Results for the year ended
Summary:
Reported EBITDA: £3.4million (2022: £40.0million) Adjusted EBITDA: £2.6million (2022: £39.4million) Profit before tax £0.6million (2022: £38.0million) Earnings per share 2.43p (2022: 164.96p)
-- The decrease in group earnings for the year mainly attributed to lower
export sales, due to the performance of Transnet , the South African
state rail provider and lower coal prices achievable by Sisonke Coal
Processing, the Group’s South African coal processing operation.
-- Earnings were further impacted by difficult mining conditions and low
mining production at Black Wattle Colliery, the Group’s coal mining
asset.
-- Lower cost mining area opened in the second quarter of 2023 at Black
Wattle Colliery resulting in a significant improvement in coal
production and lower mining costs.
-- Directors propose a total year-end dividend per share of 4p (2022: 12p).
This takes the total dividends per share for the year to 7p (2022: 22p).
Executive Chairman,
“2023 was a challenging year for your company and its South African operations. However, looking forward, we continue to see the benefits, both in terms of mining cost and production, from the new mining area opened at Black Wattle. In addition, we have seen a stabilisation of coal prices in our markets and an improved performance from
For further information, please call:
Annual Report 2023
A TRIBUTE TO
Director 2001-2024
It was with great sadness that the Board of
Christopher was a director of
Christopher attended
Strategic report
The Directors present the Strategic Report of the company for the year ending
Strategic report
Chairman’s Statement
For the year ended
2023 was a challenging year for your company and its South African operations. The lower earnings for the Group, compared to 2022, are mainly attributable to lower export sales, due to the performance of
During 2022, the Group benefited from significantly higher prices of Free on Board (FOB) coal from
At Black Wattle, difficult mining conditions impacted profitability during the period. For the majority of 2023, geological issues reduced the production from our opencast mining area as well as increasing related mining and blasting costs. In order to mitigate these issues, the mine opened a lower cost second mining area in the third quarter of 2023. Since the commencement of this new mining area, we have seen a significant improvement in mining production and lower operating costs and we expect the improved performance at Black Wattle to continue throughout 2024.
The low coal production levels at Black Wattle in 2023 had a knock-on effect on overall levels of coal processed at Sisonke Coal Processing. The Group sold 1.031million metric tonnes during the year compared to 1.287million metric tonnes in 2022. The decrease in the Group’s mining revenue during the period to £49.3million (2022: £95.1million) can mainly be attributable to the lower prices achievable for our coal and the lower overall quantity of coal sold, particularly into the export market.
Looking forward into 2024, we will continue to see the benefits, both in terms of mining cost and production, from the new mining area at Black Wattle. In addition, we have seen a stabilisation in coal prices in both the export and domestic market and an improved performance by
The Group recognises the need for, and is committed to, the diversification of its future business activities. The Group is continually looking at alternative mining, commodity and renewable energy related opportunities, as well as new opportunities to add to our existing
During the period the Group’s total non-current and current listed equity related investments held at fair value through profit and loss increased to £15.0million (2022: £13.5million). The Group achieved dividend income from investments during the period of £0.56million (2022: £0.59million) and a gain in value from investments of £0.8million (2022: £1.0million). The Group’s listed equity related investment portfolios comprise primarily of listed equities and listed equity related funds involved or invested in extractive and energy related business activities, including entities involved in the extraction of commodities needed for the clean energy transition.
In the
Finally, in light of the challenging year, your directors propose a final year-end dividend of 4p (2022: 12p) per share. The final dividend proposed will be payable on Friday
On behalf of the Board and shareholders, I would like to thank all of our staff for their hard work and dedication during the course of the year.
Executive Chairman & Managing Director
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
1 Acquisition & investment
The Group continues to oversee responsibly its existing mining and processing operations in
In addition, we seek to balance the high risk of our mining operations with a dependable cash flow from our
2 Production & sustainability
The Group strives to mine its remaining South African coal reserves in an economical and sustainable manner that delivers value to all our stakeholders.
3 Processing & marketing
The Group seeks to achieve value from its South African coal processing infrastructure through the washing, transportation and marketing of coal into both the domestic and export markets.
Strategic Report
Mining review
2023 was a difficult year in terms of performance for our South African coal mining and processing operations. A lack of rail capacity for export and lower international coal prices significantly impacted the profitability of the Group. With more stability in the coal market going into 2024, management will be focussing on improving production levels and keeping operating costs low.
Production and operations
Geological issues in areas mined at Black Wattle, our South African mining operation, had a significant impact on production, particularly in the first half of 2023. The geological issues related to both the coal seams mined and the overburden removed. This, in turn, impacted the rate of extraction and overall cost per tonne of coal mined. In the third quarter of 2023, management took the decision to transition both our mining contractors to a new mining area. After overcoming temporary water issues in the last quarter of 2023, mining of this new area has steadily progressed going into 2024. Overall, the mine achieved production of 807,000 metric tonnes (2022: 824,000 metric tonnes) during the year. In 2024 to date, we have seen a significant improvement in mining production and lower operating costs compared to the previous mining area. We expect the improved performance at Black Wattle to continue throughout 2024.
We continue to work closely with Vunani Mining, our BEE partner in Black Wattle and Sisonke Coal processing, to ensure that we are responsible stewards of our legacy coal operations, which have a life of mine of six years, taking into account the climate related risks outlined in our climate report on page 11 and the impact these risks may have on all our stakeholders.
Main trends/markets
The stabilisation of global energy markets in 2023, compared to 2022, had a significant impact on prices achievable for our coal over the year. In the international market the average weekly price of Free On Board (FOB) Coal from
The lower prices, offsetting a stronger US Dollar compared to the South African Rand, resulted in the Group achieving an average Rand price of R1,357 per tonne of export coal sold from the mine in 2023, compared to R3,770 in 2022. The Group’s export sales are via
In light of the export constraints, the Group supplied a higher proportion of coal into the South African domestic market in 2023, compared to 2022, at prices that were significantly lower than the export price achievable by rail through
In 2023, the Group achieved an average overall Rand price per tonne of coal sold of R992 compared to R1,384 in 2022. The decrease in Group revenue in 2023 can mainly be attributed to the lower export coal prices achieved and lower volumes of coal sold, particularly into the export market. Further details on the financial performance of the Group’s mining segment can be found in the Financial & performance review on page 24 of this report.
Looking forward to 2024, we have seen coal prices remain stable in both our markets and we remain optimistic about a continued improvement in the provision of coal export rail capacity by
Sustainable development
The Group’s South African operations continue to strive to conduct business in a safe, environmentally and socially responsible manner. Some highlights of our Health, Safety and Environment performance in 2023:
-- The Group’s South African operations recorded 2 Lost time Injuries
during 2023 (2022: Two).
-- One case of Occupational Diseases was recorded.
-- One claim for the Compensation for Occupational Diseases was submitted.
In
Prospects
Management would like to thank all our South African employees and stakeholders for their significant contribution to the Group’s performance in 2023. Going forward, your management are optimistic that 2024 will be a successful year for our South African operations.
Strategic Report
Sustainable development
The Group is fully committed to ensuring the sustainability of both our
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
Health, Safety & Environment (HSE)
The Group is committed to creating a safe and healthy working environment for its employees and the health and safety of our employees is of the utmost importance.
HSE performance in 2023:
-- One case of Occupational Diseases was recorded.
-- One claim for the Compensation for Occupational Diseases was submitted.
-- No machines operating at Black Wattle exceeded the regulatory noise
level.
-- The Group’s South African operations recorded 2 Lost Time Injuries
during 2023.
In addition to the required personnel appointments and assignment of direct health and safety responsibilities on the mine, a system of Hazard Identification and Risk Assessments has been designed, implemented and maintained at Black Wattle and at Sisonke Coal Processing. Health and Safety training is conducted on an ongoing basis. We are pleased to report all relevant employees to date have received training in hazard identification and risk assessment in their work areas.
A medical surveillance system is also in place which provides management with information used in determining measures to eliminate, control and minimise employee health risks and hazards and all occupational health hazards are monitored on an ongoing basis.
Various systems to enhance the current HSE strategy have been introduced as follows:
-- In order to improve hazard identification before the commencing of
tasks, mini risk assessment booklets have been distributed to all mine
employees and long term contractors on the mine.
-- Dover testing is conducted for all operators. Dover testing is a risk
detection and accident reduction tool which identifies employees’
problematic areas in their fundamental skills in order to receive
appropriate training.
-- A Job Safety Analysis form is utilised to ensure effective
identification of hazards in the workplace.
-- In order to capture and record investigation findings from incidents, an
incident recording sheet is utilised by line management and contractors.
-- Black Wattle Colliery utilises ICAM (Incident Cause Analysis Method).
-- On-going training on first aid is being conducted with all employees
involved with this discipline.
Looking forward into 2024, Black Wattle intends to enhance the safety of our employees and contractors onsite through the sourcing and procurement of a Proximity Detection System (“PDS”) solution for the mine. The PDS solution comprises a sensing device that detects the presence of another person, vehicle or object and a sophisticated interface that provides an audible and visual alarm. These systems warn both the vehicle operator and the pedestrian of the imminent danger of a potential collision.
The Group continues to monitor and adhere to all of the South African government’s guidelines and regulations including all updates and advice from the
Black Wattle Colliery Social and Labour Plan (SLP) and Community Projects
Black Wattle Colliery is committed to true transformation and empowerment as well as poverty eradication within the surrounding and labour providing communities.
Black Wattle is committed to providing opportunities for the sustainable socio-economic development of its stakeholders, such as:
-- Employees and their families, through Skills Development , Education
Development , Human Resource Development , Empowerment and Progression
Programmes.
-- Surrounding and labour sending communities, through Local Economic
Development, Rural and Community Development , Enterprise Development and
Procurement Programmes.
-- Empowering partners, through Broad-Based Black Economic Empowerment
(BBBEE) and Joint Ventures with Historically Disadvantaged South African
(HDSA) new mining entrants and enterprises.
-- The company engages in on going consultation with its stakeholders to
develop strong company-employee relationships, strong company-community
relationships and strong company-HDSA enterprise relationships.
The key focus areas in terms of the detailed SLP programmes were updated as follows:
-- Implementation of new action plans, projects, targets and budgets were
established through regular workshops with all stakeholders.
-- A comprehensive desktop socio-economic assessment was undertaken on
baseline data of the Steve Tshwete Local Municipality (STLM) and
Nkangala District Municipality (NDM).
-- Through engagements with the Department of Education and STLM regarding
the Local Economic Development projects for the current SLP year cycle
(2022-2026). The department endorsed the Khulunolwazi School Project in
late 2023. The project is currently in a planning phase for the
implementation of the project in various phases. At present, drawing
plans for the school are being finalised, which requires approval from
the local municipality.
Black Wattle has implemented various community initiatives including:
-- A community training environmental project, where local community
members are trained to safely cut and remove non-indigenous vegetation.
Thereafter the vegetation is utilised in the making, bagging and sales
of charcoal.
-- A waste management project at Uitkyk community, nearby to Black Wattle,
involving the collection and recycling of waste from their community.
-- Certain community members have been identified for training in areas
regarding mining and beneficiation. These areas include but are not
limited to:
o conveyor maintenance;
o operation of mining machinery;
o training in environmental waste management;
o drivers licenses; and
o security officer training
-- One HDSA female completed her University studies in the 2023 academic
year.
-- Various upgrades were initiated at the Evergreen School nearby to Black
Wattle.
Black Wattle continues to support Care for Wild, a globally recognized local conservation organization dedicated to preserving endangered species and safeguarding the precious biodiversity of our planet. As the largest orphaned rhino sanctuary in the world, Care for Wild specialise in the rescue, rehabilitation, rewilding, and protection of orphaned and injured rhinos. However, their mission extends far beyond rhinos alone, they are deeply committed to the preservation of endangered species that play vital roles in their ecosystems and the conservation of biodiversity.
The Group recognizes the critical importance of this goal in safeguarding biodiversity and aspire to play a significant role in its realization through our sponsorship of three Rhinos as well as various related community gardening initiatives at the sanctuary.
Environment & environment management programme
Under the terms of the mine’s Environmental Management Programme approved by the
Black Wattle is fully compliant with the regulatory requirements of the
Black Wattle Colliery has substantially improved its water management by erecting and upgrading all its pollution control dams in consultation with the
A performance assessment audit was conducted to verify compliance to our Environmental Management Programme and no significant deviations were found.
The Group’s
Procurement
In compliance with the Mining Charter and the Mineral and Petroleum Resource Development Act, the Group’s South African operations has implemented a BBBEE-focussed procurement policy which strongly encourages our suppliers to establish and maintain BBBEE credentials. We are very pleased to report that Black Wattle has a achieved a level 3 BBBEE certificate for 2024. At present, 88 percent of the companies utilised by Black Wattle for equipment and services are BBBEE companies.
In
-- 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
Number of Number of Number in Percentage of
board Percentage of senior executive Executive
members the board positions on management management
the board
Men 7 100% 2 3 100%
Women 0 0% 0 0 0%
Not
specified/prefer 0 0% 0 0 0%
not to say
Number Number of Percentage
of Percentage senior Number in of
board of the positions executive Executive
members board on the management management
board
White British or other White
(including minority white 6 86% 2 3 100%
groups)
Mixed/Multiple Ethnic Groups 0 0% 0 0 0%
Asian/Asian British 1 14% 0 0 0%
Black/African/Caribbean/Black 0 0% 0 0 0%
British
Other ethnic group, including 0 0% 0 0 0%
Arab
The above data has been collected through self-reporting by the Board members. Questions asked include gender identity or sex and ethnic background.
The Company notes the diversity targets included in the Listing Rules, being:
-- at least 40% of the individuals on the Board are women;
-- at least one of the specified senior positions is held by a woman; and
-- at least one individual on the Board is from a minority ethnic
background.
At
Given the Company’s current organizational structure and limited headcount in the
The Company will keep the requirement for a formal diversity policy under review and will give serious consideration to the adoption of a policy, tailored to the nature of the Company’s business, its operations and resources at the appropriate point.
The Group’s South African operations are committed to achieving the goals of the South African Employment Equity Act and is pleased to report the following:
-- Black Wattle Colliery has exceeded the 10 percent women in management
and core mining target.
-- Black Wattle Colliery has achieved over 15 percent women in core mining.
-- 95 percent of the women at Black Wattle Colliery are HDSA females.
In terms of directors, employees and gender representation, at the year end the Group had 9 directors (8 male and 2 from a minority ethnic or HDSA Background, 1 female from a minority ethnic or HDSA Background), 5 senior managers (5 male and 2 from a minority ethnic or HDSA Background) and 212 other employees (143 male and 118 from a minority ethnic or HDSA Background, 69 female and 66 from a minority ethnic or HDSA Background).
Black Wattle Colliery has successfully submitted their annual Employment Equity Report to the
-- One employee was trained in ABET (Adult Basic Educational Training) on
various levels;
-- An additional eight disabled HDSA women continued their training on ABET
levels one to four;
-- Four HDSA persons were enrolled for apprenticeships in 2023 categorised
as follows:
o One HDSA female employee;
o Two HDSA females from the local community; and
o One HDSA male from the local community.
-- Two HDSA persons continued their internships in 2023; these are
categorised as follows:
o One HDSA female from the local community continued her studies in
Safety Management.
o One HDSA female from the local community continued her studies as a
Safety Officer (COMSOQ1).
Further to the above, we confirm that one HDSA Female completed her bursary studies in 2023, while two HDSA females continued their bursary studies in 2023.
Highlights for 2023 for Sisonke Coal Processing:
-- One employee was trained in ABET (Adult Basic Educational Training) on
various levels
Employment terms and conditions for our employees based at our
Anti-slavery and human trafficking
The Group is committed to the prevention of the use of forced labour and has a zero tolerance policy for human trafficking and slavery. The Group’s policies and initiatives in this area can be found within the Group’s Anti-slavery and human trafficking statement found on the Group’s website at www.bisichi.co.uk.
Climate Change reporting
The Group recognises that climate change represents one of the most significant challenges facing the world today and supports the goals of the Paris Agreement and the
Our aim is to:
-- minimize our contribution to greenhouse gas emissions;
-- to consider and plan for the physical and transitional risks of climate
change on our operations; and
-- to work with stakeholders, including local government and communities,
to mitigate the impact of climate-related challenges.
The Group’s primary operations are coal mining and processing in
In the current year, the Group has aligned its climate disclosures in this Strategic Report to the four Task force on Climate-related Financial Disclosures (“TCFD”) recommendations and the 11 recommended disclosures as outlined below. This is the second year the Group has published a report in line with the TCFD Recommendations and the Group has endeavoured to make disclosures consistent with the TCFD recommended disclosures taking into consideration the short to medium term life of its South African coal operation and the size and complexity of the Group as a whole. The Group continues to develop and enhance its infrastructure, strategies, structures, resources and tools to manage the risks and opportunities presented by climate change and to ensure its ongoing climate change reporting disclosure is fully consistent in all areas with the TCFD recommended disclosures.
TCFD Pillar TCFDBisichi PLC Recommended Disclosure The Board has ultimate responsibility for the monitoring and development of the Group’s approach to climate risk and opportunities. In light of the size of the Group, ESG matters are considered as part of the Group’s regular board meetings and at other appropriate points during the year.The Board has developed and implemented a Climate Change Policy and monitor the content, effectiveness and implementation of this Policy on a regular basis.The Group’s Climate Change Policy can be found on the Group’s website at www.bisichi.co.uk. Short, medium and long term strategic decisions, including those on capital allocation and portfolio management, are Board’s oversight of climate risk considered by Group management who Governance and opportunities. make recommendations to the Board. Climate related issues and policy are included as significant factors for consideration in the decision making process, both in the management recommendation and in the Board’s consideration of the relevant issue. On-going climate related issues are integrated into the Group’s business risk management process and reporting thereof to theBoard and Audit Committee . The Group has regard to best practice in its area of operations, its health and safety and environmental obligations and seeks to ensure high standards of business conduct in its operations. It will review compliance with the TCFD Recommendations on an ongoing basis, and report on its performance on a yearly basis. Responsibility for the application of this Policy rests with, but is not limited to, all employees and contractors engaged in relevant activities under the Group’s operational control. The Group’s managers are responsible for promoting and ensuring compliance with this Policy and any related individual site-level policies and practices. At our South African operations, management have engaged with key stakeholders in order to ensure awareness of our climate change policy as well as Management’s role in assessing the potential impact of climate Governance and managing climate-related change on our environment and risks and opportunities. operations. We continue our collaboration with our contractors on GHG Emission Reporting, and we are actively looking for opportunities to partner with our stakeholders to drive the uptake of carbon neutral solutions.For material strategic or financial decisions, the Group may consider procuring expert advice from third party consultants on the impact in the short, medium and long term of the decision, and ensure that such information is fully considered as part of the evaluation of the relevant matter.
TCFD Pillar TCFDBisichi PLC Recommended Disclosure The Group considers the current life of mine of its South African operations to fall within a short to medium term horizon. Within this horizon, climate change transition risks may impact our South African coal mining and processing operations. Risks include: -- coal price and demand volatility; -- availability and cost of financing and third party services such as insurance; -- delays or restrictions to regulatory approvals; early retirement of our coal processing and mining operations; and -- Carbon pricing and taxes, that may create additional costs through the value chain. The Group have assessed physical climate risk profiles produced by theWorld Bank , particularly in relation to our South African operations. The Group considers the physical risks of variations in climate over the current life of mine of our South African operations to be mainly limited to an increased risk of seasonal flooding that may impact the operating efficiency, costs and revenues of our mining and processing operations.In a longer term horizon, and in a scenario where the useful life of our South African operations is extended, the above short to medium term transitional risks are expected to continue to apply. In addition, in a scenario, such as the International Energy Association’s (“IEA”) Pathway to Net Zero by 2050 (“NZE 2050”), where climate policies are effectively implemented that support a transformation to net zero emissions by 2050 and limiting the rise of global temperatures to 1.5°C by the end of the century, Climate-related risks and policies will lead to significant Strategy opportunities the Group has coal demand decline over the identified over the short, longer term. This in turn will medium, and long run. impact the carrying value and long term viability of our South African coal operations as well as the stakeholders and communities reliant on our operations. Extreme weather events, over the long term inSouth Africa , such as floods, and droughts, as well as changes in rainfall patterns, temperature, and storm frequency will also affect the operating efficiency, costs and revenues of our mining and processing operations, supply chains and impact the communities living close to our operations. Clean coal research and technology initiatives such as carbon capture may result in opportunities to increase the useful life of our South African coal mining and processing operations. In addition, the clean energy transition provides opportunities for the Group to diversify its business activities and equity investment portfolio into renewable and extractive industries that will benefit from and are critical to the transition to a clean energy system The main sources of scope 1 & 2Green House Gas (GHG) emissions for the Group have been associated with our South African coal mining and processing operations, namely due to fuel combustion and electricity usage. Improvements in the cost competitiveness of lower emission sources of energy provide opportunities to lower overall operating costs at our operations as well as reduce overall GHG Emissions. In theUK we have identified the following material physical and transitional risks related to ourUK Retail portfolio: -- Long term physical risk through changes in climate, flood risk and extreme weather; and -- Short-term transition risk from emerging regulation related to energy performance (“EPC”) and enhanced disclosures.
TCFD Pillar TCFD Bisichi PLC
Recommended Disclosure
Management have incorporated and
regularly review the following
strategies and procedures in
relation to it South African coal
operations:
-- Review of the impact of
climate change and the
global transition to clean
energy, particularly in
relation to the current
life of mine of the
Group’s coal operations;
-- Regular research and
analysis of the coal
market demand outlook;
-- Regular research and
analysis on the outlook of
the South African coal
mining industry and
climate change regulation
including mining
regulation, energy
procurement and licensing,
and carbon taxing;
-- Regular communication with
financial service
providers and suppliers on
any future changes to
availability and cost of
services;
-- Regular research and
analysis on the progress
of clean coal technology
and related regulatory
initiatives; and
-- Regular dialogue and
seeking collaboration with
governments and local
communities and other
stakeholders on climate
change-related challenges.
The Board has identified the need
to mitigate GHG emission heavy
sources of electricity usage at
our coal washing plant. Management
continue to evaluate opportunities
to reduce these emissions taking
into particular consideration the
financial viability and long term
sustainability of the projects.
The Board has identified the need
to mitigate GHG emission in its
mining process and rehabilitation
activities at Black Wattle. The
below areas have been identified
where GHG emissions can be further
reduced through:
-- Minimising land clearance
for new project
facilities;
-- Adoption of mitigation
strategies for preserving
integrity of environment;
-- Minimising tree felling;
-- The use of modern, energy
and fuel efficient
equipment;
-- The inclusion of the
impact of GHG emissions as
an evaluation criteria in
the selection of mining
contractors, suppliers and
equipment. Particular
consideration will be
given to the choice of
vehicles used for the mine
fleet, employee
transportation and the
haulage fleet. Where
possible energy and fuel
efficiency will be a
factor in the selection of
vehicles as this will not
only reduce GHG emissions
but also reduce operating
costs. In addition to the
efficiency of the fleet
itself, opportunities will
be sought for improving
the use of the vehicles.
-- Scheduling of excavation
and haulage activities to
optimise activities and
avoid double handling,
Impact of climate-related risks where this is
Strategy and opportunities on businesses, operationally practical;
strategy, and financial planning. and
-- The upgrading of
energy-intensive machinery
over time will be used to
improve efficiency and
reduce CO2 emissions
compared to machinery that
has been removed.
In addition to the above, Black
Wattle has been actively engaged
with the Steve Tshwete Local
Municipality (“STLM”) to mitigate
GHG emissions in its
rehabilitation activities by
finding alternative uses for
unrehabilitated mining voids on
the mine. Discussions are
progressing to transfer certain
unrehabilitated mining voids to
STLM in order for the areas to be
developed into a “Waste Eco Park”.
The proposed development will
include the licensing and
development of a proposed landfill
for waste disposal, recycling
facilities, and a general waste
management facility. The proposed
Waste Management Facility will be
a state-of-the-art treatment and
resource beneficiation facility
inclusive of final disposal to
landfill. Further environmental
screening studies are currently
being undertaken by STLM. Any
significant developments will be
reported to shareholders in due
course.Potential water scarcity
has increased management focus on
opportunities to increase the
usage efficiency of our existing
water supply and water recycling
systems. The introduction of a
closed loop filter press system
for coal fines in 2019 and
additional other work concluded or
planned on our water recycling
systems at our coal processing
facility will result in a lowering
of our overall cost of water and
the environmental footprint of our
operations. Increased risks of
flooding have been incorporated at
planning stage in new opencast
mining areas that have been
opened. Transition and physical
risks related to climate change
are regularly discussed at Board
level, particularly those related
to the long term viability of the
Group’s South African coal
operations and the future
allocation of capital. The Board
regularly considers the need for
coal as an energy source both
globally and in South Africa over
the life of mine of our operations
and in its long term planning. The
Board is committed to responsible
stewardship of our legacy South
African coal assets taking into
account the impact climate change
related risks may have on all our
local stakeholders. We recognise
the need to collaborate with
government, employees and
communities, to ensure a just
transition for our stakeholders
through the transition to a low
carbon economy. The Board
regularly evaluates and continues
to seek opportunities to diversify
its business activities and equity
investment portfolio, particularly
into renewable and extractive
industries that predominantly mine
commodities identified by the IEA
as critical in the transition to a
clean energy system. Any
significant developments will be
reported to shareholders in due
course.The Board continue to
monitor and regularly review
adherence by the Group to changes
to UK EPC. The Group have
incorporated the ongoing impact of
EPC regulatory standards into its
decision making process.
TCFD Pillar TCFD Bisichi PLC
Recommended Disclosure
Management have incorporated
climate scenarios into our
strategic operational planning
and review process. We have
assessed the resilience of our
coal operations compared to the
IEA’s NZE2050 Scenario, which
sets out what additional
measures would be required over
the next ten years to put the
world as a whole on track for
net zero emissions by
mid-century. The Scenario
indicates a significant coal
demand decline over the longer
term impacting the potential
commercial longevity of the
Group’s South African
operations. In addition we have
assessed physical climate risk
profiles for our South African
operations obtained via the
World Bank Group’s Climate
Change Knowledge Portal. The
outcomes of scenario testing and
Resilience of strategy, taking physical climate profiling have
into consideration different been incorporated into the long
Strategy climate-related scenarios, term strategic planning and
including a 2°C or lower decision making processes of the
scenario. Group. Over the short to medium
term, considering the potential
impact of transitional climate
risks on the Group’s South
African operations, the Group’s
climate strategy and policy is
regularly scrutinised by senior
management and the Board in
regard to any changes in coal
demand outlook and climate
regulatory policy that may
impact our operations over the
current life of mine. A recent
example being the Just Energy
Transition Investment Plan (“JET
IP”) announced by the South
African Government for
2023-2027. The Board encourages
senior and local management to
assess principal and emerging
climate-related risks on a
regular basis. Risks identified
are to be reported to and
discussed at Board level and
incorporated into the strategy
and planning of the Group.
The Group’s risk management
processes are developed,
implemented and reviewed by the
Board, who retain ultimate
responsibility for them. In
addition to the Group’s
management of its principal
risks and uncertainties, climate
change impacts are mainly
considered from two
environmental perspectives, the
impact of our South African coal
mining and processing operations
on the climate and the effect of
global climate change on our
operations and
stakeholders.Heavy sources of
GHG emissions have been
identified from our annual
Greenhouse Gas emissions
recording and reporting. The
Processes for identifying and Board and Senior management
Risk Management assessing climate related remain in regular communication
risks. with local regulatory bodies,
climate research providers, coal
market analysts, suppliers, and
services providers to ensure
climate related risks and
changes in regulatory policy are
identified and assessed on a
regular basis. Senior and local
management in South Africa are
encouraged by the Board to
identify local climate related
risks and changes in regulatory
policy that may impact our South
African coal operations.
Management continually engage
with governments and local
communities and other
stakeholders on climate
change-related challenges
impacting the local area and the
South African coal industry at
large.
The Board and Senior management
co-ordinate the Group’s analysis
and planning of the effects of
climate change on our business.
The Board regularly discusses
the impact of any risks
identified through the
organisation, particularly in
relation to material matters
that may impact the viability of
the Group’s coal operations. The
Board regularly reviews and
analyses coal market and outlook
research, particularly in
relation to targets set out in
local climate policy such as JET
IP and global climate scenarios
such as NZE 2050. The mitigation
Processes for managing of GHG emissions and
Risk Management climate-related risks. identification of climate
related risks has been
integrated into our corporate
policy, project and procurement
evaluation criteria at our South
African operations to ensure it
is consistently applied and
managed.The Group continuously
monitors and reports key
performance indications relating
to environmental matters,
including the location of CO2
emissions, their levels and
intensity.On an ongoing basis,
the Group assesses the impact of
carbon pricing, climate
regulation and taxation on going
concern assumptions, the Group’s
current and future strategy and
operations.
New or evolving climate change
risks identified by both senior
and local management are to be
reported to and discussed at
Board level and incorporated
Processes for identifying, into the strategy, planning and
assessing, and managing climate policy of the Group.
Risk Management climate-related risks are Where possible, plans to
integrated into the overall mitigate the effect of climate
risk management. change on our operations and our
local communities will be
integrated into the mines
regulatory environmental
management and social and labour
plans.
TCFD Pillar TCFD Bisichi PLC
Recommended Disclosure
A financial segmentation of
the Group’s South African coal
mining and processing assets
that are impacted by the
climate related risks and
opportunities outlined above
can be found on page 80. The
Group recognises that its
ability to reduce overall
carbon emissions is
constrained at present by the
main segment of it business
activities, being coal mining
Metrics used by the Group to and processing in South
assess climate related risks Africa. The Group has,
Metrics and Targets and opportunities in line however, sought to
with its strategy and risk appropriately target its
management process. emission reduction strategy to
the elements of its operations
where a meaningful reduction
in greenhouse gas emissions
can be effected, and this will
be reflected in the targets
set by the Group in due
course.The Group measures and
report our CO2 emissions
across the Group including a
breakdown of UK and South
African coal operations. See
below for disclosure of
emissions during the year.
The Group is committed to
measuring and reporting our
scope 1 and 2 greenhouse gas
emissions, see below for
disclosure of emissions during
the year.Scope 3 emissions are
not currently measured given
the size and life of mine of
Scope 1, Scope 2 and, if the Group’s South African coal
appropriate, Scope 3 operations and the uncertainty
Metrics and Targets greenhouse gas (GHG) and impracticality in
emissions, and the related accurately measuring such
risks. emissions throughout the value
chain. The Group will continue
to assess the above approach
as part of its continued
review of compliance with the
TCFD Recommendations and
taking into account any
material changes in future
business activities.
Over 99% of the Group’s GHG
Emissions relate to our South
African coal operations which
has a current life of mine of
6 years. In the short term,
the Group’s continues to
evaluate areas where GHG
emissions can be further
reduced, particularly scope 2
emissions related to the heavy
sources of electricity usage
at our coal washing plant.
Once the Group has identified
Targets used by the Group to the scope of further potential
Metrics and Targets manage climate-related risks reductions, their time,
and opportunities and capital cost and
performance against targets. practicability of
implementation, short term
targets for the Group will be
reassessed. Over the long
term, as part of the Group’s
business strategy, the Board
continues to evaluate
opportunities to diversify its
business activities. In turn,
targets related to GHG
emissions will be re-evaluated
in line with any future
changes in the Group’s planned
operating activities.
We have reported on all of the emission sources required under the Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations.
The data detailed in these tables represent emissions and energy use for which
Any estimates included in our totals are derived from actual data which have been extrapolated to cover the full reporting periods. Our reporting includes our energy use and emissions associated with our
The Group’s carbon footprint: 2023CO2eTonnes 2022
CO2e Tonnes
Emissions source:
Emissions from the combustion of fuel or the
operation of any facility including fugitive 39,709 39,564
emissions from refrigerants use
Emissions resulting from the purchase of electricity,
heat, steam or cooling by the company for its own use 7,601 12,267
(location based)
Total gross emissions 47,310 51,831
Of which:
UK 1 3
South Africa 47,309 51,828
Intensity:
Tonnes of CO2 per £ sterling of revenue 0.0010 0.0005
Tonnes of CO2 per tonne of coal produced 0.0587 0.0629
kWh kWh
Energy consumption used to calculate above emissions 90,218,230 87,292,816
Of which UK 7,601 12,341
Principal risks & uncertainties
PRINCIPAL RISK PERFORMANCE AND MANAGEMENT OF THE RISK COAL PRICE AND VOLUME RISK The Group is exposed to coal price risk The Group primarily focuses on managing as its future revenues will be derived its underlying production and processing based on contracts or agreements with costs to mitigate coal price volatility physical off-take partners at prices as well as from time to time entering that will be determined by reference to into forward sales contracts with the market prices of coal at delivery goal of preserving future revenue date.The Group’s South African mining streams. The Group has not entered into and coal processing operational any such contracts in 2022 and 2023. The earnings are significantly dependent on Group’s export and domestic sales are movements in both the export and determined based on the ability to domestic coal price. The price of deliver the quality of coal required by export sales is derived from a US each market together with the market Dollar-denominated export coal price factors set out opposite. Volumes of and therefore the price achievable in export sales achieved during the year South African Rands can be influenced were primarily dependent on the Group’s by movements in exchange rates and ability to produce the higher quality of overall global demand and supply. The coal required for export, obtaining volume of export sales achievable can adequate rail capacity and utilising be influenced by rail capacity and allowable export quotas under the export quota constraints at Richards Quattro programme. The volume ofBay Coal Terminal under the Quattro domestic market sales achieved during programme.The domestic market coal the year were primarily dependant on prices are denominated in South African local demand and supply as well as the Rand and are primarily dependant on Group’s ability to produce the overall local demand and supply.In the short quality of coal required. The Group term, disconnections in global energy continues to assess on an ongoing basis markets and global economic volatility its dependence on the above factors and may result in additional price evaluate alternative means to ensure volatility in both the export and coal sales and prices achieved are domestic market due to fluctuations in optimised.The Group assesses on an both demand and supply.Longer term both ongoing basis the impact of volatility the demand and supply of coal in the in global energy markets, economic domestic and global market may be volatility and climate change related negatively impacted by climate related risks may have on the Group’s mining risks such as regulatory changes operations and future investment related to climate change and decisions as outlined in the Group’s governmental CO2 emission commitments. climate change reporting on page 11.MINING RISK This risk is managed by engaging independent geological experts, referred to in the industry as the “Competent As with many mining operations, the Person”, to determine the estimated reserve that is mined has the risk of reserves and their technical and not having the qualities and commercial feasibility for extraction. accessibility expected from geological In addition, management engage Competent and environmental analysis. This can Persons to assist management in the have a negative impact on revenue and production of detailed life of mine earnings as the quality and quantity of plans as well as in the monitoring of coal mined and sold by our mining actual mining results versus expected operations may be lower than expected. performance and management’s response to variances. The Group continued to engage an independent Competent Person in the current year. Refer to page 5 for details of mining performance. CURRENCY RISK Export sales within the Group’s South The Group’s operations are sensitive to African operations are derived from a US currency movements, especially those Dollar-denominated export coal price. A between the South African Rand, US weakening of the US Dollar can have a Dollar and British Pound. These negative impact on the South African movements can have a negative impact on Rand prices achievable for coal sold by the Group’s mining operations revenue the Group’s South African mining as noted above, as well as operational operations. This in turn can have a earnings. The Group is exposed to negative impact on the Group’s mining currency risk in regard to the Sterling operations revenue as well as value of inter-company trading balances operational earnings as the Group’s with its South African operations. It mining operating costs are Rand arises as a result of the retranslation denominated. In order to mitigate this, of Rand denominated inter-company trade the Group may enter into forward sales receivable balances into Sterling that contracts in local currencies with the are held within theUK and which are goal of preserving future revenue payable by South African Rand streams. The Group has not entered into functional currency subsidiaries. The any such contracts in 2023 and 2022. Group is exposed to currency risk in Although it is not the Group’s policy to regard to the retranslation of the obtain forward contracts to mitigate Group’s South African functional foreign exchange risk on inter-company currency net assets to the Sterling trading balances or on the retranslation reporting functional currency of the of the Group’s South African functional Group. A weakening of the South African currency net assets, management Rand against Sterling can have a regularly review the requirement to do negative impact on the financial so in light of any increased risk of position and net asset values reported future volatility.Refer to the by the Group. ‘Financial Review’ for details of significant currency movement impacts in the year.
PRINCIPAL RISK PERFORMANCE AND MANAGEMENT OF THE RISK NEW RESERVES ANDMINING PERMISSIONS The work performed in the acquisition and renewal of mining permits as well as The life of the mine, acquisition of the maintenance of compliance with additional reserves, permissions to permits includes factors such as mine (including ongoing and once-off environmental management, health and permissions) and new mining safety, labour laws and Black opportunities inSouth Africa generally Empowerment legislation (such as the New are contingent on a number of factorsMining Charter ); as failure to maintain outside of the Group’s control such as appropriate controls and compliance may approval by theDepartment of Mineral in turn result in the withdrawal of the Resources and Energy, the Department of necessary permissions to mine. The Water Affairs and Forestry and other management of these regulatory risks and regulatory or state owned entities. In performance in the year is noted in the addition, the Group’s South African Mining Review on page 5 as well as in operations are subject to the theSustainable Development report on governmentMining Charter with the New page 7 and in this section under the Mining Charter which came into force headings environmental risk, health & fromMarch 2020 . Failure to meet safety risk and labour risk. existing targets or further regulatory Additionally, in order to mitigate this changes to the Mining Charter, could risk, the Group strives to provide adversely affect the mine’s ability to adequate resources to this area retain its mining rights in South including the employment of adequateAfrica . personnel and the utilisation of third party consultants competent in regulatory compliance related to mining rights and mining permissions. POWER SUPPLY RISK The current utility provider for power The Group’s mining operations have to supply inSouth Africa is the date not been affected by power cuts. government run Eskom. Eskom continues However the Group manages this risk to undergo capacity problems resulting through regular monitoring of Eskom’s in power cuts and lack of provision of performance and ongoing ability to meet power supply to new projects. Any power power requirements. In addition, the cuts or lack of provision of power Group continues to assess the ability to supply to the Group’s mining operations utilise diesel generators as an may disrupt mining production and alternative means of securing power in impact on earnings. the event of power outages. FLOODING RISK Management monitors water levels on an The Group’s mining operations are ongoing basis and various projects have susceptible to flooding which could been completed, including the disrupt mining production and impact on construction of additional dams, to earnings. minimise the impact of this risk as far as possible. ENVIRONMENTAL RISK In line with all South African mining companies, the management of this risk is based on compliance with the Environment Management Plan. In order to ensure compliance, the Group strives to The Group’s South African mining provide adequate resources to this area operations are required to adhere to including the employment of personnel local environmental regulations. Any and the utilisation of third party failure to adhere to local consultants competent in regulatory environmental regulations, could compliance related to environmental adversely affect the mine’s ability to management. To date, Black Wattle is mine under its mining right in South fully compliant with the regulatoryAfrica . requirements of theDepartment of Water Affairs and Forestry and has an approved water use licence. Further details of the Group’s Environment Management Programme are disclosed in the Sustainable development report on page 7. HEALTH & SAFETY RISK The Group has a comprehensive Health and Safety programme in place to mitigate this risk. Management strive to create Attached to mining there are inherent an environment where Health and safety health and safety risks. Any such of our employees is of the utmost safety incidents disrupt operations, importance. Our Health & Safety and can slow or even stop production. programme provides clear guidance on the In addition, the Group’s South African standards our mining operation is mining operations are required to expected to achieve. In addition, adhere to local Health and Safety management receive regular updates on regulations. how our mining operations are performing. Further details of the Group’s Health and Safety Programme are disclosed in theSustainable Development report on page 7. CLIMATE CHANGE RISK Transition and physical risks related to Climate change is a material issue that climate change are regularly discussed can affect our South African coal and acted upon at Board and management business through:- changes in carbon levels, particularly those related to pricing, taxes, and coal mining the viability of the Group’s South regulation;- extreme climatic events; - African coal operations and the future access to capital and services and allocation of capital. Further details allocation thereof; and- reduced demand of the Group’s performance and and prices for coal. management of climate change related risk is set out in the Group’s climate change report on page 11. LABOUR RISK In order to mitigate this risk, the Group strives to ensure open and transparent dialogue with employees The Group’s mining operations and coal across all levels. In addition, washing plant facility are labour appropriate channels of communication intensive and unionised. Any labour are provided to all employment unions at disputes, strikes or wage negotiations Black Wattle to ensure effective and may disrupt production and impact early engagement on employment matters, earnings. in particular wage negotiations and disputes. Refer to the ‘Employment & diversity’ section on page 9 for further details.
PRINCIPAL RISK PERFORMANCE AND MANAGEMENT OF THE RISK SOCIO-ECONOMIC, POLITICAL INSTABILITY & REGULATORY ENVIRONMENT RISK The Group is exposed to a wide range of political, economic, regulatory, social and tax environments, particularly inSouth Africa . Regulation applicable to The Group actively engages with resource companies can often be subject governments, regulators and other to adverse and unexpected changes. stakeholders within the countries in Environmental, social, economic and tax which it operates. The Group endeavours regulatory codes can be complex and to operate its businesses according to uncertain in their application. The high legal, ethical, social and human Group may be impacted by adverse rights standards and comply with all actions and decisions by governments applicable environmental, social and tax including operational delays, delays or laws and regulations.The Group’s assets loss of permits or licenses to operate. and investments are diversified across Laws and regulations in the countries various countries which reduces the in which we operate may change or be Group’s exposure to any particular implemented in a manner that may have a country. The Board regularly assesses materially adverse effect on the Group. the political and socio-economic Our operations may also be affected by environment and related risks of the political, economic and unemployment countries it operates and invests in. instability, including terrorism, civil disorder, violent crime, war and social unrest. CASHFLOW RISK In order to mitigate this, we seek to balance the high risk of our mining operations with a dependable cash flow from ourUK property investment operations which are actively managed by Commodity price risk, currency London & Associated Properties PLC and volatility and the uncertainties our equity investment portfolio. Due to inherent in mining may result in the long term nature of the leases, the favourable or unfavourable cashflows. effect on cash flows from property investment activities are expected to remain stable as long as tenants remain in operation. Refer to Financial and Performance review on page 24 for details of the property and investment portfolio performance. PROPERTY VALUATION RISK The Group utilises the services of Fluctuations in property values, which London & Associated Properties PLC whose are reflected in the Consolidated responsibility is to actively manage the Income Statement and Balance Sheet, are portfolio to improve rental income and dependent on an annual valuation of the thus enhance the value of the portfolio Group’s commercial and residential over time. In addition, management development properties. A fall inUK regularly monitor banking covenants and commercial and residential property can other loan agreement obligations as well have a marked effect on the as the performance of our property profitability and the net asset value assets in relation to the overall market of the Group as well as impact on over time. Management continues to covenants and other loan agreement monitor and evaluate the impact of obligations.The economic performance of counter inflationary regulatory measures theUnited Kingdom , including counter and the current economic performance of inflationary regulatory measures, as theUK retail market on the future well as the current economic performance of the Group’s existingUK performance and trends of theUK retail portfolio. In addition, the Group market, may impact the level of rental assesses on an ongoing basis the income, yields and associated property performance of theUK retail market on valuations of the Group’sUK property the Group’s banking covenants, loan assets including its investments in obligations and future investment Joint Ventures. decisions. Refer to page 28 for details of the property portfolio performance.
Strategic Report
Financial & performance review
The movement in the Group’s Adjusted EBITDA from £39.4million in 2022 to £2.6million in 2023 can mainly be attributed to the performance of the Group’s South African operations. Lower volumes of coal sold, lower export coal prices and a lower proportion of sales into the export market at Sisonke Coal Processing had a significant impact on the Group’s revenue in 2023.
EBITDA, adjusted EBITDA and mining production are used as key performance indicators for the Group and its mining activities as the Group has a strategic focus on the long term development of its existing mining reserves and the acquisition of additional mining reserves in order to realise shareholder value. Mining production can be defined as the coal quantity in metric tonnes extracted from our reserves during the period and held by the mine before any processing through the washing plant. Whilst profit/(loss) before tax is considered as one of the key overall performance indicators of the Group, the profitability of the Group and the Group’s mining activities can be impacted by the volatile and capital intensive nature of the mining sector. Accordingly, EBITDA and adjusted EBITDA are primarily used as key performance indicators as they are indicative of the value associated with the Group’s mining assets expected to be realised over the long term life of the Group’s mining reserves. In addition, for the Group’s property investment operations, the net property valuation and net property revenue are utilised as key performance indicators as the Group’s substantial property portfolio reduces the risk profile for shareholders by providing stable cash generative
Key performance indicator
The key performance indicators for the Group are: 2023 2022£’000
£’000
For the Group:
Operating profit before depreciation, fair value adjustments 2,647 39,363
and exchange movements (adjusted EBITDA)
EBITDA 3,354 39,980
Profit before tax 610 38,014
For our property investment operations:
Net property valuation 10,610 10,465
Net property revenue 1,268 1,108
For our mining activities:
Operating profit before depreciation, fair value adjustments 1,380 38,126
and exchange movements (adjusted EBITDA)
EBITDA 1,222 37,856
Tonnes‘000 Tonnes‘000
Mining production 807 824
Quantity of coal sold 1,031 1,287
The key performance indicators of the Group Mining£’000 Property£’000 Other£’000 2023£’000 can be reconciled as follows: Revenue 47,424 1,268 561 49,253 Transport and loading cost (2,812) - - (2,812) Mining and washing costs (35,808) - - (35,808) Other operating costs excluding (7,424) (557) (5) (7,987) depreciation Operating profit before depreciation, fair value 1,380 711 556 2,647 adjustments and exchange movements (adjusted EBITDA) Exchange movements (158) - - (158) Fair value adjustments - 145 - 145 Gains on investments held at fair value through profit and loss - - 759 759 (FVPL) Operating profit excluding 1,222 856 1,315 3,393 depreciation Share of loss in joint venture - (39) - (39) EBITDA 1,222 817 1,315 3,354 Net interest movement (960) (291) - (1,251) Depreciation (1,493) - - (1,493) Profit before tax (1,231) 526 1,315 610
The key performance indicators of the Group Mining£’000 Property£’000 Other£’000 2022£’000 can be reconciled as follows: Revenue 93,413 1,108 590 95,111 Transport and loading cost (5,201) - - (5,201) Mining and washing costs (38,008) - - (38,008) Other operating costs excluding (12,078) (456) (5) (12,539) depreciation Operating profit before depreciation, fair value 38,126 652 585 39,363 adjustments and exchange movements (adjusted EBITDA) Exchange movements (270) - - (270) Fair value adjustments - (60) - (60) Gains on investments held at fair value through profit and loss - - 1,036 1,036 (FVPL) Operating profit excluding 37,856 592 1,621 40,069 depreciation Share of loss in joint venture - (89) - (89) EBITDA 37,856 503 1,621 39,980 Net interest movement (663) (210) - (873) Depreciation (1,093) - - (1,093) Profit before tax 36,100 293 1,621 38,014
Adjusted EBITDA is used as a key indicator of the operating trading performance of the Group and its operating segments representing operating profit before the impact of depreciation, fair value adjustments, gains/(losses) on disposal of other investments and foreign exchange movements. The Group’s operating segments include its South African mining operations and
The Group achieved an EBITDA for the year of £3.4million (2022: £40.0million). The movement compared to the prior year can mainly be attributed to the decreased EBITDA from our mining activities of £1.2million (2022: £37.9million). In addition, the Group’s fair value gain, related to our
The Group reported a profit before tax of £0.6million (2022: £38.0million) for the year resulting in a decrease in taxation for the year to £0.3million (2022: £11.9 million). This resulted in the Group achieving an overall profit for the year after tax of £0.3million (2022: £26.1million), of which £0.26million (2022: £17.6million) was attributable to equity holders of the company.
South African mining operations
Performance
The key performance indicators of the Group’s South African mining operations are presented in South African Rand and
South African Rand UK Sterling
2023R’000 2022R’000 2023£’000 2022£’000
Revenue 1,087,690 1,886,276 47,422 93,413
Transport and loading costs (64,497) (105,023) (2,812) (5,201)
Mining and washing costs (821,307) (767,490) (35,808) (38,008)
Operating profit before other operating 201,886 1,013,763 8,802 50,204
costs and depreciation
Other operating costs (excluding (7,422) (12,078)
depreciation)
Operating profit before depreciation,
fair value adjustments and exchange 1,380 38,126
movements (adjusted EBITDA)
Exchange movements (158) (270)
EBITDA 1,222 37,856
2023‘000 2022‘000
Mining production in tonnes 807 824
2023R 2022R
Net Revenue per tonne of mining production 1,268 2,162
Mining and washing costs per tonne of mining production (1,018) (931)
Operating profit per tonne of mining production before other 250 1,231
operating costs and depreciation
Net Revenue per tonne of mining production can be defined as the revenue price achieved per metric tonne of mining production less transportation and loading costs.
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 2023‘000 Domestic‘000 Export‘000 2022‘000
Quantity of
coal sold in 897 134 1,031 1,025 262 1,287
tonnes
DomesticR’000 ExportR’000 2023R’000 DomesticR’000 ExportR’000 2022R’000
Revenue 843,218 244,472 1,087,690 795,132 1,091,144 1,886,276
R R R R R R
Net
Revenue
per 938 1,357 992 774 3,770 1,384
tonne of
coal
sold
Mining
and
washing
costs (797) (596)
per
tonne of
coal
sold
Operating profit per
tonne of coal sold 196 788
before other operating
costs and depreciation
The quantity of coal sold can be defined as the quantity of coal sold in metric tonnes by the Group in any given period. Net Revenue per tonne of coal sold can be defined as the revenue price achieved less transportation and loading costs per metric tonne of coal sold.
Total net revenue per tonne of coal sold for the Group’s mining and processing operations decreased for the year from R1,384 per tonne of coal sold in 2022 to R992 in 2023, mainly attributable to the average price decreases per tonne in the export market. This offset the average price increases in the domestic market. The average price increases in the domestic market were attributable to an increase in higher quality coal, destined for the export market, being sold domestically due to the lack of export rail capacity available.
A decrease in mining production from Black Wattle and a decrease in buy-in coal processed during the year offset a decrease in coal inventories at the end of the year resulting in the quantity of coal sold for the year decreasing to 1.031million tonnes (2022: 1.287million tonnes).
Overall, revenue from the Group’s South African mining operations decreased during the year to R1.088billion (2022: R1.886billion) mainly due to the lower coal export prices achievable and a decrease in overall coal volumes sold, particularly into the export market due to a lack of available export rail capacity.
Mining and washing costs per tonne of coal sold during the year increased from R596 per tonne in 2022 to R797 per tonne in 2023 mainly due to an increases in mining costs per tonne from Black Wattle as outlined in the Mining Review on page 5. This resulted in an increase in total mining and washing costs for the Group to R821.3million (2022: R767.4million).
Other operating costs (excluding depreciation) of £7.4million (2022: £12.08million) include general administrative costs and administrative salaries and wages related to our South African mining operations that are incurred both in
In summary, the movement in the Group’s Adjusted EBITDA from £39.4million in 2022 to £2.6million in 2023 can mainly be attributed to the performance of the Group’s South African mining and coal processing operations outlined above. A further explanation of the mines operational performance can be found in the Mining Review on page 5.
Performance
The Group’s portfolio is managed actively by London & Associated Properties plc. Rental performance levels improved in 2023. Net property revenue (excluding joint ventures and service charge income) across the portfolio increased during the year to £1.26million (2022: £1.11million). The property portfolio was externally valued at
Joint venture property investments
The Group holds a £0.6million (2022: £0.6million) joint venture investment in
The Group continues to hold a £0.4million (2022: £0.4million) 50% joint venture investment in
The Group continues to hold a one third joint venture investment in
Overall, the Group achieved net property revenue of £1.4million (2022: £1.2million) for the year which includes the company’s share of net property revenue from its investment in joint ventures of £113,000 (2022: £108,000).
Other Investments
During the year the Group’s non-current investments held at fair value through profit and loss increased from £12.6million in 2022 to £14.3million due to net additions during the year of £0.8million (2022: £8.2million) and gains from investments of £0.9million (2022: £0.7million). The investments comprise of £6.8million (2022: £6.8million) of investments listed on stock exchanges in the
Cashflow
The following table
summarises the main Year ended31
components of the December2023£’000 Year ended31 December2022£’000
consolidated cashflow for the
year:
Cash flow generated from
operations before working 2,647 39,768
capital and other items
Cash flow from operating 1,778 30,698
activities
Cash flow from investing (6,701) (16,584)
activities
Cash flow from financing (2,874) (7,206)
activities
Net (decrease) / increase in (7,797) 6,908
cash and cash equivalents
Cash and cash equivalents at 7,365 482
1 January
Exchange adjustment 140 (25)
Cash and cash equivalents at (292) 7,365
31 December
Cash and cash equivalents at
31 December comprise:
Cash and cash equivalents as
presented in the balance 3,242 10,590
sheet
Bank overdrafts (secured) (3,534) (3,225)
(292) 7,365
Cash flow generated from operating activities decreased compared to the prior year to £1.8million (2022: £30.7million). This can mainly be attributed to the decrease in operating profit during the year to £1.9million (2022: £39.0million). The decrease in operating profit can mainly be attributed to the weaker overall performance of the Group’s South African coal mining and processing operations.
Investing cashflows primarily reflect the net acquisitions of listed equity investments of £0.8million (2022: £8.1million) and capital expenditure during the year of £5.9million (2022: £8.5million) which can mainly be attributable to mine development costs at Black Wattle. As at year end the Group’s mining reserves, plant and equipment had a carrying value of £18.8million (2022: £16.4 million) with capital expenditure being offset by depreciation of £1.4million (2022: £1.1milion) and exchange translation movements of £2.0million (2022: £0.6million) for the year.
Cash outflows from financing activities includes a net decrease in borrowings of £0.5million (2022: increase £0.5million). In addition, dividends were paid during the year to equity shareholders of £2.3million (2022: £0.6million).
Overall, the Group’s cash and cash equivalents decreased during the year by £7.8million (2022: increase of £6.9million). The Group’s net balance of cash and cash equivalents (including bank overdrafts) at year end was negative £0.3million (2022: £7.4million).
The Group has considerable financial resources available at short notice including cash and cash equivalents (excluding bank overdrafts) of £3.2million (2022: £10.6 million) and listed investments of £15.0million (2022: £13.5million) as at year end. The above financial resources totalling £18.2million (2022: £24.1million).
The net assets of the Group reported as at year end were £33.6million (2022: £35.6million) and total assets at £59.8million (2022: £63.8million).
Liabilities decreased from £28.2million to £26.2million during the year primarily due to an decrease in trade and other payables from £13.3million to £11.6million offsetting an increase in tax payable from £4.3million to £5.2million.
Further details on the Group’s cashflow and financial position are stated in the Consolidated Cashflow Statement on page 69 and the Consolidated Balance Sheet on page 66 and 67.
Loans
The Group has a structured trade finance facility with Absa Bank Limited for R85million held by
The Group holds a 5 year term facility of £3.9m with
Statement regarding Section 172 of the
Section 172 of the
• The likely consequences of any decision in the long term: see Principal activity, strategy & business model on page 4 and Principal Risks and Uncertainties on page 20;
• The interests of the Group’s employees; ethics and compliance; fostering of the Company’s business relationships with suppliers, customers and others; and the impact of the Group’s operations on the community and environment: see Sustainability report on page 7;
• The need to act fairly between members of the Company: see the Corporate Governance section on page 35.
Future prospects
In the first quarter of the 2024, we have seen improved production from Black Wattle, our coal mining operation. In our South African coal markets, coal prices have stabilised and the availability of rail for export has improved for the year to date in comparison to 2023. In light of this, management will be focussing on sustaining production levels, maintaining a diversified sales market and keeping operating costs low.
The Group continues to seek and evaluate opportunities to transition into alternative mining, commodity and renewable energy related opportunities through new commercial arrangements.
In the
To date, the Group’s financial position has remained strong and at present, the Group has adequate financial resources to ensure the Group remains viable for the foreseeable future and that liabilities are met. A full going concern and viability assessment can be found in the Directors report on page 39.
Further information on the outlook of the company can be found in both the Chairman’s Statement on page 2 and the Mining Review on page 5 which form part of the Strategic Report.
Signed on behalf of the Board of Directors
Finance Director
Governance
Management team
* Andrew R Heller MA, ACA
(Chairman & Managing Director)
(Finance Director)
(Director of Mining)
O * John A Sibbald BL
(Non-executive)
(Non-executive)
John A Heller LLB, MBA (Appointed
(Non-executive)
* Member of the nomination committee
O Member of the audit, nomination and remuneration committees.
Other directors and advisors
Secretary and registered office
Garrett Casey CA (SA)
Black Wattle Colliery and Sisonke Coal Processing Directors
Millicent Zvarayi
Company Registration
Company registration No. 00112155 (Incorporated in
Website
Auditor
Principal bankers
Santander UK PLC
Investec PLC
ABSA Bank (SA)
Corporate solicitors
Brandmullers Attorneys, Middelburg
Tugendhaft Wapnick Banchetti and Partners,
Stockbrokers
Registrars and transfer office
LS1 4DL
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
Website:
https://www.linkgroup.eu
Email: shareholderenquiries@linkgroup.co.uk
Company registration number: 341829 (
Governance
Five year summary
2023£’000 2022£’000 2021£’000 2020£’000 2019£’000
Consolidated income statement
items
Revenue 49,253 95,111 50,520 29,805 48,106
Operating profit /(loss) 1,900 38,976 3,403 (4,493) 3,658
Profit/(Loss) before tax 610 38,014 2,501 (5,196) 3,027
Trading profit /(loss) before (255) 37,127 1,559 (3,881) 4,493
tax
Revaluation and impairment 865 887 942 (1,315) (1,466)
profit /(loss) before tax
EBITDA 3,354 39,980 5,849 (2,387) 5,868
Operating profit before
depreciation, fair value 2,647 39,363 5,028 (1,111) 7,457
adjustments and exchange
movements (adjusted EBITDA)
Consolidated balance sheet
items
Investment properties 10,610 10,465 10,525 10,270 11,565
Other non-current investments 15,260 13,631 4,761 3,001 1,629
25,870 24,096 15,286 13,271 13,194
Current Investments held at 734 886 685 833 1,119
fair value
26,604 24,982 15,971 14,104 14,313
Other assets less liabilities 5,386 8,820 1,541 1,969 5,619
less non-controlling interests
Total equity attributable to 31,990 33,802 17,512 16,073 19,932
equity shareholders
Net assets per ordinary share 299.6p 316.6p 164.0p 150,5p 186.7p
(attributable)
Dividend per share 7.00p 22.00p 6.00p 0p 1.00p
Financial calendar
18 June 2024 Annual General Meeting
Late August 2024 Announcement of half-year results to 30 June 2024
Late April 2025 Announcement of results for year ending 31 December 2024
Governance
Directors’ report
The directors submit their report together with the audited financial statements for the year ended
Review of business, future developments and post balance sheet events
The Group continues its mining activities. Income for the year was derived from sales of coal from its South African operations. The Group also has an equity investment portfolio, a property investment portfolio for which it receives rental income and joint venture investments in two
The results for the year and state of affairs of the Group and the company at
The management report referred to in the Director’s responsibilities statement encompasses this Directors’ Report and Strategic Report on pages 2 to 30.
Corporate responsibility
Environment
The environmental considerations of the Group’s South African coal mining operations are covered in the Strategic Report on pages 2 to 30.
The Group’s
The Group seeks to provide those tenants with good quality premises from which they can operate in an efficient and environmentally friendly manner. Wherever possible, improvements, repairs and replacements are made in an environmentally efficient manner and waste recycling arrangements are in place at all the company’s locations.
Climate Change Reporting and Greenhouse Gas Emissions
The Group’s climate change report and details on its greenhouse gas emissions for the year ended
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
Dividend policy
As outlined in the Strategic report on page 3 the directors are proposing the payment of a final dividend of 4p (2022: 4p) and a special dividend of 0p (2022: 8p) per share for 2023. An interim dividend for 2023 of 3p (Interim 2022: 10p) has been paid on
The total dividend per ordinary share for 2023 will therefore be 7p (2022: 22p) per ordinary share.
Investment properties and other properties
The investment property portfolio is stated at its open market value of £10,610,000 at
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.
Following the year under review, the Company made an investment into a fund in which
Directors
The directors of the company for the year were Sir
Mr J Heller was appointed as a non-executive director by the Board on
The directors retiring by rotation are Mr AR Heller, Mr
Mr A R Heller has been an executive director of the company since 1998. He is a Chartered Accountant and has been employed by the Group since 1994 under a contract of employment determinable at three months’ notice. The Board recommends the re-election of Mr AR Heller.
Mr R J Grobler was appointed as
Mr J Wong is a qualified Chartered Accountant and a Chartered Financial Analyst with extensive experience in the insurance and investment management industries. As noted on page 34, Mr J Wong is linked to an investment made by the Company and the Board has put in place certain measures to restrict access to information and exclude Mr J Wong from discussions and voting on matters relating to such investments. As such, the Board considers that Mr J Wong remains independent and, following the steps taken by the Board, can fulfil his duties to the Company notwithstanding his outside interests. The Board recommends the re-election of Mr J Wong.
Other than noted above, no director had any material interest in any contract or arrangement with the company during the year other than as shown in this report.
Directors’ shareholdings
The interests of the directors in the shares of the company, including family and trustee holdings where appropriate, are shown on page 43 of the Annual Remuneration Report.
Substantial interests
The following have advised that they have an interest in 3 per cent. or more of the issued share capital of the company as at
London & Associated Properties PLC – 4,432,618 shares representing 41.6 per cent. of the issued capital (The Heller family is a shareholder of London & Associated Properties PLC).
The Heller Family – 330,117 shares 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 1,916,154 shares representing 17.95 per
Ltd – 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
The Group has purchased directors’ and officers’ insurance during the year. In broad terms, the insurance cover indemnifies individual directors and officers against certain personal legal liability and legal defence costs for claims arising out of actions taken in connection with Group business.
Corporate Governance
The Board acknowledges the importance of good corporate governance. The paragraphs below set out how the company has applied this guidance during the year.
Principles of corporate governance
The Group’s Board appreciates the value of good corporate governance not only in the areas of accountability and risk management, but also as a positive contribution to business prosperity. The Board endeavours to apply corporate governance principles in a sensible and pragmatic fashion having regard to the circumstances of the Group’s business. The key objective is to enhance and protect shareholder value.
Board structure
The Board currently comprises the joint executive chairman and managing director, two other executive directors and four non-executive directors. Their details appear on page 31. The Board is responsible to shareholders for the proper management of the Group. The Directors’ responsibilities statement in respect of the accounts is set out on page 53. The non-executive directors have a particular responsibility to ensure that the strategies proposed by the executive directors are fully considered.
To enable the Board to discharge its duties, all directors have full and timely access to all relevant information and there is a procedure for all directors, in furtherance of their duties, to take independent professional advice, if necessary, at the expense of the Group. The Board has a formal schedule of matters reserved to it and meets bi-monthly.
The Board is responsible for overall Group strategy, approval of major capital expenditure projects and consideration of significant financing matters.
The following Board committees, which have written terms of reference, deal with specific aspects of the Group’s affairs:
-- In 2023, the nomination committee comprised of two non-executive
directors C A Joll (Chairman) (ceased to be a director on 18 April 2024 )
and JA Sibbald as well as the executive chairman. The committee is
responsible for proposing candidates for appointment to the Board,
having regard to the balance and structure of the Board. In appropriate
cases recruitment consultants are used to assist the process. Each
director is subject to re-election at least every three years.
-- The remuneration committee is responsible for making recommendations to
the Board on the company’s framework of executive remuneration and its
cost. The committee determines the contractual terms, remuneration and
other benefits for each of the executive directors, including
performance related bonus schemes, pension rights and compensation
payments. The Board itself determines the remuneration of the
non-executive directors. During 2023, the committee comprised of two
non-executive directors C A Joll (Chairman) ) (ceased to be a director
on 18 April 2024 ) and JA Sibbald. The company’s executive chairman is
normally invited to attend meetings. The report on directors’
remuneration is set out on pages 40 to 49.
-- In 2023, the audit committee comprised of two non-executive directors C
A Joll (Chairman) (ceased to be a director on 18 April 2024 ) and JA
Sibbald. Its prime tasks are to review the scope of external audit, to
receive regular reports from the company’s auditor and to review the
half-yearly and annual accounts before they are presented to the Board,
focusing in particular on accounting policies and areas of management
judgment and estimation. The committee is responsible for monitoring the
controls which are in force to ensure the integrity of the information
reported to the shareholders. The committee acts as a forum for
discussion of internal control issues and contributes to the Board’s
review of the effectiveness of the Group’s internal control and risk
management systems and processes. The committee also considers annually
the need for an internal audit function. It advises the Board on the
appointment of external auditors and on their remuneration for both
audit and non-audit work, and discusses the nature and scope of the
audit with the external auditors. The committee, which meets formally at
least twice a year, provides a forum for reporting by the Group’s
external auditors.
Where such directors were not members of the relevant committee, meetings are also attended, by invitation of the committee, by the Company’s executive chairman and finance director.
The audit committee also undertakes a formal assessment of the auditors’ independence each year which includes:
-- a review of non-audit services provided to the Group and related fees;
-- discussion with the auditors of a written report detailing consideration
of any matters that could affect independence or the perception of
independence;
-- a review of the auditors’ own procedures for ensuring the independence
of the audit firm and partners and staff involved in the audit,
including the regular rotation of the audit partner; and
-- obtaining written confirmation from the auditors that, in their
professional judgement, they are independent.
The audit committee report is set out on page 50 and 51.
Performance evaluation – board, board committees and directors
The performance of the board as a whole and of its committees and the non-executive directors is assessed by the executive chairman and is discussed with the senior independent director. Their recommendations are discussed at the nomination committee prior to proposals for re-election being recommended to the Board. The performance of executive directors is discussed and assessed by the remuneration committee. The senior independent director meets regularly with the executive chairman and both the executive and non-executive directors individually outside of formal meetings. The directors will take outside advice in reviewing performance but have not found this necessary to date.
Independent directors
The senior independent non-executive director during 2023 was
The independent directors regularly meet prior to Board meetings to discuss corporate governance issues.
Internal control
The directors are responsible for the Group’s system of internal control and review of its effectiveness annually. The Board has designed the Group’s system of internal control in order to provide the directors with reasonable assurance that its assets are safeguarded, that transactions are authorised and properly recorded and that material errors and irregularities are either prevented or would be detected within a timely period. However, no system of internal control can eliminate the risk of failure to achieve business objectives or provide absolute assurance against material misstatement or loss.
The key elements of the control system in operation are:
-- the Board meets regularly with a formal schedule of matters reserved to
it for decision and has put in place an organisational structure with
clearly defined lines of responsibility and with appropriate delegation
of authority;
-- there are established procedures for planning, approval and monitoring
of capital expenditure and information systems for monitoring the
Group’s financial performance against approved budgets and forecasts;
-- UK property and financial operations are closely monitored by members of
the Board and senior managers to enable them to assess risk and address
the adequacy of measures in place for its monitoring and control. The
South African operations are closely supervised by the UK based
executives through daily, weekly and monthly reports from the directors
and senior officers in South Africa . This is supplemented by regular
visits by the UK based finance director to the South African operations
which include checking the integrity of information supplied to the UK ;
and
-- as required by the Disclosure Guidance and Transparency Rules, the
Company has in place systems and controls to identify and classify
related party transactions and to ensure the Company complies with its
obligations in relation to such transactions.
The directors are guided by the internal control guidance for directors issued by the
Board and board committee meetings
The number of meetings during 2023 and attendance at regular Board meetings and Board committees was as follows:
Meetings Meetings Attended
held
Sir Michael Heller (ceased BoardNomination
to be a director on 30 committeeAudit committee 1-1 ---
January 2023)
A R Heller BoardAudit committee 52 52
G J Casey BoardAudit committee 52 52
R J Grobler Board 5 1
Board Audit
C A Joll (ceased to be a committeeNomination 5211 3111
director on 18 April 2024 ) committeeRemuneration
committee
BoardAudit
J A Sibbald committeeNomination 5211 4211
committeeRemuneration
committee
J Wong Board 5 4
J A Heller (appointed 29 Board 3 3
March 2023)
There were no significant issues identified during the year ended
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
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
Annual General Meeting
The annual general meeting of the company The annual general meeting of the company (“Annual General Meeting”) will be held at
The directors consider that all of the resolutions to be put to the meeting are in the best interests of the company and its shareholders as a whole. The Board recommends that shareholders vote in favour of all resolutions.
Please note that the following paragraph is a summary of resolution 9 to be proposed at the Annual General Meeting and not the full text of the resolution. You should therefore read this section in conjunction with the full text of the resolutions contained in the notice of Annual General Meeting.
Directors’ authority to allot shares (Resolution 9)
In certain circumstances it is important for the company to be able to allot shares up to a maximum amount without needing to seek shareholder approval every time an allotment is required. Paragraph 9.1.1 of resolution 9 would give the directors the authority to allot shares in the company and grant rights to subscribe for, or convert any security into, shares in the company up to an aggregate nominal value of £355,894. This represents approximately 1/3 (one third) of the ordinary share capital of the company in issue (excluding treasury shares) at
Therefore, the maximum nominal value of shares or rights to subscribe for, or convert any security into, shares which may be allotted or granted under resolution 9 is £711,788. Resolution 9 complies with guidance issued by the
The authority granted by resolution 9 will expire on
Donations
No political donations were made during the year (2022: £nil).
Going concern
The Group’s business activities, together with the factors likely to affect its future development are set out in the Chairman’s Statement on the preceding page 2, the Mining Review on pages 5 to 6 and its financial position is set out on page 24 of the Strategic Report. In addition Note 22 to the financial statements includes the Group’s treasury policy, interest rate risk, liquidity risk, foreign exchange risks and credit risk.
In
Significant investments have been made in opening new mining areas at
In the
The Group holds a 5 year term facility of £3.9m with
Detailed budget and cash flow forecasts for the Group’s operations demonstrated that the Group has sufficient resources to meet its liabilities as they fall due for at least the next 12 months from the approval date of these financial statements. As a result of the banking facilities held as well as the acceptable levels of cash expected to be held by the Group over the next 12 months, the Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and that the Group is well placed to manage its business risks. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
By order of the board
G.J Casey
Secretary
12 Little Portland Street
Governance
Statement of the Chairman of the remuneration committee
The remuneration committee presents its report for the year ended
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
The second part is the Remuneration Policy which details the remuneration policy for Directors, and can be found at www.bisichi.co.uk. The current remuneration policy was subject to a binding vote which was approved by shareholders at the AGM in June 2023.The approval will continue to apply for a 3 year period commencing from then. The committee reviewed the existing policy and deemed that no changes were necessary to the current arrangements. The remuneration committee considered the overall performance of the group as well as of each director in the year ended
Both of the above reports have been prepared in accordance with The Large & Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013.
The company’s auditors,
Chairman – remuneration committee
Governance
Annual remuneration report
The following information has been audited:
Single total figure of remuneration for the year ended
Long Term Notional
Salaries Benefits Bonuses Incentive Pension Value of TotalFixed TotalVariable
and Fees £’000 £’000 Awards £’000 Vesting Total2023£’000 Remuneration£’000 Remuneration£’000
£’000 £’000 Share
Options
Executive
Directors
Sir
Michael
Heller
(ceased to
be a 17 - - - - - 17 17 -
director
on 30
January
2023)
A R Heller 850 49 - - 85 - 984 984 -
G J Casey 300 17 75 - 30 - 422 347 75
R Grobler 203 16 - - 18 - 237 237 -
Non–Executive Directors
C A Joll* 80 21 - - - - 101 101 -
J A 3 3 - - - - 6 6 -
Sibbald*
J Wong 85 - - - - - 85 85 -
J Heller
(appointed
on 29 - 9 - - - - 9 9 -
March
2023)
Total 1,538 115 75 - 133 - 1,861 1,786 75
*Members of the remuneration committee for the year ended
A R Heller has an entitlement to an employer pension contribution of £85,000 for 2023. He has elected for this not to be paid at this time.
Single total figure of remuneration for the year ended
Long Term Notional
Salaries Benefits Bonuses Incentive Pension Value of TotalFixed TotalVariable
and Fees £’000 £’000 Awards £’000 Vesting Total2022£’000 Remuneration£’000 Remuneration£’000
£’000 £’000 Share
Options
Executive
Directors
Sir Michael 200 - 580 - - - 780 200 580
Heller
A R Heller 495 42 1,100 - - 273 1,910 537 1,373
G J Casey 194 17 575 - 19 273 1,078 230 848
R Grobler 218 17 356 - 19 - 610 254 356
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 3,157
*Members of the remuneration committee for the year ended
The notional value of vesting share options are based on the value of the share options at grant. The awards are not subject to performance in line with the scheme terms.
Summary of directors’ terms Date of contract Unexpired term Notice
period
Executive directors
A R Heller January 1994 Continuous 3 months
G J Casey June 2010 Continuous 3 months
R J Grobler April 2008 Continuous 3 months
Non-executive directors
C A Joll (ceased to be a director on 18 February 2001 Continuous 3 months
April 2024)
J A Sibbald October 1988 Continuous 3 months
J Wong October 2020 Continuous 3 months
J Heller March 2023 Continuous 3 months
Pension schemes and incentives
Three (2022: Two) directors have benefits under money purchase pension schemes. Contributions in 2023 were £133,410 (2022: £37,869), see table above. Under his contract of employment, A R Heller was entitled to a regular employer contribution (currently £85,000 a year) but has elected to defer the payment into his pension scheme. There are no additional benefits payable to any director in the event of early retirement.
Scheme interests awarded during the year
During the year no share options were granted under share option schemes.
Share option schemes
The company currently has only one Unapproved Share Option Scheme which is not subject to
Number of share options
Options
Option 1 granted/ 31December Exercisable Exercisable
price* January2022 (Surrendered)in 2022 from to
2022
The 2012
Scheme
A R 352.00p - 380,000 380,000 01/09/2022 31/08/2032
Heller
G J Casey 352.00p - 380,000 380,000 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.
Payments to past directors
No payments were made to past directors in the year ended
Payments for loss of office
No payments for loss of office were made in the year ended
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
31.12.2023 1.1.2023 31.12.2023 1.1.2023
Sir Michael Heller (ceased to be a 148,783 148,783 181,334 181,334
director on 30 January 2023 )
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 - - - -
J A Heller (appointed 29 March 2023) - - - -
There are no requirements or guidelines for any director to own shares in the Company.
The following graph illustrates the company’s performance compared with a broad equity market index over a ten year period. Performance is measured by total shareholder return. The directors have chosen the FTSE All Share Mining index as a suitable index for this comparison as it gives an indication of performance against a spread of quoted companies in the same sector.
The middle market price of
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
Managing Director Annual bonus payout Long-term incentive
Year Managing Director Single total against maximum vesting rates
figure of opportunity* % against maximum
remuneration£’000 opportunity*%
2023 A R Heller 850 0% N/A
2022 A R Heller 1,637 74% N/A
2021 A R Heller 929 27% N/A
2020 A R Heller 551 0% N/A
2019 A R Heller 1,035 34% N/A
2018 A R Heller 1,073 34% N/A
2017 A R Heller 898 25% N/A
2016 A R Heller 850 22% N/A
2015 A R Heller 912 22% N/A
2014 A R Heller 862 22% N/A
Percentage change in remuneration and Company performance
The table below represents the change in remuneration of the directors in comparison to company performance:
Employee
remuneration
Executive Non-executive on a
full-time
equivalent
basis:
Sir Michael A R G J R C A J A J J Employees
2023 Heller£’000 Heller£’000 Casey£’000 Grobler£’000 Joll£’000 Sibbald£’000 Wong£’000 Heller£’000 of the
Company 4
Base (92%) 72% 55% (7%) 54% 0% 55% N/A3 (20%)
Salary
Benefits 0% 17% 0% (6%) N/A1 0% 0% N/A3 0%
Bonuses (100%) (100%) (87%) (100%) 0% 0% 0% N/A3 (94%)
2022
Base 141% 0% 5% 6% 30% 0% 10% N/A3 47%
Salary
Benefits 0% 24% 0% 55% 0% 0% 0% N/A3 0%
Bonuses N/A1 175% 188% 102% 0% 0% 0% N/A3 478%
2021
Base 0% 0% 20% 6% 0% 0% 0% N/A3 8%
Salary
Benefits 0% (39%) (10%) 3% 0% 0% 0% N/A3 (26%)
Bonuses 0% N/A1 N/A1 N/A1 0% 0% 0% N/A3 N/A1
2020
Base 0% 0% 3% (7%) 5% 0% N/A2 N/A3 1%
Salary
Benefits 0% 40% 18% (17%) 0% 0% N/A2 N/A3 33%
Bonuses (100%) (100%) (100%) (100%) 0% 0% N/A2 N/A3 (100%)
1
Bonus and benefit changes are disclosed as not applicable if a bonus or benefit was awarded in the current year and no bonus or benefit were awarded to the director in the prior year.
2
Mr J Wong was appointed as a non-executive Director on
3
Mr J Heller was appointed as a non-executive Director on
4
The comparator group chosen is all
Relative importance of spend on pay
The total expenditure of the Group on remuneration to all employees (see Notes 29 and 9 to the financial statements) is shown below:
2023£’000 2022£’000
Employee remuneration 7,270 11,991
Distribution to shareholders (see note below) 747 2,348
The distribution to shareholders in the current year is subject to shareholder approval at next the Annual General Meeting.
Statement of implementation of remuneration policy
The remuneration policy was approved at the AGM on
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
Shareholder voting
At the Annual General Meeting on
% of votes for % of votesagainst No of voteswithheld
Resolution to approve the
Remuneration Report (6 June 75.13% 24.87% -
2023)
Resolution to approve the
Remuneration Policy (6 June 73.18% 26.82% 600,000
2023)
The remuneration committee and directors have considered the percentage of votes against the resolutions to approve the remuneration report and policy. Reasons given by shareholders, as known by the directors, have been the level of remuneration awarded and the general remuneration policy itself. The remuneration committee consider the remuneration policy and performance conditions within remain appropriate and therefore no further action has been taken.
Service contracts
All executive directors have full-time contracts of employment with the company. Non-executive directors have contracts of service. No director has a contract of employment or contract of service with the company, its joint venture or associated companies with a fixed term which exceeds twelve months. Directors notice periods (see page 42 of the annual remuneration report) are set in line with market practice and of a length considered sufficient to ensure an effective handover of duties should a director leave the company.
All directors’ contracts as amended from time to time, have run from the date of appointment. Service contracts are kept at the registered office.
Remuneration policy table
The remuneration policy table below is an extract of the Group’s current remuneration policy on directors’ remuneration, which was approved by a binding vote at the 2023 AGM. The approved policy took effect from 6 June 2023. A copy of the full policy can be found at www.bisichi.co.uk.
Opportunity and
Element Purpose Policy Operation performance
conditions
Executive directors
Considered by No individual
remuneration director will be
committee on awarded a base
To appointment.Set salary in excess
recognise:Skills at a level Reviewed of £1,200,000
Base salary Responsibility considered annually Paid per annum.No
Accountability appropriate to monthly in cash specific
Experience attract, retain performance
Value motivate and conditions are
reward the attached to base
right salaries.
individuals.
Company
contribution
The contribution offered at up to
Company payable by the 10% of base
contribution company is salary as part
To provide offered at up included in the of overall
Pension competitive to 10% of base director’s remuneration
retirement salary as part contract of package.No
benefits of overall employment. Paid specific
remuneration into money performance
package. purchase schemes conditions are
attached to
pension
contributions.
The costs
associated with
benefits offered
are closely
controlled and
reviewed on an
The committee annual basis.No
Contractual retains absolute director will
benefits can discretion to receive benefits
include but are approve changes of a value in
not limited in contractual excess of 30% of
to:Car or car benefits in his base
To provide a allowance exceptional salary.No
Benefits competitive Group health circumstances or specific
benefits cover where factors performance
package Death in outside the conditions are
service cover control of the attached to
Permanent Group lead to contractual
health increased costs benefits.The
insurance (e.g. medical value of
inflation) benefits for
each director
for the year
ended 31
December 2023 is
shown in the
table on page
41.
The current
maximum bonus
opportunity will
not exceed 200%
of base salary
in any one year,
but the
remuneration
committee
reserves the
power to award
up to 300% in an
exceptional
year.There is no
formal framework
by which the
company assesses
performance and
performance
conditions and
measures will be
assessed on an
In assessing annual basis by
the performance the remuneration
of the committee. In
executive team, The remuneration determining the
and in committee level of the
particular to determines the bonus, the
determine level of bonus remuneration
whether bonuses on an annual committee will
To reward and are merited the basis applying take into
Annual Bonus incentivise remuneration such performance account internal
committee takes conditions and and external
into account performance factors and
the overall measures as it circumstances
performance of considers that occur
the business. appropriate during the year
Bonuses are under review.
generally The performance
offered in cash measures applied
may be
financial,
non-financial,
corporate,
divisional or
individual and
in such
proportion as
the remuneration
committee
considers
appropriate to
the prevailing
circumstances.
The company does
not consider,
given the
company’s size,
nature and stage
of operations
that a formal
framework is
required.
Entitlement to
share options is
not subject to
any specific
performance
conditions.Share
options will be
offered by the
remuneration
committee as
appropriate
taking into
account the
factors
considered above
in the decision
making process
in determining
remuneration
policy. The
aggregate number
of shares over
which options
may be granted
under all of the
company’s option
schemes
(including any
options and
awards granted
under the
company’s
employee share
plans) in any
period of ten
years, will not
exceed, at the
time of grant,
10% of the
ordinary share
capital of the
company from
time to time. In
determining the
limits no
account shall be
taken of any
shares where the
right to acquire
the shares has
been released,
surrendered,
lapsed or has
otherwise become
incapable of
exercise.The
company
currently has
one Share Option
To provide Granted under Offered at Scheme (see page
executive existing appropriate 42). For the
Share Options directors with a schemes (see times by the 2012 scheme the
long-term page 42) and remuneration remuneration
interest in the new schemes committee committee has
company the ability to
impose
performance
criteria in
respect of any
new share
options granted,
however there is
no requirement
to do so. There
are no
performance
conditions
attached to the
options already
issued under the
2012 scheme, the
options vest on
issue and there
are no minimum
hold periods for
the resulting
shares issued on
exercise of the
option.The Board
is authorised
under this
policy to enter
into agreements
with holders of
options over
ordinary shares
in the capital
of the Company
to cancel or
surrender the
Options in
consideration of
the payment by
the Company to
the holder of
the Option of
cash up to a
maximum of the
difference
between the
exercise price
of the Option
and the closing
market price on
the business day
immediately
prior to the day
on which the
Company enters
into that
agreement with
the relevant
holder of the
Options.
Non-executive directors
Considered by
the
board on No individual
appointment.Set director will be
at a level awarded a base
To considered salary in excess
recognise:Skills appropriate to Reviewed of £125,000 per
Base salary Experience attract, retain annually annum.No
Value and motivate specific
the individual. performance
Experience and conditions are
time required attached to base
for the role salaries.
are considered
on appointment.
Pension No pension
offered
The costs
associated with
the benefit
The committee offered is
retains the closely
discretion to controlled and
approve changes reviewed on an
No benefits in contractual annual basis.No
offered except benefits in director will
for health exceptional receive benefits
Benefits cover (see circumstances or of a value in
annual where factors excess of 30% of
remuneration outside the his base salary
report control of the or £10,000
page 41) Group lead to whichever is the
increased costs higher.No
(e.g. medical specific
inflation) performance
conditions are
attached to
contractual
benefits.
Non-executive
directors do
Share Options not participate
in the share
option schemes
In order to ensure that shareholders have sufficient clarity over director remuneration levels, the company has, where possible, specified a maximum that may be paid to a director in respect of each component of remuneration. The remuneration committee consider the performance measures outlined in the table above to be appropriate measures of performance and that the KPI’s chosen align the interests of the directors and shareholders. Details of remuneration of other company employees can be found in Note 29 to the financial statements. Any differences in the types of remuneration available for directors and other employees reflect common practice and market norms. The bonus targets for general employees of the Group are more focused on annual targets that further the company’s interests. The maximum bonus opportunity for employees and directors alike is based on the seniority and responsibility of the role undertaken.
Governance
Audit committee report
The committee’s terms of reference have been approved by the board and follow published guidelines, which are available from the company secretary. The audit committee comprised of two non-executive directors during the year,
The Audit Committee’s prime tasks are to:
-- review the scope of external audit, to receive regular reports from the
auditor and to review the half-yearly and annual accounts before they
are presented to the board, focusing in particular on accounting
policies and areas of management judgment and estimation;
-- monitor the controls which are in force to ensure the integrity of the
information reported to the shareholders;
-- assess key risks and to act as a forum for discussion of risk issues and
contribute to the board’s review of the effectiveness of the Group’s
risk management control and processes;
-- act as a forum for discussion of internal control issues and contribute
to the board’s review of the effectiveness of the Group’s internal
control and risk management systems and processes;
-- consider each year the need for an internal audit function;
-- advise the board on the appointment of external auditors and rotation of
the audit partner every five years, and on their remuneration for both
audit and non-audit work, and discuss the nature and scope of their
audit work;
-- participate in the selection of a new external audit partner and agree
the appointment when required;
-- undertake a formal assessment of the auditors’ independence each year
which includes:
o a review of non-audit services provided to the Group and related fees;
o discussion with the auditors of a written report detailing all
relationships with the company and any other parties that could affect
independence or the perception of independence;
o 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
o obtaining written confirmation from the auditors that, in their
professional judgement, they are independent.
Meetings
The committee meets prior to the annual audit with the external auditors to discuss the audit plan and again prior to the publication of the annual results. These meetings are attended by the external audit partner, executive chairman, director of finance and company secretary. Prior to bi-monthly board meetings the members of the committee meet on an informal basis to discuss any relevant matters which may have arisen. Additional formal meetings are held as necessary.
During the past year the committee:
-- met with the external auditors, and discussed their reports to the Audit
Committee;
-- approved the publication of annual and half-year financial results;
-- considered and approved the annual review of internal controls;
-- decided that due to the size and nature of operation there was not a
current need for an internal audit function;
-- agreed the independence of the auditors and approved their fees for both
audit related and non-audit services as set out in note 5 to the
financial statements.
Financial reporting
As part of its role, the Audit Committee assessed the audit findings that were considered most significant to the financial statements, including those areas requiring significant judgment and/or estimation. When assessing the identified financial reporting matters, the committee assessed quantitative materiality primarily by reference to profit before tax. The Board also gave consideration to:
-- the carrying value of the Group’s total assets, given that the Group
operates a principally asset based business;
-- the value of revenues generated by the Group, given the importance of
coal production and processing;
-- Adjusted EBITDA, given that it is a key trading KPI, when determining
quantitative materiality; and
-- Going concern, given the potential impact of macro-economic activity on
the Group’s operations.
The qualitative aspects of any financial reporting matters identified during the audit process were also considered when assessing their materiality. Based on the considerations set out above we have considered quantitative errors individually or in aggregate in excess of approximately £700,000 to £800,000 to be material.
External Auditors
Chairman – audit committee
Governance
Valuers’ certificates
To the directors of
In accordance with your instructions we have carried out a valuation of the freehold property interests held as at
Having regard to the foregoing, we are of the opinion that the open market value as at
£’000
Freehold 8,395
Leasehold 2,215
10,610
Leeds Carter TowlerRegulated by Royal Institute of Chartered Surveyors 31 January 2024
Directors’ responsibilities statement
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors are required to prepare the Group financial statements in accordance with
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
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.
Governance
Independent auditor report to the shareholders of
Opinion
We have audited the financial statements of
In our opinion, the financial statements:
-- the financial statements give a true and fair view of the state of the
Group’s and of the parent company's affairs as at 31 December 2023 and
of the Group’s profit for the year then ended;
-- the group financial statements have been properly prepared in accordance
with UK adopted international accounting standards;
-- the parent company financial statements have been properly prepared in
accordance with United Kingdom Generally Accepted Accounting Practice;
and
-- the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors assessment of the Group and Parent companies ability to continue to adopt the going concern basis of accounting including the following:
-- Gained an understanding of the systems and controls around managements’
going concern assessment, including for the preparation and review
process for forecasts and budgets.
-- Evidence obtained that management have undertaken a formal going concern
assessment, including sensitivity analysis on cash flow forecasts, clear
consideration of significant external factors including the impact of
the war in Ukraine and the potential liquidity impact such factors on
cash balances including available facilities.
-- Analysed the financial strength of the business at the year end date and
considered key trends in balance sheet strength and business performance
over the last three years.
-- Confirmations gained that operation of the business, including mine
production and sale at Black Wattle Colliery have not been disrupted in
the period by any external or internal factors.
-- Testing the mechanical integrity of forecast model by checking the
accuracy and completeness of the model, including challenging the
appropriateness of estimates and assumptions with reference to empirical
data and external evidence.
-- Based on our above assessment we performed our own sensitivity analysis
in respect of the key assumptions underpinning the forecasts.
-- We performed stress-testing analysis on the core cash generating units
of the business to confirm cash inflow levels needed to maintain minimal
liquidity required to meet liabilities as they fall due.
-- We considered post year end performance of the business, comparing this
to budget as well as considering the development of key liquidity ratios
in the business.
-- 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
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
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
-- Directors’ statement with regards to the appropriateness of adopting the
going concern basis of accounting and any material uncertainties
identified set out on page 39;
-- Directors’ explanation as to its assessment of the company’s prospects,
the period this assessment covers and why the period is appropriate set
out on page 33;
-- Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on pages 20 to 23;
-- The section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems set out on
page 36 and
-- The section describing the work of the Risk and Audit Committee set out
on page 35.
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.
Our application of materiality
Group financial statements Parent company financial
statements
Materiality £1,005,000 (2022: £816,700 (2022: £710,000)
£711,200)
Basis for determining ~3% of net assets ~3% of net assets
materiality
The group's principal The company’s principal
activity of that of an activity is that of a
exploration and mining holding company for the
operation and investment group and as such has no
Rationale for benchmark property holdings. To this direct trade. It does hold
applied end the business is highly investments balances with
asset focused. Therefore a subsidiaries. Therefore a
benchmark for materiality benchmark for materiality
based on the net assets of based on the net assets of
the group is considered to the company is considered
be appropriate. to be appropriate.
Performance materiality £703,500 (2022: £533,400) £571,600 (2022: £533,500)
Basis for determining 70% of materiality 70% of materiality
performance materiality
On the basis of our risk On the basis of our risk
assessments, together with assessments, together with
our assessment of the our assessment of the
Group’s overall control company’s overall control
environment and the environment and the company
business being listed on being listed on the LSE,
the LSE, our judgement was our judgement was that
Rationale for performance that performance performance materiality was
materiality applied materiality was 70% of our 70% of our planning
planning materiality. In materiality. In assessing
assessing the appropriate the appropriate level, we
level, we consider the consider the nature, the
nature, the number and number and impact of the
impact of the audit audit differences
differences identified in identified in the previous
the previous year’s audit. year’s audit.
Triviality threshold £50,200 (2022: £35,560) £40,800 (2022: £35,500)
Basis for determining 5% of materiality 5% of materiality
triviality threshold
We reported all audit differences found in excess of our triviality threshold to the directors and the management board.
For each Group company within the scope of our Group audit, we allocated a materiality that is less than our overall Group materiality. The range of materiality allocated across each Group company was between £571,600 and £19,600. The scope of our audit was influenced by our application of materiality as we set certain quantitative thresholds for performance materiality and use these thresholds as a consideration tool to help to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
We determined component materiality for the parent company to be capped at below group materiality. This was also the case for group subsidiaries registered outside of the
Coverage overview
Group revenue Group profit before Group net assets
tax
Totals at 31 December £49,452,801 £610,242 £33,594,091
2023:
Full statutory audit
(Kreston Reeves and £49,452,801 (100%) £595,457 (97.6%) £33,492,433 (99.7%)
BDO)
Limited procedures £Nil £14,785 (2.4%) £101,658 (0.3%)
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group and the parent company, the accounting processes and controls, and the industry in which they operate.
Our scoping considerations for the Group audit were based both on financial information and risk. As noted above limited assurance audit work – which is to say the audit of balances and transactions material at a group level – was only applied in respect of a small element of the group. The below table summarises for the parent company, and its subsidiaries, in terms of the level of assurance gained:
Group component Level of assuranceBisichi PLC Full statutory audit (Kreston Reeves )Mineral Products Limited Full statutory audit (Kreston Reeves )Bisichi (Properties) Limited Full statutory audit (Kreston Reeves )Bisichi Northampton Limited Full statutory audit (Kreston Reeves )Bisichi Mining (Exploration) Limited Full statutory audit (Kreston Reeves ) Black Wattle Colliery (Pty) Limited Full statutory audit (BDO) Sisonke Coal Processing (Pty) Limited Full statutory audit (BDO) All other group undertakings Limited assurance (Kreston Reeves )
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.
Revenue recognition: £49,452,801 (2022: £95,110,894)
How our audit addressed the key
riskSales of coal and coal processing
services in the period were tested from
the trigger point of the sale to the
point of recognition in the financial
statements, corroborating this to
contract sales or service terms and the
recognition stages detailed in IFRS
15.Rental income revenue was
recalculated based on the terms included
Significance and nature of key in signed lease agreements. Again, the
riskRevenue is a key performance recognition stages detailed the relevant
indicator for users in assessing the standards were carefully considered to
group’s financial statements. Revenue ensure revenue recognised was in line
generated has a significant impact on with these. This substantive testing
cash inflows and profit before tax for covered 100% of total property rental
the group. As such revenue is a key revenues.Revenue streams were further
determinant in profitability and the analytically reviewed via comparison to
group’s ability to generate our expectations. Expectations were
cash.Revenue comprises two key revenue based on a combination of prior
streams: the sale of coal and property financial data/budgets and our own
rental income.Coal revenue is assessments based on our knowledge
recognised when the customer has a gained of the business.Cut-off of
legally binding obligation to settle revenue was reviewed by analysing sales
under the terms of the contract.Rental recorded during the period just before
income is recognised in the Group and after the financial year end and
income statement on a straight-line determining if the recognition applied
basis over the term of the lease. was appropriate. Walkthrough testing was
performed to ensure that key systems and
controls in place around the revenue
cycle operated as designed.The accuracy
of revenue disclosures in the accounts
were confirmed to be consistent with the
revenue cycle observed and audited. The
completeness of these disclosures was
confirmed by reference to the full
disclosure requirements as detailed in
IFRS 15.
Key observations communicated to the Risk and Audit CommitteeWe have no concerns
over the material accuracy of revenue recognised in the financial statements.
Valuation/impairment of investment properties: £10,818,441 (2022: £10,635,000)
Significance and nature of key How our audit addressed the key
riskInvestment properties comprise riskAppropriate classification of
freehold and long leasehold land and investment properties under IAS 40 was
buildings. Investment properties are considered, especially in relation to
carried at fair value in accordance long leasehold land and
with IAS 40.Investment properties are buildings.External valuation reports
revalued annually by professional were obtained and vouched to stated fair
external surveyors and included in the values. The competence and independence
balance sheet at their fair value. of the valuation experts was carefully
Gains or losses arising from changes in considered to ensure that the reports
the fair values of assets are they produce can be relied upon. The key
recognised in the consolidated income assumptions made within these reports
statement in the period to which they were reviewed and considered for
relate. In accordance with IAS 40, reasonableness, including rental yield
investment properties are not analysis. We have further performed our
depreciated. The fair value of the head own separate impairment considerations
leases is the net present value of the to consider if events/factors in place
current head rent payable on leasehold at year end present material impairment
properties until the expiry of the indicators.
lease.
Key observations communicated to the Risk and Audit CommitteeWe have no concerns
over the material accuracy of investment property values recognised in the
financial statements.
Valuation/impairment of mining reserves and development: £18,722,439 (2022:
£16,177,515)
How our audit addressed the key riskThe
accounting requirements of IFRS 6 and
IAS 16 were considered to ensure
Significance and nature of key riskThe capitalisation of costs to mine
purpose of mine development is to development under IAS 16 was
establish secure working conditions and appropriate.In considering impairment
infrastructure to allow the safe and indicators, as governed by IAS 36, the
efficient extraction of recoverable life of mine assessment was obtained.
reserves.Depreciation on mine All significant input variables were
development costs is not charged until considered and stress-tested to assess
production commences or the assets are headroom between modelling and the value
put to use. On commencement of full of mine development.Consideration was
commercial production, depreciation is given to the competence and independence
charged over the life of the associated of the technical expert involved with
mine reserves extractable using the the production of historic technical
asset on a unit of production basis. reports on which the life of mine
The unit of production calculation is assessment is partially built.
based on tonnes mined as a ratio to Depreciation of mine development was
proven and probable reserves and also recalculated based on the unit of
includes future forecast capital production basis to ensure accurately
expenditure. The cost recognised recorded. This basis was also considered
includes the recognition of any for reasonableness by reference to the
decommissioning assets related to mine accounting policies of industry
development. peers.The accuracy and appropriateness
of mine development disclosures in the
accounts were confirmed to be consistent
with the mine development accounting
cycle observed and audited.
Key observations communicated to the Risk and Audit CommitteeWe have no concerns
over the material accuracy of mining reserves and development values recognised
in the financial statements.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Our opinion on the Remuneration Report
Our consideration of climate change related risks
The financial impacts on the Group of climate change and the transition to a low carbon economy (“climate change”) were considered in our audit where they have the potential to directly or indirectly impact key judgements and estimates within the financial statements.
The Group continues to develop its assessment of the potential impacts of climate change. Climate risks have the potential to materially impact the key judgements and estimates within the financial report. Our audit considered those risks that could be material to the key judgement and estimates in the assessment of the carrying value of non-current assets and closure and rehabilitation provisions.
The key judgements and estimates included in the financial statements incorporate actions and strategies, to the extent they have been approved and can be reliably estimated in accordance with the Group’s accounting policies. Accordingly, our key audit matters address how we have assessed the Group’s climate related assumptions to the extent they impact each key audit matter. Our audit procedures were performed with the involvement of our climate change and valuation specialists.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
-- the information given in the strategic report and the directors’ report
for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
-- the strategic report and the directors’ report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the Group and parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not
visited by us; or
-- the parent company financial statements are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors’ remuneration specified by law are not
made; or
-- we have not received all the information and explanations we require for
our audit
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement (set out on page 53), the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (
Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the group and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to: posting inappropriate journal entries to increase revenue or reduce expenditure, management bias in accounting estimates and judgemental areas of the financial statements such as the valuation of investment properties. Audit procedures performed by the group engagement team and component auditors included:
-- We obtained an understanding of the legal and regulatory frameworks that
are applicable to the Group and determined that the most significant are
those that relate to the reporting framework and the relevant tax
compliance regulations in the jurisdictions in which Bisichi PLC
operates. In addition, we concluded that there are certain significant
laws and regulations that may have an effect on the determination of the
amounts and disclosures in the financial statements, mainly relating to
health and safety, employee matters, bribery and corruption practices,
environmental and certain aspects of company legislation recognising the
regulated nature of the Group’s mining activities and its legal form.
-- Detailed discussions were held with management to identify any known or
suspected instances of non- compliance with laws and regulations.
-- Identifying and assessing the design effectiveness of controls that
management has in place to prevent and detect fraud.
-- Challenging assumptions and judgements made by management in its
significant accounting estimates, including assessing the capabilities
of the property valuers and discussing with the valuers how their
valuations were calculated and the data and assumptions they have used
to calculate these.
-- Performing analytical procedures to identify any unusual or unexpected
relationships, including related party transactions, that may indicate
risks of material misstatement due to fraud.
-- Confirmation of related parties with management, and review of
transactions throughout the period to identify any previously
undisclosed transactions with related parties outside the normal course
of business.
-- Reading minutes of meetings of those charged with governance and
reviewing correspondence with relevant tax and regulatory authorities.
-- Performing integrity testing to verify the legitimacy of banking records
obtained from management.
-- Review of significant and unusual transactions and evaluation of the
underlying financial rationale supporting the transactions.
-- Identifying and testing journal entries, in particular any manual
entries made at the year end for financial statement preparation.
-- We ensured our global audit team (including Kreston Reeves and BDO) has
deep industry experience through working for many years on relevant
audits, including experience of mining and investment property
management. Our audit planning included considering external market
factors, for example geopolitical risk, the potential impact of climate
change, commodity price risk and major trends in the industry.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
As part of an audit in accordance with ISAs (
-- 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 3 years, covering the years ended 31 December 2021 and 31 December 2023.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and we remain independent of the group and the parent company in conducting our audit.
During the period under review, agreed upon procedures were completed in respect of a number of the group’s service charge accounts.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our Report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
For and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
Date: 23 April 2024
Financial statements
Consolidated income statement
for the year ended 31 December 2023
2023Revaluationsand 2022Revaluations
Notes 2023Trading£’000 impairment£’000 2023Total£’000 2022Trading£’000 and 2022Total£’000
impairment£’000
Group revenue 1 49,253 - 49,253 95,111 - 95,111
Operating costs 3 (46,606) - (46,606) (55,748) - (55,748)
Operating
profit before
depreciation,
fair value 1 2,647 - 2,647 39,363 - 39,363
adjustments and
exchange
movements
Depreciation 1 (1,493) - (1,493) (1,093) - (1,093)
Operating
profit before
fair value 1 1,154 - 1,154 38,270 - 38,270
adjustments and
exchange
movements
Exchange losses (158) - (158) (270) - (270)
Increase/
(Decrease) in
value of 4 - 145 145 - (60) (60)
investment
properties
Gain on
investments - 759 759 - 1,036 1,036
held at fair
value
Operating 1 996 904 1,900 38,000 976 38,976
profit
Share of loss
in joint 14 (31) (8) (39) - (89) (89)
ventures
Profit before
interest and 965 896 1,861 38,000 887 38,887
taxation
Interest 222 - 222 174 - 174
receivable
Interest 7 (1,473) - (1,473) (1,047) - (1,047)
payable
Profit before 5 (286) 896 610 37,127 887 38,014
tax
Taxation 8 (47) (253) (300) (11,878) (30) (11,908)
Profit for the (333) 643 310 25,249 857 26,106
year
Attributable
to:
Equity holders (384) 643 259 16,755 857 17,612
of the company
Non-controlling 27 51 - 51 8,494 - 8,494
interest
Profit for the (333) 643 310 25,249 857 26,106
year
Profit per 10 2.43p 164.96p
share – basic
Profit per 10 2.43p 164.96p
share – diluted
Trading gains and losses reflect all the trading activity on mining and property operations and realised gains. Revaluation gains and losses reflects the revaluation of investment properties and other assets within the Group and any proportion of unrealised gains and losses within Joint Ventures. The total column represents the consolidated income statement presented in accordance with IAS 1.
Financial statements
Consolidated statement of other comprehensive income
for the year ended 31 December 2023
2023£’000 2022£’000
Profit for the year 310 26,106
Other comprehensive income/(expense):
Items that may be subsequently recycled to the income
statement:
Exchange differences on translation of foreign operations (675) (43)
Other comprehensive income for the year net of tax (675) (43)
Total comprehensive income for the year net of tax (365) 26,063
Attributable to:
Equity shareholders (210) 17,593
Non-controlling interest (155) 8,470
(365) 26,063
Financial statements
Consolidated balance sheet
at 31 December 2023
Notes 2023£’000 2022£’000
Assets
Non-current assets
Investment properties 11 10,818 10,635
Mining reserves, plant and equipment 12 18,896 16,377
Investments in joint ventures accounted for using 13 1,002 1,041
equity method
Other investments at fair value through profit and 13 14,258 12,590
loss (“FVPL”)
Deferred tax asset 23 318 -
Total non-current assets 45,292 40,643
Current assets
Inventories 16 2,579 5,199
Trade and other receivables 17 7,934 6,437
Investments in listed securities held at FVPL 18 734 886
Cash and cash equivalents 3,242 10,590
Total current assets 14,489 23,112
Total assets 59,781 63,755
Liabilities
Current liabilities
Borrowings 20 (7,461) (3,795)
Trade and other payables 19 (11,589) (13,282)
Current tax liabilities (5,191) (4,256)
Total current liabilities (24,241) (21,333)
Non-current liabilities
Borrowings 20 (22) (3,930)
Provision for rehabilitation 21 (1,614) (1,715)
Lease liabilities 31 (310) (344)
Deferred tax liabilities 23 - (872)
Total non-current liabilities (1,946) (6,861)
Total liabilities (26,187) (28,194)
Net assets 33,594 35,561
Notes 2023£’002022£’000
0
Equity
Share capital 24 1,068 1,068
Share premium account 258 258
Translation reserve (3,028) (2,559)
Other reserves 25 1,112 1,112
Retained earnings 32,580 33,923
Total equity attributable to equity shareholders 31,990 33,802
Non-controlling interest 27 1,604 1,759
Total equity 33,594 35,561
These financial statements were approved and authorised for issue by the board of directors on 22 April 2024 and signed on its behalf by:
A R Heller G J Casey Company Registration No. 00112155
Director Director
Financial statements
Consolidated statement of changes in shareholders’ equity
for the year ended 31 December 2023
Sharecapital£’000 SharePremium£’000 Translationreserves£’000 Otherreserves£’000 Retainedearnings£’000 Total£’000 Non-controllinginterest£’000 Totalequity£’000
Balance at 1 1,068 258 (2,540) 707 18,019 17,512 323 17,835
January 2022
Profit for - - - - 17,612 17,612 8,494 26,106
the year
Other
comprehensive - - (19) - - (19) (24) (43)
expense
Total
comprehensive - - (19) - 17,612 17,593 8,470 26,063
expense for
the year
Dividend - - - - (1,708) (1,708) (7,034) (8,742)
(note 9)
Share options - - - (142) - (142) - (142)
cancelled
Share options - - - 547 - 547 - 547
issued
Balance at 1 1,068 258 (2,559) 1,112 33,923 33,802 1,759 35,561
January 2023
Profit for - - - - 259 259 51 310
the year
Other
comprehensive - - (469) - - (469) (206) (675)
income
Total
comprehensive - - (469) - 259 (210) (155) (365)
income for
the year
Dividend - - - - (1,602) (1,602) - (1,602)
(note 9)
Balance at 31 1,068 258 (3,028) 1,112 32,580 31,990 1,604 33,594
December 2023
Financial statements
Consolidated cash flow statement
for the year ended 31 December 2023
Year ended31 Year ended31 December2022£’000
December2023£’000
Cash flows from operating
activities
Operating profit 1,900 38,976
Adjustments for:
Depreciation 1,493 1,093
Unrealised loss/(gain) on (145) 60
investment properties
Share based payment expense - 405
Gain on investments held at (759) (1,036)
FVPL
Exchange adjustments 158 270
Cash flow before working 2,647 39,768
capital
Change in inventories 2,046 (4,009)
Change in trade and other (2,026) 2,307
receivables
Change in trade and other 113 1,114
payables
Cash generated from 2,780 39,180
operations
Interest received 222 175
Interest paid (1,361) (728)
Income tax paid 137 (7,929)
Cash flow from operating 1,778 30,698
activities
Cash flows from investing
activities
Acquisition of reserves,
property, motor vehicles, (5,944) (8,480)
plant and equipment
Disposal of reserves,
property, motor vehicles, - 20
plant and equipment
Disposal / (Acquisition) of (757) (8,124)
other investments
Cash flow from investing (6,701) (16,584)
activities
Cash flows from financing
activities
Borrowings drawn 99 524
Borrowings and lease (624) (55)
liabilities repaid
Equity dividends paid (2,349) (641)
Minority dividends paid - (7,034)
Cash flow from financing (2,874) (7,206)
activities
Net (decrease)/increase in (7,797) 6,908
cash and cash equivalents
Cash and cash equivalents at 7,365 482
1 January
Exchange adjustment 140 (25)
Cash and cash equivalents at (292) 7,365
31 December
Cash and cash equivalents at
31 December comprise:
Cash and cash equivalents as
presented in the balance 3,242 10,590
sheet
Bank overdrafts (secured) (3,534) (3,225)
(292) 7,365
Financial statements
Group accounting policies
for the year ended 31 December 2023
General information
Basis of accounting
The results for the year ended 31 December 2023 have been prepared in accordance with
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:
£1 Sterling: £1 Sterling:
Rand Dollar
2023 2022 2023 2022
Year-end rate 23.3014 20.5785 1.2732 1.2102
Annual average 22.9364 20.1929 1.2389 1.2967
Basis of measurement
The consolidated financial statements have been prepared on a historical cost basis, except for the following items (refer to individual accounting policies for details):
-- Financial instruments – fair value through profit and loss
-- Investment property
Going concern
The Group has prepared cash flow forecasts which demonstrate that the Group has sufficient resources to meet its liabilities as they fall due for at least the next 12 months from date of signing.
In
Significant investments have been made in opening new mining areas at Black Wattle Colliery (Pty) Ltd and production in 2024 to date has improved. The directors expect that coal market conditions for the Group’ will remain at a stable and profitable level through 2024. The directors therefore have a reasonable expectation that the mine will achieve positive levels of cash generation for the Group in 2024. As a consequence, the directors believe that the Group is well placed to manage its South African business risks successfully.
In the
The Group holds a 5 year term facility of £3.9m with
Dragon Retail Properties Limited (“Dragon”), the Group’s 50% owned joint venture, holds a Santander bank loan of £0.95million secured against its investment property, see note 14. The bank loan is secured by way of a first charge on specific freehold property at a value of £2.03 million. The interest cost of the loan is 4.2 per cent above the bank’s base rate. A refinancing of this loan is currently underway. The loan originally expired in September 2020, but has been extended to July 2024. Santander have indicated that they are willing to provide a new term loan and we expect to complete this in the near future.
As a result of the banking facilities held as well as the acceptable levels of cash expected to be held by the Group over the next 12 months, the Directors believe that the Group has adequate resources to continue in operational existence for the foreseeable future and that the Group is well placed to manage its business risks. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
The Group has adopted all of the new and revised Standards and Interpretations issued by the
Standard Overview Impact
Amendments to IAS 1 and IFRS
Practice Statement 2 – The amendments to IAS 1
Making Materiality require an entity to disclose No significant impact
Judgements – Disclosure of material accounting policies.
Accounting Policies
The amendments introduce a
definition for accounting
estimates which is ‘monetary
amounts in financial
statements that are subject
Amendments to IAS 8 – to measurement uncertainty’.
Accounting Policies, Changes Measurement uncertainty will
in Accounting Estimates and arise when monetary amounts No significant impact
Errors required to apply an
accounting policy cannot be
observed directly. In such
cases, accounting estimates
will need to be developed
using judgements and
assumptions.
This amendment to IAS 12
Amendments to IAS 12 – Income Taxes introduces an
Income Taxes - Deferred Tax exception to the “initial
related to Assets and recognition exemption” when No significant impact
Liabilities arising from a the transaction gives rise to
Single Transaction equal taxable and deductible
temporary differences.
This amendment to IAS 12
Income Taxes introduces
Amendments to IAS 12 – disclosures to help investors
Income Taxes - International better understand a company’s
Tax Reform – Pillar Two exposure to income taxes No significant impact
Model Rules arising from the reform,
particularly before
legislation implementing the
rules is in effect.
A number of new standards, amendments to standards and interpretations have been issued but are not yet effective for the Group. The Group has not adopted any Standards or Interpretations in advance of the required implementation dates. New standards, amendments and interpretations issued but not yet effective that are relevant to the Group are summarised below:
Standard Overview Potential Impact
Effective date: 1 January
2024 (early adoption
Amendments to IAS 1 - permitted). The standard has
Classification of been amended to clarify that No significant impact
Liabilities as Current or the classification of expected
Non-current liabilities as current or
non-current should be based
on rights that exist at the
end of the reporting period.
Effective date: 1 January
2024 (early adoption
permitted). The standard
Amendments to IAS 1 - confirms that only those
Non-current Liabilities with covenants with which an No significant impact
Covenants entity must comply on or expected
before the end of the
reporting period affect the
classification of a liability
as current or non-current.
Effective date: 1 January
2024 (early adoption
permitted). The amendments
address the accounting that
Amendments to IFRS 16- Lease should be applied by a No significant impact
Liability in a Sale and seller-lessee in a sale and expected
Leaseback leaseback transaction when
the leaseback contains
variable lease payments, that
do not depend on an index or
rate.
Effective date: 1 January
2024 (early adoption
permitted). The amendments
require an entity to disclose
information about its
Amendments to IAS 7 and IFRS supplier finance arrangements No significant impact
7 to enable users of financial expected
statements to assess the
effects of those arrangements
on the entity’s liabilities
and cash flows and on the
entity’s exposure to
liquidity risk.
Effective date: 1 January
2025 (early adoption
permitted). The amendments
have been made to clarify:
Amendments to IAS 21 – Lack No significant impact
of Exchangeability -- when a currency is expected
exchangeable into
another currency; and
-- how a company
estimates a spot rate
when a currency lacks
exchangeability.
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, as disclosed in note 12, to have a significant effect on the amounts recognised in the financial statements and to be an area where the financial statements are subject to significant estimation uncertainty. The life of mine remaining is currently estimated at 6 years. This life of mine is based on the Group’s existing coal reserves including reserves acquired but subject to regulatory approval. The Group continues to evaluate new opportunities to extend the life of its existing mining and processing operations in
The Group’s estimates of proven and probable reserves are prepared utilising the South African code for the reporting of exploration results, mineral resources and mineral reserves (the SAMREC code) and are subject to assessment by an independent Competent Person experienced in the field of coal geology and specifically opencast and pillar coal extraction. Estimates of coal reserves impact assessments of the carrying value of property, plant and equipment, depreciation calculations and rehabilitation and decommissioning provisions. There are numerous uncertainties inherent in estimating coal reserves and changes to these assumptions may result in restatement of reserves. These assumptions include geotechnical factors as well as economic factors such as commodity prices, production costs, coal demand outlook and yield.
Depreciation, amortisation of mineral rights, mining development costs and plant & equipment
The annual depreciation/amortisation charge is dependent on estimates, including coal reserves and the related life of mine, expected development expenditure for probable reserves, the allocation of certain assets to relevant ore reserves and estimates of residual values of the processing plant. The charge can fluctuate when there are significant changes in any of the factors or assumptions used, such as estimating mineral reserves which in turn affects the life of mine or the expected life of reserves. Estimates of proven and probable reserves are prepared by an independent Competent Person. Assessments of depreciation/amortisation rates against the estimated reserve base are performed regularly. Details of the depreciation/amortisation charge can be found in note 12.
Provision for mining rehabilitation including restoration and de-commissioning costs
A provision for future rehabilitation including restoration and decommissioning costs requires estimates and assumptions to be made around the relevant regulatory framework, the timing, extent and costs of the rehabilitation activities and of the risk free rates used to determine the present value of the future cash outflows. The provisions, including the estimates and assumptions contained therein, are reviewed regularly by management. The Group annually engages an independent expert to assess the cost of restoration and final decommissioning as part of management’s assessment of the provision. Details of the provision for mining rehabilitation can be found in note 21.
Impairment
Property, plant and equipment representing the Group’s mining assets in
The impairment test indicated significant headroom as at 31 December 2023 and therefore no impairment is considered appropriate. The key assumptions include: coal prices, including domestic coal prices based on recent pricing and assessment of market forecasts for export coal; production based on proven and probable reserves assessed by the independent Competent Person and yields associated with mining areas based on assessments by the Competent Person and empirical data. An 9% reduction in average forecast coal prices or a 8% reduction in yield would give rise to a breakeven scenario. However, the directors consider the forecasted yield levels and pricing to be appropriate and supportable best estimates.
Fair value measurements of investment properties
An assessment of the fair value of investment properties, is required to be performed. In such instances, fair value measurements are estimated based on the amounts for which the assets and liabilities could be exchanged between market participants. To the extent possible, the assumptions and inputs used take into account externally verifiable inputs. However, such information is by nature subject to uncertainty. The fair value of investment property is set out in note 11, whilst the carrying value of investments in joint ventures which themselves include investment property held at fair value by the joint venture is set out at note 13.
Measurement of development property
The development property included within the Group’s joint venture investment in West Ealing Projects limited is considered by Management to fall outside the scope of investment property. A property intended for sale in the ordinary course of business or in the process of construction or development for such sale, for example, property acquired exclusively with a view to subsequent disposal in the near future or for development and resale is expected to be recorded under the accounting standard of IAS 2 Inventories. The directors have discussed the commercial approach with the directors of the underlying joint venture and the current plan is to sell or to complete the development and sell. The Directors therefore consider the key judgement of accounting treatment of the property development under IAS 2 Inventories to be correct.
IAS 2 Inventories require the capitalised costs to be held at the lower of cost or net realisable value. At 31 December 2023, the costs capitalised within the 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
The definition of control assumes the simultaneous fulfilment of the following three criteria:
• The parent company holds decision-making power over the relevant activities of the investee,
• The parent company has rights to variable returns from the investee, and
• The parent company can use its decision-making power to affect the variable returns.
Investees are analysed for their relevant activities and variable returns, and the link between the variable returns and the extent to which their relevant activities could be influenced in order to ensure the definition is correctly applied.
Revenue
The Group’s revenue from contracts with customers, as defined under IFRS 15, includes coal revenue and service charge income. Coal revenue is derived principally from export revenue and domestic revenue.
Both export revenue and domestic revenue is recognised when the customer has a legally binding obligation to settle under the terms of the contract when the performance obligations have been satisfied, which is once control of the goods has transferred to the buyer at the delivery point. For export revenue this is generally recognised when the product is delivered to the export terminal location specified in the customer contract, at which point control of the goods have been transferred to the customer. For domestic coal revenues this is generally recognised on collection by the customer from the mine or from the mine’s rail siding when loaded into transport, where the customer pays the transportation costs. Fulfilment costs to satisfy the performance obligations of coal revenues such as transport and loading costs borne by the Group from the mine to the delivery point are recoded in operating costs.
Coal revenue is measured based on consideration specified in the contract with a customer on a per metric tonne basis. Both export and domestic contracts are typically on a specified coal volume basis and less than a year in duration. Export contracts are typically linked to the price of Free on Board (FOB) Coal from Richards Bay Coal Terminal (API4 price). Domestic contracts are typically linked to a contractual price agreed.
Service charges recoverable from tenants are recognised over time as the service is rendered.
Lease property rental income, as defined under IFRS 16, is recognised in the Group income statement on a straight-line basis over the term of the lease. This includes the effect of lease incentives.
Expenditure
Expenditure is recognised in respect of goods and services received. Where coal is purchased from third parties at point of extraction the expenditure is only recognised when the coal is extracted and all of the significant risks and rewards of ownership have been transferred.
Investment properties
Investment properties comprise freehold and long leasehold land and buildings and head leases. Investment properties are carried at fair value in accordance with IAS 40 ‘Investment Properties’. Properties are recognised as investment properties when held for long-term rental yields, and after consideration has been given to a number of factors including length of lease, quality of tenant and covenant, value of lease, management intention for future use of property, planning consents and percentage of property leased. Investment properties are revalued annually by professional external surveyors and included in the balance sheet at their fair value. Gains or losses arising from changes in the fair values of assets are recognised in the consolidated income statement in the period to which they relate. In accordance with IAS 40, investment properties are not depreciated. The fair value of the head leases is the net present value of the current head rent payable on leasehold properties until the expiry of the lease.
Mining reserves, plant and equipment and development cost
The cost of property, plant and equipment comprises its purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in accordance with agreed specifications. Freehold land included within mining reserves is not depreciated. Other property, plant and equipment is stated at historical cost less accumulated depreciation. The cost recognised includes the recognition of any decommissioning assets related to property, plant and equipment.
The purpose of mine development is to establish secure working conditions and infrastructure to allow the safe and efficient extraction of recoverable reserves. Depreciation on mine development costs is not charged until production commences or the assets are put to use. On commencement of full commercial production, depreciation is charged over the life of the associated mine reserves extractable using the asset on a unit of production basis. The unit of production calculation is based on tonnes mined as a ratio to proven and probable reserves and also includes future forecast capital expenditure. The cost recognised includes the recognition of any decommissioning assets related to mine development.
Post production stripping
In surface mining operations, the Group may find it necessary to remove waste materials to gain access to coal reserves prior to and after production commences. Prior to production commencing, stripping costs are capitalised until the point where the overburden has been removed and access to the coal seam commences. Subsequent to production, waste stripping continues as part of extraction process as a mining production activity. There are two benefits accruing to the Group from stripping activity during the production phase: extraction of coal that can be used to produce inventory and improved access to further quantities of material that will be mined in future periods. Economic coal extracted is accounted for as inventory. The production stripping costs relating to improved access to further quantities in future periods are capitalised as a stripping activity asset, if and only if, all of the following are met:
• it is probable that the future economic benefit associated with the stripping activity will flow to the Group;
• the Group can identify the component of the ore body for which access has been improved; and
• the costs relating to the stripping activity associated with that component or components can be measured reliably.
In determining the relevant component of the coal reserve for which access is improved, the Group componentises its mine into geographically distinct sections or phases to which the stripping activities being undertaken within that component are allocated. Such phases are determined based on assessment of factors such as geology and mine planning.
The Group depreciates deferred costs capitalised as stripping assets on a unit of production method, with reference the tons mined and reserve of the relevant ore body component or phase. The cost is recognised within Mine development costs within the balance sheet.
Other assets and depreciation
The cost, less estimated residual value, of other property, plant and equipment is written off on a straight-line basis over the asset’s expected useful life. This includes the washing plant and other key surface infrastructure. Residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. Changes to the estimated residual values or useful lives are accounted for prospectively. Heavy surface mining and other plant and equipment is depreciated at varying rates depending upon its expected usage.
The depreciation rates generally applied are:
Mining equipment 5 – 10 per cent per annum of the earlier of its useful life or
the life of the mine
Motor 25 – 33 per cent per annum
vehicles
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 42 under the heading Share option schemes which is within the audited part of that report.
Pensions
The Group operates a defined contribution pension scheme. The contributions payable to the scheme are expensed in the period to which they relate.
Foreign currencies
Monetary assets and liabilities are translated at year end exchange rates and the resulting exchange rate differences are included in the consolidated income statement within the results of operating activities if arising from trading activities, including inter-company trading balances and within finance cost/income if arising from financing.
For consolidation purposes, income and expense items are included in the consolidated income statement at average rates, and assets and liabilities are translated at year end exchange rates. Translation differences arising on consolidation are recognised in other comprehensive income. Foreign exchange differences on intercompany loans are recorded in other comprehensive income when the loans are not considered as trading balances and are not expected to be repaid in the foreseeable future. Where foreign operations are disposed of, the cumulative exchange differences of that foreign operation are recognised in the consolidated income statement when the gain or loss on disposal is recognised.
Transactions in foreign currencies are translated at the exchange rate ruling on the transaction date.
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument.
Financial assets
Financial assets are classified as either financial assets at amortised cost, at fair value through other comprehensive income (“FVTOCI”) or at fair value through profit or loss (“FVPL”) depending upon the business model for managing the financial assets and the nature of the contractual cash flow characteristics of the financial asset.
A loss allowance for expected credit losses is determined for all financial assets, other than those at FVPL, at the end of each reporting period. The Group applies a simplified approach to measure the credit loss allowance for trade receivables using the lifetime expected credit loss provision. The lifetime expected credit loss is evaluated for each trade receivable taking into account payment history, payments made subsequent to year end and prior to reporting, past default experience and the impact of any other relevant and current observable data. The Group applies a general approach on all other receivables classified as financial assets. The general approach recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. The Group derecognises financial liabilities when the Group’s obligations are discharged, cancelled or have expired.
Bank loans and overdrafts
Bank loans and overdrafts are included as financial liabilities on the Group balance sheet at the amounts drawn on the particular facilities net of the unamortised cost of financing. Interest payable on those facilities is expensed as finance cost in the period to which it relates.
Lease liabilities
For any new contracts entered into the Group considers whether a contract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Group assesses whether the contract contains an identified asset and has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use.
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. Right-of-use assets, excluding property head leases, have been included in property, plant and equipment and are measured at cost, which is made up of the initial measurement of the lease liability and any initial direct costs incurred by the Group. The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.
At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing rate. Liabilities relating to short term leases are included within trade and other payables.
Lease payments included in the measurement of the lease liability are made up of fixed payments and variable payments based on an index or rate, initially measured using the index or rate at the commencement date. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is re-measured to reflect any reassessment or modification. When the lease liability is re-measured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.
Lease liabilities that arise for investment properties held under a leasehold interest and accounted for as investment property are initially calculated as the present value of the minimum lease payments, reducing in subsequent reporting periods by the apportionment of payments to the lessor.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients available in IFRS 16. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.
Investments
Current financial asset investments and other investments classified as non-current (“The investments”) comprise of shares in listed companies. The investments are measured at fair value. Any changes in fair value are recognised in the profit or loss account and accumulated in retained earnings.
Trade receivables
Trade receivables are accounted for at amortised cost. Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate expected credit loss allowances for estimated recoverable amounts as the interest that would be recognised from discounting future cash payments over the short payment period is not considered to be material.
Trade payables
Trade payables cost are not interest bearing and are stated at their nominal value, as the interest that would be recognised from discounting future cash payments over the short payment period is not considered to be material.
Other financial assets and liabilities
The Group’s other financial assets and liabilities not disclosed above are accounted for at amortised cost.
Joint ventures
Investments in joint ventures, being those entities over whose activities the Group has joint control, as established by contractual agreement, are included at cost together with the Group’s share of post-acquisition reserves, on an equity basis. Dividends received are credited against the investment. Joint control is the contractually agreed sharing of control over an arrangement, which exists only when decisions about relevant strategic and/or key operating decisions require unanimous consent of the parties sharing control. Control over the arrangement is assessed by the Group in accordance with the definition of control under IFRS 10. Loans to joint ventures are classified as non-current assets when they are not expected to be received in the normal working capital cycle. Trading receivables and payables to joint ventures are classified as current assets and liabilities.
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
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
Notes to the financial statements
for the year ended 31 December 2023
1. SEGMENTAL REPORTING
2023
Business analysis Mining£’000 Property£’000 Other£’000 Total£’000
Significant revenue customer A 22,283 - - 22,283
Significant revenue customer B 10,659 - - 10,659
Significant revenue customer C 4,854 - - 4,854
Other revenue 9,628 1,268 561 11,457
Segment revenue 47,424 1,268 561 49,253
Operating profit before fair
value adjustments & exchange (113) 711 556 1,154
movements
Revaluation of investments & (158) 145 759 746
exchange movements
Operating profit and segment (271) 856 1,315 1,900
result
Segment assets 26,767 13,402 14,996 55,165
Unallocated assets
– Non-current assets 54
– Cash & cash equivalents 3,242
Total assets excluding
investment in joint ventures and 58,461
assets held for sale
Segment liabilities (17,680) (709) 3 (18,386)
Borrowings (3,563) (3,920) - (7,483)
Total liabilities (21,243) (4,629) 3 (24,869)
Net assets 32,592
Non segmental assets
– Investment in joint ventures 1,002
Net assets as per balance sheet 33,594
Geographic analysis UnitedKingdom£’000 SouthAfrica£’000 Total£’000 Revenue 1,829 47,424 49,253 Operating profit and segment 411 1,489 1,900 result Depreciation (34) (1,459) (1,493) Non-current assets excluding 10,873 18,842 29,715 investments Total net assets 26,018 7,576 33,594 Capital expenditure 35 5,909 5,944
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 37,033 652 585 38,270
movements
Revaluation of investments & (270) (60) 1,036 706
exchange movements
Operating profit and segment 36,763 592 1,621 38,976
result
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 62,714
assets held for sale
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 UnitedKingdom£’000 SouthAfrica£’000 Total£’000 Revenue 1,698 93,413 95,111 Operating profit and segment (3,696) 42,672 38,976 result Depreciation (41) (1,052) (1,093) Non-current assets excluding 10,688 16,324 27,012 investments Total net assets 28,285 7,276 35,561 Capital expenditure 46 8,434 8,480
2. REVENUE
2023£’000 2022 £’000
Revenue from contracts with customers:
Coal sales and processing 47,424 93,413
Service charges recoverable from tenants 181 98
Other:
Rental income 1,087 1,010
Other revenue 561 590
Revenue 49,253 95,111
Segmental mining revenue is derived principally from coal sales and is recognised once the control of the goods has transferred from the Group to the buyer. Segmental property revenue is derived from rental income and service charges recoverable from tenants. This is consistent with the revenue information disclosed for each reportable segment (see note 1). Rental income is recognised on a straight-line basis over the term of the lease. Service charges recoverable from tenants are recognised over time as the service is rendered. Revenue is measured based on the consideration specified in the contract with the customer or tenant.
3. OPERATING COSTS
2023£’000 2022 £’000
Mining 38,620 43,209
Property 339 269
Cost of sales 38,959 43,478
Administration 9,140 13,363
Operating costs 48,099 56,841
The direct property costs are:
Direct property expense 305 250
Bad debts 34 19
339 269
Operating costs above include depreciation of £1,493,000 (2022: £1,093,000).
4. (LOSS)/GAIN ON REVALUATION OF INVESTMENT PROPERTIES
The reconciliation of the investment (deficit)/surplus to the gain on revaluation of investment properties in the income statement is set out below:
2023£’000 2022 £’000
Investment surplus/(deficit) 145 (60)
Gain/(Loss) on valuation movement in respect of head lease 38 (5)
payments
Gain/(Loss) on revaluation of investment properties 183 (65)
5. PROFIT BEFORE TAXATION
Profit before taxation is arrived at after charging:
2023£’000 2022 £’000
Staff costs (see note 29) 7,270 11,991
Depreciation 1,493 1,093
Exchange loss (158) (270)
Fees payable to the company’s auditor for the audit of the 55 50
company’s annual accounts
Fees payable to the company’s auditor and its associates
for other services:
The audit of the company’s subsidiaries pursuant to 40 43
legislation
Inventories recognised as an expense 35,808 35,969
6. DIRECTORS’ EMOLUMENTS
Directors’ emoluments are shown in the Directors’ remuneration report on page 41 which is within the audited part of that report.
7. INTEREST PAYABLE
2023£’000 2022£’000
On bank overdrafts and bank loans 771 507
Unwinding of discount 112 319
Lease liabilities 27 25
Other interest payable 563 196
Interest payable 1,473 1,047
8. TAXATION
2023£’000 2022£’000
(a) Based on the results for the year:
Current tax - UK - -
Current tax - Overseas 1,318 11,520
Corporation tax - adjustment in respect of prior year – UK - -
Current tax 1,318 11,520
Deferred tax (1,018) 388
Total tax in income statement charge 300 11,908
(b) Factors affecting tax charge for the year:
The corporation tax assessed for the year is different from that at the standard rate of corporation tax in the
The differences are explained below:
Profit/ Loss on ordinary activities before taxation 610 38,014 Tax on profit/ loss on ordinary activities at 23.50% (2022: 19.00%) 143 7,223 Effects of: Expenses not deductible for tax purposes 241 280 Non-taxable income (95) (83) Capital gains\(losses) on disposal - 14 Differences in tax rates to UK Tax rate (75) 4,491 Other differences 86 (17) Adjustment in respect of prior years - - Total tax in income statement charge/(credit) 300 11,908
(c) Analysis of
Current tax - -
Deferred tax (93) (937)
(93) (937)
Overseas tax included in above:
Current tax 1,318 11,520
Adjustment in respect of prior years - -
Current tax 1,318 11,520
Deferred tax (925) 1,325
393 12,845
Overseas tax is derived from the Group’s South African mining operation. Refer to note 1 for a report on the Groups’ mining and South African segmental reporting. The adjustment to tax rate arises due to the deferred tax rate used in the
9. SHAREHOLDER DIVIDENDS
2023Per share 2023£’000 2022Per share 2022 £’000
Dividends paid during the year 12p 1,282 6.00p 641
relating to the prior period
Dividends relating to the
current period:
Interim dividend 3.00p 320 10p 1,067
Proposed final dividend 4.00p 427 4p 427
Proposed special dividend 0.00p - 8p 854
7.00p 747 22p 2,348
The interim dividend for 2022 was approved by the Board on 30th August 2022, paid on 3rd February 2023 and accounted for as payable as at 31 December 2022. The total dividends to shareholders accounted during the year of £1,602,000 (2022: £1,708,000) comprise of dividends paid during the year relating to the prior period of £1,282,000 (2022: £641,000) and the interim dividend of £320,000 (£1,067,000). The final dividend for 2023 is not accounted for until it has been approved at the Annual General Meeting.
10. PROFIT AND DILUTED PROFIT PER SHARE
Both the basic and diluted profit per share calculations are based on a profit after tax attributable to equity holders of the company of £259,000 (2022: £17,612,000). The basic profit/(loss) per share of 2.43p has been calculated on a weighted average of 10,676,839 (2022: 10,676,839) ordinary shares being in issue during the period. The diluted profit per share of 2.43p has been calculated on the weighted average number of shares in issue of 10,676,839 (2022: 10,676,839) plus the dilutive potential ordinary shares arising from share options of nil (2022: nil) totalling 10,676,839 (2022: 10,676,839).
11. INVESTMENT PROPERTIES
Freehold £’000 Long Leasehold£’000 HeadLease£’000 Total£’000
Valuation at 1 8,270 2,195 170 10,635
January 2023
Revaluation 125 20 38 183
Valuation at 31 8,395 2,215 208 10,818
December 2023
Valuation at 1 8,230 2,295 175 10,700
January 2022
Revaluation 40 (100) (5) 65
Valuation at 31 8,270 2,195 170 10,635
December 2022
Historical cost
At 31 December 2023 5,851 728 - 6,579
At 31 December 2022 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:
2023£’000 2022£’000
Carter Towler 10,610 10,465
The valuations were carried out in accordance with the Statements of Asset Valuation and Guidance Notes published by The
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 Key Range
property Valuation unobservable Carrying/fair Carrying/fair Range (weighted
Level 3 technique inputs value2023£’000 value2022£’000 (weightedaverage)2023 average)
2022
Freehold Estimated
– Income rental value 8,395 8,270 £4-£29(£21) £4 – £29
external capitalisation per sq ft (£21)
valuation p.a
Equivalent 8.9% –
Yield 8.8% - 13.5%(10.7%) 15.8%
(11.4%)
Long Estimated
leasehold Income rental value £8 – £8
– capitalisation per sq ft 2,215 2,195 £9-£9(£9) (£8)
external p.a
valuation
Equivalent 9.8% –
yield 10.4% - 10.4%(10.4%) 9.8%
(9.8%)
At 31 10,610 10,465
December
There are interrelationships between all these inputs as they are determined by market conditions. The existence of an increase in more than one input would be to magnify the input on the v aluation. The impact on the valuation will be mitigated by the interrelationship of two inputs in opposite directions, for example, an increase in rent may be offset by an increase in yield.
The table below illustrates the impact of changes in key unobservable inputs on the carrying / fair value of the Group’s properties:
Estimated rental Equivalent yield25
value10% increase basis
ordecrease Pointcontraction or
expansion
2023£’000 2022£’000 2023£’000 2022£’000
Freehold – external valuation 840/(840) 827 / (827) 215/(205) 205 / (195)
Long Leasehold – external valuation 222/(222) 220 / (220) 55/(52) 57 / (55)
12. MINING RESERVES, PLANT AND EQUIPMENT
Miningequipment
Miningreserves£’000 and development Motorvehicles£’000 Officeequipment£’000 Total£’000
costs£’000
Cost at 1 2,332 36,291 385 168 39,176
January 2023
Exchange (273) (4,333) (33) (14) (4,653)
adjustment
Additions - 5,903 27 14 5,944
Disposals -
Cost at 31
December 2,059 37,861 379 168 40,467
2023
Accumulated
depreciation 1,099 21,347 256 97 22,799
at 1 January
2023
Exchange (174) (2,517) (20) (10) (2,721)
adjustment
Charge for 1,443 28 22 1,493
the year
Disposals - - - - -
Accumulated
depreciation
at 31 925 20,273 264 109 21,571
December
2023
Net book
value at 31 1,134 17,588 115 59 18,896
December
2023
Cost at 1 1,097 29,063 396 179 30,735
January 2022
Exchange (13) 134 3 1 125
adjustment
Additions 1,248 7,117 55 60 8,480
Disposals - (23) (69) (72) (164)
Cost at 31
December 2,332 36,291 385 168 39,176
2022
Accumulated
depreciation 1,089 20,167 264 150 21,670
at 1 January
2022
Exchange 10 166 3 1 180
adjustment
Charge for - 1,037 38 18 1,093
the year
Disposals - (23) (49) (72) (144)
Accumulated
depreciation
at 31 1,099 21,347 256 97 22,799
December
2022
Net book
value at 31 1,233 14,944 129 71 16,377
December
2022
Included in the above line items are right-of-use assets over the following:
MiningEquipment and Motorvehicles£’000 Total£’000
development costs £’000
Net book value at 1 186 21 207
January 2023
Additions 1 - 1
Exchange adjustment (24) - (24)
Depreciation (35) (12) (47)
Net book value at 31 128 9 137
December 2023
Net book value at 1 219 48 267
January 2022
Additions - - -
Exchange adjustment 5 - 5
Depreciation (38) (27) (65)
Net book value at 31 186 21 207
December 2022
13. INVESTMENTS HELD AS NON-CURRENT ASSETS
2023Net 2022Net
investment in 2023Other£’000 investment 2022Other£’000
jointventuresassets£’000 in
jointventuresassets£’000
At 1 1,041 12,590 1,130 3,631
January
Gain in - 856 - 718
investment
Additions - 1,189 - 9,758
Disposals - (377) - (1,517)
Share of
(loss) in (39) - (89) -
joint
ventures
Net assets
at 31 1,002 14,258 1,041 12,590
December
Other investments comprise of the following:
2023£’000 2022 £’000
Net book value of unquoted investments - -
Net book and market value of readily realisable investments 6,843 6,782
listed on stock exchanges in the United Kingdom
Net book and market value of readily realisable investments 7,415 5,808
listed on overseas stock exchanges
14,258 12,590
Dividend income from investments held as non-current assets was £501,000 (2022: £437,000) for the year.
14. JOINT VENTURES
Development Physics Limited
The company owns a third of the issued share capital of Development Physics Limited, an unlisted property development company. At year end, the negative carrying value of the investment held by the Group was £24,000 (2022: £14,000). The remaining two thirds is held equally by London & Associated Properties PLC and Metroprop Real Estate Ltd. Development Physics Limited is incorporated in
Dragon Retail Properties Limited
The company owns 50% of the issued share capital of Dragon Retail Properties Limited, an unlisted property investment company. At year end, the carrying value of the investment held by the Group was £593,000 (2022: £606,000). The remaining 50% is held by London & Associated Properties PLC. Dragon Retail Properties Limited is incorporated in
West Ealing Projects Limited
The company owns 50% of the issued share capital of West Ealing Projects Limited, an unlisted property development company. At year end, the carrying value of the investment held by the Group was £434,000 (2022: £449,000). The remaining 50% is held by London & Associated Properties PLC. West Ealing Projects Limited is incorporated in
Development Dragon£’000 West 2023£’000 Development Dragon£’000 West 2022£’000
Physics£’000 Ealing£’000 Physics£’000 Ealing£’000
Turnover - 168 65 233 - 168 53 221
Profit and
loss:
(Loss)/Profit
before
depreciation, (28) 53 (32) (7) (33) (5) (71) (109)
interest and
taxation
Depreciation
and - (2) - (2) - (3) - (3)
amortisation
(Loss)/Profit
before (28) 51 (32) (9) (33) (8) (71) (112)
interest and
taxation
Interest - - - - - - - -
Income
Interest - (79) (1) (80) - (51) (1) (52)
expense
(Loss)/Profit
before (28) (28) (33) (89) (33) (59) (72) (164)
taxation
Taxation - - - - - (2) (34) (36)
(Loss)/Profit
after (28) (28) (33) (89) (33) (61) (106) (200)
taxation
Balance sheet
Non-current - 2,030 - 2,030 - 2,038 - 2,038
assets
Cash and cash 5 57 9 71 2 107 9 118
equivalents
Property 483 - 8,889 9,372 348 - 8,112 8,460
inventory
Other current - 112 64 176 2 269 47 318
assets
Current - (950) (4,386) (5,336) - (1,143) (4,399) (5,542)
borrowings
Other current (559) (64) (3,709) (4,332) (395) (59) (2,862) (3,316)
liabilities
Net current (71) (845) 867 (49) (43) (826) 907 38
assets
Non-current - - - - - - (9) (9)
borrowings
Other
non-current - - - - - - - -
liabilities
Net assets at (71) 1,185 867 1,981 (43) 1,212 898 2,067
31 December
Share of net
assets at 31 (24) 593 434 1,002 (14) 606 449 1,041
December
15. SUBSIDIARY COMPANIES
The company owns the following ordinary share capital of the subsidiaries which are included within the consolidated financial statements:
Percentage of Registered Country
Activity share address ofincorporation
capital
Directly held:
Mineral Products 12 Little England and
Limited Share dealing 100% Portland Street, Wales
London, W1W8BJ
Bisichi 12 Little England and
(Properties) Property 100% Portland Street, Wales
Limited London, W1W8BJ
Bisichi 12 Little England and
Northampton Property 100% Portland Street, Wales
Limited London, W1W8BJ
Bisichi Trustee 12 Little England and
Limited Property 100% Portland Street, Wales
London, W1W8BJ
Urban First 12 Little England and
(Northampton) Property 100% Portland Street, Wales
Limited London, W1W8BJ
Bisichi Mining 12 Little England and
(Exploration) Holding company 100% Portland Street, Wales
Limited London, W1W8BJ
Ninghi Marketing 12 Little England and
Limited Dormant 90.1% Portland Street, Wales
London, W1W8BJ
Bisichi Mining 12 Little England and
Management Dormant 100% Portland Street, Wales
Services Limited London, W1W8BJ
Samora Machel
Bisichi Coal Street, Bethal
Mining (Pty) Coal mining 100% Road, South Africa
Limited Middelburg,
Mpumalanga, 1050
Indirectly held:
Samora Machel
Black Wattle Street, Bethal
Colliery (Pty) Coal mining 62.5% Road, South Africa
Limited Middelburg,
Mpumalanga, 1050
Samora Machel
Sisonke Coal Street, Bethal
Processing (Pty) Coal processing 62.5% Road, South Africa
Limited Middelburg,
Mpumalanga, 1050
Black Wattle Samora Machel
Klipfontein Coal mining 62.5% Street, Bethal South Africa
(Pty) Limited Road,Middelburg,
Mpumalanga, 1050
Amandla Ehtu Samora Machel
Mineral Resource Dormant 70% Street, Bethal South Africa
Development Road,Middelburg,
(Pty) Limited Mpumalanga, 1050
Details on the non-controlling interest in subsidiaries are shown under note 27.
16. INVENTORIES
2023£’000 2022£’000
Coal
Washed 1,949 4,758
Mining Production 542 162
Work in progress 85 221
Other 3 58
2,579 5,199
The amount of inventories recognised as an expense during the period was £35,808,000 (2022: £35,969,000).
17. TRADE AND OTHER RECEIVABLES
2023£’000 2022 £’000
Financial assets falling due within one year:
Trade receivables 4,180 4,067
Amount owed by joint venture 1,844 1,379
Other receivables 1,727 860
Non-financial instruments falling due within one year:
Prepayments and accrued income 183 131
7,934 6,437
Financial assets falling due within one year are held at amortised cost. The fair value of trade and other receivables approximates their carrying amounts. The Group applies a simplified approach to measure the credit loss allowance for trade receivables using the lifetime expected credit loss provision. The lifetime expected credit loss is evaluated for each trade receivable taking into account payment history, payments made subsequent to year end and prior to reporting, past default experience and the impact of any other relevant and current observable data. The Group applies a general approach on all other receivables classified as financial assets. At year end, the Group allowance for doubtful debts provided against trade receivables was £374,000 (2022: £89,000).
18. INVESTMENTS IN LISTED SECURITIES HELD AT FVPL
2023Other£’000 2022Other£’000
At 1 January 886 685
(Loss)/Gain in investments (97) 318
Additions - 449
Disposals (55) (566)
Market value at 31 December 734 886
2023£’000 2022 £’000
Market value of listed Investments:
Listed in Great Britain 618 686
Listed outside Great Britain 116 200
734 886
Original cost of listed investments 760 846
Unrealised (deficit)/surplus of market value versus cost (26) 40
Dividend income from investments in listed securities held at FVPL was £54,000 (2022: £147,000) for the year.
19. TRADE AND OTHER PAYABLES
2023£’000 2022 £’000
Trade payables 8,673 8,519
Amounts owed to joint ventures 33 120
Lease liabilities (Note 31) 63 54
Other payables 1,949 2,000
Accruals 649 2.366
Deferred Income 222 223
11,589 13,282
20. FINANCIAL LIABILITIES – BORROWINGS
Current Non-current
2023£’000 2022 £’000 2023£’000 2022 £’000
Bank overdraft (secured) 3,534 3,225 - -
Bank loan (secured) 3,927 570 22 3,930
7,461 3,795 22 3,930
2023£’000 2022 £’000
Bank overdraft and loan instalments by reference to the
balance sheet date:
Within one year 7,461 3,795
From one to two years 22 3,906
From two to five years - 24
7,483 7,725
Bank overdraft and loan analysis by origin:
United Kingdom 3,920 3,880
Southern Africa 3,563 3,845
7,483 7,725
In
In the
Dragon Retail Properties Limited (“Dragon”), the Group’s 50% owned joint venture, holds a Santander bank loan of £0.95million secured against its investment property, see note 14. The bank loan is secured by way of a first charge on specific freehold property at a value of £2.03 million. The interest cost of the loan is 4.2 per cent above the bank’s base rate. A refinancing of this loan is currently underway. The loan originally expired in September 2020, but has been extended to July 2024. Santander have indicated that they are willing to provide a new term loan and we expect to complete this in the near future.
Consistent with others in the mining and property industry, the Group monitors its capital by its gearing levels. This is calculated as the total bank loans and overdraft less remaining cash and cash equivalents as a percentage of equity. At year end the gearing of the Group was calculated as follows:
2023£’000 2022 £’000
Total bank loans and overdraft 7,483 7,725
Less cash and cash equivalents (excluding overdraft) (3,242) (10,590)
Net debt 4,241 (2,865)
Total equity attributable to shareholders of the parent 31,990 33,802
Gearing (13.3%) (8.5%)
Analysis of the changes in liabilities arising from financing activities:
Bank Bank Lease Bank Bank Lease
borrowings overdrafts£’000 liabilities£’000 2023£’000 borrowings overdrafts£’000 liabilities£’000 2022£’000
£’000 £’000
Balance at 4,499 3,225 398 8,122 3,983 2,536 454 6,973
1 January
Exchange (64) (388) (24) (476) (9) 11 5 7
adjustments
Cash
movements
excluding (486) 697 (39) 172 525 678 (56) 1,147
exchange
adjustments
Additions - - 38 38 - - (5) (5)
Balance at 3,949 3,534 373 7,856 4,499 3,225 398 8,122
31 December
21. PROVISION FOR REHABILITATION
2023£’000 2022£’000
As at 1 January 1,715 1,390
Exchange adjustment (213) 6
Increase in provision - -
Unwinding of discount 112 319
As at 31 December 1,614 1,715
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 Financial Investments Financial Financial Investments
Assetsmeasured Liabilitiesmeasured held at 2023£’000 Assetsmeasured Liabilitiesmeasured held at 2022£’000
atamortised atamortised FVPL atamortised atamortised FVPL
cost£’000 cost£’000 £’000 cost£’000 cost£’000 £’000
Cash and
cash 3,242 - - 3,242 10,590 - - 10,590
equivalents
Non-current
other
investments - - 14,258 14,258 - - 12,590 12,590
held at
FVPL
Investments
in listed
securities - - 734 734 - - 886 886
held at
FVPL
Trade and
other 7,571 - - 7,571 6,306 - - 6,306
receivables
Bank
borrowings - (7,483) - (7,483) - (7,725) - (7,725)
and
overdraft
Lease - (373) - (373) - (398) - (398)
Liabilities
Other - (16,495) - (16,495) - (17,261) - (17,261)
liabilities
10,993 (24,351) 14,992 1,634 16,896 (25,384) 13,476 4,988
Investments in listed securities held at fair value through profit and loss fall under level 1 of the fair value hierarchy into which fair value measurements are recognised in accordance with the levels set out in IFRS 7. The comparative figures for 2022 fall under the same category of financial instrument as 2023.
The carrying amount of short term (less than 12 months) trade receivable and other liabilities approximate their fair values. The fair value of non-current borrowings in note 20 approximates its carrying value and was determined under level 2 of the fair value hierarchy and is estimated by discounting the future contractual cash flows at the current market interest rates for
Although no derivative transactions were entered into during the current and prior year, the Group may use derivative transactions such as interest rate swaps and forward exchange contracts as necessary in order to help manage the financial risks arising from the Group’s activities. The main risks arising from the Group’s financing structure are interest rate risk, liquidity risk, market risk, credit risk, currency risk and commodity price risk. There have been no changes during the year of the main risks arising from the Group’s finance structure. The policies for managing each of these risks and the principal effects of these policies on the results are summarised below.
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or cashflows associated with the instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest bearing financial assets and liabilities that the Group uses.
Interest bearing borrowings comprise bank loans, bank overdrafts and variable rate finance lease obligations. The rates of interest vary based on
As at 31 December 2023, with other variables unchanged, a 1% increase or decrease in interest rates, on investments and borrowings whose interest rates are not fixed, would respectively change the profit/loss for the year by £56,000 (2022: £35,000). The effect on equity of this change would be an equivalent decrease or increase for the year of £56,000 (2022: £35,000).
Liquidity risk
The Group’s policy is to minimise refinancing risk. Efficient treasury management and strict credit control minimise the costs and risks associated with this policy which ensures that funds are available to meet commitments as they fall due. As at year end the Group held borrowing facilities in the
The following table sets out the maturity profile of contractual undiscounted cash flows of financial liabilities as at 31 December:
2023£’000 2022 £’000
Within one year 24,431 21,511
From one to two years 62 4,259
From two to five years 130 479
Beyond five years 144 126
24,767 26,375
The following table sets out the maturity profile of contractual undiscounted cash flows of financial liabilities as at 31 December maturing within one year:
2023£’000 2022£’000
Within one month 7,512 15,635
From one to three months 11,255 4,150
From four to twelve months 5,664 1,726
24,431 21,511
In
In the
As a result of the above agreed banking facilities, the Directors believe that the Group is well placed to manage its liquidity risk.
Credit risk
The Group is mainly exposed to credit risk on its cash and cash equivalents, trade and other receivables and amounts owed by joint ventures as per the balance sheet. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet which at year end amounted to £10,993,000 (2022: £16,896,000).
To mitigate risk on its cash and cash equivalents, the Group only deposits surplus cash with well-established financial institutions of high quality credit standing.
The Group’s credit risk is primarily attributable to its trade receivables. Trade debtor’s credit ratings are reviewed regularly. The Group’s review includes measures such as the use of external ratings and establishing purchase limits for each customer. The Group had amounts due from its significant revenue customers at the year end that represented 73% (2022: 84%) of the trade receivables balance. These amounts have been subsequently settled. The Group approach to measure the credit loss allowance for trade receivables is outlined in note 17. At year end, the Group allowance for doubtful debts provided against trade receivables was £374,000 (2022: £89,000). As at year end the amount of trade receivables held past due date less credit loss allowances was £144,000 (2022: £159,000). To date, the amount of trade receivables held past due date less credit loss allowances that has not subsequently been settled is £19,000 (2022: £122,000). Management have no reason to believe that this amount will not be settled.
The Group exposure to credit risk on its loans to joint ventures and other receivables is mitigated through ongoing review of the underlying performance and resources of the counterparty including evaluation of different scenarios of probability of default and expected loss applicable to each of the underlying balances.
Financial assets maturity
On 31 December 2023, cash at bank and in hand amounted to £3,242,000 (2022: £10,590,000) which is invested in short term bank deposits maturing within one year bearing interest at the bank’s variable rates. Cash and cash equivalents all have a maturity of less than 3 months.
Foreign exchange risk
All trading is undertaken in the local currencies except for certain export sales which are invoiced in dollars. It is not the Group’s policy to obtain forward contracts to mitigate foreign exchange risk on these contracts as payment terms are within 15 days of invoice or earlier. Funding is also in local currencies other than inter-company investments and loans and it is also not the Group’s policy to obtain forward contracts to mitigate foreign exchange risk on these amounts. During 2023 and 2022 the Group did not hedge its exposure of foreign investments held in foreign currencies.
The principal currency risk to which the Group is exposed in regard to inter-company balances is the exchange rate between Pounds sterling and South African Rand. It arises as a result of the retranslation of Rand denominated inter-company trade receivable balances held within the
Based on the Group’s net financial assets and liabilities as at 31 December 2023, a 25% strengthening of Sterling against the South African Rand, with all other variables held constant, would decrease the Group’s profit after taxation by £280,000 (2022: £121,000). A 25% weakening of Sterling against the South African Rand, with all other variables held constant would increase the Group’s profit after taxation by £466,000 (2022: £201,000). The 25% sensitivity has been determined based on the average historic volatility of the exchange rate.
The table below shows the currency profiles of cash and cash equivalents:
2023£’000 2022 £’000
Sterling 1,570 7,779
South African Rand 1,109 2,238
US Dollar 563 573
3,242 10,590
Cash and cash equivalents earn interest at rates based on
The tables below shows the currency profiles of net monetary assets and liabilities by functional currency of the Group:
2023: Sterling£’000 South
AfricanRands£’000
Sterling 12,082 -
South African Rand 40 (12,583)
US Dollar 2,095 -
14,217 (12,583)
2022: Sterling£’000 South
AfricanRands£’000
Sterling 14,715 -
South African Rand 45 (11,743)
US Dollar 1,971 -
16,731 (11,743)
23. DEFERRED TAXATION
2023 2022
£’000 £’000
As at 1 January 872 506
Recognised in income (1,018) 388
Exchange adjustment (172) (22)
As at 31 December (318) 872
The deferred tax balance comprises the following:
Revaluations 924 671
Capital allowances 4,562 3,855
Short term timing difference (846) (813)
Unredeemed capital deductions (2,665) (1,439)
Losses and other deductions (2,293) (1,402)
(318) 872
Refer to note 8 for details of deferred tax recognised in income in the current year. Tax rates of 25% (2022: 25%) in the
24. SHARE CAPITAL
2023£’000 2022 £’000
Authorised: 13,000,000 ordinary shares of 10p each 1,300 1,300
Allotted and fully paid:
2023Number 2022Number of 2023£’000 2022£’000
ofordinaryshares ordinaryshares
At 1 January and 10,676,839 10,676,839 1,068 1,068
outstanding at 31 December
25. OTHER RESERVES
2023£’000 2022£’000
Equity share options 1,026 1,026
Net investment premium on share capital in joint venture 86 86
1,112 1,112
26. SHARE BASED PAYMENTS
Details of the share option scheme are shown in the Directors’ remuneration report on page 42 under the heading Share option schemes which is within the audited part of this report. Further details of the share option schemes are set out below.
The Bisichi PLC Unapproved Option Schemes:
Year Number of sharefor Number of share options Number of share
of Subscriptionprice Period withinwhich which lapsed/surrendered/awardedduring for which
grant per share optionsexercisable optionsoutstanding year optionsoutstanding
at31 December 2022 at31 December 2023
2022 352.0p Sep 2022 – Sep 760,000 - 760,000
2032
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.
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%
2023Number 2023Weightedaverageexercise 2022Number 2022Weightedaverageexercise
price price
Outstanding at 1 January 760,000 352.00p 680,000 79.46p
Lapsed/Surrendered/cancelled - - (680,000) 79.46p
during the year
Issued during the year - - 760,000 352.00p
Outstanding at 31 December 760,000 352.00p 760,000 352.00p
Exercisable at 31 December 760,000 352.00p 760,000 352.00p
27. NON-CONTROLLING INTEREST
2023£’000 2022£’000
As at 1 January 1,759 323
Issue of shares in subsidiary - 1
Share of profit/(loss) for the year 51 8,494
Dividends paid - (7,034)
Exchange adjustment (206) (25)
As at 31 December 1,604 1,759
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
2023£’000 2022£’000
Revenue 47,423 93,356
Expenses (47,275) (63,289)
Profit/(loss) for the year 148 30,067
Other comprehensive Income - -
Total comprehensive income for the year 148 30,067
Balance sheet
Non-current assets 18,843 16,325
Current assets 9,033 11,752
Current liabilities (20,451) (18,873)
Non-current liabilities (2,262) (3,522)
Net assets at 31 December 5,163 5,682
The non-controlling interest originates from the disposal of a 37.5% shareholding in Black Wattle Colliery (Pty) Ltd in 2010 when the total issued share capital in Black Wattle Colliery (Pty) Ltd was increased from 136 shares to 1,000 shares at par of R1 (South African Rand) through the following shares issue:
-- a subscription for 489 ordinary shares at par by Bisichi Mining
(Exploration) Limited increasing the number of shares held from 136
ordinary shares to a total of 625 ordinary shares;
-- a subscription for 110 ordinary shares at par by Vunani Mining (Pty)
Ltd;
-- a subscription for 265 “A” shares at par by Vunani Mining (Pty) Ltd
On 12 April 2022 the total issued share capital in Black Wattle Colliery (Pty) Ltd was increased further from 1000 shares to 1002 shares at par of R1 through the following share issue:
-- a subscription of 1 “B” Share at par by Bisichi Mining (Exploration
Limited) ;
-- a subscription of 1 “B” Share at par by Vunani Mining (Pty) Ltd
Vunani Mining (Pty) Ltd is a South African Black Economic Empowerment company and minority shareholder in Black Wattle Colliery (Pty) Ltd.
The “A” shares rank pari passu with the ordinary shares save that they will have no dividend rights until such time as the dividends paid by Black Wattle Colliery (Pty) Ltd on the ordinary shares subsequent to 30 October 2008 will equate to R832,075,000.
A non-controlling interest of 15% in Black Wattle Colliery (Pty) Ltd is recognised for all profits distributable to the 110 ordinary shares held by Vunani Mining (Pty) Ltd from the date of issue of the shares (18 October 2010). An additional non-controlling interest will be recognised for all profits distributable to the 265 “A” shares held by Vunani Mining (Pty) Ltd after such time as the profits available for distribution, in Black Wattle Colliery (Pty) Ltd, before any payment of dividends after 30 October 2008, exceeds R832,075,000.
The “B” shares rank pari passu with the ordinary shares save that they have sole rights to the distributable profits attributable to certain mining reserves held by Black Wattle Colliery (Pty) Ltd. A non-controlling interest is recognised for all profits distributable to the “B” shares held by Vunani Mining (Pty) Ltd from the date of issue of the shares (12 April 2022).
28. RELATED PARTY TRANSACTIONS
At 31 December During the year
Amounts owedto Amounts owedby Costs recharged Cash paid (to)/by
related related (to)/by relatedparty£’000
party£’000 party£’000 relatedparty£’000
Related party:
London &
Associated - - 200 (200)
Properties PLC
(note (a))
West Ealing
Projects - (1,618) - (381)
Limited (note
(b))
Dragon Retail
Properties 33 - (36) (51)
Limited (note
(c))
Development
Physics - (226) - (84)
Limited (note
(d))
As at 31 33 (1,844) 164 (716)
December 2023
London &
Associated - - 200 (241)
Properties PLC
(note (a))
West Ealing
Projects - (1,237) - (239)
Limited (note
(b))
Dragon Retail
Properties 120 - (36) -
Limited (note
(c))
Development
Physics - (142) - (75)
Limited (note
(d))
As at 31 120 (1,379) 164 (555)
December 2022
(a) London & Associated Properties PLC – London & Associated Properties PLC (“LAP”) is a substantial shareholder and parent company of
(b) West Ealing Projects Limited – West Ealing Projects Limited (“West Ealing”) is an unlisted property company incorporated in
(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
Key management personnel comprise of the directors of the company who have the authority and responsibility for planning, directing, and controlling the activities of the company. Details of key management personnel compensation and interest in share options are shown in the Directors’ Remuneration Report on pages 41 and 42 under the headings Directors’ remuneration, Pension schemes and incentives and Share option schemes which is within the audited part of this report. The total employers’ national insurance paid in relation to the remuneration of key management was £326,000 (2022: £580,000). In 2012 a loan was made to one of the directors, Mr A R Heller, for £116,000. Interest is payable on the Director’s Loan at a rate of 6.14 per cent. There is no fixed repayment date for the Director’s Loan. The loan amount outstanding at year end was £41,000 (2022: £41,000) and no repayment (2022: £nil) was made during the year.
The non-controlling interest to Vunani Mining (Pty) Ltd is shown in note 27. In addition, the Group holds an investment in Vunani Limited with a fair value of £40,000 (2022: £44,000) and an investment in Vunani Capital Partners (Pty) Ltd of £70,000 (2022: £189,000). Both are related parties to Vunani Mining (Pty) Ltd and are classified as non-current available for sale investments.
29. EMPLOYEES
2023£’000 2022£’000
Staff costs during the year were as follows:
Salaries 6,495 8,891
Social security costs 326 580
Pension costs 449 300
Share based payments - 2,220
7,270 11,991
2023 2022
The average weekly numbers of employees of the Group during
the year were as follows:
Production 209 213
Administration 15 15
224 228
30. CAPITAL COMMITMENTS
2023£’000 2022 £’000
Commitments for capital expenditure approved and contracted - -
for at the year end
31. LEASE LIABILITIES AND FUTURE PROPERTY LEASE RENTALS
The lease liabilities are secured by the related underlying assets. The undiscounted maturity analysis of lease payments at 31 December 2023 is as follows:
Mining Equipment Motor Head Lease
& Development Vehicles£’000 Property£’000 2023£’000 2022£’000
costs£’000
Within one year 41 9 13 62 71
Second to fifth 136 - 52 188 210
year
After five 9 - 1,564 1,573 1,341
years
186 9 1,629 1,824 1,622
Discounting (30) - (1,421) (1,451) (1,222)
adjustment
Present value 156 9 208 373 400
The present value of minimum lease payments at 31 December 2023 is as follows:
Mining Equipment Motor Head Lease
& Development Vehicles£’000 Property£’000 2023£’000 2022£’000
costs£’000
Within one year 41 9 13 54 54
(Note 19)
Second to fifth 110 - 41 157 170
year
After five 5 - 154 163 176
years
Present value 156 9 208 373 400
With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability. The Group classifies its right-of-use assets in a consistent manner to its property, plant and equipment. Lease liabilities due within one year are classified within trade and other payables in the balance sheet.
The Group has one lease for mining equipment in
The Group has one lease contract for an investment property. The remaining term for the leased investment property is 125 years (2022: 126 years). The annual rent payable is the higher of £7,500 or 6.25% of the revenue derived from the leased assets.
The Group has entered into rental leases on its investment property portfolio consisting mainly of commercial properties. These leases have terms of between 1 and 105 years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions.
The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:
2023£’000 2022£’000
Within one year 959 973
Second year 854 875
Third year 756 801
Fourth year 674 716
Fifth year 624 645
After five years 9,327 9,530
13,194 13,540
32. CONTINGENT LIABILITIES AND POST BALANCE SHEET EVENTS
Bank Guarantees
Bank guarantees have been issued by the bankers of Black Wattle Colliery (Pty) Limited on behalf of the company to third parties. The guarantees are secured against the assets of the company and have been issued in respect of the following:
2023£’000 2022£’000
Rail siding 43 49
Rehabilitation of mining land 1,614 1,715
Water & electricity 41 47
Contingent tax liability
The interpretation of laws and regulations in
Black Wattle Colliery (Pty) Ltd is currently involved in a tax dispute in
Company balance sheet
at 31 December 2023
Notes 2023£’000 2022£’000
Fixed assets
Tangible assets 35 99 98
Investment in joint ventures 36 665 665
Other investments 36 20,614 18,946
21,378 19,709
Current assets
Debtors – amounts due within one year 37 3,820 2,754
Debtors – amounts due in more than one year 37 1,280 1,159
Bank balances 1,651 7,928
6,751 11,841
Creditors – amounts falling due within one year 38 (782) (2,514)
Net current assets 5,969 9,327
Total assets less current liabilities 27,347 29,036
Creditors – amounts falling in more than one year 38 - (9)
Net assets 27,347 29,027
Capital and reserves
Called up share capital 24 1,068 1,068
Share premium account 258 258
Other reserves 1,027 1,027
Retained earnings 33 24,994 26,674
Shareholders’ funds 27,347 29,027
The loss for the financial year, before dividends payable, was £78,000 (2022: profit of £15,415,000)
The company financial statements were approved and authorised for issue by the board of directors on 22 April 2024 and signed on its behalf by:
A R Heller G J Casey Company Registration No. 00112155
Director Director
Company statement of changes in equity
for the year ended 31 December 2023
Share Share Otherreserve£’000 Retainedearnings£’000 Shareholdersfunds£’000
capital£’000 premium£’000
Balance at 1 1,068 258 622 12,967 14,915
January 2022
Dividends - - - (1,708) (1,708)
paid
Share options - - (142) - (142)
cancelled
Share options - - 547 - 547
issued
Profit and
total
comprehensive - - - 15,415 15,415
income for
the year
Balance at 1 1,068 258 1,027 26,674 29,027
January 2023
Dividends - - - (1,602) (1,602)
paid
Profit and
total
comprehensive - - - (78) (78)
income for
the year
Balance at 31 1,068 258 1,027 24,994 27,347
December 2023
Company accounting policies
for the year ended 31 December 2023
The following are the main accounting policies of the company:
Basis of preparation
The financial statements have been prepared in accordance with Financial Reporting Standard 100 Application of Financial Reporting Requirements and Financial Reporting Standard 101 Reduced Disclosure Framework. The principal accounting policies adopted in the preparation of the financial statements are set out below.
The financial statements have been prepared on a historical cost basis, except for the revaluation of leasehold property and certain financial instruments.
Going concern
Details on the Group’s adoption of the going concern basis of accounting in preparing the annual financial statements can be found on page 70.
Disclosure exemptions adopted
In preparing these financial statements the company has taken advantage of all disclosure exemptions conferred by FRS 101 as well as disclosure exemptions conferred by IFRS 2, 7, 13 and 16.
Therefore these financial statements do not include:
• certain comparative information as otherwise required by IFRS;
• certain disclosures regarding the company’s capital;
• a statement of cash flows;
• the effect of future accounting standards not yet adopted;
• the disclosure of the remuneration of key management personnel; and
• disclosure of related party transactions with the company’s wholly owned subsidiaries.
In addition, and in accordance with FRS 101, further disclosure exemptions have been adopted because equivalent disclosures are included in the company’s Consolidated Financial Statements.
Dividends received
Dividends are credited to the profit and loss account when received.
Depreciation
Provision for depreciation on tangible fixed assets is made in equal annual instalments to write each item off over its useful life. The rates generally used are:
Office equipment 10 – 33 percent
Joint ventures
Investments in joint ventures, being those entities over whose activities the Group has joint control as established by contractual agreement, are included at cost, less impairment.
Other Investments
Investments of the company in subsidiaries are stated in the balance sheet as fixed assets at cost less provisions for impairment.
Other investments comprising of shares in listed companies are classified at fair value through profit and loss.
Foreign currencies
Monetary assets and liabilities expressed in foreign currencies have been translated at the rates of exchange ruling at the balance sheet date. All exchange differences are taken to the profit and loss account.
Financial instruments
Details on the Group’s accounting policy for financial instruments can be found on page 76.
Deferred taxation
Details on the Group’s accounting policy for deferred taxation can be found on page 78.
Leased assets and liabilities
Details on the Group’s accounting policy for leased assets and liabilities can be found on page 77.
Pensions
Details on the Group’s accounting policy for pensions can be found on page 76.
Share based remuneration
Details on the Group’s accounting policy for share based remuneration can be found on page 76. Details of the share options in issue are disclosed in the directors’ remuneration report on page 42 under the heading share option schemes which is within the audited part of this report.
33. PROFIT & LOSS ACCOUNT
A separate profit and loss account for
Details of share capital are set out in note 24 of the Group financial statements and details of the share options are shown in the Directors’ Remuneration Report on page 42 under the heading Share option schemes which is within the audited part of this report and note 26 of the Group financial statements.
34. DIVIDENDS
Details on dividends can be found in note 9 in the Group financial statements.
35. TANGIBLE FIXED ASSETS
Leasehold Motor Officeequipment£’000 Total£’000
Property£’000 Vehicles£’000
Cost at 1 January 45 104 44 193
2023
Additions - 27 8 35
Cost at 31 45 131 52 228
December 2023
Accumulated
depreciation at 1 - 83 12 95
January 2023
Charge for the - 17 17 34
year
Accumulated
depreciation at 31 - 100 29 129
December 2023
Net book value at 45 31 23 99
31 December 2023
Net book value at 45 21 32 98
31 December 2022
Leasehold property consists of a single unit with a long leasehold tenant. The term remaining on the lease is 36 years. Included in Motor Vehicles is a right-of-use asset with a net book value of £9,000.
36. INVESTMENTS
Jointventuresshares£’000 Shares in Other Total£’000
subsidiaries£’000 investments£’000
Net book
value at 1 665 6,356 12,590 18,946
January
2023
Invested
during the - - 1,189 1,189
year
Repayment - - (377) (377)
Gain in - - 856 856
investments
Net book
value at 31 665 6,356 14,258 20,614
December
2023
Investments in subsidiaries are detailed in note 15. In the opinion of the directors the aggregate value of the investment in subsidiaries is not less than the amount shown in these financial statements.
Other investments comprise of £14,258,000 (2022: £12,590,000) shares in listed companies.
37. DEBTORS
2023£’000 2022 £’000
Amounts due within one year:
Amounts due from subsidiary undertakings 1,664 1,079
Other debtors 188 237
Joint venture 1,844 1,379
Prepayments and accrued income 124 59
3,820 2,754
Amounts due in more than one year:
Deferred taxation 1,280 1,159
1,280 1,159
Amounts due within one year are held at amortised cost. The Group applies a simplified approach to measure the loss allowance for trade receivables using the lifetime expected loss provision. The Group applies a general approach on all other receivables. The general approach recognises lifetime expected credit losses when there has been a significant increase in credit risk since initial recognition. The company has reviewed and assessed the underlying performance and resources of its counterparties including its subsidiary undertakings and joint ventures.
38. CREDITORS
2023£’000 2022£’000
Amounts falling due within one year:
Amounts due to subsidiary undertakings 63 15
Joint venture 33 120
Other taxation and social security 76 64
Other creditors 104 71
Lease Liabilities 9 11
Accruals and deferred income 497 2,233
782 2,514
Amounts falling due in more than one year:
Lease Liabilities - 9
Lease liabilities comprise of leases on Motor vehicles with remaining leases of less than 1 year. With the exception of short-term leases and leases of low-value underlying assets, each lease is reflected on the balance sheet as a right-of-use asset and a lease liability.
39. RELATED PARTY TRANSACTIONS
At 31 During the year
December
Costs
At 31 December Amounts owedby recharged /accrued Cash paid (to)/ by
related party£’000 (to)/ by related related party£’000
party£’000
Related party:
Black Wattle Colliery (995) (850) -
(Pty) Ltd (note (a))
Ninghi Marketing (102) - -
Limited (note (b))
As at 31 December (1,097) (850) -
2023
Black Wattle Colliery (145) (972) 1,464
(Pty) Ltd (note (a))
Ninghi Marketing (102) - -
Limited (note (b))
As at 31 December (247) (972) 1,464
2022
(a) Black Wattle Colliery (Pty) Ltd – Black Wattle Colliery (Pty) Ltd is a coal mining company based in
(b) Ninghi Marketing Limited – Ninghi Marketing Limited is a dormant coal marketing company incorporated in
Black Wattle Colliery (Pty) Ltd and NInghi Marketing Limited are subsidiaries of the company.
In addition to the above, the company has issued a company guarantee of R20,061,917 (2022: R20,061,917) (South African Rand) to the bankers of Black Wattle Colliery (Pty) Ltd in order to cover bank guarantees issued to third parties in respect of the rehabilitation of mining land.
A provision of £102,000 has been raised against the amount owing by Ninghi Marketing Limited in prior years as the company is dormant.
In 2012 a loan was made to one of the directors, Mr A R Heller, for £116,000. Further details on the loan can be found in note 28 of the Group financial statements.
Under FRS 101, the company has taken advantage of the exemption from disclosing transactions with other wholly owned Group companies. Details of other related party transactions are given in note 28 of the Group financial statements.
40. EMPLOYEES
2023£’000 2022£’000
The average weekly numbers of employees of the company
during the year were as follows:
Directors & administration 5 5
Staff costs during the year were as follows:
Salaries 1,350 3,264
Social security costs 326 580
Pension costs 125 21
Share based payments - 2,220
1,801 6,085
