REG - Kibo Energy PLC - Annual Financial Report
29/06/2023 07:00
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RNS Number : 2987E Kibo Energy PLC 29 June 2023
Kibo Energy PLC (Incorporated in Ireland)
(Registration Number: 451931
(External registration number: 2011/007371/10)
LEI code: 635400WTCRIZB6TVGZ23
Share code on the JSE Limited: KBO
Share code on the AIM: KIBO
ISIN: IE00B97C0C31
("Kibo" or "the Company")
Dated: 29 June 2023
Kibo Energy PLC ('Kibo' or the 'Company')
Results for the Year Ended 31 December 2022
Kibo Energy PLC ("Kibo" or the "Company"), the renewable energy-focused
development company, is pleased to release its consolidated annual financial
results for the year ended 31 December 2022. The Company's Annual Report,
which contains the full financial statements is in the process of being
prepared for dispatch to shareholders. A copy of this Annual Report will
also be available on the Company's website at
https://kibo.energy/wp-content/uploads/Kibo-Annual-Report-2022-Final.pdf
(https://kibo.energy/wp-content/uploads/Kibo-Annual-Report-2022-Final.pdf) .
Details of the date and venue for this year's AGM will be announced in due
course.
Overview
Financial results (includes the consolidated results of MAST Energy
Developments Plc)
· Total revenues £1,036,743 (2021: £3,245);
· Operating loss £10,570,952 (2021: £24,071,363 loss);
· Loss after tax for the year ended December 2022 £10,908,524
(2021: £23,148,155 loss) includes:
§ £181,684 (2021: £891,375) from the equity accounted results of Katoro
Gold Plc ("Katoro"), which is separately funded;
§ £2,732,982 (2021: £1,079,083) from the consolidated results of Mast
Energy Developments Plc ("MED"), which is separately funded.
§ £7,038,930 (2021: £20,705,209) impairment loss mainly on Mast Energy
Developments plc (Bordersley), Mbeya Coal to Power and Mabesekwa Coal to Power
projects as a result of the continuing global shift to move toward renewable
energy and disregard fossil fuel assets, coupled with the Group's execution of
its renewable energy strategy during the 2022 financial period;
· Administrative expenditure increased to £2,579,028 in the year
ended December 2022 (2021: £2,325,750)
· Listing and capital raising fees increased from £321,365 to
£363,368;
· Additional renewable energy and exploration project expenditure
of £847,567 (2021: £687,963) incurred in 2022 by Kibo's subsidiaries being
mainly MAST Energy Developments plc on Bordersley, Pyebridge and Rochdale and
on Sustineri Energy (Pty) Ltd on renewable energy in South Africa;
· Cash outflows from company operating activities have increased to
£759,985 (2021: £491,229 cash outflow);
· Group net debt position (cash less debt) is (£5,032,945) (2021:
(£404,576) net debt);
· Company net debt position (cash less debt) is (£2,659,817)
(2021: £6,608 net cash);
· Basic and diluted loss per share of £0.003 for December 2022
(2021: basic and diluted £0.009);
· Headline loss per share of £0.0009 for December 2022 (2021:
headline loss per share of £0.0007).
Operational highlights in the 2022 year to date
· Solidified our position in sectors like Waste to Energy, Biofuel,
Reserve Power, and Renewable Energy Generation Long Duration Battery Storage,
focusing on Southern Africa and the UK.
· Proceeded with the joint venture agreement to jointly develop a
portfolio of Waste to Energy projects in South Africa with Industrial Green
Energy Solutions (Pty) Ltd, which will initially develop a phased c. 8MW
project for an industrial client, to be followed by six other projects at
different sites, to a total generation of up to 50MW. A 20-year conditional
Power Purchase Agreement secured for initial 2.7 MW phase.
· Ongoing intention to divest from coal assets while retaining
energy projects through innovative biofuel technology. Recent testing showed
the superior potential of biomass (bio coal) compared to conventional coal in
industrial boilers.
· Initiated a technical study to assess the feasibility of
replacing fossil fuels with renewable biofuel. In this regard, Kibo has
appointed an experienced international biomass and biofuel consultant to
evaluate the economic and operational feasibility of implementing bio coal as
a fuel replacement for utility-scale power projects.
· In discussions with the Tanzanian government for the Mbeya Power
Project, aligning with the Tanzanian Power System Master Plan. A renewed MOU
with TANESCO outlines the framework for finalizing power purchase and
implementation agreements.
· Partnership with Enerox GmbH secures qualified exclusive rights
to deploy VRFB Energy Storage Systems, advancing our commitment to sustainable
energy.
· Entered into a share purchase agreement to acquire Shankley
Biogas Limited, securing the rights to the Southport project-a 12 MW Waste to
Energy initiative near Liverpool, UK. The project aims to generate
bio-methane, power a 10 MW CHP plant, and a 2 MW battery storage facility.
Post period highlights and Outlook
· Kibo appointed Beaumont Cornish to the Company as its Nominated
Advisor (Nomad) on 11 January 2023 following the resignation of RFC Ambrian as
Company Nomad on 9 December 2022.
· Kibo appointed Ajay Saldanha to the Board as a director of the
Company on 11 January 2023.
· Kibo appointed Peter Oldacre as Kibo Group Business Development
Executive on 10 March 2023.
· Kibo announced a potential new revenue stream on 17 January 2023
for its initial project within the IGES waste to energy joint venture,
targeting the production of synthetic oil from non-recyclable plastic waste
(in addition to the previously reported production of electricity from
syngas), which promises significant added benefits.
· Kibo settled outstanding creditors by way of issuing 14,025,314
ordinary shares at 0.14 pence per share, of par value €0.001 each (the
"Settlement Shares") to a service provider in payment of an outstanding
invoice for value of £19,635.44.
· The Kibo 7% Convertible Loan Note Instrument was redeemed with
the agreement of Noteholders for outstanding balances amounting to £714,517
(principal and interest) as of 28 February 2023 on 11 April 2023 for Kibo
shares to satisfy one of the conditions precedents to the re-profiling of the
Kibo Facility Agreement signed on 10 April 2023 (refer below).
· Kibo announced a reprofiling of the Bridge Loan Facility
Agreement signed with an Institutional Investor on 16 February 2022 and for
which the maturity date was subsequently extended from its original date of 16
June 2022 to 28 April 2023. The Reprofiling Agreement saw £1,113,980 of the
outstanding balance on the existing bridge loan facility converted into a new
24-month term loan (the Reprofiling Agreement) following the completion of the
conditions precedent under the Reprofiling Agreement which were satisfied on
25 April 2023 and announced on 26 April 2023. Kibo has also awarded
1,262,300,283 warrants to the Institutional under the agreed reprofiling terms
of the Facility.
· Kibo repriced all unexercised and outstanding warrants in the
Company to the amount of 1,128,024,625 such that they are exercisable at
£0.001 (0.1p). Pursuant to the warrant repricing, Kibo received warrant
notices to exercise 284,524,625 Kibo warrants for which 284,524,625 ordinary
Kibo shares of €0.001 at a price of £0.001 (0.1p) will be issued.
· Kibo announced on 2 May 2023 that recent verification testing on
selected biomass types demonstrate that the selected biomass types not only
match but significantly outperforms conventional coal in many specification
categories used in industrial boilers. These verification results have shown
more favourable outcomes in terms of specifications compared to previous
tests.
· Kibo announced on 18 May 2023 that the potential to fuel its
legacy coal power plant projects with biofuel is being advanced alongside
renewed negotiations on a power purchase agreement with the Tanzanian
Government in relation to the Mbeya Power Project. Furthermore, Kibo announced
the establishment of a Joint Technical Committee with TANESCO to ensure the
key milestones, as set out in the MOU, are met.
· Kibo's subsidiary, MAST Energy Developments plc (MED) announced
on 18 May 2023 that it has recently concluded a Heads of Terms ('HoT') with
regard to a new Joint Venture ('JV') agreement between MED and a new
institutional investor-led consortium (the 'Institutional Investor'). Under
the HoT, it is envisaged that the Institutional Investor will inject all
required investment capital into the JV with an expected total investment
value of c. £33.6m, with no funding contribution required from MED.
· The Group continues to focus on its revised renewable energy
strategy in order to align with global requirements.
This announcement contains inside information as stipulated under the Market
Abuse Regulations (EU) no. 596/2014 ("MAR"). For further information please
visit www.kibo.energy (http://www.kibo.energy/) or contact:
Louis Coetzee info@kibo (mailto:info@kibo) .energy Kibo Energy PLC Chief Executive Officer
Andreas Lianos +357 99 53 1107 River Group JSE Corporate and Designated
Adviser
Claire Noyce +44 (0) 20 3764 2341 Hybridan LLP Joint Broker
Damon Heath +44 207 186 9952 Shard Capital Partners LLP Joint Broker
James Biddle +44 207 628 3396 Beaumont Cornish Nominated Adviser
Roland Cornish Limited
Zainab Slemang van Rijmenant zainab@lifacommunications.com Lifa Communications Investor and Media Relations
Consultant
CHAIRMAN'S REPORT
I am pleased to provide a review of Kibo Energy PLC ("Kibo" or the "Company")
and its subsidiaries' (together with Kibo, the "Group") activities for the
2022 FY reporting period and to present our full-year audited accounts for
2022.
Kibo, still a relatively newcomer to the sustainable clean and renewable
energy sector, has made significant progress in waste-to-energy, biofuel,
reserve power, and battery storage projects. Despite significant market
challenges, Kibo remains resilient, focused and committed to its goals. The
Company has successfully transitioned into a clean / renewable energy company
and has acquired a strong project portfolio in the UK and Southern Africa.
To provide context, I will offer a concise summary of the year's activities
outlined in more detail elsewhere in this annual report:
· Joint venture with IGES converts un-recyclable plastic into syngas,
secures power purchase agreement for waste-to-energy facility;
· Kibo acquires Shankley Biogas Limited and invests in Mast Energy
Developments PLC for waste-to-energy and reserve energy projects;
· Initiates work program to establish the viability of substituting
coal with biofuel in thermal power plants and renews MoU with Tanzanian
Government for the Mbeya Power Project;
· Entered Long Duration Energy Storage sector through strategic
agreement with Enerox GmbH and establishes joint venture with National
Broadband Solution (Pty) Ltd; and
· New appointments made to the board, retirements of long-serving
directors.
Kibo is pioneering the energy landscape in its approach to the Company's
strategic shift towards sustainable and renewable assets. Through
groundbreaking ventures and partnerships, we are driving advancements in
waste-to-energy, biofuel, reserve power, and long-duration battery storage.
With a forward - looking focus on innovation to address the challenges in
maintaining stable base load generation while transitioning to sustainable
renewable energy generation solutions, Kibo is contributing to a productive,
greener and brighter future.
In terms of International Financial Reporting Standards (IFRS), intangible
assets with an indefinite life must be tested for impairment on an annual
basis. The change in the Group's strategy during 2021 to move toward renewable
energies coupled with global divestments in fossil fuel assets, resulted
therein that the Group recognised impairment of £5,504,216 (2021:
£20,088,240) related to its coal assets. The result for the reporting period
amounted to a loss of £10,908,524 for the year ended 31 December 2022 (31
December 2021: £23,148,155) as detailed further in the Statement of Profit or
Loss and Other Comprehensive Income, and further details on financial
activities are detailed elsewhere in the Annual Report. The loss is primarily
due to the impairment of non-current assets, referred to above.
In closing, I would like to acknowledge the support of our shareholders and
all stakeholders as we continue with advancing our new project portfolio.
I would like to thank our Board, as well as management and staff, for their
continued support and commitment in advancing Kibo.
REVIEW OF ACTIVITIES
Introduction
During 2022, the Group demonstrated its firm commitment to transition the
Group into a sustainable renewable energy company, despite challenging
conditions. We solidified our position in sectors like Waste to Energy,
Biofuel, Reserve Power, and Renewable Energy Generation Long Duration Battery
Storage. Focusing on Southern Africa and the UK, our achievements have been
significant.
Operations
Sustineri Energy Joint Venture - Waste-to-Energy Project (South Africa)
Kibo and Industrial Green Energy Solutions (IGES) have formed Sustineri Energy
(Pty) Ltd, aiming to generate over 50 MW of electricity in South Africa
through waste-to-energy projects. Pyrolysis technology will convert
non-recyclable plastics into syngas.
· Kibo provides £560,000 financial support, including an equity
loan.
· First phase: phased construction of c. 8 MW Waste to Energy
facility in Gauteng.
· 20-year conditional Power Purchase Agreement secured for initial
2.7 MW phase.
· JV explores synthetic oil production for additional revenue and
profitability from the original project design. Viability assessments are
being conducted; a feasibility optimisation study is underway for oil
integration into original design.
· Kibo identifies additional waste-to-energy opportunities in pursuit
of c. 50 MW capacity.
· Lesedi Nuclear Services selected as strategic partner for EPC and
O&M.
Southport - Waste-to-Energy Project (UK)
Kibo has entered into a share purchase agreement to acquire Shankley Biogas
Limited, securing the rights to the Southport project-a 12 MW Waste to Energy
initiative near Liverpool, UK. The project aims to generate bio-methane, power
a 10 MW CHP plant, and a 2 MW battery storage facility. Shankley Biogas
Limited has secured a favourable conditional Power Purchase Agreement (PPA)
and Gas Purchase Agreement (GPA) with a reputable buyer. The project has
received full planning permission and has established grid and gas connection
points. Financial estimates demonstrate promising returns and value for the
project.
With reference to the qualified audit opinion on the Company's investment in
Shankley Biogas Limited, Kibo was unable to provide the auditor with
sufficient appropriate audit evidence about the carrying values of the
investment in Shankley and its associated assets and liabilities, as included
in the Group and Company Balance Sheet as at 31 December 2022. This is because
of a dispute with the vendor due to the vendor's inability to provide
sufficient and reliable financial information for Shankley Biogas Limited,
despite numerous requests in this regard, and the Company being unable to
agree an option to lease agreement in respect of the site with the vendor. The
Company is currently engaged in constructive negotiations to reach an amicable
resolve for the ongoing dispute and is confident that this will be settled
soon.
Legacy Coal Projects - Tanzania, Botswana and Mozambique and Biofuel
Initiative
Kibo is actively pursuing sustainable fuel sources for its energy projects in
Tanzania, Botswana, and Mozambique.
· Kibo aims to divest from coal assets while retaining energy
projects through innovative biofuel technology. Recent testing showed the
superior potential of biomass (bio coal) compared to conventional coal in
industrial boilers.
· The company has initiated a technical study to assess the
feasibility of replacing fossil fuels with renewable biofuel. In this regard,
Kibo has appointed an experienced international biomass and biofuel consultant
to evaluate the economic and operational feasibility of implementing bio coal
as a fuel replacement for utility-scale power projects.
· Kibo is in discussions with the Tanzanian government for the
Mbeya Power Project, aligning with the Tanzanian Power System Master Plan. A
renewed MOU with TANESCO outlines the framework for finalizing power purchase
and implementation agreements.
Long Duration Energy Storage
Kibo's CellCube Vanadium Redox Flow Battery Energy Storage Systems (VRFB BESS)
strengthens the Company's Southern Africa project development with durable,
long-duration energy storage for renewables, addressing key aspects such as
load shedding and grid stability.
· The partnership with Enerox GmbH secures qualified exclusive
rights to deploy VRFB Energy Storage Systems, advancing our commitment to
sustainable energy.
· Kibo's role as a project developer includes the prospective
manufacturing specific CellCube BESS, driving our clean energy solutions.
Investments
Mast Energy Developments PLC ("MED")
Since its IPO in April 2021, MAST Energy Developers (MED), in which Kibo holds
a 57.86% investment has been steadily advancing towards its goal of
establishing a portfolio of flexible power sites in the UK, aiming for a
capacity of up to 300 MW. MED's recent addition of the Hindlip Lane and
Stather Road projects, alongside existing gas peaker plants, brings them
closer to this target. The company's announcement of a heads of terms for a
Joint Venture Agreement, with a significant investor providing an investment
of c. £33.6 million, positions MED to accelerate project acquisition and
achieve their capacity goal within the next two years.
Further information on these projects and the latest MED updates can be found
on its website at www.med.energy (http://www.med.energy) .
Katoro Gold PLC - Mineral Exploration
During 2022, Kibo's 20.88% investment in Katoro Gold PLC yielded progressive
results in their projects in Tanzania and South Africa. While the planned
listing and IPO for the Blyvoor gold tailings joint venture was delayed,
Katoro is actively seeking funding options for its development. In Tanzania,
Katoro made progress with drilling phases in the Haneti Nickel-PGM Project and
reestablished a joint venture interest in the Imweru Gold Project,
restructuring the transaction with Lake Victoria Gold for the asset's
development.
Further information on the Katoro projects and the latest updates can be found
on its website at www.katorogold.com (http://www.katorogold.com) .
Corporate
In 2022, Kibo underwent financial and organizational changes, issuing shares
to settle invoices, fees, and debts.
· Share Issuance: Kibo issued 108,540,021 new ordinary shares at
various prices to settle invoices, implementation fees, and outstanding debts.
· Director and Management Changes: In a series of key transitions,
Christian Schaffalitzky and Chris Schutte retired, and Andreas Lianos resigned
from their director positions. Ajay Saldanha joined the Board in early 2023,
while Pieter Krügel took on the role of CEO at Mast Energy Developments PLC.
Cobus van der Merwe assumed the position of Kibo Group CFO, and Peter Oldacre
was appointed as the Group Business Development Executive. Shard Capital
Partners LLP became a joint broker alongside Hybridan LLP, and Beaumont
Cornish took over as the new Nomad. These changes aimed to fortify internal
management capacity and support strategic growth.
Despite Kibo's proven ability to secure ongoing funding, unexpected and
uncontrollable obstacles during Q4 2022 disrupted its annual funding plans,
causing a loss of time and moreover, business continuity.
· The Company faced an initial setback with the unexpected
resignation of the previous NOMAD, resulting in a mandatory suspension from
AIM and a pause in closing planned funding initiatives.
· Additionally, major shareholders faced voting challenges arising
from a technical problem within the Euroclear system preventing them from
voting from outside the EU jurisdiction during critically important
extraordinary general meetings.
· Despite the correction of, and recovery after the NOMAD and
Euroclear issues and the subsequent resumption of funding plans, this created
severe delays in securing funding, resulting in extensive operational
disruption and progressive execution. Nevertheless, the situation was
contained, and the company is back on track.
Kibo remains confident in its ability to adequately address its short and
medium terms funding requirements through various strategic partnerships and
creative funding solutions. Recent success in this regard is demonstrated by
the various initiatives set out below:
· Convertible Loan Note Redeemable Instrument (CLN): In January
2022, a CLN was issued to settle debts. The maturity date was extended
multiple times, with a final date set for April 28, 2023. Noteholders
converted £714,517 worth of Notes into 510,369,286 Kibo shares.
· Bridge Loan Facility: In February 2022, Kibo secured a bridge
loan facility of £1 million with an institutional investor. The loan carried
a fixed coupon interest rate of 3.5% and was originally due for repayment in
June 2022. To settle a facility implementation fee of £70,000, shares were
issued. The repayment date was extended to April 2023, and the investor gained
the right to trade Mast Energy Developments PLC shares worth up to £250,000,
offsetting the outstanding amount.
· Reprofiling Agreement: Kibo implemented a Reprofiling Agreement
on April 11, 2023, converting £1,113,980 of the bridge loan facility into a
24-month term loan. Additionally, Convertible Loan Notes were converted to
shares, warrants were repriced and exercised, and new warrants were awarded.
The agreement took effect on April 25, 2023, with the issuance of new warrants
and shares.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
All figures are stated in Sterling 31 December 2022 31 December
2021
Audited Audited
Notes £ £
Revenue 2 1,036,743 3,245
Cost of sales (778,802) (34,321)
Gross profit/(loss) 257,941 (31,076)
Administrative expenses (2,579,028) (2,325,750)
Impairment of non-current assets 11, 12 & 14 (7,038,930) (20,705,209)
Listing and capital raising fees (363,368) (321,365)
Project and exploration expenditure (847,567) (687,963)
Operating loss (10,570,952) (24,071,363)
Investment and other income 3 93,866 1,017,937
Share of loss from associate (181,684) (48,357)
Finance costs 4 (249,754) (46,372)
Loss before tax 5 (10,908,524) (23,148,155)
Taxation 8 - -
Loss for the period (10,908,524) (23,148,155)
Other comprehensive loss:
Items that may be classified subsequently to profit or loss:
Exchange differences on translation of foreign operations 372,191 (212,919)
Exchange differences reclassified on disposal of foreign operation - 345,217
Other Comprehensive loss for the period net of tax 372,191 132,298
Total comprehensive loss for the period (10,536,333) (23,015,857)
Loss for the period (10,908,524) (23,148,155)
Attributable to the owners of the parent (9,776,917) (21,996,968)
Attributable to the non-controlling interest (1,131,607) (1,151,187)
Total comprehensive loss for the period (10,536,333) (23,015,857)
Attributable to the owners of the parent (9,404,726) (21,864,515)
Attributable to the non-controlling interest (1,131,607) (1,151,342)
Loss Per Share
Basic loss per share 9 (0.003) (0.009)
Diluted loss per share 9 (0.003) (0.009)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
All figures are stated in Sterling 31 December 31 December
2022 2021
Audited Audited
Notes £ £
Assets
Non‑current assets
Property, plant and equipment 10 3,493,998 2,899,759
Intangible assets 11 2,691,893 4,964,550
Investments in associates 12 100,945 4,092,403
Total non-current assets 6,286,836 11,956,712
Current assets
Other receivables 15 227,223 255,747
Cash and cash equivalents 16 163,884 2,082,906
Total current assets 391,107 2,338,653
Total assets 6,677,943 14,295,365
Equity and liabilities
Equity
Called up share capital 17 21,140,481 21,042,444
Share premium account 17 45,516,081 45,429,328
Share based payments reserve 19 73,469 466,868
Translation reserves 20 (93,993) (466,184)
Retained deficit (66,319,142) (56,627,389)
Attributable to equity holders of the parent 316,896 9,845,067
Non-controlling interest 21 1,164,218 1,962,816
Total equity 1,481,114 11,807,883
Liabilities
Non-current liabilities
Lease liability 10 346,674 289,045
Other financial liabilities 23 243,056 -
Total non-current liabilities 589,730 289,045
Current liabilities
Lease liability 10 3,980 2,473
Trade and other payables 22 2,395,090 1,116,273
Borrowings 23 1,195,239 1,079,691
Other financial liabilities 23 1,012,790 -
Total current liabilities 4,607,099 2,198,437
Total liabilities 5,196,829 2,487,482
Total equity and liabilities 6,677,943 14,295,365
COMPANY STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
All figures are stated in Sterling 31 December 31 December
2022
2021
Audited Audited
Notes £ £
Revenue - -
Administrative expenses (804,820) (315,666)
Listing and capital raising fees (230,920) (39,583)
Impairment of subsidiary investments (12,333,224) (29,379,842)
Fair value adjustment (427,819) (1,635,881)
Operating loss (13,796,783) (31,370,972)
Other income 3 16,266 135,709
Finance costs 4 (151,375) -
Loss before tax 5 (13,931,892) (31,235,263)
Taxation - -
Loss for the period (13,931,892) (31,235,263)
All activities derive from continuing operations.
The Company has no recognised gains or losses other than those dealt with in
the Statement of Profit or Loss and Other Comprehensive Income.
COMPANY STATEMENT OF FINANCIAL POSITION
All figures are stated in Sterling 31 December 31 December
2022 2021
Audited Audited
Notes £ £
Non‑current Assets
Investments 24 5,688,607 16,762,761
Property, plant and equipment 10 1,265
Total non-current assets 5,689,872 16,762,761
Current assets
Other receivables 15 90,720 73,734
Cash and cash equivalents 16 19,442 239,674
Total current assets 110,162 313,408
Total assets 5,800,034 17,076,169
Equity and liabilities
Equity
Called up share capital 17 21,140,481 21,042,444
Share premium account 17 45,516,081 45,429,328
Share based payment reserve 19 73,469 466,868
Retained deficit (63,609,256) (50,095,537)
Total equity 3,120,775 16,843,103
Liabilities
Current liabilities
Trade and other payables 22 826,035 114,062
Borrowings 23 1,195,239 119,004
Other financial liabilities 23 657,985 -
Total current liabilities 2,679,259 233,066
Total liabilities 2,679,259 233,066
Total equity and liabilities 5,800,034 17,076,169
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share premium Warrants and share based payment reserve Control reserve Foreign currency translation reserve Retained deficit Non-controlling interest Total equity
Capital
All figures are stated in Sterling £ £ £ £ £ £ £ £
Balance as at 1 January 2021 20,411,493 44,312,371 1,728,487 (18,329) (598,637) (39,019,856) (256,841) 26,558,688
Loss for the year - - - - - (21,996,968) (1,151,187) (23,148,155)
Other comprehensive income - exchange differences - - - - (212,764) - (155) (212,919)
Shares issued 630,951 1,116,957 - - - - - 1,747,908
Disposal of subsidiary - - - - - 3,259,232 3,201,014 6,460,246
Acquisition of non-controlling interest - - - - - (308,030) 308,030 -
Vesting of share options - Katoro Gold PLC - - 146,249 - - - - 146,249
Warrants issued by Kibo Energy PLC - - 48,695 - - - - 48,695
Warrants issued by Kibo Energy plc which expired during the year - - (559,400) - - 559,400 - -
Change in shareholding without loss of control - - (897,163) 18,329 345,217 878,833 (138,045) 207,171
Balance as at 31 December 2021 21,042,444 45,429,328 466,868 - (466,184) (56,627,389) 1,962,816 11,807,883
Loss for the year - - - - - (9,776,917) (1,131,607) (10,908,524)
Other comprehensive income - exchange differences - - - - 372,191 - - 372,191
Change in shareholding without loss of control (333,009) 333,009 -
Shares issued 98,037 86,753 - - - - 184,790
Warrants issued by Kibo Energy PLC during the year - - 24,774 - - - - 24,774
Warrants issued by Kibo Energy PLC which expired during the year - - (418,173) - - 418,173 - -
Balance as at 31 December 2022 21,140,481 45,516,081 73,469 - (93,993) (66,319,142) 1,164,218 1,481,114
Notes 17 17 19 18 20 21
COMPANY STATEMENT OF FINANCIAL POSITION
Share capital Share premium Share based payment reserve Retained deficit Total equity
All figures are stated in Sterling £ £ £ £ £
Balance as at 1 January 2021 20,411,493 44,312,371 977,575 (19,419,674) 46,281,765
Profit the year - - - (31,235,263) (31,235,263)
Shares issued 630,951 1,116,957 - - 1,747,908
Shares issued to pay deferred vendor liability - - 48,693 - 48,693
- - (559,400) 559,400 -
Balance as at 31 December 2021 21,042,444 45,429,328 466,868 (50,095,537) 16,843,103
Loss for the year - - - (13,931,892) (13,931,892)
Shares issued 98,037 86,753 - - 184,790
Warrants issued by Kibo Energy PLC during the year - - 24,774 - 24,774
Warrants issued by Kibo Energy PLC which expired during the year - - (418,173) 418,173 -
Balance as at 31 December 2022 21,140,481 45,516,081 73,469 (63,609,256) 3,120,775
Notes 17 17 19
CONSOLIDATED STATEMENT OF CASH FLOWS
All figures are stated in Sterling 31 December 31 December
2022 2021
Audited Audited
Notes £ £
Cash flows from operating activities
Loss for the period before taxation (10,908,524) (23,148,155)
Adjustments for:
(Profit)/Loss from the disposal of subsidiary - (529,415)
Interest accrued 248,202 46,357
Debt forgiven 3 - (355,659)
Warrants and options issued 24,774 194,945
Impairment of goodwill 14 - 300,000
Impairment of intangible assets 11 3,229,155 13,955,528
Impairment of associates 12 3,809,775 6,449,681
Loss from equity accounted associate 181,684 48,357
Exploration and development expenditure on a Joint Operation - 91,179
Impairment of financial asset receivable - 43,722
Depreciation on property, plant and equipment 10 66,582 10,635
Profit on sale of property, plant and equipment (7,264) -
Gains on revaluations of derivatives (86,558) -
Costs settled through the issue of shares 95,001 -
Directors' fees settled with credit loan notes 44,591 -
Other non-cashflow items 133 -
(3,302,449) (2,892,825)
Movement in working capital
Decrease / (Increase) in debtors 15 28,524 (145,525)
Increase / (Decrease) in creditors 22 678,817 (240,958)
707,341 (386,483)
Net cash outflows from operating activities (2,595,108) (3,279,308)
Cash flows from financing activities
Proceeds of issue of share capital - 1,527,576
Proceeds from disposal of shares to non-controlling interest - 6,099,500
Repayment of lease liabilities (27,000) (27,000)
Repayment of borrowings (44,917) (195,282)
Proceeds from borrowings 2,322,824 38,975
Net cash proceeds from financing activities 2,250,907 7,443,769
Cash flows from investing activities
Cash received from /(advanced) to Joint Venture 20,955 (91,179)
Property, plant and equipment acquired (excluding right of use assets) (1,020,747) (1,654,239)
Intangible assets acquired (342,038) (150,273)
Cash forfeited on disposal of subsidiary - (272,075)
Deferred payment settlement (555,535) -
Net cash flows from investing activities (1,897,365) (2,167,766)
Net (decrease) / increase in cash (2,241,566) 1,996,695
Cash at beginning of period 2,082,906 256,760
Exchange movement 322,544 (170,549)
Cash at end of the period 16 163,884 2,082,906
COMPANY STATEMENT OF CASH FLOWS
All figures are stated in Sterling 31 December 31 December
2022 2021
Audited Audited
Notes £ £
Cash flows from operating activities
(Loss) for the period before taxation (13,931,892) (31,235,263)
Adjusted for:
Inter-company sales capitalised - (61,000)
Fair value adjustment 406,863 1,635,881
Warrants and options issued 24,774 48,693
Interest accrued 151,377 -
Non-cash recoveries of expenses - (114,253)
Impairment of investment in subsidiaries 12,354,180 29,379,842
Expenses settled in shares 95,001 -
Directors' fees settled with credit loan notes 44,591 -
Other non-cash items 134 -
(854,972) (346,100)
Movement in working capital
(Increase) / Decrease in debtors 15 (16,986) (40,314)
Increase / (Decrease) in creditors 22 111,973 (104,815)
94,987 (145,129)
Net cash outflows from operating activities (759,985) (491,229)
Cash flows from financing activities
Proceeds of issue of share capital 17 - 1,497,176
Proceeds from borrowings 23 1,672,824 -
Repayment of borrowings (44,917) (50,007)
Net cash proceeds from financing activities 1,627,907 1,447,169
Cash flows from investing activities
Cash advances to Group Companies (1,086,889) (858,054)
Purchase of Property, Plant and Equipment 10 (1,265) -
Net cash used in investing activities (1,088,154) (858,054)
Net (decrease)/increase in cash (220,232) 97,886
Cash at beginning of period 239,674 141,788
Cash at end of the period 16 19,442 239,674
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
1. Segment analysis
IFRS 8 requires an entity to report financial and descriptive information
about its reportable segments, which are operating segments or aggregations of
operating segments that meet specific criteria. Operating segments are
components of an entity about which separate financial information is
available that is evaluated regularly by the chief operating decision maker.
The Chief Executive Officer is the chief operating decision maker of the
Group.
Management currently identifies individual projects as operating segments.
These operating segments are monitored, and strategic decisions are made based
upon their individual nature, together with other non-financial data collated
from exploration activities. Principal activities for these operating segments
are as follows:
2022 Group Bordersley Power Mabasekwa Coal to Power Mbeya Coal Pyebridge Power Rochdale Power Sustineri Energy Corporate 31 December 2022 (£)
Group
Revenue - - - 1,036,743 - - - 1,036,743
Cost of sales - - - (778,802) - - - (778,802)
Administrative and other cost (46,064) (7,065) (7,186) (52,809) (10,763) (1,766) (2,453,375) (2,579,028)
Impairments and fair value adjustments (1,288,578) (3,563,639) (1,940,577) - - - (246,136) (7,038,930)
Listing and Capital raising fees - - - - - - (363,368) (363,368)
Project and exploration expenditure (222,296) - - (255,601) (104,090) (108,912) (156,668) (847,567)
Share in loss of associate - - - - - - (181,684) (181,684)
Investment and other income - - - - - 10 93,856 93,866
Finance costs (24,537) - - - - - (225,217) (249,754)
Loss before tax (1,581,475) (3,570,704) (1,947,763) (50,469) (114,853) (110,668) (3,532,592) (10,908,524)
2021 Group Benga Power J. V Blyvoor Joint Venture Bordersley Power Haneti Lake Victoria Gold Mabesekwa Coal to Power Mbeya Coal to Power Pyebridge Power Rochdale Power Sustineri Energy Corporate 31 December 2021 (£)
Group
Revenue - - - - - - - 3,245 - - - 3,245
Cost of sales - - - - - - - (34,321) - - - (34,321)
Administrative and other cost (26,682) (16,799) (332,550) (82,504) (141,098) (13,944) (43,967) (13,448) (4,641) (1,097) (1,649,020) (2,325,750)
Impairments and fair value adjustments - - (300,000) - - (6,132,711) (13,955,528) - - - (316,970) (20,705,209)
Listing and Capital raising fees - - - - - - - - - - (321,365) (321,365)
Project and exploration expenditure (74,337) (126,173) (24,878) (119,101) - - (100,165) (44,004) (11,265) (94,207) (93,833) (687,963)
Investment and other income 787 5,134 355,659 - 16,505 - 48,298 - - - 591,554 1,017,937
Loss before tax (100,232) (137,838) (301,769) (201,605) (124,593) (6,146,655) (14,051,362) (88,528) (15,906) (95,304) (1,884,363) (23,148,155)
2022 Group Bordersley Power Mabasekwa Coal to Power MbeyaCoal to Power Pyebridge Power Rochdale Power Sustineri Energy Corporate 31 December 2022 (£)
Group
Assets
Segment assets 1,733,554 235 - 2,082,352 262,043 293,160 2,306,599 6,677,943
Liabilities
Segment liabilities 296,984 7,270 2,320 133,650 6,897 48,491 4,701,217 5,196,829
2021 Group Benga Power J. V Bordersley Power Mabesekwa Coal to Power Mbeya Coal to Power Pyebridge Power Rochdale Power Sustineri Energy Corporate 31 December 2021 (£)
Group
Assets
Segment assets 14,219 3,085,261 3,405,354 1,944,925 2,491,666 261,454 278,985 2,813,501 14,295,365
Liabilities
Segment liabilities 10,065 394,588 5,577 52,379 70,847 5,570 18,976 1,929,480 2,487,482
Geographical segments
The Group operates in six principal geographical areas being Tanzania
(Exploration), Botswana (Exploration), Cyprus (Corporate), South Africa
(Renewable Energy), United Kingdom (Renewable Energy) and Ireland (Corporate).
Tanzania Botswana Cyprus South Africa United Kingdom Ireland 31 December 2022 (£)
Carrying value of segmented assets - - 218,735 293,160 5,564,783 601,265 6,677,943
Revenue - - - - 1,036,743 - 1,036,743
Loss before tax (1,947,763) (3,563,639) (1,517,557) (110,843) (2,732,982) (1,035,740) (10,908,524)
Tanzania Botswana Cyprus South Africa United Kingdom Ireland 31 December 2021 (£)
Carrying value of segmented assets 1,944,925 3,405,354 188,879 283,831 7,630,489 841,887 14,295,365
Revenue - - - - 3,245 - 3,245
Profit/ Loss after tax (14,211,842) (6,143,283) (1,008,539) (218,316) (1,827,534) 261,359 (23,148,155)
All revenue generated was from the United Kingdom geographical area with the
only customer being Statkraft Markets GMBH.
2. Revenue
31 December 2022 (£) 31 December 2021 (£)
Group Group
Electricity sales 1,036,743 3,245
1,036,743 3,245
Revenue comprised ancillary electricity sales from operational testing of the
renewable energy operations of MAST Energy Developments PLC in the United
Kingdom.
3. Investment and other Income
31 December 2022 31 December 2021 31 December 2022 31 December 2021
(£) (£) (£) (£)
Group Group Company Company
Debt forgiven - 355,659 - -
Interest received 44 - 34 -
Gain on revaluation of derivative liabilities 86,558 - - -
Profit on the loss of control over subsidiary - 529,415 - -
Profit on sale of plant and equipment 7,264 - - -
Recoveries - - 16,232 61,000
Other income - 132,863 - 74,709
93,866 1,017,937 16,266 135,709
During the financial year the Group recorded other income resulting from the
revaluation of derivative liabilities. These liabilities were recognised as
part of convertible loan notes entered into during the financial year. The
derivative liability was fair valued at year end and resulted in a gain for
the financial year.
4. Finance costs
31 December 2022 31 December 2021 31 December 2022 31 December 2021
(£) (£) (£) (£)
Group Group Company Company
Interest paid to finance houses 223,623 21,647 151,375 -
Interest from leases (refer note 10) 26,131 24,725 - -
249,754 46,372 151,375 -
5. Loss on ordinary activities before taxation
Operating loss is stated after the following key transactions: 31 December 31 December 2021 (£) 31 December 2022 (£) 31 December 2021 (£)
2022 (£) Group Company Company
Group
Depreciation of property, plant and equipment 66,582 10,635 - -
Impairment of other financial assets - receivable from Lake Victoria Gold - 16,240 - -
Group auditors' remuneration for audit of financial statements 58,425 45,000 58,425 -
Subsidiaries auditors' remuneration for audit of the financial statements 172,767 155,094 - -
Impairment of goodwill - 300,000 - -
Impairment of intangible assets 3,229,155 13,955,528 - -
Impairment of associates 3,809,774 6,449,682 - -
Impairment of subsidiary investments - - 12,354,180 29,379,842
Fair value adjustments - - 406,863 1,635,881
Gains on revaluations of derivatives (86,558) - - -
Profit on sale of assets (7,264) - - -
6. Staff costs (including Directors)
Group Group Company Company
31 December 2021 (£)
31 December 2022 (£) 31 December 2022 (£) 31 December 2021 (£)
Wages and salaries 949,355 898,145 28,297 27,415
Share based remuneration - 146,250 -
949,355 1,044,395 28,297 27,415
The average monthly number of employees (including executive Directors) during
the period was as follows:
Group Group Company Company
31 December 2021
31 December 2022 31 December 2022 31 December 2021
Exploration and development activities 10 10 1 1
Administration 7 7 1 1
17 17 2 2
7. Directors' emoluments
Group Group Company Company
31 December 2021 (£)
31 December 2022 (£) 31 December 2022 (£) 31 December 2021 (£)
Basic salary and fees accrued 374,308 397,262 24,366 27,415
Share based payments - - - -
374,308 397,262 24,366 27,415
The emoluments of the Chairman were £ 55,950 (2021: £ 47,578). The
emoluments of the highest paid director were £164,726 (2021: £129,347).
Directors received shares in the value of £Nil during the year (2021: £Nil)
and warrants to the value of £Nil (2021: £Nil) during the year.
Key management personnel consist only of the Directors. Details of share
options and interests in the Company's shares of each director are shown in
the Directors' report.
The following table summarises the remuneration applicable to each of the
individuals who held office as a director during the reporting period:
31 December 2022 Salary and fees accrued Salary and fees settled in shares Total
£ £ Warrants issued £
£
Christian Schaffalitzky 16,990 - - 16,990
Louis Coetzee 164,726 - - 164,726
Noel O'Keeffe 38,135 - - 38,135
Andreas Lianos 31,274 - - 31,274
Christiaan Schutte 123,183 - - 123,183
Total 374,308 - - 374,308
31 December 2021 Salary and fees accrued Salary and fees settled in shares Warrants issued Total
£ £ £ £
Christian Schaffalitzky 20,578 - - 20,578
Louis Coetzee 165,347 - - 165,347
Noel O'Keeffe 38,319 - - 38,319
Lukas Maree 7,349 - - 7,349
Wenzel Kerremans 7,349 - - 7,349
Andreas Lianos 36,050 - - 36,050
Christiaan Schutte 122,270 - - 122,270
Total 397,262 - - 397,262
As at 31 December 2022, an amount of £174,482 (2021: £443,336) was due and
payable to Directors for services rendered not yet settled.
8. Taxation
Current tax
31 December 2022 (£) 31 December 2021 (£)
Charge for the period in respect of corporate taxation - -
Total tax charge - -
The difference between the total current tax shown above and the amount
calculated by applying the standard rate
of corporation tax for various jurisdictions to the loss before tax is as
follows:
2022 (£) 2021 (£)
Loss on ordinary activities before tax (10,908,524) (23,148,155)
Income tax expense calculated at blended rate of 13.18% (2021: 18.86%) (1,437,917) (4,365,742)
Income which is not taxable (4,615) (100,589)
Expenses which are not deductible 913,814 3,959,520
Losses available for carry forward 528,718 506,811
Income tax expense recognised in the Statement of Profit or Loss - -
The effective tax rate used for the December 2022 and December 2021
reconciliations above is the corporate rate of 14.15% and 18.86% payable by
corporate entities on taxable profits under tax law in that jurisdiction
respectively. The tax jurisdictions in which the Group operates are Cyprus,
Ireland, South Africa, Tanzania and the United Kingdom.
No provision has been made for the 2022 deferred taxation as no taxable income
has been received to date, and the probability of future taxable income is
indicative of current market conditions which remain uncertain. At the
Statement of Financial Position date, the Directors estimate that the Group
has unused tax losses of £41,896,825 (2021: £38,201,734) available for
potential offset against future profits which equates to an estimated
potential deferred tax asset of £5,779,065 (2021: £5,076,208). No deferred
tax asset has been recognised due to the unpredictability of the future profit
streams. Losses may be carried forward indefinitely in accordance with the
applicable taxation regulations ruling within each of the above jurisdictions.
9. Loss per share
Basic loss per share
The basic loss and weighted average number of ordinary shares used for
calculation purposes comprise the following:
Basic Loss per share 31 December 2022(£) 31 December 2021 (£)
Loss for the period attributable to equity holders of the parent (9,776,917) (21,996,968)
Weighted average number of ordinary shares for the purposes of basic loss per 3,010,992,501 2,480,279,189
share
Basic loss per ordinary share (GBP) (0.003) (0.009)
As there are no instruments in issue which have a dilutive impact, the
dilutive loss per share is equal to the basic loss per share, and thus not
disclosed separately.
10. Property, plant and equipment
GROUP Land Furniture and Fittings Motor Vehicles Office Equipment I.T Equipment Plant & Machinery Right of use assets Total
Cost (£) (£) (£) (£) (£) (£) (£) (£)
Opening Cost as at 1 January 2021 - 2,436 16,131 4,970 4,989 8,601 - 37,127
Disposals - - - - - - - -
Additions 602,500 - - - 509 2,011,409 293,793 2,908,211
Exchange movements - 29 192 (28) (108) 102 - 187
Closing Cost as at 31 December 2021 602,500 2,465 16,323 4,942 5,390 2,020,112 293,793 2,945,525
Disposals - (2,465) - (3,383) (3,193) (5,642) - (14,683)
Additions - - - - 6,031 75,061 62,090 143,182
Assets under development - - - - - 939,664 - 939,664
Derecognition as a result of waiver - - - - - (421,041) - (421,041)
Exchange movement - - - - - 2,695 - 2,695
Closing Cost as at 31 December 2022 602,500 - 16,323 1,559 8,228 2,610,849 355,883 3,595,342
Land Furniture and Fittings Motor Vehicles Office Equipment I.T Equipment Plant & Machinery Right of use assets Total
Accumulated Depreciation ("Acc Depr") (£) (£) (£) (£) (£) (£) (£) (£)
Acc Depr as at 1 January 2021 - (2,436) (15,285) (4,398) (4,289) (8,601) - (35,009)
Disposals - - - - - - - -
Depreciation - - (842) - - - (9,793) (10,635)
Exchange movements - (29) (196) (9) 215 (103) - (122)
Acc Depr as at 31 December 2021 - (2,465) (16,323) (4,407) (4,074) (8,704) (9,793) (45,766)
Disposals - 2,465 - 3,383 3,193 1,974 - 11,015
Depreciation - (1,385) (52,632) (12,565) (66,582)
Exchange movements - - - - - (11) - (11)
Acc Depr as at 31 December 2022 - - (16,323) (1,024) (2,266) (59,373) (22,358) (101,344)
Furniture and Fittings Motor Vehicles Office Equipment I.T Equipment Plant & Machinery Right of use assets Total
Land
Carrying Value (£) (£) (£) (£) (£) (£) (£) (£)
Carrying value as at 31 December 2021 602,500 - - 535 1,316 2,011,408 284,000 2,899,759
Carrying value as at 31 December 2022 602,500 - - 535 5,962 2,551,476 333,525 3,493,998
COMPANY Land Furniture and Fittings Motor Vehicles Office Equipment I.T Equipment Plant & Machinery Right of use assets Total
Cost (£) (£) (£) (£) (£) (£) (£) (£)
Opening Cost as at 1 January 2021 - - - - - - - -
Closing Cost as at 31 December 2021 - - - - - - - -
Additions - - - - 1,265 - - 1,265
Closing Cost as at 31 December 2022 - - - - 1,265 - - 1,265
Land Furniture and Fittings Motor Vehicles Office Equipment I.T Equipment Plant & Machinery Right of use assets Total
Accumulated Depreciation ("Acc Depr") (£) (£) (£) (£) (£) (£) (£) (£)
Acc Depr as at 1 January 2021 - - - - - - - -
Acc Depr as at 31 December 2021 - - - - - - - -
Acc Depr as at 31 December 2022 - - - - - - - -
Furniture and Fittings Motor Vehicles Office Equipment I.T Equipment Plant & Machinery Right of use assets Total
Land
Carrying Value (£) (£) (£) (£) (£) (£) (£) (£)
Carrying value as at 31 December 2021 - - - - - - - -
Carrying value as at 31 December 2022 - - - - 1,265 - - 1,265
Right of use asset
The Group has one lease contract for land it shall utilise to construct a 5MW
gas-fuelled power generation plant. The land is located at Bordesley,
Liverpool St. Birmingham.
The land has a lease term of 20 years, with an option to extend for 10 years
which the Group has opted to include due to the highly likely nature of
extension as at the time of the original assessment.
The Group's obligations under its leases are secured by the lessor's title to
the leased assets. The Group's incremental borrowing rate ranges between 8.44%
and 10.38%.
The Group has valued its property, plant and equipment in line with its
directors' estimation of the Value in Use for those assets. Kindly refer to
note 11 for the key variables used in the estimation of the value thereof.
Right of use asset 31 December 2022 31 December 2021
(£)
(£)
Group Group
Set out below are the carrying amounts of right-of-use assets recognised and
the movements during the period:
Opening balance 284,000 -
Additions 62,090 293,793
Depreciation (12,565) (9,793)
Closing balance 333,525 284,000
Lease liability
Set out below are the carrying amounts of lease liabilities and the movements
during the period:
Opening balance 291,518 -
Additions 60,005 293,793
Interest 26,131 24,725
Repayment (27,000) (27,000)
Closing balance 350,654 291,518
Spilt of lease liability between current and non-current portions:
Non-current 346,674 289,045
Current 3,980 2,473
Total 350,654 291,518
Future minimum lease payments fall due as follows
- within 1 year 33,960 27,000
- later than 1 year but within 5 years 135,840 108,000
- later than 5 years 756,720 648,000
Subtotal 926,520 783,000
- Unearned future finance charges (575,866) (491,482)
Closing balance 350,654 291,518
A 100bp change in the Incremental Borrowing Rate ("IBR"), would result in a
£29,603 change in the Right of Use Asset, and corresponding Lease Liability
on inception date.
11. Intangible assets
Intangible assets consist of separately identifiable prospecting, exploration
and renewable energy assets in the form of licences, intellectual property or
rights acquired either through business combinations or through separate asset
acquisitions.
The following reconciliation serves to summarise the composition of intangible
assets as at period end:
ADV001 Hindlip Lane (£) ARL018 Stather Road (£) Bordersley Power (£) Mbeya Coal to Power Project (£) Rochdale Power Shankley Biogas (£) Sustineri Energy Total (£)
(£) (£)
Carrying value at 1 January 2021 - - 2,595,000 15,896,105 - - - 18,491,105
Impairments - - - (13,955,528) - - - (13,955,528)
Acquisition of Rochdale Power - - - - 150,273 - - 150,273
Acquisition of Sustineri Energy - - - - - - 278,700 278,700
Carrying value at 1 January 2022 - - 2,595,000 1,940,577 150,273 - 278,700 4,964,550
Impairments - - (1,288,578) (1,940,577) - - - (3,229,155)
Acquisition of ARL018 Stather Road - 91,482 - - - - - 91,482
Acquisition of ADV001 Hindlip Lane 247,506 - - - - - - 247,506
Acquisition of Shankley Biogas Ltd - - - - - 603,050 - 603,050
Exchange movements - - - - - - 14,460 14,460
Carrying value at 31 December 2022 247,506 91,482 1,306,422 - 150,273 603,050 293,160 2,691,893
Intangible assets attributable to prospecting or exploration activities with
an indefinite useful life are not amortised until such time that active mining
operations commence, which will result in the intangible asset being amortised
over the useful life of the relevant project.
Intangible assets attributable to renewable energy activities are amortised
once commercial production commences, over the remaining useful life of the
project, which is estimated to be between 20 to 30 years, depending on the
unique characteristics of each project.
Until such time as the underlying operations commence production, intangible
assets with an indefinite useful life are assessed for impairment on an annual
basis, against the recoverable value of the intangible asset, or earlier if an
indication of impairment exists.
One or more of the following facts or circumstances indicate that the Group
should test an intangible asset for impairment:
• the period for which the Group has the right to develop the
asset has expired during the period or will expire in the foreseeable future;
• substantial expenditure on the asset in future is neither
planned nor budgeted;
• sufficient data exists to indicate that, although a development
in the specific area is likely to proceed, the carrying amount of the
development asset is unlikely to be recovered in full from successful
development or by sale.
In assessing whether a write-down is required in the carrying value of a
potentially impaired intangible asset, the asset's carrying value is compared
with its recoverable amount.
The recoverable amount is the higher of the asset's fair value less costs to
sell and value in use.
The valuation techniques applicable to the valuation of the above mentioned
intangible assets comprise a combination of fair market values, discounted
cash flow projections and historic transaction prices.
The following key assumptions influence the measurement of the intangible
assets' recoverable amounts, through utilising the value in use calculation
performed:
• measurement of the available resources and reserves;
• currency fluctuations and exchange movements applicable to the
valuation model;
• commodity prices related to resources and reserve and
forward-looking statements;
• expected growth rates in respect of production capacity;
• cost of capital related to funding requirements;
• determination of the commercial viability period;
• applicable discounts rates, inflation and taxation implications;
• future operating expenditure related to the realisation of the
respective project assets; and
• co-operation of key project partners going forward.
The following key assumptions influence the measurement of the intangible
assets' recoverable amounts, through utilising the fair value calculation
performed:
• Determination of consideration receivable based on recently
completed transactions, considering the nature, location, size and
desirability of recently completed transactions, for similar assets.
A summary of each project and the impairment assessment performed for each of
the intangible assets are detailed below.
Mbeya Coal to Power Project
The Mbeya Coal to Power Project situated in the Mbeya region of Tanzania,
which comprises the Mbeya Coal Mine, a potential 1.5Mt p/a mining operation,
and the Mbeya Power Plant, a planned 300MW mine-mouth thermal power station.
The Mbeya Coal Mine has a defined 120.8 Mt NI 43-101 thermal coal resource.
The 300MW mouth-of-mine thermal power station has long term scalability with
the potential to become a 1000MW plant. The completed full Power Feasibility
Study highlighted an annual power output target of 1.8GW based on annual
average coal consumption of 1.5Mt.
Subsequent to the completion of a compulsory tender process through TANESCO on
the development of the Mbeya Coal to Power Project, the Group was informed
that its bid to secure a Power-Purchase Agreement was unsuccessful in February
2019. Further engagement with TANESCO has subsequently culminated in the
receipt of a formal notice from TANESCO during 2020 and inviting the Group to
develop the Mbeya Coal to Power Project for the export market and thereby
enabling the Company to engage with the African Power Pools regarding
potential off-take agreements.
Result of impairment review undertaken during the period
Status of the Term Sheet
The initial Term Sheet signed with interested parties for the Mbeya Coal Ltd
Mining Licenses is no longer valid. After conducting due diligence, the
interested parties discovered several factors that contribute to the reduced
commercial attractiveness and feasibility of the project. These factors
include the low quality of the coal and the significant challenges posed by
its grade and associated market related price, as well as the remote location
of the mining site (1000 km from Dar es Salaam or 600 km from Mtwara). The
absence of bulk coal handling facilities at nearby ports and the high
indicative transportation costs further undermines the project's viability.
Without a nearby off-taker, it is no longer feasible to design, construct, and
operate a mid-sized coal mine on the indicative Mbeya mining site.
The project's original intention was to exclusively supply coal to the
mine-mouth power station. However, Mbeya Power Ltd, the sister company of MCPP
(Mbeya Coal Power Project), has made the decision to align with its parent
company, Kibo Energy PLC, and not pursue coal-fired steam power. As a result,
there is no longer a need to supply coal exclusively to the power station.
In conclusion, the abandonment of coal-fired steam power by Mbeya Power Ltd,
along with the low-quality coal, remote location, lack of infrastructure, high
transportation costs, and unattractive coal price, has rendered the Mbeya Coal
Ltd Mining Licenses commercially unviable and infeasible.
Status of the Mining Licenses (Mining Licences Numbers ML 655-ML 661)
Mbeya Coal Ltd is a Tanzanian registered mining and exploration company that
was actively involved in the development of a 300MW integrated coal-to-power
project, aligned with the Tanzania Power System Master Plan. As part of the
Mbeya Coal to Power Project (MCPP), Mbeya Coal Ltd holds a portfolio of Coal
Prospecting Licences that led to the application and granting of the seven
above mentioned Mining Licenses. The coal mine intended for this project
serves as the sole fuel source for the 300MW power plant. Kibo Energy PLC, in
collaboration with TANESCO, has made a USD 20 million investment in the
development of the MCPP project.
Throughout the exploration and mining license application process, the Mining
Commission was duly informed that this project was an integrated coal-to-power
initiative, and that the commencement of mine development was contingent upon
signing relevant power agreements with TANESCO and the Government of Tanzania.
This understanding was officially acknowledged on multiple occasions.
The Mining Commission granted the aforementioned mining licenses on March 2,
2022, subject to the payment of annual rent fees. However, the investor
expressed reluctance to pay the annual rent until a new Memorandum of
Understanding (MoU) with TANESCO was signed to avoid incurring unnecessary
expenses amounting to approximately USD 210,000 annually. The Mining
Commission was notified of this situation, and they agreed to extend the
payment deadlines pending discussions and the eventual signing of a definitive
MoU with TANESCO.
On September 20, Mbeya Coal reported positive progress in discussions with
TANESCO and indicated that the signing of the MoU was imminent. They requested
another extension for the payment deadline until the MoU was either signed or
denied. On December 12, Mbeya Coal Ltd informed the Mining Commission that the
MoU with TANESCO had been signed on November 15, 2022. However, no responses
were received in relation to these official requests.
Subsequently, Mbeya Coal discovered that the status of the Mining License in
question had been changed online and replaced with a foreign Prospecting
License. Concerned about this development, Mbeya Coal made an urgent inquiry,
leading to the receipt of a letter from the Mining Commission dated December
28, 2022, stating that the Mining Licenses had been cancelled due to Mbeya
Coal's alleged failure to respond to a Default Notice issued on August 3,
2022.
Mbeya Coal promptly disputed the unilateral and unfair cancellation, asserting
that the Mining Commission had disregarded their various requests for
extensions and highlighting irregularities and potential illegality in the
commission's procedures. The matter was pursued vigorously with the Minerals
Department and Mining Commission and eventually escalated to the office of the
Prime Minister of Tanzania. (The latter was acknowledged by the PM's office)
As of now, the unjust cancellation of the mining licenses by Mbeya Coal Ltd
remains in dispute and unresolved, and Mbeya Coal Ltd is still awaiting a
response from the Principal Secretary for Energy's office.
An independent consultant was appointed who is actively engaging the Mining
Commission in following up this matter.
Resultingly, we estimated the recoverable amount of Kibo's Coal Assets to be
£Nil, due to there being no viable offer at present for the acquisition of
the mining licences coupled with the fact that the licences have been revoked
and currently under dispute.
During the year, the intangible asset was by impaired by £1,940,577 to £Nil.
Bordersley - 2019
MAST Energy PLC initially acquired an indirect 100% equity interest in
shovel-ready reserve power generation project, Bordersley, which will comprise
a 5MW gas-fuelled power generation plant for the consideration of £175,000
settled through the issue of shares.
Thereafter, MAST acquired all of St Anderton's direct and indirect interests
(Royalty Agreements) in the Bordersley power project described above giving it
a 100% economic and 100% equity interest in Bordersley (the 'Acquisition').
Consideration for the Acquisition consists of the allotment and issue of
46,067,206 ordinary shares in the capital of MAST to St Anderton at an issue
price of £0.0525 per share and payable in five tranches ('Consideration
Shares') such that the full consideration is only payable in the event that
Bordersley is progressively de-risked.
As there were no separately identifiable assets and/or liabilities acquired,
the purchase price was allocated toward the Intellectual Property acquired, in
the amount of £2,595,000.
During the year, the intangible asset was measured at its value in use value
and found to be impaired in the amount of £1,288,578. The discount rate
applicable to the value in use assessment was 13.54%.
Pyebridge Power Ltd - 2021
Sloane Developments (Sloane) acquired a 100% equity interest in Pyebridge
Power Limited ("Pyebridge") for £2,500,000 in cash which is settled as
follows:
· An initial £1,485,500 to be paid in cash at completion date on
the 10th of August 2021;
· Repayment of the loan outstanding of £14,500 by Sloane to
Pyebridge;
· Deferred consideration of £1,000,000 to be paid in two tranches
8 months and 12 months respectively from the date of completion. During the
2022 financial year £421,041 of the deferred consideration was waived and the
cost price of the assets reduced by the same amount.
The acquisition of Pyebridge comprised of the following:
· An installed and commissioned synchronous gas-powered standby
generation facility; and
· The land on which the gas-powered facility stands.
The acquisition of land and gas-powered generation facility has been accounted
for as assets purchased at consolidated level, and not as a business
combination in accordance with IFRS 3. Therefore, the purchase price has been
allocated between land and the PPE based on their respective fair values as at
the date of acquisition, as disclosed in Note 10.
Rochdale Power Ltd - 2021
Sloane Developments (Sloane) acquired a 100% interest in Rochdale Power
Limited ("Rochdale"), from Balance Power Projects Limited, for the
installation of a 4.4 MW flexible gas power project in Dig Gate Lane,
Rochdale, OL 16 4NR.
The acquisition purchase price totals £239,523 of which the freehold site
amounts to £90,750 excluding VAT and the property rights amount to £150,273.
The acquisition purchase price is to be paid in cash. The freehold site
purchased is the property at Dig Gate Lane, Kingsway Business Park, Rochdale,
OL16 4NR.
The acquisition of land and gas-powered generation facility will be accounted
for as assets purchased at consolidated level, and not as a business
combination in accordance with IFRS 3. Therefore, the purchase price has been
allocated to the property, plant and equipment and intangible assets, as
disclosed in Note 10 and Note 11 respectively.
ADV 001 Ltd - 2022
Sloane Developments (Sloane) acquired a 100% interest in ADV 001 Limited
("Hindlip Lane"), from DKE Flexible Energy Limited, for the installation of a
7.5 MW gas-peaker plant in Buildings Farm, Hindlip Lane, Hindlip, Worcester,
WR3 8SB.
The acquisition purchase price totals £262,500 of which £88,817 is utilised
to settle a shareholder's loan of the same amount and the remainder of
£173,683 is allocated towards purchasing all issued shares of the business.
The acquisition purchase price was paid from a credit loan obtained from the
institutional investor. A further £10,694 was paid in cash by Mast Energy
Developments PLC ("MED") of which £8,020 is allocated to the purchase price
of Hindlip Lane.
The acquisition of land and gas-powered generation facility was accounted for
as an asset acquisition at consolidated level, and not as a business
combination in accordance with IFRS 3. Therefore, the purchase price has been
allocated to assets and liabilities acquired based on their respective fair
values as at the date of acquisition.
ARL 018 Ltd - 2022
Sloane Developments (Sloane) acquired a 100% interest in ARL 015 Limited
("Stather Road"), from DKE Flexible Energy Limited, for the installation of a
2.4 MW gas-peaker plant on Land lying on the south side of Stather Road,
Flixborough.
The acquisition purchase price totals £87,500 of which £54,882 is utilised
to settle a shareholder's loan of the same amount and the remainder of
£32,618 is allocated towards purchasing all issued shares of the business.
The acquisition purchase price is to be paid from a credit loan obtained from
the institutional investor. A further £10,694 was paid in cash by Mast Energy
Developments PLC ("MED") of which £2,673 is allocated to the purchase price
of Stather Road.
The acquisition of land and gas-powered generation facility was accounted for
as an asset acquisition at consolidated level, and not as a business
combination in accordance with IFRS 3. Therefore, the purchase price has been
allocated to assets and liabilities acquired based on their respective fair
values as at the date of acquisition.
Sustineri Energy - 2021
The Group, through its subsidiary Kibo Energy (Cyprus) Limited (KE), entered
into an agreement with Industrial Green Energy Solutions (Pty) Ltd (IGES)
whereby KE would acquire 65% equity stake in Sustineri Energy (Pty) Ltd
(Sustineri), with IGES, the technology (IP) and process owner, acquiring a 35%
stake. IGES would contribute IP in the amount of approximately £278,000
through an equity loan to Sustineri Energy (Pty) Ltd as contribution to the
incorporation of the entity, and KE would thereafter contribute resources in
the amount of £532,000 as part of its contribution. Thereafter Sustineri
would source debt and equity to develop its underlying projects.
IGES, on behalf of Sustineri Energy (Pty) Ltd, completed and filed the
necessary environmental approvals and was awarded a waste management license
by the DEFF on 4 March 2021 for the waste fired combined heat and power plant
to be installed at the Limeroc Business Park in Centurion, South Africa.
Shankley Biogas Ltd - 2022
The Group, entered into an agreement on 30 September 2022 with Richard Watts
whereby KE would acquire 100% equity stake in Shankley Biogas Limited
(Shankley) for a purchase consideration of £600,000 which was still due as at
31 December 2022.
The purchase consideration is to be settled partially in cash to the amount of
£250,000 and the remainder in shares with a value of £350,000. Based on the
agreement 198,637,911 ordinary shares will be issued at an exercise price of
£0.001762 per share. The date of settlement is undetermined at this stage but
is expected to be settled within 12 months after the financial year end.
The purchase of Shankley does not constitute a business in terms of IFRS 3:
Business Combinations and is treated as a purchase of assets and liabilities
at fair value at year end. Kibo invested in the project based on the project
location and technological rights attributable to specific project planning
and recognises an intangible asset of £603,050 therefore.
The intangible asset will remain at cost until such time as the project is
ready for use and output is generated.
Highlights of the project purchase is summarised as:
· Shankley Biogas Ltd has negotiated a Power Purchase Agreement
('PPA') and a Gas Purchase Agreement ('GPA') term sheet on favourable terms
with a blue-chip buyer.
· The Project has full planning permission as well as grid and gas
connection points already in place.
· Based on independent financial estimates, prepared by reputable
and appropriately accredited consulting firm, the projected valuation metrics
for the Project are summarised as follows:
o - Internal rate of return ('IRR') of c. 22.78%
o - Net Present Value (6%) ('NPV') of c. £47 million
o - Net Asset Value ('NAV') of c. £22 million
o - Projected average annual revenue of c. £24 million over a 25-year term.
o - Estimated Operating margin c. 38%
o - Capital estimated of c. £.35m
The major classes of assets acquired, and liabilities assumed are as follows:
Shankley Biogas Limited
(£)
Property, plant and equipment 939,664
Cash and cash equivalents 7,412
Accounts receivable 200
Accrued liabilities (950,326)
Net equity acquired (3,050)
A summary of the assessment performed for each of the renewable energy
intangible assets are detailed below.
Key estimation variables Rochdale Bordersley
Life of project 20 years 20 years
Weighted average cost of capital ("WACC") 13.54% 13.54%
Output 4.4MW 5.0MW
Average £/MW output £481,118 per MW output £423,384 per MW output
Debt/Equity ratio 58/42 58/42
Sensitivity analysis
Project delayed by 6 months £102,664 £89,079
250bps Increase/Decrease in WACC £800,806 £881,030
250bps Increase/Decrease in £/MW output £29,290 £40,868
Key estimation variables ADV001 ARL018
Life of project 20 years 20 years
Weighted average cost of capital ("WACC") 13.54% 13.54%
Output 7.5MW 2.4MW
Average £/MW output £436,463 per MW output £437,865 per MW output
Debt/Equity ratio 58/42 58/42
Sensitivity analysis
Projects delayed by 6 months £40,173 £10,601
250bps Increase/Decrease in WACC £946,375 £317,017
250bps Increase/Decrease in £/MW output £36,248 £12,399
Key estimation variables Sustineri Energy
Life of project 10 years
Weighted average cost of capital ("WACC") 13.37%
Output 2.7MW
Average £/MW output £15 to £20 per MW output
Debt/Equity ratio 75/25
Sensitivity analysis
Projects delayed by 6 months £258,665
250bps Increase/Decrease in WACC £82,784
250bps Increase/Decrease in £/MW output £166,726
The Group is exposed to significant market volatility in its estimate of the
weighted average cost of capital. The risk-free rate for the market in which
the Group operates was negatively affected during the financial year as a
direct result of the war between Russia and Ukraine.
The market interest rates have increased significantly year on year and the
weighted average cost of capital rose from +-6.2% in the previous year to
13.5% for the current financial year. This has resulted in impairments being
required for the investments and related property, plant and equipment.
Market indicators are predominantly showing an expected decrease in the
interest rates during the second half of the 2023 financial year. When these
indicators are compared to the sensitivity analysis the Group expects that a
high likelihood exists of impairment reversal in future when the market
interest rates start lowering.
The assessment of the value in use of the intangible assets resulted in an
impairment of £1,288,478 being recognised. The most significant contributor
to the impairment required was the increase of the weighted average cost of
capital due to increase in market interest rates.
The directors have performed further sensitivity analysis on the value in use
assessments for the four projects based in the UK and Sustinery based in South
Africa with the following variables being assessed:
Key estimation variables Reason for assessment Average change in value in use
Projects delayed by 6 months Projects are dependent on external funding and delay in funding may result in £501,182
delay in net cash inflows from the projects
250bps Increase/Decrease in WACC The market interest rates have been volatile during the financial year and due £3,028,012
to the above average interest rate increases an assessment of 250bps increase
or decrease was performed.
250bps Increase/Decrease in £/MW output The energy market has experienced above average increases during the financial £285,531
year and an assessment of 250bps increase or decrease was performed.
12. Investment in associates
Investment in associates consist of equity investments where the Group has an
equity interest between 20% and 50% and does not exercise control over the
investee.
The following reconciliation serves to summarise the composition of
investments in associates as at period end:
Katoro Gold PLC (£) Mabesekwa Coal Independent Power Project (£) Total (£)
Carrying value at 1 January 2021 - 9,696,351 9,696,351
Share of losses for the year (48,357) - (48,357)
Remaining equity interest following loss of control over investee 894,090 - 894,090
Impairment loss (316,969) (6,132,712) (6,449,681)
Carrying value at 1 January 2022 528,764 3,563,639 4,092,403
Share of losses for the year (181,684) - (181,684)
Impairment loss (246,135) (3,563,639) (3,809,774)
Carrying value at 31 December 2022 100,945 - 100,945
Mabesekwa Coal Independent Power Project
On 3 April 2018, the Group completed the acquisition of an 85% interest in the
Mabesekwa Coal Independent Power
Project, located in Botswana. The intangible asset was recognised at the fair
value of the consideration paid, which emanates from the fair value of the
equity instruments issued as at transaction date, being £9,376,312.
The Mabesekwa Coal Independent Power Project ("MCIPP") is located
approximately 40km east of the village of Tonata and approximately 50km
southeast of Francistown, Botswana's second largest city. Certain aspects of
the Project have been advanced previously by Sechaba Natural Resources Limited
("Sechaba"), including water and land use permits and environmental
certification. Mabesekwa consists of an in situ 777Mt Coal Resource. A
pre-feasibility study on a coal mine and a scoping study on a coal fired
thermal power plant has been completed. Kibo is in possession of a Competent
Persons Report on the project, which includes a SAMREC-compliant Maiden
Resource Statement on the excised 300 Mt portion of the Mabesekwa coal
deposit.
In September 2019, Kibo and Shumba Energy Limited ("Shumba") signed a binding
Heads of Agreement to reorganise the arrangements for the MCIPP and its
associated coal asset in Botswana. Under the reorganisation the MCIPP retained
assets will be consolidated back into KEB and Kibo's interest in KEB will be
reduced to 35% to maintain Kibo's look-through interest in the MCIPP resource
and make sundry adjustments to recognise Kibo's project expenditure. In
exchange for the increase in the equity interest held by Shumba, Shumba would
forego the previous claim it had against a portion of the MCIPP coal
resources, thereby increasing the value of the interest held by KEB.
The value of the remaining equity interest in Kibo Energy Botswana (Pty) Ltd
on initial recognition, was determined based on the fair value of the
proportionate equity interest retained in the in the enlarged resource
following the restructuring during 2019.
Result of impairment review undertaken during the period
The Group has decided to divest itself from these assets in line with the
Group direction change to renewable energy. As the Term Sheet upon which the
Mabasekwa Coal assets were based has expired, the project value was impaired
to £Nil during the year.
Summarised financial information of the associate is set out below:
Group (£) Group (£)
2022 2021
Non-Current assets - 7,824,447
Current assets - 866
Loss for the year (3,865,168) -
Kibo Energy Botswana (Pty) Ltd recognised no revenue during the year (2021:
Nil). No dividends were received during the year (2021: Nil). Kibo Energy
Botswana (Pty) Ltd's principal place of business is Plot 2780, Extension 9,
Gaborone, Botswana.
Katoro Gold PLC
On 30 September 2021, the Group lost the ability to exercise control over the
operations of Katoro Gold PLC and its subsidiaries (hereinafter referred to as
the "Katoro Group") following from the resignation of certain Kibo directors.
Following the loss of control, in accordance with IFRS 10, the assets,
liabilities, non-controlling interest and foreign currency translation
reserves attributable to the operations of the Katoro Group were derecognised,
with the remaining equity interest retained in the associate being recognised
at fair value, resulting in a loss on deemed disposal recognised through
profit or loss, as detailed below.
The value of the remaining equity interest in Katoro Gold PLC on initial
recognition as an associate, was determined based on the fair value of the
listed equities.
Summarised financial information of the associate is set out below:
Group (£) Group (£)
31 December 2022 31 December 2021
Non-current assets - 209,500
Current assets 65,936 876,658
Current liabilities (296,844) (163,732)
Loss for the year ended (1,066,616) (1,142,479)
Cash flow from operating activities (893,310) (915,880)
Cash flow from investing activities - (125,866)
Cash flows from financing activities 114,950 (1,771,925)
Katoro Gold PLC recognised no revenue during the year (2021: £Nil). No
dividends were received during the year (2021: £Nil). Kibo owns 96,138,738 of
Katoro's 460,412,593 issued shares or 20.88% of the issued shares at year end.
Katoro Gold PLC's principal place of business is the 6(th) Floor, 60
Gracechurch Street, London, EC4V OHR. Project specific information about
Katoro Gold PLC can be obtained from their website at katorogold.com.
13. Other financial assets
Group (£)
2022 2021
Other financial assets comprise of:
Lake Victoria Gold receivable - 657,061
Blyvoor Joint Venture receivable - 1,223,495
- 1,880,556
Impairment allowance for other financial assets receivable
Lake Victoria Gold receivable - (657,061)
Blyvoor Joint Venture receivable - (1,223,495)
- (1880,556)
Group (£)
Reconciliation of movement in other financial assets Blyvoor Joint Venture Lake Victoria Gold
Foreign exchange movement - 16,240
Further advance on the Blyvoor Joint Venture 63,158 -
Credit loss allowance recognised (63,158) (16,240)
Carrying value as at 31 December 2021 - -
Carrying value as at 31 December 2022 - -
14. Goodwill
MAST Energy Projects Limited - 2020
In the previous financial period, the Group acquired a 60% equity interest in
MAST Energy Project Limited, previously known as MAST Energy Development
Limited, for £300,000, settled through the issue of 5,714,286 ordinary shares
in Kibo effective on 19 October 2018. The acquisition of MAST Energy Projects
Limited falls within the ambit of IFRS 3: Business Combinations.
The net assets acquired were valued at Nil, with the resultant purchase price
being allocated to Goodwill on date of acquisition. Goodwill is assessed for
impairment on an annual basis, against the recoverable amount of underlying
Cash Generating Unit ("CGU"). The recoverable amount of the CGU is the higher
of its fair value less cost to sell and its value in use.
Because the underlying projects previously held by Mast Energy Projects
Limited have now been restructured into separate SPV's, controlled directly by
the intermediary holding company Sloane Developments Limited, there was no
prospective benefit from continued operations of Mast Energy Projects Limited
therefore the goodwill was impaired. The Company will cease operations in the
foreseeable future.
The goodwill carried forward from this transaction is £Nil after an
impairment of £300,000 in the previous financial year.
15. Other receivables
Group 2022 (£) Group Company Company
2021 (£)
2022 (£)
2021 (£)
Amounts falling due within one year:
Other debtors 227,223 255,747 90,720 73,734
227,223 255,747 90,720 73,734
The carrying value of current receivables approximates their fair value.
Trade and other receivables pledged as security
None of the above stated trade and other receivables were pledged as security
at period end. Credit quality of trade and other receivables that are neither
past due nor impaired can be assessed by reference to historical repayment
trends of the individual debtors.
16. Cash and cash equivalents
Group (£) Company (£)
Cash consists of: 2022 2021 2022 2021
Short term convertible cash reserves 163,884 2,082,906 19,442 239,674
163,884 2,082,906 19,442 239,674
Cash has not been ceded or placed as encumbrance toward any liabilities as at
year end.
17. Share capital - Group and Company
2022 2021
Authorised equity
5,000,000,000 Ordinary shares of €0.001 each €5,000,000 €5,000,000
1,000,000,000 deferred shares of €0.014 each €14,000,000 €14,000,000
3,000,000,000 deferred shares of €0.009 each €27,000,000 €27,000,000
€46,000,000 €46,000,000
Allotted, issued and fully paid shares
2022: 3,039,197,458 Ordinary shares of €0.001 each £1,934,599 -
2021: 2,930,657,437 Ordinary shares of €0.001 each - £1,836,562
1,291,394,535 Deferred shares of €0.009 each £9,257,075 £9,257,075
805,053,798 Deferred shares of €0.014 each £9,948,807 £9,948,807
£21,140,481 £21,042,444
Number of Shares Ordinary Share Capital Deferred Share Capital Share premium
(£)
(£)
(£)
Balance at 31 December 2020 2,221,640,835 1,205,611 19,205,882 44,312,371
Shares issued during the period 709,016,602 630,951 - 1,116,957
Balance at 31 December 2021 2,930,657,437 1,836,562 19,205,882 45,429,328
Shares issued during the period 108,540,021 98,036 - 86,753
Balance at 31 December 2022 3,039,197,458 1,934,598 19,205,882 45,516,081
All ordinary shares issued have the right to vote, right to receive dividends,
a copy of the annual report, and the right to transfer ownership.
The company issued the following ordinary shares during the period, with
regard to key transactions:
· 39,264,079 new Kibo Shares were issued on 16 February 2022 of
€0.001 each at a deemed issue price of £0.0017828 per share to an
Institutional Investor ("Investor") in settlement of £70,000 of facility
implementation fee pursuant to the Funding Facility Agreement signed between
the Investor and the Company in February 2022;
· 13,157,895 new Kibo Shares were issued on 16 February 2022 of
€0.001 each at a deemed issue price of £0.0019 per share to certain
providers of financial and technical services in settlement of £25,000 of
outstanding invoices;
· 56,118,047 new Kibo Shares were issued on 20 May 2022 of €0.001
each at a deemed issue price of £0.0016 per share to Sanderson Capital
Partners Limited in full and final settlement of £89,788.88 of the total
remaining outstanding amount owing pursuant to the Forward Payment Facility
18. Control reserve
The transaction with Opera Investments PLC in 2017 represented a disposal
without loss of control. Under IFRS this constitutes a transaction with equity
holders and as such is recognised through equity as opposed to recognising
goodwill. The control reserve represents the difference between the purchase
consideration and the book value of the net assets and liabilities acquired in
the transaction with Opera Investments. The control reserve balance as at the
year-end is Nil, following the loss of control over of Katoro Gold PLC
effective from 30 September 2021.
19. Share based payments reserve
The following reconciliation serves to summarise the composition of the
share-based payment reserves as at period end, which incorporates both
warrants and share options in issue for the Group:
Group (£) Company (£)
2022 2021 2022 2021
Opening balance of share-based payment reserve 466,868 1,728,487 466,868 977,575
Issue of share options and warrants 24,774 194,944 24,774 48,693
Expired warrants during the period (418,173) (559,400) (418,173) (559,400)
Loss of control over subsidiary - (897,163) - -
73,469 466,868 73,469 466,868
Share Options and Warrants detail
Share Options
Kibo and MAST Energy Developments PLC had no share options in issue throughout
the year
The following reconciliation serves to summarise the value attributable to the
share option reserve as at period end:
Group (£)
2022 2021
Opening balance of share-based payment reserve - 256,315
Issue of share options - 146,249
Loss of control over subsidiary - (402,564)
- -
The following reconciliation serves to summarise the quantity of share options
in issue as at period end:
Group
2022 2021
Opening balance - 32,244,781
Share options issued - -
Loss of control of subsidiary - (32,244,781)
- -
Warrants
The following reconciliation serves to summarise the value attributable to the
share-based payment reserve as at period end for the Company:
Company (£)
2022 2021
Opening balance of warrant reserve 466,868 977,575
Issue of warrants 24,774 48,693
Expired warrants (418,173) (559,400)
73,469 466,868
The following reconciliation serves to summarise the quantity of warrants in
issue as at period end:
Group Company
2022 2021 2022 2021
Opening balance 1,180,861,140 1,341,308,419 1,180,861,140 1,275,833,420
New warrants issued 168,274,625 430,000,000 168,274,625 430,000,000
Warrants exercised - (189,431,556) - (188,431,556)
Warrants expired (221,111,140) (340,740,724) (221,111,140) (336,540,724)
Decrease in warrants following loss of control over subsidiary - (60,274,999) - -
1,128,024,625 1,180,861,140 1,128,024,625 1,180,861,140
At 31 December 2022 the Group had no share options and 1,128,024,625 warrants
outstanding:
Warrants
Date of Grant Issue date Expiry date Exercise price Number granted Exercisable as at 31 December 2022
17 Sept 2020 17 Sept 2020 17 Sept 2023 0.4p 240,000,000 216,000,000
17 Sept 2020 17 Sept 2020 17 Sept 2023 0.25p 362,500,000 313,750,000
3 November 2021 3 November 2021 2 November 2023 0.4p 430,000,000 430,000,000
16 February 2022 16 February 2022 15 February 2025 0.023p 168,274,625 168,274,625
1,200,774,625 1,128,024,625
Total Contingently Issuable shares 1,200,774,625 1,128,024,625
Expenses settled through the issue of shares
The Group recognised the following expense related to equity settled
share-based payment transactions:
2022 (£) 2021 (£)
Geological expenditure settled 25,000 -
Listing and capital raising fees 159,790 -
Shares and warrants issued to directors and staff - 146,250
184,790 146,250
20. Translation reserves
The foreign exchange reserve relates to the foreign exchange effect of the
retranslation of the Group's overseas subsidiaries on consolidation into the
Group's financial statements, taking into account the financing provided to
subsidiary operations is seen as part of the Group's net investment in
subsidiaries.
Group
2022 2021
(£) (£)
Opening balance (466,184) (598,637)
Movement during the period 372,191 (212,764)
Disposal of subsidiary - 345,217
Closing balance (93,993) (466,184)
21. Non-controlling interest
The non-controlling interest brought forward relates to the minority equity
attributable to Sustineri Energy and Mast Energy Developments Plc. As at 31
December 2022, the Group's non-controlling interest comprises 42.14% equity
held in MAST Energy Development PLC (2021: 45%).
Group
2022 (£) 2021 (£)
Opening balance 1,962,816 (256,841)
Change of interest in subsidiary without loss of control 333,009 3,201,014
Acquisition of non-controlling interest - 308,030
Change in shareholding resulting in a loss of control - (138,045)
Comprehensive loss for the year allocated to non-controlling interest (1,131,607) (1,151,342)
Closing balance of non-controlling interest 1,164,218 1,962,816
The summarised financial information for significant subsidiaries in which the
non-controlling interest has an influence, namely MAST Energy Developments PLC
as at ended 31 December 2022, is presented below:
MAST Energy Development PLC
2022 (£)
Statement of Financial position
Total assets 4,617,505
Total liabilities 2,500,761
Statement of Profit and Loss
Revenue for the period 1,036,743
Loss for the period (2,733,000)
Statement of Cash Flow
Cash flows from operating activities (1,284,427)
Cash flows from investing activities (974,350)
Cash flows from financing activities 585,500
22. Trade and other payables
Group 2022 (£) Group 2021 (£) Company 2022 (£) Company 2021 (£)
Amounts falling due within one year:
Trade payables 680,722 1,116,273 159,009 114,062
Derivative liabilities (refer below) 20,386 - - -
Other payables 884,015 - - -
Accrued liabilities 809,967 - 667,026 -
2,395,090 1,116,273 826,035 114,062
Movements in derivative liabilities included in Trade and Other Payables:
Recognition of derivative liability derived from the convertible loan notes 106,944 - - -
Gain on fair value adjustment of derivative liability (86,558) - - -
20,386 - - -
The carrying value of current trade and other payables equals their fair value
due mainly to the short-term nature of these receivables.
Derivatives
The derivative liability is derived from the convertible credit note loans.
The convertible feature within the credit notes enables the noteholders to
convert into a fixed number of shares at the Fixed Premium Payment Price
(FPPP). This price does have variability, although the FPPP is set at the
Reference price, in the event that a share placing occurs 93,910 at below the
Reference price, the FPPP will be the share placing price ("round down"
feature). The conversion includes and embedded derivative, as its value moves
in relation the share price (through a placing price) and it is not related to
the underlying host instrument, the debt. The effect is that the embedded
derivative is accounted for separately at fair value.
23. Borrowings and other financial liabilities
Group 2022 (£) Group 2021 (£) Company 2022 (£) Company 2021 (£)
Amounts falling due within one year:
Short term loans 1,195,239 1,079,691 1,195,239 119,004
Other financial liabilities - Convertible loan notes 1,012,790 - 657,985 -
Amounts falling due between one year and five years:
Other financial liabilities - Convertible loan notes 243,056 - - -
2,451,085 1,079,691 1,853,224 119,004
Group 2022 (£) Group 2021 (£) Company 2022 (£) Company 2021 (£)
Reconciliation of borrowings and other financial liabilities:
Opening balance 1,079,691 858,546 119,004 344,391
Proceeds from convertible loans in MED 650,000 - - -
Proceeds from borrowings in Kibo 1,672,824 - 1,672,824 -
Recognition of derivative liability derived from the convertible loan (106,944) - - -
notes
Raised during the year - 978,038 - -
Repayment of deferred payment liability (555,535) (175,705) - (55,669)
Repayment of borrowings (44,917) - (44,917) -
Waiver of deferred payment liability (421,041) - - -
Debt forgiven - (355,659) - -
Loss of control over subsidiary - (77,434) - -
Interest raised 192,087 21,623 121,393 -
Costs incurred on borrowings 74,709 - 74,709 -
Settled through the issue of shares (89,789) (169,718) (89,789) (169,718)
Closing balance 2,451,085 1,079,691 1,853,224 119,004
Breakdown of borrowings and other financial liabilities:
Non-current 243,056 - - -
Current 2,208,029 1,079,691 1,853,224 119,004
Total 2,451,085 1,079,691 1,853,224 119,004
Deferred vendor liability
The deferred vendor liability was settled during the year by mutual agreement
between the seller of Pyebridge and MED PLC. The settlement took place
following agreed costs incurred by MED on behalf of the seller and the
eventual waiver of the remaining amounts due in the amount of £421,041.
The settlement was reached as a result of the seller not reaching certain
contractual milestones originally agreed to in the purchase agreement of
Pyebridge. The deferred payment liability for the purchase was linked to the
seller reaching these milestones.
The resulting waiver is treated as price adjustment to the underlying assets
for the Company and Group respectively as the fair value of the consideration
paid for the assets were reduced by the waiver.
Convertible loan notes
Short term loans relate to two unsecured loan facilities from the
institutional investor which are repayable either through the issue of
ordinary shares or payment of cash by the Company.
These facilities have repayment periods of 18 and 24 months respectively for
each drawdown from the facility. The facilities may be converted at the option
of the note holders once certain milestones have been met. At the financial
year end 31 December 2022, none of these milestones have been met and no
conversion may take place. The earliest conversion may occur during October
2023.
Institutional Investor
The Institutional Investor borrowing is a bridge loan facility agreement for
up to £3m with a term of up to 36 months. Funds advanced under the Facility
will attract a fixed coupon interest rate of 3.5% and will be repayable with
accrued interest on 23 July 2023
24. Investment in subsidiaries and associates
Breakdown of investments as at 31 December 2022
Associate undertakings (£) Subsidiary undertakings
(£)
Kibo Mining (Cyprus) Limited - 4,987,662
Katoro Gold PLC 100,945 -
Shankley Biogas Limited - 600,000
Total cost of investments 100,945 5,587,662
Breakdown of investments as at 31 December 2021
Associate undertakings (£) Subsidiary undertakings
(£)
Kibo Mining (Cyprus) Limited - 16,233,997
Katoro Gold PLC 528,764 -
Total cost of investments 528,764 16,233,997
Investments at Cost
At 1 January 2021 - 46,664,160
Additions in Kibo Mining Cyprus Limited - 1,114,324
Impairment of the subsidiaries - (29,379,842)
Derecognition of subsidiary and recognition of associate 2,164,645 (2,164,645)
Fair value adjustment of Katoro Gold PLC (1,635,881) -
At 31 December 2021 (£) 528,764 16,233,997
Additions in Kibo Mining Cyprus Limited - 1,086,889
Purchase of Shankley Biogas Limited (refer note 11) - 600,000
Impairment of subsidiaries - (12,333,224)
Fair value adjustment of Katoro Gold PLC (427,819) -
At 31 December 2022 (£) 100,945 5,587,662
The impairment in Katoro Gold PLC is due to the significant decline in the
share price, which results in the recoverable amount of the investment in
Katoro Gold PLC decreasing considerably in 2022.
At 31 December 2022 the Company had the following undertakings:
Subsidiary, associate, Joint Ops Interest Interest
Description Activity Incorporated in held (2022) held (2021)
Directly held investments
Kibo Mining (Cyprus) Limited Subsidiary Treasury Function Cyprus 100% 100%
Katoro Gold PLC Associate Mineral Exploration United Kingdom 20.88% 20.88%
Indirectly held investments
MAST Energy Development PLC Subsidiary Power Generation United Kingdom 57.86% 55%
Sloane Developments Limited Subsidiary Holding Company United Kingdom 57.86% 55%
MAST Energy Projects Limited Subsidiary Power Generation United Kingdom 57.86% 55%
Bordersley Power Limited Subsidiary Power Generation United Kingdom 57.86% 55%
Rochdale Power Limited Subsidiary Power Generation United Kingdom 57.86% 55%
Pyebridge Power Limited Subsidiary Power Generation United Kingdom 57.86% 55%
Kibo Gold Limited Associate Holding Company Cyprus 20.88% 20.88%
Savannah Mining Limited Associate Mineral Exploration Tanzania 20.88% 20.88%
Kibo Nickel Limited Associate Holding Company Cyprus 20.88% 20.88%
Eagle Exploration Limited Associate Mineral Exploration Tanzania 20.88% 20.88%
Katoro (Cyprus) Limited Associate Mineral Exploration Cyprus 20.88% 20.88%
Katoro South Africa Limited Associate Mineral Exploration South Africa 20.88% 20.88%
Mbeya Holdings Limited Subsidiary Holding Company Cyprus 100% 100%
Mbeya Development Limited Subsidiary Holding Company Cyprus 100% 100%
Mbeya Mining Company Limited Subsidiary Holding Company Cyprus 100% 100%
Mbeya Coal Limited Subsidiary Mineral Exploration Tanzania 100% 100%
Rukwa Holding Limited Subsidiary Holding Company Cyprus 100% 100%
Mbeya Power Tanzania Limited Subsidiary Power Generation Tanzania 100% 100%
Kibo Mining South Africa (Pty) Ltd Subsidiary Treasury Function South Africa 100% 100%
Sustineri Energy (Pty) Ltd Subsidiary Renewable Energy South Africa 65% 65%
Kibo Exploration Limited Subsidiary Treasury Function Tanzania 100% 100%
Kibo MXS Limited Subsidiary Holding Company Cyprus 100% 100%
Mzuri Exploration Services Limited Investment Exploration Services Tanzania 4.78% 4.78%
Protocol Mining Limited Investment Exploration Services Tanzania 4.78% 4.78%
Jubilee Resources Limited Subsidiary Mineral Exploration Tanzania 100% 100%
Kibo Energy Botswana Limited Subsidiary Holding Company Cyprus 100% 100%
Kibo Energy Botswana (Pty) Ltd Associate Mineral Exploration Botswana 35% 35%
Kibo Energy Mozambique Limited Subsidiary Holding Company Cyprus 100% 100%
Pinewood Resources Limited Subsidiary Mineral Exploration Tanzania 100% 100%
BENGA Power Plant Limited Joint Venture Power Generation Tanzania 65% 65%
Makambako Resources Limited Subsidiary Mineral Exploration Tanzania 100% 100%
Shankley Biogas Limited Subsidiary Power Generation United Kingdom 100% -
The Group has applied the approach whereby loans to Group undertakings and
trade receivables from Group undertakings were capitalised to the cost of the
underlying investments. The capitalisation results in a decrease in the
exchange fluctuations between Group companies operating from various
locations.
25. Related parties
Related parties of the Group comprise subsidiaries, joint ventures,
significant shareholders, the Board of Directors and related parties in terms
of the listing requirements. Transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on
consolidation.
Board of Directors/ Key Management
Name Relationship (Directors of:)
A. Lianos River Group, Boudica Group and Namaqua Management Limited
Other entities over which directors/key management or their close family have
control or significant influence:
River Group River Group provide corporate advisory services and is the Company's
Designated Advisor.
Boudica Group provides secretarial services to the Group.
Boudica Group
St Anderton on Vaal Limited provides consulting services to the Group. The
St Anderton on Vaal Limited directors of St Anderton on Vaal Limited are also directors of Mast Energy
Developments PLC.
Kibo Mining PLC is a shareholder of the following companies and as such are
considered related parties:
Directly held investments: Kibo Mining (Cyprus) Limited
Katoro Gold PLC
Indirectly held investments: Kibo Gold Limited
Kibo Mining South Africa Proprietary Limited
Savannah Mining Limited
Kibo Nickel Limited
Katoro (Cyprus) Limited
Katoro South Africa Limited
Kibo Energy Botswana Limited
Kibo Energy Mozambique Limited
Eagle Exploration Mining Limited
Rukwa Holdings Limited
Mbeya Holdings Limited
Mbeya Development Company Limited
Mbeya Mining Company Limited
Mbeya Coal Limited
Mbeya Power Limited
Kibo Exploration Limited
Mbeya Power Tanzania Limited
Kibo MXS Limited
Kibo Energy Mozambique Limited
Pinewood Resources Limited
Makambako Resources Limited
Jubilee Resources Limited
Kibo Energy Botswana Limited
MAST Energy Developments PLC
MAST Energy Projects Limited
Sloane Developments Limited
Bordersley Power Limited
Rochdale Power Limited
Pyebridge Power Limited
Shankley Biogas Limited
During the year £23,176 was paid to Boudica Group for secretarial services.
26. Financial Instruments and Financial Risk Management
The Group and Company's principal financial instruments comprises trade
payables and borrowings. The main purpose of these financial instruments is to
provide finance for the Group and Company's operations. The Group has various
other financial assets and liabilities such as trade receivables and trade
payables, which arise directly from its operations.
It is and has been throughout the 2022 and 2021 financial period, the Group
and Company's policy not to undertake trading in derivatives. Any derivative
liabilities due are a result of agreements with the Group and Company's
suppliers or financiers under its primary business goals, i.e., financing and
development of renewable energy projects.
The main risks arising from the Group and Company's financial instruments are
foreign currency risk, credit risk, liquidity risk, interest rate risk and
capital risk. Management reviews and agrees policies for managing each of
these risks which are summarised below.
2022 (£) 2021 (£)
Financial instruments of the Group are: Loans and receivables Financial liabilities Loans and receivables Financial liabilities
Financial assets at amortised cost
Other receivables 227,223 - 255,747 -
Cash and cash equivalents 163,884 - 2,082,906 -
Financial liabilities at amortised cost
Trade and other payables - 2,374,704 - 1,116,273
Other financial liabilities 1,255,846 - -
Borrowings - 1,195,239 - 1,079,691
Financial liabilities at fair value
Trade payables - derivative liabilities - 20,386 - -
391,107 4,846,175 2,338,653 2,195,964
2022 (£) 2021 (£)
Financial instruments of the Company are: Loans and receivables Financial liabilities Loans and receivables Financial liabilities
Financial assets at amortised cost
Other receivables 90,720 - 73,734 -
Cash and cash equivalents 19,442 - 239,674 -
Financial liabilities at amortised cost
Trade and other payables - 826,035 - 114,062
Other financial liabilties - 657,985 - -
Borrowings - 1,195,239 - 119,004
110,162 2,679,259 313,408 233,066
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currencies
and exposures to exchange rate fluctuations therefore may arise. Exchange rate
exposures are managed by continuously reviewing exchange rate movements in the
relevant foreign currencies. The exposure to exchange rate fluctuations for
the Group/Company is limited to foreign currency translation of subsidiaries.
At the period ended 31 December 2022, the Group had no outstanding forward
exchange contracts.
Exchange rates used for conversion of foreign subsidiaries undertakings were:
2022 2021
EURO to GBP (Average) 0.8115 0.8595
EURO to GBP (Spot) 0.8866 0.8394
USD to GBP (Average) 0.8528 0.7281
USD to GBP (Spot) 0.8266 0.7412
ZAR to GBP (Average) 0.0496 0.0492
ZAR to GBP (Spot) 0.0486 0.0465
The executive management of the Group monitor the Group's exposure to the
concentration of fair value estimation risk on a monthly basis.
Group Sensitivity Analysis
As the Group/Company has no material monetary assets denominated in foreign
currencies, the impact associated with a change in the foreign exchange rates
is not expected to be material to the Group/Company.
Credit risk
Credit risk refers to the risk that a counter party will default on its
contractual obligations resulting in financial loss to the Group. As the Group
does not, as yet, have any significant sales to third parties, this risk is
limited.
The Group and Company's financial assets comprise receivables and cash and
cash equivalents. The credit risk on cash and cash equivalents is limited
because the counterparties are banks with high credit-ratings assigned by
international credit rating agencies. The Group and Company's exposure to
credit risk arise from default of its counterparty, with a maximum exposure
equal to the carrying amount of cash and cash equivalents in its consolidated
statement of financial position. Expected credit losses were not measured on a
collective basis. The various financial assets owed from group undertakings
were evaluated against the underlying asset value of the investee, taking into
account the value of the various projects undertaken during the period, thus
validating, as required the credit loss recognised in relation to amounts owed
by group undertakings.
The Group does not have any significant credit risk exposure to any single
counterparty or any Group of counterparties having similar characteristics.
The Group defines counterparties as having similar characteristics if they are
connected or related entities.
Financial assets exposed to credit risk at period end were as follows:
Financial instruments Group (£) Company (£)
2022 2021 2022 2021
Trade & other receivables 227,223 255,747 90,720 73,734
Cash 163,884 2,082,906 19,442 239,674
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of
Directors, which has built an appropriate liquidity risk management framework
for the management of the Group and Company's short, medium and long-term
funding and liquidity management requirements. The Group manages liquidity
risk by maintaining adequate reserves and by continuously monitoring forecast
and actual cash flows and matching the maturity profiles of financial assets
and liabilities. Cash forecasts are regularly produced to identify the
liquidity requirements of the Group.
The Group and Company's financial liabilities as at 31 December 2022 were all
payable on demand.
Group (£) Less than 1 year Greater than 1 year but within 5 years Greater than 5 years
At 31 December 2022
Trade and other payables 2,395,090 - -
Borrowings 1,195,239 - -
Lease liabilities 27,000 108,000 621,000
Other financial liabilities 1,012,790 243,056 -
At 31 December 2021
Trade and other payables 1,116,273 - -
Borrowings 1,079,691 - -
Lease liabilities 27,000 108,000 648,000
Company (£)
At 31 December 2022
Trade and other payables 826,035 - -
Borrowings 1,195,239 - -
Other financial liabilities 657,985
At 31 December 2021
Trade and other payables 114,062 - -
Borrowings 119,004 - -
Interest rate risk
The Group and Company's exposure to the risk of changes in market interest
rates relates primarily to the Group and Company's holdings of cash and
short-term deposits.
It is the Group and Company's policy as part of its management of the
budgetary process to place surplus funds on short term deposit in order to
maximise interest earned.
Group Sensitivity Analysis:
Currently no significant impact exists due to possible interest rate changes
on the Company's interest-bearing instruments.
Capital risk management
The Group manages its capital to ensure that entities in the Group will be
able to continue as a going concern while maximising the return to
stakeholders through the optimisation of the debt and equity balance.
The Group manages its capital structure and makes adjustments to it, in light
of changes in economic conditions. To maintain or adjust its capital
structure, the Group may adjust or issue new shares or raise debt. No changes
were made in the objectives, policies or processes during the period ended 31
December 2022.
The capital structure of the Group consists of equity attributable to equity
holders of the parent, comprising issued capital, reserves and retained losses
as disclosed in the consolidated statement of changes in equity.
Fair values
The carrying amount of the Group and Company's financial assets and financial
liabilities recognised at amortised cost in the financial statements
approximate their fair value.
Hedging
As at 31 December 2022, the Group had no outstanding contracts designated as
hedges.
27. Post Statement of Financial Position events
During January 2023, the Group appointed Beaumont Cornish Limited as Nominated
Advisor (NOMAD) following the resignation of RFC Ambrian Ltd. On the same day,
Ajay Dominic Saldanha was appointed to the board of directors as a
non-executive director.
On 25 January 2023 Kibo settled outstanding creditors by way of issuing
14,025,314 ordinary shares at 0.14 pence per share, of par value €0.001 each
(the "Settlement Shares") to a service provider in payment of an outstanding
invoice for value of £19,635.44.
The Group made a decision to potentially introduce an additional revenue
stream to its 2.7 MW plastic-to-syngas power plant (the 'Project'), which sits
within the 65%-owned Sustineri Energy (Pty) Ltd, following the Company's
previous announcement dated 14 February 2022. This potential new revenue
stream involves the production of synthetic oil from non-recyclable plastic
waste in addition to the production of electricity from syngas, which promises
significant added benefits to the Project.
A subsidiary of Kibo, MED, applied for and was successful in pre-qualification
to bid for two new CM contracts, being a T-1 and a T-4 CM contract. Following
the preparation of a robust CM Auction bid strategy, MED is pleased to
announce that pursuant to the recent Capacity Market Auctions and subsequent
results, its T-1 bid cleared at £60/kW/pa and, its T-4 bid cleared at an
unprecedented historic record price of £63/kW/pa.
Mr. Peter Oldacre was appointed as the new Group Business Development
Executive for the Kibo Group of companies ('KEGC' or the 'Group').
On 11 April 2023 received warrant exercise notices and loan conversion notices
for which new Kibo shares will be issued as follows:
Kibo Warrant Exercise
The Company has received warrant notices to exercise 284,524,625 Kibo warrants
for which 284,524,625 ordinary Kibo shares of €0.001 at a price of £0.001
(0.1p) will be issued (the "Warrant Shares"). The Warrant Shares include
168,274,625 shares to be issued to the Institutional Investor. Accordingly,
the Institutional Investor being RiverFort Global Opportunities PCC Ltd will
have a holding of 168,274,625 shares representing a 4.37% interest in the
Company. From the total Warrant proceeds of £284,524.63, £68,274.63 is being
retained by the Institutional Investor from its warrant exercise as a
reduction against the Outstanding Amount on the term loan facility (the
"Facility") under the terms of the agreed reprofiling terms of the Facility.
Issue of the Warrant Shares satisfies conditions precedent 2 and 3 for the
reprofiling of the Facility under the reprofiling agreement.
Kibo Convertible Loan Note Conversion
Accordingly, and further to the announcement of 11 April, Conversion notices
have now been received by the noteholders on Kibo's 7% Convertible Loan Note
Instrument dated 7 January 2022 (the 'Loan Notes'), to convert all principal
amounts and accrued interest to ordinary Kibo shares of €0.001 par value.
The total amount outstanding, including accrued interest on the Loan Notes, is
£714,517 which has been converted at a deemed price of 0.14p, resulting in
the issue of 510,369,286 new Kibo shares to the noteholders (the "Conversion
Shares"). The noteholders include certain directors and senior management of
the Company as further detailed below.
Issue of the Conversion Shares satisfied condition precedent 1 for the
reprofiling of the Facility under the reprofiling agreement.
The total amount of new Kibo shares (Warrant Shares and Conversion Shares)
issued is 794,893,911 (the "New Shares").
Kibo New Warrant Issue
The Company has also awarded 1,262,300,283 warrants to the Institutional
Investor (Institutional Investor Warrants) under the agreed reprofiling terms
of the Facility. This is calculated as being 100% of the Reprofiled Amount as
defined in the 11 April announcement divided by the Reference Price of
€0.001 and these warrants are exercisable half at a price of €0.001 per
Share and half at a price of €0.002 per Share. Following the Kibo Warrant
Exercise and the Kibo New Warrant Issue there will be 2,105,800,283 warrants
outstanding in the Company (issued and unexpired).
Reprofiling of Facility becomes Effective.
As conditions precedent 1 to 3 for the reprofiling of the Facility under the
reprofiling agreement have now been met, the debt reprofiling is now
effective.
On 4 May 2023 the Group Company has requested that 116,250,000 of the shares
it has applied for to be admitted for trading on AIM and the JSE, in its 26
April 2023 announcement, be deferred from being issued and admitted for
trading, until full payment for the corresponding warrants, for which prior
irrevocable exercise notices have been submitted, has been received.
Accordingly, the Company has issued 168,274,625 Ordinary Shares to RiverFort
Global Opportunities PCC Ltd in respect of the warrant exercise announced on
26 April 2023 for which trading on AIM and the JSE is expected on 5 May 2023
and for which full payment has been received by the Company from RiverFort
Global Opportunities PCC Ltd ("Admission").
On 26 May 2023 the Group announced that 48,000,000 shares of the 116,250,00 it
had deferred from being issued and admitted to AIM have now been allotted
following receipt of warrant exercise funds in respect of a warrant exercise
notice already received. The warrant exercise notice relates to exercise of
48,000,000 Kibo warrants for which 48,000,000 ordinary Kibo shares of €0.001
at a price of £0.001 (0.1p) will now be issued (the "Warrant Shares"). Total
warrant exercise funds in respect of this warrant exercise received by the
Company are £48,000.
Total Voting Rights
Application will be made for the Warrant Shares to be admitted to trading on
AIM and the JSE AltX markets. Trading in the Warrant Shares is expected to
commence on AIM and the JSE on or around 2 June 2023 ('Admission'). Following
Admission, the Company will have 3,779,866,683 shares in issue and the
foregoing figure may be used by shareholders as the denominator for the
calculations to determine if they are required to notify their interest in, or
a change to their interest in, the Company under the FCA's Disclosure Guidance
and Transparency Rules.
28. Commitments and Contingencies
Benga Power Project
Kibo entered into a Joint Venture Agreement (the 'Benga Power Joint Venture'
or 'JV') with Mozambique energy company Termoeléctrica de Benga S.A. to
participate in the further assessment and potential development of the Benga
Independent Power Project ('BIPP').
In order to maintain its initial participation interest Kibo is required to
ensure funding of a maximum amount of £1 million towards the completion of a
Definitive Feasibility Study, however this expenditure is still discretionary.
Other than the commitments and contingencies noted above, the Group does not
have identifiable material commitments and contingencies as at the reporting
date. Any contingent rental is expensed in the period in which it incurred.
Annexure 1: Headline Earning Per Share
Headline earnings per share (HEPS) is calculated using the weighted average
number of ordinary shares in issue during the period and is based on the
earnings attributable to ordinary shareholders, after excluding those items as
required by Circular 1/2022 issued by the South African Institute of Chartered
Accountants (SAICA).
Reconciliation of Headline earnings per share
Headline loss per share
Headline loss per share comprises the following:
Reconciliation of headline loss per share: 31 December 2022 (£) 31 December 2021 (£)
Loss for the period attributable to normal shareholders (9,776,917) (21,996,968)
Adjustments:
Profit on loss of control over of subsidiaries (529,415)
Profit on disposal of PPE (7,264) -
Impairment of goodwill 300,000
Impairment of intangible assets 3,229,155 13,955,528
Impairment of associates 3,809,774 6,449,681
Headline loss for the period attributable to normal shareholders (2,745,252) (1,821,174)
Headline loss per ordinary share (0.0009) (0.0007)
Weighted average number of shares in issue: 3,010,992,501 2,480,279,189
In order to accurately reflect the weighted average number of ordinary shares
for the purposes of basic earnings, dilutive earnings and headline earnings
per share as at year end, the weighted average number of ordinary shares was
adjusted retrospectively.
GENERAL INFORMATION
The financial information prepared using accounting policies consistent with
International Financial Reporting Standards ("IFRS") as adopted by the
European Union included in this preliminary statement does not constitute the
statutory financial statements for the purposes of Chapter 4 of part 6 of the
Companies Act 2014. Full statutory statements for the year ended 31
December 2022 prepared in accordance with IFRS, upon which the auditors have
given a qualified report, have not yet been filed with the Registrar of
Companies. Full financial statements for the year ended 31 December 2021
prepared in accordance with IFRS and containing an unqualified report, have
been filed with the Registrar of Companies.
Extracts of the Independent Auditor's Report are as follows:
'Qualified Opinion
We have audited the consolidated financial statements of Kibo Energy Plc ("the
Company") and its subsidiaries (the "Group") for the year ended 31 December
2022, which comprise the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, the Consolidated Statement of Financial Position, the
Company Statement of Profit or Loss and Other Comprehensive Income, the
Company Statement of Financial Position, the Consolidated Statement of Changes
in Equity, the Company Statement of Changes in Equity, the Consolidated
Statement of Cash Flows, the Company Statement of Cash Flows, the Summary of
Significant Accounting Policies and the related notes to the consolidated
financial statements. The financial reporting framework that has been applied
in their preparation is Irish Law and International Financial Reporting
Standards ("IFRSs"), as adopted by the EU.
In our opinion, except for the possible effects of the matter described in the
Basis of Qualified Opinion section of our report, the accompanying
consolidated financial statements:
· give a true and fair view of the consolidated financial position of
the Group as at 31 December 2022 and of the profit or loss and cash flows of
the Group for the year then ended;
· give a true and fair view of the financial position of the Company as
at 31 December 2022 and of the Company profit or loss and cash flows for the
year then ended;
· have been properly prepared in accordance with International
Financial Reporting Standards ("IFRSs"), as adopted by the EU; and
· have been properly prepared in accordance with the requirements of
the Companies Act 2014.
Basis for Qualified Opinion
The Group's investment in Shankley Biogas Limited, a company acquired under a
Share Purchase Agreement effective on 30 September 2022, is carried in the
Company Balance Sheet at cost at £600,000 and the Group Balance Sheet
includes an amount capitalised in Intangible Assets for Project Development
Rights of £603,050, development costs of £939,664 and associated current
liabilities of £950,326. The acquisition is also subject to ongoing disputes
between the seller and the Company. We were unable to obtain sufficient
appropriate audit evidence about the carrying value of the Company investment,
the Group Intangibles, the Group Development costs and associated liabilities
as at 31 December 2022 because management were unable to provide access to
sufficient and reliable financial information for Shankley Biogas Limited.
Consequently, we were unable to determine whether any adjustments to these
amounts were necessary.
We conducted our audit in accordance with International Standards on Auditing
(Ireland) ("ISAs (Ireland)"). Our responsibilities under those standards are
further described in the Auditor's Responsibilities for the Audit of the
Consolidated Financial Statements section of our report. We are independent of
the Group in accordance with the International Ethics Standards Board for
Accountants' Code of Ethics for Professional Accountants (IESBA Code), and we
have fulfilled our other ethical responsibilities in accordance with the IESBA
Code.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified opinion.
Material uncertainty relating to going concern
We draw attention to the Section headed Going Concern on page 25 of the
financial statements, which details the factors the Company has considered
when assessing the going concern position. As detailed in the relevant note on
pages 45 to 46, the uncertainty surrounding the availability of funds to
finance ongoing working capital requirements and the financing of commercial
projects of the Group through to the stage of cash generation indicates the
existence of a material uncertainty that may cast significant doubt on the
Group's ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
Our responsibilities with respect to Going Concern are described further the
Auditor's Responsibilities for the Audit of the Consolidated Financial
Statements section of this report while the directors' responsibilities are
described further in the Responsibilities of Management and Those Charged with
Governance for the Consolidated Financial Statements section.'
The Notes to the Accounts inter alia include the following:
Going Concern
The financial statements have been prepared on the going concern basis which
contemplates the continuity of normal business activities and the realisation
of assets and the settlement of liabilities in the normal course of business.
In performing the going concern assessment, the Board considered various
factors, including the availability of cash and cash equivalents; data
relating to working capital requirements for the foreseeable future;
cash-flows from operational commencement, available information about the
future, the possible outcomes of planned events, changes
in future conditions, the current global economic situation due to the ongoing
Ukraine conflict and the responses to such events and conditions that would be
available to the Board.
The Board has, inter alia, considered the following specific factors in
determining whether the Group is a going concern:
• The significant financial loss for the year amounting to
£10,908,524 (2021: £23,148,155);
• Cash and cash equivalents readily available to the Group in the
amount of £163,884 in order to pay its creditors and maturing liabilities in
the amount of £4,192,170 as and when they fall due and meet its operating
costs for the ensuing twelve months (2021: £2,082,906 and £2,198,437
respectively); and
• Whether the Group has available cash resources, or equivalent short
term funding opportunities in the foreseeable future, to deploy in developing
and growing existing operations or invest in new opportunities.
Following from the losses incurred in the current financial period, coupled
with the net current liability position the Group finds itself in as at
December 2022, these conditions, together with those mentioned above are
considered to indicate that a material uncertainty exists which may cast
significant doubt on the Group's ability to continue as a going concern.
This is largely attributable to the short-term liquidity position the Group
finds itself in as a result of the significant capital required to develop
projects that exceeds cash contributed to the group by the capital
contributors as well as insufficient revenue generated to cover overhead
costs. The Directors have evaluated the Groups liquidity requirements to
confirm whether the Group has adequate cash resources to continue as a going
concern for the foreseeable future, taking into account the net current
liability position, and consequently prepared a cash flow forecast covering a
period of 12 months from the date of these financial statements, concluding
that the Group would be able to continue its operations as a going concern.
In response to the net current liability position, to address future cash flow
requirements, detailed liquidity improvement initiatives have been identified
and are being pursued, with their implementation regularly monitored in order
to ensure the Group is able to alleviate the liquidity constraints in the
foreseeable future. Therefore, the ability of the Group to continue as a going
concern is dependent on the successful implementation or conclusion of the
below noted matters in order to address the liquidity risk the Group faces on
an ongoing basis:
• Successful conclusion of funding initiatives of the Group in
order to continue development of the underlying projects of the Group; and
• Successful completion of a joint venture agreement between MED
and an institutional investor to a value of. £33.6m for which a Heads of
Terms has already been agreed.
As the Board is confident it would be able to successfully implement the above
matters, it has adopted the going concern basis of accounting in preparing the
consolidated financial statements.
GENERAL INFORMATION
The financial information prepared using accounting policies consistent with
International Financial Reporting Standards ("IFRS") as adopted by the
European Union included in this preliminary statement does not constitute the
statutory financial statements for the purposes of Chapter 4 of part 6 of the
Companies Act 2014. Full statutory statements for the year ended 31
December 2022 prepared in accordance with IFRS, upon which the auditors have
given a qualified report, have not yet been filed with the Registrar of
Companies. Full financial statements for the year ended 31 December 2021
prepared in accordance with IFRS and containing an unqualified report, have
been filed with the Registrar of Companies.
Extracts of the Independent Auditor's Report are as follows:
'Qualified Opinion
We have audited the consolidated financial statements of Kibo Energy Plc ("the
Company") and its subsidiaries (the "Group") for the year ended 31 December
2022, which comprise the Consolidated Statement of Profit or Loss and Other
Comprehensive Income, the Consolidated Statement of Financial Position, the
Company Statement of Profit or Loss and Other Comprehensive Income, the
Company Statement of Financial Position, the Consolidated Statement of Changes
in Equity, the Company Statement of Changes in Equity, the Consolidated
Statement of Cash Flows, the Company Statement of Cash Flows, the Summary of
Significant Accounting Policies and the related notes to the consolidated
financial statements. The financial reporting framework that has been applied
in their preparation is Irish Law and International Financial Reporting
Standards ("IFRSs"), as adopted by the EU.
In our opinion, except for the possible effects of the matter described in the
Basis of Qualified Opinion section of our report, the accompanying
consolidated financial statements:
· give a true and fair view of the consolidated financial position of
the Group as at 31 December 2022 and of the profit or loss and cash flows of
the Group for the year then ended;
· give a true and fair view of the financial position of the Company as
at 31 December 2022 and of the Company profit or loss and cash flows for the
year then ended;
· have been properly prepared in accordance with International
Financial Reporting Standards ("IFRSs"), as adopted by the EU; and
· have been properly prepared in accordance with the requirements of
the Companies Act 2014.
Basis for Qualified Opinion
The Group's investment in Shankley Biogas Limited, a company acquired under a
Share Purchase Agreement effective on 30 September 2022, is carried in the
Company Balance Sheet at cost at £600,000 and the Group Balance Sheet
includes an amount capitalised in Intangible Assets for Project Development
Rights of £603,050, development costs of £939,664 and associated current
liabilities of £950,326. The acquisition is also subject to ongoing disputes
between the seller and the Company. We were unable to obtain sufficient
appropriate audit evidence about the carrying value of the Company investment,
the Group Intangibles, the Group Development costs and associated liabilities
as at 31 December 2022 because management were unable to provide access to
sufficient and reliable financial information for Shankley Biogas Limited.
Consequently, we were unable to determine whether any adjustments to these
amounts were necessary.
We conducted our audit in accordance with International Standards on Auditing
(Ireland) ("ISAs (Ireland)"). Our responsibilities under those standards are
further described in the Auditor's Responsibilities for the Audit of the
Consolidated Financial Statements section of our report. We are independent of
the Group in accordance with the International Ethics Standards Board for
Accountants' Code of Ethics for Professional Accountants (IESBA Code), and we
have fulfilled our other ethical responsibilities in accordance with the IESBA
Code.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified opinion.
Material uncertainty relating to going concern
We draw attention to the Section headed Going Concern on page 25 of the
financial statements, which details the factors the Company has considered
when assessing the going concern position. As detailed in the relevant note on
pages 45 to 46, the uncertainty surrounding the availability of funds to
finance ongoing working capital requirements and the financing of commercial
projects of the Group through to the stage of cash generation indicates the
existence of a material uncertainty that may cast significant doubt on the
Group's ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
Our responsibilities with respect to Going Concern are described further the
Auditor's Responsibilities for the Audit of the Consolidated Financial
Statements section of this report while the directors' responsibilities are
described further in the Responsibilities of Management and Those Charged with
Governance for the Consolidated Financial Statements section.'
The Notes to the Accounts inter alia include the following:
Going Concern
The financial statements have been prepared on the going concern basis which
contemplates the continuity of normal business activities and the realisation
of assets and the settlement of liabilities in the normal course of business.
In performing the going concern assessment, the Board considered various
factors, including the availability of cash and cash equivalents; data
relating to working capital requirements for the foreseeable future;
cash-flows from operational commencement, available information about the
future, the possible outcomes of planned events, changes
in future conditions, the current global economic situation due to the ongoing
Ukraine conflict and the responses to such events and conditions that would be
available to the Board.
The Board has, inter alia, considered the following specific factors in
determining whether the Group is a going concern:
• The significant financial loss for the year amounting to
£10,908,524 (2021: £23,148,155);
• Cash and cash equivalents readily available to the Group in the
amount of £163,884 in order to pay its creditors and maturing liabilities in
the amount of £4,192,170 as and when they fall due and meet its operating
costs for the ensuing twelve months (2021: £2,082,906 and £2,198,437
respectively); and
• Whether the Group has available cash resources, or equivalent short
term funding opportunities in the foreseeable future, to deploy in developing
and growing existing operations or invest in new opportunities.
Following from the losses incurred in the current financial period, coupled
with the net current liability position the Group finds itself in as at
December 2022, these conditions, together with those mentioned above are
considered to indicate that a material uncertainty exists which may cast
significant doubt on the Group's ability to continue as a going concern.
This is largely attributable to the short-term liquidity position the Group
finds itself in as a result of the significant capital required to develop
projects that exceeds cash contributed to the group by the capital
contributors as well as insufficient revenue generated to cover overhead
costs. The Directors have evaluated the Groups liquidity requirements to
confirm whether the Group has adequate cash resources to continue as a going
concern for the foreseeable future, taking into account the net current
liability position, and consequently prepared a cash flow forecast covering a
period of 12 months from the date of these financial statements, concluding
that the Group would be able to continue its operations as a going concern.
In response to the net current liability position, to address future cash flow
requirements, detailed liquidity improvement initiatives have been identified
and are being pursued, with their implementation regularly monitored in order
to ensure the Group is able to alleviate the liquidity constraints in the
foreseeable future. Therefore, the ability of the Group to continue as a going
concern is dependent on the successful implementation or conclusion of the
below noted matters in order to address the liquidity risk the Group faces on
an ongoing basis:
• Successful conclusion of funding initiatives of the Group in
order to continue development of the underlying projects of the Group; and
• Successful completion of a joint venture agreement between MED
and an institutional investor to a value of. £33.6m for which a Heads of
Terms has already been agreed.
As the Board is confident it would be able to successfully implement the above
matters, it has adopted the going concern basis of accounting in preparing the
consolidated financial statements.
**ENDS**
Johannesburg
29 June 2023
Corporate and Designated Adviser
River Group
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