ENGEN BOTSWANA : ANNUAL CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

ENGEN BOTSWANA LIMITED

Annual Consolidated and Separate Financial Statements

For the Year Ended

31 December 2022

Engen Botswana Limited

Annual Consolidated and Separate Financial Statements

GENERAL INFORMATION
Directors:	S Ndzinge	Motswana	(Chairman)
	C C Monga	Zambian	(Removed 5 April 2022)
	A M Siwawa	Motswana
	F J Kotze	South African
	L Makwinja	Motswana
	S Williams	South African
	H Morrison	South African
	B F Sameke	Zimbabwean	(Acting Managing Director)
	J Ramesh	Motswana	(Appointed 4 May 2022)
Principal Activities:	Petrochemical investments and property operations
Parent Company:	Petroleum Investment Holding Limited (Incorporated in Mauritius)
Ultimate Parent Company:	Petroliam Nasional Berhad (PETRONAS) (Incorporated in Malaysia)
Company Secretary:	Grant Thornton Business Services (Pty) Ltd
	Plot 50370, Acumen Park
	Fairgrounds
	P O Box 1157, Gaborone
Company Number:	BW00000748780
Registered Office:	Plot 54026
	Western Bypass
	P O Box 867
	Gaborone
External Auditor:	PricewaterhouseCoopers
Bankers:	First National Bank of Botswana Limited
	Absa Bank Botswana Limited
	Standard Chartered Bank Botswana Limited
	Stanbic Bank Botswana Limited
Country of Incorporation and Domicile:	Botswana (Listed on Botswana Stock Exchange - Share Code ENG-EQO)
Currency:	Botswana Pula
CONTENTS			Page
Directors' report			2
Report of the independent auditor			3-8
Statement of profit or loss and other comprehensive income		9
Statement of financial position			10
Statement of cash flows			11
Statement of changes in equity			12 - 13
Notes to the financial statements			14 - 60

APPROVAL OF ANNUAL CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

The annual consolidated and separate financial statements for the year ended 31 December 2022 were authorised for issue in accordance with a resolution of the directors and are signed on their behalf by:

	.........................................
DIRECTOR	DIRECTOR
23 June 2023	23 June 2023

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Engen Botswana Limited

Annual Consolidated and Separate Financial Statements

DIRECTORS' REPORT

Nature of business

The core business of the group and company is petrochemical investments and property operations.

There have been no material changes to the nature of the group and company's business from the prior year.

Review of activities

The annual financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') and the requirements of the Companies Act of Botswana. The accounting policies have been applied consistently compared to the prior year.

Full details of the financial position, results of operations and cash flows of the group and company are set out in these annual financial statements.

Financial Results

Revenue increased by 80% mainly due to increased volumes arising from the removal of Covid-19 regulations on 1 October 2021. There were several price adjustments as a result of the global crude oil price movements and an industry margin adjustment was effected in September 2022 for price controlled products. Non price controlled products had market related price adjustments.

Foreign exchange gains increased from P2.5 million at the end of 2021 to P9.4 million at the end of 2022.

The group exercised good margin management and cost control throughout the year.

Overall, the group's performance reflects a 3% increase in net profit after tax.

Going concern

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern.

This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

Stated capital

There were no changes to the stated capital during the year under review and in prior year.

Directors

Mr CC Monga who was the Managing Director passed away on 5 April 2022 and was duly removed as a director. Mr BF Sameke was appointed as the Acting Managing Director on 5 April 2022. Mr J Ramesh was appointed as a director on 4 May 2022.

Company Secretary

There were no changes to the company secretary during the year and in prior year.

External Auditor

PricewaterhouseCoopers were appointed as the external auditor for the 2022 financial year.

Dividends

Dividends amounting to P91 555 290 (2021: P163 276 039) were paid during the year.

Events after the reporting period

The directors are not aware of any material event which occurred after the reporting date and up to the date of this report.

Conclusion

The Directors would like to thank our valued customers, suppliers, shareholders, management and staff and all other stakeholders for their ongoing support towards the performance of Engen Botswana Limited.

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Independent auditor's report

To the Shareholders of Engen Botswana Limited

Our opinion

In our opinion, the consolidated and separate financial statements give a true and fair view of the consolidated and separate financial position of Engen Botswana Limited (the "Company") and its subsidiary (together the "Group") as at 31 December 2022, and of its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards.

What we have audited

Engen Botswana Limited's consolidated and separate financial statements set out on pages 9 to 60 comprise:

• the consolidated and separate statements of financial position as at 31 December 2022;
• the consolidated and separate statements of profit or loss and other comprehensive income for the year then ended;
• the consolidated and separate statements of changes in equity for the year then ended;
• the consolidated and separate statements of cash flows for the year then ended; and
• the notes to the financial statements, which include a summary of significant accounting policies.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated and separate financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) issued by the International Ethics Standards Board for Accountants and other independence requirements applicable to performing audits of financial statements in Botswana. We have fulfilled our other ethical responsibilities in accordance with the IESBA Code and other ethical requirements applicable to performing audits of financial statements in Botswana.

PricewaterhouseCoopers, Plot 50371, Fairground Office Park, Gaborone, P O Box 294, Gaborone, Botswana T: [phone], www.pwc.com/bw

Country Senior Partner: R Binedell

Partners: A S Edirisinghe, I D Molebatsi, S K K Wijesena

Our audit approach

Overview

Overall group materiality

• Overall group materiality: P17 672 000, which represents 5% of the consolidated profit before tax.

Group audit scope

• The Group consists of one subsidiary and two join ventures. We performed full scope audits on the subsidiary and the Company, and analytical review procedures on the joint ventures.

Key Audit Matters

• Provision for Dismantling, restoration and removal costs (the "DRR provision")

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated and separate financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Overall group materiality

How we determined it

Rationale for the materiality benchmark applied

P 17 672 000

5% of the consolidated profit before tax.

We chose consolidated profit before tax as the benchmark because, in our view, it is the benchmark against which the performance of the Group is most commonly measured by users and is a generally accepted benchmark. We chose 5% which is consistent with quantitative materiality thresholds used for profit-oriented companies in this sector.

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