Registered number: 04112423 State Oil Limited Annual report and financial statements for the year ended 28 February 2022 ABEUMBFUY 09 s7rs0r2022 #262 COMPANIES HOUSEState Oil Limited ‘Annual report and financial statements for the year ended 28 February 2022 Company Information Directors Company secretary Registered number Registered office Corporate headquarters Independent auditor ker Solicitor Mr Winston Sanjeev Kumar Soossipilat Mr Don Camillo Emilio Bomeo (resigned 29 May 2022) Mr Rob Marrow (appointed 8 November 2021, resigned 27 July 2022) Mr Julian Vickers (appointed 29 December 2021) Mr Mark Ware (appointed 29 December 2021) Elemental CoSec Limited 04112423 Harvest House Horizon Business Village 1 Brooklands Road Weybridge Surrey KTI30T United Kingdom York House 45 Seymour Street London WIHT United Kingdom KPMG LLP 1 Forest Gate Brighton Road Crawley RHI SPT. United Kingdom HSBCPle 8 Canada Square Canary Wharf London E14 5HQ United Kingdom Linklaters LLP One Silk Street London EC2Y 8HQ United KingdomState Oil Limited ‘Annwal report and financial statements for the year ended 28 February 2022 Contents Strategic report 1 Directors! report 9 Statement of Directors’ responsibilities in respect of annual report and financial statements 13 Independent Auditor's Report to the Members of State Oil Limited 4 Consolidated Statement of Profit and Loss and Other Comprehensive Income 18 Consolidated Balance Sheet 19 ‘Company Balance Sheet 20 Consolidated Statement of Changes in Equity 21 Company Statement of Changes in Equity 2 Consolidated Cash Flow Statement 23 Notes 4State Oil Limited ‘Annual report and financial statements forthe year ended 28 February 2022 Strategic report “The Directors present the Group strategic report forthe year ended 28 February 2022. Strategy and outlook Headquartered in London, United Kingdom and with offices in Singapore and Houston, the State Oil Group of companies (trading as the Prax Group) is a leading integrated midstream and downstream energy group dealing in crude oil, petroleum products and bio-fuels. Driven by an exceptionally experienced, dynamic and focused management team, the Group has consistently delivered solid shareholder value. The shareholders and the management team’s deep-rooted ambition to create a dominant global energy business has scen the Group make a number of substantial, well-considered strategic acquisitions, The Group continues to apply robust and proven risk management techniques and has a strong focus on Health & Safety. Iralso conducts its business in a way which reduces its environmental impact. ‘The Group is fully integrated across refining, storage, transport, wholesale and retail, underpinned by a world leading, integrated supply and optimisation team. Our continuing strategy is to use our acquired expertise to develop our presence globally and to increase our activities in the entire oil & gas value chain With a View to achieving a fully integrated business structure in order to deliver sustained returns over future decades. Aligned with this strategy is a resolve to achieve maximum efficiency in the management of our industrial activities and the deflation of our fixed cost structures by maximising volumes traded around each asset class. ‘The key strengths of the Group are its global scale, its sector expertise, its solid growth platform and its agility to react rapidly to new opportunities which enables it to adapt smoothly to changing markets, We operate a vertically integrated Midstream and Downstream energy business which means we are engaged in all aspects of the midstream and downstream oil value chain (supply, refining, blending, storage and distribution). This integration is supported by our dedicated Integrated Supply and Optimisation organisation which effectively allows us to capture favourable unit ‘margins for our Downstream division and offer our customers high quality, customised products. From the current year, the Group measures the performance of its refining business unit on a current cost of supplies (CCS) basis. The CCS basis is designed to provide management and other stakeholders with a reliable understanding of the operational performance of the refinery following the acquisition of Prax Lindsey Oil Refinery Limited on 28 February 2021, more details below. Business review Overall, the Group has seen a significant increase in revenue ($10.0bn) compared to prior year ($3.1bn) primarily attributable to the purchase of the refinery in February 2021 (which contributed $6.1bn revenue). The Downstream division also saw an increase in revenue due to the recovery in road fuel demand post Covid-19 along with being awarded significant new contracts and record spot sales in the Industrial and Commereial business. (On an Adopted IFRS basis the loss for the year of ($41.7m) (2021:$499.3m profit) includes the impact of ($24.8m) lost ‘margin resulting from an outage of one of the gasoline production units in Qi, the unit was received offline on acquisition of the refinery on 28 February 2021 and on re-starting an issue was identified that required a repair to the unit during, ‘April and May, since repair the unit has been fully operational ‘The refinery performance is measured on a CCS basis (see subsequent paragraph), as a result, the performance of the group was a profit after tax of $12.9m, ifthe one-off effect ofthe unit outage in April and May is excluded, the underlying performance on a CCS basis was a profit of $37.7m. With the integration of the refinery into the group there has been a commensurate increase in fixed costs and other overheads from $72.4m in the previous financial year to $183.7m in the year ended 28 February 2022. ‘The group entered into a working capital facility tthe beginning of the year providing a solid platform to support growth, ‘The increased finance costs reflect the utilisation of this facility. ‘This year has seen the Group grow significantly following the purchase of the Lindsey Oil Refinery and is already benefiting from the synergies this has brought fo the rest of the Group providing a strong base for future performance.State Oil Limited Annual report and financial statements Strategic report (continued) forthe year ended 28 February 2022 Midstream ‘The Group acquired Lindsey Oil Refinery on 28 February 2021 providing the group with; ‘+ Annationally strategic refinery with high complexity, strong operational performance and major recent investments bolstering competitiveness Direct integrated access to the North Sea at Immingham Oil Terminal and access to gas jetties Unique inland distribution assets with rail, road and pipeline providing direct connection to the London Area, major Airports and other national pipeline networks ‘© Integrated storage at Kingsbury and Hertfordshire Integrating the Refinery into the Prax sales organisation has allowed us to direct more product domestically as well as through a wider customer base, providing us with benefits in transport costs and margin. Prax has actively optimised the crude diet further improving refinery profitability. Shortly after our purchase of the Refinery the Group launched a project to focus on asset optimisation, commercial integration, optimisation of biofuels performance and cost reduction / synergies, both atthe Refinery and at Group level. Much of the project has been delivered during the year through cost savings and revenue benefits. “The Group has achieved average throughput volumes (ie, the quantity of Crude and Feedstock consumed in the production of products) of $10KT per month in normal operations, following the planned Inspection and Maintenance ‘tage completed in August 2022 the throughput can now be inereased further by 1OOKT per month ‘The Directors continue to drive improvements in the performance of the Group's integrated business model in order to deliver greater margin management over the full length of the supply chain. Downstream Our Retail business, at 28 February 2022, included a network of 183 retail sites, 88 of them company owned and has maintained strong margins as volumes have continued to grow following the lifting of Covid-19 restrictions. We continue to strengthen our presence in the convenience retail market through the TotalEnergies Brand license agreement and have entered into a partnership advancing an asset-light roll out of Electric Vehicle charging facilities. (ur retail sites continue to grow in number and average profitability through acquisition and investment, by improving. nonfuel offerings, and therefore increasing brand awareness. ‘The retail properties are held at fair value and have been revalued at 28 February 2022. A fair value increase of $S3m has been recorded following a revaluation of the freehold and long leasehold property sites. CBRE were engaged to ‘complete a valuation of the full portfolio except forthe 63 sites acquired with HKS Holdings in 2019 which were valued by the directors. ‘The valuation was based on various factors including future income and current market prices. ‘Our industrial & commercial business supplies crude oil, petroleum products, biofuels, and carbon neutral products across Europe, Africa, the Middle East, Asia, and America. We sell products that we have refined and blended as well as products sourced from third parties. For the twelve months ending 28 February 2022, we supplied over 4.4m metric tonnes (2021: 1.9m metric tonnes) of total product to our industrial & commercial customers. The industrial and commercial business has achieved record spot sales in the year and has continued to win a number of notable new contracts. (Our Marine business sells fuels under the Harvest Energy Marine brand and we are an established bunker fuel supplier in ports throughout North West Europe. The marine business is fully integrated with the fuel oil production at the refinery. In addition to a fleet of time-chartered ocean-going tankers and river barges, the Group acquired its first ocean going bunker tanker in February 2022 and post year-end had added a further tanker to its fleet adding further flexibility to it’s bunker supply locations. Liquidity ‘The Group enjoys solid support of a large pool of intemational financial institutions. The daily trading activity is supported by bilateral trade finance lines that are easily scalable to accommodate the increasing demands ofthe business. ‘The downstream business is funded by banking facilities provided by a syndicate of banks. This yearhas seen significantState Oil Limited Annual report and financial statements Strategic report (continued) {or the yar ended 28 February 2022 ‘changes in financing with the Group entering into new working capital faci ‘The Group also entered into supply arrangements for crude and feedstocks forthe refinery. ‘The Group is confident that its existing funding strategy with its financial solutions for business scenarios, equips it with the flexibility it needs to deal with any unexpected volatility inthe physical commodity and derivatives markets. Post year end the Group has successfully upsized its working capital facility demonstrates the confidence that our financial partners have in the Group's business model and its vision forthe future. Capital Investment With the addition of the Refinery the value of capital investment has increased tenfold from $6.1m in the year to 28 February 2021 to $64.1m in the year to 28 February 2022. Refinery CAPEX for the year ending 28 February 2022 included $26.7m on a revamp of the HDS3 unit to allow production of more low sulphur gasoline feedstock molecules (the project is due to complete late Summer 2022), $9.5m. ‘on Maintenance and Reliability improvements and $6.2m on other improvements. ‘The Group has maintained its considerable investment in its IT systems and infrastructure. Governance ‘The Group has five committees to oversee its govemance and compliance activities. The committees are formed around the following disciplines: Executive, Audit & Risk, Investment, Remuneration and Safety, Health, Environment and Quality ‘The Executive committee is authorised to constitute addi needs of the Company. nal committees from time to time, depending on the business Performance on Current Cost of Supply Basis From the current year, the Group measures the performance of its refining business unit on a current cost of supplies (CCS) basis. The CCS basis is designed to provide management and other stakeholders with a reliable understanding of performance of the refinery following the acquisition of Lindsey Oil Refinery on 28 February 2021 lustrates to stakeholders the fact that crude oil and product prices can vary significantly between periods impact that this can have on our reported Adopted IFRS results. Inventory gains and losses also vary due to changes in the prices as well as underlying inventory levels. This is a similar approach used by the UK and European Oil Majors. On this basis, the purchase price of volumes sold during the period is based on the current cost of supplies during the same period adjusted for tax effects. CCS camings therefore exclude the effect of changes in the oil price on inventory carrying amounts and related hedges.State Oil Limited Annual report and financial statements Strategic report (continued) forthe year ended 28 February 2022 Results for the current period based on CCS Eamings are presented below; Consolidated Statement of Profit and Loss on CCS Basis for the year ended 28 February 2022 3000s ccs ‘Adopted IFRS Revenue 9,989,888 9,989,888 Cost of Sales 6,758,512) (93813,112) Gross Profit 231,376 176,776 ‘Other operating income 3,225 3225 (Other administrative expenses 183,735) (183,735) Operating Profit(L.oss) 50,866 eng [Net financing expenses (42,722) 42,72) Profit(Loss) before tax ae (46,486) ‘Taxation 476 ans Profiu(Loss) after tax 12870 (41,730) Depreciation , gain on sale of assets and acquisition costs 51,095 51,095 Operating Profit before ubove items “EBITDA” 101,961 47361 Notes: When considering cashflow, an important measure of operating profitability is known as “EBITDA” which excludes the non-cash items from the operating profit figure. The CCS EBITDA was $102.0m compared to Adopted IFRS measure of $47.4m Adjusting for the one -off event of the outage ofthe gasoline production unit in April and May 2021the underlying CCS EBITDA performance was $126.7m ‘The difference of $54.6m between the CCS and Adopted IFRS cost of sale was due to: i) $11.5m Timing effect of product purchase and sales — the impact of actual purchase and sale prices of feedstocks and finished products Compared to the current month average offset by hedges against such ‘movements ii) $17.1m Timing effect of crude price between purchase and consumption period ili) $17.6m Timing effect of crude premiums between purchase and consumption period iv) $8.4m Impact of inventory valuation and other items ~ impact of inventory valuation and hedges against inventory and the impact of historic FIFO stock valuation compared with a mark to market basis and open future hedges Consolidated Balance Sheet on CCS Basis as at 28 February 2022 000 ces Adopted IFRS ‘Total Non-Current Assets 673,168 673.768 Invemories 436,006 441,406 “Trade & oer receivables 992,836 992,836 Cash and cash equivalents 156611 136611 ‘Total Current Assets 1,635,453. 1,580,853 otal Current Liabilities (15083812) 1,808,812) ‘Total Non-Current Liabilities (195,963) (195,963) Net Assets. 604,443, ‘549,843 Share Capital 1921 1921 Revaluation Reserve n190 962 Retained earings 532,548 97.948 Foreign exchange reserve 21988) 21988) Shareholders’ Funds 604,443 549,843State Oil Limited ; Annual report and financial statements Strategic report (continued) forthe year ended 28 February 2022 Principal risks and uncertainties ‘The control and management of operational and financial risks form an integral part of the Group's objective to achieve high and stable returns. ‘We promote a culture of awareness, accountability and responsiblity throughout our global risk functions with a lean risk monitoring, managing & reporting platform. Health and Safety Risk We recognise the paramount importance of safe operations to minimise the risk of harm to people, environment, assets ‘and reputation. We have an excellent track record of health and safety, and itis an integral part of the Prax culture. Cyber Risk ‘We ae subject to risks associated with failures in technology systems and cyber-security. The operation of many of our business processes depends on the uninterrupted availability of our information technology systems and, to maintain competitiveness, we are increasingly reliant on automation, centralized operation and new technologies to manage and ‘monitor our complex refining, logistics and distribution activities. Consequently, any localized or Widespread system failure, whether deliberate (such as an outage resulting from a cyber-attack) or unintentional (such as network, hardware or software failure or in relation to IT upgrades), could have adverse effects at various levels. Threats to our industrial control systems are not limited by geography as our digital infrastructure is inter-connected and accessible globally ‘The perpetrators of a cyber-attack can include organised crime groups, competitors, disgruntled employees and politically motivated groups. The Group's dedicated and experienced IT team uses cyber security solutions and defensive practices to protect the Group against cyber-erime. We have security barriers, policies, staff training, simulation exercises and risk management processes in place that are designed to protect our information systems and digital infrastructure against a range of security threats. Currency and Interest Risk Management ur exposure to foreign currency and related commodity price risk arises principally from our trading in oil with ‘purchases in United States dollars where commodity prices can change in the short term and from its revenue earned in local currencies. We rigorously monitor our daily exposure to currency fluctuations and eradicate any forex exposure With the use of financial derivative instruments. We enter into derivative contracts when concluding purchases in order to offset any fluctuations in prices up to the date of delivery to a customer and into forward currency contracts when ‘contracting with customers in currency that differs from related liabilities (principally Sterling and United States dollars respectively). Our interest rate risk is managed by our Treasury function. Market Price Risk Management ur operating results and financial condition are exposed to fluctuations in the prices of crude oil and petroleum products, which have been volatile over recent years, in particular due to the COVID-19 pandemic and related global macro- ‘economic and political dynamics. The market is volatile and the prices of the products it trades are susceptible to significant price movements. The Group negates the impact of such movements and protects current and future earnings by using forward contracts and other financial instruments. Credit Risk Management Credit risk isthe risk of financial loss to the Group if a customer or counterparty toa financial instrument fails to meet its contractual obligations and arises principally from the Group’s trade receivables. The failure to perform could take the form of non-payment for amounts due, or inability to fulfil the requirements of a physical or financial contract that ‘would result in the Group incurring a loss by failing to source a replacement counterparty for the same contract in the ‘market. Credit risk in monitored and managed by our credit risk committee. We insure our receivables and have no history of significant impairment losses. We have robust processes in place to monitor the credit quality of all ‘counterparties and mitigate the risk of contractual non-performance or payment default by requiring credit support from creditworthy financial institutions. We also make extensive use of credit enhancement products such as letters of eredit, credit insurance policies and bank guarantees where appropriate, and by providing open account credit mainly to investment grade counterparties. We have rigorous counterparty onboarding processes which take into account both qualitative and quantitative parameters before establishing business relationships. We have a formalized credit process, ‘managed and monitored by the senior credit manager of the Group. Our conservative credit policy requires provision ofState Oil Limited Annual report and financial statements Strategic report (continued) forthe yar ended 28 February 2022 bank guarantees or insurance for counterparties Which are not investment grade rated by Fitch, Moody’s or Standard ‘and Poor's. Cash flow risk ‘The Group is exposed to variability in cash flows such as future interest payments on variable rate debt. The company ‘manages this risk, where significant, by use of a syndicate of credit providers, financial instruments (such as interest rate swaps or caps) and by amending its pricing strategy. Environmental Risk Rising climate change concems have led and could lead to additional regulatory and legislative measures, or encourage further technological innovations, that decrease demand for refined fuel products or add to our costs. The Group expect the continued and increased attention on climate change to continue to lead to additional regulations designed to reduce greenhouse gas emissions and demand for refined fuel products. Such changes could have an adverse impact on our business including on our access to and realization of competitive opportunities in any of our strategic focus areas, a decline in demand for, oF constraints on our ability to sell certain products. As such we have developed an ESG strategy that is both ambitious and deliverable within a reasonable timeframe, The foundations of our ESG strategy are based on tangible and achievable goals, centred around energy efficiency projects and Carbon Capture, Usage & Storage (*CCUS"), allowing us to commit to a scope 1 and 2 emissions reduction of at least 65% by 2030. We firmly believe that wwe are at the heart of this transition and are instrumental in delivering this ambition without neglecting our critical infrastructure role or compromising energy security in the countries in which we operate. Operational risk ‘An interruption to the normal production ofthe Refinery as well as operational issues at the Refinery may have a material adverse effect on our business. The production at the Refinery could be adversely affected by a variety of extraordinary events, including fire, explosion, mechanical failures, protests causing the closure of primary access routes, and severe weather conditions, any of which could lead to reduce production for a period that could affect our financial performance, The Refinery management team simulate such occurrences at monthly emergency exercises to ensure that ‘the crisis management response plans used to mitigate such risks are fit for purpose. Geopolitical isk Geopolitical risks and changes inthe political and financial environment in oil and gas producing countries or countries in which we operate may affect the: I, the demand for oil products or otherwise affect our business. ‘As we operate and own assets in different geographic regions and countries, we are exposed to changes in thei political, regulatory and financial environment. Events such as the conflict in the Ukraine and the subsequent sanctioning of trade with the Russian Federation are a prime example of how geopolitical risks could impact on the Group's activities. The Group has taken steps to restructure its supply chain to ensure compliance with all current sanctions legislation and has the flexibility within its industrial assets to rebalance production and supply activities to meet the needs of our customers. Covid-19 Pandemic ‘The Group continues to closely manage the impacts ofthe pandemic and has proven its resilience and agility by successfully navigating those impacts. ‘Human Capital Ma ‘Our future success as we expand is dependent on our ability to attract and retain highly skilled and qualified personnel. We continue to appreciate the value of talent and the significance of placing the right people inthe right positions and seek to use existing talent within the Group wherever possible. We believe that our lean management structure, coupled with our support for entrepreneurial initiative, offers unparalleled career development opportunities and is a key retention feature. Each of our people can play an active role in our success. Fast track and executive development programmes are in place and formal succession planning is regularly reviewed. ‘The Group also operates a bonus and a long-term employee incentive scheme.State Oil Limited ‘Annual report and financial statements Strategic report (continued) forthe year ended 28 February 2022 Key performance indicators ‘Revenue has increased from $3,142.3m in the prior year to $9,989.9m in the current year, for a large part driven by the acquisition of Lindsey Oil Refinery. Net assets atthe balance sheet date totalled $549,8m or $604.4m on a CCS basis (2021 - net assets of $575.5m).. Profit forthe year before taxat ‘year profit included a $485.2m extraordinary item relating to the purchase of the refinery. Therefore, ona like-for-like basis ‘excluding extraordinary items the profit for the year before taxation has decreased from $20.0m in the year ending 28 February 2021 to $8.1m in the year ending 28 February 2022 (on a CCS Basis). ‘Statement by the directors on performance of their statutory duties in accordance with s172 Companies Act 2006 ‘The Group's Board of Directors consider they have acted prudently and in good faith and in a manner most likely to promote the success of the company for the benefit of its members and of its shareholders as a whole. ‘The Directors of the Company acted in accordance with a set of general duties, These duties are detailed in section 172 of the UK Companies Act 2006 in which, Directors must have regard to: the likely consequences of any decisions in the long-term the interests of the Group's employees the need to foster the Group's business relationships with suppliers, customers and others the impact of the Group's operations on the community and environment the desire for the Group to maintain its reputation for high standards of business conduct, and the need to act fairly as between members of the company ‘The following paragraphs summarize how the Directors fulfil their duties a) b) ° Long Term Strategy: The Group's strategic plan is designed to deliver a long-term beneficial impact through organic and acquisition growth. Specific business objectives are evaluated on a number of factors, including how they deliver the strategic plan, financial outcomes (using long-term cash flow modelling) and impact on business reputation, amongst others; Risk Management: We provide business-critical services to our clients, often in highly regulated environments. Itis therefore vital that we effectively identify, evaluate, manage and mitigate the risks we face, and that we continue to evolve our approach to risk management. See the section above "Principal risks and uncertainties"; ‘Stakeholders Engagement: Our objective is aligned with the expectations of our employees, customers, suppliers, shareholders, communities and society as a whole. i) Our People: ‘The health, safety and well-being of our people is one of our primary considerations in the way we do business. For our business to succeed we manage our people's performance, ensuring we operate as efficiently as possible. All employees complete business conduct training, relevant to their specific roles, which is refreshed periodically. The pursuit of the highest possible standards of business conduct is explicitly stated. ii) Business Relationships (Customers and Suppliers): Retaining existing customers, helping to support their growth and obtaining new customers is a key objective in the Group delivering its strategy. To do this, the Group works hard on developing. its customer relationships, continuously reviewing and enhancing its product offering and making multi-year commitments with key customers. At the same time the Group works closely with suppliers to optimize its supply chain and implement efficient processes. ii) Regulatory Matters: The oil & gas sector is among the most heavily regulated industries in the world and the Group, to ensure its impact on the environment and the community is as innocuous as possible, continues to monitor the development of national, regional and globally applied regulatory developments including the implementation of environmental regulations. has decreased from $505.2m to loss of $46.5m (CCS basis a profit of $8.1m). PreviousState Oil Limited ‘Annual report and financial stelements Strategic report (continued) forthe year ended 28 February 2022 4) Culture and Values: We understand the need to act fairly between the members of the Company and believe that our actions, as the Board of Directors, show that we behave responsibly towards all members and treat them fairly and equally, so they too may benefit from the successful delivery of our strategic goals. The Board recognizes the importance of having a very strong corporate culture. There are five core values thatthe Group aspires to instil in its employees, and they ae: i. Integrity i. Commitment to Excellence Drive and Dynamism Principled and Passionate v. Philanthropic By order of the board. b ‘Mr Winston Sanjeev Kumar Soosai Chairman & Chief Executive Officer Date: 6 October 2022Sute Oi Limited Annual report and financial statements forthe year ended 28 Februry 2022 Directors' Report The Directors present their report and the financial statements forthe year ended 28 February 2022 Principal activity ‘The principal activities in the Group during the year included refining, storage and transport in its Midstream division, and wholesale, marketing and retail in its Downstream division, underpinned by a global integrated supply and ‘optimisation organisation. Results and dividends ‘The loss after tax for the year amounted to $41.7m (2021: profit $499.3m). The net profit forthe year on a Current Cost ‘of Supply (CCS) basis amounted to $12.9m. ‘More details on the CCS approach and reconciliation to the statutory accounts is given in the strategic report. ‘The tors recommended dividends of $2.1m which were paid during the year (2021: $0.7m). Directors ‘The directors who held office during the year were as follows: ‘Mr Winston Sanjeev Kumar Soostipillai ‘Mr Don Camillo Emilio Borneo (resigned 29 May 2022) ‘Mr Rob Marrow (appointed 8 November 2021, resigned 27 July 2022) ‘Mr Julian Vickers (appointed 29 December 2021) ‘Mr Mark Ware (appointed 29 December 2021) ‘Mr Don Camillo retired after more than 15 years with the Group and the Directors wish him well for his retirement. Disclosure of information to auditor ‘The directors who held office atthe date of approval ofthis directors’ report confirm that, so far as they are each aware, there is no relevant audit information of which the company's auditor is unaware; and each director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the company’s auditors is aware of that information. Employees ‘The Group has 1,274 professional employees who are critical to its success and we aim to develop and retain talent to contribute to the long term success of the group. We provide employees with information on trading and other key developments. Continued communication ensures that the employees” views are considered when decisions are made which are likely o affect their interest. ‘The Group has continued to give full and fair consideration to applications for employment made by disabled persons, having regard to their respective aptitudes and abilities. The Group's policy includes the provision of suitable training & ‘opportunities to promote the career development of people with disabilities, and where practicable, the continued ‘employment of those who may become disabled during their employment, Research and Development ‘The Group continues to undertake research and development activities, either internally or through 3% party specialist partners, to support our refining activities, developing bio-fuel alternatives and the further the development of our carbon ‘eduction projects. Financial Instruments ‘The Group, through its Integrated Supply and Optimization team, uses a targeted range of financial instruments such as, forward foreign exchange and commodity contracts to manage exposure to risk and price volatility.State Oil Limited Annual report and financial statements Directors’ report forthe Year ended 28 February 2022 Political Contributions ‘Neither the company nor any ofits subsidiaries made any political donations or incurred any politcal expenditure during the eurrent and prior year. Engagement with suppliers, customers and others in a business relationship with the Group We have continued to nurture our strong reputation with consumers, along with our loyal customer base that we believe results from our innovative and comprehensive product and service portfolio that provides an excellent experience. We believe that we can leverage our established presence across the United Kingdom and our existing infrastructure and asset ‘base to access new revenue-generating opportunities, including through the provision of additional products (including ccarbon-neutral products) and services. At our retail sites, we believe our continued emphasis on integrating non-fuel products and services presents attractive cross-Selling opportunities within our business, cements our brand, and allows us to diversify revenue streams and attract customers even when they do not need to refuel. We partner with prominent brands such as TotalEnergies, Greggs, Spar and Morrisons. We continue to maintain strong, relationships with our partners which allows us to provide a competitive offering to our customers. Streamlined Energy and Carbon Reporting Greenhouse Gas (GHG) Emissions In line with the GHG Corporate Accounting and Reporting Standard, the Group continues to be engaged in a process aimed at reducing our energy usage and greenhouse gas emissions. The acquisition ofthe refinery atthe end of the previous financial year has transformed the Prax Group, not lest in terms of its emissions. This brings extra responsibility and since the end of the financial year we have set up a Sustainability Committee reporting to the Board. The role of the Committee is to assist the Board in overseeing the development and implementation of strategy and policies on sustainability, including environmental issues for the Group. It will have ‘oversight of all major Sustainability projects for the Group as a whole including initiatives to reduce climate change, such as the Carbon capture project and projects to lessen the Group's adverse impacts on the environment or increase its positive impact. ‘The Group measures Scope 1 & 2 emissions, the majority of which are generated at the refinery in respect of direct, ‘emissions and indirect emissions through the import of steam and electricity. Prior to the acquisition of the refinery, Scope 1 & 2 emissions for the Prax Group were generated from our premises, processes, warehouses, and offices and from a range of transport including company cars and lorries, which are owned and / or controlled by the company. These sources ‘continue to be measured and included in the total but make up a very small part ofthe total. ‘This year for the fist time, the Group has also calculated Scope 3.11 emissions from the use of sold products and from the transmission and distribution of electricity, in line with government best practice guidance, Methodology We have reported all of emission sources under the Companies Act 2006 (Strategic Report and Director's Reports) Regulations 2013 as required. We have calculated and reported our emissions in line with the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) and emission factors from the UK Government's GHG Conversion Factors for Company Reporting 2021 (reference “Introduction guidance”). ‘The reporting period is the financial year 2021 - 2022, the same as that covered by the Annual Report and Financial Statements. The boundaries of the GHG inventory are defined using the operational control approach. In general, the ‘emissions reported are the same as those which would be reported based on a financial control boundary. 10State Oit Limited Anal report and financial statements Directors’ report forthe year ended 28 February 2022 2021 - 2022 Emissions Tonnes CO? equivalent (eCO2e) Scope Item 2022 2021 Scope 1 Refinery Stack emissions, natural gas and transport 1,192,095, 3,567 Scope2 Steam and Electicity 99.844 1,899 Scope’3 Use of sold product, Electricity T & D 1144son* 12,837,610 3,466, Total * for sales to UK end-users. ** This year is the first year for which we have estimated Scope 3.11 emissions for the Group and we do not have like- for-like comparatives for Scope 3 forthe prior year Efficiency Measures Taken (2021 2022) Juding a steam 1) Implemented actions to improve energy efficiency at the Prax Lindsey Oil Refinery, conservation programme 2) Undertook feasibility study for CCUS atthe refinery and applied to participate in the Phase 2 cluster sequencing process run by the UK government's Department for Business, Energy and Industria Strategy 3) Planned for the construction of a pre-flash unit atthe refinery fo re-use waste heat and improve efficiency 4) Reduced fuel losses from flaring at the refinery 5) Eliminated LPS venting from the VDU2 Objectives for 2022 - 2023 1) Progress into Pre-FEED for the CCUS project. 2) Improve operating efficiency post-turmaround, continue o deliver significant improvements atthe refinery 3) Prepare for the Energy Savings Opportunity Scheme (ESOS) phase 3 compliance process. 4) Continue with our energy savings programme. '5)_ Prepare for replacement of waste heat boiler on FCCU unit to improve efficiency. ‘The Group's strategy to reduce our carbon footprint in other parts of the business includes: # Encouraging employees to purchase renewable technology vehicles such as hybrids ‘© Purchasing energy efficient equipment where appropriate and required in our premises, ‘© Replacing HVAC systems with energy-efficient equipment where possible, * Adopting behavioural change measures where possible. Prax Lindsey Oil Refinery has been selected by the UK government's Department for Business, Energy and Industry Strategy (BEIS) for the next phase of CCUS (carbon capture, utilisation and storage) sequencing, following the submission ofa plan to deploy carbon capture technology in order to reduce carbon emissions atthe site. I is one of 20 projects to proceed tothe due diligence stage ofthe Phase-2 Cluster Sequencing process, which in turn opens the potential to access government funding. The proposed plan will see innovative CCUS technologies employed to accelerate the Prax Group's decarbonisation ambitions, facilitated by connection to CO2 pipelines and storage under the North Sea. In addition, these technologies provide an opportunity for nationally important energy infrastructure to participate in the energy transition, The project is set to be a boost not just forthe refinery but for the Humberside area more generally and will support jobs and investment. ‘The Group will report on progress within our next set of financial accounts. "State Oil Limited ‘Annual report and Financial statements Directors’ report forthe year ended 28 February 2022 Matters covered in the strategic report Information on anticipated future developments and on the risks facing the company and the Group has been included in the Strategic Report. Auditor Pursuant to Section 487 of the Companies Act 2006, the auditor will be deemed to be reappointed and KPMG LLP will therefore continue in office. By order of the board Mr Winston Sanjeev Kumar Soosaipilla ‘Chairman & Chief Executive Officer Date: 6 October 2022 2State Oil Limited ‘Annual report and financial statements forthe year ended 28 February 2022 Statement of directors’ responsibilities in respect of the annual report and financial statements ‘The directors are responsible for preparing the Annual Report, Strategic Report, the Directors’ Report and the Group and parent Company financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare Group and parent Company financial statements for each financial year. Under that law they have elected to prepare the Group financial statements in accordance with UK-adopted international standards and applicable law and have elected to prepare the parent Company financial statements in accordance with UK accounting standards and applicable law (UK Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework. ‘Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of the Group’s profit or loss for that period. In preparing each of the Group and parent Company financial statements, the directors are required to: * Select suitable accounting policies and then apply them consistently; © make judgements and estimates that are reasonable, relevant, reliable and prudent; © for the Group financial statements, state whether they have been prepared in accordance with UK-adopted international accounting standards, ‘© forthe parent Company financial statements, state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; ‘+ assess the Group and parent Company's ability to continue as a going concem, disclosing, as applicable, matters, related to going concern; and ‘+ use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. ‘The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company's transactions and dis and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from ‘material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably. ‘open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularit 2INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF STATE OIL LIMITED Opinion We have audited the financial statements of State Oil Limited (“the Company”) for the year ended 28 February 2022 ‘which comprise the Consolidated Statement of Profit and Loss and Other Comprehensive Income, the Consolidated ‘and Company Balance Sheets, the Consolidated Statement of Cash Flows, the Consolidated and Company Statement ‘of Changes in Equity and related notes, including the accounting policies in note 2. In our opinion: ‘© the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 28 February 2022 and of the Group's profit for the year then ended; accordance with UK-adopted international ‘© the Group financial statements have been properly prepared i accounting standards; ‘© the parent Company financial statements have been properly prepared in accordance with UK accounting standards, including FRS 101 Reduced Disclosure Framework; and © the finan Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)") and applicable law. Our responsibilities are described below. We have fulfilled our ethical responsibilities under, and are independent of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe thatthe audit evidence we have obtained isa sufficient and appropriate basis for our opinion. statements have been prepared in accordance with the requirements of the Companies Act 2006. Going concern ‘The directors have prepared the financial statements on the going concem basis as they do not intend to liquidate the Group or the Company or to cease their operations, and as they have concluded that the Group and the Company's. financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for atleast a year from the date of approval of the financial statements (“the going concern period”). In ouir evaluation of the directors’ conclusions, we considered the inherent risks to the Group’s business model and analysed how those risks might affect the Group and Company's financial resources or ability to continue operations ‘over the going concem period. ‘Our conclusions based on this work: we consider that the di statements is appropriate; ‘we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Group or the Company's ability to continue as a going concern for the going concern period. ctors' use of the going concer basis of accounting in the preparation of the financial However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a {guarantee that the Group or the Company will continue in operation. Fraud and breaches of laws and regulations — ability to detect ‘Identifying and responding to risks of material misstatement due to fraud To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included: ‘© _Enquiring of directors and inspection of policy documentation as tothe Group's high-level policies and procedures to prevent and detect fraud, including the Group's channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud. ‘© Reading Board meeting minutes. © Considering remuneration incent schemes and performance targets for management, directors and sales staf. © Using analytical procedures to identify any unusual or unexpected relationships. 4We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. This included communication from the Group audit team to full scope component audit ams of relevant fraud risks identified at the Group level and request to full scope component audit teams to report to the Group audit team any instances of fraud that could give rise to a material misstatement at the Group level. ‘As required by auditing standards, we perform procedures to address the risk of management override of controls and the risk of fraudulent revenue recognition, in particular: ‘© the risk that Group and component management may be in a position to make inappropriate accounting entries; and the risk of bias in accounting estimates such as property valuations and ‘© the risk that wholesale and refinery revenue is misstated through recording revenues in the wrong period. We did not identify any additional fraud risks. ‘We performed procedures including: ‘+ Identifying joural entries to test forall fll scope components based on risk eiteria and comparing the identified entries to supporting documentation. These included those posted to unusual accounts with revenue and cash, ‘+ Assessing whether the judgements made in making accounting estimates are indicative of a potential bias. Identifying and responding to risks of material misstatement related to compliance with laws and regulations ‘We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management (as required by auditing standards), and from inspection of the Group's regulatory and legal the directors and other management the policies and procedures regarding ‘compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non- ‘compliance throughout the audit. This included communication from the Group audit team to full-scope component audit teams of relevant laws and regulations identified at the Group level, and a request for full scope component ‘auditors to report to the Group audit team any instances of non-compliance with laws and regulations that could give rise to a material misstatement at the Group level ‘The potential effect of these laws and regulations on the financial statements varies considerably. Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies’ legislation), distributable profits legislation, and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures inthe financial statements, fr instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: health and safety, data protection laws, anti-brbery, employment law, and certain aspects of company legislation recognising the nature of the Group’s activities. Auditing standards limit the required audit procedures to identify non-compliance with these Taws and regulations 10 enquity of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit wil not detect that breach, Context of the ability of the audit to detect fraud or breaches of law or regulation ‘Owing tothe inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures requited by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations. 6Strategic report and directors’ report ‘The directors are responsible for the strategic report and the directors” report. Our opinion on the financial statements does not cover those reports and we do not express an audit opinion thereon ‘Our responsibility isto read the strategic report and the directors’ report and, in doing so, consider whether, based on ‘our financial statements audit work, the information therein is materially misstated or inconsistent withthe financial statements or our audit knowledge. Based solely on that work: ‘+ we have not identified material misstatements in the strategic report and the directors’ report; our opinion the information given in those reports for the financial year is consistent with the financial statements; and ‘in our opinion those reports have been prepared in accordance with the Companies Act 2006. Matters on which we are required to report by exception Under the Companies Act 2006, we are required to report to you if, in our opinion: ‘© adequate accounting records have not been kept by the parent Company, or retums adequate for our audit have not been received from branches not visited by us; or ‘© the parent Company financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors’ remuneration specified by law are not made; or ‘© we have not received all the information and explanations we require for our audit. We have nothing to report in these respects. Directors’ responsibilities ‘As explained more fully in their statement set out on page 6, the directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, assessing the Group and parent Company's ability to continue as a going concem, disclosing, as applicable, matters related to going concem; and using the going concem basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so. Audi 's respons ur objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from ‘material misstatement, whether due to fraud or error, and to issue our opinion in an auditor's report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. ‘A. fuller description of our responsibilities is provided on the FRC’s website at ‘woww, fre-ong.ul/auditorsresponsibilties 16‘The purpose of our audit work and to whom we owe our responsibilities ‘This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those ‘matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, a8 a body, for our audit Work, for this report, or for the opinions we have formed jile Wabh Julie Wheeldon (Senior Statutory Auditor) for and on behalf of KPMG LLP, Statutory Auditor Chartered Accountants 1 Forest Gate Brighton Road Crawley RHIL 9PT. 7 October 2022 ”State Oit Limited ‘Annual report and financial statements for the year ended 28 February 2022 Consolidated Statement of Profit and Loss and Other Comprehensive Income ‘for year ended 28 February 2022 Note 2022 2021 s000s 8000s Revenue 4 9,989,888 3,142,276 Cost of sales 813,112) 6,034,542) Gross Profit 176,776 107,734 Other operating income 5 ams 3,637 Other administrative expenses (183,735) 72,408) Acquisition expenses 2 (14,999] ‘Total administrative expenses (183,735) (87394) Operating (LossyProfit 6 734) 23977 Gains on acquisition R : 500218, Financial income 8 6 2 Financial expense a (42,748) (19,089) [Net financing expenses (42,722) aso27) (Loss)Profit before tax (46,456) 505,168 ‘Taxation 9 4726 (5,906) (Loss)Profit for the year (41,730) 499,262 Other comprehensive income Items thatare or may be reclassified subsequently to profitor los: Currency translation differences any 1383 Hem that will not be reclasified subsequently to profit or loss: Property revaluation sages : Deferred taxation 15,683) 313) Other comprehensive income for the year, net of income tax 18,132 6040 ‘Total comprehensive income for the year C8) | _~505,302 ‘The notes on pages 24 1 56 form part of these financial statements 8State Oil Limited Annual report and financial statements forthe year ended 28 February 2022 Consolidated Balance Sheet at 28 February 2022 Note 2022 2021 $000 5000 Non-current assets Property, plant and equipment 10 3747s 488814 Intangible assets u 50/429 50,229 Deferred tax asset 1s 83,736 7498 Investments “4 225 2213 673,165 608,750 Current assets Inventories 16 441,406 547,718 Trade and other receivables 7 972,781 315,372 Derivative financial instruments ” 60,085 : Cash and eash equivalents, 18 156611 349592 1,580,853, 958,042 Total Assets 2,254,618 Current liabilities Borrowings 19 (539,548) 047,670) “Trade and other payables 20 (037,467) (637,713) Provisions short term « an, Derivative financial instruments ” 21,603) (6.599) ‘Tax payable aa) 858) 4,308,812) (793,959) 1 (135976) (159,513) 2 1) (148) Deferred tax tsbilities 1s (59.236) 20,672) (195,963) (197,333) 708,775) (091,292) Net assets 349,843, 575,500 Equity attributable o equity holders ofthe parent Share capital 23 1921 Revaluation reserve 23 32,651 Foreign exchange reserve 23 (809) Retained eamings 23 541737 Total equity 375,500 ‘The notes on pages 24 to 56 form par of these financial statements ‘These financial statements were approved by the board of directors on 6 October 2022 and were signed on its behalf by: Mr Winston Sanjeev Kumar Soosapilat Chairman & Chief Executive Officer Company registered number: 04112423 19State Oil Limited ‘Annual report an financial statements forthe year ended 28 February 2022 ‘Company Balance Sheet 0 28 February 2022 Note aon 2021 000s soos Non-curren assets Property, plant and equipment 0 na 104s Intangible assets ” 1393 1541 Investments B 10370 11255 35788 728 Current assets “Trade and ober eeivables 1” nse 55456 Ccashand cash equivalents 8 sé 156 725.685 35612 Total Assets 25140 7891 Current abities ‘Borrowings: 19 (5,521) (2,456) Trade and other payables 20 225,778) 61026) (2319) (3.482) Non-current iblit Borrowings 19: (10,148) (14,389) Deferred tax liabilities Is (189) (875) (0337) 526) ‘Total liabilities (241,636) (68,746) Net assets 3a08 Tos Equity atrbutable to equity older ofthe parent — ‘Shar capital 2 oa oat Revaluation reserve 2 9328 sno Foreign exchange eve 23 oan) e320) Retained canings 23 1202 ans otal equity 308 1044s ‘The notes on pages 24 to 56 form part ofthese financial statements ‘The Company has not presented its own income statement as permitted by Section 408 of the Companies Act 2006. The Company's loss forthe financial year amounted to $1,564,543 (202: profit $830,124) ‘These financial statements were approved by the board of directors on 6 October 2022 and were signed on its behalf by ee Mr Winston Sanjeev Kumar Soossipilla Chairman & Chief Executive Officer Company registered number: 04112423,State Oit Limited Annual report and Financial statements forthe year ended 28 February 2022 Consolidated Statement of Changes in Equity Foreign i Share Revaluation Retained Total capital reserve EMME amings Equity $7000 $000: 000s $1000 S000 Balance as at March 2020 190133964 (8162) 43,169 0892 Profit forthe year : = 49962 499,262 Otter comprehensive income forthe year + ast) 7383 a) ‘ota comprehensve income forthe year ~ G31) 7353499262 505302 ‘Transactions with owners, recorded diretlyin equity Dividends 2 a = Balance as at 28 February 2021 1921 32,651 (809) ‘$41,737 575,500 Share Revaluation Foreign exchange Total capt reserve RABE eavity 000s 00m $0008 00s Balance as at | March 2021 Leek 3265108) S437 55,300 Loss forte yar ; ; = ain (4170) (ter compreersive came forthe ear sn any = tse Toa comprehensive nse for the year all anim ann ease Trnstons wih owner corded det in eqy Divigens : : = 20) ass) Balance as a 28 February 2022 ee ee ‘The notes on pages 24 to 56 form part of these financial statements aState Oil Limited ‘Annual report and financial statements forthe year ended 28 February 2022 Company Statement of Changes in Equity Stare Revaluation (FO Retained Total apie "reserve EMME canings Equity 50001 00% $1000 S000 S000 Balance att March 2020 iar 5719 GIB) 4689984 Profit forthe year : Seo) Other comprehensive income forthe year : Dw Total comprehensive income othe year : a ee “Transactions with owners, recorded directly in equity Dividends nce as at 28 February 2021 1921 S719 G32) 4825 10,145, Share Revaluation .F2F8° Retained Total capa reerve SME earnings equity $7000 S000 $0005 $1000 S00 Balance as att March 2021 15719, 320) as tates Loss forthe year : : = (4564) (4,564) Property revaluation > oan : > ame CCureney Transition differences : aa a) Deferred txation 105 Total comprehensive income for the yar - 3609 Gz SH 718 ‘Transactions with owners, recorded directly in equity Dividends : Balance as at 28 February 2022 4921 9328 _ 2.647) __1202 __ 904 : = (2059) _,059) ‘The notes on pages 24 to 56 form part ofthese financial statementsConsolidated Cash Flow Statement for year ended 28 February 2022 Cash flows from operating activities (Loss)/Profit for the year “Adjustments for: ‘Amortisation of intangible assets Depreciation and impairment of tangible assets (Gainy/Loss onsale of property, plant and equipment Generation of biofuel certificates Purchase of biofuel certificates Sale of biofuel certificates Interest payable Interest receivable Gains on Acquistion Taxation ediycharge Working capital movements Movement in inventories Movement in trade and other receivables Movement in derivatives, “Movement in trade and other payables ‘Taxpaid [Net cash generated in operating activities Cash flows from investing activities Purchase of subsidiary (net of cash acquired) 2 Purchase of intangible fixed assets Purchase of tangible fixed assets Proceeds from sale of tangible fixed assets Interest Received Net cash used in investing activities Cash flows from financing activities ‘Repayment of loans Proceeds from borrowings “Movement in receivables finance and trade finance Payment of lease liabilities Interest paid Lease interest paid Dividends paid 23 [Net eash generated from financing activites [Net increase in eash and cash equivalents Cash and eash equivalents a the beginning of year Effect of exchange rate fluctuations on cash held a 28 February 18 ‘The notes on pages 24 to 6 form part of these financial statements. State Oi Limited ‘Annual report and financial statements forthe year ended 28 February 2022 202 2021 Noe $0005 soos (41,730) 499,262 oo 22 0,108 13469 166) 37 (715) (9520) (70,525) (21,979) 44036 3.480 2748 19.089 (26) 22) - (600218) (4,726) 5,906 36366 B30) 84,296 (8,864) (560,608) 20,034) G480) 3269 353197 163,175 8 errs G,626) (514), 046.985) 175,788 - (120076) 2989) o (64,066) (6,120) 1197 26 2 (65,832) (126,181) 54) (745) 502341 387 (110,247) (13,638) (7,902) (6,564) opis) (16,320) (1088) (17) (2,059) (694) 335,883 (40,139) 123066 9.468 34952 23282 (1,407) 2,202 156611 34952State Oil Limited ‘Annual eport and financial statements for the year ended 28 February 2022 Notes (forming part ofthe financial statements) 1 General information Stato Oil Limited is a private company, limited by shares, incorporated in England withthe Group trading as the Prax Group. The Registered Office i Harvest House, Horizon Business Village, 1 Brooklands Road, Weybridge, Surey, KTI3 OTS. The principal place of business is York House, 45 Seymour Street, London, WIH 757 United Kingdom. 2 Accounting policies ‘The Group financial statements consolidate those ofthe Company and its subsidiaries (together referred to as the “Group") and equity secount the Group's intrest in Joint Ventures. The parent company financial statements present information about the Company as a ‘separate entity and not about its Group, ‘The Group financial statements have been prepared and approved by the directors in accordance with international accounting standards in accordance with UK-adopted international accounting standards (“UK -adopted IFRS”). The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these group financial statements. ‘The Company has elected to prepare its parent company financial statements in accordance with FRS 101. The following FRS 101 ‘exemptions have been taken in respect ofthe parent company only disclosure information: + certain comparative information as otherwise required by IFRS; + astatement of cashflows; + the disclosure ofthe remuneration of key management personnel; + disclosure of related party transactions with other wholly owned members of the Group headed by State Oil Limited; and + certain disclosures in respect of financial instruments ‘The company has taken advantage ofthe exemption provided under $408 ofthe Companies Act 2006 not to publish its individual income statement and related notes, ‘The Group's functional currency is pounds sterling and the Financial statement presentation currency is United States dollars applied in accordance with the accounting policy in 2.12. ‘The accounting policies set out below have, unless otherwise stated, boen applied consistently to all periods presented in these Group financial statements. Judgements made by the directors, in the application ofthese accounting policies that have significant effet on the Financial statements and estimates with a significant risk of material adjustment in the next year are discussed in note 3, 21 Impact of new international reporting standards, amendments and interpretations ‘The Group has adopted the following amendments to IFRSs in these financial statements. ‘+ Amendments to IFRS 3: Definition of a Business has been adopted from 1 March 2020, The Group has applied this amendment to business combinations whose aquisition dates ae on or after 1 March 2020 in assessing whether it had acquired a business of a ‘group of assets. The deals of accounting policies are set out in note 2.5. ‘+ Amendments to References to the Conceptual Framework in IFRS Standards hasbeen adopted from 1 March 2020, The adoption does not have a material effect on the financial statements ‘© Amendments to IAS 1 and 1AS 8: Definition of Material hasbeen adopted from 1 March 2020, The adoption does not have a ‘material effect on the financial statements, + Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to introduce a new definition for accounting estimates effective date January 2023. The adoption does not have a material effect on te Financial statements, ‘© Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statements 2 Making Materialty Judgements effective date January 2023. The adoption does not have a material effect on the financial statements. ‘+ Amendments to IAS 12 Income Taxes ~ Deferred Tax Related 19 Assets and Liabilities Arising from a Single Transaction effective date January 2023. The adoption doesnot have a material effect onthe financial statements. 24State Oil Limited ‘Annual report and financial statements Notes (continued) forthe year ended 28 February 2022 22 Measurement convention ‘The financial statements are prepared on the historical cost bass except for derivatives measured at fair value, the valuation of inventories and Biofuel certificates at market value and property, which is measured at fir valu. 23 Goingeoncern ‘The financial statements have been prepared on a going concer basis which the Board considers tobe appropriate for the following ‘The directors have prepared financial forecasts including cashflow forecasts for the Group forthe period to 31 December 2023 which Include reasonably possible downside scenarios arising from the continuing effects of COVID-19 andthe supply chain disruption and inflationary pressures generated by Russia's invasion of Ukraine. Having carried out extensive analysis and assessment of various risks con the business, the directors are satisfied that the Group and Company will have suffieient funds to meet its Iiabilities as they fll due for that period ‘The Group's customers operate in a wide range of different sectors reducing the risk ffom a high eustomer concentration in sectors which may be significantly impacted by a downturn. The Group has prepared detailed base forecasts and downside scenarios to stress tes, taking into account, key uncertainties and risks that could impact Group's financial performance. Stress testing specifically focused ‘on impact on volume demand and product margins arising from potential COVID-19 lockdowms, fuel supply interruptions and market ‘olatly ‘The Board, after reviewing the Group and Company medium term financial position as detailed in the cash flow forecasts is of the pinion that, taking account of severe but plausible downsides, the Group and Company have adequate resources to continue to meet their liabilities over the going concer period, In reaching this conclusion, the Board has considered the following factors: ‘+ Reduction in volumes in the Downstream business ~the current year saw a return to pre pandemic levels of demand, however reductions in demand have been factored into the forecasts due tothe cost-of-living squeeze; ‘© Refining margins ~ reduced by approximately $0% (returning to normal level); ‘© Liquidity - increased the base rate by 3% on the variable facilities within the Group. Current available cash and unutlised Joan facilities across the group provides significant headroom for committed expenditure and other forecast cash flows over ‘the going concer assessment period. The securitisation Facility isa rolling Facility with curent expiry of February 2024; ‘The Group’s liquidity remained strong and continued to comply withthe financial covenants durin the forecast period to 31 December 2023 under both base and downside scenarios. Consequently, the Board is confident that the Group and Company will hve sufcient funds to continue to meet their Hibilities as they {all due for atleast 12 months from the date of approval of the financial statements and therefore have prepared the financial staerents ‘0n a going concer basis. 24 Basis of consolidation Subsidiaries Subsidiaries are entities controled by the Group. The Group controls an entity when itis exposed to, or has rights to, variable returns ‘rom its involvement wit the entity and has the ability to affect those returns through its power over the entity. In asessing control, the ‘Group takes into consideration potential voting rights. The acquisition date isthe date on which control is transfered to the acquirer. ‘The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until ‘the date that control ceases ont Arrangements {A joint arrangement isan arrangement over which the Group and one or more third partes have joint control. These joint arrangements ar in tum classified as ‘Joint ventures whereby the Group has rights tothe net assets ofthe arrangement, rather than rights tits asses and obligations Tor its bilities; and ‘© Joint operations whereby the Group has rights to the assets and obligaions forthe lisilities relating tothe arrangement, Joint operations ‘Where the Group isa party to join operation, the consolidated financial statements include the Group's share ofthe joint operations assets and liabilities, as well asthe Group's share ofthe entity's profit o loss and other comprehensive income, on a line-by-line bass. Transactions eliminated on consolidationState Oil Limited Annual report and financial statements Notes (continued) for the year ended 28 February 2022 Intra-Group balances and transactions, and any unrealised income and expenses arising from intr-Group transactions, ae eliminated, Unrealised gains arising from transactions with equity-accounted investes are eliminated against the investment to the extent ofthe {Group's interest in the investee. Unrealsed loses are eliminated in the same way as unrealised gains, but only tothe extent that there {s no evidence of impairment. ‘The Consolidsted Financial Statements include the accounts of State Oil Limited and the accounts of all entities controlled by the ‘company. The Group determines whether it has controlling interest in an entity by fist evaluating whether the entity isa voting imerest entity or a variable interest entity. Voting interest entities are entities in which the company has a controling financial interest, through ownership of the majority ofthe entities’ voting equity interest, that give the company contro, are consolidated by the company. ‘Variable interest entities ae entities in which the company lacks suficient voting equity interest but is exposed to variable returns from its involvement with the entity and has the ability wo affect those returns through its power over the entity. One such entity that is included in the consolidated financial statement is PraxsGlobal Financial Services DAC, a Special Purpose Entity (SPE) used forthe securitisation of certain trade receivables, Both voting interest entities and variable interest entities are included inthe consolidated financial statements from the date that control commences until the date the control ceases 25 Business combinations ‘Subject to the transitional relief in JFRS 1, all business combinations are accounted for by applying the acquisition method. Business ‘combinations are accounted for using the acquisition method as atthe acquisition date, which isthe date on which controls transferred to the Group. ‘The consideration for the acquisition ofa subsidiary isthe far value of the assets transfered, the libilties incurred to the former owners and of any equity interest issued by the Group. Identifiable assets acquired, liabilities and contingent liabilities assumed are ‘measured initially at ther fair values atthe acquisition date. Contingent liailtes represent obligations in respect of past events where ‘acash outflow is possible rather than probable, Goodwill represents the difference between the consideration andthe fur value ofthe net asets acquired. Acquistion related costs are ‘expensed as ineured. Acquisitions on or after! January 2010 For acquisitions on or aftr 1 January 2010, the Group measures goodwill atthe acquisition date as the fair value of the consideration transferred; plus the recognised amount of any non-controlling interests in the acquiree; plus the fair value of the existing equity interest in the acquire; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gan is recognised immediately in profit or los. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred ‘Any contingent consideration payable is recognised a fur value atthe acquisition date IF the contingent consideration i classified as equity, itis not remeasured, and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss. On a transaction-by-transaction basis, the Group elects to measure non-controlling interests, which have both present ownership interests and are entitled toa proportionate share of net asets ofthe acquiree in the event of liquidation, ether a its fair value ora its proportionate interest in the recognised amount of the identifiable net assets of the aequiree atthe acquisition date. All other non- controlling interests are measured at thee fir value atthe acquisition date Acquisitions prior to | March 2017 IPRS! grants certain exemptions from the full requirements of Adopted IFRSS in the transition period The Group and Company elected not to restate business combinations that took place prio othe 1 March 2017 transition dae. In respect of aequsiions prior to 1 March 2017, goodwill s included atthe transition date value on the basis of its deemed cost, which represents the amount recorded under United Kingdom GAAP which was broadly comparable save that only separable intangibles were recognised and goodwill was, amore. On transition amortisation of goodwill ceased as required by IFRSI. 26 Revenue Revenue is measured atthe fair value ofthe consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of busines, net of discounts, VAT and ober sales-elated taxes. Revenue is recognised at the point of sale fr all streams being fuel, convenience and fast-food sales. Dealerships ‘Within the group there are a number of dealer arrangements in place where a third party is responsible for Some part ofthe operation Cof.site. When another party is involved in providing goods or services toa customer, the Group determines whether the nature of itsState Oil Limited ‘Annual report and financial statements Notes (continued) forthe year ended 28 February 2022 arrangement isa performance obligation to provide the specified goods/services itself (Group ating as a principal) or to arrange those goods/servces to be provided by the other party (Group is an Agent). In making tis assessment, a principal is identified as being the party that obtains control of the assets which are then transfered to the customer. When the Group acts as principal, revenue is recognised in respect of the gross amount of eonsideration paid by the customer. When the group does not control the goods which are transferred it acts as an agent and recognises the revenue only in the amount of any fee or commission in which itexpects to be entitled inexchange for arranging forthe specified goodsservices to be provided by the other party. Sale of goods Revenue is recognised when economic benefits associated with te sale are expected to flow tothe Group and control of the goods have passed tothe customer. This is usually when ttle and insurance risk has passed tothe customer when the customer has receive delivery ‘of the product by tank, truck or product carrer. Following the transfer of ttl, the buyer ha fll discretion over the manner of distribution and price to sll the goods, has the primary responsibility when on selling the goods and bear the risks of obsolescence and loss in relation to the goods. A receivable is recognised by the Group when the goods are delivered tothe customer as this represents te point in time at Which the right to consideration becomes unconditional, as only the passage of time is required before payment is due. Under the Group's standard contract terms, customers do nat have aright to retum once the delivery is complete unless the product supplied does not met the ‘required specifications. The Group has robust contol measures in place including adequate testing and sampling procedures to ensure the ‘product supplied meets the specifications contracted with the customer. The Group uses its accumulated historical experience and considers itis highly probably that a significant reversal in the cumulative revenue recognized will not occur given the insignificant level of returns cover previous years. ‘The treatment of fuel duty inthe UK is determined by local laws and regulations as to when the duty becomes legally payable and who caried the risks and obligations tothe tax authorities. ‘The group recognises revenve gross of fuel duty as the obligation to pay the duty is at purchase from the supplier ora the time when the goods are removed from the bonded warehouse, therefore the company’s role inthe transaction is that of principal. The fuel duty is set and payable at this point and the rsk of recovering this element ofthe cost through the sale of fue! tothe end customer ies withthe group, Revenue from services Revenve from the provision of services is recognised over the period the service is provided tothe customer. 27 Leases lessee ‘The Company a ‘The Company assesses whether a contracts or contains a lease, at inception ofa contract. The Company recognises aright-of-use asset and a corresponding lease lability with respect to all ease agreements in whichis the lessee, except for short-term leases (defined as leases witha lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense ona straight-line basis over the term of the lease unless another systematic basis. ismore representative of tho time pattem in which economic benefits from the leased asset are consumed, ‘The lease liability is initially measured atthe present valu of the lease payments that are not paid a the commencement date, discounted by using the rate implicit in the lease. IF this rae cannot be readily determined, the Company uses its incremental borrowing rae Lease payments included in the measurement ofthe lease liability comprise: fixed lease payments (including in-substance fixed payments), less any lease incentives; variable lease payment that depend on an index or rate, intially measured using the index or rate atthe commencement date; the amount expected to be payable by te lessee under residual value guarantes;, the exercise price of purchase options, ifthe lessee is reasonably certain to exercise the options; and payments of penalties for terminating the lease, ifthe lease term reflects the exereiseof an option to terminate the lease. ‘The lease laity is included in ‘Creditors'on the Balance Sheet. The lease liability is subsequently measured by increasing the carrying mount to reflect intrest onthe lease liability (using the effective interest method) and by reducing the carying amount to reflect the lease payments made ‘The Company remeasures the lease lability (and makes a corresponding adjustment tothe related right-of-use asset) whenever: the lease term has changed or there is a change in the assessment of exercise ofa purchase option, in which case the lease lisilty is remeasured by discounting the revised discount rate the lease payments change due to changes in an index or rate ora change in expected payment under a guaranteed residual vale, in ‘which cases the lease liability is remeasured by discounting the revised lease payments using the inital discount rate (unless the lease payments change is due to achange ina floating interest rate, in which case a revised rate i used). arState Oil Limited ‘Anqual report and Financial statements Notes (continued) for the year ended 28 February 2022 ‘a lease contrac is modified and the lease modification isnot accounted for asa separate lease, in which ease the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. ‘The Company did not make any such adjustments during the periods presented. ‘The rightof-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the ‘commencement day and any intial direct costs. They are subsequently measured at cost less accumulated deprecation and impairment losses, The right-of. use assets are included inthe ‘Tangible Fixed Assets lin in the Balance Sheet ‘Whenever the Company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which itis located or restore the underlying asset to the condition required by th terms and conditions ofthe lease, a provision is recognised and measured under IAS 37. The costs are included inthe related right-of-use asset, unless those costs ar incurred to produce inventories. Rightof-use assets are depreciated over the shorter period of lease term and useful life ofthe underlying asset. Ia lease transfers ‘ownership ofthe underlying asst or the cost ofthe rightof-use asset reflects thatthe Company expects to exercise a purchase option, ‘the related right-of-use asso is depreciated over the useful life of the underlying asset. The depreciation starts atthe commencement date of the lease. ‘The Company applies IAS 36 to determine whether a rightof-use asset is impaired and accounts for any identified impairment loss as eseribed in note 2.10. 28 Intangible assets and goodwill Goodwill Goodwill rises on the acquisition of subsidiaries and represents the excess ofthe consideration transfered over the acquisition date fair value ofthe net asset acquired. Goodwill is stated at cost less any accumulated impairment losses. Goodwill allocated to cash ‘generating units and is not amortised buts tested annually for impairment. In respect of equity accounted investes, the carrying amount ‘of goodwill s included in the carrying amount of the investment in the investee. Other intangible assets Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense as incurred. (Other intangible assets tha are acquired by the Group are stated at cost less accumulated amortisation and accurnulated impairment losses. Amortisation Amortsaton is charged tothe income statement on a straight-line basis over the estimated useful ives of intangible asets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically tested for impairment at each balance sheet date. Other intangible assets are amortised from the date they ae available for use. The estimated useful lives areas follows: Software 310 10 years 2.9 Property, plant and equipment Frechold and long leaschold interests inland and buildings excluding the Refinery asets are shown a fair value, based on valuations by independent valuers. Valuations are performed with sufficient regularity to ensure that the fair value of arevalued asset doesnot differ materially from its carying amount, Increases on revaluation ae credited to other comprehensive income and shown ina revaluation reserve in equity. Decreases that offset previous increases in value are debited o other comprehensive income and the reserve with any ditional decreases charged against profit and loss. Other property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Where pars of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment. Refinery tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses. Where parts ofan item of tangible fixed assets have diferent useful lives, they are accounted for as separate items of tangible fixed assets. The Refinery assets are held at deemed cost. ‘Assets inthe course of construction are capitalised and included in a separate category within tangible fixed assets. Once the assets ‘under construction come into operation they are reclassified tothe appropriate asset category and from that point they are depreciated, Capitalisation of costs in respect of software intangible assets that are under construction and that arise from internal development ‘commence when all the following conditions ae met: ‘© the technical feasibility of completing the intangible asset so that it wll be available for use has been established; ‘© theimention to complete the intangible asset and use it, 28State Oil Limited ‘Annual report and Financial statements Notes (continued) forthe year ended 28 February 2022 ‘+ the ability to us the imangible asset ‘+ how the intangible asset will generate probable future economic benefits has been established including whether it isto be used intemally, the usefulness ofthe intangible asset; ‘+ the availabilty of adequate technical, financial and other resources to complete the development and to use the intangible asset; and ‘+ the ability to measure reliably the expenditure atibutable to the intangible asset during its development Depreciation is charged tothe income statement ona straight-line bais over the estimated usefl lives of each part ofan item of property, plant and equipment. Freehold property and land is not depreciated. The property asses relate primarily to petrol station sites which are ‘not depreciated on the grounds that it would be immaterial asthe properties are maintained regularly. Carrying values are reviewed annually for impairment and all repairs and maintenance costs are expensed inthe profit and loss. ‘The estimated useful lives areas follows: Leasehold property ‘over the period of the lease Plant and equipment 6-25 years depending on the nature ofthe asset Fixtures and fitings 410 years Refinery Asset 20 years Buildings, 3-15 years for Property, plant and vehicles Depreciation methods, useful lives and residual values are reviewed at each balance sheet date and adjusted prospectively if theres an indication ofa significant change since the last reporting date. 210 Impairment of non-financial assets excluding inventories and deferred tax assets ‘The carrying amounts of the Group's non-financial assets other than inventories and deferred tx assets are reviewed at exch reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assets recoverable ammount is ‘estimated. For goodwill, the recoverable amount is estimated each year atthe same time, ‘The recoverable amount ofan asset or cash-generating units the greater ofits value in use and its fir value less costs to el. In assessing, value in use, the estimated furure cash flows are discounted to their present value using a pre-tax discount rate that reflects curent ‘market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, asses that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other asses or groups of asses (the “cash-generating unit"), The goodwill acquired ina ‘business combination, fr the purpose of impairment testing, i allocated to cash-generating units, or (“CGU"). Goodwill acquired ina business combination is allocated to groups of CGUs that are expected to benefit fom the synergies ofthe combination, ‘An impairment loss is recognised i the carrying amount ofan asset or its CGU exceeds is estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce thecarrying amount ‘of any goodwill allocated othe unis, and then to reduce the earying amounts ofthe other assets in the unit (group of units) on a pro rata basis, ‘An impairment loss in respect of goodwill snot reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased orno longer exists. An impairment loss i reversed if there thas been a change in the estimates used to determine the recoverable amount. An impairment loss s reversed only tothe extent thatthe asset's carrying amount does not excoed the carrying amount that would have been determined, net of depreciation or amortisation, if ‘no impairment loss had been recognised. 241 Inventories Inventories of petroleum products held for trading are valued at market value by reference to quoted market pres at the year end. Duty ‘ald on stock is valued at cos. This isa departure from both IFRS IAS 2, which requires stock tobe carried a the lower of cost and net realisable value, and ffom the curent cost accounting rules of the Companies Act 2006 which require any recognised differences ‘between market value and historical eost tobe taken tothe revaluation reserve. In the view of the directors, the exemption ftom IAS2 is required because the stocks of petroleum products held are marketable ‘commodities traded on international markets and are therefore immediately saleable. The Group also uses derivative contracts to protect its margin and manage is exposure from fluctuations reeorded between purchase prices and market values. Inall other aspects the accounts are prepared in accordance with IFRS. Inventory of other products including inventories held by the refinery is stated at the lower of cost and net realsable value, being the estimated selling priceless costs to complete and sell. Cost is ‘based on a first in first out bass. IF inventory is impaired, the loss is recognised in the profit and loss. 29State Oi Limited ‘Annual report and financial statements Notes (continued) for the year ended 28 February 2022 212 Foreign curreney ‘The accounts are presented in United States dollars. This is to recognise the Group's increased international presence and the oil industy’s use of United States dollars asa bass to transact business. ‘Transactions in foreign currencies are translated tothe respective functional currencies of Group entities at the foreign exchange rate ruling tthe date of the transaction, Foreign exchange differences arising on translation are recognised in the incame statement within the cost of sale on the basis that these differences result from the purchase and sale of erude and petroleum products and the related hedging activities. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency atthe foreign exchange rate ruling at that date, Non-monetary assets and liabilities that are measured in terms of historical cst in a foreign currency ar translated using the eXchange rate af the date ofthe transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslted tothe functional currency at foreign exchange rates ruling at the dates the fair value was determined, ‘The assets and liabilities ofall operations, including goodwill and far value adjustments arising on consolidation, are transated to the Group's presentational curreney, United States dollars, at foreign exchange rates ruling at the balance sheet date. The revenues and ‘expenses of operations are translated at an average rate for the year where this rate approximates tothe foreign exchange rates ruling at the dates ofthe transactions. Exchange differences arising from this translation of operations into the presentational currency are reported as an item of other comprehensive income and accumulated inthe translation reserve, When a foreign operation is disposed of, such that conto, joint control or significant influence (as the case may be) is lost, the entire accumulated amount in the translation reserve, is recycled to profit or los as par of the gain oF loss on disposal. When the Group disposes of only part ofits interest in a subsidiary tha includes a foreign operation while still retaining control, the relevant proportion ofthe accumulated amount is reattributed to non-controlling interests 243 Financial instruments 0 Recognition and initial measurement ‘Trade receivables issued are initially recognised when they are originated, All other financial assets and financial liabilities ae initially recognised when the company becomes a party to the contractual provisions ofthe instrument. ‘A financial asset (unless itis a trade receivable without a significant financing component) or financial lability i intially measured at {hic value plus transaction costs tha re directly atibutable to its acquisition or issue, A trade receivable without a significant financing ‘component (as is normally the case from Group trading activity) is initially measured at the transaction price. Classification and subsequent measurement Financial assets @ Classification (On inital recognition, a financial asset is classified as measured at: amortised cost; fair value in other comprehensive income (for debt ‘or equity investments or fir value through the profit and loss (‘FVTPL.), Financial assets are not reclassified subsequent to ther inital recognition unless the Company changes is business model for managing financial assets in which case all affected financial asets are reclassified on te ist day ofthe first reporting period following the change inthe business model. ‘A financial asset is measured at amortsed cost if it meets both ofthe following conditions: + itisheld within a business model whose objective isto hold asses to collect contractual cash flows; and its contractual terms give rise on specified dates to ash flows that are solely payments of principal and interest on the principal amount oustanding All financial assets not classified as measured at amorised costo fur value through other comprehensive income including all derivative ‘nancial asses are measured a fie value through profit and loss. ‘The Group is obligated to ensure that road transport fuel contains a certain perentage of biofuels. Obligations are satisfied by the 6 . Ett of movers ine xange 018 ism ‘3 : 2229 Feb 209 ust vas210 sans em e470 ‘28 ebay 2021 usggn___aaan a sn : sale wi [Ferry 2 109 suse 53 ssState Oil Limited Notes (continued) ‘Annval report and financial statements for the year ended 28 February 2022 0 Property, Plant and equipment Property has restrictions in ttle in the form of fixed and floating charges and ar pledged as security to support bank loans. ‘The historical cost of property assets is $199m (2021: $208m) with anet book value of $118m (2021: $123.4m). Properties whose fair value can be measured reliably are held under the revaluation model and are carried ata revalued amount, ‘being fair value atthe date of valuation less any subsequent accumulated depreciation and subsoquemt accumulated impairment losses. The fai value ofthe properties is usually considered to be the market value. The fechold and leasehold properties are revalued by an extemal value at leat every five yeas. Inthe intervening period, the directors will review the fair value by applying similar methodology asthe independent valuations experts and make the necessary adjustments tothe financial satements to ensure the value reflected remains appropriate ‘The increase in the revaluation reserve relates to the revaluation of the frechold and long leasehold propery sites. 63 sites acquired with HKS Holdings in 2019 were revalued by the directors ata market value of $183m as at 28 February 2022. The valuation was ‘based on various factors including future income and current market prices, CBRE carried outa valuation on the other properties in the portfolio ata market value of $34m. 40Notes (continued) Siate Oil Limited ‘Annual report and financial statements forthe year ended 28 February 2022 10 Property, Plat nd caipment Company - eo Machinery rk construction a som s0o0 sw so Bane Mah 20 so an ren am Ett movements oi xtange a 0 vs bac 2 Fb 221 ia was a Contest os art Moh 20 1 tao nase = sane 2s : - es revatio aa : - ane su Tae ‘6 om ar) Dios os : : San tect ofroecesin fpr: om __« ow» @ tao Bae 8 Fay 2102 Depreciation and impairment Balance at | March 2020, 170 339 im : 2210 Depreciation charge forthe year M6 . 203 : 389 Depreciation charge forthe year- Right of Use 7 : . 17 Mfc of movement in frcgn exchange Balance at 28 February 2021 Depreciation and impairment Balance at 1 March 2021 539 on 2.45, : 347s Depreciation charge for the year 191 7 1st : Er Depreciation hare forthe year - Right of Use 61 ’ Asset Transfer 126 : Disposal aay, Effect of movements in foreign exchange () ) lance at 2 February 2022 a2 358 [Netbook vale ‘At 29 February 2020 30 8258 950 7 958 ‘At 28 Februny 2021 ma 9039 1.83 ‘A128 February 2022 6 12399 7 13 aNotes (continued) 11 otangibtes Group Cost Balance as at 1 March 2020 Additions Asset transfer Effect of movements in foreign exchange Balance at 28 February 2021 Balance as at | March 2021 ‘Additions ‘Asset transfer Effect of movements in foreign exchange Balance as at 28 February 2022 ‘Amortisation and impairment Balance as at 1 March 2020 Amortsation for the year Effect of movements in foreign exchange Balance at 28 February 2021 Balance as at ! March 2021 ‘Amortisation forthe year Asset transfer Effect of movements in foreign exchange Balance as at 28 February 2022 [Net book value Balance as at 29 February 2020 Balance a at 28 February 2021 Balance as at 28 February 2022 State Oi Limited ‘Annual report and financial statements for the year ended 28 February 2022 Software Goodwill Total $'0005 10005 70005 2.766 44.19 47185 7 : 1 3172 2.989 357 52,605 1.068 322 103 1493 1493 632 129 1,698 44419 46,117 1,610 48,619 30,229 4109) 46,320 31,722 2.483) oy 42Notes (continued) 11 Intangibles ‘Company Cost Balance as at { March 2020 Additions _Eflect of movements in foreign exchange Balance as at 28 February 2021 Balance a at | March 2021 Additions ‘Asset Transfers Effect of movements in foreign exchange Balance as at 28 February 2022 Balance as at 1 March 2020 Amortsation forthe year Effect of movements in foreign exchange Balance at 29 February 2021 Balance as at | March 2021 Amortsation for the year Asset Transfers Effect of movements in foreign exchange Balance a at 28 February 2022 Net book value Balance as at 29 February 2020 Balance as at 28 February 2021 Balance as at 28 February 2022 Software 70008 2,743 239 3,002 3,002 ns 234 «2p 3.230 1,061 300 100 146 ais 129 8) 1837 Isat State Oil Limited ‘Annual report and Financial statements forthe year ended 28 February 2022 Goodwill considered significant in comparison to the Group's total carying amount of such assets has been allocated fo cash generating units or groups of cash generating units as follows: KS Holdings and its subsidiaries Harvest Energy Limited King Steet Holdings (UK) Lid Goodwitt 2022 ‘$0005 38812 6310 1,198 2021 5000s 40,797 6574 1248 “The Group tests goodwill annually for impairment, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The carrying values are assessed for impairment purposes by calculating the value in use using the net present value (NPV) of future cash flows arising from the originally acquired businesses discounted ata post-ax rate of 8.4% (2021: 8%) Holdings by reference to the approved budget for a year followed in both cases by 2 2% long term growth rate (2021: 2%) considered applicable to the United Kingdom market. There are considered to be no sensitivities that may reasonably be expected in the curent ‘market that would impact on the assessments made. 43State Oil Limited Annual report and financial statements forthe year ended 28 February 2022 Notes (continued) 12 Acquisitions Acquisitions in the prior year ‘On 28 February 2021, the Group acquired all of the ordinary shares in Total Downstream UK Limited, a holding company for Total Group's investment in Total Lindsey Oil Refinery Limited. Following the completion of acquisition, the company was renamed as Prax Downstream UK Limited and its subsidiary renamed as Prax Lindsey Oil Refinery Limited. The acquisition isa step towards the long-term strategy of the Group to be fully integrated across the oil value chain from upstream to downstream. The acquisition was completed on the close of business of the financial year and hhence there was no contribution from this acquisition to the consolidated revenues or profits ofthe Group for the financial year. ‘The acquisition had the following effect onthe Group's assets and liabilities: Acquiree’s net assets atthe acqui Property, plant and equipment 279,300 Investments in Joint venture 2213 Inventories 470,478 Cash and eash equivalents a1 “Trade and other receivables 7,182 ‘Trade and other payables 10,474) Deferred tax assets 64447 Deferred tax liabilities (12,260) Provisions and contingent liabilities 6.529) Net identifiable assets and liabilities 67,798 Gain on acquisition (00,218) Net identifiable ascets and liabilities excluding Gain on acquisition 167 380 Consideration: Cash paid on date of acquisition 120,516 Post completion payments in cash 47068 ‘Total Consideration 1675380 Gains on acquisition arose due to synergies identified on serving the Group's own captive market inthe inland marketing segment wit the target refinery’s production. The gains also arose due to the low cracking margins mediately prior to the acquisition as a result of Covid-19 crisis. The management believe that there will be improvement in refining margins and hence the acq ly to generate more cash than Covid- 19 period. Acquisition related costs ‘The Group incurred one-off acquisition related costs of $14,990,000 related to stamp duty, legal and professional fees.State Oil Limited ‘Annual report and financial statements Notes (continued) for the yea ended 28 February 2022 13 Tavestments in subsidiaries and jointly controlled entities ‘The Group and Company have the following investments in subsidiaries which are all included in the consolidation: Company Principal place of business/ Principal activity Class of Ownership Registered office address Sharesheld 2022 2021 Prax Petroleum Limited Harvest House* Sale of petroleum products Ordinary 100% 100% and renewables Prax Terminals Limited Harvest House* Storage erminalownership Ordinary 100% 100% and management Prax Limited + Harvest House* Holding company Ordinary 100% 100% Harvest Energy Retail Group Limited Harvest House* Holding company Ordinary 100% 100% Harvest Energy Retail Holdings Ltd Harvest House® Holding company 100% 100%. Harvest Energy Retail Lid Harvest House* Holding company 100% 100% H.K‘S. Holdings Limited Harvest House® Holding company 100% 100%. HLK‘S. Motos Limited Harvest House Retailof fuel products Ordinary 100% 100% HKS. Retail Limited Hrrvest House® Retalloffuel products Ordinary 100% 100% Brobot Group Limited Harvest House® Holding company Ordinary 100% 100% Brobot Petroleum Limited Harvest House* Retail of fuel products Ordinary 100% 100% Platinum Asset Investment Limited Harvest House Retail of fue products Ordinary 100% 100% Harvest Energy Limited Harvest House* Sale of petroleum products Ordinary 100% 100% ‘and renewables Harvest Energy Aviation Lid Harvest House* ‘Sale of aviation fuel products Ordinary 100% 100% King Street Holdings (UK) Limited Harvest House* Holding company Ordinary 100% 100% Retail Fuels Lid Harvest House* Retail of fuel products Ordinary 100% 100% Harvest Energy Group Limited Harvest House ‘company Ordinary 100% 100% Prax Fuels Limited Harvest House* Dormant company Ordinary 100% 100% Prax Shipping Limited Harvest House* Shipping Ordinary 100% 100% Prax Derivatives Limited Harvest House* Dormant company Ordinary 100% 100% Harvest Retail Holdings) Limited Harvest Howse Holding company Ordinary 100% 100% Harvest Retail Limited Harvest House* Retail of fuel products Ordinary 100% 100% Prax Oil Limited Harvest House* Dormant company Ordinary 100% 100% Blue Ocean Associates Limited Harvest House Dormant company Ordinary 100% 100% Breeze Retail Limited Harvest House* Retail of fuel products Ordinary 100% 100% ‘Axis Logistics Limited Harvest House* Logistic services Ordinary 100% 100% Prax UK Limited Harvest House* Dormant company Ordinary 100% 100% Harvest Energy Marine Limited Harvest House Dormant company Ordinary 100% 100% Harvest Energy (Fuel Cards) Harvest House* Fuel cardsales of petoleum Ordinary 100% 100% Limited products Harvest Energy (Dealerships) Harvest House Retail of fuel products Ordinary 100% 100% Limited Harvest Energy (BLA) Limited Harvest House® Retail of fel products Ordinary 100% 100% Prax Overseas Holdings Limited Harvest House* Holding company Ordinary 100% 100% Prax Refining Limited Harvest House Holding company Ordinary 100% : PraxSA 10 Rue De Rive Regional office Ordinary 100% 100%. Se Etage, 1204 Geneva, Switzerland Prax Terminal Belgium BV ‘Campus Coppens Storage terminal ownership Ordinary 100% 100% Rubterijschoo! 6 and management 2930 Brasschaat, Belgium Prax Belgium Holdings BV ‘Campus Coppens Holding company Ordinary 100% 100% Rulterischoo! 6 2930 Brasschaat, Belgium Harvest Energy Marine BV ‘Campus Coppens Marine fut sales Ordinary 100% 100% Rulterischoo! 6 2930 Brasschaat, Belgium Prax Bunker Netherlands BV Campagneweg 11, Marine fuel sales Ordinary 100% 100% 4761RM_Zevenbergen [Netherlands