June 2023 at 11:00 a.m. Resolutions 1 to 10 will be proposed as ordinary resolutions. More than 50 per cent. of shareholders’ votes cast must be in favour for those resolutions to be passed. The directors consider that all of the resolutions to be put to the meeting are in the best interests of the company and its shareholders as a whole. The Board recommends that shareholders vote in favour of all resolutions.

Please note that the following paragraph is a summary of resolution 10 to be proposed at the Annual General Meeting and not the full text of the resolution. You should therefore read this section in conjunction with the full text of the resolutions contained in the notice of Annual General Meeting.

Directors’ authority to allot shares (Resolution 10)

In certain circumstances it is important for the company to be able to allot shares up to a maximum amount without needing to seek shareholder approval every time an allotment is required. Paragraph 10.1.1 of resolution 10 would give the directors the authority to allot shares in the company and grant rights to subscribe for, or convert any security into, shares in the company up to an aggregate nominal value of £355,894. This represents approximately 1/3 (one third) of the ordinary share capital of the company in issue (excluding treasury shares) at 26 April 2023 (being the last practicable date prior to the publication of this Directors’ Report). Paragraph 10.1.2 of resolution 10 would give the directors the authority to allot shares in the company and grant rights to subscribe for, or convert any security into, shares in the company up to a further aggregate nominal value of £355,894, in connection with a pre-emptive rights issue. This amount represents approximately 1/3 (one third) of the ordinary share capital of the company in issue (excluding treasury shares) at 26 April 2023 (being the last practicable date prior to the publication of this Directors’ Report). Therefore, the maximum nominal value of shares or rights to subscribe for, or convert any security into, shares which may be allotted or granted under resolution 10 is £711,788. Resolution 10 complies with guidance issued by the Investment Association (IA).

The authority granted by resolution 10 will expire on 31 August 2024 or, if earlier, the conclusion of the next annual general meeting of the company. The directors have no present intention to make use of this authority. However, if they do exercise the authority, the directors intend to follow emerging best practice as regards its use as recommended by the IA.

Donations

No political donations were made during the year (2021: £nil).

Going concern

The Group’s business activities, together with the factors likely to affect its future development are set out in the Chairman’s Statement on the preceding page 2, the Mining Review on pages 5 to 8 and its financial position is set out on page 27 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 R25million is held by Sisonke Coal Processing (Pty) Limited, a 100% subsidiary of Black Wattle Colliery (Pty) Limited. This facility comprises of a R25million revolving facility to cover the working capital requirements of the Group’s South African operations. The facility is renewable annually and is secured against inventory, debtors and cash that are held in the Group’s South African operations. The Directors do not foresee any reason why the facility will not continue to be renewed at the next renewal date, in line with prior periods and based on their banking relationships. The directors expect that coal market conditions for the Group will remain at a stable and profitable level throughout 2023. The directors therefore have a reasonable expectation that the mine will achieve positive levels of cash generation for the Group in 2023. As a consequence, the directors believe that the Group is well placed to manage its South African business risks successfully. In the UK, forecasts demonstrate that the Group has sufficient resources to meet its liabilities as they fall due for at least the next 12 months, from the approval of the financial statements, including those related to the Group’s UK Loan facility outlined below.

The Group holds a 5 year term facility of £3.9m with Julian Hodge Bank Limited at an initial LTV of 40%. The loan is secured against the company’s UK retail property portfolio. The amount repayable on the loan at year end was £3.9million. The debt package has a five year term and is repayable at the end of the term in December 2024. The overall interest cost of the loan is 4.00% above the Bank of England base rate. All covenants on the loan were met during the year and the directors have a reasonable expectation that the Group has adequate financial resources at short notice, including cash and listed equity investments, to ensure the existing facility’s covenants are met on an ongoing basis.

Dragon Retail Properties Limited (Dragon), the Group’s 50% owned joint venture, holds a Santander bank loan of £1.143million secured against its investment property, see note 14. The bank loan is secured by way of a first charge on specific freehold property at a value of £2.03 million. The interest cost of the loan is 2.75 per cent above the bank’s base rate. A refinancing of this loan is currently underway. The loan originally expired in September 2020, but has been extended to October 2023. Santander have indicated that they are willing to provide a new term loan and we expect to complete this in the near future. In 2022 a disconnect in global energy markets resulted in higher global energy prices. Although the volatility in global energy markets in 2023 is uncertain, the Directors at present do not foresee events having a significant negative impact on the Group’s UK and South African operations ability to remain in operation for the foreseeable future. As a result of the banking facilities held as well as the acceptable levels of cash expected to be held by the Group over the next 12 months, the Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and that the Group is well placed to manage its business risks. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

Detailed budget and cash flow forecasts for the Group’s operations demonstrated that the Group has sufficient resources to meet its liabilities as they fall due for at least the next 12 months and the Directors believe the Group would be able to manage its business risks and have adequate cash resources to continue in operational existence for the foreseeable future. As a result of the banking facilities held as well as the acceptable levels of cash expected to be held by the Group over the next 12 months, the Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and that the Group is well placed to manage its business risks. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

By order of the board

G.J Casey
Secretary
12 Little Portland Street
London W1W8BJ
26 April 2023

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 2023. During the year, in light of the performance of the Group, the board determined to award bonuses and share options to certain executive directors of the Group. In addition, on 1st September 2022 the Company bought out 680,000 options over ordinary shares outstanding which were exercisable.As an alternative to the exercise of the options, the Company cancelled the share options for a consideration avoiding the need for the Company to allot shares, for shares to be sold in the market to meet the tax liabilities arising from the exercise and therefore the potential impact to the Company’s share price and on shareholders. The current remuneration policy, which details the remuneration policy for directors, can be found at www.bisichi.co.uk. The current remuneration policy was subject to a binding vote which was approved by shareholders at the AGM in July 2020. A further resolution amending the policy was approved by shareholders at a general meeting of the Company held on 16 June 2022. The resolution authorises the directors of the Company to enter into agreements to cancel and surrender options over Ordinary Shares. The approvals will continue to apply for a 3 year period up to the AGM on 9 June 2023. The remuneration committee considered the overall performance of the group as well as of each director in the year ended 31 December 2022 and remuneration including bonuses were awarded in line with the performance conditions of the remuneration policy. The second part, is the new remuneration policy report which can be found on page 48. The new remuneration policy is largely in line with the previous policy and is subject to a binding vote which will be proposed to shareholders at the AGM on 6 June 2023. Once approved, the approval of the new policy will apply for a 3 year period effective from the conclusion of the AGM on 9 June 2023. Both of the above reports have been prepared in accordance with The Large & Medium-sized Companies and Groups (Accounts and Reports) (Amended) Regulation 2023. The company’s auditors, Kreston Reeves LLP are required by law to audit certain disclosures and where disclosures have been audited they are indicated as such.

Christopher Joll
Chairman – remuneration committee
12 Little Portland Street
London W1W8BJ
26 April 2023

Statement of the Chairman of the remuneration committee

The remuneration committee presents its report for the year ended 31 December 2022. The report is presented in two parts in accordance with the remuneration regulations.

Governance

The following information has been audited:

Single total figure of remuneration for the year ended 31 December 2022

Salaries and Fees £’000	Benefits £’000	Bonuses £’000	Long Term Incentive Awards £’000	Pension £’000	Notional Value of Vesting Share Options £’000	Total 2022 £’000	Total Fixed Remuneration £’000	Total Variable Remuneration £’000
Executive Directors
Sir Michael Heller	200	-	580	-	-	-	780	200
A R Heller	495	42	1,100	-	-	273	1,910	537
G J Casey	194	17	575	-	19	273	1,078	230
R J Grobler	218	17	356	-	19	-	610	254
Non–Executive Directors
C A Joll*	52	-	-	-	-	-	52	52
J A Sibbald*	3	3	-	-	-	-	6	6
J Wong	55	-	-	-	-	-	55	55
Total	1,217	79	2,611	-	38	546	4,491	1,334

*Members of the remuneration committee for the year ended 31 December 2022

The notional value of vesting share options are based on the value of the share options at grant. The awards are not subject to performance in line with the scheme terms.

Single total figure of remuneration for the year ended 31 December 2021

Salaries and Fees £’000	Benefits £’000	Bonuses £’000	Long Term Incentive Awards £’000	Pension £’000	Total 2021 £’000	Total Fixed Remuneration £’000	Total Variable Remuneration £’000
Executive Directors
Sir Michael Heller	83	-	-	-	-	83	83
A R Heller	495	34	400	-	-	929	529
G J Casey	185	17	200	-	19	421	221
R J Grobler	205	11	176	-	17	409	233
Non–Executive Directors
C A Joll*	40	-	-	-	-	40	40
J A Sibbald*	3	3	-	-	-	6	6
J Wong	50	-	-	-	-	50	50
Total	1,061	65	776	-	36	1,938	1,162

*Members of the remuneration committee for the year ended 31 December 2021

Annual remuneration report

Summary of directors’ terms

Date of contract	Unexpired term	Notice period
Executive directors
A R Heller	January 1994	Continuous
G J Casey	June 2010	Continuous
R J Grobler	April 2008	Continuous
Non-executive directors
C A Joll	February 2001	Continuous
J A Sibbald	October 1988	Continuous
J Wong	October 2020	Continuous
J Heller	March 2023	Continuous

Pension schemes and incentives

Two (2021: Two) directors have benefits under money purchase pension schemes. Contributions in 2022 were £67,859 (2021: £65,177), see table above. There are no additional benefits payable to any director in the event of early retirement.

Scheme interests awarded during the year

During the year the Company granted options over ordinary shares in the Company of 10 pence (the “Options”) to the following directors of the Company, under the Company’s Unapproved Executive Share Option Scheme 2012 (the “Scheme”), as set out below:

• Andrew Heller: 380,000 options granted on 1 September 2022 at an exercise price of £3.52 per share
• Garrett Casey: 380,000 options granted on 1 September 2022 at an exercise price of £3.52 per share

The exercise price of 352 pence per share was based on the midmarket closing price of the Company’s shares on 31 August 2022, the date prior to the grant. The above Options are subject to the terms and conditions set out in the rules of the Scheme, and subject to the memorandum and articles of association of the Company. Further details of the Scheme are outlined below under Share option schemes. The above options were valued at £547,200 at date of grant using the Black-Scholes-Merton model. These Options are exercisable at any time during the next 10 years from the dates of grant stated above. No consideration has been paid for the granting of these Options.

Share option schemes

The company currently has only one Unapproved Share Option Scheme which is not subject to HMRC revenue and Customs (HMRC) approval. The 2012 scheme was approved by the remuneration committee of the company on 28 September 2012.

Number of share options	Option price*	1 January 2022 Options granted / (Surrendered) in 2022	31 December 2022	Exercisable from	Exercisable to
The 2012 Scheme
A R Heller	87.01p	150,000 (150,000)	-	18/03/2015	17/03/2025
A R Heller	73.50p	150,000 (150,000)	-	09/03/2018	09/03/2028
G J Casey	87.01p	150,000 (150,000)	-	18/03/2015	17/03/2025
G J Casey	73.50p	230,000 (230,000)	-	09/03/2018	09/03/2028
A R Heller	352.00p	-	380,000	01/09/2022	31/08/2032
G J Casey	352.00p	-	380,000	01/09/2022	31/08/2032

*Middle market price at date of grant

No consideration is payable for the grant of options under the 2012 Unapproved Share Option Scheme. There are no performance or service conditions attached to the 2012 Unapproved Share Option scheme. No part of the award was attributable to share price appreciation and no discretion has been exercised as a result of share price appreciation or depreciation. During the year, there were no changes to the exercise price or exercise period for the options. On 1st September 2022, the Company entered into an agreement with Andrew Heller and Garrett Casey to cancel the options granted in 2015 and 2018 under the Scheme. The Company paid each director a cash payment in consideration for cancelling the options. The cash payment was calculated by reference to the closing midmarket share price on 31 August 2022 less the relevant exercise price. The aggregate consideration paid by the Company to effect the cancellations was £1,853,270.

Payments to past directors

No payments were made to past directors in the year ended 31 December 2022 (2021: £nil).

Payments for loss of office

No payments for loss of office were made in the year ended 31 December 2022 (2021: £nil).

Statement of Directors’ shareholding and share interest

Directors’ interests

The interests of the directors in the shares of the company, including family and trustee holdings where appropriate, were as follows:

	Beneficial	Non-Beneficial
	31.12.2022	1.1.2022
Sir Michael Heller	148,783	148,783
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 2022 was 305p (2021: 60p). During the year the share price ranged between 81p and 375p.

### Year	Managing Director	Annual bonus payout against maximum opportunity* %	Long-term incentive vesting rates against maximum opportunity* %
2022	A R Heller	1,637	74%
2021	A R Heller	929	27%
2020	A R Heller	551	0%
2019	A R Heller	1,035	34%
2018	A R Heller	1,073	34%
2017	A R Heller	898	25%
2016	A R Heller	850	22%
2015	A R Heller	912	22%
2014	A R Heller	862	22%
2013	A R Heller	614	N/A

Bisichi PLC does not have a Chief Executive so the table includes the equivalent information for the Managing Director.
* There were no formal criteria or conditions to apply in determining the amount of bonus payable or the number of shares to be issued prior to 2014.# Percentage change in remuneration and Company performance

Director	Base Salary 2022	Bonuses 2022	Base Salary 2021	Bonuses 2021	Base Salary 2020	Bonuses 2020
Executive:
Sir Michael Heller¹	141%	0%	N/A	0%	0%	0%
A R Heller²	0%	24%	175%	0%	N/A	40%
J C Casey²	5%	0%	188%	20%	N/A	3%
R Grobler²	6%	55%	102%	6%	3%	(7%)
Non-Executive:
C A Joll³	30%	0%	0%	0%	0%	5%
J A Sibbald	0%	0%	0%	0%	0%	0%
J Wong³	10%	0%	0%	N/A	N/A	N/A
J Heller⁴	N/A	N/A	N/A	N/A	N/A	N/A
Employee remuneration on a full-time equivalent basis:
Employees of the Company⁵	47%	0%	478%	8%	(26%)	N/A

1. Bonus changes for 2022 for Sir Michael Heller are disclosed as not applicable as no bonus was awarded to the director in 2021.
2. Bonuses changes for 2021 for A R Heller, J C Casey, R Grobler and Employees of the Company are disclosed as not applicable as no bonuses were awarded to the various directors and employees in 2020.
3. Mr J Wong was appointed as a non-executive Director on 15 October 2020 so the annual change is not applicable for 2020 and was apportioned for 2021.
4. Mr J Heller was appointed as a non-executive Director on 29 March 2023 so the annual change is not applicable.
5. The comparator group chosen is all UK based employees as the remuneration committee believe this provides the most accurate comparison of underlying increases based on similar annual bonuses.

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 2015 to 31 December 2022.

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 30 to the financial statements) is shown below:

	2022 £’000	2021 £’000
Employee remuneration	11,991	7,491
Distribution to shareholders (see note below)	2,348	641

The distribution to shareholders in the current year is subject to shareholder approval at next the Annual General Meeting.

Statement of implementation of remuneration policy

The remuneration policy was approved at the AGM on 9 July 2020. The policy took effect from the conclusion of the AGM and will apply for 3 years unless changes are deemed necessary by the remuneration committee. The company may not make a remuneration payment or payment for loss of office to a person who is, is to be, or has been a director of the company unless that payment is consistent with the approved remuneration policy, or has otherwise been approved by a resolution of members. During the year a resolution amending the policy was approved by shareholders at a general meeting of the Company held on 16 June 2022. The resolution authorises the directors of the Company to enter into agreements to cancel and surrender options over Ordinary Shares. During the year, there were no deviations from the procedure for the implementation of the remuneration policy as set out in the policy.

Consideration by the directors of matters relating to directors’ remuneration

The remuneration committee considered the executive directors remuneration and the board considered the non-executive directors remuneration in the year ended 31 December 2022. The Company did not engage any consultants to provide advice or services to materially assist the remuneration committee’s considerations.

Shareholder voting

At the Annual General Meeting on 16 June 2022, there was an advisory vote on the resolution to approve the remuneration report, other than the part containing the remuneration policy. In addition, on 9 July 2020 there was a binding vote on the resolution to approve the current remuneration policy. In addition, a further resolution amending the policy was approved by shareholders at a general meeting of the Company held on 16 June 2022. The resolution authorises the directors of the Company to enter into agreements to cancel and surrender options over Ordinary Shares. The results of the votes above are detailed below:

	% of votes for	% of votes against	No of votes withheld
Resolution to approve the Remuneration Report (16 June 2022)	73.85%	26.15%	7,174
Resolution to approve the Remuneration Policy (9 July 2020)	69.87%	30.13%	-
Resolution to authorises the directors of the Company to enter into agreements to cancel and surrender options over Ordinary Shares. (16 June 2022)	100%	0%	-

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. Director notice periods (see page 41 of the annual remuneration report) are set in line with market practice and of a length considered sufficient to ensure an effective handover of duties should a director leave the company. All directors’ contracts as amended from time to time, have run from the date of appointment. Service contracts are kept at the registered office.

Remuneration policy table

The remuneration policy table below is an extract of the Group’s current remuneration policy on director’s 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 The aggregate number of shares over which options may be granted under all of the company’s option schemes (including any options and awards granted under the company’s employee share plans) in any period of ten years, will not exceed, at the time of grant, 10% of the ordinary share capital of the company from time to time. In determining the limits no account shall be taken of any shares where the right to acquire the shares has been released, lapsed or has otherwise become incapable of exercise. The company currently has one Share Option Scheme (see page 41). For the 2012 scheme the remuneration committee has the ability to impose performance criteria in respect of any new share options granted, however there is no requirement to do so. There are no performance conditions attached to the options already issued under the 2012 scheme, the options vest on issue and there are no minimum hold periods for the resulting shares issued on exercise of the option.

Bisichi PLC ELEMENT PURPOSE POLICY OPERATION OPPORTUNITY AND PERFORMANCE CONDITIONS

ELEMENT	PURPOSE	POLICY	OPERATION	OPPORTUNITY AND PERFORMANCE CONDITIONS
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.	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 47). 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

Governance

Annual Remuneration Report

Bisichi PLC

Strategic Report Annual Remuneration Report

In order to ensure that shareholders have sufficient clarity over director remuneration levels, the company has, where possible, specified a maximum pay to be paid to a director in respect of each component of remuneration. The remuneration committee consider the performance measures outlined in the table above to be appropriate measures of performance and that the KPI’s chosen align the interests of the directors and shareholders. In addition to above, during the year a resolution amending the policy was approved by shareholders at a general meeting of the Company held on 16 June 2022. The resolution authorises the directors of the Company to enter into agreements to cancel and surrender options over Ordinary Shares.

Details of remuneration of other company employees can be found in Note 27 to the financial statements.

Remuneration Policy

The remuneration policy below is the group’s new remuneration policy on directors’ remuneration, which will be proposed for a binding vote at the 2023 AGM. If approved it is intended that the policy take effect from the conclusion of the AGM on 9 June 2023, and will apply to remuneration determined on or after that date. The previously determined remuneration (determined under the company’s remuneration policy approved at the 2020 AGM) will continue to apply until that time. In the absence of approval of the new remuneration policy at the 2023 AGM, the previous policy shall continue to apply.

The remuneration of the Company’s executive directors is determined by the remuneration committee. In the decision making process for the determination, review and implementation of the company’s remuneration policy, the remuneration committee has taken the following into account:

• The need to attract, retain and motivate individuals of a calibre who will ensure successful leadership and management of the company
• The group’s general aim of seeking to reward all employees fairly according to the nature of their role and their performance
• Remuneration packages offered by similar companies within the same sector
• The need to align the interests of shareholders as a whole with the long-term growth of the group
• The need to align the determination, review and implementation of the company’s remuneration policy with the long term strategy and success of the business.
• The need to be flexible and adjust with operational changes throughout the term of this policy
• The need to ensure a link between remuneration and the long term success of the group; and
• The need to consider factors beyond the control of management in determining final outcomes.

The remuneration of non-executive directors is determined by the board, and takes into account additional remuneration for services outside the scope of the ordinary duties of non-executive directors. In determining the remuneration for each executive director, the remuneration committee has, and in the determination of the fees payable to non-executive directors, the Board has, had regard to potential conflicts of interest in the decision making process, and has sought to mitigate these as far as is possible given the company’s size, nature and stage of operations.

The remuneration policy contains no significant revisions compared with the previous policy other than rates which have been amended after taking into consideration inflation and the increase in size of the Group.

Bisichi PLC

Strategic Report Annual Remuneration Report

Future Policy Table

The below new remuneration policy table is subject to approval by shareholders at the 2023 AGM.

ELEMENT	PURPOSE	POLICY	OPERATION	OPPORTUNITY AND PERFORMANCE CONDITIONS
EXECUTIVE DIRECTORS
Base salary	To recognise: Skills, Responsibility, Accountability, Experience, Value	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 £1,200,000 per annum.	No specific performance conditions are attached to base salaries.
Pension	To provide competitive retirement benefits	Company contribution offered at up to 10% of base salary as part of overall remuneration package. 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.
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 41) and new schemes. Offered at appropriate times by the remuneration committee.	Entitlement to share options is not subject to any specific performance conditions. Share options will be offered by the remuneration committee as appropriate taking into account the factors considered above in the decision making process in determining remuneration policy. The aggregate number of shares over which options may be granted under all of the company’s option schemes (including any options and awards granted under the company’s employee share plans) in any period of ten years, will not exceed, at the time of grant, 10% of the ordinary share capital of the company from time to time.

Audit committee report

involved in the audit, including the regular rotation of the audit partner; and maintaining 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-yearly 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 professional and John Sibbald, a Chartered accountant.

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 judgement 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 matter identified during the audit process were also considered when assessing their materiality. Based on the considerations set out above we have considered quantitative errors individually or in aggregate in excess of approximately £700,000 to £800,000 to be material.

External Auditors

Kreston Reeves LLP have expressed their willingness to continue in office and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting. In the United Kingdom the company is provided with extensive administration and accounting services by London & Associated Properties PLC which has its own audit committee and employs a separate team of external auditors from Kreston Reeves LLP. BDO South Africa Inc. acts as the external auditor to the South African companies, and the work of that firm was reviewed by Kreston Reeves LLP for the purpose of the Group audit.

Christopher Joll
Chairman – audit committee
12 Little Portland Street
London W1W8BJ
26 April 2023

Valuation Report

In accordance with your instructions we have carried out a valuation of the freehold property interests held as at 31 December 2022 by the company as detailed in our Valuation Report dated 20 February 2023.

Having regard to the foregoing, we are of the opinion that the open market value as at 31 December 2022 of the interests owned by the company was £10,465,000 being made up as follows:

	£’000
Freehold	8,270
Leasehold	2,195
	10,465

Leeds
20 February 2023

Carter Towler
Regulated by Royal Institution of Chartered Surveyors
Valuers

Directors’ responsibilities

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the Group financial statements in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006. The directors have elected to prepare the company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and company and of the profit or loss for the Group for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state with regard to the Group financial statements whether they have been prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006 subject to any material departures disclosed and explained in the financial statements;
• state with regard to the parent company financial statements, whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company and the Group will continue in business; and
• prepare a director’s report, a strategic report and director’s remuneration report which comply with the requirements of the Companies Act 2006.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006 and, as regards the Group financial statements, international accounting standards. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for ensuring that the annual report and accounts, taken as a whole, are fair, balanced, and understandable and provides the information necessary for shareholders to assess the Group’s performance, business model and strategy.

Website publication

The directors are responsible for ensuring the annual report and the financial statements are made available on a website.

Financial statements are published on the company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the company’s website is the responsibility of the directors. The directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors’ responsibilities pursuant to DTR4

The directors confirm to the best of their knowledge:

• the Group financial statements have been prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006 and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group.
• the annual report includes a fair review of the development and performance of the business and the financial position of the Group and the parent company, together with a description of the principal risks and uncertainties that they face.

Directors’ responsibilities statement

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

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 2022 which comprise the consolidated income statement, consolidated statement of other comprehensive income, consolidated and company balance sheets, consolidated and company statements of changes in equity, consolidated cash flow statement and notes to the financial statements, including a summary of significant Group accounting policies. The financial reporting framework that has been applied in their preparation of the group financial statements is applicable law and UK adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

• the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 December 2022 and of the Group’s profit for the year then ended;
• the group financial statements have been properly prepared in accordance with UK adopted international accounting standards;
• the parent company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.# Independent auditor report to the shareholders of Bisichi Plc

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group and Parent companies ability to continue to adopt the going concern basis of accounting including the following:

• Gained an understanding of the systems and controls around management’s 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.
• 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 38;
• Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period is appropriate set out on page 38;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 19 to 23;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems set out on page 36 and
• The section describing the work of the Risk and Audit Committee set out on page 35.

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.

We reported all audit differences found in excess of our triviality threshold to the directors and the management board. For each Group company within the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range of materiality allocated across each Group company was between £234,500 and £23,300. The scope of our audit was influenced by our application of materiality as we set certain quantitative thresholds for performance materiality and use these thresholds as a consideration tool to help to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

We determined component materiality for the parent company to be capped at below group materiality. This was also the case for group subsidiaries registered outside of the UK. For the lower risk UK-registered trading subsidiaries, 4% of those subsidiary’s net assets were used. Performance materiality was set in the range of 70-80% of each individual materiality.

Our application of materiality

	Group financial statements	Parent company financial statements
Materiality	£711,200 (2021: £359,600)	£710,000 (2021: £359,500)
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	£533,400 (2021: £269,700)	£532,500 (2021: £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	£35,560 (2021: £17,980)	£35,500 (2021: £17,980)
Basis for determining triviality threshold	5% of materiality	Capped below group materiality

Coverage overview

	Group revenue	Group profit/(loss) before tax	Group net assets
Totals at 31 December 2022:	£95,110,894	£38,013,787	£35,560,822
Full statutory audit (Kreston Reeves and BDO)	£95,111,894 (100%)	£37,924,360 (99.8%)	£35,285,511 (99.2%)
Limited procedures	£Nil	£89,427 (0.2%)	£275,311 (0.8%)

We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group and the parent company, the accounting processes and controls, and the industry in which they operate. Our scoping considerations for the Group audit were based both on financial information and risk. As noted above limited assurance audit work – which is to say the audit of balances and transactions material at a group level – was only applied in respect of a small element of the group.# Independent auditor report to the shareholders of Bisichi Plc

Climate risks have the potential to materially impact the key judgements and estimates within the financial report. Our audit considered those risks that could be material to the key judgement and estimates in the assessment of the carrying value of non-current assets and closure and rehabilitation provisions. The key judgements and estimates included in the financial statements incorporate actions and strategies, to the extent they have been approved and can be reliably estimated in accordance with the Group’s accounting policies. Accordingly, our key audit matters address how we have assessed the Group’s climate related assumptions to the extent they impact each key audit matter. Our audit procedures were performed with the involvement of our climate change and valuation specialists.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our knowledge and understanding of the Group and parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
• the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement (set out on page 57), the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group’s and parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or parent company or to cease operations, or have no realistic alternative but to do so.

Independent auditor report to the shareholders of Bisichi Plc

65

Bisichi PLC

Governance

Independent auditor report to the shareholders of Bisichi Plc

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Capability of the audit in detecting irregularities, including fraud

Based on our understanding of the group and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to: posting inappropriate journal entries to increase revenue or reduce expenditure, management bias in accounting estimates and judgemental areas of the financial statements such as the valuation of investment properties.

Audit procedures performed by the group engagement team and component auditors included:
* We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and determined that the most significant are those that relate to the reporting framework and the relevant tax compliance regulations in the jurisdictions in which Bisichi PLC operates. In addition, we concluded that there are certain significant laws and regulations that may have an effect on the determination of the amounts and disclosures in the financial statements, mainly relating to health and safety, employee matters, bribery and corruption practices, environmental and certain aspects of company legislation recognising the regulated nature of the Group’s mining activities and its legal form.
* Detailed discussions were held with management to identify any known or suspected instances of non- compliance with laws and regulations.
* Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud.
* Challenging assumptions and judgements made by management in its significant accounting estimates, including assessing the capabilities of the property valuers and discussing with the valuers how their valuations were calculated and the data and assumptions they have used to calculate these.
* Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud.
* Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business.
* Reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with relevant tax and regulatory authorities.
* Performing integrity testing to verify the legitimacy of banking records obtained from management.
* Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions.
* Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation.
* We ensured our global audit team (including Kreston Reeves and BDO) has deep industry experience through working for many years on relevant audits, including experience of mining and investment property management.

Our audit planning included considering external market factors, for example geopolitical risk, the potential impact of climate change, commodity price risk and major trends in the industry. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non- compliance.

66

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 reappointed by the audit committee in the year to audit the financial statements. Our total uninterrupted period of engagement is 2 years, covering the years ended 31 December 2021 and 31 December 2022. The non-audit services prohibited by the IFRS’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: 27 April 2023

Financial statements

Consolidated income statement

Consolidated statement of other comprehensive income

Consolidated balance sheet

Consolidated statement of changes in shareholders’ equity

Consolidated cash flow statement

Group accounting policies

Notes to the financial statements

Company balance sheet

Company statement of changes in equity

Company accounting policies

Bisichi PLC

Bisichi PLC Financial statements

Notes 2022

	Trading £’000	Revaluations and impairment £’000	Total £’000	Trading £’000	Revaluations and impairment £’000	Total £’000
Group revenue	2	95,111	-	95,111	50,520	-
Operating costs	3	(55,748)	-	(55,748)	(45,492)	-
Operating profit before depreciation, fair value adjustments and exchange movements		39,363	-	39,363	5,028	-
Depreciation	3	(1,093)	-	(1,093)	(2,571)	-
Operating profit before fair value adjustments and exchange movements		38,270	-	38,270	2,457	-
Exchange losses		(270)	-	(270)	(121)	-
(Decrease)/Increase in value of investment properties	4	-	(60)	(60)	-	255
Gain on investments held at fair value		-	1,036	1,036	-	812
Operating profit	1	38,000	976	38,976	2,336	1,067
Share of loss in joint ventures	13	-	(89)	(89)	-	(125)
Profit before interest and taxation		38,000	887	38,887	2,336	942
Interest receivable	1	74	-	74	22	-
Interest payable	7	(1,047)	-	(1,047)	(799)	-
Profit before tax	5	37,127	887	38,014	1,559	942
Taxation	8	(11,878)	(30)	(11,908)	(453)	(342)
Profit for the year		25,249	857	26,106	1,106	600
Attributable to:
Equity holders of the company		16,755	857	17,612	891	600
Non-controlling interest	27	8,494	-	8,494	215	-
Profit for the year		25,249	857	26,106	1,106	600
Profit per share (basic)	10	164.96p			13.96p
Profit per share (diluted)	10	164.96p			13.94p

Trading gains and losses reflect all the trading activity on mining and property operations and realised gains. Revaluation gains and losses reflect 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 2022

Financial statements Bisichi PLC 69

Financial statements

Consolidated statement of other comprehensive income for the year ended 31 December 2022

	2022 £’000	2021 £’000
Profit for the year	26,106	1,706
Other comprehensive income/(expense):
Items that may be subsequently recycled to the income statement:
Exchange differences on translation of foreign operations	(43)	(60)
Other comprehensive income for the year net of tax	(43)	(60)
Total comprehensive income for the year net of tax	26,063	1,646
Attributable to:
Equity shareholders	17,593	1,439
Non-controlling interest	8,470	207
	26,063	1,646

70 Bisichi PLC Financial statements

Notes 2022 £’000 | 2021 £’000

---|---|---
Assets | |
Non-current assets | |
Investment properties | 11 | 10,635 | 10,700
Mining reserves, plant and equipment | 12 | 16,377 | 9,065
Investments in joint ventures accounted for using equity method | 13 | 1,041 | 1,130
Other investments at fair value through profit and loss (FVPL) | 13 | 12,590 | 3,631
Total non-current assets | | 40,643 | 24,526
Current assets | |
Inventories | 16 | 5,199 | 1,253
Trade and other receivables | 17 | 6,437 | 8,626
Investments in listed securities held at FVPL | 18 | 886 | 685
Cash and cash equivalents | | 10,590 | 3,018
Total current assets | | 23,112 | 13,582
Total assets | | 63,755 | 38,108
Liabilities | |
Current liabilities | |
Borrowings | 20 | (3,795) | (2,666)
Trade and other payables | 19 | (13,282) | (10,743)
Current tax liabilities | | (4,256) | (726)
Total current liabilities | | (21,333) | (14,135)
Non-current liabilities | |
Borrowings | 20 | (3,930) | (3,853)
Provision for rehabilitation | 21 | (1,715) | (1,390)
Lease liabilities | 31 | (344) | (389)
Deferred tax liabilities | 23 | (872) | (506)
Total non-current liabilities | | (6,861) | (6,138)
Total liabilities | | (28,194) | (20,273)
Net assets | | 35,561 | 17,835

Consolidated balance sheet at 31 December 2022

7171Bisichi PLC Financial statements

Consolidated balance sheet

	A R Heller G J Casey Company Registration No. 112155 Director Director
	Notes	2022 £’000	2021 £’000
Equity
Share capital	24	1,068	1,068
Share premium account		258	258
Translation reserve		(2,559)	(2,540)
Other reserves	25	1,112	707
Retained earnings		33,923	18,019
Total equity attributable to equity shareholders		33,802	17,512
Non-controlling interest	27	1,759	323
Total equity		35,561	17,835

These financial statements were approved and authorised for issue by the Board of Directors on 25 April 2023 and signed on its behalf by:

72 Bisichi PLC Financial statements

Consolidated statement of changes in shareholders’ equity for the year ended 31 December 2022

	Share capital £’000	Share Premium £’000	Translation reserves £’000	Other reserves £’000	Retained earnings £’000	Total £’000	Non- controlling interest £’000	Total equity £’000
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	1,706
Other comprehensive expense	-	-	(52)	-	-	(52)	(8)	(60)
Total comprehensive expense for the year	-	-	(52)	-	1,491	1,439	207	1,646
Dividend (note 9)	-	-	-	-	-	-	-	-
Balance at 1 January 2022	1,068	258	(2,540)	707	18,019	17,512	323	17,835
Profit for the year	-	-	-	-	17,612	17,612	8,494	26,106
Other comprehensive income	-	-	(19)	-	-	(19)	(24)	(43)
Total comprehensive income for the year	-	-	(19)	-	17,612	17,593	8,470	26,063
Dividend (note 9)	-	-	-	-	(1,708)	(1,708)	(7,034)	(8,742)
Share options cancelled	-	-	-	(142)	-	(142)	-	(142)
Share options issued	-	-	-	547	-	547	-	547
Balance at 31 December 2022	1,068	258	(2,559)	1,112	33,923	33,802	1,759	35,561

7373Bisichi PLC Financial statements

Consolidated cash flow statement for the year ended 31 December 2022

	Year ended 31 December 2022 £’000	Year ended 31 December 2021 £’000
Cash flows from operating activities
Operating profit	38,976	3,403
Adjustments for:
Depreciation	1,093	2,571
Unrealised loss/(gain) on investment properties	60	(255)
Share based payment expense	405	-
Gain on investments held at FVPL	(1,036)	(812)
Exchange adjustments	270	121
Cash flow before working capital	39,768	5,028
Change in inventories	(4,009)	2,105
Change in trade and other receivables	2,307	(1,900)
Change in trade and other payables	1,114	192
Cash generated from operations	39,180	5,425
Interest received	175	22
Interest paid	(728)	(799)
Income tax paid	(7,929)	(216)
Cash flow from operating activities	30,698	4,432
Cash flows from investing activities
Acquisition of reserves, property, motor vehicles, plant and equipment	(8,480)	(1,781)
Disposal of reserves, property, motor vehicles, plant and equipment	20	-
Disposal of other investments	2,083	705
Acquisition of other investments	(10,207)	(1,630)
Cash flow from investing activities	(16,584)	(2,706)
Cash flows from financing activities
Borrowings drawn	524	46
Borrowings and lease liabilities repaid	(55)	(317)
Equity dividends paid	(641)	-
Minority dividends paid	(7,034)	-
Cash flow from financing activities	(7,206)	(271)
Net increase in cash and cash equivalents	6,908	1,455
Cash and cash equivalents at 1 January	482	(1,078)
Exchange adjustment	(25)	105
Cash and cash equivalents at 31 December	7,365	482
Cash and cash equivalents at 31 December comprise:
Cash and cash equivalents as presented in the balance sheet	10,590	3,018
Bank overdrafts (secured)	(3,225)	(2,536)
	7,365	482

Consolidated cash flow statement for the# Bisichi PLC

Financial statements

Basis of accounting

The results for the year ended 31 December 2022 have been prepared in accordance with UK-adopted international accounting standards in conformity with the requirements of the Companies Act 2006. In applying the Group’s accounting policies and assessing areas of judgment and estimation materiality is applied as detailed on page 55 of the Audit Committee Report. The principal accounting policies are described below:

The Group financial statements are presented in £ sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise stated. The functional currency for each entity in the Group, and for joint arrangements and associates, is the currency of the country in which the entity has been incorporated. Details of which country each entity has been incorporated can be found in note 15 for subsidiaries and note 14 for joint arrangements and associates.

The exchange rates used in the accounts were as follows:

		2022	2021
£1 Sterling: Rand		20.5785	20.7672
£1 Sterling: Dollar		1.2102	1.3706
Year-end rate		20.5785	20.7672	1.2102
Annual average		20.1929	20.4060	1.2967

Going concern

The Group has prepared cash flow forecasts which demonstrate that the Group has sufficient resources to meet its liabilities as they fall due for at least the next 12 months from date of signing.

In South Africa, a structured trade finance facility with Absa Bank Limited for R85million is held by Sisonke Coal Processing (Pty) Limited, a 100% subsidiary of Black Wattle Colliery (Pty) Limited. This facility comprises of a R85million revolving facility to cover the working capital requirements of the Group’s South African operations. The facility is renewable annually and is secured against inventory, debtors and cash that are held in the Group’s South African operations. The Directors do not foresee any reason why the facility will not continue to be renewed at the next renewal date, in line with prior periods and based on their banking relationships. The directors expect that coal market conditions for the Group will remain at a stable and profitable level through 2023. As a consequence, the directors believe that the Group is well placed to manage its South African business risks successfully.

In the UK, forecasts demonstrate that the Group has sufficient resources to meet its liabilities as they fall due for at least the next 12 months, from the approval of the financial statements, including those related to the Group’s UK Loan facility outlined below.

The Group holds a 5 year term facility of £3.9m with Julian Hodge Bank Limited at an initial LTV of 40%. The loan is secured against the company’s UK retail property portfolio. The amount repayable on the loan at year end was £3.9million. The debt package has a five year term and is repayable at the end of the term in December 2024. The overall interest cost of the loan is 4.00% above the Bank of England base rate. All covenants on the loan were met during the year and the directors have a reasonable expectation that the Group has adequate financial resources at short notice, including cash and listed equity investments, to ensure the existing facility’s covenants are met on an ongoing basis.

Dragon Retail Properties Limited (“Dragon”), the Group’s 50% owned joint venture, holds a Santander bank loan of £1.143million secured against its investment property, see note 14. The bank loan is secured by way of a first charge on specific freehold property at a value of £2.03 million. The interest cost of the loan is 2.75 per cent above the bank’s base rate. A refinancing of this loan is currently underway. The loan originally expired in September 2020, but has been extended to October 2023. Santander have indicated that they are willing to provide a new term loan and we expect to complete this in the near future.

Group accounting policies

In 2022 a disconnect in global energy markets resulted in higher global energy prices. Although the volatility in global energy markets in 2023 is uncertain, the Directors at present do not foresee events having a significant negative impact on the Group’s UK and South African operations ability to remain in operation for the foreseeable future. As a result of the banking facilities held as well as the acceptable levels of cash expected to be held by the Group over the next 12 months, the Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and that the Group is well placed to manage its business risks. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.

International Financial Reporting Standards (IFRS)

The Group has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards Board (“IASB”) that are relevant to its operations and effective for accounting periods beginning 1 January 2022. A number of new standards, amendments to standards and interpretations have been issued but are not yet effective for the Group. The Group has not adopted any Standards or Interpretations in advance of the required implementation dates. The application of these new standards, amendments and interpretations are not expected to have a significant impact on the Group’s income statement or balance sheet. We are committed to improving disclosure and transparency and will continue to work with our different stakeholders to ensure they understand the detail of these accounting changes. We continue to remain committed to a robust financial policy.

Key judgements and estimates

Areas where key estimates and judgements are considered to have a significant effect on the amounts recognised in the financial statements include:

Life of mine and reserves

The directors consider their judgements and estimates surrounding the life of the mine and its reserves to have significant effect on the amounts recognised in the financial statements and to be an area where the financial statements are subject to significant estimation uncertainty. The life of mine remaining is currently estimated at 7 years. This life of mine is based on the Group’s existing coal reserves including reserves acquired but subject to regulatory approval. The Group actively seeks and evaluates new opportunities to extend the life of its existing mining and processing operations in South Africa. The life of mine excludes future coal purchases and coal reserve acquisitions.

The Group’s estimates of proven and probable reserves are prepared utilising the South African code for the reporting of exploration results, mineral resources and mineral reserves (the SAMREC code) and are subject to assessment by an independent Competent Person experienced in the field of coal geology and specifically opencast and pillar coal extraction. Estimates of coal reserves impact assessments of the carrying value of property, plant and equipment, depreciation calculations and rehabilitation and decommissioning provisions. There are numerous uncertainties inherent in estimating coal reserves and changes to these assumptions may result in restatement of reserves. These assumptions include geotechnical factors as well as economic factors such as commodity prices, production costs, coal demand outlook and yield.# Depreciation, amortisation of mineral rights, mining development costs and plant & equipment

The annual depreciation/amortisation charge is dependent on estimates, including coal reserves and the related life of mine, expected development expenditure for probable reserves, the allocation of certain assets to relevant ore reserves and estimates of residual values of the processing plant. The charge can fluctuate when there are significant changes in any of the factors or assumptions used, such as estimating mineral reserves which in turn affects the life of mine or the expected life of reserves. Estimates of proven and probable reserves are prepared by an independent Competent Person. Assessments of depreciation/amortisation rates against the estimated reserve base are performed regularly. Details of the depreciation/amortisation charge can be found in note 12.

Provision for mining rehabilitation

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.

76 Bisichi PLC Financial statements

Group accounting policies

Impairment

Property, plant and equipment

The Group’s mining assets in South Africa are reviewed for impairment when there are indicators of impairment. The impairment test is performed using the approved Life of Mine plan and those future cash flow estimates are discounted using asset specific discount rates and are based on expectations about future operations. The impairment test requires estimates about production and sales volumes, commodity prices, proven and probable reserves (as assessed by the Competent Person), operating costs and capital expenditures necessary to extract reserves in the approved Life of Mine plan. Changes in such estimates could impact recoverable values of these assets. Details of the carrying value of property, plant and equipment can be found in note 12.

The impairment test indicated significant headroom as at 31 December 2022 and therefore no impairment is considered appropriate. The key assumptions include: coal prices, including domestic coal prices based on recent pricing and assessment of market forecasts for export coal; production based on proven and probable reserves assessed by the independent Competent Person and yields associated with mining areas based on assessments by the Competent Person and empirical data. An 28% reduction in average forecast coal prices or a 31% reduction in yield would give rise to a breakeven scenario. However, the directors consider the forecasted yield levels and pricing to be appropriate and supportable best estimates.

Fair value measurements of investment properties

An assessment of the fair value of investment properties, is required to be performed. In such instances, fair value measurements are estimated based on the amounts for which the assets and liabilities could be exchanged between market participants. To the extent possible, the assumptions and inputs used take into account externally verifiable inputs. However, such information is by nature subject to uncertainty. The fair value of investment property is set out in note 11, whilst the carrying value of investments in joint ventures which themselves include investment property held at fair value by the joint venture is set out at note 13.

Measurement of development property

The development property included within the Group’s joint venture investment in West Ealing Projects limited is considered by Management to fall outside the scope of investment property. A property intended for sale in the ordinary course of business or in the process of construction or development for such sale, for example, property acquired exclusively with a view to subsequent disposal in the near future or for development and resale is expected to be recorded under the accounting standard of IAS 2 Inventories. The directors have discussed the commercial approach with the directors of the underlying joint venture and the current plan is to sell or to complete the development and sell. The Directors therefore consider the key judgement of accounting treatment of the property development under IAS 2 Inventories to be correct. IAS 2 Inventories require the capitalised costs to be held at the lower of cost or net realisable value. At 31 December 2022, the costs capitalised within the development based on a director’s appraisal for the property estimated the net realisable value at a surplus over the cost for the development. The directors have reviewed the underlying inputs and key assumptions made in the appraisal and consider them adequate. However, such information is by nature subject to uncertainty. The cost of the development property is set out in note 14.

Basis of consolidation

The Group accounts incorporate the accounts of Bisichi PLC and all of its subsidiary undertakings, together with the Group’s share of the results of its joint ventures. Non-controlling interests in subsidiaries are presented separately from the equity attributable to equity owners of the parent company. On acquisition of a non-wholly owned subsidiary, the non-controlling shareholders’ interests are initially measured at the non-controlling interests’ proportionate share of the fair value of the subsidiaries net assets. Thereafter, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non- controlling interests’ share of subsequent changes in equity. For subsequent changes in ownership in a subsidiary that do not result in a loss of control, the consideration paid or received is recognised entirely in equity.

7777Bisichi PLC Financial statements

Group accounting policies

The definition of control assumes the simultaneous fulfilment of the following three criteria:
* The parent company holds decision-making power over the relevant activities of the investee,
* The parent company has rights to variable returns from the investee, and
* The parent company can use its decision-making power to affect the variable returns.

Investees are analysed for their relevant activities and variable returns, and the link between the variable returns and the extent to which their relevant activities could be influenced in order to ensure the definition is correctly applied.

Revenue

The Group’s revenue from contracts with customers, as defined under IFRS 15, includes coal revenue and service charge income. Coal revenue is derived principally from export revenue and domestic revenue. Both export revenue and domestic revenue is recognised when the customer has a legally binding obligation to settle under the terms of the contract when the performance obligations have been satisfied, which is once control of the goods has transferred to the buyer at the delivery point. For export revenue this is generally recognised when the product is delivered to the export terminal location specified in the customer contract, at which point control of the goods have been transferred to the customer. For domestic coal revenues this is generally recognised on collection by the customer from the mine or from the mine’s rail siding when loaded into transport, where the customer pays the transportation costs.

Fulfilment costs to satisfy the performance obligations of coal revenues such as transport and loading costs borne by the Group from the mine to the delivery point are recoded in operating costs. Coal revenue is measured based on consideration specified in the contract with a customer on a per metric tonne basis. Both export and domestic contracts are typically on a specified coal volume basis and less than a year in duration. Export contracts are typically linked to the price of Free on Board (FOB) Coal from Richards Bay Coal Terminal (API4 price). Domestic contracts are typically linked to a contractual price agreed. Service charges recoverable from tenants are recognised over time as the service is rendered.# Group accounting policies

Lease property rental income, as defined under IFRS 16, is recognised in the Group income statement on a straight-line basis over the term of the lease. This includes the effect of lease incentives.

Expenditure

Expenditure is recognised in respect of goods and services received. Where coal is purchased from third parties at point of extraction the expenditure is only recognised when the coal is extracted and all of the significant risks and rewards of ownership have been transferred.

Investment properties

Investment properties comprise freehold and long leasehold land and buildings. Investment properties are carried at fair value in accordance with IAS 40 ‘Investment Properties’. Properties are recognised as investment properties when held for long-term rental yields, and after consideration has been given to a number of factors including length of lease, quality of tenant and covenant, value of lease, management intention for future use of property, planning consents and percentage of property leased. Investment properties are revalued annually by professional external surveyors and included in the balance sheet at their fair value. Gains or losses arising from changes in the fair values of assets are recognised in the consolidated income statement in the period to which they relate. In accordance with IAS 40, investment properties are not depreciated. The fair value of the head leases is the net present value of the current head rent payable on leasehold properties until the expiry of the lease.

Mining reserves, plant and equipment and development cost

The cost of property, plant and equipment comprises its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in accordance with agreed specifications. Freehold land included within mining reserves is not depreciated. Other property, plant and equipment is stated at historical cost less accumulated depreciation. The cost recognised includes the recognition of any decommissioning assets related to property, plant and equipment.

The purpose of mine development is to establish secure working conditions and infrastructure to allow the safe and efficient extraction of recoverable reserves. Depreciation on mine development costs is not charged until production commences or the assets are put to use. On commencement of full commercial production, depreciation is charged over the life of the associated mine reserves extractable using the asset on a unit of production basis. The unit of production calculation is based on tonnes mined as a ratio to proven and probable reserves and also includes future forecast capital expenditure. The cost recognised includes the recognition of any decommissioning assets related to mine development.

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:

Asset Type	Depreciation Rate
Mining equipment	5 – 10 per cent per annum
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.

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 41 under the heading Share option schemes which is within the audited part of that report.

Pensions

The Group operates a defined contribution pension scheme. The contributions payable to the scheme are expensed in the period to which they relate.

Foreign currencies

Monetary assets and liabilities are translated at year end exchange rates and the resulting exchange rate differences are included in the consolidated income statement within the results of operating activities if arising from trading activities, including inter-company trading balances and within finance cost/income if arising from financing. For consolidation purposes, income and expense items are included in the consolidated income statement at average rates, and assets and liabilities are translated at year end exchange rates. Translation differences arising on consolidation are recognised in other comprehensive income.Foreign exchange differences on intercompany loans are recorded in other comprehensive income when the loans are not considered as trading balances and are not expected to be repaid in the foreseeable future. Where foreign operations are disposed of, the cumulative exchange differences of that foreign operation are recognised in the consolidated income statement when the gain or loss on disposal is recognised. Transactions in foreign currencies are translated at the exchange rate ruling on the transaction date.

Financial assets and financial liabilities

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.

Group accounting policies

Bank loans and overdrafts

Bank loans and overdrafts are included as financial liabilities on the Group balance sheet at the amounts drawn on the particular facilities net of the unamortised cost of financing. Interest payable on those facilities is expensed as finance cost in the period to which it relates.

Lease liabilities

For any new contracts entered into the Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Group assesses whether the contract contains an identified asset and has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use.

At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. Right-of-use assets, excluding property head leases, have been included in property, plant and equipment and are measured at cost, which is made up of the initial measurement of the lease liability and any initial direct costs incurred by the Group. The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate. Liabilities relating to short term leases are included within trade and other payables. 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 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.

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.

82 Bisichi PLC Financial statements

1. SEGMENTAL REPORTING

2022

Business analysis	Mining £’000	Property £’000	Other £’000	Total £’000
Significant revenue customer A	57,381	-	-	57,381
Significant revenue customer B	29,934	-	-	29,934
Significant revenue customer C	2,167	-	-	2,167
Other revenue	3,931	1,108	590	5,629
Segment revenue	93,413	1,108	590	95,111
Operating profit before fair value adjustments & exchange movements	37,033	652	585	38,270
Revaluation of investments & exchange movements	(270)	(60)	1,036	706
Operating profit and segment result	36,763	592	1,621	38,976
Segment assets	25,911	12,682	13,478	52,071
Unallocated assets – Non-current assets				53
– Cash & cash equivalents				10,590
Total assets excluding investment in joint ventures and assets held for sale				62,714
Segment liabilities	(17,928)	(2,536)	(5)	(20,469)
Borrowings	(3,845)	(3,880)	-	(7,725)
Total liabilities	(21,773)	(6,416)	(5)	(28,194)
Net assets				34,520
Non segmental assets – Investment in joint ventures				1,041
Net assets as per balance sheet				35,561

Geographic analysis

	United Kingdom £’000	South Africa £’000	Total £’000
Revenue	1,698	93,413	95,111
Operating (loss)/profit and segment result	(3,696)	42,672	38,976
Depreciation	(41)	(1,052)	(1,093)
Non-current assets excluding investments	10,688	16,324	27,012
Total net assets	28,285	7,276	35,561
Capital expenditure	46	8,434	8,480

83 Bisichi PLC Financial statements

Notes to the financial statements

1. SEGMENTAL REPORTING CONTINUED

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 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 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

84 Bisichi PLC Financial statements

Notes to the financial statements

2. REVENUE

	2022 £’000	2021 £’000
Revenue from contracts with customers:
Coal sales and processing	93,413	49,226
Service charges recoverable from tenants	98	130
Other:
Rental income	1,010	989
Other revenue	590	175
Revenue	95,111	50,520

Segmental mining revenue is derived principally from coal sales and is recognised once the control of the goods has transferred from the Group to the buyer. Segmental property revenue is derived from rental income and service charges recoverable from tenants. This is consistent with the revenue information disclosed for each reportable segment (see note 1). Rental income is recognised on a straight-line basis over the term of the lease. Service charges recoverable from tenants are recognised over time as the service is rendered. Revenue is measured based on the consideration specified in the contract with the customer or tenant.

3.## OPERATING COSTS

	2022 £’000	2021 £’000
Mining	43,209	38,008
Property	269	400
Cost of sales	43,478	38,408
Administration	13,363	9,655
Operating costs	56,841	48,063

The direct property costs are:

	2022 £’000	2021 £’000
Direct property expense	250	351
Bad debts	19	49
	269	400

Operating costs above include depreciation of £1,093,000 (2021: £2,571,000).

4. (LOSS)/GAIN ON REVALUATION OF INVESTMENT PROPERTIES

The reconciliation of the investment (deficit)/surplus to the gain on revaluation of investment properties in the income statement is set out below:

	2022 £’000	2021 £’000
Investment (deficit)/surplus	(60)	255
Loss on valuation movement in respect of head lease payments	(5)	(26)
(Loss)/Gain on revaluation of investment properties	(65)	229

5. PROFIT BEFORE TAXATION

Profit before taxation is arrived at after charging:

	2022 £’000	2021 £’000
Staff costs (see note 29)	11,991	7,491
Depreciation	1,093	2,571
Exchange loss	(270)	(121)
Fees payable to the company’s auditor for the audit of the company’s annual accounts	50	51
Fees payable to the company’s auditor and its associates for other services:
The audit of the company’s subsidiaries pursuant to legislation	43	37
Audit related services	-	-
Non-audit related services	-	-
(Increase)/Decrease in value of Inventory	(4,009)	2,105

The directors consider the auditors were best placed to provide the above non-audit and audit related services which refer to regulatory matters. The audit committee reviews the nature and extent of non-audit services to ensure that independence is maintained.

6. DIRECTORS’ EMOLUMENTS

Directors’ emoluments are shown in the Directors’ remuneration report on page 40 which is within the audited part of that report.

7. INTEREST PAYABLE

	2022 £’000	2021 £’000
On bank overdrafts and bank loans	507	554
Unwinding of discount	319	-
Lease liabilities	25	29
Other interest payable	196	216
Interest payable	1,047	799

8. TAXATION

	2022 £’000	2021 £’000
(a) Based on the results for the year:
Current tax - UK	-	-
Current tax - Overseas	11,520	750
Corporation tax - adjustment in respect of prior year – UK	-	-
Current tax	11,520	750
Deferred tax	388	45
Total tax in income statement charge	11,908	795
(b) Factors affecting tax charge for the year:
The corporation tax assessed for the year is different from that at the standard rate of corporation tax in the United Kingdom of 19.00% (2021: 19%). The differences are explained below:
Profit/ Loss on ordinary activities before taxation	38,014	2,501
Tax on profit/ loss on ordinary activities at 19.00% (2021: 19.00%)	7,223	475
Effects of:
Expenses not deductible for tax purposes	280	49
Capital gains(losses) on disposal	14	20
Differences in tax rates to UK Tax rate	4,491	260
Other differences	(100)	(9)
Adjustment in respect of prior years	-	-
Total tax in income statement (credit) / charge	11,908	795
(c) Analysis of United Kingdom and overseas tax:
United Kingdom tax included in above:
Current tax	-	-
Deferred tax	(937)	152
	(937)	152
Overseas tax included in above:
Current tax	11,520	750
Adjustment in respect of prior years	-	-
Current tax	11,520	750
Deferred tax	1,325	(107)
	12,845	643

Overseas tax is derived from the Group’s South African mining operation. Refer to note 1 for a report on the Group’s mining and South African segmental reporting. The adjustment to tax rate arises due to the deferred tax rate used in the UK for the year of 25% (2021: 25%) and the corporation tax rate assessed in South Africa for the year of 28% (2021: 28%) being different from the corporation tax rate in the UK.

9. SHAREHOLDER DIVIDENDS

	2022 Per share	2022 £’000	2021 Per share	2021 £’000
Dividends paid during the year relating to the prior period	6p	641	-	-
Dividends relating to the current period:
Interim dividend	10p	1,067	-	-
Proposed final dividend	4p	427	4p	427
Proposed special dividend	8p	854	2p	214
	22p	2,348	6p	641

The interim dividend for 2022 was approved by the Board on 30th August 2022, paid on 3rd February 2023 and accounted for as payable as at 31 December 2022. The total dividends to shareholders accounted during the year of £1,708,000 (2021: £Nil) comprise of dividends paid during the year relating to the prior period of £641,000 (2021: £Nil) and the interim dividend of £1,067,000 (£Nil).

The final and special dividends for 2022 are not accounted for until they have been approved at the Annual General Meeting.

10. PROFIT AND DILUTED PROFIT PER SHARE

Both the basic and diluted profit per share calculations are based on a profit after tax attributable to equity holders of the company of £17,612,000 (2021: £1,491,000). The basic profit/(loss) per share has been calculated on a weighted average of 10,676,839 (2021: 10,676,839) ordinary shares being in issue during the period. The diluted profit per share has been calculated on the weighted average number of shares in issue of 10,676,839 (2021: 10,676,839) plus the dilutive potential ordinary shares arising from share options of nil (2021: 21,923) totalling 10,676,839 (2021: 10,698,762).

11. INVESTMENT PROPERTIES

	Freehold £’000	Long Leasehold £’000	Head Lease £’000	Total £’000
Valuation at 1 January 2022	8,230	2,295	175	10,700
Revaluation	40	(100)	(5)	(65)
Valuation at 31 December 2022	8,270	2,195	170	10,635
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
Historical cost
At 31 December 2022	5,851	728	-	6,579
At 31 December 2021	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:

	2022 £’000	2021 £’000
Carter Towler	10,465	10,525

The valuations were carried out in accordance with the Statements of Asset Valuation and Guidance Notes published by The Royal Institution of Chartered Surveyors.

Each year external valuers are appointed by the Executive Directors on behalf of the Board. The valuers are selected based upon their knowledge, independence and reputation for valuing assets such as those held by the Group.

Valuations are performed annually and are performed consistently across all investment properties in the Group’s portfolio. At each reporting date appropriately qualified employees of the Group verify all significant inputs and review the computational outputs. Valuers submit their report to the Board on the outcome of each valuation round. Valuations take into account tenure, lease terms and structural condition. The inputs underlying the valuations include market rent or business profitability, likely incentives offered to tenants, forecast growth rates, yields, EBITDA, discount rates, construction costs including any specific site costs (for example section 106), professional fees, developer’s profit including contingencies, planning and construction timelines, lease regear costs, planning risk and sales prices based on known market transactions for similar properties to those being valued. Valuations are based on what is determined to be the highest and best use. When considering the highest and best use a valuer will consider, on a property by property basis, its actual and potential uses which are physically, legally and financially viable. Where the highest and best use differs from the existing use, the valuer will consider the cost and likelihood of achieving and implanting this change in arriving at its valuation.There are often restrictions on Freehold and Leasehold property which could have a material impact on the realisation of these assets. The most significant of these occur when planning permission or lease extension and renegotiation of use are required or when a credit facility is in place. These restrictions are factored in the property’s valuation by the external valuer.

IFRS 13 sets out a valuation hierarchy for assets and liabilities measured at fair value as follows:
Level 1: valuation based on inputs on quoted market prices in active markets
Level 2: valuation based on inputs other than quoted prices included within level 1 that maximise the use of observable data directly or from market prices or indirectly derived from market prices.
Level 3: where one or more significant inputs to valuations are not based on observable market data

The inter-relationship between key unobservable inputs and the Groups’ properties is detailed in the table below:

Class of property	Level 3 Valuation technique	Key unobservable inputs	Carrying/ fair value 2022 £’000	Carrying/ fair value 2021 £’000	Range (weighted average) 2022	Range (weighted average) 2021
Freehold – external valuation	Income capitalisation	Estimated rental value per sq ft p.a	8,270	8,230	£4 – £29 (£21)	£6 – £29 (£21)
		Equivalent Yield			8.9% – 15.8% (11.4%)	8.9% – 14.7% (11.2%)
Long leasehold – external valuation	Income capitalisation	Estimated rental value per sq ft p.a	2,195	2,295	£8 – £8 (£8)	£9 – £9 (£9)
		Equivalent yield			9.8% – 9.8% (9.8%)	9.8% – 9.8% (9.8%)
At 31 December			10,465	10,525

There are interrelationships between all these inputs as they are determined by market conditions. The existence of an increase in more than one input would be to magnify the input on the valuation. The impact on the valuation will be mitigated by the interrelationship of two inputs in opposite directions, for example, an increase in rent may be offset by an increase in yield.

Bisichi PLC Financial statements

Notes to the financial statements

11. INVESTMENT PROPERTIES CONTINUED

The table below illustrates the impact of changes in key unobservable inputs on the carrying / fair value of the Group’s properties:

	Estimated rental value	Estimated rental value	Equivalent yield	Equivalent yield
	10% increase £’000	10% decrease £’000	25bp contraction £’000	25bp expansion £’000
	2022	2021	2022	2021
Freehold – external valuation	827 / (827)	823 / (823)	205 / (195)	203 / (193)
Long Leasehold – external valuation	220 / (220)	230 / (230)	57 / (55)	60 / (57)

12. MINING RESERVES, PLANT AND EQUIPMENT

	Mining reserves £’000	Mining equipment and development costs £’000	Motor vehicles £’000	Office equipment £’000	Total £’000
Cost at 1 January 2022	1,097	29,063	396	179	30,735
Exchange adjustment	(13)	134	3	1	125
Additions	1,248	7,060	17	55	8,480
Disposals	-	(23)	(69)	(72)	(164)
Cost at 31 December 2022	2,332	36,291	385	168	39,176
Accumulated depreciation at 1 January 2022	1,089	20,167	264	150	21,670
Exchange adjustment	10	166	3	1	180
Charge for the year	-	1,037	38	18	1,093
Disposals	-	(23)	(49)	(72)	(144)
Accumulated depreciation at 31 December 2022	1,099	21,347	256	97	22,799
Net book value at 31 December 2022	1,233	14,944	129	71	16,377
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

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 development costs £’000	Motor vehicles £’000	Total £’000
Net book value at 1 January 2022	219	48	267
Additions	-	-	-
Exchange adjustment	5	-	5
Depreciation	(38)	(27)	(65)
Net book value at 31 December 2022	186	21	207
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

13. INVESTMENTS HELD AS NON-CURRENT ASSETS

	Net investment in joint ventures assets £’000	Other £’000	Net investment in joint ventures assets £’000	Other £’000
	2022	2022	2021	2021
At 1 January	1,130	3,631	1,255	1,746
Gain in investment	-	718	-	701
Additions	-	9,758	-	1,630
Disposals	-	(1,517)	-	(446)
Share of (loss)/gain in joint ventures	(89)	-	(125)	-
Net assets at 31 December	1,041	12,590	1,130	3,631

Other investments comprise of the following:

	2022 £’000	2021 £’000
Net book value of unquoted investments	-	-
Net book and market value of readily realisable investments listed on stock exchanges in the United Kingdom	6,782	1,564
Net book and market value of readily realisable investments listed on overseas stock exchanges	5,808	2,067
	12,590	3,631

Bisichi PLC Financial statements

Notes to the financial statements

14. JOINT VENTURES

Development Physics Limited
The company owns a third of the issued share capital of Development Physics Limited, an unlisted property development company.
At year end, the negative carrying value of the investment held by the Group was £14,000 (2021: £3,000). The remaining two thirds is held equally by London & Associated Properties PLC and Metroprop Real Estate Ltd. Development Physics Limited is incorporated in England and Wales and its registered address is 12 Little Portland Street, London, W1W8BJ. It has issued share capital of 99 (2021: 99) ordinary shares of £1 each. No dividends were received during the period.

Dragon Retail Properties Limited
The company owns 50% of the issued share capital of Dragon Retail Properties Limited, an unlisted property investment company. At year end, the carrying value of the investment held by the Group was £606,000 (2021: £637,000). The remaining 50% is held by London & Associated Properties PLC. Dragon Retail Properties Limited is incorporated in England and Wales and its registered address is 12 Little Portland Street, London, W1W8BJ. It has issued share capital of 500,000 (2021: 500,000) ordinary shares of £1 each. No dividends were received during the period. It holds a Santander bank loan of £1.143million secured against its investment property. The bank loan of £1.143million is secured by way of a first charge on specific freehold property at a value of £2.038 million. The interest cost of the loan is 2.57 per cent above the bank’s base rate. A refinancing of this loan is currently underway. The loan originally expired in September 2020, but has been extended to October 2023. Santander have indicated that they are willing to provide a new term loan and we expect to complete this in the near future.

West Ealing Projects Limited
The company owns 50% of the issued share capital of West Ealing Projects Limited, an unlisted property development company. At year end, the carrying value of the investment held by the Group was £449,000 (2021: £496,000). The remaining 50% is held by London & Associated Properties PLC. West Ealing Projects Limited is incorporated in England and Wales and its registered address is 12 Little Portland Street, London, W1W8BJ. It has issued share capital of 1,000,000 (2021: 1,000,000) ordinary shares of £1 each. No dividends were received during the period.

Bisichi PLC Financial statements

Notes to the financial statements

14.# JOINT VENTURES CONTINUED

## Development Physics £’000	Dragon £’000	West Ealing £’000	2022 £’000	Development Physics £’000	Dragon £’000	West Ealing £’000	2021 £’000
Turnover	-	168	53	221	-	168	58
Profit and loss:
(Loss)/Profit before depreciation, interest and taxation	(33)	(5)	(71)	(109)	(10)	(32)	(215)
Depreciation and amortisation	-	(3)	-	(3)	-	(3)	-
(Loss)/Profit before interest and taxation	(33)	(8)	(71)	(112)	(10)	(35)	(215)
Interest Income	-	-	-	-	-	-	-
Interest expense	-	(51)	(1)	(52)	-	(31)	(1)
(Loss)/Profit before taxation	(33)	(59)	(72)	(164)	(10)	(66)	(216)
Taxation	-	(2)	(34)	(36)	-	-	38
(Loss)/Profit after taxation	(33)	(61)	(106)	(200)	(10)	(66)	(178)

Balance sheet

	Development Physics £’000	Dragon £’000	West Ealing £’000	2022 £’000	Development Physics £’000	Dragon £’000	West Ealing £’000	2021 £’000
Non-current assets	-	2,038	-	2,038	-	2,091	-	2,091
Cash and cash equivalents	2	107	9	118	-	27	5	32
Property inventory	348	-	8,112	8,460	232	-	7,494	7,726
Other current assets	2	269	47	318	27	374	70	471
Current borrowings	-	(1,143)	(4,399)	(5,542)	-	-	-	-
Other current liabilities	(395)	(59)	(2,862)	(3,316)	(269)	(53)	(6,549)	(6,871)
Net current assets	(43)	(826)	907	38	(10)	348	1,020	1,358
Non-current borrowings	-	-	(9)	(9)	-	-	(1,165)	(1,193)
Other non-current liabilities	-	-	-	-	-	-	-	-
Net assets at 31 December	(43)	1,212	898	2,067	(10)	1,274	992	2,256
Share of net assets at 31 December	(14)	606	449	1,041	(3)	637	496	1,130

93 Bisichi PLC Financial statements

Notes to the financial statements

15. SUBSIDIARY COMPANIES

The company owns the following ordinary share capital of the subsidiaries which are included within the consolidated financial statements:

Activity	Percentage of share capital	Registered address	Country of incorporation
Directly held:
Mineral Products Limited	100%	12 Little Portland Street, London, W1W8BJ	England and Wales
Bisichi (Properties) Limited	100%	12 Little Portland Street, London, W1W8BJ	England and Wales
Bisichi Northampton Limited	100%	12 Little Portland Street, London, W1W8BJ	England and Wales
Bisichi Trustee Limited	100%	12 Little Portland Street, London, W1W8BJ	England and Wales
Urban First (Northampton) Limited	100%	12 Little Portland Street, London, W1W8BJ	England and Wales
Bisichi Mining (Exploration) Limited	100%	12 Little Portland Street, London, W1W8BJ	England and Wales
Ninghi Marketing Limited	90.1%	12 Little Portland Street, London, W1W8BJ	England and Wales
Bisichi Mining Management Services Limited	100%	12 Little Portland Street, London, W1W8BJ	England and Wales
Bisichi Coal Mining (Pty) Limited	100%	Samora Machel Street, Bethal Road, Middelburg, Mpumalanga, 1050	South Africa
Indirectly held:
Black Wattle Colliery (Pty) Limited	62.5%	Samora Machel Street, Bethal Road, Middelburg, Mpumalanga, 1050	South Africa
Sisonke Coal Processing (Pty) Limited	62.5%	Samora Machel Street, Bethal Road, Middelburg, Mpumalanga, 1050	South Africa
Black Wattle Klipfontein (Pty) Limited	62.5%	Samora Machel Street, Bethal Road, Middelburg, Mpumalanga, 1050	South Africa
Amandla Ehtu Mineral Resource Development (Pty) Limited	70%	Samora Machel Street, Bethal Road, Middelburg, Mpumalanga, 1050	South Africa

Details on the non-controlling interest in subsidiaries are shown under note 27.

16. INVENTORIES

	2022 £’000	2021 £’000
Coal Washed	4,758	1,185
Mining Production	162	59
Work in progress	221	-
Other	58	9
	5,199	1,253

The amount of inventories recognised as an expense during the period was £35,969,000 (2021: £32,912,000).

94 Bisichi PLC Financial statements

Notes to the financial statements

17. TRADE AND OTHER RECEIVABLES

	2022 £’000	2021 £’000
Financial assets falling due within one year:
Trade receivables	4,067	6,328
Amount owed by joint venture	1,379	1,067
Other receivables	860	984
Non-financial instruments falling due within one year:
Prepayments and accrued income	131	247
	6,437	8,626

Financial assets falling due within one year are held at amortised cost. The fair value of trade and other receivables approximates their carrying amounts. The Group applies a simplified approach to measure the credit loss allowance for trade receivables using the lifetime expected credit loss provision. The lifetime expected credit loss is evaluated for each trade receivable taking into account payment history, payments made subsequent to year end and prior to reporting, past default experience and the impact of any other relevant and current observable data. The Group applies a general approach on all other receivables classified as financial assets. At year end, the Group allowance for doubtful debts provided against trade receivables was £89,000 (2021: £140,000).

18. INVESTMENTS IN LISTED SECURITIES HELD AT FVPL

	2022 Other £’000	2021 Other £’000
At 1 January	685	833
Gain in investments	318	110
Additions	449	-
Disposals	(566)	(258)
Market value at 31 December	886	685

	2022 £’000	2021 £’000
Market value of listed Investments:
Listed in Great Britain	686	478
Listed outside Great Britain	200	207
	886	685
Original cost of listed investments	846	846
Unrealised surplus / deficit of market value versus cost	40	(161)

95 Bisichi PLC Financial statements

Notes to the financial statements

19. TRADE AND OTHER PAYABLES

	2022 £’000	2021 £’000
Trade payables	8,519	7,171
Amounts owed to joint ventures	120	156
Lease liabilities (Note 31)	54	65
Other payables	2,000	2,281
Accruals	2,366	844
Deferred Income	223	226
	13,282	10,743

20. FINANCIAL LIABILITIES – BORROWINGS

Current		Non-current
2022 £’000	2021 £’000	2022 £’000	2021 £’000
Bank overdraft (secured)	3,225	2,536	-
Bank loan (secured)	570	130	3,930
	3,795	2,666	3,930

	2022 £’000	2021 £’000
Bank overdraft and loan instalments by reference to the balance sheet date:
Within one year	3,795	2,666
From one to two years	3,906	11
From two to five years	24	3,842
	7,725	6,519

	2022 £’000	2021 £’000
Bank overdraft and loan analysis by origin:
United Kingdom	3,880	3,839
Southern Africa	3,845	2,680
	7,725	6,519

In South Africa, an R85million trade facility is held with Absa Bank Limited by Sisonke Coal Processing (Pty) Limited (“Sisonke Coal Processing”) in order to cover the working capital requirements of the Group’s South African operations. The interest cost of the loan is at the South African prime lending rate plus 3.8%. The facility is renewable annually, is repayable on demand and is secured by way of a first charge over specific pieces of mining equipment, inventory and the debtors of the relevant company which holds the loan which are included in the financial statements at a value of £11,482,554 (2021: £8,843,219). All banking covenants were either adhered to or waived by Absa Bank Limited during the year.

In the UK, the Group holds a £3.96million term loan facility with Julian Hodge Bank Limited. The loan is secured against the Group’s UK retail property portfolio. The debt package has a five year term and is repayable at the end of the term in December 2024. The overall interest cost of the loan is 4.00% above the Bank of England base rate. The loan is secured by way of a first charge over the investment properties in the UK which are included in the financial statements at a value of £10,465,000 (2021: £10,525,000). No banking covenants were breached by the Group during the year.# 20. FINANCIAL LIABILITIES – BORROWINGS CONTINUED

Consistent with others in the mining and property industry, the Group monitors its capital by its gearing levels. This is calculated as the total bank loans and overdraft less remaining cash and cash equivalents as a percentage of equity. At year end the gearing of the Group was calculated as follows:

	2022 £’000	2021 £’000
Total bank loans and overdraft	7,725	6,519
Less cash and cash equivalents (excluding overdraft)	(10,590)	(3,018)
Net debt	(2,865)	3,501
Total equity attributable to shareholders of the parent	33,802	17,512
Gearing	(8.5%)	20.0%

Analysis of the changes in liabilities arising from financing activities:

	2022 £’000		2021 £’000
	Bank borrowings	Bank overdrafts	Lease liabilities
Balance at 1 January	3,983	2,536	454
Exchange adjustments	(9)	11	5
Cash movements excluding adjustments	525	678	(56)
Additions	-	-	(5)
Balance at 31 December	4,499	3,225	398

21. PROVISION FOR REHABILITATION

	2022 £’000	2021 £’000
As at 1 January	1,390	1,442
Exchange adjustment	6	(52)
Increase in provision	-	-
Unwinding of discount	319	-
As at 31 December	1,715	1,390

22. FINANCIAL INSTRUMENTS

Total financial assets and liabilities

The Group’s financial assets and liabilities are as follows, representing both the fair value and the carrying value:

	Financial Assets measured at amortised cost £’000	Financial Liabilities measured at amortised cost £’000	Investments held at FVPL £’000	2022 £’000	Financial Assets measured at amortised cost £’000	Financial Liabilities measured at amortised cost £’000	Investments held at FVPL £’000	2021 £’000
Cash and cash equivalents	10,590	-	-	10,590	3,018	-	-	3,018
Non-current other investments held at FVPL	-	-	12,590	12,590	-	-	3,631	3,631
Investments in listed securities held at FVPL	-	-	886	886	-	-	685	685
Trade and other receivables	6,306	-	-	6,306	8,379	-	-	8,379
Bank borrowings and overdraft	-	(7,725)	-	(7,725)	-	(6,519)	-	(6,519)
Lease Liabilities	-	(398)	-	(398)	-	(454)	-	(454)
Other liabilities	-	(17,261)	-	(17,261)	-	(11,178)	-	(11,178)
	16,896	(25,384)	13,476	4,988	11,397	(18,151)	4,316	(2,438)

Investments in listed securities held at fair value through profit and loss fall under level 1 of the fair value hierarchy into which fair value measurements are recognised in accordance with the levels set out in IFRS 7. The comparative figures for 2021 fall under the same category of financial instrument as 2022. The carrying amount of short term (less than 12 months) trade receivable and other liabilities approximate their fair values. The fair value of non-current borrowings in note 20 approximates its carrying value and was determined under level 2 of the fair value hierarchy and is estimated by discounting the future contractual cash flows at the current market interest rates for UK borrowings and for the South African overdraft facility. The fair value of the lease liabilities in note 31 approximates its carrying value and was determined under level 2 of the fair value hierarchy and is estimated by discounting the future contractual cash flows at the current market interest rates.

Treasury policy

Although no derivative transactions were entered into during the current and prior year, the Group may use derivative transactions such as interest rate swaps and forward exchange contracts as necessary in order to help manage the financial risks arising from the Group’s activities. The main risks arising from the Group’s financing structure are interest rate risk, liquidity risk, market risk, credit risk, currency risk and commodity price risk. There have been no changes during the year of the main risks arising from the Group’s finance structure. The policies for managing each of these risks and the principal effects of these policies on the results are summarised below.

Interest rate risk

Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest bearing financial assets and liabilities that the Group uses. Treasury activities take place under procedures and policies approved and monitored by the Board to minimise the financial risk faced by the Group. Interest bearing assets comprise cash and cash equivalents which are considered to be short-term liquid assets and loans to joint ventures. Interest bearing borrowings comprise bank loans, bank overdrafts and variable rate finance lease obligations. The rates of interest vary based on Bank of England in the UK and PRIME in South Africa.

As at 31 December 2022, with other variables unchanged, a 1% increase or decrease in interest rates, on investments and borrowings whose interest rates are not fixed, would respectively change the profit/loss for the year by £35,000 (2021: £80,000). The effect on equity of this change would be an equivalent decrease or increase for the year of £35,000 (2021: £80,000).

Liquidity risk

The Group’s policy is to minimise refinancing risk. Efficient treasury management and strict credit control minimise the costs and risks associated with this policy which ensures that funds are available to meet commitments as they fall due. As at year end the Group held borrowing facilities in the UK in Bisichi PLC and in South Africa in Black Wattle Colliery (Pty) Ltd.

The following table sets out the maturity profile of contractual undiscounted cash flows of financial liabilities as at 31 December:

	2022 £’000	2021 £’000
Within one year	21,511	14,122
From one to two years	4,259	238
From two to five years	479	4,391
Beyond five years	126	129
	26,375	18,880

The following table sets out the maturity profile of contractual undiscounted cash flows of financial liabilities as at 31 December maturing within one year:

	2022 £’000	2021 £’000
Within one month	15,635	11,509
From one to three months	4,150	1,699
From four to twelve months	1,726	914
	21,511	14,122

In South Africa, an R85million trade facility is held with Absa Bank Limited by Sisonke Coal Processing (Pty) Limited (“Sisonke Coal Processing”) in order to cover the working capital requirements of the Group’s South African operations. The interest cost of the facility is variable and linked to the South African repo rate.The interest cost of the loan is at the South African prime lending rate plus 3.8%. The facility is renewable annually, is repayable on demand and is secured against inventory, debtors and cash that are held by Sisonke Coal Processing (Pty) Limited. The facility is included in cash and cash equivalents within the cashflow statement.

In the UK, the Group holds a £3.96 million term loan facility with Julian Hodge Bank Limited. The loan is secured against the Group’s UK retail property portfolio. The debt package has a five-year term and is repayable at the end of the term in December 2024. The overall interest cost of the loan is 4.00% above the Bank of England base rate.

As a result of the above agreed banking facilities, the Directors believe that the Group is well placed to manage its liquidity risk.

Credit risk

The Group is mainly exposed to credit risk on its cash and cash equivalents, trade and other receivables and amounts owed by joint ventures as per the balance sheet. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet which at year end amounted to £16,896,000 (2021: £11,397,000).

To mitigate risk on its cash and cash equivalents, the Group only deposits surplus cash with well-established financial institutions of high quality credit standing.

The Group’s credit risk is primarily attributable to its trade receivables. Trade debtors’ credit ratings are reviewed regularly. The Group’s review includes measures such as the use of external ratings and establishing purchase limits for each customer. The Group had amounts due from its significant revenue customers at the year end that represented 84% (2021: 53%) of the trade receivables balance. These amounts have been subsequently settled. The Group approach to measure the credit loss allowance for trade receivables is outlined in note 17. At year end, the Group allowance for doubtful debts provided against trade receivables was £89,000 (2021: £140,000). As at year end the amount of trade receivables held past due date less credit loss allowances was £159,000 (2021: £201,000). To date, the amount of trade receivables held past due date less credit loss allowances that has not subsequently been settled is £122,000 (2021: £106,000). Management have no reason to believe that this amount will not be settled.

The Group exposure to credit risk on its loans to joint ventures and other receivables is mitigated through ongoing review of the underlying performance and resources of the counterparty including evaluation of different scenarios of probability of default and expected loss applicable to each of the underlying balances.

Financial assets maturity

On 31 December 2022, cash at bank and in hand amounted to £10,712,000 (2021: £3,018,000) which is invested in short term bank deposits maturing within one year bearing interest at the bank’s variable rates. Cash and cash equivalents all have a maturity of less than 3 months.

Foreign exchange risk

All trading is undertaken in the local currencies except for certain export sales which are invoiced in dollars. It is not the Group’s policy to obtain forward contracts to mitigate foreign exchange risk on these contracts as payment terms are within 15 days of invoice or earlier. Funding is also in local currencies other than inter-company investments and loans and it is also not the Group’s policy to obtain forward contracts to mitigate foreign exchange risk on these amounts. During 2022 and 2021 the Group did not hedge its exposure of foreign investments held in foreign currencies.

The principal currency risk to which the Group is exposed in regard to inter-company balances is the exchange rate between Pounds sterling and South African Rand. It arises as a result of the retranslation of Rand denominated inter-company trade receivable balances held within the UK which are payable by South African Rand functional currency subsidiaries.

Based on the Group’s net financial assets and liabilities as at 31 December 2022, a 25% strengthening of Sterling against the South African Rand, with all other variables held constant, would decrease the Group’s profit after taxation by £121,000 (2021: £218,000). A 25% weakening of Sterling against the South African Rand, with all other variables held constant would increase the Group’s profit after taxation by £201,000 (2021: £364,000). The 25% sensitivity has been determined based on the average historic volatility of the exchange rate.

The table below shows the currency profiles of cash and cash equivalents:

	2022 £’000	2021 £’000
Sterling	7,779	1,397
South African Rand	2,238	1,017
US Dollar	573	604
Cash and cash equivalents	10,590	3,018

Cash and cash equivalents earn interest at rates based on Bank of England rates in Sterling and Prime in Rand.

The tables below show the currency profiles of net monetary assets and liabilities by functional currency of the Group:

2022:

	Sterling £’000	South African Rands £’000
Sterling	14,715	-
South African Rand	45	(11,743)
US Dollar	1,971	-
	16,731	(11,743)

2021:

	Sterling £’000	South African Rands £’000
Sterling	1,123	-
South African Rand	65	(5,088)
US Dollar	1,462	-
	2,650	(5,088)

23. DEFERRED TAXATION

	2022 £’000	2021 £’000
As at 1 January	506	474
Recognised in income	388	45
Exchange adjustment	(22)	(13)
As at 31 December	872	506

The deferred tax balance comprises the following:

Revaluations	671	641
Capital allowances	3,855	2,253
Short term timing difference	(813)	(832)
Unredeemed capital deductions	(1,439)	(1,057)
Losses and other deductions	(1,402)	(499)
	872	506

Refer to note 8 for details of deferred tax recognised in income in the current year. Tax rates of 25% (2021: 25%) in the UK and 27% (2021: 28%) in South Africa were utilised to calculate year end deferred tax balances.

24. SHARE CAPITAL

	2022 £’000	2021 £’000
Authorised:
13,000,000 ordinary shares of 10p each	1,300	1,300
Allotted and fully paid:	Number of ordinary shares	2022 £’000
	2022 Number of ordinary shares	2021 Number of ordinary shares
At 1 January and outstanding at 31 December	10,676,839	10,676,839

25. OTHER RESERVES

	2022 £’000	2021 £’000
Equity share options	1,026	621
Net investment premium on share capital in joint venture	86	86
	1,112	707

26.## SHARE BASED PAYMENTS

Details of the share option scheme are shown in the Directors’ remuneration report on page 41 under the heading Share option schemes which is within the audited part of this report. Further details of the share option schemes are set out below.

The Bisichi PLC Unapproved Option Schemes:

Year of grant	Subscription price per share	Period within which options exercisable	Number of shares for which options outstanding at 31 December 2021	Number of share options exercised/surrendered/lapsed/awarded during year	Number of shares for which options outstanding at 31 December 2022
2015	87.0p	Sep 2015 – Sep 2025	300,000	(300,000)	-
2018	73.50p	Feb 2018 – Feb 2028	380,000	(380,000)	-
2022	352.0p	Sep 2022 – Sep 2032	-	760,000	760,000

102 Bisichi PLC Financial statements

Notes to the financial statements

26. SHARE BASED PAYMENTS CONTINUED

On 1 September 2022, the company entered into an agreement with A Heller and G. Casey to cancel the 300,000 options which were granted in 2015 and 380,000 options which were granted in 2018. The aggregate consideration paid by the group to effect the cancellation was £1,853,270.

On 1 September 2022 the company granted additional options to the following directors of the company:

• A. Heller 380,000 options at an exercise price of 352.0p per share.
• G. Casey 380,000 options at an exercise price of 352.0p per share.

The options vest on date of grant and are exercisable within a period of 10 years from date of grant. There are no performance or service conditions attached to the 2022 options which are outstanding at 31 December 2022.

The above options were valued at £547,200 at date of grant using the Black-Scholes-Merton model with the following assumptions:

• Expected volatility 54.18% (Based on historic volatility)
• Expected life 4 years
• Risk free rate 1.58%
• Expected dividends 6.90%

	2022 Number	2022 Weighted average exercise price	2021 Number	2021 Weighted average exercise price
Outstanding at 1 January	680,000	79.46p	680,000	79.46p
Lapsed/Surrendered/cancelled during the year	(680,000)	79.46p	-	-
Issued during the year	760,000	352.00p	-	-
Outstanding at 31 December	760,000	352.00p	680,000	79.46p
Exercisable at 31 December	760,000	352.00p	680,000	79.46p

27. NON-CONTROLLING INTEREST

	2022 £’000	2021 £’000
As at 1 January	323	116
Issue of shares in subsidiary	1	-
Share of profit/(loss) for the year	8,494	215
Dividends paid	(7,034)	-
Exchange adjustment	(25)	(8)
As at 31 December	1,759	323

103 Bisichi PLC Financial statements

Notes to the financial statements

27. NON-CONTROLLING INTEREST CONTINUED

The non-controlling interest comprises of a 37.5% interest in Black Wattle Colliery (Pty) Ltd and its wholly owned subsidiary Sisonke Coal Processing (Pty) Ltd. Black Wattle Colliery (Pty) Ltd is a coal mining company and Sisonke Coal Processing (Pty) Ltd is a coal processing company both incorporated in South Africa.

Summarised financial information reflecting 100% of the underlying consolidated relevant figures of Black Wattle Colliery (Pty) Ltd’s and its wholly owned subsidiary Sisonke Coal Processing (Pty) Ltd is set out below.

	2022 £’000	2021 £’000
Revenue	93,356	49,225
Expenses	(63,289)	(47,787)
Profit/(loss) for the year	30,067	1,438
Other comprehensive Income	-	-
Total comprehensive income for the year	30,067	1,438
Balance sheet
Non-current assets	16,325	9,019
Current assets	11,752	9,329
Current liabilities	(18,873)	(14,287)
Non-current liabilities	(3,522)	(1,904)
Net assets at 31 December	5,682	2,157

The non-controlling interest originates from the disposal of a 37.5% shareholding in Black Wattle Colliery (Pty) Ltd in 2010 when the total issued share capital in Black Wattle Colliery (Pty) Ltd was increased from 136 shares to 1,000 shares at par of R1 (South African Rand) through the following shares issue:

• a subscription for 489 ordinary shares at par by Bisichi Mining (Exploration) Limited increasing the number of shares held from 136 ordinary shares to a total of 625 ordinary shares;
• a subscription for 110 ordinary shares at par by Vunani Mining (Pty) Ltd;
• a subscription for 265 “A” shares at par by Vunani Mining (Pty) Ltd

On 12 April 2022 the total issued share capital in Black Wattle Colliery (Pty) Ltd was increased further from 1000 shares to 1002 shares at par of R1 through the following share issue:

• a subscription of 1 “B” Share at par by Bisichi Mining (Exploration Limited);
• a subscription of 1 “B” Share at par by Vunani Mining (Pty) Ltd

Bisichi Mining (Exploration) Limited is a wholly owned subsidiary of Bisichi PLC incorporated in England and Wales. Vunani Mining (Pty) Ltd is a South African Black Economic Empowerment company and minority shareholder in Black Wattle Colliery (Pty) Ltd.

The “A” shares rank pari passu with the ordinary shares save that they will have no dividend rights until such time as the dividends paid by Black Wattle Colliery (Pty) Ltd on the ordinary shares subsequent to 30 October 2008 will equate to R832,000,000.5.

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 R832,000.5.

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).

104 Bisichi PLC Financial statements

Notes to the financial statements

28. RELATED PARTY TRANSACTIONS

	At 31 December 2022 £’000	During the year 2022 Costs recharged (to)/by related party £’000	During the year 2022 Cash paid (to)/by related party £’000	At 31 December 2021 £’000	During the year 2021 Costs recharged (to)/by related party £’000	During the year 2021 Cash paid (to)/by related party £’000
Related party:
London & Associated Properties PLC (note (a))	-	200	(241)	41	200	(192)
West Ealing Projects Limited (note (b))	-	-	(239)	-	-	(158)
Dragon Retail Properties Limited (note (c))	120	(36)	-	156	(36)	44
Development Physics Limited (note (d))	-	-	(75)	-	-	(67)
As at 31 December 2022	120	164	(555)
As at 31 December 2021				197	164	(373)

(a) London & Associated Properties PLC (“LAP”) is a substantial shareholder and parent company of Bisichi PLC. Property management, office premises, general management, accounting and administration services are provided for Bisichi PLC and its UK subsidiaries. Bisichi PLC continues to operate as a fully independent company and currently LAP owns only 41.52% of the issued ordinary share capital. However, LAP is deemed under IFRS 10 to have effective control of Bisichi PLC for accounting purposes.(b) West Ealing Projects Limited

West Ealing Projects Limited (“West Ealing”) is an unlisted property company incorporated in England and Wales. West Ealing is owned equally by the company and London & Associated Properties PLC and is accounted as a joint venture and treated as a non-current asset investment.

(c) Dragon Retail Properties Limited

(“Dragon”) is owned equally by the company and London & Associated Properties PLC. Dragon is accounted as a joint venture and is treated as a non-current asset investment.

(d) Development Physics Limited

Development Physics Limited (“DP”) is an unlisted property company incorporated in England and Wales. DP is owned equally by the company, London & Associated Properties PLC and Metroprop Real Estate Ltd and is accounted as a joint venture and treated as a non-current asset investment.

Key management personnel comprise of the directors of the company who have the authority and responsibility for planning, directing, and controlling the activities of the company. Details of key management personnel compensation and interest in share options are shown in the Directors’ Remuneration Report on pages 40 and 41 under the headings Directors’ remuneration, Pension schemes and incentives and Share option schemes which is within the audited part of this report.

The total employers’ national insurance paid in relation to the remuneration of key management was £580,000 (2021: £189,000).

In 2012 a loan was made to one of the directors, Mr A R Heller, for £116,000. Interest is payable on the Director’s Loan at a rate of 6.14 per cent. There is no fixed repayment date for the Director’s Loan. The loan amount outstanding at year end was £41,000 (2021: £41,000) and no repayment (2021: £nil) was made during the year.

The non-controlling interest to Vunani Mining (Pty) Ltd is shown in note 27. In addition, the Group holds an investment in Vunani Limited with a fair value of £44,000 (2021: £45,000) and an investment in Vunani Capital Partners (Pty) Ltd of £189,000 (2021: £38,000). Both are related parties to Vunani Mining (Pty) Ltd and are classified as non-current available for sale investments.

105

Bisichi PLC Financial statements

Notes to the financial statements

1. EMPLOYEES

Staff costs during the year were as follows:	2022 £’000	2021 £’000
Salaries	8,891	6,995
Social security costs	580	189
Pension costs	300	307
Share based payments	2,220	-
	11,991	7,491

The average weekly numbers of employees of the Group during the year were as follows:

	2022	2021
Production	213	214
Administration	15	15
	228	229

1. CAPITAL COMMITMENTS

Commitments for capital expenditure approved and contracted for at the year end	2022 £’000	2021 £’000
	-	-

1. LEASE LIABILITIES AND FUTURE PROPERTY LEASE RENTALS

The lease liabilities are secured by the related underlying assets. The undiscounted maturity analysis of lease payments at 31 December 2022 is as follows:

	Mining Equipment & Development costs £’000	Motor Vehicles £’000	Head Lease Property £’000	2022 £’000	2021 £’000
Within one year	45	12	14	71	83
Second to fifth year	158	9	43	210	226
After five years	53	-	1,288	1,341	1,427
	256	21	1,345	1,622	1,736
Discounting adjustment	(47)	(1)	(1,174)	(1,222)	(1,282)
Present value	209	20	171	400	454

106

Bisichi PLC Financial statements

Notes to the financial statements

1. LEASE LIABILITIES AND FUTURE PROPERTY LEASE RENTALS CONTINUED

The present value of minimum lease payments at 31 December 2022 is as follows:

	Mining Equipment & Development costs £’000	Motor Vehi- cles £’000	Head Lease Property £’000	2022 £’000	2021 £’000
Within one year (Note 19)	32	11	11	54	65
Second to fifth year	127	9	34	170	260
After five years	50	-	126	176	129
Present value	209	20	171	400	454

With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. The Group classifies its right-of-use assets in a consistent manner to its property, plant and equipment. Lease liabilities due within one year are classified within trade and other payables in the balance sheet.

The Group has one lease for mining equipment in South Africa and one lease for motor vehicles in the United Kingdom. Both leases have terms of less than 5 years are either non-cancellable or may only be cancelled by incurring a substantive termination fee. Lease payments for mining equipment are subject to changes in consumer price inflation in South Africa.

The Group has one lease contract for an investment property. The remaining term for the leased investment property is 126 years (2021: 127 years). The annual rent payable is the higher of £7,500 or 6.25% of the revenue derived from the leased assets.

The Group has entered into rental leases on its investment property portfolio consisting mainly of commercial properties. These leases have terms of between 1 and 106 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:

	2022 £’000	2021 £’000
Within one year	973	948
Second year	875	830
Third year	801	776
Fourth year	716	710
Fifth year	645	634
After five years	9,530	9,956
	13,540	13,854

107

Bisichi PLC Financial statements

Notes to the financial statements

1. 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:

	2022 £’000	2021 £’000
Rail siding	49	48
Rehabilitation of mining land	1,715	1,700
Water & electricity	47	46

Contingent tax liability

The interpretation of laws and regulations in South Africa where the Group operates can be complex and can lead to challenges from or disputes with regulatory authorities. Such situations often take significant time to resolve. Where there is a dispute and where a reliable estimate of the potential liability cannot be made, or where the Group, based on legal advice, considers that it is improbable that there will be an outflow of economic resources, no provision is recognised.

Black Wattle Colliery (Pty) Ltd is currently involved in a tax dispute in South Africa related to VAT. The dispute arose during the year ended 31 December 2020 and is related to events which occurred prior to the years ended 31 December 2020. As at 26 April 2023, the Group has been advised that it has a strong legal case, that it has complied fully with the legislation and, therefore, no economic outflow is expected to occur. Because of the nature and complexity of the dispute, the possible financialBecause of the nature and complexity of the dispute, the possible financial effect of a negative decision cannot be measured reliably. Accordingly, no provision has been booked at the year end. At this stage, the Group believes that the dispute will be resolved in its favour.

Bisichi PLC Financial statements

Notes 2022 £’000 2021 £’000

Fixed assets

Tangible assets 35 98 93
Investment in joint ventures 36 665 665
Other investments 36 18,946 9,987
19,709 10,745

Current assets

Debtors – amounts due within one year 37 2,754 3,636
Debtors – amounts due in more than one year 37 1,159 220
Bank balances 7,928 788
11,841 4,644

Creditors – amounts falling due within one year 38 (2,514) (454)
Net current assets 9,327 4,190

Total assets less current liabilities 29,036 14,935

Creditors – amounts falling in more than one year 38 (9) (20)
Net assets 29,027 14,915

Capital and reserves

Called up share capital 24 1,068 1,068
Share premium account 258 258
Other reserves 1,027 622
Retained earnings 33 26,674 12,967
Shareholders’ funds 29,027 14,915

The profit for the financial year, before dividends payable, was £15,415,000 (2021: loss of £203,000).

The company financial statements were approved and authorised for issue by the board of directors on 25 April 2023 and signed on its behalf by:

A R Heller
Director

G J Casey
Director

Company Registration No. 112155

Bisichi PLC Financial statements

Company statement of changes in equity for the year ended 31 December 2022

	Share capital £’000	Share premium £’000	Other reserve £’000	Retained earnings £’000	Shareholders funds £’000
Balance at 1 January 2021	1,068	258	622	13,170	15,118
Dividends paid	-	-	-	-	-
Profit and total comprehensive income for the year	-	-	-	(203)	(203)
Balance at 1 January 2022	1,068	258	622	12,967	14,915
Dividends paid	-	-	-	(1,708)	(1,708)
Share options cancelled	-	-	(142)	-	(142)
Share options issued	-	-	547	-	547
Profit and total comprehensive income for the year	-	-	-	15,415	15,415
Balance at 31 December 2022	1,068	258	1,027	26,674	29,027

Bisichi PLC Financial statements

Company accounting policies for the year ended 31 December 2022

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 102 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 74.

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 IAS 2, 3, 13 and 15. Therefore these financial statements do not include:
* certain comparative information as otherwise required by IAS;
* 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 79.

Deferred taxation

Details on the Group’s accounting policy for deferred taxation can be found on page 81.

Leased assets and liabilities

Details on the Group’s accounting policy for leased assets and liabilities can be found on page 80.

Pensions

Details on the Group’s accounting policy for pensions can be found on page 79.

Share based remuneration

Details on the Group’s accounting policy for share based remuneration can be found on page 79. Details of the share options in issue are disclosed in the directors’ remuneration report on page 41 under the heading share option schemes which is within the audited part of this report.

Notes to the financial statements

Bisichi 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 profit for the financial year, before dividends paid, was £15,415,000 (2021: loss of £203,000).

Details of share capital are set out in note 27 of the Group financial statements and details of the share options are shown in the Directors’ Remuneration Report on page 41 under the heading Share option schemes which is within the audited part of this report and note 35 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 2022	45	104	70	219
Additions	-	-	46	46
Disposals	-	-	(72)	(72)
Cost at 31 December 2022	45	104	44	193
Accumulated depreciation at 1 January 2022	-	56	70	126
Charge for the year	-	27	14	41
Disposals	-	-	(72)	(72)
Accumulated depreciation at 31 December 2022	-	83	12	95
Net book value at 31 December 2022	45	21	32	98
Net book value at 31 December 2021	45	48	-	93

Leasehold property consists of a single unit with a long leasehold tenant. The term remaining on the lease is 37 years. Motor Vehicles comprise wholly of Right of Use leased assets.

36. INVESTMENTS

	Joint ventures shares £’000	Shares in subsidiaries £’000	Other investments £’000	Total £’000
Net book value at 1 January 2022	665	6,356	3,631	9,987
Invested during the year	-	-	9,758	9,758
Repayment	-	-	(1,517)	(1,517)
Gain in investments	-	-	718	718
Net book value at 31 December 2022	665	6,356	12,590	18,946

Investments in subsidiaries are detailed in note 15. In the opinion of the directors the aggregate value of the investment in subsidiaries is not less than the amount shown in these financial statements.

Other investments comprise of £12,590,000 (2021: £3,631,000) shares in listed companies.

Bisichi PLC Financial statements

Notes to the financial statements

37. DEBTORS

	2022 £’000	2021 £’000
Amounts due within one year:
Amounts due from subsidiary undertakings	1,079	2,421
Other debtors	237	94
Joint venture	1,379	1,065
Prepayments and accrued income	59	56
2,754	3,636
Amounts due in more than one year:
Deferred taxation	1,159	220
1,159	220

Amounts due within one year are held at amortised cost. The Group applies a simplified approach to measure the loss allowance for trade receivables using the lifetime expected loss provision. The Group applies a general approach on all other receivables. The general approach recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition. The company has reviewed and assessed the underlying performance and resources of its counterparties including its subsidiary undertakings and joint ventures.

38. CREDITORS

	2022 £’000	2021 £’000
Amounts falling due within one year:
Amounts due to subsidiary undertakings	15	-
Joint venture	120	156
Other taxation and social security	64	64
Other creditors	71	164
Lease Liabilities	11	26
Accruals and deferred income	2,233	44
2,514	454
Amounts falling due in more than one year:
Lease Liabilities	9	20

Lease liabilities comprise of leases on Motor vehicles with remaining leases of 1-3 years. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability.

Bisichi PLC Financial statements

Notes to the financial statements

39. RELATED PARTY TRANSACTIONS

	At 31 December £’000	During the year £’000	Cash paid £’000
Amounts owed by related party		Costs recharges (to)/accrued by related party	(to)/by related party
Related party:
Black Wattle Colliery (Pty) Ltd (note (a))	(145)	(972)	1,464
Ninghi Marketing Limited (note (b))	(102)	-	-
As at 31 December 2022	(247)	(972)	1,464
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

(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 £2,051,941 (£2,051,941) (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 2015 a loan was made to one of the directors, Mr A R Heller, for £115,000. Further details on the loan can be found in note 28 of the Group Financial statements. Under FRS 101, the company has taken advantage of the exemption from disclosing transactions with other wholly owned Group companies. Details of other related party transactions are given in note 28 of the Group Financial statements.

40. EMPLOYEES

	2022 £’000	2021 £’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	3,264	1,426
Social security costs	580	189
Pension costs	21	31
Share based payments	2,220	-
	6,085	1,646

www.bisichi.co.uk Bisichi PLC

End of Report.

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