KIBO ENERGY PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR
THE YEAR ENDED 31 DECEMBER 2021
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CONTENTS
CORPORATE DIRECTORY
CHAIRMAN’S REPORT
REVIEW OF ACTIVITIES
CORPORATE GOVERNANCE REPORT
DIRECTORS’ REPORT
DIRECTORS’ STATEMENT OF RESPONSIBILITIES
AUDIT COMMITTEE REPORT
INDEPENDENT AUDITOR’S REPORT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
COMPANY STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
COMPANY STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
COMPANY STATEMENT OF CASH FLOWS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS
ANNEXURE 1: HEADLINE EARNINGS PER SHARE
1
3
4
7
14
26
27
28
34
35
36
37
38
39
40
41
42
55
89
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE DIRECTORY
BOARD OF DIRECTORS:
Christian Schaffalitzky
Louis Coetzee
Noel O’Keeffe
Andreas Lianos
Christiaan Schutte
Chairman (Non-Executive Chairman)
Chief Executive Officer
Technical Director (Non-Executive Director)
Non-Executive Director
Executive Director Capital Projects
COMPANY SECRETARY:
Noel O’Keeffe
REGISTERED OFFICE:
17 Pembroke Street Upper
Dublin 2, Ireland
BUSINESS ADDRESS - IRELAND:
AUDITORS
Gray Office Park
Galway Retail Park
Headford Road
Galway, Ireland
Crowe Ireland
40 Mespil Rd
Dublin 4
D04 C2N4
Ireland
STOCK EXCHANGE LISTING:
SHARE REGISTRARS:
London Stock Exchange: AIM - (Share code: KIBO) – Primary
Johannesburg Stock Exchange: JSE Alt X - (Share Code: KBO) – Secondary
United Kingdom &
Link Registrars Ltd
Ireland
PRINCIPAL BANKERS:
JOINT BROKER:
JOINT BROKER:
2 Grand Canal Square
Dublin 2
D02 A342
South Africa
JSE Investor Services (Pty) Ltd
th
Floor
13
19 Ameshoff Street
Braamfontein
South Africa
Allied Irish Banks Plc
Tuam Road
Galway
Ireland
Hybridan LLP
1 Poultry
London
EC2R 8EJ
Shard Capital Partners LLP
rd
Floor
23
20 Fenchurch Street
London, EC3M 3BY
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KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE DIRECTORY
UK PUBLIC RELATIONS:
SOLICITORS:
UK NOMINATED ADVISER:
JSE DESIGNATED ADVISER:
WEBSITE:
CONTACT:
Lifa Communications
32 Fricker Road
Illovo, Johannesburg
2169, South Africa
As to Irish Law:
OBH Partners
17 Pembroke Street Upper
Dublin 2
Ireland
As to English Law:
Druces LLP
Salisbury House
London Wall
London EC2M 5PS
RFC Ambrian Limited
Level 48, Central Park
152-158 St. Georges Terrace
Perth, WA 6000
River Group
Unit 2, 211 Kloof Street
Waterkloof
Pretoria, South Africa
www.kibo.energy
info@kibo.energy
DATE OF INCORPORATION:
17 January 2008
REGISTERED NUMBER:
451931
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KIBO ENERGY PLC
CHAIRMAN’S REPORT
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
I am pleased to provide a review of Kibo Energy plc (“Kibo” or the “Company”) and its subsidiaries’ (together with
Kibo, the “Group”) activities during the period and to present our full-year audited accounts for 2021.
As you know we announced a significant strategy shift in June 2021, largely prompted by a global surge in clean energy
policies and investment aimed at putting the energy system on track to achieve the global Sustainable Development
Goals of the 2030 Agenda for Sustainable Development as was reiterated during COP 26. This made it increasingly
difficult to promote and fund our fossil fuel energy projects, notwithstanding intended integration of renewable
energy components in the development of these projects.
The underlying strategic concept of the Kibo Strategy assumes long term energy solutions as a key enabler for
Sustainability in a circular economy. Kibo therefore restated its strategy to advance the Company as a significant
developer of sustainable energy solutions, integrating renewable and alternative generation with energy storage. Kibo
will therefore, forthwith, focus on the acquisition, development and operation of a portfolio of sustainable, renewable
energy assets and dispose of, or reposition, our fossil fuel utility projects.
The establishment and maintenance of a sustainable project pipeline that will be delivering production assets
therefore remains a main high-level target. This requires exclusive focus on the rapidly expanding renewable and
clean energy markets to produce a pipeline of new projects in the United Kingdom (“UK) and SADC (“Southern African
Development Community”) Countries, some of which have already been acquired and currently being integrated into
the Company structure.
I am pleased to reflect on the joint investment with South African group Industrial Green Energy Solutions (IGES) to
convert un-recyclable plastic to syngas (using pyrolysis) in energy starved South Africa, for industrial power
production. We recently announced progress on the first of various projects in the project pipeline and look forward
to the anticipated financial close later in 2022 of the first 2.7 MW phase, for which we have a private industrial off-
take agreement. Success with this phase will bode well for the rapid expansion of this project to its full c. 8 MW
potential. It will also bolster the development of the project pipeline, aimed at a conducive South African energy
market segment driven by the demand for Independent Power Producers and recent legislative restrictions on the
disposal of certain plastics.As the UK Government sets out to deliver energy security and accelerate the transition to
a low carbon economy it understands that it will require urgent and ambitious action at home and abroad. Its strategy
continues to be based on the principle that independently regulated, competitive energy markets, are the most cost-
effective and efficient way of delivering its objectives. We are also leveraging our growing experience in the waste-to-
energy in the pursuit of various waste-to-energy opportunities in the UK-market.
Our renewed strategy will benefit from the Company’s experience in the renewable energy sector in recent years. This
has been acquired historically through our work in developing renewable energy and storage solutions for integration
with its large utility coal projects as well as being the cornerstone promoter behind our 55% AIM subsidiary, Mast
Energy Developments plc (“MED”). After MED completed a successful IPO on the London Stock Exchange in 2021,
raising £5.54 million to acquire a 50 MW reserve power portfolio in the short to medium term it already has a 9 MW
site in production, 5 MW site under construction, 4.4 MW in development and a further four sites totalling 29 MW in
an advanced stage of acquisition.
In terms of International Financial Reporting Standards (IFRS), intangible assets with an indefinite life must be tested
for impairment on an annual basis. The change in the Group’s strategy during 2021 to move toward renewable energy
solutions, coupled with global divestments in fossil fuel assets, resulted therein that the Group recognised an
impairment of £20,088,240 related to its coal assets. Notwithstanding the impairment, the disposal plans for our
legacy fossil fuel assets in Tanzania, Mozambique and Botswana, are progressing well with expressions of interest
currently under evaluation. The result for the reporting period amounted to a loss of £23,148,155 for the year ended
31 December 2021 (31 December 2020: £6,417,237
as detailed further in the Statement of Profit or Loss and Other
Comprehensive Income, and further details on financial activities are detailed elsewhere in the Annual Report. The
loss is primarily due to the impairment of non-current assets, referred to above.
)
In closing, I would like to acknowledge the support of our shareholders and all stakeholders as we position the
Company for a next exiting phase of development. I would like to thank our Board, as well as management under the
strong leadership of our CEO, Louis Coetzee, for their vision, hard work and tenacity to take advantage of the new
opportunities emerging in the green economy by re-positioning Kibo.
Christian Schaffalitzky
_____________________________
Chairman
27 June 2022
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KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
REVIEW OF ACTIVITIES
Introduction
Kibo’s focus during 2021 was to acquire new projects to underpin its strategy to advance Kibo as a significant
developer of sustainable energy solutions, integrating Renewable and Alternative Generation with Energy Storage in
the UK and Southern Africa. Leveraging its growing experience in these areas and its partner network, Kibo has been
successful in establishing the project portfolio described below.
Operations
Sustineri Energy Joint Venture – Waste-to-Energy Project (South Africa)
On 18 May 2021, we announced an agreement with South Africa-based Industrial Green Solutions (Pty) Ltd ('IGES')
to jointly develop a portfolio of Waste to Energy projects in South Africa with an initial target of generating more than
50 MW of electricity for sale to industrial users which was finalised at the end of July 2021.
Under the terms of this agreement, Kibo has acquired 65% of Sustineri Energy (35% held by IGES), which holds an
initial seven waste-to energy project pipeline utilising Pyrolysis technologies to convert waste non-recyclable plastics
to syngas for the generation of energy. The Pyrolysis technology will be supplied by a local international technology
firm in the form of a waste to energy conversion plant with Syngas stored on site and fed into gas engines to generate
electrical power. The agreement, which was completed in July 2021, requires Kibo to fund Sustineri, commencing
with an amount of c. £560,000 as an equity loan for the development of this first project (“Project 1”) more details of
which are given below.
Project 1, the most advanced project, involves the development, construction, and operation of an 8 MW Base Load
Waste to Energy Generation facility to be developed in 4 X 2 MW phases over about 3 years for
business
park developer in Gauteng, South Africa. A recent 10-year take-or-pay conditional Power Purchase Agreement (`PPA')
to generate baseload electricity from the first 2.7 MW phase of the development was signed by the Off taker and
announced by the Company in February 2022 together with a further update on this initial project.
an industrial
An optimised financial model for the first 2.7 MW phase 1 (updated from initial planned 2 MW) of Project 1 has
provided an estimated Earnings Before Interest Tax Depreciation & Interest (EBITDA) of c. £18 million over the life
of project of which an amount of c. £11.5 million is attributable to the Company and an Internal Rate of Return ("IRR")
of between 11% - 14%. The Capital Expenditure (CAPEX) for the project is estimated at c. £8.35 million with financial
close anticipated in the fourth quarter of 2022 with construction to commence in the first quarter of 2023 and taking
between 11 and 14 months to complete. Project 1 is attracting strong funding interest (project and debt funding) from
various investors with whom Sustineri is currently negotiating with a view to meeting its target financial close date
in the fourth quarter this year.
The Project will provide the business park with cleaner electricity, by making use of a high temperature pyrolysis
process, where selected non-recyclable plastics will undergo thermal degradation to produce high quality syngas,
which will in turn feed gas engines to generate both electricity and heat energy. Additionally, there is potential to sell
the heat energy generated as a by-product from the gas engines directly to customers inside the industrial park. A fuel
feedstock supply agreement is already in place with a waste management operator for 100% of the first phase
(2,7MW) of the project and land acquisition and waste licensing is in progress. Air emissions License and grid
connection approval processes are in progress.
In addition to Project 1, there are at least 6 other projects at different sites identified and off-take discussions are
planned in the short term. These additional projects can yield as much as 50 MW. Kibo will be developing the project
portfolio with Lesedi Nuclear Services (Pty) Ltd as strategic partner for EPC and Operations and Management services.
For South Africa, the Pyrolysis technology provides a perfect solution to the disposal of plastics in the country, which
up until now is high cost and subject to cumbersome procedures and under most recent legislation prohibits the
disposal of plastics with a CV (Calorific Value) of more than 20 CV in landfill facilities. As an Independent Power
Producer, Sustineri will enable its industrial clients to operate independently from the National Utility, Eskom, and
secure stable power supplies.
Billingham Joint Venture – Waste-to-Energy Project (UK)
In September 2021, Kibo signed a Heads of Terms with AIM-listed UK company, EQTEC plc, a world-leading
gasification solutions company, to acquire a 54.54% interest in its proposed 25 MW capacity Billingham waste
gasification and power plant at Haverton Hill, Teesside, UK. Under the Heads of Terms, it is expected that Kibo will
acquire a 54.54% equity stake in a new project company (Project SPV) to be incorporated with EQTEC holding 45.46%
with the final holdings to be confirmed following a follow-on shareholders’ agreement which is currently being
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negotiated.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
REVIEW OF ACTIVITIES
Billingham is at an advanced stage of development with a concept design for the full plant produced, planning
permission approved, grid connection secured & technical due diligence with technology insurance providers
completed. The project is expected to annually process 200,000 metric tonnes of non-recyclable everyday municipal
solid waste into 25 MW of green electricity, enough to power 50,000 homes. Under the Heads of Terms, Kibo's initial
funding contribution will be £3 million paid as an equity subscription, plus convertible shareholder loan facilities, and
Kibo will have the option to provide additional convertible shareholder loan facilities to the Project SPV and/or
convert future project development fees into further equity in the project in the future.
The Billingham project rights will be held by the Project SPV and will include all technology license agreements, all
equipment supply and maintenance agreements with EQTEC and all rights to the site under the existing agreements
with third parties. EQTEC will remain as the lead development manager on the Project, providing the design and core
Advanced Gasification Technology and subsequently retaining the maintenance portion of the O&M contract upon
commissioning.
Legacy Coal Projects – Tanzania, Botswana and Mozambique
Notwithstanding the successful transition toward the renewable energy strategy during the 2021 financial period, the
Group continued to pursue the possible development of its Mbeya Coal to Power and Mabaseka Coal to Power Project
during 2021, however the increase in global scepticism around the development of fossil fuel projects coupled with
expansion toward renewable energy resulted in the phasing out of coal assets across global markets in lieu of
renewable energy assets. These factors culminated in the Group performing an impairment assessment, as required
by International Financial Reporting Standards (IFRS) for intangible assets with an indefinite life, as the carrying
amount of the Mbeya Coal to Power and Mabaseka Coal to Power Project asset is unlikely to be recovered in full of
successful development or by sale. Following various consultations with third parties, the Group concluded that the
fair value of its coal asset was estimated to be approximately £5,504,216, which is significantly lower than the value
in use determined in preceding financial periods as a result of the declining demand for fossil fuel projects and the
Group’s move toward renewable energy solutions, as executed toward the latter part of the 2021 financial period.
It was therefore concluded that an impairment of £20,088,240 was necessary in the 2021 financial period related
specifically to the Mbeya Coal to Power and Mabaseka Coal to Power Projects.
The Group still believes these coal deposits which still offer opportunities for commercialisation to parties with longer
term investment horizons commensurate with the further refinement of new clean coal burning technologies and
conversion of coal to gas with associated carbon capture systems.
Investments
Mast Energy Developments Plc (“MED”) – Reserve Power (UK)
During 2021, Kibo facilitated the IPO on the Official List of the London Stock Exchange plc by way of a Standard Listing
of its equity interest in MAST Energy Developments plc, previously a wholly owned subsidiary, with MED raising £5.54
million through Clear Capital Markets Ltd from its IPO. On the date of listing a market capitalisation of £23 million
was allocated to MAST Energy Developments. Kibo retains a 55.37% equity interest in MED.
Since its IPO in April 2021, MED has made solid progress towards its target of assembling a portfolio of well-located
flexible power sites in the UK of up to 300 MW of flexible power generating capacity within the next two to three
years. During 2021 the company acquired and re-commissioned the fully operational 9 MW Pyebridge peaking power
plant and a 4.4. MW shovel ready site at Rochdale for the development of a peaking power plant or a battery storage
site, both sites being located in the West Midlands of the UK. These sites are in addition to the Bordesley site which is
now in the early construction phase for a 5 MW peaking power plant. Together with Pyebridge, Rochdale and
Bordersley, MED is at an advanced stage of acquisition on three further UK sites which when completed will bring its
total portfolio of projects, operational and under development/construction to 47 MW. Further information on these
Katoro Gold Plc – Mineral Exploration (South Africa & Tanzania)
projects and the latest MED updates can be found on its website at www.med.energy.
The Company retains a 21% investment in Katoro Gold plc (AIM: KAT) where progress on its Tanzania and South
African
projects is being made at a steady pace during 2021. Unfortunately, a planned listing and IPO on the London Stock
Exchange for the Blyvoor gold tailings joint venture in South Africa had to be postponed in December when one of the
joint venture partners failed to meet all conditions precedent to enable the re-structuring of the joint venture holding
structure in preparation for the planned listing.
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KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
REVIEW OF ACTIVITIES
While disappointing, Blyvoor remains a substantial gold asset, especially in light of the current gold price upsurge,
with a clear path to commercial development clearly indicated, Katoro continues to explore funding options to enable
it to construct a mine and put Blyvoor into production as soon as possible.
On its Tanzanian projects, Katoro completed two phases of drilling on its Haneti Nickel-PGM Project in which it holds
a 65% interest. The results from a first phase comprising 1,965 meters of rotary air blast drilling completed in April
2021 gave sufficient encouragement for a follow-on 900 meters diamond drilling programme which has recently been
completed (February 2022), the results of which enables Katoro to refine the geological modelling and vector in on
target areas for next stage work. Katoro also recently announced in March 2022 that it has regained a joint venture
interest in the Imweru Gold Project in Tanzania which it had previously sold. It has now cancelled the sale and
restructured the transaction as an incorporated joint venture with the previous purchaser, private Australian
company, Lake Victoria Gold, to develop the gold asset. The joint venture provides for Lake Victoria Gold to earn up
to 80% of the project by arranging all funding, while Katoro retains the remaining 20% as a carried interest. Further
Corporate
information on the Katoro projects and the latest updates can be found on its website at www.katorogold.com.
During 2021 the Company issued 709,016,602, new ordinary shares at prices per shares between 0.2p and 0.4p. This
comprised issue of 188,431,556 shares in respect of warrant exercises for which the Company received £697,726, a
further 90,585,046 shares in settlement of invoices to service providers and in part settlement of outstanding debt
and 430,000,000 shares in respect of a share subscription to private subscribers for which proceeds of £860,000 were
received.
Since period end and to the date of this report the Company has issued an additional 108,540,021 shares at a price
per share of just under 0.2p to service providers, in payment of a facility implementation fee in respect of drawing
down the first tranche of a loan facility negotiated with an institutional investor (the “Investor”) which was announced
in February 2022 and payment in respect of remaining balance on loan (Sanderson settlement) announced in May
2022.
The loan facility noted above (the “Facility”) provides for an initial drawdown of £1m (the “Initial Advance”) which
was availed of on signing of the Facility. Funds advanced under the Facility attract a fixed coupon interest rate of 3.5%
and will be repayable with accrued interest, 4 months from the date of drawdown (due on 16 June 2022). The investor
shall receive warrants equal to 30% of each drawdown divided by the average of the daily VWAP for each of the 5
consecutive trading days immediately prior to the applicable drawdown date ("Reference Price"), with a 36-month
term to expiry from the date of issuance. The warrants are exercisable at a subscription price being equal to 130% of
the then prevailing Reference Price. If the share price of the Company is above a 100% premium to the relevant
exercise price for 30 consecutive days, then 50% of the warrants will be cancelled, unless otherwise previously
exercised. With regards to the Initial Advance, the Investor has received 168,274,625 warrants. In compliance with
the Facility terms for the Initial Advance, the Company has issued shares in settlement of a facility implementation
fee of £70k in the amount of 39,264,079 new ordinary Kibo shares of €0.001 each at a deemed price of 0.17828 pence
per share (the "Implementation Fee Shares").
Kibo settled an outstanding amount of £339,437 pursuant to the Forward Payment Facility signed between Sanderson
Capital Partners Ltd and the Company in December 2016, in cash and shares, during the year. The share component
comprised £169,718 (50% of the total) for which we issued 65,276,346 new shares at a deemed value of 0.26p per
share. The remaining amount outstanding on this loan of £89,788.88 was settled after period end in May 2022 by the
issue of 56,118,047 shares at a deemed value of £0.0016.
At an EGM held on 22 February 2021 the shareholders of Kibo approved resolutions to permit the migration of the
Company’s dematerialised shares held through CREST to Euroclear Nominees Ltd (the “Eurobank Migration”). The
Eurobank Migration was required to allow shareholders to continue to hold the Company shares in dematerialised
form following the UK’s exit from the EU and this successfully completed on the 12 March 2021.
Louis Coetzee
_______________________________
Chief Executive Officer
27 June 2022
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KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE GOVERNANCE REPORT
The Kibo board (the “Board”) aims to conform to its statutory responsibilities and industry good practice in relation
to corporate governance of Kibo Energy plc (“Kibo” or the “Company”) and its subsidiaries (together with Kibo, the
“Group”). The Board has adopted the latest version of the QCA Corporate Governance Code (2018) (“QCA Code”) and
endeavours to follow its ten principles (“the Principles”) with due regard to the stage of development of the Company.
In addition to my role as non-executive chairman of the Board, I am also the chairman of the Company’s Governance
Committee and retain primary responsibility for the design, implementation, articulation, review and updates of the
Company’s corporate governance policy. The Governance Committee meets at least once a year and makes
recommendations to the Board to ensure the Company’s corporate governance policy remains aligned with the
Principles as it grows.
The following are the principal ways in which the Company meets these requirements.
1. Establish a strategy and business model which promotes long-term value for shareholders
The Company has established a strategy and business model which it believes will promote long term value for
shareholders. This business model spans the Group’s financial, technical and operational areas and is continually
updated as its project portfolio expand. The Company believes its current business model will deliver long term value
to shareholders by providing diverse exposure to the growing demand-led energy markets in sub-Saharan Africa and
the UK. It further believes that this business model is appropriate to protect the Company from unnecessary risk and
secure its long-term future.
2. Seek to understand and meet shareholder needs and expectations
The Company seeks to understand and meet shareholder needs and expectations by engaging with them across a
range of platforms including regular investor presentations, Q&A forums, investor relations company services, social
media sites and at its Annual General Meeting where the Board encourages the active participation of shareholders
on important and relevant matters, including the Group’s strategy, financial performance, and operational and
commercial developments. The Company provides phone numbers on its RNS and SENS announcements where
shareholders can contact the appropriate senior Company representatives or advisors directly with their queries
together with a dedicated email address for shareholder feedback. The Board receives regular shareholder feedback
and provides prompt responses through all these communication channels and therefore believes it adequately meets
its shareholders expectations in this regard.
3. Consider wider stakeholder and social responsibilities and their implications for long-term success
The Company firmly believes that the energy development projects that form the basis of its business model will
substantially benefit the countries and regions in which it operates. It fosters a culture of open communication with
all stakeholders who may be impacted by its activities. Its strategy and business model are designed to minimise any
negative impact of its activities on the communities where it operates and on the environment.
The Company’s project areas are located in South Africa, Tanzania, Botswana, Mozambique and the United Kingdom.
Staff and locally appointed representatives at the Company’s project offices provide a first point of contact for
stakeholders to receive information on the Company’s activities and provide feedback on any issues or concerns they
may have. The Company has appointed dedicated liaison officers to communicate with stakeholder groups e.g. local
& regional government officials, central government departments, community groups and local suppliers to keep
them continuously updated on project activities and plans. Management conveys to the Board in a timely manner
through formal reporting channels and at operational review meetings any substantive concerns of stakeholders and
where necessary, the Board mandates appropriate action be taken to address these concerns.
In support of the Company’s social responsibility towards the local communities among which it works, it has
implemented a Corporate Social Responsibility Plan (“CSR Plan”). The first phase of this plan saw the building and
refurbishment of school buildings in two local villages close to its MCPP project in southern Tanzania. As the company
has undertaken a strategic shift in its business away from mineral resource projects to renewable energy projects in
the last year, it is currently updating its CSR Plan to focus on its new projects in the UK and Africa and implement new
initiatives specifically tailored to its new areas of operation.
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KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE GOVERNANCE REPORT
Successive phases of this CSR Plan will be implemented commensurate with and contingent on the construction,
commissioning and management of its waste-to-energy and solar projects which are still in the early stages of
development. These phases will include, inter alia, support of health care, education & employment opportunities,
local business development and public infrastructure development.
4. Embed effective risk management, considering both opportunities and threats, throughout the
organisation
The Board has considered mechanisms by which the business and the financial risks facing the Group are managed
and reported to the Board. The principal business and financial risks have been identified and control procedures
implemented. The Board acknowledges its responsibility for reviewing the effectiveness of the systems that are in
place to manage risk and to provide reasonable but not absolute assurance on the safeguarding of the Group’s assets
against misstatement or loss.
The major risks facing the Company are clearly identified in the Directors’ Report on page 14. The Company relies on
internal and external assessments of its systems for managing risk and it believes the continuous implementation of
recommendations from these reviews provide the Board with adequate assurance that its systems for managing risks
are effective.
The Company’s Audit Committee is the primary body that is tasked with identifying, assessing and managing risk. The
principal risks identified across all aspects of the Company’s operation include, inter alia, risks associated with foreign
exchange, strategy, funding, staffing, political stability and commercial activities. The Audit Committee regularly
reviews reports from Management across all financial and operational activities enabling it to identify and assess risks
and make recommendations to the Board where appropriate for mitigation. Similarly, it also informs the Board where
it identifies business opportunities that may be beneficial to the Company. The Audit Committee’s other core function
is to review and, if in order, recommend the annual financial statement to the Board for approval. Where the
Company’s auditors have identified risks or any shortcomings in accounting procedures, the Audit Committee brings
these to the Board’s attention for mitigation and/or rectification. The Audit Committee Report on page 27 provides
further details on the committee’s activities during 2021.
The Company maintains a Risk Register which is updated quarterly. This document is the cornerstone of its Risk
Management Policy and a key tool in monitoring the effectiveness of remedial action proposed by the Audit Committee
on an on-going basis.
5. Maintain the board as a well-functioning, balanced team led by the chair
The Board regularly meets to monitor and approve the strategy and business model for the Group.
The Board comprises a non-executive chairman, two executive directors and two non-executive directors. One of the
non-executive directors (Christian Schaffalitzky), the Chairman, is considered by the Board to be an independent
director. The Board considers non-executive directors to be independent when they are independent of Management
and free from any business or relationship that would materially interfere with the exercise of independent judgment
as a Board member.
The Executive directors comprise the Company’s CEO and Capital Projects Director who dedicate 100% of their time
to the Group. The non-executive directors dedicate as much time as is required for them to fully carry out their duties
for the Group including overseeing corporate governance arrangements and serving on board committees. One of the
non-executive directors, Noel O’Keeffe, also serves as the Company secretary. The functions and composition of the
various Board sub-committees are outlined in Section 9 below.
The Board alone is responsible for:
approval of Financial Statements and Annual Report;
formulating, reviewing and approving the Group’s budgets and major items of capital expenditure;
formulating the Group’s major policies and strategy;
•
•
• monitoring and reviewing the Group’s performance and achievement of goals;
•
• major contracts and transactions;
•
•
•
board and management structure and appointments (the whole Board acts as the Nominations Committee);
effectiveness and integrity of internal control and management information systems; and
overall corporate governance of the Group.
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KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE GOVERNANCE REPORT
An agenda and all supporting documentation are circulated to the directors before each Board meeting. Open and
timely access to all information is provided to directors to enable them to bring independent judgement on issues
affecting the Group and facilitate them in discharging their duties. The Board met seventeen (17) times during the last
financial year to 31 December 2021 with on average >90% attendance during this period.
In accordance with the Articles of Association of the Company, one third of the Board is required to retire each year
at the Company’s AGM but directors so resigning can put their name forward for re-election. The Board sets the
Group’s strategy and monitors its implementation through management and financial performance reviews. It also
works to ensure that adequate resources are available to implement strategy in a timely manner.
The Board is accountable to the shareholders for delivery of sustained value growth. In order to support its duties
and responsibilities the Board implements control procedures, such as quarterly operational review meetings, that
assess and manage risk and ensure robust financial and operational management within the Group.
6. Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities
The Board considers that there is an appropriate balance between the Executives and non-executive directors and
that no individual or small group dominates the Board’s decision making. The Board’s members have a wide range of
expertise and experience which the Board considers to be conducive to the effective leadership of the Group and to
the optimisation of shareholder value.
The Board members’ diverse range of skills and experience span technical, financial, operational and legal areas
relevant to the management of the Company. Summary biographies of each Board member are shown on the
Company’s website and in the Directors’ Report on page 14. Directors keep their skill sets up to date by attendance
at, and participation in, various events organised by their respective industry sectors and/or by participation in
continuing professional development courses.
As the Company evolves, the Board composition will be reviewed to ensure appropriate expertise is always in place
to support its business activities. It strives to align directors’ responsibilities with their individual skills so they can
optimally contribute to its current strategy and business model. While the Board has not yet adopted any formal policy
on gender balance, ethnicity or age group, it is committed to fair and equal opportunity and fostering diversity subject
to ensuring appointees are appropriately qualified and experienced for their roles. The Company acknowledges that
as it expands and grows its operations, it will be to its benefit to align its Board composition to reflect balance in the
ethnicity and gender of its members.
The Company retains the services of
investor relations,
technical/engineering and IT fields that are always available to the Board. These advisors provide support and
guidance to the Board and complement the Company’s internal expertise.
7. Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement
independent advisors across
financial,
legal,
The performance of the Board and Management of the Company is evaluated on an on-going basis by the
Remuneration Committee (“Remcom”). The results of these evaluations are reflected in changes in the Executive
remuneration levels recommended by the Remcom from time to time and in awards under the Company’s Share
Option and Management Incentive Schemes where it considers such awards are warranted. Remuneration levels are
benchmarked against peer companies while performance awards are based on meeting pre-defined milestones such
as successful project acquisitions or completion of significant project development phases. As the Company grows,
the Board will develop more comprehensive human resource policies to provide both internal and external
performance evaluations of its Board, senior management and staff including the provision for upskilling where
necessary and to provide for Board member succession planning.
The Board considers that the corporate governance policies it has currently in place for Board performance reviews
is commensurate with the size and development stage of the Company.
9
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE GOVERNANCE REPORT
8. Promote a corporate culture that is based on ethical values and behaviour
The Company operates across several countries including Ireland, UK, Cyprus, South Africa, Tanzania, Botswana and
Mozambique. In line with its international reach, the Company recognises the cultural diversity both internally and
among its business partners, service providers and other stakeholders. The Board promotes corporate values that
reflect its commitment to provide equal opportunity to all subject to its core principles that demand the adoption of
ethical values and conduct at all times. In this regard it has developed robust whistle-blower and anti-corruption
policies that Board, management, staff and service providers have signed up to. The Company’s Anti-Corruption policy
requires all Group personnel to declare conflicts of interest in any dealings on behalf of the Group and to excuse
themselves from any negotiation on behalf of, or with, the Company in such circumstances.
While the Company has not adopted a formal Code of Conduct at board level, management and staff behaviour is
governed by the terms of individual employment (and supplier) contracts whose terms reflect the ethics and values
of the Group. Together with other Company policies such as its whistle-blower and anti-corruption policies noted
above, these establish a high standard of values and behaviour to which all personnel working for, or on behalf, of the
Group are expected to adhere to. The Board monitors compliance with its ethical values through feedback from
Management and has disciplinary procedures in place to take corrective action where required.
9. Maintain governance structures and processes that are fit for purpose and support good decision-making
by the board
The Company has developed and adopted a variety of plans, policies, and procedures as part of its corporate
governance framework to ensure that the Company is run in an efficient, effective and responsible manner. Key
policies include:
Board Governance Plan
The Board Governance Plan is integrated into a Corporate Procedures Manual which sets out corporate governance
structure and includes the terms of reference for the various Board Committees. In addition, the Corporate Procedures
Manual outlines:
high level financial controls;
information system environment;
forecasting & budget procedures;
treasury operations;
accounting policies;
financial accounting procedures; and
•
•
•
•
•
•
• management reporting framework.
Securities Trading/Share Dealing Policy
The Company’s Share Dealing Code sets out the Company’s policy, procedures and restrictions for directors,
management, staff and insiders in dealings in the Company’s shares. It is compliant with AIM and FCA Rules and with
the Company’s obligations under the Market Abuse Directive (2016).
Continuous Disclosure and Market Communications Policy
The Company’s policy is governed by the AIM Rules and the JSE Rules and all applicable national financial regulation
in the UK, Ireland and South Africa.
Risk Management Policy
The Company has developed a Risk Register which is reviewed on a quarterly basis. The Risk Register reviews the
risks around each aspect of management and operations and is scored by each Executive member of the Board in
terms of probability and impact to derive an overall risk profile for the Company. The Risk Register also records the
steps that are being taken to mitigate the major risks identified.
10
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE GOVERNANCE REPORT
Health and Safety Policy & Procedures
All operating companies within the Group have their own Health and Safety Policy and Procedures (“HSE Policy”)
tailored to the particular jurisdiction and environment in which they are active. The Board retains overall
responsibility to ensure appropriate HSE Policy is in place at all times and reviews this at its operations’ review
meetings.
Environmental Policy
Kibo is committed to high standards of environmental protection across our business. Our goal is to protect people,
minimise harm to the environment, integrate biodiversity considerations and reduce disruption to our neighbouring
communities. We seek to achieve continuous improvement in our environmental protection performance. The
Company will significantly expand and escalate our actions to meet our commitment to environmental protection
commensurate with the start of plant construction and energy production on our projects. The results of
environmental impact reports already completed and in progress across our projects will be used to carefully plan
for environmental risk assessments and implement mitigating measures to protect the environment in association
with relevant government bodies and local communities.
Anti-corruption and bribery Policy
The Company’s Anti-corruption and bribery policy is in place to ensure that all directors, management, staff and
suppliers to the Group conduct themselves in an honest and ethical manner at all times. It meets the requirements of
the UK Bribery Act 2010.
Whistleblowing Policy
The Company’s Whistleblowing Policy is informed by Whistleblowing Arrangements Code of Practice issued by the
British Standards Institute and Public Concern at Work. Its objectives are:
•
•
•
to encourage Group personnel to report suspected wrongdoing as soon as possible, in the knowledge that
their concerns will be taken seriously and investigated as appropriate, and that their confidentiality will be
respected;
to provide Group personnel with guidance as to how to raise those concerns; and
to reassure Group personnel that they should be able to raise genuine concerns in good faith without fear of
reprisals, even if they turn out to be mistaken.
IT, communications and systems procedures
IT, communications and systems procedures are included in the Company’s Corporate Procedures Manual and are
designed to ensure a robust, upgradeable and secure IT system, with appropriate back-up to ensure any system failure
will not be catastrophic for the continued operations of the Company.
The Chairman is responsible for providing leadership to the Board while the day-to-day management of the Group is
delegated to the Executive Committee lead by the CEO. The CEO is primarily responsible for the Group’s business
performance and manages the Group in accordance with the strategies and business plan. The independent non-
executive directors are responsible for providing independent advice and are considered by the Board to be
independent of Management.
The Board/senior officer committees are the Governance Committee, Executive Committee, Remuneration Committee
Audit Committee, and the Nomination Committee.
Governance Committee:
Comprises two non-executive directors. The Committee meets at least once a year to review
the Company’s ongoing compliance with the QCA Code and to make recommendations to the Board where it judges
that there is a requirement to update, replace or expand corporate governance policies and procedures in line with
current activities. The Governance Committee is chaired by Christian Schaffalitzky and the other member is Noel
O’Keeffe.
Executive Committee:
Comprises two executive directors and two senior Company officers: The Committee meets
at least once a month. The Executive Committee is the core senior management team in the Company responsible for
day to day management and operations. Its terms of reference are defined in the Company’s Corporate Procedures
Manual. The Executive Committee is chaired by Louis Coetzee and the other members are Christiaan Schutte (Capital
11
Projects Director), Louis Scheepers (COO) and Cobus van der Merwe (CFO) who replaced Pieter Krugel in May 2022.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE GOVERNANCE REPORT
Remuneration Committee:
Comprises two non-executive directors. The Committee meets at least once a year to
determine Company policy on senior executive remuneration, to make detailed recommendations to the Board
regarding the remuneration packages of the executive directors and to consider awards under the Company’s Share
Option and Management Incentive Award schemes. The Chief Executive Officer is consulted on remuneration
packages and policy but does not attend discussions regarding his own package. The remuneration and terms and
conditions of the appointment of non-executive directors are determined by the Board. The Remuneration Committee
is chaired by Christian Schaffalitzky and the other member is Andreas Lianos.
Audit Committee:
Comprises two non-executive directors. The Committee meets at least twice a year to consider the
scope of the annual audit and the interim financial statements and to assess the effectiveness of the Group’s system
of internal financial controls and risk management systems. It reviews the results of the external audit, its cost
effectiveness and the objectives of the auditor. Given the size of the Group, the Audit Committee considers that an
internal audit function is not currently justified. The Audit Committee is chaired by Andrew Lianos, ACA, CA(SA),
ACMA, CIA. who serves as a non-executive Director. The other member of the Audit Committee is Christian
Schaffalitzky.
Nomination Committee:
Comprises the entire Board. The principal objectives of the Committee are to monitor and
review the Board structure, size, composition and the mix of skills and expertise to ensure that these are in line with
the Group’s strategies and to consider potential candidates for directorship.
The selection criteria for selection and recruitment of the potential candidates for directorship shall include
qualifications of the individual, experience, knowledge and achievements, credibility and background and ability of
the candidates to contribute effectively to the Board and Group. The Nomination Committee also oversees succession
planning of directors, taking into account the relative experience of each Board member in relation to the Company’s
requirements given its stage of development and strategies, with the goal of having in place an adequate and
sufficiently experienced board at all times.
The Company’s Corporate Procedures Manual includes a schedule of matters that are reserved as the sole
responsibility of the Board. These matters, in addition to setting strategy for the Company, include, but are not limited
to, Board nominations and appointments, approval of acquisitions and disposals and approval of annual budgets and
financings.
10. Communicate how the company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders
The Board recognises the importance of establishing and maintaining good relationship with Kibo’s shareholders and
other stakeholders. The Board is responsible for ensuring satisfactory dialogue with shareholders throughout the
year. In order to establish and maintain good relationships with the shareholders of Kibo, and to maintain
transparency and accountability to its shareholders, Kibo uses various means to continuously communicate and
disseminate timely information to shareholders and stakeholders:
annual and interim reports;
circulars;
annual general meetings of shareholders;
investor presentations and briefings;
Q&A forums and social media sites;
• market announcements on regulatory platforms (RNS and SENS);
•
•
•
•
•
• website at www.kibo.energy; and
•
via investor relations professionals at St. Brides Partners Ltd (contact person: Isabel de Salis / Charlotte
Hollinshead Tel: +44 (0) 207236 1177)
The Company’s Audit Committee Report is presented on page 27 and provides further details on the committee’s
activities during 2021, and while a separate report from the Remuneration Committee was not produced due to the
size of the Company, the Company intends to review this requirement on an annual basis.
12
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CORPORATE GOVERNANCE REPORT
Conclusion
The Company believes that its governance structures and practices as detailed above comply with the expectations of
the QCA Code in all material respects. It also acknowledges its obligations under the Code to continually monitor and
further develop the scope and suitability of its governance structures in line with its growth. The Company continued
to update its Plans, Policies and Procedures itemised at 9 above during 2021 to ensure it remains in compliance with
the QCA Code.
Christian Schaffalitzky
___________________________
Chairman
Governance Committee
27 June 2022
13
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
The Board of Directors present their Annual Report together with the audited annual financial statements for the year
ended 31 December 2021.
The Board comprises a non-executive chairman, two executive directors and two non-executive directors. As the
Company evolves, the Board will be reviewed and expanded if necessary to ensure appropriate expertise is always in
place to support its business activities.
The Board is responsible for the supervision and control of the Company and is accountable to the shareholders. The
Board has reserved decision-making on a variety of matters and is responsible for formulating, reviewing and
approving the Company's strategy, budgets, major items of capital expenditure and acquisitions, as well as reviewing
the performance of management.
An agenda and all supporting documentation are circulated to all directors before each Board meeting. Open and
timely access to all information is provided to all directors to enable them to bring independent judgement on issues
affecting the Company and facilitate them in discharging their duties.
Role of Directors
All Board members ensure that appropriate governance procedures are adhered to and there is a clear division of
responsibilities at Board level to ensure a balance of power and authority so that no one individual has unfettered
powers of decision making. The role of Chairman and Chief Executive Officer are not held by the same director. The
Chairman is a non-executive director.
Board and Audit Committee meetings have been taking place periodically and the executive directors manage the
daily Company operations with the Board meetings taking place on a regular basis throughout the financial period.
During the current reporting period the Board met seventeen (17) times and provided pertinent information to the
Executive Committee of the Company.
Directors are entitled, in consultation with the Chairman, to seek independent professional advice about the affairs of
the Company, at the Company’s expense. The composition, roles and responsibilities of the board committees
established by the Company are set out in the Corporate Governance Report.
Board Composition
At the date of this report, the board of directors comprised:
Christian Schaffalitzky - Chairman (non-executive)
Louis Coetzee - Chief Executive Officer (executive)
Christiaan Schutte- Director of Capital Projects (executive)
Andreas Lianos – Chairman of the Audit Committee (non-executive)
Noel O’Keeffe - Technical Director (non-executive)
Christian Schaffalitzky, BA (Mod), FIMMM, PGeo, CEng, Age 68 – Chairman (non-executive and independent)
Christian Schaffalitzky has over 40 years’ experience in minerals exploration and is Executive Chairman of Eurasia
Mining plc, a company trading on AIM. From 1984 to 1992, he founded and managed the international minerals
consultancy, CSA Group, now CSA Global Pty Ltd. Christian was a founder of Ivernia West plc, where he led the
exploration, discovery and development of the Lisheen zinc deposit in Ireland. More recently, he was a managing
director of Ennex International plc, an Irish quoted mineral exploration company, focused on zinc development
projects. He has also been engaged in precious and base metal mineral exploration and development in the former
Soviet Union and is a former independent director on the boards of Russian companies, Raspadskaya Coal Company
and Chelyabinsk Zinc. He is also on the board of MetalNRG and several private resource ventures.
14
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
Louis Coetzee, BA, MBA, Age 58 – Chief Executive Officer (executive)
Louis Coetzee has over 27 years’ experience in business development, promotion and financing in both the public and
private sector. In recent years, he has concentrated on the exploration and mining arena where he has founded,
promoted and developed a number of junior mineral exploration companies based mainly on Tanzanian assets. Louis
has tertiary qualifications in law and languages, project management, supply chain management and an MBA from
Bond University (Australia) specialising in entrepreneurship, and business planning and strategy. He has worked in
various project management and business development roles mostly in the mining industry throughout his career.
Between 2007 and 2009, he held the position of Vice-President, Business Development with Canadian listed Great
Basin Gold (TSX: CBG). Mr. Coetzee is also Executive Chairman of AIM-listed Katoro Gold plc and Non-Executive
Chairman of LSE (Standard List) Mast Energy Developments Plc in which Kibo has a significant shareholding.
Noel O’Keeffe, BSc (Hons), Geology, MBA, CG (Affiliated), Age 58 – Technical Director (non-executive) and
Company Secretary
Noel O’Keeffe has over 30 years’ experience in mineral exploration and has worked on a variety of base metal and
gold projects in Ireland, Canada, Australia and Africa. Prior to co-founding Kibo in 2008 he worked as a quality
coordinator with Boston Scientific (Ireland) Ltd, a multinational medical device company. He also worked part-time
for Irish geological services group, Aurum Exploration Ltd during 2003 and early 2004. During the mid-nineties he
was exploration manager with Ormonde Mining plc in Tanzania, a company currently listed on the Irish Stock
Exchange and on AIM. Previously Noel was a senior geological consultant with BDA Consultants Limited and worked
on both government and private sector contracts. Earlier in his career, Noel worked as a geologist for Burmin
Exploration and Development plc and for its Canadian and Australian subsidiaries.
Andreas (Andrew) Lianos, CA(SA), ACA, ACMA, Age 55 – Chairman of the Audit Committee (non-executive)
Andrew is a chartered accountant, certified management accountant, registered internal auditor and JSE qualified
executive who started his professional career in 1989 with Grant Thornton International. Andrew entered the
corporate finance industry in 1994 by joining Deloitte & Touche Corporate Finance. In 1996 he joined Merrill Lynch
Corporate Finance and was part of the team that founded Labyrinth Corporate Finance during 1997. He has been
intimately involved in a number of IPOs since the bull market of the 90’s to date, and has substantial transaction
experience in the resources, food- and leisure industries. Andrew serves on the boards of a number of public
companies and co-founded River Group in 1998. He has since been involved in a number of successful RTOs and IPOs
on the JSE, TSX, ASX and LSE, cross-border restructurings and resources transactions in Canada, the Central African
Republic, Angola, Zambia, Zimbabwe, Tanzania and South Africa.
Chris Schutte B(Eng) Mech, MBL, Age 60 – Capital Projects’ Director (Executive)
Chris has more than 30 years’ experience in the Energy Sector in Southern Africa. This includes 27 years working for
Eskom (Electricity Utility in South Africa) in various positions including Power Station Manager and Senior General
Manager. He also worked for Tongaat Hulett as Energy Consultant developing a bagasse fired power station. In 2012
he joined an Energy Development Company that works in Mozambique and is AIM listed. He was appointed as non-
executive director and later as Executive Director for a period of 5 years. Chris has extensive experience in power
station development, construction and management. He also understands the Southern African energy environment
and has extensive of experience in EPC processes and negotiations.
Role of Technical Director
The Technical Director role of Mr. O’Keeffe is not an executive function, and neither is he a member of the executive
committee of the Company. He provides his services as Technical Director on a part time basis independent of his
positions as non-executive director.
15
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
Review of Business Developments throughout the year to date
In June 2021 Kibo announced a significant strategy shift, largely prompted by a global surge in clean energy policies
and investment aimed at putting the energy system on track to achieve the global Sustainable Development Goals of
the 2030 Agenda for Sustainable Development as was reiterated during COP 26. This made it increasingly difficult to
promote and fund the fossil fuel energy projects, notwithstanding intended integration of renewable energy
components in the development of these projects.
The underlying strategic concept of the Kibo Strategy assumes long term energy solutions as a key enabler for
Sustainability in a circular economy. Kibo therefore restated its strategy to advance the Company as a significant
developer of sustainable energy solutions, integrating renewable and alternative generation with energy storage. Kibo
will therefore, forthwith, focus on the acquisition, development and operationalisation of a portfolio of sustainable,
renewable energy assets and dispose of, or reposition, our fossil fuel utility projects.
The establishment and maintenance of a sustainable project pipeline that will be delivering production assets
therefore remains a main high-level target. This requires exclusive focus on the rapidly expanding renewable and
clean energy markets to produce a pipeline of new projects in the United Kingdom (“UK) and SADC Countries, some
of which have already been acquired and currently being integrated into the Company structure.
The joint investment with South African group Industrial Green Energy Solutions (IGES), to convert un-recyclable
plastic to syngas (using pyrolysis) in energy starved South Africa for industrial power production, has also progressed
further. Kibo recently announced progress on the first of various projects in the project pipeline and look forward to
the anticipated financial close later in 2022 of the first 2.7 MW phase, for which Kibo has a private industrial off-take
agreement. Success with this phase will bode well for the rapid expansion of this project to its full c. 8 MW potential.
It will also bolster the development of the project pipeline, aimed at a conducive South African energy market segment
driven by the demand for Independent Power Producers and recent legislative restrictions on the disposal of certain
plastics.
As the UK Government set out to deliver energy security and accelerate the transition to a low carbon economy it
understands that it will require urgent and ambitious action at home and abroad. The UK’s strategy continues to be
based on the principle that independently regulated, competitive energy markets, are the most cost-effective and
efficient way of delivering its objectives. Kibo is also leveraging its growing experience in the waste-to-energy in the
pursuit of various waste-to-energy opportunities in the UK-market.
Kibo’s renewed strategy will benefit from the Company’s experience in the renewable energy sector in recent years.
This has been acquired historically through our work in developing renewable energy and storage solutions for
integration with its large utility coal projects as well as being the cornerstone promoter behind our 55% AIM
subsidiary, Mast Energy Developments plc (“MED”). After MED completed a successful IPO on the London Stock
Exchange in 2021, raising £5.54 million to acquire of a c. 50 MW reserve power portfolio in the short to medium term
it already has a 9 MW site in production, 5 MW site under construction, 4.4 MW in development and a further four
sites totalling 29 MW in an advanced stage of acquisition.
In terms of International Financial Reporting Standards (IFRS), intangible assets with an indefinite life must be tested
for impairment on an annual basis. The change in the Group’s strategy during 2021 to move toward renewable
energies coupled with global divestments in fossil fuel assets, resulted therein that the Group recognised impairment
of £20,088,240 related to its coal assets. Notwithstanding the impairment, the disposal plans for our legacy fossil fuel
assets in Tanzania, Mozambique and Botswana, are progressing well with expressions of interest currently under
evaluation. The result for the reporting period amounted to a loss of £23,148,155 for the year ended 31 December
2021 (31 December 2020: £6,417,237
as detailed further in the Statement of Profit or Loss and Other Comprehensive
Income, and further details on financial activities are detailed elsewhere in the Annual Report. The loss is primarily
due to the impairment of non-current assets, referred to above
Post Statement of Financial Position events
)
Settlement of Outstanding Fees to Directors and Management
Kibo settled outstanding fees owing to directors and management through the issue of a 7% convertible loan note
redeemable instrument. The convertible instrument provides for the issue of unsecured redeemable convertible loan
notes of integral multiples of £1 each to the aggregate amount of £672,824. The subscriptions for the notes shall be
used to fund the Company’s working capital requirements related to outstanding salaries and fees due to
management, directors and former directors who are the sole subscribers to the notes.
16
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
Appointment of Shard Capital Partners LLP as Joint Broker
Kibo appointed Shard Capital Partners LLP as joint broker to the Company with immediate effect, to act alongside
Hybridan LLP, who remains the Company's joint broker, and RFC Ambrian Ltd, who remains nominated advisor.
Power Purchase Agreement on South Africa Waste to Energy Project – Sustineri Energy (Pty) Ltd
Kibo entered a 10-year take-or-pay conditional Power Purchase Agreement (`PPA') to generate baseload electricity
from a 2.7 MW plastic-to-syngas power plant. The plant will be constructed, commissioned and operated for an
Industrial Business Park Developer in Gauteng, South Africa. The project, is the first project under Sustineri Energy
(Pty) Ltd, a joint venture in which Kibo holds 65% and the balance of 35% is held by Industrial Green Energy Solutions
(Pty) Ltd.
Signing of Funding Facility Agreement with Institutional Investor and Issue of Shares in lieu of Payment
Kibo signed a bridging loan facility agreement with an institutional investor for up to £3m with a term of up to 36
months. The facility provides for an initial drawdown of £1m which is immediately available to the Company on
signing of the facility. Funds advanced under the facility will attract a fixed coupon interest rate of 3.5% and will be
repayable with accrued interest, 4 months from the date of drawdown.
The Investor shall receive warrants equal to 30% of each drawdown divided by the average of the daily VWAP for
each of the 5 consecutive trading days immediately prior to the applicable drawdown date, with a 36-month term to
expiry from the date of issuance. The warrants are exercisable at a subscription price being equal to 130% of the then
prevailing reference price. If the share price of the Company is above a 100% premium to the relevant exercise price
for 30 consecutive days, then 50% of the warrants will be cancelled, unless otherwise previously exercised. With
regards to the initial advance, the Investor will receive 168,274,625 warrants.
In compliance with the facility terms for the initial advance, the Company has issued shares in settlement of a facility
implementation fee of £70k in the amount of 39,264,079 new ordinary Kibo shares of €0.001 each at a deemed price
of 0.17828 pence per share. Additionally, the Company has issued 13,157,895 new ordinary Kibo shares of €0.001
each at 0.19 pence per share to certain providers of financial and technical services in payment of outstanding
invoices.
Convertible Instrument Extension of Redemption Date
On 1 March 2022 Kibo agreed an extension of one month for the redemption date of the convertible instrument, with
all but one of the subscribers to the notes. The new extended redemption date was revised to be 1 April 2022. The
extension included notes in aggregate of £657,985, from the total amount of £672,824. The amount of £14,839 (face
value and interest) was settled in cash, in accordance with the terms of the convertible instrument announced on 07
January 2022.
On 1 April 2022 Kibo agreed a further extension of three months for the redemption date of the convertible
instrument, with all remaining noteholders. The new extended redemption date will now be 1 July 2022. The further
extension includes notes in aggregate of £657,985.
Agreement to deploy at least 1 Gigawatt of Long Duration Energy Storage in Southern Africa
Kibo signed a rolling 5-year Framework Agreement with Enerox GmbH ('CellCube'), to develop and deploy CellCube
based Long Duration Energy Storage ("LDES") solutions in selected target sectors in Southern Africa. Under the
agreement Kibo has been granted conditional exclusive rights, subject to successful Proof of Concepts ("PoC"), to the
marketing, sales, configuration and delivery of CellCube's vanadium redox flow batteries ("VRFB") in the development
of its LDES solutions in microgrid applications behind the meter.
Appointment of Group Chief Financial Officer
Kibo appointed Mr. Cobus van der Merwe as Group Chief Financial Officer with effect from the 1
Settlement of Outstanding Loan and Issue of Shares
of June 2022.
st
Kibo issued 56,118,047 new Kibo shares of €0.001 each at a deemed issue price of £0.0016 per share to Sanderson
Capital Partners Limited in full and final settlement of £89,788.88 of the total remaining outstanding amount owing
pursuant to the forward payment facility signed between Sanderson Capital Partners Limited and the Company in
December 2016.
17
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
Principal Risks and Uncertainties
The realisation of coal mining and energy assets is dependent on the discovery and successful development of
economic mineral reserves and/or completion of positive integrated bankable feasibility studies and is subject to a
number of significant potential risks summarised as follows, and described further below:
•
•
•
•
•
•
•
•
•
•
•
strategic risk;
funding risk;
regulatory risk;
commercial risk;
operational risk;
staffing and key personnel risks;
speculative nature of mineral exploration and development;
development and construction risk;
political instability;
uninsurable risks; and
foreign investment risks including increases in taxes, royalties and renegotiation of contracts.
Strategic risk
Significant and increasing competition exists for mineral and energy project acquisition opportunities throughout the
world. Because of this competition, the Company may be unable to acquire and exploit additional attractive projects
on terms it considers acceptable. Accordingly, there can be no assurance that the Company will acquire any interest
in additional mining and/or energy development projects that would yield commercial opportunities. The Company
expects to undertake comprehensive due diligence where warranted to help ensure opportunities are subjected to
proper evaluation.
Funding risk
In the past the Company has raised funds via equity contributions from new and existing shareholders, thereby
ensuring the Company remains a going concern until such time that revenues are earned through the sale or
development of its projects. There can be no assurance that such funds will continue to be available on reasonable
terms, or at all in future. The Directors regularly review cash flow requirements to ensure the Company can meet
financial obligations as and when they fall due.
Commercial risk
The exploration, mining and renewable energy industries are competitive and there is no assurance that, even if
commercial opportunities are available to the Company, a profitable market will exist for the sale of such
opportunities. There can be no assurance that the quality of the resources will be such that the Company assets can
be realised at a profit or, where applicable, support its energy development projects. Factors beyond the control of
the Company may affect the marketability of any projects discovered. Commodity prices are subject to volatile price
changes from a variety of factors including international economic and political trends, expectations of inflation,
global and regional demand, currency exchange fluctuations, interest rates and global or regional consumption
patterns, speculative activities and increased production due to improved extraction, mining and production
methods. Ultimately, the Company expects that prior to a development decision, a project would be the subject of a
feasibility analysis to ensure there exists an appropriate level of confidence in its economic viability.
Regulatory risk
The UK power sector has undergone a number of considerable regulatory changes over the last few years and is now
at a state of transition from large fossil-fuel plants to a more diverse range of power generation sources including
renewables, small, distributed plants and new nuclear. As a result, there is greater regulatory involvement in the
structure of the UK power market than has been the case over the last 20 years. Therefore, there remains a risk that
future interventions by Ofgem or Government could have an adverse impact on the underlying assets that the Group
manages and/or owns.
Operational risk
Exploration, mining and renewable energy developments are subject to hazards normally encountered in exploration,
development, construction and production. Although it is intended to take adequate precautions to minimise risk,
there is a possibility of a material adverse impact on the Company’s operations and its financial results should these
risks realise outside the allowable risk parameters. The Company will develop and maintain policies appropriate to
the stage of development of its various projects.
18
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
Staffing and key personnel risks
Recruiting and retaining qualified personnel is critical to the Company’s success. The number of persons skilled in the
acquisition, exploration and development of mining properties and in the development of energy projects is limited
and competition for such persons is intense. While the Company has good relations with its employees, these relations
may be impacted by changes in the scheme of labour relations which may be introduced by the relevant governmental
authorities. Adverse changes in such legislation may have a material adverse effect on the Company’s business, results
of operations and financial condition. Staff are encouraged to discuss with management matters of interest to the
employees and subjects affecting day-to-day operations of the Company.
Speculative nature of mineral exploration & energy project development
In addition to the above there can be no assurance that the current activities will result in profitable project execution.
The recoverability of the carrying value of exploration, mining and renewable energy assets is dependent on the
successful discovery of economically recoverable reserves, the achievement of profitable operations, successful
development of the underlying projects to commercial viability and the ability of the Company to raise additional
financing, if necessary, or alternatively upon the Company’s ability to dispose of its interests on an advantageous basis.
Changes in market conditions resulted in material write downs of the carrying value of the Company’s assets.
Development of the Company’s assets is, amongst others, contingent upon obtaining satisfactory feasibility results
and securing additional adequate funding. Mineral and energy project development involves substantial expenses and
a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to
adequately mitigate. The degree of risk reduces substantially when a Company’s properties move from the
exploration phase to the advanced feasibility phase. Management continuously assesses funding requirements against
project viability and prioritise key projects over the short to medium term.
The development of mineral deposits and renewable energy projects is dependent upon several factors including the
technical skill of the personnel involved. The commercial viability of a project, once discovered, is also dependent
upon a number of factors, including the size, grade and proximity to infrastructure, commodity prices and government
regulations, including regulations relating to royalties, allowable production, importing and exporting of resources,
and environmental protection. In addition, several years can elapse from the initial phase of exploration until
commercial operations are commenced.
Development and construction risk
The Group will continue to develop new project sites which includes obtaining planning permission, securing land
(under option to lease or freehold), and obtaining energy, gas and grid connections. The Group will also oversee the
construction of these projects where needed. Risks to project delivery include damage or disruption to suppliers or
to relevant manufacturing or distribution capabilities due to weather, natural disaster, fire, terrorism, pandemic,
strikes, or other reasons could impair our ability to deliver projects on time.
Failure to take adequate steps to mitigate the likelihood or potential impact of development and construction
setbacks, or to effectively manage such events if they occur, could adversely affect our business or financial results.
There are inherent risks that the Group may not ultimately be successful in achieving the full development and
construction of every site and sunk costs could be lost. However, the risk is mitigated as the Group targets shovel
ready sites that adhere to specific requirements, coupled with experienced senior management team.
Political stability
The Company is conducting its operational activities in Mozambique, Botswana, Tanzania, South Africa and the UK.
The directors believe that the governments of these countries support the development of natural resources and
energy production by foreign investors and actively monitor the situation. However, there is no assurance that future
political and economic conditions in these countries will not result in their governments adopting different policies
regarding foreign development and ownership of mineral resources. Any changes in policy affecting ownership of
assets, taxation, rates of exchange, environmental protection, labour relations, repatriation of income and return of
capital, may affect the Company’s ability to develop its projects.
Uninsurable risks
The Company may become subject to liability for accidents, pollution and other hazards against which it cannot insure
or against which it may elect not to insure because of prohibitive premium costs or for other reasons, such as amounts
which exceed policy limits. The company chooses to manage these risks, as best possible, through cautious business
practice, on a continuous basis.
19
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
Foreign investment risks including increases in taxes, royalties and renegotiation of contracts
The Group is subject to risk arising from the ever-changing economic environment in which its subsidiaries operate,
mainly driven by the changing regulatory environment governing corporate taxation, transfer pricing and other
investment related operational activities. The Group continues to re-assess its investment decisions to limit exposure
to the ever-changing regulatory environment in which it operates.
Directors’ Interests
The interests of the directors and Company secretary (held directly and indirectly), who held office at the date of
approval of the financial statements, in the share capital of the Company are as follows:
Ordinary Shares (held directly and indirectly)
Directors & Secretary
27 June 2022
31 December 2021
31 December 2020
6,004,842
Christian Schaffalitzky
Lukas Maree
Wenzel Kerremans
Noel O’Keeffe
Louis Coetzee
Andreas Lianos
Christiaan Schutte
Warrants (held directly and indirectly)
7,037,047
19,505,996
17,073,663
-
-
-
6,004,842
-
-
7,037,047
19,505,996
17,073,663
-
6,004,842
6,728,400
1,222,500
7,037,047
19,505,996
17,073,663
-
27 June 2022
31 December 2021
31 December 2020
Directors & Secretary
Christian Schaffalitzky
Louis Coetzee
Noel O’Keeffe
Andreas Lianos
Christiaan Schutte
1,942,500
5,720,000
1,722,800
4,742,500
-
1,942,500
5,720,000
1,722,800
4,742,500
-
5,827,500
17,160,000
5,168,400
14,227,500
-
The above warrants in issue are exercisable at a price of £0.006 at any time up to 3 November 2022.
For further detail surrounding the ordinary shares, share options and warrants in issue, refer to Notes 16 and 18 of
the annual financial statements.
Convertible Loan Notes (held directly and indirectly)
27 June 2022
31 December 2021
31 December 2020
Directors & Secretary
Christian Schaffalitzky
Louis Coetzee
Noel O’Keeffe
Andreas Lianos
Christiaan Schutte
29,752
218,904
64,717
38,782
-
-
-
-
-
-
-
-
-
-
-
The above notes in issue bear interest at 7% per annum, are unsecured, and convertible into ordinary shares at the
option of the note holder on redemption date. Each note represents £1 of debt owing whilst in issue.
Transactions Involving Directors
There have been no contracts or arrangements of significance during the period in which Directors of the Company,
or their related parties, were interested other than as disclosed in Note 24 to the annual financial statements.
Subsequent to year end, on 7 January 2022, the Directors of the Company entered into a debt conversion agreement
wherein debt in the amount of £352,155 was converted into loan notes as noted above.
20
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
Directors’ meetings
The Company held seventeen (17) Board meetings during the reporting period and the number of meetings attended
by each of the directors of the Company during the year to 31 December 2021 were:
Number of
Meetings
Attended
Number of
Meetings Eligible
to Attend
Director Name
Position
Christian Schaffalitzky
Christiaan Schutte
Louis Coetzee
Andreas Lianos
Noel O’Keeffe
Lukas Maree *
Wenzel Kerremans *
Chairman
Executive Director
Chief Executive Officer
Non-Executive Director
Non-Executive Technical Director
Executive Director
Non-Executive Director
17
16
17
17
16
9
13
17
17
17
17
17
17
17
* Resigned on 30 September 2021
Under the Company’s Memorandum & Articles of Association, one third of directors are required to retire by rotation
from the Board on an annual basis, through resignation at the Annual General Meeting (AGM) and may put themselves
forward again for re-election at the AGM.
Committee meetings
The Company held two (2) Audit Committee meetings during the reporting period and the number of meetings
Number of
attended by each of the members during the year to 31 December 2021 were:
Meetings Eligible
to Attend
Number of
Meetings
Attended
Director Name
Position
Andreas Lianos
Christian Schaffalitzky
Wenzel Kerremans*
Chairman (Non-Executive)
Non-Executive Director
Non-Executive Director
2
2
2
2
2
2
* Resigned on 30 September 2021
The Company held one (1) Remuneration Committee meetings during the reporting period and the number of
meetings attended by each of the members during the year to 31 December 2021 were:
Number of
Meetings
Attended
Number of
Meetings Eligible
to Attend
Director Name
Position
Christian Schaffalitzky
Andreas Lianos
Wenzel Kerremans*
Chairman (Non-Executive)
Non-Executive Director
Non-Executive Director
1
1
1
1
1
1
* Resigned on 30 September 2021
The Company held one (1) Governance Committee meeting during the reporting period and the number of meetings
attended by each of the members during the year to 31 December 2021 were:
Number of
Meetings
Attended
Number of
Meetings Eligible
to Attend
Director Name
Position
Christian Schaffalitzky
Noel O’Keeffe
Wenzel Kerremans *
Chairman (Non-executive)
Non-Executive Director
Non-Executive Director
1
1
1
1
1
1
* Resigned on 30 September 2021
21
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
Significant Shareholdings
According to the latest information available to the Company, in addition to the interests of the directors, at 31
December 2021 and at the date of this report, the following shareholders own 3% or more beneficial interest, either
direct or indirect, of the issued share capital of the Company, which is considered significant for disclosure purposes
in the annual financial statements:
Percentage of issued share capital
27 June 2022
31 December 2021
31 December 2020
Sanderson Capital Partners Ltd
Yakoub Yakoubov
David Ryan
Pegasus Pirouette Capital London Ltd
Charlemont
Capital
société à responsabilité limitée
Subsidiary Undertakings
Investments
12.79%
3.54%
4.28%
-
3.02%
13.43%
3.64%
-
3.14%
-
11.03%
3.06%
3.22%
-
-
Details of the Company’s subsidiary undertakings are set out in Note 23 to the annual financial statements.
Political Donations
During the period, the Group made no charitable or political contributions (2020: £ Nil).
Going Concern
The financial statements have been prepared on the going concern basis which contemplates the continuity of normal
business activities and the realisation of assets and the settlement of liabilities in the normal course of business. In
performing the going concern assessment, the Board considered various factors, including the availability of cash and
cash equivalents; data relating to working capital requirements for the foreseeable future; cash-flows from
operational commencement, available information about the future, the possible outcomes of planned events, changes
in future conditions, the current global economic situation due to the Covid-19 pandemic and Ukraine conflict and the
responses to such events and conditions that would be available to the Board.
The Board has, inter alia, considered the following specific factors in determining whether the Group is a going
concern:
•
•
•
The significant financial loss for the year amounting to £23,148,155 (2020: £6,417,237);
Cash and cash equivalents readily available to the Group in the amount of £2,082,906 in order to pay its
creditors and maturing liabilities in the amount of £2,198,437 as and when they fall due and meet its operating
costs for the ensuing twelve months; and
Whether the Group has available cash resources, or equivalent short term funding opportunities in the
foreseeable future, to deploy in developing and growing existing operations or invest in new opportunities.
Following from the losses incurred in the current financial period, coupled with the net current liability position the
Group finds itself in as at December 2021, these conditions, together with those mentioned above are considered to
indicate that a material uncertainty exists which may cast significant doubt on the Group’s ability to continue as a
going concern.
This is largely attributable to the short-term liquidity position the Group finds itself in as a result of the significant
capital required to develop projects that exceeds cash contributed to the group by the capital contributors. The
Directors have evaluated the Groups liquidity requirements to confirm whether the Group has adequate cash
resources to continue as a going concern for the foreseeable future, taking into account the net current liability
position, and consequently prepared a cash flow forecast covering a period of 12 months from the date of these
financial statements, concluding that the Group would be able to continue its operations as a going concern.
22
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
In response to the net current liability position, to address future cash flow requirements, detailed liquidity
improvement initiatives have been identified and are being pursued, with their implementation regularly monitored
in order to ensure the Group is able to alleviate the liquidity constraints in the foreseeable future. Therefore, the ability
of the Group to continue as a going concern is dependent on the successful implementation or conclusion of the below
noted matters in order to address the liquidity risk the Group faces on an ongoing basis:
•
•
Successful conclusion of funding requirements of the Group in order to continue development of the
underlying projects of the Group; and
Successful realisation of the fossil fuel assets in the foreseeable future in order to contribute positively toward
the cash reserves of the Group.
As the Board is confident it would be able to successfully implement the above matters, it has adopted the going
concern basis of accounting in preparing the consolidated financial statements.
Environmental responsibility
The Company recognises that its activities require it to have regard to the potential impact that it, its subsidiaries and
partners may have on the environment. Where exploration and development works are carried out, care is taken to
limit the amount of disturbance and where any remediation works are required they are carried out as and when
required.
Dividends
There have been no dividends declared or paid during the current financial period (2020: £ Nil).
Corporate Governance Policy
The Board is aware of the importance to conform to its statutory responsibilities and industry good practice in relation
to corporate governance of the Group.
The Board is accountable to the shareholders for delivery of sustained value growth. In order to support its duties
and responsibilities the Board implements control procedures that assess and manage risk and ensure robust
financial and operational management within the Company. The principal risks that the Company is exposed to can
be classified under the general headings of exploration risk, commodity risk, price risk, currency risk and political
risk.
The Board also sets the Company’s core values and ethical standards of business conduct ensuring these are
effectively communicated to all staff and are monitored continuously by the Board.
The Board sets the Company’s strategy and monitors its implementation through management and financial
performance reviews. It also works to ensure that adequate resources are available to implement strategy in a timely
manner.
The Company subscribes to the values of good corporate governance at all levels and is committed to conduct business
with discipline, integrity and social responsibility. The Board of Directors is firmly committed to promoting Kibo
Energy plc’s adherence to the principles contained in the QCA Corporate Governance Code (2018) (“QCA Code”), and
constantly reviews its performance against the QCA Code. The Directors are committed to the implementation of the
principles and non-compliance is limited to the matter listed in this report. In compliance with its statutory, AIM &
JSE listing obligations, the directors present a Corporate Governance Report on page 7.
Internal Audit
The Company does not have an internal audit function. Currently the operations of the Group do not warrant an
internal audit function, however the Board is assessing the need to establish an internal audit department considering
future prospects as the Group’s operations increase. During the period the Board has taken responsibility to ensure
effective governance, risk management and that the internal control environment is maintained.
23
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
Health, Safety and Environmental Policy
The Group is committed to high standards of Health, Safety and Environmental performance across our business. Our
goal is to protect people, minimise harm to the environment, integrate biodiversity considerations and reduce
disruption to our neighbouring communities. We seek to achieve continuous improvement in our Health, Safety and
Environmental performance.
Corporate Social Responsibility Policy (CSR)
The Group’s policy is to conduct all our business operations to best industry standards and to behave in a socially
responsible manner. Our goal is to behave ethically and with integrity and to respect cultural, national and religious
diversity.
Governance of IT
The Board is responsible for IT governance as an integral part of the Group’s governance as a whole. The IT function
is not expected to significantly change in the foreseeable future. The Board has the required policies and procedures
in place to ensure governance of IT is adhered to.
Integrated and Sustainability Reporting
Integrated Reporting is defined as a “holistic and integrated representation of the Group’s performance in terms of
both its finances and its sustainability”. The Group currently does not have a separate integrated report. The Board
and its sub-committees are in the process of assessing the principles and practices of integrated reporting and
sustainability reporting to ensure that adequate information about the operations of the Group, the sustainability
issues pertinent to its business, the financial results and the results of its operations and cash flows are disclosed in a
single report.
Accounting records
The measures taken by the directors to ensure compliance with the requirements in Sections 281 to 285 of the
Companies Act 2014, regarding proper books of account, are the implementation of necessary policies and procedures
for recording transactions, the employment of competent accounting personnel with appropriate expertise and the
provision of adequate resources to the financial function. The books of account of the Company are maintained at 119
Witch-Hazel Avenue, Highveld Technopark, Centurion 0157, South Africa.
Auditors
The auditors, Crowe Ireland, were re-appointed as the Company’s auditors at the last Annual General Meeting and
have indicated their willingness to continue in office in accordance with section s383(2) of the Companies Act 2014.
Provision of information to the auditor
Each of the persons who are Directors at the time when this Directors’ Report is approved has confirmed that:
•
•
So far as that Director is aware, there is no relevant audit information of which the Company’s auditor is
unaware, and
That Director has taken all the steps that ought to have been taken as a Director in order to be aware of any
information needed by the Company’s auditors in connection with preparing their report and to establish
that the Company’s auditor are aware of that information.
Compliance statement
The directors acknowledge that they are responsible for securing the Company's compliance with the Company's
''relevant obligations'' within the meaning of section 225 of the Companies Act 2014 (described below as the ''relevant
obligations'').
24
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ REPORT
The directors confirm that they have:
•
•
•
drawn up a compliance policy statement setting out the Company's policies (that are, in the opinion of the
directors, appropriate to the Company) in respect of the Company's compliance with its Relevant Obligations;
put in place appropriate arrangements or structures that, in the opinion of the Directors, provide a reasonable
assurance of compliance in all material respects with the Company's Relevant Obligations; and
during the financial year to which this report relates, conducted a review of the arrangements of structures
that the directors have put in place to ensure material compliance with the Company's Relevant Obligations.
On behalf of the Board
Christian Schaffalitzky
27 June 2022
Noel O’Keeffe
27 June 2022
25
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
DIRECTORS’ STATEMENT OF RESPONSIBILITIES
The directors are responsible for preparing the Group and Company financial statements in accordance with
applicable Laws and Regulations.
Irish Company law requires the directors to prepare Group and parent Company financial statements for each
financial period. As permitted by Company law, the directors have prepared the Group financial statements in
accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU IFRS) and
have elected to prepare the Company financial statements, as applied in accordance with the provisions of the
Companies Act 2014.
The Group and Company financial statements are required by law and EU IFRS to present fairly the financial position
and performance of the Group. References in the relevant part of the Companies Act 2014 to financial statements
giving a true and fair view are provided for in the Act to mean such references to the financial statements achieving a
fair presentation. In preparing each of the Group and Company financial statements, the directors are required to:
select suitable accounting policies and apply them consistently;
•
• make judgements and estimates that are reasonable and prudent;
•
state whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group and Company will continue in business.
•
The directors confirm they have complied with the above requirements in preparing these accounts.
Under applicable law the directors are also responsible for preparing a Directors’ Report and reports relating to
directors’ remuneration and corporate governance that comply with that law and those rules.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any
time the financial position of the Company and which enable them to ensure that its financial statements are prepared
in accordance with International Financial Reporting Standards, and comply with the Companies Act 2014, and
European Communities (Companies: Group Accounts) Regulations 1992 and all regulations to be construed as one
with those acts. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets
of the Group and Company 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 Republic of Ireland governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
On behalf of the Board
Christian Schaffalitzky
27 June 2022
Noel O’Keeffe
27 June 2022
26
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
AUDIT COMMITTEE REPORT
I am pleased to present this report on behalf of the Audit Committee and to report on the progress made by the
Committee during the year.
Aims of the Audit Committee
Our purpose is to assist the Board in managing risk, discharging its duties regarding the preparation of financial
statements, ensure that a robust framework of accounting policies is in place and enacted and oversee the
maintenance of proper internal financial controls.
The Audit Committee consists of myself (Chairman) and Christian Schaffalitzky. The Committee aims to meet at least
once each year and its key responsibilities include monitoring the integrity of the Group’s financial reporting and to
approve and recommend the annual financial statements to the Board. The Chief Executive Officer and Chief Financial
Officer are invited to attend meetings of the Committee.
The Audit Committee is committed to:
• Maintaining the integrity of the financial statements of the Company and reviewing any significant reporting
matters therein;
Reviewing the Annual & Interim Report and Accounts and monitoring the accuracy and fairness of the
Company’s financial statements;
Ensuring compliance of financial statements with applicable accounting standards and the AIM & JSE Rules;
Reviewing the adequacy and effectiveness of the internal financial control environment and risk management
systems; and
•
•
•
• Overseeing the relationship with and the remuneration of the external auditor, reviewing their performance
and advising the Board members on their appointment.
The Audit Committee met twice in 2021.
Activities of the Audit Committee during the year
On behalf of the Board, the Audit Committee has closely monitored the maintenance of internal controls and risk
management during the year. Key financial risks are reported during each Audit Committee meeting, including
developments and progress made towards mitigating these risks.
The Audit committee received and reviewed reports from the Chief Financial Officer, other members of management
and external auditors relating to the interim and annual accounts and the accounting and internal control systems in
use throughout the Group.
The external auditors attended meetings to discuss the planning and conclusions of their work and met with members
of the committee. The committee was able to call for information from management and consult with the external
auditors directly as required.
The objectivity and independence of the external auditors was safeguarded by reviewing the auditors’ formal
declarations, monitoring relationships between key audit staff and the Company and tracking the level of non-audit
fees payable to the auditors. Significant attention was given to the level of non-audit fees provided.
As noted above, the committee met twice during the year, to review the 2020 annual accounts and the interim
accounts to 30 June 2021 and audit planning for the year ended 31 December 2021. Members of the committee
reviewed with the independent auditor its judgements as to the acceptability of the Company’s accounting principles.
Since the year end the committee has met further with the auditors to consider the 2021 financial statements. In
particular, the committee discussed the significant audit risks, accounting for acquisitions and disposals during the
year and the application of the new accounting standard. In addition, the committee monitors the auditor firm’s
independence from Company management and the Company.
___________________________
Andreas Lianos
Chairman
Audit Committee
27 June 2022
27
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Kibo Energy Plc
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Kibo Energy Plc (“the Company”) and its subsidiaries (the
“Group”) for the year ended 31 December 2021, which comprise the Consolidated Statement of Profit or Loss and
Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Profit or
Loss and Other Comprehensive Income, the Company Statement of Financial Position, the Consolidated Statement of
Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows, the
Company Statement of Cash Flows, the Summary of Significant Accounting Policies and the related notes to the
consolidated financial statements. The financial reporting framework that has been applied in their preparation is
Irish Law and International Financial Reporting Standards (“IFRSs”), as adopted by the EU.
In our opinion, the accompanying consolidated financial statements:
•
•
•
•
give a true and fair view of the consolidated financial position of the Group as at 31 December 2021 and of the
profit or loss and cash flows of the Group for the year then ended;
give a true and fair view of the financial position of the Company as at 31 December 2021 and of the Company
profit or loss and cash flows for the year then ended;
have been properly prepared in accordance with International Financial Reporting Standards (“IFRSs”), as
adopted by the EU; and
have been properly prepared in accordance with the requirements of the Companies Act 2014.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (“ISAs (Ireland)”). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the
International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and
we have fulfilled our other ethical responsibilities in accordance with the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
We draw attention to the Section headed Going Concern on page 42 of the financial statements, which details the
factors the Company has considered when assessing the going concern position. As detailed in the relevant note on
page 42, the uncertainty surrounding the availability of funds to finance ongoing working capital requirements and
the financing of commercial projects of the Group through to the stage of cash generation indicates the existence of a
material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion
is not modified in respect of this matter.
Our responsibilities with respect to Going Concern are described further the Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements section of this report while the directors’ responsibilities are described
further in the Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements section.
Overview of our audit approach
Our application of materiality
In planning and performing our audit we use the concept of materiality. An item is considered material if it could
reasonably be expected to change the economic decisions of a user of the financial statements
Materiality is used as
to help establish our areas of audit focus and to evaluate the impact of misstatements identified in the course of the
audit.
.
28
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
INDEPENDENT AUDITOR’S REPORT
Materiality for the Group financial statements as a whole was set at £170,000 (2020: £320,000) This was based on
5% of the Group operating loss for the year excluding exceptional impairment charges on non-current assets . Parent
company materiality was set at £170,000 (2020: £240,000) based on 1% of total assets of the Company.
We use Performance Materiality to determine the nature and extent of our audit testing. Performance Materiality is a
measure based on overall audit materiality (as above) adjusted downwards for the judgements we make as to entity
risk and specific risks around each audit area, having regard to the internal control environment.
For certain items such as related party transactions and directors’ remuneration disclosures, we may reduce
performance materiality further.
All errors identified in excess of 5% of Materiality (£8,500) (2020: £16,000) are reported to the Audit Committee.
Other errors below this threshold may be reported to the Audit Committee on qualitative grounds, if we believe
warranted.
Overview of the scope of our audit
The Group operates in seven main jurisdictions: Ireland, the UK, Cyprus, Tanzania, Botswana, South Africa and
Mozambique. The audit of Kibo Energy plc was conducted from Ireland. The transactions undertaken in Ireland are
Corporate and administrative in nature, principally capital fund raising and associated costs, professional fees and the
administration and incurrence of exploration and development expenditure on behalf of subsidiaries.
We engaged member firms of the Crowe international network to undertake work on the UK, Cyprus and Tanzanian
subsidiaries under our direction. Following discussions at the planning stage, we issued instructions to the network
firms that set out the significant risks to be addressed and the information we required to be reported. We further
reviewed and discussed their working papers on key findings, as well as obtaining information directly from
management on matters accounted for at subsidiary level but significant at group level.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
How the scope of our audit addressed the key audit matter
Key audit matter
Carrying value of indefinite life intangibles
their
Intangible assets with an indefinite life must be
tested for impairment on an annual basis. The
determination of
recoverable amount
requires judgement on the part of management in
both identifying and then valuing the relevant cash
generating units especially for projects where
there is an uncertain timeframe.
The Group has upstream and downstream power
generation and delivery projects in Tanzania
(Mbeya Coal to Power (MCPP), the UK (Rochdale
Power) and South Africa (Sustineri Project). The
intangible assets at 31 December 2021 totalled
£4.9m (2020: £18.5m). An impairment of £13.9M
was recognised during the year.
We considered the risk whether indicators of
impairment may exist as well as the risk of
misstatements of the estimated fair value of assets
impaired during the year.
Our procedures to obtain comfort that the balance of the
indefinite life intangible assets is not materially misstated,
-
included:
exploration
Obtaining and reviewing documentation supporting
the ownership and rights and obligations assertions
in relation to the exploration and evaluation assets,
as well as reviewing the status of the required
permits and
licenses. We also challenged the
transferability of asset rights of the Group where the
carrying value was based on proposed disposals;
Discussing and challenging management as to the
status of the projects developments and future
planned
and
management intentions on those projects;
challenging management’s
Considering
impairment review together with the calculations
and basis for the impairment charge on the MCPP
and Bordersley intangibles and goodwill;
Ensuring that the accounting for the exploration and
evaluation assets was in accordance with IFRS 6;
Assessing whether the disclosures in relation to the
valuation of the intangible assets are compliant with
the relevant financial reporting requirements, in
particular management’s treatment of the MCPP
asset as a non-current asset.
and development
and
-
-
-
-
29
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
INDEPENDENT AUDITOR’S REPORT
Carrying value of the Associate Undertaking in
Botswana
Our findings
We have obtained sufficient comfort that the Group has
accounted for its indefinite life intangibles in accordance with
applicable standards and with the accounting policies as set
out.
-
Our procedures to obtain comfort that the balance of the
associate asset is not materially misstated, included:
In 2019, Kibo restructured its holding in Kibo Energy
Botswana to a 35% interest of an enlarged resource
(MCIPP). As a result, it is accounted for as investment
in an associate at £9.7m. During 2021 the Group has
impaired the carrying value of the asset to £3.6M,
and recognised an impairment of £6.1M.
The carrying value of the associate is underpinned by
the interest of the Group in the Mabesekwa. The
Group has evaluated the underlying assets and
concluded that the realisable value from a disposal of
the interest is significantly less than the value in use
and the previous carrying value and an impairment
is required as noted above.
We considered the risk whether indicators of
impairment may exist as well as the risk of
misstatements of the estimated fair value of assets
impaired during the year.
-
-
-
-
reviewing
documentation
and
Obtaining
supporting
rights and
the ownership and
obligations assertions in relation to the exploration
and evaluation assets, as well as reviewing the
status of the required permits and licenses. We also
challenged the transferability of asset rights of the
Group since the carrying value is based on a
proposed disposal;
Discussing and challenging management as to the
status of the projects developments and future
planned exploration and development and
management intentions on those projects;
Considering
challenging management’s
impairment review together with the calculations
and basis for the impairment charge on MCIPP;
Assessing whether the disclosures in relation to
the valuation of the intangible assets are compliant
with the relevant financial reporting requirements,
in particular management’s treatment of the
MCIPP asset as a non-current asset.
.
and
Our findings
Other information
We have obtained sufficient comfort that the Group has
accounted for its investment in the associate in accordance
with applicable standards and with the accounting policies
as set out.
The directors are responsible for the other information. The other information comprises the information included in
the Annual report, other than the financial statements and our Auditors' report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. 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.
30
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
INDEPENDENT AUDITOR’S REPORT
Opinion on other matters prescribed by the Companies Act 2014
Based solely on the work undertaken in the course of the audit, we report that:
•
•
in our opinion, the information given in the Directors' Report is consistent with the financial statements; and
in our opinion, the Directors' Report has been prepared in accordance with applicable legal requirements.
We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily
and properly audited, and the financial statements are in agreement with the accounting records.
Matters on which we are required to report by exception
Based on the knowledge and understanding of the Company and its environment obtained in the course of the audit,
we have not identified any material misstatements in the Directors' Report.
The Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors' remuneration and
transactions required by sections 305 to 312 of the Act are not made. We have nothing to report in this regard.
Respective responsibilities and restrictions on use
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
As explained more fully in the Directors' Responsibilities Statement on page 26, the directors are responsible for the
preparation of the consolidated 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 the consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’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 management either intends to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 (Ireland) 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 consolidated financial statements.
31
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
INDEPENDENT AUDITOR’S REPORT
As part of an audit in accordance with ISAs (Ireland), we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
•
•
•
•
•
•
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control;
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control;
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management;
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern;
Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation;
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
32
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
INDEPENDENT AUDITOR’S REPORT
The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company's members in accordance with Section 391 of the Companies Act 2014. 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 Auditors' 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 for our audit work, for this
report, or for the opinions we have formed.
_________________________________________
Crowe Ireland
for and on behalf of
Chartered Accountants and Statutory Audit Firm
40 Mespil Road
Dublin 4
Date: 27 June 2022
33
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
All figures are stated in Sterling
Revenue
Gross loss
Cost of sales
Administrative expenses
Impairment of non-current assets
Listing and capital raising fees
Operating loss
Project and exploration expenditure
Investment and other income
Share of loss from associate
Loss before tax
Finance costs
for the period
Loss
Taxation
Other comprehensive loss:
Items that may be classified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Other Comprehensive loss for the period net of tax
Exchange differences reclassified on disposal of foreign operation
Total comprehensive loss for the period
Loss for the period
Attributable to the owners of the parent
Attributable to the non-controlling interest
Total comprehensive loss for the period
Attributable to the owners of the parent
Attributable to the non-controlling interest
Loss Per Share
31 December
2021
Note
Audited
£
31 December
2020
Audited
£
2
3
4
7
3,245
(31,076)
(34,321)
-
-
-
(2,325,750)
(20,705,209)
(321,365)
(24,071,363)
(687,963)
(3,393,687)
-
(1,027,658)
(6,473,547)
(2,052,202)
1,017,937
(48,357)
(23,148,155)
(46,372)
78,945
(332)
(6,417,237)
(22,303)
(23,148,155)
-,
(6,417,237)
-
(212,919)
132,298
345,217
152,635
274,305
121,670
(23,015,857)
(6,142,932)
(23,148,155)
(6,417,237)
(21,996,968)
(1,151,187)
(23,015,857)
(4,726,286)
(1,690,951)
(6,142,932)
(21,864,515)
(1,151,342)
(4,451,981)
(1,690,951)
Basic loss per share
Diluted loss per share
8
8
(0.009)
(0.009)
(0.003)
(0.003)
All activities derive from continuing operations.
The accompanying notes on pages 55-88 form an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 27 June 2022 and
signed on its behalf by:
On behalf of the Board
Christian Schaffalitzky
________________________
Noel.O’Keeffe
________________________
34
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
All figures are stated in Sterling
Assets
Non-Current Assets
Property, plant and equipment
Intangible assets
Investments in associates
Total non-current assets
Goodwill
Current Assets
Other financial assets
Other receivables
Total current assets
Cash
Total Assets
Equity and Liabilities
Equity
Called up share capital
Share premium account
Control reserve
Share based payment reserve
Translation reserve
Attributable to equity holders of the parent
Retained deficit
Total Equity
Non-controlling interest
Liabilities
Non-Current Liabilities
Total Non-Current Liabilities
Lease liability
Current Liabilities
Lease liability
Trade and other payables
Total Current Liabilities
Borrowings
Total Liabilities
Total Equity and Liabilities
31 December
2021
Audited
£
31 December
2020
Audited
£
Note
9
10
11
13
12
14
15
16
16
17
18
19
20
9
9
21
22
2,899,759
4,964,550
4,092,403
11,956,712
-
2,118
18,491,105
9,696,351
28,489,574
300,000
-
255,747
2,338,653
2,082,906
-
115,886
372,646
256,760
14,295,365
28,862,220
21,042,444
45,429,328
-
466,868
(466,184)
9,845,067
(56,627,389)
20,411,493
44,312,371
(18,329)
1,728,487
(598,637)
26,815,529
(39,019,856)
11,807,883
1,962,816
26,558,688
(256,841)
289,045
289,045
-
-
2,473
1,116,273
2,198,437
1,079,691
2,487,482
-
1,444,986
2,303,532
858,546
2,303,532
14,295,365
28,862,220
The accompanying notes on pages 55-88 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 27 June 2022 and signed on its behalf by:
On behalf of the Board
Christian Schaffalitzky
_____________________________
Noel O’Keeffe
________________________
35
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
All figures are stated in Sterling
Revenue
Administrative expenses
Listing and capital raising fees
Impairment of subsidiary investments
Operating loss
Fair value adjustment
Other income
Loss before tax
Finance costs
for the period
Loss
Taxation
31 December
2021
Note
Audited
£
31 December
2020
Audited
£
-
(315,666)
(39,583)
(29,379,842)
(31,370,972)
(1,635,881)
135,709
(31,235,263)
-
(31,235,263)
-
3
4
-
(353,279)
(646,669)
-
515,870
1,515,818
174,000
689,870
-
689,870
-
All activities derive from continuing operations.
The Company has no recognised gains or losses other than those dealt with in the Statement of Profit or Loss and
Other Comprehensive Income.
The accompanying notes on pages 55-88 form an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 27 June 2022 and
signed on its behalf by:
On behalf of the Board
Christian Schaffalitzky
________________________
Noel.O’Keeffe
________________________
36
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
COMPANY STATEMENT OF FINANCIAL POSITION
All figures are stated in Sterling
Non-Current Assets
Total Non- current assets
Investments
Current Assets
Other receivables
Total Current assets
Cash
Total Assets
Equity and Liabilities
Equity
Called up share capital
Share premium account
Share based payment reserve
Total Equity
Retained deficit
Liabilities
Current Liabilities
Trade and other payables
Total liabilities
Borrowings
Total Equity and Liabilities
31 December
2021
Audited
£
31 December
2020
Audited
£
16,762,761
16,762,761
46,664,160
46,664,160
73,734
313,408
239,674
39,085
180,873
141,788
17,076,169
46,845,033
21,042,444
45,429,328
466,868
16,843,103
(50,095,537)
20,411,493
44,312,371
977,575
46,281,765
(19,419,674)
23
14
15
16
16
18
21
22
114,062
233,066
119,004
17,076,169
218,877
563,268
344,391
46,845,033
The accompanying notes on pages 55-88 form integral part of these financial statements.
The financial statements were approved by the Board of Directors on 27 June 2022 and signed on its behalf by:
On behalf of the Board
Christian Schaffalitzky
______________________________
Noel O’Keeffe
________________________
37
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
All figures are stated in Sterling
Balance as at 1 January 2020
Loss for the year
Other comprehensive income – exchange differences
Shares issued
Disposal of subsidiary
Shares issued to pay deferred vendor liability
Warrants issued by Katoro Gold plc
Share options issued by Katoro Gold plc
Change in shareholding without loss of control
Balance as at 31 December 2020
Loss for the year
Other comprehensive income - exchange differences
Shares issued
Disposal of non-controlling interest without losing control
Acquisition of non-controlling interest
Vesting of share options – Katoro Gold plc
Warrants issued by Kibo Energy plc
Warrants issued by Kibo Energy plc which expired during the year
Change in shareholding resulting in a loss of control
Balance as at 31 December 2021
Note
Share
Capital
Share
premium
Warrants and
Share based
payment
reserve
Control
reserve
Foreign
currency
translation
reserve
Retained
deficit
Non-controlling
interest
Total equity
£
£
£
£
£
£
£
£
19,532,350
42,750,436
1,504,513
(18,329)
(872,942)
(34,625,954)
27,073
28,297,147
-
-
-
-
871,984
1,149,095
-
7,159
-
-
879,143
-
20,411,493
-
412,840
-
-
1,561,935
-
44,312,371
-
-
-
-
-
-
-
(421,471)
419,667
225,778
223,974
-
1,728,487
-
-
-
-
-
-
(18,329)
-
-
630,951
-
-
-
-
-
630,951
-
21,042,444
-
-
1,116,957
-
-
-
-
-
1,116,957
-
45,429,328
-
-
-
-
-
146,249
48,695
(559,400)
(1,261,619)
(897,163)
466,868
-
-
-
-
-
-
-
-
18,329
18,329
-
-
(4,726,286)
(1,690,951)
(6,417,237)
152,635
-
121,670
-
-
-
274,305
-
(598,637)
-
(212,764)
-
-
-
-
-
-
132,453
345,217
(466,184)
-
-
-
-
152,635
2,021,079
-
-
-
-
(4,393,902)
332,384
(39,019,856)
(21,996,968)
-
-
3,259,232
(308,030)
-
-
559,400
(17,607,533)
878,833
(56,627,389)
-
-
-
-
(283,914)
1,407,037
(256,841)
121,670
(1,472)
419,667
225,778
(1,738,459)
1,739,421
26,558,688
(1,151,187)
(23,148,155)
(155)
(212,919)
-
1,747,908
3,201,014
6,460,246
308,030
-
-
146,249
-
48,695
-
-
2,219,657 (14,750,805)
207,171
(138,045)
11,807,883
1,962,816
16
16
18
17
19
20
The notes on pages 55-88 form part of the financial statements.
The financial statements were approved by the Board of Directors on 27 June 2022 and signed on its behalf by:
On behalf of the Board
Christian Schaffalitzky
________________________________
Noel O’Keeffe
________________________
38
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
Share capital
Share premium Share based
Retained deficit Total equity
£
£
payment
reserve
£
£
£
19,532,350
42,750,436
977,575
(20,109,544)
43,150,817
-
871,984
879,413
7,159
20,411,493
-
1,149,095
1,561,935
412,840
44,312,371
-
-
-
-
977,575
689,870
-
689,870
-
(19,419,674)
689,870
2,021,079
3,130,948
419,999
46,281,765
-
630,951
-
630,951
-
21,042,444
-
1,116,957
-
1,116,957
-
45,429,328
-
-
48,693
(510,707)
(559,400)
466,868
(31,235,263)
(31,235,263)
1,747,908
-
48,693
-
(30,675,863) (29,438,662)
-
559,400
16,843,103
(50,095,537)
16
16
18
COMPANY STATEMENT OF CHANGES IN EQUITY
All figures are stated in Sterling
Balance as at 1 January 2020
Profit the year
Shares issued
Shares issued to pay deferred vendor liability
Balance as at 31 December 2020
Profit for the year
Shares issued
Warrants issued by Kibo Energy plc
Warrants issued by Kibo Energy plc which expired during the year
Balance as at 31 December 2021
Note
The accompanying notes on pages 55-88 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 27 June 2022 and signed on its behalf by:
On behalf of the Board
Christian Schaffalitzky
_____________________________
Noel O’Keeffe
________________________
39
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
CONSOLIDATED STATEMENT OF CASH FLOWS
All figures are stated in Sterling
Cash flows from operating activities
Loss for the period before taxation
Adjustments for:
(Profit)/Loss from the disposal of subsidiary
Interest accrued
Debt forgiven
Warrants and options issued
Impairment of goodwill
Impairment of intangible assets
Impairment of associates
Loss from equity accounted associate
Exploration and development expenditure on a Joint Operation
Impairment of financial asset receivable
Depreciation on property, plant and equipment
Profit on sale of property, plant and equipment
Cost settled through the issue of shares
Movement in working capital
Change in debtors
Change in creditors
Net cash outflows from operating activities
Cash flows from financing activities
Proceeds of issue of share capital
Proceeds from disposal of shares to non-controlling interest
Repayment of lease liabilities
Repayment of borrowings
Net cash proceeds from financing activities
Proceeds from borrowings
Cash flows from investing activities
Cash advanced to Joint Venture
Property, plant and equipment acquired
Intangible assets acquired
Cash forfeited on disposal of subsidiary
Net cash flows investing activities
Cash received on sale of plant and equipment
Net increase/(decrease) in cash
Cash at beginning of period
Cash at end of the period
Exchange movement
31 December
2021
Audited
£
31 December
2020
Audited
£
Notes
(23,148,155)
(6,417,237)
(529,415)
21,632
(355,659)
194,945
300,000
13,955,528
6,449,681
48,357
91,179
43,722
10,635
-
(2,917,550)
-
102,414
-
-
697,006
-
-
-
333
1,122,676
640,821
5,685
(53,574)
(3,465,800)
436,076
(145,525)
(386,483)
(240,958)
(3,304,033)
108,872
1,091,116
982,244
(2,374,684)
3
13
10
11
9
14
21
1,527,576
6,099,500
(2,275)
(195,282)
7,468,494
38,975
2,277,000
-
-
-
3,647,000
1,370,000
(91,179)
(1,654,239)
(150,273)
(272,075)
(2,167,766)
-
(1,122,676)
-
-
76,716
(987,332)
58,628
1,996,695
284,984
256,760
2,082,906
(170,549)
91,634
256,760
(119,858)
15
The accompanying notes on pages 55-88 form an integral part of these financial statements.
40
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
COMPANY STATEMENT OF CASH FLOWS
All figures are stated in Sterling
Cash flows from operating activities
Notes
31 December
2021
Audited
£
31 December
2020
Audited
£
(Loss)/Profit for the period before taxation
Adjusted for:
Inter-company sales capitalised
Fair value adjustment
Share based payments
Non-cash recoveries of expenses
Impairment of investment in subsidiaries
Expenses settled in shares
Movement in working capital
(Increase) / Decrease in debtors
(Decrease)/ Increase in creditors
Net cash outflows from operating activities
Cash flows from financing activities
Proceeds of issue of share capital
Proceeds from borrowings
Net cash proceeds from financing activities
Repayment of borrowings
Cash flows from investing activities
Net cash used in investing activities
Cash advances to Group Companies
Net (decrease)/increase in cash
Cash at end of the period
Cash at beginning of period
(31,235,263)
689,870
(61,000)
1,635,881
48,693
(114,253)
29,379,842
(346,100)
-
(174,000)
(1,515,818)
200,562
(71,139)
-
(672,525)
198,000
(40,314)
(145,129)
(104,815)
(491,229)
322,382
275,531
(46,851)
(396,994)
1,497,176
-
1,447,169
(50,007)
940,000
590,000
1,530,000
-
14
21
16
22
25
(858,054)
(858,054)
(1,022,607)
(1,022,607)
97,886
110,399
15
141,788
239,674
31,389
141,788
The accompanying notes on pages 55-88 form an integral part of these financial statements.
41
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General Information
Kibo Energy plc (“the Company”) is a Company incorporated in Ireland. The Group financial statements consolidate
those of the Company and its subsidiaries (together referred to as the “Group”).
The principal activities of the Company and its subsidiaries are related to the exploration for and development of
multi-asset energy projects in Sub Saharan Africa, and the United Kingdom.
Statement of Compliance
As permitted by the European Union, the Group financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and their interpretations issued by the International Accounting
Standards Board (IASB) as adopted by the EU (IFRS).
The IFRS adopted by the EU as applied by the Company and the Group in the preparation of these financial statements
are those that were effective on 31 December 2021.
The financial statements have been prepared in accordance with the requirements of the Companies Act 2014.
Statement of Accounting Policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated
financial statements in the current financial period.
Basis of Preparation
The Group and Company financial statements are prepared on the historical cost basis, except for the investment in
Katoro Gold plc which is measured at fair value by the Company. The accounting policies have been applied
consistently by Group entities, except for the adoption of new standards and interpretations which became effective
in the current year. The Group and Company financial statements have been prepared on a going concern basis as
explained in the notes to the financial statements.
The individual financial information of each Group entity is measured and presented in the currency of the primary
economic environment in which the entity operates (its functional currency). The consolidated financial information
of the Group is presented in Pounds Sterling, which is the presentation currency for the Group. The functional
currency of each of the Group entities is the local currency of each individual entity.
Going Concern
The financial statements have been prepared on the going concern basis which contemplates the continuity of normal
business activities and the realisation of assets and the settlement of liabilities in the normal course of business. In
performing the going concern assessment, the Board considered various factors, including the availability of cash and
cash equivalents; data relating to working capital requirements for the foreseeable future; cash-flows from
operational commencement, available information about the future, the possible outcomes of planned events, changes
in future conditions, the current global economic situation due to the Covid-19 pandemic and Ukraine conflict and the
responses to such events and conditions that would be available to the Board.
The Board has, inter alia, considered the following specific factors in determining whether the Group is a going
concern:
•
•
The significant financial loss for the year amounting to £23,148,155 (2020: £6,417,237);
Cash and cash equivalents readily available to the Group in the amount of £2,082,906 in order to pay its
creditors and maturing liabilities in the amount of £2,198,437 as and when they fall due and meet its
operating costs for the ensuing twelve months; and
Whether the Group has available cash resources, or equivalent short term funding opportunities in the
foreseeable future, to deploy in developing and growing existing operations or invest in new opportunities.
•
42
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Following from the losses incurred in the current financial period, coupled with the net current liability position the
Group finds itself in as at December 2021, these conditions, together with those mentioned above are considered to
indicate that a material uncertainty exists which may cast significant doubt on the Group’s ability to continue as a
going concern.
This is largely attributable to the short-term liquidity position the Group finds itself in as a result of the significant
capital required to develop projects that exceeds cash contributed to the group by the capital contributors. The
Directors have evaluated the Groups liquidity requirements to confirm whether the Group has adequate cash
resources to continue as a going concern for the foreseeable future, taking into account the net current liability
position, and consequently prepared a cash flow forecast covering a period of 12 months from the date of these
financial statements, concluding that the Group would be able to continue its operations as a going concern.
In response to the net current liability position, to address future cash flow requirements, detailed liquidity
improvement initiatives have been identified and are being pursued, with their implementation regularly monitored
in order to ensure the Group is able to alleviate the liquidity constraints in the foreseeable future. Therefore, the ability
of the Group to continue as a going concern is dependent on the successful implementation or conclusion of the below
noted matters in order to address the liquidity risk the Group faces on an ongoing basis:
•
•
Successful conclusion of funding requirements of the Group in order to continue development of the
underlying projects of the Group; and
Successful realisation of the fossil fuel assets in the foreseeable future in order to contribute positively toward
the cash reserves of the Group.
As the Board is confident it would be able to successfully implement the above matters, it has adopted the going
concern basis of accounting in preparing the consolidated financial statements.
Use of Estimates and Judgements
The preparation of financial statements in conformity with EU IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily apparent from other sources.
In particular, there are significant areas of estimation, uncertainty and critical judgements in applying accounting
policies that have the most significant effect on the amounts recognised in the financial statements.
The following key areas of estimation uncertainty exist:
•
•
•
•
•
•
significant estimation uncertainty inherent in determination of the recoverable amount as part of the
impairment assessment of non-financial assets, which include amongst others intangible assets related to
mining rights and exploration licences as well as tangible assets in the form of property, plant or equipment;
estimation uncertainty inherent in determination of the period of the useful life of Tangible and Intangible
assets;
estimation uncertainty inherent in determination of the incremental borrowing rate of leases;
estimation uncertainty inherent in the fair value determination of investment in unlisted associates;
estimation uncertainty in the valuation of share based instruments in issue; and
estimation uncertainty inherent in the determination of credit loss allowance for other financial assets.
The following key areas of judgement exist:
•
•
•
•
•
Recognition and measurement of exploration and evaluation expenditure;
Fair value determination of unlisted investments measured at fair value through profit or loss;
Consolidation of Joint Venture interest;
Consolidation of Associate interest; and
Going concern.
43
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant estimation uncertainty inherent in determination of the recoverable amount as part of the
impairment assessment of non-financial assets, which include amongst others intangible assets related to
mining rights and exploration licences, associate investments as well as tangible assets in the form of property,
plant or equipment
In applying IAS 36, impairment assessments are performed whenever events or changes in circumstances indicate
that the carrying amount of an asset or CGU may not be recoverable, over and above the annual impairment
assessment required for goodwill and intangible assets which have an indefinite useful live. Estimates are made in
determining the recoverable amount of assets which includes the estimation of cash flows and discount rates used. In
estimating the cash flows, management bases cash flow projections on reasonable and supportable assumptions that
represent management’s best estimate of the range of economic conditions that will exist over the remaining useful
life of the assets. The discount rates used reflect the current market assessment of the time value of money and the
risks specific to the assets for which the future cash flow estimates have not been adjusted. Where the value in use
basis to determine the recoverable amount is not considered appropriate the recoverable amount is based on fair
market value, which is determined by identifying recent completed sales transactions or valuations for similar
commodity projects, in similar condition and with similar stage of development to utilise as base from which to
quantify the proposed fair value at which an independent third party may be willing to acquire the assets.
Estimation uncertainty inherent in determination of the period of the useful life of Tangible and Intangible
assets
Depreciation “(Amortisation for intangible assets”) is charged on a systematic basis over the estimated useful lives of
the assets after taking into account the estimated residual values of the assets. In determining the depreciable amount,
management makes assumptions in respect of the residual value of assets based on the expected estimated amount
that the entity would currently obtain from disposing the asset, after deducting the estimated costs of disposal. If an
asset is expected to be abandoned, the residual value is estimated at nil. Useful live is either the period of time over
which the asset is expected to be used or the number of production or similar units expected to be obtained from the
use of the asset, taking into account the expected physical wear and tear, legal or similar limits of assets such as rights,
condition and location of the asset as well as obsolescence.
Estimation uncertainty inherent in determination of the incremental borrowing rate of leases
The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing
rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over
a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use
asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which
requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and
conditions of the lease. The Group estimates the IBR using observable inputs (such as market interest rates) when
available and is required to make certain entity-specific estimates.
Estimation uncertainty inherent in the fair value determination of investment in unlisted associates
Following the disposal of the controlling interest held in Mabesekwa Coal during the prior financial period, the
remaining interest in the Mabesekwa Coal indicated the existence of significant influence, thus the remaining equity
investment is recognised as an investment in associate where its cost at initial recognition is equal to the fair value
determined on loss of control. The principal asset held by Mabesekwa Coal comprises a pending mining licence for a
prospective coal asset and coal resources where previous work had identified an indicative resource. The asset is
considered to be unique, and a fair market price is not easily obtainable. The overall value of the investment in
associate, however, was separately reviewed by the independent directors, as announced to the market on various
occasions, which is the basis utilised for the valuation of the associate on loss of control.
Estimation uncertainty in the valuation of share-based instruments in issue
Share-based instruments issued, such as warrants or options, or payments made require significant judgment and
estimate concerning the method of valuation applied and key inputs applied respectively. In order to calculate the
charge for share based warrants issued or payments as required by IFRS 9 and IFRS 2 respectively, the Group makes
estimates principally relating to the assumptions used in its option-pricing model. Refer to Note 18 for details on
valuation of share-based transactions, including options and warrants granted.
Estimation uncertainty inherent in the determination of credit loss allowance for other financial assets
Lake Victoria Gold
The credit loss allowance for the Lake Victoria Gold Receivable as disclosed in Note 12 was determined to be equal to
a lifetime expected credit loss allowance following from the continued default of the counterparty.
44
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The continued default from the counterparty resulted in the credit risk increasing significantly during the period to
lifetime expected credit losses for the financial asset receivable. With effect from 30 September 2021, the Group lost
control over its net investment in Katoro Gold plc, following which the financial asset receivable was de-recognised.
Blyvoor Joint Venture
The Blyvoor joint operation agreement has been structured in such a way that all amounts contributed to the joint
operations by Katoro is receivable from the Blyvoor joint operation once the project reaches commercial viability and
starts generating positive cashflow to pay firstly the third party creditors and thereafter Katoro capital contributed
to the joint operations. The credit loss allowance for the Blyvoor Joint Venture Receivable as disclosed in Note 12 was
determined to be equal to a lifetime expected credit loss allowance following from the uncertainty related to the
commercial viability of the underlying project as at reporting period date The uncertainty around the successful
achievement of commercial viability of the project as at this point in time results in the increased credit risk to lifetime
expected credit losses for the financial asset receivable. With effect from 30 September 2021, the Group lost control
over its net investment in Katoro Gold plc, following which the financial asset receivable was de-recognised.
Significant judgement concerning the choice of accounting policy w.r.t exploration and evaluation expenditure
In line with the Group’s accounting policy, all the exploration and evaluation expenditure has been charged to profit
or loss, as in the judgement of the Directors the commercial viability of the mineral deposits had not been established.
If a policy of capitalisation of exploration expenditure had been adopted an amount of £738,750 would have been
capitalised in the current year (2020: £2,052,202).
Significant judgement relating to the consolidation of Joint Venture interest
In the 2018 year Kibo entered into a Joint Venture Agreement (“JV”) acquiring a 65% equity interest in the Benga
Power Plant Project (“BPPP”). Although the agreement refers to the existence of a 65% equity stake, and Kibo’s ability
to appoint three of five management committee members, all decisions presented in front of the management
committee requires absolute agreement by all committee members before it stands, failing which it would result in a
decision to be made between the two respective CEO’s of the participating entities in the JV. Furthermore, the
participating interest only allows to partake in the net revenue of the JV.
Significant judgement relating to the consolidation of Associate interest
In the current year Kibo’s effective equity interest in Katoro Gold Plc (“Katoro”) decreased from 25.37% to 20.88% as
at 31 December 2021. Following the decrease in the direct equity interest held by Kibo in Katoro, coupled with the
resignation of Lukas Marthinus Maree on 30 September 2021 from the Board of Directors of Kibo Energy plc, the
Group reassessed whether or not it continues to exercise sufficient power over Katoro to control the Company. Kibo,
through its representatives (Directors & Senior Management) on the Board of Directors of Katoro, only represents
two of five senior management positions of Katoro Gold plc with effect from 30 September 2021 at which point it
became unable for Kibo to continue to exercise de-facto control over the operational activities of Katoro, as it lost the
ability to use its power to affect its returns from Katoro. On that basis the directors consider it appropriate to
recognise the loss of control over Katoro Gold plc Group with effect from 30 September 2021, at which point the
results of Katoro Gold plc was de-consolidated, and the remaining equity interest in Katoro Gold plc recognised at fair
value as an associate, subsequently measured in accordance with the equity method as prescribed by IAS 28.
Significant judgement relating to the adoption of the Going Concern basis of preparation
The Groups current liabilities exceed its current assets as at 31 December 2021 which contributes significantly to the
material uncertainty related to the going concern assumption applied in preparation of the financial statements.
Management applies judgement in determining whether or not the Group is able to continue as a going concern for
the foreseeable future, in identifying the matters which give rise to the existence of the material uncertainty, and in
developing responses thereto in order to address the risk of material uncertainty.
Significant judgement relating to the classification of certain non-current assets as held for sale
Throughout the year the Group has made numerous announcements related to the proposed sale of its Mbeya Coal
to Power and Mabasekwa Coal to Power projects. Notwithstanding the fact that the coal assets are immediately
available for sale with the Group identifying various prospective buyers and the Board of Directors is committed to
realisation of the assets through sale rather than through use, it is unlikely that the sale would be completed within
12 months post year end due to the lengthy process related to the sale of such assets, which is why the Group has
concluded not to classify these assets as non-current assets held for sale as at 31 December 2021.
45
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation
The consolidated annual financial statements comprise the financial statements of Kibo Energy plc and its subsidiaries
for the year ended 31 December 2021, over which the Company has control.
Control is achieved when the Company:
•
•
•
has the power over the investee;
is exposed, or has rights, to variable return from its involvement with the investee; and
has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstance indicate that there are
changes to one or more of the three elements of control listed above.
De-facto control exists in situations where the Company has the practical ability to direct the relevant activities of the
investee without holding the majority of the voting rights.
•
In determining whether de-facto control exists the Company considers all relevant facts and circumstances, including:
The size of the Company’s voting rights relative to both the size and dispersion of other parties who hold
voting rights;
Substantive potential voting rights held by the company and by other parties;
Other contractual arrangements; and
Historic patterns in voting attendance.
•
•
•
In assessing control, potential voting rights that are currently exercisable or convertible are taken into account.
Subsidiaries are fully consolidated from the date that control commences until the date that control ceases.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the Group.
Intragroup balances and any unrealised gains or losses or income or expenses arising from intragroup transactions
are eliminated in preparing the Group financial statements, except to the extent they provide evidence of impairment.
The Group accounts for business combinations using the acquisition method of accounting. The cost of the business
combination is measured as the aggregate of the fair values of assets given, liabilities incurred or assumed, and equity
instruments issued. Costs directly attributable to the business combination are expensed as incurred, except the costs
to issue debt which are amortised as part of the effective interest and costs to issue equity which are included in
equity.
The acquiree's identifiable assets, liabilities and contingent liabilities which meet the recognition conditions of IFRS
3 Business Combinations are recognised at their fair values at acquisition date.
Contingent liabilities are only included in the identifiable assets and liabilities of the acquiree where there is a present
obligation at acquisition date.
Non-controlling interest arising from a business combination is measured either at their share of the fair value of the
assets and liabilities of the acquiree or at fair value. The treatment is not an accounting policy choice but is selected
for each individual business combination and disclosed in the note for business combinations.
Changes in the Group’s interest in subsidiaries that do not result in a loss of control are accounted for as equity
transactions.
Upon the loss of control, the Company derecognises the assets and liabilities of the subsidiary, any non-controlling
interests and the other components of equity related to the subsidiary. Any resulting gain or loss is recognised in
profit or loss. If the Company retains any interest in the previous subsidiary, such interest is measured at fair value at
the date that control is lost.
Any gain from the acquisition of a subsidiary or gain/loss from the disposal of subsidiary will be recognised through
profit and loss in the current financial period.
46
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business combinations involving entities under common control
Business combinations involving entities under common control comprise business combinations where both entities
remain under the ultimate control of the holding company before and after the combination, and that control is not
transitory. The group applies merger accounting for all its common control transactions from the date that it obtains
control. In terms of this:
•
•
•
•
•
•
the assets and liabilities of the acquiree are recorded at their existing carrying amounts (not fair value);
if necessary, adjustments are made to achieve uniform accounting policies;
intangible assets and contingent liabilities are recognised only to the extent that they were recognised by the
acquiree in accordance with applicable IFRS;
no goodwill is recognised. Any difference between the acquirer’s cost of investment and the acquiree’s equity
is presented separately directly in equity as a common control reserve (CCR) on consolidation;
any non-controlling interest is measured as a proportionate share of the carrying amounts of the related
assets and liabilities (as adjusted to achieve uniform accounting policies); and
any expenses of the combination are written off immediately in profit or loss, except for the costs to issue
debt which are amortised as part of the effective interest and costs to issue equity which are recognised
within equity.
When control is lost, resulting in the common control of entities, the balance of CCR recognised in respect of that
acquisition is realised directly to retained earnings on the effective date when control is lost.
Intangible Assets
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation
and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful
lives which are disclosed in Note 10. The estimated useful life and amortisation method are reviewed at the end of
each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
Intangible assets with an indefinite useful life
An intangible asset is regarded as having an indefinite useful life when, based on all relevant factors, there is no
foreseeable limit to the period over which the asset is expected to generate net cash inflows. Amortisation is not
provided for these intangible assets but they are tested for impairment annually or more frequently if events or
changes in circumstances indicate that the carrying value may be impaired, and it is subsequently carried at cost less
accumulated impairment losses.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the
net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is
derecognised.
Categories of intangible assets
Intangible assets comprise the following:
•
•
acquisition of rights to explore or mine in relation to the Group’s exploration and evaluation activities; and
intellectual property acquired in relation to the Group’s renewable energy activities.
Irrespective of whether there is any indication of impairment, the Group also tests intangible assets not yet available
for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment
test is performed during the annual period and at the same time every period.
Investments in associates
Associates are all entities over which the group has significant influence but not control, generally accompanying a
shareholding between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity
method of accounting.
47
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Under the equity method, the investment is initially recognised at cost where the equity interest in the associate is
acquired, however where control is lost over a subsidiary the remaining equity interest is recognised at fair value on
date which control is lost and the fair value is deemed to be the cost of the investment in associate going forward and
the carrying amount is increased or decreased to recognise the investor’s share of the profit or loss of the investee
after the date of acquisition.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of
the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.
The group’s share of post-acquisition profit or loss is recognised in the statement of profit or loss, and its share of
post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a
corresponding adjustment to the carrying amount of the investment. When the group’s share of losses in an associate
equal or exceeds its interest in the associate, including any other unsecured receivables, the group does not recognise
further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
The group determines at each reporting date whether there is any objective evidence that the investment in the
associate is impaired. If this is the case, the group calculates the amount of the impairment as the difference between
the recoverable amount of the associate and its carrying value and recognises the amount adjacent to share of
profit/(loss) of associates in the statement of comprehensive income.
Exploration & Evaluation Assets
Exploration and evaluation activity involves the search for mineral resources, the determination of technical
feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation activity
includes:
•
•
•
•
•
•
researching and analysing historical exploration data;
gathering exploration data through topographical, geochemical and geophysical studies;
exploratory drilling, trenching and sampling;
determining and examining the volume and grade of the resource;
surveying transportation and infrastructure requirements; and
conducting market and finance studies.
Exploration and evaluation expenditure is charged to the Statement of Profit or Loss as incurred except in the
following circumstances, in which case the expenditure may be capitalised:
In respect of minerals activities:
•
•
the exploration and evaluation activity is within an area of interest which was previously acquired as an asset
acquisition or in a business combination and measured at fair value on acquisition; or
the existence of a commercially viable mineral deposit has been established.
Capitalised exploration and evaluation expenditure considered to be tangible is recorded as a component of property,
plant and equipment at cost less impairment charges. Otherwise, it is recorded as an intangible.
Intangible assets all relate to exploration and evaluation expenditure which are carried at cost with an indefinite
useful life and therefore are reviewed for impairment annually and when there are indicators of impairment. Where
a potential impairment is indicated, assessment is performed for each area of interest in conjunction with the group
of operating assets (representing a cash generating unit) to which the exploration is attributed. Exploration areas at
which reserves have been discovered but require major capital expenditure before production can begin, are
continually evaluated to ensure that commercial quantities of reserves exist or to ensure that additional exploration
work is under way or planned.
48
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment
Non-financial assets
Assets are reviewed for impairment at each reporting date or whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash generating units).
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is
recognised in the Statement of Profit or Loss immediately.
Property, Plant and Equipment
Property, Plant and Equipment is stated at cost, less accumulated depreciation.
Cost includes expenditure that is directly attributable to the acquisition of the items of property, plant and equipment.
The cost of self-constructed items of property, plant and equipment includes the cost of materials and direct labour,
any other costs directly attributable to bringing the items of property, plant and equipment to a working condition
for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are
located.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
Depreciation is provided at rates calculated to write off the cost less residual value of each asset over its expected
useful life, as follows:
•
•
•
•
•
•
Office equipment between 12.5% to 37.5% straight line;
Plant & machinery at 20% straight line;
Furniture & fixtures at 12.5% straight line;
Motor vehicles at 25% straight line;
Right of Use assets straight line over the lease term; and
I.T. Equipment at 20% straight line
Depreciation methods, useful lives and residual values are reviewed at each reporting date. Useful lives are affected
by technology innovations, maintenance programmes and future economic benefits. Residual value assessments
consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
On disposal of property, plant and equipment the cost and the related accumulated depreciation and impairments are
removed from the financial statements and the net amount, less any proceeds, is taken to the Statement of Profit or
Loss and Other Comprehensive Income.
Right-of-use assets and corresponding lease liability
For any new contracts entered into the Group considers whether a contract is, or contains a lease. A lease is defined
as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in
exchange for consideration’. To apply this definition the Group assesses whether the contract meets three key
evaluations which are whether:
•
•
•
the contract contains an identified asset, which is either explicitly identified in the contract or implicitly
specified by being identified at the time the asset is made available to the Group.
the Group has the right to obtain substantially all of the economic benefits from use of the identified asset
throughout the period of use, considering its rights within the defined scope of the contract
the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess
whether it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use
49
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
At lease commencement date, the group recognises a right-of-use asset and a lease liability on the statement of
financial position. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease
liability, any initial direct costs incurred by the group, and any lease payments made in advance of the lease
commencement date. The group depreciates the right-of-use assets on a straight-line basis from the lease
commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.
The group also assesses the right-of-use asset for impairment when such indicators exist. At the commencement date,
the group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using
the interest rate implicit in the lease if that rate is readily available or the group’s incremental borrowing rate. In
determining the present value of the lease liability, the group has used its incremental borrowing rate of prime as the
rate implicit in the lease was not readily available. Lease payments included in the measurement of the lease liability
are made up of fixed payments (including in substance fixed), variable payments based on an index or rate, amounts
expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be
exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is
remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When
the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss
if the right-of-use asset is already reduced to zero.
The group has elected to account for short-term leases and leases of low-value assets using the practical expedients.
Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an
expense in profit or loss on a straight-line basis over the lease term.
On the statement of financial position, right-of-use assets have been included in property, plant and equipment and
lease liabilities have been included in trade payables.
Income Tax
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the Income Statement
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial
recognition of assets or liabilities in a transaction that is not a business combination and that affects neither
accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably
will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to
the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by
the reporting date.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against
which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will be realised.
Employee benefits
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonuses or profit-sharing plans if
the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by
the employee and the obligation can be estimated reliably.
50
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Foreign Currencies
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (“the functional currency”). The consolidated annual
financial statements are presented in Sterling, which is the Group’s presentation currency. This is also the functional
currency of the Company and is considered by the Board also to be appropriate for the purposes of preparing the
Group financial statements.
Transactions and balances
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 period end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the Statement of Profit or Loss.
Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
•
•
•
monetary assets and liabilities for each Statement of Financial Position presented are presented at the closing
rate at the date of that Statement of Financial Position. Non-monetary items are measured at the exchange
rate in effect at the historical transaction date and are not translated at each Statement of Financial Position
date;
income and expenses for each Statement of Profit or Loss are translated at average exchange rates (unless
this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the dates of the transaction): and
all resulting exchange differences are recognised as a separate component of equity. On consolidation,
exchange differences arising from the translation of monetary items receivable from foreign subsidiaries for
which settlement is neither planned nor likely to occur in the foreseeable future are taken to shareholders
equity. When a foreign operation is sold, such exchange differences are recognised in the Statement of Profit
or Loss as part of the gain or loss on sale.
Finance income and expense
Finance income comprises interest income on funds invested, dividend income, gains on the disposal of available-for-
sale financial assets, and changes in the fair value of financial assets at fair value through profit or loss. Interest income
is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit
or loss on the date that the Group’s right to receive payment is established, which in the case of listed securities is the
ex-dividend date.
Finance expenses comprise interest expense on borrowings, unwinding of discount on provisions, changes in the fair
value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets and losses
on forward exchange contracts that are recognised in profit or loss. All borrowing costs are recognised in profit or
loss using the effective interest method.
Foreign currency gains and losses are reported on a net basis.
Earnings per Share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of
ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable
to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all
dilutive potential ordinary shares.
51
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Instruments
Recognition
Financial instruments comprise other financial assets receivable, trade and other receivables, cash and cash
equivalents, trade and other payables, other financial liabilities and borrowings.
Financial assets and liabilities are recognised in the Group’s statement of financial position when the Group becomes
a party to the contractual provisions of the instruments.
Classification
The Group classifies financial assets on initial recognition as measured at amortised cost as the Group’s business
model and objective is to hold the financial asset in order to collect the contractual cash flow and the contractual terms
allows for cash flows on specified dates for the payment of the principal amounts outstanding.
Financial liabilities are classified at amortised cost.
Financial assets
Classification
Other financial assets
Trade and other receivables
Cash and Cash Equivalents
Investment in listed entities
Financial liabilities
Financial assets at amortised cost
Financial assets at amortised cost
Financial assets at amortised cost
Financial assets at fair value through profit or loss
Classification
Trade and other payables
Borrowings
Financial liabilities at amortised cost
Financial liabilities at amortised cost
Financial assets are classified as current if expected to be realised or settled within 12 months from the reporting
date; if not, they are classified as non-current. Financial liabilities are classified as non-current if the Group has an
unconditional right to defer payment for more than 12 months from the reporting date.
Measurement on Initial recognition
All financial assets and liabilities are initially measured at fair value, including transaction costs.
Subsequent measurement
Financial assets held at amortised cost are subsequently measured at amortised cost using the effective interest
method, less any impairment losses.
Foreign exchange gains and losses and impairments are recognised in profit or loss. Any gain or loss on de-recognition
is recognised in profit or loss.
Financial assets held at fair value through profit or loss are subsequently measured at fair value with fair value
movement recognised through profit or loss.
Financial liabilities are subsequently measured at amortised cost using the effective interest method.
De-recognition
Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been
transferred and the group has transferred substantially all risks and rewards of ownership.
Financial liabilities are derecognised when the obligations specified in the contracts are discharged, cancelled or
expire.
On de-recognition of a financial asset/liability, any difference between the carrying amount extinguished and the
consideration paid is recognised in profit or loss.
52
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Impairment of Financial Assets not carried at Fair value
Under IFRS 9 the Group calculates its allowance for credit losses as expected credit losses (ECLs) for financial assets
measured at amortised cost. ECLs are a probability weighted estimate of credit losses.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between
its carrying amount, and the present value of the estimated future cash flows discounted at the original effective
interest rate.
Significant financial assets are tested for impairment on an individual basis. The remaining financial assets are
assessed collectively in Groups that share similar credit risk characteristics.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment
loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in the profit or loss.
Warrant reserves
For such grants of share options or warrants qualifying as equity-settled share-based payments, the fair value as at
the date of grant is calculated using the Black-Scholes option pricing model, taking into account the terms and
conditions upon which the options or warrants were granted. The amount recognised as an expense is adjusted to
reflect the actual number of share options or warrants that are likely to vest, except where forfeiture is only due to
market-based conditions not achieving the threshold for vesting.
Share based payments
For such grants of share options qualifying as equity-settled share-based payments, the fair value as at the date of
grant is calculated using the Black-Scholes option pricing model, taking into account the terms and conditions upon
which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of
share options that are likely to vest, except where forfeiture is only due to market-based conditions not achieving the
threshold for vesting.
Share Capital
Incremental costs directly attributable to the issue of ordinary shares are recognised directly in equity.
Issue Expenses and Share Premium Account
Issue expenses directly attributable to the issuance of new ordinary shares are written off against the premium arising
on the issue of share capital where ordinary shares are issued at a premium. Where the ordinary shares are issued at
their nominal value, the issue expenses directly attributable to the issuance of new ordinary shares is set off against
the accumulated loss reserve.
Segment reporting
The Group determines and presents operating segments based on the information that is internally provided to the
Chief Executive Officer, who is the chief operating decision maker. A segment is a distinguishable component of the
Group that is engaged either in providing related products or services (business segment), or in providing products
or services within a particular economic environment (geographical segment), which is subject to risks and returns
that are different from those of the other segments. The Group’s primary format for segment reporting is based on
business segments. The business segments are determined based on the reporting business units.
Joint arrangements
Joint arrangements are arrangements in which the Group shares joint control with one or more parties. Joint control
is the contractually agreed sharing of control of an arrangement and exists only when decisions about the activities
that significantly affect the arrangement’s returns require the unanimous consent of the parties sharing control.
Judgement is required in determining this classification through an evaluation of the facts and circumstances arising
from each individual arrangement. Joint arrangements are classified as either joint operations or joint ventures based
on the rights and obligations of the parties to the arrangement.
53
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In joint operations, the parties have rights to the assets and obligations for the liabilities relating to the arrangement,
whereas in joint ventures, the parties have rights to the net assets of the arrangement. Joint arrangements that are
not structured through a separate vehicle are always joint operations. Joint arrangements that are structured through
a separate vehicle may be either joint operations or joint ventures depending on the substance of the arrangement. In
these cases, consideration is given to the legal form of the separate vehicle, the terms of the contractual arrangement
and, when relevant, other facts and circumstances. The Group accounts for joint operations by recognising the assets,
liabilities, revenue, and expenses for which it has rights or obligations, including its share of such items held or
incurred jointly.
54
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
NEW STANDARDS AND INTERPRETATIONS
Standards issued but not yet effective:
At the date of authorisation of these financial statements, the following standards and interpretations relevant to the
Group and which have not been applied in these financial statements, were in issue but were not yet effective. In some
cases these standards and guidance have not been endorsed for use in the European Union.
Standard
Effective date,
annual period
beginning on or
after
IAS 1 Presentation of Financial Statements
Classification of Liabilities as Current or Noncurrent: Narrow-scope amendments to IAS 1 to
clarify how to classify debt and other liabilities as current or non-current.
1 January 2023
Disclosure of Accounting Policies: The amendments require companies to disclose their
material accounting policy information rather than their significant accounting policies, with
additional guidance added to the Standard to explain how an entity can identify material
accounting policy information with examples of when accounting policy information is likely
to be material.
IAS 12 amendments on deferred tax
1 January 2023
The IASB issued 'Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12)' that clarify how companies account for deferred tax on
transactions such as leases and decommissioning obligations.
IFRS 3 amendments updating a reference to the Conceptual Framework
The IASB issued 'Reference to the Conceptual Framework (Amendments to IFRS 3)' with
amendments to IFRS 3 'Business Combinations' that update an outdated reference in IFRS 3
without significantly changing its requirements.
Disclosure of accounting policies
The amendments that are intended to help preparers in deciding which accounting policies to
disclose in their financial statements.
IAS 16 amendments regarding proceeds before intended use
Proceeds before Intended Use (Amendments to IAS 16)' regarding proceeds from selling items
produced while bringing an asset into the location and condition necessary for it to be capable
of operating in the manner intended by management.
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
1 January 2023
1 January 2022
1 January 2023
1 January 2022
Definition of Accounting Estimates: The amendments clarify how companies should
distinguish changes in accounting policies from changes in accounting estimates, by replacing
the definition of a change in accounting estimates with a new definition of accounting
estimates. Under the new definition, accounting estimates are “monetary amounts in financial
statements that are subject to measurement uncertainty”. The requirements for recognising
the effect of change in accounting prospectively remain unchanged.
1 January 2023
55
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
IAS 37 Onerous Contracts — Cost of Fulfilling a Contract
1 January 2022
1 January 2022
The amendments specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate
directly to the contract’. Costs that relate directly to a contract can either be incremental costs
of fulfilling that contract (examples would be direct labour, materials) or an allocation of other
costs that relate directly to fulfilling contracts (an example would be the allocation of the
depreciation charge for an item of property, plant and equipment used in fulfilling the
contract).
Annual Improvements to IFRS Standards 2018–2021
IFRS 9 – The amendment clarifies which fees an entity includes when it applies the ‘10 per cent’
test in paragraph B3.3.6 of IFRS 9 in assessing whether to derecognise a financial liability. An
entity includes only fees paid or received between the entity (the borrower) and the lender,
including fees paid or received by either the entity or the lender on the other’s behalf
IFRS 16 – The amendment to Illustrative Example 13 accompanying IFRS 16 removes from the
example the illustration of the reimbursement of leasehold improvements by the lessor in
order to resolve any potential confusion regarding the treatment of lease incentives that might
arise because of how lease incentives are illustrated in that example.
IFRS 1 – The amendment permits a subsidiary that applies paragraph D16(a) of IFRS 1 to
measure cumulative translation differences using the amounts reported by its parent, based on
the parent’s date of transition to IFRSs.
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no
material impact on the financial statements of the Group.
The Group expects to adopt all relevant standards and interpretations as and when they become effective.
Standards and interpretations which are effective in the current period (Changes in accounting policies):
None of these standards which became effective during the period which are applicable to the Group, have had a
material impact.
56
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
1. Segment analysis
IFRS 8 requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet
specific criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the Chief Operating decision maker.
The Chief Executive Officer is the Chief Operating decision maker of the Group.
2021 Group
Management currently identifies individual projects as operating segments. These operating segments are monitored and strategic decisions are made based upon their individual nature,
together with other non-financial data collated from exploration activities. Principal activities for these operating segments are as follows:
31 December
2021 (£)
Group
Blyvoor
Joint
Venture
Mbeya Coal to
Power
Bordersley
Power
Rochdale
Power
Pyebridge
Power
Haneti
Sustineri
Energy
Corporate
Benga
Power J.V
Mabesekwa
Coal to
Power
Lake
Victoria
Gold
Revenue
Cost of sales
Administrative and
other cost
Listing and Capital
raising fees
Impairments
Project and
exploration
expenditure
Investment and
Loss after tax
other income
2020 Group
-
-
(26,682)
-
-
(13,944)
-
-
(43,967)
-
-
(332,550)
-
-
(4,641)
3,245
(34,321)
(13,448)
-
-
(82,504)
-
-
(141,098)
-
(16,799)
-
-
(1,097)
-
-
(1,743,750)
3,245
(34,321)
(2,420,480)
-
-
-
-
-
-
-
-
(74,337)
(6,132,711)
-
(13,955,528)
(100,165)
(300,000)
(24,878)
-
(11,265)
-
(44,004)
-
(119,101)
-
-
-
-
-
(321,365)
(321,365)
-
(126,173)
-
(94,207)
(316,969)
(93,833)
(20,705,208)
(687,963)
787
(100,232)
-
(6,146,655)
48,298
(14,051,362)
355,659
(301,769)
-
(15,906)
-
(88,528)
-
(201,605)
16,505
(124,593)
5,134
(137,838)
-
(95,304)
591,554
(1,884,363)
1,017,937
(23,148,155)
Benga
Power J.V
Mabesekwa
Independent
Power
Mbeya
Coal to
Power
Bordersley
Power
Haneti
Lake
Victoria
Gold
Blyvoor Joint
Venture
31 December
2020 (£)
Group
Corporate
Administrative and other cost
Listing and Capital raising fees
Project and exploration expenditure
Loss after tax
Investment and other income
(17,677)
-
(260,170)
(277,847)
-
(10,182)
(39,424)
(219,821)
(13,745)
(909,306)
(16,053)
(2,190,113)
(3,416,321)
-
(8,557)
(18,739)
-
-
(112,762)
(98,586)
53,600
(161,743)
(276,000)
(657,564)
-
-
(133,906)
(147,651)
-
-
(59,041)
(965,719)
2,628
-
(1,201,768)
(1,210,878)
6,943
(865,915)
-
(3,040,253)
15,775
(1,027,658)
(2,052,204)
(6,417,237)
78,946
57
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
2021 Group
Assets
Segment assets
Liabilities
Segment liabilities
2020 Group
Assets
Segment assets
Liabilities
Benga
Power J.V
Mabesekwa
Coal to
Power
Mbeya Coal
to Power
Bordersley
Power
Rochdale
Power
Pyebridge
Power
Sustineri
Energy
Katoro
Gold plc
Corporate
31 December
2021 (£)
Group
14,219
3,405,354
1,944,925
3,085,261
261,454
2,491,666
278,985
528,764
2,284,737
14,295,365
10,065
5,577
52,379
394,588
5,570
70,847
18,976
-
1,929,480
2,487,482
Benga
Power J.V
Mabesekwa
Coal to
Power
Mbeya Coal
to Power
Bordersle
y Power
Haneti
Lake
Victoria
Gold
Blyvoor
Joint
Venture
Corporate
31 December
2020 (£)
Group
27,022
9,696,351
15,902,052
2,895,204
16,410
2,543
17,340
305,298
28,862,220
Segment liabilities
93,245
10,297
152,155
470,507
66,731
21,603
5,738
1,483,256
2,303,532
58
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Geographical segments
The Group operates in six principal geographical areas being Tanzania (Exploration), Botswana (Exploration), Cyprus (Corporate), South Africa (Renewable Energy), United
Kingdom (Renewable Energy) and Ireland (Corporate).
Tanzania
Botswana
Cyprus
United
Kingdom
South
Africa
Ireland
31 December
2021 (£)
Carrying value of segmented assets
Profit/ Loss after tax
1,944,925
(14,211,842)
3,405,354
(6,143,283)
188,879
(1,008,539)
283,831
(218,316)
7,630,489
(1,827,534)
841,887
261,359
14,295,365
(23,148,155)
Tanzania
Botswana
Cyprus
United
Kingdom
South
Africa
Ireland
31 December
2020 (£)
Carrying value of segmented assets
21,910
9,696,351
76,398
19,744
2,895,204
16,152,613
28,862,220
Loss after tax
(180,570)
(332)
(3,741,808)
(1,196,471)
(657,564)
(640,492)
(6,417,237)
59
KIBO ENERGY PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
2. Revenue
Electricity sales
31 December
2021 (£)
Group
31 December
2020 (£)
Group
3,245
3,245
-
-
Revenue comprised ancillary electricity sales from operational testing of the renewable energy operations of MAST
Energy Developments plc in the United Kingdom.
3. Other Income
31 December
2021 (£)
Group
31 December
2020 (£)
Group
31 December
2021 (£)
Company
31 December
2020 (£)
Company
Debt forgiven
Profit on the loss of control over
subsidiary
Profit on sale of plant and equipment
Recoveries
Other income
355,659
-
-
-
529,415
-
-
1,017,937
132,863
-
53,574
-
78,945
25,371
-
-
61,000
135,709
74,709
-
-
174,000
174,000
-
MAST Energy Projects Ltd (MEP), a 100% owned and controlled subsidiary of MAST Energy Developments plc, a
subsidiary of the Group, had certain outstanding and accrued consulting fees owing to a service provider (St. Anderton
on Vaal) relating to the period 2019 to 2021.The settlement value of these fees (the “Consulting Fees”) has now been
agreed between MEP, MAST and St. Anderton on Vaal. The settlement comprised cash payments for a total amount of
£169,603, shares issued in the amount of £169,603 by MAST Energy Developments plc and the remainder of the debt
being forgiven.
On 30 September 2021, the Group lost the ability to exercise control over the operations of Katoro Gold plc and its
subsidiaries (hereinafter referred to as the “Katoro Group”) following from the resignation of certain Company
directors, which resulted in the recognition of a gain on loss of control in the amount of £529,415. Refer to Note 11
for further detail relating to the loss of control over the investee.
4. Loss on ordinary activities before taxation
Operating loss is stated after the following key transactions:
Depreciation of property, plant and equipment
Impairment of other financial assets – receivable from Lake Victoria Gold
Loss on disposal of subsidiaries
Group auditors’ remuneration for audit of financial statements
Subsidiaries auditors’ remuneration for audit of the financial statements
Impairment of goodwill
Impairment of intangible assets
Impairment of associates
31
December
2021 (£)
Group
31
December
2020 (£)
Group
10,635
16,240
-
45,000
155,094
300,000
13,955,528
6,449,682
5,685
640,821
102,414
45,000
158,122
-
-
-
60
KIBO ENERGY PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
5. Staff costs (including Directors)
Group
31 December
2021 (£)
Group
31 December
2020 (£)
Company
31 December
2021 (£)
Company
31 December
2020 (£)
Wages and salaries
Share based remuneration
898,145
1,044,395
146,250
1,028,318
1,254,096
225,778
27,415
27,415
-
38,595
38,595
-
The average monthly number of employees (including executive Directors) during the period was as follows:
Group
31 December
2021 (£)
Group
31 December
2020 (£)
Company
31 December
2021 (£)
Company
31 December
2020 (£)
Exploration activities
Administration
6. Directors’ emoluments
10
17
7
10
16
6
1
2
1
1
2
1
Group
31 December
2021 (£)
Group
31 December
2020 (£)
Company
31
December
2021 (£)
Company
31
December
2020 (£)
Basic salary and fees accrued
Share based payments
361,262
361,262
-
434,823
434,823
-
27,415
27,415
-
38,595
38,595
-
The emoluments of the Chairman were £20,578 (2020: £27,837). The emoluments of the highest paid director were
£129,347 (2020: £170,190).
Directors received shares in the value of £Nil during the year (2020: £Nil) and warrants to the value of £Nil (2020:
£Nil) during the year.
Key management personnel consist only of the Directors. Details of share options and interests in the Company’s
shares of each director are shown in the Directors’ report.
The following table summarises the remuneration applicable to each of the individuals who held office as a director
during the reporting period:
31 December 2021
Salary and
fees
accrued
£
Salary and
fees settled
in shares
£
Warrants
issued
£
Christian Schaffalitzky
Louis Coetzee
Noel O’Keeffe
Lukas Maree
Wenzel Kerremans
Andreas Lianos
Total
Christiaan Schutte
20,578
129,347
38,319
7,349
7,349
36,050
361,262
122,270
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
61
Total
£
20,578
129,347
38,319
7,349
7,349
36,050
361,262
122,270
KIBO ENERGY PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
31 December 2020
Christian Schaffalitzky
Louis Coetzee
Noel O’Keeffe
Lukas Maree
Wenzel Kerremans
Andreas Lianos
Total
Christiaan Schutte
Salary and
fees
accrued
£
Salary and
fees settled
in shares
£
Warrants
issued
£
27,837
170,190
66,085
78,892
16,702
62,168
434,823
12,949
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
£
27,837
170,190
66,085
78,892
16,702
62,168
434,823
12,949
As at 31 December 2021, an amount of £443,336 (2020: £474,267) was due and payable to Directors for services
rendered not yet settled.
7. Taxation
Current tax
31 December
2021 (£)
31 December
2020 (£)
Charge for the period in respect of corporate taxation
Total tax charge
-
-
-
-
The difference between the total current tax shown above and the amount calculated by applying the standard rate
of corporation tax for various jurisdictions to the loss before tax is as follows:
2020 (£)
(6,417,237)
2021 (£)
(23,148,155)
Loss on ordinary activities before tax
Income tax expense calculated at blended rate of 18.86% (2020: 14.9%)
(4,365,742)
(956,168)
Income which is not taxable
Expenses which are not deductible
Losses available for carry forward
Income tax expense recognised in the Statement of Profit or Loss
(100,589)
3,959,520
506,811
-
(1,515,818)
2,919,587
(447,601)
-
The effective tax rate used for the December 2021 and December 2020 reconciliations above is the corporate rate of
18.86% and 14.9% payable by corporate entities on taxable profits under tax law in that jurisdiction respectively.
No provision has been made for the 2021 deferred taxation as no taxable income has been received to date, and the
probability of future taxable income is indicative of current market conditions which remain uncertain. At the
Statement of Financial Position date, the Directors estimate that the Group has unused tax losses of £38,201,734
(2020: £35,320,553) available for potential offset against future profits which equates to an estimated potential
deferred tax asset of £5,076,208 (2020: £4,569,667). No deferred tax asset has been recognised due to the
unpredictability of the future profit streams. Losses may be carried forward indefinitely in accordance with the
applicable taxation regulations ruling within each of the above jurisdictions.
62
KIBO ENERGY PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
8. Loss per share
Basic loss per share
Basic Loss per share
The basic loss and weighted average number of ordinary shares used for calculation purposes comprise the following:
31 December
2020 (£)
31 December
2021(£)
Loss for the period attributable to equity holders of the
parent
Weighted average number of ordinary shares for the
purposes of basic loss per share
(21,996,968)
(4,726,286)
2,480,279,189
1,546,853,959
Basic loss per ordinary share (GBP)
(0.009)
(0.003)
As there are no instruments in issue which have a dilutive impact, the dilutive loss per share is equal to the basic loss
per share, and thus not disclosed separately.
63
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Disposals
Additions
Closing Cost as at 31 December 2021
Exchange movements
-
602,500
602,500
-
9. Property, plant and equipment
GROUP
Cost
Opening Cost as at 1 January 2020
Disposals
Additions
Closing Cost as at 31 December 2020
Exchange movements
Accumulated Depreciation (“Acc Depr”)
Acc Depr as at 1 January 2020
Disposals
Depreciation
Acc Depr as at 31 December 2020
Exchange movements
Disposals
Depreciation
Acc Depr as at 31 December 2021
Exchange movements
Land
(£)
Furniture
and Fittings
(£)
Motor Vehicles
(£)
Office
Equipment
(£)
I.T
Equipment
(£)
Plant &
Machinery
(£)
Right of use
assets
(£)
2,535
25,084
5,071
4,997
11,262
67,941
Total
(£)
116,890
-
-
2,436
(99)
-
-
2,465
29
(7,972)
-
16,131
(981)
-
-
16,323
192
-
-
4,970
(101)
-
-
4,942
(28)
-
-
4,989
(8)
-
509
5,390
(108)
-
-
8,601
(2,661)
(67,941)
-
-
-
(75,913)
-
37,127
(3,850)
-
2,011,409
2,020,112
102
-
-
293,793
2,908,211
293,793 2,945,525
187
-
Right of use
assets
(£)
Total
(£)
52,485
Land
(£)
Furniture
and Fittings
(£)
Motor Vehicles
(£)
Office
Equipment
(£)
I.T
Equipment
(£)
Plant &
Machinery
(£)
2,535
18,202
4,392
3,355
11,262
12,739
-
-
2,436
(99)
-
-
2,465
29
(6,606)
5,117
15,285
(1,428)
-
842
16,323
196
-
141
4,398
(135)
-
-
4,407
9
-
427
4,289
507
-
-
4,074
(215)
-
-
8,601
(2,661)
-
-
8,704
103
(12,739)
-
-
-
(19,345)
5,685
35,009
(3,816)
-
9,793
9,793
-
-
10,635
45,766
122
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Carrying Value
Carrying value as at 31 December 2020
Carrying value as at 31 December 2021
Land
(£)
Furniture
and Fittings
(£)
-
602,500
-
-
Motor Vehicles
(£)
Office
Equipment
(£)
I.T
Equipment
(£)
Plant &
Machinery
(£)
Right of use
assets
(£)
Total
(£)
846
-
572
535
700
1,316
-
2,011,408
-
2,118
284,000 2,899,759
64
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Pyebridge Power Ltd - 2021
The Group acquired a 100% equity interest in Pyebridge Power Limited ("Pyebridge") for £2,500,000 in cash which
is settled as follows:
•
•
An initial £1,485,500 to be paid in cash at completion date on the 10th of August 2021;
Repayment of the loan outstanding of £14,500 by Sloane Developments Limited to Pyebridge;
Deferred consideration of £1,000,000 to be paid in two tranches 8 months and 12 months respectively from the date
of completion.
The acquisition of PyeBridge comprise of the following:
•
•
An installed and commissioned synchronous gas-powered standby generation plant and machinery; and
The land on which the gas-powered facility stands.
The acquisition of land and gas-powered generation facility has been accounted for as assets purchased at
consolidated level, and not as a business combination in accordance with IFRS 3. Therefore, the purchase price has
been allocated between land and the plant and machinery based on their respective fair values as at the date of
acquisition.
Right of use asset
The Group has one lease contract for land it shall utilise to construction a 5MW gas-fuelled power generation plant.
The land is located at Bordersley, Liverpool St. Birmingham.
The lease of the land has a lease term of 20 years, with an option to extend for 10 years which the Group has opted to
include due to the highly likely nature of extension as at the time of the original assessment.
The Group’s obligations under its leases are secured by the lessor’s title to the leased assets. The Group’s incremental
Right of use asset
borrowing rate is 8.44%.
31 December
2021(£)
Group
31 December
2020(£)
Group
Set out below are the carrying amounts of right-of-use assets
recognised and the movements during the period:
Opening balance
Additions
Closing balance
Depreciation
Lease liability
Set out below are the carrying amounts of lease liabilities and the
movements during the period:
Opening balance
Additions
Interest
Closing balance
Repayment
Spilt of lease liability between current and non-current portions:
Non-current
Total
Current
-
293,793
284,000
(9,793)
-
293,793
24,725
291,518
(27,000)
289,045
291,518
2,473
65
-
-
-
-
-
-
-
-
-
-
-
-
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Future minimum lease payments fall due as follows
- within 1 year
- later than 1 year but within 5 years
Subtotal
- later than 5 years
Closing balance
- Unearned future finance charges
-
27,000
108,000
783,000
648,000
291,518
(491,482)
A 1% change in the Incremental Borrowing Rate (“IBR”), would result in a £25,185 change in the Right of Use Asset,
and corresponding Lease Liability on transaction date.
10. Intangible assets
Intangible assets consist of separately identifiable prospecting, exploration and renewable energy assets in the form
of licences, intellectual property or rights acquired either through business combinations or through separate asset
acquisitions.
The following reconciliation serves to summarise the composition of intangible assets as at period end:
Rochdale
Power
(£)
Sustineri
Energy
(£)
Mbeya Coal
to Power
Project (£)
Bordersley
Power (£)
Total (£)
Carrying value at 1 January 2020
Carrying value at 1 January 2021
Impairments
-
-
-
-
-
-
15,896,105
2,595,000
18,491,105
15,896,105
-
2,595,000
-
18,491,105
-
Impairments
Acquisition of Rochdale Power
Carrying value at 31 December 2021
Acquisition of Sustineri Energy
-
150,273
150,273
-
-
-
278,700
278,700
(13,955,528)
-
1,940,577
-
-
-
2,595,000
-
(13,955,528)
150,273
4,964,550
278,700
Intangible assets attributable to prospecting or exploration activities with an indefinite useful life are not amortised
until such time that active mining operations commence, which will result in the intangible asset being amortised over
the useful life of the relevant project.
Intangible assets attributable to renewable energy activities are amortised once commercial production commenced,
over the remaining useful life of the project, which is estimated to be between 20 to 30 years, depending on the unique
characteristics of each project.
Until such time as the underlying operations commence production commences, intangible assets with an indefinite
useful life are assessed for impairment on an annual basis, against the recoverable value of the intangible asset, or
earlier if an indication of impairment exists.
One or more of the following facts or circumstances indicate that an entity should test an intangible asset for
impairment:
•
the period for which the entity has the right to develop the asset has expired during the period or will expire in
the foreseeable future;
substantial expenditure on the asset in future is neither planned nor budgeted;
sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying
amount of the development asset is unlikely to be recovered in full from successful development or by sale.
•
•
In assessing whether a write-down is required in the carrying value of a potentially impaired intangible asset, the
asset’s carrying value is compared with its recoverable amount.
The recoverable amount is the higher of the asset’s fair value less costs to sell and value in use.
66
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
The valuation techniques applicable to the valuation of the abovementioned intangible assets comprise a combination
of fair market values, discounted cash flow projections and historic transaction prices.
The following key assumptions influence the measurement of the intangible assets’ recoverable amounts, through
utilising the value in use calculation performed:
•
•
•
•
•
•
•
•
•
measurement of the available resources and reserves;
currency fluctuations and exchange movements applicable to the valuation model;
commodity prices related to resources and reserve and forward looking statements;
expected growth rates in respect of production capacity;
cost of capital related to funding requirements;
determination of the commercial viability period;
applicable discounts rates, inflation and taxation implications;
future operating expenditure related to the realisation of the respective project assets; and
co-operation of key project partners going forward.
The following key assumptions influence the measurement of the intangible assets’ recoverable amounts, through
utilising the fair value calculation performed:
•
Determination of consideration receivable based on recently completed transactions, considering the nature,
location, size and desirability of recently completed transactions, for similar assets.
A summary of each project and the impairment assessment performed for each of the intangible assets are detailed
below.
Mbeya Coal to Power Project
The Mbeya Coal to Power Project situated in the Mbeya region of Tanzania, which comprises the Mbeya Coal Mine, a
potential 1.5Mt p/a mining operation, and the Mbeya Power Plant, a planned 300MW mine-mouth thermal power
station. The Mbeya Coal Mine has a defined 120.8 Mt NI 43-101 thermal coal resource. The 300MW mouth-of-mine
thermal power station has long term scalability with the potential to become a 1000MW plant. The completed full
Power Feasibility Study highlighted an annual power output target of 1.8GW based on annual average coal
consumption of 1.5Mt.
Subsequent to the completion of a compulsory tender process through TANESCO on the development of the Mbeya
Coal to Power Project, the Group was informed that its bid to secure a Power-Purchase Agreement was unsuccessful
in February 2019. Further engagement with TANESCO has subsequently culminated in the receipt of a formal notice
from TANESCO during 2020 inviting the Group it to develop the Mbeya Coal to Power Project for the export market
and thereby enabling the Company to engage with the African Power Pools regarding potential off-take agreements.
Result of impairment review undertaken during the period
The Group continued to pursue the possible development of the Mbeya Coal to Power Project for the export market
during 2021, however the increase in global scepticism around the development of fossil fuel projects coupled with
expansion toward renewable energy resulted in the phasing out of coal assets across global markets in lieu of
renewable energy assets.
These factors culminated in the Group performing an impairment assessment as the carrying amount of the Mbeya
Coal to Power Project asset is unlikely to be recovered in full of successful development or by sale.
Following various consultations with third parties, the Group concluded that the fair value of its Mbeya Coal to Power
Project asset was estimated to be approximately £1,940,577, which is significantly lower than the value in use
determined in preceding financial periods as a results of the declining demand for fossil fuel projects and the Group’s
move toward renewable energies, as executed toward the latter part of the 2021 financial period
It was therefore concluded that an impairment of £13,955,528 was necessary in the 2021 financial period related
specifically to the Mbeya Coal to Power Project.
67
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
The fair value consideration receivable was based on third party proposals received related to the combined potential
disposal of the Group’s Mbeya Coal to Power and Mabasekwa Coal to Power projects. The proposed consideration
receivable was allocated between the assets based on their respective carrying values, including capital contributions
to the various assets at an estimated discount of between 60% and 80%.
A change of 100bps in the estimated discount applied to the capital contributions of the Mbeya Coal to Power asset
would result in a £15,500 change in the fair value of the asset.
The Group is actively pursuing various options to realise value from the project, including the potential disposal of
the asset to extern parties.
Bordersley Power Ltd
The Group initially acquired an indirect 100% equity interest in shovel-ready reserve power generation project,
Bordersley, which will comprise a 5MW gas-fuelled power generation plant for the consideration of £175,000 settled
through the issue of shares.
Thereafter, the Group acquired all of St Anderton's direct and indirect interests (Royalty Agreements) in the
Bordersley power project described above giving it a 100% economic and 100% equity interest in Bordersley (the
'Acquisition'). Consideration for the Acquisition consists of the allotment and issue of 46,067,206 ordinary shares in
the capital of MAST Developments plc to St Anderton at an issue price of £0.0525 per share and payable in five
tranches ('Consideration Shares') such that the full consideration is only payable in the event that Bordersley is
progressively derisked.
As there were no separately identifiable assets and/or liabilities acquired, the purchase price was allocated toward
the Intellectual Property acquired, in the amount of £2,595,000.
Rochdale Power Ltd - 2021
The Group acquired a 100% interest in Rochdale Power Limited ("Rochdale"), from Balance Power Projects Limited,
for the installation of a 4.4 MW flexible gas power project in Dig Gate Lane, Rochdale, OL 16 4NR.The acquisition
purchase price totals £239,523 of which the freehold site amounts to £90,750 excluding VAT and the property rights
amount to £150,273. The acquisition purchase price is to be paid in cash. The freehold site purchased is the property
at Dig Gate Lane, Kingsway Business Park, Rochdale, OL16 4NR.
The acquisition of land and gas-powered generation facility will be accounted for as assets purchased at consolidated
level, and not as a business combination in accordance with IFRS 3. Therefore, the purchase price has been allocated
to the property, plant and equipment and intangible assets, as disclosed in Note 9 and Note 10 respectively.
Sustineri Energy - 2021
The Group, through its subsidiary Kibo Energy (Cyprus) Limited (KE), entered into an agreement with Industrial
Green Energy Solutions (Pty) Ltd (IGES) whereby KE would acquire 65% equity stake in Sustineri Energy (Pty) Ltd
(Sustineri), with IGES, the technology (IP) and process owner, acquiring a 35% stake. IGES would contribute IP in the
amount of approximately £278,000 through an equity loan to Sustineri Energy (Pty) Ltd as contribution to the
incorporation of the entity, and KE would thereafter contribute resources in the amount of £532,000 as part of its
contribution. Thereafter Sustineri would source debt and equity to develop its underlying projects.
IGES, on behalf of Sustineri Energy (Pty) Ltd, completed and filed the necessary environmental approvals and was
awarded a waste management license by the DEFF on 4 March 2021 for the waste fired combined heat and power
plant to be installed at the Limeroc Business Park in Centurion, South Africa.
68
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
A summary of the assessment performed for each of the renewable energy intangible assets are detailed below.
Key estimation variables
Sustineri Energy
Bordersley
Rochdale
Life of project
Weighted average cost of capital (“WACC”)
Output
Average £/MW output
Sensitivity analysis
Debt/Equity ratio
25 to 30 years
6.19%
4.4MW
£20 to £30 per MW
output
Rochdale
55/45
25 to 30 years
6.32%
5.0MW
£15 to £20 per MW
output
Bordersley
55/45
10 years
13.37%
2.7MW
£15 to £20 per MW
output
Sustineri Energy
75/25
100bps Increase/Decrease in WACC
250bps
output
Increase/Decrease
11. Investment in associates
in £/MW
£413,842
£135,489
£689,377
£168,921
£191,492
£1,506,038
Investment in associates consist of equity investments where the Group has an equity interest between 20% and 50%,
and does not exercise control over the investee.
The following reconciliation serves to summarise the composition of investments in associates as at period end:
Total (£)
Katoro Gold
plc (£)
Mabesekwa
Coal
Independent
Power
Project (£)
9,696,683
Carrying value at 1 January 2020
Carrying value at 1 January 2021
Share of losses for the year
-
-
-
9,696,683
9,696,351
(332)
9,696,351
(332)
Remaining equity interest following loss of control over investee
Share of losses for the year
Carrying value at 31 December 2021
Impairment loss
Mabesekwa Coal Independent Power Project
894,090
(48,357)
528,764
(316,969)
-
-
3,563,639
(6,132,712)
894,090
(48,357)
4,092,403
(6,449,681)
On 3 April 2018, the Group completed the acquisition of an 85% interest in the Mabesekwa Coal Independent Power
Project, located in Botswana. The intangible asset was recognised at the fair value of the consideration paid, which
emanates from the fair value of the equity instruments issued as at transaction date, being £9,376,312.
The Mabesekwa Coal Independent Power Project (“MCIPP”) is located approximately 40km east of the village of
Tonata and approximately 50km southeast of Francistown, Botswana’s second largest city. Certain aspects of the
Project have been advanced previously by Sechaba Natural Resources Limited (“Sechaba”), including water and land
use permits and environmental certification. Mabesekwa consists of a insitu 777Mt Coal Resource. A pre-feasibility
study on a coal mine and a scoping study on a coal fired thermal power plant has been completed. Kibo is in possession
of a Competent Persons Report on the project, which includes a SAMREC-compliant Maiden Resource Statement on
the excised 300 Mt portion of the Mabesekwa coal deposit.
In September 2019, Kibo and Shumba Energy Limited (“Shumba”) signed a binding Heads of Agreement to reorganise
the arrangements for the MCIPP and its associated coal asset in Botswana. Under the reorganisation the MCIPP
retained assets will be consolidated back into KEB and Kibo’s interest in KEB will be reduced to 35% to maintain
Kibo’s look-through interest in the MCIPP resource and make sundry adjustments to recognise Kibo’s project
expenditure. In exchange for the increase in the equity interest held by Shumba, Shumba would forego the previous
claim it had against a portion of the MCIPP coal resources, thereby increasing the value of the interest held by KEB.
The value of the remaining equity interest in Kibo Energy Botswana (Pty) Ltd on initial recognition, was determined
based on the fair value of the proportionate equity interest retained in the in the enlarged resource following the
restructuring during 2019.
69
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Result of impairment review undertaken during the period
The Group continued to pursue the possible development of its Mabaseka Coal to Power Project during 2021, however
the increase in global scepticism around the development of fossil fuel projects coupled with expansion toward
renewable energy resulted in the phasing out of coal assets across global markets in lieu of renewable energy assets.
These factors culminated in the Group performing an impairment assessment as the carrying amount of the Mabaseka
Coal to Power Project asset is unlikely to be recovered in full of successful development or by sale.
Following various consultations with third parties, the Group concluded that the fair value of its Mabaseka Coal to
Power Project asset was estimated to be approximately £3,563,639, which is significantly lower than the value in use
determined in preceding financial periods as a results of the declining demand for fossil fuel projects and the Group’s
move toward renewable energies, as executed toward the latter part of the 2021 financial period
It was therefore concluded that an impairment of £6,132,712 was necessary in the 2021 financial period related
specifically to the Mabaseka Coal to Power Project.
The fair value consideration receivable was based on third party proposals received related to the combined potential
disposal of the Group’s Mbeya Coal to Power and Mabasekwa Coal to Power projects. The proposed consideration
receivable was allocated between the assets based on their respective carrying values, including capital contributions
to the various assets at an estimated discount of between 60% and 80%.
A change of 100bps in the estimated discount applied to the capital contributions of the Mbeya Coal to Power asset
would result in a £18,500 change in the fair value of the asset.
The Group is actively pursuing various options to realise value from the project, including the potential disposal of
the asset to extern parties.
Summarised financial information of the associate is set out below:
Non-Current assets
Current assets
Loss for the year
Group (£)
2021
Group (£)
2020
7,824,447
866
-
8,396,296
869
(1,107)
Kibo Energy Botswana (Pty) Ltd recognised no revenue during the year (2020:Nil). No dividends were received
during the year (2020: Nil).
Kibo Energy Botswana (Pty) Ltd’s principal place of business is Plot 2780, Extension 9, Gaborone, Botswana.
Katoro Gold plc
On 30 September 2021, the Group lost the ability to exercise control over the operations of Katoro Gold plc and its
subsidiaries (hereinafter referred to as the “Katoro Group”) following from the resignation of certain Kibo directors.
Following the loss of control, in accordance with IFRS 10, the assets, liabilities, non-controlling interest and foreign
currency translation reserves attributable to the operations of the Katoro Group were derecognised, with the
remaining equity interest retained in the associate being recognised at fair value, resulting in a loss on deemed
disposal recognised through profit or loss, as detailed below.
Group (£)
30 September
2021
Cash and cash equivalents
Other financial liabilities
Net asset value disposed of
Trade and other payables
Non-controlling interest
70
272,075
(77,434)
157,503
(37,138)
(138,045)
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Attributable equity disposed of
Foreign currency translation reserves
Consideration received – cash or otherwise
Profit from loss of control over subsidiaries
Investment retained in associate measured at fair value
364,675
345,217
-
(529,415)
(894,090)
The value of the remaining equity interest in Katoro Gold plc on initial recognition as an associate, was determined
based on the fair value of the listed equities.
Summarised financial information of the associate is set out below:
Non-current assets
Current assets
Current liabilities
Loss for the year ended
Cash flow from operating activities
Cash flow from investing activities
Cash flows from financing activities
Group (£)
31 December
2021
209,500
876,658
(163,732)
(1,142,479)
(915,880)
(125,866)
(1,771,925)
Katoro Gold plc recognised no revenue during the year (2020:Nil). No dividends were received during the year (2020:
Nil).
Katoro Gold plc’s principal place of business is the 6
information about Katoro Gold plc can be obtained from their website at katorogold.com.
12. Other financial assets
Floor, 60 Gracechurch Street, London, EC4V OHR. Project specific
th
Group (£)
2021
2020
Other financial assets comprise of:
Lake Victoria Gold receivable
Blyvoor Joint Venture receivable
Impairment allowance for other financial assets receivable
657,061
1,880,556
1,223,495
640,821
1,801,158
1,160,337
Lake Victoria Gold receivable
Blyvoor Joint Venture receivable
Reconciliation of movement in other financial assets
(657,061)
(1,223,495)
-
Blyvoor Joint
Venture
(640,821)
(1,160,337)
-
Lake Victoria
Gold
Group (£)
Financial asset receivable
Carrying value as at 31 December 2020
Credit loss allowance recognised
Foreign exchange movement
Further advance on the Blyvoor Joint Venture
Carrying value as at 31 December 2021
Credit loss allowance recognised
71
1,160,337
-
(1,160,337)
640,821
-
(640,821)
-
63,158
(63,158)
-
16,240
-
(16,240)
-
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Reef Miners Limited - Imweru and Lubando gold project - 2020
On 30 June 2020, the last condition precedent related to the disposal of Reef Miners Limited (“Reef”), comprising the
Imweru gold project and the Lubando gold project in northern Tanzania, was met, resulting in the effective disposal
of the subsidiary to Lake Victoria Gold Limited (“LVG”). The assets and corresponding liabilities of Reef was
recognised as part of the assets classified held for sale in the comparative financial period.
The following disposal of the subsidiary was recognised in the 2020 financial statements:
Intangible assets
Cash and cash equivalents
Net assets value disposed of
Trade and other payables
Foreign currency translation reserve reclassified through profit or loss
Loss on disposal of subsidiary
Proceeds from disposal
Total loss
Impairment of other financial asset receivable
Group (£)
(787,108)
(336)
(778,308)
9,136
(121,670)
(102,414)
797,564
(743,235)
(640,821)
The amount receivable from Lake Victoria Gold will be due and payable on the following dates:
•
•
•
•
•
US$100,000 upon the satisfaction of the Condition Precedent;
US$100,000 upon registration of Reef in the name of LVG;
US$100,000 four months from the date of the SPA;
US$200,000 nine months from the date of the SPA; and
US$500,000 upon the earlier of the commissioning of the first producing mine of LVG in the Tanzania or the
date 24 months from the date of the SPA.
As at 31 December 2020, funds of $100,000 have been received from Lake Victoria Gold in respect of the sale of Reef
Miners Limited (“Reef”). The receivable in Lake Victoria Gold was fully impaired due to the significant increase in
credit risk during the 2020 financial period, which is as a result of subsequent payments not being received as they
become due and was still outstanding as at 30 September 2021, the date on which the Kibo Group lost control over
Katoro Gold plc as noted above in Note 11.
Blyvoor Joint Operations
On 30 January 2020, the Katoro Gold Group entered into a Joint Venture Agreement with Blyvoor Gold Mines (Pty)
Ltd, whereby Katoro Gold plc and Blyvoor Gold Mines (Pty) Ltd would become 50/50 participants in a unincorporated
Joint Venture.
In accordance with the requirements of the Joint Venture Agreement, the Katoro Group was to provide a ZAR15.0
million loan (approximately £790,000) to the JV (‘the Katoro Loan Facility’), which will fund ongoing development
work on the Project.
As at 30 September 2021, the date on which the Kibo Group effectively lost control over the Katoro Group, the Katoro
Group had advanced funding in the amount of £1,223,495 of which 100% relate to expenditure allocated to the Joint
Venture operations, carried by the Katoro Gold plc Group.
13. Goodwill
MAST Energy Projects Limited - 2020
In the previous financial period, the Group acquired a 60% equity interest in MAST Energy Project Limited, previously
known as MAST Energy Development Limited, for £300,000, settled through the issue of 5,714,286 ordinary shares
in Kibo Energy plc effective on 19 October 2018. The acquisition of MAST Energy Projects Limited falls within the
ambit of IFRS 3: Business Combinations.
72
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
The net assets acquired were valued at Nil, with the resultant purchase price being allocated to Goodwill on date of
acquisition. Goodwill is assessed for impairment on an annual basis, against the recoverable amount of underlying
Cash Generating Unit (“CGU”). The recoverable amount of the CGU is the higher of its fair value less cost to sell and its
value in use.
Because the underlying projects previously held by Mast Energy Projects Limited have now been restructured into
separate SPV’s, controlled directly by the intermediary holding company Sloane Developments Limited, there was
no prospective benefit from continued operations of Mast Energy Projects Limited therefore the goodwill was
14. Other receivables
impaired. The Company will cease operations in the foreseeable future.
Group
2021 (£)
Group
2020 (£)
Company
2021 (£)
Company
2020 (£)
Amounts falling due within one year:
Other debtors
255,747
255,747
115,886
115,886
73,734
73,734
39,085
39,085
The carrying value of current receivables approximates their fair value.
Trade and other receivables pledged as security
None of the above stated trade and other receivables were pledged as security at period end. Credit quality of trade
and other receivables that are neither past due nor impaired can be assessed by reference to historical repayment
trends of the individual debtors.
15. Cash
Cash consists of:
Short term convertible cash reserves
Group (£)
2021
Company (£)
2020
2021
2020
2,082,906 256,760
2,082,906
256,760
239,674 141,788
239,674
141,788
Cash has not been ceded or placed as encumbrance toward any liabilities as at year end.
16. Share capital - Group and Company
2021
2020
Authorised equity
5,000,000,000 Ordinary shares of €0.001 each
1,000,000,000 deferred shares of €0.014 each
3,000,000,000 deferred shares of €0.009 each
Allotted, issued and fully paid shares
€5,000,000
€14,000,000
€46,000,000
€27,000,000
€5,000,000
€14,000,000
€46,000,000
€27,000,000
(2021: 2,930,657,437 Ordinary shares of €0.001 each)
(2020: 2,221,640,835 Ordinary shares of €0.001 each)
1,291,394,535 Deferred shares of €0.009 each
805,053,798 Deferred shares of €0.014 each
£1,836,562
£9,257,075
£21,042,444
£9,948,807
£1,205,611
£9,257,075
£20,411,493
£9,948,807
73
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Number of
Shares
Ordinary
Share
Capital
(£)
Deferred
Share
Capital
(£)
Share
Premium
(£)
Treasury
shares
(£)
Balance at 31 December 2019
1,257,276,078
326,468 19,205,882
42,750,436
Shares issued during the period
Balance at 31 December 2020
2,221,640,835
-
1,205,611 19,205,882
1,561,935
44,312,371
964,364,757
879,143
Shares issued during the period
Balance at 31 December 2021
709,016,602
2,930,657,437
630,951
-
1,836,562 19,205,882
1,116,957
45,429,328
-
-
-
-
All ordinary shares issued have the right to vote, right to receive dividends, a copy of the annual report, and the right
to transfer ownership of their shares.
During the prior period, the Company resolved to increase the Ordinary Share capital from five billion Ordinary Shares
to eight billion Ordinary Shares to ensure sufficient authorised Ordinary Share capital available to issue more
Ordinary Shares when required.
17. Control reserve
The transaction with Opera Investments plc in 2017 represented a disposal without loss of control. Under IFRS this
constitutes a transaction with equity holders and as such is recognised through equity as opposed to recognising
goodwill. The control reserve represents the difference between the purchase consideration and the book value of the
net assets and liabilities acquired in the transaction with Opera Investments. The control reserve balance as at the
year end is Nil, following the loss of control over of Katoro Gold plc effective from 30 September 2021.
18. Share based payments reserve
The following reconciliation serves to summarise the composition of the share-based payment reserves as at period
end, which incorporates both warrants and share options in issue for the Group:
Group (£)
Opening balance of share-based payment reserve
Issue of share options and warrants
Deferred vendor liability settled through the issue of shares
Expired warrants during the period
Loss of control over subsidiary
Share Options and Warrants detail
Share Options
2021
1,728,487
2020
1,504,513
194,944
-
(559,400)
466,868
(897,163)
645,445
(421,471)
-
1,728,487
-
Katoro Gold plc had the following share options in issue at the beginning of the year and throughout the period up to
the date of loss of control:
•
a share option plan whereby the Board and Management of the Company were issued 14,944,783 Ordinary
shares, being 10% of the Company’s issued share capital on 8 February 2019, at 1.3 pence per share. The
options have an expiry date of the seventh anniversary date of the date of grant, with 50% vesting on issue
and the remaining 50% vesting in one year; and
74
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
•
a share option plan whereby the Board and Management of the Company were granted options (“Options”)
over a total of 17,300,000 new ordinary shares of £0.01each in the capital of the Company (“Ordinary Shares”)
The Options are exercisable at 2.6 pence per Ordinary Share, constituting a c. 10% premium to the Company’s
recent closing share price on 28 August 2020. The Options have an expiry date of the seventh anniversary
from the date of grant of 28 August 2020, with 50% vesting on issue and the remaining 50% vesting in one
year.
The fair value of the share options issued have been determined using the Black-Scholes option pricing model.
The inputs to the Black-Scholes model were as follows:
Description of key input
Date issued
Options granted
Stock price
Exercise price
Risk free rate
Volatility
Time to maturity
Key
Assumptions
Key
Assumptions
February 2019
14,944,783
1.3p
1.3p
0.4%
82%
7 years
August 2020
17,300,000
2.4p
2.6p
0.3%
142.84%
7 years
Expected volatility was determined using the historic average volatility in the company’s share price over the past 2
to 3 years. The weighted average fair value for the share options granted over the years is 2.26p.
The following reconciliation serves to summarise the value attributable to the share option reserve as at period end:
Group (£)
Opening balance of share-based payment reserve
Issue of share options
Loss of control over subsidiary
2021
256,315
2020
30,537
146,249
(402,564)
-
225,778
256,315
-
The following reconciliation serves to summarise the quantity of share options in issue as at period end:
Group
Opening balance
Share options issued
Loss of control of subsidiary
2021
2020
14,944,781
32,244,781
17,300,000
-
- 32,244,781
-
(32,244,781)
Kibo Energy plc and MAST Energy Developments plc had no share options in issue throughout the year.
Warrants
Katoro Gold plc had the following warrants in issue at the beginning of the year and throughout the year over its
Ordinary Shares up to date of loss of control:
•
•
1,208,333 warrants to Beaufort’s in respect of the placing fees. Each warrant shall entitle Beaufort to
subscribe for one new Ordinary Share and shall be exercisable at 6 pence per share for up to five years;
10,000,000 warrants to African Battery Metals plc in respect of the Nickel project facilitation fees. The
warrants were issued over 2 tranches. The first tranche of 2,500,000 warrants were issued upon signature of
the Option Agreement between the parties on 15 March 2019, with the remaining 7,500,000 issued on 15
May 2019. These warrants are exercisable within 3 years of issue date at a price of 1.25 pence per share;
75
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
•
•
•
•
17,200,000 warrants to various funders in respect of placing and subscription of 17,200,000 ordinary shares
of 1.0p each issued on 31 March 2020. Each warrant shall entitle the fundraisers to subscribe for a further
new Ordinary Share at a price of 2.0p, with a life to expiry of 2 years;
36,666,666 warrants to various funders in respect of placing and subscription of 73,333,333 ordinary shares
of 1.0p each issued on 25 June 2020. Each warrant shall entitle the fundraisers to subscribe for a further new
Ordinary Share at a price of 3.0p, with a life to expiry of 3 years. The Directors also participated in the
Fundraise, of which they acquired 3,333,333 ordinary shares and 1,666,666 warrants;
48,000,000 warrants to various funders in respect of placing and subscription of 48,000,000 ordinary shares
of 2.0p each issued on 15 January 2021. Each warrant shall entitle the fundraisers to subscribe for a further
new Ordinary Share at a price of 3.0p, with a life to expiry of 3 years;
81,500,000 warrants to various funders in respect of placing and subscription of 81,500,000 ordinary shares
of 1.0p each issued on 8 November 2021. Each warrant shall entitle the fundraisers to subscribe for a further
new Ordinary Share at a price of 1.5p, with a life to expiry of 2 years.
Description of key input
The fair value of the warrants issued have been determined using the Black-Scholes option pricing model. The inputs
to the Black-Scholes model were as follows for the warrants issued and outstanding by Katoro Gold plc.
Key
Assumptions
Financing
shares
Key
Assumptions
Financing
shares
Key
Assumptions
Financing
shares
Key
Assumptions
Financing
shares
Key
Assumptions
Beaufort
Key
Assumptions
African
Battery
Metals Plc
Date issued
Warrants granted initially
Stock price
Exercise price
Risk free rate
Volatility
Time to maturity
April ‘17
1,208,333
6p
6p
0.1%
70%
5 years
May ‘19
10,000,000
1.3p
1.25p
0.4%
82%
3 years
March ‘20
17,200,000
1.35p
2p
0.1%
86.44%
2 years
June ‘20
36,666,666
1.7p
3p
0.1%
148.29%
3 years
January ‘21 November ‘21
81,500,000
48,000,000
0.98p
2.15p
1.5p
3p
1.325%
0.1%
129.8%
149.64%
3 years
3 years
Kibo Energy plc had the following warrants in issue over its Ordinary Shares throughout the period up to year end:
•
•
•
•
221,111,140 warrants were issued with the share placing completed on 4 November 2019. Each share issued
for this placing includes one warrant exercisable at 0.6 pence per share for the period of 36 months from the
date of issue.
240,000,000 warrants were issued with the share placing completed on 17 September 2020. For every two
shares issued for this placing includes one warrant exercisable at 0.4 pence per share for the period of 36
months from the date of issue.
362,500,000 warrants were issued with the early termination of convertible loan note completed on 17
September 2020. The warrants are exercisable at 0.25 pence per share for the period of 36 months from the
date of issue.
430,000,000 warrants were issued with the early termination of convertible loan note completed on 3
November 2021. The warrants are exercisable at 0.4 pence per share for the period of 24 months from the
date of issue.
76
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Description
of key input
The fair value of the warrants issued have been determined using the Black-Scholes option pricing model. The inputs
to the Black-Scholes model were as follows for the warrants issued and outstanding by Kibo Energy plc.
Key
Assumptions
Kibo Energy CLN
Termination
Key
Assumptions
Kibo Energy CLN
Termination
Key
Assumptions
Kibo Energy CLN
Termination
Key
Assumptions
Kibo Energy
Plc October
2019 placing
Date issued
Warrants granted initially
Stock price
Exercise price
Risk free rate
Volatility
Time to maturity
October 2019
221,111,140
0.5p
0.6p
0.4%
99%
3 years
September 2020
240,000,000
0.4p
0.25p
September 2020 November 2021
430,000,000
0.4p
0.22p
362,500,000
0.25p
0.25p
0%
144.5%
3 years
0%
144.5%
3 years
0%
104.54%
2 years
Expected volatility was determined using the historic average volatility in the company’s share price over the past 2
to 3 years.
The following reconciliation serves to summarise the value attributable to the share option reserve as at period end
for the Group:
Group (£)
2021
1,472,172
2020
1,052,505
Opening balance of warrant reserve
Issue of warrants
Expired warrants
Loss of control of subsidiary
48,695
(559,400)
466,868
(494,599)
419,667
-
1,472,172
-
The following reconciliation serves to summarise the value attributable to the share option reserve as at period end
for the Company:
Company (£)
2021
977,575
2020
977,575
Opening balance of warrant reserve
Issue of warrants
Expired warrants
48,693
466,868
(559,400)
-
977,575
-
The following reconciliation serves to summarise the quantity of warrants in issue as at period end:
Group
Opening balance
New warrants issued
Warrants exercised
Warrants expired
Decrease in warrants following
loss of control over subsidiary
2021
1,341,308,419
430,000,000
(189,431,556)
(340,740,724)
(60,274,999)
1,180,861,140
2020
Company
2021
1,275,833,420
2020
663,333,420
682,774,999
(4,800,000)
-
-
1,341,308,419
663,333,420
612,500,000
430,000,000
-
(188,431,556)
-
(336,540,724)
-
-
1,180,861,140 1,275,833,420
At 31 December 2021 the Group had no share options and 1,180,861,140 warrants outstanding.
77
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Warrants
Date of Grant
Issue date
Expiry date Exercise
price
Number
granted
Exercisable as
at 31 December
2021
04 Nov 2019
17 Sept 2020
17 Sept 2020
3 November 2021
04 Nov 2019
17 Sept 2020
17 Sept 2020
3 November 2021
03 Nov 2022
17 Sept 2023
17 Sept 2023
2 November 2023
Total Contingently Issuable shares
Expenses settled through the issue of shares
0.6p
0.4p
0.25p
0.4p
221,111,140
240,000,000
362,500,000
1,253,611,140
430,000,000
1,253,611,140
221,111,140
216,000,000
313,750,000
1,180,861,140
430,000,000
1,180,861,140
The Group recognised the following expense related to equity settled share-based payment transactions:
2021 (£)
2020 (£)
Geological expenditure settled
Listing and capital raising fees
Shares and warrants issued to directors and staff
Deferred vendor liability
-
-
146,250
146,250
663,079
178,000
1,066,857
225,778
The amount due to vendors represents the balance of the purchase consideration owing in respect of the acquisition
of Bordersley Power Limited from St’ Anderton on Vaal Limited. The liability will be settled through the issue of
ordinary shares in the Company, in four equal tranches of 6,000,000 at an issue price of £0.0525 each, as the project
is progressively de-risked, as detailed below:
•
•
•
•
Upon receiving confirmation from Mast Energy Development that a preliminary notice to proceed with
construction of the Bordersley power site has been issued by the Owners Engineer for the construction and
commissioning of the Bordersley site;
Upon receiving confirmation from Mast Energy Development that a final notice to proceed with construction
of the Bordersley power site has been issued by the Owners Engineer for the construction and commissioning
of the Bordersley site;
Upon receiving confirmation from Mast Energy Development that the Owners Engineer for the construction
and commissioning of the Bordersley site has commenced with commissioning of the Bordersley power plant;
and
Upon receiving confirmation from Mast Energy Development that the Owners Engineer for the construction
and commissioning of the Bordersley site has confirmed steady state production at the Bordersley power
plant.
The fair value of the deferred vendor liability is calculated in accordance with the anticipated purchase consideration
payable, at the fair value of the shares on the date of the transaction.
The amount payable has been settled during the current year through the issue of ordinary shares.
78
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
19. Translation reserves
The foreign exchange reserve relates to the foreign exchange effect of the retranslation of the Group’s overseas
subsidiaries on consolidation into the Group’s financial statements, taking into account the financing provided to
subsidiary operations is seen as part of the Group’s net investment in subsidiaries.
Group
Opening balance
Movement during the period
Disposal of subsidiary
Closing balance
20. Non-controlling interest
2021
(£)
(598,637)
2020
(£)
(872,942)
(212,764)
(466,184)
345,217
152,635
(598,637)
121,670
The non-controlling interest brought forward relates to the minority equity attributable to Katoro Gold plc and its
subsidiaries. On 30 September 2021 the Group lost control over Katoro Gold plc. On 14 April 2021 the Group’s
subsidiary, MAST Energy Developments Ltd concluded an IPO on the standard board of the London Stock Exchange,
following which the Group’s equity interest diluted to 55% equity. Therefore, as at 31 December 2021, the Group’s
non-controlling interest comprises 45% equity held in MAST Energy Development plc.
Group
Opening balance
Change of interest in subsidiary without loss of control
Acquisition of non-controlling interest
Change in shareholding resulting in a loss of control
Comprehensive loss for the year allocated to non-controlling interest
Closing balance of non-controlling interest
2021 (£)
(256,841)
2020 (£)
27,073
3,201,014
308,030
(138,045)
1,962,816
(1,151,342)
1,407,037
-
-
(256,841)
(1,690,951)
The summarised financial information for significant subsidiaries in which the non-controlling interest has an
influence, namely Katoro Gold plc as at ended 31 December 2021, is presented below:
Katoro plc Group
2020 (£)
Statement of Financial position
Total assets
Total liabilities
Statement of Profit and Loss
Revenue for the period
Loss for the period
Statement of Cash Flow
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
79
353,682
(231,806)
-
(2,561,114)
25
(1,039,035)
)
(1,027,9
2,129,800
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
The summarised financial information for significant subsidiaries in which the non-controlling interest has an
influence, namely MAST Energy Developments plc as at ended 31 December 2021, is presented below:
MAST Energy
Development plc
2021 (£)
Statement of Financial position
Total assets
Total liabilities
Statement of Profit and Loss
Revenue for the period
Loss for the period
Statement of Cash Flow
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
21. Trade and other payables
Amounts falling due within one year:
7,630,488
(3,780,744)
3,245
(1,408,958)
(1
)
(759,694)
4,369,461
,804,510
Group
2021 (£)
Group
2020 (£)
Company
2021 (£)
Company
2020 (£)
Trade payables
1,116,273
1,116,273
1,444,986
1,444,986
114,062
114,062
218,877
218,877
The carrying value of current trade and other payables equals their fair value due mainly to the short-term nature of
these receivables.
22. Borrowings
Amounts falling due within one year:
Short term loans
Reconciliation of borrowings:
Group
2021 (£)
Group
2020 (£)
Company
2021 (£)
Company
2020 (£)
1,079,691
1,079,691
Group
2021 (£)
858,546
858,546
Group
2020 (£)
119,004
119,004
Company
2021 (£)
344,391
344,391
Company
2020 (£)
Opening balance
Raised during the year
Repaid during the year
Consulting and facilitation fees
Reclassification shareholder contribution to debt
Debt forgiven
Loss of control over subsidiary
Interest raised
Closing balance
Settled through the issue of shares
858,546
978,038
(175,705)
-
-
(355,659)
(77,434)
21,623
1,079,691
(169,718)
523,725
1,370,000
(25,000)
540,200
41,155
-
-
-
858,546
(1,591,534)
344,391
-
(55,669)
-
-
-
-
-
119,004
(169,718)
294,955
590,000
(25,000)
250,000
-
-
-
-
344,391
(765,564)
80
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Short term loans
Sanderson Capital Partners Limited
Short term loans relate to the unsecured interest free loan facility from Sanderson Capital Partners Limited in the
amount of £119,004 which is repayable either through the issue of ordinary shares or payment of cash by the
Company.
Refer to Note 26, which highlights the settlement of the above debt owing, post year end.
Deferred vendor liability
The amount due to vendors represents the balance of the purchase consideration owing in respect of the acquisition
•
of Pyebridge Power Limited. The liability will be settled in cash as follows:
•
£500,000 payable within 8 months after the signing of the SPA represents: and
£500,000 payable within 12 months after the signing of the SPA represents.
The fair value of the deferred vendor liability is based on the anticipated purchase consideration payable, at the fair
value thereof on the date of the transaction. The carrying value of current other financial liability equals their fair
value due mainly to the short-term nature of these payables.
23. Investment
Breakdown of investments as at 31 December 2021
Kibo Mining (Cyprus) Limited
Total cost of investments
Katoro Gold plc
Breakdown of investments as at 31 December 2020
Kibo Mining (Cyprus) Limited
Katoro Gold plc
Total cost of investments
Mbeya Developments Limited
Investments at Cost
At 1 January 2020
Additions in Kibo Mining (Cyprus) Limited
Mbeya Developments Limited
Disposal in Sloane Developments Limited
At 31 December 2020 (£)
Reversal of impairment in Katoro Gold plc
Additions in Kibo Mining Cyprus Limited
Impairment of the subsidiaries
At 31 December 2021 (£)
Fair value adjustment of Katoro Gold plc
Subsidiary
undertakings
(£)
16,233,997
16,762,761
528,764
Subsidiary
undertakings
(£)
42,796,376
2,160,888
46,664,160
1,706,896
Subsidiary
undertakings
(£)
43,318,643
2,766,361
1,706,896
(2,643,558)
46,664,160
1,515,818
1,114,324
(29,379,842)
16,762,761
(1,635,881)
The impairment in Katoro Gold plc is due to the significant decline in the share price, which results in the recoverable
amount of the investment in Katoro Gold plc decreasing considerably in 2021.
81
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
The impairment in Kibo Mining (Cyprus) Limited is due to the impairment recognised in the subsidiary investments,
being the investment held in the Mabasekwa Coal to Power and Mbeya Coal to Power projects during 2021.
At 31 December 2021 the Company had the following undertakings:
Description
Directly held Investments
Subsidiary,
associate,
Joint Ops
Activity
Incorporated
in
Interest
held
(2021)
Interest
held
(2020)
Kibo Mining (Cyprus) Limited
Katoro Gold plc
Indirectly held Investments
Subsidiary
Associate
Treasury Function
Mineral Exploration
Cyprus
United Kingdom
100%
20.88%
100%
29.25%
Subsidiary
MAST Energy Development plc
Subsidiary
Sloane Developments Limited
Subsidiary
MAST Energy Projects Limited
Subsidiary
Bordersley Power Limited
Subsidiary
Rochdale Power Limited
Subsidiary
Pyebridge Power Limited
Associate
Kibo Gold Limited
Associate
Savannah Mining Limited
Associate
Kibo Nickel Limited
Associate
Eagle Exploration Limited
Associate
Katoro (Cyprus) Limited
Associate
Katoro South Africa Limited
Subsidiary
Mbeya Holdings Limited
Mbeya Development Limited
Subsidiary
Mbeya Mining Company Limited Subsidiary
Subsidiary
Mbeya Coal Limited
Subsidiary
Rukwa Holding Limited
Mbeya Power Tanzania Limited Subsidiary
Subsidiary
Kibo Mining South Africa (Pty)
Ltd
Sustineri Energy (Pty) Ltd
Kibo Exploration Limited
Kibo MXS Limited
Mzuri Exploration Services
Limited
Investment
Protocol Mining Limited
Subsidiary
Jubilee Resources Limited
Kibo Energy Botswana Limited
Subsidiary
Kibo Energy Botswana (Pty) Ltd Associate
Kibo Energy Mozambique Limited Subsidiary
Subsidiary
Pinewood Resources Limited
BENGA Power Plant Limited
Joint Venture
Makambako Resources Limited Subsidiary
Subsidiary
Subsidiary
Subsidiary
Investment
Power Generation
Holding Company
Power Generation
Power Generation
Power Generation
Power Generation
Holding Company
Mineral Exploration
Holding Company
Mineral Exploration
Mineral Exploration
Mineral Exploration
Holding Company
Holding Company
Holding Company
Mineral Exploration
Holding Company
Power Generation
Treasury Function
Renewable Energy
Treasury Function
Holding Company
Exploration Services
Exploration Services
Mineral Exploration
Holding Company
Mineral Exploration
Holding Company
Mineral Exploration
Power Generation
Mineral Exploration
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Cyprus
Tanzania
Cyprus
Tanzania
Cyprus
South Africa
Cyprus
Cyprus
Cyprus
Tanzania
Cyprus
Tanzania
South Africa
South Africa
Tanzania
Cyprus
Tanzania
Tanzania
Tanzania
Cyprus
Botswana
Cyprus
Tanzania
Tanzania
Tanzania
55%
55%
55%
55%
55%
55%
20.88%
20.88%
20.88%
20.88%
20.88%
20.88%
100%
100%
100%
100%
100%
100%
100%
65%
100%
100%
4.78%
4.78%
100%
100%
35%
100%
100%
65%
100%
100%
100%
60%
100%
-%
-%
29.25%
29.25%
29.25%
29.25%
29.25%
29.25%
100%
100%
100%
100%
100%
100%
100%
-%
100%
100%
4.78%
4.78%
100%
100%
35%
100%
100%
65%
100%
The Group has applied the approach whereby loans to Group undertakings and trade receivables from Group
undertakings were capitalised to the cost of the underlying investments. The capitalisation results in a decrease in the
exchange fluctuations between Group companies operating from various locations.
82
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
24. Related parties
Related parties of the Group comprise subsidiaries, joint ventures, significant shareholders, the Board of Directors
and related parties in terms of the listing requirements. Transactions between the Company and its subsidiaries,
which are related parties, have been eliminated on consolidation.
Board of Directors/ Key Management
Name
Relationship (Directors of:)
A. Lianos
Other entities over which directors/key management or their close family have control or significant
influence:
River Group, Boudica Group and Namaqua Management Limited
River Group
River Group provide corporate advisory services and is the Company’s
Designated Advisor.
Boudica Group
Boudica Group provides secretarial services to the Group.
St Anderton on Vaal Limited
Kibo Mining plc is a shareholder of the following companies and as such are considered related parties:
St Anderton on Vaal Limited provides consulting services to the Group. The
directors of St Anderton on Vaal Limited are also directors of Mast Energy
Developments plc.
Directly held investments:
Kibo Mining (Cyprus) Limited
Katoro Gold plc
Indirectly held investments:
Kibo Gold Limited
Kibo Mining South Africa Proprietary Limited
Savannah Mining Limited
Katoro (Cyprus) Limited
Kibo Nickel Limited
Katoro South Africa Limited
Kibo Energy Botswana Limited
Kibo Energy Mozambique Limited
Eagle Exploration Mining Limited
Mbeya Holdings Limited
Rukwa Holdings Limited
Mbeya Development Company Limited
Mbeya Mining Company Limited
Mbeya Coal Limited
Mbeya Power Limited
Kibo Exploration Limited
Mbeya Power Tanzania Limited
Kibo MXS Limited
Kibo Energy Mozambique Limited
Pinewood Resources Limited
Makambako Resources Limited
Jubilee Resources Limited
Kibo Energy Botswana Limited
MAST Energy Developments plc
Sloane Developments Limited
MAST Energy Projects Limited
Bordersley Power Limited
Rochdale Power Limited
Pyebridge Power Limited
83
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
The following transactions have been entered into with related entities, by way of common directorship, throughout
the financial period:
•
•
•
•
•
•
River Group was paid £40,000 (2020: £37,500) for designated advisor services, corporate advisor services
and corporate financer fees during the year settled through cash. No fees are payable to River Group as at
year end. The expenditure was recognised in the Company as part of administrative expenditure.
St Anderton on Vaal Limited was paid £161,000 (2020: £276,000) during the year for consulting services
rendered to Mast Energy Project Limited.
On 31 July 2020, the Sloane Developments Limited, Mast Energy Projects Limited and St. Anderton on Vaal
Limited entered into the Share Exchange Agreement relating to the acquisition by Sloane Developments
Limited of the remaining 40% of the issued share capital of Mast Energy Projects Limited. Under the Share
Exchange Agreement, the Company will pay St Anderton on Vaal Limited the sum of £4,065,586 payable by
the issue of 36,917,076 ordinary shares of £0.001 each in the Company. Completion of the Share Exchange
Agreement was subject to and conditional upon the Admission of Mast Energy Developments Limited to the
London Stock Exchange. Following completion of the IPO on 14 April 2021, the Group acquired the remaining
equity interest in Mast Energy Projects Ltd for the consideration equal to 36,917,076 shares at a total value
of £4,065,586.
St Anderton on Vaal Limited was paid £169,603 (2020: £Nil) during the year for the settlement of the amounts
owing by MAST Energy Projects Limited for consulting services rendered, which resulted in another income
on the debt write-off of £355,397.
During the year, Namaqua Management Limited or its nominees, was paid £Nil (2020: £365,027) for the
provision of administrative and management services. £Nil was payable at the year-end (2020: £Nil).
The Boudica Group was paid £24,796 (2020: £Nil) for corporate services during the current financial period.
No fees are payable to Boudica Group at year end.
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation. The transactions during the period between the Company and its subsidiaries included the settlement
of expenditure to/from subsidiaries, working capital funding, and settlement of the Company’s liabilities through the
issue of equity in subsidiaries.
25. Financial Instruments and Financial Risk Management
The Group and Company’s principal financial instruments comprises trade payables and borrowings. The main
purpose of these financial instruments is to provide finance for the Group and Company’s operations. The Group has
various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from
its operations.
It is and has been throughout the 2021 and 2020 financial period, the Group and Company’s policy not to undertake
trading in derivatives.
84
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
The main risks arising from the Group and Company’s financial instruments are foreign currency risk, credit risk,
liquidity risk, interest rate risk and capital risk. Management reviews and agrees policies for managing each of these
risks which are summarised below.
2021 (£)
2020 (£)
Financial instruments of the Group are:
Financial assets at amortised cost
Loans and
receivables
Financial
liabilities
Loans and
receivables
Financial
liabilities
Other receivables
Cash
Financial liabilities at amortised cost
255,747
2,082,906
-
-
115,886
256,760
-
-
Trade payables
Borrowings
-
2,338,653
-
1,116,273
2,195,964
1,079,691
-
372,646
-
1,444,986
2,303,532
858,546
2021 (£)
2020 (£)
Loans and
receivables
Financial
liabilities
Loans and
receivables
Financial
liabilities
Financial instruments of the Company are:
Financial assets at amortised cost
Other receivables
Cash
Financial liabilities at amortised cost
73,734
239,674
-
-
39,085
141,788
-
-
Trade payables
Borrowings
Foreign currency risk
-
313,408
-
114,062
233,066
119,004
-
180,873
-
218,877
563,268
344,391
The Group undertakes certain transactions denominated in foreign currencies and exposures to exchange rate
fluctuations therefore may arise. Exchange rate exposures are managed by continuously reviewing exchange rate
movements in the relevant foreign currencies. The exposure to exchange rate fluctuations for the Group/Company is
limited to foreign currency translation of subsidiaries, which is not material, as the Group/Company does not hold
any significant foreign denominated monetary assets or liabilities.
At the period ended 31 December 2021, the Group had no outstanding forward exchange contracts.
Exchange rates used for conversion of foreign subsidiaries undertakings were:
2021
2020
ZAR to GBP (Spot)
ZAR to GBP (Average)
USD to GBP (Spot)
USD to GBP (Average)
EURO to GBP (Spot)
EURO to GBP (Average)
0.0465
0.0492
0.7412
0.7281
0.8394
0.8595
0.0499
0.0469
0.7325
0.7798
0.8984
0.8894
The executive management of the Group monitor the Group's exposure to the concentration of fair value estimation
risk on a monthly basis.
Group Sensitivity Analysis
As the Group/Company has no material monetary assets denominated in foreign currencies, the impact associated
with a change in the foreign exchange rates is not expected to be material to the Group/Company.
85
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Credit risk
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss
to the Group. As the Group does not, as yet, have any significant sales to third parties, this risk is limited.
The Group and Company’s financial assets comprise receivables and cash and cash equivalents. The credit risk on
cash and cash equivalents is limited because the counterparties are banks with high credit-ratings assigned by
international credit rating agencies. The Group and Company’s exposure to credit risk arise from default of its
counterparty, with a maximum exposure equal to the carrying amount of cash and cash equivalents in its consolidated
statement of financial position. Expected credit losses were not measured on a collective basis. The various financial
assets owed from group undertakings were evaluated against the underlying asset value of the investee, taking into
account the value of the various projects undertaken during the period, thus validating, as required the credit loss
recognised in relation to amounts owed by group undertakings.
The Group does not have any significant credit risk exposure to any single counterparty or any Group of
counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if
they are connected or related entities.
Financial assets exposed to credit risk at period end were as follows:
Financial instruments
Group (£)
Company (£)
2021
2020
2021
2020
Trade & other receivables
Cash
Liquidity risk management
255,747
2,082,906
115,886
256,760
73,734
239,674
39,085
141,788
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate
liquidity risk management framework for the management of the Group and Company’s short, medium and long-term
funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves
and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets
and liabilities. Cash forecasts are regularly produced to identify the liquidity requirements of the Group.
The Group and Company’s financial liabilities as at 31 December 2021 were all payable on demand.
Less than 1
year
Greater than 1
year but within
5 years
Greater than 5
years
Group (£)
At 31 December 2021
Trade and other payables
Borrowings
Lease liabilities
At 31 December 2020
Trade and other payables
Borrowings
Company (£)
At 31 December 2021
Trade and other payables
Borrowings
At 31 December 2020
Trade and other payables
Borrowings
1,116,273
1,079,691
27,000
-
-
108,000
-
-
648,000
1,444,986
858,546
114,062
119,004
218,877
344,391
-
-
-
-
-
-
-
-
-
-
-
-
86
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Interest rate risk
The Group and Company’s exposure to the risk of changes in market interest rates relates primarily to the Group and
Company’s holdings of cash and short-term deposits.
It is the Group and Company’s policy as part of its management of the budgetary process to place surplus funds on
short term deposit in order to maximise interest earned.
Group Sensitivity Analysis:
Currently no significant impact exists due to possible interest rate changes on the Company’s interest bearing
instruments.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while
maximising the return to stakeholders through the optimisation of the debt and equity balance.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To
maintain or adjust its capital structure, the Group may adjust or issue new shares or raise debt. No changes were made
in the objectives, policies or processes during the period ended 31 December 2021.
The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued
capital, reserves and retained losses as disclosed in the consolidated statement of changes in equity.
Fair values
The carrying amount of the Group and Company’s financial assets and financial liabilities recognised at amortised cost
in the financial statements approximate their fair value.
Hedging
As at31 December 2021, the Group had no outstanding contracts designated as hedges.
26. Post Statement of Financial Position events
Settlement of Outstanding Fees to Directors and Management
Kibo settled outstanding fees owing to directors and management through the issue of a 7% convertible loan note
redeemable instrument. The convertible instrument provides for the issue of unsecured redeemable convertible loan
notes of integral multiples of £1 each to the aggregate amount of £672,824. The subscriptions for the notes shall be
used to fund the Company’s working capital requirements related to outstanding salaries and fees due to
management, directors and former directors who are the sole subscribers to the notes.
Appointment of Shard Capital Partners LLP as Joint Broker
Kibo appointed Shard Capital Partners LLP as joint broker to the Company with immediate effect, to act alongside
Hybridan LLP, who remains the Company's joint broker, and RFC Ambrian Ltd, who remains nominated advisor.
Power Purchase Agreement on South Africa Waste to Energy Project – Sustineri Energy (Pty) Ltd
Kibo entered a 10-year take-or-pay conditional Power Purchase Agreement (`PPA') to generate baseload electricity
from a 2.7 MW plastic-to-syngas power plant. The plant will be constructed, commissioned and operated for an
Industrial Business Park Developer in Gauteng, South Africa. The project, is the first project under Sustineri Energy
(Pty) Ltd, a joint venture in which Kibo holds 65% and the balance of 35% is held by Industrial Green Energy Solutions
(Pty) Ltd.
Signing of Funding Facility Agreement with Institutional Investor and Issue of Shares in lieu of Payment
Kibo signed a bridging loan facility agreement with an institutional investor for up to £3m with a term of up to 36
months. The facility provides for an initial drawdown of £1m which is immediately available to the Company on
signing of the facility. Funds advanced under the facility will attract a fixed coupon interest rate of 3.5% and will be
repayable with accrued interest, 4 months from the date of drawdown.
87
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
The Investor shall receive warrants equal to 30% of each drawdown divided by the average of the daily VWAP for
each of the 5 consecutive trading days immediately prior to the applicable drawdown date, with a 36-month term to
expiry from the date of issuance. The warrants are exercisable at a subscription price being equal to 130% of the then
prevailing reference price. If the share price of the Company is above a 100% premium to the relevant exercise price
for 30 consecutive days, then 50% of the warrants will be cancelled, unless otherwise previously exercised. With
regards to the initial advance, the Investor will receive 168,274,625 warrants.
In compliance with the facility terms for the initial advance, the Company has issued shares in settlement of a facility
implementation fee of £70k in the amount of 39,264,079 new ordinary Kibo shares of €0.001 each at a deemed price
of 0.17828 pence per share. Additionally, the Company has issued 13,157,895 new ordinary Kibo shares of €0.001
each at 0.19 pence per share to certain providers of financial and technical services in payment of outstanding
invoices.
Convertible Instrument Extension of Redemption Date
On 1 March 2022 Kibo agreed an extension of one month for the redemption date of the convertible instrument, with
all but one of the subscribers to the notes. The new extended redemption date was revised to be 1 April 2022. The
extension included notes in aggregate of £657,985, from the total amount of £672,824. The amount of £14,839 (face
value and interest) was settled in cash, in accordance with the terms of the convertible instrument announced on 07
January 2022.
On 1 April 2022 Kibo agreed a further extension of three months for the redemption date of the convertible
instrument, with all remaining noteholders. The new extended redemption date will now be 1 July 2022. The further
extension includes notes in aggregate of £657,985.
Agreement to deploy at least 1 Gigawatt of Long Duration Energy Storage in Southern Africa
Kibo signed a rolling 5-year Framework Agreement with Enerox GmbH ('CellCube'), to develop and deploy CellCube
based Long Duration Energy Storage ("LDES") solutions in selected target sectors in Southern Africa. Under the
agreement Kibo has been granted conditional exclusive rights, subject to successful Proof of Concepts ("PoC"), to the
marketing, sales, configuration and delivery of CellCube's vanadium redox flow batteries ("VRFB") in the development
of its LDES solutions in microgrid applications behind the meter.
Appointment of Group Chief Financial Officer
Kibo appointed Mr. Cobus van der Merwe as Group Chief Financial Officer with effect from the 1
Settlement of Outstanding Loan and Issue of Shares
of June 2022.
st
Kibo issued 56,118,047 new Kibo shares of €0.001 each at a deemed issue price of £0.0016 per share to Sanderson
Capital Partners Limited in full and final settlement of £89,788.88 of the total remaining outstanding amount owing
pursuant to the forward payment facility signed between Sanderson Capital Partners Limited and the Company in
December 2016.
27. Commitments and Contingencies
Benga Power Project
Kibo entered into a Joint Venture Agreement (the ‘Benga Power Joint Venture’ or ‘JV’) with Mozambique energy
company Termoeléctrica de Benga S.A. to participate in the further assessment and potential development of the
Benga Independent Power Project (‘BIPP’).
In order to maintain its initial participation interest Kibo is required to ensure funding of a maximum amount of £1
million towards the completion of a Definitive Feasibility Study, however this expenditure is still discretionary.
Other than the commitments and contingencies noted above, the Group does not have identifiable material
commitments and contingencies as at the reporting date. Any contingent rental is expensed in the period in which it
incurred.
88
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
Annexure 1: Headline Earning Per Share
Headline earnings per share (HEPS) is calculated using the weighted average number of ordinary shares in issue
during the period and is based on the earnings attributable to ordinary shareholders, after excluding those items as
required by Circular 1/2021 issued by the South African Institute of Chartered Accountants (SAICA).
Reconciliation of Headline earnings per share
Headline loss per share
Headline loss per share comprises the following:
Reconciliation of headline loss per share:
Loss for the period attributable to normal shareholders
Adjustments:
Loss on disposal of subsidiaries
Profit on loss of control over of subsidiaries
Profit on disposal of motor vehicle
Impairment of goodwill
Impairment of intangible assets
Impairment of associates
Headline loss for the period attributable to normal shareholders
31 December
2021 (£)
31 December
2020 (£)
(21,996,968)
(4,726,286)
-
(529,415)
-
300,000
13,955,528
(1,821,174)
6,449,681
102,414
-
(53,574)
-
-
(4,677,446)
-
Headline loss per ordinary share
(0.0007)
(0.003)
Weighted average number of shares in issue:
2,480,279,189
1,546,853,959
In order to accurately reflect the weighted average number of ordinary shares for the purposes of basic earnings,
dilutive earnings and headline earnings per share as at year end, the weighted average number of ordinary shares
was adjusted retrospectively.
89