Source - PRN

KAROO ENERGY PLC

(“Karoo Energy” or the “Company”)

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 APRIL 2016

CHIEF EXECUTIVE OFFICER’S STATEMENT

I am pleased to announce that the company has made significant operational progress on its shale gas and CBM licenses in Botswana’s Kalahari-Karoo basin and we expect to make an announcement in the near future with the initial results of our drilling program to-date.

At a corporate level we were delighted to welcome Dr Allen Zimbler to the Board of Karoo Energy Plc as our new Non-Executive Chairman.

Dr Zimbler retired from Investec Bank plc at the end of March 2016, having held the positions of Chief Integration Officer of the group, member of the group executive, and executive director of Investec Bank plc. Allen first started at Investec Bank plc in September 2001.

Prior to 2001, Dr Zimbler ran his own strategic management and organisation development consultancy over a twenty-year period. During this time he consulted to numerous organisations internationally, including Investec Bank plc, in the fields of culture, strategy formulation and implementation and organisation development. He specialised in the retail, financial services and information technology sectors.

FINANCIALS

The financial results for the year ended 30 April 2016 show a loss after taxation of GBP357,691 (2015: GBP159,302).

 The directors do not recommend payment of a dividend (2015: £Nil).

OUTLOOK

I am pleased at the progress made since my last report to shareholders and look forward to providing investors with detail on further progress over the coming months.

Noel Lyons

Chief Executive Officer,

5 October 2016

The Directors of Karoo Energy accept responsibility for the content of this announcement.

ENQUIRIES:

Company

Noel Lyons

020 3130 0674

Corporate Adviser

Peterhouse Corporate Finance Limited

Guy Miller / Mark Anwyl

Telephone: 020 7220 9796

Consolidated Income Statement for the year ended 30 April

2016 2015
£ £
Revenue - -
Cost of sales - -
Gross profit - -
Administrative expenses (356,285) (159,257)
Operating loss (356,285) (159,257)
Finance costs (3,260) (523)
Loss before taxation (359,545) (159,780)
Taxation - -
  Non-controlling interest 1,854 478
Loss for the financial year attributable to the Company’s equity shareholders (357,691) (159,302)
Loss per share from operations
Basic and diluted loss per share (pence) (0.2341) (0.1124)

Consolidated Statement of Comprehensive Income for the year ended 30 April

2016 2015
£ £
Loss for the financial year (357,691) (159,302)
Total comprehensive income for the financial year attributable to the Company’s equity shareholders (357,691) (159,302)

All amounts relate to continuing operations.

Consolidated Balance Sheet as at 30 April

2016 2015
Assets £ £
Non-current assets
Intangible assets 362,252 214,396
Current assets
Trade and other receivables 19,011 42,253
Investments - 226
Cash and cash equivalents 294,546 29,152
313,557 71,631
Total Assets 675,809 286,027
Equity and liabilities
Capital and reserves
Share capital 450,449 362,264
Share premium 1,576,659 431,572
Retained earnings (1,696,734) (638,635)
Shareholders’ funds 330,374 155,201
Non-controlling Interests 5,303 6,922
335,667 162,123
Current liabilities:
Trade and other payables

340,132

123,904
Total equity and liabilities 675,809 286,027

The financial statements were approved by the Board of Directors on 5 October 2016 and were signed on its behalf by:

Noel Lyons

Director

Consolidated Statement of Changes in Equity    

Share
capital
Share premium Retained
earnings
Non-controlling interests Total
£ £ £ £ £
For the year ended 30 April 2016
Balance at 1 May 2015 362,264 431,572 (638,635) 6,922 162,123
Loss for the financial year - - (357,691) (1,854) (359,545)
Total comprehensive income - - (357,691) (1,854) (359,545)
Issue of shares 88,185 1,145,087 - - 1,233,272
Acquisition of non-controlling interests - - (700,408) 235 (700,173)
Balance at 30 April 2016 450,449 1,576,659 (1,696,734) 5,303 335,677
For the year ended 30 April 2015
Balance at 1 May 2014 344,764 309,072 (520,317) 1,863 135,382
Loss for the financial year - - (159,302) (478) (159,780)
Total comprehensive income - - (159,302) (478) (159,780)
Issue of shares 17,500 122,500 - - 140,000
Non-controlling interest on acquisition - - - 5,537 5,537
Share based payments - - 40,984 - 40,984
Balance at 30 April 2015 362,264 431,572 (638,635) 6,922 162,123

Consolidated Statement of Cash Flows for the year ended 30 April

2016 2015
£ £
Cash flow from operating activities
Loss for the financial year before tax (359,545) (159,780)
Finance costs 3,260 523
Revaluation loss on investments 226 -
Share based payments - 40,984
(356,059) (118,273)
Changes in working capital
Decrease / (increase) in trade and other receivables 23,242 (11,029)
Increase in trade and other payables 142,968 57,990
Cash outflow from operating activities (189,849) (71,312)
Cash flow from investing activities
Cash spend on exploration activities (147,856) -
Acquisition of business - (42,827)
Net cash used in investing activities (147,856) (42,827)
Cash flow from financing activities
Issue of shares 533,099 140,000
Proceeds from related party loan 70,000 -
Net cash from in financing activities 603,099 140,000
Net increase in cash and cash equivalents 265,394 25,861
Cash and cash equivalents at beginning of financial year 29,152 3,291
Cash and cash equivalents at end of financial year 294,546 29,152

Going concern

During the year ended 30 April 2016 the Group made a loss of £357,691 (2015: a loss of £159,780).  Whilst the Group had net assets of £335,667 (2015: net assets of £162,123) as at 30 April 2016 it had net current liabilities of £26,575 (2015: net current liabilities of £52,273) at that date. The operations of the Group are primarily financed from funds which the Parent Company raises from share placings.

The Group's capital management policy is to raise sufficient funding to finance the Group’s near term exploration and development objectives.

The Company successfully raised £533,100 through share placings (excluding those shares issued to acquire the 15% of Tamboran Botswana (Pty) Limited and 7.5% of Equatorial Oil & Gas plc (see note 21) during the year and had raised a further £200,000 subsequent to the year end. The Group had a cash balance of £180,488 at 4 October 2016. The Group will need to raise additional cash funding to support both working capital requirements and its obligations under the exploration licences, as set out in note 23 regarding the Group financial commitments. Should such funding not be obtained, the Group would fail to meet the required annual spend on the exploration licences which in turn may lead to exploration assets being impaired and potentially even revoked by the Ministry of Mines in Botswana.

The Directors believe that the Group will be able to raise as required, sufficient cash to enable it to continue its operations, and continue to meet, as and when they fall due, its planned and committed exploration and development activities and liabilities for at least the next twelve months from the date of approval of these financial statements. For this reason, the Directors continue to adopt the going concern basis in preparing the accounts. However, there can be no guarantee that the required funds we be raised within the necessary timeframe.

Consequently, a material uncertainty exists that may cast doubt on the Group's ability to continue to operate as planned and to be able to meet its commitments and discharge its liabilities in the normal course of business for a period not less than twelve months from the date of this report. The financial statements do not include the adjustments that would result if the Group was unable to continue in operation.