Vivo Energy Limited
Annual Report
& Accounts
2023
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
0
We are vitalising Africa:
empowering our
people, customers,
partners and
communities to
create opportunities
across the continent.
We are doing business the right
way to grow, enhance profitability
and build a sustainable future.
We are creating a bigger, bolder
and better company to support
Africa’s young and growing
population. We are building
on our strengths and giving
more energy to Africa.
Making every moment an
opportunity to vitalise Africa.
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Contents
Governance
Board of Directors
Board leadership and company purpose
Role of the Board and
division of responsibilities
Directors’ Report
Statement of Directors’ responsibilities
43
44
47
49
51
Financial
statements
Independent Auditors’ Report
Consolidated statement of
comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated
financial statements
Company statement of financial position
Company statement of changes in equity
Notes to the Company financial statements
53
58
59
60
61
62
95
95
96
Other
information
Task Force on Climate-Related Financial
Disclosures index
Glossary
Key contacts and advisers
105
106
107
Strategic
report
2023 highlights
Who we are
Where we operate
Progressing the Engen transaction
Chief Executive Officer’s statement
Our strategy
Our stakeholders
Key performance indicators
Financial review
Vision, culture and values
Sustainability framework
Non-financial information statement
Section 172(1) statement
Task Force on Climate-Related
Financial Disclosures
Risk management
2
3
4
6
7
9
13
14
16
23
25
33
34
35
39
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2023 highlights
Service stations added
(net total)
149
Revenues
(US$ million)
11,010
0%
Net loss
(US$ million)
-35
-133%
Volumes
(million litres)
10,973
+2%
Adjusted EBITDA
(US$ million)
371
-21%
Total recordable case frequency
(per million exposure hours)
0.09
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We are a leading pan-African
distributor and retailer of Shell and
Engen-branded fuels and lubricants
Retail
Retail is the engine that powers our growth.
At the end of 2023, our network comprised
2,738 service stations across the continent.
Commercial
Lubricants
Our Commercial business not only ensures a
reliable supply of high-quality fuels and energy to
thousands of customers, but also supports those
products with extensive, trusted services.
We sell lubricants to Retail and Commercial
customers in our countries of operation,
and also export to more than ten additional
African markets.
RETAIL FUEL
Sale of petrol and diesel fuels at
Shell and Engen-branded service
stations, across 23 countries.
NON-FUEL RETAIL
Multi-branded convenience retail
shops, quick service and fast
casual restaurants, and other
services including lubricant bays,
car washes and ATMs.
CORE COMMERCIAL
Supplying mining, construction,
transport, power and industrial
companies. We also supply LPG,
primarily to consumers, as well as
fuels to the wholesale market.
AVIATION AND MARINE
Supplying aviation fuel, plus
bunkering for marine traders and
other shipping companies.
RETAIL LUBRICANTS
Providing products to consumers
at our service station forecourts
and lubricant bays and also at
oil shops, repair shops, service
centres and resellers through a
network of distributors.
COMMERCIAL
LUBRICANTS
Supplying specialist lubricants
to mining companies and B2B
customers, and also exporting
to other African markets.
Volumes
(million litres)
6,234 -2%
Gross cash profit1
(US$ million)
448 -8%
Gross cash unit margin2
($/’000 litres)
66 -7%
1 Includes Non-fuel retail.
2 Excludes Non-fuel retail.
Non-GAAP measures are explained and reconciled on pages 21 and 22.
Volumes
(million litres)
4,592 +8%
Gross cash profit
(US$ million)
217 -8%
Volumes
(million litres)
147 -1%
Gross cash profit
(US$ million)
87 -4%
Gross cash unit margin
($/’000 litres)
47 -16%
Gross cash unit margin
($/’000 litres)
593 -2%
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We operate in 24 African markets
02
01
05
08
09
07
Our markets with Shell-branded service stations
Our markets with Engen-branded service stations
Our market with Somagaz-branded LPG
03
04
06
24
markets1
+1 million
cubic metres of storage1
2,738
service stations
1
Information as at 31 December 2023.
Excluding potential markets following
the completion of the Engen transaction.
+1 million
customers per day
visit our sites
10,973
million litres of
fuel sold in 2023
16
10
11
17
20
18
19
24
23
12
13
22
14
15
21
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Two leading brands
7. Côte d’Ivoire
12. Namibia
Total Volume
Service stations
826
254
Total Volume
Service stations
447
75
Read more about Côte d’Ivoire in Our People on page 26
8. Burkina Faso
13. Botswana
Total Volume
Service stations
312
119
Total Volume
Service stations
1. Tunisia
4. Senegal
9. Ghana
14. Madagascar
Total Volume
1,106
Total Volume
Service stations
173
Service stations
618
149
Total Volume
Service stations
490
244
Total Volume
Service stations
253
85
255
77
2. Morocco
5. Mali
10. Uganda
15. Mauritius
Total Volume
2,222
Total Volume
Service stations
421
Service stations
249
55
Total Volume
Service stations
548
184
Total Volume
Service stations
436
51
3. Cape Verde
6. Guinea
11. Kenya
Total Volume
Service stations
215
27
Total Volume
Service stations
512
139
Total Volume
Service stations
1,342
315
Total volume is measured in million litres and excludes volume related to supply trading not allocated to countries.
108
41
213
35
155
50
39
65
20. Tanzania
Total Volume
Service stations
21. Reunion
Total Volume
Service stations
Read more about Tanzania in Our Planet on page 29
16. Gabon
Total Volume
Service stations
17. Rwanda
Total Volume
Service stations
18. Zambia
22. Mozambique
78
24
Total Volume
Service stations
131
59
Total Volume
Service stations
19. Malawi
23. Zimbabwe
129
50
Total Volume
Service stations
74
46
Total Volume
Service stations
24. Mayotte
New market added
in December 2023 to
bottle and distribute
Somagaz-branded LPG.
Read more about our new market entry in Mayotte on page 8
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Progressing the Engen transaction
On 9 February 2023, we announced our agreement
to combine with Engen, creating one of Africa’s largest
energy distribution companies.
During 2023, we have worked through the transition
period, engaging with authorities to secure regulatory
approvals for the transaction.
Engen is the clear market leader in South Africa
and has around 1,300 service stations across seven
African countries.
In November 2023, the Competition Commission
of South Africa recommended that the Competition
Tribunal approve the transaction, with conditions.
When added to our current portfolio, the combined
Group will have over 3,900 service stations and
more than two billion litres of storage capacity across
28 African markets.
This important milestone takes us closer to completing
the Engen transaction. However, it is important
to note that there are still further steps before
this happens.
Completion of this transaction – which reunites the
Engen brand across Africa – will be a step change in
our growth and represents a significant commitment
to South Africa, while also enhancing our portfolio in
other important markets.
Engen is a high-quality brand, which shares our values
and complements our existing business very well.
In addition to adding new markets, the transaction
will also allow us to optimise our Southern Africa
supply, adopt Engen’s strengths and share best
practice between Vivo Energy and Engen – ensuring
we take the ‘best of both’ to propel the combined
business forward.
In addition to the recommended South African
approval, good progress is also being made with
authorities to secure approvals in the other
Engen markets.
When all South African and other market approvals
are secured, as well as satisfaction of other customary
conditions, we will be ready to complete the
transaction, marking a significant milestone in our
development and a step change in our growth.
The transaction is expected to complete during the
first half of 2024.
Namibia
Botswana
South Africa
Democratic Republic
of the Congo
Mauritius
Eswatini
Lesotho
New Engen markets
New Engen markets where
Vivo Energy is currently present
As we emerge from a
challenging year, I see an
incredibly exciting future
for Vivo Energy in 2024
and beyond.
STAN MITTELMAN
CHIEF EXECUTIVE OFFICER
See Stan Mittelman talk more about life at Vivo Energy
Bigger, Bolder, Better
7
As I reflect on a challenging 2023, I want
to start my CEO’s statement with a note
of thanks to the Board for its support and
guidance and to our employees for their
unwavering dedication, hard work and
resilience throughout the year. In a year
which has been filled with unexpected
twists and turns, their commitment has
been – and continues to be – the driving
force behind our success.
CONTINUED CHALLENGES
We continued to experience a number of external headwinds
during 2023.
On a macroeconomic level, our markets experienced lower growth
than expected. Although oil prices were significantly lower than in
2022, they remained high, impacting costs. We also saw currency
crises in some of our markets, which had a negative impact on
interest rates, exchange rates and inflation rates.
A number of our markets – particularly in West Africa –
continued to experience political and social unrest. In some cases,
this led to a direct impact on our business. For example, in Senegal,
political demonstrations resulted in several of our service stations
being vandalised.
The continent suffered from several natural disasters during 2023,
including Cyclone Freddy in March that caused flooding in a few of
our markets; a devastating earthquake in Morocco in September;
and wildfires in North Africa. Although our employees were safe,
these events sadly resulted in multiple fatalities in these markets.
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CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
BUSINESS PERFORMANCE
Through our focus on preventing incidents from
happening, as opposed to fixing them after they’ve
occurred, we continue to have an industry-leading
health, safety, security, environment and quality
(HSSEQ) performance.
Despite exceeding our own HSSEQ targets, we
were deeply saddened by the explosion at the
Société Guinéenne des Pétroles depot in Conakry
in December, where Vivo Energy is a minority
shareholder. Following the incident, we immediately
helped the government’s technical committee and
continue to collaborate with authorities to contribute
to the long-term recovery efforts.
Despite a particularly challenging first half of the
year, we recorded improvements in the second half
of 2023, and our overall volumes were 2% ahead
of the prior year, increasing from 10,777 million
litres to 10,973 million litres. This was mainly due to
a supply contract in one of our markets, improved
performance in the aviation and marine business, and
growth in the liquefied petroleum gas (LPG) business.
Retail and Lubricants volumes were slightly behind the
prior year.
Gross cash profit of $752 million was down 8% against
2022, mainly due to the impact of depreciating local
currencies. This was the main contribution to the
9% decrease in gross cash unit margin to $69 per
thousand litres.
Together with higher selling and marketing costs, these
factors resulted in adjusted EBITDA of $371 million, a
21% decrease against the previous year.
Despite external challenges, we continued to
meaningfully invest for growth, opening a net total of
149 service stations and 133 convenience retail shops
and food outlets during the year.
RESILIENCE AND DETERMINATION –
PREPARING FOR THE FUTURE
There is much we can be proud of from the year
that prepares us well for 2024, and beyond.
Following the announcement of plans to acquire
the Engen business in February 2023, we have
made significant progress with regulatory approvals.
On completion of the transaction, this transformative
strategic move positions us well for growth and
success in the years ahead.
Having grown our LPG businesses in Reunion
and Namibia during 2023, we were delighted to
successfully conclude the acquisition of the Somagaz
group in December, taking our network to 24 African
and Indian Ocean markets. The Mayotte-based
Somagaz business owns and operates a depot and
filling centre in Longoni, distributes LPG cylinders to
approximately 160 retail outlets, and serves industrial
customers across Mayotte through cylinder and
bulk distribution.
We made good progress with improving our gender
diversity, with 31% female representation at the end
of the year. I was proud to launch the Women at
Vivo Energy (W@VE) programme in November,
which aims to create a workplace that values diversity,
removes barriers and empowers all employees
to thrive.
Technology is vital to our future success and we
made significant strides forwards in developing our
technology and systems to improve and simplify
how we run our business.
Finally, in November, Vivo Energy Maroc confirmed
that it had chosen to benefit from a settlement
agreement with the Conseil de la Concurrence to
close the outstanding investigation of Morocco’s
petroleum retail industry in a constructive and
cooperative manner and prevent lengthy litigation.
Refer to note 28 on page 92 for further information.
BIGGER – BOLDER – BETTER
As we look forward, I am convinced that 2024 will
be a transformative year for Vivo Energy and that
we have an incredibly exciting future ahead of us.
Our theme for the year is Bigger – Bolder – Better.
Following successful completion of the Engen
transaction, we will significantly increase the size of
the Group. We will become more confident and
courageous. And we plan to ensure the best of both
Vivo Energy and Engen’s top traits are incorporated
into our new business.
“ Our new vision is to be Africa’s
leading and most respected
energy business.”
A REFRESHED VISION
Since our foundation, our vision has been to become
the most respected energy business in Africa.
This vision – a logical consequence of doing things
the right way, realising the full potential of our people
and business partners, and creating a benchmark
for quality, excellence, safety and responsibility – has
served us very well. Indeed, we must continue striving
to be called Africa’s most respected energy business.
We believe that now is the time to step up our
ambition. Therefore, at the start of 2024, I launched
our refreshed vision: ‘to be Africa’s leading and most
respected energy business’.
I am confident that together with the Executive
Committee and our talented and committed
employees, we will be able to achieve this.
STAN MITTELMAN
CHIEF EXECUTIVE OFFICER
20 MARCH 2024
This Strategic Report has been approved by
the Board.
BIGGER
Significantly increasing the size of the Group,
in particular following completion of the
Engen transaction
BOLDER
Increasing confidence and courage as we assume
our new leading position
BETTER
Ensuring the best of Vivo Energy and Engen’s top
traits are incorporated into our new business
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Our strategy: We are building for the future
Maximise
value
from Retail fuel
RETAIL
– Optimising and upgrading our network
– Adding new sites each year
– Shining our existing sites
Evolve the
business model
to serve customer needs
SOLAR
– Developing our solar hybrid power product offering
– Piloting more electric vehicle (EV) charging sites
NEW MOBILITY
– Investigating and developing new mobility solutions
Accelerate
growth
from the rest of the core business
NON-FUEL RETAIL OFFERINGS
– Building a substantial food business,
on and off our service stations
– Increasing our convenience retail presence
– Diversifying other Non-fuel retail offerings
COMMERCIAL FUEL & LUBRICANTS
– Driving B2B core profitable market share growth
– Growing reseller volume market share
– Growing our lubricants business (including exports)
– Increasing focus on aviation and marine
LIQUEFIED PETROLEUM GAS (LPG)
– Reducing product mix carbon intensity
through LPG growth
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OUR STRATEGY CONTINUED
MAXIMISE VALUE FROM RETAIL FUEL
We are improving the
customer experience at
our sites.
During 2023, we added a net total of
149 service stations to our network and
continued to optimise and upgrade our
existing sites.
See Juvenal Guei, our Country Marketing Manager in
Côte d’Ivoire, talk about how we optimise our network
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OUR STRATEGY CONTINUED
ACCELERATE GROWTH FROM
THE REST OF THE CORE BUSINESS
Growing Commercial
Fuel, Lubricants, LPG and
Non‑fuel retail.
We completed a strategic LPG acquisition in Mayotte
and further grew the LPG business in Namibia and
Reunion, delivering a more environmentally friendly
transition fuel.
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OUR STRATEGY CONTINUED
OUR STRATEGY CONTINUED
EVOLVE THE BUSINESS MODEL
TO SERVE CUSTOMER NEEDS
We are dedicated
to continuing our
investment in solar.
Continuing our focus on mining
customers to develop and deliver solar
hybrid solutions. We also progressed
our new mobility offer, piloting more
EV charging stations and developing
our two- and three-wheeler value
proposition.
See Demi Edosomwan, our Head of New Ventures,
talk about what the future holds for Vivo Energy.
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Our stakeholders
We listen to and collaborate with a wide range of
stakeholders to grow our business and deliver value.
WE HAVE FIVE KEY STAKEHOLDER GROUPS
Engagement with our stakeholders plays a vital
role throughout the business. We regularly
interact with our shareholders and investors,
and the five key stakeholder groups listed here.
This helps us gain a better understanding of the
impact of our decisions on stakeholder interests
as well as insight into their needs and concerns.
The output of engagement with stakeholders
informs Group decisions and relevant feedback
is reported to the Board and/or its Committees.
1
OUR PEOPLE
2
CUSTOMERS
We want our people to be safe, engaged
and focused on doing business the right way.
We want to understand our customers deeply
so we can continue to innovate our product
and service offering and provide an exceptional
customer experience.
3
PARTNERS
4
COMMUNITIES
5
GOVERNMENTS
We want to support our partners, always
focusing on doing business the right way as we
strive to be Africa’s leading and most respected
energy business.
We want to be a positive force and make a
real and lasting difference in the communities
where we operate – supporting them,
promoting a better quality of life and
a more sustainable future.
We want to maintain good relationships with
host governments in the countries where
we operate, continuing to help develop these
markets through the collection of tax and
duties, and providing significant employment.
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Our KPIs
These KPIs show our performance for 2023 in comparison to the
past four years, together with a brief explanation of the key drivers.
We’ve chosen to use Growth, Financial and HSSEQ KPIs in order
to provide a rounded view of our performance.
Non-GAAP measures are explained and
reconciled on pages 21 and 22.
Growth KPIs
VOLUME
MILLION LITRES
2023
2022
2021
2020
2019
TOTAL RETAIL SERVICE STATIONS
NUMBER
GROSS CASH UNIT MARGIN
US$/’000 LITRES
10,973
2023
10,777
10,302
9,637
2022
2021
2020
10,417
20191
2,738
2023
2,589
2,463
2,330
2,226
2022
2021
2020
2019
69
76
75
72
71
DEFINITION
Total product volumes sold during the year.
DEFINITION
Total number of revenue-generating retail service stations.
DEFINITION
Gross cash profit per 1,000 litres of sales volume.
Performance drivers
– Macroeconomic drivers influencing demand
– Sales and promotion activities
– Loyalty card system
– New and existing contracts with Commercial customers and
cross-selling
Performance drivers
– Self-funding capital expenditure through operating cash flow
– Significant white-space opportunity
– Securing land leases and strategically located sites
Performance drivers
– Pricing structure in regulated markets ensures stable margins
– Competitive pricing strategies in deregulated markets
– Foreign currency exposure risk management to ensure US dollar
1 2019 includes more than 200 retail service stations acquired as
part of the Engen acquisition.
margins are protected
– Optimised supply chain and efficient operations
– Increased penetration of differentiated fuels
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OUR KPIS CONTINUED
Financial KPIs
GROSS CASH PROFIT
US$ MILLION
2023
2022
2021
2020
2019
ADJUSTED EBITDA
US$ MILLION
NET (LOSS)/INCOME
US$ MILLION
ADJUSTED FREE CASH FLOW
US$ MILLION
752
2023
817
777
697
743
2022
2021
2020
2019
371
2023 -35
470
447
360
431
2022
2021
2020
2019
2023
2022
-126
2021
2020
2019
105
152
90
150
224
311
112
325
DEFINITION
Gross profit after direct operating expenses and before
non-cash depreciation and amortisation recognised in cost of sales.
Reference to ‘cash’ in this measure refers to non-cash depreciation
and amortisation as opposed to the elimination of working
capital movements.
Performance drivers
– Volumes and gross cash unit margins performance
DEFINITION
Earnings before interest, tax, depreciation and amortisation adjusted
for impact of special items.
DEFINITION
Net income or loss in accordance with IFRS/GAAP.
Performance drivers
– Volumes and gross cash unit margins performance
– Optimised cost structure and cost management
– Share of profit from investments in joint ventures and associates
Performance drivers
– EBITDA performance
– Effective tax rate management
– Optimised capital and finance structure
DEFINITION
Cash flow from operating activities less net additions to property,
plant and equipment and intangible assets and excluding the impact
of special items.
Performance drivers
– High conversion from EBITDA to free cash flow
– Structurally negative working capital
HSSEQ KPIs
TOTAL RECORDABLE CASE FREQUENCY (TRCF)
PER MILLION EXPOSURE HOURS
TOTAL PRODUCT LOST
METRIC TONNES
TOTAL SCOPE 1 & 2 EMISSIONS1
KT OF CO2 EQUIVALENT
EMPLOYEE & CONTRACTOR FATALITIES
NUMBER
2023
2022
2021
2020
2019
0.09
2023
0.18
0.04
0.10
0.04
2022
2021
2020
2019
13.5
2023
0
18.4
1.7
7.5
2022
2021
2020
2019
21.99
2023
21.88
21.86
21.68
22.73
2022
2021
2020
2019
0
1
0
0
0
DEFINITION
TRCF per million exposure hours.
DEFINITION
Product lost to the environment.
DEFINITION
Emissions from combustion of fuel, electricity, heat, steam
and cooling.
DEFINITION
Fatal occupational injuries and illnesses.
Performance drivers
– Using potential incident reporting to prevent incidents
from happening
– Training and competency development for continuous
HSSEQ improvement
– Focus on personal safety, road transport safety and security
Performance drivers
– Ensuring that safe working practices are followed: stringent
contractor safety requirements; driver training and monitoring
Performance drivers
– Increasing efficiencies across our operations
– Adding solar initiatives
1 Previous years have been rebased as per the Vivo Energy
Greenhouse Gas Inventory Management Plan with 2019 as
the base year.
Performance drivers
– Risk assessment and mitigation
– Potential incident reporting to prevent incidents from happening
– HSSEQ competency review and training programme
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CONSOLIDATED RESULTS OF OPERATIONS
Financial
review
SUMMARY INCOME STATEMENT
US$ million
Revenues
Cost of sales
Gross profit
Selling and marketing cost
General and administrative cost
Share of profit of joint ventures and associates
Other income/(expense)
EBIT
Finance expense – net
EBT
Income taxes
Net (loss)/income
NON-GAAP MEASURES
US$ million, unless otherwise indicated
Volumes (million litres)
Gross cash profit
EBITDA
Adjusted EBITDA
ETR (%)
Adjusted net income
Non-GAAP measures are explained and reconciled on pages 21 and 22.
2023
11,010
(10,348)
662
(315)
(216)
26
5
162
(131)
31
(66)
(35)
2023
10,973
752
303
371
212%
26
2022
10,969
(10,237)
732
(247)
(212)
27
(5)
295
(87)
208
(103)
105
Change
0%
+1%
-10%
+28%
+2%
-4%
+200%
-45%
+51%
-85%
-36%
-133%
2022
Change
10,777
817
427
470
49%
154
+2%
-8%
-29%
-21%
n/a
-83%
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FINANCIAL REVIEW CONTINUED
OVERVIEW OF OPERATIONS BY SEGMENT
US$ million, unless otherwise indicated
Volumes (million litres)
Retail
Commercial
Lubricants
Total
Gross profit
Retail (including Non-fuel retail)
Commercial
Lubricants
Total
Gross cash unit margin ($/’000 litres)
Retail fuel (excluding Non-fuel retail)
Commercial
Lubricants
Total
Gross cash profit
Retail (including Non-fuel retail)
Commercial
Lubricants
Total
Adjusted EBITDA
Retail
Commercial
Lubricants
Total
Non-GAAP measures are explained and reconciled on pages 21 and 22.
2023
2022
Change
6,234
4,592
147
10,973
6,370
4,258
149
10,777
392
188
82
662
66
47
593
69
448
217
87
752
197
111
63
371
435
210
87
732
71
56
608
76
489
237
91
817
249
151
70
470
-2%
+8%
-1%
+2%
-10%
-10%
-6%
-10%
-7%
-16%
-2%
-9%
-8%
-8%
-4%
-8%
-21%
-26%
-10%
-21%
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
18
FINANCIAL REVIEW CONTINUED
ANALYSIS OF CONSOLIDATED RESULTS OF OPERATIONS
ANALYSIS OF CONSOLIDATED FINANCIAL POSITION
VOLUMES
Despite a challenging first half of the year, overall
volumes were 2% ahead of the prior year, increasing
from 10,777 million litres to 10,973 million litres.
The increase is attributable to the Commercial
segment with total volumes 8% ahead of the prior year.
This increase was mainly due to a supply contract in one
of our markets, improved performance in the Aviation
and Marine business, and growth in the LPG business.
The Retail and Lubricants segment volumes were slightly
behind the prior year by 2% and 1% respectively, mainly
due to an economic slowdown in some of our markets.
GROSS PROFIT
Gross profit decreased by 10% to $662 million
(2022: $732 million) mainly due to the impact of
depreciating local currencies and decreasing crude oil
price effects from the first half of the year.
GROSS CASH PROFIT
Gross cash profit was down 8% year-on-year, decreasing
from $817 million to $752 million, largely due to the
impact of depreciating local currencies. This primarily
contributed to the decrease in the gross cash unit
margin from $76 per thousand litres in 2022 to $69 per
thousand litres in 2023. Retail fuel unit margins were 7%
lower than the prior year, mainly explained by a declining
oil price environment. The Commercial segment unit
margin decreased to $47 per thousand litres, due to the
low margin supply contract and the impact of a declining
price environment. The unit margin in the Lubricants
segment decreased by 2%, mainly due to a higher cost
of product.
SELLING AND MARKETING COST
Selling and marketing cost including special items1,
increased by $68 million, from $247 million in 2022
to $315 million, primarily due to a government
settlement and a higher expected credit loss for
receivables. This was partially offset by depreciating
local currencies. Further details related to the
government settlement can be found in note 28 of the
consolidated financial statements.
1 Special items are explained and reconciled on pages 21 and 22.
2 Days sales outstanding (DSO) and days purchases outstanding
(DPO) are based on monthly averages and trade elements only.
GENERAL AND ADMINISTRATIVE COST
General and administrative cost, including
special items1, was 2% higher than the prior year
(2022: $212 million), mainly due to an increase in
manpower and restructuring costs partially offset by
lower Vitol Offer related expenses1 and depreciating
foreign currency effects.
SHARE OF PROFIT OF JOINT
VENTURES AND ASSOCIATES
Share of profit of joint ventures and associates
decreased by 4% year-on-year mainly due to lower
share of profit of joint ventures in Morocco. This was
offset by the positive performance from the food joint
ventures in certain markets.
ADJUSTED EBITDA
Adjusted EBITDA decreased by 21% to $371 million
(2022: $470 million) mainly due to a lower gross profit
and higher selling and marketing costs, partially offset
by an increase in other income.
NET FINANCE EXPENSE
Net finance expense increased by $44 million to
$131 million, from $87 million in 2022. The increase
is largely attributable to a higher average level of
indebtedness compared to the prior period as a result
of the Bridge loan being in place from October 2022.
Increased utilisation of short-term bank borrowings
and higher interest rates further contributed to the
increase. Further details on borrowings can be found
in note 22 of the consolidated financial statements.
INCOME TAXES
The ETR increased to 212% in the current year
(2022: 49%). This was mainly due to a lower earnings
before tax of $31 million (2022: $208 million)
resulting in a higher relative impact of withholding
tax, non-deductible expenses and non-recognised
tax losses. An increase in the value of non-deductible
expenses and interest further contributed to the
current year performance.
ASSETS
TRADE RECEIVABLES
Trade receivables increased by $201 million, from
$598 million in 2022 to $799 million in 2023, primarily
due to increase in the average DSO2 and increased
sales volumes in the Commercial segment during the
period. Average monthly DSO2 for the period was
18 days (2022: 15 days).
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment
increased by $101 million, from $920 million
in 2022 to $1,021 million in 2023, largely due to
additions in Retail and Commercial segments.
The increase is offset by depreciation and negative
foreign currency impacts.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents increased by $44 million,
from $500 million in 2022 to $544 million in 2023.
This increase was largely attributable to a higher cash
inflow from operations, due to lower core working
capital requirements and other government benefits
receivable, partially offset by investing activities and
higher finance costs.
RIGHT-OF-USE ASSETS
Right-of-use assets increased by $16 million, from
$235 million in 2022 to $251 million in 2023 due to
new leases as part of the continued expansion of our
Retail network and the business acquisition in Mayotte.
The increase is partially offset by depreciation and
negative foreign currency impacts.
INVENTORIES
Inventories decreased by $85 million, from
$687 million in 2022 to $602 million in
2023 predominantly due to lower levels of stock
on hand and a decrease in stock value as a result of
declining crude oil prices. Average inventory days for
the period was 23 days (2022: 26 days).
OTHER ASSETS
The $76 million decrease in other assets, from
$726 million in 2022 to $650 million in 2023, is mainly
attributable to a decrease in other government
benefits receivable and prepayments related to
stock purchases.
EQUITY
Total equity decreased by $52 million, from
$199 million in 2022 to $147 million in 2023, primarily
due to a negative total comprehensive income and
dividends paid to non-controlling interests, partially
offset by a $48 million capital contribution received in
the first half of the year.
LIABILITIES
TRADE PAYABLES
The increase in trade payables of $237 million from
$1,687 million in 2022 to $1,924 million in 2023 is
mainly attributable to favourable payment terms
from some of our suppliers. The increase is partially
offset by the depreciation of local currencies.
Average monthly DPO2 for the period was 62 days
(2022: 61 days).
OTHER LIABILITIES
Other liabilities increased by $83 million, from
$337 million to $420 million predominantly due to a
government settlement and an increase in customer
deposits as a result of growth in the LPG business.
Further details related to the government settlement
can be found in note 28 of the consolidated
financial statements.
BORROWINGS
Borrowings decreased by $53 million, from
$1,529 million in 2022 to $1,476 million in 2023,
mainly due to the $63 million repayment of the
revolving credit facility and refinancing of the Bridge
loan, partially offset by an increase in short-term
bank borrowings. Further information related
to borrowings can be found in note 22 of the
consolidated financial statements.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
19
FINANCIAL REVIEW CONTINUED
LIQUIDITY AND CAPITAL RESOURCES
ADJUSTED FREE CASH FLOW
In addition to the commentary on the Group’s consolidated statement of cash flows below, further disclosures
in relation to the Group’s processes for managing its capital, its financial risk management objectives, details of its
financial instruments and its exposures to credit risk, liquidity risk and market risk can be found in note 3 of the
consolidated financial statements.
US$ million
Net (loss)/income
Adjustment for non-cash items and other
Current income tax paid
Net change in operating assets and liabilities and other adjustments1
Cash flow from operating activities
Net additions of PP&E and intangible assets
Free cash flow
Special items2
Adjusted free cash flow
2023
(35)
206
(100)
359
430
(227)
203
21
224
2022
105
225
(93)
(229)
8
(160)
(152)
26
(126)
1 Net change in operating assets and liabilities and other adjustments includes finance expense. Refer to note 27.
2 Cash impact of special items. Special items are explained and reconciled on pages 21 and 22.
Adjusted free cash flow increased by $350 million, from an outflow of $126 million in 2022 to an inflow of
$224 million in 2023. The increase in the adjusted free cash flow was primarily driven by higher cash inflows from
operating activities, which were mainly due to the movements in net change in operating assets and liabilities
and other adjustments, slightly offset by the net loss for the year. The positive net change in operating assets
and liabilities and other adjustments of $359 million was predominantly attributable to a decrease in other
government benefits receivable. A decrease in the core working capital requirements further contributed to an
increase in the operating cash inflow. During the year, cash flow from operating activities fully funded net capital
expenditure of $227 million.
Income tax paid amounted to $100 million for the year ended 31 December 2023 (2022: $93 million).
CAPITAL EXPENDITURES
US$ million
Growth
Maintenance
Special projects
Total
US$ million
Retail
Commercial
Lubricants
Solar
Other (technology, supply and distribution and general corporate costs)
Total
Of which growth capital expenditure was:
Retail
Commercial
Lubricants
Solar
Other (technology, supply and distribution and general corporate costs)
2023
146
78
7
231
2023
124
53
2
5
47
231
146
92
43
2
5
4
2022
100
64
–
164
2022
96
34
2
–
32
164
100
72
26
2
–
–
The majority of the Group’s capital expenditure related to Growth projects which included the Retail network
expansion and accelerated growth in our LPG business. As a result of the Group’s increased focus on alternative
energy, strategic investments were directed towards Solar plants aimed at generating electricity in remote areas.
Capital expenditure related to Maintenance increased in the current year, mainly due to our continued focus
on maintaining our stringent standards at our Retail sites and the preservation of our supply and distribution
infrastructure. The ‘Shining sites’ project was established in 2019 to enhance our Retail network and has resulted
in 292 sites being ‘shined’ during the year.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
20
FINANCIAL REVIEW CONTINUED
LIQUIDITY AND CAPITAL RESOURCES CONTINUED
NET DEBT AND AVAILABLE LIQUIDITY
US$ million
Long-term debt and Subordinated shareholder loan1
Lease liabilities
Total debt excluding short-term bank borrowings
Short-term bank borrowings
Less: cash and cash equivalents
Net debt
US$ million
Net debt (excluding lease liabilities and Subordinated shareholder loan1)
Adjusted EBITDA2 (excluding IFRS 16 impact)
Debt cover1
1 Proceeds from the Subordinated shareholder loan relate to 2023. (2022: Includes the RCF)
2 Non-GAAP measures are explained and reconciled on pages 21 and 22.
US$ million
Cash and cash equivalents
Available undrawn credit facilities
Available short-term capital resources
The table below sets the Group’s financial liabilities into relevant maturity groupings based on the remaining
period at the reporting date to the contractual maturity date. The amounts disclosed are the contractual
undiscounted cash flows:
US$ million
31 December 2023
Less than
3 months
Between
3 months
and 1 year
Between
1 and 2 years
Between
2 and 5 years
Over
5 years
Borrowings
Trade payables
Lease liabilities
Other financial liabilities
Other liabilities1
Total
586
1,768
12
16
51
2,433
21
156
18
–
31
226
584
–
37
–
9
630
388
–
48
–
2
438
–
–
150
–
157
307
1 Other liabilities (note 25) exclude the elements that do not qualify as financial instruments.
Total
1,579
1,924
265
16
250
4,034
The Group has purchase obligations, for capital and operational expenditure, under various agreements, made in
the normal course of business. The purchase obligations are as follows, as at:
US$ million
Purchase obligations
31 December 2023
31 December 2022
18
13
2023
907
199
1,106
569
(544)
1,131
2023
769
319
2.41x
2023
544
1,834
2,378
2022
1,016
183
1,199
513
(500)
1,212
2022
1,029
423
2.43x
2022
500
1,614
2,114
Long-term debt mainly consists of $350 million in notes and $396 million from the Term loan. The proceeds of
the loan were received in June 2023 and have a five-year maturity date. Refer to note 22 of the consolidated
financial statements for further information and disclosure of the Group’s borrowings and debt covenants.
Short-term bank borrowings include uncommitted, unsecured short-term bank facilities extended by local banks
to operating entities, ranging from $3 million to $458 million, and carry interest rates between 5.00% and 33.06%
per annum. These facilities are automatically renewable, typically for a period of 12 months.
The available undrawn credit facilities of $1,834 million comprise the undrawn committed multi-currency
revolving credit facility of $300 million and $1,534 million of undrawn, unsecured and uncommitted short-term
bank facilities extended to our operating entities for working capital purposes.
Net debt decreased by $81 million from $1,212 million in 2022 to $1,131 million in 2023, mainly due to higher
cash and cash equivalents and a decrease in long-term debt, offset by an increase in short-term bank borrowings.
The decrease in long-term debt is mainly attributable to the refinancing of the Bridge loan and the repayment
of the revolving credit facility. The movement in cash and cash equivalents was mainly driven by a higher cash
inflow from operating activities due to a decrease in other government benefits receivable and core working
capital requirements. The Group’s debt cover (excluding the Subordinated shareholder loan and lease liabilities)
reduced to 2.41x (2022: 2.43x), primarily as a result of a lower net debt and adjusted EBITDA.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
21
FINANCIAL REVIEW CONTINUED
NON-GAAP FINANCIAL MEASURES
Non-GAAP measures are not defined by International
Financial Reporting Standards (IFRS) and, therefore,
may not be directly comparable with other companies’
non-GAAP measures, including those in our industry.
Non-GAAP measures should be considered in
addition to, and are not intended to be a substitute for,
or superior to, IFRS measurements.
Term
Gross cash profit
EBITDA
The exclusion of certain items from non-GAAP
performance measures does not imply that these
items are necessarily non-recurring. From time to
time, we may exclude additional items if we believe
doing so would result in a more transparent and
comparable disclosure.
The Directors believe that reporting non-GAAP
financial measures in addition to IFRS measures
provides users with an enhanced understanding
of results and related trends and increases the
transparency and clarity of the core results of our
operations. Non-GAAP measures are used by
the Directors and management for performance
analysis, planning, reporting and key management
performance measures.
Description
This is a measure of gross profit before non-cash depreciation and amortisation recognised in cost of sales. Reference
to ‘cash’ in this measure refers to non-cash depreciation and amortisation as opposed to the elimination of working
capital movements. Gross cash profit is a key management performance measure.
Earnings before finance expense, finance income, income tax, depreciation and amortisation. This measure
provides the Group’s operating profitability and results before non-cash charges and is a key management
performance measure.
Adjusted net income
Net income or loss adjusted for the impact of special items.
Special items
Net debt
Adjusted EBIT
Gross cash unit margin
Adjusted EBITDA
Adjusted free cash flow
Income or charges that are not considered to represent the underlying operational performance and, based
on their significance in size or nature, are presented separately to provide further understanding of the financial
and operational performance.
Total borrowings and lease liabilities less cash and cash equivalents.
Earnings before finance expense, finance income and income taxes adjusted for special items. The Group views
adjusted EBIT as a useful measure because it shows the Group’s profitability and the ability to generate profits by
excluding the impact of tax and the capital structure, as well as excluding income or charges that are not considered
to represent the underlying operational performance.
Gross cash profit per unit. Unit is defined as 1,000 litres of sales volume. This is a useful measure as it indicates the
incremental profit for each additional unit sold.
EBITDA adjusted for the impact of special items. This is a useful measure as it provides the Group’s operating
profitability and results, before non-cash charges and is an indicator of the core operations, exclusive of special items.
Cash flow from operating activities less net additions to PP&E and intangible assets and excluding the impact of
special items. This is a key operational liquidity measure, as it indicates the cash available to pay dividends, repay
debt or make further investments in the Group.
Debt cover
Net debt, excluding lease liabilities and Subordinated shareholder debt, divided by the last 12 months’
adjusted EBITDA excluding the accounting impact of IFRS 16.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
2 2
FINANCIAL REVIEW CONTINUED
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
US$ million, unless otherwise indicated
Gross profit
Add back: depreciation and amortisation in cost of sales
Gross cash profit
Volumes (million litres)
Gross cash unit margin ($/’000 litres)
US$ million
EBT
Finance expense – net
EBIT
Depreciation, amortisation and impairment
EBITDA
Adjustments to EBITDA related to special items:
Settlement1
Vitol Offer related expenses and other acquisitions2
Management Equity Plan3
Restructuring4
Community relief contribution5
Hyperinflation6
Impairment of other government benefits receivable7
Adjusted EBITDA
2023
662
90
752
10,973
69
2023
31
131
162
141
303
40
12
10
5
1
–
–
371
2022
732
85
817
10,777
76
2022
208
87
295
132
427
–
35
–
–
–
1
7
470
US$ million
Net (loss)/income
Adjustments to net income related to special items:
Settlement1
Vitol Offer related expenses and other acquisitions2
Management Equity Plan3
Restructuring4
Community relief contribution5
Hyperinflation6
Impairment of other government benefits receivable7
Tax on special items
Adjusted net income
US$ million
EBIT
Adjustments to EBIT related to special items:
Settlement1
Vitol Offer related expenses and other acquisitions2
Management Equity Plan3
Restructuring4
Community relief contribution5
Hyperinflation6
Impairment of other government benefits receivable7
Adjusted EBIT
2023
(35)
40
12
10
5
1
(7)
–
–
26
2023
162
40
12
10
5
1
–
–
230
2022
105
–
43
–
–
–
1
7
(2)
154
2022
295
–
35
–
–
–
1
7
338
Reconciliation of net debt and debt cover is included on page 20. The reconciliation of adjusted free cash flow is
included on page 19.
1 The expense related to a government settlement is treated as a special item, as it does not form part of the core operational business activities and performance for the period. Refer to note 28 of the consolidated financial statements for further information.
2 These expenses are related to the Vitol Offer transaction and other acquisitions and are treated as special items as they do not form part of the core operational business activities and performance for the period. Included in 2022 are expenses related to financing the Bridge loan.
3 During 2023, the Group introduced a cash-settled Management Equity Plan (‘MEP’) under which Vivo Energy Limited granted phantom options to Executive Directors. The Binomial Option Pricing Model is used to calculate the fair value of the options and the amount to be expensed.
This expense is now treated as a special item as it is no longer considered to form part of the core operational business activities and performance for the period.
4 Restructuring costs were incurred mainly as a result of organisational alignment. The impact from these activities do not form part of the core operational business activities and performance for the period and are, therefore, treated as a special item.
5 The expense related to donations made to assist and provide relief to communities affected by the earthquake in Morocco and is treated as a special item as they do not form part of the core operational business activities and performance for the period.
6 The impacts of accounting for hyperinflation for Vivo Energy Ghana and Zimbabwe, in accordance with IAS 29, are treated as special items since they are not considered to represent the underlying operational performance of the Group and based on their significance in size and unusual
nature are excluded as the local currency depreciation against the US dollar does not align to the published inflation rates during the period.
7 The Group has recognised an impairment of other government benefits receivable as a result of a retrospective price structure change by certain governments to finance their outstanding debt. Such retrospective changes of existing price structures are not representative of the core
operational business activities and performance for the period and are, therefore, treated as special items.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
23
OUR VISION, CULTURE AND VALUES
Our vision,
culture and
values
When Vivo Energy was created
in 2011, we quickly developed,
introduced and embedded our
‘Focus, Simplify and Perform’
operating culture, and this has been
our guiding principle ever since.
It has enabled us to stay one step
ahead and will continue to be a key
part of our business for many years
to come.
THE VIVO ENERGY WAY
Since the foundation of Vivo Energy in 2011, our
operating culture of Focus, Simplify and Perform has
remained a central part of the way we do business.
We achieve success by constantly reinforcing our
fast, agile, decentralised business model, and have
continued to focus on simplification – adapting our
model where required – to make sure we structure
ourselves for success in the years ahead.
Our values of honesty, integrity and respect for
people guide our teams as they work towards our
vision to be Africa’s leading and most respected
energy business.
Our people are regularly kept informed about our
business through their managers, employee townhall
meetings and the Company intranet.
As we work towards finalising the Engen transaction,
we have refreshed our vision and culture and will
review our values during 2024 to ensure they
remain relevant, fit for purpose and aligned to our
evolving organisation.
We seek to maintain constructive relationships with
labour unions formally representing our employees
and have localised union agreements and guidelines in
place, as applicable.
Approximately 30% of the Group’s employees
are unionised.
DOING BUSINESS THE RIGHT WAY
Our reputation is our most important asset and
we work hard to maintain it at every opportunity.
We demonstrate the highest standards of corporate
behaviour at all times and in every interaction with our
employees, our customers and broader stakeholders.
Our Code of Conduct, Counterparty Code of
Conduct and General Business Principles (all available
on our website) underpin everything we do and are
the foundation of our business.
All new employees complete an online induction
programme, which explains our policies and helps
them integrate into the organisation quickly and
comprehensively. The induction programme includes
training in relation to our Code of Conduct and key
anti‑bribery and corruption (ABC) and anti‑money
laundering (AML) initiatives.
We have a detailed counterparty screening process
in place, which is formalised in the Vivo Energy Know
Your Counterparty (KYC) policy. The screening
process gives us confidence that we know who we are
doing business with and that the ethics and values of
our counterparties align to our core values. As part of
the screening process, we request new counterparties
to agree to a compliance statement, which sets
out our approach towards ABC, AML and conflict
of interest.
Employees, third parties and members of the public
have access to our independent, 24/7 anonymous
whistle‑blowing helpline. They can use this to report
any concerns by telephone, online via web reporting
or via a designated Vivo Energy whistle‑blowing app,
which is available for both Android and iOS devices.
During the year we published our Information Security
Awareness policy and rolled out an ongoing training
programme to raise awareness of data protection,
focused on a different area of cybersecurity each
month. We also continued to conduct regular phishing
simulation tests during the year, with a corrective
action programme set up to address phishing
simulation failures.
We also developed and launched a Data Subject
Rights Request portal during the year.
We’re committed to providing equal opportunities
for all our employees. Should any employee
become disabled, our policy is to engage, re‑train
and make reasonable adjustments to enable
continued employment.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
24
OUR VISION, CULTURE AND VALUES CONTINUED
ANTI-CORRUPTION
AND ANTI-BRIBERY
We continue to maintain a multi‑site ISO 37001
anti‑bribery management systems certification,
covering all of our markets. During the year, we
carried out six reviews of operating units as part of
the annual maintenance audits. No non‑conformities
were noted during the reviews.
We rolled out a new online anti‑trust training course
and ethical behaviour training for all employees during
the year. Over 97% of employees have successfully
completed these courses.
In addition, each employee is required to submit a
Conflict of Interest declaration every year, confirming
their understanding of our compliance policies.
These declarations are reviewed and approved by
line managers after which a detailed risk assessment
is conducted by the Ethics & Compliance Office.
Corrective measures are recommended and
implemented by the Ethics & Compliance Office
where required.
HUMAN RIGHTS
We strongly support the elimination of all forms
of modern slavery. Such exploitation is entirely at
odds with our core values of honesty, integrity and
respect for people, which are crucial to our success
and growth, and to achieving our vision to be Africa’s
leading and most respected energy business.
We are committed to respecting, upholding and
applying the highest human rights and ethical standards
across the economies and societies in which we
operate. Our approach is guided by the ten Principles
of the UN Global Compact, with which Vivo Energy
complies. Our Human Rights Policy Statement sets
out the core human rights principles which we strive
to uphold. The policy statement is available on our
external website.
Respect for human rights is also embedded in our
Code of Conduct and General Business Principles,
which recognise our responsibility to conduct business
as a responsible corporate citizen and to support
fundamental human rights in line with the legitimate
role of business. Both the Code and the Business
Principles explicitly address our commitment to
combatting modern slavery and human trafficking.
Our anonymous whistle‑blowing helpline includes
a specific reporting category for raising concerns in
relation to any form of unfair labour practices and
potential human rights violations. Any report received
in relation to these categories is directly reported to
the Chief Legal and Compliance Officer and the Head
of Internal Audit and is investigated or escalated to the
Chair of the Audit and Risk Committee and the CEO
as required.
Knowing who we
do business with
6,280
counterparty screening
checks conducted.
As we work towards completion of the
Engen transaction, we have updated our
vision to be Africa’s leading and most
respected energy business.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
25
Sustainability framework
We have a clear and simple framework: provide an umbrella for all
our Environmental, Social and Governance (ESG) and sustainability
activities; guide our approach; and provide more focus on the
sustainability topics that matter the most to us and our stakeholders.
See Our Sustainability framework online
People
Safe and empowered teams
We believe that by keeping our people safe,
supported and enabling their development, we are
able to deliver consistent success as an organisation.
KEY PRIORITIES
Ensuring the safety of people
Training and development
Enhancing gender diversity
Employee engagement
Planet
Minimising the Group’s impact
With fuel demand expected to grow across
our markets, we aim to meet it in the most
climate‑friendly way possible and minimise the
impact on our planet.
KEY PRIORITIES
Greenhouse gas management
Product spills
Supporting the energy transition
Societal impact
Partnerships
Leading by example
Engaging with and supporting the development of
our partners and local communities helps us gain a
better understanding of their needs and concerns.
This matters to us because we employ local people
and serve local businesses and individuals. Leading by
example across our value chain is key to us achieving
our vision to be Africa’s leading and most respected
energy business.
KEY PRIORITIES
Partnering with communities
Enabling local enterprise
Responsible purchasing
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
26
OUR SUSTAINABILITY FRAMEWORK CONTINUED
ENSURING THE SAFETY OF PEOPLE
We consider the safety of our employees, contractors
and customers a key focus.
We measure and assess our health, safety, security,
environment and quality (HSSEQ) performance
against established peer benchmarks and review
against international oil marketing companies. As a
result of our personal safety initiatives, in 2023, we
recorded a commendable Total Recordable Case
Frequency (TRCF) of 0.09 per million exposure hours,
improving against the prior year.
In order to continually improve our HSSEQ
performance, 16 security risk assessments, process
safety and HSSEQ management system audits were
conducted in our operating units to further reduce
risk, with action plans developed to address any issues.
We also underwent an ESG audit, receiving highly
commendable results.
For 2023, we chose to extend our annual Safety Day
activity and instead of focusing activity over a short
period of time, launched ‘Safety Day, Every Day’.
This ongoing programme focused on a different Life
Saving Rule each month, and was extremely well
received by our operating units, communities and
stakeholders. We experienced 50% fewer life-saving
rule violations in 2023, compared to the previous year.
As part of our Safety Day activity, our team in
Côte d’Ivoire launched a programme called Héros de
la Sécurité, engaging employees, service station teams,
drivers and school children to help them focus on
enhancing their safety culture.
We believe that in order to continue to deliver a
world-class health and safety performance, our
colleagues who are engaged in safety-critical tasks
must be fully trained and competent. We had
previously conducted a comprehensive competency
assessment and a combination of e-learning and
face-to-face training has been put in place to close any
skills gaps for these colleagues.
We also established a train-the-trainer programme
and ran workshops in Senegal and South Africa to
empower in-country trainers so that our operating
units have the flexibility to conduct their own critical
HSSEQ training activity. This programme – which
trained nearly 40 trainers across 18 countries – not
only enabled significant cost savings, but has improved
safe operations in our countries by providing local
high-quality expertise and training, without the need
for central trainers to travel in to run sessions.
In addition to the train-the-trainer programme,
17 HSSEQ online training modules were developed
during the year, including courses on working at
heights, working in confined spaces, management of
change, manual handling safety, dangers of excavations,
crane operation and heavy lifting.
We have continued to focus on employees’ health and
wellbeing, rolling out fitness to work for all colleagues
in safety-critical roles, in addition to conducting annual
health assessments for our employees.
A committee was set up, comprising three country
health advisers, the HSSEQ Training & Competency
Manager and the VP HSSEQ to support newly
appointed Country Health Advisers and provide
guidance in case of trans-African health concerns
or pandemics.
Finally, as road safety remains a significant risk, we
introduced an online journey management planning
tool for employees’ journeys. This ensures that
controls are in place for vehicle compliance, that
adequate breaks are taken and that the safest route
is followed.
Our ‘Safety Day, Every Day’
programme helped to reduce Life
Saving Rule violations.
People
We believe that by keeping
our people safe, supported
and enabling their
development, we are able
to deliver consistent success
as an organisation.
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OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
27
OUR SUSTAINABILITY FRAMEWORK CONTINUED
PEOPLE CONTINUED
TRAINING AND DEVELOPMENT
We employ around 2,850 people, and work hard to
support and develop them at every opportunity.
Learning and development is an integral part of
our approach to talent management, and we have
structured development plans in place to constantly
build the skills and capabilities of our people.
We invested around $2 million in training in 2023,
continuing to upskill employees on not just technical
and functional skills, but also leadership skills across
the business.
During the year, we conducted an accelerated
leadership programme for 38 of our mid-level
managers, to help improve their strategic leadership
skills, enabling them to grow and develop within
the business.
We also launched a mentoring programme for
delegates of the 2022 and 2023 accelerated leadership
programme, assigning a senior leader from within the
business to support them with their development.
ENHANCING GENDER DIVERSITY
We promote the development and efficient
deployment of our employees to create an inclusive
work environment, where everybody has an equal
opportunity to develop his or her skills and talents.
We strive to ensure balanced gender diversification
across our employee workforce. Although our gender
balance is steadily improving, we recognise that there
is further room for improvement. During the year,
we launched W@VE, our Women at Vivo Energy
programme, which aims to create a workplace that
values diversity, removes barriers and empowers all
employees to thrive.
Across the Group, at the end of 2023, women
represented 31% of total employees, up from 29% in
2022. Female representation among our office-based
and sales staff in 2023 increased from 35% to 38%.
EMPLOYEE ENGAGEMENT
We work hard to nurture an open culture where the
opinions of our people are heard and valued. In 2023,
we continued the rollout of our online platform –
Your Voice – to encourage employees to submit
ideas on a wide range of topics. These are reviewed
by country HR managers and discussed at country
leadership level. Where the ideas make business sense
and have the potential to improve ways of working,
they are implemented to help grow, develop and
improve the business.
We also continued the rollout of our Employee
Assistance Programme, which is now available
across 24 of the 26 countries where we have offices.
This programme provides practical information
and confidential counselling to employees and their
close family members on a wide range of work and
personal issues.
In September, we conducted our full employee
engagement survey, tracking six key areas: leadership
and culture; reward; role content; career; workplace;
and purpose and values. Employees were very keen
to participate in the survey, and we scored our highest
ever completion rate of 93%.
Across the survey our overall favourability score was
77% – up from 75% when last conducted in 2021 –
with scores across each category either increasing
or remaining the same.
Purpose and values remains the highest scoring
category, with nine out of ten employees stating that
they are proud to work for us, believing we are well
respected in the countries where we operate, deliver
world-class HSSEQ performance and that we will be
successful in the future.
We are pleased to report that only four of the 42
comparable questions recorded a significant decline
in favourability, compared to the last survey in 2021.
GENDER DIVERSITY
31%
of employees are women
OUR GENDER SPLIT
31 DECEMBER 2023
Board of Directors
Senior Executive Team1
Senior Executive
Team’s direct reports2
All other employees
Female Male Total
0
3
24
5
12
66
5
15
90
857
1,887
2,744
1
Includes Executive and Management Committees.
The CEO and Interim CFO are counted in the Board
of Directors row. While they are also members of the
Senior Executive Team, they are not counted in this
row, to avoid double-counting.
2 Not including personal assistants.
Note: 91 employees are Directors across the Group’s
subsidiaries, of which 71 are male and 20 female.
We employ around 2,850 people
and work hard to support and
develop them at every opportunity.
Our internship programme
has become a key feature
of our talent attraction and
recruitment strategy.
See Zarmeen Khan, our HR Talent
Intern, talk about what it’s like
working at Vivo Energy
TOTAL RECORDABLE CASE FREQUENCY (TRCF)
PER MILLION EXPOSURE HOURS
2023
2022
2021
2020
2019
0.09
0.18
0.04
0.10
0.04
EMPLOYEE AND CONTRACTOR FATALITIES
NUMBER
2023
2022
2021
2020
2019
0
1
0
0
0
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FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
28
OUR SUSTAINABILITY FRAMEWORK CONTINUED
We are pleased to report that our Scope 1 emissions
have reduced and while Scope 2 has increased
marginally due to the higher conversion factor that
was released, our operational intensity ratio (Scope 1
and 2) has remained the same as in 2022. Our overall
emissions (Scope 1, 2 and material Scope 3 categories)
have increased, due to business growth and increased
product sales across the Group, however, the intensity
ratio has decreased compared to 2022.
We continue to implement short-, medium- and
long-term initiatives aimed at managing Scope 1 and 2
impacts. These include reducing our own emissions in
accordance with our sustainability framework, along
with increasing efficiencies and solar initiatives across
the Group.
Considering the nature of the products we sell, our
indirect Scope 3 impact far outweighs our direct
emissions. While meeting the ongoing demand for
hydrocarbon fuels from our customers, we must
prioritise doing so in the most environmentally-friendly
way possible. We have broadened our supply of
lower-carbon fuel alternatives by acquiring the
Somagaz group, a fully integrated LPG operator in
Mayotte, and continue to enhance our solar offering
to meet the demands of our customers.
Currently, we stand among the select few companies
in Africa that incorporate additives into most of the
Retail fuels we sell to improve efficiency. As fuel
technology progresses, we remain at the forefront
and have recently introduced new fuel formulations
in Mauritius, Rwanda and Cape Verde, providing
additional benefits to customers.
We are already supplying lower-carbon energy
alternatives, and believe that as they become a more
widespread reality across Africa, we will be well
positioned to deliver the benefits to our customers.
It is crucial to understand the climate-related risks
and opportunities we are presented with and ensure
they are fully considered in our strategy. We have
therefore aligned with the TCFD framework and are
now integrating the outcomes across our businesses,
strategy and financial planning. For more information
see pages 35 to 38.
GREENHOUSE GASES (GHG)
In 2023, we further strengthened our gathering,
monitoring and reporting of our greenhouse gas
inventory across our operating units, adhering to the
guidelines established by the GHG Protocol. At the
end of December, a further operating unit in Mayotte
was added. Our GHG Inventory Management Plan
serves as the framework for gathering, calculating and
assessing our GHG emissions. Alongside our Scope 1
and 2 emissions, we report on ten Scope 3 emission
categories, in accordance with the GHG Protocol
Corporate Value Chain (Scope 3) Accounting and
Reporting Standard. Scope 3 category 6 (business
travel) has been removed due to falling outside the
materiality threshold. The availability and revision
of International Energy Agency (IEA) electricity
emission factors have further improved the accuracy
of our indirect emission data, with 2019 as our base
year. Our reporting includes emissions relating to
the use of sold products, where much of our value
chain emissions fall. Page 30 includes disclosure of
our Group-wide Scope 1 and 2 emissions, and all
calculated categories of Scope 3 emissions.
We have not included emissions from our central
offices located outside our OUs as these are small,
shared offices, responsible for minimal emissions.
This includes our small shared office in the UK and
as such has minimal GHG emissions.
Planet
With fuel demand
expected to grow across
our markets, we aim
to meet it in the most
climate‑friendly way
possible and minimise the
impact on our planet.
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FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
29
OUR SUSTAINABILITY FRAMEWORK CONTINUED
PLANET CONTINUED
PRODUCT SPILLS
We consider any release of product to the
environment as unacceptable and continue to
implement stringent process safety standards and
procedures, as well as ensuring our contractors have
advanced technical mitigations in place to prevent spills.
During 2023, we unfortunately experienced a road
transport incident, which resulted in 13.45 m3 of
product being spilt. We immediately took action to
minimise the impact of this spill on the environment.
Following the emergency response and subsequent
remediation, our team ensured that the site was
extensively cleaned, in accordance with national
legislative requirements.
Any incident – even the most minor – is diligently
investigated, with the ‘Learning From Incident’ being
developed and shared across the Group, to reduce
the risk of reoccurrence.
SUPPORTING THE ENERGY TRANSITION
We recognise that the sustainability of our business
depends on our understanding of the climate-related
risks and opportunities we face, together with
our commitment to ensuring that these are fully
considered in our strategy.
Today, our core businesses are focused on distributing
and marketing fuels and lubricants to our Retail and
Commercial customers in Africa.
We therefore perceive that the most material
transition risks to the Group are related to factors that
could reduce demand for the fuels we sell due to any
combination of climate-related technology, market and
policy and legal developments across our markets.
We have identified a number of activities and plans
across key climate-related areas, which both harness
transition opportunities and mitigate transition risks.
Using renewable power at our facilities
We are including on-site solar power at newly built
and rebuilt Retail sites where possible. In 2023, we
added solar to 95 sites and two depots.
Supporting electric vehicles (EV)
in our Retail segment
We have continued to pilot EV charging infrastructure,
rolling out more charging stations in a number of our
markets, such as Mauritius, Reunion and Morocco, to
understand its potential and ensure we are positioned
to address customer demand as it evolves.
Supplying low- or zero-carbon fuels in
Retail and Commercial segments
We are continually monitoring and responding to
Retail and Commercial customers’ demands for new
technologies and lower-carbon alternatives such as
LPG, solar or other commercially attractive options,
as part of the transition. During the year, we
investigated new mobility solutions including electric
buses and electric two- and three-wheeler battery
swapping solutions.
Achieving lower emissions logistics
We continue to engage with our fuel delivery fleet
suppliers to minimise the climate impact of trucks
used for transporting our fuel to end-users, and
are investigating technology solutions to reduce
truck trips taken. To minimise fuel usage, we are
prioritising pipeline and rail transport ahead of road,
where possible.
SOCIETAL IMPACT
We continued our Green Champions programme,
encouraging colleagues across the Group to develop
and implement local sustainability initiatives.
In Kenya, we installed a 150 kW solar
PV system at our Nairobi terminal. As a
result we have been able to reduce energy
consumption at the depot by around
13,000 kWh per month, reducing carbon
emissions and saving electricity cost.
In Tanzania, we launched a tree‑planting
initiative, involving around 800 students
from 10 secondary schools. With the
students we planted around 1,000 trees,
providing shade, enhancing air quality
and with the ability to yield fruit.
NUMBER OF PRODUCT SPILLS
GREATER THAN 100KG
2023
2022
2021
2020
2019
TOTAL PRODUCT LOST
METRIC TONNES
2023
2022
2021
2020
2019
1
0
2
2
3
13.5
0
18.4
1.7
7.5
STRATEGIC REPORT
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FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
30
OUR SUSTAINABILITY FRAMEWORK CONTINUED
PLANET CONTINUED
OPERATIONAL EMISSIONS – SCOPE 1 AND 2
KT CO2e, unless otherwise indicated
Total Scope 11
Total Scope 22,3,6
Total Scope 1 and 2 Emissions6
Total energy consumed4 (million kilowatt-hours)
Scope 1 and 2 Intensity (KT CO2e/10,000m3)
VALUE CHAIN EMISSIONS – SCOPE 3
KT CO2e, unless otherwise indicated
1A. Purchased goods6
1B. Purchased services
2. Capital goods
3. Fuel- and energy-related activities3,6
4. Upstream transportation and distribution
5. Waste generated in operations
8. Upstream leased assets
9. Downstream transportation and distribution
11. Use of sold products
13. Downstream leased assets
Total Scope 35,6 (reported categories)
Total Scope 1, 2 and 3 Emissions6
2019
11.22
11.51
22.73
64.76
0.022
2020
10.41
11.27
21.68
59.04
0.022
2021
10.44
11.42
21.86
60.91
0.021
2022
10.39
11.49
21.88
60.81
0.020
2023
10.32
11.67
21.99
60.75
0.020
2019
2020
2021
2022
2023
5,668.91
5,194.45
5,826.97
6,030.33
6,209.66
25.96
38.15
6.23
85.64
0.41
4.36
26.14
25.62
37.14
5.78
74.80
1.33
3.72
19.52
24.60
35.88
6.01
84.86
1.31
3.58
21.84
24.48
34.11
6.02
78.43
2.05
4.42
29.94
26.05
50.49
6.03
65.09
2.23
5.18
24.66
26,280.16
24,208.93
26,138.65
27,313.19
27,566.50
1.77
1.62
1.85
2.02
2.16
32,137.73
29,572.91
32,145.55
33,524.99
33,958.05
32,160.46
29,594.59
32,167.41
33,546.87
33,980.04
Scope 1, 2 and 3 Intensity6 (KT CO2e/10,000m3)
30.873
30.710
31.224
31.129
30.967
1 Direct emissions from activities owned and controlled by the organisation.
2
3
Indirect emissions purchases of energy in the form of electricity due to activities owned and controlled by the organisation.
IEA emission factors for electricity is published in October each year. Indirect emissions are calculated using the latest emission factors
which are backdated by two years and cause historic electricity related data to be different to those previously published. Rwanda,
Madagascar, Mali and Uganda factors were updated from 2019 as published by IEA. IEA emissions factors related to transmission and
distribution losses have been used while previously Defra factors applied that was discontinued in 2023. All these updates caused the
historic electricity related data to be different to previously published. The 2019 and 2020 figures are final in this submission.
4 Total energy consumed calculated using fuels’ lower heating values and metered electricity.
5 Business travel emissions excluded as emission value is below the materiality threshold.
6 Previous years have been rebased as per the Vivo Energy Greenhouse Gas Inventory Management Plan with 2019 as the base year.
In Ghana, we created an environmental
sustainability programme at the La Enobal
Basic school in Accra. This school lacked
waste disposal and hand washing facilities
and had poor sanitation. Following our
partnership, we have provided access
to hand washing stations, set up an
environmental club, and are helping
students generate an income from
repurposing recycled materials.
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FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
31
OUR SUSTAINABILITY FRAMEWORK CONTINUED
Partnerships
Engaging with and supporting the
development of our partners and
local communities helps us gain a
better understanding of their needs
and concerns.
PARTNERING WITH COMMUNITIES
Engaging with and supporting the development of our
local communities has always been an important part
of what we do.
We want to continue to make a real and lasting
difference to our communities, engaging with them
to earn their respect and trust, supporting them
and promoting a better quality of life and more
sustainable future.
SHIFTING OUR FOCUS AREAS
Since our foundation in 2011, we have based our
community investment activities on Road Safety,
Education and the Environment. We have invested
millions of dollars and successfully supported over a
thousand projects across the Group, centred on these
three focus areas.
In April, we chose to review these, and invited our
colleagues to have their say, asking them to vote on
a long list of potential new community investment
focus areas.
Over 750 colleagues voted – a tremendous response
and a great demonstration of how much our
community investment activity matters to them.
Following review by the ESG Committee and
verification by the Board, we have changed our
community investment focus areas to Education,
Health and Renewable Energy (solar).
Our Communications Managers across the Group are
starting to shift their community investment activity
to these new priorities, and throughout 2023, we
supported around 100 community projects.
Education
We are active in the development and delivery of
a wide range of educational initiatives across the
continent. Many are aimed at children and young
people, with the objective of fostering academic
achievement, entrepreneurship and learning.
Others are focused on skills and knowledge for life,
often with an emphasis on safety, environmental
issues and health.
Following an 11-year ongoing partnership with
the Ministry of Education in Tunisia, we further
strengthened this relationship by launching a
programme called Ana Obde3, meaning ‘I innovate’.
The programme included training teachers,
establishing entrepreneurship clubs for students and
running a series of regional and national competitions
aimed at encouraging entrepreneurship among school
children at a young age.
In Namibia, we launched the inaugural Vivo Energy
Windhoek Marathon to help raise funds for
government-run schools. The event attracted more
than 1,200 runners, raising funds to support thousands
of students.
Health
Addressing health challenges is a paramount concern
for Vivo Energy as we recognise the profound
impact it has on communities. Health disparities
persist in many of our markets, affecting vulnerable
populations. We are determined to foster a healthier
society by investing in programmes that prioritise
preventive healthcare, access to medical services,
and health education. Collaborating with local
healthcare providers and community organisations,
we aim to create sustainable initiatives that enhance
overall wellbeing. Our focus extends to supporting
initiatives that improve sanitation, nutrition and disease
prevention, contributing to the creation of resilient
and thriving communities.
See Sonia Dammak, our Communications
Manager in Tunisia, talk about how we are
supporting communities in her operating unit.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
32
OUR SUSTAINABILITY FRAMEWORK CONTINUED
PARTNERSHIPS CONTINUED
During ‘Pink October’ several of our operating units
ran internal and external activities to support breast
cancer awareness. These included workshops on
breast cancer, screening programmes and donations.
In Ghana, we partnered with the National Road
Safety Authority and Health Nexus Network to
launch our Fit2Drive Wellness Programme, designed
specifically for commercial drivers. The programme
aims to promote and enhance the physical and
mental wellbeing of commercial drivers, ensuring they
maintain optimal health and safety standards while on
the road.
In Madagascar, we signed a partnership agreement
with the Compassion Madagascar Association,
aimed at providing treatment for children suffering
from cancer. Through this partnership, we will fund
chemotherapy sessions and cancer treatment for
children from disadvantaged families.
Following a series of natural disasters in Africa during
the year, our teams have supported health relief
efforts for local communities, including: donations in
Morocco to support the earthquake relief; in Kenya to
support the National Steering Committee on Drought
Response; and in Malawi to support the victims of
Cyclone Freddy.
Renewable energy
Acknowledging the critical role of sustainable energy
in mitigating climate change, we are dedicated to
advancing the use of renewable energy sources.
Our commitment extends beyond minimising our
own environmental footprint to actively promoting
the adoption of clean energy solutions within
the communities we serve. Through strategic
partnerships, technological innovation and community
engagement, we aim to accelerate the transition to
renewable energy. By supporting projects that harness
solar and other renewable resources, we aspire to
contribute to a greener and more sustainable future.
During the year, our team in Senegal continued its
support of the For Hope Association, and expanded
its rural electrification project using solar panels for
villages in the rural community of N’Guellou, located
in the centre of Senegal.
ENABLING LOCAL ENTERPRISE
We are focused on supporting the growth of our
dealer and transporter network and other local
businesses – creating tens of thousands of indirect
jobs across our network.
In order to manage our retail network efficiently, we
utilise local dealers to operate approximately 95% of
our sites to our exacting standards. We support our
dealers to ensure they have a platform to succeed and
regularly check that they’re maintaining the standards
that we require.
RESPONSIBLE PURCHASING
We place great emphasis on operating our business
with high ethical standards and in a socially responsible
way, and want to work with business partners that
share our values. We have developed a Supplier
Code of Conduct for our partners to adhere to,
which covers minimum standards on areas including:
human rights and modern slavery, respect, child labour
and discrimination.
PARTNERSHIPS
AROUND 100
community investment
projects launched during
the year.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
33
NON-FINANCIAL INFORMATION STATEMENT
NO.
REPORTING REQUIREMENT
POLICIES
1
Environmental matters
– Environmental policy
– Code of Conduct
– HSSEQ and Social Performance policy
2
Employees
3
Human rights
Social matters
Anti-corruption
and anti-bribery
– Code of Conduct
– General Business Principles
– Whistle-blowing policy
– Data protection policy
– Privacy policy
– Performance, reward and recognition framework
– Travel security policy
– Combatting Modern Slavery statement
– Privacy policy
– Data protection policy
– Human Rights Policy statement
– Supplier Code of Conduct
– Code of Conduct
– General Business Principles
– HSSEQ and Social Performance policy
– Anti-bribery and Corruption manual
– Anti-money laundering policy
– Anti-trust manual
– Whistle-blowing policy
– Know Your Counterparty policy
– Gifts and hospitality policy
– Sponsorship and donations policy
– Code of Conduct
REFERENCE IN THE 2023
ANNUAL REPORT
– Sustainability Framework: Planet
– Climate change risk
– HSSEQ risk
– Task Force on Climate-Related
Financial Disclosures
– Our vision, culture and values
– Sustainability Framework: People
PAGE
NO.
28 to 30
41
40
35 to 38
23 to 24
26 to 27
– Our vision, culture and values
23 to 24
– Our vision, culture and values
– Sustainability Framework: People
– Sustainability Framework: Partnerships
23 to 24
26 to 27
31 to 32
– Criminal activity, fraud, bribery and
40
compliance risk
– Our vision, culture and values
23 to 24
Principal risks and uncertainties
Non-financial key performance
indicators
– Principal risks and uncertainties
39 to 41
– Non-financial key performance indicators
14 to 15
4
5
6
7
While not all of these policies are included in the Annual Report,
they are available to view on the Vivo Energy website/intranet sites.
This Annual Report contains the information required to comply with the Companies, Partnerships and Groups (and Non-Financial Reporting) Regulations 2016, as contained in sections 414CA and 414CB of the Companies Act 2006. This table provides key references to information that, taken together, comprises the Non-Financial Information Statement for 2023: STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
34
SECTION 172(1) STATEMENT
SECTION
172(1)
STATEMENT
Engaging with stakeholders is
fundamental, and we believe that
considering them in key business
decisions is not only our legal
obligation but the right thing to do.
The Board recognises that Vivo Energy is run for the
benefit of our shareholders, but that the long-term
success of the Group is reliant on the fostering
and nurturing of relationships with a variety of
stakeholders and the regular consideration of the
impact of the Group’s activities on them. Accordingly,
we listen to and collaborate with a wide range of
stakeholders in order to grow our business and deliver
value. In addition to our investors and shareholders
we have identified five key stakeholder groups;
our people, customers, partners, communities and
governments. Further details about how we engage
with these stakeholders can be found on pages 13
and 46.
The Board plays a critical role in ensuring that Vivo
Energy conducts its business in a manner which is
consistent with the highest standards of corporate
governance and ethical behaviour so that the Group
contributes positively to wider society. The individual
Directors and the Board as a whole are aware
and mindful of their duty under section 172(1) of
the Companies Act 2006 to act in the way which
they consider, in good faith, would be most likely to
promote the success of the Company for the benefit
of its members as a whole. In doing this, section 172
requires a Director to have regard, among other
matters, to the:
– likely consequences of any decisions in the long term;
– interests of the Company’s employees;
– need to foster the Company’s business
relationships with suppliers, customers and others;
– impact of the Company’s operations on the
community and environment;
– desirability of the Company maintaining a reputation
for high standards of business conduct; and
– need to act fairly as between members of the
Company.
In discharging section 172 duties the Directors have
regard to the factors set out above. The Directors
also have regard to other factors which they consider
relevant to the decision being made.
The Board considers all relevant factors and
stakeholders in deciding on a course of action that
is most likely to result in sustainable success for all
stakeholders. Stakeholder interests are not always
aligned and on some occasions, it is necessary for
the Board to prioritise the needs of one stakeholder
group over another and every decision we make will
therefore not necessarily result in a positive outcome
for all of our stakeholders. By considering the
Company’s purpose, vision and values together with
its strategic priorities and having a process in place for
decision-making, we do, however, aim to make sure
that our decisions are consistent and predictable.
DECISION-MAKING
The Board’s main responsibility is to promote
the long-term success of the Group, leading in an
entrepreneurial manner ensuring we generate value
for stakeholders. We have a clear framework for
determining the matters which are within the Board’s
remit and have approved Terms of Reference for the
matters delegated to the Board’s Committees.
Throughout the year, the Board has considered the
long-term consequences of the decisions it has taken,
focusing on the interests of relevant stakeholders as
appropriate. Set out below are examples of how the
Directors discharged their duties under section 172
during the year.
KEY BOARD DECISIONS
Refinancing of credit facilities
A key objective for the Group is to manage and
maintain the Company’s liquidity and capital resources
through prudent and disciplined financial management.
In June 2023, the Group secured a new $700 million
facility split across a five-year Term loan and a
revolving credit facility. The facilities were used to
refinance the $600 million Bridge loan and for general
corporate purposes.
The Board considered and assessed the transaction
and a range of alternatives, key risks and the interest
of shareholders, our people, and suppliers before
concluding that refinancing the credit facilities would
strengthen the Group’s financial position and would
therefore be in the best interest of the Company and
its stakeholders as a whole.
Acquisitions
In February 2023, the Board of Vivo Energy and
Petronas announced the combination of their
respective African businesses to create one of Africa’s
largest energy distribution companies. Under the
terms agreed Petronas will sell its entire 74% interest
in Engen Limited to Vivo Energy at completion.
The transaction is subject to customary conditions
precedent including regulatory approvals and is
expected to complete during the first half of 2024.
The Board considered several factors including the
Group’s strategic aims, risks and expected returns as
well as the interest of the employees, shareholders
and suppliers before concluding that entering into the
transaction is in the best interests of the Company and
its stakeholders as a whole. For further details on the
Engen transaction see page 6.
In December 2023, Vivo Energy acquired the
Somagaz group, thereby expanding its network to
24 African and Indian Ocean markets. This acquisition
was considered to align with Vivo Energy’s growth
strategy, in particular, allowing the Group to expand
its LPG business, reach new customers and deliver
enhanced value.
Community investment
Engaging with our partners and local communities
helps us gain a better understanding of their needs
and concerns. Since our foundation, we have
successfully supported over a thousand projects across
the Group, centred on Road Safety, Education and
the Environment. This year, following a Group-wide
employee survey, we decided to refocus our activities
to the three areas that our employees felt would
most benefit local communities and our partners,
these being Education, Health and Renewable Energy.
More information can be found on pages 31 and 32.
The expectations of local communities, customers,
suppliers, our host governments and our people, who
are all invested in supporting the development of
our local communities and partners, were important
considerations when making the above decision.
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TASK FORCE
ON CLIMATE-
RELATED
FINANCIAL
DISCLOSURES
We recognise that the sustainability
of our business depends on our
understanding of the climate‑related
risks and opportunities we face,
together with our commitment
to ensuring that these are fully
considered in our strategy. This
disclosure, aligned to the TCFD
framework, is an important
component of our ESG journey,
providing transparency for our
stakeholders regarding our
climate‑related preparedness.
GOVERNANCE
Climate-related issues have been considered as a
principal risk since 2020 and are formally embedded
into our systematic risk identification, evaluation, and
Board and management processes. In 2021, to support
the Board’s oversight of climate-related matters and
ongoing integration of climate-related governance
and initiatives across the Group, we enhanced our
governance structures by establishing the ESG
and Climate Committee (now ESG Committee).
Chaired by the CEO, the Committee plays an integral
role in overseeing our climate-related progress and
reports to the Board.
Our ESG strategy includes climate-related risks and
opportunities and matters relating to greenhouse gas
emissions, which are strategic items considered by the
Board. The Board and the Audit and Risk Committee
are jointly responsible for reviewing and monitoring
the Group’s overall climate-related risk profile, risk
management and the effectiveness of internal controls.
Across Vivo Energy, line management is accountable
for risk and control management, including measures
for managing climate-related risks. Our HSSEQ
function is responsible for maintenance and quality
assurance of the Group’s greenhouse gas inventory
and management plan. It also has responsibilities
for risk assessment control measures for physical
climate risks.
Our Internal Audit team annually assesses Group
significant risks, reporting directly to the Audit and
Risk Committee on principal risks, including climate
risks. This provides assurance to the Board on
effectiveness of governance, risk management and
internal controls. Overall risk assessment includes
risk identification, analysis and evaluation, ensuring
each risk is analysed to identify the consequence and
likelihood of the risk occurring, and the adequacy of
existing controls. For further details of our approach
to risk management, refer to pages 39 to 41.
THE BOARD
Oversees Group-wide climate-related risks and opportunities.
BOARD COMMITTEES
Audit and Risk Committee is responsible for reviewing and monitoring the overall
Group risk profile, including climate-related risks and internal controls.
ESG COMMITTEE
HSSEQ
Objective is to guide Vivo Energy’s organisation
around climate-related risks and opportunities,
manage sustainability risk areas, assess ESG strategy
and risk management framework, and monitor
ongoing ESG and climate-related metrics and targets.
Our HSSEQ function is responsible for maintenance
and quality assurance of the Group’s Greenhouse
Gas Inventory Management Plan. It also has
responsibilities for risk assessment control
measures for physical climate risks.
CFO
INTERNAL AUDIT
Oversees financial aspects of Group ESG strategy,
including considerations relating to spend on
alternative energy within the core business,
non-fuels and M&A.
Annually assesses Group significant risks, reporting
directly to the Audit and Risk Committee on principal
risks, including climate risks. Provides assurance
to the Board on effectiveness of governance, risk
management and internal controls.
OPERATING UNITS (OUs)
Our OUs report on physical and transition climate-related risks and opportunities on
country level risk registers, including assessments of exposure to risks and opportunities.
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These time horizons included
RISK CATEGORY
CLIMATE SCENARIO APPLIED RATIONALE FOR SELECTION
Short term
Medium term
Long term
2021-2024
0-3 years
2025-2029
4-8 years
2030-2060
9-39 years
PHYSICAL RISKS
Very High GHG Emissions:
IPCC SSP5-8.5 (4.4°C best estimate
by end of century)
– Aligns with the most credible
and recent global consensus on
climate science
– Allows transparency
and comparability
Intermediate GHG Emissions: IPCC
SSP2-4.5 (2.7°C best estimate by end
of century)
– Focusing on results from SSP5-
8.5 (the very high GHG emissions
scenario) delineates worst-case
exposure to physical climate hazards
TRANSITION RISKS
IEA Sustainable Development Scenario
(consistent with the ‘well below 2°C’
goal of the Paris Agreement, consistent
with limiting the global temperature rise
to 1.65°C with a 50% probability)
– Offers quantitative, forward-looking
Africa-specific assumptions, such
as oil and liquid fuel demand, to be
utilised as part of climate scenario
analysis
– Focuses on SDGs to which Vivo
Energy is well positioned to
contribute (e.g. SDG 7-ensuring
universal access to affordable,
reliable, sustainable and modern
energy services by 2030)
PHYSICAL RISKS
RISK DESCRIPTION
POTENTIAL OUTCOMES
RELEVANT
TIME
HORIZON
RISK
TYPE
Acute
Event-based: Increased
frequency and severity
of extreme weather events
including: inland flooding;
heatwaves; droughts and
storms/cyclones
Long-term shifts: Changes in
average climate conditions
including rising sea levels,
coastal flooding and increased
average temperatures
– Asset damage to depots and retail sites;
Increased capex and insurance costs
– Disrupted operations of depots and retail sites;
Decreased revenues and increased operating
costs at depots and retail sites
– Increased operating costs of depots and retail sites
Chronic
– Increased maintenance capex and insurance costs
– Accelerated depreciation of asset values
and asset relocation requirement
STRATEGYVivo Energy operates across 24 markets in Africa, each with different physical geographies and varying levels of climate-related maturity across market, technological, and policy and legal aspects. We believe that our operating units are well-equipped to respond to local, short-term climate-related issues, such as physical or environmental risks, and monitoring and responding to any transition-driven changes in customer demand.In 2021, we completed a climate scenario analysis to broaden our understanding of the possible impacts of physical and transition risks and transition opportunities. We adopted short-, medium- and long-term time horizons for our climate scenarios to be able to capture climate-related risks and opportunities which may manifest beyond traditional horizons.We defined a list of the most relevant climate-related risks and opportunities via an in-depth analysis of our business and a series of engagement workshops across key business segments and functions. The list was validated and consolidated by the ESG Committee. The risks and opportunities described here are consistent with the prior year and are potential drivers and outcomes that could be presented at various points in the future, depending on regional and global climate pathways. They are not necessarily new to us, and in many cases, we already have business responses corresponding to these risks and opportunities.Based on the analysis done in 2021, climate change is not expected to have a significant or material impact over the Group’s business operations in the short and medium term. The 2021 assessment therefore, remains relevant and reflective of the Group in 2023. Furthermore, there have been no developments in the organisation or climate change factors, that would result in a significant change of the 2021 assessment and its conclusions. STRATEGIC REPORT
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TRANSITION RISKS
RISK DESCRIPTION
POTENTIAL
OUTCOMES
RELEVANT
TIME
HORIZON
RISK TYPE
OPPORTUNITY DESCRIPTION POTENTIAL
OUTCOMES
RELEVANT
TIME
HORIZON
OPPORTUNITY
TYPE
TRANSITION OPPORTUNITIES
New climate-related reporting and
disclosure requirements or obligations
– Legal or reputational
issues; increased
compliance costs
Failure to meet internal or
external stakeholders’ climate-
related expectations resulting in
degraded relations with current
or potential employees
– Increased operating costs
from employee turnover;
reduced revenues due
to challenges attracting
new talent
Increased costs of products due to
policy changes to fuel subsidies; or
higher trading prices of oil and liquid
fuels due to transitional policies
– Reduced revenues due to
lower demand for higher
cost products
Commercial customers
transitioning to alternative fuels or
renewable technologies
– Reduced revenues in our
Commercial segment
Degradation of commercial
partnerships due to divergent climate
strategy or ambition
– Reduced revenues due to
loss of brand value
Policy & Legal/
Reputational
Reputational
Market/
Policy & Legal
Technology/
Market
Market
– Reduced revenues in our
Retail segment
Technology/Market/
Policy & Legal
Policies or technology shifts that
result in an increased share of electric
vehicles and hybrids in the passenger
transport mix; alternative fuel uptake;
improvements in internal combustion
engine efficiency; or reduced consumer
demand for fuels
Mandatory carbon pricing impacting
the power or aviation sectors
– Increased operating costs;
reduced revenues in our
Commercial segment
Policy & Legal
Increased operational efficiency of
Vivo Energy retail sites and depots;
increased renewable energy supply
to Vivo Energy retail sites and depots
– Reduced operating
costs from
asset efficiency gains
Improving logistics fleet fuel efficiency
and optimising routing schedules; where
possible, prioritising pipeline and rail
over road as means of distribution
of products
– Reduced operating
costs from
fleet efficiency gains
Meeting increased retail demands for
lower carbon fuel alternatives (e.g.
LPG, biofuels), electric vehicle charging
infrastructure, or lower carbon
products; meeting increased commercial
demand for renewable energy or
sustainable aviation fuels
– Increased revenues from
emerging or new retail
and commercial market
demands
Technology/
Market
Technology
Technology/Market/
Policy & Legal
SCENARIO ANALYSIS – PHYSICAL
Our physical assets are exposed to occasional local
environmental stressors and all local incidents are
recorded via our HSSEQ tool. Mitigative actions are
followed when required, while KPIs are systematically
tracked to reflect asset performance – to date, no
physical climate-related issues have materialised at a
Group level. The conclusions of the 2021 scenario
analysis are still considered relevant for 2023.
In our first iteration of climate scenario analysis,
we assessed a representative sample of assets from
markets representing over 40% of Group volumes,
including Kenya, Mozambique, Mali, Morocco
and Mauritius.
These markets were selected in order to represent a
range of physical geographies across Africa, assumed
to be exposed to different types of physical climate
hazards, as well as their overall significance to the
Group’s Retail and Commercial businesses.
The total sample included 31 assets (six depots and
25 retail sites). Our focus was on understanding the
possible exposure under medium- and long-term
horizons. The physical hazards assessed included
chronic risks from sea level rise and average
temperatures, and acute risks from drought,
heatwaves, inland floods and wildfires.
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OUR KEY FINDINGS FROM THE
EXERCISE ARE SUMMARISED BELOW:
OUR KEY FINDINGS FROM THE
EXERCISE ARE SUMMARISED BELOW:
– In the medium term, under both climate
scenarios (IPCC SSP5-8.5, IPCC SSP2-4.5), the
majority of assets assessed were at low
exposure to most sources of physical
hazard. Instances of elevated exposure to
droughts and heatwaves were identified at
some assets in the medium term.
– In the long term, under both climate
scenarios (IPCC SSP5-8.5, IPCC SSP2-4.5),
elevated exposure to droughts and
heatwaves was identified as the most
prevalent change across the sample of
assets assessed. No coastal assets were
significantly exposed to sea-level rise in
the long term under either climate scenario.
Note
Qualitative physical hazard exposure classifications
(i.e. low; moderate; high) are assigned by Sust Global, and are based
upon thresholds applied to quantitative hazard-specific exposure
metrics, as per the site-by-site results of the analysis.
SCENARIO ANALYSIS – TRANSITION
Today, our core businesses are focused on distributing
and marketing fuels and lubricants to our Retail and
Commercial customers in Africa. We therefore
perceive that the most material transition risks to
the Group are related to factors that could reduce
demand for the fuels we sell due to any combination
of climate-related technology, market, and policy
and legal developments across our markets.
The conclusions of the 2021 scenario analysis are still
considered relevant for 2023.
– There is minimal impact to fuel demand growth
in the short- and medium-term horizons,
compared to current market projections.
– In the long-term, our fuel sales volumes could
continue to grow under the IEA SDS but at
a slower rate than our forecasts based upon
current market projections, as oil demand in
the African transport sector increases into the
long-term horizon under this scenario.
We continue to closely monitor demand indicators
in each of our markets and believe we are well
positioned to react quickly to transition-driven
changes to demand that may occur.
OUR STRATEGY FOR RESILIENCE
To date, the actual impact of climate-related risks
on our financial performance and financial position
has been non-material. However, we are actively
considering our strategy, role and responses to
energy transitions across our markets. We have
already invested in transition initiatives such as
on-site solar across our network and EV charging
infrastructure in a range of countries including
Morocco and Reunion. We are continuously
monitoring demand trends for lower-carbon energy
and fuel alternatives, along with our capital allocation
to ensure we can respond to changing market needs.
We internally track the performance of our business
practice, focusing on the operational savings from the
investments made to reduce our impact, and operate
our offices, depots and service stations
more efficiently.
Below we summarise our activities and
plans across key climate-related areas, which
we perceive as both harnessing transition
opportunities, and mitigating transition risks.
USING RENEWABLE POWER
AT OUR FACILITIES
We are including on-site solar power at newly built
and rebuilt retail sites where possible. In 2023 we
added solar to 95 retail sites and two depots.
SUPPORTING ELECTRIC
VEHICLES (EV) IN OUR RETAIL
SEGMENT
We are piloting EV charging infrastructure in a
number of our markets, such as Mauritius, Reunion
and Morocco, to understand its potential and ensure
we are positioned to address customer demand as
it evolves.
SUPPLYING LOW- OR
ZERO-CARBON FUELS IN
RETAIL AND COMMERCIAL
SEGMENTS
We are continually monitoring and responding to
Retail and Commercial customers’ demands for
new technologies and lower-carbon alternatives
such as LPG, solar or other commercially
attractive options, as part of the transition.
ACHIEVING LOWER EMISSIONS
LOGISTICS
We are engaging with our fuel delivery
fleet suppliers to minimise the climate impact of
trucks used for transporting our fuel to end-
users. To minimise fuel usage, we are prioritising
pipeline, marine and rail transport ahead of road,
where possible.
RISK MANAGEMENT
As climate-related risks are on the Group’s list of
principal risks, they are subject to Vivo Energy’s
risk management framework. The scenario analysis
process has helped determine possible climate-related
risks at asset, business unit and Group level, and also
highlight the actions we are already taking to manage
these types of risks. We are in the process of ensuring
that physical and transition risks are systematically
included in all risk registers at OU level. Internal Audit
has instructed our OUs to consider both physical, and
transition risks in their risk assessments and reporting,
and guidance has been provided on how to integrate
these risks on the country level risk registers. Our goal
is to achieve a level of granularity and consistency
that will adequately reflect all material climate-related
risks centrally, enabling comprehensive identification,
analysis and evaluation, along with the adequacy of
existing controls over the relevant time horizons.
Further details on our risk management around
climate risks can be found on pages 39 and 41.
METRICS AND TARGETS
As described on pages 28 to 30, we have continued
to focus on our GHG reporting and disclosure.
To facilitate the Group’s ability to assess performance
against transitional climate-related risks and
opportunities, we are tracking our operational
emissions and value chain emissions intensity.
Our operational emissions intensity represents the
emissions from the operation of our facilities (e.g.
from the purchase of electricity, heat and cooling),
relative to the volume of fuel products supplied to
and consumed by our customers. This metric reflects
our operational greenhouse gas reduction efforts,
including the overall impact of initiatives such as
increasing the number of retail sites and depots with
on-site solar power. Further details on Scope 1, 2 and
3 emissions can be found on page 30.
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39
RISK MANAGEMENT
RISK
MANAGEMENT
The main purpose of risk evaluation
is to help prioritise risks and
ensure effective risk management.
Through an embedded approach
to risk management, we are able
to mitigate and manage risks and
embrace opportunities as they arise.
OUR APPROACH TO RISK MANAGEMENT
Our internal control system is based on the
Committee of Sponsoring Organizations of the
Treadway Commission’s (COSO) framework and
uses the five components of the framework: control
environment, risk assessment, control activities,
monitoring, and information and communication.
The Audit and Risk Committee and the Board
are responsible for reviewing and monitoring the
overall risk profile, the adequacy of the Group’s risk
management and the effectiveness of internal controls.
Emerging risks are considered particularly important
in our strategic planning process to identify potential
shifts in critical assumptions and develop or modify
strategies to either minimise their negative effects or
capitalise on the opportunities that they may present.
RISK ASSESSMENT,
MONITORING AND REVIEW
For each risk or category of risks, our risk
management process includes activities performed
in a continuous cycle. Risk assessment includes risk
identification, analysis and evaluation, and ensures
each risk is analysed to identify the consequence and
likelihood of the risk occurring and the adequacy
of existing controls. The risk register is one of the
key components of our risk management and
governance structure.
The various risk reporting channels are consolidated
into one streamlined escalation process which is used
by the Board to assess and analyse the risks of the
Group and implement an action plan when necessary.
Our Internal Audit team performs a continuous
assessment of our significant risks and communicates
them to senior management, who in turn develop
action plans to address the identified risks.
Internal Audit reports directly to the Audit and Risk
Committee on the principal risks. The Committee
will review and assess the status of each risk.
Reviews and recommendations are presented to
senior management to continuously strengthen our
internal control framework.
INTERNAL CONTROL SYSTEM
Our approach to internal control includes a number
of general and specific risk management processes
and policies. Within the essential framework
provided by our General Business Principles, the
primary control mechanisms are self-appraisal
processes in combination with strict accountability
for results. These mechanisms are underpinned by
established policies, standards and guidance that
relate to particular types of risk.
OUR DYNAMIC RISK ENVIRONMENT
As part of the risk management framework, we
regularly consider changes in the nature, likelihood
and impact of existing and new risks, including the
Group’s ability to respond to changes in its business
and the external environment.
The Misconduct and Loss Reporting Policy, together
with the Investigation Guidelines, directs our
response to fraud and manages the reporting,
analysis and investigation of serious allegations or
concerns. The Group’s Ethics & Compliance function
monitors the cases identified and initiates or advises
on the investigations when suspicions or allegations
are reported.
PRINCIPAL RISK FACTORS
HIGH
2
8
7
11
14
1
5
12
9
6
3
4
10
13
15
MEDIUM
T
C
A
P
M
I
LOW
LOW
MEDIUM
HIGH
LIKELIHOOD
RISK IMPACT
Decrease
Unchanged
Increase
PRINCIPAL RISK FACTORS
1. Partner reputation and relationships
2. Criminal activity, fraud, bribery and compliance risk
3. Oil price fluctuations
4. Currency exchange risk
5. Health and safety
6. Economic and governmental instability
7. Product availability and supply
8. Information technology risk
9. Epidemic
10. Local content
11. Climate change
12. Acquisition integration
13. Credit management
14. Taxation risk
15. Human resources and talent management
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RISK MANAGEMENT CONTINUED
PRINCIPAL RISKS AND UNCERTAINTIES
Our activities are exposed to various risks and uncertainties. These are risks that we assess as relevant and significant to our business at this time, however, other risks could emerge in the future.
BRAND AND REPUTATIONAL
PRICING
1. PARTNER REPUTATION AND RELATIONSHIPS
3. OIL PRICE FLUCTUATIONS
HEALTH, SAFETY, SECURITY,
ENVIRONMENT AND QUALITY
5. HEALTH AND SAFETY
Our business depends on a small number of key contractual brand
relationships with our brand partners, Shell and Engen. We also rely on
our own business reputation and brand, as well as that of our business
partners, in order to successfully grow our business and develop new
relationships with other brand partners.
The termination of any key brand licence or deterioration of our brand
name could have a material impact on our ability to grow or maintain our
business and could have a material cost impact on current operations.
A negative trend or development in the brand or reputation of one of
our key business partners could adversely impact our current business
and future growth plans if it were to adversely impact consumer
sentiment towards the brands under which we operate.
2. CRIMINAL ACTIVITY, FRAUD, BRIBERY AND
COMPLIANCE RISK
There are a number of regulations and rules that are applicable to
the Group, such as the anti-bribery and corruption laws, sanctions
(restrictions) and Know Your Counterparty best practices.
In addition, the number of regulations applicable to the Group and the
(related) risk of non-compliance can increase with any extension of the
Group activities to new territories.
The Group ensures that all alleged, suspected or actual fraud cases
and fraud attempts are systematically investigated. The Group has
a confidential whistle-blowing helpline for employees, contractors,
customers and other third parties to raise ethical concerns or questions
in all OUs. Furthermore, the Group regularly maintains and updates its
IT and control systems. The fraud prevention framework also includes a
code of conduct, a conflict of interest policy, as well as training.
The price of oil and oil products may fluctuate preventing the Group
from realising its targeted margins, specifically in the unregulated markets
where we operate.
We are exposed to accidents or incidents relating to HSSEQ and are
further subject to laws and regulations and industry standards related to
operations in each of the operating countries.
Price fluctuations could negatively impact the value of stocks, resulting in
stock losses.
We may incur potential liabilities and the brand reputation can be severely
impacted, along with employee confidence.
Exposure to commodity price risk is mitigated through careful inventory
and supply chain management as well as dynamic pricing.
Regulators and authorities may impose fines, disruptions to operations
and disallow permits for future ventures.
4. CURRENCY EXCHANGE RISK
The Group is also exposed to foreign exchange risk, currency exchange
controls, currency shortage and other currency-related risks.
Our treasury policy requires each country to manage its foreign exchange
risks. The Central Treasury team approves all hedging plans before they
are actioned to ensure they are aligned with our strategic focus.
6. ECONOMIC AND
GOVERNMENTAL INSTABILITY
Several countries and regions in which we operate have experienced
economic and political instability that could adversely affect the economy
of our markets.
An economic slowdown which adversely affects, for example, disposable
income, vehicle distance driven, or infrastructure development, in
one or more of these regions could negatively impact our sales and
have a material adverse effect on the business, financial conditions and
operational results.
This includes the enactment of local content and local ownership laws that
could impact our markets and operations.
There is also an elevated risk of robbery and theft associated with the
deteriorating economic conditions in most countries.
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RISK MANAGEMENT CONTINUED
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
OPERATIONAL
STRATEGIC
FINANCIAL
7. PRODUCT AVAILABILITY AND SUPPLY
10. LOCAL CONTENT
13. CREDIT MANAGEMENT
We are dependent upon the supply of fuels, lubricants and additives from
various suppliers. When raw materials are needed urgently, asymmetric
negotiations occur. The bargaining power shifts to the supplier who in
turn can charge a higher price.
Furthermore, we are restricted by limited storage capacity within some
of the countries in which we operate. The increased procurement costs
could lower our margins. Limited supply of products and storage facilities
may result in stockouts. This could further result in breach of contract and
disruptions to our operations, leaving us susceptible to fines or penalties.
8. INFORMATION TECHNOLOGY RISK
The Group continues to experience phishing attacks and cyber-fraud
reported activities. The Group conducts regular phishing simulation
exercises to test, assess and validate staff awareness and appropriate
conduct when receiving emails.
9. EPIDEMIC
We face risks of prolonged impacts from pandemics/epidemics
worldwide that had or may have dramatic effects on humans, economies
and security.
A new pandemic and the related social and economic consequences
could negatively impact the stability of some of the countries where
we operate, intensifying social tensions which may require the Group
to rapidly adapt and manage its key operational and financial variables.
The Group has previously and will be able to effectively adapt its review
and monitoring of critical operations and finance activities.
The Group Business Continuity Plans can be activated quickly and
effectively to keep employees, retailers and contractors safe and
ensure the security of our critical sites and operations. This plan
ensures the Group is able to maintain supply to its Retail sites and
Commercial customers.
There has been no resurgence of any past or outbreak of new pandemics
in the markets in which we operate over the year and, therefore, the risk
impact is considered to have decreased.
There is an increasing trend across the continent on local content
regulations. New regulations are in the pipeline that could significantly
impact our operations (shareholding of energy supply companies).
In some countries, local content regulations already oblige local companies
to be given first priority in the provision of goods and services in some
specific sectors (e.g. mining). The risk impact has, therefore, increased in
the current year.
11. CLIMATE CHANGE
Although many uncertainties exist about the potential consequences of
future climate change, it will result in adverse effects on human health,
ecosystems, economic systems and infrastructures that are sensitive to
changes in climate.
Non-adherence to the evolving regulation, technology and customer
needs exposes the Group to compliance and financial risks.
Brand reputation can be severely impacted, along with employee
confidence. Regulators and authorities may impose fines, disrupt our
operations and suspend licences to operate.
Financial markets (investors) could re-orientate investment criteria to
environmental, social and governmental issues.
Shifts in customer behaviours, expectations and consumption trends may
impact our volumes, in particular in countries which start to experience
the emergence of a hybrid and electric vehicles market.
12. ACQUISITION INTEGRATION
We may be unable to identify or accurately evaluate suitable acquirees or
to complete or integrate past or prospective acquisitions successfully in a
timely manner, which could materially adversely affect growth.
We may incur write-downs, impairment charges or unforeseen liabilities,
placing strain on financial resources. Occurrences of indebtedness could
result in increased obligations and include covenants or other restrictions
that limit operational flexibility.
All acquisition decisions are intensively reviewed at several stages with
ultimate approval by the Board. This ensures risks at all levels are being
assessed and mitigated throughout the process. We ensure there are
detailed integration plans with realistic timelines as well as designated
teams to execute the plan. Tailored on-boarding and training is delivered
post-acquisition to ensure a smooth and efficient transition.
We face risks arising from credit exposure on Commercial and Retail
customers, including outstanding receivables and committed transactions.
This may result in financial loss as a result of bad debts and lost revenue.
Exceeded payment terms impact the OUs’ working capital and can create
liquidity challenges for the business. In 2023, the challenging economic
and financial environment directly impacted the Group’s credit exposure
resulting in an increase in the risk impact.
We maintain country-specific Credit Policy Manuals which ensure a
harmonised, cost-effective and value-adding credit process in all classes of
business. Continuous monitoring of outstanding credit balances ensures
our overall risk remains within our tolerance.
14. TAXATION RISK
Tax risk management is part of the Group’s overall business strategy
to avoid unnecessary tax costs, while ensuring sound compliance with
legislative requirements. We ensure the Group stays abreast of relevant
tax developments and have developed control mechanisms and policies
that can be applied at our operating units and Group level.
We have adapted existing risk management procedures to incorporate
tax risk elements with the objective to ensure that appropriate policies
and procedures are in place to protect our operating units and the Group
from potential tax authorities challenge.
HUMAN RESOURCES AND TALENT MANAGEMENT
15. HUMAN RESOURCES AND TALENT MANAGEMENT
Over-solicitation of staff (in relation with projects to manage in parallel
to day-to-day activities) can become a demotivating factor and may
contribute to staff inefficiency which may result in increased costs.
Key people may leave the Group, with some joining competitors. We
maintain detailed succession plans and talent management programmes.
Employee discontent can result in industrial disputes, strikes and
sub-standard performance. We maintain constructive dialogue with
unions and workforce representatives.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
42
Governance
The following pages describe our governance arrangements, the operation of the
Board and its Committees and how the Board has discharged its responsibilities
during the year.
Compliance statement
Board of Directors
Board leadership and company purpose
Role of the Board and division of responsibilities
Directors’ Report
Statement of Directors’ responsibilities
42
43
44
47
49
51
COMPLIANCE STATEMENT
Good governance is essential for creating long-term viability of the business and
the economic development of the communities where we operate. The Vivo Energy Board
has overall responsibility for governance.
Having an effective corporate governance framework defines responsibilities, aids the
Board in delivering the Group’s strategy and is vital to effective decision-making. The Board
adopted the Wates Corporate Governance Principles for Large Private Companies (the
Principles) as the Company’s governance code with effect from 1 January 2023. Details of our
corporate governance arrangements and how we have applied the Principles during the year
are set out throughout this Governance Report and, where indicated in this report, in the
Strategic Report.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
43
Board of Directors
The Group is led by an effective and committed Board,
focused on driving the long-term success of Vivo Energy.
JAY GLEACHER
INTERIM CHIEF FINANCIAL OFFICER
STAN MITTELMAN
CHIEF EXECUTIVE OFFICER
MATTHEW STACEY
NON-EXECUTIVE DIRECTOR
Appointment Date: 26 July 2022
Skills and Experience
Jay Gleacher became Interim Chief Financial
Officer in January 2023, having initially joined
the Board in July 2022. As Interim CFO, Jay is
responsible for financial control, treasury &
credit, IT and procurement.
Jay has extensive finance and M&A
experience in the energy sector. Besides the
Vivo Energy Board, Jay is also a supervisory
board member of Varo Energy B.V.
Prior to joining Vivo Energy, Jay was an
Investment Director focused on investment
opportunities in Europe, Africa and Latin
America at Vitol. Before joining Vitol in 2009,
Jay worked in Morgan Stanley’s Investment
Banking Global Energy Group.
Appointment Date: 3 March 2022
Skills and Experience
Stan Mittelman brings over 30 years of
downstream energy experience to Vivo
Energy and has spent a substantial part of his
career operating in Africa.
Before joining Vivo Energy, Stan was SVP
Africa at TotalEnergies Marketing & Services,
where he led the fuel retailing and marketing
business across 40 countries in Africa.
Prior to this, Stan held a range of senior
positions at TotalEnergies, including CEO
of Total Marketing France, and a number of
roles on the continent, including EVP West
Africa for Total Marketing Services and MD
Total Zimbabwe.
Appointment Date: 26 July 2022
Skills and Experience
Matt Stacey is Head of Middle Distillates
at Vitol.
Matt is a highly experienced leader
who brings a wealth of knowledge and
understanding of the oil markets to
Vivo Energy.
Before joining Vitol in 2015, Matt worked
for Royal Dutch Shell, where he held
various trading and management positions
across its distillate business, in both London
and Singapore.
SELIM ŞIPER
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Appointment Date: 26 July 2022
Skills and Experience
Selim Şiper has an excellent understanding
of brands and consumers, a track record
of strong operations management and an
international perspective of driving value in
complex environments.
From 2017 to 2022 Selim was the CEO of
Petrol Ofisi, Turkey’s leading distributor of
fuels and lubricants, and he now serves on
Petrol Ofisi’s board. Before joining Petrol
Ofisi, Selim was a management board
member of SHV Energy, and CEO of Ipragaz.
CHRISTOPHER BAKE
CHAIRMAN
Appointment Date: 26 July 2022
Skills and Experience
Chris Bake joined the Board in July 2022 and
became the Chairman in February 2023.
Chris is a highly experienced leader and brings
significant investment, strategy development
and M&A experience to the Board, together
with a deep knowledge of the energy sector.
Since joining Vitol in 1995, Chris has held
various leadership positions in Dubai,
Bahrain, London, Buenos Aires and Houston.
He is currently the Chairman of Petrol
Ofisi, Turkey’s leading distributor of fuels
and lubricants, and a member of the Vitol
Executive Committee.
Before joining Vitol, Chris worked
for BP and Phibro.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
4 4
Board
leadership
and company
purpose
The Board’s primary role is to
ensure Vivo Energy’s long-term
success by setting the Group’s
strategic direction, ensuring that
strategy is aligned with our purpose
and culture, and to promote and
protect the Group’s interests for the
benefit of all our stakeholders. The
Group’s governance framework
supports the Board in the delivery
of the Group’s strategy and
long-term sustainable success.
HOW GOVERNANCE SUPPORTS
OUR STRATEGY
The Board is responsible for promoting the long-term
sustainable success of the Group and for delivering
long-term value for stakeholders. The Board does this
by providing effective leadership and by ensuring that
the Group’s business is conducted with high standards
of ethical behaviour in a manner which contributes
positively to wider society and having regard to the
interests of its different stakeholders.
We recognise that our vision to be Africa’s leading and
most respected energy business can only be achieved
through demonstrable good governance in its
broadest sense. Having the right systems and controls
in place ensure the Board and its Committees can
effectively oversee the development of the Group’s
strategy and allow the Directors to provide support,
guidance and, when needed, challenge the business.
To ensure the business can meet its strategic priorities,
the Board evaluates and monitors current financial and
non-financial performance against targets and ensures
that the necessary resources are in place. A key
component of the Board’s role in the development
of Vivo Energy’s strategy is the approval of the annual
operating plan. Other key items considered during
2023 include:
– Health and safety;
– Refinancing of credit facilities;
– The Somagaz group and Engen acquisitions;
– Sanctions;
– Sustainability; and
– Growth strategies in non-core areas.
Throughout the year, the Board considered the
long-term consequences of the decisions it made,
focusing on the interests of the relevant stakeholders
as appropriate. Further information on the strategic
priorities for the Group is available in the Strategic
Report on pages 9 to 12.
OUR PURPOSE AND CULTURE
The Group’s purpose is to safely provide innovative
and responsible energy solutions to Africa, which
enable growth and development of the continent
and its people. We aim to do this by realising the
full potential of our people and business partners,
supporting our communities and being recognised
as the benchmark for quality, excellence, safety and
responsibility in Africa’s marketplace.
Having a strong purpose is essential to the running
of our business; it sets out why we exist, drives
us forward and directs us to focus on what is
important to our stakeholders. The Board has overall
responsibility for establishing Vivo Energy’s purpose,
values and strategy to deliver long-term sustainable
success and generate value for stakeholders while
being aligned with the Group’s culture.
In addition to our purpose, our culture drives
our behaviours and underpins everything we do.
We recognise that how we do things is just as
important as what we do. The right culture plays
a fundamental part in delivering our strategy;
it sets the tone and leads to a motivated and
productive workforce.
Our operating culture of ‘Focus, Simplify and
Perform’ and our values of ‘integrity, honesty and
respect for people’ have always been core to our
business. They have enabled us to stay one step ahead
and remain fundamental to the future success of
the business.
How the Board monitors culture
We believe that the right culture and values,
supported by effective leadership and a consistent
tone from the top, are crucial to the success of
the Group. The Board is responsible for ensuring
that the culture in which we operate drives the
right behaviours, and how we do business and the
behaviours demonstrated by our people across the
Group are of vital importance to the Board.
Listening to our employees
People are the lifeblood of our business. They are
crucial to the day-to-day functioning of our operations,
and we recognise that the strength of our business is
built on the hard work and dedication of our people.
We are committed to building an engaging and
inclusive culture that empowers and allows our people
to grow and thrive. By living our values, our people
differentiate us from our competitors and enable us to
deliver our strategy. We use many different channels
to understand how our people experience working
for Vivo Energy and to keep our people up to date on
strategy and performance, including formal leadership
events, townhalls, surveys and digital communication.
These engagements aid us in shaping our culture,
policies and practices to ensure Vivo Energy is an
attractive, engaged and inclusive place to work.
We use Your Voice, an electronic suggestion tool,
to encourage employees to submit ideas on a wide
range of topics, including our business principles,
careers, leadership, innovation, workplace and culture.
Where the ideas make business sense and have
the potential to improve ways of working, they are
implemented to help grow and improve the business.
Since the implementation of the tool, we have
received over 200 suggestions of which 112 have been
or are being implemented.
The Group undertakes an employee engagement
survey every two years. Survey questions allow
employees to share their views on key topics, which
provide valuable insight into employee engagement
and the Group’s culture. This year’s survey consisted
of 42 questions and, with an overall response rate
of 93%, continued to reflect high levels of employee
engagement. Nine out of ten employees continue
to be proud to work for the Group, believing Vivo
Energy is well respected in the countries where we
operate, delivers world-class HSSEQ performance
and will be successful in the future. The key findings
and follow-up actions were discussed by the full Board
following which action plans to address the priority
issues were prepared by the business.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
45
BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
A well-governed company exposes itself to the widest
possible sources of information and experience, both
in the people it employs and the voices to which it
listens. We aspire to develop an inclusive culture
where our people value diversity of backgrounds,
feel respected and are inspired to contribute to their
fullest potential. Vivo Energy recognises diversity
as an organisation strength and across the Group,
44 nationalities are represented. Although gender
balance is steadily improving, we remain conscious
of the importance of promoting gender diversity
throughout Vivo Energy. In the second half of
the year we launched a new diversity initiative,
W@VE (Women at Vivo Energy) to: empower
female employees professionally; increase the number
of women in leadership positions; and to address
gender-based biases, stereotypes and obstacles.
During the year the Directors looked at organisational
culture in different contexts, discussed and received
updates on the above-mentioned initiatives as well
as considered reports from the senior management.
The annual culture update and whistle-blowing report
were also presented to the Board.
Human rights
Respect for human rights is a fundamental part of
operating as a responsible business. Any exploitation
of human beings is entirely at odds with our core
values of honesty, integrity and respect for people and
we are committed to building awareness and working
with our partners to ensure that all those working
within Vivo Energy, or our supply chain are treated
with respect and dignity.
We have a well-developed policy framework that
covers our responsibilities to protect the human rights
of those working in our direct operations, as well as in
our value chain and communities. We have also issued
separate written guidance to our retail network on
what modern slavery is, how to recognise it and how
to report issues to us. In addition, our whistle-blowing
helpline includes a specific reporting category for
raising concerns relating to potential unfair labour
practices or human rights violations.
During the year the Board approved the Company’s
Modern Slavery Statement which is published on our
website www.vivoenergy.com/About/Our-Principles-
Policies/Modern-Slavery-Statement and was submitted
to the UK online registry. Our Supplier Code of
Conduct and Human Rights Policy Statements also are
available on our website www.vivoenergy.com/About/
Our-Principles-Policies.
Ethics, bribery and fraud
Vivo Energy recognises that corruption undermines
the rule of law and democratic process, impoverishes
states and distorts free trade and competition.
We have established policies and governance
procedures that set and monitor our approach to
preventing fraud, bribery and corruption, including our
Code of Conduct and Anti-bribery and Corruption
Manual. We conduct mandatory e-learning courses
for all employees to ensure that they understand the
Group’s zero-tolerance approach to fraud, bribery,
and corruption of any kind. A gift and hospitality
register is in place and our employees must report and
seek permission to accept gifts and hospitality over a
prescribed financial value.
We maintain a multi-site ISO 37001 anti-bribery
management certification. During the year we carried
out six external reviews in our operating units as part
of our annual compliance audit. No non-conformities
were found.
We have a detailed counterparty screening
programme in place which is formalised in the Vivo
Energy Know Your Counterparty (KYC) policy.
This screening process gives us confidence that we
know who we are doing business with and that the
ethics and values of our counterparties are aligned
with ours. As part of the process, we require new
counterparties to sign a compliance statement, which
sets out our approach towards AML, ABC, modern
slavery and conflicts of interest.
We measure the effectiveness of our compliance
programme through audits and through monitoring
breach allegations and root causes. The Audit and
Risk Committee monitors and regularly reviews
the Company’s policies, incidents and trends arising
from any such incidents and provides updates of key
matters to the Board.
Whistle-blowing
Employees can report incidents of wrongdoing
through both internal and external mechanisms.
In addition to the reports raised through line
managers, the Vivo Energy global whistle-blowing
helpline enables employees and third parties to raise
concerns in relation to suspected violations of the law,
the Vivo Energy General Business Principles or Code
of Conduct. Such reports may be raised anonymously,
24 hours a day, seven days a week via this independent
helpline. Any reports are then referred to the Chief
Legal and Compliance Officer and the Head of
Internal Audit and are investigated or escalated to the
Chair of the Audit and Risk Committee and the CEO
as required.
To deal with any wrongdoing effectively, honest
communication is vital and we encourage our
employees to raise any concerns of misconduct.
The Board is provided with periodic reports on
whistle-blowing.
Social engagement
We want to be a force for good and support those
who support us. We recognise the importance of
going beyond maintaining our social licence to operate;
supporting the issues that matter to our communities
and working with them for the long term are essential
for building trust and earning their respect.
We aim to make a real and lasting difference in the
communities where we operate, not only by creating
career opportunities for local people, but also by
continuing to deliver a wide range of community
investment programmes across our markets. We do
this through partnerships, employee engagement and
non-political donations.
Since our foundation, we have successfully supported
over a thousand projects across the Group, centred
on Road Safety, Education and the Environment. This
year, following a Group-wide employee survey, we
decided to refocus our activities on the three areas
that our employees felt would be most benefit local
communities and our partners, these being Education,
Health and Renewable Energy.
Throughout the year we launched around
100 community projects and were pleased to be
recognised with several awards and nominations,
including CSR Company of the Year (Ghana
CSR Excellence Awards) and Best CSR and
Sustainability Campaign (Uganda PR Association
Excellence Awards).
Risk management and internal controls
To ensure the long-term success of the Group, Vivo
Energy has robust risk management and internal
control systems in place to identify, monitor and
manage risk, and to identity and assess opportunities.
The Board is responsible for setting the Group vision
and strategy in a way that maximises value creation
and manages risks. All material opportunities and
initiatives are considered and, if appropriate, approved
by the Board. The Schedule of Matters Reserved for
the Board sets out the types of matters which require
Board approval. The Board is provided with updates
on ongoing projects at every meeting.
Effective internal reporting, robust internal controls
and oversight of current and emerging risks are
embedded into our business processes aligning with
our strategic priorities, purpose and values. The Board
undertakes a thorough assessment of the Group’s
emerging and principal risks at least annually and the
Audit and Risk Committee reviews the effectiveness
of the Group’s system of internal controls and risk
management. The results of the Committee’s review
are presented to the Board. During the year, the
Board concurred with the Committee’s assessment
that the risk management and internal controls of the
Group remain effective.
Promoting the success of the Company
The Directors, in conducting Board business and
taking decisions at Board meetings, act in a way that is
most likely to promote the success of the Company
for the benefit of its members as a whole, while
having due regard and taking into account the likely
short- and long-term consequences of any decision
on the Company and its business, the interests of all
the Company’s stakeholders, including employees,
and the impact on the community and environment in
which the Company conducts its business. The Board’s
section 172(1) statement is included within the
Strategic Report on page 34.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
4 6
BOARD LEADERSHIP AND COMPANY PURPOSE CONTINUED
STAKEHOLDERS
We do not operate in isolation. Multiple stakeholders
are impacted by our business, including shareholders,
employees, customers, partners and the communities
and governments of the countries in which we
operate.
Engaging with stakeholders and understanding
their views is vital to the Board and underpins
effective decision-making. We create value for our
shareholders by taking decisions that are sustainable
in the long term not only for us but also for those our
business affects. The Board is committed to building
positive relationships with all our stakeholders and
recognises that this is not only essential to building a
sustainable business but also the right thing to do.
The Board is responsible for ensuring that
management actions are aligned to strategy and that
stakeholder interest are taken into consideration.
Stakeholder engagement at senior management level
helps identify emerging issues which can be brought
to the Board’s attention. This enables the Directors
to consider the Group’s activities and maintain an
effective understanding of what matters to all our
stakeholders and can then draw on these perspectives
in Board decision-making and strategy development.
Where the Board does not engage directly with the
stakeholders, it is kept updated of the engagement
activities and outcomes. Updates are provided in a
variety of formats including face-to-face presentations
and reports by the Chief Executive Officer or
Interim Chief Financial Officer as well as by the
senior management of the Group’s businesses.
Senior management is requested, when presenting
or providing reports to the Board on strategy and
principal decisions, to ensure that the presentations
cover what impact the strategy/principal decision has
on the relevant stakeholders and how the views of
those stakeholders have been considered.
Further information on how the Group
engages with our stakeholders is available within
the Strategic Report on page 13.
In addition to the Group activities, the Board also
engages directly with stakeholders.
Operating unit visits
Visiting our local operating units is an important way
for Directors to meet with local senior management,
engage with employees and other stakeholders and to
gain a better understanding and insight into particular
issues faced by the operating units and the business
in general.
In addition to individual OU visits, during the annual
Leadership Conference and Football League in Senegal
and the Nairobi Board strategy days, the Directors
had ample opportunities to interact with both our
people and external stakeholders and to see the
Group’s culture in action.
Employees
Our people are at the heart of everything we do.
They are central to us delivering against our strategic
objectives and our new vision to be Africa’s leading
and most respected energy business. Our success is
reliant on our culture and the Board is committed to
ensuring that our workforce policies and practices are
aligned with the purpose, values and culture of Vivo
Energy. Further information on employee engagement
is set out on pages 27 and 44.
Shareholders and investors
We want to understand our shareholders’ and
investors’ views and keep them informed about key
developments at Vivo Energy. Securing their trust
through continuous engagement creates alignment
and ensures their ongoing support. Our shareholders
are represented on our Board and the executive
management has engaged with our investors through
regular investor calls.
Other stakeholders
Alongside our shareholders, investors and employees,
we have identified customers, partners, communities
and governments as our main stakeholders.
For further details on how the Board has complied
with section 172 of the Companies Act 2006, see
page 34.
Our customers are
the reason we exist.
Understanding their
needs is paramount to
our future success.
Understanding the views of our
people and stakeholders allows
us to shape our culture and values
thereby ensuring that we are taking
the right approach to our business
and the way we operate.
STRATEGIC REPORT
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FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
47
Role of
the Board
and division of
responsibilities
The Board’s primary role is to
develop the Group’s strategy
and oversee its implementation to
promote the long-term success of
the business, deliver sustainable
shareholder value and protect the
Group’s interests for the benefit of
all our stakeholders.
THE ROLE OF THE BOARD
An effective Board develops and promotes the
purpose of a company, and ensures that its values,
strategy and culture align with that purpose.
Collectively, the Board is responsible for promoting
the long-term success of the Group by setting strategic
priorities, generating value for stakeholders, and
ensuring that the Group continues to contribute to
wider society. In particular, the Board is responsible for
reviewing opportunities and maintaining effective risk
management and internal control systems.
The Board has a comprehensive annual programme
of activities that enables it to monitor and review
strategy across all the elements of the Group’s
business model. Operational and financial
performance, risk, governance, strategy, culture,
and stakeholder matters are frequently discussed to
support Directors’ oversight and understanding of
our business, stakeholders and the markets in which
we operate.
Throughout the year, the Board meets with
management in various different settings to learn how
individual strategies are formed and resourced, which
provides the structure to regularly assess progress
against agreed metrics, and supports the Board in
fulfilling its role.
All Directors are expected to attend all Board and
relevant Committee meetings unless prevented
from doing so by illness or conflict of interest.
Senior executives below Board level are invited,
when appropriate, to attend Board meetings to make
presentations on the results, opportunities, deep
dives, and strategies relating to their OUs. In 2023, five
Board meetings were scheduled. Additional meetings
were held as required. In addition, the Board held two
strategy days.
Board agendas are carefully planned to ensure that
sufficient time and consideration are given to the
Group’s strategic priorities and key monitoring
activities as well as reviews of strategic issues.
In advance of each meeting, papers and relevant
materials are provided to Directors via a secure
web portal which also provides access to a library of
relevant information about the Company and Board
procedures. Directors unable to attend specific
Board or Committee meetings are asked to provide
comments in advance and, if necessary, follow up with
the relevant Chair of the meeting.
In line with other large companies, the Vivo Energy
Board relies on executive management to run the
business with the Board monitoring management
activities and holding them to account against targets
and standards. Responsibility for the running of the
Group is delegated to the CEO, who in turn delegates
certain responsibilities to the Executive Committee
and the Management Committee members relevant
to their respective areas of responsibility.
In order to retain control of key decisions and ensure
there is a clear division of responsibilities between
the Board and the running of the business, the Board
has a clear framework for determining the matters
within its remit, including an agreed schedule of
Matters Reserved for the Board and has approved
Terms of Reference for the matters delegated to
its Committees.
THE CHAIRMAN AND THE CEO
The roles of our Chairman and CEO are separate,
clearly defined in writing and approved by the Board.
The Chairman is responsible for the operation and
leadership of the Board, ensuring its effectiveness and
setting its agenda. The Chairman is also responsible for
maintaining a culture of openness and transparency at
Board meetings.
The Chief Executive Officer is responsible for the
implementation of the Group’s strategy and for
ensuring that Board decisions are implemented as well
as leading and managing the Group’s business within a
set of authorities delegated by the Board. The Chief
Executive Officer is supported by the Executive
Committee and the Management Committee.
DIRECTORS
The Group is led by an effective and committed
Board comprising an engaged group of individuals,
each contributing different experiences, skills and
backgrounds enabling the Board as a whole to provide
challenge, informed opinions and advice on strategy
and relevant topics.
The Vivo Energy Board of Directors comprises
two Non-Executive Directors, one Independent
Non-Executive Director and two Executive Directors.
Two of the Directors represent our shareholders.
Together they ensure high standards of governance
and bring a broad range of skills and experience to
our business. The Board believes that its size and
composition are appropriate to meet the strategic
needs and challenges of the business and to enable
effective decision-making. For further details on the
Directors, please see page 43.
The Vivo Energy Board and individual Directors
have a clear understanding of their accountability
and responsibilities and the relevant policies and
procedures in place. All Directors are encouraged to
use their independent judgement and to constructively
challenge all matters, whether strategic or operational.
Training and development is key to ensuring the
ongoing effectiveness of any board. All new Directors
are offered an induction to assist them in familiarising
themselves with the Group’s operations, the
regulatory environment we operate in, directors’
duties, and the Group’s culture and values. An outline
induction programme is discussed with each
new Director and tailored to meet any specific
requirements. During the year, our Directors have
been briefed, among others, on directors’ duties,
sanctions and environmental matters.
All Directors have access to the advice and services
of the Company Secretary. Directors may take
independent legal and/or financial advice at the
Company’s expense when it is deemed necessary to
discharge their responsibilities effectively. No such
independent advice was sought during the year up to
31 December 2023.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
4 8
ROLE OF THE BOARD AND DIVISION OF RESPONSIBILITIES CONTINUED
Directors’ views on all aspects of the effectiveness of
the Board, its members and its Committees.
The results confirmed that the Board and its
Committees operate effectively and continue to
benefit from a strong mix of complementary skills and
experiences, as well as dynamics that allow for open
debate, challenging existing assumptions and asking
difficult questions.
COMMITTEES
The Board discharges some of its responsibilities
directly while others are discharged through
its principal Board Committees and through
management. The Board has two principal
Committees: the Audit and Risk Committee, and
the Remuneration Committee. In addition to the
principal Committees, the Board is also supported by
the ESG Committee. Each Committee has its own
terms of reference, approved by the Board.
Each Committee has a detailed annual work
programme. Their work feeds into the Board’s
consideration of the Group’s strategy, allowing
the Board to assess whether the strategy remains
appropriate, promotes stakeholder value in a
sustainable manner and whether it is ultimately the
right approach to achieving our purpose.
Following each Committee meeting, the Chair of the
Committee provides an update to the Board, detailing
decisions made, and key matters discussed. Copies of
the Committee minutes are made available to all
Board members to the extent appropriate.
AUDIT AND RISK COMMITTEE
The Committee provides independent assessment
and oversight of the Group’s financial reporting
processes and oversees risk management and internal
control processes, including reviews of principal risks
and external audit. The Committee also monitors
the activities and effectiveness of the Internal
Audit function and has a primary responsibility for
overseeing the relationship with the external auditors.
During the year, the Committee received updates on
the government’s audit and corporate governance
reform; considered risks and the Group’s internal
approval levels and processes; and reviewed Internal
Audit as well as Ethics & Compliance reports.
REMUNERATION COMMITTEE
The Remuneration Committee is responsible
for setting, reviewing and recommending the
remuneration of the Executives and the senior
management team. The Committee also reviews
remuneration arrangements across the Group.
In 2023, the Committee considered the
macroeconomic conditions, rising costs of living
and inflation in the OUs. It also reviewed and
recommended senior management bonuses,
the Management Incentive Plan and vesting of
Long-Term Incentives.
ESG COMMITTEE
The Committee is focused on overseeing the delivery
of the Group’s Sustainability Framework and driving
further integration of sustainability and climate matters
across the Group. The Committee is chaired by the
CEO who provides regular updates to the Board.
EXECUTIVE AND MANAGEMENT COMMITTEES
In addition to the oversight provided by the Board
and its Committees, the Executive Directors are
supported by the Senior Executive Team which helps
them discharge their duties. The Senior Executive
Team comprises the senior leadership team, who have
management responsibility for the business operations
and support functions.
The Executive Committee and the Management
Committee hold regular meetings and relevant
matters are reported to the Board by the Chief
Executive Officer and, as appropriate, by the interim
Chief Financial Officer.
CONFLICTS OF INTEREST
Directors have a statutory duty to avoid situations
in which they may have interests which conflict with
those of the Company. The Board has adopted
procedures as provided for in the Company’s
Articles of Association for authorising existing
conflicts of interest and for the consideration of, and
if appropriate, authorisation of new situations which
may arise.
In deciding whether to authorise a situational conflict,
the non-conflicted Directors take into account their
general duties under the Companies Act 2006.
Limits or conditions can be imposed when giving an
authorisation or subsequently if deemed appropriate.
Any situational conflicts considered by the Board, and
any authorisations given, are recorded in the Board
minutes and in a register of conflicts. As good practice,
the Chair requests each of the Directors to declare
any conflict of interest at each Board/Committee
meeting. The register setting out each Director’s
interests is reviewed by the Board at least annually.
BOARD EVALUATION
In line with best practice, we review the Board’s
effectiveness annually. This year’s evaluation was
facilitated by the Company Secretary and took
the form of a questionnaire designed to elicit the
The roles of Chairman and CEO are separate,
which ensures a balance of power and effective
decision-making. The division of responsibilities
between these roles is clearly defined in writing
and approved by the Board.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
49
Directors’
Report
The Directors present their
Report and the audited
Consolidated and Company
financial statements for the year
ended 31 December 2023.
DIRECTORS’ REPORT
The Company has chosen, in accordance with
section 414C(11) of the Companies Act 2006, to
include certain matters in its Strategic Report that
would otherwise be disclosed in this Directors’
Report. Such information is referenced below.
COMPANY DETAILS AND
CONSTITUTION
Vivo Energy Limited is a company incorporated in
England and Wales with company number 11250655.
The Company’s Articles of Association (the ‘Articles’)
may only be amended by a special resolution at a
general meeting of the shareholders.
As at the date of this Report, the Company’s issued
share capital is composed of two classes of shares,
1,266,941,899 ordinary shares of US$0.50 each and
one deferred share of US$100. The shareholders of
the Company are Vitol Africa B.V. and VIP Blue II B.V.
The Group has no ultimate parent or controlling party.
DIRECTORS
The Directors who served the Company during the
year up to the date of the signing of these financial
statements together with their dates of appointment
and resignation, where appropriate, were as follows:
Stanislas Mittelman (appointed 3 March 2022)
Christopher Bake (appointed 26 July 2022)
Jay Gleacher (appointed 26 July 2022)
Selim Șiper (appointed 26 July 2022)
Matthew Stacey (appointed 26 July 2022)
IMPORTANT EVENTS SINCE THE
END OF THE FINANCIAL YEAR
Details of important events affecting the Group
which have occurred since the end of the financial
year are set out in note 31 to the consolidated
financial statements.
RESULTS
The results for the year are set out on pages 58 to 103.
No dividends were declared during the year.
The Board has not recommended a final dividend for
the period ended 31 December 2023.
CORPORATE GOVERNANCE
The Board adopted the Wates Corporate
Governance Principles for Large Private Companies
(The Principles) as the Company’s governance code
with effect from 1 January 2023. For further details on
how the Principles were applied during the year, see
pages 44 to 48.
RISK MANAGEMENT AND
INTERNAL CONTROL
The Board has overall responsibility for monitoring
the Group’s system of internal control and risk
management and for carrying out a review of its
effectiveness and is supported by the Audit and
Risk Committee. In discharging that responsibility,
the Board confirms that it has established necessary
procedures, including clear operating procedures, lines
of responsibility and delegated authority.
The Board has established a framework of controls,
which enable risk to be assessed and managed, which
is annually reviewed to ensure it remains prudent
and effective.
A robust assessment of the principal and emerging
risks faced by the Company has been undertaken by
the Board assisted by Vivo Energy’s Internal Audit (for
further information please see pages 39 to 41 in the
Strategic Report).
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
50
DIRECTORS’ INDEMNITIES
In accordance with the Company’s Articles and
to the extent permitted by law, Directors are
granted a deed of indemnity from the Company in
respect of liability incurred as a result of their office.
Qualifying third‑party indemnity provisions (as defined
by section 234 of the Act) were in force during the
year ended 31 December 2023 and remain in force.
In addition, the Company provides Board members
with Directors’ and Officers’ Liability Insurance.
Neither the indemnity nor the insurance provides
cover in the event that a Director is proven to have
acted dishonestly or fraudulently.
DIRECTORS’ REPORT CONTINUED
RISKS RELATED TO FINANCIAL
INSTRUMENTS
The Group’s assessment of risks related to financial
instruments can be found on pages 70 to 74 in the
notes to the consolidated financial statements.
OVERSEAS BRANCHES
As at 31 December 2023, the Group had the following
other entities including branches:
– Vivo Energy Tanzania Marketing Limited (foreign
company registered in Tanzania, company
registered in Bahamas). The foreign company name
remains Engen Marketing Tanzania Limited
– Plateau Africa Holdings Limited (branch registered
in Mauritius, company registered in Canada)
– Vivo Energy Namibia Limited (branch registered in
Namibia, company registered in the UK)
– Vivo Energy Overseas Holdings Limited (branch
registered in Kenya, an external company
registered in South Africa, company registered in
Mauritius)
– Vivo Energy Foundation (a charitable foundation
registered in Mauritius)
POLITICAL DONATIONS
No political donations were made during the financial
year. The Company’s policy is that no political
donations be made or political expenditure incurred.
ENGAGEMENT WITH STAKEHOLDERS
We know that engaging closely with all our
stakeholders and understanding their view is
fundamental to building a strong, sustainable business.
Further information on how we engage with our
diverse range of partners and stakeholders is available
within the Strategic Report on page 13.
STREAMLINED ENERGY AND CARBON
REPORTING STATEMENT
As a Group we recognise that our global operations
have an environmental impact and we are committed
to monitoring and reducing our emissions year‑on‑year.
Further details are available in the Strategic Report on
pages 28 to 30.
RESEARCH AND DEVELOPMENT
No material research took place during the
period and is not intended for the current year.
Development activities undertaken comprised
the continued development of the Group’s
internal systems.
FUTURE DEVELOPMENTS
Since Vivo Energy’s inception in 2011, the Company
has had a clear growth strategy and has looked to
deliver sustainable value for all its stakeholders.
Our leading position in Africa means that we are
well positioned to continue to capitalise on the
opportunities that will arise from the growth on
the continent.
EXTERNAL AUDITORS
So far as each Director is aware, there is no relevant
audit information of which the Company’s external
auditor is unaware. Each Director has taken all
steps he or she should have taken as a Director
in order to make himself or herself aware of any
relevant audit information and to establish that
PricewaterhouseCoopers LLP (PwC) is aware of
that information.
In light of the upcoming Engen transaction the Audit
and Risk Committee has recognised a need to
reassess the Group’s current external auditor for
the evolving organisation. Therefore, the Audit and
Risk Committee recommended the re‑tender of the
Group’s external auditor for the 2024 Group audit.
The Directors’ Report was approved by the Board on
14 March 2024.
STAN MITTELMAN
CHIEF EXECUTIVE OFFICER
20 MARCH 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
51
Statement
of Directors’
responsibilities
The Directors are responsible
for preparing the Annual Report
& Accounts and the financial
statements in accordance with
applicable law and regulation.
Company law requires the Directors to prepare
financial statements for each financial year. Under that
law the Directors have prepared the consolidated
financial statements in accordance with UK‑adopted
International Accounting Standards and the Company
financial statements in accordance with United
Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, comprising
FRS 102 ‘The Financial Reporting Standard applicable
in the UK and Republic of Ireland’, and applicable law).
Under company law, Directors must not approve
the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of
the Group and Company and of the profit or loss of
the Group for that period. In preparing the financial
statements, the Directors are required to:
– select suitable accounting policies and then apply
them consistently;
– state whether applicable UK‑adopted International
Accounting Standards have been followed for
the consolidated financial statements and United
Kingdom Accounting Standards, comprising FRS
102 have been followed for the Company financial
statements, subject to any material departures
disclosed and explained in the financial statements;
– make judgements and accounting estimates that
are reasonable and prudent; 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 are responsible for safeguarding the
assets of the Group and Company and for taking
reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are also responsible for keeping
adequate accounting records that are sufficient
to show and explain the Group’s and Company’s
transactions and disclose with reasonable accuracy
at any time the financial position of the Group and
Company and enable them to ensure that the financial
statements comply with the Companies Act 2006.
The Directors are responsible for the maintenance
and integrity of the corporate and financial information
included on the Company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
DIRECTORS’ CONFIRMATIONS
Each of the Directors confirm that, to the best of
their knowledge, at the date of this Report, there is
no relevant audit information of which the Company’s
auditor is unaware. Each Director has taken all the
steps he should have taken as a Director in order to
make himself aware of any relevant audit information
and to establish that the Company’s auditors are
aware of that information.
The Board confirms that the Annual Report and
financial statements when taken as a whole give a true
and fair view and provide the information necessary
for shareholders to assess the strategy, position and
performance and business model of the Group.
For and on behalf of the Board
STAN MITTELMAN
CHIEF EXECUTIVE OFFICER
20 MARCH 2024
JAY GLEACHER
INTERIM CHIEF FINANCIAL OFFICER
20 MARCH 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
52
Financial
Statements
Here we set out our statutory accounts and supporting notes,
which are independently audited and provide in-depth disclosure
on the financial performance of our business.
Independent Auditors’ Report
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Company financial statements
Notes to the Company financial statements
53
58
59
60
61
62
95
96
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
53
Independent
Auditors’ Report
to the members
of Vivo Energy
Limited
REPORT ON THE AUDIT OF THE
FINANCIAL STATEMENTS
OPINION
In our opinion:
– Vivo Energy Limited’s consolidated financial
statements and Company financial statements (the
“financial statements”) give a true and fair view
of the state of the Group’s and of the Company’s
affairs as at 31 December 2023 and of the Group’s
loss and the Group’s cash flows for the year then
ended;
– the consolidated financial statements have been
properly prepared in accordance with UK-adopted
international accounting standards as applied in
accordance with the provisions of the Companies
Act 2006;
– the Company financial statements have been
properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards, including
FRS 102 “The Financial Reporting Standard
applicable in the UK and Republic of Ireland”, and
applicable law); and
– the financial statements have been prepared
in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements, included
within the Annual Report & Accounts (the “Annual
Report”), which comprise: the Consolidated and
Company statements of financial position as at
31 December 2023; the Consolidated statement of
comprehensive income, the Consolidated statement
of cash flows, and the Consolidated and Company
statements of changes in equity for the year then
ended; and the notes to the financial statements,
which include a description of the significant
accounting policies.
BASIS FOR OPINION
We conducted our audit in accordance with
International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the
Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the Group in
accordance with the ethical requirements that are
relevant to our audit of the financial statements in the
UK, which includes the FRC’s Ethical Standard, and
we have fulfilled our other ethical responsibilities in
accordance with these requirements.
OUR AUDIT APPROACH
Overview
Audit scope
– Nine operating units subject to full scope audit of
financial information.
– Four operating units subject to audit of specific
financial statement line items.
– Overall coverage of 76% of revenue was obtained.
Key audit matters
– Government Benefits Receivable (Group)
– Tax audits and Transfer Pricing (Group)
– Carrying Value of Investment in
Subsidiary (Company)
Materiality
– Overall Group materiality: $9,275,000
(2022: US$12,500,000) based on 2.5% of earnings
before tax adjusted for interest, depreciation,
amortisation and special items.
– Overall Company materiality: $19,237,000
(2022: US$19,300,000) based on 1% of total assets.
– Performance materiality: $6,956,000
(2022: US$9,375,000) (Group) and $14,427,750
(2022: US$14,475,000) (Company).
The scope of our audit
As part of designing our audit, we determined
materiality and assessed the risks of material
misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the
auditors’ professional judgement, were of most
significance in the audit of the financial statements of
the current period and include the most significant
assessed risks of material misstatement (whether or
not due to fraud) identified by the auditors, including
those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit;
and directing the efforts of the engagement team.
These matters, and any comments we make on the
results of our procedures thereon, were addressed in
the context of our audit of the financial statements as
a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by
our audit.
The key audit matters below are consistent with
last year.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
5 4
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF VIVO ENERGY LIMITED CONTINUED
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS CONTINUED
KEY AUDIT MATTER
Government Benefits Receivable (Group)
Refer to notes 2.14, 4 and 16 in the Consolidated financial statements.
The Group has $297m (2022: $413m) of gross receivables (offset by provisions of $30m (2022: $11m)) from
governments principally related to subsidies for product prices, transport costs and other incidental costs
where regulated price mechanisms exist. The recoverability and timing of payment of these receivables is not
always certain with some outstanding balances being aged and with governments with poor or no credit ratings.
The balances significantly increased in H2 2022 due to a combination of macroeconomic factors including
high oil prices, depreciation of local currencies and the need for governments to support local populations as
the cost of living increased. This resulted in a higher level of subsidies where governments struggled to make
payments on a timely basis, with some of the governments unable to make repayments as they were adversely
impacted by the deterioration in government finances as a result of the COVID-19 pandemic, high inflation
and increased costs to service existing debt. Whilst during 2023 subsidy levels have fallen in line with the
reduction in crude oil prices and repayments have generally been received, the level of the overall receivables
balance remains high compared to historical norms. Determination of the provisioning required against these
receivables requires consideration of the willingness and ability of the counterparties to meet their obligations,
including how and when the obligations will be met. This can often be complex and highly judgemental.
Due to particular uncertainties in either the timing and/or method of recoverability, the track record of the
governments to settle the balances in full or on a timely basis or whether the costs incurred fall within the
regulatory structure, we identified the receivables in Senegal and Kenya to be where particular audit focus
was required.
Tax audits and Transfer Pricing (Group)
Refer to notes 2.24, 4.2, 9 and 23 in the Consolidated financial statements.
The Group operates in a number of tax jurisdictions including some territories where there are regular tax
assessments and claims raised, which are often settled for less than the amounts claimed. There is judgement
in determining whether a claim will settle and in estimating the level of expected provision needed based
on interpretation of local laws and regulations which are sometimes uncertain and require interpretation.
The claims often focus on the application of transfer pricing policies. Management are required to determine
whether it is probable that the tax authorities will accept the current treatment and, where it is not considered
probable, estimate the expected value or the most likely value of the pay-out. We focused on the judgements
and estimates made by management in assessing the likelihood and quantification of material exposures and
treatment of uncertain tax position provisions.
HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
We assessed the risk of recoverability of each of the balances by considering the:
– existence of an agreed position with the government;
– ageing of existing balances;
– country level credit ratings and other economic data points relating to the relevant government body;
– history of payments and / or delays of such payments / write offs; and
– the proposed settlement mechanism and timing of realisation.
Where we identified the potential for greater risk of recoverability, we sought additional evidence to support
recognition including assessing management’s position against the communications with the local authorities,
historical precedent of similar matters being resolved, the existence of offsetting balances and evidence of the
Group’s efforts to secure payment. In addition, in Senegal we participated in a meeting with a government
representative to understand the governments’ plans for settlement of the balance and in Kenya we reviewed
correspondence with and met with external legal advisors. Where a provision has been recorded we have
assessed the basis for the recognition of the provision, re-performed management’s calculations and carried out
sensitivity analysis to assess the reasonableness of the recorded amounts.
We have also assessed the completeness and accuracy of management’s disclosures in notes 4 and 16. Based on
our work performed, we found the judgements and assumptions used by management in the recoverability
assessment of government benefits receivables to be supportable based on the available evidence.
Our component audit teams and Group team, with the assistance of our local and international tax specialists
and transfer pricing specialists, evaluated management’s judgements in respect of the likelihood of an outflow of
resources and the estimation of the likely value of the outcome/settlements.
For each material position we:
– Discussed with management the nature of the claim and status of communications with the relevant
authorities;
– examined the correspondence in relation to the claim;
– reviewed management’s analysis of these positions, including testing of their detailed workings and basis of
management’s provisions;]
– considered the technical merits of defence, including reviewing any views obtained from management’s tax
advisors; and]
– reviewed management’s history of settlement.
We considered completeness by understanding management’s process for notifying claims, making inquiries of
Group and local management and comparing management’s listing of potential tax exposures to the results of
procedures performed locally by each of our local component teams using local tax experts where appropriate.
We challenged management on the level of provisioning booked for each uncertain tax position, considering
whether the level of provisioning was supportable at an individual claim level and also considered whether there
was any level of bias across the portfolio of provisions. We concluded that the provisions recognised and the
disclosures in the financial statements were reasonable.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
55
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF VIVO ENERGY LIMITED CONTINUED
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS CONTINUED
KEY AUDIT MATTER
Carrying Value of Investment in Subsidiary (Company)
Refer to notes 2.5 and 5 in the Company financial statements.
The company holds a $1,913m investment in its subsidiary Vivo Energy Investments B.V. Due to the quantum of
the carrying amount management’s assessment of any impairment triggers was the key area of focus in the audit
of the Company. IAS 36 Impairment of assets requires management to assess annually whether there have been
an indicators of impairment. Judgement is required to determine whether impairment indicators exist which, if
identified, would require an impairment test to be performed. Management prepared a paper that considered
potential triggers, including both internal and external factors, concluding that there were no indicators.
In performing this trigger assessment management also considered the level of headroom at the previous year
end where a full impairment test was performed and the current year valuations that they have prepared as
part of assessing the recoverable amount of the goodwill for the Group financial statements.
HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
We evaluated management’s impairment trigger assessment and challenged them on the assessment including:
– the completeness of factors considered;
– whether the weaker financial results of the Group in 2023, especially during the first half of the year, could be
a trigger. However, given the impact of one-off factors combined with the improved underlying performance
during the second half of the year; we concluded that no trigger had occurred; and
– whether there was any contradictory evidence available.
We considered the level of headroom from the prior year and applied sensitivities using 2023 actuals and
current growth and discount rates to confirm that significant headroom remained. We also considered other
audit evidence obtained as part of our audit, including the valuation undertaken for the management incentive
plan. We concur with management that there are no indicators of impairment to the carrying value.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we
performed enough work to be able to give an opinion
on the financial statements as a whole, taking into
account the structure of the Group and the Company,
the accounting processes and controls, and the
industry in which they operate.
The Group operates in 24 countries across North,
West, East and Southern Africa. It is structured
such that each country operates semi-autonomously
with oversight, consolidation, and certain activities
performed by Group management. Each country
can contain many legal entities, associates and joint
ventures for which separate financial information is
prepared and monitored. In general, each country
will have a single large operating legal entity that holds
most of the assets, liabilities and transactions.
Reporting packs are prepared by local management
for each legal entity except in some specific cases
where a sub-consolidation is performed and a single
reporting pack is prepared for a number of related
legal entities. We have scoped our audit on the basis
that an operating unit is identified by a reporting pack.
We identified Morocco and Kenya as financially
significant operating units based on their size
compared to the consolidated financial statements
of the Group. A further seven, large operating units
were identified and engaged to perform audits of
their complete financial information in order to
provide appropriate coverage over the operations of
the Group.
Senegal and Kenya were identified as significant
risk operating units relating to the recoverability of
other government benefits receivable as described
in the key audit matters and were already full scope
reporting components.
Procedures were also performed at a Group level
over balances including goodwill and tax as well as
procedures over centralised controls and IT functions
and specific targeted work over certain balances
identified on the basis of risk. The aggregation of all
the holding entities are treated as a single operating
unit with testing performed over balances including
cash, finance expenses, and external borrowings.
Overall coverage of 76% of revenue was obtained.
None of the operating units excluded from our
Group audit scope individually contributed more than
4% to consolidated revenue.
Interactions with operating unit teams varied depending
on their size, complexity and risk. Interactions included:
detailed instruction; a risk assessment and audit
approach planning meeting; detailed deliverables
identifying significant matters and procedures
performed over significant risks; and status and
clearance meetings at key stages of the audit. For larger
and more significant components, file reviews
tailored to the specifics of the component took place.
In person site visits took place in Morocco, Kenya,
Ghana and Tunisia. This was in addition to further
ad hoc discussions on matters of interest.
The Company only audit was performed
independently by the Group engagement team.
This did not contribute to the scope of work
performed on the consolidated financial statements.
The impact of climate risk on our audit
In planning our audit, we have considered the potential
impact of climate change on the consolidated financial
statements. Given the principal activities of the
Group it is highly likely that climate risk will have a
significant impact on the Group’s business. As part of
our audit, we have evaluated management’s climate
change risk assessment including the identified
physical and transition risks and the assessment of
the impact of those risks on the consolidated financial
statements. We note management’s conclusion
that material physical risks are likely to arise in the
longer term and have no current financial statement
impact. Transitional risks are considered to have a
more significant impact on the business. However,
these are only expected to arise in the medium
to long-term given that the energy transition in
Africa is likely to operate on an extended timeline.
We have performed procedures to evaluate the
appropriateness of management’s risk assessment
including comparing current year results against the
transition risk impacted models prepared in 2021
and researching the legislative landscape within the
principal locations in which the Group operates.
We assessed that the key financial statement line items
and estimates which are more likely to be impacted
by climate risks are those associated with future cash
flows, given the more notable impacts of climate
change on the business are expected to arise in the
medium to long-term. These include the impairment
assessment of goodwill and the useful economic life of
non-current assets. However, our procedures did not
identify any material impact on either the consolidated
financial statements or our key audit matters for the
year ended 31 December 2023. We have reviewed
management’s financial statement disclosures relating
to climate change to confirm that they are consistent
with the results of management’s risk assessment and
our audit procedures. Management have presented
disclosures aligned to the recommendations of the
TCFD. We have reviewed these disclosures to ensure
consistency with the financial statements and our
knowledge obtained during the course of the audit.
Materiality
The scope of our audit was influenced by our
application of materiality. We set certain quantitative
thresholds for materiality. These, together with
qualitative considerations, helped us to determine the
scope of our audit and the nature, timing and extent
of our audit procedures on the individual financial
statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in
aggregate on the financial statements as a whole.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
56
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF VIVO ENERGY LIMITED CONTINUED
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS CONTINUED
Based on our professional judgement, we determined
materiality for the financial statements as a whole
as follows:
For each component in the scope of our Group audit,
we allocated a materiality that is less than our overall
Group materiality. The range of materiality allocated
across components was between US$1.4m and
US$7.7m. Certain components were audited to a local
statutory audit materiality that was also less than our
overall Group materiality.
We use performance materiality to reduce to
an appropriately low level the probability that
the aggregate of uncorrected and undetected
misstatements exceeds overall materiality. Specifically,
we use performance materiality in determining the
scope of our audit and the nature and extent of our
testing of account balances, classes of transactions and
disclosures, for example in determining sample sizes.
Our performance materiality was 75% (2022: 75%)
of overall materiality, amounting to $6,956,000
(2022: US$9,375,000) for the consolidated financial
statements and $14,427,750 (2022: US$14,475,000)
for the Company financial statements.
In determining the performance materiality, we
considered a number of factors - the history of
misstatements, risk assessment and aggregation risk
and the effectiveness of controls - and concluded that
an amount at the upper end of our normal range
was appropriate.
We agreed with those charged with governance that
we would report to them misstatements identified
during our audit above US$ 0.7m (Group audit)
(2022: US$1.0m) and US$ 0.7m (Company audit)
(2022: US$1.0m) as well as misstatements below those
amounts that, in our view, warranted reporting for
qualitative reasons.
CONCLUSIONS RELATING TO
GOING CONCERN
Our evaluation of the Directors’ assessment of the
Group and the Company’s ability to continue to adopt
the going concern basis of accounting included:
– Reviewing and challenging management’s going
concern assessment;
– Assessing the underlying forecasts and cash flows,
including the impact of the impending Engen
FINANCIAL STATEMENTS -
CONSOLIDATED
FINANCIAL STATEMENTS -
COMPANY
Overall materiality $9,275,000 (2022: US$12,500,000).
$19,237,000 (2022: US$19,300,000).
How we
determined it
Rationale for
benchmark applied
2.5% of earnings before tax adjusted for
interest, depreciation, amortisation and
special items
The Group is profit-oriented;
therefore, it is considered most
appropriate to use a profit-based
benchmark. The Directors, management
and the users of the consolidated financial
statements focus on adjusted numbers,
being adjusted EBITDA, adjusted EBIT
and adjusted net income. The Group
defines “adjusted” as excluding special
items. Based on this, we consider an
adjusted metric of average earnings before
tax and special items to be the most
appropriate benchmark.
1% of total assets
The entity is a holding Company of the
rest of the Group and is not a trading
entity. Therefore, an asset-based measure
is considered appropriate. The strength
of the Statement of financial position is
the key measure of financial health that
is important to shareholders since the
primary concern for the Company is the
payment of dividends.
transaction, and assessing the assumptions in
light of our understanding of the outlook for the
businesses and the wider market and historical
business performance;
– Inspecting facility agreements and assessing
availability of funding;
– Reviewing management’s covenant calculations,
covering the period to 31 December 2025,
ensuring that the covenant thresholds and
definitions were consistent with the financing
agreements;
– Assessing management’s sensitivities and
performing our own additional sensitivities in order
to determine liquidity and covenant headroom
under severe but plausible scenarios; and
– Assessing the appropriateness of management’s
financial statement disclosure.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the Group’s and the Company’s
ability to continue as a going concern for a period
of at least twelve months from when the financial
statements are authorised for issue.
In auditing the financial statements, we have concluded
that the Directors’ use of the going concern basis
of accounting in the preparation of the financial
statements is appropriate.
Our responsibilities and the responsibilities of the
Directors with respect to going concern are described
in the relevant sections of this report.
REPORTING ON OTHER INFORMATION
The other information comprises all of the information
in the Annual Report other than the financial
statements and our auditors’ report thereon. The
Directors are responsible for the other information.
Our opinion on the financial statements does not
cover the other information and, accordingly, we do
not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of
assurance 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 an apparent material inconsistency or
material misstatement, we are required to perform
procedures to conclude whether there is a material
misstatement of 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 based on these responsibilities.
With respect to the Strategic report and Directors’
Report, we also considered whether the disclosures
required by the UK Companies Act 2006 have
been included.
Based on our work undertaken in the course of
the audit, the Companies Act 2006 requires us
also to report certain opinions and matters as
described below.
Strategic report and Directors’ Report
In our opinion, based on the work undertaken in
the course of the audit, the information given in
the Strategic report and Directors’ Report for the
year ended 31 December 2023 is consistent with
the financial statements and has been prepared in
accordance with applicable legal requirements.
In light of the knowledge and understanding of the
Group and Company and their environment obtained
in the course of the audit, we did not identify any
material misstatements in the Strategic report and
Directors’ Report.
RESPONSIBILITIES FOR THE FINANCIAL
STATEMENTS AND THE AUDIT
Responsibilities of the Directors for the
financial statements
As explained more fully in the Statement of Directors’
responsibilities, the Directors are responsible for the
preparation of the financial statements in accordance
with the applicable framework and for being satisfied
that they give a true and fair view. The Directors
are also responsible for such internal control as they
determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
57
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF VIVO ENERGY LIMITED CONTINUED
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS CONTINUED
In preparing the financial statements, the Directors
are responsible for assessing the Group’s and the
Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern and using the going concern basis of
accounting unless the Directors either intend to
liquidate the Group or the Company or to cease
operations, or have no realistic alternative but to
do so.
Auditors’ responsibilities for the
audit of the financial statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue an auditors’ report
that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of
these financial statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities,
including fraud, is detailed below.
Based on our understanding of the Group and
industry, we identified that the principal risks of
non-compliance with laws and regulations related
to breaches of laws and regulations associated
with importing, transporting, storing and selling
oil products in the countries in which the Group
operates, anti-bribery and corruption laws, health
and safety regulations and competition laws and
regulations, and we considered the extent to which
non-compliance might have a material effect on
the financial statements. We also considered those
laws and regulations that have a direct impact on
the financial statements such as the Companies
Act 2006 and local tax laws and regulations in each
territory. We evaluated management’s incentives
and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of
controls), and determined that the principal risks were
related to posting inappropriate journal entries and
management bias in accounting estimates. The Group
engagement team shared this risk assessment with
the component auditors so that they could include
appropriate audit procedures in response to such
risks in their work. Audit procedures performed by
the Group engagement team and/or component
auditors included:
– Inquiries of the wider senior management team
including members of the Senior Executive Team,
Country Leadership Teams, Internal Audit, Legal,
Finance, Operations, Ethics and Compliance teams.
These inquiries included consideration of known
or suspected instances of non-compliance with
laws and regulations and fraud as well as areas they
perceived as risks.
– Making inquiries of the Group General Counsel
regarding the status and expected outcome of
legal cases and regulatory matters and reviewing
the Group legal case tracker, maintained by the
General Counsel, in respect to all significant legal
matters.
– Reviewing of internal audit reports and adapting
our approach in light of the findings.
– Evaluation of management’s controls designed to
prevent and detect irregularities, in particular their
anti-bribery controls, including understanding the
Group’s bid and contracting approval controls,
the extent to which the Group’s anti-bribery and
corruption programme is embedded in operating
units, assessment of procedures associated with
making one-off payments to counterparties
and searching third party sources for allegations
of corruption made against the Group and its
employees.
– Assessment of matters reported on the Group’s
whistleblowing helpline or through other mediums
and the results of management’s investigation of
such matters.
– Challenging assumptions and judgements made
by management in their significant accounting
estimates, in particular in relation to government
benefits receivables and uncertain tax positions.
– Identifying and testing journal entries both at a
local operating unit level and as part of the Group
consolidation, in particular any journal entries
posted with unusual account combinations or
posted by senior management.
– Review of correspondence with, or reports issued
by, government and regulatory authorities and
assessment of external legal advice received in
respect of any matters raised.
– Incorporating an element of unpredictability into
our audit procedures through the variation of
the nature, timing and extent of the procedures
performed and the inclusion of new components
within the Group audit scope. This included
obtaining correspondence in relation to the
Moroccan Conseil de la Concurrence’s (‘CDC’)
investigation into the fuel retail industry, evidence
of the legal advice and subsequent settlement in
the year.
There are inherent limitations in the audit procedures
described above. We are less likely to become
aware of instances of non-compliance with laws and
regulations that are not closely related to events and
transactions reflected in the financial statements. Also,
the risk of not detecting a material misstatement due
to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete
populations of certain transactions and balances,
possibly using data auditing techniques. However, it
typically involves selecting a limited number of items
for testing, rather than testing complete populations.
We will often seek to target particular items for
testing based on their size or risk characteristics.
In other cases, we will use audit sampling to enable us
to draw a conclusion about the population from which
the sample is selected.
A further description of our responsibilities for
the audit of the financial statements is located
on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part
of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared
for and only for the Company’s members as a body
in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other purpose.
We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other
person to whom this report is shown or into whose
hands it may come save where expressly agreed by
our prior consent in writing.
OTHER REQUIRED REPORTING
COMPANIES ACT 2006 EXCEPTION
REPORTING
Under the Companies Act 2006 we are required to
report to you if, in our opinion:
– we have not obtained all the information and
explanations we require for our audit; or
– adequate accounting records have not been kept
by the Company, or returns adequate for our audit
have not been received from branches not visited
by us; or
– certain disclosures of Directors’ remuneration
specified by law are not made; or
– the Company financial statements are not in
agreement with the accounting records and
returns.
We have no exceptions to report arising from
this responsibility.
Nicholas Stevenson (Senior Statutory Auditor) for and
on behalf of PricewaterhouseCoopers LLP Chartered
Accountants and Statutory Auditors
London
20 March 2024
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
58
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Non-GAAP Measures
US$ million
EBITDA
Adjusted EBITDA
Adjusted net income
2023
303
371
26
2022
427
470
154
Refer to the non-GAAP financial measures definitions and reconciliations to the most comparable IFRS
measures on pages 21 and 22.
US$ million
Revenues
Cost of sales
Gross profit
Selling and marketing cost
General and administrative cost
Share of profit of joint ventures and associates
Other income/(expense)
Earnings before interest and tax (EBIT)
Finance income
Finance expense
Finance expense – net
Earnings before tax (EBT)
Income taxes
Net (loss)/income
Net (loss)/income attributable to:
Equity holders of Vivo Energy Limited
Non-controlling interest (NCI)
Other comprehensive income (OCI)
Items that may be reclassified to profit or loss
Currency translation differences
Net investment hedge (loss)/gain, net of tax
Items that will not be reclassified to profit or loss
Re-measurement of retirement benefits
Income tax relating to retirement benefits
Change in fair value of financial instruments through OCI
Other comprehensive expense, net of tax
Total comprehensive (expense)/income
Total comprehensive (expense)/income
attributable to:
Equity holders of Vivo Energy Limited
Non-controlling interest (NCI)
The notes are an integral part of these consolidated financial statements.
Notes
5
5
7
13
6
8
9
6
14
2023
11,010
(10,348)
662
(315)
(216)
26
5
162
25
(156)
(131)
31
(66)
(35)
(44)
9
(35)
(31)
(13)
3
(1)
1
(41)
(76)
(84)
8
(76)
2022
10,969
(10,237)
732
(247)
(212)
27
(5)
295
11
(98)
(87)
208
(103)
105
91
14
105
(77)
6
–
–
1
(70)
35
29
6
35
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
59
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
US$ million
Assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Investments in joint ventures and associates
Deferred income taxes
Financial assets at fair value through other comprehensive income
Other assets
Current assets
Inventories
Trade receivables
Other assets
Income tax receivables
Other financial assets
Cash and cash equivalents
Total assets
Notes
31 December
2023
31 December
2022
11
26
12
13
9
14
16
17
18
16
15
19
1,021
251
192
235
71
15
334
2,119
602
799
316
19
–
544
2,280
4,399
920
235
188
237
61
13
172
1,826
687
598
554
10
14
500
2,363
4,189
US$ million
Equity
Share capital
Share premium
Accumulated losses
Other reserves
Attributable to equity holders of Vivo Energy Limited
Non-controlling interest
Total equity
Liabilities
Non-current liabilities
Lease liabilities
Borrowings
Provisions
Deferred income taxes
Other liabilities
Current liabilities
Lease liabilities
Trade payables
Borrowings
Provisions
Other financial liabilities
Other liabilities
Income tax payables
Total liabilities
Total equity and liabilities
Notes
31 December
2023
31 December
2022
20
20
26
22
23, 24
9
25
26
22
23
15
25
633
52
(336)
(240)
109
38
147
167
903
83
78
167
1,398
32
1,924
573
15
16
253
41
2,854
4,252
4,399
633
4
(281)
(200)
156
43
199
156
945
89
86
150
1,426
27
1,687
584
15
11
187
53
2,564
3,990
4,189
The notes are an integral part of these consolidated financial statements.
The consolidated financial statements were approved and authorised for issue by the Board of Directors on
14 March 2024 and were signed on its behalf on 20 March 2024 by:
STAN MITTELMAN
JAY GLEACHER
CHIEF EXECUTIVE OFFICER
INTERIM CHIEF FINANCIAL OFFICER
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
6 0
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of Vivo Energy Limited
Other reserves
US$ million
Balance at 1 January 2023
Net loss
Other comprehensive expense
Total comprehensive expense
Capital contribution
Net impact of IAS 294
Dividends paid
Balance at 31 December 2023
Notes Share capital
Share
premium
Accumulated
losses
Reserves1,2
Retirement
benefits
Currency
translation
difference
Fair value
reserves
Equity-settled
incentive
schemes3
633
–
–
–
–
–
–
633
4
–
–
–
48
–
–
52
(281)
(44)
–
(44)
–
(11)
–
(336)
(55)
–
(13)
(13)
–
–
–
(68)
20
21
2
–
2
2
–
–
–
4
(152)
–
(30)
(30)
–
–
–
(182)
5
–
1
1
–
–
–
6
–
–
–
–
–
–
–
–
Attributable to equity holders of Vivo Energy Limited
Other reserves
US$ million
Balance at 1 January 2022
Net income
Other comprehensive expense
Total comprehensive income
Share-based payment expense
Share-based payment modification3
Treasury shares sold
Net impact of IAS 294
Dividends paid5
Balance at 31 December 2022
Notes Share capital
Share
premium
Accumulated
losses
Reserves1,2
Retirement
benefits
Currency
translation
difference
Fair value
reserves
Equity-settled
incentive
schemes3
633
–
–
–
–
–
–
–
–
633
29
29
21
4
–
–
–
–
–
–
–
–
4
335
91
–
91
–
–
–
(9)
(698)
(281)
(59)
–
(1)
(1)
–
–
5
–
–
(55)
2
–
–
–
–
–
–
–
–
2
(90)
–
(62)
(62)
–
–
–
–
–
(152)
4
–
1
1
–
–
–
–
–
5
8
–
–
–
3
(11)
–
–
–
–
Total
156
(44)
(40)
(84)
48
(11)
–
109
Total
837
91
(62)
29
3
(11)
5
(9)
(698)
156
NCI
Total equity
43
9
(1)
8
–
–
(13)
38
NCI
46
14
(8)
6
–
–
–
–
(9)
43
199
(35)
(41)
(76)
48
(11)
(13)
147
Total
equity
883
105
(70)
35
3
(11)
5
(9)
(707)
199
The notes are an integral part of these consolidated financial statements.
Included in reserves is a merger reserve ($82m) relating to the premium on shares issued as part of the consideration of the acquisition of Vivo Energy Overseas Holdings Limited (VEOHL) in March 2019 and a share capital reduction completed subsequent to the listing in 2018.
Included in reserves is a cost of hedging reserve $13m (2022: $1m).
1
2
3 Equity-settled incentive schemes included the Long-Term Incentive Plan (LTIP) and the Restricted Share Award Plan which was modified in 2022 to cash-settled on delisting.
4 The net impact on retained earnings as a result of the index-based adjustments in Ghana and Zimbabwe under IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. The 2022 net impact on retained earnings relates only to Zimbabwe.
5 The dividends paid to the equity holders of Vivo Energy Limited were paid out of distributable reserves (refer to note 10 of the Company financial statements).
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
61
CONSOLIDATED STATEMENT OF CASH FLOWS
US$ million
Operating activities
Net (loss)/income
Adjustment for:
Income taxes
Amortisation, depreciation and impairment
Net gains on disposal of PP&E and intangible assets
Share of profit of joint ventures and associates
Dividends received from joint ventures and associates
Current income tax paid
Net change in operating assets and liabilities and other
adjustments
Cash flows from operating activities
Investing activities
Acquisition of businesses, net of cash acquired
Purchases of PP&E and intangible assets
Proceeds from disposals of PP&E and intangible assets
Other investment activities
Cash flows from investing activities
Financing activities
Proceeds from capital contribution
Proceeds from long-term debt1
Repayment of long-term debt
Net proceeds from bank and other borrowings2
Repayment of lease liabilities
Dividends paid
Interest paid
Cash flows from financing activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of the year
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of the year
Notes
2023
2022
(35)
66
141
(4)
(26)
29
(100)
359
430
(14)
(231)
4
–
(241)
48
555
(664)
117
(35)
(13)
(150)
(142)
47
500
(3)
544
105
103
132
–
(27)
17
(93)
(229)
8
–
(164)
4
(1)
(161)
–
595
–
317
(33)
(707)
(75)
97
(56)
587
(31)
500
9
11, 12, 26
13
13
27
10
11, 12
11, 12
13
20
22
22
22
26
19
The notes are an integral part of these consolidated financial statements.
1 Represents proceeds from the Term loan in 2023 and the Bridge loan in 2022.
2 Other borrowings include the RCF in 2022.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Vivo Energy Limited (‘Vivo Energy’ or the ‘Company’),
was incorporated on 12 March 2018 in the United
Kingdom. The Company is registered in England
and Wales and is a private company limited by
shares (Registration number 11250655) under the
Companies Act 2006. References to ‘Vivo Energy’
or the ‘Group’ mean the Company, its subsidiaries,
joint ventures and associates. These consolidated
financial statements as at and for the period ended
31 December 2023 comprise the Company, its
subsidiaries and subsidiary undertakings, joint ventures
and associates. The Group’s shareholders are
VIP II Blue B.V. and Vitol Africa B.V. The Group has no
ultimate parent or controlling party.
Vivo Energy distributes and sells fuel and lubricants to
retail and commercial consumers in Africa and trades
under brands owned by the Shell and Engen group
of companies. Furthermore, Vivo Energy generates
revenue from Non-fuel retail activities including
convenience retail and quick service restaurants by
leveraging on its Retail network.
Further details on the nature of the Group’s
operations and principal activities can be found in the
Strategic Report.
2. SUMMARY OF MATERIAL
ACCOUNTING POLICIES
The principal accounting policies applied in the
preparation of these consolidated financial statements
are set out below, and have been applied consistently
for all the years presented.
2.1 Basis of preparation
These consolidated financial statements have been
prepared in accordance with UK-adopted International
Accounting Standards. The consolidated financial
statements have been prepared under the historical
cost convention unless otherwise indicated. The effect
of exchange rate changes on cash and cash equivalents
has been presented in line with the guidelines
under IAS 7(28) and is now shown as a reconciling
movement between opening and closing balances.
The preparation of the consolidated financial
statements in conformity with UK-adopted
International Financial Reporting Standards (IFRS)
requires the use of certain critical accounting
estimates. It also requires management to exercise
its judgement in the process of applying the Group’s
accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where
assumptions and estimates are significant to the
consolidated financial statements, are disclosed in
note 4. During the period there were no material
changes to estimates which require significant
judgement by management and no new significant
judgements or estimates have been identified.
Going concern
As part of the Group’s risk management framework,
changes in the nature, likelihood and impact of existing
and new risks are regularly considered, including the
Group’s ability to respond to changes in its business
and the external environment. There have been
no changes in the Group’s principal risks that would
impact the going concern over the next two years.
The Group maintains its debt structure as described
in note 3.2. The notes and the RCF have covenants
for which further information can be found in note
22. Breach of these covenants may result in full and
immediate repayment of the long-term borrowings
and an inability to access the RCF. The Group has met
these covenants in the past and has projected its ability
to continue to do so over the going concern period.
Management has performed severe but plausible
downside scenarios on covenants and liquidity
to identify the impact a decrease in the Group’s
financial performance would have. The scenarios
simulate various macroeconomic conditions such
as depreciation of local currencies, increase in key
costs, changes in the crude oil prices, government
decision-making and high inflation and interest rates
resulting in an adjusted EBITDA decrease of 10%
and 20% and net finance expense increase of 5% and
10%. The scenarios reflect the severity of the above
factors to different degrees. Under the scenarios,
the Group has demonstrated its ability to continue
to meet the covenant requirements and maintain
sufficient headroom. Management have also simulated
the impact on covenants and liquidity following the
completion of the Engen acquisition and concluded
this would not result in a breach of these covenants
over the going concern period.
The Directors maintain a reasonable expectation
that the Company and the Group will have adequate
resources to continue in operational existence during
the going concern period and consider it appropriate
to adopt the going concern basis of accounting in
preparing the financial statements.
IFRS requires the going concern assumption to be
assessed over a period of at least 12 months from
the date of approval of the financial statements.
For the purposes of the going concern assessment,
the Directors have considered a period up to
31 December 2025. The Directors have performed
a going concern assessment based on the forecasts
for this period taken from the Board approved
strategic plan which includes a detailed analysis of the
Group’s future financial and operating performance.
The strategic plan takes into consideration the impact
of the current year performance, future growth
expectations and the effect of other macroeconomic
factors on the performance of sales volumes, gross
cash profit and cash flows.
Based on management’s assessment up to
31 December 2025, the Group is expected to
maintain sufficient available liquidity and generate
positive cash flows to meet its obligations as they
fall due. As at 31 December 2023, the Group has
a committed headroom of $271m which includes
the renewed undrawn committed RCF of $300m.
As of 31 December 2023, the Company has available
short-term capital resources of $2,378m, which
also includes $1,534m of uncommitted facilities.
Despite these facilities being uncommitted the
Group has continued to have access to and utilise the
uncommitted short-term funding lines throughout the
year, and where necessary renew them in the normal
course of business. Therefore, the Directors expect
these uncommitted facilities to continue to be available
to the Group for the foreseeable future.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. SUMMARY OF MATERIAL
ACCOUNTING POLICIES CONTINUED
2.1 Basis of preparation (continued)
Climate change
In preparing the consolidated financial statements
management has considered the impact that
climate change may have. Management has assessed
the impact of climate change on the business.
Additional information can be found on pages 35
to 38. The Task Force on Climate-Related Financial
Disclosures (TCFD) is a reporting framework that
consists of a list of recommendations for companies to
consider, with the aim being to improve and increase
the reporting of climate-related financial information.
The Group’s previous scenario assessment,
performed in accordance with the TCFD reporting
framework, remains relevant and reflective of the
current period. There have been no developments
in the organisation or climate change factors that
would result in a significant or material impact on the
outcome of key accounting judgements and estimates,
including going concern, asset useful economic lives,
asset valuations and impairments, as the impact of
transitional risks is only forecast to have a significant
impact on the Group’s business and cash flow beyond
the point at which asset carrying values are realised.
Across the African continent, countries are preparing
for the energy transition by implementing policy and
legislative frameworks that respond to climate change
and the Paris Climate Agreement commitments.
The governments in Ghana, Kenya, Morocco, Namibia,
Tanzania and Uganda are some of those which have
increased their efforts to improve and diversify their
energy supply mix. As set out on pages 28 to 30 of
the Strategic Report, while the Group continues to
introduce initiatives designed to reduce the carbon
emissions from its direct operations and develop
alternative product offerings, the Group considers
that the transition towards a low-carbon economy in
its primary markets will be over a longer time period
than will be seen in the UK and the European Union.
As a result, the Group considers that the market
for oil products across Africa will continue to grow
within its medium-term planning horizons and this
assumption is embedded within the Group’s strategic
business plan which in turn supports a number of key
forward-looking accounting judgements and estimates.
Furthermore, the Group does not foresee restrictions
on accessing capital markets and has demonstrated
its ability to raise additional debt and equity funding
at competitive market rates in the recent past.
Therefore, there is currently no indication that climate
change will negatively impact the Group’s cost of
capital to the extent that changes in the discount
rates, used in accounting estimates and judgements,
would result in a material adjustment to the financial
statement balances.
2.2 Application of new and revised IFRS
The following amendments and new interpretations
to the IFRS standards effective for annual periods
beginning on or after 1 January 2023 are applicable
and have been applied in preparing the consolidated
financial statements and do not have a material impact
for the Group:
– Narrow-scoped amendments to IAS 1, IAS 8,
IAS 12 and Practice Statement 2
There are no other standards, amendments and
interpretations which are effective for the financial
year beginning on 1 January 2023 that have an impact
on the consolidated financial statements of the Group.
2.3 New standards, amendments and
interpretations not yet adopted
The following amendments to the standards
effective for annual periods beginning on or after
1 January 2024 have not been applied in preparing the
consolidated financial statements of the Group:
– Narrow-scoped amendments to IAS 1, IAS 7,
IAS 28, IFRS 7, IFRS 10 and IFRS 16
– IFRS S1 and IFRS S2
The impact of IFRS S1 and IFRS S2 is under
assessment. There are no other IFRS amendments
that are not yet effective which would be expected
to have a material impact on the Group.
2.4 Consolidation
The Group is made up of various entities, subsidiaries,
joint ventures and associates. Details regarding all
entities are included in note 14 in the Company
financial statements.
Subsidiaries
Subsidiaries are entities controlled by the Group.
Control is achieved when the Group is exposed to,
or has rights to, variable returns from its involvement
with the entity and has the ability to affect those
returns through its power over the entity.
The Group reassesses whether or not it controls an
investee if the facts and circumstances indicate that
there may be changes to one or more of the elements
of control. Subsidiaries are consolidated from the
effective date of control and deconsolidated from the
date that control ceases.
Profit or loss and each component of other
comprehensive income are attributed to the owners
of the Group and to the non-controlling interests.
Total comprehensive income of subsidiaries is
attributed to owners of the Group and to the
non-controlling interests even if this results in the
non-controlling interests having a deficit balance.
All intra-group transactions and balances, income,
expenses and cash flows are eliminated on
consolidation. Where necessary, accounting policies
of subsidiaries are adjusted to ensure consistency with
the policies adopted by the Group.
Changes in ownership interests in subsidiaries
without change of control
Transactions with non-controlling interests that do not
result in loss of control are accounted for as equity
transactions, that is, as transactions with the owners
in their capacity as owners. The difference between
fair value of any consideration paid and the relevant
share acquired of the carrying value of net assets of
the subsidiary is recorded in equity. Gains or losses on
disposals to non-controlling interests are also recorded
in equity.
Joint arrangements
Joint arrangements are contractual arrangements
whereby the Group and other parties undertake
activities that are under joint control, meaning that
the relevant activities that significantly affect the
investee’s returns require the unanimous consent of
the parties sharing control. Joint arrangements are
classified as either joint operations or joint ventures
depending on the contractual rights and obligations
of each investor. The Group has assessed the nature
of its joint arrangements and determined them to be
joint ventures. Joint ventures are joint arrangements
whereby the parties that have joint control have the
rights to the net assets of the arrangement and are
accounted for using the equity method.
Under the equity method, the investment is initially
recognised at cost adjusted for the post-acquisition
changes in the Group’s share of net assets of the
joint venture, less any impairment in the value of the
investment. The Group’s share of post-tax profits
or losses are recognised in the consolidated income
statement. Losses of a joint venture in excess of the
Group’s interest investment in that joint venture are
recognised only to the extent that the Group has
incurred legal or constructive obligations or made
payments on behalf of the joint venture.
Unrealised gains on transactions between the
Group and its joint ventures are eliminated to
the extent of the Group’s interest in the joint
ventures. Unrealised losses are eliminated unless the
transaction provides evidence of an impairment of the
asset transferred.
Where necessary, accounting policies of the joint
ventures are adjusted to ensure consistency with the
policies adopted by the Group.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
6 4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. SUMMARY OF MATERIAL
ACCOUNTING POLICIES CONTINUED
2.4 Consolidation (continued)
Investments in associates
Associates are entities where the Group has significant
influence and is neither a subsidiary nor an interest in
a joint venture.
Significant influence is the power to participate in the
financial and operating policy decisions of the investee
but where the Group does not have control or joint
control over those policies.
At the date of acquisition, any excess of the cost of the
acquisition over the Group’s share of the net fair value
of the identifiable net assets, liabilities and contingent
liabilities of the associate is recorded as goodwill.
The goodwill is included within the carrying amount
of the investment. Investments in associates are
accounted for using the equity method of accounting.
Under the equity method, the investment is
initially recognised at cost and adjusted for the
post-acquisition changes in the Group’s share of net
assets of the associate, less any impairment in the
value of the investment. The Group’s share of post-tax
profits or losses are recognised in the consolidated
income statement. Losses of an associate in excess
of the Group’s interest in that associate are recognised
only to the extent that the Group has incurred legal
or constructive obligations or made payments on
behalf of the associate. Dividends received from
associates and/or joint ventures are classified as an
operating activity.
2.5 Business combination
The Group applies the acquisition method to
account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair
values of the assets and liabilities transferred and the
equity interests issued by the Group.
The consideration transferred includes the fair value
of any asset or liability resulting from a contingent
consideration arrangement. Identifiable assets and
liabilities acquired and contingent liabilities assumed in
a business combinations are measured initially at their
fair values at acquisition date. The Group recognises
any non-controlling interest in the acquiree on an
acquisition-by-acquisition basis, either at fair value or
at the non-controlling interest’s proportionate share
of the recognised amounts of acquiree’s identifiable
net assets. Acquisition related costs are expensed
as incurred.
Any contingent consideration to be transferred by
the Group is recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the
contingent consideration that is deemed to be an
asset or liability is recognised in accordance with
IFRS 9 ‘Financial Instruments’ either in profit or loss
or as a change to other comprehensive income.
Contingent consideration that is classified as equity
is not remeasured, and its subsequent settlement is
accounted for within equity.
Goodwill is initially measured as the excess of the
aggregate of the consideration transferred and the
fair value of non-controlling interest over the net
identifiable assets acquired and liabilities assumed.
If this consideration is lower than the fair value of the
net assets of the subsidiary acquired, the difference is
recognised in profit or loss.
Inter-company transactions, balances, income and
expenses on transactions between group companies
are eliminated. Profits and losses resulting from
inter-company transactions that are recognised in
assets are also eliminated. Accounting policies of the
subsidiaries have been changed where necessary
to ensure consistency with the policies adopted by
the Group.
2.6 Foreign currency translation
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 functional currency of the Company is US dollars.
These consolidated financial statements are presented
in US dollars, which is the functional and presentation
currency of the Company.
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 year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies,
are recognised in the consolidated statements of
comprehensive income.
Foreign exchange gains and losses that relate to
monetary items such as borrowings, receivables
and cash and cash equivalents are presented in the
consolidated statements of comprehensive income
within cost of sales for trading related gains and
losses and within finance income and expense for
non-trading related gains and losses.
Translation differences on non-monetary financial
assets, such as equities classified as financial
assets at fair value through other comprehensive
income (FVTOCI), are included in other
comprehensive income.
The financial statements of entities in
hyperinflationary economies are translated in
accordance with IAS 29 ‘Financial Reporting in
Hyperinflationary Economies’.
Accounting for hyperinflation
The results of the Group’s operations within
entities based in Zimbabwe have been prepared in
accordance with IAS 29 as if the economy had been
hyperinflationary from date of acquisition.
In October 2023, the Republic of Ghana’s economic
status was officially classified as hyperinflationary.
The Group has duly implemented IAS 29 in relation
to its operations within the Ghanaian territory, with
the effective commencement date set as January
2023. The accounting of IAS 29 has been applied
in line with the standard as if the entity had always
been hyperinflationary.
Hyperinflationary accounting requires transactions and
balances to be stated in terms of the measuring unit,
current at the end of the reporting period in order
to account for the effect of loss of purchasing power
during the period. The Group has elected to use
the Consumer Price Index (CPI), as published by the
Ghana Central Bank and Zimbabwe Reserve Bank, as
the general price index to restate amounts, since CPI
provides an official observable indication of the change
in the price of goods and services.
The carrying amounts of non-monetary assets and
liabilities carried at historical cost have been adjusted
to reflect the impact of the CPI. Amortisation,
depreciation and impairments shall be recalculated
based on the carrying amounts of property, plant and
equipment, right-of-use assets and intangible assets
restated to reflect the change in the general price
index. All other items recognised in the statement of
comprehensive income are restated by applying the
change in the general price index from the dates when
the items of income and expenses were originally
recorded. The restatement of income and expenses
are carried out on a monthly basis by applying the
respective conversion factor. The net impact of these
gains or losses, have been recognised in the statement
of comprehensive income.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. SUMMARY OF MATERIAL
ACCOUNTING POLICIES CONTINUED
2.6 Foreign currency translation (continued)
All items in the statement of cash flows are expressed
in terms of the general price index at the end of the
reporting period. Following the application of IAS 29,
the financial statements of Ghanaian and Zimbabwean
subsidiaries are translated at the closing exchange rate
applicable for the period.
The impact of applying IAS 29 in the current
period resulted in an increase in property, plant
and equipment of $9m (2022: $15m), an increase in
intangible assets of $1m (2022: $5m) and an increase
in net income of $5m (2022: $3m decrease).
Group companies
The results and financial position of all the Group
entities with a functional currency other than
the presentation currency are translated into the
presentation currency as follows:
– Assets and liabilities are translated at the closing
rate at the reporting date;
– Income and expense items and cash flows are
translated at the average exchange rates for the
period (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
rate on the dates of the transactions); and
– Exchange differences arising are recognised
directly in other comprehensive income.
Goodwill and fair value adjustments arising on
the acquisition of a foreign entity are treated
as assets and liabilities of the foreign entity and
translated accordingly.
2.7 Revenue recognition
When the Group enters into an agreement with
a customer, goods and services deliverable under
the contract are identified as separate performance
obligations (‘obligations’) to the extent that the
customer can benefit from the goods or services on
their own and that the separate goods and services
are considered distinct from other goods and services
in the agreement. Where individual goods and services
do not meet the criteria to be identified as separate
obligations they are aggregated with other goods and/
or services in the agreement until a separate obligation
is identified.
Revenue from the sale of goods, such as fuel and
lubricants and any other products are recognised
when the Group has fulfilled its performance
obligation to a customer at a point in time.
The performance obligation to customers is fulfilled
when the Group’s products are delivered to the
customer and transfer of title occurs. The Group does
not offer bundled products.
The transaction price is the amount of consideration to
which the Group expects to be entitled in exchange for
transferring promised goods or services to a customer.
The transaction price is allocated to the performance
obligation in the contracts and excludes amounts
collected on behalf of third parties (i.e. sales taxes,
excise duties and similar levies). The majority of the
markets in which the Group operates are regulated
and have fixed prices that are established either by
the government or the industry. The Group may
offer discounts and volume rebates to customers.
Where applicable, discounts are pre-agreed in the
contracts that form part of the price determination
over the life of the contract. Volume rebates are
determined periodically, and recorded against revenue.
Vivo Energy Kenya Ltd, like other oil marketers in
Kenya, participates in the Open Tender System
(OTS). Oil-marketing companies are legally required
to import petroleum products through the OTS, that
is centrally coordinated by the Ministry of Energy.
This legal notice is governed by the OTS agreements
signed between all Kenyan licensed oil marketers.
Vivo Energy Kenya Ltd does not only participate in this
process but also purchases from the suppliers and sells
the petroleum products through the OTS to other oil
marketing companies. Related revenues are recognised
at the fair value of the consideration received or
receivable once Vivo Energy Kenya Ltd has transferred
the goods to the customer and fulfilled its performance
obligation. The OTS process was replaced in the first
half of 2023. OMC’s now individually procure product
from a central government importer.
Vivo Energy Supply B.V. was established to consolidate
functional activities across the operating units and
leverage economics of scale by streamlining sourcing
and procurement across markets. Vivo Energy
Supply B.V. purchases product from Vitol and
third party suppliers and provides products to the
Group’s operating units and external customers.
The contractual responsibility of Vivo Energy
Supply B.V. is to provide goods to the customer.
The contractual performance obligation is satisfied
upon delivery of goods to the customer based
on the incoterms. Revenue is recognised once
the performance obligation has been fulfilled and
presented on a gross basis as Vivo Energy Supply B.V.
acts as a principal in the supply of its products.
For sales of services, the total consideration in the
service contracts is allocated to all services based on
their stand-alone selling prices. The stand-alone selling
price is determined based on the list prices at which
the Group sells the services in separate transactions.
The transaction price is allocated to the performance
obligations identified in the contract. The revenue
from services are recognised over a period of time as
the performance obligations are met. Rental income
is accounted for in revenue and recognised over the
duration of the rental contract.
The Group recognises an asset for the incremental
costs of obtaining a contract with a customer if the
Group expects the benefit of those costs to exceed
one year. The Group has determined that certain
sales incentive programmes meet the requirements
to be capitalised.
The Group applies a practical expedient to expense
costs as incurred for costs to obtain a contract when
the amortisation period would have been one year
or less.
2.8 Finance income and expense
Finance income and expense are recognised in the
income statement using the effective interest rate
method. All finance costs are recognised in the periods
in which they are incurred. In the cash flow statement,
finance expense is classified as a financing activity and
finance income as an operating activity.
2.9 Consolidated statement of
comprehensive income presentation
Cost of sales reflects costs relating to the revenue
recognised, including depreciation costs. Selling and
marketing costs reflect the marketing, selling costs,
depreciation and amortisation costs. The general and
administrative costs reflect all central and corporate
costs, including employee and depreciation costs.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
6 6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. SUMMARY OF MATERIAL
ACCOUNTING POLICIES CONTINUED
2.10 Property, plant and equipment
Property, plant and equipment is carried at
historical cost less accumulated depreciation and any
accumulated impairment losses.
The initial cost of an asset comprises its purchase price
or construction cost and any costs directly attributable
to bringing the asset into operation. The purchase
price or construction cost is the aggregate amount
paid and the fair value of any other consideration given
to acquire the asset. Property, plant and equipment is
depreciated on a straight-line basis over the estimated
useful lives of the various classes of assets and
commences when the asset is ready for use. Land and
construction-in-progress are not depreciated.
The following depreciation rates are applied for
the Group:
Buildings:
Machinery and other equipment:
20 – 50 years
4 – 25 years
Major improvements are capitalised when they
are expected to provide future economic benefit.
When significant components of property, plant and
equipment are required to be replaced at regular
intervals, the Group derecognises the replaced part
and recognises the new part with its own associated
useful life and depreciation. Repairs and maintenance
costs are charged to the consolidated statement of
comprehensive income as incurred.
The carrying amount of an item of property, plant
and equipment is derecognised on disposal, or
when no future economic benefits are expected
from its use or disposal. Any gain or loss arising
from the derecognition of property, plant
and equipment is included in the consolidated
statements of comprehensive income when the item
is derecognised.
Each asset’s estimated useful life, residual value and
method of depreciation are reviewed and adjusted, if
appropriate, at each year-end.
2.11 Intangible assets
Goodwill
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred
over the acquirer’s interest in fair value of the net
identifiable assets, liabilities and contingent liabilities of
the acquiree and the fair value of the non-controlling
interest in the acquiree.
Goodwill is allocated to cash-generating units (CGUs)
for the purpose of impairment testing. The allocation
is made to those CGUs or groups of CGUs that are
expected to benefit from the business combination in
which the goodwill arose. The units or groups of units
are identified at the lowest level at which goodwill is
monitored for internal management purposes, being
the operating segments.
For goodwill recognised in the consolidated
statements of financial position, impairment reviews
are undertaken annually, once goodwill has been
allocated to CGUs, or more frequently if events
or changes in circumstances indicate a potential
impairment. The carrying value of the CGU to which
goodwill is allocated is compared to the recoverable
amount. Any impairment is recognised immediately as
an expense and is not subsequently reversed.
Shell Licence Agreements (‘Licences’)
The Licences acquired grant the Company the
exclusive right to distribute and market Shell-branded
products in the relevant countries. The Licences are
recognised at their fair value at the acquisition date
and are carried forward at cost less accumulated
amortisation calculated using the straight-line method
over the expected useful life of 15 years. The Licences
expire in December 2031.
Computer software
Computer software comprises software purchased
from third parties as well as the cost of internally
developed software. Computer software licences are
capitalised on the basis of the costs incurred to acquire
and bring into use the specific software. Costs that are
directly associated with the production of identifiable
and unique software products that are controlled
by the Group, and where it is probable of producing
future economic benefits, are recognised as intangible
assets. Direct costs of software development include
employee costs and directly attributable overheads.
Costs associated with maintaining software programs
are recognised as an expense when they are incurred.
Amortisation is charged on a straight-line basis over
their estimated useful lives of three to ten years. As at
31 December 2023, internally developed software
relating to the ERP system has a remaining useful life
of six years.
Where an impairment loss subsequently reverses,
the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only
to the extent that the increased carrying amount does
not exceed the original carrying amount that would
have been determined, net of depreciation, had no
impairment loss been recognised for the asset in prior
years. Any impairment reversal is recognised in the
consolidated statements of comprehensive income.
Other intangible assets
Other intangible assets include Butagaz brand, LPG
retail distributor relationships and Commercial
LPG customer relationships recognised at their fair
value allocated at acquisition date are subsequently
measured at carrying amount less accumulated
amortisation calculated using the straight-line
method over the expected useful life of 10 to
15 years. The VEOHL business acquisition in 2019
attributed additional intangible assets recognised
through application of IFRS 3 ‘Business Combinations’.
These intangible assets relate to customer
relationships and the use of the Engen brand with
useful lives of between 10 to 15 years.
2.12 Impairment of non-financial assets
At least annually, the Group reviews the carrying
amount of tangible and intangible assets with finite
lives to assess whether there is an indication that
those assets may be impaired. If any such indication
exists, the Group makes an estimate of the asset’s
recoverable amount. An asset’s recoverable amount
is the higher of an asset’s fair value less costs to sell
and its value in use. In assessing its value in use or fair
value less cost of disposal, the estimated future cash
flows attributable to the asset are discounted to their
present value using a pre-tax or post-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset. If the
recoverable amount of an asset is estimated to be less
than its carrying amount, the carrying amount of the
asset is reduced to its recoverable amount.
A corresponding impairment loss is recognised in the
consolidated statements of comprehensive income.
2.13 Inventories
Inventories are stated at the lower of cost and net
realisable value. Cost comprises direct purchase
costs (including transportation), cost of production,
manufacturing and taxes, and is determined using the
weighted average cost method.
2.14 Other government benefits receivable
Other assets include other government benefits
receivable that reflect subsidies received from national
governments for fuel sold as part of the Group’s
ordinary course of business.
The following types of compensation are applicable to
the Group:
– Amounts due from/to the government for
oil purchased at higher/ lower prices than the
price set by the local authority. Where the oil
purchasing price paid by the Group is higher than
the price set by the local authorities, a receivable
due from the government is recognised by
the Group to compensate for the higher price
paid. Similarly, if the purchasing price of oil is
lower than the set price, a liability towards
the government is recognised. If collections/
payments are expected in one year or less, the
receivable/liability are classified as current assets/
current liabilities. If not, they are presented as
non-current assets/non-current liabilities. As at
31 December 2023, this relates to Vivo Energy
Botswana, Côte d’Ivoire, Gabon, Guinea, Kenya,
Madagascar, Morocco, Mozambique, Namibia
and Senegal.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. SUMMARY OF MATERIAL
ACCOUNTING POLICIES CONTINUED
2.14 Other government benefits
receivable (continued)
– Amounts due from/to the government for
transport costs incurred to encourage marketers
to distribute products to remote areas of the
country. The government has introduced a
pricing mechanism whereby if the Group only
delivers to local areas, then a liability requiring
payment to the government will be recognised.
If the Group delivers to remote areas, then a
receivable owing from the government will be
due. If collections/payments are expected in one
year or less, the receivable/liability are classified
as current assets/current liabilities. If not, they
are presented as non-current assets/non-current
liabilities. As at 31 December 2023, this relates
to Vivo Energy Botswana, Gabon, Guinea
and Morocco.
The origination of these receivables arises from
legal rights based on government schemes of
taxation and subsidies and not from any contractual
agreements. As such, they are not considered
as financial instruments within the scope of
IFRS 9 ‘Financial Instruments’ and are accounted
for under IAS 20 ‘Accounting for Government
Grants and Disclosure of Government Assistance’.
Other government benefits receivable are recognised
initially at fair value, which represents the difference
between the market value if sold at arm’s length
and the price set by the government. The subsidy is
accrued to match the associated cost to which the
compensation has been granted. Initial recognition
and any subsequent adjustments are recognised
within cost of sales in the consolidated statement of
comprehensive income.
If a receivable is recognised as owing from the
government and there is risk over the recoverability
of that asset, then a provision for impairment will
be recognised.
Where the Group enters into factoring arrangements
it transfers and derecognises other government
receivables if either:
– The Group has transferred substantially all the
risks and rewards of ownership of the asset; or
– The Group has neither transferred nor
retained substantially all the risks and rewards
of ownership of the asset and no longer retains
control of the asset.
Under the continuing involvement approach, the
Group continues to recognise part of the asset.
The amount of the asset that continues to be
recognised is the maximum amount of the Group’s
exposure to that particular asset or its previous
carrying amount, if lower.
2.15 Financial instruments
Financial instruments consist of:
– Financial assets, which include cash and cash
equivalents, trade receivables, lease receivables,
employee and other advances, equity
investments and derivative financial instruments
and eligible current and non-current assets; and
– Financial liabilities, which include long-term
and short-term loans and borrowings, bank
overdrafts, trade payables, lease liabilities,
derivative financial instruments and eligible
current and non-current liabilities.
Financial instruments are recognised initially at fair
value plus or minus, for an item not at fair value
through profit and loss (FVTPL), transaction costs
that are directly attributable to its acquisition or
issue. Financial instruments are initially recognised
when the Group becomes a party to the contractual
provisions of the instrument. Trade receivables
are initially recognised when they are originated.
Financial assets are derecognised when substantial
risks and rewards of ownership of the financial asset
have been transferred. In cases where substantial risks
and rewards of ownership of the financial assets are
neither transferred nor retained, financial assets are
derecognised only when the Group has not retained
control over the financial asset. Financial liabilities are
derecognised when its contractual obligations are
discharged, cancelled or expired, and when its terms
are modified and the cash flows are substantially
different. Subsequent to initial recognition, financial
instruments are measured as described below.
Financial instruments measured at amortised cost
Except for debt instruments that are designated at
fair value through profit or loss (FVTPL) on initial
recognition, financial instruments that meet the
following criteria are measured at amortised cost using
the effective interest method:
– They are held within a business model whose
objective is to hold assets in order to collect
contractual cash flows; and
– The contractual terms of the instrument give rise
on specified dates to cash flows that are solely
payment of principal and interest on the principal
amount outstanding.
The amortised cost is reduced by impairment losses.
Finance income or expense, foreign exchange gains
and losses and impairments are recognised in profit
and loss. The following financial assets and liabilities are
classified as measured at amortised cost:
Cash and cash equivalents
Cash and cash equivalents, on the statement of
financial position and for the purpose of the cash
flow statement, includes cash on hand, in banks,
placements held at call with banks and other
short-term highly-liquid investments with maturities
of three months or less. Where the Group does not
have the right to offset, bank overdrafts are shown as
borrowings in current liabilities on the consolidated
statement of financial position.
Trade receivables
Trade receivables are amounts due from customers
for goods sold or services performed in the ordinary
course of business. If collection is expected in one
year or less they are classified as current assets. If not,
they are presented as non-current assets. The Group
may obtain security for certain trade receivables in
the form of cash deposit, bank guarantees, credit
insurance and assets securities, which can be called
upon if the counterparty is in default under the terms
of the agreement.
Government bonds
Government bonds are initially recognised at fair value
less transaction costs and are subsequently measured
at amortised cost. Interest income on government
bonds is calculated using the effective interest rate
method and is recognised in profit or loss.
Trade payables
Trade payables are obligations to pay for goods or
services that have been acquired in the ordinary
course of business from suppliers. Accounts payable
are classified as current liabilities if payment is due
within one year or less (or in the normal operating
cycle of the business if longer).
If not, they are presented as non-current liabilities.
Where trade finance facilities are used to extend
payment terms, these facilities are presented as
short-term borrowings in the consolidated statement
of financial position.
Trade payables are measured at amortised cost and
the fair value approximates the carrying amount.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
6 8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. SUMMARY OF MATERIAL
ACCOUNTING POLICIES CONTINUED
2.15 Financial instruments (continued)
Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred and subsequently carried at
amortised cost. Any difference between the proceeds
(net of transaction costs) and the redemption
value is recognised in the consolidated statement
of comprehensive income, over the period of the
borrowings, using the effective interest method.
Other assets and other liabilities
Other assets such as employee loans, brand
promotion fund receivables, customer deposits and
other liabilities are measured at amortised cost using
the effective interest rate method.
Equity investments at fair value through other
comprehensive income (FVTOCI)
For equity investments not held for trading, the
Group elected to present subsequent changes in
the investment’s fair value in other comprehensive
income. The Group subsequently measures these
assets at fair value with fair value gains and losses
recognised in other comprehensive income and never
reclassified to profit or loss. Dividends are recognised
in profit or loss as other income when the Group’s
right to receive payment is established.
Financial instruments measured at fair value
through profit or loss (FVTPL)
Instruments that are not measured at amortised
cost or FVTOCI are measured at FVTPL.
These instruments are subsequently measured
at fair value, with any gains or losses arising on
re-measurement recognised in profit or loss.
The gain or loss on disposal is recognised in profit
or loss. Financial instruments at FVTPL include
derivative financial instruments.
Derivative financial instruments
The Group is exposed to foreign currency fluctuations
on foreign currency assets, liabilities, net investment
in foreign operations and forecasted cash flows
denominated in foreign currency.
The Group limits the effect of foreign exchange
availability and rate fluctuations by following the
established risk management policies including the
use of derivatives. The Group enters into derivative
contracts where the counterparty is primarily a bank.
Derivative financial instruments are initially
recognised and subsequently measured at fair value.
Attributable transaction costs are recognised in profit
or loss as a cost.
Changes in fair value of foreign currency derivative
instruments neither designated as cash flow hedges
nor hedges of net investment in foreign operations
are recognised in profit or loss and reported within
foreign exchange gains, net within results from
operating activities.
Changes in fair value and gains or losses on the
settlement of foreign currency derivative financial
instruments relating to borrowings, which have not
been designated as hedges, are recorded in finance
expense. Changes in fair value and gains or losses on
the settlement of foreign currency derivative financial
instruments relating to operational transactions, which
have not been designated as hedges, are recorded in
other income.
Net investment hedges
When a derivative is designated as the hedging
instrument in a hedge of a net investment in a
foreign operation, any gain or loss on the hedging
instrument relating to the effective portion of
the hedge is recognised in OCI and presented
in currency translation reserve within equity.
The gain or loss relating to the ineffective portion is
recognised immediately in profit or loss. The amount
recognised in OCI is reclassified to profit or loss
as a reclassification adjustment on disposal of the
foreign operation.
2.16 Impairment of financial assets
The Group applies the expected credit loss (ECL)
model for recognising impairment losses on financial
assets measured at amortised cost. The ECL is the
difference between the contractual cash flows and
the cash flows that the entity expects to receive
discounted using the effective interest rate.
Loss allowance for financial assets other than trade
receivables are measured at the amount equal to
12 months’ ECL, as they are considered low risk, unless
there has been a significant increase in credit risk from
initial recognition, in which case those are measured
at lifetime ECL. Since the contractual terms for most
of the Group’s financial assets are typically less than
12 months, there is no significant difference between
the measurement of 12 months’ and lifetime ECL.
For trade receivables, a simplified impairment
approach is applied and the ECL is measured at the
amount equal to lifetime ECL. Lifetime ECLs are the
ECLs that result from all possible default events over
the expected life of a financial asset. Lifetime ECL
for trade receivables is computed by taking into
account historical credit loss experience adjusted
for forward-looking information. Experienced credit
judgement is applied to ensure that the weighted
probabilities of default are reflective of the credit risk
associated with the Group’s exposure.
The measurement of the ECL is a function of
the probability of default, loss given default
(i.e. the magnitude of the loss after recovery if there is
a default) and the exposure at default (i.e. the asset’s
carrying amount). The ECL is based on the historical
impairment data, of trade receivables, grouped into
various age categories and geographical location.
The impact of forward-looking macroeconomic
factors on the expected credit losses are taken into
account in the impairment data used for the ECL
model. The Group considers there to be a high
magnitude of exposure on default of debt, when
the counterparty fails to engage in an acceptable
repayment plan or fails to make contractual payments,
for a period greater than 180 days past due.
The majority of the Group’s ECL provision is made
up of trade receivables over 180 days. There is no
impairment consideration for overdue amounts that
are secured with highly liquid collateral. Security held
on trade receivables does not have a significant impact
on the risk of trade receivables.
Financial assets, including loans to joint ventures, are
considered to be impaired when there is reasonable
and supportable evidence that one or more events
that have a detrimental impact on the estimated
future cash flows have occurred. This includes but is
not limited to: observable data at the reporting date
that confirms potential future impairment such as
severe financial difficulty of a counterparty; probability
that a counterparty will enter bankruptcy; a contract
breach; disappearance of an active market for a
counterparty’s products; concession being granted to
a counterparty for economic or contractual reasons
due to a financial difficulty that would not otherwise
be considered; and other financial reorganisation
of a counterparty’s business. At the reporting date,
any significant change in credit risk arising from
these factors results in an adjustment of default
probabilities. Where the Group has no reasonable
expectation of recovering the debt, for example
where all legal avenues for collection of amounts due
have been exhausted, the debt (or relevant portion) is
written off.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. SUMMARY OF MATERIAL
ACCOUNTING POLICIES CONTINUED
2.17 Share capital
Ordinary and deferred shares are classified as equity.
2.18 Non-controlling interest
Non-controlling interests in the Group’s equity are
stated at the non-controlling interest’s proportionate
share of the net assets and liabilities of the
companies concerned.
2.19 Dividend distribution
Dividend distribution to the Company’s shareholders
is recognised as a liability in the Group’s financial
statements in the period in which the dividends
are approved by the Company’s shareholders.
The Company recognises the interim dividend in the
period in which it is paid.
2.20 Share-based payments
The Group issues cash-settled share-based
payments to employees through share option plans.
Prior to delisting, the Group also issued equity-settled
share-based payments via shares and share option plans.
Equity-settled share-based payments
Equity-settled share-based payments arising from the
Long-Term Incentive Plan (LTIP) and the Restricted
Share Award Plan are measured at fair value
(excluding the effect of non-market vesting conditions)
at grant date. The fair value determined at grant date
is recognised over the vesting period, based on the
Group’s estimate of the shares that will eventually
vest and adjusted for the effect of non-market vesting
conditions. A corresponding increase in other reserves
is also recognised in equity.
Cash-settled share-based payments
Cash-settled share-based payments arising from the
Vivo Energy Management Equity Plan are recognised
as an expense over the vesting period, measured by
reference to the fair value of the corresponding liability
which is recognised in the consolidated statements of
financial position. The liability is measured at fair value
at each reporting date until settlement, with changes
in fair value recognised in the consolidated statement
of comprehensive income.
2.21 Leases
Leases are included in right-of-use (ROU) assets and
lease liabilities on the Group’s consolidated statement
of financial position.
ROU assets and lease liabilities are recognised based
on the present value of the future minimum lease
payments over the lease term at commencement
date. As most of the leases do not provide an implicit
rate, the Group uses the incremental borrowing rate
based on the information available at commencement
date in determining the present value of future
payments. The ROU assets also include any lease
payments made at or before the commencement
date, any initial direct costs incurred and less any lease
incentives. The ROU assets acquired under IFRS 16
‘Leases’ are depreciated on a straight-line basis over
the asset’s useful life, or over the shorter of the asset’s
useful life and the lease term if there is no reasonable
certainty that the Group will obtain ownership at the
end of the lease term.
The measurement of the lease liability may include
options to extend or terminate the lease when it is
reasonably certain that the option will be exercised.
After the initial measurement at commencement,
the carrying amount of the lease liability is increased
by interest on the lease liability, reduced by lease
payments made and re-measured to reflect any
reassessment or lease modifications. Interest on
the lease liability is computed based on the initial
discount rate used to compute the lease liability at
commencement (or if applicable a revised discount
rate used in a modification or re-measurement) to
produce a constant period rate of interest on the
remaining balance of the lease liability.
Lease agreements including a lease and non-lease
component are generally accounted for separately.
For certain instances where it is impractical to
separate the lease from the non-lease component,
the Group will account for them as a single lease
component. Additionally, the Group applies a portfolio
approach to effectively account for the ROU assets
and liabilities.
2.22 Provisions
Provisions are liabilities of uncertain timing or amounts.
Provisions are recognised when the Group has a
present, legal or constructive obligation as a result of
past events, that will result in a probable outflow of
economic resources, and a reliable estimate can be
made of the amount of the obligation.
Provisions are measured at the present value of
management’s best estimate of expenditure required
to settle the obligation using a pre-tax rate that
reflects current market assessments of the time value
of money and the risks specific to the obligation.
The increase in the provision due to passage of time is
recognised as finance expense.
Compulsory stock provision
The oil market regulator in Morocco introduced an
industry mechanism to enable oil market operators
to maintain the necessary compulsory stock volume
requirement. The compulsory stock provision
relates to amounts due to the oil market regulator in
Morocco for cash received to fund the compulsory
stock obligation (CSO). The cash received up to 1997
was based on the CSO levels and the government
regulated oil price at that time. The amount received
has been agreed with the government and is classified
as a non-current liability in ‘Other liabilities’ in the
consolidated statement of financial position.
The fuel market in Morocco has been deregulated
since 1 December 2015 and the LPG market continues
to be regulated. Due to the uncertainty on the value
at which the CSO will be settled, a provision for
the fluctuations in the purchase price of products
has been recognised. The provision relates to the
difference between the cash received up to 1997,
to purchase stocks for the CSO, and the oil price
at the end of November 2015 and the LPG price
to date. As at 31 December 2023, the Moroccan
government has not indicated a repayment date for
the compulsory stock obligation.
Legal and other provisions
Legal and other provisions include provisions for
environmental restoration, restructuring costs and
legal claims. Provisions are not recognised for future
operating losses.
Where there are a number of similar obligations,
the likelihood that an outflow will be required in
settlement is determined by considering the class of
obligations as a whole.
2.23 Post-employment obligations
The Group operates various post-employment
schemes, including both defined benefit and defined
contribution pension plans and post-employment
medical plans.
Pension obligations
A defined contribution plan is a pension plan
under which the Group pays fixed contributions
into a separate entity. The Group has no legal or
constructive obligations to pay further contributions
if the fund does not hold sufficient assets to pay all
employees the benefits relating to employee service in
the current and prior periods. A defined benefit plan
is a pension plan that is not a defined contribution plan.
For defined contribution plans, the Group pays
contributions to publicly or privately administered
pension insurance plans on a mandatory, contractual
or voluntary basis. The Group has no further payment
obligations once the contributions have been paid.
The contributions are recognised as employee benefit
expenses when they are due. Prepaid contributions
are recognised as an asset to the extent that a
cash refund or a reduction in the future payments
is available.
Typically defined benefit plans define an amount of
pension benefit that an employee will receive on
retirement, usually dependent on one or more factors
such as age, years of service and compensation.
The liability recognised in the consolidated statements
of financial position in respect of defined benefit
pension plans is the present value of the defined
benefit obligation at the end of the reporting period
less the fair value of plan assets. The defined benefit
obligation is calculated annually by independent
actuaries using the projected unit credit method.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
2. SUMMARY OF MATERIAL
ACCOUNTING POLICIES CONTINUED
The schemes are exposed to a number of risks,
including:
2.23 Post-employment obligations
(continued)
Full actuarial valuation was performed for all the
defined benefit plans. The present value of the
defined benefit obligation is determined by discounting
the estimated future cash outflows using interest rates
of high-quality corporate bonds that are denominated
in the currency in which the benefits will be paid, and
that have terms to maturity approximating to the
terms of the related pension obligation. In countries
where there is no deep market in such bonds, the
market rates on government bonds are used.
– Investment risk: movement of discount rate used
(high-quality corporate bonds) against the return
from plan assets. If plan assets underperform
against the yield then this will create a deficit;
– Interest rate risk: decreases/increases in the
discount rate used (high-quality corporate
bonds) will increase/decrease the defined
benefit obligation;
– Longevity risk: changes in the estimation of mortality
rates of current and former employees; and
– Salary risk: increases in future salaries increase
the gross defined benefit obligation.
Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are
charged or credited to equity in other comprehensive
income in the period in which they arise.
The Group acknowledges that the recognition of a
pension scheme surplus depends on the interpretation
of the wording of the pension scheme rules and the
relevant accounting standard.
Current and past service costs are recognised
immediately in profit or loss. Net finance expense/
income will be calculated as the product of the
net defined liability/asset and the discount rate
as determined at the beginning of the year and is
included in net finance expense in the statement of
comprehensive income.
Defined benefit scheme characteristics and funding
The Group operates multiple post-employment
defined benefit schemes for its employees in half of
its operating countries. The multiple pension schemes
provide the employees with a pension or lump sum
retirement benefit where the exact pension payments
on retirement differ per scheme. For some operating
companies (mainly Ghana and Namibia) there is an
additional post-employment health scheme.
The Group’s funded plans relate to the pension
schemes in Mauritius and Gabon. The funded plans
are legally separate from the Group and administered
by a separate fund and comply with local regulatory
and legal requirements.
The Group has adopted the provisions of IFRIC 14
when assessing a pension scheme in surplus.
A restriction has been applied to the balance sheet,
and the net surplus recognised on the balance sheet
has been restricted to nil.
Other post-employment obligations
Some Group companies provide post-retirement
healthcare benefits to their retirees. The entitlement
to these benefits is usually conditional on the
employee remaining in service up to retirement age
and the completion of a minimum service period.
The expected costs of these benefits are accrued
over the period of employment using the same
accounting methodology as used for defined benefit
pension plans. Actuarial gains and losses arising from
experience adjustments and changes in actuarial
assumptions are charged or credited to equity in
other comprehensive income in the period in which
they arise. These obligations are valued annually by
independent qualified actuaries.
Termination benefits
Termination benefits are payable when employment
is terminated by the Group before the normal
retirement date, or whenever an employee accepts
voluntary redundancy in exchange for these benefits.
The Group recognises termination benefits at the
earlier of the following dates (a) when the Group can
no longer withdraw the offer of those benefits; and (b)
when the entity recognises costs for a restructuring
that is within the scope of IAS 37 ‘Provisions’ and
involves the payment of termination benefits.
In the case of an offer made to encourage voluntary
redundancy, the termination benefits are measured
based on the number of employees expected
to accept the offer. Benefits falling due more
than 12 months after the end of the reporting period
are discounted to their present value.
2.24 Current and deferred income tax
The income tax expense for the period comprises
current and deferred tax. Income tax is recognised
in the consolidated statement of comprehensive
income, except to the extent that it relates to items
recognised in other comprehensive income or
directly in equity. In this case, the income tax is also
recognised in other comprehensive income
or directly in equity, respectively.
The current income tax charge is calculated on the
basis of the tax laws enacted or substantively enacted
at the reporting date in the countries where the
Company and its subsidiaries operate and generate
taxable income. The Group periodically evaluates
positions taken or intended to be taken in tax returns
with respect to situations in which the applicable tax
regulation is subject to interpretation. It accounts for
uncertain tax positions where appropriate on the basis
of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised, using the liability
method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements.
However, deferred tax liabilities are not recognised
if they arise from the initial recognition of goodwill.
Deferred income tax is not accounted for if it arises
from initial recognition of an asset or liability in a
transaction other than a business combination that at
the time of the transaction affects neither accounting
nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been
enacted or substantively enacted by the reporting
date and are expected to apply when the related
deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets are recognised only to the
extent that it is probable that future taxable profit will
be available against which the temporary differences,
unused tax losses and unused tax credits can be
utilised. The criteria considered when recognising
deferred income tax assets includes:
– The existence of taxable temporary differences
that relate to the same taxation authority and
same taxable entity; and
– The expected future taxable profits and tax
planning opportunities. In case of a history of
recent losses, it has been considered whether
other convincing evidence is available to
support the recognition of the deferred income
tax assets.
Deferred income tax is provided on temporary
differences arising on investments in subsidiaries and
associates, except for deferred income tax liability
where the timing of the reversal of the temporary
difference is controlled by the Group and it is probable
that the temporary difference will not reverse in the
foreseeable future.
Deferred income tax assets and liabilities are offset
when there is a legally enforceable right to offset
current tax assets against current tax liabilities and
when the deferred income tax assets and liabilities
relate to income taxes levied by the same taxation
authority on either the same taxable entity or
different taxable entities where there is an intention
to settle the balances on a net basis.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
3. FINANCIAL RISK MANAGEMENT
3.1 Financial risk factors
The Group’s activities expose it to a variety of financial
risks: market risk (including foreign exchange risk, price
risk, cash flow interest rate risk and fair value interest
rate risk), credit risk and liquidity risk. The Group’s
overall risk management programme focuses on the
unpredictability of financial markets and seeks to
minimise potential adverse effects on the Group’s
financial performance.
Market risk
Foreign exchange risk
The Group operates internationally and is exposed
to foreign exchange risk arising from various currency
exposures, primarily with respect to the US dollar.
Foreign exchange risk arises from future commercial
transactions and recognised assets and liabilities.
Management has set up a policy to require Group
companies to manage their foreign exchange risk.
Group Treasury is required to approve all hedging
plans before execution. The Group has a number of
natural hedges in place, where the timing of foreign
currency payments is matched with the receipts
in a similar currency. Forward contracts are used
to manage the foreign exchange risk arising from
future obligations.
Foreign currency exposure on the consolidated
net monetary position is $454m (2022: $345m).
Other monetary balances in other currencies are
not material. If the non-US dollar held currency had
weakened/strengthened by 10% against the US dollar
with all other variables held constant, pre-tax profit
for the year would have been $45m (2022: $35m)
higher/lower, mainly as a result of foreign exchange
gains/losses on translation of non-US dollar
denominated receivables and payables.
Price risk
The Group generally seeks to manage its exposure
to commodity price risk through careful inventory
management and as at 31 December 2023, the
Group was not significantly exposed to commodity
price risk. In regulated markets, the Group has no
price exposure as long as the sale of the inventory is
matching the timing of the price structure updates,
however, in unregulated markets, such as Marine and
Aviation, the Group may be exposed to price changes
in the short term if inventory is not carefully managed.
In Botswana, Côte d’Ivoire, Gabon, Guinea, Kenya,
Madagascar, Morocco (for butane only), Mozambique
and Senegal, the Group is financially compensated
by the local government for the effect of these price
restrictions. For some countries the transport costs
are subsidised. For further information see note 16.
The Group does not hold equity securities for trading
and is, therefore, not exposed to equity price risk.
Cash flow interest rate risk and fair value interest
rate risk
The Group’s interest rate risk arises from borrowings.
It is Group policy to have short-term loan facilities
at floating rate and medium- to long-term facilities
at floating or fixed rate. Additionally, the Group has
short-term overdraft facilities which carry a fixed
interest rate exposing the Group to fair value interest
rate risk. However, given that the rate is fixed for a
short period of time, and that these facilities’ terms
are subject to renegotiation, should the interest rate
move, the exposure is minimal. Long-term borrowings
mainly consist of notes at a fixed interest rate which
exposes the Group to fair value interest rate risk, and
a Term loan at a floating interest rate which exposes
the Group to cash flow interest rate risk (refer to
note 22).
Credit risk
Credit risk is managed on a Group basis, except for
credit risk relating to accounts receivable balances.
Each local entity is responsible for managing and
analysing the credit risk for each of their new clients
before standard payment and delivery terms and
conditions are offered
Credit risk arises from cash and cash equivalents,
as well as credit exposures to wholesale and retail
customers, including outstanding receivables and
committed transactions. At reporting date, the Group
noted no significant concentrations of credit risk to
individual customers or counterparties. The maximum
exposure to credit risk at the reporting date is the
carrying value of each class of receivables.
All external customers must have their identity
checked and creditworthiness assessed and approved
prior to the signing of a binding agreement or contract.
Creditworthiness is assessed for all customers based
on commercial data, but also considers financial data
when a credit limit exceeds $30,000 for Retail and
$200,000 for Commercial. The utilisation of credit
limits is regularly monitored and checks performed
on outstanding debt at regular intervals. Where the
environment allows, security (bank guarantees) will
be taken to secure the Group’s exposure. For banks
and financial institutions, management of the operating
entity are responsible for making the short-term
placements with the banks after approval from
Group Treasury.
The investment policy is based in order of importance
on security, liquidity and yield. Management will assess
the counterparty risks of the third party based on
financial strength, quality of management, ownership
structure, regulatory environment and overall
diversification. Group Treasury is required to approve
all investment decisions to ensure they are made
in line with the Group’s credit policies. The Group
has provided secured loans to individual employees
(note 16).
In Morocco, customer receivables to the amount
of $16m (2022: $18m) were assigned to a factoring
subsidiary of a commercial bank; the assigned
amount was received in cash and the corresponding
receivable was derecognised. For the late payment
risk, the Group capped the exposure to six months’
maximum of interest. This resulted in a continuous
involvement accounting treatment where a substantial
portion of the risk has been transferred. A continuous
involvement liability of $0.4m (2022: $0.3m) was
recognised. In addition, other government benefits
receivable to the amount of $83m (2022: $144m)
were assigned to a local commercial bank, the assigned
amount was received in cash and the corresponding
receivable was derecognised. For the late payment
risk, the Group capped the exposure to 6.5 months’
maximum of interest. A continuous involvement
liability of $1.5m (2022: $1.2m) was recognised.
The Group considers that the held-to-collect business
model remains appropriate for these receivables and
hence continues measuring them at amortised cost.
The Group has arrived at this conclusion because
the factoring of the Group’s B2B receivables before
maturing is done on an infrequent basis.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
7 2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
3. FINANCIAL RISK MANAGEMENT CONTINUED
3.1 Financial risk factors (continued)
The Group’s cash and cash equivalent balances are primarily held at banks with strong credit ratings where the
exposure to credit risk is considered to be limited. The extent to which the Group’s cash and cash equivalent
balances are held at banks where there is considered to be an exposure to credit risk is set out below:
Banks
Bank 1
Bank 2
Bank 3
31 December 2023
31 December 2022
Credit rating
US$ million
Credit rating
US$ million
B
A+
A+
53
40
40
Ba1
A+
B
33
28
28
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an
adequate amount of committed credit facilities. Due to the cyclical nature of the underlying businesses, the
Directors aim to maintain flexibility in funding by keeping committed and uncommitted credit lines available.
Management monitors rolling forecasts of the Group’s liquidity reserve on the basis of expected cash flow.
This is generally carried out at local level in the operating companies of the Group in accordance with practice
and limits set by Group policies. Where short-term liquidity is needed, the operating entities organise short-term
facilities to cover the deficit which have to be authorised by Group Treasury.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining
period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows.
US$ million
Borrowings
Trade payables
Lease liabilities
Other financial liabilities
Other liabilities1
Total
31 December 2023
Less than
3 months
Between
3 months
and 1 year
Between 1
and 2 years
Between 2
and 5 years
Over
5 years
586
1,768
12
16
51
2,433
21
156
18
–
31
226
584
–
37
–
9
630
388
–
48
–
2
438
–
–
150
–
157
307
Total
1,579
1,924
265
16
250
4,034
1 Other liabilities (note 25) exclude the elements that do not qualify as financial instruments.
US$ million
Borrowings
Trade payables
Lease liabilities
Other financial liabilities
Other liabilities1
Total
31 December 2022
Less than
3 months
Between
3 months
and 1 year
Between 1
and 2 years
Between 2
and 5 years
Over
5 years
527
1,603
7
10
31
2,178
111
84
33
1
27
256
635
–
37
–
18
690
407
–
76
–
2
485
–
–
122
–
146
268
Total
1,680
1,687
275
11
224
3,877
1 Other liabilities (note 25) exclude the elements that do not qualify as financial instruments.
Net investment hedge
On 24 September 2020, the Group issued $350m notes (refer to note 22). The Group entered into a three-year
fixed-fixed cross-currency swap to exchange $150m US dollar denominated bonds to Euro (EUR). This swap
matured in September 2023 and was replaced by a new fixed-fixed cross-currency swap. The new fixed-fixed
cross-currency swap has a maturity of four years and is designated as the hedging instrument of the net
investment hedge described below.
Foreign currency exposure arises from the Group’s net investment in its several subsidiaries that have the Cape
Verde Escudo (CVE) and the CFA Franc BCEAO (XOF) as functional currencies that are 100% pegged to the
EUR. Therefore, the risk arises from fluctuation in spot exchange rates between these currencies (or the EUR)
and the US dollar, which causes the amount of the net investment to vary.
The hedged risk in the net investment hedge is the risk of a variation in the CVE and the XOF currencies (or the
EUR) against the US dollar which will result in a variation in the carrying amount of the Group’s net investment
in these foreign operations. The Group has hedged its net investment in subsidiaries with EUR pegged
functional currencies.
To assess hedge effectiveness, the Group determines the economic relationship between the hedging instrument
and the hedged item by comparing changes in the carrying amount of the hedging instrument that is attributable
to a change in the spot rate with changes in the investment in the foreign operation due to movements in the
spot rate (the dollar offset method).
An economic relationship between the hedged item and hedging instrument exists given that their fair values
move in the opposite direction of the same risk, which is the hedged risk. The impact of currency basis spreads
and forward elements are excluded from the assessment of hedge effectiveness and are recognised in OCI
as cost of hedging reserve. Hedge ineffectiveness would arise to the extent that the net assets of the foreign
operations fell below the designated amount of the hedging instrument and due to any inefficiency in the
currency markets.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
3. FINANCIAL RISK MANAGEMENT CONTINUED
3.1 Financial risk factors (continued)
The amounts related to items designated as hedging instruments in the statement of financial position and the statement of comprehensive income were as follows:
US$ million
Cross-currency swap
Cross-currency swap
US$ million
Cross-currency swap
Cross-currency swap
Carrying amount
Nominal amount
150
Assets
–
31 December 2023
Line item in the
statement of financial
position where the hedging
instrument is included
Liabilities
7
Other financial liabilities
Change in value
used for calculating
hedge
Change in value
of hedging instrument
recognised in OCI
Hedge ineffectiveness
recognised in
profit or loss
Line item in profit
or loss that includes
hedge ineffectiveness
6
(8)
–
Not applicable
Nominal amount
150
Carrying amount
Assets
14
31 December 2022
Line item in the
statement of financial
position where the hedging
instrument is included
Liabilities
–
Other financial assets
Change in value
used for calculating
hedge
Change in value
of hedging instrument
recognised in OCI
Hedge ineffectiveness
recognised in
profit or loss
Line item in profit
or loss that includes
hedge ineffectiveness
9
8
–
Not applicable
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
3. FINANCIAL RISK MANAGEMENT CONTINUED
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
3.2 Capital management
The Group’s capital management objective is to maintain a commercially sound consolidated statements of
financial position with the aim of maximising the net cash return to the shareholders, while maintaining a
level of capitalisation that is commercially defensible and which leads to an effective and optimised working
capital structure.
Liquidity and capital resources are monitored through a review of the Group’s net debt position, debt cover and
available short-term capital resources. Net debt is calculated as total borrowings and lease liabilities (including
current and non-current borrowings and lease liabilities as shown in the consolidated statements of financial
position) less cash and cash equivalents. The debt cover is calculated as net debt, excluding Subordinated
shareholder debt and lease liabilities, divided by adjusted EBITDA. For details related to key covenants refer to
note 22.
US$ million
Long-term and Subordinated shareholder debt1 (note 22)
Lease liabilities (note 26)
Total debt excluding short-term bank borrowings
Short-term bank borrowings (note 22)
Less: cash and cash equivalents (note 19)
Net debt
US$ million
Adjusted net debt (excl. lease liabilities and Subordinated shareholder debt1)
Adjusted EBITDA2 (note 6) (excl. IFRS 16 impact)
Debt cover1
1 Proceeds from the Subordinated shareholder debt relate to 2023. (2022: Includes the RCF.)
2 For the description and reconciliation of non-GAAP measures refer to pages 21 and 22.
US$ million
Cash and cash equivalents
Available undrawn credit facilities1
Available short-term capital resources
31 December
2023
31 December
2022
907
199
1,106
569
(544)
1,131
1,016
183
1,199
513
(500)
1,212
31 December
2023
31 December
2022
769
319
2.41x
1,029
423
2.43x
31 December
2023
31 December
2022
544
1,834
2,378
500
1,614
2,114
1 Of which $1,534m (2022: $1,407m) are uncommitted facilities.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions
in order to ensure sound capital management.
4.1 Accounting judgements
Government-related assets and liabilities
In respect to other government benefits receivable, the Group undertakes regular reconciliation and
confirmation processes with relevant government agencies to agree the level of receivables. In the event
confirmation is not received or reconciliation processes not completed at year-end, the Group exercises
judgement in recognising the amount of receivables. In forming the judgement, management takes account of a
number of factors including the terms of local industry regulations, the track record of receivables being agreed
and settled, verbal assurances received from government officials and, where relevant, external legal advice.
Judgement is also applied by management in determining the recovery period of other government benefits
receivable which extend past 12 months and, therefore, the classification on the statement of financial position
between current and non-current assets. Refer to note 16 for further details relating to the other government
benefits receivable.
4.2 Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the
reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of the
assets and liabilities within the next financial year, are as follows:
Government-related assets and liabilities
The Group has various assets from and liabilities to governments and authorities with respect to government
benefits receivable as well as for taxes and duties. The Group constantly assesses underlying inherent risks and
assumptions and as a consequence related accounting estimates are determined and adjustments are made
to the carrying amounts of those assets and liabilities, where necessary. A provision of $30m (2022: $11m)
was recognised in relation to other government benefits receivable. The provision reflects both the impact
of the recovery period where there is uncertainty on the timing of the settlement of the receivable and the
quantification of the Group’s recoverability risk assessment. The recoverability assessment takes into account
the stability of the macroeconomic and political environment, credit risks including relevant policy changes and
governments’ track records in settling debts as well as the ageing of the outstanding amounts and government
confirmations on outstanding balances. A sensitivity analysis was performed by management, in relation to the
provision, by applying varying discount rates and recovery periods. This analysis indicates a $10m increase or
decrease, respectively, of the provision if the expected recovery occurs one year later or earlier. Refer to note
16 for further details relating to the other government benefits receivable.
Tax positions
The Group operates across many tax jurisdictions and the interpretation and application of tax law can be
complex and requires judgement to assess the risk and estimate the potential outcomes. These outcomes can
vary significantly from what has been provided. The Group recognises many individually immaterial provisions
with a cumulative amount totalling $16m related to income tax and $32m related to indirect and other tax
matters recorded in other assets, other liabilities and provisions. These are recorded for the amount that is
expected to be settled where this can be reasonably estimated. This reflects management’s assessment of the
expected value of such risks based on a multiple scenario outcome and likelihood. Factors considered include:
the status of recent current tax audits and enquiries; the results of previous claims; the transfer pricing policies of
the Group; and any changes to the relevant tax environments. Management consider no meaningful sensitivities
can be calculated in relation to these provisions. The timing of the resolution of the risks is uncertain and may
take many years, however, it is expected to be within the next five years.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
5. SEGMENT REPORTING
The Group operates under three reportable segments: Retail, Commercial and Lubricants.
Retail segment – Retail fuel is aggregated with Non-fuel revenue. Both operating streams derive revenue from
Retail customers who visit our Retail sites. Retail fuel and Non-fuel revenues are aggregated as the segments
are managed as one unit and have similar customers. The economic indicators that have been addressed in
determining that the aggregated segments have similar economic characteristics are that they have similar
expected future financial performance and similar operating and competitive risks.
Commercial segment – Commercial fuel, LPG, Aviation and Marine are aggregated in the Commercial segment
as the operating segments derive revenues from Commercial customers. The segments have similar economic
characteristics. The economic indicators that have been addressed are the long-term growth and average long-
term gross margin percentage.
Lubricants segment – Retail, B2C, B2B and Export Lubricants are the remaining operating segments. Since these
operating segments meet the majority of aggregation criteria, they are aggregated in the Lubricants segment.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-makers. The Directors monitor the operating results of operating units separately for the
purpose of making decisions about resource allocation, segment performance assessment and interacting with
segment managers.
The following tables present revenues and profit information regarding the Group’s operating segments:
US$ million
2023
2022
Share of profit of joint ventures and associates included in
segment EBITDA
Lubricants
Retail
Commercial
Total
12
7
7
26
11
11
5
27
The amount of revenues from external customers by location of the customers is shown in the table below.
US$ million
Revenue from external customers by material country
Morocco
Kenya
Senegal
Other
Total
2023
2022
1,809
1,557
995
6,649
11,010
1,837
1,790
881
6,461
10,969
31 December
2023
31 December
2022
324
293
230
1,201
2,048
137
250
230
1,148
1,765
2023
US$ million
US$ million
Retail
Commercial
Lubricants
Consolidated
Revenue from external customers
Gross profit
Add back: depreciation and amortisation
Gross cash profit
Adjusted EBITDA1
1 Refer to note 6 for the reconciliation to EBIT.
6,907
392
56
448
197
3,603
188
29
217
111
500
82
5
87
63
11,010
662
90
752
371
2022
US$ million
Retail
Commercial
Lubricants
Consolidated
Revenue from external customers
Gross profit
Add back: depreciation and amortisation
Gross cash profit
Adjusted EBITDA1
1 Refer to note 6 for the reconciliation to EBIT.
7,057
435
54
489
249
3,434
210
27
237
151
478
87
4
91
70
10,969
732
85
817
470
Non-current assets by material country (excluding deferred tax)
Kenya
Morocco
The Netherlands
Other
Total
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
76
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
6. RECONCILIATION OF NON-GAAP MEASURES
Non-GAAP measures are not defined by International Financial Reporting Standards (IFRS) and, therefore,
may not be directly comparable with other companies’ non-GAAP measures, including those in the Group’s
industry. Non-GAAP measures should be considered in addition to, and are not intended to be a substitute for,
or superior to, IFRS measurements. The exclusion of certain items (special items) from non-GAAP performance
measures does not imply that these items are necessarily non-recurring. From time to time, we may exclude
additional items if we believe doing so would result in a more transparent and comparable disclosure.
The Directors believe that reporting non-GAAP financial measures in addition to IFRS measures, as well as the
exclusion of special items, provides users with enhanced understanding of results and related trends and increases the
transparency and clarity of the core results of operations. Non-GAAP measures are used by the Directors and management
for performance analysis, planning, reporting and are used in determining senior management remuneration.
US$ million
EBT
Finance expense – net
EBIT
Depreciation, amortisation and impairment
EBITDA
Adjustments to EBITDA related to special items:
Settlement1
Vitol Offer related expenses and other acquisitions2
Management Equity Plan3
Restructuring4
Community relief contribution5
Hyperinflation6
Impairment of other government benefits receivable7
Adjusted EBITDA
US$ million
Net (loss)/income
Adjustments to net income related to special items:
Settlement1
Vitol Offer related expenses and other acquisitions2
Management Equity Plan3
Restructuring4
Community relief contribution5
Hyperinflation6
Impairment of other government benefits receivable7
Tax on special items
Adjusted net income
2023
31
131
162
141
303
40
1 12
10
5555553 5
1
–
–
371
2023
(35)
40
1712
10
5
1
(7)
–
–
26
2022
208
87
295
132
427
–
35
–
–
–
1
7
470
2022
105
–
43
–
–
–
1
7
(2)
154
1 The expense related to a government settlement is treated as a special item, as it does not form part of the core operational business
activities and performance for the period. Refer to note 28 of the consolidated financial statements for further information.
2 These expenses are related to the Vitol Offer transaction and other acquisitions and are treated as special items as they do not form
part of the core operational business activities and performance for the period. Included in 2022 are expenses related to financing the
Bridge loan.
3 During 2023, the Group introduced a cash-settled Management Equity Plan (‘MEP’) under which Vivo Energy Limited granted phantom options
to Executive Directors. The Binomial Option Pricing Model is used to calculate the fair value of the options and the amount to be expensed.
This expense is now treated as a special item as it is no longer considered to form part of the core operational business activities and performance
for the period.
4 Restructuring costs were incurred mainly as a result of organisational alignment. The impact from these activities do not form part of the core
operational business activities and performance for the period and are, therefore, treated as a special item.
5 The expense related to donations made to assist and provide relief to communities affected by the earthquake in Morocco and is treated as a
special item as they do not form part of the core operational business activities and performance for the period.
6 The impacts of accounting for hyperinflation for Vivo Energy Zimbabwe and Ghana, in accordance with IAS 29, are treated as special items since
they are not considered to represent the underlying operational performance of the Group and based on their significance in size and unusual
nature are excluded as the local currency depreciation against the US dollar does not align to the published inflation rates during the period.
7 The Group has recognised an impairment of other government benefits receivable as a result of a retrospective price structure change by
certain governments to finance their outstanding debt. Such retrospective changes of existing price structures are not representative of the core
operational business activities and performance for the period and are, therefore, treated as special items.
7. GENERAL AND ADMINISTRATIVE COST
Employee benefits
US$ million
Wages, salaries and other employee benefits
Restructuring, severance and other involuntary termination costs
Retirement benefits
Share-based payment expense
2023
179
8
10
10
207
2022
179
4
10
3
196
Included in the employee benefit expense for the year ended 31 December 2023 was social security expense
of $1m (2022: $1m) and other pension costs relating to employees employed in the UK. Refer to note 3 in the
Company financial statements.
Employee benefits have been charged in:
US$ million
General and administrative cost
Selling and marketing cost
Cost of sales
The monthly average number of full-time equivalent employees was as follows:
Sales and distribution
Administration and support
2023
118
52
37
207
2023
1,988
830
2,818
2022
110
49
37
196
2022
1,951
827
2,778
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
7 7
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
Depreciation and amortisation
Depreciation of property, plant and equipment, right-of-use assets and amortisation of intangible assets have
been charged in:
9. INCOME TAXES
Current income taxes
Analysis of income tax expense:
US$ million
Cost of sales
Selling and marketing cost
General and administrative cost
Audit fees
US$’000
Parent company and consolidated financial statements
Subsidiaries
Audit fees
Audit-related fees1
Other assurance services2
Other fees total
Total fees
1 Audit-related fees relate to interim financial statements reviews.
2023
90
36
15
141
2023
1,320
1,528
2,848
–
75
75
2,923
2022
85
33
14
132
2022
1,101
1,537
2,638
424
332
756
3,394
2 Other assurance services relate mainly to comfort letter procedures in respect to note issuance and volume certificates to support brand
royalty expenses.
8. FINANCE INCOME AND EXPENSE
US$ million
Finance expense
Interest on bank and other borrowings and on lease liabilities1
Interest on long-term debt including amortisation of set-up fees
Accretion expense net defined benefit liability
Foreign exchange loss
Other
Finance income
Interest from cash and cash equivalents
Net impact of IAS 292
Interest from government bonds
Finance expense – net
2023
2022
(82)
(67)
(2)
(4)
(1)
(156)
11
8
6
25
(131)
(56)
(28)
(2)
(8)
(4)
(98)
11
–
–
11
(87)
1
Includes an amount of $18m (2022: $17m) finance expense for leases in respect to IFRS 16 ‘Leases’.
2 Represents the net non-monetary gain from the application of IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. Refer to note 2.6.
US$ million
Current tax
Current income tax
Current income tax prior years
Deferred tax
Deferred income tax
Deferred income tax prior years
Income tax expense
2023
2022
(87)
(1)
(88)
21
1
22
(66)
(104)
(2)
(106)
1
2
3
(103)
The reconciliation of income taxes, computed at the statutory tax rate, to income tax expense was as follows:
US$ million
EBT
Statutory tax rate1
Income tax expense at statutory tax rate
Increase/(decrease) resulting from:
Impact of tax rates in foreign jurisdictions
Income not subject to tax
Expenses not tax deductible
Non-recognition of tax benefits in relation to current period tax losses or
temporary differences
Withholding tax
Other2
Income tax expense
Effective tax rate
2023
31
25%
(8)
1
10
(26)
(24)
(13)
(6)
(66)
212%
2022
208
19%
(40)
(21)
11
(13)
(7)
(28)
(5)
(103)
49%
1 The increase of the corporation tax rate from 19% to 25% was substantively enacted for the UK companies on 24 May 2021 and is
effective from 1 April 2023.
2 Amongst others, includes movements related to uncertain tax positions.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
78
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
9. INCOME TAXES CONTINUED
Deferred income taxes
The significant components of the Company’s recognised deferred income tax assets and liabilities were
as follows:
31 December 2023
31 December 2022
Asset
Liability
Asset
Liability
US$ million
Property, plant and equipment
Intangible assets
Retirement benefits
Provisions
Withholding taxes
Tax losses carried forward1
Other
Offsetting of balances
Total
1
–
9
19
–
14
84
127
(56)
71
(37)
(14)
(2)
–
(11)
–
(70)
(134)
56
(78)
1
–
9
14
–
7
85
116
(55)
61
1 The recognised deferred tax asset relates to $8m (2022: $2m) tax losses which is supported by expected future taxable profits.
The changes in the net deferred income tax assets and liabilities were as follows:
US$ million
Balance at the beginning of year, net
In profit
In other comprehensive income
Other
Foreign exchange differences
2023
(25)
22
(1)
(2)
(1)
(7)
Unrecognised deferred tax assets relate to carry forward losses of $149m (2022: $120m) and tax credit
carry forwards of $35m (2022: $19m). Of the unrecognised carry forward losses, $6m will expire at the end
of 2024, $14m at the end of 2025, $17m at the end of 2026, $9m at the end of 2027, and $103m at the end
of 2028 or later.
The unrecognised taxable temporary differences associated with undistributed retained earnings of investments
in subsidiaries, joint ventures and associates amounts to $28m (2022: $27m).
(38)
(15)
(1)
–
(21)
–
(66)
(141)
55
(86)
2022
(29)
3
–
(4)
5
(25)
OECD Pillar Two Taxation
The Group is within the scope of the Organisation for Economic Co-operation and Development (OECD)
Global Anti-Base Erosion (GloBE) model rules, also referred to as Pillar Two rules. Pillar Two legislation was
enacted in the United Kingdom, the jurisdiction in which Vivo Energy Limited is incorporated, and will come into
effect from 1 January 2024. Since the Pillar Two legislation was not effective at the reporting date, the Group has
no related current tax exposure. In accordance with IAS 12, the Group applies the exception to the recognition
and disclosure about deferred tax assets and liabilities related to Pillar Two income taxes.
Under the legislation, the Group is liable to pay a top-up tax for the variance between their GloBE effective
tax rate per jurisdiction and the 15% minimum rate. For the majority of jurisdictions, no top-up tax is expected
under application of the Pillar Two safe harbour rules. The safe harbour rules are not expected to apply for the
following jurisdictions, as based on a high-level assessment these have an effective tax rate lower than 15% for
Pillar Two purposes:
Constituent entities
Average Pillar Two effective tax rate for the year
Joint venture groups
Shell and Vivo Lubricants
Average Pillar Two effective tax rate for the year
31 December 2023
Mauritius
13.5%
United Arab Emirates
6.8%
The Group is in the process of assessing its exposure to the Pillar Two legislation and expects a top-up tax for
the above jurisdictions. However, due to the complexities in applying the legislation and calculating GloBE income,
the quantitative impact of the enacted legislation cannot be reasonably estimated at this stage. Nonetheless, even
for those entities with an effective tax rate above 15%, there may still be Pillar Two tax implications.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
10. BUSINESS COMBINATION
On 27 December 2023 Vivo Energy Investments B.V., a subsidiary of the Group, acquired 100% of the shares
in Ceejay Gas Limited (the Somagaz group) for a consideration of $20m. The Somagaz group is a key player in
the Liquefied Petroleum Gas (LPG) market in Mayotte and, through its subsidiaries Sigma SAS and SN Somagaz
SAS, the company handles LPG supply, storage, bottling, and distribution to customers, including retail outlets
and industrial clients. The acquisition of the Somagaz group added one new market to the Group’s operations,
bringing the total number of our markets to 24 markets across Africa and Indian Ocean. This acquisition signifies
our commitment to growth and development of our LPG business. There were no business combination
transactions in the prior year.
The total consideration of $20m was paid in cash. Acquisition-related costs of $0.3m are included in general
and administrative expenses in profit or loss and in operating cash flows in the statement of cash flows and are
treated as special items. Refer to pages 21 and 22 for more information.
In accordance with the requirements of IFRS 3 ‘Business Combinations’, the measurement period of business
acquisition is 12 months. The initial accounting for the Somagaz group business combination is incomplete, as
additional information necessary to identify and measure assets and liabilities is being received. Accordingly, the
amounts recognised in the financial statements are provisional as at 31 December 2023.
The following table summarises the preliminary values of identifiable assets acquired and liabilities assumed with
the acquisition of the Somagaz group, as at the acquisition date:
US$ million
Property, plant and equipment
Right-of-use assets
Deferred income taxes
Other assets
Inventories
Cash and cash equivalents
Lease liabilities
Trade payables
Other liabilities
Deferred tax liabilities
Net identifiable assets
Goodwill
Net assets acquired
US$ million
Opening balance 27 December 2023
Foreign exchange differences
Closing balance 31 December 2023
27 December 2023
5
9
2
1
1
6
(9)
(2)
(4)
(2)
7
13
20
Goodwill
13
–
13
Goodwill can be attributed to future synergies to be derived through the acquisition and the business
knowledge and technical skills of the acquired workforces. Future synergies are expected through increased
market penetration and expansion as well as improved profitability from operating under the Vivo Energy
business model.
Acquisition contribution to the business
During the period between the acquisition date of 27 December 2023 and the year end, 31 December 2023, no
contribution to the statement of comprehensive income was recognised. Consolidated revenue and loss for the
year ending 31 December 2023, based on preliminary values, would amount to $11,022 million and $34 million,
respectively, had the acquisition concluded on 1 January 2023.
At acquisition, property, plant and equipment to the value of $5m were recognised at fair value. Right-of-use
assets and lease liabilities to the value of $9m and $9m were determined based on the remaining lease term.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
8 0
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
11. PROPERTY, PLANT AND EQUIPMENT
US$ million
Cost at 1 January 2023
Additions
Business acquisition1
Disposals
Transfers
Foreign exchange differences2
Cost at 31 December 2023
Accumulated depreciation at 1 January 2023
Depreciation
Disposals
Foreign exchange differences1
Accumulated depreciation at 31 December 2023
Net carrying value at 31 December 2023
Includes PP&E recognised on acquisition of the Somagaz group of $5m. Refer to note 10.
1
2 Foreign exchange differences include the impact from the application of IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. Refer to note 2.6.
US$ million
Cost at 1 January 2022
Additions
Disposals
Transfers
Foreign exchange differences1
Cost at 31 December 2022
Accumulated depreciation at 1 January 2022
Depreciation
Disposals
Foreign exchange differences1
Accumulated depreciation at 31 December 2022
Net carrying value at 31 December 2022
1 Foreign exchange differences include the impact from the application of IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. Refer to note 2.6.
No assets have been pledged as security.
Land
Buildings
Machinery and
other equipment
Construction
in progress
59
1
–
–
7
(2)
65
–
–
–
–
–
65
405
13
–
(3)
30
(13)
432
(98)
(23)
2
3
(116)
316
735
34
5
(10)
87
(25)
826
(258)
(66)
9
9
(306)
520
77
170
–
–
(124)
(3)
120
–
–
–
–
–
120
Land
Buildings
Machinery and
other equipment
Construction
in progress
63
3
(3)
1
(5)
59
–
–
–
–
–
59
383
29
(4)
34
(37)
405
(86)
(24)
4
8
(98)
307
719
30
(25)
78
(67)
735
(245)
(60)
24
23
(258)
477
104
95
–
(113)
(9)
77
–
–
–
–
–
77
2023
Total
1,276
218
5
(13)
–
(43)
1,443
(356)
(89)
11
12
(422)
1,021
2022
Total
1,269
157
(32)
–
(118)
1,276
(331)
(84)
28
31
(356)
920
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
12. INTANGIBLE ASSETS
US$ million
Cost at 1 January 2023
Additions
Business acquisition1
Foreign exchange differences2
Cost at 31 December 2023
Accumulated amortisation at 1 January 2023
Amortisation
Accumulated amortisation at 31 December 2023
Net carrying value at 31 December 2023
1 Relates to goodwill recognised on acquisition of the Somagaz group. Refer to note 10.
2 Foreign exchange differences include the impact from the application of IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. Refer to note 2.6.
US$ million
Cost at 1 January 2022
Additions
Foreign exchange differences1
Cost at 31 December 2022
Accumulated amortisation at 1 January 2022
Amortisation
Accumulated amortisation at 31 December 2022
Net carrying value at 31 December 2022
1 Foreign exchange differences include the impact from the application of IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. Refer to note 2.6.
Shell licence
agreement
Goodwill
Computer
software
Other
134
–
–
–
134
(96)
(4)
(100)
34
74
–
13
(4)
83
–
–
–
83
106
14
–
–
120
(48)
(13)
(61)
59
53
1
–
–
54
(35)
(3)
(38)
16
Shell licence
agreement
Goodwill
Computer
software
Other
137
–
(3)
134
(92)
(4)
(96)
38
81
–
(7)
74
–
–
–
74
99
7
–
106
(37)
(11)
(48)
58
56
–
(3)
53
(32)
(3)
(35)
18
2023
Total
367
15
13
(4)
391
(179)
(20)
(199)
192
2022
Total
373
7
(13)
367
(161)
(18)
(179)
188
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
82
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
12. INTANGIBLE ASSETS CONTINUED
Impairment test for goodwill
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount
of the CGUs was determined based on a fair value less cost of disposal calculation which requires the use of
assumptions. The calculations use cash flow projections based on an approved business plan covering a four-year
period. Cash flows beyond the four-year period are extrapolated using the estimated long-term growth rate as
shown below. The terminal value was calculated using the Gordon Growth formula.
Goodwill is monitored at the operating segment level on a non-aggregated basis. The Group has several
non-aggregated operating segments, however, the goodwill is allocated to Retail fuel and Commercial fuel
given that substantially all activities of the acquired businesses relate to these two operating segments. Both
the goodwill acquired in the 2019 VEOHL acquisition and the goodwill acquired from previous acquisitions are
allocated and considered for impairment testing together at the non-aggregated operating segments Retail fuel
and Commercial fuel. For this purpose, a discounted cash flow analysis was used to compute the recoverable
amount using the approved plan. This results in 81% of the carrying amount of goodwill being allocated to
Retail fuel and 19% of the carrying amount being allocated to Commercial fuel.
The following table sets out the key assumptions for those CGUs that have a significant goodwill allocated
to them:
13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES
The Group also has interests in a number of associates and joint ventures that are accounted for using the equity
method. A comprehensive listing of the Group’s joint ventures and associates can be found in note 14 of the
Company financial statements.
US$ million
At 1 January
Acquisition of businesses
Share of profit
Dividend received
Foreign exchange differences
At 31 December
2023
237
1
26
(29)
–
235
2022
233
1
27
(17)
(7)
237
In December 2017, the Group acquired a 50% interest in Shell and Vivo Lubricants B.V. (SVL) that is considered
a material investment to the Group. SVL is the principal supplier of manufacturing, sales and distribution for
lubricants products in Africa. The investment is a joint venture investment and measured using the equity
method. SVL is jointly owned by Vivo Energy Investments B.V. (50%) and Shell Overseas Investments B.V. (50%).
2023
The table below provides summarised financial information for the carrying amount of the investment in SVL.
Volume compounded annual growth rate
Gross cash profit compounded annual growth rate
Post-tax discount rate
Long-term growth rate
Retail
fuel
Commercial
fuel
US$ million
4.8%
6.2%
12.9%
2.6%
2.3%
7.4%
12.9%
2.6%
At 1 January
Share of profit
Dividend received
Foreign exchange differences
At 31 December
The methodology applied to each of the key assumptions used is as follows:
Assumptions
Approach used to determine values
Volume compounded annual
growth rate
Gross cash profit compounded annual
growth rate
Post-tax discount rate
Long-term growth rate
Volume growth over the four-year forecast period, based on
past performance and management expectations of market
developments.
Based on past performance and management expectations of the
future over the four-year forecast period.
Based on specific risks relating to the industry and country. Factors
considered for the industry include regulatory environment, market
competition and barriers to entry.
Based on the weighted average IMF GDP projections for the markets
where Vivo Energy operates excluding hyper-inflationary economies.
Additional financial information related to SVL is disclosed in the table below.
US$ million
Current assets1
Non-current assets
Total assets
Current liabilities2
Non-current liabilities
Total liabilities
Revenues
Depreciation and amortisation
Net finance expense
Income tax
The Group considers the post-tax discount rate to be the most sensitive assumption. With all other assumptions
in the table above remaining unchanged, Goodwill in relation to the Retail fuel and Commercial fuel CGUs
would only result in an indication of impairment if the post-tax discount rates increased to 16.5% and 21.8%,
respectively. There are no reasonable changes that could occur to the key assumptions that would reduce the
recoverable amount below the carrying amount.
Profit after tax
Other comprehensive loss, net of tax
1 Includes cash and cash equivalents of $34m (2022: $20m).
2 Includes borrowings of $49m (2022: $65m).
2023
155
12
(19)
(2)
146
2023
168
51
219
100
8
108
372
(9)
(5)
(7)
26
(4)
2022
156
11
(8)
(4)
155
2022
217
61
278
143
8
151
367
(9)
(2)
(10)
21
(9)
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
13. INVESTMENTS IN JOINT VENTURES AND ASSOCIATES CONTINUED
The carrying value of SVL includes a notional goodwill of $96m calculated as the difference between the cost
of the investment and the investor’s share of the fair values of the investee’s identifiable assets and liabilities
acquired. Since the notional goodwill is not shown as a separate asset, and there is no objective evidence
of impairment, it is not required to be separately tested for impairment, nor does it trigger an annual
impairment test.
15. OTHER FINANCIAL ASSETS AND LIABILITIES
Other financial assets and liabilities are derivative instruments comprising forward foreign exchange contracts
and cross-currency swaps. The fair values as at 31 December 2023 amounted to Nil (other financial assets)
(2022: $14m) and $16m (other financial liabilities) (2022: $11m) respectively. In 2022, other financial liabilities
include foreign exchange swaps in Vivo Energy Kenya Ltd (refer to note 3.1). The instruments are categorised as
level 2 of the fair value hierarchy. There have been no transfers between any levels during the year.
There are no contingent liabilities relating to the Group’s investments in joint ventures and associates.
14. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE
INCOME
The Group has classified equity investments as financial instruments at FVTOCI (without recycling).
These investments are measured using inputs for the asset or liability that are in absence of observable market
data, based on net asset value of the related investments (level 3 in the IFRS 13 ‘Fair Value Measurement’
hierarchy) which management considers to best represent the fair value of the associated investment given its
nature. The fair value of the financial asset approximates the carrying amount.
The value is based on the net asset value of the related investments and therefore no sensitivity analysis
is presented.
US$ million
At 1 January
Fair value adjustment
Foreign exchange differences
At 31 December
2023
2022
13
1
1
15
12
1
–
13
Financial assets at fair value through other comprehensive income relate to the Group’s investment in
Société de Gestion des Stocks Pétroliers de Côte d’Ivoire S.A. (GESTOCI) in which it holds an interest of
circa 17%. The Group does not have significant influence or joint control in the investee. The investment is
not held for trading and not a contingent consideration recognised by an acquirer in a business combination,
therefore, at initial recognition the Group has elected to account for the investment at fair value through other
comprehensive income.
Financial assets at fair value through other comprehensive income are categorised as level 3 of the fair value
hierarchy and are the only level 3 financial assets within the Group. There were no changes made during the
year to valuation methods or the processes to determine classification and no transfers were made between the
levels in the fair value hierarchy.
The specific valuation techniques used to value financial instruments that are carried at fair value using level 2
techniques are:
– The fair value of cross-currency swaps is calculated as the present value of the estimated future cash
flows based on current market data provided by third party banks; and
– The fair value of forward foreign exchange contracts is calculated by comparison with current forward
prices of contracts for comparable remaining terms.
16. OTHER ASSETS
US$ million
Other government benefits receivable
Prepayments
Government bonds
VAT and duties receivable
Amounts due from dealers and joint ventures1
Deposits1
Employee loans1
Indemnification asset on legal and tax claims1
Other1,2
Current
Non-current
31 December
2023
31 December
2022
267
126
83
82
45
15
6
3
23
650
316
334
650
402
122
–
90
56
17
7
5
27
726
554
172
726
1 Financial assets are measured at amortised cost and the fair value approximates the carrying amount.
2 The amount mainly comprises other non-current receivables.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
8 4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
16. OTHER ASSETS CONTINUED
Other government benefits receivable
18. TRADE RECEIVABLES
Trade receivables are measured at amortised cost and were as follows, as at:
31 December
2023
31 December
2022
US$ million
Trade receivables
Less: loss allowance of trade receivables
Trade receivables – net
31 December
2023
31 December
2022
873
(74)
799
654
(56)
598
US$ million
Kenya
Senegal
Morocco
Gabon
Guinea
Mozambique
Madagascar
Botswana
Other
Credit rating
B
B+
BB+
B-
None available
CCC+
B-
A3
120
87
19
18
10
6
2
–
5
267
167
101
21
20
10
14
52
10
7
402
The Group is exposed to credit risk in relation to other government benefits receivables. Management
continuously assesses the recoverability of the receivables and engages with governments on the related
recoverability methods. In the event a significant risk of default is identified, management shall proceed to
quantify this risk through a discounting model. An extended period of recovery is not in itself representative
of default and if all other factors, including the historical track record of recoveries, indicate that full recovery
is probable then no provision is recorded. Based on management’s review on the recoverability of these
receivables it believes the credit risk in relation to these balances is relatively low, except for those balances for
which a provision has been recognised. Other government benefits receivable are partially provided for and
presented net of provisions for impairment of $30m (2022: $11m). Refer to note 4 for further details. A total of
$416m (2022: $892m) of other government benefits were recognised in cost of sales for compensation of costs
incurred during the year.
17. INVENTORIES
US$ million
Fuel
Lubricants
Other
US$ million
Cash
Cash equivalents:
31 December
2023
31 December
2022
Short-term placements
475
114
13
602
555
121
11
687
Cost of sales as disclosed on the face of the consolidated statements of comprehensive income include the total
expense for inventory during the year for $9,943m (2022: $9,855m). The carrying value of inventory represents
the lower of cost or net realisable value. Provisions for write-downs of inventories to the net realisable value
amounted to $10m as per 31 December 2023 (2022: $7m). Other inventory consists mainly of energy saving
certificates, fittings for LPG and lubricants and spare parts.
The fair values of trade receivables approximate their carrying value as they are deemed short term in their
nature and recoverable within 12 months. Trade receivables include credit secured receivables of $187m
(2022: $240m).
Movements in the loss allowance of trade receivables are as follows:
US$ million
At 1 January
Additions
Reversals
Utilisation
Foreign exchange differences
At 31 December
2023
2022
56
23
(5)
(1)
1
74
60
7
(4)
(1)
(6)
56
19. CASH AND CASH EQUIVALENTS
Cash and cash equivalents are measured at amortised cost and the fair value approximates the carrying amount.
31 December
2023
31 December
2022
532
12
544
422
78
500
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
8 5
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
20. SHARE CAPITAL AND RESERVES
The Company has 1,266,941,899 authorised ordinary shares with a nominal value of $0.50 each and one
deferred share with a nominal value of $100. At 31 December 2023, 1,266,941,899 ordinary shares have been
issued and fully paid and entitle the holder to participate in dividends and one deferred share. On a show of
hands, every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and
upon a poll each share is entitled to one vote. Shareholders will, under general law, be entitled to participate in
any surplus assets in a winding up of the Company in proportion to their shareholding.
The shareholder of the deferred share is not entitled to vote at any general meeting in person or by proxy.
Furthermore, the holder of this share does not have the right to receive dividends. In the event of winding up
of the Company, the deferred shareholder shall receive an amount equal to their subscription only after the
holders of ordinary shares have been paid up.
22. BORROWINGS
US$ million
Term loan1
Notes1
Subordinated shareholder debt
Bridge loan1
VEI BV revolving credit facility
Bank borrowings
At 31 December
Ordinary shares
Deferred shares
2023
2022
Number of shares
US$ million Number of shares
US$ million
1,266,941,899
1
633
–
1,266,941,899
–
633
–
Current
Non-current
Drawn on
09/06/2023
24/09/2020
29/06/2023
13/10/2022
31 December
2023
31 December
2022
393
351
163
–
–
569
1,476
573
903
1,476
–
350
–
603
63
513
1,529
584
945
1,529
An amount of $48 million was received for the issue of one deferred share. Share premium is recognised as the
difference between nominal value of $100 and amount paid.
Other reserves are disclosed in the consolidated statement of changes in equity.
21. DIVIDENDS
No dividends have been declared or recommended during the year.
1 The amounts are net of financing costs.
Current borrowings include bank borrowings which carry interest rates between 5% and 33.06% per annum,
are short term in nature and the carrying amount approximates the fair value.
In October 2022, the Group received proceeds from an unsecured Bridge loan with an initial term of 12 months
and two three-month extension options exercisable by the Company. The Bridge loan had a floating interest
rate linked to the Secured Overnight Financing Rate. The Bridge loan has been totally repaid on 9 June 2023 with
proceeds from the Term loan, the RCF and cash on hand.
During 2022, the total dividends paid of $698m relate to an $18.5m special dividend and a $628.5m further
interim dividend, as well as the 2021 interim dividend of $51m. All dividends were paid from the distributable
reserves in the year in which they relate to.
The Term loan matures in five years and bears interest linked to the Secured Overnight Financing Rate which
is repayable on a quarterly basis. The principal amount is repayable in six equal instalments, commencing after a
two-year grace period. The carrying amount approximates the fair value.
In September 2020, the Group issued $350m notes with a coupon rate of 5.125% paid semi-annually and
seven-year maturity. The notes are fully redeemed at maturity, with a repayment date of 24 September
2027. The fair value of the notes is approximately $328m based on quoted market prices at the end of the
reporting period.
The Subordinated shareholder debt matures in 12 months, with an additional 12-month extension option, and
bears an interest rate of three-month Secured Overnight Financing Rate adjusted for credit spread plus a margin
of 0.75% p.a. Interest is payable on a quarterly basis and the principal amount can be prepaid on demand.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
8 6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
22. BORROWINGS CONTINUED
The RCF was renewed in June 2023, with an initial term of three years and two one-year extension options.
The RCF is a floating rate facility and the carrying amount approximates the fair value and remains undrawn.
The outstanding balance on the RCF was repaid on 29 June 2023 with proceeds of the Subordinated
shareholder debt.
Besides the RCF, the Group has various unsecured short-term bank facilities extended to operating entities for
working capital purposes. The undrawn, unsecured short-term bank facilities of $1,534m (2022: $1,407m) include
a large number of uncommitted facilities held with a number of different banks. Most of these facilities are
subject to an annual renewal process and carry interest rates between 5.00% and 33.06% per annum.
The tables below provide an analysis of cash and non-cash movements in borrowings for the period:
US$ million
1 January
Proceeds from long-term and Subordinated shareholder debt1
Repayment of long-term debt2
Proceeds/(repayment) of bank borrowings
Foreign exchange movements
Other3
31 December
Long-term
debt
Bank
borrowings
1,016
555
(664)
–
1
(5)
903
513
–
–
117
(57)
–
573
1 Mainly represents proceeds from the Term loan and Subordinated shareholder debt.
2
Includes repayment of the Bridge loan and RCF.
3 Other includes financing costs and non-cash items.
US$ million
1 January
Proceeds from long-term debt1
Proceeds/(repayment) of bank and other borrowings2
Foreign exchange movements
Other3
31 December
1 Mainly represents the proceeds from the Bridge loan.
2 Other borrowings relate to the drawn RCF.
3 Other includes financing costs and non-cash items.
Long-term
debt and RCF
Bank
borrowings
349
595
59
4
9
1,016
280
–
258
(25)
–
513
2023
Total
1,529
555
(664)
117
(56)
(5)
1,476
2022
Total
629
595
317
(21)
9
1,529
Key covenants:
The key covenants below relate to the VEI BV RCF and are substantially the same for the Term loan:
– Within 150 calendar days after the Group’s year-end, its audited annual consolidated financial statements,
unaudited annual non-consolidated financial statements and the unaudited annual Group financial
statements of each operating unit must be provided to the lender. Within 90 days after each half of
each financial year, the unaudited non-consolidated financial statements, unaudited consolidated financial
statements and unaudited Group financial statements for each operating unit for the financial half-year
must be provided to the lender.
– The Group’s financial covenants were revised during the first half of the year to a minimum interest cover
of 3.0x (2022: 4.0x) and a maximum debt cover of 3.5x (2022: 3.0x). These covenants are applicable
for the relevant periods ending over the next two years, following which they shall revert to the levels
stipulated in 2022. With each set of financial statements, a financial covenants compliance certificate
has to be provided indicating the debt and interest cover. The debt cover excludes the Subordinated
shareholder debt and lease liabilities, divided by the last 12 months’ adjusted EBITDA. The interest cover
indicates the Group’s ability to service its debt-related interest with profits. These calculations take into
account bank permitted exemptions stipulated within the contractual agreement. In addition, there are
some customary negative pledges such as on asset sale, securities over assets, mergers and guarantees
subject in each case to some exemptions and permitted baskets, and a maintenance of a bond listing
covenant. It also has a change of control clause triggering repayment if an entity, other than permitted
ones, takes control of the Company.
The below key covenants relate to the VEI BV notes:
– The financial covenants are a minimum fixed charged cover of 2.0x. The notes carry customary
restrictive covenants such as on asset sale, securities over assets, mergers and guarantees subject in
each case to some exemptions and permitted baskets. It also has a change of control clause giving each
noteholder a put right if an entity, other than permitted ones, takes control of the Company.
No key covenants were breached in the last applicable period.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
23. PROVISIONS
Provisions include the following:
US$ million
Provisions
Retirement benefit obligations (note 24)
Current
Non-current
31 December
2023
31 December
2022
73
25
98
15
83
98
76
28
104
15
89
104
2023
US$ million
At 1 January
Additions
Utilisation
Releases
Foreign exchange differences
At 31 December
Current
Non-current
Uncertain tax
positions
Compulsory
stock
obligation
Legal
provisions
Other
Total
24
4
(2)
(4)
1
23
–
23
23
22
–
–
(5)
1
18
–
18
18
12
1
–
(1)
–
12
12
–
12
18
6
(2)
(2)
–
20
3
17
20
76
11
(4)
(12)
2
73
15
58
73
Compulsory stock obligation provision
The oil market regulator in Morocco introduced an industry mechanism to enable oil market operators to
maintain the necessary compulsory stock volume requirement. This resulted in the recognition of a provision,
which is an amount payable to the Moroccan oil fund regulator in relation to the compulsory stock reserve
requirement introduced in 1994. Refer to note 2.22 for further details.
Uncertain tax positions
This amount represents provisions for uncertain tax positions for non-income taxes, interest and penalties
of $23m (2022: $24m). Refer to note 4.2 for further details regarding uncertain tax positions and note 16 for
further details of the indemnification asset on tax claims.
Legal provision
This amount represents a provision of certain legal claims brought against the Group. The timing of any payout is
uncertain as these claims are being disputed by the Group. The Group believes that the outcome of these claims
will not give rise to a significant loss beyond the amounts provided against as at 31 December 2023.
Refer to note 16 for further details of the indemnification asset on legal claims.
Other
Other provisions include a number of costs to be paid out by the Group that have uncertainty in timing of
cash values and total monetary value. Other provisions relate mainly to employee-related provisions of
$10m (2022: $9m).
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
8 8
The amounts recognised in the consolidated statements of financial position are determined as follows:
US$ million
Present value of funded obligations
Fair value of plan assets1
Funded status of funded benefit obligations
Present value of unfunded obligation
Unfunded status end of year (net liability)
Net defined benefit obligation
1 The plans in Mauritius had a net deficit of $0.1m (2022: surplus of $1m).
31 December
2023
31 December
2022
(13)
13
–
(21)
(21)
(21)
(11)
11
–
(24)
(24)
(24)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
24. RETIREMENT BENEFITS
The Group operates defined benefit plans in multiple African countries, which include Cape Verde, Côte
d’Ivoire, Gabon, Ghana, Guinea, Mauritius, Morocco, Namibia, Reunion, Rwanda, Senegal, South Africa and
Tunisia. The plans operated in Cape Verde, Mauritius, Morocco, Senegal and Tunisia combined represent
approximately 83% of the total liability for the Company. The valuations are carried out in line with the
regulatory requirements in each country considering the requirements under IAS 19 ‘Employee Benefits’.
The plans offered in these countries differ in nature and consist of medical plans, pension plans, retirement
indemnities, jubilees and long service award plans. These plan benefits are linked to final salary and benefit
payments are met as they fall due. These plans are unfunded with two exceptions to this being Gabon and
Mauritius, which both operate a funded plan. The plan in Gabon has a funding level of approximately 71% and
Mauritius approximately 99%. In Gabon, plan assets are held in the form of insurance contracts. For Mauritius,
plan assets are held in vehicles with standard investment risk, following a balanced investment strategy, split
between equities, government bonds and asset-backed securities. The plan in Mauritius has been closed to
future accrual from 31 December 2014 onwards. However, the link to final salaries is being maintained for
in-service employees.
US$ million
Current service cost
Accretion expense
US$ million
Defined benefit plans
Defined contribution plans
Total retirement benefit costs
US$ million
Consolidated statements of financial position obligations for:
Pension benefits
Other post-employment benefits
Total liability
2023
2022
1
2
3
2023
3
9
12
1
2
3
2022
3
9
12
31 December
2023
31 December
2022
21
4
25
24
4
28
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
8 9
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
24. RETIREMENT BENEFITS CONTINUED
The movements in the defined benefit obligation for funded and unfunded post-employment defined benefits over the year are as follows:
US$ million
At 1 January
Current service costs
Benefits paid
Interest costs
(Gains)/losses from change in financial assumptions
Actuarial (gains)/losses
Foreign exchange differences
At 31 December
The movements in the fair value of plan assets over the year are as follows:
US$ million
At 1 January
Return on plan assets
Employer contributions
Benefits paid
Foreign exchange differences
At 31 December
Pension
benefits
Other
35
1
(2)
2
1
(3)
–
34
4
–
–
–
–
–
–
4
Pension benefits
11
1
3
(2)
–
13
2023
Total
39
1
(2)
2
1
(3)
–
38
2023
Total
11
1
3
(2)
–
13
Pension
benefits
Other
38
1
(2)
2
(1)
–
(3)
35
5
–
–
–
–
–
(1)
4
Pension benefits
13
(2)
2
(2)
–
11
2022
Total
43
1
(2)
2
(1)
–
(4)
39
2022
Total
13
(2)
2
(2)
–
11
The plan assets shown above are invested in equities $7m (2022: $6m), government bonds $3m (2022: $3m), corporate bonds $2m (2022: $2m), insurance contracts $0.3m (2022: $0.3m) and cash and cash equivalents $0.02m
(2022: $0.05m).
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
9 0
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
24. RETIREMENT BENEFITS CONTINUED
The sensitivity of the defined benefit obligation to changes in weighted principal assumptions is:
31 December 2023
31 December 2022 Range of assumptions
Increase/(decrease)
Assumptions used
Effect of using alternative assumptions
Rate of increase in pensionable remuneration
Rate of increase in pensions in payment
Rate of increase in healthcare costs
Discount rate for pension plans
Discount rate for healthcare plans
Expected age at death for persons aged 60:
Men
Women
The principal actuarial assumptions were as follows:
4.90%
2.30%
13.17%
5.48%
25.11%
79.75
83.62
Discount rate
Inflation rate
Future salary increases
Future pension increases
Discount rate
Inflation rate
Future salary increases
Future pension increases
Tunisia
10.00%
7.00%
6.00%
n/a
Senegal
Cape Verde
Mauritius
Morocco
Côte d’Ivoire
9.50%
2.00%
3.00%
n/a
3.75%
2.00%
2.80%
1.00%
4.75%
3.20%
3.20%
3.00%
4.50%
2.00%
6.00%
n/a
6.00%
n/a
3.00%
n/a
Tunisia
Senegal
Cape Verde
Mauritius
Morocco
Côte d’Ivoire
9.75%
7.00%
7.00%
n/a
9.75%
2.00%
3.00%
n/a
3.25%
2.00%
3.50%
1.00%
6.50%
2.90%
2.90%
3.00%
2.75%
2.00%
6.00%
n/a
6.00%
n/a
3.00%
n/a
Guinea
13.75%
n/a
11.20%
n/a
Guinea
15.50%
n/a
11.20%
n/a
Namibia
15.19%
9.35%
n/a
n/a
Namibia
13.20%
8.10%
n/a
n/a
Ghana
22.00%
19.00%
n/a
n/a
Ghana
34.50%
10.00%
n/a
n/a
Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience in each territory.
The weighted average duration of the defined benefit obligation is 10.82 years.
Expected contributions to post-employment benefit plans for the year ending 31 December 2024 are $3m.
5.07%
2.17%
20.43%
4.76%
17.65%
79.59
83.62
Gabon
5.25%
2.50%
3.50%
n/a
Gabon
6.25%
2.20%
3.00%
n/a
0.50% – (0.50%)
0.50% – (0.50%)
0.50% – (0.50%)
0.50% – (0.50%)
0.50% – (0.50%)
2.25% – (2.12%)
1.55% – (1.44%)
3.64% – (3.39%)
(4.93%) – 5.40%
(4.88%) – 5.35%
Reunion
Rwanda
South Africa
2023
4.25%
2.00%
2.75%
n/a
14.25%
6.75%
8.00%
n/a
13.40%
7.20%
n/a
n/a
2022
Reunion
Rwanda
South Africa
3.75%
2.00%
2.85%
n/a
13.25%
6.25%
7.50%
n/a
12.70%
6.10%
n/a
n/a
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
25. OTHER LIABILITIES
US$ million
Other tax payable1
Oil fund liabilities2 (note 2.22)
Deposits owed to customers2
Employee liabilities2,3
Energy certificates
Deferred income
Other2
Current
Non-current
2023
(18)
(32)
(7)
2022
(17)
(30)
(7)
2023
2022
31 December
2023
31 December
2022
US$ million
The consolidated statement of comprehensive income shows the following amounts relating to leases:
138
102
89
59
12
9
11
420
253
167
420
93
93
78
50
5
10
8
337
187
150
337
Interest expense (included in finance cost)
Depreciation of right-of-use assets
Expenses relating to short-term leases, low-value leases and variable leases not
included in the lease liabilities
The consolidated statement of cash flows shows the following amounts relating to leases:
US$ million
Cash flows from financing activities
Principal elements of lease payments
Interest paid
Other information related to leases was as follows:
Weighted average remaining lease term (years)
Weighted average discount rate
(35)
(13)
(48)
2023
18
10%
The Group recognised rental income of $28m (2022: $26m) as revenue in the statement of
comprehensive income.
27. NET CHANGE IN OPERATING ASSETS AND LIABILITIES AND OTHER
ADJUSTMENTS
1 Other tax payable mainly relates to VAT, withholding taxes, employee taxes and other government settlements.
2 Financial liabilities amounting to $251m (2022: $224m) are measured at amortised cost and its fair value approximates the carrying amount.
3 Employee liabilities mainly relate to employee bonuses.
26. LEASES
The Group has leases for motor vehicles, corporate offices, land, buildings and equipment. Leases have remaining
lease terms of one year to 99 years, some of which may include options to extend the leases for at least five
years and some of which may include options to terminate the leases within one year.
The consolidated statement of financial position shows the following amounts relating to leases:
US$ million
Right-of-use assets, 1 January 2022
Depreciation of right-of-use assets
Leases effective in 2022
Right-of-use assets, 31 December 2022
Depreciation of right-of-use assets
Leases effective in 2023
Right-of-use assets, 31 December 2023
Land and
buildings
Motor
vehicles
199
(26)
44
217
(28)
42
231
20
(4)
2
18
(4)
6
20
US$ million
Trade payables
Trade receivables
Inventories
Other assets
Other liabilities
Provisions
Other1
Total
219
(30)
46
235
(32)
48
251
Lease liabilities are measured at amortised cost and the fair value approximates the carrying amount.
1 Of which $131m relates to net finance expense (2022: $87m).
US$ million
Current lease liabilities
Non-current lease liabilities
31 December
2023
31 December
2022
32
167
199
27
156
183
2023
247
(213)
71
30
84
(8)
148
359
(33)
(13)
(46)
2022
15
10%
2022
397
(195)
(184)
(379)
44
(10)
98
(229)
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
92
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
28. COMMITMENTS AND CONTINGENCIES
Commitments
The Group has purchase obligations for capital and operational expenditure, under various agreements, made in
the normal course of business. The purchase obligations are as follows, as at:
US$ million
Purchase obligations
31 December
2023
31 December
2022
18
13
Contingent liabilities and legal proceedings
The Group may from time to time be involved in a number of legal proceedings. The Directors prepare a best
estimate of its contingent liabilities that should be recognised or disclosed in respect of legal claims in the course
of ordinary business. Furthermore, in many markets there is a high degree of complexity involved in the local tax
and other regulatory regimes. The Group is required to exercise judgement in the assessment of any potential
exposures in these areas.
In 2019, Morocco’s Conseil de la Concurrence (‘CDC’) announced that it had commenced an investigation into
the competitive dynamics of the fuel retail industry. In 2020, the Group’s subsidiary in Morocco received a report
from the investigators in charge of the CDC’s ongoing review of the competitive dynamics of the Moroccan
fuel retail industry. In December 2023, a settlement agreement was concluded, for the previously disclosed
contingent liability, with the CDC to close the outstanding investigation in a constructive and cooperative manner
and prevent a lengthy litigation. Refer to page 76 for further details. As part of the settlement agreement, the
Moroccan subsidiary has agreed to certain non-financial commitments in terms of reporting certain data.
Vivo Energy Morocco continues to ensure it conducts its operations in accordance with the competition laws
and regulations at all times and is committed to maintaining a strong governance framework. With a strong
commitment to Morocco, where the Shell brand has been present for over 100 years, Vivo Energy Morocco will
continue to invest in the Kingdom’s future to meet the challenges of an ever-changing environment.
Vitol Emerald Bidco (Pty) Limited, a subsidiary within the Group, has committed to acquire 74% shareholding in
Engen which is pending regulatory approvals. The proposed acquisition will result in a total investment from Vivo
Energy of circa. $1bn for its stake in the pro forma business, subject to customary closing accounts adjustments
related to working capital and net debt movements. Refer to page 6 for further information on the transaction.
In the ordinary course of business, the Group is subject to a number of contingencies arising from litigation and
claims brought by governmental, including tax authorities, and private parties. The operations and earnings of the
Group continue, from time to time, to be affected to varying degrees by political, legislative, fiscal and regulatory
developments, including those relating to the protection of the environment and indigenous groups in the
countries in which they operate. The industries in which the Group is engaged are also subject to physical risks of
various types. There remains a high degree of uncertainty around these contingencies, as well as their potential
effect on future operations, earnings, cash flows and the Group’s financial condition.
29. SHARE-BASED PAYMENTS
The Group operates share-based payment plans for certain Executive Directors.
Management Equity Plan
During 2023, the Group introduced a Management Equity Plan (‘MEP’) under which Vivo Energy Limited granted
phantom options to Executive Directors. Subject to the discretion of the supervisory board, the phantom options
vest equally over a five-year period provided the participant is still employed by the Group. These options are
exercisable at the end of a five-year period from grant date, or earlier if an exit event occurs. The holders are
entitled to a cash payment based on the increase in the share price of the Group between grant date and the time
of exercise. The Management Equity Plan related liability as at 31 December 2023 amounted to $10m (2022: Nil).
Long-Term Incentive Plan
Vivo Energy Limited adopted the Vivo Energy 2019 Long-Term Incentive Plan (the ‘LTIP 2019’) in March 2019,
the Vivo Energy 2020 Long-Term Incentive Plan (the ‘LTIP 2020’) in March 2020 and the Vivo Energy 2021
Long-Term Incentive Plan (the ‘LTIP 2021’) in March 2021. The LTIP 2019, LTIP 2020 and LTIP 2021 provided for
grants of awards over the shares of the Company in the form of share awards subject to continued employment
and the performance conditions relating to earnings per share, return on average capital employed and total
shareholder returns over a three-year period. Executive Directors and senior management of the Group were
eligible for grants under the LTIP Incentive Plans.
As a result of the completion of the Vitol Offer, Executive Directors and senior management of the Group were
afforded an opportunity to choose between receiving an immediate pay-out for the LTIPs or convert the existing
plans from equity-settled to cash-settled. Under the first option, all share options which would not otherwise have
vested were accelerated and deemed to have vested and exercised. All remaining LTIPs were converted from
equity-settled to cash-settled as a long-term incentive plan for senior management. All LTIPs were settled in 2022.
The fair value of the options at the date of modification was $6m. No new LTIP were issued during the current
financial period.
Restricted Share Award Plan
The Restricted Share Award Plan provided for grants of awards over the shares of the Company in the form of
share awards subject to continued employment over a 16-month period from the date of issue. Certain senior
managers of the Group are eligible for grants under the Restricted Share Award Plan. Following the Vitol Offer,
the vesting of the Restricted Share Award Plan was accelerated and settled in 2022. The fair value of the options
at the date of modification was $2m.
The table below shows the share-based payment expense/(income) recognised in the statement of
comprehensive income:
US$ million
Cash-settled share-based payments
Management Equity Plan
Equity-settled share-based payments
Long-Term Incentive Plans
Restricted Share Award Plan
2023
2022
10
–
–
10
–
2
1
3
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
29. SHARE-BASED PAYMENTS CONTINUED
Movements in the number of shares and share options outstanding, and their related weighted average exercise prices, are as follows:
In million
Outstanding at 1 January 2023
Granted
Lapsed/Vested/Exercised
Outstanding at 31 December 2023
Exercisable at 31 December 2023
Outstanding at 1 January 2022
Lapsed/Vested/Exercised/Modified
Outstanding at 31 December 2022
Exercisable at 31 December 2022
LTIP
Restricted
Share Awards
LTIP 2019
LTIP 2020
LTIP 2021
Restricted
Share Awards
Average
exercise price
per phantom
option US$
–
–
–
–
–
4
(4)
–
–
–
–
–
–
–
4
(4)
–
–
–
–
–
–
–
6
(6)
–
–
–
–
–
–
–
1
(1)
–
–
–
1.50
–
1.50
n/a
–
–
–
n/a
MEP
Phantom
Options
–
55
–
55
–
–
–
–
–
The Binomial Option Pricing Model is used to calculate the fair value of the options and the amount to be expensed. The inputs into the model for options granted in the year expressed as weighted averages are as follows:
Share price at grant date ($)
Option exercise price ($)
Volatility (%)
Option life (years)
Risk-free interest rate
Expected dividends as a dividend yield
The weighted average fair value of phantom options as of 31 December 2023, using the Binomial Option Pricing Model, was $0.51.
MEP
phantom options
1.29
1.50
30.54%
9.18
4.33%
–
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
94
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
30. RELATED PARTIES
Sales and purchases
US$ million
2023
Joint ventures
and associates
Shareholders
Total
Sales of products and services and other income
Purchase of products and services, and other expenses
2022
Sales of products and services and other income
Purchase of products and services, and other expenses
31
395
29
390
143
1,691
154
1,522
The following table presents the Company’s outstanding balances with related parties:
Key management compensation
Key management is considered to be the Directors (Executive and Non-Executive) and senior management.
US$’000
Salaries and other short-term employee benefits
Termination benefits
Long-term incentives1,2
Service fees
Post-employment benefits3
2023
10,824
3,567
10,294
138
1,452
26,275
2022
9,848
593
4,570
178
1,451
16,640
174
2,086
183
1,912
1
2
3
Includes the Management Equity Plan. The 2022 amount related to the LTIP and Restricted Share Awards.
Includes long-term incentives related to 1 Director (2022: 1 Director).
Includes post-employment benefits related to 1 Director (2022: 1 Director).
Joint ventures
and associates
Shareholders
Total
Directors’ compensation
Directors’ compensations are disclosed from the date of appointment. Further details of current year Directors
can be found on page 43.
US$ million
31 December 2023
Receivables from related parties
Payables to related parties
31 December 2022
Receivables from related parties
Payables to related parties
The receivables from related parties arise from sale transactions and loans to joint ventures. Receivables are
due two months after the date of sales, are unsecured in nature and bear no interest. Loans to joint ventures
are interest bearing and secured by the entire issued share capital of the joint venture. An expected credit loss
of $7m (2022: $3m) was recognised in relation to related party receivables. The payables to related parties
arise mainly from purchase transactions at arm’s length, including a supplier agreement with Vitol Supply,
and are typically due two months after the date of purchase. These payables bear no interest.
1
2
36
(74)
(38)
47
(80)
(33)
16
(595)
(579)
15
(327)
(312)
52
(669)
(617)
62
(407)
(345)
US$’000
Salaries and other short-term employee
benefits
Long-term incentives2
Service fees
Post-employment benefits
2023
Highest paid
Director
2022
Highest paid
Director
Directors1
Directors1
2,145
4,997
138
367
7,647
2,145
4,997
–
367
7,509
2,380
1,070
178
251
3,879
1,286
1,070
–
156
2,512
Includes remuneration of the Directors for their relevant terms of service. Excludes the Interim CFO’s remuneration paid by Vitol and is
not recharged to the Group.
Includes the Management Equity Plan. The 2022 amount related to the LTIP and Restricted Share Awards. During the year no Directors
exercised share options.
31. EVENTS AFTER BALANCE SHEET PERIOD
There have been no material subsequent events after the reporting period, up to and including the date that
the financial statements were authorised for issue, that would have required disclosure or adjustment of the
consolidated financial statements or the Company financial statements.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
95
COMPANY STATEMENT OF FINANCIAL POSITION
COMPANY STATEMENT OF CHANGES IN EQUITY
US$ million
Fixed assets
Investments
Current assets
Debtors
Cash and cash equivalents
Creditors amounts falling due within one year
Net current assets
Total assets less current liabilities
Creditors amounts falling due after more than one year
Net assets
Capital and reserves
Called up share capital
Share premium
Other reserves
Equity-settled incentive schemes
Retained earnings1
Total equity
Notes
31 December
2023
31 December
2022
5
6
7
8
8
9
10
1,913
1,913
10
1
11
(17)
(6)
1,907
(633)
1,274
633
52
443
–
146
1,274
1,913
1,913
20
1
21
(16)
5
1,918
(637)
1,281
633
4
443
–
201
1,281
US$ million
At 1 January 2023
Loss for the period
Capital contribution
As at 31 December 2023
US$ million
At 1 January 2022
Share-based payment expense
Share-based payment modification2
Profit for the period
Dividends
As at 31 December 2022
Called
up share
capital
Share
premium
Other
reserve1
Equity-
settled
incentive
schemes
Retained
earnings
633
–
–
633
4
–
48
52
443
–
–
443
–
–
–
–
201
(55)
–
146
Called
up share
capital
Share
premium
Other
reserve1
Equity-
settled
incentive
schemes2
Retained
earnings
633
–
–
–
–
633
4
–
–
–
–
4
1,136
5
–
–
(698)
443
4
1
(5)
–
–
–
138
–
–
63
–
201
Total
1,281
(55)
48
1,274
Total
1,915
6
(5)
63
(698)
1,281
1
Included in reserves is a merger reserve ($82m) relating to the premium on shares issued as part of the consideration of the acquisition of
Vivo Energy Overseas Holdings Limited (VEOHL) in March 2019 and a share capital reduction completed subsequent to the listing in 2018.
2 Equity-settled incentive schemes included the LTIP and the Restricted Share Award Plan which was modified in 2022 to cash-settled
on delisting.
1 Loss for the financial year ended 31 December 2023 was $55m (2022: $63m profit).
The notes are an integral part of these Company financial statements.
The Company financial statements were approved and authorised for issue by the Board of Directors on
14 March 2024 and were signed on its behalf on 20 March 2024 by:
STAN MITTELMAN
CHIEF EXECUTIVE OFFICER
JAY GLEACHER
INTERIM CHIEF FINANCIAL OFFICER
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
96
NOTES TO THE COMPANY FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Vivo Energy Limited (‘Vivo Energy’ or the ‘Company’), is a private limited company incorporated in the
United Kingdom on 12 March 2018. The Company is registered in England and Wales and is limited by shares
(Registration number 11250655) under the Companies Act 2006. The address of the registered office is
23 Lower Belgrave Street, London, England, SW1W 0NT. The Group’s shareholders are VIP II Blue B.V. and Vitol
Africa B.V. The Group has no ultimate parent or controlling party.
The Company operates as the holding company of a group which distributes and sells fuel, liquefied petroleum
gas (LPG) and lubricants to Retail and Commercial consumers under the Shell and Engen brands. The Group
sells aviation fuels as well as unbranded marine fuels. In addition, the Group generates revenue under
convenience retail and quick service restaurants by leveraging on its Retail network.
2. MATERIAL ACCOUNTING POLICIES
The material accounting policies applied in the preparation of these consolidated financial statements are set out
below. These policies have been applied consistently over the years.
2.1 Basis of preparation
The Company financial statements, for the years ended 31 December, have been prepared on a going concern
basis, under the historical cost accounting rules, in accordance with Financial Reporting Standard 102 (‘FRS 102’)
and those parts of the UK Companies Act 2006 applicable to companies reporting under FRS 102.
The following disclosure exemptions available under FRS 102 have been applied:
Section 1 Scope of the Financial Reporting Standards 1.12(dA)
Section 7 Statement of cash flow and section 3 Financial statement presentation paragraph 3.17(d)
Section 26 Share-based payment paragraph 26.18(b), 26.19, 26.21, 26.23
Section 33 Related party disclosure 33.1A
As permitted by section 408(3) of the Companies Act 2006, the income statement of the Company is not
presented in this Annual Report. The Company has not published its individual cash flow statement as its
liquidity, solvency and financial adaptability are dependent on the Group rather than its own cash flows.
The Group consolidated financial statements as presented on pages 58 to 94 include the financial statements of
the Company and all of its subsidiary undertakings together with the Group’s share of the results of associates
made up to 31 December 2023.
In the process of applying the Company’s accounting policies, there are no significant estimates or judgements
which have a significant effect on the amounts recognised in the financial statements. In preparing the financial
statements, management has considered the impact that climate change may have. There is currently no
indication that climate change will negatively impact the Company’s accounting estimates and judgements, which
would result in a material adjustment to the financial statement balances. For further details, refer to note 2.1 in
the consolidated financial statements.
2.2 Foreign currency translation
Functional and presentation currency
Items included in the financial statements of the Company are measured using the currency of the primary
economic environment in which the entity operates (the ‘functional currency’). The financial statements are
presented in US dollars, which is also considered to be the Company’s functional and presentation currency.
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 profit or loss. Monetary assets and liabilities expressed in
foreign currencies at the end of the reporting period are translated into US dollars at the market rate ruling at
the end of the reporting period.
2.3 Income tax
The income tax expense for the period comprises current and deferred tax. Income tax is recognised
in the statements of comprehensive income, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the income tax is also recognised in other
comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
reporting date in the country where the Company operates and generates a taxable income. The Company
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be
paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on timing differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities
are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is determined using
tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to
apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax is recognised on all timing differences at the reporting date. Unrelieved tax losses and other
deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of
deferred tax liabilities or other future taxable profits.
Deferred income tax is provided on timing differences arising on investments in subsidiaries and associates,
except for deferred income tax liability where the timing of the reversal of the timing difference is controlled by
the Company and it is probable that the timing difference will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities where there
is an intention to settle the balances on a net basis.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
97
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
2.4 Financial instruments
The Company has elected to apply the requirements of IFRS 9 in preparations of the financial statements.
Financial instruments are initially recognised when the Company becomes a party to the contractual provisions
of the instrument. Trade receivables are initially recognised when they are originated. Financial assets are
derecognised when substantial risks and rewards of ownership of the financial asset have been transferred.
In cases where substantial risks and rewards of ownership of the financial assets are neither transferred nor
retained, financial assets are derecognised only when the Company has not retained control over the financial
asset. Financial liabilities are derecognised when its contractual obligations are discharged, cancelled or expired,
and when its terms are modified and the cash flows are substantially different. Subsequent to initial recognition,
financial instruments are measured as described below.
Financial instruments measured at amortised cost
Except for debt instruments that are designated at fair value through profit or loss (FVTPL) on initial recognition,
financial instruments that meet the following criteria are measured at amortised cost using the effective
interest method.
– They are held within a business model whose objective is to hold assets in order to collect contractual
cash flows; and
– The contractual terms of the instrument give rise on specified dates to cash flows that are solely payment
of principal and interest on the principal amount outstanding.
The amortised cost is reduced by impairment losses. Finance income or expense, foreign exchange gains and
losses and impairments are recognised in profit and loss. The following financial assets and liabilities are classified
as measured at amortised cost:
Cash and cash equivalents
Cash and cash equivalents include cash at bank. Cash equivalents are short-term, highly liquid investments that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
Other financial liabilities
Financial liabilities are initially measured at fair value, net of transaction cost and are subsequently measured at
amortised cost using the effective interest method, with interest expense recognised on an effective yield basis
except for short-term payables when the recognition of interest would be immaterial.
2.5 Investments
Investments in subsidiary undertakings are stated at cost, less any provision for impairment. The Group
determines the recoverable amount of an investment in subsidiaries where a trigger for impairment is identified
by assessing the external and internal factors to determine indicators for impairment. External factors include
market capitalisation, market interest rates, changes in the crude oil prices, changes in the competitive landscape,
changes to government regulations. Internal factors include year-to-date performance, the four-year strategic
plan, outcomes of previous impairment assessments performed and the impact of structural changes in
the business.
2.6 Share-based payments
Cash-settled share-based payments arising from the Vivo Energy Management Equity Plan are recognised
as an expense over the vesting period, measured by reference to the fair value of the corresponding liability
which is recognised in the consolidated statements of financial position. The liability is measured at fair value
at each reporting date until settlement, with changes in fair value recognised in the consolidated statement
of comprehensive income. Details of the share-based payments, share option schemes and share plans are
disclosed in note 29 ’Share-based payments’ to the consolidated financial statements.
2.7 Dividend policy
Dividends paid and received are included in the Company financial statements in the period in which the related
dividends are actually paid or received or, in respect of the Company’s final dividend for the year, approved
by shareholders.
2.8 Share capital
Ordinary and deferred shares are classified as equity.
2.9 Going concern basis
The Company operates as an investment holding company for the Vivo Energy Group, holding investments
in Vivo Energy Holding B.V. As the Company is an intrinsic part of the Group’s structure, the Directors have a
reasonable expectation that Group companies will continue to support the Company through trading and cash
generated from trading for the foreseeable future. Therefore, at the time of approving the Company financial
statements, the Directors maintain a reasonable expectation that the Company will have adequate resources to
continue in operational existence during the going concern period and consider it appropriate to adopt the going
concern basis of accounting in preparing the financial statements. For further details, refer to note 2.1 in the
consolidated financial statements.
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
9 8
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
3. EMPLOYEE COSTS
US$ million
Salaries and wages
Social security costs
Share-based payments
Total
The monthly average number of full-time equivalent employees as at 31 December:
No.
Directors
Administration and support
2023
2022
8
1
5
14
2023
1
23
10
1
1
12
2022
4
22
5. INVESTMENTS
The investments relate solely to the 100% shareholding of Vivo Energy Holding B.V. with a carrying amount of
$1,913m as at 31 December 2023. Based on the impairment trigger assessment performed by management
for the investment, no indicators of impairment have been identified. Refer to note 2.5 for the Company’s
accounting policy.
6. DEBTORS
US$ million
Related party receivable
Other receivables
Total
31 December
2023
31 December
2022
5
5
10
14
6
20
4. INCOME TAX
The Company is subject to income tax in the United Kingdom on its net income as adjusted for tax purposes,
at the rate of 25% (2022: 19%). At 31 December 2023, the Company had accumulated tax losses of $5m
(2022: $2m) and carried forward tax credits of $14m (2022: $2m).
Receivable from related party arises from recharges of employee benefit costs. The amounts are unsecured,
interest free and have no fixed date of repayment and are repayable on demand. Debtors are measured at
amortised cost and the carrying amount is equal to the fair value for the period end.
7. CASH AND CASH EQUIVALENTS
Deferred tax
No deferred tax asset has been recognised under the Company’s accounting policy for recognising deferred
tax assets.
US$ million
Bank
A reconciliation between the actual income tax expense and the theoretical amount that would arise using the
applicable income tax rate for the Company is as follows:
Reconciliation of effective tax
US$ million
(Loss)/profit before income tax
Statutory tax rate
Income tax expense at statutory tax rate
Impact of:
Expenses not allowable for tax purposes
Dividends received not subject to tax
Non-recognition of tax benefits in relation to current period tax losses or
temporary differences
Total income tax expense
2023
(57)
25%
14
(2)
–
(12)
–
2022
63
19%
(12)
(4)
18
(2)
–
31 December
2023
31 December
2022
1
1
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
9 9
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
8. CREDITORS
US$ million
Intercompany loan
Related party payables due after more than one year
Creditors due within one year
Related party payables due within one year
Total
31 December
2023
31 December
2022
473
160
14
3
650
637
–
9
7
653
Payables to related parties consist of an intercompany loan, salary related expenses and other costs.
The intercompany loan is unsecured and interest-bearing. Other amounts are unsecured, interest free, have no
fixed date of repayment and are payable on demand. Creditors are measured at amortised cost and the carrying
amount is equal to the fair value for the period end.
9. CALLED UP SHARE CAPITAL
Share capital consists of 1,266,941,899 (2022: 1,266,941,899) ordinary shares at the nominal value of $0.50 and
one deferred share with a nominal value of $100 each. For further details, refer to note 20 in the consolidated
financial statements.
10. DIVIDENDS
During 2022, the total dividends paid of $698m relate to an $18.5m special dividend and a $628.5m further
interim dividend, as well as the 2021 interim dividend of $51m. All dividends were paid from the distributable
reserves in the year in which they relate to.
11. RELATED PARTIES
The Company discloses transactions with related parties that are not wholly owned with the same Group.
It does not disclose transactions with members of the same Group that are wholly owned. All transactions
during the period with related parties outside of the Group are disclosed in the relevant notes in the
financial statements.
12. EVENTS AFTER BALANCE SHEET PERIOD
For the events after balance sheet period, refer to note 31 in the Consolidated financial statements.
13. OTHER MATTERS
The auditors’ remuneration for the current year in respect of audit and audit-related services was
$0.3m (2022: $0.3m). Auditors’ remuneration relating to other non-audit services has been disclosed in the
consolidated financial statements, refer to note 7. The consolidated financial statements have been completed in
accordance with requirements SI 2008/489.
The Directors are remunerated by the Company for their services to the Group as a whole. No remuneration
was paid to them specifically in respect of their services to Vivo Energy Limited for either year. Full details
of the Directors’ remuneration are disclosed in ‘Directors’ compensation’ in note 30 in the consolidated
financial statements.
14. COMPANY UNDERTAKINGS
A list of all subsidiaries, indirectly held by Vivo Energy Limited, except for Vivo Energy Holding B.V. which is
100% owned directly by Vivo Energy Limited, in the Group as at 31 December 2023 are disclosed below.
Unless otherwise stated, the share capital disclosed comprises ordinary shares and stated ownership percentages
represent the effective equity owned by the Group to the nearest whole number.
Subsidiary
Incorporation Registered address
Vivo Energy Tanzania
Marketing Ltd.
Canada
Vivo Energy Botswana
Pty Ltd.
Vivo Energy Burkina
S.A.
Plateau Africa Holdings
Ltd.
Vivo Energy Cabo
Verde S.A.
Sociedade Comercial
de Navegacão Concha
Verde S.A.
Vivo Energy Côte
d’Ivoire S.A.
Vivo Energy Gabon S.A. Gabon
Vivo Energy Ghana plc Ghana
Guinea
Vivo Energy de Guinée
S.A.
Vivo Energy Guinée
Mining SARL
Vivo Energy Guinée
Simandou SARLU
Vivo Energy Kenya Ltd. Kenya
Guinea
Guinea
Vivo Energy Malindi Ltd. Kenya
Vivo Energy East Africa
Ltd.
Vivo Energy Provident
Trust Ltd.
Kenya
Kenya
Bahamas
H&J Corporate services, Ocean Centre, Montague
Foreshore, East Bay Street, P.O. Box SS-19084, Nassau,
Bahamas
Plot 54349 Field Precinct, Office Block B, Central
Business District, Gaborone, Botswana
Burkina Faso Rond Point des Nations Unies, Ouagadougou Secteur 4
Botswana
Section II Lot EX-TF 432 Parcelle III, Burkina Faso
199 Bay Street, Suite No. 4000, Toronto ON M5L 1A9,
Canada
Cape Verde Avenida Amilcar Cabral, C.P 4, Mindelo, São Vicente,
Cape Verde Avenida Amilcar Cabral, C.P 4, Mindelo, São Vicente,
Cabo Verde
Cabo Verde
Côte d’Ivoire Rue des pétroliers, Zone Industrielle de Vridi, 15 BP 378
Abidjan, Côte d’Ivoire
234, BD Bessieux, Face au Lycée Immaculée
Conception, BP 224, Libreville, Gabon
Rangoon Lane, Cantonments City, Digital Address:
GL-045-46-56, P.O. Box 1097, Accra, Ghana
Aeroport Gbessia, Commune de Matoto, BP 312,
Conakry, Guinea
Aeroport Gbessia, Commune de Matoto, BP 312,
Conakry, Guinea
Aeroport Gbessia, Commune de Matoto, BP 312,
Conakry, Guinea
Vienna Court, East Wing, State House Road, P.O. Box
43561-00100, Nairobi, Kenya
Vienna Court, East Wing, State House Road, P.O. Box
43561-00100, Nairobi, Kenya
Vienna Court, East Wing, State House Road, P.O. Box
43561-00100, Nairobi, Kenya
Vienna Court, East Wing, State House Road, P.O. Box
43561-00100, Nairobi, Kenya
Shareholding
100%
100%
59%
100%
100%
100%
67%
60%
74%
100%
100%
100%
100%
100%
100%
100%
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
10 0
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
14. COMPANY UNDERTAKINGS CONTINUED
Subsidiary
Incorporation Registered address
Shareholding
Subsidiary
Incorporation Registered address
Kenya
Vivo Marketing Kenya
Ltd.
Vivo Oil Tanking Kenya
Ltd.
Vivo Energy Power
Kenya Ltd.
Vivo Energy Liberia Ltd. Liberia
Kenya
Kenya
Société Malgache des
Pétroles Vivo Energy
S.A.
Vivo Energy Ltd.
Madagascar
Malawi
Vivo Energy Mali S.A. Mali
Vivo Solar Mali S.A.
Mali
Yelen Baara SAS
Mali
Mauritius
Mauritius
Mauritius
Vivo Energy Senegal
Holdings Ltd.
Vivo Energy Tunisia
Holdings Ltd.
Vivo Energy Madagascar
Holdings Ltd.
Vivo Energy Africa
Holdings Ltd.
Vivo Energy Mauritius
Ltd.
Vivo Energy Overseas
Holdings Ltd.
Vivo Energy Foundation1 Mauritius
Mauritius
Mauritius
Mauritius
Franchise Foods Africa
Ltd.
Ceejay Gas Ltd.
Mauritius
Mauritius
Vienna Court, East Wing, State House Road, P.O. Box
43561-00100, Nairobi, Kenya
Vienna Court, East Wing, State House Road, P.O. Box
43561-00100, Nairobi, Kenya
Vienna Court, East Wing, State House Road, P.O. Box
43561-00100, Nairobi, Kenya
c/o Law Offices of Yonah, Obey & Associates,
152 Cary Street, P.O. Box 3147, Monrovia, Liberia
Bâtiment B4 Golden Business Center – Lot II i A bis
Morarano Alarobia-101, Antananarivo, Madagascar
Mission Road, Bulk Oil Sites, Makata Industrial Area,
Blantyre, Malawi
Hippodrome, Route de Koulikoro BP 199, Immeuble
N°3293 – Bamako, Mali
Dépot Vivo Energy Mali, Niaréla Sans fil, Zone
Industrielle, BP 199 Bamako, Mali
Hippodrome, Route de Koulikoro BP 199, Immeuble
3293 – Bamako, Mali
Level 3, Alexander House, 35 Cybercity, Ebene 72201,
Mauritius
Level 3, Alexander House, 35 Cybercity, Ebene 72201,
Mauritius
Level 3, Alexander House, 35 Cybercity, Ebene 72201,
Mauritius
Level 3, Alexander House, 35 Cybercity, Ebene 72201,
Mauritius
Cemetery Road, Roche Bois, Port Louis, Mauritius
C/O IQ EQ Corporate Services (Mauritius) Ltd,
33, Edith Cavell Street, Port Louis, 11324, Mauritius
Level 3, Alexander House, 35 Cybercity, Ebene 72201,
Mauritius
Level 3, Alexander House, 35 Cybercity, Ebene 72201,
Mauritius
c/o AcuFin Corporate Ltd, 13A King George V Avenue,
Floreal, Mauritius
100%
100%
100%
100%
72%
100%
77%
77%
100%
100%
100%
100%
100%
75%
100%
100%
50%
100%
1 The Vivo Energy Foundation does not have ordinary share capital and is a charitable foundation formed and constituted in accordance
with the provisions of the Foundations Act 2012 of the Republic of Mauritius.
Terminal Energetique
Jorf S.A
Terminal
D’hydrocarbures Jorf
S.A.
Terminal Energetique
Agadir S.A.
VE Mozambique
Trading Lda
Vivo Energy
Mocambique Lda
Vivo Energy Holding
B.V.
Vivo Energy
Investments B.V.
Vivo Energy Cape
Verde Holdings B.V.
Vivo Energy Morocco
Holdings B.V.
Vivo Energy Mauritius
Holdings B.V.
Vivo Energy Mali
Holdings B.V.
Vivo Energy Newco
Holdings B.V.
Vivo Energy Ghana
Holdings B.V.
Societe Indusrielle et
Gaziere de Mayotte
SAS
Somagaz SAS
Mayotte
Mayotte
Société Nouvelle
Somagaz SAS
Vivo Energy Maroc S.A. Morocco
Mayotte
Vivo Energy Africa
Services SARL
Morocco
Morocco
Morocco
Presqu’île de Longoni, BP 381, Kaweni, 97600,
Mamoudzou, Mayotte
Presqu’île de Longoni, BP 381, Kaweni, 97600,
Mamoudzou, Mayotte
Presqu’île de Longoni, BP 381, Kaweni, 97600,
Mamoudzou, Mayotte
Immeuble Le Zenith II, Lotissement Attaoufik, Route de
Nouaceur, Sidi Maarouf Casablanca, 20190, Morocco
Casablanca Nearshore Park Shore 14 – 2ème étage
Plateau 201, 1100 Bd Al Qods – Quartier Sidi Maârouf,
20270, Casablanca, Morocco
Immeuble Zenith II, Lotissement Attaoufik, Route de
Nouaceur, Sidi Maarouf, Casablanca, Morocco
Immeuble Zenith II, Lotissement Attaoufik, Route de
Nouaceur, Sidi Maarouf, Casablanca, Morocco
Shareholding
100%
100%
100%
100%
100%
100%
100%
100%
100%
Morocco
Zone Industrielle d’Anza (côté mer), Agadir, Morocco
Mozambique EN4, Tchumene II, Talhao 19, Parcela 3380, Matola,
Mozambique
Mozambique Rua dos Desportistas, no.480, Edifício Maputo Business
100%
Tower, 110 Andar, Fraccao A, Maputo, Mozambique
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
The Netherlands
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
The Netherlands
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
The Netherlands
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
The Netherlands
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
The Netherlands
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
The Netherlands
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
The Netherlands
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
The Netherlands
100%
100%
100%
100%
100%
100%
100%
100%
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
101
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
14. COMPANY UNDERTAKINGS CONTINUED
Subsidiary
Incorporation Registered address
Shareholding
Subsidiary
Incorporation Registered address
Shareholding
The Netherlands
The Netherlands
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
Vivo Energy Kenya
Holdings B.V.
Vivo Energy Uganda
Holdings B.V.
Vivo Energy Guinea
Holdings B.V.
Vivo Energy Côte
d’Ivoire Holdings B.V.
Vivo Energy Burkina
Faso Holdings B.V.
Vivo Energy Power
Holding B.V.
Vivo Energy Supply B.V. Netherlands Weena 690, 18de verdieping, 3012 CN Rotterdam,
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
The Netherlands
The Netherlands
The Netherlands
The Netherlands
Vivo Energy Emerald
Holding B.V.
Energy Power West
Africa Leasing B.V.
Vivo Sales and
Marketing Ltd.
Vivo Energy Reunion
S.A.
Vivo Energy Rwanda
Ltd.
Kabuye Depot Holding
Company Rwanda Ltd.
Vivo Energy Senegal
S.A.
Vivo Energy Sierra
Leone Ltd.
Vivo Energy South
Africa (Pty) Ltd.
The Netherlands
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
The Netherlands
Netherlands Teleportboulevard 110, 1043 EJ Amsterdam,
Nigeria
Reunion
Rwanda
The Netherlands
1, Murtala Mohammed Drive, Ikoyi, Lagos, Nigeria
1 Rue Sully Prud’Homme, ZI N°2, Le Port, 97420,
Reunion
Kacyiru, Gasabo, Umujyi wa Kigali, Rwanda
Rwanda
Kacyiru, Gasabo, Umujyi wa Kigali, Rwanda
Senegal
Sierra Leone
South Africa
Quartier Bel-Air Route des Hydrocarbores, BP 144
Dakar, Senegal
37 Siaka Stevens Street, Freetown, Sierra Leone
15th Floor Towers South, The Towers, 2 Heerengracht,
cnr Hertzog Boulevard, Foreshore 8001, Cape Town,
South Africa
Vivo Energy Power
Services SA (Pty) Ltd.
Vitol Emerald Bidco
(Pty) Ltd.
South Africa Commerce Square, 39 Rivonia Road, Sandhurst,
South Africa
Sandton, South Africa
1st Floor Hudson Building, 28 Hudson Street,
Green Point 8001, Cape Town, South Africa
Vivo Energy Tanzania
Ltd.
V&R Energy Tanzania
Ltd.
Société Vivo Energy
Tunisie S.A.
Société Butagaz Tunisie
S.A.
Société Sudgaz S.A.
Société d’Exploitation
et de Gestion des Points
de Vente S.A.
Vivo Energy Uganda
Ltd.
Vivo Energy Malindi
Uganda Ltd.
Vivo Energy Uganda
Provident Trust Ltd.
Vivo Energy Namibia
Ltd.
Vivo Energy Supply
Services Ltd.
Tanzania
Tanzania
Tunisia
Plot No. 263 Mandela Road, Kurasini, Temeke District,
Dar es Salaam, Tanzania
Plot No. 263 Mandela Road, Kurasini, Temeke District,
Dar es Salaam, Tanzania
24-26 place du 14 janvier 2011 – 1001 Tunis, Tunisia
Tunisia
24-26 place du 14 janvier 2011 – 1001 Tunis, Tunisia
Tunisia
Tunisia
24-26 place du 14 janvier 2011 – 1001 Tunis, Tunisia
24-26 place du 14 janvier 2011 – 1001 Tunis, Tunisia
Uganda
Plot 9/11 7th Street Industrial Area, Kampala, Uganda
Uganda
Plot 9/11 7th Street Industrial Area, Kampala, Uganda
Uganda
Plot 9/11 7th Street Industrial Area, Kampala, Uganda
United
Kingdom
United
Kingdom
23 Lower Belgrave Street, London, SW1W 0NT,
United Kingdom
23 Lower Belgrave Street, London, SW1W 0NT,
United Kingdom
Vivo Energy Zambia
Ltd.
VE Zambia Legacy Ltd. Zambia
Zambia
Engen Marketing Ltd.
Vivo Energy Zimbabwe
Holdings (Private) Ltd.
Vivo Energy Zimbabwe
(Private) Ltd.
Vivo Energy Zimbabwe
Operations (Private)
Ltd.
Zambia
Zimbabwe
Zimbabwe
Zimbabwe
Plot 3132, Buyantanshi Road, Lusaka, Zambia
1394 Mushemi Road, Rhodes Park, P.O. Box 32256,
Lusaka, Zambia
Plot 3132, Buyantanshi Road, Lusaka, Zambia
Engen House 71 Kaguvi Street P.O. Box 372, Harare,
Zimbabwe
Engen House 71 Kaguvi Street P.O. Box 372, Harare,
Zimbabwe
Engen House 71 Kaguvi Street P.O. Box 372, Harare,
Zimbabwe
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
94%
100%
100%
100%
100%
100%
60%
100%
100%
100%
48%
100%
100%
100%
100%
100%
100%
100%
100%
49%
49%
49%
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
102
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
14. COMPANY UNDERTAKINGS CONTINUED
A list of all joint ventures and associates, indirectly held by Vivo Energy Limited, in the Group as at 31 December 2023
are disclosed below. Unless otherwise stated, the share capital disclosed comprises ordinary shares and stated
ownership percentages represent the effective equity owned by the Group to the nearest whole number.
Investment
Incorporation Registered address
Shareholding
Investment
Incorporation Registered address
Shareholding
Botswana
Plot 50369 Fairgrounds Office Park, Gaborone,
Botswana
Côte d’Ivoire Rue des pétroliers, Zone Industrielle de Vridi, 15 BP
378 Abidjan, Côte d’Ivoire
Côte d’Ivoire Abidjan Port-bouet vridi canal de Petroliers 12 B.O
2141 Abidjan 12, Côte d’Ivoire
P.O. Box 2218, Libreville, Gabon
Tema Shell Installation, Fishing Harbour Road, Tema,
Ghana
LR No. 20/8342/3 1st Ngong Avenue, P.O. Box 14885,
00100, Nairobi, Kenya
Immeuble FITARATRA- 5 ème étage, Rue
Ravoninahitriniarivo, Ankorondrano 101, Antananarivo,
Madagascar
6th Floor Unit House, Off Victoria Avenue, Blantyre,
Malawi
Cemetery Road, Roche Bois, Port Louis, Mauritius
9th Floor, Standard Chartered Tower, 19 Cybercity,
Ebene, Mauritius
Route cotière 111, Km 6,5, Ghezouane, Mohammedia,
Morocco
Km 9 Route d’El Hajeb, Meknes, Morocco
Immeuble Tafraouti, Km 7,5 Route de Rabat, Ain Sebaa,
Casablanca, Morocco
59 Bd Zerktouni, 6eme Etage N°18, Casablanca,
Morocco
669 Bd El Qods, Ain Chock, Casablanca, Morocco
27 Bd Zerktouni, Casablanca, Morocco
Baobab Energy Botswana
Pty Ltd.
Baobab Energy Côte
d’Ivoire SARL
Stockage Petrolier de
Côte d’Ivoire SARL
Société Gabonaise
D’Entroposage des
Produits Pétrolière S.A.
Road Safety Limited
Company
Kuku Foods Kenya Ltd.
Gabon
Ghana
Kenya
Logistique Pétrolière S.A. Madagascar
Petroleum Importers Ltd. Malawi
Energy Storage Company
Ltd.
E-motion Recharge
Solutions Ltd.
Compagnie
D’Entreposage
Communautaire S.A.
Ismailia Gaz S.A.
Maghreb Gaz S.A.
Mauritius
Mauritius
Morocco
Morocco
Morocco
MFG Vivo Holding S.A. Morocco
Morocco
Morocco
Planet Pizza SARL
Société de Cabotage
Pétrolier S.A.
Société Dakhla des
Hydrocarbures S.A.
Sopetrole S.A.
Morocco
11 Avenue de la Marine Royale, Dakhla, Morocco
Morocco
Zone Industrielle, lot N°2, Laayoune, Morocco
Netherlands Carel van Bylandtlaan 30, 2596 HR, The Hague,
Stogaz S.A.
Sublime Food SARL
Morocco
Morocco
Tadla Gaz S.A.
Morocco
Reunion
Namibia
Morocco
TH Energy SARL
Tidsi Gaz S.A.
Morocco
Top Gourmandise SARL Morocco
Namibia
Havi Properties
(Proprietary) Ltd.
Synergy Foods
(Proprietary) Ltd.
Shell and Vivo Lubricants
B.V.
Société Réunionnaise
d’Entreposage S.A.
Kuku Foods Rwanda Ltd. Rwanda
Senegal
Société de Manutention
du Carburants Aviation
de Dakar Yoff S.A.
Société Dakaroise
d’Entreposage S.A.
Cimsahel Energy S.A.
Petrovi S.A.
Société D’Entrepots
Pétroliers de Tunisie S.A.
Société Bitumes de Tunis
S.A.
Viniz Food S.A.
Société d’Exploitation
et de Gestion des
Pipelines de Rades S.A.
Kuku Foods
Uganda Ltd.
Senegal
Senegal
Tunisia
Tunisia
Tunisia
Uganda
Senegal
Tunisia
50%
33%
20%
23%
37%
50%
33%
25%
38%
38%
32%
40%
37%
50%
50%
39%
33%
49%
Rue Ferhat Hachad, Mohammedia, Morocco
Angle Rue Ibnou Al Atir, et 15 Bd Abdelkrim Khettabi,
Casablanca, Morocco
Km 7,5 Route de Rabat, Ain Sebaa, Casablanca,
Morocco
38 Av Driss Lahrizi N°32, Casablanca, Morocco
Zone Industrielle d’Anza (côté mer), Agadir, Morocco
7 Menara Mall, Av Mohamed VI, Marrakech. Morocco
12th Floor Sanlam Centre, 157 Independence Avenue,
Windhoek, Khomas, 9000, Namibia
Units 7 & 15 Hidas Shopping Centre, Windhoek,
Khomas, 9000, Namibia
The Netherlands
3 Rue Jacques Prevert, Riviere des Galets, 97420
Le Port, Reunion
Kimihurura, Gasabo and Umujyi wa Kigalirr, Rwanda
Dakar-Yoff, B.P. 8022 Yoff, Senegal
Cap des Biches, Rufisque, B.P. 59 Rufisque, Senegal
Sous préfecture de SINDIA, Senegal
25, Yoff hanger, Pèlerin, Dakar, Senegal
24-26 place du 14 janvier 2011 – 1001 Tunis, Tunisia
24-26 place du 14 janvier 2011 – 1001 Tunis, Tunisia
Rue de Syrie bloc C7-1 Tunis, Tunis, 1002, Tunisia
24-26 place du 14 janvier 2011 – 1001 Tunis, Tunisia
Plot 49, Mackenzie Vale, Kololo, Kampala, Uganda
50%
50%
50%
50%
47%
50%
50%
50%
50%
20%
50%
23%
48%
47%
47%
30%
50%
50%
25%
50%
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
103
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
14. COMPANY UNDERTAKINGS CONTINUED
A list of all joint ventures and associates, indirectly held by Vivo Energy Limited, which are part of the Shell and
Vivo Lubricants Group as at 31 December 2023 are disclosed below. Unless otherwise stated, the share capital
disclosed comprises ordinary shares and stated ownership percentages represent the effective equity owned by
the Group to the nearest whole number.
Investment
Incorporation Registered address
Shareholding
Shell et Vivo Lubrifiants
Côte d’Ivoire SARL
Shell and Vivo
Lubricants Ghana Ltd.
Shell et Vivo Lubrifiants
Guinée SARL
Société Guinéenne
de Lubrifiants et
d’Emballages S.A.
Shell and Vivo
Lubricants Kenya Ltd.
Société Shell et Vivo
Lubrifiants Africa
Services SARL
Société Shell et Vivo
Lubrifiants du Maroc
S.A.
Shell and Vivo
Lubricants Nigeria Ltd.
Société Shell & Vivo
Lubrifiants de Tunisie
SARL
Société Tunisienne des
Lubrifiants de Radès
S.A.
Shell Vivo Lubricants
Supply DMCC
Côte d’Ivoire Zone industrielle de Vridi, Rue des pétroliers à Abidjan,
Ghana
Guinea
Guinea
Kenya
Morocco
Côte d’Ivoire
Rangoon Lane, Cantonments City, Accra, Ghana
L’Aéroport Gbessia, Commune de Matoto, BP 312
Conakry, Guinea
Boulevard Maritime, Commune de Kaloum, B.P. 709,
Conakry, Guinea
Vienna Court, State House Road, P.O. Box 43561, 00100,
Nairobi, Kenya
1 Rue Abou Abbas EL Araj Roches Noires, Casablanca,
Morocco
Morocco
1 Rue Abou Abbas EL Araj Roches Noires, Casablanca,
Morocco
Nigeria
1 Murtala Muhammed Drive, Ikoyi, Lagos state, Nigeria
Tunisia
24/26 place, 14 janvier 2011-1001, Tunisia
Tunisia
24/26 place, 14 janvier 2011-1001, Tunisia
United Arab
Emirates
Almas Tower, 45 A Jumeirah Lakes Tower, P.O. Box
124848, Dubai, United Arab Emirates
50%
50%
50%
35%
50%
50%
50%
50%
50%
30%
50%
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
10 4
Other
Information
This section encompasses supplementary details, including a comprehensive
glossary, TCFD disclosure references, and registered company particulars.
Task Force on Climate-Related Financial Disclosures index
Glossary
Key contacts and advisers
105
106
107
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
10 5
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES INDEX
Our detailed TCFD disclosures comply with the applicable reporting requirements and can be found in this Annual Report on the following pages:
TCFD Recommendation
Reference in the 2023 Annual Report
Page no.
Governance
a) Describe the board’s oversight of climate-related risks and opportunities.
Disclose the organisation’s governance around climate-related risks
and opportunities.
– TCFD – Governance
– Section 172(1) Statement
– Risk Management
b) Describe management’s role in assessing and managing climate-related risks
and opportunities.
– Planet and Partnerships
– TCFD – Governance
Strategy
Disclose the actual and potential impacts of climate-related risks and
opportunities on the organisation’s businesses, strategy, and financial planning
where such information is material.
a) Describe the climate-related risks and opportunities the organisation has identified
over the short-, medium-, and long-term.
– TCFD – Strategy
– Risk Management
b) Describe the impact of climate-related risks and opportunities on the organisation’s
businesses, strategy, and financial planning.
– TCFD – Strategy
– Risk Management
c) Describe the resilience of the organisation’s strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario.
– TCFD – Strategy
Risk Management
a) Describe the organisation’s processes for identifying and assessing climate-related risks.
Disclose how the organisation identifies, assesses, and manages
climate-related risks.
b) Describe the organisation’s processes for managing climate-related risks.
– TCFD – Risk Management
– Risk Management
– TCFD – Risk Management
– Risk Management
c) Describe how processes for identifying, assessing, and managing climate-related risks
are integrated into the organisation’s overall risk management.
– TCFD – Risk Management
– Risk Management
Metrics and Targets
Disclose the metrics and targets used to assess and manage relevant
climate-related risks and opportunities where such information is material.
a) Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with its strategy and risk management process.
– TCFD – Metrics and Targets
– Risk Management
b) Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 greenhouse gas (GHG)
emissions and the related risks.
– TCFD – Metrics and Targets
– Planet and Partnerships
c) Describe the targets used by the organisation to manage climate-related risks and
opportunities and performance against targets.
– TCFD – Metrics and Targets
– Planet and Partnerships
35
34
39 to 41
28 to 32
35
36
39 to 41
36
39 to 41
36
38
39 to 41
38
39 to 41
38
39 to 41
38
39 to 41
38
28 to 32
38
28 to 32
STRATEGIC REPORT
GOVERNANCE
FINANCIAL STATEMENTS
OTHER INFORMATION
VIVO ENERGY LIMITED ANNUAL REPORT 2023
10 6
GLOSSARY
Term
ABC
AML
ATM
B2B
B2C
CGU
CO2
CSO
CSR
DPO
DSO
EBIT
EBITDA
EBT
ECL
ESG
ETR
EV
FRC
FVTOCI
FVTPL
GAAP
GDP
GHG
GloBE
HR
Description
Anti-bribery and corruption
Anti-money laundering
Automated teller machine
Business to business
Business to consumer
Cash-generating unit
Carbon dioxide
Compulsory stock obligation
Corporate Social Responsibility
Days purchases outstanding
Days sales outstanding
Earnings before finance expense, finance income and income taxes
Earnings before finance expense, finance income and income taxes, depreciation and
amortisation
Earnings before income taxes
Expected credit loss
Environmental, Social and Governance
Effective tax rate
Electric vehicles
Financial Reporting Council
Fair value through other comprehensive income
Fair value through profit and loss
Generally Accepted Accounting Principles
Gross domestic product
Greenhouse gas
Global Anti-Base Erosion Rules
Human resources
Term
HSSEQ
IEA
IFRS
IMF
KPI
KT
KYC
LPG
LTIP
MEP
M&A
NCI
NGO
OCI
OECD
OTS
OU
PP&E
RCF
ROU
SVL
TCFD
TRCF
UK
US
VEI BV
VEOHL
W@VE
Description
Health, safety, security, environment and quality
International Energy Agency
International Financial Reporting Standards
International Monetary Fund
Key performance indicator
Kilotonne
Know Your Counterparty
Liquefied petroleum gas
Long-Term Incentive Plan
Management Equity Plan
Mergers and acquisitions
Non-controlling interest
Non-governmental organisation
Other comprehensive income
Organisation for Economic Co-operation and Development
Open Tender System
Operating unit
Property, plant and equipment
Revolving credit facility
Right-of-use
Shell and Vivo Lubricants B.V.
Task Force on Climate-Related Financial Disclosures
Total Recordable Case Frequency
United Kingdom
United States
Vivo Energy Investments B.V.
Vivo Energy Overseas Holdings Limited
Women at Vivo Energy
PHYSICAL ADDRESS
6th Floor, Nova South
160 Victoria Street
London
SW1E 5LB
England
REGISTERED OFFICE
23 Lower Belgrave Street
London
SWIW 0NT
England
DOMICILE
Registered in England and Wales
No. 11250655
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
COMPANY SECRETARY
Minna Gonzalez-Gomez
PRINCIPAL LEGAL ADVISERS
Freshfields Bruckhaus Deringer LLP
WEBSITE
vivoenergy.com