KIBO ENERGY PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR
THE YEAR ENDED 31 DECEMBER 2022
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
INDEX
1
CORPORATE DIRECTORY
2
CHAIRMAN’S REPORT
4
REVIEW OF ACTIVITIES
5
CORPORATE GOVERNANCE REPORT
8
DIRECTORS’ REPORT
15
DIRECTORS’ STATEMENT OF RESPONSIBILITIES
28
AUDIT COMMITTEE REPORT
29
INDEPENDENT AUDITOR’S REPORT
30
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
37
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
38
COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
39
COMPANY STATEMENT OF FINANCIAL POSITION
40
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
41
COMPANY STATEMENT OF CHANGES IN EQUITY
42
CONSOLIDATED STATEMENT OF CASH FLOWS
43
COMPANY STATEMENT OF CASH FLOWS
44
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
45
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
58
ANNEXURE 1: HEADLINE EARNINGS PER SHARE
93
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CORPORATE DIRECTORY
2
BOARD OF DIRECTORS:
Louis Coetzee Chief Executive Officer & Acting Chairman
Noel O’Keeffe Technical Director (Non-Executive Director)
Ajay Saldanha Non-Executive Director
COMPANY SECRETARY:
Noel O’Keeffe
REGISTERED OFFICE:
17 Pembroke Street Upper
Dublin 2, Ireland
BUSINESS ADDRESS - IRELAND:
Gray Office Park
Galway Retail Park
Headford Road
Galway, Ireland
AUDITORS:
Crowe Ireland
40 Mespil Rd
Dublin 4
D04 C2N4
Ireland
STOCK EXCHANGE LISTING:
London Stock Exchange: AIM - (Share code: KIBO) – Primary
Johannesburg Stock Exchange: JSE Alt X - (Share Code: KBO) – Secondary
SHARE REGISTRARS:
United Kingdom & Ireland
Link Registrars Ltd
Suite 149,
The Capel Building,
Mary’s Abbey,
Dublin 7, D07 DP79
South Africa
JSE Investor Services (Pty) Ltd
One Exchange Square,
2 Gwen Lane, Sandown,
Sandton, 2196
South Africa
PRINCIPAL BANKERS:
Allied Irish Banks PLC
Tuam Road
Galway
Ireland
JOINT BROKER:
Hybridan LLP
1 Poultry
London
EC2R 8EJ
JOINT BROKER:
Shard Capital Partners LLP
23rd Floor
20 Fenchurch Street
London, EC3M 3BY
UK PUBLIC RELATIONS:
Lifa Communications
32 Fricker Road
Illovo, Johannesburg
2169, South Africa
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CORPORATE DIRECTORY
3
SOLICITORS:
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
UK NOMINATED ADVISER:
Beaumont Cornish Limited
Building 3
566 Chiswick High Road
London W4 5YA
JSE DESIGNATED ADVISER:
River Group
Unit 2, 211 Kloof Street
Waterkloof
Pretoria, South Africa
WEBSITE:
www.kibo.energy
CONTACT:
info@kibo.energy
DATE OF INCORPORATION:
17 January 2008
REGISTERED NUMBER:
451931
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CHAIRMAN’S REPORT
4
Chairman’s Statement
I am pleased to provide a review of Kibo Energy PLC (“Kibo” or the “Company”) and its subsidiaries’ (together with
Kibo, the “Group”) activities for the 2022 FY reporting period and to present our full-year audited accounts for 2022.
Kibo, still a relatively newcomer to the sustainable clean and renewable energy sector, has made significant progress
in waste-to-energy, biofuel, reserve power, and battery storage projects. Despite significant market challenges, Kibo
remains resilient, focused and committed to its goals. The Company has successfully transitioned into a clean /
renewable energy company and has acquired a strong project portfolio in the UK and Southern Africa.
To provide context, I will offer a concise summary of the year's activities outlined in more detail elsewhere in this
annual report:
•
Joint venture with IGES converts un-recyclable plastic into syngas, secures power purchase agreement for waste-
to-energy facility;
•
Kibo acquires Shankley Biogas Limited and invests in Mast Energy Developments PLC for waste-to-energy and
reserve energy projects;
•
Initiates work program to establish the viability of substituting coal with biofuel in thermal power plants and
renews MoU with Tanzanian Government for the Mbeya Power Project;
•
Entered Long Duration Energy Storage sector through strategic agreement with Enerox GmbH and establishes
joint venture with National Broadband Solution (Pty) Ltd; and
•
New appointments made to the board, retirements of long-serving directors.
Kibo is pioneering the energy landscape in its approach to the Company’s strategic shift towards sustainable and
renewable assets. Through groundbreaking ventures and partnerships, we are driving advancements in waste-to-
energy, biofuel, reserve power, and long-duration battery storage. With a forward – looking focus on innovation to
address the challenges in maintaining stable base load generation while transitioning to sustainable renewable
energy generation solutions, Kibo is contributing to a productive, greener and brighter future.
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 £5,504,216 (2021: £20,088,240) related to its coal assets. The result for the reporting period amounted to a loss of
£10,908,524 for the year ended 31 December 2022 (31 December 2021: £23,148,155) 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 continue with
advancing our new project portfolio. I would like to thank our Board, as well as management and staff, for their
continued support and commitment in advancing Kibo.
_____________________________
Louis Coetzee
Chairman
28 June 2023
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
REVIEW OF ACTIVITIES
5
CEO Report
Introduction
During 2022, the Group demonstrated its firm commitment to transition the Group into a sustainable renewable
energy company, despite challenging conditions. We solidified our position in sectors like Waste to Energy, Biofuel,
Reserve Power, and Renewable Energy Generation Long Duration Battery Storage. Focusing on Southern Africa and
the UK, our achievements have been significant.
Operations
Sustineri Energy Joint Venture – Waste-to-Energy Project (South Africa)
Kibo and Industrial Green Energy Solutions (IGES) have formed Sustineri Energy (Pty) Ltd, aiming to generate over
50 MW of electricity in South Africa through waste-to-energy projects. Pyrolysis technology will convert non-
recyclable plastics into syngas.
•
Kibo provides £560,000 financial support, including an equity loan.
•
First phase: phased construction of c. 8 MW Waste to Energy facility in Gauteng.
•
20-year conditional Power Purchase Agreement secured for initial 2.7 MW phase.
•
JV explores synthetic oil production for additional revenue and profitability from the original project design.
Viability assessments are being conducted; a feasibility optimisation study is underway for oil integration into
original design.
•
Kibo identifies additional waste-to-energy opportunities in pursuit of c. 50 MW capacity.
•
Lesedi Nuclear Services selected as strategic partner for EPC and O&M.
Southport – Waste-to-Energy Project (UK)
Kibo has entered into a share purchase agreement to acquire Shankley Biogas Limited, securing the rights to the
Southport project—a 12 MW Waste to Energy initiative near Liverpool, UK. The project aims to generate bio-methane,
power a 10 MW CHP plant, and a 2 MW battery storage facility. Shankley Biogas Limited has secured a favourable
conditional Power Purchase Agreement (PPA) and Gas Purchase Agreement (GPA) with a reputable buyer. The project
has received full planning permission and has established grid and gas connection points. Financial estimates
demonstrate promising returns and value for the project.
With reference to the qualified audit opinion on the Company’s investment in Shankley Biogas Limited, Kibo was
unable to provide the auditor with sufficient appropriate audit evidence about the carrying values of the investment
in Shankley and its associated assets and liabilities, as included in the Group and Company Balance Sheet as at 31
December 2022. This is because of a dispute with the vendor due to the vendor’s inability to provide sufficient and
reliable financial information for Shankley Biogas Limited, despite numerous requests in this regard, and the
Company being unable to agree an option to lease agreement in respect of the site with the vendor. The Company is
currently engaged in constructive negotiations to reach an amicable resolve for the ongoing dispute and is confident
that this will be settled soon.
Legacy Coal Projects – Tanzania, Botswana and Mozambique and Biofuel Initiative
Kibo is actively pursuing sustainable fuel sources for its energy projects in Tanzania, Botswana, and Mozambique.
•
Kibo aims to divest from coal assets while retaining energy projects through innovative biofuel technology. Recent
testing showed the superior potential of biomass (bio coal) compared to conventional coal in industrial boilers.
•
The company has initiated a technical study to assess the feasibility of replacing fossil fuels with renewable
biofuel. In this regard, Kibo has appointed an experienced international biomass and biofuel consultant to
evaluate the economic and operational feasibility of implementing bio coal as a fuel replacement for utility-scale
power projects.
•
Kibo is in discussions with the Tanzanian government for the Mbeya Power Project, aligning with the Tanzanian
Power System Master Plan. A renewed MOU with TANESCO outlines the framework for finalizing power purchase
and implementation agreements.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
REVIEW OF ACTIVITIES
6
Long Duration Energy Storage
Kibo's CellCube Vanadium Redox Flow Battery Energy Storage Systems (VRFB BESS) strengthens the Company’s
Southern Africa project development with durable, long-duration energy storage for renewables, addressing key
aspects such as load shedding and grid stability.
•
The partnership with Enerox GmbH secures qualified exclusive rights to deploy VRFB Energy Storage Systems,
advancing our commitment to sustainable energy.
•
Kibo's role as a project developer includes the prospective manufacturing specific CellCube BESS, driving our
clean energy solutions.
Investments
Mast Energy Developments PLC (“MED”)
Since its IPO in April 2021, MAST Energy Developers (MED), in which Kibo holds a 57.86% investment has been
steadily advancing towards its goal of establishing a portfolio of flexible power sites in the UK, aiming for a capacity
of up to 300 MW. MED's recent addition of the Hindlip Lane and Stather Road projects, alongside existing gas peaker
plants, brings them closer to this target. The company's announcement of a heads of terms for a Joint Venture
Agreement, with a significant investor providing an investment of c. £33.6 million, positions MED to accelerate project
acquisition and achieve their capacity goal within the next two years.
Further information on these projects and the latest MED updates can be found on its website at www.med.energy.
Katoro Gold PLC – Mineral Exploration
During 2022, Kibo's 20.88% investment in Katoro Gold PLC yielded progressive results in their projects in Tanzania
and South Africa. While the planned listing and IPO for the Blyvoor gold tailings joint venture was delayed, Katoro is
actively seeking funding options for its development. In Tanzania, Katoro made progress with drilling phases in the
Haneti Nickel-PGM Project and reestablished a joint venture interest in the Imweru Gold Project, restructuring the
transaction with Lake Victoria Gold for the asset's development.
Further information on the Katoro projects and the latest updates can be found on its website at www.katorogold.com.
Corporate
In 2022, Kibo underwent financial and organizational changes, issuing shares to settle invoices, fees, and debts.
•
Share Issuance: Kibo issued 108,540,021 new ordinary shares at various prices to settle invoices, implementation
fees, and outstanding debts.
•
Director and Management Changes: In a series of key transitions, Christian Schaffalitzky and Chris Schutte retired,
and Andreas Lianos resigned from their director positions. Ajay Saldanha joined the Board in early 2023, while
Pieter Krügel took on the role of CEO at Mast Energy Developments PLC. Cobus van der Merwe assumed the
position of Kibo Group CFO, and Peter Oldacre was appointed as the Group Business Development Executive.
Shard Capital Partners LLP became a joint broker alongside Hybridan LLP, and Beaumont Cornish took over as
the new Nomad. These changes aimed to fortify internal management capacity and support strategic growth.
Despite Kibo's proven ability to secure ongoing funding, unexpected and uncontrollable obstacles during Q4 2022
disrupted its annual funding plans, causing a loss of time and moreover, business continuity.
•
The Company faced an initial setback with the unexpected resignation of the previous NOMAD, resulting in a
mandatory suspension from AIM and a pause in closing planned funding initiatives.
•
Additionally, major shareholders faced voting challenges arising from a technical problem within the Euroclear
system preventing them from voting from outside the EU jurisdiction during critically important extraordinary
general meetings.
•
Despite the correction of, and recovery after the NOMAD and Euroclear issues and the subsequent resumption of
funding plans, this created severe delays in securing funding, resulting in extensive operational disruption and
progressive execution. Nevertheless, the situation was contained, and the company is back on track.
Kibo remains confident in its ability to adequately address its short and medium terms funding requirements through
various strategic partnerships and creative funding solutions. Recent success in this regard is demonstrated by the
various initiatives set out below:
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
REVIEW OF ACTIVITIES
7
•
Convertible Loan Note Redeemable Instrument (CLN): In January 2022, a CLN was issued to settle debts. The
maturity date was extended multiple times, with a final date set for April 28, 2023. Noteholders converted
£714,517 worth of Notes into 510,369,286 Kibo shares.
•
Bridge Loan Facility: In February 2022, Kibo secured a bridge loan facility of £1 million with an institutional
investor. The loan carried a fixed coupon interest rate of 3.5% and was originally due for repayment in June 2022.
To settle a facility implementation fee of £70,000, shares were issued. The repayment date was extended to April
2023, and the investor gained the right to trade Mast Energy Developments PLC shares worth up to £250,000,
offsetting the outstanding amount.
•
Reprofiling Agreement: Kibo implemented a Reprofiling Agreement on April 11, 2023, converting £1,113,980 of
the bridge loan facility into a 24-month term loan. Additionally, Convertible Loan Notes were converted to shares,
warrants were repriced and exercised, and new warrants were awarded. The agreement took effect on April 25,
2023, with the issuance of new warrants and shares.
_______________________________
Louis Coetzee
Chief Executive Officer
28 June 2023
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CORPORATE GOVERNANCE REPORT
8
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 Group .
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 Group 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 the Group’s project portfolio expands. 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 contact details 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 two years, it will update 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.
Successive phases of this CSR Plan will be implemented commensurate with and contingent on the construction,
commissioning and management of its waste-to-energy, long term battery storage, biofuel and reserve power 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CORPORATE GOVERNANCE REPORT
9
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 15 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 29 provides
further details on the committee’s activities during 2022.
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 an executive chairman who is also the CEO and two non-executive directors. One of the non-
executive directors (Ajay Saldanha), 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 director comprise the Company’s CEO who dedicates 100% of his 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:
•
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;
•
approval of Financial Statements and Annual Report;
•
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.
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 twenty four (24) times during the
last financial year to 31 December 2022 with on average >90% attendance during this period.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CORPORATE GOVERNANCE REPORT
10
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 Executive 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 and operational 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 15. 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. The board is currently considering the appointment
of new directors following the retirement of two non-executive directors during 2022. 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 independent advisors across financial, legal, 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
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.
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CORPORATE GOVERNANCE REPORT
11
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.
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CORPORATE GOVERNANCE REPORT
12
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. Currently the Chairman and CEO role are held by the same
person, following recent director retirements during 2022 and the Company is evaluating candidates for appointment
to the board including for a stand-alone Chairman in accordance with good governance practise. 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: Currently comprises one non-executive director. 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 was chaired by Christian Schaffalitzky until his retirement
from the board in September 2022, and Noel O’Keeffe is currently the only member pending the completion of
appointment of new members to the Kibo board.
Executive Committee: Comprises one executive director and three 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 Louis Scheepers (COO),
Cobus van der Merwe (CFO) and Peter Oldacre who was appointed Group Business Development Executive in March
2023.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CORPORATE GOVERNANCE REPORT
13
Remuneration Committee: Currently 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 Governance Committee
was chaired by Christian Schaffalitzky until his retirement from the board in September 2022 with Ajay Saldanha
being appointed as Chairman on 24 January 2023. Noel O’Keeffe was also appointed to the Renumeration Committee
on 24 January 2023 to serve with Mr. Saldanha.
Audit Committee: Comprises one non-executive director. 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 Governance Committee was chaired by Andreas Lianos until his
retirement from the board in November 2022 and Noel O’Keeffe is currently the only member pending additional
appointments when the appointment of new Kibo board members, currently being considered, is complete.
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:
•
market announcements on regulatory platforms (RNS and SENS);
•
annual and interim reports;
•
circulars;
•
annual general meetings of shareholders;
•
investor presentations and briefings;
•
Q&A forums and social media sites;
•
website at www.kibo.energy; and
•
via investor relations professionals at Lifa Communications (contact person: Zainab Slemang van Rijmenant
- zainab@lifacommunications.com)
The Company’s Audit Committee Report is presented on page 29 and provides further details on the committee’s
activities during 2022, 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CORPORATE GOVERNANCE REPORT
14
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 2022 to ensure it remains in compliance with
the QCA Code.
___________________________
Noel O’Keeffe
Chairman
Governance Committee
28 June 2023
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
15
The Board of Directors present their Annual Report together with the audited annual financial statements for the year
ended 31 December 2022.
The Board comprises one executive director who is CEO and Acting Chairman and two non-executive directors. Two
non-executive directors, including the Company Chairman (Christian Schaffalitzky) retired during 2022 and the
Company plans to make additional appointments to the Board during 2023 to replace them and continue to ensure
independent appropriate expertise is always in place to support its business activities. These pending appointments
will also ensure the CEO and Chairman roles do not continue to be held by the same person in accordance with good
governance practise.
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. While the role of Chairman and Chief Executive Officer are currently held by the same
person on an interim basis, this will be addressed following further appointments to the Board that are being planned.
Board and Audit Committee meetings have been taking place periodically and the CEO manages 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 twenty-four (24) 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:
Louis Coetzee - Chief Executive Officer & Acting Chairman (executive)
Noel O’Keeffe - Technical Director (non-executive)
Ajay Saldanha - Director (independent non-executive)
Louis Coetzee, BA, MBA, Age 59– Chief Executive Officer & Acting Chairman (executive)
Louis Coetzee has over 28 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 59 – Technical Director (non-executive)
Company Secretary and Chairman of Governance, Audit and Remuneration Committees.
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
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
16
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. In recent years, Noel has assumed
administration, company secretarial and regulatory oversight roles within the Kibo Group.
Ajay Saldanha, B.Eng., MBA, Age 47 – Director (independent non-executive)
Ajay Dominic Saldanha is an experienced banking and investment professional with more than 20 years of experience
in the power, energy, and utilities sector. He has dealt extensively with asset owners, developers and investors in the
low-carbon and energy efficiency space. Ajay was Partner and Head of Energy M&A at KPMG until 2017 and prior to
that, at Lehman Brothers (& Nomura) since 2001. During his investment banking and advisory tenure, Ajay has led
acquisitions and financing of more than $60bn, related to assets in the UK, Europe, Asia and sub-Saharan Africa. Ajay
is also a qualified chemical plant engineer from the University of Mumbai and obtained his MBA from the Indian
Institute of Management, Ahmedabad.
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 its 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
has, since June 2021, focused on the acquisition, development and operationalisation of a portfolio of sustainable,
renewable energy assets and disposal, or reposition of its coal assets.
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. This
approach has continued in 2022 and the first half of 2023 with further work continuing existing projects and new
projects having been added to the Company’s portfolio.
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 progressed
during 2022. In February 2022 the Company announced the signing of a 10-year take-or-pay conditional Power
Purchase Agreement (`PPA') to generate baseload electricity from the first 2.7 MW phase of the development of the
most advanced project, in an industrial park in Gauteng Province. (Project 1). This PPA was subsequently extended
to 20 years. More recently, in January 2023 the Company announced another potential revenue stream for Project 1
involving the production of synthetic oil from plastic wate feedstock as a separate product line to syngas production.
While originally anticipated that Financial Close would take place in Q3 2022, the expansion of the project to include
synthetic oil production has necessitated deferral until further feasibility and testing work can be completed and the
full impact this new revenue stream will have on the financial model can be assessed. The Company believes success
with this phase will bode well for the rapid expansion of Project 1 to its full c. 8 MW potential and for the development
of the other projects in the IGES joint venture.
The 5-year Strategic Framework Agreement with Austrian company Enerox GmbH ('CellCube') and the
complementary National Broadband Solutions joint venture, both announced in May 2022, give the Company the
potential to establish a strong position in the growing Long Duration Energy Storage (LDES) business in Southern
Africa. These agreements give Kibo agency over the sale, supply, and installation of one of the leading current battery
technologies (vanadium redox flow batteries) for specific segments of the South African market and ready access to a
project pipeline requiring such installations. The growing market for LDES in South Africa is as a result of electricity
rationing with on-going daily power cuts being experienced by consumers because of electricity production under
capacity on its national grid. National Broadband Solutions placed its first order to purchase two CellCube batteries
in July 2022 to test their applicability in the market segments that it has the agency to service.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
17
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 currently participating in the UK market on two fronts: the acquisition
of utility scale waste to energy plants and the expansion of its Reserve Power project footprint by rapidly expanding
its acquisition and development of gas -fuelled peaking power plants through its investment in Mast Energy
Developments PLC. The Southport project which the Company’s is in the process of completing acquisition represents
the Company’s first entry to the UK’s waste to energy sector. This planned 10 MW combined heat and power plant
and 2 MW battery storage facility is being designed to produce 5.5 million cubic metres of bio-methane annually from
municipal waste and shows attractive estimated financial returns from initial financial modelling.
Kibo was the cornerstone investor behind LSE listed subsidiary, Mast Energy Developments PLC (“MED”) in which it
retains a 57.86% interest. 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, 4.5 MW site under construction, and a further 14.4 MW in development. MED anticipates it can rapidly
expand its project portfolio over the next 12 months, contingent on completing a joint venture agreement an investor
to a value of. £33.6m for which a Heads of Terms has already been agreed.
In line with continuation of its rapid transition to a renewable energy focused development company, Kibo has
investigated the potential for the conversion of its existing energy projects in Tanzania, Botswana and Mozambique
to clean / renewable energy projects. Kibo announced in August 2022 that it has initiated a process for Requests for
Proposals ('RFPs') to investigate the feasibility of replacing fossil-fuel (coal) with renewable biofuel. This followed an
extensive review of the Company's operations and assets wherein it determined to dispose of all its coal assets (RNS
dated 16 June 2021) while retaining the associated energy (power) projects through its introduction of innovative
biofuel technology, on which the Company has done extensive work during 2022 and which is continuing. Through
the RFP process, Kibo appointed an experienced international biomass and biofuel consultant to determine the
economic and technical viability of utilising the specific biomass (or bio-coal) technology, as a feasible fuel source at
industrial scale, to fuel the Company's existing and already developed utility scale power projects.
Recent verification testing as announced by the Company on 2 May 2023 on selected biomass types demonstrate that
the selected biomass types of not only match but significantly outperforms conventional coal in many specification
categories used in industrial boilers. These verification results have shown more favourable outcomes in terms of
specifications compared to previous tests and demonstrate in principle the feasibility of using biofuel instead of coal
to fuel the Company’s African power projects.
The potential to fuel its legacy coal power plant projects with biofuel is being advanced alongside renewed
negotiations on a power purchase agreement with the Tanzanian Government in relation to the Mbeya Power Project.
These negotiations led to the signing of a renewed Memorandum of Understanding ('MOU') with Tanzania Electric
Supply Company Limited ('TANESCO'), announced on 23 November 2022, in relation to the development of the
Mbeya Power Project The renewed MOU is in essence an agreement between the parties on the process to agree and
conclude a power purchase agreement ('PPA') whereby TANESCO will purchase power with a capacity of 300 MW
from Mbeya Power Limited a subsidiary of Kibo. The objective of this MOU is to establish a general framework of
collaboration and cooperation to enable the design, development, financing, construction, commissioning and
operation of the Mbeya Power Project and its associated infrastructure. The MOU sets out clear guidelines,
deliverables, and timelines for the conclusion of a PPA and related implementation agreements. The Project is Kibo's
initial flagship energy project based in Tanzania where the Company aims to build a 300MW steam-powered power
station in alignment with the Tanzanian Power System Master Plan (2020). The renewed MOU provides Kibo with the
opportunity to reintroduce the Project into its development plans and specifically alongside the Company's bio-fuel
initiative. Recently (May 2023) the Company announced the establishment of a Joint Technical Committee with
TANESCO to ensure the key milestones, as set out in the MOU, are met.
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 £5,504,216 (2021: £20,088,240) related to its coal assets. The result for the reporting period amounted to a loss of
£10,908,524 for the year ended 31 December 2022 (31 December 2021: £23,148,155) 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
18
Events After the Reporting Period
Appointment of Beaumont Cornish as Company Nomad
Kibo appointed Beaumont Cornish to the Company as its Nominated Advisor (Nomad) on 11 January 2023. This
appointed coincided with the lift of a suspension of Kibo shares trading on AIM/JSE in place since 12 December 2022
following the resignation of RFC Ambrian as Company Nomad on 9 December 2022.
Appointment of Company Director and Senior Executive
Ajay Saldanha was appointed by the Board as a director of the Company on 11 January 2023. Peter Oldacre was
appointed as Kibo Group Business Development Executive by the Board on 10 March 2023.
Update on IGES Waste to Energy Joint Venture
On 17 January 2023, the Company announced a potential new revenue stream for its initial project (the “Project”)
within the IGES waste to energy joint venture, targeting the production of synthetic oil from non-recyclable plastic
waste (in addition to the previously reported production of electricity from syngas), which promises significant added
benefits.
It is expected that the addition of synthetic oil production could significantly increase the Project’s profitability and
provides the Company with the opportunity to potentially generate revenue much earlier than initially projected. It
also contributes materially to de-risking the Project and will make the Project significantly more attractive to a wider
spectrum of interested funders, thereby reducing the funding risk.
Share issue to Company service provider
On 25 January 2023, the Company issued 14,025,314 shares in settlement of an invoice to a service provider at a
deemed share price of 0.14p for a total of £19,635.44.
7% Convertible Loan Note Instrument - Extension of Redemption Date
On 1 March 2023 Kibo agreed an extension of three months for the redemption date of its 7% Convertible Loan Note
Instrument (the “Instrument”). The new extended redemption date was revised to be 31 May 2023. The extension
included notes in aggregate of £657,985, from the total amount of £672,824 issued to noteholders (the “Noteholders”).
An amount of £14,839 (face value and interest) was settled in cash with one subscriber who did not participate in the
extension agreement in accordance with the terms of the convertible instrument announced on 07 January 2022.
The Instrument was subsequently redeemed with the agreement of Noteholders for outstanding balances amounting
to £714,517 (principal and interest) as of 28 February 2023 on 11 April 2023 for Kibo shares to satisfy one of the
conditions precedents to the re-profiling of the Kibo Facility Agreement signed on 10 April 2023 (see next section).
Reprofiling of Bridge Loan Facility agreed with Institutional Investor
On 11 April 2023, the Company announced a reprofiling of the Bridge Loan Facility Agreement signed with an
Institutional Investor on 16 February 2022 and for which the maturity date was subsequently extended from its
original date of 16 June 2022 to 28 April 2023. The Reprofiling Agreement saw £1,113,980 of the outstanding balance
on the existing bridge loan facility converted into a new 24-month term loan (the Reprofiling Agreement) following
the completion of the following conditions precedent which were satisfied by on 25 April 2023 and announced on 26
April 2023.
•
Subscribers to Kibo's 7% Convertible Loan Note Instrument (the CLN) convert their Notes amounting to
£714,517 in value to Kibo shares at a conversion price of 0.14p resulting in the issue of 510,369,286 new Kibo
shares to Noteholders. This was completed and announced by the Company on 26 April 2023.
•
The exercise price for all Kibo’s outstanding warrants in the amount of 1,128,024,625 is repriced to 0.1p and
existing warrant holders (excluding institutional investor) exercise up to 264,125,000 of these at the new
exercise price, resulting in potential cash proceeds of up to £264,125 to the Company and the issue of up to
264,125,000 new Kibo shares to the warrant holders. The total amount of outstanding warrants exercised to
date (excluding institutional investor) at 0.1p is 116,250,000 resulting in proceeds of £116,250 to the Company
of which £48,000 was received to the date of this Annual Report. It is noted that warrant conversion notices
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
19
under their respective warrant instruments are irrevocable once received by the Company and the balance of
£68,250 is a payment receivable for the Company. These warrant exercises were completed and announced by
the Company on 26 April 2023 and 26 May 2023.
•
The Institutional Investor exercises further 168,274,625 of outstanding Kibo warrants that it holds at the new
exercise price of 0.1p, resulting in cash proceeds of £100,000 to the Company, and £68,274 to be set off against
the outstanding amount of the bridge loan facility of £1,182,254 leaving £1,113,980 as the initial balance for the
Reprofiling Agreement. This was completed and announced on the 26 April 2023.
•
The terms of the Reprofiling Agreement also required the awarding of new Kibo warrants (each warrant
convertible to one Kibo share) to the (i) Institutional Investor (Institutional Investor Warrants), (ii) all warrant
holders who exercise their repriced warrants and including institutional investor (Incentive Warrants) and) (iii)
the CLN Noteholders (Noteholder Warrants). The details of these new Kibo warrants are shown in the table
below. The Institutional Investor Warrants were issued on 25 April 2023, while the Incentive and Noteholder
Warrants were to be issued on 2 June 2023 pending shareholder approval of an increase in the Company’s share
capital authorisation, renewal of director share issue authorisations, reduction of the nominal value of ordinary
shares and disapplication of pre-emptive rights on new share issues at its EGM on that date. While the share
capital authorisation increase, renewal of director share issue authorisations and reduction in nominal value of
ordinary shares were approved by shareholders, the resolution approving disapplication of pre-emptive rights
on new share issues was not carried at the EGM. The consequence of this is that the vesting date for the
Institutional Investor warrants cannot now occur until the Company succeeds in obtaining shareholder approval
for the dis-application of pre-emptive rights at another general meeting. Similarly, the Incentive Warrants and
the Noteholder Warrants will not now be issued until the disapplication of pre-emptive rights is approved at a
general meeting.
Warrant
Description
No
of
Warrants
Exercise Price
Issue Date
Vesting
Date
Exercise
Period
(from
Vesting
Date
Institutional
Investor
Warrants
1,262,300,283
50% at 0.08825p
50% at 0.1765p
25/4/23
Conditional
on
dis-
application
of
pre-
emption
rights
at
general
meeting
36
months*
Incentive
Warrants
357,274,625
0.25p
Conditional
on
dis-
application
of
pre-
emption
rights
at
general
meeting
Conditional
on
dis-
application
of
pre-
emption
rights
at
general
meeting
18
months**
Noteholder
Warrants
404,825,496
0.132375p
Conditional
on
dis-
application
of
pre-
emption
rights
at
general
meeting
Conditional
on
dis-
application
of
pre-
emption
rights
at
general
meeting
36
months***
*Exercise Period is extended to 48 months if outstanding balance on Reprofiling Agreement as at 25 April is
not cleared within 12 months
Type text here
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
20
** Incentive warrants can only be exercised pro rata to how many Kibo shares held by warrant holder at time
they elect to exercise warrants.
***Only exercisable when outstanding balance on Reprofiling Agreement is less than 50% of what it was at 25
April 2023
Conversion of 7% Convertible Loan Note Redeemable instrument to Directors and Management
Subscribers to Kibo’s 7% convertible loan note redeemable instrument converted their Notes to Kibo shares effective
11 April 2023 on balances held as of 28 February 2023. The aggregate amount converted, including principal and
accrued interest was £714,517 which was converted at a deemed price of 0.14p as per the terms of the instrument.
The instrument was originally issued in January 2022 to settle outstanding salaries and fees due to management,
directors and former directors who were the sole subscribers to the notes. The conversions were in accordance with
one of the conditions precedents to the reprofiling of the Kibo Bridge Loan Facility Agreement with an institutional
investor as outlined in the previous section.
Update on Biofuels Test Work
On 2 May 2023, the Company announced that recent verification testing on selected biomass types demonstrate that
the selected biomass types of not only match but significantly outperforms conventional coal in many specification
categories used in industrial boilers. These verification results have shown more favourable outcomes in terms of
specifications compared to previous tests. The outcome of the previous pilot test work indicated that the bio-coal
performed well above expectation over a measured three-day period, not only in terms of its combustion properties
but also in terms of its physical characteristics in the materials-handling process (feeding process and ash removal
into and from the boiler). The results report provided by the boiler manufacturer indicated that bio-coal performed
in line or better than what is expected from conventional coal, with the strategic benefit that it is a carbon-neutral
solution. The positive lab and pilot tests clearly demonstrate the potential viability to replace conventional coal with
solid biofuel from a technical and operational perspective. The latest results are now being fed into the detailed
feasibility studies that are currently underway, to establish the technical and commercial viability to replace coal with
solid biofuel in small- to medium-sized boilers and similar applications.
Update om Mbeya Power Project
On 18 May 2023, the Company announced that the potential to fuel its legacy coal power plant projects with biofuel
is being advanced alongside renewed negotiations on a power purchase agreement with the Tanzanian Government
in relation to the Mbeya Power Project. These negotiations have led to the signing of a renewed Memorandum of
Understanding ('MOU') with Tanzania Electric Supply Company Limited ('TANESCO'), announced on 23 November
2022, in relation to the development of the Mbeya Power Project The renewed MOU is in essence an agreement
between the parties on the process to agree and conclude a power purchase agreement ('PPA') whereby TANESCO
will purchase power with a capacity of 300 MW from Mbeya Power Limited a subsidiary of Kibo. The objective of this
MOU is to establish a general framework of collaboration and cooperation to enable the design, development,
financing, construction, commissioning and operation of the Mbeya Power Project and its associated infrastructure.
The MOU sets out clear guidelines, deliverables and timelines for the conclusion of a PPA and related implementation
agreements. The Project is Kibo's initial flagship energy project based in Tanzania where the Company aims to build
a 300MW steam-powered power station in alignment with the Tanzanian Power System Master Plan (2020). The
renewed MOU provides Kibo with the opportunity to reintroduce the Project into its development plans and
specifically alongside the Company's bio-fuel initiative. Recently (May 2023) the Company announced the
establishment of a Joint Technical Committee with TANESCO to ensure the key milestones, as set out in the MOU, are
met.
Principal Risks and Uncertainties
The realisation of energy assets is dependent on the 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;
•
commercial risk;
•
regulatory risk;
•
operational risk;
•
staffing and key personnel risks;
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
21
•
speculative nature of energy project development;
•
development and construction risk;
•
political stability;
•
uninsurable risks; and
•
foreign investment risks including increases in taxes, royalties and renegotiation of contracts.
Strategic risk
Significant and increasing competition exists for sustainable energy project acquisition opportunities throughout the
world. Because of this competition, the Company may be unable to acquire and develop additional attractive projects
on terms it considers acceptable. Accordingly, there can be no assurance that the Company will acquire any interest
in 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 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 realisation of such opportunities. Factors beyond the
control of the Company may affect the economic feasibility of any projects pursued. Construction costs 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 and speculative activities. 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. The Company’s South African projects are also exposed to comparable regulatory risk in South
Africa.
Operational risk
Renewable energy developments are subject to hazards normally encountered in acquisition, 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.
Staffing and key personnel risks
Recruiting and retaining qualified personnel is critical to the Company’s success. The number of persons skilled 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 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 renewable energy assets is dependent on 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
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
22
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. 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 concept
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 renewable energy projects is dependent upon several factors including the technical skill of the
personnel involved. The commercial viability of a project, once acquired, is also dependent upon a number of factors,
including proximity to infrastructure, energy prices and government regulations, including regulations relating to
allowable production and environmental protection. In addition, several years can elapse from acquisition 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 an 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.
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:
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
23
Ordinary Shares (held directly and indirectly)
28 June 2023
31 December 2022
31 December 2021
Directors & Secretary
Louis Coetzee
219,381,711
19,505,996
19,505,996
Noel O’Keeffe
57,234,904
7,037,047
7,037,047
Ajay Saldanha
-
-
-
Warrants (held directly and indirectly)
28 June 2023
31 December 2022
31 December 2021
Directors & Secretary
Louis Coetzee
158,541,644
-
5,720,000
Noel O’Keeffe
39,816,996
-
1,722,800
Ajay Saldanha
-
-
-
These warrants are part of the Noteholder Warrants (refer Table on page 19) issuable to Louis Coetzee and Noel
O’Keeffe and conditional on approval by shareholders at a Kibo general meeting of a resolution dis-applying pre-
emption rights. On issue, the warrants will be exercisable at a price of 0.132375p for a period of 36 months from the
date of issue conditional on the outstanding balance on Reprofiling Agreement being less than 50% of what it was at
25 April 2023.
For further detail surrounding the ordinary shares, share options and warrants in issue, refer to Notes 17 and 19 of
the annual financial statements.
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 25 to the annual financial statements.
Directors’ meetings
The Company held twenty-four (24) 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 2022 were:
Director Name
Position
Number of
Meetings Attended
Number of
Meetings Eligible to
Attend
Christian Schaffalitzky*
Chairman
19
19
Christiaan Schutte**
Executive Director
24
24
Louis Coetzee
Chief Executive Officer
24
24
Andreas Lianos***
Non-Executive Director
17
20
Noel O’Keeffe
Non-Executive Technical
Director
24
24
Ajay Saldanha ****
Executive Director
0
0
* Retired on 28 October 2022
** Retired on 2 May 2023
***Retired on 15 November 2022
****Appointed on 11 January 2023
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
24
Committee meetings
The Company held two (2) Audit Committee meetings during the reporting period and the number of meetings
attended by each of the members during the year to 31 December 2022 were:
Director Name
Position
Number of
Meetings Attended
Number of
Meetings Eligible to
Attend
Andreas Lianos
Chairman (Non-Executive)
2
2
Christian Schaffalitzky
Non-Executive Director
2
2
Noel O’Keeffe
Non-Executive Director
n/a
n/a
* Retired on 15 November 2022
**Retired on 28 October 2022
***Appointed on 24 January 2023
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 2022 were:
Director Name
Position
Number of
Meetings Attended
Number of
Meetings Eligible to
Attend
Christian Schaffalitzky*
Chairman (Non-Executive)
1
1
Andreas Lianos**
Non-Executive Director
1
1
Ajay Saldanha***
Chairman (Non-Executive)
n/a
n/a
Noel O’Keeffe
Non-Executive Director
n/a
n/a
* Retired on 28 October 2022
**Retired on 11 November 2023
***Appointed on 24 January 2023
****Appointed on 24 January 2023
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 2022 were:
Director Name
Position
Number of
Meetings Attended
Number of
Meetings Eligible to
Attend
Christian Schaffalitzky*
Chairman (Non-executive)
1
1
Noel O’Keeffe
(Non-Executive)
1
1
Ajay Saldanha
(Non-Executive)
n/a
n/a
*Retired on 28 October 2022
**Appointed on 24 January 2023
Significant Shareholders
According to the latest information available to the Company, in addition to the interests of the directors, at 31
December 2022 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 2023
31 December 2022
31 December 2021
Sanderson Capital Partners Ltd
10.28%
12.79%
13.43%
Yakoub Yakoubov
4.07%
5.06%
3.64%
Charlemont Capital Investments
société à responsabilité limitée
-
4.0%
-
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
25
Subsidiary Undertakings
Details of the Company’s subsidiary undertakings are set out in Note 24 to the annual financial statements.
Political Donations
During the period, the Group made no charitable or political contributions (2021 £ 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 ongoing 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 £10,908,524 (2021: £23,148,155);
•
Cash and cash equivalents readily available to the Group in the amount of £163,884 in order to pay its creditors
and maturing liabilities in the amount of £4,192,170 as and when they fall due and meet its operating costs for
the ensuing twelve months (2021: £2,082,906 and £2,198,437 respectively); 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 2022, 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 initiatives of the Group in order to continue development of the underlying
projects of the Group; and
•
Successful completion of a joint venture agreement between MED and an institutional investor to a value of.
£33.6m for which a Heads of Terms has already been agreed.
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
26
Dividends
There have been no dividends declared or paid during the current financial period (2021: £ 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 8.
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.
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
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ REPORT
27
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 is 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'').
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
Louis Coetzee
Noel O’Keeffe
28 June 2023
28 June 2023
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
DIRECTORS’ STATEMENT OF RESPONSIBILITIES
28
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 Company financial statements for each financial year.
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. Under company law the Directors must not approve the Group and Company financial statements
unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position of the Group
and Company and of the Group’s profit or loss for that year. In preparing each of the Group and Company financial
statements, the directors are required to:
•
select suitable accounting policies and then 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 adequate 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
Louis Coetzee
Noel O’Keeffe
28 June 2023
28 June 2023
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
AUDIT COMMITTEE REPORT
29
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 currently comprises Noel O’Keeffe following the retirement of Andreas Lianos (former
Chairman) and Christian Schaffalitzky from the Board in Q4 2022. 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 2022.
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 2021 annual accounts and the interim
accounts to 30 June 2022 and audit planning for the year ended 31 December 2022. 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 2022 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.
___________________________
Noel O’Keeffe
Chairman
Audit Committee
28 June 2023
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Kibo Energy Plc
Report on the Audit of the Consolidated Financial Statements
Qualified 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 2022, 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, except for the possible effects of the matter described in the Basis of Qualified Opinion section of
our report, the accompanying consolidated financial statements:
•
give a true and fair view of the consolidated financial position of the Group as at 31 December 2022 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 2022 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 Qualified Opinion
The Group’s investment in Shankley Biogas Limited, a company acquired under a Share Purchase Agreement
effective on 30 September 2022, is carried in the Company Balance Sheet at cost at £600,000 and the Group
Balance Sheet includes an amount capitalised in Intangible Assets for Project Development Rights of £603,050,
development costs of £939,664 and associated current liabilities of £950,326. The acquisition is also subject to
ongoing disputes between the seller and the Company. We were unable to obtain sufficient appropriate audit
evidence about the carrying value of the Company investment, the Group Intangibles, the Group Development
costs and associated liabilities as at 31 December 2022 because management were unable to provide access to
sufficient and reliable financial information for Shankley Biogas Limited. Consequently, we were unable to
determine whether any adjustments to these amounts were necessary.
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
qualified opinion.
Material uncertainty relating to going concern
We draw attention to the Section headed Going Concern on page 25 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 pages 45 to 46, 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
INDEPENDENT AUDITOR’S REPORT
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.
Materiality for the Group financial statements as a whole was set at £190,000 (2021: £170,000) This was based on
5% of the Group Loss before Exceptional Impairments. Parent company materiality was set at £174,000 (2021:
£170,000) based on 3% 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 (£9,500) (2021: £8,500) 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, Bostwana, 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.
2022 was the first year of significant revenue generation in the Group within the MAST Energy Developments plc
sub-group and this formed an area of focus.
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.
Key audit matter
How the scope of our audit addressed the key audit matter
Carrying value of indefinite life intangibles
Intangible assets with an indefinite life must be
tested for impairment on an annual basis. The
determination of their recoverable amount
requires judgement on the part of management
in both identifying and then valuing the
Our procedures to obtain comfort that the balance of the
indefinite life intangible assets is not materially misstated,
included:
-
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
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
INDEPENDENT AUDITOR’S REPORT
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,
Bordersely,
Shankley/Southport, Hindlip and Stather ) and
South Africa (Sustineri Project). Intangible
assets additions in 2022 amounted to £0.95m,
with impairments of £3.2m recognised during
the year. At 31 December 2022, intangibles
totalled £2.7m (2021: £4.9m).
Certain of the assessments for impairment of
intangibles in the Group are underpinned by
Value in Use calculations of projects, the key
assumptions for which are set out on pages 68
to 73 of the financial statements.
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.
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
exploration
and
development
and
management
intentions on those projects, particularly in light of the
Group’s stated intention to move away from fossil-fuel
projects into Renewables sectors;
-
Considering and challenging management’s impairment
review together with the calculations and basis for the
impairment charge on the MCPP and Bordersley
intangibles and goodwill. This involved reviewing and
challenging the Value in Use calculations (including the
assumptions used) prepared by Management as part of
their review for impairment on the UK assets and
ensuring the accuracy of the disclosures in the financial
statements on the assumptions used.
-
Reviewing whether the accounting policies adopted and
applied by the Group for the exploration and evaluation
assets were consistent 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.
-
As a result of our challenge to management on the value
of the Mbeya project, a material impairment charge was
recognised.
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.
Carrying value of the Associate Undertaking in
Botswana
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. In 2022,
the Group recognised a further impairment of
£3.6M based on assessing the reduced
likelihood of a disposal to potential buyers.
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
current realisable value from a disposal of the
interest is significantly less than estimated in
Our procedures to obtain comfort that the balance of the
associate asset is not materially misstated, included:
-
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 since the carrying value is based on
a proposed disposal;
-
Discussing and challenging management as to the status
of the project’s developments and future planned
exploration
and
development
and
management
intentions on the project, particularly in light of the
Group’s stated intention to move away from fossil-fuel
projects into Renewables sectors;
-
Considering and 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
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
INDEPENDENT AUDITOR’S REPORT
2021 and less than the value in use, and the
previous
carrying
value
and
a
further
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.
relevant financial reporting requirements, in particular
management’s treatment of the MCIPP asset as a non-
current asset.
-
As a result of our challenge to management on the value
of the Mabesekwa interest, a material impairment
charge was recognised in the year.
Our findings
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.
Carrying value of the Company’s Net Investment
in Kibo Cyprus and sub-subsidiaries
The Company has net balance sheet investment
in Kibo Cyprus amounting to £5M after prior
year impairment provisions of £29.4 M and a
further provision of £12.3M in the current year.
The carrying value of Kibo Mining Cyprus is
underpinned by the interests it should in
subsidiaries and related projects in the UK
(MAST
Energy
Developments),
Tanzania
(Mbeya), Botswana (Mabesekwa), Mozambique
(Benga) and South Africa (Sustineri). The
Group has evaluated the underlying assets and
concluded that factors related to impairments
projects in Tanzania and Botswana will also
result in an impairment to the value of £12.3M
to the investment in Kibo Cyprus.
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
associate asset is not materially misstated, included:
-
Obtaining and reviewing documentation supporting the
ownership and rights and obligations assertions in
relation to the investments in Kibo Cyprus and its
subsidiaries;
-
Comparing the carrying value of the Company’s
investment in Kibo Cyprus to the consolidated net asset
position of Kibo Cyprus;
-
Discussing and challenging management as to the status
of each of the entities under Kibo Cyprus and the
associated
projects
along
with
the
projects’
developments and future planned exploration and
development and management intentions on the
project, particularly in light of the Group’s stated
intention to move away from fossil-fuel projects into
Renewables sectors;
-
Considering and challenging management’s impairment
review together with the calculations and basis for the
impairment charge on the investment in Kibo Cyprus;
-
Assessing whether the disclosures in relation to the
valuation of the investment are compliant with the
relevant financial reporting requirements;
-
As a result of our challenge to management on the value
of the investment in Kibo Mining Cyprus, a material
impairment charge was recognised in the year
Our findings
We have obtained sufficient comfort that the Company has
accounted for its investment in the subsidiary in accordance
with applicable standards and with the accounting policies as set
out.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
INDEPENDENT AUDITOR’S REPORT
Accounting for Revenue
In 2022 the Group has significant revenue from
Electricity generation and sale through its
MAST Energy Development plc subsidiary
group.
In accordance with ISA’s Ireland, there is a
rebuttable
assumption
that
revenue
recognition is a significant risk due to fraud.
As this is the first year of revenue generation for
the Group, we have assessed the accuracy of
revenue generation as a significant matter.
Our procedures to obtain comfort that the balance of the
associate asset is not materially misstated, included:
-
We obtained an understanding of the internal control
environment in the entity, including design and
implementation of systems and controls relevant to the
revenue process;
-
We reviewed the accounting policy adopted by
management in relation to the revenue recognition, and
whether it is consistent with IFRS;
-
We reviewed the testing performed by the component
auditor including a review of the Power Purchase
Agreement and self-billing invoices provided by the
vendor, confirming the terms of engagement had been
followed appropriately;
-
We reviewed correspondence and minutes of meetings
with management.
Our findings
Control deficiencies were identified from the testing performed.
No formal meter readings were completed and compared to
invoiced readings on a monthly basis during the year under
audit. In addition, no verification of electricity prices to third
party data was done, although a high level margin check was
carried out as a mitigating factor. No material misstatements
were identified in the current year and we are satisfied that the
revenue recognised is complete and accurate.
We refer to the Basis of Qualified Opinion section of our Report wherein we have set out a matter giving rise to a
modified opinion. We also refer to the Material uncertainty relating to going concern section of our report. Both
these matters are Key Audit Matters but have been reported on individually in the respective sections of our report,
in accordance with ISA 701.
Other information
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
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 28, 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.
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;
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
INDEPENDENT AUDITOR’S REPORT
•
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.
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.
_________________________________________
for and on behalf of
Crowe Ireland
Chartered Accountants and Statutory Audit Firm
40 Mespil Road
Dublin 4
Date: 28 June 2023
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
37
All figures are stated in Sterling
31 December
2022
31 December
2021
Audited
Audited
Notes
£
£
Revenue
2
1,036,743
3,245
Cost of sales
(778,802)
(34,321)
Gross profit/(loss)
257,941
(31,076)
Administrative expenses
(2,579,028)
(2,325,750)
Impairment of non-current assets
11, 12 &
14
(7,038,930)
(20,705,209)
Listing and capital raising fees
(363,368)
(321,365)
Project and exploration expenditure
(847,567)
(687,963)
Operating loss
(10,570,952)
(24,071,363)
Investment and other income
3
93,866
1,017,937
Share of loss from associate
(181,684)
(48,357)
Finance costs
4
(249,754)
(46,372)
Loss before tax
5
(10,908,524)
(23,148,155)
Taxation
8
-
-
Loss for the period
(10,908,524)
(23,148,155)
Other comprehensive loss:
Items that may be classified subsequently to profit or loss:
Exchange differences on translation of foreign operations
372,191
(212,919)
Exchange differences reclassified on disposal of foreign operation
-
345,217
Other Comprehensive loss for the period net of tax
372,191
132,298
Total comprehensive loss for the period
(10,536,333)
(23,015,857)
Loss for the period
(10,908,524)
(23,148,155)
Attributable to the owners of the parent
(9,776,917)
(21,996,968)
Attributable to the non-controlling interest
(1,131,607)
(1,151,187)
Total comprehensive loss for the period
(10,536,333)
(23,015,857)
Attributable to the owners of the parent
(9,404,726)
(21,864,515)
Attributable to the non-controlling interest
(1,131,607)
(1,151,342)
Loss Per Share
Basic loss per share
9
(0.003)
(0.009)
Diluted loss per share
9
(0.003)
(0.009)
All activities derive from continuing operations.
The accompanying notes on pages 58-92 form an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 28 June 2023 and
signed on its behalf by:
On behalf of the Board
________________________
________________________
Louis Coetzee
Noel.O’Keeffe
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
38
All figures are stated in Sterling
31 December
2022
31 December
2021
Audited
Audited
Notes
£
£
Assets
Non-current assets
Property, plant and equipment
10
3,493,998
2,899,759
Intangible assets
11
2,691,893
4,964,550
Investments in associates
12
100,945
4,092,403
Total non-current assets
6,286,836
11,956,712
Current assets
Other receivables
15
227,223
255,747
Cash and cash equivalents
16
163,884
2,082,906
Total current assets
391,107
2,338,653
Total assets
6,677,943
14,295,365
Equity and liabilities
Equity
Called up share capital
17
21,140,481
21,042,444
Share premium account
17
45,516,081
45,429,328
Share based payments reserve
19
73,469
466,868
Translation reserves
20
(93,993)
(466,184)
Retained deficit
(66,319,142)
(56,627,389)
Attributable to equity holders of the parent
316,896
9,845,067
Non-controlling interest
21
1,164,218
1,962,816
Total equity
1,481,114
11,807,883
Liabilities
Non-current liabilities
Lease liability
10
346,674
289,045
Other financial liabilities
23
243,056
-
Total non-current liabilities
589,730
289,045
Current liabilities
Lease liability
10
3,980
2,473
Trade and other payables
22
2,395,090
1,116,273
Borrowings
23
1,195,239
1,079,691
Other financial liabilities
23
1,012,790
-
Total current liabilities
4,607,099
2,198,437
Total liabilities
5,196,829
2,487,482
Total equity and liabilities
6,677,943
14,295,365
The accompanying notes on pages 58-92 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 28 June 2023 and signed on its behalf by:
On behalf of the Board
_____________________________
________________________
Louis Coetzee
Noel O’Keeffe
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
39
All figures are stated in Sterling
31 December
2022
31 December
2021
Audited
Audited
Notes
£
£
Revenue
-
-
Administrative expenses
(804,820)
(315,666)
Listing and capital raising fees
(230,920)
(39,583)
Impairment of subsidiary investments
(12,333,224)
(29,379,842)
Fair value adjustment
(427,819)
(1,635,881)
Operating loss
(13,796,783)
(31,370,972)
Other income
3
16,266
135,709
Finance costs
4
(151,375)
-
Loss before tax
5
(13,931,892)
(31,235,263)
Taxation
-
-
Loss for the period
(13,931,892)
(31,235,263)
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 58-92 form an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 28 June 2023 and
signed on its behalf by:
On behalf of the Board
________________________
________________________
Louis Coetzee
Noel.O’Keeffe
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
COMPANY STATEMENT OF FINANCIAL POSITION
40
All figures are stated in Sterling
31 December
2022
31 December
2021
Audited
Audited
Notes
£
£
Non-current Assets
Investments
24
5,688,607
16,762,761
Property, plant and equipment
10
1,265
Total non-current assets
5,689,872
16,762,761
Current assets
Other receivables
15
90,720
73,734
Cash and cash equivalents
16
19,442
239,674
Total current assets
110,162
313,408
Total assets
5,800,034
17,076,169
Equity and liabilities
Equity
Called up share capital
17
21,140,481
21,042,444
Share premium account
17
45,516,081
45,429,328
Share based payment reserve
19
73,469
466,868
Retained deficit
(63,609,256)
(50,095,537)
Total equity
3,120,775
16,843,103
Liabilities
Current liabilities
Trade and other payables
22
826,035
114,062
Borrowings
23
1,195,239
119,004
Other financial liabilities
23
657,985
-
Total current liabilities
2,679,259
233,066
Total liabilities
2,679,259
233,066
Total equity and liabilities
5,800,034
17,076,169
The accompanying notes on pages 58-92 form integral part of these financial statements.
The financial statements were approved by the Board of Directors on 28 June 2023 and signed on its behalf by:
On behalf of the Board
______________________________
________________________
Louis Coetzee
Noel O’Keeffe
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
41
Share
Capital
Share
premium
Warrants and
share based
payment
reserve
Control
reserve
Foreign
currency
translation
reserve
Retained deficit Non-controlling
interest
Total equity
All figures are stated in Sterling
£
£
£
£
£
£
£
£
Balance as at 1 January 2021
20,411,493
44,312,371
1,728,487
(18,329)
(598,637)
(39,019,856)
(256,841)
26,558,688
Loss for the year
-
-
-
-
-
(21,996,968)
(1,151,187)
(23,148,155)
Other comprehensive income – exchange differences
-
-
-
-
(212,764)
-
(155)
(212,919)
Shares issued
630,951
1,116,957
-
-
-
-
-
1,747,908
Disposal of subsidiary
-
-
-
-
-
3,259,232
3,201,014
6,460,246
Acquisition of non-controlling interest
-
-
-
-
-
(308,030)
308,030
-
Vesting of share options – Katoro Gold PLC
-
-
146,249
-
-
-
-
146,249
Warrants issued by Kibo Energy PLC
-
-
48,695
-
-
-
-
48,695
Warrants issued by Kibo Energy plc which expired during the year
-
-
(559,400)
-
-
559,400
-
-
Change in shareholding without loss of control
-
-
(897,163)
18,329
345,217
878,833
(138,045)
207,171
Balance as at 31 December 2021
21,042,444
45,429,328
466,868
-
(466,184)
(56,627,389)
1,962,816
11,807,883
Loss for the year
-
-
-
-
-
(9,776,917)
(1,131,607)
(10,908,524)
Other comprehensive income - exchange differences
-
-
-
-
372,191
-
-
372,191
Change in shareholding without loss of control
(333,009)
333,009
-
Shares issued
98,037
86,753
-
-
-
-
184,790
Warrants issued by Kibo Energy PLC during the year
-
-
24,774
-
-
-
-
24,774
Warrants issued by Kibo Energy PLC which expired during the year
-
-
(418,173)
-
-
418,173
-
-
Balance as at 31 December 2022
21,140,481
45,516,081
73,469
-
(93,993)
(66,319,142)
1,164,218
1,481,114
Notes
17
17
19
18
20
21
The notes on pages 58-92 form part of the financial statements.
The financial statements were approved by the Board of Directors on 28 June 2023 and signed on its behalf by:
On behalf of the Board
________________________________
________________________
Louis Coetzee
Noel O’Keeffe
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
COMPANY STATEMENT OF CHANGES IN EQUITY
42
Share capital
Share premium Share based
payment
reserve
Retained deficit Total equity
All figures are stated in Sterling
£
£
£
£
£
Balance as at 1 January 2021
20,411,493
44,312,371
977,575
(19,419,674)
46,281,765
Profit the year
-
-
-
(31,235,263)
(31,235,263)
Shares issued
630,951
1,116,957
-
-
1,747,908
Shares issued to pay deferred vendor liability
-
-
48,693
-
48,693
-
-
(559,400)
559,400
-
Balance as at 31 December 2021
21,042,444
45,429,328
466,868
(50,095,537)
16,843,103
Loss for the year
-
-
-
(13,931,892)
(13,931,892)
Shares issued
98,037
86,753
-
-
184,790
Warrants issued by Kibo Energy PLC during the year
-
-
24,774
-
24,774
Warrants issued by Kibo Energy PLC which expired during the year
-
-
(418,173)
418,173
-
Balance as at 31 December 2022
21,140,481
45,516,081
73,469
(63,609,256)
3,120,775
Notes
17
17
19
The accompanying notes on pages 58-92 form an integral part of these financial statements.
The financial statements were approved by the Board of Directors on 28 June 2023 and signed on its behalf by:
On behalf of the Board
_____________________________
________________________
Louis Coetzee
Noel O’Keeffe
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
43
All figures are stated in Sterling
31 December
2022
31 December
2021
Audited
Audited
Notes
£
£
Cash flows from operating activities
Loss for the period before taxation
(10,908,524)
(23,148,155)
Adjustments for:
(Profit)/Loss from the disposal of subsidiary
-
(529,415)
Interest accrued
248,202
46,357
Debt forgiven
3
-
(355,659)
Warrants and options issued
24,774
194,945
Impairment of goodwill
14
-
300,000
Impairment of intangible assets
11
3,229,155
13,955,528
Impairment of associates
12
3,809,775
6,449,681
Loss from equity accounted associate
181,684
48,357
Exploration and development expenditure on a Joint Operation
-
91,179
Impairment of financial asset receivable
-
43,722
Depreciation on property, plant and equipment
10
66,582
10,635
Profit on sale of property, plant and equipment
(7,264)
-
Gains on revaluations of derivatives
(86,558)
-
Costs settled through the issue of shares
95,001
-
Directors’ fees settled with credit loan notes
44,591
-
Other non-cashflow items
133
-
(3,302,449)
(2,892,825)
Movement in working capital
Decrease / (Increase) in debtors
15
28,524
(145,525)
Increase / (Decrease) in creditors
22
678,817
(240,958)
707,341
(386,483)
Net cash outflows from operating activities
(2,595,108)
(3,279,308)
Cash flows from financing activities
Proceeds of issue of share capital
-
1,527,576
Proceeds from disposal of shares to non-controlling interest
-
6,099,500
Repayment of lease liabilities
(27,000)
(27,000)
Repayment of borrowings
(44,917)
(195,282)
Proceeds from borrowings
2,322,824
38,975
Net cash proceeds from financing activities
2,250,907
7,443,769
Cash flows from investing activities
Cash received from /(advanced) to Joint Venture
20,955
(91,179)
Property, plant and equipment acquired (excluding right of use assets)
(1,020,747)
(1,654,239)
Intangible assets acquired
(342,038)
(150,273)
Cash forfeited on disposal of subsidiary
-
(272,075)
Deferred payment settlement
(555,535)
-
Net cash flows from investing activities
(1,897,365)
(2,167,766)
Net (decrease) / increase in cash
(2,241,566)
1,996,695
Cash at beginning of period
2,082,906
256,760
Exchange movement
322,544
(170,549)
Cash at end of the period
16
163,884
2,082,906
The accompanying notes pages 58-92 form an integral part of these financial statements.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
COMPANY STATEMENT OF CASH FLOWS
44
All figures are stated in Sterling
31 December
2022
31 December
2021
Audited
Audited
Notes
£
£
Cash flows from operating activities
(Loss) for the period before taxation
Adjusted for:
(13,931,892)
(31,235,263)
Inter-company sales capitalised
-
(61,000)
Fair value adjustment
406,863
1,635,881
Warrants and options issued
24,774
48,693
Interest accrued
151,377
-
Non-cash recoveries of expenses
-
(114,253)
Impairment of investment in subsidiaries
12,354,180
29,379,842
Expenses settled in shares
95,001
-
Directors’ fees settled with credit loan notes
44,591
-
Other non-cash items
134
-
(854,972)
(346,100)
Movement in working capital
(Increase) / Decrease in debtors
15
(16,986)
(40,314)
Increase / (Decrease) in creditors
22
111,973
(104,815)
94,987
(145,129)
Net cash outflows from operating activities
(759,985)
(491,229)
Cash flows from financing activities
Proceeds of issue of share capital
17
-
1,497,176
Proceeds from borrowings
23
1,672,824
-
Repayment of borrowings
(44,917)
(50,007)
Net cash proceeds from financing activities
1,627,907
1,447,169
Cash flows from investing activities
Cash advances to Group Companies
(1,086,889)
(858,054)
Purchase of Property, Plant and Equipment
10
(1,265)
-
Net cash used in investing activities
(1,088,154)
(858,054)
Net (decrease)/increase in cash
(220,232)
97,886
Cash at beginning of period
239,674
141,788
Cash at end of the period
16
19,442
239,674
The accompanying notes on pages 58-92 form an integral part of these financial statements.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
45
General Information
Kibo Energy PLC (“the Company”) is a Company incorporated in Ireland at registered office 17 Pembroke Street Upper
Dublin 2, 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 2022.
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 less accumulated impairments,
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 ongoing 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 £10,908,524 (2021: £23,148,155);
•
Cash and cash equivalents readily available to the Group in the amount of £163,884 in order to pay its creditors
and maturing liabilities in the amount of £4,192,170 as and when they fall due and meet its operating costs for
the ensuing twelve months (2021: £2,082,906 and £2,198,437 respectively); 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 2022, these conditions, together with those mentioned above are considered to
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
46
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 as well as
insufficient revenue generated to cover overhead costs. 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 initiatives of the Group in order to continue development of the underlying
projects of the Group; and
•
Successful completion of a joint venture agreement between MED and an institutional investor to a value of.
£33.6m for which a Heads of Terms has already been agreed.
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
47
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 19 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
48
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 £847,529 would have been
capitalised in the current year (2021: £687,963).
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 CEOs 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”) remained 20.88% as at 31 December
2022 (2021: 20.88%). Katoro Gold PLC is recognised as an associate and is 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 2022 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
The Group in the preceding financial year announced its 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 2022.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
49
Consolidation
The consolidated annual financial statements comprise the financial statements of Kibo and its subsidiaries for the
year ended 31 December 2022 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
50
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 11. 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
51
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 are 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
52
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:
•
Land is not depreciated;
•
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
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
53
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
54
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
55
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
Financial assets at amortised cost
Trade and other receivables
Financial assets at amortised cost
Cash and Cash Equivalents
Financial assets at amortised cost
Investment in listed entities
Financial assets at fair value through profit or loss
Financial liabilities
Classification
Trade and other payables
Financial liabilities at amortised cost
Borrowings
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
56
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
57
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.
Revenue from contracts with customers
The Group and Company recognise revenue from the following major source:
•
Provision of produced electricity generated from peaker power plants.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the
revenue can be reliably measured. The transaction price is the amount of consideration to which the expects to be
entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf
of third parties and is variable.
The revenue is generated upon consumption by the customer and is recognised at a point in time based on the variable
consumption for the specific period for which the revenue is recognised.
Customers are invoiced on a monthly basis and consideration is payable when invoiced.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
58
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.
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.
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.
1 January 2023
IAS 12 amendments on deferred tax
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.
1 January 2023
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
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
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 but may result in reduced disclosure requirements.
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
59
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.
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:
2022 Group
Bordersley
Power
Mabasekwa
Coal to
Power
Mbeya Coal
Pyebridge
Power
Rochdale
Power
Sustineri
Energy
Corporate
31 December
2022 (£)
Group
Revenue
-
-
-
1,036,743
-
-
-
1,036,743
Cost of sales
-
-
-
(778,802)
-
-
-
(778,802)
Administrative and other cost
(46,064)
(7,065)
(7,186)
(52,809)
(10,763)
(1,766)
(2,453,375)
(2,579,028)
Impairments and fair value
adjustments
(1,288,578)
(3,563,639)
(1,940,577)
-
-
-
(246,136)
(7,038,930)
Listing and Capital raising
fees
-
-
-
-
-
-
(363,368)
(363,368)
Project and exploration
expenditure
(222,296)
-
-
(255,601)
(104,090)
(108,912)
(156,668)
(847,567)
Share in loss of associate
-
-
-
-
-
-
(181,684)
(181,684)
Investment and other income
-
-
-
-
-
10
93,856
93,866
Finance costs
(24,537)
-
-
-
-
-
(225,217)
(249,754)
Loss before tax
(1,581,475)
(3,570,704)
(1,947,763)
(50,469)
(114,853)
(110,668)
(3,532,592)
(10,908,524)
2021 Group
Benga
Power J. V
Blyvoor
Joint
Venture
Bordersley
Power
Haneti
Lake
Victoria
Gold
Mabesekwa
Coal to
Power
Mbeya Coal to
Power
Pyebridge
Power
Rochdale
Power
Sustineri
Energy
Corporate
31 December
2021 (£)
Group
Revenue
-
-
-
-
-
-
-
3,245
-
-
-
3,245
Cost of sales
-
-
-
-
-
-
-
(34,321)
-
-
-
(34,321)
Administrative and other cost
(26,682)
(16,799)
(332,550)
(82,504)
(141,098)
(13,944)
(43,967)
(13,448)
(4,641)
(1,097)
(1,649,020)
(2,325,750)
Impairments and fair value
adjustments
-
-
(300,000)
-
-
(6,132,711)
(13,955,528)
-
-
-
(316,970)
(20,705,209)
Listing and Capital raising
fees
-
-
-
-
-
-
-
-
-
-
(321,365)
(321,365)
Project and exploration
expenditure
(74,337)
(126,173)
(24,878)
(119,101)
-
-
(100,165)
(44,004)
(11,265)
(94,207)
(93,833)
(687,963)
Investment and other income
787
5,134
355,659
-
16,505
-
48,298
-
-
-
591,554
1,017,937
Loss before tax
(100,232)
(137,838)
(301,769)
(201,605)
(124,593)
(6,146,655)
(14,051,362)
(88,528)
(15,906)
(95,304)
(1,884,363)
(23,148,155)
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
60
2022 Group
Bordersley
Power
Mabasekwa
Coal to
Power
MbeyaCoal
to Power
Pyebridge
Power
Rochdale
Power
Sustineri
Energy
Corporate
31 December
2022 (£)
Group
Assets
Segment assets
1,733,554
235
-
2,082,352
262,043
293,160
2,306,599
6,677,943
Liabilities
Segment liabilities
296,984
7,270
2,320
133,650
6,897
48,491
4,701,217
5,196,829
2021 Group
Benga Power
J. V
Bordersley
Power
Mabesekwa
Coal to
Power
Mbeya Coal
to Power
Pyebridge
Power
Rochdale
Power
Sustineri
Energy
Corporate
31 December
2021 (£)
Group
Assets
Segment assets
14,219
3,085,261
3,405,354
1,944,925
2,491,666
261,454
278,985
2,813,501
14,295,365
Liabilities
Segment liabilities
10,065
394,588
5,577
52,379
70,847
5,570
18,976
1,929,480
2,487,482
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
South
Africa
United
Kingdom
Ireland
31 December
2022 (£)
Carrying value of segmented assets
-
-
218,735
293,160
5,564,783
601,265
6,677,943
Revenue
-
-
-
-
1,036,743
-
1,036,743
Loss before tax
(1,947,763)
(3,563,639)
(1,517,557)
(110,843)
(2,732,982)
(1,035,740)
(10,908,524)
Tanzania
Botswana
Cyprus
South
Africa
United
Kingdom
Ireland
31 December
2021 (£)
Carrying value of segmented assets
1,944,925
3,405,354
188,879
283,831
7,630,489
841,887
14,295,365
Revenue
-
-
-
-
3,245
-
3,245
Profit/ Loss after tax
(14,211,842)
(6,143,283)
(1,008,539)
(218,316)
(1,827,534)
261,359
(23,148,155)
All revenue generated was from the United Kingdom geographical area with the only customer being Statkraft Markets GMBH.
KIBO ENERGY PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
61
2. Revenue
Revenue comprised ancillary electricity sales from operational testing of the renewable energy operations of MAST
Energy Developments PLC in the United Kingdom.
3. Investment and other Income
31 December
2022
(£)
Group
31 December
2021
(£)
Group
31 December
2022
(£)
Company
31 December
2021
(£)
Company
Debt forgiven
-
355,659
-
-
Interest received
44
-
34
-
Gain on revaluation of derivative
liabilities
86,558
-
-
-
Profit on the loss of control over
subsidiary
-
529,415
-
-
Profit on sale of plant and equipment
7,264
-
-
-
Recoveries
-
-
16,232
61,000
Other income
-
132,863
-
74,709
93,866
1,017,937
16,266
135,709
During the financial year the Group recorded other income resulting from the revaluation of derivative liabilities.
These liabilities were recognised as part of convertible loan notes entered into during the financial year. The
derivative liability was fair valued at year end and resulted in a gain for the financial year.
4. Finance costs
31 December
2022
(£)
Group
31 December
2021
(£)
Group
31 December
2022
(£)
Company
31 December
2021
(£)
Company
Interest paid to finance houses
223,623
21,647
151,375
-
Interest from leases (refer note 10)
26,131
24,725
-
-
249,754
46,372
151,375
-
31 December
2022 (£)
Group
31 December
2021 (£)
Group
Electricity sales
1,036,743
3,245
1,036,743
3,245
KIBO ENERGY PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
62
5. Loss on ordinary activities before taxation
Operating loss is stated after
the
following
key
transactions:
31 December
2022 (£)
Group
31 December
2021 (£)
Group
31 December
2022 (£)
Company
31 December
2021 (£)
Company
Depreciation of property, plant
and equipment
66,582
10,635
-
-
Impairment of other financial
assets – receivable from Lake
Victoria Gold
-
16,240
-
-
Group auditors’ remuneration
for
audit
of
financial
statements
58,425
45,000
58,425
-
Subsidiaries
auditors’
remuneration for audit of the
financial statements
172,767
155,094
-
-
Impairment of goodwill
-
300,000
-
-
Impairment
of
intangible
assets
3,229,155
13,955,528
-
-
Impairment of associates
3,809,774
6,449,682
-
-
Impairment
of
subsidiary
investments
-
-
12,354,180
29,379,842
Fair value adjustments
-
-
406,863
1,635,881
Gains
on
revaluations
of
derivatives
(86,558)
-
-
-
Profit on sale of assets
(7,264)
-
-
-
6. Staff costs (including Directors)
Group
31 December
2022 (£)
Group
31 December
2021 (£)
Company
31 December
2022 (£)
Company
31 December
2021 (£)
Wages and salaries
949,355
898,145
28,297
27,415
Share based remuneration
-
146,250
-
949,355
1,044,395
28,297
27,415
The average monthly number of employees (including executive Directors) during the period was as follows:
Group
31 December
2022
Group
31 December
2021
Company
31 December
2022
Company
31 December
2021
Exploration and development activities
10
10
1
1
Administration
7
7
1
1
17
17
2
2
KIBO ENERGY PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
63
7. Directors’ emoluments
Group
31 December
2022 (£)
Group
31 December
2021 (£)
Company
31 December
2022 (£)
Company
31 December
2021 (£)
Basic salary and fees accrued
374,308
397,262
24,366
27,415
Share based payments
-
-
-
-
374,308
397,262
24,366
27,415
The emoluments of the Chairman were £ 55,950 (2021: £ 47,578). The emoluments of the highest paid director were
£164,726 (2021: £129,347).
Directors received shares in the value of £Nil during the year (2021: £Nil) and warrants to the value of £Nil (2021:
£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 2022
Salary and
fees
accrued
£
Salary and
fees settled
in shares
£
Warrants
issued
£
Total
£
Christian Schaffalitzky
16,990
-
-
16,990
Louis Coetzee
164,726
-
-
164,726
Noel O’Keeffe
38,135
-
-
38,135
Andreas Lianos
31,274
-
-
31,274
Christiaan Schutte
123,183
-
-
123,183
Total
374,308
-
-
374,308
31 December 2021
Salary and
fees
accrued
£
Salary and
fees settled
in shares
£
Warrants
issued
£
Total
£
Christian Schaffalitzky
20,578
-
-
20,578
Louis Coetzee
165,347
-
-
165,347
Noel O’Keeffe
38,319
-
-
38,319
Lukas Maree
7,349
-
-
7,349
Wenzel Kerremans
7,349
-
-
7,349
Andreas Lianos
36,050
-
-
36,050
Christiaan Schutte
122,270
-
-
122,270
Total
397,262
-
-
397,262
As at 31 December 2022, an amount of £174,482 (2021: £443,336) was due and payable to Directors for services
rendered not yet settled.
KIBO ENERGY PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
64
8. Taxation
Current tax
31 December
2022 (£)
31 December
2021 (£)
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:
2022 (£)
2021 (£)
Loss on ordinary activities before tax
(10,908,524)
(23,148,155)
Income tax expense calculated at blended rate of 13.18% (2021: 18.86%)
(1,437,917)
(4,365,742)
Income which is not taxable
(4,615)
(100,589)
Expenses which are not deductible
913,814
3,959,520
Losses available for carry forward
528,718
506,811
Income tax expense recognised in the Statement of Profit or Loss
-
-
The effective tax rate used for the December 2022 and December 2021 reconciliations above is the corporate rate of
14.15% and 18.86% payable by corporate entities on taxable profits under tax law in that jurisdiction respectively.
The tax jurisdictions in which the Group operates are Cyprus, Ireland, South Africa, Tanzania and the United Kingdom.
No provision has been made for the 2022 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 £41,896,825
(2021: £38,201,734) available for potential offset against future profits which equates to an estimated potential
deferred tax asset of £5,779,065 (2021: £5,076,208). 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.
9. Loss per share
Basic loss per share
The basic loss and weighted average number of ordinary shares used for calculation purposes comprise the following:
Basic Loss per share
31 December
2022(£)
31 December
2021 (£)
Loss for the period attributable to equity holders of the parent
(9,776,917)
(21,996,968)
Weighted average number of ordinary shares for the purposes of basic
loss per share
3,010,992,501
2,480,279,189
Basic loss per ordinary share (GBP)
(0.003)
(0.009)
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
65
10. Property, plant and equipment
GROUP
Land
Furniture and
Fittings
Motor Vehicles
Office
Equipment
I.T Equipment
Plant &
Machinery
Right of use
assets
Total
Cost
(£)
(£)
(£)
(£)
(£)
(£)
(£)
(£)
Opening Cost as at 1 January 2021
-
2,436
16,131
4,970
4,989
8,601
-
37,127
Disposals
-
-
-
-
-
-
-
-
Additions
602,500
-
-
-
509
2,011,409
293,793
2,908,211
Exchange movements
-
29
192
(28)
(108)
102
-
187
Closing Cost as at 31 December 2021
602,500
2,465
16,323
4,942
5,390
2,020,112
293,793
2,945,525
Disposals
-
(2,465)
-
(3,383)
(3,193)
(5,642)
-
(14,683)
Additions
-
-
-
-
6,031
75,061
62,090
143,182
Assets under development
-
-
-
-
-
939,664
-
939,664
Derecognition as a result of waiver
-
-
-
-
-
(421,041)
-
(421,041)
Exchange movement
-
-
-
-
-
2,695
-
2,695
Closing Cost as at 31 December 2022
602,500
-
16,323
1,559
8,228
2,610,849
355,883
3,595,342
Land
Furniture and
Fittings
Motor Vehicles
Office
Equipment
I.T Equipment
Plant &
Machinery
Right of use
assets
Total
Accumulated Depreciation (“Acc Depr”)
(£)
(£)
(£)
(£)
(£)
(£)
(£)
(£)
Acc Depr as at 1 January 2021
-
(2,436)
(15,285)
(4,398)
(4,289)
(8,601)
-
(35,009)
Disposals
-
-
-
-
-
-
-
-
Depreciation
-
-
(842)
-
-
-
(9,793)
(10,635)
Exchange movements
-
(29)
(196)
(9)
215
(103)
-
(122)
Acc Depr as at 31 December 2021
-
(2,465)
(16,323)
(4,407)
(4,074)
(8,704)
(9,793)
(45,766)
Disposals
-
2,465
-
3,383
3,193
1,974
-
11,015
Depreciation
-
(1,385)
(52,632)
(12,565)
(66,582)
Exchange movements
-
-
-
-
-
(11)
-
(11)
Acc Depr as at 31 December 2022
-
-
(16,323)
(1,024)
(2,266)
(59,373)
(22,358)
(101,344)
Land
Furniture and
Fittings
Motor Vehicles
Office
Equipment
I.T Equipment
Plant &
Machinery
Right of use
assets
Total
Carrying Value
(£)
(£)
(£)
(£)
(£)
(£)
(£)
(£)
Carrying value as at 31 December 2021
602,500
-
-
535
1,316
2,011,408
284,000
2,899,759
Carrying value as at 31 December 2022
602,500
-
-
535
5,962
2,551,476
333,525
3,493,998
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
66
COMPANY
Land
Furniture and
Fittings
Motor Vehicles
Office
Equipment
I.T Equipment
Plant &
Machinery
Right of use
assets
Total
Cost
(£)
(£)
(£)
(£)
(£)
(£)
(£)
(£)
Opening Cost as at 1 January 2021
-
-
-
-
-
-
-
-
Closing Cost as at 31 December 2021
-
-
-
-
-
-
-
-
Additions
-
-
-
-
1,265
-
-
1,265
Closing Cost as at 31 December 2022
-
-
-
-
1,265
-
-
1,265
Land
Furniture and
Fittings
Motor Vehicles
Office
Equipment
I.T Equipment
Plant &
Machinery
Right of use
assets
Total
Accumulated Depreciation (“Acc Depr”)
(£)
(£)
(£)
(£)
(£)
(£)
(£)
(£)
Acc Depr as at 1 January 2021
-
-
-
-
-
-
-
-
Acc Depr as at 31 December 2021
-
-
-
-
-
-
-
-
Acc Depr as at 31 December 2022
-
-
-
-
-
-
-
-
Land
Furniture and
Fittings
Motor Vehicles
Office
Equipment
I.T Equipment
Plant &
Machinery
Right of use
assets
Total
Carrying Value
(£)
(£)
(£)
(£)
(£)
(£)
(£)
(£)
Carrying value as at 31 December 2021
-
-
-
-
-
-
-
-
Carrying value as at 31 December 2022
-
-
-
-
1,265
-
-
1,265
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
67
Right of use asset
The Group has one lease contract for land it shall utilise to construct a 5MW gas-fuelled power generation plant. The
land is located at Bordesley, Liverpool St. Birmingham.
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
borrowing rate ranges between 8.44% and 10.38%.
The Group has valued its property, plant and equipment in line with its directors’ estimation of the Value in Use for
those assets. Kindly refer to note 11 for the key variables used in the estimation of the value thereof.
Right of use asset
31 December
2022
(£)
Group
31 December
2021
(£)
Group
Set out below are the carrying amounts of right-of-use assets
recognised and the movements during the period:
Opening balance
284,000
-
Additions
62,090
293,793
Depreciation
(12,565)
(9,793)
Closing balance
333,525
284,000
Lease liability
Set out below are the carrying amounts of lease liabilities and the
movements during the period:
Opening balance
291,518
-
Additions
60,005
293,793
Interest
26,131
24,725
Repayment
(27,000)
(27,000)
Closing balance
350,654
291,518
Spilt of lease liability between current and non-current portions:
Non-current
346,674
289,045
Current
3,980
2,473
Total
350,654
291,518
Future minimum lease payments fall due as follows
- within 1 year
33,960
27,000
- later than 1 year but within 5 years
135,840
108,000
- later than 5 years
756,720
648,000
Subtotal
926,520
783,000
- Unearned future finance charges
(575,866)
(491,482)
Closing balance
350,654
291,518
A 100bp change in the Incremental Borrowing Rate (“IBR”), would result in a £29,603 change in the Right of Use Asset,
and corresponding Lease Liability on inception date.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
68
11. 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:
ADV001
Hindlip
Lane (£)
ARL018
Stather
Road (£)
Bordersley
Power (£)
Mbeya Coal
to Power
Project (£)
Rochdale
Power
(£)
Shankley
Biogas (£)
Sustineri
Energy
(£)
Total (£)
Carrying value at 1 January 2021
-
-
2,595,000
15,896,105
-
-
-
18,491,105
Impairments
-
-
-
(13,955,528)
-
-
-
(13,955,528)
Acquisition of Rochdale Power
-
-
-
-
150,273
-
-
150,273
Acquisition of Sustineri Energy
-
-
-
-
-
-
278,700
278,700
Carrying value at 1 January 2022
-
-
2,595,000
1,940,577
150,273
-
278,700
4,964,550
Impairments
-
-
(1,288,578)
(1,940,577)
-
-
-
(3,229,155)
Acquisition of ARL018 Stather Road
-
91,482
-
-
-
-
-
91,482
Acquisition of ADV001 Hindlip Lane
247,506
-
-
-
-
-
-
247,506
Acquisition of Shankley Biogas Ltd
-
-
-
-
-
603,050
-
603,050
Exchange movements
-
-
-
-
-
-
14,460
14,460
Carrying value at 31 December 2022
247,506
91,482
1,306,422
-
150,273
603,050
293,160
2,691,893
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
69
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 commences,
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, 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 the Group should test an intangible asset for
impairment:
•
the period for which the Group 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.
The valuation techniques applicable to the valuation of the above mentioned 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
70
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 and inviting the Group 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
Status of the Term Sheet
The initial Term Sheet signed with interested parties for the Mbeya Coal Ltd Mining Licenses is no longer valid. After
conducting due diligence, the interested parties discovered several factors that contribute to the reduced commercial
attractiveness and feasibility of the project. These factors include the low quality of the coal and the significant
challenges posed by its grade and associated market related price, as well as the remote location of the mining site
(1000 km from Dar es Salaam or 600 km from Mtwara). The absence of bulk coal handling facilities at nearby ports
and the high indicative transportation costs further undermines the project's viability. Without a nearby off-taker, it
is no longer feasible to design, construct, and operate a mid-sized coal mine on the indicative Mbeya mining site.
The project's original intention was to exclusively supply coal to the mine-mouth power station. However, Mbeya
Power Ltd, the sister company of MCPP (Mbeya Coal Power Project), has made the decision to align with its parent
company, Kibo Energy PLC, and not pursue coal-fired steam power. As a result, there is no longer a need to supply
coal exclusively to the power station.
In conclusion, the abandonment of coal-fired steam power by Mbeya Power Ltd, along with the low-quality coal,
remote location, lack of infrastructure, high transportation costs, and unattractive coal price, has rendered the Mbeya
Coal Ltd Mining Licenses commercially unviable and infeasible.
Status of the Mining Licenses (Mining Licences Numbers ML 655-ML 661)
Mbeya Coal Ltd is a Tanzanian registered mining and exploration company that was actively involved in the
development of a 300MW integrated coal-to-power project, aligned with the Tanzania Power System Master Plan. As
part of the Mbeya Coal to Power Project (MCPP), Mbeya Coal Ltd holds a portfolio of Coal Prospecting Licences that
led to the application and granting of the seven above mentioned Mining Licenses. The coal mine intended for this
project serves as the sole fuel source for the 300MW power plant. Kibo Energy PLC, in collaboration with TANESCO,
has made a USD 20 million investment in the development of the MCPP project.
Throughout the exploration and mining license application process, the Mining Commission was duly informed that
this project was an integrated coal-to-power initiative, and that the commencement of mine development was
contingent upon signing relevant power agreements with TANESCO and the Government of Tanzania. This
understanding was officially acknowledged on multiple occasions.
The Mining Commission granted the aforementioned mining licenses on March 2, 2022, subject to the payment of
annual rent fees. However, the investor expressed reluctance to pay the annual rent until a new Memorandum of
Understanding (MoU) with TANESCO was signed to avoid incurring unnecessary expenses amounting to
approximately USD 210,000 annually. The Mining Commission was notified of this situation, and they agreed to
extend the payment deadlines pending discussions and the eventual signing of a definitive MoU with TANESCO.
On September 20, Mbeya Coal reported positive progress in discussions with TANESCO and indicated that the signing
of the MoU was imminent. They requested another extension for the payment deadline until the MoU was either
signed or denied. On December 12, Mbeya Coal Ltd informed the Mining Commission that the MoU with TANESCO had
been signed on November 15, 2022. However, no responses were received in relation to these official requests.
Subsequently, Mbeya Coal discovered that the status of the Mining License in question had been changed online and
replaced with a foreign Prospecting License. Concerned about this development, Mbeya Coal made an urgent inquiry,
leading to the receipt of a letter from the Mining Commission dated December 28, 2022, stating that the Mining
Licenses had been cancelled due to Mbeya Coal's alleged failure to respond to a Default Notice issued on August 3,
2022.
Mbeya Coal promptly disputed the unilateral and unfair cancellation, asserting that the Mining Commission had
disregarded their various requests for extensions and highlighting irregularities and potential illegality in the
commission's procedures. The matter was pursued vigorously with the Minerals Department and Mining Commission
and eventually escalated to the office of the Prime Minister of Tanzania. (The latter was acknowledged by the PM’s
office)
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
71
As of now, the unjust cancellation of the mining licenses by Mbeya Coal Ltd remains in dispute and unresolved, and
Mbeya Coal Ltd is still awaiting a response from the Principal Secretary for Energy's office.
An independent consultant was appointed who is actively engaging the Mining Commission in following up this
matter.
Resultingly, we estimated the recoverable amount of Kibo’s Coal Assets to be £Nil, due to there being no viable offer
at present for the acquisition of the mining licences coupled with the fact that the licences have been revoked and
currently under dispute.
During the year, the intangible asset was by impaired by £1,940,577 to £Nil.
Bordersley - 2019
MAST Energy PLC 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, MAST 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 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 de-risked.
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.
During the year, the intangible asset was measured at its value in use value and found to be impaired in the amount
of £1,288,578. The discount rate applicable to the value in use assessment was 13.54%.
Pyebridge Power Ltd - 2021
Sloane Developments (Sloane) 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 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. During the 2022 financial year £421,041 of the deferred consideration was waived
and the cost price of the assets reduced by the same amount.
The acquisition of Pyebridge comprised of the following:
•
An installed and commissioned synchronous gas-powered standby generation facility; 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 PPE based on their respective fair values as at the date of acquisition, as disclosed in
Note 10.
Rochdale Power Ltd - 2021
Sloane Developments (Sloane) 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
72
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 10 and Note 11 respectively.
ADV 001 Ltd – 2022
Sloane Developments (Sloane) acquired a 100% interest in ADV 001 Limited ("Hindlip Lane"), from DKE Flexible
Energy Limited, for the installation of a 7.5 MW gas-peaker plant in Buildings Farm, Hindlip Lane, Hindlip, Worcester,
WR3 8SB.
The acquisition purchase price totals £262,500 of which £88,817 is utilised to settle a shareholder’s loan of the same
amount and the remainder of £173,683 is allocated towards purchasing all issued shares of the business. The
acquisition purchase price was paid from a credit loan obtained from the institutional investor. A further £10,694
was paid in cash by Mast Energy Developments PLC (“MED”) of which £8,020 is allocated to the purchase price of
Hindlip Lane.
The acquisition of land and gas-powered generation facility was accounted for as an asset acquisition at consolidated
level, and not as a business combination in accordance with IFRS 3. Therefore, the purchase price has been allocated
to assets and liabilities acquired based on their respective fair values as at the date of acquisition.
ARL 018 Ltd – 2022
Sloane Developments (Sloane) acquired a 100% interest in ARL 015 Limited ("Stather Road"), from DKE Flexible
Energy Limited, for the installation of a 2.4 MW gas-peaker plant on Land lying on the south side of Stather Road,
Flixborough.
The acquisition purchase price totals £87,500 of which £54,882 is utilised to settle a shareholder’s loan of the same
amount and the remainder of £32,618 is allocated towards purchasing all issued shares of the business. The
acquisition purchase price is to be paid from a credit loan obtained from the institutional investor. A further £10,694
was paid in cash by Mast Energy Developments PLC (“MED”) of which £2,673 is allocated to the purchase price of
Stather Road.
The acquisition of land and gas-powered generation facility was accounted for as an asset acquisition at consolidated
level, and not as a business combination in accordance with IFRS 3. Therefore, the purchase price has been allocated
to assets and liabilities acquired based on their respective fair values as at the date of acquisition.
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
73
Shankley Biogas Ltd - 2022
The Group, entered into an agreement on 30 September 2022 with Richard Watts whereby KE would acquire 100%
equity stake in Shankley Biogas Limited (Shankley) for a purchase consideration of £600,000 which was still due as
at 31 December 2022.
The purchase consideration is to be settled partially in cash to the amount of £250,000 and the remainder in shares
with a value of £350,000. Based on the agreement 198,637,911 ordinary shares will be issued at an exercise price of
£0.001762 per share. The date of settlement is undetermined at this stage but is expected to be settled within 12
months after the financial year end.
The purchase of Shankley does not constitute a business in terms of IFRS 3: Business Combinations and is treated as
a purchase of assets and liabilities at fair value at year end. Kibo invested in the project based on the project location
and technological rights attributable to specific project planning and recognises an intangible asset of £603,050
therefore.
The intangible asset will remain at cost until such time as the project is ready for use and output is generated.
Highlights of the project purchase is summarised as:
•
Shankley Biogas Ltd has negotiated a Power Purchase Agreement ('PPA') and a Gas Purchase Agreement
('GPA') term sheet on favourable terms with a blue-chip buyer.
•
The Project has full planning permission as well as grid and gas connection points already in place.
•
Based on independent financial estimates, prepared by reputable and appropriately accredited consulting
firm, the projected valuation metrics for the Project are summarised as follows:
o
- Internal rate of return ('IRR') of c. 22.78%
o
- Net Present Value (6%) ('NPV') of c. £47 million
o
- Net Asset Value ('NAV') of c. £22 million
o
- Projected average annual revenue of c. £24 million over a 25-year term.
o
- Estimated Operating margin c. 38%
o
- Capital estimated of c. £.35m
The major classes of assets acquired, and liabilities assumed are as follows:
Shankley
Biogas
Limited
(£)
Property, plant and equipment
939,664
Cash and cash equivalents
7,412
Accounts receivable
200
Accrued liabilities
(950,326)
Net equity acquired
(3,050)
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
74
A summary of the assessment performed for each of the renewable energy intangible assets are detailed below.
Key estimation variables
Rochdale
Bordersley
Life of project
20 years
20 years
Weighted average cost of capital (“WACC”)
13.54%
13.54%
Output
4.4MW
5.0MW
Average £/MW output
£481,118 per MW output
£423,384 per MW output
Debt/Equity ratio
58/42
58/42
Sensitivity analysis
Project delayed by 6 months
£102,664
£89,079
250bps Increase/Decrease in WACC
£800,806
£881,030
250bps Increase/Decrease in £/MW output
£29,290
£40,868
Key estimation variables
ADV001
ARL018
Life of project
20 years
20 years
Weighted average cost of capital (“WACC”)
13.54%
13.54%
Output
7.5MW
2.4MW
Average £/MW output
£436,463 per MW output
£437,865 per MW output
Debt/Equity ratio
58/42
58/42
Sensitivity analysis
Projects delayed by 6 months
£40,173
£10,601
250bps Increase/Decrease in WACC
£946,375
£317,017
250bps Increase/Decrease in £/MW output
£36,248
£12,399
Key estimation variables
Sustineri Energy
Life of project
10 years
Weighted average cost of capital (“WACC”)
13.37%
Output
2.7MW
Average £/MW output
£15 to £20 per MW output
Debt/Equity ratio
75/25
Sensitivity analysis
Projects delayed by 6 months
£258,665
250bps Increase/Decrease in WACC
£82,784
250bps Increase/Decrease in £/MW output
£166,726
The Group is exposed to significant market volatility in its estimate of the weighted average cost of capital. The risk-
free rate for the market in which the Group operates was negatively affected during the financial year as a direct result
of the war between Russia and Ukraine.
The market interest rates have increased significantly year on year and the weighted average cost of capital rose from
+-6.2% in the previous year to 13.5% for the current financial year. This has resulted in impairments being required
for the investments and related property, plant and equipment.
Market indicators are predominantly showing an expected decrease in the interest rates during the second half of the
2023 financial year. When these indicators are compared to the sensitivity analysis the Group expects that a high
likelihood exists of impairment reversal in future when the market interest rates start lowering.
The assessment of the value in use of the intangible assets resulted in an impairment of £1,288,478 being recognised.
The most significant contributor to the impairment required was the increase of the weighted average cost of capital
due to increase in market interest rates.
The directors have performed further sensitivity analysis on the value in use assessments for the four projects based
in the UK and Sustinery based in South Africa with the following variables being assessed:
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
75
Key estimation variables
Reason for assessment
Average change
in value in use
Projects delayed by 6
months
Projects are dependent on external funding and delay in
funding may result in delay in net cash inflows from the
projects
£501,182
250bps Increase/Decrease
in WACC
The market interest rates have been volatile during the
financial year and due to the above average interest rate
increases an assessment of 250bps increase or decrease
was performed.
£3,028,012
250bps Increase/Decrease
in £/MW output
The energy market has experienced above average
increases during the financial year and an assessment of
250bps increase or decrease was performed.
£285,531
12. Investment in associates
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:
Katoro Gold
PLC (£)
Mabesekwa
Coal
Independent
Power
Project (£)
Total (£)
Carrying value at 1 January 2021
-
9,696,351
9,696,351
Share of losses for the year
(48,357)
-
(48,357)
Remaining equity interest following loss of control over investee
894,090
-
894,090
Impairment loss
(316,969)
(6,132,712)
(6,449,681)
Carrying value at 1 January 2022
528,764
3,563,639
4,092,403
Share of losses for the year
(181,684)
-
(181,684)
Impairment loss
(246,135)
(3,563,639)
(3,809,774)
Carrying value at 31 December 2022
100,945
-
100,945
Mabesekwa Coal Independent Power Project
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 an in situ 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
76
Result of impairment review undertaken during the period
The Group has decided to divest itself from these assets in line with the Group direction change to renewable energy.
As the Term Sheet upon which the Mabasekwa Coal assets were based has expired, the project value was impaired to
£Nil during the year.
Summarised financial information of the associate is set out below:
Group (£)
2022
Group (£)
2021
Non-Current assets
-
7,824,447
Current assets
-
866
Loss for the year
(3,865,168)
-
Kibo Energy Botswana (Pty) Ltd recognised no revenue during the year (2021: Nil). No dividends were received
during the year (2021: 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.
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:
Group (£)
31 December
2022
Group (£)
31 December
2021
Non-current assets
-
209,500
Current assets
65,936
876,658
Current liabilities
(296,844)
(163,732)
Loss for the year ended
(1,066,616)
(1,142,479)
Cash flow from operating activities
(893,310)
(915,880)
Cash flow from investing activities
-
(125,866)
Cash flows from financing activities
114,950
(1,771,925)
Katoro Gold PLC recognised no revenue during the year (2021: £Nil). No dividends were received during the year
(2021: £Nil). Kibo owns 96,138,738 of Katoro’s 460,412,593 issued shares or 20.88% of the issued shares at year end.
Katoro Gold PLC’s principal place of business is the 6th Floor, 60 Gracechurch Street, London, EC4V OHR. Project
specific information about Katoro Gold PLC can be obtained from their website at katorogold.com.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
77
13. Other financial assets
Group (£)
2022
2021
Other financial assets comprise of:
Lake Victoria Gold receivable
-
657,061
Blyvoor Joint Venture receivable
-
1,223,495
-
1,880,556
Impairment allowance for other financial assets receivable
Lake Victoria Gold receivable
-
(657,061)
Blyvoor Joint Venture receivable
-
(1,223,495)
-
(1880,556)
Group (£)
Reconciliation of movement in other financial assets
Blyvoor Joint
Venture
Lake Victoria
Gold
Foreign exchange movement
-
16,240
Further advance on the Blyvoor Joint Venture
63,158
-
Credit loss allowance recognised
(63,158)
(16,240)
Carrying value as at 31 December 2021
-
-
Carrying value as at 31 December 2022
-
-
14. 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 effective on 19 October 2018. The acquisition of MAST Energy Projects Limited falls within the ambit of IFRS
3: Business Combinations.
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
impaired. The Company will cease operations in the foreseeable future.
The goodwill carried forward from this transaction is £Nil after an impairment of £300,000 in the previous financial
year.
15. Other receivables
Group 2022
(£)
Group
2021 (£)
Company
2022 (£)
Company
2021 (£)
Amounts falling due within one year:
Other debtors
227,223
255,747
90,720
73,734
227,223
255,747
90,720
73,734
The carrying value of current receivables approximates their fair value.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
78
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.
16. Cash and cash equivalents
Group (£)
Company (£)
Cash consists of:
2022
2021
2022
2021
Short term convertible cash reserves
163,884
2,082,906
19,442
239,674
163,884
2,082,906
19,442
239,674
Cash has not been ceded or placed as encumbrance toward any liabilities as at year end.
17. Share capital - Group and Company
2022
2021
Authorised equity
5,000,000,000 Ordinary shares of €0.001 each
€5,000,000
€5,000,000
1,000,000,000 deferred shares of €0.014 each
€14,000,000
€14,000,000
3,000,000,000 deferred shares of €0.009 each
€27,000,000
€27,000,000
€46,000,000
€46,000,000
Allotted, issued and fully paid shares
2022: 3,039,197,458 Ordinary shares of €0.001 each
£1,934,599
-
2021: 2,930,657,437 Ordinary shares of €0.001 each
-
£1,836,562
1,291,394,535 Deferred shares of €0.009 each
£9,257,075
£9,257,075
805,053,798 Deferred shares of €0.014 each
£9,948,807
£9,948,807
£21,140,481
£21,042,444
Number of
Shares
Ordinary
Share
Capital
(£)
Deferred
Share
Capital
(£)
Share
premium
(£)
Balance at 31 December 2020
2,221,640,835
1,205,611
19,205,882
44,312,371
Shares issued during the period
709,016,602
630,951
-
1,116,957
Balance at 31 December 2021
2,930,657,437
1,836,562
19,205,882
45,429,328
Shares issued during the period
108,540,021
98,036
-
86,753
Balance at 31 December 2022
3,039,197,458
1,934,598
19,205,882
45,516,081
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
79
The company issued the following ordinary shares during the period, with regard to key transactions:
•
39,264,079 new Kibo Shares were issued on 16 February 2022 of €0.001 each at a deemed issue price of
£0.0017828 per share to an Institutional Investor ("Investor") in settlement of £70,000 of facility
implementation fee pursuant to the Funding Facility Agreement signed between the Investor and the
Company in February 2022;
•
13,157,895 new Kibo Shares were issued on 16 February 2022 of €0.001 each at a deemed issue price of
£0.0019 per share to certain providers of financial and technical services in settlement of £25,000 of
outstanding invoices;
•
56,118,047 new Kibo Shares were issued on 20 May 2022 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
18. 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.
19. 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 (£)
Company (£)
2022
2021
2022
2021
Opening balance of share-based payment
reserve
466,868
1,728,487
466,868
977,575
Issue of share options and warrants
24,774
194,944
24,774
48,693
Expired warrants during the period
(418,173)
(559,400)
(418,173)
(559,400)
Loss of control over subsidiary
-
(897,163)
-
-
73,469
466,868
73,469
466,868
Share Options and Warrants detail
Share Options
Kibo and MAST Energy Developments PLC had no share options in issue throughout the year
The following reconciliation serves to summarise the value attributable to the share option reserve as at period end:
Group (£)
2022
2021
Opening balance of share-based payment reserve
-
256,315
Issue of share options
-
146,249
Loss of control over subsidiary
-
(402,564)
-
-
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
80
The following reconciliation serves to summarise the quantity of share options in issue as at period end:
Group
2022
2021
Opening balance
-
32,244,781
Share options issued
-
-
Loss of control of subsidiary
-
(32,244,781)
-
-
Warrants
The following reconciliation serves to summarise the value attributable to the share-based payment reserve as at
period end for the Company:
Company (£)
2022
2021
Opening balance of warrant reserve
466,868
977,575
Issue of warrants
24,774
48,693
Expired warrants
(418,173)
(559,400)
73,469
466,868
The following reconciliation serves to summarise the quantity of warrants in issue as at period end:
Group
Company
2022
2021
2022
2021
Opening balance
1,180,861,140
1,341,308,419
1,180,861,140
1,275,833,420
New warrants issued
168,274,625
430,000,000
168,274,625
430,000,000
Warrants exercised
-
(189,431,556)
-
(188,431,556)
Warrants expired
(221,111,140)
(340,740,724)
(221,111,140)
(336,540,724)
Decrease in warrants following
loss of control over subsidiary
-
(60,274,999)
-
-
1,128,024,625
1,180,861,140
1,128,024,625
1,180,861,140
At 31 December 2022 the Group had no share options and 1,128,024,625 warrants outstanding:
Warrants
Date of Grant
Issue date
Expiry date
Exercise
price
Number
granted
Exercisable as
at 31 December
2022
17 Sept 2020
17 Sept 2020
17 Sept 2023
0.4p
240,000,000
216,000,000
17 Sept 2020
17 Sept 2020
17 Sept 2023
0.25p
362,500,000
313,750,000
3 November 2021
3 November 2021
2 November 2023
0.4p
430,000,000
430,000,000
16 February 2022
16 February 2022
15 February 2025
0.023p
168,274,625
168,274,625
1,200,774,625
1,128,024,625
Total Contingently Issuable shares
1,200,774,625
1,128,024,625
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
81
Expenses settled through the issue of shares
The Group recognised the following expense related to equity settled share-based payment transactions:
2022 (£)
2021 (£)
Geological expenditure settled
25,000
-
Listing and capital raising fees
159,790
-
Shares and warrants issued to directors and staff
-
146,250
184,790
146,250
20. 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
2022
(£)
2021
(£)
Opening balance
(466,184)
(598,637)
Movement during the period
372,191
(212,764)
Disposal of subsidiary
-
345,217
Closing balance
(93,993)
(466,184)
21. Non-controlling interest
The non-controlling interest brought forward relates to the minority equity attributable to Sustineri Energy and Mast
Energy Developments Plc. As at 31 December 2022, the Group’s non-controlling interest comprises 42.14% equity
held in MAST Energy Development PLC (2021: 45%).
Group
2022 (£)
2021 (£)
Opening balance
1,962,816
(256,841)
Change of interest in subsidiary without loss of control
333,009
3,201,014
Acquisition of non-controlling interest
-
308,030
Change in shareholding resulting in a loss of control
-
(138,045)
Comprehensive loss for the year allocated to non-controlling interest
(1,131,607)
(1,151,342)
Closing balance of non-controlling interest
1,164,218
1,962,816
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 2022, is presented below:
MAST Energy
Development PLC
2022 (£)
Statement of Financial position
Total assets
4,617,505
Total liabilities
2,500,761
Statement of Profit and Loss
Revenue for the period
1,036,743
Loss for the period
(2,733,000)
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
82
Statement of Cash Flow
Cash flows from operating activities
(1,284,427)
Cash flows from investing activities
(974,350)
Cash flows from financing activities
585,500
22. Trade and other payables
Group
2022 (£)
Group
2021 (£)
Company
2022 (£)
Company
2021 (£)
Amounts falling due within one year:
Trade payables
680,722
1,116,273
159,009
114,062
Derivative liabilities (refer below)
20,386
-
-
-
Other payables
884,015
-
-
-
Accrued liabilities
809,967
-
667,026
-
2,395,090
1,116,273
826,035
114,062
Movements in derivative liabilities included in Trade and
Other Payables:
Recognition of derivative liability derived from the
convertible loan notes
106,944
-
-
-
Gain on fair value adjustment of derivative liability
(86,558)
-
-
-
20,386
-
-
-
The carrying value of current trade and other payables equals their fair value due mainly to the short-term nature of
these receivables.
Derivatives
The derivative liability is derived from the convertible credit note loans. The convertible feature within the credit
notes enables the noteholders to convert into a fixed number of shares at the Fixed Premium Payment Price (FPPP).
This price does have variability, although the FPPP is set at the Reference price, in the event that a share placing occurs
93,910 at below the Reference price, the FPPP will be the share placing price (“round down” feature). The conversion
includes and embedded derivative, as its value moves in relation the share price (through a placing price) and it is not
related to the underlying host instrument, the debt. The effect is that the embedded derivative is accounted for
separately at fair value.
23. Borrowings and other financial liabilities
Group
2022 (£)
Group
2021 (£)
Company
2022 (£)
Company
2021 (£)
Amounts falling due within one year:
Short term loans
1,195,239
1,079,691
1,195,239
119,004
Other financial liabilities – Convertible loan notes
1,012,790
-
657,985
-
Amounts falling due between one year and five
years:
Other financial liabilities – Convertible loan notes
243,056
-
-
-
2,451,085
1,079,691
1,853,224
119,004
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
83
Group
2022 (£)
Group
2021 (£)
Company
2022 (£)
Company
2021 (£)
Reconciliation of borrowings and other financial
liabilities:
Opening balance
1,079,691
858,546
119,004
344,391
Proceeds from convertible loans in MED
650,000
-
-
-
Proceeds from borrowings in Kibo
1,672,824
-
1,672,824
-
Recognition of derivative liability derived from the
convertible loan notes
(106,944)
-
-
-
Raised during the year
-
978,038
-
-
Repayment of deferred payment liability
(555,535)
(175,705)
-
(55,669)
Repayment of borrowings
(44,917)
-
(44,917)
-
Waiver of deferred payment liability
(421,041)
-
-
-
Debt forgiven
-
(355,659)
-
-
Loss of control over subsidiary
-
(77,434)
-
-
Interest raised
192,087
21,623
121,393
-
Costs incurred on borrowings
74,709
-
74,709
-
Settled through the issue of shares
(89,789)
(169,718)
(89,789)
(169,718)
Closing balance
2,451,085
1,079,691
1,853,224
119,004
Breakdown of borrowings and other financial
liabilities:
Non-current
243,056
-
-
-
Current
2,208,029
1,079,691
1,853,224
119,004
Total
2,451,085
1,079,691
1,853,224
119,004
Deferred vendor liability
The deferred vendor liability was settled during the year by mutual agreement between the seller of Pyebridge and
MED PLC. The settlement took place following agreed costs incurred by MED on behalf of the seller and the eventual
waiver of the remaining amounts due in the amount of £421,041.
The settlement was reached as a result of the seller not reaching certain contractual milestones originally agreed to
in the purchase agreement of Pyebridge. The deferred payment liability for the purchase was linked to the seller
reaching these milestones.
The resulting waiver is treated as price adjustment to the underlying assets for the Company and Group respectively
as the fair value of the consideration paid for the assets were reduced by the waiver.
Convertible loan notes
Short term loans relate to two unsecured loan facilities from the institutional investor which are repayable either
through the issue of ordinary shares or payment of cash by the Company.
These facilities have repayment periods of 18 and 24 months respectively for each drawdown from the facility. The
facilities may be converted at the option of the note holders once certain milestones have been met. At the financial
year end 31 December 2022, none of these milestones have been met and no conversion may take place. The earliest
conversion may occur during October 2023.
Institutional Investor
The Institutional Investor borrowing is a bridge loan facility agreement for up to £3m with a term of up to 36
months. Funds advanced under the Facility will attract a fixed coupon interest rate of 3.5% and will be repayable
with accrued interest on 23 July 2023
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
84
24. Investment in subsidiaries and associates
Breakdown of investments as at 31 December 2022
Associate
undertakings
(£)
Subsidiary
undertakings
(£)
Kibo Mining (Cyprus) Limited
-
4,987,662
Katoro Gold PLC
100,945
-
Shankley Biogas Limited
-
600,000
Total cost of investments
100,945
5,587,662
Breakdown of investments as at 31 December 2021
Associate
undertakings
(£)
Subsidiary
undertakings
(£)
Kibo Mining (Cyprus) Limited
-
16,233,997
Katoro Gold PLC
528,764
-
Total cost of investments
528,764
16,233,997
Investments at Cost
At 1 January 2021
-
46,664,160
Additions in Kibo Mining Cyprus Limited
-
1,114,324
Impairment of the subsidiaries
-
(29,379,842)
Derecognition of subsidiary and recognition of associate
2,164,645
(2,164,645)
Fair value adjustment of Katoro Gold PLC
(1,635,881)
-
At 31 December 2021 (£)
528,764
16,233,997
Additions in Kibo Mining Cyprus Limited
-
1,086,889
Purchase of Shankley Biogas Limited (refer note 11)
-
600,000
Impairment of subsidiaries
-
(12,333,224)
Fair value adjustment of Katoro Gold PLC
(427,819)
-
At 31 December 2022 (£)
100,945
5,587,662
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 2022.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
85
At 31 December 2022 the Company had the following undertakings:
Description
Subsidiary,
associate,
Joint Ops
Activity
Incorporated in
Interest
held
(2022)
Interest
held
(2021
)
Directly held investments
Kibo Mining (Cyprus) Limited
Subsidiary
Treasury Function
Cyprus
100%
100%
Katoro Gold PLC
Associate
Mineral Exploration
United Kingdom
20.88%
20.88%
Indirectly held investments
MAST Energy Development PLC
Subsidiary
Power Generation
United Kingdom
57.86%
55%
Sloane Developments Limited
Subsidiary
Holding Company
United Kingdom
57.86%
55%
MAST Energy Projects Limited
Subsidiary
Power Generation
United Kingdom
57.86%
55%
Bordersley Power Limited
Subsidiary
Power Generation
United Kingdom
57.86%
55%
Rochdale Power Limited
Subsidiary
Power Generation
United Kingdom
57.86%
55%
Pyebridge Power Limited
Subsidiary
Power Generation
United Kingdom
57.86%
55%
Kibo Gold Limited
Associate
Holding Company
Cyprus
20.88%
20.88%
Savannah Mining Limited
Associate
Mineral Exploration
Tanzania
20.88%
20.88%
Kibo Nickel Limited
Associate
Holding Company
Cyprus
20.88%
20.88%
Eagle Exploration Limited
Associate
Mineral Exploration
Tanzania
20.88%
20.88%
Katoro (Cyprus) Limited
Associate
Mineral Exploration
Cyprus
20.88%
20.88%
Katoro South Africa Limited
Associate
Mineral Exploration
South Africa
20.88%
20.88%
Mbeya Holdings Limited
Subsidiary
Holding Company
Cyprus
100%
100%
Mbeya Development Limited
Subsidiary
Holding Company
Cyprus
100%
100%
Mbeya Mining Company Limited Subsidiary
Holding Company
Cyprus
100%
100%
Mbeya Coal Limited
Subsidiary
Mineral Exploration
Tanzania
100%
100%
Rukwa Holding Limited
Subsidiary
Holding Company
Cyprus
100%
100%
Mbeya Power Tanzania Limited
Subsidiary
Power Generation
Tanzania
100%
100%
Kibo Mining South Africa (Pty)
Ltd
Subsidiary
Treasury Function
South Africa
100%
100%
Sustineri Energy (Pty) Ltd
Subsidiary
Renewable Energy
South Africa
65%
65%
Kibo Exploration Limited
Subsidiary
Treasury Function
Tanzania
100%
100%
Kibo MXS Limited
Subsidiary
Holding Company
Cyprus
100%
100%
Mzuri Exploration Services
Limited
Investment
Exploration Services
Tanzania
4.78%
4.78%
Protocol Mining Limited
Investment
Exploration
Services
Tanzania
4.78%
4.78%
Jubilee Resources Limited
Subsidiary
Mineral Exploration
Tanzania
100%
100%
Kibo Energy Botswana Limited
Subsidiary
Holding Company
Cyprus
100%
100%
Kibo Energy Botswana (Pty) Ltd Associate
Mineral Exploration
Botswana
35%
35%
Kibo Energy Mozambique Limited Subsidiary
Holding Company
Cyprus
100%
100%
Pinewood Resources Limited
Subsidiary
Mineral Exploration
Tanzania
100%
100%
BENGA Power Plant Limited
Joint Venture
Power Generation
Tanzania
65%
65%
Makambako Resources Limited
Subsidiary
Mineral Exploration
Tanzania
100%
100%
Shankley Biogas Limited
Subsidiary
Power Generation
United Kingdom
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
86
25. 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
River Group, Boudica Group and Namaqua Management Limited
Other entities over which directors/key management or their close family have control or significant
influence:
River Group
Boudica Group
St Anderton on Vaal Limited
River Group provide corporate advisory services and is the Company’s
Designated Advisor.
Boudica Group provides secretarial services to the Group.
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.
Kibo Mining PLC is a shareholder of the following companies and as such are considered related parties:
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
Kibo Nickel Limited
Katoro (Cyprus) Limited
Katoro South Africa Limited
Kibo Energy Botswana Limited
Kibo Energy Mozambique Limited
Eagle Exploration Mining Limited
Rukwa Holdings Limited
Mbeya 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
MAST Energy Projects Limited
Sloane Developments Limited
Bordersley Power Limited
Rochdale Power Limited
Pyebridge Power Limited
Shankley Biogas Limited
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
87
During the year £23,176 was paid to Boudica Group for secretarial services.
26. 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 2022 and 2021 financial period, the Group and Company’s policy not to undertake
trading in derivatives. Any derivative liabilities due are a result of agreements with the Group and Company’s
suppliers or financiers under its primary business goals, i.e., financing and development of renewable energy projects.
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.
Foreign currency risk
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.
At the period ended 31 December 2022, the Group had no outstanding forward exchange contracts.
2022 (£)
2021 (£)
Financial instruments of the Group are:
Loans and
receivables
Financial
liabilities
Loans and
receivables
Financial
liabilities
Financial assets at amortised cost
Other receivables
227,223
-
255,747
-
Cash and cash equivalents
163,884
-
2,082,906
-
Financial liabilities at amortised cost
Trade and other payables
-
2,374,704
-
1,116,273
Other financial liabilities
1,255,846
-
-
Borrowings
-
1,195,239
-
1,079,691
Financial liabilities at fair value
Trade payables – derivative liabilities
-
20,386
-
-
391,107
4,846,175
2,338,653
2,195,964
2022 (£)
2021 (£)
Financial instruments of the Company are:
Loans and
receivables
Financial
liabilities
Loans and
receivables
Financial
liabilities
Financial assets at amortised cost
Other receivables
90,720
-
73,734
-
Cash and cash equivalents
19,442
-
239,674
-
Financial liabilities at amortised cost
Trade and other payables
-
826,035
-
114,062
Other financial liabilties
-
657,985
-
-
Borrowings
-
1,195,239
-
119,004
110,162
2,679,259
313,408
233,066
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
88
Exchange rates used for conversion of foreign subsidiaries undertakings were:
2022
2021
EURO to GBP (Average)
0.8115
0.8595
EURO to GBP (Spot)
0.8866
0.8394
USD to GBP (Average)
0.8528
0.7281
USD to GBP (Spot)
0.8266
0.7412
ZAR to GBP (Average)
0.0496
0.0492
ZAR to GBP (Spot)
0.0486
0.0465
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.
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 (£)
2022
2021
2022
2021
Trade & other receivables
227,223
255,747
90,720
73,734
Cash
163,884
2,082,906
19,442
239,674
Liquidity risk management
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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
89
The Group and Company’s financial liabilities as at 31 December 2022 were all payable on demand.
Group (£)
Less than 1
year
Greater than 1
year but within
5 years
Greater than 5
years
At 31 December 2022
Trade and other payables
2,395,090
-
-
Borrowings
1,195,239
-
-
Lease liabilities
27,000
108,000
621,000
Other financial liabilities
1,012,790
243,056
-
At 31 December 2021
Trade and other payables
1,116,273
-
-
Borrowings
1,079,691
-
-
Lease liabilities
27,000
108,000
648,000
Company (£)
At 31 December 2022
Trade and other payables
826,035
-
-
Borrowings
1,195,239
-
-
Other financial liabilities
657,985
At 31 December 2021
Trade and other payables
114,062
-
-
Borrowings
119,004
-
-
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
90
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 2022.
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 at 31 December 2022, the Group had no outstanding contracts designated as hedges.
27. Post Statement of Financial Position events
During January 2023, the Group appointed Beaumont Cornish Limited as Nominated Advisor (NOMAD) following the
resignation of RFC Ambrian Ltd. On the same day, Ajay Dominic Saldanha was appointed to the board of directors as
a non-executive director.
On 25 January 2023 Kibo settled outstanding creditors by way of issuing 14,025,314 ordinary shares at 0.14 pence
per share, of par value €0.001 each (the "Settlement Shares") to a service provider in payment of an outstanding
invoice for value of £19,635.44.
The Group made a decision to potentially introduce an additional revenue stream to its 2.7 MW plastic-to-syngas
power plant (the 'Project'), which sits within the 65%-owned Sustineri Energy (Pty) Ltd, following the Company's
previous announcement dated 14 February 2022. This potential new revenue stream involves the production of
synthetic oil from non-recyclable plastic waste in addition to the production of electricity from syngas, which
promises significant added benefits to the Project.
A subsidiary of Kibo, MED, applied for and was successful in pre-qualification to bid for two new CM contracts, being
a T-1 and a T-4 CM contract. Following the preparation of a robust CM Auction bid strategy, MED is pleased to
announce that pursuant to the recent Capacity Market Auctions and subsequent results, its T-1 bid cleared at
£60/kW/pa and, its T-4 bid cleared at an unprecedented historic record price of £63/kW/pa.
Mr. Peter Oldacre was appointed as the new Group Business Development Executive for the Kibo Group of companies
('KEGC' or the 'Group').
On 11 April 2023 received warrant exercise notices and loan conversion notices for which new Kibo shares will be
issued as follows:
Kibo Warrant Exercise
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
91
The Company has received warrant notices to exercise 284,524,625 Kibo warrants for which 284,524,625
ordinary Kibo shares of €0.001 at a price of £0.001 (0.1p) will be issued (the "Warrant Shares"). The Warrant
Shares include 168,274,625 shares to be issued to the Institutional Investor. Accordingly, the Institutional
Investor being RiverFort Global Opportunities PCC Ltd will have a holding of 168,274,625 shares
representing a 4.37% interest in the Company. From the total Warrant proceeds of £284,524.63, £68,274.63
is being retained by the Institutional Investor from its warrant exercise as a reduction against the Outstanding
Amount on the term loan facility (the "Facility") under the terms of the agreed reprofiling terms of the Facility.
Issue of the Warrant Shares satisfies conditions precedent 2 and 3 for the reprofiling of the Facility under the
reprofiling agreement.
Kibo Convertible Loan Note Conversion
Accordingly, and further to the announcement of 11 April, Conversion notices have now been received by the
noteholders on Kibo's 7% Convertible Loan Note Instrument dated 7 January 2022 (the 'Loan Notes'), to
convert all principal amounts and accrued interest to ordinary Kibo shares of €0.001 par value. The total
amount outstanding, including accrued interest on the Loan Notes, is £714,517 which has been converted at
a deemed price of 0.14p, resulting in the issue of 510,369,286 new Kibo shares to the noteholders (the
"Conversion Shares"). The noteholders include certain directors and senior management of the Company as
further detailed below.
Issue of the Conversion Shares satisfied condition precedent 1 for the reprofiling of the Facility under the
reprofiling agreement.
The total amount of new Kibo shares (Warrant Shares and Conversion Shares) issued is 794,893,911 (the
"New Shares").
Kibo New Warrant Issue
The Company has also awarded 1,262,300,283 warrants to the Institutional Investor (Institutional Investor
Warrants) under the agreed reprofiling terms of the Facility. This is calculated as being 100% of the
Reprofiled Amount as defined in the 11 April announcement divided by the Reference Price of €0.001 and
these warrants are exercisable half at a price of €0.001 per Share and half at a price of €0.002 per Share.
Following the Kibo Warrant Exercise and the Kibo New Warrant Issue there will be 2,105,800,283 warrants
outstanding in the Company (issued and unexpired).
Reprofiling of Facility becomes Effective.
As conditions precedent 1 to 3 for the reprofiling of the Facility under the reprofiling agreement have now
been met, the debt reprofiling is now effective.
On 4 May 2023 the Group Company has requested that 116,250,000 of the shares it has applied for to be admitted for
trading on AIM and the JSE, in its 26 April 2023 announcement, be deferred from being issued and admitted for
trading, until full payment for the corresponding warrants, for which prior irrevocable exercise notices have been
submitted, has been received. Accordingly, the Company has issued 168,274,625 Ordinary Shares to RiverFort Global
Opportunities PCC Ltd in respect of the warrant exercise announced on 26 April 2023 for which trading on AIM and
the JSE is expected on 5 May 2023 and for which full payment has been received by the Company from RiverFort
Global Opportunities PCC Ltd ("Admission").
On 26 May 2023 the Group announced that 48,000,000 shares of the 116,250,00 it had deferred from being issued
and admitted to AIM have now been allotted following receipt of warrant exercise funds in respect of a warrant
exercise notice already received. The warrant exercise notice relates to exercise of 48,000,000 Kibo warrants for
which 48,000,000 ordinary Kibo shares of €0.001 at a price of £0.001 (0.1p) will now be issued (the "Warrant
Shares"). Total warrant exercise funds in respect of this warrant exercise received by the Company are £48,000.
Total Voting Rights
Application will be made for the Warrant Shares to be admitted to trading on AIM and the JSE AltX markets.
Trading in the Warrant Shares is expected to commence on AIM and the JSE on or around 2 June 2023
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
92
('Admission'). Following Admission, the Company will have 3,779,866,683 shares in issue and the foregoing
figure may be used by shareholders as the denominator for the calculations to determine if they are required to
notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure Guidance and
Transparency Rules.
28. 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.
KIBO ENERGY PLC
ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
93
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 1/2022 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:
31 December
2022 (£)
31 December
2021 (£)
Loss for the period attributable to normal shareholders
(9,776,917)
(21,996,968)
Adjustments:
Profit on loss of control over of subsidiaries
(529,415)
Profit on disposal of PPE
(7,264)
-
Impairment of goodwill
300,000
Impairment of intangible assets
3,229,155
13,955,528
Impairment of associates
3,809,774
6,449,681
Headline loss for the period attributable to normal shareholders
(2,745,252)
(1,821,174)
Headline loss per ordinary share
(0.0009)
(0.0007)
Weighted average number of shares in issue:
3,010,992,501
2,480,279,189
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.