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1
Supporting the
regional transition
to a low-carbon
economy
Annual Report and Financial Statements
For the Year Ended 31 December 2021
Stock code: CORO
CORO IS A SOUTH EAST ASIAN
ENERGY COMPANY SUPPORTING
THE REGIONAL TRANSITION TO A
LOW-CARBON ECONOMY.
Blending a strong cash generating gas
portfolio with early stage but growing
renewables exposure.
www.coroenergyplc.com
INVESTMENT CASE
Blended renewables and gas portfolio underpinned by strong
regional energy demand growth
Electricity demand forecast to increase 152% by 2050
O Read more in the Market Review on pages 4 to 5
Building the clean energy portfolio
Ion Ventures investment made in November 2020 – subsequent
implied investment valuation increased by 300%
Acquisition of early stage Philippines renewables portfolio in
March 2021
Initiation of Vietnam solar rooftop project
O Read more in the Building a Clean Energy Portfolio
on page 10
Unique offering in the London marketplace
1. Revenue generating gas portfolio
2. Low-carbon investment strategy
Contents
STRATEGIC REPORT
Statement from the Chairman
and Chief Executive Officer
Market Review
Our Markets
Business Model
Our Strategy
Building and Developing our
Clean Energy Portfolio
Operational Review
Financial Review
Managing Risk
ESG Statement of Intent
ESG
Directors’ Statement under
s.172(1) CA 2006
GOVERNANCE
Corporate Governance
Statement
Board of Directors
Corporate Governance
Framework
HSE Report
2
4
6
8
9
10
12
15
17
21
22
23
24
26
28
31
3. Significant upside – early stage development entry point
Directors’ Remuneration Report 33
Directors’ Report
Statement of Directors’
Responsibilities
Independent Auditors’ Report
FINANCIAL STATEMENTS
Consolidated Statement of
Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
Company Balance Sheet
Company Statement of Changes
in Equity
Company Statement of
Cash Flows
Notes to the Financial
Statements
Company Information
O Read more online at
coroenergyplc.com
35
36
37
42
43
44
45
46
47
48
49
82
01
Annual Report and Accounts for the year ended 31 December 2021
Statement from the Chairman
and Chief Executive Officer
JAMES PARSONS
Executive Chairman
MARK HOOD
Chief Executive Officer
Chairman’s Prelude
Coro Energy plc is a micro cap company with gas production, gas
reserves and a growing clean energy portfolio. Underpinned by
its strong Italian production and four institutional lenders, Coro’s
shareholders are uniquely exposed to a leveraged play on the oil price.
Our strategy remains to monetise the Duyung PSC, use the Italian cash
flows, which more than covers the Company’s G&A costs, and invest
selectively in South East Asian renewables and high graded Italian
production enhancement opportunities.
Recent volatility in energy markets have presented huge opportunity
to Coro with the re-birth of the Italian portfolio alongside a significant
uplift in the core NAV of its position in the Duyung PSC. It is in this
context that we are delighted to present our annual report and
accounts to shareholders.
02
The Company is
positioned for a
hugely exciting
2022, with a broad
opportunity set
of clean energy
investments and
high-quality gas
assets.”
MARK HOOD
Chief Executive Officer
The global energy sector continued
to be disrupted by the COVID-19
pandemic throughout 2021.
Although oil and gas prices
recovered during the year, investor
sentiment towards junior oil and
gas companies lagged somewhat;
however, post balance sheet end,
we see that period changing and
interest growing. The climate
change arena, widely published
during the COP26 conference in
Glasgow, continued to see increased
interest with the global energy
transition from fossil fuels to clean
energy sources taking priority.
Introduction of the Philippines
renewable portfolio in Q1 2021
alongside the strategic investment
in late 2020 in ion Ventures
Holdings Limited ("ion Ventures"),
initiated Coro's expansion to clean
energy and delivered a large
portfolio of early stage development
clean energy assets.
It also introduced two new and
exciting markets for Coro Energy:
the Philippines, where we gained
access to several projects including
a 100 MW solar project and a
100 MW onshore wind project; and
Vietnam, where we gained access
Stock code: COROCoro Energy PLC to up to 300 MW of solar projects.
We were also delighted to welcome
Mark Hood, Chief Executive Officer,
and Michael Carrington, Chief
Operating Officer, to the team.
Duyung
Global electricity demand is set
to double by 2050, while regional
electricity demand in Philippines,
Singapore and South East Asia is
currently forecast to increase by
154%, 56% and 140% respectively
to 2050. Our Duyung gas asset,
with its close proximity to the West
Natuna Transportation System that
delivers gas directly to Singapore,
has the potential to play a key role in
satisfying this demand.
While COVID-19 slowed progress
in 2021 for the operator (Conrad
Energy Asia), we expect several
key commercial milestones to be
delivered in 2022. These include
an approval of an updated Plan of
Development ("PoD") and signature
of a Gas Sales Agreement ("GSA"),
during 2022.
Italy
In May 2021, we signed a Sale and
Purchase Agreement ("SPA") with
Dubai Energy Partners, Inc., a US-
based operator of producing oil
and gas assets. The SPA required
completion of regulatory approval
within a nine-month period which
expired on 26 February 2022.
In March 2022, post-period end,
the final decision was made to
terminate the SPA in light of strong
gas prices in Italy, which rose from
€0.17 per scm during the pandemic
to over €1.5 per scm, due to renewed
post-lockdown demand and the
Russian invasion of Ukraine. As at
the 31 December 2021, the Board
of Directors remained committed
to the divestment and the criteria
within IFRS 5 were met and the
Italian business is therefore treated
in the 2021 financial statements as a
disposal group.
The Company’s growth strategy
continues to focus on energy
transition opportunities, and our
Italian portfolio provides a robust
financial platform for future
deployment into renewable assets.
We predict, based upon a gas price
of €1 per scm, strong returns of
approximately €5m free cash flow
on an annualised basis, which will
support our growth opportunities
in South East Asia and maximise
shareholder value in the near-term.
Renewables
With the increase in the energy
demand and requirement for energy
security in the region, Coro made the
decision to acquire an early stage
portfolio of clean energy projects.
Operationally, despite COVID-19
restrictions, we managed to achieve
a number of key milestones in 2021,
including the incorporation of the
Philippines company, completion of
the desktop survey for our 100 MW
wind project in the Philippines and
the signature of a joint venture
partnership agreement with
Vin Phuc Electrical Mechanical
Installation Co Ltd. This will allow for
the transfer of their project portfolio
of rooftop solar in Vietnam to Coro,
with the first pilot project due to be
developed in 2022.
Ion Ventures
In February 2021, we saw ion
Ventures, in which we have a 20.3%
interest, partner with LiNA Energy,
a solid-state battery technology
developer, to conduct a successful
trial of LiNA’s proprietary solid-state
sodium battery platform with a
view of supporting further trials
to eventually deploy the battery
into the grid storage market in
the coming years. In July 2021, ion
Ventures formed a new partnership
with GLIL Infrastructure Fund
LLP, who confirmed a £150m
commitment of capital into a new
vehicle, Flexion Energy Holdings UK
Ltd, with ion Ventures transferring
their existing UK grid scale energy
storage portfolio into Flexion.
ion Ventures' successes continue
to demonstrate the ability of Coro
leadership to identify opportunities
in the market and to act as
appropriately to strengthen the
portfolio and our returns.
Corporate
We raised net proceeds of US$5.5m
during February and March 2021
and, as previously reported, the cash
balance at the 12 of April 2022 was
US$2.8m.
Outlook
2021 was a pivotal year for Coro in
its ongoing transition to becoming
a regionally focused low-carbon
energy company. The diversity and
breadth of assets which we now
operate provides a platform from
which to grow the Company and
we foresee a very exciting future for
Coro and its stakeholders.
As the local and global restrictions
brought about by COVID-19 start
to ease, we have resumed travel to
our local projects to directly oversee
their progress and work with the
local teams to support and to share
knowledge and experience.
We are all extremely confident
in what we can achieve in 2022,
including our first rooftop solar
Project in Vietnam becoming
revenue generative. We would like
to thank shareholders for their
support in 2021 and look forward
to meeting many of you in person
this year.
We wish all shareholders a safe and
prosperous 2022.
JAMES PARSONS
Executive Chairman
MARK HOOD
Chief Executive Officer
03
STRATEGIC REPORTwww.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021 Stock code: CORO
Market Review
WHY RENEWABLE ENERGY?
Global transition
to low carbon
energy system
well underway.
Electrification of
transport, residential
homes and
industry will require
new investment
in electricity
generation and
battery storage.
Cost of deploying
renewables has fallen
significantly due to
improvements
in technology.
Share of Global Primary Energy Supply
50%
40%
30%
20%
10%
0%
1995
2000
2005
2010
2015
2020
Renewables
Natural gas
Hydroelectricity
Oil
Coal
Nuclear energy
Source: BP World Energy Outlook 2021
Global weighted-average LCOE from newly commissioned, utility-scale
solar and wind power technologies, 2019–2020
Solar
Photovoltaic
Offshore
wind
Onshore
wind
Concentrating
solar power
-7%
-9%
-13%
-16%
0%
5%
10%
15%
20%
Source: IRENA Power Generation Costs Report 2021
Levelised Cost of Energy* (USD per Kilowatt Hour)
0.4
0.3
0.2
0.1
0.0
2010
2019
Solar PV
Offshore wind
Onshore wind
Source: IRENA Power Generation Costs Report 2021
04
Coro Energy PLC
www.coroenergyplc.com
WHY SOUTH EAST ASIA?
Electricity
demand forecast
to rise, driven
by increasing
population and
growing wealth.
Projected Asean GDP Growth, 2020–2040
20,000
15,000
10,000
5,000
D
S
U
N
O
I
L
L
I
B
I
S
T
R
A
T
E
G
C
R
E
P
O
R
T
Utilisation of local
resources including
wind and solar
to reduce energy
imports and
decrease reliance
on fossil fuels
Coal still dominant
and renewables
penetration low.
Governments
noted to be
shelving coal
projects in favour
of clean energy
substitutes.
2020
2025
2030
2035
2040
Brunei
Philippines
Cambodia
Singapore
Indonesia
Thailand
Lao PDR
Vietnam
Malaysia
Myanmar
Source: : BP Statistical Review 2021
Electricity Demand (Terawatt Hours)
2,000
1,600
1,200
800
400
0
2010
2018
2020
2025
2030
2035
2040
Forecast New Installed Capacity Annually to 2040 (Gigawatts)
Coal
Gas
Renewables
0
2
4
6
8
10
Source: : BP Statistical Review 2021
Renewables as a Share of Primary Energy Supplied – 2020
UK
Vietnam
Thailand
Philippines
Malaysia
Indonesia
0%
6%
12%
18%
24%
30%
>36%
Coal as a Share of Primary Energy Supplied – 2020
UK
Vietnam
Thailand
Philippines
Malaysia
Indonesia
0%
10%
20%
30%
40%
50%
60%
70%
Source: BP Stastical Review of World Energy 2020
Annual Report and Accounts for the year ended 31 December 2021
05
STRATEGIC REPORT
Our Markets
SOUTH EAST ASIA
Growth remains high in the region
Emerging and developing Asian economies are
projected to continue to grow significantly above
the global average by 5.9% in 2022 and 5.8% in 2023,
according to the International Monetary Fund.
Electricity demand is rising as the population
grows and accumulates more wealth and a
middle class emerges.
As the economy in South East Asia continues to
recover post COVID-19 so does the demand for
electricity grow. Electricity consumption grew by
3.8% in 2021 YoY and will grow by 5% per annum in
2022–2024.2
Moreover, Vietnam’s electricity demand increased
by 10% p.a. from 2014–2019 and Electricity Vietnam
(EVN) estimates the country must triple installed
capacity by 2030 from c. 50G W to 130 GW.
Renewables and Energy Storage
Cost of deploying renewables in country
is attractive
The levelised cost of energy takes into account the
cost of electricity production over an asset’s lifetime.
Renewable assets have an indicative project
lifespan of 25 years, significantly longer than many
hydrocarbon projects. The levelised cost of solar and
wind projects in South East Asia are significantly
lower than in many parts of the world, and look set
to continue to decrease.
Natural Landscape offers
significant benefits
Typical 150 MW solar project should produce at least
150 GWh of electricity a year – in South East Asia
this is significantly higher, due to higher levels of
irradiation.
“Vietnam has tremendous natural endowments:
4 to 5 kilowatt-hours per square meter for solar and
3,000 kilometres of coastlines with consistent winds
in the range of 5.5 to 7.3 meters per second.” 1
1 MW of peak power capacity in a solar plant in
Vietnam has the potential to produce 1.5 times
more energy than in the UK.
The Philippines also has an abundance of solar and
wind especially near its coastline making it the ideal
country for renewables growth.
1. Source: McKinsey
06
Predicted GDP growth in
SE Asia post COVID-19
%
5.0
5.0
2.5
2021
2022
2023
(Source: World Bank)
Predicted growth in
energy demand...
%
5.0
5.0
3.8
2021
2022
2023
(Source: IEA)
High cost of coal and LNG in South East Asia
accelerating the use of renewables as part of
the energy mix
At the start of 2022, Indonesia, the world’s largest coal
exporter, has placed a temporary ban on exports of the
fuel to avoid outages in domestic power stations. Coal
prices were 59% higher than two months earlier, close to
the previous peak on 15 October 2021. This high cost of coal
is accelerating the need for energy security and the need
for local energy sources, which renewables can fill.
Renewables in Vietnam are set to have a similar share
to coal in the energy mix by 2024 (at 42% and 43%
respectively).
2. Source: IEA
Stock code: COROCoro Energy PLC Favourable Regulation
A number of regions within South East Asia offer favourable regulation for renewables with preference
into the grid given in some countries like the Philippines.
At the end of 2021, spot prices for LNG
Reached over US$42 per
MMBTU in Asia...
...the equivalent of
~US$0.26 per KWH of
electricity 1.5x the UK Price
and only enough to power
an oven for 30 mins.
ITALY
Italian portfolio
In Italy, the consumption of natural gas peaked in
2020 at 74 billion cubic meters (source: Statista).
Going forward, consumption is set to remain the
same or gradually decline by 2030, with supply set
to decline more steeply, creating an increased gap
in supply and demand, potentially pushing up
prices even further.
Gas prices in Italy have been steadily climbing as
demand increased post COVID-19, with electricity
and gas rising 94% and 131% respectively in the
first quarter of 2022 compared to 2021. Europe
as a whole is facing soaring power prices as it,
along with the global economy, recovers from
the pandemic. While natural reserves on the
continent are worryingly low, Italy relies heavily on
imported gas.
Italy has one of the highest uses of gas within
their energy mix, with gas constituting 40% of all
energy consumption.
Primary energy consumption is measured in
terawatt-hours (TWh). Here an inefficiency factor
(the "substitution" method) has been applied for
fossil fuels, meaning the shares by each energy
source give a better approximation of final
energy consumption.
Energy consumption by source, Italy
2,000
1,500
1,000
500
0
Other
renewables
Biofuels
Solar
Wind
Hydropower
Nuclear
Gas
Coal
Oil
1970
1980
1990
2000
2010
2020
Source: BP Statistical Review of World Energy
Note: “Other renewables” includes geothermal, biomass and waste energy.
OurWorldInDate.org/energy
07
STRATEGIC REPORTwww.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021 Business Model
Our Strengths
Entrepreneurial team:
Small, entrepreneurial management team with "an eye for a deal"
Network and presence in region:
Board, Management and local teams are well-connected in the region
Access to capital:
Supported by key cornerstone institutional investors and a Board with a
track record of financing energy investments
Creating shareholder value:
Board who are experienced at creating shareholder value, including
through M&A activity
ESG at our Core:
Clear vision of leading the energy transition to renewables in South East
Asia. ESG strategy aligned with appropriate Sustainable Development
Goals (“SDGs”)
Our Market – South East Asia
Develop
existing assets:
• Duyung
• Italy
• Vietnam
• Philippines
• ion Ventures
Grow asset
portfolio:
• Acquisition of initial
renewables portfolio
announced Q1 2021
• Mature existing project
pipeline and continue deal
origination
Value
Creation:
• Reinvest earnings to
create a self-sustaining,
mid-tier energy company
• Create value for
shareholders
Operate
Sustainably:
• Bring benefit to the
countries we operate in
• Limit impact on the
environment
• Development of local
community projects
08
Stock code: COROCoro Energy PLC Our Strategy
Coro’s vision is to build a hybrid “develop, build, own, operate” model,
seeking strategic investments to increase stakeholder value, while
developing energy projects which will provide continued value at all
parts of the asset lifecycle.
Strategic Priorities
1. Vision in supporting the South East Asian
energy transition
GDP in the ASEAN region is forecast to more than double to US$20tn by
2040, resulting in increasing energy demand. To meet emissions targets
and boost energy independence and security, significant investment in
clean energy and energy storage is planned in South East Asia – up to
US$500bn by 2040. Further investment in energy sources, (including both
renewables and gas), that complement the energy mix and reduce the
dependence of the region on higher polluting fossil fuels is necessary.
Coro’s vision and contribution to this reduction in greenhouse gases is
evidenced by our recent investments in assets and businesses that are
supporting the energy transition in the region. Understanding the role gas
has in the energy transition validates our strategy to continue to remain
open to opportunities in the sector, identifying assets where there is
compelling commercial logic.
2. Use the Duyung PSC as a platform
for regional growth
Coro has a 15% interest in the non-operated Duyung PSC, which contains
the Mako gas field, an independently certified 2C gas resource of 495 Bcf
(gross, full field). The Mako field is one of the largest gas fields to be
discovered in the prolific West Natuna basin, and its proximity to
infrastructure and markets underpins Coro’s value.
3. Review opportunities and their market impact
In reviewing opportunities, Environmental, Social, and Governance (ESG) and
market impact are at the core of our decision-making process. One of Coro's
objectives for 2022 is to set up a clearly defined ESG strategy for the coming
five years, aligning itself to appropriate Sustainable Development Goals.
Duyung and our Italian gas portfolio present the Company with massive
potential for growth, strengthening our position as a serious energy
transition prospect backed with our focus on renewables in a high GDP
growth area.
4. Results driven, ensuring value for Coro shareholders
Utilising our shareholders' capital to increase growth allows us to allocate
funds only to those investments where there is a clear path to monetisation
for our investors. We envisage reinvesting earnings to achieve our vision of
building a mid-tier South East Asian energy company.
5. Investing in further growth
Revenue generated by our Italian portfolio will also be used for the
further growth of our South East Asian renewables portfolio.
09
STRATEGIC REPORTwww.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021 Building and Developing our
Clean Energy Portfolio
Our strategy on the energy transition is to transition from black (oil, coal) to blue (gas) and then ultimately green
(renewables).
The introduction of our Philippines renewable portfolio in March 2021 has formed the backbone of our pre-
development portfolio. Understanding the regulatory environment and energy priorities per country in South East
Asia has meant that we have the pick of some of the best projects for our size in countries that are supportive of
the energy transition and where energy security is a priority. You can find out more about why South East Asia is
such a compelling business case for renewables in Our Markets section of this report which is on pages 6 to 7.
Our first projects span 150 MW Rooftop Solar in Vietnam, 100 MW onshore Wind and 100 MW Solar project in the
Philippines.
Vietnam Timeline
Roof-top solar Assets Vietnam
Binding joint terms
announced November 2021
Joint development of
rooftop solar through
SPV (Coro 85%; Vinh Phuc
Energy (“VPE”) 15% carried)
150 MW project portfolio
into SPV
Coro to provide initial pre-
development US$1.8m for
3 MW pilot project
VPE are one of the leading
Vietnamese solar asset
developers, with an
experienced team and
extensive experience
deploying solar PV systems
Attractive
Power Purchase
Arrangements (PPAs)
• “Take or pay” arrangements
• 20–25 years expected
duration
10
Strategic
Rationale
• Develop, build, own, operate
• Access to Vietnam rooftop
Photovoltaic (PV) market
• Leverage local expertise of
established industry player
• Low-risk entry, quick
revenue generation
Tax
Incentives
• Preferential rates and
tax holidays
• Import duty and
VAT relief
Drivers of Rooftop
Solar Growth
• Large electricity demand
from manufacturing
• Attractive IRRs
Stock code: COROCoro Energy PLC PHILIPPINES
Our Philippines portfolio
consists of an early stage
100 MW
Solar project and a 100 MW
onshore wind project.
ITALY
Our Italian portfolio consists of six production
concessions and one exploration licence comprising
7.2. Bcf in 2P reserves and 36.8 Bcf in 2C resource.
The exploration licence is to be relinquished once the
remediation work on the land is completed.
Focus on energy storage:
Our investment in ion Ventures
Energy storage and other flexible energy solutions
underpin the global transition to a low-carbon energy
system. The ongoing rapid deployment of intermittent
electricity generation assets, such as wind and solar,
increases the volatility of electricity supply. This was
seen in February 2022 when the UK experienced some
of the worst storms in history and several areas were
without power and electricity for days. In addition,
the electrification of heating, cooling and transportation
will increase electricity demand and create new and
varied demand profiles. These trends point to an even
greater role for flexible energy solutions in order to
maintain a stable grid and ensure security of supply.
For example, in the UK, National Grid forecasts up to
10 GW of additional energy storage required by 2030,
compared to 1.3 GW of capacity currently installed
130 MW having been commissioned in 2021.
Energy storage, in the form of grid connected battery
systems, is one such solution. Battery systems can
draw electricity from the grid at times of high supply
and discharge at periods of peak demand. This allows
battery owners to benefit from price arbitrage in
wholesale energy markets by purchasing electricity at
very low prices during peak supply hours and selling
back to the grid at much higher prices during periods
of peak demand and/or low supply.
ion Ventures is a developer of these utility scale battery
systems, as well as other flexible energy solutions
suitable for smaller, off-grid and rural locations.
The market for flexible energy assets is growing
exponentially, with Bloomberg New Energy Finance
forecasting global spend of US$840bn on energy
storage assets by 2050.
Philippines wind and solar
11
STRATEGIC REPORTwww.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021 Operational Review
Gaffney, Cline and Associates (“GCA”) were engaged to prepare an updated
resource audit, taking into account the extensive data gathered during 2019’s
drilling programme, including the flow test conducted on the Tambak-1
well. GCA completed their audit in May 2020 and confirmed a significant
resource upgrade for the Mako gas field compared to their previous resource
assessment released in January 2019, as shown in the table below.
Contingent Resource
Estimates
January 2019
GCA Audit
May 2020
GCA Audit
Increase %
1C (low case)
2C (mid case)
3C (high case)
184
276
392
287
495
817
56
79
108
With the confirmation of the resource upgrade, the Mako gas field has,
on a 2C resource basis, been shown to be one of the largest gas fields ever
discovered in the West Natuna Basin.
The operator has now turned their focus to key commercial objectives,
which are necessary to advance the Duyung project to a Final Investment
Decision. This includes the submission of an updated Plan of Development
(“PoD”) to the Indonesian authorities – a necessary step given the
significant resource upgrade since the original PoD was approved in
early 2019. Gas Sales Agreement negotiations are also continuing, with
the operator targeting signature of a Gas Sales Agreement in 2022. These
negotiations, which we expect to be achieved during 2022, are taking
place against a positive backdrop of stabilising commodity markets and an
improving macroeconomic picture.
Duyung PSC
Summary
• Located in the prolific West
Natuna basin, Indonesia
• Operated by Conrad Asia Energy
Ltd
• Contains the Mako gas field,
a shallow gas accumulation
covering a large areal extent
• Six wells have been drilled on
the field including a two well
programme in 2019
• 79% upgrade in audited
2C resource announced in
2020, following 2019 drilling
programme
• Mako contains dry gas, no H2S,
minimal CO2, over 97% methane
• Potential for early
commercialisation due
to proximity to existing
infrastructure.
Despite the obvious challenges
posed by the COVID-19 pandemic
in 2020, the Duyung partners
were able to continue the positive
momentum generated by the
successful, two well appraisal drilling
programme undertaken in Q4 2019.
12
Stock code: COROCoro Energy PLC Italy
In May 2021, we announced that we
entered into a binding conditional
SPA with Dubai Energy Partners,
Inc. (“DEPI”) to dispose of our Italian
business through the sale of our
wholly owned subsidiary, Coro
Europe Limited. Post balance sheet,
the Company announced in March
2022, that DEPI was not able to
obtain the necessary government
approvals to satisfy the binding
conditions of the SPA. The Company
has therefore decided, on the back
of recent structural increases in gas
prices, to relaunch. At publication,
the expected annual free cash flow
from producing assets is expected to
be €5mio per annum based on the
price of €0.92scm and continued
strong production from Sillaro.
Operationally, gas prices in Italy
continued their upward trajectory
from 2020 to 2021 and post balance
sheet continued to rise. This
represented a close to doubling
of gas prices and provided a very
favourable economic backdrop
for the rejuvenation of our gas
producing portfolio.
Going forward, gas prices are expected to remain high into 2023 before
they start to dip slightly, meaning continued high revenue production from
our assets.
Concerning the licencing, the repurchase of 10% of the Bezzecca field from
Petrorep Italian Srl, was completed on 1 February 2021, taking Coro’s interest
to 100%.
The cost mitigating actions undertaken in 2020 continued in 2021,
maintaining the net cash outflow from operating activities from our Italian
business under control, €842k in 2021 vs. €1M in 2020. Our Sillaro field has
been producing since March 2022 and after a short suspension is back in
production. We plan to bring Bezzecca back on stream in due course.
Asset
Sillaro
Bezzecca
S. Alberto
Rapagnano
Casa Tiberi
2P Reserves
31 December
2020
(MMscm)
Production
2021
(MMscm)
Revisions
Recalculation
2021
(MMscm)
2P Reserves
31 December
2021
(MMscm)
61.9
64.8
58.9
23.2
2.2
211.0
–
–
–
(2.3)
(0.5)
(2.8)
–
–
–
0.1*
0.8**
–
61.9
64.8
58.9
21.0
2.5
209.1
* Internal recalculation of reserves due to new static pressure measurement.
** In consideration of the additional potential from a deeper producing level that will be opened
in 2022.
Sillaro
Field: Sillaro
Status:
producing
Cascina Castello
Field: Bezzecca
Status: shut
in for facilities
repair
Rapagnano
Field:
Rapagnano
Status:
producing
Sant’alberto
Field:
S. Maddalena
Status: field
development
13
Italian Portfolio (Production Licences)
STRATEGIC REPORTwww.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021 Operational Review
continued
Renewables
In 2021, we commenced work on
the development of our renewables
projects in the Philippines and
Vietnam. In the Philippines, we
set up the local company and a
desk-based wind measurement
tool, where initial results are
extremely encouraging.
In Vietnam, post our JV formation
with VPE, we have started work
on our pilot 3 MW rooftop solar
project. We are currently in the
pre-construction phase, which
will see us conclude engineering
and commence procurement,
with construction expected to
commence in Q3 and energised
before year end 2022.
Philippines
Our projects in the Philippines are
driven by an experienced in-country
team comprising of a board of
three Filipino national directors.
The board is supported by a further
team of six, fulfilling a range of
roles across technical, financial and
administration. The 100% subsidiary
of Coro Energy Plc is called Coro
Clean Energy Philippines Inc and
was established in August 2021.
The 100 MW wind project
commenced with desktop studies,
which were completed during 2021,
and confirm that transmission
capacity is available. We are exploring
different solutions for optimising grid
connections and transmission from
the wind and solar facilities.
We are also reviewing the potential
for a hybrid solution of wind, solar
and storage to smooth power
delivery and maximise capacity.
We are in the process of
constructing a met mast in the
Philippines in order to confirm
the meteorological conditions on
a wind farm location that shows
great promise. The met mast is
130m to provide information for
the latest wind turbines with hub
heights of 130m, which will produce
upwards of 6 MW. The site location
is favourable as it is approx. 600m
AMSL as a plateau within 2km of
the coast. We are also deploying a
LiDAR to the wind farm location to
further confirm our expectations of
wind conditions in the area.
Next steps for our wind project
include:
1. Service Contract Acquisition
2. Land Acquisition
100 MW utility scale solar
• 2 x Pre-development projects
approximately 6 months from
RTB status
• Currently prioritising land access,
PPA, Energy service contracts
• Management are targeting
IRR between mid-teen to
mid-twenties
• Potential to sell projects at RTB
(current market is c. US$200k
per MW)
100 MW utility scale onshore wind
• Pre-development project
approximately 12 months from
RTB status
•
12-month wind data collection
process initiated (Lidar
measurement campaign and
130m met mast currently under
engineering design)
• Annual production forecast
to above 400,000 MWh with
average wind speeds of >6m/s
and capacity factor in the range
of 40-50%
• Management are targeting
IRR between mid-teen to
mid-twenties.
14
Stock code: COROCoro Energy PLC Financial Review
A strategic fundraise
was completed
in March 2021,
positioning the
Company for future
growth, and to enable
the transition to a
low carbon energy
company.”
EWEN AINSWORTH
Chief Financial Officer
During 2021, the industry continued
to grapple with the challenges
caused by the pandemic and its
impact on the energy sector. We
maintained the lower cash burn
across all areas of the business,
benefiting from the actions taken in
2020. Energy prices in 2021 started on
an upward trajectory, which following
recent events in Ukraine have
recently achieved even higher levels.
A strategic fundraise which raised
net proceeds of £3.9m (US$5.3m) was
completed in March 2021, positioning
the Company for future growth,
and to enable the transition to a low
carbon energy company.
2021 RESULTS
The 2021 loss before tax from
continuing operations was US$6.4m
(2020: loss US$8.0m). The overall
loss before tax saw only a slight
increase of US$0.3m in general and
administrative (“G&A”) expenses
offset by a gain on foreign exchange
of US$2.2m (2020: loss US$1.1m)
due to the strength of the US dollar
against the Euro during the year,
resulting in the unrealised gain.
As noted above, we took decisive
action in 2020 to reduce our
overhead cost base in response
to the COVID-19 pandemic. These
cost savings have been sustained
during 2021.
In an announcement on the
27 May 2021, the Company signed
a conditional share purchase
agreement ("SPA") with Dubai Energy
Partners, Inc ("DEPI"), in respect
of the disposal by the Company
of its Italian portfolio to DEPI. As a
result, in accordance with IFRS 5
Non current assets held for sale and
discontinued operations, the assets
and liabilities of the Italian business
are classified as a disposal group
held for sale at the 31 December 2021.
The Italian business represents
a separate geographical area of
operation for the Group so remains
as a discontinued operation in the
statement of comprehensive income.
This is not withstanding the fact
that subsequent to the year end,
the sale process was terminated
and following a full review of the gas
assets in Italy, it was decided that
they would no longer be marketed
for sale; therefore, from the interims,
these operations will be reclassified
as continuing.
15
STRATEGIC REPORTwww.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021 Cash at Year End
£3,334
+00.0%
1
6
3
9
£
,
4
3
3
3
£
,
4
7
3
6
£
,
6
0
7
,
1
£
18 19 20 21
General & Administrative
Expenses ("G&A")
£3,276
+00.0%
2
0
1
,
5
£
5
1
8
4
£
,
6
7
2
3
£
,
2
4
9
2
£
,
18 19 20 21
GOING CONCERN
The Group and Company financial
statements have been prepared
under the going concern
assumption, which presumes that
the Group and Company will be
able to meet its obligations as
they fall due for the foreseeable
future. As stated in Note 2 of the
2021 financial statements, at
31 December 2021 the Group had
cash reserves of US$3.3m (excluding
cash recorded within assets of the
Italian disposal group held for sale).
Management have prepared a
consolidated cash flow forecast to
the end of June 2023 inclusive of the
Italian portfolio which is no longer
for sale and shows that the Group
has sufficient cash resources to
meet its obligations.
Further information relating to
going concern as the basis of
preparation is in Note 2 of the
financial statements.
The Group’s €22.5m Eurobond was
restructured following the year end
and now matures in April 2024.
EWEN AINSWORTH
Chief Financial Officer
Financial Review
continued
The 2021 loss before tax from
discontinued operations was
US$1.5m (2020: US$2.2m).
Production from the Italian gas
fields made a gross profit of
US$0.2m in 2021 compared to a loss
of US$0.2m in 2020.
The focus continued in 2021 on
minimising costs, with a further
reduction of US$0.2m in G&A and
other income of US$1.2m.
The accounting loss from
discontinued operations was
impacted by an IFRS 5 impairment
charge recorded against
non-current assets totalling
US$2.4m. No tax charge arose
in the year.
2021 FINANCIAL POSITION
The Group has a 20.3% interest
in ion Ventures and, as a result,
the Group is therefore deemed
to have significant influence over
ion. Accordingly, our investment
is classified as an investment in
associates on the Group balance
sheet. Our share of ion losses for
2021 was US$0.2m (2020: US$16k).
Intangible exploration and evaluation
assets relating to our 15% interest
in the Duyung PSC increased to
US$17.5m (2020: US$17.3m) reflecting
our share of the venture’s capital
expenditure for 2021.
We saw an increase in the closing
Eurobond liability to US$26.6m
across current and non-current
liabilities (2020: US$25.0m). This was
partly due to amortisation of the
bonds totalling US$4.5m, but was
also the result of weakening of the
Euro compared to the prior year.
Net liabilities of the Italian business,
treated as a disposal group held for
sale, totalled US$0.7m at year end
(2020: net assets of US$496k).
The Group ended the year
with net liabilities of US$5.5m
(2020: net liabilities US$4.9m).
16
Stock code: COROCoro Energy PLC Managing Risk
Our Approach to Risk Management
The Board of Directors recognises that an effective risk management framework is essential to safeguard the
Group’s assets and enable it to meet its strategic objectives. The Board takes overall responsibility for identification
and mitigation of risks, while the Audit Committee has delegated responsibility for reviewing and monitoring
the internal control and risk management systems on which the Group is reliant. In the Board’s judgement, the
following principal risks represent the biggest threat to the ability of the Group to deliver on its strategy.
Risk
Description and Impact
Mitigation
Status
Strategic risks
Availability of
funding
Coro’s asset portfolio does not yet generate the cash
necessary to grow the business at a rate commensurate
with its ambition and the Group will need to raise
additional funds to implement its strategy. The ability
of the Group to raise funds will depend on factors not
wholly within the control of management, including
general market sentiment and attitudes toward small-
cap energy companies. As a result, there can be no
assurance that the required funding will be available on
favourable terms, if at all. Failure to raise required funds
could have a material adverse effect on the Group’s
business, operating results and financial condition,
and may result in erosion of value for investors. Despite
increased revenue from Italian production, this risk has
increased due to the current global political instability
and availability of funding for small-cap firms.
Failure to
identify
suitable M&A
opportunities
and/or failure
to successfully
execute M&A
The Group’s strategy is to build an energy business
focused on the South East Asian market. To deliver on
this strategy, the Group needs to identify and execute
value-accretive acquisitions in the region and is actively
engaged in evaluation of individual assets as well as
asset portfolios. There is a risk that the Group fails to
identify suitable acquisition targets, or that deals cannot
be closed on assets deemed to be attractive. Failure to
identify and/or close M&A opportunities could lead to a
loss of confidence in the Group’s management, resulting
in poor share price performance and tightening of
funding availability, as well as depleting available cash
balances through unsuccessful business development
spend.
The Group’s strategic
focus on acquiring and
developing an asset
portfolio, which is aligned
with the ongoing energy
transition, partly mitigates
the risk posed by negative
sentiment towards the
future prospects for the
hydrocarbon industry.
Management also seeks to
mitigate this risk through
prudent management
of costs and rigorous
evaluation of investment
opportunities to ensure
these will be attractive
to investors in the debt
and capital markets.
Ultimately, the Group is
targeting self-sustaining
cash flow from its asset
portfolio.
The Group mitigates this
risk through employing
appropriately skilled
financial, technical
and operational staff/
consultants with
experience across
upstream oil and gas
and low-carbon energy
assets in South East Asia.
Potential opportunities
are evaluated based
on a range of criteria
both financial and non-
financial to ensure only
value-accretive assets
suitable for the Coro
business are acquired.
17
STRATEGIC REPORTwww.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021 Managing Risk
continued
Risk
Description and Impact
Mitigation
Status
Commodity
prices
The Group is exposed to risks arising from fluctuations
in the demand for, and price of, hydrocarbons. Oil
and gas prices depend on numerous factors over
which the Group does not have any control, including
global supply, international economic trends, currency
exchange fluctuations, inflation, consumption patterns
and global or regional political events.
Through its investment in ion Ventures, the Group is
indirectly exposed to the risk of fluctuation in wholesale
electricity prices, which impact the value of ion’s energy
storage assets.
This risk has increased as despite an overall increase in
energy prices, political instability could bring further
volatility in the year ahead.
Operational risks
Oil and gas
exploration
and
production
risks
Coro remains the operator of a portfolio of gas assets
in Italy. Through this portfolio, and our non-operated
interested in the Duyung PSC, Coro is exposed to a wide
variety of risks, including failure to locate hydrocarbons,
changes to reserve estimates or production volumes,
variable quality of hydrocarbons, weather impacts,
facility malfunctions, lack of access to appropriate skills
or equipment and cost overruns. Failure to effectively
manage these risks could lead to decreased cash
generation, lower profitability and a deterioration in
the financial position of the Group. This risk, however,
has decreased as high gas prices in Italy have brought
increased revenue in 2022 post balance sheet close.
For assets in the
production phase, the
Group mitigates this
risk through entering
into fixed price gas sales
agreements where
commercially acceptable.
In terms of evaluating
and sanctioning new
hydrocarbon or low-
carbon investments,
the Group adopts a
conservative price forecast
to ensure capital is
allocated to projects with
robust economics, even
in lower commodity price
environments.
The Group has extensive
experience operating
its existing asset base in
Italy, as well as assets in
South East Asia, and has
the right mix of technical,
financial and operational
skills necessary to
successfully develop
and produce oil and gas
safely and economically.
In non-operated joint
ventures such as Duyung,
the Group seeks to be
an active participant in
the key activities of the
venture, to the extent
possible under joint
operating agreements.
Key
18
Increase
Decrease
No change
Stock code: COROCoro Energy PLC
Risk
Description and Impact
Mitigation
Status
Health,
safety and
environmental
matters
Development and production of oil and gas involves
risks that may impact the health and safety of
personnel, the community and the environment.
Industry-wide operating risks include fire, explosions,
blow outs, pipe failures, abnormally pressured
formations and environmental hazards such as
accidental spills or leakage of petroleum liquids, gas
leaks, ruptures, or discharge of toxic gases. Failure to
manage these risks could result in injury or loss of
life, damage or destruction of property, and damage
to the environment. Losses or liabilities arising from
such incidents could significantly impact the Group’s
financial results. As we return to increased production in
our Italian portfolio, this risk has increased.
Changes
to law,
regulations or
government
policy, political
and emerging
market risk
Changes in law, regulations and/or government policy
may adversely affect Coro’s business. Examples include
changes to land access, the introduction of legislation
that restricts or inhibits exploration, development and
production of hydrocarbons, and unexpected changes to
subsidy regimes for low-carbon energy assets. Similarly,
changes to direct or indirect tax legislation may have an
adverse impact on the Group’s profitability, net assets and
cash flow. Further, the Group has expanded its footprint
in South East Asia where countries generally exhibit
emerging market characteristics such as less established
fiscal and monetary controls, laws, policies and regulatory
processes. The Group is exposed to the resultant risk of
being adversely affected by possible political or economic
instability in its countries of operation including, inter alia,
security risks, expropriation of assets, changes in mining
or investment policies, inconsistent interpretation of laws
and regulations including tax law, extreme fluctuations
in currency exchange rates and high rates of inflation.
All of these factors could materially adversely affect the
Group’s business, results of operations, financial condition
or prospects. Once again, political instability and threat of
whole regime changes has increased this risk.
The Group operates its
Italian assets and mitigates
these risks through a focus
on responsible operation,
ensuring close adherence to
all regulatory standards in
respect of Health, Safety and
Environment matters. This
includes regular inspection
and maintenance of all our
gas production facilities.
All Health, Safety and
Environment activities are
overseen by a dedicated
Board committee. Where
we are not the operator of a
venture, we seek to take an
active role in joint venture
management and operating
committees, and work with
the operators to foster a
culture of responsible asset
stewardship. Our renewed
sustainability strategy that
will be approved at board
level aligns us with relevant
Sustainable Development
goals to ensure that this
stewardship is achieved.
To mitigate these risks,
the Group employs staff
and professional advisers
with experience operating
in all the Group’s key
territories and continuously
monitors political, legal and
economic developments in
all its geographies. Active
dialogue is maintained with
local regulatory authorities
in the Group’s areas of
operation.
19
STRATEGIC REPORTwww.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021 Managing Risk
continued
Risk
Description and Impact
Mitigation
Status
Alignment
with joint
venture
partners
The Group seeks to
mitigate this risk through
appropriate diligence on
potential partners prior
to investing in a venture,
as well as through active
participation in the key
decisions of each project
to the extent permitted
by joint operating/
shareholder agreements.
Development of energy assets is commonly undertaken
with partners in order to spread risk and reduce upfront
capital commitments for each party. Coro is currently
party to a Joint Operating Agreement on the Duyung
PSC, a Joint Venture partnership with VPE in Vietnam
for the development of a rooftop solar portfolio and
a Shareholder Agreement for its investment in ion
Ventures. While these agreements are designed to
establish the rights and obligations of all parties, and
clarify governance arrangements for investees, there is a
risk that the priorities of our partners will not be aligned
with our own. This could lead to conflict between
partners and delays in development of projects,
resulting in variability in the Group’s forecast cash flows
and profitability. There are also risks associated with
the continuing ability of partners to fund their share
of expenditures where this is applicable, as it is on the
Duyung venture. Our partners are facing similar funding
challenges, hence we feel this risk has increased.
Dependence
on key
personnel
The future performance of the Group will, to a significant
extent, be dependent on its ability to retain the services
and personal connections or contacts of key personnel
and to attract, recruit, motivate and retain other suitably
skilled, qualified and industry experienced candidates
to form a high-calibre management team. Such key
personnel are expected to play an important role in the
development and growth of the Group, in particular by
maintaining good business relationships with regulatory
and governmental departments and essential partners,
contractors and suppliers. The loss of the services of any
key personnel may have a material adverse effect on the
business, operations, relationships and/or prospects of
the Group.
The Group seeks to
mitigate this risk through
structuring appropriate
incentive packages for
key executives and staff,
as well as providing a
challenging and enjoyable
work environment. The
Group’s key initiatives are
also managed internally
by teams, which mitigates
the risk posed by the loss
of any key management
personnel.
Key
20
Increase
Decrease
No change
Stock code: COROCoro Energy PLC
ESG Statement of Intent
Coro initiatives to incorporate
Environmental, Social, and
Governance ("ESG") criteria into our
operating framework reflect our
commitment to our shareholders,
partners, employees, and the
communities in which we operate.
As Coro progresses towards realising
our vision of building a mid-tier
South-East Asian energy company
that supports the regional transition
to a low carbon economy, we will
work to ensure ESG is rooted in our
systems, processes and decision-
making so it is a fundamental part
of how we do business. This will be
a long-term, continuous process of
aligning our operations and controls
with our values as a company.
Transparency and honesty to
our stakeholders will remain at
the centre of our ESG journey.
We are currently implementing
comprehensive policies and
management systems to govern
our operations and decision-
making across our business. We
are also working towards reporting
in compliance with the internally
recognised frameworks Global
Reporting Initiative ("GRI") and
the Taskforce for Climate-Related
Financial Disclosures ("TCFD") for
the calendar year 2023.
Progress on our
ESG Journey
In preparation for compliant
reporting to GRI and TCFD
standards, we conducted an internal
audit in Q4 2021 of the key ESG data
currently being collected. We have
begun putting in place processes
to ensure the data we collect is
accurate across all aspects of our
business and that it is in line with
our future goals.
We conducted an internal review
of our Material Topics with the
Management Team and plan to
expand and review this materiality
assessment with select stakeholders
during 2022 and 2023, to ensure we
are focusing on our partners and
local communities.
We are in the process of finalising
our ESG strategy, which will include
measurable targets and goals that
we can monitor and demonstrate
our commitment to delivering ESG
within our operating framework in a
way that is transparent and provides
for continuous improvement. We
plan to publish our ESG strategy
on our website in Q2 2022, once
approved by the Board.
Our ESG Intentions
We believe the Environmental,
Social and Governance facets of
ESG are intricately connected and
cannot be addressed in isolation.
We strive to conduct our business in
a holistic way that ensures each of
these elements are considered with
the objectives of minimising harm
and maximising benefits to the
Company, the environment and all
our stakeholders.
Our core areas of focus for the next
two years are:
• Safe and efficient production
from our Italian gas assets,
working on minimising our
environmental impact;
• Efficient design, installation and
operation of our wind and solar
renewable energy projects in
Vietnam and Philippines that
has minimal negative impact
on the local environment and
communities;
• Quantify, track and reduce
our Greenhouse Gas ("GHG")
emissions;
• Contribute to the long-term
economic benefit of local
communities by supporting
local content and diversity and
building local skills capacity;
• Be a partner of choice for our
employees and communities
through delivering consistent,
top quartile safety performance
and supporting health and
education in the communities in
which we work;
• Conduct our business with the
highest degree of ethics and
integrity by demonstrating
management commitment
to strong and transparent ESG
performance with zero tolerance
of bribery and corruption; and
• Build positive stakeholder
relationships for the long term.
Committed to a Journey of
Continuous Improvement
The Management and Board of
Coro is committed to this journey
of continuous improvement
and transparency, reporting its
performance and demonstrating
to Coro’s stakeholders it is a
responsible energy partner to
support South East Asia in their
transition to a low carbon economy.
21
STRATEGIC REPORTwww.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021 ESG
At Coro, we are conscious that
while our strategy is focused on
the energy transition, our assets still
give us exposure to gas. However,
as coal supply (the dominant energy
source in South East Asia) becomes
disrupted with Indonesia stopping
exports, it is clear the need for gas
which is 50% less carbon intensive
than coal is still apparent and
increasing.
During 2021 and early 2022, we
reviewed our existing ESG strategy
and engaged an experienced team
of ESG consultants to identify and
align our strategy to the appropriate
Sustainable Development Goals.
This work is ongoing and we look
forward to updating shareholders
on our progress. We will also be
engaging with our key stakeholders
assessing what is important to them
from an ESG standpoint.
While we fine tune our ESG strategy,
the core principles as below remain
in force across our operations.
Environment
We respect the environment in which
we operate and pledge to act with
consideration and minimal impact
on the natural world. We do business
under all appropriate international
and local environmental regulations.
As we expand and develop our
operations in South East Asia,
sensitivity around site selection both
in the development stage and, as
our assets reach final stage, sensitive
restoration is key for Coro.
Social
We treat our employees, partners
and in country hosts fairly and with
respect. We encourage diversity and
social change for good and have
been involved in several projects
in Italy over recent years, including
assisting with building a school in
the local area. As we expand on our
operations, our relationships with
local communities in which we
operate within South East Asia will
be a priority.
Governance
As a listed entity, we follow the
Quoted Companies Alliance
Corporate Governance Code
2018 ("QCA Code"), as well as the
regulations and best practice
guidance given by AIM and the FCA.
Our Board meets regularly to opine
on key strategic decisions and we
employ a company secretary who
records all meetings and (together
with our Nominated Adviser) assists
with guiding us and advising us on
all governance related matters.
22
Stock code: COROCoro Energy PLC Directors' Statement under s.172(1) CA 2006
Section 172 (1) of the Companies
Act 2006 obliges the Directors
to promote the success of the
Company for the benefit of the
Company’s members as a whole.
This section specifies that the
Directors must act in good faith
when promoting the success of
the Company and in doing so have
regard (amongst other things) to:
a. the likely consequences of any
decision in the long term;
b. the interests of the Company’s
employees;
c. the need to foster the Company’s
business relationship with
suppliers, customers and others;
d. the impact of the Company’s
operations on the community
and environment;
e. the desirability of the Company
maintaining a reputation for
high standards of business
conduct; and
f.
the need to act fairly as between
members of the Company.
The Board of Directors is collectively
responsible for formulating and
delivering on the Company’s
strategy. When faced with the
ongoing challenges in 2021 of the
COVID-19 pandemic, the Board and
Executive team continued to work
together to progress the growth
of the business as best as possible
despite the difficulties resulting
from the pandemic.
Some of the key decisions taken by
the Board in 2021, which we believe
served to promote the success of
the Company for the benefit of all
stakeholders, included:
• Acquisition of Global Energy
Partnership Limited in Q2 2021,
which gave access to several
renewable projects within South
East Asia including 100 MW solar
and 100 MW wind projects in the
Philippine.
• Established partnership with
ion Ventures (Coro has 20.3%
investment) and GLIL and
infrastructure investment fund
with £2.5bn funds backed by
Local Pensions Partnership and
Northern LGPs. GLIL committed
up to £150m of capital and ion
transferred current and new UK
business to a newly incorporated
vehicle, Flexion Energy Holdings
UK Limited.
• Broadening of our South East
Asian energy strategy: The
Directors continue to strongly
believe in the potential of South
East Asian energy markets,
where primary energy demand
is forecast to continue increasing
and where coal remains the
primary source of electricity
generation. The expected
reduction in coal’s share of the
energy mix in these growth
markets, to be replaced by gas
and cleaner renewable sources,
remains a key driver of the
Company’s strategy. Against this
backdrop of growth in primary
energy demand, a transition
to cleaner energy, and the
prevailing market conditions
limiting the Company’s ability
to pursue a purely hydrocarbon-
focused South East Asian energy
strategy in the near term, the
Board approved a broadening of
the Group’s focus beyond solely
hydrocarbons to specifically
include alternative, low-carbon
energy sources and related
technologies. This positions the
Group to continue to pursue
investment opportunities
that satisfy growing energy
demand in South East Asia, while
supporting the regional transition
to a low-carbon economy.
The Board places equal importance
on all shareholders and strives
for transparent and effective
external communications, within
the regulatory confines of an
AIM-listed company. The primary
communication tool for regulatory
matters and matters of material
substance is through the Regulatory
News Service (“RNS”). The Company’s
website is also updated regularly,
and provides further details on
the business, as well as links to
helpful content such as our latest
investor presentations. We also hold
investor events, which are open
to all shareholders and provide a
forum on our website for investors
to communicate any questions
or concerns to the Company.
Throughout 2021, we held several
Q&A sessions for investors, two virtual
conferences and interviews with
Proactive Investors. We also produced
videos where the management team
explained Coro’s strategy in more
detail to shareholders and potential
new investors.
Our employees are one of the
primary assets of our business and
are critical to the future success of
the Company. First and foremost,
the Directors strive to ensure a safe
working environment for all staff
and contractors, and we are proud
of our safety achievements in 2021.
We also seek to reward employees
with remuneration packages,
which align the interests of the
Company and its shareholders
with those of employees. We
believe we have achieved this
through the award of share options,
under the Company's Long Term
Incentive Plan, which values
medium to long-term performance
over short term achievements.
Employees are also provided with
challenging work and external
training opportunities to ensure
their continual development.
Conclusion
The Directors believe they have
acted the way they consider most
likely to promote the success of
the Company for the benefit of its
members as a whole, as required by
Section 172 (1) of the Companies Act
2006.
This Strategic Report was approved
by the Board on 27 June 2022 and
signed on its behalf by:
MARK HOOD
Chief Executive Officer
23
STRATEGIC REPORTwww.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021 Corporate Governance Statement
In 2020, the Board recognised the
prevailing global events caused
by the COVID-19 pandemic and
the downturn in global oil prices,
and, as a result, the Company
made the decision to implement
a cost-reduction programme,
which included changes to the
Board. During 2021, following
the acquisition of Global Energy
Partnership Limited and the
move to a strategy of investing
in renewable energy projects,
the Company strengthened its
executive position by appointing
Mark Hood as CEO and a member
of the Board in March 2021. Mark has
over 20 years’ experience in utility
scale energy projects at all stages of
development, asset transition, and
rejuvenating off track organisations
and projects.
The importance of engaging with
our shareholders continues, and the
Board strives to ensure that there
are numerous opportunities for
investors to engage with both the
Board and Executive team.
JAMES PARSONS
Executive Chairman
QCA Code – Application,
principles and disclosure
requirements
The Board of Directors of
the Company recognises
the importance of corporate
governance and applies the QCA
Code, which we believe is the
most appropriate governance
code for a company of our size
with shares admitted to trading
on the Alternative Investment
Market (“AIM”) of the London
Stock Exchange. The QCA Code
provides the Company with the
framework to help ensure that
a strong level of governance is
maintained, enabling the Company
to embed the governance culture
that exists within the organisation
as part of building a successful
and sustainable business for all its
stakeholders.
The QCA Code has ten principles
of corporate governance that the
Company has committed to apply
within the foundations of the
business, as summarised below.
Further disclosures regarding
the Company’s application of the
QCA Code can be found on the
Company’s website.
As Chairman of the Company, it is
my responsibility to work with my
fellow Board members to ensure
that the Company embraces the
highest standards of corporate
governance and to manage the
Board in the best interests of our
many stakeholders. The Board
shares my belief that practising
solid corporate governance is
essential for building a successful
and sustainable business, and our
commitment to good corporate
governance has allowed us to
build a healthy corporate culture
throughout the organisation.
The Company adopts the Quoted
Companies Alliance Corporate
Governance Code (2018) (the “QCA
Code”), which it still believes to be
the most appropriate governance
code for Coro. We report our
compliance with the QCA Code on
the Company’s website and in this
Annual Report.
The Company is developing its
growth strategy of seeking low
carbon energy investments in
South East Asia, together with its
existing interest in the Duyung
PSC. The Company is committed
to responsible and ethical business
practices when we make any
business decisions, at both Board
and operational levels. This is
particularly important to us as an
acquisitive business, and our culture
is something that we maintain and
closely monitor.
24
Stock code: COROCoro Energy PLC PRINCIPLES
CORO RESPONSE
Establish a strategy and business
model that promotes long-term
value for shareholders
Seek to understand and
meet shareholder needs
and expectations
Take into account wider
stakeholder and social
responsibilities and their
implications for long-term success
Embed effective risk
management, considering
both opportunities and threats,
throughout the organisation
Maintain the Board as a well-
functioning balanced team led by
the Chair
Ensure that between them the
Directors have the necessary
up-to-date experience, skills and
capabilities
Evaluate Board performance
based on clear and relevant
objectives, seeking continuous
improvement
Promote a corporate culture that
is based on ethical values and
behaviours
Maintain governance structures
and processes that are fit for
purpose and support good
decision-making by the Board
Communicate how the Company
is governed and is performing
by maintaining a dialogue with
shareholders and other relevant
stakeholders
The Group’s strategy and business model are outlined on pages 8 to 9.
While opportunities for in-person engagement with shareholders
have been restricted by the COVID-19 pandemic, the Group seeks to
engage with shareholders regularly through its Regulatory News Flow,
periodic online Question and Answer forums and preparation of investor
presentations, which are updated quarterly and available on the Group’s
website, and the Board looks forward to welcoming shareholders in
person to the 2022 General Meetings. It is hoped that more
face-to-face engagement will be possible during 2022.
The Group seeks to be a responsible corporate citizen in all its territories
of operation and has an “open door” policy internally where employees
can raise opinions and concerns to management. We are committed
to operating our business according to the highest international safety
and environmental standards. We strive to deliver lasting benefit to
the communities and environments where we work as well as our
shareholders, contractors and employees.
The Group has an effective risk management framework, which is subject
to oversight by the Audit Committee. See further details on page 17.
Refer to further discussion of the Board structure, composition and
processes on page 28.
The complementary skills and experience of our Board and management
team are included on pages 26 to 27.
Refer to a discussion of Board evaluation on page 29.
The Group’s employees are bound by a Code of Conduct, which sets forth
the standards expected by the Company. This includes a zero-tolerance
approach to bribery and corruption, and a commitment on the part of all
employees to a high level of honesty, care, fair dealing and integrity in the
conduct of Coro’s business activities. A Whistleblowing Policy is in place to
provide a framework for employees to call out unethical or illegal behaviour.
Refer to further discussion of the Group’s governance structures,
including matters reserved for the Board, on page 28.
The Group’s financial and operational performance are summarised in
the Annual Report and the Interim Report, with regular updates provided
to stakeholders in other forums through the year, including press
releases, investor events and regular updates to the Group’s website.
25
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021GOVERNANCE REPORT Board of Directors
MARCO FUMAGALLI
Non-Executive Director
Marco is a Founding Partner at
Continental Investment Partners SA,
a Swiss-based fund. Marco is a well-
known Italian businessman who was
a former Group Partner at 3i. He is
a qualified accountant and holds a
degree in Business Administration
from Bocconi University in Milan.
Marco is also a Non-Executive
Director of SourceBio International
Plc, Sound Energy plc and Echo
Energy plc.
JAMES PARSONS
Executive Chairman
MARK HOOD
Chief Executive Officer
James has over 25 years’
experience in the fields of strategy,
management, finance and
corporate development in the
energy industry. He started his
career with the Shell group where
he spent 12 years working across
Brazil, the Dominican Republic,
Scandinavia, the Netherlands and
London.
James is also Chairman at Ascent
Resources plc and Corcel plc.
James was previously Chief
Executive at Sound Energy Plc for
eight years, is a qualified accountant
and has a BA Honours in Business
Economics.
Mark is the co-founder of Global
Energy Partnership Ltd, now Coro
Asia Renewables Ltd.
He has over 20 years’ experience in
utility scale energy projects at all
stages of development and asset
transition, having delivered projects
for BP and Capricorn Energy
(formerly Cairn Energy) in locations
across Asia as well as Greenland,
Africa and Europe.
Having worked across the energy
space, Mark has a wealth of
experience in oil and gas, nuclear
and renewable energy projects and
operations, where most recently he
developed the portfolio for GEPL.
Mark is a qualified Project Manager
with PMP and a MSc in Project
Management.
STEPHEN BIRRELL
Independent
Non-Executive Director
(appointed on 25 March 2022)
Stephen is a highly experienced
geoscientist who has worked in
the upstream oil and gas industry
for over 35 years with a particular
focus on gas developments across
multiple jurisdictions with Britoil,
BP and Elf and Sterling Resources,
where he discovered and initiated
the development of the Black
Sea gas field complex, Ana/Doina
in Romania. Stephen has a BSc
Honours in Applied Geology and
is a member of the Association
of International Petroleum
Negotiators and the Society of
Petroleum Engineers.
FIONA MACAULAY
Independent
Non-Executive Director
Appointed to the Board
12 December 2017
Resigned from the Board
25 March 2022
ANDREW DENNAN
Non-Executive Director
Appointed to the Board
22 March 2019
Resigned from the Board
14 June 2022
26
Stock code: COROCoro Energy PLC STEPHEN BIRRELL
Independent
Non-Executive Director
(appointed on 25 March 2022)
the upstream oil and gas industry
for over 35 years with a particular
focus on gas developments across
multiple jurisdictions with Britoil,
BP and Elf and Sterling Resources,
where he discovered and initiated
the development of the Black
Sea gas field complex, Ana/Doina
in Romania. Stephen has a BSc
Honours in Applied Geology and
James has over 25 years’
Mark is the co-founder of Global
Stephen is a highly experienced
experience in the fields of strategy,
Energy Partnership Ltd, now Coro
geoscientist who has worked in
management, finance and
Asia Renewables Ltd.
corporate development in the
energy industry. He started his
career with the Shell group where
he spent 12 years working across
Brazil, the Dominican Republic,
Scandinavia, the Netherlands and
London.
He has over 20 years’ experience in
utility scale energy projects at all
stages of development and asset
transition, having delivered projects
for BP and Capricorn Energy
(formerly Cairn Energy) in locations
across Asia as well as Greenland,
James is also Chairman at Ascent
Africa and Europe.
Resources plc and Corcel plc.
James was previously Chief
space, Mark has a wealth of
of International Petroleum
Executive at Sound Energy Plc for
experience in oil and gas, nuclear
Negotiators and the Society of
eight years, is a qualified accountant
and renewable energy projects and
Petroleum Engineers.
Having worked across the energy
is a member of the Association
and has a BA Honours in Business
operations, where most recently he
Economics.
developed the portfolio for GEPL.
Mark is a qualified Project Manager
with PMP and a MSc in Project
Management.
JAMES PARSONS
Executive Chairman
MARK HOOD
Chief Executive Officer
MARCO FUMAGALLI
Non-Executive Director
EWEN AINSWORTH
Chief Financial Officer
Management
Marco is a Founding Partner at
Continental Investment Partners SA,
a Swiss-based fund. Marco is a well-
known Italian businessman who was
a former Group Partner at 3i. He is
a qualified accountant and holds a
degree in Business Administration
from Bocconi University in Milan.
Marco is also a Non-Executive
Director of SourceBio International
Plc, Sound Energy plc and Echo
Energy plc.
Ewen is an experienced AIM company director. He is
currently a Non-Executive Director of Corcel Plc and CEO
of Discovery Energy Limited, an advisory, consultancy and
investment company and has worked in a variety of senior
and board-level roles in the natural resource sector for over
30 years, most recently as Finance Director for San Leon
Energy and Gulf Keystone Petroleum Ltd. He qualified as
a chartered management accountant, before moving into
leading commercial roles. He holds a degree in Economics
and Geography from Middlesex University, and is a member
of the Energy Institute.
MICHAEL CARRINGTON
Chief Operating Officer
Michael co-founded Global Energy Partnership Ltd and
has over 30 years experience of energy efficiency and
clean tech generation in the built environment, including
strategic management, acquisition integration, research and
development commercialisation, project origination, due
diligence, and project pre-development across Europe, UK
and ASEAN countries.
LEONARDO SALVADORI
Managing Director, Italy
Leonardo has over 30 years of international exploration,
business development and general management experience.
He has worked in Libya and Norway as an explorationist and
in Italy with exploration and new ventures roles, focusing on
international asset evaluations, portfolio development and
corporate acquisitions, with a specific focus on the Middle
East, Africa, Asia and the North Sea.
27
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021GOVERNANCE REPORT Corporate Governance Framework
Role of the Board
The Group continued to evolve in
2021 and grew through acquisition
of Global Energy Partnership Ltd
(now Coro Asia Renewables Ltd)
and continues to develop the
business, so it is critical that the
Group’s governance and control
structure is robust, clearly defined
and communicated. The Board
of Directors is responsible for
the overall management and
performance of the Group and
operates within a framework of
prudent and effective controls,
which enables risk to be assessed
and managed. It is also collectively
responsible for the success of
the Group and operates within a
framework of reserved matters,
delegations and assurance.
Governance Structure
In 2021, following the appointment
of Mark Hood on 17 March 2021, the
Board was comprised of a Chief
Executive Officer, Non-Executive
Chairman and three Non-Executive
Directors. Post the year end,
the Non-Executive Chairman
transitioned to Executive Chairman.
Currently, the Board comprises of
James Parsons, Executive Chairman;
Mark Hood, Chief Executive Officer;
Marco Fumagalli, Non-Executive
Director; and Stephen Birrell,
Independent Non-Executive
Director.
Michael Carrington joined the
Company in March 2021 as Chief
Operating Officer. Michael co-
founded Global Energy Partnership
Ltd and has over 30 years’
experience of energy efficiency
and clean tech generation in the
built environment. Peter Christie
left the Group as CFO in November
2021, following which Ewen
Ainsworth joined the Company as
CFO, appointed on 28 February
2022. Ewen has responsibility for
the commercial and financial
management of the Group,
28
reporting to the CEO. Leonardo
Salvadori, Managing Director of
Italy, remains responsible for Italian
operations and assists with the
Group’s wider South East Asian
activities as required, reporting to
the CEO. Mark Hood was appointed
as Chief Executive Officer in March
2021. Prior to Mark’s appointment,
the Group’s Non-Executive Directors
provided additional assistance to
the Executive team as required to
ensure continuity of operations.
Matters Reserved
for the Board
The Board retains full and effective
control over the Group and is
responsible for the Group’s strategy
and key financial and compliance
issues. There are certain matters
that are reserved for the Board,
which are reviewed on an annual
basis, and they include:
• Strategy and management
(approval of strategic aims
and objectives; approval of the
Group’s annual operating and
capital expenditure budgets and
changes; decision to cease to
operate all or any material part of
the Group’s business);
• Structure and capital
(major changes to the Group’s
corporate structure; any change
to the Company’s listing);
• Financial reporting
and controls
(approval of financial results;
annual reports and accounts;
dividend policy and declaration
of any dividend; significant
changes in accounting policies/
practice; and treasury policies);
•
Internal controls
(ensuring maintenance of a
sound system of internal control
and management);
• Contracts
(major capital contracts;
contracts that are material or
strategic; and major investments
or any acquisitions/disposals);
• Communications
(approval or resolutions and
documentation put forward to
shareholders);
• Board membership and
other appointments
• Remuneration
(determining the remuneration
policy for Directors, senior
Executives and Non-Executive
Directors; introduction of new
share incentive plans; and
changes to existing plans);
• Corporate governance matters
(review of the Group’s overall
corporate governance
arrangements);
• Policies
(approval of Group policies,
including the share dealing
code);
• Other
(litigation involving £5m and
over or otherwise material to
the Group; approval of the
appointment of professional
advisers; and approval of overall
levels of insurance for the Group).
Board Committees
The Board has formed four
committees: the Audit Committee,
the HSE/Technical Committee,
the Nominations Committee and
the Remuneration Committee,
with delegated responsibility to
monitor their respective areas and
to report back to the full Board.
The Committees operate under
clearly defined terms of reference,
which are kept under review, to
ensure proper functioning of
the committees and effective
application of best practice. The
Directors appointed to each
Committee are outlined below,
with the HSE/Technical Committee
supported by additional employees
with the appropriate skills and
experience during the year.
Stock code: COROCoro Energy PLC Board meeting attendance
Year ended 31 December 2021
Number of meetings held
James Parsons
Mark Hood5
Andrew Dennan3
Marco Fumagalli
Fiona MacAulay4
Board
(scheduled)
Board
(ad hoc1)
Audit
Committee
Remuneration
Committee
HSE
Committee
Nominations
Committee
5
5
4
5
5
5
7
7
4
7
7
7
3
–
–
–
3
3
4
12
–
–
4
4
5
–
–
–
–
5
0
–
–
–
–
–
1 Ad hoc meetings are called for specific matters, generally of a more administrative nature not requiring full Board attendance.
2 Attended one meeting prior to stepping down as a member of the Committee, in Q1 2021.
3 Resigned on 14 June 2022.
4 Resigned on 25 March 2022.
5 Appointed to the Board on 17 March 2021.
Auditor Rotation
The Company’s policy is to
undertake an audit tender at
least every ten years and to
change auditors at least every
20 years. The incumbent auditor,
PKF Littlejohn LLP, has been the
Company’s auditor since its first
financial period, which ended
31 December 2017, meaning this
is their fifth year as the Company’s
auditors. The audit of the 2021
financial statements is the
final year for the current audit
partner, Joseph Archer, given
the requirement to change audit
partner every five years. The
Company does not have any
plans to retender the audit in the
next 12 months.
Board Evaluation
The Directors consider seriously
the effectiveness of the Board,
its Committees and individual
performance.
The Board generally meets formally
five times a year with ad hoc
Board meetings as the business
demands. There is a regular flow
of communication between
the Directors and the Executive
management team.
Board meeting agendas are set in
consultation with the management
team and the Chairman, with
consideration being given to both
standing agenda items and the
strategic and operational needs
of the business. Comprehensive
Board papers are circulated well
in advance of meetings, giving
Directors ample time to review the
documentation and enabling an
effective meeting.
Resulting actions are tracked for
appropriate delivery and follow
up. The Directors have a broad
knowledge of the business and
understand their responsibilities as
directors of a UK company quoted
on AIM.
The Company’s Nomad provides
annual boardroom training as
well as initial training as part
of a Director’s onboarding. The
Company Secretary, assisted
by the Group’s solicitors, helps
keep the Board up-to-date with
developments in corporate
governance and liaise with
the Nomad on areas of AIM
requirements. The Company
Secretary has frequent
communication with both the
Chairman, CEO and management
team and is available to other
members of the Board as required.
The Directors also have access to
the Company’s auditors and lawyers
as and when required, and the
Directors are able, at the Company’s
expense, to obtain advice from
other external advisers if required.
The Board recognises that, in order
to meet the requirements of the
QCA Code, a Board effectiveness
process needs to be considered
in the short to medium term.
To date, a formal Board effectiveness
review has not been undertaken
given recent Board changes;
however, a formal review will take
place when the Board is settled in.
The Directors are committed to
ensuring the ongoing efficient
functioning of the Board to ensure it
is meeting its objectives.
29
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021GOVERNANCE REPORT Corporate Governance Framework
continued
Board reports
Audit Committee
The Audit Committee comprises
Marco Fumagalli (Chair) and
Stephen Birrell. Fiona MacAulay
served as Chair until her resignation
in March 2022.
Scope and responsibilities:
The Audit Committee is mainly
responsible for the oversight of
financial reporting in accordance
with regulatory and statutory
requirements, and for the review
and monitoring of the Group’s
internal financial control and
risk management systems. The
Committee meets a minimum of
twice a year.
2021 activities:
• Reviewed the 2020 audit
plan and approved auditor’s
remuneration.
• Reviewed and approved the
Group’s 2020 Annual Report and
2021 Interim Report.
• Reviewed the independence
and competence of the Group’s
auditor, PKF Littlejohn LLP
(“PKF”) and recommended their
reappointment.
• Considered the going concern
position of the Group.
• Reviewed the Group’s risk
register.
Remuneration Committee
The Remuneration Committee
comprises Non-Executive Directors
Stephen Birrell (Chair), and Marco
Fumagalli. James Parsons stood
down from Chair of the Committee
at the end of January 2021, at which
point Fiona MacAulay assumed the
position of Chair of the Committee
until she stepped down from the
Board in March 2022.
The Committee generally meets
twice a year and is responsible
for making recommendations to
the Board of Directors on senior
Executives’ remuneration.
30
The Committee reviews the
overall Remuneration policy of the
Company, the Executive Director’s
scorecard, and bonus awards
related to the achievements of the
targets set.
HSE/Technical Committee
The HSE/Technical Committee
comprises Stephen Birrell (Chair)
and Leonardo Salvadori. Fiona
MacAulay served as Chair until her
resignation in March 2022.
Paramount to Coro’s ability to
pursue its strategic priorities is a
safe workplace and a culture of
“safety first”. The Company regards
environmental awareness and
sustainability as key strengths in
planning and carrying out business
activities.
Coro’s daily operations are
conducted in a way that adheres to
these principles and management
is committed to their continuous
improvement. While growing from
exploration roots, the Company
has strived to continually improve
underlying safety performance.
The Company has adopted a
Health, Safety and Environment
Management System, which
provides for a series of procedures
and routine checks (including
periodical audits) to ensure
compliance with all legal and
regulatory requirements and best
practices in this area.
In 2021, Coro maintained its
outstanding occupational health,
safety and environmental track
record and only one near miss
to report. During 2021, the total
man-hours amounted to 16,268
(2020: 19,327) with zero Lost Time
Injury ("LTIs") recorded (2020: nil)
The 2021 HSE Report is provided on
page 31.
2021 activities:
• Reviewed and approved the
2020 bonus awards to Executives
and management and the 2020
scorecard.
• Discussed and debated the
changes to the Executive
management team.
• Reviewed the Group’s long-term
incentive structures.
• Put in place a new LTIP scheme
for the Company and approved
awards to be made under the
scheme.
• Considered the remuneration
package for the incoming CEO
and members of the Executive
Management team.
Nominations Committee
The Nominations Committee
comprises of James Parsons
(Chair) and Marco Fumagalli. Fiona
MacAulay served as Chair until her
resignation in March 2022.
The Committee was established
during 2020, with matters
pertaining to Nominations
previously dealt with by the
Remuneration Committee.
The role of the Committee is to
consider Board composition and
succession planning, to identify
candidates for NED positions and
to make recommendations to the
Board.
2021 activities:
• Assisted with the appointment
of the CFO.
• Considered the near term
composition of the Board to
ensure the right support was
provided for the incoming CEO.
• Reviewed and approved the
2021 scorecard.
Stock code: COROCoro Energy PLC HSE Report
In the first half of 2021, the Group
only operated the Rapagnano gas
field. Starting from July, also Casa
Tiberi field was put into production.
Plant and construction site
maintenance activities were carried
out on all the other sites.
Key activities undertaken in 2021
included:
•
Implementation of all COVID-19
government measures including
any necessary update of
the health protocol for safe
operational management and
within the terms of the law.
• Update of all Company
safety and environmental
documentation required by the
Italian regulations.
• Completion of the two-year
maintenance activity at
Rapagnano.
• Renewal of the fire prevention
certificate on Casa Tonetto site.
• Monthly HSE visits on all
sites, including those where
production is suspended,
continued as required.
The total man-hours worked in 2021 were 16,268 with key HSE statistics
recorded in the following four main categories:
1) Man-hours Worked
Company
Contractors
Total man-hours
2) Lagging Indicators
Fatality
Lost Time Injury (LTI)
Restricted Work Case (RWC)
Medical Treatment Case (MTC)
First Aid Case (FAC)
Property damage
Environmental incident
Road Traffic Accident (RTA)
Near miss
HiPo (high potential incidents)
Lost workdays
3) Leading Indicators
HSE inspections
HSE audits
HSE meetings
HSE inductions
Emergency drills
TBTs
Training hours
SHOC cards
JSAs
Management tours
4) Environmental Data
Diesel consumed (mc)
Water consumed (mc)
Mud cuttings (mc)
Non-hazardous waste (tonne)
Hazardous waste (tonne)
Instrumentation gas (mc)
Electrical energy (MWh)
2021
7,794
8,474
16,268
2020
9,967
9,360
19,327
2021
2020
0
0
0
0
0
0
0
0
0
0
0
2021
337
6
6
342
3
3
173
2
10
5
2021
13
48
0
419
0
4,200
47
0
0
0
0
0
1
2
0
1
1
0
2020
293
13
2
408
1
0
220
0
0
0
2020
16
80
0
1,249
0
4,800
60
Coro is proud of its HSE achievements, with zero LTIs placing us ahead of
industry averages.
31
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021GOVERNANCE REPORT 32
Coro Energy PLC
Stock code: CORO Directors’ Remuneration Report
Remuneration Committee
The Remuneration Committee recognises the importance of attracting, retaining and motivating talent within
the Boardroom and the wider Executive team to ensure the success of the Company.
The Remuneration Committee is responsible for reviewing and determining compensation arrangements for
all Directors and senior Executives. The Committee considers the appropriateness of the nature and amount of
emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the
overall objective of ensuring maximum stakeholder benefit from the retention of a high-quality Board and senior
Executive team.
There were changes made to the Company’s Board and Executive team in early 2021 due to the acute
challenges posed by the COVID-19 pandemic, which saw the Group operate with a leaner management structure,
with Non-Executive Directors supporting management as appropriate. Recognising a greater time commitment
for the Chairman, the Committee approved a temporary increase in the Chairman’s fees from September 2020
which continued as the new Executive team embedded within the business., and until the decision in 2022 to
transition the Chairman to an Executive Chair position. The Committee will continue to work to ensure that the
appropriate policies and framework are in place to reward the new Executive team for achievements and targets
met, which, in turn, creates value for stakeholders.
Remuneration Package – Executive Directors
The Company offers a fixed remuneration package of salary, pension and certain benefits. In addition, Executive
Directors are eligible for a discretionary bonus award. Award of bonuses depends on performance against a
balanced scorecard, which is agreed by the Committee. The Committee approved a new Long-Term Incentive Plan
(the "LTIP") in which all Executives are entitled to participate. Under the LTIP, options may be granted to Executives
annually, at the discretion of the Committee, and will generally vest in three years subject to performance vesting
conditions determined by the Committee, and in accordance with the rules of the LTIP.
Non-Executive Directors’ Fees
The fees paid to the Non-Executive Directors are set at a level both in line with the market and to appropriately
reward and retain individuals of a high calibre and are reviewed and approved by the Remuneration Committee.
The fees paid reflect the level of commitment and contribution to the Company. Fees are paid monthly in cash
and are inclusive of all Committee roles and responsibilities. In addition, Directors were awarded Company share
options in 2018 with a three-year vesting period to align the interests of Directors and shareholders.
Remuneration of Directors
The following remuneration table comprises Directors’ salaries and benefits in kind that were payable to Directors
who held office during the year ended 31 December 2021:
Executive Directors
Mark Hood1
Non-Executive Directors
James Parsons
Andrew Dennan
Fiona MacAulay
Marco Fumagalli
Salary
and cash
benefits
US$’000
163
89
55
55
55
1 Mark Hood was appointed as Director on 17 March 2021.
Transitional
Support
Bonus
US$’000
Benefits
in kind
US$’000
Pensions
US$’000
Total
2021
US$’000
Total
2020
US$’000
113
37.5
–
–
–
–
–
–
–
–
–
4.1
204.6
–
–
–
–
202
55
55
55
–
115
99
51
51
33
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021GOVERNANCE REPORT Directors’ Remuneration Report
continued
Share-Based Payments
Mark Hood was granted 37.5 million new share options when he was appointed to the Board in March 2021.
There were no other new share options granted to Directors in the year under the LTIP. The table below shows
all outstanding share awards to the Directors. All other options were awarded to individual directors prior to
the adoption of the LTIP and each have an exercise price of 4.38p per share and vest on the third anniversary of
grant date. The options awarded to Mark Hood will vest after three years subject to fulfilling the set performance
conditions. The total share-based payments expense recognised in respect of Directors in 2021 was US$160k (2020:
US$597k). For further details, refer to note 22 of the Notes to the Financial Statements.
The number of share options held by the Directors in the current and prior year is set out below:
Mark Hood
James Parsons
Andrew Dennan
Fiona MacAulay
Marco Fumagalli
Options
held at
1 January
2021
Granted
during
the year
Exercised
during
the year
Lapsed/
forfeited
during
the year
–
37,500,000
10,000,000
15,000,000
10,000,000
10,000,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Options
held at
31 December
2021
37,500,000
10,000,000
15,000,000
10,000,000
10,000,000
Directors’ Interest in Shares
Directors and their connected persons had the following interests in shares of the Company at 31 December 2021:
Name of Director
Andrew Dennan
Mark Hood
James Parsons
Marco Fumagalli1
No. of shares at
31 December
2021
No. of shares at
31 December
2020
7,280,194
4,280,194
72,720,558
–
4,695,414
1,729,226
–
–
1 Marco Fumagalli holds no Ordinary Shares directly. M Fumagalli holds a 25% interest in Continental Investment Partners S.A (“Continental”), which
has 3,817,065 Ordinary Shares. In addition, M Fumagalli is a director of CIP Merchant Capital Limited, which owns 150,684,929 shares in the Company.
This Remuneration Report was approved by the Board of Directors on 27 June 2022 and signed on its behalf by:
JAMES PARSONS
Executive Chairman
34
Stock code: COROCoro Energy PLC Directors’ Report
The Directors present their Annual
Report and the audited Group and
Company financial statements of
Coro Energy plc for the year ended
31 December 2021.
Directors
The Directors who served during the
period, and up to the date of this
report, were as follows:
Principal Activities
Coro is an AIM-listed South East
Asian energy company supporting
the regional transition to a low-
carbon economy, with a strategy
centred on low-carbon energy
investments, supported by an
existing platform of gas assets.
The Company has gas assets in Italy
which during 2021 were classified
as a disposal group and held for
sale and therefore presented in
these accounts as a discontinued
operation. In an announcement
on the 27 May 2021, the Company
signed a conditional share purchase
agreement ("SPA") with Dubai
Energy Partners, Inc ("DEPI"), in
respect of the disposal by the
Company of its Italian portfolio to
DEPI. This SPA was conditional on,
inter alia, the receipt of required
regulatory approvals from the
Italian authorities being received by
26 February 2022. These regulatory
approvals were not received and the
sale process was terminated.
Subsequent to the 2021 year end,
the Board completed a full review
of the gas assets in Italy and agreed
that they would no longer be
marketed for sale.
Results and Dividends
The Group made a net loss after tax
of US$8.0m (2020: loss US$10.2m),
which comprised a loss after
tax from continuing operations
of US$6.5m (2020: loss from
continuing operations US$8.0m).
The Directors have not
recommended payment of a
dividend (2020: nil).
• James Parsons
• Andrew Dennan
(resigned on 16 June 2022)
• Marco Fumagalli
• Fiona MacAulay
(resigned on 25 March 2022)
• Mark Hood (appointed 17 March 2021).
Directors’ and Officers’
Indemnity Insurance
The Group has made qualifying
third-party indemnity provisions
for the benefit of its Directors and
officers. These were made during
the previous year and renewed post
year end, and remain in force at the
date of this report.
Provision of Information
to Auditor
So far as each of the Directors is
aware at the time this report is
approved:
• there is no relevant audit
information of which the
Company’s auditor is unaware; and
• the Directors have taken all steps
that they ought to have taken to
make themselves aware of any
relevant audit information and to
establish that the auditor is aware
of that information.
Future Developments
Future developments are included in
the Statement from the Chairman.
Information on the financial
instruments of the Group and
its approach to financial risk
management is disclosed in note 21
to the financial statements.
Substantial Shareholdings
The Directors were advised of the
following significant direct and
indirect interests in the issued share
capital of the Company above 3% as
at the date of this report:
Name of shareholder
Interest
Lombard Odier Asset
Management (Europe) Limited
CIP Merchant Capital Ltd
GP (Jersey) Ltd
Spreadex Ltd*
Mark Hood
Michael Carrington
9.29%
7.09%
3.40%
4.01%
3.42%
3.35%
* 23,096,000 votes (1.09%) – CFD/Spread bet
financial instruments – 62,153,318 ordinary
shares (2.92%) held directly.
Subsequent Events
The events after the reporting
period are set out in note 26 to the
financial statements.
Going Concern
The Group and Company financial
statements have been prepared
under the going concern
assumption, which presumes that
the Group and Company will be able
to meet their obligations as they fall
due for the foreseeable future.
Further discussion on the Directors’
assumptions and their conclusions
are included in note 2c to the
financial statements.
This Directors’ Report was approved
by the Board on 27 June 2022 and
signed on its behalf by:
MARK HOOD
Chief Executive Officer
35
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021GOVERNANCE REPORT Statement of Directors’ Responsibilities
The Directors are responsible for
keeping adequate accounting
records that are sufficient to
show and explain the Group and
Company’s transactions and
disclose with reasonable accuracy
at any time the financial position of
the Company and the Group and
enable them to ensure that the
financial statements comply with
the Companies Act 2006. They are
also responsible for safeguarding
the assets of the Company and
Group and hence for taking
reasonable steps for the prevention
and detection of fraud and other
irregularities.
The Directors are responsible for the
maintenance and integrity of the
corporate and financial information
included on the Company’s website.
Legislation in the United Kingdom
governing the preparation and
dissemination of the financial
statements may differ from
legislation in other jurisdictions.
The Group is compliant with AIM
Rule 26 regarding the Group’s
website.
This report was approved by the
Board on 27 June 2022 and signed
on its behalf by:
MARK HOOD
Chief Executive Officer
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 and
Company Financial Statements
in accordance with UK-adopted
international accounting standards
and, as regards the Company
financial statements, as applied in
accordance with the requirements
of the Companies Act 2006.
Under company law, the Directors
must not approve the financial
statements unless they are satisfied
that they give a true and fair view of
the state of affairs of the Company
and the Group as at the end of the
financial year and of the profit or
loss of the Group and the Company
for that period. In preparing these
financial statements, the Directors
are required to:
•
select suitable accounting
policies and then apply them
consistently;
• make judgments and
accounting estimates that are
reasonable and prudent;
•
state whether the applicable
IFRSs have been followed subject
to any material departures
disclosed and explained in the
financial statements; and
• prepare the financial statements
on a going concern basis
unless it is inappropriate to
presume that the Group and
the Company will continue in
business.
36
Stock code: COROCoro Energy PLC Independent Auditor’s Report
To the Members of Coro Energy Plc
Opinion
We have audited the financial statements of Coro Energy Plc (the ‘parent company’) and its subsidiaries (the
‘group’) for the year ended 31 December 2021 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated and Parent Company Balance Sheets, the Consolidated and Parent Company Statements
of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows and Notes to the Financial
Statements, including significant accounting policies. The financial reporting framework that has been applied in
their preparation is applicable law and UK-adopted international accounting standards and as regards the parent
company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
as at 31 December 2021 and of the group’s loss 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 UK-adopted
international accounting standards and as applied in accordance with the provisions of the Companies Act
2006; and
•
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report. We are independent of the group and parent company
in accordance with the ethical requirements that are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment
of the group’s and parent company’s ability to continue to adopt the going concern basis of accounting included a
review of management’s forecast financial information for a period of 12 months after the date of approval of these
financial statements and providing challenge to the corresponding assumptions used, as well as discussion with
management regarding future plans, availability of funding, and other plans in the pipeline for the group.
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 group's or parent company’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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.
Our application of materiality
Group materiality 2021
Group materiality 2020
Basis for materiality
Overall materiality:
US$216k
Overall materiality:
US$246k
5% net assets
(2020: 5% net assets basis)
Performance materiality:
US$151k (70%)
Performance materiality:
US$156k (70%)
Materiality for the parent company was set at $99k (2020: $200k) based on 5% of net assets (2020: 5% of net assets).
37
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021GOVERNANCE REPORT Independent Auditor’s Report
To the Members of Coro Energy Plc continued
We consider net assets to be the
most significant determinant of
the group’s financial position and
performance used by shareholders,
with key financial statement
balances within both assets
(exploration and evaluation assets;
assets of the Italian disposal group;
and cash and cash equivalents) and
liabilities (Eurobond; liabilities of
disposal group). The going concern
of the group is dependent on its
ability to fund operations going
forward, as well as on the valuation
of its assets, which represent the
underlying value of the group.
Whilst materiality for the financial
statements as a whole was set
at US$216k, each significant
component of the group was
audited to an overall materiality
ranging between US$99k-
US$208.5k with performance
materiality set at 70%, as considered
appropriate for a group of this
size and risk profile. We applied
the concept of materiality both
in planning and performing our
audit, and in evaluating the effect of
misstatements.
We agreed with the audit
committee that we would report to
the committee all audit differences
identified during the course of
our audit in excess of US$10.8k
(2020: US$10.5k). There were no
misstatements identified during
the course of our audit that were
individually, or in aggregate,
considered to be material.
Our approach to the audit
In designing our audit, we
determined materiality and
assessed the risk of material
misstatement in the financial
statements. In particular, we looked
at areas requiring the directors to
make subjective judgements, for
example in respect of significant
accounting estimates including
the carrying value of assets and the
consideration of future events that
are inherently uncertain. 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.
An audit was performed on the
financial information of the group’s
operating components which
for the year ended 31 December
2021 were located in the United
Kingdom, Italy and Asia, with the
group’s accounting functions being
based in the UK and Italy.
The audit work surrounding our
key audit matter in respect of the
carrying value of investments was
performed by us as group auditor
and is explained further in the Key
audit matters section.
The Italian component, Apennine
Energy SpA has been assessed as
a significant component of the
group. As at 31 December 2021, the
Italian operations, headed by group
subsidiary Coro Europe Limited, are
recorded as a disposal group and
accounted for under IFRS 5. The
held for sale assets and liabilities are
included as line items on the group
statement of financial position,
and the loss for the period from
discontinued operations is included
as a line item on the consolidated
statement of comprehensive
income. The key balances held
within the disposal group are
exploration & evaluation assets,
oil & gas assets and rehabilitation
provisions.
In addition, we engaged another
audit firm to perform agreed
upon procedures in relation to the
Duyung PSC. These procedures
were limited to specified procedures
surrounding key risk areas, focused
on costs capitalised during the year
within the group and compliance
with local laws and regulations. This
work was significant in addressing
our key audit matter in respect of
capitalised exploration costs as the
group’s exploration costs (other than
those within the Italian disposal
group) are wholly relating to their
interest in the Duyung PSC. The
assessment of the carrying value
of the exploration and evaluation
assets was performed at the group
level and as such the group auditor
have performed this assessment.
The work on both of these
components was performed by
component auditors operating
under our instruction. There
was regular interaction with the
component auditors during all
stages of the audit, and we were
responsible for the scope and
direction of the audit process.
We reviewed key working papers
and reporting appendices to
understand the work performed
and conclusions reached, in order to
gain sufficient appropriate evidence
for our opinion on the group
financial statements.
38
Stock code: COROCoro Energy PLC Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) 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.
Key Audit Matter
How our scope addressed this matter
Carrying Value of Investments in Subsidiaries
(Parent Company) (Note 20)
Investment in subsidiary undertakings totalled
USD19.2m at 31 December 2021 representing the
largest asset on the parent company’s balance
sheet. Recoverability depends on Management’s
assumptions regarding their future performance
which is in turn dependent on the successful
recoverability of resources from exploration assets
and other assets held by its investments, relating to
the Duyung PSC and the Italian portfolio, the latter
classified as a disposal group as at 31 December 2021.
There is the risk that these investments may be
impaired due to the judgements required in assessing
the ability of the underlying assets to generate future
value for shareholders.
Carrying Value of Capitalised Exploration Costs
(Group) (Note 13)
Capitalised exploration costs total US$18.3m represent
the most material assets within the group’s financial
statements. These assets represent capitalised
exploration costs in respect of the Duyung PSC and
it is from these assets that the group hopes to deliver
future value to its shareholders.
There is the risk that these amounts are impaired and
the capitalised amounts do not meet the recognition
criteria of International Financial Reporting Standards
(IFRS) 6. This is due to the significant judgement
involved in relation to the ability of the assets to
generate future value for the shareholders.
Our work included the following:
• Confirmation of ownership of subsidiaries; and
• A review of the impairment assessment prepared
by management and challenge of all inputs and
estimates included therein. We have reviewed
management’s internal valuation modelling in
respect of the Duyung project and Italian portfolio.
This included challenging the key assumptions,
data, method, and the sensitivity of the models to
reasonably possible changes in the inputs used.
Our work included the following:
• Confirmation that the parties to the Duyung Joint
Operation Agreement hold good title to the PSC
license area;
• Review of the work performed by the component
auditor in respect of capitalised costs relating to
the Duyung project, including the considerations
made in respect of the recognition criteria within
IFRS 6; and
• A review of management’s considerations of
impairment in respect of the Duyung project.
This included challenging the key assumptions,
data, method, and the sensitivity of the models to
reasonably possible changes in the inputs used. We
considered whether evidence of impairment exists
in accordance with the impairment indicators
within IFRS 6.
39
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021GOVERNANCE REPORT Independent Auditor’s Report
To the Members of Coro Energy Plc continued
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 group and parent company
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.
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.
•
•
40
Matters on which we
are required to report
by exception
In the light of the knowledge and
understanding of the group and
the parent company and their
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 Statement of Directors’
Responsibilities, the directors are
responsible for the preparation of
the group and parent company
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 group and parent
company financial statements, the
directors are responsible for assessing
the group and the 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 the parent company or to cease
operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities
for the audit of the
financial statements
Our objectives are to obtain
reasonable assurance about
whether the financial statements
as a whole are free from material
misstatement, whether due to
fraud or error, and to issue an
auditor’s report that includes our
opinion. Reasonable assurance
is a high level of assurance but
is not a guarantee that an audit
conducted in accordance with ISAs
(UK) will always detect a material
misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material
if, individually or in the aggregate,
they could reasonably be expected
to influence the economic decisions
of users taken on the basis of these
financial statements.
Irregularities, including fraud,
are instances of non-compliance
with laws and regulations. We
design procedures in line with our
responsibilities, outlined above, to
detect material misstatements in
respect of irregularities, including
fraud. The extent to which our
procedures are capable of detecting
irregularities, including fraud is
detailed below:
• We obtained an understanding
of the group and parent
company and the sector in
which they operate to identify
laws and regulations that could
reasonably be expected to have
a direct effect on the financial
statements. We obtained our
Stock code: COROCoro Energy PLC Use of our report
This report is made solely to the
company’s members, as a body, in
accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our
audit work has been undertaken
so that we might state to the
company’s members those matters
we are required to state to them
in an auditor’s 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.
JOSEPH ARCHER
(Senior Statutory Auditor)
For and on behalf of
PKF Littlejohn LLP
Statutory Auditor
15 Westferry Circus
Canary Wharf
London
E14 4HD
27 June 2022
understanding in this regard
through, discussions with
management, industry research,
application of cumulative audit
knowledge and experience of the
sector etc. This is evidenced by
discussion of laws and regulations
with the management, reviewing
minutes of meetings of those
charged with governance, and
Regulatory News Service (RNS)
and review of legal or professional
expenditures. As for the
parent company’s subsidiaries,
corresponding instructions have
been issued to the component
auditors to assess the compliance
of the components to the
applicable laws and regulations.
• We determined the principal laws
and regulations relevant to the
group and parent company in this
regard to be those arising from
Companies Act 2006, AIM rules,
and local laws and regulations
in Italy and Indonesia relating to
exploration and production.
• We designed our audit
procedures to ensure the audit
team considered whether there
were any indications of non-
compliance by the group and
parent company with those
laws and regulations. These
procedures included, but were
not limited to:
− Discussion with management
regarding potential non-
compliance;
− Review of the component
auditor’s work on compliance
with laws and regulations;
− Review of legal and
professional fees to
understand the nature of the
costs and the existence of any
non-compliance with laws
and regulations; and
− Review of minutes of
meetings of those charged
with governance and RNS
announcements.
• We also identified the risks of
material misstatement of the
financial statements due to fraud.
We considered, in addition to
the non-rebuttable presumption
of a risk of fraud arising from
management override of
controls, we did not identify any
significant fraud risks.
• As in all of our audits, we
addressed the risk of fraud arising
from management override of
controls by performing audit
procedures which included, but
were not limited to: the testing
of journals; reviewing accounting
estimates for evidence of bias;
and evaluating the business
rationale of any significant
transactions that are unusual
or outside the normal course of
business and review of the bank
statements during the year to
identify any large and unusual
transactions where the business
rationale is not clear.
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. The risk is also
greater regarding irregularities
occurring due to fraud rather than
error, as fraud involves intentional
concealment, forgery, collusion,
omission or misrepresentation.
A further description of our
responsibilities for the audit of the
financial statements is located
on the Financial Reporting
Council’s website at: www.frc.
org.uk/auditorsresponsibilities.
This description forms part of our
auditor’s report.
41
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021GOVERNANCE REPORT Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
Continuing operations
General and administrative expenses
Depreciation expense
Other losses
Share of loss of associates
Loss from operating activities
Finance income
Finance expense
Net finance expense
Loss before income tax
Income tax benefit/(expense)
31 December
2021
US$’000
31 December
2020
US$’000
Notes
5
(3,276)
(2,942)
(18)
–
(249)
(3,543)
2,239
(5,171)
(2,932)
(6,475)
–
(114)
(19)
(16)
(3,091)
28
(4,906)
(4,878)
(7,969)
–
7
7
8
Loss for the period from continuing operations
(6,475)
(7,969)
Discontinued operations
Loss for the period from discontinued operations
19
(1,510)
(2,198)
Total loss for the period
(7,985)
(10,167)
Other comprehensive income/loss
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations
Total comprehensive income for the period
Loss attributable to:
Owners of the Company
Total comprehensive income attributable to:
Owners of the Company
Basic loss per share from continuing operations ($)
Diluted loss per share from continuing operations ($)
Basic loss per share from discontinued operations (US$)
Diluted loss per share from discontinued operations (US$)
485
(7,500)
(840)
(11,007)
(7,500)
(10,167)
(7,500)
(0.003)
(0.003)
(0.001)
(0.001)
(11,007)
(0.010)
(0.010)
(0.003)
(0.003)
9
9
The consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
42
Stock code: COROCoro Energy PLC Consolidated Balance Sheet
As at 31 December 2021
Non-current assets
Property, plant and equipment
Intangible assets
Investment in associates
Total non-current assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
Derivative financial instruments
Total current assets
Assets of disposal group held for sale
Total assets
Liabilities and equity
Current liabilities
Trade and other payables
Borrowings
Total current liabilities
Non-current liabilities
Borrowings
Total non-current liabilities
Liabilities of disposal group held for sale
Total liabilities
Equity
Share capital
Share premium
Merger reserve
Other reserves
Accumulated losses
Total equity
Total equity and liabilities
31 December
2021
US$’000
31 December
2020
US$’000
Notes
12
13
23
21
11
10
21
19
15
15
15
19
17
17
18
18
10
18,309
401
18,720
16
17,274
666
17,956
3,334
1,706
106
37
–
3.477
8,224
30,421
425
26,637
27,062
–
–
8,889
35,951
2,943
50,461
9,708
4,180
118
37
10
1,871
11,417
31,244
209
689
898
24,360
24,360
10,921
36,179
1,103
45,786
9,708
3,305
(72,822)
(64,837)
(5,530)
30,421
(4,935)
31,244
The consolidated balance sheet should be read in conjunction with the accompanying notes.
The financial statements on pages 42 to 81 were authorised for issue by the Board of Directors on 29 June 2022
and were signed on its behalf by:
JAMES PARSONS
Executive Chairman
MARK HOOD
Chief Executive Officer
43
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Attributable to equity shareholders of the Company
Share
capital
US$’000
1,080
Share
premium
US$’000
45,679
Merger
reserve
US$’000
9,708
Other
reserves
US$’000
3,978
Accumulated
losses
US$’000
(55,263)
Total
US$’000
5,182
–
–
–
23
–
–
–
–
–
107
–
–
23
1,103
107
45,786
–
–
–
–
–
–
–
9,708
–
(840)
(10,167)
–
(10,167)
(840)
(840)
(10,167)
(11,007)
–
760
(593)
167
3,305
–
–
593
593
(64,837)
130
760
–
890
(4,935)
Attributable to equity shareholders of the Company
Share
capital
US$’000
Share
premium
US$’000
1,103
45,786
Merger
reserve
US$’000
9,708
Other
reserves
US$’000
Accumulated
losses
US$’000
Total
US$’000
3,305
(64,837)
(4,935)
At 1 January 2020
Total comprehensive loss for
the period:
Loss for the period
Other comprehensive income
Total comprehensive loss for
the period
Transactions with owners
recorded directly in equity:
Issue of share capital
Share-based payments for
services rendered
Lapsed share options
Total transactions with owners
recorded directly in equity:
Balance at 31 December 2020
At 1 January 2021
Total comprehensive loss for
the period:
Loss for the period
Other comprehensive income
Total comprehensive loss for
the period
Transactions with owners
recorded directly in equity:
–
–
–
–
–
–
–
–
–
–
–
–
9,708
–
485
485
–
390
390
4,180
(7,985)
(7,985)
–
485
(7,985)
(7,500)
–
–
–
(72,822)
6,515
390
6,905
(5,530)
Issue of share capital
1,840
4,675
Share-based payments for
services rendered
Total transactions with owners
recorded directly in equity:
Balance at 31 December 2021
–
–
1,840
2,943
4,675
50,461
The consolidated statement of changes in equity should be read in conjunction with the accompanying notes
including the description of reserves in notes 18.
44
Stock code: COROCoro Energy PLC Consolidated Statement of Cash Flows
For the year ended 31 December 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest paid
Interest received
Net cash used in operating activities
Cash flow from investing activities
Payments for intangible assets
Investment in equity accounted associates
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issuance of shares
Principal elements of lease payments
Net cash provided by or generated from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents brought forward
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents carried forward
31 December
2021
US$’000
31 December
2020
US$’000
Notes
7
7
13
24
18
17
1,019
(3,873)
(649)
1
1,138
(3,837)
(632)
32
(3,502)
(3,299)
(289)
–
(289)
5,669
–
5,669
1,878
1,761
(88)
3,551
(486)
(682)
(1,168)
–
(207)
(207)
(4,674)
6,526
(91)
1,761
The consolidated statement of cash flows should be read in conjunction with the accompanying notes, including
the net debt reconciliation in note 16.
Cash and cash equivalents carried forward at 31 December 2021 includes US$217k relating to discontinued
operations (2020: US$55k). Refer to note 20.
45
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Company Balance Sheet
As at 31 December 2021
Non-current assets
Investment in subsidiaries
Property, plant and equipment
Intangible assets
Investment in associates
Total non-current assets
Current assets
Cash and cash equivalents
Trade and other receivables
Loans to subsidiaries
Derivative financial instruments
Total current assets
Total assets
Liabilities and equity
Current liabilities
Trade and other payables
Borrowings
Total current liabilities
Non-current liabilities
Borrowings
Total non-current liabilities
Total liabilities
Equity
Share capital
Share premium
Other reserves
Accumulated losses
Total equity
Total equity and liabilities
31 December
2021
US$’000
31 December
2020
US$’000
Notes
21
12
13
24
22
11
21
22
15
16
16
18
18
19
19,236
18,687
10
15
662
19,923
3,269
679
666
–
4,614
24,537
806
26.637
27,443
–
–
27,443
2,943
50,461
2,095
16
23
682
19,408
1,480
463
341
10
2,294
21,702
861
689
1,550
24,360
24,360
25,910
1,103
45,786
1,733
(58,405)
(52,830)
(2,906)
24,537
(4,208)
21,702
The Company balance sheet should be read in conjunction with the accompanying notes.
As permitted by s408 of the Companies Act 2006, the Company has not presented its own income statement.
The Company loss for the year was US$5.6m (2020: loss US$9.3m).
The financial statements on pages to 42 to 81 were authorised for issue by the Board of Directors on 27 June 2022
and were signed on its behalf by:
JAMES PARSONS
Executive Chairman
MARK HOOD
Chief Executive Officer
46
Stock code: COROCoro Energy PLC Company Statement of Changes in Equity
For the year ended 31 December 2021
At 1 January 2020
1,080
45,679
2,014
(44,162)
Share
capital
US$’000
Share
premium
US$’000
Other
reserves
US$’000
Accumulated
losses
US$’000
Total comprehensive loss for the period:
Loss for the period
Other comprehensive income
Total comprehensive loss for the period
Transactions with owners recorded
directly in equity:
Issue of share capital
Share-based payments for services rendered
Lapsed share options
Total transactions with owners recorded
directly in equity
Balance at 31 December 2020
–
–
–
23
–
–
–
–
–
107
–
–
23
1,103
Share
capital
US$’000
107
45,786
Share
premium
US$’000
–
(448)
(448)
–
760
(593)
167
1,733
(9,261)
–
(9,261)
–
–
593
593
(52,830)
Other
reserves
US$’000
Accumulated
losses
US$’000
Total
US$’000
4,611
(9,261)
(448)
(9,709)
130
760
–
890
(4,208)
Total
US$’000
At 1 January 2021
1,103
45,786
1,733
(52,830)
(4,208)
Total comprehensive loss for the period:
Loss for the period
Other comprehensive income
Total comprehensive loss for the period
Transactions with owners recorded
directly in equity:
Issue of share capital
Share-based payments for services rendered
Total transactions with owners recorded
directly in equity
Balance at 31 December 2021
–
–
–
1,840
–
1,840
2,943
–
–
–
4,675
–
4,675
50,461
–
(28)
(28)
(5,575)
–
(5,575)
–
390
390
2,095
–
–
–
(58,405)
(5,575)
(28)
(5,603)
6,515
390
6,905
(2,906)
The Company statement of changes in equity should be read in conjunction with the accompanying notes.
47
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Company Statement of Cash Flows
For the year ended 31 December 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest paid
Interest received
Net cash used in operating activities
Cash flow from investing activities
Investment in equity accounted associates
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issuance of shares
Loans to subsidiaries
Principal elements of lease payments
Net cash provided by or generated from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents brought forward
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents carried forward
31 December
2021
US$’000
31 December
2020
US$’000
Notes
7
7
24
18
21
17
–
(2,594)
(649)
1
(3,242)
–
–
5,669
(551)
–
5,118
1,876
1,480
(87)
3,269
150
(1,932)
(624)
28
(2,378)
(682)
(682)
–
(599)
(88)
(687)
(3,747)
5,324
(97)
1,480
The Company statement of cash flows should be read in conjunction with the accompanying notes.
48
Stock code: COROCoro Energy PLC Notes to the Financial Statements
For the year ended 31 December 2021
Note 1: Corporate information
Coro Energy plc (the “Company” and, together with its subsidiaries, the “Group”) is a company incorporated in
England and listed on the Alternative Investment Market of the London Stock Exchange. The Company’s registered
address is c/o Watson Farley & Williams LLP, 15 Appold Street, London EC2A 2HB, UK. The consolidated financial
statements for the year ended 31 December 2021 comprise the Company and its interests in its subsidiaries,
investments in associates and jointly controlled operations (together referred to as the “Group”), whose principal
activities are described further in the Directors’ Report on page 35.
Note 2: Basis of preparation
(a) Statement of compliance
The financial statements are prepared in accordance with UK-adopted international accounting standards and
with the requirements of the Companies Act 2006.
(b) Basis of measurement
These financial statements have been prepared on the basis of historical cost apart from non-current assets
(or disposal groups) held for sale, which are measured at fair value less costs of disposal and derivative financial
instruments recorded at fair value through profit and loss.
(c) Going concern
The Group and Company financial statements have been prepared under the going concern assumption, which
presumes that the Group and Company will be able to meet its obligations as they fall due for the foreseeable future.
On 31 December 2021, the Group had cash reserves of US$3.3m (excluding cash recorded within assets of the
Italian disposal group held for sale). Management have prepared a consolidated cash flow forecast to the end of
June 2023 inclusive of the Italian portfolio which is no longer for sale and shows that the Group has sufficient cash
resources to meet its obligations.
In making this assessment management considered the planned forecast expenditure in the various jurisdictions in
which it has a presence inclusive of general, administrative, and operating costs, capital expenditure and revenue from
the Italian portfolio and the solar project in Vietnam. Whilst there are risks to the forecast this is mainly viewed as being
to the level of gas production achieved in Italy and the related gas price and consequent sales proceeds received.
The going concern assumption does not include any further receipts from either debt or equity financing which
management believes is available and mitigates any risk to the revenue from Italy and/or Vietnam. In addition, the
planned capital expenditure in the Philippines is largely uncommitted and could be tailored to meet the Group
and Company cash position if deemed appropriate.
(d) Foreign currency transactions
The consolidated financial statements of the Group are presented in United States Dollars (“USD”), rounded to the
nearest US$1,000.
The functional currency of the Company and all UK domiciled subsidiaries is British Pounds Sterling (“GBP”). The
Group’s subsidiaries domiciled in Singapore have a functional currency of USD. The Group’s subsidiaries domiciled
in the Philippines have a functional currency of Philippines Pesos (“PHP”). Apennine Energy SpA, the Group’s
Italian subsidiary, included within the disposal group held for sale, has a functional currency of Euros.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in profit or loss as finance income or expense. Non-monetary assets and
liabilities denominated in foreign currencies are translated at the date of transaction and not retranslated.
The results and financial position of Group companies that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
• Assets and liabilities are translated at the closing rate;
•
Income and expenses are translated at average rates; and
• Equity balances are not retranslated. All resulting exchange differences are recognised in other
comprehensive income.
49
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 2: Basis of preparation continued
(e) Use of estimates and judgements
The preparation of the financial statements requires management to make judgments regarding the application
of the Group’s accounting policies, and to use accounting estimates that impact the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
This note sets out the estimates and judgements taken by management that are deemed to have a higher risk of
causing a material adjustment to the reported carrying amounts of assets and liabilities in future years.
(i) Key accounting judgements
Accounting for investment in ion Ventures Holdings Limited
In November 2020, the Group acquired a 20.3% shareholding in ion Ventures Holdings Limited (“IVHL”) in exchange
for cash consideration of £500k (US$682k). IVHL was founded in the UK in 2018 to exploit opportunities that arise
from the increasing complexity of energy systems, the shift to distributed generation and more localised networks,
and the need for flexible and responsive solutions.
Under IFRS, the accounting for an interest in another entity depends on the level of influence held over the
investee by the investor. Management have concluded that IVHL is an associate of the Group, due to Coro
exercising “significant influence” over IVHL. With reference to the factors outlined in IAS 28 Investments in
Associates and Joint Ventures, we concluded that significant influence arises as a result of:
• 20.3% shareholding in IVHL, which is above the 20% threshold at which significant influence is presumed to
exist under IFRS (though this presumption can be rebutted);
• Right to appoint one director (of five) to the Board of Directors of IVHL; and
• Ability to exercise reserved powers under a Shareholder Agreement to participate in the key strategic and
operational decisions of the investee, such as approval of annual budgets.
Associates are accounted for using the equity method, which is described further in note 3a.
Accounting for investment in Coro Renewables VN1 Joint Stock Company
In July 2021, the Group announced its intention to form a joint venture with Vinh Phuc Electrical Mechanical
Installation Co Ltd, trading as Vinh Phuc Energy JSC (“VPE”), the joint venture (“CRV1”) with the Company
contributing US$500k in cash for an 85% share of the joint venture and VPE contributing its existing 150 MW
project portfolio for a non-controlling 15% share of the joint venture. In October 2021, a binding shareholder
agreement was signed with VPE and the Group acquired an 85% interest in the newly incorporated Vietnamese
company, Coro Renewables VN1 Joint Stock Company, which owns 100% of Coro Renewables VN2 Company
Limited, which in turn owns 100% of Coro Renewables Vietnam Company Limited.
Under IFRS, the accounting for an interest in another entity depends on the level of influence held over the
investee by the investor. Management have concluded that CRV1 is an indirectly held subsidiary of the Company,
due to the Company controlling more than half of the voting rights. With reference to the factors outlined in IAS 27
Consolidated and Separate Financial Statements, we concluded that there were no contraindications of control.
• There is no agreement with VPE giving them control of the joint venture;
• There is no statute or agreement ceding control to any other party; and
• VPE does not have the power to appoint or remove the majority of the Board of Directors.
At 31 December 2021, the three Vietnamese Companies had not commenced trading and the Group’s initial
US$500k contribution had not been transferred to Vietnam; there are therefore no transactions relating to CRV1,
nor its subsidiary undertakings, recorded in these consolidated financial statements.
Share option and warrants
The Black-Scholes model is used to calculate the appropriate charge of the share options and warrants. The use of
this model to calculate the charge involves a number of estimates and judgements to establish the appropriate
inputs to be entered into the model, covering areas such as the use of an appropriate interest rate and dividend
rate, exercise restrictions and behavioural considerations. A significant element of judgement is therefore involved
in the calculation of the charge.
50
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 2: Basis of preparation continued
(ii) Key accounting estimates
Estimate of gas reserves and resources
The disclosed amount of the Group’s gas reserves and resources impacts a number of accounting estimates in
the financial statements including future cash flows used in asset impairment reviews, see note 13, and timing of
rehabilitation spend used to calculate rehabilitation provisions.
In respect of the Group’s Italian assets that are held for sale, estimation of recoverable quantities of Proved and
Probable reserves is based on a number of factors including expected commodity prices, discount rates, future
capital expenditure and operating costs impacting future cash flows. It also requires interpretation of complex
geological and geophysical models in order to make an assessment of the size, shape, depth and quality of
reservoirs, and their anticipated recoveries. The economic, geological and technical factors used to estimate
reserves may change from period to period.
The Group employs staff with the appropriate knowledge, skills and experience to estimate reserves quantities.
Periodically, the Group’s reserves calculations are also subject to independent third-party certification by a
competent person. The date of the last Competent Person’s Report issued in respect of the Group’s disclosed gas
reserves and resources was as follows:
•
•
Italian assets (Sillaro and Rapagnano fields): effective date 31 December 2019
Italian assets (other fields): effective date 31 December 2017
• Duyung PSC: effective date 22 May 2020.
Gas reserves and resources are disclosed in the Operational Report on page 16.
Measurement of non-current assets (and disposal groups) classified as held for sale (note 19)
At 31 December 2021, the Group classified the assets and liabilities of its Italian business (the “Italian portfolio”) as a
disposal group held for sale following a decision by the Board of Directors in 2019 to prioritise full divestment. Given
the Italian business represents a separate geographical area of operation for the Group, the Italian results have also
been treated as a discontinued operation.
In December 2019, the Group entered into a conditional sale and purchase agreement (“SPA”) with Zenith Energy
Ltd (“Zenith”) for the sale of the Italian Portfolio. The necessary Italian regulatory approvals for the disposal were not
obtained prior to a long stop date of 31 July 2020 and, as such, the disposal was mutually terminated by the parties.
However, the criteria within IFRS 5 were considered to be met at 31 December 2020 because the Board of Directors
remained committed to the divestment; this had been communicated to the market and indicative offers had
been received from several other interested parties.
In May 2021, the Group entered into a new conditional sale and purchase agreement (“SPA”) with Dubai Energy
Partners, Inc (“DEPI”) for the sale of the Italian Portfolio. Again, the necessary Italian regulatory approvals for the
disposal were not obtained prior to a long stop date of 26 February 2022 and, as such, the disposal was terminated
by the parties after the year end.
While the Italian portfolio is no longer for sale at 31 December 2021, the Board of Directors remained committed to
the sale and were working in good faith towards the completion of the sale in accordance with the conditional SPA
signed in May 2021.
As required by IFRS 5, the entire Italian business has been fair valued at the balance sheet date to determine if any
further write-downs are required. Management determined the fair value of the disposal group with reference
to the SPA agreed with DEPI, notwithstanding the post balance sheet termination of this agreement nor the
subsequent significant increases in the wholesale gas prices. This led to an impairment of US$894k, which has
been allocated across non-current assets on a pro-rata basis.
Assessment of indicators of impairment of intangible exploration and evaluation assets (note 13)
The Group’s exploration and evaluation assets, comprising assets related to the Duyung PSC (and excluding Italian
exploration and evaluation assets held in disposal group), are assessed for indicators of impairment under IFRS
6 Exploration for, and evaluation of, mineral resources. The Group acquired its 15% interest in the Duyung PSC in
April 2019. In Q4 2019, the operator of the Duyung venture undertook a two-well campaign designed primarily to
appraise the Mako gas field.
51
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 2: Basis of preparation continued
Following completion of the drilling programme, the operator of the Duyung venture engaged Gaffney, Cline and
Associates (“GCA”) to complete an independent resource audit for the Mako gas field.
GCA completed their audit in May 2020 and confirmed a significant resource upgrade for the Mako gas field
compared to their previous resource assessment released in January 2019 (the “2019 GCA Audit”). 2C (contingent)
recoverable resource estimates were increased to 495 Bcf (gross), an increase of approximately 79% compared with
the 2019 GCA Audit. In the upside case, the 3C (contingent) resources increased by approximately 108% compared
with the 2019 GCA Audit, to 817 Bcf (gross).
As a result of the resource upgrade, which was incorporated into our own updated economic modelling for
Duyung, no impairment indicators were noted.
Impairment testing of exploration and evaluation assets recorded as assets of a disposal group held for sale is
discussed above.
Rehabilitation provisions (note 15)
Costs relating to rehabilitation of oil and gas fields recorded within liabilities of a disposal group held for sale will
be incurred many years in the future and the precise requirements for these activities are uncertain. Technologies
and costs are constantly changing, as well as political, environmental, safety and public expectations. A change in
the key assumptions used to calculate rehabilitation provisions could have a material impact on the carrying value
of the provisions. Currently, the Group’s rehabilitation provisions relate solely to oil and gas fields in Italy, and are
recorded within liabilities of a disposal group held for sale.
The carrying value of these provisions in the financial statements represents an estimate of the present value of
the future costs expected to be incurred to rehabilitate each field, which are reviewed at least annually. Future
costs are estimated by internal experts, with external specialists engaged periodically to assist management.
These estimates are based on current price observations, taking into account developments in technology and
changes to legal and contractual requirements. Expectations regarding cost inflation are also incorporated. Future
cost estimates are discounted to present value using a rate that approximates the time value of money, which
ranges between 1.25% and 1.75% (2020: 1.25% to 1.75%) depending on the expected year of rehabilitation spend. The
discount rate is based on the average yield on Italian Government bonds of a duration that matches the expected
year of expenditures, incorporating a risk premium appropriate to the nature of the liabilities.
Recoverability of deferred tax assets (note 8)
The recoverability of deferred tax assets recorded within assets of a disposal group held for sale is dependent on
the availability of taxable profits in future years. The Group undertakes a forecasting exercise at each reporting
date to assess its expected utilisation of these losses. The key areas of estimation uncertainty in these forecasts are
future gas prices, production rates, capital and operating costs, and overhead expenses, all of which could impact
the generation of taxable profits by Italian subsidiaries. The model used to calculate expected utilisation of tax
losses is prepared on a consistent basis to the DCF models used to test for impairment, but with the inclusion of
corporate overheads and other non-asset specific costs. The DTA was partially written down in 2018, and again in
2020; no further write-down is deemed necessary at 31 December 2021.
Assessment of indicators of impairment of investment in associates (note 23)
In 2020, the Company acquired a 20.3% interest in ion Ventures Holdings Limited (“ion Ventures”). This investment
is accounted for as an associate using the equity method.
The Company considered whether there should be any impairment of the investment as at 31 December 2021 and
based on the forecasts prepared by the management of ion Ventures and the dividend stream expected from its
investment in Flexion Energy, the Company’s investment in ion Ventures is deemed to be recoverable in full.
Company only – impairment assessment for investment in subsidiaries (note 20)
The Company is required to assess its investments in subsidiaries for impairment at each reporting date. The
Company’s main assets are its Italian gas portfolio, held by Apennine Energy SpA (“Apennine”), and its interest
in the Duyung PSC, held by Coro Energy Duyung (Singapore) Pte Ltd (“CEDSPL”). As such, the recoverability of
investments in subsidiaries depends on the Company’s assessment of indicators of impairment of the underlying
assets recorded within its subsidiaries.
52
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 2: Basis of preparation continued
As noted above, and in note 13, the Company identified no indicators of impairment for its 15% interest in the
Duyung PSC and, accordingly, the Company’s investment in CEDSPL (held indirectly) is deemed to be recoverable
in full.
As noted further above, and in note 19, the Company’s investment in Apennine (held indirectly) was impaired to its
recoverable amount being the sale price agreed with DEPI in the SPA agreed in May 2021.
Note 3: Significant accounting policies
(a) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements include the results of Coro Energy plc and its subsidiary undertakings made
up to the same accounting date. Subsidiaries are entities controlled by the Group. The Group controls an entity
when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases. The
accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by
the Group. All intra-group balances, transactions, income and expenses are eliminated in full on consolidation.
(ii) Interests in other entities
The Group classifies its interests in other entities based on the level of control exercised by the Group over the
entity.
Associates
Associates are all entities over which the Group has significant influence but not control or joint control. This is
generally the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are
accounted for using the equity method of accounting.
Under the equity method of accounting, the investments are initially recognised at cost, including any directly
attributable transaction costs, and adjusted thereafter to recognise the Group’s share of the post-acquisition
profits or losses of the investee in profit or loss. The Group’s share of movements in other comprehensive income
of the investee are recognised in other comprehensive income. Dividends received or receivable from associates
and joint ventures are recognised as a reduction in the carrying amount of the investment.
Where the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity,
the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
other entity.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s
interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of equity-accounted investees have been changed where
necessary to ensure consistency with the policies adopted by the Group.
The carrying amount of equity-accounted investments is tested for impairment at least annually.
Other investments
In a situation where the Group has direct contractual rights to the assets, and obligations for the liabilities, of an
entity but does not share joint control, the Group accounts for its interest in those assets, liabilities, revenues and
expenses in accordance with the accounting standards applicable to the underlying line item. This is analogous to
the “joint operator” method of accounting outlined in IFRS 11 Joint arrangements.
(b) Taxation
Income tax expense or credit for the period is the tax payable on the current period’s taxable income, based on
the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially
enacted at the date of the statement of financial position, and any adjustment to tax payable in respect of
previous years.
53
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 3: Significant accounting policies continued
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. The following temporary differences are not provided for the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent
that the Group is able to control the timing of the reversal of the temporary difference and it is probable that they
will not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities using tax rates enacted at the date of the
statement of financial position.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets
and liabilities and where the deferred tax balances relate to the same taxation authority. Current tax assets and
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
(c) Property, plant and equipment
(i) Recognition and measurement
Property, plant and equipment comprises the Group’s tangible oil and gas assets together with office furniture
and equipment. Items of property, plant and equipment are recorded at cost less accumulated depreciation,
accumulated impairment losses and pre-commissioning revenue and expenses. Cost includes expenditure that is
directly attributable to acquisition of the asset.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised within
“other income” in profit or loss.
(ii) Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with
expenditure will flow to the Group.
(iii) Depreciation
Oil and gas assets
Oil and gas assets includes gas production facilities and the accumulation of all exploration, evaluation,
development and acquisition costs in relation to areas of interest in which production licences have been granted
and the related project has moved to the production phase.
Amortisation of oil and gas assets is calculated on the units-of-production (“UOP”) basis, and is based on Proved
and Probable reserves. The use of the UOP method results in an amortisation charge proportional to the depletion
of economically recoverable reserves. Amortisation commences when commercial levels of production are
achieved from a field or licence area.
The useful life of oil and gas assets, which is assessed at least annually, has regard to both its physical life limitations
and present assessments of economically recoverable reserves of the field at which the asset is located. These
calculations require the use of estimates and assumptions, including the amount of recoverable reserves and
estimates of future capital expenditure. The calculation of the UOP rate of depreciation/amortisation will be
impacted to the extent that actual production in the future is different from current forecast production based on
total proved reserves, or future capital expenditure estimates change.
Changes to recoverable reserves could arise due to changes in the factors or assumptions used in estimating
reserves, including:
• The effect of changes in commodity price assumptions; or
• Unforeseen operational issues that impact expected recovery of hydrocarbons.
Assets designated as held for sale, or included in a disposal group held for sale, are not depreciated.
54
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 3: Significant accounting policies
Other property, plant and equipment
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an
item of property, plant and equipment. The depreciation will commence when the asset is installed ready for use.
The estimated useful lives of each class of asset fall within the following ranges:
Office furniture and equipment
3–5 years
The residual value, the useful life and the depreciation method applied to an asset are reviewed at each
reporting date.
(iv) Impairment
The Group assesses at each reporting date whether there is an indication that an asset (or Cash Generating Unit
- “CGU”) may be impaired. For oil and gas assets, management has assessed its CGUs as being an individual field,
which is the lowest level for which cash inflows are largely independent of those of other assets. If any indication
exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s or CGU’s
recoverable amount. The recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal
(“FVLCD”) and value in use (“VIU”). Where the carrying amount of an asset or CGU exceeds its recoverable amount,
the asset/CGU is considered impaired and is written down to its recoverable amount.
The Group bases its impairment calculation on detailed budgets and forecasts, which are prepared separately for
each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecasts generally cover
the forecasted life of the CGUs. VIU does not reflect future cash flows associated with improving or enhancing an
asset’s performance.
For assets/CGUs, an assessment is made at each reporting date to determine whether there is an indication that
previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed
only if there has been a change in the assumptions used to determine the asset’s/CGU’s recoverable amount
since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset/
CGU does not exceed either its recoverable amount, or the carrying amount that would have been determined,
net of depreciation/amortisation, had no impairment loss been recognised for the asset/CGU in prior years. Such a
reversal is recognised in the income statement.
(d) Intangible assets
(i) Exploration and evaluation assets
Exploration and evaluation assets are carried at cost less accumulated impairment losses in the statement of
financial position. Exploration and evaluation assets include the cost of oil and gas licences, and subsequent
exploration and evaluation expenditure incurred in an area of interest.
Exploration and evaluation assets are not depreciated. When the commercial and technical feasibility of an area
of interest is proved, capitalised costs in relation to that area of interest are transferred to property, plant and
equipment (oil and gas assets) and depreciation commences in line with the depreciation policy outlined above.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical
feasibility and commercial viability or facts and circumstances suggest that the carrying value amount exceeds the
recoverable amount.
55
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 3: Significant accounting policies continued
Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances
exist:
•
•
the term of the exploration licence in the specific area of interest has expired during the reporting period or will
expire in the near future, and is not expected to be renewed;
substantive expenditure on further exploration for an evaluation of mineral resources in the specific area is not
budgeted nor planned;
• exploration for and evaluation of mineral resources in the specific area have not led to the discovery of
commercially viable quantities of mineral resources and the decision was made to discontinue such activities in
the specific area; or
•
sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the
carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful
development or by sale.
Areas of interest that no longer satisfy the above policy are considered to be impaired and are measured at their
recoverable amount, with any subsequent impairment loss recognised in the profit and loss.
(ii) Software
Costs for acquisition of software, including directly attributable costs of implementation, are capitalised as
intangible assets and amortised over their expected useful life (currently five years).
(iii) Goodwill
Goodwill arising from business combinations is included in intangible assets.
Goodwill is not amortised but it is tested for impairment annually, or more frequently if events or changes in
circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to
those cash-generating units or groups of cash-generating units that are expected to benefit from the business
combination in which the goodwill arose.
(e) Inventory
Inventory is comprised of drilling equipment and spares and is carried at the lower of cost and net realisable value.
Any impairment on value is taken to the income statement.
(f) Non-current assets (or disposal groups) held for sale and discontinued operations
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use, they are available for sale in their
present condition, they are being actively marketed, and a sale is considered highly probable. These conditions
must be continuing for the assets to continue to be classified as held for sale.
Disposal groups are measured at the lower of their carrying amount and fair value less costs to sell, except for
certain assets such as deferred tax assets, which are specifically exempt from this requirement. An impairment
loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to
sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group),
but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised
by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they
are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified
as held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of a disposal group classified as held for sale are
presented separately from the other assets in the balance sheet. The liabilities of a disposal group classified as held
for sale are presented separately from other liabilities in the balance sheet.
56
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 3: Significant accounting policies continued
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and
that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated
plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to
resale. The results of discontinued operations are presented separately in the statement of profit or loss.
(g) Investments and financial assets
(i) Classification
The Group classifies its financial assets in the following measurement categories:
•
those to be measured subsequently at fair value (either through other comprehensive income or through profit
or loss); and
•
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual
terms of the cash flows.
(ii) Recognition and measurement
A financial asset is recognised if the Group becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire
or if the Group transfers the financial asset to another party without retaining control or substantially all risks and
rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, i.e. the
date the Group commits itself to purchase or sell the asset.
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not
at fair value through profit or loss (“FVTPL”), transaction costs that are directly attributable to the acquisition of the
financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss.
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset
and the cash flow characteristics of the asset. Currently, the Group’s financial assets are all held for collection of
contractual cash flows, which are solely payments of principal and interest. Accordingly, the Group’s financial
assets are measured subsequent to initial recognition at amortised cost.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on
demand and form an integral part of the Group’s cash management are included as a component of cash and
cash equivalents for the purpose of the statement of cash flows.
(iii) Impairment
On a forward-looking basis, the Group estimates the expected credit losses associated with its receivables and
other financial assets carried at amortised cost, and records a loss allowance for these expected losses.
(iv) Investment in subsidiaries
In the Company balance sheet, investments in subsidiaries are carried at cost less accumulated impairment.
(h) Derivatives
Derivatives are initially recognised at fair value on the date a derivative contract is entered into, and they are
subsequently remeasured to their fair value at the end of each reporting period.
(i) Provisions
(i) Rehabilitation provision
Rehabilitation obligations arise when the Group disturbs the natural environment where its oil and gas assets are
located and is required by local laws/regulations to restore these sites.
Full provision for these obligations is made based on the present value of the estimated costs to be incurred
in dismantling infrastructure, plugging and abandoning wells and restoring sites to their original condition.
Changes to future cost estimates are capitalised and recorded in property, plant and equipment (oil and gas
assets) as rehabilitation assets, unless the carrying value of these assets is not supportable, in which case changes
to rehabilitation provisions are recorded directly in the income statement. Future cost estimates are inflated to
the expected year of rehabilitation activity and discounted to present value using a market rate of interest that is
deemed to approximate the time value of money.
57
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 3: Significant accounting policies continued
The estimated costs of rehabilitation are reviewed annually and adjusted against the relevant rehabilitation
asset or in the income statement, as appropriate. Annual increases in the provision relating to the unwind of the
discount rate are accounted for in the income statement as a finance expense.
(ii) Other provisions
Other provisions are measured at the present value of management’s best estimate of the expenditure required
to settle the present obligation at the end of the reporting period. The provisions are discounted to present
value using a market rate of interest that is deemed to approximate the time value of money. The increase in the
provision due to the passage of time is recognised as interest expense.
(j) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred, and subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in profit or loss over the period of the borrowings using the effective interest method. Loan fees paid
on the establishment of loan facilities are recognised as transaction costs of the loan and amortised over the life of
the borrowings.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
(k) Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the
financial year that are unpaid. The amounts are unsecured and are usually paid within 30 days of the invoice date.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the
reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost
using the effective interest method.
(l) Share capital
Ordinary Shares are classified as equity. Incremental costs directly attributable to issue of shares are recognised as
a deduction from equity, net of any tax effects.
(m) Share-based payments
Share-based payments relate to transactions where the Group receives services from employees or service
providers and the terms of the arrangements include payment of a part or whole of consideration by issuing
equity instruments to the counterparty. The Group measures the services received from non-employees, and the
corresponding increase in equity, at the fair value of the goods or services received. When the transactions are with
employees, the fair value is measured by reference to the fair value of the shares issued. The expense is recognised
over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.
(n) Revenue
Under IFRS 15 Revenue from Contracts with Customers, there is a five-step approach to revenue recognition:
Step 1: Identify the contract(s) with a customer;
Step 2: Identify the performance obligations in the contract;
Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations in the contract; and
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.
The Group has one revenue stream, being the sale of gas (recorded within loss from discontinued operations). Gas
is sold to wholesale customers under gas supply agreements, which have different volume and price specifications
(both fixed and variable). Gas sales revenue is recognised when control of the gas passes at the delivery point into
the local gas pipeline network, which is the only performance obligation. Revenue is presented net of value added
tax (“VAT”), rebates and discounts and after eliminating intra-group sales.
58
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 3: Significant accounting policies continued
(o) Leases
Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased
asset is available for use by the Group.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:
• Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• Variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
• Amounts expected to be payable by the Group under residual value guarantees;
• The exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
• Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of
the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is
used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security
and conditions.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over
the lease period.
Right-of-use assets are measured at cost which comprises the following:
• The amount of the initial measurement of the lease liability;
• Any lease payments made at or before the commencement date less any lease incentives received;
• Any initial direct costs; and
• Restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on
a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset’s useful life.
Payments associated with short-term leases (term less than 12 months) and all leases of low-value assets (generally
less than US$5k) are recognised on a straight-line basis as an expense in profit or loss.
(p) Research and Development
Development costs that are directly attributable to the design and development of identifiable and unique
projects controlled by the Group are recognised as intangible assets when the following criteria are met:
•
It is technically feasible to complete the project;
• Management intends to complete the project;
• There is sufficient certainty that contractual rights, planning and permitting will be agreed;
•
It can be demonstrated how the project will generate probable future economic benefits;
• Adequate technical, financial and other resources to complete the project are available; and
• The expenditure attributable to the project can be reliably measured.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred.
59
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 3: Significant accounting policies continued
(q) Changes to accounting policies, disclosures, standards and interpretations
(i) New and amended standards adopted by the Group
The following new standards, amendments and interpretations are effective for the first time in these financial
statements. However, none has had a material impact on the financial statements:
Standard
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark
Reform – Phase 2
Effective date
1 January 2021
Amendment to IFRS 16 in respect of COVID-19-Related Rent Concessions beyond 30 June 2021
1 January 2021
(ii) New standards not yet adopted
There are no new International Financial Reporting Standards and Interpretations issued but not effective for the
reporting period ending 31 December 2021 that will materially impact the Group.
Note 4: Segment information
The Group’s reportable segments as described below are based on the Group’s geographic business units. This
includes the Group’s upstream gas operations in Italy and South East Asia, along with the corporate head office
in the United Kingdom. This reflects the way information is presented to the Board of Directors. Results from the
Group’s Italian business are classified as a discontinued operation. See note 19.
Depreciation and
amortisation
Interest expense
Share of loss of associates
Segment loss before tax
from continuing operations
Segment loss before
tax from discontinued
operations
Italy
Asia
UK
Total
31
December
2021
US$’000
31
December
2020
US$’000
31
December
2021
US$’000
31
December
2020
US$’000
31
December
2021
US$’000
31
December
2020
US$’000
31
December
2021
US$’000
31
December
2020
US$’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(18)
(114)
(18)
(114)
(4,500)
(3,755)
4,500
(3,755)
(249)
(16)
(249)
(16)
(278)
(223)
(6,197)
(7,746)
(6,475)
(7,969)
(1,510)
(1,275)
–
–
Italy
Asia
–
UK
–
(1,510)
(1,275)
Total
31
December
2021
US$’000
31
December
2020
US$’000
31
December
2021
US$’000
31
December
2020
US$’000
31
December
2021
US$’000
31
December
2020
US$’000
31
December
2021
US$’000
31
December
2020
US$’000
Segment assets
8,224
11,417
17,985
17,511
4.212
2,316
30,421
31,244
Segment liabilities
(8.889)
(10,921)
(1,073)
(9)
(25,989)
(25,249)
(35,951)
(36,179)
60
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 5: General and administrative expenses
Employee benefits expense (note 6)
Business development
Corporate and compliance costs
Investor and public relations
G&A – Duyung venture
Other G&A
Share-based payments (note 23)
31 December
2021
US$’000
31 December
2020
US$’000
1,031
786
451
247
199
314
248
3,276
861
347
501
215
179
141
698
2,942
Auditor’s remuneration
Services provided by the Group’s auditor and its associates
During the year, the Group (including its overseas subsidiaries) obtained the following services from the
Company’s auditor and its associates:
Fees payable to the Company’s auditor for the audit of the Parent Company and
consolidated financial statements
Fees payable to the Company’s auditor for other services:
Audit of subsidiaries
Note 6: Staff costs and directors’ emoluments
Staff costs
Wages and salaries
Pensions and other benefits
Social security costs
Share-based payments (note 23)
Total employee benefits
Average number of employees from continuing operations
(excluding Non-Executive Directors)
Directors’ emoluments
Wages and salaries
Pensions and other benefits
Social security costs
Share-based payments (note 22)
Total employee benefits
The highest paid Director received aggregate emoluments of US$205k (2020: US$281k) as disclosed in the
Directors’ Remuneration Report on page 33.
31 December
2021
US$’000
31 December
2020
US$’000
49
–
40
3
Group
31 December
2021
US$’000
31 December
2020
US$’000
327
18
41
88
474
2
169
9
17
101
296
2
Group
31 December
2021
US$’000
31 December
2020
US$’000
568
7
70
160
805
592
11
63
597
1,263
61
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS
Note 7: Finance income/expense
Finance income
Interest income
Foreign exchange gain
Total finance income
Finance expense
Interest on borrowings
Finance charge on lease liabilities
Unrealised loss on foreign exchange forward contracts
Foreign exchange loss
Total finance expense
Note 8: Income tax
Income tax
Deferred tax
Total deferred tax
Total tax expense
Income tax expense is attributable to:
Loss from discontinued operations
Group
31 December
2021
US$’000
31 December
2020
US$’000
1
2,238
2,239
Group
28
–
28
31 December
2021
US$’000
31 December
2020
US$’000
4,500
3,755
–
–
651
5,151
6
6
1,139
4,906
Group
31 December
2021
US$’000
31 December
2020
US$’000
–
–
–
–
–
(923)
(923)
(923)
(923)
(923)
Numerical reconciliation of income tax result recognised in the statement of comprehensive income to tax
benefit/expense calculated at the Group’s statutory income tax rate is as follows:
Loss from continuing operations before tax
Loss from discontinued operations before tax
Total loss before tax
Income tax benefit using the Group’s blended tax rate of 19% (2020: 20%)
Non-deductible expenses
Prior year adjustment
Write-down of deferred tax assets
Current year losses and temporary differences for which no deferred tax asset
was recognised
Income tax benefit/(expense)
62
Group
31 December
2021
US$’000
31 December
2020
US$’000
(6,475)
(1,510)
(7,985)
1,180
(339)
(260)
–
(581)
–
(7,969)
(1,275)
(9,244)
1,815
(60)
(139)
(923)
(1,616)
(923)
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 8: Income tax continued
Deferred tax
Deferred tax assets totalling US$1.3m (2020: US$1.5) are recorded within assets of the disposal group, and have
been recognised in respect of tax losses and temporary differences based on management assessment that
future taxable profit will be available against which the Italian subsidiary company can utilise the benefits. No
DTA in respect of carried forward tax losses has been recognised in respect of any UK or Singapore domiciled
Group company due to doubt about the availability of future profits in these companies. Total unrecognised losses
(gross) in respect of continuing operations are US$17m (2020: US$13m). Unrecognised losses (gross) relating to
discontinued operations total US$82m (2020: US$99m).
Note 9: Earnings per share
Basic loss per share from continuing operations (US$)
Diluted loss per share from continuing operations (US$)
Basic loss per share from discontinued operations (US$)
Diluted loss per share from discontinued operations (US$)
31 December
2021
31 December
2020
(0.003)
(0.003)
(0.001)
(0.001)
(0.010)
(0.010)
(0.003)
(0.003)
The calculation of basic loss per share from continuing operations was based on the loss attributable to
shareholders of US$6.4m (2020: US$8.0) and a weighted average number of Ordinary Shares outstanding during
the year of 1,917,559,412 (2019: 793,502,096).
Basic loss per share from discontinued operations was based on the loss attributable to shareholders from
discontinued operations of US$1.5m (2020: US$2.2m).
Diluted loss per share from continuing and discontinued operations for the current and comparative periods
is equivalent to basic loss per share since the effect of all dilutive potential Ordinary Shares is anti-dilutive. The
potential dilutive shares includes warrants issued to Eurobond holders and options issued to Directors and
management (note 22).
Note 10: Inventory
Inventory – Duyung PSC
Group
31 December
2021
US$’000
31 December
2020
US$’000
37
37
37
37
Inventory represents the Group’s share of inventory held by the Duyung PSC, which is mainly comprised of
drilling spares.
63
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 11: Trade and other receivables
Current:
Indirect taxes receivable
Other receivables
Prepayments
Current:
Indirect taxes receivable
Other receivables
Intercompany receivables
Prepayments
Note 12: Property, plant and equipment
Office furniture and equipment
Group
31 December
2021
US$’000
31 December
2020
US$’000
39
20
47
106
44
–
74
118
Company
31 December
2021
US$’000
31 December
2020
US$’000
39
2
576
63
680
44
–
355
64
463
Group
31 December
2021
US$’000
31 December
2020
US$’000
10
10
16
16
Reconciliation of the carrying amounts for each class of property, plant and equipment are set out below:
Company
31 December
2021
US$’000
31 December
2020
US$’000
16
3
(9)
–
–
–
10
50
–
(13)
–
(20)
(1)
16
Office furniture and equipment:
Carrying amount at beginning of period
Additions
Depreciation expense
Reclassification to assets of disposal group held for sale
Disposals
Effect of foreign exchange
Carrying amount at end of period
64
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 12: Property, plant and equipment continued
Office furniture and equipment
Company
31 December
2021
US$’000
31 December
2020
US$’000
10
10
16
16
Reconciliation of the carrying amounts for each class of property, plant and equipment are set out below:
Office furniture and equipment:
Carrying amount at beginning of period
Additions
Depreciation expense
Disposals
Effect of foreign exchange
Carrying amount at end of period
Note 13: Intangible assets
Exploration and evaluation assets
Goodwill
Software
Company
31 December
2021
US$’000
31 December
2020
US$’000
16
3
(9)
–
–
10
50
–
(13)
(20)
(1)
16
Group
31 December
2021
US$’000
31 December
2020
US$’000
17,540
17,251
754
15
–
23
18,309
17,274
Reconciliation of the carrying amounts for each material class of intangible assets are set out below:
Exploration and evaluation assets:
Carrying amount at beginning of period
Additions
Impact of foreign exchange
Carrying amount at end of period
Group
31 December
2021
US$’000
31 December
2020
US$’000
17,251
17,247
289
–
4
–
17,540
17,251
Exploration and evaluation assets relate to the Group’s interest in the Duyung PSC. No indicators of impairment of
these assets were noted. See note 2e.
65
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 13: Intangible assets continued
Goodwill
Recognised on acquisition
Group
31 December
2021
US$’000
31 December
2020
US$’000
754
754
–
–
As explained further in note 14, goodwill was recognised following the acquisition of GEPL. No impairment of
goodwill was noted following testing performed at 31 December 2021.
Software
Note 14: Business combination
Company
31 December
2021
US$’000
31 December
2020
US$’000
15
15
23
23
Global Energy Partnership Limited
On 17 March 2021, the Company completed the acquisition of 100% of the issued capital of Global Energy
Partnership Limited (“GEPL”) in exchange for 142.5 million new Ordinary Shares in the Company. GEPL is
incorporated in the United Kingdom and involved in the origination and development of renewable energy
projects in South East Asia. On the same date, GEPL co-founders Mark Hood and Michael Carrington joined the
Company in the roles of CEO and COO respectively, with Mark Hood also appointed as a Director of the Company.
Background to the acquisition
Since inception, GEPL has screened over 25 GW of renewable energy projects and has identified a shortlist of
priority pipeline projects for investment across the Philippines, Vietnam and Indonesia, with an initial focus on the
Philippines.
For the financial period ended 31 January 2021, GEPL generated no revenues, incurred a trivial net loss and had net
liabilities of £3k (approx. US$4k).
The acquisition met a number of key strategic objectives for the Group, including:
• Acquiring GEPL’s pipeline of early-stage renewable energy projects in South East Asia, with an initial focus on
the Philippines;
• Securing an experienced Executive team with a proven record of originating and executing energy projects;
and
• Building on the Company’s investment in ion Ventures in 2020, acquiring a complementary business with
opportunities for project co-development in the future.
Consideration for the acquisition
In exchange for acquiring 100% of the issued capital of GEPL, the Company issued 142.5 million new Ordinary Shares
to the former GEPL shareholders at 0.4p per share, being the same price as the fundraise completed concurrently
with the acquisition, resulting in a total value of consideration of £570k (US$754k), which together with transaction
costs of US$379k was recorded as an investment in GEPL by the Company. Restated at the year-end exchange rate
the carrying value of the investment is US$1.1m. Transaction costs were expensed within General and Administrative
expenses as business development costs in the Group’s consolidated financial statements.
66
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 14: Business combination continued
Fair value of assets and liabilities acquired
At acquisition, GEPL’s projects were at an early stage, with the initial focus being on two high-graded opportunities
in the Philippines: a 100 MW solar project and 100 MW onshore wind project. Work done on the projects prior to
acquisition date mainly comprised GEPL management’s time including pre-feasibility studies, understanding of
relevant laws/regulations, site visits, community engagement, liaising with potential engineering contractors and
financiers, and building networks and partnerships locally. The Directors believe there is significant latent value
which can be unlocked by investing in these Filipino opportunities; however, at the date of acquisition, there were
no contractual rights associated with the projects and accordingly, we have assessed that there were no identifiable
assets under IFRS. Similarly, GEPL had no liabilities, with all creditors extinguished prior to acquisition completion.
Accordingly, the full purchase consideration of £570k (US$754k at the date of the transaction) has been allocated
to goodwill. While GEPL has identified opportunities in Vietnam and Indonesia, we view the principal value in
the company as being its Philippines project pipeline and associated intellectual property and the goodwill
has been allocated accordingly. No impairment of goodwill was identified in the period from acquisition to
31 December 2021.
Revenue and profit contribution
The acquired business contributed nil revenues and a net loss of US$23k to the Group in the period from
17 March 2021 to 31 December 2021. If the business were acquired on 1 January 2021, the Group’s loss before tax
would have increased by US$2k.
Note 15: Trade and other payables
Current
Trade payables
Other payables
Accrued expenses
Current
Trade payables
Accrued expenses
Group
31 December
2021
US$’000
31 December
2020
US$’000
216
90
119
425
105
61
43
209
Company
31 December
2021
US$’000
31 December
2020
US$’000
687
119
806
827
34
861
Included within trade payables of the Company is a payable of US$464k (2020: US$737k) due to Sound Energy plc
(“Sound”) for the expected sales proceeds to be received for the sale of the Badile land, which are due to Sound
under an agreement entered into by the two companies in 2018. Apennine Energy SpA, the Company’s subsidiary,
entered into an agreement with Immobilandia Srl to dispose of the Badile land in two parcels, Area 1 and Area 2.
The sale of Area 1 was completed on 12 February 2021 for proceeds of €250k (US$283k at year-end exchange rates),
which were remitted to Sound net of costs incurred by Apennine.
Under the terms of sale of Area 2, Immobilandia will first have to complete all rehabilitation works relating to the
Badile licence and Moirago-1 well at its own expense prior to completing the acquisition of the land. Subject to
satisfactory completion of the rehabilitation works, Immobilandia will acquire Area 2 for €350k (US$396k at year-
end exchange rates). The Company has therefore recognised the net payable to Sound of US$464k above.
The receivable from Sound for Badile rehabilitation costs in note 11 has been reduced to nil reflecting the contract
with Immobilandia.
67
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 16: Borrowings
Current
Eurobond
Non-current
Eurobond
31 December
2021
US$’000
31 December
2020
US$’000
26,637
26,637
689
689
–
–
24,360
24,360
In 2019, the Group successfully completed the issue of €22.5m three-year Eurobonds with attached warrants
to key institutional investors. The bonds were issued in two equal tranches A and B, ranking pari passu, with
Tranche A paying a 5% cash coupon annually in arrears, and Tranche B accruing interest at 5% per annum payable
on redemption.
The Eurobonds were due to mature on 12 April 2022 at 100% of par value plus any accrued and unpaid coupon.
Bond subscribers were issued with 41,357,500 warrants to subscribe for ten new Ordinary Shares in the Company
at an exercise price of 4p per share at any time over the three-year term of the bonds. An additional 6,000,000
warrants were issued to the firm subscriber Lombard Odier Asset Management (Europe) Limited and underwriter
Pegasus Alternative Fund Ltd.
The warrants were valued on grant date at 3.3p per warrant using the Black-Scholes method, with the total fair
value of warrants (US$2.0m) treated as a transaction cost and amortised over the life of the bonds.
The bonds were initially recognised at fair value and subsequently are recorded at amortised cost, with an average
effective interest rate of 18.10%.
In March 2022, the tranche B Noteholders approved the extension of the maturity of the tranche B bonds by two
years to 12 April 2024 with an increase in the coupon to 10% accrued annually and payable on redemption.
In April 2022, the tranche A Noteholders approved the extension of the maturity of the tranche A bonds by two
years to 12 April 2024 with an increase in the coupon to 10% accrued annually and payable on redemption.
In addition, the Company undertook to the Noteholders that in the event of a sale of the Company’s interest in
the Duyung PSC to utilise the net cash proceeds of such disposal(s) to first repay the capital and rolled up interest
on the Notes and thereafter to distribute 20% of remaining net proceed(s) to Noteholders. The remaining net
proceeds of any sales would be retained and/or distributed to shareholders by the Company (see note 2c and note
27 for further explanation).
Net debt reconciliation
An analysis of net debt and the movements in net debt for each of the periods presented is shown below:
Group
31 December
2021
US$’000
31 December
2020
US$’000
3,334
1,706
(26,637)
(25,049)
–
–
(23,303)
(23,343)
Cash and cash equivalents
Borrowings
Lease liabilities
Net debt
68
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Total
US$’000
(13,717)
(3,857)
(3,755)
158
(2,172)
(23,343)
2,364
(4,512)
2,188
(23,303)
Total
US$’000
46,889
797
5,670
48
53,404
Total
US$’000
46,759
Note 16: Borrowings continued
Net debt as at 1 January 2020
Cashflows
Eurobond amortisation
Lease terminations
Effects of foreign exchange
Net debt as at 31 December 2020
Cashflows
Eurobond amortisation
Effects of foreign exchange
Cash and cash
equivalents
US$’000
Borrowings
US$’000
Lease
liabilities
US$’000
(19,843)
(248)
6,374
(4,563)
–
–
(105)
1,706
1,715
–
(87)
618
(3,755)
–
(2,069)
(25,049)
649
(4,512)
2,275
88
–
158
2
–
–
–
–
–
Net debt as at 31 December 2021
3,334
(26,637)
Note 17: Share capital and share premium
As at 1 January 2021
Shares issued during the period:
Issued as consideration for the acquisition of GEPL
Proceeds from share issuance
Issued for services rendered
Closing balance at 31 December 2021
As at 1 January 2020
Shares issued during the period:
Issued for services rendered
Closing balance at 31 December 2020
Number
000s
806,908
142,500
1,162,215
12,414
2,124,036
Number
000s
789,586
17,322
806,908
Nominal
value
US$’000
Share
premium
US$’000
1,103
45,786
200
1,624
16
2,943
597
4,046
32
50,461
Nominal
value
US$’000
Share
premium
US$’000
1,080
45,679
23
1,103
107
130
45,786
46,889
All Ordinary Shares are fully paid and carry one vote per share and the right to dividends. In the event of winding
up the Company, Ordinary shareholders rank after creditors. Ordinary Shares have a par value of £0.001 per share.
Share premium represents the issue price of shares issued above their nominal value. As at the date of these
financial statements, the Company has unused authority to issue up to 1,381,257,206 new Ordinary Shares.
No dividends were paid or declared during the current period (2020: nil).
69
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 18: Reserves
Merger reserve
The Merger reserve of US$9.7m relates to the reorganisation of ownership of Northsun Italia SpA, which occurred
in the first half of 2017, being the difference between the value of shares issued and the nominal value of the
subsidiary’s shares received.
Other reserves
Share-based payments reserve
The increase in share-based payments reserve is attributable to the current period charge relating to options
issued to Directors and management of the Company and warrants issued in consideration for services rendered,
which was US$391k (2020: US$760k). US$nil (2020: US$593k) share options lapsed during the year and were
recycled to accumulated losses.
Functional currency translation reserve
The translation reserve comprises all foreign currency differences arising from translation of the financial position
and performance of the Parent Company and certain subsidiaries, which have a functional currency different to
the Group’s presentation currency of USD. The total loss on foreign exchange recorded in other reserves for the
period was US$58k (2020: US$840k loss).
Note 19: Discontinued operations
At 31 December 2021, the Group classified the assets and liabilities of its Italian business (the “Italian portfolio”) as a
disposal group held for sale following a decision by the Board of Directors in 2019 to prioritise full divestment. Given
the Italian business represents a separate geographical area of operation for the Group, the Italian results have also
been treated as a discontinued operation.
In December 2019, the Group entered into a conditional sale and purchase agreement (“SPA”) with Zenith Energy
Ltd (“Zenith”) for the sale of the Italian portfolio. The necessary Italian regulatory approvals for the disposal were not
obtained prior to a long stop date of 31 July 2020 and, as such, the disposal was mutually terminated by the parties.
However, the criteria within IFRS 5 were considered to be met at 31 December 2020 because the Board of Directors
remained committed to the divestment; this had been communicated to the market and indicative offers had
been received from several other interested parties.
In May 2021, the Group entered into a new conditional sale and purchase agreement (“SPA”) with Dubai Energy
Partners, Inc (“DEPI”) for the sale of the Italian Portfolio. Again, the necessary Italian regulatory approvals for the
disposal were not obtained prior to a long stop date of 26 February 2022 and, as such, the disposal was terminated
by the parties after the year end.
While the Italian portfolio is no longer for sale at 31 December 2021, the Board of Directors remained committed to
the sale and were working in good faith towards the completion of the sale in accordance with the conditional SPA
signed in May 2021.
70
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 19: Discontinued operations continued
The results of the Italian operations for the period are presented below:
Revenue
Operating costs
Depreciation and amortisation expense
Gross profit/(loss)
Other income
General and administrative expenses
Change in rehabilitation provisions
Impairment losses
Loss from operating activities
Finance income
Finance expense
Loss before tax
Income tax benefit/(expense)
Loss for the period after tax
31 December
2021
US$’000
31 December
2020
US$’000
1,202
(971)
–
231
1,214
(469)
(25)
(2,382)
(1,431)
–
(79)
(1,510)
–
(1,510)
803
(1,010)
–
(207)
41
(661)
523
(910)
(1,214)
21
(82)
(1,275)
(923)
(2,198)
The major classes of assets and liabilities of the Italian operations classified as held for sale as at 31 December 2021
are as follows:
Assets
Property, plant and equipment
Exploration and evaluation assets
Right-of-use assets
Land
Deferred tax assets
Inventories
Trade and other receivables
Other financial assets
Cash
Total assets
Liabilities
Trade and other payables
Lease liabilities
Provisions
Total liabilities
Net assets
31 December
2021
US$’000
31 December
2020
US$’000
3,499
1,574
–
396
1,342
163
1,033
217
8.224
1,298
–
7,591
8,889
(665)
4,622
1,992
108
1,927
1,455
300
958
–
55
11,417
1,702
62
9,157
10,921
496
71
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 19: Discontinued operations continued
The net cash flows of the Italian operations were as follows:
Net cash flow from operating activities
Net cash flow from investing activities
Net cash flow from financing activities
Net cash inflow/(outflow)
31 December
2021
US$’000
31 December
2020
US$’000
(953)
1,195
(80)
162
(533)
(58)
480
(111)
As explained in note 2e, there were no specific impairments recorded in 2021 to oil and gas assets (producing assets
within PPE and development assets within intangible assets). An impairment of US$137k was recorded on other
PPE (office furniture and equipment) and right-of-use assets, representing the amount that would have otherwise
been depreciated if IFRS 5 accounting was not applied. The disposal group as a whole was tested for impairment as
required by IFRS 5. This resulted in an impairment of US$894k, which was allocated across non-current assets pro-rata.
Refer to note 15 for further discussion on the presentation of balances owing to and from Sound Energy, which
relate to the disposal group.
Note 20: Investment in, and loans to, subsidiaries
Cost
At 1 January
Additions
Other adjustments
At 31 December
Accumulated impairment
At 1 January
Impairment
At 31 December
Impact of foreign exchange
Net book value
At 31 December
Company
2021
US$’000
2020
US$’000
51,255
1,119
–
52,374
(33,298)
–
(33,298)
160
51,812
–
(557)
51,255
(32,222)
(1,076)
(33,298)
730
19,236
18,687
In March 2021, the Company acquired 100% of the issued capital of Global Energy Partnership Limited (“GEPL”)
in exchange for 142.5 million new Ordinary Shares in the Company at 0.4p per share, being the same price as
the fundraise completed concurrently with the acquisition, resulting in a total value of consideration of £570k
(US$754k), which together with transaction costs of US$379k was recorded as an investment in GEPL by the
Company. Restated at the year-end exchange rate at 31 December 2021 the carrying value of the investment is
US$1.1m.
In December 2020, an impairment of $1.1m was recorded on the value of the Company’s investment in Apennine
Energy SpA, which is held indirectly through intermediate holding companies.
In October 2021, the Company made a legally binding commitment to invest US$500k into Coro Renewables
VN1 Joint Stock Company (“CRV1”); however, as at 31 December 2021, the investment had not been made and the
carrying value of CRV1 in these consolidated financial statements is therefore recorded as $nil.
72
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 20: Investment in, and loans to, subsidiaries continued
The Company’s subsidiary undertakings at the date of issue of these financial statements are set out below:
Name
Incorporated
Principal activity
% owned Registered address
Apennine Energy SpA*
Italy
Exploration, development
and production company
Coro Europe Limited*
England
Holding company
Coro Energy Asia
Limited*
Coro Energy Holdings
Cell A Limited
Coro Energy
(Singapore) Pte Ltd*
Coro Energy Bulu
(Singapore) Pte Ltd*
England
Holding company
England
Holding company
Singapore
Holding company
Singapore
Holding company
Coro Energy Duyung
(Singapore) Pte Ltd*
Singapore
Exploration and
development company
Coro Asia
Renewables Ltd†
Coro Clean Energy
Philippines Inc*
Scotland
Holding company
Philippines
Exploration and
development company
100%
100%
100%
100%
100%
100%
100%
100%
100%
Coro Philippines
Project 109 Inc*
Philippines
Exploration and
development company
100%
Coro Philippines
Project 121 Inc*
Philippines
Exploration and
development company
100%
Coro Philippines
Project 128 Inc*
Philippines
Exploration and
development company
100%
Coro Clean Energy Ltd England
Holding company
Coro Clean Energy
Vietnam Ltd*
Coro Renewables VN1
Joint Stock Company*
Coro Renewables VN2
Company Ltd*
England
Holding company
Vietnam
Holding company
Vietnam
Holding company
Coro Renewables
Vietnam Company Ltd*
Vietnam
Exploration and
development company
* Indirectly held.
† Formerly Global Energy Partnership Limited, acquired on 17 March 2021.
100%
100%
85%
85%
85%
Via XXV Aprile 5, San Donato Milanese,
(MI) 2009, Italy
c/o Pinsent Masons LLP, 1 Park Row,
Leeds, England LS1 5AB
c/o Pinsent Masons LLP, 1 Park Row,
Leeds, England LS1 5AB
c/o Pinsent Masons LLP, 1 Park Row,
Leeds, England LS1 5AB
80 Robinson Road #02-00, Singapore
068898
80 Robinson Road #02-00, Singapore
068898
80 Robinson Road #02-00, Singapore
068898
12 Traill Drive, Montrose
DD10 8SW, Scotland
1008 The Infinity Tower, 26th Street,
Bonifacio Global City, Taguig City,
Fourth District, National Capital
Region, Philippines, 1634.
1008 The Infinity Tower, 26th Street,
Bonifacio Global City, Taguig City,
Fourth District, National Capital
Region, Philippines, 1634
1008 The Infinity Tower, 26th Street,
Bonifacio Global City, Taguig City,
Fourth District, National Capital
Region, Philippines, 1634
1008 The Infinity Tower, 26th Street,
Bonifacio Global City, Taguig City,
Fourth District, National Capital
Region, Philippines, 1634
c/o Pinsent Masons LLP, 1 Park Row,
Leeds, England LS1 5AB
c/o Pinsent Masons LLP, 1 Park Row,
Leeds, England LS1 5AB
110 Bui Ta Han Street, An Phu Ward,
Thu Duc City, Ho Chi Minh City, Vietnam
110 Bui Ta Han Street, An Phu Ward,
Thu Duc City, Ho Chi Minh City, Vietnam
110 Bui Ta Han Street, An Phu Ward,
Thu Duc City, Ho Chi Minh City, Vietnam
73
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 20: Investment in, and loans to, subsidiaries continued
The following subsidiaries are exempt from audit for the 2021 financial year under s479A of the Companies Act
2006: Coro Clean Energy Limited, Coro Energy Asia Limited, Coro Energy Holdings Cell A Limited, Coro Clean
Energy Vietnam Limited, and Coro Asia Renewables Limited.
Loans to subsidiaries
Current
Loans to subsidiaries
At 31 December
Company
2021
US$’000
2020
US$’000
666
666
341
341
Loans to subsidiaries are unsecured, interest free and are repayable on demand. Loans are stated after an
impairment of US$403k at the year-end exchange rate recorded in 2020 on loans to Apennine.
Note 21: Financial instruments
Carrying amount versus fair value
The fair values of financial assets and financial liabilities, together with the carrying amounts in the consolidated
statement of financial position, are as follows:
31 December 2021
Financial assets
Trade receivables (current and non-current)
Cash and cash equivalents
Financial liabilities
Trade and other payables
Borrowings (current and non-current)
Group
Carrying
amount
US$’000
Fair value
US$’000
41
3,334
383
26,637
41
3,334
383
26,637
74
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 21: Financial instruments continued
31 December 2020
Financial assets
Trade receivables (current and non-current)
Derivative financial instruments
Cash and cash equivalents
Financial liabilities
Trade and other payables
Borrowings (current and non-current)
31 December 2021
Financial assets
Trade and intercompany receivables (current and non-current)
Loans to subsidiaries
Cash and cash equivalents
Financial liabilities
Trade and other payables
Borrowings (current and non-current)
31 December 2020
Financial assets
Trade and intercompany receivables (current and non-current)
Loans to subsidiaries
Derivative financial instruments
Cash and cash equivalents
Financial liabilities
Trade and other payables
Borrowings (current and non-current)
Group
Carrying
amount
US$’000
43
10
1,706
Fair value
US$’000
43
10
1,706
209
25,049
209
25,049
Company
Carrying
amount
US$’000
Fair value
US$’000
616
666
3,269
616
666
3,269
765
26,637
765
26,637
Company
Carrying
amount
US$’000
Fair value
US$’000
402
341
10
1,480
402
341
10
1,480
861
25,049
861
25,049
75
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 21: Financial instruments continued
Determination of fair values
All the Group’s financial instruments are carried at amortised cost with the exception of derivative financial
instruments, which are recorded at fair value through profit and loss. The carrying value of trade and other
receivables, cash and cash equivalents and trade and other payables approximates their fair value. Borrowings
comprises the Group’s Eurobond, which is listed on the Luxembourg Stock Exchange. To date, no bonds have been
traded so carrying value is deemed to approximate fair value at the balance sheet date.
Financial risk management
Exposure to credit, market and liquidity risks arise in the normal course of the Group’s business.
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and
processes for measuring and managing risk, and the management of capital.
Risk recognition and management are viewed as integral to the Group’s objectives of creating and maintaining
shareholder value, and the successful execution of the Group’s strategy. The Board as a whole is responsible for
oversight of the processes by which risk is considered for both ongoing operations and prospective actions. In
specific areas, it is assisted by the Audit Committee.
Management is responsible for establishing procedures that provide assurance that major business risks are
identified, consistently assessed and appropriately addressed.
(i) Credit risk
The Group is exposed to credit risk on its cash and cash equivalents, trade and other receivables and derivative
financial instruments. The maximum exposure to credit risk is represented by the carrying amount of each
financial asset as shown in the table above and in note 19.
Credit risk with respect to cash is reduced through maintaining banking relationships with financial intermediaries
with acceptable credit ratings. All banks with which the Group has a relationship have an investment grade credit
rating and a stable outlook, according to recognised credit rating agencies.
The Group undertakes credit checks for all material new counterparties prior to entering into a contractual
relationship.
(ii) Market risk
Interest rate risk
The Group is primarily exposed to interest rate risk arising from cash and cash equivalents that are interest bearing.
The Group’s Eurobond bears interest at a fixed rate. Interest rate risk is currently not material for the Group.
Currency risk
The Group operates internationally and is exposed to foreign exchange risk. Foreign exchange risk arises from
future commercial transactions and recognised assets and liabilities denominated in a currency that is not the
functional currency of the relevant Group entity. The Group’s primary currency exposure is to Euros, which is the
denomination of the Eurobond. The Group is also exposed to changes in the Sterling exchange rate against the US
Dollar. The Group holds a majority of its cash in US Dollars, which is the currency in which the Group’s investment
expenditures in South East Asia are denominated. This gives rise to Sterling exposure due to a predominantly
Sterling cost base in the UK. The Group’s policy is to hedge up to 40% of Sterling exposure through simple forward
contracts, which are recorded as derivative financial instruments in the balance sheet.
The Group’s and Company’s exposure to foreign currency risk at the end of the reporting period is summarised
below. All amounts are presented in US Dollar equivalent.
Cash and cash equivalents
Trade and other payables
Borrowings (current and non-current)
Net exposure
76
2021
$’000
USD
2,649
(87)
–
2,562
Group
2021
$’000
EUR
113
(124)
(26,637)
(26,648)
2020
$’000
USD
1,299
(4)
–
1,295
2020
$’000
EUR
172
(4)
(25,049)
(24,881)
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 21: Financial instruments continued
Trade and other receivables (current and non-current)
Cash and cash equivalents
Loans to subsidiaries
Trade and other payables
Borrowings (current and non-current)
Net exposure
2021
$’000
USD
2,649
1,008
(87)
–
3,570
Company
2021
$’000
EUR
–
86
27
(1,694)
(26,637)
(28,218)
2020
$’000
USD
204
1,299
–
(4)
–
1,499
2020
$’000
EUR
–
159
341
(742)
(25,049)
(25,291)
Sensitivity analysis
As shown in the table above, the Group is primarily exposed to changes in the GBP:USD exchange rate through its
cash balance held in USD by the Company, and to changes in the GBP:EUR exchange rate due to the Eurobond
denominated in EUR. The table below shows the impact in USD on pre-tax profit and loss of a 10% increase/
decrease in the GBP to USD exchange rate, holding all other variables constant. Also shown is the impact of a 10%
increase/decrease in the GBP to EUR exchange rate, being the other primary currency exposure.
31 December 2021
USD:GBP exchange rate increases 10%
USD:GBP exchange rate decreases 10%
EUR:GBP exchange rate increases 10%
EUR:GBP exchange rate decreases 10%
31 December 2020
USD:GBP exchange rate increases 10%
USD:GBP exchange rate decreases 10%
EUR:GBP exchange rate increases 10%
EUR:GBP exchange rate decreases 10%
Group
US$’000
Company
US$’000
256
(233)
(2,665)
2,423
122
(111)
(2,340)
2,127
357
(325)
(2,822)
2,565
141
(128)
(2,267)
2,061
(iii) Capital management
The Group’s policy is to maintain a strong capital base so as to maintain creditor confidence and to sustain future
development of the business, safeguard the Group’s ability to continue as a going concern and provide returns for
shareholders.
As explained further in note 16 and note 2c, the Group’s Eurobonds were due to mature in April 2022 at 100% of par
value plus any accrued and unpaid coupon.
In March 2022, the tranche B Noteholders approved the extension of the maturity of the tranche B bonds by two
years to 12 April 2024 with an increase in the coupon to 10% accrued annually and payable on redemption.
In April 2022, the tranche A Noteholders approved the extension of the maturity of the tranche A bonds by two
years to 12 April 2024 with an increase in the coupon to 10% accrued annually and payable on redemption.
(iv) Liquidity risk
The Group’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its
liabilities when due. Refer to the going concern statement in note 2c for further commentary.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on their
contractual maturities. The amounts presented are the contractual undiscounted cash flows.
77
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 21: Financial instruments continued
31 December 2021
Trade and other payables
Borrowings
Total
31 December 2020
Trade and other payables
Borrowings
Total
31 December 2021
Trade and other payables
Borrowings
Total
31 December 2020
Trade and other payables
Borrowings
Total
Group
Less than
6 months
US$’000
383
26,637
27,020
6 to 12
months
US$’000
Between
1 and 2 years
US$’000
Between
2 and 5 years
US$’000
–
–
–
–
–
–
–
–
–
Less than
6 months
US$’000
6 to 12
months
US$’000
Between
1 and 2 years
US$’000
Between
2 and 5 years
US$’000
209
689
898
–
–
–
–
24,360
24,360
Company
–
–
–
Less than
6 months
US$’000
301
26,637
26,938
6 to 12
months
US$’000
Between
1 and 2 years
US$’000
Between
2 and 5 years
US$’000
464
–
464
–
–
–
–
–
–
Less than
6 months
US$’000
6 to 12
months
US$’000
Between
1 and 2 years
US$’000
Between
2 and 5 years
US$’000
123
689
812
738
–
738
–
24,360
24,360
–
–
–
Total
contractual
cash flows
US$’000
383
26,637
27,020
Total
contractual
cash flows
US$’000
209
25,049
25,258
Total
contractual
cash flows
US$’000
765
26,637
27,402
Total
contractual
cash flows
US$’000
861
25,049
25,910
Note 22: Share-based payments
Ordinary Shares
During 2021, the Company issued 12,413,794 (2020: 13,584,906) new Ordinary Shares to Align Research Services
in lieu of cash compensation for services provided.
Share options and warrants
The following equity settled share-based awards have been made under the Company’s discretionary share
option plan. These include 37,500,000 issued to Mark Hood when he was appointed to the Board in March 2021,
as described in the Directors Remuneration Report on page 34.
31 December 2021
31 December 2020
As at 1 January
Granted during the year
Exercised during the year
Forfeited during the year
As at 31 December
Average
exercise price
per option
(pence)
Average
exercise price
per option
(pence)
Number of
options
4.38 58,000,000
0.10
79,687,500
–
–
–
–
Number of
options
83,000,000
10,000,000
–
4.38
4.38
–
4.38 (35,000,000)
1.90 137,687,500
4.38
58,000,000
Vested and exercisable at 31 December
4.38 48,000,000
–
–
78
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 22: Share-based payments continued
All options vest after three years of continuous service with the Company and that the mid-market closing price
per Coro ordinary share on the last day of the three year vesting period is equal to or higher than 0.46 pence per
ordinary share, being 15% above the placing price. Once vested, the Options may be exercised at any time until the
sixth anniversary of grant.
The number of Options which will vest on the vesting date will depend on the Company's Total Shareholder
Return ("TSR") over the 3 year performance period starting on the date of grant, compared to a comparator group
of 20 energy companies selected by the Company's Remuneration Committee. The number of Options vesting will
be calculated as follows:
Relative TSR
Below median
Median
Upper decile
Percentage of Options vesting on the Vesting Date
0%
30%
100%
Between median and upper decile
Straight-line vesting between 30% and 100%
Vested options are exerciseable at a price of 0.1p per new ordinary share.
The fair value of services rendered in return for share options is based on the fair value of share options granted
and was measured using a Monte Carlo model.
The inputs used in the measurement of the options granted during the year are summarised in the table below,
with the volatility estimate of 50% based on the Company’s historical volatility:
Fair value at grant date (p)
Share price at grant date (p)
Exercise price
Expected volatility
Option life
Risk-free interest rate (based on yield on five-year gilts)
Expiry date
p – British pence.
February 2021
options
March 2021
options
0.44
0.53
0.10
90%
3 years
0.08%
0.26
0.37
0.10
90%
2 years 11 months
0.17%
22 February 2027
22 February 2027
The fair value of the options granted are spread over the vesting period. The amount recognised in the income
statement for the year ended 31 December 2021 was US$248k (2020: US$698k).
This 2020 charge included the accelerated vesting of options issued to two former Directors who left the Company
during the period. According to their respective option deeds, the options became immediately exercisable at
their original exercise price of 4.38p per share for a period of three months following resignation. The options were
not exercised and have lapsed.
The cumulative expense recognised for lapsed options of US$nil has been recycled to accumulated losses
(2020: US$593k).
79
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 23: Interests in other entities
ion Ventures
In 2020, the Company acquired a 20.3% interest in ion Ventures Holdings Limited (“ion Ventures”). This investment
is accounted for as an associate using the equity method.
ion Ventures, incorporated and domiciled in the UK, is a South East Asian and UK focused developer of clean
energy projects, primarily energy storage.
Summarised financial information for ion Ventures, which has a financial year end date of 31 December, is included
below:
Summarised balance sheet
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Group’s share in %
Group’s share in US$
Summarised statement of comprehensive income
Revenue
Loss from continuing operations
Other comprehensive income
Total comprehensive income
31 December
2021
US$’000
31 December
2020
US$’000
522
2,907
(833)
(621)
1,975
20.3%
401
642
2,869
(118)
(112)
3,281
20.3%
666
31 December
2021
US$’000
Two months
ended
31 December
2020
US$’000
1,564
(1,227)
–
(1,227)
2
(81)
–
(81)
As required by IAS 28 Investment in Associates, the excess between the fair value of ion Ventures’ net assets on
acquisition date and the consideration paid for Coro’s investment has been recorded as notional goodwill and is
included within non-current assets in the previous table.
Duyung PSC
The Group’s wholly owned subsidiary, Coro Energy Duyung (Singapore) Pte Ltd, is the owner of a 15% interest in the
Duyung Production Sharing Contract (“PSC”).
The Duyung PSC partners have entered into a Joint Operating Agreement (“JOA”), which governs the
arrangement. Through the JOA, the Group has a direct right to the assets of the venture, and direct obligation for
its liabilities. Accordingly, Coro accounts for its share of assets, liabilities and expenses of the venture in accordance
with the IFRSs applicable to the particular assets, liabilities and expenses.
The operator of the venture is West Natuna Exploration Ltd (“WNEL”). WNEL is a company incorporated in the
British Virgin Islands and its principal place of business is Indonesia.
Coro Renewables VN1 Joint Stock Company
In July 2021, the Group announced its intention to form a joint venture with Vinh Phuc Electrical Mechanical
Installation Co Ltd, trading as Vinh Phuc Energy JSC (“VPE”), the joint venture (“CRV1”) with the Company
contributing US$500k in cash for an 85% share of the joint venture and VPE contributing its existing 150 MW
project portfolio for a non-controlling 15% share of the joint venture. In October 2021, a binding shareholder
agreement was signed with VPE and the Group acquired an 85% interest in the newly incorporated Vietnamese
company, Coro Renewables VN1 Joint Stock Company, which owns 100% of Coro Renewables VN2 Company
Limited, which in tun owns 100% of Coro Renewables Vietnam Company Limited.
80
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Note 23: Interests in other entities continued
Background to the acquisition
VPE is a highly regarded local EPC contractor with a 150 MW project portfolio of rooftop solar projects in Vietnam
and the investment meets a number of key strategic objectives for the Group, including:
• Acquiring VPE’s pipeline of rooftop solar projects in Vietnam;
• Securing an experienced local partner with experience executing energy projects; and
• Building on the Company’s investment in ion Ventures in 2020, and GEPL and the focus on South East Asia
renewables.
Consideration for the acquisition
The Group has committed to an initial investment of US$500k into CRV1.
Revenue and profit contribution
At 31 December 2021, the three Vietnamese Companies had not commenced trading and the Group’s initial
US$500k contribution had not been transferred to Vietnam. There are therefore no transactions relating to CRV1,
nor its subsidiary undertakings, recorded in these consolidated financial statements.
Note 24: Contingencies and commitments
Commitments
Coro’s share of the 2022 Duyung Work Programme and Budget is estimated at US$1m, which will be allocated
between items of capital expenditure and joint venture G&A.
Contingencies
The Group has no contingent liabilities.
Note 25: Related party transactions
Key management personnel compensation
Short-term benefits
Post-employment benefits
Share-based payments
2021
US$’000
2020
US$’000
885
–
221
596
7
597
Included in Short-term benefits above a bonus of US$37.5k payable to Mark Hood which was approved by the
Directors but was outstanding at year-end. The bonus was subsequently paid in March 2022.
Key management personnel consists of the Directors of the Company and Peter Christie (CFO) and Michael
Carrington (COO).
Other related party transactions
Echo Energy plc is considered a related party because two of the Company’s Directors, James Parsons and
Marco Fumagalli, were also Directors of Echo Energy plc during 2021. All transactions entered into between the
companies are made on arm’s length terms. There were no transactions with Echo Energy in 2021 or 2020.
CIP Merchant Capital Ltd (“CIP”) is considered a related party of the Group under IAS 24 Related Party Transactions
by virtue of its 18.7% (reduced in the year by dilution to 7.1%) shareholding and representation on the Board
(one Director). There were no transactions with CIP during 2021 or 2020.
ion Ventures Holdings Limited is a related party due to the Company’s 20.3% shareholding and ability to appoint
one director to the Board of Directors of ion. There were no transactions between the two companies in 2021 or
2020 with the exception of Coro’s initial £500k investment in ion.
Sound Energy plc is no longer considered a related party, with only Marco Fumagalli as a Director in common
between the two companies.
81
www.coroenergyplc.comAnnual Report and Accounts for the year ended 31 December 2021FINANCIAL STATEMENTS Note 26: Subsequent events
On 28 February 2022, the Company provided an update on the disposal of the Company’s Italian portfolio. As
previously announced on 27 May 2021, the Company signed a conditional share purchase agreement (“SPA”) with
Dubai Energy Partners, Inc (“DEPI”), an international oil and gas company focused on the acquisition of producing
assets, in respect of the disposal by the Company of its Italian portfolio to DEPI. This SPA was conditional on,
inter alia, the receipt of required regulatory approvals from the Italian authorities being received by 26 February
2022. These regulatory approvals have not been received and as such, the disposal was terminated by the parties,
(see note 2e and note 20 for further explanation).
On 3 March 2022, the Company announced its proposals in respect of a restructuring of the Company’s
Luxembourg listed EUR 22.5m 5.0% secured notes (the “Notes”). The Noteholders approved the extension of the
maturity of the Notes by two years to 12 April 2024 with an increase in the coupon to 10% accrued annually and
payable on redemption. In addition, the Company undertook to the Noteholders that in the event of a sale of the
Company’s interest in the Duyung PSC to utilise the net cash proceeds of such disposal(s) to first repay the capital
and rolled up interest on the Notes and thereafter to distribute 20% of remaining net proceed(s) to Noteholders.
The remaining net proceeds of any sales would be retained and/or distributed to shareholders by the Company
(see note 2c and note 16 for further explanation).
82
Stock code: COROCoro Energy PLCNotes to the Financial StatementsFor the year ended 31 December 2021 Company Information
Directors
•
James Parsons (Executive Chairman)
• Mark Hood (Chief Executive Officer)
• Marco Fumagalli (Non-Executive Director)
• Andrew Dennan (Non-Executive Director)
• Stephen Birrell (Non-Executive Director)
Company secretary
AMBA Secretaries Limited
Registered office
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England
Registered number
10472005 (England and Wales)
Nominated adviser
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6–8 Tokenhouse Yard
London
EC2R 7AS
Broker
W H Ireland
24 Martin Lane
London
EC4R 0DR
Legal advisers
Pinsent Masons LLP
1 Park Row
Leeds
LS1 5AB
Auditor
PKF Littlejohn LLP
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Canary Wharf
London
E14 4HD
Share registrars
Link Group
10th Floor
Central Square
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Leeds
LS1 4DL
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