TIDMKIBO
RNS Number : 7873X
Kibo Energy PLC
28 April 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: 7am; 28 April 2023
Kibo Energy PLC ('Kibo' or the 'Company')
Publication of Mast Energy Developments PLC Annual Report
Kibo Energy PLC (AIM: KIBO; AltX: KBO), the renewable
energy-focused development company, is pleased to announce the
publication of the 2022 Annual Report, including audited financial
statements, of its 57.86% held subsidiary, Mast Energy Developments
Plc ("MED").
The full text of the MED RNS release is shown below.
Mast Energy Developments Plc
Results for the year ended 31 December 2022
Dated 28 April 2023
MAST Energy Developments PLC ('MED' or the 'Company') the
UK-based multi-asset owner and operator in the rapidly growing
Flexible Energy market, is pleased to announce its audited results
for the year ended 31 December 2022. A condensed set of financial
statements accompanies this announcement below while the Company's
full Annual Report and Financial Statements (MED Audited Annual
Report and Financial Statements for the year ended 31 December
2022)can be found at the following link on the Company's website
Annual & Interim Reports - MAST Energy Developments
(med.energy) .
The Company's Notice of Annual General Meeting will be announced
separately in due course.
Overview of key events during the period up to the date of this
report
-- The Company's core activities during the first half of 2022
predominantly focused on the operational and technical optimisation
of the 9 MW Pyebridge project site. In March 2022, Pyebridge became
a fully operational gas-powered flexible power plant that has
delivered considerable returns, including outperforming the market
sales price by 88%.
-- The Company pre-qualified for two new Capacity Market
contract auctions for Pyebridge The T-1 contract, which is
scheduled to start on 01 October 2023, was secured at a clearing
price of GBP60.00/kW/annum. The T-4 contract, which is scheduled to
start on 01 October 2026, was secured at a clearing price of
GBP63.00/kW/annum.
-- Construction and development of its Bordesley project
continued while its 4.4 MW shovel-ready freehold site in the West
Midland ('Rochdale') is at an advanced stage of planning and
permitting.
-- Acquisition of two reserve power projects during period
comprising the 7.5 MW Hindlip Lane site and the 2.4 MW Stather Road
site. The acquisitions were funded through Credit Loan notes with
an institutional investor.
This announcement contains inside information for the purposes
of the UK version of the Market Abuse Regulation (EU No. 596/2014)
as it forms part of United Kingdom domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("UK MAR"). Upon the
publication of this announcement, this inside information is now
considered to be in the public domain.
DIRECTORS, OFFICERS AND PROFESSIONAL ADVISERS
BOARD OF DIRECTORS: Louis Lodewyk Coetzee (Non-Executive Chairman)
Pieter-Schalk Krügel (Chief Executive
Officer) (Appointed on 13 July 2022)
Paulus Fillippus ('Paul') Venter (Non-Executive
Director)
Dominic Traynor (Non-Executive Director)
REGISTERED OFFICE Salisbury House
AND
BUSINESS ADDRESS: London Wall
London
EC2M 5PS
COMPANY SECRETARY: Noel Flannan O'Keeffe
Salisbury House
London Wall
London
EC2M 5PS
PLACE OF INCORPORATION: England & Wales
AUDITORS: Crowe U.K. LLP
55 Ludgate Hill
London
EC4M 7JW
BROKERS: Clear Capital Markets Limited
12th Floor
Broadgate Tower - Office 1213
20 Primrose Street
London
EC2A 2EW
REGISTRAR: Link Group
Unit 10
Central Square
29 Wellington Street
Leeds
LS1 4DL
SOLICITORS: Druces LLP
Salisbury House
London Wall
London
EC2M 5PS
PRINCIPLE BANKERS: Barclays Bank PLC
1 Churchill Place
Canary Wharf
London E14 5HP
STOCK EXCHANGE London Stock Exchange: Main Market (Share
LISTING: code: MAST)
WEBSITE: www.med.energy
DATE OF INCORPORATION: 17 September 2020
REGISTERED NUMBER: 12886458
CHAIRMANS REPORT
I am pleased to provide a review of Mast Energy Developments PLC
('MED' or the 'Company') and its subsidiaries' (collectively, the
'Group') activities and audited financial statements for the year
ended 31 December 2022.
The last year has seen the aggressive pursuit of the Company's
business strategy to expand its operations in the flexible power
market in the United Kingdom, with the objective to reach a 300 MW
portfolio within 36-58 months by acquiring, developing and
operating multiple small-scale flexible power generation plants
across Great Britain. I am pleased to report that we remain
committed to this target, with the new Chief Executive of MED,
Pieter Krügel, who was appointed to the Company's Board on 13 July
2022 (see RNS date 20 May 2022), leading the charge for MED to
become a significant player in the sector. Already, Krügel has
achieved significant success with the acquisition of two more
sites, namely a 7.5 MW gas-powered standby generation facility
located in Worcester ('Hindlip') and a 2.4 MW gas-powered flexible
power plant located in Scunthorpe, Lincolnshire ('Stather'). The
addition of Hindlip and Stather brings the current MED portfolio in
production and development to five sites with a combined energy
generation capacity of c. 30 MW.
The Company's core activities during the first half of 2022
predominantly focused on the operational and technical optimisation
of the 9 MW Pyebridge project site ('Pyebridge'), located in
Derbyshire as well as further construction and development of the 5
MW Bordesley site ('Bordesley'), in Central Birmingham. In March
2022, Pyebridge became a fully operational gas-powered flexible
power plant that has delivered considerable returns, including
outperforming the market sales price by 88% and validating the
Company's strategy and ability to outperform the market (see RNSs
dated 19 October 2022 and 27 February 2023). This was despite the
fact that Great Britain experienced warmer than usual autumn months
that resulted in an oversupply of gas and a drop in the price of
gas. Additionally, renewable wind and solar energy generation
peaked during the same period, further lowering MED's earning
potential during October and November (a detailed overview can be
found in the Review of Operations section on page 5 of this
report).
As I noted in the Company's last Annual Report and Financial
Statements (see Audited Annual Report and Accounts for the year
ended 31 December 2021), a key aspect in the development of MED's
sites is the maximisation of revenues by participation in
government-approved power-balancing and standby reserve capacity
schemes, notably capacity market ('CM') contracts and
route-to-market contracts that optimise revenues from energy
generation. During the 2022/2023 CM bid window, MED applied for new
replacement CM contracts for Pyebridge and successfully achieved
pre-qualification and, pursuant to the recent Capacity Market
Auctions and subsequent results, cleared a T-1 bid at GBP60/kW/pa
and T-4 bid at an historic price of GBP63/kW/pa. Both CM contracts
will significantly enhance Pyebridge's revenue profile and
profitability.
Elsewhere, the Company continues construction and development of
its Bordesley project while its 4.4 MW shovel-ready freehold site
in the West Midland ('Rochdale') is at an advanced stage of
planning and permitting. The conclusion of the Bordesley site's EPC
contract optimisation with Clarke Energy resulted in an overall
financial feasibility of Bordesley when it was discovered that
replacing the currently planned 2 x 2.5 MW Jenbacher engines with 1
x 4.5 MW Jenbacher engine would improve engine-output efficiencies
as well as provide savings in capital construction costs. The
Company is now actively exploring Capex funding options to reach
financial close and steady-state production for Bordesley by the
end of Q4 2023.
The Company continues to source and conduct due diligence on
potential shovel-ready and operating sites that meet its investment
criteria, with several flexible-power site acquisition
opportunities currently under review. The financial performance of
Pyebridge in August 2022 has led the Company to believe that its
strategy and objectives are poised for further success and,
therefore, we continue to assess new funding opportunities to
ensure we are able to support our aggressive acquisition
strategy.
Furthermore, the effects of climate change as well as the
ongoing conflict in Ukraine are current events that will impact
energy prices, specifically gas prices, for the foreseeable future.
While we remain confident that our strategy remains sturdy and our
projects are financially robust for the 12 months following this
report, we will remain vigilant of environmental and socio-economic
changes as they occur and pivot our business approach
accordingly.
To conclude, I would like to thank our new CEO and his
management team for their ongoing commitment in support of the MED
business strategy. Their vivacity and drive towards achieving the
Company's strategic objectives has assisted the Company in reaching
new heights and I look forward to continue working alongside them
as we explore new opportunities and establish Mast Energy
Developments PLC as a worthy contender in the UK's growing flexible
power market.
Financial summary of the MAST Energy Developments PLC Group
The following information is included to highlight the financial
performance of the Group in its inaugural period of operations.
Description Year ended Fifteen (15) months
31 December 2022 ended
31 December 2021
Revenue 1,036,743 3,245
Cost of sales (778,802) (34,321)
----------------- --------------------
Administrative expenses (921,769) (767,151)
Listing and capital raising
fees (107,676) (352,061)
Project expenditure (661,079) (267,981)
Impairment (1,288,578) (300,000)
----------------- --------------------
Other income 86,558 355,659
Finance costs (98,397) (46,348)
----------------- --------------------
Loss for the period (2,733,000) (1,408,958)
The increase in the loss period-on-period, as disclosed in the
table above and in the statement of comprehensive income, is mainly
owing to the following reasons:
-- Revenue increased due to the electricity generated at the
Pyebridge site. This also directly resulted in the increase in cost
of sales.
-- Increase in administrative expenses due mainly to increased
professional, legal, audit, management and consulting services
rendered during the current period.
-- The decrease in listing costs due to the formal listing being
completed on 14 April 2021; current year costs relate to broker,
listing and registrar fees.
-- Increase in impairment of the property, plant and equipment
of Bordersley Power as a result of lower value in use.
-- Impairment of the Mast Energy Projects Limited's goodwill in
the prior financial period, following on from the acquisition of
the non-controlling interest on 14 April 2021. As the underlying
projects previously held by Mast Energy Projects Limited have been
restructured into separate SPVs, controlled directly by the
intermediary holding company Sloane Developments Limited, there was
no prospective benefit from continued operations of Mast Energy
Projects Limited and therefore the goodwill was impaired.
There have been no dividends declared or paid during the current
financial period (2021: GBP Nil).
REPONSIBILITY STATEMENT
We confirm to the best of our knowledge:
a) the condensed set of financial statements has been prepared
in accordance with IAS 34 'Interim Financial Reporting';
b) the Directors' Statement includes a fair review of the
information required by the Disclosure and Transparency Rule DTR
4.2.7R (indication of important events during the year); and
c) the Directors' Statement includes a fair review of the
information required by the Disclosure and Transparency Rule DTR
4.2.8R (disclosure of related party transactions and changes
therein); and
d) this report contains certain forward-looking statements with
respect to the operations, performance, and financial condition of
the Group. By their nature, these statements involve uncertainty
since future events and circumstances can cause results and
developments to differ materially from those anticipated.
The forward-looking statements reflect knowledge and information
available at the date of preparation of this financial report and
the Company undertakes no obligation to update these
forward-looking statements.
Nothing in this financial report should be construed as a profit
forecast.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Group
-----------------------------
Year ended Fifteen
31 December months ended
2022 31 December
2021
------------- --------------
Audited Audited
------------- --------------
Note GBP GBP
------------- --------------
Revenue 1,036,743 3,245
Cost of sales (778,802) (34,321)
------------- --------------
Gross profit/(loss) 257,941 (31,076)
Administrative expenses (921,769) (767,151)
Listing and other corporate fees (107,676) (352,061)
Project expenditure (661,079) (267,981)
Impairment 8 (1,288,578) (300,000)
------------- --------------
Operating loss (2,721,161) (1,718,269)
Other income 86,558 355,659
Finance costs (98,397) (46,348)
------------- --------------
Loss before tax (2,733,000) (1,408,958)
Taxation - -
------------- --------------
Loss for the period (2,733,000) (1,408,958)
Total comprehensive loss for the period (2,733,000) (1,408,958)
------------- --------------
Loss for the period (2,733,000) (1,408,958)
------------- --------------
Attributable to the owners of the parent (2,733,000) (1,312,243)
Attributable to the non-controlling interest - (96,715)
Total comprehensive loss for the period (2,733,000) (1,408,958)
------------- --------------
Attributable to the owners of the parent (2,733,000) (1,312,243)
Attributable to the non-controlling interest - (96,715)
Loss Per Share
Basic loss per share(pence) 6 (1.36) (0.80)
Diluted loss per share(pence) 6 (1.36) (0.80)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31
DECEMBER 2022
Group
--------------------------
31 December 31 December
2022 2021
------------ ------------
Audited Audited
------------ ------------
Note GBP GBP
------------ ------------
Assets
Non--Current Assets
Property, plant and equipment 7 2,552,837 2,897,909
Intangible assets 8 1,795,683 2,745,273
------------ ------------
Total non-current assets 4,348,520 5,643,182
------------ ------------
Current Assets
Other receivables 136,801 181,845
Cash and cash equivalents 132,184 1,805,461
------------ ------------
Total current assets 268,985 1,987,306
------------ ------------
Total Assets 4,617,505 7,630,488
============ ============
Equity and Liabilities
Equity
Called up share capital 10 217,453 188,717
Share premium account 10 12,653,607 11,682,343
Common control reserve 11 383,048 383,048
Non-controlling interest acquired 11 (4,065,586) (4,065,586)
Retained deficit (7,071,778) (4,338,778)
------------ ------------
Attributable to equity holders of the parent 2,116,744 3,849,744
Non-controlling interest - -
------------ --------------
Total Equity 2,116,744 3,849,744
------------ --------------
Liabilities
Non-current Liabilities
Lease liability 7 346,674 289,045
Other financial liabilities 13 243,056 -
------------ ------------
Total non-current liabilities 589,730 289,045
------------ ------------
Current Liabilities
Loans from related parties 12 1,231,535 2,269,035
Trade and other payables 300,325 259,505
Other financial liabilities 13 354,805 960,686
Lease liability 7 3,980 2,473
Derivative liability 13 20,386 -
------------ ------------
Total current liabilities 1,911,031 3,491,699
------------ ------------
Total Liabilities 2,500,761 3,780,744
------------ ------------
Total Equity and Liabilities 4,617,505 7,630,488
============ ============
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Share Common Capital Non-controlling Retained Non-controlling Total
Capital Premium Control Contribution interest deficit interest
Reserve Reserve acquired
-------- ----------- -------- ------------- ---------------- ------------ ---------------- ------------
GBP GBP GBP GBP GBP GBP GBP GBP
----------------- -------- ----------- -------- ------------- ---------------- ------------ ---------------- ------------
Balance at 31
December 2020 104,497 2,511,432 383,048 - - (2,999,449) (273,560) (274,032)
----------------- -------- ----------- -------- ------------- ---------------- ------------ ---------------- ------------
Total
comprehensive
loss for the
period - - - - - (1,031,299) (34,470) (1,065,769)
Shares issued on
listing 44,320 4,972,515 - - - - - 5,016,835
Expenditure
settled in
shares 2,983 169,727 - - - - - 172,710
Acquisition of
non-controlling
interest 36,917 4,028,669 - - (4,065,586) (308,030) 308,030 -
----------------- -------- ----------- -------- ------------- ---------------- ------------ ---------------- ------------
Balance at 31
December 2021 188,717 11,682,343 383,048 - (4,065,586) (4,338,778) - 3,849,744
----------------- -------- ----------- -------- ------------- ---------------- ------------ ---------------- ------------
Total
comprehensive
loss for the
period - - - (2,733,000) - (2,733,000)
Loan with
holding company
settled in
shares 28,736 971,264 - - - - - 1,000,000
----------------- -------- ----------- -------- ------------- ---------------- ------------ ---------------- ------------
Balance at 31
December 2022 217,453 12,653,607 383,048 - (4,065,586) (7,071,778) - 2,116,744
----------------- -------- ----------- -------- ------------- ---------------- ------------ ---------------- ------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
Group
-----------------------------
Year ended Fifteen
31 December months ended
2022 31 December
2021
------------- --------------
Audited Audited
------------- --------------
Notes GBP GBP
------------- --------------
Cash flows from operating activities
Loss for the period before taxation (2,733,000) (1,408,958)
Loss for the period from incorporation to
31 December 2020 - 343,189
Loss for the period before taxation (2,733,000) (1,065,769)
Adjustments for non-cash items:
Non-cash interest accrued 96,828 21,623
Depreciation 7 65,948 9,793
Impairment of intangible assets 8 1,288,578 300,000
Loan waiver - other income - (355,397)
Cost settled through the issue of shares - 172,710
Gain on revaluation of derivatives (86,558) -
Other non-cash items (2,085) 94,192
------------- --------------
(1,370,289) (822,848)
------------- --------------
Movement in working capital
Decrease/(increase) in debtors 45,043 (181,845)
Increase in creditors 40,819 244,999
------------- --------------
85,862 63,154
------------- --------------
Net cash outflows from operating activities (1,284,427) (759,694)
------------- --------------
Cash flows from investing activities
Property, plant and equipment acquired (79,827) (1,654,239)
Intangible assets acquired 11 (338,988) (150,271)
Deferred payment on Pyebridge paid 20 (555,535) -
------------- --------------
Net cash outflows from investing activities (974,350) (1,804,510)
------------- --------------
Cash flows from financing activities
Proceeds of issue of share capital - 5,016,835
Lease liability repaid 7 (27,000) (2,275)
Other financial liabilities (repaid)/received - (121,210)
Proceeds from Credit Letter Notes 13 650,000 -
Loans from related parties repaid 12 (37,500) (523,889)
------------- --------------
Net cash flows financing activities 585,500 4,369,461
------------- --------------
Net (decrease) / increase in cash and cash
equivalents (1,673,277) 1,805,257
Cash and cash equivalents at beginning of
period 1,805,461 204
------------- --------------
Cash and cash equivalents at end of the
period 132,184 1,805,461
------------- --------------
During the financial year the Group issued shares to its
shareholder Kibo Mining (Cyprus) Limited in lieu of partial
settlement of its loan account. The issued shares amounted to
GBP1,000,000.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED ANNUAL FINANCIAL
STATEMENTS
FOR THE YEARED 31 DECEMBER 2022
Note 1: General information
MAST Energy Developments PLC ('MAST' or 'MED' or the 'Company')
is incorporated in England & Wales as a public limited company.
The Company's registered office is located at 55 Ludgate Hill,
London, United Kingdom, EC4M 7JW.
The principal activity of MAST, through its subsidiaries
(together the 'Group'), is to acquire and develop a portfolio of
flexible power plants in the UK and become a multi-asset operator
in the rapidly growing Reserve Power market.
The Group has acquired two new sites which will comprise 7.5MW
and 2.4MW gas-fuelled power generation plants supported by a Grid
Connection Offer and a Gas Connection Offer.
Note 2: Statement of Preparation
The condensed consolidated financial statements are prepared on
the historical cost basis, unless otherwise stated. The Group's
accounting policies used in the preparation of these financial
statements are consistent with those used in the annual financial
statements for the year ended 31 December 2021 of the ultimate
holding Company, except for the adoption of new or amended
standards applicable from 1 January 2021, which had no material
impact on the financial statements of the Group.
The condensed consolidated financial statements of the Company
have been prepared in compliance with the framework concepts and
the measurement and recognition requirements of IAS 34, IFRS as
issued by the International Accounting Standards Board.
The condensed consolidated financial statements of the Group is
presented in Pounds Sterling, which is the functional and
presentation currency for the Group and its related
subsidiaries.
The condensed consolidated financial statements do not represent
statutory accounts within the meaning of section 435 of the
Companies Act 2016.
The condensed consolidated financial statements have not been
audited or reviewed by the Group's auditors, thus no assurance is
provided therein.
The Directors acknowledge they are responsible for the fair
presentation of these condensed consolidated financial
statements.
Note 3: Consolidation
The consolidated annual financial statements comprise the
financial statements of MAST Energy Developments PLC and its
subsidiaries for the year ended 31 December 2022, over which the
Company has control.
Control is achieved when the Company:
-- has the power over the investee;
-- is exposed, or has rights, to variable return from its involvement with the investee; and
-- has the ability to use its power to affect its returns.
In assessing control, potential voting rights that are currently
exercisable or convertible are taken into account. Subsidiaries are
fully consolidated from the date that control commences until the
date that control ceases. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the
policies adopted by the Group. Intragroup balances and any
unrealised gains or losses or income or expenses arising from
intragroup transactions are eliminated in preparing the Group
financial statements, except to the extent they provide evidence of
impairment.
The Group accounts for business combinations using the
acquisition method of accounting. The cost of the business
combination is measured as the aggregate of the fair values of
assets given, liabilities incurred or assumed and equity
instruments issued. Costs directly attributable to the business
combination are expensed as incurred, except the costs to issue
debt which are amortised as part of the effective interest and
costs to issue equity which are included in equity.
The acquiree's identifiable assets, liabilities and contingent
liabilities which meet the recognition conditions of IFRS 3
Business Combinations are recognised at their fair values at
acquisition date.
During the financial year two acquisition occurred where ADV 001
Limited (Hindlip Lane) and ARL 018 Limited were acquired and IFRS 3
recognition conditions were applied.
The Group applied merger accounting for the common control
transaction that occurred during the creation of the group between
Kibo Mining (Cyprus) Limited, Kibo Energy Plc and MAST Energy
Projects Limited. In terms of this:
-- the assets and liabilities of the acquiree are recorded at
their existing carrying amounts (not fair value);
-- if necessary, adjustments are made to achieve uniform accounting policies;
-- intangible assets and contingent liabilities are recognised
only to the extent that they were recognised by the acquiree in
accordance with applicable IFRS;
-- no goodwill is recognised. Any difference between the
acquirer's cost of investment and the acquiree's equity is
presented separately directly in equity as a common control reserve
(CCR) on consolidation;
-- any non-controlling interest is measured as a proportionate
share of the carrying amounts of the related assets and liabilities
(as adjusted to achieve uniform accounting policies); and
-- any expenses of the combination are written off immediately
in profit or loss, except for the costs to issue debt which are
amortised as part of the effective interest and costs to issue
equity which are recognised within equity.
Note 4: Going concern
The financial results have been prepared on the going concern
basis that contemplates the continuity of normal business
activities, 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, cashflows from operational commencement,
available information about the future, the possible outcomes of
planned events, changes in future conditions, the 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 total comprehensive loss for the year of GBP2,733,000
compared to GBP1,408,958 for the preceding 15 month-financial
period;
-- Cash and cash equivalents readily available to the Group in
the amount of GBP132,184 in order to pay its creditors and maturing
liabilities in the amount of GBP1,911,031 as and when they fall due
and meet its operating costs for the ensuing twelve months; and
-- Whether the Group has available cash resources, or equivalent
short term funding opportunities in the foreseeable future, to
deploy in developing and growing existing operations or invest in
new opportunities.
Following on 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 that may cast significant doubt on the
Group and Company's ability to continue as a going concern. This is
largely attributable to the short-term liquidity position that the
Group finds itself in as a result of the staggered implementation
approach regarding the underlying operations to a point where the
operations can positively contribute to the cash requirements of
the larger Group.
The Directors have evaluated the Group's liquidity requirements
to confirm whether the Group has adequate cash resources to
continue as a going concern for the foreseeable future. By
considering the net current liability position, and consequently
preparing a cash flow forecast covering a period of 12 months from
the date of approval of these financial statements, the Directors
have concluded that the Group would be able to continue its
operations as a going concern.
In response to the net current liability position and to address
future cashflow requirements, detailed liquidity improvement
initiatives have been identified and are being pursued, with their
implementation regularly monitored in order to ensure the Group is
able to alleviate the liquidity constraints in the foreseeable
future.
Therefore, the ability of the Group to continue as a going
concern is dependent on the successful implementation or conclusion
of the below noted matters in order to address the liquidity risk
the Group faces on an ongoing basis:
-- Successful conclusion of funding requirements of the Group in
order to complete construction of the Group's remaining sites;
-- Successful commissioning of the remaining power-generation
facilities in order to achieve net-cash positive contributions
toward the larger Group;
-- Successful negotiations with Kibo Mining (Cyprus) Limited,
relating to the potential deferral of loans payable in the
foreseeable future beyond a 12-month period after year-end.
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.
Note 5: Segmental Reporting
The Group discloses segmental analysis based on its different
operations, being Bordersley, Rochdale . ADV 001 (Hindlip Lane),
ARL 018 (Stather Road) and Pyebridge
31 December Bordersley Rochdale Pyebridge ADV001 Hindlip ARL018 Stather Treasury and Group
2022 Lane Road Investment
------------ ---------- ----------- --------------- --------------- -------------- ------------
(GBP) (GBP) (GBP) (GBP) (GBP) (GBP) (GBP)
------------ ---------- ----------- --------------- --------------- -------------- ------------
Revenue - - 1,036,743 - - - 1,036,743
Cost of sales - - (778,802) - - - (778,802)
Impairment (1,288,578) - - - - - (1,288,578)
Depreciation (11,938) - (52,632) - - (751) (65,321)
Loss before
tax (1,581,475) (114,853) (50,469) (23,605) (10,967) (951,631) (2,733,000)
------------ ---------- ----------- --------------- --------------- -------------- ------------
Total assets 1,733,554 262,043 2,082,352 265,170 210,907 63,488 4,617,505
Capital
expenditure 17,099 57,962 4,766
Total
liabilities (296,984) (6,897) (133,650) - (109,898) (1,953,331) (2,500,761)
------------ ---------- ----------- --------------- --------------- -------------- ------------
31 December Bordersley Rochdale Pyebridge Treasury and Group
2021 Investment
----------- --------------- --------------- -------------- ------------
(GBP) (GBP) (GBP) (GBP) (GBP)
----------- --------------- --------------- -------------- ------------
Revenue - - 3,245 - 3,245
Cost of sales - - (34,321) - (34,321)
Impairment - - - (300,000) (300,000)
Depreciation (9,793) - - - (9,793)
Loss before
tax 65,821 (15,906) (88,527) (1,370,346) (1,408,958)
----------- --------------- --------------- -------------- ------------
Total assets 3,087,261 261,454 2,491,666 1,790,107 7,630,488
Total
liabilities (107,542) (5,570) (50,240) (3,617,410) (3,780,762)
----------- --------------- --------------- -------------- ------------
As the Group currently operates solely from the United Kingdom,
consequently there is no segmented disclosure with regard to
different geographic areas of operation.
Note 6: 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 31 December
2022 (GBP) 2021 (GBP)
------------ ------------
Loss for the period attributable
to equity holders of the parent (2,733,000) (1,312,243)
Weighted average number of ordinary
shares for the purposes of basic
loss per share 200,919,900 164,622,838
Basic loss per ordinary share (pence) (1.36) (0.80)
The Group has no dilutive instruments in issue as at year
end.
Note 7: Property, plant and equipment
Group Land Plant & Machinery Right of use assets Computer Equipment Total
-------- ------------------ -------------------- ------------------- ----------
Cost (GBP) (GBP) (GBP) (GBP) (GBP)
-------- ------------------ -------------------- ------------------- ----------
Opening Cost as at 1 January
2021 602,500 2,011,409 293,793 - 2,907,702
Additions - 75,061 62,090 4,766 141,917
Derecognition as a result of
waiver of deferred payment.
(Refer Note 20) - (421,041) - (421,041)
-------- ------------------ -------------------- ------------------- ----------
Closing Cost as at 31 December
2022 602,500 1,665,429 355,883 4,766 2,628,578
-------- ------------------ -------------------- ------------------- ----------
Accumulated Depreciation ("Acc (GBP) (GBP) (GBP) (GBP) (GBP)
Depr")
-------- ------------------ -------------------- ------------------- ----------
Opening Acc Depr as at 1 January
2021 - - (9,793) - (9,793)
Depreciation - (52,632) (12,565) (751) (65,948)
-------- ------------------ -------------------- ------------------- ----------
Acc Depr as at 31 December 2022 - (52,632) (22,358) (751) (75,741)
-------- ------------------ -------------------- ------------------- ----------
Carrying Value (GBP) (GBP) (GBP) (GBP) (GBP)
-------- ------------------ -------------------- ------------------- ----------
Carrying value as at 31 December
2022 602,500 1,612,797 333,525 4,015 2,552,837
-------- ------------------ -------------------- ------------------- ----------
Right of use asset 31 December 31 December
2022(GBP) 2021(GBP)
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
------------ ------------
Split 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
------------ ------------
31 December 31 December
2022(GBP) 2021(GBP)
Group Group
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) (491,481)
------------ ------------
Closing balance 350,654 291,519
------------ ------------
The Group has two lease contracts for land it shall utilise to
construct gas-fuelled power generation plants. The land is located
at Bordesley, Liverpool St. Birmingham and Stather Road,
Flixborough.
The lease of the land has a lease term of 20 years, with an
option to extend for 10 years which the Group has opted to include
due to the highly likely nature of extension as at the time of the
original assessment.
The Group's obligations under its leases are secured by the
lessor's title to the leased assets. The Group's incremental
borrowing ranges between 8.44% and 10.38%.
Note 8: Intangible assets
Intangible assets consist of separately identifiable assets,
property rights or intellectual property (Bordersley Power)
acquired either through business combinations or through separate
asset acquisitions. These intangible assets are recognised at the
respective fair values of the underlying asset acquired, or where
the fair value of the underlying asset acquired is not readily
available, the fair value of the consideration.
The following reconciliation serves to summarise the composition
of intangible assets as at period end:
Group Rochdale Power ( Bordersley Power ARL018 Stather ADV001 Hindlip Total ( GBP)
GBP) (GBP) Road (GBP) Lane (GBP)
------------------- ------------------- ------------------- ------------------- -------------
Carrying value as
at 1 January 2021 - 2,595,000 - - 2,595,000
------------------- ------------------- ------------------- ------------------- -------------
Acquisition of
Rochdale Power
Ltd 150,273 - - - 150,273
------------------- ------------------- ------------------- ------------------- -------------
Carrying value as
at 31 December
2021 150,273 2,595,000 - - 2,745,273
------------------- ------------------- ------------------- ------------------- -------------
Acquisition of
ARL018 Stather
Road - - 91,482 - 91,482
Acquisition of
ADV001 Hindlip
Lane - - - 247,506 247,506
------------------- ------------------- ------------------- ------------------- -------------
Impairments (1,288,578) (1,288,578)
------------------- ------------------- ------------------- ------------------- -------------
Carrying value as
at 31 December
2022 150,273 1,306,422 91,482 247,506 1,795,683
------------------- ------------------- ------------------- ------------------- -------------
Sloane Developments Limited (Sloane) acquired a direct 100%
equity interest in two projects namely ARL 018 Ltd and ADV 001 Ltd
during the financial year . The purchase was treated as an
acquisition of assets in terms of IFRS 3 - Business
Combinations.
The acquired assets included an intangible asset relating to the
property rights for the location where the gas generation peaker
plants are planned to be constructed.
The directors performed value in use assessments on each of the
projects. The basis for the assessments is the view that each of
the projects are distinctive cash generating units. A
cash-generating unit or CGU is defined as the smallest identifiable
group of assets that generates cash inflows that are largely
independent of the cash inflows from other assets or groups of
assets.
The assessment of the value in use of the intangible assets
resulted in an impairment of GBP1,288,578 being recognised relating
to the Bordersley Project. 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.
Note 9: Acquisition of interests in other entities
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 GBP262,500 of which
GBP88,817 is utilised to settle a shareholders loan of the same
amount and the remainder of GBP173,683 is allocated towards
purchasing all issued shares of the business. The acquisition
purchase price is to be paid from a credit loan obtained from
Riverfort Global Opportunities PCC Limited and Sanderson Capital
Partners Limited. A further GBP10,694was paid in cash by Mast
Energy Developments Plc ("MED") of which GBP8,020 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 GBP87,500 of which
GBP54,882is utilised to settle a shareholders loan of the same
amount and the remainder of GBP32,618 is allocated towards
purchasing all issued shares of the business. The acquisition
purchase price is to be paid from a credit loan obtained from
Riverfort Global Opportunities PCC Limited and Sanderson Capital
Partners Limited. A further GBP10,694 was paid in cash by Mast
Energy Developments Plc ("MED") of which GBP2,673 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.
Note 10: Share Capital
The called-up and fully paid share capital of the Company is as
follows:
2022 2021
Allotted, issued and fully paid shares
(2022: 217,452,729 Ordinary shares of GBP0.001 GBP217,453 -
each )
(2021: 188,717,097 Ordinary shares of GBP0.001 - GBP188,717
each)
--------------- ------------
GBP217,453 GBP 188,717
Number of Shares Ordinary Share Premium
Share Capital (GBP)
(GBP)
Balance at 31 December
2021 188,717,097 188,717 11,682,343
----------------- ----------------- -----------------
Partial Settlement of Outstanding
Shareholder Loan 28,735,632 28,736 971,264
----------------- ----------------- -----------------
Balance at 31 December
2022 217,452,729 217,453 12,653,607
----------------- ----------------- -----------------
All ordinary shares issued have the right to vote, right to
receive dividends, a copy of the annual report, and the right to
transfer ownership of their shares.
During the year the Company issued shares in partial settlement
of shareholders loan in the amount of GBP1,000,000.
Note 11: Reserves
Common control reserve
The common control reserve is the result of the capital
reorganisation between the company, its holding and ultimate
holding company during the 2020 financial year. As the
reorganisation was outside the scope of IFRS 3, predecessor
valuation accounting was applied as a result of the common control
transaction.
Non-controlling interest acquired
On 31 July 2020, Sloane Developments Limited, MAST Energy
Projects Limited and St. Anderton on Vaal Limited entered into the
Share Exchange Agreement relating to the acquisition by Sloane
Developments Limited of the remaining 40% of the issued share
capital of MAST Energy Projects Limited. Under the Share Exchange
Agreement, the Company paid St Anderton on Vaal Limited the sum of
GBP4,065,586 payable by the issue of 36,917,076 ordinary shares of
GBP0.001 each in the Company. Completion of the Share Exchange
Agreement was subject to and conditional upon the Admission of Mast
Energy Developments Limited to the London Stock Exchange.
Following completion of the IPO on 14 April 2021, the Group
acquired the remaining equity interest in MAST Energy Projects Ltd
for the consideration equal to 36,917,076 shares at a total value
of GBP4,065,586.
As the controlling stake in the entity had already been
acquired, the transaction was seen as a transaction with owners,
and the financial impact recognised directly in equity of
GBP4,065,586.
The rationale for the transaction was to acquire the remaining
equity within MAST Energy Projects Limited in order to have the
exclusive see-through equity interest in the Borderley project,
held in the form of royalty and revenue agreements between MAST
Energy Projects Limited and Bordersley Power Limited, from which
MED could restructure the Group through its SPV's.
Note 12: Loan from related parties
Group Group
2022 (GBP) 2021 (GBP)
------------ ------------
Amounts falling due within one year:
Kibo Mining (Cyprus) Limited 1,231,535 2,269,035
1,235,535 2,269,035
------------ ------------
The loan is unsecured, carries interest at 0%, and is repayable
on demand. The carrying value of loans from related parties equals
their fair value due mainly to the short term nature of the
liability. The loan from Kibo Mining (Cyprus) Ltd was partially
settled to the value of GBP1,000,000 by way of share issue.
Note 13: Other financial and derivative liabilities
Description Group Group Company Company
2022 (GBP) 2021 (GBP) 2022 (GBP) 2021 (GBP)
------------ ------------ ------------ ------------
Amounts falling due within
one year:
Convertible loan notes 354,805 - 354,805 -
Deferred vendor liability - 960,686 - -
Derivative liability 20,386 - 20,386 -
Amounts falling due between
one year and five years:
Convertible loan notes 243,056 - 243,056 -
618,247 960,686 618,247 -
------------ ------------ ------------ ------------
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 GBP421,041.
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.
Derivatives
The derivative liability is derived from the convertible credit
note loans. The convertible feature within the credit notes enable
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 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.
Note 14: Related Parties
Related parties of the Group comprise subsidiaries, significant
shareholders and the Directors.
Relationships
Board of Directors/ Key Management
Name Relationship (Directors of:)
Paul Venter St Anderton on Vaal Limited
Louis Coetzee Kibo Energy PLC and Katoro Gold PLC
Dominic Traynor Druces LLP
Pieter Krügel Chief Executive Officer
Other entities over which Directors/key management or their
close family have control or significant influence:
St Anderton on Vaal Limited: St Anderton on Vaal Limited provides consulting
services to the Group. The Directors of St
Anderton on Vaal Limited are also Directors
of Mast Energy Developments PLC.
Kibo Mining (Cyprus) Limited: Kibo Mining (Cyprus) Limited is the controlling
shareholder of Mast Energy Developments PLC.
Ultimate shareholder Kibo Energy PLC
Significant shareholders: St Anderton on Vaal Limited
Kibo Mining (Cyprus) Limited
Associated by fellow directorship: Katoro Gold PLC
MAST Energy Developments PLC is a shareholder of the following
companies and as such are considered related parties:
Directly held subsidiaries: Sloane Developments Limited
MAST Energy Projects Limited (dissolved on
24 May 2022)
Bordersley Power Limited
Pyebridge Power Limited
Rochdale Power Limited
ADV 001 Limited
ARL 018 LImited
Balances and transactions
Name Amount Amount
2022 ( 2021 (
GBP) GBP)
---------- ----------
Kibo Mining (Cyprus) Limited - Loan from related
parties owing 1,231,535 2,269,035
St Anderton on Vaal Limited - Consulting services - 161,000
Kibo Energy PLC - Management and administration
services - 87,000
St Anderton on Vaal Limited - Purchase of Non-Controlling
interest - 4,065,586
Kibo Mining (Cyprus) Limited was issued shares in exchange for
partial settlement of GBP1,000,000 of its loan with the MED
Group.
Transactions between the Company and its subsidiaries, which are
related parties, have been eliminated on consolidation. The
transactions during the period between the Company and its
subsidiaries included the settlement of expenditure to/from
subsidiaries, working capital funding, and settlement of the
Company's liabilities through the issue of equity in subsidiaries.
The loans from related parties do not have fixed repayment terms
and are unsecured.
Note 15: Subsequent events
As at the date of this report, no significant post statement of
financial position events or conditions were identified which
required further disclosure or adjustment to the financial
results.
Note 16: Commitments and contingencies
The Group does not have identifiable material commitments and
contingencies as at the reporting date.
Note 17: Principal risks
The realisation of the various projects is dependent on the
successful completion of technical assessments, project development
and project implementation and is subject to a number of
significant potential risks summarised as follows, and described
further below:
-- Funding risk;
-- Regulatory risk;
-- Commodity risk;
-- Development and construction risk;
-- Staffing and key personnel risk; and
-- Information technology risk.
Funding risk
The Group generated revenue of GBP1,036,743 for the period ended
31 December 2022 and had net assets of GBP2,116,744 as at 31
December 2022 (31 December 2021: GBP3,849,744). As at the year end,
the Group had liquid assets in the form of cash and cash equivalent
and other receivables of GBP268,985 (31 December 2021:
GBP1,987,306).
The Directors have reviewed budgets, projected cash flows and
other relevant information, and on the basis of this review and the
rationale set-out below, they are confident that the Group will
have adequate financial resources to continue in operational
existence for the foreseeable future.
The Group has sufficient funds for its present working capital
requirements for the foreseeable future due to the successful
initial public offering and capital raising completed during the
year.
The Directors continue to review the Group's options to secure
additional funding for its general working capital requirements as
well as project financing for commercial production ready sites,
alongside its ongoing review of revenue generation from existing
operations, potential acquisition targets and corporate development
needs.
The Directors are confident in this light that such funding will
be available, although there is no guarantee as to the terms of
such funding. In addition, any equity funding may be subject to
shareholder approvals in line with legal and regulatory
requirements as appropriate.
As a result, the Directors continue to monitor and manage the
Group's cash and overheads carefully in the best interests of its
shareholders and believe that the Company and the Group will remain
a going concern for the foreseeable future.
Regulatory risk
The United Kingdom ("UK") power sector has undergone a number of
considerable regulatory changes over the last few years and is now
at a state of transition from large fossil-fuel plants to a more
diverse range of power generation sources including renewables,
small distributed plants and new nuclear. As a result, there is
greater regulatory involvement in the structure of the UK power
marker than has been the case over the last 20 years. Therefore,
there remains a risk that future interventions by Ofgem or
Government could have an adverse impact on the underlying assets
that the Group manages and/or owns.
Commodity Risk
The assets that the Group manages and owns will receive revenue
from the sale of energy onto the wholesale market or to end users
at a price linked to the wholesale power market price. Fluctuations
in power prices going forward will affect the profitability of the
underlying reserve power assets. The Group will also use its
skills, capabilities and knowledge of the UK power market in order
to optimise these wholesale revenues. The Group's ability to
effectively manage price risk and maximise profitability through
trading and risk management techniques will have a considerable
impact on the revenues and returns.
Development and Construction Risk
The Group will continue to develop new project sites which
includes obtaining planning permission, securing land (under option
to lease or freehold), and obtaining gas and grid connections. The
Group will also oversee the construction of these projects where
needed.
Risks to project delivery include damage or disruption to
suppliers or to relevant manufacturing or distribution capabilities
due to weather, natural disaster, fire, terrorism, pandemic,
strikes, or other reasons could impair our ability to deliver
projects on time.
Failure to take adequate steps to mitigate the likelihood or
potential impact of development and construction setbacks, or to
effectively manage such events if they occur, could adversely
affect our business or financial results. There are inherent risks
that the Group may not ultimately be successful in achieving the
full development and construction of every site and sunk costs
could be lost. However, the risk is mitigated as the Group targets
shovel ready sites that adhere to specific requirements, coupled
with experienced senior management team.
Staffing and Key Personnel Risks
Personnel are our only truly sustainable source of competitive
advantage and competition for key skills is intense, especially
around science, technology, engineering and mathematics (STEM)
disciplines. While the Group has good relations with its employees,
these relations may be impacted by various factors. The Group may
not be successful in attracting, retaining, developing, engaging
and inspiring the right people with the right skills to achieve our
growth ambitions, which is why staff are encouraged to discuss with
management matters of interest to the employees and subjects
affecting day-to-day operations of the Group.
Information Technology Risks
The Group relies on IT in all aspects of its business. Any
significant disruption or failure, caused by external factors,
denial of service, computer viruses or human error could result in
a service interruption, accident or misappropriation of
confidential information. Process failure, security breach or other
operational difficulties may also lead to revenue loss or increased
costs, fines, penalties, or additional insurance requirements. The
Group continues to implement more cloud-based systems and
processes, and improve cyber security protocols and facilities in
order to mitigate the risk of data loss or business
interruption.
Note 18: Use of Estimates and Judgements
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. The estimates
and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources.
In particular, there are significant areas of estimation,
uncertainty and critical judgements in applying accounting policies
that have the most significant effect on the amounts recognised in
the financial statements.
Estimation uncertainty:
Information about estimates and assumptions that may have the
most significant effect on recognition and measurement on assets,
liabilities and expenses is provided below:
Impairment assessment of property plant and equipment and
intangible assets
In applying IAS 36, impairment assessments are performed
whenever events or changes in circumstances indicate that the
carrying amount of an asset or CGU may not be recoverable.
Estimates are made in determining the recoverable amount of assets
which includes the estimation of cash flows and discount rates
used. In estimating the cash flows, management bases cash flow
projections on reasonable and supportable assumptions that
represent management's best estimate of the range of economic
conditions that will exist over the remaining useful life of the
assets. The discount rates used reflect the current market
assessment of the time value of money and the risks specific to the
assets for which the future cash flow estimates have not been
adjusted. Refer to Note 11 for detailed sensitivity analysis
related to a potential change in the key estimation uncertainties
inherent in the impairment assessment.
Useful life of Intangible assets
Amortisation is charged on a systematic basis over the estimated
useful lives of the assets after taking into account the estimated
residual values of the assets. Useful life is either the period of
time over which the asset is expected to be used or the number of
production or similar units expected to be obtained from the use of
the asset.
Leases - Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in
the lease, therefore, it uses its incremental borrowing rate (IBR)
to measure lease liabilities. The IBR is the rate of interest that
the Group would have to pay to borrow over a similar term, and with
a similar security, the funds necessary to obtain an asset of a
similar value to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what the Group 'would have
to pay', which requires estimation when no observable rates are
available or when they need to be adjusted to reflect the terms and
conditions of the lease. The Group estimates the IBR using
observable inputs (such as market interest rates) when available
and is required to make certain entity-specific estimates.
Useful life of Property, plant and Equipment
The depreciable amounts of assets are allocated on a systematic
basis over their useful lives. In determining the depreciable
amount, management makes assumptions in respect of the residual
value of assets based on the expected estimated amount that the
entity would currently obtain from disposing the asset, after
deducting the estimated costs of disposal. If an asset is expected
to be abandoned, the residual value is estimated at nil. In
determining the useful lives of assets, management considers the
expected period of use of assets, expected physical wear and tear,
legal or similar limits of assets such as rights, condition and
location of the asset as well as obsolescence.
Decommissioning and Environmental Rehabilitation Provisions
The Company has set-up a decommissioning provision for the
removal of the plant and equipment installed at the Bordersley Site
in Liverpool St. Birmingham., the cost of which is based on
estimates.
Environmental Rehabilitation Provisions
Estimates are made in determining the present liability of
environmental rehabilitation provisions consisting of a restoration
provision, decommissioning provision and a residual impact
provision. Each of these provisions are based on an estimate of
closure costs on reporting date, inflation and discount rates
relevant to the calculation and the expected date of closure of
operating activities in determining the present value of the total
environmental rehabilitation liability.
Critical judgements:
Information about critical judgements that may have the most
significant effect on recognition and measurement on assets,
liabilities and expenses is provided below:
Going Concern
The Groups current liabilities exceed its current assets as at
31 December 2022, mainly due to the loans from related parties in
the amount of GBP1,231,535 (31 December 2021: GBP2,269,035) which
contributes significantly to the material uncertainty related to
the going concern assumption applied in preparation of the
financial statements. Management applies judgement in determining
whether or not the Group is able to continue as a going concern for
the foreseeable future, in identifying the matters which give rise
to the existence of the material uncertainty, and in developing
responses thereto in order to address the risk of material
uncertainty.
Note 17: Financial instruments - Fair value and Risk
Management
The carrying amount of all financial assets and liabilities
approximates the fair value. Directors consider the carrying value
of financial instruments of a short-term nature, that mature in 12
months or less, to approximate the fair value of such assets or
liability classes.
The carrying values of longer-term assets are considered to
approximate their fair value as these instruments bear interest at
interest rates appropriate to the risk profile of the asset or
liability class.
The Group does carries derivative liabilities measured in the
statement of financial position at fair value at 31 December
2022.
**ENDS**
This announcement contains inside information as stipulated
under the Market Abuse Regulations (EU) no. 596/2014 and is
announced in accordance with the Company's obligations under
Article 17 of the specified Regulation.
For further information please visit www.kibo.energy or
contact:
Louis Coetzee info@kibo.energy Kibo Energy PLC Chief Executive
Officer
James Biddle +44 207 628 3396 Beaumont Cornish Nominated Adviser
Roland Cornish Limited
------------------------------ -------------------- ------------------
Claire Noyce +44 20 3764 2341 Hybridan LLP Joint Broker
------------------------------ -------------------- ------------------
Damon Heath +44 207 186 9952 Shard Capital Joint Broker
Partners LLP
------------------------------ -------------------- ------------------
Zainab Slemang zainab@lifacommunications.com Lifa Communications Investor and
van Rijmenant Media Relations
Consultant
------------------------------ -------------------- ------------------
Johannesburg
28 April 2023
Corporate and Designated Adviser
River Group
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END
FR MZGZDMNRGFZZ
(END) Dow Jones Newswires
April 28, 2023 02:02 ET (06:02 GMT)
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